Supply under GST

Covers the provisions relating to Supply (Time of Supply, Place of Supply and Value of Supply rules), Reverse Charge Mechanism, Composition Scheme and HSN/ SAC Code classification guidelines

1. Supply under GST

2. Disclaimer 2
Theinformationcitedinthispresentationhasbeendrawnfromvarioussources(including
studymaterialpreparedbyTheInstituteofCostAccountantsofIndiaandTheInstituteof
CharteredAccountantsofIndia).Whileeveryeffortshavebeenmadetokeepthe
informationinthispresentationerrorfree,noresponsibilityforanytypographicalorclerical
errorwhichmayhavecreptinwhilecompilingtheinformationprovidedcanbetaken.
Thepresentationhasbeenpreparedtoprovideanoverviewoftheapplicablelawpertaining
tothesubjectmatter.Fordetailedinsightandforbetterunderstanding,itsisadvisedtorefer
torelevantprovisionsintheActandtherelatedrules&notifications.

3. What is Supply? 3
•Sec7(1)ofCGSTActstatesthattheexpression“supply”includes–
•allformsofsupplyofgoodsorservicesorbothsuchassale,transfer,barter,exchange,licence,rental,lease
ordisposalmadeoragreedtobemadeforaconsiderationbyapersoninthecourseorfurtheranceof
business.
•importofservicesforaconsiderationwhetherornotinthecourseorfurtheranceofbusiness
•theactivitiesspecifiedinScheduleIofCGSTAct,madeoragreedtobemadewithoutaconsideration
•Sec7(2)ofCGSTActstatesthatthefollowingshallnotbetreatedasa“supply”
•activitiesortransactionsspecifiedinScheduleIIIofCGSTAct
•suchactivitiesortransactionsundertakenbytheCentralGovernment,aStateGovernmentoranylocal
authorityinwhichtheyareengagedaspublicauthorities,asmaybenotifiedbytheGovernmentonthe
recommendationsoftheCouncil
•Sec7(3)ofCGSTActempowerstheGovernmenttonotifycertaintransactionstobetreatedas
supplyofgoodsorsupplyofservices(notifiedaspartofScheduleIIofCGSTAct).

4. Some terminologies 4
•Sec2(31)ofCGSTAct“consideration”inrelationtothesupplyofgoodsorservicesor
bothincludes-
•anypaymentmadeortobemade,whetherinmoneyorotherwise,inrespectof,inresponseto,orfor
theinducementof,thesupplyofgoodsorservicesorboth,whetherbytherecipientorbyanyother
personbutshallnotincludeanysubsidygivenbytheCentralGovernmentoraStateGovernment.
•themonetaryvalueofanyactorforbearance,inrespectof,inresponseto,orfortheinducementof,the
supplyofgoodsorservicesorboth,whetherbytherecipientorbyanyotherpersonbutshallnot
includeanysubsidygivenbytheCentralGovernmentoraStateGovernment.
•Providedthatadepositgiveninrespectofthesupplyofgoodsorservicesorbothshallnotbeconsideredaspaymentmade
forsuchsupplyunlessthesupplierappliessuchdepositasconsiderationforthesaidsupply

5. Some terminologies 5
•Sec2(17)ofCGSTAct“business”includes-
•anytrade,commerce,manufacture,profession,vocation,adventure,wageroranyothersimilaractivity,whetherornotitis
forapecuniarybenefit;
•anyactivityortransactioninconnectionwithorincidentalorancillarytosub-clause(a);
•anyactivityortransactioninthenatureofsub-clause(a),whetherornotthereisvolume,frequency,continuityor
regularityofsuchtransaction;
•supplyoracquisitionofgoodsincludingcapitalgoodsandservicesinconnectionwithcommencementorclosureof
business;
•provisionbyaclub,association,society,oranysuchbody(forasubscriptionoranyotherconsideration)ofthefacilitiesor
benefitstoitsmembers;
•admission,foraconsideration,ofpersonstoanypremises;
•servicessuppliedbyapersonastheholderofanofficewhichhasbeenacceptedbyhiminthecourseorfurtheranceof
histrade,professionorvocation;
•servicesprovidedbyaraceclubbywayoftotalisatororalicencetobookmakerinsuchclub;and
•anyactivityortransactionundertakenbytheCentralGovernment,aStateGovernmentoranylocalauthorityinwhichthey
areengagedaspublicauthorities;.

6. Activities treated as Supply even without
consideration
6
•ScheduleIofCGSTAct
•Permanenttransferordisposalofbusinessassetswhereinputtaxcredithasbeenavailedonsuchassets.
•Supplyofgoodsorservicesorbothbetweenrelatedpersonsorbetweendistinctpersonsasspecifiedin
section25,whenmadeinthecourseorfurtheranceofbusiness.Providedthatgiftsnotexceedingfifty
thousandrupeesinvalueinafinancialyearbyanemployertoanemployeeshallnotbetreatedassupply
ofgoodsorservicesorboth.
•Supplyofgoods-
•byaprincipaltohisagentwheretheagentundertakestosupplysuchgoodsonbehalfoftheprincipal;or
•byanagenttohisprincipalwheretheagentundertakestoreceivesuchgoodsonbehalfoftheprincipal.
•Importofservicesbyapersonfromarelatedpersonorfromanyofhisotherestablishmentsoutside
India,inthecourseorfurtheranceofbusiness.

7. Activities to be treated as Supply of goods
or services
7
•ScheduleIIofCGSTAct
•Transfer
•Anytransferofthetitleingoodsisasupplyofgoods
•Anytransferofrightingoodsorofundividedshareingoodswithoutthetransferoftitlethereof,isasupply
ofservices
•Anytransferoftitleingoodsunderanagreementwhichstipulatesthatpropertyingoodsshallpassatafuture
dateuponpaymentoffullconsiderationasagreed,isasupplyofgoods.
•LandandBuilding
•Anylease,tenancy,easement,licencetooccupylandisasupplyofservices.
•Anyleaseorlettingoutofthebuildingincludingacommercial,industrialorresidentialcomplexforbusiness
orcommerce,eitherwhollyorpartly,isasupplyofservices.
•Anytreatmentorprocesswhichisappliedtoanotherperson'sgoodsisasupplyofservices.

8. 8
•ScheduleIIofCGSTAct
•Transferofbusinessassets
•Wheregoodsformingpartoftheassetsofabusinessaretransferredordisposedofbyorunderthe
directionsofthepersoncarryingonthebusinesssoasnolongertoformpartofthoseassets,suchtransferor
disposalisasupplyofgoods.
•Where,byorunderthedirectionofapersoncarryingonabusiness,goodsheldorusedforthepurposesof
thebusinessareputtoanyprivateuseorareused,ormadeavailabletoanypersonforuse,foranypurpose
otherthanapurposeofthebusiness,theusageormakingavailableofsuchgoodsisasupplyofservices.
•Whereanypersonceasestobeataxableperson,anygoodsformingpartoftheassetsofanybusinesscarried
onbyhimshallbedeemedtobesuppliedbyhiminthecourseorfurtheranceofhisbusinessimmediately
beforeheceasestobeataxableperson,unless—
•thebusinessistransferredasagoingconcerntoanotherperson;or
•thebusinessiscarriedonbyapersonalrepresentativewhoisdeemedtobeataxableperson.
Activities to be treated as Supply of goods
or services

9. 9
•ScheduleIIofCGSTAct
•Supplyofservices
•Rentingofimmovableproperty;
•Constructionofacomplex,building,civilstructureorapartthereof,includingacomplexorbuildingintended
forsaletoabuyer,whollyorpartly,exceptwheretheentireconsiderationhasbeenreceivedafterissuanceof
completioncertificate,whererequired,bythecompetentauthorityorafteritsfirstoccupation,whicheveris
earlier.
•Temporarytransferorpermittingtheuseorenjoymentofanyintellectualpropertyright.
•Development,design,programming,customisation,adaptation,upgradation,enhancement,implementationof
informationtechnologysoftware;
•Agreeingtotheobligationtorefrainfromanact,ortotolerateanactorasituation,ortodoanact.
•transferoftherighttouseanygoodsforanypurpose(whetherornotforaspecifiedperiod)forcash,
deferredpaymentorothervaluableconsideration.
Activities to be treated as Supply of goods
or services

10. 10
•ScheduleIIofCGSTAct
•Compositesupply
•Workscontract
•Supply,bywayoforaspartofanyserviceorinanyothermannerwhatsoever,ofgoods,beingfoodorany
otherarticleforhumanconsumptionoranydrink(otherthanalcoholicliquorforhumanconsumption),where
suchsupplyorserviceisforcash,deferredpaymentorothervaluableconsideration.
•Supplyofgoods
•Supplyofgoodsbyanyunincorporatedassociationorbodyofpersonstoamemberthereofforcash,
deferredpaymentorothervaluableconsideration.
Activities to be treated as Supply of goods
or services

11. Activities considered neither supply of
goods or services
11
•ScheduleIIIofCGSTAct
•Servicesbyanemployeetotheemployerinthecourseoforinrelationtohisemployment.
•ServicesbyanycourtorTribunalestablishedunderanylawforthetimebeinginforce.
•Functionsperformedby
•theMembersofParliament,MembersofStateLegislature,MembersofPanchayats,MembersofMunicipalitiesand
Membersofotherlocalauthorities
•thedutiesperformedbyanypersonwhoholdsanypostinpursuanceoftheprovisionsoftheConstitutioninthat
capacity;or
•thedutiesperformedbyanypersonasaChairpersonoraMemberoraDirectorinabodyestablishedbytheCentral
GovernmentoraStateGovernmentorlocalauthorityandwhoisnotdeemedasanemployeebeforethe
commencementofthisclause.
•Servicesoffuneral,burial,crematoriumormortuaryincludingtransportationofthedeceased.
•Saleoflandand,subjecttoclause(b)ofparagraph5ofScheduleII,saleofbuilding.
•Actionableclaims,otherthanlottery,bettingandgambling

12. Activities considered neither supply of
goods or services
12
•ScheduleIIIofCGSTAct
•Supplyofgoodsfromaplaceinthenon-taxableterritorytoanotherplaceinthenon-taxableterritory
withoutsuchgoodsenteringintoIndia.
•Supplyofwarehousedgoodstoanypersonbeforeclearanceforhomeconsumption
•Supplyofgoodsbytheconsigneetoanyotherperson,byendorsementofdocumentsoftitletothe
goods,afterthegoodshavebeendispatchedfromtheportoforiginlocatedoutsideIndiabutbefore
clearanceforhomeconsumption.
•Sec7(2)(b)ofCGSTAct
•ActivitiesortransactionsundertakenbytheGovernmentoranylocalauthority-Servicesbywayofany
activityinrelationtoafunctionentrustedtoaPanchayatunderarticle243GoftheConstitution[ortoa
Municipalityunderarticle243WoftheConstitution.

13. Some terminologies 13
•“Goods”meanseverykindofmovablepropertyotherthanmoneyandsecuritiesbut
includesactionableclaim,growingcrops,grassandthingsattachedtoorformingpartof
thelandwhichareagreedtobeseveredbeforesupplyorunderacontractofsupply.Sec
2(52)ofCGSTAct
•“Services”meansanythingotherthangoods,moneyandsecuritiesbutincludesactivities
relatingtotheuseofmoneyoritsconversionbycashorbyanyothermode,fromone
form,currencyordenomination,toanotherform,currencyordenominationforwhicha
separateconsiderationischarged.Sec2(102)ofCGSTAct

14. Some terminologies 14
•Nilratedsupplies–NotspecificallydefinedunderGST.ThistypeofsupplyattractsaGSTof0%.
Inputtaxcreditcannotbeclaimedonsuchsupplies.Someitemswhicharenilratedincludegrains,
salt,jaggery,etc.
•Exemptsupplies–Sec2(47)ofCGSTAct,“exemptsupply”meanssupplyofanygoodsorservices
orbothwhichattractsnilrateoftaxorwhichmaybewhollyexemptfromtaxu/s11ofCGSTAct
oru/s6ofIGSTActandincludesnon-taxablesupply.Thissupplyincludesitemswhichareused
foreverydaypurposes.Sincetheyarebasicessentials,theydonotattractanyGSTatall.Youwill
notbeabletoclaimanyITConsuchsupplies.Someexamplesincludebread,freshfruits,milk,
curd,etc.
•Zeroratedsupplies–Sec16(1)ofIGSTAct,“zeroratedsupply”meansanyofthefollowing
suppliesofgoodsorservicesorboth,namely–
•Exportofgoodsorservicesorboth;or
•SupplyofgoodsorservicesorbothtoaSpecialEconomicZonedeveloperoraSpecialEconomicZone
unit.

15. Some terminologies 15
•CompositeSupply–Asupplycomprisingoftwoormoregoodsorservicesorboth,whichare
naturallybundledandsuppliedinwitheachotherintheordinarycourseofbusiness,oneofwhich
isaprincipalsupply.Itmeansthattheitemsaregenerallysoldasacombinationandcannotbe
separated.Taxratetobechargedshallbetherateasapplicabletotheprincipalsupply.
Goodsarepackedandtransported.Thesupplyofgoods,packingmaterialsandtransportisacompositesupply.Transportcannotbe
doneseparatelyiftherearenogoodstosupply.Thus,thesupplyofgoodsistheprincipalsupply.
•MixedSupply–Asupplyofacombinationoftwoormoregoodsorservicesorbothmade
togetherforasingleprice.Eachoftheseitemscanbesuppliedseparatelyandisnotdependenton
anyother.Taxratetobechargedshallbethetaxrateoftheitemwhichhasthehighestrateoftax.
ADiwaligiftboxconsistingofsweets,chocolates,cakes,dryfruits,aerateddrinkandfruitjuicessuppliedforasinglepriceisa
mixedsupply.Alltheseitemsarealsosoldseparately.

16. Supply & Taxable event 16
•GoodsandServicesTaxmeansataxonsupplyofgoodsorservices,orboth.Notethattheword
usedis“Supply”andnot“sale”or“manufacture”.
•Taxbecomespayablewhenliabilitytopaythetaxarisesandtheliabilitytopaytaxarisesbythe
happeningofthetaxableevent.
•Sec9(1)ofCGSTActisthechargingsectionfortaxleviableonsupplyofgoodsorservices,or
both.
•Sec9(2)ofCGSTActstatesthatGSTonPetroleumcrude,diesel,petrol,naturalgasandaviation
turbinefuelwillbeleviedfromalaterdate.
•Sec9(3)andSec9(4)ofCGSTActdealswithprovisionsrelatedtodischargeoftaxliabilityon
reversechargebasis.
•Sec9(5)specifiescategoryofservices,thetaxonwhichistobepaidbytheElectronicCommerce
Operator.
•Sec11ofCGSTActgivespowerstotheGovernmenttoexemptspecificgoodsorservicesor
bothfromwholeorpartoftaxleviablethereon.

17. Taxable event & liability thereof17
Taxable
Event
Time of
Supply
Place of
Supply
Value of
Supply

18. Time of
Supply

19. Significance 19
•Theliabilitytopaytaxongoodsorservicesorbothariseatthetimeofsuchsupply.Sec
12(1)andSec13(1)ofCGSTAct.
•“Timeofsupply”meansthepointintimewhengoodsorservices,orbothareconsidered
‘supplied’.Whenthesellerknowsthe‘time’,ithelpshimidentifyduedateforpaymentof
taxes.

20. Some terminologies 20
•“Supplier”inrelationtoanygoodsorservicesorboth,shallmeanthepersonsupplyingthesaid
goodsorservicesorbothandshallincludeanagentactingassuchonbehalfofsuchsupplierin
relationtothegoodsorservicesorbothsupplied.Sec2(105)ofCGSTAct
•Sec2(93)ofCGSTAct,“Recipient”ofsupplyofgoodsorservicesorboth,means,
•whereaconsiderationispayableforthesupplyofgoodsorservicesorboth,thepersonwhoisliabletopay
thatconsideration
•wherenoconsiderationispayableforthesupplyofgoods,thepersontowhomthegoodsaredeliveredor
madeavailable,ortowhompossessionoruseofthegoodsisgivenormadeavailable;and
•wherenoconsiderationispayableforthesupplyofaservice,thepersontowhomtheserviceisrendered
•Sec2(96)ofCGSTAct,“removal’’inrelationtogoods,means,
•despatchofthegoodsfordeliverybythesupplierthereoforbyanyotherpersonactingonbehalfofsuch
supplier;or
•collectionofthegoodsbytherecipientthereoforbyanyotherpersonactingonbehalfofsuchrecipient;

21. Time of Supply of goods 21
Section 12(2)
Forward Charge
Earliest of,
-Date of issue
of invoice
-Due date for
issue of invoice
u/s 31(1)
-Date on
which supplier
receives
payment *
Section 12(3)
Reverse Charge
Earliest of,
-Date of
receipt of
goods
-Date of
payment as per
recipient
-31
st
day of
invoice issued
Section 12(4)
Issue of Voucher
-If supply
identifiable,
date of issue of
voucher
-In other
cases, date of
redemption of
voucher
Section 12(5)
Residual provision
-If periodical
return to be
filed, date of
return
-In other
cases, date on
which tax paid
Section 12(6)
Value addition
-Date on
which the
supplier
receives such
addition
(Interest, late
fee, penalty) in
value

22. Time of Supply of goods -Illustrations22
Section 12(2) Invoice date
Removal of
goods
Payment entry
in supplier's
books
Credit in bank
account
Time of supply
1Invoice raised before removal10-Oct-19 20-Oct-19 26-Oct-19 30-Oct-19 10-Oct-19
2Advance received 20-Oct-19 20-Oct-19 10-Oct-19 30-Oct-19 20-Oct-19
Supply involves movement of
goods Section 12(2) read with
Section 31(1)(a)
Invoice/
document date
Removal of
goods
Delivery of
goods
Receipt of
payment
Time of supply
3Delayed issue of invoice 26-Oct-19 25-Oct-19 26-Oct-19 26-Oct-19 25-Oct-19
4Inter-State stock transfer 10-Oct-19 20-Oct-19 26-Oct-19 - 10-Oct-19
5
Advance received, invoice for
full amount issued on same day
30-Oct-19 10-Nov-19 14-Nov-19
20-Oct-19 30-Oct-19
20-Nov-19 30-Oct-19

23. Time of Supply of goods -Illustrations23
Supply other than by involving
movement of goods -Section
12(2) read with Section 31(1)(b)
Invoice date
Receipt of
invoice by
recipient
Delivery of
goods
Receipt of
payment
Time of supply
6Delayed issue of invoice 30-Oct-19 05-Nov-19 29-Oct-19 10-Nov-19 29-Oct-19
7Invoice issued prior to delivery20-Oct-19 10-Nov-19 26-Oct-19 10-Nov-19 20-Oct-19
Continuous supply of goods
Section 12(2) read with Section
31(4)
Invoice date
Removal of
goods
SoAdate
Receipt of
payment
Time of supply
8
Contract provides for successive
statements of account/ successive
payments
01-Nov-19
15-Oct-19
05-Nov-19 01-Nov-19 01-Nov-19
25-Oct-19
9 11-Dec-19
08-Nov-19
05-Dec-19 11-Dec-19 05-Dec-19
30-Nov-19
10
08-Jan-20
14-Dec-19
05-Jan-20 01-Jan-20 01-Jan-20
23-Dec-19

24. Time of Supply of goods -Illustrations24
Sale on approval basis
Section 12(2) read with
Section 31(7)
Removal of
goods
Issue of invoice
Accepted by
recipient
Receipt of
payment
Time of supply
11
Acceptance communicated
within 6 months of removal
01-Nov-19 25-Nov-19 15-Nov-19 25-Nov-19 15-Nov-19
12
Amount paid to supplier before
informing acceptance
01-Nov-19 25-Nov-19 15-Nov-19 12-Nov-19 15-Nov-19
13
Acceptance not communicated
within 6 months of removal
01-Oct-18 15-May-19 15-May-19 02-May-19 01-Apr-19

25. Time of Supply of goods –Reverse charge25
Reverse charge
Section 12(3)
Date of invoice
issued by
supplier
Removal of
goods
Receipt of
goods
Payment by
recipient
Time of supply
1General 31-Oct-19 31-Oct-19 20-Nov-19 30-Nov-19 20-Nov-19
2Advance paid 31-Oct-19 31-Oct-19 20-Nov-19 05-Nov-19 05-Nov-19
3
No payment made for the
supply
31-Oct-19 30-Dec-19 05-Jan-20 - 30-Nov-19

26. Time of Supply of services 26
Section 13(2)
Forward Charge
Earliest* of,
-Invoice date
or receipt of
payment
-Provision of
services or
receipt of
payment
-Receipt of
services
Section 13(3)
Reverse Charge
Earliest of,
-Date of
payment as per
recipient
-61
th
day of
invoice issued
-Date of entry
in the books of
recipient
Section 13(4)
Issue of Voucher
-If supply
identifiable,
date of issue of
voucher
-In other
cases, date of
redemption of
voucher
Section 13(5)
Residual provision
-If periodical
return to be
filed, date of
return
-In other
cases, date on
which tax paid
Section 13(6)
Value addition
-Date on
which the
supplier
receives such
addition
(Interest, late
fee, penalty) in
value

27. Time of Supply of services –Sec 13(2) 27
•Date of issue of Invoice or Receipt of
Payment, whichever is earlier
If invoice issued within prescribed time u/s
31(2) -30 days (45 days in case of Banking,
Insurance, Financial Institution or NBFC
company)
•Date of provision of service or Receipt of
payment, whichever is earlier
If invoice not issued within 30 days (45 days in
case of Banking, Insurance, Financial
Institution or NBFC company)
•Date on which recipient shows services in
his books of accounts
If both cases do not apply

28. Time of Supply of services -Illustrations28
Section 13(2) Invoice date
Completion of
services
Payment entry
in supplier's
books
Credit in bank
account
Time of supply
1
Invoice raised before
completion of service
10-Oct-19 20-Oct-19 26-Oct-19 30-Oct-19 10-Oct-19
2Advance received 20-Oct-19 30-Oct-19 10-Oct-19 20-Oct-19 10-Oct-19
Section 13(2) read with
Section 31(2)
Invoice date
Commencemen
t of service
Completion of
service
Receipt of
payment
Time of supply
3 Delayed issue of invoice06-Dec-19 20-Oct-19 16-Nov-19 28-Jan-20 06-Dec-19
4
Advance received, invoice for
full amount issued on same day
30-Oct-19 30-Oct-19 30-Dec-19
30-Oct-19 30-Oct-19
04-Dec-19 30-Oct-19

29. Time of Supply of services -Illustrations29
Continuous supply of
services Section 13(2) read
with Section 31(5)
Invoice date
Date as per
contract
Receipt of
payment
Entry of
provision of
services in
books
Time of supply
5Section 31(5)(a) Contract
provides for payments monthly
on the 10
th
of the month
02-Nov-19 10-Nov-19 15-Nov-19 31-Oct-19 02-Nov-19
17-Dec-19 10-Dec-19 15-Dec-19 30-Nov-19 10-Dec-19
10-Jan-20 10-Jan-20 06-Jan-20 31-Dec-19 06-Jan-20
6
12-Nov-19 10-Nov-19 25-Nov-19 12-Nov-19 10-Nov-19
Section 31(5(c) Contract
provides for payments on
completion of event.
24-Apr-19 24-Apr-19 20-Apr-19 24-Apr-19 20-Apr-19

30. Time of Supply of services –Reverse
charge
30
Reverse charge
Section 13(3)
Date of invoice
issued by
supplier
Date of
completion of
service
Payment by
recipient
Entry of
receipt of
services in
recipient's
books
Time of supply
1General 31-Oct-19 31-Oct-19 20-Nov-19 30-Nov-19 20-Nov-19
2Advance paid 31-Oct-19 31-Oct-19 05-Nov-19 31-Oct-19 05-Nov-19
3Delay in payment (Max. 60
days from date of invoice)
31-Oct-19 31-Oct-19 10-Jan-20 31-Oct-19 31-Dec-19

31. Time of Supply of Voucher –Illustration31
Issue of vouchers
Section 12(4) & Section 13(4)
Service
provided/
goods delivered
Issue of
voucher
Redemption of
voucher
Last date for
acceptance of
voucher
Time of supply
1
Voucher issued to a recipient
after supply of goods or
service, for the same goods/
service -valid for 1 year
01-Nov-18 01-Nov-18 14-Dec-18 30-Oct-19 01-Nov-18
2
Voucher issued to a recipient of
machinery along at the time of
delivery, for availing repair
services [or specific goods] -
valid for 1 year
01-Nov-18 01-Nov-18 14-Dec-18 30-Oct-19 01-Nov-18
3
Voucher issued to a recipient
after supply of a service, for
any other services or goods
across India, -valid for 1 year
01-Nov-18 01-Nov-18 14-Dec-18 30-Oct-19 14-Dec-18

32. Change in rate of tax –Sec 14 32
Date of supply
of goods or
services
(1)
Date of
invoice
(2)
Date of
receipt of
payment
(3)
Time of supply *
(4)
Rate of tax
(5)
Before After After Earlier of (2) and (3)New
Before Before After (2) Old
Before After Before (3) Old
After Before After (3) New
After Before Before Earlier of (2) and (3)Old
After After Before (2) New

33. Place
of
Supply

34. Significance 34
•Onthebasisofplaceofsupply,
wecanascertainwhetherthe
supplyisinthecourseofintra-
statetradeorinter-statetrade.
•Thisinturnshallhelpin
ascertainingwhether,ona
supply,CGST+SGSTispayable
orIGSTispayable
Supply
Intra State
CGST + SGST
Inter State
IGST

35. Provision of law 35
Sec7ofIGSTAct
•Wherethelocationofthesupplierandtheplaceofsupplyarein––
•twodifferentStates;
•twodifferentUnionterritories;or
•aStateandaUnionterritory,
•ImportofgoodsorservicesintoIndia
•whenthesupplierislocatedinIndiaandtheplaceofsupplyisoutsideIndia
•SupplytoorbyaSpecialEconomicZonedeveloperoraSpecialEconomicZoneunit
shallbetreatedasasupplyinthecourseofinter-Statetradeorcommerce.
Sec8ofIGSTAct
•WherethelocationofthesupplierandtheplaceofsupplyareinthesameStateorsameUnion
territoryshallbetreatedasintra-Statesupply.

36. Some terminologies 36
•Sec2(15)ofIGSTAct,“locationofthesupplierofservices”means,
•whereasupplyismadefromaplaceofbusinessforwhichtheregistrationhasbeenobtained,the
locationofsuchplaceofbusiness
•whereasupplyismadefromaplaceotherthantheplaceofbusinessforwhichregistrationhasbeen
obtained(afixedestablishmentelsewhere),thelocationofsuchfixedestablishment;
•whereasupplyismadefrommorethanoneestablishment,whethertheplaceofbusinessorfixed
establishment,thelocationoftheestablishmentmostdirectlyconcernedwiththeprovisionofthe
supply;and
•inabsenceofsuchplaces,thelocationoftheusualplaceofresidenceofthesupplier;
•Sec2(5)ofIGSTAct,“exportofgoods”withitsgrammaticalvariationsandcognate
expressions,meanstakinggoodsoutofIndiatoaplaceoutsideIndia.

37. Some terminologies 37
•Sec2(6)ofIGSTAct,“exportofservices”meansthesupplyofanyservicewhen,
•thesupplierofserviceislocatedinIndia;
•therecipientofserviceislocatedoutsideIndia;
•theplaceofsupplyofserviceisoutsideIndia;
•thepaymentforsuchservicehasbeenreceivedbythesupplierofserviceinconvertibleforeignexchange;and
•thesupplierofserviceandtherecipientofservicearenotmerelyestablishmentsofadistinctpersoninaccordancewith
Explanation1insection8;
•Sec2(10)ofIGSTAct,“importofgoods”withitsgrammaticalvariationsandcognateexpressions,meansbringing
goodsintoIndiafromaplaceoutsideIndia.
•Sec2(11)ofIGSTAct,‘‘importofservices”meansthesupplyofanyservice,where
•thesupplierofserviceislocatedoutsideIndia;
•therecipientofserviceislocatedinIndia;and
•theplaceofsupplyofserviceisinIndia;

38. Place of Supply of goods (domestic)38
Section 10(1)(a)
Supply involves
movement of
Goods
Location of
goods at the
time at which
movement
terminates for
delivery to
recipient
Section 10(1)(b)
Goods supplied on
direction of third
person (buyer)
Principal Place
of Business of
the third
person (i.e.,
address on
Registration
Certificate)
Section 10(1)(c)
Supply does not
involves movement
of goods
Location of
goods at the
time of
delivery to the
recipient
Section 10(1)(d)
Goods are
assembled or
installed at site
Place of
installation or
assembly
Section 10(1)(e)
Goods supplied on
board a
conveyance
Location at
which such
goods are
taken on board
Sec10(2)-Wherenoneoftheaboverulesapply,placeofsupplywouldbedeterminedinthemannertobeprescribed

39. Place of Supply of goods -Illustration39
Particulars
Supplier's factory
from where goods
are removed
Termination of
movement for
delivery
Place of
supply
Tax Payable
Movement of goods by the supplier
(goods dispatched by supplier)
Orissa Assam Assam IGST
Movement of goods by the recipient
(goods collected by recipient)
Kerala Goa Goa IGST
Section 10(1)(a): Supply involves movement of goods

40. Place of Supply of goods -Illustration40
Section 10(1)(b): Supply involves movement of goods, and delivered to a person on the instruction of a
third person
Case
Location of
Supplier A
Place of delivery of
goods to C
Principal place of buyer
B who instructed
delivery to C
Place of supply
for A
Type of tax payable by A
1 Ahmedabad Ahmedabad Amritsar Amritsar IGST
2 Ahmedabad Amritsar Amritsar Amritsar IGST
3 Ahmedabad Bangalore Bangalore Bangalore IGST
4 Ahmedabad Chandigarh Udaipur Udaipur IGST
Case Location of
Supplier A
Place of delivery of
goods to C
Principal place of buyer
B who instructed
delivery to C
Place of supply
for B
Type of tax payable by B
1 Ahmedabad Ahmedabad Amritsar Ahmedabad IGST
2 Ahmedabad Amritsar Amritsar Amritsar CGST + Pun GST
3 Ahmedabad Bangalore Bangalore Bangalore CGST + Kar GST
4 Ahmedabad Chandigarh Udaipur Chandigarh IGST

41. Place of Supply of goods -Illustration41
Section 10(1)(c): Supply does not involve movement of goods
Particulars
Location of
supplier
Location of
recipient
Location of
goods
Place of
supply
Tax Payable
Saleofpre-installedDGSet Delhi Bhopal Bhopal Bhopal IGST
Manufactureofmouldsbyjob-
worker(supplier),soldtothe
Principal,butretainedinjob
worker’spremises
Tamil Nadu Kerala Tamil NaduTamil Nadu
CGST + TN
GST
AbusinessmaninNoida(regd.In
Sikkimtoo)hasanoldcarlying
unusedinhishometowninSikkim
Sikkim Sikkim Sikkim Sikkim
CGST +
Sikkim GST

42. Place of Supply of goods -Illustration42
Section 10(1)(d): Supply of goods assembled/ installed at site
Particulars
Location of
supplier
Registered
office of
recipient
Installation/
Assembly Site
Place of
supply
Tax Payable
Installation of weigh bridge Delhi Bhopal Bhopal Bhopal IGST
Servers supplied and installed at
the office of a marketing firm
Karnataka Goa KarnatakaKarnataka
CGST + Kar
GST
Supply of work-stations Gujarat Gujarat Kerala Kerala IGST

43. Place of Supply of goods -Illustration43
Section 10(1)(e): Supply of goods supplied on board a conveyance
Particulars
Location of
supplier
Loading of
goods
Passenger
boards at
Place of
supply
Tax Payable
Supply of canned aerated drinks
on a flight
Punjab Punjab Delhi Punjab
CGST +
Punjab GST
Sale of Haldirams mixtures by
their sales person during the
journey
Pune Goa Hyderabad Goa IGST
Sale of sunglasses on a ship Bangalore Chennai Cochin Chennai IGST

44. Place of Supply of goods –Import/ Export44
Section Situation Place of supply
11(a) Goods imported into India Location of importer
11(b) Goods exported from India Location outside India
Sec5ofIGSTActprovidesthatIGSTshallbeleviedongoodsimportedintoIndiaasperSec3of
CustomsTariffAct
▪Pointoftaxation-Whendutiesofcustomsareleviedonthesaidgoods
▪Value-AsdeterminedasperCustomsAct
Exportofgoods:MeanstakinggoodsoutofIndiatoaplaceoutsideIndia;
Importofgoods:MeansbringinggoodsintoIndiafromaplaceoutsideIndia;

45. Place of supply of services (domestic)45
For Supply of any other
Service,
Place of supply is:
(General Rule)
Section 12(2)(a):Registered recipient:
Location of recipient
Section 12(2)(b):Unregistered recipient:
Location of recipient if address in supplier’s records
Location of supplierif address not available

46. Place of supply of services (domestic)46
Supply of:
Servicesdirectlyinrelationto:
a)Immovableproperty–grantof
rightstouse,construction,
architects,surveyors,engineersetc.
b)Lodgingbyhotel,clubsetc.
includinghouseboatorvessel
c)Accommodation forMarriage,
functionsetc.
c)Ancillaryservicestotheabove
Place of supply -Section 12(3):
Location of property/ boat/
vessel
If property is outside India –
Location of Recipient
a)Restaurantandcatering
b)Personalgrooming
c)Fitness
d)Beautytreatment
e)Healthserviceincludingcosmetic
andplasticsurgery
Place of supply -Section 12(4):
Location of ‘actual’ performance

47. Place of supply of services (domestic)47
Sec 12(5):Supply of
Services of Training
and Performance
Appraisal
Registered
recipient:
Location of
recipient
Unregistered
recipient:
Place of ‘actual’
performance
Sec12(6):Supplyof
Servicesforadmissionto:
a)Cultural,Artistic,
Sporting, Scientific,
Educational,
Entertainmentevent
b)AmusementPark
c)Servicesancillaryto
above
Venue of event/
park
Sec12(7):Supplyof:
a)Organisingcultural,arts,
sports,educational,scientific,
entertainment,conference,fair
exhibitionorsimilarevents
b)Servicesancillarytoabove
Registered recipient:
Location of recipient
Unregistered
recipient:
Venue of event
Event outside India:
Location of recipient

48. Place of supply of services (domestic)48
Supply of
services of:
Sec12(8):Transportationof
goods,includingbymailor
courier
RegisteredRecipient:LocationofRecipient
UnregisteredRecipient:Locationwheregoods
handedoverfortransportation
Sec 12(9): Passenger
TransportationService(Return
journeytreatedasseparate
journey)
RegisteredRecipient:PlaceofRegistered
Recipient
UnregisteredRecipient:Placewherepassenger
embarksontheconveyanceforacontinuous
journey
Sec12(10):Servicesonboard
conveyance likevessel,
aircraft,train,motorvehicle
Firstscheduledpointofdepartureofthat
conveyanceforthatjourney

49. Place of supply of services (domestic)49
Supply of telecommunication services including data transfer, broadcasting,
DTH, cable etc.
(a) Services of fixed
telecommunicationline,leased
circuits,internetleasedcircuit,
cableordishantenna
Locationwhereline/deviceisinstalled
(b)Post-paidmobileconnectionfor
telecommunicationandinternet
services*
Locationofbillingaddressoftherecipienton
record
(c)Pre-paidmobileconnectionfor
telecommunicationandinternet
services*
Throughinternet:Locationofrecipienton
record
Throughsellingagents:Locationofselling
agentonrecordofsupplier
Thoughothers:Locationwherepre-payment
received/voucherssold
•In cases not covered, address of recipient on recordsshall be the place of supply;
•Where no address of the recipient available in records, location of the suppliershall be the place of supply

50. Place of supply of services (domestic)50
Supply of:
Sec 12(12) Banking
and Other Financial
Services including
Stock Broking
Location of recipient
in suppliers records
(If not available,
location of supplier)
Sec 12(13) Insurance
Services
Registered recipient:
Location of recipient
Unregistered recipient:
Location of recipient in
supplier’s records
Sec 12(14)
Advertisement
Services to
Government, etc.
Place is State of
dissemination in
proportion

51. Place of supply of services (Outside)51
Sec 13(3)
Goods required to
be made physically
available/ physical
presence of
recipient required
Location
where services
actually
performed
Sec 13(4)
directly in relation
to immovable
property
Location of
such
immovable
property (or
where it is
intended to be
located)
Sec 13(5)
admission to/
organising event,
etc. & ancillary
services
Place where
the event is
actually held
Sec 13(8)
Bank/ FI services to
A/c holders,
intermediary
services, hiring
transport (excl
aircraft/ vessels)
upto 1 month
Location of
supplier
Sec 13(9)
Transportationof
goods (other than
by way of mail/
courier)
Destination of
the goods

52. Place of supply of services (Outside)52
Sec 13(10)
Passenger
transportation
service
Place where
passenger
embarks on the
conveyance for
a continuous
journey
Sec 13(11)
Service provided
on board a
conveyance
1st scheduled
point of
departure of
that
conveyance
for that
journey
Sec 13(12)
Online information
and database
access or retrieval
services
Location of
recipient
Sec 13(13)
To prevent double
taxation/ non-
taxation/ uniform
application of
rules, Govt has
power to notify
services
Place of
effective use
and enjoyment
of a service
Sec 13(2)
General Rule
(Residual
provision)
Location of
recipient
If not available,
location of
supplier

53. Value
of
Supply

54. Significance 54
•Determinesthevalueofthesupplydone,notnecessarilythesalevaluebutthe‘transaction
value’.
•ItisimportantbecauseGSTistobecalculatedanddischargedonthevalueofthesupply.
Ifthevalueiscalculatedincorrectly,thentheamountofGSTchargedshallalsobe
incorrect,leadingtounwantedcomplications.

55. Provision of law 55
•Sec15(1)ofCGSTAct,Thevalueofasupplyofgoodsorservicesorbothshallbethetransaction
value,whichisthepriceactuallypaidorpayableforthesaidsupplyofgoodsorservicesorboth
wherethesupplierandtherecipientofthesupplyarenotrelatedandthepriceisthesole
considerationforthesupply.
•ChapterIVofCGSTRules,2017dealswiththeprovisionsrelatingtodeterminationofvalueof
supplyincaseswhere
•Valuecannotbedeterminedu/s15(1)oftheActi.e.(i)priceisnotthesoleconsideration,(ii)supplierand
recipientarerelatedpersons
•Incaseofsuppliesthroughagent,includingpureagent
•Incaseofnotifiedsupplies
•Residualmethods
•RateofexchangeshallbeapplicablereferencerateforthatcurrencyasdeterminedbyRBIonthe
datewhenpointoftaxationarisesasperSec12andSec13ofCGSTAct

56. Some terminologies 56
•ExplanationtoSection15ofCGSTAct,thefollowingpersonsshallbedeemedtobe“related
persons”:
•Officers/Directorsofoneanother’sbusiness
•Legallyrecognisedpartnersinbusiness
•Employer–Employee
•Apersondirectly/indirectlyowns/controls/holds25%ofsharesofboththepersons
•Onedirectly/indirectlycontrolstheother
•Botharedirectly/indirectlycontrolledbyathirdperson
•Together,theydirectly/indirectlycontrolathirdperson
•Membersofthesamefamily
•Soleagent/distributor/concessionaireoftheother

57. Value of Supply –Sec 15 57
INCLUDES(Sec15(2)
▪Anytaxes,duties,cesses,feesandchargesleviedunderanystatute,
otherthantaxespaidunderGSTregime,chargedseparatelybythe
supplier.
▪AmountincurredbyRecipientwhichisliabletobepaidbytheSupplier.
▪Incidentalexpenseslikepacking,commissionetc.oranychargesin
respectofsupplychargedbythesupplieratthetimeorbeforethesupply
▪Interest/latefee/penaltyfordelayedpaymentofconsiderationfor
supply.
▪Subsidiesdirectlylinkedtoprice(excludingCentralandStateGovt
subsidies)
EXCLUDES(Sec15(3)
▪Discounts
▪Before/atthetimeofsupplyifsuch
discountisdulyrecordedinthe
invoice
▪Afterthesupply,provided:
•Agreementestablishingdiscount
enteredintobefore/atthetime
ofsupply
•Discountspecificallylinkedto
relevantinvoices
•ITCreversedbytherecipientto
theextentofdiscount
Transaction value

58. Valuation Rules –Rule 27 58
•Valueofsupplyofgoodsorserviceswhereconsiderationisnotwhollyinmoney:
•Openmarketvalueofsuchsupply;
•Iftheopenmarketvalueisnotavailable,thesumtotalofconsiderationinmoneyandanysuchfurther
amountinmoneyasisequivalenttotheconsiderationnotinmoney,ifsuchamountisknownatthe
timeofsupply.
•Ifthevalueofsupplyisnotdeterminableunderclause(a)orclause(b),thevalueofsupplyofgoodsor
servicesorbothoflikekindandquality.
•Ifthevalueisnotdeterminableunderclause(a)orclause(b)orclause(c),thesumtotalof
considerationinmoneyandsuchfurtheramountinmoneythatisequivalenttoconsiderationnotin
moneyasdeterminedbytheapplicationofRule30orRule31inthatorder.

59. Valuation Rules –Rule 28 59
•Valueofsupplyofgoodsorservicesorbothbetweendistinctorrelatedpersons,other
thanthroughanagent.
•Openmarketvalueofsuchsupply;
•Iftheopenmarketvalueisnotavailable,thevalueofsupplyofgoodsorservicesorbothoflikekind
andquality.
•Ifthevalueisnotdeterminableunderclause(a)orclause(b),thevalueshallbeasdeterminedbythe
applicationofRule30orRule31inthatorder.
•Wherethegoodsareintendedforfurthersupplyassuchbytherecipient,thevalueshall,attheoptionofthesupplier,be
anamountequivalentto90%ofthepricechargedforthesupplyofgoodsoflikekindandqualitybytherecipienttohis
customernotbeingarelatedperson:
•Wheretherecipientiseligibleforfullinputtaxcredit,thevaluedeclaredintheinvoiceshallbedeemedtobetheopen
marketvalueofthegoodsorservices.

60. Valuation Rules –Rule 29 60
•Valueofsupplyofgoodsmadeorreceivedthroughanagent:
•theopenmarketvalueofthegoodsbeingsupplied,orattheoptionofthesupplier,be90%ofthe
pricechargedforthesupplyofgoodsoflikekindandqualitybytherecipienttohiscustomernotbeing
arelatedperson,wherethegoodsareintendedforfurthersupplybythesaidrecipient.
•wherethevalueofasupplyisnotdeterminableunderclause(a),thesameshallbedeterminedbythe
applicationofRule30orRule31inthatorder.
“Agent”meansaperson,includingafactor,broker,commissionagent,arhatia,delcredereagent,an
auctioneeroranyothermercantileagent,bywhatevernamecalled,whocarriesonthebusinessofsupply
orreceiptofgoodsorservicesorbothonbehalfofanother.Sec2(5)ofCGSTAct

61. Valuation Rules –Rule 30/ Rule 31 61
•Rule30-Wherevalueisnotdeterminablebyanyoftheprecedingrules,thevalueshallbe
110%ofthe:
•costofproductionormanufactureor
•costofacquisitionofsuchgoodsor
•costofprovisionofsuchservices.
•Rule31-Wherevaluecannotbedeterminedunderanyaboveprovision,thesameshallbe
determinedusingreasonablemeansconsistentwiththeprinciplesandgeneralprovisions
ofSec15andtheseRules.
•Incaseofsupplyofservices,thesuppliermayoptforRule31,disregardingRule30.

62. Valuation Rules –Rule 31A 62
•Valueofsupplyincaseoflottery,betting,gamblingandhorseracing.
•Thevalueofsupplyoflotteryshallbedeemedtobe100/128ofthefacevalueofticketoroftheprice
asnotifiedintheOfficialGazettebytheorganisingState,whicheverishigher.
•Thevalueofsupplyofactionableclaimintheformofchancetowininbetting,gamblingorhorse
racinginaraceclubshallbe100%ofthefacevalueofthebetortheamountpaidintothetotalisator.

63. Valuation Rules –Rule 32(2)
▪Option1
▪Whenexchangedfromor/toINR:
DifferenceofBuyingrate/SellingrateandRBI
referencerateXTotalunitsofcurrency
(IfRBIreferencerateisnotavailable,valueshallbe1%of
grossamountofINRreceivedorprovided)
▪IfneitheroftwocurrenciesexchangedinINR,
thevalueshallbeequalto1%ofthelesserof
thetwoamountsthepersonchangingthemoney
wouldhavereceivedbyconvertinganyofthe
twocurrenciesintoINRonthatdayatthe
referencerateprovidedbyRBI.
▪Option 2
▪1%ofthegrossamountofcurrencyexchanged
foranamountuptoRs.1Lac,subjecttoa
minimumamountofRs.250
▪Rs.1,000+0.50%ofthegrossamountof
currencyexchangedforanamountexceeding
Rs.1LacuptoRs.10Lacs
▪Rs.5,500+0.10%ofthegrossamountof
currencyexchangedaboveRs.10lakhs,subject
toamaximumofRs.60,000
63
•DealinginForexincludingmoneychanging(Option,onceexercised,shallbevalidfortheFY)

64. Valuation Rules –Rule 32(3) & Rule 32(4)64
•AirTravelAgents[Rule32(3)]:
•Domesticbookings:5%ofBasicFare
•Internationalbookings:10%ofBasicFare
“Basicfare”meansthatpartoftheairfareonwhichcommissionisnormallypaidtotheairtravelagentbytheairline.
•LifeInsuranceBusiness[Rule32(4)]:
•Grosspremiumchargedfromapolicyholderreducedbytheamountallocatedforinvestment,orsavingson
behalfofthepolicyholder,ifsuchanamountisintimatedtothepolicyholderatthetimeofsupplyof
service.
•Incaseofsinglepremiumannuitypoliciesotherthan(a),10%ofsinglepremiumchargedfromthepolicy
holder
•Inallothercases,25%ofthepremiumchargedfromthepolicyholderinthefirstyearand12.5%ofthe
premiumchargedfromthepolicyholderinsubsequentyears:
Nothingcontainedinthissub-ruleshallapplywheretheentirepremiumpaidbythepolicyholderisonlytowardstheriskcoverinlife
insurance

65. Valuation Rules –Rule 32(5) & Rule 32(6)65
•SecondHandGoods[Rule32(5)]
•Supplyofusedgoodsassuchoraftersuchminorprocessingwhichdoesnotchangethenatureofthe
goodsandwherenoITChasbeenavailedonpurchaseofsuchgoods,thevalueofsupplyshallbethe
differencebetweenthesellingpriceandpurchasepriceandwherethevalueofsuchsupplyisnegativeit
shallbeignored.
•Incasesthegoodsarerepossessedfromanunregistereddefaultingborrower,thepurchasespriceshall
bedeemedtobethepurchasepriceofsuchgoodsbythedefaultingborrowerreducedby5%forevery
quarterorpartthereof,betweenthedateofpurchaseandthedateofdisposalbythepersonmaking
suchrepossession.
•Token/Coupon/Voucher/Stamp[Rule32(6)]
•Thevalueofatoken,oravoucher,oracoupon,orastamp(otherthanpostagestamp)whichis
redeemableagainstasupplyshallbemoneyvalueofthegoodsorservicesredeemableagainstsuch
token,voucher,coupon,orstamp.

66. Valuation Rules –Rule 33 66
•Theexpenditureorcostsincurredbyasupplierasapureagentoftherecipientofsupplyshallbeexcluded
fromthevalueofsupply,ifallthefollowingconditionsaresatisfied,namely-
•thesupplieractsasapureagentoftherecipientofthesupply,whenhemakesthepaymenttothethirdpartyon
authorisationbysuchrecipient;
•thepaymentmadebythepureagentonbehalfoftherecipientofsupplyhasbeenseparatelyindicatedintheinvoice
issuedbythepureagenttotherecipientofservice;and
•thesuppliesprocuredbythepureagentfromthethirdpartyasapureagentoftherecipientofsupplyareinadditionto
theserviceshesuppliesonhisownaccount.
•Pureagentmeansapersonwho-
•entersintoacontractualagreementwiththerecipientofsupplytoactashispureagenttoincurexpenditureorcostsinthe
courseofsupplyofgoodsorservicesorboth;
•neitherintendstoholdnorholdsanytitletothegoodsorservicesorbothsoprocuredorsuppliedaspureagentofthe
recipientofsupply;
•doesnotuseforhisowninterestsuchgoodsorservicessoprocured;and
•receivesonlytheactualamountincurredtoprocuresuchgoodsorservicesinadditiontotheamountreceivedforsupply
heprovidesonhisownaccount

67. Valuation Rules –Rule 35 67
•WhereValueofSupplyisinclusiveofIGST/CGST/SGST/UTGSTthen:

68. Reverse
Charge
Mechanism

69. Significance 69
•Undernormaltaxationregime,thesuppliercollectsthetaxfromthebuyeranddeposits
thesameafteradjustingthetaxliabilitywithavailableinputtaxcredit.
•Underreversechargemechanism,theliabilitytodischargethetaxliabilitypertainingto
suchgoodsorservicesorbothshiftsfromthesuppliertotherecipient.
•Intheerstwhiletaxregimetoo,inordertocollecttaxfromnumerousunorganisedsectors,
similarprovisionswerethere.However,thereisnoconceptofpartialreversechargein
GSTregime.

70. Reverse Charge Mechanism 70

71. Provision of law 71
•“Reversecharge”meanstheliabilitytopaytaxbytherecipientofsupplyofgoodsorservicesor
bothinsteadofthesupplierofsuchgoodsorservicesorbothundersub-section(3)orsub-section
(4)ofsection9,orundersub-section(3)orsubsection(4)ofsection5oftheIntegratedGoods
andServicesTaxAct.Sec2(98)ofCGSTAct.
•TheGovernmentmay,ontherecommendationsoftheCouncil,bynotification,specifycategories
ofsupplyofgoodsorservicesorboth,thetaxonwhichshallbepaidonreversechargebasisby
therecipientofsuchgoodsorservicesorbothandalltheprovisionsofthisActshallapplyto
suchrecipientasifheisthepersonliableforpayingthetaxinrelationtothesupplyofsuchgoods
orservicesorboth.Sec9(3)ofCGSTAct
•TheGovernmentmay,ontherecommendationsoftheCouncil,bynotification,specifyaclassof
registeredpersonswhoshall,inrespectofsupplyofspecifiedcategoriesofgoodsorservicesor
bothreceivedfromanunregisteredsupplier,paythetaxonreversechargebasisastherecipientof
suchsupplyofgoodsorservicesorboth,andalltheprovisionsofthisActshallapplytosuch
recipientasifheisthepersonliableforpayingthetaxinrelationtosuchsupplyofgoodsor
servicesorboth.”.Sec9(4)ofCGSTAct

72. Provision of law 72
•RegistrationRules→AsperSec24oftheCGSTAct,2017,apersonwhoisrequiredtopaytax
underreversechargehastocompulsorilyregisterunderGSTirrespectiveofthethresholdlimitof
registration.
•InvoicingRules→IntermsofSec31(3)(f)oftheCGSTAct,2017,aregisteredpersonwhois
liabletopaytaxunderSec9(3)orSec9(4)oftheCGSTAct,shallissueaninvoiceinrespectof
goodsorservicesorbothreceivedbyhimfromthesupplierwhoisnotregisteredonthedateof
receiptofgoodsorservicesorboth.Suchregisteredpersonshallissueapaymentvoucheratthe
timeofmakingpaymenttothesupplier.
•TimeofSupplyofpayment→TheliabilitytopaytaxonRCMbasisshallariseasperthe
provisionsoftimeofsupplyunderSec12(3)andSec13(3)ofCGSTAct.Theliabilityhastobe
dischargedthroughcashpaymentonly.
•Inputtaxcredit→GSTpaidongoodsorservicesunderRCMisavailableasITCtotheregistered
personprovidedthatsuchgoodsorservicesareusedinthecourseorfurtheranceofbusiness.

73. Provision of law 73
•CompliancestoGSTlaws
•Everytaxinvoicehastomentionwhetherthetaxinrespectofsupplyintheinvoiceispayableon
reversecharge.Similarly,thisalsoneedstobementionedinreceiptvoucheraswellasrefundvoucher,if
taxispayableonreversecharge.Sec31ofCGSTActreadwithRule46ofCGSTRules
•Everyregisteredpersonisrequiredtokeepandmaintainrecordsofallsuppliesattractingpaymentof
taxonreversecharge.
•Anyamountpayableunderreversechargeshallbepaidbydebitingtheelectroniccashledger.Reverse
chargeliabilitycannotbedischargedbyusinginputtaxcredit.However,afterdischargingreversecharge
liability,creditofthesamecanbetakenbytherecipient,ifheisotherwiseeligible.
•Invoicelevelinformationinrespectofallsuppliesattractingreversecharge,ratewise,aretobe
furnishedseparatelyincolumn4BofGSTR-1.
•AdvancepaidforreversechargesuppliesisalsoleviabletoGST.Thepersonmakingadvancepayment
hastopaytaxonreversechargebasis.

74. Goods notified under RCM 74
Sl
No.
Description Supplier of goods Recipient of goods
1Cashew nuts, not shelled or peeled Agriculturist Any registered person
2Bidi wrapper leaves(tendu) Agriculturist Any registered person
3Tobacco leaves Agriculturist Any registered person
4Silk Yarn Any manufacturer Any registered person
5Raw Cotton Agriculturist Any registered person
6Supply of Lottery State/ UT Govt or any local
authority
Lottery distributor or selling
agent
7Used vehicles seized and confiscated goods, old and
used goods, waste and scrap
Central Govt. State/ UT
Govt, any local authority
Any registered person
8Priority Sector Lending Certificates Any registered personAny registered person

75. Services notified under RCM 75
Sl
No.
Description Supplier of services Recipient of services
1Transportation of goods by road Goods Transport Agency
(GTA)
7 notified recipients
2Legal services, directly or indirectly Individual advocate including
a senior advocate or firm of
advocates.
Any business entity located
in the taxable territory
3Arbitral Services An Arbitral tribunal Any business entity located
in the taxable territory
4Sponsorship Services Any person Any body corporate or
partnership firm located in
the taxable territory
5Government Services except DoPTservices,
aircraft/ vessel services, goods/ passengers transport
Central Govt, State/ UT
Govt or Local Authority
Any business entity located
in the taxable territory
6Services by Govt by way of renting of immovable
property
Central Govt, State/ UT
Govt or Local Authority
Any registered person

76. Services notified under RCM 76
Sl
No.
Description Supplier of services Recipient of services
7Transfer of development rights or Floor Space Index
(FSI) for construction of a project by a promoter.
Any person Promoter
8Long term lease of land (30 years or more) against
consideration in the form of upfront amount and/or
periodic rent for construction of a project
Any person Promoter
9Services by the Director A director of a companyA body corporate located in
the taxable territory
10Insurance Agent services An insurance agent Person carrying on insurance
business
11Recovery agent services A recovery agent Banking Company, financial
Institution, NBFC
12Copyright Services Music composer,
photographer, artist
The Music company,
producer located in the
taxable territory.

77. Services notified under RCM 77
Sl
No.
Description Supplier of services Recipient of services
13Supply of services by an author by way of transfer/
permitting use of a copyright
Author Publisher
14Reserve Bank services Members of Overseeing
Committee constituted by
RBI
Reserve Bank of India
15Services by DSAs Individual DSAs A banking company or
NBFC
16Services provided by Business Facilitator (BF) to a
banking company.
Business Facilitator A banking company, located
in the taxable territory
17Services provided by an agent of Business
Correspondent to Business Correspondent
An agent of Business
Correspondent (BC).
A business correspondent,
located in the taxable
territory
18Security Services (services provided by way of supply
of security personnel) by unregistered person
Any person other than a
body corporate.
A registered person, located
in the taxable territory.

78. Services notified under RCM 78
Sl
No.
Description Supplier of services Recipient of services
19Services provided by way of renting of any motor
vehicle designed to carry passengers (including cost
of fuel)
Any person, other than a
body corporate *
Any body corporate located
in the taxable territory
20Services of lending securities under Securities
Lending scheme, 1997 of SEBI
Lender Borrower
21Service supplied by any person who is located in a
non-taxable territory to any person other than non-
taxable online recipient.
Any person located in a non-
taxable territory.
Any person located in the
taxable territory other than
non-taxable online recipient.
22Services supplied by a person located in non-taxable
territory by way of transportation of goods by a
vessel from a place outside India up to the Customs
Station of clearance in India
A person located in a non-
taxable territory
Importer

79. Supply from unregistered person -RCM 79
Notification [ Sec 9(4) of CGST Act & Sec 5(4) of IGST Act]
•Incaseofprojectsorconstructionofapartmentsfallingunderaffordableschemeorlower
taxratescheme,
•80%ofgoodsandservices[otherthanTDR,FSI,long-termlease(premium),Electricity,HSD,Natual
Gasetc.]shallbepurchasedfromregisteredpersons.Anyshortfallfromthe80%threshold,the
promotershalldischargethedifferentialtaxonRCMbasisat18%.
•Capitalgoodsreceivedfromunregisteredperson,thetaxtobedischargedunderRCMatapplicable
ratesbythepromoter
•Cementreceivedfromunregisteredperson,thetaxtobedischargedunderRCMat
applicableratesbythepromoter.

80. Services by E-Commerce Operator 80
•Followingcategoriesofservices,thetaxonintra-State/inter-statesuppliesshallbepaidby
theE-CommerceOperator[Sec9(5)ofCGSTAct&Sec5(5)ofIGSTAct]
Sl
No.
Description Supplier of servicesPerson liable to pay GST
1Transportation of passengers by a radio-taxi, motorcab,
maxicaband motor cycle
Any person E-Commerce Operator
2Accommodation in hotels, inns, guest houses, clubs,
campsites or other commercial places meant for
residential or lodging purposes
Unregistered personE-Commerce Operator
3Services by way of house-keeping, such as plumbing,
carpentering etc.
Unregistredperson E-Commerce Operator

81. Composition
Scheme

82. What is Composition Scheme? 82
•CompositionlevyisanalternatemethodofthelevyofGST,designedspecificallyfor
smallmanufacturers,tradersandserviceproviders.
•Itisaschemeunderwhichthereisanoptiontopaytaxesinlieuofthenormalrate
applicableforthegoodsandservices.
•Personhavingeligibleaggregateturnover*canoptforthescheme.Theturnover,forthis
purpose,istobeseenforthepreviousfinancialyear.
•NormalCompositionScheme-Rs.1.5Crperannum/Rs.75lacsforspecialstates
•‘Alternate’Compositionscheme–Rs.50Lacsperannum
*Valueofinterestordiscountarrivedatduetoextendingdeposits,loansandadvancesnottobeconsideredwhile
calculatingturnover

83. Salient features 83
•Limitedcompliances
•QuarterlyReturninformGSTCMP-08givingsummaryofOutward&Inwardsuppliesandtaxthereof.Pay
thetaxbythe18
th
ofthemonthsucceedingthequarter.
•ReturnforthefinancialyearinformGSTR-4andanannualreturninformGSTR-9A.
•Noneedformaintainingdetailedrecords
•NoneedtowaitforsupplierstofilereturnstomatchITCetc.
•ThepersonoptingforCompositionschemeshallnotcollectanytaxfromtherecipientw.r.t.the
suppliesmade.
•SuchpersonisnotentitledforanyInputTaxCreditfortheinwardsupplies.Further,heisrequired
todischargetheRCMliability,asapplicable.
•AslongasthepersoniswithintheprovisionsoftheScheme,thereisnoneedtofilefresh
intimationforcontinuationeveryyear.
•Theoptionshalllapsewitheffectfromthedayonwhichtheaggregateturnovercrossesthe
thresholdlimit.

84. Restrictions 84
•IncaseofmultipleregistrationsunderthesamePANnumber,uniformityofoptingeitheras
regularregistrationorregistrationunderCompositionschemeforalltheentitiesregisteredunder
thesaidPANnumbertobemaintained.
•Schemeisapplicableonsupplyofgoodsandsupplyofservices(withcertaincaveats)
•PersonshouldnotbeengagedinsupplyofgoodsorservicesnotleviabletoGSTundertheAct.
•Can’tmakeinter-stateoutwardsuppliesofgoodsorservices.
•Can’tsupplygoodsorservicesthroughE-CommerceOperatorwhoisrequiredtocollecttaxat
sourceu/s52oftheAct.
•PersonisnotaCasualTaxablePersonoraNon-ResidentTaxablePerson
•PersonisnotmanufacturerofgoodsorsupplierofservicesasnotifiedbytheGovernment.
•“BillofSupply”tobeissued.“CompositionTaxablePersonnoteligibletocollecttaxonsupplies”
tobewrittenontheBillofSupplyissued.

85. Normal Composition Scheme 85
•AggregateTurnover*thresholdlimit–Rs.1.5Crperannum/Rs.75lacsforSpecialstates
(tobecalculatedforpreviousyear)
•MaysupplyServices(otherthanF&Bservices,excludingliquor)ofvaluenotexceeding
10%oftheturnover**inaStateintheprecedingfinancialyearorRs.5lacs,whicheveris
higher.**(Valueofsupplyofanyexemptservicesincludinginterestordiscountarrivedatduetoextendingdeposits,
loansandadvancesnottobeconsideredwhilecalculatingturnover)
•Rateoftaxapplicable
•Manufacturers–1%oftheturnover
•F&Bservices–5%oftheturnover
•Anyothersuppliers–1%oftheturnover(excludingthevalueofexemptsupplies)

86. ‘Alternate’ Composition Scheme 86
•AggregateTurnover*thresholdlimit–Rs.50Lacsperannum(tobecalculatedfor
previousyear)
•Maysupplygoodsorservicesorboth.
•Rateoftaxapplicable–6%oftheturnover(excludingthevalueofinterestarrivedatduetoextending
deposits,loansandadvances)
•TheprovisionscontainedinChapterIIoftheCGSTRulesshall,mutatismutandis,applyto
personspayingtaxbyavailingthebenefitofthisscheme,excepttotheextentspecified
above.
•Theturnoverthresholdforthepurposeofdeterminingthetaxslabshallbecalculated
from1
st
Aprilofafinancialyear.Tax,however,shallbepayableonlyonsuppliesfromthe
dateofregistration.

87. Procedure -Registration 87
•Incaseofmigrationfromerstwhilelawontheappointeddate,intimationtobeprovided
informGSTCMP-01,priortotheappointedday,butnotlaterthan30daysafterthesaid
day.
•Incaseofnewregistration,thepersonmaygiveanoptioninPartBofformGSTREG-
01.ThisshallbedeemedtobetheintimationtoenrolforCompositionScheme.
•EffectivedateoflevyshallbefromthedatefixedandprovidedintheCertificateissuedin
formGSTREG-06.
•Forthepurposeofcomputingaggregateturnover,suppliesfrom1
st
Aprilofafinancial
yearuptothedatewhenthepersonregisters,shallalsobeconsidered.
•Liabilitytopaytaxesarisesprospectivelyfromthedateofregistration.

88. Procedure –Normal to Composition 88
•IntimationinformGSTCMP-02priortothecommencementofthefinancialyear(orthe
dateasnotified).
•DetailsofInputTaxcreditrelatingtoinputsheldinstock,inputscontainedinsemi-
finished/finishedgoodsandcapitalgoodsinformGSTITC-03within60daysfromthe
commencementoftherelevantfinancialyear(orthenotifieddate).
•Effectivedateoflevyshallbefromthebeginningofthefinancialyear.

89. Procedure –Composition to Normal 89
•IntimationinformGSTCMP-04
•Within7days,incaseofcrossingtheturnoverthresholdlimit
•Priortodateofwithdrawal,incaseofvoluntarywithdrawal
•IncasetheproperofficerdeemthatthepersonisnoteligibleforCompositionScheme,
showcausenoticeisissuedinformGSTCMP-05toberespondedwithin15daysofthe
notice.
•NoticetoberespondedinformCMP-06andtheproperofficershallpasstheorderin
formGSTCMP-07within30days,eitheracceptingtheresponseordenyingtheoption.
•StatementinformGSTITC-01containingdetailsofthestockofinputsandinputs
containedinsemi-finished/finishedgoodsheld,tobefurnishedwithin30days.

90. Composition Scheme
Advantages
▪Lesser compliances (Returns,
maintaining Books etc.)
▪Limited tax liability
▪Lower tax rate may help in higher
liquidity/ profitability
Disadvantages
▪Limited territory to operate.
▪No Input Tax Credit available
▪Restrictions on businesses to
operate on
▪Restriction on supplies through E-
Commerce Operator
90

91. HSN/ SAC
Code

92. What is HSN/ SAC Code? 92
•HSN–HarmonisedSystemofNomenclature(applicableforGoods)
•SAC–ServiceAccountingCode(applicableforServices)
•HSNorHSisamultipurposeinternationalproductnomenclaturedevelopedbytheWorld
CustomsOrganisation(WCO)
•WCOhas183Members,three-quartersofwhicharedevelopingcountries,areresponsible
formanagingmorethan98%ofworldtrade.
•IndiahasbeenamemberofWCOsince1971andhasbeenusingHSNCodesince1986
toclassifycommoditiesforCustomsandCentralExcise.

93. HSN/ SAC Code under GST 93
•UnderGST,goodsandservicesisclassifiedonthebasisofHSNcodeandSACCode
respectively.
•TheCustomsTariffActisbasedonHSNandisusedtoclassifygoodsunderGST.The
GSTratesarenotifiedonthebasisofCustomsTariff.
•Schemeofclassificationofservices,asreleasedbytheGovernment,isusedtoclassify
servicesandtheSACCodesaccordingly.GSTratesarenotifiedaccordingly.
•SACcodehasbeendefinedseparatelyforeaseofunderstandingandbifurcatinggoods
andservices.Technically,SACcodesispartofthelargerHSNuniverse,butarespecified
separately.
•AnychangesorformulationoradditionofnewcodesinHSNCodesarecarriedoutby
DGFT(DirectorateGeneralofForeignTrade)inaccordancewiththeguidelinesfromthe
WCO.

94. HSN/ SAC Code 94
•HSN/SACcodestandardisestheclassificationofgoodsandservices,under
•Section
•Chapters
•Headings
•Sub-headings
•Thereare21sectionsinHSNCodes,dividedin99Chapterswhereineachchapterdefinesa
specificcategoryofaproduct.
•Thesectionsandchaptersarearrangedinorderofproduct’sdegreeofmanufacturerorinterms
ofitstechnologicalcomplexity.Forexample,naturalproductsappearintheearliersectionand
itemslikemachineryappearslater.
•Thesectionrepresentsthebroaderclassificationandthechapterrepresentaparticularclassof
goods.Further,thechapterisdividedintoheadingsandsubheadingsdependingonthedifferent
typesofgoodsbelongingtothesameclass.

95. HSN Code 95
•It’sa6digitcodewhere
•First2digitsrepresentsthechapter
•Thenext2digitsrepresentstheheading
•Thelast2digitsrepresentsthesub-heading
•CustomsandCentralExciseadded2moredigitstomakethecodesmoreprecise,resulting
inaneightdigitclassificationforcommodities.
•SectionXI–TextileandTextileProducts
•Chapter50–Silk
•Heading03–SilkWaste
•Sub-heading00–Othersilkwaste
•Sub-subheading10–Mulberrysilkwaste

96. HSN Code 96
•SectionI(Chapters1to5)-Animalsandanimalproducts
•SectionII(Chapters6to14)-Vegetableproducts
•SectionIII(Chapter15)-Animalorvegetablefatsandoils
•SectionIV(Chapters16to24)–Preparedfoodstuffs,beverages,spirits,vinegar,andtobacco
•SectionV(Chapters25to27)-Mineralproducts
•SectionVI(Chapters28to38)-Chemicalandpara-chemicalproducts
•SectionVII(Chapters39to40)-Plasticsandrubberandarticlesthereof
•SectionVIII(Chapters41to43)-Animalhides,skins,leatherproducts
•SectionIX(Chapters44to46)-Wood,cork,strawandarticlesthereof
•SectionX(Chapters47to49)-Pulpofwood,paper,paperboardandprintedproducts
•SectionXI(Chapters50to63)-Textilesandtextilearticles

97. HSN Code 97
•SectionXII(Chapters64to67)-Footwear,headgear,umbrellas,artificialflowersandarticlesofhumanhair
•SectionXIII(Chapters68to70)-Articlesmadeofminerals,plaster,cement,ceramicandglassproducts
•SectionXIV(Chapter71)-Preciousmetalsandstones
•SectionXV(Chapters72to83)-Basemetalsandarticlesthereof
•SectionXVI(Chapters84to85)–Machinery,mechanicalappliances,electricalequipment,partsand
accessoriesofsucharticles
•SectionXVII(Chapters86to89)-Vehicles,aircraft,vessels,andassociatedtransportequipment
•SectionXVIII(Chapters90to92)-Optical,photographic,cinematographic,musicalapparatusand
equipment;measuring,medical,surgical,andotherinstruments;andclocksandwatches
•SectionXIX(Chapter93)-Armsandammunitions
•SectionXX(Chapters94to96)-Miscellaneousmanufacturedarticleslikefurniture,toysetc.
•SectionXXI(Chapters97to99)–WorkofArt,collectors’piecesandantiques,[Chapter99–SACCodes]

98. Classification rules 98
•Classificationistobearrivedbasistariffentry,sectionnotesandchapternotesprovided.
•Incaseclassificationisnotpossible,GeneralInterpretativeRules(GIR)isapplied.Therulesare
appliedsequentially.
•Rule1–Titleofsections,chapters/sub-chaptersareprovidedforeaseofreferenceonly.Forlegal
purposes,refertoheadingsandsub-headingstodriveclassification.Ifthemeaningisnotclear,
refertotradepractices/parlance,technicalordictionarymeanings,BISorotherstandardsetc.
•Rule2a-Ifthegoodsareincomplete/unfinishedandhavethecharacteristicsofthefinished
product,classificationisthesameasthatofthefinishedproduct(iftheclassificationisknown).
Theheadingshallalsoincluderemoved/unassembledordisassembledparts(i.e.,SKD/CKD).
•Rule2b-Anyreferencetoamaterialorsubstanceincludesareferencetomixturesor
combinationsofthatmaterialorsubstancewithothermaterialsorsubstances.Theclassification
ofgoodsconsistingofmorethanonematerialorsubstanceshalltakeplaceasperRule3.

99. Classification rules 99
•Rule3a-Choosingaspecificheadingispreferredoverageneralheading.Forexample,85.10isthe
classificationfor"shavers,hairclippersandhairremovingappliances,withself-containedelectric
motor”.Thisisamorespecificclassificationforahandheldelectricrazorthaneither:84.67:"tools
forworkinginthehand,pneumatic,hydraulicorwithself-containedelectricornon-electricmotor”
or85.09:"electro-mechanicaldomesticapplianceswithself-containedelectricmotors,otherthan
vacuumcleaners”.
•Rule3b-Mixtures/compositegoodsshouldbeclassifiedasperthematerialorsubstancethat
givesthemtheiressentialcharacter.Eg.agroomingkitconsistingofelectrichairclippers(85.10),a
comb(96.15)andabrush(96.03)insidealeathercase(45.02)shouldbeclassifiedundertheelectric
hairclippersheading(85.10).
•Rule3c-Iftwoheadingsareequallysuitedtotheitem,choosetheheadingthatappearslastin
numericalorder.
•Rule4-Ifgoodscannotbeclassifiedpertheaboverules,theyaretobeclassifiedaccordingtothe
goodstowhichtheyaremostakin.Thisisessentiallyalastresort/remedytoresolveclassification.

100. Classification rules 100
•Rule5-Containersspecificallydesignedforthearticleandsuitableforlong-termusewill
beclassifiedalongwiththatarticle,ifsucharticlesarenormallysoldalongwithsuchcases.
Forexample,acameracasewouldfallundercameras.Packingmaterialsandcontainersare
alsotobeclassifiedwiththerelatedgoodsexceptwhenthepackingisforrepetitiveuse.
•Rule6–Sub-headingscanbecomparedonlyatthesamelevel.Ifoneheadingcontains5-
6sub-headings,thesesubheadingscanbecomparedwitheachother.However,thesesub-
headingscannotbecomparedwithsub-headingsunderadifferentheading.
•Classificationofpartsissubjecttonoteinthesectionsandchapters.Broadly,parts
suitablesolelyforaparticularmachinegenerallyfallsinthesameheadingnumberinwhich
themainitemfalls.However,partsforgeneralusearenottobeclassifiedaspartofa
specificitem.

101. SAC Code 101
•UnderCustomsTariff,Chapter1-98isusedforgoodsandChapter99isreservedfor
services.
•SchemeofclassificationofserviceshasbeennotifiedbyGovernmentasperAnnexureto
Notification11/2017–CentralTax(Rate)
•SACCodesareclassifiedunder5sections.ThisformsthethirddigitintheSACcode
•Section5–ConstructionServices
•Section6–DistributiveTradeservices,Accommodation,Foodservices,Transportservices
•Section7–Financialandrelatedservices,RealEstate,Rentalservices
•Section8–Businessandproductionservices
•Section9–Community,social&personalservicesandmiscellaneousservices

102. SAC Code 102
•Eachsectionisdividedintoheading(fourthdigit).Theyarefurtherdividedintogroup
(fifthdigit).Afurtherdivisionismadetoarriveatthetariffitem(sixthdigit).
•Chapter99–SACCode
•Section6–Transportservices
•Heading4–PassengerTransportServices
•Group1–Localtransportandsightseeingtransportationservicesofpassengers
•Tariffitem2-Taxiservicesincludingradiotaxi&othersimilarservices

103. Using HSN/ SAC Code 103
•VideNotification12/2017–CentralTax,theGovernmenthasnotifiedtheusageofHSN
Codefortaxinvoiceas
•DealerswithturnoveroflessthanRs1.5crores–Notmandatory.
•DealerswithturnoverbetweenRs1.5croresandRs5crores-two-digitHSNcodes
•DealerswithturnoverequaltoRs5croresandabove-four-digitHSNcodes
•Inthecaseofimports/exportsofgoods,HSNcodesofeightdigitsshallbecompulsory,
asGSThastobecompatiblewithinternationalstandardsandpractices.

104. Using HSN/ SAC Code 104
•VideNotification78/2020–CentralTax,w.e.f.1
st
April2021,theGovernmenthas
notifiedtheusageofHSNCodefortaxinvoiceas
•DealerswithturnoveruptoRs.5Cr.–fourdigits
•DealerswithturnoverequaltoRs5croresandabove–Sixdigits
•FordealerswithturnoveruptoRs.5Cr.,HSNCodeisnotmandatoryincaseoftax
invoiceissuedtounregisteredperson.
•Inthecaseofimports/exportsofgoods,HSNcodesofeightdigitsshallbecompulsory,
asGSThastobecompatiblewithinternationalstandardsandpractices.

105. Thank You
Manmohan Daga
Daga & Associates
9804199500
[email protected]