#GST Made Easy for Freshers# By SN Panigrahi

#GST Made Easy for Freshers# By SN Panigrahi
1 By SN Panigrahi
2 SN Panigrahi is a Versatile Practitioner, Strategist, Energetic Coach, Learning Enabler & Public Speaker. He is an International-Corporate Trainer, Mentor & Author He has diverse experience and expertise in Project Management, Contract Management, Supply Chain Management, Procurement, Strategic Sourcing, Global Sourcing, Logistics, Exports & Imports, Indirect Taxes – GST etc. He had done more than 150 Workshops on above Published more than 500 Articles; 60 YouTubes & more than 70 SlideShares He is an Engineer + MBA +PGD ISO 9000 / TQM with around 29 Yrs of Experience He is a certified PMP® from PMI (USA) and become PMI India Champion Also a Certified Lean Six Sigma Green Belt from Exemplar Global Trained in COD for 31/2 Yrs. on Strategy & Leadership GST Certified – MSME – Tech. Dev. Centre (Govt of India) ZED Consultant – Certified by QCI – MSME (Govt of India) Member Board of Studies, IIMM Co-Chairman, Indirect Tax Committee, FTAPCCI Empanelled Faculty in NI MSME He has shared his domain expertise in various forums as a speaker & presented a number of papers in various national and international public forums and received a number of awards for his writings and contribution to business thoughts. SN Panigrahi 9652571117 snpanigrahi1963@gmail.com Hyderabad
• Earlier System Drawbacks & Expected Benefits of GST Why GST • Understanding the Basic Concepts – GST Act & Rules What is GST • Understanding Various Transactional Provisions How GST Works • Tax Payment, ITC Utilization, Returns Filling GST – Tax Collection, Returns Filling SNPanigrahi
Avoid Double Taxation Removal of Multiple Taxes / Cascading Effect – Seamless Flow of ITC Nation-Wide Level Plying Field – Unifying Taxes Across India Ease of Doing Business : Simplified & Unified Tax System; Reduce Interface with Different Departments– Less Legal Litigations Total Digitalization Transparency in Tax System; Compliance Easier with Lesser Litigations Simplified Tax Collection System & Expand Tax Base; Increase Tax-GDP Ratio One Nation, One Tax, One Market: Free Flow of Supply Enhance India’s Trade Competitiveness Improved Efficiency & Productivity in Supply Chain Resulting in Business Growth. Also Shift of Business from Un-organized to Organized More Efficient Neutralization of Taxes Especially for Exports – Improve Export Competiveness Bring about a Macroeconomic Dividend – Encourage Investments / FDI – Boost Economy - GDP Growth SNPanigrahi
SN Panigrahi 5 2000: Prime Minister Atal Bihari Vajpyee introduces the concept, sets up a committee headed by the then West Bengal Finance Minister Asim Dasgupta to design a GST model.  2003: The Vajpayee government forms a task force under Vijay Kelkar to recommend tax reforms.  2004: Vijay Kelkar, then advisor to the Finance Ministry, recommends GST to replace the existing tax regime. The Task Force strongly recommended fully integrated ‘GST’ on national basis.  Subsequently, the then Union Finance Minister, Shri P. Chidambaram, while presenting the Central Budget (2007-2008), announced that GST would be introduced from April 1, 2010. Since then, GST missed several deadlines and continued to be shrouded by the clouds of uncertainty.  The talks of ushering in GST, however, gained momentum in the year 2014 when the NDA Government tabled the Constitution (122nd Amendment) Bill, 2014 on GST in the Parliament on 19th December, 2014.  The Lok Sabha passed the Bill on 6th May, 2015 and Rajya Sabha on 3rd August, 2016. Subsequent to ratification of the Bill by more than 50% of the States, Constitution (122nd Amendment) Bill, 2014 received the assent of the President on 8th September, 2016 and became Constitution (101st Amendment) Act, 2016, which paved the way for introduction of GST in India.
Announcement of GST for the first time was made by the then Union Finance Minister, during budget of 2006-07 that it would introduced from 1 April 2010 28 th February 2006 First Discussion Paper was released by the Empowered Committee 10th November 2009 Constitution (115thAmendment) Bill introduced and subsequently lapsed 22nd March, 2011 The C o n s t i t u t i o n ( 1 2 2 nd Amendment) Bill was introduced in the Lok Sabha 19th December, 2014 3rd August, 2016 The Constitution (One Hundred and First Amendment) Act was enacted 4th March 2017 GST Council Recommends the CGST, SGST, IGST, UTGST and Compensation CessAct April 2017 CGST, IGST, UTGST and Compensation Cess Acts passedAll S t a t e s except J&K passed their SGSTACT May 2017 GST Launched 1st July 2017 1st GST Council Meeting 22—23 Sep 2016 30th June 2017 GST Council recommends all the rules SGST Act passed by J&K; CGST and IGST Ordinances promulgated to extend GST to J&K 8th July 2017 True Economic Integration of India Journey Continues… • Notifying and amending rules • Dealing with IT related issues • Revision of Rates • Clarification and communication with taxpayers 3 29th August, 2018 Amendments to CGST, IGST, UTGST and Compensation to State Acts enacted R a j y a S a b h a p a s s e s t h e C o n s t i t u t i o n A m e n d m e n t B i l l 8th September, 2016
SN Panigrahi 7 1. Amendments in the Constitution 2. Legislative Framework for GST 3. Goods & Service Tax Council (GSTC) 4. Goods & Service Tax Network (GSTN)
8 Constitution (101st Amendment) Act, 2016 was enacted on 8th September, 2016. Significant amendments made by Constitution (101st Amendment) Act, 2016 are as follows:- 1.) In Article 366 of the Constitution, New clause (12A) has been inserted to provide the definition of GST. Article – 366(12A):- “Goods and Services Tax” means any tax on Supply of Goods or Services or both except taxes on the supply of the alcoholic liquor for human consumption. 2.)The tax shall be levied as dual GST separately by the Union and States. For this, Article- 246A has been inserted.
4 “Goods and services tax” means any tax on supply of goods, or services or both except taxes on the supply of the alcoholic liquor for human consumption Definition of GST Sl No Definition Article Definition 1. Goods 366(12) Includes all materials, commodities, and articles [Pre Existing Definition] 2. Service 366 (26A) Anything other than goods [Introduced vide 101st Constitutional Amendment Act] 3. State 366(26B) With reference to articles 246A, 268, 269,269A and Article 279A includes a Union territory with Legislature. [Introduced vide 101st Constitutional Amendment Act] “Goods and Services tax” law while having unique principles, has significant elements of prior Central and State laws; and is also inspired by VAT/GST legislation of EU, Australia, Malaysia etc. along with International VAT/GST guidelines of OECD Constitution (101st Amendment) Act, 2016 was enacted Article 366(12A) has been inserted to provide the definition of GST
10 Article 265 Article 246 To be read with Schedule 7 ie Three Lists List -1 : Union List List – 2 : State List List 3 : Concurrent List Article 246A Inserted by Constitutional (One Hundred and First) Amendment Act 2016 No Tax shall be Levied or Collected Except by Authority of Law
11 Insertion of 3 new Articles Article 246A: Concurrent jurisdiction for levy & collection of GST by the Centre & the States Article 269A: Levy and collection of Goods and Service tax in the course or interstate trade and commerce Article 279A: Goods and Service Tax Council Features of GST Constitution Amendment Act  Concurrent jurisdiction for levy & collection of GST by the Centre (CGST) and the States (SGST)  Centre to levy and collect IGST on supplies in the course of inter-State trade or commerce including imports  Compensation for loss of revenue to States for five years – Clause 19  GST on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas & aviation turbine fuel to be levied from a later date on recommendations of Council
12 Article 246A Supersedes Article 246 Concurrent jurisdiction for levy & collection of GST by the Centre & the States Dual GST Framework : Center Collects CGST & State Collects SGST Article 269A Centre to levy and collect IGST on supplies in the course of Inter-State Trade or commerce including imports IGST Collected to be Distributed between Center & State / UT Center will Determine Place of Supply & Time of Supply Exports & Imports are Treated as Deemed Inter-State Supply Article 279A GST Council Constituted by President of India Union Finance Minister Chairs the Council Council Members: 1/3 from Center & 2/3 from States All the State FMs are Members
13 •As per Article–279A (5), GST Council shall recommend the date on which GST shall be levied on following Goods which are as follows:- √ Petroleum Crude, √ High Speed Diesel, √ Motor Spirit (Commonly known as Petrol), √ Natural Gas, √ Aviation Turbine Oil. •Taxes on entertainments and amusements to the extent levied and collected by a panchayat or a municipality or a regional council or district Council shall not be subsumed (included) under GST.
Alcohol for human consumption Entertainment tax levied by local bodies 8 Five petroleum products – crude oil , diesel, petrol, natural gas and ATF Tobacco and Tobacco products Power to tax remains with the State GST Council to decide the date from which GST will be applicable Part of GST but power to levy additional excise duty with Central Government Power to tax remains with local bodies
SN Panigrahi 15 Commencement of GST Council According to Article 279A of the Constitution, the GST Council has to be constituted by the President within 60 days of the commencement of Article 279A. The notification for bringing into force Article 279A with effect from 12th September, 2016 was issued on 10th September, 2016. Members of GST Council The GST Council is a joint forum of the Centre and the States, and consists of the following members: 1. Chairperson- Union Finance Minister 2. Vice chairperson- to be chosen from amongst the members of Ministers of State government 3. Members- (a) The Union Minister of State, in-charge of Revenue/Finance (b) The Minister In-charge of finance or taxation or any other Minister nominated by each State Government
SN Panigrahi 16 Quorum for GST Council Meetings  • The quorum of GST council is 50% of total members  • Decision is taken by 3/4th majority (75%), wherein- (a) the Central Government would have the weightage of 1/3rd of the total vote cast, and (b) the State Governments would have a weightage of 2/3rd of the total votes cast. Functions of the GST Council GST Council is basically entrusted with task to make recommendations on the different aspects of GST to the Union as well as states. GST Council under the Constitution is required to make recommendations on the following: (a) the taxes, cesses and surcharges which may be subsumed in the goods and services tax; (b) the goods and services that may be subjected to, or exempted from the goods and services tax; (c) model GST Laws, principles of levy, apportionment of IGST and the principles that govern the place of supply; (d) the threshold limit of turnover below which goods and services may be exempted from goods and services tax; (e) GST rates including floor rates; (f) any special rates for a specified period, to raise additional resources during any natural calamity or disaster; (g) special provision with respect to the States of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand; and (h) any other matter relating to the GST, as the Council may decide. The GST Council shall also recommend the date on which GST will be levied on petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel.
17 CGST Act SGST Act IGST Act UTGST Act State Compensation Act
How Many Acts? Central Government CGST 1 Apply to Whole of India For Intra-State Transactions IGST 1 Apply to Whole of India For Inter-State Transactions UTGST 1 Applies to Union Territories Compensation CESS 1 Apply to Whole of India State Government SGST 29+2=31 Applies to Respective States For Intra-State Transactions Total 35 Acts
19 Chapter I Preliminary (Sections 1 – 2) Chapter II Administration (Sections 3-6) Chapter III Levy & Collection of Tax (Sections 7-11) Chapter IV Time & Value Of Supply (Sections 12-15) Chapter V Input Tax Credit (Sections 16-21) Chapter VI Registration (Sections 22-30) Chapter VII Tax Invoice, Credit & Debit Notes (Sections 31-34) Chapter VIII Accounts And Records (Sections 31-34) Chapter IX Returns (Sections 37-48) Chapter X Payment of Tax (Sections 49-53) Chapter XI Refunds (Sections 54-58) Chapter XII Assessment (Sections 59-64) Chapter XIII Audit (Sections 65-66) Chapter XIV Inspection, Search, Seizure And Arrest (Sections 67-72) Chapter XV Demands And Recovery (Sections 73-84) Chapter XVI Liability To Pay In Certain Cases (Sections 85-94) Chapter XVII Advance Ruling (Sections 95-106) Chapter XVIII Appeals And Revision (Sections 107-121) Chapter XIX Offences And Penalties (Sections 122-138) Chapter XX Transitional Provisions (Sections 139-142) Chapter XXI Miscellaneous (Sections 143-174)
20 Short Title & Definition (1 and 2) Composition Scheme (3 to 7) Registration (8 to 26) Valuation (27 to 35) ITC (36 to 45) Tax invoice, Debit and credit Notes (46 to 55A) Accounts and Records (56 to 58) Returns (59 to 84) Payment of Tax (85 to 88) Refund (89 to 97A) Assessment and Audit (98 to 102) Advance Ruling (103 to 107) Appeals and Revision (108 to 116) Transitional Provisions (117 to 121) Anti-Profiteering (122 to 137) E-way Bills (138) Inspection, Search and Seizure (139 to 141) Demand and Recovery (142 to 161) Offenses and Penalties (162)
SN Panigrahi 21 Section 8 (GSTN : a Non-Profit, Non-Government, Private Limited Company) Supporting to Supporting through Supporting in  Government  Taxpayers  Other Stakeholders  IT Infrastructure  Systems  Services  Implementation  Administration of GST The common GST Portal www.gst.gov.in has been developed by GSTN as the front-end of the overall GST IT eco-system.
SN Panigrahi 22 1. Functions Relating to Tax Payers 2. Functions relating to Government 3. Functions relating to Tax Officials
23 GSTN Eco-system A common GST system will provide linkage to all State/UT Commercial Tax departments, Central Tax authorities, Taxpayers, Banks and 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. The diagram given below depicts the whole GST eco-system.
Multiple Taxes to Single Unified Tax System GST is a Multipoint Levy Tax & is a Value Added Tax GST is a Destination based Tax GST is a Dual Levy Tax - Concurrently Levied by both Center & State Seamless Input Tax Credit – Payment Mechanism Value of Supply Transaction Value Place of Supply To Determine Nature of Supply Time of Supply Point of Taxation Taxable Person – Registration Under GST Supply is the basis for Levy & Collection of GST GST
CGST / IGST SGST Earlier 17 Taxes & and 23 Cesses Subsumed
26 GST exclusions …  Petroleum products i.e. Crude Oil, Natural Gas, Aviation Turbine Fuel (ATF), Diesel and Petrol Effective date for Petroleum Products will be notified later – Sec 9(2) of CGST Act  Taxes on Tobacco and Tobacco products imposed by the center shall continue to be levied over and above GST  In case of alcoholic liquor for human consumption, states would continue to levy the taxes Earlier being levied, ie state excise duty and sales tax / VAT  Basic Customs Duty (BCD) on Imports & Export Duty  Toll Taxes  Environment Taxes  Stamp Duty  Property Tax  Tax on Electricity SNPanigrahi "However, the exclusion of petroleum products and electricity are particularly problematic. Diesel accounted for 12 per cent of total indirect tax collections. On an average, indirect taxes paid on diesel account for 30 per cent of logistics cost, for which no credit will be available to the consumer. The resulting cascading is significant in case of basic food items and most dry bulk commodities."
27 ‘Destination Principle’ states that the supply of goods and services would be taxed at the point of consumption. This means that GST replaces source based tax system with destination based tax regime. Destination Principle ‘Value Added Principle’ on the other hand underlines that the tax shall be collected on value-added to goods or services at each stage of the supply chain. Right from the original producer or service provider to the ultimate consumer, GST will be collected on value added at every stage of the supply chain. Value Added Principle According to Multipoint Taxation Principle, Tax shall be Levied at every stage of the Supply Multipoint Taxation Principle Seamless Credit is allowed as long as the Value Chain Continues with Furtherance of Business, subject to Blocked Credits Seamless Credit Event for Taxation is Supply Event for Taxation
SN Panigrahi 28 Supplier Recipient Customer Basic Supply Value = Rs 100 GST @ 5 = Rs 5 Total Invoice Value = Rs 105 Supplier Pays to the Govt. GST Collected from Recipient Govt. GST Rs 5 Paid to Govt Inward Inv Value = Rs 105 Less ITC = Rs 5 Total Cost Value = Rs 100 Value Addition = Rs 50 Basic Supply Value=Rs 150 GST @ 5 =Rs 7.5 Total Inv Value =Rs 157.5 GST Paid is Taken as Credit Govt. GST Rs 7.5 Paid to Govt GST Payable to Govt. = Rs 7.5 Less Credit Taken = Rs 5 Net Tax Payable = Rs 2.5
29 S1 Cotton Yarn S2 Fabric S3 Garments FC CustomerBasic Supply Value = Rs 100 GST @ 5 = Rs 5 Total Invoice Value = Rs 105 Inward Inv Value = Rs 105 Less ITC = Rs 5 Total Cost Value = Rs 100 Value Addition = Rs 50 Basic Supply Value=Rs 150 GST @ 5 =Rs 7.5 Total Inv Value =Rs 157.5 Inward Inv Value = Rs 157.5 Less ITC = Rs 7.5 Total Cost Value = Rs 150 Value Addition = Rs 60 Basic Supply Value=Rs 210 GST @ 5 =Rs 10.5 Total Inv Value =Rs 220.5 Inv Value= Rs 220.5 Less ITC = Rs 0 Total Cost Value = Rs 220.5 Tax Paid = Rs 7.5 Less ITC = Rs 5 Net Tax Paid = Rs 2.5 Value Addition = Rs 50 GST on VA @5% = Rs 2.5 Net Tax Paid is Tax Paid on Value Addition. Therefore called Value Added Tax Net Tax Paid = Rs 5 + Net Tax Paid = Rs 2.5 + Net Tax Paid = Rs 3 = Total Tax = 10.5 Tax Paid = Rs 10.5 Less ITC = Rs 7.5 Net Tax Paid = Rs 3 Value Addition = Rs 60 GST on VA @5% = Rs 3 Credit of Tax Paid at Every Stage is Available as Setoff for Payment of Tax at Subsequent Stage C1 C2 SN Panigrahi 1. GST is a Mutli-Point Taxation 2. GST is a Value Added TAX 3. Seamless Credit is allowed as long as the Value Chain Continues with Furtherance of Business; 4. No Credit is allowed in case No Furtherance of Business or Exempted Supply
Indirect taxes can be either origin based or destination based. Origin based tax (also known as production tax) is levied where goods or services are produced. Destination based tax (consumption tax) are levied where goods and services are consumed. GST is a Destination-based or Consumption-based Tax. Hence, the place of consumption will decide the State that will collect tax. The parody behind destination- based taxation is, the producing/selling state gets nothing while the consuming states receive complete share of revenue. SNPanigrahi Tax will go to Maharashtra Maharashtra 30
Dual Levy Central Levy Union Territory Levy CGST UT GST State Levy SGST or IGST will be leviable on inter-state transactions 31 I GST Central Levy
32 Location of Supplier INTRA-STATE SUPPLY Place of Supply CGST SGSTTax Payable Warangal Telangan Hyderabad Telangana INTRA-STATE SUPPLY Customer Selling Price 1000 CGST @ 9% 90 SGST @ 9% 90 Total Sale Price 1180 Total tax paid by Supplier 180 SN Panigrahi
33 Location of Supplier INTER-STATE SUPPLY Place of Supply Tax Payable Bengaluru In Karnataka Hyderabad In Telangana INTER-STATE SUPPLY IGST Selling Price 1,000 IGST @ 18% 180 Total Sale Price 1,180 Total tax paid by Supplier 180 Customer SN Panigrahi
SN Panigrahi 34
SN Panigrahi 35
36 ‘Supply’ is a fundamental concept and all the provisions of GST revolves around it. Under Supply, there are three key elements namely time of supply, place of supply and value of supply. Customs Duty Type of Tax Tax Law / Act Taxable Event Tax Collection Authority Central Excise Duty Central Sales Tax (CST) Service Tax VAT GST Customs Act, 1962 Central Excise Act 1944 Central Sales Tax Act 1956 Finance Act 1994 State VAT Acts (2005) CGST / SGST / UTGST / Com. Cess Act 2017 Import / Export Manufacture / Production Inter-Sate Sales Taxable Service Sales within State Supply Central Govt. Central Govt. State Govt. Central Govt. State Govt. Central Govt. & State Govt.
Supply Goods Services Both or or Sec 2(52) of CGST Act : “goods” means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply Sec 2(102) of CGST Act : “services” means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged; Explanation.––For the removal of doubts, it is hereby clarified that the expression “services” includes facilitating or arranging transactions in securities;
SN Panigrahi 38 Separate Provisions have been Specified Goods Sec 2(52) of CGST Act Services Sec 2(102) of CGST Act Sec 12 of CGST Act Sec 13 of CGST Act Time of Supply Place of Supply GST Rate Sec 10 & 11 of IGST Act Sec 12, 13 & 14 of IGST Act Section 12 and Section 13 thereof provides for ascertaining time of supply of goods and time of supply of services respectively; similarly, separate provisions have been specified for ascertaining place of supply of goods and place of supply of services. Further, the rate of tax applicable to supply of goods and supply of services are different. Accordingly, it is important to distinguish whether a particular transaction involves supply of goods or supply of services.
SNPanigrahi 39 Supply All form of Supplies for a consideration Section 7(1)(a) Even Some Specific Supplies Without Consideration Section 7(1)(c) – Schedule : I Clarifying Certain Activities Whether Goods or Services Section 7(1)(d) – Schedule : II Treated Neither as a Supply of Goods Nor a Supply of Services – Section 7(2) Schedule : III Sec 7 of CGST Act In the Course or Furtherance of Business Import of Services for a Consideration whether or not in the course or furtherance of business - Section 7(1)(b)  All forms of supply of goods and/or services  such as sale, transfer, barter, exchange, license, rental, lease or disposal  made or agreed to be made  for a consideration  by a person  in the course or furtherance of business, Involves Goods or Services or Both Supply includes
40 Made by a Taxable Person Is in the Taxable Territory Is for a consideration Is in the course or furtherance of business. Supply Goods Services Both or orInvolves Taxable Supply Sec 7 of CGST Act Without Consideration in Some Cases
41 Supply Includes Sale Transfer Barter Exchange Rent License DisposalSN Panigrahi
4 2 What is Supply in GST Supply may include these 8 forms as per Sec 7 : Supply Sale Property in goods is transferred or agreed to be transferred by seller to buyer. Transfer It refers to alienation or conveyance or passing on of the property of a thing form one person to another Barter Swapping of goods or services without using a medium of exchange such as money Exchange Negotiation by which one person transfers to another person funds and this transfer could be either at a price agreed upon, or which could be fixed by commercial usage License Permission granted by competent authority to exercise certain privilege which, without such authorisation, would have constituted as an illegal act. Lease A contractual agreement by which one party conveys an estate in property to another party, for a limited period, subject to various conditions, in exchange for something of value, but still retains ownership. Rent Sum or amount agreed in the lease or tenancy agreement to be paid by the tenant to the landlord for exclusive possession of the property leased for the period of the lease Disposal In relation to property it refers to the act of transferring or relinquishing of that property to another’s care or possession usually by deed or will. Supply is the “taxable event under GST” like manufacture of goods under Excise, rendering of services under Service Tax and sale of goods under VAT.
43 1 • The Activity Involves the Supply of Goods or Services, or Both 2 • Supply is for Consideration unless otherwise expressly provided for 3 • Supply Even without Consideration – Schedule -1 4 • Supply is Made in the Course or Furtherance of Business 5 • Supply is Made in a Taxable Territory (as per section 2(109) 6 • Supply is a Taxable Supply 7 • Made by A Taxable Person (as per section 2 (107)Makes the Supply To constitute a supply, the following elements must be satisfied: SNPanigrahi
SN Panigrahi 44 It makes the Supply for Consideration The supply is made in the course or furtherance Business of an enterprise that it carries on The Supply is Made in the Taxable Territory The entity is Either Registered or Required to be Registered for GST, and The Supply is not “non-taxable supply” Sec 2(108) of CGST Act “taxable supply” means a supply of goods or services or both which is leviable to tax under this Act; An entity makes a taxable supply if:
SN Panigrahi 45 Consideration Includes Sec 2(31) of CGST Act Payment Made or To be Made In Money or otherwise In Respect of, In Response to, or for the Inducement of whether by the Recipient or by Any Other Person shall not include any subsidy given by the Central Government or a State Government Monetary Value of any Act or Forbearance Sec 2(31)(a) Sec 2(31)(b)
SN Panigrahi 46 TYPES OF CONSIDERATION Monetary consideration Non- monetary consideration  Cash,  Cheque or Credit Card,  Bank Transfer and  Deduction From Bank Account Compensation in Kind  Supply of Goods and Services in Exchange Any Act or Forbearance  Refraining or Forbearing to Do an Act  Tolerating an Act or a Situation  Doing or Agreeing to Do an Act
4 7 Supply Without Consideration : Schedule - 1 SupplywithoutConsideration 1 Permanent Transfer of Assets Permanent transfer / disposal of business assets where input tax credit has been availed on such assets. 2 Supply between related persons Supply of goods or services or both between related persons or between distinct persons as specified in section 25, when made in the course or furtherance of business: Provided that gifts not exceeding Rs 50,000 in value in a financial year by an employer to an employee shall not be treated as supply of goods or services or both. 3 Supply between Principal & Agent Supply of goods— (a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or (b) by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal. 4 Import of Services – Related Persons Import of services by a taxable person from a related person or from any of his other establishments outside India, in the course or furtherance of business. Activities To Be Treated As Supply Even If Made Without Consideration
48 Transaction Goods Service 1. Transfer Any transfer of the title in goods is a supply of goods Any transfer of right in goods or of undivided share in goods without the transfer of title thereof, is a supply of services Any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed, is a supply of goods. 2. Land and Building Any lease, tenancy, easement, licence to occupy land is a supply of services; Any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services 3. Treatment or process (Job Work) Treatment or process : Any treatment or process which is applied to another person's goods is a supply of services. Deciding whether Goods or Service : Schedule – 1I Activities To Be Treated As Supply Of Goods Or Supply Of Services
49 Transaction Goods Service 4. Transfer of Business Assets Transfer or disposal of Goods, whether or not for a consideration – Treated as Supply of Goods Goods held or used for the purposes of the business are put to any private use - other than a purpose of the business, whether or not for a consideration - is a supply of services Where any person ceases to be a taxable person, any goods forming part of the assets of any business carried on by him shall be deemed to be supplied by him in the course or furtherance of his business immediately before he ceases to be a taxable person, Deciding whether Goods or Service : Schedule – 1I Activities To Be Treated As Supply Of Goods Or Supply Of Services
50 Transaction Goods Service 6. Composite supply (a) works contract as defined in clause (119) of section 2; and (b) supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (other than alcoholic liquor for human consumption), where such supply or service is for cash, deferred payment or other valuable consideration. 7. Supply of Goods Supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration Deciding whether Goods or Service : Schedule – 1I Activities To Be Treated As Supply Of Goods Or Supply Of Services
51 Neither Goods Nor Service : SCHEDULE III [Section 7] Activities Or Transactions Which Shall Be Treated Neither as a Supply Of Goods Nor a Supply of Services 1. Services by an employee to the employer in the course of or in relation to his employment. 2. Services by any court or Tribunal established under any law for the time being in force. 3. (a) the functions performed by the Members of Parliament, Members of State Legislature, Members of Panchayats, Members of Municipalities and Members of other local authorities; (b) the duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity; or (c) the duties performed by any person as a Chairperson or a Member or a Director in a body established by the Central Government or a State Government or local authority and who is not deemed as an employee before the commencement of this clause. 4. Services of funeral, burial, crematorium or mortuary including transportation of the deceased. 5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building. 6. Actionable claims, other than lottery, betting and gambling. Explanation.—For the purposes of paragraph 2, the term "court" includes District Court, High Court and Supreme Court.
52 One of the significant changes proposed by the GST Council in its recently concluded 28th meeting on July 21, 2018 is inclusion of following transactions in Schedule III to the CGST Act, 2017 (i.e. activities or transactions which shall be treated neither as a supply of goods nor a supply of services): •Merchant trading. supply of goods from a place in the non-taxable territory to another place in the non-taxable territory without such goods entering into the taxable territory. •High seas sales. sale carried out by the actual consignee shown in the Bill of Lading to another buyer while the goods are yet on high seas or after their dispatch from the port of loading and before entering the customs frontier of India. •In-bond Sale. Sale of imported goods from customs bonded warehouses Further, it has been proposed that these transactions shall not be regarded as exempt supply for reversal of input tax credit. Indeed, the proposal of keeping the said transactions out of the scope of exempt supply turns out to be a very beneficial and trade friendly measure for the taxpayer as it will help the taxpayer to avail input tax credit, which otherwise would have been blocked had it not been kept out of the scope of exempt supply. Inclusion of Additional Transactions in Schedule III Notification No. 03/2019 – Central Tax 29/01/2019
SN Panigrahi 53 An explanation has been inserted to provide that the ‘value of exempt supply’ shall not include the value of activities or transactions specified in Schedule III (other than the sale of land and building). Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019
54 Types of Supply Types of Supply Taxable Supply Exempted Supply Zero Rated Supply Composite / Mixed Supply Continuous Supply Inward / Outward Supply Inter / Intra State Supply Deemed Supply
SN Panigrahi 55 Sec 2(108) of CGST Act “taxable supply” means a supply of goods or services or both which is leviable to tax under this Act; An entity makes a taxable supply if:  it makes the supply for consideration  the supply is made in the course or furtherance of an enterprise that it carries on  the supply is made in the Taxable Territory  the entity is either registered or required to be registered for GST, and  the supply is not “non-taxable supply”
SN Panigrahi 56 Sec 2(78) of CGST Act : “non-taxable supply” means a supply of goods or services or both which is not leviable to tax under this Act or under the Integrated Goods and Services Tax Act; A transaction must be a 'supply' as defined under the GST law (Section 7 of the CGST Act) to qualify as a non-taxable supply under the GST. If an activity or transaction falls outside the scope of supply then it cannot be said as a non taxable supply. The activities and transactions specified in Schedule III are not supply. As it is not supply so it cannot be said as non taxable supply but can be said as Non-GST Supply Non-taxable Supply Non-GST Supply Sec 2(78) of CGST Act No where Defined in GST Act There Should be a Supply as per Sec 7 of CGST Act It is Not a Supply as per Schedule III Alcoholic Liquor for Human Consumption, Petroleum Crude, Petrol, Diesel, Natural Gases and Aviation Turbine Fuel Activities and Transaction Specified in Schedule III
57 Note: Only those supplies that are excluded from the scope of taxation under GST are covered by this definition – i.e., Alcoholic Liquor for Human Consumption, articles listed in section 9(2) or in schedule III. Sec 9(2) The central tax on the supply of  petroleum crude,  high speed diesel,  motor spirit (commonly known as petrol),  natural gas and  aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council. It must also be noted that these items are not out of scope of GST. That means GST Rate has not yet been announced or notified for them .
SN Panigrahi 58 Sec 2(47) of CGST Act : “Exempt Supply” means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under Section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply; Wholly Exempt From Tax Nil Rate of Supply Non-Taxable Supply Exempt Supply Exempted through a Notification Tariff @ Nil Rate Supply But Not Taxable
59 Nil Rate of Supply Wholly Exempt From Tax Non-Taxable Supply Nil Rated supply is nowhere defined in GST Law. The Tariff is at NIL rate. The rates of goods are notified under section 9(1) vide Notification No. 01/2017- Central Tax (Rate) which contains six schedules specifying tax rates at 2.5%, 6%, 9%, 14%, 1.5% and 0.125%. There is no schedule levying tax at 0% i.e. NIL rated. In case of services, there is only one service which is notified as Nil rated in Notification No. 11/2017- Central Tax (Rate) at S.No. 24 i.e Support services to agriculture, forestry, fishing and animal husbandry. Notification No. 02/2017- Central Tax (Rate) for Goods and Notification No. 12/2017- Central Tax (Rate) for Services have been issued by using power given under Section 11 of CGST ACT. So goods and services mentioned in these two notifications (amended from time to time) are exempted goods as per definition of exempt supply. Sec (78) of CGST Act : “non-taxable supply” means a supply of goods or services or both which is not leviable to tax under this Act or under the Integrated Goods and Services Tax Act; Alcoholic liquor for human consumption, petroleum crude, high speed diesel, motor spirit, natural gases and aviation turbine fuel are non taxable supply. Activities and Transactions specified in Schedule III are not supply. As it is not supply so it cannot be said as non taxable supply but can be said as Non-GST Supply
SN Panigrahi 60 Sec 2(23) of IGST Act “zero-rated supply” shall have the meaning assigned to it in section 16; Sec 16. (1) of IGST Act “zero rated supply” means any of the following supplies of goods or services or both, namely:–– (a) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. Zero Rated Supply Supply of Goods or Services To SEZ / SEZ Dev. Export of Goods or Services
61 Important Notifications Issued for Exemption from Payment of GST: Notification No. Particulars For Goods 02/2017 Central Tax (Rate) dated 28.06.2017 Exempted supplies of around 149 items of goods in terms of Section 11(1) of the CGST Act, 2017. Ex. Electricity, Salt, fresh fruits, plastic bangles, passenger baggage etc. Amended vide Notification No.28/2017, 35/2017,42/2017, 7/2018, 19/2018 – Central Tax (Rate) For Services 12/2017 Central Tax (Rate) dated 28.06.2017 Exemption to supply specified services under the CGST Act. More or less, all the exemptions were available earlier under the erstwhile service tax law Amended vide Notification No.21/2017, 25/2017, 32/2017 and 47/2017, 2/2018 – Central Tax (Rate)
SN Panigrahi 62 Types of Exemptions: Absolute exemption: Exemption without any conditions. Ex: Transmission or distribution of electricity by an electricity transmission or distribution utility, Services by Reserve Bank of India. Conditional Exemption: Exemption subject to certain conditions. Ex: Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging purposes, having declared tariff of a unit of accommodation less than ` 1000/- per day”. Conditional or Partial Exemption: Intra-State supplies of goods and/or services received from an unregistered person by a registered person is exempted from payment of tax under reverse charge provided the aggregate value of such supplies received by a registered person from all or any of the suppliers does not exceed Rs 5000/- in a day. (Now this Condition is not Applicable – Notification Repealed)
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66 Combination of Supply Mixed Supply (Sec 2(74) of CGST Act) Composite Supply (Section 2(30) of CGST Act) Naturally Bundled ? & Made in Conjunction with One Another Yes No Rate Rate Rate Applicable on Principal Supply (Section 8(a) of CGST Act) Highest Rate Among All (Section 8(b) of CGST Act) SNPanigrahi Naturally Bundled and Supplied in Conjunction with each other Supply does not Constitute a 'Composite Supply'. Multiple Supplies Single Price
67 Classification Goods Services HSN Code SAC Code GST Rates for Goods SCHEDULE I: LIST OF GOODS AT NIL RATE SCHEDULE II: LIST OF GOODS AT 0.25% RATE SCHEDULE III: LIST OF GOODS AT 3% RATE SCHEDULE IV: LIST OF GOODS AT 5% RATE SCHEDULE V: LIST OF GOODS AT 12% RATE SCHEDULE VI: LIST OF GOODS AT 18% RATE SCHEDULE VII: LIST OF GOODS AT 28% RATE Compensation Cess applicable on Luxury & Demerit Items GST Rates for Services LIST OF SERVICES AT NIL RATE LIST OF SERVICES AT 5% RATE LIST OF SERVICES AT 12% RATE LIST OF SERVICES AT 18% RATE LIST OF SERVICES AT 28% RATE Compensation Cess applicable on Luxury & Demerit Items
68 For Goods GSTN portal has issued a comprehensive list of Harmonized System of Nomenclature (HSN) codes for classification of the goods under proposed GST legislation. Notification No. 12/2017 – Central Tax, 28th June, 2017 Notification No. 5/2017 – Integrated Tax, 28th June, 2017 Turnover up to Rs 1.5 crore : No HSN code is required Turnover between Rs 1.5 Crores and Rs 5 Crores : 2-digit Chapter Level Turnover Exceeding Rs 5 crore : HSN code of 4 digits Export and Imports : 8 digits Level – Mandatory For Services For Services, Service Tax Accounting Codes (‘SAC’) shall be used. SNPanigrahi
SN Panigrahi 69 Description HSN No. BASMATI Rice 10063020 BROWN RAJMA 0713.33 00 URAD DAL 0713.31 00 CLOVES 9071010 CASHEW 0801.32.10 JAGGERY BLOCKS 1701.13.10 MULTIGRAIN ATTA 1102.90.90 Soya Bean 1201 10 00 STEAM STERILIZED CHILLY POWDER 0904.22.11
70 Item HSN Code GST Rate Cotton and Cotton waste 5201 to 5203 5% Cotton yarn [other than khadi yarn] 5205 to 5207 5% Woven Fabrics of Cotton 5208 to 5212 5% Activity SAC Code GST Rate Job Work - Textile 998821 5% Management consulting and management services including financial, strategic, human resources, marketing, operations and supply chain management. 998311 18% Manpower Supply - Other employment & labour supply services n.e.c 998519 18%
71 Chapter 1 Live Animals, Bovine & Poultry Chapter 21 Tea & Coffee Extract & Essence Chapter 2 Meat & Edible Offal of Animals Chapter 22 Water – Mineral & Aerated Chapter 3 Fish Meat & Fillets Chapter 23 Flours, Meals & Pellets Chapter 4 Eggs, Honey & Milk Products Chapter 24 Tobacco, Stemmed & Stripped Chapter 5 Non Edible Animal Products Chapter 25 Salts & Sands Chapter 6 Live Trees & Plants Chapter 26 Mineral Ores & Slags Chapter 7 Vegetables Chapter 27 Fossil Fuels – Coal & Petroleum Chapter 8 Fruits & Dry Fruits Chapter 28 Gases & Non Metals Chapter 9 Tea, Coffee & Spices Chapter 29 Hydrocarbons – Cyclic & Acyclic Chapter 10 Edible Grains Chapter 30 Drugs & Pharmaceuticals Chapter 11 Milling Industry Products Chapter 31 Fertilisers Chapter 12 Oil Seeds, Fruit & Part of Plants Chapter 32 Tanning & Colouring Products Chapter 13 Gums, Resins, Vegetable SAP & Extracts Chapter 33 Essential Oils, Beauty Products Chapter 14 Vegetable Material & Products Chapter 34 Soaps, Waxes, Polish products Chapter 15 Fats, Oils & Waxes their Fractions Chapter 35 Casein, Albumin, Gelatin, Enzymes Chapter 16 Preserved/Prepared Food Items Chapter 36 Propellants, Explosives, Fuses, Fireworks Chapter 17 Sugar, Jaggery, Honey & bubble Gums Chapter 37 Photographic & Cinematographic Films Chapter 18 Chocolate & Cocoa Products Chapter 38 Insecticides, Artificial Carbon & Graphite Chapter 19 Pizza, Cake, Bread, Pasta & Waffles Chapter 39 Polymers, Polyethylene, Cellulose Chapter 20 Edible Plants – Fruits, Nuts & Juices Chapter 40 Rubber, Plates, Belt, Condesnsed Milk HSN Chapters Harmonized System means the nomenclature which makes up the Harmonized Commodity escription and Coding System including the chapters and the corresponding number codes, section notes and Chapter notes, as well as the General Rules for their interpretation
72 Chapter 41 Raw hides & Skins, Leather Chapter 61 Men & Women Clothing Chapter 42 Trunks, Suit-cases, Vanity cases Chapter 62 Men & Women Jackets, Coats & Garments Chapter 43 Raw Fur Skins, Articles of apparel Chapter 63 Blankets & Bedsheets Chapter 44 Fuel wood, Wood Charcoal Chapter 64 Shoes & Footwear Products Chapter 45 Natural Cork, Shuttlecock Cork Chapter 65 Hats & Accessories Chapter 46 Plaiting Materials, Basketwork Chapter 66 Umbrellas & Accessories Chapter 47 Mechanical & Chemical woodpulp Chapter 67 Artificial flowers, Wigs & False Beards Chapter 48 Newsprint, Uncoated paper & paperboard Chapter 68 Monumental & Building Stones Chapter 49 Printed Books, Brochures, Newspapers Chapter 69 Bricks, Blocks & Ceramics Chapter 50 Silk Worm Coccon, Yarn, Waste & Woven Fabrics Chapter 70 Glasses, Mirrors, Flasks Chapter 51 Wool materials & Waste, Animal Hairs Chapter 71 Pearls, Diamonds, Gold, Platinum Chapter 52 Cotton materials, Synthetics & Woven fabrics Chapter 72 Iron, Alloys, Scrap & Granules Chapter 53 Flex raw, Vegetable materials & Paper yarn Chapter 73 Iron tube, piles & Sheets Chapter 54 Synthetic felaments, Woven fabrics & Rayons Chapter 74 Copper Mattes, Rods, Bars, Wires. Plates Chapter 55 Synthetic felament tows & Polyster staple fiber Chapter 75 Nickel Mattes & Unwrought Nickel Chapter 56 Towels, Napkins, ropes & Netting materials Chapter 76 Unwrought Aluminium- Rods, Sheets & Profiles Chapter 57 Carpets & Floor coverings textile Handlooms Chapter 77 Reserved for Possible Future Use Chapter 58 Labels, Bades, Woven pile & Chennile, Terry towelings Chapter 78 Unwrought Lead – Rods, Sheets & Profiles Chapter 59 Rubberised textile fabrics, Convayer belts Chapter 79 Unwrought Zinc – Rods, Sheets & Profiles Chapter 60 Pile,Wrap Knit,Tarry & Croched fabrics Chapter 80 Unwrought Tin – Rods, Sheets & Profiles HSN Chapters
73 Chapter 81 Magnesium, Cobalt, Tungsten Articles Chapter 82 Hand Tools & Cutlery Chapter 83 Locks, Metal Mountings & Fittings Chapter 84 Industrial Machinery Chapter 85 Electrical Parts & Electronics Chapter 86 Railway Locomotives & Parts Chapter 87 Tractors & Motor Vehicles Chapter 88 Balloons, Parachutes & Airlift Gear Chapter 89 Cruise Ships & Boats Chapter 90 Medical, Chemical & Astronomy Chapter 91 Watches & Clocks Chapter 92 Musical Instruments Chapter 93 Military Weapons & firearms Chapter 94 Furniture, Bedding & lighting Chapter 95 Children Toys, Table & Board Games & Sports Goods Chapter 96 Pencil Lighter Toiletries Chapter 97 Paintings Decoratives Sculptures Chapter 98 Machinery Lab Chemicals Drugs Medicines HSN Chapters
74 9954 CONSTRUCTION SERVICES 9961 SERVICES IN WHOLE SALE TRADE 9962 SERVICES IN RETAIL TRADE 9963 ACCOMMODATION , FOOD AND BEVERAGE SERVICES 9964 PASSENGER TRANSPORT SERVICES 9965 GOODS TRANSPORT SERVICES 9966 RENTAL SERVICES OF TRANSPORT VEHICLES WITH OR WITHOUT OPERATORS 9967 SUPPORTING SERVICES IN TRANSPORT 9968 POSTALAND COURIER SERVICES 9969 ELECTRICAL , GAS, WATER AND OTHER DISTRIBUTION SERVICES 9971 FINANCIAL AND RELATED SERVICES 9972 REAL ESTATE SERVICES 9973 LEASING OR RENTAL SERVICES WITH OR WITHOUT OPERATOR 9981 RESARCH & DEVELOPMENT SERVICES 9982 LEGALAND ACCOUNTING SERVICES 9983 OTHER PROFESSIONAL , TECHNICALAND BUSINESS SERVICES 9984 TELECOMMUNICATIONS, BROADCASTING AND INFORATION SUPPLY SERVICES 9985 SUPPORT SERVICES 9986 SUPPORT SERVICES TOAGRICULTURAL HUNTING,FORESTRY, FISHING, MINING AND UTILITIES 9987 MAINTENANCE , REPAIR AD INSTALLATION ( EXCEEPT CONSTRUCTION ) SERVICES 9988 MANUFCTURING SERVICES ON PHYSICAL INPUTS (GOODS) OWNED BY OTHERS 9989 OTHER MANNUFACTURING SERVICES, PUBLISHING PRINTING AND REPRODUCTION SERVICES, MATERIAL RECOVERY SERVICES 9991 PUBLIC ADMINISTRATION AND OTHER SERVICES PROVIDED TO THE COMMUNITY ASA WHOLE , COMPULSORY SOCIAL SECURITY SERVICES 9992 EDUCATION SERVICES 9993 HUMAN HEALTH AND SOCIAL CARE SERVICES 9994 SEWGE AND WASTE COLLECTION , TREATMENT AND DISPOSALAND OTHER ENVIRONMENTAL PROTECTION SERVICES 9995 SERVICES OF MEMBERSHIP ORGANISATION SERVICES 9996 RECREATIONAL, CULTRAL AND SPORTING SERVICES 9997 OTHER SERVICES 9998 DOMESTIC SERVICES 9999 SERVICES PROVIDED BY EXTRATERRITORIAL ORGANIZATIONS AND BODIES SERVICE ACCOUNT CODE (S A C) UNDER GST LAW
75 Worldwide GST France was the first country to introduce GST in 1954. Worldwide, Almost 150 countries have introduced GST in one or the other form since then. Most of the countries have a unified GST system. Brazil and Canada follow a dual system vis-à-vis India is now adopted the same. In China, GST applies only to goods and the provision of repairs, replacement and processing services. GST rates of some countries are given below:- Country Rate of GST Country Rate of GST Australia 10% Singapore 7% France 19.6% Denmark 25% China 17% Taiwan 5% UK 17.5% New Zealand 15% Canada 5% Philippines 10% Germany 19% Indonesia 10% Japan 5%
76
77 Supplier Recipient Makes Supply – Tax Invoice Forward Charge – Collects GST Makes / Promises to Make Payment Supply Value + GST Govt. Deposits GST with Govt. Supplier Recipient Makes Supply – No Tax Invoice – Charges No Tax Tax to be Paid by Recipient on Reverse Charge Makes / Promises to Make Payment Supply Value only Govt. Pays GST On Basis Supplier Liable to Pay GST Recipient Liable to Pay GST Forward Charge Mechanism Reverse Charge Mechanism
Sec 2(98) of CGST Act : “reverse charge” means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or subsection (4) of section 5 of the Integrated Goods and Services Tax Act; Sec 9(3) of CGST Act : The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. Sec 9(4) of CGST Act : The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. Amended Section 9(4) effective from 01-02-2019 read as follows: “Section 9(4). The Government may, on the recommendations of the Council, by notification, specify a class of registered persons who shall, in respect of supply of specified categories of goods or services or both received from an unregistered supplier, pay the tax on reverse charge basis as the recipient of such supply of goods or services or both, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to such supply of goods or services or both” Reverse Charge In GST, Reverse Charge is applicable both on Goods & Services. There was No Reverse Charge Mechanisms in Supply of Goods. However, some States were Collecting in the name of Purchase Tax on Certain Goods from Recipient
79 Supply Notified Goods & ServicesSupplier Recipient Registered Issue Self Invoice Issue Payment Voucher Pay GST on RCM Sec 9(3) of CGST Act Supply Supplier Un-Registered Recipient Registered Sec 9(4) of CGST Act Various Changes are made from time to time Continued to be Applicable Issue Self Invoice Issue Payment Voucher Pay GST on RCM
Reverse Charge Mechanism (RCM) Notified Goods & Services Sec 9(3) of CGST Act Or Sec 5(3) of IGST Act Sec 9(4) of CGST Act Or Sec 5(4) of IGST Act Deferred w.e.f. 13-10-2017 till 30.09.2019 Notification No. 38/2017 – Central Tax (Rate); 13th Oct, 2017 & Notification No. 10/2018 – Central Tax (Rate); 23rd March, 2018 Notification No.12/2018 – Central Tax (Rate); 29th June, 2018 Notification No. 22/2018 – Central Tax (Rate); 6th August, 2018 Relaxed w.e.f. 1-07-2017 till 13-10-2017 Notification No. 08/2017 – Central Tax (Rate) dated 28-06-2017 No RCM on Intra-State Supplies Received from Un-Registered Supplier(s) for value not exceeding five thousand rupees in a day. No such exemption was granted under IGST act. Central Goods & Services Tax (Amendment) Act, 2018 (No 31 of 2018) -30th August 2018 Effective from 01-02- 2019 Notification No. 02/2019 – Central Tax dated 29-01-2019 Reverse Charge Supply from Un-registered Person Up to 30-01-2019 w..e.f 1-02-2019 Certain specified Categories of Goods or Services or both by Notified Classes of Registered Persons from Unregistered Suppliers vide Notification No. 01/2019 – Central Tax (Rate) dated 29-01-2019, Central Government rescinds principle Notification No. 08/2017 – Central Tax (Rate) dated 28-06-2017 and consequently exemption provided till 30th September 2019 stands withdrawn.
SN Panigrahi 81 As per section 9(4) of CGST Act 2017, RCM will be applicable to all the registered persons on all type of supplies of goods or services from an unregistered person As per Notification No. 8/2017 CGST(Rate) dated 28.06.17 RCM will be applicable only when the aggregate value of supplies received by a registered person from unregistered person in the Intra- State Transaction Exceeds Rs. 5000 per day. As per Notification No. 38/2017 CGST(Rate) dated 13.10.17 Provisions of RCM u/s 9(4) were suspended Efective from 13th Oct’2017 up to 31.03.18. As per Notification No. 10/2018 CGST(Rate) dated 23.03.18 Provisions of RCM u/s 9(4) were suspended up to 30.06.18. As per Notification No. 12/2018 CGST(Rate) dated 29.06.18 Provisions of RCM u/s 9(4) were suspended up to 30.09.18. As per Notification Notification No. 22/2018 – Central Tax (Rate); 6th August, 2018 Provisions of RCM u/s 9(4) were suspended up to 30.09.19. As per Notification No. 1/2019 CGST(Rate) dated 29.01.19 Provisions of RCM u/s 9(4) will be applicable from 01.02.19 As per Notification No. 2/2019 CGST dated 29.01.19 CGST (Amendment) Act, 2018 will be applicable which has made changes in the provision of section 9(4) As per section 9(4) of CGST(Amendment) Act 2018 RCM will be applicable to the specific class of registered persons on the specific category of supplies of goods or services from an unregistered person. Conclusion: Provisions of RCM u/s 9(4) will be applicable ONLY after the Government will notify  The specific category of registered persons on whom it will be applicable;  The specific category of supply of goods or services on which it intends to make it applicable. Series of Changes in Section 9(4) Notified from Time to Time by Government
82 Reverse Charge : Notified Goods & Services : Sec 9(3) Notified Goods Notification No. 04/2017- Central Tax (Rate) dated 28th June, 2017 Notification No. 36/2017- Central Tax (Rate) dated 13th October, 2017 Notification No. 43/2018- Central Tax (Rate) dated 14th November 2017 Notification No. 11/2018- Central Tax (Rate) dated 28th May, 2018 Notified Services Notification No. 13/2017- Central Tax (Rate) dated 28th June, 2017 Notification No. 33/2017- Central Tax (Rate) dated 13th October, 2017 Notification No. 03/2018- Central Tax (Rate) dated 25th January, 2018 Notification No. 15/2018- Central Tax (Rate) dated 26th July, 2018 Sec 9(3) of CGST Act : Reverse charge may be applicable in case of supply of notified goods or services or both. SN Panigrahi
83 S. No Tariff item, sub-heading, heading or Chapter Description of supply of Goods Supplier of goods Recipient of supply 1 0801 Cashew nuts, not shelled or peeled Agriculturist Any registered person 2 1404 90 10 Bidi wrapper leaves (tendu) Agriculturist Any registered person 3 2401 Tobacco leaves Agriculturist Any registered person 4 5004 to 5006 Silk yarn Any person who manufactures silk yarn from raw silk or silk worm cocoons for supply of silk yarn Any registered person 4A 5201 Raw cotton Agriculturist Any registered person” 5 Supply of lottery. State Government, Union Territory or any local authority Lottery distributor or selling agent. Explanation.- For the purposes of this entry, lottery distributor or selling agent has the same meaning as assigned to it in clause (c) of Rule 2 of the Lotteries (Regulation) Rules, 2010, made under the 2 provisions of sub section 1 of section 11 of the Lotteries (Regulations) Act, 1998 (17 of 1998). 6. Any Chapter Used vehicles, seized and confiscated goods, old and used goods, waste and scrap Central Government, State Government, Union territory or a local authority Any registered person 7 Any Chapter Priority Sector Lending Certificate Any registered person Any registered person Reverse Charge : Notified Goods Notification No.4/2017-Central Tax (Rate), Dt : 28th June, 2017 Amended (by adding Sr No 6) vide Notification No. 36/2017-Central Tax (Rate), 13th October, 2017 Amendment (by adding Sr 4A) vide Notification No : Notification No. 43/2017-Central Tax (Rate), 14th November, 2017 Amended vide Notification No. 11/2018-Central Tax (Rate) dated 28th May, 2018
RCM for Services  Goods Transport Agency (GTA)  Services supplied by an individual advocate including a senior advocate by way of Representational services  Services supplied by an Arbitral Tribunal to a business entity  Services provided by way of Sponsorship to any body corporate or partnership firm.  Government or Local authority  Services supplied by the Central Government, State Government, Union territory or local authority by way of renting of immovable property to a person registered under the Central Goods and Services Tax Act, 2017 (12 of 2017)  Services supplied by a Director of a Company or a body corporate to the said company or the body corporate Reverse Charge : Notified Services Notification No. 13/2017- Central Tax (Rates) DT:28.06.2017 As Amended vide Notification no 03/2018 Central tax (Rate) dated 25th January 2018 & 15/2018- Central Tax (Rate) ,dt. 26-07-2018; Notification No. 29/2018- Central Tax (Rate) Dated 31.12.2018.
RCM for Services  An insurance agent  Services supplied by a Recovery Agent to a banking company or a financial institution or a non- banking financial company.  Supply of services by Author or music composer, photographer, artist, etc  Taxi driver or Rent a cab operator  Supply of services by the members of Overseeing Committee to Reserve Bank of India  Services supplied by individual Direct Selling Agents (DSAs) other than a body corporate, partnership or limited liability partnership firm to bank or non-banking financial company (NBFCs).  Services provided by business facilitator (BF) to a banking company  Services provided by an agent of business correspondent (BC) to business correspondent (BC).  Security services (services provided by way of supply of security personnel) by Any person other than a body corporate to a registered person, located in the taxable territory Reverse Charge : Notified Services Notification No. 13/2017- Central Tax (Rates) DT:28.06.2017 As Amended vide Notification no 03/2018 Central tax (Rate) dated 25th January 2018 & 15/2018- Central Tax (Rate) ,dt. 26-07-2018; Notification No. 29/2018- Central Tax (Rate) Dated 31.12.2018. Cont,,,,,,
86 GST on Import of Services Notification no 10/2017 Integrated Tax (Rate) dated 28th June 2017 u/s 5(3) of IGST Act, requires payment under RCM for: i) Any service supplied by any person who is located in a non-taxable territory to any person other than nontaxable online recipient. Thus, the import of services will fall under this category as supply of any service where the supplier is located outside India and the recipient is located in India, the place of supply of service will be in India. It may be noted that, Import of services by an Indian branch from their overseas branch, in the course or furtherance of business, even if without consideration, will be a supply due to provision contained in Schedule I of the CGST Act, 2017. RCM – Import Services
SN Panigrahi 87 Sr. No Services Provider of service Recipient of Service 1 Taxable services provided or agreed to be provided by any person who is located in a non-taxable territory and received by any person located in the taxable territory other than non- assessees online recipient (OIDAR) # Any person who is located in a non- taxable territory Any person located in the taxable territory other than non-assessee online recipient (Business Recipient) RCM – Import Services
SN Panigrahi 88 Newly Notified Service Under Notification No. 05/2019 dated 29th March,2019 on which RCM Applicable from 1st April 2019. Sr. No Services Provider of service Recipient of Service 1 Services supplied by any person by way of Transfer Of Development Rights or Floor Space Index (FSI) (including additional FSI) for construction of a project by a promoter. Any person Promoter 2 Long Term Lease of Land (30 years or more) by any person against consideration in the form of upfront amount (called as premium, salami, cost, price, development charges or by any other name) and/or periodic rent for construction of a project by a promoter. Any person Promoter
SN Panigrahi 89 Sr. No Services Provider of service Recipient of Service Services by way of transportation of goods by a vessel from a place outside India up to the customs station of clearance in India A person located in non-taxable territory to a person located in non-taxable territory Importer as defined under clause (26) of section 2 of the Customs Act, 1962. RCM – Import of Goods – Freight Paid by Overseas Supplier INCOTERM : CNF & CIF
SN Panigrahi 90  Tax under Reverse Charge can be Paid through Cash only – Rule 85(4) of CGST Rules  ITC can’t be utilized for Payment of Tax under GST  The supplier must mention in his Invoice stating “the tax is payable on reverse charge”. Availing Input Tax Credit (ITC) on Reverse Charge by Recipient  Self Invoice shall be created by Recipient, showing Tax Rate & Amount and Other details as per Rule 46 CGST Rules Manner of Payment of GST under Reverse Charge  Credit is allowed to be claimed on Self Assessment basis by Filling GSTR 3B  The Recipient is entitled to avail ITC subject to Eligibility Conditions Stipulated Sec 16 of CGST Act  Further availing ITC is subject to Blocked Credit as per Sec 17(5) of CGST Act
SN Panigrahi 91  Even though the Recipient is Registered under Composition Scheme, Tax is Payable on Reverse Charge” wherever appillcable. Reverse Charge Miscellaneous Aspects  Composition Scheme Recipient is Not Entitled for ITC Reverse Charge Applicability for Composition Scheme  The Recipient of Supplies attracting RCM, must be Registered  An ISD cannot make purchases liable to Reverse Charge  Reverse Charge is Applicable in case of Advance Payments also  The Rate Applicable to the supplies is the rate at which GST has to be paid. This means that rate under composition scheme should not be used for Reverse Charge purposes.
92 The Time of Supply (TOS) in case of RCM: In case of GOODS In case of Services The TOS would be Earliest of the following:  the date of Receipt of goods  the date of Payment*  the date immediately after 30 days from the date of issue of an invoice by the supplier {not from Self Invoicing} If it is not possible to determine the TOS by the above, the time of supply shall be the date of entry in the books of account of the recipient. *This point is no more applicable based this Notification No. 66/2017 – Central Tax issued on 15.11.2017 The TOS shall be the earliest of the following dates:  The date of Payment  The date immediately after 60 days from the date of issue of an invoice by the supplier {not from Self Invoicing} If it is not possible to determine the TOS by the above, the time of supply shall be the date of entry in the books of account of the recipient.
SN Panigrahi 93 Four Pillars of GST When? Time of Supply To Determine the Rate of Tax & To Determine Due Dates for Payment of Taxes. What is Taxable Event? Supply All forms of Supply for a Consideration + Even though without Consideration as per Schedule -1 Where? Place of Supply To Determine Nature of Supply ie whether Intra-State or Inter-State & Export or Import On What Value? Value of Supply Transaction Value
94 Se 2(107) of CGST Act : “taxable person” means a person who is Registered or Liable to be Registered under section 22 or section 24. Sec 22. (1) of CGST Act : Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees: Provided that where such person makes taxable supplies of goods or services or both from any of the special category States, he shall be liable to be registered if his aggregate turnover in a financial year exceeds ten lakh rupees. Sec 2(108) of CGST Act : “taxable supply” means a supply of goods or services or both which is leviable to tax under this Act. Sec(78) of CGST Act : “non-taxable supply” means a supply of goods or services or both which is not leviable to tax under this Act or under the Integrated Goods and Services Tax Act. Sec 24. of CGST Act : Compulsory Registration in certain cases Special Category States (as mentioned in Art.279A(4)(g) of the Constitution of India) comprise of Arunachal Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and Uttarakhand.
SN Panigrahi 95 Threshold Limit Crosses Rs 20 Lakhs for Other than Special Category States under Sec 22 of CGST Act Threshold Limit Crosses Rs 10 Lakhs for Special Category States under Sec 22 of CGST Act Compulsory Registration Irrespective of Threshold Limit under Sec 24 of CGST Act Exempt from Register in Certain Cases Sec 23 of CGST Act When Gross Turnover Notification No. 06/2019 – Central Tax 29/01/2019 Prior 01/02/2019 W.e.f 01/02/2019 Special Category States Threshold Limit Rs 10 L Arunachal Pradesh Assam Jammu & Kashmir Manipur Meghalaya Mizoram Nagaland Sikkim Tripura Himachal Pradesh Uttarakhand Special Category States Threshold Limit Rs 10 L Jammu & Kashmir Manipur Mizoram Nagaland Tripura The threshold limit for registration has been increased from INR 10 lakh to INR 20 lakh in states of Assam, Arunachal Pradesh, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand
96 Person Engaged in Exclusive Supply of Goods (Not Services) Aggregate Turnover in the Financial Year < Rs 40 Lakhs Except Persons Required to take Compulsory Registration under Section 24 of CGST Act Persons Engaged in Making Supplies of the Following Goods:  1. Ice Cream and other Edible Ice, whether or not containing Cocoa  2. Pan Masala  3. Tobacco and Manufactured Tobacco Substitutes Persons Engaged in Making Intra-State supplies in the States of  Arunachal Pradesh,  Manipur,  Meghalaya,  Mizoram,  Nagaland,  Puducherry,  Sikkim,  Telangana,  Tripura,  Uttarakhand Persons Exercising Option under the provisions of sub-section (3) of section 25 (Voluntary Registration), or such registered persons who intend to continue with their registration under the said Act Exempt from Obtaining Registration (Sec 23(2)) w.e.f. 1st April, 2019
SN Panigrahi 97 The above limit of Rs 40 Lakhs does not apply to following: (a) persons required to take compulsory registration under section 24 of the said Act; (b) persons engaged in making supplies of Demerit goods, namely – Ice cream and other edible ice, whether or not containing cocoa, Pan Masala and Tobacco and manufactured tobacco substitutes (c) persons engaged in making intra-State supplies in the States of Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim, Telangana, Tripura, Uttarakhand (d) persons exercising option under the provisions of sub-section (3) of section 25, i.e. who have voluntarily obtained GST registration or such registered persons who intend to continue with their registration under the said Act
SN Panigrahi 98 Important Points to be noted 1. The new registration limit is only for goods and not for services 2. Inter-state supply of goods shall not be covered, since persons making inter-state supplies are mandatorily required to get registered as per Section 24 3. If the person has obtained registration because of Section 24, the new limit of Rs. 40 Lakhs shall not apply then. 4. The new limit is applicable from 1st April 2019, i.e. Financial Year 2019-20.
Aggregate Turnover Turnover of All Units Computed On All India Basis having Same Permanent Account Number (PAN) Taxable supplies Exempt Supplies Export Turnover Inter-State Supplies Of Distinct Persons Includes Excludes Value of Inward Supplies on which Tax is Payable by a Person on Reverse Charge Basis Central Tax, State Tax, Union Territory Tax, Integrated Tax and Compensation Cess Sec 2(6) of CGST Act : “aggregate turnover” means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess; Aggregate Turnover
Wholly Exempt From Tax Nil Rate of Supply Non-Taxable Supply Sec 2(47) of CGST Act: “exempt supply” means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply; Exempt Supply Exempt Supply
101 Sec 22. (1) of CGST Act : Every supplier who makes a taxable supply and whose aggregate turnover in a financial year exceeds twenty lakh rupees need to be Registered under GST. SNPanigrahi Structure of Registration Number State Code PAN 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Entity Code Blank Check Digit (Logical Code) Each taxpayer will be allotted a state wise PAN-based 15-digit Goods and Services Taxpayer Identification Number (GSTIN) Various digits in GSTIN will denote the following : State Code as defined under the Indian Census - 2011 Multiple Places of business Alpha-numeric (1-9 and then A-Z) and would be assigned depending on the number of registrations a legal entity (having the same PAN) has within one state. For Future Use 10 Digit PAN
SN Panigrahi 102 PAN 1 2 3 4 5 6 7 8 9 10 First three Characters Alphabetic series running from AAA to ZZZ Fourth character of PAN represents the status of the PAN holder. Fifth character Represents first character a) of the PAN holder's Last Name / Surname in case of Individual. b) of the name of the Entity, Trust, society, or organisation in the case of Company/ HUF/ Firm/ AOP/ Trust/ BOI/ Local Authority/ Artificial Judicial Person/ Govt, where the fourth character is "C","H","F","A","T","B","L","J","G". Next four characters are Sequential Number Running from 0001 to 9999. The last (10th) character is an alphabetic digit used as a check-sum to verify the validity of that current code. A — Association of Persons (AOP) B — Body of Individuals (BOI) C — Company F — Firm G — Government H — HUF (Hindu Undivided Family) L — Local Authority J — Artificial Juridical Person P — Individual (PROPRIETOR) T — Trust (AOP) E – LLP (Limited Liability Partnership) It is a unique, 10-character alpha-numeric identifier, issued under Section 139A of the Income Tax Act, 1961 – Valid for Life Time. The PAN is mandatory for a majority of financial transactions such as opening a bank account, receiving taxable salary or professional fees, sale or purchase of assets above specified limits etc.; especially high-value transactions. It also serves as an important proof of identification.
103 Sec 2(18) of CGST Act : “business vertical” means a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which is subject to risks and returns that are different from those of the other business verticals. Explanation.––For the purposes of this clause, factors that should be considered in determining whether goods or services are related include–– (a) the nature of the goods or services; (b) the nature of the production processes; (c) the type or class of customers for the goods or services; (d) the methods used to distribute the goods or supply of services; and (e) the nature of regulatory environment (wherever applicable), including banking, insurance, or public utilities; w.e.f 1-02-2019 Notification No. 03/2019 – Central Tax 29/01/2019 The term ‘multiple business verticals’ has been removed from the provisions of registration and has been substituted by the term ‘multiple places of business’, and separate registration for each such place of business within the state or union territory shall be granted subject to the fulfilment of conditions specified therein.
SN Panigrahi 104 Notification No. 03/2019 – Central Tax 29/01/2019 A separate registration shall be required by a person having a special economic zone (SEZ) unit or being an SEZ developer from his/her other units located outside the SEZ in the same state or union territory.
105 Sec 25(4) of CGST Act : A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act. Sec 25(5) of CGST Act : Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of an establishment, has an establishment in another State or Union territory, then such establishments shall be treated as establishments of distinct persons for the purposes of this Act. Sec 2(50) of CGST Act : “fixed establishment” means a place (other than the registered place of business) which is characterized by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services, or to receive and use services for its own needs; Same Legal Entity – Same PAN Distinct Persons Registered Dealer State - A Registered Dealer State - B Registered Dealer Same State - A Separate GST Registration Separate GST Registration Separate GST Registration Registered Dealer State - C Separate GST Registration
106 GST is State Specific – That means if a business has operations in different States then in each of such States Separate Registration is Required • Display of Registration Certificate
Central / State Government may be regarded as a taxable person in respect of activities engaged as public authorities except otherwise specified Every Registered Person become Taxable Person would be required to pay GST and threshold of INR 20 lakhs / Rs 10 Lakhs will not be available to such registered person. A person having multiple business places in a State may obtain (optional) separate registrations for each such place in that State. Place of registration is the state from where taxable goods and / or services are supplied by a supplier. Persons making inter-State taxable supply irrespective of threshold; Persons liable to pay GST under reverse charge; Input Service Distributor; E-Commerce Operator need to obtain registration. An agriculturist, to the extent of supply of produce out of cultivation of land, would not be liable to take registration in the GST regime. Some categories of persons shall be required to be Registered Compulsorily - Sec 24 of CGST Act SNPanigrahi
Registration Normal Registration (Upto 20 Lakhs / 10 Lakhs – Sec 22(1)) Registration Under Composition (Upto 1.5 Cr – Sec 10) Registration as Casual Taxable Person (Valid for 90 Days – Sec 24 & 27) Compulsory Registration (Sec 24) Registration in every such State or Union territory in which he is so liable – Sec 25(1) Deemed Registration (Sec 26) Not Liable for Registration (Sec 23) Voluntary Registration (No threshold Limit – Sec 25(3)) ISD Registration (Sec 24) w.e.f 1st Apr’19: Exclusive Supply of Goods (Upto 40 Lakhs – Sec 23(2)) w.e.f 1st Apr’19 For suppliers of Services or Mix Suppliers (Upto 50 Lakhs)
Persons making any Inter-State Taxable Supply Casual Taxable Persons making Taxable Supply Persons who are required to Pay Tax under Reverse Charge Person who are required to pay tax under sub-section (5) of section 9 (e- Commerce Services) Non-resident Taxable Persons making taxable supply Persons who are required to deduct tax under section 51, whether or not separately registered under this Act Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether as an Agent or otherwise Input Service Distributor, whether or not separately registered under this Act Persons who supply through electronic commerce operator who is required to collect tax at source under section 52 Every electronic commerce operator Every person supplying online information and data base access or retrieval services from a place outside India to a person in India, other than a registered person Such other person or class of persons as may be notified by the Government on the recommendations of the Council Compulsory Registration : Sec 24
110 Persons Not Liable to Registration Section 23 of CGST Act Not Liable to Registration Supplies Not Liable to Tax or Wholly Exempted An Agriculturist for Produce out of Cultivation of Land By notification Specify the Category of Persons Sec 2(7) of CGST Act “agriculturist” means an individual or a Hindu Undivided Family who undertakes cultivation of land— (a) by own labour, or (b) by the labour of family, or (c) by servants on wages payable in cash or kind or by hired labour under personal supervision or the personal supervision of any member of the family Sec 23(1)(b)
111 Supplier Inter-State Supply Casual Taxable Persons – Supplying Handicraft Goods – Aggregate Turnover < Rs 20 L – Notf: 32/2017, 15th Sep’17 Supplier Need Not Register Inter-State Supply Handicraft Goods – Aggregate Turnover < Rs 20 L – Notf No. 8/2017 – Integrated Tax, dt. 14th Sep’17, Job-workers making Inter-State supply of Services to a Registered Person – Aggregate Turnover < Rs 20 L Exemption will not be available to job work in relation to jewellery, goldsmiths’ and silversmiths’ wares as covered under Chapter 71 which do not require e-way bill. Notf : No. 07/2017-Integrated Tax, dt. 14th Sep’17 Inter-State Supply by Service Providers – Aggregate Turnover < Rs 20 L Decision Taken in 22nd meeting of the Council Notification No. 10/2017 – Integrated Tax; 13th October, Supplier Need Not Register
 Notification No. 10/2017 – Integrated Tax; 13th October, 2017 Inter-State Supply by Service Providers – Aggregate Turnover < Rs 20 L  Notification No. 65/2017 – Central Tax, the 15th November, 2017 Supplies of Services through E-Commerce Operator : Turnover < Rs 20 L - whether supplying intra-State, inter-State or through e-commerce operator  Notification No. 65/2017 – Central Tax; 15th Nov’ 2017 (Except Supply through e- Commerce Person having an Aggregate Turnover of Less than INR 20 Lakhs (INR 10 Lakhs)  Notification No. 5/2017- Central Tax dated 19/06/2017 All the Supplies Under RCM Supplier Exempted from Registration
113  Notification No. 32/2017 Integrated Tax, 15th Sep’17 Casual Taxable Persons – Supplying Handicraft Goods – Aggregate Turnover < Rs 20 L  Notification No. 8/2017 – Integrated Tax, dt. 14th Sep’17 Inter-State Supply Handicraft Goods - Aggregate Turnover < Rs 20 L  Notification No. No. 07/2017-Integrated Tax, dt. 14th Sep’17 (Exemption will not be available to jewellery, goldsmiths’ and silversmiths’ wares as covered under Chapter 71 which do not require e-way bill). Job-workers making Inter-State supply of Services to a Registered Person - Aggregate Turnover < Rs 20 L Supplier Exempted from Registration
SN Panigrahi 114
SN Panigrahi 115
SN Panigrahi 116 Sec 16 Sec 18 Sec 19 Sec 20 Sec 21 Sec 17 Eligibility & Conditions for Taking Credit Apportionment of Credit & Blocked Credit Availability of Credit in Special Circumstances Taking Input Tax Credit in Respect of Inputs & Capital Goods Sent for Job Work Manner of Distribution of Credit by ISD Manner of Recovery of Credit Distributed in Excess
ITC allowed only to a Registered Taxable Person Which are used or intended to be used in the course or furtherance of his business Possession of Tax Invoice / Tax Document Goods or Services Received Documentary Evidence of Tax Paid by the Supplier Payment Made to Supplier within 180 Days Tax Documents must contain GSTIN of both Supplier and Recipient & other Particulars Documentary Evidence of Returns Filled Taxable Outward Supply (Not Exempted) ITC allowed against Tax Invoice; Self Invoice (RCM); Debit Note; B/E; ISD Invoice Recipient has Not Claimed Depreciation on the tax component No ITC shall be allowed after GST return has been filed for September or filing of relevant annual return which ever is earlier
Registered Business Inward Supply Outward Supply IGST Exports / SEZ Input Tax Credit CGST SGST / UT GST IGST Compensation Cess Output Tax Liability CGST SGST / UT GST IGST Compensation Cess IGST SNPanigrahi Can be Used to offset Outward Tax Liability
SNPanigrahi 119 IGST Liability IGST ITC CGST Liability SGST / UT GST Liability CGST ITC SGST ITC IGST ITC CGST ITC IGST ITC SGST / UT GST ITC Compensation Cess Liability Compensati on Cess ITC OutwardTax LiabilityUtilizationofITConPriority 2 1 2 2 1 2 1 Utilization of ITC In any Order
ITC credit of CGST is not available for SGST or vice-a-versa CGST Input Credit SGST/UTGST Input Credit CGST Output SGST/UTGST Output Sec 49 (5)(e) Sec 49 (5)(f) SNPanigrahi
121 Section 49 of CGST Act, 2017; read with Rules 85 to 88 of CGST Rules, 2017 deals with payment of tax, interest, penalty and other amounts. Focus on e-payments for the liabilities arising under GST rather than over the counter payments. Simultaneously, for the small assessee, over the counter payment by cash / cheque/ DD is permissible up to the limit of Rs. 10,000/- per challan per tax period. Types of Registers / Ledgers Electronic Cash Ledger Electronic Credit Ledger Electronic Liability Register Payments Through Internet Banking/ credit or debit cards / NEFT / RTGS Through Counter Sec 49(1) Used for any payments Tax, Interest, Penalty. Fees or any other Payment Sec 49(3) Input tax credit shall be credited Sec 49(2) Used for making payments of Taxes only Sec 49(4) All the tax liabilities Are Recorded Sec 49(7) Can be viewed Section 49 of CGST Act, 2017 SN Panigrahi FORM GST PMT-01FORM GST PMT-05 FORM GST PMT-02
SN Panigrahi 122 Sec 17 of CGST Act Apportionment of credit and blocked credits.
123 Use of Input Tax Credit For Business Purpose Other Purposes ITC Allowed ITC Not Allowed Sec 17. (1) of CGST Act : Where the goods or services or both are used by the registered person partly for the purpose of any business and partly for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of his business. Reverse the Credit if Taken
124 Use of Input Tax Credit Taxable Supply Including Zero Rated (Exports & SEZs) Exempted Supplies ITC Allowed ITC Not Allowed Sec 17. (2) of CGST Act : Where the goods or services or both are used by the registered person partly for effecting taxable supplies including zero-rated supplies under this Act or under the Integrated Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-rated supplies. Reverse the Credit if Taken
125 Sec 17(5) of CGST Act Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax credit shall not be available in respect of the following, namely:- (a) Motor Vehicles for transportation of persons having approved seating capacity of not more than thirteen persons (including the driver), except when they are used for making the following taxable supplies, namely:–– (i) for making the following taxable supplies, namely:- A. Motor Vehicles for transportation of persons – •No ITC allowed if seating capacity is upto 13 persons (including Driver) • Exceptions : (ie ITC allowed even less than 13 Seater) • used for further supply of Motor Vehicles (e.g. for car dealers) • used for transportation of passengers which are taxable (e.g. travels agency, airlines agency etc.) • used for imparting taxable training (e.g. motor driving schools) Input Tax Credit Central Goods and Services Tax (Amendment) Rules, 2019 Notification No. 03/2019 – Central Tax 29/01/2019
126 Sec 17(5)(b) the following supply of goods or services or both— i. Food and Beverages, outdoor catering, Beauty Treatment, health services, cosmetic and plastic surgery, Leasing, Renting or Hiring of Motor Vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the purposes specified therein, Life Insurance and Health Insurance: Provided that the input tax credit in respect of such goods or services or both shall be available where an inward supply of such goods or services or both is used by a registered person for making an outward taxable supply of the same category of goods or services or both or as an element of a taxable composite or mixed supply;
127 Sec 17(5)(b) ii. membership of a club, health and fitness centre; and iii. travel benefits extended to employees on vacation such as leave or home travel concession: Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for an employer to provide the same to its employees under any law for the time being in force.
128 Sec 17(5)(c) Works contract services for construction of immovable property except when •It is input service for further supply of works contract service e.g. Subcontract •Immovable property is plant and machinery i.e. ITC on works contract services used for construction of immovable plant and machinery is available. Sec 17(5)(d) Inward supply received by a taxable person for the construction of an immovable property (other than plant and machinery) on his own account even when such supplies are used in the course of or furtherance of business. Explanation.––For the purposes of clauses (c) and (d), the expression “construction” includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property; •e.g. when a company purchases material to construct a house for his use on his own account, ITC on material purchased is not allowed as credit. But when a company purchases material to construct a house for someone other’s use,(construction business), ITC on material purchased is allowed as credit.
129 Sec 17(5) (e) Inward supplies on which tax has been paid under under section 10 (Composition scheme). (f) Inward supplies received by Non Resident taxable person except goods imported by him. •e.g. Goods imported by Non resident taxable person is chargeable under customs which includes IGST paid by him, credit of which is available to Non resident taxable person. (g) Goods or services used for personal consumption. (h) Goods that are lost, stolen, destroyed, written off, or disposed of by way of free samples or gift. (i) Tax paid u/s. 74(Fraud), 129(Seize), 130(Confiscation).
SN Panigrahi 130
13 S No Return / Section Nature Last date of Filing Who Should File 1 GSTR – 1* Section 37 Outward Supplies made by the Taxpayer (other than compounding taxpayer and ISD) Turnover Above Rs 1.5 cr 11th of the Next Month Notification No. 32 /2018 – Central Tax, 10th August, 2018 Normal Registered Person Exclusions •Input service distributor (“ISD”);” •Non-resident taxable person.(“NRI”) •Person paying tax under section 10, 51 or 52 [i.e., Composition tax payer, tax deductor, tax collector- (here e.commerce Operator)] •Supplier of Online information and database access or retrieval services (“OIDAR”) Turnover upto Rs 1.5 cr Quarterly by end of the month following the Quarter Notification No. 32 /2018 – Central Tax, 10th August, 2018 2 GSTR – 2 Section 38 Inward Supplies made by the Taxpayer (other than compounding taxpayer and ISD) 15th of the Next Month Suspended Till Further Notice 3 GSTR – 3 Section 39(1) Monthly Return (other than compounding taxpayer and ISD) 20th of the Next Month Suspended Till Further Notice 3 A GSTR – 3 B Section 39(1) Monthly Return for Claiming Credit & Paying Tax 20th / 22nd / 24th of the Next Month • Notification : 07/2020; 3/02/2020 4 GSTR - 4 Section 39(2) Quarterly return for compounding taxpayer 18th of the month next to quarter. Registered under Composition Scheme 5 GSTR – 5 Section 39(5) Periodic return by Non-Resident Foreign taxpayer 20th of the month succeeding tax period & within 7 days after expiry Non-Resident Foreign Tax Payer Registered NRI SNPanigrahi
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133 S No Return / Section Nature Last date of Filing Who Should File 6 GSTR – 5A Rule : 64 Online Information and Database Access or Retrieval (OIDAR) services Provider to un-registered person 20th of the month succeeding the Tax period OIDAR services provider 7 GSTR – 6 Section 39(4) Monthly Return of Input Service Distributor (ISD) 13th of the Next Month Input Service Distributer (ISD) 8 GSTR – 7 Section 39 (3) Monthly Return of Tax Deducted at Source 10th of the Next Month TDS Deductor 9 GSTR – 8 Section 52(4) Monthly Return of Tax Collection at Source 10th of the Next Month E- Commerce Operator 10 GSTR – 9 Section 44; Rule 80(1) Annual Return 31st Dec of subsequent year All registered persons Except : ISD; Person paying tax under section 51 or 52; Casual taxable person; NRI 11 GSTR – 9A Section 44; Proviso to Rule 80(1) Annual Return for Composition Scheme 31st Dec of subsequent year Composition Tax Payer
134 S. No Return / Ledger Nature Last date of Filing Who Should File 12 GSTR-9B Section 52(5)- Rule 80(2) Annual Statement by e.commerce Operator 31st Dec of the succeeding financial year (i.e., for financial year ending March) e.commerce Operator 13 GSTR – 9C Section 44; Rule 80(3) Audited annual accounts and a reconciliation statement, duly certified 31st Dec of subsequent year Normal Tax Payer having turnover more than “2 crore (Registered person who get his A/cs audited) 14 GSTR – 10 Section 45 Final Return Within 3 months from date of cancellation or date of order of cancellation of registration, whichever is later All registered persons for Cancellation of Registration Except : ISD; NRI Person paying tax under section 10, 51 or 52 (i.e., Composition tax payer, tax deductor, tax collector- here e.commerce Operator) OIDAR 15 GSTR - 11 Details of inward supplies to be furnished by a person having UIN and claiming refund Monthly 28th of the month following the month for which statement is filed
SN Panigrahi 135
Tax Invoice (Sec 31 (1) & (2)) – Rule 46 : Taxable Supply Bill of Supply Sec 31(3)(c)’) – Rule – 49 - Exempt Supplies or in case of Composition Dealer Debit / Credit Note – Sec 34; Rule 53 - For Adjusting Price Revised Invoice Sec 31(3)(a) – Rule 53 - For Newly Registered ISD Invoice – Sec 31; Rule 54 - For Distribution of Credit Self Invoice (RCM) (Sec 31(3) (f) – Rule 46 - Under RCM for Tax Payment Receipt Voucher (Sec 31(3)(d) – Rule 50 - In case of receipt of Advance Money Delivery Challan - Rule 55 - For supply of liquid gas; sending to the Job Worker Refund Voucher (Sec 31(3)(e) – Rule 51 - Advance Money Received, but no supply is made Payment Voucher (RCM) (Sec 31(3) (g) – Rule 52 - Under RCM for Payment to the Supplier Consolidated Tax Invoice - Rule 46 -In case recipient is not a registered person; or the recipient does not require Invoice – Issues Consolidated Invoice at the close of each day & RCM Value > Rs 5,000 in day Consolidated Monthly Invoice Export Invoice (Sec 31 (1) & (2)) – Rule 46 - Zero Rated Supply Tax Invoice Cum Bill of Supply – Rule 46A - Taxable + Exempted Supply Act : CGST Act, 2017 Rules : CGST Rules, 2017 Invoice Under GST & Other Documents
SN Panigrahi 137 In case of supply of Goods: As per sec 31 of CGST Act 2017, a registered person supplying taxable goods shall, before or at the time of — 1. Removal of goods for supply to the recipient, where the supply involves movement of goods; or 2. Delivery of goods or making available thereof to the recipient, in any other case, issue a tax invoice showing the description, quantity and value of goods, the tax charged thereon and such other particulars as may be prescribed. 3. Issue of account statement/payment, where there is continuous supply In case of supply of Services: As per sec 31 of CGST Act 2017, a registered person supplying taxable services shall, before or after the provision of service but within a prescribed period issue a tax invoice, showing the description, value, tax charged thereon and such other particulars as may be prescribed: Thus tax invoice must be issued within –  30 days from the date of supply of the service  45 days from the date of supply of the service, where the supplier is an insurer or banking company or a financial institution
SN Panigrahi 138 Minimum amount for raising a GST Invoice: As per Sec 31(3) (b) a registered person may not issue a tax invoice, if the value of the goods or services or both supplied is less than two hundred rupees subject to such conditions and in such manner as may be prescribed. Though it is always a good practise to issue GST invoice for any amount, as per GST Act read with rules, a tax invoice need not be issued when the value of the goods or services supplied is less than INR 200, if –  The recipient is unregistered and  The recipient does not require an invoice, in case if the recipient demands for the invoice, should be issued
139 TAX INVOICE (See Section 31 of CGST Act,2017 read with Rule 46 of CGST Rules, 2017) Name of Supplier: Address: Contact Details : Email ID & Mobile GSTIN: Invoice Number : Date: Reverse Charge : (Yes / No) Place of Supply Bill to: Ship to: Name: Address: State: State Code: GSTIN: Name: Address: State: State Code: GSTIN: Sr. No. Description of Goods/Service HSN/ SAC Qty Unit Rate Total Taxable value(Rs.) CGST SGST IGST Total Rate Rs. Rate Rs. Rate Rs. Total Value in Words: Terms & Condition: 1. 2. 3. 4. For M/s __________________________ Authourized Signatory
140 Invoice under Reverse Charge (As per Sec 31(3) (f) of the CGST Act, 2017 read with Rule 46 of the CGST Rules, 2017) Name of Supplier: Address: Contact Details : Email ID & Mobile Invoice Number : Date: Reverse Charge : (Yes / No) Place of Supply Bill to: Ship to: Name: Address: State: State Code: GSTIN: Name: Address: State: State Code: GSTIN: Sr. No. Description of Goods/Service HSN/ SAC Qty Unit Rate Total Taxable value(Rs.) CGST SGST IGST Total Rate Rs. Rate Rs. Rate Rs. Total Value in Words: Terms & Condition: 1. 2. 3. 4. For M/s __________________________ Authourized Signatory
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142 Debit Note The supplier has Erroneously Declared a Value which is less than the actual value of the goods or services or both provided The Quantity Received by the Recipient is More than what has been declared in the tax invoice The supplier has Erroneously Declared a Lower Tax Rate than what is applicable for the kind of the goods or services or both supplied Any other Similar Reasons Debit Note A supplier of goods or services or both is mandatorily required to issue a tax invoice. However, during the course of trade or commerce, after the invoice has been issued there could be situations like: In order to regularize these kinds of situations the supplier is allowed to issue what is called as debit note to the recipient. The debit note also includes supplementary invoice.
143 Credit Note Supplies are Returned or Found to be Deficient by the Recipient Charged Excess in GST Required to Decrease in GST Charged in Invoice Charged Excess in Invoice Value Required to Decrease in Value Credit Note A credit note in GST, is a document issued by the supplier in the following cases:

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