CA Inter Compact Books For May 21
CA Inter Compact Books For May 21
CA Inter Compact Books For May 21
TAXATION
INDIRECT TAXES
G S T
ALL RIGHTS ARE RESERVED. NO PART OF THIS BOOK SHALL BE REPRODUCED, STORED IN A
RETRIEVAL SYSTEM, OR TRANSMITTED BY ANY MEANS WITHOUT WRITTEN PERMISSION OF
AUTHOR.
“Every effort has been made to avoid errors or omissions in this publication. In-spite of this, error may creep in. Any
mistake, error or discrepancy noted might be brought to our notice, which shall be taken care of in the next edition.”
CONTENTS
Chapter 1 Introduction and Constitution 1
Chapter 2 Definitions 9
Chapter 3 Chargeability and Goods & Services 30
Chapter 4 Supply 33
Chapter 5 Taxable Person 42
Chapter 6 Exemption 46
Chapter 7 Valuation 84
Chapter 8 Reverse Charge Mechanism 106
Chapter 9 Invoice 114
Chapter 10 Time of Supply 119
Chapter 11 Registration 124
Chapter 12 Input Tax Credit 147
Chapter 13 Manner of Payment 186
Chapter 14 Return 191
Chapter 15 E-Way Bill 200
LIST OF SECTIONS OF CGST ACT, 2017 208
About CA RAJ KUMAR
CA Raj Kumar is a dynamic & qualified Chartered Accountant. As a brilliant student and a
position holder at Graduation & Post Graduation level, during his 12 years of glorious teaching
experience in the field of Indirect Taxation he has taught over 1,25,000 students.
He is a favorite amongst CA Students for the astute & insightful academic inputs provided by
him and for his pleasing & endearing personality and lucid art of teaching.
He firmly believes in blending studies with fun and this is quite evident in his classes wherein he
goes beyond theoretical reading of the subject, makes students solve practical problems, gives
them practical real life examples and pushes them to achieve their goals with full precision.
In the subject Indirect Tax Laws, his students have continued to score All India Highest Marks
for 10 times till now. He has also been entrusted by Government agencies to show the ropes to
IRS Officers in training, which is a testament to his caliber as a subject matter expert.
He is famous for concepts linkage from the very beginning till the end which helps in
understanding the topic, acing the exams and in post CA life as well. His unique use of GST
portal during the class to link theory with Practical makes him stand apart from the crowd.
His classes are practical, conceptual and concise. He is also the author of bestselling titles 'GST
Compact Book'.
CA. Raj Kumar Chapter 1 – Introduction and Constitution
1
Introduction and
Constitution
Type of Tax: It can be classified into two parts as direct Tax & Indirect Tax.
Where burden of tax borne by the person on whom it is levied then
the tax will be direct Tax and where burden of Tax shifted to
another person i.e. ultimate consumer then it will be called as
Indirect Tax.
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Chapter 1 – Introduction and Constitution CA. Raj Kumar
(iv) Indirect Tax does not pinch directly to the END User.
(vi) Indirect Tax is Regressive in nature i.e. Rate of Tax will be same for Rich &
Poor consumer.
(vii) It promotes social welfare by imposing higher tax Rates on Demerits Items
e.g. Tobacco.
- Before Introduction of GST – there were lots of Indirect Taxes e.g. Central
Excise Duty, VAT, CST, Service Tax, Entertainment TAX, Octroi etc. which leads
to multiple Taxes multiple compliances, multiple laws, cascading, double Taxation
etc.
- To over come All there demerits government Introduced GST in India w.e.f.
01-07-2017. Now there will be one Law, All compliance at one place, No cascading,
No double Taxation,
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CA. Raj Kumar Chapter 1 – Introduction and Constitution
WHAT IS GST
* Inter State Supply: Where origin & destination of supply fall under 2
Different States, UT’s, State & UT, countries then the supply will be Inter
State and IGST would be levied.
IGST will be payable to C.G. and C.G. retain CGST potion out of IGST &
Balance Portion (SGST) will be transferred to destination or consuming
State. [where Destination is an Union Territory then Balance Portion (UT
GST) will be retained by C.G. itself in different Pocket/account.
* Intra State: Where origin and destination of supply falls under same
State/UT then the supply will be Intra State & accordingly CGST &
SGST/UT GST would be payable.
GST LAW
* Foe Levy and collection of CGST = CGST Act, 2017 (Total 1 Act)
* For Levy and collection of SGST = SGST Act, 2017 (Total 31 Acts)
* For Levy and collection of UTGST = UT GST Act, 2017 (Total 1 Act)
* For Levy and collection of IGST = IGST Act, 2017 (Total 1 Act)
* For Levy and collection of GST compensation Cess = GST compensation Cess Act,
2017 (Total 1 Act)
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Chapter 1 – Introduction and Constitution CA. Raj Kumar
SGST
IGST
I.T.C. : OF..
UTGST
IGST
(2) C C
I
I
(1)
S S
(3)
U U
It means:
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CA. Raj Kumar Chapter 1 – Introduction and Constitution
Note: Credit of SGST can NOT be utilised for the payment of CGST & Vice Versa.
Credit of UTGST can NOT be utilised for the payment of CGST & Vice Versa.
Or
Benefit GST
- (v) No Uniformly among laws- Now one law with greater uniformity
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Chapter 1 – Introduction and Constitution CA. Raj Kumar
Now See Diagram as “GIST of GST” that shows Entire Frame Work of GST
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CA. Raj Kumar Chapter 1 – Introduction and Constitution
CONSTITUTION
* CG & every SG have simultaneous power to make laws with respect to CGST &
SGST/UTGST for Intra State supplies.
* CG has Exclusive power to make law with respect to IGST for Inter State supplies.
* 5 Petroleum products [Petroleum crude, High Speed Diesel, Motor Sprit, Natural
Gas, Aviation Turbine Fuel] would be covered under the ambit of GST from that
date which will be recommended by GST council.
* As stated earlier, CG has Executive power to make law with respect to IGST on
Inter State supplies.
* IGST will be payable to CG. The CG will retain 50% amount an d Balance 50% shall
be transferred to consuming/destination state government or retained by CG in
different pocket in Case where destination is a state.
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Chapter 1 – Introduction and Constitution CA. Raj Kumar
1. Where industry demands any change in law it approach GST Council for the same.
3. After discussion if favorable voting percentage is 75% or more (weighted %) then the
proposal/recommendation is sent to the Parliament. Every decision of the Goods and
Services Tax Council shall be taken at a meeting, by a majority of at least 75% of the
weighted votes of the members present and voting, the vote of the Central Government
shall have a weightage of 1/3 of the total votes cast, and The votes of all the State
Governments taken together shall have a weightage of 2/3 of the total votes cast, in
that meeting.
6. 50% of the total number of Members of the Goods and Services Tax Council shall
constitute the quorum at its meetings.
8
CA. Raj Kumar Chapter 2 – Definitions
2
Definitions
1. ACTIONABLE CLAIM:
For Example:
Pending Litigations
Insurance claim
Etc.
REST of the forms of Actionable Claim – will NOT be treated as supply of Goods or
services. Hence NO Question of GST.
A person, including a factor, broker, commission agent, arhatia, del credere agent,
or any other mercantile agent, by whatever name called,
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Chapter 2 – Definitions CA. Raj Kumar
(excluding the value of inward supplies on which tax is payable by a person on RCM
OR NCM BASIS),
exempt supplies,
but excludes central tax, State tax, Union territory tax, integrated tax and cess.
5. EXEMPT SUPPLY:
Supply of any goods or services or both which attracts nil rate of tax or which
may be wholly exempt from tax
By own labour, or
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CA. Raj Kumar Chapter 2 – Definitions
The parents, grand-parents, brothers and sisters of the person (if they are
wholly or mainly dependent on the said person)
Role of Authorized Bank: The taxable person required to pay tax on supplies made by
him or on Inward supplies fall order RCM.
For making payment of GST the person need to create challan from GST Portal.
After that Amount mention in challan need to be deposited in authorized bank &
such authorized bank integrated with GST Portal GSTN.
& Such Tie upped – Bank or Branch of the Banks called as Authorized Bank (Total
:26 Apx) & as and when the person make payment to authorized branch it will be
updated in E –Cash Ledger at GST Portal.
Note: Date of Credit in Authorised Bank will be the date of Deposit in E-Cash Ledger
10. BUSINESS: The Definition is taken from Sales Tax (Vary wide Definition) &cover All
the Transactions that are currently subjected to Various TAXES – That are being
subsumed in GST
(a) Any trade, commerce, manufacture, profession, vocation, adventure, wager or any
other similar activity, whether or not it is for a pecuniary benefit;
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Chapter 2 – Definitions CA. Raj Kumar
(c) Any activity or transaction in the nature of sub-clause (a), whether or not there is
volume, frequency, continuity or regularity of such transaction;
(d) Supply or acquisition of goods including capital goods and services in connection with
commencement or closure of business;
(e) Provision by a club, association, society, or any such body (for a subscription or any
other consideration) of the facilities or benefits to its members;
(g) Services supplied by a person as the holder of an office which has been accepted
by him in the course or furtherance of his trade, profession or vocation;
(h) activities of a race club including by way of totalisator or a license to book maker or
activities of a licensed book maker in such club; and
SN. 11
Meaning Goods – the Value of Any goods other than ANY SERVICE
WHICH is Capitalised in CAPITAL goods.
the Books of Account of
the person claiming I.T.C.
+
+ +
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CA. Raj Kumar Chapter 2 – Definitions
Eg: Supply made in Trade Fair-DEL By a Person Registered in HR: eg. Kalyan Jewellers
(Mumbai Based)-conduct Exhibition-cum-sale in Delhi-where he has NOFixed Place of
Business.
Normally Exemption limit/Registration limit are given to a supplier but in case CTP Such
limit will not be available ie. Mandatory Registration is required.
Normally Supplier has a period of 30 Days to Apply for registration but in case of CTP
no such time Limit is available; rather he is required to be registered @ 5 days in
advance.
14. COMMON PORTAL: Means the common goods and services tax electronic portal.
* It is owned by GSTN
* GSTN is a company Registered under Companies Act. 2013 (Sec : 8 ) ie Not for
profit
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Chapter 2 – Definitions CA. Raj Kumar
* All work like Registration, Return, Payment, Computation & settlement of – IGST &
Other functions etc. done by GSTN.
15. CONSIDERATION:
For a consideration.
CONSIDERATION INCLUDES:
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CA. Raj Kumar Chapter 2 – Definitions
Deficient Supply
* Under Supply Return Supply
DEBIT NOTE
Reasons of issuing debit note may be : Under invoicing in terms of charging lower
value or lower GST in main invoice, one more reasons
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Chapter 2 – Definitions CA. Raj Kumar
Mr. X
5900
Now Later on suppose on in June 2019 it was found that invoice issued on 12th
march was a case of under invoicing
Now What to do :
Supplier need to issue a debit note of Rs 500 as value & GST thereon
GST 18% = 90
590
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CA. Raj Kumar Chapter 2 – Definitions
Now supplier will file GSTR:1 Including Detail of above Debit Note on 10th of July
& pay GST ON 20th July.
On the other side Recipient file GSTR = 2 on 15thof July & claim ITC of Rs 90/-
= 6490
SUPPLIER RECIPIENT
Now Supplier need to file GSTR , 1 including the detail of credit note by 10th of
July, resulting thereof output liability of supplier – Decrease by Rs. 90/-
On the other side recipient required to file GSTR : 2 Including the details of
credit note resulting thereby ITC of recipient – Decrease by Rs 90/-
As and when any person registered @ GST Portal then 3 online ledgers are being linked
to the registration number of that person.Transaction in above ledgers are as follows :
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Chapter 2 – Definitions CA. Raj Kumar
E – Liability Registered
E – CREDIT LEDGER
Balance in E- Credit Ledger Decreased when the person discharge his own
liability on 20th of next month by filing GSTR 3 and by using credit.
E – CASH LEDGER
Balance in E – Cash ledger increased when the person makes payment in the
“Authorized ” Bank & After that bank provide information to GST portal about
such deposit & Assessee’s E – Cash Ledger gets updated.
continental shelf, exclusive economic zone or any other maritime zone as per
Maritime Zones Act, 1976, and
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CA. Raj Kumar Chapter 2 – Definitions
Some Background:
NCM SUPPLIES: The CGST, SGST, IGST or UTGSTcharged on any supply of goods or
services or both made to him and
RCM SUPPLIES: The tax payable under Reverse charge mechanism under CGST/SGST/
UTGST/IGST/ACT.
However tax paid by composite dealer out of his pocket will not be input tax for
recepient.
Note: For a Tax to qualify as INPUT Tax Credit, it must first be “INPUT TAX”.
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Chapter 2 – Definitions CA. Raj Kumar
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CA. Raj Kumar Chapter 2 – Definitions
[T1]
* But transfer of goods to job worker is not a supply therefore no question of GST
at all @ T1
Activity
Business SUPPLY
No Consideration
It is not a Supply.
Activity
Business
Consideration of Goods
So No Question of GST
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Chapter 2 – Definitions CA. Raj Kumar
[T3]
It is a Supply. : A
The Indian legal tender or any foreign currency, cheque, promissory note, bill of
exchange, letter of credit, draft, pay order, traveller cheque, money order, postal
or electronic remittance or any other instrument recognised by the Reserve Bank
of India
but shall not include any currency that is held for its numismatic value.
However: When person exchange money for a consideration (commission) then such
activity is called as service & liable to GST for example: Activity of forex dealer liable
to GST as a Service.
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CA. Raj Kumar Chapter 2 – Definitions
which is not leviable to tax under this Act or under the IGST Act.
27. Taxable supply Means a supply of goods or services or both which is leviable to
tax under this Act.
+ +
* Supply * Supply
+ +
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Chapter 2 – Definitions CA. Raj Kumar
28. Non-Taxable Territory” Means: the territory which is outside the taxable
territory.
29: “Taxable Territory” Means: the territory to which the provisions of this Act apply.
TERRITORY
Act TT NTT
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CA. Raj Kumar Chapter 2 – Definitions
STATES AND UT
(b) Lakshadweep;
Lakshadweep;
Chandigarh
(a) An individual;
(c) A company;
(d) A firm;
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Chapter 2 – Definitions CA. Raj Kumar
(g) Any corporation established by or under any Central Act, State Act or Provincial
Act or a Government company.
(i) A co-operative society registered under any law relating to co-operative societies;
(l) Society
(n) Every artificial juridical person, not falling within any of the above.
to which any other supply forming part of that composite supply is ancillary.
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CA. Raj Kumar Chapter 2 – Definitions
* Split AC + INSTALLATION = AC
* etc.
ending on the last day of March, June, September and December of a calendar
year.
For Example: Any Activity Start ie. March & Complete in April = How Many Quarter = 2
Why to get UIN? - For certain purposes eg. Refund of TAXES on the Notified supply
of Goods/Services received by them.
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Chapter 2 – Definitions CA. Raj Kumar
Dispatch of the goods for delivery by the supplier thereof or by any Agent on his
behalf or
Collection of the goods by the recipient thereof or by any agent on behalf of such
recipient;
The liability to pay tax by the recipient of supply of goods or services or both
(excluding the value of inward supplies on which tax is payable by a person on RCM
OR NCM BASIS)and
inter-State supplies of goods or services or both made from the State or Union
territory by the said taxable person
but excludes central tax, State tax, Union territory tax, integrated tax and
cess;
It is a Replica of “Aggregate Turnover” But limited to STATE & All INDIA BASIS.
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CA. Raj Kumar Chapter 2 – Definitions
43. VALID RETURN: Valid Return” means a return furnished under section 39 (1)on
which self-assessed tax has been paid in full.
A contract for
o Building,
o construction,
o fabrication,
o completion,
o erection,
o installation,
o fitting out,
o improvement,
o modification,
What about (Goods + Service) @ Single PRICE & Resultant Property is an movable
property – then Depend: eg. Service/Goods Can not be called as works contract.
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Chapter 3 – Chargeability and Goods & Services CA. Raj Kumar
3
Charegability and
Goods & Services
30
CA. Raj Kumar Chapter 3 – Chargeability and Goods & Services
Neither NCM Nor RCM: : On notified services CGST shall be collected from E-
Section 9(5) commerce operator having place of Business in India
But where Ecommerce operator has No Place of
Business in India then he need to setup a place of
Business in India or to appoint any person as agent.
However if the real supplier (Hotel) is crossing the limit of 10 Lakh or 20 Lakh
then Hotel Liable to Pay GST.
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Chapter 3 – Chargeability and Goods & Services CA. Raj Kumar
2. Misc. Utilities (e.g. urban clap): E-commerce operator i.e. (Urban Clap) will be
deemed supplier and Liable to Pay GST.
However if Real Supplier of service crossing the limit of Rs. 10 lakh/20 lakh then
Real supplier liable to pay GST.
Neither Goods Nor : Money & securities will neither be treated as goods
Services: Nor service.
32
CA. Raj Kumar Chapter 4 – Supply
4
Supply
There are two sections in this chapter read with 3 schedules. Supply is the Taxable event
to levy GST i.e. It is the backbone for levying GST.
Section 7: Defines:
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
For being supply any transaction needs to satisfy A/B/C test i.e. there must be an
Activity (e.g. Sale, Barter, Exchange, Renting, Leasing, disposal, licensing, transfer
etc.) during the Business or Related to Business for a Consideration which can be in
monetary to non-monetary Form.
Import of Service If it is for consideration and used for business purpose will also
be called as supply. Moreover if such import of service is used for personal purpose
even then it will be called as supply however later on it will be exempted by N/N:
9/2017.
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Chapter 4 – Supply CA. Raj Kumar
SCHEDULE-1
Four specified Activity will also be treated as supply even if these are without
consideration ie FREE OF COST (F.O.C.)
(i) Permanent Transfer of Business Assets only where ITC has been availed in respect
thereof, meaning thereby where ITC has not been availed with respect to that
Assets then there will be no supply.
(ii) Transaction between Related persons (e.g. Brother, Sister, Spouse, Employees etc.
& in between Deemed distinct persons i.e. Multiple Registration under same PAN,
Head office and branch office relationship, branch to branch relationship): Related
party transactions will be called as supply even if it is free of COST.
However gift to employee upto Rs. 50,000 in a Financial year shall not be treated
as supply.
(iii) Supply between principal & Agent i.e. PRINCIPAL to AGENT or Agent to Principal
will be called as supply even there is no consideration.
Where principal Invoices to Agent and Agent Invoices to customer: then such
Agent will fall under Schedule-I and
(iv) Import of Service from outside India, from a related person, by a PERSON in
India for Business purpose will be treated as supply event it is without
consideration.
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CA. Raj Kumar Chapter 4 – Supply
1. Goods Related:
3. Job Work:
Any Treatment or process done by Job worker by using Goods &service will be
called on service ie job work service.
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Chapter 4 – Supply CA. Raj Kumar
* Customised software.
* Leasing of assets.
(a) (i) Activities undertaken by CG/SG/LA as specified under Article number 243
G/W of constitution of India (eg. Land Consolidation, Sanitary, Public
Health etc.) shall not be treated as supply hence no GST shall be levied.
(ii) Service By SG By way of Granting Alcoholic Liquor license shall not be treated
as supply.
(i) Supply of Goods from NTT [Non Taxable Territory] to another NTT without
entering into India shall not be called as supply.
(ii) Service by employee (including whole time Director) to employer in the course
of Employment shall not be called as supply.
(iii) Supply of “Custom Bonded Warehoused” goods to any person before clearance
for home consumption from custom Department, Moreover supply of goods By
way of transferring of “ownership Documents” of Goods after the goods have
been dispatched from origin port [outside India] But Before clearance for
Home Consumption.
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CA. Raj Kumar Chapter 4 – Supply
(viii) Services by ANY court, Tribunal ESTABLISHED Under any law shall not be
treated as supply.
SECTION: 7(3)
Government has power to notify the transactions to be treated as supply of Goods and
not as supply of service or Vice Versa
(a) Under composite supplies,: classification will be based as principal supply i.e. whole
bundle will be called/classified by the name of principle supply and according GST
Rate of principle supply will be applicable.
and supplied in conjunction with each other in the ordinary course of business,
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Chapter 4 – Supply CA. Raj Kumar
Example 1: Suvarna Manufacturers entered into a contract with XYZ Ltd. for
supply of readymade shirts packed in designer boxes at XYZ Ltd.’s outlet.
Further, Suvarna manufacturers would also get them insured during transit. In this
case, supply of goods, packing materials, transport and insurance is a composite
supply wherein supply of goods is principal supply.
Example 2: When a consumer buys a TV set and he also gets warranty and a
maintenance contract with the TV, this supply is a composite supply. In this
example, supply of TV is the principal supply, warranty and maintenance services
are ancillary.
(b) Under Mixed supplies: In mixed bundle principle supply is not Identifiable hence
classification will be based on the supply which has highest Rate of GST i.e. the
whole bundle will be called/classified with the name of such supply.
Example: A house is given on rent through a single rent deed - one floor of which is
to be used as residence and the other for housing.
38
CA. Raj Kumar Chapter 4 – Supply
Various clarifications
Answer: In the case of printing of books, pamphlets, brochures, annual reports, and
the like, where only content is supplied by the publisher or the person who owns the
usage rights to the intangible inputs while the physical inputs including paper used for
printing belong to the printer, supply of printing [of the content supplied by the recipient
of supply] is the principal supply and therefore such supplies would constitute supply of
service.
In case of supply of printed envelopes, letter cards, printed boxes, tissues, napkins,
wall paper etc. printed with design, logo etc. supplied by the recipient of goods but made
using physical inputs including paper belonging to the printer, predominant supply is that
of goods and the supply of printing of the content [supplied by the recipient of supply] is
ancillary to the principal supply of goods and therefore such supplies would constitute
supply of goods. [Circular No. 11/11/2017]
Moreover above provision shall also apply to inter-state movement of such goods, and
other than in cases where movement of such goods is for further supply of the same
goods, such inter-state movement shall be treated ‘neither as a supply of goods or supply
of service,’ and consequently no IGST would be applicable on such movements.
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Chapter 4 – Supply CA. Raj Kumar
Question 3: LAB (Linear Alkyl Benzene) manufacturers have stated that they receive
superior Kerosene oil (SKO) from, a refinery, say, Indian Oil Corporation (IOC). They
extract n-Paraffin (C9-C13 hydrocarbons) from SKO and return back the remaining of
SKO to the refinery. In this context, the issue has arisen as to whether in this
transaction GST would be levied on SKO sent by IOC for extracting n-paraffin or only on
the n-paraffin quantity extracted by the LAB manufactures. Further, doubt have also
been raised as to whether the return of remaining Kerosene by LAB manufactures would
separately attract GST in such transaction.
Answer: LAB manufacturers generally receive superior kerosene oil [SKO] from a
refinery through a dedicated pipeline; on an average about 15 to 17% of the total quantity
of SKO received from refinery is retained and balance quantity ranging from 83%-85% is
returned back to refinery. The retained SKO is towards extraction of Normal Paraffin,
which is used in the manufacturing of LAB. In this transaction consideration is paid by
LAB manufactures only on the quantity of retained SKO (n-paraffin).
In this transaction GST will be payable by the refinery on the value of net quantity of
superior kerosene oil (SKO) retained for the manufacture of Linear Alkyl Benzene (LAB).
Accordingly, it is here by clarified that, in aforesaid case, GST will be payable by the
refinery only on the net quantity of superior kerosene oil (SKO) retained for the
manufacture of Linear Alkyl Benzene (LAB). Though, refinery would be liable to pay GST
on such returned quantity of SKO, when the same is supplied by it to any other person.
[Circular No. 12/12/2017-]
Rubber used for retreading is an ancillary supply. Which part of a composite supply is the
principal supply, must be determined keeping in view the nature of the supply involved.
Value may be one of the guiding factors in this determination, but not the sole factor.
The primary question that should be asked is what is the essential nature of the
composite supply and which element of the supply imparts that essential nature to the
composite supply.
Supply of retreaded tyres, where the old tyres belong to the supplier of retreaded tyres,
is a supply of goods attracting GST @ 28%. [Circular No. 34/8/2018 ]
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CA. Raj Kumar Chapter 4 – Supply
(1) A customer pays fees while registering complaints to Consumer Disputes Redressal
Commission office and its subordinate offices. These fees are credited into State
Customer Welfare Fund’s bank account.
(2) Consumer Disputes Redressal Commission office and its subordinate offices charge
penalty in cash when it is required.
Answer:
Services by any court or Tribunal established under any law for the time being in force is
neither a supply of goods nor services.
However, they are clothed with the characteristics of a tribunal on account of many
reasons.
In view of the aforesaid, it is hereby clarified that fee paid by litigants in the
Consumer Disputes Redressal Commissions are not leviable to GST.
Any penalty imposed by or amount paid to these Commissions will also not attract GST.
41
Chapter 5 – Taxable Person CA. Raj Kumar
5
Taxable Person
Background:
Where supply of Goods/Service made by a Taxable person whether Intra or Inter Shall
be leviable to GST i.e. where such supply made by “Non-Taxable Person” then no GST will
be levied.
Now the question is this who is Taxable Person. Taxable Person has been defined U/s = 2
as the person
Now question is this when a person required to get registered himself. The solution is
given under section 22,23,24 as to when a person Require Registration & when he does
not need to get Register himself.
Following persons are not required to get Registration i.e. such person will be called as
Non-Taxable persons.
(2) Person Engaged only in Exempted supplies (Exempted supply = NIL Rated, 100%
Exempted, Non-Taxable).
(3) Other Notified person (e.g. where a supplier supplies only RCM supplies then such
supplier need not to get any Registration Under GST).
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CA. Raj Kumar Chapter 5 – Taxable Person
The following person requires mandatory registration u/s: 24 i.e. Registration Required
without
[However suppliers of handicraft goods and inter - state supplier of services are
not required Mandatory Registration i.e. they need registration only after
applicable threshold limit.]
[However the casual taxable person making taxable supplies of handicraft goods
not required mandatory registration i.e. need registration only after applicable
threshold limit.]
(3) The Person who is liable to pay Tax under RCM as Recipient.
(4) Person who is required to pay tax under section 9(5). [Hotel Accommodation, Misc.
Utilities, Transportation of passengers]
(6) The supplies of goods who supplied goods through E-Commerce operator.
SECTION: 22
Where the person having aggregate turnover only upto threshold limit or below the limit
then the
But when the person crosses the threshold limit of 10 Lakh/20 Lakh/40 Lakh then he is
required to get registration “In All Those States” From where he is making “Taxable
Supplies”.
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Chapter 5 – Taxable Person CA. Raj Kumar
exempt supplies,
but excludes central tax, State tax, Union territory tax, integrated tax and cess.
(1) Where the person making “Taxable Supplies” from “ANY” of the 4 Specified
states then the applicable limit of the person will be Rs. 10 LAKH for all states.
(2) Where the person making supplies from any of the 6 specified states then the
applicable limit will be Rs. 20 Lakh for all the states.
(3) Where the person making supplies from other states/union territories and
* Exclusively Engaged in supply of goods then the limit will be Rs. 40 Lakh
for all the states.
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CA. Raj Kumar Chapter 5 – Taxable Person
Moreover if the person supplies goods and earned Interest (Exempted supply
of Service) then such Exempted supply of service shall be ignored and the
applicable limit will be Rs. 40 Lakhs.
(A) Persons registered under old taxation system (Central Excise Law/VAT Laws Etc.)
then the person shall be liable to get registration with effect from 01.07.2017.
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Chapter 6 – Exemption CA. Raj Kumar
6
Exemption
Type
46
CA. Raj Kumar Chapter 6 – Exemption
Clarifica- Example:
tion
1-1-18 Confusion Clarification Conclusion
Q.: What about the assesses who have paid taxes during confusion
period: Get refund with interest.
Q.: What if such Notification (Second) issued after the expire of one
year from the date of original Notification: shall apply prospectively.
47
Chapter 6 – Exemption CA. Raj Kumar
Summary
EDUCATION
SDI / DDUGKY
EDUCATIONAL
NEWSPAPER INSTITUTE Corporate Cum Institute @ JOB
(WITH LIABRARY)
Training Program me
(Academic)
HEALTH
Blood Bank
Health Care
Clinical Establishment
Human Beings
Animal
Therapy
Bio- Medical
Waste
@ Precaution: “Public Toilets”
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CA. Raj Kumar Chapter 6 – Exemption
SPORTS
SPONSOR
FIFA
GOVERNMENT
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Chapter 6 – Exemption CA. Raj Kumar
KISAAN
(Farm)
Tube Insemination (Birth)
Electricity Exchange
Well
NCCCD Membership
Warehouse
Agriculture Produce/Rice/
Fumigator
Sugarcane
Fumigation Minor Forest Produce
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CA. Raj Kumar Chapter 6 – Exemption
ENTERTAINMENT
Zoo
Protected Monuments
@ Residence
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Chapter 6 – Exemption CA. Raj Kumar
TRANSPORTATION OF GOODS
DOMESTIC INTERNATIONAL
TRANSPORTATION OF PASSENGER
JAL
THAL
Section Number 15 /16/17
VAYU
DL /Passport
VISA (Embassy)
KOTA
City me
NPO & NPO (2)
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CA. Raj Kumar Chapter 6 – Exemption
BANKING
Interest
Charges
BC / BF
Financial Service to over-
seas – client charges (from
SEZ)
INSURANCE
BUSINESS
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Chapter 6 – Exemption CA. Raj Kumar
Import of services
Supplier NO GST Recipient Located in TT:
Located
in NTT - Government
- Individual for personal use
- Trust
- RBI
- Embassy
- UN/International
Organisation
- Sez (Unit /Developer)
Recipient Located in NTT:
Except Veesel
Supplier
Recipient:
Located in TT
- Foreign Tourist (Exclusively
foreign Tour)
- Deemed distinct
- NTT (Intermediary)
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CA. Raj Kumar Chapter 6 – Exemption
1. Charitable Trust
(a) Activity by way of Public health- by way of care & counseling of terminally ill
persons, HIV Infected persons, and person addicted to Drugs or Alcohol.
3. Religious Journey:
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Chapter 6 – Exemption CA. Raj Kumar
EDUCATION
1. NEWS:
2. LIABRARY:
Service of “Lending of Books etc. “By Public Libraries will be Exempted (However
such Service By Private Libraries will be Exempted under SN:3)
3. EDUCATIONAL INSTITUTE:
(a) Service of T.C.S. (Transportation facilities for student faculties & Staff,
catering Including Mid-day meal, security & House - keeping) will be
exempted ONLY for schools.
4. CORPORATE-CUM-INSTITUTE:
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CA. Raj Kumar Chapter 6 – Exemption
7. TRAINING:
Service provided “Under any training Programme” to CG/SG/UT i.e. where total
expenditure is born by Govt will be exempted.
HEALTH
1. VETERINARY CLINIC:
Service of preservation of STEM Cells or any Related Service by Cord Blood Bank
will be exempted.
- Health care service (Diagnostic treatment, care including food for patient,
Hair Transplant, Cosmetic & Plastic Surgery for CURE , Ambulance service)
4. REHABILITATION CENTRE:
5. BIO-MEDICAL WASTE:
- to clinical Establishment.
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Chapter 6 – Exemption CA. Raj Kumar
6. PUBLIC CONVINIENCE:
SPORTS
1. FIFA:
Service provided to or By FIFA and its subsidiaries Related to any Event under
FIFA : U-17 World-Cup, 2017. (Hosted in India) will be Exempted.
2. FIFA (Woman’s):
Service provided to or BY FIFA and its subsidiaries Related to any event under
FIFA U-17 women’s World-Cup 2020(to be hosted in INDIA) will be Exempted.
3. SPONSORSHIP:
- will be Exempted.
4. INDIVIDUAL SERVICE:
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CA. Raj Kumar Chapter 6 – Exemption
GOVERNMENT
1. Article 243G/W
- Service as specified under Article 243 G/W (e.g. Land Consolidation, Urban
Town Planning, Public Health etc.) provided By “Governmental Authority” will
be Exempted.
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Chapter 6 – Exemption CA. Raj Kumar
- will be Exempted.
4. GOVERMENT TO GOVERMRNT:
- will be exempted.
- Where the value of such service not more than Rs. 5000.
6. GOVERNMENT GRANT
- to CG/SG/UT/LA
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CA. Raj Kumar Chapter 6 – Exemption
7. LONGTERM LEASE
- Service of Granting Long Term Lease (30 years or more) of Industrial plots
or plot for Development of Infrastructure for Financial Business.
8. SPECTRUM:
- Service by CG/SG/UT/LA
- Prior to 01.04.2016
- will be exempted.
9. INDIAN RAILWAY:
- to Indian Railways.
- will be exempted.
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Chapter 6 – Exemption CA. Raj Kumar
12. NON-PERFORMANCE :
13. AGRICULTURE:
- to Individual Farmer.
- For cultivation of Plant/Rearing of animals For Food, fibre, raw material etc.
(Except Horse)
- will be exempted.
- Prior to 01.04.2016.
- will be exempted
15. MOT:
- Service By CG/SG/UT/Local.
- will be exempted.
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16. RTI:
17. ERCC:
- will be exempted.
- Service By CG/SG/UT
- will be exempted.
AGRICULTURE
1. Electricity:
- will be exempted.
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2. RICE:
- will be Exempted.
4. WAREHOUSING:
- will be Exempted.
5. ELECTRICITY
6. FUMIGATION
- will be Exempted.
7. AGRICULTURE RELATED
Services relating to cultivation of plants and rearing of all life forms of animals,
except the rearing of horses, for food, fibre, fuel, raw material or other similar
products or agricultural produce by way of-
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8. JOBWORK
- as Job Work
- will be Exempted
Answer. It is clarified that milling of paddy into rice is not eligible for
exemption under S. No 55.Therefore, it is hereby clarified that milling of paddy
into rice on job work basis, is liable to GST at the rate of 5%, on the processing
charges (and not on the entire value of rice).
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9. INSEMINATION
- will be Exempted.
10. SLAUGHTERING
- which do not change or alter the essential characteristics of the said fruits
or vegetables
- will be exempted.
12. NCED
- will be Exempted.
ENTERTAINMENT/ENTRY FEES
- Admission/Entry fees of a
- Museum, National Park, Wild Life Sanctuary, Tiger Reserve, ZOO and
Protected Monuments
- will be Exempted.
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CA. Raj Kumar Chapter 6 – Exemption
- Art, Culture
- will be Exempted.
3. ENTERTAINMENT
(d) Planetarium, where the consideration for right to admission to the events
or places as referred to in items (a), (b), (c) or (d) above is not more than
Rs. 500 per person.
4. FIFA (MEN/WOMEN)
- Will be Exempted.
5. FOLK/CLERICAL ART
- In Relation of “music”/Dance/Theatre
- will be exempted.
NOTE: Where such artist provides service as Brand Ambassador then it will be
taxable.
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2. CONSTRUCTION (KOTHI):
- Service by way of
- Pure Labour contracts (i.e. only service component i.e. Not a composite
supply having component of Goods).
- of Construction, commission, Erection, Installation of original work (Now
work).
- of a “SINGLE” Residential UNIT will be Exempted.
Note: Above service with Respect to “Residential Complex i.e. a Building Comprising
more than one UNIT will be taxable.
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5. TDR/FSI:
- except where the entire consideration has been received after issuance of
completion certificate, where required, by the competent authority or after
its first occupation, whichever is earlier.
- Premium, salami, cost, price, development charges or by any other name payable
in respect of service by way of granting of long term lease of thirty years, or
more,
- except where the entire consideration has been received after issuance of
completion certificate, where required, by the competent authority or after its
first occupation, whichever is earlier.
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TRANSPORTATION OF PASSENEGER
Analysis
AC (Taxable)
Non-AC (Exempted)
First
(Taxable)
Class/AC
RAIL INDIAN RAIL
Others: (Exempted)
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CA. Raj Kumar Chapter 6 – Exemption
* No Tax on ATF
* No Navigation Charges RCS= Reginal connectivity scheme
* No Landing charges.
2. Embassy:
- By way of issuance of
- will be Exempted.
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4. TRANSPORTATION OF GOODS
OTHERS (Taxable )
G.T.A. &
Courier
(Taxable)
BY ROAD
OTHERS
THAL
(Exempted)
BY RAIL (Taxable)
SOCIAL WELFARE
- Where consideration is upto Rs. 25000 (Including All) per month per
member.
- will be Exempted.
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2. Fair Price Shop:
- to CG/SG/UT
3. NPO’s:
Service by an unincorporated body or a non- profit entity registered under any law
for the time being in force, to its own members by way of reimbursement of
charges or share of contribution –
(b) For the provision of carrying out any activity which is exempt from the levy of
Goods and service Tax; or
(c) Up to an amount of Rs.7500 per month per member for sourcing of goods or
services from a third person for the common use of its members in a housing
society or a residential complex.
Note-1 Where contribution is more than Rs. 7500 Say 9000 than whole amount of
Rs. 9000 will be Taxable & RWA Eligible to book ITC as Input/Capital
goods or Input services.
Note-2 Member counting will be based on Number of Flat/Home & Not on the
basis of Number of owners.
Example:
- Mr. A & Mrs. A jointly owned a Flat then it will be called as 1 Flat.
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4. NPO: (2)
to its own members against consideration in the form of membership fee upto an
amount of one thousand rupees (Rs 1000/-) per member per year.
BANKING
2. Interest/forex:
- Will be exempted.
4. CARD PROCESSING
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CA. Raj Kumar Chapter 6 – Exemption
Example:
5. Agency Service:
6. IFS
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Chapter 6 – Exemption CA. Raj Kumar
INSURANCE
1. Annuity:
Services of life insurance business provided by way of annuity under the National
Pension System regulated by the Pension Fund Regulatory and Development
Authority of India.
2. Group Insurance:
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CA. Raj Kumar Chapter 6 – Exemption
3. Government Bodies:
4. General Insurance:
- will be Exempted.
Specified Scheme:
- etc.
5. Life Insurance:
- Will be Exempted.
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Chapter 6 – Exemption CA. Raj Kumar
* Life Micro Insurance product” (where Maximum cover is upto Rs. 200000)
7. Re-Insurance:
8. Atal Pension:
- Will be Exempted.
- will be Exempted.
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CA. Raj Kumar Chapter 6 – Exemption
BUSINESS RELATED
- will be Exempted.
- will be Exempted.
- to Local Authority.
- will be Exempted.
- will be Exempted.
3. Toll:
- will be Exempted.
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Chapter 6 – Exemption CA. Raj Kumar
4. Incubator:
- Service By Incubator (R&D Centres e.g. Amity Noida, ITI kharagpur, NDRI
Karnal)
Conditions:
T/O 20 L 30 L 40 L 50 L
GST
T/O 55 L 25 L 40 L 30 L
GST
T/O 20 L 55 L 40 L 15 L
GST
5. Incubator:
6. Legal Service:
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CA. Raj Kumar Chapter 6 – Exemption
- will be Exempted.
Moreover:
- Advice/Consultancy/Assistance
7. Business Exhibition:
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Chapter 6 – Exemption CA. Raj Kumar
1. Import of Service:
2. - Where supplier is located outside India & Recepient is also located outside
India.
- However Where”
- to a foreign Tourist
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CA. Raj Kumar Chapter 6 – Exemption
- In Relation to a Tour
- will be exempted.
- will be Exempted.
- will be Exempted.
Note:
- Bill of Loading
- Copy of Contract
- etc.
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Chapter 7 – Valuation CA. Raj Kumar
7
Valuation
SECTION: 15 VALUE OF TAXABLE SUPPLIES
1. The value of Taxable supply of Goods/Service will be the PRICE Actually paid or
payable for the said supply which is also known as “Transaction” Value.
(b) SUPPLIER’S LIABILITY: ANY amount which is a liability of supplier but paid
by Recepient (e.g. Goods Testing Charges) will be includible.
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CA. Raj Kumar Chapter 7 – Valuation
Situation Clarification
(1): X sells a mobile phone to Y. The cost of As per the provisions of section
mobile phone is ` 40,000/-. However, X gives 15(2) of the CGST Act, the amount of
Y an option to pay in installments, ` 11,000/- penal interest is to be included in the
every month before 10th day of the following value of supply. The transaction
month, over next four months (` 11,000/- *4 between X and Y is for supply of taxable
= ` 44,000/- ). Further, as per the contract, goods i.e. mobile phone. Accordingly, the
if there is any delay in payment by Y beyond penal interest would be taxable as it
the scheduled date, Y would be liable to pay would be included in the value of the
additional/penal interest amounting to mobile, irrespective of the manner of
` 500/- per month for the delay. In some invoicing.
instances, X is charging Y ` 40,000/- for the
mobile and is separately issuing another
invoice for providing the services of
extending loans to Y, the consideration for
which is the interest of 2.5% per month and
an additional/penal interest amounting to
` 500/- per month for each delay in payment.
(2) X sells a mobile phone to Y. The cost of The additional/penal interest is charged
mobile phone is ` 40,000/-. Y has the option for a transaction between Y and M/s
to avail a loan at interest of 2.5% per month ABC Ltd., and the same is getting
for purchasing the mobile from M/s ABC Ltd. covered under Sl. No. 27 of notification
The terms of the loan from M/s ABC Ltd. No. 12/2017-Accordingly, in this case
allows Y a period of four months to repay the the 'penal interest' charged thereon
loan and an additional/penal interest @ 1.25% on a transaction between Y and M/s ABC
per month for any delay in payment. Ltd. would not be subject to GST, as the
same would be covered under
notification No. 12/2017. The value of
supply of mobile by X to Y would be `
40,000/- for the purpose of levy of GST.
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(e) SUBSIDY
- will be Excludible.
And where all the 3 conditions related to subsidy is not satisfied then it will
be “Includible in Transaction value”
(f) DISCOUNT:
Time of Discount:
Type of Discount:
- Cash Discount.
- Quantity Discount
- Bulk discount.
- Corporate Discount
- Holi/Diwali/Discount
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CA. Raj Kumar Chapter 7 – Valuation
- Secondary Discount
- etc.
In case pre-supply Post supply discount will Also be Excludible By way of issuing
Discount it is credit note at later date i.e. GST Liability of supplier will be
automatically in Build reduced on the Basis of Credit Note Subject to conditions.
in the Invoice and it is
Condition:
Excludible.
There must be an agreement between supplier &
Recipient at the time of supply or Before there off
regarding “Post Supply Discount”.
Note (1) If Transaction value is not available/Reliable – then go for valuation Rules.
Where such value is fixed with Respect to some goods/service than valuation of
such goods/service will be Based on such value.
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Chapter 7 – Valuation CA. Raj Kumar
Clarifications
Levy of GST on the service of display of name or placing of name plates of the
donor in the premises of charitable organisation receiving donation or gifts from
individual donors
Issue: Whether GST is applicable on donations or gifts received from individual donors
by charitable organisation involved in advancement of religion, spirituality or yoga which
is acknowledged by them by placing name plates in the name of the individual donor.
Clarification: Some examples of cases where there would be no taxable supply are as
follows:-
(a) “Good wishes from Mr. Rajesh” printed underneath a digital blackboard donated by
Mr. Rajesh to a charitable Yoga institution.
(b) “Donated by Smt. Malati Devi in the memory of her father” written on the door or
floor of a room or any part of a temple complex which was constructed from such
donation.
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CA. Raj Kumar Chapter 7 – Valuation
A supply priced at ` 2,000 is made, with a credit period of 1 month for payment.
Thereafter, interest of 12% is chargeable. The payment is received after the lapse of
two months from the date of supply. Whether such interest will be included or not?
Answer
The amount of 12% p.a. (i.e. 1% per month) on ` 2,000 for one month after the free
credit period is ` 20. Such interest will be added to the value and thus, the value of
supply will work out to be ` 2,020, assuming the interest to be exclusive of GST.
Question 2
The selling price of a notebook is ` 50. For notebooks sold to students in Government
schools, a company uses its CSR funds to pay the seller ` 30, so that the students pay
only ` 20 per notebook. What is the treatment of such subsidy?
Answer
The value of the notebook will be ` 50, as this is a non-government subsidy. If the
same subsidy is paid by the Central Government or State Government, the value of the
notebook would be ` 20.
Question 3
Royal Biscuit Co. gives a discount of 30% on the list price to its distributors. Thus, for
a carton of Spice bisk, in the invoice the list price is mentioned as ` 200, on which a
discount of 30% is given to arrive at the final price of ` 140. How can u deal with such
discount?
Answer
The value is ` 140, as the discount is allowed at the time of supply and shown in the
invoice.
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Chapter 7 – Valuation CA. Raj Kumar
Question 4
The agreement of Raju Electrical Appliances with its dealers is that purchase of rice
cookers over 1000 pieces in the Diwali month will entitle them to discount of 5% per
cooker. Therefore, the quantum of discount can be determined only at the end of Diwali
month. How can u deal with such discount?
Answer
However, since the agreement relating to discount was in existence at the time of
supply, and the discount can be worked out for each invoice, such post supply discount
will be allowed as a deduction from the value of supply of rice cookers.
Raju Electrical Appliances can issue credit note for 5% of the value of goods along with
GST and claim adjustment of excess tax paid. The dealer must reverse the
proportionate input tax credit on the relevant stock to bring it in line with the reduced
tax.
Question 5
Pink and Blue Pvt. Ltd. (PBPL) sold goods to Orange Pvt. Ltd. (OPL) on 15th January at
` 50,000 (exclusive of taxes and discounts) and charged ` 9,000 as IGST @ 18%. The
terms of supply stipulated that discount @ 2% will be given to OPL if it makes the
payment within one month of the supply. OPL avails the input tax credit of ` 9,000 in
the month of January and makes the payment for the goods on 10th February. What is
the treatment of such discount as per section 15.
Answer
PBPL issues credit note for ` 1180 [` 1,000 for value of discount and ` 180 for
proportionate IGST leviable thereon] to OPL on 11th February. After receiving credit
note, OPL reverses the input tax credit of ` 180 attributable to the discount given by
the PBPL. PBPL can reduce its GST liability of the month of February by ` 180. OPL
would have paid ` 57,820 (` 50,000 + ` 9,000 - ` 1,000 - ` 180) to PBPL on 10th
February.
Question 6
In the above example, whether the answer will be different if the terms of supply did
not provide for discount @ 2% for payment within one month but PBPL offers such
discount to OPL at the time of payment after negotiation?
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CA. Raj Kumar Chapter 7 – Valuation
Answer
The discount will not be allowed as a deduction from the value. PBPL will issue a
commercial credit note for only the value of discount, i.e. for ` 1,000. OPL will not
reverse any input tax credit and PBPL will also not be able to reduce its GST liability
for the month of February. In this case, OPL would pay ` 58,000 (` 50,000 +9,000 - `
1,000) to PBPL on 10th February.
Question 7
A company announces turnover discounts after reviewing dealer performance during the
year. The discounts are based on performance slabs and are given as cash-back. What
is the treatment of such discount?
Answer
As these discounts were not known at the time of supply of the goods, they will not be
deducted from value of those goods. Hence, the company will not be able to adjust
excess tax paid from its tax liability.
Question 8: Black and White Pvt. Ltd. has provided the following particulars relating to
goods sold by it to Colourful Pvt. Ltd.
Tax levied by the municipal authority on the sale of such goods 5000
Black and White Pvt. Ltd. received ` 2000 as a subsidy from a NGO on sale of such
goods. The price of ` 50,000 of the goods is after considering such subsidy. Black and
White Ltd. offers 2% discount on the list price of the goods which is recorded in the
invoice for the goods.
Determine the value of taxable supply made by Black and White Pvt. Ltd.
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Chapter 7 – Valuation CA. Raj Kumar
Answer
Particulars `
Total 58,000
Question 9
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CA. Raj Kumar Chapter 7 – Valuation
Answer
Particulars `
Note: The interest for delay in payment of consideration will be includible in the value
of supply but the time of supply of such interest will be the date when such interest is
received in terms of section 13(6). Such interest has been assumed to be inclusive of
GST and thus, the value has been computed by making back calculations.
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Chapter 7 – Valuation CA. Raj Kumar
(1) Person making inter-state supply of goods. [eg. one state to another, export of
goods]
(b) Limited value services along with main business. [Maximum value: 10 % of
turnover within the state/UT or ` 5,00,000 whichever is higher ] ie if value
of these services exceed the maximum limit then the person not eligible for
the scheme
(5) Manufacturer of specified goods. [Pan masala, tobacco, ice cream, Aerated Water]
……………………………………………………………………………………………………………………………………………………………………
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CA. Raj Kumar Chapter 7 – Valuation
PFY CFY
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Chapter 7 – Valuation CA. Raj Kumar
and advances (2) PAN based scheme: It is PAN based scheme applicable for all
shall be registrations/taxable persons registered under same PAN.
ignored
completely. (3) Upto limit only: In CFY after aggregate turnover of ` 150/
` 75 lakhs; the scheme will be lapsed and the person required to pay
tax as per normal rate of taxes.
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CA. Raj Kumar Chapter 7 – Valuation
Examples:
Q.1 Mr X, a manufacturer submit the following details for PFY 18 -19. Determine whether
he is eligible for composition scheme for CFY (19-20)
Ans:
Mr X is eligible for composition scheme as aggregate turnover does not exceed ` 150
lakh
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Chapter 7 – Valuation CA. Raj Kumar
Q.2 Mr X, running a Restaurant, submit the following details for PFY 18 -19. Determine
whether he is eligible for composition scheme for CFY (19-20).
Ans:
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CA. Raj Kumar Chapter 7 – Valuation
Q.3 Mr X, is a manufacturer submit the following details for PFY 18 -19. Determine
whether he is eligible for composition scheme for CFY (19-20).
Ans:
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Chapter 7 – Valuation CA. Raj Kumar
Q.4 Mr X, is a trader submit the following details for PFY 18 -19. Determine whether he
is eligible for composition scheme for CFY (19-20).
Petrol - - 5
Ans:
Petrol - - 5
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CA. Raj Kumar Chapter 7 – Valuation
Q.5 Mr X eligible for composition scheme in CFY. He manufactured and sold the
followings with in the state as follows. Compute the GST amount.
Ans:
Q.6 Mr. X, a manufacturer (eligible for composition scheme), submit the following details
for CFY 19 -20. Determine the GST liability for current Financial Year.
1. Value of intra state supply under NCM chargeable to GST @ 18% 55,00,000
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Chapter 7 – Valuation CA. Raj Kumar
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CA. Raj Kumar Chapter 7 – Valuation
Example: Business start on 1-4-19 [Normal Rate = 18%, Composite Rate = 3%+3% =
6%]
First ` 20 lakh
(Threshold limit)
Balance ` 25 lakh
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Chapter 7 – Valuation CA. Raj Kumar
Q: A person Engaged in Supplying goods on well on service but service portion exceeds
the limit specifies under original Notification (` 5 Lakhs or 10% whichever is
Higher) whether such person will be Eligible for this scheme.
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CA. Raj Kumar Chapter 7 – Valuation
(i) PANBASED:
The scheme is Pan Based i.e. this scheme or Regular Scheme, it will be decided for
All premises/registrations under same PAN i.e. All Premises/registrations Either
Under this scheme or under Regular Scheme.
The Supplier shall issue bill of supply instead of Invoice and not entitled to collect
GST from his Recipient.
(iii) NO ITC:
No ITC Shall be Availed by the supplier who is availing this scheme. Moreover Tax
Paid by such supplier out of his pocket (3% + 3%) will not be Input Tax for
Recipient and Recipient also Eligible to Book ITC.
The supplier shall mention on the Top of bill of supply “as” “Not Eligible to collect
Tax on Supplies”.
While Calculated composite tax, exempted supplies will also be taken to Include.
The Composite Rate is applicable only on “Out-ward supplied made by him” i.e. if
any inward supplies taken by him under RCM then regular Rate of Tax will be
applicable & Not composite Rate of Taxes.
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Chapter 8 – Reverse Charge Mechanism CA. Raj Kumar
8
Reverse Charge Mechanism
What is Reverse Charge: As per Section 2 “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 section 9 (3), (4) or under section 5
(3),(4) of the Integrated Goods and Services Tax Act.
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CA. Raj Kumar Chapter 8 – Reverse Charge Mechanism
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Chapter 8 – Reverse Charge Mechanism CA. Raj Kumar
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Chapter 8 – Reverse Charge Mechanism CA. Raj Kumar
Fees liable to GST under RCM: In respect of such directors who are not the employees
of the said company, the services provided by them to the Company, in lieu of
remuneration as the consideration for the said services are taxable. Moreover the
recipient of the said services i.e. the Company is liable to discharge the applicable GST on
it on reverse charge basis.
Leviability of GST on remuneration paid by companies to the directors, who are also
an employee of the said company
Work in dual capacity: A director who has also taken an employment in the company may
be functioning in dual capacities, namely, one as a director of the company and the other
on the basis of the contractual relationship of master and servant with the company, i.e.
under a contract of service (employment) entered into with the company.
Salary not liable to GST: Accordingly, it is clarified that the part of Director’s
remuneration which are declared as “Salaries’ in the books of a company are not taxable
being consideration for services by an employee to the employer in the course of or in
relation to his employment.
Fess liable to GST under : It is further clarified that the part of employee Director’s
remuneration which is declared separately other than “salaries’ in the Company’s accounts
as Fees for professional or Technical Services shall be treated as consideration for
providing services is taxable. Moreover the recipient of the said services i.e. the
Company, is liable to discharge the applicable GST on it on reverse charge basis.
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CA. Raj Kumar Chapter 8 – Reverse Charge Mechanism
SN Supplies Recepient ie
person liable to
pay tax under RCM
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Chapter 9 – Invoice CA. Raj Kumar
9
Invoice
Section 31 Who,when, how to issue invoice/ bill of supply, Revised Invoice
etc
Section 32: only a registered person can collect in prescribed manner: A person
who is not a registered taxable person shall not collect in respect of any supply of
goods and/or services any amount by way of tax under the CGST/SGST Act and the
registered taxable person shall calloect tax in accordance with the provisions of this
Act.
Section 33: Amount of Tax to be indicated in tax invoice and other documents:
Where any supply is made for a consideration, every person who is liable to pay tax for
such supply shall prominently indicate in all documents relating to assessment, tax
invoice and other like documents, the amount of tax which will form part of the price at
which such supply is made.
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CA. Raj Kumar Chapter 9 – Invoice
Bill of supply:
(Last date (a) Where supply involve Removal of goods: Then the invoice shall be
or due issued before or at the time of removal of goods and in case
date) where supply does not involve Removal of goods: Then the invoice
shall be issued before or at the time of delivery of goods.
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Chapter 9 – Invoice CA. Raj Kumar
Where the due date of The invoice shall be issued on or before the
payment is due date of payment
ascertainable from the
contract,
Where the due date of The invoice shall be issued before or at the
payment is not time when the supplier of service receives
ascertainable from the the PAYMENT;
contract,
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CA. Raj Kumar Chapter 9 – Invoice
Revised A registered taxable person may, within 1 month from the date of
invoice issuance of RC issue a revised invoice against the invoice already issued
during the period:
Till the date of issuance of RC to him. (So that buyer can avail
the credit if he is eligible)
When to Where one or more tax invoice Where- one or more tax invoice has
issue has been issued and the taxable been issued and the taxable value or
value or tax charged in that tax charged in excess, or sale return
tax invoice is found less or under supply then the supplier, may
thenthe supplier shall issue to issue a CREDIT NOTE.
the recipient one or more debit
notes.
What to Any registered person who Supplier shall declare the details of
do after issues a debit note shall declare such one or more credit notes in the
issue the details of such debit note upcoming return but max to max by
in the upcoming return and the September of next FinancilaYear or
tax liability shall be adjusted. the date of filing of annual return,
whichever is earlier, and the tax
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Chapter 9 – Invoice CA. Raj Kumar
E- Invoice
A registered person whose aggregate turnover in any preceding financial year from 2017-
18 onwards exceeds [Rs.500 crore ], shall prepare invoice said rules in respect of supply
of goods or services or both to a registered person.
HSN IN INVOICE
Serial Aggregate Turnover in the Number of Digits of Harmonised System of
Number preceding Financial Year Nomenclature Code (HSN Code)
1. Up to Rs. 5 crores 4
2. more than Rs. 5 crores 6
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CA. Raj Kumar Chapter 10 – Time of Supply
10
Time of Supply
GST is payable on supply of goods or services. A supply consists of elements that can
be separated in time, like purchase order/agreement, dispatch (of goods), delivery (of
goods) or provision or performance of service, entry in the records, payment, and
entry of the payment in the recordsor deposit in the bank.
So, at which of these points of time does GST become payable? Does it become
payable when an agreement to supply goods or services is made, or when the goods are
shipped or the services are provided, or when the invoice is issued or when payment is
made? What if the goods are shippedover a period of time? What if the service is
provided over a period of time? Provisions relating to ‘time of supply’ provide answer to
all such and other questions that arise on the timing of the liability to pay CGST and
SGST/UTGST (intra-State supply) and IGST (inter-State supply) as time of supply
fixes the point in time when the liability to pay tax arises.The CGST Act provides
separate provisions for time of supply for goods and services vide sections 12 and 13.
Note:
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Chapter 10 – Time of Supply CA. Raj Kumar
Invoice date
OR
RESCUE Provision:
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CA. Raj Kumar Chapter 10 – Time of Supply
OR OR
61th day from the date of invoice 31th day from the date of
(Earlier) invoice
OR
Payment Date
Or (Earlier)
Special
Case:
Whether the Yes =ToS = Date of
Voucher Supply is Issue of Voucher
- Same -
Identifiable No
=ToS=Date of
Redemption of
Voucher.
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Chapter 10 – Time of Supply CA. Raj Kumar
Provision or - Same -
(Additional
Value)
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CA. Raj Kumar Chapter 10 – Time of Supply
“A”
Jan. 2018 1500 1862 -362 For 1862 TOS@ Invoice Based
Feb. 2018 2224 1862 +362 For 1862 TOS@ Invoice Based
“B”
“C”
Jan. 2018 2000 1862 +138 For 1862 TOS@ Invoice Based
Feb. 2018 1724 1862 -138 + for 138 TOS@ Payment Based
For 1862
An additinal Facility: At the option of the supplier in case “C” - ToS can be based on
invoice ie ignoring Rs. 138 received as advance. However this facility will works only when
amount received in excess of bill amount is upto Rs. 1000
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11
Registration
Who is required to take Registration?
# Supplier making taxable supply if his Person Person making INTER STATE TAXABLE
AGGREGATE TURNOVER in a financial year supply (However for taxable supply of
making
exceeds the limit of ` 20 lakh. services and for Handicraft goods
However if the person makes TAXABLE
supply which exemption limit of `20 /10 lakh will be
SUPPLIES from ANY of the special category is NON available)
states then the limit will be reduced to ` 10 TAXABLE Casual Taxable Person (However for
lakh. /EXEMPTED handicraft goods exemption limit of `20
HOW TO PROCEEDS…. (Exclusively) /10 lakh will be available)
Step 1: Find out aggregate turnover. Non Resident taxable person.
Agriculturi
Step 2: Check the applicable limit for the Person required to pay tax under RCM
person. (if made taxable supplies from any of st means an Taxable person u/s 9(5) [3 Specified
the 4 special category state, then limit of ` individual or a services: transportation, accommodation,
10 lakh shall be applicable) otherwise limit of ` Hindu misc. utilities]
20 lakh shall apply Undivided Person making supply on behalf of other
Step 3: If the aggregate turnover exceed the Family who taxable person (However for taxable
applicable limit (` 20/10 /40 lakh) then the undertakes supply of services exemption limit of `20
person will be required registration in all those /10 lakh will be available)
cultivation of
states/UT FROM where he made TAXABLE E-Commerce Operator (other than sec.
land–
SUPPLIES. 9(5).
………………………………………… NOTIFIED
OIDAR supplier from abroad to a person
PERSONS:
# Existing registered person: need compulsory other than Registered Taxable person.
migration and required registration if eg supplier
Input service Distributor (whether or
aggregate turnover exceeds ` 20 /10 lakh. where his
not separately registered under the act)
# Transferee/Successor: Transferee/ supplies
TDS Deductor (whether or not
Successor need registration afresh. exclusively
separately reg. under the act)
# Transferee (transfer under scheme, order of fall under
TCS collector (whether or not separately
high court etc.): new owner required registration RCM reg. under the act)
afresh.
Other specified person
# Voluntarily Registration
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then SHALL deposit advance tax on estimation basis for such extended
period. Such amount shall be credited in his E- cash Ledger account.
Circular No. 71/45/2018: Clarifications of issues under GST related to
casual taxable person
Issue Clarification
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CA. Raj Kumar Chapter 11 – Registration
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CA. Raj Kumar Chapter 11 – Registration
YES NO
Then the officer Then the officer intimate the deficiency within 3
GRANT registration working days from the date of submission of
within 3 working days application.
from the date of And applicant shall provide clarification or satisfy
submission of officer within 7 working days of receipts of
application information.
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Then the proper officer may cancel the registration FROM SUCH DATE as
he may deem [prospectively or retrospectively] after giving SCN and
opportunity of being heard However if found satisfactory reply then
drop the proceedings and pass an order.
Liability on cancellation:
Every registered person whose registration is cancelled shall pay an
amount, by way of debit in the
E-Credit ledger or
E-Cash ledger,
equivalent to the credit of input tax in respect of inputs held in
stock and inputs contained in semi-finished or finished goods
held in stock or capital goods or plant and machinery on the day
immediately preceding the date of such cancellation OR the output
tax payable on such goods, whichever is higher, calculated in such
manner as may be prescribed:
Provided that in case of capital goods or plant and machinery, the
taxable person shall pay an amount equal to the input tax credit
taken on the said capital goods or plant and machinery, reduced
by such percentage points as may be prescribed OR the tax on
the transaction value of such capital goods or plant and
machinery under section 15, whichever is higher.
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In case of death of sole proprietor if the business is continued by any person being
transferee or successor, the input tax credit which remains un-utilized in the
electronic credit ledger is allowed to be transferred to the transferee as per
provisions and in the manner stated below –
The GSTIN of transferee to whom the business has been transferred is also
required to be mentioned to link the GSTIN of the transferor with the GSTIN of
transferee.
(c) Transfer of input tax credit and liability: In case of death of sole proprietor, if
the business is continued by any person being transferee or successor of business,
it shall be construed as transfer of business. section 18 of the CGST Act, allows
the registered person to transfer the unutilized input tax credit lying in his
electronic credit ledger to the transferee in the manner prescribed in rule 41 of
the CGST Rules, where there is specific provision for transfer of liabilities.
The transferor and the transferee/successor shall jointly and severally be liable
to pay any tax, interest or any penalty due from the transferor.
Furthermore, Where a person, liable to pay tax, interest or penalty under the
CGST Act, dies, then the person who continues business after his death, shall be
liable to pay tax, interest or penalty due from such person under this Act. It is
therefore clarified that the transferee/successor shall be liable to pay any tax,
interest or any penalty due from the transferor in cases of transfer of business
due to death of sole proprietor.
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Rule 11. (1) Any person having multiple places of business within a State or a
Separate Union territory, requiring a separate registration for any such place of
registration business under section 25 (2) shall be granted separate registration in
for multiple respect of each such place of business subject to the following
places of conditions, namely:—
business (a) such person has more than one place of business as defined in
within a section 2(85);
State or a
Explanation. - it is hereby clarified that where any place of
Union
business of a registered person that has been granted a separate
territory
registration becomes ineligible to pay tax under section 10, all
other registered places of business of the said person shall
become ineligible to pay tax under the said section.
(b) such person shall not pay tax under section 10 for any of his places
of business if he is paying tax under section 9 for any other place
of business;
(c) all separately registered places of business of such person shall
pay tax under the Act on supply of goods or services or both made
to another registered place of business of such person and issue a
tax invoice or a bill of supply, as the case may be, for such supply.
(2) A registered person opting to obtain separate registration for a
place of business shall submit a separate application in FORM GST
REG-01 in respect of such place of business.
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Chapter 11 – Registration CA. Raj Kumar
(3) The provisions of rule 9 and rule 10 relating to the verification and
the grant of registration shall, mutatis mutandis, apply to an
application submitted under this rule.
Rule 12: (1) Any person required to deduct tax in accordance with the
Grant of provisions of section 51 or a person required to collect tax at
registration source in accordance with the provisions of section 52 shall
to persons electronically submit an application, duly signed or verified through
required to electronic verification code, in FORM GST REG-07 for the grant
deduct tax of registration through the common portal, either directly or
at source or through a Facilitation Centre notified by the Commissioner.
to collect
(1A) A person applying for registration to [deduct or] collect tax in
tax at
accordance with the provisions of [section 51, or, as the case may
source
be,] section 52, in a State or Union territory where he does not have a
physical presence, shall mention the name of the State or Union
territory in PART A of the application in FORM GST REG-07 and
mention the name of the State or Union territory in PART B thereof
in which the principal place of business is located which may be
different from the State or Union territory mentioned in PART A.
Rule 17: (1) Every person required to be granted a Unique Identity Number in
Assignment accordance with the provisions of section 25 (9) may submit an
of Unique application electronically in FORM GST REG-13, duly signed or
Identity verified through electronic verification code, in the manner specified
Number to in rule 8 at the common portal, either directly or through a
certain Facilitation Centre notified by the Commissioner.
special
(1A) The Unique Identity Number granted under sub-rule (1) to a
entities
person under clause (a) of sub-section (9) of section 25(9) shall be
applicable to the territory of India.
(2) The proper officer may, upon submission of an application in FORM
GST REG-13 or after filling up the said form, or after receiving a
recommendation from the Ministry of External Affairs, Government
of India, assign a Unique Identity Number to the said person and issue
a certificate in FORM GST REG-06 within a period of three working
days from the date of the submission of the application.
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CA. Raj Kumar Chapter 11 – Registration
Rule 21A (1) Where a registered person has applied for cancellation of
Suspension registration under rule 20, the registration shall be deemed to be
of suspended from the date of submission of the application or the date
registration from which the cancellation is sought, whichever is later, pending the
completion of proceedings for cancellation of registration under rule
22.
(2) Where the proper officer has reasons to believe that the
registration of a person is liable to be cancelled under section 29 or
under rule 21, he may, after affording the said person a reasonable
opportunity of being heard, suspend the registration of such person
with effect from a date to be determined by him, pending the
completion of the proceedings for cancellation of registration under
rule 22.
(3) A registered person, whose registration has been suspended under
sub-rule (1) or sub-rule (2), shall not make any taxable supply [ie the
registered person shall not issue a tax invoice and, accordingly, not
charge tax on supplies made by him during the period of suspension.]
during the period of suspension and shall not be required to furnish
any return under section 39.
(4) The suspension of registration under sub-rule (1) or sub-rule (2)
shall be deemed to be revoked upon completion of the proceedings by
the proper officer under rule 22 and such revocation shall be
effective from the date on which the suspension had come into
effect.]
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CA. Raj Kumar Chapter 11 – Registration
TEST Yourself
Question 1
A dealer ‘X’ has two offices – one in Delhi and another in Haryana. How can he
determine the aggregate turnover for registration?
Answer
In order to determine whether ‘X’ is liable for registration, turnover of both the
offices would be taken into account and only if the same exceeds the applicable
threshold limit, X is liable for registration.
Question 2
Madhur Oils, Punjab, is engaged in supplying machine oil as well as petrol. Supply of
petrol is not leviable to GST, but supply of machine oil is taxable. How can he determine
the aggregate turnover for registration?
Answer
In order to determine whether Madhur Oils is liable for registration, turnover of both
non-taxable as well as taxable supplies would be taken into account and if the same
exceeds the applicable threshold limit, Madhur Oils is liable for registration.
Question 3
Mohini Enterprises has appointed M/s Bestfords & Associates as its agent. M/s
Bestfords & Associates makes supply of goods on its own account as well as on behalf
of Mohini Enterprises. How can he determine the aggregate turnover for registration?
Answer
All the supplies of goods made by M/s Bestfords & Associates as agent of Mohini
Enterprises as well as on its own account will be included in the aggregate turnover of
M/s Bestfords & Associates.
Question 4
Prithiviraj of Assam is exclusively engaged in intra-State supply of shoes. His
aggregate turnover in the current financial year is ` 22 lakh. In view of the discussion
in the above paras, the applicable threshold limit for registration for Prithviraj in the
given case is ` 40 lakh. Whether prithiviraj is required to be registered?
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Chapter 11 – Registration CA. Raj Kumar
Answer
If in above example, all other things remaining the same, Prithiviraj is exclusively
engaged in supply of pan masala instead of shoes, he will not be eligible for higher
threshold limit of ` 40 lakh and the applicable threshold limit for registration in that
given case will be ` 20 lakh. Thus, Prithiviraj will be liable to get registered under GST.
If instead of pan masala, Prithiviraj is exclusively engaged in supply of taxable services,
the applicable threshold limit for registration will still be ` 20 lakh. Thus, Prithiviraj
will be liable to get registered under GST.
Further, if Prithiviraj is engaged in supply of both taxable goods and services, the
applicable threshold limit for registration will be ` 20 lakh. Thus, Prithiviraj will be
liable to get registered under GST.
Question 5
Ashoka of Manipur is exclusively engaged in intra-State supply of paper. Its aggregate
turnover in the current financial year is ` 12 lakh. Whether Ashoka is required to be
registered
Answer
Since Ashoka is making taxable supplies from Manipur which is a Special Category
State, the applicable threshold limit for registration for Ashoka in the given case is `
10 lakh. Thus, he is liable to get registered under GST.
If in above example, all other things remaining the same, Ashoka is exclusively engaged
in supply of taxable services instead of toys, the applicable threshold limit for
registration will still be ` 10 lakh. Thus, Ashoka will be liable to get registered under
GST.
Further, if Ashoka is engaged in supply of both taxable goods and services, the
applicable threshold limit for registration in that given case will be ` 10 lakh only. Thus,
Ashoka will be liable to get registered under GST.
Question 6
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CA. Raj Kumar Chapter 11 – Registration
Answer
Since Raghav is engaged in supplying garments from a Special Category State, the
applicable threshold limit for him gets reduced to ` 10 lakh. Further, Raghav is liable to
get registered under GST in both Assam and Tripura on his aggregate turnover
crossing the threshold limit of ` 10 lakh.
Question 7
Answer
Since Uday Enterprises is exclusively engaged in making taxable supplies of goods from
Maharashtra, the applicable threshold limit for obtaining registration is ` 40 lakh.
However, the threshold limit will not be reduced to ` 10 lakh in this case, as supply of
alcoholic liquor for human consumption from Nagaland (one of the Special Category
States) are non-taxable supplies.
In the given case, since the aggregate turnover of Uday Enterprises exceeds the
applicable threshold limit of ` 40 lakh, it is liable to obtain registration. It will obtain
registration in Maharashtra, but is not required to obtain registration in Nagaland as he
is not making any taxable supplies from said State.
Question 8
Answer
Services by an entity registered under section 12AA of the Income-tax Act, 1961 by
way of charitable activities are exempt from GST. Thus, Bhavyajyoti Foundation is not
liable for registration as it is engaged exclusively in supplying services exempt from
tax.
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Chapter 11 – Registration CA. Raj Kumar
Question 9
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CA. Raj Kumar Chapter 11 – Registration
Question 13
Dhola & Co., located in Delhi, is engaged in supply of taxable goods in the neighbouring
States of Punjab and Haryana. Its aggregate turnover in current FY is ` 10 lakh.
Whether the registration is required?
Answer
However, if in the above case, Dhola & Co. is engaged in inter- State supply of taxable
services instead of goods, it will be eligible for exemption from registration till its
aggregate turnover does not exceed ` 20 lakh.
Question 14
Ariza Pvt. Ltd., located in Madhya Pradesh, is a supplier of taxable and notified
handicraft goods. It supplies these goods in the neighbouring States of Uttar Pradesh
and Orissa. Its aggregate turnover in the month of April is ` 15 lakh. Whether the
registration is required?
Answer Although Ariza Pvt. Ltd. is engaged in making inter-State supplies of taxable
goods, it is not liable to obtain registration till its aggregate turnover does not exceed
` 20 lakh as it has availed the exemption from registration under Notification No.
03/2018 IT.
Question 15
Sugam Services Ltd. is engaged in taxable supply of services in Delhi. The turnover of
Sugam Services Ltd. exceeded ` 20 lakh on 1st November. Whether the registration is
required if yes then from which date ?
Answer
Question 16
Meethalal & Sons - a supplier in Maharshtra - has three branches in Mumbai, Pune
and Mahabaleshwar. Mumbai and Pune branches are engaged in supply of garments
and Mahabaleshwar branch engaged in supply of shoes. Determine the registration
provisions.
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Chapter 11 – Registration CA. Raj Kumar
Answer
it can obtain single registration for Mahrashtra declaring one of the branches as PPoB
(let’s say Mumbai) and other two branches (Pune and Mahabaleshwar) as APoB or it can
obtain separate GST registration for each of the three branches in Mumbai, Pune and
Mahabaleshwar as separate places of business.
In case Meethalal & Sons opts to have separate registrations for its all three branches
and Mumbai branch sends some garments [subject to GST] for sale to Pune branch,
Mumbai branch must raise a tax invoice and pay tax on such transfer of garments to
Pune branch.
Question 17
Sugam Services Ltd. is engaged in taxable supply of services in Madhya Pradesh. The
turnover of Sugam Services Ltd. Exceeded ` 20 lakh on 1st November. Whether the
registration is required if yes than from which date?
Answer
It is liable to get registered by 1st December [30 days] in the State of Madhya
Pradesh. It applies for registration on 28th November and is granted registration
certificate on 5th December. The effective date of registration of Sugam Services
Ltd. is 1st November.
Question 18
In above example, if Sugam Services Ltd. applies for registration on 3rd December and
is granted registration certificate on 10th December then what is the effective date
of registration?
Answer
The effective date of registration of Sugam Services Ltd. is 10th December.
Question 19
Krishnadev & Co., engaged in supplying taxable goods, is registered in Rajasthan. It
wishes to participate in a business exhibition being held in Delhi. However, it does not
have a fixed place of business in Delhi. Whether Krishnadev & Co is required to be
registered in Delhi ?
Answer
In this case, Krishnadev & Co. has to obtain registration as a casual taxable person in
Delhi.
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CA. Raj Kumar Chapter 12 – Input Tax Credit
12
Input Tax Credit
Analysis of Section 16: CONDITIONS FOR Claiming I.T.C.
PORTAL PORTAL
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TEST YOURSELF
Question 1
Answer
Though the goods are not physically received at the premises of A, section 16(2)(b)
allows ITC of such goods to A.
Question 2
The registered head office (New Delhi) of ABC Pvt. Ltd. enters into a contract with
DEF Pvt. Ltd. of New Delhi for repair and maintenance of computers systems installed
at its registered branch office in Bengaluru, Karnataka. DEF Pvt. Ltd. issues an invoice
on ABC Pvt. Ltd., New Delhi for the services provided by it. Whether head office of
ABC Pvt limited can claim ITC on such service?
Answer
Though the actual services are received by the branch office and not by the head
office, section 16(2)(b) allows ITC of such repair and maintenance services to head
office.
Question 3
XYZ enters in to a contract with ABC for supply of 10 MT of a chemical for ` 1,18,000
(inclusive of GST of ` 18,000) in August, 20XX. The chemical is to be delivered in lots
over a period of three months. ABC raises the invoice for the entire amount in August
and XYZ also makes the payment in the same month but the supply is completed in
November. When the ABC can claim Input tax credit ?
Answer
Though XYZ paid the full tax as early as August, it can take the ITC of the same only
on receipt of last instalment of the chemical in the month of November.
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CA. Raj Kumar Chapter 12 – Input Tax Credit
Question 4
Due to a quality dispute, PZP Ltd withheld payment on a machine supplied by a vendor
till it could be rectified. Over 180 days went by in this dispute. Whether PZP can take
the input tax credit?
Answer
The credit taken by PZP on the invoice got added to the output tax liability of PZP and
thus, it had to pay back the credit. Only after the vendor rectified the machine and
PZP released the payment, could PZP take the credit again.
Question 5
Hercules Machinery delivered a machine to XYZ in January 2018 under Invoice no. 49
dated 28th January, 2018 for ` 4,15,000 plus GST, and undertook trial runs and
calibration of the machine as per the requirements of XYZ. The amount chargeable for
the post- delivery activities was covered in a debit note raised in April 2018 for
` 50,000 plus GST. XYZ did not file its annual return till October, 2018. What is the
last date for taking ITC in such case?
Answer
Though the debit note was received in the next financial year, it relates to an invoice
received in the financial year ending March 2018. Therefore, the time limit for taking
ITC available on ` 50,000 as well as on ` 4,15,000 is 20th October, 2018; earlier of the
date of filing the annual return for 2017-18 or the return for September 2018.
Question 6
Answer
ITC on inputs and input services attributable to such 50 pair of shoes being used for
non-business purposes will not be available.
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Chapter 12 – Input Tax Credit CA. Raj Kumar
SECTION: 17 (1)(2)(3)(4)(5)(6)
SECTION: 17 (5) &(6) : Negative list of Input Tax Credit : ie. No ITC shall be
allowed to Recipient:As per section 17(5) Credit of following inward supplies shall not be
available to the recipient subject to some exceptions.
Generally input tax credit of passenger motor However for certain class of persons input tax credit
vehicle Shall not be allowed to recipient of Passenger motor vehicle will be available who
provides
Following specified services ie use of motor vehicle
as :
Eg.
(10L + 2.8L)
For further supply of such motor vehicle
PROWISE CA
Coaching For passenger transportation service
Innova Car
Input Tax Credit For motor driving service
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CA. Raj Kumar Chapter 12 – Input Tax Credit
AIRCRAFT/VESSEL
Generally input tax credit of Vessel/Aircraft However for certain class of person it will be
shall not be Allowed to the recipient : available who Used the Vessel/Aircraft
for following purpose :
Eg. Eg.
ITC ×
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Chapter 12 – Input Tax Credit CA. Raj Kumar
NOTE: Input Tax Credit of repair maintenance/services & Insurance shall also be
allowed to
A manufacturer (eg TATA Motors) of motor vehicle/vessel and air craft .eg
Stock Insurance.
Insurance Companies
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Chapter 12 – Input Tax Credit CA. Raj Kumar
Note: If there is a legal requirement to do so then the credit in respect of above 3 cases
shall be allowed.
For example travel benefit to employee is a legal requirement
= ITC √
TAXI
Prowise CA
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When WORKS CONTRACT Service taken However when the services is taken for or related to plant &
by an end user for construction of machinery = ITC √
immovable property.
PROWISE
LAND/Building
Tele Communication Tower Work contract ITC √ Service for installation/Erection of
Generator (Machine)
Sec.17(6) Pipe line
When goods (Building material construction However ITC on such goods/services shall be
service – taken by end user for construction of allowed when used for or related to plant &
immovable property = ITC ×) Machinery.
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COMPOSITION DEALER
Eg.
Inward supply
COMPOSITE
BUYER
DEALER
No Input Tax Credit Input Tax Credit ×
USA
Import of Goods MCP INDIA
Participate
Non-Resident in Trade
Inter State fair
Miscellaneous
Purchase
[Itc not allowed] 0---------------0 Personal Consumption/Stolen/Destroyed etc.
---------------------------------------------------------------------------------------------------
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Purchase
[ITC taken] Free Sample Distribution
(i) (ii) (Liable to GST)
Purchase
[No ITC taken] Free Sample Distribution
(i) (ii) (Not Liable to GST)
Examples-
1. ITC on cars purchased by a manufacturing company for official use of its employee
is blocked.
3. ITC on cars purchased by a company engaged in renting out cars for transportation
of passengers, is allowed.
Examples –
1. ITC on aircraft purchased by a manufacturing company for official use of its CEO
is blocked.
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Chapter 12 – Input Tax Credit CA. Raj Kumar
Example –
2. ITC on maintenance & repair services availed by a company for a truck used for
transporting its finished goods, is allowed.
Examples –
1. AB & Co. a caterer of Amritsar has been awarded a contract for catering in a
marriage to be held at Ludhiana. The firm has given the contract for supply of
snacks, to be served in the marriage, to CD & Sons, a local caterer of Ludhiana.
ITC on such outdoor catering services availed by AB & Co., is allowed.
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(i) Where any inward supply is used for business purpose then input tax credit to
recipient shall be allowed [Section : 16]
(ii) Where any inward supply is used for “non business” purpose then NO Input Tax
Credit shall be allowed to Recipient [Section : 16]
(iii) Where inward supply is used commonly for business as well as non business purpose
then proportionate Input Tax Credit shall be allowed [Section : 17(1)]
Taxable
Zero Rated (Export supplies)
then input tax credit on such inward supply shall be allowed [Section : 16]
(ii) Where any goods are used in exempted supplies then input tax credit as related
inward supplies shall not be allowed [Section : 16]
ITC × Exempted
ITC √ Taxable NON
ITC √ Zero Rated EXEMPTED
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Chapter 12 – Input Tax Credit CA. Raj Kumar
(iii) Where any inward supplies are used commonly for “Exempted as well as non-
exempted purpose then input tax credit shall be allowed at proportionally”.
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CA. Raj Kumar Chapter 12 – Input Tax Credit
Note: In case of mix use first of all book whole common credit ie common credit will
be transferred to E-credit ledger and after that Reverse to the extent of ineligible
credit.
Q.1
Which Includes:- (Note: All above values are Exclusive of All TAXES.)
i.e. Use in Exempted & Non-Exempted, Business & Non-Business Purpose = Rs.
70,000/-
[Deemed itc related to non-business purpose = 70,000 *5% = 3500 and itc related to
exempted purpose : 70,000 * 30/70= 30,000 ie total ineligible itc out of 70,000= Rs.
33,500 so it shall be reversed.
(1) Now if due to various adjustments of dr. and cr. Notes final reversal of ITC is Rs.
4,10,000 then Rs. 8000 need to be reversed with interest from 1st April of next FY till
the date of payment @18% PA.[Maximum by September of next FY]
(2) Now if due to various adjustments of dr. and cr. Notes final addition in liability is Rs.
3,95,000 then itc of Rs.7000 shall be allowed.
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Chapter 12 – Input Tax Credit CA. Raj Kumar
Q. 2
Outward Supplies
Renting of XYZ Ltd.
Immovable property Service
Value : 1,00,000 Exempted = Rs. 30 Lakh
IGST : 18,000 Non-Exempted = Rs. 40 Lakh
1,18,000
Book itc of Rs. 18,000 and reverse ITC in the same tax period Rs. (18,000 * 30/70 =Rs.
7,714 as it is ineligible ITC)
April, 2018
Q. 3
Sale of furniture = Rs. 30 Lakh
Renting of
Immovable property Service Securities Trading = Rs. 40 Cr.
Value : 1,00,000
IGST : 18,000
1,18,000
Book itc of Rs. 18,000 and reverse ITC in the same tax periodRs. (18,000 * 40/70 =Rs.
10,286 as it is ineligible ITC)
Note: securities trading will be treated as exempted service for the purpose of section
17 and shall be valued @ 1% ie Rs. 40 lakh.
April, 2018
Q. 4
Sale of furniture = Rs. 30 Lakh
Renting of
Immovable property Service GTA Service A Ltd.
Value : 1,00,000
IGST : 18,000 Rs. = 40 Lakh @ RCM
1,18,000
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CA. Raj Kumar Chapter 12 – Input Tax Credit
Book itc of Rs. 18,000 and reverse ITC in the same tax periodRs. (18,000 * 40/70 =Rs.
10,286 as it is ineligible ITC)
Note: RCM supplies generally not an exempted supply but for the purpose of section 17 it
shall be treated as exempted supply.
Q. 5
Sale of furniture = Rs. 30 Lakh
Renting of
Immovable property Sale of Land & Building = Rs. 2 Cr.
(Value as per Circle Rate)
Value : 1,00,000
GST: 18,000
1,18,000
Book itc of Rs. 18,000 and reverse ITC in the same tax periodRs. (18,000 * 200/230 =Rs.
15,652 as it is ineligible ITC)
Note: Sale of land and building (Completed) not a supply but for the purpose of section 17
it shall be treated as exempted supply.
Q. 6
Supply: EXCLUSIVE use in Exempted @ Exempted AND
(No itc) BANKING Non-Exempted Supplies
SECTOR
Supply Exclusively use in Non-Exempted
(full itc allowed)
NEGATIVE Supply (no itc)
Bank
Branch
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Chapter 12 – Input Tax Credit CA. Raj Kumar
Note: What is exempted and what is non exempted supplies for the purpose of Rule
42 and Rule 43.
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CA. Raj Kumar Chapter 12 – Input Tax Credit
(A) Capital Goods Exclusively USE for : Exempted /NON Business Supply = NO ITC
(B) Capital Goods Exclusively USE for : NON Exempted & Business Purpose = ITC
30,000/- allowed
(A)
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Chapter 12 – Input Tax Credit CA. Raj Kumar
(A)
Capital Goods Purchase Earlier & that time USE for NON
Exempted and Business purpose- NOW USE for common
purpose
Input tax was Rs. 60,000 (at that that this amount was
transferred to E- credit Ledger)
Now find out monthly common credit by spreading it over a period of 60 months ie
190,000/60 = Rs. 3,166.67
Now find out ineligible portion and such amount will be added to E liability register @
every month for 60 months.
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CA. Raj Kumar Chapter 12 – Input Tax Credit
TEST YOURSELF
Question 7
A registered person manufactures a product ‘X’ chargeable to 18% GST, a product ‘Y’
chargeable to NIL rate of tax and a product ‘Z’ which is exported without payment of
tax under bond. All the three products are manufactured from common inputs and
input services. Whether the input on all input and input services can be claimed?
Answer
ITC on inputs and input services attributable to product ‘Y’ being an exempt supply, will
not be available.
Question 8
(1) Whether ITC on cars purchased by a manufacturing company for official use of
its employees is blocked?=Yes
(2) Whether ITC on cars purchased by a car dealer for sale to customers is
allowed? = yes
(3) Whether ITC on cars purchased by a company engaged in renting out cars
for transportation of passengers, is allowed? = Yes
(4) Whether ITC on cars purchased by a car driving school is allowed? =Yes
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Chapter 12 – Input Tax Credit CA. Raj Kumar
Question 9
(1) AB & Co., a caterer of Amritsar, has been awarded a contract for catering
in a marriage to be held at Ludhiana. The firm has given the contract for
supply of snacks, to be served in the marriage, to CD & Sons, a local
caterer of Ludhiana. ITC on such outdoor catering services availed by AB &
Co., is allowed or not? = Allowed
(3) Outdoor catering service is availed by a company to run a free canteen in its
factory. The Factories Act, 1948 requires the company to set up a canteen
in its factory. ITC on such outdoor catering is allowed or not? =Allowed
(4) The Managing Director of a company has taken membership of a club, the
fees for which is paid by the company. ITC on such service is allowed or not
?=Not allowed.
(5) A company avails services of a travel agency for organizing a free vacation
for its top performing employees. ITC on such services is blocked or Not?=
Blocked
(6) A manufacturing company purchases food items for being served to its
customers, free of cost. ITC on such goods is allowed or not?= Not allowed.
Question 10
(1) CD & Co., a works contractor of Noida, has been awarded a contract for
construction of a commercial complex in Lucknow. The firm avails services of EF
& Co., a local works contractor of Lucknow, for the construction of complex. ITC
on such works contract services availed by CD & Co., is blocked or Not? = Not
blocked.
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CA. Raj Kumar Chapter 12 – Input Tax Credit
(4) A consulting firm has availed services of a works contractor for repair of its
office building. The company has booked such expenditure in its profit and loss
account. ITC on such services is allowed or not?= Allowed
(6) ITC on works contracts services availed by a software company for construction
of its office, is allowed or not? Not allowed.
Question 11
MN & Constructions procures cement, paint, iron rods and services of architects and
interior designers for construction of a commercial complex for one of its clients.
Whether ITC on such goods and services is allowed to MN & Constructions?
Answer
Question 12
A company buys cement, tiles etc. and avails the services of an architect for renovation
of its office building. The company has booked such expenditure in its profit and loss
account. Whether ITC on such goods and services is allowed ?
Answer
Question 13
Answer
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Chapter 12 – Input Tax Credit CA. Raj Kumar
Question 14
A company buys cement, tiles etc. and avails the services of an architect for
construction of its office building. Whether ITC on such goods and services is allowed?
Answer
Question 15
Mr. X owns a grocery store. He procures rice, wheat and biscuits for being sold in its
store. Out of the inventory so purchased, he gives 10 kgs each of rice and wheat to his
wife for household use. Whether ITC on 10 kg of Rice and 10 Kg of wheat is allowed?
Answer
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CA. Raj Kumar Chapter 12 – Input Tax Credit
Sec.: 18(1) (a) : NEW REGISTRATION: Applied for with in PRESCRIBED Time (i.e. 30 Days)
36000
--------- × 600 = 21600/=
1000 Kg.
ITC……..Dr. 21600
10.09.2020: To Purchase 21600
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Chapter 12 – Input Tax Credit CA. Raj Kumar
36000
--------- × 600 = 21600/=
1000 Kg.
ITC……..Dr. 21600
10.09.2020: To Purchase 21600
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CA. Raj Kumar Chapter 12 – Input Tax Credit
WHAT ABOUT
CAPITAL GOODS Section: 18(1) (c) : COMPOSITION to NormalScheme:
(USED CG)
O/P TAX: 1%/5% . OUTPUT TAX = √ @Normal Rate
(COMPO) 10-9-2020 ITC =X 150L+ ITC = √
01-10-19 (ii)
Normal
Scheme
(i) INPUT PURCHASE (iii) ITC Milega: WEF. - 10.09.2020
Value (1000 Kg. x 200) = 200000
Cap.Goods ITC on Cap.
GST @ 18% = 36000
PURCHASE Goods: ?=Yes
236000
Value:100000
+GST:18000 Proporionate
Purchase A/c ------------Dr 236000 (iv) Stock as on : 09.09.2020 Ki
118000 @
To Bank 236000 Sham
Remaining Life
i.e. Op. Stock on 10.09.2020
Total Tax paid=18000
As Such Form = 100 Kg. R/M
Less: ITC Related
In Form of WIP = 200 Kg R/M
to USAGE
In Form of “F.G.”= 300 Kg. R/M
Period =
Lying in Stock 600 Kg.
1-10-19 to 10-9-2020
36000
= 18000*5%*4 quarter
--------- × 600 = 21600/=
= (3600)
1000 Kg.
Balance ITC = 14400
ITC ……….dr 14,400
ITC……..Dr. 21600
To capital goods 14,400
10.09.2020: To Purchase 21600
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Chapter 12 – Input Tax Credit CA. Raj Kumar
WHAT ABOUT
CAPITAL GOODS Section: 18(1) (d) : EXEMPTED TO NON-EXEMPTED :
(USED CG)
10-9-2020 600 Kg. Stock
10-9-2020
(Exempted)
01-10-19
Non O/P TAX = X . OUTPUT TAX = √ @Normal Rate
Exempted ITC =X Notification- ITC = √
Date
(ii)
Cap.Goods ITC on Capital
PURCHASE Goods: ?=Yes (i) INPUT PURCHASE (iii) ITC Milega : WEF. - 10.09.2020
Value:100000 Value (1000 Kg. x 200) = 200000
+GST:18000 Proportionate GST @ 18% = 36000
118000 @ 236000
Remaining
Life Purchase A/c ------------Dr 236000 (iv)Stock as on : 09.09.2020 Ki sham
Total Tax paid=18000 To Bank 236000 i.e. Op. Stock on 10.09.2020
1ess: ITC Related
To USAGE
Period = As Such Form = 100 Kg. R/M
1-10-19 to 10-9-2020 In Form of WIP = 200 Kg R/M
In Form of “F.G.”= 300 Kg. R/M
= 18000*5%*4 Quarter Lying in Stock 600 Kg.
= (3600)
Balance ITC = 14400 36000
ITC ……….dr 14,400 --------- x 600 = 21600/=
To capital goods 14,400 1000 Kg.
ITC……..Dr. 21600
10.09.2020: To Purchase 21600
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CA. Raj Kumar Chapter 12 – Input Tax Credit
Sec.: 18(2): ITC Booking LAST DATE: 1Year from the Date of INVOICE of Supply of such
INPUT/Capital goods.
Rule : 40
Section: 18(3)
Section: 18
Rule: 41
(2) + (2) + (3) (4)+ (5) + (6)
SHIFT
Mr. X : ITC-02
Detail – Sale/amalgamation etc.
P.C.A – Certificate Accept Rs. 2 Lakh
E- CREDIT Ledger 200000 E-Credit Ledger: as ITC
E- LIA. Register E-Liability Register
PAN - REG - GSTIN E-CASH LEDGER PAN -Fresh GSTIN E-CASH - Ledger
Mr. X
“GOING
“Going Concern - Sale @ 10 Cr.
CONCERN” Mr. Y
Business
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Chapter 12 – Input Tax Credit CA. Raj Kumar
Section: 18(4)
STOCK
ITC √ ITC X
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CA. Raj Kumar Chapter 12 – Input Tax Credit
(A)- 1-4-2020
INPUT PURCHASE
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Chapter 12 – Input Tax Credit CA. Raj Kumar
Now final amount to be added in output tax liability: Rs 21,600 or 12,600 whichever
is higher ie Rs. 21,600
Note: Where Refractory bricks, Moulds and dies, Jigs and fixtures are supplied as
SCRAP, the taxable person may pay tax on the transaction value of such goods
determined under section 15.
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CA. Raj Kumar Chapter 12 – Input Tax Credit
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Chapter 12 – Input Tax Credit CA. Raj Kumar
NOTE:
(From the date of purchase Till the date, Just before the
date of shifting to regular Scheme Eligible ITC)
182
CA. Raj Kumar Chapter 12 – Input Tax Credit
Last date to book (2) In all above cases the registered person can book the credit.
ITC
- till 1 Year from the date of issue of tax invoice relating to
such supply.
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Chapter 12 – Input Tax Credit CA. Raj Kumar
Calculation in (5) The amount of credit under sub-section (1) and the amount
prescribed payable under sub-section (4) shall be calculated in such manner as
manner may be prescribed.
Supply of Capital (6) In case of supply of capital goods or plant and machinery, on
goods which input tax credit has been taken, the registered person shall
pay an amount equal to
the input tax credit taken on the said capital goods or plant
and machinery reduced by such percentage points as may be
prescribed or
[Whichever is higher]
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CA. Raj Kumar Chapter 12 – Input Tax Credit
TEST YOURSELF
Question 16
Mr. Z becomes liable to pay tax on 1st August and has obtained registration on 15th
August. Whether the Mr. Z can take the ITC on inputs held in stock and as part of
semi-finished goods or finished goods held in stock or capital goods as on 31st July?
Answer
Mr. Z is eligible for ITC on inputs held in stock and as part of semi-finished goods or
finished goods held in stock as on 31st July. Mr. Z cannot take ITC on capital goods.
Question 17
Mr. A applies for voluntary registration on 5th June and obtains registration
certificate on 22th June. Whether the Mr. A can take the ITC on inputs held in stock
and as part of semi-finished goods or finished goods held in stock or capital goods as on
21st June?
Answer
Mr. A is eligible for ITC on inputs held in stock and as part of semi-finished goods or
finished goods held in stock as on 21st June. Mr. A cannot take ITC on capital goods.
Question 18
Mr. B, a registered taxable person, was paying tax under composition scheme upto 30th
July. However, w.e.f. 31st July, Mr. B becomes liable to pay tax under regular scheme.
Whether Mr. B will be eligible for ITC on inputs held in stock and inputs contained in
semi-finished or finished goods held in stock and on capital goods?
Answer
Mr. B will be eligible for ITC on inputs held in stock and inputs contained in semi-
finished or finished goods held in stock and on capital goods as on 30th July.
ITC on capital goods will be reduced by 5% per quarter from the date of the invoice.
185
Chapter 13 – Manner of Payment CA. Raj Kumar
13
Manner of Payment
E-CASH LEDGER:
(i) Every deposit towards Tax, Interest, Penalty, Fee or Other Amount of a Person
Whether Online or Offline Shall be credited to E-Cash Ledger.
Process: The taxable person required to pay tax on supplies made by him or on
Inward supplies fall order RCM.
For making payment of GST the person need to create challan from GST
Portal.
& Such Tie upped – Bank or Branch of the Banks called as Authorized Bank
(Total: 26 Apx) & as and when the person make payment to authorized
branch it will be updated in E –Cash Ledger at GST Portal.
Note: Date of Credit in Authorised Bank will be the date of Deposit in E-Cash
Ledger
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CA. Raj Kumar Chapter 13 – Manner of Payment
(ii) The amount available in E-Cash Ledger will be used for making any payment towards
Tax, Interest, Penalty, Etc. and on Utilisation of Such Amount, E-Cash Ledger will
be debited by that amount. [ie While File GSTR = 3B]
E-LIABILITY REGISTER:
(iv) Every Taxable Person shall discharge his tax dues and Other dues in the following
Order
E-CREDIT LEDGER:
(vi) The amount available in E-Credit Ledger may be used for making payment of output
Tax in Prescribed manners.
1. Credit of IGST..
2. Credit of CGST..
3. Credit of SGST …
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Chapter 13 – Manner of Payment CA. Raj Kumar
3. Credit of UTGST …
Any Balance in E-Cash Ledger or E-Credit Ledger, After payment of Tax, Interest,
Penalty, Fee or Any other may be refunded.
- to the Recipient.
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CA. Raj Kumar Chapter 13 – Manner of Payment
Interest for (1) Every person who is liable to pay tax but fails to pay the tax or
belated period any part thereof to the Government by due date,
@ 18% [max]
- shall for the period for which the tax or any part thereof
for belated
remains unpaid, pay,
period
- on his own, interest at such rate, maximum 18% PA.
How to (2) The interest shall be calculated, from next day after due date.
calculate
interest
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Chapter 13 – Manner of Payment CA. Raj Kumar
- Then CG shall Transfer Equivalent amount from CGST fund to IGST Fund.
Where any amount has been transferred from the electronic cash ledger under this Act
to the electronic cash ledger under the State Goods and Services Tax Act or the
Union territory Goods and Services Tax Act,
the Government shall, transfer to the State tax account or the Union territory tax
account, an amount equal to the amount transferred from the electronic cash ledger,
in such manner and within such time as may be prescribed.
190
CA. Raj Kumar Chapter 14 – Return
14
Return
Background
Note: (1) No rectification of any omission or incorrect particulars shall be allowed
after: next FY SEPTEMBER month’s return due date or annual return filing date
(whichever is Earlier)
Every GSTR 1 Outward Monthly By 10th and Note: GSTR-3 Part: A shall be electronically
Registered supply return 16th,17th generated by way of return info from: FORM
person GSTR-1and 2. Registered taxable person will
including CTP then discharge liability of TAX,INTEREST,
GSTR 2 Inward supply Monthly By 11th to 15th PENALTY, FEE or ANY OTHER AMOUNT
Other than: return payable by debiting the E-CASH LEDGER or
E- CREDIT LEDGER as given in Form GSTR-3
Composite Part B. (Any refund of balance in E CASH
dealer Combined Monthly By 20th
GSTR 3 LEDGER shall also be claimed in Form GSTR-3
Return Part B )
-NR
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Chapter 14 – Return CA. Raj Kumar
Registered GSTR 5 Periodic Monthly By 20th Last Return: 20th of Next Month or within 7
NON return days after the last day of validity – whichever is
Resident earlier.
taxable
person
New GSTR ? First return One time After grant of Details of outward supply
Registrant RC
For the period:The date on which liability of
registration arises TILL the date on which
Registration is granted.[Pre RC Period]
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CA. Raj Kumar Chapter 14 – Return
- Shall Furnish Details of Outward supplies in form GSTR=1 for a tax Period
on or Before 10th of next month and
NOTE: The Person shall not be allowed to furnish such return from 11th to
15th of Next Month i.e. Window closed for GSTR:1 for 5 Days.
- After that any modification done by Recipient in filing GSTR:2 may be accepted or
rejected by Supplier by 17th of Next Month. i.e. Practically 2 Days 16th& 17th and
Corresponding GSTR:1 shall be amended if correction made by Recepient is
accepted by supplier.
- @ Maximum by the Date of filing of Next Year Sep. Month’s Return or Filing
of Annual Return Date (Whichever is Earlier)
NOTE:
- Any Registered Person who has furnished GSTR:1 for any tax period.
- which remain unmatched due to any error / Omission which leads to a case
of Short-Payment.
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Chapter 14 – Return CA. Raj Kumar
- Every Registered Person [Other than Non Resident, Composite Dealer, Input
service distributer, TDS Deductor, TCS Collector]
- After 10th Day but before the 15th day of the next month.
NOTES:
- A Registered person who has furnished GSTR 2 for any tax period and
- which have remain unmatched due to any error or omission which leads to a
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CA. Raj Kumar Chapter 14 – Return
(i) GSTR:3
- Every Registered Person (Other than Non Resident, Composite Dealer, ISD,
TDS Deductor, TCS Collector)
- Shall Furnish return in GSTR:3 for every calendar month or part thereof,
and details of Inward and Outward Supplies, ITC Availed, Tax Payable, Tax
Paid Etc.
(ii) GST-CMP:08
- A composite dealer shall furnish GST- CMP:08 for each Quarter or Part
thereof,
- @ Details of turnover within the state and inward supplies, Tax payable, Tax
Paid Inward
(iii) GSTR:5
- Every Registered Non-Resident Taxable Person Shall file GSTR:5 for every
Calendar Month of part thereof
- @ Specified Details
NOTE:
The Commissioner may extend the time limit for Furnishing the Return under this
section.
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Chapter 14 – Return CA. Raj Kumar
- shall pay the tax due as per such return by the last date and
- Every registered person (Other than Non Resident, ISD, TDS Deductor,
TCS Collector)
(vi) RECTIFICATION:
After Furnishing a Return, where any registered person discovers any omission or
Incorrect Particulars.
OR
- Every Registered Person who has made outward supplies in PRE RC PERIOD [The
Period start with the date on which the person liable for Registration till the date
of grant of Registration)
- shall declare the same in his first return furnished by him after grant of
registration corticated.
196
CA. Raj Kumar Chapter 14 – Return
By whose (2) Every Registered Person who is required to get his accounts
account is audited [Limit of Rs. 2 crore]shall furnish, electronically, the
required to get annual return under sub-section (1) along with a copy of the
Audited audited annual accounts and a reconciliation statement, reconciling
the value of supplies declared in the return furnished for the
[GSTR: 9C]
financial year with the audited annual financial statement,
Every Registered person: [Other Than : Non-Resident, Composite Dealer, ISD, TDS
Deductor, TCS Collector]
197
Chapter 14 – Return CA. Raj Kumar
Section: 47 Periodic and Any registered taxable person who fails to furnish
Final Return the-details of outward or inward supplies (U/S;
Late fees
37,38,39,45)by the due date shall be liable to pay
GSTR-
late fee of Rs.100 [Reduced to Rs. 25 and 10 for NIL
1,2,3,10
RETURN] for every day during which such failure
continues subject to a maximum of Rs. 5000.
Section : Note: The responsibility for correctness shall continue to rest with the
48 registered taxable person.
GST To be a GST Practitioner need to apply in specified form.
Practitioner The person should be: Indian Citizen, sound mind, solvent, non-
convicted, Graduate, post graduate, Qualified final exam of
CA/CS/CMA etc]
No person shall be eligible to attend before any authority as a
GST practitioner in connection with any proceedings under the
Act on behalf of any registered or un-registered person unless he
has been enrolled for this.
A GST practitioner attending on behalf of a registered or an
unregistered person in any proceedings under the Act before any
authority shall produce before such authority, if required, a copy
of the authorisation.
198
CA. Raj Kumar Chapter 14 – Return
Rule. 67A. Manner of furnishing of return or details of outward supplies by short messaging
service facility
for a registered person who is required to furnish a Nil return under section 39 in FORM
GSTR-3B or
a Nil details of outward supplies under section 37 in FORM GSTR-1 or
a Nil statement in FORM GST CMP-08 for a tax period,
any reference to electronic furnishing shall include furnishing of the said return or the
details of outward supplies or statement through a short messaging service using the
registered mobile number and the said return or the details of outward supplies or
statement shall be verified by a registered mobile number based One Time Password
facility.
Explanation. - For the purpose of this rule, a Nil return or Nil details of outward supplies or
Nil statement shall mean a return under section 39 or details of outward supplies under
section 37 or statement under rule 62, for a tax period that has nil or no entry in all the
Tables in FORM GSTR-3B or FORM GSTR-1 or FORM GST CMP-08, as the case may be.
199
Chapter 15 – E-Way Bill CA. Raj Kumar
15
E-Way Bill
2. When E- YES if exceed the limit- If Value of consignment exceed Rs. 50,000
Way Bill is (for lower value : E way bill - optional)
Total 67,900
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CA. Raj Kumar Chapter 15 – E-Way Bill
S= Supplier Transporter
R= Recipient EWB Can be made by any of the above person S T R
T= By using GSTIN (Registered person), PAN & Aadhar (Unregistered
Transporter Person): Enrolment – USER ID & Password
Login
EWB – Generate
S T R
201
Chapter 15 – E-Way Bill CA. Raj Kumar
Type of EWB
E – Way Bill
Consolidated EWB
DL
S
EWB -1
S JAMMU
EWB – 2
S EWB -3 CHD PATHAN
KOT
S
EWB - 4 DL
Consolidate
EWB
7 Non-motorized vehicles,
202
CA. Raj Kumar Chapter 15 – E-Way Bill
Goods to Nepal/Bhutan,
8
Sr. Distance Validity period
Validity of No.
E- Way Bill
1. Upto 100 km. One day in cases other than Over
Dimensional Cargo or multimodal shipment
in which at least one leg involves transport
by ship
2. For every 100 km. One additional day in cases other than
or part thereof Over Dimensional Cargo or multimodal
thereafter shipment in which at least one leg involves
transport by ship
203
Chapter 15 – E-Way Bill CA. Raj Kumar
Note:The validity of the e-way bill may be extended within eight hours
from the time of its expiry.
Note:Bill generate in one state (say in UP) – will be valid for all state /
UT ie. valid for all over India
PART : A
From :
S /T /R
To : Bill to & Ship to
Item Detail : Destination / HSN/Rate
etc.
204
CA. Raj Kumar Chapter 15 – E-Way Bill
PART : B
S/T/R
TRANSPORTER DETAIL
Both parts are independent and can be filed in any sequence. EWB
number will be generated on filing of of any part.
Checkpost
Supplier Driver (P.I.C.) Receiver
Officer
: Invoice
Check Relevant Document :E- Way Bill (Hard Copy / E-Mode)
: Bilty
Advance method for ; Bill of Entry in case of Imported goods.
verification E-Way Bill
QR Code – Verify
Use radio frequency E- Way Bill No.
identification devices
Note : Physical verification done once – Not again physical verification unless
specific information of contravention.
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Chapter 15 – E-Way Bill CA. Raj Kumar
(a) being a person paying tax under section 10, or availing the benefit of notification No.
02/2019, has not furnished the statement in FORM GST CMP-08 for two
consecutive quarters; or
(b) being a person other than a person specified in clause (a), has not furnished the
returns for a consecutive period of two months.
(c) When a person has not furnished the statement of outward supplies (GSTR:1) for any
two months or quarters, as the case may be.
Test Yourself
Question 1
Answer
In such a scenario, only one e-way bill would be required. Part A can be filled by the
consignor and then the e-way bill will be assigned by the consignor to Transporter A.
Transporter A will fill the vehicle details, etc. in Part B and will move the goods from
City X to City Y.
On reaching City Y, Transporter A will assign the said e-way bill to the Transporter B.
Thereafter, Transporter B will be able to update the details of
Part B. Transporter B will fill the details of his vehicle and move the goods from City Y
to City Z [Press Release No. 144/2018 dated 31.03.2018].
Question 2
A consignor hands over his goods for transportation on Friday to transporter. However,
the assigned transporter starts the movement of goods on Monday. When the validity
period of E Way bill starts?
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CA. Raj Kumar Chapter 15 – E-Way Bill
Answer
The validity period of e-way bill starts only after the details in Part B are updated by
the transporter for the first time.
In the given situation, Consignor can fill the details in Part A on Friday and handover his
goods to the transporter. When the transporter is ready to move the goods, he can fill
Part B i.e. the assigned transporter can fill the details in Part B on Monday and the
validity period of the e-way bill will start from Monday [Press Release No. 144/2018
dated 31.03.2018].
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List of Sections of CGST Act, 2017 CA. Raj Kumar
PRELIMINARY
Section 2 : Definitions.
ADMINISTRATION
Section 3 : NA
Section 4 : NA
Section 5 : NA
Section 6 : NA
Section 7 : Supply.
Section 11 : Exemptions.
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CA. Raj Kumar List of Sections of CGST Act, 2017
Section 19 : Taking input tax credit in respect of inputs and capital goods sent
for job work.
REGISTRATION
209
List of Sections of CGST Act, 2017 CA. Raj Kumar
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CA. Raj Kumar List of Sections of CGST Act, 2017
RETURNS
Section 43A : Procedure for furnishing return and availing input tax credit
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List of Sections of CGST Act, 2017 CA. Raj Kumar
PAYMENT OF TAX
212