Gst vs vat

Shashikant Sharma
shashikantsharma427@gmail.com

 The proposed GST law shall be a simple ‘ACT’ replacing all Acts relating to levy
of indirect taxes.
 Undoubtedly the most significant reform since the liberalisation in 1991, GST
will transform India’s economic landscape.
 Goods and service tax (GST) is a comprehensive tax levy on from
manufacture to final consumption of goods and service at a national level.
 GST would basically be a destination based tax will make life easier for
businesses in India.
 Companies will not have to file tax returns with multiple departments, but
there will be just one web-based form to file tax returns.
 The country will finally become one common market, with uniform pricing
across states.

 Goods and service tax (GST) is globally known as VAT or a national level VAT
 More than 140 countries have already introduced GST / National VAT.
 To remove cascading effect of taxes and provide a common nation-wide market
for goods and services, India is moving towards the introduction of GST.
 Typically it is a single rate system but two/three rate systems are also prevalent.
 France was the first country to introduce GST system in 1954.
 India will be one of the very few countries with a dual GST regime alongside
Canada and Brazil.
 Standard GST rate in most countries ranges between 15-20%.

GST replaced several existing
taxes and levies which include:
 Central Taxes to Subsumed
 Central excise duty
 Services tax
 Additional customs duty,
 Surcharges & Cess
 CVD & SAD
 State Taxes to subsumed
 State-level value added tax
 Purchase Tax
 Luxury Tax
 Entry Tax
 Octroi
 Entertainment Tax

Following taxes not to be subsumed under GST :-
 State taxes :-
i. State Excise Duty :- alcohol, alcoholic preparations, and narcotic
substances.
ii. Stamp Duty
iii. Profession Tax
iv. Motor Vehicle Tax
v. Electricity Duty –Doubtful because of inclusion of electricity in the
definition of term “goods”
vi. Sale tax on five petroleum products :- Petroleum Crude, Motor Spirit
(petrol), High Speed Diesel, Natural Gas and Aviation Turbine Fuel
 Central taxes :-
i. Customs Duty.

GST Structure
Centre GST
GST to be levied
by the Centre
State GST
GST to be levied
by the State
IGST
GST to be levied by
the Centre and the
States concurrently

• Services
• Goods
• Both (Sch.-II)
1: Subject
• Included
• Implied (Sch.- I)
• Excluded (Sch.-III)
2: Supply
• Inter-State
• Intra-State
3: Place
• Specified for goods
• Specified for
services
4: Time

Before GST tax event In GST tax event
In GST, Tax levied on Supply of
Goods / Services based on
Place & Point of Supply

FOR GOODS :
 HSN (Harmonised System of Nomenclature) code shall be used for classifying the
goods under the GST regime.
 Taxpayers whose turnover is upto Rs. 1.5 crores are not required to mention HSN
Code in their invoices.
 Taxpayers whose turnover is above Rs. 1.5 crores but below Rs. 5 crores shall use 2
digit code and
 The taxpayers whose turnover is Rs. 5 crores and above shall use 4 digit code.
 Here turnover means : annual turnover of preceding financial year .
FOR SERVICES :
 Services will be classified as per the Services Accounting Code (SAC)
And mention code related provision same as goods and other provision same as
goods as given above.

 Supply includes :- all forms of supply of goods or services or both
such as sale, transfer, barter, exchange, licence, rental, lease or
disposal made or agreed to be made for a consideration by a person
in the course or furtherance of business;
 Import of services for a consideration whether or not in the course
or furtherance of business;
 The activities specified in Schedule I, made or agreed to be made
without a consideration; and
 The activities to be treated as supply of goods or supply of services
as referred to in Schedule II.

 Goods :- means every kind of movable property other than money and securities
includes actionable claim, growing crops, grass and thing attached forming part of
the land which are agreed to be severed before supply under a contract of supply.
 Consideration :- In relation to the supply of goods or services or both includes––
(a) any payment made or to be made, whether in money or otherwise,
(b) the monetary value of any act or forbearance
o in respect of, in response to, or for the inducement of, the supply of goods or
services or both, whether by the recipient or by any other person but shall not
include any subsidy given by the Central Government or a State Government;
o 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 such deposit as consideration for the said supply;

 Permanent transfer/disposal of business assets for which ITC availed on such assets
o Goods sent on job work or goods sent for testing or goods sent for certification
would not qualify as ‘supply’ under this clause since there is no permanence in
transfer.
o Typically, donation of business assets or scrapping or disposal in any other manner
(other than as a sale – i.e., for a consideration) would qualify as ‘supply’ under this
clause, where input tax credit has been claimed on the same.
 Supplies between related persons/ distinct persons (as specified in section 25) in
the course or furtherance of business.
 Supply of goods by principal (or agent) to agent (or principal).
 Import of service from a related person in the course or furtherance of business.

Why ,we are required to determine the Place of Supply :-
 GST is understood as a ‘destination based consumption tax’ but there is no
provision that declares this fact.
 This missing declaration is more than adequately supplied by the principle
being embodied in the provisions of ‘Place of Supply’.
 Concept of destination based tax on consumption is, tax would accrue to the
taxing authority which has jurisdiction over the place of consumption which is
also termed as Place of supply.
 Place of supply is important to determine, When the location of supplier and
the place of supply are in two different States within India, then it will be an
Inter-State supply and IGST applies.

Intra-State Supply
Rajasthan
 Dual tax – CGST-SGST
 Registered office not relevant; location of
goods is relevant
 Intra-State supply, if ‘from’ and ‘to’ in one
State
Inter-State Supply
Gujarat
 One tax – IGST
 Movement for ‘delivery’ relevant;
even stock-transfer taxable
 Imports – basic customs + IGST
‘From’ Banswara ‘To’ Jaipur ‘To’ Surat
IGST
CGST-SGST

Determination Place of supply of goods and/or services as Intra-State supply/ Inter-
State supply :-
 CRITICAL factors: Where the below 2 are in the SAME STATE
a) Location of the supplier and
b) Place of supply determined u/s 7,8, 9 or 10 of IGST Act
Specific EXCLUSIONS:
• Supply of goods in the course of import, till they cross the customs frontiers
of India
• Supply of services in the course of import
• Supply when place of supply is outside India but supplier is in India
• Supply to or by a SEZ developer or an SEZ unit

 The place of supply of goods, other than supply of goods imported into, or
exported from India, shall be as under:
 Where the supply involves movement of goods: Movement of goods
terminates for delivery to the recipient.
 Where the goods are delivered by the supplier to a recipient or any other
person on the direction of a third person before or during movement of goods
:- either by way of transfer of documents of title to the goods or otherwise ,it
shall be deemed that the said third person has received the goods and the
place of supply of such goods shall be the principal place of business of such
third person;
 It is important to identify the two supplies involved – by supplier to third party
and by third party to recipient. This provision deals only with the first limb of
supply, that is, supply by supplier to third party.shashikantsharma427@gmail.com

 Where the supply does not involve movement of goods : The location of such
goods at the time of the delivery to the recipient.
 Where the goods are assembled, or installed at site : The place of such
installation or assembly.
 Where the goods are supplied on board a conveyance, including a vessel, an
aircraft, a train or a motor vehicle : The location at which such goods are taken
on board.
 Place of Supply of Goods Imported into, or Exported from India :
 Imported into India shall be the location of the importer;
 Exported from India shall be the location outside India.

 Place of supply of Services :-
 Where supplier & recipient in India :
Supply of
Service directly in relation to :
i. Immovable property
construction,use,accommodation,
letting out,architect,etc.
ii. Boat,Vessel,Lodging,Club,etc.
iii. Ancillary service to the above
Place of supply :
Sec.12(3)
Location of
Property/boat/
Vessel located
i. Restaurant and catering
ii. Personal grooming
iii. Fitness
iv. Beauty treatment
v. Health service including
Cosmetic & plastic surgery
Place of supply :
Sec.12(4)
Location of
actual
performance of
services

S. 12(5): Supply of
Services of
Training and
Performance
Appraisal
Registered
recipient:
Location of
recipient
Unregistered
recipient:
Place of actual
performance
S. 12(6): Supply of
Services for admission
to:
a) Cultural & artistic
b) Sporting
c)Scientific &
educational
d) Entertainment event
e) Amusement Park
f) Services ancillary to
above
Venue of event/
park
S. 12(7): Supply of:
a) Organising cultural, arts,
sports, educational,
scientific, entertainment,
conference, fair, exhibition
or similar events
b) Services ancillary to above
Registered
recipient:
Location of
recipient
Unregistered
recipient:
Venue of event

Supply of
services
of:
Sec 12(8): Transportation
of goods, including by
mail or courier
Registered Recipient: Location of
registered Recipient
Unregistered Recipient: Location
where goods handed over for their
transportation.
Sec 12(9): Passenger
Transportation Service
(Return journey treated
as separate journey)
Registered Recipient: Place of
Registered Recipient
Unregistered Recipient: Place where
passenger embarks on the conveyance
for a continuous journey
Sec 12(10): Services on
board conveyance like
vessel, aircraft, train,
motor vehicle
First scheduled point of departure of
that conveyance for that journey

Supply of:
Sec 12(12) Banking
and Other Financial
Services including
Stock Broking
Location of recipient in
suppliersrecords
(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

For Supply of any
other Service,
Place of supply is:
Section 12(2)(a): Registered recipient:
Section 12(2)(b): Unregistered
recipient: Recipient address in
supplier’s records
Section 12(2)(b): Unregistered
recipient: Location of supplier if
address not available

Where supplier or recipient is outside India:
 Service i.r.o. goods required to be made physically available by recipient &
Services requiring physical presence of receiver/ person acting on his behalf -
Location where services actually performed Sec.13(3)
 Services supplied directly in relation to immovable property - Location of such
immovable property Sec.13(4)
 Service by way of admission to/organising an event, etc. and ancillary services -
Place where the event is actually held Sec.13(5)
 Where any service referred to in subsection (3),(4)&(5) is supplied more than
one location, including a taxable territory:- Shall be the location in taxable
territory.
 Banking services to account holders, intermediary services, hiring of means of
transport (other than aircraft & vessels) upto 1 month :-
Location of supplier

 Where supplier or recipient is outside India:
 Transportation of goods (other than by way of mail/courier) :-
Destination of the goods.
 Passenger transportation service :- Place where passenger embarks on
the conveyance for a continuous journey.
 Service provided on board a conveyance :- First scheduled point of
departure of that conveyance for that journey.
 Online information and database access or retrieval services :-
 Residuary :- Location of the recipient, If not available in the ordinary
course of business, location of supplier.

Why ,we are required to determine the Time of supply :-
 The liability to pay tax on goods shall arise at the time of supply.
 Provided that- where the supplier of taxable goods receives an amount up to one
thousand rupees in excess of the amount indicated in the tax invoice – Time of
supply for such part of excess payment is the date of issue of invoice in respect of
such excess amount.
 In case of Reverse charge
The time of supply shall be the earliest of the following dates :-
 The date of the receipt of goods; or
 The date of payment (enter in Books of A/c of recipient or debited in
his bank account, whichever is earlier)
 The date immediately following 30/60 (in case of service) days from the date of
issue of invoice.

 Where it is not possible to determine the time of supply under the provisions
of act, time of supply shall—
 in a case where a periodical return has to be filed, be the date on which such
return is to be filed; or
 in any other case, be the date on which the tax is paid.
 Time of Supply – Special Charges
Special Charges means any charges (eg. Interest etc.) imposed for delay in
payment of consideration, in such cases time of supply - date of receipt of the
charges imposed.

As per Section 12(2)
of CGST ACT, time of
supply of goods shall
be earlier of
invoice/ payment,
i.e., –
Actual date of issue of invoice by the supplier (INVOICE)
Due date for issue of invoice by the supplier [Section 31]:
- Supply involves movement: Time of removal of goods
for supply
- Other cases: Delivery of goods/ making available to the
recipient or (INVOICE)
Date on which payment is entered in the books of supplier
(PAYMENT)
Date on which payment is credited to the supplier’s bank
a/c (PAYMENT)
Time of Supply of Goods :

Time of supply of services :
As per Section 13(2)
of CGST ACT, time of
supply of services
shall be earlier of
invoice/payment
i.e., –
Actual date of issue of invoice by the supplier
Due date for issue of invoice by the supplier [Section 31*]:
- Before/ after the supply of service, but within 30 days
Date on which payment is entered in the books of supplier
Date on which payment is credited to the supplier’s bank
a/c
*Where payment is received in advance, the Supplier shall issue a receipt voucher,
and NOT a tax invoice shashikantsharma427@gmail.com

 Continuous Supply of Services :
Continuous supply of services :- means a supply of services which is:
provided, or agreed to be provided, continuously or on recurrent basis,
 under a contract, for a period exceeding three months with periodic payment
obligations and other govt. notified services.
 Section 28(5) prescribes due date for issue of invoice in case of continuous
supply of services:
Where the due date of payment is
ascertainable from the contract:
Where the due date of payment is not
ascertainable from the contract, time of
supply shall be earliest of-
Where the payment is linked to the
completion of an event:
• Within 30 days of recipient
becoming liable for payment
• Within 30 days of receipt of
each payment
• Within 30 days of
completion of event

Goods / Services- Reverse Charge
Date on which payment is entered in
the books of recipient
Date on which payment is debited to
the recipient’s bank a/c
31st day (in case
of goods, and 61st day in case of
services) from the date of issue of
invoice by supplier
Note: This factor is not relevant in case
of services from a supplier being an
associated enterprise outside India
Where it is not possible to determine
time of supply in the 3 other cases:
Date of entry in the books of account
of the recipient
Where tax liable to be paid on reverse
charge basis, the time of supply of
goods/services shall be earliest of–

Tax Invoice Delivery Challan
Every Registered Taxable person who
Supplies Taxable Goods shall issue a tax
Invoice Before/at the time of:-
 Removal of Goods, if supply involves
movement of goods
 Delivery of Goods/making available to
recipient, if supply doesn't involves
movement of goods
 Issuance of successive statements
accounts, if supply is a continuous supply
of goods
 When recipient approves or 6 months from
the date of removal, if supplied is on
approval basis.
Transportation of goods without issue
of invoice for the purpose of :-
 Transportation of goods for job work
 Transportation of goods for reasons
other than by way of supply
 Supply of liquid gas where the quantity
at the time of removal from the place
of business of the supplier is not
known
 Such other supplies as may be notified
by the Board,

Credit Note Debit Note
 A credit note can be issued:-
 The goods supplied are returned by the
recipient;
 The tax charged in the invoice exceeds
the tax payable on the supply;
 The taxable value shown in the invoice
exceeds the taxable value of the supply;
 Where there is no change in the taxable
value/ tax amount, a credit note need not
be issued.
 Credit note should be declared by the
supplier in the return of the month of the
issue of credit note.
 If credit note not declared in that month,
it can be declared in Any return prior to
Sept. of the following the year in which
the original tax invoice was issued or
Filling of Annual Return, which ever is
earlier.
 A debit note should be issued :-
 The taxable value shown in the invoice is
lesser than the taxable value of the supply;
 The tax charged in the invoice is less than
the tax payable on the supply.
 No change in the taxable value/ tax
amount, a debit note need not be issued;
 The details of the debit note have to be
declared by the supplier in the return of
the month of the issue of debit note;
 Debit note includes a supplementary
invoice.

Receipt Voucher
 A registered person shall, on receipt of advance payment with respect to any
supply of goods or services or both, issue a receipt voucher or any other
document,
Refund Voucher
 Where on receipt of advance payment with respect to any supply of goods or
services or both the registered person issues a receipt voucher, but
subsequently no supply is made and no tax invoice is issued in pursuance
thereof, the said registered person may issue to the person who made the
payment, refund voucher against such payment.
Payment Voucher
 A registered person who is liable to pay tax under section 9(3) (4) shall issue a
payment voucher at the time of making payment to the supplier.

Invoice(i.e. Tax Invoice)
 A registered person who is liable to pay tax as per Sec. 9 (3)/(4) shall issue
an invoice in respect of goods or services or both received by him from the
supplier who is not registered on the date of receipt of goods or services or
both.(Reverse charge 9(3) & Unregistered Person 9(4))
Revised Invoice
 A registered person may, within one month from the date of issuance of
certificate of registration, issue a revised invoice against the invoice already
issued during the period beginning with the effective date of registration
till the date of issuance of certificate of registration to him.
Other vouchers and doc. Required

 The scope of the RCM under the
present law has become very
wide as it does not only cover
services but goods too.
 The enforceability as well as the
compliance will be one of the key
concern.
 Normally, the supplier of
goods/Service provider is liable to
pay the tax.
 But In case of RCM Buyer/ Service
receiver is liable to pay tax.

 RCM applicable for Both Goods and Service. Goods under reverse charge :-
o Silk Yarn (From - Any person who manufactures silk yarn from raw silk
or silk worm cocoons for supply of silk yarn) (HSN Code- 5004 to 5006 )
o Cashew nuts (From-Agriculturist)
o Bidi wrapper leaves (From-Agriculturist)
o Tobacco leaves (From-Agriculturist)
o Supply of Lottery (From-SG,UT,LA)
 Other than above goods Reverse charge also apply in case of - if supplier of goods is
an un-registered person and recipient is registered.
 Exceptions :-
 Where the aggregate value of such Intra-State supplies of goods or service or both
received by a registered person from any or all the suppliers, who is or are not
registered, exceeds five thousand rupees in a day"

Services under Reverse Charges Mechanism
S.No. Services Under Reverse Charge Mechanism Recipient of Service or any
person liable to pay tax
1. Taxable services provided or agreed to be provided
by any person who is located in a non-taxable
territory and received by any person located in the
taxable territory
Person who located in taxable
territory
2. Service provided by GTA Reg. entity, Casual taxable person
3. Services provided or agreed to be provided by an
individual advocate or firm of advocates
Any business entity
arbitral tribunal
Any business entity
5. Sponsorship services Anybody corporate or partnership
firm.
6. Services provided or agreed to be provided by
Government or local authority (other than those
Specifically excluded)
Any business entity.
7. Services provided or agreed to be provided by a
director of a company or a body corporate.
A company or a body corporate
insurance agent to a insurance co.
Insurance Company

S.No. Services Under Reverse Charge Mechanism Recipient of Service or any
person liable to pay tax
9. Services provided or agreed to be provided by a
recovery agent to a banking company/NBFC/FC
Banking company /NBFC/FC
10. Services by way of transportation of goods by a
vessel from a place outside India up to the Custom
Station in India
Importer
11. Transfer or permitting the use or enjoyment of a
copyright relating to original literary, dramatic,
musical or artistic works
Publisher, Music company,
Producer
12. Radio taxi or Passenger Transport Services provided
through electronic commerce operator
Any person (100% by
Electronic Commerce
Operator)

 Invoice and documents required to issued at the time of transaction with
unregistered person/specified category of person :
o a registered person who is liable to pay tax shall issue an invoice in respect of
goods or services or both received by him.
o a registered person who is liable to pay tax shall issue a payment voucher at
the time of making payment to the supplier.
 Can one use input tax credit for payment of tax under reverse charge basis?
o No, Definition of output tax specifically excludes tax payable under reverse
charge basis. Therefore, input tax credit cannot be used for payment of tax
under reverse charge basis.

 Time of Supply :- in case of goods
The time of supply shall be the earliest of the
following dates :-
 The date immediately following 30 days from the date of issue of
invoice.
 in case of Service :-
 The date immediately following 60 days from the date of issue of
invoice.

Services under RCM
and applicable Rate
Services on which ITC
not avail and applicable
rate (mention in ITC
rule)
Services on which ITC
available only on Input
service and applicable
Rate
Service on which no ITC
available and applicable Rate
(mention in service rate
schedule)
Service provided
by GTA @ 5% No
ITC
Works contract
services @18%
Transport of
passengers by rail in
Ist class & AC @5%
Transport of passengers, by
AC contract carriage /stage
carriage/Radio taxi;@5%
Legal services @
18%
Construction
service@12%
Transport of
passengers by air in
economy class /RCS
@5%
Renting of motorcab@5%
Sponsorship
services
@ 18%
Renting of motorcab
@5% No ITC
Transport of goods
by rail@5%
Services of GTA in relation
transportation of
goods@5%
Transport of goods
in a vessel@ 5%
with ITC of input
services
Supply of food/drinks
in restro not AC and
central heating
@12%
Transport of goods
in a vessel@5%
Supply of tour operators
services@5%
Outdoor
catering@18%
Leasing of aircrafts
by a scheduled
airlines @ 5%
Services provided by
foreman of chitshashikantsharma427@gmail.com

 Input credit means that at the time of paying tax on output the tax paid in
inputs can be reduced.
 Every registered person shall be entitled to take credit of input tax charged on
any supply of goods or services or both to
him which are used or intended to
be used in the course or furtherance of his
business, subject to such conditions and
restrictions specified in section 49.
 Registered person shall be entitled to take ITC on the basis of following
documents :-
a. Invoice issued or debit note
b. Bill of entry
c. Document issued by ISD
d. Invoice prepared in respect of reverse chargeshashikantsharma427@gmail.com

Input tax credit is available only if –
 Goods or services or both are used or intended to be used in the course or in
the furtherance of his business;
 He is in possession of tax invoice/ debit note / tax-paying document issued by
a supplier registered
 He has received the said goods or services or both subject to job-work
facilities and restrictions relating to input tax credit in Section 19;(if
goods/assets supplied by principal to the job worker not received back in such
period 1/3 year as the case may be, it shall be deemed that such inputs had
been supplied by principal to the job worker on the day when the said inputs
were sent out).
 The supplier has paid the said amount of tax (as charged in the invoice) to
appropriate Government in cash or by way of utilization of input tax credit, as
admissible. shashikantsharma427@gmail.com

 He – claimant of input tax credit – has furnished return under section 39 in
FORM-GSTR 2.
 Goods received in Instalment against a single invoice - credit can be taken
upon receipt of last instalment of goods.
 Capital goods on which depreciation is
claimed : Claim of depreciation on tax
component disqualifies a recipient of
Capital goods from availment of
input tax credit.
Cost of assets- Rs.100
Tax@10%- Rs.10
-----------
Total Cost- Rs.110
If Deprecation charged
on Rs.100
ITC AVAILABLE
If Deprecation charged
on Rs.110
ITC NOT AVAILABLE

Time limit to avail the input tax credit
Registered person is entitled to take input tax credit on invoice/ debit
notes :-
whichever is earlier of the following :-
1. After due date of furnishing of the return the month of September
of the subsequent financial year
or
2. Relevant Annual return.

 Where the goods or services or both are used by the registered person partly
for the purpose of business and partly for other purposes, the amount of credit
shall be restricted to so much of the input tax as is attributable to the purposes
of his business.
 Where the goods or services or both are used by the registered person partly
for taxable supplies including zero-rated supplies and partly for exempt
supplies credit shall be restricted to so much of the input tax as is attributable
to the said taxable supplies including zero-rated supplies.
Use of input tax
credit: Partly for
Taxable
Supplies
ITC
Availabl
e
Zero-
rated
Supplies
ITC
Available
Non-
taxable
Supplies
ITC not
available
Exempt
Supplies
ITC not
available
Nil-
rated
Supplies
ITC not
availableshashikantsharma427@gmail.com

 Works contract services when supplied for construction of immovable
property, (other than plant and machinery).
 Goods or services or both received by a taxable person for construction of an
immovable property (other than plant and machinery) on his own account,
including when such goods or services or both are used in the course or
furtherance of business;
 “Construction” includes re-construction, renovation, additions or alterations or
repairs, to the extent of capitalization.
 Goods or services or both on which tax has been paid under composition
scheme (section 10 ). (goods/service received from person who avail
composition scheme)

 Goods lost, stolen, destroyed, written off or disposed of by way of gift or free
samples;
 Goods or services or both used for personal consumption.
 Travel benefits extended to employees on vacation such as leave or home
travel concession
 Rent-a-cab, life insurance, health insurance except where :-
 Services which are obligatory for an employer to provide to its employees
under any law for the time being in force, or
 Service provide to person who carrying same business.

 Motor vehicles and other conveyances except when they are used –
 for transportation of goods, and other , for supplies of :
(i) further supplies of such vehicles to a person,
(ii) Transportation of passengers,
(iii) imparting training on driving, flying such vehicles or conveyances;.
 Food and beverages, outdoor catering, health services.
 Goods or services or both received by a non-resident taxable person except on
goods imported by him; (casual taxable person)
 Membership of a club, health and fitness centre, beauty treatment, cosmetic
and plastic surgery.
 Any tax paid in accordance with the provisions of sections 74(demand order in
case of short payment etc.), 129(Detention, seizure and release of goods and
conveyances in transit) and 130(penalty in case of confiscation of
goods/conveyances).

Tax liability on supply of Second hand capital
goods/Machinery on which input tax credit is taken
The registered person shall:
o Pay an amount equal to input tax credit taken on such capital goods
o Reduced by percentage points as prescribed or
o Tax on the transaction value of such capital goods, whichever is higher.
Supply of Capital
goods on which ITC
had been taken
earlier
Pay tax on higher of
Reduced % of deduction
as may be specified
Or
Tax on transaction Value

 In GST regime, the amount of credit to be available will be auto-populated by
the GST system based on the Outward supply returns filed by the vendors. Thus,
effectively the availment and utilisation of credit will be through electronic
ledger. The manner of utilization, conditions and time lines would be prescribed.
 The Electronic Credit Ledger has only three Major Heads of Credit, cross-
utilization of credit is available only as below in that order
Input tax Output tax
IGST
IGST
CGST
SGST
CGST CGST
IGST
SGST SGST
IGST
UTGST UTGST
IGSTshashikantsharma427@gmail.com

 The main restriction is that the CGST credit cannot be utilized for payment of
SGST or UTGST and vice versa.
 Provides that the balance in the cash or credit ledger after payment of tax,
interest, penalty, fee or any other amount may be refunded in accordance
with the provisions of Sec.54(6).
 Order of discharge of tax
 the liability of a taxable person must be discharged in the chronological order-
o Self-assessed tax and other dues arising out of returns for previous tax periods
must be discharged first.
o Self-assessed tax and other dues relating to the return of the current tax
period.
o Any other amount payable under the Act/Rules (liability arising out of demand
notice or adjudicated proceedings etc).

Different types of return required to be filled in GST as per given below :-
GSTR-1 :
 The “Details of outward supplies”(ie. sales, goods return etc.) shall include
details of Invoices, debit notes, credit notes and revised invoices issued in
relation to outward supplies made during any tax period. This e-return shall be
filed within 10 days from the end of the tax period.
 In case of late filing of the above details, the person who defaults shall pay a sum
of ₹ 100 for every day of continuing default subject to a maximum to ₹ 5,000
only.
 The present process of return filing envisages that the recipient of the supply
shall be Provided an opportunity to accept, reject, amend or delete the details in
a two-way communication process.

 The details Provided by the supplier shall be auto – populated and
available electronically to the recipient, for matching purposes, in a FORM
GSTR- 2A
 In case any error or omission is discovered in the course of matching,
rectifications of the same shall be effected, tax and interest, if any as
applicable shall be paid on such corrections by the person responsible for
filing the return of outward supplies.
 Such rectification, however, is not permitted after filing of annual return or
the return for the month of September of the following financial year to
which the details pertain whichever is earlier.

GSTR-2
 Every registered taxable person will be required to verify/modify, electronically
the details of inward supplies of goods and/or services, during a tax period on
or before the 15th day of the month succeeding month.
 In respect of the return for outward supplies filed by the supplier of goods /
services the receiver is required to match his receipts with the details of
supplies filed by the supplier.
 The details of outward supplies as filed by the supplier, shall be made available
to the recipient of such supply in Part A of FORM GSTR-2A after the 10th day of
the subsequent month. The receiver is required to – verify, validate, modify or
even delete, if necessary – the details furnished by the suppliers.
 Part B, Part C and Part D of the above Form GSTR-2A shall contain respectively
details relating to ISD,TDS & TCS.

 Details will be validated by the recipient with reference to their records Now,
these details as accepted by the recipient will be filed by them in the Format
i.e. FORM GSTR-2 for inward supplies of the recipient.
 Any modification, deletion or inclusion of inward supplies by the receiver in
his inward return i.e. FORM GSTR-2 shall be communicated to the Outward
supplier which will be visible to them as GSTR 1A.
 Any modification is not allowed after the annual return or month of Sept.
following F.Y, whichever is earlier.

GSTR3
 Every registered person shall furnish a return in FORM GSTR-3 electronically
through the common portal within 20 days after the end of such month.
 Part A of the return shall be electronically generated on the basis of information
furnished through FORM GSTR-1, FORM GSTR-2 and based on other liabilities of
preceding tax periods.
 Every registered person furnishing the return shall, discharge his liability by
debiting the electronic cash ledger or electronic credit ledger and include the
details in Part B of the return in FORM GSTR-3.

 A registered person, claiming refund of any balance in the electronic cash
ledger , may claim such refund in Part B of the return in FORM GSTR-3 and
such return shall be deemed to be an application filed under section 54
(Refund).
 (Refund application u/s 54 is Part B of the GSTR-3,as per deeming fiction).
 Where the time limit for furnishing of details in FORM GSTR-1 and in FORM
GSTR-2 has been extended and the circumstances so warrant, return in
FORM GSTR-3B, in lieu of FORM GSTR-3, may be furnished in such manner
and subject to such conditions as may be notified by the Commissioner.

Annual return
 Every registered person shall furnish an annual return electronically in FORM
GSTR-9 through the common portal on or before the 31st December following
the end of such financial year.
 Every registered person whose aggregate turnover during a financial year
exceeds two crore rupees shall get his accounts audited and furnish a copy of
audited annual accounts and a reconciliation. statement, duly certified, in
FORM GSTR-9C, electronically through the common portal either directly or
through a Facilitation Centre notified by the Commissioner.
 “Aggregate turnover”:- the aggregate value of all taxable supplies, exempt
supplies, exports of goods or services or both and inter-State supplies of
persons having the same PAN, to be computed on all India basis but excludes
central tax, State tax, Union territory tax, integrated tax and cess & job work .

Step 1:
 The taxpayer will upload the final FORM GSTR-1 return in the Common Portal or
by uploading the file containing the said FORM GSTR-1 return with in 10th day of
month succeeding the month during which supplies has been made. The
supplier would not be allowed to include any missing invoices on his own after
10th day of the month.
Step 2:
 GST Common Portal will auto-populate FORM GSTR-2A of the registered person
based on the supply invoice details reported by the counter-party registered
person (supplier) on a near real-time basis.
Step 3:
 Recipient will accept / reject/ modify such auto-populated FORM GSTR-2A.

Step 4:
 Recipient will also be able to add additional purchase invoice details in his
FORM GSTR-2 which have not been uploaded by counter-party registered
person (supplier) as described in Step 1 and 2 above, provided he is in
possession of valid invoice issued by counter-party registered person and he has
received such supplies.
Step 5:
 Recipient will have the option to do reconciliation of inward supplies with
counter-party registered person (supplier) during the next 7 days by following
up with their counter-party registered person for any missing supply invoices in
the FORM GSTR-1 of the counter-party registered person, and prompt them to
accept the same as uploaded by the Recipient.
 All the invoices would be auto-populated in the ITC ledger of Recipient. The
Recipient would, however, indicate the eligibility / partial eligibility for ITC in
those cases where either he is not entitled or he is entitled for partial ITC.

Step 6:
 The registered person will finalize their FORM GSTR-1 and FORM GSTR-2 by
using online facility at Common Portal, determine the liability on their supplies,
determine the amount of eligible ITC on their purchases and then generate the
net tax liability from the system for each type of tax.
 Cash details as per personal ledger/ carried forward from previous tax period,
ITC c/f from previous tax period, ITC reversal and associated Interest/Penalty,
taxes paid during the current tax period etc. would get auto-populated in the
FORM GSTR-3.
Step 7:
 Taxpayers will pay the amount as shown in the draft FORM GSTR-3 return
generated automatically at the Portal post finalization of activities mentioned
in Step 6 above.
Step 8:
 Taxpayer will debit the ITC ledger and cash ledger and mention the debit entry
no. in the FORM GSTR-3 return and would submit the same.shashikantsharma427@gmail.com

Supply of input/capital
goods without
payment of tax
Supply of
input/capital goods
without payment of
tax
Supply of goods
without payment
of tax
Supply of goods
without payment
of tax
Supply of goods on
payment of taxSupply of goods
on payment of tax

 A registered person may under intimation and subject to such conditions as
may be prescribed, send any inputs or capital goods, without payment of tax,
to a job worker for job work and from there subsequently send to another job
worker and likewise.(Sec.143)
 Definition:- Any treatment or process undertaken by a person on goods
belonging to another registered person. Define in Sec.2(68).
 job-working must not be confused with repair or maintenance:-Job-working
creates the functionality of an article but repair or maintenance restores or
improves the functionality already created and possessed by that article or
thing.
 Is this Supply of goods or service:- Job work- supply of services, as per entry 3
of the Schedule II.

Entitlement to credit on input goods :
 The credit of inputs can be taken even if inputs are sent directly to job-
worker’s premises without bringing it to principal’s place of business.
 The inputs, after completion of job-work, are received back by the principal
within 1 year of their being sent out.
 In case of direct supply :-the period of 1 year shall be reckoned from the date
the job worker receives such inputs
o The principal can take credit of input goods even if such input goods are sent
directly to job-worker’s place without bringing to principal’s place of business.
o If the inputs are not received back within 1 year:- it shall be deemed that such
inputs had been supplied by principal to the job worker on the day when the
said inputs were sent out.

 Entitlement to credit on capital goods(other than moulds and dies, jigs and
fixtures, or tools): -
 The principal can take credit of input tax on capital goods sent to job-worker
subject to the fulfilment of the following conditions:
 The capital goods, after completion of job-work, are received back by him
within 3 years of their being sent out.
 In case of direct supply :-the period of 3 year shall be reckoned from the date
the job worker receives such inputs
 The principal can take credit of capital goods even if such capital goods are sent
directly to job-worker’s place without bringing to principal’s place of business.
 If the capital goods are not received back within 3 years - it shall be deemed
that such capital goods had been supplied by principal to the job worker on the
day when the said capital goods were sent out.

 All challans issued in respect of inputs sent to job-worker and those received
back are to be reported in GSTR-1.
 Provided that the principal shall not supply the goods from the place of business
of a job worker in accordance with the provisions of this clause unless the said
principal declares the place of business of the job worker as his additional place
of business except in a case—
 where the job worker is registered; or
 where the principal is engaged in the supply of such goods as may be notified by
the Commissioner.
 Waste and scrap generated during the job work :- may be supplied by the job
worker directly from his place of business on payment of tax, if such job worker
is registered and not reg. than by the Principal. Sec.143 of CGST

Transitional provisions in Job Work
Input and WIP Input Goods
 Inputs, as such, or partially processed inputs which are sent to a job-worker
prior to introduction of GST under the provisions of existing law and
 if such goods are returned within 6 months from the appointed day no tax
would be payable.
 If such goods are not returned within prescribed time, the input tax credit
availed on such goods will be liable to be recovered.
 The manufacturer and the job-worker are required to declare the details of
such goods sent/received for job-work in prescribed format GST TRAN-1, within
90 days of the introduction of GST.

Transitional provisions in Job Work
Manufactured Goods
 If the manufactured goods are removed, prior to the appointed day, without
payment of duty for testing or any other process which does not amount to
manufacture, and
 such goods are returned within 6 months from the appointed day, then no tax
will be payable.
 If such goods are not returned within prescribed time, the input tax credit
availed on such goods will be liable to be recovered.
 The manufacturer and the job-worker are required to declare the details of
such goods sent/received for job-work in prescribed format GST TRAN-1, within
90 days of the introduction of GST.

Advance payment/received in GST
 Advances taxable or not in GST:- Yes taxable because it’s covered in the
definition of outward supply.
 Statutory Provision:-
 Sec.2(83) define “outward supply” in relation to a taxable person, means supply
of goods or services or both, whether by sale, transfer, barter, exchange,
licence, rental, lease or disposal or any other mode, made or agreed to be made
by such person in the course or furtherance of business.
 “agreed to be made”:- under this part of definition cover advance payment as a
outward supply.
 On which date is liable to pay tax : The date on which the supplier receives
the payment with respect to the supply (Entry in books or received in bank,
whichever is earlier).

Advance payment/received in GST
 Is tax invoice required for advance payments received for goods or services?-
No, the recipient of payment required to issue a receipt voucher for receipt of
payment.
 A person shall, on receipt of advance payment with respect to any supply of
goods or services or both, issue a receipt voucher .
 Where on receipt of advance payment with respect to any supply of goods or
services or both the registered person issues a receipt voucher, but
subsequently no supply is made and no tax invoice is issued in pursuance
thereof, the said registered person may issue to the person who made the
payment, refund voucher against such payment;
 The details of advances for outward supplies of goods or services or both
furnished in FORM GSTR-1.

Accounting entries in case of Advances
 Step-1 : Advance received from customers :-
Assume we received from customer Rs.56 Lac as a advance :-
Bank A/c Dr. 56
To Party name A/c 56
 Step-2 : Let’s assume our goods is taxable @12% (Using Reverse Tax Calculation
formula ie.Rs.6 lacs ) :
Advances income Clearing A/c Dr. 6
To CGST output payable A/c 3
To SGST output payable A/c 3
 Step-3 : Next, stage is Payment of output tax or set-off against the input credit.
CGST output Payable A/c Dr. 3
SGST output payable A/c Dr. 3
ITC Ledger/IT Cash A/c 6

Accounting entries in case of Advances
 Step-4 : When invoice is received in respect of which advances was received, Assume
we supplied the goods Rs. 100 on which duty payable@12% total amount of tax
invoice is Rs.112 (100+12) :-
Party A/c Dr. 112
To Sales 100
To CGST output payable A/c 6
To SGST output payable A/c 6
 Step-5 : Now we close the Advance income clearing A/c :-
CGST output payable A/c Dr. 3
SGST output payable A/c Dr. 3
To Advance income clearing A/c 6
 Step-6 : Rest duty paid through Bank / ITC :
CGST output payable A/c Dr. 3
SGST output payable A/c Dr 3
To Bank A/c 6

Who is Casual taxable person
 A person who occasionally undertakes transactions involving supply of
goods or services or both in the course or furtherance of business, whether
as principal, agent or in any other capacity, in a State or a Union territory
where he has no fixed place of business; As per Sec.2(20)
 A trader, businessman, service provider, etc. undertaking occasional
transactions like supplies made in trade fairs would be treated as a ‘casual
taxable person’ and will have to obtain registration in that capacity and pay
tax.
 Example :- A jeweller carrying on a business in Mumbai, who conducts an
exhibition-cum-sale in Delhi where he has no fixed place of business,
would be treated as a ‘casual taxable person’ in Delhi.

Aspects need to be noted
 The threshold limits for registration would not apply and he would be
required to obtain registration irrespective of his turnover. Compulsorily
required to obtain registration.
 He is required to apply for registration at least 5 days prior to
commencement of business;
 The registration would be valid for 90 days or such period as specified in the
application, whichever is shorter;
 An advance deposit of the estimated tax liability is required to be made along
with the application for registration.

 An Input Service Distributor (ISD) to distribute the credit in respect of input
services (and not inputs) received in its name.
 Generally, the head office of the person, or the corporate office, would be the
location to which the services would be billed. There is no implication by law
that an ISD must be the head office.
ISD
(Unit)
ITC
(Unit-1)
ITC
(Unit-2)
ITC
(Unit-3)

 To distribute the credit of input services, the ISD would be required to
follow the manner prescribed by the rules, including:
o Issue of an ISD invoice to each recipient of credit on every distribution.
o Recipients of credit to are those taxable persons to whom it is
attributable, being persons having the same PAN as that of the ISD.
o ISD is located in a State other than that of the recipient of credit :-the
aggregate of Central tax, State tax and Union territory tax, as integrated
tax. [ie.SGST as a IGST not a SGST of other state]
o ISD is located in the same State as that of the recipient:-the Central tax
and State tax (or Union territory tax) should be distributed as the
Central tax and State tax (or Union territory tax), respectively.
o Each type of tax must be distributed through a separate ISD invoice, but
no requirement to issue ISD invoice at an invoice level.

 Credit of tax paid on input service used by more than one location who
are operational is to be distributed to all of them based on the pro rata
basis of turnover.
 Manner of Distribution of Credit by Input Service Distributor:-
Credit available with
ISD
Recipient unit is
located in same state
as that of ISD
Recipient unit is
located in different
state than that of ISD
Central Tax CGST IGST
State Tax SGST IGST
UT Tax UTGST IGST
Integrated Tax IGST* IGST
*It’s important to note that, section 20 permits distribution of Integrated Tax either as
IGST or CGST or SGST. However, Rule 39(1)(e) permits distribution of ITC of integrated
tax as IGST only.

 If any contrary contained in GST Act, the ITC on account of any services
received prior to the appointed day by an ISD shall be eligible for
distribution as credit.
 Even if the invoices relating to such services are received on or after the
appointed day.

 Every registered person shall keep and maintain, at his principal place of
business a true and correct account of the following:
o Production or manufacture of goods;
o Inward supply of goods or services or both;
o Outward supply of goods and/or services or both
o Stock of goods;
o Input tax credit availed;
o Output tax payable and paid.
 In case of multiple places of business :- the accounts relating to each place of
business shall be kept at the respective places of business
concerned. Hence, all records are to be maintained at each place of business.
o Registered assessee may keep and maintain such accounts and other
particulars in the electronic form in such manner as may be prescribed.

 Who can claim refund under GST :- any person in respect of –
 any tax (which was excess paid);
 interest paid on such tax; or
 any other amount paid (which is not required to have been paid);
 input tax relating to goods and/or services that are exported out of India;
 tax on inputs or input services “used” in the goods and/or services
exported out of India including zero rated supply;
 tax on the supply of goods regarded as deemed exports;
 When the application for refund shall be made :-
 before the expiry of two years from the relevant date, in such form and
manner as may be prescribed;
 Time limit not apply :- the time limit of two years will not apply where tax /
interest / or any other amount has been paid under protest or otherwise.
 In case of taxable person claiming refund of any balance in the electronic
cash ledger, it can be claimed in the return furnished under section 39.

Situation of Refund 2 years from below Relevant Date
On account of excess payment Date of payment of GST
On account of Export of Goods Date on which proper officer gives an order for
export known as “LET EXPORT ORDER
On account of Export of Services Date of BRC (Bank realization certificate)
On account of finalization of provisional assessment Date of the finalization order
In pursuance of an appellate authority’s order in
favour of the taxpayer
Date of communication of the appellate authority’s
order
On account of no/less liability arising at the time of
finalization of investigation proceedings
Date of communication of adjudication order or
order relating to completion of investigation
On account of accumulated credit of GST in case of a
liability to pay service tax in partial reverse charge
cases
Date of providing of service
On account of refund of accumulated ITC due to
inverted duty structure
Last day of the financial year
Relevant date in case of refund :-

 In case of refund arising from earlier law, it will be adjudicated as per
earlier law.
 No refund shall be granted if the amount is less that Rs.1000/-
 Documents Required for Application of Refund :-
 Copy of proof of deposit of tax & invoices & Documents evidencing
export.
 A CA Certificate may be called for evidencing that the tax burden has
not been passed on to the buyer.
Interest on Refund :-
 Refund application to be processed within 60 days from the date of
application.
 For refunds made after 60 days from date of application – interest at
the rate as may be recommended by the GST Council.

 “Export of goods”:- means taking goods out of India to a place outside India.
 Export of goods will be treated as ‘zero-rated supplies’. Accordingly, while no
tax would be payable on such supplies, the exporter will be eligible to claim
the corresponding input tax credits.
 The movement of goods is alone relevant and not the location of the
exporter/ importer.
 The exporter will be eligible to claim refund under the following situations:-
 He may export the goods under a Letter of Undertaking, without payment of
IGST and claim refund of unutilized input tax credit; or
 He may export the goods upon payment of IGST and claim refund of such tax
paid.

“Export of services”:- means the supply of any service when,-
o the supplier of service is located in India;
o the recipient of service is located outside India;
o the place of supply of service is outside India;
o the payment for such service has been received by the supplier of service
in convertible foreign exchange; and
o the supplier of service and the recipient of service are not merely
establishments of a distinct person in accordance with Explanation 1 in
section 8.
o Explanation 1 in section 8 :- an establishment in India and any other
establishment outside India (for the purpose of Intra-State Supplies shall
be treated as a distinct person, but in case of export not treated as a
distinct person).

 Zero rated supply :- means any of the following supplies of goods or services
Zero rated or both –
o export of goods or services or both; or
o supply of goods or services or both to a Special Economic Zone developer or a
Special Economic Zone unit.
Zero Rated
Supply
Export
Supply to
SEZ/SEZ Dev.

 Any person making zero rated supply (i.e. any exporter) shall be eligible to
claim refund under either of the following two options, namely: -
 Under bond or Letter of Undertaking :- Supply goods or services or
both under bond or LUT, subject to such conditions, safeguards and
procedure as may be prescribed, without payment of integrated tax and
claim refund of unutilized input tax credit.
 Under this option, procedure to file refund has been outlined in the CGST
Rules, 2017.
 The exporter claiming refund of unutilized input tax credit will file an
application electronically through the Common Portal.

 Application for refund shall be filed only after the export manifest or an
export report.
 The formats for furnishing bond or LUT for export of goods have been
separately notified under CGST Rules, 2017.
Files an export
Manifest by
the carrier
Confirmation of
export
Process the
claim for refund

 On payment of tax :-Supply goods or services or both, on payment of
integrated tax and claim refund of such tax paid on goods or services or both
supplied.
 The procedure is that a person shall not be required to file any application for
refund of IGST paid on supply of goods for exports.
 The shipping bill, having inter-alia GST invoice details, filed by an exporter shall
be deemed to be an application for refund .
 Such application shall be deemed to have been filed,
 Only when the person in charge of the conveyance carrying the export goods
duly files an export manifest or an export report covering the number and the
date of shipping bills or bills of export and

 The applicant has furnished a valid return in FORM GSTR-3.
 Receipt of information regarding furnishing of valid return in FORM
GSTR-3 from the common portal,
 The Customs system shall process the claim for refund and
 An amount equal to the integrated tax paid in respect of each shipping bill
or bill of export shall be electronically credited to the bank account of the
applicant mentioned in his registration particulars.
Shipping
Bill
Form
GSTR-1
Filed
Form
GSTR-3
filed

Value of Taxable Supply
Value of supply of goods and/or services on which CGST/SGST is to be discharged
shall be the ‘Transaction Value’, where
• Supplier and recipient of supply are unrelated
• Price is actually paid/ payable – AND price is the sole consideration for the supply
Section 2(84) of the CGST Act deems the persons below to be “related persons”:
• Officers / Directors of one another’s business
• Partners in business
• Employer – employee
• A person directly/ indirectly owns/ controls/ holds 25 of shares of both the persons
• One directly/ indirectly controls the other
• Both are directly/ indirectly controlled by a third person
• Together, they directly/ indirectly control a third person
• Members of the same family
• Sole agent / distributor of the other

 Transaction Value INCLUDES:
 Amounts charged by supplier to recipient in respect of any taxes, duties, cesses,
fees and charges levied under any statute, other than taxes paid under GST
regime;
 Amount incurred by Recipient which is liable to be paid by the Supplier;
 Charges by Supplier to Recipient being:
o Incidental expenses (e.g.: packing, commission)
o Charges for anything done by the Supplier at the time or before the supply,
in respect thereof
o Interest/ late fee/ penalty for delayed payment of consideration
o Subsidies directly linked to price – for supplier receiving the subsidy
(excluding Central and State Govt. subsidies; i.e., Government subsidies will
not be included in transaction value)

 Transaction Value EXCLUDES discount:
 Before/ at the time of supply
o Single condition: Such discount is duly recorded in the invoice
 After the supply: Cumulative conditions:
o Agreement establishing discount entered into before/ at the time of
supply
o Discount specifically linked to relevant invoices
o ITC reversed by the recipient to the extent of discount

Composite Supply
 Meaning : Supply made by a taxable
person to a recipient which include
two or more taxable supplies of
goods or services or both, or any
combination of supply should be
naturally bundled.
 E.g.- Where boarding services with
education service provide by
education institute is a composite
supply and in such services supply of
education service is a principal
supply.
 In composite supply principal
supply’s rate is attract for calculating
tax liability Sec.2(30)
Mixed Supply
 Meaning : 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;
 E.g.- A supply of a package consisting of
colgate, Brush, chocolates, dry fruits, and
Soap and sampoo when supplied for a
single price is a mixed supply.
 Each of these items can be supplied
separately and is not dependent on any
other.
 In mixed supply applicable tax rate is
higher rate of amongst supplies which is
part of mixed supply. Sec.2(74)

Person liable for Registration :-
 Every supplier shall be liable to be registered, from where he makes a taxable
supply of goods or services or both, if his aggregate turnover in a financial
year exceeds twenty lakh rupees.
 Special category States, he shall be liable to be registered if his aggregate
turnover in a financial year exceeds ten lakh rupees.
 Every person who, on the day immediately preceding the appointed day, is
registered.
 Where a business carried on by a taxable person is transferred, whether on
account of succession or otherwise, to another person as a going concern,
the transferee or the successor.
 Transfer pursuant to sanction of a scheme or an arrangement for
amalgamation, demerger of two or more companies pursuant to an order of
a High Court, Tribunal or otherwise, the transferee shall be liable to be
registered.

Persons not liable for registration
 The following persons shall not be liable to registration, namely: –
i. any person engaged exclusively in the business of supplying goods or
services or both that are not liable to tax or wholly exempt from tax
ii. an agriculturist, to the extent of supply of produce out of cultivation of land.
 The Government may, specify the category of persons who may be
exempted from obtaining registration under this Act.
Compulsory registration
The following categories of persons shall be required to be registered under
this Act:-
i. persons making any inter-State taxable supply;
ii. casual taxable persons making taxable supply

Compulsory registration
iii. Persons who are required to pay tax under reverse charge;
iv. Non-resident taxable persons making taxable supply;
v. Persons who make taxable supply of goods or services or both on behalf
of other taxable persons whether as an agent or otherwise;
vi. ISD, whether or not separately registered under this Act;
vii. Every electronic commerce operator;
viii. Every person supplying online information and database access or
retrieval services from a place outside India to a person in India, other
than a registered person; and

Why is it important?
 Many countries that have adopted GST such as Singapore and Australia
witnessed a spurt in inflation after implementation.
 In Australia, spurted from 1.9 per cent in the year before GST to 5.8 per cent in
the year when the tax was rolled out.
 Malaysia was able to avoid a similar surge in inflation by effectively
implementing anti-profiteering rules.
 A formula was laid down wherein the net profit margin in the period preceding GST was
compared to the post-GST margins to see inordinate gains.
Statutory Provision
 Any reduction in rate of tax on any supply of goods or services or the benefit of
ITC shall be passed on to the recipient by way of proportionate reduction in
prices.
 The CG on recommendations of the Council, to examine whether ITC availed by
any registered person or the reduction in the tax rate have actually resulted in
a commensurate reduction in the price of the goods or services or both
supplied by him. shashikantsharma427@gmail.com

Central tax
N. No.
Subject Particulars
01/2017 Enforce certain sec. of
CGST as on 22th june,2017
Sec.1,2,3,45,10,22,23,24,26,27,28,29,30,139,146
&164
02/2017 Notifying jurisdiction of central tax officer
03/2017 Rules on registration and
composition levy
Composition and registration rule and its format.
04/2017 www.gst.gov.in Notifying www.gst.gov.in as the Common GST
Electronic Portal,for facilitating registration,
payment of tax, furnishing of returns, computation
and settlement of integrated tax and electronic way
bill.
05/2017 RCM Persons who are only engaged in making supplies of
taxable goods or services or both, the total tax on
which is liable to be paid on reverse charge basis by
the recipient of such goods or services, said
category of persons exempted from obtaining
registration under the aforesaid Act.
06/2017 Rule 26-mode of
authentication-DSC and
other notified by board :-
(i)Aadhaar based EVC;
(ii) Bank account based OTP
Such verification shall be done within 2days of
furnishing documents.

Central tax
N. No.
Subject Particulars
07/2017 Amending notification no. 3/2017-
central tax has been issued
Rule-1,10,13,19,21,22,24,26 and in Form-GST
CMP-07, GST REG-12, GST REG-25
08/2017 Turnover limit for Composition
Levy for CGST
Eligible registered person-whose aggregate
turnover in the preceding financial year did
not exceed ₹ 75 lakh.
In case, specified category of state t/o- ₹50
lakh.
Person not opt composition if engaged in
manufacturing of Ice cream, Pan masala and
all tobacco goods.
09/2017 Enforce certain sec. of CGST w.e.f.
1st july,2017
sections 6 to 9, 11 to 21, 31 to 41 to 50, 53to
138,140 to 145,147 to 163, 165 to 174 except
42(9) & 43(9)
10/2017 Amend CGST Rules notification no
3/2017-Second Amendment
Inserted chapter IV to XVI in CGST Rule,2017
11/2017 Amend Notification no 6/2017-
Central Tax-
(ii)Bank a/c based OTP
following shall be substituted:-
(ii)EVC generated through net banking login
on the common portal;
(iii) EVC generated on the common portal.

Central tax
N. No.
Subject Particulars
12/2017 Number of HSN digits required on
tax invoice
Annual t/o in No. of digits of HSN
Preceding F.Y.
Upto ₹1.50 crore NIL
More than₹1.50 to 5 cr 2
More than ₹ 5 crores 4
13/2017 Rate of interest under CGST Act,
2017
Sec.50(1) 18%
Sec.50(3) 24%
Sec.54(12)&56 6%
Proviso to sec.56 9%
14/2017 Assigning jurisdiction and power to
officers
15/2017 Amending CGST Rules notification
10/2017-CT
Inserted chapter XVII to XIX in CGST
Rule,2017.
16/2017 Furnishing a LUT in place of a bond
for export
Eligible person for :-
(a) A status holder.
(b) Received the due foreign inward
remittances amounting to :- min. of
10% of the export turnover, Should
not be less than ₹1 crore in Preceding
F.Y. .

Central tax
N. No.
Subject Particulars
18/2017 Extend time period for filing of
FORM GSTR-1 for months of July
and August, 2017
July - 1st to 5th September, 2017
Aug. - 16th to 20th September, 2017
FORM GSTR-2 for months of July
and August, 2017
July - 6th to 10th September, 2017
Aug. – 21st to 25th September, 2017
details in FORM GSTR-3 for
months of July and August.
July – 11th to 15th September, 2017
Aug. – 26th to 30th September, 2017
21/2017 Introduce date for filing of GSTR-
3B for months of July and August.
July - 20th August,2017
August – 20th September, 2017
22/2017 Amend the CGST Rules, 2017 Rule-3,17,40,44A(inserted)
23/2017 Date and conditions for filing the
return in FORM GSTR-3B
24/2017 further extend the date for filing of
return in FORM GSTR-3B for the
month of July, 2017

Transitional Provisions
 Migration of existing Tax Payers to GST :- Every registered
person under the earlier law having valid PAN will be issued a provisional
registration certificate (PRC) on and from the appointed day.(Sec.139)
 Existing taxpayer – i.e. registered under any of earlier laws on the day
immediately preceding the appointed day, is registered or holds a licence
under an existing law, shall be liable to be registered under this Act with
effect from the appointed day. (Sec.22)
 Documents required for registration :-
1. Proof of Constitution of Business
2. Photograph of Promoters/ Partners/ Karta of HUF
3. Proof of Appointment of Authorized Signatory
4. Photograph of Authorized Signatory
5. Opening page of Bank Passbook (Containing Bank A/c no.)

Carry forward of CENVAT Credit
Registered taxable person other than composition
dealer
Allowed carry forward of Input tax/ CENVAT
credit – through a return
Such credit must be eligible under earlier law and
GST law
Credit can be taken in the electronic credit
ledger(CGST)
Excess credit taken will be recovered as arrears of
tax under GST law

Unavailed CENVAT Credit on Capital goods
A registered taxable
person, other than
composition dealer, shall
be eligible to take the
credit
In the electronic credit
ledger
Unavailed Credit on
Capital Goods (as per
Rule 2(a) CENVAT Credit
Rule,2004) not carried
forward in a return
Unavailed Credit = (Total
eligible credit – credit
availed) under the earlier
law
Such credits must be
eligible under the earlier
law AND under GST law
Excess claim shall be
recovered as arrears of
tax under GST law

Credit of eligible duties and taxes on input held
in stock
A registered taxable person who was engaged in the manufacture of exempted
and non-exempted goods under Central Excise will be entitled to take the
following amounts of CENVAT credit in his electronic credit ledger:-
 Amount c/f in return furnished under earlier law
 Amount of eligible duties contained in inputs held in stock and inputs
contained in semi-finished goods/ finished goods held in stock on the
appointed day relating to exempted goods/ services
 Form in which the credit would be availed under the GST Law :-FORM GST
TRAN-1 (To be submitted electronically within 60 days of the appointed day).

TAX has been paid in existing law and
invoice not issued
 A registered person shall be entitled to take, ITC in respect of inputs or input
services received on or after the appointed day
 but the duty or tax in respect of which has been paid by the supplier under
the existing law,
 Subject to the condition that the invoice or tax paying document of the same
was recorded in the books of account of such person within a period of thirty
days from the appointed day:
 Thirty days may, on sufficient cause being shown, be extended by the
Commissioner for a further period not exceeding thirty days:
 Provided further that said registered person shall furnish a statement, in such
manner as may be prescribed, in respect of credit that has been taken.

ITC of Centralised registration under
earlier law
 Where a registered person having centralised registration under the existing
law has obtained a registration under this Act,
 such person shall be allowed to take, in his electronic credit ledger, credit of
the amount of CENVAT credit carried forward in a return, furnished under the
existing law by him,
 in respect of the period ending with the day immediately preceding the
appointed day.
 Person shall not be allowed to take credit unless the said amount is admissible
as input tax credit under this act.
 Credit may be transferred to any of the registered persons having the same
PAN for which the centralised registration was obtained under the existing law.

Reversal of ITC
 Where any CENVAT credit availed for the input services provided under the
existing law has been reversed due to non-payment of the consideration
within a period of three months,
 Such credit can be reclaimed subject to the condition that the registered
person has made the payment of the consideration for that supply of
services within a period of three months from the appointed day

Credit of eligible duties and taxes on input held in stock
Person eligible for
input tax credit
Credit available on Condition
• Person not liable to be
registered under the
earlier law.
• Person engaged in
manufacture/sale of
exempted goods,
provision of exempted
services
• Person providing
works contract service
and availing
abatement under
notification no.
26/2012.
• First/ Second stage
dealer, importer
• Inputs held in stock
and inputs contained
in semi-finished goods
or finished goods held
in stock as on
appointed day.
Above benefit not
available for input
services.
• Such credit can be
taken in the electronic
credit ledger
• Goods must be used or
intended to be used for
taxable supply.
• The taxable person passes
on the benefit of such
credit to recipients by way
of reduced prices.
• Eligible to take the credit
under GST law.
• Such person should be in
possession of invoice or
other prescribed doc.
• Invoice or other document
should be within 12 months
from the appointed day.

Inputs removed for Job work and returned
on or after the appointed day
Tax not payable
when
Goods were removed/
dispatched as such or
after partial processing for
job work under the earlier
law prior to appointed
day;
Such goods are returned
within six months or
within the extended
period (2 months) from
the appointed day to the
said factory/to the said
place of business
Tax payable when and
by whom
Goods are liable for payment of
taxes under GST; and
Such goods are returned after six
month from the appointed day;
Tax shall be payable by job worker, if
goods are returned after six months or
after the extended period;
Tax shall be payable by manufacturer
, if goods are not returned within six
months or within the extended period
Applicability
of the
exemption
Manufacturer
and Job worker
should declare
details of inputs
held in stock by
the job worker on
behalf of the
manufacturer on
the appointed
day

Semi-finished goods removed for Job work and
returned on or after the appointed day
Tax not payable
when
Semi-finished goods were
removed/dispatched for
processing under the earlier
law prior to appointed day;
and;
within six months or within
the extended period (2
month) from the appointed
day to the said factory/to the
said place of business
Tax payable when and by whom
Goods are liable for payment of taxes under
GST
Such goods are returned after six month or
extended period from the appointed day
Tax shall be payable by person returning the
goods, if the goods are returned after a
period of six months or extend period
Tax shall be payable by manufacture / person
dispatching the goods, if the goods are not
returned within six month or extended
period.
Applicability of
the exemption
Manufacturer and
Job worker should
declare details of
inputs held in stock
by the job worker
on behalf of the
manufacturer on
the appointed day

Finished goods removed for carrying out certain
processes and retuned on or after the appointed day
Tax not payable when
Finished goods were
removed without payment
of duty /dispatched for
processing under the
earlier law prior to
appointed day; and
within six months or
within the extended period
from the appointed day
Tax payable when and
by whom
Goods are liable for
payment of taxes under
GST;
Such Goods are returned
after six month or
extended period from the
appointed day; and;
Tax shall be payable
by person returning
the goods
Dispatches of goods
from other premises
Manufacture or
person dispatching
the goods may
transfer goods from
such other place
within six month on
payment of taxes in
India or export
without payment of
tax.

Duty paid goods returned to the place of
business on or after the appointed day
Tax not payable
when
• Duty paid goods were removed/ sold under the earlier law not
being prior to six month from appointed day;
• Such goods are returned to the said place of business within six
months from the appointed day; and
• Such goods are identifiable to the satisfaction of proper officer.
• Register person shall be eligible for refund of the duty paid under
existing law.
Tax payable when
and by whom
• Goods are liable for payment of taxes under GST;
• Such goods are returned after six month from the appointed
day.

Where price is revised in pursuance of a
contract
Contract entered prior to
the appointed day and
price of goods and / or
services is revised on or
after the appointed day
Upward revision in the
price
Issue of supplementary
invoice or debit note
within 30 days from such
revision
Downward revision in the
price
Issue of supplementary
invoice or credit note
within 30 days from such
revision
Note - Taxable person shall be allowed to reduce his tax liability, if the
recipient of invoice or credit note has reduced his input tax credit
corresponding to such reduction of tax liability

Progressive or periodic supply of goods or
services
Tax Shall not be payable
if
Duty or tax payable has
been already paid under
the earlier law
Consideration is
received prior to the
appointed day

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