CA Inter Compact Books For May 21

For CA Intermediate
TAXATION
INDIRECT TAXES
G S T
For May 2021 & November 2021
CA. Raj Kumar

AUTHOR
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
Why Tax: Government need fund to fulfill Increasing developmental needs of

country or to fulfill Socio Economic Objectives of the country,
that’s why Government impose tax.
What is Tax: Tax is a Compulsory Extortion of money made under an Act.
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.
1
Chapter 1 – Introduction and Constitution CA. Raj Kumar
Features of Indirect Tax
(i) It is an important source of Revenue to the government.
(ii) It is levied on goods and/or services.
(iii) Tax burden is shifted to another person.
(iv) Indirect Tax does not pinch directly to the END User.
(v) Changes in the Rates of Indirect Taxes directly affects inflation.
(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.
PRE & POST GST
- 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,
- Moreover All manufacturers, Trader & Services provided will be called on

“Supplier” and All Buyer/customers will be called as Recipient and
- International transaction will also be called as “Inter State Transaction”
2
WHAT IS GST
- GST is a Tax imposed on Goods and/or Services. It is a value added tax

having continuous chain
- There must be a supply of Goods/Services.
of credit where burden
is shifted on END User
- Supply Can be of Two Types as follows—
* 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)
3
CREDIT CONCEPT UNDER GST
Inward Supply 0-----------0 Outward Supply CGST
SGST
INPUT TAX OUTPUT TAX XXX UTGST
IGST
I.T.C. : OF..
CGST Use ITC XXX
SGST NET GST XXX
UTGST
IGST
(2) C C
I
I
(1)
S S
(3)
U U
It means:
(i) First of all credit of IGST will be utilised-
- For the payment of IGST
- For the payment CGST / SGST or UTGST
(in ANY Ratio and in any sequence)
4
(ii) After that credit of CGST will be utilised –
- For the payment of CGST
(iii) Lastly credit of SGST will be utilised –
- For the payment of SGST
(iii) Lastly credit of UTGST will be utilised –
- For the payment of UTGST
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.
Deficiencies in Old System of Taxation
Or
Benefit GST
- (i) Multiple taxes – Now one TAX one Notices
(ii) Multiple compliances – Now all compliances at one place.
- (iii) Cascading effect – Now cascading effects Removed to the extent.
- (iv) Double Taxation – Now double Taxation Removed to the extent.
- (v) No Uniformly among laws- Now one law with greater uniformity
- (vi) Now No Evasion of TAXES to the Extent which leading to Increment in

Government Revenue.
- Moreover due to Introduction of GST there will be a major Boost to “Make in

INDIA” Initiative & GST is a win-win situation for All.
5
GST NETORK (GSTN)
- GSTN is a company Registered under section 8 of Companies Act, 2013 i.e. A

company “Not for Profit”.
- Both the Govt. provide funding to GSTN.
- GSTN provide GST portal service to Govt. and Tax Payers.
- Facilities offered by GSTN/GST Portal are as follows—
* Registration, filing of Return, Distribution of IGST Between CG & SG/UT,

Matching of Returns, Analysis Tax Payer’s profile and provide Various Kinds
of Report to Government.
Now See Diagram as “GIST of GST” that shows Entire Frame Work of GST
6
CONSTITUTION
For Introduction of GST in INDIA, lots of changes were required in constitution

of INDIA. Mainly four Articles in constitution need to be study.
 ARTICLE No. : 246A
* 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.
 ARTICLE No.: 269A
* 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.
 ARTICLE No.: 366
* GST means A Tax as Goods/services.
(Excluding Tax on Alcoholic Liquor a human consumption)
* Goods – Any kind of moveable property will be called as Goods.
* Service – Anything other than goods will be treated as service.
* All International Transaction will also be called as Inter-State transaction.
7
 ARTICLE No.: 279A: GST COUNCIL
1. Where industry demands any change in law it approach GST Council for the same.
2. Such matter is discussed in GST COUNCIL.
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.
4. After that a formal notification is issued for the same.
5. Now the change will be effective for industry and government.
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:
Actionable claim means CONTIGENT assets.
For Example:
 Betting, Gambling, Lottery
 Pending Litigations
 Insurance claim
 Etc.
However under GST-Regime Actionable claim Relating to Lottery, Betting, Gambling

ALONE will be Regarded as supply of Goods.
REST of the forms of Actionable Claim – will NOT be treated as supply of Goods or
services. Hence NO Question of GST.
2. AGENT: Agent” means:
 A person, including a factor, broker, commission agent, arhatia, del credere agent,
or any other mercantile agent, by whatever name called,
 who carries on the business of supply or receipt of goods or services or both on

behalf of another.
9
Chapter 2 – Definitions CA. Raj Kumar
3. PRINCIPAL: Principal” means: a person on whose behalf an agent carries on the

business of supply or receipt of goods or services or both.
4. AGGREGATE TURNOVER: “Aggregate Turnover” means:
 the aggregate value of all OUTWARD taxable supplies
 (excluding the value of inward supplies on which tax is payable by a person on RCM
OR NCM BASIS),
 exempt supplies,
 exports of goods or services or both and
 inter-State supplies of persons having the same Permanent Account Number,
 to be computed on all India basis
 but excludes central tax, State tax, Union territory tax, integrated tax and cess.
5. EXEMPT SUPPLY:
Exempt Supply” means:
 Supply of any goods or services or both which attracts nil rate of tax or which
may be wholly exempt from tax
 and includes non-taxable supply.
Note: Exempt supply – shall NOT Include Zero Rated Supply.
6. AGRICULTURIST: Agriculturist” means an individual or a Hindu Undivided Family who

undertakes cultivation of land–
 By own labour, or
 By the labour of family, or
 By servants on wages payable in cash or kind or by hired labour under personal

supervision or the personal supervision of any member of the family.
10
7.FAMILY: Family” means,––
 The spouse and children of the person, and
 The parents, grand-parents, brothers and sisters of the person (if they are
wholly or mainly dependent on the said person)
8. AUTHORISED BANK: “Authorised Bank” shall mean a bank or a branch of a bank

authorised by the Government to collect the tax or any other amount payable under this
Act.
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.
 For above GSTN & Banks are tie upped :
 & 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
9. BOARD: Central board of Indirect Taxes and Customs [C.B.I.C.]
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
Note: Supply – should be undertaken in the course of or Furtherance of Business
(a) Any trade, commerce, manufacture, profession, vocation, adventure, wager or any
other similar activity, whether or not it is for a pecuniary benefit;
11
(b) Any activity or transaction in connection with or incidental or ancillary to sub-clause

(a);
(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;
(f) Admission, for a consideration, of persons to any premises;
(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
(i) Any activity or transaction undertaken by the Central Government, a State

Government or any local authority in which they are engaged as public authorities.
SN. 11
CAPITAL GOODS INPUTS INPUT SERVICE
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.
+
+ +
Use Such goods are used or Used or Intended to be Used or Intended

Intended to be used in the used by a supplier in the to be used By a
course or furtherance of course or furtherance of Supplier – IN the
Business. Business. course or
furtherance of
Business.
12
12. CASUAL TAXABLE PERSON “Casual Taxable person” means:
 A person who occasionally undertakes transactions involving supply of goods or

services or both in the course or furtherance of business,
 in a State or a Union territory where he has no fixed place of business (Branch

office).
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.
SOME OTHER POINT:
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.
Normally – if a person supply goods/service in a particular month : than GST of that

month is to be paid on 20th of next month but in case of CTP GST Payment – need to be
paid in advance ie 5 days in advance.
13. NON-RESIDENCE TAXABLE PERSON: Non-Resident Taxable Person” means:
 Any person who occasionally undertakes transactions involving supply of goods or

services or both,
 who has no fixed place of business or residence in India.
14. COMMON PORTAL: Means the common goods and services tax electronic portal.
* Common portal means GST Portal
* It is owned by GSTN
* GSTN is a company Registered under Companies Act. 2013 (Sec : 8 ) ie Not for
profit
13
* GSTN Provide service to Government & Government Fund to GST on Actual/Cost

basis.
* All work like Registration, Return, Payment, Computation & settlement of – IGST &
Other functions etc. done by GSTN.
15. CONSIDERATION:
As we know that to be a supply of goods/service : All the 3 conditions must be

satisfied:
 These should be an activity ie sale, lease etc.
 During the business/further hence of business.
 For a consideration.
 However : Some notified activities will be called as supply even if No

Consideration)
 More over Consideration is liable to GST ie Consideration is equal to transaction

value & liable to GST
CONSIDERATION INCLUDES:
Supply of Goods/Service Recipient [SN:93]

Supplier (Passive/ACTIVE * The person who is
Something in Return in liable to pay
Consideration.
Any Form (Monetary or OR
Non-monetary) Deposit * The person to whom
“NOT a PART of Consideration Delivery is made
OR
(Unless Adjusted as Consideration)” to whom Service is
Rendered
Govt. Subsidy Where no consideration
is payable
“Shall NOT be treated as a PART Including Agent
of consideration.”
Subsidy from
Any other
“Includible as A PART of Consideration”
14
16. Credit and Debit Note
Basis CREDIT NOTE DEBIT NOTE
Issued CREDIT Note is issued by supplier Debit NOTE issued by Supplier

By ONLY. (IF issued by Recipient for ONLY (IF issued by Recipient for
Accounting purpose – than – NOT A Accounting purpose then NOT a
Relevant Documents) Relevant Documents)
[Note: Debit note also called as

supplementary INVOICE]
It can be issued only IN Following It can be issued ONLY in following

Reason
situations:— situations:
of
In terms of Value In terms of Value
Issuing
* Over Invoice In terms of TAX. * Under Invoice In terms of TAX
Deficient Supply
* Under Supply Return Supply
DEBIT NOTE
 Debit note/Supplementary Invoice is issued by the supplier of goods/services

will only be relevant
 Reasons of issuing debit note may be : Under invoicing in terms of charging lower
value or lower GST in main invoice, one more reasons
 So to supplement main invoice supplier need to issue a debit note.
15
Treatment of Debit Note GST – With the help of Example
Mr. X
Sale of 110 Unit @ Rate Rs. 50/- per unit

Supplier
But Invoice Issued only of 100 Unit By Mistake.
Main Invoice : 12/3/2019 Value (100 Unit * 50) = 5000
GST @ 18% = 900
5900
Treatment on the basis of main Invoice
 Mr. X Supplier file GSTR: 1 By 10th April.
 E – Liability Register of Mr. X – Updated by Rs. 900 as output GST.
 On 20th April Mr. X Paid GST of Rs 900 to Government.
 On the other side recipient will book ITC of Rs. 900/-
 Recipient file GSTR: 2 by 15thApril on GST Portal therefore E-Credit Ledger of

recipient updated by Rs 900 as ITC.
 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
Ie. Debit Note/Supplier Invoice (In June : 2019)
Value (10 Unit * 50 ) = 500
GST 18% = 90
590
16
 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/-
CREDIT NOTE : (JUST OPPOSITE OF DEBIT NOTE)
 Credit note issued by supplier will only be relevant.
 Reason of issuing credit note: Over Invoicing etc.
Eg. Unit Sold = 100 Unit
But invoice issued for110 Unit
Eg. Value : 110 Unit * 50 = 5500
12/3/19 GST = 990
= 6490
SUPPLIER RECIPIENT
Output Liability = 990 ITC = 990
+ Later on suppose in JUNE : 2019 Value : 500
credit note issued GST : 90
 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/-
THUMB RULE: Output GST @ Supplier = ITC to Recipient
17. E - LIABILITY REGISTER/E - CREDIT LEDGER /E-CASH LEDGER:
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 :
17
E – Liability Registered
 Balance in E – Liability registered increased when supplier files : GSTR = 1 in the

next month by 10th including details of debit note (if any)
 Balance in E – Liability Registered decreased on payment of liability & filing

GSTR 3 on 20th of Next Month.Moreover If there is a case of credit note in
GSTR 1, it will decrease the balance of E – Liability Register.
E – CREDIT LEDGER
 Balance in E- Credit ledger increased when recipient files GSTR: 2 on 15th of

next month on GST portal.
 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.
 Balance in E - Cash Ledger Decreased on payment of tax on 20th of next month.
18. INDIA: India” means:
 The territory of India as referred to in article 1 of the Constitution,
 its territorial waters, seabed and sub-soil underlying such waters,
 continental shelf, exclusive economic zone or any other maritime zone as per
Maritime Zones Act, 1976, and
 the air space above its territory and territorial waters.
18
Some Background:
INWARD SUPPLY OUTWARD SUPPLY

[Input Tax: XXX] [Output Tax: XXX]
Input Tax Credit (ITC) USE XXX

XXX
Note: ITC can be utilized for the payment of OUTPUT Tax Only.
19. INWARD SUPPLY:
Inward Supply” in relation to a person, shall mean:
 Receipt of goods or services or both
 whether by purchase, acquisition or any other means
 with consideration or without consideration.
20. INPUT TAX: Input Tax” in relation to a registered person, means:
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.
NEITHER NCM NOR RCM: The IGST charged on import of goods.
However tax paid by composite dealer out of his pocket will not be input tax for
recepient.
21. INPUT TAX CREDIT: Means the Credit of INPUT TAX.
Note: For a Tax to qualify as INPUT Tax Credit, it must first be “INPUT TAX”.
19
22. OUTWARD SUPPLY:
 Supply of goods/service provided/given by supplier by any mode as sale/

transfer/barter etc.
 with consideration and without consideration only in selected cases
 Made during the course of business/further hence of Business.
23. OUTPUT TAX: Output Tax” in relation to a taxable person, means:
 The tax chargeable under this Act
 on taxable supply of goods or services or both made by him or by his agent
 but excludes tax payable by him on reverse charge basis;
24. JOB WORK: Job Work” means:
 Any treatment or process undertaken by a person
 on goods belonging to another registered person and
 the expression “job worker” shall be construed accordingly.
Mr. X Job Worker
Out Source any one or more process Process
Multiple Process Job Worker
 Any treatment or process under taken by a person (Job Worker whether

registered or not) – on goods belonging to another person ( Mr. X)
 & the person doing job work is called as job worker.
20
Job Work V/S GST:
Mr. X Independent Person [Job Worker]
[T1]Transfer of Goods Worth Rs 5 Lakh

Job Work
(Principal) Labour + Material

Job Charges = Rs. 15000/-
Return of Goods after Job Work = SERVICE
[T1]
* We are talking about goods.
* But transfer of goods to job worker is not a supply therefore no question of GST
at all @ T1
Activity
Business SUPPLY
No Consideration
More over T1 does not fall under 4 specified cases.
[T2] Return of Goods
Here we are talking about goods
It is not a Supply.
Activity
Business
Consideration of Goods
So No Question of GST
21
[T3]
Supplier [Job Worker] & Recipient [ Principal]
Here we are talking about service ie job work service
It is a Supply. : A
C Consideration of service : Rs. 15000/-
Taxable person in this case will be Mr. Job Worker.
GST Computation. : Rs.15000 * 18% = 2700/-
25. MONEY: Money” means:
 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
 when used as a consideration to settle an obligation or exchange with Indian legal

tender of another denomination
 but shall not include any currency that is held for its numismatic value.
As we know that definition of goods/service excludes moneyie. Money is neither Goods

nor service. Hence no GST on Money.
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.
So we need to know: What is money…
INR /$/Cheque/DD/Bill of Exchange Money = YES all are money
Old outdated currency = NOT A money (eg. 500/1000 Note)
Shares/Gold etc. = NOT a money.
Money: Market price & face Price equal.
22
26. Non-Taxable Supply” Means:
 A supply of goods or services or both
 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.
Question: Taxable Supply of Non-Taxable Supply Whether

Goods/service of Goods/services included in
Aggregate
Turnover
Meaning * Goods/SERVICE * Goods/SERVICE
+ +
* Supply * Supply
+ +
* Leviable to GST * NOT Leviable to

GST
i. Sale of Money/ No – as it is NOT NO – as it is NOT No

Security goods/Service goods/Service
ii. Sale of Alcoholic No - As it is goods Yes – It is Goods & Yes

Liquor for Human & also fall order the also fall under the
Consumption/five Definition of Supply – Definition of supply.
Petroleum Product. But is Excluded from BUT it is excluded
charging section – from charging section
therefore Not liable hence NOT liable to
to GST GST-Therefore it is
called – Non-Taxable
Supply”.
23
iii. Transfer of Goods No, as it is goods But NO - as it is goods No

to Job Worker it does not Amount But it does not
to supply. Hence Amount to supply.
CAN NOT be called Hence CAN NOT be
as “Taxable Supply.” called as “Non
Taxable Supply.”
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
Taxable Territory Non Taxable Territory

The territory to which Rest of the Area.
Provisions of particular GST Law
are Applicable.
Act TT NTT
For IGST Act : Whole of India. Any place except India.
For DL – GST Act DL Any place except DL
For UP GST UP Any place except UP (Say HR,

USA)
For CGST All India Any location Except India.
For UT GST UT Any place except UT
24
STATES AND UT
30. “State” includes Delhi and Puducherry.
31. “Union territory” means the territory of-
(a) the Andaman and Nicobar Islands;
(b) Lakshadweep;
(c) Dadra and Nagar Haveli; and Daman and Diu;
(d) Ladakh; Daman and Diu
(e) Chandigarh; and
(f) Other territory
32. OTHER TERRITORY- Includes territories other than
 Delhi and Puducherry
 the Andaman and Nicobar Islands;
 Lakshadweep;
 Dadra and Nagar Haveli; and Daman and Diu;
 Ladakh; Daman and Diu
 Chandigarh
33. PERSON: - Person” includes–
(a) An individual;
(b) A Hindu Undivided Family;
(c) A company;
(d) A firm;
(e) A Limited Liability Partnership;
25
(f) An association of persons or a body of individuals, (whether incorporated or not, in

India or outside India)
(g) Any corporation established by or under any Central Act, State Act or Provincial
Act or a Government company.
(h) Any-body-corporate incorporated by or under the laws of a country outside India;
(i) A co-operative society registered under any law relating to co-operative societies;
(j) A local authority;
(k) Central Government or a State Government;
(l) Society
(m) Trust; and
(n) Every artificial juridical person, not falling within any of the above.
Includes: Company, Firm, LLP, AOP (Incorporated/Unincorporated), Govt. Company,

Foreign Company, Co-operative Society, CG, SG, Local Authority, Society,
TRUST etc.
Note: Every Person is understood to have a separate Identity.
eg. A TRUST SETUP By a Company – Now Company AND TRUST – have

separate Identity/Both are separate persons.
34. PRINCIPAL PLACE OF SUPPLY:
The place as specified in ‘Registration Certificate’ as principal place (Generally Head

Office/Corporate office) registered Address under Company Act/Address specified in
partnership deed/Billing Address.
35. PRINCIPAL SUPPLY: means:
 The supply of goods or services which constitutes the predominant element of a

composite supply and
 to which any other supply forming part of that composite supply is ancillary.
26
What is Principle Supply: - A supply which constitutes predominant element of a

composite supply.
For Example: * Laptop + Carry case = LAPTOP
* Split AC + INSTALLATION = AC
* Goods + Transportation = Goods
* etc.
36. QUARTER: Quarter shall mean:
 A period comprising 3 consecutive calendar months,
 ending on the last day of March, June, September and December of a calendar
year.
Means: 3 Consecutive Calendar months
JAN to March, April to June, July to Sept., Oct. to Dec
For Example: Any Activity Start ie. March & Complete in April = How Many Quarter = 2
37. REGISTERED PERSON: Registered person” means:
 A person who is registered under GST
 but does not include a person having a Unique Identity Number.
*Who is Registered U/S 25 (i.e. AT the movement Registration is granted to the

person)
*Excluding: person having UIN (Awarded to UN, International organization, embassy

etc.)
Why to get UIN? - For certain purposes eg. Refund of TAXES on the Notified supply
of Goods/Services received by them.
27
38. REMOVAL: in relation to goods, means-
 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;
39. RETURN: Means any return prescribed or otherwise required to be furnished by or

under this Act or the rules made thereunder.
40. REVERSE CHARGE MECHANISM: “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
41. TAX PERIOD: The period of which RETURN [Monthly/Quarterly] is required to be

furnished.
42. TURNOVER IN A STATE: Turnover in State” or “Turnover in Union Territory”

means:
 the aggregate value of all outward taxable supplies
 (excluding the value of inward supplies on which tax is payable by a person on RCM
OR NCM BASIS)and
 exempt supplies made within a State or Union territory by a taxable person,
 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.
Note: T/O in a State – Required in the concept of Composition Scheme.
28
43. VALID RETURN: Valid Return” means a return furnished under section 39 (1)on
which self-assessed tax has been paid in full.
44. WORKS CONTRACT means:
 A contract for
o Building,
o construction,
o fabrication,
o completion,
o erection,
o installation,
o fitting out,
o improvement,
o modification,
o repair, maintenance, renovation, alteration or commissioning
 ofany immovable property wherein transfer of property in goods (whether as

goods or in some other form) is involved in the execution of such contract.
* [Goods + Service] @ Single PRICE [Which will be classified as SERVICE]
BUT LIMITED TO IMMOVABLE PROPERTY
What about (Goods + Service) @ Single PRICE & Resultant Property is an movable
property – then Depend: eg. Service/Goods Can not be called as works contract.
29
Chapter 3 – Chargeability and Goods & Services CA. Raj Kumar
3
Charegability and
Goods & Services
Section: 1 : Short Title, Extent & Commencement.
: SHORT Title : CGST Act, 2017
: Extent: it extends to whole of India.
: Commencement: it came into force as 01.07.2017
Section: 9 Charging Section
General Provision Section 9 CGST shall be levied & collected-

(1 and 2 )
: On all goods goods/service [Except 5 petroleum

products on which GST will be levied from Notified
date) and on Alcoholic liquor for human consumption)
: Where supply is made of above goods/services.
30
CA. Raj Kumar Chapter 3 – Chargeability and Goods & Services
: The supply is an intra state supply.
: The Supply is made by a Taxable person.
: CGST shall be calculated on taxable supplies ie other

than Exempted supplies as per the manner prescribed
under Section : 15.
: GST will be collected from supplier as per prescribed

manner.
RCM :: Section 9(3) : On notified goods/services CGST is to be collected

under Reverse charge from Recipient. For example:
Goods Transport Agency, Legal Services.
RCM :: Section 9(4) : Where supplier is unregistered and Recipient is

Registered then CGST shall be collected from
Recipient under RCM. (But it is Applicable in Real
Estate Sector only)
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.
Notified Services and their provisions are as follows:
1. Hotel Accommodation Service: E-Commerce Operator will be the deemed

supplier and liable to pay GST.
However if the real supplier (Hotel) is crossing the limit of 10 Lakh or 20 Lakh
then Hotel Liable to Pay GST.
31
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.
3. Passenger Transportation Service: E-commerce operator (e.g. Uber/OLA) will be

deemed supplier of service and Always liable to pay GST.
GOODS and SERVICES
Definition of Goods/Service is very important as GST is levied on goods and/or service:-
Goods: : Every kind of moveable property will be called as

goods.
: Moreover things attached to earth or any immovable

structure will also be treated as goods e.g. Signage,
Growing Crops, trees etc.
: Lastly, Actionable claims i.e. contingent Assets like

lottery/Betting/Gambling, unsecured debtors will also
be treated as goods.
Service: : Anything other than goods will be treated as Service.
: Service can be of two types – one is Active (do

something) and another is passive i.e. (Not to do
something e.g. Non-Competence contract, any kind of
deal cancellation etc.)
Neither Goods Nor : Money & securities will neither be treated as goods
Services: Nor service.
: However Activities Related to money or securities For

– A consideration will be treated as service e.g. Forex
charges, Demand Draft Commission, Brokerage etc.
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:
Part – A : Meaning of supply [Read with Schedule: I]
Part – B : After being supply – It will be supply of goods or supply of service

such distinguishment will be discussed as per schedule – II
Part – C : Some of the Activities/transaction will never be treated as

Supply and consequently not liable to GST as per schedule – III.
Section 8: It describes treatment of composite and Mix supply treatment.
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECTION 7 (1): PART – A
 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.
33
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.
As per Circular No.:57/31/18
 Where principal Invoices to Agent and Agent Invoices to customer: then such
Agent will fall under Schedule-I and
 Where principal Invoices directly to customer and the transaction mediated by

an Agent: then such agent will not be covered under Schedule-I.
(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.
34
NOW Need to discuss – whether
the given supply is a “Supply of Goods” or
Supply of Service: SCHEDULE II
1. Goods Related:
Where upon a transaction “Ownership of Goods” is transferred [e.g. Sale] or

ownership will be transferred at future date [e.g. Hire Purchase Transaction] then
it will be called as supply of goods.
2. Land & Building:
Renting/Leasing etc. of Land & Building ie immovable property will be called as

supply of service. However sale of Land & constructed Building will not be treated
as supply.
Moreover sale of under construction property will be treated as supply of service.
3. Job Work:
Any Treatment or process done by Job worker by using Goods &service will be
called on service ie job work service.
4. Transfer of Business Assets:
(i) Permanent Transfer of Business Assets for a consideration or free of cost, it

shall be treated as supply of goods.
(ii) Temporary transfer of Business Assets for non-business purpose with

consideration or without consideration then it will be called as supply of
service.
(iii) Sale or Succession of Running Business is a supply of service however it is

exempted from GST.
(iv) On closure of Business then the Business assets shall be deemed to be

supplied as goods to himself.
35
5. Following shall be treated as supply of service –
* Temporary transfer of Intellectual property right.
* Customised software.
* Negative activities/any kind of Deal cancellation.
* Leasing of assets.
6. Composite supply as works contract shall be called as service ie works contract

service.
7. Supply of food/drink (Soft Drink) for human consumption shall be treated as

supply of service.
8. Supply of Goods of any un-incorporated association of person [AOP] or Body of

Individuals [BOI] to its members shall be treated on supply of goods.
NO SUPPLY SECTION: 7(2)
(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.
(b) Activities/transaction as specified in Schedule – III which are as follows..[NEW

MAGIC]
(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.
36
(iv) Mortuary services including transportation of deceased person shall not be

called as supply.
(v) Actionable claim other than getting/gambling/Lotteries shall not be treated

as supply.
(vi) Government People:
* Functions performed by MP/MLA/MLC member of municipalities, shall

not be called as supply.
* Duties performed the person having constitutional post (e.g. Prime

Minister, Chief Minister etc.) shall not be treated as supply.
* Duties performed by Part time director of a Government body (e.g.

Human Right Commission) shall not be called as supply.
(vii) Sale of Land, Constructed property will not be treated as 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
SECTION : 8: CLASSIFICATION OF COMPOSITE & MIXED SUPPLIES
(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.
As per section 2 : COMPOSITE SUPPLY: “Composite Supply” means:
 a supply made by a taxable person to a recipient consisting of two or more

TAXABLE supplies of goods or services or both, or any combination thereof,
 which are naturally bundled
 and supplied in conjunction with each other in the ordinary course of business,
one of which is a principal supply.
37
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.
As per section 2: MIXED SUPPLY:
“Mixed Supply” means:
 Two or more individual supplies of goods or services, or any combination thereof,

made in conjunction with each other
 by a taxable person for a single price
where such supply does not constitute a composite supply.
Example: A supply of a package consisting of canned foods, sweets, chocolates, cakes,

dry fruits, aerated drink and fruit juices when supplied for a single price is a mixed
supply. Each of these items can be supplied separately and is not dependent on any
other. It shall not be a mixed supply if these items are supplied separately.
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
Various clarifications
Question 1: Whether supply of books, pamphlets, brochures, envelopes, annual reports,

leaflets, cartons, boxes etc., printed with design, logo, name, address or other contents
supplied by the recipient of such supplies, would constitute supply of or supply of services
?
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]
Question 2: The issue relating to levy of IGST exemption on inter-state movement of

various modes of conveyance, carrying goods or passengers or for repairs and
maintenance, between distinct persons carrying goods or passengers or both; or for
repairs and maintenance, [except in cases where such movement is for further supply of
the same conveyance] has been examined.
Answer: Removal of motor vehicle is as a stock transfer then it shall be treated as a

supply of goods. Where removal/movement of motor vehicle is just because of any other
reason eg. as a conveyance etc then it shall never be called as supply. [Circular No.
1/1/2017]
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.
39
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-]
Question 4: Whether retreading of tyres is a supply of goods or services?
Answer: In retreading of tyres, which is a composite supply, the pre-dominant element is

the process of retreading which is a supply of service.
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 ]
40
Question 5: Is GST leviable on the fee/amount charged in the following situations/cases:
(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.
Consumer Disputes Redressal Commissions (National/State/District) may not be tribunals

literally as they may not have been set up directly under Article 323B of the
Constitution.
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
 “Who is Registered (i.e. who has taken voluntarily Registration) or
 Required to be registered as per Law.
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.
SECTION 23: NO REGISTRATION
Following persons are not required to get Registration i.e. such person will be called as
Non-Taxable persons.
(1) AN agriculturist (Individual/HUF)
(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).
42
CA. Raj Kumar Chapter 5 – Taxable Person
SECTION 24: MANDATORY REGISTRATION
The following person requires mandatory registration u/s: 24 i.e. Registration Required
without
Applying any threshold limit of Rs. 10 Lakhs/20 Lakhs/40 Lakhs.
(1) Person engaged in Inter- state Taxable supplies of goods.
[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.]
(2) Casual Taxable Person making Taxable supplies
[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]
(5) Non Resident Taxable person making taxable supplies.
(6) The supplies of goods who supplied goods through E-Commerce operator.
(7) Agent making taxable supplies on behalf of other taxable person.
(8) Other notified persons.
SECTION: 22
Where the person having aggregate turnover only upto threshold limit or below the limit
then the
Person not required to get registration.
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”.
43
Chapter 5 – Taxable Person CA. Raj Kumar
WHAT IS AGGREGATE TURNOVER: “Aggregate Turnover” means:
 the aggregate value of all taxable supplies
 (excluding the value of inward supplies on which tax is payable by a person on

reverse charge basis),
 exempt supplies,
 inter-State supplies of persons having the same Permanent Account Number,
 to be computed on all India basis
 but excludes central tax, State tax, Union territory tax, integrated tax and cess.
WHAT IS APPLICABLE LIMIT:
(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.
[4 specified States = MANIPUR, MIZORAM, NAGALAND, TRIPURA]
(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.
[6 specified States = Arunachal Pradesh, Uttarakhand, Meghalaya, Sikkim,

Telangana, Puducherry].
(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.
* However limit of Rs. 40 lakh will not be applicable—
 Where the supplier is making supplies of TIP (Tobacco, Ice-Cream,

Pan masala) then the limit will be Rs. 20 Lakh.
44
CA. Raj Kumar Chapter 5 – Taxable Person
 Where the Person exclusively engaged in Supplies of Service then

the applicable limit will be Rs. 20 Lakhs.
 Where the person engaged in Supplies Goods as well as services

then the applicable limit will be Rs. 20 Lakhs.
 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.
Some Other Notes:
(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.
(B) Where a going concern transferred or succeeded then such transferee or

successor shall be liable to be registered with effect from the date of such
transfer/Succession.
(C) Where there is transfer of business due to amalgamation or demerger of 2 or

more persons then the transferee shall be liable to be registered with effect from
the date of Incorporation of New Entity.
45
Chapter 6 – Exemption CA. Raj Kumar
6
Exemption
Section 11: Power to grant exemption from tax
BASIS Exemptions Notification Special Order
Type
Conditional Unconditional Conditional Unconditional

Wholly Exempt Wholly Exempt
Wholly Exempt Wholly Exempt
Partly Exempt Partly Exempt Partly Exempt Partly Exempt
Examples - Supply of Salt/Water: Floods and landslides etc has

caused extensive damage to
- Health Care SERVICES:
public and private property
- Supply of Agriculture implements:
- Rate of IGST will be 1% on

Aluminums INGOTS.
- Solar cells If use in specified

final product:
Effective Specific Date or Specific Date or
Date Date of Issue Date of Issue
46
CA. Raj Kumar Chapter 6 – Exemption
Clarifica- Example:
tion
1-1-18 Confusion Clarification Conclusion
Govt Issued What about Govt. Issue Effective

a Notification “Pipe fittings” second Notification Date of Second
on 1-1-18 - whether exempt issued on 1-7-18 Notification will
Stating that or NOT? the word PIPE shall be:
“Pipes” are include “Pipe Fittings” Also.
Exempted from
GST.
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
Summary
CHARITY & RELIGION
TRUST  Kailash Maansarovar

 Haj Yatra
Jaagran party (Bhajan)

Renting & Accommodation (Bhojan)
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”
48
SPORTS
SPONSOR
FIFA
Player, Umpire, Referee, Coach.
GOVERNMENT
By Default Period Based Person Based
3/3A/4/5 Article 243 G/W 30 Year : Longterm Lease Farmer

6 P.V.T Contractor (ERCC)
7 Gareeb Business Entity 20 Year : Spectrum /Coal Non Performer
8 Government to Government Importer/Exporter (MOT)
9 UP to Rs 5000/- 10 Year : Railway Common Man (RTI)
9C Government Entity Government Departt.
(Guarantee.)
49
KISAAN
Cultivation Rearing of Animals
(Farm)
Tube Insemination (Birth)
Electricity Exchange
Well
Electricity Slaughter House

Infrastructure (@ Cultivation) (Death)
&
Distribution
Of Electricity
Fruits & Agriculture Produce

Vegetables
Ripening etc. Job Work
NCCCD Membership
Warehouse
Agriculture Produce/Rice/
Fumigator
Sugarcane
Fumigation Minor Forest Produce
50
ENTERTAINMENT
Zoo
Protected Monuments
Hobby Classes (ACP) ENTRY FEE = GST ×
KHEL /TAMASHAA UPTO Rs. 500
FIFA (Men /Women)
DESI PERFORMER (Folk /Classical) Rs 150,000/-

Per Performance.
Immovable Property (Renting and Accommodation)
@ Residence
Rental House PM Awaas Yojana House Own House Hotel

(Construction) (Construction) Accommodation
NOTE : At Residential Projects : SN : 41A / 41B
51
TRANSPORTATION OF GOODS
DOMESTIC INTERNATIONAL
JAL Inland Water Way ×

IMPORT
GTA to Unregistered Person ×

THAL
& Government EXPORT ×
Others × Nepal/Bhutan or
VAYU --- Other
× × ×
TRANSPORTATION OF PASSENGER
JAL
THAL
Section Number 15 /16/17
VAYU
 DL /Passport
 VISA (Embassy)
SOCIO ECONOMIC Welfare
KOTA
City me
NPO & NPO (2)
Run by OLD AGE Persons
52
BANKING
Interest
Charges
JAN – DHAN A/C Charges

RBI
BANK CARD Transaction Processing

charge
BC / BF
Financial Service to over-
seas – client charges (from
SEZ)
INSURANCE
Regulatory Bodies Annuity Pension

General Insurance /BPL/APL
ATAL Pension
ESI Life Insurance BPL/APL & Re-Insurance
S.G. Pension
EPFO Premium Paid by government thereof.
IRDA
SEBI
Army/Police
NPS
Insurance
CMPFO
BUSINESS
Idea of Business from: Business of Hiring of Start as “Start – up @

an Business Exhibition Motor Vehicle Bio - Incubator”
Because of this “Running

Due to Accident: Legal CASE Near by a Toll
Business” (Going Concern Sold)
53
IGST EXEMPTION 09/2017
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)
54
N/N: 12/2017 issued under section 11
CHARITABLE & RELIGIOUS
1. Charitable Trust
Service By way of following charitable activities by a Recognised charitable trust

will be Exempted.
(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.
(b) Activity of advancement of Religion, spiritually or Yoga.
(c) Activity of advancement of Educational programs or skill development for

Abandoned children, person residing in rural AREAS having age over 65
years.
(d) Activities of preservation of Environment Including watershed, forest &

wide life
2. Renting of Religious Place & Conduct of Religious Ceremony:
(a) Service of conduct of Religious ceremony will be exempted.
(b) Service of Renting of Religious place owned or managed by a Trust where

Room Rent limited to Rs. 999 per day, Hall Rent limited to Rs. 9999 per day,
shop rent limited to be 9999 per month will be exempted.
3. Religious Journey:
Service By Kumaon Mandal Vikas Nigam Limited in Respect of “Kailash Mansarover

Yatra (CHINA) and service by HAJ Committee in Respect of Haj Yatra (Saudi
Arab) will be exempted.
55
EDUCATION
1. NEWS:
Service of providing news by an “Independent Journalist”, Press Trust of India

(PTI) or United News of India (UNI) will be exempted. (However if Journalist is
Employee then it will not be a supply.)
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:
Service provided by Education Institute (School/College/Institution) to student,

Facility, staff & New Entrants (entrance Examination fee) will be exempted.
Service provided to school –
(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.
(b) Service Related to or conduct of Entrance/Final Examination will be

exempted for all (i.e. school/college/Institutes).
(c) Service of supply of “Online Educational Periodicals” to colleges will be

Exempted.
4. CORPORATE-CUM-INSTITUTE:
Any service provided by “NSDC” (National Skill Development Corporation), SSC

(Sector Skill Council), AA (Assessment Agency), training partner (e.g. Ambuja
Cement Foundation, Hindustan Soft Education etc.) will be Exempted.
5. Service by way of “Assessments” under “SDI” (Skill development Initiative will be

exempted.
6. Serviced By “Training Provider” under “DDUGKY” (Deen Dayal Upadhyaya Grameen

Kaushalya Yojna” ) will be Exempted.
56
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 Health Care (Diagnostic, Treatment, Care) of Birds/Animal provided by

Veterinary clinic will be Exempted.
2. CORD BLOOD BANK:
Service of preservation of STEM Cells or any Related Service by Cord Blood Bank
will be exempted.
3. HEALTH CARE OF HUMAN BEINGS:
- Health care service (Diagnostic treatment, care including food for patient,
Hair Transplant, Cosmetic & Plastic Surgery for CURE , Ambulance service)
- Provided by (Hospital, Nursing Home, Sanatorium, clinic, pathology Lab

(Indoor & outdoor) Physiotherapist, Dietitians etc.
- Moreover ambulance service given by any other will also be Exempted.
4. REHABILITATION CENTRE:
Service By : Recognised Rehabilitation professionals.
By way of : Rehabilitation Therapy or counseling etc.
AT : Medical Establishment, Educational Institutes, Rehabilitation

Centre established by CG/SG/UT or Registered TRUST.
5. BIO-MEDICAL WASTE:
- Service of “Treatment or disposal” of Biomedical waste or Related process.
- By operator of “biomedical waste”
- to clinical Establishment.
57
6. PUBLIC CONVINIENCE:
Service By way of public convenience such as provision of facilities of bathroom,

washroom, urinal, toilets will be exempted.
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:
- Service by way of sponsorship of sporting events.
- Organised by Recognised body.
- will be Exempted.
4. INDIVIDUAL SERVICE:
- Service of Individuals as a Player, referee, umpire, coach or team manager

for participation in a sporting event.
- Organised By a Recognised Sport Body (eg. BCCI)
- Moreover service By one Recognised Sports Body to another Recognised

Sports Body will Also be Exempted.
58
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.
- Pure Service/Composite Service (having service portion atleast 75%)

provided By any person to CG/SG/LA/Government ENTITY will be
Exempted.
2. GOVERNMENT SERVICE ( Except PVT):
* Service provided by CG/SG/UT/Local Authority.
- to Non-Business Entity will be Exempted.
- to Business Entity will be taxable. (Unless otherwise specified

elsewhere)
* Moreover following will be taxable as follows:
(a) - Service By Department of Post,
- By way of speed posts, Express Parcel Post, Life Insurance service,

Agency Service.
- to Non-Government will be taxable (to maintain parity with private

players)
(b) Service By government in Relation to Aircraft/Vessel (in or outside

the port or Airport) will be Taxable.
(c) Service by Government by way of transportation of Goods/Passenger

will be taxable.
59
3. GARIB BUSINESS ENTITY:
- Service by CG/SG/UT/Local Authority.
- to a Business Entity having Aggregate turnover in PFY only upto threshold

limit.
- will be Exempted.
Note: Sub-Point a/b/c/of Point (2) will Remain Same.
4. GOVERMENT TO GOVERMRNT:
- Service provided by CG/SG/UT/Local Authority.
- to another CG/SG/UT/Local Authority.
- will be exempted.
Note: Sub-Point a/b/c/of Point (2) will Remain Same.
5. SMALL VALUE GOVERNMENT SERVICE:
- Service provided by CG/SG/UT
- Where the value of such service not more than Rs. 5000.
- In case of continuous supply of service (a service having life of more than 3

month & having periodic payment schedule) limit of Rs. 5000 will be
computed on the basis of a Financial year i.e. value in Financial year is upto
Rs. 5000 then the service will be exempted.
6. GOVERNMENT GRANT
- Service By “Govt. Entity”
- to CG/SG/UT/LA
- Where consideration received in Form of Grant.
- then it will be Exempted.
60
7. LONGTERM LEASE
- Service By S.G.I.D.C./U (State Government Industrial Development

Corporation or by other Entity having 20% or more ownership of
Government.
- 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
- By way allotting spectrum to Business Entity,
- Prior to 01.04.2016
- will be exempted.
9. INDIAN RAILWAY:
- Services by Indian Railway Finance Corporation.
- By way of Leasing of Assets (e.g. Wagon, Coaches, Locos etc.)
- to Indian Railways.
- will be exempted.
10. GOVT. TESTING ETC.:
- Service provided by the CG/SG/UT/Local Authority,
- By way of “Registration Under any Law”, Testing, Calibration, Safty check or

Certification Relating to Safety of workers/consumers/public at large
Including Fire License.
- Moreover service by way of Licensing, Registration and Analysis or testing

of Food Samples supplied by FSSAI to food Business Operator.
11. GST PORTAL:
Service provided by GSTN to CG/SG/UT for implementation of GST will be

exempted.
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12. NON-PERFORMANCE :
- On Cancellation (Non-Performance) of Government Contract,
- consideration in the form of fines/liquidated damages payable to

CG/SG/UT/Local Authority
- will be exempted from GST.
13. AGRICULTURE:
- Service by CG/SG/UT/Local Authority by way of “assignment of right” to

use Natural Resources.
- to Individual Farmer.
- For cultivation of Plant/Rearing of animals For Food, fibre, raw material etc.
(Except Horse)
- will be exempted.
14. COAL MINE:
- Service By CG/SG/UT/Local Authority.
- By way of “assignment of Right” to use natural Resources.
- Prior to 01.04.2016.
- will be exempted
15. MOT:
- Service By CG/SG/UT/Local.
- By way of “Deputing” Officers after Office hour or on holidays.
- For Inspection of container stuffing etc. in Relation to Import-Export

Cargo.
- On Payment of Merchant Overtime Fee
- will be exempted.
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16. RTI:
Service By way of RTI will be Exempted from GST.
17. ERCC:
- Services supplied by a State Government to Excess Royalty Collection

Contractor (ERCC)
- by way of assigning the right to collect royalty on behalf of the State

Government on the mineral dispatched by the mining lease holders
- will be exempted.
18. GUARANTEE BY GOVT.
- Service By CG/SG/UT
- to Government Undertaking or PSU’s[Public sector undertaking]
- By way guarantying the Loans.
- taken by Government undertaking or PSU’s
- will be exempted.
AGRICULTURE
1. Electricity:
- Service supplied by “Electricity Distribution Utility (e.g. Electricity

Exchange)
- By way of construction, erection, commissioning or Installation of

Infrastructure.
- for Extending Electricity distribution Network.
- upto the tube-well of the farmer or Agriculturist for Agriculture use
- will be exempted.
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2. RICE:
- Service By way of loading, unloading, packing, storage/warehousing of Rice
- will be Exempted.
3. MIINOR FOREST PRODUCE:
- Service by Way of warehousing of minor Forest Produce will be Exempted.
4. WAREHOUSING:
- Service of ware housing/storage of
- Cereals, pulses, fruits, Nuts and Vegetables, spices copra, sugarcane,

jaggary, Raw Vegetables, Fibre (such as cotton, flex, jute etc.) Indigo,
unmanufactured tobacco, betel NUTS, Tendu Leaves, Coffee & tea.
- will be Exempted.
5. ELECTRICITY
- Transmission to Distribution of Electricity
- by transmission utilities (eg. Power Grid, Electricity Exchange, Electricity

Companies) - will be Exempted.
6. FUMIGATION
- Service by way of fumigation in a warehouse.
- where agriculture produced are stored
- 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-
(a) Agricultural operations directly related to production of any agricultural

produce including cultivation, harvesting, threshing, plant protection or
testing;
64
(b) Supply of farm labour;
(c) Processes carried out at an agricultural farm including tending, pruning,

cutting, harvesting, drying, cleaning, trimming, sun drying, fumigating, curing,
sorting, grading, cooling or bulk packaging and such like operations which do
not alter the essential characteristics of agricultural produce but make it
only marketable for the primary market;
(d) Renting or leasing of agro machinery or vacant land with or without a

structure incidental to its use;
(e) Loading, unloading, packing, storage or warehousing of agricultural produce;
(f) Agricultural extension services;
(g) Services by any Agricultural Produce Marketing Committee or Board or

services provided by a commission agent for sale or purchase of agricultural
produce.
(h) Services by way of fumigation in a warehouse of agricultural produce.
8. JOBWORK
- Carrying out “An Intermediate Production Process”.
- as Job Work
- In Relation to Cultivation of plant & Rearing of animals (Except horse),
And agriculture produce
- will be Exempted
Question. Whether custom milling of paddy by Rice millers is liable to GST or is

exempted under S. No 55 of Notification 12/2017.
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).
65
9. INSEMINATION
- Service of Artificial Insemination.
- of Live Stock (except horse)
- will be Exempted.
10. SLAUGHTERING
Service of Way of Slaughtering of Animals.
11. FRUITS & VEGETABLES
- Services by way of pre-conditioning, precooling, ripening, waxing, retail

packing, labelling of fruits and vegetables
- which do not change or alter the essential characteristics of the said fruits
or vegetables
- will be exempted.
12. NCED
- Service Provided by “National Centre for cold chain development.
- By way of “Cold Chain Knowledge” Distribution
- will be Exempted.
ENTERTAINMENT/ENTRY FEES
1. ZOO & PROTECTED MONUMENTS:
- Admission/Entry fees of a
- Museum, National Park, Wild Life Sanctuary, Tiger Reserve, ZOO and
Protected Monuments
- will be Exempted.
66
2. ART, CULTURE, SPORTS
- Service of training/Coaching in Re-creational Activities Relating to
- Art, Culture
- Sports by Recognised Charitable Trust
- will be Exempted.
3. ENTERTAINMENT
“Services by way of right to admission to-
(a) circus, dance, or theatrical performance including drama or ballet;
(b) award function, concert, pageant, musical performance or any sporting

event other than a recognised sporting event;
(c) Recognised sporting event;
(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)
- Entry Fee (Ticket to FIFA Event (U-17 World Cup 2017)
- Will be Exempted.
5. FOLK/CLERICAL ART
- Service by Folk/Classical Artist
- By Way of Folk/Clerical Performance
- In Relation of “music”/Dance/Theatre
- Where consideration charged is not more than Rs. 1,50,000/-
- will be exempted.
NOTE: Where such artist provides service as Brand Ambassador then it will be
taxable.
67
RENTING, ACCOMODARTION @ IMMOVABLE

PROPERTY
1. CONSTRUCTION (PMAY):
Services provided by way of

 Pure labour contracts of construction, erection, commissioning, installation,
completion, fitting out, repair, maintenance, renovation, or alteration of a civil
structure or any other original works
 pertaining to the beneficiary-led individual house construction or enhancement
 under the Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana.
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.
3. SHORT TERM ACCOMODTION:
- Service By Hotel, Inn, Guest house etc.

- Intended for sort term Residential purpose.
- having value of a UNIT (Room) below or upto Rs. 1000
- will be Exempted.
4. LONG TERM ACCOMODATION:
- Service By way of renting of Residential Dwelling (i.e. Intended for long

term Residential purpose)
- For Residence purpose.
- will be Exempted.
68
Circular No. 44/18/2018: Issue Related to Taxability of ‘Tenancy Rights’

under GST
- Transfer of tenancy rights to a new tenant against consideration in the

form of tenancy premium is taxable.
- However, renting of residential dwelling for use as a residence is exempt.
- Hence, grant of tenancy rights in a residential dwelling for use as

residence dwelling against tenancy premium or periodic rent or both is
exempt.
- As regards services provided by outgoing tenant by way of surrendering

the tenancy rights against consideration in the form of a portion of
tenancy premium is liable to GST.
5. TDR/FSI:
- Service by way of transfer of development rights (herein refer TDR) or

Floor Space Index (FSI)
- for construction of residential apartments by a promoter in a project,

intended for sale to a buyer, wholly or partly,
- 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.
6. Long Term Lease:
- 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,
- for construction of residential apartments by a promoter in a project, intended

for sale to a buyer, wholly or partly,
- 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.
69
TRANSPORTATION OF PASSENEGER
1. Jal, Thal, Vayuu:
Analysis
INLAND WATER-WAYS: eg. BOAT : exempted

JAL
OTHER WATER- WAYS: (exempted if for public transport)
AC (Taxable)
Contract Public Transport: (Exempted)

ROAD Carriage Non-AC
Special Bus (Taxable)
THAL
Tourist Vehicle: (Taxable)
AC
Stage (Taxable)
Carriage
Non-AC (Exempted)
*Radio Taxi: taxable

*School Bus: exempted
First
(Taxable)
Class/AC
RAIL INDIAN RAIL
Others: (Exempted)
OTHERS : METRO, MONO, TRAM (Exempted)
70
NER (North East Region) = Exempted

VAYU
RCS – GAP FUNDING by Government = exempted
GOVT
GAP FUNDING EXEMPTED

AIR INDIA
Fly under ‘RCS’
SPICE JET
INDIGO etc. Fare : Rs. 2500/- Common MAN

Per Hour (MAX)
* No Tax on ATF
* No Navigation Charges RCS= Reginal connectivity scheme
* No Landing charges.
2. Embassy:
- Service By “Foreign Diplomatic Mission” i.e. Embassy.
- will be Exempted (e.g. Visa Fees)
3. DRIVING LICENSE/PASSPORT etc.:
- Service By CG/SG/UT/Local Authority.
- By way of issuance of
- Passport, VISA (On Arrival), Driving License, Birth Certificate, Death

Certificate.
- will be Exempted.
71
4. TRANSPORTATION OF GOODS
INLAND WATER- (Exempted)

WAYS
JAL
OTHERS (Taxable )
G.T.A. &
Courier
(Taxable)
BY ROAD
OTHERS
THAL
(Exempted)
BY RAIL (Taxable)
VAYU Service of Transportation of goods by aircraft or vessel in relation to

export of Goods exempted from GST, Moreover service of transportation of
goods by air from outside India to India is also exempted upto 30th
September 2021.
Newly inserted: Satellite launch services supplied by Indian Space

Research Organisation, Antrix Corporation Limited or New Space India Limited.
SOCIAL WELFARE
1. Old Age home:
- Service By CG/SG/Recognised TRUST.
- By Running Old Age home.
- to its Residents (60 years or more)
- Where consideration is upto Rs. 25000 (Including All) per month per
member.
- will be Exempted.
72
2. Fair Price Shop:
- Service By Fair Price shops (Rashan Ki Sarkari Dukan)
- to CG/SG/UT
- By way of Sale of food grains, Kerosene etc. to public
- and Received commission from Government
- then such commission will be exempted.
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 –
(a) As a trade union;
(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. owned 2 Flats = then it will be treated as 2 members.
- Mr. A & Mrs. A jointly owned a Flat then it will be called as 1 Flat.
73
4. NPO: (2)
Services provided by an unincorporated body or a non-profit entity registered

under any law for the time being in force, engaged in,-
(i) Activities relating to the welfare of industrial or agricultural labour or

farmers; or
(ii) Promotion of trade, commerce, industry, agriculture, art, science, literature,

culture, sports, education, social welfare, charitable activities and
protection of environment,
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
1. RBI: Services by RBI will be Exempted.
2. Interest/forex:
(a) Interest on “Loan/Advance/Deposits” will be Exempted. Moreover Discount

on Bill Discounting will be Exempted.
Note: Interest involve in credit card service will be Taxable.
(b) Commission on – Sale – purchase of foreign currency amongst Bank &

Authorised dealers & Vice-Versa will be exempted.
3. JAN DHAN YOJANA
- Service by Banking company to Account holder of “Basic Saving Bank Deposit”

Under “PM Jan Dhan Yojana”
- Will be exempted.
4. CARD PROCESSING
- Service By way of “Card Transaction Processing” By Bank.
74
- Where transaction Amount is upto Rs. 2000.
- Then “Bank Charge with Respect to such transaction will be Exempted.
[CARD = Credit Card, Debit Card & Other Cards]
Example:
Transaction Value Transaction Charges GST on Transaction

@ 2% charges
Rs. 500 Rs. 10 Exempted
Rs. 1500 Rs. 30 Exempted
Rs. 2500 Rs. 50 Taxable
Rs. 10,000 Rs. 200 Taxable
5. Agency Service:
Services by the following persons in Respective Capacities –
(a) Business facilitator or a business correspondent to a banking company with

respect to accounts in its rural area branch;
(b) Any person as an intermediary to a business facilitator or a business

correspondent with respect to services mentioned in entry (a); or
(c) Business facilitator or a business correspondent to an insurance company in

a rural area.
6. IFS
Services by an intermediary of financial services:
75
 Located in a multi services SEZ with International Financial Services Centre

(IFSC) status
 to a customer located outside India for international financial services
 in currencies other than Indian rupees (INR).
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:
(a) Services of life insurance business provided or agreed to be provided:
 by the Army, Naval and Air Force Group Insurance Funds
 to members of the Army, Navy and Air Force, respectively,
 under the Group Insurance Schemes of the Central Government.
(b) Services of life insurance provided or agreed to be provided:
 by the Naval Group Insurance Fund
 to the personnel of Coast Guard
 under the Group Insurance Schemes of the Central Government.
(c) Services of life insurance provided or agreed to be provided by the Central

Armed Police Forces (under Ministry of Home Affairs) Group Insurance
Funds to their members under the Group Insurance Schemes of the
concerned Central Armed Police Force.
76
3. Government Bodies:
Service provided By following Government bodies will be Exempted.
ESIC * Employee State Insurance Corporation.
EPFO * Employee Provident Fund Organisation.
CM-PFO * Coal Mines Provident Fund Organisation.
NPS * National Pension Scheme
IRDA * Insurance Regulatory & Development Authority of INDIA.
SEBI * Security and Exchange Board of INDIA.
4. General Insurance:
- General Insurance Service under specified Insurance scheme which is

available only to people covered under “Below poverty line” (BPL) or
Marginally upto BPL Category
- will be Exempted.
Specified Scheme:
- HUT Insurance Scheme
- Jan Arogya Bima Policy
- P.M. Suraksha Bima Yojana
- Nirmaya Health Insurance Scheme Scheme
- Bangla SHASYA Bima Yojana
- etc.
5. Life Insurance:
- Life Insurance Service under specified Insurance Scheme which is available

to person fall under BPL Category or marginally upto BPL Category etc.
- Will be Exempted.
77
Specified Insurance Scheme:
* Jan Shree Bima Yojana
* Aam Aadmi Bima Yojana
* Life Micro Insurance product” (where Maximum cover is upto Rs. 200000)
* Varishtha Pension Bima Yojana
* PM Jan Dhan Yojana
* PM Vaya Vandan Yojana
6. Premium paid by Government:
- Service By way of Insurance
- Where total premium is paid by CG/SG/UT
- will be Exempted (e.g. Insurance of Government Employees).
7. Re-Insurance:
- Service By way of Re-Insurance of Insurance Service specified under Point

Number 4, 5, 6.
- will also be Exempted.
8. Atal Pension:
- Service under “ATAL Pension Yojana”
- Will be Exempted.
9. State Pension Scheme:
- Service under “State Pension Yojana”
- will be Exempted.
78
BUSINESS RELATED
1. Transfer of Going Concern:
- Service way of transfer of going concern
- will be Exempted.
2. Hiring of Motor Vehicle:
(a) - Service of Hiring of Motor Vehicle having capacity of 12 plus passenger
- to State Transport Undertaking.
- will be Exempted.
(aa) - Service of hiring of “E-Vehicle having capacity of 12 plus passenger
- to Local Authority.
- will be Exempted.
(b) - Service of hiring of “Goods Transport Vehicle”
- to State Transport Agency.
- will be Exempted.
(c) - Service of Hiring of Motor Vehicle (For Transport of Student, Faculty,

Staff)
- to a person who is providing service
- to an Educational Institute (as specified earlier) i.e. school, college,

Institution
3. Toll:
- Service By way of “Access to a Road or a Bridge.
- On Payment of Toll Charges/Annuity.
- will be Exempted.
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4. Incubator:
- Service By Incubator (R&D Centres e.g. Amity Noida, ITI kharagpur, NDRI
Karnal)
- to Incubatee (i.e. Start ups)
- By way of providing space/capital/coaching/Networking etc.
- will be Exempted upto 3 years subject to condition.
Conditions:
(i) Turnover in P.F.Y : Limited to Rs. 50 lakhs.
(ii) Maximum Exemption in Current Financial: upto Rs. 50 lakhs.
Year 1 Year 2 Year 3 Year 4 Year
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:
- Service By an Incubator will be exempted.
6. Legal Service:
- Service provided by Arbitral Tribunal/Advocates [Individual (Junior/Senior)

partnership Firm of Advocate]
80
- to a Non-Business Entity Including Government Department or
- to a Business Entity having turnover in PFY limited to Rs. 10 lakh/20 lakh/40

Lakh
- will be Exempted.
Moreover:
- Legal Service By Advocate (Individual (Junior/Senior) Partnership firm of

Advocate)
- to AN Advocate or Partnership firm of Advocate
- will also be Exempted.
Legal Service Means:
- any Service provided in Relation to
- Advice/Consultancy/Assistance
- and Includes Representation service.
7. Business Exhibition:
- Service By an organiser (e.g. footwear association of INDIA).
- to any person (e.g. Footwear Manufacturer
- IN Respect of a Business Exibition held outside INDIA.
81
Additional Exemption Under IGST Act, 2017: N/N : 9/2017 (IGST)
1. Import of Service:
- Where Location of supplier is outside India.
- and location of Recepient is in INDIA and Recipient is –
* Government (CG/SG/UT/LA/Governmental Authority)
* Individual (Using Service for Personal use)
* Recognised Charitable Trust.
* RBI (service Related to forex services)
* Embassy (Use for official/personal purpose)
* United Nations/International organisation (For Official use)
* Special Economic Zone (Developer/Unit)
- Then such import of services will be Exempted.
2. - Where supplier is located outside India & Recepient is also located outside
India.
- then GST will be Exempted.
- However Where”
- Services is of “Transportation of Goods” from outside INDIA to

INDIA.
- Supplier (Shipping company) located outside India.
- Recepient (the person who ‘paid freight) located outside INDIA
- Then this service will be taxable.
3. Where supplier of service Located in India & Recipient Belongs to outside

INDIA.
(a) - Service provided by Indian Tour Operator
- to a foreign Tourist
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- In Relation to a Tour
- Conducted wholly outside INDIA.
- will be exempted.
(b) - Service supplied by Branch Office/Head Office
- to any head office/Branch office of that person Located outside

India.
- will be Exempted.
(c) - Service provided By an Indian “Intermediary
- and Location of supplier & Recepient of Goods is outside India.
- will be Exempted.
Note:
Following Documents need to be maintained –
- 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.
2. Above Transaction value shall be adjusted with following –
(a) ALL OTHER TAXES: ANY Tax/Duty/CESS will be Included in Transaction

Value Except GST & Compensation CESS will be includible.
(b) SUPPLIER’S LIABILITY: ANY amount which is a liability of supplier but paid
by Recepient (e.g. Goods Testing Charges) will be includible.
(c) INCIDENTAL EXPENSES: Any Incidental Expenses e.g. packing,

commission, Loading, Unloading etc. will be Includible.
(d) INTEREST/LATE FEE: Any Interest/Late Fee/Penalty for Delayed

Payment or Deferred payment will be Includible.
Note: Interest on Loan/Advance/Deposit is Exempted So No Question of

Inclusion.
84
CA. Raj Kumar Chapter 7 – Valuation
Circular No. 102/21/2019: Clarification regarding

applicability of GST on additional/penal interest
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.
85
(e) SUBSIDY
- Where subsidy is given by the Govt.
- to the supplier and
- linked to unit price of the supply.
- 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:
Manner of offering Discount:
Discount can be offered in 2 ways.
- One is “Reduction in Price”
- another is Increasing in Quantity.
Time of Discount:
Discount can Actually be passed at 2 times.
- One is Pre-supply or at the time of supply.
- another is Post Supply.
Type of Discount:
There are Various types of Discount which are as follows:-
- Cash Discount.
- Quantity Discount
- Bulk discount.
- Corporate Discount
- Holi/Diwali/Discount
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- Buy one get one free
- Target Based Discount (Value or Quantity)
- Secondary Discount
- etc.
Discount can be offered by as pre-supply or Post supply Discount.
Pre Supply Discount Post Supply Discount
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”.
 When credit note issued By supplier at later date

Recipient must corresponding ITC on the Basis of such
Credit Note.
Note: If both the conditions are not satisfied than supplier

can not reduce the Related tax Liability even on the Basis of
Credit Note.
Note (1) If Transaction value is not available/Reliable – then go for valuation Rules.
Note: (2): Assessable value = Tariff value:
 Government has power to fix value of Goods/Service for GST/Cess calculation

purpose
 Where such value is fixed with Respect to some goods/service than valuation of
such goods/service will be Based on such value.
87
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.
In each of these examples, it may be noticed that there is no reference or mention of

any business activity of the donor which otherwise would have got advertised. Thus
where all the three conditions are satisfied namely the gift or donation is made to a
charitable organization, the payment has the character of gift or donation and the
purpose is philanthropic (i.e. it leads to no commercial gain) and not advertisement, GST
is not leviable.
88
TEST YOUR SELF

Question 1
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.
89
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?
90
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.
List price of the goods exclusive of taxes and discounts 50000
Tax levied by the municipal authority on the sale of such goods 5000
Packing charges not included in price above 1000
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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Answer
Computation of value of taxable supply
Particulars `
List price of the goods (exclusive of taxes and discounts) 50,000
Tax levied by Municipal Authority on the sale of such goods 5,000

[Includible in the value as per section 15(2)(a)]
Packing charges [Includible in the value as per section 15(2)(c)] 1,000
Subsidy received from a non-Government body [Since subsidy is 2,000

received from a non-Government body, the same is included in
the value in terms of section 15(2)(e)]
Total 58,000
Less: Discount @ 2% on ` 50,000 [Since discount is known at 1,000

the time of supply and recorded in invoice, it is deductible from
the value in terms of section 15(3)(a)]
Value of taxable supply 57,000
Question 9
Samriddhi Advertisers conceptualized and designed the advertising campaign for a

new product launched by New Moon Pvt Ltd. for a consideration of `5,00,000.
Samriddhi Advertisers owed `20,000 to one of its vendors in relation to the
advertising service provided by it to New Moon Pvt Ltd. Such liability of Samriddhi
Advertisers was discharged by New Moon Pvt Ltd. New Moon Pvt Ltd. delayed the
payment of consideration and thus, paid `15,000 as interest. Assume the rate of
GST to be18%.
Determine the value of taxable supply made by Samriddhi Advertisers.
92
Answer
Computation of value of taxable supply
Particulars `
Service charges 5,00,000
Payment made by New Moon Pvt. Ltd to vendor of Samriddhi 20,000

Advertisers [Liability of the supplier being discharged by the
recipient, is includible in the value in terms of section
15(2)(b)]
Interest for delay in payment of consideration [Includible in 12,712

the value in terms of section 15(2)(d) – Refer note below]
(rounded off)
Value of taxable supply 5,32,712
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.
93
Analysis of CONCEPT of Composition scheme

What is composition scheme: It is an alternate method to pay tax. It is an optional
scheme.
6 categories of persons are not eligible for the scheme:
(1) Person making inter-state supply of goods. [eg. one state to another, export of
goods]
(2) Supplier of any service OTHER than
(a) Restaurant services
(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
Note: Interest received on extending deposit loan and advances shall be

ignored completely.
(3) Supplier of non taxable goods.
(4) The person who supply goods through E commerce operator.
(5) Manufacturer of specified goods. [Pan masala, tobacco, ice cream, Aerated Water]
(6) Casual taxable person and NR. (Banjaare)
……………………………………………………………………………………………………………………………………………………………………
94
If a person not fall in above five categories then proceeds …..
PFY CFY
If Aggregate Inward supply Registered Outward Supplies

person
turnover (all (Voluntarily
outward or otherwise)
supplies ie Composite
(if any inward supply taken GST to be paid as per composite
Dealer (NO
taxable, Under RCM then composite ITC shall be
exempted etc): rates of GST to will not be allowed)
does not applicable but
exceeds to It will be paid as per normal rate of tax.)
` 75 Lakh/150
lakh: then the A Manufacturer 1% Of Turnover
person will be with in the
eligible for state (All
composition supply ;
scheme in CFY. taxable,
exempted)
` 75 lakh limit
applicable on 8 B Restaurant 5% Of Turnover
states: service with in the
AP, M-M-M, state (All
NST, UK supply ;
taxable,
` 150 lakh exempted)
limit applicable
on: C Other supplier 1% Of Taxable
JK, HP, Assam of turnover with
and rest of goods/services in the state
the states
&UT (1) Bill of supply: Such dealer shall issue BILL OF supply instead
of invoice and can-not charge GST from the customer and composite
Note: Interest
tax will not be input tax for buyer and accordingly buyer will not be
received on
eligible for ITC.
extending
deposit loan
95
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.
(4) Return: Quarterly return and payments by 18th of next month

and minimum books of accounts and show off as he is a composite
dealer.
(5) Fraudulent intent: If the proper officer has reasons to

believe that a taxable person has paid tax under composition scheme
even though not being eligible, such person shall, in addition to any
tax that may be payable by him under regular scheme, be liable to
a penalty.
(6) Its for outward supplies: Benefit of composition scheme shall

be allowed only in respect of OUTWARD supplies and not on inward
supplies ie if a composite dealer takes inward supplies on which RCM
is applicable that mean composite dealer liable to pay tax to
government on such inward supplies then benefit of composition
sceme will not be available ie composite dealer liable to pay tax as
per normal rate of taxes.
(7) He shall mention the words “composition taxable person, not

eligible to collect tax on supplies” at the top of the bill of supply
issued by him; and
(8) He shall mention the words “composition taxable person” on

every notice or signboard displayed at a prominent place at his
principal place of business and at every additional place or places of
business
96
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)
1. value of intra state supply under NCM 105,00,000
2. intra state exempted supply 13,00,000
3. intra state supply covered under 100% E/N 32,00,000
4. value of inward supplies covered under RCM 2,50,000
5. value of inward supplies covered under NCM 3,00,000
Ans:
1. value of intra state supply under NCM 105,00,000
2. intra state exempted supply 13,00,000
3. intra state supply covered under 100% E/N 32,00,000
4. value of inward supplies covered under RCM -
5. value of inward supplies covered under NCM -
Aggregate turnover 150,00,000
Mr X is eligible for composition scheme as aggregate turnover does not exceed ` 150
lakh
97
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).
Particulars Value in Value in lakhs Value

Lakhs in lakhs
Value of Restaurant services 130 130 130
Interest received from banks 30 30 30
Other services : Renting of commercial 10 15 25

property
Ans:
Particulars Value in Value in lakhs Value in

Lakhs lakhs
Value of Restaurant services 130 130 130
Interest received from banks - - -

property
Eligibility Eligible as Not eligible Not

aggregate as other eligible as
turnover is services other
140 lakh. exceeds the services
max amount exceeds
the max
amount
98
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).

Lakhs lakhs
Value of pen manufactured and sold 130 130 130
Interest received from banks 30 30 30
Sale of pan masala manufactured 10 - -

property value of room ` 900
Ans:
Particulars Value in Value in Value in

Lakhs lakhs lakhs
Value of pen sold (intra) 130 130
Interest received from banks - -
Sale of pan masala (intra) 10 - -
Other services : Renting of commercial 12 15

Eligibility Not eligible as Eligible as Not

he is engaged Aggregate eligible as
in turnover does other
manufacturing not exceeds services
pan masala ` 150 lakh exceeds
10 % limit
99
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).

Lakhs lakhs
Value of pen sold (intra) 130 130 130
Sale of pen inter state (export to USA) 10 - -
Sale of nil rated goods 5 - -
Other services : Renting of commercial - 15 5

Petrol - - 5
Ans:

Lakhs lakhs
Value of pen sold (intra) 130 130 130
Sale of pen inter state (export to USA) 10 - -
Sale of nil rated goods (intra) 5 5 -
Other services : Renting of commercial - 15 5

Petrol - - 5
100
Eligibility Not eligible Not eligible Not

as making as other Eligible
inter state services
supply of exceeds 10%
goods
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.
Particulars Value in lakhs
Sale of chocolates (GST RATE 28%) 10
Sale of nil rated goods 30
Ans:
Particulars Value in lakhs
Sale of chocolates (GST RATE 28%) 10
Sale of nil rated goods 30
Turnover in the state 40
Amount of GST @ 1% 0.4
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
2. Intra state nil rated supply 13,00,000
101
3. Intra state supply covered under 100% E/N 32,00,000
4. Value of inward supplies covered under RCM chargeable to GST @ 2,50,000

18%
5. value of inward supplies covered under NCM chargeable to GST @ 3,00,000

5%
Ans. Computation of GST
Particulars Turnover Tax rate Amount of GST

under
composition
scheme
1. Value of intra state supply under 55,00,000 Composite 55,000

NCM chargeable to GST @ 18% rate 1%
2. Intra state nil rated supply 13,00,000 Composite 13,000

rate 1%
3. Intra state supply covered under 32,00,000 Composite 32,000

100% E/N rate 1%
4. Value of inward supplies covered 2,50,000 Normal rate 45,000

under RCM chargeable to GST @ 18%
18%
5. value of inward supplies covered 3,00,000 - To be paid by

under NCM chargeable to GST @ 5% supplier
102
COMPOSITION SCHEME (SERVICE FOCUSED)
MAIN BODY OF SCHEME:
- An Eligible person whose Aggregate Turnover in PFY was limited to ` 50 Lakh
- Will be Eligible to pay tax under this scheme @ 3% + 3% on first supplies of

Goods/Service made from 1st April of CFY upto ` 50 Lakhs.
Example: Business start on 1-4-19 [Normal Rate = 18%, Composite Rate = 3%+3% =
6%]
FY TURNOVER ELIGIBILITY TAXABLE TAX

OF SCHEME VALUE
19-20 45 Lakh Composition ` 25Lakh ` 1.5Lakh
First ` 20 lakh
(Threshold limit)
Balance ` 25 lakh
20-21 60 Lakh Composition Up to 50 Lakh 3 Lakh
Regular 10 Lakh 1.8 Lakhs
21-22 30 Lakh Regular 30 Lakh 5.4 Lakhs
22-23 40 Lakh Composition 40 Lakh 2.4 Lakhs
NOTE: Interest on Loan/Deposit/Advances should be completely Ignored.
103
Who is Not Eligible for the Scheme:
(i) Whose Aggregate Turnover Exceeds ` 50 Lakhs in PFY.
(ii) Who is engaged in Making
- Non Taxable Supplies
- Inter State Supplies
- 4 Specified Goods Supplied including aerated water
- Supply through E-Commerce Operator
(iii) Who is a casual Taxable Person?
(iv) Who is eligible to pay tax under original composition scheme.
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.
Ans: YES, Subject to fulfillment of Other Conditions.
104
OTHER PARTS OF THE SCHEME
(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.
(ii) BILL OF SUPPLY:
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.
(iv) SHOW OFF:
The supplier shall mention on the Top of bill of supply “as” “Not Eligible to collect
Tax on Supplies”.
(v) CALCULATION OF 3% + 3%:
While Calculated composite tax, exempted supplies will also be taken to Include.
(vi) INWARD SUPPLY UNDER RCM:
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.
(vii) REMAINING PROVISION:
Remaining Provision of Original composition scheme shall be applicable Mutatis/

Mutandis.
105
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.
Exemption from registration to supplier: where a person exclusively engaged in

making supplies of goods or services on which tax is liable to be paid by recipient in
this case such supplier will be exempted from registration.
N/No. 13/2017- Central Tax (Rate): Specified Services

under Reverse Charge@ intra state supplies
S Category of Supply Supplier of Recipient (Must Remark

N of Services service be Located in TT
for RCM purpose
and should be
traceable)
1 GTA Service GTA Factory, Society, RCM= Rate 5% and no

Co-operative ITC to supplier
society, GSTIN
NCM= Rate 12% with
holder, Body –
ITC to supplier
corporate,
Partnership firm
106
CA. Raj Kumar Chapter 8 – Reverse Charge Mechanism

for RCM purpose
and should be
traceable)
(registered or Note: NO RCM if

not), Recepient is Govt.
CTP(Registered) Department, Local
authority;
Governmental
agencies, registered
only as TDS deductor
Exempted:if fall under

sn 21,21A,21B
2 Legal Services by Advocate Business Entity Exempted:if fall under

(Senior/Junior/F sn 45
irm )
3 Services of Arbitral Arbitral Business Entity Exempted:if fall under

Tribunal tribunal. sn 45
4 Sponsorship Any person Body-corporate or Exempted:if fall under

Services partnership firm sn 53
5 -Services of CG,SG,UT,LA Business Entity Note: NCM will always

CG,SG,UT,LA be applicable on
P.V.T. services.
(Other than Renting Exempted:if fall under

of immovable sn 6,7,8 etc.
property)
107

for RCM purpose
and should be
traceable)
5A -Services of CG,SG,UT,LA GSTIN Holder Note: NCM will be

CG,SG,UT,LA (Registered applicable –
Person)
By way of Renting of On Renting of
immovable immovable property@
property@ B to B) B to C
Services of Transfer Exempted:if fall under

of development right sn 41A
5B Any person Promoter
[TDR] /Floor Space
Index[FSI]
Long term lease of Exempted:if fall under

land (30 years or sn 41B
5C more) for Any person Promoter
construction of a
project
6 Services of Director Director Company or a No supply: if WTD,

body corporate Director of Govt
Body.
7 Services of Insurance Agent Insurance -

Insurance Agent Company
8 Services of Recovery Recovery Agent Banking company, -

Agent FI, NBFC
108

for RCM purpose
and should be
traceable)
9 Copyright Services Music composer, Music company, -

relating to original photographer, producer or the
dramatic, musical or artist, or the like, located in the
artistic like taxable territory.
9A Copyright relating to Author Publisher located RCM NOT

original literary in the taxable APPLICABLE IF--the
territory: author has taken
registration under
CGST and filed a
declaration, that he
will pay GST.
10 Services of Members of Reserve Bank of

Overseeing Overseeing India
Committee Committee
constituted by
the Reserve Bank
of India
Services supplied by Individual Direct A banking NCM will be

11 individual Direct Selling Agents company, NBFC applicable if
Selling Agents (DSAs)
Supplier is a body
(DSAs)
corporate, PF, LLP
12. Services of business Business A banking Exempted:if fall under

facilitator (BF) facilitator (BF) company, sn 39
109

for RCM purpose
and should be
traceable)
13. Services of Agent of An agent of Business Exempted:if fall under

business business correspondent, sn 39
correspondent (BC) correspondent
(BC)
14. Security services Any person Registered Note: NCM will be

(services provided by (other than a person, applicable
way of supply of body corporate) Where Supplier is..
security personnel)
-Body corporate
(and /or)
Where recipient is..
-Govt. Department,
Local authority;
Governmental
agencies, registered
only as TDS deductor
-Composite dealer
u/s10
Any person, [other
15 Services provided by Any body RCM not applicable if
way of renting of any than a body
corporate located Supplier is a body
motor vehicle designed corporate]
in the taxable corporate
to carry passengers territory.
 who supplies
[where the cost of fuel
the service to
is included in the
a body
consideration charged
corporate and
from the service
recipient ]provided to
does not issue an
a body corporate.
invoice charging
CGST @ 6% to the
recipient.
110

for RCM purpose
and should be
traceable)
16 Lending of securities Lender Borrower
As per IGST LAW in addition to above following shall also

be covered under: N/ N: 10/2017- Integrated Tax
SN Category of Supply Supplier of Recipient of Remark

of Services service Service
1 Any service by any Any person Any person -

person who is located in a located in the
located in a NTT NTT TT
2 Transportation of A person Importer -

goods by a vessel located in NTT
- as from a place
outside India up -to
the customs station
of clearance in
India.
111
Circular No: 140/10/2020 :Clarification in respect of levy of GST on

Director’s remuneration
Leviability of GST on remuneration paid by companies to the independent directors

or those directors who are not the employee of the said company
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.
112
Specified Supplies under Section 9(4)
SN Supplies Recepient ie
person liable to
pay tax under RCM
(1) Cement supplied by unregistered person to a promoter for Promotor

construction of a project
(2) Capital goods supplied by unregistered person to a Promotor

promoter for construction of a project
(3) Supply of such goods and services or both by unregistered Promotor

person exceeding 20% to a promoter for construction of a
project
113
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:
Section 33 Amount of Tax to be indicated in tax invoice and other

documents:
Section 34 Debit and credit note
Tax INVOICE/Bill of supply/Receipt Voucher:
For supply of goods or services
Section: 31 to 34 of CGST ACT, 2017 AND CGST RULES, 2017
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.
114
CA. Raj Kumar Chapter 9 – Invoice
Who is Tax inovoice:

required to
issue /Bill Tax inovoice is required to be issued by the following poerions:
off supply.
 A Registered supplierpaying tax under regular scheme shall issue
TAX INVOICE.
 A Registered Recepient (RCM): Recipient liable to pay GST under

reverse charge need to issue an invoice.
Bill of supply:
 A Registered supplier making EXEMPTED supplies shall issue a BILL

OF SUPPLY
 A Registered taxable PersonPaying Tax under COMPOSITION

SCHEME shall issue a BILL OF SUPPLY.
Note: Small value invoice/Bill of supply: Where supply is made to an

unregistered person having value below Rs. 200 then the supplier need not
mandatorily to issue Invoice or Bill of supply but need to issue a
consolidated invoice/bill of supply at the end of the day and will keep that
document himself.
Receipt Voucher: A registered Supplier shall, on receipt of advance

payment with respect to any supply, issue a receipt voucher evidencing
receipt of such payment.
NOTE: No need of signature in case of computer generated

documents.
When In case of supply of goods
(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.
115
(b) In case of continuous supply of goods:
Where periodic Then invoice shall be issued on or before

“statements of account” each such statements is issued.
are given by supplier
Where Payment is made Then invoice shall be issued on or before

before statement or no each payment
such periodic
is received.
“statements of account”
are given by supplier
(c) In case of sale on approval basis:Invoce shall be issued on or before

acceptance date or 6 Months from the date of removal (whichever is
Earlier)
In case of supply of Taxable Services:
(a) At the time of provision of service, Before provision of service or

after provision of service [within 30/ (45 days in case of Banking and
Insurance)]
(b) In case of continuous supply of service:
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,
Where the payment is The invoice shall be issued on or before the

linked to the completion date of completion of that event.
of an event,
116
CA. Raj Kumar Chapter 9 – Invoice
(c) Where the supply of services ceasesunder a contract before the

completion of the supply, the invoice shall be issued when the supply
ceases and such invoice shall be issued to the extent of the supply
affected before such cessation.
NOTE:Where recepient liable to pay GST under RCM then An invoice

shall be issued on the date of receipt of Goods /services
How Manner of issuing: Supply of goods:The invoice shall be prepared in

triplicate, Supply of Services: The invoice shall be prepared in duplicate.
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:
 Starting from the effective date of registration
 Till the date of issuance of RC to him. (So that buyer can avail
the credit if he is eligible)
Basis Debit Note/ Credit Note

Supplementary Invoice.
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
117
liability shall be adjusted.
Banking Exemption from Serial Number and ADDRESS:Where the supplier of

Company taxable service is an insurer or a banking company or a FI, NBFC the said
or a supplier shall issue a tax invoice even if not having serial number and
Financial address of recipient.
Institution
including
NBFC/
insurer
Goods BILTY/CONSIGNMENT NOTE: the said supplier of service shall issue a

Transport tax invoice containing the gross weight, name, vehicle registration number
Agency details of goods transported, details of origin and destination, GSTIN of
Service taxable person etc.
Passenger In case of passenger transportation service: TICKET= INVOICE:

Transporta
In case of cinema hall: TICKET= INVOICE [and in case of multiplex
tion
is mandatory to issue electronically even if value is below Rs.200]
Service
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
118
CA. Raj Kumar Chapter 10 – Time of Supply
10
Time of Supply
BACKGROUND Section 12: Time of supply- in case of Goods
Section 13: Time of supply- in case of Services
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:
Meaning of “Date of Payment” for supplier: Date of bookish entry by supplier or

Date of Actual credit in supplier’s bank, whichever is earlier.
Meaning of “Date of Payment” for Recepient: Date of bookish entry by Recepient

or Date of Actual debit in revepient’s bank, whichever is earlier.
119
Chapter 10 – Time of Supply CA. Raj Kumar
Basis IN CASE OF SUPPLY OF SERVICE IN CASE OF SUPPLY OF

GOODS
SECTION : 13
SECTION : 12
General Where invoice is issued within Where invoice is issued with in

Provision: time: time: Invoice date
Invoice date
OR
Payment date (Earlier)
Where invoice is not issued with- Where invoice is not issued

in time: within time:
Completion date Invoice Due Date (Removal /

delivery date)
OR
Payment date (Earlier)
RESCUE Provision:
Bookish Entry Date in Recipient

Books.
Relaxation: IF Amount Received in Relaxation: IF Amount Received

Excess of Bill Amount (MAX upto in Excess of Bill Amount (MAX
Rs.1000): Such “Advance Payment” can upto Rs. 1000) : Such “Advance
be Ignored for the purpose of “Time Payment” can Ignored for the
of supply”at the OPTION of purpose of “Time of supply”at
Supplier. the option of Supplier.
120

GOODS
SECTION : 13
SECTION : 12
Reverse General provision General provision

Charge
Payment date Payment date
OR OR
61th day from the date of invoice 31th day from the date of
(Earlier) invoice
OR
Rescue Bookish Entry Date in the Goods recd. Date

Books of Recipient. (Earliest)
Associated Enterprises+Import of Rescue: Bookish Entry Date in

service +RCM the Books of Recipient.
Payment Date
Or (Earlier)
Bookish Entry Date
Special
Case:
Whether the Yes =ToS = Date of
Voucher Supply is Issue of Voucher
- Same -
Identifiable No
=ToS=Date of
Redemption of
Voucher.
121
Chapter 10 – Time of Supply CA. Raj Kumar

GOODS
SECTION : 13
SECTION : 12
Residuary Return Filing Due Date
Provision or - Same -
Date of payment of TAX
(AS the Case May be)
Special ToS = Date of Receipts of Additional - Same -

Case Value (Interest, penalty etc)
(Additional
Value)
122
CHILLAR CONCEPT: ie concept of Rs. 1,000 (For example

Telecommunication service)
Customer Payment Invoice Excess TOS Remark

/Unde
r
“A”
Jan. 2018 1500 1862 -362 For 1862 TOS@ Invoice Based
Feb. 2018 2224 1862 +362 For 1862 TOS@ Invoice Based
“B”
Jan. 2018 1862 1862 - For 1862 TOS@ Invoice Based
Feb. 2018 1862 1862 - For 1862 TOS@ Invoice Based
“C”
Jan. 2018 2000 1862 +138 For 1862 TOS@ Invoice Based
Feb. 2018 1724 1862 -138 + for 138 TOS@ Payment Based
For 1862
-138 = TOS@ Payment Based

1724
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
123
Chapter 11 – Registration CA. Raj Kumar
11
Registration
Who is required to take Registration?
Registration After crossing the NO Registration Mandatory Registration

Limit of ` 20/10 LAKH: Sec. Section: 23 Sec. 24
22
# 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
124
CA. Raj Kumar Chapter 11 – Registration
Registration limit of ` 40 lakh

The Central Government, hereby specifies as the category of persons
exempt from obtaining registration upto aggregate turnover of ` 40 lakh ie
the person required to get registration only after the limit of ` 40 lakh.
Any person:
 Who is engaged in EXCLUSIVE SUPPLY OF GOODS and
 Whose aggregate turnover in the financial year does not exceed `
40 lakh.
But limit of ` 40 lakh will not be applicable in following cases ie in the
following cases either the person required to get mandatory registration
or limit of ` 10/20 Lakh
(i) If Persons required to take compulsory registration under section 24
of the said Act;
(ii) If persons engaged in making supplies of 3 types of specified goods
(Tobacco, Pan Masala, Icecream)
(iii) If the persons engaged in making intra-State supplies in the States of
Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland,
Puducherry, Sikkim, Telangana, Tripura, Uttarakhand;
(iv) If the persons takes voluntary registration.
When to Generally registration is required to be obtained within 30 days from

take the date on which he becomes liable to registration.
registrati In special cases:
on
Casual Taxable Person and Non Resident:
Application for RC: (5 Days in advance) The person shall apply for
registration at least 5 DAYS PRIOR to commencement of business in and
such person shall make taxable supplies only after issuance of RC.
Period of RC: (90 +90 days) RC issued to such persons shall be valid for a
period of 90 days +90 days OR as specified in application for reg. from
the effective date of registration (whichever is earlier).
Advance deposit of Tax: such person MAY deposit advance estimated tax
liability for the period specified in application at the time of application
for registration on the basis of TRN. However if applied for extension
125
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
Whether the amount It is accordingly clarified that the amount

required to be deposited of advance tax which a casual taxable
as advance tax should be person is required to deposit while
100% of the estimated obtaining registration should be calculated
gross tax liability or the after considering the due eligible ITC
estimated tax liability which might be available to such taxable
payable in cash should be person.
calculated after deducting
the due eligible ITC which
might be available to CTP?
As per section 27 of It is clarified that in case of long running

the Central Goods and exhibitions (for a period more than 180
Services Tax Act, 2017, days), the taxable person cannot be
period of operation by treated as a CTP and thus such person
causal taxable person is would be required to obtain registration as
ninety days with provision a normal taxable person.
for extension of same by While applying for normal registration the
the proper officer for a said person should upload a copy of the
further period not allotment letter granting him permission to
exceeding ninety days. use the premises for the exhibition and
Various represent-tations the allotment letter/consent letter shall
have been received for be treated as the proper document as a
further extension of the proof for his place of business.
said period beyond the
In such cases he would not be required to
period of 180 days, as
pay advance tax for the purpose of
mandated in law.
registration.
He can surrender such registration once
the exhibition is over.
126
Registration after Survey/ Investigation etc.: It is found during any

survey, inspection, search, enquiry or any other proceeding that- Person
required registration but fails to get register himself:
- then such officer may register the said person on a temporary
basis and issue an order
- and it will be effective from the date of order of
Registration.[penalty etc. will also be there]
- And such person shall within 90 Days
[within 30 days of order of Appellate Authority if file appeal against
grant of such temporary registration]
from the date of grant of such registration shall file an application
for registration in prescribed form and such RC will be effective
from the date of ORDER by officer.
Where Place of Registration: Every person who is liable to be registered shall

apply for registration in EVERY SUCH STATE/UT from where he makes a
and
taxable supply.
how
What about TWI: Every person who makes a supply FROM the Territorial
many
Waters of India shall obtain registration in the Coastal State or Union
Registra territory where the NEAREST point of the appropriate baseline is located.
tions are
Number of Registration:
required
One state/UT@ one Registration
- In general if the person making taxable supplies from one state/ UT
then he is required to take registration one registration.
One state/UT @Multiple Registration:
- The person MAY obtain a SEPARATE REGISTRATION for each
Place of Business located within the state/UT.
- A person having a unit(s) in a Special Economic Zone or being a
Special Economic Zone developer shall make a separate application
for registration distinct from his other units located outside the
Special Economic Zone with in the same state.
- Every person being an Input Service Distributor shall make a
separate application for registration as such Input Service
Distributor even with in the same state.
127
Note: No Place of Business shall be granted registration to pay tax under

composition scheme if any of the Place of Business of the same person
paying tax under normal scheme.
Multiple state @ single Registration
In case of unique identity number embassy/ UN etc is required to take
only one registration which is valid for all over India.
How Main document for registration:

 PAN (Generally)
 TAN (In case of TAX DEDUCTOR/COLLECTOR)
 Any other document (In case of NR eg. Self- Attested Copy of
Passport)
 Now Aadhaar mandatory for registration purpose at the time of
registration [But not for non-citizen] otherwise registration will be
granted only after physical verification of place of business in
maximum 60 days. Aadhaar card required for ……
- Individual;
- authorised signatory of all types;
- Managing and Authorised partner; and;
- Karta of a Hindu undivided family.
- Member of Association of Person.
- Etc.
Registration process:
Part A of Application:
(i) Disclose PAN (to whom it is needed), Mob. No., Email id.
(ii) Verification of above : by GST PORTAL, by OTP (for mob no and Email)
(iii) Generation of Transaction reference number [TRN] by portal which
is valid for 15 days.
Part B of Application:
(i) File registration APPLICATION by using reference no.
(ii) Acknowledgement [Application reference number i.e. ARN] by portal
on mob no. and Email id.
128
(iii) Note: Casual taxable person shall be given temporary id

number[TRN] for making advance deposit of tax on estimation basis.
After payment of advance tax ARN shall be generated and
thereafter registration certificate shall be granted.
(iv) The application forwarded to officer and the officer verifies the
application along with documents.
Whether Officer is Satisfied
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.
After this the officer is-
 Satisfied: ok grant registration within 7

working days.
 Not satisfied: Reject the application.
Note:1 Where a person, fails to undergo authentication of Aadhaar

number or does not opt for authentication of Aadhaar number, the notice
may be issued not later than 21 days from the date of submission of the
application.
Note:2 Where a person, fails to undergo authentication of Aadhaar

number or does not opt for authentication of Aadhaar number, the
registration shall be granted only after physical verification of the place
of business in the presence of the said person.
Note:3 If no response by the officer within 3 days from application date
or 7 days from receiving the clarification then the registration shall be
deemed to be granted.
129
(v) A Registration certificate shall be issued in firm GST REG -6

mentioning principal place of business and additional places therein
as declared in application form.
And the RC will be effective:
 From the date on which applicant liable for registration [if
application made within time]
 Otherwise it will be effective from the date of GRANT of
Registration.
Structure of RC: State wise PAN based GSTIN-----
 First two digits: State code
 Next 10 digit : PAN
 Next digit: SN of Registration in same state on same PAN
 Next digit: blank for further use
 Next digit: Checksum digit (department use)
Migrated Person
 Old registered taxable person required to get registration WEF
appointed date (1-07-2017) subject to above.
 Old registered person having PAN shall be granted registration
on provisional basis and RC shall be made available on the
PORTAL.
 After that such person shall submit an application along with
information and documents.
 After that RC in form GST REG -6 shall be made available
electronically on common portal.
 Cancellation: Every person registered under any of the existing
laws, who is not liable to be registered under the Act may,on or
before 31/03/2018,at his option, submit an application
electronically at the common portal for the cancellation of
registration granted to him and the proper officer shall, after
conducting such enquiry as deemed fit, cancel the said
registration.
130
Amend- Changes in Core fields: [Business Name Change, Address change,

ment in change in Directors/Partners etc.]
RC
Every RC/UIN holder shall inform the Proper Officer ANY changes in the
information furnished at the time of application of thereafter.
However officer may approve within 15 working days or reject (after giving
SCN and OPPORTUNITY OF BEING HEARD) such changes.
Changes in None core fields: [Change in Phone Number, E-mail id of
authorised signatory]
Every RC/UIN holder shall inform the Proper Officer ANY changes in the
information furnished at the time of application of thereafter.
Cancellati On Application: cancellation on application [Along with the detail of

on of inputs, work in progress, finished goods, capital goods] By registered
Registrati taxable person OR by legal heirs (in case of death), manner and period as
on may be prescribed, having regard to:
 If not to provide bank details with-in 45 days of registration,
 discontinuation of business,
 transfer of business,
 amalgamation,
 demerger or otherwise dispose of,
 change in constitution of business or
 registered person no longer liable to registered.
 A TDS deductor or TCS Collector – now no longer remain to deduct
or collect.
BY Proper officer himself:
 On contravention of act or rules, [eg. issue bogus invoices etc.]
 Person paying tax under composition scheme has not furnished
return for 3 consecutive tax periods,
 Any Registered person (other than immediate preceding) has not
filed return for a continuous period of 6 months,
131
 person having reg. on voluntarily basis has not commenced business

within 6 months from the date of registration,
 Registration obtained by means of fraud etc.
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.
Note: During pendency of the proceedings relating to cancellation of

registration, the proper officer may suspend the registration for such
period and in such manner as may be prescribed.
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.
On cancellation no effect on Prior period liabilities: Such cancellation

does not affect the liability of taxable person for any period prior or after
the date of cancellation.
132
Revoca- Where registration is cancelled by Proper Officer, any registered taxable

tion person may apply for revocation of such cancellation within 30 days of
cancellation and Proper Officer may accept or reject the application with
in 30 days. (after giving SCN and opportunity of being heard).
Where registration is cancelled because non filing of return then
revocation application shall be files only after filing return and payment of
tax, interest, penalties and late fee.
Moreover where registration is cancelled with retrospective effect then
first of all file application for revocation and after that need to file all due
returns till revocation order with in 30 days.
Filing of application for revocation of cancellation of registration:
Circular No. 99/18/2019
Prospective Where the registration has been cancelled with

cancellation effect from the date of order of cancellation of
registration, all returns due till the date of such
cancellation are required to be furnished before
the application for revocation can be filed.
Further, in such cases, all returns required to be
furnished in respect of the period:
o from the date of order of cancellation
o till the date of order of revocation of
cancellation of registration
have to be furnished within a period of 30 days
from the date of the order of revocation
Retrospective Where the registration has been cancelled with

Cancellation retrospective effect, the common portal does not
allow furnishing of returns after the effective
date of cancellation.
In such cases it was not possible to file the
application for revocation of cancellation of
registration. For enabling filing of application for
revocation of cancellation of registration, subject
133
to the condition that all returns relating to the

period
o From the effective date of cancellation of
registration
o till the date of order of revocation of
cancellation of registration
shall be filed within a period of 30 days from the
date of order of such revocation of cancellation of
registration
MISC: RC Display: Display RC in a prominent location at his principal and

additional place (s) of business and shall display the registration number on
the name board exhibited at entry of his principal place of business and
any other place of business.
All Documents/notices @ electronically and Digital signed: Each
document filed online shall be signed by person specified. All orders and
notices under this chapter shall be issued electronically by proper officer.
All applications/replies @ electronically and digitally signed: All
applications, including reply, if any, to the notices, returns including the
details of outward and inward supplies, appeals or any other document
required to be submitted under the provisions of these rules shall be so
submitted electronically with digital signature certificate or through e-
signature as or through e signature.
Physical verification of business premises:
*Due to failure of Aadhaar authentication or
*Due to not opting for Aadhaar authentication before the grant of
registration, or
*Due to any other reason after the grant of registration,
Officer may get such verification of the place of business, in the presence
of the said person, done and the verification report along with the other
documents, including photographs, shall be uploaded in on the common
portal within a period of 15 working days following the date of such
verification.
134
Clarification in respect of transfer of ITC in case of death of sole proprietor: Cir

No. 96/15/2019
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 –
(a) Registration liability of the transferee/successor: As per provisions of section

22 (3) of the CGST Act, the transferee or the successor, as the case may be, shall
be liable to be registered with effect from the date of such transfer or
succession, where a business is transferred to another person for any reasons
including death of the proprietor.
(b) Cancellation of registration on account of death of the proprietor: Section 29

of the CGST Act, allows the legal heirs in case of death of sole proprietor of a
business, to file application for cancellation of registration.
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.
135
(d) Manner of transfer of credit: In case of transfer of business on account of

death of sole proprietor, the transferee/successor shall file Application in
respect of the registration which is required to be cancelled on account of death
of the sole proprietor.
Upon acceptance by the transferee/successor, the un-utilized input tax credit
specified in such application shall be credited to his electronic credit ledger of
transferee/successor.
136
CGST Rules, 2017 – Registration

Rule 10A. After a certificate of registration in FORM GST REG-06 has been
Furnishing of made available on the common portal and a Goods and Services Tax
Bank Identification Number has been assigned, the registered person,
Account except those who have been granted registration under rule 12 or, as
Details the case may be rule 16, shall as soon as may be, but not later than
forty five days from the date of grant of registration or the date on
which the return required under section 39 is due to be furnished,
whichever is earlier, furnish information with respect to details of
bank account, or any other information, as may be required on the
common portal in order to comply with any other provision.
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.
137
(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.
138
Rule 21 The registration granted to a person is liable to be cancelled, if the

Registration said person,-
to be
(a) does not conduct any business from the declared place of business;
cancelled in
or
certain cases
(b) issues invoice or bill without supply of goods or services in violation
of the provisions of the Act, or the rules made thereunder; or
(c) violates the provisions of section 171 of the Act or the rules made
thereunder.
(d) violates the provision of rule 10A.
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.]
139
(5) Where any order having the effect of revocation of suspension of

registration has been passed, the provisions of section 31(3)(a) and
section 40 in respect of the supplies made during the period of
suspension and the procedure specified therein shall apply.
140
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?
141
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
Raghav of Assam is exclusively engaged in intra-State supply of readymade garments.

Its turnover in the current FY from Assam showroom is ` 28 lakh. It has another
showroom in Tripura with a turnover of ` 11 lakh in the current FY. Whether Raghav is
required to be registered?
142
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
Uday Enterprises is engaged in supply of taxable goods in Maharashtra. It also supplies

alcoholic liquor for human consumption from Nagaland. Its turnover in the current
financial year is ` 34 lakh in Maharashtra and ` 8 lakh in Nagaland. Whether Uday
enterprises is required to be registered?
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
Bhavyajyoti Foundation, a charitable trust registered under section 12AA of the

Income-tax Act, 1961, is exclusively engaged in supply of services by way of charitable
activities. Whether Bhavyajyoti Foundation is required to be registered?
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.
143
Question 9
Deshbandhu is an agriculturist engaged in cultivation of wheat in his field in the State

of Punjab. He was exclusively engaged in supply of wheat cultivated in his field in the
previous year. Whether Deshbandu is required to be registered.
Answer
Thus, he was not liable to registration as he was exclusively engaged in supply of
produce out of cultivation of land.
Question 10
In the current year, he decides to start trading in rice apart from supplying his wheat
produce. His turnover in the current year is ` 32 lakh from supply of wheat produced
and ` 9 lakh from trading of rice. Whether Deshbandu is required to be registered?
Answer
Since he is engaged in trading of rice also, he is not covered under section 23 above.
The threshold limit for registration applicable to a person exclusively engaged in supply
of goods in the State of Punjab is ` 40 lakh. The aggregate turnover of Deshbandhu in
the current year is ` 41 lakh [` 32 lakh + ` 9 lakh] which exceeds the threshold limit.
Thus, he will be liable to registration.
Question 11
Manikaran Transporters is a Goods Transport Agency (GTA) engaged exclusively in
supplying GTA services liable to tax under reverse charge [since tax is payable on GTA
services @ 5% in the given case]. Whether the registration is required?
Answer
Thus, it is exempt from registration as it is engaged exclusively in making supplies, tax
on which is liable to be paid on reverse charge basis.
Question 12
Manikaran Transporters supplies said service to Diwakar Manufacturing Pvt. Ltd. whose
aggregate turnover does not exceed the applicable threshold limit. Determine the
Registration provisions?
Answer
Since Diwakar Manufacturing Pvt. Ltd. has to pay tax on GTA services [@ 5%] under
reverse charge, it is required to obtain registration mandatorily irrespective of its
aggregate turnover.
144
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
Since it is engaged in making inter-State taxable supply of goods, it is required to

register mandatorily under GST irrespective of its aggregate turnover.
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
It is liable to get registered by 1st December in Delhi.
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.
145
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.
146
CA. Raj Kumar Chapter 12 – Input Tax Credit
12
Input Tax Credit
Analysis of Section 16: CONDITIONS FOR Claiming I.T.C.
PORTAL PORTAL
GSTR=1 by 10th of next month GSTR=2 By 15thof next month

E- Liability Register-Update E-Credit Register - Update
Supplier Supply of Goods/Service “Received”

Recipient
+ Invoice + TOS Supply
+ O/P GST Payment Book I.T.C. in his
+ Return Books of A/c +
File Return
CONDITIONS FOR Claiming I.T.C. u/s 16
1. Recipient should have Invoice issued by

Supplier/SELF Invoice/Debit NOTE/ISD
Invoice/ Bill of ENTRY.
2. Goods/Service-Received by Recipient himself or

Received by III Party on Behalf of Recipient.
Note: If Goods Received in Installment then

deemed to be received on Receipt of last LOT.
147
Chapter 12 – Input Tax Credit CA. Raj Kumar
3. Recipient Need to file – Valid GSTR=3 on time.
4. Supplier Need to file – Valid GSTR-3 on time.
Input tax credit to be availed by a registered

person in respect of invoices or debit notes,
the details of which have not been uploaded
by the suppliers under section 37(1), shall not
exceed 10 % of the eligible credit available in
respect of invoices or debit notes the details
of which have been uploaded by the suppliers
under section 37(1).
5. Bill Payment by “Recipient to supplier: should be

made within 180 Days from invoice date. (For
NCM supplies only)
* IF NOT made: then on 181st day, ITC Reversal.
* What if made After 180 Days: Book (Re-Avail)
ITC on Payment Basis (i.e. proportionately)
* WHAT About ‘FOC’ supplies: (RBI Ki Agency)

then the bill
Amount shall be deemed to have been paid.
6. INWARD Supply: USE/intended to be used for

Business or Furtherance of Business.
7. Recipient’s output Supply should be Non-

Exempted.
* What about MIX USE: make it Proportionate

and restricted it to non-exempted and business
purpose.
148
8. Keep in mind Last date to Book ITC – Last date:

(sep month Return of NEXT Year OR Annual
Return filing date) whichever is earlier & this
condition is only for original Booking of ITC ie
not for re-availment.
9. Either ITC or Depreciation Under I.T. Act
10. CAPITAL Goods – Use for whole life, IF partly

used then:
Make it proportionate as per prescribed method.
11. No ITC shall be allowed of the TAX arise on Re-

Assessment/Fraud etc.
12. Received supply should not be a NEGATIVE

listed supply as defined in Sec: 17(5)
149
TEST YOURSELF
Question 1
A is a trader who places an order on B for a consignment of soda ash. A receives a

buying order from C for the same quantity of soda ash. A instructs B to deliver the
goods to C, and in turn he raises an invoice on C. Whether A can claim input tax on such
goods?
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.
150
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
A registered person is in the business of manufacturing shoes. He gave 50 pairs of

shoes for his friends free of cost. Whether the input on such 50 pairs of shoes can be
claimed?
Answer
ITC on inputs and input services attributable to such 50 pair of shoes being used for
non-business purposes will not be available.
151
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.
Passenger motor vehicle seating capacity: 13 Person or less (Including Driver)
No Input Tax Credit YES Input Tax Credit to Recipient
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
What about Repair maintenance/servicing/

Insurance service -Related to passenger
motor vehicle:
Rs.100000 +18000 (ITC ×)
√
Show Room
Further
Supply.
√ Jai Bala Ji Travels
Taxi
Texla Motor Driving
√ School
Input Tax Credit Driving
Here Motor Vehicle = Back Bone
Repair/Maintenance Service/Servicing
Insurance = Input Tax Credit: allowed
152
AIRCRAFT/VESSEL
NO ; Input Tax Credit to Recipient YES ; Input Tax Credit to Recipient
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.
Further supply of such motor vehicle
For passenger transportation service.
Indian Navy For Training Purpose

Used
Air force
For War For transportation of goods
ITC ×
ITC of Repair maintenance etc. also not allowed. √ “Dealer” Sale

(Further Supply)
√ “Spice Jet” Passenger Tran-
portation Service
√ “Coaching Training
Institute.”
√ Goods Trans.
“Air India”
ITC
Vessel/Air Craft = Back Bone
Repair/Maintenance Service/Insurance Service

= Input Tax Credit √
153
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
Authorised Claim Insurance Premium

R. Capital Ins. Co.
Service Station
Repair Bill ITC √ of Rs.18,000 Output Tax √
100000
+ 1800
154
PERSONALISED SERVICES (INDIVIDUAL RELATED SERVICE)
NO INPUT TAX CREDIT YES ; INPUT TAX CREDIT allowed
 Food & Beverages  However in Similar Business credit

 Outdoor catering shall be allowed to “Recipient “
 Beauty treatment service Eg.
 Health service
 Cosmetic & plastic surgery SAGAR
 Life insurance RATNA
 Health insurance service
FOOD FOOD
Prowise CA Input Tax Credit √

Director/Employee Insurance
HDFC Life LIC Director
Input Tax Credit ×
Prowise
Re Insurance Insurance
Foods : 100000 + GST × 40Cr. ITC √ 100 Cr. ITC ×
 Membership of CLUB.
 Membership of GYM.
GYM Value : 10000 Prowise CA

1800
11800
Input Tax Credit of Rs.1800
Travel Benefit to employee: for personal
TRIP.
Cox & King

Prowise CA
Ie. Package for personal trip of an employee

ITC ×
155
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
Ie. Service for lady employee after 11 PM. ITC √
156
WORKS CONTRACT SERVICE
(Goods + Service) @ Single price & resultant property = immovable property.
NO Input Tax Credit YES Input Tax Credit Available to Recipient
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
PROWISE What about similar business : ITC √

SUB-Contract W.C. PROWISE
DLF
Ie. Work Contract Service
Work Contract Service: For construction
Service ITC ×
of a HALL in office Premises: ITC ×
ITC√
WHAT ABOUT : Building material & Construction Service
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.
Land & Building

Tele Communication Tower
Building Material PROWISE
Pipe Line
Construction Service
Building Material ITC √

PROWISE
What about similar Business :
Contraction Service Business Material PROWISE
DLF
Contraction Service
Input Tax Credit ×
ITC √
157
COMPOSITION DEALER
NO ITC shall be allowed to a composition Dealer---
Eg.
Inward supply
COMPOSITE
BUYER
DEALER
No Input Tax Credit Input Tax Credit ×
Non Resident Taxable Person
USA
Import of Goods MCP INDIA
Participate
Non-Resident in Trade
Inter State fair
Value of Goods : xxx

+ BCD xxx
xxx Credit of IGST by NR: Yes allowed
+Other I.D. xxx
+IGST xxx Credit of other supplies: not allowed
+ Com. Cess xxx
Miscellaneous
Purchase
[Itc not allowed] 0---------------0 Personal Consumption/Stolen/Destroyed etc.
---------------------------------------------------------------------------------------------------
158
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.
2. ITC on cars purchased by a car dealer for sale to customers is allowed.
3. ITC on cars purchased by a company engaged in renting out cars for transportation
of passengers, is allowed.
4. ITC on cars purchased by a car driving school is allowed.
5. ITC on buses purchased by a company for transportation of its employees from

their residence to office and back, is allowed.
6. ITC on trucks purchased by a company for transportation of its finished goods is

allowed.
Examples –
1. ITC on aircraft purchased by a manufacturing company for official use of its CEO
is blocked.
2. ITC on aircraft purchased by an Aviation School providing training on flying

aircrafts, is allowed.
159
Example –
1. ITC on general insurance taken on a car used by employees of a manufacturing

company for official purposes, is blocked.
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.
2. ITC on outdoor catering services availed by a company, for a team development

event organized for its employee, is blocked.
3. ITC on outdoor catering service availed by a company to run a 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.
160
SECTION : 17 (1) “Business & Non Business”
(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)]
SECTION : 17(2)&(3) Example & Non Exempted
(i) Where any goods are used in NON EXEMPTED Purpose
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
161
(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”.
Value : 100000 Non Exempted 60%

GST : 18000
118000 Exempted 40%
100% E/N (GATE : 5)

STEP : 1 Book total Input Tax Credit = 18000/- NIL Rated supply
STEP : 2 Reversal of ITC = 7200/- NON Taxable supplies
(Liquor/Petrol)
D Where RCM is applicable.
E Sale of Land & Complete
Building @ Circle Rate
E Securities @ 1%
M
E
D
162
Question Based on Section : 17 (1) + (2) + (3) + (4)
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
Total INPUT TAX ABC Ltd. Outward Supplies

Rs. 1,00,000
Exempted = Rs. 30 Lakh

Non-Exempted = Rs. 40 Lakh
Which Includes:- (Note: All above values are Exclusive of All TAXES.)
* Non-Eligible Input Tax [u/s 17(5)] = Rs. 6000/- [not allowed]
* Exclusive use in Exempted supplies Rs. 9000/- [not allowed]
* Exclusive use in Non-Business purpose Rs. 5000/- [not allowed]
* Exclusive use in Non-Exempted & Business purpose = Rs. 10,000/-[fully allowed]
* Balance inward supplies (Input Tax) – used on MIX/Common Use.
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.
Now take annualized figure:
Total common credit Rs.70,000 *12= 8,40,000
Ineligible credit to be reversed: 33500* 12= 4,02,000
(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.
163
April, 2018: DATA
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.
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
Renting of
Immovable property Service GTA Service A Ltd.
Value : 1,00,000
IGST : 18,000 Rs. = 40 Lakh @ RCM
1,18,000
164
Note: RCM supplies generally not an exempted supply but for the purpose of section 17 it
shall be treated as exempted supply.
Q. 5
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
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)
[full itc shall be allowed]

Common Supply (50% itc allowed and
balance not allowed)
Bank
Branch
Supply (Deemed Distinct)
Note Lock in period for the option is SAME FY.
165
Note: What is exempted and what is non exempted supplies for the purpose of Rule
42 and Rule 43.
What is exempted supplies What is not exempted supplies
1. Supplies attracting 100 % E/N 1.Supplies where consideration received in

form of interest and discount (except
Banking co. financial institution, NBFC)
2. NIL rated supplies 2.Transportation of goods by vessel from

India to outside India.
3. Non- taxable supplies
4. Supplies taxable under RCM
5. Securities trading @1%
6. Sale of land and completed building

@ circle rate
166
MIX/Common use of Capital Goods: Rule 43
(A) Capital Goods Exclusively USE for : Exempted /NON Business Supply = NO ITC
(RELATED INPUT TAX = 20,000)
(B) Capital Goods Exclusively USE for : NON Exempted & Business Purpose = ITC
30,000/- allowed
(RELATED INPUT TAX = 30,000)
COMMON USE OF CAPITAL GOODS :
Exempted supplies: 10 Lakh Others supplies: Rs 40 Lakh
PARTICULARS Common Credit
(A)
Capital Goods Purchase & USE for Common Purpose 60,000/-
(Rs 60,000 will be

transferred to E-credit
Ledger )
Capital Goods Purchase Earlier & that time USE

Exclusively for Exempted & NON Business purpose-
NOW USE for common purpose.
Input tax was Rs. 70,000

Rs.70,000/- Common Credit
Capital Goods: after 1 Year :Common USE (Rs 70,000 will be

transferred to E-credit
(Input Tax - 5% per quarter for 4 quarter) Ledger and add 14,000 in
output GST liability on cut
Rs. 70,000 – 20%= 56,000
off date )
167
PARTICULARS Common Credit
(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)
Capital Goods: after 1 Year :Common USE Rs. 60,000/-
Total of Common Credit=Rs.

190,000/-
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.
3166.67*10/50 =Rs. 633.33
168
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
(5) Whether ITC on buses (seating capacity for 24 persons) purchased by a

company for transportation of its employees from their residence to office
and back, is allowed? =Yes
(6) Whether ITC on trucks purchased by a company for transportation of its

finished goods is allowed? = Yes
(7) Whether ITC on aircraft purchased by a manufacturing company for official

use of its CEO is allowed? = No
(8) Whether ITC on aircraft purchased by an Aviation School providing training

on flying aircrafts, is Blocked?= No
(9) Whether ITC on general insurance taken on a car used by employees of a

manufacturing company for official purposes, is blocked?= Yes
169
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
(2) ITC on outdoor catering services availed by a garment exporter for a

marketing event organised for its prospective customers, is blocked or
allowed? = Blocked.
(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.
(2) ITC on works contract services availed by an automobile company for

construction of a foundation on which a machinery (to be used in the production
process) is to be mounted permanently, is allowed or Not?= allowed.
(3) ITC on works contract services availed by a manufacturing company for

construction of pipelines to be laid outside its factory, is blocked or not ? =
Blocked
170
(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
(5) A telecommunication company has availed services of a works contractor for

repair of its office building. The company has capitalized such expenditure. ITC
on such services is allowed or Not?= 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
ITC on such goods and services is allowed to MN & Co.
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
ITC on such goods and services is allowed.
Question 13
ITC on goods and/or services used by an automobile company for construction of a

foundation on which a machinery (to be used in the production process) is to be
mounted permanently, is allowed or Not?
Answer
ITC on such goods and services is allowed.
171
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
ITC on such goods and services is blocked.
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
Being used for personal consumption, ITC on 10 kg of rice and 10 kg of wheat is

blocked.
172
Section 18 ITC in special CASES
Sec.: 18(1) (a) : NEW REGISTRATION: Applied for with in PRESCRIBED Time (i.e. 30 Days)
(1) + (2) + (3) (4)+ (5) + (6)
600 Kg. stock

10-9-2020
OUTPUT TAX = NO 20L/ OUTPUT TAX = YES

ITC = NO 10L/40L ITC = YES
Plus
(ii)
i. INPUT PURCHASE (iii) * WE Need REG. within 30 Days

Value (1000 Kg. x 200) = 200000 from 10.09.2020
GST @ 18% = 36000 * then REG. will be effective from
236000 10.09.2020
Purchase A/c ------------Dr. 236000 (iv) Stock as on: 09.09.2020 Ki SHAM

To Bank 236000 i.e. Op. Stock of input on 10.09.2020
--------------------------- As Such Form = 100 Kg. R/M
In Form of WIP = 200 Kg R/M
In Form of “F.G.”= 300 Kg. R/M
Lying in Stock 600 Kg.
36000
--------- × 600 = 21600/=
1000 Kg.
ITC……..Dr. 21600
10.09.2020: To Purchase 21600
173
Sec. : 18(1) (b) : VOLUNTARY REGISTRATION:
600 Kg. stock

10-9-2020
OUTPUT TAX = X VOL. OUTPUT TAX = √

ITC =X REG. ITC =√
(ii)
i. INPUT PURCHASE (iii) * Registration effective: 10.09.2020

Value (1000 Kg. x 200) = 200000
GST @ 18% = 36000
236000
Purchase A/c ------------Dr. 236000 (iv) Stock as on: 09.09.2020 Ki SHAM

To Bank 236000 i.e. Op. Stock on 10.09.2020
--------------------------- As Such Form = 100 Kg. R/M
36000
--------- × 600 = 21600/=
1000 Kg.
ITC……..Dr. 21600
10.09.2020: To Purchase 21600
174
WHAT ABOUT
CAPITAL GOODS Section: 18(1) (c) : COMPOSITION to NormalScheme:
600 Kg. Stock

(1) + (2) + (3) 10-9-2020
(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
to USAGE
Period =
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
175
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
= 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
176
Sec.: 18(2): ITC Booking LAST DATE: 1Year from the Date of INVOICE of Supply of such
INPUT/Capital goods.
Rule : 40
PROCEDURAL PART: Related to ITC U/S: 18(1)

* Need to file ITC-01 to effect that he is Eligible to Avail ITC.
* With 30 DAYS + Extension
* Containing Detail of Remaining INPUT & Capital Goods
* IF Your Claim Rs. 2,00,000/- Plus - Need P.C.A. Certificate
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
SERVICE + Supply T/F to New Ownership

+ NATURE + T/P = Mr. X SHIFT - ITC
REG. Surrender + SN: 2 Exempt
i.e. Rs. 10 Cr. = GST X
177
Section: 18(4)
STOCK
* NORMAL Scheme 1-4-2020
* Taxable Supply/ 600 Kg * Composition Scheme

Non-Exempted * Exempted Supply
ITC √ ITC X
INPUT AS SUCH 100 Kg.

* Stock - IN WIP Form 200 Kg. SHIFT – ITC – Balance
IN FP (R/M) 300 Kg.
600 Kg. (ITC Reverse/Output Liability/@ Remaining Life)
178
Q. BASED ON SECTION: 18(4):
(A)- 1-4-2020
INPUT PURCHASE
Value1000Kg x 200) = 200000 (C)- WEF: 10-9-2020

GST = @ 18% = 36000 Outward Supply: Exempt
236000
(B)- AS ON DATE OUTWARD (D)- As on : 10-9-2020 : OPENING ?

Supply = NON-Exempted AS SUCH = 100 kg. (R/M)
Purchase A/c 200000 INPUT: WIP = 200 Kg. (R/M) Purchase Dr.
ITC---------------Dr. 36000 FG = 300 Kg. (R/M) To O/P GST
To Bank 236000 600 Kg.
Related TAX = 36000 x 600 = 21600

1000 O/P GST
(B1)- CAP. Goods as on 1-4-2020 O/P. Liability –Increase To ITC
Value : 100000 To CASH
GST : 18000
118000 CAPITAL GOODS:
CAP. Goods ………………Dr. 100000 Assume: Life ITC (Full) = 18000
ITC…………………….Dr. 18000 5 Year = 60 Month ITC Related to =
To Bank 180000 PRO. Month Basis USAGE Period
(or PART thereof) (1-4-20 to 10.9.20) =1800
18000 x 6M
60M 16,200
Section 18(5): Not Relevant
179
Q: BASED ON = Section 18(6)
(1-4-2018) ABC Ltd. (10-3-2020)

(A) CAPITAL GOODS CAPITAL GOODS = SUPPLY
Values : 2,00,000 FOR Rs. 70,000/-
GST : 36,000
2,36,000 ITC = 36,000
Goods + supply + inter/intra

+ taxable person : ABC LTD + No exemption+
(B) CAP GOODS A/c – 2,00,000/- computation : 70,000 *18%= 12,600
ITC - Dr. 36,000/-
To BANK 2,36,000/-
Reversal of ITC/addition in output liability

To the extent @ monthly proportionate.
36,000*24 months/60 months = 14,400
Net = 36,000 – 14,400 = 21,600
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.
180
Section 18: Availability of credit in special circumstances
ITC booking on SECTION 18 : AVAILING OF CREDIT IN CERTAIN

STOCK HELD in CIRCUMSTANCES
special cases
(1) BOOKING OF ITC ON “STOCK” NEED SPECIAL CASES
(a) Pre RC Period:
- Where a person applied for Registration within 30 Days

from the date on which he is required to take
registration.
- Then he shall be entitled to Book the credit on stock of

Input held (as Such, In WIP, Contained in Finished
goods held in stock)
- On the date, just before the date on which he is

required to take registration.
(b) Voluntary Registration:
- Where a person takes voluntary registration.
- Then the person shall be entitled to take ITC on stock of

Input held
(as Such, In WIP, Contained in Finished goods lying in

stock)
- On the date, Just before the date of Grant of

Registration.
(c) Composition to Regular Scheme:
- Where a person not remain Entitled to pay tax under

composition scheme i.e. Shift from composition to Regular
Scheme
- Then the Person shall be Entitled to Take ITC
- On the Inputs held in stock (as such, in WIP, Contained in

Finished goods held in Stock)
181
- On the date, just before the date on which he shift to

Regular Scheme.
NOTE:
In Such a case the person shall also be entitled to Book ITC

Capital Goods held as
on date. Calculation of Eligible ITC will be made as per

following Formula:-
Input tax Related to such capital goods : XXX
Less:- 5% per Quarter or Part there of : XXX
(From the date of purchase Till the date, Just before

the date of shifting to regular Scheme Eligible ITC)
(d) Exempted to Taxable Supplies

- Where an Exempt supply by a Registered Person Becomes
Taxable supply.
- Then such Person Shall be entitled to Book ITC on Input
held in Stock (on Such, In WIP, contained in Finished
Goods held in stock)
- on the Date, just before the date on which such supply
became Taxable.
NOTE:
In Such a case the person shall also be entitled to Book ITC Capital
Goods held as
on date. Calculation of Eligible ITC will be made as per following
Formula:-
Input tax Related to such capital goods : XXX
Less:- 5% per Quarter or Part there of : XXX
(From the date of purchase Till the date, Just before the
date of shifting to regular Scheme Eligible ITC)
182
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.
Transfer of ITC (3) Where there is a change in the constitution of a registered

to NEW person on account of sale, merger, demerger, amalgamation, lease or
Entity/ownership transfer of the business with the specific provisions for transfer of
liabilities, the said registered person shall be allowed to transfer
the input tax credit which remains unutilised in his electronic credit
ledger to such sold, merged, demerged, amalgamated, leased or
transferred business in such manner as may be prescribed.
Reversal of (4) Where any registered person:

ITC/Payment of
 who has availed of input tax credit opts to pay tax under
an amount
section 10 or,
 where the goods or services or both supplied by him become

wholly exempt,
he shall pay an amount, by way of
 electronic credit ledger or
 electronic 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 and on capital goods, reduced by such percentage points as
may be prescribed, on the day immediately preceding the date of
exercising of such option or, as the case may be, the date of such
exemption:
ITC LAPSE: Provided that after payment of such amount, the

balance of input tax credit, if any, lying in his electronic credit
ledger shall lapse.
183
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
 the tax on the transaction value of such capital goods or plant

and machinery determined under section 15,
[Whichever is higher]
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.
184
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
SECTION 49: PAYMENT OF TAX INTEREST,

PENALTY & OTHER AMOUNT
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.
[Deposit by making challan i.e. C-PIN]
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.
 After that Amount mention in challan need to be deposited in authorized

bank & such authorized bank integrated with GST Portal GSTN.
 For above GSTN & Banks are tie upped :
 & 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
186
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:
(iii) All Liabilities of a Taxable Person Shall be recorded in E- Liability register.
(iv) Every Taxable Person shall discharge his tax dues and Other dues in the following
Order
(a) Self Assessed Dues- Related to Returns of Previous Period.
(b) Self Assessed Dues – Related to Returns of Current Period.
(c) Re-Assessed Dues on Determined by Offices.
E-CREDIT LEDGER:
(v) Input-Tax Credit on Self Assessed in Return [GSTR=2] shall be credited to E-

credit Ledger.
(vi) The amount available in E-Credit Ledger may be used for making payment of output
Tax in Prescribed manners.
(vii) Manner Prescribed for using ITC.
1. Credit of IGST..
o First to be utilised for the payment of IGST
o SECOND to be utilised for the payment of- CGST, SGST / UTGST

(IN ANY ORDER ANY RATIO)
2. Credit of CGST..
o First to be utilised for the payment of CGST
o Second to be utilised for the payment of IGST
3. Credit of SGST …
o First to be utilised for the payment of SGST
187
3. Credit of UTGST …
o First to be utilised for the payment of UTGST
(viii) Refund of balance
Any Balance in E-Cash Ledger or E-Credit Ledger, After payment of Tax, Interest,
Penalty, Fee or Any other may be refunded.
(ix) PRESUMPTION OF PASSING ON TAX BURDEN:
Every Taxable Person who has paid the tax shall
- Unless the contrary proved by him
- Be deemed to have passed the full incidence of Tax.
- to the Recipient.
188
CA. Raj Kumar Chapter 13 – Manner of Payment
Section 50: Interest on delayed payment of tax
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.
“Provided that the interest on tax payable
 in respect of supplies made during a tax period and declared in the

return for the said period furnished after the due date in
accordance with the provisions of section 39,
 except where such return is furnished after commencement of
any proceedings under section 73 or section 74 in respect of the
said period,
 shall be levied on that portion of the tax that is paid by debiting
the electronic cash ledger.
How to (2) The interest shall be calculated, from next day after due date.
calculate
interest
Interest @ (3) A taxable person

higher % [24%
 who makes an undue or excess claim of input tax credit or
maximum]
 undue or excess reduction in output tax liability
shall pay interest on such undue or excess claim or on such undue

or excess reduction, at such rate not exceeding 24% pa.
189
SECTION – 53 Transfer of Fund
- Where CGST credit is used for the payment of Output IGST,
- Then CG shall Transfer Equivalent amount from CGST fund to IGST Fund.
[NOTE: Similar provision also contained in SGST / IGST / UTGST Act]
SECTION – 53A Transfer of Certain Amount
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)
(2) payment of tax mandatory to file a valid return
(3) Nil return also required to be filed.
Filed by Form Description Frequency Due date Remark
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
-ISD Annual Return Annually By 31st dec

GSTR 9
(except Note: Where the time limit of GSTR-1 and
-TDS dedtr GSTR-2 has been extended then return shall
CTP)
be furnished in FORM GSTR- 3B.
-TCS coll.
GSTR 9C Annual Annually By 31st dec

(except: Audited
Whose statement
audit done (where T/O
by CAG) exceeds Rs 2
crore)
191
Chapter 14 – Return CA. Raj Kumar
Filed by Form Description Frequency Due date Remark
Composite GST CMP 8 Periodic Quarterly By 18th

return
Dealer
(original and GSTR 4 Annual Annually By 30th April

duplicate ) statement
GSTR 9A Annual Return Annually By 31st Dec
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
Person whose GSTR 10 FINAL Return One time With- in 3

RC cancel month from
(order
/effective of
Cancellation )
whichever is
later
Person having GSTR 11 Detail of all Monthly By 28th

UIN ie UN/ INWARD
INTER- SUPPLIES.[Al
NATIONAL ong with
organization/ application for
embassy refund of tax
on inward
supply, if any]
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]
192
SECTION 37: OUTWARD SUPPLIES DETAILS i.e. DETAILS OF

INVOICE, DEBIT & CREDIT NOTES.[GSTR : 1]
(i) - Every Registered person: [Other Than : Non-Resident, Composite Dealer,

ISD, TDS Deductor, TCS Collector]
- Shall Furnish Details of Outward supplies in form GSTR=1 for a tax Period
on or Before 10th of next month and
- Such Details shall be Communicated to Recipient.
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.
(ii) Rectified/Amended GSTR=1
- When GSTR:1 Filed by Supplies it is communicated to Recipient in GSTR:2A then

Recipient files GSTR:2 U/S 38 (Recepient may add or delete any entry given in
form GSTR :2A)& it is communicated to supplier in form GSTR:1A
- 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.
(iii) MAXIMUM TIME OF AMENDMENT/RECTIFICATION : IN GSTR: 1
- GSTR:1 can be amended or Rectified,
- @ 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.
- Then the Person Liable to pay such tax with Interest.
193
SECTION:38: FURNISHING DETAIL OF INWARD SUPPLY
(i) VALIDATION OF INFORMATION RECEIVED IN FORM GSTR=2A
- Every Registered Person [Other than Non Resident, Composite Dealer, Input
service distributer, TDS Deductor, TCS Collector]
- Shall Validate, Verify, Modify or Delete (If required) two details of

“Outward supplies” filed by supplier in GSTR:1 and Communicated to
Recipient in GSTR:2A.
(ii) AFTER THIS - FILING OF GSTR:2 by Recepient
- Such Recipient Shall Furnish “Details of Inward Supplies” in form “GSTR: 2”

Including the detail of “RCM” Supplies, and Import of Goods, Credits &
Debit note Received.
- After 10th Day but before the 15th day of the next month.
(iii) COMMUNICATION TO SUPPLIER IN GSTR=1A:
- GSTR: 2 as filed by Recipient shall be communicated to supplied in Form

GSTR=1A
(iv) MAXIMUM TIME TO AMEND / RECTIFY GSTR:2:
- GSTR Can be Amended or Rectified,
- @ Maximum by the date of filing of Next year September Month’s Return or

Relevant Annual Return filing date (whichever is earlier)
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
case of short payment.
- then the person shall be liable to pay Tax with interest.
194
SECTION 39:FILING OF PERIODIC 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.
- On or Before 20th of Next-Month.
(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
- on or Before 18th of Next-Month.
(iii) GSTR:5
- Every Registered Non-Resident Taxable Person Shall file GSTR:5 for every
Calendar Month of part thereof
- @ Specified Details
- with in 20 Days after the end of Calendar Month OR
- Within 7 Days after the expiry of Registration period (Whichever is Earlier)
NOTE:
The Commissioner may extend the time limit for Furnishing the Return under this
section.
195
(iv) TAX PAYMENT BY DUEDATE OF RETURN:
- Every Registered person who is required to Furnish Return as above
- shall pay the tax due as per such return by the last date and
- Furnishing the Return accordingly.
(v) NIL RETURN:
- Every registered person (Other than Non Resident, ISD, TDS Deductor,
TCS Collector)
- Including Composite Dealer is required to file NIL Return Also
(vi) RECTIFICATION:
After Furnishing a Return, where any registered person discovers any omission or
Incorrect Particulars.
- Then he shall rectify such omission or Incorrect Particulars in the Upcoming

Month / Quarter’s Return. [Note: Interest will be payable if any]
- Maximum time for such rectification will be earlier of the two:
- Due Date of Furnishing of Return for September month /Quarter

ending in September in Next FY.
OR
- Actual Date of Furnishing of Relevant annual Return.
SECTION: 40 : FIRST RETURN @ PRE RC PERIOD
- 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.
NOTE: Section 41,42,43 not in syllabus
196
Section 44: Annual return @ Annual Frequency
By every (1) Every registered person, [other than

registered
 a casual taxable person and
person except
notified  a non-resident taxable person
[GSTR: 9, shall furnish an annual return for every financial year
9A,9B] electronically on or before the 31st day of December following
the end of such financial year.
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,
Section: 45 Final Return [One time Return]
Every Registered person: [Other Than : Non-Resident, Composite Dealer, ISD, TDS
Deductor, TCS Collector]
- whose registration has been cancelled shall furnish a final return
- within three months of the date of cancellation or date of order of cancellation,

whichever is later.
197
Some other Points:
Section: 46 Where a registered taxable person fails to furnish a return under

section 39,[Combined Return] section 44 [Annual Return] or section 45,
Notice to
[Final Return] a notice shall be issued requiring him to furnish such
return
return within 15 days in such form and manner as may be prescribed.
defaulter
[GSTR 3A]
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.
Annual Any registered taxable person who fails to furnish

Return the return required under section 44 by the due date
shall be liable to a late fee of Rs.100 for every day
GSTR- 9,
during which such failure continues subject to a
9A,9B,9C
maximum of an amount calculated at a 0.25% of his
turnover in the State)/UT.
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
Rule. 67A. Manner of furnishing of return or details of outward supplies by short messaging
service facility
Notwithstanding anything contained in this Chapter,
 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
[Rule 138 of CGST Rules, 2017]
1. OBJECT To control /stop practice of bogus invoice related to GOODS to avoid

tax evasion. It is not applicable on services as services have no physical
existance.
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)
Required VALUE of consignment:
[EWB is linked Consolidated Invoice cum Bill

to movement
 Value of Taxable Goods : 30,000 Value for E- Way Bill
of goods and
not linked to  Value of Exempted Goods : 25,000
supply]
55,000 30,000 + 8400 + 4500 = Rs.42900
 + GST @ 28% 8400 + 25,000 EWB : Not Mandatory
 + Com. Cess 15% 4500
Total 67,900
Crux: Total Invoice value – Exempted Value = XXX
200
CA. Raj Kumar Chapter 15 – E-Way Bill
Mnadatory EWB: In following situation: E Way Bill MANDATORY Irrespective

of value of consignment.
Inter state movement of goods to Job Worker
Principal Job worker

Not a SUPPLY
(DL) (HR)
Inter state Movement of Handicraft goods.
3. E- Way Bill – Required for Inter - state as well as INTRA STATE

movement of goods however for INTRA State movement Value for EWB
INTRA/
may very eg. DELHI – INTRA STATE value of consignment Rs. 1,00,000
INTER
Plus.
EWB Made By Sender Receiver
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
having 12 digit – unique digital number with QR Code
for Quick verification during movement by interceptor.
EWB – NUMBER – Communicated by SMS / E mail :
S T R
201
5. Normal E Way Bill: (Transportation of goods of one type ie one HSN)
Type of EWB
E – Way Bill
Bulk E- Way Bill: Transportation of goods of multiple code

(Support with Excell sheet) Ie having multiple H. S.N Goods
Consolidated EWB
DL
S
EWB -1
S JAMMU
EWB – 2
S EWB -3 CHD PATHAN
KOT
S
EWB - 4 DL
Consolidate
EWB
6 EWB- Once generated can be cancelled due to various reasons within 24

hours.
Cancellation
of E – Way Reject By owner: with in 72 hours.
Bill
7  Non-motorized vehicles,
Exemption of  Exempted goods/

EWB
 Non-taxable goods,
202
-Goods wise  GEMS & Jewellery,
-Area wise  Coal, LPG, Kerosine-oil ,
-Vehicle wise  Postals,
-Person wise  Currency,

etc.
 Custom control goods,
 Goods to Nepal/Bhutan,
 Where empty cylinders for packing of liquefied petroleum gas are

being moved for reasons other than supply.
 Movement – which is not a supply (Negative list of supplies)
 Specified Area (between SEZ and DTA),
 Government Department (eg. Defence), Empty Container
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
3. Upto 20 km One day in case of Over Dimensional

Cargo or multimodal shipment in which at
least one leg involves transport by ship
203
4. For every 20 km. One additional day in case of Over

or part thereof Dimensional Cargo [or multimodal shipment
thereafter in which at least one leg involves transport
by ship
By commissioner : in Certain Cases

Extension :
By EWB Generator: Extend it.
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
9 - Where movement of goods involves use of multivehicle then only

one E-way bill shall be continued with corresponding Updation in
In case of use
PART-B of EWB ie Transporter Detail.
of
- However under Multiple Vehicle Movement where a vehicle moves
Multivehicle
Intra State and Covers distance only Upto 50Km them PART- B of
EWB need not to be Updated.
11 Like adding beneficery for NET Banking purpose.
Own Master (List of customer, List of supplier, Item, item code)
12. Before movement of goods
Time of EWB GST–EWB = 01
PART : A
From :
S /T /R
To : Bill to & Ship to
Item Detail : Destination / HSN/Rate
etc.
204
S: Sender, T: Transporter, R: Recepient
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.
After movement of goods
Incase of Rail /Air/Vessel – E – Way Bill shall be generated by suplier or

reciver either before movement or after movement, However, goods will
be deliverd to reciver – on production of E- Way Bill.
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
Online summary upload by officer

(Within 24 hours) on Portal
& Detailed report: within 3+3 Days on portal
Note : Physical verification done once – Not again physical verification unless
specific information of contravention.
Note: Driver – hold more than 30 minutes – Complained facility
205
Note: No person (including a consignor, consignee, transporter, an e-commerce

operator or a courier agency) shall be allowed to furnish the information in PART A of
FORM GST EWB-01 in respect of a registered person, whether as a supplier or a
recipient, who,-
(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
A consignor is required to move goods from City X to City Z. He appoints Transporter A

for movement of his goods. Transporter A moves the goods from City X to City Y. For
completing the movement of goods i.e., from City Y to City Z, Transporter A now hands
over the goods to Transporter B. Thereafter, the goods are moved to the destination
i.e. from City Y to City Z by Transporter B. How many e way bill are issued ?
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?
206
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].
207
List of Sections of CGST Act, 2017 CA. Raj Kumar
LIST OF SECTIONS OF CGST ACT, 2017
PRELIMINARY
Section 1 : Short title, extent and commencement.
Section 2 : Definitions.
ADMINISTRATION
Section 3 : NA
Section 4 : NA
Section 5 : NA
Section 6 : NA
LEVY AND COLLECTION OF TAX
Section 7 : Supply.
Section 8 : Composite and Mixed supplies.
Section 9 : Charging Section
Section 10 : Charging section (Composition levy.)
Section 11 : Exemptions.
208
CA. Raj Kumar List of Sections of CGST Act, 2017
TIME AND VALUE OF SUPPLY
Section 12 : Time of supply: Goods.
Section 13 : Time of supply: Services.
Section 14 : Change in rate of tax in respect of supply of goods or services.
Section 15 : Value of taxable supply.
INPUT TAX CREDIT
Section 16 : Eligibility and conditions for taking input tax credit.
Section 17 : Apportionment of credit and blocked credits.
Section 18 : Availability of credit in special circumstances.
Section 19 : Taking input tax credit in respect of inputs and capital goods sent
for job work.
Section 20 : Manner of distribution of credit by Input Service Distributor.
Section 21 : Manner of recovery of credit distributed in excess.
REGISTRATION
Section 22 : Persons liable for registration.
Section 23 : Persons not liable for registration
Section 24 : Compulsory registration in certain cases.
209
Section 25 : Procedure for registration
Section 26 : Deemed registration
Section 27 : Special provisions relating to casual taxable person and non-resident

taxable person.
Section 28 : Amendment of registration.
Section 29 : Cancellation or suspension of registration.
Section 30 : Revocation of cancellation of registration.
TAX INVOICE, CREDIT AND DEBIT NOTES
Section 31 : Tax invoice
Section 32 : Prohibition of unauthorised collection of tax.
Section 33 : Amount of tax to be indicated in tax invoice and other documents.
Section 34 : Credit and debit notes.
ACCOUNTS AND RECORDS
Section 35 : Accounts and other records.
Section 36 : Period of retention of accounts.
210
CA. Raj Kumar List of Sections of CGST Act, 2017
RETURNS
Section 37 : Furnishing details of outward supplies.
Section 38 : Furnishing details of inward supplies.
Section 39 : Furnishing of returns.
Section 40 : First return.
Section 41 : Claim of input tax credit and provisional acceptance thereof.
Section 42 : Matching, reversal and reclaim of input tax credit.
Section 43 : Matching, reversal and reclaim of reduction in output tax liability.
Section 43A : Procedure for furnishing return and availing input tax credit
Section 44 : Annual return.
Section 45 : Final return.
Section 46 : Notice to return defaulters.
Section 47 : Levy of late fee.
Section 48 : Goods and services tax practitioners.
211
PAYMENT OF TAX
Section 49 : Payment of tax, interest, penalty and other amounts.
Section 49A : Utilisation of input tax credit subject to certain conditions
Section 49B : Order of utilisation of input tax credit.
Section 50 : Interest on delayed payment of tax.
Section 51 : Tax deduction at source.
Section 52 : Collection of tax at source.
Section 53 : Transfer of input tax credit.
Section 53A Transfer of Certain Amount.
212

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For CA Intermediate

For May 2021 & November 2021

CA. Raj Kumar

Why Tax: Government need fund to fulfill Increasing developmental needs of

What is Tax: Tax is a Compulsory Extortion of money made under an Act.

Features of Indirect Tax

(i) It is an important source of Revenue to the government.

(ii) It is levied on goods and/or services.

(iii) Tax burden is shifted to another person.

(v) Changes in the Rates of Indirect Taxes directly affects inflation.

PRE & POST GST

- Moreover All manufacturers, Trader & Services provided will be called on

- International transaction will also be called as “Inter State Transaction”

- GST is a Tax imposed on Goods and/or Services. It is a value added tax

CREDIT CONCEPT UNDER GST

Inward Supply 0-----------0 Outward Supply CGST

INPUT TAX OUTPUT TAX XXX UTGST

CGST Use ITC XXX

SGST NET GST XXX

(i) First of all credit of IGST will be utilised-

- For the payment of IGST

- For the payment CGST / SGST or UTGST

(in ANY Ratio and in any sequence)

(ii) After that credit of CGST will be utilised –

- For the payment of CGST

- For the payment of IGST

(iii) Lastly credit of SGST will be utilised –

- For the payment of SGST

- For the payment of IGST

(iii) Lastly credit of UTGST will be utilised –

- For the payment of UTGST

- For the payment of IGST

Deficiencies in Old System of Taxation

- (i) Multiple taxes – Now one TAX one Notices

(ii) Multiple compliances – Now all compliances at one place.

- (iii) Cascading effect – Now cascading effects Removed to the extent.

- (iv) Double Taxation – Now double Taxation Removed to the extent.

- (vi) Now No Evasion of TAXES to the Extent which leading to Increment in

- Moreover due to Introduction of GST there will be a major Boost to “Make in

GST NETORK (GSTN)

- GSTN is a company Registered under section 8 of Companies Act, 2013 i.e. A

- Both the Govt. provide funding to GSTN.

- GSTN provide GST portal service to Govt. and Tax Payers.

- Facilities offered by GSTN/GST Portal are as follows—

* Registration, filing of Return, Distribution of IGST Between CG & SG/UT,

For Introduction of GST in INDIA, lots of changes were required in constitution

 ARTICLE No. : 246A

 ARTICLE No.: 269A

 ARTICLE No.: 366

* GST means A Tax as Goods/services.

(Excluding Tax on Alcoholic Liquor a human consumption)

* Goods – Any kind of moveable property will be called as Goods.

* Service – Anything other than goods will be treated as service.

* All International Transaction will also be called as Inter-State transaction.

 ARTICLE No.: 279A: GST COUNCIL

2. Such matter is discussed in GST COUNCIL.

4. After that a formal notification is issued for the same.

5. Now the change will be effective for industry and government.

Actionable claim means CONTIGENT assets.