BY- JP GARG SIR COMMERC MERI JAAN

HISTORY/GENESIS OF GST
2000  Atal Bihari Vajpayee (PM of India) mooted the concept of GST & set up a committee to
design GST model for India.

2003  CG formed a task force under Vijay Kelkar.

2004  Idea of fully integrated National GST was mooted by Kelkar Task Force based on VAT.
Taskforce was headed by Vijay L. Kelkar who was advisor to Finance Ministry.

Feb 2006  Union Finance Minister, Shri P. Chidambaram announced that GST would be
introduced from 1st April 2010 while presenting Central Budget (2006-07).

Mar 2011  The Constitution (115th Amendment) Bill, 2011 was introduced in Lok Sabha to give
concurrent taxing powers to Union & States. This Bill was subsequently lapsed.

Mar 2013  GSTN: A not for Profit, Non-Government, Private Ltd Company was incorporated
named Goods & Services Tax Network (GSTN) as Special Purpose Vehicle to provide
IT infrastructure & services for implementation of GST.

Dec 2014  The Constitution (122nd Amendment) Bill, 2014 seeking to amend Constitution to
introduce GST was introduced on 19th Dec 2014.

6 May 2015  The Constitution Amendment (122nd) Bill was passed by Lok Sabha on 6 May 2015.

3 Aug 2016  It was passed by Rajya Sabha on 3rd August 2016 (with some changes).

8 Aug 2016  Changes made were unanimously passed by Lok Sabha on 8th Aug 2016.

8 Sept 2016  After Bill was adopted by majority of the State Legislatures (by atleast 50% of the States),
final assent of President of India was given on 8th Sep, 2016; &
 The Constitution (122nd Amendment) Bill, 2014 became (101st Amendment) Act, 2016.

1 July 2017  GST law was made applicable in India from 1 July 2017.

8 July 2017  GST law was made applicable to J&K from 8 July 2017.

 Concept of GST was introduced first of all in France in 1954.

 India has adopted its GST model from Canada (DUAL GST Model).

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 BY- JP GARG SIR COMMERC MERI JAAN

BENEFITS OF GST IN INDIA [One Nation, One Tax, One Market]

 Creation of Unified national market.
 Mitigation of cascading effect.

 Elimination of double (multiple) taxation  Removal of many Indirect taxes.

 Boost to ‘make in India’ initiative  Since Lower cost due to reduced taxes.

 Increase in government revenue  Since rates of GST are lower & thus more people will pay tax.

 It will boost export & manufacturing & thus generate more employment, leading to rise in GDP.

WHAT MAKES GST SO SPECIAL? → SEAMLESS FLOW OF CREDIT IN GST

 Since GST is destination based consumption tax, revenue of SGST ordinarily accrues to consuming States.
 Inter-State supplier in exporting State is allowed to set off the available credit of IGST, CGST &
SGST/UTGST (in that order) against the IGST payable on inter-State supply made by him.
 Buyer in importing State is allowed to avail the credit of IGST paid on inter-State purchases made by
him. Thus, unlike earlier scenario where the credit chain used to break in case of inter-State sales due
to non-VATable CST, under GST regime there is a seamless credit flow in case of inter-State supplies too.
 Revenue of inter-State sale does not accrue to the exporting State & exporting State transfers to the
Centre the credit of SGST/UTGST used in payment of IGST.
 The Centre transfers to the importing State the credit of IGST used in payment of SGST/UTGST.
Let us understand this whole process with the help of the example given below:
 BY- JP GARG SIR COMMERC MERI JAAN
A. INTRA-STATE SUPPLY: Supplier would charge dual GST [CGST + SGST] at specified rates
1. Supply of goods/services by A to B
Particulars Amount
Value charged for supply of goods/services Rs. 10,000
Add: CGST @ 9% + SGST @ 9% Rs. 900 + Rs. 900
Total price charged by A from B for local supply of goods/ services Rs. 11,800
CGST & SGST charged on B for supply of G/S will be remitted by A to appropriate account of CG & SG respectively.
A is the first stage supplier of goods/services and hence, does not have credit of CGST, SGST or IGST.
2. Supply of goods/services by B to C – Value addition @ 20%
B will avail credit of CGST & SGST paid by him on the purchase of goods/services from A & will utilise such credit
for being set off against CGST & SGST payable on the supply of goods/services made by him to C.
Particulars Amount
Value charged for supply of goods/ services (Rs. 10,000 x 120%) Rs. 12,000
Add: CGST @ 9% + SGST @ 9% Rs. 1080 + Rs. 1080
Total price charged by B from C for local supply of goods/ services Rs. 14160

Computation of CGST, SGST payable by B to Government

Particulars Amount
CGST payable Rs. 1080
Less: Credit of CGST Rs. 900
CGST payable to Central Government Rs. 180
SGST payable Rs. 1080
Less: Credit of SGST Rs. 900
SGST payable to State Government Rs. 180
Statement of revenue earned by CG & SG
Transaction Revenue to CG Revenue to SG
Supply of goods/services by A to B 900 900
Supply of goods/services by B to C 180 180
Total 1080 1080

B. INTER-STATE SUPPLY: Supplier would charge IGST at specified rates on the supply.
1. Supply of goods/services by X of State 1 to A of State 1
Particulars Amount
Value charged for supply of goods/services Rs. 10,000
Add: CGST @ 9% + SGST @ 9% Rs. 900 + Rs. 900
Total price charged by A from B for local supply of goods/ services Rs. 11,800
A is the first stage supplier of goods/services and hence, does not have credit of CGST, SGST or IGST.
2. Supply of goods/services by A of State 1 to b of State 2 – Value addition @ 20%
Particulars Amount
Value charged for supply of goods/ services (Rs. 10,000 x 120%) Rs. 12,000
Add: IGST @ 18% Rs. 2160
Total price charged by A from B for inter-state supply of goods/ services Rs. 14160
Computation of IGST payable to Government
Particulars Amount
IGST payable Rs. 2160
Less: Credit of CGST Rs. 900
Less: Credit of SGST Rs. 900
IGST payable to Central Government Rs. 360

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 BY- JP GARG SIR COMMERC MERI JAAN
IGST charged on B of State 2 for supply of goods/services will be remitted by A of State 1 to the appropriate
account of CG. State 1 (Exporting State) will transfer SGST credit of Rs. 900 utilised in payment of IGST to CG.
3. Supply of goods/services by B of State 2 to C of State 2 – Value addition @ 20%
B will avail credit of IGST paid by him on the purchase of goods/services and will utilise such credit for being
set off against the CGST and SGST payable on the local supply of goods/services made by him to C.
Particulars Amount
Value charged for supply of goods/ services (Rs. 12,000 x 120%) Rs. 14,400
Add: CGST @ 9% Rs. 1,296
Add: SGST @ 9% Rs. 1,296
Total price charged by B from C for local supply of goods/services Rs. 16,992

Computation of CGST, SGST payable to Government

Particulars Amount
CGST payable Rs. 1,296
Less: Credit of IGST Rs. 1,296
CGST payable to Central Government Rs. Nil
SGST payable Rs. 1,296
Less: Credit of IGST (Rs. 2,160 – Rs. 1,296) Rs. 864
SGST payable to State Government Rs. 432
Note: CG will transfer IGST credit of Rs. 864 utilised in payment of SGST to State 2 (Importing State).
Statement of revenue earned by CG & SG
Transaction Revenue to CG Revenue to SG1 Revenue to SG 2
Supply of goods/services by X to A 900 900
Supply of goods/services by A to B 360
Transfer by State 1 to Centre 900 (900) 432
Supply of goods/services by B to C 864
Transfer by Centre to State 2 (864) 1,296
Total 1,296 Nil

TAXES TO BE SUBSUMED IN GST

Central Taxes State Taxes
Central Excise Duty State VAT (Sales Tax)
Central Sales Tax [levied by CG; collected by SG] Central Sales Tax [levied by CG; collected by SG]
Additional Duties of Excise (Goods of special Entry tax (all forms), Octroi or Local Body Tax.
importance)/(textile & textile products)
Excise Duty on Medicinal & Toilet Preparation Taxes on Lottery, Betting & Gambling
Additional duties of Customs (CVD) Purchase Tax & Luxury Tax
Special Additional duties of customs (SAD) Tax on advertisements
Service Tax Entertainment Tax (except those levied by local bodies)
Central Surcharge & Cess so far as they relate to State Surcharge & Cess so far as they relate to supply
supply of Goods & Service [Ex: KKC, SBC, EC] of Goods & Service

TAXES NOT TO BE SUBSUMED (i.e these Taxes will Continue to Apply)

Basics Customs Duty Excise Duty on Alcohol Electricity Duty
Stamp Duty & Property Tax Excise Duty on Petroleum Products
 BY- JP GARG SIR COMMERC MERI JAAN
ABOUT CONSTITUTION OF INDIA
About ‘Constitution of India’ [Not for Exams]
 India has a three-tier federal system comprising the Union Government, SGs & Local Government.
 Constitution of India is supreme law of India. All other laws made are subordinate to it.
 It consists of a Preamble, 25 parts containing 448 Articles & 12 Schedules.
 Power to levy & collect taxes emerges from Constitution of India.
 If any law is not in conformity with Constitution, it is called ultra vires & is illegal & void.
CONSTITUTIONAL PROVISIONS FOR TAXATION PURPOSE
Article Provision
265  It states that “no tax shall be levied or collected except by authority of law”.
245  It deals with relationship between Union & States.
1. Power to enact laws is conferred on Parliament & on State Legislature. It states that
Parliament may make laws for whole or any part of territory of India, & State
legislature may make laws for whole or any part of State.
2. No law made by Parliament shall be deemed to be invalid on ground that it would have
extra-territorial operation.
246  It gives the respective authority to Union & SG to levy tax.
 Seventh Schedule: It is classified into three lists:
List I [Union List] Matters on which Parliament (CG) has exclusive right to make laws.
List II [State List] Matters on which State legislatures has an exclusive right to make
laws.
List III Matters on which both Parliament & State have powers to make
[Concurrent List] laws.

246A(1)  Concurrent power to levy GST has been given to Parliament & State.
246A(2)  Exclusive power of Parliament (for Inter – State supply  IGST).

FRAMEWORK OF GST IN INDIA (Dual GST)

Dual GST  India has adopted a Dual GST model as followed in Canada & Brazil.
 Centre & States simultaneously levy GST on taxable supply of G/&S which takes place
within a State/UT.
 Now, Centre has power to tax Intra-State Sales & States have power to tax services.

GST in  GST in India comprises of:

India
Intra State Supply
CGST  levied & collected by Central Government. CGST Act, 2017
SGST  levied & collected by SGs or UTs with State SGST Act, 2017
Legislatures (Delhi & Puducherry (Pondicherry).
UTGST  levied & collected by UTs without State Legislatures UTGST Act,
2017
Inter State Supply
IGST  Levied & collected by CG on all inter-State supplies. ITGST Act,
 IGST will be apportioned b/w CG & SG in manner 2017
provided by Parliament as per recommendation of GST
Council. [Article 269A]
 Note: IGST = CGST + SGST/UTGST (approx).
Note: Import of G/&S into India will be deemed to be Inter-State supply of G/&S.
 BY- JP GARG SIR COMMERC MERI JAAN
GST Acts  There are 35 GST Acts in India
Name of the Act No. of Act Tax
Central Goods & Services Tax Act, 2017 1 CGST
State Goods & Services Tax Act, 2017 31 SGST
Union Territory Goods & Services Tax Act, 2017 1 UTGST

Integrated Goods & Services Tax Act, 2017 1 IGST

The GST (Compensation to States) Act, 2017 1 GST Compensation Cess
 Though there are multiple SGST legislations, basic features of law (Ex: Chargeability,
Definition of taxable event & taxable person, classification & valuation of G&S, procedure
for collection & levy of tax etc). are uniform in all SGST legislations, (if feasible).
GST  CGST & SGST would be levied at rates to be jointly decided by CG & SG on
Rates recommendations of GST Council.
 Rates of IGST shall be decided by the Centre on the recommendations of the GST Council.
 Highest (Peak) rates of CGST & IGST have been provided in the law @ 20% and 40%.
 Tax rates have been fixed at 5%, 12%, 18% and 28%. Other rates are 0%, 0.25% & 3%.
Revenue Neutral Rate Basic Essential Demerit & Luxury Goods
Necessities Goods
18% 12% 5% 28% + Cess

WHAT IS GST?
 Goods & services tax means any tax on supply of G/&S except on alcoholic liquor for human consumption.
 Presently, GST is levied on all G/&S except alcoholic liquor for human consumption & Petroleum crude,
diesel, petrol, ATF and natural gas.

 GST will be levied on Petroleum Products (Petroleum crude, High Speed Diesel, Motor Spirit, Natural Gas
& Aviation Turbine Fuel) from Notified Date on recommendation of GST Council.
Note: Nothing is notified till now & thus NO GST will be levied on above products on date.
Till such Notified date, Central Excise Duty will continue to be levied on Manufacture/Production of
Petroleum Products & their Inter/Intra-State Sale is subject to CST/VAT respectively.
 Position of Some Specific Goods as on the date:
Goods Excise Duty VAT/CST GST
Alcoholic liquor for Human Consumption   ⌧
Petroleum crude, HSD, Motor Spirit, Natural Gas, ATF   ⌧
Tobacco & Tobacco Products  ⌧ 
Other Goods ⌧ ⌧ 
Note: Real estate sector has been kept out of ambit of GST. [GST will not be levied on sale/purchase of
immovable property].

CLASSIFICATION OF GOODS AND SERVICES

 HSN (Harmonised System of Nomenclature) is used for classifying the goods under the GST.
 Chapters referred in Rate Schedules for goods are Chapters of First Schedule to Customs Tariff Act, 1975.
 A new Scheme of Classification of Services has been devised wherein the services of various descriptions
have been classified under various sections, headings & groups.
 Each group consists of various Service Codes (Tariff).

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 BY- JP GARG SIR COMMERC MERI JAAN
GST COMPENSATION CESS
 GST (Compensation to States) Act, 2017 provides for a mechanism to compensate the States on account
of loss of revenue which may arise due to implementation of GST for a period of 5 years.
 It is levied by Central Government on Notified goods only on Intra/Inter state supply.
 It is levied on Specified Luxury items or Demerit Goods, like pan masala, tobacco, aerated waters, Coal,
Lignite, Motor Cars etc., computed on value of taxable supply.

GST Council: Article 279A

Constitution  Article 279A empowers President to constitute a joint forum of Centre & States.
&  The provisions relating to GST Council came into force on 12th September, 2016.
Enforcment
 The President constituted GST Council on 15th September, 2016.
 Chairman of GST Council  Union Finance Minister.
 Members of GST council  Union Minister of State in charge of Revenue/Finance,
Ministers in charge of Finance/Taxation or any other Minister nominated by each States
& UTs with SL.
Functions Make recommendations to Union & States on important issues like
(a) taxes, cesses & surcharges which may be subsumed in GST;
(b) Goods & Services that may be subjected to, or exempted from GST;
(c) Model GST Laws, Principles of levy, apportionment of GST & the principles that govern
the place of supply;
(d) Threshold limit of turnover below which G&S may be exempted from GST;
(e) Rates including floor rates with bands of GST;
Note: ◾ Tax rates; ◾ Exemptions; ◾ Threshold limits; ◾ Dispute resolution; ◾ GST legislations.
Decision  Every decision of GST Council is taken by a majority of not less than ¾th of weighted
votes of members present & voting.
 Vote of Centre has a weightage of 1/3rd of total votes cast &
 Votes of all SGs together has a weightage of 2/3rd of total votes cast, in that meeting.
Article  Special Category States → Assam, AP, J&K, Manipur, Meghalaya, Mizoram [MMM],
279A(4)(f) Nagaland, Sikkim, Tripura, Himachal Pradesh (HP), Uttrakhand (UK).
Article  GST council shall recommend the date on which GST shall be levied on Petroleum
279A(4)(g) crude, High speed diesel, Motor spirit, Natural gas & Aviation Turbine Fuel.

GST COMMON PORTAL & GSTN

GST Common  Common GST Electronic Portal (www.gst.gov.in) a website managed by Goods &
Portal Services Network has been set by the Government to establish uniform interface
for taxpayer; common & shared IT infrastructure b/w the Centre & States.
 This portal is one single common portal for all GST related services.
 It acts as a clearing house to verify claims & informs the respective governments
to transfer funds.
 A common GST system provides linkage to all State/ UT Commercial Tax
Departments, Central Tax authorities, Taxpayers, Banks & other stakeholders.
 The eco-system consists of all stakeholders starting from taxpayer to tax
professional to tax officials to GST portal to Banks to accounting authorities.

Accessibility of  It is accessible over Internet by taxpayers & their CAs/Tax Advocates & over
Portal Intranet by Tax Officials etc.

Front end services GSTN provides 3 front end services (i) Registration (ii) Payment; (iii) Return.

8
 BY- JP GARG SIR COMMERC MERI JAAN
GOODS & SERVICE TAX NETWORK
What is GSTN  GSTN is a non-Government, private limited company formed u/s 8 of Companies
Act, 2013, (not for profit companies).
 It is backbone of technology used for GST.

Functions of  Facilitating registration; [Filing of application]

GSTN [IMP]
 Forwarding returns to CG & SG authorities; [Filing of Return]
 Computation & Settlement of IGST payment [Like a Clearing House]
 Matching of tax payment details with banking network;
 Providing various MIS reports to CG & SG based on taxpayer return information;
 Creation of Challan for tax payment
 Providing analysis of taxpayers' profile; & running matching engine for matching,
reversal & reclaim of input tax credit.
Note: All statutory functions like approval of registration, assessment, audit, appeal,
enforcement etc. will remain with respective tax departments.

GST SUVIDHA PROVIDERS/ASPs

 GSTN has selected certain IT, ITeS & financial technology companies, to be called GST Suvidha
Providers (GSPs).
 GSPs develop applications to be used by taxpayers for interacting with GSTN.
 They facilitate the taxpayers in uploading invoices as well as filing of returns and act as a single stop
shop for GST related services.
 They customize products that address the needs of different segment of users.
 GSPs may take the help of Application Service Providers (ASPs) who act as a link b/w taxpayers & GSPs.

9
BY- JP GARG SIR COMMERC MERI JAAN

MCQ’S
Q. 1. __________ was first country to adopt GST (a) To bring uniformity of taxes in the country
as indirect system of taxation. (b) To increase the government revenue
(a) France (c) To replace all indirect taxes
(b) Germany (d) All of the above
(c) UK Ans:-
(d) India
Ans:- Q. 9.Which article of the Constitution outlines the
composition and functions of the GST Council ?
Q. 2. The GST is recommended by the __________ on (a) 270
implementation of the Fiscal Responsibility and (b) 279-A
Budget Management (FRBM) Act, 2003 (c) 246-A
(a) Kelkar Task Force (d) 269-A
(b) Chidambaram Task Force Ans:-
(c) Jaitely Task Force
(d) None of the above Q. 10 GSTN is a -----------
Ans:- (a) Non-profit organisation
(b) Profit organisation
Q 3:- What kind of tax can be transferred from one (c) None of the above
person to another? (d) One Person company
(a) Direct tax Ans :-
(b) Indirect tax
(c) Both of the above Q 11:- from the following who will be the members of
(d) None of the above the GST Council?
Ans:- 1. Union Finance Minister
2. Union Minister of State in charge of Revenue or
Q 4:- What is the difference between a direct & an Finance
indirect tax? 3. Chief Ministers of States
(a) Charge of levy (a) 1 & 3
(b) Nature of transfer (b) 1 & 2
(c) Different collection pattern of tax (c) 2 & 3
(d) All of the above (d) All of the above
Ans:- Ans:-

Q 5:- When did the GST act come into force? Q 12:- Who amongst the following will be considered
(a) Year 2015 as the chairman of GST Council ?
(b) Year 2016 (a) Union Minister of State
(c) Year 2017 (b) Union Finance Minister
(d) None of the above (c) Minister of state revenue
Ans:- (d) Chief Minister of state
Ans:-
Q 6:- Which of the following constitutional
amendment governs GST act? Q 13:- Which of the following functions are
(a) 101 st amendment, performed by Goods & Service Network
(b) 122 nd amendment, (GSTN)?
(c) 152 nd amendment (a) Facilitating registration
(d) 140 th amendment, (b) Computation & settlement of IGST
Ans:- (c) Matching of tax payment details with banking
network
Q 7:- What kind of tax is GST called as..? (d) All of the above
(a) Consumption based tax Ans:-
(b) Movement based tax
(c) Destination based tax Q 14:- What does dual GST concept mean?
(d) a & b both (a) Charging CGST & IGST
Ans:- (b) Charging SGST & IGST
(c) Charging both CGST & SGST
Q 8:- Which of the following is the main motive of the (d) None of the above
government behind the introduction of the Ans:-
Goods & Service tax act?
BY- JP GARG SIR COMMERC MERI JAAN

Q 15:- What kinds of taxes are subsumed under GST? Ans:-

(a) Central excise duty
(b) State VAT/Sales Tax Q.23. If a state loses revenue because of abolition of
(c) Central Sales Tax central sales tax, Central Government will pay
(d) Service Tax compensation in the form of GST compensation cess
(e) All of the above for:
Ans:- (a) 1 year
(b) 3 years
(c) 5 years
(d) 10 years.
Ans:-

Q. 24. Which of the following statement is correct ?

(A) GST is based on principle of ‘pay as you earn’.
(B) GST is a destination based tax.
(c) GST is technically paid by consumers but it is
actually funded by suppliers.
Q 17 :- Which of the following good will not be covered (D) All of the above
under the GST act? Ans:-
(a) Cooking gas
(b) Liquor
Q.25.Whether IGST revenue is to be apportioned to
(c) Petrol
(d) Both b & c above state?
(a) No
Ans:-
(b) Yes- apportioned to origin state
(c) Yes- apportioned to destination state
Q. 18:-.GST is levied on supply of all goods and
(d) Discretion of Parliament
services except:
Ans:-
(a) Alcoholic liquor for human consumption
(b) Tobacco
Q. 26.Who will legislate GST law?
(c) Health care services
(a) State Legislature
(d) All of the above
(b) Parliament
Ans:-
(c) Both
(d) Depends upon nature of supply
Ans:-

Q. 27.Presently GST law/Act extends to —

(a) All States (except the State of J&K)
(b) All States as well as all Union territories
(c) All States (except the State of J&K) and All Union
territories
(d) All States (except the State of Telangana) but
including Union territories
Ans:-

Q. 28.The recommendation of the GST Council will be

__________ .
(a) Mandatory
(b) Only Advisory Power
Q 21:- Who will notify the rate of tax to be levied under
(c) Mandatory and sometimes Advisory
CGST? (d) Mandatory on States only
(a) Central government suo moto Ans:-
(b) State government suo moto
(c) GST council suo moto Q.29. Which One of the following states does not fall
(d) Central government as per recommendations of
under special category given under Article 279A of
the GST council
the Constitution
Ans:- (a) Himachal Pradesh
(b) Uttarakhand
Q 22:- The proceeds of the GST Compensation Cess (c) Chhattisgarh
leviable under section 8 shall be distributed (d) Jammu & Kashmir
among States as and when collected. Ans:-
a) Yes
b) No
BY- JP GARG SIR COMMERC MERI JAAN

Q. 30.Goods and Services Tax (Compensation to

the States) Act, 2017 is popularly known as -
---------.
a) GST CSA Ans:-
b) GST Compensation Cess Act
c) GST Cess Act Q. 37.The items which will be taxable both under
d) GST Compensation Act current Central Excise Law and GST even
Ans:- after the implementation of the GST Act.
(a) Motor Spirit
Q 31. GST is levied on which of the following? (b) Alcoholic Liquor for Human Consumption
(a) Sale of goods (c) Tobacco and Tobacco Products
(b) Manufacture of goods (d) Natural Gas
(c) Provision of services Ans:-
(d) Supply of goods/ services
Ans:- Q 38:- ITC of CGST can be utilised for payment of
(a) Only CGST
Q 32:- Which of the following would attract levy (b) Only SGST
of CGST & SGST? (c) 1st CGST & then IGST
(a) Inter-state supplies (d) 1st SGST & then IGST
(b) Intra-state supplies Ans:-
(c) Any of the above
(d) None of the above Q 39:- ITC of SGST can be utilised for payment of
Ans:- (a) Only CGST
(b) Only SGST
Q 33:- What are the taxes levied on an intra-state (c) 1st CGST & then IGST
supply? (d) 1st SGST & then IGST
(a) CGST Ans:-
(b) SGST
(c) CGST & SGST Q 40:- ITC of IGST can be utilised for payment of
(d) IGST (a) Only CGST
Ans:- (b) Only SGST
(c) Only CGST & SGST
Q. 34. If any supply made by a trader from Delhi (d) 1st IGST then CGST & SGST in any order
to another trader in Delhi, the supply will be Ans:-
subject to:
(a) CGST and SGST Q. 41. For purposes of GST law, the territory of
(b) CGST and UTGST “India” shall be taken to cover up following:
(c) IGST (a) Sea Area upto 12 nautical miles from base line
(d) SGST and UTGST. (b) Sea Area upto 200 nautical miles from base
Ans:- line
(c) Air space above its territory and territorial
Q 35:- Which of the following supplies will be waters
classified as Inter-state supply? (d) All of the above
(a) Supply within same state Ans:-
(b) Supply within same union territory
(c) Supply between two different states/ Q.42. Which of the following is not the role of GSTN
union territory in GST regime?
(d) None of the above (a) Facilitating registration, forwarding return to
Ans:- Central and State authorities.
(b) Computation and Settlement of IGST, matching
tax payment details with banking network
(c) Providing platform for litigation
(d) Providing various MIS reports to Central and
State Governments, providing analysis on tax
BY- JP GARG SIR COMMERC MERI JAAN

Q. 46. Alcoholic liquor for human consumption

is subjected to
a. State excise duty
b. Central Sales Tax/Value Added tax
c. Both a and b
d. All of the above
Ans:-

Q. 47. Taxes subsumed in GST are

a. Service Tax
b. Luxury Tax
c. VAT
d. All of the above
Ans:-

Answer:-

1 a 11 b 21 d 31 d 41 d

2 a 12 b 22 b 32 b 42 c

3 b 13 d 23 c 33 c 43

4 d 14 c 24 b 34 a
5 c 15 e 25 c 35 c
6 a 16 d 26 c 36 46 c

7 c 17 d 27 b 37 c 47 d

8 d 17 a 28 b 38 c
9 b 29 c 39 d

10 a 30 b 40 d
 RPSC ASSISTANT PROFESSOR –

JP GARG SIR

❑ Pursuing PhD in Commerce

❑ Cleared UGC NET JRF
❑ Cleared 2 TIMES UGC NET
rd
❑ Got 3 AIR IN JR. ACCOUNTANT EXAM OF AVVNL IN 2018
❑ Cleared H.TET
❑ B.ED
❑ CA IPCC
❑ Post Graduate in Commerce (ABST) from Rajasthan University,
Jaipur.
❑ Having experience of more than 8 yrs. for providing classes at
various leading institute of Jaipur.

• Pattern of Question Paper

1. Objective type paper
2. Maximum Marks : 75
3. Number of Questions : 150
4. Duration of Paper : Three Hours
5. All questions carry equal marks.
6. Medium of Competitive Exam : Bilingual in English & Hindi
7. There will be Negative Marking.
 BY- JP GARG SIR APP- COMMERCE MERI JAAN
SOME IMPORTANT DEFINITIONS
Goods [Sec 2(52) of CGST Act]

 means every kind of ‘Movable Property’ other than ‘Money & Securities’
 includes ‘Actionable Claim’, growing crops, grass & things attached to or forming part of the land
which are agreed to be severed before supply or under contract of supply.

Services [Sec 2(102) of CGST Act]

 means anything other than goods, money & securities;

 but includes
1. Activities relating to use of money or Conversion of Money by cash or by any other mode,
2. Conversion of Money from one form/currency to another form/currency/denomination.
for which a separate consideration is charged.
Explanation: ‘Services’ includes facilitating or arranging transactions in securities. [AMD]

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 BY- JP GARG SIR APP- COMMERCE MERI JAAN
Business [Sec 2(17)] Business includes: ↓
(a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar
activity (whether or not it is for a pecuniary benefit);
(b) any activity or transaction in connection with or incidental or ancillary to (a) above
(c) any activity or transaction in the nature of (a) above, whether or not there is volume, frequency,
continuity or regularity of such transaction;
(d) supply or acquisition of goods including capital assets & services in connection with commencement
or closure of business;
(e) provision by a club, association, society, or any such body (for a subscription or any other
consideration) of the facilities or benefits to its members;
(f) admission of persons to any premises for a consideration;
(g) services supplied by a person as the holder of an office which has been accepted by him in the course
or furtherance of his trade, profession or vocation;
(h) activities of a race club including by way of totalisator or a license to book maker or activities of a
licensed book maker in such club [AMD]
(i) any activity or transaction undertaken by the Central Government, a State Government or any local
authority in which they are engaged as public authorities.
Recipient [Sec 2(93)]
Cases Recipient
If Consideration is payable for supply of G/&S Person liable to pay the consideration
If No Consideration is payable for supply of Goods Person to whom goods are delivered or made
available, or to whom possession or use of goods
is given or made available,
If No Consideration is payable for supply of Person to whom service is rendered
Services
TAXABLE PERSON
 Meaning: Person who is registered or liable to be registered u/s 22 or 24.
 Thus, even an unregistered person who is liable to be registered is a taxable person.
 A person who is not liable to be registered, but has taken voluntary registration & got himself
registered is also a taxable person.
 Supply b/w two non-taxable persons does not constitute taxable supply.
 It is not necessary that supply should be made to another person. [Supplies made to self are also
taxable].

TAXABLE EVENT UNDER GST [It determines the point at which tax would be levied]
 A taxable event is any transaction or occurrence that results in a tax consequence.
 Taxable event under GST is “Supply of Goods or Services”. [No supply  No GST]
CONCEPT OF SUPPLY [Section 7]
 Definition of ‘supply’ is an inclusive definition & does not define term exhaustively.
 Clause (a) of Section 7(1) illustrates the forms of supply, but the list is not exhaustive.
 Meaning & Scope of supply can be understood in terms of following parameters:
 Supply of Goods or Services. [Note: Supply of anything other than G&S does not attract GST].
 Supply should be made for a consideration. [Some Exceptions are there]
 Supply should be made in the course/furtherance of business [Some Exceptions are there]
 Supply should be made by a taxable person. [Recipient can be a non-taxable person]
 Supply should be a taxable supply.
 Supply should be made within taxable territory.

11
 BY- JP GARG SIR APP- COMMERCE MERI JAAN

DEFINITION OF SUPPLY [Sec 7(1)(a)]

 Supply includes all forms of supply of Goods or Services such as
 Sale (transfer of property in goods for consideration), transfer,
 Barter (Goods with goods), exchange (Goods with partly goods & partly in money),
 License, Rental, Lease (with or without transfer of right to use) [Refer Schedule-II]
 Disposal [Sale, Pledge, giving away, use, consumption or any other disposition of a thing]
made or agreed to be made for consideration in the course or furtherance of business.

 Meaning of ‘in course or furtherance of business”

 GST is a tax on only commercial transactions.
 Thus supply by individual in his personal capacity  No GST unless it falls in business.

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 BY- JP GARG SIR APP- COMMERCE MERI JAAN

IMPORT OF SERVICES FOR CONSIDERATION [Sec 7(1)(b)]

 Importation of services for a consideration whether or not in the course or furtherance of business shall
be treated as a supply.
 This is the only exception to the condition of supply being made in course or furtherance of business.

SUPPLY WITHOUT CONSIDERATION [Sec 7(1)(c) + Schedule I]

Para 1 Permanent Transfer/Disposal of Business Assets on which ITC is availed.
 This clause covers transfer of business assets from HC to SC for nil consideration.

Note: Permanent transfer/disposal of following business assets will not be deemed as supply:
(i) Business assets on which ITC is blocked/not available under GST
(ii) Business assets though eligible for ITC, but ITC has not been availed by such RP.

Ex: Dhruv gives old laptops being used in his business to his friend free of cost. This will qualify as supply
provided input tax credit has been availed by Dhruv on such laptops.
Ex: A dealer of AC permanently transfers the motor vehicle free of cost. ITC on said motor vehicle is
blocked. This transaction will not constitute a supply as ITC has been blocked on Cars.

13
 BY- JP GARG SIR APP- COMMERCE MERI JAAN

Para 2 Supply betwen Related or Distinct Persons (if made in course or furtherance of business)
 Supply of Goods or Services b/w ‘Related persons’ or b/w ‘distinct persons’ as specified in
section 25, will qualify as supply if it is made in the course/furtherance of business.

 Related Person [Explanation to sec 15]

Persons are deemed to be related persons in the following cases:
 Such persons are officers/directors of one another’s business.
 Such persons are legally recognised partners.
 Such persons are Employer & Employee [Discussed Later in Detail]
 3rd person controls/holds (directly/indirectly) ≥ 25% voting shares of both of them
 One person controls (directly/indirectly) the other person.
 3rd person controls (directly/indirectly) both of them.
 Such person together control (directly/indirectly) a 3rd person.
 Such persons are members of the same family.
 One of them is the sole agent/sole distributor/sole concessionaire of other.
Ex: Ms. Priya holds 30% shares of ABC Ltd. & 35% shares of XYZ Ltd. ABC Ltd. & XYZ Ltd. are related.
Ex: Q Ltd. has a deciding role in corporate policy, operations management & quality control of R Ltd. It
can be said that Q Ltd. controls R Ltd. Thus, Q Ltd. & R Ltd. are related.
 Distinct Person [Section 25]
 A person who has obtained/is required to obtain more than one registration, whether in
one State/UT or more than one State/UT shall be treated as distinct persons, i.r.o each
such registration.

harashtra office to Uttarakhand office , in course or furtherance of business even without

consideration will qualify as supply.

 Stock transfers or Branch transfers (with different GST registration) = Supply

 Transactions b/w different locations (with separate GST registrations) of same legal entity.

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 BY- JP GARG SIR APP- COMMERCE MERI JAAN

 Supply of goods or services b/w an Employer & Employee

 Employer & employee are related persons as given in the definition of related person.
 However, Services provided by employee to employer in the course of employment are
not treated as supply of services [Specifically given in Schedule III of CGST Act]
 Gifts by an employer to an employee ≤ Rs. 50,000 in value in FY shall not be treated as
supply of G/&S. Thus Gifts > Rs. 50,000  GST .
Perquisites given by employer to employee: If perquisites (services) are given in the course
of Employment or provided in terms of the contract b/w the employer & employee & is part
& parcel of the cost-to company, it will not be subjected to GST.

Para 3 Supply of Goods by Principal to his Agent or Vice Versa



Invoice for further supply is issued by Provision of goods from principal to agent
Agent to customer in his own name would fall within scope of Para 3 & thus would
be treated as supply.
Agent to customer in name of principal would not fall within scope of Para 3 & thus
would not be treated as supply.

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 BY- JP GARG SIR APP- COMMERCE MERI JAAN

CLARIFICATION: Scope of ‘Principal & Agent relationship’ in context of del-credere agent

 Meaning of Del-credere Agene (DCA): DCA is an agent who guarantees payment to principal supplier.
In order to guarantee timely payment to supplier, DCA can resort to various methods including
extending short-term transaction-based loans to buyer or paying supplier himself & recovering amount
from buyer with some interest at a later date. This loan is to be repaid by buyer along with interest to
DCA @ mutually agreed rate b/w DCA & buyer.

 Whether ‘DCA’ falls under the ambit of ‘Agent’ under Para 3 of Schedule I?

Invoice for supply of goods is issued by Position of DCA

Supplier to customer (either himself or DCA does not fall under ambit of agent & thus would
through DCA) not be treated as supply.

DCA to customer in his own name DCA would fall under ambit of agent thus would be
treated as supply.

 Whether Temporary short-term transaction-based loan extended by DCA to buyer, for which
interest is charged by DCA, is to be included in value of goods supplied by supplier (principal)?
Particulars Case 1: DCA is not an agent Case 2: DCA is an agent
Invoice is issued by Supplier to buyer DCA to buyer (in his own name)
Transactions 1. Supply of goods from supplier 1. Supply of goods by supplier
involved (principal) to buyer; (principal) to DCA.
2. Supply of agency services from DCA 2. Supply of goods by DCA to buyer
to supplier or both; 3. Supply of agency services by DCA
3. Supply of extension of loan services to supplier or buyer or both
by DCA to buyer. 4. Loan services by DCA to buyer
Clarification  Short-term Loan provided by DCA to  Activity of extension of credit by
buyer is a supply of service by DCA DCA to buyer would not be
to buyer on principal to principal considered as a separate supply
basis & is an independent supply. as it is in context of supply of goods
 Therefore, interest charged by made by DCA to buyer.
DCA would not form part of the  Value of Interest for such credit
value of supply of goods supplied (to would be included in value of
the buyer) by the supplier. supply of goods by DCA to buyer.

16
ERRORLESS GST BY CA PRANAV CHANDAK @ PRANAV CHANDAK ACADEMY, PUNE
BY- JP GARG SIR APP- COMMERCE MERI JAAN
Para 4 Importation of Services
 Import of services by (a taxable) ANY Person without consideration
 from a related person or from his establishments located outside India,
 in course or furtherance of business shall be treated as “supply”.
Ex: J Associates received legal consultancy services from its head office located in Malaysia. Head office
has rendered such services free of cost to its branch office. Since J Associates & head office are related
persons, services received by J Associates will qualify as supply even though head office has not charged
anything from it.
Ex: Chaman, a proprietor registered in Delhi, has sought architect services from his son in US w.r.t his
newly constructed house in Delhi. Although services have been received by Chaman without
consideration from his son (related person), yet it will not qualify as supply since it has not been received
in course/furtherance of business.

Clarification on ‘Free samples & gifts’ → [Supply nahi hai]

 Free Samples which are supplied free of cost (without any consideration) → shall not be treated as
supply under GST (except in case of activities mentioned in Schedule I of the CGST Act).
 Input Tax Credit: ITC shall not be available to supplier on inputs, input services & capital goods to
extent they are used in relation to gifts or free samples distributed without any consideration. If activity
of distribution of gifts or free samples falls within scope of ‘supply’, on account of provisions contained
in Schedule I of said Act, supplier would be eligible to avail ITC.
Clarification on ‘Buy one & get one free offer’ → [Composite or Mixed Supply; taxed u/s 8]
 It may appear that in case of offers like ‘Buy One, Get One Free’, one item is being supplied free of cost.
 But it is a case of two or more individual supplies where a single price is being charged for entire supply.
 It can at best be treated as supplying two goods for price of one.
 Taxability of such supply will be dependent upon as to whether supply is a composite supply or a
mixed supply & rate of tax shall be determined u/s 8 of CGST Act.

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 BY- JP GARG SIR APP- COMMERCE MERI JAAN

SN Question Answer
1 Inter-State stock transfer is not subject to GST. False
2 Supply of goods is chargeable to GST. Likewise, supply of services is chargeable to GST. As both False
are chargeable to GST, distinction b/w ‘goods’ & ‘services’ has become absolutely irrelevant.
3 If consideration for supply of G/&S is nil, GST is also nil. False

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 BY- JP GARG SIR APP- COMMERCE MERI JAAN
ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES
[Sec 7(1A) + Schedule II]
Activiy/Transaction Type Supply of ↓
1 Transfer Any Transfer of Title in goods (Sale) Goods

Right to use goods without transfer of title in goods (Renting) Services

Any transfer of title in goods under an agreement which Goods

stipulates that property shall pass at future date upon payment
of full consideration as agreed. (Sale or return basis/HP basis)
2 Land & Building Lease, tenancy, easement, licence to occupy Land Services

Lease/letting out of building including a commercial, Services

industrial, residential complex (wholly/partly) for business
3 Treatment/Process Applied to another person’s goods (Job Work) Services

4 Transfer of Permanent Transfer of Business Asset (with or without Goods

Business Assets consideration)

Temporary Transfer of Business Asset (for private use/other Services

than business use) (with or without consideration)

Business Asset transferred by a person who ceases to be taxable Goods

person shall be deemed to be supplied by him, in the
course/furtherance of his business, immediately before he
ceases to be a taxable person.
Ex: Arun, a trader, is winding up his business. Any goods left in stock
shall be deemed to be supplied by him.
Exception:
(i) Business is transferred as going concern [It is Exempt]
(ii) Business carried on by personal representative.
5 (a) Renting of Immovable Property
 Renting of a commercial complex
 Renting of precincts of a religious place.
 Renting of property to an educational institution.
 Permitting use of immovable property for placing vending/dispensing machines.

(b) Construction of Complex, Building, Civil structure Except where entire

consideration has been received after issuance of completion certificate or after its Services
first occupation, whichever is earlier.
Ex: Mr PC, a promoter, sells a flat in his new building to Mr. A. Date of completion certificate
is 1.1.2019. Part of consideration is received on 31.12.2018 by Mr. PC. It will be treated as
supply. If entire consideration is received after 1.1.2019, then it would not qualify as supply.

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 BY- JP GARG SIR APP- COMMERCE MERI JAAN

(c) Temporary transfer or permitting use or enjoyment of any Intellectual Property

Right (IPR). [Ex: Temporary transfer of Patent]
(d) Development, designing, programming, customisation, adaptation, upgradation,
enhancement, implementation of IT software.
(e) Agreeing to obligation to refrain from an act, or to tolerate an act or situation, or
to do an act.
Ex: Non-compete agreement. By virtue of a non-compete agreement, one party agrees, for
consideration, not to compete with the other in any specified products, services,
geographical location or in any other manner. Such action on the part of one person is
deemed supply of service & subject to GST.
Ex: Late delivery charges recovered from supplier for non-fulfillment of contract within
stipulated time.
Ex: Notice pay recovered from employee for leaving the job before agreed period of notice
for leaving a job.
(f) Transfer of right to use any goods for any purpose.

6 Following Composite Supplies: (a) Works Contract (b) Restaurant & Catering Services
7 Supply of Goods by Unincorporated AOP/BOI to a Member for Cash, deferred Goods
Payment or other valuable consideration.

Ex: Resident Welfare Association (RWA) of a Society supplies AC to its members at a concessional price.

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 BY- JP GARG SIR APP- COMMERCE MERI JAAN

TAXABILITY OF ‘TENANCY RIGHTS’/PAGADI UNDER GST

 Transfer of tenancy right against consideration (i.e tenancy premium) is treated as supply of service.
 It is a form of lease or renting of property & is specifically declared as service in Para 2. of Sch. II
 Although stamp duty & registration charges have been levied on such transfer of tenancy rights, it is
still subject to GST since merely because a transaction involves execution of documents which requires
registration & payment of stamp duty, would not preclude them from ‘scope of supply’.
 Transfer of tenancy rights cannot be treated as sale of L/B & thus it is not a negative list activity.
Crux:
 Transfer of tenancy rights to a new tenant against consideration (tenancy premium) is taxable.
 Further, services provided by outgoing tenant by way of surrendering the tenancy rights against
consideration in the form of a portion of tenancy premium is liable to GST.
Note: Grant of tenancy rights in a residential dwelling for use as residence dwelling against tenancy
premium or periodic rent or both is exempt from tax.

NEGATIVE LIST [Sec 7(2) + Schedule III] Neither goods nor services & thus NO GST.
1. Services provided by Employee to Employer in course of or in relation to his employment
 Service provided by Casual Workers (daily basis) who are employed by employer  treated as services
provided by worker in course of employment & thus NO GST.
 Casual workers are employed by a contractor, like a building contractor or a security services agency,
who deploys them for execution of a contract or for provision of security services to a client,
respectively are services in course of employment & thus NO GST.
 Compensation for Premature Termination  treated as amounts paid in relation to services
provided by employee to employer in course of employment & thus NO GST.
 Non-Compete Fees: Any amount paid for not joining a competing business  Not in course of
employment & this liable to GST being paid for providing service of forbearance to act.
Note: Services provided on contract basis (principal to principal) are not services provided in the
course of employment & thus GST will be levied.
Ex: If employee provides his services on contract basis to associate company of employer, then these are not
services in course of employment & thus, it would be treated as supply.

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 BY- JP GARG SIR APP- COMMERCE MERI JAAN

2. Services by any Court or Tribunal established under any law for the time being in force.

3. (a) Functions performed by MPs, MLAs, Members of Panchayats/Municipalities/other LAs.

(b) Duties performed by any person who holds any post in pursuance of the provisions of Constitution
in that capacity. [Ex: President, Vice President, PM, Chief Justice, Speaker of LS, Chief Election Commissioner, C&AG
of India, Chairman of UPSC, Attorney in that capacity].
(c) Duties performed by any person as a Chairperson/Member/Director in a body established by
CG/SG/LA & who is not deemed as employee before commencement of this clause.

4. Services of funeral, burial, crematorium or mortuary including transportation of deceased.

5. Sale of Land; & [subject to para 5(b) of Schedule II] Sale of building.

6. Actionable claims, other than lottery, betting & gambling.

PC Note: Only Lottery, betting & gambling are treated as supply.
All other actionable claims are outside the ambit of definition of supply.
Some other actionable claims are: Right to recover insurance money, claim for arrears of rent etc.

Particulars Consideration Amount received during Amount received on/after

(if includes cost of land ) October 2018 November 1, 2018
Flat 1: A Ltd 92,00,000 1,00,000 91,00,000
Flat 2: B Ltd 94,00,000 94,00,000 Nil
Flat 3: C Ltd 91,00,000 Nil 91,00,000

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 BY- JP GARG SIR APP- COMMERCE MERI JAAN
Activities/transactions Notified by Government → Neither goods nor services
1. Services by way of any activity in relation to a function entrusted to a Panchayat under article 243G
or to a Municipality under article 243W of the Constitution for the said purpose.
2. Inter-State movement of various modes of conveyance b/w distinct person u/s 25(4) including:
Trains, Buses, trucks, tankers, trailers, vessels, containers, aircrafts for
(a) carrying goods or passengers or both; or
(b) Repairs & Maintenance, (Except where such movement is for further supply of same conveyance)
 Thus, above activity may not be treated as supply & IGST is not payable on such supply.
 However, applicable CGST/SGST/IGST shall be leviable on repairs & maintenance done for such
conveyance.
3. Inter-State movement of Rigs, Tools & Spares, & all goods on wheels [like cranes]
Point no. 2 shall mutatis mutandis apply to inter-State movement of rigs, tools & spares, & all goods
on wheels (except where movement of such goods is for further supply of same goods),

COMPOSITE & MIXED SUPPLIES [SECTION 8]

Composite  It comprises
Supply  two or more taxable supplies of G/&S or any combination thereof
[Sec 2(30)]  naturally bundled & supplied in conjunction with each other in ordinary course
of business
 one of which is a principal supply.
 Tax Treatment  treated as a supply of such principal supply.
 GST Rate  Rate applicable to Principal supply will be levied on whole supply.
 Principal supply: Supply of G/&S which constitutes predominant element of a
composite supply & to which other supply forming part of that composite supply is
ancillary.
Ex: When a consumer buys a television set & he also gets mandatory warranty & a maintenance
contract wit TV, this supply is a composite supply. In this example, supply of TV is the principal
supply, warranty & maintenance services are ancillary.
Ex: A travel ticket from Mumbai to Delhi may include service of food being served on board, free
insurance, & the use of airport lounge. In this case, the transportation of passenger, constitutes the
pre-dominant element of the composite supply, & is treated as the principal supply & all other
supplies are ancillary.
Mixed  It comprises
 two or more individual supplies of G/&S or any combination thereof, made in
Supply conjunction with each other by a taxable person
[Sec 2(74)]  for a single price
 where such supply does not constitute a composite supply.
 Note: Individual supplies are independent of each other & are not naturally bundled.
 Tax Treatment  treated as supply of that particular supply that attracts Highest
Rate of Tax.
Ex: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated
drink & fruit juices when supplied for a single price is a mixed supply. Each of these items can be
supplied separately & is not dependent on any other. It shall not be a mixed supply if these items
are supplied separately.
Ex: A shopkeeper selling storage water bottles along with refrigerator. Bottles & refrigerator can
easily be priced & sold independently & are not naturally bundled. So, such supplies are mixed
supplies.

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 BY- JP GARG SIR APP- COMMERCE MERI JAAN

Description Composite Supply Mixed Supply

Naturally bundled Yes No
Supplied together Yes Yes
Can be supplied separately No Yes
One is predominant supply for recipient Yes No
Each supply priced separately No No

Activities/transactions Principal supply

Supply of printed books, In such cases, only content is supplied by the publisher or the person who
pamphlets, brochures, owns the usage rights to the intangible inputs while the physical inputs
envelopes, annual reports, including paper used for printing belong to the printer, supply of printing
leaflets, cartons, boxes etc., [of the content supplied by the recipient of supply] is the principal supply
printed with design, logo, & therefore such supplies would constitute supply of service.
name, address or other
In case of supply of printed envelopes, letter cards, printed boxes, tissues,
contents supplied by the
napkins, wall paper etc. by the printer using its physical inputs including
recipient of such printed
paper to print the design, logo etc. supplied by the recipient of goods,
goods
predominant supply is supply of goods & supply of printing of the content
[Printing Business] [supplied by recipient of supply] is ancillary to principal supply of goods &
therefore such supplies would constitute supply of goods. [CN 11/11/2017]
Retreading of tyres Pre-dominant element is process of retreading which is a supply of service.
Rubber used for retreading is an ancillary supply.
Supply of retreaded tyres, where the old tyres belong to the supplier of
retreaded tyres, is a supply of goods [Circular No. 34/8/2018]

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 MCQ Q7. Which of the following taxes will be levied on
Imports?
Q.1. What are different types of supplies covered under a) CGST
the scope of Supply? b) SGST
a) Supplies made with consideration c) IGST
b) Supplies made without consideration d) Exempt
c) Both of the above Answer :-
d) None of the above

Q 8. Which of the following is not a supply as per section 7 of

the CGST Act
Q 2. What is an inter-state supply?
a) Management consultancy services not in course
a) a State and a Union territory furtherance of business
b) two different states
c) two different Union territories b)Import of service for consideration not in course
d) All of these furtherance of business
c) Both (a) and (b)
d) None of the above
Answer :-
Q 3. _____________ specifies the activities to be treated
as supply even if made without consideration.
a) Schedule I of CGST Act
b) Schedule II of CGST Act Q 9. Which of the following supplies are naturally bundled?
c) Schedule III of CGST Act a) Rent deed executed for renting of two different floors
d) All of the above of a building-one for residential and another for
Answer :- commercial purpose to same person
b) Pack of watch, tie and belt
c) Package of canned food such as burger, chocolates,
Q 4. Which of the following activity is outside the scope
sweets, cake etc.
of supply and not taxable under GST?
d) None of the above
a) Services by an employee to the employer in the
course of or in relation to his employment Answer :-
b) Services of funeral
c) Actionable claims, other than lottery, betting and
gambling. Q10.Which of the following activities is a supply of
d) All of the above services?
Answer :- a) Transfer of right in goods/ undivided share in goods
without transfer of title in goods
b) Transfer of title in goods
Q 5. A _______________ supply comprising of two or more c) Transfer of title in goods under an agreement which
supplies shall be treated as stipulates that property shall pass at a future date.
the supply of that particular supply that attracts highest d) All of the above
rate of tax. Answer :-
a) Composite
b) Mixed
c) Both (a) and (b)
d) None of the above Q11. Which of the following taxes levied on intra-State
supply ?
Answer :- a) CGST
b) SGST/UTGST
Q6. What are the factors differentiating Composite c)Both (a) and (b)
Supply & Mixed Supply? d) IGST
a) Nature of bundling i.e. artificial or natural Answer :-
b) Existence of Principal Supply
c) Both of the above
d) None of the above
Answer :-

16
1
Q12.What is the maximum rate of CGST prescribed Definition
under CGST Act ?
a) 20% Q17. Goods under CGST Act excludes:
b) 28% a) Securities
c) 24% b) Unsecured debts
d) 40% c) Right to participate in the draw to be held in a lottery
Answer :- d) Growing crops.
Ans:-
Q13. The maximum rate of IGST can be :
a) 20% Q18. The term ‘goods’, as defined under section 2(52) of
b) 30% the CGST Act, 2017, does not include-
c)40% a) Grass
Answer :- (c) 40% b) Money and securities
c) Actionable claims
d) Growing crops
Ans:-

Q15.Which of the following is not considered as ‘goods’ Q19. What is the status of ‘money and securities’ under
under the CGST Act, 2017? GST law
a) Sale of a ten-paisa coin having sale value of Rs.100/- a) Treated as ‘Goods’
b) Sale of shares of unlisted company b) Treated as ‘Services’
c) Sale of lottery tickets c)Treated neither as ‘Goods’ nor as ‘Services’
d) All of the above
d) Status is not clear
Ans:-

Q20. What is the status of ‘lottery as an actionable claim’

under GST law?
a) Treated as ‘Goods’
b) Treated as ‘Services’
c) Treated as ‘goods’ but out of scope of supply
d) Treated as ‘goods’ and remains
within scope of supply
Ans:-

Q21. "Services" means anything other than goods,

money and securities includes ?
a) Activities relating to the use of money or conversion
by cash
b) Immovable property
c) Securities
Q 16. Which of the following is not a supply of services? d) Actionable claims
(CA Inter MTP 19) Ans:-
a) Renting of Commercial Office Complex
b) Payment of Non-Compete Fee by an ex-employee to
his previous employer
c) Repairing of Mobile Phone
d) Permanent transfer of business assets on which ITC
is availed
Q23. Activity of ‘conversion of money/ foreign exchange’
by Bank/ Authorized Dealer to a business entity on
interest Q29. Supplier within the meaning of supply includes
a) Treated as ‘Supply of Goods’ a) Person supplying goods or services
b) Treated as ‘Supply of Services’ b) Person receiving goods or services
c) Treated as ‘Supply of Services’ and attracts GST c) Person supplying goods or services including their
payment is made to end user agents
d) Treated as ‘Supply of Services’ and attracts GST d) Both a & c above
payment when made to another Bank/ Authorized Ans:-
Dealer
Ans:-
Q30. Recipient of supply of goods means a person
a ) Who is liable to pay consideration
Q24. Which of the following activities will be considered b) To whom the goods are delivered or made available,
as a supply of service or to whom possession or use of the goods is given or
a) Mr A borrows an amount of ` 1, 50,000 from one of his made available
relative Mr Q and agrees to repay the entire amount with c) An agent acting as such on behalf of the recipient in
interest after a year. relation to goods supplied
b) M/s Raj enterprises applied for loan from SBI Bank d) All of the above
against which a processing fees and interest is charged Ans:-
by the bank
c) Mr H exchanged INR against purchase of US $ for
which a commission was charged
d) All of the above.
Ans:-

Q25. Which of the following is not a business activity

a) Ms. Pooja sold her old jeweller
b) Mr. rajesh sold his business car
c) (a) or (b)
d) None of the above Q31. Recipient for supply of services where no
Ans:- consideration is payable means a person
a ) Who is liable to pay consideration
b) To whom services is rendered, & any reference to a
person to whom a supply is made shall be construed as
Q26. What is the taxable event under GST? a reference to the recipient of the supply
a) Manufacturing of goods c) An agent acting as such on behalf of the recipient in
b) Sales of goods relation to service supplied
c) Provision of Services d) Both b & c above
d) Supply Ans:-
Ans:-
Q32. The term ‘casual taxable person’ includes:
Q27. What are different types of supply covered under a) A person occasionally supplying goods or services
scope of supply or both in a State or a Union territory where he has no
fixed place of business.
a) Supplies made with consideration
b) A person occasionally supplying goods or services
b) Supplies made without consideration
or both in a State or a Union territory where he has fixed
c) Both of the above
place of business.
d) None of the above
c) Both (a) and (b)
Ans:-
d) None of the above
Ans:-
Q33. A p e r s o n w h o o c c a s i o n a l l y u n d e r t a k e s Q38. What type of supply shall transfer of title in goods
transactions involving supply of goods or services under works contract constitute?
or both, whether as principal or agent or in any other a) Supply of Goods
capacity, but who has no fixed place of business or b) Supply of services
residence in India is known as : c) Either of the two at the option of authority
a) Non–resident taxable person d) None of the above
b) Composition dealer Ans:-
c) Registered person
d) Casual taxable person SEC 7 : SUPPLY - MEANING
Ans:-
Q39. Which of the following activity is treated as supply
Establishment in different state in accordance with section 7 of CGST Act
a) Mr. Raj sold electronic gadgets to XYZ Co.
b) Mr. Veer Supply Beer Shampoo to M/s priya
c) Vijay Electronics disposed scrap part of electric unit
to a scrap dealer
orks Contract Under GST
d) All of the above
Q36. As per the CGST Act, 2017, the term “works
Ans:-
contract” includes:
a) Construction, fabrication, completion, erection,
installation, etc. of movable property
b) Construction, fabrication, completion, erection, Q40. When will the recipient and supplier be treated as
installation, etc. of immovable property related persons under GST?
c) Both (a) and (b) above a) Where such persons are employer and employee
d) None of the above b) Where one of them directly or indirectly controls other
Ans:- c) Where such persons are officers or directors of one
another’s business
Q37. While repairing the factory shed, few goods were d) All of the above
also supplied along with the labour service. Ans:
Whether it is a :
a) Composite Supply Q41. A Ltd. Holding entity made certain transfer of fixed
b) Mixed Supply asset on permanent basis to its subsidiary X Ltd.
c) Works Contract Service
entity without any consideration. Does the same
d) None of the above
classify as a supply under GST?
Ans:-
a. Yes, it is treated as supply
b. No, it is not treated as supply
c. On prior Permission of Government
d. Both a & c above
Ans:-

Q42. Mr. Amar being a managing director of Alpha

Project Pvt. Ltd. made gifts to his employees worth
of INR 60,000 each for assisting in the architectural
work of his house. Does the same be considered
supply?
a) Yes, since the value of gift exceeds the provided limit
of INR 50,000
b) No, since the gift is not made in course or furtherance
of business
c) As per the option of appropriate authority
d) Either b or c above
Ans:-
Q43. ABC Pvt. Ltd. makes certain supplies to Mr. X and Mr. Q46. A Ltd. (GST registered in Delhi) appointed Mr C (UP)
Z. Both of them hold 51% of the voting rights in the to act as his agent and supply goods on his behalf to
company and exercise major stake in the decision buyers in UP. A Ltd. dispatched first lot of 10,000
making. Does the same supply stands as r e l a t e d
party transaction? units to Mr C (UP) for sales to buyers in UP paying
a. Yes, it is related party transaction IGST on such dispatch supply. These GST paid
b. No, it is not related party transaction goods were subsequently sold by Mr C (UP) the
c. As per the opinion of the appropriate authority agent. He issued his invoice to the buyer too. Such
d. None of the above subsequent sale to buyer -
Ans:- a) shall not attract GST as GST has already been paid
on such goods
b) shall attract GST as further supply
c) shall attract GST as further supply – such further GST
payable by Principal (A Ltd.)
d) shall attract GST as further supply – such further GST
payable by Agent (Mr C)
Ans:-

Q47. As compared to normal agent, Del-Credere Agent

charges:
a) No commission
b) Higher commission
c) Lower commission
d) Differential commission
Ans:

Q48. Mr. A supplies goods to Mr. B who further supplies

such goods to Mr. C on behalf of Mr. A. The
consideration for such supply was guaranteed by
Mr. B if not paid by Mr. C. State the relation between
Mr. A & Mr. B
a) Principal Agent
b) Principal - Third Person
c) Seller - Buyer
d) Principal - Del-credere Agent
Ans:
Q45. A Ltd. (GST registered in Delhi) has appointed Mr C
(UP) to act as his agent and supply goods on his
behalf to buyers in UP. A Ltd. has dispatched first lot
of 10,000 units to Mr C (UP) for sales to buyers in UP.
Such dispatch to Mr C (UP) :
a) Be treated as ‘supply’ Q49. Supply of food or drink items in a restaurant as per
b) Not be treated as ‘supply’ CGST Act is------------
c) Will be treated as supply subsequently a) Supply of goods
d) None of the above b) Supply of service
Ans: c) not a supply under GST
d) none of the above
Ans:-
Q50. Mr. A, being a Director of ABC Pvt. Ltd. Is provided a
car which he uses for his personal purpose. Does
the same classify as supply? If yes under which
group?
a) Yes, supply of goods
b) Yes, supply of services
c) Does not qualify as supply
d) None of the above
Ans:-
Q57. Which of the following activity shall be treated
neither as a supply of goods nor a supply of
Q51. What shall be the proper classification of Renting of services?
immovable property under supply? (i) Permanent transfer of business assets where input
a) Supply of Goods tax credit has been availed on such assets
b) Supply of Services (ii) temporary transfer of intellectual property right
c) Does not qualify as supply (iii) transportation of deceased
d) None of the above (iv) services by an employee to the employer in the
Ans:- course of employment
a) (i) & (iii)
b) (iii) & (iv)
Q52. ABC Ltd. offers a software to businesses for smooth
c) (i) & (ii)
processing of returns and accounts. Such software d) (iii) & (iv)
shall be considered as:
Ans:-
a) Supply of Goods
b) Supply of Services
c) Does not qualify as supply Q58. Mr. A has sold his old furniture of the house. Does
d) None of the above this constitute a supply?
Ans:- a) Yes, it constitute a supply
b) No, it does not constitute a supply
Ans:-
Q53. Temporary transfer or permitting use of intellectual
right or property is classified as:
a) Supply of goods
Q59. Which of the following transactions does not
b) Supply of services qualify as supply under GST law?
c) Does not qualify as supply (i) When the Head Office makes a supply of services to
d) Supply on the prior permission of Government its own branch outside the State.
Ans:- (ii)When a person import services without consideration
for the purposes of his business from his elder brother
Q54. Ajay let out his land for tenancy for a period of 3 living outside India.
years to Mohan. Such tenancy shall be classified as: (iii) Disposal of car without consideration and where the
a) Supply of goods supplier has not claimed input tax credit on such car.
b) Supply of services (iv) When a principal makes supplies to his agent who is
c) Either of the two also registered and is situated within the same State.
d) None of the above a. (i) & (iii)
Ans:- b. (i), (ii) & (iii)
c. (iii)
d. (iii) & (ii)
Ans:-
Q55. Ram has received a sum of ` 5,00,000 from his
employer on premature termination of his contract
of employment. The GST implication will be:
a) It is not a supply, hence not chargeable to GST. Q60. Mr. A is a well-known singer. He receives a life-time
achievement award which consist of a memento
b) It is a supply without consideration, hence not and a cheque of ` 10,00,000. It is:
chargeable to GST. a. Supply and chargeable to GST
c) It is a supply, hence chargeable to GST. b. Supply but not chargeable to GST
d) It is not supply, but exemption is there. c. Not supply and hence not chargeable to GST
Ans:- d. None of the above.
Ans:-
 Answer:-

1 c 21 a 41 a
2 d 42 b
3 a 23 c 43 a
4 d 24 d 64 b
5 b 25 a 45 a 65 b
6 c 26 d 46 d 66 a
7 c 27 c 47 b 67 b
8 a 48 d 68 b
9 d 29 d 49 b 69 b
10 a 30 d 50 b
11 c 31 d 51 b
12 a 32 a 52 b
13 c 33 a 53 b
54 b
15 b 55 a
16 d 36 b
17 a 37 c 57 d
18 b 38 b 58 b
19 c 39 d 59 c
20 d 40 d 60 c

41
 Q61. Mr. Vishal has head office in pune and has branches Q65. M/s X Ltd. a dealer offer combo packs of shirt,
in state of Gujarat, Goa, and Punjab. Mr. Vishal send watch, wallet, book and they are bundled as a kit
goods to its branch Goa worth ` 2,50,000 in a own and this kit is supplied for a single price as a mixed
conveyance. Value of conveyance ` 15,00,000 and supply. Tax rate for shirt, watch, wallet and book are
With the conveyance some tools and spares parts 12%, 18%, 5% and Nil respectively. The mixed
are also send worth ` 50,000. Calculate total value of supply will be taxed at:
taxable supply on which GST is payable. a. 12%
a. 3,00,000 b. 18%
b. 2,50,000 c. 5%
c. 18,00,000 d. Nil
d. 15,50,000 Ans:-
Ans:-
66. What kind of supply is this transaction:
Composite & Mixed Supply Food supplied to the in – patients as advised by
the doctor in the hospital.”
Q62. There is a difference in taxability of goods forming a. Composite Supply
part of composite supply and mixed supply. Here b. Mixed Supply
are few examples from which you need to identify c. Works Contract Service
which is correct example of composite supply and d. None of the above
mixed supply. Ans:-
i) Mr. A buys a car and purchases warranty and
maintenance of the car by paying nominal amount. Car, 67. XYZ Pvt. Ltd. manufactures the jeans on order
warranty and maintenance here are a mixed supply. of ABC Pvt. Ltd. Further, after manufacturing,
it also gets it delivered to ABC Ltd. & gets the in
ii) Mr. A buys a car and purchases warranty and transit insurance done. What kind of supply is
maintenance of the car by paying nominal amount. Car, this?
warranty and maintenance here are a composite supply. a. Mixed supply
iii) Mrs. A buys a microwave oven and some utensils for b. Composite supply
use in microwave oven. Both microwave oven and c. None of the above
utensils are sold at a single price. Microwave oven and d. Either a or b above
its utensils here are a mixed supply. Ans:-
iv) Mrs. A buys chocolates, juices and biscuits from a
shop. All items have different prices. Chocolates, juices
and biscuits are a mixed supply. PRACTICE QUESTION (By ICAI)
The correct examples of composite and mixed supply
are: - 68. Which one of the following is not a composite
a. i,iv supply:
a. Supply of an air conditioner along with freight,
b. ii,iii insurance and installation
c. ii,iii,iv b. Supply of UPS along with external battery
d. None of the above c. Supply of architect services along with supply
Ans:- of material incidental to his services
d. Supply of lodging service by a hotel including
Q63. What shall constitute main item under composite breakfast
supply? Ans:-
a. Principal Item
b. Item with Highest tax rate 69. Which of the following is not covered under
c. As per the option of the taxpayer Schedule III of CGST Act: -
d. None of the above (I) Service provided by an employer to his employee
Ans:- on the occasion of his marriage
(ii) The functions performed by the members of
municipalities and local authorities
Q64. In composite supply, the principal supply is supply (iii) The duties performed by a director in a body
of goods whereas the ancillary supply is supply of established by the Central Government
services. Which provision shall apply in respect of (iv) Actionable claims, other than lottery, betting and
time of supply? gambling
a. Time of supply of service a. (i) & (iii)
b. Time of supply of goods b. (I)
c. Either (a) or (b) above c. (iii)
d. None of the above d. None of the above
Ans:-
Ans :-

22
1
 COMMERCE MERI JAAN
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 Abhishek Ojha SIR
❑ Working as Jr. Accounts Officer in BSNL
❑ Company secretary
❑ Got 2nd Rank in BSNL Accounts Officer
❑ Cleared 2 times UGC NET
❑ CA IPCC
❑ Post Graduate in Commerce (ABST) from Rajasthan University,
Jaipur
❑ Having experience of more than 8 yrs for providing classes Online
& offline
 JP GARG SIR
❑ Pursuing PhD in commerce
❑ Cleared UGC NET JRF
❑ Cleared 2 times UGC NET
❑ Got AIR 3rd in JR. Accountant Exam of AVVNL in 2018
❑ Cleared H.TET
❑ B.ED
❑ CA IPCC
❑ Post graduate in commerce(ABST) from Rajasthan University, Jaipur
❑ Having Experience of more than 8 years for providing classes online &
offline
GST BY JP GARG SIR

3B. COMPOSITION SCHEME [SECTION 10]

SOME IMPORTANT DEFINITIONS
Aggregate Aggregate value of ↓
Turnover  All Taxable Supplies (Excluding value of Inward supplies on which tax is payable by a
[Sec 2(6)] person on RCM basis) &
 Exempt supplies [Nil Rated + Wholly Exempt + Non-taxable Supply] &
 Exports of G/&S [Zero-rated Supply] &
 Inter-State supplies of Persons having Same PAN [Stock transfer or branch transfers]
 but Excludes CGST, SGST, UTGST, IGST & GST Cess.
be computed on ALL INDIA basis
Note: Value of Inward supplies on which tax is payable under RCM basis by a person shall
not be included in his Aggregate Turnover.
Note: Value of supply of any exempt services including services by way of extending
deposits, loans or advances; consideration for which is represented by way of interest or
discount, shall not be taken into account for calculating Aggregate turnover.

Turnover Aggregate value of ↓

in  All Taxable Supplies (Excluding value of Inward supplies on which tax is payable by a
State/UT Person on RCM basis) &
[Sec 2(112)]
 Exempt supplies made within a State or UT by a taxable person, Exports of G/&S &
 Inter-State supplies made from State/UT by the said taxable person
 but Excludes CGST, SGST, UTGST, IGST & GST Cess.
Note: Value of Inward supplies on which tax is payable under RCM basis by a person shall
not be included in his Turnover in State/UT.

 To determine eligibility for Composition scheme, Aggregate Turnover (computed on All India Basis) of the
person is considered.
 If person is eligible for opting Composition scheme, he will have to pay tax separately for different offices.

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GST BY JP GARG SIR

Objective  To bring simplicity & to reduce the compliance cost for the small taxpayers.

Benefits  They are not required to raise any tax invoice; however, they need to issue a Bill of Supply
in which no tax can be charged from the recipient.
 Yearly filing of Return (GSTR 4)
 Quarterly Payment of Tax @ certain specified % of his turnover.
Note: Composition Dealers cannot avail the benefit of Input Tax Credit.

Eligibility  Registered person, whose Aggregate turnover in Preceding (last) FY ≤ Rs. 1.5 crore.
 Eligibility Limit for Special Category States is as follows:

Limit Name of Special category states

Rs. 75 Lacs Manipur, Meghalaya, Mizoram (MMM);

Tripura, Arunachal Pradesh, Sikkim (TAPS)
Uttarakhand & Nagaland (UK & Nagaland)

Rs. 1.5 Crores Assam, Himachal Pradesh & J&K

Rs. 1.5 Crores Other States & UTs.

Rate of Rate
Category of Registered person
Tax
Manufacturers other than manufacturers of Notified 1% of Turnover in State/UT
goods [i.e Ice cream, pan masala & tobacco]
Restaurant service [referred in clause (b) of Para 6 of 2.5% of Turnover in State/UT
Schedule II]
Any other supplier [Traders] 0.5% of Turnover of Taxable
Supplies of G&S in State/UT

Non-  Person Making Inter-State Supply of goods [Supplyings goods outside state]
Eligibility  Persons supplying goods through ECO (who are required to collect TCS).
[Sec 10(2)]  Manufacturers of Ice cream, pan masala & tobacco [Trader  Eligible]
 Supplier of goods which are not taxable under GST.
 Supply of Services other than restaurant services (Refer - Second Proviso to Sec 10(1)).
Note: If RP supplies services (other than restaurant services), value of such services shall
not exceed: Higher of (a) Rs. 5 Lacs or (b) 10% of Turnover in State/UT in preceding FY.

Note: Person providing Exempted Service is eligible for composition scheme.

Note: If more than one registered persons are having same PAN, registered person shall not
be eligible to opt for composition scheme unless all such registered persons opt to pay tax
under composition scheme.

Composition Taxpayers now permitted to render Services upto specified limit along with Supply of
Goods or Restaurant Service [Second proviso to Sec 10(1) r/w sec 10(2)(a)]

SN Turnover in preceding FY Limit for Supply of Services in Current FY

1 Upto 50 Lacs Rs. 5 Lacs
2 More than 50 Lacs but upto 1.5 Crores 10% of State/UT turnover in preceding FY.

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GST BY JP GARG SIR
Interest Income shall be Excluded while computing Aggregate Turnover for determining Eligibility
for composition scheme
 Value of supply of exempt services by way of extending deposits, loans or advances in so far as the
consideration is represented by way of interest or discount, shall not be taken into account -
(i) for determining the eligibility for composition scheme under second proviso to section 10(1).
While computing value of services [other than restaurant services] as referred in second proviso to
section 10(1), interest on loans/deposit/advances will not be taken into account.

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GST BY JP GARG SIR

Conditions & Restrictions for Composition levy [Rule 5]

 He is neither a CTP nor NRTP.
 Goods held in stock by him have not been purchased from unregistered supplier & if purchased, he
pays the tax on RCM basis u/s 9(4).
 He shall pay tax u/s 9(3)/9(4) (reverse charge) on Inward supply of G/&S (in addition to composition tax)
 Not engaged in manufacture of notified goods u/s 10(2)(e) during the preceding FY.
 Ice cream; Pan masala; Tobacco & manufactured substitutes.
 He shall mention words “composition taxable person, not eligible to collect tax on supplies” at top
of bill of supply issued by him;
 He shall mention words “composition taxable person” on every notice or signboard displayed at a
prominent place at his principal place of business & at every additional place or places of business.

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GST BY JP GARG SIR

VALIDITY OF COMPOSITION LEVY [Section 10(3) r/w rule 6]

Till all prescribed Option of composition levy shall remain valid so long as all conditions of said section
T&Cs are satisfied & these rules are satisfied.
Lapse of scheme From the day on which Aggregate turnover during FY > 1.5 Crore/75 Lacs.
Consequences  Pay GST under regular scheme u/s 9(1) from the day he ceases to satisfy any of
conditions prescribed for composition levy.
 Issue tax invoice for every taxable supply made thereafter.
 file an intimation for withdrawal from scheme in prescribed form within 7 days of
occurrence of such event.
Effective date  Effective date from which withdrawal from the composition scheme shall take
effect shall be the date indicated by him in his application.
 But, such date may not be prior to the commencement of FY in which such
application for withdrawal is being filed.
ITC on stock in  Allowed to avail ITC of stock of inputs & inputs contained in semi-finished or
Hand finished goods held in stock by him & on capital goods held by him on date of
withdrawal.
 He shall furnish a statement, within 30 days of withdrawal of option, containing
details of such stock held on common portal.

Penalty for Irregular Availment of Composition Scheme [Sec 10(5) r/w rule 6(4) & 6(5)]
 If a taxable person has paid tax under composition scheme though he was not eligible for scheme,
person would be liable to penalty & provisions of section 73 or 74 of CGST Act shall be applicable for
determination of tax & penalty.
 Further, where proper officer has reasons to believe that registered person was not eligible to pay tax
under composition levy or has contravened provisions of Act/provisions of this Chapter, he may issue
a show cause notice (SCN) to such person in prescribed form.
 Upon receipt of reply to such SCN from registered person in prescribed form, proper officer shall issue
an order in prescribed form within 30 days of receipt of such reply, either
(a) accepting reply, or
(b) denying option to pay tax under composition levy from date of option or from date of event
concerning such contravention (as case may be).
 In case of denial of option to pay tax under composition levy by the tax authorities, the effective date of
such denial shall be from a date, including any retrospective date, as may be determined by tax
authorities. However, such effective date shall not be prior to the date of contravention of the provisions
of the CGST Act/ CGST Rules

INTIMATION OF OPTING FOR COMPOSITION LEVY [RULES 3 & 4]

Type of Intimation Effective date under
Applicant composition levy
New  Such unregistered person may give an option to pay  Date from which registration is
Registration tax under composition levy in Part B of effective
registration form, viz., FORM GST REG-01. Note: Intimation shall be
 It shall be considered as an intimation to pay tax considered only after grant of
under Composition Levy. registration to applicant
Exisiting  Electronically in prescribed form on Common  From beginning of FY
Registration Portal prior to commencement of FY for which said
option is exercised.
 He shall also furnish statement in prescribed form
in accordance with provisions of rule 44(4) of CGST
Rules, 2017 within 60 days from commencement
of relevant FY. (Refer ITC)

Note: Any intimation in respect of any place of business in a State/UT shall be deemed to be an intimation
in respect of all other places of business registered on same PAN.

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GST BY JP GARG SIR

Points to Remember:
 Composition scheme to be adopted uniformly by all registered persons having same PAN.
 Composition scheme supplier cannot collect tax from recipient of G/&S.
 Taxable person opting for composition scheme is not entitled to any ITC.

COMPOSITION SCHEME for service providers [NN 2/2019]

 Registered person whose aggregate turnover in preceding FY is upto Rs. 50 lacs &
 who is exclusively engaged in supplying services other than restaurant services &
 who is not eligible to pay tax under composition scheme u/s 10
 can pay tax @ 3% (3% + 3%)
 on first supplies of G&/S upto Aggregate turnover of Rs. 50 lacs made on/after 1st April in any FY,
 subject to specified conditions.

Who are the persons not eligible for composition scheme, but eligible for NN 2/2019?
 Registered person whose aggregate turnover in preceding FY ≤ Rs. 50 lacs &
 who is exclusively engaged in supplying services other than restaurant services, or
 who is engaged in supply of services (other than restaurant services) along with supply of goods &/ or
restaurant services of value exceeding Rs.5 lacs in current FY.

Conditions:
1. Supplies are made by a registered person who is not engaged in making:
 Any supply (G/S) which is not leviable to tax under the said Act.
 Any inter-State outward supply of G&/S.
 Any supply through ECO who is required to collect tax at source u/s 52.
 Supplies of Notified goods [Ice cream; Pan masala; Tobacco & manufactured tobacco substitutes].
2. Supplies are made by a registered person who is neither a CTP nor NRTP.
3. Registered person shall not collect any tax from the recipient on outward supplies made by him.
4. RP shall not be entitled to ITC.
5. Registered person shall issue a bill of supply instead of tax invoice. It shall have the following words at its
top - ‘taxable person paying tax in terms of NN 2/2019, not eligible to collect tax on supplies’.

Tax Payable by Registered Person opting to pay tax under NN 2/2019

1. CGST @ 3% + SGST/UTGST @ 3% on all outward supplies - first supplies of G&/S upto an aggregate
turnover of Rs. 50 lacs made on/after 1st April in any FY – regardless of any exemption available to
such supplies or any notification issued u/s 9(1) &
2. CGST on inward supplies u/s 9(3) or 9(4) [RCM basis] at the applicable rates.

First Supplies of G/&S made from 1st April of FY to date of becoming liable for registration for ↓
Determining Eligibility of a First supplies of G&/S shall include the supplies from 1st April of a
person to pay tax FY to the date from which he becomes liable for registration

Determining Tax payable First supplies of G&/S shall not include the supplies from 1st April of
a FY to the date from which he becomes liable for registration.

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GST BY JP GARG SIR

 Where more than one registered persons are having same PAN, CGST on supplies by all such registered
persons is paid @ 3% under this notification. [i.e All branches shall pay tax @ 3%].
 In computing aggregate turnover to determine eligibility of a registered person to pay CST @ 3% under
this notification, value of supply of exempt services by way of extending deposits, loans or
advances in so far as the consideration is represented by way of interest or discount, shall not
be taken into account.
 If any RP who has availed ITC opts to pay tax under this notification
 he shall pay an amount by way of debit in electronic credit ledger or electronic cash ledger,
 equivalent to ITC in respect of inputs held in stock & inputs contained in SFG or FG held in stock &
on capital goods as if supply made under this notification attracts the provisions of sec 18(4) &
 after payment of such amount, balance of ITC lying in his electronic credit ledger shall lapse.
 CGST Rules as applicable to composition dealer shall mutatis mutandis apply to a person paying tax
under this notification.
 Option to pay tax by availing the benefit of this notification would be effective from the beginning of the
FY or from the date of registration (in cases of new registration during FY).
 COMMERCE MERI JAAN
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 Abhishek Ojha SIR
❑ Working as Jr. Accounts Officer in BSNL
❑ Company secretary
❑ Got 2nd Rank in BSNL Accounts Officer
❑ Cleared 2 times UGC NET
❑ CA IPCC
❑ Post Graduate in Commerce (ABST) from Rajasthan University,
Jaipur
❑ Having experience of more than 8 yrs for providing classes Online
& offline
 JP GARG SIR
❑ Pursuing PhD in commerce
❑ Cleared UGC NET JRF
❑ Cleared 2 times UGC NET
❑ Got AIR 3rd in JR. Accountant Exam of AVVNL in 2018
❑ Cleared H.TET
❑ B.ED
❑ CA IPCC
❑ Post graduate in commerce(ABST) from Rajasthan University, Jaipur
❑ Having Experience of more than 8 years for providing classes online &
offline
 Aggregate Turnover, Turnover in state
Q1.
Aggregate turnover calculated on:
a. Registration basis
b. All India basis
c. State or Union Territory basis
d. None of the above
Ans:

Q2.
A g g r e g a t e Tu r n o v e r L i m i t f o r o p t i n g
composition scheme in states other than
special category states:
a. 75 Lakhs
b. 1.25 Crores
c. 1 Crore
d. 1.50 Crores
Ans:

Q3.
A g g r e g a t e Tu r n o v e r L i m i t f o r o p t i n g
composition scheme in special category states
other than Assam, Himachal Pradesh and
Jammu & Kashmir:
a. 75 Lakhs
b. 1.25 Crores
c. 1 Crore
d. 1.50 Crores
Ans:

Q4.
A g g r e g a t e Tu r n o v e r L i m i t f o r o p t i n g
composition scheme in special category states
of Assam, Himachal Pradesh and Jammu &
Kashmir is:
a. 75 Lakhs
b. 1.25 Crores
c. 1 Crore
d. 1.5 Crores
Ans:

Q5.
Mr. XYZ a manufacturer has supplies following
goods in F.Y. 18-19
i) Intra State supply of good - ` 25,00,000
ii) Exempt supplies of worth - ` 10,00,000
iii) Export good worth - ` 50,00,000
iv) Non Taxable supplies worth - ` 5,00,000
Calculate aggregate turnover.
a. 90,00,000
b. 85,00,000
c. 75,00,000
d. 80,00,000
Ans:
Q6. Q10.
Whether Central, State or Union, and Integrated Which of the following will be excluded from the
Tax as well as cess included in calculation of computation of turnover?
aggregate turnover? a. Value of taxable supplies
a. Yes, such taxes & cess are included in b. Value of exempt Supplies
aggregate turnover c. Non-taxable supplies
b. No, such taxes & cess are not included in d. Value of inward supplies on which tax is paid
aggregate turnover on reverse charge basis
c. Only Central & State Tax included Ans:
d. Only cess is excluded
Ans:

Q7.
Registered person in special category states
such as Assam, Himachal Pradesh & Jammu
and Kashmir cannot avail composition scheme
if the aggregate turnover in the PFY 2018-19
exceeds ` 75 lakhs. State True or False
a. True
b. False
Ans:

Q8.
In calculation of aggregate turnover for the Q12.
purpose of determining eligibility for Raj Ltd. is having 4 places of business – 2 in
composition scheme by a manufacture Delhi (Registered),1 in Maharashtra
following items are included: (Registered) and 1 in Madras (Unregistered as
a. All taxable supplies (excluding inward selling Alcholic liquor for human consumption)
supplies on which tax is payable under 'Aggregate Turnover' shall be
RCM) a. Aggregate Turnover from all 4 places of
b. Exempt supplies business (having same PAN);
c. Export and inter-state supplies b. Aggregate Turnover of all registered places –
d. All of the above 2 places in Delhi and 1 in Maharashtra
Ans: (registered with same PAN);
Ans:
Q9.
According to Section 2 (6) of the CGST Act, 2017 Q13.
“aggregate turnover” will include Rama Ltd. has provided following information
a. value of all taxable supplies for the month of September:
b. value of all outward supplies – whether (i) Intra-State outward supply ` 8,00,000/-
taxable or non-taxable, whether exempt or (ii) Inter-State exempt outward supply `
non-exempt, whether zero-rated or not, 5,00,000/-
whether under forward charge or reverse (iii) Turnover of exported goods `
charge 10,00,000/-
c. value of outward supplies as well as inward (iv) Payment made for availing GTA
supplies on which tax is payable on reverse services ` 80,000/-
charge basis Calculate the aggregate turnover of Rama Ltd.
d. value of outward supplies under forward a. ` 8,00,000/-
charge and value of inward supplies with b. ` 23,80,000/-
reverse charge c. ` 23,00,000/-
Ans: d. ` 18,00,000/-
Ans:-
Q14. Q19.
Mr. Bala has made supply (within State) of a Under composition scheme total tax rate
taxable goods which is of ` 17 lakh, export applicable to Restaurant & Catering Service
supplies of ` 3 lakh and intra-state supply of provider is:
exempt services of ` 4 lakh. His aggregate a. 1% of the Turnover in State or Union
turnover as per section 2(6) of the CGST / SGST Territory
Act, 2017 is : b. 0.5% of the Turnover in State or Union
a.` 17 Lakhs Territory
b. ` 20 Lakhs c. 2.50% of the Turnover in State or Union
c. ` 24 Lakhs Territory
d. None of the above d. 5% (i.e.2.50% CGST + 2.50% SGST) of the
Ans: Turnover in State or Union Territory
Ans:
Q15.
Mr. X, a registered supplier of Uttarakhand Q20.
wants to opt for composition levy. The turnover Eligibility criteria for composition scheme
limit for composition levy is- depends on the aggregate turnover of :
a. ` 50 lakh a. Preceding Financial Year
b. ` 75 lakh b. Current Financial Year
c. ` 1 crore c. None of the above
d. ` 1.5 crore d. Both a & b above
Ans: Ans:

Q16. Q21.
Turnover in State or Union Territory excludes: Total Tax rate under composition scheme for
a. Central Tax suppliers other than manufacturers or
b. State or Union Territory Tax suppliers making supplies under clause (b) of
c. Integrated Tax & Cess para 6 of schedule II will be :
d. All of the above a. 0.5% Turnover in State
Ans: b. 1% Turnover of Taxable supplies of goods
or services in State
c. 1% Turnover in State
Q17.
d. 2.50% Turnover of Taxable supplies of
Exempt Supply includes:
goods or services in State
a. Nil rate supply
Ans:
b. Wholly exempt & non-taxable supply
c. only b above
d. Both a & b above Q22.
Ans: Mr. A a registered person under GST opts for
composition scheme in current financial year
Sec 10(1): Eligibility criteria for Composition Scheme as his aggregate turnover in preceding
financial year was ` 95 lakhs. In CFY his
turnover crosses ` 1.5 cr. in the month of
October. Will Mr. A continue to be in
composition scheme in CFY also?
a. Yes, composition scheme will be available
in CFY
b. No, composition scheme will not be
available in CFY
c. Yes, till the time the turnover is below 1.5
cr. & after that the composition scheme will
be withdrawn
d. No, the composition scheme will be
st
withdrawn by the end of the 1 quarter
Ans:
Q23. goods through ECO who is required to
To b e e l i g i b l e f o r r e g i s t r a t i o n u n d e r collect TCS u/s 52
Composition scheme it is required that the Ans:
aggregate turnover of a registered tax-payer
should not exceed __________ in the preceding
financial year. The limit is _______ for Special
Category States (other than State of J&K &
Himachal Pradesh, Assam)
a. ` 1,50,00,000;` 75,00,000
b. ` 50,00,000; ` 75,00,000
c. ` 50,00,000; ` 25,00,000
d. None of the above
Ans:

Q24.
ABC Pvt. Ltd. is having place of business in 3
states namely Haryana, Punjab & Rajasthan
each having turnover of ` 20 lacs, 60 lacs, 80
lacs respectively. Which State is eligible to opt
for composition scheme?
a. Haryana
b. Punjab
c. Rajasthan
d. None of the above
Ans:-

Q28.
Which of the following persons can opt for the
composition scheme?
1) Registered person whose aggregate
turnover in the preceding financial year
did not exceed `75 lakh.
2) Registered person whose aggregate
turnover in the preceding financial year
did not exceed `1.5 crore.
3) A person engaged in Manufacturing of
Pan Masala, Tobacco and manufactured
tobacco substitutes
4) A person engaged in the Manufacturing
of Ice Cream, other edible ice, whether or
not containing Cocoa.
5) A person engaged exclusively in the
providing restaurant service.
6) A person engaged exclusively in supply
of medicines.
Which of the above are correct:
a. 1,2,3,5
b. 1,2,5,6
c. 2,3,4,5
d. 3,4,5,6
Ans:-
Q29. Q32.
Mr. Bajaj, a trader of electronic goods in Mr. James Bond wants to avail the
Maharashtra supplies goods to ultimate composition scheme of section 10(1). He is
consumer at the intra-state level only. The registered as NRTP/ CTP under Maharashtra
turnover in state was ` 125 lakhs in preceding CGST Act, 2017 and the aggregate turnover of
financial year whereas turnover of taxable PFY 2018-19 was ` 1.5 crores. State whether
supply of goods was ` 105 lakhs. State the limit Mr. James Bond is eligible for opting
upto which Mr. Bajaj can provide services under composition scheme u/s 10(1).
composition scheme of 10(1). a. Eligible for composition scheme
[Hint: Limit is upto 10% of turnover in state or ` 5 b. Not eligible for composition scheme
lakhs whichever is higher] Ans:
a. ` 5 lakhs
b. ` 10.5 lakhs Q33.
c. ` 12.5 lakhs Mr. A, a composition dealer who trades in
d. ` 10 lakhs garments has received an order from China of
Ans: Rs 5 lacs. Can he accept this order?
a. Yes, he can accept that order
b. No, he cannot accept that order
Ans:-
Conditions for Composition Scheme (Sec 10(2) & Rule5)
Q34.
Which of the following manufacturer cannot
opt for composition levy?
a. Manufacturer of pan masala
b. Manufacturer of ice cream
c. Manufacturer of tobacco substitutes
d. All of the above
Ans:
 a.` 28,000
b. ` 7,000
c.` 35,000
d. Zero
Ans:-

Q42.
Can a registered person opting for composition
scheme collect GST on his outward supplies?
a. Yes, in all cases
b. Yes, only on such goods as may be notified
by the Central Government
Q38. c. Yes, only on such services as may be notified
ABC Pvt. Ltd., a Mumbai based manufacturer of by the Central Government
the pan masala, has started manufacturing d. No, he cannot collect GST
biscuits within same PAN. His threshold of ` 20 Ans:-
lacs is crossed but is expected to be below ` 80
lacs in the current financial year. Can he opt for MCQ on Composition Scheme of N/N 2/2019 :-
Composition Scheme?
a. Yes, he can opt for Composition Scheme Q43.
b. No, he cannot opt for Composition Scheme From the following identity which of the
Ans:- conditions are to be satisfied by a registered
person in order to avail the composition
Q39. scheme under N/N 2/2019
ABC Pvt. Ltd., a registered entity in Delhi in i. He is not engaged in inter-state outward
composition scheme has received order from 4 supply
states as specified below of ` 5 lacs, 6 lacs, 7 ii. He is not engaged in making supply
lacs & 2 lacs respectively. Being a composition through e-commerce operator
dealer, which order can he accept? iii. His aggregate turnover in PFY does not
a. Delhi exceeds `150 lakhs
b. Haryana iv. He is not engaged in supply of such
c. Rajasthan goods on which gst is not leviable
d. Maharashtra v. He is not eligible to pay tax under section
Ans:- 10(1)
a. i, ii & iii
Q40. b. ii, iii, iv & v
Mr. A is a manufacturer of ice cream wants to c. ii, iv & v
opt for Composition Scheme u/s 10(1). If all d. All i, ii, iii, iv & v
other conditions satisfies, the total effective Ans:-
composition tax rate applicable to Mr. A will be:
a.1% Turnover in state Q44.
b. 5% Turnover in state Any registered person who is engaged in inter-
c. 2.5% Turnover in state state inward supply of goods or service is not
d. Not eligible for composition scheme. eligible to opt composition scheme under N/N
Ans:- 2/2019 CT (R) . State true or false
Sec 10(4): Cannot collect the tax as well as no ITC available a. True
b. False
Q41. Ans:
ABC Pvt. Ltd., has started his business in Delhi
and has got himself registered in Composition
Scheme. He has purchased capital goods Q45.
worth ` 1,28,000 (tax amount ` 28,000) and Mr. Ram a service provider registered in
inputs worth ` 50,000 (tax amount ` 7,000). Maharashtra wants to opt for composition
What is the eligible amount of ITC that it can scheme under N/N 2/2019. The aggregate
claim? turnover of Mr. Ram in preceding financial year
2017-18 was ` 45 lakhs. In the current financial Procedure under Composition Scheme
year Mr. Ram took the legal service from Mr.
Vakil located in Indore and discharges the tax
liability under reverse charge on such service.
Identify whether Mr. Ram is eligible for
composition scheme or not?
a. Eligible
b. Not eligible
Ans:-

Payment of Tax under Composition Scheme

Q46.
ABC Ltd., a trader has got itself registered in
Delhi on 1.2.2018 in composition scheme. In the
month of Aug’18, it make supply of taxable
goods worth ` 3 lacs and exempted goods Q50.
worth ` 1 lac. On what value it shall pay the GST Can a registered person opt for composition
to the Government? scheme only for one out of his 3 business
a.` 1 lac verticals having same Permanent Account
b. ` 3 lacs Number?
c. ` 4 lacs a. Yes, he can
d. ` 2 lacs b. No, he can not
Ans:- c. Yes, subject to prior approval of the Central
Government
d. Yes, subject to prior approval of the
concerned State Government
Ans:-

Q52.
A Is composition dealer required to maintain
books of account as per GST Laws?
a. Yes, he is required to maintain books of
account
b. No, he is not required to maintain books of
account
Q48. c. Yes, he is required to maintain books of
Will composition supplier make the payment of account but to a limited extent
CGST & SGST in separate heads or shall make d. None of the above
one combined payment? Ans:-
a. Yes, pay under separate heads
b. No, pay a consolidate amount
c. Either a or b above
d. Make payment under IGST
Ans:-
 Answer:-
1 d 31 a

Q54. 2 a 32 b
A person who has opted for composition
scheme is liable to file return in form : 3 d 33 b
a. GSTR 1
4 a 34 d
b. GSTR 3
c. GSTR 3B b c
5 35
d. GSTR 4
Ans: 6 b 36 b

7 d 37 b

8 b 38 b

9 d 39 a

10 c 40 d

11 a 41 d
Ans:
12 c 42 d
13 c 43 d
Q56.
What is the periodicity of filing return under b
14 44 b
composition scheme?
a. Monthly 15 d 45 a
b. Half yearly
c. Quarterly 16 d 46 b
d. Annually
Ans: 17 b 47 b
18 d 48 a
19 d 49 a
20 50 b

21 b 51 b

22 c 52 c

23 a 53 d

24 d 54 d

25 a 55 d

26 a 56 d

27 b 57 d

28 b

29 c

30 d
 COMMERCE MERI JAAN
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 Abhishek Ojha SIR
❑ Working as Jr. Accounts Officer in BSNL
❑ Company secretary
❑ Got 2nd Rank in BSNL Accounts Officer
❑ Cleared 2 times UGC NET
❑ CA IPCC
❑ Post Graduate in Commerce (ABST) from Rajasthan University,
Jaipur
❑ Having experience of more than 8 yrs for providing classes Online
& offline
 JP GARG SIR
❑ Pursuing PhD in commerce
❑ Cleared UGC NET JRF
❑ Cleared 2 times UGC NET
❑ Got AIR 3rd in JR. Accountant Exam of AVVNL in 2018
❑ Cleared H.TET
❑ B.ED
❑ CA IPCC
❑ Post graduate in commerce(ABST) from Rajasthan University, Jaipur
❑ Having Experience of more than 8 years for providing classes online &
offline
4. EXEMPTIONS UNDER GST

BY JP GARG SIR

FOR ALL COMPEETITIVEE EXAMS

 COMMERCE MERI JAAN
❑ For full course, Test Series – CLICK to download our App
❑ For free videos – CLICK to Subscribe us on
❑ For free E-book & PDFs – CLICK to join us on
❑ For Exam related news & notification- search us on
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❑ Contact us @ 8003101114
 Abhishek Ojha SIR
❑ Working as Jr. Accounts Officer in BSNL
❑ Company secretary
❑ Got 2nd Rank in BSNL Accounts Officer
❑ Cleared 2 times UGC NET
❑ CA IPCC
❑ Post Graduate in Commerce (ABST) from Rajasthan University,
Jaipur
❑ Having experience of more than 8 yrs for providing classes Online
& offline
 JP GARG SIR
❑ Pursuing PhD in commerce
❑ Cleared UGC NET JRF
❑ Cleared 2 times UGC NET
❑ Got AIR 3rd in JR. Accountant Exam of AVVNL in 2018
❑ Cleared H.TET
❑ B.ED
❑ CA IPCC
❑ Post graduate in commerce(ABST) from Rajasthan University, Jaipur
❑ Having Experience of more than 8 years for providing classes online &
offline
 POWER TO GRANT EXEMPTION FROM TAX [SEC 11 OF CGST ACT/SEC 6 OF IGST ACT]
General Exemption  If Government is satisfied that it is necessary in public interest to do,
[Sec 11(1)]  it may (on recommendations of Council) by notification,
 exempt generally goods/services/both of any specified description
[Public Interest +  either absolutely or subject to prescribed conditions (conditionally)
by Notification]  from whole or part of tax leviable thereon
 with effect from specified date in such notification.
Note: Absolute Exemption are mandatory in Nature while conditional
exemptions is at the option of the registered person.
Special Exemption  If Government is satisfied that it is necessary in public interest to do,
[Sec 11(2)]  it may, on recommendations of Council,
[by Special order]  by special order in each case, under exceptional circumstances
 exempt from tax any goods/services/both on which tax is leviable.
Note: This exemption is applicable only in special cases.

Sec 11(3) of CGST Act:

 Government may [for clarifying scope/applicability of notification/order issued u/s 11(1)/11(2)]
 insert an explanation in such notification or order,
 by notification at any time within 1 year of issue of such notification/order u/s 11(1)/11(2) &
Every such explanation shall have effect as if it had always been part of original notification/order.
PC Note: Explanation inserted within 1 year of issue will have retrospective effect.

46
LIST OF SERVICES EXEMPT FROM TAX
A SERVICES RELATED TO CHARITABLE & RELIGIOUS ACTIVITIES
1. Services by entity registered u/s 12AA of Income-tax Act, 1961 by way of charitable activities.
‘Charitable Activities’ mean activities relating to:
(i) PUBLIC HEALTH by way of:
A. Care or counseling of
 terminally ill/severely disabled (physical/mental) persons;
 persons afflicted with HIV/AIDS;
 persons addicted to dependence-forming substance (Drugs/alcohol);
B. Public awareness of preventive health, family planning or prevention of HIV;
(ii) ADVANCEMENT OF RELIGION, spirituality or yoga;
Note: If charitable/religious trusts primarily provide accommodation or serve food & drinks;
for consideration in any form including donation  GST .
Holding of fitness camps or classes in aerobics, dance, music etc.  GST .
(iii) ADVANCEMENT OF EDUCATIONAL PROGRAM/SKILL DEVELOPMENT related to
 abandoned, orphaned or homeless children;
 physically or mentally abused and traumatized persons;
 prisoners; or
 persons over the age of 65 years residing in a rural area;
Note: Schools, colleges or any other educational institutions run by charitable trusts by way
of education or skill development of above mentioned persons = Charitable activities &
income from such supplies will be wholly exempt from GST.
Activities of a school, college or an institution run by a trust which do not come under
charitable activities will not be exempt under this entry. However, such activities may be
exempt under Entry 66 of the Notification [discussed later].
(iv) PRESERVATION OF ENVIRONMENT including watershed, forests & wildlife.
Note:
1. Grant of Advertising rights on premises of charitable/religious trust or on publications of trust;
Admission to events, functions, celebrations, shows against admission tickets  GST .
2. Hostel services provided by trusts to students  Charitable activity ⌧. But, Hostel
accommodation services provided by trusts is exempt if declared tariff < Rs. 1,000 per day.
3. Arranging yoga & meditation camp by charitable trusts → Exempt from GST.
4. Residential programmes or camps [Fee charged includes cost of lodging & boarding] → Exempt
if primary purpose of such residential programmes is advancement of religion, spirituality or yoga.
However, if charitable or religious trusts primarily provide accommodation or serve food & drinks
against consideration in any form including donation, such activities will be taxable.
5. Activities such as holding of fitness camps/classes in aerobics, dance, music  GST .
6. Hospitals managed by charitable trusts  Exemption available if it is exempted under entry 74.
2. Services by a person by way of
(a) Conduct of any Religious ceremony; (Pujari)
(b) Renting of Precincts of a religious place meant for general public (Temple) owned/managed
by registered charitable/religious trust or a trust/institution registered u/s 10(23C) (v) of
Income-tax Act or a body or an authority covered u/s 10(23BBA).
However, GST will be payable in following cases:
(i) Renting of Rooms if charges are ≥ Rs. 1,000 per day;
(ii) Renting of Premises/Halls/mandapam/open area if charges are ≥ Rs. 10,000 per day;
(iii) Renting of Shops/other spaces for business if charges are ≥ Rs. 10,000 per month;
Note: Donation for hosting advertisement promoting business of the donor  GST . But if donation
is received without such instructions or without a quid pro quo  NO GST.

47
3. Services by a specified organisation in respect of a religious pilgrimage facilitated by the
Government of India, under bilateral arrangement.
Specified organisations are:
 Kumaon Mandal Vikas Nigam Ltd, a Government of Uttarakhand Undertaking;
 ‘Haj Committee of India’ or ‘State Haj Committee including Joint State Committee’.
Note: Religious pilgrimage organised by any other charitable/religious trust are liable to GST.

4. Services by way of training or coaching in recreational activities relating to ALL forms of:
 Arts or Culture
 Sports by Registered Charitable Entities.
Note: Training/coaching in areas other than arts, culture or sports  GST 

Note: Unless specifically exempted, all G&S supplied to charitable/religious trusts  GST .

48
B. AGRICULTURE RELATED SERVICES
1. Services by way of loding, unloading, packing storage or warehousing of Rice

2. Services by way of Warehousing of minor Forest Produce.

3. Services by way of fumigation in a warehouse of agricultural produce

4. Pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of fruits & vegetables which
do not alter essential characteristics.

5. Services by National Centre for Cold Chain Development of cold chain knowledge dissemination.
6. Services relating to cultivation of plants & rearing of all life forms of animals (except horses) for
food, fibre, fuel, raw material or other similar products/agricultural produce by way of:
(a) Agricultural operations directly related to production of any agricultural produce including
cultivation, harvesting, threshing, plant protection or testing;
(b) Supply of farm labour;
(c) Processes carried at agricultural farm including tending, cutting, harvesting, drying, cleaning,
trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging & like
operations which do not alter essential characteristics of agricultural produce but only
make it marketable for primary market;
(d) Renting/leasing of agro machinery or vacant land with/without structure for being use in
agriculture or related activities;
(e) Loading, unloading, packing, storage or warehousing of Agricultural Produce;
(f) Agricultural Extension Services [Application of scientific research & knowledge to agriculture]
Ex: Training courses, kisan call centres, farm visits, on farm trials, kisan melas, kisan clubs,
advisory bulletins and the like.
(g) Services by any APMC or Board related to selling/marketing of agricultural produce
However, Renting of shops/other property by APMC  GST  (since not directly related)
(h) Services provided by Commission Agent for Sale/Purchase of Agricultural Produce.

Points to be noted:
1. Breeding of fish (pisciculture), rearing of silk worms (sericulture), cultivation of ornamental flowers
(floriculture) and horticulture, forestry, etc. → NO GST.
2. Agricultural produce means any produce out of cultivation of plants & rearing of animals (except
horses) on which
(a) No further processing is done or
(b) Processing which is usually done by a cultivator or producer & which does not alter its Essential
Characteristics, but makes it Marketable for Primary Market.
Ex: Cultivation, harvesting, threshing, testing, Tending, pruning, cutting, drying, cleaning, trimming.

 Following processes are liable to GST:

 Process which Alters the Essential Characteristics of Agricultural Produce.
Ex: Potato chips or tomato ketchup are manufactured through processes which alter the essential
characteristic of farm produce (potatoes and tomatoes).
 Process which makes agricultural produce marketable in retail market.
Processes of grinding, sterilizing, extraction packaging in retail packs of agricultural products,
which make agricultural products marketable in retail market is liable to GST.
7. Carrying out an Intermediate Production Process as Job Work in relation to Cultivation of Plants
& Rearing of all life forms of Animals (except rearing of horses) for food, fibre, fuel, raw material or
other similar products or agricultural produce.

8. Services by way of Artificial Insemination of Livestock (other than horses).

49
 Processed products such as tea, coffee beans or powder, pulses (dehusked or split), jaggery, spices, dry
fruits, cashewnuts etc. fall outside the definition of agricultural produce & therefore exemption from GST
is not available to their loading, packing, warehousing etc & thus GST will be levied.

 Milling of paddy into rice: Milling of paddy into rice changes its essential characteristics.
Therefore, milling of paddy into rice cannot be considered as an intermediate production process.
Thus milling of paddy into rice is not eligible for exemption & thus GST will be levied.

50
C. EDUCATION RELATED SERVICES
1. (a) Services provided by Educational institution to its students, faculty & Staff;
(b) Services provided by Educational institution by way of conduct of Entrance Examination against
consideration in the form of entrance fee;

Note: Canteen, maintenance etc. provided by Private Players to Educational Institutions  GST .

2. Services provided to educational institution by way of

(i) Transportation of students, faculty & staff;
(ii) Catering, including any mid-day meals scheme sponsored by CG, SG, UT;
(iii) Security or cleaning or house-keeping services performed in such educational institution;
(iv) Services relating to admission to, or conduct of examination by, such institution; [Exempt to ALL]
(v) Supply of online Educational Journals or Periodicals.

Note: Exemption in (i), (ii), (iii) is available only to schools upto HSC or equivalent. [College ⌧]
Exemption in (v) is available only to College. [Schools upto HSC/approved vocational courses ⌧]

Educational institution means an institution providing services by way of:

(i) Pre-school education & education upto HSC or equivalent; [School upto 12th]
(ii) Education as a part of a curriculum for obtaining qualification recognised by any law in India;
 [Degree courses by colleges, universities or institutions  GST ⌧ ; Private coaching  GST ]
(iii) Education as a part of an approved vocational education course.
Approved Vocational Education Course means
 Course run by ITI/ ITC affiliated to National Council for Vocational Training (NCVT) or State
Council for Vocational Training (SCVT) offering courses in designated trades.
 Modular Employable Skill Course, approved by NCVT, run by a person registered with Directorate
General of Training, Ministry of Skill Development & Entrepreneurship.
Private ITIs
 If education provided by Private ITIs is approved as vocational educational course  GST ⌧.
 Conduct of entrance examination by private ITIs for designated trades  GST ⌧.
 Admission to or conduct of examination services provided by private ITIs to educational institutions
i.r.o such designated trades  GST ⌧. [Services in other than designated trades  GST ]

Government ITIs
 Services provided by Government ITI to trainees/students  GST ⌧ [as provided by CG/SG]
 This would cover both vocational training & examinations conducted by Government ITls.
Note: Central & State Boards are treated as ‘Educational Institution’ for conducting examination.

(iv) Indian Institute of Management (as they provide education as a part of a curriculum for obtaining
a qualification recognized by law). [Note: Only for long duration course (≥ 1 year)].
However, Short Duration/Short Term Executive Program → GST will be levied @ 18% (9% + 9%).

 College/Hostel Mess services

Mess run by educational institution/students It is exempt from GST. [Since given to SSF]
Mess is outsourced to a third person It is taxable.
[Catering services given to educational institiution] [Note: Exempt if given to school upto HSC]

 Fees for recruitment through campus interviews taken from companies  GST 

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  Boarding Schools [Education + Residence + Food]  NO GST on the entire consideration.
 This is composite supply if charges for education & lodging & boarding are inseparable.
 Such services are naturally bundled & supplied in ordinary course of business.
 Thus principal supply being “education”, entire consideration for the supply will be exempt.

 Dual Degree in a college [only one of which is recognized by law]

 Provision of dual qualifications is in nature of two separate services as curriculum & fees for each
of such qualifications are prescribed separately.
 Service in respect of each qualification would, therefore, be assessed separately.
 If an artificial bundle of service is created by clubbing two courses together (only one of which leads
to a qualification recognized by law), it shall be treated as a mixed supply.
Note: Incidental auxiliary courses provided by way of hobby classes or extra-curricular activities will be
an example of naturally bundled course, and therefore treated as composite supply.

Governing Principle for distinguishing between composite supply & mixed supply:
 Amount of extra billing being done for unrecognized component viz-a-viz the recognized course.
 If extra billing is being done, it may be a case of artificial bundling of two different supplies, not supplied
together in ordinary course of business, and therefore will be treated as a mixed supply, attracting the
rate of higher taxed component for entire consideration.
Note: If output services are exempted, educational institutions may not be able to avail ITC on input services.

52
 D. HEALTH CARE SERVICES
1. Services by a Veterinary Clinic in relation to health care of animals or birds.
2. Services by way of:
(a) Health care services by
 Clinical Establishment, Authorised Medical Practitioner or Para-medics;
(b) Transportation of a patient in Ambulance, other than those specified in (a) above.
3. Services provided by Cord Blood Banks by way of Preservation of Stem Cells or related services.
4. Services provided by operators of common bio-medical waste treatment facility to clinical
establishment by way of treatment or disposal of bio-medical waste or incidental processes.
5. Services of public conveniences [Facilities of washrooms, lavatories, urinal or toilets]

Health Care Services means

 Diagnosis/treatment/care for illness, injury, deformity, abnormality or pregnancy in any recognised
system of medicines in India &
 includes services of transportation of patient to & from a clinical establishment; [Ambulance]
 but does not include hair transplant or plastic surgery except to restore/reconstruct anatomy or
functions of body affected due to congenital defects, abnormalities, injury.

Meaning of Some Terms

Clinical establishment Hospital, nursing home, clinic, sanatorium, pathological labs etc.
Paramedics Trained health care professionals [Nurse, physiotherapists, lab assistants]
Recognized systems of ◾ Allopathy; ◾ Homeopathy; ◾ Ayurveda; ◾ Naturopathy; ◾ Yoga;
medicines in India ◾ Siddha; ◾ Unani; ◾ Any other system recognized by CG

Some other Points:

Food supplied to patients = Composite supply of healthcare  GST ⌧
Food Supplied
Food supplied to any other person (visitors, staff of hospital)  GST 
Room Rent Rent of rooms provided to patients in hospitals  GST ⌧
Hospital Fees including retention money & fee/payments made to doctors  GST ⌧
Other Services Renting of shops, advertisement in hospitals  GST 

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E. SERVICES BY GOVERNMENT
1. Services provided by CG, SG, UT, LA EXCLUDING the following services by/in relation to: ↓
(a) Department of Posts by way of
 Speed post,
 Express parcel post,
Provided to a person other than CG, SG, UT
 Life insurance &
 Agency services [Distribution of MF, passport applications, collection of telephone & electricity bills]
(b) Aircraft/vessel, inside or outside the precincts of port or airport;
(c) Transport of Goods or Passengers; or
(d) Any service other than (a) to (c) provided to Business Entities.

2. Services provided by CG, SG, UT, LA to BE with aggregate TO upto 20 lacs in preceding FY (Special
Category States - Rs. 10 lacs).
Note: This entry shall not be applicable to following services:
1. (a), (b) & (c) of above Entry. & Renting of immovable property

3. Services provided by CG, SG, UT, LA to CG, SG, UT or LA.

Note: Nothing contained in this entry shall apply to 1. (a), (b) & (c).

4. Services provided by CG, SG, UT, LA if consideration for such services ≤ Rs. 5,000.
Continuous supply of service  Exemption is available only if consideration charged for such service
≤ Rs. 5,000 in a FY.
Note: Nothing contained in this entry shall apply to 1. (a), (b) & (c).

5. Supply of service by a Government Entity to

 CG, SG, UT, LA or
 any person specified by CG, SG, UT, LA for which consideration is received from CG, SG, UT, LA in
form of grants.

6. Services supplied by CG, SG, UT to their undertakings or PSUs

 by way of guaranteeing the loans taken by such undertakings or PSUs from FIs & Banks.

7. Services by old age home run by CG, SG, registered charitable trust to its residents (> 60 yrs)
 against consideration upto Rs. 25,000 per month per member,
 provided that consideration is inclusive of charges for boarding, lodging & maintenance.

54
 8. Services provided by CG, SG, UT, LA by way of:
 registration required under any law for the time being in force;
 testing, calibration, safety check or certification relating to protection or safety of workers,
consumers or public at large, including fire license, required under any law.
 issuance of passport, visa, driving license, birth certificate or death certificate.
 tolerating non-performance of a contract for which consideration in form of fines or liquidated
damages is payable to CG, SG, UT, LA under such contract. [Treated as supply of service]
 Assignment of right to use natural resources to individual farmer for cultivation & rearing all
forms of life forms except rearing of horses.
9. Services by CG, SG, UT by deputing officers after office hours or on holidays for inspection or
container stuffing for import export cargo on payment of Merchant Overtime charges.

10. Services provided by recognised rehabilitation professionals by way of rehabilitation, therapy or

counselling at medical establishments, educational institutions, rehabilitation centers established by
CG/SG/UT/registered charitable trust. [AMENDMENT]

11. Services supplied by SG to Excess Royalty Collection Contractor (ERCC) by way of assigning right
to collect royalty on behalf of SG on mineral dispatched by mining leaseholders.
 At end of contract period, ERCC shall submit an account to SG & certify that GST deposited by
mining leaseholders on royalty > GST exempted on service provided by SG to ERCC of assignment
of right to collect royalty;
 If GST paid by mining leaseholders < GST exempted, exemption shall be restricted to amount =
amount of GST paid by mining leaseholders &
 ERCC shall pay difference b/w GST exempted on service provided by SG to ERCC of assignment of
right to collect royalty & GST paid by mining leaseholders on royalty.

Note: Services by Police or security agencies of Government to PSUs/private entities  GST . Such
services are taxable supplies & recipients are required to pay tax under RCM.

F. SERVICES TO GOVERNMENT
1. Service by Fair Price Shops to CG, SG or UT by way of sale of food grains, kerosene, sugar, edible oil,
under Public Distribution System (consideration being commission/ margin.

2. To CG, SG, UT under any insurance scheme for which total premium is paid by CG, SG, UT.

3. To CG, SG, UT under any training programme where all expenditure is borne by CG, SG, UT

4. Services provided by GSTN to CG, SG, UT for implementation of GST.

5. Pure services (except works contract or other composite supplies involving supply of goods)
 provided to CG, SG, UT, LA or Governmental authority or Government Entity
 by way of any activity:
- in relation to any function entrusted to a Panchayat under article 243G.
- in relation to any function entrusted to a Municipality under article 243W.

6. Composite supply of G&S (in which value of goods ≤ 25% of total value of composite supply)
 provided to CG, SG, UT, LA or Governmental authority or Government Entity
 by way of any activity:
- in relation to any function entrusted to a Panchayat under article 243G.
- in relation to any function entrusted to a Municipality under article 243W.

55
G. CONSTRUCTION SERVICES
1. Construction & related services by way of Pure Labour Contracts of a civil structure or any other
original works pertaining to beneficiary-led individual house construction/enhancement under
‘Housing for All (Urban) Mission’ or Pradhan Mantri Awas Yojana.

2. Construction & related services by way of pure labour contracts of original works pertaining to
‘Single Residential unit’ otherwise than as a part of a residential complex.

3. Construction & related services supplied by Electricity Distribution Utilities for extending electricity
distribution network upto tubewell of farmer or agriculturalist.

4. Supply of TDR, FSI, long term lease (premium) of land by a landowner to a developer.

Condition for Constructed flats are sold before earlier of (i) issuance of completion certificate or
Exemption (ii) first occupation of project, & tax is paid on them.

Withdrawal of If flats are sold after issue of completion certificate. Such withdrawal shall be
Exemption limited to 1% of value (in case of affordable houses) & 5% of value (in case of other
houses).

H. TRANSPORTATION OF PASSENGERS
1. Transport of passengers (with or without accompanied belongings)
 By Air [Starting or ending in airport located in Arunachal Pradesh, Assam, Manipur, Meghalaya,
Mizoram, Nagaland, Sikkim, Tripura, Bagdogra located in West Bengal]
 Non-AC contract carriage (other than radio taxi) excluding tourism, tour, charter or hire.
 Non-AC Stage carriage.

2. Transportation of passengers by
(a) Railway other than (i) 1st class; or (ii) AC coach;
(b) Metro, monorail or tramway;
(c) Inland waterways;
(d) Public transport in vessel b/w places in India (other than predominantly for tourism)
Note: Transportation of passengers in normal public ships or other vessels that sail b/w places
located in India would be exempt even if some of the passengers on board are using the service for
tourism because predominantly, such service is not for tourism purpose.
However, services provided by leisure/charter vessels/a cruise, predominant purpose of which is
tourism, would be liable to GTS even if some of the passengers in such vessels are not tourists.
(e) Metered cabs or Auto rickshaws (including e-rickshaws power ≤ 4,000 watts).

3. Transportation of passengers to CG by Air starting or ending at a RCS (Regional Connectivity

Scheme) airport, against consideration in form of viability gap funding.
Note: Nothing contained in this entry shall apply on/after expiry of 3 years from date of commencement
of operations of the RCS airport as notified by the Ministry of Civil Aviation.

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I. TRANSPORTATION OF GOODS
1. Services by way of transportation of goods by:
 Road [Except (a) GTA; (b) Courier agency]
 Inland waterways
2. Transportation by Rail or Vessel of the following goods:
 Relief materials meant for victims of natural or man-made disasters, calamities, accidents;
 Defence or military equipments;
 Registered newspaper or magazines;
 Railway equipments or materials;
 Agricultural produce;
 Milk, salt & food grain including flours, pulses & rice;
 Organic manure.
3. Services provided by GTA by way of transport of
 Relief materials meant for victims of natural or man-made disasters, calamities, accidents;
 Defence or Military equipments;
 Registered Newspaper or magazines;
 Agricultural Produce; Organic manure.
 Milk, Salt & food grain including flours, pulses & rice;
 Goods [If consideration from a single consignee for all such goods ≤ Rs. 750].
 Goods [If consideration charged on consignment transported in single carriage ≤ 1,500]

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 4. Services provided by GTA to unregistered person, including unregistered CTP other than:
 Factory (Factories Act, 1948); Society (Societies Registration Act); Co-operative society
 Any body corporate; P’ship Firm (including AOP/BOI); Registered CTP.
CRUX: GTA services provided to only an unregistered individual end consumer are exempt from GST.

5. ‘Transportation of Goods’ services provided by GTA

 to Department or Establishment of CG/SG/UT; LA; Governmental Agencies which has taken
GST registration only for deducting tax u/s 51 & not for making a taxable supply of G&/S.

Meaning of GTA
 Any person who provides transport of goods by road & issues consignment note.
 Service of GTA includes not only actual transportation of goods, but also various intermediary & ancillary
services, such as, loading/unloading, packing/unpacking, transhipment & temporary warehousing,
which are provided in course of transport of goods by road.
 These services are not provided as independent services but as ancillary to principal service, namely,
transportation of goods by road.
 Invoice issued by GTA for providing said service includes value of intermediary & ancillary services.
Note: Individual truck/tempo operators who do not issue any consignment note are not GTAs.

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J. BANKING & FINANCIAL SERVICES
1. Services by Reserve Bank of India.
2. Services provided by Banking Company to Basic Saving Bank Deposit (BSBD) A/c holders under
Pradhan Mantri Jan Dhan Yojana (PMJDY).

3. Services by way of
(a) Extending deposits, loans or advances consideration for which is represented by Interest or
Discount (other than interest involved in credit card services).

(b) Sale/Purchase of Foreign Currency amongst banks or authorised dealers of foreign exchange or
amongst banks & such dealers.
Note: Services relating to Sale/Purchase of Foreign Currency provided to general public → GST 
Note: Services provided by banks to RBI → GST 

(c) Services by acquiring bank to any person in relation to settlement upto Rs. 2,000 in a single
transaction transacted through credit card, debit card, etc.
Acquiring bank: Any banking company, financial institution including non-banking financial
company or any other person, who makes the payment to any person who accepts such card.

(d) Services by Intermediary of financial services located in a multi services SEZ with International
Financial Services Centre (IFSC) status to a customer located o/s India for international financial
services in currencies other than Indian rupees (INR).

Intermediary of financial services in IFSC is a person [To be Read Once]

(a) who is permitted or recognized by Gov. of India or
(b) who is permitted or recognized by any Regulator appointed for regulation of IFSC; or
(c) who is treated as person resident o/s India under Foreign Exchange Management (International
Financial Services Centre) Regulations, 2015; or
(d) who is registered under IRDAI (IFSC) Guidelines, 2015 as IFSC Insurance Office; or
(e) who is permitted by SEBI under SEBI (IFSC) Guidelines, 2015.

Note:
1. Service charges/fees, documentation fees, broking charges, administrative charges, entry charges are
not exempt & thus, represent taxable consideration. GST will be levied on such charges.
2. Charges for late payment of outstanding dues on credit card: GST will be levied.
3. Any interest/delayed payment charges charged to clients for delay in payment of brokerage amount/
settlement obligations/margin trading facility is exempt from GST since settlement obligations/ margin
trading facilities are transactions which are in the nature of extending loans or advances.

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K. LIFE INSURANCE BUSINESS SERVICES
1. Life insurance business services provided by way of annuity under National Pension System
2. Life insurance business services provided by Army, Naval & Air Force Group Insurance Funds to
members of Army, Navy & Air Force under Group Insurance Schemes of CG.
3. Life insurance services by Naval Group Insurance Fund to personnel of Coast Guard.
4. Life insurance business services provided under following schemes:
Janashree Bima Yojana Aam Aadmi Bima Yojana Varishtha Pension BimaYojana
Pradhan Mantri Jan Dhan Pradhan Mantri Vaya Vandan Pradhan Mantri Jeevan Jyoti Bima
Yogana Yojana Yojana
Life micro-insurance product having maximum amount of cover of Rs. 2,00,000;

L. SERVICES PROVIDED BY SPECIFIED BODIES

1. Services by Employees’ State Insurance Corporation to the governed persons.

2. Services by Employees PF Organisation to the governed persons.

3. Services by Coal Mines PF Organisation to the governed persons.

4. Services by NPS Trust to its members against consideration (administrative fee).

5. Services by IRDAI to insurers under IRDAI Act, 1999.

6. Services by SEBI by way of protecting the interests of investors in securities and to promote
development of, and to regulate, securities market.

M. PENSION SCHEMES
1. Services by way of collection of contribution under Atal Pension Yojana.
2. Services by way of collection of contribution under any pension scheme of SG.

N. GENERAL INSURANCE BUSINESS SERVICES

1. General insurance business services provided under following schemes:
Niramaya Health Insurance Scheme Pilot Scheme on Seed Crop Insurance
Universal Health Insurance Scheme Pradhan Mantri Fasal Bima Yojana (PMFBY)
Rashtriya Swasthya Bima Yojana Cattle Insurance under Swarnajaynti Gram Swarozgar Yojna
Jan Arogya Bima Policy Central Sector Scheme on Cattle Insurance;
Scheme for Insurance of Tribals Agricultural Pumpset and Failed Well Insurance
Hut Insurance Scheme Restructured Weather Based Crop Insurance (RWCIS)

 Janata Personal Accident Policy and Gramin Accident Policy

 Group Personal Accident Policy for Self-Employed Women
 Premia collected on export credit insurance
 Coconut Palm Insurance Scheme;
 Pradhan Mantri Suraksha BimaYojna;

2. Services by way of Reinsurance of insurance schemes specified above.

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 O. BUSINESS FACILITATOR/CORRESPONDENT
1. Services by business facilitator/correspondent to banking company (w.r.t A/c in rural area);

2. Services by intermediary to business facilitator/correspondent w.r.t services mentioned above

3. Services by business facilitator/correspondent to insurance company in a rural area.

 BCs/BFs help villagers to open bank accounts & provide other banking services to them. They act as an
intermediary b/w bank & its customers. Banks, in turn, pay commission/ fee to the BCs/BFs.
 Banking company is the service provider to the ultimate customer in BF/BC model. Banking company is
liable to pay GST on entire value of fee charged to customers whether or not received via BF/BC.

P. LEASING SERVICES
1. Upfront amount (called as premium, salami, cost, price, development charges etc) payable for granting
of long term lease of 30 years or more of industrial plots or plots for development of
infrastructure for financial business, provided by SG Industrial Development Corporations or by any
other entity having 50% or more ownership of CG, SG, UT to industrial units or developers in any
industrial or financial business area.
Note: GST exemption on ‘upfront amount’ is admissible irrespective of whether such upfront amount is
payable or paid in one or more instalments, provided the amount is determined upfront.

2. Services of leasing of assets (wagons, coaches, locos) by IRFC to Indian Railways.

Q. LEGAL SERVICES
Service BY Service provided TO
Firm/Individual  Advocate (all) or partnership firm of advocates providing legal services;
advocate  Any person other than BE;
other than senior  BE with Aggregate TO upto Rs. 20 lacs in preceding FY. (10 lacs for SCS);
advocate
 CG, SG, UT, LA, Governmental Authority or Government Entity.
(Legal services)
Senior Advocate  Any person other than BE
OR  BE with Aggregate TO upto Rs. 20 lacs in preceding FY. (10 lacs for SCS)
Arbitral tribunal  CG, SG, UT, LA, Governmental Authority or Government Entity.

Note: Legal services provided to a BE with aggregate turnover > 20/10 lacs in preceding FY are liable to
GST. Further, tax is payable by the business entity on such services under RCM.

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 R. SKILL DEVELOPMENT SERVICES
Service by Service provided to
 National Skill Development Corporation  National Skill Development Programme
 Sector Skill Council approved by NSDC implemented by NSDC
 Assessment agency approved by SSC/NSDC  Vocational skill development course
 Training partner approved by SSC/NSDC  Any other Scheme implemented by NSDC.

 Services of assessing bodies empanelled centrally by DGT, Ministry of Skill Development &
Entrepreneurship by way of assessments under Skill Development Initiative Scheme.
 Services provided by training providers under Deen Dayal Upadhyaya Grameen Kaushalya Yojana
(DDUGKY) implemented by Ministry of Rural Development, GoI by way of offering skill or vocational
training courses certified by the National Council for Vocational Training.

S. SPONSERSHIP SERVICES:
Services by sponsorship of sporting events organized by:
(a) National Sports federation/its affiliated federations [District, State, zone or Country level];
(b) Association of Indian Universities, Inter-University Sports Board, School Games Federation of India,
All India Sports Council Deaf, Paralympic Committee or Special Olympics Bharat;
(c) Central Civil Services Cultural & Sports Board; Indian Olympic Association;
(d) Panchayat Yuva Kreeda Aur Khel Abhiyaan Scheme.

T. PERFORMANCE BY AN ARTIST
 In Folk or Classical art forms of music/dance/theatre,
 if consideration charged ≤ Rs. 1,50,000.
Note: Activities by an artist in other art forms (western music/dance, modern theatres, performance
of actors in films/tv serials, artists in still art forms (painting, sculpture) → GST .
 Service provided by an artist as Brand Ambassador → GST .

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 U. RIGHT TO ADMISSION TO VARIOUS EVENTS
1. Admission to museum, national park, sanctuary, tiger reserve, zoo, protected monument.

2. By way of right to admission to

 Circus, Dance, or theatrical performance (including drama/ballet)
If Consideration
 Award function, Concert, Pageant, Musical performance, planetarium ≤ 500 per person
 Recognized sporting event
 Any sporting event (other than recognised sporting event)

Recognised sporting event means any sporting event organized by:

(a) Recognised sports body [District, state, zone or country level]
(b) National sports federation/its affiliated federations [District, State, zone or Country level];
(c) Association of Indian Universities, Inter-University Sports Board, School Games Federation of India, All India
Sports Council Deaf, Paralympic Committee or Special Olympics Bharat;
(d) Central Civil Services Cultural and Sports Board; Indian Olympic Association;
(e) Panchayat Yuva Kreeda Aur Khel Abhiyaan Scheme.

Recognised sports body

 Indian Olympic Association; ◾ Sports Authority of India;
 National sports federation recg. by Ministry of Sports & Youth Affairs of CG & its affiliate federations
 National sports promotion organisations recognized by Ministry of Sports and Youth Affairs of CG
 International Olympic Association or federation recognized by International Olympic Association;
 Federation or a body which regulates a sport at international level and its affiliated federations.

Services provided to a Recognized Sports Body by

(a) Player, referee, umpire, coach/manager for participation in sporting event organized by RSB.
(b) Another recognized sports body.
Note: Selectors, commentators, curators, technical experts  GST ; IPL  GST .

V. SERVICES BY CO-OPERATIVE SOCIETY

1. Service by an unincorporated body or a non- profit entity registered under any law to its own members
by way of reimbursement of charges or share of contribution:
(a) as a trade union;
(b) for the provision of carrying out any activity which is exempt from levy of GST;
(c) upto Rs. 7,500 per month per member for sourcing of G/S from third person for common use
of its members in a housing society or a residential complex.
If turnover of housing society > applicable threshold limit for registration, it needs to take registration under GST.
However, taking registration does not mean that housing society has to compulsorily charge GST in monthly
maintenance bills raised on its members. If services provided by it are exempt, then it is not required to charge GST
on the said services.

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W. OTHER EXEMPT SERVICES
1. Transfer of a going concern (running business), as a whole or independent part thereof.
Ex: Royal Hotel Group is in the business of running a chain of restaurants. It intends to sell its business as a going
concern. It would not be required to pay GST on such sale of its business.
2. Supply of services associated with transit cargo to Nepal & Bhutan (landlocked countries).
3. Services by way of Renting of residential dwelling for use as residence.
4. Services by a hotel, inn, guest house, club or campsite for residential or lodging purposes, having
Value of Supply of a unit of accommodation < Rs. 1,000 per day or equivalent.
5. Services by way of giving on hire
 Motor vehicle (carrying > 12 passengers) to state transport undertaking only.
 Means of transportation of Goods to GTA.
 Motor vehicle for transport of SSF to a person providing transportation services to schools.
6. Service by way of access to a road or a bridge on payment of toll charges.
7. Service by way of access to a road or a bridge on payment of annuity.
8. Transmission/distribution of electricity by an electricity transmission/distribution utility.
 Application fee for releasing connection of electricity;
 Rental Charges against metering equipment;
 Testing fee for meters/transformers, capacitors etc.; GST 
 Labour charges from customers for shifting of meter or service line;
 Charges for duplicate bill.
9. Services provided by incubatee upto total turnover of Rs. 50 lacs in a FY subject to:
 Total turnover during preceding FY ≤ Rs. 50 lacs &
 3 years has not elapsed from the date of entering into an agreement as an incubatee.
Incubatee: means an entrepreneur located in Technology Business Incubator (TBI)/ Science &
Technology Entrepreneurship Park (STEP) recognised by NSTEDB.
10. Taxable services, provided by TBI/STEP or bio-incubators.

11. Licensing, registration & analysis or testing of Food Samples.

12. Services by way of Collecting or Providing News by an independent journalist, PTI or UNI.

13. Services by way of providing information under the RTI Act

14. Services of Public Libraries by way of lending of books, publications.

15. Services by organiser to any person in respect of a business exhibition held outside India.

16. Services by way of slaughtering of animals.

17. Services by a foreign diplomatic mission located in India.

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 Basics:-
1. The action of removing any tax obligation or
liability imposed can be called as
___________ ?
a. Refund
b. Discount
c. Exemption
d. Allowance
Ans:-

7. Does exemption from IGST automatically operate

as exemption from CGST?
a. Yes
b. No
c. In selected cases
d. Yes, and from SGST also
Ans:-

8. Is the exemption or exclusion from GST the same

thing?
a. Yes
b. No
c. In selected cases
d. Can’t be differentiated
Ans:-
10. Is it necessary to deposit the tax collected
wrongly on the supply of goods or services
exempted?
a. No, if he doesn’t want to claim ITC
b. Yes, it is compulsory
c. No, it’s prohibited
d. None of these
Ans:-

11. Service by way of transfer of ___________ is

exempt from GST.
a. Going concern
b. Goodwill
c. Patent
d. Copyright
Ans:-

Basics:-
12. Where there are two possible interpretations
of taxing provisions, one which is
_____________ to the assesse should be
preferred.
a. Against
b. Less favourable
c. Favourable
d. None of the above
Ans:-

Health Care :-

13. Which of the following services provided by

Good Health Care Nursing home are not
exempt?
(1) Reiki healing treatment.
(2) Plastic surgery conducted to repair cleft lip of a Charitable & Religious Sector:-
new born baby.
(3) Air ambulance services to transport critically ill 15. Which one of the following is true?
patients from distant locations to Ayushman a. Entire income of any trust is exempted from GST
Medical Centre. b. Entire income of a registered trust is exempted
(4) Palliative care for terminally ill patients. On from GST
request, such care is also provided to patients c. Income from specified / defined charitable
at their homes. (Palliative care is given to activities of a trust are exempted from GST
improve the quality of life of patients who have d. Incomes from specified / defined charitable
a serious or life threatening disease but the activities of a registered trust (u/s 12AA of
goal of such care is not to cure the disease). Income Tax Act) are exempted from GST
(5) Alternative medical treatments by way of Ans:-
Ayurveda.
a. (1) and (3)
b. (2) and (4)
c. (1)
d. (1), (4) and (5) .
Ans:-
 16. Services by a person by way of conduct of
any ___________ is exempt from GST.
a. Religious Ceremony
b. Marriage Ceremony
c. Festival Ceremony
d. Entertainment Ceremony
Ans:-

Legal Sector:-
20. If the aggregate turnover of in FY 2018-19 of M/s
Guruganesh Enterprises, Aurangabad,
Maharashtra, India was `18.5 lakh, exemption is
available for the following services rendered to
Guruganesh Enterprises -
a. Arbitral Tribunal services
b. Legal services by firm of advocates
c. Legal services by senior advocate
d. All of the above
Ans:-
 (c) (iv)
(d) all of the above
Ans:-

27. Warehousing of _____________ is exempt from

GST.
1) Rice.
2) Minor forest produce
Agriculture Sector:- 3) Jaggery
4) Whole gram
22. Which of the following is not exempted -? a) 1), 2) and 4)
a. Health care service to human beings by b) 1) and 3)
authorized medical practitioners / para medics c) 2), 3) and 4)
b. Health care services to Animals/Birds d) 3)
c. Slaughtering of animals Ans:-
d. Rearing horses
Ans:-

23. If services by way of breeding of fish is `

5,00,000 and supply of firm labour is `
2,00,000, the taxable value of supply will be:
(a) ` 5,00,000
(b) ` 2,00,000
(c) Nil
(d) ` 7,00,000.
Ans:-

24. ABC Ltd. has income from renting of vacant

land to a stud firm of ` 1,00,000 and leasing of
vacant land to a cattle firm of ` 50,000. The
value of taxable supply will be:
(a) ` 1,00,000
(b) ` 50,000
(c) ` 1,50,000
(d) Nil.
Ans:-

25. Which of the following services are exempt

under GST?
(a) tes ng of agricultural produce
(b) supply of farm labour
(c) warehousing of agricultural produce
(d) all of the above
Ans:-
 Transport Sector:-

30. Transportation of passengers exempted if -

a. It is by air-conditioned stage carriage
b. It is by air-conditioned contract carriage
c. It is by non-air-conditioned stage carriage for
tourism, charter or hire
d. None of the above 36. Transport of ______________ by rail are
Ans:- exempt from GST:
(a) Milk
31. Transportation of passengers is exempted - (b) Salt
a. In an air-conditioned railway coach (c) Defence equipments
b. In a vessel for public tourism purpose between (d) All of the above
places in India Ans:-
c. In a metered cab/auto rickshaw / e rickshaw
d. In all the above mentioned
Ans:-

32. Transportation of goods is not exempted if it

is -
a. by a goods transport agency / courier agency
b. by inland waterways
c. by an aircraft from a place outside India upto
the customs station of clearance in India
d. by all the above mentioned
Ans:-

33. Transportation of agricultural produces, milk,

salt and food grain including flour, pulses and
rice, 'relief materials meant for victims of
natural or man-made disasters, calamities,
accidents or mishap', newspaper or
magazines registered with the Registrar of
Newspapers - is exempted
a. If it is by a goods transport agency
b. If it is by a rail - within India
c. If it is by a vessel - within India
d. If it is by all of the above
Ans:-
 Ren ng of Immovable property/ Hotel/ INN, etc.:-
42. Mr. Narayan Goel has booked a room on rent
41. Renting of residential dwelling for any purpose
in Sunshine Hotel for the purpose of lodging on
is exempt from GST. Comment.
10.08.20XX. GST is not payable by Mr.Narayan
a. Yes, it can be rented for usage of any purpose.
Goel in case rent for the same is____
b. No, it should have been rented for residential
(a) ` 800
purpose only.
(b) ` 6000
c. No, it should have been rented for commercial
(c) ` 11000
purpose only (d) ` 1500
d. No, it should have been rented for charitable Ans:-
purpose only.
Ans:-
 45. Which of the following are services exempt from
GST?
(a) Services by an artist by way of a performance in
folk or classical art forms of painting/sculpture
making etc. with consideration therefor not
exceeding ` 1.5 lakh.
(b) Services by an artist by way of a performance in
modern art forms of music/ dance/ theatre with
consideration therefor not exceeding ` 1.5
lakh.
(c) Services by an artist by way of a performance in
folk or classical art forms of music/
dance/theatre with consideration therefor not
exceeding ` 2.5 lakh.
(d) Services by an artist by way of a performance in
folk or classical art forms of music/ dance /
theatre with consideration therefor not
exceeding ` 1.5 lakh.
Ans:-

46. Services by way of admission to

______________ are exempt from GST.
(a) Museum
(b) National park
(c) Tiger reserve
(d) All of the above
Ans:-

Banking & Financial Sector:-

49. Bank extended housing loan of ` 20,00,000 to Mr.
A. The taxable value of supply will be:
(a) ` 20,00,000
(b) Nil, as not service
(c) Nil, as exempted vide notification
(d) None of the above.
Ans:-
 Educa on Sector:-
51. Renting of property to an educational body is:
(a) taxable
(b) not chargeable to GST
(c) Not at all supply
(d) None of the above.
Ans:-

56. Which of the following services is exempt?

a. Basic mail services
b. Speed post services
c. Express parcel post services
d. Life insurance services
Ans:-
58. Which is a wrong statement?
a. All services of Department of Post are exempted
b. All services by State/Central Governments/local
authorities in relation to an aircraft or a vessel in
a Port or an Airport are exempted
c. All services by State/Central Governments/local
authorities in relation to transport of passengers
are exempted
d. All the above mentioned
Ans:- 62. Which of the following schemes of the life
insurance business is exempted?
(a) Janashree Bima Yojana
(b) Aam Aadmi BimaYojana
(c) Varishtha Pension BimaYojana
(d) All of the above.
Ans:-

63. Which of the following services are not exempt

from GST?
(a) Yoga camp conducted by a charitable trust
registered under section 12AA of the Income-tax
Act, 1961.
(b) Services provided by business correspondent to
the rural branch of a bank with respect to
Savings Bank Accounts
(c) Services provided by cord blood bank for
preservation of stem cells.
(d) Service provided by commentator to a recognized
sports body
Miscellaneous :- Ans:-
60. Core services of which organization is not
exempted -
a. Services provided by the Insurance Regulatory
and Development Authority of India to insurers
b. Services provided by the Securities and
Exchange Board of India set up under the
Securities and Exchange Board of India Act,
1992 (15 of 1992) by way of protecting the
interests of investors
c. Services by Port Trusts
d. Services by the Reserve Bank of India
Ans:-
66. Which of the following activities are exempt
from GST?
(a) Religious pilgrimage organised by Todarmal
Charitable Trust.
(b) Loading, packing and warehousing of jaggery
and pulses.
(c) Milling of paddy into rice.
(d) None of the above. Answer:-
Ans:- . 1 c 18 a 35 a 52 a 69 d

2 a 19 a 36 d 53 a
67. Which of the following statements is true?
3 b 20 d 37 d 54 b
1. Services provided by Government ITIs to individual
trainees are exempt from GST. 4 c 21 a 38 a 55 d
2. Services provided by the State Governments and
Private Service Providers by way of transportation of 5 a 22 d 39 a 56 a
patients in ambulance are exempt from GST. 6 c 23 c 40 b 57 a
3. Services of renting of shops in a hospital are exempt
from GST being health care services. 7 b 24 a 41 b 58 d
4. Services provided by Police to PSUs are taxable.
8 b 25 d 42 a 59 a
(a) 1, 2 & 4
(b) 2, 3 & 4 9 a 26 c 43 b 60 c
(c) 3. & 4.
(d) All of the above. 10 b 27 a 44 b 61 b
Ans:-
11 a 28 c 45 d 62 d

12 c 29 b 46 d 63 d

13 c 30 d 47 a 64 c

14 a 31 c 48 d 65 c

15 d 32 a 49 b 66 d

16 a 33 d 50 a 67 a

17 a 34 d 51 a 68 c
5A. TIME OF SUPPLY

BY JP GARG SIR

FOR ALL COMPETITIVE EXAMS

 COMMERCE MERI JAAN
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 Abhishek Ojha SIR
❑ Working as Jr. Accounts Officer in BSNL
❑ Company secretary
❑ Got 2nd Rank in BSNL Accounts Officer
❑ Cleared 2 times UGC NET
❑ CA IPCC
❑ Post Graduate in Commerce (ABST) from Rajasthan University,
Jaipur
❑ Having experience of more than 8 yrs for providing classes Online
& offline
 JP GARG SIR
❑ Pursuing PhD in commerce
❑ Cleared UGC NET JRF
❑ Cleared 2 times UGC NET
❑ Got AIR 3rd in JR. Accountant Exam of AVVNL in 2018
❑ Cleared H.TET
❑ B.ED
❑ CA IPCC
❑ Post graduate in commerce(ABST) from Rajasthan University, Jaipur
❑ Having Experience of more than 8 years for providing classes online &
offline
INTRODUCTION
 It is a point in time when liability to charge tax arises.
 To understand concept of time of supply, we must first know time period for issuance of Tax Invoice.

DATE OF RECEIPT OF PAYMENT = Earlier of (For the purpose of this chapter)

(i) Date on which Payment is entered in the books of A/c of recipient.
(ii) Date on which Payment is debited from the bank A/c of recipient.

TIME OF ISSUE OF TAX INVOICE FOR SUPPLY OF GOODS [SEC 31]

GENERAL CASE [Section 31(1)]: Before or at the time of
Case Time of issue of Invoice for Goods
If supply involves Movement of Goods Removal of goods for supply to the recipient
In other cases Delivery of goods or making available to the recipient

Ex: Ritu Manufacturers, Delhi supplies goods to Prakhar Electronics, Haryana. The goods were removed from its
factory in Delhi on 23rd September. Ritu Manufacturers needs to issue a tax invoice on or before 23rd September.

CONTINUOUS SUPPLY [Sec 31(4)] [Successive statements of A/Cs or Payments are involved]
 Before or at the time each such statement is issued or each such payment is received.

GOODS SENT ON APPROVAL [Sec 31(7)]

(a) Date when Recipient indicates that he has accepted the supply of goods;
(i.e at the time of supply) whichever is earlier
(b) Within 6 months from the Date of Removal.

TIME OF SUPPLY OF GOODS

FORWARD CHARGE [SEC 12(2)]
(a) Date of Issue of Invoice by the supplier;
Earlier of
(b) Last Date on which invoice is required to be issued u/s 31.

Points to be Noted:
1. No GST is payable on advances received for supply of goods under Forward charge.
2. Excess Payment Received upto Rs. 1,000.
If Payment received > value of goods in Invoice (excess being) upto Rs. 1,000; Supplier can choose to
take Date of Invoice issued w.r.t such excess amount as ToS of goods for such excess value.
3. Supply shall be deemed to have been made to the extent it is covered by the invoice/payment.

Ex: A Ltd. enters into an agreement with B Ltd. to supply 100 kg of raw material. However, A Ltd. supplies only 80
kg of raw material and issues the invoice for the same. Here, the supply would be deemed to have been made in
respect of 80 kg of raw material, i.e. to the extent covered by the invoice. Therefore, the provisions relating to time of
supply will also be applicable to supply of 80 kg of raw material and not for entire 100 kg of raw material.

Q1. Determine the Time of supply in each of the following independent cases if supply involves movement of goods.
SN Date of Removal Date of invoice Date when goods made available Date of Payment
1. 1.2.2019 2.2.2019 3.2.2019 15.3.2019
2. 3.2.2019 1.2.2019 4.2.2019 25.3.2019
3. 4.3.2019 4.3.2019 6.3.2019 1.2.2019

76
Answer:
 As per sec 12(2), in case of forward charge, time of supply shall be earlier of:
(a) Date of Issue of Invoice by the supplier or
(b) Last Date on which invoice is required to be issued u/s 31.
 As per section 31, supplier of goods is required to issue invoice on/before removal of goods.
 Thus, in case of supply transaction involving movement of goods, time of supply shall be earlier of:
(a) Date of Issue of Invoice by the supplier or
(b) Date of Removal of Goods (which is the Last Date on which invoice is required to be issued u/s 31).
 Thus Date of Payment & Date when goods are made available to recipient becomes irrelevant in this question.
SN Date of Removal Date of invoice ToS Reason
Since invoice is not issued on/before the date of
1 1.2.2019 2.2.2019 1.2.2019
removal, ToS is date of removal of goods.
Since invoice is issued prior to date of removal of
2 3.2.2019 1.2.2019 1.2.2019
goods, ToS is date of issuance of invoice
Since invoice is issued prior to date of removal of
3 4.3.2019 4.3.2019 4.3.2019
goods, TOS is date of issue of invoice.
, Note: No GST will be payable on advances received for supply of goods.

REVERSE CHARGE [SEC 12(3)]

(a) Date of Receipt of Goods;
(b) Date of Receipt of Payment;
Earlier of
(c) Date immediately following 30 days from date of issue of invoice (or any other
document in lieu thereof) by supplier

Note: If it is not possible to determine ToS using sec 12(3), ToS = Date of entry in books of A/c of the
recipient of supply.

Q2. Determine the time of supply in the following cases assuming that GST is payable under reverse charge:
SN Date of Invoice Date of Receipt Date of payment by recipient of goods
1 30.11.2018 2.12.2018 25.11.2018: Part payment made;
28.12.2018: Balance amount paid
2 1.11.2018 5.12.2018 Payment is entered in books of A/c on 25.11.2018 & debited in
recipient's bank account on 28.11.2018
3 30.11.2018 2.12.2018 Payment is entered in the books of A/c on 25.11.2018 & debited in
recipient's bank account on 20.11.2018

Answer: In case of RCM, ToS shall be earlier of

(a) Date of Receipt of Goods
(b) Earlier of (i) Date on which Payment is entered in books of A/c of recipient.
(ii) Date on which Payment is debited from bank A/c of recipient.
(c) Date immediately following 30 days from date of issue of invoice by supplier

SN Date of Date immediately Date of Date of payment ToS of goods

Invoice following 30 days Receipt by recipient of goods
from date of of goods
invoice
1 30.11.2018 31.12.2018 2.12.2018 25.11.2018: Part payment; 25.11.2018 for part payment
28.12.2018: Balance payment 2.12.2018: Balance amount
2 1.11.2018 2.12.2018 5.12.2018 25.11.2018 25.11.2018
3 30.11.2018 31.12.2018 2.12.2018 20.11.2018 20.11.2018

77
VOUCHERS SUPPLIED BY SUPPLIER [SEC 12(4)]

Case Time of Supply

(i) If Supply is Identifiable at that point Date of Issue of Voucher
(ii) All other cases Date of Redemption of Voucher

RESIDUAL CASES [SEC 12(5)] [If it is not possible to determine ToS using 12(2), 12(3), 12(4)]

Case Time of Supply

(i) If GST Periodical Return has to be filed Date on which such return is to be filed
(ii) All other cases Date on which GST is paid.

INTEREST, LATE FEE, PENALTY → ToS = Date of receipt of such amount by supplier.

Ex: Radha Traders sold goods to Shyam Sales on 6th June with a condition that interest @ 2% per month will be
charged if Shyam Sales failed to make payment within 15 days of delivery of the goods. Goods were delivered as also
the invoice was issued on 6th June. Shyam Sales paid the consideration for the goods on 6th July along with interest.
ToS for the goods sold is the date of issue of invoice i.e., 6th June & ToS for addition in value by way of interest is
date when such addition in value is received by Radha Traders i.e., 6th July.

TIME OF ISSUE OF TAX INVOICE FOR SUPPLY OF SERVICES [SEC 31]

GENERAL CASE [Section 31(2)] Before or after provision of service BUT
Case Time of issue of Invoice for Services
In Normal cases within 30 days from date of Provision of Service.
In case of Insurance, Banks & NBFC within 45 days from date of Provision of Service.

Ex: Katyani Security Services Ltd. provides security services to Royal Jewellers for their Jewellery Exhibition to be
organized on 5th October. Katyani Security Services Ltd. needs to issue a tax invoice within 30 days of supply of
security services, i.e. on or before 4th November.

78
CONTINUOUS SUPPLY [Sec 31(5)]
Case Time of issue of Invoice for Services
Due date of Payment is ascertainable from contract On/before due date of payment
Due date of Payment is not ascertainable from contract Before/at time of receipt of payment
Payment is linked to completion of an event On/before completion of that event

SUPPLY OF SERVICES CEASES BEFORE COMPLETION OF SUPPLY (under a contract) [Sec 31(6)]
 At time when supply ceases & only to extent of supply made before such cessation.

Q3. Mr. X had a contract for supplying services for 365 days for Rs. 36,500. However, after 50 days, he has stopped
supply of service. He has asked you for an advice as to whether he should raise an invoice or not?
Ans: Yes. Where a supply of service ceases before its completion, an invoice has to be issued at the time when the
supply ceases, i.e., on 50th day. Invoice shall be issued to the extent of service provided before its cessation.

TIME OF SUPPLY OF SERVICE

FORWARD CHARGE [SEC 13(2)]
Cases Time of Supply [Earlier of ↓]
If invoice is issued within Time limit Date of (i) Issue of invoice or (ii) Receipt of Payment

If invoice is not issued within Time limit Date of (i) Provision of service or (ii) Receipt of Payment

Points to be noted:
 If ToS cannot be found out using above provisions, ToS = Date of receipt of services as shown in
books of A/c of recipient.
 Supply shall be deemed to have been made to extent it is covered by invoice or payment.
 Excess Payment Received upto Rs. 1,000: Same as supply of goods.

REVERSE CHARGE [SEC 13(3)]

Earlier (a) Date of receipt of payment
of (b) 61st days from date of issue of invoice (or any other document in lieu thereof) by supplier

IMPORT OF SERVICE B/W ASSOCIATED ENTERPRISES (supplier is located outside India)

 ToS = Earlier of (i) Date of entry of service in books of A/c of the recipient or (ii) Date of Payment.

Note: If it is not possible to determine ToS using sec 12(3), ToS = Date of Entry in books of A/c of
Recipient of Supply.

VOUCHERS SUPPLIED BY SUPPLIER [SEC 13(4)] → Same as ToS for Goods u/s 12(4)

RESIDUAL CASES [SEC 13(5)] [If it is not possible to determine ToS using 13(2), 13(3), 13(4)]
→ Same as ToS for Goods u/s 12(5)

INTEREST, LATE FEE, PENALTY → Same as ToS for Goods

Second Proviso to Rule 47 [Inter – branch Transfer]

 Insurance/banking companies/FIs/NBFCs/Telecom companies/notified supplier of services
 making taxable supplies b/w distinct person u/s 25,
 invoice may be issued (i) before or at time of recording such supply in books of A/c or
(ii) before expiry of quarter during which supply was made.

79
Q4. XY Ltd. is located in India & holding 51% of shares of ABC Ltd., a USA based company. ABC Ltd. provides Business
Auxiliary Services to XY Ltd. Determine the time of supply of XY Ltd.:
Agreed consideration US $ 1,00,000
Date on which services are provided by Wilson Ltd. 16.12.2018
Date on which invoice is sent by Wilson Ltd. 19.12.2018
Date of debit in the books of account of Apte & Apte Ltd. 30.12.2018
Date on which payment is made by Apte & Apte Ltd. 23.03.2019
Answer:
 XY Ltd. of India & ABC Ltd. of US are ‘associated enterprises’ as XY Ltd. holds 51% shares of US based company.
 As per Section 13(3), in case of supply by associated enterprises, where the supplier of service is located outside
India, ToS shall be earlier of: (a) Date of entry in the books of A/c of recipient of supply; or (b) Date of payment.
 Therefore, the time of supply shall be 30.12.2018.

Q5. Determine the time of supply in the following cases assuming that GST is payable under reverse charge:
SN Date of payment by recipient of services Date of Invoice
1 10.10.2018 29.08.2018
2 10.10.2018 01.08.2018
3 Part payment made on 30.08.2018 & balance amount paid on 01.11.2018 29.08.2018
4 Payment is entered in the books of A/c on 28.08.2018 & debited in recipient's bank 01.08.2018
account on 30.08.2018
5 Payment is entered in the books of A/c on 30.08.2018 & debited in recipient's bank 29.08.2018
account on 26.08.2018
Answer:
SN Date of Date immediately Date of Payment ToS
Invoice following 60 days from
invoice
1 29.08.2018 29.10.2018 10.10.2018 10.10.2018
2 01.08.2018 1.10.2018 10.10.2018 01.10.2018
3 29.08.2018 29.10.2018 Part payment made on 30.08.2018 for part payment;
30.8.2018 & balance 29.10.2018 for balance
amount paid on 1.11.2018
4 01.08.2018 1.10.2018 28.08.2018 28.08.2018 (i.e. when payment is
entered in books of A/c of recipient)
5 29.08.2018 29.10.2018 26.08.2018 26.08.2018 (i.e. when payment is
debited in recipient's bank A/c)

Q6. Income-tax search was carried out at house of Mr. X working in MNC. Undisclosed assets were found, which he
claims as service income. Dates of service are not known. Find ToS if Mr. X voluntarily pays GST during investigation.
Answer:
 If it is not possible to determine ToS & where periodical return is not to be filed (Mr. X, being an employee in MNC
is not a registered person), date of payment of tax is taken as the time of supply.
 Therefore, the date when Mr. X pays the GST will be the time of supply.

Q7. Gadiwala Ltd. is engaged in supply of cleaning services in residential premises. Investigation shows that Gadiwala
Ltd. carried out service of cleaning & repairs of tanks in Paradise society, for which society showed a payment in cash
on 25.12.2019 to them against work of this description. Dates of the work are not clear from the records of Gadiwal
Ltd. Gadiwala Ltd. have not issued invoice or entered the payment in their books of account. Determine ToS.
Answer:
 ToS cannot be determined using section 13(2)(a)/(b) as neither the invoice has been issued nor the date of
provision of service is available & date of receipt of payment in the books of supplier is not available.
 Therefore, ToS will be determined using section 13(2)(c) i.e., date on which the recipient of service shows receipt
of the service in his books of account.
 ToS = 25.12.2018, the date on which Kamal Housing society records the receipt of service in its books of A/c.

80
 MCQ
Q.1. Date on which the supplier receives the payment
as per section 12 of CGST Act is
(a) Date entered in books of Accounts
(b) Date of Credit in bank account
(c) Date entered in books of accounts or date of credit in
bank account, whichever is earlier
(d) Date on which receipt voucher is issued by supplier
Ans.: (c) Date entered in books of accounts or date of
credit in bank account, whichever is earlier

Q.2. What is time of supply of goods liable to tax

under reverse charge mechanism?
(a) Date of receipt of goods
(b) Date on which the payment is made
(c) Date immediately following 30 days from the date of
issue of invoice by the supplier
(d) Earlier of (a) or (b) or (c)
Ans.: (d) Earlier of (a) or (b) or (c)

Q.3. what is the time of supply of vouchers when the

supply with respect to the voucher is identifiable?
(a) Date of issue of voucher
(b) Date of redemption of voucher
(c) Date of entry in books of accounts
(d) Earlier of (a) or (b) or (c)
Ans.: (a) Date of issue of voucher

Q.4. What is the time of supply of vouchers when the

supply with respect to the voucher is not identifiable?
(a) Date of receipt of goods
(b) Date on which the payment is made
(c) Date immediately following 30 days from the date of
issue of invoice by the supplier
(d) None of above
Ans.: (d) None of above

Q.5. What is the time of supply of service if the invoice

is not issued within 30 days from the date of provision
of service?
(a) Date of issue of invoice
(b) Date on which the supplier receives payment
(c) Date of provision of service
(d) Earlier of (b) and (c)
Ans.: (d) Earlier of (b) and (c)

Q.6. What is the time of supply of service in case of

reverse charge mechanism?
(a) Date on which payment is made to the supplier
(b) Date immediately following 60 days from the date of
issue of invoice
(c) Date of invoice
(d) Earlier of (a) and (b)
Ans.: (d) Earlier of (a) and (b)
 Section 12 Q7. M/s ABC made an arrangement with M/x PQR for
supply of goods on 15th July, at this time goods
Q1. Which section governs the provisions didn't cross frontiers. The payment of goods
regarding determining time of supply of has been made on 16th July, while the invoice
goods? was made on 18th July. What will be the time of
a. Section 12 supply in such a case?
b. Section 13 a. 15th July
c. Section 14 b. 16th July
d. Section 15 c. 18th July
Ans:- d. 16th July or 18th July whichever is suitable to
Q2. The time of supply fixes the point when the supplier
_______________ to / of GST arises. Ans:-
a. Liability
b. Payment
c. Provision
d. Recovery
Ans:-

Q3. What is the date of receipt of payment?

a. Date on which payment is entered in the books
of account
b. Date on which payment is credited to the bank
account
c. Earlier of (a) or (b)
d. Either of (a) or (b)
Ans:-

Q4. What is time of supply of goods, in case of

forward charge?
a. Date of issue of invoice
b. Due date of issue of invoice
c. Date of receipt of consideration by the supplier
d. Earlier of (a) & (b)
Ans:-

Q6. Mr. Ram sold goods to Mr. Shyam worth `

5,00,000. The invoice was issued on 15th Q10. Where goods are packed and transported with
November. The payment was received on 30th insurance, the supply of goods, packing
November. The goods were supplied on 20th materials, transport and insurance is a
November. The time of supply of goods will composite supply and supply of goods is the
be:— principal supply. Which section will govern the
a. 15th November time of supply provisions in this case?
b. 30th November a. Section 12
c. 20th November b. Section 13
d. None of the above. c. Section 14
Ans:- d. Section 15
Ans:-
Q12. The relaxation of non payment of taxes on the
advance receipt is only to the supplier of goods
and not to the providers of service.
a. Correct
b. Incorrect
c. Partly correct
d. Partly incorrect
Ans:-

Sec 12(3) - Time of Supply of goods in case of reverse charge

Q13. Reverse charge means the liability to pay tax by

the _______________ of goods or services or
both instead of the _______________ of such
goods or services or both.
a. Recipient, Supplier
b. Recipient, Agent
c. Supplier, Recipient
d. Agent, Recipient
Ans:-

Q14. What is time of supply of goods liable to tax

under reverse charge mechanism?
a. Date of receipt of goods
b. Date on which the payment is made
c. Date immediately following 30 days from the date
of issue of invoice by the supplier
d. Earlier of (a) or (b) or (c)
Ans:-

Q15. On 04.09.2018, supplier invoices goods taxable

on reverse charge basis to ABC & Co. ABC & Co.
receives the goods on 12.09.2018 and makes
Sec 13 - Time of Supply of Service
payment on 30.9.2018. determine the time of
supply. Q18. What is the time of supply of service if the
a. 04.09.2018 invoice is issued within 30 days from the date
b. 04.10.2018 of provision of service?
c. 12.09.2018 a. Date of issue of invoice
d. 30.09.2018 b. Date on which the supplier receives payment
Ans:- c. Date of provision of service
d. Earlier of (a) & (b)
Ans:-
Q19. What is the time of supply of service in case an
associated enterprise receives services from
the service provider located outside India?
a. Date of entry in the books of account of
associated enterprise(recipient)
b. Date of payment
c. Earlier of (a) & (b)
d. Date of entry in the books of the supplier of
service
Ans:-

Sec 13(3) - Time of Supply in case of reverse charge

Q25. What is the time of supply of service in case of

Q22. Which section governs the provisions reverse charge mechanism?
regarding determining time of supply of a. Date of payment as entered in the books of
services? account of the recipient
a. Section 12 b. Date immediately following 60 days from the
b. Section 13 date of issue of invoice
c. Section 14 c. Date of invoice
d. Section 15 d. Earlier of (a) & (b)
Ans:- Ans:-
 Sec 13(4) - Time of Supply in case of voucher
Q26. Mr. A purchases redeemable vouchers worth
INR 8000/- on 1st January. The vouchers are
redeemable against purchase of any goods. Sec 13(5) - Time of Supply in Residual case
The vouchers are valid till 30th June. What will
be the time of supply in case of such vouchers? Q31. What is the time of supply of goods in residuary
a. 1st January cases, in case where a periodical return has to
b. 30th June be filed?
c. The date of redemption of vouchers a. Date on which return is to be filed
d. None of the above b. Actual date of filing of return
Ans:- c. Date of payment of tax
d. Date of collection of tax
Q27. What is the time of supply of vouchers when the Ans:-
supply with respect to the voucher is
identifiable? Sec 13(6) - Enhancement in value on account of intrest / late fees ect.
a. Date of issue of voucher Q32. What is the time of supply in case of addition in
b. Date of redemption of voucher the value of way of interest, late fee or penalty or
c. Earlier of (a) & (b) any delayed payment of consideration?
d. (a) & (b) whichever is later a. Last date on which such late fees / penalty has
Ans:- been charged
b. Date of payment of such additional amount
Q.28. What is the time of supply of vouchers c. Date of collection of whole amount
when the supply with respect to the voucher d. It doesn’t constitute supply
is not identifiable? Ans:-
a. Date of issue of voucher
b. Date of redemption of voucher Q33. Mr. A entered into a contract with Mr. C & agreed
c. Earlier of (a) & (b) to make the payment by 30th September 2018. if
d. (a) & (b) whichever is later the payment is not made in time, then he shall
Ans:- pay late fees @ Rs. 100/day. No payment of late
fees has been made so far. What shall be the
time of supply in respect of the late fees due on
Q29. Ms. A purchased a gift voucher (it can be
Mr. A?
redeemed against any product of the
a. September 2018
departmental store) from a super market worth
b. October 2018
Rs. 2,000 on 30.7.2018 and gifted it to her friend
c. Time of supply has not arisen
on the occasion of her marriage on 05.08.2018.
d. None of the above
her friend encashed the same on 01.09.2018 for
Ans:-
purchase of a watch. Determine the time of
supply.
a. 30.07.2018
b. 05.08.2018
c. 01.09.2018
d. None of the above
Ans:-
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 JP GARG SIR
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❑ CA IPCC
❑ Post Graduate in Commerce (ABST) from Rajasthan University,
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 JP GARG SIR
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❑ CA IPCC
❑ Post Graduate in Commerce (ABST) from Rajasthan University,
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 JP GARG SIR
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❑ CA IPCC
❑ Post Graduate in Commerce (ABST) from Rajasthan University,
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 JP GARG SIR
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❑ CA IPCC
❑ Post Graduate in Commerce (ABST) from Rajasthan University,
Jaipur
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 JP GARG SIR
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❑ CA IPCC
❑ Post Graduate in Commerce (ABST) from Rajasthan University,
Jaipur
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 JP GARG SIR
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❑ CA IPCC
❑ Post Graduate in Commerce (ABST) from Rajasthan University,
Jaipur
❑ Having experience of more than 8 yrs for providing classes Online
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 JP GARG SIR
❑ Pursuing PhD in commerce
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❑ Cleared 2 times UGC NET
❑ Got AIR 3rd in JR. Accountant Exam of AVVNL in 2018
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❑ Company secretary
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❑ Cleared 2 times UGC NET
❑ CA IPCC
❑ Post Graduate in Commerce (ABST) from Rajasthan University,
Jaipur
❑ Having experience of more than 8 yrs for providing classes Online
& offline
 JP GARG SIR
❑ Pursuing PhD in commerce
❑ Cleared UGC NET JRF
❑ Cleared 2 times UGC NET
❑ Got AIR 3rd in JR. Accountant Exam of AVVNL in 2018
❑ Cleared H.TET
❑ B.ED
❑ CA IPCC
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❑ Having Experience of more than 8 years for providing classes online &
offline