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GST Law & Analysis with Conceptual Procedures with Free DVD (October 2016)

This edition of GST book extensively covers in-depth analyses of Model CGST/SGST and IGST Act, 2016 and the Draft Business Processes released by the Government of India. This edition comprehensively discusses all the key GST provisions along with impact, preparations required for GST and challenges ahead, providing an insight to the readers for assisting in smooth transition to GST.

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GST Law & Analysis with Conceptual Procedures with Free DVD (October 2016)

  1. 1. GST Law & Analysis with Conceptual Procedures BIMAL JAIN ISHA BANSAL YOUNG GLOBAL’SYOUNG GLOBAL YOUNG GLOBAL’S YOUNG GLOBAL Highlights of the Book • Detailed commentary on Model GST Law with illustrations, diagrams and flowcharts. • Discussion on various domains viz. inter-state/intra-state supply of goods and/or services, principles of place of supply & time of supply, exclusion and exemptions in GST, exports & imports under GST, determination of Revenue Neutral Rate (RNR) etc. in a pragmatic manner through illustrations for easy digest • DVD containing:  PPT on Model GST Law, 2016  Video presentation on highlights of Model GST Law, supply, taxable person, time of supply, place of supply etc.  Appendices on Model GST Law, 2016, Constitution (101st ) Amendment Act, 2016, GST Draft Rules & Formats on registration, invoice, payment, returns and refunds, FAQs released by CBEC etc. ABOUT THE BOOK This edition of GST book extensively covers in-depth analyses of Model CGST/SGST and IGST Act, 2016 and the Draft Business Processes released by the Government of India. This edition comprehensively discusses all the key GST provisions along with impact, preparations required for GST and challenges ahead, providing an insight to the readers for assisting in smooth transition to GST. KEY FEATURES OF THE BOOK l Detailed commentary on Model GST Law to encapsulate the provisions for easy digest l Overview of present indirect taxes-shortcomings, cascading and double taxes l GST-need and necessity, what it is, how it works, etc., alongwith discussion on challenges ahead l Detailed discussion on meaning and scope of the term ‘supply’ alongwith the discussion on likely issues l Detailed discussion on meaning of taxable persons, liability to be registered, exclusion and compulsory registration l Discussion on various domains viz. inter-state/intra-state supply of goods and/or services, principles of place of supply & time of supply, exclusion and exemptions in GST, exports & imports under GST, determination of Revenue Neutral Rate (RNR) etc. in a pragmatic manner through illustrations for easy digest l Discussion on flow of input tax credit in GST with multiple illustrations l Business processes and procedural aspects of GST-registration, return, payment, refund, demand & recovery, adjudication, appeals, etc., alongwith key suggestions l Journal entries for various scenarios in GST to provide clarity from accounting perspective l Transitional issues and impact of GST on manufacturer, trader, service sector and specifically on various sectors viz. alcohol, real estate, automobiles, telecom, FMCG, insurance, e-commerce etc. l Section-by-section analyses of the Constitution (101st Amendment) Act, 2016 and its comparison with the 122nd Constitutional Amendment Bill, 2014 l Journey of GST including important milestones with way forward for GST l Comprehensive FAQs to provide conceptual clarity on various aspects of GST in easy and understandable way l Appendices on Model GST Law, 2016, Constitution (101st Amendment) Act, 2016, GST Draft Rules & Formats on registration, invoice, payment, returns and refunds, FAQs released by CBEC etc. l DVD containing PPT on Model GST Law, video presentation on Highlights of Model GST Law, supply, taxable person, time of supply, place of supply, valuation, GST credit, impact on service sector etc. October, 2016 Published by YOUNG GLOBAL PUBLICATIONS B-4, Basement, Vandhana Building, 11 Tolstoy Marg, New Delhi - 110 001 Phone: +91-11-23324142, 41824268 E-mail: info@youngglobals.com Website: www.bookskhoj.com Price `1795 OCTOBER,2016 GSTLaw&Analysis withConceptualProcedures BIMAL JAIN ISHA BANSAL BUY FROM WWW.BOOKSKHOJ.COM
  2. 2. GST Law and Analysis with Conceptual Procedures BUY THE HARD COPY EDITION WWW.BOOKSKHOJ.COM
  3. 3. YOUNG GLOBAL PUBLICATIONS B-4, Basement, Vandhana Building, 11, Tolstoy Marg, New Delhi - 110 001 Phone: +91-11-41824268, 23324142 E-mail: info@youngglobals.com Website: www.bookskhoj.com ® BUY THE HARD COPY EDITION WWW.BOOKSKHOJ.COM
  4. 4. GST Law and Analysis with Conceptual Procedures Bimal Jain FCA, FCS, LLB, B.Com (Hons.) Isha Bansal ACS, LLB, B.Com (Hons.) An Insight into Goods & Service Tax YOUNG GLOBAL PUBLICATIONS CA. Chitresh Gupta B. Com (H), FCA, IFRS (Certified), IDT (Certified) ® BUY THE HARD COPY EDITION WWW.BOOKSKHOJ.COM
  5. 5. vii BIMAL JAIN FCA, FCS, LLB, B.Com (Hons.) with 21 years of experience in Indirect Taxation – GST, Service tax, Excise, Customs, VAT/ CST, Foreign Trade Policy, DGFT matters, etc. BimalJain,qualifiedasaCharteredAccountantin May 1994, and Company Secretary in December 2006 and LLB in December, 2009. He has worked in renowned companies viz. LG Electronics India Pvt. Ltd, Honda Motorcycle & Scooters India Pvt. Ltd, Hindustan Development Corporation Ltd, Khaitan & Company. Currently, he is the Chief Executive Director of A2Z Taxcorp LLP. Bimal is a Chairman of the Indirect Tax Committee of PHD Chamber of Commerce, Chairman of the Corporate Advisory Committee of IPEM Group of Institutions, Member of Indirect Tax Committee of FICCI & Assocham, Special Invitee of Indirect Tax Committee of ICAI, and Member of eminent faculties in Indirect tax committee of ICAI/ ICSI/ ICMA. He is awarded as Best Participant Award in MSOP – 117th Batch by ICSI, Business Leader Award by Amity School Noida, Best Speaker Award by NIRC – ICAI/ ICMA and Young Achievers Award at Igniting Minds, 2015. He regularly writes articles on multiple indirect tax issues and has authored books, namely, Service Tax Voluntary Compliance Encouragement Scheme, About the Authors
  6. 6. viii GST Law and Analysis - with Conceptual Procedures 2013 and another GST book titling ‘Goods and Services Tax – Introduction and Way Forward’. He has also represented PHD Chamber of Commerce, Assocham, ICAI, ICSI before various Government Authorities/Committees viz. the Central Board of Excise and Customs, Ease of doing Business Committee, Empowered Committee of State Finance Ministers, etc. Bimal’scorecompetencyandareaofexpertiseareindirecttaxation, international and corporate taxation. He specializes in all aspects of GST, Excise, Service tax, Customs, Sales tax/VAT laws, Free trade/economic cooperation agreements, anti-dumping duty, foreign trade policy, etc. He carries a blend of industrial and professional acumen, knowledge and experience in carrying out diagnostic review of business operations, opinion & advisory services, process review, structuring of various business models, litigation services at all appropriate forums including Commissioner(Appeals), CESTAT, High Court and representation made before the TRU/ CBEC/ DGFT, etc., for various matters concerning trade, industry and commerce. ISHA BANSAL ACS, LLB, B.Com (Hons.) with more than 5 years of experience in indirect taxation matters Isha, qualified as a Company Secretary and LLB, after obtaining a Bachelor’s degree in Commerce (Hons.) from University of Delhi in 2008. She worked as an intern with DLF group looking after company secretarial and legal matters before moving to indirect taxation for which she had interest and flair. Thereafter, she joined A2Z Taxcorp LLP and is presently working as Senior Associate, providing legal and advisory services to various multinational companies in the areas of GST, Excise, Customs, VAT, Service tax, anti-dumping duty, foreign trade policy, etc. Her in-depth knowledge, drive and strategic insights have contributed immensely to the organizations she has worked with. Isha has done extensive study on GST in India and has been following all the developments in the rollout of GST by the Indian Government. GST is therefore one of her core competency areas along with other indirect tax laws.
  7. 7. xlv The DVD attached with the Book contains the following: 1. Comprehensive PPT on Model GST Law, 2016 2. Video Presentations on various aspects of Model GST Law and its impact: • Goods and Services Tax (GST) - Need and Necessity • Overview of Dual GST Model in India • Highlights of Draft GST Law, 2016 • Presentation on Draft GST Law - Levy, Taxable Event- Supply, Taxable Person, Composition Scheme • GST Impact & Preparedness for Service Sector 3. GST Draft Rules and formats relating to registration, invoice and payments, released by CBEC on September 26, 2016: • Draft Registration Rules • Draft Registration Formats • Draft Payment Rules • Draft Payment Formats • Draft Invoice Rules • Draft Invoice Formats 4. GST Draft Rules and formats relating to returns and refunds, released by CBEC on September 27, 2016: • Draft Return Rules • Draft Return Formats DVD Contains DVD FREE WITH BOOK
  8. 8. xlvi GST Law and Analysis - with Conceptual Procedures  GSTR 9B  ITC Mismatch Report • Draft Refund Rules • Draft Refund Formats 5. The Constitution (101st Amendment) Act, 2016 6. Decoding of the Constitution (101st Amendment) Act, 2016 – Section by section analyses and comparison with 122nd Constitutional Amendment Bill, 2014 7. Model CGST/SGST and IGST Act, 2016 along with Schedules and GST Valuation Rules 8. Draft Business Processes Report on registration, payment, returns and refund, placed on public domain in the month of October, 2015 9. 122nd Constitutional Amendment Bill, 2014, as introduced in Lok Sabha 10. Select Committee Report on 122nd Constitutional Amendment Bill, 2014 11. 122nd Constitutional Amendment Bill, 2014, as reported by the Select Committee of Rajya Sabha 12. Key Amendments in the 122nd Constitutional Amendment Bill, 2014 by Rajya Sabha 13. Report on the Revenue Neutral Rate by CEA Dr. Arvind Subramanian led Panel 14. FAQs on GST released by CBEC on August 3, 2016 and September 21, 2016 15. GSTN ‘GST Eco-System & GST Suvidha Provider (GSP)’ Report 16. CBEC Presentation on GST and Background material for GST
  9. 9. xiii About the Authors vii Preface ix DVD Contains xlv GST – Great Step to Transformation xlvii CHAPTER 1 Overview of Present Indirect Taxation in India - Shortcomings, Cascading and Double Taxes 1 CHAPTER 2 Overview Need of GST - How GST can Solve Present Shortcomings 22 CHAPTER 3 Taxes to be subsumed in GST 35 CHAPTER 4 Administration of GST 41 CHAPTER 5 Intra-State Supply of Goods and/or Services 47 CHAPTER 6 Inter-State Supply of Goods and/or Services 63 CHAPTER 7 Taxable event under GST – Meaning and scope of supply 82 CHAPTER 8 Taxable Person under GST and Reverse Charge Mechanism 153 CHAPTER 9 Composition Levy under GST 184 CHAPTER 10 Exclusions and Exemptions under GST 190 CHAPTER 11 Input Tax Credit under GST – Availment and Utilisation 238 CHAPTER 12 Valuation under GST 279 CHAPTER 13 Exports and Imports under GST 305 CHAPTER 14 Place of Supply of Goods and/or Services in GST 316 Content at a Glance BUY THE HARD COPY EDITION WWW.BOOKSKHOJ.COM
  10. 10. xiv GST Law and Analysis - with Conceptual Procedures CHAPTER 15 Time of Supply (Point of Taxation) of Goods and/or Services in GST 361 CHAPTER 16 Registration under GST 391 CHAPTER 17 Payment of Tax under GST 435 CHAPTER 18 Returns under GST 472 CHAPTER 19 Refunds in GST 523 CHAPTER 20 Tax Invoice, Credit and Debit Notes 566 CHAPTER 21 Accounts, Records and Presumption as to Documents 579 CHAPTER 22 Journal Entries under GST 594 CHAPTER 23 Assessments and Audit 634 CHAPTER 24 Demands and Recovery 656 CHAPTER 25 Inspection, Search, Seizure and Arrest 701 CHAPTER 26 Offences, Penalties, Prosecution and Compounding 716 CHAPTER 27 Appeals and Revision 746 CHAPTER 28 Advance Ruling and Settlement of Cases 780 CHAPTER 29 Transitional Provisions in GST 808 CHAPTER 30 Classification, Rates and Miscellaneous provisions 866 CHAPTER 31 Robust Information Technology Infrastructure and GST 903 CHAPTER 32 Impact of GST in General and on Various Sectors 927 CHAPTER 33 Electronic Commerce 974 CHAPTER 34 Job Work 990 CHAPTER 35 Journey of GST in India 1002 CHAPTER 36 Decoding of the Constitution (101st Amendment) Act, 2016 1010 CHAPTER 37 Preparation for GST and challenges ahead 1015 CHAPTER 38 FAQs on GST 1024 CHAPTER 39 Commentary on Model GST Law 1135
  11. 11. xv About the Authors vii Preface ix DVD Contains li GST – Great Step to Transformation liii CHAPTER 1  Overview of Present Indirect Taxation in India - Shortcomings, Cascading and Double Taxes 1.1 TAXATION – MEANING AND PURPOSE 1 1.2 PRESENT INDIRECT TAXATION IN INDIA – A HYBRID STRUCTURE 2 1.3 SHORTCOMINGS IN PRESENT INDIRECT TAX STRUCTURE – TRIGGERING THE NEED FOR TAX REFORM 16 1.3.1 Intense cascading of taxes – One of the major shortcomings of present indirect taxation system 17 Non-availability of credit of excise duty for VAT 17 Non-availability of credit of service tax for VAT 18 No credit of CST 18 No credit of basic customs duty and customs cess 18 No credit of VAT to service providers 18 No credit of SBC to manufacturers and service providers 18 No cenvat credit of Krishi Kalyan cess to manufacturers 19 No credit to exempt sectors 19 1.3.2 Encroachment on each other’s territory by the centre and the state ending up in double taxation 19 Detailed Content
  12. 12. xvi GST Law and Analysis - with Conceptual Procedures 1.3.3 Interpretational and conceptual mist: classification and valuation issues 19 1.3.4 Lack of uniformity in the provisions and rates 20 1.3.5 Administrational difficulties 20 1.3.6 Hindrances in international competitiveness 20 CHAPTER 2  Overview Need of GST - How GST can Solve Present Shortcomings 2.1 WHAT IS GST? 23 2.2 VARIOUS MODELS OF GST 23 2.2.1 Single GST 24 A. National GST 24 B. State GST 25 2.2.2 Dual GST 25 A. Non-concurrent Dual GST 25 B. Concurrent Dual GST 26 2.2.3 Quebec model 27 2.3 GST MODEL FOR INDIA – CONCURRENT DUAL GST 27 2.3.1 Modus-Operandi of Dual GST Model 27 2.4 HOW GST CAN HELP IN OVERCOMING THE SHORTFALLS IN OUR PRESENT INDIRECT TAXATION STRUCTURE 29 2.4.1 Harmonization of taxation powers under GST - abolition of multiple layers of taxes 29 2.4.2 Avoidance of double taxation 30 2.4.3 Minimal tax cascading and smooth input tax credit chain 31 2.4.4 Reduced complexity - common classification under legislation 32 2.4.5 Development of common national market 32 2.4.6 Uniform compliance at low cost 33 2.4.7 Less complexities: a simple, transparent and easy tax structure 33 2.4.8 Increase in global competitiveness and employment opportunities 33 2.4.9 Boost to the government and economy 33 CHAPTER 3  Taxes to be subsumed in GST 3.1 PRINCIPLES OF SUBSUMATION OF VARIOUS TAXES 35 3.2 TAXES LIKELY TO BE SUBSUMED/NOT TO BE SUBSUMED IN TERMS OF THE CONSTITUTION (101ST AMENDMENT) ACT, 2016 36 3.3 RELEVANT PROVISIONS FOR TAX SUBSUMATION AS PER THE CONSTITUTIONAL AMENDMENT ACT 37 3.3.1 Relevant Articles of the Constitution 38
  13. 13. Detailed Content xvii 3.3.2 Union List under seventh schedule 38 3.3.3 State List under seventh schedule 39 CHAPTER 4  Administration of GST 4.1 INTRODUCTION 41 4.2 ADMINISTRATION UNDER CGST AND IGST 41 4.3 ADMINISTRATION UNDER SGST 42 4.4 APPOINTMENT OF OFFICERS UNDER CGST/IGST AND SGST 43 4.5 POWER OF OFFICERS UNDER CGST/IGST AND SGST 44 ANALYSIS 45 CHAPTER 5  Intra-State Supply of Goods and/or Services 5.1 PRESENT INDIRECT TAX STRUCTURE 47 5.1.1 Intra-state transactions related to goods under the present scenario 48 5.1.2 Intra-state transactions related to services 49 5.2 INTRA-STATE SUPPLY OF GOODS AND/OR SERVICES UNDER THE GST 50 5.2.1 Levy and collection of CGST/SGST - taxation of intra-state supply of goods and/ or services under the GST regime 51 5.2.2 Availment and utilization of input tax credit of CGST and SGST 53 5.2.3 Advantages of the proposed GST model for intra- state supplies 55 5.3 PRESENT STRUCTURE VIS-À-VIS GST STRUCTURE FOR INTRA-STATE SUPPLIES OF GOODS 55 5.3.1 Taxation under the present indirect tax structure 55 5.3.2 Taxation under the GST regime 57 5.4 PRESENT STRUCTURE VIS-À-VIS GST FOR INTRA-STATE SUPPLIES OF SERVICES 59 5.4.1 Taxation under the present indirect tax structure 60 5.4.2 Taxation under GST regime 61 CHAPTER 6  Inter-State Supply of Goods and/or Services 6.1 INTRODUCTION 63 6.2 PRESENT INDIRECT TAX STRUCTURE 64 6.2.1 Concept and taxation of sale/purchase of goods for the inter-state transactions 64 6.2.2 Concept and taxation of rendering of services in case of inter-state transactions 68 6.3 INTER-STATE SUPPLY OF GOODS AND/OR SERVICES UNDER GST 69 6.3.1 Levy and collection of IGST - IGST model for taxing inter-state supply of goods and/or services 70
  14. 14. xviii GST Law and Analysis - with Conceptual Procedures 6.3.2 Scope of the IGST model 71 How to determine whether a supply is inter-state in nature? 71 6.3.3 How to set-off input tax credit 72 6.3.4 Advantages of the IGST model 73 6.4 IMPORTANT HIGHLIGHTS OF INTER-STATE TRANSACTIONS UNDER THE CONSTITUTION (101ST ) AMENDMENT ACT, 2016 74 6.5 PRACTICAL ILLUSTRATION 75 6.5.1 Taxation under the present indirect tax structure 76 6.5.2 Taxation under GST regime 77 CHAPTER 7  Taxable event under GST – Meaning and scope of supply 7.1 TAXABLE EVENT UNDER THE PRESENT INDIRECT TAX STRUCTURE 82 7.2 “SUPPLY” – THE TAXABLE EVENT UNDER GST REGIME 84 7.3 MEANING AND SCOPE OF THE TERM ‘SUPPLY’ – SECTION 3 84 7.3.1 Inclusive definition of term ‘supply’ 86 7.3.2 Normal supply of goods and/or services: Section 3(1)(a) 87 I. All forms of supply 88 II. Made or agreed to be made for a ‘consideration’ 91 III. By a person 94 IV. In the course or furtherance of ‘business’ 97 Profession and Vocation – New terms included in the definition of term ‘business’ 98 Scope of the term ‘in the course or furtherance of......’ 99 7.3.3 Import of service: Section 3(1)(b) 100 No GST on importation of services for personal use up to specified amount 100 GST on importation of services in the course or furtherance of business irrespective of any threshold amount 101 Conditions to be satisfied to qualify as ‘import of service’ 101 7.3.4 Supply without consideration: Section 3(1)(c) 102 7.3.5 Supply of goods v/s supply of services: Section 3(2) 107 Double taxation under present regime 107 A prominent ray of hope under GST 108 Meaning of ‘goods’ under GST 108 Meaning of ‘services’ under GST 109 Actionable claim is a service and liable to GST – New taxability on the chart 112 Unsecured debt transferred to a third person for a consideration is a service under GST 113 Beneficial interest in moveable property 113 Assignment of actionable claim - is it not a transaction in money? 114
  15. 15. Detailed Content xix 7.3.6 Matters to be treated as supply of ‘goods’ or ‘services’ 114 7.3.7 Principal – Agent transaction under GST: Section 3(2A) 139 Agent liable to GST only when goods and/or services are received/supplied on behalf of principal 139 7.3.8 Power(s) of central/state government to specify nature of supply to be treated as supply of goods or services: Section 3(3) 140 7.3.9 Branded services by an aggregator: Section 3(4) 140 7.3.10 Even self-supply to constitute supply under GST– Analysis on branch/stock transfers 142 Concept of branch/stock transfers 142 Taxation of branch/stock transfers in the present regime 143 Taxation of branch/stock transfers under GST 144 ANNEXURE I- RELEVANT EXTRACT OF THE EDUCATION GUIDE ON CONSTRUCTION SERVICES 148 CHAPTER 8  Taxable Person under GST and Reverse Charge Mechanism 8.1 DEFINITION OF ‘TAXABLE PERSON’ UNDER GST 153 8.2 PERSONS REQUIRED TO BE REGISTERED UNDER GST – SCHEDULE III TO THE MODEL CGST/SGST ACT 157 8.2.1 Agriculturist out of GST net - not a taxable person 163 8.3 THRESHOLD EXEMPTION LIMITS TO CHARGE PAY GST 165 8.4 CENTRAL GOVERNMENT, STATE GOVERNMENT(S) AND LOCAL AUTHORITY ARE TAXABLE PERSON 168 8.5 PERSONS WHO SHALL NOT BE CONSIDERED AS TAXABLE PERSONS 174 8.6 REVERSE CHARGE MECHANISM UNDER GST 177 CHAPTER 9  Composition Levy under GST 9.1 COMPOSITION LEVY UNDER PRESENT INDIRECT TAX STRUCTURE 184 9.2 COMPOSITION LEVY UNDER GST 185 9.2.1 Turnover limit for composition scheme – Section 8 of the Model CGST/SGST Act 185 Composition scheme to be adopted uniformly by all the registered taxable persons, having the same PAN 186 No composition scheme in case of reverse charge liability 186 No composition scheme for effecting inter-state transactions 187 No composition scheme for casual dealers 187 9.2.2 Compounding dealers cannot enter into the credit chain 187 9.2.3 Equivalent penalty in case of irregular availment of composition scheme 187
  16. 16. xx GST Law and Analysis - with Conceptual Procedures CHAPTER 10  Exclusions and Exemptions under GST 10.1 EXCLUSIONS UNDER GST AND TREATMENT OF SPECIFIC GOODS190 10.1.1 Relevant provisions pertaining to the treatment of specific goods under the Constitutional Amendment Act 191 10.1.2 Chief Economic Adviser led Panel on Revenue Neutral Rate bats for wider tax base under GST 193 10.1.3 Excerpts of various Discussions on Exclusion of Products and Treatment of Specific Products 194 10.1.4 Negative list of services 196 10.2 EXEMPTIONS UNDER GST 198 10.2.1 Meaning of exemptions 199 10.2.2 Exemptions under the GST regime—high degree of precision required while determining exemptions 199 10.2.3 Zero rating v Exemption 199 10.2.4 CEA led Panel on RNR bats for lower exemptions under GST 201 10.3 TYPES OF EXEMPTIONS – BROAD OVERVIEW 202 10.3.1 Threshold exemption limits under GST 203 10.3.2 Goods/service specific exemption- Power to grant exemption from tax under GST 203 General exemptions in public interest by way of notification 204 Absolute exemptions are mandatory to be availed 206 Exemption in exceptional circumstances by way of special order 207 Explanation inserted within 1 year to have retrospective effect 208 Effective date of notification/order 208 10.3.3 Specified supplier’s exemption 209 Small scale suppliers 209 Deemed non-taxable person 209 Governmental and public sector bodies 209 10.3.4 Area based exemptions 210 10.4 REMISSION OF TAX ON SUPPLIES FOUND DEFICIENT IN QUANTITY 213 ANNEXURE - I: VARIOUS SUGGESTIONS/RECOMMENDATIONS MADE SO FAR ON GOODS/SERVICES SPECIFIC EXEMPTIONS 215 ANNEXURE - II: EXEMPTIONS AVAILABLE UNDER THE EUROPEAN UNION COUNCIL DIRECTIVE 222 CHAPTER 11  Input Tax Credit under GST – Availment and Utilisation 11.1 MEANING OF INPUT TAX CREDIT AND INPUT TAX 239 ITC allowed to every taxable person irrespective of a manufacturer/service provider/ seller 240
  17. 17. Detailed Content xxi ‘Business’ concept for availing ITC brought in GST 240 ITC available on CGST SGST on intra-state transactions and IGST on inter-state transactions 240 11.2 MEANING OF ‘INPUT’ UNDER GST 241 11.3 MEANING OF ‘INPUT SERVICE’ UNDER GST 242 11.4 MEANING OF ‘CAPITAL GOODS’ UNDER GST 242 11.5 MANNER OF TAKING ITC AND UTILISATION THEREOF 245 11.5.1 General Provisions 245 Only registered taxable person can claim ITC 245 Conditions specified in sec 35 to be complied for claiming ITC 246 Eligible amount of ITC shall be credited to electronic credit ledger 246 Matching concept of inward supplies of buyer with outward supplies of supplier 247 11.5.2 ITC on opening stock of inputs at the time of registration 247 11.5.3 ITC on opening stock of inputs in case of voluntary registration249 11.5.4 ITC on opening stock of inputs on opting out of composition scheme 250 11.5.5 ITC reversal on closing stock of inputs on switching to composition scheme 251 11.5.6 ITC reversal on closing stock of inputs on goods and/or services becoming absolutely exempt 251 11.5.7 Proportionate ITC to the extent used for business purposes admissible when partly used for other purposes 252 11.5.8 ITC restricted to the extent of taxable supplies including zero-rated supplies when partly used for non-taxable supplies including exempt supplies 253 11.5.9 Transfer of ITC in case of sale, merger, demerger, amalgamation etc. 254 11.5.10 Goods and services on which ITC shall not be admissible 255 11.5.11 ITC not allowed if depreciation claimed on tax component of cost of capital goods 260 11.5.12 Removal of capital goods 260 11.5.13 Availing ITC under GST – essential requirements 262 11.5.14 Time limit for availing ITC under GST 263 11.5.15 Recovery of ITC wrongly taken 265 11.5.16 Distribution of ITC by input service distributor 265 11.5.17 Manner of recovery of credit distributed in excess 267 Distribution of excess credit than available - Recoverable from ISD with interest 267
  18. 18. xxii GST Law and Analysis - with Conceptual Procedures Excess distribution of credit to one or more supplier - recoverable from such supplier with interest 268 11.5.18 Transfer of ITC 268 When CGST used for payment of IGST 268 When SGST used for payment of IGST 268 When IGST used for payment of CGST 268 When IGST used for payment of SGST 269 11.6 ILLUSTRATIONS TO UNDERSTAND AVAILMENT AND UTILISATION OF INPUT TAX CREDIT IN GST 270 11.6.1 Input tax credit when input goods are supplied within state 270 11.6.2 Input tax credit when supplier supplies goods outside the state 270 11.6.3 Input tax credit when supplier has credit of IGST and supplies goods within the state 272 11.6.4 Input tax credit when supplier has credit of IGST and supplies goods outside the state 273 11.6.5 Input tax credit when input goods not fully utilized 274 11.6.6 Input tax credit when supplier supplies goods intra and inter State 274 11.6.7 Input tax credit when supplier has credit of IGST and supplies goods within the State as well as outside State 276 11.6.8 Input tax credit when supplier supplies taxable as well as exempted goods 277 11.6.9 Input tax credit when supplier supplies goods within India and outside India 278 CHAPTER 12  Valuation under GST 12.1 VALUATION UNDER THE PRESENT REGIME OF INDIRECT TAXATION 279 12.1.1 Valuation of goods under the present regime of indirect taxation 280 12.1.2 Valuation of services under service tax 286 12.2 VALUATION UNDER THE GST REGIME 286 12.2.1 Consideration – Meaning, scope and importance 287 12.2.2 Glimpse of the provisions which deals with the valuation under the Model GST Law 289 12.2.3 Basis of valuation under the GST regime – Transaction Value 289 Inclusion in the transaction value 289 Exclusion from the transaction value 291 12.2.4 Valuation Rules – where transaction value is not determinable291
  19. 19. Detailed Content xxiii 12.2.5 Method of determination of value 292 (A) Transaction Value Method [r 3 of the Model GST Valuation Rules] 293 (B) Comparison Method [r 4 of the Model GST Valuation Rules] 294 (C) Computed Value Method [r 5 of the Model GST Valuation Rules] 294 (D) Residual Method [r 6 of the Model GST Valuation Rules] 294 12.2.6 Rejection of declared value 295 12.3 VALUATION IN CERTAIN CASES 301 12.3.1 Pure agent 301 12.3.2 Money changer 303 CHAPTER 13  Exports and Imports under GST 13.1 EXPORTS OF GOODS AND/OR SERVICES UNDER GST 305 13.1.1 Meaning of ‘exports of goods’ and ‘export of services’ under GST 306 Export of goods 306 Export of services 306 13.1.2 Exports under GST to be zero-rated 307 13.1.3 Deemed exports and its treatment under GST 307 Recommendation for treatment of supply of goods and/ or services to/by SEZs 309 Recommendation for treatment of supply of goods and/ or services to/by EOUs 309 13.2 IMPORT OF GOODS AND/OR SERVICES UNDER GST 309 13.2.1 Meaning of ‘import of goods’ and ‘import of services’ under GST 310 13.2.2 Import of goods and/or services – to be treated as inter- state supplies under GST 312 13.2.3 Service tax, CVD and SAD are likely to be subsumed under GST 312 13.2.4 Duties on import of goods – Present regime v GST regime 312 13.2.5 No GST on importation of services for personal use only up to specified amount 313 13.2.6 GST on importation of services in the course or furtherance of business irrespective of any threshold amount 313 13.2.7 Reporting import transactions in monthly return 313 13.2.8 Major customs valuation principles adopted for goods and/ or services under GST – a new mechanism for service sector 313
  20. 20. xxiv GST Law and Analysis - with Conceptual Procedures 13.3 IMPACT ON FOREIGN TRADE POLICY (FTP) 313 Payment of taxes under GST by way of debit to export scrips should be allowed 314 CHAPTER 14  Place of Supply of Goods and/or Services in GST 14.1 INTRODUCTION 316 14.2 GST - A DESTINATION BASED CONSUMPTION TAX: DETERMINING PLACE OF CONSUMPTION IS CRUCIAL 317 14.2.1 Inter-state supply of goods: Present regime v GST regime 318 14.2.2 Import of goods: Present regime v GST regime 319 14.2.3 Inter-state supply of services: Present regime v GST regime 319 14.3 DETERMINATION OF PLACE OF SUPPLY FOR GOODS AND/OR SERVICES 321 14.3.1 Place of supply of goods – Section 5 of the Model IGST Act 321 Meaning of key terms 322 Place of supply when movement of goods is involved 323 Place of supply when goods are supplied by transfer of documents during movement of goods 324 Place of supply when movement of goods is not involved 325 Place of supply when goods are assembled or installed at site 326 Place of supply when goods are supplied on board a conveyance327 14.3.2 Place of supply of services – Section 6 of the Model IGST Act 327 Meaning of key terms 328 General Rule of place of supply of services 334 Place of supply for immovable property related services or lodging in boat or vessel 335 Place of supply of performance based services like restaurant, beauty treatment, health services etc. 340 Place of supply of training and performance appraisal services342 Place of supply in case of admission to events 344 Place of supply in case of organisation of events assigning sponsorship of such events 345 Place of supply of goods transportation services 348 Place of supply of passenger transportation services 350 Place of supply of services on board a conveyance 353 Place of supply of telecommunication services including data transfer, broadcasting, cable and DTH services 354 Place of supply of banking and other financial services 357 Place of supply of insurance services 358
  21. 21. Detailed Content xxv Place of supply of advertisement services to the central government, state government, a statutory body or a local authority 358 CHAPTER 15  Time of Supply (Point of Taxation) of Goods and/or Services in GST 15.1 INTRODUCTION 361 15.2 CONCEPT OF TIME OF SUPPLY/POINT OF TAXATION 362 15.3 TIME OF SUPPLY FOR GOODS 367 15.3.1 Time of supply – general provision 368 15.3.2 Time of supply – continuous supply of goods 371 15.3.3 Time of supply of goods - when GST is payable by recipient under the reverse charge mechanism (RCM) 372 15.3.4 Time of supply – where goods are being sent or taken on approval or sale or return or similar terms 374 15.3.5 Time of supply of goods – when not possible to determine under the above provisions 375 15.4 TIME OF SUPPLY FOR SERVICES 376 15.4.1 Time of supply of services – general provision 377 15.4.2 Time of supply – continuous supply of services 380 15.4.3 Time of supply - when GST is payable under RCM 383 15.4.4 Time of supply – where supply of services ceases under a contract before the completion of the supply 385 15.4.5 Time of supply – When not possible to determine under the above provisions 385 15.5 CHANGE IN THE RATE OF TAX IN RESPECT OF SUPPLY OF SERVICES 386 15.5.1 Where taxable service provided before the change in effective rate of tax 386 15.5.2 Where taxable service provided after the change in effective rate of tax 387 15.6 TIME OF SUPPLY - WHEN NEW SERVICES BECOME TAXABLE 389 CHAPTER 16  Registration under GST 16.1 GLIMPSE OF PROVISIONS PERTAINING TO REGISTRATION UNDER GST 392 16.2 REGISTRATION NUMBER/UNIQUE IDENTITY NUMBER 393 16.2.1 Multiple registrations within a state allowed subject to specific stipulations 394 16.2.2 Exception where Unique Identity Number will be granted instead of registration number 395 16.3 PERSONS WHO ARE REQUIRED TO GET REGISTERED 397 16.3.1 Classes of registration 399
  22. 22. xxvi GST Law and Analysis - with Conceptual Procedures A. Supplier whose aggregate turnover exceeds threshold limit399 B. Migration of existing taxpayers to GST 403 C. Transfer of business, whether on account of succession or otherwise, to another person as a going concern 403 D. Transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may be, de-merger of two or more companies by an order of a High Court 403 E. Mandatory registration 403 F. Voluntary registration 406 G. Registration in case of enforcement cases 406 16.4 PLACE OF REGISTRATION 407 16.5 PROCEDURE FOR REGISTRATION 407 16.5.1 Registration procedures for new applicant 407 16.5.2 Summarization of procedure for registration 419 16.6 EFFECT OF REGISTRATION APPLICATION FILED WITHIN 30 DAYS OR OTHERWISE 420 16.7 WHERE PERSON FAILS TO OBTAIN REGISTRATION 421 16.8 PROCEDURES FOR GRANTING/REJECTING REGISTRATION OR UIN 421 16.9 PROVISION FOR A PERSON OPTING FOR COMPOSITION SCHEME 422 16.10 SPECIAL PROVISIONS RELATING TO CASUAL TAXABLE PERSON AND NON-RESIDENT TAXABLE PERSON 424 16.11 FACILITATION CENTRE AND TAX RETURN PREPARER SCHEME 426 16.11.1 Tax return preparer 426 16.11.2 Facilitation Centres 427 16.12 AMENDMENT OF REGISTRATION 427 16.13 CANCELLATION OF REGISTRATION 429 16.14 REVOCATION OF CANCELLATION OF REGISTRATION 432 16.15 OTHER POINTS - BLACK LISTING OF DEALERS 433 CHAPTER 17  Payment of Tax under GST 17.1 INTRODUCTION 435 17.2 PROVISIONS FOR PAYMENT OF TAX, INTEREST, PENALTY ETC. UNDER GST 437 Two types of challans i.e. one for GST and other for non-GST would be used under GST 437 Glimpse of provision pertaining to payment of tax under the Model GST Law 438 17.2.1 Payment of tax, interest, penalty and other amounts 438
  23. 23. Detailed Content xxvii Amount credited to the electronic cash ledger and its utilization 438 Amount credited to the electronic credit ledger and its utilization 439 Refund of balance in the cash or credit ledger 439 All liabilities of a taxable person shall be recorded and maintained in an electronic register 439 17.2.2 Ascertainment of the liability of IGST, CGST or SGST 439 17.2.3 Due date for payment of tax 440 17.2.4 Order of discharging tax and other dues 441 17.2.5 Deemed passing of incidence of tax to the recipient immediately on payment of tax 441 17.2.6 Meaning of the expression ‘tax dues’ 442 17.3 PAYMENT PROCESSES UNDER GST 442 17.3.1 Modes of payment 442 17.3.2 Payment across departmental counter 459 17.3.3 Penalty mechanism for defaulting banks 460 17.3.4 Banking arrangement 460 17.3.5 Proposed accounting system under GST 461 17.3.6 Reconciliation 463 Reconciliation by GSTN 463 Reconciliation by accounting authorities 463 Resolution of reconciliation outcomes (i.e. discrepancies noted during the reconciliation process) 463 17.3.7 Recording by tax authorities 464 17.3.8 Challan 464 All modes of payment to use system generated electronic challan464 Modes of creation of tax challan 465 17.3.9 RBI to play the role of aggregator 467 17.3.10 Summarization of the payment process 468 17.4 INTEREST ON DELAYED PAYMENT OF TAX 468 17.5 INTEREST IN CASE OF AN UNDUE OR EXCESS CLAIM OF INPUT TAX CREDIT 468 17.6 PAYMENT OF TAX DEDUCTION AT SOURCE (TDS) 468 CHAPTER 18  Returns under GST 18.1 FILING OF RETURNS UNDER PRESENT INDIRECT TAXATION REGIME 472 18.2 FILING OF RETURNS UNDER GST 474 18.2.1 Who is required to file return? 474 18.2.2 Legal obligation of a taxable person for filing GST return 475
  24. 24. xxviii GST Law and Analysis - with Conceptual Procedures 18.2.3 Types of returns required to be filed under GST 475 18.2.4 First return 476 18.2.5 Furnishing details of outward supplies made by registered taxable person [GSTR-1] 477 18.2.6 Furnishing details of inward supplies made by taxpayer [GSTR-2] 486 18.2.7 Monthly Return (Periodic) [GSTR-3] 492 18.2.8 Quarterly return by a registered taxable person paying tax under composition scheme [GSTR-4] 495 18.2.9 Return by non-resident foreign taxpayers [GSTR-5] 497 18.2.10 Monthly return by ISD [GSTR-6] 497 18.2.11 Monthly return by a registered taxable person who is required to deduct tax at source [GSTR-7] 499 18.2.12 Annual Return [GSTR-8] 500 18.2.13 Final return (who applies for cancellation of registration) 501 18.2.14 Summarization of the returns required to be filed by each taxpayer 502 18.2.15 Other relevant provisions 502 Return cannot be filed unless valid previous period returns were filed 502 Due date of payment of tax 502 Return to be treated as invalid return for allowing ITC if tax not paid 503 Even ‘Nil return’ required to be filed 503 No revision of monthly/quarterly return 503 18.2.16 Claim of ITC and provisional acceptance thereof 504 No utilization of credit allowed unless valid return has been filed 505 18.2.17 Matching, reversal and reclaim of ITC 505 18.2.18 Matching, reversal and reclaim of reduction in output tax liability 507 18.2.19 Where will the taxpayer file return? 509 18.2.20 Steps for return filing 510 18.2.21 Generation of acknowledgement number on submission of return 511 18.2.22 Contents of Invoice level information to be captured in the Return 511 18.2.23 Processing of return 515 18.2.24 Notice to return defaulter 516 18.2.25 Levy of late fees 516 18.2.26 Tax return preparers 517 18.2.27 Summarization - periodicity of return filing 518
  25. 25. Detailed Content xxix CHAPTER 19  Refunds in GST 19.1 MEANING OF THE TERM ‘REFUND’ 524 19.2 SITUATIONS WHERE REFUNDS WOULD ARISE 524 (A) Excess payment of tax due to mistake or inadvertence 525 (B) Export (including deemed export) of goods and/or services under claim of rebate or refund of accumulated credit of tax when goods and/or services are exported 526 (C) Finalization of provisional assessment 534 (D) Refund of pre-deposit for filing Appeal including refund arising in pursuance of an Appellate Authority’s order 535 (E) Payment of tax during investigation but no/reduced liability arises at the time of finalization of investigation/ adjudication536 (F) Refund for tax payment on purchase by UN Bodies, supplies to CSD Canteens, Para Military Forces Canteens, etc. 538 (G) Tax credit on inputs used for manufacturing/generation/ production/creation of tax free supplies or non- GST supplies 539 (H) Refund of carry forward input tax credit 540 (I) Refund on account of year end or volume based incentives provided by the supplier through credit notes 541 (J) Tax refund for International Tourists 542 19.3 REFUND FORMS 543 19.4 TIME PERIOD FOR FILING OF REFUND 543 19.5 RELEVANT DATE FOR FILING REFUND APPLICATION 544 19.5.1 Analysis of relevant date under Draft Business Process for Refund and the Model GST Law 546 19.6 APPLICATION SHALL BE ACCOMPANIED BY THE RELEVANT DOCUMENT AND DECLARATION 550 19.7 NUMBER OF COPIES OF APPLICATIONS TO BE FILED 551 19.8 REQUIREMENT FOR TAXPAYER TO KEEP A COPY OF REFUND APPLICATION FOR THE PRESCRIBED PERIOD 551 19.9 RECEIPT OF REFUND APPLICATION AND PROCEDURE FOR GENERATING PROOF OF RECEIPT OF APPLICATION FOR REFUND 551 19.10 PROCEDURE AND THE TIME WITHIN WHICH PRELIMINARY SCRUTINY OF SUBMISSION OF THE RELEVANT DOCUMENTS IS CARRIED OUT 553 19.11 PROCEDURE FOR DEALING WITH REFUND THEREAFTER INCLUDING EXAMINATION OF PRINCIPLE OF “UNJUST ENRICHMENT” 553
  26. 26. xxx GST Law and Analysis - with Conceptual Procedures 19.12 MINIMUM AMOUNT BELOW WHICH REFUND SHALL NOT BE GRANTED 554 19.13 SANCTIONING OF REFUND 554 19.14 TIME LIMIT FOR PASSING ORDER 557 19.15 VERIFICATION AND CONTROL (REFUND AUDIT) 558 19.16 INTEREST ON DELAYED REFUNDS 561 19.17 ADJUSTMENT OF REFUND IF REGISTERED TAXABLE PERSON IS IN DEFAULT 562 19.18 REFUND CAN BE WITHHELD WHERE REFUND IS SUBJECT TO APPEAL OR FURTHER PROCEEDING AND LIKELY TO ADVERSELY AFFECT THE REVENUE 563 19.19 RECOVERY OF ERRONEOUS REFUND 563 19.20 CONSUMER WELFARE FUND 563 19.21 UTILIZATION OF THE FUND 563 19.22 TRANSITIONAL PROVISIONS 564 CHAPTER 20  Tax Invoice, Credit and Debit Notes 20.1 INVOICING ASPECTS UNDER PRESENT INDIRECT TAXES REGIME 567 20.2 INVOICING ASPECTS UNDER GST 571 20.2.1 Invoicing for supply of taxable goods 571 20.2.2 Invoicing for supply of taxable services 572 20.2.3 Provision of issuance of revised invoice against the invoice already issued 572 20.2.4 Certain cases where a bill of supply shall be issued instead of tax invoice 573 20.2.5 Invoicing by input service distributor (“ISD”) 573 20.2.6 ‘Tax invoice’ to include ISD document, supplementary or revised invoice 573 20.2.7 Amount of tax to be indicated in tax invoice and other documents574 20.3 CREDIT AND DEBIT NOTES 575 20.3.1 Credit note 576 20.3.2 Debit note 577 20.3.3 Details of credit and debit notes to be given in return 577 CHAPTER 21  Accounts, Records and Presumption as to Documents 21.1 MAINTENANCE OF ACCOUNTS AND RECORDS UNDER THE PRESENT INDIRECT TAXATION REGIME 579 21.2 ACCOUNTS AND RECORDS UNDER GST 583 21.2.1 Accounts and other records 583 21.2.2 Period of retention of accounts 588
  27. 27. Detailed Content xxxi 21.3 PRESUMPTION AS TO DOCUMENTS 590 21.3.1 Presumption as to documents in certain cases 590 21.3.2 Admissibility of micro films, facsimile copies of documents and computer printouts as documents and as evidence 591 CHAPTER 22  Journal Entries under GST 22.1 OVERVIEW OF SCENARIOS 595 22.2 BASIC JOURNAL ENTRIES 596 22.3 SCENARIO WITH ILLUSTRATION 600 22.3.1 Purchase and supply of goods and services - within the state (intra-state supply of goods and services) 600 22.3.2 Purchase and supply of goods and services - outside the state (inter-state supply of goods and services) 602 22.3.3 Purchase of goods and services - within the state and supply of goods and services - outside the state 604 22.3.4 Purchase of goods and services - outside the state and supply of goods and services - within the state 606 22.3.5 Purchase of goods and services – within and outside the state and supply of goods and services – within and outside the state 609 22.3.6 Export of goods and services 612 CASE I. Purchase of goods and services - within the state and export of such goods and services 612 CASE II. Purchase of goods and services - outside the state and export of such goods and services 614 CASE III. Purchase of goods and services–within and outside the state and export of such goods and services 616 22.3.7 Import of goods and services 618 CASE I. Import of goods and services and supply of goods and services – within the state 618 CASE II. Import of goods and services and supply of goods and services – outside the state 622 CASE III. Import of goods and services and supply of goods and services – within and outside the state 625 22.3.8 Import of goods and services and export of goods and services629 22.3.9 Miscellaneous entries 632 CHAPTER 23  Assessments and Audit 23.1 TYPES OF ASSESSMENT 635 23.1.1 Self-assessment 635 23.1.2 Provisional assessment 638
  28. 28. xxxii GST Law and Analysis - with Conceptual Procedures 23.1.3 Best judgement assessment 641 Assessment of non- filers of return 641 Assessment of unregistered persons 643 23.1.4 Summary assessment in certain special cases 643 23.1.5 Re-assessment 643 23.1.6 General provisions 644 Scrutiny of returns 644 Assessment proceedings, etc. not to be invalid on certain grounds 644 23.2 AUDIT 646 23.2.1 Meaning of term ‘Audit’ 648 23.2.2 Audit by tax authorities 648 23.2.3 Special audit 652 Notice of special audit 652 Time period for submission of audit report 652 Extension of time period for submission of audit report 652 Special audit can be conducted irrespective of accounts already audited under any other provision or law 653 Opportunity of being heard to be given before using the findings of special audit in any proceedings 653 Expenses incidental etc., to be determine and paid by the commissioner 653 Initiation of action against the taxable person 653 CHAPTER 24  Demands and Recovery 24.1 DEMANDS AND RECOVERY 656 24.1.1 Determination of tax not paid or erroneously refunded etc. for any reason other than fraud or any wilful- misstatement or suppression of facts 657 24.1.2 Determination of tax not paid or erroneously refunded etc. by reason of fraud or any wilful- misstatement or suppression of facts 666 24.1.3 General provisions relating to demand of tax 677 24.1.4 Provisions of sec 51(A), sec 51(B), sec 51(C) shall apply, mutatis mutandis, to the recovery of interest 680 24.1.5 Tax collected but not deposited with the central or state government 680 24.1.6 Tax wrongfully collected and deposited with the central or a state government 683 24.1.7 Recovery of tax 683 24.1.8 Payment of tax and other amount in installments 688 24.1.9 Transfer of property to be void in certain cases 688 24.1.10 Tax to be first charge on property 689
  29. 29. Detailed Content xxxiii 24.1.11 Provisional attachment to protect revenue in certain cases 689 24.1.12 Continuation of certain recovery proceedings 690 24.2 LIABILITY TO PAY IN CERTAIN CASES 691 24.2.1 Liability in case of transfer of business 691 24.2.2 Liability in case of amalgamation/merger of companies 692 24.2.3 Liability in case of company in liquidation 693 24.2.4 Liability of partners of firm to pay tax 694 24.2.5 Liability of guardians, trustees etc. 695 24.2.6 Liability of Court of Wards etc. 696 24.2.7 Liability if a person liable to pay tax dies 697 24.2.8 Liability in case of Hindu Undivided Family or Association of Person 697 CHAPTER 25  Inspection, Search, Seizure and Arrest 25.1 MEANING OF IMPORTANT TERMS 701 25.2 POWER OF INSPECTION, SEARCH AND SEIZURE 703 25.2.1 Power to search and seize goods, documents or books or things 705 25.2.2 Power to seal or break open the door of any premises, etc. during seizure operation 705 25.2.3 Person entitled to make copies or take extracts of seized documents 706 25.2.4 Seized goods to be returned, if no notice is given within 60 days of seizure or within such extended period 706 25.2.5 Disposing of seized perishable goods or goods of hazardous nature etc., by the proper officer 706 25.2.6 Preparation of inventory of seized perishable goods or goods of hazardous nature etc., by proper officer 707 25.2.7 Applicability of provisions of the Code of Criminal Procedure707 25.3 INSPECTION OF GOODS IN MOVEMENT 708 25.3.1 Person in charge of conveyance to carry prescribed documents, where the value of goods is more than INR 50,000/- 708 25.3.2 Production of documents for verification to proper officer 708 25.4 POWER TO ARREST 708 25.4.1 Authorization to arrest 708 25.4.2 Person arrested for cognizable offence to be produced before magistrate within 24 hours of arrest 709 25.4.3 Power to release a person on bail in case of non- cognizable and bailable offence 709 25.4.4 Arrest in accordance with provision of the Code of Criminal Procedure 709
  30. 30. xxxiv GST Law and Analysis - with Conceptual Procedures 25.5 POWER TO SUMMON PERSONS TO GIVE EVIDENCE AND PRODUCE DOCUMENTS 710 25.5.1 Power to summon persons 710 25.5.2 Persons summoned shall be bound to attend, either in person or by authorized representative and to state truth 710 25.5.3 Deemed judicial proceedings 711 25.6 ACCESS TO BUSINESS PREMISES 711 25.6.1 Power to access business premises to inspect books of account, documents etc. 711 25.6.2 Submission of records for scruitiny 711 25.7 OFFICERS REQUIRED TO ASSIST CGST/SGST OFFICERS 712 CHAPTER 26  Offences, Penalties, Prosecution and Compounding 26.1 OFFENCES AND PENALTIES UNDER GST 716 26.1.1 Specific offences and penalties 716 26.1.2 General penalty 721 26.1.3 Summarization of the penalty provisions in respect of offences committed 722 26.1.4 General disciplines related to penalty 723 26.1.5 Detention of goods and conveyances and levy of penalty 724 26.1.6 Confiscation of goods and levy of penalty 726 26.1.7 Confiscation of conveyances 727 26.1.8 Confiscation or penalty not to interfere with other punishments 727 26.2 PROSECUTION AND COMPOUNDING OF OFFENCES 727 26.2.1 Prosecution 728 26.2.2 Cognizance of offences 740 26.2.3 Presumption of culpable mental state 740 26.2.4 Relevancy of statements under certain circumstances 741 26.2.5 Offences by companies and certain other persons 741 26.2.6 Compounding of offences 742 CHAPTER 27  Appeals and Revision 27. 1 HIERARCHY OF APPELLATE AUTHORITY UNDER GST 747 27.2 FIRST APPELLATE AUTHORITY 748 27.2.1 Revisional powers of the commissioner 755 27.3 APPELLATE TRIBUNAL 758 27.3.1 Constitution of the National Appellate Tribunal 758 27.3.2 Appeals to the appellate tribunal 759 27.3.3 Orders of appellate tribunal 764 27.3.4 Procedure of filing appeal to appellate tribunal 766 27.4 COMMON PROVISIONS FOR CGST/SGST 768 27.4.1 Interest on delayed refund of pre-deposit 768
  31. 31. Detailed Content xxxv 27.4.2 Appearance by authorized representatives 769 27.5 HIGH COURT 772 27.5.1 Appeal to the high court 772 27.5.2 Power of the high court to formulate the question of law, hear appeal and give decision 773 27.5.3 Determination of issues by high court 773 27.5.4 Appeal to be heard by bench of at least two judges 774 27.5.5 Action to be taken on basis of certified copy of the judgement 774 27.5.6 Applicability of the Code of Civil Procedure, 1908 774 27.6 SUPREME COURT 774 27.6.1 Appeal to the Supreme Court 774 27.6.2 Hearing before the Supreme Court 775 27.6.3 Cost of appeal 775 27.6.4 Action to be taken on basis of certified copy of the judgement 775 27.7 OTHER COMMON PROVISIONS 776 27.7.1 Sums due to be paid notwithstanding appeal, etc. 776 27.7.2 Exclusion of time taken for copy of the order 776 27.7.3 Appeal not to be filed in certain cases 776 27.7.4 Non appealable decisions and orders 777 CHAPTER 28  Advance Ruling and Settlement of Cases 28.1 ADVANCE RULING 780 28.1.1 Who can be an applicant under advance ruling provisions? 781 28.1.2 Application and fee for advance rulings 783 28.1.3 Question for which advance ruling can be sought 783 28.2 CONSTITUTION OF AUTHORITY AND APPELLATE AUTHORITY FOR ADVANCE RULING 784 28.2.1 Authority for advance ruling 784 28.2.2 Appellate authority for advance ruling 785 28.3 POWERS OF AUTHORITY AND APPELLATE AUTHORITY 786 28.3.1 Powers of Civil Court as given under the Code of Civil Procedure, 1908 [Section 104(1) of the Model CGST/SGST Act] 786 28.3.2 Powers of civil court under the Code of Criminal Procedure and proceedings to be treated as judicial proceedings under the Indian Penal Code, 1860 [Section 104(2) of the Model CGST/SGST Act] 787 28.3.3 Power to regulate own procedure 787 28.4 PROCEDURE ON RECEIPT OF APPLICATION FOR ADVANCE RULING 787 28.5 APPEAL TO THE APPELLATE AUTHORITY 789
  32. 32. xxxvi GST Law and Analysis - with Conceptual Procedures 28.6 ORDERS OF THE APPELLATE AUTHORITY 789 28.7 APPLICABILITY OF ADVANCE RULING 790 28.8 RECTIFICATION OF ORDER OF ADVANCE RULING 791 28.9 CIRCUMSTANCES WHEN THE ORDER OF ADVANCE RULING WILL BE VOID 792 28.10 SETTLEMENT OF CASES 792 28.10.1 Constitution of National Goods and Services Tax Settlement Commission793 28.10.2 Jurisdiction of settlement commission 794 28.10.3 Decisions to be by majority 795 28.10.4 Application for settlement of cases 796 Who can file application for settlement of cases? 797 Format of application and information to be contained therein797 Cases when an application cannot be filed to settlement commission?797 28.10.5 Procedure for settlement on receipt of an application under sec 15 of the Model IGST Act 798 28.10.6 Order by the Settlement Commission 800 28.10.7 Powers of the Settlement Commission 802 To order provisional attachment to protect revenue 802 To reopen completed proceedings 803 To grant immunity from prosecution and penalty 803 To send a case back to the IGST officer 804 Powers of a civil court for purpose of discovery, inspection, issuing commissions etc. 805 Power to regulate own procedure 806 28.10.8 Bar on subsequent application for settlement in certain cases 806 CHAPTER 29  Transitional Provisions in GST 29.1 PRESENT CENTRAL/STATE OFFICERS TO BE DEEMED GST OFFICERS 810 29.2 MIGRATION OF EXISTING TAXPAYERS TO GST 811 29.3 STATUS OF EXISTING INPUT CREDIT LYING UNDER CENVAT AND VAT 816 29.3.1 Amount of cenvat credit carried forward in a return to be allowed as input tax credit 817 29.3.2 Unavailed cenvat credit on capital goods, not carried forward in a return, to be allowed in certain situations 819 29.3.3 Credit of eligible duties and taxes in respect of inputs held in stock to be allowed in certain situations 823
  33. 33. Detailed Content xxxvii 29.3.4 Credit of eligible duties and taxes on inputs held in stock to be allowed to a taxable person switching over from composition scheme 828 29.3.5 Amount payable in the event of a taxable person switching over to composition scheme 831 29.4 Exempted goods returned to the Place of Business on or after the Appointed Day 833 29.5 Duty paid goods returned to the Place of Business on or after the Appointed Day 834 29.6 Transitional provisions for inputs and semi-finished and finished goods lying with Job Worker on Appointed Day 835 29.6.1 Inputs removed for job work and returned on or after the appointed day 835 29.6.2 Semi-finished goods removed for job work and returned on or after the appointed day 836 29.7 FINISHED GOODS REMOVED FOR CARRYING OUT CERTAIN PROCESSES AND RETURNED ON OR AFTER THE APPOINTED DAY 838 Direct removal of goods after processing from such other premises 839 29.8 ONGOING CONTRACTS/AGREEMENTS, PURCHASE ORDERS, WORK ORDERS 839 29.8.1 Issue of supplementary invoices, debit or credit notes where price is revised in pursuance of a contract 839 29.8.2 Progressive or periodic supply of goods or services 841 29.8.3 Treatment of retention payments 842 29.8.4 Treatment of long term construction/works contracts 844 29.9 PENDING REFUND CLAIMS TO BE DISPOSED OF UNDER EARLIER LAW 846 Amount accruing to be paid in cash (CGST)/ refunded in accordance with State VAT laws (SGST) 846 Rejected portion of refund claim shall lapse 848 29.10 PENDING LITIGATIONS 848 29.10.1 Claim/recovery of Cenvat credit to be disposed of under the earlier law 849 29.10.2 Finalization of proceedings relating to output duty liability 850 29.10.3 Treatment of the amount recovered or refunded in pursuance of assessment or adjudication proceedings 851 29.10.4 Treatment of the amount recovered or refunded pursuant to revision of returns 851 29.11 CREDIT DISTRIBUTION OF SERVICE TAX BY ISD 852 29.12 TAX PAID ON GOODS/CAPITAL GOODS LYING WITH AGENTS TO BE ALLOWED AS CREDIT 852
  34. 34. xxxviii GST Law and Analysis - with Conceptual Procedures 29.13 TREATMENT OF BRANCH TRANSFERS 853 29.14 GOODS SENT ON APPROVAL BASIS RETURNED ON OR AFTER THE APPOINTED DAY 853 29.15 NO DEDUCTION OF TAX AT SOURCE ON PAYMENT RECEIVED AFTER APPOINTED DAY 854 29.16 IMPORT OF SERVICES OR INTER-STATE SUPPLY OF GOODS AND/OR SERVICES MADE ON OR AFTER THE APPOINTED DAY 854 29.17 REPEAL AND SAVING 856 29.17.1 Excise and sales tax to continue on few products 856 29.17.2 Acts to be repealed 858 Transitional provisions under the Constitution (101st Amendment) Act, 2016 enables centre and states to continue their levies under existing laws for a period of 1 year 859 29.18 UNITS ENJOYING INCENTIVES / CONCESSIONS / TAX HOLIDAYS 860 29.18.1 Claiming total exemption/exemption on value addition only/exemption by way of deferment in payment of state VAT or CST 860 29.18.2 Continuation of exemption by export oriented units (EOU) 861 29.19 OTHER MATTERS ON WHICH GST MAY HAVE IMPACT 861 29.19.1 Public sector undertakings (PSUs) 861 29.19.2 Units located in exclusive zones 862 29.19.3 Natural resource based industries 862 29.20 CREATING AWARENESS/IMPARTING TRAINING OR EDUCATION ON GST 862 29.20.1 Assessees 863 29.20.2 Tax administrators at the state and the central level 863 29.20.3 Tax professionals, return preparers and other professionals such as tax practitioners, advocates 863 29.20.4 Consumers of goods and services 863 29.20.5 Policy makers 863 29.20.6 State governments 863 CHAPTER 30  Classification, Rates and Miscellaneous provisions 30.1 CLASSIFICATION UNDER GST 866 30.1.1 Need for Classification 866 30.1.2 Classification of goods under GST 867 General rules of classification 868 Non-statutory principles 869 30.1.3 Classification of services under the GST 870 30.2 REVENUE NEUTRAL RATE 872 30.2.1 Importance of RNR 872
  35. 35. Detailed Content xxxix 30.2.2 Factors effecting determination of RNR 873 30.2.3 Recommendation of the select panel of Rajya Sabha 874 30.2.4 CEA led panel recommends RNR at 15%-15.5% - The report bats for lower exemptions and higher threshold for GST 875 30.3 MISCELLANEOUS PROVISIONS 878 30.3.1 GST compliance rating 879 30.3.2 Furnishing of information return 880 30.3.3 Power to collect statistics 883 30.3.4 Disclosure of information required under section 119 884 30.3.5 Test purchase of goods and/or services 885 30.3.6 Drawal of samples 885 30.3.7 Burden of proof 886 30.3.8 Persons discharging functions under the act shall be deemed to be public servants 887 30.3.9 Indemnity – no legal proceeding against any goods and services tax officer 887 30.3.10 Disclosure of information by a public servant 887 30.3.11 Publication of information respecting persons in certain cases 889 30.3.12 Rectification of mistakes or errors apparent from record 891 30.3.13 Bar of jurisdiction of civil courts 892 30.3.14 Levy of fees 893 30.3.15 Power of central (or state) government to make rules 893 30.3.16 General power to make regulations 897 30.3.17 Delegation of powers 897 30.3.18 Instructions to GST officers 897 30.3.19 Removal of difficulties 898 30.3.20 Service of notice in certain circumstances 898 30.3.21 Rounding off of tax etc. 900 30.3.22 Effect of amendments, etc., of rules, notifications or orders 900 30.3.23 Publication of rules and notifications and laying of rules before parliament/state legislature 901 30.3.24 Application of certain provisions of the CGST Act, 2016 901 30.3.25 Power to make rules 901 30.3.26 Interest on delayed payment of tax 902 30.3.27 Tax wrongfully collected and deposited with the central or a state government 902 CHAPTER 31  Robust Information Technology Infrastructure and GST 31.1 INTRODUCTION 903 31.2 NEED FOR ROBUST IT INFRASTRUCTURE AND COMPUTERIZATION 904
  36. 36. xl GST Law and Analysis - with Conceptual Procedures 31.3 IMPORTANT ISSUES FOR COMPREHENSIVE IT INFRASTRUCTURE 905 31.4 BENEFITS OF AN INTEGRATED IT INFRASTRUCTURE 906 31.5 ESTABLISHMENT OF GOODS AND SERVICES TAX NETWORK (GSTN) 907 31.6 RECOMMENDATION OF THE SELECT COMMITTEE ON CONSTITUTION OF GSTN AND IT PREPAREDNESS 907 CHAPTER 32  Impact of GST in General and on Various Sectors 32.1 IMPACT OF GST – GENERALLY 928 32.1.1 Impact of GST on manufacturers 928 32.1.2 Impact of GST on service providers 931 32.1.3 Impact of GST on traders 933 32.2 IMPACT OF GST ON SPECIFIC SECTORS 935 32.2.1 Alcohol industry 935 32.2.2 Petroleum industry 938 32.2.3 Tobacco industry 941 32.2.4 Real estate industry 943 32.2.5 Power – Electricity sector 947 32.2.6 Fast moving consumer goods (FMCG) industry 950 32.2.7 Textile industry 953 32.2.8 Financial services industry 955 32.2.9 Agricultural sector 958 32.2.10 Telecommunication industry 961 32.2.11 Transport/Logistics sector 965 32.2.12 Entertainment/media industry 967 32.2.13 Pharmaceutical industry 969 32.2.14 Automobile sector 971 32.2.15 Cement industry 973 CHAPTER 33  Electronic Commerce 33.1 INTRODUCTION 974 33.2 TYPES OF E-COMMERCE 974 33.2.1 Business-to-Business (B2B) 974 33.2.2 Business-to-Consumer (B2C) 975 33.2.3 Business-to-Government (B2G) 975 33.2.4 Consumer-to-Consumer (C2C) 976 33.2.5 Consumer-to-Business (C2B) 976 33.2.6 M-commerce (mobile commerce) 976 33.3 E-COMMERCE BUSINESSES BROADLY OPERATE UNDER TWO MODELS 977 33.3.1 Market place model 977 33.3.2 Fulfilment center model 977
  37. 37. Detailed Content xli 33.4 TAX TREATMENT OF E-COMMERCE TRANSACTION UNDER THE PRESENT INDIRECT TAXATION REGIME 978 33.5 KEY ISSUES FACED BY E-COMMERCE 978 33.5.1 Levy of Service tax on e-commerce transactions 978 33.5.2 Levy of VAT/CST on e-commerce transactions 979 33.5.3 Levy of entry tax on online purchases 980 33.5.4 Restrictions on claim of credit by suppliers 980 33.6 SPECIFIC PROVISION FOR E-COMMERCE UNDER GST 980 33.7 MEANING OF SOME OF THE RELEVANT TERMS 981 33.7.1 Aggregator 981 33.7.2 Brand name or trade name 981 33.7.3 Branded services 981 33.7.4 Electronic commerce 981 33.7.5 Electronic commerce operator 981 33.8 COLLECTION OF TAX AT SOURCE BY E-COMMERCE OPERATOR 982 33.8.1 Mode of recovery 982 33.8.2 Time limit for payment 982 33.8.3 Monthly Statements 982 33.8.4 Deposition of amount shall be deemed to be a payment of tax on behalf of the concerned supplier 983 33.8.5 Matching of the statement of operator and supplier 983 33.8.6 Discrepancy between details of operator and supplier 983 33.8.7 Where any amount has been added to the output tax liability of the supplier, he is liable to pay tax along with interest 983 33.8.8 Power of any authority not below the rank of Joint Commissioner to ask for details from the operator 984 33.8.9 Operator shall furnish details within 5 working days 984 33.8.10 Penalty if the operator fails to furnish the information as required by the notice 984 33.9 CHALLENGES LIKELY TO BE FACED BY E-COMMERCE SECTOR UNDER GST 984 CHAPTER 34  Job Work 34.1 INTRODUCTION 990 34.2 PROVISIONS UNDER PRESENT INDIRECT TAXES REGIME 991 34.3 SPECIFIC PROVISION FOR JOB WORK UNDER GST 993 34.4 CONCEPT OF JOB WORK UNDER GST 993 34.5 SPECIAL PROCEDURE FOR REMOVAL OF GOODS FOR JOB WORK994 34.6 TAKING INPUT TAX CREDIT IN RESPECT OF INPUTS SENT FOR JOB WORK 996 34.6.1 Input tax credit of inputs sent to job worker 996 Provision under the present regime 996
  38. 38. xlii GST Law and Analysis - with Conceptual Procedures Provision under the Model GST Law 996 34.6.2 Input tax credit of capital goods sent to job worker 996 Provision under the present regime 996 Provision under the Model GST Law 997 34.6.3 If the inputs or capital goods are not received back by the “principal” within the time specified 997 34.6.4 Snapshot of job work in present regime v job work in GST 1000 34.7 TRANSITIONAL PROVISIONS 1001 CHAPTER 35  Journey of GST in India 35.1 STATUS OF JOURNEY AS ON DATE 1002 35.2 SNAPSHOT OF IMPORTANT MILESTONES OF JOURNEY TO GST 1005 CHAPTER 36  Decoding of the Constitution (101st Amendment) Act, 2016 36.1 INTRODUCTION 1010 36.2 KEY AMENDMENTS TO THE GST BILL VIDE THE CONSTITUTION (101ST AMENDMENT) ACT, 2016 1011 36.3 SECTION-WISE ANALYSES OF THE CONSTITUTION (101ST AMENDMENT) ACT, 2016 1014 CHAPTER 37  Preparation for GST and challenges ahead 37.1 GETTING GST READY 1015 37.2 LIKELY IMPACT OF GST AND FOCUS AREAS 1016 37.3 HOW TO GO ABOUT FOR GST – ACTION PLAN 1017 37.4 TO-DO LIST FOR DEPARTMENTS AND GOVERNMENT AUTHORITIES 1019 37.4.1 Initial preparation 1019 37.4.2 Creating awareness and imparting education 1019 37.4.3 IT Infrastructure and computerization 1019 37.5 CHALLENGES AHEAD 1020 37.5.1 GST Council powers only recommendatory in nature 1020 37.5.2 Exemptions and exclusions under GST 1021 37.5.3 Deciding the Revenue Neutral Rate (RNR) 1021 37.5.4 Finalising principles of place of supply 1022 37.5.5 Finalising principles of time of supply 1022 37.5.6 Extensive training to tax administration staff 1022 37.5.7 Goods and Services Tax Network (GSTN) 1022 37.5.8 Providing platform for deliberation with trade on likely issues under the Model GST law 1023
  39. 39. Detailed Content xliii CHAPTER 38  FAQs on GST 38.1 FAQS ON GST ITS NEEDS 1024 38.2 FAQS ON THE CONSTITUTION (101ST AMENDMENT) ACT, 2016 1027 38.3 FAQS ON GST COUNCIL 1028 38.4 FAQS ON MODUS OPERANDI OF GST 1030 38.5 FAQS ON RATES UNDER GST - REVENUE NEUTRAL RATE (RNR) 1035 38.6 FAQS ON TERM “SUPPLY” 1036 38.7 FAQS ON EXPORTS AND IMPORTS 1043 38.8 FAQS ON VALUATION OF SUPPLY OF GOODS AND/ OR SERVICES 1046 38.9 FAQS ON TIME OF SUPPLY 1055 38.10 FAQS ON PLACE OF SUPPLY 1062 38.11 FAQS ON EXCLUSIONS AND EXEMPTIONS UNDER GST 1069 38.12 FAQS ON REGISTRATION UNDER GST 1073 38.13 FAQS ON PAYMENT OF TAX 1082 38.14 FAQS ON INPUT TAX CREDIT 1091 38.15 FAQS ON REFUNDS 1102 38.16 FAQS ON RETURN 1107 38.17 FAQS ON JOB WORK 1120 38.18 FAQS ON TRANSITIONAL PROVISIONS 1125 CHAPTER 39  Commentary on Model GST Law 39.1 COMMENTARY ON MODEL CGST/SGST ACT, 2016 1135 39.2 COMMENTARY ON MODEL IGST ACT, 2016 1682

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