CA CMA CS Final

Indirect Taxation
(GST + Customs)

Amendment Booklet

For May 2024 Exams

[Amendments from
1-05-2023 to 31-10-2023]

CA Raj kumar
About CA RAJ KUMAR

CA Raj Kumar is a dynamic & qualified Chartered Accountant. As a

brilliant student and a position holder at Graduation & Post Graduation
level, during his 16 years of glorious teaching experience in the field
of Indirect Taxation he has taught over 1,70,000 students.

He is a favorite amongst CA Students for the astute &

insightful academic inputs provided by him and for his
pleasing & endearing personality and lucid art of teaching.

He firmly believes in blending studies with fun and this is

quite evident in his classes wherein he goes beyond
theoretical reading of the subject, makes students solve
practical problems, gives them practical real life examples
and pushes them to achieve their goals with full precision.

In the subject Indirect Tax Laws, his students have

continued to score 10 times AIR #1 and All India Highest
Marks for 11 times till now. He has also been entrusted by
Government agencies to show the ropes to IRS Officers in
training, which is a testament to his caliber as a subject
matter expert.

He is famous for concepts linkage from the very beginning till

the end which helps in understanding the topic, acing the
exams and in post CA life as well. His unique use of GST
portal during the class to link theory with Practical
makes him stand apart from the crowd. His classes are
practical, conceptual and concise. He is also the author of
bestselling titles 'GST Compact Book'.
 Goods and Services Tax
Chapter III Definitions III.1
Chapter V Introduction to IGST V.1
Chapter 1 Goods and Services and Chargeability 1.1
Chapter 2 Supply 2.1
Chapter 3 Place of Supply 3.1
Chapter 4 Taxable Person 4.1
Chapter 5 Exemption 5.1
Chapter 6 Computation of GST 6.1
Chapter 7 Reverse Charge Mechanism 7.1
Chapter 8 Invoice 8.1
Chapter 9 Time of Supply 9.1
Chapter 10 Input Tax Credit 10.1
Chapter 11 Registration 11.1
Chapter 12 Manner of Payments 12.1
Chapter 13 Return 13.1
Chapter 15 Refunds 15.1
Chapter 16 Assessment 16.1
Chapter 19 Demand and Recovery 19.1
Chapter 20 Penalties 20.1
Chapter 21 Appeal 21.1
Chapter 22 E – Way Bill 22.1
Chapter 24 Ethics under GST 24.1
Chapter 25 Misc. Provisions 25.1

Custom Laws
Chapter 5 Import – Export Procedure 5.1
Chapter 15 FTP,2023 15.1
Ch.III Definitions

Ch III DEFiNiTiONS

1. ACTIONABLE CLAIM :

Actionable claim is Defined under “Transfer of However under GST-Regime Actionable claim
property Act, 1882, - Relating to Lottery, Betting, Gambling ALONE
will be Regarded as supply of Goods.
In simple wording – Actionable claim means –
as – I have Right to Receive any Benefit/ REST of the forms of Actionable Claim – will
Assets in future – which is CONTIGENT ie NOT be treated as supply of Goods or
contingent Assets. services.

For Example: Hence NO Question of GST.

Ÿ Betting, Gambling, Lottery
Ÿ Pending Litigations
Ÿ Insurance claim
Ÿ Unsecured debts.
Ÿ Etc.

WHAT ABOUT: DTH VOUCHERS/Promo codes/Foods Coupons: Not an Actionable Claim.

2. ADJUCATING AUTHORITY : “Adjudicating Authority” means:

ª Any authority, appointed or authorised to pass any order or decision under this Act,
ª but does not include
Ÿ the Central Board of Indirect Taxes and Customs,
Ÿ the Revisional Authority,
Ÿ the Authority for Advance Ruling,
Ÿ the Appellate Authority for Advance Ruling,
Ÿ the National Appellate Authority for Advance Ruling, [FA 2019: but not effective yet]
Ÿ the Appellate Authority,
Ÿ the Appellate Tribunal.

Analysis

CA Rajkumar III.1
Ch.III Definitions

39. NOTIFICATIONS: * C.G. & SG – ARE EMPOWERED TO ISSUE Notifications to give effect
to – Certain provisions. eg. Levy, Exemptions, RCM, Classification etc.

STATES AND UT

(103) “State” includes union Territory with legislature.

(114) “Union territory” means the territory of-
(a) the Andaman and Nicobar Islands;
(b) Lakshadweep;
(c) Dadra and Nagar Haveli; AND DAMAN and DIU
(d) LADAKH Daman and Diu
(e) Chandigarh; and

"online gaming" means:

Ÿ offering of a game on the internet or an electronic network and
Ÿ includes online money gaming;

“online money gaming" means:

Ÿ online gaming in which players pay or deposit money or money's worth, including virtual digital
assets,
Ÿ in the expectation of winning money or money's worth, including virtual digital assets,
Ÿ in any event including game, scheme, competition or any other activity or process,
Ÿ whether or not its outcome or performance is based on skill, chance or both and
Ÿ whether the same is permissible or otherwise under any other law for the time being in force;';

81. OTHER TERRITORY- Includes territories other than

Ÿ Delhi and Puducherry

Ÿ the Andaman and Nicobar Islands;

Ÿ Lakshadweep;

Ÿ Dadra and Nagar Haveli;

Ÿ Daman and Diu

Ÿ Chandigarh

IN simple wordings: other territory Means Residuary PART. [eg Oil Rigs Area in EEZ]

CA Rajkumar III.19
Ch.III Definitions

52. SECURITY: shall have the same meaning as assigned to it in section 2 of the Securities
Contracts (Regulation) Act, 1956.

Section 2(h) 'securities' include—

(i) Shares, bonds, debentures, debenture stock or other marketable securities.
(ia) units of mutual fund.
(ii) Government securities
(iii) etc.

53. SERVICE: Means:

Ÿ anything other than goods, money and securities

Ÿ but includes activities relating to the use of money or its conversion by cash or by any
other mode,
Ÿ from one form, currency or denomination,

Ÿ to another form, currency or denomination

Ÿ for which a separate consideration is charged.

Note: For the removal of doubts, it is hereby clarified that the expression “services” includes
facilitating or arranging transactions in securities.

54. STATE TAX: State Specific GST eg. UP-GST, HR-GST, etc.

55. SUPPLIER: “Supplier” in relation to any goods or services or both, shall mean:
Ÿ The person supplying the said goods or services or both and

Ÿ shall include an agent acting as such on behalf of such supplier

Ÿ in relation to the goods or services or both supplied.

Provided that a person

Ü Who organises or arranges, directly or indirectly, supply of specified actionable claims,

Ü including a person who owns, operates or manages digital or electronic platform for such
supply,
Ü shall be deemed to be a supplier of such actionable claims,

Ü whether such actionable claims are supplied by him or through him and whether
consideration in money or money's worth, including virtual digital assets,

CA Rajkumar III.23
 Definitions Ch.III

Ü for supply of such actionable claims is paid or conveyed to him or through him or placed at
his disposal in any manner, and
Ü all the provisions of this Act shall apply to such supplier of specified actionable claims,

Ü as if he is the supplier liable to pay the tax in relation to the supply of such actionable
claims;";

PERSON + Supply Goods/Service + Including Agent

* Either Registered or NOT The work done by An Agent

* Even Taxable person or NOT (Sale/Invoice etc.) shall treated as
(As Law maker want to keep done by PRINCIPAL.
Such persons under GST who is
NOT Even Registered or Taxable
Person)

56. TAX PERIOD: The period of which RETURN [Monthly/Quarterly] is required to be furnished.

57. TURNOVER IN A STATE: Turnover in State” or “Turnover in Union Territory” means:

Ÿ 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
Ÿ exempt supplies made within a State or Union territory by a taxable person,

Ÿ exports of goods or services or both and

Ÿ inter-State supplies of goods or services or both made from the State or Union territory by the
said taxable person
Ÿ but excludes central tax, State tax, Union territory tax, integrated tax and cess;

It is a Replica of “Aggregate Turnover” But limited to STATE/UT.

Note: T/O in a State – Required in the concept of Composition Scheme.

58. UT-GST ACT: - UT-GST ACT, 2017.

58. VALID RETURN: Valid Return” means a return furnished under section 39(1) on which self-
assessed tax has been paid in full.

III.24 CA Rajkumar
Ch.III Definitions

The Return - ON WHICH-SELF ASSESED TAX-PAID IN FULL.

Note: Full ITC will be available to Recipient only IF Return furnished by the supplier is a valid
Return.

60. "virtual digital asset":

Ü shall have the same meaning as assigned to it

Ü in section 2(47A) of the Income-tax Act.

'(102A) "specified actionable claim" means the actionable claim involved in or by way of—
(i) Betting;
(ii) Casinos;
(iii) Gambling;
(iv) Horse racing;
(v) Lottery; or
(vi) Online money gaming

61. WORKS CONTRACT means:

Ÿ A contract for building, construction, fabrication, completion, erection, installation, fitting out,
improvement, modification, repair, maintenance, renovation, alteration or commissioning
Ÿ 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.

* [Goods + Service] @ Single PRICE [Which will be classified as SERVICE]

BUT LIMITED TO IMMOVABLE PROPERTY

What about (Goods + Service) @ Single

PRICE & Resultant Property is an movable
property – then Depend: eg. Service/Goods
cannot be called as works contract.

CA Rajkumar III.25
 Definitions Ch.III

Definitions under IGST ACT, 2017: Section 2

1. CONTINUOUS JOURNEY: “means a journey for which a single or more than one ticket or
invoice is issued at the same time, either by a single supplier of service or through an
agent acting on behalf of more than one supplier of service, and which involves no
stopover between any of the legs of the journey for which one or more separate tickets or
invoices are issued.
Explanation.––For the purposes of this clause, the term “stopover” means a place where a
passenger can disembark either to transfer to another conveyance or break his journey for a
certain period in order to resume it at a later point of time;

* A Journey for which a Single Ticket or more than one ticket/Invoice is issued
It is Relevant
AT THE SAME TIME (Either by Single Supplier or through an Agenton Behalf of
for Place of
More than one supplier).
Supply
* NO STOP OVER (stopover means: A place where passenger disembarks
from the conveyance i.e. Break in Journey) between any of the legs of Journey,
(For which above tickets are issued).

CRUX: * Ticket: Single Ho To Very well

But If Multiple Hai to Same time issue HONA CHAHIYE.
* Journey: Halt NAHI Hai To very well
IF Halt Hai To Passenger Plane SE UTARNA NAHI CHAHIYE

Dubai
Note: Return Journey – will be
treated AS SEPARATE JOURNEY
Halt for 1 Hr. & Passenger Unload
ALWAYS. [For flight change or Resume in Same]

Bangalore

New York
“Above Journeys are - Not a Continuous Journey

III.26 CA Rajkumar
Ch.III Definitions

2. CUSTOM FRONTIER OF INDIA: means the limits of a customs area as defined in section
2 of the Customs Act, 1962.

Foreign Post Office

International
= Means limit of: Custom AREA Including Courier
Terminal
Bonded Warehouse

AREA of Custom Station

IF Supply made Custom Port (INCLUDING DRY PORT)

After Clearance Custom Airport (INCLUDING AIR Freight Station)
Liable to IGST or Land Custom Station
CGST & SGST (Depend)

3. EXPORT OF GOODS: Means - * taking goods out of INDIA.

* to A place Outside INDIA.
*No condition of Foreign Currency as Required in
EXPORT OF SERVICE.
Note: EXPORT of Goods called Zero Rated supply, So ITC on INPUT etc. shall be allowed & the
person can use it or get Refund of the ITC.

4. EXPORT OF SERVICE: Export of services” means the supply of any service when,––
(i) The supplier of service is located in India;
(ii) The recipient of service is located outside India;
(iii) The place of supply of service is outside India;
(iv) The payment for such service has been received by the supplier of service in convertible
foreign exchange; or in Indian rupees wherever permitted by the Reserve Bank of India and
(v) The supplier of service and the recipient of service are not merely establishments of a
distinct person in accordance with Explanation 1 in section 8.

Clarification on export of services under GST: Circular No. 78/52/2018

Illustration: ABC Ltd. India has received an order for supply of services amounting to $ 5,00,000/-
to a US based client. ABC Ltd. India is unable to supply the entire services from India and asks
XYZ Ltd. Mexico (who is not merely an establishment of a distinct person viz. ABC Ltd. India, in
accordance with the Explanation 1 in Section 8 of the IGST Act) to supply a part of the services
(say 40% of the total contract value). ABC Ltd. India shall be the exporter of services for the entire
value if the invoice for the entire amount is raised by ABC Ltd. India. The services provided by
XYZ Ltd. Mexico to the US based client shall be import of services by ABC Ltd. India and it would
be liable to pay integrated tax on the same under reverse charge and also be eligible to take
input tax credit of the integrated tax so paid. Further, if the provisions contained in section 2(6)

CA Rajkumar III.27
 Definitions Ch.III

of the IGST Act are not fulfilled with respect to the realization of convertible foreign exchange,
say only 60% of the consideration is received in India and the remaining amount is directly paid
by the US based client to XYZ Ltd. Mexico, even in such a scenario, 100% of the total contract
value shall be taken as consideration for the export of services by ABC Ltd. India provided
integrated tax on import of services has been paid on the part of the services provided by XYZ
Ltd Mexico directly to the US based client and RBI (by general instruction or by specific approval)
has allowed that a part of the consideration for such exports can be retained outside India. In
other words, in such cases, the export benefit will be available for the total realization of
convertible foreign exchange by ABC Ltd. India and XYZ Ltd. Mexico.

Circular No. 202/14/2023: Clarification relating to export of services- (Payment in Foreign

Currency)

It is clarified that

Ü When the Indian exporters, undertaking export of services, are paid the export proceeds in INR
from the Special Rupee Vostro Accounts of correspondent bank(s) of the partner trading
country, opened by AD banks,
Ü the same shall be considered to be fulfilling the conditions of (iv) [Payment in Foreign
Currency],
Ü subject to the conditions/ restrictions mentioned in Foreign Trade Policy, 2023 & extant RBI
Circulars and without prejudice to the permissions / approvals, if any, required under any other
law .

5. FIXED ESTABLISHMENT: Same Definition as IN GST.

6. GST- (Compensation to STATE) ACT: Means – GST (Compensation to State) CESS ACT, 2017
Note: (CESS CESS)

7. GOVT: Means – Central Govt. – as it is IGST ACT.

8. IMPORT OF GOODS: * Bringing Goods into INDIA.

* From a Place outside INDIA.

9. IMPORT OF SERVICE: means the supply of any service, where––

(i) The supplier of service is located outside India;
(ii) The recipient of service is located in India; and
(iii) The place of supply of service is in India;

III.28 CA Rajkumar
Ch.III Definitions

10. INTEGRATED TAX: IGST @ 40% Maximum.

11. INTERMEDIARY: “Intermediary” means a broker, an agent or any other person, by whatever
name called, who arranges or facilitates the supply of goods or services or both, or securities,
between two or more persons, but does not include a person who supplies such goods or services or
both or securities on his own account.

Intermediary Means:
* Who Arranges or facilitates supply of Goods/Service (MAIN)
* Between 2 or more persons
eg. Air Travel Agent
* BUT does NOT INCLUDE the person – who supply the
eg. Insurance Agent.
Goods/Service – On his own Account)
Eg. consign. Agent

Note: PoS For Intermediary (During Import-Export Transactions)

is Location of Supplier

12. LOCATION OF RECIPIENT: * Registered Place (HO)

* Branch Office
* HO/Branch
* Residence

13. LOCATION OF SUPPLIER:

14. Non-Taxable online Recipient"

means any unregistered person and the person who is registered as TDS Deductor only,
receiving online information and database access or retrieval services located in taxable territory.

15. OIDAR: “Online Information and Database Access or Retrieval (OIDAR) Services” means services
whose delivery is mediated by information technology over the internet or an electronic network and
the nature of which renders their supply essentially automated and involving minimal human
intervention and impossible to ensure in the absence of information technology and includes
electronic services such as,––
(i) Advertising on the internet;
(ii) Providing cloud services;
(iii) Provision of e-books, movie, music, software and other intangibles through
telecommunication networks or internet;
(iv) Providing data or information, retrievable or otherwise, to any person in electronic form
through a computer network;
(v) Online supplies of digital content (movies, television shows, music and the like);
(vi) Digital data storage; and
(vii) online gaming, excluding the online money gaming as defined in clause (80B) [Online money
Gaming] of section 2 of the CGST Act, 2017. e
e

CA Rajkumar III.29
Ch.V Introduction to IGST

Ch V iNTRODUCTiON TO iGST

PRELIMINARY
Section 1 : Short title, extent and commencement
Section 2 : Definitions.

ADMINISTRATION
Section 3 : Appointment of officers.
Section 4 : Authorisation of officers of State tax or Union territory tax as proper officer in
certain circumstances

LEVY AND COLLECTION OF TAX

Section 5 : Levy and collection.
Section 6 : Power to grant exemption from tax.

DETERMINATION OF NATURE OF SUPPLY

Section 7 : Inter-State supply
Section 8 : Intra-State supply.
Section 9 : Supplies in territorial waters.

PLACE OF SUPPLY OF GOODS OR SERVICES OR BOTH

Section 10: Place of supply of goods other than supply of goods imported into, or exported
from India.
Section 11: Place of supply of goods imported into, or exported from India.
Section 12 : Place of supply of services where location of supplier and recipient is in India
Section 13: Place of supply of services where location of supplier or location of recipient is
outside India.
Section 14 : Special provision for payment of tax by a supplier of online information and
database access or retrieval services

CA Rajkumar V.1
Ch.V Introduction to IGST

Analysis

Refund (E) Goods (F) Abroad

Indian International (Export)
GST Department Airport

IGST Refund
Sanction u/s 15
{Delhi}

Shopping (B)
Return (D)
(C) Goods = XXX
IGST = XXX
Total = XXX
[Sec 7/8 of IGST Act (Inter)] Tourist (A)

Section 16: Zero rated supply

(1) “Zero rated supply” means any of the following supplies of goods or
What is Zero
services or both, namely:––
Rated Supply
(a) Export of goods or services or both; or
(b) Supply of goods or services or both [for authorised operations] to a
Special Economic Zone developer or a Special Economic Zone unit.
Deemed Export: NOTIFICATION No. 48/2017–Central Tax
SN Description of supply
1. Supply of goods by a registered person against Advance Authorisation
2. Supply of capital goods by a registered person against Export Promotion
Capital Goods Authorisation
3. Supply of goods by a registered person to Export Oriented Unit
4. Supply of gold by a bank or Public Sector Undertaking against Advance
Authorisation.

Input tax (2) Credit of input tax may be availed for making zero-rated supplies,
credit allowed even though that such supply is an exempt supply.

CA Rajkumar V.3
 Introduction to IGST Ch.V

Claim refund (3) A registered person making zero rated supply shall be eligible to claim
of ITC or refund of unutilised input tax credit on supply of goods or services or both,
Output tax without payment of integrated tax, under bond or Letter of Undertaking, in
paid (As the accordance with the provisions of section 54 of the Central Goods and Services
case may be)
Tax Act or the rules made thereunder, subject to such conditions, safeguards and
procedure as may be prescribed:
Provided that
Ÿ the registered person making zero rated supply of goods

Ÿ shall, in case of non-realisation of sale proceeds,

Ÿ be liable to deposit the refund so received under this sub-section along with
the applicable interest under section 50 of the Central Goods and Services Tax
Act
Ÿ within 30 days after the expiry of the time limit prescribed under the Foreign
Exchange Management Act, 1999.
Ÿ for receipt of foreign exchange remittances, in such manner as may be
prescribed.
(4) The Government may and subject to such conditions, safeguards and
procedures, by notification, specify––
(i) A class of persons who may make zero rated supply on payment of
integrated tax and claim refund of the tax so paid;
(ii) A class of goods or services which may be exported on payment of IGST
and the supplier of such goods or services may claim the refund of tax so
paid.”

Circular No. 1/1/2017: It is hereby clarified that provisions of section 16 of the IGST Act, 2017,
relating to zero rated supply will also apply on Compensation Cess, wherever applicable.

V.4 CA Rajkumar
Ch.1 Goods and Services

Ch 1 GOODS AND SERViCES

Section 1: Short title and commencement

(1) This Act may be called the Central Goods and Services Tax Act, 2017.
(2) It extends to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the
Official Gazette, appoint:

Section: 1 of IGST Act, 2017: Short title, extent and commencement

(1) This Act may be called the Integrated Goods and Services Tax Act, 2017.
(2) It shall extend to the whole of India.
(3) It shall come into force on such date as the Central Government may, by notification in the
Official Gazette, appoint:.

Section 9: CHARGING SECTION/PROVISION

Main (1) There shall be levied a tax called the CGST

provision Ÿ On all intra-State supplies of goods or services or both, except on the
supply of alcoholic liquor for human consumption,
Ÿ On the value determined under section 15 and

Ÿ At such rates, not exceeding 20 %, as may be notified by the

Government on the recommendations of the Council and
Ÿ Collected in such manner as may be prescribed and

Ÿ Shall be paid by the taxable person.

5 Petroleum (2) The CGST on the supply of petroleum crude, high speed diesel, motor
Products spirit (commonly known as petrol), natural gas and aviation turbine fuel
shall be levied with effect from such date as may be notified by the
Government on the recommendations of the Council.
Reverse charge (3): Notified Goods/Services: RCM - The Government may, by notification,
Mechanism on specify
notified
supplies, where Ÿ Categories of supply of goods or services or both,
supplier is Ÿ the tax on which shall be paid on reverse charge basis by the recipient .
unregistered
4) Unregistered person make supply of GOODS/SERVICES to a Registered
Person: RCM-The Government may, by notification, specify

1.1
 Goods and Services Ch.1

Ÿ A class of registered persons who shall,

Ÿ in respect of supply of specified categories of goods or services or
both
Ÿ received from an unregistered supplier,
Ÿ pay the tax on reverse charge basis

E- Commerce (5) On notified services CGST shall be collected from E-commerce operator
Operator having place of Business in India But where Ecommerce operator has No
Place of Business in India then he need to setup a place of Business in India
or to appoint any person as agent.

Notified Services and their provisions are as follows:

Hotel Accommodation E-Commerce Operator will However if the real supplier
Service: be the deemed supplier (Hotel) is crossing the limit of 10
(eg OYO) and liable to pay GST. Lakh or 20 Lakh then Hotel Liable
to Pay GST.
Misc. Utilities (e.g. E-commerce operator i.e. However if Real Supplier of
urban clap): (Urban Clap) will be service crossing the limit of Rs.
deemed supplier and 10 lakh/20 lakh then Real
Liable to Pay GST. supplier liable to pay GST.
Passenger Transportation E-commerce operator (e.g.
Service by radio taxi, Uber/OLA) will be deemed
motorcab, maxi-cab, motor supplier of service and
cycle or any other motor Always liable to pay GST.
vehicle except omnibus

S e r v i c e s b y w a y o f - E- eommerce operator
transportation of passengers will be deemed supplier of
by an omnibus except where service and always liable to
the person supplying such pay GST
service through electronic
commerce operator is a
company

Supply of restaurant E-commerce operator will However, Real supplier liable to

service be deemed supplier of pay GST on the services supplied
service and Always liable by restaurant, eating joints etc.,
to pay GST located at the premises
providing hotel accommodation
service having declared tariff of
any unit of accommodation
above Rs.7,500 per unit per day
or equivalent.”

What about Rest of the Section 9(5) not applicable Always Real supplier Liable to
Services and Goods pay GST

1.2 CA Rajkumar
Ch.1 Goods and Services

Radio Taxi” Radio Taxi” means a taxi including a radio cab, by whatever name called,
which is in two-way radio communication with a central control office and is
enabled for tracking using Global Positioning System (GPS) or General
Packet Radio Service (GPRS);

Maxicab Maxicab means having seating capacity @ 7 to 12 persons.

Motorcab Motorcab means having seating capacity @ upto 6

Motor cycle Motor cycle means - 2 wheeled with or without sidecar,

Company Company has the same meaning as assigned to it in section 2(20) of the
Companies Act, 2013

ANALYSIS of Section 9
Section 9 (1) (2): Supplier liable to pay GST:

Goods or services Except

Alcoholic Liquor For There must be The supply should
human Consumption a supply be INTRA State
and 5 Petroleum Products

Value under section 15

or as per valuation Rules The supply should It should be made by
Maximum Rate: 20% not be Exempted taxable person

Collected in prescribed
manner based on time Paid by supplier
of supply

Section 9(3) (4)Recepient liable to pay GST

Section 9 (3): Gives Power to Government to Impose RCM in specified Services

Notified Goods /Services Eg. Goods

Transport Agency Advocate services

Supplier Recepient

1.3
 Goods and Services Ch.1

Basis Section 9 of CGST Section 5 of IGST

Nature of supply Intra state Inter state
Maximum Rate of GST 14% 28%
Special provision for - IGST ON IMPORT OF GOODS: The IGST on
import of goods goods imported into India shall be
Ÿ Levied and collected in accordance with the
provisions of section 3 of the Customs Tariff
Act, 1975
Ÿ on the value as determined under the said
Act
Ÿ at the point when BASIC CUSTOM DUTY
levied on the said goods.
Note : The Government, notifies
Ÿ The supply of online money gaming as
the goods on import of which the proviso
to Section 5(1) of the said Act shall not
apply.
Ÿ But on which IGST shall be levied and
collected under Section 5(1) of the said Act

1.6 CA Rajkumar
Ch.2 Supply of Goods or services

SUPPLY OF GOODS OR SERVICES

Ch 2
(TAXABLE EVENT)

There are two sections in this chapter read with 3 schedules. Supply is the Taxable event to levy
GST i.e. It is the backbone for levying GST.

Section 7: Defines:

Part – A : Meaning of supply [Read with Schedule: I]

Part – B : After being supply – It will be supply of goods or supply of service such
distinguishment will be discussed as per schedule – II
Part – C : Some of the Activities/transaction will never be treated as Supply and
consequently not liable to GST as per schedule – III.

Section 8: It describes treatment of composite and Mix supply treatment.

GATE NO.2

SUPPLY OF GOODS/SERVICE

Following Activities are Supplies Following are Supplies

If FOR A Consideration EVEN IF NO Consideration EXISTS

All form of supply of Goods/SERVICE such as: Supply of Goods/services Between RELATED
- Sale PERSONS OR DEEMED DISTINCT PERSONS
- Exchange eg. Stock T/F
- Transfer PERMANENT Transfer/disposal of Business
- Barter Assets [if ITC availed already]
- License
- Renting
- Lease
- Disposal
Made or to be made IN THE COURSE or
furtherance of Business
Transactions between club and members Import of service by a person from a related
person or from any of his other establishment
outside India (for business)
Importation of services (business/Personnel) Agency Activity: Movement of GOODS
between principle & agent.

CA Rajkumar 2.1
Ch.2 Supply of Goods or services

SCHEDULE III: ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER

AS A SUPPLY OF GOODS NOR A SUPPLY OF SERVICES

NTT to NTT 1. Supply of goods from a place in the non-taxable territory to another place in
the non-taxable territory without such goods entering into India.
Actually Effected from 1/02/2019 but now deemed to be effected From
1/07/2017:
Explanation: The persons who have paid GST - No refund shall be granted to
those persons and the persons who have not paid no collection of Tax will be
made from those persons.
Employee to Employer 2. Services by an employee to the employer in the course of or in
(Including Whole relation to his employment shall not be treated as supply.
Time Director)

Warehouse goods
3. (a) Supply of warehoused goods to any person before clearance for home
consumption;
(b) Supply of goods by the consignee to any other person, by endorsement of
documents of title to the goods, after the goods have been dispatched
from the port of origin located outside India but before clearance for
home consumption.
Examples:
a. Mr. A purchased goods from China and sold it to Mr. John in Canada
without bringing the goods in India. This transaction is neither supply of
goods nor supply of services.
b. Mr. X Imported some goods in India, but kept the goods in custom
bonded warehouse without clearing it for home consumption. In the
meantime, Mr. X sold these goods to Mr. Y while they were in warehouse.
This transaction between Mr. X and Mr. Y is neither supply of goods nor
supply of services.
c. Mr. P. of India imported some goods from Japan. While the goods were
in high seas, Mr. P sold the goods to Mr. Q in India by way of
endorsement of document of title of goods. This transaction between
Mr. P and Mr. Q is neither supply of goods nor supply of services.
Actually Effected from 1/02/2019 but now deemed to be effected From
1/07/2017:
Explanation: The persons who have paid GST - No refund shall be granted to
those persons and the persons who have not paid no collection of Tax will be
made from those persons.

CA Rajkumar 2.17
 Supply of Goods or Services Ch.2

Mortuary 4. Services of funeral, burial, crematorium or mortuary including

Services transportation of the deceased shall not be treated as supply.

Actionable Claim 5. Actionable claims shall not be treated as supply, but specified
actionable claims SHALL BE TREATED AS A SUPPLY.

Government 6. (a) The functions performed by the Members of Parliament,

Peoples Members of State Legislature, Members of Panchayats, Members
of Municipalities and Members of other local authorities; shall
not be treated as supply.
(b) The duties performed by any person who holds any post in
pursuance of the provisions of the Constitution in that
capacity; shall not be treated as supply or
(c) The duties performed by any person as a Chairperson or a
Member or a Part time Director in a body established by the
Central Government or a State Government or local authority
shall not be treated as supply.

Immovable Property 7. Sale of land, sale of competed building shall not be treated as supply.

Court etc. 8. Services by any court or Tribunal established under any law shall not
be treated as supply.

Section 7(3)
The Government may notify 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.

Section 8: Tax liability on Composite and Mixed supply

GST is payable on individual goods or services or both at the notified rates. The application of
rates poses no problem if the supply is of individual goods or individual services, which is clearly
identifiable and such goods or services are subject to a particular rate of tax.

However, in certain cases, supplies are not such simple and clearly identifiable supplies. Some of
the supplies are a combination of goods or combination of services or combination of goods and
services both and each individual component of such supplies may attract a different rate of tax.
In such a case, the rate of tax to be levied on such supplies may be a challenge. It is for this
reason, that the GST Law identifies composite supplies and mixed supplies and provides certainty
in respect of tax treatment under GST for such supplies.

In order to determine whether the supplies are 'composite supplies' or 'mixed supplies', one
needs to determine whether the supplies are naturally bundled or not naturally bundled in
ordinary course of business.

2.18 CA Rajkumar
 Supply of Goods or Services Ch.2

Note: No straight jacket formula can be laid down to determine whether a service is naturally
bundled in the ordinary course of business. Each case has to be individually examined in the backdrop
of several factors.

Various clarifications

Question 1: Whether supply of books, pamphlets, brochures, envelopes, annual reports, leaflets,
cartons, boxes etc., printed with design, logo, name, address or other contents supplied by the
recipient of such supplies, would constitute supply of or supply of services?

Answer: [Circular No. 11/11/2017]

In the case of printing of books, pamphlets, In case of supply of printed envelopes,

brochures, annual reports, and the like, letter cards, printed boxes, tissues, napkins,
where only content is supplied by the wall paper etc. printed with design, logo etc.
publisher or the person who owns the usage supplied by the recipient of goods but made
rights to the intangible inputs while the using physical inputs including paper
physical inputs including paper used for belonging to the printer, predominant supply
printing belong to the printer, supply of is that of goods and the supply of printing of
printing [of the content supplied by the the content [supplied by the recipient of
recipient of supply] is the principal supply and supply] is ancillary to the principal supply of
therefore such supplies would constitute goods and therefore such supplies would
supply of service. constitute supply of goods.

2.20 CA Rajkumar
 Supply of Goods or Services Ch.2

(viii) Cancellation charges recovered by railways for cancellation of tickets, etc.

Question 12 Taxability of shares held in a subsidiary company by the holding company: Whether
the activity of holding shares by a holding company of the subsidiary company will be treated as a
supply of service or not and whether the same will attract GST or not. [ Circular No. 196/08/2023:
Ans. Securities are considered neither goods nor services. Further, securities include 'shares' as per definition
of securities.

This implies that the securities held by the holding company in the subsidiary company are neither goods nor
services. Further, purchase or sale of shares or securities, in itself is neither a supply of goods nor a supply of
services.

For a transaction/activity to be treated as supply of services, there must be a supply.

It cannot be said that a service is being provided by the holding company to the subsidiary company, solely on
the basis that there is a SAC entry '997171' in the scheme of classification of services mentioning; “the services
provided by holding companies, i.e. holding securities of (or other equity interests in) companies and
enterprises for the purpose of owning a controlling interest.”, unless there is a supply of services by the holding
company to the subsidiary company in accordance with section 7 of CGST Act.

Question 13. Whether supply of food or beverages in cinema hall is taxable as restaurant
service which attract GST at the rate of 5% or Not. [Circular No. 201/13/2023]
Ans. : Background: Restaurant Service' means supply, by way of or as part of any service, of goods,
being food or any other article for human consumption or any drink, provided by a restaurant, eating
joint including mess, canteen, whether for consumption on or away from the premises where such
food or any other article for human consumption or drink is supplied.”
n Eating joint is a wide term which includes refreshment or eating stalls/ kiosks/ counters or
restaurant at a cinema also.
n The cinema operator may run these refreshment or eating stalls/ kiosks/ counters or restaurant
themselves or they may give it on contract to a third party.
n The customer may like to avail the services supplied by these refreshment/snack counters or
choose not to avail these services.
n Further, the cinema operator can also install vending machines, or supply any other recreational
service such as through coin-operated machines etc. which a customer may or may not avail.
Clarification: It is hereby clarified that supply of food or beverages in a cinema hall is taxable as
'restaurant service' as long as:
a) The food or beverages are supplied by way of or as part of a service, and
b) Supplied independent of the cinema exhibition service.
It is further clarified that where the sale of cinema ticket and supply of food and beverages are
clubbed together, and such bundled supply satisfies the test of composite supply, the entire supply
will attract GST at the rate applicable to service of exhibition of cinema, the principal supply.

2.34 CA Rajkumar
Ch.3 Place of Supply

Ch 3 PLACE OF SUPPLY

CHAPTER AT A GLANCE

NATURE OF SUPPLY: INTRA OR INTER

ORIGIN OF SUPPLY DESTINATION OF SUPPLY

In 2 Different Consumption place of Supply
As per section : 2 of CGST Act -State
1 Head Office _UT’S OF GOODS
2 Branch Office - State & UT
3 Head Office / Branch Office -Countries ie Boarder of State/UT/ Section : 10
(which is more connected) Country/State & UT : Exist Section : 11
4 Residence OF SERVICE
Then the supply will be Inter-state
Supply [Section : 7] Section : 12
Otherwise : it will be intra state supply Section : 13
[Section : 8]

SPECIAL: where UNIT/Developer of SEZ involved in a transaction then the

transaction will always be Inter- state supply
SPECIAL: If goods sold to a tourist – who will claim refund at Indian airport shall
be treated as Inter State Supply

TWI'S Origin/Destination shall be Interpreted as per

Nearest Coastal State /UT [Section : 9]

NATURE OF SUPPLY : Whether INTER or INTRA

Section 7 of IGST Act, 2017: Inter-State supply

General (1) Subject to the provisions of section 10, supply of goods, where the
Provision for location of the supplier and the place of supply are in––
Goods
(a) two different States;
(b) two different Union territories; or
(c) a State and a Union territory,
shall be treated as a supply of goods in the course of inter-State trade or
commerce.

Import of (2) Supply of goods imported into the territory of India, till they cross the
Goods customs frontiers of India, shall be treated to be a supply of goods in the
course of inter-State trade or commerce.

CA Rajkumar 3.1
 Place of Supply Ch.3

PLACE OF SUPPLY

Section 10 of IGST Act, 2017: Place of supply of goods other than

supply of goods imported into, or exported from India
(1) The place of supply of goods, other than supply of goods imported into, or exported from
India, shall be as under,––

(a) Where the supply involves movement of The place of supply of such goods shall be the
goods, (whether by the supplier or the location of the goods at the time at which
recipient or by any other person) the movement of goods terminates for
delivery to the recipient;

(b) Where the goods are delivered by the The place of supply of such goods shall be the
supplier to a recipient or any other person principal place of business of such 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)

(c) Where the supply does not involve The place of supply shall be the location of such
movement of goods, (whether by the goods at the time of the delivery to the
supplier or the recipient,) recipient;

(ca) where the supply of goods is made to an be the:

un-registered person, the place of Ÿ Location as per the address of the said
supply shall, notwithstanding anything person recorded in the invoice issued in
contrary contained in clause (a),(c) respect of the said supply and
Ÿ where the address of the said person is not
recorded in the invoice then place of supply
be the location of the supplier
Explanation: For the purposes of this clause,
Ÿ Recording of the name of the State of the
said person in the invoic
Ÿ shall be deemed to be the recording of the
address of the said person.

(d) Where the goods are assembled or installed the place of supply shall be the place of such
at site, installation or assembly;

3.4 CA Rajkumar
Ch.3 Place of Supply

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

(2) Where the place of supply of goods cannot be determined, the place of supply shall be
determined in such manner as may be prescribed

CA Rajkumar 3.5
 Place of Supply Ch.3

Section 12: of IGST Act, 2017: Place of supply of services where

location of supplier and recipient is in India
(1) The provisions of this section shall apply to determine the place of supply of services where
the location of supplier of services and the location of the recipient of services is in India.

Basis Situation Place of Supply

(2) Residuary Rule The place of supply of services, (a)Place of supply: shall be the
except the services specified in sub- location of such person.
sections (3) to (14),––
(a) Made to a registered person
Sec. 2 of (94) “Registered person”
means a person who is registered (b)Place of supply: shall be
under section 25 but does not (i) The location of the recipient where
include a person having a Unique the address on record exists; and
Identity Number. (ii) The location of the supplier of
(b) Made to any person other than a services in other cases.
registered person

(3) Immovable Services,––

property linked (a) Directly in relation to an The place of supply shall be the
services immovable property, including location at which the immovable
services provided by architects, property or boat or vessel, as the
interior decorators, surveyors, case may be, is located or intended to
engineers and other related be located:
experts or estate agents, any Provided that if the location of the
service provided by way of grant immovable property or boat or vessel
of rights to use immovable is located or intended to be located
property or for carrying out or outside India, the place of supply
co-ordination of construction shall be the location of the recipient.
work; or
(b) By way of lodging accommo- Explanation.––Where the
dation by a hotel, inn, guest immovable property or boat or vessel
house, home stay, club or is located in more than one State or
campsite, by whatever name Union territory, the supply of services
called, and including a house shall be treated as made in each of
boat or any other vessel; or the respective States or Union
territories, in proportion to the value
(c) By way of accommodation in any for services separately collected or
immovable property for determined in terms of the contract
organising any marriage or or agreement entered into in this
reception or matters related regard or, in the absence of such
thereto, official, social, cultural, contract or agreement, on such other
religious or business function basis as may be prescribed.
including services

3.16 CA Rajkumar
 Place of Supply Ch.3

Basis Situation Place of Supply

proportion to the value for services

separately collected or determined in
terms of the contract or agreement
entered into in this regard or, in the
absence of such contract or
agreement, on such other basis as
may be prescribed.

(8) Goods In case of services by way of The place of supply if provided to-
Transportation transportation of goods, including by (a) A registered person, shall be the
Services mail or courier to,–– location of such person;
(b) A person other than a registered
person, shall be the location at which
such goods are handed over for their
transportation.
Provided that where the transpor-
tation of goods is to a place outside
India, the place of supply shall be the
place of destination of such goods.

(9) Passenger In case of passenger transportation The place of supply if provided to-
transportation service to,- (a) a registered person, shall be the
services location of such person;
(b) a person other than a registered
person, shall be the place where
the passenger embarks on the
conveyance for a continuous
journey:
Provided that where the right to
passage is given for future use and
the point of embarkation is not
known at the time of issue of right to
passage, the place of supply of such
service shall be determined in
accordance with the provisions of
section 12 (2).

(10) On board In case of services on board a The place of supply shall be the
services conveyance, including a vessel, an location of the first scheduled point
aircraft, a train or a motor vehicle, of departure of that conveyance for
the journey.

3.18 CA Rajkumar
 Place of Supply Ch.3

Q.9)

Value Rs 30, 00,000/-

Govt. Agency
MP = Place of supply

KT = Place of supply

[Ratio : No of screens of “PVR” in each state ]

Q.10) ADVERTISEMENT OVER INTERNET

BP

HR

UP

[Ratio : Number of “INTRNET” Subscribers in each state ]

Note: In the case of advertisements over internet the service shall be deemed to have been provided
all over India and, the amount attributable to the value of advertisement service disseminated in a
State or Union territory shall be calculated on the basis of the internet subscribers in such State or
Union territory,

Place of supply in case of supply of services in respect of advertising sector

Issue : Advertising companies are often involved in procuring space on hoardings/ bill boards
erected and mounted on buildings/land, in different States, from various suppliers (“vendors”) for
providing advertisement services to its corporate clients. There may be variety of arrangements
between the advertising company and its vendors as below:
(i) There may be a case wherein there is supply (sale) of space or supply (sale) of rights to use the
space on the hoarding/ structure (immovable property) belonging to vendor to the
client/advertising company for display of their advertisement on the said hoarding/ structure.
What will be the place of supply of services provided by the vendor to the advertising company in
such case?
(ii) There may be another case where the advertising company wants to display its advertisement on
hoardings/ bill boards at a specific location availing the services of a vendor. The responsibility of

3.36 CA Rajkumar
Ch.3 Place of Supply

arranging the hoardings/ bill boards lies with the vendor who may himself own such structure or
may be taking it on rent or rights to use basis from another person. The vendor is responsible for
display of the advertisement of the advertisement company at the said location. During this
entire time of display of the advertisement, the vendor is in possession of the hoarding/structure
at the said location on which advertisement is displayed and the advertising company is not
occupying the space or the structure.
In this case, what will be the place of supply of such services provided by the vendor to the advertising
company?
Clarification : It is clarified that the place of supply in the case supply of services in respect of
advertising sector, in the cases referred in (i) and (ii), shall be determined as below:
Place of supply in Case (I): The hoarding/structure erected on the land should be considered as
immovable structure or fixture as it has been embedded in earth.
Further, place of supply of any service provided by way of supply (sale) of space on an immovable
property or grant of rights to use an immovable property shall be governed by the provisions of
section 12(3)(a) of IGST Act.
As per section 12(3)(a) of IGST Act, the place of supply of services directly in relation to an immovable
property, including services provided by architects, interior decorators, surveyors, engineers and
other related experts or estate agents, any service provided by way of grant of rights to use
immovable property or for carrying out or co-ordination of construction work shall be the location at
which the immovable property is located. Therefore, the place of supply of service provided by way of
supply of sale of space on hoarding/ structure for advertising or for grant of rights to use the
hoarding/ structure for advertising in this case would be the location where such hoarding/ structure
is located.
Place of supply in Case (ii): In this case, as the service is being provided by the vendor to the
advertising company and there is no supply (sale) of space/ supply (sale) of rights to use the space on
hoarding/structure (immovable property) by the vendor to the advertising company for display of
their advertisement on the said display board/structure, the said service does not amount to sale of
advertising space or supply by way of grant of rights to use immovable property.
Accordingly, the place of supply of the same shall not be covered under section 12(3)(a) of IGST Act.
Vendor is in fact providing advertisement services by providing visibility to an advertising company's
advertisement for a specific period of time on his structure possessed/taken on rent by him at the
specified location. Therefore, such services provided by the Vendor to advertising company are
purely in the nature of advertisement services in respect of which Place of Supply shall be determined
in terms of Section 12(2) of IGST Act.
Place of supply in case of supply of the “co-location services”
Issue - Co-location is a data center facility in which a business/company can rent space for its own
servers and other computing hardware along with various other bundled services related to Hosting
and information technology (IT) infrastructure.
A business/company who avails the co-location services primarily seek security and upkeep of its
server/s, storage and network hardware; operating systems, system software and may require to
interact with the system through a web-based interface for the hosting of its websites or other
applications and operation of the servers.

CA Rajkumar 3.37
 Place of Supply Ch.3

In this respect, various doubts have been raised as to

i. Whether supply of co-location services are renting of immovable property service (as it involves
renting of space for keeping/storing company’s hardware/servers) and hence the place of supply
of such services is to be determined in terms of provision of of Section 12(3)(a) of the IGST
Act which is the location where the immovable property is located; or
ii. Whether the place of supply of such services is to be determined by the default place of supply
provision under section 12(2) of the IGST Act as the supply of service is Hosting and Information
Technology (IT) Infrastructure Provisioning services involving providing services of hosting the
servers and related hardware, security of the said hardware, air conditioning, uninterrupted power
supply, fire protection system, network connectivity, backup facility, firewall services, 24 hrs.
monitoring and surveillance service for ensuring continuous operations of the servers and related
hardware, etc.

Clarification - It is clarified that the Co-location services are in the nature of “Hosting and
information technology (IT) infrastructure provisioning services” (S.No. 3 of Explanatory notes of
SAC-998315).
Such services do not appear to be limited to the passive activity of making immovable property
available to a customer as the arrangement of the supply of colocation services not only involves
providing of a physical space for server/network hardware along with air conditioning, security
service, fire protection system and power supply but it also involves the supply of various services by
the supplier related to hosting and information technology infrastructure services like network
connectivity, backup facility, firewall services, and monitoring and surveillance service for ensuring
continuous operations of the servers and related hardware, etc. which are essential for the recipient
business/company to interact with the system through a web based interface relating to the hosting
and operation of the servers.
In such cases, supply of colocation services cannot be considered as the services of supply of renting
of immovable property. Therefore, the place of supply of the colocation services shall not be
determined by the provisions of Section 12(3)(a) of the IGST Act but the same shall be determined by
the default place of supply provision under Section 12(2) of the IGST Act i.e. location of recipient of
co-location service.
However, in cases where the agreement between the supplier and the recipient is restricted to
providing physical space on rent along with basic infrastructure, without components of Hosting and
Information Technology (IT) Infrastructure Provisioning services and the further responsibility of
upkeep, running, monitoring and surveillance, etc. of the servers and related hardware is of recipient
of services only, then the said supply of services shall be considered as the supply of the service of
renting of immovable property. Accordingly, the place of supply of these services shall be determined
by the provisions of Section 12(3)(a) of the IGST Act which is the location where the immovable
property is located.

3.38 CA Rajkumar
Ch.3 Place of Supply

Section 13 of IGST Act, 2017: Place of supply of services where

location of supplier or location of recipient is outside India
(1) The provisions of this section shall apply to determine the place of supply of services where
the location of the supplier of services or the location of the recipient of services is outside India.

Basis Situation Place of Supply

(2) Residuary In case of services except the services The place of supply shall be the
Provision specified in sub-sections (3) to (13) location of the recipient of services:
Provided that where the location of
the recipient of services is not
available in the ordinary course of
business, the place of supply shall be
the location of the supplier of
services.

(3) Performance In case of the following services The place of supply shall be the
based services namely:- location where the services are
(a) Services supplied in respect of actually performed.
goods which are required to be Provided that when such services are
made physically available by the provided from a remote location by
recipient of services to the way of electronic means, the place of
supplier of services, or to a person supply shall be the location where
acting on behalf of the supplier of goods are situated at the time of
services in order to provide the supply of services:
services: Provided further that nothing
(b) Services supplied to an individual, contained in this clause shall apply in
represented either as the the case of services supplied in
recipient of services or a person respect of goods which are
acting on behalf of the recipient, temporarily imported into India for
which require the phys ical repairs or for any other treatment or
presence of the recipient or the process and are exported after such
person acting on his behalf, with repairs or treatment or process
the supplier for the supply of without being put to any use in India,
services. other than that which is required for
such repairs or treatment or process.

(4) Immovable In case of services supplied directly in The place of supply shall be the place
property linked relation to an immovable property, where the immovable property is
services including services supplied in this located or intended to be located.
regard by experts and estate agents,
supply of accommodation by a hotel,
inn, guest house, club or campsite, by
whatever name called, grant of rights

CA Rajkumar 3.39
Ch.3 Place of Supply

Basis Situation Place of Supply

(9) Transportation In case of services of transportation of The place of supply shall be

of goods goods, other than by way of mail or the place of destination of
courier, such goods.

(10) Passenger In respect of passenger transportation The place of supply shall be

transportation services the place where the
service passenger embarks on the
conveyance for a continuous
journey.

(11) On board In case of services provided on board a The place of supply shall be
services conveyance during the course of a passenger the first scheduled point of
transport operation, including services departure of that conveyance
intended to be wholly or substantially for the journey.
consumed while on board,

(12) online In case of online information and database The place of supply shall be
information and access or retrieval services the location of the recipient
database access or Explanation.––For the purposes of this sub- of services.
retrieval services section, person receiving such services shall
(OIDAR) be deemed to be located in the taxable
territory, if any two of the following non-
contradictory conditions are satisfied,
namely:––
(a) The location of address presented by the
recipient of services through internet is in
the taxable territory;
(b) The credit card or debit card or store
value card or charge card or smart card or
any other card by which the recipient of
services settles payment has been issued
in the taxable territory;
(c) The billing address of the recipient of
services is in the taxable territory;
(d) The internet protocol address of the
device used by the recipient of services is
in the taxable territory;
(e) The bank of the recipient of services in
which the account used for payment is
maintained is in the taxable territory;
(f) The country code of the subscriber
identity module card used by the
recipient of services is of taxable territory;
(g) The location of the fixed land line
through which the service is received by
the recipient is in the taxable territory.

CA Rajkumar 3.41
 Place of Supply Ch.3

Export

Recipient Exporter
(USA) (Delhi)

Shipping Co.
(Maharashtra) Supplier

Transportation Service

Origin = Location of Supplier = Maharashtra

Destination = POS = Destination of Service = USA
Hence, No GST Attracts here

-:Objects:-
Import = Decrease Export = Increase
GST Load On Freight = Yes GST Load On Freight = No

POS = must be in Taxable Territory POS= Must be in Non-Taxable Territory

GST = No GST = Not Applicable

Place of supply in case of supply of service of transportation of goods, including through

mail and courier
Issue- After deletion of Section 13(9) of IGST Act, doubts have been raised as to whether the place of
supply in case of service of transportation of goods, including through mail and courier, will be
determined under section 13(2), 13(3)?
Clarification- The place of supply of services of transportation of goods, other than through mail
and courier, will be determined under section 13(2) and not as performance based services under
section 13(3).
Further, it is also mentioned that the place of supply in case of service of transportation of goods by
mail or courier was not covered under the provisions of section 13(9) before the said sub-section was
amended/ omitted. Therefore, on the same principles as mentioned above, the place of supply in case
of service of transportation of goods by mail or courier will continue to be determined by section
13(2) of IGST Act.

3.52 CA Rajkumar
 Place of Supply Ch.3

Section 14: Special provision for payment of tax by a supplier of

online information and database access or retrieval services
[OIDAR]

Who will be the supplier: (1) On supply of online information and database access or retrieval
services by any person located in a non-taxable territory and received by a non-taxable online
recipient, the supplier of services located in a non-taxable territory shall be the person liable for
paying integrated tax on such supply of services:
Who will be the supplier if any intermediary involved: Provided that in the case of supply of online
information and database access or retrieval services by any person located in a non-taxable territory
and received by a non- taxable online recipient,
Ÿ an intermediary located in the non-taxable territory,

Ÿ who arranges or facilitates the supply of such services,

Ÿ shall be deemed to be the recipient of such services from the supplier of services in non-
taxable territory and supplying such services to the non-taxable online recipient
Ÿ except when such intermediary satisfies the following conditions, namely:––

Ü The invoice issued by such intermediary taking part in the supply clearly identifies the
service in question and its supplier in non-taxable territory;
Ü The intermediary does not authorise the charge to the customer which is that the
intermediary neither collects or processes payment in any manner nor is responsible for
the payment.
Ü The intermediary does not authorise delivery; and

Ü The general terms and conditions of the supply are not set by the intermediary.

Registration: (2) The supplier of online information and database access or retrieval services
referred to in sub-section (1) or his agent in taxable territory shall, for payment of integrated
tax, take a single registration.
Mandatory Physical Presence: Provided further that if such supplier does not have a physical
presence or does not have a representative for any purpose in the taxable territory, he may
appoint a person in the taxable territory for the purpose of paying integrated tax and such
person shall be liable for payment of such tax.

Section 14 A: Special provision for specified actionable claims supplied by a person located
outside taxable territory.
(1) Supplier Liable to pay: A supplier of online money gaming not located in the taxable
territory, shall in respect of the supply of online money gaming by him to a person in the
taxable territory, be liable to pay IGST on such supply.
(2) Single Registration: The supplier of online money gaming shall obtain a single registration
under the Simplified Registration Scheme. [The Central Government hereby notifies the

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Ch.3 Place of Supply

Principal Commissioner of Central Tax, Bengaluru West and all the officers subordinate to him
as the officers empowered to grant registration]
Provided that any person located in the taxable territory representing such supplier for any
purpose in the taxable territory shall get registered and pay the IGST on behalf of the supplier:
Provided further that if such supplier does not have a physical presence or does not have a
representative for any purpose in the taxable territory, he shall appoint a person in the taxable
territory for the purpose of paying IGSTand such person shall be liable for payment of such tax.
(3) In case of failure to comply with above provisions by the supplier of the online money gaming
or a person appointed by such supplier or both, notwithstanding anything contained in
section 69A of the Information Technology Act, 2000, any information generated, transmitted,
received or hosted in any computer resource used for supply of online money gaming by such
supplier shall be liable to be blocked for access by the public in such manner as specified in the
said Act.

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Ch.4 Taxable Person

Ch 4 TAXABLE PERSON

Provisions contained in this chapter

List of Sections: -
Section 22 - Registration required after threshold limit,
- Voluntary Registration,
- Registration in case of PAN change
Section 23 - No Registration is required.
Section 24 - Mandatory Registration without seeing the limit of Rs 10lakh / 20Lakh / 40Lakh.

Background:
Where supply of Goods/Service made by a Taxable person whether Intra or Inter Shall be leviable to
GST i.e. where such supply made by “Non-Taxable Person” then no GST will be levied.
Now the question is this who is Taxable Person. Taxable Person has been defined U/s = 2 as the
person
Ÿ “Who is Registered (i.e. who has taken voluntarily Registration) or
Ÿ Required to be registered as per Law.
Now question is this when a person required to get registered himself. The solution is given under
section 22,23,24 as to when a person Require Registration & when he does not need to get Register
himself.

By
Intra-State/
Goods / Supply Inter State Taxable
Service Services person

Taxable Person Means: -

The person who is registered (Voluntarily Registered u/s 22)
(OR)
The person who is required to be registered (u/s 22 & 24)

i.e. The person liable to pay tax may be –

Supplier (NCM) (Or) Recipient (RCM)

Note: - Registration is granted state wise. For Example, if any person has a business as follows

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 Taxable Person Ch.4

Section 23: No Registration

(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.
(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.

(2) Notwithstanding anything to the contrary contained in section 22(1) or 24,

Ÿ the Government may, on the recommendations of the Council, by notification,

Ÿ subject to such conditions and restrictions as may be specified therein,

Ÿ specify the category of persons

Ÿ who may be exempted from obtaining registration under this Act.

Section 24: Mandatory Registration

Notwithstanding anything contained in section 22(1), the following categories of persons shall
be required to be registered under this Act,––
(i) Persons making any inter-State taxable supply;
The persons making inter-State supplies of taxable services and having an aggregate
turnover, to be computed on all India basis, not exceeding an amount of Rs 20 lakh/Rs 10
Lakh in a financial year as the category of persons exempted from obtaining registration
under the said Act. [N/N: 10/2017]
The persons making inter-State taxable supplies of handicraft goods exempted from
obtaining registration under the aforesaid Act up to Rs. 20/ 10 Lakh. [N/N: 8/2017]
(ii) Casual taxable persons making taxable supply;
The casual taxable persons making taxable supplies of handicraft goods as the category of
persons exempted from obtaining registration upto Rs.20 lakh/Rs.10 lakh. [N/N: 32/2017]
(iii) Persons who are required to pay tax under reverse charge;
(iv) Person who are required to pay tax under section 9(5)
(v) Non-resident taxable persons making taxable supply;
(vi) Persons who are required to deduct tax under section 51, whether or not separately
registered under this Act;
(vii) Persons who make taxable supply of goods or services or both on behalf of other taxable
persons whether as an agent or otherwise;
(viii) Input Service Distributor, whether or not separately registered under this Act;

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Ch.4 Taxable Person

(ix) Persons who supply goods or services or both, other than supplies specified under section
9(5), through such electronic commerce operator who is required to collect tax at source
under section 52;
(x) Every electronic commerce operator; who is required to collect tax at source under
section 52.
The persons making supplies of services, other than supplies specified under section 9(5) of the
said Act through an electronic commerce operator who is required to collect tax at source under
section 52 of the said Act, and having an aggregate turnover, to be computed on all India basis,
not exceeding an amount of Rs.20 lakh /Rs 10 lakh in a financial year, as the category of persons
exempted from obtaining registration under the said Act: [N/ N: 65/2017]
(xi) Every person supplying online information and database access or retrieval services from a
place outside India to a person in India, other than a registered person; and
(xia) Every person supplying online money gaming from a place outside India to a person in India,
and;
(xii) Such other person or class of persons as may be notified by the Government on the
recommendations of the Council.

CA Rajkumar 4.11
 Taxable Person Ch.4

NOTIFICATION NO. 34/2023:

The Central Government, specifies
Ÿ the persons making supplies of goods through an electronic commerce operator who is required
to collect tax at source under section 52 of the said Act and
Ÿ having an aggregate turnover in the preceding financial year and in the current financial year
within threshold limit as applicable
Ÿ Will be exempted from obtaining registration.

Ÿ subject to the following conditions,

Ÿ Such Person --

a) shall not make any inter-State supply of goods;

b) shall not make supply of goods through electronic commerce operator in more than one State or
Union territory;
c) shall be required to have a PAN
d) shall, before making any supply of goods through electronic commerce operator, declare on the
common portal their PAN, address of their business Place and origin State /UT which shall be
subjected to validation on the common portal;
e) have been granted an enrolment number on the common portal on successful validation of the
Permanent Account Number.
f) shall not be granted more than one enrolment number in a State or Union territory;
g) No supply of goods shall be made by such persons through electronic commerce operator unless
such persons have been granted an enrolment number on the common portal; and
h) where such persons are subsequently granted registration under section 25 of the said Act, the
enrolment number shall cease to be valid from the effective date of registration.
Special Procedure by ECO: N/N: 37/2023
In respect of Suppliers of Goods
Ÿ who supplies goods through ECO and

Ÿ who is exempted from registration under N/N 34/2023

Ÿ The ECO shall follow the special Procedure which are as follows….

a) Only Enrollment Number holder shall be allowed.

b) Inter state Supply of goods shall not be allowed.
c) NO TCS shall be collected on such supplies of Goods and
d) Such Supplies of Goods shall be furnished in GSTR-8.
Note: Where multiple electronic commerce operators are involved in a single supply of goods
through ECO
Ÿ The electronic commerce operator” shall mean the electronic commerce operator

Ÿ who finally releases the payment to the said person

Ÿ for the said supply made by the said person through him.

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Ch.5 Exemption
Exemption

Ch 5 Exemption

Section: 11 Power to grant exemption from tax

Basis Exemption Notification Special Order

Type
Conditional Unconditional Conditional Unconditional

Wholly Exempt Wholly Exempt Wholly Exempt Wholly Exempt

Partly Exempt Partly Exempt Partly Exempt Partly Exempt

Examples Ÿ Supply of Salt / Water: Floods and landslides etc has caused
Ÿ Health Care SERVICES: extensive damage to public and
Ÿ Supply of Agriculture implements: private property
Ÿ Rate of IGST will be 1% on
Aluminums INGOTS. , if it is used
in household products
Ÿ Solar cells If use in specified final
product:
Effective (I) Specific Date (or) (I) Specific Date (or)
Date of Main (ii) Date of Issue (ii) Date of Issue
Notification [ As the case may be]

Effective date Example:

of 1-1-18 Confusion Clarification Conclusion
Supplementary
Notification Govt Issued What about Govt. Issue Effective
a Notification “Pipe fittings” second Notification Date of Second
on 1-1-18 - whether exempt issued on 1-7-18 Notification will
Stating that or NOT? the word PIPE shall be: 1/1/18
“Pipes” are include “Pipe Fittings”
Exempted from Also. (with in 1 year)
GST

Q.: What about the assesses who have paid taxes during confusion period: Get
refund with interest.
Q.: What if such Notification (Second) issued after the expire of one year from the
date of original Notification: shall apply prospectively.

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 Exemption Ch.5

Fund= Sponsorship Fees

(3)
(Supplier) TATA

Sponsorship of Sporting Events

Sponsorship Service
GST= Exempted

4. INDIVIDUAL’s SERVICE:
- Service of Individuals as a Player, referee, umpire, coach or team manager for participation in a sporting
event.
- Organised By a Recognised Sport Body (eg. BCCI)
- Moreover service By one Recognised Sports Body to another Recognised Sports Body will Also be
Exempted.

(4) Player / Umpire / Recognised Sports Recognised Sports

Coach / Referee Body (RSB) Body (RSB)
GST= Exempted

GST= Exempted IPL Franchisee

(Not a Recognised Sports Body)

GST= Taxable

GOVERNMENT

1. Article 243G/W
- Service as specified under Article 243 G/W (e.g. Land Consolidation, Urban Town Planning, Public
Health etc.) provided By “Governmental Authority” will be Exempted.

- Service as specified under Article 243 G/W as Pure Service/Composite Service (having service portion
atleast 75%) provided By any person to CG/SG/LA/Government ENTITY will be Exempted.

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Ch.5 Exemption

(1) Services fall under Article no. 243 G/W: Land Reform, Land Consolidation, Urban Town Planning, Public
Health, Cattle Pond, Street light, Parking lots, Bus stop, Road and bridges, water supply, Fire services etc

* Pure Services (100%) Exempted CG/SG/LA/UT Services under Article: Not a supply
Article: 243 G/ W 243 G/W Given by..
GIVEN TO…
* Composite service (At
least 75% Service)
GIVEN TO…

* Pure Services (100%) TAXABLE Governmental Services under Article: Exempted

Article: 243 G/ W Authority/ 243 G/W Given by..
GIVEN TO… Government Entity
* Composite service (At
least 75% Service)
GIVEN TO…

(1A) Services provided to a Governmental Authority by way of –

(a) water supply;
(b) public health;
(c) sanitation conservancy;
(d) solid waste management; and
(e) slum improvement and upgradation.

Circular No. 153/09/2021: GST on milling of wheat into flour or paddy into rice for distribution by
State Governments under PDS
Question. Whether composite supply of service by way of
Milling of wheat into wheat flour, along with fortification, or paddy into rice
By any person to a State Government for distribution of such wheat flour under Public Distribution System
Is eligible for exemption under SN 3A (Composite supply to Govt etc under article no. 243G/W) of N/N
12/2017?

Answer.
Where the value of goods supplied in such Then said entry No. 3A would apply to composite
composite supply (goods used for fortification, supply of milling of wheat and fortification thereof
packing material etc) does not exceed 25% of by miller, or of paddy into rice,
the value of composite supply.

Where value of goods supply in such a composite In such case the supply of service by way of milling
supply exceeds 25%. of wheat into flour or of paddy into rice, is not
eligible for exemption hence taxable.

So It is a matter of fact as to whether the value of goods in such composite supply is up to 25% or more
and accordingly exemption will work on case-to-case basis. Circular No. 153/09/2021

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 Exemption Ch.5

Q. Taxability of sanitation and conservancy services supplied to Army and other Central and State
Government departments. Note: The same is specified under Article 243G/W.

Ans. It is clarified that if such services are procured by Indian Army or any other Government Ministry /
Department which does not perform any functions listed in the Article 243G/W in the manner as a local
authority does for the general public, the same are not eligible for exemption. [Circular No. 177/09/2022]

2. GOVERNMENT SERVICE (Except PVT):

* Service provided by CG/SG/UT/Local Authority:
- to Non-Business Entity will be Exempted.
- to Business Entity will be taxable. (Unless otherwise specified elsewhere)
* Moreover following will be taxable as follows:
(a) - Service By Department of Post “and the Ministry of Railways (Indian Railways)”
- By way of speed posts, Express Parcel Post, Life Insurance service, Agency Service.
- to Non-Government will be taxable.
(b) Service By government in Relation to Aircraft/Vessel (in or outside the port or Airport) will be Taxable.
(c) Service by Government by way of transportation of Goods/Passenger will be taxable.

3. GARIB BUSINESS ENTITY:

- Service by CG/SG/UT/Local Authority.
- to a Business Entity having Aggregate turnover in PFY only upto threshold limit.
- will be Exempted.
Note: Sub-Point a/b/c/of Point (2) will Remain Same.

4. GOVERNMENT TO GOVERNMENT:
- Service provided by CG/SG/UT/Local Authority.
- to another CG/SG/UT/Local Authority.
- will be exempted.
Note: Sub-Point a/b/c/of Point (2) will Remain Same.

5. SMALL VALUE GOVERNMENT SERVICE:

- Service provided by CG/SG/UT
- Where the value of such service not more than `5000.
- In case of continuous supply of service (a service having life of more than 3 month & having periodic
payment schedule) limit of `5000 will be computed on the basis of a Financial year i.e. value in Financial
year is upto `5000 then the service will be exempted.
Note: Sub-Point a/b/c/of Point (2) will Remain Same.

6. GOVERNMENT GRANT

- Service By “Government Entity”

- To CG/SG/UT/LA
- Where consideration received in Form of Grant.
- Then it will be Exempted.

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Ch.5 Exemption

Government Services

To Non-Business Entity P.V.T. To Business Entity To Govt. Departments

GST=Exempted GST=Exempted

By Post Office By Govt. Dept. By Govt. Dept. in Business Entity Business Entity
and the Ministry In relation to Vessel/ relation to transportation (Unregistered) (Registered)
or Railways Aircraft of Goods & Passengers GST=Exempted
(Indian Railways)
GST=Taxable GST=Taxable
GST=Taxable

Because of Common Competition between Low Value Service High Value Service
Govt. & Private players. So to provide equal (Upto 5̀,000) (Above 5̀,000)
Field, above Govt. services are liable to GST GST=Exempted GST=Taxable

Note: Business Entity =“Jo Business Kare” (small / big)

(Individual / Company/ Partnership firm, etc)

Newly Inserted: Services by the Department of Posts by way of post card, inland letter, book
post and ordinary post (envelopes weighing less than 10 grams) will be exempted.

Circular No. 190/02/2023

Applicability of GST on accommodation services supplied by Air Force Mess to its personnel:
All services supplied by Central Government, State Government, Union Territory or local authority to any
person other than business entities (Except few specified services such as services of postal department,
transportation of goods and passengers etc.) are exempt from GST.

It is hereby clarified that accommodation services provided by Air Force Mess and other similar messes,such
as, Army mess, Navy mess, Paramilitary and Police forces mess to their personnel or any person other than a
business entity are covered under above exemption.

Provided the services supplied by such messes qualify to be considered as services supplied by Central
Government, State Government, Union Territory or local authority.

7. LONGTERM LEASE

- Service By S.G.I.D.C./U (State Government Industrial Development Corporation or by other Entity having
20% or more ownership of Government.
- Service of Granting Long Term Lease (30 years or more) of Industrial plots or plot for Development of
Infrastructure for Financial Business.

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 Exemption Ch.5

TRANSPORTATION OF GOODS

(1) Services by way of transportation of goods-

(a) By ROAD [But service of goods transportation agency, courier agency will be taxable]
(b) By Inland waterways.

(2) Services by way of transportation of goods by an aircraft from a place outside India upto
the customs station of clearance in India.

(3) Services by way of transportation of goods by an aircraft from customs station of clearance
in India to a place outside India. But this exemption is upto 30th day of September, 2022.

(4) Services by way of transportation of goods by a vessel from customs station of clearance in
India to a place outside India. But this exemption is upto 30th day of September, 2022.

Analysis:

INLAND WATER- WAYS-

(Exempted) However, in following cases, it will be exempted-
Ÿ GTA Service to Unregistered person,
JAL Ÿ GTA Service to Unregistered CTP,
OTHERS (Taxable)
Ÿ GTA service to Government etc., having TDS
G.T.A. & registration only.
Courier Ÿ Transportation of Specified Goods
BY ROAD (Taxable)
THAL
OTHERS
(Exempted)
BY RAIL: (Taxable)

Specified Goods Domestic Journey Domestic / International

(By RAIL / Vessel) Journey (By GTA)
Ÿ Milk, Salt, X X
Ÿ Flour, Pulses, Rice X X
Ÿ Agriculture Produce X X
Ÿ News Paper / Magazines X X
Ÿ Relief Material X X
Ÿ Defence Material X X
Ÿ Railway Equipment Now Taxable Now Taxable
Ÿ Special Exemption NO I. ` 1500/- total truck load
freight based
II. ` 750/- consignee based.

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Ch.5 Exemption

(5) Satellite launch services supplied by Indian Space Research Organisation, Antrix Corporation Limited
or New Space India Limited.

(5) Shri Hari Kota India

(ISRO) (ACL) (NSIL) (Supplier)

ABC Ltd
(Recipient)
GST=Exempted

(6) Service by way of granting National Permit to a Goods Carriage to operate through - out
India / Contiguous States

(6) Govt (RTO Office)

Truck
Owner
GST=Exempted

(7) Supply of service associated with Transit Cargo to NEPAL and Bhutan will be exempted.

Q. Whether the exemption covers services associated with transit cargo both to and from
Nepal and Bhutan

Ans. Representations have been received regarding applicability of GST on transportation of

empty containers returning from Nepal and Bhutan after delivery of transit cargo, to India.
it is clarified that the exemption covers services associated with transit cargo both to and from
Nepal and Bhutan. [Circular No. 177/09/2022]

(7)

GST=Exempted

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Ch.5 Exemption

Additional Exemption under IGST Act, 2017: N/N : 9/2017 (IGST)

1. Import of Service:
Ü Where Location of supplier is outside India.
Ü and location of Recepient is in INDIA and Recipient is –
Ÿ Government (CG/SG/UT/LA/Governmental Authority)
Ÿ Individual (Using Service for Personal use)
Ÿ Recognised Charitable Trust.
Ÿ RBI ( Services related to forex Services )
Ÿ Embassy (Use for official/personal purpose)
Ÿ United Nations/International organisation (For Official use)
Ÿ Special Economic Zone (Developer/Unit)
Ü Then such import of services will be Exempted. Except OIDAR Service provided to Unregistered
Person in India (eg. Online paid games)

(1) USA India

Import of Service
GOVT. of India

ParticularsRemarks Individual

Goods / Service
Service?
Supply? -
With It will always be treated as Supply Recognised Charitable Trust
consideration

Without If transaction is between Related

consideration persons, in the course or
furtherance of business, it will be
treated as Supply Embassy / United Nations/
International Org.
Origin? USA
Destination? India (Delhi)
Inter/Intra state? Inter State Supply
Special Economic Zone
Taxable Person? ----
GST?

GST= Taxable GST= Exempted

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Ch.5 Exemption

2. Where supplier is located outside India & Recepient is also located outside India.
Ü then GST will be Exempted.
Ü However Where”
Ÿ Services is of “Transportation of Goods” from outside INDIA to INDIA.
Ÿ Supplier (Shipping Company) located outside India.
Ÿ Recepient (the person who 'paid freight) located outside INDIA
Ÿ Then this service will be taxable.

Mr. X (Supplier) [NTT]

Exempt

Particulars Remarks
Mr. Y (Recipient)[NTT] Supplier? Mr. X
Recipient? Mr. Y
Goods / Service? Service
Supply? Yes
Origin? USA
Destination? India
Inter/Intra state? Inter-state Supply
GST?
Taxable person? NCM: Mr. X
RCM: Mr. Y

3. Where supplier of service Located in India & Recipient Belongs to outside INDIA.
(a) - Service provided by Indian Tour Operator
- to a foreign Tourist
- In Relation to a Tour
- Conducted wholly outside INDIA.

Foreign Tourist: - Vrindavan (U.P.)

USA

& Sri Lanka

Q: Tour Package- Sri Lanka + Vrindawan

GST=
( 2,00,000) (Outside India) (India)

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Ch.7 Reverse Charge Mechanism

Ch 7 REVERSE CHARGE MECHANiSM

NCM/FCM CASES RCM CASES

Government Government

GST PAYMENT GST PAYMENT

OF ` 18,000 OF ` 18,000

Supplier Registered Supplier Registered

Invoice Invoice
Recipient Recipient
Value: 1,00,000 Value: 1,00,000
Book ITC of [Location-TT]
GST : 18,000 GST : 18,000
Rs. 18,000 Book ITC of
Total : 1,18,000 Total : 1,18,000
Rs. 18,000

BASIS NCM/FCM RCM

Net Revenue To Supplier [1,18,000 – 18,000 GST] = 1,00,000 1,00,000
Cost To Recepient [1,18,000 – 18,000 ITC] =1,00,000 [1,00,000 + GST 18,000 –
ITC]=1,00,000
Revenue To Government 18,000 18,000

Crux: In Both The Cases Financial Position Remains Same, Then Why RCM—
1. Where Government Has No Control Over The Supplier (Eg Import Of Service)
2. Where Government Has No Trust Over The Supplier (Eg Goods Transport Agency)
3. Where Supplier Belongs To Un-Organised Sector Eg. Insurance Agent Service.

What is Reverse Charge:

As per Section 2 “Reverse charge” means the liability to pay tax by the recipient of supply of
goods or services or both instead of the supplier of such goods or services or both under
section 9 (3), (4) or under section 5 (3), (4) of the Integrated Goods and Services Tax Act.

Notification No. 4/2017: Specified Goods under Reverse Charge

In exercise of the powers conferred by section 9(3) of the Central Goods and Services Tax Act, 2017, the
Central Government, hereby specifies the supply of goods, in respect of which the central tax shall be
paid on reverse charge basis by the recipient of the intra-state supply of such goods as specified in and
all the provisions of the said Act shall apply to such recipient, namely:—

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 Reverse Charge Mechanism Ch.7

SN Description of supply of Goods Supplier of goods Recipient of supply

1. Cashew nuts, not shelled or peeled Agriculturist Any registered person

2. Bidi wrapper leaves (Tendu) Agriculturist Any registered person

3. Tobacco leaves Agriculturist Any registered person

4. Silk yarn Any person who Any registered person
manufactures silk
yarn from raw silk or
silk worm cocoons for
supply of silk yarn

4A Raw Cotton Agriculturist Any registered person

5. Supply of lottery. State Government, Lottery distributor
Union Territory or or selling agent.
any local authority
6 Used vehicles, seized and confiscated Central Government, Any registered person
goods, old and used goods, waste Excluding Indian Railway
and scrap State Government,
Union territory or a
local authority
7 Priority Sector Lending Certificate Any registered person Any registered person

Sale by government departments to unregistered person:

Issue: Whether the supply of used vehicles, seized and confiscated goods, old and used goods,
waste and scrap by Government departments are taxable under GST?
Clarification: It was noted that such supply to an unregistered person is also a taxable supply
under GST but is not covered under RCM provisions.
In this regard, it is clarified that the respective Government departments (i.e. Central
Government, State Government, Union territory or a local authority)
- shall be liable to get registered and
- pay GST on intra-State and inter-State supply
- of used vehicles, seized and confiscated goods, old and used goods, waste and scrap
- made by them to an unregistered person
subject to the provisions of sections 22 and 24 of the CGST Act

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Ch.7 Reverse Charge Mechanism

N/No. 13/2017- Central Tax (Rate): Specified Services under Reverse Charge@ intra state
supplies

Supplier
SN Category of Supply of Services Recipient of Service
of service

Supply of Services by a Goods Transport Goods (a) Any factory registered

1
Agency (GTA) in respect of transportation Transport under or governed by
of goods by road. Agency the Factories Act, 1948
(GTA) or
GST Rate 5% and no ITC to supplier
(b) Any society registered
[RCM or NCM as the case may be]
under the Societies
Registration Act, 1860.
(c) Any co-operative
society established by
or under any law; or
(d) GSTIN holder
Note:1 No RCM will be applicable where
recipient is (e) Anybo dy - corporate
(a) Govt. Department established, by or
under any law; or
(b) Local authority; or
(f) Any partnership firm
(c) Governmental agencies,
whether registered or
which has taken registration only for the
not under any law
purpose of deducting TDS and not for
including association of
making a taxable supply of goods or services
persons; or
Note:2 No RCM will be applicable where
(g) Any casual taxable
i.) The supplier has taken registration under person; located in the
the CGST Act, 2017 and exercised the option to
taxable territory.
pay tax on the services of GTA in relation to
transport of goods supplied by him under
forward charge; and
ii.) The supplier has issued a tax invoice to the
recipient charging Central Tax at the
applicable rates and has made a declaration to
pay Tax.

2 Services provided by An individual

Any Business Entity located
an individual advocate
including in the taxable territory.
advocate including a
a senior
senior advocate or
advocate or
firm of advocates by firm of
way of legal services, directly or indirectly. advocates.
Explanation: “Legal service” means any
service provided in relation to advice,
consultancy or assistance in any branch of
law, in any manner and includes
representational services before any court,
tribunal or authority.

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 Reverse Charge Mechanism Ch.7

3 Services supplied An arbitral Any Business Entity

by an Arbitral tribunal. located in the taxable
Tribunal to a territory.
business entity.

Any person Any-body-corporate or

4 Services provided
by way of partnership firm located in
sponsorship TO the taxable territory.
Any body-
corporate or
partnership firm.

5 Services supplied by the Central Central Any Business Entity located

Government, State Government, Government, in the taxable territory.
State
Union territory or local authority TO a
Government,
business entity excluding,—
Union territory or
(1) Renting of immovable property, local authority
and
(2) Services specified below—
(I) Services by the Department of
Posts and the Ministry of
Railways (Indian Railways)
(ii) Services in relation to an
aircraft or a Vessel, inside or
outside the precincts of a port
or an airport;
(iii) Transport of goods or
passengers.

5A Services supplied by the Central Central Any person registered under

Government, “[excluding the Government, the Central Goods and
State Government, Services Tax Act, 2017.
Ministry of Railways (Indian
Railways)]” State Government, Union Union territory or
territory or local authority by way of local authority
renting of immovable property to a
person registered under the Central
Goods and Services Tax Act, 2017

5AA Service by way of renting of Any person GSTIN Holder

residential dwelling

7.4 CA Rajkumar
Ch.7 Reverse Charge Mechanism

3. The lender temporarily lends the securities held by him to a borrower and charges lending
fee for the same from the borrower. The borrower of securities can further sell or buy these
securities and is required to return the lended securities after stipulated period of time. The
lending fee charged from the borrowers of securities has the character of consideration and
this activity is taxable.

4. Apart from above, the activities of the intermediaries facilitating lending and borrowing of
securities for commission or fee are also taxable separately.

5. With effect from 1st October, 2019, the borrower of securities shall be liable to discharge
GST under reverse charge mechanism (RCM). The nature of GST to be paid shall be IGST
under RCM.

As per IGST LAW in addition to above following shall also be covered under: N/N: 10/2017
- Integrated Tax

SN Category of Supply of Services Supplier of service Recipient of Service

1 Import of services Any person located Any person located in the taxable
Any service supplied by any person in a non-taxable territory other than non-taxable
who is located in a non-taxable territory online recipient
territory to any person (other-than
non-taxable online recipient)

2 Ocean Freight A person located Importer, located in the

Services supplied in non-taxable taxable territory.
by a person located territory [Now discuss Mohit Minerals
in non-taxable territory by way of
Case]
transportation of goods by a vessel
from a place outside India up to the
customs station of clearance in India.

Explanation: For purpose of this notification,—

Ÿ The person who pays or is liable to pay freight for the transportation of goods by road in goods
carriage, located in the taxable territory shall be treated as the person who receives the service for
the purpose of this notification.
Ÿ A “Limited Liability Partnership” formed and registered under the provisions of the Limited Liability
Partnership Act, 2008 shall also be considered as a partnership firm or a firm.
Ÿ Provisions of this notification, in so far as they apply to the Central Government and State
Governments, shall also apply to the Parliament, State Legislatures, Courts and Tribunals.

CA Rajkumar 7.9
Ch.7 Reverse Charge Mechanism

DIRECTOR

R
S
Administration
Director Company /
Body Corporate

W.T. D/M.D/Executive Director = Employee

PTD/Independent = Not an Employee

SERVICE

SUPPLY

MD/WTD = Employee - OUT from GST

Part time Director
Of Government Body = OUT from GST
Of Non Government Body = Continue to be taxed under GST
Now we will talk about PTD of Non Government Body

ORIGIN : Section : 2
:Destination : 12(2) Recipient ie Company Head Office Location
:

TAXABLE PERSON : Company. ie Director need not required

Registration [Section 23 (2)]

NO EXEMPTION

COMPUTATION : Director fee (Including Re-Imbursement)

GST Rate (18%) ie Company liable
to Pay GST (however ITC to Company will be available)

Always RCM

TIME OF SUPPLY: Payment Date

Or E
61st day from invoice

PROCEDURAL PART : to be done by the Company

CA Rajkumar 7.17
 Reverse Charge Mechanism Ch.7

Circular No. 201/13/2023: Whether services supplied by director of a company in his personal
capacity such as renting of immovable property to the company or body corporate are subject
to Reverse Charge mechanism:
It is hereby clarified that
Ÿ services supplied by a director of a company or body corporate
Ÿ to the company or body corporate in his private or personal capacity
Ÿ such as services supplied by way of renting of immovable property to the company or body
corporate
Ÿ are not taxable under RCM.
Ÿ Only those services supplied by director of company or body corporate, which are supplied by
him as or in the capacity of director of that company or body corporate shall be taxable under
RCM.

INSURANCE AGENT

Insurance Agent Service LIC Insurance Service

J
Commission + Incentive Premium
S R
Service: Origin : Practically Agent’s
Insurance Agent Supply Residence Location
Ki Service Destination : 12(2) Location of
+ Recipient / LIC
Taxable person = LIC
+
GST Insurance Company
Exemption : SN : 39 Agent
Exempt (Rural Area Branch)
+

Computation:
Value 100000
GST 18000 GST Department
TDS (5000) Central Government
(Income Tax Depatt.)
Net Payment 95000 To Agent
+
NCM/RCM : Always RCM

+ Payment date
E
Time of Supply or
+ 61st Day from invoice

Procedural Part : to be done by Insurance Company

7.18 CA Rajkumar
Ch.8 Invoice

Ch 8 INVOiCE

Tax INVOICE/Bill of supply/Receipt Voucher: For supply of goods or services

Back Ground: Section: 31 to 34 of CGST ACT, 2017 AND CGST RULES, 2017 [Rule 46 to 55]
Section 31 Who, when, how to issue invoice/ bill of supply, Revised Invoice etc
Section 32 Only a registered person can issue Invoice or collect GST
Section 33 GST will be recovered only as per law. Show off GST as Charged on tax
invoice and on other documents
Section 34 Debit note and credit note

Section 31: who, when and how to issue invoice

Who is Tax invoice:

required Tax invoice is required to be issued by the following persons:
to issue
Ÿ A Registered supplier paying tax under regular scheme shall issue TAX
Invoice /Bill
off supply. INVOICE.
Ÿ A Registered Recepient (RCM): Recipient liable to pay GST under reverse
charge need to issue an invoice.
Bill of supply:
Ÿ A Registered supplier making EXEMPTED supplies shall issue a BILL OF
SUPPLY
Ÿ A Registered taxable Person Paying Tax under COMPOSITION SCHEME shall
issue a BILL OF SUPPLY.

Note: Small value invoice /Bill of supply:

Ÿ Where supply is made to an unregistered person [B TO C]

Ÿ having value below ` 200

Ÿ and Recepient is not willing to take INVOICE.

Then the supplier need not to mandatorily to issue Invoice or Bill of supply,
However supplier needs to issue a consolidated invoice /bill of supply at the end
of the day and will keep that document himself.

Receipt Voucher: A registered Supplier shall,

Ÿ On receipt of advance payment with respect to any supply,

Ÿ issue a receipt voucher evidencing receipt of such payment.

ERP based Bill: No need of signature in case of computer generated
documents.

8.1
CA Rajkumar
Ch.8 Invoice

Definitions

Continuous Means
Supply of Goods Ÿ a supply of goods which is provided, or agreed to be provided,
continuously or on recurrent basis,
[Section 2]
Ÿ under a contract, (whether or not by means of a wire, cable, pipeline or
other conduit,) and
Ÿ for which the supplier invoices the recipient on a regular or periodic
basis and
Ÿ Includes supply of such goods as the Government may, subject to such
conditions, as it may, by notification, specify.
Continuous Means
Supply of Ÿ a supply of services which is provided, or agreed to be provided,
Services continuously or on recurrent basis,
[Section 2] Ÿ under a contract, for a period exceeding 3 months
Ÿ with periodic payment obligations and
Ÿ includes supply of such services as the Government may, subject to such
conditions, as it may, by notification, specify

Concept of E-INVOICE [Relevant extract from Rule 48]

Why E –Invoicing
Ÿ An invoice is very important document in the world of GST.
Ÿ On the basis of Invoice, output liability of a taxpayer / supplier is determined and ITC can
be taken by the Recepient only on the basis of Invoice.
Ÿ Generally, A supplier will always try to evade Output GST and the recipient always try to
take fake ITC on the basis of Invoice.
Ÿ So Government wants immediate information so that no scope of manipulation remains till
filing of return.
Ÿ To overcome with such kinds of issues Government introduce various concept like Aadhaar
linkage, 1% payment from E-cash Ledger , E – way bill etc. [But E-way has its own
limitations like it is not applicable on services, Goods having value upto Rs. 50,000]
Ÿ So now finally Government introduced the concept of E- Invoicing. It provides real time
information (At the time of issue of invoice) to Government, so that no scope of
manipulation at later stage.
Ÿ ONE MORE THING E- INVOICE IS THE REPLACEMENT OF NORMAL INVOICE , DR/CR NOTES
AND NOT OF BILL OF SUPPLY.

The invoice shall be prepared by such class of registered persons

Ÿ whose aggregate turnover in a financial year exceeds Rs.5 Crore 10 Crore
Ÿ by including such particulars contained in FORM GST INV-01
Ÿ after obtaining an Invoice Reference Number
Ÿ by uploading information contained therein on the GST Portal.

8.9
CA Rajkumar
 Invoice Ch.8

Ÿ in such manner and subject to such conditions and restrictions as may be specified in the
notification.
Ÿ However, Commissioner may, exempt a person or a class of registered persons from issuance
of invoice for a specified period.

Notification @ E Invoicing :- Hereby notifies registered person,

Ü Whose aggregate turnover in any preceding financial year from 2017-18 onwards exceeds
Rs.5 Crore 10 Crore , as a class of registered person
Ÿ who shall prepare invoice and other prescribed documents, in terms of Rule 48(4)

Ÿ in respect of supply of goods or services or both

Ø to a registered person [B to B supplies] or

Ø for exports.
other than a Special Economic Zone unit and the followings

Insurance company, Banking company/NBFC/Financial Institution

Goods transport agency
Passenger Transporter
Cinema halls
OIDAR supplier
A government department, a local authority

Q. 1 Whether the exemption from mandatory generation of e-invoices is available for the entity as
whole, or whether the same is available only in respect of certain supplies made by the said entity?
Ans. Certain entities/sectors have been exempted from mandatory generation of e-invoices
It is hereby clarified that the said exemption from generation of e-invoices is for the entity as a whole
and is not restricted by the nature of supply being made by the said entity. Circular No. 186/18/2022
Illustration: A Banking Company providing banking services, may also be involved in making supply
of some goods, including bullion. The said banking company is exempted from mandatory issuance
of e-invoice, for all supplies of goods and services and thus, will not be required to issue e-invoice with
respect to any supply made by it

Q.2 Whether carrying physical copy of invoice is compulsory during movement of goods in cases
where suppliers have issued invoices in the manner prescribed under rule 48 (4)of the CGST Rules,
2017 (i.e. in cases of e-invoice).
Ans. It is clarified that there is no need to carry the physical copy of tax invoice in cases where
invoice has been generated by the supplier in the manner prescribed under Rule 48(4) of the
CGST Rules and production of the Quick Response (QR) code having an embedded Invoice
Reference Number (IRN) electronically, for verification by the proper officer, would suffice.

8.10
Ch.8 Invoice

Q.3 Whether e-invoicing is applicable for supplies made by a registered person, whose turnover
exceeds the prescribed threshold for generation of e-invoicing, to Government Departments or
establishments/Government agencies/ local authorities/ PSUs which are registered solely as TDS
Deductor?
Ans. Registration of TDS Deductor is fall under section 24 of CGST Act, 2017 as Mandatory
Registration. Therefore supplies to such persons will be called as B to B supplies.

Accordingly, the registered person, whose turnover exceeds the threshold for generation of e-
invoicing, is required to issue e-invoices for the supplies made to such Government Departments or
establishments/ Government agencies/ local authorities/ PSUs, etc.

Benefits of E- Invoice:
1. Curb tax evasion through check on fake ITC and Invoices
2. Automated Updation of GSTR 1/2A/2B and E way Bill.
3. Ease of compliance.
4. Enhance efficiency of tax administration.
5. Paperless work
6. Etc.

How the concept of E- Invoice will work

Create invoice as earlier but *Upload the details on portal

ERP SYSTEM
in standard Format in form @...www.einvoice1/2/3/4/.gst.gov.in
OF SUPPLIER
INV 01 ie machine readable *Portal will read, check, digital sign and
format @ JSON file create a QR code and also generate
[JAVA SCRIPT OBJECT INVOICE REFERANCE NUMBER [IRN, a 64
NOTATION] digit code]
*And transmit the data to—
www.gst.gov.in [From this data
output liability of supplier will be
reflected in ANX 01 and Recipient's ITC
will be reflected in ANX 02]
www.ewaybill.gst.gov.in [From this
data E-way will get ready @ PART A,
However if Transporter's details are also
given in invoice then PART B shall also be
Now data will be emailed to supplier prepared automatically]
in PDF file with QR Code

- After that PDF file / QR code will be given to transporter

- Officer will check it on the way with QR Code scanner
(Specific Govt app available on e-invoice website)
- Such QR Code contains the details of supplier, Recepient,
supply detail, IRN, Digital sign etc.

8.11
CA Rajkumar
 Invoice Ch.8

CGST RULES, 2017

Rule 46: Tax Subject to Rule 54, a tax invoice referred to in section 31 shall be issued by
invoice: content the registered person containing the following particulars, namely,—

(a) Name, address and GSTIN of the supplier;

(b) A consecutive serial number and unique for a financial year;

(c) Date of its issue;

(d) Name, address and GSTIN or UIN of Recepient in case of B to B

Transaction.

(e) If such recipient is un-registered and where the value of the taxable
supply is Rs. 50,000 or more then Name and address of the recipient and
the address of delivery, along with the name of the State and its code.

(f) If such recipient is un-registered and where the value of the taxable
supply is less than Rs. 50,000 and the recipient requests that such details
be recorded in the tax invoice then Name and address of the recipient
and the address of delivery, along with the name of the State and its
code,
Provided that “in cases involving supply of online money gaming or in
cases”
Where any taxable service is supplied
Ÿ by or through an electronic commerce operator or by a supplier of online
information and database access or retrieval services
Ÿ to a recipient who is un-registered, irrespective of the value of such supply,
Ÿ a tax invoice issued by the registered person shall contain the name of the
state of the recipient and the same name and address of the recipient
along with its PIN code and the name of the State and the said address shall
be deemed to be the address on record of the recipient.
(g) HSN code for goods or services;

(h) Description of goods or services;

(i) Quantity in case of goods and unit or Unique Quantity Code thereof;

(j) Total value of supply of goods or services or both;

(k) Taxable value of the supply of goods or services or both taking into
account discount or abatement, if any;

(l) Rate of tax (central tax, State tax, integrated tax, Union territory tax or
cess);

(m) Amount of tax charged in respect of taxable goods or services (central

tax, State tax, integrated tax, Union territory tax or cess);

8.20
Ch.9 Time of Supply

Ch 9 TiME OF SUPPLY

List of Sections
Section 12: Time of supply- in case of Goods
Section 13: Time of supply- in case of Services
Section 14: Time of supply in case of change in rate of GST

BACKGROUND

GST is payable on supply of goods or services.

Ÿ A supply consists of elements that can be separated in time, like purchase order / agreement,
dispatch (of goods), delivery (of goods) or provision or performance of service, entry in the
records, payment, and entry of the payment in the records or deposit in the bank.
Ÿ So, at which of these points of time does GST become payable?

Ÿ Does it become payable when an agreement to supply goods or services is made, or when the
goods are shipped or the services are provided, or when the invoice is issued or when payment
is made?
Ÿ What if the goods are shipped over a period of time?

Ÿ What if the service is provided over a period of time?

Ÿ Provisions relating to 'time of supply' provide answer to all such and other questions that arise
on the timing of the liability to pay CGST and SGST/UTGST (intra-State supply) and IGST (inter-
State supply) as time of supply fixes the point in time when the liability to pay tax arises. The
CGST Act provides separate provisions for time of supply for goods and services vide sections
12 and 13.

Meaning of “Date of Payment” for supplier: Date of bookish entry by supplier or Date of Actual
credit in supplier's bank, whichever is earlier.
Meaning of “Date of Payment” for Recipient: Date of bookish entry by Recipient or Date of
Actual debit in recipient's bank, whichever is earlier.

9.1
CA Rajkumar
Ch.9 Time of Supply

Legal Text

Section: 12 Time of supply of GOODS

(1) The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with
the provisions of this section.

(2) The time of supply of goods shall be:—

General Provision Invoice : (a) The date of issue of invoice by the supplier or the last date on
which he is required, under section 31, to issue the invoice with respect to the
supply; or
PAYMENT: (b) The date on which the supplier receives the payment (the date
on which the payment is entered in his books of account or the date on which
the payment is credited to his bank account, whichever is earlier) with respect
to the supply.
[WHICHEVER IS EARLIER]
Notification No. 66/2017: TIME OF SUPPLY ON INVOICE BASIS
ignoring advance payments--
Ÿ The registered person who did not opt for the composition levy under
section 10 other than the registered person making supply of specified
actionable claims as defined in section 2(102A) of the said Act,” as the class
of persons
Ÿ shall pay the central tax on the outward supply of GOODS at the time of
supply as specified in section 12(2)(a) of the said Act
Ÿ including in the situations attracting the provisions of section 14 of the said
Act,
Relaxation: Where the supplier of taxable goods receives an amount up to `
1,000 in excess of the amount indicated in the tax invoice, the time of supply to
the extent of such excess amount shall, at the option of the said supplier, be the
date of issue of invoice in respect of such excess amount.
Explanation 1.––For the purposes of clauses (a) and (b), “supply” shall be
deemed to have been made to the extent it is covered by the invoice or, as
the case may be, the payment.

In case of Reverse (3) In case of supplies in respect of which tax is paid or liable to be paid on
Charge reverse charge basis, the time of supply shall be:
RECEIPTS OF GOODS (a) The date of the receipt of goods; or
PAYMENT (b) The date of payment as entered in the books of account
of the recipient or the date on which the payment is debited in his bank
account, whichever is earlier; or
INVOICE+ 30 DAYS (c) The date immediately following 30 days from
the date of issue of invoice or any other document, by whatever name
called, in lieu thereof by the supplier:
[WHICHEVER IS EARLIEST]
Note: Provided that where it is not possible to determine the time of supply
under clause (a) or clause (b) or clause (c), the time of supply shall be the
date of ENTRY in the books of account of the Recipient of supply.

9.7
CA Rajkumar
Ch.10 Input Tax Credit

Ch 10 Input Tax Credit

Analysis of Section 16: CONDITIONS FOR Claiming I.T.C.

PORTAL PORTAL

GSTR=1 by 11th of next month

E- Liability Register-Update

Supplier Supply of Goods/Service “Received” Recipient

+ Invoice + TOS Supply
+ O/P GST Payment Book I.T.C. in his
+ Return Books of A/c +
File Return

Section 16 – ITC book @ Generally (12 conditions)

Section 17 - * (1) (2) (3) (4): Mix / Common Credit
* (5) (6): Blocked credited (i.e. No means no)
Section 18- ITC book @ Special circumstances
Section 19 - ITC book @ Job work
Section 20 & 21- ITC book @ in case of input service Distributor

Sn 12 conditions to Book ITC

1 Recipient should have Invoice issued by Supplier/SELF, Invoice/Debit NOTE/ISD

Invoice/Bill of ENTRY
2 Goods/Service-Received by Recipient himself or Received by III Party on Behalf of
Recipient.
Note: If Goods Received in Installment then deemed to be received on Receipt of last LOT.
And The details of input tax credit in respect of the said supply communicated to
such registered person under section 38 has not been restricted.
3 Recipient Need to file – Valid GSTR-3B on time.
4 Supplier Need to file – Valid GSTR -3B on time.
Rule 37 A: Where input tax credit has been availed by a registered person
- in the return in FORM GSTR-3B for a tax period in respect of such invoice or debit note,
- the details of which have been furnished by the supplier in GSTR:1/IFF
- but the return in FORM GSTR-3B for the tax period corresponding to the said statement of
outward supplies has not been furnished

10.1
6.1
CA Rajkumar
 Input Tax Credit Ch.10

- by such supplier till the 30th day of September following the end of financial year in
which the input tax credit in respect of such invoice or debit note has been availed,
- the said amount of input tax credit shall be reversed by the said registered person, in
FORM GSTR-3B on or before the 30th day of November following the end of such
financial year:
Provided that
- Where the said amount of input tax credit is not reversed by the registered person in a
return in FORM GSTR-3B
- on or before the 30th day of November following the end of such financial year during
which such input tax credit has been availed,
- such amount shall be payable by the said person along with interest thereon under
section 50.
Provided further that
- Where the said supplier subsequently furnishes the return in FORM GSTR-3B for the said
tax period,
the said registered person may re-avail the amount of such credit in the return in FORM
GSTR-3B for a tax period thereafter.

5 Bill Payment by “Recipient to supplier: should be made within 180 Days from invoice date.
(For NCM supplies only)
* IF NOT made: then on 181 day, ITC Reversal.
st

A registered person,
Ÿ Who has availed of input tax credit on any inward supply (other than RCM inward
supplies)
Ÿ but fails to pay to the supplier thereof, the amount towards the value of such supply
along with the tax payable thereon, within the time limit of 180 days
Ÿ shall pay an amount equal to the input tax credit availed in respect of such supply
shall be paid by him added to output tax liability along with interest payable
thereon under section 50,
Ÿ while furnishing the return in FORM GSTR-3B for the tax period immediately
following the period of 180 days from the date of the issue of the invoice:
* What if made After 180 Days: Book (Re-Avail) ITC on Payment Basis ie payment made by
him to the supplier (i.e. proportionately)
*WHAT About 'FOC' supplies: (RBI Ki Agency) then the bill Amount shall be deemed to
have been paid.
*What about Suppliers obligation paid by Recipient: it shall be deemed to have been
paid for the purposes of condition of 180 days.

6 INWARD Supply: USE / intended to be used for Business or Furtherance of business.

10.2 CA Rajkumar
Ch.10 Input Tax Credit

What is exempted supplies What is not exempted supplies

1. Supplies attracting 100 % E/N 1.Supplies where consideration received in
form of interest and discount (except
Banking co. financial institution, NBFC)
2. NIL rated supplies 2.Transportation of goods by vessel from
India to outside India.
3. Non- taxable supplies 3. The Value of Duty Credit Scrip
4. Supplies taxable under RCM
5. Securities trading @1%
6. Sale of land and completed building
@ circle rate
7. supply of Goods Lying in warehouse.

Question Based on Section : 17 (1) + (2) + (3) + (4)

Note: In case of mix use first of all book whole common credit ie common credit will be transferred
to E-credit ledger and after that Reverse to the extent of ineligible credit.
Q.1
Total INPUT TAX Outward Supplies
` 1,00,000
ABC Ltd.
Exempted = ` 30 Lakh
Non-Exempted= ` 40 Lakh

Which Includes:- (Note: All above values are Exclusive of All TAXES.)

* Non-Eligible Input Tax [u/s 17(5)] = ` 6000/- [not allowed]

* Exclusive use in Exempted supplies ` 9000/- [not allowed]

* Exclusive use in Non-Business purpose ` 5000/- [not allowed]

* Exclusive use in Non-Exempted & Business purpose = ` 10,000/-[fully allowed]

* Balance inward supplies (Input Tax) – used on MIX/Common Use.

i.e. Use in Exempted & Non-Exempted, Business & Non-Business Purpose = ` 70,000/-
[Deemed itc related to non-business purpose = 70,000 *5% = 3500 and itc related to exempted
purpose : 70,000 * 30/70= 30,000 ie total ineligible itc out of 70,000= ` 33,500 so it shall be reversed.
Now take annualized figure: [ASSUMING that above data repeat for all the 12 months]

Total common credit 7̀0,000 *12= 8,40,000

Ineligible credit to be reversed: 33500* 12= 4,02,000

10.29
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CA Rajkumar
Ch.10 Input Tax Credit

Section: 17 Apportionment of credit and blocked credits

Common usage of (1) Where the goods or services or both are used by the registered person
goods / services:
Business and Non partly for the purpose of any business and partly for other purposes,
business purpose: the amount of credit shall be restricted to so much of the input tax
ITC Restricted
as is attributable to the purposes of his business.

Common usage of (2) Where the goods or services or both are used by the registered person
goods/services: taxable
(Inc. Zero rated) Ü partly for effecting Non exempted supplies and partly for effecting
and exempted supplies: exempt supplies under the said Acts,
ITC Restricted Ü the amount of credit shall be restricted to so much of the input tax
Ü as is attributable to the said taxable supplies including zero-rated
supplies.

(3) Value of Exempt supplies: The value of exempt supply shall be such as may
be prescribed, and shall include supplies
Ü on which the recipient is liable to pay tax on reverse charge basis,
Ü transactions in securities,
Ü sale of land and sale of completed building.
Explanation: Value of Exempt supply'' shall not include the value of
negative listed supplies. But following shall be added..
Ü The value of Sale of Land and Completed Building and
Ü The value of Sale of Goods lying in Customs Warehouse.

Valuation: As per Rule 45:

(a) The value of land and building: shall be taken as the same as
adopted for the purpose of paying stamp duty; and
(b) The value of security shall be taken as 1% of the sale value of
such security.

(4) Additional option to banking or financial including NBFC sector: A

banking company or a financial institution including a NBFC,
Ü shall have the option to
Ü either comply with the provisions of sub-section (2), OR
Ü Avail of, every month, an amount equal to 50% of the eligible input tax
credit on inputs, capital goods and input services in that month and the
rest shall lapse: and
(a) Lock in period will be same FY.
(b) Restriction of 50% shall not apply to supply between deemed distinct.

10.33
6.33
CA Rajkumar
 Input Tax Credit Ch.10

NO ITC ie (5) Notwithstanding anything contained in section 16(1) and section 18(1),
Negative List of input tax credit shall not be available in respect of the following, namely:-
ITC
ITC NOT Allowed ITC Allowed
(a) Motor Motor vehicles for However in some situations
Vehicle max transportation of persons ITC shall be allowed when
capacity 13 having approved seating they are used for making the
persons capacity of maximum 13 following taxable supplies,
persons (including the namely:-
driver), (A) further supply of such
motor vehicles; or
(B) transportation of
passengers; or
(C) imparting training on
driving such motor vehicles;

(aa) Vessel However in some situations

Vessels and aircraft,
ITC shall be allowed when
and Aircraft
they are used––
(i) for making the following
taxable supplies, namely:-
(A) further supply of such
vessels or aircraft; or
(B) t r a n s p o r t a t i o n o f
passengers; or
(C) imparting training on
navigating such vessels; or
(D) imparting training on
flying such aircraft;
(ii) for transportation of
goods;

(ab) Services of general However the input tax credit in

insurance, servicing, respect of such services shall be
repair and maintenance available-
in so far as they relate to (i) where the motor vehicles,
motor vehicles, vessels vessels or aircraft referred to
or aircraft referred to in in clause (a) or clause (aa) are
clause (a) or clause (aa): used for the purposes
specified therein;
(ii) where received by

Ÿ Manufacturer of such motor

vehicles, vessels or aircraft;
or

10.34 CA Rajkumar
 Input Tax Credit Ch.10

(d) Building Goods or services or both Goods or services or both

Materiel and received by a taxable person received by a taxable person
construction for construction of an for plant or machinery.
services immovable property on his Note: Construction Includes
own account including when re-construction, renovation,
such goods or services or additions or alterations.
both are used in the course
or furtherance of business.
(e) Goods or services or both
Composition on which tax has been
Dealer paid under section 10.

(f) NR Goods or services or both

received by a non-resident
taxable person except on
goods imported by him;

(fa) CSR Goods or services or both

Activities received by a taxable person,
which are used or intended to
be used for activities relating
to his obligations under
corporate social responsi-
bility.

(g) Personal Goods or services or both

consumption used for personal
consumption

(h) Goods Goods lost, stolen, destroyed,

Lost etc. written off or disposed of by
way of gift or free samples

(i) Other Any tax paid in accordance

with assessment by officer
under fraud cases.

Supportive (6) “Plant and machinery” means Equipment, and machinery fixed to earth
provision that are used for making outward supply.
But following shall not be considered as plant and machinery ie it shall be
treated as immovable property…..
(i) Land, Building or Any other civil structures;
(ii) Telecommunication towers; and
(iii) Pipelines laid outside the factory premises.

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Ch.10 Input Tax Credit

After (k) The remainder of the common credit shall be the

deducting D1 eligible input tax credit attributed to the purposes of
and D2
business and for effecting supplies other than exempted
remaining
supplies but including zero rated supplies and shall be
Credit will be
Eligible (C3) denoted as 'C3', where,-C3 = C2 - (D1+D2).
Note: the amount "C3" "D1 and „D2 shall be computed
separately for input tax credit of central tax, State tax,
Union territory tax and integrated tax and declared in
FORM GSTR-3B or through FORM GST DRC-03;

Reversal of The amount equal to aggregate of 'D1' and 'D2' shall be

amount equal reversed by the registered person in FORM GSTR-3B or
to D1 and D2
through FORM GST DRC-03.

(2) ITC determined under sub-rule (1) shall be calculated finally for the
financial year before the due date for furnishing of the return for the month of
September of next FY and-

Under Reversal (Where the aggregate of the amounts calculated finally in

Earlier then respect of 'D1' and 'D2' exceeds the aggregate of the
difference shall amounts determined under sub-rule (1) in respect of 'D1'
be liable to be and 'D2', such excess shall be reversed by the registered
reversed up to person upto September of next FY and the said person
SEP of next FY shall be liable to pay interest on the said excess amount at
with interest the rate specified section 50 (1) for the period starting
from 1 April
st
from the first day of April of the succeeding financial year
of next FY till till the date of payment; or
the date of
payment

Excess reversal Where the aggregate of the amounts determined under sub-
earlier then rule (1) in respect of 'D1' and 'D2' exceeds the aggregate of the
differential amounts calculated finally in respect of 'D1' and 'D2', such
amount shall be excess amount shall be claimed as credit by the registered
claimed as ITC
person in his return for a month not later than the month of
upto SEP of
September following the end of the financial year to which
next FY
such credit relates.

Rule 43:
Manner of (1) Subject to the provisions of section 16(3), the ITC in respect of capital
determination goods, being partly used for the purposes of business and partly for other
of input tax purposes, or partly used for effecting taxable supplies including zero rated
credit in supplies and partly for effecting exempt supplies, shall be attributed to the
respect of purposes of business or for effecting taxable supplies in the following
capital goods manner, namely,—
and reversal
thereof in
certain cases

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Ch.10 Input Tax Credit

Calculate (e) The amount of ITC attributable to a tax period on common

Monthly
capital goods during their useful life, be denoted as 'Tm' and
Common
calculated as- Tm= Tc÷60
Credit ™
Explanation.- It is clarified that useful life of any capital goods
shall be considered as five years from the date of invoice and the
said formula shall be applicable during the useful life of the said
capital goods.

Find out (g) The amount of common credit attributable towards

exempted
exempted supplies, be denoted as 'Te', and calculated as- Te=
related ITC
(E÷ F) x Tr , Where, 'E' is the aggregate value of exempt
[Te] @
Proportionately supplies, made, during the tax period, and 'F' is the total
turnover IN THE STATE of the registered person during the
tax period:

Exempted (h) The amount Te along with the applicable interest shall,
related ITC
during every tax period of the useful life of the concerned
shall be added
capital goods, be added to the output tax liability of the
to OUTPUT tax
liability with person making such claim of credit.
interest

Segregate Te (i) The amount Te shall be computed separately for input tax
credit of central tax, State tax, Union territory tax and
integrated tax and declared in FORM GSTR-3B.

Explanation: For the purposes of Rule 42 and this Rule, it is hereby clarified that
the aggregate value of exempt supplies shall exclude:—
(a) The value of services by way of accepting deposits, extending loans or
advances where the consideration is represented by way of interest or
discount,
(However in case of a banking company or a financial institution including a
NBFC, engaged in supplying services by way of accepting deposits,
extending loans or advances above service shall be called as exempted
service); and
(b) The value of supply of services by way of transportation of goods by a vessel
from the customs station of clearance in India to a place outside India.
(c) The value of supply of Duty Credit Scrips.
Explanation :- For the purpose of rule 42 and Rule 43,
Ü the value of activities or transactions mentioned in Schedule III - paragraph
8 - sub-paragraph (a) [Supply of warehoused goods to any person before
clearance for home consumption;] which is required to be included in the
value of exempt supplies under the Explanation to section 17(3) of the Act
Ü shall be the value of supply of goods from Duty Free Shops at arrival
terminal in international airports to the incoming passengers.

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 Input Tax Credit Ch.10

The said provisions of law do not restrict availment of input tax credit by the recipient located in India
if the place of supply of the said input service is outside India.

Thus, the recipient of service of transportation of goods shall be eligible to avail input tax credit in
respect of the IGST so charged by the supplier, subject to the fulfilment of other conditions laid down
in section 16 and 17 of the CGST Act.

In the above illustration, X would be eligible to take input tax credit of IGST in respect of supply of
services received by him from Z, subject to the fulfilment of other conditions laid down in section 16
and 17 of the CGST Act.

Circular No. 195/07/2023: Availability of ITC in respect of warranty replacement of parts and
repair services during warranty period.

Q.1 There are cases where the original equipment manufacturer offers warranty for the goods
supplied by him to the customer and provides replacement of parts and/ or repair services to the
customer during the warranty period, without separately charging any consideration at the time of
such replacement/ repair services.
Whether GST would be payable on such replacement of parts or supply of repair services, without any
consideration from the customer, as part of warranty?
Ans. The value of original supply of goods (provided along with warranty) by the manufacturer to the
customer includes the likely cost of replacement of parts and / or repair services to be incurred during
the warranty period, on which tax would have already been paid at the time of original supply of
goods.
As such, where the manufacturer provides replacement of parts and/ or repair services to the
customer during the warranty period, without separately charging any consideration at the time of
such replacement/ repair services, no further GST is chargeable on such replacement of parts and/ or
repair service during warranty period.
However, if any additional consideration is charged by the manufacturer from the customer, either
for replacement of any part or for any service, then GST will be payable on such supply with
respect to such additional consideration.
Q.2 Whether in such cases, the manufacturer is required to reverse the input tax credit in respect
of such replacement of parts or supply of repair services as part of warranty, in respect of which
no additional consideration is charged from the customer?
Ans. In such cases, the value of original supply of goods (provided along with warranty) by the
manufacturer to the customer includes the likely cost of replacement of parts and/ or repair services
to be incurred during the warranty period.
Therefore, these supplies cannot be considered as exempt supply and accordingly, the manufacturer,
who provides replacement of parts and/ or repair services to the customer during the warranty
period, is not required to reverse the input tax credit in respect of the said replacement parts or on the
repair services provided.
Q.3 Whether GST would be payable on replacement of parts and/ or repair services provided by a

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Ch.10 Input Tax Credit

distributor without any consideration from the customer, as part of warranty on behalf of the
manufacturer?
Ans. There may be instances where a distributor of a company provides replacement of parts and/ or
repair services to the customer as part of warranty on behalf of the manufacturer and no separate
consideration is charged by such distributor in respect of the said replacement and/ or repair services
from the customer.
In such cases, as no consideration is being charged by the distributor from the customer, no GST
would be payable by the distributor on the said activity of providing replacement of parts and/ or
repair services to the customer.
However, if any additional consideration is charged by the distributor from the customer, either for
replacement of any part or for any service, then GST will be payable on such supply with respect to
such additional consideration.
Q.4 In the above scenario where the distributor provides replacement of parts to the customer as
part of warranty on behalf of the manufacturer, whether any supply is involved between the
distributor and the manufacturer and whether the distributor would be required to reverse the input
tax credit in respect of such replacement of parts?
Ans:
(a) There may be cases where the distributor replaces the part(s) to the customer under warranty
either by using his stock or by purchasing from a third party and charges the consideration for the
part(s) so replaced from the manufacturer, by issuance of a tax invoice, for the said supply made by
him to the manufacturer.
In such a case, GST would be payable by the distributor on the said supply by him to the
manufacturer and the manufacturer would be entitled to avail the input tax credit of the same,
subject to other conditions of CGST Act. In such case, no reversal of input tax credit by the
distributor is required in respect of the same.
(b) There may be cases where the distributor raises a requisition to the manufacturer for the part(s) to
be replaced by him under warranty and the manufacturer then provides the said part(s) to the
distributor for the purpose of such replacement to the customer as part of warranty.
In such a case, where the manufacturer is providing such part(s) to the distributor for replacement to
the customer during the warranty period, without separately charging any consideration at the
time of such replacement, no GST is payable on such replacement of parts by the manufacturer.
Further, no reversal of ITC is required to be made by the manufacturer in respect of the parts so
replaced by the distributor under warranty.
(c) There may be cases where the distributor replaces the part(s) to the customer under warranty out
of the supply already received by him from the manufacturer and the manufacturer issues a credit
note in respect of the parts so replaced.
Accordingly, the tax liability may be adjusted by the manufacturer, subject to the condition that the
said distributor has reversed the ITC availed against the parts so replaced.

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Q.5 Where the distributor provides repair service, in addition to replacement of parts or otherwise, to
the customer without any consideration, as part of warranty, on behalf of the manufacturer but
charges the manufacturer for such repair services either by way of issue of tax invoice or a debit note,
whether GST would be payable on such activity by the distributor?
Ans. In such scenario, there is a supply of service by the distributor and the manufacturer is the
recipient of such supply of repair services.
Hence, GST would be payable on such provision of service by the distributor to the manufacturer and
the manufacturer would be entitled to avail the input tax credit of the same, subject to other
conditions of CGST Act.
Q.6 Sometimes companies provide offers of Extended warranty to the customers which can be
availed at the time of original supply or just before the expiry of the standard warranty period.
Whether GST would be payable in both the cases?
Ans.
(a) If a customer enters in to an agreement of extended warranty with the manufacturer at the time of
original supply, then the consideration for such extended warranty becomes part of the value of
the composite supply, the principal supply being the supply of goods, and GST would be payable
accordingly.
(b) However, in case where a consumer enters into an agreement of extended warranty at any time
after the original supply, then the same is a separate contract and GST would be payable by the
service provider, whether manufacturer or the distributor or any third party, depending on the
nature of the contract (i.e. whether the extended warranty is only for goods or for services or for
composite supply involving goods and services)

Circular No. 199/11/2023: Clarification regarding taxability of services provided by an office of

an organization in one State to the office of that organization in another State, both being
distinct persons.
Let us consider a business entity which has Head Office (HO) located in State-1 and a branch offices
(BOs) located in other States. The HO procures some input services e.g. security service for the entire
organisation from a security agency (third party). HO also provides some other services on their own
to branch offices (internally generated services).
The issues that may arise with regard to taxability of supply of services between distinct persons in
terms of section 25(4)of the CGST Actare being clarified as follows…

Q.1 Whether HO can avail the input tax credit (hereinafter referred to as 'ITC') in respect of
common input services procured from a third party but attributable to both HO and Bos or
exclusively to one or more BOs, issue tax invoices under section 31 to the said BOs for the said
input services and the BOs can then avail the ITC for the same or whether is it mandatory for the
HO to follow the Input Service Distributor (hereinafter referred to as 'ISD') mechanism for
distribution of ITC in respect of common input services procured by them from a third party
but attributable to both HO and Bos or exclusively to one or more Bos?
Ans . It is clarified that in respect of common input services procured by the HO from a third party but
attributable to both HO and BOs or exclusively to one or more BOs, HO has an option to distribute ITC

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Ch.10 Input Tax Credit

in respect of such common input services by following ISD mechanism laid down in Section 20 of
CGST Act read with rule 39 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to
as 'the CGST Rules'). However, as per the present provisions of the CGST Act and CGST Rules, it is not
mandatory for the HO to distribute such input tax credit by ISD mechanism. HO can also issue tax
invoices under section 31 of CGST Act to the concerned BOs in respect of common input services
procured from a third party by HO but attributable to the said BOs and the BOs can then avail ITC on
the same subject to the provisions of section 16 and 17 of CGST Act.
In case, the HO distributes or wishes to distribute ITC to BOs in respect of such common input services
through the ISD mechanism as per the provisions of section 20 of CGST Act read with rule 39 of the
CGST Rules, HO is required to get itself registered mandatorily as an ISD in accordance with Section
24(viii) of the CGST Act.
Further, such distribution of the ITC in respect a common input services procured from a third party
can be made by the HO to a BO through ISD mechanism only if the said input services are attributable
to the said BO or have actually been provided to the said BO. Similarly, the HO can issue tax invoices
under section 31 of CGST Act to the concerned BOs, in respect of any input services, procured by HO
from a third party for on or behalf of a BO, only if the said services have actually been provided to the
concerned Bos.
Q.2 In respect of internally generated services, there may be cases where HO is providing certain
services to the BOs for which full input tax credit is available to the concerned BOs. However, HO
may not be issuing tax invoice to the concerned BOs with respect to such services, or the HO may not
be including the cost of a particular component such as salary cost of employees involved in
providing said services while issuing tax invoice to BOs for the services provided by HO to BOs.
Whether the HO is mandatorily required to issue invoice to BOs under section 31 of CGST Act for such
internally generated services, and/ or whether the cost of all components including salary cost of HO
employees involved in providing the said services has to be included in the computation of value of
services provided by HO to BOs when full input tax credit is available to the concerned Bos.
Ans. The value of supply of services made by a registered person to a distinct person needs to be
determined as per rule 28 of CGST Rules, read with sub-section (4) of section 15 of CGST Act. As per
clause (a) of rule 28, the value of supply of goods or services or both between distinct persons shall be
the open market value of such supply. The second proviso to rule 28 of CGST Rules provides that
where the recipient is eligible for full input tax credit, the value declared in the invoice shall be deemed
to be the open market value of the goods or services. Accordingly, in respect of supply of services by
HO to BOs, the value of the said supply of services declared in the invoice by HO shall be deemed to be
open market value of such services, if the recipient BO is eligible for full input tax credit.
Accordingly, in cases where full input tax credit is available to a BO, the value declared on the
invoice by HO to the said BO in respect of a supply of services shall be deemed to be the open market
value of such services, irrespective of the fact whether cost of any particular component of such
services, like employee cost etc., has been included or not in the value of the services in the invoice.
Further, in such cases where full input tax credit is available to the recipient, if HO has not issued a
tax invoice to the BO in respect of any particular services being rendered by HO to the said BO, the
value of such services may be deemed to be declared as Nil by HO to BO, and may be deemed as open
market value in terms of second proviso to rule 28 of CGST Rules.
Q.3 In respect of internally generated services provided by the HO to BOs, in cases where full input

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 Input Tax Credit Ch.10

tax credit is not available to the concerned BOs, whether the cost of salary of employees of the HO
involved in providing said services to the BOs, is mandatorily required to be included while computing
the taxable value of the said supply of services provided by HO to Bos.
Ans. In respect of internally generated services provided by the HO to BOs, the cost of salary of
employees of the HO, involved in providing the said services to the BOs, is not mandatorily required
to be included while computing the taxable value of the supply of such services, even in cases where
full input tax credit is not available to the concerned BO

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Ch.11 Registration

Ch 11 Registration

Who is Section: 22 Registration is required after Threshold Limit of Rs 10/20/40 Lakhs.

required
Section: 23 No Registration
to take
Registration? Section: 24 Mandatory Registration
[These 3 Sections already covered with the chapter: Taxable Person]

When to take Generally registration is required to be obtained within 30 days from the
registration date on which he becomes liable to registration.
In special cases:
Casual Taxable Person and Non Resident:
Application for RC: (5 Days in advance) The person shall apply for
registration at least 5 DAYS PRIOR to commencement of business in and such
person shall make taxable supplies only after issuance of RC.
Period of RC: (90 +90 days) RC issued to such persons shall be valid for a period
of 90 days +90 days OR as specified in application for reg. from the effective
date of registration (whichever is earlier).
Advance deposit of Tax: such person MAY deposit advance estimated tax
liability for the period specified in application at the time of application for
registration on the basis of TRN. However if applied for extension then
SHALL deposit advance tax on estimation basis for such extended period.
Such amount shall be credited in his E- cash Ledger account.

Circular No. 71/45/2018: Clarifications of issues under GST related to casual

taxable person

Issue Clarification

Which amount is required Net Output GST ie. after considering the due
to be deposited by CTP eligible ITC which might be available to such
either Gross Output GST or taxable person.
Net Output GST?

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 Registration Ch.11

HOW TO OBTAINED GST REGISTRATION

Registration Process

www.gst.gov.in Part: A Part: B

Fill Details of – Fill Part-B: By using TRN & Fill all Details of
Select on Registration - Name Part-B eg. Name of Business, Details of
- PAN/TAN/Passport Promotors /Partners,/Authorised Signatory etc.
New Registration - Mobile No., Email ID and at Second Last Page Option Available for
& verify with OTP Aadhaar
Note: Aadhar Not Required
- For Non Citizen
Now TRN will be Generated - Govt. Departments / Local Authority
which is valid for 15 Days - Statutory Body / PSU
- UIN Holder

Now Opt For Aadhaar & Not to Opt For Aadhaar Authentication
Submit the Application & Submit the Application

Now Department conduct online Now offline verification for

verification for Registration Registration Purpose will be
Purpose by Sending a link for conducted ie Mandatory PVR
Aadhaar Authentication on Mob. [Physical Verification] & other ID’s
No. and Email. eg. Voter ID Card etc. shall be
taken

Aadhaar Verified Aadhaar Not Verified then

successfully offline Verification will be
there ie PVR
After PVR ARN will
Now ARN will After PVR ARN will
be Generated
be Generated be Generated

After Generation of ARN officer will

Note: In this case due to work upon the Application
any other Reason PVR
Whether Officer has any Query or
May be conducted found any Deficiency

Yes No

Officer will communicate the query Grant RC within -7 working days

/Deficiency to applicant with in 7 (where No PVR)
days/30 days (PVR) & the Applicant will OR
Reply with in 7 Days of Receiving the 30 days (where PVR Conducted)
Query

If No Action taken by
Reject the Application OR Grant RC within -7 working days officer with-in 7 days
(Where No PVR) / 30 days then RC
OR shall be deemed to
30 days (Where PVR Conducted) be granted

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Ch.11 Registration

CANCELLATION OF REGISTRATION

Reasons of Cancellation

Grounds of Divorce
On Application By officer Received By Wife Only
1. PAN CHANGE 1. Registration Taken By means of Frauds
Eg. Transfer of Business 2. DOES NOT conduct Business from Declared Place of
Eg. Amalgamation / Demerger/etc. business.
Eg. Constitution change (eg. Firm to 3. Have voluntarily Registration But unable to START Business
Company) in 6 Months.
2. CLOSURE of Business 4. NOT to file Return for ..
3. REGSTRATION –No Longer Required eg. Ø Composite Dealer: the FY and 3 month from due date
Now All Exempted Supplies. expired
4. Taken voluntarily Registration- Now opt out ØRegular Scheme: 6 Months [QRMP Scheme 2 Tax Period]
5. TDS Deductor /TCS collector –Now No 6. Contravene the Provisions of ACT / Rules
longer Required to Deduct or collect (eg. Issue Bogus Invoice)
7. Wrongly Availed ITC
8. Show liability in GSTR-1 & NOT to show in GSTR -3B
EFFECT OF SUSPENSION
9. Violate Provision of Rule: 86B (1% Concept)
* Shall not make any
taxable Supply (can do 10. ANAMOLY in ITC claimed & output GST liability
Business but can’ 11. TDS Deductor /TCS collector –Now No longer Required to
collect GST. Deduct or collect
* Not to Furnish Return
t 12 Non compliance ofRule 10A Bank Details
* No Refund shall be
If the proper officer has Reason to believe that the
granted to him by Person falls in above – He may suspend the
Department. Registration WEF the Date as he deem FIT
Till
Application Given For cancellation Due to The RC Cancellation proceedings Going on
Above Reason then RC Shall be deemed
to be suspended from the--
* Now Officer shall issue a SCN [Shaw Cause
* Application submission date Notice] with- in 7 Working days
OR * Reply made By the Person
* Desired Date of cancellation
(whichever is later)
Till Reply was Not Satisfactory then Reply was Satisfactory then
The RC cancellation Proceedings going On officer shall Drop the
the officer will issue a Cancellation
order with 30 days to cancel RC- proceedings & suspension
Now the proper officer shall issue a
(Prospective /Retrospective) by order shall be with drown.
Cancelation order to cancel RC WEF
the date on which he deem fit (May Be Notifying him to Pay final Dues Note: Where Suspension order issued
Prospective / Retrospective) because of Non submission of Returns
By Notifying him to Pay Final Liability then the person instead of Replying of
SCN–file All Pending Returns and make
Now Cheek
payment of all Dues Then the officer shall
Drop the proceedings and suspension
Business is Closed Business is continued by other
order shall be withdrawn
Person
PAY of Final Dues
No Need to Pay Final Dues * Now the Person may issue Revised
Now: *New owner will take Fresh Registration Invoice u/s=31 with in one month of
*No Business *All Assets (Including Input/Capital Goods / ITC) suspension Revoke order.
*No Tax Collection shall be Transferable to new ownership * Return for Suspension Period file
*No Invoice to *All liabilities shall be transferred to new u/s=40 [& Pay GST to Govt.] ie
be raised ownership suspension period is like PRE-RC
*No Return period
New Owner will do the Business and liable to
pay GST on Output supplies.
Now Continue Your Business as Earlier

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 Registration Ch.11

REVOCATION/RESTORATION OF R EGISTRATION

Apply for Revocation of Cancelation Not to Apply for Revocation OR

within 90 +180 Days = Max.270 days Revocation Application Rejected.

RC Remain Cancelled
Officer will take Action within 30
Days & Revocation Application:
PAY of Final Dues
Accepted
Now: No Business
Now Continue Your Business as No Tax Collection
Earlier No Revised Invoice
No Question of Revised Invoice etc. No Return

SPECIAL NOTE
Precondition to file Revocation Application in case where cancellation was
due to Non-filing of Return
CASE:1 Where Cancellations effective Prospectively
Calculation of Final Dues
A. File All pending Returns Due UPTO cancellation order
FOR INPUTS:
B. Now file Revocation Application
Corresponding ITC on Input (in
C. Revocation Accepted
D. Now file Return Due from Cancellations order to Revocation Any Form, as such, WIP, contained
order in final product)
Example OR
Output GST on such Goods (as it
A M J J A S O N D J F M is Deemed Supply to himself

Cancelations order Revocation On 26/02/22 with- in [Whichever is Higher] xxx

issued Due to Non filing Application filed 30 Days officer Pass
Revocation order Now FOR CAPITAL GOODS
of Return from April. Within in 30+30+30
Days on 04/01/22 But need to file Return for * ITC Related to Capital Goods
Order Date: 5/12/21 by taking 5% per quarter or
Before this, Need to the months of Nov,
Effective Date: 5/12/21 December & January Part thereof
file due Return From
April to October month within 30 Days OR
of 26/2/22 * Output GST on Transaction
From to of 26/2/22
April (WEF:1/4/21) value u/s 15
CASE: 2 Where Cancellation effective Retrospective
October
A. File All pending Returns Due UPTO cancellation order [Whichever is Higher] xxx
B. Now file Revocation Applications
C. Revocation Accepted
D. Now file Return Due from April Month to Revocation
order.

Example

A M J J A S O N D J F M
Cancelations order Revocation On 26/02/XY
issued Due to Non Applications With- in 30 Days, officer
filing of Return from filed within in will Pass Revocation
April month 30+30+30 order
Order Date: 5/12/21 Days on Now need to file Returns
Effective Date: 1/4/21 05/01/22 for April to January
ie Retrospectively within 30 Days of
26/2/22

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Ch.11 Registration

How Main document for registration:

Ü PAN (Generally)
Ü TAN (In case of TAX DEDUCTOR/COLLECTOR)
Ü Any other document (In case of NR eg. Self- Attested Copy of Passport)
Ü Now Aadhaar mandatory for registration purpose at the time of
registration otherwise registration will be granted only after physical
verification of place of business.
Ü Aadhaar required for:
Ø Individual;
Ø authorised signatory of all types;
Ø Managing and Authorised partner; and;
Ø Karta of a Hindu undivided family.
Ø Member of Association of Person.
Ø Etc.
Ü Aadhaar not required for:
Ü Not a citizen of India;
Ü Government Departments/ establishment
Ü A local authority;
Ü A statutory body;
Ü A Public Sector Undertaking;
Ü UIN HOLDER

Registration process:
Part A of Application:
(i) Disclose PAN (to whom it is needed.
(ii) Verification of above : by GST PORTAL, and shall also be verified through
separate one-time passwords sent to the mobile number and e-mail address
linked to the Permanent Account Number.
(iii) Generation of Transaction reference number [TRN] by portal which is valid
for 15 days.

Part B of Application:
(i) File registration APPLICATION by using reference no.
(ii) Acknowledgement [Application reference number i.e. ARN] by portal on
mob no. and Email id.
(iii) Note: Casual taxable person shall be given temporary id number[TRN]
for making advance deposit of tax on estimation basis. After payment
of advance tax ARN shall be generated and thereafter registration
certificate shall be granted.

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 Registration Ch.11

[(4A) Where an applicant,

Ÿ opts for authentication of Aadhaar number,
Ÿ he shall, while submitting the application undergo authentication of Aadhaar
number and
Ÿ the date of submission of the application in such cases shall be the date of
authentication of the Aadhaar number, or 15 days from the submission of the
application in Part B.
Ÿ whichever is earlier.
Provided that, Every application made by a person,
Ÿ who has opted for authentication of Aadhaar number and
Ÿ is identified on the common portal, based on data analysis and risk parameters,
Ÿ shall be followed by biometric-based Aadhaar authentication and taking
photograph of the applicant where the applicant is an individual or
Ÿ of such individuals whose are notified in case of company, Firm etc.
Ÿ along with the verification of the original copy of the documents uploaded with
the application in FORM GST REG-01
Ÿ and the application shall be deemed to be complete only after completion of the
process.
Note: The Central Government, hereby specifies that the above proviso shall not apply
in all the States and Union territories except the State of Gujarat and the State of
Puducherry.

(iv) The application forwarded to officer and the officer verifies the application
along with documents. Whether Officer is Satisfied

YES NO
Then the officer Then the officer intimate the deficiency within 7 [30]
working days from the date of submission of
GRANT registration
application.
within 7 [30] working
days from the date of And applicant shall provide clarification or satisfy
officer within 7 working days of receipts of
submission of
information.
application After this the officer is
-
฀ Satisfied: ok grant registration within 7
working days.
฀ Not satisfied: Reject the application.

Deemed Registration: Where Registration is not granted by the Officer with in 7

Days or 30 days as specified above then Registration shall be deemed to be
granted.
(v) A Registration certificate shall be issued in firm GST REG -6 mentioning principal
place of business and additional places therein as declared in application form.
And the RC will be effective:
Ÿ From the date on which applicant liable for registration [if application made within
time]
Ÿ Otherwise it will be effective from the date of GRANT of Registration.

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Structure of RC: State wise PAN based GSTIN-----

§ First two digits: State code
§ Next 10 digit : PAN
§ Next digit: SN of Registration in same state on same PAN
§ Next digit: blank for further use
§ Next digit: Checksum digit (department use)

Cancellation of On Application: By registered taxable person OR by legal heirs (in case of

Registration death), manner and period as may be prescribed, having regard to:
[Application Along with the detail of inputs, work in progress, finished
goods, capital goods]
Ü discontinuation of business,
Ü transfer of business,
Ü amalgamation,
Ü demerger or otherwise dispose of,
Ü change in constitution of business or
Ü registered person no longer liable to registered.
Ü If taken voluntarily registration, now intend to opt out.
Ü A TDS deductor or TCS Collector – now no longer remain to deduct or
collect.
BY Proper officer himself:
Ü On contravention of act or rules, [eg. issue bogus invoices etc.]
Ü Person paying tax under composition scheme has not furnished the
return for a financial year beyond three months from the due date of
furnishing the said return].
Ü Any Registered person (other than immediate preceding) has not filed
return for such continuous tax period as may be prescribed.
Ü Person having reg. on voluntarily basis has not commenced business
within 6 months from the date of registration,
Ü Not to provide bank details with-in 45 days of registration,
Ü Registration obtained by means of fraud etc.
Ü Does not conduct any business from the declared place of business
Ü Avails input tax credit in violation of the provisions of section 16 of the
Act
Ü Furnishes the details of outward supplies in FORM GSTR-1 under
section 37 for one or more tax periods which is in excess of the outward
supplies declared by him in his valid return under section 39 for the said
tax periods; or
Ü Violates the provision of Rule 86B.

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Ü There is a difference or anomalies reflected in Return filed under section

39 in between output GST and ITC claimed.
(A)THEN First of all suspension of Registration ….
(1) In case a registered person has applied for cancellation of registration the
registration shall be deemed to be suspended from the date of
submission of the application or the date from which the cancellation is
sought, whichever is later, pending the completion of proceedings for
cancellation.
(2) In case the proper officer has reasons to believe that the registration
of a person is liable to be cancelled he may, suspend the registration of
such person with effect from a date to be determined by him, pending
the completion of the proceedings for cancellation.

DONT'S during suspension Period

Ü Shall not make any taxable supply
[ie the registered person shall not issue a tax invoice and,
accordingly, not to charge tax on supplies made by him
Ü Shall not be required to furnish any return under section 39.
Ü shall not be granted any refund under section 54.

(B) Cancellation of Registration

(1) Where a person who has submitted an application for cancellation then
Ü the officer shall issue an order within a period of 30 days from the date
of application submitted,
Ü cancel the registration,
Ü with effect from a date to be determined by him and [Prospectively or
Retrospectively]
Ü notify the taxable person, directing him to pay arrears of any tax, interest
or penalty including the amount liable to be paid under section 29(5).
(2) Where the proper officer has reasons to believe that the registration of a
person is liable to be cancelled
Ü He shall issue a notice to such person requiring him to show cause,
within a period of 7 working days from the date of the service of such
notice, as to why his registration shall not be cancelled.
Ü Then reply to the show cause notice shall be furnished
Ü Now the proper officer shall issue an order within a period of 30 days
from the date of the reply to the show cause
Ü to cancel the registration,
Ü with effect from a date to be determined by him and [Prospectively or
Retrospectively]
Ü notify the taxable person, directing him to pay arrears of any tax, interest

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or penalty including the amount liable to be paid under section 29(5)

Dropping of Cancellation Proceedings:
Ø Where reply of notice is found to be satisfactory, the proper officer shall
drop the proceedings.
Ø Where suspension order was issued because of non submission of
return and the person instead of replying to the notice furnishes all
the pending returns and makes full payment of the tax dues along
with applicable interest and late fee, the proper officer shall drop
the proceedings of cancellation.

Liability on cancellation
In respect of Inputs
Every registered person whose registration is cancelled shall pay an amount,
- equivalent to the credit of input tax in respect of inputs held in stock
and inputs contained in semi-finished or finished goods held in
stock or
- on the day immediately preceding the date of such cancellation
OR
- the output tax payable on such goods,
In respect of Capital Goods
The taxable person shall pay an amount --
- Equal to the input tax credit taken on the said capital goods or
plant and machinery on the day immediately preceding the date of
such cancellation, reduced by such percentage points as may be
prescribed
OR
- The tax on the transaction value of such capital goods or plant
and machinery under section 15,
[Whichever is higher]
Mode of payment in both the cases--By way of debit in the E-Credit
ledger or E-Cash ledger,

Revocation Where registration is canceled by Proper Officer, any registered taxable person
may apply for revocation of such cancellation within 90 days + 180 days of
cancellation and Proper Officer may accept or reject the application with in 30
days (After giving SCN and opportunity of being heard).
Where registration is canceled because non filing of return then
revocation application shall be files only after filing return and
payment of tax, interest, penalties and late fee.
Moreover where registration is canceled with retrospective effect
then first of all file application for revocation and after that need
to file all due returns till revocation order with in 30 days.

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Amendment Changes in Core fields: [Business Name Change, Address change, change in
in RC Directors/Partners etc.]
Every RC/UIN holder shall inform the Proper Officer ANY changes in the
information furnished at the time of application or thereafter.
However officer may approve within 15 working days or reject (after giving SCN
and OPPORTUNITY OF BEING HEARD) such changes.
Changes in None core fields: [Change in Phone Number, E-mail id of
authorised signatory]
Every RC/UIN holder shall inform the Proper Officer ANY changes in the
information furnished at the time of application of thereafter.

MISC: RC Display: Display RC in a prominent location at his principal and

additional place (s) of business and shall display the registration
number on the name board exhibited at entry of his principal place
of business and any other place of business.
All Documents/notices @ electronically and Digital signed:
Each document filed online shall be signed by person specified. All
orders and notices under this chapter shall be issued electronically
by proper officer.
All applications/replies @ electronically and digitally signed: All applications,
including reply, if any, to the notices, returns including the details of outward and
inward supplies, appeals or any other document required to be submitted under the
provisions of these rules shall be so submitted electronically with digital signature
certificate or through e-signature as or through e signature.
Physical verification of business premises:
(1) Where the proper officer is satisfied that
Ü the physical verification of the place of business of a person is required

Ü after the grant of registration,

Ü he may get such verification of the place of business done and

Ü the verification report along with the other documents, including

photographs,
Ü shall be uploaded on the common portal

Ü within a period of 15 working days following the date of such

verification.
(2) Where the physical verification of the place of business of a person is
required
Ü before the grant of registration in the circumstances specified in the
proviso to Rule 9(1),
Ü the proper officer shall get such verification of the place of business done
and

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Ü the verification report along with the other documents, including

photographs,
Ü shall be uploaded in on the common portal
Ü at least 5 working days prior to the completion of the time period
specified in the said proviso.

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prescribed, by order, either revoke cancellation of the registration or reject

the application:
Provided that the application for revocation of cancellation of registration
shall not be rejected unless the applicant has been given an opportunity of
being heard.

CGST Rules, 2017 – Registration

(1) Every person who is liable to be registered under section 25(1) and every
Rule 8:
person seeking registration under section 25(3) except–
Application
for registration (i) Non-resident taxable person;
(ii) TDS deductor
(iii) TCS Collector
(iv) a person
Ü supplying online information and database access or retrieval services from
a place outside India to a non-taxable online recipient referred to in section
14 or
Ü a person supplying online money gaming from a place outside India to a
person in India referred to in section 14A under the IGST Act, 2017
shall, before applying for registration, declare his Permanent Account
Number, State or Union territory in Part A of FORM GST REG-01 on the
common portal, either directly or through a Facilitation Centre notified by
the Commissioner:
Provided that every person being an Input Service Distributor shall make a
separate application for registration as such Input Service Distributor.”
(2) (a) The Permanent Account Number shall be validated online by the
common portal from the database maintained by the Central Board of
Direct Taxes and shall also be verified through separate one-time
passwords sent to the mobile number and e-mail address linked to
the Permanent Account Number.
(3) On successful verification of the Permanent Account Number, mobile
number and e-mail address, a temporary reference number shall be
generated and communicated to the applicant on the said mobile number
and e-mail address.
(4) Using the reference number generated under sub-rule (3), the applicant
shall electronically submit an application in Part B of FORM GST REG-01,
duly signed or verified through electronic verification code, along with the
documents specified in the said Form at the common portal.
(4A) Where an applicant, [other than those who have been exempted from
Aadhaar]

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- opts for authentication of Aadhaar number,

- he shall, while submitting the application undergo authentication of
Aadhaar number and
Ÿ the date of submission of the application in such cases shall be the date of
authentication of the Aadhaar number, or 15 days from the submission of
the application in Part B.
Ÿ whichever is earlier.
Provided that, Every application made by a person,
Ÿ who has opted for authentication of Aadhaar number and
Ÿ is identified on the common portal, based on data analysis and risk
parameters,
Ü shall be followed by biometric-based Aadhaar authentication and taking
photograph of the applicant where the applicant is an individual or
Ÿ of such individuals whose are notified in case of company, Firm etc.

Ÿ along with the verification of the original copy of the documents

uploaded with the application in FORM GST REG-01
Ÿ and the application shall be deemed to be complete only after
completion of the process.
(4B) The Central Government may, specify the States or Union territories
wherein the proviso of sub-rule (4A) shall not apply.
In pursuance of the powers conferred by Rule 8(4B) ,
- the Central Government, hereby specifies that
- the proviso to Rule 8(4A)
shall not apply in all the States and Union territories except the State of
Gujarat. and the State of Puducherry shall be inserted.
(5) On receipt of an application under sub-rule (4) or sub-rule (4A)], an
acknowledgement shall be issued electronically to the applicant in FORM GST
REG-02.
(6) A person applying for registration as a casual taxable person
- shall be given a temporary reference number by the common portal for
making advance deposit of tax in accordance with the provisions of
section 27 and
Ÿ the acknowledgement under sub-rule (5) shall be issued electronically
only after the said deposit.

Rule 9
Verification of (1) The application shall be forwarded to the proper officer who shall examine
the application the application and the accompanying documents and if the same are found to
and approval be in order, approve the grant of registration to the applicant within a period of
7 working days from the date of submission of the application.
Registration with- in 30 days of submission of application

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Provided that where-

(a) A person, other than a person notified under section 25(6D),

- fails to undergo authentication of Aadhaar number as specified in Rule
8(4A) or
- does not opt for authentication of Aadhaar number; or
(aa) a person, who has undergone authentication of Aadhaar number as
specified in Rule 8(4A), is identified on the common portal, based on data
analysis and risk parameters, for carrying out physical verification of places of
business; or
(b) The proper officer,
- with the approval of an officer authorised by the Commissioner not
below the rank of Assistant Commissioner,
- deems it fit to carry out physical verification of places of business,
the registration shall be granted within 30 days of submission of application,
after physical verification of the place of business in the presence of the said
person, in the manner provided under rule 25 and verification of such
documents as the proper officer may deem fit.
(2) Where the application submitted under Rule 8
Ÿ is found to be deficient, either in terms of any information or
Ÿ any document required to be furnished under the said rule, or

Ÿ where the proper officer requires any clarification with regard to any
information provided in the application or documents furnished
therewith,
Ÿ he may issue a notice to the applicant electronically in FORM GST REG-
03 within a period of 7 working days from the date of submission of the
application and
Ÿ the applicant shall furnish such clarification, information

Notice in 30 days: Provided that where-

(a) a person, other than a person notified under sub-section (6D) of
section 25,
Ÿ fails to undergo authentication of Aadhaar number as specified in sub-
rule (4A) of rule 8 or
Ÿ does not opt for authentication of Aadhaar number; or
(aa) a person, who has undergone authentication of Aadhaar number as
specified in Rule 8(4A), is identified on the common portal, based on data
analysis and risk parameters, for carrying out physical verification of places of
business; or

(b) the proper officer, with the approval of an officer authorised by the

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Rule10: Issue (1) Subject to the provisions of Section 25(12),

of registration
Ü Where the application for grant of registration has been approved
certificate
under rule 9,
Ü a certificate of registration in FORM GST REG-06 showing the
principal place of business and additional place or places of business
shall be made available to the applicant on the common portal and a
Ü GSTIN shall be assigned subject to the following characters, namely:-

(a) two characters for the State code;

(b) ten characters for the Permanent Account Number or the Tax
Deduction and Collection Account Number;

(c) two characters for the entity code; and

(d) one checksum character.

(2) The registration shall be effective from the date on which the person
becomes liable to registration where the application for registration has
been submitted within a period of 30 days from such date.

(3) Where an application for registration has been submitted by the applicant
after the expiry of 30 days from the date of his becoming liable to registration,
Ü the effective date of registration shall be

Ü the date of the grant of registration

Ü Under Rule 9 (1)(3)(5).

(4) Every certificate of registration shall be duly signed or verified through

electronic verification code by the proper officer under the Act.

(5) Where the registration has been granted under Rule 9(5),
Ü the applicant shall be communicated the registration number, and

Ü the certificate of registration under sub-rule (1), duly signed or verified

through electronic verification code,
shall be made available to him on the common portal, within a period of 3
days after the expiry of the period specified in Rule 9(5).

Rule 10A.
After a certificate of registration in FORM GST REG-06 has been made
Furnishing of
Bank Account available on the common portal and a GSTIN has been assigned,
Details
- the registered person,

- except TDS DEDUCTOR / COLLECTOR, REGISTRATION BY OFFICER IN

CASE OF SERCH ETC.

Ÿ Shall within a period of 30 days from the date of grant of registration,

or before furnishing the details of outward supplies of goods or

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services or both under section 37 in FORM GSTR-1 or using IFF,

whichever is earlier, furnish information with respect to details of bank
account on the common portal.

- shall as soon as may be, but not later than 45 days from the date of
grant of registration or

- the date on which the return required under section 39 is due to be

furnished,

- whichever is earlier,

- furnish information with respect to details of bank account which is in

name of the registered person and obtained on Permanent Account
Number of the registered person, or any other information, as may be
required on the common portal in order to comply with any other
provision.
Provided that in case of a proprietorship concern, the Permanent Account
Number of the proprietor shall also be linked with the Aadhaar number of
the proprietor.

Rule 11.
(1) Any person
Separate
registration for Ü having multiple places of business within a State or a Union territory,
multiple places Ü requiring a separate registration for any such place of business under
of business section 25 (2)
within a State Ü shall be granted separate registration in respect of each such place of
or a Union
business
territory
Ü subject to the following conditions, namely:—
(a) Such person has more than one place of business as defined in
section 2(85);
Explanation: Composition scheme @ PAN WISE: it is hereby clarified
that
Ü Where any place of business of a registered person that has been
granted a separate registration becomes ineligible to pay tax under
section 10,
Ü all other registered places of business of the said person shall become
ineligible to pay tax under the said section.
(b) Such person shall not pay tax under section 10 for any of his places of
business if he is paying tax under section 9 for any other place of
business;

(c) All separately registered places of business of such person shall

pay tax under the Act on supply of goods or services or both made to
another registered place of business of such person and issue a tax
invoice or a bill of supply, as the case may be, for such supply.

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Rule 21A (1) Where a registered person has applied for cancellation of registration
Suspension of under rule 20, the registration shall be deemed to be suspended from the
registration
date of submission of the application or the date from which the
cancellation is sought, whichever is later, pending the completion of
proceedings for cancellation of registration under rule 22.

(3) Where the proper officer has reasons to believe that the registration of a
person is liable to be cancelled under section 29 or under rule 21, he may,
suspend the registration of such person with effect from a date to be
determined by him, pending the completion of the proceedings for
cancellation of registration under rule 22.
“(2A) Where,-
(a) a comparison of the returns
Ü furnished by a registered person under section 39 with the details of
outward supplies furnished in FORM GSTR-1 or
Ü the details of inward supplies derived based on the details of outward
supplies furnished by his suppliers in their FORM GSTR-1, or
Ü such other analysis,

show that there are significant differences or anomalies indicating

contravention of the provisions of the Act or the rules, leading to cancellation
of registration of the said person, or
(b) There is a contravention of the provisions of Rule 10A by the registered
person,
Ü the registration of such person shall be suspended and

Ü the said person shall be intimated on the common portal, or by sending a

communication to his e-mail address,
Ü highlighting the said differences, anomalies or non-compliances and

Ü asking him to explain, within a period of 30 days, as to why his registration

shall not be cancelled.

(2A) Where, a comparison of the returns furnished by a registered person under

section 39 with

(a) The details of outward supplies furnished in FORM GSTR-1; or

(b) The details of inward supplies derived based on the details of outward
supplies furnished by his suppliers in their FORM GSTR-1,
or such other analysis, as may be carried out on the recommendations of the

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Council, show that

Ü there are significant differences or anomalies indicating contravention of
the provisions of the Act or the rules made thereunder,
Ü leading to cancellation of registration of the said person,
Ü his registration shall be suspended and
Ü the said person shall be intimated in FORM GST REG-31,
Ü electronically, on the common portal, or by sending a communication to his
e-mail address provided at the time of registration or as amended from
time to time,
Ü highlighting the said differences and anomalies and asking him to explain,
Ü within a period of thirty days, as to why his registration shall not be
cancelled.
(3) A registered person, whose registration has been suspended under sub-rule
(1) or sub-rule (2) or sub-rule (2A),
- Shall not make any taxable supply during the period of suspension [ie
the registered person shall not issue a tax invoice and, accordingly, not
charge tax on supplies made by him during the period of suspension.]
and
- shall not be required to furnish any return under section 39.
(3A) A registered person, whose registration has been suspended under sub-
rule (2) or sub-rule (2A), shall not be granted any refund under section 54,
during the period of suspension of his registration.
(4) The suspension of registration under sub-rule (1) or sub-rule (2) or sub-
rule (2A)
Ü shall be deemed to be revoked upon completion of the proceedings
by the proper officer under rule 22 and
Ü such revocation shall be effective from the date on which the
suspension had come into effect.
Provided that the suspension of registration under this rule may be revoked by
the proper officer, anytime during the pendency of the proceedings for
cancellation, if he deems fit.

“Provided further that

Ü Where the registration has been suspended due to non - filing of
return and
Ü the registration has not already been cancelled
Ü the suspension of registration shall be deemed to be revoked
upon furnishing of all the pending returns.
“Provided also that where the registration has been suspended under sub-rule
(2A)

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Ü for contravention of provisions of Rule 10A and

Ü the registration has not already been cancelled by the proper officer under
rule 22,
Ü the suspension of registration shall be deemed to be revoked
Ü upon compliance with the provisions of Rule 10A.

(5) Where any order having the effect of revocation of suspension of

registration has been passed, the provisions of section 31(3)(a) and section 40
in respect of the supplies made during the period of suspension and the
procedure specified therein shall apply.

Rule 22: (1) Where the proper officer has reasons to believe that the registration of a
Cancellation person is liable to be cancelled under section 29,
of registration
- he shall issue a notice to such person in FORM GST REG-17, requiring
him to show cause,
- within a period of 7 working days from the date of the service of such
notice,
- as to why his registration shall not be cancelled.
(2) The reply to the show cause notice issued under sub-rule (1) shall be
furnished in FORM REG–18 within the period specified in the said sub-rule.
(3) Where a person who has submitted an application for cancellation of his
registration is no longer liable to be registered or his registration is liable to be
cancelled,
- the proper officer shall issue an order in FORM GST REG-19, within a
period of 30 days from the date of application submitted under Rule
20(1) or, as the case may be, the date of the reply to the show cause
issued under sub-rule (1)or under sub-rule (2A) of Rule 21A,,
- cancel the registration, with effect from a date to be determined by him
and notify the taxable person, directing him to pay arrears of any tax,
interest or penalty including the amount liable to be paid under section
29(5).
(4) Where the reply furnished under sub-rule (2) or in response to the notice
issued under sub-rule (2A) of rule 21A is found to be satisfactory, the proper
officer shall drop the proceedings and pass an order in FORM GST REG –20.
Provided that Where suspension order was issued because of non submission
of return and the person instead of replying to the notice furnishes all the
pending returns and makes full payment of the tax dues along with
applicable interest and late fee, the proper officer shall drop the
proceedings of cancellation.
(5) The provisions of sub-rule (3) shall, mutatis mutandis, apply to the legal heirs
of a deceased proprietor, as if the application had been submitted by the
proprietor himself.

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Rule 23: (1) A registered person, whose registration is cancelled by the proper officer
Revocation of on his own motion,
cancellation of
Ü may subject to the provisions of Rule 10B, submit an application for
registration
Rule 54 for revocation of cancellation of registration, in FORM GST
REG-21,
Ü to such proper officer,
Ü within a period of 90 days from the date of the service of the order of
cancellation of registration]
Ü within a period of 30 days from the date of the service of the order of
cancellation of registration or within such time period as extended by
the Additional or Joint Commissioner or the Commissioner, as the case
may be, in exercise of the powers provided under the proviso to sub-
section (1) of section 30,
Ü at the common portal, either directly or through a Facilitation Centre
notified by the Commissioner.
Provided that such period may,
§ on sufficient cause being shown,
§ be extended by the Commissioner or an authorised officer,
§ for a further period not exceeding 180 days.

Provided further that no application for revocation shall be filed,

Ÿ If the registration has been cancelled for the failure of the registered
person to furnish returns,
Ÿ unless such returns are furnished and any amount due as tax, in terms of
such returns, has been paid along with any amount payable towards
interest, penalty and late fee in respect of the said returns.
Provided also that
Ÿ all returns due for the period from the date of the order of cancellation
of registration till the date of the order of revocation of cancellation of
registration
Ÿ shall be furnished by the said person within a period of 30 days from the
date of order of revocation of cancellation of registration:
Provided also that
Ÿ Where the registration has been cancelled with retrospective effect,
Ÿ the registered person shall furnish all returns relating to period from the
effective date of cancellation of registration till the date of order of
revocation of cancellation of registration
Ÿ within a period of 30 days from the date of order of revocation of
cancellation of registration.
(2) (a) Where the proper officer is satisfied, for reasons to be recorded in

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writing, that there are sufficient grounds for revocation of cancellation of

registration,
Ÿ he shall revoke the cancellation of registration by an order in FORM GST
REG-22
Ÿ within a period of 30 days from the date of the receipt of the application
and communicate the same to the applicant.
(b) The proper officer may, for reasons to be recorded in writing, under
circumstances other than those specified in clause (a), by an order in FORM
GST REG-05, reject the application for revocation of cancellation of
registration and communicate the same to the applicant.
(3) The proper officer shall, before passing the order referred to in sub-rule
(2)(b),
Ÿ Issue a notice in FORM GST REG–23 requiring the applicant to show
cause as to why the application submitted for revocation under sub-rule
(1) should not be rejected
Ÿ and the applicant shall furnish the reply within a period of seven working
days from the date of the service of the notice in FORM GST REG-24.
(4) Upon receipt of the information or clarification in FORM GST REG-24,
Ÿ the proper officer shall proceed to dispose of the application in the
manner specified in sub-rule (2) within a period of 30 days
Ÿ from the date of the receipt of such information or clarification from
the applicant.

Rule 24 NOT RELEVANT

Migration of
persons
registered
under the
existing law

Rule 25: (1) Where the proper officer is satisfied that

Physical ­ the physical verification of the place of business of a person is required
verification of
business ­ after the grant of registration,
premises in ­ he may get such verification of the place of business done and
certain cases ­ the verification report along with the other documents, including
photographs,
­ shall be uploaded on the common portal
­ within a period of 15 working days following the date of such verification.
(2) Where the physical verification of the place of business of a person is
required
­ before the grant of registration in the circumstances specified in the

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proviso to Rule 9(1),

­ the proper officer shall get such verification of the place of business done
and
­ the verification report along with the other documents, including
photographs,
­ shall be uploaded in on the common portal
­ at least 5 working days prior to the completion of the time period specified
in the said proviso.
Where the proper officer is satisfied that the physical verification of the place of
business of a person is required
Ÿ due to failure of Aadhaar authentication before the grant of registration, or
Ÿ due to not opting for Aadhaar authentication before the grant of registration,
or
Ÿ due to any other reason after the grant of registration,
Ÿ he may get such verification of the place of business, in the presence of the
said person, done and the verification report along with the other
documents, including photographs, shall be uploaded in FORM GST REG-30
on the common portal within a period of 15 working days following the date
of such verification.

Rule 26: NOT RELEVANT

Method of
authentication.

11.38
CA Rajkumar
Ch.12 Manner of Payment

Ch 12 MANNER OF PAYMENT

Background Outward supply : 1,50,000

Output Tax : 27,000
Inward Supply : 1,00,000
Total : 1,77,000
GST : 18,000 OUTPUT GST : 27,000
Total : 1,18,000 Less ITC : 18000
( ITC = `18,000) E cash Ledger : 9,000
Supplier

On GST portal, we have 3 Ledgers—

E- CASH LEDGER LEDGER (LIKE PAYTM WALLET) E- CREDIT E- LIABILITY

LEDGER REGISTER

We must have sufficient balance in e cash ledger on due Amount will be E- liability register has 2
date of filing of return. updated parts--
If it is not, then add sufficient amount in it. through GSTR Part i: self assessed
In the given situation ` 9,000 to be added (assuming we 2/3B liability as per return
have no opening balance in e cash ledger) Part ii: re-assessed
liability by department

How to add… First of all, we will

1. Create a challan on gst portal which will remain valid discharge part i liability
for 15 days. Portal will generate c-pin (common and out of this
portal identification number: 14 digit) A. Previous period
2. Make payment of amount as given in challan @ liability first then,
online /offline. B. Current period liability
Note: online = NET BANKING, RTGS, NEFT, after that discharge
DEBIT/CREDIT CARD, IMPS etc. part ii liability.
Note: offline can be deposited in specified situations as
amount is upto ` 10,000, by govt. Department eg post
office, in case of search and seizure.
3. As the payment credited to bank a challan
identification number (cin) will be generated, which
will be a combination of cpin + 3/4 digit of bank
branch code.
4. CIN will be communicated to gst portal by bank and
the amount will be reflected in e cash ledger.

CA Rajkumar 12.1
 Manner of Payment Ch.12

Now file GSTR 3B and use itc (`

18,000) and e cash ledger (` 9000)
to discharge liability of ` 27,000.
Manner of using itc—

C C
I I
S S

Section: 49 Payment of Tax, Interest, Penalty and Other Amounts

Every deposit Deposit: (1) Every deposit made towards tax, interest, penalty, fee or any other
made to E- amount by a person by internet banking or by using credit or debit cards or
Cash Ledger National Electronic Fund Transfer or Real Time Gross Settlement or by such other
Account and mode and subject to such conditions and restrictions as may be prescribed, shall be
its utilization credited to the electronic cash ledger of such person to be maintained in such
manner as may be prescribed.
Use/Adjust on filing Return:(3) The amount available in the electronic cash ledger
may be used for making any payment towards tax, interest, penalty, fees or any
other amount payable under the provisions of this Act or the rules made thereunder
in such manner and subject to such conditions and within such time as may be
prescribed.

Q. Whether the amount available in the electronic cash ledger can be used for
making payment of any liability under the GST Laws?
Ans. The amount available in the electronic cash ledger may be used for making any
payment towards tax, interest, penalty, fees or any other amount payable under the
provisions of the GST Laws.

E-Credit Ledger: (2) The input tax credit as self-assessed in the return of a
ITC shall be registered person shall be credited to his electronic credit ledger, in accordance
credited to E- with section 41, to be maintained in such manner as may be prescribed.
Credit Ledger
and its Use/Adjust on filing Return: (4) The amount available in the electronic credit ledger
utilization may be used for making any payment towards OUTPUT TAX under this Act or
under the Integrated Goods and Services Tax Act in such manner and subject to
such conditions and restrictions and within such time as may be prescribed.

Q. Whether the amount available in the electronic credit ledger can be used for
making payment of any tax under the GST Laws?

Ans. It is clarified that any payment towards output tax, whether self-assessed in the
return or payable as a consequence of any proceeding instituted under the
provisions of GST Laws, can be made by utilization of the amount available in the
electronic credit ledger of a registered person.
It is further reiterated that as output tax does not include tax payable under reverse
charge mechanism, implying thereby that the electronic credit ledger cannot be
used for making payment of any tax which is payable under reverse charge

12.2
CA Rajkumar
Ch.12 Manner of Payment

Section 52: Collection of tax at source

Applicability:
(1) Every electronic commerce operator,
of TCS
Ÿ shall collect TCS @ 0.5% + 0.5% =1%
Ÿ of the NET VALUE of TAXABLE supplies made through it by other
suppliers
Ÿ Only where the CONSIDERATION with respect to such supplies is to be
collected by the operator.
Note: Maximum Rate that can be 1%+!% = 2%
Note: If consideration Not flow through ECO then TCS concept will not be
applicable.

NET VALUE: Net Value of taxable supplies” shall mean supplies made during any
month by all registered persons through the operator--
The aggregate value of taxable supplies of goods or services Include
Less: Services notified under section 9(5) [HMT-Restaurant] Exclude
Less: Taxable Supplies Returned during the said month. Exclude
Less: Supplies where consideration is not collected by ECO Exclude

Payment by (2) The amount of TCS shall be paid to the Government by the operator within 10
10th of next days of Collection Month.
month

Statement by (3) Every operator who collects TCS

10th of next
month and Ü shall furnish a statement, electronically, containing the details of
rectification if Ÿ Outward supplies effected through it,
any
Ÿ Returned Supplies including the supplies through it, and
Ÿ The amount of TCS collected during a month,
Ü within 10 days after the end of such month.
Note: The Commissioner may, extend the time limit for furnishing the statement.
(4) If Any operator suo moto after furnishing a statement,
- discovers any omission or incorrect particulars therein,
- he shall rectify such omission or incorrect particulars, along with interest.
Last date of Rectification: No such rectification shall be allowed after
30 November of next FY or
th
Ÿ

Ÿ the actual date of furnishing of the relevant annual statement,

Ÿ whichever is earlier.

CA Rajkumar 12.11
Ch.12 Manner of Payment

operator and declared as additional places of business by such suppliers,

(12) Such operator shall furnish the required information within 15 working days of
the date of Receipt of such notice.
(13) Any person who fails to furnish the information required by the notice served
shall, be liable to a penalty which may up to ` 25, 000.

Last date to file "(14) The operator shall not be allowed to furnish a statement after the expiry of a
Statement period of 3 years from the due date of furnishing the said statement:
@ 3 years
Provided that the Government may, allow an operator or a class of operators to
furnish a statement , even after the expiry of the said period of 3 years from the
due date of furnishing the said statement.".

Analysis of TCS

E-Commerce Operator
[Amazon - Registered
in Delhi]
*Place order for shoes
*Forwarded Order * Make payment of
* Make payment at prefixed frequency ` 10,000 +1800 =11,800
after deducting its commission (Suppose 20%)

Mr. X
Real Supplier of shoes
Registered in Delhi

Mr. y
Customer in
Supply of shoes and issue INVOICE Hyderabad
[10,000 + 1800]

Note: Where only Orders are processed (not payment) then

TCS concept will not be applicable.

CA Rajkumar 12.13
Ch.12 Manner of Payment

* Annual Return by 31 dec. of Next Year in GSTR 09

st

In the capacity of TCS COLLECTOR

* GSTR 08 For TCS of `100 by 10 of Next Month
th

* Annual Statement by 31 dec. of Next Year in

st

GSTR 9B

Others *Matching, Communication of discrepancy and

Added in output liability.
* Payment with interest in case of Mismatch.
*Notice to operator, Reply with in 15 days and
Penalty up to Rs. 25,000

Clarification on TCS liability under Sec 52 of the CGST Act, 2017 in case of multiple E-commerce
Operators in one transaction in the context of Open Network for Digital Commerce (ONDC)
In the current platform-centric model of e-commerce, the buyer interface and seller interface are
operated by the same ECO. This ECO collects the consideration from the buyer, deducts the TCS under
Sec 52 of the CGST Act, credits the deducted TCS amount to the GST cash ledger of the seller and passes
on the balance of the consideration to the seller after deducting their service charges.
In the case of the ONDC Network or similar other arrangements, there can be multiple ECOs in a single
transaction - one providing an interface to the buyer and the other providing an interface to the seller.
In this setup, buyer-side ECO could collect consideration, deduct their commission and pass on the
consideration to the seller-side ECO. So, clarity has been sought as to which ECO should deduct TCS and
make other compliances.
Issue 1: In a situation where multiple ECOs are involved in a single transaction of supply of goods or
services or both through ECO platform and where the supplier-side ECO himself is not the supplier
in the said supply, who is liable for compliances under section 52 including collection of TCS?

Supplier
Buyer Buyer side side Supplier
ECO ECO

Clarification: The compliances including collection of TCS, is to be done by the supplier-side ECO who
finally releases the payment to the supplier for a particular supply made by the said supplier through him.
e.g.: Buyer-side ECO collects payment from the buyer, deducts its fees/commissions and remits the balance to
Seller-side ECO. Here, the Seller-side ECO will release the payment to the supplier after deduction of his
fees/commissions and therefore will also be required to collect TCS, as applicable and pay the same to the
Government.
In this case, the Buyer-side ECO will neither be required to collect TCS nor will be required to make other
compliances in accordance with section 52 of CGST Act with respect to this particular supply.
Issue 2: In a situation where multiple ECOs are involved in a single transaction of supply of goods or
services or both through ECO platform and the Supplier-side ECO is himself the supplier of the said
supply, who is liable for compliances under section 52 including collection of TCS?

CA Rajkumar 12.15
 Manner of Payment Ch.12

Buyer Buyer-side Supplier (also

ECO an ECO)

Clarification: In such a situation, TCS is to be collected by the Buyer-side ECO while making payment to
the supplier for the particular supply being made through it.
e.g. Buyer-side ECO collects payment from the buyer, deducts its fees and remits the balance to the
supplier (who is itself an ECO. In this scenario, the Buyer-side ECO will also be required to collect TCS, as
applicable, pay the same to the Government.

NOTIFICATION NO. 36/2023

The Central Government, hereby notifies the electronic commerce operator who is required to collect tax
at source under section 52 as the class of persons who shall follow the following special procedure in
respect of supply of goods made through it by the persons paying tax under section 10 of the said Act
namely: -
(i) The electronic commerce operator shall not allow any inter-State supply of goods through it by the
said person;
(ii) The electronic commerce operator shall collect tax at source under section 52 of the said Act in
respect of supply of goods made through it by the said person and pay to the Government; and
(iii) The electronic commerce operator shall furnish the details of supplies of goods made through it by
the said person in the statement in FORM GSTR-8 electronically on the common portal.

Differences between TDS and TCS

TDS u/s 51 TCS u/s 52

Supplier = other than Government Supplier = E commerce Operator

Recepient = Government Recepient = the person who supplies goods
through E commerce operator
Number of transaction involved =1 Number of transaction involved =2
Rate of TDS Rate of TCS
Maximum: 1%+1%= 2% Maximum: 1%+1%= 2%
As of now: 1%+1%= 2% As of now: 0.5%+0.5%= 1%
Return in GSTR 07 Return in GSTR 08
Annual Statement = NO Annual Statement = YES in GSTR 9B
Late payment of TDS attract interest @18% PA Late payment of TCS attract interest @18% PA

12.16
CA Rajkumar
 Manner of Payment Ch.12

(3) The deposit under sub-rule (2) shall be made through any of the following
Rule 87 modes, namely:-
(i) Internet Banking through authorised banks;
(ia) Unified Payment Interface (UPI) from any bank;
(ib) Immediate Payment Services (IMPS) from any bank.
(ii) Credit card or Debit card through the authorised bank;
(iii) National Electronic Fund Transfer or Real Time Gross Settlement from
any bank; or
(iv) Over the Counter payment through authorised banks for deposits up to
ten thousand rupees per challan per tax period, by cash, cheque or
demand draft:
Provided that the restriction for deposit up to ten thousand rupees per
challan in case of an Over the Counter payment shall not apply to deposit
to be made by –
(a) Government Departments or any other deposit to be made by persons
as may be notified by the Commissioner in this behalf;
(b) Proper officer or any other officer authorised to recover outstanding
dues from any person, whether registered or not, including recovery
made through attachment or sale of movable or immovable properties;
(c) Proper officer or any other officer authorised for the amounts collected
by way of cash, cheque or demand draft during any investigation or
enforcement activity or any ad hoc deposit:
Provided further that a person supplying online information and database
access or retrieval services from a place outside India to a non-taxable online
recipient referred to in section 14 or a person supplying online money gaming
from a place outside India to a person in India as referred to in section 14A, of
the IGST Act, 2017 May also make the deposit under sub-rule (2) through
international money transfer through Society for Worldwide Interbank
Financial Telecommunication payment network, from the date to be notified
by the Board.
Explanation.– For the purposes of this sub-rule, it is hereby clarified that for
making payment of any amount indicated in the challan, the commission, if
any, payable in respect of such payment shall be borne by the person making
such payment.
(4) Any payment required to be made by a person who is not registered under the
Act, shall be made on the basis of a temporary identification number
generated through the common portal.
(5) Where the payment is made by way of National Electronic Fund Transfer or
Real Time Gross Settlement or IMPS mode from any bank, the mandate form
shall be generated along with the challan on the common portal and the same
shall be submitted to the bank from where the payment is to be made:
Provided that the mandate form shall be valid for a period of fifteen days from
the date of generation of challan.

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CA Rajkumar
Ch.12 Manner of Payment

(6) On successful credit of the amount to the concerned government account

maintained in the authorised bank, a Challan Identification Number shall be
generated by the collecting bank and the same shall be indicated in the
challan.
(7) On receipt of the Challan Identification Number from the collecting bank, the
said amount shall be credited to the electronic cash ledger of the person on
whose behalf the deposit has been made and the common portal shall make
available a receipt to this effect.
(8) Where the bank account of the person concerned, or the person making the
deposit on his behalf, is debited but no Challan Identification Number is
generated or generated but not communicated to the common portal, the
said person may represent electronically in FORM GST PMT-07 through the
common portal to the bank or electronic gateway through which the deposit
was initiated.
Provided that where the bank fails to communicate details of Challan
Identification Number to the Common Portal,
Ÿ the Electronic Cash Ledger may be updated
Ÿ on the basis of e-Scroll of the Reserve Bank of India
Ÿ in cases where the details of the said e-Scroll are in conformity with the
details in challan generated in FORM GST PMT-06 on the Common Portal.
(9) Any amount deducted under section 51 or collected under section 52 and
claimed in by the registered taxable person from whom the said amount was
deducted or, as the case may be, collected shall be credited to his electronic
cash ledger.
(10) Where a person has claimed refund of any amount from the electronic cash
ledger, the said amount shall be debited to the electronic cash ledger.
(11) If the refund so claimed is rejected, either fully or partly, the amount debited
under sub-rule (10), to the extent of rejection, shall be credited to the
electronic cash ledger by the proper officer by an order made in FORM GST
PMT-03.
(12) A registered person shall, upon noticing any discrepancy in his electronic cash
ledger, communicate the same to the officer exercising jurisdiction in the
matter, through the common portal in FORM GST PMT-04.
Explanation 1.- The refund shall be deemed to be rejected if the appeal is
finally rejected.
Explanation 2.– For the purposes of this rule, it is hereby clarified that a
refund shall be deemed to be rejected, if the appeal is finally rejected or if the
claimant gives an undertaking to the proper officer that he shall not file an
appeal.
(13) A registered person may, on the common portal, transfer any amount of tax,
interest, penalty, fee or any other amount available in the electronic cash
ledger under the Act to the electronic cash ledger for integrated tax, central
tax, State tax or Union territory tax or cess in FORM GST PMT-09.

CA Rajkumar 12.23
 Manner of Payment Ch.12

(14) A registered person may, on the common portal,

Ÿ transfer any amount of tax, interest, penalty, fee or any other amount
Ÿ available in the electronic cash ledger under the Act
Ÿ to the electronic cash ledger for central tax or integrated tax of a
distinct person
Ÿ in FORM GST PMT- 09:
Provided that no such transfer shall be allowed if the said registered person has
any unpaid liability in his electronic liability register.

Rule 88 (1) A unique identification number shall be generated at the common portal for
Identification each debit or credit to the electronic cash or credit ledger, as the case may be.
number for
(2) The unique identification number relating to discharge of any liability shall be
each
indicated in the corresponding entry in the electronic liability register.
transaction (3) A unique identification number shall be generated at the common portal
for each credit in the electronic liability register for reasons other than
those covered under sub-rule (2).

Rule 88B (1) In case,

Manner of
Ÿ Where the supplies made during a tax period are declared by the
calculating
registered person in the return for the said period and
interest on
delayed Ÿ the said return is furnished after the due date in accordance with
payment of provisions of section 39,
tax Ÿ except where such return is furnished after commencement of any
proceedings under section 73 or section 74 in respect of the said period,
Ÿ the interest on tax payable in respect of such supplies shall be calculated
on the portion of tax which is paid by debiting the electronic cash ledger,
Ÿ for the period of delay in filing the said return beyond the due date, at such
rate as may be notified under section 50.
(2) In all other cases,
Ÿ Where interest is payable in accordance with section 50 (1),

Ÿ the interest shall be calculated on the amount of tax which remains

unpaid,
Ÿ for the period starting from the date on which such tax was due to be paid
till the date such tax is paid,
Ÿ at such rate as may be notified under section 50.
(3) In case,
Ÿ Where interest is payable on the amount of input tax credit wrongly
availed and utilised in accordance with section 50(3),
Ÿ the interest shall be calculated on the amount of input tax credit wrongly
availed and utilised,

12.24
CA Rajkumar
Ch.12 Manner of Payment

Ÿ for the period starting from the date of utilisation of such wrongly availed
input tax credit till the date of reversal of such credit or payment of tax in
respect of such amount,
Ÿ at such rate as may be notified under section 50(3).

Explanation. -For the purposes of this sub-rule, -

(1) Input tax credit wrongly availed shall be construed to have been utilised,
Ÿ When the balance in the electronic credit ledger falls below the amount of
input tax credit wrongly availed, and
Ÿ the extent of such utilisation of input tax credit shall be the amount by
which the balance in the electronic credit ledger falls below the amount of
input tax credit wrongly availed.
(2) The date of utilisation of such input tax credit shall be taken to be, -
(a) The date, on which the return is due to be furnished under section 39 or the
actual date of filing of the said return, whichever is earlier, if the balance in the
electronic credit ledger falls below the amount of input tax credit wrongly
availed, on account of payment of tax through the said return; or
(b) The date of debit in the electronic credit ledger when the balance in the
electronic credit ledger falls below the amount of input tax credit wrongly
availed, in all other cases.
Q.1 In the cases of wrong availment of IGST credit by a registered person and
reversal thereof, for the calculation of interest under rule 88B of CGST Rules,
whether the balance of input tax credit available in electronic credit ledger under
the head of IGST only needs to be considered or total input tax credit available in
electronic credit ledger, under the heads of IGST, CGST and SGST taken together,
has to be considered.
Ans. Since the amount of input tax credit available in electronic credit ledger,
under any of the heads of IGST, CGST or SGST, can be utilized for payment of
liability of IGST, it is the total input tax credit available in electronic credit ledger,
under the heads of IGST, CGST and SGST taken together, that has to be
considered for calculation of interest under Rule 88B of CGST Rules and for
determining as to whether the balance in the electronic credit ledger has fallen
below the amount of wrongly availed input tax credit of IGST, and to what extent
the balance in electronic credit ledger has fallen below the said amount of
wrongly availed credit.
Thus, in the cases where IGST credit has been wrongly availed and subsequently
reversed on a certain date, there will not be any interest liability under section 50
of CGST Act if, during the time period starting from such availment and up to
such reversal, the balance of input tax credit (ITC) in the electronic credit ledger,
under the heads of IGST, CGST and SGST taken together, has never fallen below
the amount of such wrongly availed ITC, even if available balance of IGST credit in
electronic credit ledger individually falls below the amount of such wrongly
availed IGST credit.

CA Rajkumar 12.25
 Manner of Payment Ch.12

However, when the balance of ITC, under the heads of IGST, CGST and SGST of
electronic credit ledger taken together, falls below such wrongly availed amount
of IGST credit, then it will amount to the utilization of such wrongly availed IGST
credit and the extent of utilization will be the extent to which the total balance in
electronic credit ledger under heads of IGST, CGST and SGST taken together falls
below such amount of wrongly availed IGST credit, and will attract interest as per
Section 50(3) of CGST Act.
Q.2 Whether the credit of compensation cess available in electronic credit ledger
shall be taken into account while considering the balance of electronic credit
ledger for the purpose of calculation of interest under Rule 88B of CGST Rules in
respect of wrongly availed and utilized IGST, CGST or SGST credit.
Ans. ITC in respect of compensation cess on supply of goods and services can be
utilised only towards payment of compensation cess leviable on supply of goods
and services.
Thus, credit of compensation cess cannot be utilized for payment of any tax
under CGST or SGST or IGST heads and/ or reversals of credit under the said
heads.
Accordingly, credit of compensation cess available in electronic credit ledger
cannot be taken into account while considering the balance of electronic credit
ledger for the purpose of calculation of interest under Rule 88B of CGST Rules.

Rule 88C. (1) Where

Manner of Ÿ the tax payable as per GSTR:1 /IFF
dealing with Ÿ exceeds the amount of tax payable as per GSTR:3B
difference in
Ÿ by such amount and such percentage, as Notified
liability
reported in The said registered person
statement of Ÿ shall be intimated of such difference and
outward
Ÿ a copy of such intimation shall also be sent to his e-mail address
supplies and
that reported Ÿ highlighting the said difference and directing him to-
in return (a) Pay the differential tax liability, along with interest under section 50, or
(b) Explain the aforesaid difference in tax payable on the common portal,
within a period of 7 days.
(2) The registered person shall, upon receipt of the intimation, either,-
(a) Pay the amount of the differential tax liability, fully or partially, along
with interest under section 50, or
(b) Furnish a reply, incorporating reasons in respect of that part of the
differential tax liability that has remained unpaid, if any,
within the period specified in the said sub-rule.
(3) Where
Ÿ any amount specified in the intimation remains unpaid within the period
specified in that sub-rule and

12.26
CA Rajkumar
Ch.12 Manner of Payment

Ÿ where no explanation or reason is furnished by the registered person in

default or
Ÿ where the explanation or reason furnished by such person is not found to
be acceptable by the proper officer,
the said amount shall be recoverable in accordance with the provisions of section 79.

Rule 88D: (1) Where the amount of input tax credit availed by a registered person in the
Manner of
return for a tax period or periods furnished by him in FORM GSTR-3B
dealing with
exceeds the input tax credit available to such person in accordance with
difference in
the auto-generated statement containing the details of input tax credit in
ITC available
in GSTR 2B FORM GSTR-2B
and that Ÿ in respect of the said tax period or periods, as the case may be, by such
availed in amount and such percentage, as may be recommended by the Council,
return
Ÿ the said registered person shall be intimated of such difference in Part A
of FORM GST DRC- 01C, and
Ÿ a copy of such intimation shall also be sent to his e-mail address
provided at the time of registration or as amended from time to time,
highlighting the said difference and directing him to—
(a) Pay an amount equal to the excess input tax credit availed in the said
FORM GSTR-3B, along with interest payable under section 50, through
FORM GST DRC-03, or
(b) Explain the reasons for the aforesaid difference in input tax credit on
the common portal, within a period of 7 days.
(2) The registered person referred to sub-rule (1) shall, upon receipt of the
intimation referred to in the said sub-rule, either,
(a) pay an amount equal to the excess input tax credit, fully or
partially, along with interest payable under section 50, through FORM GST
DRC-03 and furnish the details thereof in Part B of FORM GST DRC-01C,
electronically on the common portal, or
(b) furnish a reply, electronically on the common portal, incorporating
reasons in respect of the amount of excess input tax credit that has still
remained to be paid, if any, in Part B of FORM GST DRC-01C, within the
period specified in the said sub-rule.
(2) Where any amount specified in the intimation referred to in sub-rule (1)
Ÿ remains to be paid within the period specified in the said sub-rule and

Ÿ where no explanation or reason is furnished by the registered person in

default or where the explanation or reason furnished by such person is
not found to be acceptable by the proper officer,
Ÿ the said amount shall be liable to be demanded in accordance with
the provisions of section 73 or section 74, as the case may be.”.

CA Rajkumar 12.27
 1
Ch.13 Return

Ch 13 Return

Sections List Forms List

Section 37 Outward supply statement Form Content
Section 38 Communication of details of GSTR 01 Invoice issued
inward supplies and input tax GSTR 02 ITC Statement on Portal
credit [GSTR 2B]
GSTR 3B Return
Section 39 Filing of Return
GSTR 04 Annual statement @
Section 40 First Return composite dealer
Section 41 Availment of input tax credit GST-CMP: 08 Quaterly Statement
Section 42 Matching / Mismatching of ITC GSTR 05 NRTP
Section43 Matching / Mismatching of ITC GSTR 06 ISD
Section 44 Annual Return GSTR 07 TDS RETURN
Section 45 Final Return GSTR 08 TCS RETURN
Section 46 Notice on Non- filing GSTR 09 Annual Return @Regular
Section 47 Late fees Scheme
Section 48 GST practitioner GSTR 9A Annual Return @Composition
Scheme
GSTR 9B Annual TCS Statement
GSTR 9C Annual Reconciliation
Statement
GSTR 10 Final Return
GSTR 11 UIN HOLDER

Process:

GST portal GST portal

GSTR 01 by 11th of next month

Detail of Invoice issued

Supplier Recepient

13.1
6.1
CA Rajkumar
 Return Ch.13

Annual Return and Reconciliation Statement

For Regular and composite supplier FOR Special category no

need to file these forms

Aggregate Annual Return Form 9/9A u/s Reconciliation CTP,

Turnover 44 statement @ self- NRTP,
certified u/s 44 Refund claimer
Exempted by way of notification TDS deductor,
Upto 2 cr No
issued every year TCS collector,
Above 2 cr to 5 ISD and
Yes No
cr Govt. Departments.
Above 5 cr Yes Yes

First and Last Return

First Return Last Return

* GSTR ??? @ One time * GSTR 10 @ One time

After grant of RC * Person whose RC canceled
* Details of outward * With- in 3 month from (order/effective of Cancellation)
supply whichever is later
* For the period: The
date on which liability of * GSTR 05 @ Monthly
registration arises TILL * Non Resident Taxable Person
the date on which * Last Return: 13th of Next Month or within 7 days after the
Registration is last day of validity of Registration Crtificate – whichever is
granted.[Pre RC Period] earlier.

Notes:
(1) No rectification of any omission or incorrect particulars shall be allowed after: 30th November of
next FY or annual return Actual filing date (whichever is Earlier)
(2) Payment of tax mandatory to file a valid return Except QRMP Scheme.
(3) Nil return also required to be filed.

13.2 CA Rajkumar
 Person Registered as
Ch.13

Tax Payer Refund Claimer Others

Permanency Character Temporary character

CA Rajkumar
Regular scheme Composition scheme Casual Taxable Non Resident TDS TCS
Return

ISD
Person Taxable Person Deductor Collector

Normal QRMP Scheme

Statements GSTR 01 @ GSTR 01 /IFF @ GST-CMP 08 @ GSTR 01 @ ……..NA…….. ……..NA…….. ……..NA…….. ……..NA……..
Monthly, by Monthly Quarterly By 18 th Monthly, by 11 th
11th of next /Quarterly by 13 th of Next month of next month
month of next month
PAYMENT Monthly By 20 th Monthly by 25th of Quarterly By 18 th PREPAID @ 5 PREPAID @ 5 ……..NA…….. Monthly By 13 th Monthly By
of next month next month of next month Days in Advance Days in of next month 10th of next
Advance [Only set off] month
Periodic Return GSTR 3B @ GSTR 3B @ GSTR 04 @ GSTR 3B @ GSTR 05 @ GSTR 11 @ GSTR 6 @ GSTR 7 @
Monthly By 20 th Quarterly By Annually By 30th Monthly By 20 th Monthly By 13 th Monthly By 28 th Monthly By 13 th Monthly By
of next month 22nd/24th of next April of next FY of next month of Next Month of next month of next month 10th of next
month month
Annual Return GSTR 09 GSTR 09 GSTR 9A ……..NA…….. ……..NA…….. ……..NA…….. ……..NA…….. ……..NA……..
[Where T/O @Annually by @Annually by 31st @Annually by 31st
Exceeds 5 cr] 31st Dec. of Dec. of next FY Dec. of next FY
next FY

Reconcilia on GSTR 9C GSTR 9C GSTR 9C ……..NA…….. ……..NA…….. ……..NA…….. ……..NA…….. ……..NA……..

Statement @Annually by @Annually by 31st @Annually by 31st
[Where T/O 31st Dec. of Dec. of next FY Dec. of next FY
Exceeds 5 cr] next FY

6.3
13.3
 Return Ch.13

Some other Points:

Notice to Where a registered taxable person fails to furnish a return under section 39,[Combined
return Return] section 44[Annual Return] or section 45, [Final Return] a notice shall be
defaulter issued requiring him to furnish such return within 15 days in such form and manner as
may be prescribed.

Late fees Periodic and Any registered taxable person who fails to furnish the-details of
Final Return outward u/s 37 or Return u/s 39,45,52 by the due date, shall be liable to
pay late fee of `100 [Reduced to `25 and 10 for NIL RETURN] for every day
during which such failure continues subject to a maximum of `5000.

Annual Any registered taxable person who fails to furnish the return required
Return under section 44 by the due date shall be liable to a late fee of `100 for
every day during which such failure continues subject to a maximum of an
amount calculated at a 0.25% of his turnover in the State)/UT.
Maximum Form Description Late Fess under CGST
Late Fees
payable Form GSTR Nil Return Rs.250
under section 01 and 3B Aggregate Turnover in PFY Rs.1000
47 for limited to Rs. 1.5 Cr
delayed Aggregate Turnover in PFY more Rs.2,500
filing than Rs. 1.5 Cr but upto Rs. 5 cr
Others Rs. 5,000
Form Nil Rs.250
GSTR 4 Others Rs.1000
Form Delayed Furnishing Rs. 25 per day for
GSTR 7 delayed period
[Maximum: Rs. 1,000]

Late fees for specified class of persons

Class of registered persons Amount
Registered persons having an aggregate Rs 25 per day, subject to a maximum of an
turnover of up to Rs 5 cr. in the relevant amount calculated at 0.02% of turnover in the
financial year. State or Union territory.
Registered persons having an aggregate Rs 50 per day subject to a maximum of an
turnover of more than Rs 5 cr. and up to Rs 20 amount calculated at 0.02 per cent. of turnover
cr. in the relevant financial year. in the State or Union territory.

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Ch.13 Return

SECTION 37: OUTWARD SUPPLIES DETAILS i.e. DETAILS OF INVOICE,

DEBIT & CREDIT NOTES.[GSTR : 1]

(I) Ü Every Registered person: [Other Than : Non-Resident, Composite Dealer, ISD [Input service
distributor], TDS Deductor, TCS Collector]
Ü Shall Furnish Details of Outward supplies in form GSTR=1 for a tax Period on or Before 11th
/13th of next month and
Ü Such Details shall be Communicated to Recipient.

(ii) MAXIMUM TIME OF AMENDMENT/RECTIFICATION : IN GSTR: 1

Ü GSTR:1 can be amended or Rectified,
Ü @ Maximum by 30th Novmber of next FY OR Actual Filing of Annual Return Date (Whichever is
Earlier)
Moreover-
Ü Any Registered Person who has furnished GSTR:1 for any tax period shall upon discovery of
Ü any error / Omission which leads to a case of Short-Payment.
Ü Liable to pay such tax with Interest.
(iii) RESTRICTION ON FURNISHING OF GSTR:1
Ü A registered person shall not be allowed to furnish the details of outward supplies (GSTR 1) for
a tax period,
Ü if the details of outward supplies [GSTR 1] for any of the previous tax periods has not been
furnished by him:

Note: Details of outward supplies shall include details of invoices, debit notes, credit notes
and revised invoices issued in relation to outward supplies made during any tax period.
(iv) A registered person shall not be allowed to furnish GSTR 1 for a tax period after the expiry of a
period of 3 years from the due date of furnishing the said details:
Provided that the Government may, allow a registered person or a class of registered
persons to furnish the details of outward supplies for a tax period under sub-section (1),
even after the expiry of the said period of 3 years.

SECTION:38: Communication of details of inward supplies and

input tax credit.

The GSTR:1furnished by the registered persons under section 37 and of such other supplies as
may be prescribed, and
Ÿ an auto-generated statement containing the details of input tax credit
Ÿ shall be made available electronically to the recipients of such supplies in Specified form.
The auto-generated statement shall consist of:
1) Details of inward supplies in respect of which ITC may be available.
2) Details of supplies in respect of which ITC CAN NOT be available either wholly or partially
where
Where Return not submitted by Supplier on Time
Non payment of tax by supplier

13.11
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CA Rajkumar
 Return Ch.13

Short payment of tax by supplier

Excess credit availed by supplier
Supplier not to follow Rule of 1%.
Any other reason

SECTION 39: FILING OF PERIODIC RETURN

(i) GSTR:3/3B Every registered person, other than (Other than Non Resident, Composite
Dealer, ISD, TDS Deductor, TCS Collector)
Ÿ shall, for every calendar month or part thereof, furnish, a return,
electronically,
Ÿ of inward and outward supplies of goods or services or both,
Ÿ input tax credit availed,
Ÿ tax payable, tax paid and
Ÿ such other particulars,
Ÿ in such form and manner, and within such time, as may be prescribed:
However the Government may, notify certain class of registered persons
who shall furnish a return for every quarter or part thereof, [SPECIFIED
PERSONS under QRMP]

(ii) GST-CMP:08 A composite dealer shall,

Ÿ for each financial year or part thereof, furnish a return, electronically,
Ÿ of turnover in the State or Union territory,
Ÿ inward supplies of goods or services or both,
Ÿ tax payable, tax paid and
Ÿ such other particulars in such form and manner, and within such time,
as may be prescribed.

(iii) GSTR:5 Ÿ Every Registered Non-Resident Taxable Person Shall file GSTR:5 for
every Calendar Month of part thereof
Ÿ @ Specified Details
Ÿ with in 13 Days after the end of Calendar Month OR
Ÿ Within 7 Days after the expiry of Registration period (Whichever is
Earlier)
NOTE: The Commissioner may extend the time limit for Furnishing the
Return under this section.

ISD @ monthly (4) Every taxable person registered as an Input Service Distributor shall, for every
frequency by 13th calendar month or part thereof, furnish, in such form and manner as may be
prescribed, a return, electronically, within 13 days after the end of such month.
th
[section 51]
[FORM GSTR: 6]
TDS Deductor @ (3) Every registered person required to deduct tax at source under the provisions
monthly frequency of section 51 shall furnish, in such form and manner as may be prescribed, a
by 10th [sec 51] return, electronically, for the month in which such deductions have been
[FORM GSTR: 7] made within 10 days after the end of such month.

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Ch.13 Return

(iv) TAX PAYMENT BY DUE DATE OF RETURN:

General Every registered person who is required to furnish a return under subsection
Provision (1), [other than the person SPECIFIED PERSONS under QRMP]
shall pay to the Government the tax due as per such return not later than the
last date on which he is required to furnish such return.

QRMP Holder SPECIFIED PERSONS under QRMP]- shall pay to the Government,
(a)
Ÿ the tax due taking into account inward and outward supplies of goods
or services or both,
Ÿ input tax credit availed,
Ÿ tax payable and
Ÿ such other particulars during a month, in such form and manner, and
within such time, as may be prescribed OR
(b) An amount determined in prescribed manner [fixed %].

Composite dealer For composite Dealers: Provided further that every registered person
furnishing return under subsection (2)
Ÿ shall pay to the Government the tax due
Ÿ taking into account turnover in the State or Union territory,
Ÿ inward supplies of goods or services or both,
Ÿ tax payable, and such other particulars
Ÿ during a quarter, in such form and manner, and within such time, as
may be prescribed.

(v) NIL RETURN:

Ü Every registered person (Other than Non Resident, ISD, TDS Deductor, TCS Collector)
Ü Including Composite Dealer is required to file NIL Return Also.
(vi) RECTIFICATION:
After Furnishing a Return, where any registered person discovers any omission or Incorrect
Particulars.
Ü Then he shall rectify such omission or Incorrect Particulars in the Upcoming Month /
Quarter's Return. [Note: Interest will be payable if any]
Ü Maximum time for such rectification will be earlier of the two:
Ÿ 30th November of Next FY
OR
Ÿ Actual Date of Furnishing of Relevant annual Return.

(vii) NO FUTURE RETURN: A registered person shall not be allowed to furnish a return for a tax
period if the return for any of the previous tax periods or the details of outward supplies [GSTR: 1]
for the said tax period has not been furnished by him.
(vii) A registered person shall not be allowed to furnish a return for a tax period after the expiry of a
period of 3 years from the due date of furnishing the said return:
Provided that the Government may, allow a registered person or a class of registered persons to
furnish the return for a tax period, even after the expiry of the said period of 3 years.

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CA Rajkumar
 Return Ch.13

SECTION: 40 : FIRST RETURN @ PRE RC PERIOD

Ÿ Every Registered Person who has made outward supplies in PRE RC PERIOD [The Period start
with the date on which the person liable for Registration till the date of grant of Registration)
Ÿ shall declare the same in his first return furnished by him after grant of registration corticated.

SECTION: 41 : AVAILMENT OF INPUT TAX CREDIT

1) Every registered person shall be entitled to avail the credit of eligible input tax, as self-assessed,
in his return and such amount shall be credited to his electronic credit ledger.
(2) The credit of input tax availed by a registered person in respect of such supplies of goods or
services or both, the tax payable whereon has not been paid by the supplier, shall be reversed
along with applicable interest.
However, where the said supplier makes payment of the tax payable in respect of the aforesaid
supplies, the said registered person may re-avail the amount of credit reversed by him in.
NOTE: Section 42,43 Ommited

Section 44: Annual return @ Annual Frequency

By every (1) Every registered person, other than

registered o an Input Service Distributor,
person except o a person paying tax under section 51 or section 52,
notified o a casual taxable person and
[GSTR: 9, 9A] o a non-resident taxable person
shall furnish an annual return
Ÿ which may include a self-certified reconciliation statement,
Ÿ reconciling the value of supplies declared in the return furnished
for the financial year,
Ÿ with the audited annual financial statement for every financial year
electronically, on or before the 31st December following the end
of such financial year and in form GSTR 9 [ Form 9A for composite
supplier]
However Commissioner may, exempt any class of registered persons from
filing annual return under this section:

GSTR 9C Every registered person, other than

o an Input Service Distributor,
o a person paying tax under section 51 or section 52,
o a casual taxable person and
o a non-resident taxable person
Whose aggregate turnover during a financial year exceeds Rs. 5 cr, shall also
furnish a self-certified reconciliation statement as specified under section 44
in FORM GSTR-9C along with the annual return on or before the 31st
December following the end of such financial year.

13.14 CA Rajkumar
Ch.13 Return

Relaxation from Relaxation to Government Department: The provisions of this section will
GSTR 9/9A/9C not be applicable to
Ÿ Any department of the Central Government or a State Government or a
local authority,
Ÿ whose books of account are subject to audit
Ÿ by the Comptroller and Auditor-General of India [CAG] or an auditor
appointed for auditing the accounts of local authorities under any law for
the time being in force.”
Notification No. 32/2023 - It is hereby exempts the registered person
whose aggregate turnover in the financial year 2022-23 is upto Rs. 2 cr, from
filing annual return for the said financial year.

Maximum Time A registered person shall not be allowed to furnish an annual return for
to file a financial year after the expiry of a period of 3 years from the due date of
furnishing the said annual return:
Provided that the Government may, allow a registered person or a class of
registered persons to furnish an annual return for a financial year, even
after the expiry of the said period of 3 years

Section: 45 Final Return [One time Return]

Every Registered person: [Other Than : Non-Resident, Composite Dealer, ISD, TDS Deductor, TCS
Collector]
Ÿ whose registration has been cancelled shall furnish a final return
Ÿ within three months of the date of cancellation or date of order of cancellation, whichever is
later.

Some other Points:

Section: 46 Where a registered taxable person fails to furnish a return under section
Notice to return 39,[Combined Return] section 44 [Annual Return] or section 45, [Final
defaulter Return] a notice shall be issued requiring him to furnish such return within 15
days in such form and manner as may be prescribed. [GSTR 3A]

Section: 47 Periodic and Any registered taxable person

Late fees Final Return Ÿ who fails to furnish the-details of outward
supplies u/s 37 or RETURN u/s 39,45,52 by the
due date
Ÿ shall be liable to pay late fee of ` 100 [Reduced
to ` 25 and 10 for NIL RETURN] for every day
during which such failure continues
Ÿ subject to a maximum of ` 5000.

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CA Rajkumar
 Return Ch.13

Annual Return Any registered taxable person

Ÿ who fails to furnish the return required under
section 44 by the due date
Ÿ shall be liable to a late fee of `100 for every day
during which such failure continues
Ÿ subject to a maximum of an amount calculated at
a 0.25% of his turnover in the State)/UT.

Section : 48 The responsibility for correctness shall continue to rest with the
GST Practitioner registered taxable person.
Ÿ To be a GST Practitioner need to apply in specified form.
Ÿ The person should be: Indian Citizen, sound mind, solvent, non-
convicted, Graduate, post graduate, Qualified final exam of
CA/CS/CMA etc]
Ÿ No person shall be eligible to attend before any authority as a GST
practitioner in connection with any proceedings under the Act on
behalf of any registered or un-registered person unless he has been
enrolled for this.
Ÿ A GST practitioner attending on behalf of a registered or an
unregistered person in any proceedings under the Act before any
authority shall produce before such authority, if required, a copy of
the authorisation.

CGST Rules 2017

Rule: 59 Form (1) Every registered person,

and manner of - other than a person referred to in section 14 of the Integrated Goods
furnishing details and Services Tax Act, 2017ie OIDAR supplier
of outward - shall furnish such details in FORM GSTR-1 for the month or the
supplies quarter.
[FORM: GSTR 1]
(2) The registered persons required to furnish return for every quarter
under proviso to section 39(1) ie QRMP
- may furnish the details of such outward supplies of goods or services
or both to a registered person, for the first and second months of a
quarter, up to a cumulative value of Rs.50 lakh in each of the months,-
- using invoice furnishing facility [IFF] electronically on the common
portal, by 13th of next month.
(3) The details of outward supplies furnished using the IFF, for the first and
second months of a quarter, shall not be furnished in FORM GSTR-1 for
the said quarter.
(4) The details of outward supplies of goods or services or both furnished in
FORM GSTR-1 shall include the–

13.16 CA Rajkumar
Ch.13 Return

(a) Invoice wise details of all –

Inter-State and intra-State supplies Made to the registered persons [B to B]

Inter-State supplies with invoice value Made to the unregistered

more than Rs.2,50,000 persons [B to C]

Debit and credit notes, if any, For invoices issued previously.

issued during the month

(b) Consolidated details of all -

Intra-State supplies made to unregistered persons for each rate of tax[B to C]

State wise inter -State made to unregistered persons for each rate of tax [B to C]
supplies with invoice
value upto Rs.2,50,000

Debit and credit notes, For invoices issued previously

if any, issued during the
month

(5) The details of outward supplies of goods or services or both

furnished using the IFF shall include the –

Invoice wise details of inter

- made to the registered persons [B to B]
State and intra-State supplies

Debit and credit notes, if made to the registered persons [B to B]

any, issued during the month
for such invoices issued
previously.”.

(6) Restrictions on filing GSTR-1

Notwithstanding anything contained in this rule, -

(a) If taxable person has not Then he shall not be allowed to furnish
furnished the return in FORM GSTR- the details of outward supplies of
3B for preceding month; goods or services or both under
section 37 in FORM GSTR-1,

(b) A registered person, required to shall not be allowed to furnish the

furnish return for every quarter details of outward supplies of goods
under the proviso to sub-section (1) or services or both under section 37
of section 39, ie QRMP if he has not in FORM GSTR-1 or using the
furnished the return in FORM GSTR- invoice furnishing facility,
3B for preceding tax period;

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CA Rajkumar
 Return Ch.13

(c) A Registered person, to whom an shall not be allowed to furnish GSTR

intimation has been issued under the 01/IFF for a subsequent tax period,
unless he has either deposited the
provisions of Rule 88C(1) in respect
amount specified in the said
of a tax period,
intimation or has furnished a reply
explaining the reasons for any amount
remaining unpaid.

(d) a registered person, to whom an shall not be allowed to furnish the

intimation has been issued on the details of outward supplies of goods
common portal under Rule 88D (1) in or services or both under section 37 in
respect of a tax period or periods, FORM GSTR-1 or using the invoice
furnishing facility for a subsequent tax
period,
-unless he has either paid the amount
equal to the excess input tax credit as
specified in the said intimation or
- has furnished a reply explaining the
reasons in respect of the amount of
excess input tax credit that still
remains to be paid, as required under
the provisions of Rule 88D(2);

(e) A registered person shall not be allowed to furnish FORM

GSTR-1 or using the invoice
furnishing facility, if he has not
furnished the details of the bank
account as per the provisions of rule
10A.

Rule 60: Form

(1)The details of outward supplies Ÿ Shall be made available
and manner of
furnished by the supplier in FORM electronically to the concerned
ascertaining
details of inward GSTR-1 or using the IFF registered persons (recipients)
supplies Ÿ in Part A of FORM GSTR-2A, in
[FORM: GSTR 2] FORM GSTR-4A and in FORM
GSTR-6A as the case may be.

(2) The details of invoices furnished Ÿ Shall be made available to the

by an non-resident taxable person recipient of credit
in his return in FORM GSTR-5 Ÿ in Part A of FORM GSTR 2A

(3) The details of invoices furnished Ÿ Shall be made available to the

by an Input Service Distributor in recipient of credit
his return in FORM GSTR-6 Ÿ in Part B of FORM GSTR 2A.

13.18 CA Rajkumar
 Return Ch.13

Rule 64 Every registered person

Form and manner
of submission of Ü either providing online money gaming from a place outside India to a
return by persons person in India, or
providing online Ü providing online information and data base access or retrieval services
information and
from a place outside India to a non-taxable online recipient referred to
data base access
or retrieval in section 14 of the Integrated Goods and Services Tax Act, 2017 or to a
services and by registered person other than a non-taxable online recipient,
persons supplying th
Ü shall file return in FORM GSTR-5A on or before the 20 day of the month
online money succeeding the calendar month or part thereof.
gaming from a
place outside
India to a person
in India

Rule 64: Form and

Every registered person providing online information and data base access or
manner of
retrieval services from a place outside India to a non-taxable online recipient
submission of
return by persons referred to in section 14 of the IGST Act, 2017 person in India other than a
providing online registered person shall file return in FORM GSTR-5A on or before the 20th day
information and of the month succeeding the calendar month or part thereof.
database access or
retrieval services
[FORM: GSTR 5A]

Rule 65: Form and

Every Input Service Distributor shall, on the basis of details contained in FORM
manner of
GSTR-6A, and where required, after adding, correcting or deleting the details,
submission of
return by an Input furnish electronically the return in FORM GSTR-6, containing the details of tax
Service Distributor invoices on which credit has been received and those issued under section 20.
[FORM: GSTR 6]

Rule 66: Form and

(1) Every registered person required to deduct tax at source under section 51
manner of
shall furnish a return in FORM GSTR-7.
submission of
return by a person (2) The details furnished by the deductor under sub-rule (1) shall be made
required to deduct available electronically to each of the suppliers in Part C of FORM GSTR-2A
tax at source and FORM-GSTR- 4A on the common portal after the due date of filing of
[FORM: GSTR 7] FORM GSTR-7.

(2) The details furnished by the deductor under sub-rule (1) shall be made
available electronically to each of the deductee on the common portal after
filing of FORM GSTR-7 for claiming the amount of tax deducted in his
electronic cash ledger after validation.
(3) The certificate referred to in section 51(3) shall be made available
electronically to the deductee on the common portal in FORM GSTR-7A
on the basis of the return furnished under sub-rule (1).

13.24 CA Rajkumar
Ch.13 Return

Rule 67: Form and (1) Every electronic commerce operator required to collect tax at source under
manner of section 52 shall furnish a statement in FORM GSTR-8 electronically,
submission of containing details of supplies effected through such operator and the
statement of
amount of tax collected as required under section 52(1).
supplies through
an e-commerce (2) The details furnished by the operator under sub-rule (1) shall be made
operator available electronically to each of the suppliers The details of tax collected
[FORM: GSTR 8] at source under section 52(1) furnished by the operator shall be made
available electronically to each of the registered suppliers on the
common portal after filing of FORM GSTR-8 for claiming the amount of tax
collected in his electronic cash ledger after validation.

13.25
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CA Rajkumar
Ch.15.1 Refund

Ch 15 REFUND

WHY REFUND
(1) Zero Rated Supply [Export to Abroad/SEZ (Unit/Developer]
(a) Pay GST & After EXPORT claim Refund.
(b) On Export (Abroad/SEZ): Do Not Pay Tax: (Instead: Execute BOND/L.U.T.)
(2) Deemed Supply
(3) Inverted Tax Rate Structure.
(4) Refund of Excess Amount Deposited in E-Cash Ledger.
(5) Refund to C.T.P./N.R.
(6) First of all Provisional Assessment ` = 70,000/- & later on finalization @ ` 50,000/- Refund of `
20,000/-
(7) Refund due to Intra/Inter confusion.
(7) Refund of Excess Payment of Tax.
(8) Refund to UN/Embassy.
(9) Refund due to any Judgment/Order etc.
(10) Refund due to any Retrospective Amendment.
(11) Refund to Tourist on Leaving India.
(12) Advance Payment Received & No Supply made.
(13) Etc.

Rule: 89 Refund to Whom: Any person who borne the incidence of TAX.

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CA Rajkumar
 Refund Ch.15.1

Refund Procedure

Government GSTRFD:01
MANUFACTURER Whole Seller Retailer Consumer
(Process Application
Application) within 2 year By sea/Air: The date when leave India Consumer
on common In case of By Land: The date when Pass Custom frontier Welfare
Portal from RD Export By Post: The date when Dispatch by Post office
of goods Fund
with Supp.Doc./Proof
The case of deemed Export (to EOU) : The date when Relevant Return furnished This funds
In case of Service Exported : [Completion – Payment] = PAYMENT Date
contains:
[Payment – Invoice] = INVOICE Date
Relevant Date/ - Amount u/s
In case of Judgement/Order : The date of order/judgement
Eligible Date 54(5) ie refund
In case of ITC Refund [ITRS] : Due date of filing of return u/s 39.
amount
Refund claimed by other than supplier : Date of receipts of goods/services
Ÿ The Application shall be Provisional Assessment : Date of finalization of Assessments
- Income from
processed (fund actually Other Residuary : Date of Payment of Tax eg excess payment
Investment
credited to bank account) within Intra inter confusion : Date of payment of correct GST
60 days from the date of Receipt Supply to SEZ : : Due date for furnishing of return
- Other
of Application (ARN DATE)
Income/Grant.
Ÿ Otherwise liable to Interest @ 6%
PA After 60 days till the date of
payment [ROI=9% PA if Refund

Refund to embassy etc. on Inward

No Refund: i.e. Negativity Refund U/S 55
Supply – Application within 2 years
Ÿ No Refund to casual Taxable person
from the Quarter ending in which
If R.C. Remain In force and
supply was Received
Unless – furnished All Returns.
Ÿ Refund Amount may be withhold or
Adjusted IF—
Ÿ Refund on Zero Rated Supply
-Has NOT furnished Return/ NOT paid
Ÿ Refund of Unutilised ITC
Tax/Interest/Penalty (TIP)
Ÿ Refund when supply NOT made And this Fund to be
- Any Amount unpaid under GST Law or Old
& Consideration Refunded. utilized for the
law
Ÿ Incidence has NOT been passed Welfare of Consumer
- Refund order further appealable by
on By following doctrine
department
Ÿ Refund due to intra/inter of unjust enrichment
Ÿ No Refund IF the person claim DBK,
confusion
Ÿ Refund under IGST i.e. it is Mutually
Ÿ Notified Person
Exclusive
Ÿ No Refund of ITC-EXCEPT under
Situations. (Zero Rated/Inverted Tax Rate
Structure)
Ÿ If Export Duty Actually to be paid
Ÿ If refundable amount in TRIPPLE DIGITS
Note: Provisional Refunds @ 90% allowed
conditionally to zero rated supplier

OR

Transfer to Consumer Welfare Fund [on the basis of presumption u/s 49(9) @ tax load passed on to end user]
Note: (1) Application: No need to file RFD 01, In case of Refund to casual taxable person /Non Resident [claim through return].
Note: (2) Supportive Documents: for Incidence of tax – required only when claim amount is of 2 lakh or more otherwise declaration is
sufficient.
Note: (3) Where claiming refund of ITC then equal amount of ITC need to be deducted/ Reversed from E- Credit Ledger.
Note: (4) Refund is subjected to any other liability.

15.2
CA Rajkumar
Ch.15.1 Refund

Section 54: Refund of tax

How to Application with in 2 year from Relevant Date: (1) Any person claiming
claim Refund: refund of any tax and interest, if any, paid on such tax or any other amount
paid by him, may make an application before the expiry of 2 years from the
relevant date in such form and manner as may be prescribed:
Claim refund through Return: A registered person, claiming refund of any
balance in the electronic cash ledger in accordance with the provisions of
section 49(6), may claim such refund in as may be prescribed.

Refund to UN/ (2) A specialised agency of the United Nations Organisation or any
Embassy etc. on Multilateral Financial Institution and Organisation notified under the
INWARD supplies. United Nations (Privileges and Immunities) Act, 1947, Consulate or
Embassy of foreign countries or any other person or class of persons, as
notified under section 55,
- entitled to a refund of tax paid by it on INWARD supplies of goods or
services or both,
- may make an application for such refund, in such form and manner as may be
prescribed,
- before the expiry of 2 YEARS from the last day of the quarter in which
such supply was received.

Refund of Refund of ITC at the end of TAX PERIOD: (3) Subject to the provisions of
unutilized ITC in sub-section (10), a registered person may claim refund of any unutilised input
case of Zero Rated tax credit at the end of any tax period:
Supplies and in Provided that no refund of unutilised input tax credit shall be allowed in cases
case of inverted other than––
tax rate structure
(i) Zero rated supplies made without payment of tax;
(ii) Where the credit has accumulated on account of rate of tax on
inputs being higher than the rate of tax on output supplies (other
than nil rated or fully exempt supplies), except supplies of goods or
services or both as may be notified by the Government on the
recommendations of the Council:
No such Refund if goods attract Export duty (eg. leather Articles etc.):
Provided further that no refund of unutilised input tax credit shall be allowed
in cases where the goods exported out of India are subjected to export duty:
No such refund of ITC if claims DBK or Refund of IGST (ie mutual
Exclusive): Provided also that no refund of input tax credit shall be allowed, if
the supplier of goods or services or both avails of DRAWBACK in respect of
central tax OR claims REFUND of the integrated tax paid on such supplies.
Withhold or Adjust refund amount (10) Where any refund is due under sub-
section (3) to a registered person who has defaulted in furnishing any return or
who is required to pay any tax, interest or penalty, which has not been stayed
by any court, Tribunal or Appellate Authority by the specified date, the proper
officer may-

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 Refund Ch.15.1

(a) Withhold payment of refund due until the said person has furnished
the return or paid the tax, interest or penalty, as the case may be;
(b) Deduct from the refund due, any tax, interest, penalty, fee or any other
amount which the taxable person is liable to pay but which remains
unpaid under this Act or under the existing law.
Explanation: For the purposes of this sub-section, the expression “specified
date” shall mean the last date for filing an appeal under this Act.

Supportive (4) The application shall be accompanied by–

document to claim
Refund: so as to (a) Such documentary evidence as may be prescribed to establish that a
prove of not refund is due to the applicant; and
passing of (b) Such documentary or other evidence (including the documents
incidence and other referred to in section 33) as the applicant may furnish to establish that
documents: for the amount of tax and interest, if any, paid on such tax or any other
claiming amount amount paid in relation to which such refund is claimed was collected
of refund of
from, or paid by, him and the incidence of such tax and interest had not
` 2,00,000 or
more been passed on to any other person:
Provided that where the amount claimed as refund is less than `2,00,000
it shall not be necessary for the applicant to furnish any documentary and
other evidences but he may file a declaration, based on the documentary
or other evidences available with him, certifying that the incidence of such
tax and interest had not been passed on to any other person.

Amount of (5) If, on receipt of any such application, the proper officer is satisfied that the
REFUND whole or part of the amount claimed as refund is refundable, he may make an
transferred to
order accordingly and the amount so determined shall be credited to the
consumer welfare
Fund referred to in section 57.
fund, (if Nothing
prove contrary) Refund on Provisional basis: (6) Notwithstanding anything contained in
OR to applicant sub-section (5),
Ü the proper officer may, in the case of any claim for refund on account of
zero-rated supply of goods or services or both made by registered
persons,
Ü other than such category of registered persons as may be notified by the
Government on the recommendations of the Council,
Ü refund on a provisional basis, 90% of the total amount so claimed,
excluding the amount of input tax credit provisionally accepted, in
such manner and subject to such conditions, limitations and safeguards as
may be prescribed and
Ü thereafter make an order under sub-section (5) for final settlement of the
refund claim after due verification of documents furnished by the
applicant.

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Ch.15.1 Refund

(e) In the case of refund of unutilised input tax credit under clause (ii) of the
first proviso to sub-section (3), the due date for furnishing of return
under section 39 for the period in which such claim for refund arises;
(f) In the case where tax is paid provisionally under this Act or the rules
made thereunder, the date of adjustment of tax after the final
assessment thereof;
(g) In the case of a person, other than the supplier, the date of receipt of
goods or services or both by such person; and
(h) In any other case, the date of payment of tax.

Section 55: Refund in certain cases

The Government may, on the recommendations of the Council, by notification, specify:

Ÿ Any Specialised agency of the United Nations Organisation or

Ÿ Any Multilateral Financial Institution and Organisation notified under the United Nations
(Privileges and Immunities) Act, 1947,

Ÿ Consulate or Embassy of foreign countries and any other person or class of persons as may be
specified in this behalf,

who shall, subject to such conditions and restrictions as may be prescribed, be entitled to claim a refund
of taxes paid on the NOTIFIED supplies of goods or services or both received by them.

Section: 56 Interest on delayed Refunds

If any tax ordered to be refunded under section 54(5) to any applicant is not refunded within 60
days from the date of receipt of application under subsection (1) of that section, interest at such
rate not exceeding 6% as may be specified in the notification issued by the Government on the
recommendations of the Council shall be payable in respect of such refund for the period of delay
beyond 60 days from the date of receipt of such application till the date of refund of such tax, to be
computed in such manner and subject to such conditions and restrictions as may be prescribed"
from the date immediately after the expiry of sixty days from the date of receipt of application
under the said sub-section till the date of refund of such tax:
Provided that where any claim of refund arises from an order passed by an adjudicating
authority or Appellate Authority or Appellate Tribunal or court which has attained finality and
the same is not refunded within 60 days from the date of receipt of application filed
consequent to such order, interest at such rate not exceeding 9% as may be notified by the
Government on the recommendations of the Council shall be payable in respect of such refund
from the date immediately after the expiry of 60 days from the date of receipt of application till
the date of refund.
Explanation:For the purposes of this section, where any order of refund is made by an Appellate
Authority, Appellate Tribunal or any court against an order of the proper officer under section 54(5),
the order passed by the Appellate Authority, Appellate Tribunal or by the court shall be deemed to be
an order passed under the said sub-section (5).

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 Refund Ch.15.1

Section 57: Consumer Welfare Fund

The Government shall constitute a Fund, to be called the Consumer Welfare Fund and there shall be
credited to the Fund,-

(a) The amount referred to in section 54(5);

(b) Any income from investment of the amount credited to the Fund; and

(c) Such other monies received by it,

in such manner as may be prescribed.

Section 58: Utilisation of Fund

(1) All sums credited to the Fund shall be utilised by the Government for the welfare of the consumers
in such manner as may be prescribed.

(2) The Government or the authority specified by it shall maintain proper and separate account and other
relevant records in relation to the Fund and prepare an annual statement of accounts in such form as may
be prescribed in consultation with the Comptroller and Auditor-General of India.

CGST Rules, 2017 (Rule 89 to 97)

RULE 89: (1) Any person, except the persons covered under notification issued
Application for under section 55, claiming refund of [any balance in the electronic cash
refund of tax, ledger in accordance with the provisions of section 49(6) or] any tax,
interest, penalty, interest, penalty, fees or any other amount paid by him, other than refund
fees or any other of integrated tax paid on goods exported out of India, may file subject to
amount the provisions of rule 10B, an application electronically in FORM GST RFD-
01 through the common portal, either directly or through a Facilitation
Centre notified by the Commissioner:
Provided that in respect of supplies to a Special Economic Zone unit or a
Special Economic Zone developer, the application for refund shall be filed
by the –
(a) supplier of goods after such goods have been admitted in full in the
Special Economic Zone for authorised operations, as endorsed by
the specified officer of the Zone;
(b) supplier of services along with such evidence regarding receipt of
services for authorised operations as endorsed by the specified
officer of the Zone:
Provided Further that in respect of supplies regarded as deemed exports,
the application may be filed by,—
(a) the recipient of deemed export supplies; or
(b) the supplier of deemed export supplies in cases where the

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Ch.15.1 Refund

recipient does not avail of input tax credit on such supplies and
furnishes an undertaking to the effect that the supplier may claim the
refund.
Provided also that refund of any amount, after adjusting the tax payable by
the applicant out of the advance tax deposited by him under section 27 at
the time of registration, shall be claimed only after the last return required
to be furnished by him has been so furnished” in the last return required
to be furnished by him.
Explanation. - For the purposes of this sub-rule, “specified officer” means a
“specified officer” or an “authorised officer” as defined under rule 2 of the
Special Economic Zone Rules, 2006.
(1A) Any person, claiming refund under section 77 of the Act of any tax paid by
him, in respect of a transaction considered by him to be an intra-State supply,
which is subsequently held to be an inter-State supply, may, before the expiry
of a period of 2 years from the date of payment of the tax on the inter-
State supply, file an application electronically in FORM GST RFD-01 through
the common portal, either directly or through a Facilitation Centre notified by
the Commissioner:

Provided that the said application may, as regard to any payment of tax on
inter-State supply before coming into force of this sub-rule, be filed before
the expiry of a period of 2 years from the date on which this sub-rule
comes into force.
(2) The application under sub-rule (1) shall be accompanied by any of the
following documentary evidences in Annexure 1 in Form GST RFD-01, as
applicable, to establish that a refund is due to the applicant, namely:-
(a) the reference number of the order and a copy of the order passed by
the proper officer or an appellate authority or Appellate Tribunal or
court resulting in such refund or reference number of the payment of
the amount specified in subsection (6) of section 107 and sub-section
(8) of section 112 claimed as refund;
(b) a statement containing the number and date of shipping bills or bills
of export and the number and the date of the relevant export
invoices, in a case where the refund is on account of export of goods
[other than electricity]
(ba) a statement containing the number and date of the export invoices,
details of energy exported, tariff per unit for export of electricity as
per agreement, along with the copy of statement of scheduled
energy for exported electricity by Generation Plants issued by the
Regional Power Committee Secretariat as a part of the Regional
Energy Account (REA) under the Central Electricity Regulatory
Commission (Indian Electricity Grid Code) Regulations, 2010 and the
copy of agreement detailing the tariff per unit, in case where refund is
on account of export of electricity.
(c) a statement containing the number and date of invoices and the
relevant Bank Realisation Certificates or Foreign Inward Remittance

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 Refund Ch.15.1

Certificates, as the case may be, in a case where the refund is on

account of the export of services;
(d) a statement containing the number and date of invoices as provided
in rule 46 along with the evidence regarding the endorsement
specified in the second proviso to sub-rule (1) in the case of the
supply of goods made to a Special Economic Zone unit or a Special
Economic Zone developer;
(e) a statement containing the number and date of invoices, the
evidence regarding the endorsement specified in the second proviso
to sub-rule (1) and the details of payment, along with the proof
thereof, made by the recipient to the supplier for authorised
operations as defined under the Special Economic Zone Act, 2005, in
a case where the refund is on account of supply of services made to a
Special Economic Zone unit or a Special Economic Zone developer;
(f) a declaration to the effect that tax has not been collected from the
Special Economic Zone unit or the Special Economic Zone developer,
in a case where the refund is on account of supply of goods or
services or both made to a Special Economic Zone unit or a Special
Economic Zone developer;
(g) a statement containing the number and date of invoices along with
such other evidence as may be notified in this behalf, in a case where
the refund is on account of deemed exports;
(h) a statement containing the number and the date of the invoices
received and issued during a tax period in a case where the claim
pertains to refund of any unutilised input tax credit under sub-
section (3) of section 54 where the credit has accumulated on
account of the rate of tax on the inputs being higher than the rate of
tax on output supplies, other than nil-rated or fully exempt supplies;
(i) the reference number of the final assessment order and a copy of the
said order in a case where the refund arises on account of the
finalisation of provisional assessment;
(j) a statement showing the details of transactions considered as intra-
State supply but which is subsequently held to be inter-State supply;

(k) a statement showing the details of the amount of claim on account of

excess payment of tax and interest, if any, or any other amount
paid.

“(ka) a statement containing the details of invoices viz. number, date,

value, tax paid and details of payment, in respect of which refund is
being claimed along with copy of such invoices, proof of making such
payment to the supplier, the copy of agreement or registered
agreement or contract, as applicable, entered with the supplier for
supply of service, the letter issued by the supplier for cancellation or
termination of agreement or contract for supply of service, details of
payment received from the supplier against cancellation or

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Ch.15.1 Refund

be required to be revalidated where the refund has not been disbursed

within the same financial year in which the said payment advice was
issued.
(4A) The Central Government shall disburse the refund based on the
consolidated payment advice issued under sub-rule (4).
(5) Where the proper officer is satisfied that the amount refundable under
sub-rule (1) or sub-rule (1A) or sub-rule (2) is not payable to the
applicant under sub-section (8) of section 54, he shall make an order in
FORM GST RFD-06 and issue a payment order in FORM GST RFD-05,
for the amount of refund to be credited to the Consumer Welfare
Fund.

Rule 93: Credit of (1) Where any deficiencies have been communicated under sub-rule (3)
the amount of of rule 90, the amount debited under sub-rule (3) of rule 89 shall be re-
rejected refund credited to the electronic credit ledger.
claim
(2) Where any amount claimed as refund is rejected under rule 92, either
fully or partly, the amount debited, to the extent of rejection, shall be
re-credited to the electronic credit ledger by an order made in FORM
GST PMT-03.
Explanation: For the purposes of this rule, a refund shall be deemed
to be rejected, if the appeal is finally rejected or if the claimant gives an
undertaking in writing to the proper officer that he shall not file an
appeal.
(1) Where any interest is due and payable to the applicant under section
Rule 94: Order 56, the proper officer shall make an order along with a[Payment
sanctioning interest order]in FORM GST RFD-05, specifying therein the amount of refund
on delayed refunds
which is delayed, the period of delay for which interest is payable and
the amount of interest payable, and such amount of interest shall be
electronically credited to any of the bank accounts of the applicant
mentioned in his registration particulars and as specified in the
application for refund.
(2) The following periods shall not be included in the period of delay
under sub-rule (1), namely:-
(a) Any period of time beyond 15 days of receipt of notice in
FORM GST RFD-08 under Rule 92(3), that the applicant takes
to-
(i) Furnish a reply in FORM GST RFD-09, or
(ii) Submit additional documents or reply;
and
(b) Any period of time taken either by the applicant for
furnishing the correct details of the bank account to
which the refund is to be credited or for validating the
details of the bank account so furnished, where the amount of
refund sanctioned could not be credited to the bank account
furnished by the applicant.

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 Refund Ch.15.1

Rule 95: Refund of (1) Any person eligible to claim refund of tax paid by him on his inward
tax to certain supplies as per notification issued under section 55 shall apply for
persons refund in FORM GST RFD-10 once in every quarter, electronically on
the common portal or otherwise, either directly or through a
Facilitation Centre notified by the Commissioner, along with a
statement of the inward supplies of goods or services or both in
FORM GSTR-11.
(2) An acknowledgement for the receipt of the application for refund
shall be issued in FORM GST RFD-02.
(3) The refund of tax paid by the applicant shall be available if-
(a) The inward supplies of goods or services or both were received
from a registered person against a tax invoice.
(b) name and Goods and Services Tax Identification Number or
Unique Identity Number of the applicant is mentioned in the tax
invoice; and
(c) such other restrictions or conditions as may be specified in the
notification are satisfied.
“Provided that where
Ÿ UIN [Unique Identity Number] of the applicant is not mentioned in a tax
invoice,
Ÿ the refund of tax paid by the applicant on such invoice shall be available
Ÿ only if the copy of the invoice, duly attested by the authorized
representative of the applicant, is submitted along with the refund
application in FORM GST RFD-10.
(4) The provisions of rule 92 shall, mutatis mutandis, apply for the
sanction and payment of refund under this rule.
(5) Where an express provision in a treaty or other international
agreement, to which the President or the Government of India is a
party, is inconsistent with the provisions of this Chapter, such treaty or
international agreement shall prevail.

Rule 96: Refund of (1) The shipping bill filed by an exporter OF GOODS shall be deemed to
integrated tax paid be an application for refund of integrated tax paid on the goods
on goods OR exported out of India and such application shall be deemed to have
SERVICES exported been filed only when:-
out of India (a) The person in charge of the conveyance carrying the export
goods duly files a departure manifest or an export manifest or an
export report covering the number and the date of shipping bills
or bills of export; and
(b) the applicant has furnished a valid return in FORM GSTR-3B:
Provided that if there is any mismatch between the data
furnished by the exporter of goods in Shipping Bill and those
furnished in statement of outward supplies in FORM GSTR-1,
such application for refund of integrated tax paid on the goods
exported out of India shall be deemed to have been filed on such

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Ch.15.1 Refund

date when such mismatch in respect of the said shipping bill is

rectified by the exporter.
(b) The applicant has furnished a valid return in FORM GSTR-3 or
FORM GSTR-3B, as the case may be]
(c) The applicant has undergone Aadhaar authentication in the manner
provided in rule 10B.
(2) The details of the relevant export invoices in respect of export of
goods contained in FORM GSTR-1 shall be transmitted electronically
by the common portal to the system designated by the Customs and
the said system shall electronically transmit to the common portal, a
confirmation that the goods covered by the said invoices have been
exported out of India.
Provided that where the date for furnishing the details of outward
supplies in FORM GSTR-1 for a tax period has been extended in
exercise of the powers conferred under section 37 of the Act, the
supplier shall furnish the information relating to exports as specified
in Table 6A of FORM GSTR-1 after the return in FORM GSTR-3B has
been furnished and the same shall be transmitted electronically by the
common portal to the system designated by the Customs:
Provided further that the information in Table 6A furnished under the
first proviso shall be auto-drafted in FORM GSTR-1 for the said tax
period.
(3) Upon the receipt of the information regarding the furnishing of a valid
return in FORM GSTR-3B from the common portal, the system
designated by the Customs or the proper officer of Customs, as the
case may be, shall process the claim of refund in respect of export of
goods and an amount equal to the integrated tax paid in respect of
each shipping bill or bill of export shall be electronically credited to
the bank account of the applicant mentioned in his registration
particulars and as intimated to the Customs authorities.
(4) The claim for refund shall be withheld where,—
(a) a request has been received from the jurisdictional
Commissioner of central tax, State tax or Union territory tax to
withhold the payment of refund due to the person claiming
refund in accordance with the provisions of sub-section (10) or
sub-section (11) of section 54; or
(b) the proper officer of Customs determines that the goods were
exported in violation of the provisions of the Customs Act, 1962
OR
(c) the Commissioner in the Board or an officer authorised by the
Board, [the Principal Director General/Director General of
Directorate General of Analytics and Risk Management
(DGARM), CBIC, New Delhi], on the basis of data analysis and risk
parameters, is of the opinion that verification of credentials of
the exporter, including the availment of ITC by the exporter, is

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 Refund Ch.15.1

considered essential before grant of refund, in order to

safeguard the interest of revenue.
(5) Where refund is withheld in accordance with the provisions of clause
(a) of sub-rule (4), the proper officer of integrated tax at the Customs
station shall intimate the applicant and the jurisdictional
Commissioner of central tax, State tax or Union territory tax, as the
case may be, and a copy of such intimation shall be transmitted to the
common portal.
(5A) Where refund is withheld in accordance with the provisions sub-rule (4)
(a)(c),
Ü such claim shall be transmitted to the proper officer of Central tax,
State tax or Union territory tax, as the case may be, electronically
through the common portal in a system generated FORM GST RFD-
01 and
Ü the intimation of such transmission shall also be sent to the exporter
electronically through the common portal, and
Ü notwithstanding anything to the contrary contained in any other rule,
the said system generated form shall be deemed to be the
application for refund in such cases and shall be deemed to have
been filed on the date of such transmission.
(5B) Where refund is withheld in accordance with the provisions of sub-rule
(4)(b) and
§ the proper officer of the Customs passes an order that the goods have
been exported in violation of the provisions of the Customs Act, 1962
§ then, such claim shall be transmitted to the proper officer of Central
tax, State tax or Union territory tax, as the case may be, electronically
through the common portal in a system generated FORM GST RFD-01
and
§ the intimation of such transmission shall also be sent to the exporter
electronically through the common portal, and
§ notwithstanding anything to the contrary contained in any other rule,
the said system generated form shall be deemed to be the application
for refund in such cases and shall be deemed to have been filed on the
date of such transmission.

(5C) The application for refund in FORM GST RFD-01 transmitted

electronically through the common portal in terms of sub-rules (5A) and
(5B) shall be dealt in accordance with the provisions of rule 89.
(6) Upon transmission of the intimation under sub-rule (5), the proper
officer of central tax or State tax or Union territory tax, as the case may
be, shall pass an order in Part A of FORM GST RFD-07.
(7) Where the applicant becomes entitled to refund of the amount
withheld under clause (a) of sub-rule (4), the concerned jurisdictional
officer of central tax, State tax or Union territory tax, as the case may
be, shall proceed to refund the amount by passing an order in FORM GST
RFD-06 after passing an order for release of withheld refund in Part B of FORM
GST RFD-07.

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Ch.15.1 Refund

(8) The Central Government may pay refund of the integrated tax to the
Government of Bhutan on the exports to Bhutan for such class of
goods as may be notified in this behalf and where such refund is paid
to the Government of Bhutan, the exporter shall not be paid any
refund of the integrated tax.
(9) The application for refund of integrated tax paid on the services
exported out of India shall be filed in FORM GST RFD-01and shall be
dealt with in accordance with the provisions of rule 89.
(10) The persons claiming refund of integrated tax paid on exports of goods
or services should not have—
(a) received supplies on which the benefit of the Government of India,
Ministry of Finance notification No. 48/2017-Central Tax, except so
far it relates to receipt of capital goods by such person against Export
Promotion Capital Goods Scheme or has been availed; or
(b) availed the benefit under notification No. 78/2017-Customs, dated
the 13th October, 2017 or notification No. 79/2017-Customs,
except so far it relates to receipt of capital goods by such person
against Export Promotion Capital Goods Scheme.

Explanation: For the purpose of this sub-rule, the benefit of the notifications
mentioned therein shall not be considered to have been availed only where the
registered person has paid Integrated Goods and Services Tax and
Compensation Cess on inputs and has availed exemption of only Basic
Customs Duty (BCD) under the said notifications.

Rule 96A: Export of 1) Any registered person availing the option to supply goods or services
goods or services
for export without payment of integrated tax shall furnish, prior to
under bond or
Letter of export, a bond or a Letter of Undertaking in FORM GST RFD-11 to the
Undertaking jurisdictional Commissioner, binding himself to pay the tax due along
with the interest specified under sub-section (1) of section 50 within a
period of—
(a) 15 days after the expiry of three months or such further period as
may be allowed by the Commissioner, from the date of issue of
the invoice for export, if the goods are not exported out of India;
or

(b) 15 days after the expiry of one year, or such further period as may
be allowed by the Commissioner, from the date of issue of the
invoice for export, if the payment of such services is not received
by the exporter in convertible foreign exchange or in Indian
rupees, wherever permitted by the Reserve Bank of India.
2) The details of the export invoices contained in FORM GSTR-1
furnished on the common portal shall be electronically transmitted to
the system designated by Customs and a confirmation that the goods
covered by the said invoices have been exported out of India shall be

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 Refund Ch.15.1

Circular No. 197/09/2023

1. Refund of It is further clarified that as the said amendments in section 16(2)

accumulated input (aa) of CGST Act and Rule 36(4) of CGST Rules have been brought into
tax credit under effect from 01.01.2022, therefore, the said restriction on availability of
Section 54(3) on the refund of accumulated input tax credit for a tax period on the basis of the
basis of that credit available as per FORM GSTR-2B for the said tax period or for any of
available as per the previous tax periods, shall be applicable for the refund claims for the tax
FORM GSTR 2B period of January 2022 onwards.
However, in cases where refund claims for a tax period from January 2022
onwards has already been disposed of by the proper officer before the
issuance of this circular, in accordance with the extant guidelines in force,
the same shall not be reopened because of the clarification being issued by
this circular.

2. Manner of it is clarified that consequent to Explanation having been inserted in

calculation of Rule 89(4), the value of goods exported out of India to be included
Adjusted Total while calculating “adjusted total turnover” will be same as being
Turnover under sub- determined as per the Explanation inserted in the said sub-rule.
rule (4) of Rule 89 of
CGST Rules
consequent to
Explanation inserted
in sub-rule (4) of
Rule 89

3. Clarification in The above clarifications imply that as long as goods are actually
respect of exported or as the case may be, payment is realized in case of export of
admissibility of services, even if it is beyond the time frames as prescribed in Rule
refund where an 96A(1), the benefit of zero-rated supplies cannot be denied to the
exporter applies for
concerned exporters. Accordingly, it is clarified that in such cases, on
refund subsequent
actual export of the goods or as the case may be, on realization of
to compliance of the
payment in case of export of services, the said exporters would be
provisions of Rule
96A(1) entitled to refund of unutilized input tax credit in terms of section
54(3) of the CGST Act, if otherwise admissible.
It is also clarified that in such cases subsequent to export of the goods or
realization of payment in case of export of services, as the case may be,
the said exporters would be entitled to claim refund of the integrated
tax so paid earlier on account of goods not being exported, or as the
case be, the payment not being realized for export of services, within the
time frame prescribed in clause (a) or (b), as the case may be, of Rule
96A(1). It is further being clarified that no refund of the interest paid in
compliance of Rule 96A(1) shall be admissible.
It may further be noted that the refund application in the said scenario
may be made under the category “Excess payment of tax”. However, till

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Ch.15.1 Refund

the time the refund application cannot be filed under the category
“Excess payment of tax” due to non-availability of the facility on the
portal to file refund of IGST paid in compliance with the provisions
of Rule 96A(1) of CGST Rules as “Excess payment of tax”, the applicant
may file the refund application under the category “Any Other” on the
portal.

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 Chap. 16: Assessment
PYAAR
ASSESSMENT
1. Assessment KYA HOTA HAI ?: Determination of tax liability as per law

It Includes: Iaf Self- assessment (Section 59)

Provisional Assessment (Section 60)
Re- assessment (Section 61)
Non filer (Section: 62)
Best – Judgement assessment
Non registrant (63)
Summary/Quick assessment (Section 64) BJ
2. Assessment KAB HOTA HAI ?: At the “TIME OF SUPPLY” (Section 12,13,14)
3. Assessment KAISE HOTA HAI?: GST = AV× ROT * (ROE if any) (Under Section 15 plus Valuation Rules)
e

0
4. Assessment KYON HOTA HAI?: To Know the amount of GST/CESS
5. Assessment KAUN KARTA HAI?: - Assessee Himself
- Department Officer
Section 59: SELF ASSESSMENT
Every Registered person (Section 22/24) Mandatory
01101404T
+
Shall Self assess the tax liability
+
31
And accordingly file valid return (Under Section 39): GSTR – 3/4/5/6/7 etc.
SECTION 61 RE-ASSESSMENT OR SCRUTINY

Tax paid & return filed (Under Section 39)

GST Officer may – Scrutinized the same Prinanface

Intimate discrepancies by notice

Assessee reply (30 days) + Extension

Satisfied - OK
Officer
Not Satisfied – Then GST Officer will take further action
Audit 1015 65
Special Audit Ms 66
Investigation 40167
SCN/DO etc. 73174
CA Rajkumar
Chap. 16: Assessment

BEST JUDGEMENT Can be done without SCN Under

Section 73/74

Section 62 Section 63
In Case of Non Filer Non Registrant

Non filling of return RC – Not Obtained

Under Section 39/45 or
E
Notice related to return
RC – Taken but surrendered/cancelled

Under Section 46 e
d hindice As of now status is Non -Registered

Still return not filed Best Judgement

Within 5 year from D/D of annual Return
Best Judgement STR 1 2B Ewbillwendorfcustomer
(Time Limit – 5 Years from D/D of annual return)
NOseparatenotice shall be Opportunity of being heard.
green for B 5
Now further action of the person

Return file & All Still not filed

in 60 days 6months- No return CANCELLATION of RC
60M
(Interest and late fee
Still payable) de withdoom ft
Note: Summary thereof shall be uploaded electronically.

Provided that
 Where the registered person fails to furnish a valid return within 60
days of the service of the assessment order
 he may furnish the same within a further period of 60 days on
payment of an additional late fee of Rs 100 for each day of delay
beyond 60 days of the service of the said assessment order and
 in case he furnishes valid return within such extended period,
 the said assessment order shall be deemed to have been withdrawn,
 but the liability to pay interest under section 50(1) or to pay late fee
62
under section 47 shall continue. W
1EIalefee
ate B s
resents is IIffa.Iequatffffff
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 Chap. 19: Demand and Recovery

GST Liability u/s 73/74: Rs. 10 Lakh

Interest (Automatic): u/s 50 xxx
Penalty u/s : 73/74: xxx

19 Demand and Recovery

BONAFIDE CASES MALAFIDE CASES

Reasons of SCN-
Voluntarily Pay before TAX not paid/Short-Paid/Erroneous Refund
issuance of SCN on the 0---------------0 ITC Wrongly Availed/Utilised
basis of self -calculation (Audit/Special Audit May or May Not be)
or intimation by
department which is
Voluntarily Payment
discretionary by Depatt. OFFER : 1 OFFER : 1

(PAY TAX + INTEREST) PAY TAX + INTEREST + 15% Penalty

Time of SCN 3/6 Months in advance of D/O
IN FULL & IN PART& IN PART IN FULL
inform to PO inform to PO
For Balance For Balance
No SCN No SCN
No Penalty SCN / Supplementary SCN (An statement for subsequent Period if
same ground are there) [TAX+INT+
PENALTY (10% or ` 10,000 For Bona fide] (100% For Fraud )

Within 30 Days within 30 Days of SCN OFFER: 2

OFFER: 2

(TAX + INTEREST) PAY: TAX + INTEREST

* No Penalty Demand Order +PENALTY25%
(Tax + Penalty +
* CASE Close. (Not exceed Amount
Interest)
Specified in SCN) CASE Close
Time Limit of: Demand Order: With in
3/5 year of DD of filing of Annual Return, Within 30 Days
within 3/5 year of: Date of Erroneous Refund, OFFER:3
Within 2 years in referred back cases, Otherwise
proceedings shall be deemed to be concluded. PAY: TAX + INT. + 50%
Penalty (CASE Close)
File an Appeal to First Appellate Authority, Neither to pay nor File an appeal – now recovery
Pay off the demand and Relaxed
GST AT- HIGH COURT SUPREME COURT Proceedings shall be initiated with in 3 months

CA Rajkumar
Chap. 19: Demand and Recovery

CGST Rules, 2017

Rule 142: Notice and order for demand of amounts payable under the Act
(1) The proper officer shall serve, along with the
(a) Notice issued under section 52 or section 73 or section 74 or section 76 or section 122 or section 123 or section
124 or section 125 or section 127 or section 129 or section 130, a summary thereof electronically in FORM GST DRC-
01,
(b) Statement under sub-section (3) of section 73 or sub-section (3) of section 74, a summary thereof electronically in
FORM GST DRC-02, specifying therein the details of the amount payable.
(1A) The proper officer MAY
- before service of notice to the person chargeable with tax, interest and penalty,
- under Section 73(1) or Section 74(2), as the case may be, communicate the details of any tax, interest and
penalty as ascertained by the said officer,
- in Part A of FORM GST DRC-01A.
(2) Where, before the service of notice or statement, the person chargeable with tax makes payment of the tax and
interest in accordance with the provisions of sub-section (5) of section 73 or, as the case may be, tax, interest and
penalty in accordance with the provisions of sub-section (5) of section 74, or where any person makes payment of
tax, interest, penalty or any other amount due in accordance with the provisions of the Act [whether on his own
ascertainment or, as communicated by the proper officer under sub-rule (1A),] he shall inform the proper officer of
such payment in FORM GST DRC-03 and the proper officer shall issue an acknowledgement, accepting the payment
made by the said person in FORM GST DRC–04.
(2A) Where the person referred to in sub-rule (1A) has made partial payment of the amount communicated to him or
desires to file any submissions against the proposed liability, he may make such submission in Part B of FORM GST
DRC-01A.]
(3) Where the person chargeable with tax makes payment of tax and interest under sub-section (8) of section 73 or,
as the case may be, tax, interest and penalty under sub-section (8) of section 74 within thirty days of the service of a
notice under sub-rule (1), or where the person concerned makes payment of the amount referred to in sub-section
(1) of section 129 within “7 days of the notice issued under Section 129(3) but before the issuance of order under the
said sub-section (3) he shall intimate the proper officer of such payment in FORM GST DRC-03 and the proper officer
shall issue an intimation order in FORM GST DRC-05 concluding the proceedings in respect of the said notice.
Ieee
(4) The representation referred to in sub-section (9) of section 73 or sub-section (9) of section 74 or sub-section (3) of
section 76 or the reply to any notice issued under any section whose summary has been uploaded electronically in
FORM GST DRC-01 under sub-rule (1) shall be furnished in FORM GST DRC-06.
(5) A summary of the order issued under section 52 or section 62 or section 63 or section 64 or section 73 or section
74 or section 75 or section 76 or section 122 or section 123 or section 124 or section 125 or section 127 or section
129 or section 130 shall be uploaded electronically in FORM GST DRC-07, specifying therein the amount of tax,
interest and penalty as the case may be, payable by the person concerned. payable by the person chargeable with
tax.
(6) The order referred to in sub-rule (5) shall be treated as the notice for recovery.
(7) Where a rectification of the order has been passed in accordance with the provisions of section 161 or where an
order uploaded on the system has been withdrawn, a summary of the rectification order or of the withdrawal order
shall be uploaded electronically by the proper officer in FORM GST DRC-08.]

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 Chap. 19: Demand and Recovery

Rule 142B: Intimation of certain amounts liable to be recovered under section 79 of the
Act.-
(1) Where, in accordance with section 75 read with rule 88C, or otherwise, any amount of tax or interest has become
recoverable under section 79 and the same has remained unpaid, the proper officer shall intimate, electronically on
the common portal, the details of the said amount in FORM GST DRC-01D, directing the person in default to pay the
said amount, along with applicable interest, or, as the case may the amount of interest, within seven days of the date
of the said intimation and the said amount shall be posted in Part-II of Electronic Liability Register in FORM GST PMT-
01.
(2) The intimation referred to in sub-rule (1) shall be treated as the notice for recovery.
(3) Where any amount of tax or interest specified in the intimation referred to in sub-rule (1) remains unpaid on the
expiry of the period specified in the said intimation, the proper officer shall proceed to recover the amount that
remains unpaid in accordance with the provisions of rule 143 or rule 144 or rule 145 or rule 146 or rule 147 or rule
155 or rule 156 or rule 157 or rule 160.

Rule 143: Recovery by deduction from any money owed

Where any amount payable by a person (hereafter referred to in this rule as “the defaulter”) to the Government
under any of the provisions of the Act or the rules made thereunder is not paid, the proper officer may require, in
FORM GST DRC-09, a specified officer to deduct the amount from any money owing to such defaulter in accordance
with the provisions of clause (a) of sub-section (1) of section 79.
Explanation.-For the purposes of this rule, “specified officer” shall mean any officer of the Central Government or a
State Government or the Government of a Union territory or a local authority, or of a Board or Corporation or a
company owned or controlled, wholly or partly, by the Central Government or a State Government or the
Government of a Union territory or a local authority.

Rule 144: Recovery by sale of goods under the control of proper officer
(1) Where any amount due from a defaulter is to be recovered by selling goods belonging to such person in
accordance with the provisions of clause
(b) of sub-section (1) of section 79, the proper officer shall prepare an inventory and estimate the market value of
such goods and proceed to sell only so much of the goods as may be required for recovering the amount payable
along with the administrative expenditure incurred on the recovery process.
(2) The said goods shall be sold through a process of auction, including e-auction, for which a notice shall be issued in
FORM GST DRC-10 clearly indicating the goods to be sold and the purpose of sale.
(3) The last day for submission of bid or the date of auction shall not be earlier than fifteen days from the date of
issue of the notice referred to in sub-rule (2):
Provided that where the goods are of perishable or hazardous nature or where the expenses of keeping them in
custody are likely to exceed their value, the proper officer may sell them forthwith.
(4) The proper officer may specify the amount of pre-bid deposit to be furnished in the manner specified by such
officer, to make the bidders eligible to participate in the auction, which may be returned to the unsuccessful bidders,
forfeited in case the successful bidder fails to make the payment of the full amount, as the case may be.
(5) The proper officer shall issue a notice to the successful bidder in FORM GST DRC-11 requiring him to make the
payment within a period of fifteen days from the date of auction. On payment of the full bid amount, the proper
officer shall transfer the possession of the said goods to the successful bidder and issue a certificate in FORM GST
DRC-12.

CA Rajkumar
 Chap. 19: Demand and Recovery

Rule 159: Provisional attachment of property

(1) Where the Commissioner decides to attach any property, including bank account in accordance with the
provisions of section 83, he shall pass an order in FORM GST DRC-22 to that effect mentioning therein, the details of
property which is attached.
(2) The Commissioner shall send a copy of the order of attachment in FORM GST DRC-22 to the concerned Revenue
Authority or Transport Authority or any such Authority to place encumbrance on the said movable or immovable
property, which shall be removed only on the written instructions from the Commissioner to that effect or on expiry
of a period of one year from the date of issuance of order under sub-rule (1), whichever is earlier,” and a copy of such
order shall also be sent to the person whose property is being attached under section 83.
(3) Where the property attached is of perishable or hazardous nature, and if the person, whose property has been
attached pays an amount equivalent to the market price of such property or the amount that is or may become
payable by such person, whichever is lower, then such property shall be released forthwith, by an order in FORM GST
DRC-23, on proof of payment.
(4) Where such person fails to pay the amount referred to in sub-rule (3) in respect of the said property of perishable
or hazardous nature, the Commissioner may dispose of such property and the amount realized thereby shall be
adjusted against the tax, interest, penalty, fee or any other amount payable by such person.
(5) Any person whose property is attached may, file an objection in FORM GST DRC-22A to the effect that the
property attached was or is not liable to attachment, and the Commissioner may, after affording an opportunity of
being heard to the person filing the objection, release the said property by an order in FORM GST DRC-23.
(6) The Commissioner may, upon being satisfied that the property was, or is no longer liable for attachment, release
such property by issuing an order in FORM GST DRC-23.

Rule 152: Recovery from company in liquidation

Where the company is under liquidation as specified in section 88, the Commissioner shall notify the liquidator for
the recovery of any amount representing tax, interest, penalty or any other amount due under the Act in FORM GST
DRC -24.

Rule 152: Continuation of certain recovery proceedings

The order for the reduction or enhancement of any demand under section 84 shall be issued in FORM GST DRC- 25.

CA Rajkumar
Chap. 20: Penalties

20 Penalties

OFFENCE
SECTIONS LIST

Civil Proceedings Criminal Proceedings

Civil Liabilities Criminal Liabilities

9
Penalties Seizure & Confiscation of Goods in JAIL and
Transit & Conveyance Jurmana

Section 122: Main Section

for Penalties
9 Section : 129 Seizure (Goods and Conveyance) 9
Section : 130 Confiscation (Goods and Conyeyance)

Section : 123 –Penalty Related

9
to information Return Section: Section : 131 Civil & Criminal Liabilities are
124 – Penalty Related Independent.
9 9
to Statistics
Section: 125 - General Penalty
9
Section9: 132 – Criminal Offences and
RELAX…… Punishment
Section: 133 - Not Relevant
Section : 126 – Mitigation of Penalty Section : 134 – Previous Approval
Section : 127 – Only Penalty can be Imposed 9 : 135 – Mental State
Section
Section : 128 – Waiver of Penalty Section : 136 - not relevant
9 Section : 137 – Offence by Companies
Section : 138- Compounding of Offences

CA Rajkumar
Chap. 20: Penalties

Legal Text
Section 122: Penalty for certain offences
Nature of (1) Where a taxable person who––
offences and (i) supplies any goods or services or both without issue of any invoice or issues an incorrect or
penalties false invoice with regard to any such supply;
thereof
(ii) issues any invoice or bill without supply of goods or services or both in violation of the
provisions of this Act or the rules made thereunder;
(iii) collects any amount as tax but fails to pay the same to the Government beyond a period of 3
months from the date on which such payment becomes due;
(iv) collects any tax in contravention of the provisions of this Act but fails to pay the same to the
Government beyond a period of 3 months from the date on which such payment becomes due;
(v) fails to deduct the tax in accordance with the provisions of section 51(1), or deducts an
amount which is less than the amount required to be deducted under the said sub-section, or
where he fails to pay to the Government under sub-section (2) thereof, the amount deducted as
tax;
(vi) fails to collect tax in accordance with the provisions of section 52(1), or collects an amount
which is less than the amount required to be collected under the said sub-section or where he
fails to pay to the Government the amount collected as tax under sub-section (3) of section 52;
(vii) takes or utilises input tax credit without actual receipt of goods or services or both either fully
or partially, in contravention of the provisions of this Act or the rules made thereunder;
(viii) fraudulently obtains refund of tax under this Act;
(ix) takes or distributes input tax credit in contravention of section 20, or the rules made
thereunder;
(x) falsifies or substitutes financial records or produces fake accounts or documents or furnishes
any false information or return with an intention to evade payment of tax due under this Act;
(xi) is liable to be registered under this Act but fails to obtain registration;
(xii) furnishes any false information with regard to registration particulars, either at the time of
applying for registration, or subsequently;
(xiii) obstructs or prevents any officer in discharge of his duties under this Act;
(xiv) transports any taxable goods without the cover of documents as may be specified in this
behalf;
(xv) suppresses his turnover leading to evasion of tax under this Act;
(xvi) fails to keep,maintain or retain books of account and other documents in accordance with
the provisions of this Act or the rules made thereunder;
(xvii) fails to furnish information or documents called for by an officer in accordance with the
provisions of this Act or the rules made thereunder or furnishes false information or documents
during any proceedings under this Act;

CA Rajkumar
 Chap. 20: Penalties

(xviii) supplies, transports or stores any goods which he has reasons to believe are liable to
confiscation under this Act;
(xix) issues any invoice or document by using the registration number of another registered
person;
(xx) tampers with, or destroys any material evidence or document;
(xxi) disposes off or tampers with any goods that have been detained, seized, or attached under
this Act,
he shall be liable to pay a penalty of `10,000 or an amount equivalent to the tax evaded or the
tax not deducted under section 51 or short deducted or deducted but not paid to the
Government or tax not collected under section 52 or short collected or collected but not paid to
the Government or input tax credit availed of or passed on or distributed irregularly, or the
refund claimed fraudulently, whichever is higher.
(1A) Any person
- Who retains the benefit of a transaction covered under clauses [Subsection (1)]
- (i) [Supply without Invoice]
- (ii) [Invoice without Supply]
- (vii) [ITC without taking Supply]
- (ix) [Wrong distribution of ITC by ISD]
- at whose instance such transaction is conducted,
- shall be liable to a penalty
- of an amount Equivalent to the tax evaded or
- input tax credit availed of or passed on.
(1B) Any electronic commerce operator who—
(i) Allows a supply of goods or services or both through it by an unregistered person other than a
person exempted from registration by a notification issued under this Act to make such supply;
(ii) Allows an inter-State supply of goods or services or both through it by a person who is not
eligible to make such inter-State supply; or
(iii) fails to furnish the correct details in the statement to be furnished under section 52(4) of any
outward supply of goods effected through it by a person exempted from obtaining registration
under this Act,
shall be liable to pay a penalty of Rs 10,000, OR an amount equivalent to the amount of tax
involved had such supply been made by a registered person other than a person paying tax under
section 10, whichever is higher.

Specific penalty (2) Any registered person who supplies any goods or services or both on which:
(` 10,000 or  any tax has not been paid or short-paid or erroneously refunded, or
10/100%)  where the input tax credit has been wrongly availed or utilised,-
whichever is
higher

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Chap. 20: Penalties

(a) for any reason, other than the reason of fraud or any wilful misstatement or suppression of
facts to evade tax, shall be liable to a penalty of ` 10,000 or 10% of the tax due from such
person, whichever is higher;
(b) for reason of fraud or any wilful misstatement or suppression of facts to evade tax, shall be
liable to a penalty equal to ` 10,000 or the tax due (ie 100% of tax) from such person, whichever is
higher.

Penalty for (3) Any person who––

Secondary (a) aids or abets any of the offences specified in clauses (i) to (xxi) of sub-section (1);
party
(b) acquires possession of, or in any way concerns himself in transporting, removing, depositing,
(up to ` 25,000) keeping, concealing, supplying, or purchasing or in any other manner deals with any goods
which he knows or has reasons to believe are liable to confiscation under this Act or the rules
made thereunder;
(c) receives or is in any way concerned with the supply of, or in any other manner deals with
any supply of services which he knows or has reasons to believe are in contravention of any
provisions of this Act or the rules made thereunder;
(d) fails to appear before the officer of central tax, when issued with a summon for appearance
to give evidence or produce a document in an inquiry;
(e) fails to issue invoice in accordance with the provisions of this Act or the rules made
thereunder or fails to account for an invoice in his books of account,
shall be liable to a penalty which may extend to ` 25,000

Section 123: Penalty for failure to furnish information

return
If a person who is required to furnish an information return under section 150 fails to do so within the period specified
in the notice issued under sub-section (3) thereof, the proper officer may direct that such person shall be liable to pay a
penalty of ` 100 for each day of the period during which the failure to furnish such return continues:
Provided that the penalty imposed under this section shall not exceed ` 5000

Section 124: Fine for failure to furnish statistics

If any person required to furnish any information or return under section 151,-
(a) Without reasonable cause fails to furnish such information or return as may be required under that section, or
(b) Wilfully furnishes or causes to furnish any information or return which he knows to be false,
he shall be punishable with a fine which may extend to ` 10,000 and in case of a continuing offence to a further fine
which may extend to ` 100 for each day after the first day during which the offence continues subject to a maximum
limit of ` 25,000

CA Rajkumar
Chap. 20: Penalties

Section 131: Confiscation or penalty not to interfere with

other punishments
Without prejudice to the provisions contained in the Code of Criminal Procedure, 1973,
 no confiscation made or penalty imposed under the provisions of this Act or the rules made thereunder
 shall prevent the infliction of any other punishment
 to which the person affected thereby is liable under the provisions of this Act or under any other law.

PUNISHMENT
Section 132: Punishment for certain offences
Circumstances for (1) Whoever commits or causes to commit and retain the benefits arising out of, any of the
punishment and following offences, namely:-
punishment (a) supplies any goods or services or both without issue of any invoice, in violation of the
thereof provisions of this Act or the rules made thereunder, with the intention to evade tax;
(b) issues any invoice or bill without supply of goods or services or both in violation of the
provisions of this Act, or the rules made thereunder leading to wrongful availment or
utilisation of input tax credit or refund of tax;
(c) avails input tax credit using the invoice or bill referred to in clause (b) or fraudulently
avails input tax credit without any invoice or bill;
(c) avails input tax credit using such invoice or bill referred to in clause (b);
(d) collects any amount as tax but fails to pay the same to the Government beyond a period
of 3 months from the date on which such payment becomes due;
(e) evades tax, fraudulently avails input tax credit or fraudulently obtains refund and where
such offence is not covered under clauses (a) to (d);
(f) falsifies or substitutes financial records or produces fake accounts or documents or
furnishes any false information with an intention to evade payment of tax due under this
Act;
(g) obstructs or prevents any officer in the discharge of his duties under this Act;
(h) acquires possession of, or in any way concerns himself in transporting, removing,
depositing, keeping, concealing, supplying, or purchasing or in any other manner deals
with, any goods which he knows or has reasons to believe are liable to confiscation under
this Act or the rules made thereunder;
(i) receives or is in any way concerned with the supply of, or in any other manner deals with
any supply of services which he knows or has reasons to believe are in contravention of
any provisions of this Act or the rules made thereunder;
(j) tampers with or destroys any material evidence or documents;
(k) fails to supply any information which he is required to supply under this Act or the rules
made thereunder or (unless with a reasonable belief, the burden of proving which shall be
upon him, that the information supplied by him is true) supplies false information; or

CA Rajkumar
 Chap. 20: Penalties

(l) attempts to commit, or abets the commission of any of the offenses mentioned in clauses
(a) to (f) and clauses (h) and (i) clauses (a) to (k) of this section,
shall be punishable––
(i) In cases where the amount of tax evaded or the amount of input tax credit wrongly
availed or utilised or the amount of refund wrongly taken exceeds ` 5 crore, with
imprisonment for a term which may extend to five years and with fine;
(ii) In cases where the amount of tax evaded or the amount of input tax credit wrongly
availed or utilised or the amount of refund wrongly taken exceeds ` 2 crore, but does not
exceed
` 5 crore,, with imprisonment for a term which may extend to 3 years and with fine;
(iii) in the case of "an offence specified in clause (b), any other offence where the amount of
tax evaded or the amount of input tax credit wrongly availed or utilised or the amount of
refund wrongly taken exceeds ` 1 crore, but does not exceed ` 2 crore,, with
imprisonment for a term which may extend to one year and with fine;
(iv) in cases where he commits or abets the commission of an offence specified in clause (f) or
clause (g) or clause (j), he shall be punishable with imprisonment for a term which may
extend to 6 months or with fine or with both.

Subsequent time (2) Where any person

offence  convicted of an offence under this section is again convicted of an offence under this
[imprisonment section,
may extend upto 5
yesrs with fine]  then, he shall be punishable for the second and for every subsequent offence
 with imprisonment for a term which may extend to five years and with fine.

Minimum (3) The imprisonment referred to in sub-section (1)(i)(ii)(iii) and sub-section (2)
imprisonment 6  shall, in the absence of special and adequate reasons
months except in
special cases as  to the contrary to be recorded in the judgment of the Court,
considered by  be for a term not less than 6 months.
court

Offences will be in (4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,
nature of NON  all offences under this Act,
COGNIZABLE AND
BAILABLE  except the offences referred to in sub-section (5)
 shall be non-cognizable and bailable.

Certain offences (5) The offences

will be in nature of  specified in sub-section (1)(a)(b)(c)(d) and
COGNIZABLE AND
NON BAILABLE  punishable under clause (i) of that sub-section
 shall be cognizable and non-bailable.

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Chap. 20: Penalties

Prior approval (6) A person shall not be prosecuted for any offence under this section except with the
mandatory for previous sanction of the Commissioner.
prosecution

Section 133: Liability of officers and certain other persons

Punishment for certain (1) Where any person:
offences  Engaged in connection with the collection of statistics under section 151 or
 compilation or computerization thereof or if any officer of central tax having
access to information specified under section 150(1), or
 if any person engaged in connection with the provision of service on the
common portal or the agent of common portal, wilfully discloses any
information or the contents of any return furnished under this Act or rules
made thereunder otherwise than in execution of his duties under the said
sections or for the purposes of prosecution for an offence under this Act or
under any other Act for the time being in force,
he shall be punishable with imprisonment for a term which may extend to six months
or with fine which may extend to ` 25,000 or with both.

Prior sanction of (2) Any person—

Government/commissioner (a) Who is a Government servant shall not be prosecuted for any offence under this
for punishment to a person section except with the previous sanction of the Government;
(b) Who is not a Government servant shall not be prosecuted for any offence under
this section except with the previous sanction of the Commissioner.

Section 134: Cognizance of offences

No court shall take cognizance of any offence punishable under this Act or the rules made thereunder except with the
previous sanction of the Commissioner, and no court inferior to that of a Magistrate of the First Class, shall try any such
offence.

Section: 135 Presumption of culpable Mental State

In any prosecution for an offence under this Act which requires a culpable mental state on the part of the accused, the
court shall presume the existence of such mental state but it shall be a defence for the accused to prove the fact that he
had no such mental state with respect to the act charged as an offence in that prosecution.
Explanation.-For the purposes of this section,––
(i) The expression “culpable mental state” includes intention, motive, knowledge of a fact, and belief
in, or reason to believe, a fact;

CA Rajkumar
Chap. 20: Penalties

guilty  shall be deemed to be guilty of that offence and

 shall be liable to be proceeded against and punished accordingly and
 the provisions of sub-section (2) shall, mutatis mutandis, apply to such persons.

Prove innocent (4) Nothing contained in this section

 shall render any such person liable to any punishment provided in this Act,
 if he proves that the offence was committed without his knowledge or that he had
exercised all due diligence to prevent the commission of such offence.
Explanation:For the purposes of this section,––
(i) “Company” means a body corporate and includes a firm or other association of individuals;
and
(ii) “Director”, in relation to a firm, means a partner in the firm.

Section 138: Compounding of offences

Compounding by (1) Any offence under this Act may, either before or after the institution of prosecution, be
commissioner compounded by the Commissioner on payment, by the person accused of the offence, to the
Central Government or the State Government, as the case be, of such compounding amount
in such manner as may be prescribed:
Provided that nothing contained in this section shall apply to—
(a) a person who has been allowed to compound once in respect of any of the offences
specified in clauses (a) to (f), (h), (i) and (l) of sub-section (1) of section 132.
(a) a person who has been allowed to compound once in respect of any of the offences
specified in clauses (a) to (f) of sub-section (1) of section 132 and the offences specified in
clause (l) which are relatable to offences specified in clauses (a) to (f) of the said sub-
section;
(b) a person who has been allowed to compound once in respect of any offence, other than
those in clause (a), under this Act or under the provisions of any State Goods and Services
Tax Act or the Union Territory Goods and Services Tax Act or the Integrated Goods and
Services Tax Act in respect of supplies of value exceeding one crore rupees;
(c) a person who has been accused of committing an offence under clause (b) of sub-section
(1) of section 132;
(c) a person who has been accused of committing an offence under this Act which is also an
offence under any other law for the time being in force;
(d) a person who has been convicted for an offence under this Act by a court;
(e) a person who has been accused of committing an offence specified in clause (g) or clause
(j) or clause (k) of sub-section (1) of section 132; and
(f) any other class of persons or offences as may be prescribed:

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 Chap. 20: Penalties

Provided further that any compounding allowed under the provisions of this section shall not
affect the proceedings, if any, instituted under any other law:
Provided also that compounding shall be allowed only after making payment of tax, interest
and penalty involved in such offences.

Compounding The amount for compounding of offences under this section shall be such as may be
amount prescribed, subject to the minimum amount not being less than 25% of the tax involved and
the maximum amount not being more than 100% of the tax involved. ` 10,000 or 50% of the
tax involved, whichever is higher, and the maximum amount not being less than `30,000 or
150% of the tax, whichever is higher.

Pay amount and (3) On payment of such compounding amount as may be determined by the Commissioner,
Relax no further proceedings shall be initiated under this Act against the accused person in respect
of the same offence and any criminal proceedings, if already initiated in respect of the said
offence, shall stand abated.

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Chap. 20: Penalties

CGST RULES, 2017

Section 162: Procedure for compounding of offences
(1) An applicant may, either before or after the institution of prosecution, make an application under sub-section (1)
of section 138 in FORM GST CPD-01 to the Commissioner for compounding of an offence.
(2) On receipt of the application, the Commissioner shall call for a report from the concerned officer with reference
to the particulars furnished in the application, or any other information, which may be considered relevant for the
examination of such application.
(3) The Commissioner, after taking into account the contents of the said application, may, by order in FORM GST
CPD-02, on being satisfied that the applicant has co-operated in the proceedings before him and has made full and
true disclosure of facts relating to the case, allow the application indicating the compounding amount and grant him
immunity from prosecution or reject such application within ninety days of the receipt of the application.
(3A) The Commissioner shall determine the compounding amount under sub-rule (3) which is follows-

S. Offence Compounding amount if Compounding amount if offence is

No. offence is punishable under punishable under of section
section 132(1)(i) 132(1)(ii)

1 Offence specified in section 132(1)(a) Up to 75% of the amount of tax Up to 60% of the amount of tax
of the Act evaded or the amount of ITC evaded or the amount of ITC wrongly
wrongly availed or utilised or the availed or utilised or the amount of
2 Offence specified in section 132 (1)(c) amount of refund wrongly refund wrongly taken,
of the Act taken, subject to minimum of 40% of such
3 Offence specified in section 132(1)(d) subject to minimum of 50% of amount of tax evaded or the amount
of the Act such amount of tax evaded or of ITC wrongly availed or utilised or
the amount of ITC wrongly the amount of refund wrongly taken.
4 Offence specified in section 132(1)(e) availed or utilised or the amount
of the Act of refund wrongly taken.

5 Offence specified in section 132(1)(f) Amount equivalent to 25% of tax Amount equivalent to 25% of tax
of the Act evaded. evaded.

6 Offence specified in clause (h) of sub-

section (1) of section 132 of the Act

7 Offence specified in section 132(1)(i)

of the Act

8 Attempt to commit the offences or Amount equivalent to 25% of Amount equivalent to 25% of such
abets the commission of offences such amount of tax evaded or amount of tax evaded or the amount
mentioned in section 132(1)(a), (c) to the amount of ITC wrongly of ITC wrongly availed or utilised or
(f) and (h) and (I) of the Act availed or utilised or the amount the amount of refund wrongly
of refund wrongly taken. taken.

Provided that where the offence committed by the person falls under more than one category specified in the Table
above, the compounding amount, in such case, shall be the amount determined for the offence for which higher
compounding amount has been prescribed.

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 Chap. 20: Penalties

(4) The application shall not be decided under sub-rule (3) without affording an opportunity of being heard to the
applicant and recording the grounds of such rejection.
(5) The application shall not be allowed unless the tax, interest and penalty liable to be paid have been paid in the
case for which the application has been made.
(6) The applicant shall, within a period of thirty days from the date of the receipt of the order under sub-rule (3), pay
the compounding amount as ordered by the Commissioner and shall furnish the proof of such payment to him.
(7) In case the applicant fails to pay the compounding amount within the time specified in sub-rule
(6), the order made under sub-rule (3) shall be vitiated and be void.
(8) Immunity granted to a person under sub-rule (3) may, at any time, be withdrawn by the Commissioner, if he is
satisfied that such person had, in the course of the compounding proceedings, concealed any material particulars or
had given false evidence. Thereupon such person may be tried for the offence with respect to which immunity was
granted or for any other offence that appears to have been committed by him in connection with the compounding
proceedings and the provisions the Act shall apply as if no such immunity had been granted.

Rule:163. Consent based sharing of information.-

(1) Where a registered person opts to share the information furnished in—
(a) FORM GST REG-01 as amended from time to time;
(b) Return in FORM GSTR-3B for certain tax periods;
(c) FORM GSTR-1 for certain tax periods, pertaining to invoices, debit notes and credit notes issued by him, as
amended from time to time,
with a system referred to in section 158A(1) the requesting system shall obtain the consent of the said registered
person for sharing of such information and shall communicate the consent along with the details of the tax periods,
where applicable, to the common portal.
(2) The registered person shall give his consent for sharing of information under sub-rule (1)(C) only after he has
obtained the consent of all the recipients, to whom he has issued the invoice, credit notes and debit notes during the
said tax periods, for sharing such information with the requesting system and where he provides his consent, the
consent of such recipients shall be deemed to have been obtained.
(3) The common portal shall communicate the information referred to in sub-rule (1) with the requesting system on
receipt from the said system-
(a) the consent of the said registered person, and
(b) the details of the tax periods or the recipients, as the case may be, in respect of which the information is required.

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Chap. 21: Appeals

21 Appeals
Supreme
Court
* IF H.C. certify to go to SC
Court
* Govt. dues to be paid first Mandatory route

HIGH
COURT
* IF Substantial Question of Law-Involve.
* Within 180 Days + Extension with fee.
* HC shall decide the question of law so formulated.
* Heard By 2 or more Judges.
* Judgement on the Basis of majority – then Refer it
to one or more other judges & check MAJORITY.
* Govt. dues to be paid First.

APPELLATE TRIBUNAL * Power & function Exercise & Discharge by NATIONAL

(Constituted by Central Government) President/STATE President.
State Benches * Decision will be Based on Majority of same Bench – IF not
Then Refer it.
* Proceeding=Judicial proceeding (Civil Court).
*Power to refuse cases upto ` 50,000 [Small cases]
Principal Bench * Rectify mistake apparent from the Records within 3 months.

Note: Any of the Party may file memo

Of Cross objection – within 45 days + EXT
Department Appeal
Review by
*Additional Pre-deposit 20% of OIA)
*And self-admitted dues @ 100 % Committee
[ Max. ` 50Cr ]
Time: 3M +3M Time: 6 Months

Order (but not refer back)

Pre deposit by Assessee APPELLATE Authority Revisional Authority
*Self-admitted dues @ 100%  Com (A)  Pri. Com. /Com.
Adjudicating *Disputed TAX ka @ 10% of OIO  JC (A)  JC/ Add COM.
Max. Rs 25 cr
Authority Appeal:3M+1M
(OIO) Depart. Appeal: 6M +1M After 6 months till 3 year, RA issue order and
Review by Order summary [Only for department]
Commissioner
(Opportunity of being heard to assessee if adverse)

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 Chap. 21: Appeals

Section 109: Constitution of Appellate Tribunal and Benches

thereof [Substituted]
GST Appellate (1) The Government shall, by notification, establish with effect from such date as may be
Tribunal by CG specified therein, an Appellate Tribunal known as the Goods and Services Tax Appellate Tribunal
for hearing appeals against the orders passed by the Appellate Authority or the Revisional
Authority.

Power Exercised (2) The jurisdiction, powers and authority conferred on the Appellate Tribunal shall be exercised
by Principal and by the Principal Bench and the State Benches constituted under sub-section (3) and sub-section
State Bench (4).

Principal Bench (3) The Government shall, by notification, constitute a Principal Bench of the Appellate Tribunal
[New Delhi] at New Delhi which shall consist of the President, a Judicial Member, a Technical Member
(Centre) and a Technical Member (State).

State Benches (4) On the request of the State, the Government may, by notification, constitute such number of
State Benches at such places and with such jurisdiction as may be recommended by the Council,
which shall consist of two Judicial Members, a Technical Member (Centre) and a Technical
Member (State).

Appeal against (5) The Principal Bench and the State Bench shall hear appeals against the orders passed by the
Order Of AA /RA Appellate Authority or the Revisional Authority: Provided that the cases in which any one of the
issues involved relates to the place of supply, shall be heard only by the Principal Bench.

Case Transfer (6) The President shall, from time to time, by a general or special order, distribute the business
of the Appellate Tribunal among the Benches and may transfer cases from one Bench to another.

Vice-President of (7) The senior-most Judicial Member within the State Benches, as may be notified, shall act as
State Benches the Vice-President for such State Benches and shall exercise such powers of the President as may
be prescribed, but for all other purposes be considered as a Member.

Cases upto 50 (8) Appeals, where the tax or input tax credit involved or the amount of fine, fee or penalty
lakh Heard by determined in any order appealed against, does not exceed Rs. 50 lakh and which does not
Single Member involve any question of law may, with the approval of the President, be heard by a single
Member, and in all other cases, shall be heard together by one Judicial Member and one
Technical Member.

In case of (9) If, after hearing the case, the Members differ in their opinion on any point or points, such
difference in Member shall state the point or points on which they differ, and the President shall refer such
opinion case for hearing,—
(a) Where the appeal was originally heard by Members of a State Bench, to another Member of a
State Bench within the State or, where no such other State Bench is available within the State, to
a Member of a State Bench in another State;

CA Rajkumar
Chap. 21: Appeals

(b) Where the appeal was originally heard by Members of the Principal Bench, to another
Member from the Principal Bench or, where no such other Member is available, to a Member of
any State Bench,
and such point or points shall be decided according to the majority opinion including the opinion
of the Members who first heard the case.

Transfer of (10) The Government may, in consultation with the President, for the administrative efficiency,
members transfer Members from one Bench to another Bench:
Provided that a Technical Member (State) of a State Bench may be transferred to a State Bench
only of the same State in which he was originally appointed, in consultation with the State
Government.

No act or (11) No act or proceedings of the Appellate Tribunal shall be questioned or shall be invalid
proceedings shall merely on the ground of the existence of any vacancy or defect in the constitution of the
be invalid Appellate Tribunal.

Section 110: President and Members of Appellate Tribunal,

their qualification, appointment, conditions of service, etc.
[NOT RELEVANT]

Section 111: Procedure before Appellate Tribunal [NOT

RELEVANT]

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Chap. 21: Appeals

Section 114: Financial and administrative powers of

President
The President shall exercise such financial and administrative powers over the Appellate Tribunal as may be prescribed.
The President shall exercise such financial and administrative powers over the National Bench and Regional Benches of
the Appellate Tribunal.
However the President shall have the authority to delegate such of his financial and administrative powers as he may
think fit to any other Member or any officer of the National Bench and Regional Benches, subject to the condition that
such Member or officer shall, while exercising such delegated powers, continue to act under the direction, control and
supervision of the President.

Section 115: Interest on refund of amount paid for

admission of appeal
Where an amount paid by the appellant
 under section 107(6) or section 112(8)
 is required to be refunded consequent to any order of the Appellate Authority or of the Appellate Tribunal,
 interest at the rate specified under section 56
 shall be payable in respect of such refund
 from the date of payment of the amount till the date of refund of such amount.

Section 116: Appearance by Authorised Representative

Appearance (1) Any person appear by an authorised representative before an officer or the Appellate
through Authority or the Appellate Tribunal in connection with any proceedings under this Act.
Authorised Otherwise than when required under this Act to appear personally for examination on oath or
Representative affirmation.

Who can be an (2) “Authorised representative” shall mean, being—

Authorised (a) his relative or regular employee; or
Representative
(b) an advocate who is entitled to practice in any court in India,
(c) any chartered accountant, a cost accountant or a company secretary, who holds a COP or
(d) a retired officer of the Commercial Tax Department, who, during his service under the
Government, had worked in a post not below the rank than that of a Group-B Gazetted
officer for a period of not less than 2 years:
however such officer shall not be entitled to appear before any proceedings under this Act
for a period of 1 year from the date of his retirement or resignation; or
(e) any person who has been authorised to act as a goods and services tax practitioner on
behalf of the concerned registered person.

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 Chap. 21: Appeals

Who can NOT be (3) No person,—

an Authorised (a) who has been dismissed or removed from Government service; or
Representative
(b) who is convicted of an offence connected with any proceedings or
(c) who is found guilty of misconduct by the prescribed authority;
(d) who has been adjudged as an insolvent,
shall be qualified to represent any person under sub-section (1)—
(i) for all times in case of persons referred to in clauses (a), (b) and (c); and
(ii) for the period during which the insolvency continues in the case of a person referred to in
clause (d).

Common provision (4) Any person who has been disqualified under the provisions of the State Goods and Services
Tax Act or the Union Territory Goods and Services Tax Act shall be deemed to be disqualified
under this Act.

Section 117: Appeal to High Court

Appeal to High (1) Any person
Court against order  aggrieved by any order passed by the State Bench or Area Benches of the Appellate
of Appellate Tribunal
Tribunal (State
bench/Area Bench)  may file an appeal to the High Court and
 the High Court may admit such appeal,
 if it is satisfied that the case involves a substantial question of law.

Appeal within 180 (2) An appeal under sub-section (1) shall be filed within a period of 180 days from the date on
days which the order appealed against is received by the aggrieved person and it shall be in such
form, verified in such manner as may be prescribed:
however the High Court may entertain an appeal after the expiry of the said period if it is
satisfied that there was sufficient cause for not filing it within such period.

Hearing on (3) Where the High Court is satisfied that a substantial question of law is involved in any case,
substantial question it shall formulate that question and the appeal shall be heard only on the question so
of law formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue that
the case does not involve such question:
(4) The High Court shall decide the question of law so formulated and deliver such judgment
thereon containing the grounds on which such decision is founded and may award such cost as
it deems fit.

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Chap. 21: Appeals

May determine the (5) The High Court may determine any issue which––
issue as not (a) has not been determined by the State Bench or Area Benches; or
determined/wrongly
determined by (b) has been wrongly determined by the State Bench or Area Benches, by reason of a decision
Appellate Tribunal on such question of law as herein referred to in sub-section (3).

Heard by judges: at (6) Where an appeal has been filed before the High Court, it shall be heard by a Bench of not
least 2 (Majority less than two Judges of the High Court, and shall be decided in accordance with the opinion of
prevail) such Judges or of the majority, if any, of such Judges.

If no such majority (6) Where there is no such majority,

then involve other  the Judges shall state the point of law upon which they differ and
judges and check
majority  the case shall, then, be heard upon that point only,
 by one or more of the other Judges of the High Court and
 such point shall be decided according to the opinion of the majority of the Judges who
have heard the case including those who first heard it.

Effect on the basis (8) Where the High Court delivers a judgment in an appeal filed before it under this section,
of certified copy effect shall be given to such judgment by either side on the basis of a certified copy of the
judgment.

Section 118: Appeal to Supreme Court

Appeal to An appeal shall lie to the Supreme Court-
supreme (a) From any order passed by the Principal Bench “National Bench or Regional Bench of the
Appellate Tribunal; or
(b) From any judgment or order passed by the High Court in an appeal made under section 117.

Effect of Where the judgment of the High Court is varied or reversed in the appeal, effect shall be given to
judgement the order of the Supreme Court in the manner provided in section 117 in the case of a judgment
of the High Court.

Section 119: Sums due to be paid notwithstanding appeal,

etc.
Notwithstanding that an appeal has been preferred to the High Court or the Supreme Court,
 sums due to the Government as a result of an order passed by the Principal Bench National or Regional Benches
of the Appellate Tribunal under section 113(1) or
 an order passed by the State Bench or Area Benches of the Appellate Tribunal under section 113(1) or
 an order passed by the High Court under section 117, as the case may be,
shall be payable in accordance with the order so passed.

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Chap. 21: Appeals

CGST Rules, 2017

Rule 108: Appeal to the Appellate Authority
(1) An appeal to the Appellate Authority under sub-section (1) of section 107 shall be filed in FORM GST APL-01,
along with the relevant documents, electronically, either electronically or otherwise as may be notified by the
f
Commissioner, and a provisional acknowledgement shall be issued to the appellant immediately.
Provided that an appeal to the Appellate Authority may be filed manually in FORM GST APL-01, along with the
relevant documents, only if-
(i) The Commissioner has so notified, or
(ii) The same cannot be filed electronically due to non-availability of the decision or order to be appealed against on
the common portal,
and in such case, a provisional acknowledgement shall be issued to the appellant immediately.
(2) The grounds of appeal and the form of verification as contained in FORM GST APL- 01 shall be signed in the
manner specified in rule 26.
(3) Where the decision or order appealed against is uploaded on the common portal, a final acknowledgment,
indicating appeal number, shall be issued in FORM GST APL-02 by the Appellate Authority or an officer authorised by
him in this behalf and the date of issue of the provisional acknowledgment shall be considered as the date of filing of
appeal:
Provided that where the decision or order appealed against is not uploaded on the common portal, the appellant
shall submit a self-certified copy of the said decision or order within a period of 7 days from the date of filing of
FORM GST APL-01 and a final acknowledgment, indicating appeal number, shall be issued in FORM GST APL-02 by the
Appellate Authority or an officer authorised by him in this behalf, and the date of issue of the provisional
acknowledgment shall be considered as the date of filing of appeal:
Provided further that where the said self-certified copy of the decision or order is not submitted within a period of 7
days from the date of filing of FORM GST APL-01, the date of submission of such copy shall be considered as the date
of filing of appeal.

Rule 109: Application to the Appellate Authority

(1) An application to the Appellate Authority under section 107(2) shall be filed in FORM GST APL-03, along with the
relevant documents, electronically either electronically or otherwise as may be notified by the Commissioner and a
provisional acknowledgment shall be issued to the appellant immediately.
“Provided that an appeal to the Appellate Authority may be filed manually in FORM GST APL-03, along with the
relevant documents, only if-
(i) the Commissioner has so notified, or
(ii) the same cannot be filed electronically due to non-availability of the decision or order to be appealed against on
the common portal,
and in such case, a provisional acknowledgement shall be issued to the appellant immediately and in such case, a
provisional acknowledgement shall be issued to the appellant immediately.
(2) Where the decision or order appealed against is uploaded on the common portal, a final acknowledgment,
indicating appeal number, shall be issued in FORM GST APL-02 by the Appellate Authority or an officer authorised by
him in this behalf and the date of issue of the provisional acknowledgment shall be considered as the date of filing of
appeal under sub-rule (1):

CA Rajkumar
Chap. 22: E-Way Bill

22 E-Way Bill
(1) Why EBW
(2) Where EBW [Circumstances where EWB required]
[Value based / Mandatory]
(3) Who, When and how to prepare EBW
(4) Life of EWB & Extension
(5) Check Mechanism
(6) Misc

Why EBW?
Mr. y
Fake Invoice Bogus Invoice Issue Supply
R
S Fake Supplier
ie Bill Issue But No Actual Output GST=
Fake ITC XXX supply of Goods. = value of FAKE
30 Lakh (Assumed)
Paper =100 Lakh GST @ 12% ITC
= 12 Lakh Book FAKE
Output Tax = 12 Lakh 12 LAKH ITC = 12 Lakh
Total = 112 Lakh USE
NET = 18Lakh

GST Evasion= 12 Lakh

Moreover Evasion of Income

Total Evasion =37 Lakh Tax By claiming
Given to Fake S =7 Lakh Fake Expenditure = 100 Lakh
Suppose: Income Tax Rate
Net Gain =30 Lakh =25%

Income Tax Evade = 25Lakh

Govt want to check Actual movement of
goods that’s why the Govt. introduced the
concept of EWB; to control/stop practice
of bogus invoice related to GOODS.

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 Chap. 22: E-Way Bill

Rule138F: (1) Where-

Information to be (a) a Commissioner of State tax or Union territory tax mandates furnishing of information
furnished in case of regarding intra-State movement of goods specified [gold, precious stones, etc], in
intra-State accordance with Rule 138F(1) of the State or Union territory Goods and Services Tax Rules,
movement of gold, and
precious stones, etc.
and generation of e- (b) the consignment value of such goods exceeds such amount, not below Rs 2 Lakhs, as may
be notified by the Commissioner of State tax or Union territory tax, in consultation with the
way bills thereof
jurisdictional Principal Chief Commissioner or Chief Commissioner of Central Tax, or any
Commissioner of Central Tax authorised by him,
Notwithstanding anything contained in Rule 138, every registered person who causes intra-
State movement of such goods, -
(i) in relation to a supply; or
(ii) for reasons other than supply; or
(iii) due to inward supply from an un-registered person,
shall, before the commencement of such movement within that State or Union territory,
furnish information relating to such goods electronically, as specified in Part A of FORM GST
EWB-01, against which a unique number shall be generated:
Provided that where the goods to be transported are supplied through an e-commerce
operator or a courier agency, the information in Part A of FORM GST EWB-01 may be
furnished by such e-commerce operator or courier agency.
(2) The information as specified in PART B of FORM GST EWB-01 shall not be required to be
furnished in respect of movement of goods referred to in the sub-rule (1) and after
furnishing information in Part-A of FORM GST EWB-01 as specified in sub-rule (1), the e-way
bill shall be generated in FORM GST EWB-01, electronically on the common portal.
(3) The information furnished in Part A of FORM GST EWB-01 shall be made available to the
registered supplier on the common portal who may utilize the same for furnishing the
details in FORM GSTR-1.
(4) Where an e-way bill has been generated under this rule, but goods are either not
transported or are not transported as per the details furnished in the e-waybill, the e-way
bill may be cancelled, electronically on the common portal, within twenty-four hours of
generation of the e-way bill:
Provided that an e-way bill cannot be cancelled if it has been verified in transit in
accordance with the provisions of rule 138B.
(5) Notwithstanding anything contained in this rule, no e-way bill is required to be
generated-
(a) where the goods are being transported from the customs port, airport, air cargo complex
and land customs station to an inland container depot or a container freight station for
clearance by Customs;
(b) where the goods are being transported-
(i) under customs bond from an inland container depot or a container freight station to a
customs port, airport, air cargo complex and land customs station, or from one customs
station or customs port to another customs station or customs port, or

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Chap. 22: E-Way Bill

(ii) under customs supervision or under customs seal.

(6) The provisions of Rule 138 (10)(11)(12), Rule 138A, Rule 138B, Rule 138C, Rule 138D and
Rule 138E shall, mutatis mutandis, apply to an e-way bill generated under this rule.
Explanation.- For the purposes of this rule,
 the consignment value of goods
 shall be the value, determined
 in accordance with the provisions of section 15,
 declared in an invoice, a bill of supply or a delivery challan, as the case may be,
 issued in respect of the said consignment and
 also includes the CGST, SGST or UTGST charged in the document and
 shall exclude the value of exempt supply of goods
 where the invoice is issued in respect of both exempt and taxable supply of goods.

CA Rajkumar
Chap. 24: Ethics under GST

24 Ethics under GST

(i) Meaning of Ethics

Moral Principle The Oxford Dictionary defines the term “Ethics” as the moral principle that governs a
person's behavior or how an activity is conducted. Ethics provides a framework for
 distinguishing between right and wrong,
 guiding decision- making, and
 determining what is considered morally acceptable in a given context.

Reduced tax evasion Ethics are fundamental to the effective functioning of any taxation system;
 This also holds true for the GST regime in India.
 Ethical conduct contributes to increased regulatory compliance and
 reduced tax evasion which in turn leads to increased Government revenue collection.
This tax revenue can be used for public welfare and development projects.

Trustworthy tax  It also helps in creating a fair, transparent, and trustworthy tax environment and
environment and reduces uncertainty that supports economic growth and development.
Less Litigations  Unethical practices like issuing bogus invoice without underlying supply, wrongful
availment of ITC, etc. not only undermine the tax revenues, but also create an uneven
playing field for honest taxpayers.
Ethical behavior may also reduce tax-related disputes and litigations

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 Chap. 24: Ethics under GST

(ii) Role of Chartered Accountant in ensuring ethics under

GST
General The professional behaviour of a Chartered Accountant is governed by a set of ethical
guidelines and principles - known as Code of Ethics - laid down by the ICAI.
 Every Chartered Accountant has to abide by this code of ethics.
 It encourages the Chartered Accountants to be honest, fair, and professional in their
working and advocates to follow the rules to ensure that they are doing the right
thing for their clients and the public at large.
The fundamental principles are: integrity, objectivity, professional competence and
due care, confidentiality, and professional behaviour.
The Chartered Accountants Act, 1949 prescribes the disciplinary action if a Chartered
Accountant is found guilty of any Professional or Other Misconduct.
A Chartered Accountant
 needs to follow ethical conduct while discharging his professional duties
 under the GST law,
 namely, compliance functions, furnishing certifications/reports and advisory roles,
by adhering to a set of principles and practices that promote integrity, transparency,
and compliance.

Second Schedule - Part A Chartered Accountant in practice would be deemed to be guilty of professional
I - clause (7) misconduct under Second Schedule - Part I - clause (7) of the Chartered Accountant Act,
1949, if he does not exercise due diligence, or is grossly negligent in the conduct of
his professional duties.

Second Schedule - Part Further, as per Second Schedule - Part I - clause (8) to the Chartered Accountants Act,
I - clause (8) 1949,
 a chartered accountant in practice shall be deemed to be guilty of professional
misconduct,
 if he fails to obtain sufficient information which is necessary for expression of an
opinion or its exceptions are sufficiently material to negate the expression of an
opinion.

Maintain professional He should maintain professional knowledge and skill at the level required
knowledge and skill  to ensure that a client or employer receives competent professional service
based on latest applicable positions of GST law.
 In case of any violation of law in performing the compliance, certifications/
reporting and advisory functions,
 he shall also be liable to applicable penalty and prosecution (in some cases) under
GST law.

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Chap. 24: Ethics under GST

Crucial role Chartered Accountants play a crucial role

 in ensuring GST compliance within their clients’ organizations.
 This involves assisting in the process of obtaining registration, structuring the
transactions and conditions stipulated in agreements for making /receiving supply,
optimizing tax positions, ensuring the necessary GST compliances including e-way
bill, payment of taxes, TDS/TCS compliances, compliances with anti-profiteering
provisions and timely filing of periodic returns.

Responsibilities Generally, Chartered Accountants are responsible

 for ensuring the maintenance of accurate and detailed records of all GST-related
transactions.
 This includes invoices, receipts, and other relevant documents.
 Such meticulous record-keeping is a legal requirement as well as an ethical duty of
the Chartered Accountant.
Another major responsibility of a Chartered Accountant in the realm of GST
 is to act as a tax advisor to their clients.
 This entails a comprehensive understanding of the client's business operations
and goals.
Chartered Accountants must assess the impact of GST
 on various aspects of the business,
 including supply chain, pricing strategies and financial reporting.

Practicing CA A Chartered Accountant, who holds a certificate of practice and who has not been
debarred from practice,
 can also appear on behalf of his client before a GST officer, GST Appellate Authority
or GST Appellate Tribunal
 in connection with any proceedings under GST law,
 as an authorised representative of the client.

Closing Furthermore, Chartered Accountants play a vital role in the GST ecosystem
 by providing certifications that affirm compliance with GST laws and regulations.
 These certifications are mandatory in specific situations and are required to ensure
compliance with GST regulations.
They primarily aim at curbing the unethical practices and
 preventing the leakage of revenue.
 Thus, it is the duty of every Chartered Accountant to exercise utmost care and due
diligence while granting these certifications.
While providing said certification,
 the Chartered Accountant has to comply with the ethical requirements of the Code
of Ethics issued by the ICAI,

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 Chap. 24: Ethics under GST

 the relevant applicable requirements of the Standard on Quality Control (SQC

1), Quality Control for Firms that Perform Audits and Reviews of Historical Financial
Information, and Other Assurance and Related Services Engagements.

The certifications/reports required to be furnished by a Chartered Accountant under GST law have been explained
in detail hereunder:

Certifications/reports to be furnished by a Chartered

Accountant required under the GST law
Certification of the amount of ITC claimed at the time of registration/voluntary registration or switching to
regular tax paying status or coming into tax-paying status [Sub-section (1) of section 18 read with rule 40]

The credit on inputs held in stock and contained in semi-finished goods or finished goods held in stock and capital
goods at the time of registration/voluntary registration or coming into regular tax/tax- paying status is available in
the following manner:

Section No. Persons eligible to take credit Goods entitled to ITC

Inputs held in stock/ capital as on

goods

Section 18(1)(a) Person who has applied for Inputs held in stock and The day immediately
registration within 30 days from inputs contained in semi- preceding the date from
the date on which he becomes finished or finished goods held which he becomes liable to
liable to registration and has been in stock pay tax
granted such registration

Section 18(1)(b) Person who is not required to Inputs held in stock and The day immediately
register, but obtains voluntary inputs contained in semi- preceding the date of
registration finished or finished goods held registration
in stock

Section 18(1)(c) Registered person who ceases to Inputs held in stock and The day immediately
pay composition tax and switches inputs contained in semi- preceding the date from
to regular scheme finished or finished goods held which he becomes liable
in stock and capital goods to pay tax under regular
scheme

Section 18(1)(d) Registered person whose exempt Inputs held in stock and The day immediately
supplies become taxable supplies inputs contained in semi- preceding the date from
finished or finished goods held which such supply becomes
in stock relatable to such taxable
exempt supply and capital
goods exclusively used for
such exempt supply

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Chap. 24: Ethics under GST

In all the above cases,

 the registered person has to make an electronic declaration in Form ITC-01 on the common portal,
 clearly specifying the details relating to the inputs held in stock, inputs contained in semi- finished or finished
goods held in stock and capital goods.
 The declaration is to be filed within 30 days (extendable by Commissioner/Commissioner of State
GST/Commissioner of UTGST) from the date when the registered person becomes eligible to avail ITC.
 If the claim of ITC pertaining to CGST, SGST/UTGST, IGST put together exceeds ` 2,00,000, the declaration needs
to be certified by a practicing Chartered Accountant or Cost Accountant.
A Chartered Accountant is
 required to examine the books of accounts and other relevant documents / records of the taxpayer and
 to provide a reasonable assurance
 that the amounts declared in the Form GST ITC- 01
 have been accurately drawn from the books of accounts and other relevant documents / records of the
taxpayer and is claimed as ITC.

Certification that the sale, merger, demerger, amalgamation, lease or transfer of business done with a specific
provision for the transfer of liabilities [Section 18(3) read with Rule 41]

In case of sale, merger, demerger, amalgamation, transfer or change in ownership of business etc.,
 the ITC that remains unutilized in the electronic credit ledger of the registered person can be transferred
 to the new entity, provided there is a specific provision for transfer of liabilities in such change of
constitution.
 The registered person should furnish the details of change in constitution in Form ITC - 02 on the common portal.
 Further, he needs to submit a certificate from practicing Chartered Accountant or Cost Accountant certifying
that the change in constitution has been done with a specific provision for transfer of liabilities.
A Chartered Accountant is required to examine the books of accounts and other relevant documents / records of the
taxpayer and to provide a reasonable assurance that the sale, merger, demerger, amalgamation, lease or transfer or
business has been done with a specific provision for the transfer of liabilities.

Certification that in case of refund claim exceeding ` 2 lakh by the applicant, there is no unjust enrichment
[Section 54 read with rule 89(2)(m)]

A certificate in Annexure 2 of Form GST RFD-01

 is to be issued by a Chartered accountant or Cost Accountant
 to the effect that the incidence of tax, interest or any other amount claimed as refund
 has not been passed on to any other person (i.e., there is no unjust enrichment in the case of the applicant)
 in a case where the amount of refund claimed exceeds ` 2 lakh.
The certification by the Chartered Accountant
 should be based on meticulous examination of the books of accounts and other relevant documents / records
supporting the refund claim

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 Chap. 24: Ethics under GST

 thereby providing a reasonable assurance that the incidence of tax, interest or any other amount claimed as
refund, has not been passed on to any other person.

Certification of the amount of ITC to be reversed on cancellation of registration or on switching to composition

levy/exit from tax- paying status, in respect of inputs for which tax invoices are not available [Section
29(5)/section 18(4)]

Section 29(5) requires reversal of ITC on cancellation of registration of a registered person. Similarly, section
18(4) requires reversal of ITC when a registered person who has availed ITC switches to composition levy or when
his supplies get wholly exempted from tax.
ITC on inputs
 should be reversed proportionately on the basis of corresponding invoices on which credit had been availed
on such inputs.
 If invoices are not available, ITC can be reversed on the basis of the prevailing market price of such goods on the
date of switch over/exemption/cancellation of registration.
 The details so furnished on the basis of prevailing market value need to be duly certified by a practicing
Chartered Accountant or Cost Accountant.
The certification by the Chartered Accountant
 should be based on meticulous examination of the books of accounts and other relevant documents / records of
the taxpayer
 thereby providing a reasonable assurance as regards the correctness of the quantum of the amount of ITC to be
reversed
 in case where the tax invoices related to the inputs held in stock are not available.

Audit report under section 66

Section 66 provides that if at any stage of scrutiny, inquiry, investigation or any other proceedings before him, any
officer not below the rank of Assistant Commissioner, having regard to the nature and complexity of the case and the
interest of revenue, is of the opinion that –
 the value (of goods and/or services) has not been correctly declared; or
 the credit availed is not within the normal limits,
he may, with the prior approval of the Commissioner,
 issue a direction to the registered person to get his records including books of account examined and audited
 by a Chartered Accountant or a Cost Accountant
 as may be nominated by the Commissioner and specified in the said direction.
The Chartered Accountant or Cost Accountant
 shall submit a report of such audit duly signed and certified by him
 within the period of 90 days to the said Assistant Commissioner
 mentioning therein such other particulars as may be specified:

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The Assistant Commissioner may extend the said period 90 days by a further period of 90 days −
 on an application made to him in this behalf by the registered person or the Chartered Accountant or Cost
Accountant; or
 for any material and sufficient reason.
The expenses of the examination and audit of records including the remuneration of such Chartered Accountant or
Cost Accountant, shall be determined and paid by the Commissioner and such determination shall be final. On
conclusion of special audit, the registered person shall be informed of the findings of special audit.
Upon the conclusion of special audit under section 66, the registered person is communicated the proposed tax,
interest and other liabilities, if any, along with the audit findings and the registered person is called upon to discharge
the liabilities.
In case the registered person discharges the liabilities as proposed, no further action is taken. Otherwise, the
authorities may initiate the proceedings against the registered person under sections 73 or 74 for determination of
the tax liability of the person audited.
A Chartered Accountant must approach
 the Special Audit with an unbiased and impartial mindset, free from any external influences or conflicts of
interest.
 This ensures that the audit findings are based on factual evidence and professional judgment, rather than
personal biases.
 He should first go through the terms of reference provided by the GST authorities to understand the scope
and objectives of the special audit.
 This document outlines the specific areas and tax periods to be audited.
 He should conduct a comprehensive review of all relevant documents, including financial statements,
invoices, transaction records, and any other documentation provided by the taxpayer.
 This ensures that the audit findings are based on accurate and reliable information. He should take steps to
identify and mitigate any potential conflicts of interest that may arise during the special audit.
 This includes refraining from engaging in any activities or relationships that could compromise their objectivity
or independence.
 If a conflict of interest does arise, it should be promptly disclosed to the relevant parties.

Attestation

Apart from the aforesaid specific roles defined in the GST Law for Chartered Accountants,
 there may be specific scenarios
 where the attested documents, certificates issued by the Chartered Accountants
 are relied during the proceedings under GST Law by the tax authorities and also judicial forums, as a general
practice while dealing with the GST Law related disputes.

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 Chap. 24: Ethics under GST

Case Studies
Case Studies have been incorporated to exemplify some of the ethical considerations that a Chartered Accountant
should bear in mind when issuing various certificates/reports under relevant GST provisions as well as while giving
GST related advise to the client, ensuring GST compliances at the same time. This is intended to encourage the
students to act ethically while discharging any GST related function and abstain themselves from inadvertently indulging
in any unethical practices. We have discussed the significant implications that would arise under the GST law in
such cases1. Students may also refer the relevant provisions of demands and recovery, offences, penalties and
prosecution under the GST law for ascertaining the consequences of the unethical practices being followed. Further, a
Chartered Accountant in practice may be deemed to be guilty of the professional misconduct in such cases,
primarily under clause (7)/ clause (8) of Part I of the Second Schedule to the Chartered Accountant Act, 1949, in
such cases.
Case Study 1 Facts of the case
M/s L and Co., a partnership firm with two partners – Mr. X and Mr. Y, is registered under GST in Kolkata, West Bengal.
It is engaged in supplying the materials used for construction related activity. Mr. X and Mr. Y are friends and each of
them also have their own separate sole proprietorship firms engaged in supplying construction material; these firms
are registered under GST. Mr. A2 is the tax consultant of the firm - M/s L and Co.
Mr. X gets an offer from a customer - M/s W Pvt. Ltd., (hereinafter referred to as WPL) - to issue some supply related
bills to meet the budget allocated to WPL by their management in relation to civil works. Mr. X shall earn a
commission of 20% of the value of supply charged in the supply bills accepted by WPL. Mr. X agrees to share 50%
of his earnings with Mr. Y for undertaking the above project. M/s L and Co. needs a bank loan for expanding its
business operations and the supply bills issued to WPL will inflate the turnover of M/s L and Co. Mr. X and Mr. Y
sought advice from their tax consultant Mr. A as to how to execute the above project for the supply bills to be issued
to WPL. Based on the guidance provided by Mr. A, it is executed as follows:
 M/s L and Co. shall issue supply related bills for steel, jelly stone and cement for ` 280 lakh to Mr. X wherein
the delivery site shall be of WPL (Bill to Ship to Model).
 Mr. X shall avail and utilise the input tax credit (ITC) on the bill of ` 280 lakh and shall separately enter into a
contract with WPL for supply of steel, jelly stone and cement (to be used for construction of foundation of Plant
and Machinery) for ` 280 lakh. Further, Mr. X, in his individual capacity, shall issue labour work related bills for `
40 lakh for the assembly and erection work relating to construction of foundation of Plant and Machinery
undertaken at the site of WPL, without actually providing any service. WPL will avail and utilise the ITC on the
bills of ` 280 lakh and ` 40 lakh used for underlying supply of goods.
 All inventory registers are updated duly by M/s L and Co. without any actual movement/supply of the material
and some e-way bills are also generated on behalf of Mr. X for the supplies made to the work site of WPL.
Mr. A assures Mr. X and Mr. Y that:
 Inventory registers are up to date for material movement.
 Compliances pertaining to e-way bill have been taken care of.
 Money shall be duly realised as per the bills issued.
Mr. X approached his friend - Mr. P, a practicing Chartered Accountant, for seeking his help in above arrangement.
However, Mr. P makes Mr. X conversant with the following GST implications that may arise in above arrangement:

1 Based on view taken in Circular No. 171/03/2022 GST dated 06.07.2022

2 Mr. A is not a Chartered Accountant.

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Chap. 24: Ethics under GST

GST implications
1. Issue of invoice by M/s L and Co. to Mr. X: Since there has only been an issuance of tax invoice by the registered
person - M/s L and Co. - to registered person ‘Mr. X’ without the underlying supply of steel, jelly stone and cement,
therefore, such an activity does not satisfy the criteria of “supply”, as defined under section 7. As there is no supply
by M/s L and Co. to Mr. X in respect of such tax invoice in terms of the provisions of section 7, no tax liability arises
against M/s L and Co. for the said transaction, and accordingly, no demand and recovery is required to be made
against M/s L and Co. under the provisions of section 74 in respect of the same. The registered person - M/s
L and Co. - shall, however, be liable for penal action under section 122(1)(ii) for issuing tax invoices without
actual supply of goods. This offence is also punishable with imprisonment for a term which may extend to 3 years
and with fine in terms of section 132(1)(ii).
2. Issue of invoice by Mr. X to WPL: The registered person - Mr. X has availed and utilized fraudulent ITC on the basis
of the tax invoice issued in contravention of the provisions of section 16(2)(b), without receiving the supply of steel,
jelly stone and cement. Further, there was no supply of steel, jelly stone and cement and labour work related
services by Mr. X to WPL. Thus, in respect of the said transactions, no tax was required to be paid. In these
specific cases, no demand and recovery of either ITC wrongly/ fraudulently availed by Mr. X in such case or tax
liability in respect of the said outward transaction by Mr. X to WPL is required to be made from Mr. X under the
provisions of section 74. However, in such cases, Mr. X shall be liable for penal action both under section 122(1)(ii)
and section 122(1)(vii), for issuing invoices without any actual supply of goods and/or services as also for taking/
utilizing input tax credit without actual receipt of goods and/or services. This offence is also punishable with
imprisonment for a term which may extend to 3 years and with fine in terms of section 132(1)(ii) subject to
specified conditions.
WPL will be liable for the demand and recovery of the ITC availed and utilised by it, along with penal action under
section 74 along with applicable interest under provisions of section 50, for taking/ utilizing ITC without actual
receipt of steel, jelly stone and cement and without receiving the assembly and erection services, used for
underlying supply of goods. This offence is also punishable with imprisonment for a term which may extend to 3
years and with fine in terms of section 132(1)(ii) subject to specified conditions.
3. GST implications on Mr. A: Mr. A who advised for designing the above business practice shall also be liable to a
penalty in terms of the provisions of 122(3) since in the given case, he has aided or abetted the offences specified
above. This offence is also punishable with imprisonment subject to specified conditions.
Mr. P apprised Mr. X that if any Chartered Accountant advises Mr. X on above arrangement, then he will also be
punishable with penalty in terms of the provisions of 122(3) for aiding/abetting the offences specified above and
may also be punishable with imprisonment subject to specified conditions. Further, he may also be held guilty of
professional misconduct.
Case Study 2 Facts of the case
Doodle LLC is an entity registered in Germany and is engaged in providing online services across multiple countries
including India. The service offerings include certain services which are covered within the purview of online
information and database access or retrieval services i.e. OIDAR services liable to GST in India. Since Doodle LLC does not
have any place of business in India, it appointed one of its employee - Mr. X3 as its authorized representative for all
the purposes in India which includes undertaking GST compliances and also as an authorized signatory for any
other regulatory compliances in India. Mr. X is a partner in XYZ & Associates LLP. Post appointment of Mr. X,
following chain of events unfolded:

3 Mr. X is not a Chartered Accountant.

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 Chap. 24: Ethics under GST

1. Mr. X, being an authorized representative of Doodle LLC, made an application for registration as an OIDAR service
provider in India and undertook other GST compliances. Subsequently, Mr. X started filing the monthly GST
returns and made payment of applicable GST in India on behalf of Doodle LLC. In lieu of such services, Mr. X
was being remunerated a fixed sum on monthly basis as professional fee. The appointment of Mr. X was in his
personal capacity and not a professional service contract with his partnership firm - XYZ & Associates LLP.
However, for recovery of amount of fixed monthly remuneration from Doodle LLC, the invoices as ‘export of
services’ were issued by Mr. X in the name of his partnership firm. The corresponding refund benefit was claimed
by the partnership firm of Mr. X for input tax credit against such export of service invoices.
2. Doodle LLC appointed influencers in India to promote its services in India. The tax invoices of such influencers
were received by Mr. X in name of XYZ & Associates LLP and input tax credit was availed by the partnership firm
for such services. Said ITC was utilised for further supply of services. However, the actual service recipient in
such case was Doodle LLC.
3. Subsequently, Doodle LLC was required to submit certain affidavits and accounting records before the office of
the Enforcement Directorate. Being an authorized representative/ signatory of Doodle LLC, Mr. X approached
Mr. P, a practicing Chartered Accountant, to prepare the affidavits and accounting records which included critical
financial information and data of Doodle LLC. He elaborated the entire arrangement among Doodle LLC, Mr. X
and XYZ & Associates LLP to Mr. P. He further requested Mr. P to certify and attest such records, which would be
prepared and compiled by Mr. P in capacity of a practicing Chartered Accountant for submission before
Enforcement Directorate.
Mr. P apprised Mr. X of the following GST implications:
GST implications
1. Incorrect issuance of invoice for export of services and claim of refund of input tax credit on the basis of such
export of service related invoices
Mr. X was appointed as authorized representative and signatory of Doodle LLC in his personal capacity to
undertake the compliances enumerated under the GST law in India. However, the consideration for such services
was received at the behest of invoices issued in the name of his partnership firm. Further, such invoices were issued
as ‘export of service’ invoices and corresponding refund of input tax credit was claimed by the firm of Mr. X.
This act of Mr. X alongwith his firm is punishable as follows:
- Since Mr. X supplied services to Doodle LLC without any invoice, he shall also be liable for the demand and
recovery of tax on said supply, along with penal action under section 74. Even if the contention is made that
invoice was issued for such services by the firm of Mr. X, the same shall be treated as an incorrect invoice or
false invoice as both, Mr. X and XYZ & Associates LLP are separate persons as per GST Law.
- Since both, Mr. X and XYZ & Associates LLP are different persons, the invoice issued by the firm shall be
construed as issuance of invoice without supply of services viz. an offence punishable under section
122(1)(ii).
- Incorrect refund was claimed by XYZ & Associates LLP for input tax credit on the basis of incorrect invoice for
export of services to Doodle LLC. This is an offence under section 122(1)(viii).
- All the above offences may also be punishable with imprisonment and fine under section 132(1) depending on
the amount of default involved and subject to specified conditions.
2. Availment of input tax credit without actual receipt of services
XYZ & Associates LLP received invoices from the influencers who were actually providing services to Doodle LLC.
Further, the input tax credit related to such invoices was availed by XYZ & Associates LLP in contravention of the
provisions of section 16. Accordingly, the input tax credit availed and utilised by XYZ & Associates LLP for further
supply of services is incorrect. Thus, XYZ & Associates LLP will be liable for the demand and recovery of the said

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Chap. 24: Ethics under GST

ITC, along with penal action under section 74 alongwith interest under section 50 as the actual service recipient
was Doodle LLC and not XYZ & Associates LLP.
This offence may also be punishable with imprisonment and fine under section 132(1) depending on the
amount of default involved and subject to specified conditions.
3. GST implications on Mr. X
Mr. X was fully involved in wrongdoings in terms of the business transactions of Doodle LLC in India. Further, he
was the authorized representative and signatory of Doodle LLC in India. Mr. X is liable to penalty under
section 122(1A) and section 122(3) since he is involved in aiding and abetting the offences committed hereunder at
his instance and has also derived monetary benefits from such practices. This offence may also be punishable
with imprisonment and fine under section 132(1) depending on the amount of default involved and subject to
specified conditions.
If a Chartered Accountant takes up the assignment offered by Mr. X and also attests/certifies the Doodle LLC’s
accounting records that would be prepared by him, for submission before the Enforcement Directorate in India,
he may be held guilty of professional misconduct.
Case Study 3 Facts of the Case:
ABC & Associates LLP (ABC), a firm of Chartered Accountants, was empanelled with the Commissioner of GST for
appointment as Special Auditor under section 66.
X Ltd., a registered person under GST, was selected by the Office of the Commissioner for special audit under section 66
for a financial year on account of irregularities noticed during scrutiny of returns. ABC was nominated by the Office
of the Commissioner for special audit of X Ltd. Assume that the following events unfolded in relation to the
appointment and audit procedure:
1. The appointment of special auditor was based on the undertaking furnished by the firm that the partners of the
firm or any of their relatives are not directly or indirectly related to the auditee. However, while submitting the
declaration in relation to such appointment, if ABC fails to disclose the fact that spouse of one of the partners of
ABC is working under full time employment as a Head of Tax Department of the auditee i.e. X Ltd., what will be its
implications?
2. Material discrepancies in the valuation of stock transfer to related parties by the auditee were noticed by ABC. If
ABC fails to disclose these material discrepancies in the audit report submitted to the Office of Commissioner, what
will be its implications?
3. The input tax credit claim by X Ltd. i.e. the auditee, under Form GST ITC- 01, was certified by one of the associate
firms of ABC in favour of X Ltd. Such certificate was based on incorrect facts and against the eligibility criteria for
input tax credit as per section 18. However, if ABC fails to exercise the due diligence and the certificate is taken on
record by ABC as an audit procedure and is relied upon at the time of finalization of audit report and submission
of findings, what will be its implications?
4. ABC receives a consideration of ` 5 lakh from X Ltd. in the name of special audit conducted.
GST implications
Following implications may arise in the above cases:
1. False undertaking submitted before the Office of Commissioner GST and the audit engagement undertaken on
the basis of such undertaking
The essential terms of the appointment as special auditor included that the partners or any of the relatives of the
partners are not directly or indirectly linked to X Ltd. i.e. the auditee. If the spouse of one of the partners of
ABC is working as Head of Tax Department of the auditee. Non-disclosure of said fact in the undertaking and other
engagement documents and accepting such engagement tantamount to submission of false undertaking by a

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 Chap. 24: Ethics under GST

Chartered Accountant firm to the Government Authorities. Further, a question may be raised about the
independence of the audit team considering the fact that spouse of one of the partners of the firm is holding a
key position in X Ltd. i.e. the auditee.
2. Non-reporting of material discrepancies noticed during the audit procedure and reliance upon incorrect
certificates and information
ABC audit team did not exercise due diligence to ascertain that the input tax credit availed by X Ltd. is not in
compliance with the GST provisions. Instead, ABC relied on the certificate issued by its own associate firm which
justified the incorrect input tax credit claim by X Ltd. In such a scenario both ABC and the associate firm, which
issued the certificate to justify the input tax credit claim, were aiding and abetting X Ltd. in wrongful availment of
credit, which is an offence punishable with penalty under 122(3). This offence may also be punishable with
imprisonment and fine under section 132(1) depending on the amount of default involved and subject to
specified conditions. Further, ABC as well as its associate firm may be held guilty of professional misconduct.
3. Receiving consideration for special audit from the auditee
The consideration for special audit under section 66 is payable by the Office of Commissioner and cannot be
directly recovered from the auditee. In the present case the receipt of ` 5 lakh from the X Ltd., i.e. the auditee by
ABC is an offence under GST provisions. The same is liable to penalty under general penalty under section 125 apart
from other penal provisions under the GST Law. Further, this will also have an impact on the independence of
the auditor – ABC.
Case Study 4 Facts of the Case:
A Ltd. is engaged in the business of manufacturing cotton yarn, wherein cotton is the principal raw material in the
manufacturing process. The price of cotton varies depending upon the market conditions and is dependent on
various external factors. Mr. X4 is tax consultant of A Ltd. Mr. X advises A Ltd. on GST compliances.
In order to meet expansion related expenditure, A Ltd. sought a term loan and working capital loan from banks. As per
the bank, the turnover and profitability criteria of A Ltd. were not meeting the benchmarks of bank for sanction of any
loan facility. Accordingly, following actions were undertaken by Mr. X being the tax consultant of A Ltd.:
1. A separate entity i.e. B Ltd. was incorporated and the Directors of A Ltd. were appointed as Directors in B Ltd.
This ensured that the control of B Ltd. remains with the Directors of A Ltd. Further, B Ltd. obtained GST
registration as a manufacturer of yarn wherein Mr. X assisted B Ltd. in obtaining such GST registration. Mr. X
obtained registration providing fake documents for registration.
2. Subsequently, A Ltd. started issuing tax invoices for supply of yarn to B Ltd. However, there was no actual movement
of goods by A Ltd. to B Ltd. The tax invoices were issued and the same were reported in the GST returns by A Ltd.
Further, B Ltd. availed the input tax credit of all such tax invoices reported by A Ltd. The finished goods related to
such tax invoices were sold in the local market by A Ltd. in cash without charging any GST and without issuance
of tax invoice.
3. B Ltd. issued tax invoices for provision of certain services to A Ltd. in form of testing of cotton, repairs and
maintenance of machinery installed at A Ltd. apart from other services. However, no such services were actually
provided by B Ltd. to A Ltd. The input tax credit appearing in the books of B Ltd. (which was availed on the basis of
fake yarn invoices) was utilized by B Ltd. at the time of discharging GST liability in relation to the alleged tax
invoices issued against provision of services to A Ltd.
4. Further, B Ltd. issued tax invoices for sale of yarn (allegedly purchased from A Ltd.) to other group entities to
ensure that the stock of yarn becomes zero in the books of accounts at the year end. The tax invoices were
issued at a rate lowered by 90% of the actual tax invoice received from A Ltd. contending that the quality of yarn
had deteriorated during the storage.

4 Mr. X is not a Chartered Accountant.

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Chap. 24: Ethics under GST

5. Mr. X was aware of the aforesaid actions of A Ltd. and B Ltd. Further, the GST returns were filed by Mr. X for both
the companies.
6. A Ltd. approached Mr. P, a practicing Chartered Accountant to issue relevant certificates to the bank certifying the
turnover of A Ltd. and B Ltd. as genuine turnover to ensure that the required loan amount is sanctioned to A Ltd. A
Ltd. elaborated the entire arrangement made by it with regard to B Ltd.
Mr. P apprised A Ltd. of the following GST implications that may arise in the given case:
GST implications
1. GST registration of B Ltd. sought on the basis of fake documents
As per section 122(1)(xii), furnishing of false information with regard to registration particulars is an offence liable
to penalty under GST Law. Thus, B Ltd is liable to penalty under section 122(1)(xii).
2. Issuance of tax invoice without actual supply of goods or services
Following instances happened wherein there was no actual supply of goods or services, however, tax invoice was
issued:
- Fake issuance of tax invoice for supply of yarn by A Ltd. to B Ltd. (Para 2)
- Fake issuance of tax invoice for supply of services by B Ltd. to A Ltd. (Para 3)
- Fake issuance of tax invoice for supply of goods by B Ltd to group entities (Para 4)
The aforesaid actions are liable for penal action under section 122(1)(ii) for issuing tax invoices without actual supply
of goods and services. This offence may also be punishable with imprisonment and fine under section 132(1)
depending on the amount of default involved and subject to specified conditions.
3. Fraudulent input tax credit availment
B Ltd. availed fraudulent input tax credit of the goods (yarn) which were not at all received by B Ltd. and the
same was used in discharge of the tax liability related to invoices issued without any underlying supply of goods or
services.
B Ltd. has availed and utilized fraudulent ITC on the basis of the said tax invoice, in contravention of the provisions
of section 16(2)(b), without receiving the supply of goods and accordingly. In this case, there was no supply of by B
Ltd. to A Ltd. in respect of the said transaction and also no tax was required to be paid in respect of the said
transaction. Therefore, in these specific cases, no demand and recovery of either input tax credit wrongly/
fraudulently availed by B Ltd. in such case or tax liability in respect of the said outward transaction by B Ltd. to A
Ltd. is required to be made from B Ltd. under the provisions of section 74. However, in such cases, B Ltd. shall
be liable for penal action both under section 122(1)(ii) and section 122(1)(vii), for issuing invoices without any actual
supply of goods and/or services as also for taking/ utilizing input tax credit without actual receipt of goods and/or
services.
This offence may also be punishable with imprisonment and fine under section 132(1) depending on the amount of
default involved and subject to specified conditions.
4. Incorrect information in GST returns and falsification of books of accounts
The GST returns filed by A Ltd. and B Ltd. were not backed by correct information in terms of supply of goods and
services. Knowing that there was no supply of goods or services and input tax credit is not available, the returns
were filed by both the companies. The books of accounts and financial records were also falsified in terms of
information related to sales and inventory. This act of furnishing incorrect information in GST return and
falsifying financial records is an offence under section 122(1)(x). This offence may also be punishable with
imprisonment and fine under section 132(1) depending on the amount of default involved and subject to specified
conditions.

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 Chap. 24: Ethics under GST

5. GST implications on Mr. X

Mr. X, being a consultant of A Ltd., had adequate knowledge of the fraud and wilful misrepresentation of the facts in
terms of maintaining the financial records and submission of information in GST returns. In fact, Mr. X himself was
filing the GST returns and was aware of the fake invoices and ineligible input tax credit availment by the companies.
Mr. X shall be liable to a penalty in terms of the provisions of 122(3) since in the given case, he has aided or abetted
the offences specified above. This offence may also be punishable with imprisonment and fine under section
132(1) depending on the amount of default involved and subject to specified conditions.
If a Chartered Accountant undertakes the assignment of issuing relevant certificates to the bank thereby certifying
the turnover of A Ltd. and B Ltd., he may be held guilty of professional misconduct. Further, he shall also be liable
to a penalty in terms of the provisions of 122(3). This offence may also be punishable with imprisonment and fine
under section 132(1) depending on the amount of default involved and subject to specified conditions.

CA Rajkumar
Chap. 25: Supplementary/MISC.: Provisions

25 Supplementary/
MISC.: Provisions

Section 144: Presumption as to documents in certain cases

Where any document––

(i) is produced by any person under this Act or any other law for the time being in force; or
(ii) has been seized from the custody or control of any person under this Act or any other law for the time being in
force; or
(iii) has been received from any place outsideIndia in the course of any proceedings under this Act or any other law for
the time being in force,

and such document is tendered by the prosecution in evidence against him or any other person who is tried jointly with
him, the court shall—

(a) Unless the contrary is proved by such person, presume—

(i) The truth of the contents of such document;
(ii) That the signature and every other part of such document which purports to be in the handwriting of any
particular person or which the court may reasonably assume to have been signed by, or to be in the handwriting
of, any particular person, is in that person’s handwriting, and in the case of a document executed or attested,
that it was executed or attested by the person by whom it purports to have been so executed or attested;

(b) Admit the document in evidence notwithstanding that it is not duly stamped, if such document is otherwise
admissible in evidence.

CA Rajkumar
Chap. 25: Supplementary/MISC.: Provisions

(g) Any such particulars to an officer of the Central Government or of any State
Government, as may be necessary for the purpose of enabling that Government to
levy or realise any tax or duty; or
(h) Any particulars when such disclosure is occasioned by the lawful exercise by a public
servant or any other statutory authority, of his or its powers under any law for the
time being in force; or
(i) Any Particulars relevant to any inquiry into a charge of misconduct in connection with
any proceedings under this Act against a practising advocate, a tax practitioner, a
practising cost accountant, a practising chartered accountant, a practising company
secretary to the authority empowered to take disciplinary action against the members
practising the profession of a legal practitioner, a cost accountant, a chartered
accountant or a company secretary, as the case may be; or
(j) Any particulars to any agency appointed for the purposes of data entry on any
automated system or for the purpose of operating, upgrading or maintaining any
automated system where such agency is contractually bound not to use or disclose
such particulars except for the aforesaid purposes; or
(k) Any particulars to an officer of the Government as may be necessary for the purposes
of any other law for the time being in force; or
(l) Any information relating to any class of taxable persons or class of transactions for
publication, if, in the opinion of the Commissioner, it is desirable in the public interest,
to publish such information.

Section 158A Consent based sharing of information

furnished by taxable person
(1) Notwithstanding anything contained in sections 133, 152 and 158,
The following details furnished by a registered person may, subject to the provisions of sub-section (2), and on the
recommendations of the Council, be shared by the common portal with such other systems as may be notified by the
Government, in such manner and subject to such conditions as may be prescribed, namely:—
(a) Particulars furnished in the application for registration under section 25 or in the return filed under section 39 or
under section 44;
(b) The particulars uploaded on the common portal for preparation of invoice, the details of outward supplies furnished
under section 37 and the particulars uploaded on the common portal for generation of documents under section 68;
(c) Such other details as may be prescribed.
(2) For the purposes of sharing details under sub-section (1), the consent shall be obtained, of—
(a) the supplier, in respect of details furnished under clauses (a), (b) and (c) of sub-section (1); and
(b) The recipient, in respect of details furnished under clause (b) of sub-section (1)(C), and under clause (c) of sub-
section (1) only where such details include identity information of the recipient,
in such form and manner as may be prescribed.

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 Chap. 25: Supplementary/MISC.: Provisions

(3) Notwithstanding anything contained in any law for the time being in force, no action shall lie against the Government
or the common portal with respect to any liability arising consequent to information shared under this section and there
shall be no impact on the liability to pay tax on the relevant supply or as per the relevant return.

NOTIFICATION NO. 33/2023- Central Tax

In exercise of the powers conferred by section 158A of the CGST Act, 2017 and section 20 of the IGST Act, 2017 , the
Central Government, hereby notifies “Account Aggregator” as the systems with which information may be shared by
the common portal based on consent under Section 158A of the CGST Act, 2017.
Explanation: For the purpose of this notification,
 “Account Aggregator” means a non-financial banking company which undertakes the business of an Account
Aggregator
 in accordance with the policy directions issued by the Reserve Bank of India
 under section 45JA of the Reserve Bank of India Act, 1934 and
 defined as such in the Non-Banking Financial Company - Account Aggregator (Reserve Bank) Directions, 2016.

Section 159: Publication of Information in Respect of

persons in certain cases
(1) If the Commissioner, or any other officer authorised by him in this behalf, is of the opinion that it is necessary or
expedient in the public interest to publish the name of any person and any other particulars relating to any proceedings
or prosecution under this Act in respect of such person, it may cause to be published such name and particulars in such
manner as it thinks fit.
(2) No publication under this section shall be made in relation to any penalty imposed under this Act until the time for
presenting an appeal to the Appellate Authority under section 107 has expired without an appeal having been presented
or the appeal, if presented, has been disposed of.
Explanation: In the case of firm, company or other association of persons, the names of the partners of the firm,
directors, managing agents, secretaries and treasurers or managers of the company, or the members of the association,
as the case may be, may also be published if, in the opinion of the Commissioner, or any other officer authorised by him
in this behalf, circumstances of the case justify it.

Section 160: Assessment proceedings, etc., not to be

Invalid on certain Grounds
(1) No assessment, re-assessment, adjudication, review, revision, appeal, rectification, notice, summons or other
proceedings done, accepted, made, issued, initiated, or purported to have been done, accepted, made, issued, initiated
in pursuance of any of the provisions of this Act shall be invalid or deemed to be invalid merely by reason of any mistake,
defect or omission therein, if such assessment, re-assessment, adjudication, review, revision, appeal, rectification,
notice, summons or other proceedings are in substance and effect in conformity with or according to the intents,
purposes and requirements of this Act or any existing law.
(2) The service of any notice, order or communication shall not be called in question, if the notice, order or
communication, as the case may be, has already been acted upon by the person to whom it is issued or where such

CA Rajkumar
 Chap. 25: Supplementary/MISC.: Provisions

CBIC-190354/195/2023
Whether ‘same line of business’ in case of passenger transport service and renting of motor vehicles includes
leasing of motor vehicles without operators.

Services of transport of passengers by any motor vehicle and renting of motor vehicle designed to carry passengers
with operator , where the cost of fuel is included in the consideration charged from the service recipient attract GST
at the rate of 5% with input tax credit of services in the same line of business.
Same line of business means “service procured from another service provider of transporting passengers in a motor
vehicle or renting of a motor vehicle”.
It is hereby clarified that input services in the same line of business include transport of passengers OR renting of
motor vehicle with operator and not leasing of motor vehicles without operator which attracts GST and/or
compensation cess at the same rate as supply of motor vehicles by way of sale.

Whether GST is applicable on reimbursement of electricity charges received by real estate companies, malls,
airport operators etc. from their lessees/occupants.

Doubts were raised on the applicability of GST on supply of electricity by the real estate companies, malls, airport
operators etc., to their lessees or occupants.
It is clarified that whenever electricity is being supplied bundled with renting of immovable property and/or
maintenance of premises, as the case may be, it forms a part of composite supply and shall be taxed accordingly.
The principal supply is renting of immovable property and/or maintenance of premise, as the case may be, and the
supply of electricity is an ancillary supply as the case may be. Even if electricity is billed separately, the supplies will
constitute a composite supply and therefore, the rate of the principal supply i.e., GST rate on renting of immovable
property and/or maintenance of premise, as the case may be, would be applicable.
However, where the electricity is supplied by the Real Estate Owners, Resident Welfare Associations (RWAs), Real
Estate Developers etc., as a pure agent, it will not form part of value of their supply.
Further, where they charge for electricity on actual basis that is, they charge the same amount for electricity from
their lessees or occupants as charged by the State Electricity Boards or DISCOMs from them, they will be deemed to
be acting as pure agent for this supply.

Whether job work for processing of “Barley” into “Malted Barley” attracts GST @ 5% as applicable to "job work in
relation to food and food products” or 18% as applicable on “job work in relation to manufacture of alcoholic
liquor for human consumption.

References have been received to clarify whether services by way of job work for conversion of barley into malt
attracts GST at 5% prescribed for "job work in relation to all food and food products OR
at the rate of 18% prescribed for "services by way of job work in relation to manufacture of alcoholic liquor for
human consumption”
Malt is a food product. It can be directly consumed as part of food preparations or can be used as an ingredient in
food products and also used for manufacture of beer and alcoholic liquor for human consumption. However,
irrespective of end-use, conversion of barley into malt amounts to job work in relation to food products.
It is hereby clarified that job work services in relation to manufacture of malt are covered under “job work in relation
to all food and food products irrespective of the end use of that malt and attracts 5% GST.

CA Rajkumar
Chap. 25: Supplementary/MISC.: Provisions

Whether District Mineral Foundations Trusts (DMFTs) set up by the State Governments are Governmental
Authorities and thus eligible for the same exemptions from GST as available to any other Governmental Authority.

DMFTs work for the interest and benefit of persons and areas affected by mining related operations by regulating
receipt and expenditure from the respective Mineral Development Funds created in the concerned district.
They provide services related to drinking water supply, environment protection, health care facilities, education,
welfare of women and children, supply of medical equipment etc.
The ultimate users of the various schemes under DMF are individuals, families, women and children,
farmers/producer groups, SHGs of the mining affected areas etc.
The services/supplies out of DMF fund are provided free of charge and no consideration is realized from the
beneficiaries by DMF against such services.
Accordingly, it is clarified that DMFT set up by the State Governments are Governmental Authorities and thus eligible
for the same exemptions from GST as available to any other Governmental Authority.

Whether supply of pure services and composite supplies by way of horticulture/horticulture works (where the
value of goods constitutes not more than 25 per cent of the total value of supply) made to CPWD are eligible for
exemption from GST

Public parks in government residential colonies, government offices and other public areas are developed and
maintained by CPWD.
Maintenance of community assets, urban forestry, protection of the environment and promotion of ecological
aspects are functions entrusted to Panchayats and Municipalities under Article 243G and 243W of the constitution.
Notification No. 12/2017- exempt pure services and composite supply of goods and services in which value of goods
does not constitute more than 25%, that are provided to the Central Government, State Government or Union
territory or local authority by way of any activity in relation to any function entrusted to a Panchayat under article
243G of the Constitution or in relation to any function entrusted to a Municipality under article 243W of the
Constitution.
Accordingly, it is clarified that supply of pure services and composite supplies by way of horticulture/horticulture
works (where the value of goods constitutes not more than 25 per cent of the total value of supply) made to CPWD
are eligible for exemption from GST

CA Rajkumar
Custom Laws
And

FTP, 2023
Chap. 5: Import and Export Procedure

5 Import and Export

Procedure

Section 29: Arrival of vessels and aircrafts in India

Calling or Landing at Custom port or airport only

The person-in-charge of a vessel or an aircraft entering India from any place outside India shall not allowed
the vessel or aircraft to call or land, for the first time after arrival in India or at any time thereafter, at non
custom port or airport unless permitted by the Board.
Note: Even though section 29 is not applicable on vehicles in literal meaning but it should be reasonably
presumed that while arriving by Land Route, the vehicle should come by approved routes to “Land Customs
Station” only to avoid confiscation of goods.

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 Chap. 5: Import and Export Procedure

Section 47: Clearance of goods for home consumption

1. Issuance of Clearance order / out of charge order is to be issued by the custom officer or by custom
clearance order automated system after ensuring that goods are not prohibited and import duty, charges
etc. are paid in full.

2. Time of Normal Payment System: @ PREPAID MANNER

Payment of a) Self - assessment done - make payment of dues on the date of filing of bill of entry - file
dues bill of entry.
b) Later on Reassessment done by officer – need to pay differential amount within 1
WORKING DAY (if amount increased)
Deferred payment plan: CLEAR FIRST PAY LATER FACILTY FOR SPECIFIED IMPORTER
 AUTHORISED ECONOMIC OPERATOR [PROGRRAME,
 Authorised Public Undertaking (approved by the Directorate of International
Customs under the CBIC)
@ POST PAID MANNER [BENEFITS: Ease of doing business, Just in time purchase, etc ]
Bill of Entry Return : Date By C/O GRACE Due Date Pay of ID
Eg. AUG (1st of month 15th of month) + 1 Day = 16 th Aug.
(16th of month End of month) + 1 Day = 1 st Sep.
MARCH (1st march 15th march) + 1 Day = 16th march
MONTH (16th march 31st march) …. = 31 st march
However, where the Central Government may, under exceptional circumstances, allow
payment to be made on a different due date.
Note: If dues are not paid by due date then interest @15% PA shall be levied moreover if
specified person not to make payment on time (for 2 or more times) in a consecutive
period of 3 months
 Then such person shall not be permitted to make payment under deferred
payment scheme
 However will be available on payment of duty, interest and penalty.

CA Rajkumar
Chap. 5: Import and Export Procedure

Moreover, the eligible importer shall be permitted to make the deferred payment if he
has
-paid the duty for a bill of entry within due date as specified above and
-paid the differential duty for the same bill of entry along with the interest on account of
reassessment within one day (excluding holidays).

3. Mode of E –Payment mandatory where:

payment a) Amount of duty per bill of entry is Rs 10,000 or more.
b) Importer is registered under Authorised Economic Operator Programme.

Section 48: Sale of Imported Goods, if not cleared within

30 days

HOME CONSUMPTION
IF THE GOODS ARE NOT CLEARED FOR WAREHOUSING
TRANS-SHIPMENT

SALE OF IMPORTED GOODS

- Animals Arms & Ammunitions

- Perishable goods Other Goods
- Hazardous Goods

Relinquished goods Other than

Relinquished
Goods

TIME OF ANY TIME EVEN WITH 30 GOVT WILL ANY TIME AFTER ANY TIME AFTER
SALE: DAYS DECIDE RELINQUISHMENT 30 DAYS PLUS
EXTENSION
P ERMISSION CO REQUIRED GOVT WILL CO REQUIRED CO REQUIRED
OF DECIDE
NOTICE TO YES GOVT WILL N.A. YES
IMPORTER: DECIDE

CA Rajkumar
Chap. 5: Import and Export Procedure

EXPORT PROCEDURE
Procedure for exporter
Entry of goods for The exporter of any goods shall make entry thereof by presenting on the customs
exportation (Sec. 50) automated system to the proper officer in the case of goods to be exported in a
vessel or aircraft, a shipping bill, and in the case of goods to be exported by land, a
bill of export in such form and manner as may be prescribed.
Entry in other mode: The Commissioner of Customs may, in cases where it is not
feasible to make entry by presenting on the customs automated system allow an
entry to be presented in any other manner.
The exporter who presents a shipping bill or bill of export under this section shall
ensure the following, namely:-
(a) the accuracy and completeness of the information given therein;
(b) the authenticity and validity of any document supporting it; and
(c) compliance with the restriction or prohibition, if any.
Assessment Document submitted is processed by custom authorities and followings are checked,
(Sec17/18)  Value and classification of goods.
 Export duty or cess applicable.
 Exportability of goods under FTP.
Clearance Order (1) Where the proper officer is satisfied that any goods entered for export are not
(Sec. 51) prohibited goods and the exporter has paid the duty, if any, assessed thereon and
any charges payable under this act in respect of the same, the proper officer may
make an order permitting clearance and loading of the goods for export.
Order through Custom Automated system: Such order may also be made
electronically through the customs automated system on the basis of risk evaluation
through appropriate selection criteria.
Deferred payment facility: The Central Government may, permit certain class of
exporters to make deferred payment of said duty or any charges as per prescribed
manner.
(2) Where the exporter fails to pay the export duty, either in full or in part, by such
due date, he shall pay interest on said duty not paid or short-paid till the date of its
payment at the rate of 15% PA.
Section 51A: (1) Every deposit made towards duty, interest, penalty, fee or any other sum
Payment of duty, payable by a person, using authorised mode of payment shall be credited to the
interest, penalty, etc electronic cash ledger of such person.
THROUGH

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 Chap. 5: Import and Export Procedure

ELECTRONIC CASH (2) The amount available in the electronic cash ledger may be used for making any
LEDGER payment towards duty, interest, penalty, fees or any other sum payable in
prescribed manner.
(3) The balance in the electronic cash ledger, after payment of duty, interest,
penalty, fee or any other amount payable, may be refunded.
(4) If the Board is satisfied that it is necessary or expedient so to do, it may, by
notification, exempt the deposits made by such class of persons or with respect to
such categories of goods, as may be specified in the notification, from all or any of
the provisions of this section.
The CBIC on being satisfied that it is necessary and expedient so to do, hereby
exempts the deposits,- w.e.f. 1st October, 2023, from all of the provisions
of section 51A

I. with respect to goods imported or exported in customs stations where customs

automated system is not in place ;

II. with respect to accompanied baggage ;

III. Any Payment other than Followings

(a) any duty of customs, including cesses and surcharges levied as duties of
customs;

(b) IGST; Compensation Cess

(c) interest, penalty, fees or any other amount payable under the said Act, or
the Customs Tariff Act, 1975.
Section 51B: Ledger (1) Credit in lieu of remission of duty/tax and other financial benefit: The Central
AND ELECTRONIC Government may, specify the manner in which it shall issue duty credit,-
DUTY CREDIT (a) In lieu of remission of any duty or tax or levy, chargeable on any material used
LEDGER for duty in the manufacture or processing of goods or for carrying out any operation on
credit such goods in India that are exported; or
(b) In lieu of such other financial benefit subject to such conditions and restrictions
as may be specified therein.
(2) Credit maintained at custom automated system: The duty credit shall be
maintained in the customs automated system in the form of an electronic duty
credit ledger of the person who is the recipient of such duty credit.
(3) Use of credit for custom duties purpose: The duty credit available in the
electronic duty credit ledger may be used by the person to whom it is issued or the
person to whom it is transferred, towards making payment of duties payable under
this Act or under the Customs Tariff Act, 1975.

CA Rajkumar
 Foreign Trade Policy, 2023
[Not Relevant]

Reference of chapter of FTP amended in case of concessional duty payable for re- importation
of goods exported under duty drawback, exported for repairs etc.

For the words “Any Reward Scheme of Chapter3” the words “Any Scheme of Chapter 4 of
Foreign Trade Policy 2023.

Thank you

Wish you All the Very Best

CA Raj kumar : 9810012161

Reach us at: www.carajkumar.com