CHAPTER 1

History
The reform process in indirect tax regime of India was started in 1986 by Vishwanath
Pratap Singh by introduction of Modified Value Added Tax (MODVAT).
Goods and services tax (GST) will subsume various indirect taxes including central
excise duty, services tax, additional customs duty, surcharges, state-level value added
tax and Octroi. Other levies which are currently applicable on inter-state
transportation of goods are also likely to be done away with in GST regime.

The following taxes will be bound together by the GST:

 Central Excise Duty

 Service Tax
 Commercial Tax
 Value Added Tax (VAT)
 Food Tax
 Central Sales Tax (CST)
 Octroi
 Entertainment Tax
 Entry Tax
 Purchase Tax
 Luxury Tax
 Advertisement taxes
 Taxes applicable on lotteries

GST is levied on all transactions such as sale, transfer, purchase, barter, lease, or
import of goods and/or services. India will adopt a dual GST model, meaning that
taxation is administered by both the Union and State Governments which means that
the common people have to suffer a lot. Transactions made within a single state will
be levied with Central GST (CGST) by the Central Government and State GST
(SGST) by the government of that state.

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For inter-state transactions and imported goods or services, an Integrated GST (IGST)
is levied by the Central Government. GST is a consumption based tax, therefore, taxes
are paid to the state which the goods or services are consumed not the state in which
they were produced. IGST complicates tax collection for State Governments by
disabling them to collect the tax owed to them directly from the Central Government.
Under the previous system, a state would have to only deal with a single government
in order to collect tax revenue.

INTRODUCTION

The Constitutional 122nd Amendment Bill, 2014 proposes to introduce one of the
most controversial bills of all the times officially called as The Goods and Services
Tax Bill or GST Bill. GST is a value added tax that is likely to substitute all indirect
taxes imposed on goods and services both by the Central and the State Government
once it is implemented. It is considered as the biggest tax reforms in India that is set
to consolidate the economies of the state and increase the economic growth.

Introduction of Goods and Services Tax (GST) is a step in the reform of indirect
taxation in India. Amalgamating several Central and State taxes into a single tax
would mitigate crusading or double taxation, defoliating a common national market.
The simplicity of the tax should lead to easier administration and enforcement. From
the consumer point of view, the biggest advantage would be in terms of a reduction in
the overall tax burden on goods, which is currently estimated at 25%-30%, free
movement of goods from one state to another without stopping at state borders for
hours for payment of state tax or entry tax and reduction in paperwork to a large
extent.

GST is applied from 1 July 2017

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Effects
The tax rate under GST may be nominal or zero rated for the time it’s charged. It has
been proposed to insulate the revenues of the States from the impact of GST, with the
expectation that in due course, GST will be levied on petroleum and petroleum
products. The central government has assured states of compensation for any revenue
losses incurred by them from the date of introduction of GST for a period of five
years.

Opposition and Controversy

The prime arguments against GST -- aside of the obvious restriction on state's rights
(which isn't really a consideration in the Indian federal system, somehow) -- is the
deprivation of economic benefits for individual states. In pre-GST India, states have
the ability to reduce taxes to spur business, thereby creating a comparative advantage
for themselves; now places like Pondicherry that relied on the ability to create a lower
tax burden to spur business, are affected.
Aside of this, it was seen as a problem that there were zero women on the GST
council. Sanitary napkins being taxed as luxuries and glucose biscuits used by poor
mothers being taxed at 15-18% caused outrage

Legislation
The goods and services tax (GST) council chaired by finance minister Arun Jaitley
has urged states to approve state GST laws by the end of May to smoothen the roll-out
of the historic tax reform by its target date of 1 July.
As India is a federal republic, GST would be implemented concurrently by the central
governments. A 21-member select committee was formed to look into the proposed
GST law.
Section 9 is the charging section for CGST (Central Goods and Services Tax Act,
2017), which gives power to central government to levy tax on intra state taxable
supply.

There will be no GST on the sale and purchase of securities. That will continue to be
governed by Securities Transaction Tax (STT).

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 CHAPTER 2

What is GST?
GST is a comprehensive tax levy on the manufacture, sale and consumption of goods
and services at a national level. Presently, different taxes are levied on goods and
services. With the coming of GST, the difference between goods and services will
narrow down. The central idea is thus to create a single, accommodating and
integrated Indian market to strengthen the economy and making it powerful. The GST
is aimed to increase the GDP of India by one or two percent.
GST is a uniform tax which is levied on both goods and services payable at the final
point of consumption. It is likely to replace the indirect taxes imposed by the Central
and State Governments like central excise duty, service tax, central surcharges and
cesses, state sales tax, VAT, entertainment tax not levied by local bodies, luxury tax,
taxes on lottery, betting and gambling, tax on advertisements and state cesses and
surcharges related to supply of goods and services. These taxes have always suffered
as these taxes have been ineffective and have suffered from infirmities and, therefore,
GST will introduce an effective way of tax imposition process.

GSTN
Goods and Services Tax Network (GSTN) is a nonprofit organization formed to
create a platform for all the concerned parties i.e. stakeholders, government, taxpayers
to collaborate on a single portal. The portal will be accessible to the central
government which will track down every transaction on its end while the taxpayers
will be having a vast service to return file their taxes and maintain the details. The IT
network will be developed by private firms which are being in tie up with the central
government and will be having stakes accordingly. The known authorized capital of
GSTN is ₹10 crore (US$1.6 million) in which Central Government holds 24.5 percent
of shares while the state government holds 24.5 percent and rest with private banking
firms.

Taxes
The GST would replace the following taxes:

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Taxes currently levied and collected by the Centre:
a. Central Excise duty
b. Duties of Excise (Medicinal and Toilet Preparations)
c. Additional Duties of Excise (Goods of Special Importance)
d. Additional Duties of Excise (Textiles and Textile Products)
e. Additional Duties of Customs (commonly known as CVD)
f. Special Additional Duty of Customs (SAD)
g. Service Tax
h. Central Surcharges and Cesses so far as they relate to supply of goods and services

State taxes that would be subsumed under the GST are:

a. State VAT
b. Central Sales Tax
c. Luxury Tax
d. Entry Tax (all forms)
e. Entertainment and Amusement Tax (except when levied by the local bodies)
f. Taxes on advertisements
g. Purchase Tax
h. Taxes on lotteries, betting and gambling
i. State Surcharges and Cesses so far as they relate to supply of goods and services
The GST Council shall make recommendations to the Union and States on the taxes,
cesses and surcharges levied by the Centre, the States and the local bodies which may
be subsumed in the GST.

Run-up to GST
About 6 States have to pass State GST Law which is expected to be done by end of
June 2017.GST Council has scheduled its next meeting on 11 June 2017 to take up
pending matters, including certain representations received on the current schedule of
rates and finalization of pending GST Rules. Government has set up 10 working
groups to iron out sectorial issues faced by trade and industry to ensure smooth
transition to GST. Sectors include banking, telecom, IT/ITES, financial, textile, oil
and gas, gems and jewellery, transport and logistics, and Small and medium
enterprises.

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 CHAPTER 3

GST Rates

Rate classification for goods

Exempted
5%
12%
18%
28%

Fig 1

Exempt 5% 12% 18% 28% 28% +

Cess
Food grains Coal Fruit Juices Capital goods Air Small
Cereals Sugar Vegetable Industrial conditioner cars
Milk Tea & Coffee Juices intermediaries Refrigerators (1% /
Jaggery Drugs & Beverages Hair Oil 3%
Common Salt Medicine containing Soap cess)
Edible Oil milk Toothpaste Luxury
Indian Sweets Bio-gas cars
fuel (15%
Fertilizers cess)

Table 1

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Rate classification for services

Exempt 5% 12%-18% 28%

 Education  Goods  Works contract  Cinema
 Healthcare transport  Business Class tickets
 Residential  Rail tickets air travel  Betting
accommodatio (other than  Telecom  Gambling
n sleeper class) services  Hotel/ Lodges
 Hotel/ Lodges  Economy  Financial with tariff
with tariff class air services above INR
below INR tickets  Restaurant 5000
1000  Cab services
aggregators  Hotel/ Lodges
 Selling space with tariff
for between INR
advertisement 1000 and 5000
s in print
media
Table 2

GST rate on pearls, precious or semi-precious stones, diamonds (other than rough
diamonds), precious metals (like gold and silver), imitation jewellery, coins – 3%
GST rate on rough diamonds – 0.25%

What GST brings with it?

GST is expected to be a destination-based tax that should replace the current Central
taxes and duties such as Excise Duty, Service Tax, Counter Veiling Duty (CVD),
Special Additional Duty of Customs (SAD), central charges and cesses and local state
taxes, i.e., Value Added Tax (VAT), Central Sales Tax (CST), Octroi, Entry Tax,
Purchase Tax, Luxury Tax, state cesses and surcharges and Entertainment tax (other
than the tax levied by the local bodies).

7
It will be a dual levy with State/Union territory GST and Central GST. Moreover,
inter–state supplies would attract an Integrated GST, which would be the sum total of
CGST and SGST/UTGST.

Petroleum products, i.e., petroleum crude, high speed diesel, motor spirit, aviation
turbine fuel, natural gas will be brought under the ambit of GST from such date as
may be notified by the Government on recommendation of the Council. Alcohol for
human consumption has been kept outside the purview of GST.

A well-designed GST in India is expected to simplify and rationalize the current indirect tax
regime, eliminate tax cascading and put the Indian economy on high-growth trajectory. The
proposed GST levy may potentially impact both manufacturing and services sector for the
entire value chain of operations, namely procurement, manufacturing, distribution,
warehousing, sales, and pricing.

SERVICES:-
1. GST 28% TAX

 5-Star Hotels
 Race Club Betting
 Movie Tickets

2. GST 18 % TAX
 Branded Garments
 Ac Hotels With Liquor License
 Telecom Services
 It Services
 Financial Services

3. GST 12% TAX

 Flight Ticket (Business Class

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  Non-Ac Hotels
 Fertilizers
 Work Contracts

4. GST TAX FREE

Economy Hotels
 Hotels And Lodges Below Rs. 1000 Tariff

GOODS:-
1. GST 28% TAX
 Chewing Gum  Cold Crinks
 Chocolates  Paint
 Waffles  Shaving Cream
 Wafers  Deodorants
 Pan Masala  Tiles
 After Shave  Water Heater
 Shampoo  Dishwasher
 Hair Dye  Weighing Machine
 Sunscreen  Washing Machine
 Wallpapers  ATM
 Automobiles  Vacuum Cleaner
 Motorcycles  Shavers Hair Clippers

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 2. GST 18% TAX
 Flavored Sugar  Helmets
 Pasta  Tissues
 Cornflakes  Napkins
 Pastries & Cakes  Envelopes
 Preserved Veggies  Note Books
 Jams & Sauces  Steel Products
 Soups  Printed Circuits
 Instant Food Mixes  Camera
 Ice Cream  Speakers
 Mineral Water  Monitors
 LPG Stoves  Electronic Toys

GST 12% TAX

 Ayurvedic Medicines  Coloring Books
 Tooth Powder  Picture Books
 Agarbatti  Umbrella
 Butter  Sewing Books
 Cheese, Ghee  Cellphones
 Fruit Juices  Feeding Bottles
 Namkeen  Pencil, Sharpner
 Dry Fruits (Packed)  Bicycles
 Animal Fat  Contact Lenses
 Sausage  Utensils
 Frozen Meat  Sport Goods

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 3. GST TAX FREE
Wealthy Home
 Bindi – Sindoor  Fresh Meat
 Stamps  Raw Fish
 Judicial Papers  Raw Chicken
 Printed Books  Eggs
 Newspapers  Fruits – Vegetables
 Glass Bangles  Salt – Butter Milk
 Handloom  Milk – Bread
 Metro Travel  Flour – Besan
 Local Train  Honey – Curd

There are 4 things which are non included in GST, they are :-
1) Petroleum Products viz. petroleum crude, motor spirit (petrol),
high speed diesel, natural gas and aviation turbine fuel.

Petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation
turbine fuel etc. are not attracted GST. However, the taxes for these products are
attracted as per the structure before introduction of GST

2) Electricity.

The category, Electricity has been kept aside under the purview of GST at present.
So, electricity does not fall under GST at present. Hence, GST is not applicable for
electricity. However, the taxes applicable at present for electricity is continued as
before.

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 3) Alcohol for human consumption.

Alcohol for human consumption does not fall under the purview of GST in India at
present. The taxes imposed to alcohol for human consumption are continued as per
the structure before GST implementation.

4) Real Estate.

There are some of recent bills of hotels in which GST is applied :-

Fig 2 Fig 3

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 Fig 4 Fig 5

Fig 6

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 What Is HSN Code Under GST?

What is HSN Code in the first place?

Harmonized System of Nomenclature, or HSN, was conceived and developed by the
World Customs Organization (WCO) with the vision of classifying goods from all
over the World in a systematic and logical manner. It is a six digit uniform code that
classifies more than 5,000 products and is accepted worldwide. These set of defined
rules is used for taxation purposes in identifying the rate of tax applicable to a product
in a country. It is also used to determine the quantum of product exported or imported
in and out of a country. It is a crucial feature to analyze the movement of goods across
the World. It is a combination of different sections, further drilled down to chapters,
which are further classified into headings and sub-headings. The resultant figure is the
six-digit code.

HSN is widespread and is adopted in more than 200 countries, covering a staggering
98% of goods in the World. It is by far, the best logical system of classification and
identification adopted in International Trade. It has helped in reducing efforts and
costs related to complex procedures of International Trade.

HSN in India
Now that we have been through the concept of HSN, we now move on to
understanding HSN from the Indian context.

India is all set to have its very own Goods & Services Tax or GST, which applies to
all goods and services alike. It shall subsume many indirect taxes and reduce the
burden on the end consumer. India has already been using HSN system since 1986 in
the Central Excise and Customs regime. It is a much more detailed classification that
added another two digits to the 6-digit structure. Indian manufacturers under GST
shall be required to follow a 3-tiered structure of HSN.
 Those with a turnover of less than INR 1.5 Crores need not follow HSN
 Those with a turnover exceeding INR 1.5 Crores but less than INR 5 Crores shall be
using the 2 digit HSN codes
 Those with a turnover exceeding INR 5 Crores shall be using the 4 digit HSN codes

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  Those dealers who are into imports or exports shall mandatorily follow the 8 digit
HSN codes

Understanding the digits of HSN Code

The HSN structure contains 21 sections, with 99 Chapters, about 1,244 headings, and
5,224 sub-headings. The commodity’s manufacturing and technological complexity
define the section or chapter to which it belongs. As such, all natural commodities like
vegetables, animal produce, etc. belong to the earlier sections, whereas industrial
machinery is seen at the later stages.

For e.g. – Processed cotton appears later whereas uncombed, normal cotton appears
earlier.
The sections are categorized on a broader perspective. Chapters, on the other hand,
have a much more specific categorisation. Like Section 11 covers all kinds of textiles
and textile articles, whereas Chapter 62, which falls under Section 11 is expressly for
accessories for men and women.

Going further down the chain, chapters have been sub-classified into headings and
sub-headings. The headings focus on specific types of products under the Chapters.
Continuing with the above example, Chapter 62, heading 13 covers all kinds of
handkerchiefs, whereas heading 14 covers scarves and shawls of different types.
These headings have a product attached to it.

In the above example, handkerchiefs made of other textile materials are under the
heading 13 under Chapter 62. The HSN code for the product is 62.13.90, where 90 is
the product code for handkerchiefs made of other textile materials. For a deeper
classification, Indian GST has 2 more digits to these commodities. Where the
handkerchiefs are made from a human-made fibre, then the HSN code becomes
62.13.90.10. Similarly, 62.13.90.90 belongs to handkerchiefs made out of silk or
waste from silk.

When a classification of a product takes places in the above structure, the General
Interpretation Rules have to be applied. The trade parlance of the product must be

15
checked first while classifying the product and not its technological manipulation.
Where the product is classified on the very first level, then there is no need to drill
down further in the strata below.

Service Accounting Codes (SAC)

Similar to the International HSN Codes, India has adopted a Service Accounting Code
(SAC) for all its services. GST will subsume the service tax, which covers all kinds of
services at a national rate of 15%, apart from other rates in some cases. Since GST is
a combination of goods and services both, an equable classification for services is also
required. SAC will remain the same under the GST regime.

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 CHAPTER 4

SALIENT FEATURES OF THE BILL

The Bill makes legislation on the taxation of goods and services a subject of
concurrent list thus empowering both Centre and the State to makes laws on GST.
The Bill provides for a GST Council which will have the discretion to decide the
taxes which will be included in GST; the goods and services subjected to GST, the
rate at which GST will be applicable.
The GST Council has a duty to ensure optimum tax collection for goods and services
by the state and the Centre. The Council will consist of the Union Finance Minister
(as Chairman), the Union Minister of State in charge of revenue or Finance, and the
Minister in charge of Finance or Taxation or any other, nominated by each State
government
The Bill exempts alcohol for human consumption from GST. Also, it empowers GST
Council to decide when GST would be levied on various categories of fuel, including
crude oil and petrol.
The Centre can levy an additional tax of up to 1%, on the on the supply of goods
during trade between states which will go to the States for two years or till when the
GST Council decides.
Parliament may, by law, decide to compensate states for a period of five years for any
revenue loss due to GST.

IMPACT OF THE BILL

The introduction of GST provides for a single comprehensive taxation system for all
goods and services making tax regime more simple and easy. The major advantages
of GSṬ are-
It is assumed that the implementation of GST will boost the Indian economy by
increasing employment opportunities, promoting exports with a gain of $15 billion
every year.

17
In the GST system; taxes will be collected at the time of sale at the manufacturing
cost. This means that the individuals will now consume the goods at a reduced price.
Thus, it will certainly reduce the tax burden for consumers.
GST will lead to easy, transparent and simple tax structure by integrating all indirect
taxes on goods and services into single GST. This will result in uniformity in tax rates
thereby making the administration of tax structure more efficient.

Impact of GST on Service Providers

As of March 2014, there were 12, 76,861 service tax assessees in the country out of
which only the top 50 paid more than 50% of the tax collected nationwide. Most of
the tax burden is borne by domains such as IT services, telecommunication services,
Insurance industry, business support services, Banking and Financial services etc.
These pan-India businesses already work in a unified market, and while they will see
compliance burden becoming lesser there will apparently not be much change in the
way they function even after GST implementation.

Sector-wise Impact Analysis

Logistics
In a vast country like India, the logistics sector forms the backbone of the economy.
We can fairly assume that a well organized and mature logistics industry has the
potential to leapfrog the “Make In India” initiative of the Government of India to its
desired position.

E-com
The e-com sector in India has been growing by leaps and bounds. In many ways, GST
will help the e-com sector’s continued growth but the long-term effects will be
particularly interesting because the model GST law specifically proposes a tax
collection at source (TCS) mechanism, which e-com companies are not too happy

18
with. The current rate of TCS is at 1% and it’ll remain to be seen if it dilutes the rapid
boom in this sector in any way in the future.

Pharma
On the whole, GST is expected to benefit the pharma and healthcare industries. It will
create a level playing field for generic drug makers, boost medical tourism and
simplify the tax structure. If there is any concern whatsoever, then it relates to the
pricing structure (as per latest news). The pharma sector is hoping for a tax respite as
it will make affordable healthcare easier to access by all.

Telecommunications
In the telecom sector, prices are expected to come down after GST. Manufacturers
will save on costs through efficient management of inventory and by consolidating
their warehouses. Handset manufacturers will find it easier to sell their equipment as
GST will negate the need to set up state-specific entities, and transfer stocks. The will
also save up on logistics costs.

Textile
The Indian textile industry provides employment to a large number of skilled and
unskilled workers in the country. It contributes about 10% of the total annual export,
and this value is likely to increase under GST. GST would affect the cotton value
chain of the textile industry which is chosen by most small medium enterprises as it
currently attracts zero central excise duty (under optional route).

Real Estate
The real estate sector is one of the most pivotal sectors of the Indian economy,
playing an important role in employment generation in India.The probable impact of
GST on the real estate sector cannot be fully assessed as it largely depends on the tax
rates. However, it is a given that the sector will see substantial benefits from GST
implementation, as it will bring to the industry much required transparency and
accountability.

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Agriculture
Agricultural sector is the largest contributing sector the overall Indian GDP. It covers
around 16% of Indian GDP. One of the major issues faced by the agricultural sector,
is transportation of agri products across state lines all over India. It is highly probable
that GST will resolve the issue of transportation. GST may provide India with its first
National Market for the agricultural goods. However, there are a lot of clarifications
which need to be provided for rates for agricultural products.

FMCG
The FMCG sector could see significant savings in logistics and distribution costs as
the GST will eliminate the need for multiple sales depots. The GST rate for this sector
is expected to be around 17% which is way lesser than the 24-25% tax rate paid
currently by FMCG companies. This includes excise duty, VAT and entry tax – all of
which will be subsumed by GST.

Freelancers
Freelancing in India is still a nascent industry and the rules and regulations for this
chaotic industry are still up in the air. But with GST, it will become much easier for
freelancers to file their taxes as they can easily do it online. They will be taxed as
service providers, and the new tax structure will bring about coherence and
accountability in this sector.

Automobiles
The automobile industry in India is a vast business producing a large number of cars
annually, fueled mostly by the huge population of the country. Under the current tax
system, there are several taxes applicable on this sector like excise, VAT, sales tax,
road tax, motor vehicle tax, registration duty which will be subsumed by GST.
Though there is still some ambiguity due to tax rates and incentives/exemptions
provided by different states to the manufacturers/dealers for manufacturing
car/bus/bike, the future of the industry looks rosy.

20
Startups
With increased limits for registration, a DIY compliance model, tax credit on
purchases, and a free flow of goods and services, the GST regime truly augurs well
for the Indian startup scene. Currently, many Indian states have very different VAT
laws which can be confusing for companies that have a pan-India presence, specially
the e-com sector. All of this is expected to change under GST with the only sore point
being the reduction in the excise limit.

BFSI
Among the services provided by Banks and NBFCs, financial services such as fund
based, fee-based and insurance services will see major shifts from the current
scenario. Owing to the nature and volume of operations provided by banks and NBFC
vis a vis lease transactions, hire purchase, related to actionable claims, fund and non-
fund based services etc., GST compliance will be quite difficult to implement in these
sectors.

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 CHAPTER 5

Ernst & Young Advantage

Policy advocacy

EY has been closely involved with the GST initiative through its Policy Advisory
Group - it comprises a specialized team of experienced professionals, including
former government officials who advise businesses as well as governments on diverse
policy issues. The Group has diverse VAT and GST experience through extensive
interactions with both the Centre and the State Governments in India and overseas
engagements in various jurisdictions.

EY Policy Advisory Group helps businesses anticipate policy changes, assess their
impact on their operations, and engage in a constructive dialog with relevant
authorities for remedial measures to address any concerns. Our Policy Advocacy
group includes:

Satya Poddar
Tax Partner – Policy Advisory Group;
Recognized as global thought leader on GST

V S Krishnan
Advisor, Tax Policy group;
Former Member (Service Tax & GST), CBEC, and member of the
GST core group

Venkatesh Narayan
Executive Director, Tax & Regulatory Services;
Architect of IT initiatives in CBEC; initiated the GSTN, pilot project
with NSDL & IT readiness survey in states

22
 Prakash Jayaram
Partner, Advisory;
Former Program Director for the project for designing and
implementing the Goods and Services Tax system and network for
the GoI

Global experience and network strength

EY has global expertise in delivering large transformation programs that includes a
proven deployment approach, change management and PMO structure. EY also
brings global experience in successfully delivering GST implementations, with
market leading companies utilizing proven change management techniques.
EY’s transformation methodology leverages best practices, introduces innovation and
builds a clear manageable roadmap.

Integrated approach
GST is an organisation-wide transformational change that will impact the entire value
chain of operations, including procurement, manufacturing, distribution, warehousing,
sales and pricing.

EY has subject matter experts in goods and service tax, accounting, supply chain,
project management, and IT across sectors providing thought leadership and advice
on GST best practices. Our multi competency teams from Tax and Advisory with
expertise on accounting standards/ principles, sector and functional understanding will
facilitate companies to comply with statutory changes, while supporting in process
readiness.

Our Tax and Advisory GST team is led by:

Harishanker Subramaniam
National Leader – Indirect Tax Services

23
 Neel Goyal
Partner – Advisory Services

Technology edge
EY has developed a Proprietary Tool - ‘GST Navigator’ to assess and simulate
business impact in the GST environment. It focusses on taxes payable, credits, pricing
and margin impact and cash flow considerations. This will drive key business
decisions on operating model changes required to optimize tax outcomes.

Benefits of GST
GST has been envisaged as a more efficient tax system, neutral in its application and
attractive in distribution. The advantages of GST are:
 Wider tax base, necessary for lowering the tax rates and eliminating
classification disputes
 Elimination of multiplicity of taxes and their cascading effects
 Rationalization of tax structure and simplification of compliance procedures
 Harmonization of center and State tax administrations, which would reduce
duplication and compliance costs
 Automation of compliance procedures to reduce errors and increase efficiency

Destination principle
The GST structure would follow the destination principle. Accordingly, imports
would be subject to GST, while exports would be zero-rated. In the case of inter-State
transactions within India, the State tax would apply in the State of destination as
opposed to that of origin.

24
Taxes to be subsumed
GST would replace most indirect taxes currently in place such as:

Central Taxes State Taxes

 Central Excise Duty [including additional

 Value Added Tax
excise duties, excise duty under the
 Octroi and Entry Tax
Medicinal and Toilet Preparations (Excise
 Purchase Tax
Duties) Act, 1955]
 Luxury Tax
 Service tax
 Taxes on lottery, betting &
 Additional Customs Duty (CVD)
gambling
 Special Additional Duty of Customs
 State cesses and surcharges
(SAD)
 Entertainment tax (other than the
 Central Sales Tax ( levied by the Centre
tax levied by the local bodies)
and collected by the States)
 Central Sales Tax ( levied by the
 Central surcharges and cesses ( relating to
Centre and collected by the States)
supply of goods and services)

Table 3

25
 CHAPTER 6
Report of the Joint Committee on Business Processes for GST
on Registration Processes in GST Regime

1.1. Registration under Goods and Service Tax (GST) regime will confer following
advantages to the business:
X Legally recognized as supplier of goods or services.
X Proper accounting of taxes paid on the input goods or services which can be
utilized for payment of GST due on supply of goods or services or both by the
business.
X Pass on the credit of the taxes paid on the goods or services supplied to
purchasers or recipients.

2.1 The business process proposed in this document is based on the following
assumptions:
(1) A legal person without GST registration can neither collect GST from his customers
nor claim any input tax credit of GST paid by him.

(2) There will be a threshold of Gross Annual Turnover including exports and exempted
supplies (to be calculated on all-India basis1) below which any person engaged in supply of
Goods or Services or both will not be required to take registration. Once a dealer crosses the
required threshold or he starts a new business, registration application must be filed within 30
days from the date of the dealers liability for obtaining such registration. Effective date of
registration would be the date of application in all cases i.e. whether the application has been
filed within prescribed time limit of 30 days or otherwise. The taxpayer would be eligible for
ITC in respect of all his purchases from the date of application in case application for
registration has been filed within 30 days. The taxpayer would, however, not be eligible for
ITC in respect of his purchases prior to the date of registration in case the registration
application is not filed within the prescribed time limit of 30 days, although Centre is of the
view that such a provision may not stand the test of judicial scrutiny. On the other hand
States, based on their experience under VAT, were of the view that having relevant provision
in the GST law has helped them contest cases in courts. GST Law Drafting Committee to
make provision relating to eligibility for ITC accordingly as well as for levying penalty
in case of a dealer failing to register within the stipulated time period.

26
(3) However, such person with all-India gross annual turnover below the threshold
turnover would be allowed to take registration, if he wants to. By taking such
voluntary registration he can enter the credit chain even prior to crossing the threshold
limit, provided he does not opt for the Compounding scheme

(4) There will be another relatively higher threshold of Gross Annual Turnover (to be
calculated on all-India basis) to be called Compounding turnover up to which the registered
person can opt to pay tax at a specified percentage of the turnover, without entering the credit
chain. Such registered person will neither be allowed to collect tax from his customers nor
claim any input tax credit. Compounding dealers shall remain under compounding scheme till
their turnover crosses threshold or they opt for out of the scheme. Such dealers don’t have to
apply every year to remain under the compounding scheme. However, if the compounding
dealer opts out of compounding in a financial year, for any reason, but eligible and wish to
avail compounding in the next financial year, such dealer will have to apply afresh for
compounding in the beginning of the financial year in which he wishes to claim compounding
scheme.

(5) All other taxable persons will be required to take GST registration. Such persons
will be able to take the credit of taxes paid on inputs / input services / capital goods and pass
on the credit of GST to his customers / recipients of goods or services or both.

(6) The registered person eligible for the Compounding scheme but opting against the
Compounding can pay regular taxes and file tax returns on monthly basis, and thereby make
his supplies eligible for input tax credit in the hands of the purchasers/recipients.

(7) Irrespective of turnover, if a taxable person carries out any inter-state supply and / or
is liable to pay GST under reverse charge, he will be compulsorily required to take
registration. Such person shall neither be eligible for exemption threshold nor for
Compounding scheme. However, an individual importing services for personal
consumption will not be liable to pay GST under reverse charge or register under GST
if the GST law so provides.

(8) All UN bodies seeking to claim refund of taxes paid by them would be required to
obtain a unique identification number (ID) from the GST portal. The structure of the said ID
would be uniform across the States in uniformity with GSTIN structure and the same will be

27
common for the Centre and the States. The supplier supplying to these organizations is
expected to mention the UID on the invoices and treat such supplies as B2B supplies and the
invoices of the same will be uploaded by the supplier.

(9) A unique identification number (ID) would be given by the respective state tax
authorities through GST portal to Government authorities / PSUs not making outwards
supplies of GST goods (and thus not liable to obtain GST registration) but are making
inter-state purchases. The structure of the said ID would be uniform across the States in
uniformity with GSTIN structure. The supplier supplying to these organizations is expected to
mention the UID on the invoices and treat such supplies as B2B supplies and the invoices of
the same will be uploaded by the supplier.

(10) The concept of Input Service Distributor (ISD) presently being followed in
Centre’s Law may continue if the GST Law so provides. They would be required to obtain
GSTIN for distributing the credit of GST paid on services proposed to be used at multiple
locations which are separately registered. This would be an exception/ deviation in case of
services only. GST Law Drafting Committee to make appropriate provisions for the
same.

(11) All existing registered persons, whether with the Centre or State under any of the
tax statues being subsumed in GST, would be allotted a GST registration number
called Goods and Services Tax Identification Number (GSTIN) on voluntary basis.
Dealers who are below the GST threshold will have option to remain in GST chain.
GST Law Drafting Committee to make appropriate provision.

(12) Tax authorities, in case of enforcement cases, may grant suo-moto registration. If
such person does not have PAN, the registration would be initially temporary and
later converted into a PAN based registration. [GSTN to develop temporary
registration numbering system]

2.2 For each State the taxable person will have to take a separate registration, even
though the taxable person may be supplying goods or services or both from more than
one State as a single legal entity.

28
2.3Multiple registrations within one State to business verticals [as defined in Accounting
Standard (AS) 17 issued by ICAI] of a taxable person may also be permitted, subject to all the
verticals being on the same scheme of tax treatment if the GST Law so provides.

2.4 A supplier who is not registered on regular basis, whether on mandatory or

voluntary basis, in other State (s) and desires to conduct business in a particular State
for a limited period, will have to obtain registration in that State for that limited
period. Such suppliers are known as casual dealers and shall not be allowed to opt for
composition scheme. However, the supplier would be eligible to claim ITC on
purchases / inward supplies. The period of registration would be mentioned in the
registration certificate also. The format of Registration Certificate for such taxpayers
is different from the regular taxpayers. Even the application form for registration will
have field for ascertaining estimated supplies. Return for such taxpayers would also
be different. Such taxpayers would be required to self-assess their likely liability and
deposit the same as an Advance Tax. Such amount would be deposited by way of two
Demand Drafts (one for Centre and other for State) which would be returned to the
taxpayer after he has discharged his final liability. The GST Law Drafting
Committee may provide for conditions for registration and tax payment.

2.5 A Non-resident Supplier is a person who, in the course of business, makes an intra-state
supply of goods or services or both, but is not a resident in the state in which he has applied
for registration, but is already registered in any other state. Since the Non-Resident Supplier is
already registered in another State, there would be an easy way of registering such entities in
the State in which registration is applied as Non-Resident Supplier. The provisions applicable
on casual dealers (as detailed in para 2.4 above) may apply to them except that no security
deposit or advance tax collection may be made in their case.

3.0 Structure of registration number

3.1 Each taxpayer will be allotted a State wise PAN-based 15-digit Goods and
Services Taxpayer Identification Number (GSTIN).

3.2 Various digits in GSTIN will denote the following:

29
State PAN Entity BLANK Check
Code Code Digit

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

3.3 In the GSTIN, the State Code as defined under the Indian Census 2011 would be
adopted. In terms of the Indian Census 2011, each State has been allotted a unique two digit
code e.g. „09. For the State of Uttar Pradesh and „27. for the State of Maharashtra.

3.4 13th digit would be alpha-numeric (1-9 and then A-Z) and would be assigned depending
on the number of registrations a legal entity (having the same PAN) has within one State. For
example, a legal entity with single registration within a State would have „1. as 13th digit of
the GSTIN. If the same legal entity goes for a second registration for a second business
vertical in the same State, the 13th digit of GSTIN assigned to this second entity would be
„2..This way 35 business verticals of the same legal entity can be registered within a State.

3.5 14th digit of GSTIN would be kept BLANK for future use.

3.6 In GST regime, multiple registrations within a State for business verticals of
a taxable person would be allowed. This provision should be subject to
following specific stipulations –

(1) Input Tax Credit across the business verticals of such taxable persons shall not be
allowed unless the goods or services are actually supplied across the verticals.

(2) For the purpose of recovery of dues, all business verticals, though separately
registered, will be considered as a single legal entity. (Final view needs to be taken
by the GST Law drafting committee)

3.7 Switching over from Compounding scheme to Normal scheme and vice-versa would be
dealt in the manner described below –

(1) Any existing taxpayer not under Compounding scheme may opt for Compounding

30
scheme, if eligible, only from the beginning of the next Financial Year. The
application will have to be filed on or before 31st March of the previous year so that
Returns can be filed accordingly.

(2) Compounding dealer may be allowed to switch over to Normal scheme even
during the year if they so want, with a condition that they cannot switch over to
Compounding scheme again during the same financial year.

(3) Any existing taxpayer under the Compounding scheme upon crossing the
Compounding threshold will be switched over to the Normal scheme automatically
from the day following the day of crossing the Compounding threshold. GST Law
drafting committee should provide for a suitable time-period of inputs and
capital goods purchases on which ITC would be permitted at the time of
switching over to Normal scheme.

(4) For the changes covered by (1) to (3) above, the validation in the return module
should change automatically under intimation to the concerned taxpayer and both the
tax authorities. A suitable validation / dependency of the return module should be
established.

The above changes should also be published on the common portal in addition to
being intimated to other taxpayers who have identified such taxpayer as their counter-
party taxpayer.

4.0 Procedure for obtaining Registration

4.1 For obtaining registration, all the taxable persons shall interact with tax
authorities through a common portal called GST Common Portal2 that would be set up
by Goods and Services Tax Network (GSTN). The portal will have backend
integration with the respective IT systems of the Centre and States.

4.2 The procedure prescribed in para 6.0 below is meant for new applicants. The
procedure for migration of existing registrants either with the Centre or State or both
is dealt in para 7.0 below.

31
4.3 A new applicant would be allowed to apply for registration without prior enrollment.
Once a complete application is submitted online, a message asking for confirmation will be
sent through email and SMS to the authorized signatory of the applicant. On receipt of such
confirmation from the authorized signatory, Acknowledgement Number would be generated
and intimated to the applicant. Once the application is approved and GSTIN is generated, the
same along with Log-in ID and temporary Password will be sent to the authorized signatory.
This credential will be permanently used to access the GST Common Portal subsequently.
Provision for capturing e-mail and Mobile Number of authorized representative of the
taxpayer has also been incorporated in the proposed GST Registration Form. It would be the
responsibility of the taxpayer to keep this information updated.

4.4 Online verification of PAN of the Business / Sole Proprietor/ Partner/Karta/Managing

Director and whole time directors/Member of Managing Committee of Association,
Managing trustee/authorized signatory etc. of the business would be mandatory and without
such verification, registration application will not be allowed to be submitted.

5.0 Facilitation Center and Tax Return Preparer Scheme

5.1 In order to cater to the needs of taxpayers who are not IT savvy, following
facilities shall be made available:-

5.2 Tax Return Preparer (TRP): A taxable person may prepare his registration application /
returns himself or can approach the TRP for assistance. TRP will prepare the said registration
document / return in prescribed format on the basis of the information furnished to him by the
taxable person. The legal responsibility of the correctness of information contained in the
forms prepared by the TRP will rest with the taxable person only and the TRP shall not be
liable for any errors or incorrect information. If so provided in the GST law, TRPs would
be approved by the tax administration of the Centre and the States and will also be
provided appropriate training by them, as per common curriculum to be devised by EC/
GST Council.

5.3 Facilitation Centre (FC) shall be responsible for the digitization and / or uploading of
the forms and documents including summary sheet duly signed by the Authorized Signatory
and given to it by the taxable person. After uploading the data on common portal using the
ID and Password of FC, a print-out of acknowledgement will be taken and signed by the FC
and handed over to the taxable person for his records. The FC will scan and upload the

32
summary sheet duly signed by the Authorized Signatory. This is the system in vogue for
submitting TDS returns by more than 2 million tax deductors to the Income Tax Department.

5.4 Registration of TRP/FC is recommended. Final view may be taken by the

GST Law drafting committee on the same.

6.0 New Applicants

6.1 The process highlighted in the paragraphs below is applicable for new applicants
for registration, both mandatory and voluntary.

6.2 New applicant can apply for registration:

(1) at the GST Common Portal direct ly; or

(2) at the GST Common Portal through the Facilitation Center (FC)

Multiple applications can be filed at one go where a taxable person seeks

registration in more than one State or for more than one business vertical located in
a single / multiple State(s).

6.3Following scanned documents are required to be filed along with the application
for Registration –

Relevant Box No. in the Document required to be Reason for requirement

Registration Form
2. Constitution of Business
uploaded
1) Partnership Deed in In case of Companies,
case GSTN would strive for
of Partnership Firm ; online verification of
Company Identification
2) Registration Certificate Number (CIN) from
in MCA21.
case of other businesses
like Society, Trust etc. Constitution of business /
which are not captured in applicant as per PAN

33

11. Details of the Principal
Place of business
PAN.
1) In case of Own premises
– any document in support of
the ownership of
the possession
premises like Latest Tax Paid
Receipt
or Municipal Khata copy or
Electricity Bill copy.
2) In case of Rented or
Leased premises – a copy
of the valid Rent / Lease
Agreement with
document in support of
the ownership of the
premises of the Lessor
like Latest Tax Paid
Receipt or Municipal
Khata copy or Electricity
Bill copy
Signatory
In case of premises
obtained from others,
other than by way of
Lease or Rent – a copy of
would
be taken except for
businesses such as Society,
Trust etc. which are not
captured in PAN.
Partnership Deed would be
required to be submitted in
case of Partnership Firms.
This is required as an
evidence to show
of business premises. If the
documentary evidence in
Rent Agreement or
Consent
letter shows that the Lessor
is different from that
any shown
in the document produced
in
support of the ownership
of
the property, then the case
must be flagged as a “Risk
Case”, warranting a post
registration visit for
verification. GST Law
Drafting Committee may
add penalty provision for
providing wrong lease
details.
34
 the Consent Letter with
any document in support
of the ownership of the
premises of the Consenter
like Municipal Khata
copy or Electricity Bill
copy

4) Customer ID or account

ID of the owner of the

property in the record of
electricity providing
company, wherever
available should be
sought for address
verification.

12. Details of Bank Opening page of the Bank This is required for all the
Account Passbook held in the name bank accounts through
(s) of the Proprietor / which the taxpayer would
Business be
Concern – containing the conducting business.
Account No., Name of the
Account Holder, MICR
and
IFS Codes and Branch
Details
17. Details of Authorised For each Authorised This is required to verify
Signatory Signatory: whether the person signing
1) Letter of Authorisation or as Authorised Signatory is
copy of Resolution of the
Managing Committee or
duly empowered to do so.
Board of Directors to that

35
 effect

Photograph 1) Proprietary Concern – Proprietor

2) Partnership Firm / LLP – Managing/ Authorized Partners
(personal details of all partners is to be
submitted but photos of only ten partners including that
of Managing Partner is to be submitted)
within a State;
3) HUF – Karta

4) Company – Managing Director or the Authorised

Person
5) Trust – Managing Trustee
6) Association of Person or Body of Individual –Members
of Managing Committee (personal details of all
members is to be submitted but photos of only ten
members including that of Chairman is to be submitted)
7) Local Body – CEO or his equivalent
8) Statutory Body – CEO or his equivalent
8) Others – Person in Charge
Table 5

6.3.1 For Field No 16 (i.e. Details of Proprietor / all partners / Karta / Managing Director and
whole-time Director / Members of the Managing Committee of Association of Persons /
Board of Trustees etc.) and Field No 17 (i.e. Details of the Authorized Signatory), verification
of PAN with CBDT database and GSTN database will be carried out online before the
submitted application is sent to the State/ Centre. In case of mismatch the applicant will be
given an opportunity to correct the same.

(Satish Chandra) (Rashmi Verma)

Member Secretary Additional Secretary
Empowered Committee Department of Revenue
of State Finance Government of India
Ministers
36
 CHAPTER 7
Form GST
Application for Registration under Goods and Services Tax Act, Year
1 Legal Name Of Business*
1 (A) Trade Name (Optional)

2 Constitution of Business (Please Select the Appropriate)*

Proprietorship Partnership

Hindu Undivided Private Limited Company

Family
Public Limited Society/Club/Trust/Association Of
Company Persons
Government Public Sector Undertaking
Department
Unlimited Company LLP‟S

Local Authority Statutory Body

Others (Please
Specify)

In case of Proprietorship*
3 Name of
Proprietor
4 PAN of the
proprietor

In case of other Businesses*

4A PAN of the
Business

5 Name of the State and its Drop down for Name of State & Codes
Code*

37
6 Option For Composition Yes No

7 Date of commencement of business D D M M Y Y Y Y

8 Date on which liability to pay tax D D M M Y Y Y Y

arises
9 Estimated supplies (in case of casual
dealers)
Period for which registration is
required –
From
To

10 Reason of liability to obtain

registration (from
the dropdown)

(1) Due to crossing the Threshold

(2) Due to inter-State supply
(3) Due to liability to pay as recipient of services
(4) Due to being Input Service Distributor (ISD)
(5) UN bodies for allotment of Unique Identification Number (ID)
(6) Due to transfer of Business which includes change in the ownership of
business (if transferee is not a registered entity)
(7) Due to death of the Proprietor (if the successor is not a registered entity)
(8) Due to de-merger
(9) Due to change in constitution of business
(10) Due to Merger /Amalgamation of two or more registered taxpayers
(11) Being casual Dealer
(12) Being Non resident Dealer
(13) None of the above – on voluntary basis

38
11 Indicate Existing Registrations
Yes/No Registration Details
Central Excise
Service Tax
State VAT Registration (TIN)
CST Registration No
IEC No.(Importer Exporter Code
Number )
Corporate Identity Number (CIN)
GSTIN

12 Details of Principal Place of Business*

ADDRESS
Building No/Flat No/Door No Floor No
Name of the Premises/Building Road/Street/Lane
Locality/Area/Village District/Town/City
Latitude (optional) Longitude (optional)
PIN Code
CONTACT DETAILS
Telephone number Fax Number
Mobile Number
Email Address
Nature of possession of premises
Owned Leased Rented Consent Shared

Please Tick the Nature of Business Activity being carried out at above mentioned
Premises
Factory / Wholesale Business Retail Business
Manufacturing
Warehouse/Deport Bonded Warehouse Service Provision
Office/Sale Office Leasing Business Service Recipient
EOU/ STP/ EHTP SEZ Input Service

39
 Distributor (ISD)
Works Contract

13. Details of Bank Accounts (s)

Total number of Bank Accounts maintained by the applicant
for conducting
Business

Details of Bank Account 1

Account Number
Type of Account IFSC
Name of the Bank
Branch and Address To be auto-populated (Edit mode)
of the
Bank & Branch
PIN Code State

Details of Bank Account 2

Account Number
Type of Account IFSC
Name of the Bank
Branch and Address To be auto-populated (Edit mode)
of the
Bank & Branch
PIN Code State

14 Details of the Goods/Commodities supplied by the Business

Please specify top 5 Commodities
Sr.No. Description of Goods HSN Code (4 digit code)
1
2
3
4

40
5

15 Details of Services supplied by the Business.

Please specify top 5 Commodities
Sr.No. Description of Goods Service Accounting Code
1
2
3
4
5

16 Details of Additional Place of Business

Number of additional places

Premises 1
Details of Additional Place of Business
ADDRESS
Building No/Flat No/Door Floor No
No
Name of the Road/Street/Lane
Premises/Building
Locality/Area/Village District/Town/City
Latitude (optional) Longitude (optional)
PIN Code
CONTACT DETAILS
Telephone number Fax Number
Mobile Number
Email Address
Nature of possession of premises
Owned Leased Rented Consent Shared

Please Tick the Nature of Business Activity being carried out at above mentioned

41
Premises
Factory / Wholesale Business Retail Business
Manufacturing
Warehouse/Deport Bonded Warehouse Service Provision
Office/Sale Office Leasing Business Service Recipient
EOU/ STP/ EHTP SEZ Input Service
Distributor (ISD)
Works Contract

17 Details of Proprietor/all Partners/Karta/Managing Directors and whole time

Director/Members of
Managing Committee of Associations/Board of Trustees etc. *

Total Number of Persons

Please provide details in the table below. In case you need more tables, click on add
table
1. In case of Proprietorship: Details of Owner/Proprietor

2. In case of Partnership: Details of all Managing/ Authorized Partners

(personal details of all partners but photos of only ten partners including that
of Managing Partner is to be submitted)

3. In case of Companies registered under Companies Act: Managing Director

and whole time directors

4. In case of HUF: Details of Karta of HUF

5. In case of Trust: Details of Managing Trustee

6. In case of Association of Persons: Details of Members of Managing

Committee(personal details of all members but photos of only ten members
including that of Chairman is to be submitted)

42
 7. In case of Local Authority: Details of CEO or equivalent

8. In case of Statutory Body: Details of CEO or equivalent

9. In case of others: Details of person responsible for day to day affairs of the
business
First Name Middle Name Surname
Name of the person
Name of
father/husband
Designation Date of bith d d m m y y y y

PAN
Passport No (in case
of foreigners)
UID No.
DIN No. (if any)

Mobile Number
Email address Gender M F
Telephone No. FAX No

Residential Address
Building No/Flat Floor No
No/Door No
Name of the Road/Street/Lane
Premises/Building
Locality/Area/Village District/Town/City
PIN Code State

18 Details of Authorized Signatory

Number of Authorized Signatory

43
Details of Signatory No. 1
First Name Middle Name Surname
Name of the person
Name of
father/husband
Designation Date of bith d d m m y y y y

PAN
Passport No (in case
of foreigners)
UID No.
DIN No. (if any)

Mobile Number
Email address Gender M F
Telephone No. FAX No

Residential Address
Building No/Flat Floor No
No/Door No
Name of the Road/Street/Lane
Premises/Building
Locality/Area/Village District/Town/City
PIN Code State

19 Details of Authorized Representative (TRP / CA / Advocate etc.)

First name Middle name Surname
Name of person
Status TRP / CA / Advocate etc.
Mobile Number
E-mail address
Telephone No Fax

44
 No

20 State Specific Information

a. Field 1
b. Field 2
c. ….
d. …..
e. Field n

21 Document Upload
A customized list of documents required to be uploaded (as detailed in para
6.3 of the process
document) as per the field values in the form should be auto-populated with
provision to upload
relevant document against each entry in the list.

22 Verification
I hereby solemnly affirm and declare that the information given herein above is true
and correct to the best of my knowledge and belief and nothing has been concealed
therefrom

Place …………………….
Name of Authorized Signatory ….……………………
Date …………………….
Designation …………………………….

45
Form GST –

Application for Surrender of Registration under Goods and Services Tax Act,
Year
Please file your tax return for the tax period in which the effective date of
cancellation of your
registration falls before applying for cancellation.Filed no. 2 to 5 would get auto
populated on the
basis of information mentioned in filed no. 1.

1. GSTIN

2. Full Name of Registrant

3. Trade Name, if any
4. Address of Principal
Place of Business
5. Address for
correspondence
(e-mail, mobile, landline
etc.)

6.Reason for Surrender 40

business

proprietor
reason)
liable to pay tax

46
(Note: In case of death of Sole Proprietor application will have to be made by the
legal heir / successor manually before the concerned tax authorities)
7.In case of amalgamation or merger,
provide particulars of registration in
which
merged, amalgamated etc.
(i) GSTIN
(ii) Name
(iii) Principal Place of Business

(The new entity in which the applicant proposes to amalgamate itself must be
registered with the tax authority before the filing of the surrender application. This
application can only be made after that.)
8. Date from which registration
under -----Act, 20-- is to be Day Month year
surrendered

9. Amount of GST payable in Turnover Tax

respect of goods / capital goods CGST SGST
held on the date of surrender of
registration (Rs.)

10. Details of amount of i) Date of

GST paid as calculated at deposit Day Month year
9 above. (This needs to be ii) Challan No.
amended in view of (iii) Name of
maintenance of ITC / Bank & Branch
Cash Ledger)

11. Verification
(i) I/We ________________________ hereby solemnly affirm and declare that the
information given hereinabove is true and correct to the best of my/our knowledge
and belief and nothing has been concealed there from.

47
(ii) I/We undertake to discharge any tax liability which is found to be payable
subsequent to the
surrender of registration and the tax authorities shall be free to take any action as
prescribed in the law.
Signature of Authorised Signatory
Full Name
Designation/Status

Place

Date
Day Month Year

48
 CHAPTER 8

Selling within the state

Suppose a manufacturer in Pune sells goods to dealer in Nasik worth Rs 10,000. The
GST rate is 18% comprising of CGST rate of 9% and SGST rate of 9%. The tax
collected is Rs. 1800; Rs. 900 will go to the central government and Rs. 900 will go to
the Maharashtra government. Now the dealer sells the goods to customers in Mumbai
for Rs 15,000. Here again CGST at 9% and SGST at 9% will be levied. The sale price
increases and so does the tax liability. In case of resale, the credit of input CGST (Rs
900) and input SGST (Rs900) is claimed as shown, and the remaining taxes go to the
respective governments.

Fig 8

49
Selling within the state and then outside the state
Suppose a manufacturer in Pune sells goods to dealer in Nasik worth Rs 10,000. The GST
rate is 18% comprising of CGST rate of 9% and SGST rate of 9%, in such case, the tax
collected is Rs. 1800 - Rs. 900 will go to the central government and Rs. 900 will go to the
Maharashtra government. Now the dealer sells the goods to customers in Bangalore for Rs
15,000. The applicable GST now will be IGST – at 18% (IGST will be the sum of CGST and
SGST) this will work out to Rs 2700. But the dealer will be able to take the input tax credit –
CGST (to the tune of Rs 900) and SGST (to the tune of Rs 900).
Against IGST, both the input taxes are taken as credit. But we see that although SGST never
went to the central government, the credit is still claimed. This is the crux of GST. Since this
amounts to a loss to the Central Government, the state government compensates by
transferring the credit to Central Government.

Fig 9

50
Suppose a manufacturer in Pune sells to a dealer in Bangalore, goods worth Rs
10,000. The applicable GST is IGST at the rate of 18%. The manufacturer collects Rs
1800 and this will go to the Central government. Now the dealer sells it to customers
in Mysore for Rs 15,000. The applicable GST will now be CGST (at 9%) and SGST
(at 9%).
Against CGST and SGST, 50% of the IGST — that is, Rs. 900 is taken as a credit.
But we see that although IGST never went to the state government, the credit is still
claimed against SGST. Since this amounts to a loss to the state government, the
Central Government compensates the state government by transferring the credit to
the state government.

Fig 10

51
 CHAPTER 9

TAX INVOICE, CREDIT AND DEBIT NOTES

1. Tax invoice
Subject to rule 7, a tax invoice referred to in section 31 shall be issued by the
registered person containing the following particulars:-
(a) name, address and GSTIN of the supplier;

(b) a consecutive serial number, in one or multiple series, containing alphabets

or numerals or special characters hyphen or dash and slash symbolised as “-”
and “/” respectively, and any combination thereof, unique for a financial year;

(c) date of its issue;

(d) name, address and GSTIN or UIN, if registered, of the recipient;

(e) name and address of the recipient and the address of delivery, along with
the name of State and its code, if such recipient is un-registered and where the
value of taxable supply is fifty thousand rupees or more;

(f) HSN code of goods or Accounting Code of services;

(g) description of goods or services;

(h) quantity in case of goods and unit or Unique Quantity Code thereof;

(i) total value of supply of goods or services or both;

(j) taxable value of supply of goods or services or both taking into account
discount or abatement, if any;

52
 (k) rate of tax (central tax, State tax, integrated tax, Union territory tax or
cess);

(l) amount of tax charged in respect of taxable goods or services (central tax,
State tax, integrated tax, Union territory tax or cess);

(m) place of supply along with the name of State, in case of a supply in the
course of inter-State trade or commerce;

(n) address of delivery where the same is different from the place of supply;

(o) whether the tax is payable on reverse charge basis; and

(p) signature or digital signature of the supplier or his authorized

representative:
Provided that the Commissioner may, on the recommendations of the Council,
by notification, specify -

(i) the number of digits of HSN code for goods or the Accounting Code for
services, that a class of registered persons shall be required to mention, for
such period as may be specified in the said notification, and

(ii) the class of registered persons that would not be required to mention the
HSN code for goods or the Accounting Code for services, for such period as
may be specified in the said notification:

Provided further that in case of exports of goods or services, the invoice shall
carry an endorsement

“SUPPLY MEANT FOR EXPORT ON PAYMENT OF IGST” or “SUPPLY

MEANT FOR EXPORT UNDER BOND OR LETTER OF UNDERTAKING
WITHOUT PAYMENT OF IGST”, as the case may be, and shall, in lieu of the
details specified in clause (e), contain the following details:

53
 (i) name and address of the recipient;

(ii) address of delivery;

iii) name of the country of destination; and

(iv) number and date of application for removal of goods for export:

Provided also that a registered person may not issue a tax invoice in accordance with
the provisions of clause (b) of sub-section (3) of section 31 subject to the following
conditions, namely:-

(a) the recipient is not a registered person; and

(b) the recipient does not require such invoice, and shall issue a consolidated
tax invoice for such supplies at the close of each day in respect of all such
supplies.

2. Time limit for issuing tax invoice

The invoice referred to in rule 1, in case of taxable supply of services, shall be
issued within a period of thirty days from the date of supply of service:
Provided that where the supplier of services is an insurer or a banking company or a
financial institution, including a non-banking financial company, the period within
which the invoice or any document in lieu thereof is to be issued shall be forty five
days from the date of supply of service:
Provided further that where the supplier of services is an insurer or a banking
company or a financial institution, including a non-banking financial company, or a
telecom operator, or any other class of supplier of services as may be notified by the
Government on the recommendations of the Council, making taxable supplies of
services between distinct persons as specified in section 25 as referred to in Entry 2 of
Schedule I, may issue the invoice before or at the time such supplier records the same

54
in his books of account or before the expiry of the quarter during which the supply
was made.

3. Manner of issuing invoice

(1) The invoice shall be prepared in triplicate, in case of supply of goods, in the
following manner:–
(a) the original copy being marked as ORIGINAL FOR RECIPIENT;

(b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER;

and (c) the triplicate copy being marked as TRIPLICATE FOR SUPPLIER.

(2) The invoice shall be prepared in duplicate, in case of supply of services, in the
following manner:-
(a) the original copy being marked as ORIGINAL FOR RECIPIENT; and

(b) the duplicate copy being marked as DUPLICATE FOR SUPPLIER.

(3) The serial number of invoices issued during a tax period shall be furnished
electronically through the Common Portal in FORM GSTR-1.

4. Bill of supply
A bill of supply referred to in clause (c) of sub-section (3) of section 31 shall be
issued by the supplier containing the following details:-

(a) name, address and GSTIN of the supplier;

(b) a consecutive serial number, in one or multiple series, containing alphabets

or numerals or special characters -hyphen or dash and slash symbolised as “-”
and “/”respectively, and any combination thereof, unique for a financial year;

(c) date of its issue;

(d) name, address and GSTIN or UIN, if registered, of the recipient;

55
 (e) HSN Code of goods or Accounting Code for services;

(f) description of goods or services or both;

(g) value of supply of goods or services or both taking into account discount or
abatement, if any; and

(h) signature or digital signature of the supplier or his authorized

representative:
Provided that the provisos to rule 1 shall., mutatis mutandis, apply to the bill
of supply issued under this rule.

5. Receipt voucher
A receipt voucher referred to in clause (d) of sub-section (3) of section 31 shall
contain the following particulars:
(a) name, address and GSTIN of the supplier;

(b) a consecutive serial number containing alphabets or numerals or special

characters -hyphenor dash and slash symbolised as “-” and “/”respectively,
and any combination thereof, unique for a financial year

(c) date of its issue;

(d) name, address and GSTIN or UIN, if registered, of the recipient;

(e) description of goods or services;

(f) amount of advance taken;

(g) rate of tax (central tax, State tax, integrated tax, Union territory tax or
cess);

56
 (h) amount of tax charged in respect of taxable goods or services (central tax,
State tax, integrated tax, Union territory tax or cess);

(i) place of supply along with the name of State and its code, in case of a
supply in the course of inter-State trade or commerce;

(j) whether the tax is payable on reverse charge basis; and

(k) signature or digital signature of the supplier or his authorized

representative.

6. Supplementary tax invoice and Credit or debit notes

(1) A revised tax invoice referred to in section 31 and credit or debit note referred to
in section 34 shall contain the following particulars -
(a) the word “Revised Invoice”, wherever applicable, indicated prominently;

(b) name, address and GSTIN of the supplier;

(c) nature of the document;

(d) a consecutive serial number containing alphabets or numerals or special

characters -hyphen or dash and slash symbolised as “-” and “/”respectively,,
and any combination thereof, unique for a financial year;

(e) date of issue of the document;

(f) name, address and GSTIN or UIN, if registered, of the recipient;

(g) name and address of the recipient and the address of delivery, along with
the name of State and its code, if such recipient is un-registered;

57
 (h) serial number and date of the corresponding tax invoice or, as the case may
be, bill of supply;

(i) value of taxable supply of goods or services, rate of tax and the amount of
the tax credited or, as the case may be, debited to the recipient; and

(j) signature or digital signature of the supplier or his authorized

representative:

(2) Every registered person who has been granted registration with effect from a date
earlier than the date of issuance of certificate of registration to him, may issue revised
tax invoices in respect of taxable supplies effected during the period starting from the
effective date of registration till the date of issuance of certificate of registration:
Provided that the registered person may issue a consolidated revised tax
invoice in respect of all taxable supplies made to a recipient who is not registered
under the Act during such period:
Provided further that in case of inter-State supplies, where the value of a
supply does not exceed two lakh and fifty thousand rupees, a consolidated revised
invoice may be issued separately in respect of all recipients located in a State, who are
not registered under the Act.

(3) Any invoice or debit note issued in pursuance of any tax payable in accordance
with the provisions of section 74 or section 129 or section 130 shall prominently
contain the words “INPUT TAX CREDIT NOT ADMISSIBLE”.

7. Tax Invoice in special cases

(1) An ISD invoice or, as the case may be, an ISD credit note issued by an Input
Service Distributor shall contain the following details:-
(a) name, address and GSTIN of the Input Service Distributor;

(b) a consecutive serial number containing alphabets or numerals or special

characters hyphen or dash and slash symbolised as , “-”, “/”, respectively, and
any combination thereof, unique for a financial year;

58
 (c) date of its issue;

(d) name, address and GSTIN of the recipient to whom the credit is
distributed;

(e) amount of the credit distributed; and

(f) signature or digital signature of the Input Service Distributor or his

authorized representative:
Provided that where the Input Service Distributor is an office of a banking
company or a financial institution, including a non-banking financial company, a tax
invoice shall include any document in lieu thereof, by whatever name called, whether
or not serially numbered but containing the information as prescribed above.

(2) Where the supplier of taxable service is an insurer or a banking company or a

financial institution, including a non-banking financial company, the said supplier
shall issue a tax invoice or any other document in lieu thereof, by whatever name
called, whether or not serially numbered, and whether or not containing the address of
the recipient of taxable service but containing other information as prescribed under
rule 1.

(3) Where the supplier of taxable service is a goods transport agency supplying
services in relation to transportation of goods by road in a goods carriage, the said
supplier shall issue a tax invoice or any other document in lieu thereof, by whatever
name called, containing the gross weight of the consignment, name of the consignor
and the consignee, registration number of goods carriage in which the goods are
transported, details of goods transported, details of place of origin and destination,
GSTIN of the person liable for paying tax whether as consignor, consignee or goods
transport agency, and also containing other information as prescribed under rule 1.

(4) Where the supplier of taxable service is supplying passenger transportation

service, a tax invoice shall include ticket in any form, by whatever name called,

59
whether or not serially numbered, and whether or not containing the address of the
recipient of service but containing other information as prescribed under rule 1.

8. Transportation of goods without issue of invoice

(1) For the purposes of
(a) supply of liquid gas where the quantity at the time of removal from the
place of business of the supplier is not known,

(b) transportation of goods for job work,

(c) transportation of goods for reasons other than by way of supply, or

(d) such other supplies as may be notified by the Board,

The consigner may issue a delivery challan, serially numbered, in lieu of invoice at
the time of removal of goods for transportation, containing following details:
(i) date and number of the delivery challan,

(ii) name, address and GSTIN of the consigner, if registered,

(iii) name, address and GSTIN or UIN of the consignee, if registered,

(iv) HSN code and description of goods,

(v) quantity (provisional, where the exact quantity being supplied is not
known),

(vi) taxable value,

(vii) tax rate and tax amount – central tax, State tax, integrated tax, Union
territory tax or cess, where the transportation is for supply to the consignee,

60
 (viii) place of supply, in case of inter-State movement, and

(ix) signature.

(2) The delivery challan shall be prepared in triplicate, in case of supply of goods, in
the following manner:–
(a) the original copy being marked as ORIGINAL FOR CONSIGNEE;

(b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER;

and

(c) the triplicate copy being marked as TRIPLICATE FOR CONSIGNER.

(3) Where goods are being transported on a delivery challan in lieu of invoice, the
same shall be declared in FORM [WAYBILL].

(4) Where the goods being transported are for the purpose of supply to the recipient
but the tax invoice could not be issued at the time of removal of goods for the purpose
of supply, the supplier shall issue a tax invoice after delivery of goods.

(5) Where the goods are being transported in a semi knocked down or completely
knocked down condition
(a) the supplier shall issue the complete invoice before dispatch of the first
consignment;

(b) the supplier shall issue a delivery challan for each of the subsequent
consignments, giving reference of the invoice;

(c) each consignment shall be accompanied by copies of the corresponding

delivery challan along with a duly certified copy of the invoice; and

(d) the original copy of the invoice shall be sent along with the last
consignment.

61
 CHAPTER 10

PAYMENT OF TAX

1. Electronic Tax Liability Register

(1) The electronic tax liability register specified under sub-section (7) of section 49
shall be maintained in FORM GST PMT-01 for each person liable to pay tax,
interest, penalty, late fee or any other amount on the Common Portal and all amounts
payable by him shall be debited to the said register.

(2) The electronic tax liability register of the person shall be debited by:-
(a) the amount payable towards tax, interest, late fee or any other amount
payable as per the return furnished by the said person;

(b) the amount of tax, interest, penalty or any other amount payable as
determined by a proper officer in pursuance of any proceedings under the Act
or as ascertained by the said person;

(c) the amount of tax and interest payable as a result of mismatch under
section 42 or section 43 or section 50; or

(d) any amount of interest that may accrue from time to time.

(3) Subject to the provisions of section 49, payment of every liability by a registered
person as per his return shall be made by debiting the electronic credit ledger
maintained as per rule 2 or the electronic cash ledger maintained as per rule 3 and the
electronic tax liability register shall be credited accordingly.

(4) The amount deducted under section 51, or the amount collected under section 52,
or the amount payable under sub-section (3) or sub-section (4) of section 9, or the
amount payable under section 10, or sub-section (3) or sub-section (4) of section 5 of
the Integrated Goods and Services Act or sub-section (3) or sub-section (4) of section

62
7 of the Union Territory Goods and Services Tax Act any amount payable towards
interest, penalty, fee or any other amount under the Act or the Integrated Goods and
Services Act shall be paid by debiting the electronic cash ledger maintained as per
rule 3 and the electronic tax liability register shall be credited accordingly.

(5) Any amount of demand debited in the electronic tax liability register shall stand
reduced to the extent of relief given by the appellate authority or Appellate Tribunal
or court and the electronic tax liability register shall be credited accordingly.

(6) The amount of penalty imposed or liable to be imposed shall stand reduced partly
or fully, as the case may be, if the taxable person makes the payment of tax, interest
and penalty specified in the show cause notice or demand order and the electronic tax
liability register shall be credited accordingly.

2. Electronic Credit Ledger

(1) The electronic credit ledger shall be maintained in FORM GST PMT-02 for each
registered person eligible for input tax credit under the Act on the Common Portal and
every claim of input tax credit under the Act shall be credited to the said Ledger.

(2) The electronic credit ledger shall be debited to the extent of discharge of any
liability in accordance with section 49.

(3) Where a registered person has claimed refund of any unutilized amount from the
electronic credit ledger in accordance with the provisions of section 54, the amount to
the extent of the claim shall be debited in the said ledger.

(4) If the refund so filed is rejected, either fully or partly, the amount debited under
sub-rule (3), to the extent of rejection, shall be re-credited to the electronic credit
ledger by the proper officer by an order made in FORM GST PMT-03.

(5) Save as provided in these rules, no entry shall be made directly in the electronic
credit ledger under any circumstance.

63
(6) A registered person shall, upon noticing any discrepancy in his electronic credit
ledger, communicate the same to the officer exercising jurisdiction in the matter,
through the Common Portal in FORM GST PMT-04.

Explanation.– For the purpose of this rule, a refund shall be deemed to be rejected, if
the appeal is finally rejected or if the claimant gives an undertaking to the proper
officer that he shall not file an appeal.

3. Electronic Cash Ledger

(1) The electronic cash ledger under sub-section (1) of section 49 shall be maintained
in FORM GST PMT-05 for each person, liable to pay tax, interest, penalty, late fee or
any other amount, on the Common Portal for crediting the amount deposited and
debiting the payment there from towards tax, interest, penalty, fee or any other
amount.

(2) Any person, or a person on his behalf, shall generate a challan in FORM GST
PMT- 06 on the Common Portal and enter the details of the amount to be deposited by
him towards tax, interest, penalty, fees or any other amount.

(3) The deposit under sub-rule (2) shall be made through any of the following modes:
(i) Internet Banking through authorized banks;

(ii) Credit card or Debit card through the authorised bank;

(iii) National Electronic Fund Transfer (NeFT) or Real Time Gross Settlement
(RTGS) from any bank;

(iv) Over the Counter payment (OTC) through authorized banks for deposits
up to ten thousand rupees per challan per tax period, by cash, cheque or
demand draft:

64
Provided that the restriction for deposit up to ten thousand rupees per challan in case
of an Over the Counter (OTC) payment shall not apply to deposit to be made by –

(a) Government Departments or any other deposit to be made by persons as

may be notified by the Commissioner in this behalf;

(b) Proper officer or any other officer authorised to recover outstanding dues
from any person, whether registered or not, including recovery made through
attachment or sale of movable or immovable properties;

(c) Proper officer or any other officer authorized for the amounts collected by
way of cash, cheque or demand draft during any investigation or enforcement
activity or any ad hoc deposit:

Provided further that the challan in FORM GST PMT-06 generated at the Common
Portal shall be valid for a period of fifteen days.
Explanation.– For making payment of any amount indicated in the challan, the
commission, if any, payable in respect of such payment shall be borne by the person
making such payment.

(4) Any payment required to be made by a person who is not registered under the Act,
shall be made on the basis of a temporary identification number generated through the
Common

(5) Where the payment is made by way of NeFT or RTGS mode from any bank, the
mandate form shall be generated along with the challan on the Common Portal and
the same shall be submitted to the bank from where the payment is to be made:
Provided that the mandate form shall be valid for a period of fifteen days from the
date of generation of challan.

(6) On successful credit of the amount to the concerned government account

maintained in the authorised bank, a Challan Identification Number (CIN) will be
generated by the collecting Bank and the same shall be indicated in the challan.

65
(7) On receipt of CIN from the authorized Bank, the said amount shall be credited to
the electronic cash ledger of the person on whose behalf the deposit has been made
and the Common Portal shall make available a receipt to this effect.

(8) Where the bank account of the person concerned, or the person making the deposit
on his behalf, is debited but no Challan Identification Number (CIN) is generated or
generated but not communicated to the Common Portal, the said person may represent
electronically in FORM GST PMT-07 through the Common Portal to the Bank or
electronic gateway through which the deposit was initiated.

(9) Any amount deducted under section 51 or collected under section 52 and claimed
in FORM GSTR-02 by the registered taxable person from whom the said amount was
deducted or, as the case may be, collected shall be credited to his electronic cash
ledger in accordance with the provisions of rule 2.Return.

(10) Where a person has claimed refund of any amount from the electronic cash
ledger, the said amount shall be debited to the electronic cash ledger.

(11) If the refund so claimed is rejected, either fully or partly, the amount debited
under sub-rule (10), to the extent of rejection, shall be credited to the electronic cash
ledger by the proper officer by an order made in FORM GST PMT-03.
Explanation.- For the purposes of this rule, a refund shall be deemed to be rejected if
the appeal is finally rejected or if the claimant gives an undertaking to the proper
officer that he shall not file an appeal.

4. Identification number for each transaction

(1) A unique identification number shall be generated at the Common Portal for each
debit or credit to the electronic cash or credit ledger, as the case may be.

(2) The unique identification number relating to discharge of any liability shall be
indicated in the corresponding entry in the electronic tax liability register.

66
 CHAPTER 11

RETURNS
1. Form and manner of furnishing details of outward supplies
Every registered person required to furnish the details of outward supplies of goods or
services or both under section 37, shall furnish such details in FORM GSTR-1
electronically through the Common Portal either directly or through a Facilitation
Centre notified by Commissioner.
(1) The details of outward supplies of goods or services or both furnished in FORM
GSTR-1 shall include inter-alia,–
(a) invoice wise details of all -
(i) inter-State and intra-State supplies made to registered persons;

(ii) inter-State supplies with invoice value more than two and a half
lakh rupees made to unregistered persons;

(b) consolidated details of all -

(i) intra-State supplies made to unregistered persons for each rate of
tax; and

(ii) State wise inter-State supplies with invoice value less than two and
a half lakh rupees made to unregistered persons for each rate of tax;
and

(c) debit and credit notes, if any issued during the month for invoices issued
previously.

(3) The details of outward supplies furnished by the supplier shall be made available
electronically to the concerned registered persons (recipients) in Part A of FORM
GSTR- 2A, in FORM GSTR-4A and in FORM GSTR-6A through the Common
Portal after the due date of filing of FORM GSTR-1.

67
(4) The details of inward supplies added, corrected or deleted by the recipient in his
FORM GSTR-2 under section 38 or FORM GSTR-4 under section 39 shall be made
available to the supplier electronically in FORM GSTR-1A through the Common
Portal and such supplier may either accept or reject the modifications made by the
recipient and FORM GSTR-1 furnished earlier by the supplier shall stand amended
to the extent of modifications accepted by him.

2. Form and manner of furnishing details of inward supplies

(1) Every registered person required to furnish the details of inward supplies of goods
or services or both received during a tax period under sub-section (2) of section 38
shall, on the basis of details contained in Part A, Part B, Part C and Part D of FORM
GSTR-2A, prepare such details as specified in sub-section (1) of the said section and
furnish the same in FORM GSTR-2 electronically through the Common Portal, either
directly or from a Facilitation Centre notified by the Commissioner, after including
therein details of such other inward supplies, if any, required to be furnished under
sub-section (2) of section 38.

(2) Every registered person shall furnish the details, if any, required under sub-section
(5) of section 38 electronically in FORM GSTR-2.

(3) The registered person shall specify the inward supplies in respect of which he is
not eligible, either fully or partially, for input tax credit in FORM GSTR-2 where such
eligibility can be determined at the invoice level.

(4) The registered person shall declare the quantum of ineligible input tax credit on
inward supplies which is relatable to non-taxable supplies or for purposes other than
business and cannot be determined at the invoice level in FORM GSTR-2.

(5) The details of invoices furnished by an Input Service Distributor in his return in
FORM GSTR-6 under rule 7 shall be made available to the recipient of credit in Part
B of FORM GSTR -2A electronically through the Common Portal and the said
recipient may include the same in FORM GSTR-2.

68
(6) The details of tax deducted at source furnished by the deductor under sub-section
(3) of section 39 in FORM GSTR-7 shall be made available to the deductee in Part
C of FORM GSTR-2A electronically through the Common Portal and the said
deductee may include the same in FORM GSTR-2.

(7) The details of tax collected at source furnished by an e-commerce operator under
section 52 in FORM GSTR-8 shall be made available to the concerned person in
Part D of FORM GSTR - 2A electronically through the Common Portal and such
taxable person may include the same in FORM GSTR-2.

(8) The details of inward supplies of goods or services or both furnished in Form
GSTR-2 shall include, inter-alia-
(a) invoice wise details of all inter-State and intra-State supplies received from
registered persons or unregistered persons;

(b) import of goods and services made; and

(c) debit and credit notes, if any, received from supplier.

3. Form and manner of submission of monthly return

(1) Every registered person, other than an Input Service Distributor or a non-resident
taxable person or a person paying tax under section 10 or section 51 or, as the case
may be, under section 52 shall furnish a return specified under sub-section (1) of
section 39 in FORM GSTR-3 electronically through the Common Portal either
directly or through a Facilitation Centre notified by the Commissioner.

(2) Part A of the return under sub-rule (1) shall be electronically generated on the
basis of information furnished through returns in FORM GSTR-1, FORM GSTR-2
and based on other liabilities of preceding tax periods.

(3) Every registered person furnishing the return under sub-rule (1) shall, subject to
the provisions of section 49, discharge his liability towards tax, interest, penalty, fees

69
or any other amount payable under the Act or these rules by debiting the electronic
cash ledger or electronic credit ledger and include the details in Part B of the return in
FORM GSTR-3.

(4) A registered person, claiming refund of any balance in the electronic cash ledger
in accordance with the provisions of sub-section (6) of section 49, may claim such
refund in Part B of the return in FORM GSTR-3 and such return shall be deemed to
be an application filed under section 54 .

(5) Where the time limit for furnishing of details in FORM GSTR-1 under section 37
and in FORM GSTR-2 under section 38 has been extended, return in FORM GSTR-
3B, in lieu of FORM GSTR-3, may be furnished in such manner as may be notified
by the Commissioner .

4. Form and manner of submission of quarterly return by the

composition supplier
(1) Every registered person paying tax under section 10 shall, after adding, correcting
or deleting the details in FORM GSTR-4A, furnish a quarterly return in FORM
GSTR-4 electronically through the Common Portal, either directly or through a
Facilitation Centre notified by the Commissioner.

(2) Every registered person furnishing the return under sub-rule (1) shall discharge his
liability towards tax, interest, penalty, fees or any other amount payable under the Act
or these rules by debiting the electronic cash ledger.

(3) The return furnished under sub-rule (1) shall include, inter-alia:
(a) invoice wise inter-State and intra-State inward supplies received from
registered and un-registered persons;

(b) import of goods and services made;

(c) consolidated details of outward supplies made; and

70
 (d) debit and credit notes issued and received, if any;

(4) A registered person who has opted to pay tax under section 10 from the beginning
of a financial year, shall furnish the details of outward and inward supplies and return
under rule 1, rule 2 and rule 3 relating to the period during which the person was
liable to furnish such details and returns till the due date of furnishing the return for
the month of September of the succeeding financial year or furnishing of annual
return of the preceding financial year, whichever is earlier.

5. Form and manner of submission of return by non-resident taxable

person
Every registered non-resident taxable person shall furnish a return in FORM GSTR-5
electronically through the Common Portal, either directly or through a Facilitation
Centre notified by the Commissioner, including therein the details of outward supplies
and inward supplies and shall pay the tax, interest, penalty, fees or any other amount
payable under the Act or these rules within twenty days after the end of a tax period
or within seven days after the last day of the validity period of registration, whichever
is earlier.

6. Form and manner of submission of return by an Input Service

Distributor
Every Input Service Distributor shall, after adding, correcting or deleting the details
contained in FORM GSTR-6A, furnish electronically a return in FORM GSTR-6,
containing the details of tax invoices on which credit has been received and those
issued under section 20, through the Common Portal either directly or from a
Facilitation Centre notified by the Commissioner.

7. Form and manner of submission of return by a person required to

deduct tax at source
(1) Every registered person required to deduct tax at source under section 51 shall
furnish a return in FORM GSTR-7 electronically through the Common Portal either
directly or from a Facilitation Centre notified by the Commissioner.

71
(2) The details furnished by the deductor under sub-rule (1) shall be made available
electronically to each of the suppliers in Part C of FORM GSTR-2A on the
Common Portal after the due date of filing of FORM GSTR-7.

(3) The certificate referred to in sub-section (3) of section 51 shall be made available
electronically to the deductee on the Common Portal in FORM GSTR-7A on the
basis of the return furnished under sub-rule (1).

8. Form and manner of submission of statement of supplies by an e-

commerce operator
(1) Every electronic commerce operator required to collect tax at source under section
52 shall furnish a statement in FORM GSTR-8 electronically through the Common
Portal, either directly or from a Facilitation Centre notified by the Commissioner,
containing details of supplies effected through such operator and the amount of tax
collected as required under sub-section (1) of section 52.

(2) The details furnished by the operator under sub-rule (1) shall be made available
electronically to each of the suppliers in Part D of FORM GSTR-2A on the
Common Portal after the due date of filing of FORM GSTR-8.

9. Notice to non-filers of returns

A notice in FORM GSTR-3A shall be issued, electronically, to a registered person
who fails to furnish return under section 39 and section 45.

10. Matching of claim of input tax credit

The following details relating to the claim of input tax credit on inward supplies
including imports, provisionally allowed under section 41, shall be matched under
section 42 after the due date for furnishing the return in FORM GSTR-3
(a) GSTIN of the supplier;
(b) GSTIN of the recipient;
(c) Invoice/ or debit note number;
(d) Invoice/ or debit note date;
(e) taxable value; and

72
 (f) tax amount:
Provided that where the time limit for furnishing FORM GSTR-1 specified under
section 37 and FORM GSTR-2 specified under section 38 has been extended, the
date of matching relating to claim of input tax credit shall also be extended
accordingly.
Explanation 1.- The claim of input tax credit in respect of invoices and debit notes in
FORM GSTR-2 that were accepted by the recipient on the basis of FORM GSTR-
2A without amendment shall be treated as matched if the corresponding supplier has
furnished a valid return.
Explanation 2. - The claim of input tax credit shall be considered as matched, where
the amount of input tax credit claimed is equal to or less than the output tax paid on
such tax invoice or debit note by the corresponding supplier.

11. Final acceptance of input tax credit and communication thereof

(1) The final acceptance of claim of input tax credit in respect of any tax period,
specified in sub-section (2) of section 42, shall be made available electronically to the
registered person making such claim in FORM GST MIS -1 through the Common
Portal.

(2) The claim of input tax credit in respect of any tax period which had been
communicated as mismatched but is found to be matched after rectification by the
supplier or recipient shall be finally accepted and made available electronically to the
person making such claim in FORM GST MIS - 1 through the Common Portal.

12. Communication and rectification of discrepancy in claim of input

tax credit and reversal of claim of input tax credit
(1) Any discrepancy in the claim of input tax credit in respect of any tax period,
specified in sub-section (3) of section 42 and the details of output tax liable to be
added under subsection (5) of the said section on account of continuation of such
discrepancy shall be made available to the registered person making such claim
electronically in FORM GST MIS -1 and to the supplier electronically in FORM
GST MIS-2 through the Common Portal on or before the last date of the month in
which the matching has been carried out.

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(2) A supplier to whom any discrepancy is made available under sub-rule (1) may
make suitable rectifications in the statement of outward supplies to be furnished for
the month in which the discrepancy is made available.

(3) A recipient to whom any discrepancy is made available under sub-rule (1) may
make suitable rectifications in the statement of inward supplies to be furnished for the
month in which the discrepancy is made available.

(4) Where the discrepancy is not rectified under sub-rule (2) or sub-rule (3), an
amount to the extent of discrepancy shall be added to the output tax liability of the
recipient in his return to be furnished in FORM GSTR-3 for the month succeeding
the month in which the discrepancy is made available.
Explanation 1. - Rectification by a supplier means adding or correcting the details of
an outward supply in his valid return so as to match the details of corresponding
inward supply declared by the recipient.
Explanation 2. - Rectification by the recipient means deleting or correcting the details
of an inward supply so as to match the details of corresponding outward supply
declared by the supplier.

13. Claim of input tax credit on the same invoice more than once
Duplication of claims of input tax credit in the details of inward supplies shall be
communicated to the registered person in FORM GST MIS - 1 electronically through
the Common Portal.

14. Matching of claim of reduction in the output tax liability

The following details relating to the claim of reduction in output tax liability shall be
matched under section 43 after the due date for furnishing the return in FORM
GSTR-3 -
(a) GSTIN of the supplier;
(b) GSTIN of the recipient;
(c) credit note number;
(d) credit note date;

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 (e) taxable value; and
(f) tax amount:

Provided that where the time limit for furnishing FORM GSTR-1 under section 37
and FORM GSTR-2 under section 38 has been extended, the date of matching of
claim of reduction in the output tax liability shall be extended accordingly.
Explanation 1.- The claim of reduction in output tax liability due to issuance of credit
notes in FORM GSTR-1 that were accepted by the recipient in FORM GSTR-2
without amendment shall be treated as matched if the corresponding recipient has
furnished a valid return.
Explanation 2.- The claim of reduction in the output tax liability shall be considered
as matched, where the amount of reduction claimed is equal to or less than the claim
of reduction in input tax credit admitted and discharged on such credit note by the
corresponding recipient in his valid return.

15. Final acceptance of reduction in output tax liability and

communication thereof
(1) The final acceptance of claim of reduction in output tax liability in respect of any
tax period, specified in sub-section (2) of section 43, shall be made available
electronically to the person making such claim in FORM GST MIS - 3 through the
Common Portal.

(2) The claim of reduction in output tax liability in respect of any tax period which
had been communicated as mis-matched but is found to be matched after rectification
by the supplier or recipient shall be finally accepted and made available electronically
to the person making such claim in FORM GST MIS - 3 through the Common Portal.

16. Communication and rectification of discrepancy in reduction in

output tax liability and reversal of claim of reduction
(1) Any discrepancy in claim of reduction in output tax liability, specified in sub-
section (3) of section 43, and the details of output tax liability to be added under sub-
section (5) of the said section on account of continuation of such discrepancy shall be
made available to the registered person making such claim electronically in FORM

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GST MIS - 3 and the recipient electronically in FORM GST MIS - 4 through the
Common Portal on or before the last date of the month in which the matching has
been carried out.

(2) A supplier to whom any discrepancy is made available under sub-rule (1) may
make suitable rectifications in the statement of outward supplies to be furnished for
the month in which the discrepancy is made available.

(3) A recipient to whom any discrepancy is made available under sub-rule (1) may
make suitable rectifications in the statement of inward supplies to be furnished for the
month in which the discrepancy is made available.

(4) Where the discrepancy is not rectified under sub-rule (2) or sub-rule (3), an
amount to the extent of discrepancy shall be added to the output tax liability of the
supplier and debited to tax liability register and also shown in his return in FORM
GSTR-3 for the month succeeding the month in which the discrepancy is made
available.

Explanation 1.- Rectification by a supplier means deleting or correcting the details of

an outward supply in his valid return so as to match the details of corresponding
inward supply declared by the recipient.

Explanation 2.- Rectification by the recipient means adding or correcting the details
of an inward supply so as to match the details of corresponding outward supply
declared by the supplier.

17. Claim of reduction in output tax liability more than once

Duplication of claims for reduction in output tax liability in the details of outward
supplies shall be communicated to the registered person in FORM GST MIS - 3
electronically through the Common Portal.

18. Refund of interest paid on reclaim of reversals

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The interest to be refunded under sub-section (9) of section 42 or sub-section (9) of
section 43 shall be claimed by the registered person in his return in FORM GSTR-3
and shall be credited to his electronic cash ledger in FORM GST PMT-3 and the
amount credited shall be available for payment of any future liability towards interest
or the taxable person may claim refund of the amount under section 54.

19. Matching of details furnished by the e-Commerce operator with

the details furnished by the supplier
The following details relating to the supplies made through an e-Commerce operator,
as declared in FORM GSTR-8, shall be matched with the corresponding details
declared by the supplier in FORM GSTR-1-
(a) GSTIN of the supplier;

(b) GSTIN or UIN of the recipient, if the recipient is a registered person;

(c) State of place of supply;

(d) invoice number of the supplier;

(e) date of invoice of the supplier;

(f) taxable value; and

(g) tax amount:

Provided that for all supplies where the supplier is not required to furnish the
details separately for each supply, the following details relating to such supplies made
through an e- Commerce operator, as declared in FORM GSTR-8, shall be matched
with the corresponding details declared by the supplier in FORM GSTR 1-
(a) GSTIN of the supplier;

(b) State of place of supply;

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 (c) total taxable value of all supplies made in the State through e-commerce
portal; and

(d) tax amount on all supplies made in the State:

Provided further that where the time limit for furnishing FORM GSTR-1 under
section 37 has been extended, the date of matching of the above mentioned details
shall be extended accordingly.

20. Communication and rectification of discrepancy in details

furnished by the ecommerce operator and the supplier
(1) Any discrepancy in the details furnished by the operator and those declared by the
supplier shall be made available to the supplier electronically in FORM GST MIS-5
and to the e-commerce portal electronically in FORM GST MIS–6 through the
Common Portal on or before the last date of the month in which the matching has
been carried out.

(2) A supplier to whom any discrepancy is made available under sub-rule (1) may
make suitable rectifications in the statement of outward supplies to be furnished for
the month in which the discrepancy is made available.

(3) An operator to whom any discrepancy is made available under sub-rule (1) may
make suitable rectifications in the statement to be furnished for the month in which
the discrepancy is made available.

(4) Where the discrepancy is not rectified under sub-rule (2) or sub-rule (3), an
amount to the extent of discrepancy shall be added to the output tax liability of the
supplier in his return in FORM GSTR-3 for the month succeeding the month in
which the details of discrepancy are made available and such addition to the output
tax liability and interest payable thereon shall be made available to the supplier
electronically on the Common Portal in FORM GST MIS –5.

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21. Annual return
(1) Every registered person, other than an Input Service Distributor, a person paying
tax under section 51 or section 52, a casual taxable person and a non-resident taxable
person, shall furnish an annual return as specified under sub-section (1) of section 44
electronically in FORM GSTR-9 through the Common Portal either directly or
through a Facilitation Centre notified by the Commissioner:

Provided that a person paying tax under section 10 shall furnish the annual
return in FORM GSTR-9A.

(2) Every registered person whose aggregate turnover during a financial year exceeds
one crore rupees shall get his accounts audited as specified under sub-section (5) of
section 35 and he shall furnish a copy of audited annual accounts and a reconciliation
statement, duly certified, in FORM GSTR-9B, electronically through the Common
Portal either directly or through a Facilitation Centre notified by the Commissioner.

22. Final return

Every registered person required to furnish a final return under section 45, shall
furnish such return electronically in FORM GSTR-10 through the Common Portal
either directly or through a Facilitation Centre notified by the Commissioner.

23. Details of inward supplies of persons having Unique Identity

Number
(1) Every person, who has been issued a Unique Identity Number and claims refund
of the taxes paid on his inward supplies, shall furnish the details of such supplies of
taxable goods or services or both in FORM GSTR-11 along with application for such
refund claim either directly or through a Facilitation Centre, notified by the
Commissioner.

(2) Every person, who has been issued a Unique Identity Number for purposes other
than refund of the taxes paid, shall furnish the details of inward supplies of taxable

79
goods or services or both as may be required by the proper officer in FORM GSTR-
11.

24. Provisions relating to a goods and services tax practitioner

(1) An application in FORM GST PCT-1 may be made to the officer authorised in
this behalf for enrolment as goods and services tax practitioner by any person who
(a) (i) is a citizen of India;

(ii) is a person of sound mind;

(iii) is not adjudicated as insolvent;

(iv) has not been convicted by a competent court for an offence with
imprisonment not less than two years,- and satisfies any of the
following conditions: -

(b) that he is a retired officer of the Commercial Tax Department of any State
Government or of the Central Board of Excise and Customs, Department of
Revenue, Government of India, who, during his service under the
Government, had worked in a post not lower in rank than that of a Group-B
gazetted officer for a period of not less than two years; or

(c) he has passed:

(i) a graduate or postgraduate degree or its equivalent examination
having a degree in Commerce, Law, Banking including Higher
Auditing, or Business Administration or Business Management from
any Indian University established by any law for the time being in
force; or

(ii) a degree examination of any Foreign University recognized by any

Indian University as equivalent to the degree examination mentioned
in sub clause (i); or

80
 (iii) Any other examination notified by the Government for this
purpose; or

(iv) Any degree examination of an Indian University or of any Foreign

University recognized by any Indian University as equivalent of the
degree examination and has also passed any of the following
examinations, namely.-
(a) Final examination of the Institute of Chartered Accountants
of India; or
(b) final examination of the Institute of Cost Accountants of
India; or
(c) Final examination of the Institute of Company Secretaries
of India.

(2) On receipt of the application referred to in sub-rule (1), the authorised officer
shall, after making such enquiry as he considers necessary, either enroll the applicant
as a goods and services tax practitioner and issue a certificate to that effect in FORM
GST PCT - 2 or reject his application where it is found that the applicant is not
qualified to be enrolled as a goods and services tax practitioner.

(3) The enrolment made under sub-rule (2) shall be valid until it is cancelled.

(4) If any goods and services tax practitioner is found guilty of misconduct in
connection with any proceedings under the Act, the authorised officer may, by order,
in FORM GST PCT direct that he shall henceforth be disqualified under section 48,
after giving him a notice to show cause in FORM GST PCT against such
disqualification and after giving him a reasonable opportunity of being heard.

(5) Any person against whom an order under sub-rule (4) is made may, within thirty
days from the date of the order under sub-rule (4), appeal to the Commissioner against
such order.

(6) A list of goods and services tax practitioner enrolled under sub-rule (1) shall be
maintained on the Common Portal in FORM GST PCT -5 and the authorised officer

81
may make such amendments to the list as may be necessary from time to time, by
reason of any change of address or death or disqualification of any goods and services
tax practitioner.

(7) Any registered person may, at his option, authorise a goods and services tax
practitioner on the Common Portal in FORM GST PCT -6 or, at any time, withdraw
such authorisation in FORM GST PCT -7 and the goods and services tax practitioner
so authorised shall be allowed to undertake such tasks as indicated in FORM GST
PCT -6 during the period of authorisation.

(8) Where a statement required to be furnished by a registered person has been

furnished by the goods and services tax practitioner authorised by him, a confirmation
shall be sought from the registered person over email or SMS and the statement
furnished by the goods and services tax practitioner shall be made available to the
registered person on the Common Portal:
Provided that where the taxable person fails to respond to the request for
confirmation till the last date of furnishing of such statement, it shall be deemed that
he has confirmed the statements furnished by the goods and services tax practitioner .

(9) A goods and services tax practitioner can undertake any or all of the following
activities on behalf of a registered person, if so authorised by the registered person to:
(a) furnish details of outward and inward supplies;
(b) furnish monthly, quarterly, annual or final return;
(c) make deposit for credit into the electronic cash ledger;
(d) file a claim for refund; and
(e) file an application for amendment or cancellation of registration.

(10) Any registered person opting to furnish his return through a goods and services
tax practitioner shall-
(a) give his consent in FORM GST PCT -6 to any goods and services tax
practitioner to prepare and furnish his return; and

82
 (b) before confirming submission of any statement prepared by the goods and
services tax practitioner, ensure that the facts mentioned in the return are true
and correct before signature.

(11) The goods and services tax practitioner shall-

(a) prepare the statements with due diligence; and

(b) affix his digital signature on the statements prepared by him or

electronically verify using his credentials.

25. Conditions for purposes of appearance

(1) No person shall be eligible to attend before any authority, as a goods and services
tax practitioner, in connection with any proceedings under the Act on behalf of any
registered person or un-registered person unless his name has been entered in the list
maintained under sub-rule (6) of rule 24 .

(2) An Accountant or a goods and services tax practitioner attending on behalf of a

registered person or an un-registered person in any proceedings under the Act before
any authority shall produce before such authority, if required, a copy of the
authorisation given by the taxable person or person in Form GST PCT -6.

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 CHAPTER 12
REFUND
Application for refund of tax, interest, penalty, fees or any other
amount
(1) Any person, except the persons covered by notification issued under section 55,
claiming refund of any tax, interest, penalty, fees or any other amount paid by him,
may file an application in FORM GST RFD-01 electronically through the Common
Portal either directly or through a Facilitation Centre notified by the Commissioner:
Provided that any claim for refund relating to balance in the electronic cash
ledger in accordance with the provisions of sub-section (6) of section 49 may also be
made through the return furnished for the relevant tax period in FORM GSTR-3,
FORM GSTR-4 or FORM GSTR-7, as the case may be: Provided further that in case
of export of goods, application for refund shall be filed only after the export manifest
or an export report, as the case may be, is delivered under section 41 of the Customs
Act, 1962 in respect of such goods:
Provided also that in respect of supplies to a Special Economic Zone unit or a
Special Economic Zone developer, the application for refund shall be filed by the
supplier of goods after such goods have been admitted in full in the Special Economic
Zone for authorized operations, as endorsed by the specified officer of the Zone:
Provided also that in respect of supplies to a Special Economic Zone unit or a
Special Economic Zone developer, the application for refund shall be filed by the
supplier of services along with such evidence regarding receipt of services for
authorized operations as endorsed by the specified officer of the Zone:
Provided also that in respect of supplies regarded as deemed exports, the
application shall be filed by the recipient of deemed export supplies:
Provided also that refund of any amount, after adjusting the tax payable by the
applicant out of the advance tax deposited by him under section 27 at the time of
registration, shall be claimed either in the last return required to be furnished by him
or only after furnishing of the said last return.

84
(2) The application under sub-rule (1) shall be accompanied by any of the following
documentary evidences, as applicable, to establish that a refund is due to the
applicant:
(a) the reference number of the order and a copy of the order passed by the proper
officer or an appellate authority or Appellate Tribunal or court resulting in such
refund or reference number of the payment of the amount specified in sub-section (6)
of section 107 and sub-section (8) of section 112 claimed as refund;

(b) a statement containing the number and date of shipping bills or bills of export and
the number and date of relevant export invoices, in a case where the refund is on
account of export of goods;

(c) a statement containing the number and date of invoices and the relevant Bank
Realization Certificates or Foreign Inward Remittance Certificates, as the case may
be, in a case where the refund is on account of export of services;

(d) a statement containing the number and date of invoices as prescribed in rule
Invoice.1 along with the evidence regarding endorsement specified in the third
proviso to sub-rule (1) in case of supply of goods made to a Special Economic Zone
unit or a Special Economic Zone developer;

(e) a statement containing the number and date of invoices, the evidence regarding
endorsement specified in the fourth proviso to sub-rule (1) and the details of payment,
along with proof thereof, made by the recipient to the supplier for authorized
operations as defined under them Special Economic Zone Act, 2005, in a case where
the refund is on account of supply of services made to a Special Economic Zone unit
or a Special Economic Zone developer:

(f) a statement containing the number and date of invoices along with such other
evidence as may be notified in this behalf, in a case where the refund is on account of
deemed exports;

(g) a statement in Annex 1 of FORM GST RFD-01 containing the number and date of

85
invoices received and issued during a tax period in a case where the claim pertains to
refund of any unutilized input tax credit under sub-section (3) of section 54 where the
credit has accumulated on account of rate of tax on inputs being higher than the rate
of tax on output supplies, other than nilrated or fully exempt supplies;

(h) the reference number of the final assessment order and a copy of the said order in
a case where the refund arises on account of finalisation of provisional assessment;

(i) a declaration to the effect that the incidence of tax, interest or any other amount
claimed as refund has not been passed on to any other person, in a case where the
amount of refund claimed does not exceed two lakh rupees:

Provided that a declaration is not required to be furnished in respect of cases covered

under clause (a) or clause (b) or clause (c) or clause (d) of sub-section (8) of section
54;
(j) a Certificate in Annex 2 of FORM GST RFD-01 issued by a chartered accountant
or a cost accountant to the effect that the incidence of tax, interest or any other
amount claimed as refund has not been passed on to any other person, in a case where
the amount of refund claimed exceeds two lakh rupees:

Provided that a certificate is not required to be furnished in respect of cases covered

under clause
(a) or clause (b) or clause (c) or clause (d) of sub-section (8) of section 54;
Explanation.– For the purposes of this rule,
(i) in case of refunds referred to in clause (c) of sub-section (8) of section 54,
“invoice” means
invoice conforming to the provisions contained in section 31 ;
(ii) where the amount of tax has been recovered from the recipient, it shall be deemed
that the incidence of tax has been passed on to the ultimate consumer.

(3) Where the application relates to refund of input tax credit, the electronic credit
ledger shall be debited by the applicant in an amount equal to the refund so claimed.

86
 (4) In case of zero-rated supply of goods or services or both without payment of tax
under bond or letter of undertaking in accordance with the provisions of sub-section
(3) of section 16 of the Integrated Goods and Services Tax Act, refund of input tax
credit shall be granted as per the following formula:

Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply

of services) x Net ITC_÷ Adjusted Total Turnover

Where,-
A) "Refund amount" means the maximum refund that is admissible;

(B) "Net ITC" means input tax credit availed on inputs and input services during the
relevant period;

(C) "Turnover of zero-rated supply of goods" means the value of zero-rated supply of
goods made during the relevant period without payment of tax under bond or letter of
undertaking;

(D) "Turnover of zero-rated supply of services" means the value of zero-rated supply
of services made without payment of tax under bond or letter of undertaking,
calculated in the following manner, namely:-
Zero-rated supply of services is the aggregate of the payments received during the
relevant period for zero rated supply of services and zero-rated supply of services
where supply has been completed for which payment had been received in advance in
any period prior to the relevant period reduced by advances received for zero-rated
supply of services for which the supply of services has not been completed during the
relevant period;

(E) "Adjusted Total turnover" means the turnover in a State or a Union territory, as
defined under subsection (112) of section 2, excluding the value of exempt supplies
other than zero-rated supplies, during the relevant period;

(F) “Relevant period” means the period for which the claim has been filed.

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2. Acknowledgement
(1) Where the application relates to a claim for refund from the electronic cash ledger,
an acknowledgement in FORM GST RFD-02 shall be made available to the
applicant through the Common Portal electronically, clearly indicating the date of
filing of the claim for refund.

(2) The application for refund, other than claim for refund from electronic cash
ledger, shall be forwarded to the proper officer who shall, within fifteen days of filing
of the said application, scrutinize the application for its completeness and where the
application is found to be complete in terms of sub-rule (2), (3) and (4) of rule 1, an
acknowledgement in FORM GST RFD-02 shall be made available to the applicant
through the Common Portal electronically, clearly indicating the date of filing of the
claim for refund.

(3) Where any deficiencies are noticed, the proper officer shall communicate the
deficiencies to the applicant in FORM GST RFD-03 through the Common Portal
electronically, requiring him to file a refund application after rectification of such
deficiencies.

(4) Where deficiencies have been communicated in FORM GST RFD-03 under the
GST Rules of the State, the same shall also deemed to have been communicated under
this Rule along with deficiencies communicated under sub-rule (3).

CGST Rules
(4) Where deficiencies have been communicated in FORM GST RFD-03 under the
CGST Rules, the same shall also deemed to have been communicated under this Rule
along with deficiencies communicated under sub-rule (3).

SGST Rules

88
3. Grant of provisional refund
(1) The provisional refund under sub-section (6) of section 54 shall be granted subject
to the following conditions -
(a) the person claiming refund has, during any period of five years
immediately preceding the tax period to which the claim for refund relates, not
been prosecuted for any offence under the Act or under an existing law where
the amount of tax evaded exceeds two hundred and fifty lakh rupees;

(b) the GST compliance rating, where available, of the applicant is not less
than five on a scale of ten;

(c) no proceedings of any appeal, review or revision is pending on any of the

issues which form the basis of the refund and if pending, the same has not
been stayed by the appropriate authority or court.

(2) The proper officer, after scrutiny of the claim and the evidence submitted in
support thereof and on being prima facie satisfied that the amount claimed as refund
under sub-rule (1) is due to the applicant in accordance with the provisions of sub-
section (6) of section 54, shall make an order in FORM GST RFD- 04, sanctioning
the amount of refund due to the said applicant on a provisional basis within a period
not exceeding seven days from the date of acknowledgement under sub-rule (1) or
sub-rule (2) of rule 2.

(3) The proper officer shall issue a payment advice in FORM GST RFD-05 for the
amount sanctioned under sub-rule (2) and the same shall be electronically credited to
any of the bank accounts of the applicant mentioned in his registration particulars and
as specified in the application for refund.

4. Order sanctioning refund

(1) Where, upon examination of the application, the proper officer is satisfied that a
refund under subsection (5) of section 54 is due and payable to the applicant, he shall
make an order in FORM GST RFD- 06, sanctioning the amount of refund to which
the applicant is entitled, mentioning therein the amount, if any, refunded to him on a

89
provisional basis under sub-section (6) of section 54, amount adjusted against any
outstanding demand under the Act or under any existing law and the balance amount
refundable:
Provided that in cases where the amount of refund is completely adjusted
against any outstanding demand under the Act or under any existing law, an order
giving details of the adjustment may be issued in FORM GST RFD-07.

(2) Where the proper officer is satisfied, for reasons to be recorded in writing, that the
whole or any part of the amount claimed as refund is not admissible or is not payable
to the applicant, he shall issue a notice in FORM GST RFD-08 to the applicant,
requiring him to furnish a reply in FORM GST RFD-09 within fifteen days of the
receipt of such notice and after considering the reply, make an order in FORM GST
RFD-06, sanctioning the amount of refund in whole or part, or rejecting the said
refund claim and the said order shall be made available to the applicant electronically
and the provision of sub-rule (1) shall, mutatis mutandis, apply to the extent refund is
allowed:
Provided that no application for refund shall be rejected without giving the applicant a
reasonable opportunity of being heard.

(3) Where the proper officer is satisfied that the amount refundable under sub-rule (1)
or (2) is payable to the applicant under sub-section (8) of section 48, he shall make an
order in FORM GST RFD-06 and issue a payment advice in FORM GST RFD-05, for
the amount of refund and the same shall be electronically credited to any of the bank
accounts of the applicant mentioned in his registration particulars and as specified in
the application for refund.

(4) Where the proper officer is satisfied that the amount refundable under sub-rule (1)
or sub-rule (2) is not payable to the applicant under sub-section (8) of section 54, he
shall make an order in FORM GST RFD-06 and issue an advice in FORM GST RFD-
05, for the amount of refund to be credited to the Consumer Welfare Fund.

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5. Credit of the amount of rejected refund claim
(1) Where any deficiencies have been communicated under sub-rule (3) of rule 2, the
amount debited under sub-rule (3) of rule 1 shall be re-credited to the electronic credit
ledger.

(2) Where any amount claimed as refund is rejected under rule 4, either fully or
partly, the amount debited, to the extent of rejection, shall be re-credited to the
electronic credit ledger by an order made in FORM GST PMT-03. Explanation.– For
the purposes of this rule, a refund shall be deemed to be rejected, if the appeal is
finally rejected or if the claimant gives an undertaking in writing to the proper officer
that he shall not file an appeal.

6. Order sanctioning interest on delayed refunds

Where any interest is due and payable to the applicant under section 56, the proper
officer shall make an order along with a payment advice in FORM GST RFD-05,
specifying therein the amount of refund which is delayed, the period of delay for
which interest is payable and the amount of interest payable, and such amount of
interest shall be electronically credited to any of the bank accounts of the applicant
mentioned in his registration particulars and as specified in the application for refund.

7. Refund of tax to certain persons

(1) Any person eligible to claim refund of tax paid by him on his inward supplies as
per notification issued section 55 shall apply for refund in FORM GST RFD-10 once
in every quarter, electronically on the Common Portal, either directly or from a
Facilitation Centre notified by the Commissioner, along with a statement of inward
supplies of goods or services or both in FORM GSTR-11, prepared on the basis of
statement of outward supplies furnished by corresponding suppliers in FORM GSTR-
1.

(2) An acknowledgement for receipt of the application for refund shall be issued in
FORM GST RFD- 02.

(3) Refund of tax paid by the applicant shall be available if-

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 (a) the inward supplies of goods or services or both were received from a
registered person against a tax invoice and the price of the supply covered
under a single tax invoice exceeds five thousand rupees, excluding tax paid, if
any;

(b) name and GSTIN or UIN of the applicant is mentioned on the tax invoice;
and

(c) such other restrictions or conditions as may be specified in the notification

are satisfied.

(4) The provisions of rule 4 shall, mutatis mutandis, apply for the sanction and
payment of refund under this rule.

(5) Where an express provision in a treaty or other international agreement, to which

the President or the Government of India is a party, is inconsistent with the provisions
of these rules, such treaty or international agreement shall prevail.

8. Consumer Welfare Fund

(1) All credits to the Consumer Welfare Fund shall be made under sub-rule (4) of rule
4.

(2) Any amount, having been credited to the Fund, ordered or directed as payable to
any claimant by orders of the proper officer, appellate authority or Appellate Tribunal
or court, shall be paid from the Fund.

(3) Any utilisation of amount from the Consumer Welfare Fund under sub-section (1)
of section 58 shall be made by debiting the Consumer Welfare Fund account and
crediting the account to which the amount is transferred for utilisation.

(4) The [Central/State] Government shall, by an order, constitute a Standing

Committee with a Chairman, a Vice-Chairman, a Member Secretary and such other

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members as it may deem fit and the Committee shall make recommendations for
proper utilisation of the money credited to the Consumer Welfare Fund for welfare of
the consumers.

(5) The Committee shall meet as and when necessary, but not less than once in three
months.

(6) Any agency or organisation engaged in consumer welfare activities for a period of
three years registered under the Companies Act, 2013 (18 of 2013) or under any other
law for the time being in force, including village or mandal or samiti level co-
operatives of consumers especially Women, Scheduled Castes and Scheduled Tribes,
or any industry as defined in the Industrial Disputes Act, 1947 (14 of 1947)
recommended by the Bureau of Indian Standards to be engaged for a period of five
years in viable and useful research activity which has made, or is likely to make,
significant contribution in formulation of standard mark of the products of mass
consumption, the Central Government or the State Government may
make an application for a grant from the Consumer Welfare Fund: Provided that a
consumer may make application for reimbursement of legal expenses incurred by him
as a complainant in a consumer dispute, after its final adjudication.

(7) All applications for grant from the Consumer Welfare Fund shall be made by the
applicant Member Secretary, but the Committee shall not consider an application,
unless it has been inquired into in material details and recommended for consideration
accordingly, by the Member Secretary.

(8) The Committee shall have powers -

(a) to require any applicant to produce before it, or before a duly authorised
Officer of the Government such books, accounts, documents, instruments, or
commodities in custody and control of the applicant, as may be necessary for
proper evaluation of the application;

(b) to require any applicant to allow entry and inspection of any premises,
from which activities claimed to be for the welfare of consumers are stated to

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be carried on, to a duly authorized officer of the Central Government or, as the
case may be, State Government;

(c) to get the accounts of the applicants audited, for ensuring proper utilisation
of the grant;

(d) to require any applicant, in case of any default, or suppression of material

information on his part, to refund in lump-sum, the sanctioned grant to the
Committee, and to be subject to prosecution under the Act;

(e) to recover any sum due from any applicant in accordance with the
provisions of the Act;

(f) to require any applicant, or class of applicants to submit a periodical report,

indicating proper utilization of the grant;

(g) to reject an application placed before it on account of factual

inconsistency, or inaccuracy in material particulars;

(h) to recommend minimum financial assistance, by way of grant to an

applicant, having regard to his financial status, and importance and utility of
nature of activity under pursuit, after ensuring that the financial assistance
provided shall not be misutilised;

(i) to identify beneficial and safe sectors, where investments out of Consumer
Welfare Fund may be made and make recommendations, accordingly.

(j) to relax the conditions required for the period of engagement in consumer
welfare activities of an applicant;

(k) to make guidelines for the management, administration and audit of the
Consumer Welfare Fund.

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(9) The Central Consumer Protection Council and the Bureau of Indian Standards
shall recommend to the GST Council, the broad guidelines for considering the
projects or proposals for the purpose of incurring expenditure from the Consumer
Welfare Fund.

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 Chapter 13

News Report On GST

1. GST demonstrates cooperative-competitive federalism: Modi
Tuesday, August 15, 2017 - 13:31

The implementation of GST from last month is testimony to the strength of the spirit
of "cooperative and competitive federalism" in the country and has immediately
resulted in a 30 percent increase in efficiency in the transportation sector, Prime
Minister Narendra Modi said on Tuesday.

New Delhi: The implementation of GST from last month is testimony to the strength
of the spirit of "cooperative and competitive federalism" in the country and has
immediately resulted in a 30 percent increase in efficiency in the transportation sector,
Prime Minister Narendra Modi said on Tuesday.

"GST (Goods and Services Tax) has shown that the spirit of cooperative-competitive
federalism has gained strength. Crores of people in the country have come together to
support GST and the role of technology has also helped," Modi said in his speech here
on Independence Day.

"The world is looking with amazement at how, in such a short time, so many people
have been brought into the system...this shows the capability of India," the Prime
Minister said.

From July 1, the pan-India GST replaced around a dozen central and state taxes with a
single national tax.
Modi said the movement of goods had become much simpler without any check posts
across the country replacing the earlier system, where a product was taxed multiple
times and at different rates.

"After GST, 30 per cent time is being saved by trucks, without being hindered any
more by checkposts. The transport sector efficiency has increased by 30 per cent,"
Modi said.

"Thousands of crores of rupees are being saved..GST will bring more transparency
into the system," he added.

After the GST Council fixed the rates of 1,211 products in four tax slabs of 5, 12, 18
and 28 per cent, it has received requests for changes in rates on more than 125
different products from various stakeholders aggrieved by their fitment in the new
indirect tax structure

For instance, last week the Union Petroleum and Road Transport Ministries
announced it will ask for a reduction in GST on bio-diesel from the current 18 per
cent to 5 per cent. According to the stakeholders, the high GST on the clean fuel,
which attracted zero excise duty, will make it costlier than diesel and, thereby, make it
uncompetitive.

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In this connection, Minister of State for Finance Arjun Ram Meghwal said here on
Saturday that the number of tax slabs in the GST regime would be reduced with
improvement in revenue.
Meghwal also said as many as 13.2 lakh new dealers have registered themselves in
the system after the implementation of GST.

2. GST helped cut travel time by 30%, increased business efficiency: Modi
August 15, 2017 14:21 IST
The abolition of inter-state check posts after the implementation of GST has reduced
time for movement of goods by 30 per cent and saved thousands of crores of rupees,
Prime Minister Narendra Modi said on Tuesday.

The Goods and Services Tax, which unified more than a dozen central and state
levies, is a result of cooperative federalism and its smooth rollout from July 1 has
increased efficiencies of business, he said.

Addressing the nation from the ramparts of the Red Fort on the occasion of 71st
Independence Day, Modi said technology has made the rollout smooth in a short span
on time.
"Trucks (carrying goods) are saving 30 per cent (travel) time post-GST as check posts
have been removed. This has helped save thousands of crores of rupees and more
importantly time," he said.

Business efficiency, he said, has increased. "Efficiency has increased in transport

sector by 30 per cent and because of GST such a big change has happened," he said.
The biggest tax reform since Independence, GST was rolled out from July 1. The new
indirect tax regime has subsumed over a dozen state and central levies like excise
duty, service tax and VAT, and has replaced them with four tier tax structure of 5, 12,
18 and 28 per cent for goods and services across the country.

GST has removed inter-state barriers to convert India into a single market where
goods and services can flow seamlessly.

State border check posts scrutinised material and location-based tax compliance,
resulting in delays in delivery of goods and cause environment pollution as trucks
queue up for clearance.

Modi said crores of people are behind the success of GST and the implementation of
the new indirect tax regime is an example of the benefits that can be reaped if there is
cooperative federalism in place between the Centre and states.

"Technology is a miracle. Some find it astonishing that GST has been rolled out in
such a vast country in such short span of time," he said.

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He said in initiatives like GST, ease of doing business and cleanliness drive, the
Centre and states have worked shoulder to shoulder to make them a success. He said
the steps taken by the government will benefit the country and with GST the country
will benefit.

Modi said there was a time when the Centre and states used to fight over allocation of
urea and kerosene.
The Central government, he said, had a "big brother" approach towards the states. But
all this is a thing of past with increased urea production in last three years and
alternate LPG and natural gas usage cutting down kerosene demand, he said.

"Since I have myself been a Chief Minister for long, I know that states are important
for the growth of a country. I understand the importance of chief ministers and state
governments.

"And that is why we focused on cooperative federalism and now competitive

cooperative federalism. And now we are taking all decision together," Modi said.

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 Conclusion

Implementation of GST is one of the best decisions taken by the Indian government.
For the same reason, July 1 was celebrated as Financial Independence day in India
when all the Members of Parliament attended the function in Parliament House. The
transition to the GST regime which is accepted by 159 countries would not be easy.
Confusions and complexities were expected and will happen. India, at some point,
had to comply with such regime.

Though the structure might not be a perfect one but once in place, such a tax structure
will make India a better economy favorable for foreign investments. Until now India
was a union of 29 small tax economies and 7 union territories with different levies
unique to each state. It is a much accepted and appreciated regime because it does
away with multiple tax rates by Centre and States.

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