GST Drona Material PDF

1.
INTRODUCTION TO GST
1) Meaning and purpose of Imposing Tax
2) Direct Tax Verses Indirect Tax.
3) features of Indirect taxes

4) Need for GST in India & Taxes that we Subsumed in a GST
5) Concept of GST
6) Genesis (Origin) of GST in India.
7) Benefits of GST
8) Constitutional provisions
9) Frame work of GST

1. Meaning and purpose of Imposing Tax
Meaning of Tax
 Tax is a financial burden lied up on Individual property owners to Support the govt
throw Separate Act

 Tax is not a voluntary payment Donation, but it is an En forcible Contribution made by
a person in pursuance of the legislative authority.

 In Simple Words Tax is nothing but money that people have to pay to the govt to
provide public Services

Purpose of Imposing Tax:
It is the primary Responsibility of the government full fill

 The Increasing development needs of the Country & people.
 To provide Basic needs of public

 Socio- Economic objectives.
To provide all the above Services to the public government need a fund, hence such
Amount Collected in the form of:
CA-IPCC- GST Contact No. 9133430222, 9133530222 Page |1

2. Direct tax vs indirect tax
Direct tax Indirect tax:
1. Incidence and impact will be on same 1. Incidence will be on one person and
person impact will be on another person
2. Progressive nature 2. Regressive native

3. E.g.: Income tax 3. GST, customs
3. Features of indirect tax
 An important source of revenue

 Indirect taxes are a major source of tax revenue for government and continuous to
grow as more countries move to consumption-oriented tax resign.

 In India indirect tax contribute more than % of the tax revenues of cg& sg.
 Taxes on commodity and services

Indirect taxes levied on commodities at the time of (manufacture/purchase /sale)
Supply and import/export of goods (or) rendering of sources.
 Shifting of burdens
There is a clear shifting of tax burden in respect of indirect taxes.
Ex: supplier of goods & services is liable for payment of tax will be recover from the
recipient
 No perception of direct pinch

Generally, the value of the product is inclusive of tax hence while purchasing goods
public will resume they are paying money only towards goods. Thus, tax payers does
not feel (receive) direct pinch while paying indirect taxes.
 Inflation
Indirect tax directly effects the prices of commodity and services and leads inflationary
trend i.e., as increase in price of product the duty portion will increase proportionately.
 Wider tax base
When it compare with direct taxes the it have a wider tax base, majority of products or
services are subject to indirect tax with low exemption limit.

 Promotes social welfare
High taxes are imposed on consumption of harm products such as alcohol and tobacco
products. This not only reduce the consumption but also enable the state to collect
substantial revenue.
 Regressive in nature.
Irrespective of rich and poor have to pay the same rate of indirect taxes commodities
and services. This may further increase the income disparities between the rich and
poor need for GST in India and tax that are subsumed in GST.
Need for GST in India & Tax that are consumed in GST
Deficiency in the existing indirect Introducing of GST. It is occurred
tax structure i.e. excise VAT, CST, Has lead to for all ills in the existing indirect
service tax. tax Regine
4. Deficiency in the exciting IDT system:
1. Cascading effect of taxes an account of
a) Levy of non-vatable CST.

b) Inclusion of excise duty in value, while computing VAT amount.
2. Double taxation of a transaction has both goods and services.
E.g.: Restaurant
Value of food =10,000

(If food is delivery to home, tax is
Service tax @ 15% = 600
60% service tax,
Total =10,600
otherwise 40% service tax.)
VAT @ 14.5% = 1,537
Total = 12,137
3. Non – integration of vat and service tax

E.g.:
Readymade garments = 5,00,000

excise@ 12.5% = 62,500
Total = 5,62,500

Vat @ 5% = 28,125
Total = 5,90,625
Building rent = 1,00,000 Advertisement in TV= 50,000

S.T.@= 15,000 S.T.@ 15%=7,500
Brand advertisement = 2,00,000

S.T.@ = 30,000
Total = 2,30,000
Value of the goods = 8,00,000
Vat @ 5% = 40,000
= 8,40,000
Particulars Amount
VAT on sale 40,000
Less: ITC
a) Vat on purchase (28,125)
b) E.D on purchase N.A
c) S.T on Rent N.A
d) S.T on advertisement N.A
e) S.T on Brand Advertise N.A

4. No canvas credit after manufacturing stage E.g.: Mobile
5. Non – inclusion of several local levies in state vat such as luxury tax entertainment tax
etc.
Such as luxury tax, entertainment tax etc

E.g.: Building rent = 5,00,000
SGST@ 14.5% = 75,000

5,75,000
Cleaning material = 3,00,000

Vat @ 14.5% = 43,500
= 3,43,500

Furniture = 4,00,000
vat@ 5% = 20,000
= 4,20,000
Movie collection = 50,00,000
Entertainment tax @20% = 10,00,000

Entertainment tax payable = 10,00,000
Less: building tax @ 15% = -
Vat @ 14.5% on cleaning = -
Furniture vat @ 5% = -
Taxes that are subsumed in GST
Central levies State levies

1) Central excise duty and additional excise 1) VAT / sales tax
duty 2) Entry tax and purchase tax

2) Service tax 3) Entertainment tax
3) Excise duty under medicinal and toilet ( except those levied by local bodies)
preparation act 4) Tax on lottery betting and gambling

4) Cud and special cud 5) Luxury tax
5) Central sales tax 6) Taxes on advertisements

6) Central surcharges and cesses in so far 7) State surcharges excess in so far as they
as they related to supply goods or related to supply of goods or services

services
Note points:
Even after introducing of GST
1) Alcoholic liquor for human consumption on which state govt has a right to impose
state excise duty ( not subsumed in GST)
2) Tobacco products are covered under GST as well as under central excise and GST
until goods are removed from per view of excise
3) In relating to following goods GST council has to notify the effective date for
imposing GST those are

 Petroleum crude
 High speed diesel
 Motor spirit (commonly known as petrol)

 Natural gas
 Aviation torsional fuel

That means above goods are liable for payment of central excise and vat even after
introducing of GST.
5. Concept of GST:
a) value added tax:

GST is a value added tax levied on manufacture purchase sale supply& consumption
of the goods and or all services.

Continuous chain of tax credit:
GST offers comprehensive and continuous chain of tax credit from produces point
service providers point up to the retailer’s level/ consumers level, there by a person is
liable for payment of tax only to the extent of value addition.
b) burden born by final consumer: ( nature of IDT)

The supplier at each stage is permitted to avail credit of GST paid on the purchase of
goods and or services and set of \f this credit against the GST payable on the supply
of goods or services to be made by him. Hence the persons who are parties in supply
chain eligible for credits except by final consumer.

c) No cascading of taxes:
GST does not differentiate b/w goods and service in relating to liability computation
availement of ITC. That means tax will be levied only on value added portion of
conidian effect.

E.g.:
whole saler retailer customer
Manufacture
value of good = 5L value of good = 7L value of good = 9L
CGST @ 9% =45K CGST @ 9% = 63K CGST @ 9% = 81K
SGST @ 9% = 45K SGST @ 9% = 63K SGST @ 9% = 81K
5,90 K 8,26 K 10,62,000
Particulars CGST SGST Particulars CGST SGST
1. GST payable 63,000 63,000 1. GST on supply 81K 81K

Less: Input tax credit (45,000) (45,000) Less: ITC (63k) (63k)
Net GST payable 18,000 18,000 Net GST payable 18k 18k
6. Genesis of GST in India: (origin)
 Kelkar task for strongly suggested fully integrated GST on national level in the year of
2004
 Subsequently union be finance minister Sri. P. Chidambaram announced GST would be

introduced from April 2010 since then GST missed several deadlines and continued to
be shrouded by the clouds of uncertainty

 However, in the year of 2014 OF government introduces the bill after obtaining the
consent of both houses of the parliament and 50% of the states made applicable with
effective from 1-07-2017
 France was the first country to implement GST in the year of 1954 with in these 63
years about 160 countries across the world have adopted GST
7. benefits of GST:
GST brings various benefits to all the stake holders of industry govt and the consumer
hence GST is a win-win situation for the entire country.

a) Creation of unified nation market:
GST aims to make India a common market with common tax rates and procedure.
Hence it will remove the economic barriers and will give a way for an integrated
economy at the national level.
b) Minimization of ill effects of cascading:

 By subsuming most of the central and state taxes into a single tax
 By allowing set off prior stage taxes for the transactions across the entire value
chain.
It would medicate effects of cascading improving competitive ness and liquidity of
the business.
c) Elimination of multiple taxes and double taxation:
 GST subsumed majority of the existing indirect taxes both central and state levels
into a single tax.
 GST which is liveable uniformly on goods and services
 this will avoid ambiguous situations disputed issues relating to double taxation.
d) Boast to make in India initiated
GST will give a major boast to the make in India initiative of the govt of the India by
making goods Invoice is the main instrument competition in the national as well as
international market which was not possible as per old indirect taxes.
e) Buoyancy to the govt revenue
GST is expected to bring buoyancy to the government revenue by winding tax base
and improving the tax payer’s compliance
buoyancy = easy to accumulate revenue.

8. constitutional provisions: (origin to our India)
a) article no 246A [power to make laws with respective GST]

 This article grants the power to the cg and sg to make laws with respect to GST
which will imposed by the central and such state.

 central govt has exclusive power to make laws with respect to the GST in case of
interstate supply of goods and (or) services.
 In relating to following goods GST will be applicable from the date notified by the
GST council.
 petroleum crude
 high speed diesel
 motor spirit
 natural gas
 aviation turbine fuel

b) Article 269A: (levy and collection of GST on interstate supply)
 This article grants the power to the central govt to impose GST on supplies in the
course of interstate trader commerce.
 Even though IHST levied and collected by cg such tax shall be apportions b/w the
manner as may be provided by parliament by lower recommendations of the GST
council.
 Import of goods or services or both into India will also be deemed to supply of
goods and or services in the course of interstate trader commerce
[Hint: For that reason, at the time of import instead of cud & special CVD, IGST will
be levied]
c) Article no 279 A: (Power to the President)

 This article empowers the president to constitute a GST council
 By virtue of this article president constituted GST council by appointing union

finance minister as chair ma and state financial ministers as members.
 The functions of the council is to make recommendation to the central and states
in relating to tax rates, exemption basic exemption limits dispute resolutions etc.,
 Every decision of the GST council is taken by a majority of not less than 75% of the
weighted votes of the members present and voting ( special resolution).
 weightage of votes:
 To the C.G – 1/3rd of total votes

 To the S.G – 2/3rd of total votes.
9. Frame work of GST:
a) Dual GST: India has adopted a duel GST which is imposed concurrently by the central
and state so that central getting power to tax interstate sale and states are getting
power to tax services

FRAME WORK OF GST
Name of GST model Nature Following countries
National GST Taxes levied by C.G with Australia (10%)
sharing of revenue with china (17%)

state
State GST Tax levied by the state and Us (11.725)

retained themselves
Non-concurrent GST C.G levies GST on services -
and state levies GST on

goods
Incurrent dual GST Tax levied by C.G and S.G Brazil (17 to25)
model on both goods and Canada (5%)
services India.
b) CGST / SGST / UTGST / IGST:

 Any supply taken place within the state liable for payment of CGST + SGST
 Any supply taken place in b/w two states or two union territories or one state to
union territory liable for payment of IGST.
 Any supply taken place with in UT liable for payment of GST+ UTGST.

c) Manner of ailment of ITC: (SEC 49)
CGST PAYABLE =XXX SGST / UTGST =XXX

IGST PAYABLE =XXX
LESS: LESS: PAYABLE
IGST credit =XXX CGST CREDIT =XXX LESS:
CGST credit =XXX IGST CREDIT =XXX SGST CREDIT =XXX
SGST / UTGST credit =XXX SGST /UTGST =XXX IGST /UTGST =XXX
Net IGST payable =XXX Net CGST XXX Credit net SGST = XXX
payable payable
Note: CGST credit cannot be utilized for payment of SGST and vice versa.
Example 1: (goods sale to other state and also with in state)
Vijayawada Guntur Vizag Tamil Nadu

value of goods = 10L value of goods = 12,00,000
value of goods = 15L
CGST @ 6% = 60K CGST @ 6% = 72,000
IGST @ 12% = 1,80,000
SGST @ 6% = 60K SGST @ 6% = 72,000
16,80,000
11,20,000 13,44,000
Particulars CGST SGST Particulars IGST

1. GST payable 72,000 72,000 1. GST payable 1,80,000
Less: Input tax credit (60,000) (60,000) Less: Input tax credit
Net GST payable 12,000 12,000 a) IGST credit XXX
b) CGST credit (72,000)
c) SGST credit (72,000)

Example 2: (Purchase from other state & sale in b/w us)
Karnataka Guntur Kadapa
value of goods = 5L value of goods = 8,00,000
IGST @ 28% =1,40,000 CGST @ 14% = 1,12,000
6,40,000 SGST @ 6% = 1,12,000
10,24,000
Particulars CGST SGST
1. GST payable 1,12,000 1,12,000

Less: Input tax credit
a) IGST credit (1,40,000) -

Excess IGST credit 28,000 -
Excess IGST credit - (28,000)

Net SGST payable 84,000
1. Mr. A supplied goods to Mr5.B for the worth of 25,000. Mr. B supplied these goods are
covered under GST @ 12% and all the parties are located in the same state compute GST
payable by all suppliers after ailment of ITC
2. Mr. X of AP supplied goods to Mr. A of A.P for the value of Rs 25,000 Mr. A of AP supplied
goods to Mr. B Tamilnadu with a margin of 20% on value. Further Mr. B of Tamil Nadu
supplied good to Mr. C of T.N with a margin of 20% credit at each stage GST rate @ 12%
Mr. A Mr. B Mr. C
value of goods = 25,000 value of goods = 30,000
CGST @ 6% = 1,500 CGST @ 6% = 1,800
SGST @ 6% = 1,500 SGST @ 6% = 1,800
28,000 33,600

Particulars CGST SGST Particulars CGST SGST
GST payable 1500 1500 GST payable 1800 1800
Less: Less: ITC
ITC - - CGST credit 1500 -
1500 1500 SGST credit - 1500
Net GST payable 300 300
A.P Inter Mr. B Intra T.N

Mr. X Intra
Mr. X T.N Mr. B
A.P
Value of goods = 25,000 Value of goods = 30,000 Value of goods = 36,000
CGST @ 6% = 1,500 IGST @ 12% = 3,600 CGST @ 6% = 2,160
SGST @ 6% = 1,500 33,600 CGST @ 6% = 2,160
28,000 40,320
Particulars IGST Particulars CGST SGST

GST payable 3600 GST payable 2160 2160
Less: Less: ITC
CGST (1500) IGST credit (3600) -
SGST (1500) Excess of IGST 1440 -
600 Excess of IGST - (1440)
720
d) legislative frame work:
 There is a single legislation for levy of CGST (i.e., CGST Act 2017)
 For union territories there is a single legislation for levy of UTGST ( UTGST Act 2017)
Union territories:
 Dadra& Nagara Hawali
 Dum and Diu

 Chandigarh
 Lakshadweep

 Andaman and nicrobar islands
Even though Delhi and Pondicherry are the UT they have their own legislation
for imposing of SGST (that means if any supply taken place at Delhi and
Pondicherry liable for payment of SGST instead of UTGST along with CGST.
 Every state have it won legislation to impose SGST however the basic features of
the law such as 1) chargeability 2) definition of taxable event and taxable person
3) classification and valuation of goods and services 4) procedure for collection and
levy of tax above points are some in all the legislations as far as feasible.
 Classification of goods and services:

 Harmonized system of nomenclature (HSN) code is used for classifying the
goods under GST.

 A new scheme of classification of services has been devised and classified under
various sections headings and groups.

 Registration:
 Every supplier of good and or services is required to obtain registration in the
state or UT from turn over exceeds 20L during a F.Y (financial year)
 In case a person carrying business in special category states the limit of 20L Rs.
will be reduced to 10L special category states.

 Arunachal Pradesh Assam, Jammu and Kashmir, Manipur, Meghalaya,
Mizoram Naga land, Sikkim, Tripura, Himachal Pradesh, Uttara khand.

 Composition scheme:
Instead of payment of the GST at regular rates govt. given relief to small business
persons (i.e., the person who's turnover is less than or equal to 100L) to pay GST in
a simple method (i.e. on gutturally basis)

(For this facility users input tax credit facility not available)
Manufactures 2%
Dealers 1%
Food services and beverages ---5% (only this service provider this facility of
composition scheme available)

 Exemptions:
As per sec 11 of the CGST act, and sec 6 of the IGST act govt. may grant exemption
from payment of tax on essential goods and or services.

 GST common portal:
 Common GST electronic portal www. GST .gov.in a website managed by goods
and service tax network
 Goods and service tax network is a company incorporated under the provision
of sec 8 of the companies act 2013
 GST portal is accessible through internet by tax

 It is single common portal for all GST related services
 The functions of the GST network (GSTN)

 Facilitating registration
 Forwarding the return to central and state authorities

 Computation and settlement of IGST
 Providing miss reports to the central and state officials
 Providing analysis of tax payers profile and running the matching engine for
matching reversal and realism of ITC
 GST suvidha providers / application service providers:

 GSTN has selected certain information technology and financial technology
companies to give assistance to the tax payer while uploading invoices filing of
return called suvidha providers.
 suvidha provides provide GST related services as a single stop shop

 GSPS ( goods and services siddha providers) maintains the help of ASPS
(application service providers) who act as a link b/w tax payers and GSPS

2. SUPPLY UNDER GST
OVER ALL CHAPTER ANALYSIS (CONCEPT OF SUPPLY)
Section 7: meaning and scope of supply

Section 8: taxability of matters composite and mixed supplies
schedule1: matters to be treated as supply even if made without consideration

Schedule 11: matters to be treated as supply of goods or as supply of service
Schedule 111: matters or transactions which shall be treated neither as supply of goods nor
supply of services
Section 7: meaning and scope of supply
supply includes sec7(1) excludes sec7(2) may notified govt. 7(3)
a) all forms of supply of a) Activities or transaction Transactions that are to

goods or services for specified in schedule ii be treated as
consideration by a person or a) a suppliers of

in the course or b) such activities or goods and not as a
furtherance of business transaction as may be supply of services

b) importation of services for notified by the govt. on or
a consideration whether the recommendations b) a supply of services

or not in the course or of the council and not as a supply
further once of business of good

c) the activities specified in
schedule made or agreed

to be made without a
consideration
Supply includes sec 7(1) (a):
All forms of supply of goods or services for consideration by on person in the course of
furtherance of business

1. Supply should be of goods or services or both
2. Supply should be made for a consideration
3. Supply should be made in the course of furtherance of business

4. Supply should be made by a taxable person
5. Supply should be a taxable supply.

Explanation 1:
Supply includes ALL FORMS of SUPPLY OF GOODS OR SERVICES or both
1. Sale and transfer Means Means

2. Barter and exchange every kind of movable property anything other than
3. License, Lease, rease, etc. Goods
Includes Includes
 Actionable claim  Use of money or
 growing crops grass and things attached  conversion of money by cash by

to forming part of the land which are any other mode, form on
agreed to the from/currency / denomination
Explanation 2:
Supply should be made for a consideration
Consideration
payment in money or otherwise monetary value of any act for
for the supply forbearance for the supply
By recipient or any other person
Excluding subsidy given by central / state government

Note: deposit is in returnable nature hence it is not a consideration otherwise it is
consideration
Money mends: currency coins promissory note bill of exchange cheque travels cheque
money order pay order electronica remittance letter of credit, demand draft, excluding
currency held for numismatic value

Explanation 3:
(Supply should be made in the course of forth trance of business)
Any activity
1. Any trade / commerce, manufacture, profession incidental / ancillary to it

etc., even if there is no monetary benefits any activity of same
2. supply /acquisition of goods including capital in connection with commencement
goods and services / closure of (refer schedule-I)
3. provision of facilities by club association etc. to its members for consideration
4. admission for consideration to any premises

5. services as holders of office accepted in the course /
furtherance of the business (trade /

profession)
6. services by race club by way of book maker in Totalisator or a license to

such club
7. Any supply of goods or services by the government as public authority would amounts
to a business
Explanation 4:
(Supply should be made by a taxable person)

Meaning of taxable person:-
 A “ taxable person” is a person

 Who is registered or
 Liable to be registered
 Under sec 22 or sec 24
Hence even an unregistered person who is liable to be registered is a taxable Peron.

Explanation 5:
1. For a supply to attract GST, the supply must be taxable
2. Taxable supply has been broadly defined and means any supply of goods or services or
both which is liveable for tax under the GST law.
Sec 7(1) (b) supply Includes

(Importation of services for a consideration whether or not in the course or furtherance of
business sec 7(1) (b)
1. sec7(1) (b) which brings with in the ambit of ' supply' the importation of services for a
consideration whether or not in the course or furtherance of business

2. This is the only exception to the condition of supply.
Example 1:
1) Mr. A received architecture services from USA based company for consideration building
which will be used for business the consideration given through electronically remittances
is it would amounts to a supply.
2) Whether your answer will be differ if architecture services has been received for
construction a building which will be used for residential purpose
A (1): As per 269 (A) it is an interstate supply. Liable for payment of GST.
A (2): Irrespective of in the course of furtherance business import of services will be treated
as supply of as per sec 7(1) (b) if there in a consideration

Supply includes 7(1) (c)
(The activities specified in schedule – I made or agreed to be made without consideration)

Schedule – I
1. Permanent transferor disposal of business assets where input tax credit has been availed
on such assets
2. Supply of goods or services or both b/w distinct persons as specified in sec 25 (provided
that gifts not exceeding fifty thousand rupees in value in a financial year by an employer
to an employee shall not be treated as supply of goods

3. Supply of goods:
a) By a principal to his agent where the agent under takes to supply such goods on
behalf of the principal ; or

b) By an agent to his principal where the agent under taken to receive such goods on
behalf of the principal

4. Import of service by a taxable person form a related person or from any of his other
establishments outside India in the course or furtherance of the business
EXPLANATION 1:
1. Permanent transfer / disposal of business assets:
Permanent transfer / disposal of business assets:

a) Any kind of disposal or transfer of business assets made by an entity on permanent
basis even though without consideration qualifies as supply.

b) However it is Importance to note that this provision would apply only if input tax
credit has been availed on such assets
E.g.:
1) South India shopping mall purchased laptops and printers for business purpose
and avail input tax credit after 2 years all these business assets donated to
charitable institution for educational purpose is it could amounts to a supply?
a) Yes, as per 7(1) (c) + schedule-I

2) Mr. X purchased a ………. which is used for business and personal purpose on
which ITC not avail after a certain amount to supply.

a) No, being it is not a business asset
Explanation 2:
(2(a) – related person)
Person shall be deemed to be “related person” if

1) Such persons are officers or directors of one another’s businesses.
2) Such persons are legally recognised partners is business.

3) Such persons are employer and employee.

Employer and employee relationship covered under schedule III not liable for GST
however any suppliers made by employer to employee which is not in the course of
employment would amounts to a supply being those persons are related persons as per
schedule-1
Exception:
Provided that gifts not exceeding fifty thousand rupees in value in a financial year by
an employer to an employee shall not be treated as supply of goods or services or both.
E.g.:
particulars supply
1) Salary given by the employer to the employee for
his service No (as per schedule III)
2) Laptop rs.35,000 given as gift to Employee by yes (being amount < 50K not
employer chargeable to GST even Though
3) Employer given a car as gift to the employee(worth

2,00,000/-) yes
Example: A business person purchased two cars and given as a gift to his friend and
employee whether both transactions would amounts to supply.

a) Gift to employee: Being related persons it would amount to a supply
b) Gift to friend: not a supply (that to it is not a business asset)

4) Any person directly / indirectly owns, controls or holds twenty five present or more of the
outstanding voting stock or shares of both of them

Example 3:
ABC ltd and XYZ ltd are holding and subsides companies on 10th Jan 2017 holding
company given information technology services support to the subsidiary company for
without consideration. Is it would amounts to a supply

a) Yes (Being a related persons)

5) One of them directly / indirectly controls the other:
Example:
(a) InfoTech company incorporated in Amaravathi to produce accounting based software

in which Infosys company does not have any share capital however without obtaining
the consent of the Infosys company InfoTech not carrying any regular activities that
means Infosys company directly / indirectly controls InfoTech company hence both
parties are related persons

6) Both of them are directly or indirectly controlled by a third person
7) Together they directly or indirectly control a third person ; or
e.g.: P.K reliance Venkaya Naidu
Babu Jagan Modi
8) They are members of the same family.
Individual Spouse
Children
Note points 2:
1. The term persons also includes legal persons (company)
2. Persons who are associated in the business of one another in the one is the sole agent or
sole distributor or sole concessionaire, how so ever described shall be deemed to be
related of the others.

2(b) Distinct Person
1. A person who has obtained/ is required to obtain
a) more than one registration

b) whether in on state/union territory or more than one state/union territory
c) in respect of each such registration

d) be treated as distinct persons
2. Further, where a person who has obtained or is required to obtain registration in a state
or union territory in respect of an establishment, then such establishments shall be treated
as establishments of distinct persons

Example 5:
Haldhiram’s company have 2 head office in Nagpur supplying moongdhal to the AP

branch for further distribution without consideration would amounts to a supply.
Explanation 3:
Principal to his agent
Principal agent:
a) Supply of goods by a principal to his agent without consideration where the agent
undertakes to supply such goods on behalf of the principal is considered as supply.
b) Lll’y supply of goods by an agent to his principal without consideration, where the agent
undertakes to receive such goods on behalf of the principal is considered as supply.
Example 6:
Usha Company producing fans and delivered to the various agents who are located at
the different places in India. By delivery of the goods, principal not receiving any
consideration from the agent also personally not liable for payment of any consideration,
even then it would amounts to a supply, principal is liable for without consideration would
amounts to a supply, principal is liable for payment of GST.

Explanation 4:
Importation of services by a taxable person
Importation of services:
 Import of service by a taxable person
 From a related person or

 From his establishments located outside India,
 Without consideration,
 In the course or furtherance of business
 Shall be treated as “supply”

Analysis b/w:
Particulars 7(1) (b) 7(1) (c)

Importation of service Yes Yes
Consideration Required Not required

Furtherance of business Not required Required
Related person Need not Yes they must be related.
Taxability of import of service
Import of service
With consideration without consideration
In the course not in the course of related person / not in the course of
Furtherance of furtherance of distinct person+ in furtherance of
Business business course or ----- business
Sec 7 (1) (d) supply includes:

Activities to be treated as supply of goods or supply of services
(Sec 7(1) (d) read with schedule II)

1. Transfer
Particulars Supply of good / service
 Title in goods Supply of goods

 Title in goods under an agreement that property shall Supply of goods
pass at future date

 Right / undivided share in goods without transfer of title Supply of service
in them
2. Land and building
 Lease tenancy easement license to occupy land
 Lease/ letting out of building including a commercial / industrial Supply of
/ residential complex for business / commerce, wholes / party service
3. Treatment or process
Applied to another person’s goods ( job works) Supply of service
4. Transfer of business assets
 Goods forming part of business assets are transferred / disposed off
by/under directions of person carrying on business so an no longer to Supply of

form part of those assets. goods
 Goods held / used for business are put to private use or are made
available to any person for use for any purpose other than business, Supply of
by / under directions of person carrying on the business, whether or service
not for consideration
Example:
XYZ ltd given a car (which is a business assets) to the director for his
personal purpose during his directorship period would amounts to a
supply of service. If such value is more than 50K (computed as per

sec.15) company being a supplier liable for payment of GST

 Goods forming part of assets of any business carried on by person
shall be deemed to be supplied by him in the course or furtherance of Supply of

his business immediately before be ceases to be taxable person goods
Exceptions:
1) Business transferred as a going concern. ( amalgamation)
2) Business carried on by a personal representative who is deemed to be a taxable person.

(Transfer from ancestors, NRI persons appointing their representative to carry sown the
business etc.)
5. Activities to be treated as supply of goods or supply of service
(Sec 7(1) (d) read with schedule II)

 Renting of immovable property
 Construction of complex building civil structure etc.

 Temporary transfer or permitting use or enjoyment of any intellectual property right
 Development design programming customization adaptation up gradation enhancement

implementation of it software
 Agreeing to obligation to refrain ( back step) from an act or to tolerate an act or situation
or to do an act
 Transfer of right to use any goods for any purpose. (Movable property)
6. Activities to be treated as supply of goods or supply of services

(sec7 (1) (d) read with schedule 11)
Following composite supplies
Supply of service
 Works contract service
 Supply of goods being food or any other article for human consumption or any drink.

7. Activities to be treated as supply of goods or supply of services
(sec7 (1) (d) read with schedule11)
Supple of goods by an in corporate association or body of person to a member there of for

cash, deferred payment or other valuable consideration
Negative list under GST (section 7(2) (a) read with schedule 111
Activities or transactions which shall be treated nether 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 establishment under any law for the time being in force.
3) a) The functions performed by the members of parliament members of state legislative

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
c) The duties performed by any person as a chair person or a member or a director in

a body establishment 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 mort carry including transportation of the

deceased
5) Sale of land and building

6) Actionable claims other than lottery betting and gambling
Sec 8 tax liability on composite and mixed supplies

The tax liability on a composite or a mixed supply shall be determined in the following manner
a) A composite supply comprising two or more supplies one of which is a principal supply.
Shall be treated as a supply of such principal supply
b) A mixed supply comprising of two or more supplies shall be treated as supply of that
particular supply that attract height rate of tax

Principal supply: means the supply of goods and services which constitutes the predominant
element of a composite supply and to which any other supply forming part of that composite
supply is ancillary
In order to determine whether the supplies are composite supplies or mixed supplies one
needs to determine whether the supplies are naturally bundled or artificially in ordinary course
of business.
Description Composite supply Mixed supply
1. Naturally bundled Yes No
2. Supplies together Yes Yes

3. Can be supplied separately No Yes
4. One is predominant supply for recipient Yes No

5. Each supply priced separately No No
6. All supplies are goods Yes Yes

7. All supplies are services Yes Yes
Examples:
Particulars Composite supply &

Mixed supply
Supply of generator along with two years services warrant Composite
Supply of shirt belt tie in combo pack Mixed
Transportation of passengers service along with food and

entertainment Composite
Delivery of the furniture by the supplier by incurring expenses

for transportation and insurance Composite
First floor for residential and second floor for commercial

purpose rentals even under a single agreement Mixed

3. CHARGE OF GST
CHAPTER OVERVIEW
1. Introduction
2. Relevant definitions
3. Extent and commencement of CGST act / SGST act/ UTGST act
4. Levy and collection of CGST (sec.9)
5. Reverse charge ( not.no.13/2017)
6. Composition levy (sec.10)

7. Extent and commencement of IGST
8. Levy and collection of IGST.

1. INTRODUCTION
a) As we discussed the levy point for GST is supply of goods or services or both.
b) Intrastate supply: where the supplier location and place of supply falls in the same state
or UT.
Example:
1. Mr. A of AP supply to Mr. X of AP
a) Supplier location – Guntur both are falls in same state hence it is intra
b) Place of supply – Vizag state supply
2. Mr Palneer of Tamilnadu given an order to the Mr. Venkat who is located in AP to deliver
the goods at planer branch which is located at Vizag.
a) Supplier location Guntur. AP

b) Place of supply Vizag
Both are located in the same state hence it is intra.

3. Interstate supply:
Where the supplier location and place of supply fall in different states or b/w a state and
union territory
Example:
1) Mr A of Guntur delivered goods to Mr. B of Chennai on his order
Supplier location Guntur

Place of supply Chennai
Both are located in two different states hence it is interstate supply.
2) Mr. X of Guntur given an order to Mr. x of Vijayawada to deliver the goods to Mr. Z
who is located in Pune
 Place of supply Pune

 Supplier location Vijayawada
Both are located are two different state hence it is an interstate supply.
2. Relevant Definitions
a) Taxable supply sec2 (108):
“Taxable supply” means a supply of goods or services or both which is leviable to tax under
this act.
b) Non – taxable supply sec2 (78):

Non – taxable supply means a supply of goods or services or both which is not liveable to
tax under CGST Act or under IGST Act.
Supplier (sec 2(105):

 Supplier means the person
 Supplying the said goods or services or both and

 Shall include an agent acting as such as behalf of such suppler
 In relation to the goods or services or both supplied.

c) Recipient:
a) Where a consideration is payable for the The person who is liable to pay that
supply of goods or services or both consideration.
b) Where no consideration is payable for The person to whom

the supply of goods a) The goods are delivered or
b) Made available or
c) To whom possession or use of the
goods is given or made available

c) Where no consideration is payable for The person to whom the services is
the supply of service rendered
d) Exempt supply sec2(47):

“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 sec 11of GST or under sec 6 IGST Act.
e) Aggregate turn over sec 2(6):
 Aggregative turn over means

 The aggregative 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
 Interstate supplies of persons having the same “permanent account number to be
computed on all India basis (Branch transfer or stock transfer).
Excludes: central tax state tax union territory tax integrated tax and cess.
Problem 1:
XYZ ltd engaged in manufacture of plastic bottles and the company is willing to avail
composition scheme by the considering of following information compute aggregate turn

over and suggest eligibility aspect under composition scheme.
Particulars Amount
1. Value of intra state supply ( inclusive of 12% GST) 38,00,000
2. Branch transfer 10,00,000
3. Nil rate of supply 15,00,000
4. Taxable supply which are exempted under sec 11 of CGST 30,00,000

5. Value of the exported goods 22,00,000
6. Value of supply on which tax payable under reverse charge 18,00,000

Solution:
A computation of aggregate turnover of XYZ LTD.

Particulars Amount
1. Value of intra state supply 33,92,857
38,00,000 x 100
112
2. Branch transfer 10,00,000

3. Nil rate of supply 15,00,000
4. Taxable supply which are exempted under sec 11 of CGST 30,00,000
5. Value of the exported goods 22,00,000
6. Value of supply on which tax Nil

payable under reverse charge 1,10,192,857
f) Reverse charge sec 2(98):

“Reverse charge“ means the liability to pay tax by the recipient of supply of goods or
services or both instead of the supplier of such goods or services or both under section
9(3) 9(4) or under sec 5(3) 5(4) integrated goods and service tax act.
Electronic commerce operator sec 2(45):
Any person who

 Owns
 Operates or digital or electronic facility or platform for

 Manages; electronic commerce.
3. EXTENT AND COMMENCEMENT OF CGST / ACT / SGST / Act / UT GST Act
 CGST ACT, 2017: Act extends to whole of India including J & K

 SGST ACT, 2017: Act extends to whole of that state/ union territory with state legislature
(Delhi and Pondicherry)

 UTGST ACT, 2017: Act extends to the union territories

4. LEVY AND COLLECTION OF CGST
 SEC 9 (1):
 There shall be levied tax called the central goods and services tax on all intra state
supplies of goods or services or both, on the supply of alcoholic liquor for human
consumption,
 On the value determined under sec 15 and at such rates
 Not exceeding twenty present,
 As may be notified by the government on the recommendations of the council and
 Collected in such manner as may be prescribed and shall be paid by the taxable person.
 SEC 9 (2):
In relating to following goods CGST levied with effect from such date as may be notified
by the government on the recommendations of the council
 High speed diesel

 Motor spirit (commonly known as petrol)
 Natural gas &
 Aviation turbine fuel

 SEC 9 (3):
At the desecration of govt. may notify categories of supply of goods or services or both
recipient is liable for payment of tax.
 SEC 9 (4):
If any non-registered person made a taxable supply to the registered person made a
taxable supply to the registered person then recipient is liable for payment of tax on
reverse charge basis.
Exemption from GST:

Supply of goods or services received by a registered person from any or all the
unregistered suppliers does not exceed 5,000/- in a day exempt from CGST.

5. REVERSE CHARGE
Liability to pay GST
Forward charge Reverse charge E. Commerce operator
(Normal situation)
Supplier is liable for Recipient is liable for E-commerce operator is

payment of GST payment of GST liable for payment of GST.
Supplier Recipient Person liable
for payment of
GST
Insurance agent Any person who carrying insurance
business
Service rendered by a director Company or body corporate
Services supplied by recovery Banking company or financial

agent institution or NBFC (non-banking
financial company) + located in
taxable territory.
Supply of service By Producer, publisher, Music company
1. An author or the like + located in taxable Recipient
2. Music composer territory
3. Photographer
4. Artist or the like
Service supplied by arbitral Business entity located in taxable

tribunal territory
Services provided by on Business entity located in taxable
individual advocate or firm of territory

advocate senior advocate

providing services as
representative
Legal services provided by
YES Individual advocate / firm of advocate NO
Senior advocate
YES Supplier is liable for

Is senior advocate services not in
payment of GST
the nature of representation?
Is business entity located

NO
in taxable territory?
Recipient liable for

payment of GST
Examples:
 Jio services
 Newly retired couple

 Tea shop ( advocate)
 Jagan’s advocate sasikala case

Supplier Recipient Person liable for
payment of GST
Any person supplying sponsorship Body corporate or partnership

services. firm located in taxable Recipient
territory
Sponsorship Services
Provided by any
Person
YES To body corporate / NO

partnership firm
Located in NO
Supplier is liable
taxable territory
YES
Recipient is liable for
payment of GST
Examples:
 Vivo and IPL sponsorship
 Close-up company conducting and program

 Pavan sir sponsoring program

payment of GST
Goods  Registered factory

transport  Registered society
Agent (GTA)  Registered corporative society

 Registered under any GST
Recipient
 Anybody corporate
 Any partnership firm whether registered or not
 AOP ( association of persons)

 Any casual taxable person
Exceptions:
1. Service recipient is not a specified person. E.g.: my books in Karnataka
2. Service recipient not located in taxable territory. E.g.: slim food services
In this two situations suppliers i.e. GTA is liable for payment of GST
Services To any business

Supplied of CG / SG / Entity located in taxable territory
UT / local authority Except the following

1. Renting of immovable property
2. Postal services by postal department (speed Recipient

post, life insurance, express parcel post ,
agency)
3. Services in related to aircraft or vessel
4. Transportation of the goods or passengers

Electronic commerce operator:
Electronic commerce operator display a product or a service which are actually supplied
by some other person to the consumer on their electronic porter.
1. The price or the consideration for the product or service is corrupted by eco from the
consumer and passed on the actual supplier after the deduction of commission by the eco
( electronic commerce operator)

2. The government may notify specific category of services the tax on intra state supply of
which shall be paid by the Eco those are:
 Services by way of transportation of passengers by a

 Radio taxy
 Motor cab
 Maxi-cab
 Motor cycle
 Services by the way of providing accommodation in hotels guest house clubs cab siles
or other commercial places meet for residential or lodging purposes. Except where the
person supplying such services through electronic operator is liable for registration.
Radio taxi:
A vehicle having radio communication in two ways with a central control office and is
enable for tracking by using GPS or GPRS

GPS: global position system
GPRS: general pocket radio system.
Maxi cab:
Vehicle constructed to carry more than 6 passengers but not more than 12
Motor cab:
Vehicle constructed to carry not more than 6 passengers.
Note:
For applicability of reverse charge provisions in relating to hostels, clubs, etc.
If supplier is not liable to obtain if supplier is liable to obtain
registration under GST Act registration under GST ACT
Reverse charge provisions are Reverse charge provisions are not

Applicable, Eco is liable for applicable supplier is liable For
payment of GST payment of GST

Persons liable to pay GST under above two situations will be ECO:
1. If eco is located in taxable territory Eco is liable to pay GST
2. if eco does not have physical presence in the The representative of eco is
taxable territory liable for payment of GST
3. If eco does not have any physical For the purpose of payable
6. Composition scheme
The basic objective of introducing of composite scheme is to bring simplicity and to reduce
the complaints cast for the small tax payers

Turn over limit for composition scheme levy:
 As per section and as notified by govt. if a person turnover less than or equal to 100L is
eligible for composite levy
 However his business located in special category states the turn over limit restricted to
75,00,000.
Note: If a person having business in normal state and in special category state then the
turn over limit of 75,00,000/- has to be considered.

Persons eligible for composition scheme:
S.no Category of person Rate of GST

1. Manufacturers other than goods notified by govt GST CGST SGST
(pan masala tobacco, ice-cream) 2% 1% 1%

2. Supplier making supplies of any service in relating to
supply of food or beverages for human consumption 5% 2.5% 2.5%

( except alcohol
3. Any other supplier eligible for composition levy 1% 0.5% 0.5%

under sec 10 of CGST act ( trader)
Intimation for obtaining composition schemes:

 A person who making an application for registration may apply for composition scheme
by enabling an option in form GST REG -01

 A person who obtain registration subsequently he is willing to avail composition scheme
has to give intimation to the department within 60 days from the commencement of the
relevant financial year along with ITC (credit) reversal details.

Conditions and restrictions for composition scheme:
 A person who is a casual taxable person and non- resident taxable person not eligible for
composition levy
 Entire his purchase (i.e., composite dealer) should be from the un-registered dealer he has
to pay GST on reverse charge basis.
 He should not be engaged in the manufacture of goods notified by the government during
financial year (i.e., pan masala , tobacco, ice-cream)
 He shall mention the words in bill of supply and at business place as “composite taxable
persons not eligible to collect tax on supplies”
Who are not eligible for composition scheme?

 Supplier of services except supplier of food articles
 Supplier of goods which are not a taxable under the CGST,SGST,UTGST ( a person only
having branch transfers)

 Supplier of interstate outwards supply of goods
 Persons supplying goods through an electronic commerce

 Manufacture of ineligible goods.
Note:
By considering above restrictions composite dealer cab purchase foods from the other states.
(i.e., interstate inwards supply of goods is allowed)

Validity of the composition scheme:
 The option exercised by the registered person for composition scheme shall remain valid
so long as be satisfies all the conditions mentioned under section 10 and rules.
 If composite dealer turnover exceeds 100 L rupees in middle of the financial year from
such day on wards he is liable for payment of GST at normal rates and he has to give such
intimation to the department within seven days from the date of switch over.

7. EXTENT AND COMMENCEMENT OF IGST
 IGST shall be levied on interstate supplies of goods or services or both
 Interstate supply of alcohol is outside the ambit of GST

 The maximum rate of IGST will be 40% and
 Goods imported into India will be treated as interstate supply IGST will be levied as per
sec 3 of customs tariff act 1975.
Levy of IGST on
 Goods or services
 Petrol products
 Purchasing goods form the unregistered dealer (reverse charge, Rs. 5,000 criteria)
 Electronic commerce operator concepts will be remained same as we discussed in CGST

act
Reverse charge provisions under IGST Act:

payment of IGST
1) Any person located in a Any person located in taxable territory

non-taxable territory other than non- taxable online recipient Recipient
2) A person located in non Importer, service received by way of

– taxable territory transportation of goods a by a vessel Recipient
and located in taxable territory

4. TIME OF SUPPLY
CONTENT:
In relating to rendering or supply of service different transactions may be involved like
as date of completion date of invoice, date of payment. All these transactions may be taken
place on different days. In such a situation how a person can identify the day on which he
getting liability for payment of GST.
By considering these type of ambiguous situations, time of supply provisions has been
inserted in sec 12 and 13 of CST Act 2017.

Time of supply of service (Sec 13)
Sec 13(1):
The liability to pay tax on services arise at the time of supply as per this section
Sec 13(2):
Determination of time of supply in general / normal situation
NO Is invoice issued within time limit as YES
Specified in sec 31 (2) (30 days)
Date of payment XXX Date of payment XXX W

W
Date of completion XXX E Date of Invoice XXX E
Time of supply XXX E Time of supply XXX E
Note 1:
DOP mean:
W
E The day on which payment is entered in the books of accounts of the supplier XXX-XX-XX
E
The day on which payment is credited to his bank account XXX-XX-XX
Note 2: if the time of supply is not determinable as per above provision then the time of
supply is the day on which the recipient shows the receipt of service in his books of accounts.

Time limit for issue of invoice
In general / normal In case of bank /financial On govt notified services related

Situations institution NBPC Person, distinct Persons.
Within 30 days from the within 45 days from the 1. Entry in book of accounts of
date of supply of supply date of supply of service Supplier.
W 2. Before the expiry of quarter

E during which the supply was
E
made.
Time limit for issue of invoice
(Continuous supply of service)
Where the due date of where the due date of Where the payment is linked
payment is ascertainable payment is not Ascertainable to the completion of an event.
Invoice has to be issued Invoice shall be Issued Invoice shall be issued on or

on or before the due date before or at the time When before the completion of that
of payment the supplier of Service event.

receives the date of
payment.
Content:
Where the supply of services cases under a contract before the completion of the supply.
Invoice shall be issued at the time when the supply ceased to the extent of the supply made
before such cessation.
E.g.: electricity wiring for a building (work not satisfied ordered to stop on 3rd floor up to
only).

Sec 13(3) supplies in respect of taxes paid or payable on reverse charge basis
Associated enterprises and import of services Any other case
a) Date of book entry in the Is payment made within 60 days from

books of Accounts of the date of Invoice
W
recipient XXX E
E
b) Date of payment XXX Time of supply= TOS=
Date of payment The date occurs
immediately after
completion of 60
days from the
DOI. (i.e., 61st day
from the date)
DOP means:
a) The date of payment as entered in the books of accounts of the

W
recipient XXX
E
b) The payment debited in his bank account XXX E
Example 1:
XYZ Ltd.,
ABC Ltd.,
Recipient
IT services
Supplier
Association to import of services.
XYZ located in India received a service from its associated company Tokyo ltd located in japan.
Date of importation of service 1/4/18
Date of invoice 28/4/18

Book entry made in the books of recipient (XYZ ltd) 25/4/2018
Date of payment 15/6/18
a) Determine the TOS?

b) If above parties not associated enterprises, how your answer will be differ?
c) If payment is made on 10/8/18 how your answer would be differ in above two
situations (A&B)
Solution:
As per sec 13(3) it is an associated enterprises time of supply is
a) Date of book entry in the books of a/c’s of

Recipient =25-04-18
Date of payment= 15-06-18.

b) If the above parties are not associated enterprise then tos is if the payment made with in
60days from the date of invoice then time of supply is date of payment.
DOI 28-4-18
DOP 15-6-18 (2+31+15= 48days)
Payment mad with in 60days of date of invoice

Tos =15-06-18
c) Payment made on 10-08-18

 Answer doesn’t change as like as (a)
 Payment made on 10-08-18

As payment made after 0days then the time of supply would be on the 61st day from date
of invoice
i.e. 28-06-2018

Supply of vouchers by a supplier (sec 13(4))
If the supply of service is identifiable at the In all other cases

time of issue of vouchers
time of supply= the date of issue of voucher TOS= the date of redemption of voucher
E.g.: KFC & Infosys issuing voucher E.g.: salon and beauty parlour
Example: Mrs. X received beauty parlours service or cosmetic services from ANU’s on 1/7/17
for the worth of 10K on receiving of 10,000 worth of service anus’s limited given 500/- worth
of voucher which can be readable for further services in ANU’s
a) Date of completion of service 10-07-2017

b) Date of invoice 15-07-2017
c) Date of payment 12-07-2017
Vouchers has be issued on the date of payment

1) Determine the time of supply for original consideration and for voucher’s
2) What would be the impact if vouchers cab be redeemable for any other services like as
transportation, food etc.,
Solution:
1) As per sec 13(2)
Invoice issued within 30 days i.e.,

Date of completion 10-7-17
Date of invoice 15-7-17

Date of payment 12-7-17
Time of supply is
Date of invoice W 15-07-2017
Or E 12-07-2017
E
Date of payment 12-07-2017

Time of supply = 12-07-2017
And as per sec (13/4) the supply of service is identifiable at the time of issue of voucher
i.e., voucher can be redeemable for further services in ANU’s

Hence TOS = the date of issue of voucher
= date of payment
= 12-07-17
2) As per sec 13(4) when the supply of service is not identifiable at the time of issue of
voucher.
Then TOS= the date of redemption of voucher

Here the supply of services is not identifiable hence
TOS= date of redemption of such service.

Time of supply of service not determinable in accordance with sec 13(2), (3), (4) then the
tos will be as per 13/5)
In a case where periodical Return in any other case
has to be filled
TOS= the date on which Such TOS= the day on which tax is paid
return is to be filled
Example 1:
Surya ltd engaged in works contract and rendered services to the heaven apartments for
the worth of `5L supplier is intended to conceal the income hence not maintain the
information about invoice payment and completion a part from that requested the recipient
not to claim such amount as expenditure.

On investigation made by the GST Department managing director discloses his supply.
a) What is the time of supply (surya ltd is liable for filing of return )
b) What would be the tos if surya ltd is not liable for filling of the return and they paid GST
voluntarily during investigation?

Solution:
Here the above issue don’t covered under sec (13(2) (3)(4)
Hence we have to refer sec 13(5)

i.e. in case where periodical return has to be filled then tos= date on which return is to be
filled.
In any other case tos = the day on which tax is paid hence.
a) Here surya ltd is liable for filing of return then
Tos = date on which return is to be filled.
b) Here in this case surya ltd is not liable for filing of return but paid tax (GST) voluntarily
during investigation.
Hence Tos= the day on which tax is paid
Sec 13(6)
Any addition in the value of supply by way of interest late fee or penalty for delay
payment of any consideration
Tos= the day on which the supplier receives such addition in value
Example:
Value of supply= 10L
Infosys SBI
Doc: 01/05/18
DOI: 20/05/18
DOP: 30/05/18 (due date)
Delay penalty = 50,000
Actual payment: 28/8/18

Particulars DOC DOI DOP TOS
Service (supplier) WEE
(original consideration 10L) 01/05/18 20/05/18 28/8/18 28/8/18

(DOI)
Within 30 days
Penalty / excess late fee etc. - - 28/8/18 28/8/18
(DOP)
Infosys ltd rendered it services to the SBI for the worth of 10L on 1-05-2018 and invoice has
be issued 20-05-18 the due date for payment is 13-05-2018 with a clause of 50,000/- penalty
if there is any delay actual payment has be made by SBI banker on 28 th Aug. 2018 along with
penalty.
Determine the tos for original consideration and penalty

Time of supply of Goods (sec 12)
Time limit to issue the tax invoice order
Where the apply invoice the goods
In normal situations continuous supply of sale / approval

Goods basis
Apply involves Ant other case Invoice shall be issued on 1. At the time of
Element of the or before supply.

goods 1. Issuance of periodical 2. 6 months from
Statement the date of

2. Receipt of periodical removal
Payment
E.g.: reliance Tata

Time of supply of goods in general/ normal situations (Sec12 (2))
Particulars Date
The date of issue of invoice by the supplier XX-XX-XXXX W

E
The last date for issue of invoice. XX-XX-XXXX
E
The date on which the supplier receives the XX-XX-XXXX
Example:
Intex Company producing laptops and delivered to the Srinivas electrical and
communications on 20-aug-2108 for the worth of 20L invoice issued on 25th Aug. 2018.
Date of payment received on 31-aug-18

a) Determine time of supply
b) How year answer would be differ if invoice issued on 13-Aug-2018

c) How your answer would be differ if payment is given on 01- Aug - 2018.
Solution:
Particulars Situation (a) (b) (c)
Date of issue of invoice 25th aug 2018 13th aug 2018 25th aug 2018
W
Last date for issue of invoice 20th aug 2018 20th aug 2018 20th aug 2018
E
Date of payment E 31 aug 2018 31st aug 21018 01st aug 2018
Time of supply 20th aug 2018 13th aug 2018 01st aug 2018
Time of supply of goods under reverse charge sec 12(3)

Particulars Date
The date of receipt of goods XX-XX-XXXX

W
Date of payment made by recipient E XX-XX-XXXX
E
31st day from the date of invoice XX-XX-XXXX
Tas XX-XX-XXXX
Date of payment means:

a) The date of payment has entered in the books of accounts of the recipient = XX-XX-XXXX
b) The date of payment debited in his bank account = XX-XX-XXXX

DOP = XX-XX-XXXX

Example:
Kalyan jewellers purchased stationary items from rough stationary shop for the worth of
Rs. 30,000/- on 01-09-18

 Invoice issued by the supplier 10-09-18
 Expenditure recorded in the books of 12-09-18

 Amount debited in the bank account of kalyan jewellers 18-09-18
a) Determine TOS?
b) How your answer would be differ if payment given in cash 1-9-18
Solution:
Particulars Situation (a) (b)
The date of receipt of goods W 01-09-18 01-09-18

Date of payments E 12-09-18 01-04-18
E
31st date from the date of invoice 11-10-18 11-10-18
TOS 01-09-2018 01-09-18
Time of supply of vouchers by a supplier of goods sec 12(4)

If supply of goods is identifiable at the Time In all other cases
of issue of voucher
TOS= the date of issue of voucher TOS= date of Redemptions of voucher
Example:
Bata ltd issued vouchers to the Wipro ltd for the worth of 5,00,000/- which can be used for
purchasing of slippers and shoes which are covered under the 18% rate of GST.
a) Determine TOs?
b) How your answer would be differ if the vouchers can be utilized for purchasing of slippers,
ready mate garments, gifts etc.

Solution:
 TOS= date of issue of voucher
i.e., as per sec 12(4) if the supply of goods is identifiable at the time of issue of voucher
then,
Tos= date of issue of voucher.

 as per sec12(4) if the supply of goods is not identifiable at the time of issue of voucher
then,
Tos = date of redemption of voucher.
Here this case voucher can be utilized for purchasing of slippers, ready mate, gifts etc.,
hence the supply is not identifiable the
Tos = Date of redemption of voucher.
If the time of supply is not determinable in accordance with sec 12(2) (3) (4) in such a
situation time of supply will be as per (sec 12(5))
In case a person is liable for filing of the In any other case

return
Tos= the day on which return is to be Tos= the date on which the tax is paid
filled
Example: Tupperware ltd supplied plastic items to the surya ltd. For the worth of 12,00,000/-
and requested not to show as expenditure in his book of accounts, there up on supplier not
paid GST to the govt.
a) On investigation made by the GST council this transaction has encountered determine
TOS?
b) how your answer would be variety during investigating voluntarily such amount has been
paid (in this situation supplier is not liable for filing of return)
Note: DOC, DOP, DOI details are not available with the supplier.

Solution:
a) The day on which return is to be filed will be the time of supply as per sec 12(5) because
even though he does not disclose in the accounts if he liable to file the return then that
date of return filing will be tos.
Any addition in the value of supply by war of interest late fee and penalty for any delay in
payment of consideration sec 12(6)
TOS= the day on which the supplier receives such addition in value.
(Only to the extent of such additional amount)

Example:
Orbit tube light ltd supplied led tube lights to the Revanthi decorators on 1-06-18 for the
worth of 15,00,000/- invoice has been issued on 10-06-18 due date for payment is 25-06-18
with a penalty clause of 75,000/- if there is any delay. Finally recipient given consideration on
10-08-18
 Determine to for original consideration addition received in the form of delay payment
charges?
Solution:
Particulars Original Additional consideration

consideration (delay charges)
Date of issue of invoice 10-06-18 ---

W
Last date for issue of invoice 01-06-18 E ----
E
Date of payment made by recipient 10-08-18 10-08-18
TOS 01-06-18 10-08-18
Time of supply in case of excess payment up to 1000/- was made
TOS: the suppliers can choose the date of invoice issued with respect to such excess amount
as time of supply of goods or services
Note: (for sec 12(2), 13(2))

This provision will be applicable when suppliers received any excess consideration

i,e., over and above original consideration which can be adjustable in sub segment
considerations that to the value is ≤ 1,000/-
Example:
Adyta Birla ltd rendering telecommunication service to Mr. A, every month bill is 450 company
will issue invoice 5th of the following month due date is 20th of the following month.
Mr. A is one of the customer paid December Month bill on 20th Jan 2018 an amount of 500/-
due to non-available of change.
a) Determine TOS for original consideration, excess amount received?
b) How your answer would be differ if excess amount is more than 1,000/-
Solution:
a)
Particulars DOC DOI DOP TOS
Telecommunication service WEE
Dec month bill (450) 31/12/17 05/1/18 20/01/18 05/1/18

500/-
Within 30 days
Excess amount = 50 (500-450) - 05/02/18 - 05/02/18
Excess amount more than Rs. 1000 - - 20.01.18 20.01.18

(DOP)
b) If the excess amount is more than 1,000/- then the time of supply is the date on which
such advance amount received. Because it becomes as normal situation.

5. Value of supply
GST IS PAYABLE ON:
 Supply of the goods and or services for or consideration in the course or furtherance of
the business
 certain supplies made without consideration as specified in schedule-I
As GST is imposed a percentage of the value of supply hence it becomes important to
compute the value on which tax is to be paid.
Sec 15 of the CGST act and chapter 4 i.e., determination of value of supply of CGST rules
provides common provisions, guidelines from determining the value of supply.
Value of supply
Supply made to supply made to supply where price is supplier is notified

Unrelated person related person not the sole supply U/s 15(4)
Where price is the consideration
Sole consideration
Assessable value = value to be determined under chapter IV determination of value of

transaction value supply of CGST rules
U/S 15.
Sec 15: transaction value
Sec 15(1): applicability of transaction value

Sec 15(2): inclusions in transaction value
Sec 15(3): exclusions in transaction value

Applicability of transaction value sec 15(1):
When a transaction of supply of goods or services made

a) In b/w two persons who are not related to each other.
b) Price is the sole consideration for the supply then transaction value.
i.e., assessable value = transaction value + certain elements as specified sec 15(2)

Inclusions in transaction value sec 15(2)
 Price actually paid/ payable for the supply
 Taxes other than GST if charged by supplier.

 Payment made to third person/ party on behalf of the supplier in relation to supply
 Incidental expenses such as commission packing charges anything done by the supplier
in respect of the supply of goods or service of the time or before delivery.
E.g.: inspection, installation expenditure.
 Interest late fee and penalty for delay payment of consideration
 Subsidies provided in any manner which is linked to the price, other than subsides given
by govt.
Example (for point (b)):

Mr. X rendered Exhibition services to japank bubble
1) Building rent=5L
2) Municipal taxes= 50 k
3) Decoration items= 2L
GST@12% = 24K = 2,24,000

4) Other expenses = 1,50,000
5) Profit margin = 3,00,000

On incurring of the above expenditures service rendered by Mr. X
Determine value of supply?

Solution:
Particulars Amount
Building rent 5,00,000
Municipal taxes 50,000

Decoration items 2,00,000
Other expenses 1,50,000

Profit margin 3,00,000
Value of supply 12,00,000

Note: GST value is excluded from the value of decorated item as per sec 15(2)

Example (for point (c)):
Maura rendered out door catering services to the Wipro ltd on their 25th annual general
meeting the bill amount charged by the Maura is 35L/- out of which directions has been given
by Maura to pay 15L to reliance fresh remaining balance to the supplier determine value of
supply?
Solution:
Particulars Amount
Consideration given to supplier 20L
At the directions of supplier 15L

Value of supply 35L
Example (for point (d)):

Nagarjuna University given an order to the kirlosker ltd for 125kb generator. The value of
generator is 8L a part from that some other incidental expenses has been charged those are
1) packing charges =10,000
2) Loading and unloading charges = 25,000
3) Installation charges = 25,000

4) Amt for 2years warranty =40,000
5) Components and tool kit =12,000

On total value of 5% discount has been given determine the value of supply?
Solution:
Particulars Amount
Packing charges 8,00,000

Loading and unloading charges 10,000
Loading and unloading charges 8,000

Installation charges 25,000
Amt for 2 years warranty components and tool kit 12,000

Total 8,95,000
Discount @5% 44,750

Value of supply 8,50,250

Example: (for point (e)):
Canon company delivered Xerox machine to the Suresh off set printers, the value of Xerox
machine= 5L the due date is 10-08-18 with a penalty clause of 75,000/- recipient unable to
pay with in the due period. Determine?
Solution:
Value of the machine = 5,00,000
Add: Penalty for delay payment = 75,000
Value of supply = 5,75,000
Example (for point (f)):

Nandi Company producing note books and supplying in the market @40/- each. On
directions given by the government supplier delivering notebooks to the students @ 25/-
each. Remaining balance will be given as subsidy grant to the supplier
a) Determine the value of supply?

b) What is the value of supply, if subsidy given by Tata companies?
Solution:
a) Value of the supply= 25/- @ each

Since the value of subsidy given is included in the value of supply except govt subsidy as
per sec 15(2).

b) Value of the supply = 40/- @ each
Here subsidy is included because it was given by Tata companies which is other than govt
bodies.

Discount sec 15(3)
CA-IPCC- GST
discount given at the time of supply before to the supply after to the supply
NO
Is discount amount separately shown in invoice 1. In term of an agreement discount existed at
YES the time of supply NO
Not included in value of supply 2. discount linked to the invoice

NO
Section 15(3)
Included in Value of Supply 3. proportionate ITC has been reversed by
recipient
NO
Exclusion in Transaction value
YES
Contact No. 9133430222, 9133530222

Page |59
Example:
Sony vision a retailer purchased 42 inches TV’s from Samsung company at a price of
40,000/- with a normal discount of 5% a part from that Samsung company given can offer if
Sony vision sells more than 1000tv’s they will get 8% special discount this offer has been given
at the time of supply.

Within 20 days Sony vision sells 1020 TV’s and requested discount from Samsung on the base
of which special discount has been granted.
a) Determine GST has to be collected by the Samsung
(Proportion reversal has been done by Sony vision)

b) What would be the impact on GST payable of special discount has been to clear the old
stock.
Solution:
a) Invoice Amount
Value of supply 40,000

(-) discount@5% 2,000
38,000
(-) discount @ 8% (40,000 X 8%) (3,200)
34,800
Add: GST @ 18% (34,800 X 18%) 6,264
41,064
As per sec 15(3) here the discount given by Samsung to Sony vision is before or at the
time of supply of good. And the Sony vision also made reversal of proportionate and the
Sony vision also made reversal of proportionate.

ITC hence the GST can be payable on 34,800/- only.
b) Price 40,000
(-) discount 5% 2,000

(-) special discount (3,200)
34,800

Add: GST @ 18% (38,000 X 18%) 6,840
41,680
Here GST is liable to pay on 38,000/- because here the discount given to Sony vision after
to the supply to clear the old stock. It is not existed at the time of agreement hence GST
is liable to pay on the amount after avail of normal discount.

6. INPUT TAX CREDIT UNDER GST,MATCHING,REVERSAL AND
RECLAIM OF ITC
 A person who is a registered person supplies goods or services or both liable for payment
of the GST being it is his outward supply.
 while payment of GST on outward supply, whatever the taxes paid under the GST act on
inward supply can be avail as credit
 Even after availement of the credit if there is any excess balance of credit it has to be carry
forward to the subsequent periods.
 After availment of the credit if there is any net GST payable it has to be paid through
internet banking as his liability.
Relevant Definitions:
Capital goods [Sec 2 (19)]:
Capital good means

 The value of which is capitalized on books of accounts of the person claiming the ITC.
 Which are used or intended to be used in the course or furtherance of business.
Input [sec 2 (59)]:
Input means:
 Any goods
 Other than capital goods

 Used or intended to be used by a supplier in the course or furtherance of business.
Input tax [sec 2 (62)]:
 The central tax, state tax, integrated tax or union tertiary tax
 Charged on any supply of goods or service or both

 But does not include the tax paid under the composition levy.
Input tax credit [sec 2(63)]:
Input tax credit means the credit of input tax.

Output tax [sec 2(82)]:
Output tax in related to taxable person means:
 The tax chargeable under this act on taxable supply of goods or services or both made by
him or by his agent
 But exclude tax payable by him on reverse charge basis.

Taxable supply, exempt supply, Non-taxable supply,
Aggregate turnover, taxable person definitions are as discussed in the previous chapters.
Chapter overview:
 Sec 16: eligibility conditions for availing input tax credit

 Sec 17: apportionment of credit in special circumstances
 Sec 41: claiming of ITC & provisional acceptance there of

 Sec 42: matching, reversal &reclaim of ITC
 Sec 49: payment of tax, interest, penalty & other amounts

 Sec 18: availability of credit in special circumstances
SEC-16
Eligibility & conditions for availing input tax credit
Sec 16 (1): Eligibility for ITC
 Every registered person shall be entitled to ITC to the extent of GST paid on inward goods
or services.
 Provided those invoice supply must be used in course or furtherance of his business
 GST paid on inward supply will be credited to electronic credit ledger.
Sec 16(2): conditions for availing ITC
1. Any of the following document shall be in the possession of registered person for
claiming ITC
 invoice issued by the supplier of good & or services

 invoice issued by the recipient along with the proof of payment of the tax (in case of
reverse charge)
 A debit note issued by supplier
 Bill of entry or lll’er document prescribed under custom act

 Revised invoice (no concept in GST but expect for 1 situation)
 Document issued by input service distributor.
2. The person taking the ITC must have received the good & or services
“Bill to ship to Model“:
 Under this model the goods are delivered to third party on the directions of the
registered person who purchase the goods on the directions of registered person, by
the way of transfer of document of title of goods either before or during the moment
of goods.
 So that even goods are delivered to third party it would be deemed that registered
person has received the goods hence registered person can avail ITC
Example:
XYZ ltd engaged in manufacture of home appliance given an order of silver raw
materials to the PQR ltd to deliver the goods to the job worker. On the basis of
direction of the manufacturer. Supplier delivered the goods to job worker.
Can manufacturer avail ITC?

Solution:
Yes (Bill to ship to model also included).

3. Tax liveable on supply actually paid to govt
 Tax should actually paid in cash or through utilization of ITC on the goods or service
for which ITC is being taken
 However provisional ITC can be taken initially prior to matching in the common portal
& used for payment of self-assessed tax on outward supply.
4. Filing of return
The registered person taking the ITC must have filed his return U/S 39.
5. Goods received in lots /instalments

In case the goods covered under an invoice or not received in single consignment, but
received in lots or instalments the ITC can be taken only upon the receipt of last lot or
instalments. E.g.: fans example

6. payment for the invoice to be made within 180days
 The registered person must pay to the supplier the value of the goods or services along
within 180 days from the DOI.

 If he fails to do so, recipient has to provide the details of such supplies & corresponding
credits there on must be furnished in the GSTR-II of the month immediately following
such 180 days
 Registered person shall, previous availed credit should have been paid to the
government along with 18% of interest from the date of availing of credit till the date
of when the payment is made to the government

Exceptions: (For point no: 6)
 supplies on which tax is payable under reverse charge

 Deemed supplies without consideration.
Sec 16(3): if depreciation claimed on tax component ITC not allowed

 If the registered person availing ITC on capital goods, plant& machinery has claimed
depreciation on the tax component under the income tax act, 1961 then ITC on the tax
component shall not be allowed

 i.e. either depreciation on tax component or ITC.
Solution:
Value of P&M =10,00,000
GST@18% = 1,80,000
11,80,000
Value capitalized an Amount of 10L P&M value capitalized an
amount of 11,80,000
i.e. GST not capitalised i.e. GST amount capitalised
Avail ITC (1,80,000) a) ITC cannot be availed

Claim dep on 10 L as per IT act b) Claim depreciation on
1961 11,80,000
Example:
Turbo ltd purchased a plant & machinery for the worth of 10 L &GST amount has to be
capitalized or to avail ITC. Give your suggestion & which option is beneficial to the company?
Sec 16 (4): time limit for availing of ITC
a. Due date of filing of return for the month of September of succeeding
Financial year (20th Oct) = XX-XX-XXXX
b. Due date for filing of annual return (31st Dec) = XX-XX-XXXX

c. Actual date of filing of annual return = XX-XX-XXXX
Time limit for availing of ITC = XX-XX-XXXX
Exception: (to sec 16 (4))
This time limit is not applicable for availing of credit that had been reversed earlier
Example:
Triple platinum ltd purchased a generator on 15-09-2017 for the worth of 6L along with 18%
GST due to negligence of the accountant credit not availed in the subsequent period. While
cleaning the accounting department premises. Above, invoice has been encounted on 15th
July 2018.here give your suggestion can the company avail ITC under following situation.
a) annual return has to be filed on 15-05-2018

b) annual return has been filed on 15-11-2018
Particulars Situation -1 Situation -2
a. Due date for filing of return for the month of September
of succeeding financial year 20-10-18 20-10-18
b. Due date for filing of annual return 31-12-18 31-12-18

c. Actual date of filing of annual return 15-05-18 15-11-18
Time limit for availing of ITC 15-05-18 20-10-18

(Can not avail)

SEC 17
Apportionment of credit & blocked credit
Sec 17 (1), (2): Apportionment of ITC
Sec 17 (1) Sec 17 (2)

Goods or services used Partly for business Goods or services used partly for taxable
& Partly for other use supplies & partly used for exempt supplies
The amount of credit restricted to the the amount of credit restricted to the Extent
extent of goods or services used for of taxable supplies
business pupose.
 Taxable supply include zero rated supply

 Zero rated supply means:
 Export of goods or services
 Supply made to special economic zone

Explanation:
Inward supply
Business sec 17(2) Other sec 17(1)
Taxable Exempt no ITC
Avail ITC no ITC

Example: XYZ Ltd.
ABC ltd
V.S = 10 L Supplies
GST @ 12% =1.2 L
11.2 L SEZ PQR Ltd MN Ltd

(Zero rate) (Taxable) (Exempt)
Can’t avail ITC Can’t avail ITC Can’t avail ITC
Sec 17 (3):
Inclusions in exempt supplies & valuation for the purpose of sec 17
Except supply includes:

 Supply on which the recipient is liable to pay tax on reverse charge basis e.g.: insurance
co & its agent concept

 Transaction securities e.g.: stock exchange (Bombay stock exchange, national stock
exchange)
 Sale of land & building subject to schedule II (R i.e. renting of immovable property)
e.g.: suvarna bhumi (real-estate business)
Sec 17 (4):
Special provisions for ITC in case of banking company

& financial institution (including NBFC)
Comply with the provisions of sec 17(2) i.e. goods or services used for rendering
goods or services used partly used for taxable & exempt supply then avail50% of
taxable supply & partly used for exempt the eligible ITC on inputs capital goods &
supply input services for every month
the amount of credit restricted to the extent after availment of 50% ITC the remaining
of the taxable supply balance will lapse

1. options-1 exercised cannot be withdrawn during financial year
2. 50% of restriction shall not apply to the tax paid on supplies made by one registered to
another registered person having the same PAN.

Sec 17(5): (Blocked credit)
Ineligible inputs/capital goods / input services

ITC shall not be available in respect of the following:
Sec 17(5) (a): motor vehicle and other conveniences
Exception: However credit can be available when motor vehicle and conveyances used for
1. a) Further supply of such vehicle or conveyances ( renting of motor vehicle)

b) Transportation of passengers
c) Imparting training on during flying navigating such vehicles and conveyances

2. For transportation of goods
Sec 17(5) (b):

Subclasses:
 food and beverages , outdoor catering beauty treatment, health services cosmetic and
plastic surgery
 membership of club health and fitness centre
 Rent a cab life insurance and health insurance

 Travel benefit extended to employees on vacation such as leave or home travel concession.
Exceptions:
1. For sub clause (1) and (3) such inward supply of goods or services or both of a particular
category is used by a registered person for making an outward taxable supply of the same
category of goods or services or both as part of taxable composite or mixed supply.
(exception for 1 and 3)

Example:
1. No same line of
Renting of immovable business. No ITC
(Recipient)
property + outdoor categories
Outdoor
Geetha Subham kalyana mandapam ITC company meeting
category
(Supplier) Same line of business. (Supplier) (Recipient)
ITC allowed

Value = 10,00,000
GST @ 12% = 1.2L
= 11.2L
Supplying value = 6L
GST @ 12% = 72,000

= 6,72,000
Example:
2. For clause (3) note (2):
If the government make a provision

 Insurance must to the employee
 Must provide cash services for the employees from remote area.
 In obligation of health services to the industry under safeguard
 For sub clause (3) government notifies the services which are obligatory for an
employer to provide to his employees under any law for time being in force
 In above two situations ITC can availed.
(Sec 17(5) (c)):

Work contract services supplied for construction of immovable property not eligible for
input tax credit

Exception:
However credit can be availed if

 Where it is an input service for further supply of works contract services.
 Where it is supplied for construction of plant and machinery.

Explanation:
 Plant and machinery means apparatus equipment and machinery fixed to earth by
foundation or structural support that are used for making outward supply but does not
include
 Land , building or any other civil structure
 Telecommunication towers
 Pipelines lied on outside the factory premises

(Sec 17(5) (d)):
Input or input services received for construction of immovable property not eligible for ITC.
Goods or services or both received by a taxable person for construction of an immovable

property in his own account whether it may be for personal or in the course of furtherance of
the business not eligible for ITC.

Exception:
 It is an input service for further supply of construction service.
 It is supplied for construction of plant & Machinery
(Sec 17(5) (e)):

“Inputs under composition scheme”
Goods or services (both on which tax has been paid u/s (i.e., composite levy) on inward
supplied of goods / service not eligible for ITC.
Example:
Engaged in
composition scheme
XYZ Ltd Ravi provisions
Water bottles Trader
Manufacturer Sec 17 (5) (e) (Not avail ITC)
Sec 10 (Not avail ITC)
Sec 17(5) (7):

“Input by a non – resident”
Goods or services or both received by a not resident taxable person except on goods
imported by that means for supply of goods / services by non- resident taxable person in
India any inwards supply received not eligible for ITC. However while importing goods into
India the amount of IGST paid can be avail as ITC.
Example:
Mr. Chamanial imported diamonds for the worth of 100l along with IGST of 3% for selling of
diamonds in India following inwards supply has been received.

Particulars Amount GST
1. Hotel accommodation 5,00,000 60,000
2. Advertisement 1,00,000 18,000

3. Security services 2,00,000 10,000
Entire diamonds has been sold for the worth of 140L + 3% GST
Compute GST payable?
Note: Mr. Chamanial is non-resident taxable person.
Solution:
GST payable is = 140 X 3%

= 4,20,000
(-) ITC of GST = (3,00,000)

Paid on 100L @ 3%
Net GST payable = 1,20,000

Note: All inward supply is not eligible to avail ITC
Sec27 (5) (g): Personal consumption
Goods or services or both used for personal conniptions not eligible for ITC
Sec 17(5) (b): “lost or stolen goods etc.”
Goods lost, stolen, destroyed, written off, or disposal of by way of gift or free samples.
Example:
XYZ ltd purchased 100 panels for manufacture of TVS. While producing TVS 25 panels are
destroyed in fire accident determine the implication on ITC?
The goods which are destroyed in fire accident not eligible for ITC. Hence XYZ ltd can avail
ITC only in relating to 75 panels
Note: however if company availed ITC on 100 panels, when fire accident taken place on the
day credit has to be reversed to the extent of 25 panels.
Particulars CGST SGST

1. GST payable 2,10,000 2,10,000
Less:
IGST credit (3,00,000)

Excess IGST credit 90,000
Excess IGST credit (90,000)
Net SGST payable 1,20,000
(Sec 17(5) (1)): “Evation confiscation etc.”

Taking into the custody by department)
Any tax paid in accordance with provision 07 sec74, sec 129, sec 130 not eligible for ITC.
(Example: ITC wrongly avail / fraud / seizure/ erroneously refunded).
Sec 18:
Availability of credit in special circumstances
Sec 18(1): availability of ITC in special circumstances

Sec 18(2): time limit to take ITC
Sec 18 (3): transfer of ITC an account of change in constitution.

Sec 18 (4): ITC reversal on switching over to composition scheme or taxable supply become
exempt supply
Sec 18(5): amount to be calculated in prescribed manner for 13(1) and (4)
Sec 18(6): supply of plant and machinery after views tax implication.
Sec no Special circumstances ITC on I.G and C.G

18 (1)(a) Person who has applied for registration within 30 Input held:
days from the date on which he becomes liable to 1) In stock

get registration and has be obtained such 2) In semi-finished
registration 3) Finished goods

(+)
Not ITC on capital goods

(1) (b) Person who is not required to register but obtain Input held:
voluntary registration 1) In stock

2) In semi-finished
3) Finished goods

(+)
(1) (c) Registered person who ceases to pay composition Input held:
tax hence switches to regular scheme 1) In stock
Example: 2) In semi-finished
1) a person who turnover crosses 100L 3) Finished goods
2) Voluntarily composite dealer adopt regular (+)
scheme in next financial year. Not ITC on capital goods
(+)
ITC on capital good
allowed after reducing 5%

per quarter from DOI
(1) (d) Registered persons who exempt supplies become Input held:
taxable supplies 1) In stock
2) In semi-finished
3) Finished goods
(+)
ITC on the day of Condition

 The day immediately preceding the day ITC can be availed within 1 year from the
from which it becomes liable to pay tax date of the tax invoice given by the
(irrespective of the registration) supplier.
 The day immediately preceding the date ITC can be availed within 1 year from the
of registration date of the tax invoice given by the
supplier.
from which he becomes liable to pay tax date of the tax invoice given by the
under regular scheme supplier.

(+)
1year invoice concept not applicable to
the capital goods

from which such supply becomes taxable date of the tax invoice given by the
supplier.
Example:
Mr. Naresh carrying the business with taxable supply of goods in Amaravathi being
his turnover less than or equal to 20L he didn’t obtain any registration up to 1-8-18 on 31 st
July 2018 he turnover reached to 20L hence be made an application for registration and obtain
on 20-08-18. Remaining details as follows.
On On
31/7/18 19/3/18
Particulars day before to liable day before to
for payment of GST obtaining registration

 Inputs goods held as stock 5,00,000 4,50,000
 Value of semi-finished goods 8,00,000 9,00,000
(SFG consists 30% of raw material)

 Value of finished goods 12,00,000 10,00,000
(FG consists 20% of raw material)

 Capital goods purchased on 1-10-17 for the worth of 20L + 18% GST
Note: Rate of GST on inward supply 12%

Determine the amount of ITC that can be availed by Mr. Naresh?
Solution:
Statement showing ITC that can be availed by Mr. Naresh
Particulars Amount (ITC)

1) Input good (5,00,000 X 12%) 60,000
2) Value of semi-finished goods (8,00,000 X 30%12%) 28,800

3) Value of finished goods (12L X 40% X 12%) 1,00,000
4) Capital good purchase on 01.10.17 for the worth of Rs. 20L + 18% GST
Note:
1) As the absence of the information about the date of invoice I am presuming that all the
invoices are in related to input goods within 1 year from the date of issue of invoice to the
date of liable for payment of GST
2) Capital goods purchase in exemption availed period not eligible for ITC.
Example 2:
Mr. Naresh carrying the business with taxable supply of goods in Amaravathi even though his
turnover is < 20,00,000/- voluntarily he made an application for registration on 1-8-18 finally
department given registration on 20-8-18 remaining details as follows.

On On
31/7/18 19-8-18
Particulars Day before to making Day before to
an application obtaining registration
 Inputs goods held as stock 5,00,000 4,50,000

(SFG consists 30% of raw material)

(FG consists 70% of raw material)

 Capital goods purchase on 1-10-17 for the worth of 20L + 18% GST
Note: rate of GST on inward supply 12% determine the amount of ITC that can be availed by
Solution:
Statement showing ITC that can be availed by Mr. Naresh

Particulars Amount
1) Input goods (4,50,000 X 12%) 54,000

2) Value of semi-finished goods (9,00,000 X 30% X 12%) 32,400
3) Value of finished goods (10,00,000 X 70% X 12%) 84,000

4) Capital goods ( purchase under exemption period / before voluntary Nil
registration)
ITC can be availed 1,70,400

Example 3:
Mr. Naresh carrying the business with taxable supply of goods under composition scheme at
Amaravathi being his turnover near to 100L he has to convert in regular scheme hence he
made an application to the department on 1-8-18 a part from that he liable for payment of
GST at regular rates form on the date on wards department given conformation abound
conversion on 20th Aug. 2018

Remaining details as follows:
On On
31-7-18 19-3-18
Particulars Day before to liable Day before the

for payment of GST obtaining registration
 Input goods held as stock 5,00,000 4,50,000
 SFG consist of 30% of raw material 8,00,000 9,00,000

(FG consists 70% of RM)

 Capital goods purchased on 01.10.2017 for the worth of 20L + 18% GST.
Note: rate of GST on inward supply 12%

Determine the amount ITC that can be availed by Mr. Naresh?
Solution:
Statement showing ITC that can be availed by Mr. Naresh:
Particulars Amount
Input goods (5,00,000 X 12%) 60,000
Value of semi-finished goods (8,00,000 X 30% X12%) 28,800

Value of finished goods (12L X 70% X 12%) 1,00,800
Capital good (working not) 2,88,000

4,77,600

1/10/17 to 31/7/18 4 quarters
Calculation of capital good ITC ailment:
GST paid on CG (20,00,000 X 18%) =3,60,000

Less: 5% per quarter = (72,000)
(3,60,000 X 5% X 4Q)
Amount eligible for ITC = 2,88,000
Note: note point 1 as same of example but whereas note 2 not applicable for this.
Example 4:
Mr. Naresh carrying the business with exempt supply of the goods in Amaravathi even though
his turnover is more than 20L he didn’t obtain registration due to exclusive dealing with
exempt supply.
Government given a notification on 01-09-18 his supply will be taxable with effective from
20-08-18 remaining the details as follows:

On On
31/7/18 19/3/18
Particulars Day on which Day on which the supply

notification of GST arias will be taxable effectively
 Input goods held as stock 5,00,000 4,50,000

 Value of SFG (semi-finished 8,00,000 9,00,000
goods consists of 30% of RM

 VALUE of finished goods 12,00,000 10,00,000
(for consists of 70% of RM)

 Capital goods purchased on 1-10-17 for the worth of 20L + 18% GST
Note: Rate of GST on inward supply is 12% determine the amount of ITC that can be availed
by Mr. Naresh.

Solution:
Statement showing ITC that can be availed by Mr. Naresh:
Particulars Amount
Input goods (4,50,000 X 12%) 54,000
Value of SFG (9,00,000 X 30% X 12%) 32,400

Value of FG (10,00,000 X 70% X 12%) 84,000
Capital goods (working note) 2,88,000
[Purchase under exemption period ITC can be availed 4,58,400
1/10/17 to 31/7/18] 4 quarter
Calculation of CG availament:
GST paid on cg (2,00,000 X 18%) = 3,60,000
Les 5% per guarter = (72,000)

(3,60,000 X 5% X 4Q)
Amount eligible for ITC = 2,88,000
Note:
Note point 1 is same as the example 1 and note point 2 is not applicable
Sec B (2)
Time limit to avail ITC- 1year from the date of invoice
A registered person shall not be eligible to take credit v/s 18(1) in respect of any supply of
goods or services or both to him after the expiry of 1year from the date of issue of invoice
relating to such supply

Example: XYZ ltd dealing with exempt supply of the goods government notified this goods
as taxable supply with effective from 25th Jan 2018 to take on the day following invoice are--
-----------
Invoice dated 15-07-17 GST amount = 25,000

Invoice dated 02-jan-17 30,000
Invoice dated 13.-sep-17 35,000

Solution:
ITC can be availed under category and c dates of invoice where as it is not available in ‘b’
because ITC can be availed for the invoices with in 1year on the day before the liability of
GST arises
Sec 18(3)
Transfer of ITC an account of change in constitution
Where there is change in the constitution of registered person an account of
a) Sale b) merger c) de-merger d) amalgamation e) leases f) transfer of the business.
The said registered persons shall be allowed to transfer the ITC remains utilize in his electronic
credit ledger to transferred
Note:
 In the case of de-merger ITC will be apportioned in the ration of the value of
assets of new units

 For transfer of credit registered persons has to obtain ITC eligible certificate
from charted accountant or cost accountant who is in parties.
Sec 18(4)
ITC reversal on switching over to composition scheme.
Where any registered person who has availed of ITC

 Opts to pay tax v/s 10 (i.e., composition scheme)
 Where the goods or services or both supplied by him become wholly exempt
He shall pay an amount by way of debit in the electronic credit ledger or electronic cash ledger
equivalent to the credit of input tax in respect of
a) Inputs held in stock

b) Inputs contained in semi-finished goods held in stock
c) Inputs contained in finished goods held in stock

d) Capital goods reduced by such percentage of points as may be prescribed (by taking
useful life of capital goods as five years i.e., 60 months

Balance credit shall lapse:
After payment of such amount the balance of ITC laying in his electronic credit ledger shall
lapse
Example:
Mr. Naresh carrying the business with taxable supply of goods in Amaravathi for the financial
year of 17-18 for next financial year 18-19 he want to the department on 15-march-18
remaining details as follows:
Particulars On 24th mar 2018 31st march 2018
 Raw material in stock 6,00,000 7,00,000

(SFG consists 40% of RM)

 Value of finished goods 14,00,000, 12,00,000
(FG consists 70% of RM)

 Capital goods purchase on 1-8-17 for the worth of 15l + GST @ 18%
Note: rate of GST on inward supply 12% determine the amount of ITC to be reversed in the
following two situations

 Amount credited in electronic credit ledger is 2,00,000
 Amount credited in electronic credit ledger is 8,00,000

Solution:
Statement showing ITC that can be reversed by Mr. Naresh

Particulars Amount
Amount credited in electronic credit ledger 2,00,000

Input goods held as stock (7,00,000 X 12%) 84,000
SFG (8,00,000 X 40% X 12%) 38,400

FG (12,00,000 X 70% X 12%) 1,00,800
Capital goods (working note) 2,34,000

Amount that has to be reversed 4,57,200

Working note:
Calculation on capital goods: linked up (8(1) (c) & (d))
GST on capital goods (15L X 18%) = 2,70,000

Less: Eligible credit (2,70,000 X 8M / 60M) = 36,000
Particulars Situation –a Situation- b

Credit in electronic credit ledger (E.C.L) 2,00,000 8,00,000
Less: ITC to be reversed (4,57,200) (4,57,200)
Amount to be paid 2,57,200
Excess ITC will be lapsed

3,42,800
SEC 18(5)
THE amount of credit that can be availed v/s 18(1) the amount of credit to be reversed in sec
18(4) shall be determined in such manner as may be prescribed
SEC 18(6)
Supply of plant and machinery after use – credit implication In case of supply of capital goods
or plant and machinery on which input tax credit has been taken the registered person shall
pay higher of the following amount

 Amount of input tax credit taken XXXXX
(-) 5% per each quarter or part thereof on ITC of

capital goods (XXXXX)
XXXXX
 GST on transaction value of CG or plant and
machinery as per SEC15 XXXXX

Amount to be paid / debited to electronic credit ledger XXXXX
Example:
 XYZ ltd registered under normal scheme of GST and dealing with taxable goods company
purchased a capital good on 01-07-17 for the worth of 2,00,000 + 18% GST due to finance
crises above capital goods has been sold for the worth of 14,00,000 on 01-09-19.

 Will your answer will be differ if CG has sold for 8,00,000?
Solution:
a)
 amount of input tax credit taken on 3,60,000
Less: 5% for each quarter or Part thereof on ITC of CG (1,62,000)

(3,60,000 X 5% X 9Q) 1,98,000
 GST on transition value of capital goods or plant and machinery
as per sec 15 (14,00,000 X 18) 2,52,000
Amount to be paid / debited to E.C.L 2,52,000

b)
 Amount of input tax credit taken on 3,60,000

less: 5% for each quarter or part thereof on ITC of CG 1,62,000
1,98,000
 GST on transaction value(as per sec 15) 1,44,000
(8,00,000 X 18%)
Amount to be paid/ debit to E.C.L 1,98,000

Note: if refactors bricks moulds and dies gigs and fixtures or supplied as scrape then tax
levied on transaction value.

5% reversal concept not applicable
Sec41: Claim of ITC and provisional acceptance there off
Claim of ITC on Provisional basis utilization of ITC for payment of output tax
Every registered person shall be eligible for the amount credited to ECL shall be utilized
ITC subject to Conditions self-assessed only for payment of self-assessed output
Credit can be utilized on Provisional basis tax as per the return

Sec 42: Matching, Reversal & Reclaim of ITC
GSTR -1 Outward supply “Registered person” GSTR -3 of XYZ Ltd

GSTR – 2 Inward supply GSTR – 3 of AB Ltd
GSTR – 3 Final return GSTR – 3 of PQR Ltd
Credit availed by recipient will match NO

with outward supply of suppliers
Availed credit by
YES
recipient in valid one GSTN (system) will give intimation to
Supplier about Discrepancy
Is supplier responded
YES NO
& despcrency rectified.
Amount paid by Recipient can The amount of ITC availed earlier by recipient will
be adjusted for output tax be added to his outwards liability in next month
liability and interest will be

credited to E.C.L A/C
There upon recipient is liable for of such credit
amount along with interest @ 18%
YES Is the suppler responded and

NO
rectified in the near future
The recipient may not be
willing to continue the

relationship with supplier

Invoice properly If availed credit is valid one in accordance with sec42
matched
Consideration along with GST has to be paid to the

supplier by recipient within 180 days from the date
of Invoice (sec16 (2))
If not paid as above recipient has to disclose such
information in GST-11 of the month immediately
following such 180 days
There up on availed credit would be added to his

output Tax liability
Debiting TC
Liability has to be discharge along with interest of
account /
18% p.a.
Payment in Cash
However once the payment is made any such

reversed Amount / paid amount can be availed as
credit
Sec 49 is explained in chapter – 1 under frame work of GST with point No: 3 i.e., availement
manner of ITC
Manner of availment of ITC (pg. no: 13 in 1 chapter)

7. REGISTRATION
INTRODUCTION:
In any taxation system registration is the most fundamental requirement for identification of
tax payer insuring tax complains in the economy

With a registration a person can neither collect tax from his customers nor client any
credit of tax paid by him
Prior to introduction of GST i.e., under earlier laws
 Service provider were required to be registered with service tax department and it may be
single or multiple or centralized registration
 Where a person is a trader of goods has to obtain registration with state vat department
i.e., state wise institution.
 A person who carrying manufacture activity has to obtain registration with central excise
department for each and every factory even though all are located in same city or state
(subject to small exemptions)
 A business entity having branches in multiple state will have to obtain to separate state
wise registration for the branches in each state.
Relevant definitions:
 Exempt supply
 Business
 Registered person As we discussed
 Taxable supply in earlier chapters
 Taxable territory
 Taxable person
 A place from where the business is ordinarily carried on and includes a warehouse, a
godown or any other place where a taxable person stores his goods supplies or receives
services of goods or both or
 A place where taxable person maintains his books of accounts and

 A place where a taxable person is engaged in business through an agent by whatever
name called,

Agriculturist:
Means an individual / HUF who under takes cultivation of land:
 By own labour
 By the labour of family or
 By serpents on wages payable in cash or kind or

 By hired labour under personal supervision or the personal supervision of any member
of the family.
Principle place of business:
Means the place of business specified as the principle of business in the certificate
of registration.
Example:
Srinivasa electrical having branches in AP for all the branches single registration is
enough however for proper communication with department a permanent place of

business has to be given out of the all the branches any one branches has can be chosen
as ppb.
Note: Other than principle place of business will be treated as additional place of business.
Tax period:
Means the period for which the return in required to be furnished.
Example: For regular / normal dealer: 1 month and
For composite dealers: 3 months

Chapter overview:
Sec 22: persons liable for registration

Sec 23: persons not liable for registration
Sec 24: compulsory registration in certain cases

Sec 25: procedure for registration
Sec 26: deemed registration
Sec 27: special provisions in relation to casual’s taxable person & non – resident taxable
person
Sec 28: amendment of registration

Sec 29: cancellation of registration
Sec 30: revocation of cancelation of registration
Sec 22: Persons liable for registration
 Threshold limit for registration:
 Every of supplier of goods / services or both is required to obtain registration

 In the state / union territory from where he makes the taxable supply.
 If his aggregate turnover exceeds 20,00,000/- in a financial year

Note:
If person carrying the business in special category states threshold limit reduce to
10,00,000/-
Aggregate turnover
Includes Excludes
 Taxable supplies  CGST
 Exempt supplies  SGST

 Exports  UTGST
 Interstate supplies of persons having  IGST

the same pan be computed on all  COMPENSATION CESS
India basis  VALUE OF INWARD WAUPPLIES ON

WHICH TAX IS PAYABLE UNDER
REVERSE CHARGE
If a person having place of business in different states across India has on branch in any
of the special category state then the threshold limit for GST registration will be reduced
to 10,00,000/-
 Registration required only for a plane of business from where taxable supply takes place.
 A person is required to obtain registration with respective each place of business in
India from where a taxable supply has taken place.

 However a supplier is not liable to obtain registration if his aggregate turnover consists
exclusively of good or services or both which are not taxable under GST.

Example: Mr. Aroghya carrying milk business and 22 lakhs
 Whether Mr. Aroghya has to obtain registration under GST
 Suppose Mr Aroghya has provision shop and its turnover is 2,00,000/- a part from
milk business.
In such a situation how your answer would be differ?

 Aggregate turnover consists exclusive of non- taxable supply hence need not
obtain registration under GST act
 His aggregate turnover consists taxable supply and exempt supply hence for the
purpose of the registration total turnover has to be considered. Being his turnover
more than 20L obtain registration
 Tax payers registered under earlier indirect tax rows required to migrate:
 All the tax payers who were registered under various earlier indirect tax laws are liable
to be register under GST with effective from the act commencing date
 On conversion application given to the department, application reference number will
be provided on the basis of which final registration would be granted within 6 month
from the date of allotment of ARN (application reference number).
 Persons liable for registration in case of transfer (or) succession of business:

 Where a business is transferred whether an account of succession / transfer/ any other
reason to another person as a going concern (without liquidation to another person)

 There up on the transfer or successor is to be registered with effective from the date
of such manner.
Example:
Mr. A obtain the business of his grandfather on his death now Mr. a want to continue the
business by holding his grandfather GST registration certificate suggest?
Solution:
Mr. A has to obtain new registration and his grandfather registration has to be surrendered
and it will cancel accordingly.

Sec 23: persons not liable for Registration
 Person engaged exclusively in supplying good or services or both wholly exempt from tax
 Agriculturist to the extent of supply of produce out of cultivation of land.

 Specified category of persons as notified by the govt.
 Persons making only reverse charge supplies exempt from obtaining registration
E.g.: insurance agent, director, artist may engaged exclusively in reverse charge supplies,
hence need not obtain any registration under GST.
Sec 24: Can plasory registration in certain cases
Following category of persons are mandatorily required to obtain registration under GST
irrespective of turnover:
 Person making any interstate taxable supply

Example:
Mr. Ramesh is a trader located in Guntur and his intra-state supply is Rs. 6,00,000. He
received an order from Tamil Nadu for the worth of Rs. 5,00,000. Give your suggestion on
accepting of above order what would be the impact on registration
Even though his aggregate turnover less than 20L his engaged in a transaction of interstate
taxable supply hence mandatorily has to obtain registration.
And if the supply includes inter-state supply, even though the T.O does not exceed
Rs. 20,00,000, he has to obtain registration and has to pay GST.
Since, Mr. Ramesh is making only intra-state supply & it is less than Rs. 20L, there
is no need to obtain registration.
If he accepts the order rom Tamil nadu, even though the T.O does not exceed Rs. 20l,
he has to obtain registration since he is making inter-state taxable supply.
 Casual taxable persons who does not have a fixed place of business in the state or union
territory from where he wants to make supply
E.g.: Circus, drama, exhibition, seasonal base of establishments etc.

 A person receiving supplies on which tax is payable by recipient on reverse charge basis
Example:
Mr. Naresh rendering director ship services to the seven hills ltd for the period of 17 and
18 is 16L.
a) Who is liable for payment of GST?

b) Who has obtain registration in above two parties?
Solution:
a) Seven hills ltd
b) Directorships services covered under reverse charge recipient is liable for payment of
GST. The person who is a recipient under reverse charge irrespective of his turnover
has to obtain registration

 Those E- commerce operators :- who are notified as liable for GST payment under Sec 9(5)
Example:
a) Motor vehicle booking through “eco”
b) Hotel camp site booking through “eco”
 Non- resident taxable person who do not have a fixed place of business in India
Example:
Mr bravo ( west indies ) want to sell diamonds in India by conducting Exhibitions in various
hotels whether he has to obtain any GST registration will your answer will be differ his
turnover will be 19,00,000

Solution:
Irrespective of the turn over Mr. Bravo no resident taxable person) has to obtain
registration.
 Persons who are required to deduct tax v/s (5) (TDS)

e.g.: government receiving various services / goods from the different types of suppliers
while making payment to the supplier it is the responsibility of the government to reduce
1% TDS if the value of supply is more than 2.5L for reducing of TDS govt (CG/SG/local
authority, any govt body) has to obtain registration mandatorily.

 A person who supplies on behalf of some other taxable person(i.e.., agent)

 suppliers other than notified v/s 9(5) who supply through an e- commerce operator (link
up with point no: 4)
Example: Mr pavan producing and supply pappads in Guntur his turnover is 14,00,000/-
for business expansion he want to place pappads in amazon store (eco) suggest whether
Mr. Ravan has to obtain registration. To obtain ABY registration however when he want to
supply goods services through eco irrespective of the turnover supplier has to obtain
registration.
 E-commerce operator who provide platform to the suppliers to supply through it.
Example: Eco like as flip kart, amazon, go Ibibio they are eco as well as suppliers in their
suppler capacity (commission on a product which sold through their app) liable for
obtaining registration irrespective of the turnover

 Every person supplying online information and database access or retrieval service to be
place outside India to a person in India other than a registered person.

Example: go daddy providing storage space for creation of any websites or apps through
internet in India in such a situation even though go daddy does not have any place of
business they have to obtain registration.

 Input service distribution whether or not separately registered under this Act. (Generally,
GST registration is differ from the ISD registration)

Example: An Educational Institution having head office in Hyderabad receiving various
service including services required for branch in such a situation entire credit will be in the
hands of head office. Even though head office generally registered person separately ISD
registration has to be obtained irrespective of the turnover.

Sec 25 procedure for registration
 Person who is liable to registered v/s 22 or 24 has to obtain registration in each and every
state or union territory he so liable , within 30 days from the date on which he becomes
liable to registration
 A casual taxable person or no – resident taxable person has to obtain registration at least
5 day before to the commencement of business

State wise registration:
 One registration per state:
 Registration need to be taken state wise( i.e., there is no concept of centralized

registration)
 A business entity having branches in multiple states will have to take separate state
wise registration for the branches in different states.
Where an entity having more than branch in the same state can obtain single registration
by declaring one branch / place as a principle place of business , remaining branches will
be treated as additional place of business

 Separate registration for different business verticals with in a state/ UT may be granted:
 All though a tax payer having multiple business verticals in one state is not mandatorily
required to obtain separate registration for each such vertical in the state however at
his discretions may obtain multiple registrations with respect to separate business
verticals
Ex: XYZ ltd engaged in the business of cement, sugar, plastic items etc. all the business
verticals are located in AP, in such a situation at the discretions of XYZ ltd may obtain
single registration/ separate registration for different business verticals
Note: Business vertical means one business is differ from the other with respective to
risk and return.
 Registration under composition levy:

 If one of the business vertical of taxable person is paying tax under normal scheme no
other business vertical shall be granted registration to pay tax under composition levy.
 If one of the business vertical becomes ineligible to pay tax under composition levy all
other business verticals would also become in eligible voluntary registration

 A person who is not liable to registered under section 22 or 24 may get himself
registered voluntarily
 In case voluntary registration obtained the provision’s which are applicable to the
taxable person shall also applicable to the voluntarily registered person

Ex: payment of tax return interest, etc.

 Once a person obtains voluntary registration he has to pay tax even though his
aggregate turnover does not exceed 20L or 10L.
Distinct persons:
A person who has obtained or required to obtain
 More than 1 registration

 Whether in one state / UT or
 More than one state / union tertiary
 Shall in respect of each such registration.
 A pan number is mandatory to be eligible for grant of registration

 A non-resident taxable person may not have pan hence registration will be graded on
other prescribed documents.

Ex: self-attested copy of passport, foreign business identity certificate, and foreign pan.
Unique identity number:

Any specified agency of the united national organisation any multi-lateral financial institution
and organised as notified under United Nations act 2947 is required to obtain a unit from the
GSTN portal. (Ex: world trade organisation, world health organisation foreign embassy).
The UIN is need for claiming refund tax paid on notified supplies it will be granted within 3
working days from the date of application.

Suo moto registration by the proper officer:
In case of survey, enquiry inspection , search or any other proceedings under thus act taken
place and assessing officer deems that such person is liable for obtaining registration
assessing officer person will grant registration (temporary registration) at his discretions
power (suo-moto).

On granting of such registration by assessing officer
Unregistered person accepted otherwise registration grand by assessing

officer
He has to provide full details within 90 days File an appeal to the Commissioner for
from the date of granting temporary cancelation.
registration
Procedure for Registration:

Every person who is liable for registration U/S 22 or 24 & person seeking voluntary
registration has to provide PAN ,mobile number, email id, state (UT details in part-A of from
registration -1, on GST common portal while making an application for registration
PAN, mobile number &Email address will be validated &verified through OTP (one time
password) send to it by common portal from CBDT data base.
On providing of above information temporary reference number (TRN) shall be generated &
communicated to the applicant on the validated mobile number &email id.
Using TRN applicant shall electronically submit application in part-B of application form
along with specified documents at the common portal
On receipt of the application an acknowledgement in the prescribed from shall be issued to
the applicant electronically.
A casual taxable person applying for registration can use TAN for making an advance
deposit of tax before to the registration
Application shall be forwarded to the proper officer.

PROPER OFFICER EXMANING
THE APPLATION &

ACCOMPANYING DOCUMENT
YES NO
Proper officer issues notice
Is all the proper
electronically within 3 working days
information has been given
from the date of application there
Within 3 working
by seeking clarification, information
days from the date
(Otherwise or document from the applicant
of application
deemed
registration)
Officer will grant

registration certificate As applicant furnished proper
in form GST REG-06 information within 7 working
days from the date of receipt
Within 7 working days from
of notice
the receipt of information
By YES
proper Is proper officer satisfied

officer with information given
As applicant furnished proper
by applicant?
information within 7 working days
from the date of receipt of notice
NO
Proper officer will satisfied with the

information given by the applicant

Sec 26: Deemed Registration
Registration under GST is not tax specific, which means that there is single registration for all
the taxes i.e., CGST / SGST / UTGST / IGST cesses.

Grant of registration / UIN under any SGST Act / UTGST Act is deemed to be registration has
not rejected.
SEC 27: Special provisions for grant of registration in case of non-resident taxable person
(NRTP) and casual taxable person (CTP)
Casual taxable person NON Resident taxable person
 A person who occasionally under takes  Any person who occasionally under
transactions involving supply of goods or takes transactions involving supply of

service/both goods/service/both
 In the course or furtherance of business  Whether as a principal agent capacity

 As a principal or agent capacity  But who has no fixed places of business
or residence in India
 In a state /UT where he has no fixed E.g.: person selling goods on bike by one
place of business. village &another 20 days station exhibition

E.g.: Amended concept
Special provisions relating to CTP or NRTP:

 Both CTP & NRTP have to compulsorily get registered under GST irrespective of the
threshold limit.
 Registration has to be obtained at least 5 days before to the commencement of business
 Every person must have a PAN to be eligible for registration. Generally NRTP may not have
PAN of INDIA hence registration will be granted on the basis of other prescribed
documents these are

 Self-attested copy of his valid passport along with application signed by his authorized
signatory who is an Indian resident having valid PAN.

 Business entity registration details /identification number/PAN granted by forging
govt. etc.
 Period of validity of registration certificate granted to CTP/NRTP:

 period specified in the registration application
 90 days from the effective date of registration

NOTE:
Further period can be extended by not exceeding 90 days by making application before
the end of the validity of the registration
 Advance payment of GST by CTP/NRTP:

 At the time of making an application for registration CTP/NRTP are required to make
an advance GST in an amount equivalent to the estimated tax liability of such person
for the period for which application for registration has been made
 CTP/NRTP can deposit advance tax by using TRN before cash ledger.
Sec 28: Amendment of Registration
 Where there is any change in the particulars given in Registration application/in
application, the registered person shall submit application in prescribed manner within 15
days of such change along with documents relating to such change at the common portal.
 In case of amendment of core fields of information, on the base of information given by

the applicant proper officer may approve or reject amendments.
 However where the change relates to non-core fields of information registration

certificates shall stand amended upon submission of the application on the GST common
portal.
 Where a change in the construction of any business results in change of Pan of registered
person they said person shall apply for new registration. The reason for the same is “GST
Registration is PAN based registration”.

Sec 29: Cancelation of registration
Voluntary cancellation suo-moto cancellation
Where the registered person No more where the proper officer considers the
requires it registration liable for cancellation in view of
certain defaults
E.g.: Garment shop concept
(turnover20 cores)
a) Circumstances when the registration cancelled by the registered person and at the
suo-moto power of proper officer.
 Business discontinued.
 Transferred fully for only reason including death of the proprietor.
 Amalgamated with other legal entity.
 De-merger.
 Otherwise disposed off.
 Chang in the constitution of the business.

 Taxable person who is no longer liable to be registered.
U/s 22&24(except voluntary registration)

b) Circumstances when the proper officer can cancel the registration on his own:
 He does not contained any business form the declared place of business.
 Issues Invoice / bill without supply of goods/services in violation of this Act/Rules.
 If you violates the provision of anti-Profiteering clause. E.g.: Colgate (56% from 62%
 A registered person not filled return for continuous 6 months (3 consecutive tax
periods in case of composition scheme)

 Voluntarily registered person has not commenced the business within 6 months from
the date of registration.

 Registration was obtained by means of fraud, will full misstatements, separation of
facts.
c) Procedure for cancelation of registration:

 A registered person seeking cancellation of registration shall electronically submit the
application for cancellation of registration in prescribed form within 30 days of

occurrence of the event/situation which necessitates for cancellation
 Where a person who has submitted an application for cancellation for registration is
no longer to be registered proper officer shall issue order of cancellation of registration
within 30 days from the date of application for cancellation.

 When the proper officer cancel the Registration, seven days shows cause notice shall
be served on the basis of which he may accept/reject the application

 The cancellation of registration shall be effective from a date as determined by the
proper officer.
 Even though registration has cancelled from effective date registered person will be
liable for arrears of tax, interest, penalty & less.
d) Reversal of credit:
 Amount of credit to be reversed in respect of inputs.
1) GST on Input
 Held as a stock XXXX W
 Held in semi-finished good XXXX R
 Held in finished good XXXX H
XXXXX
2) GST on transaction value as per sec 15(on goods held as stock) XXXX
Note: For computation par & practical question refer sec 18(4)

 ITC reversal on e.g. & plant & machinery
1) ITC availed on capital good &plant &machinery XXXX
Less: eligible credit (XXXX) W

(By considering life of the asset as 60 months) R XXXX
2) ITC on transition value H XXXX

ITC to be reversed /paid XXXXX
Note: For computation par & practical question refer sec 18(4)
Other points:
 A voluntarily registered person cannot seek cancellation before the expiry of a period of 1
year from the effective date of registration
 A person to whom a UIN has been granted cannot apply for cancellation of registration
 The cancellation of registration will not effect the liability of registered person to pay tax
and any other dues

 A cancellation of registration under either SGST/CGST Act shall be deemed to be a
cancellation of registration of GST Act.

SEC 30: Revocation of cancellation of Registration.
 Where the registration of person is called suo-moto by the proper officer, registered
person has to may make an application for revocation of cancellation to such proper
officer within 30 days through GST common portal.

 If the proper officer is satisfied that there are sufficient order within 3 days from the dates
of application and may communicated as cancelation of registration has been evocated.

 The revocation of cancellation of registration under the SGST Act/CGST Act shall be
deemed to be a revocation of cancellation of registration under CGST Act.

8. TAX INVOICE CREDIT AND DEBIT NOTES
 Section 31: Invoice
 Original Invoice.
 Revised Invoice.
 Consolidated Invoice.
 Bill of supply.
 Receipt voucher.
 Refund voucher.
 Payment voucher.
 Delivery voucher.
 Other document as may be notified.
 Section 32: Prohibition of unauthorized collection of tax.

 Section 33: Amount of tax to be indicated in tax Invoice and other documents
 Section 34: Credit & Debit notes
 Section 35: Introduction to Original Invoice

 An invoice is a commercial Instrument/Document by a supplier of goods/services
(Taxable person) to a Recipient

 It identifies both the parties involved describes.
 The item sold.

 Quantities of the items sold.
 Date of shipment.
 Mode of transport.
 Prices & Discounts.

 Delivery & Payment terms etc.
 In certain cases an Invoice services as demand for payment and becomes a document
of title when paid in full (Total Amount).

Time limit for issue for invoice in relating to goods / services.
(Refer the chapter time of supply)
No. of HSN digits required on tax invoice and class of registered persons not required to
mention HSN
Sl.no Annual turnover in previous Financial year Number of digits of HSN code
1. Turnover ≤ 1.5 crore. Nil
2. Turnover more than 1.5 crore but ≤5 crores. Two
3. Turnover > 5 crore Four
manner of issue of Invoice
In case of taxable supply of goods In case of taxable supply of services.
Invoice shall be prepared in triplicate Invoice shall be prepared in duplicate
1. Original for recipient 1. Original for recipient
2. Duplicate for transporter 2. Duplicate for supplier.

3. Triplicate for supplies
Special case:
 Revised tax invoice:

 Every registered person who has been obtained registration with effect from a date
earlier than may issue revised invoice.

 Such Invoice shall be issued against the Invoices already issued during said person.
 Simple we can say there will be a time gap in b/w effective date of Registration to the
date of obtaining certificate of Registration, Registered person liability starts from the
effective date even through he does not Identification Number. So that the supplies
taken place in b/w above two dates liable for GST, hence registered person first has to

issue a normal invoice, after registration revised original tax invoice which showing
GSTN No has to be issued.
 Revised tax Invoice note shall be issued within 1 month from the date of issuance of
certificate of Registration.
Example:
Last date
29th Jan
20th March
Liability for Registered
28th Feb
registration 24th Feb 1 month
29th Feb
ED of
Effective date of registration registration
/ XYZ Ltd
Pay GST, No ITC.
XYZ Ltd engaged in the carrying of business, electrical goods & his turnover reached to
20 lakhs on 29th Jan 2018. Hence company made an application to the department &
hence attained the certificate of Registration on 24 Feb 2018.
 What is the effective date of Registration?

 What is the last date for issue of Revised Invoice & if Registration obtained on 20th
March?
Solution:
Particulars Reg 24th Feb Reg 20th March

1. Date of Registration 28th Feb 20th March
2. Last date of obtaining Registration 24th Feb 28th Feb

3. When actual Registration has been obtained 24th Feb 20th March
4. Effective date of Registration 24th Feb 29thFeb

5. Last date for issue of Revised invoice 24th Feb 20thAprial

6. Impact on ITC Can be available Cannot available
with effective credit up to 29th
from 29th Jan Feb

 Consolidated Tax Invoice:
Situation 1:
 A Registered person may issue a consolidated revised tax Invoice in Respect of all
taxable supplies made to an unregistered recipient during such period.
 However, in case of interstate supplies a consolidated revised tax invoice cannot be
issued in respect of supply exceeds 2,50,000/-.

Situation 2:
NOTE: Tax invoice required to be issued if the a Registered person may not issue a tax
invoice if
 Value of goods/services/both supplied <200/- (≤ 199)

 The recipient is un-registered.
 The recipient does not require such invoice.
In above situations registered person shall issue a consolidated Tax invoice for such
supplies of the close of each date in respect of all such supplies.
NOTE: However supplier should issue an invoice when the customer demands.
 Bill of supply:
 A registered person supplying Shall issue a Bill

 Exempted goods / services / both of supply instead
 Under composition levy of a tax invoice
 A registered obtaining for the composition levy does not collect tax recipient for the
recipient on outward supply made by him.

 Similarly in case of registered person supplying exempted goods/services no tax
implications are there.

 A part from that in above situations recipient should not expected tax invoice from
supplier. Hence bill of supply has to be issued.

 Receipt Voucher:
 A registered person on receipt of advance payment with respect to any supply of
goods/services/both shall issue a receipt voucher which evidence in receipt of such

payment.
 Where at the time of receipt of advance date tax/ Nature of supply is not determinable
Rate of Tax Not Nature of Supply is not
Identifiable (05/12/18) determinable (Intra / Inter)
Tax shall be paid @ 18y Supply shall be treated as

Interstate supply
Returned Voucher:
On receipt of any advance payment with respect to…
 Any supply of goods / services / both

 The registered shall issue.
 Receipt voucher.

 Subsequently no supply is made &

 No tax invoice is issued in relating to such supply.
 The said registered person issue a Refund voucher along with refund money / such
payment.
E.g.:
1. Advance (01/04/18)
2. Receipt voucher (02/04/18)
3. Supply
4. No Tax Invoice
5. Refund Money
Registered person 6. Refund Voucher Recipient

 Invoice & payments vouchers to be issued by recipient of supply liable to pay tax
convex reverse charge.
 Recipient i.e. liable to pay tax on reverse charge basis. Where he receives supply of
goods/services which are notified for reverse charge purpose (irrespective of the factor
whether supplier is registered or unregistered.

 For the Recipient person is liable to pay tax where taxable goods/services have been
received from an unregistered supplier (subject to rupees 5,000).
Payment voucher
Where recipient is Received the taxable

registered supplier on reverse
charge basis
Under sec 9(3) Under sec 9 (4)
(Notified supplies) (Un-registered supplier to

registered person)
Supplier is registered Supplier is un-registered Supplier is un-registered
Recipient shall
Issue a payment voucher at the time
of making payment to the supplier

Invoice
Where recipient is Received the taxable

registered supplier on reverse
charge basis
Under sec 9(3) Under sec 9 (4)
(Notified supplies) (Un-registered supplier to

registered person)
Supplier is registered Supplier is un-registered Supplier is un-registered
Recipient shall Issue invoice
Note:
Payment voucher has to be issued by the recipient irrespective of the fact of whether
supplier may be registered / un-registered.
Whereas invoice concern recipient is liable for issue of invoice only when supplier is un-
registered.
 Delivery Challan:
Rule 55 specifies the cases where at the time of removal of goods. Goods may be removed
on delivery challan & invoice may be issued after delivery. These are provided in following
chart.

Delivery challan to Particular of Delivery
Nature of supply
be issued challan
 Supply of liquid gas where the  serially numbered  Date and serial
quantity at the time of the not number of delivery
removal from the Placed business  exceeding 16 challan

of the Supplier is not known characters
 Transportation of goods for job  In one are multiple  Name address and
work series GSTN of consignor
 Transportation of goods for  At the time of  Name address and

reasons other than by way of removal of goods GSTN of consignee
supply (sale / approval / basis, for transportation  HSN code and

free sample, one branch to description of
Common for four
another branch both are located goods
nature of supplies
in same state)  taxable value
 Quantity details
 Tax rate and tax

amount central
tax/state tax
IGST,CGST ETC.
Note:
 Delivery challan in triplicate
 Original for consignee

 Duplicate for transporter
 Triplicate for consignor

 Invoice may be issued after delivery of the goods
 Original copy of the invoice shall be sent along with the last consent
 Any other document other than tax invoice:
Government may notify any other a situations where instead of tax invoice other
documents can be issued or the tax invoice may not be issued.

Issuance of credit note
Where tax invoice has been issued for supply of any goods / service / both
 Taxable value in invoice greater than taxable value in respect of such supply
 Tax charged in invoice> tax payable in respect of such supply
 Where the goods supplied or returned by the recipient

 Where goods/ services / both supplied are found to be deficient.
Registered supplier of goods/ services/ both may issue credit note to the recipient of goods/
services / both in above situation
Issuence of debit note

 Where a tax invoice has been issued for supply of any goods / service / both.
 Taxable value in invoice L taxable value in respect of such supply

 Tax charged in invoice L tax payable in respect of such supply.
Registered supply of goods/ services both shall issue debit note to the recipient of goods
or services or both.
 Prohibition of unauthorized trettior of tax sec32
 A person who is not a registered person shall not collect in respect of any supply of
goods/services / both any amount by way of tax under this act
 No registered person shall collect tax except in accordance with the provisions of this
tax or the rules made there under
 Amount of tax to be indicated in tax invoice and other documents sec 33

Every person who is liable to pay tax for supply shall prominently indicate in all documents
in relating to assessment tax invoice and other like documents the amount of tax which
shall form part of the price at which supply is made (i.e., even for MRP goods tax amount
has to be shown separately in invoice).

9. PAYMENT OF GST
Section 49: Payment of tax, interest, penalty & other amounts
a) Electronic cash ledger
b) Electronic credit ledger

c) Electronic liability ledger
Section 50: Interest on delay payment of tax
Introduction:
 Under the GST resign for any intra state supply taxes to be paid will goes to central &
state/ UT
 For any interstate supply, tax to be paid is IGST which will have components of CGST &
SGST. SGST will goes to the state where supply has been consumed as per place of supply
provisions.
 Once a tax payer registered on GST common portal to electronic ledgers (i.e. credit & cash
ledger) & an electronic tax liability register will automatically opened & display on his dash
board at all times

Section – 49
Electronic cash ledger:

 The electronic cash ledger contains a summary of all deposits and payments made by a
tax payer.
 Electronic cash ledger is maintained on the GST portal.
 Mode of deposit in electronic cash ledger.
Online payment Offline payment

i.e. internet banking, credit NEFT, RTGS, CASH deposit
NOTE:
 Online payment, NEFT, RTGS payment can be used for deposit of money in ELC (electronic
cash ledger) without any limit

 To deposit money over the counter has restricted to per challan per tax period (cheque or
demand draft payments)

Payment by challan:
What are CPIN, CIN, BRN, and E-FPB?
 7CPIN stands for: Common portal identification number. It is created for every challan
successfully generated by the tax payer. It is a 14 digit unique number to identify the
challan. CPIN remains valid for a period of 15 days.

 CIN: Challan identification number is generated by bank, once payment is made
successfully challan will be generated. It is a a17 digit number (i.e. 14 digit CPIN + 3 DIGITS
BANK CODE)
 BRN: Bank reference number is the transaction number given by the bank for the payment
against a challan.
 E-FPB: electronic focal point branch.

 These are the branches of authorised banks, which are authorised to collect payment
of GST.
 Each authorised bank will nominate only one branch as its E-FPB for PAN India
transaction.
 Any amount received by the E-FPB towards GST will be credited to the appropriate
accounts held i.e., CGST, SGST, IGST etc.
Money of utilization of amount reflected in electronic cash ledger:

 The amount reflected in the electronic cash ledger may be used for making any payment
towards tax, interest, penalty, fee, any other amount under the relevant tax head.
 In the ledger information is kept more head wise i.e. IGST, CGST, SGST / UTGST & cess.
Each major head is divided into 5 major head i.e. tax, interest, penalty, fee & others.
1. How can the cash available in electronic cash ledger be utilised?

a) The amount available in electronic cash ledger can be utilised for major payment of
any liability for respective major and minor heads.

E.g.: liability for the tax under SGST can be settled only from the available amount of
cash under SGST major head.

2. Is transfer of funds b/w the major head permissible for discharging liabilities of other
heads?
a) No, amount available under one major head cannot be utilised for discharging the
liabilities under any other major head.
E.g.: Cash balance showing under CGST cash ledger should not be utilised for
discharging the liabilities under IGST, SGST, cess liabilities and vice versa.
Electronic credit ledger
 CGST act provides that the self-assessed input credit ledger / electronic input tax credit
ledger.
 Input tax credit as self-assessed in monthly returns will be used to make payment of tax
only & not other amounts such as interest, penalty, fee etc.
MANNER OF UTILISATION OF ITC
Refer chapter no: 1, frame work out which 3 point (pg. 13 of chapter 1)
ELECTRONIC LIABILITY LEDGER / REGISTER
Electronic liability register will reflect the total tax liability of tax payer for the particular month
(list is in chronological order)

ORDER OF DISCHARGE OF TAX AND OTHER DUES
Section 49(8) prescribes the chronological order in which the liability of a taxable person has
to be discharged.
 Self-assessed tax & other dues for the previous tax period have to be discharged first.
 The self-assessed tax & other due for the current period have to be discharged
 There after any other amount payable including demand determined under sec 73 /74 to
be discharged .
(i.e. liability arising out of demand notice & adjudication processing)

 This sequence has to be mandatorily follow
SEC 50: INTEREST ON DELAY PAYMENT OF TAX
1) When interest is payable?

a) In the following three circumstances interest has to be payable
 Delay in the payment of tax, in full /in part within the prescribed period.

 Undue or excess claim of ITC (sec 42(10))
 Under / excess reduction in output tax liability under sec 43(10).
RATE OF INTEREST
Belated payment of tax (i.e. on failure to undue/ excess claim of ITC or undue [excess
pay tax) reduction in output tax liability]
Rate of interest -18% p.a. Rate of interest – 24% p.a.
Interest computation period:

The period of interest will be from the date following the due date of payment to the actual
date of payment of tax.

10. RETURNS
CHAPTER OVERVIEW:
Section 35: accounts & other records.
Section 36: period of retention of accounts.

Section 37: furnishing details of outward supplies.
Section 38: furnishing details of inward supplies.
Section 39: Furnishing of records.
Section 40: First return.

Section 41: Claim of ITC and provisional acceptance there off.
Section 42: Matching, Reversal & Reclaim of ITC.

Section 43: Matching, Reversal & Reclaim of Reduction in output tax liability.
Section 44: Annual Return.

Section 45: Final returns.
Section 46: Notice to return defaulters.
Section 47: Levy of late fee.

Section 48: Goods & service tax practitioners.
Introduction:
 The term return ordinarily means statement of the information furnished by the tax
administers at regular intervals.
 Filing of the return is one of the most important compliance procedure which enables the
govt tax administrators to estimate the tax collection for a particular period and determine
the correctness of the tax compliances of the tax payer.
Section 37
Punishing details of outward supplies
The details of outward supplies are required to be furnished by every registered person
including casual taxable person. Except the following:
 Input service distributors

 Non-resident taxable person.

 A person paying tax on composition scheme.
 Person deducting tax at source (e.g.: Govt supplies > 2.5L)
 Person collecting tax at source. (e.g.: Commerce operator)

 A supplier of online information and data base access or retrieval services.
1. What is the due date of submission of GSTR – 1?

a) GSTR – 1 for a particular month is filed on / before the 10th day of the immediately
succeeding month. In other words GSTR - 1 of a month can be filed any time in b/w
one & 10th day of the succeeding month.
A tax payer cannot file GSTR – 1 before the end of the current tax period. However
following are the exceptions – 1
a) Casual tax payers after the closure of their business.

b) Cancellation of GSTIN of a normal tax payer.
Note:
The GSTR – 1 can be filed on / after 16th of a month if the due date of 10th of the month
is missed. (In b/w 11th & 15th of the month GSTR – 1 cannot be filed, it is the time for
filing of GSTR - II
2. What kind of details of outward supplies are required to be furnished in GSTR – 1?
a) Outward taxable supplies
Business to business supplies Business to customer supplies
Interstate supplies Intrastate supplies Interstate supplies Intrastate supplies
Invoice wise details Invoices Invoices Consolidated

of all supplies to be value > value ≤ details of all
uploaded. 2,50,000 2,50,000 supplies to
be uploaded
Invoice wise State wise

detailed to be consolidated details
uploaded to be uploaded.

Note:
 Scanned copies of invoices are not required to be uploaded.
 Only certain prescribed fields of information from invoice need to be uploaded.
e.g.: Invoice no., value, taxable value, rate of tax, amount of tax etc.
Communication of details of GSTR – I, GST – II, GSTR – III, GSTR – IA, GSTR – IIA
Supplier files details of his outward supplies of a month in a form GSTR – I on or before 10 th
day of succeeding month.
GSTR – I furnished by the supplier is made available to the recipient in part –A of in form
GSTR – II [i.e. GSTR – IIA, after 10th day of the succeeding month]
Recipient reviews GSTR – IIA and files details of his inward supplies in GSTR –II after making
modifications if any, after 10th day but on or before 15th day of month succeeding the
relevant month.
Notifications made by the recipient in GSTR – II are made available to the supplier can
accept / reject the modifications made by recipient between 15 th day and 17th day of the
month, succeeding the relevant month.
If supplier accepts the modifications, GSTR – I filed by him will be amended to that extent.
Such amended details of outward supplies reflected in GSTR – III to be filed by the supplier
on or before 20th day of the month, succeeding the relevant month.

Rectification of error:
Error or omission communicated in mismatch report.
To be rectified in the tax period when the same are communicated.

Maximum time limit for rectification:
a) Date of filing of annual return.
b) Date of filing of GSTR – III for the month of September of succeeding financial year.
Mr. A (Supplier) Mr. B (Recipient)

(5 Transactions)
1. GSTR – I 1. GSTR – I
(On or before 10th of succeeding month) GSTR – 2A (After 10th of the relevant
(3 transactions given in GSTR – I) month) – 11th to 15th)

2. GSTR – II 2. GSTR – II
[3 auto-populated, 2 transactions
provisional basis]
3. GSTR – III 3. GSTR - III

(15th, 16th, 17th) – modify GSTR – I
Note:
 GSTR – I need to be filed even if there is no business activity in the tax period [i.e. nil return]
 Filing of GSTR – I for current month is possible only when GSTR – I for current month is
possible only when GSTR – I for the previous month has been filed.
 Taxable person obtaining for voluntary cancellation of registration, he has to file GSTR – I
for active period.

 All values like invoice value, taxable value, amount in GSTR –I are to be declared upto two
decimal digits. The rounding off of the self-declared tax liability to the nearest rupee would
be done in GSTR –III

SECTION 38
Furnishing of details of inward supplies
 Persons required to file details of outward supplies = persons required to file details of
inward supplies. [refer sec 37 – point no – I]
What is the form for submission of details of inward supplies?

a) The details of inward supplies are required to be furnished electronically in form GSTR –II
through GST common portal.
What is the due date of submission of GSTR – II?
a) GSTR –II of a particular month is filed after the 10th day but on or before 15th day of the
immediate succeeding month.
What kind of details of inward supplies are required to be furnished in GSTR – II?
a) Invoice wise details of intra-state & inter-state supplies received from registered persons
/ unregistered persons including inward supplies taxable under reverse charge.

Import of goods & services made (IGST credit)
Debit & credit notes of any adjustments

Can be recipient feed information in GSTR – II, which has been missed by the supplier?
a) Yes, the recipient himself can feed the information (invoices) which are not uploaded by
the supplier. The credit of such invoices also be given on provisional basis, but it is subject
to matching in the subsequent period.

SECTION 39
Furnishing of Return
Return Description Taxable person liable for Due date of filing
filing of return
GSTR – I Monthly statement of Registered person 10th of the next
outward supplies month

GSTR – II Monthly statement of Registered person 15th of the next
inward supplies month

GSTR – III Monthly return of a Registered person 20th of the next
regular dealer month

GSTR – IV Quarterly return Taxable person obtaining 18th of the month
for composition scheme or succeeding the
levy. quarter
GSTR – V Monthly return for NRTP / Non-resident tax 1. 20th of the month
NRTP payer succeeding the

W
quarter
E
2. Within 7 days E
after expiry of
registration
GSTR – VI Monthly return Input services distributor. 13th of the next
month
GSTR – VII Monthly return Person required to deduct 10th of the following
TDS or TCS month

GSTR – VIII Monthly return ECO 10th of the following
month
GSTR – IX Annual return Registered persons other 31st Dec of next F.Y.
than ISD, TDS, CTP, and
NRTP.
GSTR – IX A Annual return Composite dealer 31st Dec of next F.Y.
GSTR – X Final return Taxable person whose 1. Within 3 months

registration has been from the date of
cancelled or surrendered. cancellation.

2. Date of order of
cancellation
(Whichever is later?)
If a return has been filed how can it be revised if some changes are required to be made?
1. In GST, the returns are built from the details of individual transactions, hence there is no
requirement for having a revised return.

2. If value of the taxable supplies / tax amount wrongly provided in the return can be
adjusted through debit & credit notes. i.e. the system allows changing the details of those
transactions instead of filing of revised return.

SECTION 40
FIRST RETURN
There will be a time gap in between date of liable for obtaining registration and date of grant
of certificate of registration. Hence, after completion of tax period in first return following two
information’s has to be provided.
1. Details of outward supplies after becoming liable to obtain registration but before grant
of certificate of registration.
2. Details of outward supplies made in first tax period after grant of certificate of registration
or upto the end of tax period.
1
2
15/07/2018 13/08/2018 31/08/2018

Date of liable for Date of registration End of the tax
obtaining registration period
First return on or before 10/09/2018

May be more than
one month
SECTION 41 & SECTION 42
Sec 41: Availment of ITC on provisional basis
Sec 42: Matching, reversal & reclaim of ITC.
Refer ITC chapter No.6

SECTION 43
Matching, reversal and reclaim of reduction in output tax liability
 Where a tax invoice has been issued for supply of goods/services &taxable value/ tax
charge in that tax invoice is found. To exceed the taxable value/ tax payable in respect of
such supply.
 Where the goods supplied/ returned by recipient.
 Where goods/ services supplied are found to be deficient.
 Supplier may issue a credit to the recipient, there up on the output tax liability of the
supplier would reduce due to issuance of credit note.
Time of matching
 The details relating to claim of reduction in output tax liability shall be matched u/s 43.
 Such matching will be matching will be done after the due date for furnishing the return
in form GSTR-111
Detail to be matched:
Under matching of details relating to claim of reduction in output tax liability, details of every
credit note relating to outward supply furnished by the supplier for a tax period is matched
With corresponding reduction in ITC claimed by the corresponding recipient in his valid return
for the same tax period/any subsequent tax periods.

SECTION -44
ANNUAL RETURN
Who are required to furnish annual returns & what is the due date?
a) All tax payers filing GSTR-1, GSTR-2, GSTR-3, are required to file annual return except
following persons.
 Casual taxable person( even though he is liable to file GSTR-1 not required to file
annual return)
 Non –resident taxable person

 Input service distributor
 Person authorised to deduct/collect tax at source.

What is the prescribed form for annual return?
a)
 Annual return is to be filed electronically in form GSTR-9 through the common portal.
 A composite dealer has to file annual return in form GSTR-9A.
Due date = 31st December of next F.Y

Section-45
Final return
Who are required to furnish final return?
a) Every Registered person who is required to furnish return under sec 398(1) & Who
registration surrended/ cancelled shall file final return electronically in form GSTR -10
though common portal.

What is the time limit for furnishing final return?
a) .
 Date of cancellation W
E
 Date of order of cancellation. E
SECTION-46
Need to return defaulters

 A notice in prescribed form shall be issued electronically to a registered person who fails
to furnish the return U/S 396. (Regular returns), annual returns U/S 44, final return U/s 45,
TCS or TDS information U/S 52.
 On the basis of above notice given by the proper officer, registered person required to file
the return within 15 days from the date of order.
SECTION 47
Levy of late fee
 Late fee is levied for delay in filing of return.

 Any registered person who fails to furnish the return by the due date liable for payment
of late fee in following situations.

 Statement of outward supply – Sec 37

 Statement of inward supply – Sec 38
 Furnishing returns – Sec 39
 Final returns – Sec 45.

 Quantum or amount of late fee
 Rs. 100 per every day during which such failure continues XXX W
E
 Amount of Rs. 5000 XXX
L
Late fee levied for delay in filing of annual return
 Rs. 100 per every day during which such default continue XXX W
E
 0.25% of turnover of registered person in the state union territory XXX L
SECTION 48
(GSTP) Goods and service tax practitioner

What is the eligibility criteria for GSTP?
a) On satisfying the following conditions a person can be acted as goods and service tax
practitioner.
 Indian citizen
 Person of sound mind

 Not adjudicated as insolvent
 Not be convicted by a competent court.
+
 Retired officer of commercial tax Dept. of any state Govt. / CBEC worked in a post not
lower than rank of Group – B, Gazetted officer for a period ≥2 years. Or

 Enrol as a sales tax practitioner / tax return preparer under earlier indirect tax laws for
a period of not less than 5 years. Or

 Has acquired any of the prescribed qualifications (CA, CMA, CS)

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1.

3) features of Indirect taxes

9) Frame work of GST

throw Separate Act

a person in pursuance of the legislative authority.

provide public Services

It is the primary Responsibility of the government full fill

 To provide Basic needs of public

CA-IPCC- GST Contact No. 9133430222, 9133530222 Page |1

2. Progressive nature 2. Regressive native

3. Features of indirect tax

 An important source of revenue

grow as more countries move to consumption-oriented tax resign.

 Taxes on commodity and services

Supply and import/export of goods (or) rendering of sources.

 No perception of direct pinch

CA-IPCC- GST Contact No. 9133430222, 9133530222 Page |2

4. Deficiency in the exciting IDT system:

1. Cascading effect of taxes an account of

a) Levy of non-vatable CST.

2. Double taxation of a transaction has both goods and services.

Value of food =10,000

3. Non – integration of vat and service tax

Readymade garments = 5,00,000

CA-IPCC- GST Contact No. 9133430222, 9133530222 Page |3

Building rent = 1,00,000 Advertisement in TV= 50,000

Brand advertisement = 2,00,000

Value of the goods = 8,00,000

VAT on sale 40,000

b) E.D on purchase N.A

c) S.T on Rent N.A

d) S.T on advertisement N.A

e) S.T on Brand Advertise N.A

Such as luxury tax, entertainment tax etc

SGST@ 14.5% = 75,000

Cleaning material = 3,00,000

CA-IPCC- GST Contact No. 9133430222, 9133530222 Page |4

Entertainment tax @20% = 10,00,000

Less: building tax @ 15% = -

Vat @ 14.5% on cleaning = -

Central levies State levies

duty 2) Entry tax and purchase tax

preparation act 4) Tax on lottery betting and gambling

5) Central sales tax 6) Taxes on advertisements

as they related to supply goods or related to supply of goods or services

CA-IPCC- GST Contact No. 9133430222, 9133530222 Page |5

 Motor spirit (commonly known as petrol)

 Aviation torsional fuel

a) value added tax:

of the goods and or all services.

liable for payment of tax only to the extent of value addition.

b) burden born by final consumer: ( nature of IDT)

chain eligible for credits except by final consumer.

CA-IPCC- GST Contact No. 9133430222, 9133530222 Page |6

value of good = 5L value of good = 7L value of good = 9L

CGST @ 9% =45K CGST @ 9% = 63K CGST @ 9% = 81K

SGST @ 9% = 45K SGST @ 9% = 63K SGST @ 9% = 81K

5,90 K 8,26 K 10,62,000

Particulars CGST SGST Particulars CGST SGST

1. GST payable 63,000 63,000 1. GST on supply 81K 81K

6. Genesis of GST in India: (origin)

 Subsequently union be finance minister Sri. P. Chidambaram announced GST would be

be shrouded by the clouds of uncertainty