10 years Shivdas Gst and Custom Laws.pdf

10 years Shivdas Gst

1. &ST snd
€ustonns Lsw

2. Syllabus
Un.it 1. Basic Concepts of
,
t.direct Taxes
Unit 2. Lewy and Collection
of GST
.
Unit 3, Input Tax Credit
'
Practical Questions
Unit 4. Procedures
Unit 5. Special Provisions
Unit 6. Customs Law
Practical Questions
troo0
,:,
.1.
26
60
85
B9
99
117
129

3. .'
SYLLABUS
B.Com. (Hons.)
GST AND CUSTOMS LAW
Objective: To p¡ovide students with a workirlg knowledge of principles and
provisions of GST and Customs Law.
"Èi:Jmiî"iåtåork or rndirect raxes berore GSr (raxation powers or
Union a¡d State Government); Concept of VAT: Mea¡lng, Varians and Methods;
Major Defects in the structu¡e of Indirect Taxes prior to GST; Rationale fo¡ GST;
Structure oi GST (SGST, CGST, UTGST and IGST); GST Council, GST Network,
State Compensation Mechanism, Regisfration.
UNIT II: Lery.and Collection of GST
Ta¡able event="Supply" of Goods and Services; Place of Supply: Within state,
Interstate, Import ârtd Expo¡U Tilne of supply; Valuation for GsT-Vâluation
¡ules, taxability of reimbuTsement of expenses; Exemption from GST: Smàll
supplies and Composition Scheme; Classification of Goods a¡d Servicês:
Composite a¡d Mixed Supplies.
UNIT III: Input Tax Ciedit
Eligible and lneligibte Input Tax C¡edit; Apportionments of Credit and Blocked
Credits; Tax Credit in ¡espect of Capital Goods; Recovery of Excess Tax C¡edit
Availability of Tax Credit in special circunútances; T¡a¡sfer of IÌrput Credit
(Input Se¡vice Distribution); Payment of Taxes; Refrind; Doct¡i¡e of unjust
enrichment TDS, TCS. Reverse Charge Mecharjsm, Job work.
UNIT ry: Procedures
Tax Invoice, Credit altd Debit Notes, Retums, Audit in GST, Assessment: Self-
Assessment, Summary and Scrutiny.
UNIT V: Special Prrivisions
Taxability of E-Commerce, Aiti-Profiteering, Avoidar.rce of dual coñkol, E-way
bills, zero-¡ated. supply, Offences and Penalties, Appeals.
UNIT VI: Customs Lary
Basic Concepts, Te¡ritorial Waters, High Seas, T'?es of Custom Duties,
Valuation, Baggage Rules and Exemptions.
I
'ãoîcj
Bnsrc CoNcrprs OF
. I ¡-r
* 1.1 Itackg¡ound . . i,.;
In aj1y welfare state,.it is the piime resporisibitity óflthe Governrnent to fulJil
the increasjng develop-rnen.al. nè$d,ið.lttrðrèÉrilnömy and jts people by way of
public expencliture. hdia, beinga.developing economy, has been striving to fulJil
the obligatiþns of a welfaie state witlL its limited resources; tlLe primary source of
revenue belng lery of taxes. Though the collection of tax is to augment as much
reverÌue as possit,Ie to the Govemment to provide public services, over tlte years
it has been used as an instrument of fisca1policy to stirnulate economic 8¡owtlì.
Taxes a¡e cbllected to fulfil the socio-economic ob;ectives of the GovernÍìent.
E' 1.2 l)irect and Indirect Taxes
Q. 1. Dirrferentiate between Direct and Indilóct taxes.
Ans. Di¡'ect Taxes, A Direct tax is a kind of charge,-which is imposed directly
ôn the taxpayer and paid directþ to the Govemment by the person (juristic or
naturai) on whom it is imposed. A diect tax is one that ca¡not be shifted by the
taxpayer to someone else, A sigrrificant dirèct tgx imposed in india is Income tax.
Indi.rect Taxes. If the taxpayér is iust
a conduit and at every stage the tax-
incidence ils passed on tül it finally ¡eaches the consumer, who really bears the
brur1t of it, such tâJ< is indûect tax. An indi¡ect tax is one that can be shifted by the
taxpayer td someone else. The significant indùect taxes that were being levied i¡
lndia till lrrle 2017 are excise duty, customs duty, service tax, cent¡al sales tax
(CST), vahJre added tax (]/AT), octroi, entry tax, pulchase tax ahd the like.
In ordet do away with va-rious Indirect Taxes, GST was introduced fronÌ
|uJy L, 2O1.7.
ffIiritÍffin,ï*frHû ìl(i")

4. :i
? rr,Ft¡yÀ.süñ&ffisÈiËi *".-.:- .;i.-*..-.....,.....
"..."...,......",:,i:,,:,
Different types of di¡ect and indirect taxes are presented in the figure:
iì
il
1,1
.)
j
i:l
il
!)
Ii
':i
1l
1i
;l
i
(OIl sales within thc State)
. The person paying the tax to the
Covefnment di.recdv bears the
incidencê ôf th; râY
. ProAresgive in ¡aiure. Hishe¡
rate ot taxes for p€ople hâving
higher abiliry ro pay.
t+ 1.3 Constitutional F¡ameworle
Q. 2. Which Government bodies cont¡ol and Administe¡ di¡ect taxes and
indLect taxes in india?
, Ans. lndia has a three-fiei federal strlrctule, comp¡ising the Union
Govemment, the State Gove¡nments and the Local Govem¡irentr.-Th" po-"a to
lely taxe6 and duties is dist¡ibuted among the th¡ee tiers of Governrnent in
accordãnce with the provisions of the l¡rdia¡ Constiiution.
The Constitution of India is the supreme law of l¡rdia. Ìt consists of a
preamble,
22 parts containing 444 Articles and 12€chedules.
IndùectTax
. The person paying the tax to the
GoveÍìment collects th€ salne ftom
the ultiÃlate customei. Thus, incidence
of the tax is shifted to rhe othe¡ person.
. ReseEsive in natue. A¡l rhe
consümers equally beù rhe l,urde¡t
iÌ¡espective of thei¡ ability to pay.
-
Power to.lery and collect taxes whethe, dùect or indirect emerges from the
Constitution of India. In case any tÐ( law, be it a¡r act¿ rule, notificatià o¡ orde¡ is
not in conforinity with the Constitution, it is cauéd ultrø z)ires the Constitution
and is illegal and void.
Thus, a study of the basic provisions of the Constitution is essential for
understanding the genesis of the va¡ious taxes beiñg imposed in IrLdia. The
significant p¡ovisio¡rs of the Constitutionmtrcant p¡ovlarons oi the Constitution relating to tâxation a¡e:
1. A¡ticle 265: Article 265 of the Constitution of I¡rdia p¡ohibits a¡l
r. ,¡rñcre zÞJ: ltrcle zb5 ot the Cor¡stitution of India ptohibits albitra¡y collection
of iari. lt statés that'1no tax shatl be levied o¡ collected elcep tbv quthoritu of lalÐ":
Tt\e terrí øuthoity o/ ta?r mea¡s that tax proposed to be levieå musfbe within the
legislative competence of the lægislature imposing the tax.
2. A¡ticle 245: Part XI of the Constitution deals with relationship between the
Union a¡rd States. The power for enacting the laws is cor¡Jerred on the pa¡liarrient
and on the Legislatue of a State by Article 245 of ttre Constitution. The saiìl
Artjcle provjdes as under:
(i) Subject to the provisions of this Constitution, parliament
may make laws
for the whole or a¡y part of the teffitory of India, and the legislatu¡e of a
State may make laws fo¡ the whole or any part of the State.
(ll) No law made by the Parliament shall be deemed to be invalid on the
grou¡d that it would have extrà-tenitorial ope¡ation.
exceptby .,uthorìtV of lazD"

5. fiË4å.
3. A¡ticle 246: It gives the respeðtive autho¡ity to Union aftd Staie
Goveûunents for levying taxes. I4¡hereas Parliament may make laws for the
whole of India or a¡y pâlt af the te¡ritory of Irrdia. the State Legislature mây
make laws for whole or part of the State,
4. Seventh Schedule to Article 246: It contai¡s three lists which enumerate the
matters urde¡ which the Union and the State Gove¡rEnents have the aut¡ority to
make laws.
, i-------------- ----------- _----
i-----_
I
ri"t-r, u¡vror,¡ usr
| |
.ui"t-ll srlrr lrsr
| |
Li"t-n¡, co¡¡ci-rnnegr r-ãT-l
I It contains rhe maue" I I rrco;tri'* ,t';;ai;J flr,..,..o"i"L. rn. -.n
^
-']
I in respectof which th" I I i¡re.p".l ofwtLicn t¡e J I in¡esoeci oÉ wbich I
I PaÌliãment (centrat ll Staie Covemment I I borh üìe Central and I
I
Govemment¡ has | |
has rhe er.tusìve right i I th. Stote Co*,e,runent.
I
I
the exclusive risht ro
ll
b *o{!1"-.._l
I
have power to m¿Ìe l¿ws.
I
I
make laws.
I
Entries 82- to 92C of List I enumetâte the subjects where the Cenkal
GoveÍìment has power to leay taxes. Entries 45 to 63 of List II enumerate the
subjects where the State Governments have the pow€¡ to lely taxes: paÌliameñt
has a further power to make any law for,,.ar.i¡r'
iart
òf India not comprised i¡ a
State even if such matte¡ is included i¡i thêìStâte.rl-ist.. '.
Q. 3. Write a sho¡t no¡e;ò¡r..áltect and indilect taxes lavied onder va¡ious
tists provided in Seventh schedule to the constitution of india.
Ans. The table givenrb.{1ôw..énlists the significant dùect as well as indtuect
taxes being levied in lndià ü¡rde¡ the va¡ious ãnt¡ies of the Union and State Lists.
The¡e is no head of taxation in the Concurrent List (Union and the States have no
conculrent
Incor¡re tax [Entry 82]
Taxes on i¡come otlìe¡ lhalr
agricultural incor¡e.
î$S;i¡ilÍirii*ü.i'ffi¡Ëii#* .
Customs Dutiès [Entry 83]
Duties of Customs includi¡g export
duties. .
Ceût¡al Excise Duties lEntry 84]
Duties of excise on tobacco arrd
other goods mânufactured or
produced in india except a-lcoholic
liqrrors for hurnân consuÍiption,
opium, India-n hemp and other
narcotic drugs afid narcotics, but
inciuding . medicinal and tõi1et
preparatiôns contairúng alcohol or
Taxes on the sale or pur.chase of
goods (excluding newspapers)
except tax on i.nter state tfacle ol
comrnelce.
m / indian hemp / narcotic
çeiitral Sales Tax lEniry 924]
Toles on the sale or purchase. of
goods otlrer than newspapers,
whe¡e such salê or purchase takes
place in the course of inter-state
llade or comfneice
Duties of excise on alcoholic liquors
for human consumption; opium,
Indian hemp a¡d othe¡ naÌcotic
drugs and narcotics. The entry does
not i¡clude duties of excise on
medical and toilet preparations
contairri¡g alcohol or .opium/
Indian her¡p/other na¡cotic drugs/
narcotics,
Se¡vice Tax lEnfi 97) .''
fu1y otlÌer matter not enumerated
i¡ List ll or List Ill iñcludi¡g any
tax not mentioned iì1 either of those
The principal cenhal and state level indirect taxes being levied in lndia along
witlì tlìe relevant statutes are tabulated below:
Excise D¡rtv
[Cent{al Value
Added Taxl
(cENVAr)
Customd Duty
A tax on the manufactule or'
production of goods in lndi.1
irnposed by the CeÌ1tr¿l
Gove¡nnent.
Basíc Çenercl rate: 12.5/.
A dutj¡ imposed by
Cent¡al Gove¡rEnent
goods irnported
exported out of IrLdia,
Basic General Rate: 10%
Additional duty of customs
(Ca¡D) equivalent to the
excise duty levied on .like
goods produced ir.I India
(12.5'/") + Special additional
ìÁ.
olt
i¡io/
of customs @ 4%.

6. q f ,9t'tv.A-t¡,Éh&iËm#iúsfü,,i",,.,#ih*H"it¡1,...;',",;1. i.1:r....
,,,í ,
Service Tax
Central Sales Tax
Chapter V and VA of the
Fina¡ce .Act, L994'
Value Added Ta¡
Cent¡al Sales Tax Act 1956
Besides these, the¡e a¡e other i¡dfuect-..tax€!.
,¡ikg
entry tâx, luxury tax,
ente¡tai¡ment tax etc. levied by the State:.Gô.i/,e¡nments. Muniçipal or local
aul.horities also impose taxes lfüe octroi or,lgéal aiêa táxes.
The Deparrmeni
"f
RèJen. d.i.fi¿,i,Mi{iåå1i"äi'iuu¡r"" exe¡cises conr¡ol in
respect of matters relati4g
f
to
.gl1-.'"t:1he,]
iidûect taxes through statutory Boards,
namely, the Central Bõaiìl'.ôf Excise and Customs (CBEC). The Bo¿ud has been
A tax imposed by the Centfal
Govern:ment. on the services
(except the se¡¡ices cove¡ed
irt the negative list öf se¡vices
ând exeIJipted selvices)
R1te: 14%
VAT Acts of respective State
governments
constituted under the Central Boa¡d of Reve4ì¡e Act, 1963.
i
CBEC deals with the tasks of fo¡mulatioìr óf policy qoncerning levy and
collection of customs and central excise dúties a¡d service tax, prevention of
smuggling and ad¡ninistiation of mattets lelating to customs, ce ¡al excise,
narcotics to the extent under CBEC's purview and se¡vice taxl'The Board is the
administrative âuthority fo¡ its subo¡dinate organizations, including Custom
Houses, Central Excise and Service Tax Commissionerates.
The State level indi¡ect taxes are administered by Comrnerciaì Tax
Depaftments of the respective states.
A tax on the inter-state sales
of goods, imposed by the
Central Government but
appropriated by the
originating state.
Røte: 2%
A tax on the i¡t¡a-state sales
of goods, imposed by the
re 1,4 Concept of VAT
Q. 4. What is VAT? Eiplain it with the.help of an example.
_Ans.
Value Added Tax (VAÐ, as_the term suggests, is a tax on the value
added to the comqrodity at each stage in production and dist¡ibution chain, It is
a system to collect the tax on the value at the final or tetail point of sale. VAT is a
Rate generally at 5% a¡d
12.5%
consumption tax because it is borne ultirnately by the final consumer.
Let us try to under6ta¡d the concept of VAT with the help of an example.
saásá¿¡¿tì ,*Ì--^:..^:
Q. 5, How doe6 VAT operate?
Ans, Value Added Tax (VAT) is levied âs a p¡oportion of the value added at
each stage of production o¡ distribution (1.e., sales ninus purchase) which is
equivalent to -,vages plus i¡terest othel costs arld p¡ofits. To ìllustrate, a cha¡t of
transactions is given belou:
r--;;;.,*.,"
-_-l
l&ìlelrice=?3ro I
I
cross vAr @ 12.5% = T37.J0 |
--------------->
I NeiVAT = 121, i.?., I
I
t¡:z.so - (¡lz.so * r+ll
I
1
I
l-----;;""",,*__-]
I Sale rrice = rloo I
I Gross VAT @12.59" I
I = rrz.so I
I
N"t v¡r = uz.so
I
FoÌ a manuJacturer A, inpûts aÌe p¡oduct X and product y which a¡e
purchased from a primary producer, In practice, even these producers use
inputs. Fol example, a farme¡ would use seedg feeds, fertilizer, pesticides¡ etc.
However, for this example, thejÌ VAT impact is not considered. B is a wholesaler
a¡d C ìs a retailet.'
The inputs X and Y are pwchased at Tl00 each on whi.ch tax is paid @ 12.S%
f- wh"r"J",--]
I sale Price = T4oo I
I cross vAr @ 12.5% = {50 |
I Ner VAT = {12.50, r.¿.. I
I
rrso - r¡z.sol
I
I
I
l- -"**"
_l
I sale Pnce = T5oo I
[email protected]% J
| = t625o I
I Nut var = trz.so
'.".,
I
I
rtøz.so - r;ol
I

7. r:.qiii:1+'iiaf,
and 4% respectively. 'After adding wages, salaries and othe¡ manufacturing
expenses to the cost of inputs, Ma¡ufactue¡ A will also add his own plofit.
Assuming that aJter the addition of al1 these costs fus sale price is 300, the gtoss
tax (at the rate of 72.507.) would be T37,50. As nÌanufactuter A has already paid
tax on {200, he would get credit for this tax (i,e., T12.50 + <4 = f16.50). Therefore,
lús net VAT liability rvouìd be {21 only ({37.50 minus <16.50) and because of this,
he would take the cost of his inputs to be only {200.
Similarly, the sale price of t400 fixed by Wholesaler B would have net VAT
liability of {12.50, l.¿., (<50 -
(37.50) and the sale price of {500 by retariler C would
also have net VAT liability of t12.50, t.¿.; (T62.50 - t50). Thus, VAT is collected at
each stage of production and distribution process, ard in principle, its entte
burden falls on the fi¡al consuûrer, who does not get any tax ctedit. Hence, VAT
is a b¡oad-based tax covering the value addêd by each pafty to the coml¡odity
during the vùious stages of production and dìskibutjon.
s 1.5 Va¡iants of VAT
Q, 6. Enlist and explain varialts of VAT.
AJ¡s. Various types of oariq.nts of VAT:
(i) Gross Product Va-riànt. The gross product vê¡ia¡t allàws deductions for
taxes paid on all purchases of ¡aw ma-teriâls and componènts, but no
deduction is allowed for..taxeslprü'il6ii:öäþiÌaf,iiáþuts.
(ri) Income Vadan¡:1,trÞ.¡ryç;ritè1ià¡an¡ldf
rVÁT
òn the other ha¡d allows fo¡
deducLions on the purchase of raw malèrials and components as well as
depreciation on lç'4þ!_fa1:
:gòods.
This method provideS incentives to
classify purchasés'äs cuÍent expenditure to clai¡n set-off.
(ill) Consumption Variant. ftis vaiiant of VAT allows deduction for all
busÍness purchases includi¡g capitai assets. Thus, gross investment is
deductible in calculating value addêd. It neithei distiaguishes between
capital a¡d cufient expenditu¡es no¡ specifies the life of asset o¡
depreciation allowances for different assets.
The consumption vadant of VAT is the most widely used vaÌiant of the VAT.
Seve¡al countries of Ëurope and other continents hâve âdopted this va.riant as it
does not affect decisions regarding investment because the tax on capital goods is
also available fo¡ set-off against the VAT liability. Hence, the system is tax
neut¡al in respect of techniques of production (labour or capital-i¡terLsive). It also
simplifies tax administration by obviati¡g the need to disti¡guish between
purchases of inputs arld capital goods.
h practice, the¡efore, most cou¡tries use the consumption valiant. Also, most
VAT cou¡kies i¡clude many services in the tax b¿se. Since the businesb gets set-
off fo¡ the tax on ser:vices, it does not cause any cascading effect.
r 1,6 Methôds of Computation of Tâx
Q. 7. Write a note on different methods of computation of VAT.
A\s. Methods oÍ coupU.tgtLo!
-of.VAT:
(i) Addition method. This method aggregates all the factor paymentE
';:,:it : .: ,
! 1:i .,i
iÌullirffiïtrtW .
"
(excluding value of material) including profìts io arrive at the total valuc
addition on which the tax rate is applied to calculate the tax. This type of
calculaäon is mainly used with inconre va¡iant of VAT. A d¡awback of
t¡is method is that it does not facilitate matching of invoices for detectin€l
evasion as tdx liability ¡s calculated periodically and not i¡vo¡ce-w¡se.
(ii) Invoice method. This is the most common and þopular -method for
computing the tax liability ulder VAT system. Under ttris method, tax is
irrtposed at each stage of sales-oñiñéãñEi-e sale value and dre tax paid at
the earlier stage (on purchases) is a.llowed as set-off. Thus, at every stage,
differentiâl tax is being paid. Ihe most i¡nportant aspect of this method is
that at each stâge, tâx is to be charged separately in the inwoice.
This method is very popular ir-t weste¡n count¡ies. Ifr India a1so, this
method was followed u¡der tìe State Level VAT- ãnd the Cent¡al Excise
L¿Lw befo¡e the advant of GST. Thii method was also called the 'Tax
Credit Method' or 'Voucher Method'.
Exanple:
MäÌrufactu¡ei/Fhst sellei in the
state gells the goods to distribulo¡
fo¡ {1,000. Rate of tax is 12.5%.
Therefore, his tax will be t125. He
will not get any VAT credit, being
the fi¡st selle¡.
2Dist¡ibuto¡ sells the
Boods to a
deale¡ fo¡ Í7,200 @ 1250% a¡d
will get set-off of the tax paid at
eârlier state t.¿., 11Æ. Thus, the
tax payable by him will be T25.
3.Wholesaie dealer sells the goods
Lo a reLailer at <1,500. He¡e agairì,
he will have to pay tlle ta-x on
<1,500. He will get credit of tar
paid at eadier stage of t150. The
tâx payable bY hirn will be (37.50.
725
4Retailer sells the goods to
consumers at (2,000. Again, he
will haye to pay ta.r< on T2,000. He
will get credit for tax paid at the
earlier'stage of {187.50. The t¿lx
payable by him will be <62.50.
150
Thus, the Govemment will get tax on the final retail sa.le price of T2,000.
llowever, the tax will be paid in i¡stalments at different stages. At eacÌr
t25 25
250
.50
787.50
712.5O 462.50
62.50
250

8. il
:tl
¡ì
¡
ll
i
I
j
l
:j,
3
i
1
j
I
1"ìll{Erlriã: ;:ïli:it:i i:ii:r,,
stage, tax liability is wo¡ked out on the sale price and credit is also tiven
' on the basis of tax c\arged in the purchase invoiòe. lf the fi¡st sellei is a
marLufacturer, he getl the credit of tax paid on raw materiak;, etc. which
a¡e used in the manufacturing.
From the aboùe illustration, it is cleat that under this methód, tax credit
ca¡¡ot be claimed u¡rless and until the pu.rchase invoice .is produced. As
a result, in a chain, if at any stage the transaction is kept ouiof the books,
stiÌl there is no loss of revenue. The Goyemment can tecovet the full tax
at the hext stage. Thus; the possibility of tax evasion, if not entüely ruled
out, is teduced.to a minimi¡m. Howevet,
þroper
measures are require-d to
prevent the ploduction of fake invoices io cÌai¡n cred.it of tax paid at an
earlier stage.
It is said tlrat in this method, the beneficiary is the trade and industr.y
,
because in the above example, the total tax collection at all the stages is
T712.50 whe¡eas tax leceived by the State is oñIy <250.
(llí) Cost Ei¡bkaction method: Unde¡ this method tax is charged only on the
value added at each stage of the sale of goöds. Since the tqtal value of
goods sold is not taken into account,, the question óf gtant of:claim for
set-off o¡ tax credit does not ârise. Fu-rthet rlrider this method tax ca-nriot
be shown separately in invoice at-t{iìta¡. iiabiiity
"al
only be calculated
periodically. Since, tax p:rii.able on a
þ¡ãd!,rct
ib not known, end-use based
exemption canrrô!þ*.æye¡iii:n4f r tbii ;aä¡noa.
For imposing tå:ù¡,!yqt¡id,4è4dai'îit simply taken ad the diÍfe¡e¡nce between
sales ald purchases
Tax is calculated bv the formula.= T
;Y]?'..:ri,,,'''."er and R = rax Rãre
iiil!rtr&åíil}ê1å$å!i)1,i*;ç,@
!,,i;.ol
This mefhod i6 suitable fo¡ gross product variant.
thus, under this system also, tax is charged at each stage and the hcidence of
tâx.:n the- final sale price io the-consumer remains the same as in the invoice
method. However, rhis holds øoo4 ¡1¡ tf.," ti*. *,u-"ã*"luäü,ü i" urou.,uo o'all i¡puts, inctudiag consuriables arrd sewices,
"dd;;-;l'
;" stages ofproduction/distribution. lf the râtes. are no,t comme.n, tf,.r, it
"-firåf
tax by the
two methods may'differ. This is explained ,I*.;õ',Àä äãmprå"'äi"r, ¡"ro*,
All Inputs taxable at O-NE Rate
7.First seller sells tlrc goods to a
distributor at (1,125 inclusive of
tax.
2.Dist¡i¡utor sells the goods to a
whole-saler at <1,350. He¡e, taxable
turnover will be 41350 - <1.125.
3. Who.lesale¡
*SëI5-fhë-goÞds
to a
retailel at T1,687.50, He¡e, taxable
tutnover will be {1,687.50 - {1,350.
4. Retailer se.lls the goods at l¿250.
Taxable turnover wilì be {2,250 -
<16a7.50.
225
îiü,i:l
l?1.,..¿,.
Inputs for A
A sells goods fo B
562,50
25
B sells goods tq Ç-
C sells goods to D
D sell6 Eoods to Ë
37.50
(337.50x12.s0)l
-100.1150
]
62.50
f(i62.so' t2.so)l
L 1oo+1rso I
lnputs for ,A
Prodllct X @ 4%
Product Y 12.5%
A sells goods to B
B sells goods to C
All Inputs taxabie at DIFFERENT Rates
,,
125
200
C sells goods to D
D sells goods to E
htooice method
770
7725
1800
2250
2700
650
1000
1600
2000
2400
,o
200
250

9. r*"re
Suüsbaction method
Thus, on the safne consumer price_òf T2700, r¡¡rde¡ inwoice rnethod VAT works
out to be 1300 whereas u¡rde¡ the substraction methocl it wo¡ks out to be {281.
Therefore, this method is not considered as a goocl method.
* 1.7 Major Defects In The Structure of Indirect Taxes
Q. L What ale the demerits of indìrect svstem of taïes?
Ans. Demeríts of V.4T System:
(i) Cascading effect.
-The
system of multiple levies distributed behveen
Cent¡e and States.tesuits into cascading eflect (i.e.,.tax on tax). For
instance, no credit of State VAT is al1owed,.agai¡st Centlal Tax. CST
credit paid in the origjnating StateliÉ alsoi nól:,a1lowed in the receivj¡g
State, This results in the inc¡eade i¡ thè:oúei.ìll b'rüden of tax in the hands
of end consumer and qeates distortion i¡ the ma¡ket.
(il) Exemptions &:Co¡céidiòni; Uiìder rhe VAT system, businesses enjoyed
many kinds
"f
exÈii!þfiOiis and concessions under different levies which
b¡oke the chain oi Vet and thus c¡eated disto¡tion. A.lso these kinds of
benefits do not create a level playing fielcl especially when the same
commodity is taxed at different rates i¡ different ju¡isdictions,
(i;l) Lack of transparency. Under excise and service tax law, there wàs no
mechanisllt to c¡òss ve¡ify the claim of CENVAT credit made by the
ma¡ufacture¡/service prôvider. Even under State VAT laws, ail ,the
States in lndia did not have the. mechanism to cross ve¡if the creditq.
(iz.') Lack of unifo¡mity in provisions and rates. The VAT sttucture ac¡oss
the States lacked uniformihj, which was not restricted only to the rates of
tax but also the qedit prbvisions as well as procedufes. j
(?) Multiple- poi¡rts of ta¡Àtion. Unde. the VAT system there were multiple
points of taxation. Excise was levied when goods manufactu¡ed wãre
clea¡ed f¡o¡n the factory p¡emises irrespective of the fact that the
clea¡a¡ce was oit. accou¡t of sale o¡ otherwise. Stäte VAT was levied on
the sale of goods. Entry tax was levied on the entry of goocls in a
pa-rticulaÌ 5tate.
(ai) Complexity in determining the natu¡e of transaction- Goods
"s.Services. The distinction between
toods and services found in the Indian
Constitution$ae-åe€oÃtçmore complex. Toàay, goods and se¡vices a¡e
being packaged as comfosite bundles and offe¡ed fo¡ sale to custome¡s
u¡der a va¡iety of supply-chain aÌlangernents, Under the division of
:liriii,l.iËft &#ii;{$.ffi :Íi}W"#ffi .!-ii
taxation powers in the Constitutiorç neithô¡ the Cente no¡ the States can
apply the tax to such bu¡dtes in a sea-qùess man¡er. Each Covem:ment
could tax only parts of the bundle, creating overlaps in taxation.
(?rii) Narow base. Due to different tfuesholds u¡de¡ different lar¡s as well as
nuErerous exemptiohs and concessiory, the tâx base urder indirect tax
was n¿úrow as compared to other cou¡kies.
(zriiÐ Mulltiple administrations. Unde¡__lbq_gl¡stem, businessmen we¡e
requtued to visit differerit tax offices according to the applicable laws to
his business. This inc¡easeed the corirplia.nce cost of_ businesses a¡d
woxrld lead u¡mecessaly complexity.
.
ç 1.8 Rationale of GST
Q. 9. Dis'tuss the rationale of GST.
Ans, Ratlonale of GST:
(i) GST ìs a value ädded tax levied on manufactu¡e, sale and consumption
of goods and se¡vices. GST offers comprehensive and èorìtinuous chain
of tax qedits from the producer's point/service p¡ovidefs
Éôint upto the
¡etailer's level/con-sume¡'s level thereby ìaxing oirly the value added at
each stage of supply chain.
(il) The supplier at each stage is permitted to avail sedit of GST paid on the
pu¡:hase of gdods and/or services and ca¡r set ofl tlús credit atainst the
GSTI payable on the supply of goods and services to be made by him.
ThùLs, orùy the fi¡al consqmer bears the GST chqrged by the iast supplier.
in the supply cþairç with set-off benefitJ at all thá previous stages.
(ili) Since, only the value added at each stage is taxed urider GST, there is no
tax on tax or cascading of taxes under GST systèm. GST does not
diffeÌentiate betwee¡i goods ánd services and thus, the two ate tâxed at a
single rate.
!+ 1.9 S,tructure of GST (SGST, CGST, UTGST & IGST)
'l'iÈ.Í,'
A^s. Stfitcture of GST:
L- Dual GST. I¡rdia has adopted a dual GST which is irrLposed concrurrently by
the. Centre and States, i,e,, Centre arid States sünulianeòusly tax goods a¡d
services. Centr_e has the polÞe¡ to tax inha-state sales & States are empowered to
tax se¡viceé. GST extends to whole of India includirig the State of Jamlflu and
Kashmi¡.
2. CGSïII'SGST ITGSTIGST. GST is a destination based tax applicable on all
t¡a¡sactiorLs involving supply of goods and services for a consideration subiect to
exceptions thereof, GST in fndja coniprises of:
(í) Central Goods and Service Tåx (CGST)- levied a¡d collected by Central
Cove¡nment.
(il) Sia{e Goods and Seivice Tax (SGST)
-
levied and collected by the Statè
Goryemdrents or Union Te¡ritories w-ith StaÍe l-egislatu¡es, and
'
Q. 10. Explain briefly the structu¡e of GST.
ü
ü

10. ''to.,**'¡-tu'gi¡iW:iúr:i:*;:¡ll¡jll.,"...',.,-..,.,"...',,
(iii) Union Teûitory coodg and Service Tax (UTGST)
-levied
iand collected
by U_nion Territories without,State Legislatures, on inka_state supplies of
taxable
toods and/or services.
(i?r) Integated Goods and Se¡vice Tax (IGST)
-lsyis¿
on Inter-stâte supplies
of taxable goods and/ot services. IGST is approximately the sum total of
CGST and SGST/UTGST a¡d is levied by Cenrre ;n aU inrer_state
supplies.
3, Legislative frainework, There is iingle legistation
-
CGST A,ct, 2017 for
ler'ying CGST. Sirnilarly, Unìon Territories r ¡ithout state legislatures [Andaman
a¡d Nicoba¡ Islands, Lakshadweep, Dadra and Nagar Haveli, Danan and Diu
and Chandigart'.1 are.govemed by UTGST AcÇ2017 for levying UTGST. States
and Union te¡ritories with thei¡ own legislatu¡es [Delhi and Puducherr¡r] have
their own GST legislation for levying SGST.
Though there are multiple SGST legislations, the basic features of law, such as
chargéâbility, definition of taxable event and taxable peisor! classification and
valuation of goods and services, procedu¡e for collection a¡d levy of tax and the
lil<e a¡e u¡riform in all the SGST legislations, as fa¡ as feásible. Thii is necessary to
preserve the essence of dual GST.
5. Composition SclEine. In GST regirne, tax (1,¿., CGST and SGST/IJTGST for
intra-state supplies and IGST fo¡ inte¡-state,supplies) is payable by every taxable
person and in this regârd provisions have been presc¡ibed in the iaw.
However, for providing relief to small businesses making intra-state supplies,
a sirnpler method of paying taxes and accounting thereof is a_lso prescribed,
known as Composition Levy.
rs 1.10 GST Counëil
Q. 11. Write a short note on GST Council.
A¡s. As per.Articfe 2794 (i) of the Añended Constitution, the GST Cor¡ncil
was to be constituted by-the P¡esident witìin 60 days of the cômmencernent of
Atttcle 279A- The notification for bringi¡g into forte Arrlcle 27gA with effecr
from 12h September, 2016 wasjss¡¡ect on 10ù September, 2016.
As per Article 2794 of the Amended Constihrtiöf! the GST Council wtrich wiJj
be a
ioint foru-ur of the Centre and the States, shall consist of the,following
members:
. Union Finance Mini ste
-
Chaitpersort
. The Union Mnistel of State, in-charge of Rewenue o f Fjnance _ Meatbet
. The MiÌristq in-<harge of Fina¡rce ot Taxation or a¡y other Minister
nomi¡ated by eàch State Governûtent
-Mcmbets
As per Article 279Á' (4), the Councit will make recommendations to the Union
),;,i;üüiiill¡-i*lìtfliiÈ¡1,,i:;+pereiiäerryi
_.*,1.s_,
and the States on impo¡tânt issues relatea t" CSf, tIãìilJloods and services that
ûlay be_subiected or exempted f¡om GST, model GST Laws, principìes that
govern Place of Supply, ttueshold lùnits, GST rates including the Àoor ¡ates with
bands, special rates fo¡ ¡aisi¡g additional resou¡ces during natural calamities/
disasters, special provisions fot ce¡tain States, etc.
I'lhe
Union Cabinet u¡rder the Chairmanship of prþe
Minister Sh¡i Na¡end¡a
Modi approved setting up of GST Council àn.12th September,2016 and also
settìn8 up its Secretaiat as per the following details:
. . Creation of the GST Council as per Article 279^ of t]l¡re amended
Constitution;
. Creation of the GST Council Secretariat, with its office at New Delhi;
. Appointment of the Seêretary (Revenue) as the Ex,officio Secretary to the
GST Cor¡¡cil;
. Inclusion of the Chai¡pe¡son, Cenhal Boa¡d of Excise and Customs
(CBEC), as a pe¡manent invitee (non-voting) to all proceedings of the
CST Co¡.¡¡cil;
. Create one post of Additional SecretaÌy to the GST Corjncil in the GST
Council Secretariat (at the level of Additional Secreta¡y to the
Government of lrrdia), and four posts of Cou¡ûrissione¡ in the CST
Cou.ncil Sec¡etariat
{at the level of Joint Secretary to the Government of
India). The Cabinet aÌso decided to provide for adequate furds for
meeting tàe recurring and non-recurrirg expenses of the GST Council
Secretariat, the entire cost for which shall be bome by the Central
Govem¡nent, The GST Council Secretariat shall be ma¡med by officers
taken on deputation from both the Central aj:rd State Governments.
r+ 1.11 GST Network
Q, 12. Write a short note on the structu.re of GSTN.
A¡s. The Goods and Se¡vice Tax Network (or GSl$ is a non-profiÇ non-
govemment organization. lt will manage the entire IT system of the GST portal,
which is the mothe¡ database for everythirig under GST. This portal will be used
b)¿ the govemrhent to track every financial transaction, a¡d will provide tax-
payers with âll seryices-fiom ¡egistration to filing taxes and maùtaining all tax
details.
Stnrctarc ol GSTN:
Private players own 51% sha.re in the GSTN and the ¡est is owned bj¡ the
Govemment. The authorized capital of the GSTN is t10 crore (JS $1.6 minion), of
which 49% of the sha¡es a¡e divided equally bgtween the Central and State
goveûlrnents/ and the remai-ning is with p¡ivate banks.
The GS.TN has also been approved for a non-recurring grant of {315
crores, The co¡rtract for developing this vast technological backend was
awaÌded to InJosys in September 2015.
The GSTN is chaired by Mr. Navir Kulrtar, a¡ I¡dian Administràtive Service
serva¡t (1975 batch), who sewed in marty senior positionJ,with the Gôvernment
of Biha¡, a¡d the Cenhal Govemment.

11. 19, t-Wv,âtEt*fis Frå:{*i.1¡flnri¡:,1,r,,t;,t;ttf;illiii.jf,Ë}4rrîj¡i,,:it
Q. 13. What are the sal¡ent features of GSTN?
A]is. Salient
leataTes of the GSTN: T]ne GSTN is a complex IT initiative. It wilt
estâblish
_a
uniforqr interface fo¡ the taxpayer arld also create a com¡non a¡rd
shaJed IT i-nf¡astructule between the Cent¡e aÌrd States.
(i) Trusted National Info¡mation Utility. The GSTN is a trusted Narional
Information Urility (\mÐ providing reliable, efficient a¡d robust IT
backbone for the smooth functioning of GST in India.
(ii) Handles Complex Transactions. GST is a destination based tax, The
adiustment of IGST (for i¡te¡-state trade) at the government lèvel (Centre
and valious stâtes) will be extremely complei, considering the sheer
volrrme of hansacfio¡s all over India. A rãpid settlement mechânism
amongst the States arid tlìe Cenhe will be possible orùy when the¡e is a
strong ff infrastructule alrd service backbone wlúch ciptu_res, processes
. and exchanges information.
(iii) All i¡formation will Le secure. The government v/ill have shategic
cont¡ol over the GSTN, as it is necessarj, to keep the information of all
taxpayers corLfidential and secu¡e. The Cent¡al Govemmènt wiil have
cont¡ol
.over
the òmposition of the Board, mechanisms of Special
Resolution and Sha¡eholde¡s Agree.rnen_t-q4d:agreements betweà the
GSTN- and_ o her stut go"..i'me$áit¡Ájþj:,.r1Íé.,eia¡eholding panern is
such that the Gowe¡nrneri! shareholding,at 49% is fa¡ mo¡e ihin that of
a¡y single private:insJitu tion
(i.r) Elffenses wiu be-eha¡e¿'i:ThÞ'ùser charges will be paid enthely by the
!¡n!ra.l
cowemrqerú and the State covemments in eiual proporiio.,
11.".,
50 : 50) on bêhaff óf all the use¡s. The state sha¡e will,Ëe th¿n apportioned
to individual statês, in proportion to the number ol taxpavers in the state.
Q. 14. Write down the functions of GSTN.
Ans- Functíons of GSTN. GSTN is the backbone of the ComÍron portal
which
islhe interface between the ta-apayers arìd the gover¡rme¡rt. ff.r" ."tir"
þ.o.1"" ái
GSI is online sta¡ting from regishation to the fi_li¡g of returns.
It has to support about 3 billion iniroices pêr- month and the subsequent
return filing for 65 to 70 lakh tax payers.
The GSTN 71rìll hafldte:
. Invoices
. Various returns
.
Registrations
. Payments and Refunds.
* 1.12 State Compensation Mechanism
Q. 15. W¡ite a
_short
note on State compenaation mecha¡rism under GST.
'ltirdiii¡rllfü$rl1¡åriil,,i].li'*¡iF,ffi i,ii¡'
' Foi the purpose of ca.lculàting the compensation ar4ount in afly financial
yelc, year 2015-16 is taken as the base year, from which.revenue will be
pr¿iected. The growth rate of revenue for a stâte during the five-year
period is âssumed to be 74o/. per arìnum.
.
The base yeâl tax reïenue shall consist of ttte statils tâx ievenues frorn:
(r) State Value Added Tax (VAT), (ii) Ce-ntral Sales Tax,
(iii) Entry Tax, Octroi, Local Body Tax, (iz) Taxes on Luxuries,
(d) Taxes on A.dvertisements,-+tc,.*.-.*---
However, any revenue among these taxes ârising related to suPPIy of-
(f) alcohol for hurian consumption, and
(ii) certain pet¡oleurn products
i¡troduced in tok Sabha on Ma¡ch 22, àotz.'mà n r pÃia-""ã.
"ã-p.o.ution
Ans. The Gooãs and Services Tax (Cômpensation to Sfates¡ nn-,- ZOLZ *u"
roduced in tok Sabha o lla\ch 22, i\l7.
-The
Bi.tl o¡ovide" fá"
"á....""^-to states for an)¿ loss itì+€+'enre-due to the implementation of GST.
. Cornpensation will þ provided to a state for a period of five yeard from
the date on which the state bdngs its State GSTiAct into force.
'lvill not be accounted as pa¡t of the base yeai ievenue.
. ',ti]e
compensation payable to a slate has to be provisionally calculated
a¡r<l released at the end of every two months. Fu¡thet an annual
cal,culation of the total revenue will be undertaken, which will be audited
by the Coinptroller and Audito¡ Gene¡ai of India.
. GST Compensation Cess may be levied on the supply of cettain goods
an¡l services, as recommendèd by the GS'T Co.uncil. The receiPts fronÌ the
cess will be deposited to GST Compensation Fund. The receipts will be
used for compensating stàtes for any loss due to tlte imPleñentation of
GST.
. The cess will be capped at:
(i) 135% for Parr masala,
(t¿) <400 per tonne for Coal,
(äí <4,170 + 290% pet 1,000 sticks of,Tobacco, and
(ia 1^5% Íor all other:goods and services including motor cars and
aerated w¿ter.
. Arly unutilised money in the Compensation Fl¡nd at the end of the
compensation period will be distributed iñ the following manner:
\Ð s\y" of tne funa to be sha¡ed between the states i¡r ProPoÌtion
to
levenues of the states, and
(ii) thé remaining 50% wiu be part of the cènt¡e's divisible pool of taxes
r.+ 1.13 Regiskation
Q. 16. Who is requùed to be registered for GST?
-
A¡rs, Evlery suppliel of goods and/or serviòes is requted to obtain registration
in the Stale/UT from where he makes the taxable supply if his aggregate
turnover exceêds (20 laldr during a Financial Yea¡.
Howevgr, the limit of f20 lakh v/ill be ¡educed to ?10 lakh if the person is
carrying oht busi¡ress in the Special Category States-11 Special Category States
rue specified in A¡ticle 2:Z9ee)@;) oJ the Constitution (States of A¡u¡rachal
P¡adesh, Assam, Jarrrmu and Kashrnir, Manipur¡ Meghalaya,. Mizora¡¡i,
Nagalã¡d, Sikkim, lripura, Himachal Pradesh and Uttarakhand).

12. fì
;l
fl
1l
,j
:
il
rì
,l
i
ìi
i
j
I
li
I
I
j
I
I
I
l
I
:
I
I
I
te-¡,á1'11Ei1yj¡¡frffii!
þ."1;i.,,,*;-;i;¿.,,.--,,".,.^..-.,,ii1þ¡ilt::,;¡..,
Busi¡esses ,n'i *. *q'i-.¿to ;; ä#;;"" csT irresf"cuve of theû
turnover a¡e as folloi¡¡s:
' (Ð Every person who is registered under the pre_CST
lâws (i,e.,
Excise, VAT, Service Tax etc.).
(tÐ When a business which is registered has been transferred to
s:meole, the t¡a¡sferee shall take registration with effec,t f¡om the
date of t¡ansfer. :---
(ii) Persons màking a.rly i¡ter-state taxable supply of goods.
(ia) Casual taxable persons.
(u) Non-Resident taxable persons making taxable supply..
(ar) Agents of á supplier.
(aii) Those paying tax u¡der the Reverse Charge mechanisrn.
(aiii) Input servicè ¡iistributors.
(rr) E-commerce oþerators or aggregators.
(x) Person who supplies via e{oûtmerce aggregator.
(rl) Person supplying online i¡rfo¡mation and database access or
ret¡ieval services fiom a place outside lndia to a person in lndia,
other than a registered taxable person.
,ÍÍì
"]-}::t"1.s;:4,"].::
"t.o"ïîT,..s-no.S$ed
by the
sove¡nment.
Q. 17. Who is not
(riii) Persons who.are required..1g.+Sd"g..-t
C"¡, ei
souñe u/s 51 (TDS
deductor). i . .,1
Who is not Iiabt to let regisrered uridd cST.
17.*ry]ro i-s nor li;-kl to qer ¡egisrered uiider'GST.
ts. Follouíng perì;rq1!î f"i ti,iUt" t" get registered under GS
(t) Any. person engdg'ed'exclusively, in ttre business of supply
AJÂs,. Follo?þíng per;í&Viã.ii.filiàiìi¿ tu get regiÈtered under GST:
(ti) A¡ agricultu¡ist to the extent oJ suppty of produCe out of.cuLtivation of
la¡d.
Q. 18. Describe the process of getting registered u¡der GST?
Ans. Applicatíon
for rcgìstrøtíon:
1. Filing of form GST REG-OI (part A). Every person (otler than â non_
resident
-taxable
perso& a petson required to áeàuct taì at sou¡ce unde¡
Section 51. â petson ¡èqufued to colleci tax at.soÌr¡ce r¡nder Sectiorr 52 and a
person supplying online i¡fo¡mation and database access or ret¡ieval se¡vicés
t¡om a place outside India to a non_taxable ónline recipient) who is liable to be
registered arrd eùery person who is.not liable to Uå,"gi"t"."ïbut seeking
":lylju.y
registration (herèafter in this Chapts referred tã as
,,the
applicant,,)
slrall, before applying for reÈtration. declare his pAN,
mobile number, e_maiJ
acldress, State or ljnìon territo¡y in pa¡t A of FORM GST REG_01 on the
comrnon poital either directly oi through . f""Uái"" C."u.ì-o,fr"a Uy ,t"
Com¡nissione¡:
. P¡ovided thad a person having a r]ltit(Ð ifl á Special Economic Zone or
being a Special EconoûLic Zone developer ,-shall rnak€ u
""paruiuapplication for regishation as a business vertical distinct fro¡ri his'other
units located outside the Special Economic Zone.
. Provided further that èvery person being an Input Service Distributor
cÃcrusrvery, tn lne Þusrness ot supplyi¡g goods or
services that ate not liable to tax or wholly exempt frorn tax.
" "
iril'1*üli'ii:a];,-{ltìliri¡x*ii1i:qnimÊíüiv*l,s,q+'
dúl#&urs+.¡r,,
*il.I*u
a sepa¡âte application for r?þiîtrTEõì-aì such lnput Service
Distributo¡.
2. Validation of p,AN,
Mobile no. ând e_mâil add¡ess_
r . The Permanent Account Number shall be validated.. onìine by the
portal from the datâbase maintaìned by the Central Board of
. Direct Taxes.
. The mobile numbe¡ shall be ve¡ified tluough a one_time password sent
to the said mobile numbe¡; and
.
Th-e e-rnail address decla¡ed shall be verified. through a sepaÌâte one_
. time password sent to the said e-mail add¡ess.
3,.Generation of l{eference number. On successful verjfication of the pAN,
mobile numbe¡ and e-mail address, a tempo¡ary reference number shall be
genetated a-nd comnunicated to the applicant on tie said mobile number and e_
mail add¡ess.
4. Filing of Form GST REG-01 (paft B). Using the reÍe¡ence number
gene¡ated, the applica¡t shall electroniàally
""i^it
ori uppUJutiå., ir, p*t
e o¡
FORM cST REC-01, duly sigrcd or Verifieà through elecåänic ve¡ification code,
along,with the documents specified in the said Forà at the coûrmon portâì, either
directly or tfuough a Facilitation Cent¡e notified bv the Conunissiôner.
.
5l Issuance of ì.cknowledgement. On ."."ipt of an applìcation, a¡
Ack¡rowledgement shall be issued electronicalty to tLe applicant ü FORM GST
REG-02.
6, Application by casual taxable person. A person applying for retlstration as
a casual taxáble person shall be given a temporâÌy iê¡é"uri"" nu-ñber by the
common portal for making advance deposit of tax in accorda¡ce with the
provisions of Section 27 a¡d the acknowledgement shall be issued electronically
only after the s¿id deposit.
Q. 19. Write a short note oir the following:
(a) Verification of the application and approval
[Rule 9]
(b) Issue of registration cefificate
[Rule 10]
.
__
(c) Separate registration fot multiple business veÉicãI$ within a State or a
Union territory
lRute tt]
,(d)
Grant of registration to persons required to deduct tax at soulce or to
collect tax at source
[Rute 12]
(e) Grant of registration to non-resident taxable person
[Rule 13]
-
(r- Grant of registration to a person supplying online i¡formation and
database access or retrieval services from a plãce-ouiside fnaia to a non_taxJiã
online recipient
[Rule 14]
(gl nxtensio_n in period of operation by casual taxable person and non_
¡esident taxable person
[RuJe 151
(ft) Suo moto regisaadon [itule 16]
(rJ Assìgrurent of Unique ldentit5r Nurnber to cdtain special entities
[p-ute 1Z
_f)
Display of regietration càÉificate ar¡d .Gooás a¡r¿ éervices ra¡
Identification Number on the name board [Rule 1g]
(k) Anendrnent of regishation
[Rule 191

13. aò r
.
sHrvÀ'äffrjúNnÆùù+e"È-r$:ffitüi.,,jlï¡1|..i;:
^ns^.
(a) Verific:àr¡on of thè applicøtìon ønd. approztøl [Rule 9]:
(Ð The application shall be fo¡wa¡ded tá'the proper office¡ who shall
exarnine the application and the accompanying dO-cuments and approve
9.
g"l.t of ¡egisharion to rhe appficàt
-ití;n o p"Aoa i¡ s zoot*.ing
døys ftorr- the date of submissiån of the applicaion, if ú"
"u-"
*.
fou-nd to be in ordel.
(tÐ whe¡e the âppücation submitted r¡rder Rar¿ I is found to be deficient,
:¡tl:r.
in-.terms of a¡y informaLion or any docuf¡ìent ."ouir"¿ to U"
¡urrushed under the s¿id rule, or whe¡e rhe proper officer iequires any
cla¡ification-with regard to any infonnation oi dåcuments, he moy rsso"
a notice to the applicant electronically in FORM GST REê_o3, zuithin ø
peiod,of S uto-rking dø1is fromthe dáte of submission of the aþplication
arld the applica-nt shall fumish such clarification, i¡formation or
:::-iT:_.f
.1":".m.1all4, ur FoÌM GsT F.EG44, toithìn a perioiÍ of 7
,,..- ?lrKtng
days froû the date of the receipt of such notice.
(¡rr) where the proþe¡ officer is satisfied with the claÌificâtion, ir¡formation o¡:
doqu:rre¡ts firrnished by the applica¡t, t.r"
-uy
^pfrolr"
tf,el|; ;;
Ìegistràtion to the applicant zoithrn a pertoa of í wàr¡ìng divs Írom t}re
,.
date of the ¡eceiptbf such clarification o. inf.olrmution or'dã.urr,"rro.
(izr) \4/here no repty is tumished by the applicant in ,*";*;;; rhe norice
]:".::d :l
wrrere..the
¡J9ee1
o$cer is ¡åt
""ti"fi;t;'rt,
tt',";lariricarjon,
¡¡rormatlon ot.dõali¡ilqnte fur.riþhèd, he shall, for ¡easons to be reco¡ded
. ln wnt¡¡g, reiect qllchåpp1icãtion a¡d i¡rform the applicant electronicâily
in FORM GST R¡'b.os.
(a) If the proper officer failè:
(a) wìthin a period of tfuee working days from tlre date of- submission
of the applicatiory or
(ü) within a pcriod of seVen working days fróm the date of the receipt
of the clarificatioç i¡formatiori or ldo"umurrt"
frrrrrisl"d Uy tf,.
appüca¡t.
The applicati¡m for gtaat of registration shall be deemed to have been
approved.
(bl.I^ssue-of registration certiÍicq te lRule 101:
(i) Subjecr to Lhe provisiorìs of Section 25(12), where the appucation for
grant of regisbation has been appro.o"d u¡der R¿le ,,
"':""HÍä;i
¡esisrrarion i¡ FoRM Gsr REi3-06
"h.;;
th;-;riltiìi prac. or
business and ¿dditional place or places of business
"h"ll
b."-;j;
available to the applicant
'on
.th" "o--on
p""ã"äJ. iï]a"rg,, aooo"
anJ Services Tai ldentification N"^Uu. iCsiñ¡'lfìfì'lï urrtgo.a
subject to the follòwing characters, namely:
. two chalacterc for the State code;
. ten characters for the permaneht
Accoufrt. Nu¡nber or the Tax
Deduction and Collection Account Numbe¡;
--..----
Y
.
. two châ{a€te!€JeÈ th,e entity code; and
. one checksum cha¡acter.
lil¡iliil$lii!:,|¡i3iü$¡¡rälf;rfftrtrÍA,sÉ i i:ÈÂrð"ffim'ñüÈËi"ip$¡Éìzr
(ii) The registration shall be effective from the date on rvhich the person
becomes liable to registration where the application for regishation has
been submitted ?rithín ø period òf 30 days f¡oÛr such date.
(iit) Whe¡e ã¡ application for regisüation haj been submitted by the
applicant aftelthe expiry of ttliÌty days ftom the date of his becoming
liable to registuation, thq effectìve date of ¡egistation 6hall be the date of
th€ gaant of registratfo¡under Sub-rule (1) ot Sub-rule (3) ot Sìtb-rule (5) of
F'ule 9.
(iu) Every certificate of registration shall be duly signed or verified through
el:ctronic verification code by the profier officer.under the Act.
(z:) Where the registration has been granted under Su¿-r?le (5) ol Rule 9, the
a¡iplicant sha.ll be com¡n'¡nicated the registration number, ald the
certiJicate of registrâtion uljrdet Sub-ruIe (1), duly signed or verifiecl
tlrough electronic. vedfication code, shall be made available to him on
the coñfnon portal, withìn a pe¡iod of three days âfter the expùy of the
period specified in Sub- e (5) of Ruh 9.
(c Sepllrrrte tegìstrøtíon fot multiple business aerîicøls zDìthìn ø Støte or .t
Uflion tenitory [Rt e 711:
(í) Ahy person having muldÞle business verticals within a State ol a Union
tetritory,.tequi¡ing a separate registuation for any óf its business verticals
' ¡ider sub-sec.tion (2) of Section 25 shall be gtanted sepa.rate registration
in respect of each of thê verticals subject ío the following conditions,
neLmely:
' . sirch petson hãs more than one business ve¡tical as defìned il
clause (18) of Sectiôn 2;
. the business ve¡tical of a taxable person shall not be granted
registraúon to pay tax uìder Section l0 if any one of the other
business ve¡ticals of the samg person is paying tax unde¡ Section 9;
. all separately registered business verticals of such person shall pay
tax u¡der the Act on supplj' <if goods or sewices o¡ both made to
another registered.business vertical of èuch person and issue a tax
i¡voice for such supply.
Eltplaflat¿on: For the purposes of cløuse þ), it is he¡eby cladfied that
where a¡ri-business vertical óf a registered pe¡son t].at llas been granted
- a Separate registiation becomes ineligible tô pay tax u¡der Section 10, all
othei business ve¡ticâls of the said persori shall become ireligible to pay
tax under the said section.
(ii) A registered person etigiþle to obtaùl separate regishation for business
ve¡ticals may submit a separate application in FORM GST REG-01 in
respect of each such vertical.
(iil) T1re provisions of Rule I arrd Rule 10 relating to the verification a¡rd the
8-lant of ¡egistatio sh 1, nut.ttis mùiøndis, apply to an applicAtion
submitted u-nder this R¡¿¡¿ 4.

14. , "e'p;slvÀffit&tiä!¡È#fftpgHq*íil.r,t
iíi.i$*ll*i!;¡¡l$il;rlg,¡tlil$l"lÍ
.(d) Grant oJ regìstrølion to percons require¿l to deduct tør øt soqrce or to
collect lax at source [RuIe 72]:
(l) Any person requiredio deåuct tax in accordanre with the provisions of
Section 51 (fDS deductor) or a person required to collect tax at soulce in
accorda¡ce with.the provisions of Section 52 shall elechonically submit
an application, duli. signed ór verified tfuough elecbonic veriJication
code, in FORM GST REG-07 for the grant of.registratiòrt ttu:ough the
common portal, either directly or ttuough a Facilítation Centre nótjfied
by the Commissioner.
(¡¡) The proper officer may grant registration after due ve¡ification a¡d issue
a certificate of regisbation in FORM cST REG-06 withìn a pcr¡od of 3
zootkìng døys fuofljr the date of subrnission of the application.
(iii) Where, upon an e¡qlriry or pursuant to any other
þioceeding under the
Act, the propet officet is satisfied that a person to whom a cã¡tificate of
registration in FORM ÇST REG-06 has been issued is no ionger liable to
deduct tax at sou¡ce unde¡ Sectio¡¡ 51 o¡ collect tax at sou&e under
Section 52, the said officer may cancel the registration and such
cancellation shall be commu¡icated to. the said perion elecfronically in
FORM GST REG48, Provided that the proper office¡ shall follow the
procedure as provided tn Rule 22 for the cancellation of regish.ation.
lel Graflt of tegistrøtion to nory.resi|etlt:t:d:i;;hiè.:p;erson
[Rule ßj:
(i) A non-resident_taì4ble person shall electronically subrrrit ar aFplication,
along with a self--ättested copy of his valid passport for registråúon, duly
signed or verified:$ioir!h elect¡onic verification ioae, in fOnV CSt
REG-09, 4f leøst,5riløys pr¡o/ to t]¡te comlnencement pf business at the
c¡mlnon potal eitllei directly or thlol¡gh a Facilitation Cent¡e notified by
the Commissioner. P¡ovided that in'the case of a business entitw
incotporatèd or established outside India, the apptication for registratioí
shall- be submitted along with its tax identificaãon number u urLique
number on the basis of which the entity is identified by the Govgmment
of that cou¡rby or its Pêrmanent Accorint Nr:mber, if ávailable,
(ii) A person applying for registration as a non-resident taxable person shall
be given a temporAry ¡efe¡ence number by the coûlrnon portJ for mating
ân advance deposit of tax iÀ accoÌdance with the provisiìns of Section 2i
and the aclorowledþement ulder Sub-rule (5) oÍ RuIe I shall be issued
..... *.o",ri:4y
only after the said deposit in tris electronic cash ledger.
(iii) The provisions of Rule g
and. Rule 10 relating tò the ve¡ification and the
$ant
of registratioiì shall,-appiy- þo ari application subrnitted lmder this
¡ule.-
(lrr) The_application for registration made by a non-resident ta_\ab¡e person
shall be duÌy signed or veriÍi".d through electronic verification códe by
his.authorised signatory wåo shall be a person resident in Indiel having â
valid Permanent Accor¡nt Nuutbet.
-
(fl Gtønt oÍ tegistration to a percot sup,ptVíng onlìne irtfonnqtion and
database access ot rctrieoal seroices ltotn ø place outaìde lndiø tâ a ton_taxable
online rcc¡pient [P'ule 74]:
'.':".'.
r..1..¡,.-:,,'...,'*:..,,*,r-.,;,*-..,.,,,,,_cl:l4
l_¡¡19*s,'!9gS.¡tRiÞ, ,i fÞ, :iÈS::l
(i) Any person supplying online information--artd- database access o¡
retrieval services fron a place outside IJrdia to a non_taxable orùine
recipient shall electronically submit â¡ application for registratiory duly
signed or verified through electronic veiification code, i-, fOnU CSÍ
REG-10, al_lh::oûÌ¡non portal, either directþ or thrciugh a Faciliration
Cenhe notiJied by Lhe ComÌnissioner.
(ii) Th€ applicant sha[ be granted registratiórL i¡ FORM GST REG_06,
subjectto such conditions a¡d restriitions and b'y such officer as may be
notified by the Cent¡al Government on the rácommenäations of'the
Cou¡cil.
(g¡\.ExtenÀion in peri:od of operøtioft by cøsuøl taxable person ønd non-r.esídeflt
taxøble person IRule 75]:
(i) Where a. registered casual taxable person or a non_lesident taxabÌe
person ìntends to extend the petiod of tegistration indicated in his
application of registation, a¡ application in FORM çS.I REG_l1 shau be
::b*t}:d
eleciromcally^through the com::ro., po¡tal; either directþ or
\_crrr¡e nouneo oy tne Lom4ússroner, by such
person before the end of the ¡.alidity of registration granted to him.
(ii) The application sÍrall be acknowledsed onlv on oavlenr of rho
"-^,,.r
tluoug! a- Faclütation Centre notfied by the
:Comrrrissioner,
by
(h) Slo ,noto registrøtion [Rule 16]:
(i) Where,-pu-rsua¡t.to any survey, enquùy, inspection, seârch or any other
proceedirgs under the Act, the prôper officeifinds that a pe¡son liable to
registration u¡del the Act has faiìed to apply for such ¡ehst¡atiory such
offiçer may register the said person or., á i"rrrpo"ury basis and issue an
o¡de¡ in FORM GST REG-12.
(iÐ The ¡egishâtian g:ra¡ted shall be effectjve Érom the date of such o¡de¡
gra¡tirìg registration.
(iil) Every person to whom a temporally regist¡ation ha6 bcen g¡anted under
sub-rule (1) shaIl, withìn a peiod of 90 tløys from the date ãf ihe garlt of
such registration, submit an application fâr regishation in the form and
marner provided in Rule I ot Rule 72:
Provided llÌat where the said person has filed an appeal agai¡st tlÉ grant
of temporary regist¡atio¡t in such case, the applicàtion ior regist¡ation
shall be submined within a peñod.of SO aàys torn,t" ãàr" or af,"
issua¡rce of the o¡der uphotding the liabilitf to ¡egist¡ation by the
Appellate Authoriry,
(iîr) The provisions oÍ Rule g
aIld RuIe i0 relaring to verification and the issue
of the certificate of registration shall applylo an application submitted
under suh-rule (3).
(u) The Goods and Se¡vices Tax Iclentification Numbe¡ assigned, puÆua¡t to
. the verification r¡¡ det sub-rule (4), shalÌ be effective f¡oä the'date of the
oider granting regisftat:rorr Ødet sub-rule (1).
(i Assìgnment. of llníque IdefttítV Number to certt il specìot errt¡ties lRute 771:
0) Every- pcrson required to be gra¡ted a Unique Identity Nufiber in
acco¡da¡ce with the p-rovisions of.sub.scction
1S)'of Seition ZS muy
The application shall be acknowledged only on paylent of the amourt
specified in szb-section (2) of Section 27.

15. lø¡:¡:¡i,rrV¡1"
submit a¡.âÞpücation elecrronica[y in fOnV CSf nnC_iã, a.rfy
"igr,"a
:. l"lfi:d
thlough electuonic verification code, in the manner spec-iÍied
in Rule I
1!.rle-coTmgn
po¡ral, eirher directly or'througÀ a Facilitation
centre notified by the Corrunissioner.
Th: Ulrque ldentity. Number gtalrted under sub-rule (i) [o a person
vrrdet ctause (a) of sub-section (9) of Section 25 sÀall be applicablJto the
territory of India.
(tt) The_proper officer may, upon subÌarission of an application in FORM
cST REG-13 or aJter fillin-g . up the said form
-qr
after receiving a
recom¡nendation f¡om the Ministry of. Extemal Affaiis, Govemrnent of
Inqil: assiqn:_Unlque ldentiry Nrùnber to the said perso4 and issue a
certificate in FORM GST IJ.EG46, znith¡fl ø per¡od if 3 ,uorking
døys
from the date of the submission of the aoolic#on-
_.A .Pìsp.løV
of regìstrø¡ion certificqte
"àà
eooi" cmd seruices Tøx
I¡lentificdtioi Nunberl¡ the naìne boârd tRute 181:
(Ð Ëvery registe¡ed person ihalÌ displav his cr
Every regrstered person shaÌl display his certificate of reqist¡ation in â
proninent location at his principal place of business Ld ut uu.ry
additional place or places of businãss.
'
additional place or places of businãss.
-
(;Ð
lyeV
registered person shall display his Goods a¡rd Services Tax
registe¡ed person ihall
Every retßrereo person shatl display h
Identification Numbe¡ on the name-bóard
(kl Amendme t of registrafion [Rule 79]:
1., Whe¡e_ there is ariy change in any of the particuJars fumished in the
14p]I3h"i
to¡ Ìegisûario_¡i ín FORM GST REG_01.o¡ FORM cST REG47 o¡
FORM GST REG-09 or FORM GST REG-10 or for Uniiue ldenrity Number in
FORM GST-REG-I3, eithe¡ ar rhe ri_me
"f
obr"irintl;;rtra;;i;;üü;
ldentity Number or as amended f¡om time to time, tfe ,"firt"."ã p.""o"
"n"ff,zuitlin
: ryio4of
15 dags oÍ such c.hange, subrnit an apptiåttorr, ã,iy stgr,.a o"
verified through electrorúc verification õde, electror.icåily,in FORM GST REG_
14,_ alon.g with the.documents telating to such charge át the comrnon portal,
either dir_ectly or through a Facilitado;Centr.e notfiejby the Co¡imissioier:
l
Provided that-
(ø) where the change relates to:
(i) legal name of-business;
(ii) address of the principal place of busi¡ess or ary additional place(s) of
business;
(tiÐ aädiriôñ, delerion or rerireñenr of pa¡t¡eis or directors, Katta. Mal.laging
Coûmittee, Bo#d of Trustees, Cirief Executive ó¡n"*ìì equivalent,
:.::1.":tbþ
for rhe dayro_day aJfai¡s of th" il;;;;;;"h does irot
waÌrant cancellation of registration unde¡ Section Zl, ihe ploper offlcer
shall, ¿fte¡ due ve¡-iJication, appror e lhe ¿nrendment zuitl¡i¿ a pcriod of
7s uotkíns days fro¡n the datà of the r"""t;;;; ü. ;;;;;^tr.n i¡ FoRM
cST REc-14 and issue an o¡rter in ¡onrø csr üã_ì;ä"ä:;::ì;
and such ameadac¡t-¡;Àa.l!_take
effect fromìh"ãàlirh"
"-.""r*""" "¡
the event v{aÌra¡ting such amendmenl
raennncauo¡l l\ûatbet on the name.board eihibited at the entry of his
principal place of business aJta ai. e'üaiyì'ààtiìlir."f pf."" ,ì fí."*
"tbusi¡ess.
t
l
i
[.
I
Ë
I
Í
F
E
u
f
f
t,ltLr,ñ¡:ì:i llit1ËiÍìi¡irïi;iril*l¡ffi ,as
(b) tlìè clÌange relaül]Lg.to sub-clause (í) arrd sub-clause (üi) of Clarse (a) in any
State or Uflion territory shall be applicable for all registrations of the registered
person obtained under the provisions of this Chapter on the same
pe¡manent
Accourrt Nulclbe4
(c) wherre the change relates to any particulals other than those specified in
Clatse (ø), the certihcate of registration shall staird amended upon submission of
the applicaÈiôn in FORM GST REc-1tu¡¡tle.j9pq¡no! poftalf
_
(d) where a change in ihe cônstitution of any businesJ results in the change of
the Permanent Accou¡t Number of a registered peqson;. the said person ãhall
apply foi fr€sh rcigistlation in FORM cST REG-oI:
P¡ovided fu¡ther that any changê in the mobìle nurnber or e-mail add¡ess of
the autho¡ised signatory submitted under this rul,e, as amended from time to
time sh¿ill be car¡ied out orlly after o¡rline .ve¡ification iluough the common
portal in the ma¡ner provided under stLb-rute (2) of Rule 8-
Notlvithstanding anything contained, in sub-rule (1), any particular of the
application for.íêFstration shall not stand amended with- ef?ect from a date
eadier tharl the-date of subrnission ôf the apþÌìcation in FORM GST REG-14 on
the com¡non portal'except with the order of the Comurissione¡ fo¡ reasons to be
recorded irì writin8 and subject tO such conditions as the Commissioner may, in
the said order, specify.
2. I4¡here the proper.officer is of the opiîion that the amendment sought ulder
sub-rule (1) is either not waranted or the documents fumished therewith.ìre
incomplete or incorect, he may, Taith¡tt 4 period of 75 ?porking døVs ho¡¡ the
date of the rêceipt of the application in FORM GST REG-'14, sene a notice in
FORM GST REG-03, requiring the registered pe$on to slnr,w cause, atìthit a
perìol of 7 íþorkìng day,s of the. service of the éaid notice, as to why the
application submitted ûr,det sub-ruIc (i) shall not be rejected.
3. The registered person shalÌ furnish a reply to the notice to show cause,
issued under 6ub-rule (2), ih FORM GST REê-04, v¡ithin a period of severr
working days from the date of the service of the said hotice.
4. Where the reply fumished u¡de¡ sab-rule (3) iÀ founð, to be not satìsfacto¡),
or where no reþly is furnished in rtisponse to the notìce issted u¡der sub-ntle (2)
within the period prescribecl ir..sub-rule (3), the proper office¡ shall ¡eiect the
application submitted vnder sub-rule (1) and pass an order,in FORM GST REG-
05.
l
5. [f the proper officer fàils to take any âctionì
(a) zoithin ø period of 75 "toorkìng ilays from the date of submjssion of the
âpFlication, or
(b) wìlhit ø Tteioil of 7 zoorking døys from the date of the receipt of the
reply to flÌe notice to show cause undet sub-ru\e (3),
the certificate of registration shall sta¡d anended to the extent applied for ancl
the amendctd certificate shall be made available to the registered person on the
cornmon portal.
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LeVy AND Co¡-recrtor{
¡ 2.1 Taxable Event
relatirg to meaning
Act read with vâ¡ious
shall be discussed in
itiiiriiiiil,.äillrirüi,*tii,i.,',,.,,r:. :: :ì çF.-r4ilF ei.evyr..g!g,ço-.qFg¡!
F1''.1,,:?;,:
tt::d"i.tf?]l Norwithstanding anyrhingtônlä.fñê-tFh sub_secrion (1)
(a) achvlhes or transactions spccified i¡ Schedule III; or
I (b) such activities o¡ tla¡sactiorÌs undertaken by the Centtal Goverrunent, â
State Gove¡nmenl. or any local authority in which they aÌe entaged as
public authorities, âs m¿y be notified by the Govemment on the
' ' recoûErlendatiôrrs of ttre Cou¡rcil shall be t;ated neither as a supply of
goods nor a supply of services.
[Section 7(3)] Subiect to sub-sections (1) & (Z), the crivemrirent may, on the
¡ecdm¡rendations of the Council, specify, by notificafion, the transactions that
are to be treated as-
I
o
a supply of goods ând not as a supply of services; or
Ans. Meøaittg of SiìpþIy [Section 7(1)]:
(ø) alÌ forms of supplx of goods or services o¡ both such as sale, tua¡sfer, ba-rtet
exchange, Iicence, rental, lease or disposal made or apgeed to be m¿de for a
consideration by a pèËãñ- ri:tourse or furthera¡cã of business.
(á) importation of serwices, for a conside¡ation whether or not in the course
or furtherance of business,
(c) the activities specified in Schedule I, made or agreed to be made without
a consideration,
(d) the activities to be treated as slrpply of goods or supply of services as
refer¡ed to in Schedule II.
i,. j 4{¡jffi#*#g.9-eF1l?&W¿l:¡:¡:¡;.
..j j. t; ii,;,,
;, ì,. -
t_ .
a supply of services and not as a supply of goods.
The meaning and scope of supply tâxable u¡de¡ GST call be understood in
te{.ns of the following pararneters, which ca¡r be adopted to chaÌacterize a
traisaction as supply: Supply should be of goods or sen iies. Supply of anything
other thari goods oÌ services like u'ioney, securities etc. does not'ait¡act GST.
. Supply shoulä be made for a conside¡afion
. Supply should Ëe rnâde in the course or furthe¡ânce of business.
.
Supply should be made by a taxable person.
. Supply Should bè a taxable Supply
Let us analyse the terms goods and seroíces as defined u¡def the Act:

17. aB. sHMA d.$næäriV sr+res
. -,,:... ,-.
Anything suppLied other thart goods a¡d services is outside tìe scope of
supply. No4 we will analvse the various illustrative modeè of supply mentioned
in Section 7(1)(a):
I. Sâle a¡d Tra¡lsfer. Ea¡lier, VAT was levied by the State on the saje of
goods which was defined under most State VAT laws as ka¡sfer of
prope¡ty in goods fo¡ consideration, Under the CGST Act, although sale
has been t¡eated as a form of supply leviable to GST, the definition of
'sale' has not been provided.
Fn¡ther, the tenn 'trønsþr', which has also been included as a form of
supply, is also not defined.
II. Büter a¡rd Exchange. lÁ/hile ba¡ter may deal with a tua¡saction which
o.fy.yctua¡s art- exchange of goods/éervices, exchange
-uy
"olr."
u
sltuation where the good6
-are
paftly paid for in goodi anð p:ertly in
money. 144ren there is a barte¡ of'good" or serii"es, s":rre actilþ
constitutes supply as well as conside¡ation.
¡óJ ttig¡âìitut'Éi.tlie barbgr
,
:- .r"":.: . l'.-ï-ï*';
LicencÈ, Lease, Rental etc. LiceÀes, leases alà ientals of !ioa. *"r"
earlier treated as. services whe¡e Lhe goods lvere t"un"fun?lilltnout
t¡a¡sfer of right to use (eftectivo possession und
"ont
ol ou". ìhì
gooqs) ànd were treated ãs sales where t¡e goods we¡e transfer¡ed with
fransfer of ¡ighl to use.
Under the GST regime, suclÌ licen¡es, leases and ¡entals of goods with.or
without transfer of right to use are cove¡ecl rurde¡ the supöly
"i ";,ãåoecause üìere is no transfer of title in such supplies. Sr¡ch tr'arlactions â¡e
-,
sjeci{j:¿lty.r¡eated as supply of se¡vice in S"n"aute rf .¡ èèõi a"t.
rv. Lons¡oerat¡on. One of the essenti¡L conditions for the suppl_7 of goods
and/o¡ services to fall withi¡ the ambit of cST is tf,ut o s,lipiyls maa"
for a consideration. However, ccnsiclc¡ation ao"".,ot uiujuí"
^"u¡l,
money. Tt coveß â¡ytlLing which mjtht be possibly clone, giveí or made
:::il1q:
j:i:.Tethirg erse. Furtñe¡, a .ãnsi¿.íutio., neäîà, ur_uy,
_-
flow r¡om lhe recipient of the supply. ltcan a]so be made by a third person.
v. In Coruse or fu¡thera¡ce of Business. CSf is
"ss"ntilt|;-;.:j;;;coÍrrnerciaÌ tra¡sactions. Hence, only those supplies that í" ir, i¡r. .or:.".
or turtherance-db¡¡¡;isesE guarry ;
"rrppty
lri.rä". csi. nÀùì"ruy, a¡ry
supplies made by an individual in his
þársonal
"upuiif
aã'io, .o_.
u¡de¡ the ambit of CST Lr¡tess Lhey fa[ ;¡rhjn an" a.firriÉ, ã¡ Uì.¡r,ïrr.
constitute a supply. Since 'busi¡ress' includes vocatiorL sale of goods or
servjce évcn as a vocation is a supply under GST.
:¡iiijli:l:i¡q!ù4.!Eè'r,: i-r.cilÈ,i:sl.¡
es
vity undêrtaken in course/for furthera¡ce of-business would
<lefi¡ition of 'businä#. :Ì ' :r
'"ì
. .:'- ":
Vl. SuPply b), a Taxable Pe¡gon. A supply to athact cST should be made by
a trìxable person. Herice, a supply between two non-taxable persons docs
not corEtitute taxable supþly under GST.
The restriction of being a taxable person is only on the sùpplier r.hereas
the recipient cân be either taxable or non-taxable: Furthér,rthere is uo
condition that supply needs to be made to a¡ottrer person i.e,, supplies
m¿lde to self a¡e aÌso taxable.
Q. l. Who is a taÌable person?
Ans. A "taxâble person" is a person who is registèred o¡ liable to be ¡egistercd
under S€cl.ion 22 or Section 24.
Hence, t:ven an uruegistered pe¡son u'ho is liable io be registe¡ed is a taxâLrle
person. Similarly, a .person not liable to be ¡egiste{ed, but has taken voluntar_v
registration and got himself registered ¡s .ìlso a taxable person.
Q.3. tdhat is ta-xable supply?
A\s- Tadcøble stpply. For a supply to athact GST, the supp.ty must be taxable.
Taxable sripply has been broadly defined a¡d meafis any supply of goods or
se¡vices ol both, which is leviable to tax under the GST Láw. Exemptions may be
provided to the specfied goods or services o¡ to a specifi€d category of persons/
entities makirg su pply.
t+ 2.2 Place of Suppty (pOS)
Q. 4. Bliefly explain the èoncept of place of Supply.
A¡s. ln GST, the concept of a place of supply has been màde relevant not onl_y
for the supply of se¡vices but also for the transaction of goods.
ì /hich tax is to be levied (IGST or CGST ahd SGST/UTGST) wi.ll depend.on
whether a particular t¡arisaction is an lnte¡-state supply or l¡tra-state supply.
Hence, ewcry transaction will have to go tfuough the test ofp¡ovisions relating to
the plâce of supply in o¡der to determine which tax is to be levied.
a year
.ñcif à
ìn lhn
iô,f.i-ÌÈ-ome
:ôf

18. q9;,r,.9¡r-va;oej$.iú_$_ii.i.ig!¡.-ry.ÉF8F. ...: ... .:ì:ì.1,:.
l
Thc puryose of the place of supply prooisions is tluo-folrt:
.
1, In case of c¡oss-border transactions, to dete¡mine whethe¡ tax Ìs to be
levied on a particuJar ba¡sacLion.
2. ln the case of domestic transactions, to deterllli¡e la,hether a pâtticulat
transaction is an inter-state supply or an int¡a-state supply. ,
Pløce of Suppty (POS)
for Imports àìi axports (Section t7i:^
'
. Iûrports. The place of supply of goods impoited irìto Iídia shall be the
location of the importer.
. Exports. The place of supply of goods exported f¡om India shail be the
location outside India.
Trarßactions othe; thøn btqrort or Export (Section 70)
1. Movement of Goods, Section 10(1)(a) states thai
ì,¡uhere
the stqply ínuolues
m.ozrefient of goods, whetlær by the supplíer or the recipie t or t)y ony othti person, the
place of supply of such goods shall be the location of the gootls ;t ü1; tit11e rú i,hich the
tl1oac 1eflt of goods teftninates
for
delíoery to the recipieni',.
This i
or othenÞise, ¡t âhall be dee-tned thnt the saírl inir.a pár"o,, has receiaed' te gootts and Íhe
pløce-of supply of atch goods shall be the principal place of business of such person,,.
When goods a¡e delive¡ed to a paÌty on the diiection o¡ ã tfri¡a person the
place of supply will be the location of such thjrd peison and not whe¡e the
clelivery termi¡ates.
iir,:ir ..1:i ì:ìr:...:I,,r... i,i,..: .. ç]-lAP¡Eq 2: LE\¡/ aNF cq+Ec' noñ lF gs-r,t qj
- . The second part of the hansaction_ b;tw;;l;;iradeÉ a¡d prime
Ha.rdware6. Ram Traders is the suþplier, a¡d prime
Hardwales is the
. 91
y-:fi
l1g
rraders bitls',the tr,âiú!çÈ;" iõ: Þ;":,È;¡t;;;,;;à,
:ng?t*.t
the lorry receipi (goods stupped in a lorry by Hdnuma¡
: Tráders) i¡ favou¡ of p¡ime
Ha¡dwo¡es. T1ris lorry receþt
[LR) wil
enablè Prirnê Ha¡dwales Lo ta-k e the delivery of the goods.
.
Ovgr. her.e, oir the i¡rstruct¡on from Ram iraders, Éaruman Traders
shiþç th9 tablea to Priine Ha¡dwa¡es located in Tamil Nadu.
Here, Rdm--Traders is deemed â6 the thûd person. Tt erefore, the place of
ilp.ply
*Ui be thè príncipat place of business of rhe third person, i.c.,
Mahafashtra. Accordingly, Ha¡uman.Trade¡s charges CGST
-¿
SCST on
billing to:Ram T¡aders. The second part of tlre Fã¡uaction between Ram
Traders and Pr¡me Hardwa¡es will be inter-state, a¡d TGST will be charged.
ffiiüifflli, ËÉr,,,ffi*..EÍ!irf|,!iiiúÌi1fiflii1iirr:,;iil),t'irСr
P.!¡¡4é

19. not itxoolþe mo1.)eftteflt of goods, tolrcther, by the s pplier or the recipieflt, the place of
supply slnll be the locûtion of such goods st fhe tínle of the delia,ery to the recipient."
When goods ale of such naLure which does not require alry movement, place
of supply shall be the location of such goods.
Exømple: Bharat Li¡ ted registered jn
Maharashtra sold ifs pïe-¡nstalled
tra¡smission tower (clectIic tãwer) Iocatcd at Madhva p¡adesh
tà Hindustan
Limited registered in Delhi.
- '.
'--
. l'" .
'
l'. Iri. tþi!,;caqe;. tfG loéátion of the supplier is Maharashtra, l¡ut the Þlace bf:,
i
. suÞply ûtll b-é Madþa Praclesh. Hence, IGS'T will be leviecl ,. .
,
.
,:
nt-ampie; ni*n t-imitéã of Rajàsthan. gers.an oider ót.fOo éêU:þiones from
'rlPatil Elèqb9niò! iiì Mahàiàôhr¡a. patd
Elerrronics
j¡¡f-
ci. úTlq.n4if,l].iiuiitóä ttiut._
. $er:;w{;,!!e ¡$ê
delivery' bf the iell phones .froÀ,*ie iitioi:]i,.ãr,:,nàti i
.,'
. Liûäted,àÈJaipur. , . t..;. ,.,.,:..
...
ll '
He¡e the Iocation of the supplier is RajasthaJl and location of the receive¡.is
Maha¡ashka. However, l-atil Electrolìics has agreed to t¿ke the delivery
from Rathi Limited's Jaipur facro¡y. This implie;thaithe têújnàiìóñ,óf rh;rr,
movement of the cell phones to F;til Electronics t¡kes placc at the factory of
¡ $thi
Lii.nitga, i.e., in Jatpur. Hence, rhe place of
:supply
is laipui rin
Raiastha¡.
ì .,IhÞ ió..
ah:jnlra-sià!è úe¡sactiqn an4 CGST .andi gç,çf
. *itt
-U.e,- ieii¿¿:,tyrl,
. .nathi,Li¡iütàä..Iù';hoûld.bê
nór€id thê! Raih¡ Lrmited"w41. .,þe.pheis¡iäSé-éíi.
'. aild Cc3T:iii'rRáiasihåir. rþ credìt of which shall ,,ot ¡" u.,ruuuUÏêíá;Èutit,.:"
¡l¿cúoniæìin Mahâi;shria. úence; thêi" oiitiì¡e . ñ¡i:úäãaãl*.{r
AJtematively, if Patil Elechonica woL¡l<l have askecl Rathi Ll^i,"a to ¿"tiu".
goods at itè facrory in v"tl*aJ,t ¿ it wi"i¿'rioii,å,ièèi;a,.sl¡¡ä¡i
"tåt",,_transaction a¡¡d IGST would have beer levied. The creclit of tCSt woúld
have been av¿ílable to Patil Electronics.
. Many.experts have an altàrnate íiè.iv,O" *"r.øii¡;îiÉ,1*'.",tnË,ttrrÀ;¿råriili.
involves the movement of goods by the buyel it shói¡Jâ be qoveied uirde¡
Section 10(1)(a) ancl nor l0(i)(c). WÍrich iarpÎes that ptace of supply should
be Maia¡ashtra a¡d-lGsI.ElËll be levied on the kansaction
¡glïËg¡gIffiii1å{,:.ffi' rÌírititifíä;r;liifriíjiîfii*Ë'W¡t1l:.;,l?'.l 1ífiiì''ffiffidiil
''j-]..:':¡',-a,:-.-'.
:,
"::::,:,.
ri:¡::lii.,',l:.r...1 l1,l .'I l,l :;;:-:j)'1:'fir:r,qtAPl-EF'l?i$ry.lp!lli.F.t+Éit'tþÑól'ésr' t ss
4, Wlren Goods are. Installed. Section 10(1)(d) states "|þhere the
Soorls
orc
assentbled Òr iixstalled at site, tlTe place of supply shall be the place of such instullation at
assenbly."
5. Goods; on Board a conveyance. Section 10(1)(e) slales "?þhe1e the
Soods
tttc
supplied on boat d a contteyance, inclltdittg ø þessel, an aircraff, a trøíiòt ø motot oehicle'
ttæ p\øce of t rpply shall.be the locatiotx at ul1¡clx such
loods,are
taken-on boncl'"
ihis p;ovision includes those pulchases which a¡e done while t¡avellinEi on a
conveyancc.
.
;::Eryq1nþJ!,
iili:iæirta]s trâùéíliíg on.a.cru!eelin€¡-{r.-,,op.,.}-,r..y¡$9-i ¡å, !o:.
ne
ol,r.tão," a notebook from thã in-house store in thè cärìse liner' These
iliJliil ;;;;+J ;;; M";ù;ì. R"Bt"r","J pr.." or u'"r''ess or the
notqbóþl(.,síop ls in:Mumbâi' Place of supply, h
$^S.:iTl.yiU
bè Munbai'
, rnis i, r.,i i.,tl.çtaite'supply¡.ànd CGST ;d SGST win be charged :
'
!ô 2.3 'fime of Supply
Q. 5. Fpf the
Pr¡-rPose of paying tax liâbilit, point of taxation is requfued'
Time of srllpply is nãthing but point of taxatìon. Briefly exPÌain the concePt of
time of sulþply.
.q.ns. poìnt'of taxatiol-t is the Point
of time when goods are deemed to bc
supplied or sen ices a¡e dee¡necl to be
Providecl.
It helPs to deterrlline value' rate
of tåx a¡Ld due date for tax Payment
Under GST, the liability to pa)' tax arises Ât
the time wl.ren goocls or services are supplied Íhus, time of suPPly is nothirìg Lrut
poirt of ta\¡ tion.
There ¡Ite some general pÌovisions and some specific provisions for-
deterûLin rg time.of sripply. Time ol supply is different for goods â¡d selvices lf
sþecific prõvisions are àpp ed to determine the time of supply then gener'rl
provisions are irreleva¡t.

20. i,i
,;
;ì
,Å
I
tl
,'
ì1
il
I
I
I
I
'i
i
i
i
I
l
so.,.'-ì=t.v¡;i#¡P*iim-[iljsinliÈ,:¡.rr¡,.iì:,jl:i:lr:::::,. ., ' ì;',,r,r,:.r.,;,.',..",... ,.,,, .,
To detertnifle tifite of supply of goods øttil setzices,
fotrr
cø.tegor.íes Fre p1,o?)iilc¿l
as belou.¡:
I. Time of Supply of Goods E¿ Se¡vices under Forward Charger
In case of Goods-
Eâ¡Iie¡ of the following:
Time of Supply of Goods and Services
Date of issue of Invoice
by the supplier or the
last dáte by which he
is tequired to issue
the invoice
Date on ùhich the
supplier receives the
payment
In case of Services
-
Earliest of the foilowingr
I. Date oÍ Issue of Inaoíce
for Goods:
Date of issue of lnvoi.e
bv the supplie¡
;1,;.'".11 ].,:'¡ll;.l,i:i.',:;,,.:'':tì,.]:,..r, '. .r c¡rÀFnR.è:'r¡.vylÀrygr.coLiÉinOr.!.or,.es¡,r,s5...
2. Tìtne oÍ Iss4e of Inaoice for Seruices: - -
- -
(i Befot e or after lltc ptou¡sioü ol scruicc but oilhin 30 clnqs:
.
45 days i¡ case of banl<ìng and financial irstiiutions ftom the date of
supply of services.
(ii) ltt cnse of con!inuous sttpply of scntiies:
. Due date of paynent can be identified from the conkact, T.he
i¡voice will be issued before or after the payment is to be made by
the ¡ecipient but within 30 or 45 days of ãuè dare of paymenr.
. Due date of payment cannot be identified from the cont¡act. The
i¡voice shall be issued before or: afLe¡ each time when the supplier
of service receives rhe pâyûìent but withirì 30 or 45 days;f r¿;eipt
of p¿),rìten t
" Paymenf is linked to the completion of an event. The invoice shall
be issued before or afte¡ the tinìe of completion of tlÌat event but
within 30 o¡ 45 days of completion of event.
. Srpply of se¡vices ceases under a conhact before the completion
of the supply. TÏìe invoìce shalÌ be issued at the tirne when the
supply ceases and sucl-r invoice sllall be issued to the extent of the
service provicletl befo,e stoppjrrg.
3. The supply shall I¡e deemed to have been nÌade to the extent it is cove¡ed by
the ilrvoice or, âs the case may be, the payment.
4. Optional Tinte of strpph.¡.If arnount ap to T1,000 in excess of i¡r,oice amount
is_received then the supplier llas the opfion to take the time of supply as the date
of invoice issued for such excess or acivance received.
-
5. If invoice is r-rot issued and clàte of payrìÌent or daie of completion ot
provision of service is also not ascefiainable, then the time of supply shall be the
date on which the recipient shows the receip! of services in his bååks of accounts.
Pãyment is entered
into books of accounts
(r) lVìren
_movement
of goods is involved in supply, then bef(xe or at the
' time of remova_l of goods.
(ii) \4/hen no movement of goods is involved ir-r supply, tl-ren belrore or at the
.
ti_me of delive¡y of goods or making available io tÍ-re recipìerrt.
liii) lf co¡rtinuous suppiyì?
Sõds-(E xanryIe, S:uppIy of Oit), thqn earliest of
the following:
. Time when each statement is íssued.
. Tirne when each paymeni is received,
(lo) If goods are sent for approval then ea¡lie¡ of the following:
. Time when it becomes knowlr tlìat supÞly has takerri,lace.
.
S¡x moRths from the date of remov¡l
Date oJ Provision of
service if ìnl,oic(: is not
issuecl withi¡ the
prescribecl period
Dàte orì which
ihe
supltier receive! tlÌe.
payment
payrnent is credited
to bank accoun i
i:.::l:î^Y,;l11Ti.rï:ll:" î11-e-oo.1"
'o Y.
B, whoresaIer, and issued
Example: llxlr. A, ama¡ufacturer, sold goods fo Mr. B, wholesaler, and issu
invoice- for the sale on 01srAu$rst, 2017. Now, determine the time of supç
of goods'for the followint cases:
f| ]vtrif
r-.¡noves th.e goods Éor
{.gf!y!ryr¡o
HAr B òn 16rl Äugirst 2012.
(4, rvr.r. ê. removes the goods tor delivery to M_r. B on l6rh August 2017.
(bl
fE !
collecis the goods from premjses of Mr. A on lOth A"ugusr 2017
(q) M¡. B made full pãyment on 2'6Lh July, 2O't7.-
(d) Mr.-B credited the p¿yment in bank acco¡r¡t of Mr. A on 2grh July, 20L7
fo: 3/4ù 9f goods, Mr. A recorded the êame as receipts in hisbooks on
'
.3rd
Augrst.2017. The goods weie dispatched on 5rhãuzust,20lZ f¡om
r the warehóirse. -
-
f:is:3]f,,,_.o¿411.r--{9sus! ?oJ7:,ìNoMr,Ce.teñine;,thê.iiriia ór.sùppry
for 3/jú 9f goods, llt¡. a reco¡ded the êame as receipts in his books on
' 3rd Auglst.2017. The goods weie dispatched on 5th-AususL. )O.17 tr¡¡
. r the warehoúse.
Answeri
(al iit,+tgust ZOL-7 is the limc ol suppty of
Boods
i.e.. eritti¿r of fhe
followíng
:.',.:. D¡itê.iþf-Inû.ò.i¡è..::191..ê.usu.6t, 2017i or "
:
',..'.'
.D¡itê.iþf iInû¡i!è! 191.é.u8u.6t, 2017i o;
(bl l.st August 2077 is tlrc tiùr( oJ'supptli oI
Dáte of Invoice-lsi August, 2017; o.
ÞÂté lo1i,i^¡hichDale on which invoice is r€qqired to be issued _
I6ur August, ZO77.
IsÍA ousl)O:l7i<lhrt;'nî^t'<Lnnttr^r-^^¿ci-
^^-t:-- ^î
tt-^-r^¡''.-..:.,-.
Date on which goods is delivered- 10rh,August, 2017.
gusl ¿077 is lltc tiùr( oJ'supplli oI goods i.e., earlicr of the fo
owing
of Invoice
-
I
si
Au gust,2017; or

21. E:ample: Mr. A entered i¡to a contract wiur Mr. B for supply of oil
tluoughout the yeaJ. Ml. A issues monthJy st¿teme¡ri for the o¡l suoolied to
Mr. B. Now, deterrnine the tirne of supplv of goods in the following:cascs:
(a) Mr. Bmâde pâymenr for the mon tf,
"f
¡""f y o" ef
.r
Juty, 201t;JM_r. A
issued statement for the month of Julv ori
grh
Aueust. 20lZ-
(b) M¡. A issued siatement'f", ,r-r. .íãí,h .i e"g,:îá,iTá'r"p*-u"r,
.
.
2O17, the payment of which was not received t;ij SOu, S"ptu-ú"r, ZOli.
Answer:
(a 31st-luly-2017 tai be
.rhe
tine ol sipplu, i.c., earliest of.thcþtkruing:
Dâte-of Invoice
-
grh
August, 2017
,.,,,.,-,,,,r,,-!leJ,.,.4qigoll,whishinvii¡áiâãrto:u.,is".ru¿-Dut:óiií¡çn1¿1;1,;¡,.'
'lî,':trrGt¿iô_Aþ¡t:ùfuè1ii:vé;rìséàrlier¡.e.,zt¡ti,v.iolz..'-*-.i...,..,,.,
,,,
(b) 5d! Sq+mqei 2017.w¡ be the tinc of suppLy, i,e.. earliesl of ttn fottowing:
Date of Invoice-5rh September, 2011
tast alate on.which invoice had to be ìssued_Date of
þay,rnent or
statement whicheve¡ is earliër, i.e., 5rh Sepl.ernber, 2017
'
.
Examplc: ABC Consultâncy services issued invoice for semices rendered to
"ï.,fflIl
olC*t 2017. Determine the time of supply in fo owing cases:
. 14, r¡e provEtons ot serviceq were completed on lst lulv,2017
-
!åf ]hg
Rrovisions of services *"*
".;;t;i;
áÅ isio IJtr,âìiz
lc, Í made the paymejÌt on 3rd August,2\lj, where provisions of services
were remaini¡g to be completed.
(d) P made the paymeñt on 15iì ALjguct 2017, where provisions of services
.
we¡e ¡êmaini¡rg to be completedi
A¡_swef;
. . . !^'t
t:l.uI:}.T|.
l4l. -þ: ¡-!¡
timq,óf
, euppJy
qr -"e*.i¡èí,"':iiídäj,*lioi!
.
._
Esried wttrin the time frame of 30 days.
@)
1"i.1:4"_t.19lJ
yitÌ b: rhe time of iuppiy of services aó invoice is
: lssuect
.la¡¡tfrin
the tiDle frame.
(.)
T^i,j,1q*j.?9lT
*lt b: rhe rirne of supply of bewices as paymenr
' feqelved' lrefole invoice date. 1 _ .
(d) 5ù Augueq 2017 wiü be tlìe time of supply of services as inVãice isl-.
rssued betore the completion of proviiions of services.
II. Time of Supply of Goods & Services under Reverse Charge:
\^¡hen the receiver bëdõmFsliat +e to_ pay the ta* ir.rst"ud of
"upfrier
of goods, it
is known as reve¡se charge. Reverse charge applies
-h"rrJ
-"__'_
.,...,:1,,,.'',, r,:.:l-,:...',,t.."1r,,1:.,¡,¡ri:t14,!¡6afitìi¡,LE\a1-... iÞ.ä* --Fl-ó¡.:or-qqr lrsz
(i) the vendor who is not registered sells the goods to a regiòtered person.
Thus, GST shall t'e payable by the registered perÞon.
(l/) suþpJier of the goods o¡ services or both are located in non-tÐ(able te¡¡itory.
(lii) suþply of goods or services in an uno¡ganised sector, such as, to a person
whose âggregate tumover is less.
(lo) indirect levy of tax on a sector genera-lly exempt ftom tax.
In câs€ of Goods
Earii-st of the follorvinA
t
I
I
I
I
I
I
t
i
I
I
Ë
&
E'
r
F
H
Time ofSupplv of Gol
S€rvices under Revers€
Thc date of the ¡eceipt
of rlìe
Boo.ts
'l:he
date on which
dâte invoice iss'ired
by the supplie¡
If time of supply ca¡-not be determined with the help of abowe provisions then
the time o[ supply shall be the date on which entry in the books of the recipient of
goods anci services is made.
Ässociated ErteÍprises
-
Earlier of the ro owing:
The date of entry
yet. ' ..:: .'-....
(e) i4r A received goods on 3d ,qugrr"t,
j.oi
z
-uÍrã -oraäu
puy-ent fo¡ the
lame on 4th Augus¡ 2017. .
,ìi.*',,^,, ,
(c) V[r. A.¡nade pavment on SthJuIv,.and ¡eceirÌþd-Aoödi on thè same date.
ø V[ e ru."iuaã goåat å.' 1otr'l¡¡y,.1qz
jfiåt"frais
pa].rnent for the
sâme on 9ú July, 2017. ti- ,lr .r ,:.
.
Other than Àâ6sociated
Enterpris€s
-
Ea¡lier of
th€ followi¡g:
The dâte on whrch
payEent is made

22. : . hÌ,. ,l,ul.iri:ì ::::1,,:i :..:fi: :,
IV, Residuary Clause
Time of Supply of
retun hâs to be filecl,
the date on which such
return is to be filed
t¿asc
CHAPTER 2
fol Goods d¿ Services:
ol supply in case of change in ta
tEvYrÁND COLIEIÍION:OF cSI.,! 39
1 tnvoice lssued/
Payment Received
; Ebèhts àftè¡¡;
:
chøipè ììt'effeitioè
:
. 'tatò oj iaì'¡:
2.lnvoice Issùed/
Payment Received
No activity
3.
4.
of tax:
îitt¿. òÍ sitþply
.
if
go.adi:t idiùìi
øre supplied befot
cllßrße ifl effectìo
iate.:.of tà;: .
fnvoice issucd
Pavment Received
Supply of Coods
& Services
. Datè of Receipt of the pøW eflt br¡ supplìer, Payment is entered into the
books t¡f the account or cteLlited in his bar-Lk account, whicheve¡ is earlie¡.
. Proviclecl, bhe date of receipt of payment shall be the date of credit in the
bank account if such credit ill the balÌk account is after fout wo¡king days
from the date of change in the rate of tax.
, EiT.;ryì!i.!i\.',
^.i.ùpphed.
goods toìW: B ón z8th.Decembei,.2017- The cST
rli.ter:.9¡:lg99ds
it'
ç¡-Ìarlgecl fl:pm 72%'to 5%,w.e.f.' lstjãnugIy,r2018- Mr. A
,
:.,issÉ.e41þV.o,rfg o¡128!r Decéuiber,:20t1-,.and pay-Ingnt is crediicjd iri hü.banl<
:a...c!g¡h,tiÊii,3qt tÐècê¡¡i6ei;,2917,. whàt is thê lime ofsupplyr,iri ¡his
q¿sel
A¡gi¡¡ää:,i',.,.,t
-'::'lì:l irr : ''.. :1 . '
f ìt:t"-\"g X".* nape becn clone beÍore change in úecliae rute of ta,r:
.
Go_ocls Suppaied . Lìvoice lssued . Payment Received
28ù December 28rh Deceml¡er 30ù Dece¡nber
Date of ¡eceipt
of Payment, irr
Dafe of issue of
invoice, whichever
is earlieÌ,
PaymenL Received
1_--_
lnvorce lss,red
.,.:,:Iûfle:.9flt
þpty
¿l€0,qþ!,:gùiqls
",i i.:.9ulp li l 4:
q ft
eil
,chaflge li .effe6tíþe
.,: ,
tøte of,atax :.
NA
NA
Dale of Invoice
Date of receipt of
Pal'mcnt
Date of ¡eceipt
of payment; or
Date of issue of
invoice, whicevel
is earÌieÌ.
Date of receipt of
P3IT,"-11...,,,.
......
Date of Invoice

23. iÍ1Íti,*i:Æiilffiíürßirui.fc,litåi:äËffit*tffiåìii|;ÉFiilnÏffiäTiir'gÌl#!*1:S¡åi.ïffiæffix,#åi#
,r:'i
i:*rÂpilFrê1€¡r:Áñ¡itEÈ- ¡fi-qñ iir sì+' r 41
s 2.4 Valuation fot GST
GST will be leviÈd on'the value of supply. In other wo¡ds to lery GST, co¡rect
value of stJipply is required. \44rat can be part of the value of supply or what does
'.'..
t(:
not foÌm
FJart
of the value of supply is ve¡y imPo¡tant.
Q. 6. Wh¿t is Value of supply?
A^s. Mrttfling.In general value of suþply means consideration charged fol the
supply Éronì ¡ecipient.
E iarnplP: Mr. X is selling a proáuct for T1,000 to Mi';É. ln this examþle value
of supply will be considìraìion chaiged i e.,,r1.000.
'
Definitìon. The value of supply of gooäs or services o¡- both shall L¡e
the traisa,ction valúe, which is lhe price actually paid or payable for the saicl
supply of goods or services o¡ both where the supplier and the ¡ecipient of the
r"ppfy
"tã
not related and the price is the sole ionsideration for the suppl,v
[section 15(] )1.
We need to u¡Iderstand fòur impodânt terms involved in the definition'
Tr'øflsøatiott Vølue, lrafrsacÍíor. value is thq consideration ¡harged from the
recjpient for supply.
consi¿l¿lation ii relation to the supply of goods or services ol both includes -
(a) a¡y payment made or to be made, whether in money or otherwise, in
¡espect ol in response to, or fo¡ the inducement of, the supply of goods
oí se¡vices o¡ both, whether by the recipient or by any other person [rut
shall not ínclude any subsidy given by the Central Govemment or a
State CovernmenU
(b) the monetary value of any act or forbearance, in respect of, in respbnse
to, o¡ for the inducement of, the supply of goods or seitices o¡ botÏ,
¡¿i207õ.I,V'e.f
,:indjhtoice
after

24. il
â
:.t
ìl
ä
42 E SHIVA DELHI UNIVEfISITY SEFìIES
,
r.,rhether by the recipient or by any other person but shall not include
.
any subsidy given by the Central Gove¡nment or â Stâte Gor,/ernment.
Provided that a deposit given in respect of the supply of goocls or
services o¡ both shall not be considered âs payment rnacLe. for such
supply unless the supplier applies such deposit as consideration for the
said supply;
P ce .actu¡tlly pøìil or pøyøble. It mea¡s the consideratioû pai.d o{ to be paid
l.y the supplier for the supply.
CONDITION 1: Supplier a4d Recipient of the supply are not ¡elated
Supplier and recipieni should not be related parti... ó"fitrlt;on of reLated party
ii as below:
Pe¡sons shall be deemed to be "related persons" if-
Ma¡ket Value then the sa¡¡re wilÌ be the sole considerâtiôn
One important âspect is that both the conditions will apply simultaneously.
It means if only onä óondition is dissatisfied, then the altual consideration
will bè the value of supply.
If the above conditions are not satisfied then vâ1ue of supply witì. be
determined with the heÞ of valuation rules.
I
i:
t'
t
l
li
I
L
t:
t
t,
ir
I
I
I
I
i
l
I
I
L
(ll) Any amount whicl.r:
-
the suppiier is liaLrle to rray
-
but incurred by Recipient, and
- not included lr thc pricc
actually paid or payable for
. such supply
'(c) Incidental expenses suclì as
packaghg, coÍrmission etc. ând
any amount charged for anvthirg
dùnc by rhe srlplli", ir.r.Éturior,
to supply of goods or servìces at
the time or before. theil delivery.
(d) Interest, late fee or penalty fot
delayed payment.
(¿) Subsidies directly linked to the
price e.r.cluding subsjdies pro_
vided by fhe st¿te o¡ Ceritral
Govemment.
(a) Any taxes, dutiês, cesses, fees &
charges levied ùnder any lâw
other than GST law if charged
sepaÌately by the supplier;
CI-IAPTEF A: LFVY AND COLIECTTON OF cST ¡ 4s
(r) rrl<(ourìt grvell ¿Jter the suppl)
if:
-
Such discount is established
in terms of an agleement
enteted into at o¡ before the
time of such supply and
speiifically linl<ed to reÌevant
invoices.
-
Tnput tax credit relotilg to
such discount is reverscd bv
the ¡ecipient.
(a) Discount given before or at the
time of supply through invoice.
LS¿ítìijn.7õ,ß)I
l::ro^l?,Y; ".'"ll
soods ro ¡!:1: B fï T20,000. Mr. A is a[owins discount
I ot (Z,OUU at the tirne of supply. Detemine value of suppìy for ihe purpose of
.
'
levy of GST? ,
,lLq+t¡.:1q.:9Èqrlf
p gliÈí.1¡O9 tj-"
'.fsûþp.þ,1rià
value of tuxable s,,ppry m
,
j!¡9. tryglçq."t*
Srving effect of disôó.rni ,null U. <ra;oOo f* iÀe purpo"u of
levy ofGST.
lÍ-t3y:å::11_t:9og l*S "j
,.gds ro Mr. B for {20,000 and torãr unirs
:ï^o:.jÏg
*" y9*
1î
"YI.
B afrer_ includins rhese unirs is 2,s00. As pe¡
rerms ot tt¡e âgreement if Mr. B purchascs morã Èhan 2,000 r:ni* of goods in

25. 44 ¡ SHIVA DEL'.I¡UNNÆFSTIY SERIES
a year then Mr. A shall âllow a discount of 10o/o i¡ all the supplies. Assuming
IGST rate is 18%. Hor,r, will the discourt be recorcled? '
A¡swën
Irr the given case discou¡t has been given afte¡ the sãle, Mr..Arçil! issue a
.eredi. 1¡qtêyftli úr9..ù9. q{:gf
¡isçount å owed, ;.e., T5,qpq .nO
_cdä,Þ¡ ¡ir¡h1r
aiscõirrit:O rdy.':;.:,, <SAO ,"':
.:. .li:li l:l
,,, ;:,.
Exømple: Mr. X is providing coristfi-r ction seryicés to Mii
y-
In áddítiônrtô. the :','
consideration, Vfr, y ir iso. supplying construction mate¡ial to M¡. X.
Determine Value of Supply to levy of CST?
Answer:
, tn'th¿ givgnl!âse. ¡/.alùer of':co¡rÉtruction material will form p."t oi tirtir-e.oll
,
'supPl.y-i]:.:],...'.......'.:.:
Q. 7. What is the value of supply of goods ot services where conside¡ation is
not solely in money lRule 24?
Ans. If supplies are made against ba¡ter excha¡ge or partially in money and
partially irr exchange of goods and services, then the consideration is not wholly
in money. ln such a case value of supply shall be:
(i) Open market vdlue of such supplies, or
(il) If open ma¡ket value is not avâilable then monetâry consideration plas
nìoney value of conside¡ation not paid in money.
(tti) If the value of su¡lply is not de[erminable as above, value of supply of
like kind and quality;
(ia) If the value of supply is not dete¡miuabLe as above; nìonetary
consideration pltis amount jn
illonel. equivalent to the consideration nót
Ln money as pet RuIe 30 or RuIc 31.
Rule 30-If the value of supplv of goods and services a¡e nol clete¡mirecl with
tl:.ehelp ol RuIe 27 To Rtrle 29, then the value of supply shall be 110% of the cost of
such supply.
Rule 31-lf the value of supply of goods and se¡vices are not deter¡nined with
the help of RuIe 27 to R¡rle 3ø then value of supply shall be deterrnined usilg
¡easonable mea¡s consistent with the pri¡ciples and general provisions of this
chapte¡.
.Elornplz: Mr- A sold a ner¡j, bike for î34,000 i¡ a¡ exchùEe-i¡t old bike. Ooen
Markèt p¡ic€ of. rhe ne¡¡u bike is t52,000. Old Biké ¿an bã sot4 in tlie nìartet
for {2Q000.Ðetermine. the vaiue of suppit for the purp<ise òf teiþ:'of CST.
A¡ewen i ':-
-- -'
:
ln this case¿ Open Ma¡ke1 Value is availabje. Hence, Value of Supply sháll be
-?52;000.
,:iij;liï:ü!,tiiÆafiî.-å.îi$,a;¡fr$ ñ.e.iffiàou
Q.8. What is value of supply of goods or services or both between distinct
or related pelsons, other than through an agent [Rule
28]?
A]¡.E, Distiflct Persons: lf a person has obtained more tharì one registrations
whether in one state o¡ mo¡e than one state sha1l, in respect of each such
regist¡âtion, be ùeated as distinct person.
Value of sgpply between distinct persons _or whe¡e the supplier and
recipient are related (other than where supply is made thror¡gh an agent, shâll
be) will be-
(a) Open market value of such supplies;
(ú) lf open market value is not availablelthen the value of supply of goods or
services or both of like kind and quálity
(c) If thg value of supþly is not determinable as âbove, value of supply shall
be determined as per RuIe 30 or Rule 3L.
lf the goods are intended for further supply as such by the recipient then the
value shall, at the option of the supplier, 90% of the aÍrou¡t chatged for supply
of like kind and qualþ from the customer (urrelated pa¡ty) by the ¡ecipient.

26. Á¡iòilé¡i:
.In,tlüs.¿¿
be. tliä)
E4øtfpleiL,,,
price of
PA.I.J.
Ansyreìí,;:iti*
hr.: lhè,tti
Hêiiôê;i
:..-::
.
.:.::;a¿:::t:.:.:
.
'ì:
.
::lii,:trlli:.. :..,
,,,
.l
-cI4¡1ïF
2:.1Êr¡íaNÞ.coLLEsnoN,9E:9sTr.¡ 47:t
. At the opLion of tÌre supplier, 90% of the amo!¡lli charged for supply of
like ki¡d ârid quâlift f¡om the cuäòffi-(ñièlated pa¡ty) by the
, recipient.
.If the value of supply is not dete¡minable as above, walue shall be
determi:red as per Rrr/e 30 ot Rule 31.
Exønple: A p ncipal supplies grouirçínur oil tot'his¡aggnt
3¡{.,th.Stag."ltl¡, j
supplying grou ndnut oil of like ki¡d a¡d qu¡lily in subsequent supplies al. a
pricc öf T5,000 per quirltal on the day of lhe supply, Another indcpendenl
supptier is sûpplyijlg groundnut oil oflìke kilìd ard quality to the said agent
a{ rhe piice of <4,550 per quintêt.
$-nswer:' -
îhe value ofìhe su pply nade by the principal shall be ?4,550 per quinlal or
wlre¡e he exe¡ciseslhã option. the value shaJl6e 90"/" of T5,000, i.e., T4,500
þer quintai-
.
Q. 10. ÉIow to detêrmine of value in respect of certain specified supplies
[Rule 32]?
Ans. The value of certai¡ suppÌies, as specified below, shâll be determined in
tl-re Iollowing manler, at the option of ihe supplies:
1. Value of supply of service relating to sale of foreign curency including
money changing:
và1ùe
Q. 9. How is the value of supply of goods ¡¡rade or received through an agent
delermined [Rule 29]?
A¡s. The oølue of sltpply of goods betzaeen the priflcipal ønd. his øgent shall
bc:
.
Open market value of such supplies; or
'Ëffiffiffi,frHiîmîîirL;;;*r
15ô,.
t:iú
iÞf
4.*
tut
:¡l
ence rate)
Neither of cuÍencies exchanged is hrdian Rupees: 1% of lessel of the two
amounts received by converting â¡y of the two cu¡rencies i¡to l¡dian
Rupees at RBI Reference Rate.
(b) Person can also opt to âsce¡tain value in the following manne¡ for a F-Y
a¡d such ootion shall not be withdralvn du¡ine aÌÌv Þart of F.Y.
2. Value of Supply fol Ait Travel Agent:
. In cøse of Dot¡testic Bookittgs: 5% of the Basic Fare
. In case of Intenlatio øl Bookings:10% of the Basic Fale
Basic Fare meaÌìs part of fair on which com¡nission is normally paid to the ail
travel agent by the airlines.
(Gross arnouni of lndian Rupees)
x 1% p¡ovided/received,
(5,500 + 0.1% of
gross amount
Subject to maxi-

27. ce, ¡ sHrvÀ dÈ$ u¡trveÈ-È'rrv senled i:', . ,. ,,.,.,.,'i'..,
:.:,,,,,
3. Value of supply of services in ¡elation to life insurance business:
(n) Gross premium charged less any aDlount allocaLed for investmelÌt or
savilgs on behalf of the policyholcler, if such amount is intimatedj
(ú) In case of single premium ar¡nuity policies ohher tha¡ above, 10% of
single prernium cha¡ged f¡om the policy holder;
(c) In all othe¡ cases: .
.
25% of the fLst yeâr p¡erlrlium
.
72.5% oÍ the subsequent yeat pte¡nium
The.rbove provisions are not applied if entire p¡emium paicl is only towar<ls
the risk cover.
4. Value of supply in case of second hand goods. Difference between selling
price ald purchase pdce. No input tax credii ii available to ihe buyer of seconã
hand goods.
Value of goods repossessed from a defaulting borrower not tegistered for the
purpose of recovery of loan/debt: purchase
price of goods redu"ced by S% for
each quattet ot part thereof between purchase date aná disposal date by person
makìng such repossession.
5. Value of a tokeny'vouchey'coupon/stamp (other than
Þostage stamp) which
is redeemable agai¡st a supply of goods or se:-vices o¡ botil: Money value of the
goods or services or both ¡edeenrable agaitst such tokery vouchér, coupon¡ or
f
i
I
I
t
t
t
t
I
t
f
t
Ë
I
I
r
È
: ,,.i : . -...::
.'
'.. .. r;r:i1Íji.c!4qÊ-i¡.,ië
ôÉc$r E 4e
P¡.¡re Ageñt: Following conditions are required to be satisfied -
.
ContÌactual agreement with thefecipient
. No title on the goods or services
. No use of goocls or services for his own inte¡est
. Receives only the actual amount incurred to procure such goods or
?:1t.]|}"l_*,.,1" "aiue
of suppty of
_services
in case of f"r"
^g;ii
1n"t" aa¡z
"_1}1":"|;ri::l
ìncurred ùy rhe supplier on behaU of tt" ,".ifr",.,t ¿s a pure
agent shaLl not Jorm part of value of supply if following conclitions a¡e satisfied:
. The supplier acts as an autho¡izJd pure agenrJf the r""ipi;i .i;"ppl;;
.
Cost. incur¡ed as pure agent sÌrorìld be separately måntionecl in the
lnvolce;
.
Supplies of pu.;Ee.agren*bal1 be i¡ addition to the services he supplies on
his own account.
çiqjäilëtt,:x7
servÌces,
.,Vàrådl
feesl
Q. 12. How to determine MRP Bâsed Product lRule 35]?
Ans. Whele MRP of a product is inclusive of GST the value of supply shall be
determi¡ed as follows:
MrP
^
loo
(100 + føj Rnie)
Q. 13. Define the following:
(n) Free Supplies
(b) Input Tax Credit relating to free samples
(c) Free Promotionâ1 Item with Târlable Product
Ans. (a) Free Supplies. Schedule I of the CGST Act prgvides ce¡taù1 activities
to be heated as supply even if made without,consideration:
1, Penndfient transfer or dísposøl of business øssets uheie ITC has been apaíIecl ott
sucll øsset.In case ITC has not been availed, it does not fall into the criteria.
2, It coveis,supplies of.Goods or Services òr both between related persons or
between dìstinct persons as specified in Section 2Þ, r ¡hen made in the course or
furtherâJrcb of business without consideration.
Hence FIee Samples to unrelated pe¡sons are not cove¡ed u¡der the definitiolì
of supply. Criteria of taxable supply is not fulfilled in case of free samples. If
supply has not been done, taxable event ì¡r'ill not aÌise.
Thus, Frec Samples are not liable to GST âs the same is not a supply.
tröf:lihôse
of
.1S â

28. Þ-o;i,jÞ,{ül,tH$iF",W#ütÞÉ"ÈËg':ili$L*_ïil,t*î:llr}.ii,.ìlit:,,}:,,n,i:,,,ìr,r,ì,:ti1ii,,ìr:',ìr]i..tl
' Free samþles to ielated or distincf persons are taxable anci value of supply
rl¡ill be dete¡mined in accorda¡cé with RuIe 2g (øs aboue),
(b) Input Tax Credit relating to free samples. Section iz(S)(h) of the IGST Act
p¡ovides that no input tâx c¡edit is availablã if goods ar" toit, ìtot"rU destroyed ,
wrÌtten off or disposed off by way of gift or fre-e sample.
Hence input tax Gedit on inputs and seryices used in free samples should be
¡evelsed.
(c) Free Promotional Item with Taxable product.
lf a free promotional item is
provicled along with ihe taxable product then lhe consideraiion f., th" ;;;bi;
product only u'ill be charged from the consumer.
For lhe purpose of input tax credit on the promotional item, the¡e is no
resl¡iction in the law.
_H¡1ce,
input tax crèdit on
p¡omotional
it"í alollg _ith
taxable product is available.
+ 2.5 Taxability of Reímbgrsgrteêt_pft..F¡pgnses to a.
Pure Agent
,.,.. ,. ,-1. .,.
..:'::.::. :..
:.
Q. 14. Enfisarhe corþþf.9r..rhiç.h
leed
to be fulfilled to act as a p¡¡re
agenr.
Ans. Normaìly exgeryes i""urieá Uy the sgpplier of goods or se¡¡lces or bottr
ald reimbursed by the ietipient would be i¡òluded in-the t¡ar¡saction value of
supply for the purpose of levy and collection of GST. Howeve¡ if tlìer suppÌier of
sewi¡esrnerely acts as a pure agent then such expenses reinbûrsecì ¡r¡ould not be
inclr¡ded i¡ the t¡ansaction value.
As per-Rule 33 the expenditure or costs incurred by lhe supplirr as J purc
.rgerìt of fhe recipient of supply of se¡vices shall be exiluded f-m lhe uuluo oi
.uPPly if:
(i) The supplier acts as a pure agent of the recipient of the supply, whr:n he
makes payment to the third party for the services pråcurecl as the
confiact.fo¡ supply rnadè by third party is between thiid p4rty and the
rrrl iîåTäå",j"îãiþ¡a" u'es the services so procured by thè supplier
,..,.
service provider in hiÈ-T-àpacity-as pure agent óf.the recipient of srçþly.
(itl) The recipient of supply is liable to make payment to the'third par.ty.'
'
(lø') The recipient of supply authorizes th" supptie, to nake pay{nent on his
behalf.
(ø) The recipient of supply knows that the se¡vices fo¡ which payment has
.
been made by the supplier shall be provided by the third p'arfy.
(ai) The-pa]'ñent made b) the supplier ôn behalf óf the recipierrt of supply
has been separately indicated in the invoice issued by the supplie¡ to the
lecipient of service.
(z/i) The supplier recove¡s f¡om the recipi-e¡it-ofs-äppty only such amount as
has been paid by him to the thircl party.
(zili) The services procured by tÌre suppiier f¡om the thi¡d party as a pure
âgent of the recipient of supply are in addition to the supply he provides
on his own account.
Q. 15, Define the Term Pure Agent.
Ans. Pu1,e ø.gent fieans a person zaho
(a) Enters i¡to a cont¡actuâl âgreement with the recipient of supply to âct as
his pure agent to incur expenditure ot costs in tlìe course of supply of
gooCs or sen¡ices o¡ both.
(ú) NeitÌrer intends to hold no¡ holds arÌy Litle to tlÌe goods or services o¡
both so procured or provided as pure agent of the recipient of supply.
(c) Does not use for his own intelest such goods or services so procured and
(d) Receives only the âchral amoulìt incu¡red to plocure such goods or
services,
' 'Êxønple: Cotporate services firm A is erlgageJ Lo handle the leg?! work
pertdinìng to trire i¡col't oration of Company B. Other.thariits service fees, A
álso"recôvers ftoln-B, regishatjon fee a¡d apþroval fee for the name of the
company paid to thé Registrar. of the Comp¿¡ies, The fees cha¡Ëed by the
n"gititur åt tlre compani"es lor registration ond approval of the"nasrä a¡e
.compuJsorily levied on B. A is merely acting as a pwe agent in the payment
, . ¡ofrthosä:Iiies; Theigfo¡ei .{q îéçovcry of such expènses is a disbrirsêinèn1 anc{
,
1
"41
¡q¡t¡åf
tn" ;áù9 of st¡ppl.r,'madèt¡vre q.,.rr.,'
-.,t,:
:
,,1
:¡ i:.'¡,r,.'r..
P 2.6 Exernption from GST
Q. 16. Explain various exemptions provided in GST under the cornposition
scheme.
:
Aní Corupositìon Schetne. A scherne which is made for the t'enefit of small
clealers, smaÌl manufacturers and small service providers by reducing thei¡
burden of complialces through less number of retwns, less maintena¡ce of books
afld Ìecords as compared to general dealer.
Who cøn opt for
Compositiott schetne?
: Dealers and ¡ranufaciure¡s, who ate supplying goods and whose aggtegate
furnovet does not exceed 11 crore in the preceding finaincial year ca¡ opt for
Composition scheme. In case of North-Easte¡n States and Himachal Pradesh
(Special category stâtes) the limit is {75lakl.r. A non-resident taxable pe¡sonis not
eligible to opt for this scheme.
Aggregate Turnover means.the aggregate value of-
(i) AIl taxable supplies (excluding the value of inwa¡d supplies on which
. tax is payable by a person on Reverse charge basis),
(ii) Exempt supplies including non-taxable supplies.
(ill) Expolt of goods or services or both.
(i?) Inte¡-state supplies of person having the same Permanent Account
Numbe¡, to be computed on all Ind a basis.
igt:Jl
l
I
I

29. fiËÞ":ilr,1ütryÄ:4Éñ,¡j.lllFæ.É"vÆ!'Es.,:¡ij,....l;lír, r,r:.tr.,:1,: rirïi:':;iíri':i.;rffii¡:,rr,':ri;tl.i
Flowevet Aggaegate turnovet, excludes Cenhal tax, State tax, Union te-r¡itory
tax, Integrated tax a¡d Cess [Section 2(6)].
The defii¡jtion of aggregate tumover is very wide. The definition of eìernpl
supply iacludes Non-taxable supply also. So every supply whether covered
un<le¡ GST or not is included in the definition of aggregate turnover. Also the
agglegate turnover is for all businesses ¡êgistered uncler single PAN.
Follouing rcg¡stercd persons shall ftot be eligible to opt fot cornpositiott
sèheme:
. Supplier engaged in making inter-state outward supply.
. Supplier engaged in making aly supply of goods which a¡e not leviable
to tax uride¡ the Goods a¡d Service Tax Act,
. The supplier shall not make any supply through an e-colrunerce
operator.
. Supplier is not engaged in the manufacturiag of Ice c¡eam, Pan masala
a¡d Tobacco products.
. No benefit is given to the setvice providers but theÌe is ar exception
given io the rertau:rant service providers as mentioned it Ctause ft) of
patøgraph 6 of Scherlule II. If a restaura¡t service provider is providing
sewices and aggregate tu¡novet does not exceed 11 c/o,.e ifl the p¡eceding
fi¡ancial year tñen he is entitled to opt for Composition scheme.
Impact of becomíng a normøl dealer from a Composítion dealer:
lf during the current':i€àittie,laggregate turnover exceeds 11 cror¿ then the
supplier is requted to
Þãyrjâi
àê a ritìimal clealer. In this case the Composition
supplier is required to fiþ.âFORM cST.CMp-04 within Z ,¡ays.
Details of stock and capital goods, as on the day when the Composition dea-ler
is becoming a no¡mal dealer, are required to file in FORM GST ITC-01 within 30
daAs b rake the credit o{ input on the same.
Teftfls ør1d Cotlditions to opt Íot Contposition scheme:
(a) Composition scheme will be available for all businàsses registered under
singte PAN. A supplie¡ is required to opt for Composition scheme fo¡ all
businesses registeled under his PAN.
(b) The supplier-is required to mention "Composition Taxable perso., r,ot
eligible to collect tax on supplies" on the Invoice.
(c) The supplier is required to rnenlion "Cornposition Taxable pe¡son,,
on
every notice, signboard displayed at all places of his business.
(d) The supplier should not be a Casual Taxable pe¡son
o¡ Non-resident
Taxable Pe¡son.
(e) The supplier will have to pay tax unde¡ Reverse charge if any of his
inward supplies is covered unde¡ Reverse charge meclLanism.
(rf) Stock as on appoi¡ted day has not been purchased in the course of-.
. Inter State Trade ot coûu¡erce
. Imported From a place outside ilrclia
. ¡eceived-f¡orn his blanch situated outside the state
. received from his agent or pri¡cipal outside the stale
äiliiitiiti#Íl#ffif Ídft ilffi ffi ffitrffi Í#trilffi ffi il
ji#ff
f þ ftrijr¡l$¡#i¡i¡ffi¡';;¡tffi
,' .1,t
:.
;;;:,:;i;:.,, :,..:.:.;:;,,t.,1,:;.,.:r;,.r:,,,11ä.llfäfqiÄiTÈn!i.
..$F.#,F.. ilìÞeÈr'
i¡ ss
. If the supplier has stock as on appointed day which is purchased
form unÌegistered dealer then the supplier is required to pay tax
under Reverse chafge according to sub-section 4 of Section 9
otherwise he is not entitled to opt for Composition scheme.
(g) Ali registered persons having the same PAN shall have to opt for
Composition scheme.
(/4 If the supplier has opted for Cornposition scheme then he is not eligible
to collect tax f¡om the appoin€ddâfif+he application is filed after the
apÞointecl clay but shall issue bill of supply for supplies made âfte¡ thc
said day.
(i) if you are supplying goods to a ¡egistered . dealer then Composition
Scheme is not beneficial for you as the Registered dealer is not enLitled
for lnput la credit.
(/) IGST deale¡s are rÌot eligible to take thê bqnefit of Composition scheme.
(k) lf you ate a normal deale¡ and wânt to opt for Composition scheme, ail
credit in your ledger will lapse and will be included in the cost of goocls
ls¡:ction 18(4)1.
(l) If you are'opting fo¡ Composition scheme then you are not entitled fol
lnput Tax c¡edit which becornes cost of your product. Now you will acl(ì
margin aÌid ConÌpositicà tax, credit of which is not available to the
buyel. So for.the purpose of opting for Composition scheme, one should
take decision after considering competition as the cost of product'¡r'ill
increase.
(nl lf any registe¡ed person wants to withdraw f¡om the Composition
scheme he shall file an application in ÈOnV CSf CVfp¡ , electronically
before the date of such withdtawal.
Qt¡.trtetly ReturtL A person v¡ho iq paying tax under Composition scheme has
to file quarterly retu¡n in Form GSTR- on or before 78th day of the nofltl1
succeeding the quârter for supplies made during that quarte¡. Exantple, fot'
supplies filade during 1st July to 30th September, retum is required to be filed u¡r
to 18rlr October.
Røte of Tøi! Composition scheme dealers shall pay tax on their turnover in
state or Union terdtory at following rates:
Í.{#,íif,líilf i,ffiíì:ffi
For Manufactu¡els other than
manuf actu¡e¡s of notified
of
. lf you are registered as composition dealer r¡¡der some previous law, i.¡.,
V.t\T/Excise then also you need to apþly for Composition Scheme in GST
irì FORM GST CMP-01, cluly signed within 30 days from the appointèc1
dây. F{oweve¡, once the option is exercised 4/s 10 it shall ¡emain valid so
6 of Schedule II

30. b4 .ä .rSHMAìjÊt¡iiiilN,t$ffiä-..s€E,EFil,,i_,i
i;t.iillilif,.f1t ,::,',,..
:,.tt.t
,.r:.
...
. long as he satisfies all the conditions mentioned in Section 10 ãnd
. Composibion Rules.
. lle is also required to furnish the details of stock, including the invard
supply of goods received from u1ùegistered persons, hetd by him on the
day preceding the date f¡om which he opts fo¡ Composition scheme,
electronically in FORM cST CMp-03 with),n 60 days ol the dâte f¡or¡
which Compoèition scheme is opted.
. If any registered person, í.e., normal dealer wants to opt for Composition
scheme, he shall electronically file intir¡ation in FORM GST CMp-
02 prior to the commencement of finaìcial yeal. He is also requirecl to
furnish FORM GST ITC-3 wltl¡t¡t 60 days frorn the cormnencement of ilÌe
relevant firìancial year.
In addition to the above, he shall pay an amount, by viay óf debit in the
clectronic creclit ledge¡ or electronic cash iedgeç equivalent to the credit of input
l:ìx irì lespect of ùlputs held in stock and inputs contained in semi-finished goods
or firished goods held in stock and on capital goods, teduced by such, percentage
l'roinLs
as prescribed in ITC rules on the day immediately preceding the date of
,'\ercising such option.
Exam¡lè: MÍ;
"i',o*ro'-¡iÌ3t
Pleceor¡g
:¡r¡i
(¿r),-ISiì:Miåì
(bi''u.
(")..tfi.ttiê:
Ans¡ryéi:-
ACCr.gCêtq
undéil. ithå
acclegê!C,i
.; .t ':..:..'...:t:."...::: . :::: )" çHAqrER 2: tEvY.ANDcoLrE-cÍoÑ oF ijsr É 55
.'. ,(c)j iË$;tj\4¡,ìri is.têtigil,t": ø,,"q-ppeiit"'trçî"?ê.Ei,lòvèr,.of his .fi¡m
,,,,,,,.
'',.i4.cji,Í,-lpJ,¡éfÊ99t:t.1.qc19.ln'tlie'pr,+édiagliaanci{Yea¡..r.
a:'.F.1;t4ij¿¡$¡t:a41.;â;,q!a1er.whn Þ,.sgLi¡g:sòodiwhiç¡.;"¡e',i.vritte,to csr,'
exernpied good.s and non-taxable goods. His turnover in the precediJìg F,Y,
is T55 lakh.Ío¡ thê.foods wtuch a¡e leviable to GST, T10 lâklrfór exempted
goods ánä T15 lal.]r for non-tâxabie goods resþectiùe1y. Is Ml. A is eligible
for Composition scheme?
'
Ansvr,er: -
,. 4eC'€91¡9.1,
q'¡."1-el.i4rlqde! att tyþË-.óflsuppliès,,ry4e,.byi.4il,:lhgi:perso. ¡s
::,.ÍegiétQièijirälcie¡r:sirùlelPÀN: If a pe!3o¡.iq 3e!lùig.th.e'ÉoddÈ ilvhich:àie not
,r,,: iev¡ã¡tê:tó:itái,irñdèîr:dST. r¡en h;.js.ì]ligiui¿ uì,- Þitl:.ftl¡,ihålcornposition
scheme. ln this case âggreg¡te tllrnover do"es not exccecls t1 cro¡c. Aìso he ¡s
making iupply
"f
g"õãt ini.fr are nol, leviable to tax. So, Mr. A is eliBible
foÌ Cornposition sch,cme.
Êxanple:Mr. A rcþiitered in RalasLha¡, who is setli.ng
6oods
from Rajasthan
.to Cujarat. Tr¡¡nover of M¡. A ii t73.,L3!! in the ?Ieçgd¡8 4+a¡!t4
yg*. I"
Mr. A elgrblè f9r Compositiolì Þcbe-rl.g? ,: . : ...:
..:, ... '. .
:'.j.:.:::t..
Will yóui answer change if M-Ì. A is mcki¡g
Purchases
from Gujarat and
sellLìg-goods i¡ Rajasthan?
_
Ajll6wel:' -,. : :.:. ::.:: : : .:.1-...:. :,.::.
iy., Á.'i¡
"", "iiþlUt.
fo. composition scheme as hc is making intet-state
outrvard supplìes.
Tf Mr. A is making purchases forú Cutaret thelì he is eligible tor
Composition scheñe as there is a restriction on outward iîte¡-stÀte 6upply
"r,
,i" i^**a ¡","r-state suPply.
Exømple: Mr. A ¡s sellirìg gocds through aii e<ommerce operator. Tumover
of prececling li¡a¡cial yeÀ-r is {7L lakh. ls M-r. A eliFble for Composition
.':, schèäê,3-li.i..'i.i '.]:j':l¡:, ,..', l.:ìi::'r''r.. r.. : '::'' .:..:..: .. . .:'.. ,.
' . A¡rswe¡i
'
.No- Mi..A- is selli¡g goods ttuoilgô,Þii,rq:co4iliêr€pperato,t'hence hé is not..
glfgrb]e fo¡ Compg,sitió¡r
¡çhe¡ìre:
l r':.r--
,' ' -...' , .. .';.:'..'
;:'. .
': ÉrintiJ¿::,ltll..N,l..àlRón-¡.esiaent' ta.:¡abie peison:is ruming,a ieadymade
,
gaúiþf.rr;!úo.¡^tL9-qrí.ùr Raþstlian.. T¡¡¡¡1ove¡ !q¡ ¡the prlecgding financial year
: is {Z0.,i!é,!.¡,:]9 hF.lÌêligible to opt fór) Coi¡posilion sclleme?
, , .
;.A¡qrú..s,¡l:l..l,.,.,''..,.:|.:'..|::.::
'.: Mi;.i.Ä:i:i$iìqot-,è.qgi.Þ,le
¡or
coTpg9¡lj,o¡ sc.þ¡me
.
gs
¡Ja¡-ab. .fq
. ,¡ion-resident
,'t ÞÞ,i1.d.'¡. i#i¡,c!.--r,i!,+J
üqluaed. itr¡+;!þe c!-inpof itiôr! 3chgm9:
I
Q, 17. Explain the exemption ptovided to small service Ploviders
under
GST.
:
^ns.
S%øII sttpplie¡. A busi¡ess entity with an aggÌegate hr¡nove¡ of up to <20
lakÌrs would not be ¡equired to get itself regislered under the GST regime, unÌess
he voluntarilv chooses to do so.
exerhpt
tuu roven:
(n) M¡:ri{
for,::,
CóÌn
sa.ûie
(bt
Á

31. s6 . r SHMA DEi.tiìt-uNr\ÆRsiTy SÈFES
:
.1
Ì-¡i#i$:
Below is the list of states which are assigned special status unde¡ Goods and
Services Tax Law:
1. Arunachal P¡a<lesh
3. Jammu & Kashmir
5. Meghalaya
7. Nagaland
9. Tripura
11. Utta¡akha¡rd
^. Lh:
g:.l.l1,tt*i of aggregate tumover for aI.the abòve states has beeù kepr
1_al.?
t,* So Lhe s¿rne exâmple wi¡l apply here too, but the numbers will get
,Exatnfte:.\e
tumover of the fa¡mer Mr. B Iiving jJ¡
Nagalând js
î15 l¡kh
trom agricultlire. Hrs taxable tur-nq1,s¡ É-.m the sale of p'Íasfic bags is only
15O,Ooo.
Ansu¡e,r:
. :,.t,
F: ? îT,1"-"
,:_.-"-F:a:,t under CST as his oggr"gui" rlrmover. exceeds rhe
rhfeshotd limit of ?10 lakh for special category itut"r.
Þ 2.7 Classification of Goods and Services
. _r^:,:11:,:,rt:,
Conrposire supply means a .uppty made by a rdxabLe persorì ro
a rectprent that:
. comp¡ises two or more taxable supplies of goods or services or both, or
any combination tÌrereof.
.
are Lìaturally bundled ancl supplied in conjunction wiih e¿(h other, in tbe
ordinary coruse of business
*,::T:f .îT:h
is a principat suppty lsedion 2(30) of rhe CGST Acrl.
I r¡.rs ¡neans that in a composite supply, goods ot services o¡ both ale burìdled
owi¡g to natu¡al necessiries. the elementsln a c"*p""i¿:"ppi; ;à dependent
on the 'principal supply'
Pri¡cipal sì.rpply meâtìs the supply of goods or se¡vices.which constitutes the
lï?:"""j
e.l:Tînt_9Ld
lo]]Ipos¡re
supFty , r.J r\, ,vhictL .ìnv orher.sUpply
,ot:yq
l:rt
or thàr composite supply is ancill¿ry
lsection 2(90) of CGST Á;tl.
Q. 18. HoM/ to dete¡mine the tax liability on composite sìppti""Z
ir'- : lì#":1 ,,; ¡,
i,ll'il' ;:' : :i.
.ì :ì'',i ,j..,ri,.'i,
2
4
6
8.
10.
t
Assar¡
Manipur
Mizo¡am
Sikkim
Himachal Praclesh
Ans..A composite supply comprising of two or inore.supplies, one of which is
a principal supply, shall þe treated as ã supply of such principai supply.
,,t;ta41l
'.:.,:a).:.tr,.:
t.Ã:.;1,t,. ,.:
ri ì::!r{r1,,: r¡l! ¡!.i!rni.á}¿i¡
e. 1e. rrow ro derermine -h"rh;;;h""Ji;;";:"ilä;ål,,tr,e o"ai,,ury
course of ]5usiness?
Ans, I44lether the services are bundled in the ordinary cou¡se of business,
wouid dei:end upon the normal or f¡equent practices foilowed in the area of
business to wtrich se¡vices Íelate. Such no¡mal ãnd frequent practices adoptecl ìn
a business cân be asce¡tained from several indicatorsìome of wbich â¡; tistect
below:
.
T¡.e perception of the consume¡ or the service receivêi. lf lâtge number o f
selvice receivers of such bundle of services reasonably expect such
sersices to be provided as a package, then suçh u pu"iug" coulcl l¡e
tréated as naturally bundled in the ordinary course oflusiness.
.
Majority of se¡vice providers in a
iarticular atea of business p¡ovide
sirnil¿¡ bundle of se¡vices.
For example, bundle of caterùtg on boa:.d a¡d t¡a¡sport by aù. is â bundle
ofl:ered by a majcjrity of aûlines.
. TÌie natrue of the va¡ious servjces in a bundle of services will also help in
determùÍng whether the services are bundled in the o¡di¡arv course of
business, If the nature òf services is such that one of the se¡íices .is the
rnai¡ service and the oLher se¡vices combined with such service are in tlLe
r.ratu¡e of incidental or ancillary se¡vices which tielp in bettér en¡oyment
of a main service.
ìi+¿o¡*tt"
supply
rand

32. ue
'rliÉËru:"ffi'¡t¡5m¡ff",ü;*silÉiìÍ
i:i;i:iil;,:!',|¡"i
t,,,t:,
. For ettample, service of stay i¡r a hotel is often combined with a se¡vice o¡
.
.laundering
of 3-4 items of clothing free of cost per day. Such service is an
ancillaС service to the provision of hotel accommodation ând the
resultant package would be t¡eated as services naturally bundlecl ill the
ordindry course of busjness.
Other itlusiTative indicators, not determinative but indicative of bundling o.f
services in the ordinary course of business a¡e:
. There is a single price or the custome¡ pays tlÌe sane amount/ ro matter
how much of a package the customer actually recejves or uses.
. The elements are normally adve ised as a package.
. The diffe¡ent elemellts are not avaílable separateiy.
. The different elements are i¡teglal to one overall supply. If one o¡ mo¡e
is removed, the nature oi the supply would be aÍfected.
No straight jacket formula can be Ìaid clown to deierIniìe whether a service is
nalurally bundled in the ordinary course of business. Eacl.i câse has to be
hdividually examined in the backdrop of several factors soû.e c,f which a¡e
outlined above. The above principles explained in the light of what constitlrtes a
raturally bundled ser¡¡ice can be gainfully adopted to determine whethe¡ a
palticular supply constitutes a composite s-upply,under GST âncl if so what
constitutes the principal supply so as to-.dé.té¡nriiiç fhe:tright classification and
r.ate of tax of such composite. supþty, .:. ',t:r:. i,r,. t]:,,, '
e" 2.8 Mixed Suppliès
Q. 20. Define Mûed supply.
Ans. Míxcd stpply mèalns:
. two or more individual supplies of goods or serwices, or any combination
thereof, made in conjunction with each other by a tãxable person.
- for a single price where such supply does not constitute a composite
supply. [Section 2(74) of the CGST Act]
TlÌe i¡rdividual supptes are irìdependent of each othe¡ and are not natu¡ally
bundled.
Q.21. How to detèrmine if a particular supply is a mixed supply?
Ans. In orde¡ to identify if thg particular supply is a mixed supply, the first
requisite is to ¡ule out that the supply is a composite supply,
A supply can be a mixed supply only if it is not a composite supply. As a
corollary it can be said that if the transaction consists of supplies not naturally
bundled in the ordina¡y cou*ss€Éåusiness then it would be a rnixed supply.
Once tbe amenability of the transaction as a coûrposite supply isi ruled out it
would be a mixed supply, classified in terms of suppiy of goods or services
.rtbractirìg highest rate of tax.
Q. 22, llow to determine the taj( liability on mixed supplies?
Ans. A mixed supply comprising of two o¡ more supplies shall l¡e treared as
supply of that pa¡ticular supply that attratts highest rate oÍ tax.
I
I
i
I
t
I
çr¡+p.:re¡ èi,r¡-vvr¡Ñp"çot++ùiù.o. r.osr¡,,a"
1
'==B@l*r=

33. lrupur Tnx eneolr
* 3.1 Definitions
It?pu ¿ means any goods other than capital goods used or intended to be used
by a supplier in the course or furtherance of business.
Input sercice mea¡s any service used ot intendedrto be used by a supplier in
lhe course or fultherance of business.
lttzaørd supply in telation to a persor¡ shall. mean feceipt of goods or services
or both \,vhether by pwchasg,t acquilition or any other means with or withoirt
consideration.
Ortryttrt tax Íelatron tô a tâÌable persoû means the tax chargeable under this
Act oñ taxable supply of goods or services or bolh made
but exclude,s tax payable by him on ¡eversc charge basis.
but exclude,s tax payable by him on reverse charge basis_
Outu¡atd. suppl! i^ rclattorl to a taxable p""õrr,
^uurt"
supply of goods or
se¡vices or both, whether by sale, traasfe¿ bartêr, exch'angø ücåicä, rentat, lease
or disposal or.any other_ mode, made or agreed to be madã by such person in the
course or furtherance of busi¡ess
Wotks Cofltuact mea¡s a contracL for building, const¡uction, fabricatiory
completiorç e¡ection i¡stallatiory fittjng out, impto,iement, modificatiory ¡epai¡,
maintenarìce, renovatiory alte¡ation ãr commissioning of any imrnovable
propert¡r wherein
lralsfer _of
prope¡ty in goods (whethe-r as gooás or in some
other torm) is involved in Lhe execution of such contract,
Ca.pit.tl Good.s mears goods, the value of which is capitalized in the books of
accounts of the person claiming the i¡put tax credit and which are usecl or
i¡tended to be used in the coursq o¡ furtirerance of business.
GST Capital Goods Input Rule-43
:+ 3.2 Eligible and Ineligible Input Tax Credit
Q. r. What is lneligible .(TC?
Ans. brelìgible lnp t Td.Ì Credit OTC) mea¡s situations whe¡e input tax c¡edit
Lrnde¡ CST is not ¿vAiiable.__.
-_
i
I
f
I
I
.:..-.,.. ,..,. .:. ::...: LI.i,II,I:..IIi,ri
C'HAPIEF g::li\lCO!\4EJ-å|:qBF.D.fr.:,1!r.q1
Q. 2. Describe the cases where ITC is unavailable unde¡ GST.
A¡s- Cøses uthere ITC is unøz¡øiløble undet GST-
1. O¡ inwa¡d supplies used for non-business purpose, When a registerecl
person is using input
toods or selwices for both business as well as r-ron_business
purposes/ credit of GST paid on goods and services used fo¡ non_business
purpose shâll not be available.
or services o¡ both made by hilì or by his agent
,.þø;þtè-i::[\i:1
¡leen
Palo. /5
Exønpìle:.Mt. À
þucha9esl
been paid. 75 meter of th¡
'Clièntstl¿iì{dì,25t
riíéÍéi3ìid ù'èClients arld 25 meters is used by h
No\i our of cST o¡ g10,000 paid.
t::¡k
available to lütn.dv.!lqo¡s. rro rìuÌ: ,.., ., 1..:t:..::tt::.iì,,i;t.,;::"::l:iì1,:lrl:l:titjl:i:.4ti{tiì.:j,..ü::tiiìji
2. On inv¡ard supplies used for exempt goods. ì44ren a reeìste
usi¡g goocls or. services for making ta
GST paid on goods and services used for making exempt suppiiãs shall not be
àvâilable.
Expott anii. supply of Goods or serttices to SEZ is cowlted ds zerc ïøted. supplV. Credit
of GST paid. ìtt:t goods ûnd serþices used
for
making zero rated supply toíll be aõailnble.
Exarnple: Mt- A purchases 100 meters of i:loth on wfücü'.-ddÏof {10,000 has
been paid. 75 meters of that cloth ic
"""á
l'" hi- lÀi#ät'r;; on¡i" ¡^. r.¡"been paid. 75 merers of rhat clqth ¡s useá bv him lóiiìi'dl'jiü shirts for his
cfients orììt of which some shirts àie ãlso êx;orred-:;t
'ã
rs .Ë"i"i" ¡..,,".¡ t ,
¡l1s¡a
giTt:91,¡,r'jn
¡ú''e'j!$.rÈ.iilri.¡.,i4ü:¿,Þtí,iÊ¡'|_&ä*Ð*,.tilÈjè"!,.åË"""0
oy
him for making army uniforms, whi¡h is a exempt.èrillily;J-rl9w out of r
of 110,000 paid by Mr. A, cedir öf t2,500 wilt not.Ëååüâlãbtê to him.
3. Pu¡chal¡e of motot vehicles ánd other conveyance. ITC is not availal
him for making army uniforms, whi¡h is a exgmpt.èrillily;.ÀIow out of GSi
of 110,000 paid by Mr. A, cledjr. öf t2,500 w¡lt.not.t5Éäüâtãbtê.to him.
purchase of rnotor vehicles and other convevance.
There a¡e lew exceptiorrs to this:
for'exempt goods. \44ren a registered persoñ is
11g taxable as well as exempt supplies, Credit of
. When motor vehicles afld other conveya¡ce aÌe
providing supply of such vehicles or conveyances.,
, j1t3¡1.r:ï:.::::.: :rr: "r:.
fói
hãs
nrs
,¡otlbe
available on
used for further
:,to a

34. "i.¡!e¡1i.ÀW'.'':,,:,¡'.,;.','|;;|;;,:,'
1.,..,.
..,, ., .
4. On services such as food and beverages, outdoot cate¡i¡g, Ireauty
tÌealnrent, health seryices, cosmetic a¡d plastic surgery, except wheti they aie
used as inputs fôr providing the same category of goods or services.
5. Mernbership of a club, health or fitfless centue.
6. Rent a cab, life insu¡ance ancl health insutance sevices eÍcept-
. When they are oandato¡ily requi¡ed to be ptowided by the employer to
the employee u¡der any law.
. Vvhen they are used as inputs for providing the same cateBory of goods
oi services,
7. Trâvel benefits extended tã ernployees on vacation such as leave o¡ home
tlavel concession.
8. GST paid on workÊ conkact services, goods and services used in relation to
an Immoval¡le Propefty (òther than Plant and Machinery) e¡:c¿p¿ when they are
used fo¡ further supply of works contract service.
"Cónstruction" íncludes rc-construction, renooatiul,,oddilions or filt¿rfitions 01,
lcpn¡rs, to the ex.tent of capíta.lisatian, to tlæ søid imntoaable propetty;
.
"Plant a¡d Machinery" meats apparatus, equipment, and machínery
fx.ed
to ecÍtl1
by
founcløtion
or sttuctufil support thûI are used for finking ounlard suþply of goocls or
seruices or both and includes sudt foutdation ltnd stru9tuiql.. supports but exchtdes _
.
Land, buildìng or any other cioil stniiiiies'l:1.:.. ::.- .
.
Telecommunìcatíon towet s,.: .. r. .
.t
,
li;a
ì:)ir ii.,
-
.,r '.
.
Pípelines laid outside th¿
factory pr"*ii"".
9. Composition sche,iñe-rÇóôdè o¡ services or both on which tax has been paid
Lrncler composition scheine;
10. Non-tesident taxable person. Goods or services or bdth received bv a no:.r_
resident taxable person except on goocls irnporteá by hirn;
11. Personal corisumption. Goods or seriices used for pelsor-ral consumption.
_
12. Goods lost stoìen, destroyed, written off õr disposed off by way of gifr or
hee samples-
13. Any tax paid in accoidance with the.provisions of Sections 7{ 129 and 130
of CGST Act (These sections are related to assessment).
Fiß,!ple;
\4r.. { þ¡q {qne Tax Evasion of {20,00,000 and tùe sarne is caught
by the Assèssing gtríç.f1. He shalt nöt be- atlswed lo use input tax credirTor
paymenl of'this:tà*:j-Þility. . :.., :
Similarlp input tax ctedit ca¡Ìrot be used fo¡ payment of any interest or
penalty Jevied iî tllis act.
-_=_
Q. 3. State the provisions pertaìilig to mode of claiming ITC by Banking
conrpanies.
_.
Ans. Abanking company or a Financial institution i¡cluding a Non-banking
Fi¡ancial Comp_aly (NBFC), engaged in supplying services by walr of acceptin!
deposits, extending loans or advances shall have the folìowing t\a,ó opdons_
-
1. Comply with lhe provisions u/s t7(2\¡.i.e, avail of ITC attributable to
taxabìe supplies (including zero rated supplies) and not on exempt
supplies, or
ri::¡:i,.:,i..;-:*,*t|1,..,ii.,ii,l:.,:,:.;:.,,r..,,, ,r:.:r:,r,,.i,,,,ç¡+Èi'Én,C;:fñçq¡¿E,[.f+,çnçÉi¡,¡:,.-6._gï
: 2. Avail of every month, ârì amount eqùättô-flfty?er cent of the eligible
: inpr¡t tax credit on i¡puts, capitat goods and input services in that month
and Lhe rest shall lapse:
Provided tF'at ú Optìofl 2 is .exercised, it shall not be withdrawn duÌing the
rernaiìing pâlt of the financial vear.
Provided furtlìer thât the ¡e.st¡ic-tion of 50% shall not apply to the tâx paid
on supplies made by one ¡egisterecl person to anothqr regiËtåräa p"r"or. hu.ring
the same PAN.
?.
4.
!lif- ll"
eligibitfty and condirions for taking inpur rax credir.
A^s. Eligìbìlity ttfld conditìons
fot tøking ínput tix cridif lsecrion 16]r
(i) A_U Registered pe¡sons
shall-take c¡eáit åf input tax ad i.rlUtu u" p." tf,"
terms and conditions specified in Section 49 on all goods and supplies
or both used, i¡tended to be used in the course oiÏurthe¡ance of his
business.and the said amount shall be credited to his ECL lElect¡onic
Credft Ledgerl.
Furnish such detail in Form GSTR_21
(tt) A Registered person can claim credit årúy if he_
.
possess Invoice or Debit notei
.. received the goods or seivices;
. tax chdged on such supply has been paid to Govemrnent either in
cash or tlr¡ouglì credit utilization, a¡rd
. pe¡son has filed the Retum ry's 39.
(iii) Where the
toods a¡e received i¡ instalments o¡ lots, I.l.C shall be
available at the time of receiving of final instalment or lot.
(lz) Recipient shall make the payment to the supplier of goods or services
(except tax payable unde¡ ¡everse cha¡ge) along with tJx payable within
180 days from the date of ìvoice othe¡wise.thjtc taten'shalt be added
to.his ouÞut tax Ìiability with irterest [Furnish such detãil in Form
csTR-21.
Same ITC can be claimed after the payment to supplier along with to.
payabie thereon.
Rule 2 plovìde, tctt such fTC shnll be added to o tput tax liøbility
for
the month øftet the passing,of 780 days. Registe/ed person need ti
þøy
interest as per Section 50 of the act fiom tne døte if tøklng ITC to ttie
døte of adding to olrtput tør l¿ø.bility,
(¡r) 1 &ere the ¡egistered person has claimed depreciation as per lncorne Tax
Act on tax component of cost.of capital gooás and plant ånd machinery,
ITC Ehall be denied on the said tax comfonent.
(?,i) ITC shall not be allorved afte¡ the due daìe of furnishing the return ry's 39
for the month of September following the elrd of finarr"cial year to which
invóice/debit note ¡elates or funrishÌng of the Annual Retu'¡n whicheve¡
is earliel.
Q,5, What.is the Orde¡ of utilization of ITC available in the Electronic
Credit Ledger?

35. 64 T SHÍVÁ ¡]ËLHI UNIVEFSÍ.Y SEBìÉS
Ans, As per Section 49(5), the followìng shall be the order in which the Inpul
tax c¡edit available ì¡ the Electronic credilleclger shall be uljlized for tax
mentl
Ittput t.1x Crcdit on
First for payment of
IGST.
Then fo¡ payment of
A¡d then if balance is
there for payment of
SGST o¡ UTGST.
*
CCST and gas-[ te 1,11tt1ta11y ¿r¿¡ßr¿¿.$,hich mea¡s rhat these câ¡¡oi be adjusted againsr
Fi¡st fo¡ payment of
CGST.
accouflt of CGST
tqr Crcdit ofl
Then for payment of
IGST,
¡+ 3.3 Apportionment of Credit and Blocked Credits
Q. 6. Explain the concept of Apportioirment o{ Credit and Blocked C¡edit.
AJ¡s- Apport¡o tne f of Cre.tit and Btocked Crcdìt:
1. I¡y'here the goods or services or botir aÌe used by the registered pe¡son-
*In
case there is fu¡ther
bâlânce it ia'ill be
cauiecl forward to the
nexi periotl aud shall
not be utilized for pay-
ment of SGST/UTGST.
øccount of SGS:IIIIGST
. the amount of credit shali be res t¡icted to the i¡put tax attributable to the
pu-rposes oÉ his business.
2. V\¡here the goods 01 se¡vices or both ale used by the registeled peïson_
. paÌtly fo¡ effecting taxable supplies i¡cluding r"ro_rnLd supflies under
CGST Act or under the IGST Act, alìd
partly fo¡ the purpôse of any busi¡ess, ancl
parlly for othe¡ pu¡poses
Tl-ren fo¡ paymenl of
IGST.
. partly fot effecting e¡empt supplies unde¡ the said Acts,
. tlìe amount of credit shall be rest¡icted to tlÌe input tax athjbutable to the
said taxable supplies including zero_rated suppìies.
The aalue of exempt sttpply shall be øs prescibed by goaetnntett_
. include supplies on which the recìpient is tiabiá to pay tax on reverse
charge basis
*In
case there is fu¡the¡
balance it will be car¡ied
forwa¡cl to the next
period ald shall not 1¡e
utilized for paymerÌt oI
CGST.
':
,', ì ,,.:::.,:.:..,.:tìi,llt:,tr;i.t::j:¡,..,:!.:l't.;,:],ø]4pdffi.ä.ìiFi$t fd(:Eii¿ù¡
es
2. Aváii of everv month, arl amount equal to 50% of the eligible iiput tåx
c¡edit on inputs, capital goods and input services in that rnonth ând the
rest shall lapse:
Provideci that if Option 2 is exercised, it shall not be withdrawn during the
remaùrùrg part of ihe finùncial year.
Provided fu¡ther that the rest¡iction of fifÇ per cent shall not apply to the la\
paid on supplies made by one ¡egistereðgeÆg!_to anóther Ìegistered pe¡son
having the same PAN.
.
\
¡+ 3.4 Tax Credit in lespect of Capitãl Go-dds
Q. 7. Explain the manner in which Input.Tax Credit on capital goods can be
detc:rmined,
Ans. Subject to the provisions of Sub-section (3) of Section 16, the input tax
credit ùl respect of capital
toods,
which att¡act the.provisions of Sub-sections (1)
and (2) of Section 17, being par!þ used for thc purposes of business ancl partl)'
for other purposes, or partly used fo¡ the pu¡poses of business and partly for
other purposes, or pa¡tly used fo¡ effecting taxable supplies including zero ratecl
supplies and partly for effeçting exempt supplies, shall be attïibuted to the
. includeìsale of land and, subiect to clause þ) of paragraph 5 of Schedule
II, sale of building.
..
A banl.<i1g company or a Financial instituLion including a non_banking
financial comparLy, engaged i¡ supplying services by way of aãceptìng deposits,
exLendi¡g Ìoâns or adva¡ces shall hìve tÁe tollowini twJ options'_
1. Comply with the provisio\s v/s 17(2), i.e.,-avail ol lTC att¡ibutable to
taxable supplies
Gncludjlre zero râLed supplies) and not on exel¡pt
supplies, or
include hansactions i¡ seclr¡ities
purposes of business or for effeeting tàxable supplies in the following ma¡¡er,
n¿rnely:
(ø) The amorrnt óf input tax in respect of capital goods used or intended to
be used'exclusively for non-business or used or intended to be used
exclusively for effectùrg exempt supplies shall be indicated in Fo¡ur
GSTR-2 a¡rd shall not t'e credited to his electronic credit ledger,
(b) The amount of input tax in respect of capital goods used o¡ intended tcr
be used exclusively for effecting supplies othei than exempted supplies
brit including ze¡o-rated supplies shall be indicated in Form GSTR-2
and shall be credited to the elect¡onic credit ledger.
(c) The amount of inpui tax in respect of capital goods not covered ur'ìder.
Clattses (¡) and (b), denoted as 'A', (1.e., capital gobds are not exclusil'cl!
used for: aforesaid pu{poses) shall be credited to the elect¡onic credit
lerlger ancl the useful lìfe of such goods shall be taken as five years flom
the clate of the invoice for such goods,
Ptovided that ITC shall not be available for the tax componerìt of cost of
capital goods on which depreciation has been claimed
Piovided fu¡ther that r¡,7here any capital goods ea¡lier covered under
CIøuse (a) (1.¿., exclusively used for specified purposes) is subsequently
not exclusively used for aforesaid purposes, the value of 'A'shall L.e
aúived at by reduci¡g the i¡put tax at the rate of fìve percentage poilrts
for every quarter or part thereof and the amount 'A' shall be credited to
the ECL;
Etplønøtíon, An item of capital goods declared under Cløuse (a) cj¡ its
¡eceipt shall not attract the provisions of Sub-section(4) of Section 18,'if
it is subsequently covered under this clause.

36. 66 !r,'.9¡lrv-Á.iF.ûÈEüü6fury.i.-sjnlg.sr;.l.r:il:rtL,,r:',,¡:,'¡,.
: .,,:: 1,.,.,
.,.., .. , ..
(d) The atgregate of the amourits of
,A,
credited to the electromc credit
ledger under ctøase (¿), tå be denotea *
,r",,
"i"iiuËiï"
.-oi¡ o., .ruait
in respect of capital goods for a Lax period.
Provided that where anv.apital goáds earlier coverecl unde¡ CIouse (b)
is subseqqentty
"o.,"r"d,r.,åu.
ci"""i t"l,- rn
"^tiå"i
äTLl.,""o
",
o,
reducing the input rax ar the ¡are of fi"";;r.";;;;
"àr"rr
*,
"*,.,quaÌter or paÌt thereof shajl be ad|'led to t¡"
""_--.i-
.:-,.^ .
* ' "-'l
k) ih" .*"",ü;; ;il;ä;:i;',;"ffi:åtfåii"Jåï".i:;-_."
capitat goods during their useful life, be denoreàis ,ÍJäã
"ut"utut"a
es_
Tm = Tcl60 (S years)
(/) The arnount of tax cÌedit ât the beþlrù.,g,of . iu* p.¡iocl, on âlI common
capital goods whose useful life-¡emañ.u d"ri";--,il;';;
';efiod,
Lre
denoted as
,T¡'a¡rd
shall be the aggregate of
,Tri,
fo¡ all srich capital
goods;
(g) The amount of common credit atkibutable towards exempted supplies,
be denoted as,Te'and calculated as_
- -"
! !!¿¡¡l'rlq
rq=(E/F)*rr
...wherc
f'E'
is the assreßate varue
:l:ìeTp.t
suppric5, ,nade. duri¡s ine rê pcroo. and
l'F' is the total rurnover of
)¡^t¡i.r^,r !L-! -.,L - -
the leFste-red
Person during thJtax perjod
the said tax period or
,
"'^îffg
j::1"î::lî:1".i:r:$.9.'.r¡;i¡ìå,9.
{irüï."Ëä,,i.1,"å* o",,",
:l: ;T: :ii-ïl::| :: th.: t'p.r::l4rñ., i*"tþ,íÞ¡ài."",i.ur" ïn"îi".'
""äiiT
\iri r oe carcutatect trv takinq ùah¡es o,f
iE,
and,F, of the last six pe¡iod fo¡ wfuchrhe details or suctr turn-:vËàe åvaitable,
or.vì"", i. ,i..'^äü åuring whtch
the said value of,E/!, i$ïo be c¡cul,t"¿,
ua ðuc¡¡ Llrrrr<r.yertaïe,âva able, pre\ijous to the mönth during which
the_said value of,E7!, i$ïo be calculated
-
¿Eigregare value of exempt supplies ana ,f," ør¿
"i¡i
.""ì"ã?,n"ä."., .f
".y
r-r uty ta). or tax levied ur.det Entry
_e4
of List 1 of tf_," S.""r,tii'èJL"aule to thecon:j-i uti:njld EnW s11nd ia of Li", í¡ ,r ,¡. *iJ".;ili;.
' *'
,::::::.i:: For rhe purposes of this clause, ir is hereby cia.rified thar rhe
t,
,
, ,l .
...,,,:
. . ,.. .
cHaprcB
g:
tNcoMÉ TAi cREDtT. r 6Z
CCST ¡",, ZO1T is eniiiled ro ffC of inlultlxñipect of goods held in
I stock (inputs as such ancl inputs contained i¡ semi-finished o¡ finished
r goods) on the dây, ir!ììlediately p¡eceding the date of registration.
(lii) A person switching over to normal scheme'from composition scheme
under Section 10 is entitled to ITC in respect of goods held in stock
(inputs as such ar-rd inputs contained irì semi-fi¡ished or finished goods)
and capital goods on the day immediately precedirÌß the date f¡om which
he becornes liable to pay ta âs norm¡l tJxpayer.
I (i?) l 4:!ere an exempt supply of goods or se¡vices o¡ both become taxable, the
. persotl making such supplies shall be entitled to take ITC in respect of
. goods held in stock (inputs as such and inputs contained i¡ semi-fi¡rished
o¡ finished goods) relatable to exempt supplies. He shall also be entitled
r to take credìt on capilal goods used exclusively for such exernpt supply,
r subject to reductiorìs for the earliet usage as prescribed in the rules.
(¿,) ITC, in âll the.above cases, is to be availed within l yea¡ f¡om the date of
issue of invoice by the supplier.
(zi) In case of change of constitution of a registeled petson on account of sale,
merger, demerger etc. the unulilised ITC shall be allowed to be
transfer¡ed to the transferee.
(aii) A person switching over from composition scheme Lo normal scheme o¡
whe¡e a taxable supply become exempt, the ITC availed i¡ respect of
goods held in stock (inputs as such and irputs coniained in semi-finished
o¡ finished ggods) as well as capital goods will have to be paid.
(alli) In case of supply of capital goods or pla¡t and machinery, on which ITC
is taken, an amount equivalent to ITC availed minus f}.e ¡eduction as
prescribed in rules (5% for every quarter or part theregÐ shall have to be
paid. In case the tâx on transaction value of the supply is mo¡e, the sarne
would have to be paid.
rç
3.6 Transfer of Input Credit (Input Service Distribution)
Q. 9. Define input service diskibutor and recipient of credit.
Ans. Input Service Distributoi (ISD) is defined üy's 2(61) as an office of rhe
supplier of goods or services or both, which leceives tax invoices issued under
SecÉion 31 towaÌds receipt of input services a¡d issues a prescribed document
for the purposes of distributing the credit of CGST, SGST, IGST or UTGST paid
on the said services to a supplier of taxable goods a¡d/or services havi¡g the
sâûle PAN as that of the office refe¡red to above.
Once a peÌson gets registered as ISD in the GST regime, he would be eligible to
transfe¡ or distribute c¡edit as per the provisioÌls of Section 17.
Recipient of cterlit mealìs the supplier of goods or services or both having the
same PAN as ihat of the lSD.
Q, 10, Describe the Duties of ISD.
Aras- As pet this proaision, an Input Setuice Distributot (ISD) zuould be able to:
. Dist¡ibuie credit of CGST/SGST and IGST to the supplier io rihom such
sewices rnay ìre attributed.
(r') 1
3: 11o'ry.'r.e -"$c
*¡i1,.3-'" g;;ïå;"åä*, sh4u, during
every tax period of the useful life of iÀe concernert ."-;r"l'l'^^"-
"^add_ed to the output tax tiabitity of th;;;;;il:ää#fä*:;
credit.
2. the arìrou¡rt
,Te'
shall be computed separately for CenL¡âl tax, State
Tax, Union tax ¿ìnd Integrated Tax.
¡+ 3,5 Availabiiity of TãÌI?-e-tlifin Special Ci¡cumstances
?.
8.
f*pl:ii ll"
avaitabiliry of Tax credit in special circumsrancls.
Ans. Auøìlqbility of Tøx credit itr special circttmslances.,
(i) A person who has applied for registration rn itfri., gO
day5 of becorìdng
ti¿ble fo¡ regisrrafion is enrirled rã lrc or ¡,;;r;; t" ö;.t ol
Soodshgld. in- stock (inputs as such and i'.p,rt" .oi.ttuitruJ Iì
""ä-ìt*"n"'
..
finished goods) on the day immediatàty p"""Jiriã ìnî ã.i" ir.r" ,"r"n
he becomes liable to pay úx.
(/¡) A person who has taken voluntary tegishation under Section 2:t(g) of tlìe
every tax period of the useful Iife
- -
ã.{À-¡ +^ rL^ ^--,_,_. ,
ot_the concerned capital gooCs, be
l
I
l
i

37. 68. a 5¡1¡y4 ¡6¡1¡¡ UNIVEFSTTY SEHTES
. In case of inter-state transfe¡ of i¡pui credit whe¡e ISD and recipient are
Iocated i¡ different States:
(ø) under the CGST law, col¡ponents of CGST a¡d IGST caÌr be ttans-
feqed as IGST.
(b) under the SGST law, cornponcnts of SGST arrd ICST can be trans-
fcrred ¿s IGST.
Notei It is impo¡lant to noie that ITC of CGST cannor ìre utiliz€d fo¡ paymenr of SCST. However,
for i¡ter-state trãEfer of inpui crcclits, there coulci be no other mechanism becaus€ SGST of on€ Srate
cannol be l¡arsferred ãJlcl use.ì in the or].ìe¡ Srate. Furrhcr, if it js presumed rlìar ihe disuiburion by
lSD to iis own supplier unit consLiLutes a iaxâble suppty, the app¡opriate rax woutd have beerì tcST
orìlt agåinst which the disi¡ìbutor would lìave been in a postion ro c¡âim inpüt c¡edit of CGST/
SGST/'IGST. In other words, tTC of CCST, SCST ãs lvell as that of IGST can be distribured as rTC of
ICST,
tla¡sferled as CGST.
(b) under the SGST 1a\', components of SGST and IGST can be
tlansferred as SGST.
Note: Distribution of credir through ISD would be lequired within rhe same Srare when rhe
taxabte person is havi¡g ñore tha¡ one tax ¡egist¡atrons within rìe Srare which is possible only iJ rtrc
taxpayer has opted for separare regist¡arions for sepffate busjness ve¡ricâts unctei the p¡ovisions of
Section 19(2) of the MGL. In orher worde ITC of CGST and IGST can be disíibured as ITC of CGST
while ITC of SST ã¡d jCST
ca¡ 6e dìstribured as IfC of SC5T.
Q. 11. n'rite down th" ¿
AJns. The.coflditio s afld ffiaflflel of distibtÉion of credit by ISD a.r,e sø,nc øs
.tre therc in the presebt Seraice tax regifiet afld the sqme øïe sltmmøtized qs
follozus:
1. The c¡edit would be dishibuted through tax invoice ol.othe¡ document
as prescribecl.
2. The amount of c¡edit diskibuted shall not exceed the amount of crêclit
available for distribution.
3. If the credit is att¡ibutable to one supplieÌ, it shall be dishibuted only to
that supplie¡.
4. The c¡edit of tax paid on illput services akribLrtable [o ¡ìlore than one or
all recipients of credit shall be distributed orùy amongst such recipients
to whomgiven input se¡vice is att¡ibutable. The man¡ãr of allocar.ing the
amount shall be as follows:
(a) the Uiskibution shall be on plo-rntn, on the basjs of turnove¡ in a
state on unioh te¡ritory of such recipient, to thê aggregate of turn_
over of all such recipients to whom such input se¡vice is
attributable.
(b) for the purpose of computing distribution ¡atio, the tumover of
resPective suppliers for preceding year is to be taken. ln case ar,ly of
the supp_liers_ was
-not
operatíonal in the preceding year, the
tumover of immediately preceding quarte¡ ftom the month of
distribution is to be takerÌ as basis. (as per,expla¡atiol to Section
I¡ case of i¡tra-state transfer of input credit where ISD and tecipient
þusiness verticals having obtained seþaÌate registuations ir the sarne State):
(a) under the CGST 1âi^', components of CGST and IGST can Lre
20 of the CGST Act,'relevant period'has been defined in this
manner).
(¿) Once the credit is distributed by a¡L ISp in the prescribed malÌ1el b)'
way of a prescribed document, the recipients to whom sucl-t cteclit is
dishibuted
8et
c¡edit in their Electronic Cledit Ledger and can Lrsc it
fo¡ payment of their ouq)ut taxes.
(¿l) AÌL ISD is required to file its Return i]1 Form GSTR 6 by 13th of thc
month succéecling the
-mã-rìfi-'ñ-which the credit has beetr
distributecl. When ISD files his rerurri; the amount of credit gets
c¡edited in Elect¡onic Credit Ledger of th: ¡eciPient.
Q. 12. Flow credit distributed in excess by InPut Sereice Distributor (ISD) is
recovefed?
Ans;. Møntet of recoaeql oî credit distributed í) ercess (ISD):
. The¡e could be a situation of diòhibution/use of excess credit irr
comparison to what is available o¡ allbwed u¡rder the law to tlle
recipient. To take care of tl-tis situatiorL Section 18 of the MGL contains
p¡ovisions for recove¡y of excess credit distributed by the lSD.
. It provides that in case the creclit dishibuted by an ISD is môre thân tlìe
credit availâble to ldm, the excess ctedit may be recovered from ISD Lrv
initiating âction under the provisions of Section 51 of the MGL.
. Section 18(2)- of the MGL
Provides
that in case the credit distributecl b1'
ISID is in contrâvention of Section 17 (which could be dist¡ibutio¡, of
more thaì1 available credit or dist¡ibutiòn of credit in ircorrect ¡âtio or-
clistribution of credit to a suPPlier not entitled to it or it could relate tc)
the type of tax distdbuted), the excess credit may be recovered froln the
re¡:ipient by initiating action under the
Provisions
of Sectio¡ 51 of the
MCL.
Þ 3.7 Payment of Taxes
Q, 13, What a-te the payments to be made undeÌ GST?
Ans. Undel GST the tâx to be paid is ñâinly divided into-
. IGST-To be paid rvhen inter-state suPPly-is made (paid to the Centre).
. cGST-To be paid when making supply within the state (Paid to tlÌe
Ceììtre),
. SGST-To be paid when making supply within the. state (Paid to State).
ri$ûff-_Sri'ñ:
,iÁx:qirE.Dri ! 6e
Goods solcl fro¡n Delhi to Bombav
Goods sold within Bombav
Apøtt flofi
the Ltbooe pøUríeflts ø der,ler í6 lèquiteil to møke these payments:
. Tax Deducted at Source.(TDS), TDS is a mechanism by v/hich tax is
d.."9"!:d9ttu9T1."-{..b-9.Íî:i#lj$¡îH..:.11.'.,9.Ihesupprier
'.1 rxeuä1fe; A gove¡r¡i¡elf agg.ncy.
Cry._ee,.e.Ig,1,$:layirlg
êóntrãct to à
r.'
puif àþr, The
!ont¡ai!.v.á!ùé;
iÈ' T10 lakh.::r.:tlill:!.:,:a :;,',,:'

38. 70 o sÈ¡v¡
-oe!!lfjij,tùJ!G-_-Ë{Lil.Èenes
When the govérnn:i*.iC":?^T:
k." q.yment to the bLritdc¡ TDS @.
-t%
(which a;òunrs t."nrj,oooi *;i-,u"';.#,"ä..il1";;;
amount will bé
Þaicr.
. Tax Collectej ai óåurce,fiCs). TCS is mainly for e._comme¡ce aggrega_
tors. tr mea¡s
lhaj
any deltl se[i,_,g ú"o";i,;;o;;eice
v¡ill receive
payment after deduction of
-ICS
@ 2í/^
This p¡ovision is cuEently rela>.ed ancl wiLI not be applicable J;ill notifiecl
by the government.
. Reverse Charge. The liability of-payrnent of tax shifts fto1n the supplier
:í""ï:*":lo
services ,o tr.,u' .".n1*.'"i.äi. i"i,u,.,
"ou",r,"o
Q. 14._
-How
payrnent to-be ¡nade is calculated unde¡ GST?
Ans. Usua y, the InÞut Tax^_crectli shoulJ t ; ;;;";;;* ourwarct TaxLiability ro c¿lculate the Lotal cST paymenr to U" _Jul-
" """
TDS/TCS will be reduced f.orrl áe- totul CSf^ì" .".1"" at the net pavablefigure. Inte¡esr and tate fees (if any).wi'b"
"dã;;;;;;;;*
f*al amount.
Also, ITC ca¡rnot be claimed on interest and f"t" f""". È.À'ììærest ancl latefces are required to be paid in cash.
Thc zoay lhe calcrlation is fo be ¡ìone is díflerent
for dilferetrt tttpes of de{tlet.s:. Rcsrrlar Deale¡. A regutar
-dealer
is.ti"br; i; ;;í ä;i
.å
rtre outwa.ct
suppties made,.andi.câ:n
. also_. clâim
_. f.,pr.,t fui C*àii'1rfC¡ or., *,"purchases made by him.
The CST payable by u .:g..,g deale¡ is rhe diffe¡ence berween the
outward tax liability and th¿ ITC. .-..-
-"'*
. Composition Dealer. The GST pa),meltt for a compos.itton clealer is
cor¡pa¡atively simpter. A a"or"r' *rr"
_1l""
-
fîà" iå,
"o^po"irio',
, scheme has to pay a fixed percentage of CSf å"-ì¡e i.tqt ouh.vard
supplies made.
Q. 15. Who shall be liable to make the payment under cST laws?o"'-.r!"::
1::*2
a1e r.eluíred t. *ok"¿éi-;;';,;;;,:
""' '"
.
A.Kegiste¡ed dealer is required to mut. ðSf payment if GST iiability
.
[egisterea
dealer required to pay tax uncle¡ Reverse Ch¿rge Mech¡nism
(RcM).
.
Ë-cornmerce operator is ïequired to coilect ancl pay TCS.. Dealers specified bv ttre-e
o.16.wh;rïiil;;""í,#ffffiå'rirnËå"å.deductrDS.
m-Ans.
cST payment is to be r¡ade i,f*" csfn it"ìr"a, i.e., by 20th of the next
Q. I7. What are eleckonic ledgers?
Ans. These ledgers are maintai;ed electrorrically on the GST po¡tal.
Cash Ledger
This Ledger !vilt
reflect all deposiis
Þad€ ìn Cash, and
TDs or (àndi rcs
made or1 âc.ounr of
the Tâxpaye¡. This
ledge¡can be used fo¡
maklng ally paymeni
onaccountofcST
Q, 18. What are the different I
A^s. Gsr pcryn,n
";;;;;;"^/;
å:,lli,l,.tt
o""''""r can be mâde?
. Pâyment through Credif Ledger. Tire c¡edit of ITC can be used by
deale¡s for GST payrnenr..Tire ã¡e<tit ca¡ b","k""-;i;ä; payment of
Tar. tDieresr, perìatrv.rnc{.tare
fees cainot u" fliã'ly
"írii"g
rrc. pay."ent
rhroush õash r"ds",. cst ;;;;ã.i*.]i i"'ï'"o"
"¡r"" ",
offli¡e. The challan has to be glneratect j"
6ä.;if* ;åt¡, o.,lin" u.,¿
offlinc CST paymenr.
r
!h¡1e ]ax
Ìiability is more rharì T10,000, it is ma¡datory to pav taxes Online.
Q. 19..
_What
is the penalty for norì_p¡yment or delayed pJyment of GST?
Ans..lf CST iq short
lraicl, urrpaid o¡ paid late, i¡tc¡est.at, a rate ot 1g% is
required to be paid by the clea.ler.
,
Al"o, u.punurry is to be paid. The-penal4,is higher of {r0,000 or 1u"6 0f the r¿\
short paid or unpaid, whichever is higher.
Procedure to pay tax in cash
Step 1: Calculate tax payable in cash.
Step 2: CerÌerate CplN number rn F9_lM cST pMT_4
on common portal byerte¡ing the details of amounr of rax (CGST, fCSr c- èCSîi,"åìi*s, fees, andpenalty etc. payable:
(d) Gene¡ated challan shall h
identification Numberì
Lave 14 diFt CPIN number (Co¡nmon portâl
(b) This cllallan shall be v'al¡¿ for 15 days from the date of geneÌafion).
(c) Tâxpâver carr pârrialrv f'r in rhe ch.ú". ¡..mì"Jiåipr?lr'iìy ,,"u.,,u,,
,r,"
cha'an fo¡ compJetion at a tater stage. a-;;; ;;i,#i_ be
,,edired,,
be(o¡e fi¡alization
_
(d) Challan generated online may not be modified afte¡ submission.
step 3: Now make pavment with ieJe¡ence.to aiove*.À"lräitPinI
uy
tN",_bar.king/Card/ RTCS/NEFT) or dny other nrode as specified by rhe Govenrment.
Step 4: Afrer successful paymenr of Ta*, a crN 1críJia.,ìã"ïtiì'i'Juior, Nl,_rr".
. .efiÀFEFIfrNCOME
TAX CBEDr¡' I 71
'. ..
'-., .-.. -.:!|[.'*]:;]]j-:
Credit Ledger
ITC ãs seü-assÉssed
in monrhly returns
wilì be reflecred here.
The rredit in rhis
ìedger can be used to
n1âke pâymcnr of
TAX ONLY and no
other aNou¡ts sucìì
as rìrterest, pânelry or
Liabilify Ledger
Tle Tohl tax liabrlftr,
of â taçaye¡ (âfrer
ne tting) fo¡ rhe
pÃrticùlar month witt
be shown automa-
ticâlly displayed onâ
CST payer,s dash
j$::)ìtiilil
/
I
/
/
/
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í,1
l1
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fll
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få
l;il
tiil
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39. za E sHfva DELHT uñryÉnsnv s¡gtes ,
ha i¡g l7 digits-1.1 CPtN ¡rìd 3 dipir B.Lnk Code) sh¡Jl be gencr¿Led, \^.hich is
actu.rl ploof of Tax p.ìynìerìt.
ç 3.8 Refund of Taxes
Q.20. Wtat is GST rcfund?
. 1r.r.
U:rl!]y r,r'lrcn tlr,. CS t pard i. n,orL. Ltr-,rr rtrL, C5-f liabjliiV, .Ì siruarion ot
(1,ìrrnrllS L;5J rcfund ¡ri:e. L'r(1,.r (ì--f tl¡.
1,.¿ç*-. ol cJainLirrg ¿ ¡efu¡tl i.
standar<lized to avoid colúusion..l.he pL.ocess is orrline and t1.." firiii" nl""-ìl*
been set for the same.
Q. 21. What are the circuûstances under wlüch ¡efund of GST can be clairned?
An,s, A (laih of reltni nay realisc ott ncaorrnt oí:
li) F-\Fùrt {ilìLl'dints dee,,tcLJ e\pori) rI roocl.,5pr\iLc, Lrnrfer cldinr LrI
reh.te ot Rei rì n, J
(ir) ITC accunrulation dÙe to oLrtlìLlt tax Lreins oxempt or ril_ratecl.
(dl) Refund of tax paìd on purcirases maae bj, 6¡,6¡.ri"s or UN bodies.
(ru) Tax Refund for lntemational Tou¡ists.
(zJ Finali,,atìon of provisionaì ¿i-essmerrr.
(¿'i) Refuncl of pre-deposits.
(uiil Excess paynrenL clue to nlist rkc.
(aíil) Refund of CGST/SGST pâid. by rreating rhe supply as irìrer_stare supply
,. ,
yry.h
is subsequenrly_found rò bc i¡tci_sr.rre
"rpffy
un.f ,,i."_rr.,.u.
\¿.r., Ãeruno on account ot issuatlce of ¡efulcl vouchers fo¡ taxes paid oll
^ ^_oL"on.:t
agâinst whjch goocì< or serr ices hJve not bcen :uppliei.
Q. 22. How i,, GST refund calculÀted?
f,lt;Tlr^
t:.I".1.:impte casc ot e\cess t.ìx
t.;ynì(.ìrr màde.
rvr¡. o s \->r traÞrhty tor tlÌe m.,nlh of September is {50,000. But ciue to mistake,Mr. B made a GST piynrent of {5 t¡kh.
Now Mr. B has m¡cJe ¡n e\.êcs GS ì p,,) |llerìt or î4.5 lakLl rr,fuch c¡n bcclairned .ìs a refuncl bv hiìr,l
-fhe
tinre limit for ciajmins tlÌc ¡cfuncl
.rs
2 yeats frolì1 lhe ci.ìte of payment.
Q.23. Wtàt is the (irre liinit for claiming I.cfund?
Ans. The tirne linit fol claimirg ,.r r.eIun.lìs 2 rTccrs fi.om thc r.ejcv¿ìnt date
The ¡elevant date is different i,r'*,r"r;,
"a.".Here are the televant dates for sotle cases _
iliillliil
.Excess
p¿ymen L oiasr........-
Exp-rt or aìão,.a'"^poillãoa.
ã,
se¡vtces.
JudgeÌllenL/Dec¡ee/orde¡/dilection of
Courf or A ppellatc Authority_/Tribunal._
TTC accu nul,ìtes a< output is t¿\
exenpt or nil-rated.-
_
--Firralisâtion
of p¡oi,i"i"tr¡ u"""""t *r.t
Deenred export of eoóa..
-¡iott
or sã*.",
"
Also Jf ¡r:f,Lnd is paid with delay, ân intereAt @ 24% p.a. is payable by thc
8O\7eflllrelì:.
Q. 24. Hriv can â person ciaim GST iãfûitd*aìtd u¡hat is the time limit fo¡
claiming refund?
Ans. ThZ ¡efur.rcl application has to be macle in Fo¡m GST IìFD 01 within Z
¡ c.r|s lrorr tlÌe relevdnt date.
I l'c lt ¡rr- :hur¡ld also be certified by a Chartered Accountant.
'+
3.9 I'i)S
Celtain categories of registerecl persons shall be required to deduct taxes lvhilc
lnaking paltÌrents to the suppliers, Le., TDS and deposit it with the gol'enxnent.
Let's try to unclerEtand TDS telated procedures under the law.
Q. 25. What is the rate of TDS unde¡ cST and who ihatl collect it?
Ans. TDI! is to be deducted at the rate of 1 pef cent on payments macle Lo the
supplier of taxable goocls and/or services, where the total value of such suppi].,
urrde¡ an ûfclividual contract, exceeds î2,50,000.
There shâll be no tax deduction ü¡he¡e the location of supplier a4d place of
supply is diffe¡ent from the State of the registration of the ¡ecìpient.
As per GST løzo following
people/enti!:ies need to deduct TDS:
(l) A <lepartment oÌ establislwtent of the Cent¡al or State CoverÌrrrletÌt, o¡
lii) Lo¡al authorj ry, or
(l/¡) Go'",enunental agencies, or
(l¡) Pelsons ot category of persons as may be notified, by the Cent¡al o¡ ¿r
St¡ le Coverrunent,
l¿l An autlìoliiy or a bo¡¡d or any other bociy which has been sct up Lrr
Parliameni or a State Legislature or by a government, with 51% equitY
(co rl-rol) orvned bv government,
(¡rl) A !ociety established by the Central or alty State GovernmenL or a Local
Autholity ancl the society is registerecl under the,Societies Regist¡atiol
..
CI-IAFTEFTêIiNCOÀ¡E lAX CBEDTT E 73
Date of comrnunicÂhon of suclì
Date of Pavment
D.rte of disfatch t,y post/sh;p oi
¡i¡craft leavcs lncl ia/pâssing flÌe
Last date of financial yeâ¡ to tvhicÌì
q"
":Sgt!
¡Sl9¡tC9.
Date on which tax is ad
Releoatrt Date
Acli. 1860
(z,li) lu161ic sec(ali) Pul5lic sector u¡cìertakings.
Q. 26. What should be the value\¿. zb. wnar snoulct Þe u1e value ol supply on which l DS shall tre deducted?
Ans. Fo! tlìe ptLrpose of deduction of TDS, the value of supply is to be taken as
: amounil excluding the tax indicated in the invoice. This mea¡rs TDS shal1 ncrtihe amounll,excluding the tax indicated in the invoicr
l¡e deducted on the CGST, SGST or lcST componentl¡e deducted on the CGST, SGST or lcST component of invoice
Q. 27. Ttl whom is TDS paid and what is the time limit fo¡ D
deducted on the CGST, SGST or lcST
Q. 27. Tti whom is TDS paid and what
state the compliances. required under TDS?
Ans. TDB shall be p aid zoítltin 70 døus liom
t should be the value of supply on which TDS shall be deducted?
Ans. TDB shall be p aid zoítttin 70 døys flom the ónd of the monrh i{l whicll rê\
is deducted. The payrnent shall be made to the appropriãfe government l\¡hich
imit fo¡ paying TDS. Also

40. ii
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snl¡ p¡+ril!¡.ñ.ttiÈ-re.,trr.*ryæ
. The Central Government in case of the IGST and the CGSI.
. . The State govemment in.case of the SGST.
. Ful.ther, d1clctots neeìl to follout tlßse listed prccedural compliatrces:
,11ì ll:h
d:d":t:l
-needs
to get compulsorily registered unáer Spcrion 23.
1¡¡)
(Jbtaining
TAN issued under ùrcome tax aciis MANDATO¡|y.
(r/,) Ihey need to remit such TDS collected by tjne 1.1tr, day o] the ¡nonth
succeeding the month in whiclL TDS was coliected and repirtu
¡
ir., CSfn Z.
(lz') The amoult deposited as TDS will l¡e ¡eflected in th'e eier:t¡onic cash
ledger of the supplier.
(-.') They need to issue a ce¡tihcate of such TDS to the deductee within 5 ¿lays
of deducting TDS mentioning therein the contract value, rate;f
cleduction, amou-nt deducted, the amouni pâicl to tlìe appropriate
, ..
G,ovemment and such particulars as may be piescribed.
(z,l) Non-deduction/short deduction/non_páymei t o. rhort payrnent of TDS
is on offence unde¡ the Act fo¡ lthichi minimum p"r,.iÇ uf {10,000 is
. prescribed under the act.
Q, 28. How can the deductee claim benefit of TDS?
Ans. The deductee shall claim credit, in his elect¡onic cash leclgeq, of tlìe tax
tleclucted a¡.rd ¡eflected in the return of the deducto¡ fr.rrrrished ii th" ¡n,ì¡,.,".
prescribed. A¡y amoufit deducted as TDS ..and . reported i¡ CISTR_7 ,,vill
automatically get reflected in Electronic cash iedger.
'
Reftrncl of the excess ørnount ilgductèd:
, ' -
. L¡ case the amoiiìit iÈ.claimed by deductee in Elechonic cash Ìedger:
Refund to aeaùtiôi ris:nòì possitle in such case. Ho*".,"r;'d"arr.r""
"o.,clairn a ¡efu¡rd.Ëf tai
""U;"it
to Refund provisions of tf," Á"f;. practically
it is not possible to claim â¡y eûoneous deductíon of rfDS
bv the
deductor.
. ln case the amou¡t is noi so clainìed bv cleductee:
Refund of eûoneous exqess TDS.clecìucied is posiible to cledrtctor., subject
to refund provisions and procedure of the Act.
+ 3.10 Tax Collectecl at Source (TCS)
_ln
layAan'9 language, the onewho collects taxat source is krlor¡¡n asTax
collector. Under^GST, every elect¡o4ic commerce agglegator (ol
,ol)erator,)
has
been assigned the role of Tax Collector.
Alrthotization to colleôt tâx
As per sectron 5Z(l) of CGST Act, 2017 onlv electronic (
(not being an agent), shall collect a¡ amount of t¡x i¡ respect
: .t .... CHAPTEFì g:
tNcOME TAX CBEDTT . 75
th¡eshold limit to register. (like irT
-o'th?r-tâses
on T20 lakh). In other
wolds, every e-col¡¡lerce operatot as well as lhe suppliel rvho supplies
thtou¿lh e-commerce operator has to get itself compllsorily registerecl
under GST irrespective of its turno\ze¡.
Any petson required to collect tax at soutce/ shall electronically submit
a¡
_application,
c{uly signed or verified th¡ough elecblonic ve;ification
code, in FORM GST REG-07fo¡ the grant ofìegistration through the
colnmon pottâI, eithe¡ di¡ectly ot through a Facilitation Cenhe nobified
by the Commissio^er
fRltle 72(1) of CGST Rutes, 20Uì.
ll, Credit Lo be claimed. The tax wlich is collected by e_commerce ope¡ator
shall l¡e c¡edited to the supplier rvho supplies goád" o, servi"es o, both
through the operator ir.r hiiìlectronlc caåh ledgir arìd can be claimed by
the suppliel of u'hich is reflected in the stateùrent of the operator.
Q.30. Explain the Stateûìents to be fu¡nished by e_commerce ooerator.
Alas, EolloToitlg hþo støtetúe .ts t7,.e to bc
rmùshed by ttre e_commctce operøtor:
1. Monthly Staternent. Evet )' operator who colllcts tax, shaÌl furnish a
statement, elecrronìcally, containitìg the cletâils of outward supplies of goods or
scrr ices or boilr effected tlu.ough it irrclrrriin¡¡ tlle slrLìrlies of gåå.ls or serrri.es o,
botÌì r'etLìrnecl tlìrouglÌ it, ârìr1 tÌre ¿rmount collected within 10 days after the end
of such morrih.
Rule 67: lorn anil nøi¡et o.f subnissioit of statencrú of supplies throtgh alt
c- c o1fllÌtefce op cf øtor:
(i) Ever.y elech.onic coutlneÌ.ce ope¡aLor requilcd to collect tax at sou¡ce
ry's 52 shall futnish a statenent in FORM GSTR_8 electiorìicallv o1l the
common portal, either directly o¡ f¡om a FaciliLation Cent¡e noiified bv
Lhe Commissione¡, contâ riÌrg details of supplies effected through suci
ope¡ator and the an1outtt of tax collected as ¡eouired.
(ii) The cletails furnished bv the operator above, shall be made available
electronically to each of the suppliers in Fa¡t C of FORM GSTR_2A on
the comnon portal aJter tlÌe due ¡lare of filing of FORM GSTR_g.
2. Amìual Statement. Evel.y operàtor who collects tax, shall fu¡nish an annuaÌ
statement, electr.ollically, containing th€ detaiis of outward supplies of goods or
se¡vices or both€ffected througlÌ it, including the supplies of gåóds or services or
both retum€d tfuough it, and the ar-nount iollectJ duringf ri-re financial year,
before 37st December followùrg the end of such financial yeir.
Rt¿le 80(2) Afltl al rchùtr, Every electronic
"o--"r"Ë
ope¡ato¡ ¡equi¡ed to
collect tax at sôutce under Sectio¡ 52 sl-rall furnish an¡ual statemenf ln FOIIM
GST'T{-98.
Q.31. Ho ,
are the details of supplier matched with the details fwnished by
the e-comnte¡ce opelator?
Ans. Mechattisnt of ncúching of detoils.
(i) The_-detaits
_of
suppliers fu¡nished by e-conunerce operator (Form
GSTR-8) shall be matclìect witlì rhe concåmed supptier (còTR_1).
(/i) If tÌre detàils do not match, the saÌne shall be co ¡nunicated to both of
them (Supplier in Form GST MIS-3 & e-commerce in Folm GST MIS_4).
liLl.^t^ï-l:l_:3(1) î1.çtT
Act, 2017 only etecrronic commerice operaror
\¡rv! uclrá arr éËclrr, brtau corecr an amount ot t¿Ìx r¡ respect of tsxqble supplies
,'l goods o¡ services or both-midê-Ihforrgh it or throLrgh åther su ppliers.
Q. 29. Explain the statutorv provisions of TCS nnãp" r:cr
Ë,urjlrs
(r¡ servrces or Þoüt made thloügh it oÌ thlough othe¡ suppliers.
Q. 29. Explain the statutory provisions of TCS unãer CST.
Ãtts. Followitts øre the stahttônt t1rÕ7ri<iõt'c
^Í
-r.<
t!q)-- /^cr,s, tsolloutitg øre the støtltory prcoisiofls of TCS un¡ler GST:
1. Rate of Tax to be collected, The rate of tax to be coll()cLed bv ân
corlutìe¡ce opelator shall not exceed one per cent, as may be notificd by
the Goverrìrnent on the recommendatiolmìf the Council,'of the net value
ol taxable supplies.
2. Registration. As pql Secrion 24(x) of CGST Act, 2012, there is no

41. 76 T SHÍVA DELHI.UNMÊRSfIY SEB|ES
(iii) lf the disc¡eparÌcy is not ¡ectified by tlìe supplier i¡ his vaÌid ¡Þturn o¡ tlÌe
operato¡ in his statement fo¡ the tnoùth in which cliscrepancy is
communicated, it shall be adcled to the out?ut tâx liability of the said
supplier, where the value of out¡,u'ard supplies furnished b1i the operator
is mo¡e than tlìe value of outwa¡cl supplies furnished by the supplier.
(lo) Such.supptier shalÌ pay the tax payuúle in respect of s.ich suppty along
with jnterest
as specified uncler Section 50(1).
Section 50(1): Intelest on delayed payment of tax, Intetest shall be at such
¡ate, not exceecling 1870, as ûlay be rrotified by the Government on tìre ¡ecolì-rlìr_
enclations of the Council.
_
Serving of Notice to the opetator. Anv auihotitv not below the rank of
Deputy Comrnissionet may serve a notice, requiring ihe opetator to fu¡nish such
cletails relatint tol
.
supplies of goods or services or both effecled through such operaLor
during any period; or
. stock of goods held by the suppliers making supplies through such
operato¡ i¡ the godowns or warehouses, by whatever name callecl,
managed by such opetator and declared as âdditional places of business
by such suppiiers, as may be specified in the notice.
.
* 3.11 Job Work
Q. 32. WÍat is Job Work?
Ans, Job Work:
. Activities undertaken by .,small/medium inclustries on inputs/semi_
fi¡ished inputs as per the di¡ections of tile principal manufãctu¡e¡ a¡e
known as job works.
. The person who u¡dertakes the job wo¡k is commonly known asjob
worker, generally in small sectol.
Q.33. Define the term Principal.
,Ans.
F€r the purpose of job work, the,principal, means:a reg.istered person
who sends
1rll
inputs or capital goods, without
þayment of tax, Ïo a job worker
for job-work a¡rd f¡om thete subsequently senàs'to a¡othe¡ job worket and
Iikewise o¡ return io principai.
,
r:n-(,": o[ common job works are s]itting, màchinjng, weldi¡g, painting,
electroplating, assembly, powder coating etc. Jðb works arJalso widãly'resorteã
to
I
t^eltiles,-.ag¡i_p¡ocessing, printing, gems anct jewellery sectors, etc. l
Q. 34. Define the term taxable person.
Ans. Taxøble persofl rnes.ns a. petsofu ztlho is rcgistered or liøble to be rcgisteretî:
. An establishmërÌt or person who has oltained or is required tó obtail
registration in a State arld a¡y of his othe¡ establishmentsl a:rother SLate
shall be heated as distinct persons for the purposes of GST law.
. Therefore, t¡a¡sactions, such as stock tranifer, transfer of capital goods
etc., between tr\.o p¡ocessing ur-Lits o¡ acìnÌinishation offices åf th"".u^.
job worker, shall be t¡eatecl as supply. Since such t¡ansâction is macle
between two distiDcl+el,to.4E, theráfòie, s,.,ch s.,pply q,ould
be subject to
lev-v of cST.
;rrllüiÌiL¡;lil*i fi:iíË;,:t$$ffi*rufgå,iÌä:¡ii
,,::;t,,r;.,,ilil.....':iì::l;tltì. },i:itffi&Iw,, : z,
Q. 35. Is a iob worker eligible to obtain the benefits of Composition
Scheme?
.A¡rs. Benefits of composition scheme ale not available to certain catego¡ìcs of
persons, sr.rch as one-
.
wlao is engaged in the supply of services, or
. who rnakes any supply of goods which a¡e not leviable to tax u¡de¡ the
CST, or
" wlho makés alry inte¡-State ou-t¡ùäã-sùþües of gòods.
Accordingly, if the p(ocess undertâken by the joþ worker.a(nounts to
manufactrue/deemed manufactu¡e of goods (except as may bè restricted by the
Governrnerrlt), then such job worker is eligible.to opt fol composition scheme. In
case any lÞrocess does not amount to manufacture/deemed marìufacture, oÌ
services or y, then such job worker is not eligible for composition scheme. Thus
a job worl(er is eligible to opt for composition scheñe if he statisfies the eligibiliry
crite¡ia lair[ down ry's 10 of CGST Act.
Q. 36. !hat is the th¡eshold limit fo!. regiskâtion in case of fob Work?
Ans. A:l
iob work is a service, the job worker would be requked to obtain
registration if his ággtetate tu¡nove¡ exceeds t]le prescribed tlreshold.
The su¡iply of goodç after completion of job-worþ by a registered job worker
shall be beated as the supply of goods by the principal and the value of such
goods shall not be ihcluded in the aggtegate turrrovet of tìe registered job
worker.
Q. 37. Éirlist the criteriâ to dete¡qri¡re the place of supply irr case of Job lVork.
Alrs, Clìterìø to ¡letennìtte the place of supplg ìi cøse of fob Wotk
1. ln the case of job worþ the supply of goods, after completion of job-
w¡Drk, by a registered
iob
worker shall be heated as the supply of goods
b¡ the principal.
2. GÞods sent by a taxable person þrincipaf)
to a job worker afld liable to
GllT wìll be heated as a supply as supply includes all forms of supply
such as sale, ha¡sfer, etc.
3- Hlswever, the registered taxable person (the principal), under intirnation
afld fulJilment of specified conditio¡rs sehds any inputs and/or capital
g(lods, without pay.ment of tax, to a job #orker for job work.
4. Ftom the¡e, those can be subsequently sent to anôthet job worker(s).
5. Èlncipal can either-bring back such inþuts/capitâl gooals after cornple-
tit)r of job work or otherwise, urìthìfl 7 yeat/3 yeqrs of tFLeir being sent
orit or
6. Saippiy such inputs/capital goods after completion of iob work or
otherwise zpiúl¡i¡ 1 year/3 yeaß of thei¡ being sent out.
7- F¡om the plaie of business of a job wo¡kq on payment of tax witlìi¡
India or with or without payment of tax fo-r export.
Q. 38. Desclibe the procedu¡e/provisions followed rnder job work.
^ns,
Iob Tootk Procedu¡es:
1. A p¡incipal (regìste¡ed pe¡son) may u¡der intimation and sub.iect to

42. ¡,l
lirrl
Irìl
Íirj
li
i,r
+.:
il1
[l
ili
tf:
fr
Ìl
ü
il
fl
rl
i:l
r
1
I
I
I
.t.:;'snrv¡:ÉeffiUliffir.-Û,i t,,:l .:lilg:,irt,,.i
'',:.-,.:r--.:
..ìt.t'.:.ì ,t-r
i:,. :i
prescribed conditioru, send any inputs or capital goods to a iob worke¡
fo¡ iob-wo¡k and frcjm there slbsËquentty, J""J i" ..árrr*.. Ëi **t*
rrithout paj¡lnent of tax.
2. After completion of job wotk or otherwise, principal shall_
O bring back inputs oÌ capiral goods
1.,rrå, ,n""äàJà"lnd
dies. jigs
ard,fixtures, or tools), within one year and tfuee yea¡s,lleìpec¡vely,
of theù being sent out, ro ur,y óf H" pfu"" of'Urr.i.,årri *itno,_rt
pa'.rnent of tax, or
(ii) supply
:uc;l
inputs or câpjtal goods (orher than moul,ls and dies,
jigs and fixtu¡es, or tools), iritlrt ,
'onu
yu* u-rJ^tirå yuu"",
respectively, of thei¡ being sent out f¡om thå pt."" of b,rlii,u"" of ujob worker on payment ãf tax within l"aiul o. *itliìî*itn"1,t
"
,.. .PuyT""l :f
tax fo¡ export, as the case may be.
J. lr ts rmportant to note that there is no time limii for b¡ingi¡g back mou lds
and dies,
iigs and fixtures, or tools.
4. The goods shall not be Dermitted to be supplied from the place of
busi¡ess of a job worker u¡rtess the pr*.;;; ;;.i;;J inå 1,"* ,
business of the job-worker as his additi"".f på.. Jì""r"""'i*1"p, ,. ,
_ "11.
,ylif rhe job worker is registered.
.
:
.
5. ITC shall be allowed to the n_in.-ci.¡iái ¡o¡i::i¡Þuts senr to job rvorke¡ even
,
though they sell them direcrly from job woiks prerrrisus.'
o. rn€ pnncrpal shêII be responsible.'foii.kèeping proper âcco.unts for [lìe
_
nputs or capitâIlÈp-sds ü1.4tead ¡¡ job worker.
"
..
.
" ll.::",y,T: ln"
inputs or capitál goods (orher tha¡ moutds ancl dies,
lrgs and lrxtures, or tools) sent fot job wo¡k a¡e not rieceived back by the
principal aJter complerion of iob wo,rk o. otll"r*i"",. àl *ãì,ãi,ìp¡u*a
from the place of business of th.
¡ou .".t", *it-Àl ä i.-"ii;ã'o.t
"""
o,
three yea-r(s) respecrively of their úeing *"t
".,t
tt ,r,ulii.li"-". ,¡u,
s¡l i.1>u o or.capital goods had beeñ supptiej uy ,À" o.lr,.lo"i . ,n"
Joo-worKer on the dây when the sajd inputs or.npitul gãods were scrrt
out.
8. Any waste and scrap generated drûing the job worl may be suppìied by
:1,:I:Jîl:1
directly from his place-of u""i"*" o"
f1y..L,,rr or r¿x, ir
sucn
Job worker is registered, or by the principal, if th; joi worker is nôt
regìstered.
9, It is important -to.,note that for. the p.r.rq>oses of job worll, the i¡put
:11ï^r..._ ll*.l"Oiare-€oods
a+ising from uny o"urrn"ì.,, or p¡ocess
^ - _.31t"d
out on the inputs by the pri¡cipal or the ¡ob worler.
Q. 39. What kind of involce is required to Lu i""rr"a'ir,
"u""
ìi-¡pu Wortz
Arts. For the pur¡roses of transp.ortltio., of gooa" f_lo; *ã.i,1_r,, Consignor
may issue a delivery chaìlan, sertilly ,,u*b"ruã, irrrt*ã
'oÌ
*Lì.ì"" u, ,i," u,',"
oï removal of goods for Eansportation.
The d.eliuery challan shøll be orepareil ìr, t.ìplicate, ir the cnse of supply of
goods, in the
follozoing mønner:
(i) the originaÌ copy being marked as,original for.Consignee,,
_cHAFrEn
g:
tNc{lt/E TAX CFEDIT . 79
,(ii)
the duplicate copy beirg marked u=,arpfi.ut-fJ. fra¡sporte¡,; a¡d
(ii¡) lhe triplicate copy being ma¡led as,t¡pli.ut. fo, C"*iå-^,,
Q,40._When do Job Work provisions O""o-. uppti.uUì"i '
Arts. (l) The provisions retating to.job wort àre applicable only when a
rcgrsteted taxable petson int-ends to send taxable goods. In othet wo¡ds,
these p:ovisions are not applicable to e\empted oi rrorr_t^u¡t" good" o,
,...
when the sender is a pe¡son other tl.ran a re-giètered taxable person.
(ii) It is not conpulsory rhat job work provision"s
"f,o,la
iJToito*"a Uy ttu
principal, The principal
"u. "und
the inputs or capital goods after
payment of GST without following the specìul procedr.rie. ln such a case,
the job-worker would take
-the
iiput t;x creäir urrJipfry uu"t tf,"
^
_,
p_.o1":::d goods (after compÌerion of job_work) on paymeiri of GST.
Q.41. Is cST payable on job work?
,..jl:.Lî_t^T^:: :"nt.ìce
charges of
iob zþorker. CST wilt be paydbte oñ the job
Yl¡K.cnarges,rncludirig
on, a¡y matcrial used by the job worke¡ at hjs own level.
rrinclpal wltl bc entifled to take tax_c¡edit of the same subiect to usual
conditions.
Tttusitional prooisíon, ln case any i¡puts o¡ serni_finished goods had been
¡ernoved before the appointed date from tire factory of the manuÄcture¡ u¡rd serrt
to a job /orker for carrl.ing futther ptocessing, iesting, repait or ior a simlta¡
purpose, and the same is ¡eceived on ot aJter ttie appo;itea'date, no tax str¿t ¡e
payable if the follol
'i¡g conditions are satisfied:
' underlyi'g goods are returned to the factory within 6'¡o¡¡úlrs from rhe
appointed date (extendable for a ma;<imum pe riod of 2 nonths).
. Declaration of the goods hcld by job wo¡ker js
done in specified fo¡m
¿¡d ma¡nc¡.
. Supply of semi-finished goods or
payment of tax i¡ lndia.
t+ 3.12 Reverse Charge Mechanism
Q, 42. What is Reverse Charge Mechanism unde¡ GST?
_-Ans.
Generally, the s!Ìpplier of goocls o¡ se¡vices is liable to pay GST.
However, in specified cases like inpo¡ts a¡rd other notified supplies, the Íiability
m-ay be casd on the recipient under the reverse charge mËJhanirm. Re.,e¡se
Charge means the liabiliry to pay tax is on the recipieni of supply of goods or
se¡vices i¡stead of the supplier of such goocls or se¡vices in rËspéct oinotified
categories of supply.
Tzoo types of Reztetse charge scenaríos prooiiled it laza:
f-ilsú is dependent on the nâture of supply and/or nature of supplier. This
scenario is coverecl by Secrion 9(3) of the CGST/SGST/UTGST Act and Section
5(3) of the IGST Act.
As per the provisions of Secrion 9(3) oÍ CGST/SGST/UTGST Act,2017 or
Section 5(3) of IGST Act, 2017, the Govemrìrent may notiJy speciJy carcgories of
supply of goods or services or both, on which the tax shall be paid on Reverse
charge basis try. the recipienb of such goods o¡ sc¡vices or both. Aìl the provisions
l
I
I
goods is done onìy on

43. ao...r-,g{va ÉÈr,u¡ìwssnv *nleé .
j.¡¡l,i:,,t, :
''-,..., ... .,.. .
i
of this Act shall apply to such recipient as if he is lhe person liable for payi¡g the
tax in ¡e.lation to the supply of such goods or. services or both.
S¿con d scena¡io is cove¡ed by Section 9(4) of the CGST'/SGST (UTCST) Act
and Section 5(4) of the IGST Act whe¡e taxable supplies by a¡y u¡registered
pe¡son to a registeted person is covered.
Section 9(4) of CGST/SGST/UTCST Act, 2017 o¡ Section 5(4) of ÌGST Act,
2017 provides that the tax i¡ ¡espect of the supplv of tâxable goods or seÌvices or
both by a supplie¡, who is not registe¡ed, to a registe¡ed person shall be paid by
such person on reverse cha-lge basis as the recipient and all the provisions of this
Act shau apply to such recipient as if he is the pe¡son liable fo¡ paying the tax in
relation to the supply of such goods o¡ services or both. Accordingly, wherever a
registered person procures suppLies from an un-registered supplier, he needs to
pay GST on reverse charge basis. Flowever, supplies where the aggretate value
of such supplies of goods or service or botl-r received.by a registered pelson from
a¡y or all the uffegisteted suppLiers is less than <5,000 in a day aÌe exempted.
llowever, AII categories of registereà persors are exempkd
fTon
the proz.tíiions ol
rcoerse clq|ge till 31.03.2018. T'hís ezemption is aoaîlable only tilt 31.03.201g.
The provisions of Section 9(4) of rhe CGST Act,2017, will not be applicable ro
supplies made to a TDS deducto¡ in tems of NotífieationNo.
g¡2077
CentthlTaz
(Rate) ¡lated 28.06.2077. Thus, covernÌiÌeit. entiti4 who are TDS Deductors
unde¡ Section 51. of CGST Act, 2015, neeá noi pay isl u¡rde¡ reverse charge in
case of procurements f¡oû q¡úcgiste;ed supplierò.
Q. 43. When a persón is..ièijrriied ¡o get ¡egistered u¡rder RCM?
A¡rs._ An¡ person who isi iequiled to pay tax under Reve¡se chalge has to
compulsorily register under GST and the th¡eshold 1i¡nit of ? 2O løkh g7O lalJ. Iot
special category states except J&K) i6 not applicable to them.
Q. 44. Ca¡t a person paying tax r¡¡der RCM claim ITC?
Ans. A supplier ca¡not tâle lTC of GST paid on goods or services used to
make supplies on which recipient is liable to pay tax.
Q. 45. Explain the provisions regarding Tiure of Supply under RCM.
-
Ans. The ti¡¡re of supply is ttre point when the supply is liable to GST. One of
the factors ¡elevant for determjni¡g time of supply iì tÉe person who is liable to
pay tax. In Reverse cha¡ge, lecipient is liable to pay GST. Thus time of supply for
supplies ulder reverse chalge is djfferent from the supplies which a¡Ë-u¡de¡
forward charge.
In cøse of supply of gootls, time of supply is ea. ieêt of
. dale of receipt of goods; or
. date of payment as per books of accounts or date of debit in ba¡k
accou¡t, wl chever is earlier; o¡
. the date ùnmedìately following BO days fiom the date of issue of invoice
or sinilar othe¡ document.
It case of supply of serþices, t:ìtne of sttpply is eßrliest of:
. date of payulgr¡!3s_p_e¡
_books of accounts or dâte of debit in bank
accou¡t, whjchever is earljet o¡
:!.r:,ri,:,.r.: r-1.i,¡rir:.r'1,.i.i,tri;ii:tìtrlit,..iir$:ì:Íìlti:,¡ili:.]i.,Srl [ ffiiÍgr.eäør'ir.'; er
. the date immediately following 60 days fuorrr thLe date of issue of invoice
or si-rnilar other document.
lVhere ìt is not possible to determine lime of supply using above methods,
time of supp'ly wou-ld be the date of enh.y in the books of account of the recipient.
Q. 46. Enlist the various compliances in respect of supplies under reverse
charge mechanism?
A'¡.s. Coltll,pliaflces it rcspect of supplies Lfi.Let Reterse charge mechønism:
(Ð Merltion in invoice. As per Sec-Êòñ3l:Of.tlre ÇGST Act, 2017 read wíth
Ruìer 46 of the CGST Rules, 2017, every târ'invoice has to mention
whedre¡ the t¿r in respect of supply in tl.re invoice is payable on- reversi:
chatge. Similarly, this also needs to be mentioned in receipt voucher as
q'ell as refund voucher, if tax is payable on reverse chalge.
(ii) Maintenance of accounts by registered persons. Evè¡y regidtered person
is required to keep arnd ¡oaintain reco¡ds of all supplies attrâcting
payjment of tax on reverse charge.
(iii) Payment only be e-cash ledger. Any ar¡ou¡t payable under ¡everse
charge shall be paid by debiting the electronic cash ledger. ln other
words, reveise charge liability ca¡not be dischãrged.by using Input tax
cred:it. However, after discharging reverée charge liability, credit of the
same can be taken by the re¡ipient, if he is otherwise eligible.
(i?r) lnvciice level informatión in ¡espect of all supplìes attracting reverse charge,
rate wise, a¡e to be furnished separately in the fable 4B of GSTR-7.
(?,) Ad¡,lance paid for rewerse charge supplies is ãlso leviâble to GST- Thc
person making advance payment has to pay tax on ¡eve¡se charge basis.
Q- 47. Enlist the various supplies of goods under Reverse charge
mechanism,,
1. I Cashewnuts, not shelled
9_r__peelg _'
u¡der Reverse
-9,
6.
.Bgv-:g.qg..
-.._....,..,
Supply of lottery
mechanism
I
l
i
!
i
I
ir
I
1l
I
ii
ii
Agriculturist
State Gove¡nment,
Union te¡¡itory or
any local authoritJ'.
Any registered person
"taa"d;;;;
Lottery
selling agent.

44. i
r
i
i
lt
il
ij
ee o-,,.sHva.dû!,lti¡Ì_ffiJiÞ,çÈFs,;1ìt:ri.ii,
;.r,.,i.:ì
7.
-:' I
D1"i!,P4-o:|;gîÊrFtlv
:
rvo. |
,.
of. Sèi?leëtÈ:ï,Ê: .:
1Any service supplied by
a¡ty person who is
located in a non-taxable
teûitory to any petson
other thân non-taxäble
onli¡e recipient.
Cent¡al Government,
State Government,
of services under Re
2
Union ter¡itory or a
local autho¡if.v
Goods Tra¡sport Agency
(CTA) Services.
à,Yr,!l#'!{Ë, :
'i
î.ny
person located in
a non-taxable terri-
tòru.
Arìy registefed person
f-egal Services bv adriùàie.
l
I
Services supplied bv a¡
|
a¡bit¡al t¡ibu¡al tt a I
business entiti¡- I
Services provided by way
I
rrf sponsorship to any
I
body co¡porate o¡
I
PartnershiD firm I
chatçt
GTA who has not
pâid integrated tax at
llre rate of 72/o.
\94.riþ¡!::*en¡i6,
A.lly person located in
the taxable te¡ritory
other than nontaxable
online recipient.
Alty factory society,
cooperative society,
¡egiste¡ed person, body
corporate, parhlelshp
firm, casu;¡l taxable
petson; located in the
taxable tetritory Reverse
Charge Mechanism in
GST.
A.t--ú'..*;;ti;"
located i¡ the taxaÈrl'e
ierritory.
tury business entity
ocated in the taxable
g{o-ry:-
ry body corpolate
rr partnership firm
ocâted irl the taxabie
An indiv.idual advocate
includir-rg a senior
advocate ot fi¡m of
q{Y9_"3t"::_____
A¡ arbitral t¡ibunal.
Any person.
Services supplied by the
Cenbal Governmeñti
State Govemment, Union
territo¡y ol local
authority to a business
entity excluding-
1. renting of immovable
property, and
'.: .t
.
-.
.t
,:;. . : : a..: _.,:.i.4'
2, services specifed below:
(i) service by the
Depaftment of posts
by way of speed
post, exptess pdcel
post, liJe i¡surance,
and agency setvices
provided to a pe¡son
other than Cenrral
Govefiment, Stâte
Govelnmeni o¡
Union tertitory ot
loial authorityj
(ii) ser-vices in ¡elation
to alì. airc¡aft or a
vessel, inside or out-
side the plecincts of
Centrâl Governfient,
lenv
trusìnejs enhty
Sta-lè- - Govemment,
I locitea in the t,ìrâble
Union territory or i ierritow.
Local authority.
I
cfiagtÊF 3:.lNcoME fAx ióREDIr..r
'e3.
a port ol an ai¡po¡ti
(iii) hansport of goods
-.-__oJ-P-.asi9l-89ls:
Services supplied by a
director of a company o¡
a body corporate lo the
said company or the
Services supplied by al
i¡su¡ance âgent to any
person carrying on
9.
insu¡anc,e business.
Services supplied by a
lecovery agent to a
barking company or a
fi¡ancial Ì¡stitution o¡ a
non-banking fi¡ar-rcial
.c àìi;tá" .f -;
company or a body
colporate
company.
Services supplied by a
pe¡son located i¡ non-
taxable teûitory by way
of trâ¡sportation of goods
by a vessel from a place
outside India up to lhe
customs station of
An insu¡ance agent
Ttre company or a
body corporate located
in the taxable territory.
A recovery.rgent
sl."-qs-çs r_L!4i1
Any person carrying
on i¡surance busiñess,
located in the taxâble
A person located i¡
non-taxable territory.
t"!t,jgty.
A barking company
or a finarìcial insti-
tution ol a non-
banking fi¡ancial
company/ located in
lhg-lÊr3þ-l-",!9r"!9ly_:.,
Importel, as defi¡ed
nt clause 26 of Section
2 of tlLe Customs Acl,
1962 (52 of 1962), Io-
cated in the taxable
ter¡itory.

45. r¡r, suvdri:Lrn'!¡ivvmsrú;bÈhm
Supply of servicês by an
author, music composet
photographer, artist o¡
the like by way of
t¡â¡sfe¡ or permitting the
use o¡ e.nio]¡ment of a
copy¡ight covered u¡rde¡
Section 13(1)(n) oI ùe
Copyright Act, 1957
¡elating to original
literary, dramatic, musical
or a¡tistic wo¡ks to a
publisher, music comparry,
Autho¡ or music
composer photog¡aph
her, artist, or the like.
Supply of serwices by the
membe¡s of Overseeing
Comnittee to Rese¡ve
Bank of lndia.
or the like
Publishe¡, music
company, producer or
the like, located in the
ta-\able ter¡itory Røoels¿
Charge Mechanísm ìn
GST.
liii'l**, ihí1i¡ï11ffr Ë.i¡iärl,;:,,,i#:ii;,,,;,:l1il..riir:riili
Membe¡s of Ove¡-
seeing Committee
constituted by the
Reserve Ba¡k of India.
æÊ$"+o
Praetichl Qtrestions
Rese¡ve Bank of India.
Q. 1. Mr. S a supplier of goods, pays GST undet regular scheme. ffe has
mâde the following outwa¡d taxable supplies iJr the month of Decemtrer, 2017:
Pøt ticuli¡rs Amount (?)
Inhjr-state supply of goods 72,O0,OOO GS'I @ l2y.
Intei-state supply of goods 10,00,000 CS-t @ 12y.
He has also furnished the following. inforr¡ràtijn in respect of purchascs
made by hil[r during the same tax period:
Pdt'tiqdaß Atnount ft)
Intra-stato .purchase of goods 6,00,000 (Exclusive of cST)
'
GST @ 12%
hlte¡-stât(¡ purchase of goods 2,00,000 (Exclusive of GST) GST @ 12y,,
Mr. S h:a!l the following ITCS with him as on 7-12-2O77:
CCST rcST ICST
{70,000 <60,000 {45,000
Compute the net cST payable by Mr. S foÌ the month of December, 2012.
ble by Mr, S on outwa¡d
.state purchases of goods
C(imiutãtion of cST
Lessi GST pafable
tation of Total ITC
Balancel ITC avâ¡leble
lessr Utilize¿ lor lóst
Net GsliPava¡le
+
Unutilised mC on 01-01-2018 is 12000 (SGST).
Q.2. Grcysham & Co., a registered manufactu¡er is engaged in taxable
supply of goods. It procured the following goods during the month of Janua4,.
Determine the amount of Input Tax Credit available by giving necess¿uy
explanationI foÌ treatment of va¡ious items.
ble from Electronic credit ledger
tGsT @ 12%
:: .:(t) .
6S,000
1,20,000

46. ESHMAEqI:U¡¡-_-_Í
V-EFFIIJSB|ËS.
Laplops used in office within lhe factory
Truck used for lranspodation of ¡nputs with¡n ìhe factory
Capital goods used exclusively for non bus¡ness purposes
Êlectric i\¡otors obtained fiom an Ljnregislered supplier on which tax
has been pâid by Greyshyam & Co. on Reverse charge basis
Building l\¡alerial used in the construction of Offìce building
Capilal Goods used exclusively for makinq outv,/ard suoDlies to SEz un¡t
Sol. Computation of Input Tax Credit available ¿o Greysham & Cio.
Truck used for transportation of inputs wilhin the factory'1
Capital goods used exclusively fóinon,business pu¡poses*z
Elêchic ltlotors obtâined from an Unrpgistered supplier on wh¡ch târ
has been paìd by Greysham & Co. on Reverse chârge basis'3
Building l\.laterial used in construction of oflìce buildtng'a
CapÌtal coods used exclusively for niaking outward suppìies to SEZ unit'
Total lnput Tax C¡edit available to Grevsham & Co.
Working noles:
., a" l"' s..rio. îz1s¡1a¡1ii¡, rnp"t rax cÌedir is u"¡iur"la. rhe Moror vehictes and orher
.onveyances ùe being used for rr¡flsport-¿rion ol inpurs with in the facLory.
+,
As per SRtion 17(5), no Input rax oedjr slull be âdnissibt€ i¡ case of capjirt goods nor bcing
,ìsêd fo; B,,cìñêqc . :-,:. :
-3
?ecLr¡c
MoJols acquÈädr&,orä a.rt.Uftesisrercd supptier on rehich rax lìâs beerì paid by
Greyshâm & Co. on Reygrsè charge basis is etigible for tnpur rax credir.
rr
As per Section 17(5)(d), mC ìs not avâilabte on goôds or services uséd in construdion of aD
immovable prope¡ty.
*s
Input tax c¡edit of tax paid on capital goods used for maknrg raräbte suppljes to SËZ
admissible even though it is a zero rared supply.
Q.3. Everest Ttaders, a tegistered dealer in Ambala, furnishes the following
details of purchase and sales pertaining to the month of Nove¡nbe¡:
Product D purchased from Ludhiana (inctùìji¡ìg IGST @
jB%)
]
aZ,oOO
Sâles made during.lhe month to a Deater of Ahmedabad I
Sol.
All the above amounts of sâles a.re
Liability of Everest Traders, if any, for
Intet-sfdle Sale:
Product A sold to deâler in Ahmedabad
(IGST
@ 12% on <50,000)
Product D sold to deale¡ in Ahmedâbad
(IGST
@ 18% on {30,000)
Lessr Eligible ITC on purchase f¡om Ludhiana
(T82,600t18+118)
LJnUt¡l¡sed ITC
,nf¡¿-sfáfe Sa/ei
Prodlrct D sold within Haryana
(CGST/SGS'[
@ 9% each on <40,000)
Lessr Eligible ITC on local purchase
l{50,400
x 12 + 1121, ie., <5,400
Net amount of CGST/SGST/IcST
Lessr lGSl used to seloff payment liabihty of
CGST and SGST in order
ul.ation of Liability ãf Fv-erEõT-Tiaders
CHAPÍEn 3: IN@ME TAX CFìEDIr ¡ S7
oi bverest l rå.lerç
exclusive of GST, Compute
the month of November.
Q.4. The following are details of purchase and sales effected by tr4/s Crown
Associates, a registered mamrfactu¡er under CGST Act,2017:
(l) Pwchased Raw Material 'X'f¡om a local deale¡ fo¡ t86,100 (inclusive
of cST @ 5%).
(il) Purchased Raw Mate¡ial'Y'from a local dealer fo¡ T1,12,000 (inclusive
of GST @ 12%).
(iii) Purchased capital goods ftom within the state to be used in the
CGST ({)
3,600
(ia\
(")
(oi\
3,600
2.700
manufactu-re of tãxable goods for t1,96,000 (inclusive of GST @ 12%).
Other Direct and Indirect expenses T58,000,
Take Profit margin @ 50/o on total cost.
During the month of October, TOVo of the prodrction is sold within the
state. It atkacts GS'r @ 120/0,
the GST
Calculate the amount of CGST and SGSî payable after utilising Inpüt tax
credit for the month of October, assuming thât no opening balance of Input tax
(redit is âvailable.
Sol. Computâtion of Invoice Value
(?)
6,000
5,400
12,600
f,200)
900
NIL
300
Purchase of Raw maledal 'Y'from a locâl dealer (T1 12,000 x 100 + 112)
Othe¡ direct and indirecl expenses
Total Cost ol goods manufactured
6û0
of Raw malerial X from a locâl deâler (<86,100 t 100 + 105)
1

47. 88,t,E S{MiræiJ¡ tiN\wERSfiy SÈFE4i..i.
r
.',j'..,,i.,
...
::,,,,ì
.,,
Computation of Tax Liability
Outpul lax liâbility for lhe month of October
@ 12%
(being CôST 6% and SGST 6%)
F1,76,400
x t2%, ¡.e., <21,168)
Lessi Eligible lnput tax credit in respectof p!tchases of-
Raw matedal 'A
[{82,000
, 5%];/:e., T4,100
Raw material 'B'[t1,00,000 x 12%], r:e., T12,000
Pattiallars
cred¡t lo be cåÍied forward
trnocnouRES
u+ 4.1 Tax Invoice
Q. 1. What is Tar( invoice? Explain the tJæes of tax invoices under cST.
AJrs. GfiT invoice ot tax invoicé is a commercial dqçqment tÌ¡at must be issuecì
by a seller to a buyer. Entities ¡e'gistered undeaCsf-.þ]¡lt issue GST inwoice fo¡
every tâxable supply of goods and services supþli.é{.{1ì$oices also serve as legal
docurnenLs, dema¡ding payment for
!'oods
öi sèrviòËs. Once payment is made orr
11
ìnvoicé by the buyer, the-l*X9{Ë}1.$t¿Ua'¡.""e as a legal docufnènt showirlg
title to the p¡operty puèh¿ised:
Thete øre møinly 3 tyiii{'òf tnooices under GST:
(i) Ta* Invoice. For taxable supplies either wittin state o¡ outside state a¡d
the person is reqrlited to collect a¡d pay the tax on such supplies.
(ii) Bill of Supply. Thè supplies on which the pe¡son is not requi-red to
collect and pay the tax. These are mairùy tssiedby Contposìtiorl Deûlers
afad Expørteîs.
(iii) P¿iyment Vouche¡. This voucher is requ.iÌed to be issued when the tax is
p¿lyable by the receiver of goods or ser'¡iceC or both. It covets fmpo¡fels
artd, Reoetse Chatge Mechanisnr of paying tãxes.
Q.2. What details are required to be rnentioned on a,GST Invoice?
¡s. Dêtailed rules and guidelines for issue of invoice and GST invoice fo¡mat
has been provided fo¡ in the GST Tax Invoice, Credit and Debit Notes ¡ules. As
per the GST invoice rrles, all GST invoices issued in India must have the
following details manda tori.ty:
1. Name, add¡ess änd GSTIN of the supplier of goods or services.
2. lníoice nu¡rbe¡, r¡nique fo¡ each firiàcial yeä which is a consecutive
ser.ial numbe¡ not exceeding sir<teen chalactert in one ot multiple series,
ccintaining alphabets o¡ nuûrelals o¡ special châracters
-
hlphen or dash
a¡rd siash.
. :,:i
r. i,,',:Lr..'-is-e.,,r:.jjìffiË.r"¡.,;, :

48. "ol.:ql¡ü¿:çÈff'i$dffiffü'*¡Ìçi(.:¡¡;1;ii;'||!;||¡¡...',,.ì.]::.!':i.].]¡:l,::i;]:l:i
3- Invoice date
. 4. Name, add¡ess and GSTIIñ of,the recipient of goods or services. In case
the recipient is not ¡egistered u¡dei GST, then name and adcLress of the
recipient and the address of delivery must be mentioned on the invoice if
the value of the taxable supply is more than {50,000.
5. lf a¡ invoice value is less than (50,000 then name and address of the
recipient and the address of delivery ca¡r be mentioned, if required or
requested by the recipient of goods and service.
6. HSN Code or SAC Code for ihe goods or service. The requirement for
mentioning HSN code o¡ SAC code on tax invoice has been relaxed for
taxpayels whose turnove¡ is below (1.5 c¡ores.
7. Description of the goods or services.
8. Quântity ànd unit of measurement.
9, Total value of supply of goods or seryices.
10. Taxable value of thê supply of goods or services taking into account
discou¡t or abatement, if any.
11. GST rate applicable along with the amount of CGST, SGST, IGST and
GST Compensation Cess payable by the recipient.
12. Place of supply along with the name of the State, in the case of a supply
in the cor.¡Ìse of inter-State uadè cii co¡¡r¡àêice.
13. Add¡ess for delivery of goods and services, if it is different fiom the
place of suppl)¡¡.rì'iìr l.,1. ' .
ri rr'
14. Whether tax is
Þày¿ltle oh'ieverse charge basis.
15. Signature or digital sig¡atu¡e of the supplier o¡ autho¡iseci
representative.
Q. 3. Explain the man¡er of issuing Invoices in GST.
AÌns. The nønnet of issuing lnooices in GST ìs øs follozus:
1. Tax Invoice for Supply of Goods is to be issued in 3 copies as:
' Original Copy for the Recipient
. Duplicate Copy for the Transporter
. Triplicate Copy for the Supplier
2. Tax Invoice for Suppty of Services is to be issued in.2 copies as:
. Originaì Copy for the Reòìpient
. Duplicate Copy fór the Supplier
3. Bill of Supply for bolh goòds ancl services ca¡ be issued as:
. Original Copy for the Recipient
. Duplicate Copy for thË.supp.lfer
;::1,.å; r,r:. r' :::'-:.1;.
VERVE Fínanc¡âl Serv¡ces pvt.
Ltd.
6 Dhannamal Streèt,
Spurtank Road, Chetpet,
Chennai-600031.
TAIúIL NADU
GSTIN : 33AABCL398G2ZH
CrtnPIeR ¿: pnOCeOUA¡S r sr
Sample GST Ta-x Infoic-ê-Fúrftãt-.
Custome¡ : Ajeeth Kumar
Billing Address
Ajeeth Kumar
6 Dhânnamal Street,
Spurtank Road, Chetpet,
Chennai-600031.
TAIVIL NADU
No
IGSTRcgis,'¡Â$on -
Steda¡d Package
TAX INVOICE
lnvoice Number : 2017-40
lnvo¡ce Date : 20-07-2017
Payment Due Date ì 2O-O7-2017
4ry.
Sh¡pping Address
Ajeeth Kumar
6 Dhannâmal Sheet,
Spurtank Road, Chetpel
Chennai-6O0O31.
TAMIL NADU, INDIA
1 4752
Disc.
0
Q, 4. When should a tax Invoice be issued under GST?
-
Ans. Time ol supply for goorls or service is when GST becomes payable.
Issua¡ce of tax invoice is an impo¡tant element in determi¡ing time of suppty. ln
most scenarios, time of supply of goods or service is th.e date of issuanie of an
i¡voice or receipt of payment, whichever is earlier. If goods or services have been
supplied, then invoice must be íssued ¡¡/ithìn a period of 30 days. lìence, GST
i:rvoice_ should ideally be issued when payment for goods or services is
reasorrably assured or if the goods or services have been supplied to the recipient.
It is vety impo¡tant to note that the supplier becomes liable for remittance of
GST to the govemment on the issua¡ce of tax invoice, even if payment has not
been ¡eceived f¡om the customcr. Hence, if payment is not reásonably assured
and goods ot services have not been delivercd, an estimate can be issued by the
supp)ier.
4L52
Iaable Value 4152
0
Ccnrral Coods ând Senices Tax (CSÐ 373.68
State Goods and S€¡',,ices Tãx (SCST) 373.68
0 9
Intcgrâted Goods and Se¡vlces Tax (tCS¡ 0
3n 6a
GST Coúìtcnsation Cess 0
Tlìank yoù lor yoùr business!
Totaì P¿yable 4899.36
9373.68 0

49. 9e Ë SHMA.-ìqI{Ì1UNI\ÆmITY ffilE
+ 4.2 Credit and Debit Notes
Q. 5. When are Debìt notes and Credit notes .issued?
A¡rs. wlren goods supplied are r:efuûred o¡ when thete is a r.evision in the
invoice value due to goods (ot services) nob being up to the malk or extra goads
bei¡g issued a Debit Note o¡ Credit Note is issucd bv Ihe supplier and receivcr of
goods a¡d services.
A debit note oÌ q Cred.it Note c4n be issueil ifl l:tþo sihntions
-
1. When the aanoult payable by buyer to selle¡ dec¡eases. There can be a
change in the value of goods after tìre goods ¡.e delivered arld i¡vojce is issueJ
by the seller. This ca¡r be due to a retum of goods oi due to the bad quality of the
goods delivered, etc. ln this case, the value of goods decreases due to r.hich a
Debit Note is issued by the pu¡chaser to the seller. The Debit Note p¡ovides
details of the ãlnourlt of money debited f¡ofn the seilers, accou¡t and also states
the re¿son for the same. The reason behi¡d this is thàt Lt the purclìaser,s books of
account the seller will have a c¡edit balance. l/hen a debit note is issued the
credit balance of the seller's account decreases, thus reducing the selle¡,s balance.
It mea¡s that that lesse¡ aûìoürtt is required to be paid by the buyer to the seller
to settle his Liability. Thus debit note ¡educes the liability for the buyer. The seller
issues a Credit Note âs a response or acknolvledgment to the Debìt Note
2. When the amount payable by buyer to seller incieases. l4¡hen the value of
invo¡ce i¡creases due to extr¿ goods being delive¡ed or the goods ahea<1y
delìve¡ed have been cha¡ged at an incbr¡.ect lesser value, a Debit Note is required
to be issued- The Debit Note, iÌ this caie, is issued by the seller to the buyér and
the buyer as an acknowledgment to the receipt of Debit Note issues a C¡edit
Note. The ¡eason behind this is that i¡ the selle¡,s books of account the buyer will
have a detrit balance. \À/hen a debit note is issued tlìe debit balance of the-buyer,s
accou¡t increases- It mearìs that mo¡e aÌrtourìt is requûed to be paid by the buyer
to
-the
seller to settle his liabitity. Thus, c¡edìt note f¡om the buyer increases his
liability.
Q.6. In which c¿ses a Del¡it Note is issued unde¡ GST?
AJls. C.rses |þherc Debit flote has to .be iss ed bA tlrc s pplìeri
(r) Original tax i¡voice has been issued and laxabÌe value in the invoice is
less than actual taxable value.
(ii) Original tax invoice has been issued and tax charged in the invoice is less
than actual tax to be paid.
Q. 7. In ¡rhich cases a C¡edit Note is issued i¡nder GST?
Ans, Cøses xohen Crcdit ,tote is to be ¡ssøed. by s pplierl
(Ð Orig,rrul tax i¡tvoice has been issued and taxable value in the invoice
exceeds actual taxable value.
(ir) Original tax inwoice has been issued a¡rd tax chatged þ the invoice
exceeds actual ta¡ to be paid.
(iir) Recipient retums the goods to the supplie¡.
(i?r) Se.vices are founéto-be-defi cient.
Q. 8. What are the d€tails to be covered in Debit Note and Credit Note?
,:: . .: ' .
.
I
..
tì.:1ì,:,:::'¡,-,r :".::,i.:::t:::t.. ì::t::.1;ijiiÄiiiËfitäi
Ë-nijCeóùneS, a gA
1 .. . 11. r,:;' ll
Deta¡|6 to be copeted in Debít Note &nd Credít Note:
name, addLess, ancl GSTIN of the supplie4
nafu re of the documenL;
a (ionsecutive serial numbe¡ contairrirg only alphabets and/or numerals,
ur ique for a financial yea-r;
dâLe of issue oÉ such document,
name, adcìress and GSTIN/Unique ID Numbe¡, if registered, of thc
rer:ipienu
name ancl address of the ¡ecipient artd the. address of delivery, along
with the name of State a¡d its code, if èuch recipient is_ uruegistered;
sellìal numbe¡ and date of the corresponding tax invoice or, âs the case
nr,ry be, bill of su p¡ly;
ilrt¿ taxable value of goods or services, rate of tax-a¡d the amount of the
taik qedited or, as the case may be/ debited to the recipient'a¡d
si¡tnature or digital signatule of the supplier or hìs autho¡izeLl
¡e'P¡esentative.
Debit Note o¡ C¡edit Note caJI be issued anytime i.e,, there is no bime limit for
issujrrg the Debit,Note. Also, Debit Notes and Credit Notes issue have to bc
declare<l ilr the GST Returns {iled'in the following month for the month in which
docur¡enL is issuei{
Tlrc detøìls l1øue to be decktred on ea ier of the foltoiaing
døtes:
. by the 30th of September follor.r'ing the end of the year in which such
sù.pply was made,
. the date of fili¡g of the ¡elevant a¡nual return.
Note: The tâxliability willbe adjusted butno reduction in output tax tiability of the supplier
will be peñrined if the hcidence of tax and interest on such supply has been passed on to ârìr
*"' 4.3 Retufn
Q. 9. Explain different types of retu¡ns under GST.
41!,rl]:
;Eoin1l.,:l
G STR-]
ffi .r,#iÍiiii'{#¡!ii$l¡i
GSTR-2
Detaíls of outward supplies of
taxable goods and/or services
effected.
GSTR-3
Details of inward supplies of
táxable goods a¡d/or services
er'fected clai¡ni¡e input tax c¡edit.
Monthly retum on the basis of
finalization of details of outwa¡d
supplies and inward supplies
aloflg with the payment of
amount of Lax.
ffiåå#tr$
Registered Taxable
Supplie¡.
Registered Taxable
PerAon.
Registered Taxable
Person.
10t' of the
next montl..
15ff of the
next month.
20,h of t]ne
next molìth.

50. {o
i:.ii
ll
ll
*¡
d
il
m
'fr
|Å
H
,,4
:a
T
I
I
94 r sHfvA r'Fl 4 uN\HlSITy sEBtEs
.
CSfn+
|
Quarterly return for composrtion
I
tarable person.
GSTR-s
I
Return for Non-Resident foreig¡
I taxable person.
csrn-o
lnet"rn for rnp"i---- lãrlri""-
lDistributor.
GSTR-7
GSTR-8
GSTR-C
Retu¡n foi authoiities deducting
tax at sou¡ce.
Details of
"oppli"" "?".t"ãthrough e-commerce operator
eng
th9 a_rnount of tax collected.
GSTR-IC
Composition sup-
plier.
A¡¡rual Retum
| ¡i¡¿l Retut t
i
I
I ,.:..
't'l¡"" :'''' '
'
..::j..).t:.
.
a
.-
D"t"tb
"f
t"**d
-rppl,". to ¡"
-
funished by a person having
Ì.Ion-¡esiclent Tax-
ubl"
!."a91:_ _....
Input Setvice
Dist¡ibr r for
GSTR-l
lFt of the
¡nonth succ-
er:ding qua-
Tâx Deductor.
E-com:nerce oper-
ator/tax collector.
20tt, of tbe
it9* qetl5_
13¿,, of the
"9i1t-glqlq,_
10úl of the
next montlì.
let of the
next month.
31st Dec, of
nrext furaucial
Q. 10.,who are,required to get Audited unau, csr t^*l -__--
Ans. Audit under GST is the process of examination of recor.cls, returns àncloLlrer documerìts maiiìtai¡ed by a taxable,perso.. Th; p;;;;ro verL? fhecor¡ectness of tumove¡ decla¡eá, taxes paid,.efu¡rd clu¡Àeianã i'.pur tax creait¡vâilcd, aÌrd to assess the coär¡tiante rvirh i¡" pr"rt.jã* .j ää"',
Every reg.istered taxable person whose tu'mov.¡ a.rrirll-u firrur,.iuf y"o,ceeds-the prescribed limit
[As per the l¡test GST ñ"i;,. ì;"" i_¡¡nuve¡ linrir is¡L¡ove T1 crorel shaJl get his accounts audited by
"
Ci";L;; oì"rrrl,url, o, oCost Accountant. He shall electronicallv file:
.
1:.an¡ual.rehlm
using the Fol; GSTR 98 alongwith the reconciÌiation
sLatement by 37st Decenber of the next Fina:rcial"yea¡,
.
the audited copy of the aÌu1uâi accounts,
Registered Taxable
Petson.
Taxable person
'rwhäse rreg.istration
lbêq.,_b..eênr.òur¡end-
.:erèd-ó¡ cancelled.
Person }ráving
UIN ând claiming
refu¡rcl.
'. ¡:,:i . .:ì:. CHAPIÈB 4: PFOCEDURÉ .¡.9Þ..
.
a reconciliation sLaferrelrt, reconciìiiì¡]
-ErEiãÌì-ê-of
supplies decla¡ed i¡r
tÌÌe tetutrr with the aucliteci a¡nual fjn¿r¡cial stutcm.ntl
'
. and other parLiculars as prescribed.
rr drty (axaÞle pelson, alter iurnishi¡t â return discovers aÌ1y omission/
incortect details (from results of aucl_it), he czur rectify subject to iayment of
If any taxable petson, after. furnishirg a return discovels any omission/
inteÌest. However, no rectification w l úe a|owed urtur'tt.," ã,:ut¿utu tor f ing of
retùrn.Ior the month of September or second qualter, (as the case may Ue),
l"*T,lqjf
*9
:f
the financiat year, o¡ the acruãl date oi rit ,g oi,tl.
"ut.l,u,,t
talithtu 3
,nottths of
the date of
cancellation
or date of
cancellation
orde¡, which-
9r9r i!-1"i91-
zqth on the
.nonth follo-
rving the
¡onth for
¡/hich sbate-
nerìt is filed.
,ltt*:l
This rectificøtion zuill tot be allou¡ed u¡here results øre
from scnÈíny/øttdìt by
the tax øuthoûties.
Q. 11. What is Audit t y Tâx Autho¡ities?
A\s. Audìt by T.trc Authorities:
. The Com¡¡rissioneì of CGST/SGST (or any officer authorized by him)
may- conduct audit of a taxpayer. The frequency and ma¡mer of audit
shall be as prescríbed,
. A notice will be sent to the auditee at least 15 tløys belore.
. The audit shall be completed withjr.¡ j
ffionths frãm date of commence_
ment of the audit.
. The CorìÌmissioner can extend the audit periocl for a Íurther 6 months
with ¡easons recordecl i¡ writing.
Oblígøtions of the auditee:
The taxable petson will be required to
. provide the necessary facility to verify the books of accounts/other
documents as required,
. to give information and assistance for timely cornpletion of the audit.
Fi'rdings of Audit:
On conclusion of an aûdit the office¡ will inform the taxable person within g0
days of'.
. the fiJrdings,
. theiÌ reasons, and
. the taxable person's rights ¿nd oblig¿tjons
If the audit results in cletection of unpaià/shorçaid tax olrv¡ong ¡efund o¡
rvrorig input tax credit availed, then à"-o"a urla recovery actions will be
ir1i tia ted.
g1¡19"1.,.,re!
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51. s6 . ! : sHlva o€it{t uñvengrry senms
Q. 12. When can a special audit be initiated?
Ans. The Assistant Coûìl:rrissioner may initiate special audit, considerjng the
nature and complexity of the case and in tÌre interest of ¡evenue. If during any
stage of scruti¡y/enquiry/investigation he is of the opinion ihat the value has
not been conectly declared o¡ the wrong c¡edit has been a.,,ailed +hen special
¿ udit can be initiated.
Special audit can be conductecl even if the tâx pâyer's books l-rave already been
audited before.
Q. 13. Who will o¡der and conduct special audit?
Àns. The Assistant CoÌ¡]¡issioner (Í'iih the p or approval of the
Comrnissioner) car order for special audit (in writing). The special auclit $/ill Lre
ca¡¡ied out by a Chatiered Accountani ol a Cost Accountanl noûlinated by Lhe
Commissione¡.
Q, 14. Wìãt js
the t¡ñe limit for conducfing special audit3
Ans. The auditor will have [o submit the report
.i1,'ithin
90 days- This may be
further extended by the tax officer for 90 days on an application made by the
taxable person or the íìuditor.
Q. 15. Who wiu bear the cost of special audit?
A¡rs. The expenses for exami¡ation a¡d auclit including the auditot's
¡emune¡ation will be detetmi¡ed and paid by the Comûrissioner.
Q. 16. What steps iâed to be takerron findings of special audit?
A¡s. The taxable person will be given an opportunity of being hearcl on the
fi¡dings of the special audit.
If the audit results in detection of unpaid/shortpaid tax or w¡ong refund or
i¡put tax credit wrongly avaiÌed then der¡ancl and ¡ecovery actions will be
initiated.
b 4.4 Assessnent
Assessment means clete¡mì¡alion of tax liabilitT uncler GST law. Belolv a1e the
vaious types of assesstnents uncler GST.
Q, 17. Explain the diffetent types of assessments under GST.
Ans. T1¡pes of ílssessments utldcl GST
. Self-assessnent
. Provisional assessmenL
. Scrutifly assessment
.
Best jutlgrnent assessment
. Assessment of no¡-fileÍs of retums
. Assessment of unregistered persons
. Suûu¡ary assessment
Only self-assessment is done by the taxpayet hh¡self. All the other assessmenLs
aÌe done by the tax authorities.
Q. 18. What is self-assessment under GST?
Ans. Every re6steìJã-ãxãiJïe'ferson shall himself assess the taxes payable a¡rd
SPECIAL.AUDIT iri.it
furnislì a retum for each tax period. Tlús mea¡s GST contrltues to p¡omote self-
assessment just like it was ilt the Excise, VAT and Setwice Tax.
Q. 19. Ìryhat is P¡ovisional Assessment unde¡ GST?
Ans. Art assessee caÌr request the officer fo¡ p¡ovisional assessment if IÌe is
urlable to determine value of goods and services or rate of tax aPPlicable.
Unable to dete¡mine value due to difficulty in
. Calctriating the t¡ansaction value.
. Understanãing whêthe¡ ce¡tain ¡lèe-ipiàiñìld. be included or not.
Unable to detehrine rate of tax due to difficuþ in-
. Classifying the goods ol services.
. Identifying whether any notjJication is applicable or not.
P¡ovisions of Provisional Assessment-
.
Requests for provisional assessrnents will be given in lvriting.
' The p¡oper officer cal allow paying tâx on provisional basis at a ¡âte ol
on À vàlue specilied by lrim,
. Order will be passed within 90 days from date of request.
.
The. taxable person hâs to issue a bonci with a security p¡on]ising to
Pay
the difference between P¡ovisionally
assessed tax ald finally assesse-{
. tàx.
. Provisional assessment will be followed by final assessment. Ttte
Proper
officer ca¡ ask fo¡ info¡mation before final assessment.
Q, 20.
r,44rat
is the time limit for final assessment?
Ans. The final assessment will be done within 6 months of the provisional
assessnìent. This can be extended for 6 months by the Joint/Additional
Commissione¡. Howeve¡, the Comrnissione¡ can exLend it fol further 4 years as
he deerns fit.
Q.21. How a(e inte¡est on additional tax Payable
and refunds calculated?
Ans, The tax payer will hawe to Pay
irlterest on any tax payable un<ler
provisional assessment which was not paid within the due date. Interest pe¡iocl
¡,r'ill L.e calc'uiated fron the day when tax was fhst due on the goods/services
(and not the date of provisional assessment) till- the actual payment date,
ir¡espective of payment being made before or after final assessment Rate of
interesb will be maximum 18%.
If the tai as per final asseÀsment is less tha¡ the provisional assessment, tllc
taxable perSon will get a refund as well as ìlltgrest on refu¡rd.
Râte of intelest will be maximum 6%,
Q. 22. I^rhat,is scruti¡ry. of returns unde( GST?
Ans. Theproper officer cal.t sc¡utinize the return to vedfy its coüectness. It is a
non-compulse¡y pre-adjudication process. In simPle words, it is not mandatory
for the officer to scnltirize a retum. Scrutiny of returns is not a legal or judicial
proceedingr i.¿., no o¡der can be passed: The officer will only ask for explanations
on discreparrcies noticed.
Q.23, I4/hat steps are taken by the proPer officer in câse exPlanatiorr is
satisfactory or when explanation is not satisfactory?
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,¡' !È:..r:':ì..;-::iitt..t:,:i,
,., ì : .
..-
"":i::,Y":
Explanøfion is Satisfactory. If the officer finds the exptar.ìatiorì
s.lnsractory/ Ute taxable persoù will be i¡fo¡med and no fu¡the¡ aclion will be
trUhen Explanatìon ís not Satisføctory:
The proper officer wiII take action_
'
::i::i?"tot"
person does not give a satisfacto¡y exptanarior¡ wirhin 30
.
He does not rectify the discrepancies within a reasonable Lilne (not yet
prescribed).
The officer nuy
-
.
Conduct audit of the tax p¡yer q/s 65.
. St.ìrt Specia¡ Audit procedLrre ty's 66.
. lnspect and search the places of business of the tax payei..
Start DemaÌtd and Recovery p¡ovisions.
æ=@e
SpseEAL Faæv¡stoNts
t+ 5.1 Taxability of E-commerce
Q, l. What is E-commcÌcc?
Ans. Electronic Comme¡ce or F,-Conrmerce is cìefi¡ed uncler Section 2(44) of
CGST Act, 2017 as the suppll, ef goods or sewices or botl.ì, including digital
productc over digital or eLectroììic lleLlvork.
Q, 2. Who is an E-Comrnerce opelator? .
Arrs. Electronic Corä¡nerce Opelatot or E-Comme¡ce operator is defined as
any,person who owns, qperates or manages digital or electtonic facility ot
platform for elecûorric cominelce.
'E-com¡ne¡ce
i¡rcludes all services o¡ goods sold over the intetnet or a¡y other
digital network. lt includes even services sold online. E-commerce ope¡atol is
definecl as any person who operates the platforrn. Eor etøtnple, Flipkatt, Aûrazon
are few of the operators whicl.r will fall uùder the definitìon óf E-co*^"r"e
ope¡ator. They own the platforrn for allowing traders to sell their products
onli¡e.
Q. 3. Is GST legistration conpulsory fo¡ an e-com¡ne¡ce opelatot?
Ans. Whether one has just sta¡ted theil po¡tâl or own ân existing e-coDlmetce
po¡tal, GST tegishation is compulsory,
SecÉion 24 of CGST Act, 2017 defines the suppliers who are requûed !o obtain
regiskation regardless of applicabilìty of Section 22.
Cla se(x) of Section 24, specifies every e-commerce operator to take
regishation.
GST has irtroduced the concept of Tax Collection at Sou¡ce fo¡ e-co¡nme¡ce
operators. Every e-commerce operator is required to collect Tax at source from
the payment made to their sellers selling goocls or services through portals
operated by them.
As per Section 52 of CGST Act, every elecr¡onic commerce ope¡ator, not bei¡g

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an agent, shall collecì an amount calculated .1t such rate not exceeding 1olo, as
may be notified by tlÌe Goveûrment on the recomrìlendations of the Council, of
the net value of taxable supplies made throùgh it by oiher suppliers. Whe¡e the
conside¡ation with respect to such supplies is to be collected by the operator:
. Every e-commerce ope¡ator is r-equireci to collect tax at source (TCS)
regardiess of turnove¡ o¡ supply macle tlu.ough the portal.
. It is not appiicable if the operator is operating as an agent.
.
The rate is not specified but it will not be more than 1%.
.
TCS is applicable only vvhen the payr¡ent fron1 custome¡ ìs received Lry
the po¡tal a¡d then passed on to ihe selle¡, ,vhen the s-eller di¡ectly
.eceives payment fÌom the custoûLer, tlüs provision is not aþpücable.
.
The TCS shoulcl be made on the net value of taxable supplies, iret value is
the total value of sales made on the poltal lrl??¡./s sales rehrm-s durirg tlìe
month.
Due date of payment. The due date to pay the TCS to governrnent is 70th of
eoery motth following the taxable mont:f.. For cxntnple, Tax coliected in the month
of Octobe¡ should be deposited by 10th November.
-
Monfhly retu¡n. Every operator is ¡equi¡ed to file a monthly return (regarding
details of supplies) withiî 10 da\s afte¡ completion of month, il.re rehrrn contains
infor-mation such as details of outward supplies of goods or servicès or both
effected through it, including the suppìies of goods oisèrvices or both returned
through it, a¡d the amount ògllècted as TCS.
The monthly return cân be revised a]1y tine before fili¡g of retutn for the
month of September or filin! of annual return, whichèver is eailier. If there is any
mistake in return, and ou+)ut tax was paid less, the return should be reviseà
along with payment of interest.
Fol er.ample, retum filed for the month of January can be ¡evised befo¡e the
ope¡ator files the reûlrn for the month of Septembe¡ or a¡nual return. If annual
retu¡n is filed on 15th August then return of Jalìualy can be revised before
15th August.
A¡nual retr¡¡n. Every ope¡ato¡ also needs to file a¡ a¡nual statement
containing the details of outward supplies of goods or sewices or both effected
through it, including the supplies of goods o¡ sirvices o¡ both returned through it
and the amou¡t collected during the fi¡a¡cial year. Due date to file a¡nual
statement is 31st Decernber every year.
Details uploaded by E-coÍunerce opetatot should be matched with details
uploaded by-orrline sellers. lf any discrepaÌrcy is found in detâils, retutn shoeld
::.I:"t:1d
alter paying rhe extra tax and interest as applicable.as per Section
52(8) of CGST Act.
Any officer not below the ¡ank of Deputy CommissioÌter may serve a notice
to an operatot fo¡ following detãils:
1. S-upplies of goods or services o¡ both effected thiough such operato¡
du¡i¡e any perioci: or
2. Stock;f g."àr-ñiã-ty lLe suppliers nraking supplies rhrough suclr
..
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,¡i{$f;Ë,$,r!{¡¡.Égudioñs ¡ ror
ope¡atôr in the godowns or wa¡ehouses, by whatever name calied,
mâhaged by such operator and declared as additional places of business
by ruch suppliers, as may be specified in the notice.
OpeÌatof to whom notice is served is required to provide l}jre details zoithífi 75
days fron lhe date of service of notice.
If detaiis are not provided, then penalt).' which ma¡' s¡1s.¿ iô <25,000 may be
imposed on operator,
* _ __
'_.,
!Þ 5.2 lti-Profiteering
Q.4. Whàt do you mean by Ànti-profiteering?
A¡ls. A¡ti Profiteering is a check against profiteering
-
somettring which ought
to be ethical but is now a legal issue in Goods ànd Service Tax. -
As per Section.171 of ihe CGST/SGST Act, any reduction i.Il rate of tax on anv
supply of
æods
or se¡vices or the benefit of inÞut tax credit shall be passed on h.
tlìe recipient by way of commensurate recluction in prices. A]1 authority nla), L.e
constjluted by the govemÌnent to examine whether input tax credits avaiiecl b,v
any registered person or the ¡eduction in the tax rate have actually lesulted irl a
co¡nnensurate reduction in the pdce of the goods or services or both suppiied bv
hirrr.
Q. 5. Write a oote on Anti-profiteering authority,
Atl,s. Axtì-prcfìteeiflg Author¡ty, The power has been given to Central
Goverrurrent to collstitute an autho¡ity to oversee whethet the coqlmensrlraLe
benefit of allowance of i¡put tax credit or ¡eduction in the tâx rates have been
passed on to the final customer. Section 171(2) of the- GST Act provides fot'
establislnnent of an authority for an aÌÌti-profiteering clause in order to ensu¡e
that business passes 01ì the benefit of reduced tax incidence on goocls or se'-r'ices
or botlì Lo lhe consumers.
. Object, T:he National Anti-profiteering Authority shall be responsible for'
applying anti-profiteed¡g measu¡es in the event of a reduction in rate of GST oìr
supply of goods or services or, if the benefit of input tax credit is not passed on to
the recipients by way of commensurate reduction in pdces.
Coflstitutioi. Tlie National Anti-profiteering Autho¡ity shall be lleaded by a
senio¡ officer of the level of a Secretary to the Gove¡nment of India and sl-rall
have fou¡ technical members f¡om the Cent¡e and/or the States.
The Authority under section 177 of tl:.e GST Act shall have the following
monitoring functions:
(a) Input tax c¡edit availed by taxpayer have actually resulted in
comménsurate reduction in price of goods/services.
(b) TI1q reduction in pdces on account of reduction in tax rates have actuâllv
resulted in a co¡rimensu¡ate ¡eduction in the price of goods/services.
The Government has notified anti-p¡ofiteering authority (APA) which will
check any undue increase in prices of products of comPanies under GST. TlÌe
APA will work to cl.reck any undue increase i¡ piices of p.oducts by taxpaye¡
cor¡pânies t¡nder the GST regime.

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lo¿ s sHlv¡ ¡euri uruvens¡ry senus
'
Va¡ious authorities under cST law ø. urrti_p.ofit"..i."
"nurr,
ìir,r",ro*O.*"
of the followingr
.
Nàtional A-n ti _profi teering Authority,
.
Standing Committee on A¡ti_profitáering, and
_
. State level Screening Conìmitiee.
t¡ìe powers to take action are also listed as duties wherebv it c¡¡ order prjce
rcducfior! refund of profit, recovery pe"aty
". ",r;rr'ä."flarior.,
of cs,f
rcgishation. The authoritv constituted'b¡Centrâl C"*r*""ri'ì"iff nave pon,ers
kì impose a penalty in cáse it finds that ,f; prì"" ir"*g ïfrïrg"a 1.,u" ,.ro, t
""r.,
rod_uced consequent to reductiorÌ jn
rate of tax'o¡ ¡f._li* ài?ip"a tar< cledit,
Lìurirìg the two yeârs of initial
-tra¡sition
i"ao êSi ,"girrr"
'Airtilrofiteering
'tJìority_(ArA) wir¡ step in arìd nray ask businesses tt,"t"nuu" no1purr,..r o,, iutt
1...'cfit< of reduced t¿x burden to cånsum".s ,o
"lut"
rp ilr .,,-.1'rr.^;ì,i
",iiì
itt1. ¡çt¡.
Anti-Profiteering Ar¡thoritv (ApA) shall âct âs a monitoring and r¡:gulôtory
.:i,hî':? to curb anri-profiteerìng practices ;;; ;;;;;ã". cs1 ,.si_".
Tlrr. APÄ shall lrave powers to:
. Make company reduce the prices.
" Make company refund the money to the consumer arong with inte¡est @
l6'á p.a.
. Orcler company to deposil the refu¡d amount itì the CorÌsumer. !\elfâr.e
Fund (in case the buyàr is not identifiablei
.Impose
moneiq¡y..
þ-énalty, equivalent to amount..involved i;n unclue
profiteering. .. i:.,r
I
. Cancel regisfratio¡i óf
.re
assessee,
Orders of authority may be for any of lhe following:
.
Reduction in prices.
. Returrring money to the customer along witi1 the interest.
. Depositing money in custolner welfa¡e fund ill case the custorne¡ Llocs
not clain it or is not identifiable.
' Imposiljon of penaltv eouivalent to the amount oi profiteerirì8.
.
Ca ncell¡tion oi r"gi#udor,.
Union Cabinet has on 16ù November, Z01Z clea¡ed the setting up of GST
\'.rl.ional A¡ii-prþfiteednt Aurhority (Naa). The posi oi Cniirliä'u.,a .^u¡n¡"r.
' 'i the-¡uthor¡ty lì¿ve beefl createcl
þaving rhe _"y f.,
"r,i-låriiy'io
be functi.,,ral
soo. Ideally Govemment shrourd_have sãt
"p
r.JÁa
^".n ""ìl,"']r"
..,.,".,,o"r,
,' lhe ul timate s uJferers of priee-hjJ<e jnlla
tion and ;;;
"
;;;;;;""r*S.
Q. 6. How-is. anti-profiteering authority, an authority iã i"î"ilì
"or,",rrrl..r¡Ans, Authority to benefit Consumers. ffl" Nuil""¿
--¡,r,ti_profiteeri¡g
'1ùthority is â,.' assu¡¿Ínce to consunìers. rf any
"orr"rr*",
¡".i, ihiìenerit o¡ tax
:_Ì:"",:ij:,"_:.::::^c,pj"^"1:
on, he.can .o-itui,, t. rh" .;;i,";;;. rh" bJyl;
ììrnaated to ensure that the benefits of GST ¡ate ¡ecluction is passed on to
cor'ìsulners.
The five-membe¡ anti-profiteering authority will have poh,er to ask those not
p.ìssirÌg on the tax benefit to rehtnihe unduá profit earniã io
"or,".,-u* "r.r,g
,,ì.ì.r ......,:iri:,ìr .: :i::::,, qHAryF?j!.s+c!ÁÈJRoVSrdNs ¡ loa
with ar-r.18% irìteresi, ¡educe prices and if tlre cor.rsumerìs not identifiable,
cleposil the amount i¡l a ConsUnte¡ t4,clÉ¡.e Funcl.
In yet anothe¡ move, CBEC has issucd an adviso¡y to major colìsumet ptocluct
ma¡uJJcLurerc to ensule that price reLiuction ,f,ouía trt"'pio."- rn¡'.hereue¡ ,ates
nave þeen lowe¡ed so that benefits may go io consume¡s. Restaura¡ts ale one of
such examples
.i
/he¡e there are compllints ot norr_po*i.,g''oiihe benefit to
consur''eÌ.s. Except ¡estâurants in big lìoteìs, GST has úeen lJwe¡ed jiom
1g% to
jrÌst 5% with no ir.rput tax creclit béncfit.
Companies will have to ensure that l.ctaile¡s ancì dist¡ibution chain pass orì the
cST cut benefit to consume¡s l,\,ith irnmecliate effect. N. a"L"f *iät"
"ttowed.
It
is tlìe.co¡npany's responsibility [o erìsuÌ.e that its eÌìti¡e retájl cÌ.rai¡r fol]ows its
di-¡ectives on prj.ing. If a h.ader is not >" t.g u goåJìi r"rri."äviT, ,n.., tr," ,r,"
:ïÌl::lÌfj,l?
jj-.ie
.co,ûpany. ,rr
rvlÌl lavJ toiespond to itre Ànti_p,orit.eri,,g
¿\ur/lotrty. Ìn ttus ¡ction ca¡ only be takcn againsi organized plavers as they arã
tLre oncs wlìo decicle MRp.
The setting up of NAA has been expecrited in viel^, of the fact
.ìat
nìany
t¡ade¡s and businesses have faiÌed to pass on Lhe benefit to corìsunìers. Activation
.::",1ï ï.;-':t:l
in the,ta\^r rni¡¡ht have Lreen avoicied, noá t uJ" ana ina,,"t y
passed on the elimjnated cascaditìg of Laxes to consumers by way of lower prices.
t+ 5.3 Avoidance of Dual Control
A taxable- person is requirecl to pay botlì CGST and SCST. Thus, for same
L¡a¡saciion, he wiÌÌ ha¡,e to face tlyo authotities.
.fhjs
will make his liJe rniserable
as t\vo, ¿rutlrorities mry fake difÉcrent vie.,. on saùle tlansactions. He *ill face
wrrn cruar assessments, duar ¡udits, dual de¡ra'ds e|.. The¡e will be tno
revisions, tç1'o reclifications and t.n o appeals.
Such dual control is unwo¡kabÌe. A taxalrle person shouìcl be unde¡ one
autho¡ity
-
either. CeDtre or State. This 1.¡as been ugre"¿ ,,por, ; èST Coun. .
Priìrciple of avoidi^g dual conL¡or is Ìaudabre.
'Howe,]e",
io* uir.,r"^tio. or
taxable persons la,ill be made bet\^,een State ancl Cenh.e is not clear.
IL seems such bifùrcation tvill be done on rarrclom Uuri". ti
"ã,
tf,i" wiÌl leâd to
chaos; ln.case^ of taxable persons having multi_state Ir""irl"*"r,'ìï"y
-"y
U"
assessed by state Governnìent autho¡i'lies in sonre states uí¿ u,, c"rlo",
covernmenr aurlÌoriries in sorne othe¡ Srates. This _iiL r"J' _ã, aii"riîi
author.ities taking clifferent view orr sar¡e h-ansactions. Ideally, taxabie persons
lìâving multi-stare businesses (including i"l""o*, i;";;;;J) and those
predorninrnt¡y in e\port and import fierd shourd be under .oni-or ol c"nt ul
Government
^
lndustlies and businesses restricted to one State should be under conbol of
State :Gove¡nrnenL, This wilÌ ensu¡e avoidance
"f
.."tfl"tlng-
"i"ws
by tax
authorities on sarne issue.
¡+ 5.4 E-way Bills
Applicability. Every registerecr
^person
who causes rnoveDlent of goods of
consignment value exceeding {50,000 (however the registereà pe.son or, u" th"
,$i-.ffifi.Tl-ïi,:.fiffi
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55. 104 E SHIVA DÈLHI UNIVEÊSMI SERIES
casè may be, the hansporter
-ay,
at his option, generate and carry the e-r,vay bilJ
even if the value of the consignment is less thân t50,000).
P¡ovided also that where the goods a¡e hansported fo¡ a distance of less than
ten kilomekes withlì the State or Union ter¡itory froûr the place of business of
the consigno¡ to the place of busi¡ess of the transþorter for furthe¡
the consigno¡ to the place of
tra¡spo¡tation, the supplie¡ ot thetranspo¡tatron/ the supplie¡ ot the transporter may not furnish the details of
conveyance in Part B of Fotm GST EWB-01.
Folm GST ËWB-01 contains two palts as follows:
1. PART A: INFORMATION ABOUT THE GOODS
. GSTIN of Recipjent . pfàce ol Deljvery
. lnvoice or Challan Number . Invoice o¡ Challan Date
. Value of Goods .
HSN Code
.
Reason fo¡ Transportation " T¡a¡sport Document Number
Every registered pelson who causes movement of goods of consignment
value exceeding T50/000-
(i) In ¡elation to a supply; or
(ll) For reasons othet thLn supply; or
(iil) Due to inward supply f¡om a¡ urúegistered
Þerson,
shall, before comûrenceinen[.'of èuchr.mòveñeiÌt, fu¡nish infotmation
relati¡g to the s-aid ggOàS.in pait a of.Èorm CSf n¡¡n-01, elect¡onically,
on the cornrnon poÍtai.
2. PART B: INFORMÀTION RELATING To TRANSPoI{TBR
.
(VEHICLE NUMBER)
Where the goods ate hansported by the registered person as a consignor or tlìe
¡ecipient of supply as the consignee, whether in his own conveyance or.a húed
one or by lailways or by air or by vessel, the said pe¡son or the recipieÌìt may
generate Lhe e-way bill in Fotm GST Ew.B-01 electronically on the common
portal after furnishing i¡Jormabior.r út pa
B of Form CST EW;-01.
.
3.-l\¡he¡e the e-way bill is not generâteJ ttñder sÛb-tulp 12) and the goods are
handed ove¡ to a t¡arìsporter for transportation by road, the ¡egisteÌed persbn
shall fu¡nish the information relating to the tr.ansporter in part
B of Form GST
ËWB-01 on the common portal and tire e-way bill shall be gener¿red by the
transporte¡ on the said podal on the basis of thc inlormatìon furnished by the
registered person in Pnrf .4 of Fo¡m GST E\{B-01.
4. Upon generation of the e-way bill on the corÌx¡on po¡tal, a unique e-way biÌl
number (EBN) shall be made available to tlle supplier, the iecìpient aÌìcl the
t¡ansporter on the common porLal.
5. Any trar¡spotter tra¡sferling goods from one conveyance to another in the
cou¡se of hansit shall, befo¡e such t¡aisfer and furLher movement of goods,
updâte tlìe del.ails of_ionveyàrìce ûÌ ihe e-way bill on the common poitaì in
FORM GST EWB-01.
P¡ovided that whe¡e the goods are transporbed fo¡ a distance of less tha¡r ten
FORM GST EWB-01
'.:..
kilonetres within the State or Union teritory ftom the
Place
of business of tire
tlansportù finally to the place of business of the conbignee, the details of
conveyance may not be uPdated in the e-way bill.
6. ln câse of muitiple consig¡ments are intended to be tra¡spo¡ted i¡t one
conveyance, the tranÀporter may indicate the serial number of e-way bills
gene¡ated i¡ respect of each such coûsi&lg1sllt
-e-lectronically
on tlìe coûì1-l1ot]
portal and a consolidated e-way bill in FORM GST EWts-O2 may be generated
by him on the said comrnon portal priol to the movement of
8oods.
7. l\4'€re the consi8nor or the consignee has not generated FORM GST EWB-01
in âccordahce with the provisions of Àub-¡ule (1') ard the value of goods ca¡lieLl
in the conveyance is more than fifty thousald rupees, the transporter sh¿\ll
generate FiDRM GST Et
¡B-01
on the basis of invoice or bill of supply or delivery
ãhullury ur the case may be, and may also generate a consolidated e-way bill in
FORM GST Eç\E-02 on the coÍimon Portal
prior to the movement of goods
ïiiil:[Ili'dii$t1úÉåi#i#åffi
FORM GST EWB-02
FORM GST E"T IB-0l BY TRANSPORTER
'.-...-".
8. Wherir an e-way bill has been'generated under this rule, but goods are either
not hañsplorted o¡ are not transPorted as Per
the details furnished in the e-way
bill, the e-1;vay bill rnay be cancelled elecfronically on the common Portal,
either
directþ or through a Facilitation Centre notified by the Cominissioner, within 2'1
hou¡s of glèneration of the e-way 8i11.
P¡ovide{l that ar.r e-way bill cannot be cancelled if it has bèen verified ir-ì. transit
CANCEILAîION OF E-WAY BILL *""*-......
Under ci¡cumétances of an exceptional nature, the goods caru1ot Lìe
t¡ansported within the validity period of the e-way bill, the transPortel may
generate anothe¡ e-way bill after upclating the details in Part B of FORM GST
EWB-01.
Note: lor the pu¡poses ol this rule, the "relevant date" shall mean the date on which the e-lY¡\
brll lús lreen generat;d and the period of validity shall be còunted ftoñ the time at'lvhich the c{!a\
bill lìas been eenerated âlld ea¡h dav sha[ be count€d âs twenty_fou¡ hours
.,,,.,., ACCEPTANCE OF E.WAY BY RECEIPIENT OF GOODS
9. The details of e-way bill generated under sub-rule (1) shall be made
available to the recipient, if registerecl, on the coÍnmon Poltal,
who shall
communii:ate his acceptance or rejection of the consignnent covered by the c-
way bill.
BILL

56. roe ¡,,qfryerhlilfrÑffi,áJd,,È3ii'qu:lÌ¡tir¡,:;i.;f,,,.:.,j':¡.,,:r.,.,,,...,.:,.,,..- .....
10. Wherç the re-cipient refe¡¡ed to in sub_rule 1f¡ ao"".,ot
"å_rr;-"";
Irr;
acceptarÌce or rejection wjthin sevehty two hou¡s of the aetaifs being ¡nade
¡vailable to him on the cbr.nrnon portal, it shall be dee¡nJ tlLat he has
¡ccepted the said details.
-1't.
Notwithstanding anything contained in lhis ruie,
requrreat to be genelated_
k)
l:_.:.
the goods bei¡g rra¡spo¡red are specified irr
13s(14);
Í11 :'T1ï" :n"
goods are bei¡g rransporred by a non_moto¡isecl conveyalìce;
{c) where the goorìs are being transported from
_the
port, airpo:,f. air cargo
complex and land customs statiìn to an i¡¡land contuinir'ã*o, o. u
.
c.rntairrer.freight staLion for clearance by Custùms; ¿nd
(r7) ùì respect oJ movement of goocls withi¡ such areas ad are notified u.de¡
clayse (/t) ot sub-rule (14) of rule 138 oÌ the Goods and Selvices Tax Rules
"of the concemed Statê
r.¡ 5.5 Zero-Rated Supply
As pe¡ Sectio¡r 2(42) of the CGST Act,
.2077-,
a supply is said to be exempr,
I5l^.t.,,i:iï"
nil rate o-f dury o¡ is specifically
"röí"J;;-;
;.t;ification o¡
":p-:-:lÌl
,"r.
*" pu¡view of tax (i.e., â non{ST supply). Bur if a good or service j"
'|
Àcr'¡Fìre(l rrorn pa),ynent oi tax, ir. càlnot be said that it is ze¡o i¡ted. rhe reason
l;.^::-]l::^:
jïl
T:_ïIï:, ""q
rper se¡vjces whjch go i,lto ih" n*ting or rn"
q(x,cr or prov¡slon ot serviae llas aheady suffered tàx a¡d o¡l) the final producL is
exempted. Moreover, wn"è-¡:,*,èr ouçut is *;;r"d" ,* i";" äo not allorn,
àvaiiment/utilisarion of ¿ìédtt on the i¡puts
+d
å;;
"är"""'"""0
for.supply
of the exempted output. Ttrus, irl a true iense,ttre
""f." ""ppìy
**"ìr zero rated.
Though the output suffers no tax, the irìputs a¡d i¡put s".iiå"i iuu" a,rff""u¿,.*
and since availmenr of tax c¡edir on inprt
"ia"
i" ,roi pur^ir-i"ä
jIüà.
"*u"
u
"o"a
bo the_supplier. The concept of zero ratilrg of suiplies aiÁs io co¡¡ect this
anomaly.
Q. 7. What is Zero Rating?
I
I
l
l
no e-vyay bill is
Alnexlrre of Rule
*:; ll^,:1".-'*lgl^1"_T:11,
,n", the entire varue chain of the s.rD¡,ry is
exerì1pt fror. tax. This means that in case of zero ratirg, noi only is th";;ip.i
.^rLnr¡t flom payment of tax, there 1..,., rrr"
^.-,,iri-ï..,-,,"::'-j^,,.
.
cxe*pf rrom payment ot tax/ there is no bar on iaking/availi¡g"credit of t;es
il::i^:::::..ir,:r-Ì11" -t""
makins/providins ,r.l" å"ip"ï
"Ïpj¡,.
such a.r
.r. .
I
.
.. : . .r : ::, : .ì : . . :. :_ì.:.,.
As already seen, the conce¡rr or
c444EB-5j-sllc'^l
P'ovlsloNs ! 1o7
*"rl ,. thu j;;;ì;'.;;;îi;ä;: '*o
ratirìt or suPPlics ¡equires the supplies as
csr i¡iì'äi" uy
i#ri!;iffi: ij:j;lï n:,ll
the suppries ro be'r¡ec or
\¡'l rrre raxes parct on tÌìe srrnpries lr¡hicrr a-¡e zero Ìated are refunded;(b) The credit of inputs/in¡ir cp¡r ices is ¡llowed;
lc) \4+rerever the sup¡ri¡s5 ¿¡¿ e,.enr¡ted, or the supplies Jre made withoutpayment of tax, the taxes
-,
unu.rirised r,''p", oì.,"iii :iirå::::
inPut' or i'ìPut services i.c. the
rrìe p¡'ovlsro s for tlte r.efund of-unutilised jtÌput
c¡eclit aÌ.e conlatned i¡ theexpr¡narion i,r settiorl s4 oi rlìê cGsT A.r, 20r7,;rri;;;ilJ .ä,;a .rs beiow:
.
"RcJutLtl'
ittchrdes refwrl of tnx ¡,
t)ottt at olt iltputs or itryut set.úi.cs,,.::t¿,,:": .Ï:,":':':!
s-tryctits. of gootts al sct?i.es ar
tnt o, ttrc stLppty of
s;od, nsn:,,.à"a n'.a: :::i::î,::i':i:/,!,,l,inì,:::j,';,,,.",,
:ø,,0,",artl¡l ,t: ptouide¿ u .ler suLtl>ettut, i:t,
lrpproach would i¡ true sehse make the goods oi
""*i"""
iuro ruiå.
.As.
p.er.the G_ST law expqús
"rê-¡nea¡t to be zero ¡ated. The zeto raling
¡rrinciple is applied in retter ùd spirit for
"*po.t"
u.,a..rffti"" t,, s¡2. rt,"
retevant provisions are contai¡eå i¡ section r6i1) .f ;h;ìcsiA:;
?01z' which
st¿rtes that '-'zerc rated 6upply" r ealirs any of the'íolowing
";;pñ;
of goods or
scrvices or both, namely:
l! 1"*,
tt'"¡t is no bar on takingJavailing'cr"¡lì .iìJ""
(n). export of goods or services or botþ or
(2,) supply of goods o¡ se¡vices or both to
developer or a Special Econornic Zone unit.
Tlr.s, eve'r if a suppry is exctìpiecl, the crecrit of input tax .ray be ava ecl for
m.rkilrg zero-rated suppties. A registered p"r";";;ä; ;;o
'ätuä
,,rppty *r,
claim refund under eiLher oÉ thc followjng op(io.,", ,.r"rnå*-
- -'"
(n) he may_ supply goods or
""""tå"'",
Uãtn-..iä,uo.a or Lette¡ of
Unde¡taking, subject to such conctitiorís, .uJ"guur;.;; procedure
as
may be prescribecl, withour payrnent nf t ,*gr;a"J iu;<
-.;l'.laim
,ef,r¡rd
of unutilised input rax credi4 or
(b) he may suppþ goocrs or se¡vices or both, subject to such concritions,
:âJeguar+
and procedure as may be pr"r"iib"d, on payment of
i¡tegrdtecJ tax arìd claim refuld of sLrch t¡x'paid on gooá; o,. r".ui.". o,
lo-i1]_supptied
in accoÌ.clarìce wittr rhe pro,Jìsions .?-õ;;;. s4 of rher CGST Act, 2017 or. the ¡ules made the¡euncle¡.
As per section s4(3) of the CGST Act,2012, any ,nut ised input tax credit in
zero ¡ated supplies can be ¡efunded. wherever *áfl
"r.lppil* "r""*ade
by using
the option of Bond / LUT.
Q.8. What is the diffe¡ence befween ze¡o_rated supplies and exempted
supplies?
Special Economic Zone
"
E\crnpt supply" ,nean, ,rrp¡1-ol
anv goods or services or boilì \.vlú.lr
Diffe¡ence between zet,o raúed sû
athâcts ril raLe of tax o¡ wlìich r¡av
be wholly exempt from tax unclei.
Section 11 of CGST Act or unde¡
Section 6 of the IGST Act and
.BsÞ4:..-1o":!elub"!_q9!ply
No tax on the outw¿rd
"*u,"p't"äsupplÌes, howc!cr. lhe input suFptics
uscd for making c\empt supplicç to
be tê\ed.
lies and exe
"Zero-rafed supply,, shall have tne
n-reanrng assignecl to it i¡ Section 16
Zelo-rqted
Ño
joi
o,itt," n,rn"ui¿irpplì".; i.,put
suppìies also to be tax free
lies

57. 1o8r. ! I sH iADËLiìi,uñ¡iÈ¡.ériV seÊÉs:ì,,
Credit of inpùt tax needs to be
reversed, if taken.
No ITC on the exempted supplies.
Value of exempt supplies, for
appo¡tion¡nent of ITC, shall ir.rclude
supplies on which the ¡ecipieht js
liab¡e to pay tax oñ reverse charge
basis, tra¡sac-tionsin securities,
sale of la¡d and, subject to clause
Arìy pcrson engaged exclusively in
the busi¡ess of supplying goods or
services ol botl-r tltat âÌe noL
liable to tax or wl-rolly exempL from
tax under the CGST o¡ IGST Act
- "¡illtg-t-b"]BÞ!"
!9 rçEt[egql
A registered p"tron r;ttit;g
exempted goods or services or boLh
shail issue, i¡stead of a tax
Credit of input tax may be availed for
making zero-¡âted supplies, even il
such supply is an exempt supply ITC
allowed on ze¡orated
Value of zero ra
added along with the taxable supplies
fo¡ âppo¡tionment of ITC.
invoice, a bill ol
Provisional ¡efund. As per Section 54(6) of the CGST Act, 2012,
gO% of Ihe
total amount of refund claime<l, on account of ze¡o-raLed supply of goods or
services o¡ bôth made by registered pelsons, rnav be sanctioneá òn a próvrsional
basis, The remaini¡g 10% can be refunded late¡ after due veriJication of
documents furnished by the applicant.
Q. 9, Is the P¡inciple of Unjust Eûichment applicãble in case of zero-¡ated
supplies?
_an¡
The principle of unjust eruichment shall not be applicable jn
case of
refund of taxes paid wherever such ¡efund is on accounts oizero rated supplies.
As per Section 54(8) of the CGST Act, 2O17, t:ne refu¡dable amoun¡ i? such
amount is ¡elatable to ¡efu-rcl oÉ tax paid on zeto-¡ated supplies of goods or
services ot both oì on iÌlpLrts ot inFut services usecl in making sirch zã¡o_rated
supplies, shall insterd of being crcdited rô rhe l-u¡d, be p¿id to"the applicàrt.
rt 5.6 Oìfences and penalties
Q. 10. Discuss the offences listed u,/s 122(1). I
Ans. The CGST/SGST Act codifies the offences a¡d cenalties in Chapter XVI.
The Act lists 21 offences i¡ Section 722(I), apaft Ír.oå the penalty prescribecl
T1:l
S-""d.L10 for availilg compounding by a taxable p".sor,'*ho i" ,.,ot
eìigible for it. The ?id olfences a¡e ¿s follow¡:
1. Mak;ng a suppLy witlÌor¡t invoice or.wjth f.ì lse/ i¡correct i¡voice;
Ä pcrson
,
exclusively making zero
ràtecl 5llpp]ies m.ry ltave to register as
¡eluncls of unutiÌisecl ITC oi inte-
g¡ated tax paicl shâllhave to be
claimecl.
No¡nral Lax i¡voice sh¿ll be is:uecl
es shall be
rirl::¡:¡¡,*rîl¡iTÍäiäiil;îËlis:tÊ,.
.oe
2. Issuing an inwoice without making supply;
3. Not payìng tax collected for a period exceeding 3 months;
4. Nob payìng tax collected in contravention of the CGST/SGST Act for a
period exceeding 3 rroz flrs;
5. Nolì deduction o¡ lower deduction of tax deducted at source o¡ rìoL
depositing tax deducted at soulce under Section 51;
6. Nolh collection o¡ lower collecti.qn of or
{ro¡f:pa)¡lnent
of tax collectible at
source u¡der Section 52;
7- Availing/utilizing input tax qedir withdut achial receip of goods and/
or:eryices;
S. Frahdulently obtaining any refund;
9. A'/âiling/dìstdbuting input tax oedit by a+ hput Service Distributor in
viollation of Section 20;
10. Furnishing false i¡formation o¡ falsification of financia_l records or fur-
nishing of fale accou¡ts/docurnents with intent to evade payment of tax;
11. FailuÌe to register despite being liable to pay tax;
12, Fuhishing false ifformation regarding regiskation pa¡ticulars either at
the tirne of applying for registration or subsequently;
13. Obritructing o¡ preventing any official in discharge of his duty;
14. TÞnspo¡ting góods witlLout prescribed docu¡¡rents;
15. Suppressing tulnoveÍ leading to ta- evasion;
16. Failiu¡e to maintain accoults/documents in the ma¡ner specified in the
,{ct or failure to retain accou¡rts/documents for the period specified in
thc Act;
17. Faillu¡e to fu¡nish information/docurnents required by a¡ offìce¡ ilt terrns
of the Act/Rules or furnishing false information/docunLents during ihe
course of any proceeding;
18. Supplying/úansportingfstoring any goods lìable to confiscation;
19. Issui¡g invoice.or doculTtent using GSTTNI of a¡other person;
20- Tafhpe¡i¡g/dest¡oying any material evidence;
21. Disposing of/tampering with goods detained/seized/attached under the
Act.
Q. 11. What is meant by the telm penalty? State the general disciplines to be
followed vrlhile imposing penalties, i
l
A¡s. Th¡¡ word "penalÇ" has not been defined in the CGST/SGST Act but
judicial pronor.rncements a¡d principles of jurisprudence have laid down thê
natuJc of a pena-lty as:
. a td¡nporaС punishment ot a sum of money funposed by statute, to bc
pald as purLishment fo¡ the commission of a certain offence;
. a
F unishment imposed by law or contract for doing or failing to do
sonìething that was the duty of a pa¡tj¡ to do.
The generul discíplines to be lollolþed. øhìle irnposing perø.Itìes: .
The lery of penalty is subject to a certain disciplinary regime which is bascd on
iLrrisprudeflce, p¡inciples of natulal justice and principles governing intemational

58. Þr
il
i,:i
il
ir
fi
,i
+')
'l
¿ii
5l
j
t
ii
t
;j
:l
I 10 ¡ sHrva Dall-ù_ñwÉìsìy sÊFrEq
t¡ade a¡d agreements. Such general discipline is ensh¡ined i¡ Section 126 of the
Ait. Accordingly-
. no penalty is to be imposed without issuance of a show cause notice and
proper hearing in the matte¡, affording ai1 opportunity to lhe pe¡son
proceeded against to lebut the allegations levelled agai¡st lìim,
. the penalty is to depend on the totality of the facts and cifcumstances of
the case,
.
the penaltyjmposed is to be commensurate with the cleglee and severity
of breach of the prowisions of the law or the rules allegéd,
. the nature of the b¡each is to be specified clearly in the o¡der imposi¡g
the penalty,
.
the provisions of th€ law under which the penalty has.been imposecl is to
be specified.
Q. 12. Whêt ate the citcumstances under which no substantial penally has
been imposed r¡nder the GST law?
^'rs.
Sectiott 726 specìÍies th.L, ifl paltículaf, rto substt¿ntiol peflalty is to be
inposed
for:
. any minor breach (minor b¡each has been defined as a viol¿rtion of the
provisions in a case where the tax involved is less. than T5,000), or
.
a procedural requirement of the law, or
. an easily rectifiable E¡istake/irmission in documents (explained in the
provided in the CGST/SGST Acr, the same shãll appty.
Q. 13. What a¡e the penalties imposed unde¡ GST Act?
,
Ans. TI¿e qtantum of perølty proa¡ded fü ín the.CGST /SGST Act arc as
follozas:
Fo¡ the offences mentionecl in Section 122(f), penalty shall be higher of the
lollowing amounls:
. The âmorj-nt of tax evaded, fraudulently obtained as refund, availed as
credit, or not deducted o¡ collected or shoÌt deduèted or short collected,
ot
. A sum of T10,000.
Fu¡ther Section 122(2)
þrovides that a¡ìy registered perion who has lÌot pâid
t¿rx, or makes a short payrnenlói.tax_on supplies, o¡ to whom tax has been
crrornously refunded, or availed/utilised ITC wrongly shall be liable lo a penalty
which will be the higher of:
For reason other ftøuil, zaitful ttisrcprcselttatioi ot sttpptession of
facts:
.
10% of the tax not paid o¡ short paid, or
. T10,000.
Fu¡the¡, wherewer
law as a¡r elrol:.âÞ,pâierit:ori,rècord) that has been made without ftaud-
rar
¡. as an elTotr:_ap,parenton:record) that has been made without ftaud_
ulent intent or
'glgss
negligence.
i:
*1..*:1.1_p:_f!ill:q òf a fixed amoìrnt o¡ a fixed percenra¡¡e has been
t:...:t:,.: .:- :.ì;_::a::::tl ll,,:r i
.,.iì,a;r.:,:. .:. i.,,r,ct-tAiú-fEF:6isFEctaLpRovisi:iNs'.!
111:rl
Q. 14. Is any pènalty prescribed fo,
".,y
-p"iLr-o-'tfì
úrun tt
"
t""u¡1"
pelson?
.Ans. Yes, Scction tr22(3) provides for le.i.y of penalty extending to {25,000 fo¡
any person who-
. aids or abets â¡y of the 21 offences u/s 722(7),
. deals in any wây (whethe¡ receivin& supplying, storing or transportmg)
with goods that ate Ìiable to confiscation,
. knowingly receives or deals with supply of services i¡ coñt¡avention of
thc Acl
.
fails to appea¡ befo¡e an authô¡ity who has issued a sumÌron,
"
fails Lo issue any i¡voice for a supply ôr accou¡t for any invoice in his
books of âccounts,
-
Q. 15. What shall be the penalÇ for a person who contravenes any provision
of CGST Acl, o4 Rules for which no sepalate penalty has been imposed?
Ans. Secfion 125 of the CGST/SGST Act p¡ovides that aÌry person who
contravenes any provision of the Act or the rules made u¡rde¡ thij Act fo¡ which
no separate penalty has been prescribed shall be punishable with a penalty that
may extend to t25,000,
For teason of frøùil, witful nìsteptesentøtiot ot supprcssion oî
facts:
. equal to tax due from such person
. {10,000
ffii
Q, 16. 14/hat is the penalfy imposed under the CGST Act on transporte¡s or
persons who stores goods in f¡ansit in conhavention of the Act?
Ans, If any peÌson tÍa¡sports any goods or stores any such goods while i¡l
t¡a¡sit without the documents prescribed under the Act (í.¿.,
-invoice
and a
declaration) o¡ supplies or stores a¡y goods that l-rave not been ¡ecorded i¡ the
books o¡ accounts maintained by him, ror i¡ conttavention of any of the
p¡ovisions of the Act, thên such goods shall be liable for cletention or seizure
along with any vehicle on which they a¡e being transpo¡ted.
Where onet comes forward. Such goods shall be released on payment of the
applicable tax and penalty equâl to 100% of tax or upon furnishing of security
equivalent to the said amount.
_In_case.
of exempted goods, penalty is 2% of value of goods or T2S,000
whicheve¡ is lesse¡.
lVhere owner does not come forwa¡d. Such goods shall be ¡eleased on
payment of the applicatrle tax and penalty equal to S0% of value of goods or
upon furnishing of secu¡ity equivalent to the said amount.
.In_
case of exempted goods, penalty is 5% of value of goods or t25,000
whichever is lesser.
* 5.7 Appeals
Q. 17. State the levels of appellate authority under goods and service ta¡
act.
--
A¡¡s, The Ievels of appellate authority in GST can be desc¡ibed through a
diagram:

59. FHrv4.9q¡!iu!{-..qF.r¡-r+Fqs
1. Adjudicating authority
This is the fj¡st level app€llate âuU,ority.
Any person âSgieved úder lhis a.t.an àpply to adjudicat¡ng ¿uthority.
. 2- APþèIlàte Tribùnal :.:.' .
': ''
It consist of Nationât or Fgid;l b€nch a¡d ct¿re bench (o¡ Area tienrh)
Appeal €an be filed ågdjnsL the order of Adjudi.¿ring ãurhoriry.
Aiorde¡ passed by scitc bench or.are¡ b€nch cãn be
_ãpeelcd ¡
thg
suircme couÌLl
App€ãl crn orìly be rnâda it thcre is substrntial qucsrion oflaw.
ordels paEsed by nationãl l,cnch shall dirccrty be apÉèaÍéd in ìh"
APPEAL TO AÐJUDICATING AUTHORITY
Q. 18. Who cari file an appeal under tlìe cST Act?
Ans. Follotoing persons can file afl appeal unrler the GST Act:
1. Any person aggfieved by tlìe order passed under CGST Act, SGST Act o¡
UTGST Act or adjudicati¡g authoriÇ may appeal to the prescribed appellate
authority.
2. The comrrrissioner may,
. on his own motion, or
. upoñ tequest fio¡n ttre Commissionet of State tax or the Com¡nissioner oI
Union territory tl\,
. call for and exâqü¡e tlÌe ¡ecorcl of a¡y proceedings in which an
adjudicati¡g authority has passed irny decision or c¡¡derìo satisfy himself
of legaliiy or propriety of the said dácìsion or order,
"
to satisfy himself of legality or propriety of the said decision o¡ orde¡. lle
may dùect any officer subordinate to hi¡n apply to the Appellate
Authority.
_.
Q. 19. Whât is the tirrre linrit prescribed under the Act for filint a¡r appeaì to
the Appellate Authority?
.
A¡s. The person aggrieved has to file ân appeal witllin 3 months from the
date of communication of such o¡der. The offì"e¡ can file an appeal rvithin 6
months f¡om the date of co¡nmunication of the said decision oi orde¡ fo¡ the
determi¡ation of sùtlì:pölîts-al.isirg out oÍ the said decision or orde¡ as mav be
specified by the Commissione¡ in his o¡der. ,{n extension of I month may be
suPlemccou¡l .
O¡de¡s pass€d by thc
l"t:i:::'l;r:' :r:i ,.: ..-rr,t.f;,tf,,,:::,r:,,'1,,,.r,r1.:,li,li!'t¡]:.:i!ii'.¡,, ¡iirìÄnË,flËtË,1.ffi.#iiflffi5È$j: l:irs,
provided if ttle appellate authority is satislied that the aPpellant rvas prevented
b)' sufficient dause lsection 107(4)].
Q. 20. l /h(l is the Appellate Authority in case of first apPeal by the Person
aggrieved or officer?
-41",
4¡y
çlerson
aggrieved by any decision or order
Passed
under CGST Act/
SGST Act/Ll"l:GST Act or an office¡ dùected may aPpeal to:
(a) Thé ()omrnissioner (Appeals) where such decision or order is passed by
ihe Addìtional or Joirìt Commissi'oneÊ-
----
(¡?)
-rhe
l[dditional Commissione¡ (Appeals) wheie.such decision or o¡de¡
is paslsed by the DePuty or Assistant ComÌüssioner or SuBerintendent
Q,21. Whht is the pre-¡equisite condition undet which an aPpeal can be
filed ulith thre Appellate Authority?
A¡$ No appeol shall be filed
w¡th the APPelløte Attthotít1l bA the persolt
aggricoad ulcss hc pøys:
(a) In futl, such Part of the amount of tax, interest' fine, fee arrd
Penalty
arisi4þ fron the impugned order, as is admiüed by him; and
(b) A sulln equal to 10% of the remaining amouÌì.t of tax in dispute arising
f¡om the sãid:o¡der, in relation to which the appea-l has been filed'
Whele the appellam-t pays the said âûtou¡t, the recovêry proceedings for the
bâlance amor¡nt shali be cleemed to be stayed.
Q. 22. Can ¡n appeal. be adiourned by the Appellate Authodty?
Ans. As p(:r Section 107(8), the Appellate Authority may, if sufficient cause is
showrÌ at anlr stage of hearing of afi appeal, $ant
time to the Parties
ol. any oI
them and adjournthe hearing of the aPPeal for reasons to be ¡ecorded in writing'
No suclr adjoumment shall be
Slanted
more tl\a three times lo a party during
hoaring of thc appeal.
Q. 23. Whht order can be passed by Appellate Authority?
Ans. l. Tlre Appetl¿te Authoriry shall, afte¡ making necessary inquiry, ¡at'
such orcler, ¿ls it itrl¡ts ìust arrd pioper, confirmin& mòaifylrrg or aruìullù1g the
clecision o¡ order appåaled ugiinst. It shall not refer the case back'to thc
âdjudicatinB authority thct passed the sàid decision or order.
2. An orlle¡ èrùrartcing alry fee or penalty or finè i¡ lieu of confiscation o1'
confiscatì.n¡5 goods of greaLe¡ value ol reducing the amount of refund or input tax
credit shall r-rot be passed unless the appellant has been given a reasonabìc
opportunity of showing cause against the p¡oÞosed order.
3. The o¡L1er of the Appellate AuthoÌiry disposing o.f the appeal shall be itr
writing a¡d shall state the points for dete¡minqtior! the decision thereon and the
reasons fo¡ lruclì decision.
4. The Ap,pellate Authority shall, where it is possible to do so,'hear and decidc
every appeal withi¡ a period of one year from the date on which it is filed.
APPEAL TO APPELLATE TITIBUNAL
'Q. 24. Who can file an appeal to the AþPellate Trìbunal?
Ans. AccÕrding to Section 112(1) and 2-
1. Any person aggrieved by the order of APPellate duthodty shall file a¡r
col¡rt shall b€ appeâled ir tIÈ supreme ¿óúrr

60. ili
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i:
ir
ìì,
tii
):.
'"1',
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i
,
I
i
i
.'
tl+,..r.,,stil¡ì¡f$i.S"N¡m,.[yi.*$.ii,i..]ì:,,rìii,.:'li;:',,ìi:
r,
ì,. r'. ,,.:.:::. .,,,r-,,,.r r ,:,
.appeal
to the appeuate tribunat. If the amount involved is less than ï5e000, ihe
appellate tribunaÌ may refuse to accept the appeal.
_^r_..]l:.
ar-":::ioner may, on hi-s own äotion, or upon requesr ftom the
r orru_rLlsstoner ot State ta¡ ot Commissionet of Union territory tax, call fo¡ a¡d
cxamine the ¡ecord of a¡v o¡de¡ passed by the appellate
,au
thority or the
Revisional Aurhoriry, to saÉsfy himself a" to ifr" t"gutiti,
",
*"Jàay ot rhe said
orclcr. He may order, direcr any office, ,,_,uorãfrài"'to
'riri'ø'
uppry to tn"
Appellate Tribunal.
.
Q.25. Wha.t is the time.limit prescÌibed under fhe Act to file an appeal to the
Appellate Tribunal?
A¡rs. Pe¡son Aggreieved can fire an appeal witl-r tn 3 io, tsfrom the date of
comrnunication of such order.
officer c.n file an appear withi.. 6 tnottths from the daté bn whiah the said
order has been passed fot- deteûnination of such poi¡ts *i"_g
"",
of the said
order as may be specified by the Comrrissio".. i"'hj;;;d.;--
- -'
. -.T"ijï.]îi :f
3.monrhs may.bc provided ro rÌìe person a8grjeved. Bur, no
cxrensron rs aitowed to a comrnission for filing an appãal.
1:lU:*", :
mea¡t by Memorarrarl- of"c.o"s Li¡.".tior,:
A¡s. On receipt of notice that an,appeal has been preferred the paÌty agai¡st
rvhom the appeal has_been prgferred may. nqiyr'iths¡andi¡g tl.rat he Dray not have
appealed against such order file; a memoran{u¡n nf ..o"i,oq""tiorrr, wi
_rin
45
:1:I'^:,"r]1.^:"::iîl ?f
notiqe, verified in the prescribeJmurur";. å;;;;;;:;,:;
rnc.oroer appealed against, An exterìsion of 45 ttnys after the õ.piry of tËe s¡id
¡criod may be provided .if 'the
appeltate aurhority"is ,",¡"fi"J äåiìrr" appe[¡nL
\v.rs prevented by sufficignt causà.
Q. 27. What is the fees for filing an appeal to the appellate triburial?
" î1i::1_f::ltïg
appeal.or restoration of appeai shair u",iroòò ro,
",,"ry
<t
rrK¡ or,¿mount rnvolved subject to ma\imum of a25,000.
---Q,
28. What is. the pre-¡equisite condition .rrr¿., *t i"t an appeal can be
filed .úrith
Appellate Tribunaì?
*::
l,t :l!"",
t,hølt be filed unless the petsott aggñeued pays:
fr¡) ln rut, such paÌt of the arnou¡t of tax, interest, fine, fee alrd penalty
, .
arising from the impugned order, as is aamittea úv himi¡na
(r) A sum equal to 20% of the remainìng amount of ta in dispLrte, in
addition'to the ainou+t par.d. r: tt
"
appË
"t
e"ìhàrif ìri*g f"orn tn"
said order, in relation to which the aipeut ¡,u" O""rriliåa.
'-
where the appellart has pa.id-Jhe_.e rrto".,i,'*," r".o,r"f
f räeeaurgs for the
bJìance- àmount shall be deemed to be stayed.
Q. 29. l¡uhat Order can by passed by appellate t¡ibunal?
A¡rs. The Appellate. Tribunal, after giwlng the parries to the appeat an
o¡rportunity of being heard:
' may pass 0ide¡s of confùmin& modþing or arululring the decision o¡
order appealed against, or
.
-uI
refer the case back to the Appellate Auilrodt),, o¡ the Ilevisional
Authority or to the origi¡aj adjudiiâting authorjty, '
|: r,. , ,
1 ,. .t, t,::rr.ii:r:lì l.rr''.::r,l:._r ì I - .,:
..
..
j,:cijAfJTEF.S:-lFlFgq!
flq{gpltg
r...t1E
.
. . with such difections as it mây thi¡k-fiC-4oræ-f¡esh adjudication or
decision afte¡ taking additional evidence, if necessa¡y.
_
Rectification of order. The Appellate Tribunal may amend ary order passed
by it so as to tectify any apparent error, if such error is noticed by it, o¡ is biought
to its notice by the Comrnissione! or the Com¡nissione¡ of State tai o. ihe
ComÍrissioner of the Union ter¡itory tax or the other pa-rtj¡ to the appeal within a
period of 3 months from the date of the orde¡.
Q. 30. What is the Period of disposing of appeal by the Appellate Tribunal?
Ans. The appellate tribunal shall, as far as possible, hea¡ and decide every
appeal within a period of 1 year form the date on which it was filed.
Q.31. Can additional evidence be produced befo¡e the Appellate Authority
or the Appell¿te Tribunal?
A¡rs. 1. The appellaint shalÌ not be allowed to produce before the Appellate
AuthoÌ'ity o¡ the Appellate Tribunal âny evidence, whethet oral or docunentar¡r,
other than the evidence produced by him during the course of the proceedings
before theãdiudjcating authority or, as the case Ãay be, the appe aÈ Authori-ty
except in the follo\a,ing cûcumsta¡ces, namely:
(a) whe¡e the adjudicating authoriry o¡, the Appellate Authority has refused
to admit evidence which ought to have been admitted; or
(b) where the appellant was prevented by sufficient cause f¡om producing
the evidence which he was called upon to produce by the adjudicatin[
authority or, Appellate Authority; oi
(c) whele the appellant was prevented by suJficient cause f¡om p¡oducing
before the adjudicatiÌìg authority or, the Appellate Authirity ani
evidence which is relevant to any ground of appeal; or
(rI1 where lhe adjudicating autho¡ity or, the Appellate Authority has made
the o¡de¡ appealed against wiihout giúinB suJficient oppodunity to the
appella¡t to adduce evidence ¡elevâÌrt to any ground of appeal.
2. No evidence shall be aclnittecl unless Lhe Appellate Aulhoriiy or the
Appellate Tribunal teco¡ds in w¡iting the reasons for its admission.
3. The Appellate Authority of the Appellate T¡ibunal shall not take arry
evidence produced unless the adjudicating authotity or a¡r office¡ authorised in
tl1is behalf by the said autho¡ity has been allowed a reasonable opportunity_
(a) to examine the evidence o¡ document o¡ to cross-exami¡è any witness
produced by the appella-nl or
(b) to produce any evidence or any wiLness i¡ rebuttal of the e\¡idence
produced by the appellant.
4. Nothi¡g contained ìn this rule shall affect the power of the Appellate
Autho¡ity or the Appellate Tribunal to direct the prôduction of a¡y document, or
the exarnination oÍ anv witness, io cnable it Lo diqpose of the appeal.
APPEAL TO HIGH COURT
Q, 32. Who can file the appeal in the High Cou¡t u,/s U7?
Ans, Aly person aggrieved by any order passed by the State Bench ot Alea
Benches of the Appellate Tribu¡ìal may file an appeal to the High Cou-rt and the

61. 1i6 E sú¡vaiùrt qNrvËi$r,ff sEBtEs:. .
. -r:;i:::.,.,,..rr:t.
. .
Hjgh Court mày admit sr.rch appcai, iJ it is s¡tisfied that tlìc case involves.ì
substa¡tial question of law.
.
An appeal to rhe Hith Court shalÌ be filecl in FORM GST ApL_08.
. The grorutds of appeal a¡d lhe fo¡l.n of verification as contained in
FORM GST APL-08 shall be signed jn the marÌner specified.
Q. 33. What i6 the Time linrit for filing of appeal in the Àigh court? l
Ans. Appeal shall be filed r^riihirr lB0 days of from the date on which tl.re olcle¡
appealed agair¡st is teceived by the aggtieved person. lt shall be in such fo¡m,
ve¡ified in such mânner as may be prescribecl. The High Courb may entertain an
appeal after the expiry of the said.period if it is satisfied that therc;as sufficient
cause for not fili¡g it
.vYithin
such period.
APPEAL TO SUPREME COURT
Q. 34. Who can file an appeal to the Supreme Coüt ry's 11g?
AIs, An appea-l shall lie to the Supreme Court-
(a) from any order passed by the National Bench or Regional Benches of the
Appellate Tribunal; or
(ú) from any judgment or order passed by the High Court in an appeal made
unde¡ Section 117 in any case r4rici! on lt" or"., motion or on an
application made by or on behalf of the partyragg eved, irn¡nediately
after passing of the judgment or order, the Higiôóurt ce¡tifies to be a fit
one for appeal to th.t*.t:ä:
Cusronns Lnw
h+ 6.1 Customs Law
Dfiflitiotts
Goods [Section
2(22)]. Goods inctudêi . -.
(i) Vessels, ai¡ciafts and vehicles
. ,, , . ...
:r. :.'ti...
(iii) Bag¡1age
(i¿') Curr'ency aJìd nègotiable instruments
(o) Any other kind¡'i{ititir;, â, b.ìepi5ÞerW'
Dutiable ]þoods [sectió-i¡2'(14)]:Dutiable
goods means any goods
. whidh aÌe chargêir:tilè to duty, and
. on which duty has not been paid.
Duty lsection 2(15)]. Duty Í earts, "ø duty of custons le¡¡iable undcr Custottts
Export goods, It means, " any goods Tohich øre to be taken out of India to a pløce
outside India -
Goods brought neør Customs area þr
exPort putPoses will be' etporL
goods
'.
Imported goods. It mea¡s, " any goods btought intÐ Indìa ftom
a
Plûce
oltlside
llxdia, but d.oÉts not incltde goods uhichhaoe been cleared'for hoÍLe corsutnptìofl". Íl1]Js,
once goods äre cleaÌed by Customs Autho ties from Customs aÌea, these a¡e no
longer imported goods. "India" includes the te¡ritori3l waters of India. Territo¡iâl
waters of India which extend to 12 nautical miles into the sea f¡om the
appropriate base line. Goods are deemecl to have been imported, if the vessel
ente¡s the telritorial waters of lndia. lndia includes not only the surface of sea in
the te¡rito¡ial wate¡s, but also the air-space above and the ground or at tl.re
bottorn of the sea.
Customs aJea. lt úe.tns lhe area of n Ctßloms station and i.nclud!.s aüy or.a itì
zuhích inported goods ot etport goods ate ordinnrily kept beþrÞ clearønce by C slons
aulhor¡lics.
ffi
q,.ã

62. 114 5 EHMA BElJll:qNt-lEîQFy SEFrEs .:. . . .t . I
Customs station.
,'It
means any Customs pott, Custons aírport 01. lt1t1il CLtstot s
'ttnt¡on.
Coastal goods, Coastal goods r'¡le:àt1st
,,goo¿ls
otlter thalt ijnpol.tei[ goods h.a]rs-
1\,r.feJ,¡u n L)essel lro one port of lndia ta nrothcr port of India,,.
lndia. lndia i¡cludes the territorial wate¡s of india (i.c., a portjorì of sea, whiclr
is adjacenh to the sholes of India; 12 nautical miles f"àrn tfrå ¡u"" irr.,u. Expo¡L is
complete when goods cross te¡rito¡ial waters and l¡npotL ia ao*pl"t" u"
"oon
u"
gtxrcls enter territorial waters. sove¡eignty of rndia'extends iá the te¡ritorial
waLe¡s and to tlìe seabed and subsoil underlying and the air_space over the
L1 ¡lers.
Indian C¡rstoms waterc. It means,
,'tlæ
uaters extending into the sen upto the limit
of cdntigLtous zone af Indiø and includ.es iny b,ty, gtLtf, harbíur, ,,r""i or't¡A r¡uu".
Customs waters include -te¡¡ito¡ial wáters ai welt as contiguous zone. lnclia¡r
Lelritorial waters extend up to 12 nautical miles from the"bás; line whe¡eas
contiguous zone extends to a further 12 nautical miles f¡om the outer limit of
teûitorial wate¡s, It means the Indian Customs wâtets extend to a total of 24
naurical miles f¡òm the base line.
[1 nautical mile = 1.1515 mites = 1.853 kmsj
Exclusive economic zone, It extends up to 200 nautical miles fro¡n the base
lirre. ln this zone, tndia has exctusive righis to exptoit ii;.;;;;;;,,. purposes
(like oil exploratioi, power generatioru lishin& ;i..r"l ,""";;;;;and scientific
research).- Beyonct 200 naulical miles, the a-¡ea is t ro*r, ,"-frigf, seas. .A.ll
.ountries have equal rights in high seas.
.. .i:îijli::.,
c"*"..,lf
Tuî*,
"ãny
soods the import or erpoú of zottich is subjecr to
tÌ,ty,prohÌbthon under
-this
Act ot any other law
for
Ilrc time beilng in-þrce, bt,t if dòes not
,,,,-:.':,r:,::y t::1 good.s i,n rcspect
.of .uhiclt.the
condí!íons subiect ro wtich tie goads are
I'tnn tctl to 0e tmporled or elported haue been cotnplied roilh,,.
.
High Seas Sale (HSS). It mea¡ìs, ',sale of good.s by transfei of docutrcflts beþre
iltnrancc of goods
ftottl Customs, .
.,
In case of_high seas sales, price charged by the impotter to buyer lvould fo¡m
tlre assessable value. The invoice issueJUy the foreign s.,ppti", ø'tt .l-port"" i.,
-uch a case is not relevant,
Taxable Events. Goods become liable to impo¡t duty ot expo¡t duly when *
'
impo..is complete as soo¡ as goods enter into the te;itoriar watersj a¡d. expo¡t is completg ody when goods closs te¡ritorial r¡,aters.
$ 6.2 Types of Customs Duties
Q, 1, What a¡e the diffeie_nt t¡¡p_es of Customs duties?
.,
O:.,.t. Basic customs duty- It is iãviõä unde¡ the provisions of Scction 12 of
Uìc Lustoms Act and Section 2 ol the Customs Tariff Act. Normally, it is levied
.rr à percentage of value as deterrnined
"¡,
illçj.' "
Rates of basíc custons dut!|. The rates at whiclì Customs duty slìall be levied
:1t.1:.
tl."_CTjr_*s ¡\ct 1962 and specified i¡l the Firsr una S""o'r,J Scheclutes of
( Lrsroms tarrff Act.
,,-!:!::irr:1, :"r:
of ¡tuty...Lf Lhe
t_oods a-Ìe imported from rhe prefcrenhat area,
r |lc pretercnbal rate is applicable. cent¡a] covernmen[ notifies preferential area
äi"f;i:Ïå:Í"i'.",""^t":"tt
in respect
'r
i'p;;;;;;pect
or imports rrom
2. Additional duty of Cusroms..t,::
:{*".:1,"9__a.unrerv¿iling
dury (CVD).
Aclclition¿l duty is levjed u,/s 3(1) or urtorns lariff Act.
r, Þpecraj additional duFv of Customs
lsection S(5) of the Customs Tã¡ilfActl. This duty is know¡ as Soeciil
_cVq
tCor"r"r"uili"Uï"f¡.ìi, ,^
"oo,no"
to the basic Customs dutv anrj c
TatifÍ Act,1g7s.
\Ð leviabte u,/s 3(1) ¡¡rìd 3(ái of rhe customs
C\¡D a¡rd special CVD wer.e earlieÌ imposed to cou¡tervail excise duty and
Y.1Lt1":
rax respecrively. Now, rhese duties h;;;;;.;îåd
by rGSrexccpt on.items which are subject to e\cise duty.
- "-!¡¡ ¡!v,qr
l\ccordmg to Section 3ln of the.Customs Tariff Act, any article which isimported inro t¡dia shall ue iia¡to ro.tcst at su.h ¡ar" ;1,j.; i, Ëu,ìr," ,y. , o,IGST Act on a like a¡ticle on its supply in India.
IGST shall be calculated on the aggregafe of:
.
Assessable value
.
Basic customs dutv
. ^.
€ducation
""r,
ur,á
"c.or,d*y
artd fugher cducation cess.
4. safesua¡d Dury Secrion 8B of the c""d;; i;;;:;.
"""
(d) Cenhal Gove¡runent cajn i
that_
impose the safegua¡d duty if it is sâtisfied
. any ar.ticle is inported in large quantitiesi and
. such increased importation"is caustrf'or ìfueatenirg to cause
.., _ ,
t""-:. i¡iury to domestic indushy.
tø., rnts duty is applicable only for certain a¡ticles in respect of which it isimposed.
(c) This dr¡ty is in addition
goocls.
to any customs duty being imPosed on the
(d) Central CovertuTìent mav.also impose a provisional saJeguard duty tillfjnal dererminarion of sãfegu.'d ä,t ;.h;; ;;;;',iiãri,l , ro,." ro,
maximum of 200 days.
(¿) The duty, once impôsed, is. valìd for fou¡ years, unless ¡eyokecl ea¡lie¡.
rhis ca¡ be exrendcd L¡v rtre cenrrdt ¿;;;;ili, ;T,'t'o'tar perioa or
,,
"safeguard' duty carrnoi be rno¡e than l0 years.
No saleguatd. d t!.t ilt certaifi cûses:
' unless specificalry made appiicabre i¡ the notificatiorL the a¡ticres
imported.by a 100% Export oiient".t u"it ;;J;;iå'rä r..a" zo."ôr a Speciat Economic Zone sha
""r
b".tj"bf J; ;";_i o"r".
"
f]o
s:rch..dyty shall be irnposed. or à_rticles jmpo¡red
fio* I a"u"lopilg
li,i.lp:r,l!::i:,:
or inrporr or rh¿r a,r¡c¡e aois nãie"cle.dì";, or rf thedrrrcre É ¡po¡Led fronl more than one countries, then agglegate of
lili:lïj:.il,:i"Jch
counrries .ro""
"ot
u;:;;;;; ;;; imports or
specific søfeþøtd dutu otl i1,'potts
frotn china- central Gove¡nment ca¡impose Lhe hansitionat präduc sjegu".â a".y u iii"
"uìi.ä,;"^i:

63. 12t). ¡ssve,on-ÈLu¡rnmnsr¡v srnres ,ì , 1, , .:,
,,
:J.i:,-
'i]'ll
:i:ìå
âny ârticle is imported into lndia i¡ i¡creased quarltities
People's Repu blic of Chi¡a:
. sìrch ìncreased import is causirg or threâtening to cause harût to
domestic industry- [Section 8C(1)]
5. Protective Duties. These duties are imposed by the Central Government on
the ¡ecom¡nendation of the Tariff Commission. The purpose of this lely is to
protect the inte¡est of lndiân i¡dustry. This duiy is irnposed 1y's 6 of Customs
Târiff Act.
6. Anti-Dumping Duty
DlLhtping. Vvhen a country clumps ils goocls in another counby at a much
cheaper price tha¡ the norn1al price thereby unden"¡iting the pdce of the goods
i¡ the domestic country and sells these goods, it is called dumping. The intention
behincl dumping is to cripple the domestic industry of inìporting courìhy or to
dispose off the excess stock by lhe exporting counh'y. It is conside¡ed an u¡fai¡
tlade practice arld not an act of protection.
Aflti-dùrnpittg Drr{,r, This duty can be imposed by the Central Gove¡nment
unde¡ Section 9A of Customs Act. The puÌpose of this duty is to avoid dumpi¡g
arld to protect the domestic iÌrdustry. This duty is in addition to âny other duty
chargeable u¡de¡ this Act o¡ a¡y other law for the time being in force.
The anti-clumping duty shall not be leviable on artiales imported by a lOO%
EOU or a unit in a F¡ee Trade Zone or Special Economic Zone, unless the
notification specifically makes it applicable for such unils.
Qutt ttrrÍ of dunpitg ùul!. The quantum of alti-dumping duty will be
durnpirtg maÌgin or i¡jury margi¡r, whichever is lor,r;er.
Møtgín of dunpìng.lt mea¡s the diffe¡ence between nor¡nâl value and expo¡t
price (i.e., p¡ice at which goods are expo¡ted).
from the
lnjtary
.
rnargifl, It means diffcrence between
industrv ând landed cost of the impo-rted pr-odu,
Anti-dumping action can be taken onl)' when there is an lndia¡ industry
producing "Like arlicles" when comparccl to the alleged dumped importecl
tustq¿ ând lancted cost ot the lmPorted
Pr-oduct.
Anti-dumping action can be taken onll' when there is an lndia¡
ustry. ând landed cost of the imported fro(lucl
goods.
* 6.3 Valuation
Customs duty is imposed on "value" often called assessable value or Customs
value on percentage basis.
Section 14(2) empowe¡s CBEC (Cent¡al Boa¡d of Excise a¡d Customs) to fix
Ta¡iff values of imported goods or export goods by issuing a notification.
Customs Valuation'on the basis of transaction value. Section 14(1) of
Custom-s Act states that "value of exported arid imported goods sha1l be the
"tra¡rsaction value of such goods".
In case of export goods, transactron value shall be-
. the price actually paid or payable for the goods;
. when sold for¡¡:go¡-fgm Indiai
. for delivery at the time a¡rd place of exportation;
. where buyers and sellers of the goods are not related; arid
"
price is the sole conside¡ation for thè sale.
In case of imported goods, the trarsaction value shall be-
' the price actually Paid
or
Payable
for the goods when sold for impo¡t to
I¡rd ia;
. for deliverf at-the ti¡ne arid place of imPortation;
. where the buyers and sellers of the
Soods
ale not ¡elated; â¡d
. p{ice is the sole considerafion for the sa-le.
Addition6 to t¡ansaction value. SuéÎ-FñsãðE-dn value shall also include in
addition to the price as aforesaid
-
(i) Cost of conlainer, cost of Packing and co¡nmiósion {excePt buyi¡.g
commission) which was obligation cf sçller brit
Paid
by buyer.
(ii) Arry obligation of seller but paid by buyer.
(iii) Cost of any material, components, tools, dies, moulds, iigs
and desigrr
and engineerìng sketches provided by buyer.
(i?,) Royalties and licence fee related to import payable by buyer as a
condition of sa-le.
(?') Value shall not include post importation.
(ai) Value of iúrpo¡ted goods shall also include éost of tra¡sportation,
loa,Jing, urrloading, ha¡dling charges a¡d cost of insura¡rce.
(?li) ff cost of tra¡sportation/fieight is not ascè¡tai¡able, it shall be 20% of
free on boa¡d value (FOB). However, if goods are imported by air, it shall
not exceed 20% of FOB value.
(?riii) La¡rding charges includes all charges to bring the goods fronì board of a
shilp o¡ aircraft to lând mass of India. It shall be 1% of Cost krsurance
Freight (ClF) value.
(lt) Í cost of insu-ra¡.ce is not ascertainable, it shall be 1.125% of FOB value of
goods.fail selling price in domestic
(4 Only those experìscs which aÌe relat€d to irìPorted goods alone cân be added
(it For p¡ica detcrminatiorL the ¡ate of exchange as in fo¡ce on lhe date on w¡LrcìÌ bill of cnLry
is presetned u/s 46 or shipping biü o¡ bil of exPort is p¡esented u/s 50 is to be conside¡ed
(iii) Rãtc of exch,tnge \4/i-tl be determined by CBÊC from dme to time or ascerta.ined in such
maìner ås CBEC ûìay direct.

64. l
.l
:4
ï
ìirl
1 22 s SHTvADELHt¡rll¡l!¡¡¡r¡:seBF
Sol.
Aàùl
Aàà:
FOB value of equipment
F¡eight Chârges
Tra¡sit lnsura.nce
Selling Exp€nses
Total CIF Cost
Landing Charges (1% of CIF iralue)
(i) Freight chùges hâve b€en inctuded.
(t,) Developmenr charges paid in tndia €xcluded.
(itt) Insurance charges for tra¡spo¡ration f¡om Japân is inctuded.
(i?, selling expenses (comission payable fo Agent) included.
(¿,) Lmdi¡g clìases @ 1% of CrF inctuded.
:ç 6.4 Self-Assessment of Customs Duty
Self-Assessment of Customs duty was inl¡oduced in 2011 by the Firance Act.
It is applicable for both import and exporr and the procedure ij the same for both
rc\lìechively.
S e II- As s e s s n eÍ t p ro ced.u re :
(l) lmporrer importing.,goods has to submit biit of entry u/s 46 of the
Customs Act. Eip-oiGr is,¡equi¡ed to submit shipping bilt at the rime of
export ds 50 oF-íiretusìomJ nct.
' '- :
(ii) Bill of enlry should.be elecuonicâlly submi{ted in all cases.
(ii¡) The
_impo¡ter/expo¡ter
should seif-assess the duty leviable on such
goods.
(ia).Ttre seÌf-assess¡nent ¡nay be verified by examining of the geods by a
proper officer. The officer may examine the contract, insurance policy,
broker's note o¡ any other document whe¡eby the duty payabl"
-uy
Éu
asce¡tairìed.
(a) The proper offrte¡ may re-assess the bill of entry after such verification.
CHAP.IEF 6: cLÀS.iÐMS LAW E izs
tÐ :6,5
Customs Procedure
-
Impo.t o-rra-E*r[#-
L¡Ìpo¡t. It rnea¡s, "bringing o/ gootts
.fta,tl ntly
lùnce
oÙts1de I dn into jndia,,.
Clstoths areø. It neatls, ',.the nren of custolti ifntion and íncluries an.y tùea ujhete
ihtp,oxtcd goods or cxport goocls n.re aí.dinarily ke2n penclíng cteirøtce Uy Custorns
authoritics" .
-
Imported goods
[Section 2(25)]. It
''.,eans,
,,tttty
goads Orr,,fr,, ,]?:;l;ri;Y:)
place Òutside Indin but does itot inchttle goods, tirilch htne bien clearcd
foí
lrcnte
consuntplion".
.
Importer. Section 2(26) i¡r ¡eÌaLion io any goods at an)¡ time between their
imporlation and the time wlìen they are cleareJ for home cânsumphon, includes
o"y_.:ytr-"I or anv persoD holding hìnlself out to be the importer.
,
Bill of lading. Bill of Ladir6 gir.en by the carrier of the
foods
is the importer,s
clocument of title to the goods. The Bill of Lading coverã all the detailÀ of the
goods inìpo¡ted with full descriptior.r
Warehousing Stations. Impo¡ted goods can be sLo¡ed in public o¡ pdvate
wa¡ehouses
lending payment of duty. Imported goods
"uir
be clea¡ed on
payment of duty in i¡stalments up to one yeal.
It nray be a Public wa¡ehouse ús 57 wlrich is Ijcen:ed bv comm$sioner or
proper officer for depositing dutiable goods alld ur" ,r.ru,.,u¡¡"j by public boclies.
P¡ivate wa¡ehouses are mañaged by individual importeìs.
¡.t 6.6 Impott Proiedure
_
Bill of Entry, Impo¡tq impo¡ting the goods is ¡equtued to submit the Bill of
n¡tV- elgct oni¡aly giving details of goods to be clea¡ed from Customs
(Section 46). Bill of Entry is noreJ by Customs Offjcer.
Whgn jhe Bill of Entry is filecì elect¡onically, it is i¡ four copies:
(a) Oiginal-neaÁt for CustoDìs autho¡ities for assess¡ient and collection
of duty.
(b) Duplicøte
-infended
as an autho¡ity to the custodia¡ of the ca¡go to
release cargo to the inlporter. from his custody.
(c) T riplicøte
-
as a copy for record for the importer; and
(cl)
Quød.tupliêate-as a copy to be presented ro the Bank o¡ RBI for the
^ -
prryo"._of
^aking.re¡nittance
for the imported goods.
Submission of othel docunents- Documents requfea-by CustomÊ authorities
are required to be submitted by the importer to enãbÌe theí to:
(a) check the goods;
(b) decide value;
(c) classification of goods; and
(d¡ to ensue that the import is legally permitted.
Import General Manifest (IGM) or Import Report. person_in_charge
of vessel
or ai¡craft has to submit an impott manifest to the ptoper officer plio¡ to its
a¡¡ival. \4¡hereas the person-in-charge of vehicle has to submit import repo¡t
withi¡ 12 hou¡s of its a¡rival. 'Ihià repo¡t has detailed information for the
Custorns about the goods in the vessel/a-ircraft.
(¿¡¡) Í theIf the importer/exporter accepts in Miting the re-assessment made by
proper officer about classification/valuation/exemption/concressio¡ --
dry rer¡¡@r (Jruer a¡rses. rr not/ üte OffrCeI Shall pass a
. ... lpeahg
o¡de¡ within 15 days frorn re-assessment of bill of entry.
(zii) If goods are not takeD-l9r^ve4_iflglrtiory the goods will be âllou,,ed to be
cleared from Customs. Later the duty assessment may be audited by the
proþer officer.
(ulii) In cases importer/exporter is r:nable to determiné the duty, 1.e., make a
self-assessment, a requqst shall be rnade to prope¡ office¡ fòr assessment
of the same ds 18(a) of the Customs Act.
(l;r) In both casé.where sêlf-assessment is done and when self-assessment is
done but
_requi¡es
re-assessment the importer/exporter rnay opt for
provisional assessûlent by the p¡ope¡ officer.
p¡e1jcr uurcËr deour crassulcauon/ vatuauon/ exemption/ concess:
question òf issui¡rg any formal ordet arises. If not, the officer shall
about classification/valuation/exemption/concession,
nâ

65. ia¿- -r. sùùÁoe-'!,uN@r-nisrnrÉ¡,1,:l:.r :,. r:'.,' r:.r.,:-l
:;ii¡ti,it:|rìrilriìIîii';4.:¡,li1,r:i]l
Passenger a¡rd crew a¡¡iwal manifest. The person-in-<harge has to submit
passenger and c¡ew arrival manifest a¡ìd name reco¡d informatiôn of the arriving
passengers before arrival in case of vessel o¡ aitcraft atìd after af¡ival in case of a
vehicle âlong'with import manifest or impo¡t ¡epo¡t.
G¡ant of Enky Inwa¡ds by Customs Officer. Afte¡ delivery of import
manifest/import report or if the Custo¡¡rs OIfice¡ is satisfied that the¡e is
sufficient reason for not subnittirìg the i¡nporl manifest, Customs Officer shall
granl "entry inwa-rd" u,/s 31, It is a permission of unloadíng the cargo from the
vessel.
Entry inw-ald is not ¡equùed for loadi¡g baggage, mail bags, anirnals,
perishable goods a¡d hazardous goods.
Unloading. Unloading of cargo can start o¡ùy after the,lcustoms Officel,,
gra¡bs "Ent¡y Inwa-rds". Section 32 of Customs Act provides that only the goods
mentionéd i¡ the import manifest can be unloaded. S,gch unloading can be orùy
at approvèd places a¡d u¡rder the supervision of "Customs Office¡,,.
Payment of duÇ. Now Customs duty is paid electronically. lt should be paid
within one working day (excluding holidays) after the "Bìll of Entry,, is retumed
to the importe¡ for payment of dqty.
If duty is not paid witl in one wo¡king dayr r4tere+.is payable at 1S%.
r+ 6.7 Export Procedu¡e
Export. ft Ãeans, 'taking goodsloùt'-¡¡ lrr¿i. t;,¡'ptu"" outside l¡rdia,,.
Expott goods, lt meanË, ,"aiÌyì:goods, which are to be taken out of India to a
place outside India
Exporter. In relation tò'arny goods at any time between thei¡ entry for expo¡ù
a¡d the time when they aÌe exported, includes any owner or any person holding
himself out to be the exporter.
E ttry of Goods Íot exportøtiott The exporter ry's 50 of Cu6tor¡s Act is requùed
to present eleckonica-lly to a prope¡ officer of Customs, a shipping biu in case of
export by a vessel or by air and a Bill of export in case of export by vehicle.
The Shipping BiI afld Bill of Export (Forms) Regulation Act 1991 p¡escribed
forms of shipping bills:
These for¡¡rs a¡e as follows:
-
(r) For dutiable goods : Yellow coloui
(il) For duty-free goods : White colou¡
(lii) With duty-dlawback claim : Green colou¡
(io) Duty-free ex-bond : Pi¡k colou¡
The colour scheme ôf shipping bitls has now become
1'¡edundant
as now
shipping bill hâs to be submitted elechoniially.
Export ilecløratiorÀ As per RuIe 7 of Customs Valuation Ru.les 200f the
exporter has to file decla¡ation about fuIl "value" of goods.
:
Export ñøniÍest/Export Report. Section 41(2) of the Customs Act p¡ovides
that the person incha{ee_pf_Sg+!-eya¡ce car¡yirÌg export goods shall, befo¡e the
departûe of the conveyance from a Customs station deliver to the proper offìcer,
; iiìi;it .lt,l l
'
. '
: .' ii . 1, r.: ' ì,;'i. r.
r jri::;'1,üli:ri:;it
rr,l,),i.1ÞtrÀffiäf'Ðffis,r,rvti.ro;
r zs
in case of a \¡essel or aircraJt an export manifest a]-td i¡ the case of a vehicle, au
expo¡L reporl/ in tlìe prescribed form.
Ent4l OulLþøtd. Export goods ¿úe not to be loaded on vessel urttil ent¡y
outwa¡d is granted by the Customs Officer,
As pe¡ Section 40, the goods car1 be taken qn bodd only if they are
acconrpanìed by the Éollovr¡ng documcnts:
(l) In case of export goocls other than baggage ancl mail bags the goods shall
[¡e accompanied by
. Shlpping Bills (at seaports/ airports)
. Bill of expo¡t (at land Customs stations)
. Bill of Transshipñent (for t¡ansshipment of goods)
All duly passecl by the proper officer.
(il) In case of baggage and mail bags, they should be perrnitted by Customs
of e\port.
'No
conoeyarrce to leø7.1e I.t¿ìthou-t uryítten ordd (Section 42). The person in
cl.rarge of the conveyance which has loaded any export goods at a Custor¡s
station shall not cause or perrnit.the conveyance to depart from that Customs
station until a witten order to thab effect has been given by the proper officer.
Cleøtance of goodp for expòrtation (Section 57), After the Customs Officer is
sabisfiecl that the goods are not prohibited and the exporter ttas
Paid
the duty, if
any, he makes the order for shipment on the duplicate copy of the shipping bill.
This is known as "Let Export" order.
Differeflce betaoeen trønsit an¡l transshiprneflt of goods. Difference between
tlansit and lransshilrrnent are siven belolv
(i) Section 53 of Customs Act, 1962
provicles for bansit of goods.
(ii) In câse of hañsit of goods, goods
a¡e allowed to remain on the same
conveyi¡¡ce.
(líl) No sepalate document is required
for goods to be transitted further.
r+
6.8 Baggage
Definìt¡otts
Baggage. As per the term baggage includes "urutcompanied baggnge, but does
not ínclud.e nolot oelticles". fSectj.o' 2(3ll
Baggage is a very cornprehensive term Which rnea¡6 the luggage of.a
passenge¡ accoÌnpanied ol unaccompanied'and comprises t¡.1¡k or bags and the
personal belongings o{ tlÌe passenger. It is not only limited up to bonafide
baggage as defined in Clause 3 of Tourist Baggage Rule 1958.
rfiention in IGM
(i) Section 54 of Customs Act, 1962
provides for transshipment of
(ti) ln case of tra¡sshipment of goods,
the conveyance changes. The goocls
a¡e rmloàded from a conùeyance
(iií) Separate document called bill of
t¡ansstripment is to be filed.
and loaded i¡ anothe¡

66. 'i.
li
fiìl
iill
irr i
ill
:i,i:
+1
il
ì::j
ii
't|,
ii
il
il
i,j
I
ì'
r
te6 ¡ sr]Lv-4.,.qFi$.9ñl$Ê¡lTy_,..qEiEs,_ _r1.¡,,,,:,,:r..,:r,.:r,.,r ..- t: .
,:,..
-
Baggage iiecla¡ation
1S""tior, 24, The_owner of any baggagc hus to makedcci¡raLion of its contenti to rhe (us¡e¡¡5
orrii", r". ,ïJoli!ll"* o,
"aur,r,
,,The rare of dutv and taÌ¡ff vâluation
"rr"ll
t" il," ,"Ë'",í¿""ii,ï,,."
in fo¡ce ontlre date ofdeclarãdon (Section Z8).
,,-!tl*
Çha"."1. Ut"l u person cleclares that.he does not hâve any dutiable¡ tcm. he c;rn go thlough the ereen. cl ran¡el. f f
"
p"*ã" i, g.Lt ìtloug,n tt
"
g."unch¡nnei carrying dutiable items. he ca¡_be punuli.ed ¡o.
--fj.? j,
å
".1","t¡on.
Red Cha¡¡rel. W4-ren a person ca¡¡i"" ¿,ruåule irem", iå .r.råiia
Ju". nrrorrgfl ,f.,"rc(l ctì¿uxret a¡d should submit d*ectararion a,rJp;; ;il;d;*å Ëu,,o,n,.:r,,ry.
Rate of customs dur¡z on Bag_gage. Alt åuä;;'
"'ffiä
ì,',port"a uy ol)assenger o¡ a rnember of crew in his-bagg"g", .ro""a ; ;üã"ctive tartr rate ofìh 05qô {i..., 359. a 2.1".r 1%). Bâggage is exempt from cVD.
È,\empred Baggage
lsecrion zóirli. Ur"¿
"rri.¡ir.i'"]",.1"",
*-i personar u."
"i
pu..""g","
:Èi _"*
;::i;ï,1":"ïii;i,T"Ji;l3,".ll::ï
l\.rcoìal
-elfects
and bonafide gift or souvenirs ur" otro
"r"rn.]i.'.
ur-ty gxetnption to Baggøge u der scct¡on zal .iì¡á ërii.ms AÈt rcrers rorlìe duty lelief available in resn¿
,,,y,.,"'bj;.;;; ;;;;;',
"#'"ï:::j jlflg".r;jl
lilï;
jiî:",j:,ii:&* ;ñ;;
f¡) any article in the baggage, ot a
.passSn-qe1
0r a member ot the crew, inrespect of which the iãid offlce¡ is satisfìed thal it has b"",., in his ur" fo.slrch miÃimum period âs *.y U" spe.ifiäüï;,:;iä*"
,tt,
::{-:,'.,':,.",ti
rhébaggage of á pur"år,g.,. ir, ,;rii.iäî*¡u.1l rfe ofticerissaûstrecl that it is foÌ th
u,"Jrãì
eir, å;.ååî."#i
rä,å:j'ìî:ffi :,.9:ru:i::.,,":[:.*.,,'";
;:iJ::i,'"'å'Jït
& utt
"uåtr
a'tici"sáã;' ;;,
"i;JÏ:;'lirnits
as ,.ay
Eremption to Løptop
"r*U"rr:11:^r:na"!,computer broughì as laggage bv
:,]:ij;::t.ö
18 years of age (other than membe. år cr.o_)-irÌuìry'oÀ-nrr,r
rlor¡
Foreigrers residing in India
l ourist of Indian Origin.
Iourists of foreign oiigin
ot
lndiart_ passenger rcsiding -
aDroâct lor > 1 vear [Rule 5]
Indiân Residents
Foreigners residing in India
Anv Tourist
(Nót being an infant)
T¡ans.fe¡ of O""tU.
ffiiit:ï'i:rrfii"ïïiîiï,,: ;,ff:. "r,ul
¡" orio-?"i ä"ÇäJï,"_..*
1-
certain sDe.ifjê.I arÊ¡r-.
^_
.,-l,-
f
]'*:îl"l
and houselrold artictes (other thLeltaln
uwlF.ott of Èigi aú?9d
up tô 6 months
FroN 6 nìc,nths up to
-C|-IAEER
6:qJsro¡¡s iÀtji:a tzt
A¡ticles up to value of
?15,000 (Not being an infarri)
rvrìnrì.ìlunì stay of 1 yeãr
ourrnij p¡eceding 2 \.car
lvl¡ rnum stay of 2 yca¡
Only used personal effects
Aficles up to value Df T15,000
oir the basis of l s
.
Gentlemen: 20 gms value
cap of Tb0,000
'
Larl¡,:40 gnrs value cap of
r1,00,000
A*¡clus øuiu)ä-
fràeof,i,i,r'...
up to 3n agslegâte value
of {60,000
One laptop coDiputer/note
up to aì aggregaie value
of T1,00,000
up to an aggregate value
of (2,00,000
P¡
unaccompanied
bàggage it was ir
o¡'arr drùu aPply to
,1'.trlll,ii ;,il'.,"i:,ïiilii i ff i;ï.f î:Í.,:: Æ:ff:i,"::,::...::,,ï.1 1.
up to an aggregate value
of 15,00,000
.'"ffj:lïÍ.1*::* ;ï:i
1i
h" år;";¡iä-,;;"':; fl :,i:liï,:å."ï:,,ffi
å
.t *trh,;
".¡,*3ä;îäXX:::Jå?
ji::jiåî,'jåi"
2,nonrhs bero¡e a¡¡ivar
The urraccompanied lrueeoe" ;-,
wirhin.,,-L
^^*:^r -,,-
.
l'!ld in ìndi'r up
lndian pàssenger
,üllfií¡í.|åiìTjff ::::'""'
visirins usA
Corlditiohs
Exanple 2: X an Indiah tesidenl
goods while returni.rig ib f"diu
(a) his peisonal effecs valued at
,
(l¡) two b<itttes of R"il L.bel lvt t
-
(c) new carirera valued af T50,000
hrdia¡ passenger
l'rdian passenger who has iãl
availed the cotìcession in Þ¡ec_
f4.)'hiEÞê.íêiiià1ti+riú"'lîJ¡¿à,i¿.lnÅ¡;..l,:':".':,,:.'.,"':,,,-",i'::,i;i'i
Íilg:rTÆöl5i;ãil4lelvÞ.ri.í-+í+..¿opoi;iio
-(c)newcari-reravaluedafT50,000''"*"*.Compute the customs duty payable.
(r) Mjnjmurn stay oÉ 2 years
abroad inÌìÌediateh,
Þ¡ece_
cjìng the date of h;s airlval.
iD Total stay in India on sho¡t
vrsit duting the two
prececlirìg yea¡s should not
exceed 6 months,
i) Passenger has not âvailecl
thjs concessjon i¡ Drece_
di¡p 3 ve:rc
iiåilltll,
*ffi
I :Ir.:+i'l',',ïcrr¡if¡..:ii.1el,l". L"+q
at 130.00n.
Ì.i
H
ffi

67. ráa e slva dÈult u¡lrvEns¡ry sEBtEs
Answer. Personal effecls are exempt frour duty. Two bottles of liquar of
T2000 ca¡ be included in general l.ree allowmcå. the total öFe is å5.000.
The totâl dqtiåble irems are (T5O00O + T,.,DOO), i.c., i52,000. Aftei allowing
l"!î,.Ï,?å;lXltrr.
X has to pay dury on (17,000 o.ssv. + 37"
"¿.,.u,¡li
Þ 6.9 Exemptions
Exemptions from Customs dufy are provided through provisions of:
(l) Customs Act
(ii) Customs TarifÉ AcL, and
(iii) Nohfications.
speciøl e:tehtptions. If the centlar Gove¡n¡nent is satisfied that it is necessary
ilÌ the public interest to do So, it may, by Special Order exempt f¡ol¡ payment of
duty, a¡y goods on. which clutf is'le;iable onty undei
"ir"u-"tu.,"*
oi
exceptionaÌ natr¡e to be stated in iuch orcler. lsecdo; 2S(2)l
^
Genetual eremptionl General exempLions have been
$àniea in va¡ious cases.
Some of these are bejng given below:
_ ]mPorts
by.UN Agencies, Governo¡s, Ford Foundation, Vice
presidellt
of
India, specified equipment bv a foreigrr nen;s agency, pár.o.rof
"ti""i"
of o
deceased person arÌd Gifrs i.nForrecl by äann nnu""t
""í.,
gi"","à'àì"r''pti.".
^
Celtãin iñports by Lhe Goventl¡ent are also exerlpt"flonì the payDleùt of
Cusloms duty.
Commercial saûrples are also exempt irom Customs du.../.
,-*çÌ.*
ti,'i,i:iii
Practical Questions
Q. 1. Find out the assessessable value in the following case:
Price charged by expo¡te¡ (FOB)
Cost of tlal-rsportation to lndia by ai¡
Sol.
Cost of i¡rsu¡ance from expotting count¡y- to India
Load û ìg/ urJo¿ding chai.ges
. Computationof-Ad-sessâAfe-Value
TransaEtion value (FOB)
Cost 01 transpoilation + Loading/Unloading charges
(subject to úaxim!m 20% of FOB since goods âre tEnsported by air)
Cost of nsurancelActual)
Q. 2. Find the assessessable value in the follo$¡ing case;
Amount cha¡ged by expo¡ter (FOB)
.
Cost of ttansportation (not available)
Cost of insurance (not aváilable)
Asses!ìable Value (ClF) of the
tírtrffi r $
C.!-r4P1--E&,F.riqJqIA\4s LAW. E "r 2s
¡ddr Cost ol rcnsponalon (not available, therefore, 20% of FOB price)
Ádd: Cost of'nsurance (not ãscedainabfe, lhe¡efo rc, 1 .j2ío/o ol FOB)
FOB ptice of goods
<45,00,000
t11,00,000
T60,000
{3,000
n of Assessable Value
Addi Cost of transpod, loâding, unloading and handl¡ng charges
(<6,00,000 + {10,00,000) or 20% of t30,00,000 øt ¡chevet ¡s lowet
(Gobds are irnported by âk lherefore maximum transportatjon cost can
be 700á of FOB pr,ce)
4dd. Cost olinsù.ance (akeaoy included i1 FOB)
Asses!able Value (ClF)
Q. 4. Find the assessessable value in the given case:
PriÉe charged by exporter (FOB) {68,00,000
Cost of lransportâtion to India by Sea T2,00,000
Loading/unloading charges in lndia T10,000
CosI oi i¡¡surance f¡ont exporting country to ]ndia Not ¡vaiiablc
a
90,50,000
18,10,000
6,00,000

68. ¡
-
¡,-rv¡ SFùt gú[m¡+¡"¡ç9i,.
Áddi Co:j_of-ElToryüon by sea + Load¡ng and untoading chârges
({2.00.000 + T10,000)
/4dd. Cost of insuranc€ cover (not availâbte, lhere lorc, 1.125o/o of FOB)
Assessable Value (ClF)
I¡ansaclion value (FOB)
Q. 5. CIF Value
-
ai. t
"."f*tution
cost (Inctuded in CIF)
lnsutance cost
Find out assessessable value.
Sol. Let the FOB value = {x. CIF value
Insura¡ce Cost = L.725% of FOB = 0.01125:v
We know that
FOB = CIF - Amou¡tt of F¡ejght _ Insurânce Cost
:+ x = 714,20,OO0 - TS,0O000 - 0.01125x
L.011,25x = 79,20,00t0
-
FOB value (r) = ? 9,09,765
Q.,6..Find oüt the customs_ dufy fiom the following informaiion in r:espect of
goods imported by ABC Ltd.:
<L4,20,000
t5,00,000
Not asce¡airable
= {14,20,000
r_lsD (?)
F¡ee on board (FOB) value
65.000
Buying comÌnission paìd by ABC Ltd. to a¡
¿gent ill USA for rep¡esenti¡g X Ltd. in the
on of Assessable Jlalue
. purchase of goods .
900
Ai¡ fa¡e
Demurrage paid by ABC Ltdì.to airlines
Insurance charges
Loading/ udoading charge+åandlilg charges
Basic Customs clutj¡
ICST
SBI buying rate of 1 USD
SBI selling rate of 1 USD
Excltaì1ge rate notified by Central Boatd of Excise
ar-rd Customs
.''''.'.1'''..'
lBuyjng commrssion pad lo an ¿genl to represenl the imponer in lhe foreign
country cannol be incfud-¡l)
idd. Cost^oJ trânsport - Loading ând unloaojng chârges, hãndJing charges - DeÍuÍâoe
.
1{7,20,000 + 110,000 + {23,000) T7,S:,òOo, itiu.not.".ulo ZOi" or ¡-oe
" ''r'
Addr Cost of ¡nsu¡ance cover (Actualj
Assessable Value
utarion of assessãtlãyãiõ--
Add- Basic Customs D!iy (50% of {45,53,000)
Add: EducêUon Cess (3% of f22]65A0)
Assessable value and cusloms dutv
Add. IGST (12% or t.l7,87,480)
Tolal
Q. 7. Find our rhe
goods imported by Z
'cHr\P.¡61
6,
"r"a
s taw ! ,t3l
1r."".."
boiid v¿Lue of pldni inrporrecl iFOB) ,í;l0
l\ir fare paid to Air C¿¡go Ger¡¡,ìry
20,000
Cost of package 6ome by Z Ltd. in USA
*
ûrot included in FOB)
750
Demurr;rge paidl>y Z Ltcl. to Air Cargo
_
Germany for not liJting goocls i¡ time in Tndi¡
Lnsurance Charge5
Loading/u¡rloading
charges, hanclling charges
Basic custom duty
IGST
Sion of Tax
ïTå::-"
0"," from rhe given informarion in.espect of
7,20,000
23,000
30,000
10,000
50%
12%
60
62
58
37,70,000
7.53.000
. ..
l¡¿lsacrjon vatue
IFOB: ${95.000 r ZSOI - +58j
-......-.. -...... -....... .......'.-_- ---
Add. Cosl-of trânsoorlalion of impoded goods ro ,rd a by a ¡
(S20,000 r {58 + {45,000 + t5.0ú0J {12.i0,00ó Dür rot more ilan 2oolo of FOB
,4dd. Cosl of insu¡¿ncê cover (Actual)
Assessable Vatuê
{ClF)
on of assessable value
({)
45,000
1,35,000
.5,000
.
70%
'
72%
60
58
11,10,700

69. ,;i
32 :_r rìs¡iiir[fffir'.u¡¡¡Ê
lêtnirs : t,
Assessable value
,4dó Basic cus{oms Duty (10% of {67,99,200)
Addj Education Cess (3% of <6,i9,920)
Assessable value and customs duty
Addj IGST (12% of t74,99,518)
Total
67,9S,
6,79,