1523511540part C PDF

CA.
ROHIT GAMBHIR
[B.Com (H), CA]
CS PROFESSIONAL CA ROHIT GAMBHIR
THE INTEGRATED GOODS AND SERVICES TAX ACT, 2017
CHAPTER-I
PRELIMINARY
SN Particulars
1 Short title, extent and commencement
2 Definitions
1. Short title, extent and commencement:
SN Particulars Description
1 Name of This Act may be called the Integrated Goods and Services Tax Act, 2017.
the Act
2 Applicability It shall extend to the whole of India except the State of Jammu and Kashmir.
3 When It shall come into force on such date as the Central Government may, by notification in the
applicable?? Official Gazette, appoint:
Notification
in OG PROVIDED that different dates may be appointed for different provisions of this Act and any
reference in any such provision to the commencement of this Act shall be construed as a
reference to the coming into force of that provision.
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Separate paging is given to this Part in order that it may be filed as a separate compilation.
MINISTRY OF LAW AND JUSTICE

(Legislative Department)
New Delhi, the 24th August, 2017/Bhadra 2, 1939 (Saka)
The following Act of Parliament received the assent of the President on the
23rd August, 2017, and is hereby published for general information:—
THE INTEGRATED GOODS AND SERVICES TAX (EXTENSION TO

JAMMU AND KASHMIR) ACT, 2017
NO. 27 OF 2017
[23rd August, 2017.]
An Act to provide for the extension of the Integrated Goods and Services Tax
Act, 2017 to the State of Jammu and Kashmir.
BE it enacted by Parliament in the Sixty-eighth Year of the Republic of India as follows:—
1. (1) This Act may be called the Integrated Goods and Services Tax (Extension to Short title
Jammu and Kashmir) Act, 2017. and
commencement.
(2) It shall be deemed to have come into force on the 8th day of July, 2017.
13 of 2017. 2. (1) The Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as the Extension
principal Act) and all rules, notifications, schemes and orders made thereunder by the and
amendment
Central Government are hereby extended to, and shall be in force in, the State of Jammu and
of Integrated
Kashmir. Goods and
Services Tax
Act, 2017.
2
2 THE GAZETTE OF INDIA EXTRAORDINARY [PART II— SEC. 1]
(2) With effect from the date of commencement of this Act, in the principal Act, in
section 1, in sub-section (2), the words “except the State of Jammu and Kashmir” shall be
omitted.
Repeal and 3. (1) The Integrated Goods and Services Tax (Extension to Jammu and Kashmir)
saving. Ordinance, 2017 is hereby repealed. Ord. 4 of 2017.
(2) Notwithstanding such repeal, anything done or any action taken under the said
Ordinance shall be deemed to have been done or taken under the corresponding provisions
of this Act.
————
DR. G. NARAYANA RAJU,

Secretary to the Govt. of India.
UPLOADED BY THE GENERAL MANAGER, GOVERNMENT OF INDIA PRESS, MINTO ROAD, NEW DELHI–110002
AND PUBLISHED BY THE CONTROLLER OF PUBLICATIONS, DELHI–110054.
GMGIPMRND—2131GI(S3)—24-08-2017.
3
4
2. Definitions:
In this Act, unless the context otherwise requires,––
1 CGST Act “Central Goods and Services Tax Act” means the Central Goods and Services Tax Act, 2017;
2 Central tax ‘‘Central tax” means the tax levied and collected under the Central Goods and Services Tax
Act;
3 Continuous “Continuous journey” means a journey for which

journey a) a single ticket or invoice is issued or
b) more than one ticket or invoice is issued at the SAME TIME, either
i) by a single supplier of service or

ii) through an agent acting on behalf of more than one supplier of service,
and
which involves no stopover between any of the legs of the journey for which one or more
separate tickets or invoices are issued.
Explanation––For the purposes of this clause, the term “stopover” means a place where a
passenger can disembark either to
i) transfer to another conveyance or

ii) break his journey for a certain period in order to resume it at a later point of time.
Notes:
>> HALT in the journey dose not result in Stopover and no breakage in Continuous
journey.
4 Customs “Customs frontiers of India” means the limits of a customs area as defined in section 2 of
frontiers of the Customs Act, 1962;
India
5 Export of goods “Export of goods” with its grammatical variations and cognate expressions, means taking
goods out of India to a place outside India;
6 Export of “Export of services” means the supply of any service when,––

services i) the supplier of service is located in India;
ii) the recipient of service is located outside India;
iii) the place of supply of service is outside India;
iv) the payment for such service has been received by the supplier of service in
convertible foreign exchange; and
v) the supplier of service and the recipient of service are not merely establishments
of a distinct person in accordance with Explanation 1 in section 8
 Supplies outside India which do not constitute export:
SN Description
1 A property rented out in Mumbai to a person residing in Dubai
2 Supply of consultancy service by an Indian consulting firm to an
overseas entity, payment for which is made in Indian rupees by Indian
branch of overseas entity
5
6
3 Services provided to overseas branch would not be eligible as export of

services due to specific exclusion for such transactions in the definition of
“export of service”.
7 Fixed “Fixed establishment” means a place (other than the registered place of business) which
establishment is characterised by a
 sufficient degree of permanence and
 suitable structure in terms of human and technical resources to supply services or to
receive and use services for its own needs
8 GST “Goods and Services Tax (Compensation to States) Act” means the Goods and Services Tax
(Compensation (Compensation to States) Act, 2017;
to States) Act
9 Government “Government” means the Central Government;
10 Import of ‘‘Import of goods” with its grammatical variations and cognate expressions, means
goods bringing goods into India from a place outside India;
11 Import of ‘‘Import of services” means the supply of any service, where––

services (i) the supplier of service is located outside India;
(ii) the recipient of service is located in India; and
(iii) the place of supply of service is in India;
12 Integrated tax “Integrated tax” means the integrated goods and services tax levied under this Act;
13 Intermediary “Intermediary” means a broker, an agent or any other person, by whatever name called,
who arranges or facilitates
the supply of goods or services or both, or securities, between two or more persons, but
does not include a person who supplies such goods or services or both or securities on his
own account;
14 Location of the “Location of the recipient of services” means,––

recipient of (a) where a supply is received at a place of business for which the registration has been
services obtained, the location of such place of business;
(b) where a supply is received at a place other than the place of business for which
registration has been obtained (a fixed establishment elsewhere), the location of such
fixed establishment;
(c) where a supply is received at more than one establishment, whether the place of
business or fixed establishment, the location of the establishment most directly
concerned with the receipt of the supply; and
(d) in absence of such places, the location of the usual place of residence of the recipient;
15 Location of the “Location of the supplier of services” means,––

supplier of (a) where a supply is made from a place of business for which the registration has been
services obtained, the location of such place of business;
(b) where a supply is made from a place other than the place of business for which
registration has been obtained (a fixed establishment elsewhere), the location of such
fixed establishment;
7
(c)where a supply is made from more than one establishment, whether the place of
business or fixed establishment, the location of the establishment most directly
concerned with the provision of the supply; and
(d) in absence of such places, the location of the usual place of residence of the supplier;
16 Non-taxable “Non-taxable online recipient” means any Government, local authority, governmental
online recipient authority, an individual or any other person not registered and receiving online
information and database access or retrieval services in relation to any purpose other
than commerce, industry or any other business or profession, located in taxable territory.
Explanation.––For the purposes of this clause, the expression “governmental authority”

means an authority or a board or any other body,––
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by any Government,
with ninety per cent. or more participation by way of equity or control, to carry out
any function entrusted to a municipality under article 243W of the Constitution;
17 Online “Online information and database access or retrieval services” means services whose
information  delivery is mediated by information technology over the internet or an
and database electronic network and
access or
retrieval  the nature of which renders their supply essentially automated and involving
services minimal human intervention and impossible to ensure in the absence of
information technology and
 includes electronic services such as,––

(i) advertising on the internet [E.g. Google- pop-up ads];
(ii) providing cloud services [E.g. Amazon Web Services];
(iii) provision of e-books, movie, music, software and other intangibles through
telecommunication networks or internet [Gaana.com];
(iv) providing data or information, retrievable or otherwise, to any person in
electronic form through a computer network [E.g. Taxindiaonline.com];
(v) online supplies of digital content (movies, television shows, music and the like);
[E.g. Set-max online, YouTube]
(vi) digital data storage; [E.g. Amazon] and
(vii) online gaming [E.g. Zapak.com];
 Understanding:
a) Deliver through IT:
To qualify the services as OIDAR, it is essential that the services are delivered
through internet or computer. There are number of websites which has huge
database on variety of subjects. Normally, members of website can access to
such database which is stored on the website. The access is provided through
internet or electronic network.
Example: www.taxguru.com
b) Supply essentially automated and involving minimal human intervention

impossible to ensure in the absence of IT:
The second condition is that the nature of supply of services shall essentially
be automated and involving minimal human intervention. It appears that
there should not be SIGNIFICANT human intervention in supply of services. In
the example given above, the members of website can have an access to the
database WITHOUT ANY INTERVENTION FROM THE OWNER OF THE
8
WEBSITE. Another example is that of legal websites. The various judgements

of the Tribunal, High Courts or Supreme Court are stored in the database of
the website. The members can have the access to the information without
the intervention of the owner of the website and the judgements can be
downloaded by the members.
18 Output tax “Output tax”, in relation to a taxable person, means the integrated tax chargeable under
this Act on taxable supply of goods or services or both made by him or by his agent but
excludes tax payable by him on reverse charge basis;
 VERY IMP NOTE:

Tax payable on the basis of RCM is not output tax rather it is an Input tax
19 Special “Special Economic Zone” shall have the same meaning as assigned to it in clause (za) of
Economic Zone section 2 of the Special Economic Zones Act, 2005;
20 Special “Special Economic Zone developer” shall have the same meaning as assigned to it in clause
Economic Zone (g) of section 2 of the Special Economic Zones Act, 2005 and includes an Authority as
developer defined in clause (d) and a Co-Developer as defined in clause (f ) of section 2 of the said
Act;
21 Supply “Supply” shall have the same meaning as assigned to it in section 7 of the Central Goods
and Services Tax Act;
22 Taxable “Taxable territory” means the territory to which the provisions of this Act apply;
territory
23 Zero-rated “Zero-rated supply” shall have the meaning assigned to it in section 16;
supply
24 Words not Words and expressions used and not defined in this Act but defined in the Central Goods
defined = and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and
Meaning Services Tax (Compensation to States) Act shall have the same meaning as assigned to
assigned in them in those Acts;
CGST
25 Reference to any reference in this Act to a law which is not in force in the State of Jammu and Kashmir,
any law = shall, in relation to that State or Union territory be construed as a reference to the
Reference to corresponding law, if any, in force in that State.
the
corresponding
law for J&K
9
CHAPTER-II
ADMINISTRATION
SN Particulars
3 Appointment of officers
4 Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances
3. Appointment of officers:
3 Appointment The Board may appoint such central tax officers as it thinks fit for exercising the powers
of IGST under this Act.
Officers
4. Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances:
4 Board may Without prejudice to the provisions of this Act, the officers appointed under the State
authorise Goods and Services Tax Actor the Union Territory Goods and Services Tax Act are
Comm. of CGST authorised to be the proper officers for the purposes of this Act, subject to such
to appoint exceptions and conditions as the Government shall, on the recommendations of the
officers of IGST Council, by notification, specify.
10
CHAPTER-III
LEVY AND COLLECTION OF TAX
SN Particulars
5 Levy and Collection
6 Power to grant exemption from tax
5. Levy and Collection:
1 IGST on Subject to the provisions of sub-section (2),
inter-state
trade or  there shall be levied a tax called the integrated goods and services tax on
commerce  all inter-State supplies of goods or services or both;
 EXCEPT on the supply of ALCOHOLIC LIQUOR FOR HUMAN CONSUMPTION,
 on the value determined under section 15 of the CGST Act and at such rates,
 not exceeding forty per cent., 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:
When the
IGST on PROVIDED that the integrated tax on goods imported into India shall be levied and collected in
Imports be accordance with the provisions of section 3 of the Customs Tariff Act, 1975 on the value as
levied & determined under the said Act at the point when duties of customs are levied on the said
collected?? goods under section 12 of the Customs Act, 1962.
2 Petrol, etc- The integrated tax on the supply of petroleum crude, high speed diesel, motor spirit
Date to be (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect
notified from such date as may be notified by the Government on the recommendations of the Council.
3 RCM The Government may, on the recommendations of the Council, by notification, specify
categories of supply of goods or services or both, the tax on which shall be paid on reverse
charge basis by the recipient of such goods or services or both and
all the provisions of this Act shall apply to such recipient as if he is the person liable for paying
the tax in relation to the supply of such goods or services or both.
4 Supplier – The integrated tax in respect of the supply of taxable goods or services or both
Non
registered  by a supplier, who is not registered,
 to a registered person
Recipient –
Registered shall be paid by such person on reverse charge basis as the recipient and all the provisions of
this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to
Reverse the supply of such goods or services or both.
Charge
Mechanism Note:- In the 22nd meeting of GST council it has been decided to suspend the Provisions of
RCM under section 5(4) till 31-03-2018.
5 Services on The Government may, on the recommendations of the Council, by notification, specify
which tax categories of services, the tax on inter-State supplies of which shall be paid by the electronic
shall be commerce operator if such services are supplied through it, and all the provisions of this Act
paid by ECO shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax
in relation to the supply of such services:
11
PROVIDED that where an electronic commerce operator does not have a physical presence in
the taxable territory, any person representing such electronic commerce operator for any
purpose in the taxable territory shall be liable to pay tax:
PROVIDED further that where an electronic commerce operator does not have a physical
presence in the taxable territory and also does not have a representative in the said territory,
such electronic commerce operator shall appoint a person in the taxable territory for the
purpose of paying tax and such person shall be liable to pay tax.
 Understanding of the Proviso to Section 5(1):

 Example:
AV = Rs. 10,000 BCD @10% E. Cess @2% SHE Cess @1% IGST@18% C. Cess @ 12%
 Solution:
Assessable Value 1,00,000

(+) BCD @10% [A] 10,000
(+) E. Cess @2% [B] 200
(+) SHE Cess @1% [C] 100
Total value for levy of Integrated Tax u/s 3(7) of CTA, 1,10,300
1975
(+) IGST @18% [D] 19,854
(+) Compensation Cess @12% [E] 13,236
Total cost of imported goods 1,43,390
Total Customs Duty [A+B+C+D+E] 43,390
12
6. Power to grant exemption from tax:
1 Exemption Where the Government is satisfied that it is necessary in the public interest so to do, it may, on
by the recommendations of the Council, by notification, exempt generally, either absolutely or
notification subject to such conditions as may be specified therein, goods or services or both of any
specified description from the whole or any part of the tax leviable thereon with effect from
such date as may be specified in such notification.
2 Exemption Where the Government is satisfied that it is necessary in the public interest so to do, it may, on
by special the recommendations of the Council, by special order in each case, under circumstances of an
order exceptional nature to be stated in such order, exempt from payment of tax any goods or
services or both on which tax is leviable.
 Example (IMP):
It is well known that one sports personality of India was awarded a car by an international
car brand and when this car reached India, an exemption by way of special order was
issued to exempt payment of import duty. This is because the car brand had recognized
the contribution made by this person to world sport and recognized his contribution to
sportsmanship.
3 Explanation The Government may, if it considers necessary or expedient so to do for the purpose of
to the clarifying the scope or applicability of any notification issued under sub-section (1) or order
notification issued under sub-section (2), insert an explanation in such notification or order, as the case
or order may be, by notification at any time WITHIN ONE YEAR of issue of the notification under sub-
section (1) or order under sub-section (2), and every such explanation shall have effect as if it
had always been the part of the first such notification or order, as the case may be.
Explanation Explanation–– For the purposes of this section, where an exemption in respect of any goods or
services or both from the whole or part of the tax leviable thereon has been granted
absolutely, the registered person supplying such goods or services or both shall not collect the
tax, in excess of the effective rate, on such supply of goods or services or both.(VERY IMP)
13
1) Different States
IGST = 18
Supply of Goods/Services
Value = 100
IGST = 18
Total =118
Supplier (UP) Recipient (UK)
POS = UK
LOS= UP Inter-State Transaction IGST

POS = UK
2) Different UTs
IGST = 18
Supply of Goods/ Services
Value = 100
IGST = 18
Total =118
Supplier Recipient
(Lakshadweep) (Daman and Diu)
POS = Daman and Diu
LOS = Lakshadweep
Inter-State Transaction IGST
POS = Daman and Diu
14
3A) One State & one UT
IGST = 18
Value = 100
IGST = 18
Total =118
Supplier Recipient
(Lakshadweep) (Bihar)
POS = Bihar
LOS = Lakshadweep
POS = Bihar
3B) One State & one UT
IGST = 18
Value = 100
IGST = 18
Total =118
Supplier (Bihar) Recipient

(Lakshadweep)
POS = Lakshadweep
LOS = Bihar
POS = Lakshadweep
15
16
CHAPTER-IV
DETERMINATION OF NATURE OF SUPPLY
SN Particulars
7 Inter-State supply
8 Intra-State supply
9 Supplies in territorial waters
7. Inter-State supply:
1 IGST (Goods) = Subject to the provisions of section 10, supply of goods, where the location of the supplier
LOS & POS are and the place of supply are in––
in different
States (a) two different States;
(b) two different Union territories; or
(c) a State and a Union territory,
shall be treated as a supply of goods in the course of inter-State trade or commerce.
2 Import of Supply of goods imported into the territory of India, till they cross the customs frontiers of
Goods India, shall be treated to be a supply of goods in the course of inter-State trade or
commerce.
 Example:
Say Mr.A has imported certain goods from US & before clearance from the Custom
Authorities, Mr.A supplies the same goods to Mr.B by virtue of transfer of title. IGST shall
be paid by the person filing Bill of Entry i.e. Mr.B.
3 IGST (Services) Subject to the provisions of section 12, supply of services, where the location of the supplier
= LOS and POS and the place of supply are in––
are in
different (a) two different States;
States (b) two different Union territories; or
(c) a State and a Union territory,
shall be treated as a supply of services in the course of inter-State trade or commerce.
4 Import of Supply of services imported into the territory of India shall be treated to be a supply of
services services in the course of inter-State trade or commerce.
 Example:
Annual maintenance contract entered by a Company outside India for maintenance of
goods located in India.
5 Supplier=India Supply of GOODS or SERVICES or BOTH––

POS= Outside (a) when the supplier is located in India and the place of supply is outside India;
India  Understanding:
(Export: Kind This will cover the transaction which seems to be like export of SERVICES (but
of) may not be technically as per definition given in the law).Thus on clearance the
person have to execute bond and letter of undertaking to the extent of IGST
payable on such transaction or pay tax to this extent.
17
Supply to or (b) to or by a Special Economic Zone developer or a Special Economic Zone unit; or
by SEZ  Example:
developer or Say SEZ in Noida supplies goods or services to ABC Ltd in Kanpur OR say XYZ Ltd
Unit of Varanasi supplies to SEZ in Noida, these transactions will NOT be considered
as Intra-state supply although both the parties are located in one state. These
will be considered as Inter-state transactions and thus liable for IGST.
Not an intra-
state deemed (c) in the taxable territory, not being an intra-State supply and not covered
to be an Inter- elsewhere in this section,
state supply  Example:
Sec 8(1) defines intra-state supply, but the proviso specifically provide that
supply made to tourist referred under section 15 will not be considered as intra-
State supply of goods or services. Clause (c) of Sec 7 (5) further provides that if
the transaction is NOT an intra-state transaction and NOT covered under
section 7(1) to section 7(4) will be considered as inter-state transaction under
clause (c) of Sec 7 (5).
shall be treated to be a supply of goods or services or both in the course of inter-State trade
or commerce.
 Supply to or by SEZ unit or SEZ developer:

Inter-State Transaction
Supply to
Domestic Tariff SEZ Unit or SEZ
Area (DTA) Developer
Supply by
18
19
 Intra-State Transaction:
CGST = 09
SG SGST = 09
Supply of Goods &/or Services
Value = 100
CGST = 09
Supplier (UP) SGST = 09 Recipient
Total =118
POS = UP
LOS = UP Intra-State Transaction

POS = UP
CGST = 09
CG SGST = 09
Supply of Goods &/or Services
Value = 100
CGST = 09
Supplier SGST = 09 Recipient
Total =118
(Chandigarh)
POS = Chandigarh
LOS = Chandigarh Intra-State Transaction

POS = Chandigarh
20
8. Intra-State supply:
1 CGST & SGST Subject to the provisions of section 10, supply of goods where the location of the supplier
(Goods) = and the place of supply of goods are in the same State or same Union territory shall be
LOS & POS treated as intra-State supply:
are in same
States PROVIDED that the following supply of goods shall not be treated as intra-State supply,
namely:––
(i) supply of goods to or by a Special Economic Zone developer or a Special Economic
Zone unit;
(ii) goods imported into the territory of India till they cross the customs frontiers of
India; or
(iii) supplies made to a tourist referred to in section 15.
2 CGST&SGST Subject to the provisions of section 12, supply of services where the location of the supplier
(Services) = and the place of supply of services are in the same State or same Union territory shall be
Location of treated as intra-State supply:
Supplier and
POS are in PROVIDED that the intra-State supply of services shall not include supply of services to or by
same States a Special Economic Zone developer or a Special Economic Zone unit.
Explanation 1.––For the purposes of this Act, where a person has,––
(i) an establishment in India and any other establishment outside India;
(ii) an establishment in a State or Union territory and any other establishment

outside that State or Union territory; or
 Example:
HO in Mumbai and Branch in Bhopal. The office in Mumbai and
Branch in Bhopal shall be treated as an establishment of a distinct
person.
(iii) an establishment in a State or Union territory and any other establishment being
a business vertical registered within that State or Union territory,
 Example:
If separate registration is obtained for different business verticals
by any person within the State or the UT, the business verticals will
be considered as distinct persons.
then such establishments shall be treated as establishments of distinct persons.
Explanation 2.––A person carrying on a business through a branch or an agency or a

representational office in any territory shall be treated as having an establishment in that
territory.
 Understanding:
If the X Ltd’s branch or an agency or a representational office is located in
one country (say, USA) and the main office is located in another country
(say, India). X Ltd shall be treated as having an establishment in USA and
going with the clause (a) of Explanation 1 , the Branch or an agency or a
representational office in USA and the Main Office in India shall be treated
as establishments of distinct persons.
21
9. Supplies in territorial waters:
1 LOS = TW Notwithstanding anything contained in this Act,––
POS = TW
(a) where the location of the supplier is in the territorial waters, the location of such supplier;
Be deemed or
to be in the
Nearest (b) where the place of supply is in the territorial waters, the place of supply,
Coastal State
or UT shall, for the purposes of this Act, be deemed to be in the coastal State or Union territory
where the nearest point of the appropriate baseline is located.
 Example:
1) There is a supply from territorial waters where the supplier is located and the
nearest base line is at Kandla, Gujarat State then the place of supply is said to be in
Gujarat.
2) Some goods were supplied to a fishing trawler located in territorial waters near Yanam,
a part of union territory of Puducherry.
Since the nearest base line is at Yanam, place of supply shall be UT of Puducherry .
If the supplier is located in Puducherry — it is an intra-state supply.
If the supplier is located in Chennai, it is an interstate supply.
22
23
 POS-Sec Summary:
PLACE OF SUPPLY
GOODS SERVICES
Other than Imported Imported or Exported Location of Supplier & Location of Supplier OR
or Exported Goods Goods Recipient is in INDIA Recipient is outside INDIA
Section 10 Section 11 Section 12 Section 13

(IGST) (IGST) (IGST) (IGST)
 Domestic Supply:
Domestic Supply
Movement Bill to Ship to Movement NOT Assembly/ Supply on

involved Model involved Installation Board
Place where Person on whom Location of the Place of such Place where goods
movement the Bill is raised. Goods at the time Assembly/ are taken on
terminates for of delivery. Installation Board.
delivery.
24
CHAPTER-V
PLACE OF SUPPLY OF GOODS OR SERVICES OR BOTH
 Background:
‘Place of supply’ is not a phrase of common understanding, it is a legal term and as in all such cases, their
common understanding must not be applied and the meaning assigned in the law prevails. Place of supply, as
in the case of time of supply, is that which the legislature has appointed.
 GST a destination based consumption tax??

GST is understood as a ‘destination based consumption tax’ but there is no provision that declares this fact
convincingly.
It is here that we find that the destination principle of GST is fully captured. The law maker has declared, in
each case of supply, its destination of supply.
 Place of supply. Why?

Place of supply is important to determine the nature of sale (inter-state, intra-state, import or export) and the
State where State component of GST will accrue.
SN Particulars
10 Place of supply of goods other than supply of goods imported into, or exported from India
11 Place of supply of goods imported into, or exported from India
12 Place of supply of services where location of supplier and recipient is in India
13 Place of supply of services where location of supplier or location of recipient is outside India
14 Special provision for payment of tax by a supplier of online information and database access or retrieval
services
10. Place of supply of goods other than supply of goods imported into, or exported from India:
The phrase ‘location of supplier of goods’ has not been defined in the IGST Act and this must be deliberate. Two
very important phrases are relevant, namely:
 Location of supplier – the word ‘location’ in this phrase refers to the site or premises(geographical point)
where the supplier is situated with the goods in his control ready to be supplied; (VERY VERY IMP)
 Place of supply of goods – this is a legal phrase which the Section decides to be the site or premises
(geographical point) as its ‘place of supply’.
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 Bill to Ship to Model:

 Ist limb to Bill to Ship to Model:
Mr.Z, J/W or Agent

of Mr.Y, Gujarat
Goods
Mr.Y gave direction to Mr.X to

transport goods to Mr.Z
Mr.X, Supplier, Mr.Y, Real Purchaser
Uttar Pradesh (Third Person),
Maharashtra
POS= MAHARASHTRA
(Principal POB of Mr.Y)
LOS = UP
POS = Maharashtra Inter-State Transaction IGST
 Bill to Ship to Model:

 IInd limb to Bill to Ship to Model:
Mr.Z, J/W or Agent

of Mr.Y, Gujarat
Goods
Mr.Y gave direction to Mr.X to

transport goods to Mr.Z
Mr.X, Supplier, Mr.Y, Real Purchaser

Uttar Pradesh (3rd Person),
Maharashtra
POS= Gujarat
Mr.Y, Supplier,
(Location of Goods at the
Maharashtra
time of delivery)
LOS = Maharashtra
POS = Gujarat Inter-State Transaction IGST
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1 The place of supply of goods, other than supply of goods imported into, or exported from
India, shall be as under,––
POS= (a) where the supply involves movement of goods, whether by the supplier or the recipient
Location of or by any other person, the place of supply of such goods shall be the location of the goods at
the goods the time at which the movement of goods terminates for delivery to the recipient;
where the
movement  Example:
terminates 1) Say X company located in Maharashtra receives an order from Y in Gujarat for supply
for delivery of 100 Chairs. The price quoted by Mr.X is including freight amount. Therefore, X
company arranges for transportation of goods to Y in Gujarat. The movement of
goods terminate at Gujarat. Accordingly, the POS happens to be in Gujarat.
2) In the above example, let say the price quoted by X Company is ex-works (risk &
reward has been transferred at the factory of X company) . Thus, the transportation
is arranged by him & cost for same is also bourne by Y. Therefore, the movement of
goods terminates for delivery in Maharashtra itself. Accordingly, the POS happens to
be in Maharashtra.
POS= (b) where the goods are delivered by the supplier to a recipient or any other person on the
Principal direction of a third person, whether acting as an agent or otherwise, before or during
POB of third movement of goods, either by way of transfer of documents of title to the goods or
person otherwise, it shall be deemed that the said third person has received the goods and the place
(Bill to ship of supply of such goods shall be the principal place of business of such person;
to model)
 Understanding:
Where goods are delivered by the supplier to the recipient but at the instruction of a third
party, then the place of supply will be determined to be the place of supply will be the
principal place of business of such third party and not of the recipient. It is important to
identify the two supplies involved – by supplier to third party and by third party to
recipient. This provision deals only with the first limb of supply, that is, supply by supplier
to third party. Now, the place of supply will not be dependent on whether the movement
of goods is from one State to another (if the supplier and recipient are in two different
States) but as declared by the section to be dependent on the principal place of business
of such third party.
“Principal place of business” means the place of business specified as the principal
place of business in the certificate of registration
POS= (c) where the does not involve movement of goods, whether by the supplier or the recipient,
Location of the place of supply shall be the location of such goods at the time of the delivery to the
the goods at recipient;
the time of
delivery Q. What is the place of supply where movement of goods is not involved?
A. Where supply does not involve movement of goods, the place of supply will
be will be the location of goods at the time of delivery to the recipient.
Neither in the CGST Act nor in the IGST Act, the ‘location of supplier of goods’
has not been defined.
Therefore, the location of goods where they are ready to be supplied can be
understood to be the location of supplier.
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>> Assembly:
IGST = 18
POS = Bihar
Supply of parts of PRINTING MACHINE
Value = 100
IGST = 18
Total =118
Mr.X, Supplier (UP) Mr.Y, Recipient (Bihar)
LOS = UP Inter-State Transaction IGST

POS = Bihar
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 Example:
1) A generator that is bolted to the concrete floor in the basement of a building
purchased by the tenant and being left behind at the time of rejecting the tenancy,
the supply of the generator by the tenant to the landlord for an agreed price is a case
of ‘supply that does not involve movement of the goods’. In such cases, the place of
supply will be where the generator stands bolted to the concrete floor and without
requiring any movement the landlord (recipient) confirms satisfactory completion of
delivery.
2) The job worker develops a mould for the production of goods for the principal and
retains the mould in his place itself for production of goods. The mould developed by
the job worker is sold to the principal but the same are retained by the job worker
without causing the movement of mould from job worker premise to principal
premise. In this case the place of supply would be job worker premise.
3) The second limb of Bill to Ship to Model-supply by the third party to the recipient,
where the goods having already reached their destination under the first supply are
supplied – is a supply that does not involve movement of goods. And the place of
supply would be where the equipment is located (with the recipient) at the time of
confirmation of satisfactory completion of delivery. (Concept explained in diagram)
4) Normally in financial leasing, the agreement provides that the property in goods will
pass on to the lessee at the end of the lease period at a very NOMINAL AMOUNT.
Therefore when a sale take place at the end of the lease period, there is no movement
of the goods from one place to another. Therefore place of supply is the location of
the goods for delivery.
Considering that location of supplier will be location of goods in this type of

transaction, there will not be any inter-State supply since the location of
supplier and place of supply will be in the same State.
POS= (d) where the goods are assembled or installed at site, the place of supply shall be the place
Location of such installation or assembly;
where
goods are  Example:
installed 1) Company A in Delhi want to get a printing machine installed at its office in Delhi from
supplier B located in Haryana. Since the printing machine will be assembled or
installed at Delhi, the place of supply is Delhi.
2) XYZ Ltd. company located in Mumbai places an order on Mr. A in Maharashtra for
installation of generator in his factory located in Gujarat. Mr. A procures the
generator, set of chimneys, electrical cables, distribution boards & other items, etc.
The generator is assembled in Gujarat. The POS happens to be Gujarat although both
XYZ Ltd & Mr. A are located in Maharashtra. Therefore, Mr.A will charge IGST on the
invoice raised by him on XYZ Ltd.
POS (e) where the goods are supplied on board a conveyance, including a vessel, an aircraft, a
=Location at train or a motor vehicle,
which The place of supply shall be the location at which such goods are taken on board.
goods are
taken on
board  Example:
1) If an aircraft departs from Delhi to Chennai after taking onboard food for
consumption on board, the place of supply will be Delhi.
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2) A train starts from Delhi for Mumbai. On the way water bottle cartons are boarded
at Agra that are purchased by passengers during the journey from Agra to Mumbai.
The place of supply of water bottles is Agra.
2 Other cases- Where the place of supply of goods cannot be determined, the place of supply shall be
determined in such manner as may be prescribed.
11. Place of supply of goods imported into, or exported from India:
Export of Goods “Export of goods” with its grammatical variations and cognate expressions, means taking goods
out of India to a place outside India.
Import of Goods “Import of goods” with its grammatical variations and cognate expressions, means bringing
goods into India from a place outside India.
 Notes:
1) It is important to recognize that payment in convertible foreign exchange is not at all a criterion for
determining whether it is export or import.
2) Imports will be liable to IGST in addition to basic customs duty and exports will be zero-rated with
benefit of refund of input tax credit or rebate of tax paid.
3) VERY IMP:
The supplies to SEZ unit or developer are guided through under this section.
11 The place of supply of goods,––
Import (a) imported into India shall be the location of the importer;
 Example:
Mr.John, New York, USA supplies certain goods to ABC Ltd, Delhi, So, the place of
supply is Delhi, India.
Export (b) exported from India shall be the location outside India.
 Example:
ABC Ltd, Delhi supplies certain goods to Mr.John, New York, USA. So, the place of
supply is New York, USA.
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12. Place of supply of services where location of supplier and recipient is in India:
1 Applicability The provisions of this section shall apply to determine the place of supply of services where
the location of supplier of services and the location of the recipient of services is in India.
2 Supply to The place of supply of services, except the services specified in sub-sections (3) to (14),––
registered (a) made to a registered person shall be the location of such person;
person
POS = (b) made to any person other than a registered person shall be,––
Location of
Recipient (i) the location of the recipient where the address on record exists
[Address on record exists means the address of the recipient as available in the
records of the supplier] and
 Understanding:
Say, a CA/CS provides services to his client regularly. He bills to the client at
the address given by them and receives payment in consideration of
providing services.
(ii) the location of the supplier of services in other cases.

 Understanding:
Mr.X approached the watch repairer to repair his watch. He hands over the
watch over the counter to the repairer. The watch after repairing is done is
returned to the recipient of the service. The shop owner collects the
payment. In this case, the address of the recipient might not be available in
the records of the supplier. As per this clause, the location of the supplier
shall be the POS of service.
 Example:
a) If ABC Ltd in UP provides repair services of laptop to a customer (not
registered under GST laws) residing in Mumbai, Maharashtra and the
customer's address on record exists, the place of supply shall be the
location of the recipient i.e., Customer in Mumbai, Maharashtra - IGST
will be payable.
b) If ABC Ltd in UP provides repair services of laptop to a customer (not

registered under GST laws) residing in Mumbai, Maharashtra and the
customer's address on record does not exist, the place of supply shall
be the location of the Supplier i.e., ABC Ltd in UP - CGST / SGST will be
payable in UP.
3 POS in case The place of supply of services,––

services
rendered in (a) directly in relation to an immovable property, including services provided by architects,
relation to interior decorators, surveyors, engineers (civil engineers) and other related experts or
Immovable estate agents, any service provided by way of grant of rights to use immovable property or
property= for carrying out or co-ordination of construction work; or
Location of
the  Example:
immovable 1) Mr. Y took the architects and Interior decorating services from Mr. X from UP for
property Villa in Mumbai, Maharashtra.
located or Place of Supply is Maharashtra & therefore IGST is payable in UP.
intended to
be located 2) The Central Government very often invites bid from different entrepreneurs for
selling the right to extract the coal or other minerals from defined area. The
Entrepreneurs normally survey the area in order to estimate the quantum of
mineral available in the specified area. The bid for obtaining the right of
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exploration is made on this basis. For example, say Central Government invites
bids for extraction of coal in the area in the State of Jharkhand, The expert
surveyor Mr. Y located in Mumbai is hired by M/s X Company located in Delhi.
Since the immovable property i.e. land is located in Jharkhand, the place of supply
of service will be in Jharkhand and the person Mr. Y in Mumbai will have to charge
IGST as he has made inter-state supply of service.
3) Say, for example, Company X who is engaged in providing the property

management service enters into a contract for managing property located in
Chennai, Tamil Nadu. Since, the services are provided in relation to property
located in Chennai, the place of supply of service will be Chennai, Tamil Nadu.
[PMS - Tenant Screening, Leasing, Rent collection, Maintenance, Inspections,
Eviction, etc.]
4) Mr. Y took the services of Mr. X from UP, the real estate agent for renting or sale
of Villa in Mumbai, Maharashtra.
Place of Supply is Maharashtra & therefore IGST is payable in UP.
(b) by way of lodging accommodation by a hotel, inn, guest house, home stay, club or
campsite, by whatever name called, and including a house boat or any other vessel; or
 Example:
If services are provided in a house boat in Goa, then place of supply will be the
location of house boat i.e., Goa. IGST is not applicable: CGST/SGST is applicable.
(c) by way of accommodation in any immovable property for organising any marriage or
reception or matters related thereto, official, social, cultural, religious or business function
including services provided in relation to such function at such property; or
 Example:
If services are provided say in Hotel ITC Maurya at Delhi for a marriage reception, then
the place of supply will be Delhi. IGST is not applicable: CGST/SGST is applicable.
(d) any services ancillary to the services referred to in clauses (a), (b) and (c), shall be the
location at which the immovable property or boat or vessel, as the case may be, is located
or intended to be located:
 Example:
The ancillary services in respect of organizing any marriage function can be
arrangement of DJ system, decorators, beautician, etc. The POS would be governed
by this section.
PROVIDED that if the location of the immovable property or boat or vessel is located or
intended to be located outside India, the place of supply shall be the location of the
recipient.
 Example:
Mr.X (Recipient) located in India hires an Architect Mr.Y (Supplier) located in India
for designing of a building to be located in New York, USA. As per the Ist proviso, the
POS of service will be location of Mr.X. Since, Mr.X is located in India, the POS will be
India.
Explanation.––Where the immovable property or boat or vessel is located in more than one
State or Union territory, the supply of services shall be treated as made in each of the
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respective States or Union territories, in proportion to the value for services separately
collected or determined in terms of the contractor agreement entered into in this regard or,
in the absence of such contract or agreement, on such other basis as may be prescribed.
 Example:
OYO Rooms, based out of Mumbai, takes reservation for accommodation in its
hotels across India from INDIGO airlines, based out of New Delhi, for overnight stay
of its crew members. The place of accommodation services shall be the location of
the hotel where the crew members have stayed.
In case, the agreement between OYO rooms and INDIGO airlines is per night per
room basis, then the value of service separately collected for each hotel shall be
treated as the value of service for the respective state. In case, the agreement
between YOYO rooms and ABC airlines is on a lump sum basis for a month then the
place of supply shall be determined as may prescribed in rules.
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4 POS for The place of supply of restaurant and catering services, personal grooming, fitness, beauty
which treatment, health service including cosmetic and plastic surgery shall be the location where
physical the services are actually performed [Repairs Services].
presence is
required =  Example:
Location 1) Eating out at say Taj Mahal at Delhi, the place of supply will be Delhi - CGST / SGST
where the will be payable in Delhi.
services are
performed 2) If a beautician from VLCC , Mumbai (Maharashtra) carries out a beauty treatment
for a model at Kolkata in West Bengal, then the place of supply would be Kolkata
(West Bengal) - IGST will be payable in Maharashtra.
3) Mr X, resident of Delhi, goes to Mumbai for plastic surgery then the place of supply
of plastic surgery services shall be Mumbai.
Q. What is the place of supply of service where a restaurant provides catering

service at the premise of the customer?
(a) Address of the restaurant from where the food is supplied
(b) Customer premise where catering service is provided
A. (b) Customer premise where catering service is provided.
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5 POS in The place of supply of services in relation to training and performance appraisal to,––
relation to (a) a registered person, shall be the location of such person;
training &
performanc (b) a person other than a registered person, shall be the location where the services are
e appraisal actually performed.
= Location
 Services of training and performance appraisal supplied to a registered person
of the SR or
will be the location of the recipient. When the recipient is not registered, the
where the
place of supply will be the location where services are actually performed.
services are
actually
 Recipient here being the ‘payer of the consideration’ is not to be misconstrued
performed
to be the ‘trainee’ or ‘person appraised’.
 E.g.: Staff of a CA firm are sent for training, the recipient of the services here is
the CA firm and not the staff all though the staff improve their skills from this
training.
 Example on TRAINING:
1) If Oracle India Limited, Bangalore conducts a training program for Infosys India
(registered person at Delhi), the place of supply shall be Delhi. IGST payable in
Bangalore ( Karnataka);
2) If Oracle India Limited, Bangalore conducts a training program for XYZ Enterprises
(unregistered person in Mumbai), the place of supply shall be Mumbai. IGST is
payable in Mumbai.(The training program held in Mumbai).
3) If Mr. X, a resident of Mumbai, conducts training for employees of Software Ltd, a

company based out of New Delhi, in Nainital Resort located in Nainital, then the
place of supply of training service shall be New Delhi if Software Ltd is a registered
person. If Software Ltd is not a registered person, then to place of supply of training
service shall be Nainital.
Q. Mr. X a resident from Pune conducts training for employees of P Ltd. being a
registered person under GST based out in Chennai at a resort in Darjeeling. The
place of supply in this case is
(a) Chennai
(b) Pune
(c) Darjeeling
A. (a) Chennai
 Example on PERFORMANCE APPRAISAL:

1) In many organizations performance appraisals of senior employees are undertaken
by the outside agency to avoid biasness towards the employees. Say, XYZ Ltd located
in Jaipur (Receiver) hires Mr. A (Supplier) located in Mumbai for performance
appraisal of senior employees. The said services are performed at Mumbai. Mr. Y
evaluates the records in Mumbai and interviews employees at Mumbai. In such case,
the performance appraisal is made in Mumbai. The POS will be Jaipur if XYZ Ltd is
registered and if XYZ Ltd is NOT registered the POS will be Mumbai, Maharashtra.
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6 Event for The place of supply of services provided by way of admission to a cultural, artistic, sporting,
audience scientific, educational, entertainment event or amusement park or any other place and
services ancillary thereto, shall be the place where the event is actually held or where the
POS = Place park or such other place is located.
where the
event is  Example on admission to an EVENT:
actually 1) BMT Private Limited, a company based out of Mumbai providing online ticketing
held services for admission to various events, sells online tickets for IPL tournament to be
held across India, then the place of supply of services for admission to each cricket
match shall be the location where the match is actually played.
2) There is a specific mention of amusement park. Say Mr.A had paid Rs.500 as the
entry fees for admission into the park. The price of each of the ride is fixed. The
person can select and enjoy the ride of his choice. Entrance fee normally permits the
person to enjoy the rides upto Rs.400. Mr.A will have to pay separately for the
amount charged for enjoying the ride in excess of Rs.400. The POS will be where the
park is located.
 Example on services ancillary to admission to an EVENT:

3) A service of hiring a specific equipment (binoculars) to enjoy the event at the venue
(against a charge that is not included in the price of entry ticket) is an example of a
service that is ancillary to admission.
4) Ancillary can be washrooms facility.
7 Organisatio The place of supply of services provided by way of,—

n and
services (a) organisation of a cultural, artistic, sporting, scientific, educational or entertainment
ancillary to event including supply of services in relation to a conference, fair, exhibition, celebration or
such similar events; or
organization
of event: (b) services ancillary to organisation of any of the events or services referred to in clause (a) ,
or assigning of sponsorship (Eg: Lux Cine Awards) to such events,––
POS = (i) to a registered person, shall be the location of such person;

Location of
SR/ where (ii) to a person other than a registered person, shall be the place where the event
the event is is actually held and if the event is held outside India, the place of supply shall be the
actually location of the recipient.
held
Explanation––Where the event is held in more than one State or Union territory and a
consolidated amount is charged for supply of services relating to such event, the place of
supply of such services shall be taken as being in each of the respective States or Union
territories in proportion to the value for services separately collected or determined in terms
of the contract or agreement entered into in this regard or, in the absence of such contract
or agreement, on such other basis as may be prescribed.
 Example on organization of Event:

1) Mumbai International Exhibition Centre , Maharashtra (Supplier) organizing event
in Kolkata, West Bengal for Readymade Garments Manufacturers' Association
(RGMA), Delhi (Recipient)
- If RGMA (Recipient) is registered person at New Delhi

Place of supply of services shall be Delhi. IGST is payable in Mumbai, Maharashtra;
and
- If RGMA (Recipient) is unregistered: place of supply of services shall be Kolkata (as
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event is in Kolkata). IGST is payable in Mumbai, Maharashtra.
 Example on services ancillary to organization to an EVENT:

Provision of sound engineering for an artistic event is a prerequisite for staging of that
event and should be regarded as a service ancillary to its organization.
 Example on “Event held outside India”:

X Ltd in India hires Mr. Y as the event manager in India to organize an event in Singapore.
Mr.Y is paid in India for organizing the event in Singapore. As per Clause (b) (ii), the POS
of service by Mr.Y will be the location of the recipient that is XYZ Ltd i.e.- India.
 Example on “More than one state or UT”:

Miss India contest held at different locations of the country. Part of the event is held in
Bangalore, Mumbai, Chennai, etc. As per explanation, the POS of services would be place
where the respective event is held.
The explanation further provides that the value of the part of the event shall be
determined as per agreement. Thus, say, Miss India contest is held at Bangalore,
Mumbai, Chennai and the event manager specifies the value of organizing the event in
each state or UT will be as specified in the contract.
If the contract specifies lump-sum amount, the value will have to have to determined on
reasonable basis. It should be number of days spent, etc would be the basis for
allocation of the value. The POS of service would be in the respective State where the
part of the event is held.
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8 Transportati The place of supply of services by way of transportation of goods, including by mail or
on of Goods courier to,––
POS = (a) a registered person, shall be the location of such person;

Location of
SR / place (b) a person other than a registered person, shall be the location at which such goods are
where the handed over for their transportation.
location at
which the  Understanding on Mail or Courier (Very Imp):
such goods  The courier agency not only transport goods but also carries documents, cheques,
are handed etc. which cannot be considered as goods. The POS for transportation of such items
over for will not be determined as per this sub-section rather POS shall be decided as per
transportati sub-section (2) [General Clause].
on
The courier agency will have to maintain the separate records for transportation of
goods and for transportation of items other than goods.
 Example:
1) IOC, New Delhi (Registered person) is appointing BBR Logistics, Mumbai for
transportation of goods: Place of supply shall be New Delhi. IGST payable in
Mumbai, Maharashtra.
2) BBR Logistics, Mumbai providing transportation of goods to individual Mr. P for

personal use (unregistered person) located in Delhi. Mr.P handing over goods at
Delhi for transportation: Place of supply of services shall be Delhi. IGST shall be
payable in Mumbai, Maharashtra.
3) Express limited, Mumbai provides transportation services to Bikes Limited, an

automobile company based out of Chennai, for movement of their cars from the
warehouse of Bikes Limited at Lucknow to Delhi, then the place of supply of
transportation services shall be Chennai if Bikes Limited is a registered person. If
Bikes Limited is not a registered person, then the place of supply of transportation
services shall be Lucknow.
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9 Transport of The place of supply of passenger transportation service to,—

Passengers
(a) a registered person, shall be the location of such person;
POS = (b) a person other than a registered person, shall be the place where the passenger
Location of embarks on the conveyance for a continuous journey:
SR / place
where  Example:
passenger 1) ABC Travels (registered in Delhi) providing passenger transportation services to the
embarks for Mukesh Enterprises located and registered in Mumbai, Maharashtra: Place of supply
a of service shall be Mumbai, Maharashtra. IGST payable in Delhi;
continuous
journey 2) ABC Travels (registered in Delhi) providing transportation services to educational
institution located in Bangalore (unregistered person) for all India tour. The tour
scheduled to start from Bangalore: Place of supply of service shall be Bangalore. IGST
payable in Delhi;
3) Mr. X, a registered taxable person based out of Kolkata, purchases air ticket from
INDIGO Airlines Ltd, an airline company based out of Chennai, for travel from New
Delhi to NEW YORK via Dubai, then the place of supply of passenger transportation
shall be Kolkata. If Mr. X is not a registered person then the place of supply of
passenger transportation shall be New Delhi.
PROVIDED that where the right to passage is given for future use and the point of
embarkation is not known at the time of issue of right to passage, the place of supply of such
service shall be determined in accordance with the provisions of sub-section (2).
Q. Suppose a ticket/ pass for anywhere travel in India is issued by M/s Air
India to a person. What will be the place of supply?
A. In the above case, the place of embarkation will not be available at the
time of issue of invoice as the right to passage is for future use.
Accordingly, place of supply cannot be the place of embarkation. In such
cases, the default rule shall apply.
Explanation.––For the purposes of this sub-section, the return journey shall be treated as a
separate journey, even if the right to passage for onward and return journey is issued at the
same time.
Q. What will be the place of supply if a person travels from Mumbai to Delhi
and back to Mumbai (on single air ticket---- Mumbai-Delhi-Mumbai?
A. If the person is registered, the place of supply shall be the location of
recipient. If the person is not registered, the place of supply for the forward
journey from Mumbai to Delhi shall be Mumbai, the place where he
embarks.
However, for the return journey, the place of supply shall be Delhi as the
return journey has to be treated as separate journey.
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10 POS of The place of supply of services on board a conveyance, including a vessel, an aircraft, a train
services on or a motor vehicle, shall be the location of the first scheduled point of departure of that
Board = conveyance for the journey.
First
scheduled  Example:
point of A video game or a movie-on-demand is provided as on-board entertainment during the
departure Kolkata-Delhi leg of a Bangkok-Kolkata-Delhi flight. The place of provision of this service
of that will be Bangkok.
conveyance
If the above service is provided on a Delhi-Kolkata-Bangkok-Jakarta flight during the
Bangkok-Jakarta leg, then the place of provision will be Delhi.
11 POS of The place of supply of telecommunication services including data transfer, broadcasting,
Telecom cable and direct to home television services to any person shall,—
services
(a) Location (a) in case of services by way of fixed telecommunication line, leased circuits, internet
where the leased circuit, cable or dish antenna, be the location where the telecommunication
telecommu line, leased circuit or cable connection or dish antenna is installed for receipt of services;
nication line
is installed  Example:
Mr. A located (unregistered in Bhopal, MP) is receiving dish services from Airtel
Dish Services (registered in Bangalore): Place of supply of service shall be
Bhopal, MP. IGST payable in Bangalore;
(b) Post (b) in case of mobile connection for telecommunication and internet services provided
Paid = on post-paid basis, be the location of billing address of the recipient of services on the
Location of record of the supplier of services;
Billing
address of  Example:
SR Mr. A (unregistered person) has furnished Bhopal, MP address while obtaining
post-paid connection from Vodafone (registered in Chennai).He has now shifted
his place of residence to Bangalore.
Place of supply of service shall be Bhopal, MP.IGST is applicable.
(c) Pre Paid (c) in cases where mobile connection for telecommunication, internet service and
= Location direct to home television services are provided on pre-payment basis through a voucher
where such or any other means,––
prepayment (i) through a selling agent or a re-seller or a distributor of subscriber identity
is received module card or re-charge voucher, be the address of the selling agent or re-
or such seller or distributor as per the record of the supplier at the time of supply; or
vouchers
are sold (ii) by any person to the final subscriber, be the location where such
prepayment is received or such vouchers are sold;
(d) Not  Example:

covered – 1) Idea India Cellular have appointed Mr. A as a selling agent for supplying pre-
address of payment voucher to the subscriber. Idea India Cellular will supply voucher to
the Mr.A i.e. selling agent who in turn will sell to the final subscriber. The POS of
recipient TELECOMMUNICATION SERVICE by Idea India Cellular will be address of the
selling agent on the record of the Idea India Cellular. If the agent is located in
>> Recipient within the same state as Idea India Cellular is located, CGST and SGST will be
address-not charged and if they are located in different state, IGST will be charged.
available-
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Supplier 2) Where Idea India Cellular supplies voucher to any person say Mr.X (other than
address selling agent or a re-seller or a distributor). The POS of TELECOMMUNICATION
Net Banking SERVICE by Idea India Cellular will be the place Mr.X will receive the amount or
voucher is sold i.e. address of Mr.X
(d) in other cases, be the address of the recipient as per the records of the supplier of
services and where such address is not available, the place of supply shall be location of
the supplier of services:
PROVIDED that where the address of the recipient as per the records of the supplier of
services is not available, the place of supply shall be location of the supplier of services:
PROVIDED FURTHER that if such pre-paid service is availed or the recharge is made
through internet banking or other electronic mode of payment, the location of the
recipient of services on the record of the supplier of services shall be the place of supply
of such services.
 Example:
If Mr. A , Bhopal has pre-paid mobile connection of Vodafone (registered in Chennai)
and recharges his phone connection by making payment through net-banking: Place
of supply shall be Bhopal (location of recipient on record of service provider). IGST is
applicable.
Explanation.––Where the leased circuit is installed in more than one State or Union
territory and a consolidated amount is charged for supply of services relating to such circuit,
the place of supply of such services shall be taken as being in each of the respective States or
Union territories in proportion to the value for services separately collected or determined in
terms of the contract or agreement entered into in this regard or, in the absence of such
contract or agreement, on such other basis as may be prescribed.
 Example:
If Software Ltd, a company based out of Chennai procures services of leased circuit
lines for its branches in Mumbai, Calcutta and Chennai from DTH limited, a company
based out of New Delhi, then the place of supply of service of leased circuit lines
shall be proportionately at each branch where the installation is done. In case,
software Ltd pays a lump sum amount for the latest circuit lines services of all
branches, then the apportionment between states shall be done on reasonable basis
as may be prescribed in this regard.
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12 Banking + The place of supply of banking and other financial services, including stock broking
stock services to any person shall be the location of the recipient of services on the records of the
broking supplier of services:
services
If location
of recipient PROVIDED that if the location of recipient of services is not on the records of the supplier,
available = the place of supply shall be the location of the supplier of services.
Location of
SR in the
records of  Example on Banking Services :
SP 1) Mr. A (unregistered person) has furnished his residential address of Chennai, Tamil
Nadu at the time of opening SB account with PNB, Mumbai. He is receiving services
of locker facility from PNB, Mumbai: Place of supply of services shall be Chennai,
Tamil Nadu. IGST payable in Mumbai, Maharashtra;
2) Mr. A of Delhi (unregistered person) during his business travel to Mumbai. He pays
commission to PNB Mumbai for providing services in relation to obtaining demand
draft: Place of supply shall be Mumbai. IGST is not applicable: CGST/SGST is
applicable;
 Example on Stock broking:

1) Say the Stock broker is located in Mumbai but his clients are spread over in Kolkata,
Chennai, Bangalore, etc. The Stock broker purchase and sell the securities on behalf
of the clients located in Kolkata, Chennai, Bangalore, etc. The POS shall be the
address of the client as per record of the stock broker. Since these persons are
located outside Mumbai, the Stock broker will have to charge IGST in each of the
case.
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13 Insurance The place of supply of insurance services shall,––

Services: (a) to a registered person, be the location of such person;
(Life
Insurance + (b) to a person other than a registered person, be the location of the recipient of services on
General the records of the supplier of services.
Insurance)
 Example:
1) Ola Cabs Gurgaon, Haryana (registered person) having fleet of cars receives
RP = insurance services from the United Insurance Co, (registered person in Mumbai):
Location of Place of supply shall be Gurgaon, Haryana; IGST payable in Mumbai, Maharashtra;
SR (Actual)
2) Mr. A located in Lucknow (unregistered person) receives insurance services from LIC
of India (registered person in New Delhi): Place of supply shall be Lucknow. IGST
payable in New Delhi;
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14 Advertising The place of supply of advertisement services to the Central Government, a State
services to Government, a statutory body or a local authority meant for the States or Union territories
the Govt identified in the contract or agreement shall be taken as being in each of such States or Union
territories and the value of such supplies specific to each State or Union territory shall be in
POS shall be proportion to the amount attributable to services provided by way of dissemination in the
located in respective States or Union territories as may be determined in terms of the contractor
each state agreement entered into in this regard or, in the absence of such contract or agreement, on
in such other basis as may be prescribed.
proportion
 Example:
1) Government of India promoting 'Khadi products' in association with all the States
has appointed M/s XYZ Advertisement Private Limited (registered and located in
New Delhi) for advertisement in different States:
Services provided in the State of New Delhi: IGST is not applicable. CGST/SGST
applicable; Services provided in State other than New Delhi: IGST payable in New
Delhi;
2) Say the Government has hired 100 hoardings in Lakshadweep and 75 hoardings in
Gujarat for providing advertisement of Gas subsidy and the contract mention the
consideration for these hoardings separately. The value of services identifiable with
Lakshadweep and Gujarat shall be the amount mentioned in contract. In case the
contract does not mention the amount separately, the value of the hoarding shall be
determined on the reasonable basis. In this case the number of hoarding in each
state or UT. Thus the total consideration shall be divided by 175 to arrive at the
value of each hoarding. Value of each hoarding multiplied by number of hoarding
will provide the value of hoarding in each state or UT.
In case of broadcasting of advertisement on TV or radio, normally the rating

agencies are able to estimate the number of viewers watching the advertisement.
They also work out the Television Rating Point (TRP). This information can be the
basis of bifurcation of value in different States.
 Summary - Telecommunication Services:
Location
S No Description Service Service Others
Recipient Provider
1 For fixed line, leased circuits, internet x x Where installed for
leased circuits , cable connection or dish receipt of service
antenna
2 Post-paid mobile and internet service  x

(Billing address)

3 Prepaid mobile, internet service and direct to home television service through voucher or any other
means:
(a) Through selling agent or a reseller or a X x Address of such

distributor agent, reseller or
distributor
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(b) By any person to the final subscriber X x Where such pre-

payment is received
or voucher sold
4 For other cases

(i) Where address of the recipient is  x x
available as per records of the supplier
(ii) Where address of the recipient is X  x

not available as per records of the
supplier
PROVISO-1 If PREPAID SERVICE is availed or recharge  x x

is made through Internet banking or
other electronic mode
 
PROVISO-2 Where the address of the recipient as per X X
the records of the supplier of service is
NOT AVAILABLE
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 Sec 12 – Summary:
S Sec Applicability Type Place of Supply of Service
2 General Provision Made to a registered person location of such person

Made to unregistered person - location of recipient where
address on records exist
- location of the supplier of
services in other cases
3 Immovable property, services provided by architects, location at which immovable

boat or vessel interior decorators or any service property or boat or vessel is
provided by way of grant of rights to located or intended to be located
use immovable property or for
carrying out or co-ordination of
construction work
By way of lodging accommodation,

including a houseboat or vessel
Accommodation for organising

marriage or matters related thereto,
official, social, cultural, religious or
business function including services
provided in relation to such function
at such property; etc
Any ancillary services to the above

services
If immovable property or boat or the place of supply shall be the

vessel is located or intended to be location of the recipient
located outside India
Immovable located in more than one State proportionate allocation amongst

Property/boat/vessel states as per the value of service
received or as per the contract or
as may be prescribed
4 Specific services Services like beauty parlour, fitness, location where the services are
restaurant and catering services etc. actually performed
5 Training and Made to a registered person location of such person

performance Made to unregistered person location where the services are
appraisal actually performed
6 Services by way of admission to a cultural, artistic, where the event is actually held
sporting, scientific, educational, or where the park or such other
entertainment event or amusement place is located
park or any other place and services
ancillary thereto
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7 Organisation of a Made to a registered person location of such person

cultural, artistic,
sporting event etc., Made to unregistered person the place where the event is
and services ancillary actually held
to organisation of any
of the events or Event held outside India location of the recipient
assigning of
sponsorship of such Held in more than one State proportionate allocation amongst
events states as per the value of service
received or as per the contract or
as may be prescribed
8 Transportation of registered person location of such person

goods, including by
mail or courier unregistered person location at which such goods are
handed over for their
transportation
9 Passenger registered person location of such person

transportation
service
unregistered person place where the passenger
embarks on the conveyance for a
continuous journey
Right to passage is Made to a registered person Location of such person

given for future use
and the point of
embarkation is not Made to unregistered person location of recipient where address
known at the time of on records
issue of right to exist
- location of the supplier of
passage
services in other cases
*The return journey shall be treated as a separate journey, even if the right to passage for onward
and return journey is issued at the same time
10 On board a including a vessel, an location of the first scheduled

conveyance aircraft, a train or a motor vehicle point of departure of that
conveyance for the journey
12 Banking and other including stock broking services to - location of the recipient of service
financial services any person on records of supplier or
- if location of recipient is not
available, location of the supplier
of services
13 Insurance services Made to a registered person location of such person

Made to unregistered person location of the recipient of
Services on the records of the
supplier of services.
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13. Place of supply of services where location of supplier OR location of recipient is outside India:
Export of “Export of services” means the supply of any service when

Services (a) the supplier of service is located in India,
(b) the recipient of service is located outside India,
(c) the place of supply of service is outside India,
(d) the payment for such service has been received by the supplier of service in convertible foreign
exchange, and
(e) the supplier of service and recipient of service are not merely establishments of a distinct person in
accordance with Explanation 1 of section 5;
Import of “Import of service” means the supply of any service, where

Services (a) the supplier of service is located outside India,
(b) the recipient of service is located in India, and
(c) the place of supply of service is in India
1 Applicability The provisions of this section shall apply to determine the place of supply of services where the
location of the supplier of services OR the location of the recipient of services is outside India.
2 POS= The place of supply of services except the services specified in sub-sections (3) to (13) shall be
Location of the location of the recipient of services:
recipient, if
available,  Example:
otherwise 1) Say Mr. John (Recipient) of New York, USA wants to invest in India. He is looking for
location of investment in either Cement industry or Ready-made garment industry appoints a Mr.
the supplier Rahul (CA) in Delhi to prepare feasibility / profitability report indicating the ROI, EPS,
Market leaders, etc. In this case, the supplier of service is located in Delhi, India and
the recipient is located in New York, USA. Therefore, the POS is New York, USA
(Location of recipient)
2) Say Mr. Arpit (Recipient) of Delhi, India wants to invest in USA. He is looking for
investment in either Steel industry or Cosmetic industry appoints a Mr. Michaeal (CPA)
in New York, USA to prepare feasibility / profitability report indicating the ROI, EPS,
Market leaders, etc. In this case, the supplier of service is located in New York, USA
and the recipient is located in Delhi, India. Therefore, the POS is Delhi, India (Location
of recipient)
PROVIDED that where the location of the recipient of services is not available in the ordinary
course of business, the place of supply shall be the location of the supplier of services.
3 POS= Where The place of supply of the following services shall be the location where the services are
services are actually performed, namely:—
performed
(a) Services (a) services supplied in respect of goods which are required to be made physically available by
for which the recipient of services to the supplier of services, or to a person acting on behalf of the
goods made supplier of services in order to provide the services:
physically
available  Example:
1) An engineering firm (Supplier) located in India deputes its engineer to undertake
repairs on conveyor belt in the XYZ Ltd (Recipient) Automobile Plant In Bhutan. POS
will be Bhutan because it is the place where the services are performed.
[LOS = India {place where the person is incorporated} &
LOR =Bhutan]
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2) Air India gets the aircraft repaired at Mumbai airport, by the engineer deputed by
overseas company (say US Airlines) who travelled from USA to Mumbai, India. The POS
is Mumbai, Maharashtra because it is the place where the services are performed.
[LOS = USA {place where the person is incorporated} &
LOR = India]
PROVIDED that when such services are provided from a remote location by way of electronic
means, the place of supply shall be the location where goods are situated at the time of
supply of services:
 Example:
If Software Ltd, a company based out of Bangalore, awards online maintenance
contract of its servers located in Bangalore office to X INC, a company based out of
USA, and as per the terms of the online maintenance X INC shall be required to
perform regular maintenance from USA using Internet, then the place of supply of
maintenance services shall be Bangalore.
Likewise, if Software Ltd gets an order from an Australian Bank, based out of Sydney,
to monitor load of transactions on the servers located in Sydney using Internet
facilities, then the place of supply of such monitoring services shall be at Sydney,
Australia.
PROVIDED FURTHER that nothing contained in this clause shall apply in the case of services
supplied in respect of goods which are temporarily imported into India for repairs and are
exported after repairs without being put to any other use in India, than that which is required
for such repairs;
 Example:
Mr. John, New York, USA purchase an expensive watch from Mr.A of Delhi, India and
after sometime the watched stopped functioning. The watch is imported into India for
repairs. The POS of repair services is New York, USA as we require to switch to
General rule for determination of POS and the general rule says that the POS is
Location of Recipient.
[Let’s discuss, why they did this if the POS would be India (going by this rule) the
services would not ever be qualified as Export of Services. The intent of the
government to make POS of these service outside India so as to make them Export of
Services & if they qualify as export of services technically the supplier would be
getting tax reliefs and tax burden would not be passed on the person availing
services in abroad.]
(b) Services (b) services supplied to an individual, represented either as the recipient of services or a
which person acting on behalf of the recipient, which require the physical presence of the recipient or
require the person acting on his (recipient) behalf, with the supplier for the supply of services.[Eg:
physical Gunner service, beauty services]
presence
 Understanding PHYSICAL PRESENCE of the RECIPENT or the PERSON ACTING ON HIS
(RECIPIENT) BEHALF:
 Student X joins the coaching class Y located in Kota, Rajasthan. The students enrols
himself and pays the fee. In such case the service receiver is student himself. The
location of the coaching classes at Kota, Rajasthan will be considered as the POS of
supplier. (Physical Presence of the RECIPIENT)
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 XYZ Ltd deputes Manager X for certain course conducted by IIM-Ahmedabad in

Ahmedabad. Manager Y is representing the XYZ Ltd and has not joined the course in
his personal capacity. In this case, Mr.Y is acting on behalf of the service receiver XYZ
Ltd. In such a case also the POS of service will Ahmedabad (as the course is conducted
in Ahmedabad).
 Example:
 A modelling agency of New York, USA, for show in Delhi, contracts with a beauty
parlour for beauty treatment of say 20 Models. Here again is the situation where the
modelling agency is the receiver of service but the service is rendered to the models,
who are receiving the beauty treatment service on behalf of modelling agency.
Therefore the POS of such services is in Delhi, India as the beauty treatment service is
performed in Delhi, India.
(LOS – Delhi, India)
LOR - New York, USA)
4 POS in case The place of supply of services supplied directly in relation to an immovable property,
services including services supplied in this regard by experts and estate agents, supply of
rendered in accommodation by a hotel, inn, guest house, club or campsite, by whatever name called,
relation to grant of rights to use immovable property, services for carrying out or coordination of
Immovable construction work, including that of architects or interior decorators, shall be the place where
property = the immovable property is located or intended to be located.
Location of
the Example:-
immovable 1) If Mr. John of Sydney, Australia is constructing a house in Sydney and appoints
property Mr. Rahul of Mumbai to provide architectural services with regard proposed
construction of house located in Sydney, Australia then the place of supply of such
architectural services shall be Sydney, Australia.
2) If Mr. Amit of Delhi, India is constructing a Bungalow in Delhi and appoints Mr.
Michael of USA to provide architectural services with regard proposed
construction of house located in Delhi, India then the place of supply of such
architectural services shall be Delhi, India.
3) Security agency is appointed to provide services of securing the property in Dubai.

The POS of such services is Dubai as the Property is located in Dubai.
(LOR-India
LOS- Dubai)
4) A Lawyer is appointed by Mr. John New York, USA in connection with the drafting
of the agreement for acquiring the property in Mumbai. The service of lawyer is in
the relation of immovable property and therefore POS for such services in India as
the immovable property is located in India.
(LOR – New York, USA
LOS- Mumbai, India)
5 Event for The place of supply of services supplied by way of admission to, or organisation of a cultural,
Audience artistic, sporting, scientific, educational or entertainment event, or a celebration, conference,
fair, exhibition or similar events, and of services ancillary to such admission or organisation,
POS = Place shall be the place where the event is actually held.
where the
event is  Example:
actually held 1) If Company ABC limited in India pays for conference to Hotel Hyatt, New York,
USA to be attended by its CEO held in New York, the place of supply of service will
be New York, USA.
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2) If Company XYZ Inc in Australia pays for conference to Hotel ITC, Delhi to be
attended by its CEO held in Delhi, the place of supply of service will be Delhi, India.
 Example on services ancillary:

1) Apart from organizing the conference the Hotel also provided pick & drop facility
of CEO’s from or to the Airport. This is service ancillary to the organisation of
conference.
2) A person uses Golf cart to facilitate movement within the golf course during golf
tournament.
6 Supplies at Where any services referred to in sub-section (3) or sub-section (4) or sub-section (5) is
more than 1 supplied at more than one location, including a location in the taxable territory, its place of
location supply shall be the location in the taxable territory.
including TT
 Example:
POS= TT 1) An Indian firm provides a ‘technical inspection and certification service’ for a newly
developed product of an overseas firm (say, for a newly launched motorbike which has
to meet emission standards in different states or countries). Say, the testing is carried
out in Maharashtra (20%), Kerala (25%), and an international location, say, Colombo
(55%). The POS shall be location in the taxable territory and the tax will be payable on
the entire value. The tax will be partially payable in Maharashtra and partly payable in
Kerala as the event is performed in 2 states.
2) A coaching institute in India hires XYZ Ltd of USA to organize the study tour to USA,
Australia and India for studying the manner of records maintained by the Registrar of
Companies of respective countries. The study tour is for 10 days out of which 7 days
are spent in USA, Australia. As per this sub-section, the POS of service would be in
India as part of service (3 days) is rendered in India, the GST would be payable on the
entire amount of service.
Assuming that in India 3 days are spent in Maharashtra i.e. in Pune & Mumbai, the
GST would be payable on entire amount in Maharashtra. If the 3 days would have
been spent in Maharashtra (2 days) and UP (1 days). The GST would be payable in
Maharashtra & UP on reasonable basis (Eg: on the basis of number of days).
7 Services Where the services referred to in sub-section (3) or sub-section (4) or sub-section (5) are
supplied in supplied in more than one State or Union territory, the place of supply of such services shall
more than 1 be taken as being in each of the respective States or Union territories and the value of such
location = supplies specific to each State or Union territory shall be in proportion to the value of services
separately collected or determined in terms of the contract or agreement entered into in this
POS= regard or, in the absence of such contract or agreement, on such other basis as may be
Proportion to prescribed.
the value of
services  Example:
1) A coaching institute in India hires XYZ Ltd of USA to organize the study tour to USA,
Australia and India for studying the manner of records maintained by the Registrar of
Companies of respective countries. The study tour is for 10 days out of which 7 days
are spent in USA, Australia. As per this sub-section, the POS of service would be in
India as part of service (3 days) is rendered in India, the GST would be payable on the
entire amount of service.
Assuming that in India 3 days are spent in Maharashtra i.e. in Pune & Mumbai, the
GST would be payable on entire amount in Maharashtra. If the 3 days would have
been spent in Maharashtra (2 days) and UP (1 days). The GST would be payable in
Maharashtra & UP on reasonable basis (Eg: on the basis of number of days spent).
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8 POS = The place of supply of the following services shall be the location of the supplier of services,
Location of namely:––
the supplier
(a) services supplied by a banking company, or a financial institution, or a non banking
financial company, to account holders; [Forex, Portfolio services, etc]
“Account” means an account bearing interest to the depositor, and includes a non-
resident external account and a non-resident ordinary account;
 Understanding:
This clause is not applicable to a person to whom term loan or other loan has been
granted as he cannot be considered as account holder. He is considered as borrower.
He does not have account bearing interest.
 Example:
1) Say, Mr. John, New York, USA has opened Savings Bank Account with Mumbai
Branch, SBI Bank. The Mumbai Branch of SBI Bank grants loan and charges loan
processing charges to the account holder Mr. John. The POS of service will be
Mumbai, Maharashtra.
2) Say, Mr. Rahul, New Delhi, India has opened Savings Bank Account with BNP
Paribus Bank in New York, USA. The New York Branch of BNP Paribus Bank grants
loan and charges loan processing charges to the account holder Mr. Rahul. The
POS of service will be New York, USA.
(b) intermediary services;
“Intermediary” means a broker, an agent or any other person, by whatever name

called, who arranges or facilitates the supply of goods or services or both, or
SECURITIES, between two or more persons, but does not include a person who
supplies such goods or services or both or securities on his own account;
 Example:
1) 1)SaySay
Mr.X,Mr.X,
Delhi,Delhi,
India isIndia is engaged
engaged in selling
in selling the the tourby ABC Inc
tour conducted
conducted
located by ABC
in USA. ABC Incprovided
Inc has locatedMr.Xin USA. ABC Inc has
with brouchers and pamphlets
which assist him selling the tour to the customers.
provided Mr.X with brouchers and pamphlets which Therefore he will be
considered as intermediary and the POS of service shall be Delhi, India where
assist him selling the tour to the customers. Therefore
he is located.
he will be considered as intermediary and the POS of
2) Sayservice shallNew
Mr. Michael be Delhi, India
York, USA actswhere he is located.
as an intermediary agent to PQR Ltd
located in India which is engaged in manufacturing machines. Mr. Michael
2)procures
Say Mr. order for the New
Michael machines from
York, theacts
USA customers. Thus Mr. Michael is
as an intermediary
facilitating the machines by PQR Ltd to customers. Accordingly, Mr. Michael
agent to PQR Ltd located in India which is engaged in
will be considered as intermediary and the POS is in New York, USA where
Mr.manufacturing machines. Mr. Michael procures order for
Michael is located.
the machines from the customers. Thus Mr. Michael is
(c) services consistingfacilitating
of hiring of the machines
means by PQR
of transport, Ltd to
including customers.
yachts but excluding
 aircrafts andAccordingly, Mr. Michael will be considered as
 vessels
intermediary and the POS is in New York, USA where Mr.
up to a period of one month.
Michael is located.
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Q. XYZ Ltd, a shipping company located in Mumbai, has hired vessels from foreign
shipping of USA for a period of 25 days.
A. As per section 13(8)(c) of the IGST Act, 2017, the place of supply of service consisting
of hiring of all means of transport, including yachts but excluding
 aircrafts and
 vessels
up to a period of one month, is location of the supplier of the service.
Therefore, service of hiring of aircraft and vessel (except yachts), irrespective of the
period of hire, will be covered under Section 13(2) of the IGST Act, 2017 (default
provision) and the place of supply of service will be the location of the recipient of
service.
In the given case, since XYZ Ltd is located in Mumbai (recipient of service) has taken
vessel on hire from foreign shipping line of USA, the place of supply of aforesaid
hiring services will be Mumbai (location of service recipient).
VERY IMP:
 Yachts will be included in this provision.
 The POS for hiring of Aircrafts & Vessels will not decided by this section and shall
be decided as per Sec 13(2).
 And hiring of rest of the means of transport including Yachts for more than a
month. The POS for the same shall be decided as per Sec 13(2).
Explanation.––For the purposes of this sub-section, the expression,–
(a)“ Account” means an account bearing interest to the depositor, and includes a non-
resident external account and a non-resident ordinary account;
(b)“Banking company” shall have the same meaning as assigned to it under clause (a) of
section 45A of the Reserve Bank of India Act, 1934;
(c)‘‘Financial institution” shall have the same meaning as assigned to it in clause (c) of
section 45-I of the Reserve Bank of India Act, 1934;
(d)“Non-banking financial company” means,––
(i) a financial institution which is a company;

(ii) a non-banking institution which is a company and which has as its principal business
the receiving of deposits, under any scheme or arrangement or in any other manner, or
lending in any manner; or
(iii) such other non-banking institution or class of such institutions, as the Reserve Bank
of India may, with the previous approval of the Central Government and by notification
in the Official Gazette, specify.
9 Transportati The place of supply of services of transportation of goods, other than by way of mail or
on of goods courier, shall be the place of destination of such goods.
POS= Place  Example:

of 1) If PQR Limited (shipping Co) located in Delhi, India charges ocean freight for transport
destination of goods to Sydney, Australia for a customer located in India, the place of supply of
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service will be Sydney Australia.
2) If MNO Inc (shipping Co) located in New York, USA charges ocean freight for transport
of goods to Delhi, India for a customer located in USA, the place of supply of service
will be Delhi, India.
 Important note:
Place of supply of services of transportation of goods by way of mail or courier shall be
dealt as per Section 13(2).
10 Passenger The place of supply in respect of passenger transportation services shall be the place where
transport the passenger embarks on the conveyance for a continuous journey.
POS=
Embarks for
Continuous Q. What will be the place of supply if a person travels from London to Delhi and
Journey back to London?
A. The place of supply shall be the place where the passenger embarks on the
conveyance for a continuous journey. The place of supply for the forward
journey from London to Delhi shall be London, the place where he embarks.
However, for the return journey, the place of supply shall be Delhi as the return
journey has to be treated as separate journey.
11 Services The place of supply of services provided on board a conveyance during the course of a
availed on passenger transport operation, including services intended to be wholly or substantially
Board consumed while on board, shall be the first scheduled point of departure of that conveyance
POS= First for the journey.
scheduled
point of  Example:
departure 1) A video game or a movie-on-demand is provided as on-board entertainment during
the Kolkata-Delhi leg of a Bangkok-Kolkata-Delhi flight. The place of provision of this
service will be Bangkok.
If the above service is provided on a Delhi-Kolkata-Bangkok-Jakarta flight during the

Bangkok-Jakarta leg, then the place of provision will be Delhi.
12 Online The place of supply of online information and database access or retrieval services shall be the
information location of the recipient of services.
and database
access or
retrieval Explanation––For the purposes of this sub-section, person receiving such services shall be
services deemed to be located in the taxable territory, if any two of the following non contradictory
[OIDAR] conditions are satisfied, namely:––
(a) the location of address presented by the recipient of services through internet is in the
When the taxable territory [we normally punch the address while availing any services online];
person
receiving (b) the credit card or debit card or store value card or charge card or smart card or any
such services other card by which the recipient of services settles payment has been issued in the taxable
shall be territory;
deemed to
be located in (c) the billing address of the recipient of services is in the taxable territory;
the TT??
(d) the internet protocol [IP] address of the device used by the recipient of services is in
the taxable territory;
77
(e) the bank of the recipient of services in which the account used for payment is
maintained is in the taxable territory;
(f) the country code of the subscriber identity module card used by the recipient of services
is of taxable territory;
(g) the location of the fixed land line through which the service is received by the recipient
is in the taxable territory.
13 POS-effective In order to prevent double taxation or non-taxation of the supply of a service, or for the
use & uniform application of rules, the Government shall have the power to notify any description of
enjoyment of services or circumstances in which the place of supply shall be the place of effective use and
services enjoyment of a service.
78
14. Special provision for payment of tax by a supplier of online information and database access or retrieval
services:
 Background:
The place of supply in case of online information and database access or retrieval services (international
transactions) is the place where the recipient is located. Accordingly, in case of supply of such services to
business entity in taxable territory, tax will be paid by the receiver of such services.
(REVERSE CHARGE MECHANISM)
In case of such services provided to non-business entity, a separate mechanism is created in section which
provides for a special procedure to levy IGST on online information and database access or retrieval
services which is provided by a supplier in non-taxable territory to specified person in the taxable
territory. Thus, these services are essentially delivered over the electronic network or internet.
(NORMAL CHARGE MECHANISM)
1 Liability to pay On supply of online information and database access or retrieval services [OIDAR] by any
tax on the person located in a non-taxable territory and received by a non-taxable online recipient,
supply of the
OIDAR
supplier of services located in a non-taxable territory shall be the person liable for paying
integrated tax on such supply of services:
PROVIDED that in the case of supply of online information and database access or retrieval
services by any person located in a non-taxable territory and received by a non-taxable
online recipient, an intermediary located in the non-taxable territory, who arranges or
facilitates the supply of such services, shall be deemed to be the recipient of such services
from the supplier of services in non-taxable territory and supplying such services to the
non-taxable online recipient except when such intermediary satisfies the following
conditions, namely:–
(a) the invoice or customer’s bill or receipt issued or made available by such
intermediary taking part in the supply clearly identifies the service in question and
its supplier in non-taxable territory;
(b) the intermediary involved in the supply does not authorise the charge to the
customer or take part in its charge which is that the intermediary neither collects
or processes payment in any manner nor is responsible for the payment between
the non-taxable online recipient and the supplier of such services;
(c) the intermediary involved in the supply does not authorise delivery; and
(d) the general terms and conditions of the supply are not set by the intermediary
involved in the supply but by the supplier of services.
Q. What will be the implication if the intermediary located in non-taxable territory

facilitates or arranges such online information and data base access or retrieval
services of service provider located in non-taxable territory?
A. Such intermediary will be treated as supplier of such services to non-taxable
online recipient. However, if such intermediary fulfils with all the 4 conditions set
out the provision, intermediary will not be treated as supplier of services.
79
2 Payment of The supplier of online information and database access or retrieval services referred to in
IGST by the sub-section (1) shall, for payment of integrated tax, take a single registration under the
supplier Simplified Registration Scheme to be notified by the Government:
Person in TT PROVIDED that any person located in the taxable territory representing such supplier for
representing any purpose in the taxable territory shall get registered and pay integrated tax on behalf of
supplier- take the supplier:
registration &
pay IGST  Example:
Say a person Z has been appointed in India for developing content of the film or for
translating the dialogue of film in the India language. Even such person will be
considered as person liable to pay tax.
Doesn’t have PROVIDED FURTHER that if such supplier does not have a physical presence or does not
physical have a representative for any purpose in the taxable territory, he may appoint a person in
presence & no the taxable territory for the purpose of paying integrated tax and such person shall be
representative liable for payment of such tax.
– Appoint
Q/A. A USA based company ABC provides online video services to Indians. To watch the video an individual has
to pay some money electronically to ABC. In this case, company ABC has to discharge the Integrated Tax
liability.
Location of Supplier = USA

POS=USA NO TAX
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CHAPTER-VI
REFUND OF INTEGRATED TAX TO INTERNATIONAL TOURIST
15. Refund of integrated tax paid on supply of goods to tourist leaving India:
15 IGST shall be The integrated tax paid by tourist leaving India on any supply of goods taken out of India
refunded if by him shall be refunded in such manner and subject to such conditions and safeguards as
goods are may be prescribed.
taken out of
India Explanation––For the purposes of this section, the term “tourist” means a person not
normally resident in India, who enters India for a stay of not more than six months for
legitimate non-immigrant purposes.
 Understanding:
The OUTBOUND TOURIST has to substantiate the identification of goods with the tax
invoice on which the refund is being claimed. The Officer at the port shall be satisfied
that goods described in the invoice is same which are being taken out of India by
TOURIST.
Thus, the person shall not stay for more than six months in India to be eligible for
refund under this section.
 Example:
A tourist from London, UK visits India and purchases a camera from Delhi. In this case,
even though the place of supply and the location of supplier are in Delhi, it will be
treated as inter-state transaction and thus attracts IGST.
81
 Supply of Exempt & Taxable Supply:
UP
>> Therefore,
PQR Ltd, =>CGST+SGST+IGST= 3,60,000 shall
Supplier be added to the Cost of Supply.
Value = 10,00,000
CGST = 90,000
SGST = 90,000 UP
Total = 11,80,000
Value = 23,60,000
Value = 10,00,000 CGST = XXX
IGST = 1,80,000 SGST = XXX
India
Total = 11,80,000 Total = 23,60,000
Punjab POS= UP
Exempt Supplies
MNO Ltd,
Supplier
>> Therefore,
=>CGST+SGST+IGST= 3,60,000 shall
be eligible for Input Tax Credit
UP (means shall not be added to the

PQR Ltd, Cost of Supply)
Supplier
Value = 10,00,000
CGST = 90,000
SGST = 90,000 UP
Total = 11,80,000
Value = 20,00,000
Value = 10,00,000 CGST = 1,80,000
IGST = 1,80,000 SGST = 1,80,000
Total = 11,80,000 Total = 23,60,000 India
Punjab Taxable Supplies
MNO Ltd,
Supplier POS= UP
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>> Therefore,
=>CGST+SGST+IGST= 3,60,000 shall
UP be eligible for Input Tax Credit
PQR Ltd,
(means shall not be added to the
Supplier Cost of Supply)
Value = 10,00,000
CGST = 90,000
SGST = 90,000 UP
Total = 11,80,000
Value = 20,00,000
Value = 10,00,000 CGST = XXX
IGST = 1,80,000 SGST = XXX
Total = 11,80,000 Total = 20,00,000
Punjab Taxable/Exempt  Mr. John, USA

Supplies  SEZ Unit
MNO Ltd,  SEZ Developer
Supplier
POS= UP
Zero rated supplies
Exports  Supplies to SEZ unit

 Supplies to SEZ
developer
SEZs is considered to be a place outside

India for all tax purposes.
83
84
CHAPTER-VII
ZERO RATED SUPPLY
16. Zero rated supply:
1 Meaning of “zero rated supply” means any of the following supplies of goods or services or both,
ZRS namely:––
(a) export of goods or services or both; or
(b) supply of goods or services or both to a Special Economic Zone developer or a Special
Economic Zone unit.
2 ITC shall Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services
remain Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding
available that such supply may be an EXEMPT SUPPLY.
3 How to claim A registered person making zero rated supply shall be eligible to claim refund under either
refund?? of the following options, namely:––
(a) Export (a) he may supply goods or services or both under bond or Letter of Undertaking, subject to
under Bond such conditions, safeguards and procedure as may be prescribed, without payment of
integrated tax and CLAIM REFUND OF UNUTILIZED INPUT TAX CREDIT; or
(b) he may supply goods or services or both, subject to such conditions, safeguards and
(b) Export on procedure as may be prescribed, on payment of integrated tax and claim refund of such
payment of tax paid on goods or services or both supplied, in accordance with the provisions of section
IGST 54 of the Central Goods and Services Tax Act or the rules made thereunder.
 Sec 16 (3) (b) provides that the registered taxable person may export goods or services on payment of
IGST and claim refund of IGST.
85
>> Zero rated supply:
GOODS + SERVICES Entitled for the refund of Rs.3,60,000
UP
Value = 30,00,000 Under BOND
PQR Ltd, IGST = 5,40,000
Supplier
Export to USA
Value = 10,00,000
CGST = 90,000
SGST = 90,000 ABC Ltd, UP
Total = 11,80,000
Zero rated supply
IGST = 5,40,000 On PAYMENT

IGST = 5,40,000
Value = 10,00,000
IGST = 1,80,000 Export to
Total = 11,80,000
Mr.John
Punjab Taxable Supplies + Value = 30,00,000
Exempt Supplies IGST = NIL
MNO Ltd,
Supplier
POS= UP 1) ABC Ltd will not be collecting the tax amount
from Mr. John.
2) Tax Payment = Rs. 5,40,000 / 3,20,000
ITC available = (Rs.3,60,000)/(3,20,000)
Net Cash Payment = Rs. 1,80,000/ XXX
3) Entitled for refund of Rs. 5,40,000 / 3,20,000
86
>> Zero rated supply:
GOODS + SERVICES Entitled for the refund of Rs.3,60,000
UP
Value = 30,00,000
PQR Ltd, IGST = 5,40,000
Supplier SEZ unit/SEZ
developer
Value = 10,00,000
CGST = 90,000
SGST = 90,000 ABC Ltd, UP
Total = 11,80,000 Zero rated supply
For use in the authorised
operation
IGST = 5,40,000
IGST = 5,40,000
Value = 10,00,000
IGST = 1,80,000
SEZ unit/SEZ
Total = 11,80,000
developer
Punjab
Taxable Supplies + Value = 30,00,000
MNO Ltd, Exempt Supplies IGST = NIL
Supplier
POS= UP
1) ABC Ltd will not be collecting the tax amount
from SEZ Unit.
2) Tax Payment = Rs. 5,40,000 / 3,20,000
ITC available = (Rs.3,60,000)/(3,20,000)
Net Cash Payment = Rs. 1,80,000/ XXX
3) Entitled for refund of Rs. 5,40,000 / 3,20,000
87
88
CHAPTER-VIII
APPORTIONMENT OF TAX AND SETTLEMENT OF FUNDS
SN Particulars
17 Apportionment of tax and settlement of funds
18 Transfer of input tax credit
19 Tax wrongfully collected and paid to Central Government or State Government
17. Apportionment of tax and settlement of funds:
1 Inter-State Out of the integrated tax paid to the Central Government,––
supply to (a) in respect of inter-State supply of goods or services or both to an unregistered person or
unregistered to a registered person paying tax under section 10 of the Central Goods and Services Tax Act;
persons and
Sec 8 .The (b) in respect of inter-State supply of goods or servicesor both where registered person is
amount not eligible for input tax credit;
attributable
to CG? (c) in respect of inter-State supply of goods or services or both made in a financial year to a
registered person, where he does not avail of the input tax credit within the specified period
and thus remains in the integrated tax account after expiry of the due date for furnishing of
annual return for such year in which the supply was made;
(d) in respect of import of goods or services or both by an unregistered person or by a

registered person paying tax under section 10 of the Central Goods and Services Tax Act;
(e) in respect of import of goods or services or both where the registered person is not
eligible for input tax credit;
(f) in respect of import of goods or services or both made in a financial year by a registered
person, where he does not avail of the said credit within the specified period and thus remains
in the integrated tax account after expiry of the due date for furnishing of annual return for
such year in which the supply was received, the amount of tax calculated at the rate
equivalent to the central tax on similar intrastate supply shall be apportioned to the Central
Government.
2 Balance The balance amountof integrated tax remaining in the integrated tax accountin respect of
amount after the supply for which an apportionment to the Central Government has been done under sub-
apportioning section (1) shall be apportioned to the,––
to CG shall be (a)State where such supply takes place; and
apportioned
to State (b) Central Government where such supply takes place in a Union territory: Provided that
where the place of such supply made by any taxable person cannot be determined separately,
the said balance amount shall be apportioned to,––
(a) Each of the States; and
(b) Central Government in relation to Union territories, in proportion to the total

supplies made by such taxable person to each of such States or Union territories, as
the case may be, in a financial year:
PROVIDED FURTHER that where the taxable personmaking such supplies is not identifiable,
89
the said balance amount shall be apportioned to all Statesand the Central Government in
proportion to the amount collected as State tax or, as the case may be, Union territory tax,
by the respective State or, as the case may be, by the Central Government during the
immediately preceding financial year.
Q. To which State Government will the transfer be made?

A. The relevant State Government which would receive the transfer from IGST
Account of the Central Government would be the State in which the supply has
taken place.
Such State should be determined in terms of the provisions contained in Section

7, 8, 9 and 10 of the IGST Act, as applicable (viz., place of supply of goods and
place of supply of services).
3 The same The provisions of sub-sections (1) and (2) relating to apportionment of integrated tax shall,
provisions to mutatis mutandis apply to the apportionment of interest, penalty and compounding amount
apply for realised in connection with the tax so apportioned.
interest ,
penalty &
compounding
amount
4 IGST XXX Where an amount has been apportioned to the Central Government or a State Government
CGST under sub-section (1) or sub-section (2) or sub-section (3), the amount collected as integrated
(XXX) tax shall stand reduced by an
SGST (XXX)
Net XXX amount equal to the amount so apportioned and the Central Government shall transfer to
the central tax account or Union territory tax account, an amount equal to the respective
amounts apportioned to the Central Government and
shall transfer to the State tax account of the respective States an amount equal to the amount
apportioned to that State, in such manner and within such time as may be prescribed.
5 Subsequently Any integrated tax apportioned to a Stateor, as the case may be, to the Central Government
found on account of a Union territory, if subsequently found to be refundableto any person and
refundable refunded to such person, shall be reduced from the amount to be apportioned under this
shall be section, to such State, or Central Government on account of such Union territory, in such
reduced from manner and within such time as may be prescribed.
the SGST A/C
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18. Transfer of input tax credit:
On utilisation of credit of integrated tax availed under this Act for payment of,––
1 The availing Central tax in accordance with the provisions of sub-section (5) of section 49 of the Central
of ITC under Goods and Services Tax Act, the amount collected as integrated tax shall stand reduced by
IGST Act for an amount equal to the credit so utilisedand
payment of
CGST the Central Government shall transfer an amount equal to the amount so reduced from the
integrated tax account to the central tax account in such manner and within such time as
may be prescribed;
2 The availing Union territory tax in accordance with the provisions of section 9 of the Union Territory
of ITC under Goods and Services Tax Act, the amount collected as integrated tax shall stand reduced by
IGST Act for an amount equal to the credit so utilisedand
payment of
SGST the Central Government shall transfer an amount equal to the amount so reduced from the
integrated tax account to the Union territory taxaccount in such manner and within such
time as may be prescribed;
3 State tax in accordance with the provisions of the respective State Goods and Services Tax
Act, the amount collected as integrated tax shall stand reduced by an amount equal to the
credit so utilised and shall be apportioned to the appropriate State Government and the
Central Government shall transfer the amount so apportioned to the account of the
appropriate State Government in such manner and within such time as may be prescribed.
Explanation––For the purposes of this Chapter, “appropriate State” in relation to a taxable

person, means the State or Union territory where he is registered or is liable to be registered
under the provisions of the Central Goods and Services Tax Act.
19. Tax wrongfully collected and paid to Central Government or State Government (Refer Sec 77 of CGST
Act, 17):
1 Intra-state A registered person who has paid integrated tax on a supply considered by him to be an inter-
held to be State supply, but which is subsequently held to be an intra-State supply, shall be granted refund
an Inter- of the amount of integrated tax so paid in such manner and subject to such conditions as may be
state prescribed.
Inter-State Q. Whether IGST wrongly paid on inter-state supply by treating as inter-state supply
 Intra- can be claimed as refund?
State A. If a taxable person has paid IGST by treating transaction as inter-state supply but later
(Actually) held to be intra-state supply. Then upon payment of CGST and SGST in the
appropriate State, such person would be allowed to take the amount of IGST so paid
as refund.
2 No interest- A registered person who has paid central tax and State tax or Union territory tax, as the case
--Inter-state may be, on a transaction considered by him to be an intra-State supply, but which is
held to be subsequently held to be an inter-State supply, shall not be required to pay any interest on the
an Intra- amount of integrated tax payable.
state
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Intra-State Q. Is interest required to be paid on IGST payable where CGST/SGST has been paid
 Inter- instead of IGST by treating the transaction to be intra-state?
State A. Interest is not required to be paid. As per section 19(2) when CGST/SGST has been
(Actually) paid instead of IGST by treating the transaction to be intra-state instead of interstate
interest is not required to be paid on IGST payable on such inter-state transaction.
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CHAPTER-IX
MISCELLANEOUS
SN Particulars
20 Application of provisions of Central Goods and Services Tax Act
21 Import of services made on or after the appointed day
22 Power to make rules
23 Power to make regulations
24 Laying of rules, regulations and notifications
25 Removal of difficulties
20. Application of provisions of Central Goods and Services Tax Act:
1 Application of Subject to the provisions of this Act and the rules made thereunder, the provisions 35 of
certain Central Goods and Services Tax Act relating to,–
provisions of
the CGST Act, (i) scope of supply;
2016
(ii) composite supply and mixed supply;
(iii) time and value of supply;
(iv) input tax credit;
(v) registration;
(vi) tax invoice, credit and debit notes;
(vii) accounts and records;
(viii) returns, other than late fee;
(ix) payment of tax;
(x) tax deduction at source;
(xi) collection of tax at source;
(xii) assessment;
(xiii) refunds;
(xiv) audit;
(xv) inspection, search, seizure and arrest;
(xvi) demands and recovery;
(xvii) liability to pay in certain cases;
(xviii) advance ruling;
93
(xix) appeals and revision;
(xx) presumption as to documents;
(xxi) offences and penalties;
(xxii) job work;
(xxiii) electronic commerce;
(xxiv) transitional provisions; and
(xxv) miscellaneous provisions including the provisions relating to the imposition of

interest and penalty,
shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they apply in
relation to central taxas if they are enacted under this Act:
TDS @ 2% PROVIDED that in the case of tax deducted at source, the deductor shall deduct tax at the
rate of two per centfrom the payment made or credited to the supplier:
TCS @ 2% PROVIDED FURTHER that in the case of tax collected at source, the operator shall collect tax
at such rate not exceeding two per cent, as may be notified on the recommendations of the
Council, of the net value of taxable supplies:
PROVIDED also that for the purposes of this Act, the value of a supply shall include any taxes,
duties, cesses, fees and charges levied under any law for the time being in force other than
this Act, and the Goods and Services Tax (Compensation to States) Act, if charged separately
by the supplier:
PROVIDED also that in cases where the penalty is leviable under the Central Goods and
Services Tax Act and the State Goods and Services Tax Act or the Union Territory Goods and
Services Tax Act, the penalty leviable under this Act shall be the sum total of the said
penalties.
21. Import of services made on or after the appointed day:
21 Import of services made on or after the appointed day shall be liable to tax under the
provisions of this Act regardless of whether the transactions for such import of services had
been initiated before the appointed day:
PROVIDED that if the tax on such import of services had been paid in full under the existing
law, no tax shall be payable on such import under this Act:
PROVIDED FURTHER that if the tax on such import of services had been paid in part under
the existing law, the balance amount of tax shall be payable on such import under this Act.
Explanation––For the purposes of this section, a transaction shall be deemed to have been
initiated before the appointed day if either the invoice relating to such supply or payment,
either in full or in part, has been received or made before the appointed day.
94
22. Power to make rules:
1 CG to make The Government may, on the recommendations of the Council, by notification, make rules for
rules to carry carrying out the provisions of this Act.
purpose of
the Act
2 Specific Without prejudice to the generality of the provisions of sub-section (1), the Government may
powers - make rules for all or any of the matters which by this Act are required to be, or may be,
Rules may be prescribed or in respect of which provisions are to be or may be made by rules.
regarding:
3 Rules may be The power to make rules conferred by this section shall include the power to give
brought into retrospective effect to the rules or any of them from a date not earlier than the date on
force by which the provisions of this Act come into force.
retrospective
amendments  Understanding:
Legislature has an inherent power to make retrospective laws but the delegated authority
can make retrospective rules but not earlier that the date of commencement of this Act.
4 General Any rules made under sub-section (1) may provide that a contravention thereof shall be liable
penalty for to a penalty not exceeding ten thousand rupees.
breach of any
rule-upto
Rs.10,000 if
no specific
penalty is
prescribed
23. Power to make regulations:
23 CG to make The Board may, by notification, make regulations consistent with this Act and the rulesmade
regulations thereunder to carry out the provisions of this Act.
to carry
purpose of
the Act
24. Laying of rules, regulations and notifications:
24 Rules and  Every rule made by the Government, every regulation made by the Board and every
notifications notification issued by the Government under this Act, shall be laid, as soon as may be,
shall be laid after it is made or issued, before each House of Parliament,
before
Parliament/  while it is in session, for a total period of thirty days which may be comprised in one
State session or in two or more successive sessions, and
Legislature
 if, before the expiry of the sessionimmediately following the session or the successive
sessions aforesaid,
 both Houses agree in making any modification in the rule or regulation or in the
notification, as the case may be, or both Houses agree that the rule or regulation or the
notification should not be made,
the rule or regulation or notification, as the case may be, shall thereafter have effect
only in such modified form or be of no effect, as the case may be;
95
 so, however, that any such modification or annulment shall be without prejudice to the
validity of anything previously done under that rule or regulation or notification, as the
case may be.
25. Removal of difficulties:
1 If difficulty If any difficulty arisesin giving effect to any provision of this Act, the Government may, on the
arises- do recommendations of the Council, by a general or a special order published in the Official
anything to Gazette, make such provisions not inconsistent with the provisions of this Act or the rules or
remove regulations made thereunder, as may be necessary or expedient for the purpose of removing
difficulty the said difficulty:
Order to be PROVIDED that no such order shall be made after the expiry of a period of three years from
made within the date of commencement of this Act.
the expiry of
three years
2 Shall be laid Every order made under this section shall be laid, as soon as may be, after it is made, before
before each House of Parliament.
Parliament/
State
Legislature
Q. Whether prior approval of the Parliament / Stage Legislature is required?

A. No. The order must be placed before the Parliament / Stage Legislature, at the earliest time, after the order is
issued.
96
97
98
THE UNION TERRITORY GOODS AND SERVICES TAX ACT, 2017
CHAPTER-I
PRELIMINARY
 Introduction:
To usher in the GST regime, Union Territory tax along with related GST legislations was to replace the
current tax while empowering the Central Government to levy Union Territory tax on the supply of goods
or services or both taking place within a Union Territory not having a Legislature.
India is a summation of three categories of territories namely –

i) States (29);
ii) Union Territories with Legislature (2); and
iii) Union Territories without Legislature (5).
‘State’ under the GST law is defined to include a Union Territory with Legislature. Delhi and Puducherry,
though are Union Territories, have a Legislature of their own. Accordingly, for GST the Union Territories of
Delhi and Puducherry will be regarded as a State and will be governed by the respective SGST laws
passed by them and rest of the Union Territories like the Andaman and Nicobar Islands, Lakshadweep,
Dadra and Nagar Haveli, Daman and Diu and Chandigarh will be governed by UTGST Act, 2017.
 Applicability of the UTGST Act:

This Act may be called the Union Territory Goods and Services Tax Act, 2017. It would be applicable in the
following union territories.
a) Andaman and Nicobar Islands
b) Lakshadweep,
c) Dadra and Nagar Haveli
d) Daman and Diu,
e) Chandigarh and
f) other territory.
The Delhi and the Pondicherry are the other two union territories but this Act will not be applicable there as
they have their own state legislature and government. State GST would be applicable in their case.
99
SN Particulars
2 Definitions
1 Name of This Act may be called the Union Territory Goods and Services Tax Act, 2017.
the Act
2 Applicability It extends to the Union territories of the
i) Andaman and Nicobar Islands,
ii) Lakshadweep,
iii) Dadra and Nagar Haveli,
iv) Daman and Diu,
v) Chandigarh and
vi) other territory.
3 When It shall come into force on such date as the Central Government may, by notification in the
applicable?? Official Gazette, appoint:
Notification
in OG PROVIDED that different dates may be appointed for different provisions of this Act and any
reference in any such provision to the commencement of this Act shall be construed as a
reference to the coming into force of that provision.
2. Definitions:
In this Act, unless the context otherwise requires,—
1 Appointed ‘‘Appointed day’’ means the date on which the provisions of this Act shall come into force.
day
2 Commissioner ‘‘Commissioner’’ means the Commissioner of Union territory tax appointed under sect. 3;
3 Designated ‘‘Designated authority’’ means such authority as may be notified by the Commissioner;
authority
4 Exempt supply ‘‘Exempt supply’’ means supply of any goods or services or both which attracts
 nil rate of tax or
 which may be exempt from tax under section 8, or under section 6 of the
Integrated Goods and Services Tax Act, and
 includes non-taxable supply;
5 Existing law ‘‘Existing law’’ means any law, notification, order, rule or regulation relating to levy and
collection of duty or tax on goods or services or both passed or made before the
commencement of this Act by Parliament or any Authority or person having the power to
make such law, notification, order, rule or regulation;
6 Government ‘‘Government’’ means the Administrator or any authority or officer authorised to act as
Administrator by the Central Government;
7 Output tax ‘‘Output tax’’ in relation to a taxable person, means the Union territory tax chargeable
under this Act on taxable supply of goods or services or both made by him or by his agent
but excludes tax payable by him on reverse charge basis;
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8 Union ‘‘Union territory’’ means the territory of,—

territory (i) the Andaman and Nicobar Islands;
(ii) Lakshadweep;
(iii) Dadra and Nagar Haveli;
(iv) Daman and Diu;
(v) Chandigarh; or
(vi) Other territory.
Explanation.—For the purposes of this Act, each of the territories specified in sub-clauses
(i) to (vi) shall be considered to be a separate Union territory;
9 UTT ‘‘Union territory tax’’ means the tax levied under this Act;
10 Words not Words and expressions used and not defined in this Act but defined in the Central Goods
defined? and Services Tax Act, the Integrated Goods and Services Tax Act, the State Goods and
Services Tax Act, and the Goods and Services Tax (Compensation to States) Act, shall
have the same meaning as assigned to them in those Acts.
V INDIA “India” means

IM  the territory of India as referred to in article 1 of the Constitution,
P  its territorial waters, seabed and sub-soil underlying such waters,
 continental shelf, exclusive economic zone or any other maritime zone as
referred to in the Territorial Waters, Continental Shelf, Exclusive Economic Zone
and other Maritime Zones Act, 1976, and
 the air space above its territory and territorial waters;
 Exclusive Economic Zone-

The exclusive economic zone of India (hereinafter referred to as the exclusive
economic zone) is an area beyond and adjacent to the territorial waters, and the
limit of such zone is two hundred nautical miles from the baseline.
 Continental shelf
The continental shelf of India comprises the seabed and subsoil of the
submarine areas that extend beyond the limit of its territorial waters
throughout the natural prolongation of its land territory to the outer edge of the
continental margin or to a distance of two hundred nautical miles from the
baseline where the outer edge of the continental margin does not extend up to
that distance.
The territory of India as referred to  Land Part

in article 1 of the Constitution, 29 States
7 UTs
 Other territories as may be acquired.
Territorial waters, seabed and sub- TWI = 12 Nm

soil Seabed = solid surface underlying a sea or
ocean
Subsoil = the earthy material immediately

under the surface soil
Continental shelf and EEZ 200 Nm

Air space above its territory and Air space over LAND PART+TWI
territorial waters
101
CHAPTER-II
ADMINISTRATION
SN Particulars
3 Officers under this Act
4 Authorisation of officers
5 Powers of officers
6 Authorisation of officers of Central Tax as proper officer in certain circumstances
3. Officers under this Act:
3 Appointment The Administrator may, by notification, appoint Commissioners and such other class of
of Officers officers as may be required for carrying out the purposes of this Act and such officers shall be
deemed to be proper officers for such purposes as may be specified therein:
Officers PROVIDED that the officers appointed under the existing law shall be deemed to be the
under officers appointed under the provisions of this Act.
Existing law =
Officer under
UTGST Act
4. Authorisation of officers:
4 Administrator The Administrator may, by order, authorise any officer to appoint officers of Union territory
appoint tax below the rank of Assistant Commissioner of Union territory tax for the administration
officers of this Act.
below AC
5. Powers of officers:
1 Officer Subject to such conditions and limitations as the Commissioner may impose, an officer of the
exercises Union territory tax may exercise the powers and discharge the duties conferred or imposed
powers on him under this Act.
2 Officer may An officer of a Union territory tax may exercise the powers and discharge the duties
discharge the conferred or imposed under this Act on any other officer of a Union territory tax who is
duties of subordinate to him.
subordinate
3 Officer may The Commissioner may, subject to such conditions and limitations as may be specified in this
delegate the behalf by him, delegate his powers to any other officer subordinate to him.
duties
4 FAA shall Notwithstanding anything contained in this section, an Appellate Authority shall not exercise
discharge the the powers and discharge the duties conferred or imposed on any other officer of UTT.
duties
102
6. Authorisation of officers of Central Tax as proper officer in certain circumstances:
1 Officers Without prejudice to the provisions of this Act, the officers appointed under the Central
under CGST Goods and Services Tax Act are authorised to be the PROPER OFFICERS for the purposes of
Act = PO THIS ACT, subject to such conditions as the Government shall, on the recommendations of
under UTGST the Council, by notification, specify.
2 Subject to the conditions specified in the notification issued under sub-section (1),—
(a) Order (a) where any proper officer issues an order under this Act, he shall also issue an order
passed under under the Central Goods and Services Tax Act, as authorised by the said Act under
UTGST Act, intimation to the jurisdictional officer of central tax;
then PO shall
also issue
order under
CGST
(b) where a proper officer under the Central Goods and Services Tax Act has initiated any
(b)Proceedin proceedings on a subject matter, no proceedings shall be initiated by the proper officer
gs initiated under this Act on the SAME subject matter.
under CGST
Act = No
proceedings
to be
initiated
under UTGST
Act on the
SAME matter
3 Order passed Any proceedings for rectification, appeal and revision, wherever applicable, of any order
by the UTGST passed by an officer appointed under this Act, SHALL NOT LIE before an officer appointed
officer, the under the Central Goods and Services Tax Act.
appeals, etc
shall not lie
to before
officers -
CGST Act
103
CHAPTER-III
LEVY AND COLLECTION OF TAX
SN Particulars
7 Levy and Collection
8 Power to grant exemption from tax
7. Levy and Collection:
1 UTGST on Subject to the provisions of sub-section (2),
inter-state
supplies  there shall be levied a tax called the Union territory tax on all intra-State supplies of goods
or services or both, EXCEPT on the supply of ALCOHOLIC LIQUOR FOR HUMAN
CONSUMPTION,
 on the value determined under section 15 of the Central Goods and Services Tax Act and
at such rates, not exceeding twenty per cent., as may be notified by the Central
Government
 on the recommendations of the Council and collected in such manner as may be

prescribed and shall be paid by the taxable person.
2 Petrol, The Union territory tax on the supply of

Natural gas  petroleum crude, high speed diesel, motor spirit (commonly known as petrol),
, ATF- date  natural gas and
to be  aviation turbine fuel
notified
shall be levied with effect from such date as may be notified by the Central Government on
the recommendations of the Council.
3 Reverse The Central Government may, on the recommendations of the Council, by notification, specify
Charge categories of supply of goods or services or both, the tax on which shall be paid on reverse
Mechanism charge basis by the recipient of such goods or services or both and
all the provisions of this Act shall apply to such recipient as if he is the person liable for paying
the tax in relation to the supply of such goods or services or both.
4 Supplier – The Union territory tax in respect of the supply of taxable goods or services or both
Non  BY a supplier, who is not registered,
registered  TO a registered person
Recipient – shall be paid by such person on reverse charge basis as the recipient and all the provisions of
Registered this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to
the supply of such goods or services or both.
RCM
5 Services on The Central Government may, on the recommendations of the Council, by notification, specify
which tax categories of services the tax on intra-State supplies of which shall be paid by the electronic
shall be commerce operator if such services are supplied through it, and all the provisions of this Act
paid by shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax
ECO in relation to the supply of such services:
104
PROVIDED that where an electronic commerce operator does not have a physical presence in
the taxable territory, any person representing such electronic commerce operator for any
purpose in the taxable territory shall be liable to pay tax:
PROVIDED FURTHER that where an electronic commerce operator does not have a physical
presence in the taxable territory and also he does not have a representative in the said
territory, such electronic commerce operator shall appoint a person in the taxable territory for
the purpose of paying tax and such person shall be liable to pay tax.
8. Power to grant exemption from tax:
1 Exemption Where the Central Government is satisfied that it is necessary in the public interest so to do, it
by may, on the recommendations of the Council, by notification, exempt generally either
notification absolutely or subject to such conditions as may be specified therein, goods or services or both
of any specified description from the whole or any part of the tax leviable thereon with effect
from such date as may be specified in such notification.
 Examples for Absolute Exemptions:

1) Wholly: The Central Government may exempt the tax payable under the UTGST Act
by any taxable person on supply of “sugar” with effect from 01.04.2018.
2) Partial: All kinds of digital training services @ 9% (Exemption-50%) with effect from
01.04.2018.
 Examples for Conditional Exemptions:

1) Wholly: The Central Government may exempt the tax payable under the UTGST Act
by any taxable person on supply of “blankets with MRP less than Rs. 300” with effect
from 01.04.2018.
2) Partial: The tax payable by a registered taxable person on the supply of scissors
made to a recipient, being a registered taxable person, shall be calculated @ 1%
subject to the condition that the recipient uses such goods as inputs in the
manufacture of scissors used in medical surgeries with effect from 01.04.2018.
2 Exemption Where the Central Government is satisfied that it is necessary in the public interest so to do, it
by special may, on the recommendations of the Council, by special order in each case, under
order circumstances of an exceptional nature to be stated in such order, exempt from payment of
tax any goods or services or both on which tax is leviable.
 Example:
1) The Central Government may exempt the tax payable under the UTGST Act by any
taxable person on sale of goods and / or services in respect of all Hotels located in
Chandigarh for a period of 3 months with effect from 01.08.2018 to 31.10.2018 in
view of the heavy floods in late July’17.
3 Explanation The Central Government may, if it considers necessary or expedient so to do for the purpose
to the of clarifying the scope or applicability of any notification issued under subsection (1) or order
notification issued under sub-section (2), insert an explanation in such notification or order, as the case
or order may be, by notification at any time WITHIN ONE YEAR of issue of the notification under sub-
section (1) or order under sub-section (2), and every such explanation shall have effect as if it
had always been the part of the first such notification or order, as the case may be.
105
4 Notification Any notification issued by the Central Government under sub-section (1) of section 11 or
/ Order order issued under sub-section (2) of the said section of the Central Goods and Services Tax
under CGST Act shall be deemed to be a notification or, as the case may be, an order issued under this
= Act.
Notification
/ Order
under
UTGST
Explanation Explanation.—For the purposes of this section, where an exemption in respect of any goods or
to the services or both from the whole or part of the tax leviable thereon has been granted
Section absolutely, the registered person supplying such goods or services or both shall not collect
the tax, in excess of the effective rate, on such supply of goods or services or both.
(VERY IMP)
106
CHAPTER-IV
PAYMENT OF TAX
SN Particulars
9 Payment of tax
10 Transfer of Input Tax Credit
9. Payment of tax:
9 Utilization The amount of input tax credit available in the electronic credit ledger of the registered person
of Credit – on account of,—
Sequence
(a) integrated tax shall first be utilised towards payment of integrated tax and the amount
remaining, if any, may be utilised towards the payment of central tax and State tax, or as the
case may be, Union territory tax, in that order;
(b) the Union territory tax shall first be utilised towards payment of Union territory tax and the
amount remaining, if any, may be utilised towards payment of integrated tax;
(c) the Union territory tax shall NOT be utilised towards payment of central tax.
10. Transfer of Input Tax Credit:
10 Transfer of On utilisation of input tax credit of Union territory tax for payment of tax dues under the
Input Tax Integrated Goods and Services Tax Act in accordance with the provisions of sub-section (5) of
Credit section 49 of the Central Goods and Services Tax Act, as reflected in the valid return furnished
under sub-section (1) of section 39 of the Central Goods and Services Tax Act, the amount
collected as Union territory tax shall stand reduced by an amount equal to such credit so utilised
and the Central Government shall transfer an amount equal to the amount so reduced from
the Union territory tax account to the integrated tax account in such manner and within such
time as may be prescribed.
107
CHAPTER-V
INSPECTION, SEARCH, SEIZURE AND ARREST
11. Officers required to assist proper officers:
1 Assisting  All officers of Police, Railways, Customs, and
UTGST
officers  those officers engaged in the collection of land revenue, including village officers, and
officers of central tax and
 officers of the State tax shall assist the proper officers in the implementation of this Act.
2 Notification The Government may, by notification, empower and require any other class of officers
 to assist the proper officers in the implementation of this Act when called upon to do so by
the Commissioner.
108
CHAPTER-VI
DEMANDS AND RECOVERY
SN Particulars
12 Tax wrongfully collected and paid to Central Government or Union Territory Government
13 Recovery of tax
12. Tax wrongfully collected and paid to Central Government or Union territory Government:
1 Interstate A registered person who has paid the central tax and the Union territory tax on a transaction
transaction considered by him to be an intra-State supply, but which is subsequently held to be an inter-
Initially State supply, shall be refunded the amount of taxes so paid in such manner and subject to such
considered conditions as may be prescribed.
as intra-
state [Under this Act, he is get the refund of the taxes paid (Also refer Sec 19 of the IGST Act, 2017)]
2 Interest A registered person who has paid integrated tax on a transaction considered by him to be an
not to be inter-State supply, but which is subsequently held to be an intra-State supply, shall not be
paid required to pay any interest on the amount of the central tax and the Union territory tax
payable.
[Under this Act, he is NOT required to pay the interest (Also refer Sec 19 of the IGST Act,
2017)]
13. Recovery of tax:
1 Methods in Where any amount of tax, interest or penalty is payable by a person to the Government under
which any of the provisions of this Act or the rules made thereunder and which remains unpaid, the
recovery proper officer of central tax, during the course of recovery of said tax arrears, may recover the
can be amount from the said person as if it were an arrear of central tax and credit the amount so
made… recovered to the account of the Government under the appropriate head of Union territory tax.
2 Recovered< Where the amount recovered under sub-section (1) is less than the amount due to the
Due—the Government under this Act and the Central Goods and Services Act, the amount to be credited
amount to to the account of the Government shall be in proportion to the amount due as Union territory
be credited tax and central tax.
in the
proportion
109
CHAPTER-VII
ADVANCE RULING
SN Particulars
14 Definitions
15 Constitution of Authority for Advance Ruling
16 Constitution of Appellate Authority for Advance Ruling
14. Definitions:
In this Chapter, unless the context otherwise requires,—
(a) Advance ‘‘Advance ruling’’ means a decision provided by the Authority or the Appellate Authority to
ruling an applicant on matters or on questions specified in
 sub-section (2) of section 97 or

 sub-section (1) of section 100 of the Central Goods and Services Tax Act,
in relation to the supply of goods or services or both being undertaken or proposed to be

undertaken by the applicant;
Notes:
 Sub-section (2) of section 97:
The question on which the advance ruling is sought under this Act, shall be in respect
of,––
(a) classification of any goods or services or both;
(b) applicability of a notification issued under the provisions of this Act;
(c) determination of time and value of supply of goodsor services or both;
(d) admissibility of input tax credit of tax paid or deemed to have been paid;
(e) determination of the liability to pay taxon any goods or services or both;
(f) whether applicant is required to be registered;
(g) whether any particular thing done by the applicant with respect to any goods or
services or both amounts to or results in a supply of goods or services or both, within
the meaning of that term.
 Sub-section (1) of section 100:

“The concerned officer, the jurisdictional officer or an applicant aggrieved by any
advance ruling pronounced under sub-section (4) of section 98, may appeal to the
Appellate Authority.”
(b) Appellate ‘‘Appellate Authority’’ means the Appellate Authority for Advance Ruling constituted under
Authority section 16.
110
(c) Applicant ‘‘Applicant’’ means any person registered or desirous of obtaining registration under this
Act;
(d) Application ‘‘Application’’ means an application made to the Authority under sub-section (1) of section
97 of the Central Goods and Services Tax Act;
Notes:
 Sub-section (1) of section 97
“An applicant desirous of obtaining an advance ruling under this Chapter may make
an application in such form and manner and accompanied by such fee as may be
prescribed, stating the question on which the advance ruling is sought.”
(e) Authority ‘‘Authority’’ means the Authority for Advance Ruling, constituted under section 15;
15. Constitution of Authority for Advance Ruling:
1 Example: The Central Government shall, by notification, constitute an Authority to be known as the
Chandigarh name of the Union territory, Authority for Advance Ruling:
AAR
Chandigarh PROVIDED that the Central Government may, on the recommendations of the Council, notify
AAR for the any Authority located in any State or any other Union territory to act as the Authority for
PUNJAB as the purposes of this Act.
well
2 1 member = The Authority shall consist of—

Central Tax (i) one member from amongst the officers of central tax; and
1 member = (ii) one member from amongst the officers of Union territory tax, to be appointed by the
UTT Central Government.
3 Qualificatio The qualifications, the method of appointment of the members and the terms and conditions
ns & other of their service shall be such as may be prescribed.
T&C
16. Constitution of Appellate Authority for Advance Ruling:
1 Example: The Central Government shall, by notification, constitute an Appellate Authority to be known
Chandigarh as the name of the Union territory, Appellate Authority for Advance Ruling:
AAAR
Chandigarh PROVIDED that the Central Government may, on the recommendations of the Council, notify
AAAR for any Appellate Authority located in any State or any other Union territory to act as the
the PUNJAB Authority for the purposes of this Act.
as well
2 Chief The Appellate Authority shall consist of—

Comm. = CT (i) the Chief Commissioner of central tax as designated by the Board; and
Comm. = (ii) the Commissioner of Union territory tax having jurisdiction over the applicant.
UTT
111
CHAPTER-IX
MISCELLANEOUS
SN Particulars
21 Application of provisions of Central Goods and Services Tax Act
23 General power to make regulations
24 Laying of rules, regulations and notifications
25 Power to issue instructions or directions
26 Removal of difficulties
21. Application of provisions of Central Goods and Services Tax Act:
1 Application Subject to the provisions of this Act and the rules made thereunder, the provisions of the
of certain Central Goods and Services Tax Act, relating to,—
provisions (i)scope of supply;
of the
UTGST Act, (ii)composition levy;
2016
(iii)composite supply and mixed supply;
(iv)time and value of supply;
(v)input tax credit;
(vi)registration;
(vii)tax invoice, credit and debit notes;
(viii)accounts and records;
(ix)returns;
(x)payment of tax;
(xi)tax deduction at source;
(xii)collection of tax at source;
(xiii)assessment;
(xiv)refunds;
(xv)audit;
(xvi)inspection, search, seizure and arrest;
(xvii)demands and recovery;
(xviii)liability to pay in certain cases;
(xix)advance ruling;
112
(xx) appeals and revision;
(xxi)presumption as to documents;
(xxii)offences and penalties;
(xxiii)job work;
(xxiv) electronic commerce;
(xxv) settlement of funds;
(xxvi) transitional provisions; and
(xxvii) miscellaneous provisions including the provisions relating to the imposition of

interest and penalty,
shall, mutatis mutandis, apply,—
(a) so far as may be, in relation to Union territory tax as they apply in relation to central tax
as if they were enacted under this Act;
(b) subject to the following modifications and alterations which the Central Government
consider necessary1 and desirable to adapt those provisions to the circumstances,
namely:—
(i) references to ‘‘this Act’’ shall be deemed to be references to ‘‘the Union

Territory Goods and Services Tax Act, 2017’’;
(ii) references to ‘‘Commissioner’’ shall be deemed to be references to

‘‘Commissioner’’ of Union territory tax as defined in clause (2) of section 2 of this
Act;
(iii) references to ‘‘officers of central tax’’ shall be deemed to be references to

‘‘officers of Union territory tax’’;
(iv) references to ‘‘central tax’’ shall be deemed to be references1 to ‘‘Union
territory tax’’ and vice versa;
(v) references to ‘‘Commissioner of State tax or Commissioner of Union territory

tax’’ shall be deemed to be references to ‘‘Commissioner of central tax’’;
(vi) references to ‘‘State Goods and Services tax Act or Union Territory Goods and
Services Tax Act’’ shall be deemed to be references to ‘‘Central Goods and Services
Tax Act’’;
(vii)references to ‘‘State tax or Union territory tax’’ shall be deemed to be

references to ‘‘central tax’’.
113
1 CG to make rules to The Central Government may, on the recommendations of the Council, by
carry purpose of the notification, make rules for carrying out the provisions of this Act.
Act
2 Specific powers - Without prejudice to the generality of the provisions of sub-section (1), the Central
Rules may be Government may make rules for all or any of the matters which by this Act are
regarding: required to be, or may be, prescribed or in respect of which provisions are to be or
may be made by rules.
3 Rules may be The power to make rules conferred by this section shall include the power to give
brought into force by retrospective effect to the rules or any of them from a date not earlier than the date
retrospective on which the provisions of this Act come into force.
amendments
4 General penalty for Any rules made under sub-section (1) may provide that a contravention thereof shall
breach of any rule- be liable to a penalty not exceeding ten thousand rupees.
upto Rs.10,000 if no
specific penalty is
prescribed
23. General power to make regulations:
23 CG to make The Board may, by notification, make regulations consistent with this Act and the rules
regulations made thereunder to carry out the purposes of this Act.
to carry
purpose of
the Act
24. Laying of rules, regulations and notifications:
24 Rules and  Every rule made by the Central Government, every regulation made by the Board and
notifications every notification issued by the Central Government under this Act, shall be laid, as soon
shall be laid as may be, after it is made or issued, before each House of Parliament,
before
Parliament/  while it is in session, for a total period of thirty days which may be comprised in one
State session or in two or more successive sessions, and
Legislature
 if, before the expiry of the session immediately following the session or the successive
sessions aforesaid,
 both Houses agree in making any modification in the rule or regulation or in the
notification, as the case may be, or both Houses agree that the rule or regulation or the
notification should not be made,
the rule or regulation or notification, as the case may be, shall thereafter have effect
only in such modified form or be of no effect, as the case may be;
 so, however, that any such modification or annulment shall be without prejudice to the
validity of anything previously done under that rule or regulation or notification, as the
case may be.
114
25. Power to issue instructions or directions:
25 Power to The Commissioner may, if he considers it necessary or expedient so to do for the purpose of
issue uniformity in the implementation of this Act, issue such orders, instructions or directions to
instructions the Union territory tax officers as he may deem fit, and thereupon all such officers and all
or directions: other persons employed in the implementation of this Act shall observe and follow such
orders, instructions or directions.
1 Removing If any difficulty arises in giving effect to any provision of this Act, the Central Government
difficulty in may, on the recommendations of the Council, by a general or a special order published in
the Act the Official Gazette, make such provisions not inconsistent with the provisions of this Act or
the rules or regulations made thereunder, as may be necessary or expedient for the
Order to be purpose of removing the said difficulty:
made within
the expiry of PROVIDED that no such order shall be made after the expiry of a period of three years
three years from the date of commencement of this Act.
2 Shall be laid Every order made under this section shall be laid, as soon as may be, after it is made,
before before each House of Parliament.
Parliament/
State
Legislature
115
116
THE GOODS AND SERVICES TAX

(COMPENSATION TO STATES) Act, 2017
 Background:
SN Description
1 The GST Council in its 10th meeting held on 18th February, 2017 approved the “GST compensation to states”
bill that provides for the compensation of loss arising out of introduction of Goods and Service Tax in India. An
Act to provide for compensation to the States for the loss of revenue arising on account of implementation of
the goods and services tax for the period of five years in pursuance of the provisions of the Constitution (One
Hundred and First Amendment) Act, 2016.
2 The Union Government presents the Goods and Service Tax (Compensation to States) Bill, 2017 in Lok sabha
on 27th March, 2017 and the same has been passed by Lok sabha on 29th March, 2017. The Rajya sabha
passed the bill on 6th April, 2017 and was assented by the President on 12th April, 2017.
3 This Act may be called the Goods and Services Tax (Compensation to States) Act, 2017 “the Act”. It extends to
the whole of India and shall come into force on such date as the Central Government may, by notification in
the Official Gazette, appoint.
 Salient Features of Compensation Act:
1 The The Compensation Act provides for the manner of ascertaining the amount of compensation
Coverage payable to States during the transition period of five years by the Centre on account of revenue
loss attributable to levy of goods and services tax. It would interalia involve the followings:
 Ascertaining the base year

 Identifying the revenue of base year
 Projected revenue
 Computation of compensation
 Release of compensation
The compensation shall be met out from compensation cess for which the provisions in relation
to collection, payment return, refund etc. have been provided for in the Compensation Act.
2 Objectives The Act provides for the following:

of the Act
i) It provides for the compensation of loss to the states arising out of introduction of Goods and
Service Tax in India.
ii) The financial year 2015-16 shall be taken as base year for the purpose of calculating
compensation amount payable to the States.
iii) The revenue to be compensated consists of revenues from all the taxes that are levied by the
States which are now to be subsumed under goods and services tax, as audited by the
comptroller and auditor general of India.
iv) The projected growth rate of revenue during transition period shall be 14%.
v) The compensation shall be released bi-monthly on provisional basis and final adjustment shall
be made after getting audited accounts of the year from the C&AG.
117
vi) In case of eleven special category states referred to in article 279A of the Constitution, the
revenue forgone on account of exemption of taxes granted any states shall be counted towards
the definition of Revenue for the base year 2015- 16 for calculating compensation.
vii) The revenues of the states that were not credited to the consolidated funds of states
government but were directly collected by “municipality” would also be included in the
definition of revenue if these were subsumed in the goods and services tax.
viii) To generate revenue to compensate states for five year for loss suffered by the states on
account of implementation of goods and service tax, by levy a cess on such goods as
recommended by the GST Council over and above the GST rate on that item.
ix) The proceeds of the cess shall be credited to the fund called Goods and Service Tax
compensation fund and all the compensation payable to the states as GST compensation shall be
paid from the above mentioned fund.
The balance if any left out in the GST compensation fund after five year shall be EQUALLY
shared between the Centre and the States.
x) The person availing composition scheme shall NOT levy composition cess on the supplies made
by him.
xi) The input tax credit on account of Compensation Cess will only be UTILIZED against output tax
liability for compensation cess only.
SN Particulars
2 Definitions
3 Projected growth rate
4 Base year
5 Base year revenue
6 Projected revenue for any year
7 Calculation and release of compensation
8 Levy and Collection of Cess
9 Returns, payments and refunds
10 Crediting proceeds of cess to Fund
11 Other provisions relating to cess
13 Laying of rules before Parliament
14 Power to remove difficulties
1 The Act This Act may be called the Goods and Services Tax (Compensation to States) Act, 2017.
2 Applicability It extends to the whole of India.
3 Come into It shall come into force on such date as the Central Government may, by notification in the
force by Official Gazette, appoint.
notification
118
2. Definitions:
1 In this Act, unless the context otherwise requires,—
(a) Central tax “Central tax” means the central goods and services tax levied and collected under the Central
Goods and Services Tax Act;
(b) CGST Act “Central Goods and Services Tax Act” means the Central Goods and Services Tax Act, 2017;
(c) Cess “Cess” means the goods and services tax compensation cess levied under section 8;
(d) Compensat “Compensation” means an amount, in the form of goods and services tax compensation, as
ion determined under section 7;
(e) Council “Council” means the Goods and Services Tax Council constituted under the provisions of article
279A of the Constitution;
(f) Fund “Fund” means the Goods and Services Tax Compensation Fund referred to in section 10;
(g) Input tax “Input tax” in relation to a taxable person, means,––
 cess charged on any supply of goods or services or both made to him;
 cess charged on import of goods and includes the cess payable on reverse charge
basis;
(h) IGST Act “Integrated Goods and Services Tax Act” means the Integrated Goods and Services Tax Act,
2017;
(i) Integrated “Integrated tax” means the integrated goods and services tax levied and collected under the
tax Integrated Goods and Services Tax Act;
(j) Prescribed “Prescribed” means prescribed by rules made, on the recommendations of the Council, under
this Act;
(k) Projected “Projected growth rate” means the rate of growth projected for the transition period as per
growth section 3;
rate
(l) Schedule “Schedule” means the Schedule appended to this Act;
(m) State “State” means,––
(i) for the purposes of sections 3, 4, 5, 6 and 7 the States as defined under the Central
Goods and Services Tax Act; and
[means States includes Delhi and Puduchery]
(ii) for the purposes of sections 8, 9, 10, 11, 12, 13 and 14 the States as defined under
the Central Goods and Services Tax Act and the Union territories as defined under the
Union Territories Goods and Services Tax Act;
[means States includes Delhi and Puduchery and rest of the 5 UTs are guided by
Union Territories GST Act]
(n) State tax “State tax” means the State goods and services tax levied and collected under the respective
State Goods and Services Tax Act;
119
120
(o) SGST Act “State Goods and Services Tax Act” means the law to be made by the State Legislature for levy
and collection of tax by the concerned State on supply of goods or services or both;
(p) Taxable “Taxable supply’’ means a supply of goods or services or both which is chargeable to the CESS
supply under this Act;
(q) Transition “Transition date” shall mean, in respect of any State, the date on which the State Goods and
date Services Tax Act of the concerned State comes into force;
(r) Transition “Transition period” means a period of five years from the transition date; and
period
(s) UTGST Act “Union Territories Goods and Services Tax Act” means the Union Territories Goods and
Services Tax Act, 2017.
2 Refer CGST The words and expressions used and not defined in this Act but defined in the Central Goods
Act for and Services Tax Act and the Integrated Goods and Services Tax Act shall have the meanings
Intra-state respectively assigned to them in those Acts.
trade
3. Projected growth rate:
3 Projected The projected nominal growth rate of revenue subsumed for a State during the transition
Growth rate period shall be fourteen per cent per annum.
4. Base year:
4 Base Year= For the purpose of calculating the compensation amount payable in any financial year during
2015-16 the transition period, the financial year ending 31st March, 2016, shall be taken as the base
year.
5. Base year revenue:
1 Calculation Subject to the provision of sub-sections (2), (3), (4), (5) and (6), the base year revenue for a
of Base Year State shall be
Revenue:
 the sum of the revenue collected by the State and the local bodies during the base
year,
The
inclusion  on account of the taxes levied by the respective State or Union
part [Eg: Central sales tax levied under the Central Sales Tax Act, 1956 (+) Duties of Excise
on medicinal and toilet preparations levied by the Union but collected and retained by
the concerned SG ] and
 net of refunds, with respect to the following taxes, imposed by the respective State or
Union, which are subsumed into goods and services tax, namely:–
121
(a) the
 value added tax, sales tax,
 purchase tax,
 tax collected on works contract, or
 any other tax
levied by the concerned State under the erstwhile entry 54 of List-II (State List) of the
Seventh Schedule to the Constitution;
OLD Entry 54 Taxes on the sale or purchase of goods other than newspapers, subject
to the provisions of entry 92A of List I.)
[Inter-state sale or purchase has been dealt in Entry 92A of List I i.e.
Union List]
NEW Entry 54 Taxes on the sale of petroleum crude, high speed diesel, motor spirit
(commonly known as petrol), natural gas, aviation turbine fuel and
alcoholic liquor for human consumption, but not including sale in the
course of inter-State trade or commerce or sale in the course of
international trade or commerce of such goods."
[Inter-state sale or purchase has been dealt in Entry 92A of List I i.e.
Union List]
COMMENT That means VAT, inter-alia, subsumed except VAT on Petrol, natural gas,
aviation turbine fuel and alcoholic liquor for human consumption as they
have not been brought under GST at present
(b) the Central sales tax levied under the Central Sales Tax Act, 1956;
(c) the
 entry tax,
 octroi,
 local body tax or
 any other tax
levied by the concerned State under the erstwhile entry 52 of List-II (State List) of the
Seventh Schedule to the Constitution;
OLD Entry 52 Taxes on the entry of goods into a local area for consumption, use or sale
therein.
NEW Entry 52 Omitted
COMMENT This means Entry Taxes, Octroi are subsumed are subsumed in GST
(d) the
 taxes on luxuries, including taxes on entertainments, amusements, betting and
gambling or
 any other tax levied by the concerned State under the erstwhile entry 62 of List-II
(State List) of the Seventh Schedule to the Constitution;
OLD Entry 62 Taxes on luxuries, including taxes on entertainments, amusements,

betting and gambling.
NEW Entry 62 Taxes on entertainments and amusements to the extent levied and
collected by a Panchayat or a Municipality or a Regional Council or a
District Council.
122
COMMENT This means Luxury tax, Betting & Gambling tax subsumed.
Entertainment tax & Amusement tax levied by State are subsumed but
Entertainment Tax & Amusement tax levied by local bodies are not
subsumed.
(e) the
 taxes on advertisement or
 any other tax levied by the concerned State under the erstwhile entry 55 of List-II
(State List) of the Seventh Schedule to the Constitution;
OLD Entry 55 Taxes on advertisements other than advertisements published in the

newspapers.
NEW Entry 55 Omitted
COMMENT This means Taxes on advertisement subsumed in GST
(f) the duties of excise on medicinal and toilet preparations levied by the Union but collected
and retained by the concerned State Government under the erstwhile article 268 of the
Constitution;
(g) any cess or surcharge or fee leviable under entry 66 read with entries 52, 54, 55 and 62 of
List-II of the Seventh Schedule to the Constitution by the State Government under any Act
notified under sub-section (4), prior to the commencement of the provisions of the
Constitution (One Hundred and First Amendment) Act, 2016:
Provided that the revenue collected during the base year in a State, net of refunds, under the
following taxes shall not be included in the calculation of the base year revenue for that State,
The namely:—
mentioned
taxes will be (a) any taxes levied under any Act enacted under the erstwhile entry 54 of List-II
excluded (State List) of the Seventh Schedule to the Constitution, prior to the coming into force
from Base of the provisions of the Constitution (One Hundred and First Amendment) Act, 2016,
Year on the sale or purchase of petroleum crude, high speed diesel, motor spirit (commonly
revenue as known as petrol), natural gas, aviation turbine fuel and alcoholic liquor for human
there will consumption;
NOT be any
loss of Comment As petroleum crude, high speed diesel, motor spirit (commonly
revenue to known as petrol), natural gas, aviation turbine fuel and alcoholic
states on liquor for human consumption are NOT yet subsumed under GST
the account therefore,
of
mentioned  VAT (levied on intra-state sale of goods) will continue to be
transactions levied on the sale of petroleum crude, high speed diesel,
as the motor spirit (commonly known as petrol), natural gas, aviation
earlier taxes turbine fuel and alcoholic liquor for human consumption
will
continue to
be levied on
Petrol and (b) tax levied under the Central Sales Tax Act, 1956, on the sale or purchase of
Alcoholic petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural
liquor for gas, aviation turbine fuel and alcoholic liquor for human consumption;
HC and
States will
continue to
generate
123
their Comment As petroleum crude, high speed diesel, motor spirit (commonly
revenue known as petrol), natural gas, aviation turbine fuel and alcoholic
liquor for human consumption are NOT yet subsumed under GST
therefore,
 CST (levied on inter-state sale of goods) will continue to be

levied on the sale of petroleum crude, high speed diesel,
motor spirit (commonly known as petrol), natural gas, aviation
turbine fuel and alcoholic liquor for human consumption
(c) any cess imposed by the State Government on the sale or purchase of petroleum
crude, high speed diesel, motor spirit (commonly known as petrol), natural gas,
aviation turbine fuel and alcoholic liquor for human consumption; and
(d) the entertainment tax levied by the State but collected by local bodies, under any
Act enacted under the erstwhile entry 62 of List-II (State List) of the Seventh Schedule
to the Constitution, prior to coming into force of the provisions of the Constitution
(One Hundred and First Amendment) Act, 2016.
2 Inclusion: In respect of the State of Jammu and Kashmir, the base year revenue shall include the amount
Service tax of tax collected on sale of services by the said State Government during the base year.
in the J&K
 Understanding:
Chapter V of Finance Act, 1994 has no reach to Jammu & Kashmir that why the Jammu &
Kashmir has its own levy of Service tax law.
Since this is being subsumed so this will be added to the base year revenue as it is a state
levy.
3 11 states In respect of the States mentioned in sub-clause (g) of clause (4) of article 279A of the
includes 7 Constitution, the amount of revenue foregone on account of exemptions or remission given by
sister states the said State Governments to promote industrial investment in the State, with respect to such
+Sikkim + specific taxes referred to in sub-section (1), shall be included in the total base year revenue of
UK+HP+J&K the State, subject to such conditions as may be prescribed.
4 Acts The Acts of the Central Government and State Governments under which the specific taxes are
subsuming being subsumed into the goods and services tax shall be such as may be notified.
taxes shall
be as
notified
5 Basis- The base year revenue shall be calculated as per sub-sections (1), (2), (3) and (4) on the basis of
Revenue the figures of revenue collected and net of refunds given in that year, as audited by the
net of Comptroller and Auditor-General of India.
refunds
Audited by
CAG
6 Not In respect of any State, if any part of revenues mentioned in sub-sections (1), (2), (3) and (4) are
credited, not credited in the Consolidated Fund of the respective State, the same shall be included in
even then it the total base year revenue of the State, subject to such conditions as may be prescribed.
shall be
included
124
6. Projected revenue for any year:
6 Projected The projected revenue for any year in a State shall be calculated by applying the projected
revenue for growth rate over the base year revenue of that State.
the year
Illustration— If the base year revenue for 2015-16 for a concerned State, calculated as per
section 5 is one hundred rupees, then the projected revenue for financial year 2018-19 shall be
as follows—
Projected Revenue for 2018-19-100 (1+14/100)^3
For all years:
Projected Revenue 100 (1+0.14)=114 100(1.14)=114

for 2016 – 17
Projected Revenue 114 (1+0.14)=129.96 100(1.14)^2=129.96
for 2017 – 18
Projected Revenue 129.96 (1+0.14)=148.154 100(1.14)^3=148.154
for 2018 – 19
for 2019 – 20
for 2020 – 21
for 2021 – 22
7. Calculation and release of compensation:
1 Compensation The compensation under this Act shall be payable to any State during the transition period [5
is payable for years].
5 years
2 Provisionally The compensation payable to a State shall be provisionally calculated and released at the
released 2 end of every two months period, and shall be finally calculated for every financial year after
monthly the receipt of final revenue figures, as audited by the Comptroller and Auditor General of
India:
Finalised at
year end as
per CAG
report
Excess PROVIDED that in case any excess amount has been released as compensation to a State in
released shall any financial year during the transition period, as per the audited figures of revenue
be adjusted in collected, the excess amount so released shall be adjusted against the compensation amount
future payable to such State in the subsequent financial year.
3 a) The total compensation payable for any financial year during the transition period to any
Computation State shall be calculated in the following manner, namely:––
of
Compensation (a) the projected revenue for any financial year during the transition period, which could
for the have accrued to a State in the absence of the goods and services tax, shall be calculated as
FINANCIAL per section 6;
YEAR
125
(b) & (c) (b) the actual revenue collected by a State in any financial year during the transition period
>> Revenue shall be—
(Sec 6) – SGST
earned – IGST (i) the actual revenue from State tax collected by the State, net of refunds given by
(apportioned) the said State under Chapters XI and XX of the State Goods and Services Tax Act;
= GST
Compensation (ii) the integrated goods and services tax apportioned to that State; and
payable
(iii) any collection of taxes on account of the taxes levied by the respective State
under the Acts specified in sub-section (4) of section 5, net of refunds of such taxes,
as certified by the Comptroller and Auditor-General of India;
(c) the total compensation payable in any financial year shall be the difference between the
projected revenue for any financial year and the actual revenue collected by a State referred
to in clause (b).
4 Computation The loss of revenue at the end of every two months period in any year for a State during the
of transition period shall be calculated, at the end of the said period, in the following manner,
Compensation namely:––
for the
QUARTER (a) the projected revenue that could have been earned by the State in absence of the goods
and services tax till the end of the relevant two months period of the respective financial
rd
(a) If that is 3 year shall be calculated on a pro-rata basis as a percentage of the total projected revenue
quarter : for any financial year during the transition period, calculated in accordance with section 6.
th
3/4 of the
projected Illustration—If the projected revenue for any year calculated in accordance with section 6 is
revenue for one hundred fifty rupees, for calculating the projected revenue that could be earned till the
the FY end of the period of ten months for the purpose of this sub-section shall be
150x(5/6)=Rs.125.);
(b) & (c) (b) the actual revenue collected by a State till the end of relevant two months period in any
>> Prop financial year during the transition period shall be-
Revenue (Sec
6) – SGST (i) the actual revenue from State tax collected by the State, net of refunds given by
earned – IGST the State under Chapters XI and XX of the State Goods and Services Tax Act;
(apportioned)
– Amount (ii) the integrated goods and services tax apportioned to that State, as certified by
already paid= the Principal Chief Controller of Accounts of the Central Board of Excise and
GST Customs; and
Compensation
payable (iii) any collection of taxes levied by the said State, under the Acts specified in
subsection (4) of section 5, net of refund of such taxes;
(c) the provisional compensation payable to any State at the end of the relevant two month
period in any financial year shall be the difference between the projected revenue till the
end of the relevant period in accordance with clause (a) and the actual revenue collected by a
State in the said period as referred to in clause (b), reduced by the provisional compensation
paid to a State till the end of the previous two months period in the said financial year
during the transition period.
5 At the year In case of any difference between the final compensation amount payable to a State
end – calculated in accordance with the provisions of sub-section (3) upon receipt of the audited
as a result if revenue figures from the Comptroller and Auditor-General of India, and the total provisional
excess compensation amount released to a State in the said financial year in accordance with the
released provisions of sub-section (4), the same shall be adjusted against release of compensation to
the State in the subsequent financial year.
126
6 PY- Excess  Where no compensation is due to be released in any financial year, and in case any
distributed excess amount has been released to a State in the previous year,
CY- No
compensation  this amount shall be refunded by the State to the Central Government and such amount
payable shall be credited to the Fund in such manner as may be prescribed.
[The SG to refund to CG]
8. Levy and Collection of Cess:
1 Levy & There shall be levied a cess on such intra-State supplies of goods or services or both, as
Collection provided for in section 9 of the Central Goods and Services Tax Act, and such inter-State
supplies of goods or services or both as provided for in section 5 of the Integrated Goods
and Services Tax Act, and collected in such manner as may be prescribed, on the
recommendations of the Council, for the purposes of providing compensation to the States
for loss of revenue arising on account of implementation of the goods and services tax with
effect from the date from which the provisions of the Central Goods and Services Tax Act is
brought into force, for a period of five years or for such period as may be prescribed on the
Proviso: recommendations of the Council:
No cess on the
supplies made PROVIDED that no such cess shall be leviable on supplies made by a taxable person who has
by the taxable decided to opt for composition levy under section 10 of the Central Goods and Services Tax
person opting Act.
composition
scheme (Very Imp)
2 Cess is The cess shall be levied on such supplies of goods and services as are specified in column (2)
charged at the of the Schedule, on the basis of value, quantity or on such basis at such rate not exceeding
prescribed the rate set forth in the corresponding entry in column (4) of the Schedule, as the Central
rate Government may, on the recommendations of the Council, by notification in the Official
Gazette, specify:
On VALUE as PROVIDED that where the cess is chargeable on any supply of goods or services or both with
per Sec 15 reference to their value, for each such supply the value shall be determined under section 15
of the Central Goods and Services Tax Act for all intra-State and inter-State supplies of goods
or services or both*:
In case of PROVIDED further that the cess on goods imported into India shall be levied and collected in
Import of accordance with the provisions of section 3 of the Customs Tariff Act, 1975, at the point
GOODS – Cess when duties of customs are levied on the said goods under section 12 of the Customs Act,
is charged on 1962, on a value determined under the Customs Tariff Act, 1975*.
the value as
per CTA, 1975
127
9. Returns, payments and refunds:
1 Every RTP Every taxable person, making a taxable supply of goods or services or both, shall—
shall furnish (a) pay the amount of cess as payable under this Act in such manner;
returns & shall
pay the dues (b) furnish such returns in such forms, along with the returns to be filed under the Central
& apply for Goods and Services Tax Act; and
refunds of
CESS paid (c) apply for refunds of such cess paid in such form, as may be prescribed.
2 Provisions & For all purposes of furnishing of returns and claiming refunds, except for the form to be filed,
rules of CGST the provisions of the Central Goods and Services Tax Act and the rules made thereunder,
Act shall shall, as far as may be, apply in relation to the levy and collection of the cess leviable under
apply irt levy section 8 on all taxable supplies of goods or services or both, as they apply in relation to the
& collection of levy and collection of central tax on such supplies under the said Act or the rules made
Cess thereunder.
10. Crediting proceeds of cess to Fund:
1 Cess collected The proceeds of the cess leviable under section 8 and such other amounts as may be
to be credited recommended by the Council, shall be credited to a non-lapsable Fund known as the Goods
to GST and Services Tax Compensation Fund, which shall form part of the public account of India and
Compensation shall be utilised for purposes specified in the said section.
Fund
2 Compensation All amounts payable to the States under section 7 shall be paid out of the Fund.
to be paid
from GST CF
3 Balance left in Fifty percent.of the amount remaining unutilized in the Fund at the end of the transition
the fund after period shall be transferred to the Consolidated Fund of India as the share of Centre, and the
the end of balance fifty per cent. shall be distributed amongst the States in the ratio of their total
transition revenues from the State tax or THE UNION TERRITORY GOODS and SERVICES TAX, as the
period of 5 case may be, in the last year of the transition period.
years??
In the ratio of their total revenues
from the State tax or the Union
territory tax in the last year of the
100 transition period.
50 50
CG SG & UT
4 Audit by CAG  The accounts relating to Fund shall be audited by the Comptroller and Auditor General
& expense of India or any person appointed by him at such intervals as may be specified by him and
shall be
bourne by the  any expenditure in connection with such audit shall be payable by the Central
CG Government to the Comptroller and Auditor-General of India.
128
5 The Accounts The accounts of the Fund, as certified by the Comptroller and Auditor-General of India or any
& Audit other person appointed by him in this behalf together with the audit report thereon shall be
Report shall laid before each House of Parliament.
be laid before
LS & RS
11. Other provisions relating to cess:
1 Provisions & The provisions of the Central Goods and Services Tax Act, and the rules made thereunder,
rules of CGST including those relating to assessment, input tax credit, non-levy, short-levy, interest, appeals,
Act shall apply offences and penalties, shall, as far as may be, mutatis mutandis, apply, in relation to the levy
irt levy & and collection of the cess leviable under section 8 on the intra-State supply of goods and
collection of services, as they apply in relation to the levy and collection of central tax on such intra-State
Cess supplies under the said Act or the rules made thereunder.
(Intra-state
transactions)
2 Provisions of The provisions of the Integrated Goods and Services Tax Act, and the rules made thereunder,
IGST Act shall including those relating to assessment, input tax credit, non-levy, short-levy, interest, appeals,
apply irt levy offences and penalties, shall, mutatis mutandis, apply in relation to the levy and collection of
& collection of the cess leviable under section 8 on the inter State supply of goods and services, as they
Cess apply in relation to the levy and collection of integrated tax on such inter State supplies under
(Inter-state the said Act or the rules made thereunder:
transactions)
OTL(Cess) XX PROVIDED that the input tax credit in respect of cess on supply of goods and services
ITC (Cess)(XX) leviable under section 8, shall be utilised only towards payment of said cess on supply of
Net Cess XX goods and services leviable under the said section.
[VERY IMP]
1 Make rules to The Central Government shall, on the recommendations of the Council, by notification in the
carry out the Official Gazette, make rules for carrying out the provisions of this Act.
provisions of
the Act
2 Matters for In particular, and without prejudice to the generality of the foregoing power, such rules may
which the provide for all or any of the following matters, namely:—
rules can be
made (a) the conditions which were included in the total base year revenue of the States, referred
to in sub-clause (g) of clause (4) of article 279A of the Constitution, under sub-section (3) of
section 5;
(b) the conditions subject to which any part of revenues not credited in the Consolidated
Fund of the respective State shall be included in the total base year revenue of the State,
under sub-section (6) of section 5;
(c) the manner of refund of compensation by the States to the Central Government under
sub-section (6) of section 7;
129
(d) the manner of levy and collection of cess and the period of its imposition under
subsection (1) of section 8;
(e) the manner and forms for payment of cess, furnishing of returns and refund of cess under
sub-section (1) of section 9; and
(f) any other matter which is to be, or may be, prescribed, or in respect of which provision is
to be made, by rules.
13. Laying of rules:
13 Rules shall be  Every rule made under this Act by the Central Government
laid before
Parliament  shall be laid, as soon as may be after it is made, before each House of Parliament,
 while it is in session, for a total period of thirty days which may be comprised in one
session or in two or more successive sessions, and
 if, before the expiry of the session immediately following the session or successive
sessions aforesaid, both Houses agree in making any modification in the rule or both
Houses agree that the rule should not be made,
 the rule shall thereafter have effect only in such modified form or be of no effect, as
the case may be; so, however, that any such modification or annulment shall be
without prejudice to the validity of anything previously done under that rule.
1 If difficulty If any difficulty arises in giving effect to the provisions of this Act, the Central Government
arises- do may, on the recommendations of the Council, by order published in the Official Gazette, make
anything to such provisions, not inconsistent with the provisions of this Act, as appear to it to be
remove necessary or expedient for removing the difficulty:
difficulty
Order to be PROVIDED that no order shall be made under this section after the expiry of three years from
made within the commencement of this Act.
the expiry of 3
years
2 Shall be laid Every order made under this section shall, as soon as may be after it is made, be laid before
before each House of Parliament.
Parliament [LS
+ RS]
130
131
 Concept of Place of Business :

ABC Ltd
Delhi [REG -1] Uttar Pradesh

(Manufacture of RG) [REG -2]
Lucknow, Kanpur,
(Trading of Laptops) (Manufacturing of
Plastic toys)
Mr.X, Job-worker
132
Chapter XXIA
JOB WORKER
19. Taking input tax credit in respect of inputs and capital goods sent for job work:
1 Sending to a The principal shall, subject to such conditions and restrictions as may be prescribed, be allowed
J/w input tax credit on inputs sent to a job-worker for job-work.
2 Inputs sent Notwithstanding anything contained in clause (b) of sub-section (2) of section 16, the principal
DIRECTLY to shall be entitled to take credit of input tax on inputs even if the inputs are directly sent to a job
J/W- ITC worker for job-work without being first brought to his place of business.
allowed
3 If not Where the inputs sent for job work are not received back by the principal after completion of job-
received work or otherwise or are not supplied from the place of business of the job worker in accordance
back or with clause (a) or clause (b) of sub-section (1) of section 143 within one year of being sent out,
supplied
within 1 year  it shall be deemed that such inputs had been supplied by the principal to the job-worker on
deemed to the day when the said inputs were sent out:
be supplied
to J/W Provided that where the inputs are sent directly to a job worker, the period of one year shall be
(V.IMP) counted from the date of receipt of inputs by the job worker.
4 Principal The principal shall, subject to such conditions and restrictions as may be prescribed, be allowed
eligible for input tax credit on capital goods sent to a job worker for job work.
ITC on CG
sent to J/w
5 CG sent Notwithstanding anything contained in clause (b) of sub-section (2) of section 16, the principal
DIRECTLY to shall be entitled to take credit of input tax on capital goods even if the capital goods are directly
a J/w – ITC sent to a job worker for job-work without being first brought to his place of business.
allowed
6 If not Where the capital goods sent for job work are not received back by the principal within a period of
received three years of being sent out, it shall be deemed that such capital goods had been supplied by the
back or principal to the job worker on the day when the said capital goods were sent out:
supplied
within 3 yrs PROVIDED that where the capital goods are sent directly to a job worker, the period of three years
deemed to shall be counted from the date of receipt of capital goods by the job worker.
be supplied
to J/W
(V.IMP)
7 Sub section Nothing contained in sub-section (3) or sub-section (6) shall apply to moulds and dies, jigs and
(3) & (6) fixtures, or tools sent out to a job worker for job work.
shall not
apply to Explanation – For the purpose of this section, “principal” means the person referred to in section
moulds and 143.
dies, etc.
133
 Concept of Place of Business (CONTD):

ABC Ltd
Delhi [REG -1] Uttar Pradesh

(Manufacture of RG)
Lucknow [REG -2] Kanpur [REG -3]

(Trading of Laptops) (Manufacturing of
Plastic toys)
Mr.X, Job-worker
134
143. Job work procedure:
1 Sending A registered person (hereafter in this section referred to as the “principal”) may under
goods to Job intimation [intimation to the Jurisdictional Officer under the cover of a Delivery Challan] and
worker subject to such conditions as may be prescribed, send any inputs or capital goods, without
without payment of tax, to a job worker for job-work and from there subsequently send to another job
payment of worker and likewise, and shall,––
taxes
(a) bring back inputs, after completion of job work or otherwise, or capital goods, other than
moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of
their being sent out, to ANY of his place of business [located in the same state], without
payment of tax;
(b) supply such inputs, after completion of job work or otherwise, or capital goods, other than
moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of
their being sent out from the place of business of a job worker on payment of tax within India,
or with or without payment of tax for export, as the case may be:
PROVIDED that the principal shall not supply the goods from the place of business of a job
worker in accordance with the provisions of this clause unless the said principal declares the
place of business of the job-worker as his ADDITIONAL PLACE OF BUSINESS* [if located in the
same state] except in a case—
(i) where the job worker is registered under section 25; or
(ii) where the principal is engaged in the supply of such goods as may be notified by the
Commissioner.
2 Who is The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the
responsible? principal.
The
PRINCIPAL  Understanding:
Principal is responsible for payment of taxes even if the supply is made from the Job worker
premises.
3 If not Where the inputs sent for job work are not received back by the principal after completion of
received back job work or otherwise in accordance with the provisions of clause (a) of sub-section (1) or are
or supplied not supplied from the place of business of the job worker in accordance with the provisions of
therefrom clause (b) of sub-section (1) within a period of one year of their being sent out,
within 1 year-
Deemed that  it shall be deemed that such inputs had been supplied by the principal to the job-worker on
inputs were the day when the said inputs were sent out.
supplied
4 If not Where the capital goods, other than moulds and dies, jigs and fixtures, or tools, sent for job
received back work are not received back by the principal in accordance with the provisions of clause (a) of
or supplied sub-section (1) or are not supplied from the place of business of the job worker in accordance
therefrom with the provisions of clause (b) of sub-section (1) within a period of three years of their being
within 3 sent out,
years-
Deemed that  it shall be deemed that such capital goods had been supplied by the principal to the job-
CG were worker on the day when the said capital goods were sent out.
135
supplied
5 Treatment of Notwithstanding anything contained in sub-sections (1) and (2), any waste and scrap generated
waste and during the job work may be supplied by the
scrap
 job worker directly from his place of business on payment of tax, if such job worker is
registered, or
 by the principal, if the job worker is not registered.
Explanation.–For the purposes of job work, input includes intermediate goods arising from any
treatment or process carried out on the inputs by the principal or the job worker.
 Rule 45: Conditions and restrictions in respect of inputs and capital goods sent to the job worker:
SRN Description
1 The inputs, semi-finished goods or capital goods shall be sent to the job worker under the cover of a challan issued
by the principal, including where such goods are sent directly to a job-worker.
2 The challan issued by the principal to the job worker shall contain the details specified in rule 55.
3 The details of challans in respect of goods dispatched to a job worker or received from a job worker or sent from
one job worker to another during a quarter shall be included in FORM GST ITC-04 furnished for that period on or
before the twenty-fifth day of the month succeeding the said quarter.
4 Where the inputs or capital goods are not returned to the principal within the time stipulated in section 143, it
shall be deemed that such inputs or capital goods had been supplied by the principal to the job worker on the
day when the said inputs or capital goods were sent out and the said supply shall be declared in FORM GSTR-1 and
the principal shall be liable to pay the tax along with applicable interest.
Explanation: For the purposes of this Chapter,-

1) the expressions “capital goods” shall include “plant and machinery” as defined in the Explanation to section
17;
2) for determining the value of an exempt supply as referred to in sub-section (3) of section 17;
a) the value of land and building shall be taken as the same as adopted for the purpose of paying stamp duty;
and
b) the value of security shall be taken as one per cent. of the sale value of such security.
136
 Understanding #1*:
 As per Section 25 of the Act, the taxable person is required to obtain registration for each state separately.
The registration certificate will mention the principal POB. In addition to this, all establishments of a taxable
person in a STATE are required to be declared as an Additional POB.
 These establishments which are declared as an additional POB should be located in the same state. Thus, if a
person has a principal POB in Lucknow, UP, he can declare his establishment in Kanpur, UP as an additional
POB.
 But he cannot declare establishment located in Delhi as an additional POB for registration obtained in Uttar
Pradesh.
 In view of the above, it appears that the Job worker will be able to dispatch the inputs after processing to any
place of business located in the SAME STATE in which principal POB is located.
 Understanding #2:
th th
 Say X person has supplied inputs to Job worker Y on 25 July 2018. These inputs are not received back by 24
July 2019 by Mr.X after processing. As per this sub-section, principal will be required to pay the tax on supply
th th
of inputs. The TOS is 25 July 2018. If the tax liability arises on 24 July 2019 he will have to pay tax with
interest of one year.
th
 Say a principal X has sent inputs to the Job worker Y from the stock held by him on 25 July 2018. This sub
section provides that the Job worker shall either return the inputs after processing to any of his POB or shall
clear the inputs on payment of tax in India or export the goods outside India without payment of tax within
th
one year. In this case, one year expires on 24 July 2019. Hence, the activities by the Job worker must be
th
completed by the 24 July 2019.
 In case where the goods are sent directly by the Supplier to the Job worker, the period of one year will be
counted from the date of receipt of inputs by the Job worker and not from the date of dispatch of goods by
th
the Supplier. Assuming that the goods are cleared by the supplier on 25 July 2018 and received by the Job-
th th th
worker on 30 July 2018. The period of one year shall be counted by from 30 July 2018 not from 25 July
th
2018. However, if the goods are cleared from the stock of the principal on 25 July 2018 and received by the
th th th
Job- worker on 30 July 2018, the period will be counted from 25 July 2018 not from 30 July 2018. On
similar basis, the period of 3 years will be counted for Capital Goods [Refer sub-section (4)].
 Illustration 1–
Ashish Ltd. sends the goods/inputs to MM & Co. for further processing on 30-07-2017. The value of goods sent for
Job work is Rs. 2,00,000. What are the tax implications, in following cases, if GST @ 18% is levied:
(i) MM & Co. sends the processed goods back to Ashish Ltd on 30-10-2017
(ii) MM & Co. sends the processed goods back to Ashish Ltd on 30-10-2018
Make suitable assumptions as required.
Ans: MM & Co. sends the processed goods back to Ashish Ltd. on 30-10-2017 : As per section 143 of the Act,
Principal can remove the goods without payment of tax and take input tax credit provided inputs sent for job work
are returned back within one year of removal. Otherwise, it shall be treated as supply from principal to Job worker
as on 30-07-2017 and subject to tax along with interest.
137
In the present case, as the inputs are received back on 30-10-2017 i.e. before completion of one year, and hence
no tax is payable.
MM & Co. sends the processed goods back to Ashish Ltd. on 30-10-2018 : In the present case, the goods are
received after the period of one year and hence, Ashish Ltd. needs to pay the tax along with the interest on the
supply made by him to MM & Co. Hence, Ashish Ltd. need to pay Rs. 18,000 (CGST) and Rs. 18,000 (SGST) along
with specified interest on completion of one year.
 Illustration 2 –
Ashish Ltd. sends the machinery to MM & Co. for fixing of some technical issue and maintenance on 15-07-2017.
The value of goods sent to MM & Co. is Rs. 2,00,000/-. What are the tax implications (GST @ 18%), in the following
cases:
(i) MM & Co. sends the machinery back to Ashish Ltd. on 30-12-2018.
(ii) MM & Co. sends the machinery back to Ashish Ltd. on 30-09-2020
Make suitable assumptions as required.
Ans: In the given example the implications are as follows:
 MM & Co. sends the machinery back to Ashish Ltd on 30-12-2018 : As per section 143 of the Act, Principal
can remove the goods without payment of tax and take input tax credit provided capital goods sent for job
work are returned back within three years of removal. Otherwise, it shall be treated as supply from principal
to Job worker as on 15-07-2017 and subject to tax along with interest.
In the present case, as the machinery is received back on 30-12-2018 i.e. before completion of three years,
and hence no tax is payable.
 MM & Co. sends the machinery back to Ashish Ltd on 30-09-2020 : In present case, the machinery is received
after the period of three years and hence, Q Ltd. needs to pay tax taken along with the interest. Q Ltd. needs
to pay Rs. 18,000 (CGST) and Rs. 18,000 (SGST) along with specified interest on completion of 3 years.
 FAQs:
SN
Q. Whether the goods of principal directly supplied from the job-worker’s premises will be included in the
aggregate turnover of the Job Worker?
A. No. Since the responsibility of accountability of inputs and/or capital goods lies with principal, it will be
included in the aggregate turnover of the principal as enumerated in section 143 of the CGST Act, 2017.
Q. Any waste and scrap generated during the job work may be supplied by the job worker directly from his
place of business on payment of tax, if such job worker is registered. This will be included in the Aggregate
Turnover of Principal or Job worker?
A. This will be included in the Aggregate Turnover of Job Worker.
Q. Whether time limit of one year or three years in case of goods sent for job work is applicable to moulds and
dies, jigs and fixtures or tools sent out to job worker.
A. The time limit of one year or three years is not applicable to moulds and dies, jigs and fixtures or tools sent out
to job worker.
138
Q) Mr. X has sent his goods to Mr. Y on job-work on 07-05-2018. From when it will be considered as deemed
supply if not received back within one year?
a) 06-05-19
b) 07-05-18
c) 03-11-19
d) Not Taxable
139
Chapter XVI
LIABILITY TO PAY IN CERTAIN CASES
S No Particulars
85 Liability in case of transfer of business
86 Liability of agent and principal
87 Liability in case of amalgamation or merger of companies
88 Liability in case of company in liquidation
89 Liability of directors of private company
90 Liability of partners of firm to pay tax
91 Liability of guardians, trustees, etc.
92 Liability of Court of Wards, etc.
93 Special provisions regarding liability to pay tax, interest or penalty in certain cases
94 Liability in other cases
85. Liability in case of transfer of business:
1 In case of  Where a taxable person, liable to pay tax under this Act, transfers his business in whole or
transfer of in part, by sale, gift, lease, leave and license, hire or in any other manner whatsoever,
business-
transferor &  the taxable person and the person to whom the business is so transferred
transferee
both are  shall, jointly and severally,
liable to the
tax dues o/s  be liable wholly or to the extent of such transfer, to pay the tax, interest or any penalty due
from the taxable person upto the time of such transfer, whether such tax, interest or
penalty has been determined before such transfer, but has remained unpaid or is
determined thereafter.
2 Transferee  Where the transferee of a business referred to in sub-section (1) carries on such business
shall apply either in his own name or in some other name,
for his COR
or  he shall be liable to pay tax on the supply of goods or services or both effected by him with
amendment effect from the date of such transfer and
of COR as
the case  shall, if he is a registered person under this Act, apply within the prescribed time for
may be amendment of his certificate of registration.
140
86. Liability of agent and principal:
[Background: This section deals with casting liability on principal in addition to the liability of agent who
effect the supply of goods on behalf of principal or procures goods on behalf of his principal]
1 Both Where an agent supplies or receives any taxable goods on behalf of his principal, such agent
principal & and his principal shall, jointly and severally, be liable to pay the tax payable on such goods
agent are under this Act.
liable
 Understanding:
Say, Principal Mr.X supplies goods to the agent Mr.Y , Agent Mr. Y has two options:
First option is to take registration in the name of Mr.X and supply goods in the name
of Mr.X. The invoice will be raised by Mr.X, the amount will be received by Mr.X. In
such case, the entire liability to pay GST is on Mr.X and not on Mr.Y.
Second option of Mr.Y is to obtain registration in his name as agent of Mr.X. In this
case, the invoice for sale of goods will be raised by Mr.Y as the agent of Mr.X. The
amount against the invoice will also receive in the account of Mr.Y. In such case, the
liability to pay tax is jointly and severally on agent and principal as provided under
section 128 of GST Act.
87. Liability in case of amalgamation or merger of Companies:
1 In the  When two or more companies are amalgamated or merged in pursuance of an order of
intervening court or of Tribunal or otherwise and the order is to take effect from a date earlier to the
pd the date of the order and
supply
shall be  any two or more of such companies have supplied or received any goods or services or
included in both to or from each other during the period commencing on the date from which the
the T/O of order takes effect till the date of the order,
the
respective  then such transactions of supply and receipt shall be included in the turnover of supply or
companies receipt of the respective companies and they shall be liable to pay tax accordingly.
 Understanding:
st
Company A & B decides to merge in October 2017 w.e.f. 1 August 2017. After
obtaining necessary approval and framing of scheme, they apply to NCLT for the
purpose of obtaining approval. The NCLT, say, approve the same in July 2018 and the
st
DATE OF ORDER is 15-7-2018 but the effective date of amalgamation/merger is 1
August 2017.
Say company A has supplied goods to company B during August 17. As per sub-section
(1) the company A & B will be considered as independent company till the DATE OF
ORDER FOR APPROVAL and therefore the transaction between the company will be
liable to tax. The company A cannot argue that the merger has taken effect from 1-8-
2017 and therefore there is no supply of goods or services from one person to
another person. Hence transaction is not chargeable to tax. In view of specific
provision, tax will be payable on such transaction (the companies will remain
independent till the DATE OF ORDER).
141
2 Companies  Notwithstanding anything contained in the said order, for the purposes of this Act,
shall be
treated as  the said two or more companies shall be treated as distinct companies for the period up to
Distinct the date of the said order and
Companies
up to the  the registration certificates of the said companies shall be cancelled with effect from the
date of the date of the said order.
order and
the RC
shall be
cancelled
w.e.f. the
said order
88. Liability in case of Company in liquidation:
1 Winding up-  When any company is being wound up whether under the orders of a court or Tribunal or
Liquidator otherwise, every person appointed as receiver of any assets of a company (hereafter in
shall this section referred to as the “liquidator”), shall,
intimate
Comm.  within thirty days after his appointment, give intimation of his appointment to the
within 30 Commissioner.
days
2 Commission  The Commissioner shall, after making such inquiry or calling for such information as he
er notifying may deem fit, notify the liquidator.
the amount
payable to  within three months from the date on which he receives intimation of the appointment
the Govt- of the liquidator, the amount which in the opinion of the Commissioner would be
within 3 sufficient to provide for any tax, interest or penalty which is then, or is likely thereafter to
months become, payable by the company.
3 Where the  When any private company is wound up and any tax, interest or penalty determined
amount due under this Act on the company for any period, whether before or in the course of or after
from the its liquidation, cannot be recovered,
company
cannot be  then every person who was a director of such company at any time during the period
recovered? for which the tax was due shall, jointly and severally, be liable for the payment of such
tax, interest or penalty,
 unless he proves to the satisfaction of the Commissioner that such non-recovery cannot
be attributed to any gross neglect, misfeasance (the wrongful exercise of position) or
breach of duty on his part in relation to the affairs of the company.
 Example:
If tax is due is for 2012-13 then the directors in 2012-13 are liable only.
142
89. Liability of directors of private company:
1 Pvt Co &  Notwithstanding anything contained in the Companies Act, 2013,
Directors
are liable  where any tax, interest or penalty due from a private company in respect of any supply of
to pay the goods or services or both for any period cannot be recovered, then,
dues
 every person who was a director of the private company during such period shall,
jointly and severally, be liable for the payment of such tax, interest or penalty
 unless he proves that the non-recovery cannot be attributed to any gross neglect,
misfeasance or breach of duty on his part in relation to the affairs of the company.
2 NA- Pvt Co  Where a private company is converted into a public company and the tax, interest or
is penalty in respect of any supply of goods or services or both for any period during which
converted such company was a private company cannot be recovered before such conversion,
to Public
Co  then, nothing contained in sub-section (1) shall apply to any person who was a director of
such private company in relation to any tax, interest or penalty in respect of such supply of
goods or services or both of such private company:
PROVIDED that nothing contained in this sub-section shall apply to any personal penalty
imposed on such director.
 In other words:
However, an exception has been carved out for the above provision – viz., where the
private company is converted into public company.
In such cases, the director of such private company will not be liable to pay any such
amounts.
90. Liability of partners of Firm to pay tax:
90 Firm & Notwithstanding any contract to the contrary and any other law for the time being in force,
partners where any firm is liable to pay any tax, interest or penalty under this Act, the firm and each of
are liable the partners of the firm shall, jointly and severally, be liable for such payment:
Intimation PROVIDED that where any partner retires from the firm, he or the firm, shall intimate the date
to Comm. of retirement of the said partner to the Commissioner by a notice in that behalf in writing and
within 1 such partner shall be liable to pay tax, interest or penalty due up to the date of his retirement
month whether determined or not, on that date:
If NOT PROVIDED FURTHER that if no such intimation is given within one month from the date of
intimated retirement, the liability of such partner under the first proviso shall continue until the date on
within 1 which such intimation is received by the Commissioner.
month
143
91. Liability of guardians, trustees, etc:
91 Business is  Where the business in respect of which any tax, interest or penalty is payable under this Act
carried on is carried on by any
by
guardian,  guardian, trustee or agent of a minor or other incapacitated person (unsound mind,
trustee or terminally ill, etc) on behalf of and for the benefit of such minor or other incapacitated
agent of a person,
minor or
other  the tax, interest or penalty shall be levied upon and recoverable from such guardian,
incapacitat trustee or agent in like manner and to the same extent as it would be determined and
ed person. recoverable from any such minor or other incapacitated person,
 as if he were a major or capacitated person and as if he were conducting the business
himself, and all the provisions of this Act or the rules made thereunder shall apply
accordingly.
[The deeming fiction is required to overcome the general principle of law, which operates in
favour of a minor or incapacitated person to plead minority or incapacity in respect of dues or
claims, particularly penal liability.]
92. Liability of Court of Wards, etc.:
92 The dues  Where the estate or any portion of the estate of a taxable person owning a business in
shall be respect of which any tax, interest or penalty is payable under this Act is
levied and
recoverable  under the control of the Court of Wards, the Administrator General, the Official Trustee
from Court or any receiver or manager (including any person, whatever be his designation, who in fact
of Wards, manages the business) appointed by or under any order of a court,
the
Administrat  the tax, interest or penalty shall be levied upon and be recoverable from such Court of
or General, Wards, Administrator General, Official Trustee, receiver or manager in like manner and to
the official the same extent as it would be determined and be recoverable from the taxable person as
Trustee or if he were conducting the business himself, and all the provisions of this Act or the rules
any receiver made thereunder shall apply accordingly.
or manager
 Example:
Mr. ABC is appointed as manager of Mr. X, to manage the estate of Mr. X, who owns a
trading of laptops. Mr. X is liable to pay Rs. 20,00,000/- of CGST, interest and penalty
to the Government. The department can recover such dues from Mr. ABC who is
managing the estates of Mr. X., by invoking this provision.
Court of Wards The purpose of the Court of Wards is to protect heirs and their estates
when the heir was deemed to be the minor and therefore incapable of
acting independently.
Administrator A person appointed by the Court to manage and take charge of the assets
and liabilities of the person who has died without making a valid will.
144
93. Special provisions regarding liability to pay tax, interest or penalty in certain cases:
1 Death of the Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, where a person,
taxable liable to pay tax, interest or penalty under this Act, dies, then––
person
[Individual] (a) if a business carried on by the person is continued after his death by his legal
representative or any other person, such legal representative or other person, shall
be liable to pay tax, interest or penalty due from such person under this Act; and
(b) if the business carried on by the person is discontinued, whether before or after
his death, his legal representative shall be liable to pay, out of the estate of the
deceased, to the extent to which the estate is capable of meeting the charge, the
tax, interest or penalty due from such person under this Act,
whether such tax, interest or penalty has been determined before his death but has
remained unpaid or is determined after his death.
2 Partition of Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016,
HUF and  where a taxable person, liable to pay tax, interest or penalty under this Act, is a Hindu
AOPs Undivided Family or an association of persons and
 the property of the Hindu Undivided Family or the association of persons is partitioned
amongst the various members or groups of members, then,
 each member or group of members shall, jointly and severally, be liable to pay the tax,
interest or penalty due from the taxable person under this Act up to the time of the
partition whether such tax, penalty or interest has been determined before partition but
has remained unpaid or is determined after the partition.
3 Dissolution Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016,
of the firm
 where a taxable person, liable to pay tax, interest or penalty under this Act, is a firm, and
the firm is dissolved,
 then, every person who was a partner shall, jointly and severally, be liable to pay the tax,
interest or penalty due from the firm under this Act up to the time of dissolution whether
such tax, interest or penalty has been determined before the dissolution, but has
remained unpaid or is determined after dissolution.
4 Termination Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016,
of
Guardianship  where a taxable person liable to pay tax, interest or penalty under this Act,––
and Trust
(a) is the guardian of a ward on whose behalf the business is carried on by guardian; or
(b) is a trustee who carries on the business under a trust for a beneficiary,
then, if the guardianship or trust is terminated, the ward or the beneficiary shall be liable to
pay the tax, interest or penalty due from the taxable person upto the time of the termination
of the guardianship or trust, whether such tax, interest or penalty has been determined before
the termination of guardianship or trust but has remained unpaid or is determined thereafter.
145
94. Liability in other cases:
1 Firm, HUF & Where a taxable person is a firm or an association of persons or a Hindu Undivided Family
AOP has and such firm, association or family has discontinued business––
discontinued
business (a) the tax, interest or penalty payable under this Act by such firm, association or family up to
the date of such discontinuance may be determined as if no such discontinuance had taken
place; and
(b) every person who, at the time of such discontinuance, was a partner of such firm, or a
member of such association or family, shall, notwithstanding such discontinuance, jointly and
severally, be liable for the payment of tax and interest determined and penalty imposed and
payable by such firm, association or family, whether such tax and interest has been
determined or penalty imposed prior to or after such discontinuance and subject as
aforesaid, the provisions of this Act shall, so far as may be, apply as if every such person or
partner or member were himself a taxable person.
2 Change in  Where a change has occurred in the constitution of a firm or an association of persons,
the
Constitution  the partners of the firm or members of association, as it existed before and as it exists
of the Firm & after the reconstitution,
AOP- The
partner or  shall, without prejudice to the provisions of section 90, jointly and severally, be liable to
members pay tax, interest or penalty due from such firm or association for any period before its
before and reconstitution.
after shall be
liable to pay
tax
3 S/S (1) along The provisions of sub-section (1) shall, so far as may be, apply where the taxable person,
with being a firm or association of persons is dissolved or where the taxable person, being a Hindu
discontinuan Undivided Family, has effected partition with respect to the business carried on by it and
ce of the accordingly references in that sub-section to discontinuance shall be construed as reference
business to dissolution or to partition.
deals with
dissolution of
the
Firm/AOP as
well as
partition of
HUF
EXPLANATION to the Explanation –For the purposes of this Chapter,––

CHAPTER (i) a “Limited Liability Partnership” formed and registered under the provisions of the
Limited Liability Partnership Act, 2008 shall also be considered as a firm;
(ii) “Court” means the District Court, High Court or Supreme Court.
146
 Migration of existing Tax Payers to GST:
PRE GST
Existing taxpayer – i.e. registered
under any of earlier laws
POST GST
 “Provisional Certificate of Registration” granted irrespective of whether existing taxpayer liable to

be registered under section 22 of the Act or not.
 Further allowable extended time period to submit requisite documents as may be prescribed.
 Final registration to be granted by Central Government (CG)/State Government (SG) subject to the
condition that the :
 Requisite information submitted within the time period allowed.
 “Provisional Certificate of Registration” granted deemed to not have been issued if application filed
for cancellation of registration by person not liable to be registered under Section 22 [Registration
requirement] of the Act/If he does not furnish the prescribed information within prescribed time
period.
Example: There can be a circumstance that under the pre-GST regime, the person dealing in the
goods were TAXABLE but under the GST regime the same goods went EXEMPT. Therefore, the
person is not liable to be registered under the GST regime. Thus, the provisional certificate of
registration needs to be cancelled.
147
Chapter XX
Transitional Provisions
SN Particulars
139) Migration of existing taxpayers
140) Transitional arrangements for input tax credit
141) Transitional provisions relating to job work
142) Miscellaneous transitional provisions
139. Migration of existing Tax Payers to GST:
SN Description
1) On and from the appointed day, every person registered under any of the existing laws and having a valid
Permanent Account Number shall be issued a certificate of registration on provisional basis, subject to such
conditions and in such form and manner as may be prescribed, which unless replaced by a final certificate of
registration under sub-section (2), shall be liable to be cancelled if the conditions so prescribed are not
complied with.
2) The final certificate of registration shall be granted in such form and manner and subject to such conditions
as may be prescribed.
3) The certificate of registration issued to a person under sub-section (1) shall be deemed to have not been
issued if the said registration is CANCELLED in pursuance of an application filed by such person that he was
not liable to registration under section 22 or section 24.
148
 Credit of unavailed CENVAT credit in respect of capital goods, not carried forward in a return, shall be allowed:
A RTP shall be shall In the electronic Credit on Capital Goods

be eligible to take credit ledger NOT carried forward in
the credit a return
Unavailed Credit = [Total Such credit shall be eligible

eligible Credit – Credit under the earlier law AND
availed] under the earlier under GST Law
law
 Credit of eligible duties in respect of inputs held in stock allowed in certain situations:
Person eligible for input tax credit: Person eligible for input tax credit: Person eligible for input tax credit:
 Person not liable to be registered  Inputs held in stock and inputs  Goods must be used for taxable
under the earlier law contained in semi-finished goods supply.
 Person engaged in manufacture/ or finished goods held in stock as
sale of exempted goods, provision on appointed day  Eligible to take the credit under
of exempted services GST law
 Person providing works contract  Above benefit not available for
service and availing abatement input services  Eligible to take the credit under
under notification no. 26/2012 GST law
 First/ Second stage dealer,  Such credit can be taken in the
 importer or electronic credit ledger  Invoice or other document
 A depot of a manufacture should be within 12 months
from the AD
149
140. Transitional arrangement for Input tax credit:
SN Description
1) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his
electronic credit ledger, the amount of CENVAT credit carried forward in the return relating to the period
ending with the day immediately preceding the appointed day, furnished by him under the existing law in
such manner as may be prescribed:
Provided that the registered person SHALL NOT BE ALLOWED to take credit in the following circumstances,
namely:—
i) where the said amount of credit is not admissible as input tax credit under this Act; or
ii) where he has not furnished ALL THE RETURNS required under the existing law for the period of six
months immediately preceding the appointed date; or
iii) where the said amount of credit relates to goods manufactured and cleared under such exemption
notifications as are notified by the Government.
2) A registered person, other than a person opting to pay tax under section 10, shall be entitled to take, in his
electronic credit ledger, credit of the UNAVAILED CENVAT CREDIT in respect of CAPITAL GOODS, not carried
forward in a return, furnished under the existing law by him, for the period ending with the day immediately
preceding the appointed day in such manner as may be prescribed:
Provided that the registered person shall not be allowed to take credit unless the said credit was
admissible as CENVAT credit under the existing law and is also admissible as input tax credit under this Act.
Explanation.––For the purposes of this sub-section, the expression “unavailed CENVAT credit” means the
amount that remains after subtracting the amount of CENVAT credit already availed in respect of capital
goods by the taxable person under the existing law from the aggregate amount of CENVAT credit to which
the said person was entitled in respect of the said capital goods under the existing law.
3) A registered person, who was not liable to be registered under the existing law, or who was engaged in the
manufacture of exempted goods or provision of exempted services, or who was providing works contract
service and was availing of the benefit of notification No. 26/2012—Service Tax, dated the 20th June, 2012
or a first stage dealer or a second stage dealer or a registered importer or a depot of a manufacturer, shall
be entitled to take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock
and inputs contained in semi-finished or finished goods held in stock on the appointed day subject to the
following conditions, namely:––
i) such inputs or goods are used or intended to be used for making taxable supplies under this Act;
ii) the said registered person is eligible for input tax credit on such inputs under this Act;
iii) the said registered person is in possession of invoice or other prescribed documents evidencing
payment of duty under the existing law in respect of such inputs;
iv) such invoices or other prescribed documents were issued not earlier than twelve months immediately
preceding the appointed day; and
v) the supplier of services is not eligible for any abatement under this Act:
Provided that where a registered person, OTHER THAN a MANUFACTURER or a SUPPLIER OF SERVICE, is not
in possession of an invoice or any other documents evidencing payment of duty in respect of inputs, then,
such registered person shall, subject to such conditions, limitations and safeguards as may be prescribed,
including that the said taxable person shall pass on the benefit of such credit by way of reduced prices to the
recipient, be allowed to take credit at such rate and in such manner as may be prescribed.
150
 Analysis:
SN Category of Tax payer Details to be provided Amount of ITC available

1) Manufacturers & Service providers Closing balance of Cenvat credit Closing balance of Cenvat
already registered under existing credit as per last
laws return
2) Manufacturers & Service providers Balance of un-availed Cenvat Amount of Cenvat credit
already registered under existing credit of capital Goods on capital goods not
laws availed earlier
3) Manufacturers & Service providers Stock held as inputs/ semi- Amount of duty paid as
supplying exempted goods/ finished/ finished goods to be per available duty paid
services not required to be used for making taxable supplies invoice
registered under existing laws, where duty paid invoices
works contract service provider available.
availing exemption notification,
first stage/second stage dealer,
registered importer, or depot of a
manufacturer
4) Trader (not liable to be registered Stock held as inputs/semi- Amount of duty paid as
under existing Central laws) finished/ finished goods to be per available duty paid
used for making taxable supplies invoice
where duty paid invoices
available.
Stock held as inputs/semi- ITC will be reduced by

finished/ finished goods to be such percentage as may
used for making taxable supplies be prescribed.
where duty paid invoices not
available.
Type of supply from such stock Rate of tax applicable Quantum of credit* allowed
Intra-State Outward Supply CGST @ 9% or more 60% of the CGST paid
CGST @ below 9% 40% of the CGST paid
Inter-State Outward Supply IGST @ 18% or more 30% of the IGST paid
IGST @ below 18% 20% of the IGST paid
4) A registered person, who was engaged in the MANUFACTURE of TAXABLE as well as EXEMPTED goods
under the Central Excise Act, 1944 or PROVISION of TAXABLE as well as EXEMPTED services under Chapter
V of the Finance Act, 1994, but which are liable to tax under this Act, shall be entitled to take, in his
electronic credit ledger,—
a) the amount of CENVAT credit carried forward in a return furnished under the existing law by him in
accordance with the provisions of sub-section (1); and
b) the amount of CENVAT credit of eligible duties in respect of inputs held in stock and inputs contained
in semi-finished or finished goods held in stock on the appointed day, relating to such exempted goods
or services, in accordance with the provisions of sub-section (3).
151
5) A registered person shall be entitled to take, in his electronic credit ledger, credit of eligible duties and taxes
in respect of inputs or input services RECEIVED on or AFTER the APPOINTED DAY but the
 duty or tax in respect of which has been PAID by SUPPLIER under the EXISTING LAW, subject to the
condition that the invoice or any other duty or tax paying document of the same was RECORDED in
the books of account of such person within a period of thirty days from the appointed day:
Provided that the period of thirty days may, on sufficient cause being shown, be extended by the
Commissioner for a further period not exceeding thirty days:
Provided further that said registered person shall furnish a statement, in such manner as may be prescribed,
in respect of credit that has been taken under this sub-section.
6) A registered person, who was either paying tax at a fixed rate or paying a fixed amount in lieu of the tax
payable under the existing law (Opted Composition Scheme under the existing law) shall be entitled to
take, in his electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs
contained in semi-finished or finished goods held in stock on the appointed day subject to the following
conditions, namely:––
i) such inputs or goods are used or intended to be used for making taxable supplies under this Act;
ii) the said registered person is not paying tax under section 10 (Composition Scheme) ;
iii) the said registered person is eligible for input tax credit on such inputs under this Act;
iv) the said registered person is in possession of invoice or other prescribed documents evidencing
payment of duty under the existing law in respect of inputs; and
v) such invoices or other prescribed documents were issued not earlier than twelve months immediately
preceding the appointed day.
7) Notwithstanding anything to the contrary contained in this Act, the input tax credit on account of any
SERVICES RECEIVED PRIOR to the appointed day by an ISD shall be eligible for distribution as credit under
this act EVEN IF THE INVOICES relating to such services are RECEIVED on or after the appointed day.
8) Where a registered person having centralised registration under the existing law has obtained a registration
under this Act, such person shall be allowed to take, in his electronic credit ledger, credit of the amount of
CENVAT credit carried forward in a return, furnished under the existing law by him, in respect of the period
ending with the day immediately preceding the appointed day in such manner as may be prescribed:
Provided that if the registered person furnishes his return for the period ending with the day immediately
preceding the appointed day within three months of the appointed day, such credit shall be allowed subject
to the condition that the said return is either an original return or a revised return where the credit has been
reduced from that claimed earlier:
Provided further that the registered person shall not be allowed to take credit unless the said amount is
admissible as input tax credit under this Act:
Provided also that such credit may be transferred to any of the registered persons having the same
Permanent Account Number for which the centralised registration was obtained under the existing law.
9) Where any CENVAT credit availed for the input services provided under the existing law has been reversed
due to non-payment of the consideration within a period of three months, such credit can be reclaimed
subject to the condition that the registered person has made the payment of the consideration for that
supply of services within a period of three months from the appointed day.
10) The amount of credit under sub-sections (3), (4) and (6) shall be calculated in such manner as may be
prescribed.
152
Explanation 1.—For the purposes of sub-sections (3), (4) and (6), the expression “eligible duties” means––
(i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods
of Special Importance) Act, 1957;
(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff Act, 1975;
(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975;
(iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile
and Textile Articles) Act, 1978;
(v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985;
(vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985; and
(vii) the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001, in
respect of inputs held in stock and inputs contained in semi-finished or finished goods held in
stock on the appointed day.
Explanation 2.—For the purposes of sub-section (5), the expression “eligible duties and taxes” means––
(i) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Goods of Special
Importance) Act, 1957;
(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs Tariff Act, 1975;
(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs Tariff Act, 1975;
(iv) the additional duty of excise leviable under section 3 of the Additional Duties of Excise (Textile and
Textile Articles) Act, 1978;
(v) the duty of excise specified in the First Schedule to the Central Excise Tariff Act, 1985;
(vi) the duty of excise specified in the Second Schedule to the Central Excise Tariff Act, 1985;
(vii) the National Calamity Contingent Duty leviable under section 136 of the Finance Act, 2001; and
(viii) the service tax leviable under section 66B of the Finance Act, 1994, in respect of inputs and input
services received on or after the appointed day.
153
 Transitional provisions relating to job work:
Applicability of EXEMPTION:
No TAX liability WHEN: TAX payable WHEN and by WHOM:
Principal and Job Worker
Goods were removed as such Goods are liable for payment of
should DECLARE details of
or after partial processing for taxes under GST; and
inputs held in Stock by the
Job work under the earlier
Job Worker on behalf of
law prior to AD. Such goods are returned after 6
the Principal on the AD.
months or the extended period
Such goods are returned (2 months) from the AD.
within 6 months or within
the extended period (2 If goods are NOT returned within
months) from the appointed 6 months or extended period ,
day to the said place of ITC availed iro inputs removed
business. will be recovered from the
Principal
154
141. Transitional provisions relating to Job work:
SN Description
1) Where any inputs received at a place of business had been removed as such or removed after being
partially processed to a job worker for further processing, testing, repair, reconditioning or any other
purpose in accordance with the provisions of existing law PRIOR to the appointed day and such inputs are
returned to the said place on or AFTER the appointed day,
 NO tax shall be payable if such inputs, after completion of the job work or otherwise, are returned
to the said place within six months from the appointed day:
Provided that the period of six months may, on sufficient cause being shown, be extended by the
Commissioner for a further period not exceeding two months:
Provided further that if such inputs are NOT RETURNED within the period specified in this subsection,
the input tax credit shall be liable to be recovered in accordance with the provisions of clause (a) of sub-
section (8) of section 142.
2) Where any semi-finished goods had been removed from the place of business to any other premises for
carrying out certain manufacturing processes in accordance with the provisions of existing law prior to the
appointed day and such goods (hereafter in this section referred to as “the said goods”) are returned to the
said place on or after the appointed day,
 NO tax shall be payable, if the said goods, after undergoing manufacturing processes or otherwise,
are returned to the said place within six months from the appointed day:
Provided further that if the said goods are NOT RETURNED within the period specified in this sub-section,
section (8) of section 142:
Provided also that the manufacturer may, in accordance with the provisions of the existing law, transfer the
said goods to the premises of any registered person for the purpose of supplying therefrom on payment of
tax in India or without payment of tax for exports within the period specified in this sub-section.
3) Where any excisable goods manufactured at a place of business had been removed without payment of
duty for carrying out tests or any other process not amounting to manufacture, to any other premises,
whether registered or not, in accordance with the provisions of existing law prior to the appointed day and
such goods, are returned to the said place on or after the appointed day,
 NO tax shall be payable if the said goods, after undergoing tests or any other process, are returned
to the said place within six months from the appointed day:
Provided further that if the said goods are NOT RETURNED within the period specified in this sub-section,
section (8) of section 142:
Provided also that the manufacturer may, in accordance with the provisions of the existing law, transfer the
said goods from the said other premises on payment of tax in India or without payment of tax for exports
within the period specified in this sub-section.
155
 Duty paid Goods returned to the place of business on or after the appointed day:
Duty paid GOODS
under the earlier law
Removed within 6
months before the
applicability of GST
If person returning the

Returned to the POB Returned to the POB
goods is unregistered,
within 6 months from the after 6 months from the
then RCM u/s 9(4) will
applicability of GST applicability of GST
get attracted.
Return by person other GST payable by the

than Registered Person person returning the
goods, if he is a
registered Person
Registered person shall

be eligible for refund of
tax under the earlier law
 Issue of supplementary invoices, debit or credit notes where price is revised in pursuance of a contract:
Any contract entered

into PRIOR to the
Revision of price
after the date of
Upward revision Downward revision
Issue supplementary Issue Credit Note within

invoice or Debit Note 30 days of Price revision
within 30 days of Price [Recipient to reduce his
revision ITC correspondingly]
Deemed to be issued
in respect of an
Output supply
156
4 The tax under sub-sections (1), (2) and (3) shall not be payable, only if the manufacturer and the job worker
declare the details of the inputs or goods held in stock by the job worker on behalf of the manufacturer on
the appointed day in such form and manner and within such time as may be prescribed.
142. Miscellaneous Transitional Provisions:
SN Description
1) Where any goods on which duty, if any, had been paid under the existing law at the time of removal
thereof, not being earlier than six months prior to the appointed day,
 are RETURNED any place of business on or after the appointed day, the registered person (the
supplier) shall be eligible for refund of the duty paid under the existing law where such goods are
returned by a person, OTHER THAN A REGISTERED PERSON, to the said place of business within a
period of six months from the appointed day and such goods are identifiable to the satisfaction of
the proper officer:
Provided that if the said goods are RETURNED BY A REGISTERED PERSON, the return of such goods shall be
deemed to be a supply.
2) a) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or
services or both is revised UPWARDS on or after the appointed day, the registered person who had
removed or provided such goods or services or both shall issue to the recipient a supplementary invoice
or debit note, containing such particulars as may be prescribed, within thirty days of such price revision
and for the purposes of this Act
 such supplementary invoice or debit note shall be deemed to have been issued in respect of an
outward supply made under this Act;
b) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or
services or both is revised DOWNWARDS on or after the appointed day, the registered person who had
removed or provided such goods or services or both may issue to the recipient a credit note, containing
such particulars as may be prescribed, within thirty days of such price revision and for the purposes of
this Act
 such credit note shall be deemed to have been issued in respect of an outward supply made under
this Act:
Provided that the registered person shall be allowed to reduce his tax liability on account of issue of the
credit note only if the RECIPIENT of the credit note has reduced his input tax credit corresponding to such
reduction of tax liability.
3) Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount
of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in
accordance with the provisions of existing law and
 any amount eventually accruing to him shall be paid in CASH, notwithstanding anything to the
contrary contained under the provisions of existing law other than the provisions of subsection (2)
of section 11B of the Central Excise Act, 1944:
Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so
rejected shall LAPSE:
Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the
said amount as on the appointed day has been carried forward under this Act.
157
 Refund Claims:
Any refund claim filed
BEFORE, ON or AFTER the
date of applicability of GST
Disposed of in accordance
of earlier law
Refund is allowed in Refund is rejected in

entirety or partially entirety or partially
The portion allowed The portion

shall be paid in CASH rejected will LAPSE
158
4) Every claim for refund filed after the appointed day for refund of any duty or tax paid under existing law in
respect of the goods or services EXPORTED before or after the appointed day, shall be disposed of in
accordance with the provisions of the existing law:
Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so
rejected shall LAPSE:
Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the
said amount as on the appointed day has been carried forward under this Act.
5) Every claim filed by a person after the appointed day for refund of tax paid under the existing law in respect
of SERVICES NOT PROVIDED shall be disposed of in accordance with the provisions of existing law and any
amount eventually accruing to him shall be paid in CASH, notwithstanding anything to the contrary
contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of
the Central Excise Act, 19
6) a) Every proceeding of appeal, review or reference relating to a claim for CENVAT initiated whether
BEFORE, ON or AFTER the appointed day under the existing law shall be disposed of in accordance with
the provisions of existing law, and
 any amount of credit found to be ADMISSIBLE to the claimant shall be refunded to him in CASH,
notwithstanding anything to the contrary contained under the provisions of existing law other than
the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and
the amount rejected, if any, shall not be admissible as input tax credit under this Act:
Provided that no refund shall be allowed of any amount of CENVAT credit where the balance of the said
amount as on the appointed day has been carried forward under this Act;
b) Every proceeding of appeal, review or reference relating to recovery of CENVAT credit initiated whether
BEFORE, ON or AFTER the appointed day under the existing law shall be disposed of in accordance with
the provisions of existing law and
 if any amount of credit becomes RECOVERABLE as a result of such appeal, review or reference, the
same shall, unless recovered under the existing law, be recovered as an arrear of tax under THIS
ACT and the amount so recovered shall not be admissible as input tax credit under this Act.
7) a) every proceeding of appeal, review or reference relating to any output duty or tax tax liability initiated
whether BEFORE, ON or AFTER the appointed day under the existing law, shall be disposed of in
accordance with the provisions of the existing law, and
 if any amount becomes RECOVERABLE as a result of such appeal, review or reference, the same
shall, unless recovered under the existing law, be recovered as an arrear of duty or tax under THIS
ACT and the amount so recovered shall not be admissible as input tax credit under this Act.
b) every proceeding of appeal, review or reference relating to any output duty or tax liability initiated
whether BEFORE, ON or AFTER the appointed day under the existing law, shall be disposed of in
accordance with the provisions of the existing law, and
 any amount found to be ADMISSIBLE to the claimant shall be refunded to him in CASH,
notwithstanding anything to the contrary contained under the provisions of existing law other than
the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and
the amount rejected, if any, shall not be admissible as input tax credit under this Act.
159
 Treatment of the amount recovered or refunded pursuant to revision of return:
Due to revision of return

under the earlier law, if
any amount
Becomes refundable Becomes recoverable

from taxable person from the taxable person
Amount refunded in Amount shall be recovered

CASH as arrear of tax
Not admissible as ITC
160
8) a) where in pursuance of an assessment or adjudication proceedings instituted, whether BEFORE, ON or

AFFTER the appointed day, under the existing law,
 any amount of tax, interest, fine or penalty becomes RECOVERABLE from the person, the same
shall, unless recovered under the existing law, be recovered as an arrear of tax under THIS ACT and
the amount so recovered shall not be admissible as input tax credit under this Act;
b) where in pursuance of an assessment or adjudication proceedings instituted, whether BEFORE, ON or

AFTER the appointed day, under the existing law,
 any amount of tax, interest, fine or penalty becomes REFUNDABLE to the taxable person, the same
shall be refunded to him in CASH under the said law, notwithstanding anything to the contrary
contained in the said law other than the provisions of sub-section (2) of section 11B of the Central
Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under
this Act.
9) a) where any return, furnished under the existing law, is REVISED after the appointed day and
 if, pursuant to such revision, any amount is found to be RECOVERABLE or any amount of CENVAT
credit is found to be inadmissible, the same shall, unless recovered under the existing law, be
recovered as an arrear of tax under THIS ACT and the amount so recovered shall not be admissible
as input tax credit under this Act;
b) where any return, furnished under the existing law, is REVISED after the appointed day but within the
time limit specified for such revision under the existing law and
 if, pursuant to such revision, any amount is found to be REFUNDABLE or CENVAT credit is found to
be admissible to any taxable person, the same shall be refunded to him in CASH under the existing
law, notwithstanding anything to the contrary contained in the said law other than the provisions of
sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall
not be admissible as input tax credit under this Act.
10) Save as otherwise provided in this Chapter, the goods or services or both supplied on or after the appointed
day in pursuance of a contract entered into PRIOR to the appointed day shall be LIABLE TO TAX under the
provisions of THIS ACT.
11) a) notwithstanding anything contained in section 12, no tax shall be payable on GOODS under THIS ACT to
the extent the tax was leviable on the said goods under the existing law [Value Added Tax Act of the
State];
b) notwithstanding anything contained in section 13, no tax shall be payable on SERVICES under THIS ACT
to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994;
c) where tax was paid on any supply both under the Value Added Tax Act and under Chapter V of the
Finance Act, 1994, tax shall be leviable under THIS ACT and the taxable person shall be entitled to take
credit of value added tax or service tax paid under the existing law to the extent of supplies made after
the appointed day & such credit shall be calculated in such manner as may be prescribed.
12) Where any GOODS sent on approval basis, not earlier than six months before the appointed day, are
rejected or not approved by the buyer and returned to the seller on or after the appointed day,
 NO tax shall be payable thereon if such goods are returned within six months from the appointed
day:
Provided that the said period of six months may, on sufficient cause being shown, be extended by the
161
 Taxability of supply of goods sent on approval basis:
Where:
 Goods are sent on approval basis before
the appointed day.
 Returned by the buyer on account of
rejection/no approval, on or after the
appointed day.
 Such goods are sent not earlier than six
months before the appointed day
Tax treatment shall be as follows:
Where transaction takes place within Where transaction exceeds the time
the time limit as per this section limit as per this Section
 Returned to the seller within six a) Where:

months / further extended  The goods are liable to tax under this Act
AND
period up to 2 months from the
 Returned to the seller after six months /
appointed day further extended period up to 2 months
from the appointed day.
No tax shall be payable on such Tax shall be payable by the “person returning
goods the goods”
b) Where:
 The goods are liable to tax under this
Act AND
 Not returned to the seller within six
months / further extended period up to
2 months from the appointed day.
Tax shall be payable by the “person sending
the goods on approval basis”
162
Provided further that the tax shall be payable by the person returning the goods if such goods are liable to
tax under this Act, and are returned after a period specified in this subsection:
Provided also that tax shall be payable by the person who has sent the goods on approval basis if such
goods are liable to tax under this Act, and are not returned within a period specified in this sub-section.
13) Where a supplier has made any sale of goods in respect of which tax was required to be deducted at source
under any law of a State or Union territory relating to Value Added Tax (existing law) and has also issued an
invoice for the same before the appointed day,
 no deduction of tax at source under section 51 shall be made by the deductor under the said
section where payment to the said supplier is made on or after the appointed day.
Explanation.––For the purposes of this Chapter, the expressions “capital goods”, “Central Value Added Tax
(CENVAT) credit”, “first stage dealer”, “second stage dealer”, or “manufacture” shall have the same meaning
as respectively assigned to them in the Central Excise Act, 1944 or the rules made thereunder.
163
E-WAY BILL
Under GST, E-way is required before
Movement of GOODS commencement of movement of goods
Caused by:
Registered person OTHER THAN

Registered person
SUPPLY Other than SUPPLY Inward Supply from

[Sales, Stock transfer, [Job- worker, Sales UNREGISTERED
etc return, etc] PERSON  Say, an unregistered person
supplies to goods to a registered
person and the movement is
caused by unregistered person?
 The registered person shall
generate E-way Bill
Registered person
shall generate E-
rriseBill
way
EXCEPT:
i) Inter-state movement
YES by Principal to Job
Whether Consignment value No requirement to
Issue E –WAY BILL worker
is less than Rs.50,000? ii) Inter-state movement
[but, OPTIONAL]
of HANDICRAFT GOODS
NO [Sec 24(i) & (ii)]
Transportation of goods Transportation of OTHER

in NOTIFIED cases THAN exempted goods
No requirement to Whether the assesse himself

Issue E –WAY BILL supply such goods [in his own
[but, OPTIONAL] conveyance/ hired one/ by
rail/ air or vessel]?
Supplier required to FURNISH

& GENERATE information in
PART A and B of E-Way BILL
164
E-WAY BILL
Under GST, E-way is required before
Movement of GOODS commencement of movement of goods
Caused by:
Registered person OTHER THAN

Registered person
SUPPLY Other than SUPPLY Inward Supply from

[Sales, Stock transfer, [Job- worker, Sales UNREGISTERED
etc return, etc] PERSON
 Say, an unregistered person supplies

to goods to a registered person and
the movement is caused by
unregistered person?
Registered person  The registered person shall generate
shall generate E- E-way Bill
way Bill
GOODS TRANSPORT AGENCY EXCEPT:

i) Inter-state movement
YES by Principal to Job
Whether Consignment value No requirement to
Issue E –WAY BILL worker
is less than Rs.50,000? ii) Inter-state movement
[but, OPTIONAL]
of HANDICRAFT GOODS
NO [Sec 24(i) & (ii)]
Supplier required to FURNISH

information in PART A and B.
Transportation of goods in Transportation of OTHER Transporter is required
NOTIFIED cases THAN exempted goods GENERATE E-Way BILL for further
transportation
No requirement to To the place of To the

Issue E –WAY BILL transporter consignee place
[but, OPTIONAL]
Distance b/w consignor’s Distance b/w consignor’s Distance b/w consignor’s Distance b/w consignor’s
place to the transporter’s place to the transporter’s place to the transporter’s place to the transporter’s
place is LESS THAN 10 KM place is 10 KMS or more. place is LESS THAN 10 KM place is 10 KMS or more.
Part B – not required Part B - required Part B – not required Part B - required
165
 E-way Bill-A Concept:

Under GST regime, a check will be created by way of e-way bill system. Transporters will have to carry an
electronic waybill or E-Way Bill while carrying goods from one place to another place. All consignors/consignees and
transporters have to be alert on the issue. They should necessarily ensure compliance of the e- way bill system. A
waybill is a physical document that permits movement of goods and since it is obtained electronically this is therefore
named as E-Way bill.
E-way bill is an electronic way bill for movement of goods which is generated on the GSTN Portal. It is
required when a ‘movement’ of goods is of more than Rs 50,000 in value . A registered person can not
move goods without an e-way bill. When an e-way bill is generated a unique e-way bill number (EBN) is
allocated and is available to the supplier, recipient, and the transporter.
Note: E-way bill will also be allowed to be generated or cancelled through SMS. Government of India made E-
WAY RULES as given below:
 Rule 138: E-Way Rules:
SRN Description
1 Every registered person who causes movement of goods of consignment value exceeding fifty thousand
rupees –
i) in relation to a supply; or
ii) for reasons other than supply; or
iii) due to inward supply from an unregistered person,
shall, before commencement of such movement, furnish information relating to the said goods in Part A
of FORM GST EWB-01, electronically, on the common portal.
Provided that where goods are sent by a principal located in one State to a job worker located in any other
State, the e-way bill shall be generated by the principal irrespective of the value of the consignment:
Provided further that where handicraft goods are transported from one State to another by a person who has
been exempted from the requirement of obtaining registration under clauses (i) and (ii) of section 24, the e-
way bill shall be generated by the said person irrespective of the value of the consignment.
2 Where the goods are transported by the registered person as a consignor or the recipient of supply as
the consignee, whether in his own conveyance or a hired one or by railways or by air or by vessel, the said
person or the recipient may generate the e-way bill in FORM GST EWB-01 electronically on the common portal
after furnishing information in Part B of FORM GST EWB-01.
3 W here the e-way bill is not generated under sub-rule (2) and the goods are handed over to a transporter for
transportation by road, the registered person shall furnish the information relating to the transporter in Part B
of FORM GST EWB-01 on the common portal and the e-way bill shall be generated by the transporter on the
said portal on the basis of the information furnished by the registered person in Part A of FORM GST EWB-01:
Provided that the registered person or, as the case may be, the transporter may, at his option, generate and
carry the e-way bill even if the value of the consignment is less than fifty thousand rupees:
166
Provided further that where the movement is caused by an unregistered person either in his own conveyance
or a hired one or through a transporter, he or the transporter may, at their option, generate the e-way bill in
FORM GST EWB-01 on the common portal in the manner specified in this rule:
Provided also that where the goods are transported for a distance of less than ten kilometres within the State
or Union territory from the place of business of the consignor to the place of business of the transporter for
further transportation, the supplier or the transporter may not furnish the details of conveyance in Part B of
FORM GST EWB-01.
Explanation 1.– For the purposes of this sub-rule, where the goods are supplied by an unregistered supplier to
a recipient who is registered, the movement shall be said to be caused by such recipient if the recipient is
known at the time of commencement of the movement of goods.
Explanation 2.– The information in Part A of FORM GST EWB-01 shall be furnished by the consignor or the
recipient of the supply as consignee where the goods are transported by railways or by air or by vessel.
4 Upon generation of the e-way bill on the common portal, a unique e-way bill number (EBN) shall be made
available to the supplier, the recipient and the transporter on the common portal.
5 Any transporter transferring goods from one conveyance to another in the course of transit shall, before such
transfer and further movement of goods, update the details of conveyance in the e-way bill on the common
portal in FORM GST EWB-01:
Provided that where the goods are transported for a distance of less than ten kilometres within the State or
Union territory from the place of business of the transporter finally to the place of business of the consignee,
the details of conveyance may not be updated in the e-way bill.
6 After e-way bill has been generated in accordance with the provisions of sub-rule (1), where multiple
consignments are intended to be transported in one conveyance, the transporter may indicate the serial
number of e-way bills generated in respect of each such consignment electronically on the common portal and
a consolidated e-way bill in FORM GST EWB-02 maybe generated by him on the said common portal prior to
the movement of goods.
7 Where the consignor or the consignee has not generated FORM GST EWB-01 in accordance with the
provisions of sub-rule (1) and the value of goods carried in the conveyance is more than fifty thousand
rupees, the transporter shall generate FORM GST EWB-01 on the basis of invoice or bill of supply or delivery
challan, as the case may be, and may also generate a consolidated e-way bill in FORM GST EWB-02 on the
common portal prior to the movement of goods.
8 The information furnished in Part A of FORM GST EWB-01 shall be made available to the registered
supplier on the common portal who may utilize the same for furnishing details in FORM GSTR-1:
Provided that when the information has been furnished by an unregistered supplier in FORM GST EWB-01, he
shall be informed electronically, if the mobile number or the email is available.
9 Where an e-way bill has been generated under this rule, but goods are either not transported or are not
transported as per the details furnished in the e-way bill, the e-way bill may be cancelled electronically on the
common portal, either directly or through a Facilitation Centre notified by the Commissioner, within 24 hours
of generation of the eway bill:
Provided that an e-way bill cannot be cancelled if it has been verified in transit in accordance with the
167
provisions of rule 138B.
10 An e-way bill or a consolidated e-way bill generated under this rule shall be valid for the period as
Specified
SN Distance Validity period

1 Upto 100 km One day
2 For every 100 km or part thereof thereafter One additional day
Provided that the Commissioner may, by notification, extend the validity period of eway bill for certain
categories of goods as may be specified therein:
Provided further that where, under circumstances of an exceptional nature, the goods cannot be transported
within the validity period of the e-way bill, the transporter may generate another e-way bill after updating the
details in Part B of FORM GSTEWB-01.
Explanation.– For the purposes of this rule, the “relevant date” shall mean the date on which the e-way bill has
been generated and the period of validity shall be counted from the time at which the e-way bill has been
generated and each day shall be counted as twenty four hours.
11 The details of e-way bill generated under sub-rule (1) shall be made available to the recipient, if
registered, on the common portal, who shall communicate his acceptance or rejection of the consignment
covered by the e- way bill.
12 Where the recipient referred to in sub-rule (11) does not communicate his acceptance or rejection within
seventy two hours of the details being made available to him on the common portal, it shall be deemed that
he has accepted the said details.
13 The e-way bill generated under this rule or under rule 138 of the Goods and Services Tax Rules of any
State shall be valid in every State and Union territory.
14 Notwithstanding anything contained in this rule, no e-way bill is required to be generated –

a) where the goods being transported are specified in
b) where the goods are being transported by a non-motorised conveyance;
c) where the goods are being transported from the port, airport, air cargo complex and land customs station
to an inland container depot or a container freight station for clearance by Customs; and
d) in respect of movement of goods within such areas as are notified under clause (d) of sub-rule (14) of rule
138 of the Goods and Services Tax Rules of the concerned State.
Explanation. - The facility of generation and cancellation of e-way bill may also be made available through
SMS.
168
 Rule 138A: Documents and devices to be carried by a person-in-charge of a conveyance:
SRN Description
1 The person in charge of a conveyance shall carry—

a) the invoice or bill of supply or delivery challan, as the case may be; and
b) a copy of the e-way bill or the e-way bill number, either physically or mapped to a Radio Frequency
Identification Device embedded on to the conveyance in such manner as may be notified by the
Commissioner.
2 A registered person may obtain an Invoice Reference Number from the common portal by uploading, on the
said portal, a tax invoice issued by him in FORM GST INV-1 and produce the same for verification by the proper
officer in lieu of the tax invoice and such number shall be valid for a period of thirty days from the date of
uploading.
3 Where the registered person uploads the invoice under sub-rule (2), the information in Part A of FORM GST
EWB-01 shall be auto-populated by the common portal on the basis of the information furnished in FORM GST
INV-1.
4 The Commissioner may, by notification, require a class of transporters to obtain a unique Radio Frequency
Identification Device and get the said device embedded on to the conveyance and map the e-way bill to the
Radio Frequency Identification Deviceprior to the movement of goods.
5 Notwithstanding anything contained clause (b) of sub-rule (1), where circumstances so warrant, the
Commissioner may,by notification, require the person-in-charge of the conveyance to carry the following
documents instead of the e-way bill-
a) tax invoice or bill of supply or bill of entry; or
b) a delivery challan, where the goods are transported for reasons other than by way of supply.
 Section 138B: Verification of documents and conveyances:
SRN Description
1 The Commissioner or an officer empowered by him in this behalf may authorise the proper officer to intercept
any conveyance to verify the e-way bill or the e-way bill number in physical form for all interState and intra-
State movement of goods.
2 The Commissioner shall get Radio Frequency Identification Devicereaders installed at places where the
verification of movement of goods is required to be carried out and verification of movement of vehicles shall
be done through such device readers where the eway bill has been mapped with the said device.
3 The physical verification of conveyances shall be carried out by the proper officer as authorised by the
Commissioner or an officer empowered by him in this behalf:
Provided that on receipt of specific information on evasion of tax, physical verification of a specific conveyance
can also be carried out by any officer after obtaining necessary approval of the Commissioner or an officer
authorised by him in this behalf.
169
 Section 138C: Inspection and verification of goods:
SRN Description
1 A summary report of every inspection of goods in transit shall be recorded online by the proper officer in Part
A of FORM GST EWB-03 within twenty four hours of inspectionand the final report in Part B of FORM GST EWB-
03 shall be recorded within three days of such inspection.
2 Where the physical verification of goods being transported on any conveyance has been done during transit at
one place within theState or in any other State, no further physical verification of the said conveyance shall be
carried out again in the State, unless a specific information relating to evasion of tax is made available
subsequently.
 Section 138D:
Facility for uploading information regarding detention of vehicle.-Where a vehicle has been intercepted and
detained for a period exceeding thirty minutes, the transporter may upload the said information in FORM GST
EWB-04 on the common portal.
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CA.

THE INTEGRATED GOODS AND SERVICES TAX ACT, 2017

1. Short title, extent and commencement:

jftLVªh lañ Mhñ ,yñ—(,u)04@0007@2003—17 REGISTERED NO. DL—(N)04/0007/2003—17

MINISTRY OF LAW AND JUSTICE

THE INTEGRATED GOODS AND SERVICES TAX (EXTENSION TO

2 THE GAZETTE OF INDIA EXTRAORDINARY [PART II— SEC. 1]

DR. G. NARAYANA RAJU,

In this Act, unless the context otherwise requires,––

3 Continuous “Continuous journey” means a journey for which

i) by a single supplier of service or

i) transfer to another conveyance or

6 Export of “Export of services” means the supply of any service when,––

 Supplies outside India which do not constitute export:

3 Services provided to overseas branch would not be eligible as export of

11 Import of ‘‘Import of services” means the supply of any service, where––

(ii) the recipient of service is located in India; and

(iii) the place of supply of service is in India;

14 Location of the “Location of the recipient of services” means,––

15 Location of the “Location of the supplier of services” means,––

Explanation.––For the purposes of this clause, the expression “governmental authority”

(ii) established by any Government,

 includes electronic services such as,––

b) Supply essentially automated and involving minimal human intervention

WEBSITE. Another example is that of legal websites. The various judgements

 VERY IMP NOTE:

5. Levy and Collection:

 Understanding of the Proviso to Section 5(1):

Assessable Value 1,00,000

6. Power to grant exemption from tax:

Supplier (UP) Recipient (UK)

LOS= UP Inter-State Transaction IGST

Supply of Goods/ Services

POS = Daman and Diu

3A) One State & one UT

3B) One State & one UT

Supplier (Bihar) Recipient

shall be treated as a supply of goods in the course of inter-State trade or commerce.

shall be treated as a supply of services in the course of inter-State trade or commerce.

5 Supplier=India Supply of GOODS or SERVICES or BOTH––

 Supply to or by SEZ unit or SEZ developer:

Supply of Goods &/or Services

LOS = UP Intra-State Transaction

Supply of Goods &/or Services

LOS = Chandigarh Intra-State Transaction

(iii) supplies made to a tourist referred to in section 15.

Explanation 1.––For the purposes of this Act, where a person has,––

(i) an establishment in India and any other establishment outside India;

(ii) an establishment in a State or Union territory and any other establishment

then such establishments shall be treated as establishments of distinct persons.

Explanation 2.––A person carrying on a business through a branch or an agency or a

9. Supplies in territorial waters:

Section 10 Section 11 Section 12 Section 13

Movement Bill to Ship to Movement NOT Assembly/ Supply on

 GST a destination based consumption tax??

 Place of supply. Why?

 Bill to Ship to Model:

Mr.Z, J/W or Agent

Mr.Y gave direction to Mr.X to

 Bill to Ship to Model:

Mr.Z, J/W or Agent

Mr.Y gave direction to Mr.X to

Mr.X, Supplier, Mr.Y, Real Purchaser