GOODS AND SERVICE TAX ACT, 2017

( including CGST, SGST, IGST)

 Dual GST System
 Destination based taxing System
 Legislations :
1. Central – CGST Act,2017
2. State – Respective SGST Act,2017
3. UTGST with legislature – Respective SGST .
4. UTGST without legislature – UTGST Act,2017
5. Between states and/or UT – IGST Act, 2017
Article 279A provides for constituting a Council called the Goods and
Services Tax Council within 60 days from date of commencement of
101st Constitution Amendment Act, 2016.
Members are as follows :-
(a) the Union Finance Minister as Chairperson;
(b) the Union Minister of State in charge of Revenue or Finance;
(c) the Minister in charge of Finance or Taxation or any other
Minister nominated by each State Government.
(d) Vice Chairperson to be chosen among the members.

GST Council can make recommendations on the following:

The taxes, cesses and surcharges that may be subsumed;
The goods and services that may be subjected to or exempted
from GST;
Model Goods and Services Tax Laws, principles of levy,
apportionment of Goods and Services Tax
levied under Article 269A and the principles that govern the
place of supply;
The threshold limit of turnover below which goods and services may
be exempted;
Rates, floor rates, band, special rates;
Special provision with respect to the States of Arunachal Pradesh,
Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland,
Sikkim, Tripura, Himachal Pradesh and Uttarakhand
Date on which GST be levied on petroleum crude, HSD, Petrol,
natural gas and ATF and
Any other matter relating to the goods and services tax, as the
Council may decide.

OTHER IMPORTANT ROLES OF GST COUNCIL:

•The GST Council to be guided by the need for a harmonised structure
of goods and services tax and for the development of a harmonised
national market for goods and services.
•GST Council to devise mechanisms to adjudicate disputes arising
between the Centre and States
 Aggregate Turnover –means the aggregate value of
all taxable supplies, exempt supplies, export of
goods and/or services and inter-state supplies of a
person having the same PAN, and excludes taxes, if
any charged under the CGST Act, SGST Act, and the
IGST Act, and Cess as the case may be [Section 2(6)]

 Business- includes any trade, commerce,

manufacture, profession, vocation, adventure, wager
or any other similar activity, whether or not it is for a
pecuniary benefit; and whether or not there is
volume, frequency, continuity or regularity of such
transactions; supply of acquisition of Capital Assets
and services in connection with commencement or
closure of business [Section 2(17)]
 Composite Supply – means a supply made by
a taxable person to a recipient comprising
two or more supplies of goods or services, or
any combination thereof, which are naturally
bundled and supplied in conjunction with
each other in the ordinary course of business,
one of which is a principal activity. [S. 2(30)]
 E.g. Goods packed and transported with
insurance
 Mixed Supply - means two or more individual
supplies of goods or services, or any
combination thereof, made in conjunction
with each other by a taxable person for a
single price where such supply does not
constitute a composite supply. [S. 2(74)]
 E.g. Supply of food packet containing cakes,
chocolates and aerated water together
Consideration - in relation to the supply of goods
or services includes:
 Any payment made or to be made, whether in
money or otherwise, in respect of, in response to,
or for inducement of, the supply of goods and/or
services, whether by recipient or by any other
person but shall not include any subsidy given by
the Central Government or a State Government.
 PROVIDED that a deposit given in respect of the
supply of goods or services or both shall not be
considered as payment made for such supply
unless the supplier applies the deposit as
consideration for the said supply. [Section 2(31)]
 Electronic Commerce – means the supply of goods or
services or both, including digital products over
digital or electronic network. [Section 2(44)]
 Electronic Commerce Operator – means any person
who owns, operates or manages digital or electronic
facility or platform for electronic commerce.[S. 2(45)]
E.g.: OLA, UBER, SWIGGY, FLIPKART etc.

Government may, on the recommendations of the

Council, by notification, specify categories of services
the tax on intra-State supplies of which shall be paid by
the electronic commerce operator if such services are
supplied through it, and all the provisions of this Act
shall apply to such electronic commerce operator as if
he is the supplier liable for paying the tax in relation to
the supply of such services. [Sec 9(5)] - RCM
 Exempt Supply – comprise the following 3 types of
supplies:
• Supplies taxable at a ‘NIL’ rate of tax;
• Supplies that are wholly exempted from s.11, CGST or
s.6, IGST, by way of a notification;
• Non-taxable supplies as defined under Section 2(78) –
supplies that are not taxable under the Act (viz.
alcoholic liquor for human consumption) [S. 2(47)]

 Fixed Establishment – means a place (other than the

registered place of business) which is characterized
by a sufficient degree of permanence and suitable
structure in terms of human and technical resources
to supply services, or to receive and use services for
its own needs [Section 2(50)]
 Location of Recipient of Services – means

where a supply is received at a place of business for

which the registration has been obtained, the location of such
place of business;

where a supply is received at a place other than the

place of business for which registration has been obtained (a
fixed establishment elsewhere), the location of such fixed
establishment;

where a supply is received at more than one

establishment, whether the place of business or fixed
establishment, the location of the establishment most
directly concerned with the receipt of the supply; and

in absence of such places, the location of the usual

place of residence of the recipient [Section 2(70)]
 Location of Supplier of Services – means

where a supply is made from a place of business for

which the registration has been obtained, the location of such
place of business;

where a supply is made from a place other than the

place of business for which registration has been obtained (a
fixed establishment elsewhere), the location of such fixed
establishment;

where a supply is made from more than one

establishment, whether the place of business or fixed
establishment, the location of the establishment most
directly concerned with the provisions of the supply; and

in absence of such places, the location of the usual

place of residence of the supplier [Section 2(71)]
 Goods means every kind of movable property other than
money and securities but includes actionable claim,
growing crops, grass and things attached to or forming
part of the land which are agreed to be severed before
supply or under a contract of supply. [Section 2(52)]

 Services means anything other than goods, money and

securities but includes activities relating to the use of
money or its conversion by cash or by any other mode,
from one form, currency or denomination, to another
form, currency or denomination for which a separate
consideration is charged. [Section 2(102)]

 Reverse Charge means the liability to pay tax by the

recipient of supply of goods or services or both instead of
the supplier of such goods or services or both under sub-
section (3) or sub-section (4) of section 9 of CGST or
under sub-section (3) or sub-section (4) of section 5 of
IGST Act [Section 2(98)]
• There shall be levied a tax called the central goods and services tax
on all intra-State supplies of goods or services or both, except on
the supply of alcoholic liquor for human consumption, on the value
determined u/s15 and at such rates, not exceeding 20%, as may be
notified by the Government on the recommendations of the Council
and collected in such manner as may be prescribed and shall be paid
by the taxable person.
• Tax on petroleum products shall be levied w.e.f such date as
notified by the Government on the recommendations of the Council.
• The Government may specify categories of supply of goods or
services or both, the tax on which shall be paid on reverse charge
basis by the recipient of such goods or services or both
• The Government may specify a class of registered persons who
shall, in respect of supply of specified categories of goods or
services or both received from an unregistered supplier, pay the tax
on reverse charge basis as the recipient of such supply of goods or
services or both
•The Government may, on the recommendations of the Council, by
notification, specify categories of services the tax on intra- State
supplies of which shall be paid by the electronic commerce operator
if such services are supplied through it, and all the provisions of this
Act shall apply to such electronic commerce operator as if he is the
supplier liable for paying the tax in relation to the supply of such
services.
•Provided that where an electronic commerce operator does not
have a physical presence in the taxable territory, any person
representing such electronic commerce operator for any purpose
in the taxable territory shall be liable to pay tax:
•Provided further that where an electronic commerce operator
does not have a physical presence in the taxable territory and
also he does not have a representative in the said territory, such
electronic commerce operator shall appoint a person in the
taxable territory for the purpose of paying tax and such person
shall be liable to pay tax.
TAX PAYABLE BY ECO ON NOTIFIED SERVICES

When a consumer places an order for a particular product/ service on this

electronic portal, the actual supplier supplies the selected product/ service to the
consumer. The price/ consideration for the product/ service is collected by the
ECO from the consumer and passed on to the actual supplier after the deduction of
commission by the ECO.
• Notif No. 17/ 2017
1. services by way of transportation of passengers
2. services by way of providing accommodation
3. services by way of house-keeping, such as plumbing, carpentering etc
4. supply of restaurant service other than the services supplied by restaurant,
eating joints etc. located at specified premises

Tax on above services supplied through ECO shall be paid by the ECO. All the
provisions of the CGST/IGST Act shall apply to such ECO as if he is the supplier
liable for paying the tax in relation to the supply of above services.
The ECO may, on services notified under section 9(5), including on restaurant
service provided through ECO, pay GST, by furnishing the details in Form GSTR-3B,
reporting them as outward taxable supplies.
 TAXABLE EVENT - SUPPLY – SEC 7
SUPPLY [ Sec. 2(95)]

SCOPE OF SUPPLY (Section 7)

Supply includes,
1. All forms of supply of goods and/or services such
as sale, transfer, barter, exchange, license, rental, lease or disposal
made or agreed to be made for a consideration by a person in the
course or furtherance of business.
2. A supply specified in Schedule I, made or agreed to
be made without a consideration
3. Activities in Schedule II

Supply does not include,

1 .Activities or transactions specified in Schedule III;
2. Activities or transactions undertaken by the Govt. in
which they are engaged as public authorities as specified in
Schedule IV
SCHEDULE I - A SUPPLY WITHOUT A
CONSIDERATION
1. Permanent transfer or disposal of business assets where input tax
credit has been availed on such assets.
2. Supply of goods or services or both between related persons or
between distinct persons as specified in section 15(5), when made
in the course or furtherance of business. Provided that gifts not
exceeding fifty thousand rupees in value in a financial year by an
employer to an employee shall not be treated as supply of goods or
services or both.
3. Supply of goods— a) by a principal to his agent where the agent
undertakes to supply such goods on behalf of the principal; or b) by
an agent to his principal where the agent undertakes to receive such
goods on behalf of the principal.
4. Import of services by a taxable person from a related person or
from any of his other establishments outside India, in the course or
furtherance of business.
SCHEDULE II – ACTIVITIES TREATED AS
SUPPLY
1. Transfer of
- Title in Goods
- Rights in goods without title
- title in goods under agreement that property shall pass at a
future date upon full payment of consideration
2. Land & Building
3. Treatment or Process applied to another persons’ goods
4. Transfer of Business Assets
- Transferred or disposed, put to private use, ceases to be a
taxable person
5. Composite Supply
- Works contract
- Supply of food and other articles for human consumption
 SCHEDULE III – NEGATIVE LIST
1) Services by an employee to the employer in the course of or in relation
to his employment.
2) Services by any court or Tribunal established under any law for the time
being in force.
3) The functions performed by the Members of Parliament, Members of
State Legislature, Members of Panchayats, Members of Municipalities and
Members of other local authorities; The duties performed by any person
who holds any post in pursuance of the provisions of the Constitution in
that capacity; or By any person as a Chairperson or a Member or
a Director in a body established by the Central Government or a State
Government or local authority and who is not deemed as an employee.
4) Services of funeral, burial, crematorium or mortuary including
transportation of the deceased.
SCHEDULE III – NEGATIVE LIST

5) Sale of land and, subject to clause (b) of paragraph 5 of Schedule II,

sale of building.
6) Specified Actionable claims
7) Supply of goods from a place in the non-taxable territory to another
place in the non-taxable territory without such goods entering into India.
8) (a) Supply of warehoused goods to any person before clearance
for home consumption;
(b) Supply of goods by the consignee to any other person, by
endorsement of documents of title to the goods, after the goods have
been dispatched from the port of origin located outside India but before
clearance for home consumption.
TAXABLE EVENT - SUPPLY – SEC 7

The Central or a State Government may, upon

recommendation of the Council, specify, by
notification, the transactions that are to be treated
as—

a supply of goods and not as a supply of services;

or
a supply of services and not as a supply of goods;
or
neither a supply of goods nor a supply of services.
TAXABLE PERSON [Section2(107)]
 Under GST law, the concept of taxable person is
significant because tax on supplies of goods and
services, is to be paid by a taxable person.
 Taxable Person means a person who is registered or
liable to be registered under section 22 or section 24.
 Taxable persons –
Registered persons.
Persons liable to registration.
Voluntarily registered persons .
TAXABLE SUPPLY [Section2(108)]
Registration will confer the following advantages to a
taxpayer:
 Identification of a Tax Payer ensuring tax compliance.
 He is legally recognized as supplier of goods or services.
 He is legally authorized to collect tax from his customers
and pass on the credit of the taxes paid on the goods or
services supplied to the purchasers/ recipients. [ANTI
PROFITEERING]
 He can claim input tax credit of taxes paid on his
purchases / procurements and can utilize the same for
payment of taxes due on supply of goods or services.
 Seamless flow of Input tax credit from suppliers to
recipients at the national level.
1. Person liable for registration (sec.22)
2. Persons not liable (sec.23)
3. Compulsory registration in certain cases (sec.24)
4. Procedure of registration (sec.25)
5. Deemed registration (sec.26)
6. Registration for casual taxable or non- resident taxable
person (sec.27)
7. Amendment of Registration (sec.28)
8. Cancellation of registration (sec.29)
9. Revocation of cancellation of registration (sec.30)
A supplier to compulsorily register if his aggregate turnover
exceeds the threshold limit for the FY. Different threshold
limits for different states/ UTs depending on whether supplier
is engaged in supply of goods exclusively or supply of
services exclusively or supply of both.
s. 2(105) - “Supplier” in relation to any goods or services or both, shall
mean the person supplying the said goods or services or both and shall
include an agent acting as such on behalf of such supplier in relation to the
goods or services.
A supplier is required to obtain registration with respect to his each place
of business in India(State/UT) from where he is doing a taxable supply.
However, he is not liable to obtain registration in a State/UT from where he
only makes an exempt/non-taxable supply.
s. 2 (85) - Place of Business includes-
1. A place from where the business is ordinarily carried on, and
includes a warehouse, a godown or any other place where a taxable person
stores his goods, supplies or receives goods or services or both; or
2. A place where a taxable person maintains his books of account;
or 3. A place where a taxable person is engaged in business through
an agent, by whatever name called.
Persons liable for registration - Section 22 of CGST

Section 22(1)- Suppliers

• Every suppliers making supply of goods and services

or both should be registered in the state or UT from
where he makes a taxable supply.
• Only if his aggregate turnover in a FY exceeds the
Threshold limits.
• Threshold Limit :
States and UT – 20 Lakhs
Special Category States – 10 lakhs [11 states as
per Article-279(4)(g) but here its only Manipur,
Meghalaya, Mizoram, Nagaland]
NOTIFICATION NO. 10/2019
 Exemption from registration for any person engaged in exclusive supply of
goods and whose aggregate turnover in the financial year does not exceed
Rs 40 lakhs.
 Exceptions to this exemption are as follows:
◦ persons required to take compulsory registration under section 24 of
the CGST
◦ persons engaged in making supplies of ice cream and other edible ice,
whether or not containing cocoa; Pan masala; all goods of Chapter
24, i.e. Tobacco and manufactured tobacco substitutes; Fly ash Bricks,
aggregates and fly ash blocks; bricks of fossil meals or similar
siliceous earths; building bricks; and earthen or roofing tiles
◦ Persons engaged in making intra-State supplies in the States of
Arunachal Pradesh, Uttarakhand, Meghalaya, Sikkim, Telangana,
Puducherry and Special Category States as per section 22 [Nagaland,
Mizoram, Manipur, Tripura]
◦ Person who has opted for voluntary registration or such registered
persons who intend to continue with their registration under the CGST.
Section 22(2) – Persons holding license under an existing
law immediately before the Appointed Day
• Liability for registration- w.e.f the appointed day. 22 JUNE 2017

Section 22(3)- TRANSFEREE/ SUCCESSOR IN CASE OF

TRANSFER OF BUSINESS by a Registered Person
• Liability for registration – w.e.f the date of such transfer or
succession.

Section 22(4)- TRANSFEREE in case of TRANSFER BY

DEMERGER / AMALGAMATION OF A COMPANY BY THE
ORDER OF A COURT OR TRIBUNAL

• Liability for registration-w.e.f the date on which the RoC issues a

certificate of incorporation giving effect to the order of the court.
PERSONS LIABLE FOR COMPULSORY REGISTRATION Sec 24 CGST Act

1. Persons making any inter-State taxable supply

2. Casual taxable persons (CTP) making taxable supply
3. Persons who are required to pay tax under reverse charge on inward supplies received.
4. Non-resident taxable persons (NRTP) making taxable supply.
5. E-commerce
6. Persons who are required to deduct tax under section 51, whether or not separately
registered under this Act.
7. Persons who make taxable supply of goods or services or both on behalf of other taxable
persons whether as an agent or otherwise.
8. Persons who are required to pay tax under section 9(5) i.e. E-commerce operator who is
required to pay tax on specified services; and
9. Input Service Distributor, whether or not separately registered under this Act.
10. Every person supplying online information and data base access or retrieval (OIDAR)
services from a place outside India to a person in India, other than a registered person.
11. such other person or class of persons as may be notified by the Government on the
recommendations of the Council.
PERSONS NOT LIABLE FOR REGISTRATION – Section 23 CGST Act

1. Person engaged exclusively in the business of supplying goods and

/or services not liable to tax/wholly exempt from tax
2. An agriculturist, to the extent of supply of produce out of cultivation of
land
3. Persons making only reverse charge supplies
4. Persons making inter-State supplies of taxable services up to Rs.20 lakh
5. Persons making inter-State taxable supplies of notified handicraft goods
up to Rs. 20,00,000
6. Casual Taxable Persons making inter-State taxable supplies of notified
handicraft goods up to Rs. 20 lakhs.
PROCEDURE FOR REGISTRATION SECTION 25 read with RULE 8 to18

Effective date of registration [Rule 10]

 NON-RESIDENT
CASUAL TAXABLE
TAXABLE
PERSON(CTP) Sec.2(20)
PERSON(NRTP) Sec.2(77)
“casual taxable person” means
a person who occasionally “non-resident taxable person”
undertakes transactions means any person who
involving supply of goods or occasionally undertakes
services or both in the course transactions involving supply
or furtherance of business, of goods or services or both,
whether as principal, agent or whether as principal or agent or
in any other capacity, in any other capacity, but who
in a State or a Union has no fixed place of business
territory where he has no or residence in India;
fixed place of business
 ◦ The composition levy is an alternative method of levy of tax
designed for small taxpayers whose turnover is up to a prescribed
limit. The objective of composition scheme is to bring simplicity
and to reduce the compliance cost for the small taxpayers
◦ Initially, the scheme was designed to benefit the small traders,
manufacturers and restaurant service providers. So, the scheme
was fundamentally for the suppliers of goods and only for
restaurant service providers (not supplying alcoholic liquor for
human consumption).
◦ However, subsequently, suppliers availing composition scheme
were permitted to supply other services also, though only upto a
small specified value.
 TURNOVER LIMIT (Notif no. 14/2019)
◦ Upto 1.5 crore for goods (Rs. 75 lakh in special category states)
and Rs. 50 lakhs for services.
 composition scheme not available to inter-state outward
supplies, supply by ECO, non-taxable supplies,
manufacturer of notified goods
 Composition dealer has to pay tax u/s 9(3) and 9(4) on
inward supplies.
 A registered person, whose aggregate turnover in the preceding FY did not
exceed Rs. 50 lakhs, may opt to pay, in lieu of the tax payable by him under
section 9 (1), an amount of tax calculated at such rate as may be prescribed,
but not exceeding
◦ one percent of the turnover in State or turnover in Union territory in case
of a manufacturer
◦ two and a half per cent of the turnover in State or turnover in Union
territory in case of persons engaged in making supplies referred to in
clause (b) of paragraph 6 of Schedule II, and
◦ half per cent of the turnover in State or turnover in Union territory in case
of other suppliers
 Provided that the Government may, by notification, increase the said limit of
fifty lakh rupees to such higher amount, not exceeding one crore and fifty
lakh rupees, as may be recommended by the Council.
 Provided further that a person who opts to pay tax under clause (a) or clause
(b) or clause (c) may supply services (other than those referred to in clause
(b) of paragraph 6 of Schedule II), of value not exceeding ten percent of
turnover in a State or Union territory in the preceding financial year or five
lakh rupees, whichever is higher.
 Pay tax at a concessional rate of
◦ 1% for suppliers of goods
◦ 5% for restaurant service providers (not supplying alcoholic liquor
for human consumption)
◦ 6% for supply of services other than restaurant service

 An eligible person opting to pay tax under the composition scheme

shall, instead of paying tax on every invoice at the specified rate,
pay tax at the prescribed percentage of his turnover every quarter
through prescribed form [Form GST CMP 08].
 At the end of a quarter, he would pay the tax, without availing the
benefit of input tax credit.
 Return is to be filed annually by a composition supplier.
 Registration under GST law is compulsory for opting for the
composition scheme.
 Normally, GST is paid by the supplier to the
Govt. Under RCM, recipient of the goods/
service pays the GST
 Sec. 2(98) of CGST Act - Reverse charge is a
mechanism under which the recipient of the
goods or services is liable to pay the tax
instead of the provider of the goods and
services.
 even if the turnover is below the threshold
limit.
 Under the normal taxation regime, the
supplier collects the tax from the buyer and
deposits the same after adjusting the output
tax liability with the input tax credit available.
 But under Reverse Charge Mechanism (RCM),
liability to pay tax shifts from supplier to
recipient.
 As per Section 24 of CGST Act, 2017, A
person paying tax under the reverse charge
mechanism has to compulsorily get
registered
 Reverse Charge Mechanism is generally applicable in three main
situations:
1. Supply from an unregistered dealer to a registered dealer s. 9(4)
2. Services through an e-Commerce website s.9(5)
3. Supply of specific goods/ services listed by Central Board of
Indirect Taxes and Customs (CBIC) s. 9(3)
Goods like cashewnuts [not shelled/peeled], bidi
wrapper leaves, tobacco leaves and raw cotton (when supplied by an
agriculturist to any registered person), supply of lottery (when
supplied by State Government, Union Territory or any local authority
to lottery distributor or selling agent), silk yarn (when supplied by
manufacturer of silk yarn to any registered person), used vehicles,
seized and confiscated goods, old and used goods, waste and scrap
(when supplied by Central Government, State Government, Union
Territory or any local authority to any registered person), priority
sector lending certificate – when supplied by registered person to
any registered person, etc. are taxable under reverse charge
TIME OF SUPPLY UNDER RCM

In case of goods, earliest of the following

 Date of receipt of goods

 Date of payment recorded in books of account or debited in bank

account of the recipient of goods.
 Date immediately after 30 days from the date of issue of invoice by
the supplier (31st day)

In case of services, the earliest of the following

 Date of payment recorded in books of account or debited in bank
account of the recipient of services
 Date immediately after 60 days from the date of issue of invoice by
the supplier

In case of imports from Associated enterprises

 Date of payment

 Date of entry of service in books of account of the recipient

ITC UNDER RCM

 Supplier cannot avail ITC

 Recipient can avail ITC
 Goods/Services used only for business
purpose
 Sec 16 -21 r/w Rules 36 -45
 Taxes paid on inward taxable supply of inputs,
capital goods and services are called as input
taxes
 It also includes tax paid on reverse charge basis
including taxes paid by the importer of goods
and services
 Cannot claim on exempt outward supply except
zero-rated supply
 The credit of the above taxes is called input tax
credit, that is, input taxes are available as a set
off against the taxes payable on outward taxable
supplies.
 Sec 16
 Registered person to take credit of tax paid on inward supplies of goods
and/or services used/ intended to be used in the course of furtherance of
business if these SIX conditions are fulfilled:
 He has valid tax invoice/debit note/prescribed tax paying document
 Details of invoices/debit notes uploaded by the supplier in his GSTR-1 or using
IFF and details communicated in Form GSTR-2B
 Tax on such supply has been paid – in cash or by utilisation of ITC
 He has received goods and/or services (Goods delivered / services provided to
third person on the direction of the registered person deemed to be received
by the registered person -> ITC available to registered person )
 Details of ITC in respect of the said supply communicated to the registered
person under section 38 not restricted
 He has furnished return u/s 39

 Time limit for availing ITC - ITC pertaining to a particular FY can be availed by
30th November of next FY or filing of annual return, whichever is earlier.
Exception: Re-availment of ITC reversed earlier
 Goods received in lots – ITC claimed upon receipt of last lot
 Input credit means at the time of paying tax
on output, you can reduce the tax you have
already paid on inputs.
Say, you are a manufacturer –
 tax payable on output (FINAL PRODUCT) is
Rs.450
 tax paid on input (PURCHASES) is Rs.300
 You can claim INPUT CREDIT of Rs.300 and
you only need to deposit Rs.150 in taxes.
•The Zero Rated Supply (ZRS) should not be construed as zero rate of tax.

•While the tax rate on exports shall be Nil, at the same time the exporter shall

be allowed to claim credit of input taxes paid on inputs or input services or

claim refund thereof if remain unutilized.

•In effect, both outputs as well as input taxes are Nil in case of exports.

•This is as per the policy of the Government that ‘only goods and/ or services

to be exported not the taxes’ – in order to boost the export.

•The exporter is entitled to avail the input tax credit on the raw material

purchased so that the final cost of exportation is made competitive.

Utilization of input under CGST, IGST and SGST
 CGST = Input Tax Credit can be utilized for CGST and IGST in
the same order
 SGST = Input Tax Credit can be utilized for SGST and IGST in
the same order
 IGST = Input Tax Credit can be utilized for IGST, CGST and
SGST in the same order
 UTGST = Input Tax Credit can be utilized for UTGST and IGST
in the same order
TIME OF SUPPLY
[S. 12 to S.14 of CGST/ SGST ACT]

The time of supply fixes the point when the

liability to charge GST arises. It also indicates
when a supply is deemed to have been made. The
CGST/SGST Act provides separate time of supply
for goods and services.

Time of supply
for goods – s.12
for services – s. 13
 Date of issue of invoice / Last date
of issue of invoice under section
Whichever is earlier

31

Date on which the payment is

recorded in the books of account
of supplier

Date on which the payment is

credited to the supplier’s bank
account

EXCESS PAYMENT UPTO 1000: OPTION OF TAKING INVOICE DATE AS

TIME OF SUPPLY
 TIME OF SUPPLY OF GOODS UNDER REVERSE
CHARGE
Date on which the payment is recorded
in the books of account of the recipient
of goods

Date on which goods are received

Date on which the payment is debited

from the bank account of the recipient of
goods

31st day from the issue of invoice by the

supplier

Incase if it is not possible to determine the time of supply through above parameters,
THEN TIME OF SUPPLY - Date on which goods are recorded in the books of account
of the recipient of supply
 TIME OF SUPPLY OF SERVICES UNDER FORWARD
CHARGE
Is invoice Date of issue of invoice
issued
Date on which the
within the yes Time of
time Supply payment is recorded in
specified the books of account of
u/s 31? the supplier
Date on which the
No payment is credited to
Time of
the supplier’s bank
supply (WHICHEVER IS account
EARLIER)
Date of
provision of Date on which the
Date on which the
service payment is
payment is credited to
recorded in the books
the supplier’s bank
of account of the
account
supplier

Section 13 must be read with section 31 and rule 47 of CGST Rules, which
prescribe in detail the date on which tax invoice for a supply of service
must be issued in various situations
 TIME OF SUPPLY OF SERVICES UNDER REVERSE
CHARGE Date On Which The

payment is recorded in the

books of account of the
recipient
Date of services
on which the
payment is debited from
the bank account of the
recipient of services
61st day from issue of
invoice by the supplier

Incase if it is not possible to determine the time of supply through above

parameters, THEN TIME OF SUPPLY - Date on which goods are recorded in
the books of account of the recipient of supply
TIME OF SUPPLY

Raising invoice to determine the time of supply

subject to s.31 r/w Rule 47.
 Rules for interpretation including section and
chapter notes and the general explanatory notes
of the Customs Tariff Act 1985 apply to the
interpretation of the rate notification for goods
under GST also.
 Consequently under GST goods are classified on
the basis of HSN in accordance with the Rules for
the Interpretation of Customs Tariff.
 Once classification for a product has been
determined on this basis, applicable rate has to
be determined as per the rate prescribed in the
rate notification issued under GST .
 A new scheme of classification of Services has
been devised under GST .
 It is a modified version of the UN Central
Product Classification.
 Under this scheme, the services of various
descriptions have been classified under
various sections, headings and groups .
 (1) The value of a supply of goods or services or both shall be the
transaction value, which is the price actually paid or payable for the
said supply of goods or services or both where the supplier and the
recipient of the supply are not related and the price is the sole
consideration for the supply.

(2) The value of supply shall include ––

a) any taxes, duties, cesses, fees and charges levied under any law
b) any amount that the supplier is liable to pay in relation to such
supply but which has been incurred by the recipient of the supply
and not included in the price actually paid or payable for the goods
or services or both;
c) incidental expenses, including commission and packing, charged
by the supplier to the recipient of a supply and any amount
charged for anything done by the supplier in respect of the supply
of goods or services or both at the time of, or before delivery of
goods or supply of services;
d) interest or late fee or penalty for delayed payment of any
consideration for any supply; and
e) subsidies directly linked to the price excluding subsidies provided
by the Central Government and State Governments.
3) The value of the supply shall not include any discount which is
given––
(a) before or at the time of the supply if such discount has been
duly recorded in the invoice issued in respect of such supply;
and
(b) after the supply has been effected, if—
(i) such discount is established in terms of an agreement entered
into at or before the time of such supply and specifically linked to
relevant invoices; and
(ii) input tax credit as is attributable to the discount on the basis of
document issued by the supplier has been reversed by the recipient
of the supply.

(4) Where the value of the supply of goods or services or both

cannot be determined under sub-section (1), the same shall be
determined in such manner as may be prescribed.

(5) the value of such supplies as may be notified by the Government

on the recommendations of the Council shall be determined in such
manner as may be prescribed.
SECTION 2(66) – Invoice or Tax Invoice means
the tax invoice referred to in section 31
Means determination of tax liability under this
Act and includes self-assessment,
reassessment, provisional assessment,
summary assessment and best judgment
assessment [Section 2 (11)]