Organized Sector

Unorganized Sector paralle economy

Objectives of GST

a) To consolidate plethora of taxes

b) To bring more enterprises especially those in the unorg

In taxation an important aspect is Incidence of Tax

Income Tax Is all the money that comes in

Loans Liability
Salary Dividends Interest Pro

The taxable event in case of Income Tax is earni

Taxable Event in respect of Taxes in the old regime

a) Excise Duty
b) Sales Tax/ Vat
c) Service Tax
d) Custom Duty
Factory Thane
Excise
Warehouse Nasik VAT/ Sales Tax
 Goods were cleared for Home Consumption
Bill of Entry

GST is also applicable to imports. The GST that is payab

Custom Duty or the import duty

After having examined & ascertained that the taxable e

we need to classify for the applicability of GST whether
or Services

Tax Evasion is a Crime but Tax Planning is not a crime

When there is a supply

there have to be two persons
a) The person who supplies the Goods & Services
b) The person who receives the goods and sevices

Goods do not include :

a) Immovable Property
b) Securities Shares/ Debentu
c) Money

A stock Broker facilates the transfer of Sh

relation to the transaction in Securities. W

Receipent of Goods & Services is the person

a) In case there is a consideration involved in supply the perso

b) In case of a situtation where there is no consideration of su
Taxes are charged in two manners
a) Fixed Rate Volume or Qty
b) Ad Valorem rates expressed in perc

There are situations under GST wherein even if there is no co

Distinct Persons Company AB Ltd

Maharashtra Have a factory in

Gujarat There is a warehouse in

Madhya Pradesh There is a warehouse in

This company takes a registration of GST in Mumbai ie

For every state there is a requirement of a separate re

Distinct Person

The factory in Thane send goods of Rs 10,00,000 to the

transfer of goods within the two units of the same com

This is the distinction between Income Tax and GST

In Income Tax this company will have only one PAN bu

taken and each separate registration will be called disti

When there is a transfer of goods and services betwee

under the same PAN there will be no consideratration.
 Ans In case of inter company transfer betwee

Would the situation be different if the factory in

Schedule of sessions

Start 10:00 AM
Ist Break 11.30 am 15 mts
Lunch Break 1:00 PM 1 hour
3 rd break 3.30 pm 15 mts
Close 5:00 PM

a) What is the taxable event in case of GST

b) What do you mean by the term Distinct Person

c) What are the two persons involved in the transaction that get

d) What do you mean by the term Ad Valrorem in context of Du

e) What is the GST that is payable at the time of import of goods

into the country

f) Is there any GST payable on sale of Debentures

Since debentures are securities they do not fall within

Summing up for
a) A person who is liable to pay GST is required to have separate
registrations may be taken in the same state.
In case a Taxable person has more than one business verticle
each such verticle
b) Each registraion is called Distinct Person
c) There could transfer of goods and services from one distinct p
d) Since the corporate entity of the two disticnt persons is the sa
transfer of goods between the two distinct persons
e) In the normal course since this transaction does not involve a
f) Schedule I of CGST Act provides for transactions or situatiuon
will be considered vto be asupply
g) As per a specific entry in schedule 1 any transfer of goods or p
is considered to be a supply
Conclusion : in view of the above the transfer of goods & services b
h) The distinct who is receiving the goods would be the Receipe

AB Ltd is the holding company of CD Pvt Ltd.

Since these are two separate corporate bodies having differen
they will have separate Corporate Identification Numbers ( CI
Thus the two companies are separate Legal Entities

CD Pvt Ltd has a unit in Thane and AB Ltd has a unit in Pune

CDPvt Ltd supplies goods tp AB Ltd

Question:
Would GST be applicable on this transaction

Summing Up

a) Taxable Event Supply

 b) Parties Involved Suplier
& Receeipent
c) Who is liable
to pay GST Taxable Person

d) Taxable Territory Only if the supply is made in a

e) Place of Supply

Taxability of Supply
f) Time of Supply

a) Supply will be taxable if the supply has been made in the Taxa
b) Taxable Territory is whole of India
c) In case both the receipent and Supplier are outside Ind
d) The challenge is when the one person is based in India and th
Examples : Import and Export of Goods and Services
Place of Supply
e) Point of Taxation or time of Tax
f) Input Tax Credit ITC Value Added Tax
A contract is considered to be a continous contract if the exec

Software Deelopment Contract

Payments will be scattered over the period of executio

milestone payments

Value of Contract 100 cr

Ist Stage 10 cr
 AGENDA FOR TMM

a) Concept of Supply
b) Time of Supply
c) Place of Supply
 10000 1 10000 10000
e economy 10 1000 10000

Prachi Suvarna 704548850

those in the unorganized sector within the tax net.

idence of Tax

ney that comes into your bank account subject to Income Tax
Liability No Tax
ends Interest Profits Tax

come Tax is earning of income

Deeming Provisions
Gift

he old regime

Manufacture of Goods removal of goods

Sale Transfer of ownership
Provision of Services
Import of Goods into India

Taxable Event or the Incidence had to be

VAT/ Sales Tax Customer
 What was the redefinition
In case of GST the taxable Event is Suppl

GST that is payable at the time of import is the IGST. This is over and above the

that the taxable event has taken place by virtue of a particular transaction
ty of GST whether the item/ activity involved would be classified as Goods

ng is not a crime

s & Services Supplier of Goods & Services

s and sevices Receiver of Goods & Services

Sale of Land is a financial Transaction

Shares/ Debentures/ Bonds

the transfer of Shares. The stock broker charges brokerage for his services in
on in Securities. Would GST be applicable on brokerage

n supply the person who is responsible for making payment will be the receipent
onsideration of supply the person who receives goods will be the receipent of goo
me or Qty Rs 200 per kg Custom Duty
expressed in percentage 18% GST rates are Ad Valorem

n if there is no consideration GST becomes payable on Notional Value

any AB Ltd

a factory in Thane The registered office of this company is in Mum

is a warehouse in Ahemdabad
is a warehouse in Bhopal

GST in Mumbai ie at its registered office

t of a separate registration because in each the respective unit is called a

s 10,00,000 to the warehouse which is there in Ahemdabad. Since it is a case of

s of the same company there would be no consideration

e Tax and GST

only one PAN but in case of GST for every state separate registration has to be
will be called distinct person and each distinct person would be filling its own retu

d services between two distinct persons within the same company ie

consideratration. Would there be in implication of GST on such transfer
y transfer between two states igst becomes appllicable

nt if the factory in Thane transfers the goods to its warehouse which is situated in

Duration of Program 60 hrs

No of days 10
Weekends 5

SUPPLY OF GOODS AND SERVICES

Registration in different states by the same PAN Holder

ansaction that gets under levy of GST called Supplier and Receipent of
Goods & Services

m in context of Duties & Taxes Tax or duty expressed as a percen

of Value

of import of goods IGST

do not fall within the ambit of Goods hence the transaction of sale will not attract
d to have separate registration in each state in which it is operating. In certain case
Sec 25(1) under the same PAN
business verticle in the same state separate registrations can be taken for

rom one distinct person to another distinct person

t persons is the same there will be no consideration in respect of
persons
does not involve any consideration there should be no implication of GST
tions or situatiuons when even if the transfer is done without consideration it

nsfer of goods or provision of services between two distinctv persons

oods & services between distinct persons will attract GST on notional value
d be the Receipent of Goods in view of the definition of Receipent in CGST Act

ies having different registrations under under Companies Act

tion Numbers ( CIN)
Entities

s a unit in Pune

AB Ltd has got a subsidiary in Singapore which is imcorporate

as per the laws of Singapore ( WOS)
It supplies certain goods to another company in Singapore
Will the Singapore Subsidiary of Indian Company be liable to
GST on this supply in India

Study
To understand what constitutes Supply
 To understand who is a supplier and who is the receipent

To understand who is a taxable person

upply is made in a taxable territory will it be liable to charge ofvGST

Continous Contract

made in the Taxable Territory because the incidence of Tax is Supply

er are outside India then generally GST will not be applicable

ed in India and the second person is based in another jurisdiction
Services

Value Added Taxes

ontract if the execution thereof extends beyond 3 months

period of execution of the contract

Stages of Deliverables 10
Milestones 10
 Suvarna 7045488505

Goods & Service Tax

GST
The Three taxes have
been subsumed

e Incidence had to be redefined

xable Event is Supply of Goods & Services

er and above the

transaction
ed as Goods

ncial Transaction

his services in

ll be the receipent
he receipent of goods
 Ad Valorem

al Value

company is in Mumbai

is called a

nce it is a case of

tration has to be
e filling its own return

h transfer
which is situated in Pune

Holder

er and Receipent of
& Services

xpressed as a percentage

sale will not attract GST

ating. In certain cases multiple

be taken for

on of GST
onsideration it

otional value
pent in CGST Act

which is imcorporated

pany in Singapore
ompany be liable to pay
receipent
Questions

1 What is the importance of the term Supply in GST

Ans The taxable event in GST is Supply

2 What will be the implication of GST when a company transfer

No Gst

3 Can there be a situation when a company transfers goods fro

GST would become applicable

In case the units have separate registrations under GST

be applicable. Separate units having different verticle w
in the same state

4 Elaborate what is the applicability of GST on transactions rela

your answer

Since securities are excluded from the definition

5 What will be the applicability of GST on sale of land. Give reas

Immovable properties are outside the ambit of G

6 What do you understand by the term Taxable Territory

Whole of India

7 What is the implication of GST on import of Goods

 As per IGST Act import of goods into India is considered

8 What is the importance of the term Place of Supply in contex

GST would be levied only if place of supply is within tax

9 What do u understand by the term Continous Contract

Software Development Contracts / Infrastructure Cont

10 What is the importance of time of supply in GST

It determine the point of time when gst becomes paya

Agreement of Partnership
Contract for Joint Ventures
Agreement for sale of immovable property

GOODS
Include Movable Property
Exclude Immovable Property
Exclude Securities
Exclude Money
Includes Actionable Claims subject to specific inclusion
Includes Crop which is severed from ground
Excludes Alcohol for human consumption
Excludes Specified Petroleum products which comprise o

Sec 9 cgst act is the charging section

a) The transaction should be in relation to goods and services w

b) Does the transaction amount to supply
c) Does the specific goods or sevices fall within the ambit of any
d) After being satified that GST is applicable now u have to go on
rate of gst that is applicable to the relevant supply

Levy of IGST on Imports

Imports come under Inter State Supply hence IG

FOB Value and CIF Value

Custom will charged on CIF Value

usd
FOB Value 10000 75
Freight
Insurance
CIF

CIF 900000
Rate of Custom Duty 20% 180000
1080000
Rate of IGST 18% 194400
1274400

Levy of GST

a) GST would be levied if it is a supply of goods and services on w

b) If the supply is within the state it will a case of Intra State sup
CGST + SGST = TOTAL RATE OF GST
 50% 50%
c) If the supply is within two states then the supply is termed as
Only one rate will be charged
IGST = CGST + SGST

d) By vitue of a specific provision in IGST Act import of goods an

to be inter state supplies

e) As per the provisio to Sec 5(1) of IGST Act the IGST on imports

f) Custom is always charged on CIF Value of Goods irrespective

freight and insurance is paid in foreign currency or it is paid in

g) On the cif value first the rate of custom duty is applied to det
The rate of custom duty on the goods being imported will be

h) The custom duty is added to the cif value and on the total am

When the importer grts the goods in India he appoints a Custom Ho

The CHA files a document with customs called Bill of Entry for
Before clearence of goods from customs the importer pays bo

LUNCH TIME
Supplies to and from units in Special Economic Zones will be treated
IGST would be applicable. This is as per the provisions of IGST Act

Questions
1 Where are the provisions contained stating that
It is provided in IGST Act
 2 Mr A has imported some goods by sea into India
custom office at the port and will pay IGST to GS
Is he correct

3 The rate of IGST on a particular product is 12%.

with in the same state CGST will be 7% and SGST
The rate of CGST and SGST w

4 Can the Govt bring alocohol for human consump

No the Act has to be ammen

5 Can the Govt bring Petrol into the ambit of GST

Govt can do it cause of pow

6 The fob value of goods imported is 1,00,000 INR. Freigh

23,760

7 What do you mean by the term Cascading effect

Tax on Tax

8 What is the document that is filled with custom

Bill of Entry

9 Since GST is not applicable on Petrol what are the indir

VAT & Excise Duty

10 Which govt chrages VAT is it the central or state

State Govt
Scope of Supply

The essence of GST is Supply of Goods & Service

Supply includes are forms of supply of goods and services suc

a) Sale
b) Transfer
c) Barter
d) Exchange
e) Liscence
f) Rental
g) Lease
h) Disposal

made or agreed to ne made for

a) Furtherance of Business
b) Consideration

We had discussed that there could be situations whereby the

come within the ambit of gst

Tea Break will be ba

You appoint an Interior decorator to do interiors of your offic

material, gets his own labour and you give him a lump sum co

Material VAT
Service Service Tax
 This type of contract is called works contract

Schedule II In respect of enteries which are th

Schedule III The enteries contained in schedule

even though it involves supply of g

Sum it up

a) Goods & Services supplied for a consideration and for further

b) Import of Services for a consideration even if not for furthere
c) In respect of enteries in Schedule 1 it will be considered to be
d) In respect of entries in Schedule II it will always be considered
in terms of narratives mentioned there
e) In respect of entries in Schedule III it will neither be considere
mpany transfers goods from one unit to another unit in the same state

sfers goods from one unit to another unit within the same state

tions under GST they would be considered as Distinct persons hence GST would
fferent verticle would require separate registration even if the two units are

ansactions relating to sale of shares Give reasons in support of

m the definition of goods GST would not be applicable

land. Give reasons for your answer

e the ambit of GST as only movable goods are covered in the definition of Goods

Territory
dia is considered to be interstate supply

upply in context of applicability of GST

ply is within taxable territory

Contract
astructure Contracts

becomes payable

Renting of Properties are service hence GST is applica

But as per exemption notification renting of properti
which are used for residential services are exmpt
ecific inclusions
The securities are defined in Section 2(h) of Se
Contracs Regulation Act 1956
hich comprise of Crude/ HSD/ Petrol/ Natural Gas

and services which by the definition of goods and services under CGST Act
he ambit of any exemption notification
u have to go on schedule of rates to ascertain what is the

Supply hence IGST is payable

FOB is the price that is charged by the supplier for bringing the g
port of shipment and clearing it from customs
Add Freight
Add Insurance
CIF Cost Insurance and Freight

INR
750000
100000 Freight was paid in INR
50000
900000

Cascading effect

nd services on which gst is applicable as per GST Laws

Intra State supply wherein both CGST and SGST would be charged
ply is termed as Interstate. In this case IGST would become applicable
Rate of GST 18%
Intra State CGST 9% SGST 9%
Inter State IGST 18%
ort of goods and services come within the ambit of IGST as they are considered

IGST on imports is to be paid along with Custom Duty at the time of clearence of g

ds irrespective of the fact whether the consideration of imports and/or

cy or it is paid in INR

applied to determine the amount of Custom Duty

mported will be available in Custom Tarriff Act

on the total amount so determined the igst would be paid at applicable rates

ts a Custom House Agent to clear the goods

Bill of Entry for Home Consumption
mporter pays both the custom duty and igst as applicable on the said goods

Will be back at 2.15 pm

will be treated as Inter State Supplies accordingly on such transactions
s of IGST Act

ned stating that import of goods is inter state supply

by sea into India. His contention is that he will pay custom duty at the
l pay IGST to GST authorities when goods will reach his factory
No it is to be paid at custom point

roduct is 12%. Your accountant tells you that if you supply the same goods
be 7% and SGST will be 5%. Is this possible
CGST and SGST will be the same

human consumption within the ambit of GST by issuing a notification

as to be ammended

e ambit of GST by issuing a notification

it cause of powers given to the govt

,000 INR. Freight is 10000 and Insurance is 10000. The rate of custom duty is 10%
CIF
Custom Duty
Cascading effect of taxes
IGST 18%

ed with custom deptt for clearing the imported goods called

for Home Consumption

hat are the indirect taxes that are being charged by the govt on petrol

or state Advance Authorization

Goods & Services

nd services such as

Exception to this rule

Import of Services whether or not made for furtherance of
Activities contained in Schedule 1 to CGST Act would be con
as supply even if made without consideration. GST would be
ns whereby the goods or survices supplied without consideration would

Break will be back at 15.50

ors of your office. You give him the contract whereby he gets his own
m a lump sum consideration

Rate Contract
es which are there in this Schedule the goods an

ned in schedule III would not be considered as supply

lves supply of goods and services which come within the ambit of the respective d

and for furtherence of Business would attract GST

not for furtherence of Business would be under the ambit of GST
onsidered to be a supply even if there no consideration
s be considered as supply of goods or supply of services

er be considered as Supply hence GST will not be applicable

me state

hence GST would

wo units are

in support of

efinition of Goods
 hence GST is applicable
n renting of properties
vices are exmpt

in Section 2(h) of Securities

er CGST Act
er for bringing the goods to the
y are considered

me of clearence of goods

s and/or

pplicable rates

e said goods

nsactions
same goods

custom duty is 10%

120000
12000 10%
132000
23760
e for furtherance of Business would be under GST
ST Act would be considered
ration. GST would be applicable onnotional value
on would
t of the respective definition
 QUESTIONS
Check Your Understand

1 How many schedules are there in CGST Act 3

2 What is Schedule 1 about Activities without consi

3 What is schedule 2 about Activites in schedule are

4 What is schedule 3 about Netther supply of goods

5 Mr is an Architect and he has provided some designs to a hospital. He has no

value of service No

6 You are taking classes on nutretion from some based in UK. You are not payin

7 The GST officer has issued a notice on you asking you to explain why you hav

8 Can there be a situation whereby a company has done inter unit transfer of g
 9 AB Ltd has their factory in Maharashtra. It has imported some goods which a
on these goods as both the port of clearence and their factory are in Mahara
Imports are always consdered as Interstate Supply
10 You have a Rolls Royce which is used for personal purposes. You sell it for Rs
What will be your reply to this notice scn

11 Explain the concept of taxable territory

12 Is industrial alcohol within the ambit of gst

13 Is LPG under the ambit of GST since natural gas is excluded from gst

14 You have secured goods from a unit in SEZ. Which GST would be applicable

Import of Services

a) Import of Services for a consideration irrespective of the fact whethe

This is an exception to the rule that supply would be taxable only if m

b) Import of Services when made without consideration from a related p

be a supply hence would come under ambit of GST

Directors

1) Whole time Directors those who are in employment o

2) Non Executive Directors those who are not in the emplo
3) Independent Directors They can never be in the emplo
4) Nominee Directors Appointed by Financial Instituti

GST & Income tax

Salary paid to a director is taxableunder Income Tax under the head I
TDS is deducted for salary as per the applicable rates and what is app

If he is treated as an employee for his employment services under th

or the salary paid to an employee would be covered by exemtion und

For any amount payable to Director ( NED) like sitting fee etc gst wou
Company of which he holds Directorship

Payments to Directors

a) There is no doubt that payments other than salary paid to Dir

b) The GST is not payable by the Directors but by the Company u
c) Threshold limit of Rs 20 lacs will not be applicable in this case
d) As per two Advance Rulings Salary paid to Whole Time Directo
e) This is a controversial ruling as WTD/ Executive Directors are
paid to Directors is taxable as Income from Salaries under Inc
f) Advance Rulings are applicable only to the applicant and does
This would be subject matter of appeal and we will ha

There could be a possiblity that aperson is a Non Executive Director o

His taxable turnover from various services exceeds Rs 20 lacs and he
For Director Services still the Company will be liable to pay GST under

Multiple Registrations in the same state

a) Sec 25(2) provides that multiple registrations can be taken by

prescribed conditions
 b) The conditions for multiple registrations in the same state are

c) Rule 11 states that multiple registration may be given in case

d) Supplies from one registration to another registration in the s

e) If one business verticle comes outside the ambit of Compositi

Holding Company and subsidiary are not covered by th

applicable to multiple verticles under the same PAN

ITC

a) Hotels PROFITS 100000

b) Ciggerates MODERATE PROFITS 200000
c) Foostuff BEP

Distinct PersonGujarat ITC credit

Distinct Person Maharashtra Liabilty

Value Added Tax 18%

Cost GST
Supplier Manufacturer 10000 1800

Receiver Distributor 10000 1800

Value Addition 1000
Supplier SP 11000 1980

Dealer 11000 1980

Vaue Addition 2000
Consumer 13000 2340
 Consumer sells 15000

The process of taking the credit of input tax and adjusting it against t

Excluding GSt Sales & Services

GST

Supplies under RCM

Gst under RCM

Aggregate Turnover
A) Inclusions
a) Value of all taxable supplies
Interstate
Intra state
b) Exempt Supplies
c) Exports
d) Inter State supplies of the person having same PAN ( Distinct Person)
f) Supplies of Alcohol for Human Consumption

B) Exclusions
a) Taxable supplies for the purpose of liability gst will also include purch
Reverse Charge Mechanism T
b) Any GST which is a part of the invoice

Grey Area Whether supplies

QUESTIONS
Check Your Understanding

Activities without consideration to be treated as Supplies

Activites in schedule are classified as Goods or Services supply

Netther supply of goods nor supply of services

o a hospital. He has not charged any fee for this service. Will he be liable to pay GST on notio

n UK. You are not paying any fee for that. Wud you be liable to pay GST

to explain why you have not paid gst on salaries paid to employees. What will be your reply

e inter unit transfer of goods and it becomes liable to pay gst on such transfer
 Distinct Persons
ed some goods which are cleared at JNPT. Their contention is that they ve to pay cgst and sgs
r factory are in Maharasthra. Give your opinion.
as Interstate Supply IGST becomes applicable
poses. You sell it for Rs 25 lacs. The GST officer put a claim on you for payment of GST
Supply is not in furtherence of Business

uded from gst

T would be applicable

tive of the fact whether made for furtherence of Business or not will be a supply
uld be taxable only if made for furherence of Business Sec 7(1)

eration from a related party or your own establishment for furtherence of business would
Schedule 1

ho are in employment of the company Salary / Sitting Fees for partici

ho are not in the employment of the company Sitting Fees
n never be in the employment of Company Sitting Fees
ed by Financial Institutions/ Banks
me Tax under the head Income from Salaries
e rates and what is applicable to professional charges

ment services under the income tax act then in relation to gst can the treatment be different
vered by exemtion under Schedule 3

e sitting fee etc gst would be applicable and will be paid under Reverse Mechanism by the

than salary paid to Directors would be under the ambit of GST

s but by the Company under Reverse Charge Mechanism
applicable in this case
d to Whole Time Director has been brought under GST
xecutive Directors are defined as employees under Companies Act. Also the salary
rom Salaries under Income Tax Act. TDS is deducted Salaries under Income Tax Act
the applicant and does not have general application
al and we will ha have wait for final decision

on Executive Director of a Company & he is also providing Consultancy Services to various cli
eeds Rs 20 lacs and he has taken GSTN
liable to pay GST under RCM

ations can be taken by a entity if it has multiple place of business in the same state subject to
ns in the same state are contained in Rule 11 of CGST Rules

n may be given in case the tax payer has multiple business places in the same state

her registration in the same state will be subject to GST

the ambit of Composition Scheme all Business Verticle would come out of Composition

ry are not covered by the above provision as this provision is only

under the same PAN

Credit
Debit Strategic Business Units SBU

TC credit 500000 Parment of Balance of Rs 100000

600000

Invoice Value Gst Deposit What all compromises in Value Addition

11800
1800 Additional Cost
11800 Profit

12980 180 What is the amount that will be deposited by

the distributor to Govt in respect of Gst
12980
360
15340 2340
nd adjusting it against the tax on supply is called Input Tax Credit

10 cr 20%
2 CR

1 CR 2.20 cr
20 lacs

PAN ( Distinct Person)

will also include purchases/inputs/ procurements made on which GST is payable under
ble to pay GST on notional

yes

hat will be your reply Schedule 3

hence no gst
 Distinct Persons
y ve to pay cgst and sgst

payment of GST

be a supply

e of business would

/ Sitting Fees for participating inmeetings

Comissions
treatment be different

Mechanism by the

so the salary
come Tax Act

y Services to various clients

he same state subject to fulfilling

he same state

ut of Composition

Rs 100000

in Value Addition

hat will be deposited by

t in respect of Gst
T is payable under
 CHECK YOUR KNOWLED
QUESTIONS

1 AB Ltd manufactures two type of goods as follows:

Particulars Sales
Ex GST

A 1500000
B 2500000
4000000
What will be the aggregate turnover of AB Ltd for GST

2 AB Ltd has raised total invoices of Rs 1,20,00,000 in a financia

the Aggregate turnover for the purpose of GST
 10169491.53

3 A is the director of AB Ltd. He gets Rs 25,00,000 by way of co

Does it mean that this transaction will not attact any gst
RCM

4 You buy a pack of sweets as diwali gift. It also contains dry fru

Mixed Supply

5 What do you understand by the term Works Contract

Interior design of office

6 would you classify works contract as goods or service

Schedule II classifies goods and services. It specifically

7 The supply of food in a resturant would be classified as goods

Supply of service

8 Is gst applicable on CNG

9 AB Ltd has a branch office in USA. It gets some drawings from

These designs are used by it for providing designing service to

10 Exports are zero rated supplies. Would the same be included

11 Are supplies which are inter unit transfer from one state to th

Exempt goods which are in the list of exemptions or a

Exports Zero rated

Act
Rules
Notifications/ Circulars
Appeals

AB Enterprises Principal Place of Busine

Contract

1) AB E Has no place of business in Kartnatka a

SCL has provided them with a tempora
ABE cannot provide any documents for
Question : In such situation is it mandatory fo
that are required

Advance Ruling : In this case since ABE only ha

them to take separate re
However, if they desire t
but they have to provide

Question If They does not take a s

of GST in the following c

a) ABE purchses goods from

 their site in Karnataka
It will be considered to b

b) ABE purchases goods fro

the goods to their site in

A is the Director of AB Ltd . A's aggregate turn

registration. As per RCM directors payments a
have to pay gst under RCM as the director's ag
Is the contention correct

Compulsary Registration

a) Interstate supply of goods

b) Person Liable to pay tax under Reverse Charge Mechanism
c) Person liable to deduct TDS
d) Casual Taxable Persons
e) Input Service Distributor

Directors Services are under RCM

Company has paid Rs 100000 under RCM in respect of
The Director has incurred some expenditure in provid
Will the Director ask the company to take credit of thi

If I am an unregistered dealer and I pay gst on my inpu

Thus I am a unregistered person the GST on the inputs
But if I am a registered person I will be collecting gst o

Renting of Immovable Property

a As per Schedule 2 renting of immovable propert is a supply of service
b) As per entry no 42 in the list of exemptions rent on immovable prope
c) So the inference from the above is the rent on Commercial Property
What is the position of application of GST on sale of properties be it r

Can there be a situation that in some case agreement relating to purc

Conclusion

a) Immovable properties are not under GST as they do not come

b) Renting of immovable properties is a service and is subject to
c) The applicability of GST is different if the immovable property
i) The property is under construction
ii) Agreement has been entered into before completion
Evidence of completion is the Completion Certificate i
Where property is occup
The reason for under construction property being clas
iii) Schedule II specifically states that if the entire conside
then it will not be considered to be service

Entire consideration
received after completion
Certificate

Not a service as per Schedule II

Hence it will be outside the ambit of GST

Mr A entered into an aggreement with a Builder to purchase

Date of Agreement 4/1/2019

Total Consideration Rs 1 cr
Date of Completion of 3/31/2020
Property
Amount paid upto 31/3/20 50 lacs
Amount paid after 31/3/20 50 lacs

However in the above example the no GST would have

agreement for purchase after 31/3/20 because the en

That is the reason some builders advertise that the co

K YOUR KNOWLEDGE

follows:

Applicability of GST

APPLICABLE
Exempt

er of AB Ltd for GST

00,000 in a financial year . GST has been included in the invoices @ 18%. What will be
00,000 by way of commission and sitting fees. The rate of GST is 18%. How much GST will he
attact any gst

lso contains dry fruits. What will this supply be called

ks Contract

Goods Services Building Contracts

Infrastructure
s or service

vices. It specifically states that works contract will be supply of service

classified as goods or services

ome drawings from its branch office but does not pay any consideration for it.
designing service to a client. Will gst be applicable

e same be included in computation of aggregate tuenover

rom one state to there included in computation of aggregate turnover

of exemptions or attarct nil rate of tax No benefit of ITC on supply of e

Refund of input tax is available

ipal Place of Business : Rajasthan

Karnatka SCL

siness in Kartnatka as they are executing the job at the site of SCL.
em with a temporary site office at the location.
any documents for seeking registration in Karnataka
n is it mandatory for ABE to take registraion in Karnatka. If so, what are the documents

se since ABE only has a temporary site office in Karnataka, it is not mandatory for
to take separate registration in Karnatka
ever, if they desire to take registration in Karnataka, they can do so
hey have to provide adequate documentation

ey does not take a separate registration in Karnataka what will be the applicability
T in the following cases

purchses goods from Rajasthan and asks the suppliers to supply the goods to
 site in Karnataka
l be considered to be Intra State supply and CGST and SGST will be applicable

purchases goods from Karnatka ans asks the suppliers in Karnatka to supply
oods to their site in Karnataka. In case IGST would be applicable

. A's aggregate turnover from all sources is Rs 10 lacs. He has not taken voluntary
rectors payments are under RCM. The company's contention that they do not
as the director's aggregate turnover is less than the threshold limit

Mantadory Regirtation Voluntary Registration

Exceeding threhold limits
Registration Not Required
arge Mechanism
Providing wholly exempt servic

r RCM in respect of services provided by Director

penditure in providing this sevice and he has paid Rs 50,000 as GST on the Exp
to take credit of this 50k

I pay gst on my inputs can I get a refund of it

e GST on the inputs becomes my expenditure
l be collecting gst on output services will be able to take credit

s a supply of service
n immovable property for residential purposes is an exempt service
mmercial Property would be under the ambit of GST
 of properties be it residential or commercial

ment relating to purchase of property come within the ambit of GST

as they do not come within the definition of Goods

ce and is subject to GST as given above
mmovable property is under Construction

before completion of the construction of the property

pletion Certificate issued by the Competent Authority which generally is the Municipal Corpo
re property is occupied after getting Occupation Certificate
property being classified as Service is because it has been so classified in Schedule II
f the entire consideration is received after the Completion Certificate or Occupany
e service

IMMOVABLE PROPERTY

Part Consideration received

before completion certificate or Occupancy

Service as per Schedule II

GST applicable

uilder to purchase under construction property

This Agreement will be covered by Schedule II

GST will be applicable on the entire consideration of Rs 1 cr
irrespective of the fact that 50% of consideration was paid
before completion and 50% was paid after completion
 no GST would have been applicable if Mr A would have entered into an
/20 because the entire consideration has been after getting completion certficate

dvertise that the completion certificate hence buyers will not have to pay GST
hat will be
much GST will he pay
TC on supply of exemted goods / services

documents
stration

ot Required

lly exempt services

 Municipal Corporation

hedule II
1 A entered into an Agreement to buy a property which is under construction from a Builder.
Details of the Agreement are as follows:
a Date of Agreement 4/1/2019
b Date of Completion 3/31/2020
c Total Consideration Rs 50 lacs
d Amount paid upto 30/3/20 Rs 5 lacs
e Amount to be paid Rs 45 lacs
after 31/3/20

The contention of Mr A is that he is not liable to pay any GST as the amount received before completion is less that 25% of total consideration
What are your views on this
GST is to be paid on the entire connsideration of Rs 50 lacs

2 Is a simple declartion by a builder sufficient that a building is complete sufficient. What are your views on this
Comptent Authority an Occupation Certificate or a completion certificate is required

3 Your GST Consultant tell you that Rent in respect of all types of immovable properties are subject to GST. Give your views
Rentals on property used for residence is exempt

4 Mr Mohan is a Director of a Company AB Ltd. He receives sitting fees and comission from the said Company to the of Rs 10 lacs,
His income from Consultancy Services is Rs 15 lacs. According to him his Aggregate Turnover for the purpose of GST should be taken
as Rs 15 lacs only. His contention is that the amount received against services provided to the company are under Reverse Charge
Mechanism. He draws your attention to the definition of Aggregate turnover in CGST Act which says that amount under RCM is to be
excluded from calculating Aggregate Turnover. What are your views on this

The amount of Rs 10 lacs will not taken in Aggregate of AB Ltd even though it paid GST under RCM
As regards director it will be taken in aggregate turnover

5 Which is the Services which though provided for a consideration but not in furtherence of business attracts GST
Import of Service for Consideration even if not for furtherence of Business

6 What is the principle to be followed for determing the rate of GST in case of Composite Supplies
The rate applicable on the Principal supply will be applicable on the whole supply

7 What is the principle to be followed for determing the rate of GST in case of Mixed Supplies
Highest rate in respect any product in the mixed supply
 8 AB Ltd has units in Ahemdabad and Chennai. Ahemdabad unit is manufacturing Air Conditioners and other cooling machines
The Chennai unit is manufacturing Chemicals. The turnover of Ahemdabad is Rs 45 lacs and that of Chennai is Rs 12.50 lacs.
AB Ltd says it does not require registration in Tamil Nadu on the following grounds
a) The individual turnover of TN units is less than the threshold limit
b) The two units are in different Business Verticles
What are your views on this
Aggregate turnover is to be seen on PAN basis

9 Suppose in the above situation the Gujarat unit and TN unit are under different companies and the TN Company is WOS of Gujarat Company
In this case what are your views

In this case the registration in TN is not mandatory. However the TN unit may take Voluntaary Registration

10 AB Enterprises is based in Punjab. It appoints an agent in Amritsar to sell its goods. Goos of Rs 25 lacs are transferred to the said agent but no consideration
is charged. Would GST be applicable on this transaction. Give reasons to support your answer
It is covered by Schedule 1 hence even if goods are supplied without consideration GST would be applicable

11 Mobil Oil is a petroleum product. Since petroleum products are outside the ambit of GST in my opinion mobil oil is outside the scope of GST
Do you endorse my opinion
Mobil oil is not covered by the list of petroleum products which as of now are outside the ambit of GST

12 MR A was working with a company and he recently retired. While he was in the employment of the Company he was given a Laptop by
the Company. As a matter gratitute the company asked him to retain the lap and did not charge anything from him. The company
had claimed Input Tax Credit in the period in which it had purchased the said laptop. Will the company have to pay GST now.

Permanent Transfer of Business assets without consideration. Hence GST will be applicable

13 Supplies to and from SEZ unit will attract which GST.

IGST

14 Mr Manmohan provides certain services to AB Ltd. AB Ltd is liable to pay GST under Reverse Charge Mechanism on such services.
However the aggregate turnover of AB Ltd is less than Rs 20 lacs. What will be the position in this case
Since AB Ltd is availaling services which are under RCM registration is mandatory
 15 Mr Manmohan, in the above case is a Registered Person. He tells the company pay GST under RCM as he would be charging GST
and would be raising a tax invoice. What are your views on this.

INCLUSIONS and Exclusions from Aggregate Turnover in view of Anil Kumar Aggarwals AAR of Karnataka Bench

a) Interest on Deposits/ Advances/ Debentures/ Partners Capital wil be included in computation of Aggregate turnover of the person
receiving the said interest

b) Salary received by a Working Partner of the share of Profit from a Partnership Firm is not to be included in the Aggregate Turnover
of the Partner

c) Receipts by Directors of a Company

i. Salary received by an Executive Director is not a supply as it is covered by Sechule III. Hence neither GST would be applicable
nor will this be taken as a part of Aggregate Turnover of the Director
ii Receipts by Non excecutive Directors and Executive Directors which are not in the nature of Salary would be taxable and included
in the Aggregate Turnover of the Director.
iii. Even though the payments to Director are covered under RCM ie GST is paid by the Company, this amount will be included
in the Aggregate Turnover of the Director.

d) Salary to an employee
In view of above it is clear that salary paid to employee is not to be taken in computing his aggregate turnover

e) Rent on Commercial Premises is a taxable supply hence it will be included in the computation of Aggregate Turnover

f) Rentals on Residential Property is a supply of service but is an exempt service by virtue of a specific exemption Notification
Hence this is to be taken into account for the purpose of Computing Aggrgate Turnover.

h) Dividend in respect of shares and capital gain respect of dealing in securities will not be taken into consideration for the purpose
of Computing Aggregate Turnover

i) Amounts received on maturity of Life Insurance Policies are not to be into consideration for the purpose of Computing Aggregate Turnover

Exempted Supplies vs Schedule III

A) Exempted supplies are supplies under GST but the Govtt has given a specific relaxation or exemtion from GST. Hence all such supplies
 as a matter of Principle would be considered for computing Aggregate Turnover
B Items contained in Schedule III are not supplies ab initios hence by virtue of this Advance Ruling are not to be considered
for computation of Aggregate Turnover

Questions that remain open

a) What about Alcohol for human consumption
b) What about petroleum products that are outside the perview of GST

Forward Supply
When the supplier of goods and services are under an obligate to discharge the liability of GST
This is the normal mechanosm

Reverse Charge Mechanism

When instead of the supplier it is receiver of goods or services who becomes liable to discharge the laibility of GST to Govr

A supplies goods and sevices to B

Forward Charge Then GST under this transaction will be paid by A since he is the supplier
so A will raise tax invoice on B and irrespective of the fact whether B pay A or not
A will have to pay GST on this transction

Reverse Charge On this transaction it is not A but B who will be liable to discharge this liablity

Why Reverse Charge

Case Imports Supplier based in USA

Receiver based in India pass on the responsibilty of GST to Importer

Can the supplier and the receiver decide between themselves that whether a particular
transaction would be under Forward Charge or under Reverse Charge

No this is not possible as all transactions are covered under forward charge
However the Govt specifies which transaction would be under RCM , only such transactions wud be covered by RCM.
Also once the the Govt has specified that a particular transaction will be under RCM it will always be under RCM
unless it is brought under forward mechanism by the Govt

Step Plan for examining the applicability of GST

a) Ascertain whether the transaction amounts to supply or not within the ambit of GST because the taxable event
is supply. If it is not a supply then ab initio GST will not be applicable

b) Ascertain whether the supply has taken place in the taxable territory or not. For you have ascertain the same from
the provisions relating to Place of Supply in IGST Act. If the supply is in taxable territory GST would be applicable.
If not GST would not be applicable

c) Ascertain if the supply is under the list or notification of exemted supply of Goods or Services. If so GST will not be applicable

d) Look into the schedule of rates under GST to ascertain the applicable rate on the supply

e) Ascertain whether the trasaction is under Intra State or under Inter state Supply. Accordingly will be the applicabilty of GST

f) In case the transaction is covered by Schedule I ie supply is made without consideration but is chargeble to GST
then value has to be put on the supply as per the provisions contained in value of Supply

g) Ascertain whether the transaction in under Forward Mechanism or Reverse Charge Mechanism
Forward Mechanism Liability is of Supplier
RCM Liability is of Receipent

Supplies in case the Receipent is a Registered Person but the Supplier is an Unregistered Person

Sec 9(4)
Govt may issue Notification from time to time specifying the supplies of Goods and services from Unregistered Persons
to a class of RP wherein such supplies would be covered under RCM

In case of RCM a self invoice will have to be raised by the Receipent of service
E Commerce Operator will be discussed seperately

Break for 1 hr will be back at 2.30 pm

GTA Service

Definition of GTA
a) Transportation by Road and not by any other mode of transportation
b) The Agency should issue a Consignment Note

Both the conditions should be satisfied.The Consignment note may be given any name such as Bilty. As long as it meets the criterea
of Consignment Note the second condition would be satisfied

Consignment Note

It is an acknowledgement by the carrier that it is carrying goods on behalf of

the Consignor ( sender of Goods) Seller
For delivery to
Consignee ( Receiver of the Goods) Buyer

Description of Goods

Equivalent of this by other mode of transports

In the course of transportation of Goods from one country to another if the shipment is made by sea
what is document that is issued by the shipping line to the Consignor called Bill of Lading

What about transportation by Air Air Way Bill

What about courier Way Bill

What about transportation by Rail Railway Receipt ( RR)

Exemption in case transportion as per Exemption Notification
Tang
a) Transportation by road is exmpt except if said transportation is by Powder
i Goods Transport Agency Can Tang be classified as Juice
ii Courier
Foodstuff
b) Through Inland Waterway Chocolates

From the above it is clear that the services provided by GTA are subject to GST unless specifically exempted
by way of a notification

GTA Services under RCM Essential Condition

Supplied to
a) Factory under Factories Act GTA should not have opted to pay GST
b) Society under Societies Registration Act at the 12%
c) Coop Societies
d) Registered Person Thus in case GTA has opted to pay GST at the rate of 12%
e) Corporate Body the services provided by it will not be covered under RCM
f) Casual Taxable Person

Options under GST available to GTA

a) Opt to pay 5% as GST and do not avail input Tax Credit

b) Opt to pay 12% as GST and avail the benefit of Input Tax Credit

Once the GTA has exercised the option to go for 12% it will not be able to change it

Thus if the GTA Opts for 12% GST then it will not be covered under RCM
If GTA opts for 5% then it will come under RCM then the person who is making the payment of Transportation
Charges will be liable to pay GST

If the rate adopted is 5% but the receipent is not in the list given above the gst will be on Forward Mechansim

Is every transporter classified as GTA are some conditins have to be stafied for it to be classified as GTA
Intead of calling the document issued by the transporter the prescribed details relating to goods etc as Consignment Note
the transporter gives it some other local name. Will it meet the condition of GTA

There is an exemption notificatiion which provides exemption to transportation services. What are the basic conditions
Exemption is avalable except in case the transporter is GTA or it courier

On the basis of the above can we conclude that GTA services are within the ambit of GST

Now that the GTA services are under GST are there any exemption notifications that certain specific services of GTA are exempt from GST
Yes
a) relating to agriculture and other essential products/services
b) Generally services provided to Govt Deptts

Does GTA services attract single rate of GST or do they have option to choose a rate out of prescibed rates
Option to take either 5% or 12%

In case the GTA opts for the GST rate of 5% what are the restrictions
GTA will not be able to claim ITC

Does it mean that the GTA can claim ITC if it opts for the rate of 12%
Yes it will be able to claim the benefit of ITC

in respect of the above two rates is RCM applicable to both cases

RCM will be applicable only if the rate of 5% is opted

In case of RCM the gst will be paid by the person who pays freight
The person who has paid GST on GTA services-- will he get the benefit of ITC

Time of Supply Audit

Place of Supply Assessements
Invoices Advance Rulings
Job Work Appeals
Input Tax Credit Prosecutions
Input Service Distributor ISD Authorities
Refunds
Portal which will cover Returns and Due Dates
Procedure to be adopted for Exports Benefit for Services provided by GTA
Tranportation ( E Way Bill)
Composition Scheme Freight
TDS/TCS Loading/ Unloading
Value of Supply Repacking/ Security GTA is receving Transportation Charges
on which GST is applicable

Time of Supply Now to provide this service it may have to avail

input services on which GST
in respect of Goods Time of Supply determines the period in which the liability to pay GST arises
In respect of Services
Challenge is in Services Continous Contracts

Composie Service
Principle Service Transportation Freight Income Tax
Other Services Loading / Unloading Ancillary Services
Security Old rates Deductions
5% New Rate No deductions
Principal Supply Option 1 12% and do not avail ITC
Option 2 and avail ITC
1 Is interest on Inter Corporate Deposits included in the Aggregate Turnover of the Company
which has given the loan ( ICD)

Interest on ICD will be taken into consideration for computing Aggregate Turnover

2 Specify the essential conditions for a transporter to be classified as Goods Transport Agency ( GTS)
a) Road Transport
b) Issue Consignment Note

3 What is the rate of GST in respect of GTA services which are under Reverse Charge Mechanism
5%

4 A GTA has opted for a rate of 5% in respect of GST. It provides services to a receipent who is not covered under list of
entitites who are required to pay GST under RCM in respect of GTA services. So the GTA pays GST. Can he claim ITC.

on 5% gst rate ITC cannot be claimed

5 Are Dividends to be taken as a part of Aggregate Turnover

Dividends will not be taken into considered for determining Aggregate Turnover

6 What is the difference between exempted supplies and the transactions covered under Schedule III
Exempted supplies are but supplies but exempt from GST . However they have to be included in Aggregate Turnover
Transactions in Scg III are not supplies ab initio hence not to be taken AT

7 What is the limit upto which gift can be given by an employer to an employee in a financial year without
attracting GST
As per Sch 1 50000

8 Are Capital Gains included in calculating Aggregate Turnover for securities

Capital gains on securities is not to taken for the purpose of Aggregate Turnover as Advance Ruling

9 Is the Brokerage paid to a Stock Broker subject to GST

 Yes

10 Your GST consultants tells you that in respect of Maturity proceeds of Life Insurance policy anything received over
and above the sum assured in to be added for determing Aggregate Turnover.

no

11 Is GST applicable on lottery , betting and gambling. Give reason to support your answer

It is under GST because actionable claims have been included in Schedule III
Except lotterty betting etc
12 Once a transporter has been identified as a Goods transport Service, would GST be applicable on all services
provided by it.
GTA services are exempt as Exemption Notification

13 There is a Contractor whose Principal place of Business is Gujarat. It has secured a contract in Tamil Nadu and the Principal
has given it a temporary site office. It has no permanent place of business in Tamil Nadu. Can he opt not to take
registration in Tamil Nadu. A ruling of AAR was discussed in this case

He is not oblidged to take registration as per Advance Ruling

14 GST is not applicable on exempted goods and exports. Are exports classified as exempted goods or there is a separate
classification for exports
Though exports are not subject to GST they are seperatly classified as Zero Rate Supplies

Applicabilty of GST on interst

Shree Poly plast

appoints Agent for the following purposes
a) Promote Goods
b) Get Orders
c) Guarantee payments in respect of orders secured through them
 In case the customer through the agents fails to make payment then the Agent will extend loan to the principle

a) Interest on Loans and Deposits will be exempt from GST Service should be represented by way of
b) Interest on delayed payments in respect of goods and services loan or deposit and the consideration for
In this case GST would be applicable in view of the provisions the service is interest
contained in Sec 15(2)(d) which states that interest on delayed
payments in respect of credit given on goods and services In the second case no loan was given but
would be a part of the cvalue of the goods either goods were supplied or services were
provided. There was a credit period and
interest on same is charged for delayed
In case of loans a default can result into the following payment. What is the applicabilbilty of
10% a) Interst on the amount payable for the extended period GST
b) Penal interest which means that rate interest will go up
say by 2%
effective rate will be 12%

Sum it For interest

a) Interest is a supply
b) Interest is considered for determing Aggregate Turnove
c) If interest is covered by Exemption Notification no GST would be appliable
d) In terest on delayed payments in respect of credit on goods and services is covered in value of supply uder Sec 15
hence GST is applicable

As per Sec 15(2) a of CGST Act all taxes, duties charged under any law that is in force except CGST/SGST/UTGST/IGST
has to be added to the consideration to determine the value of the goods for levy of GST
This is the reason why we add Basic Custom duty to the CIF value of goods imported into India and on the total of this
we charge IGST

Special Economic Zones

a) Developer of SEZ is one entity
b) A unit which is based in SEZ which may be supplying goods or services

Supplier both to or from in the both the above cases would amount to Inter State Supply in
view of the provisions of Sec 7(5) of IGST Act
 Domestic Tarriff Area DTA

EOU 100% Export Oriented Unit

Zero Rated Supply under IGST Act Trade Policy
SEZ are formed under a special Act called
a) Export of Goods and Services SEZ Act
b) Supply of Goods and Services to a SEZ developer or SEZ unit

Need for classification as Zero Rated Supplies

In case a supply is classified as Zero Rated Supply the benefit of ITC will be available and it will not be treated as an
Exempt supply

So the conclusion that we can draw form the above is as follows:

a) In case Zero rated supplies ITC is available
b) In case of exempt supplies ITC is not available
c) Sec 17(2) also provides that ITC can be claimed only in respect of Zero Rated Supplies and not on exempt
Goods

1 AB is a unit situated in DTA and it supplies goods to a unit in SEZ . The consideration of this supply is Rs 100000
The rate of GST applicale on these goods is 18%. Since the supply is to a unit in GST it will be zero rated
supply and there will be no gst on this supply

2 XY is a unit based in SEZ. It supplies goods of Rs 100000 to a unit in DTA. The rate of GST on these goods is 12%
Since this will be a supply from SEZ IGST will be applicable . However before charging IGST the basic custom duty
will have to be charged

Value of Goods 100000

Basic Custom Duty 10% 10000
110000
IGST 12% 13200
Total 123200
Sec 16(3) a

The benefit under this section is available to the supplier of Zero rated Goods

His first option is that he supplies goods without charging and paying any GST because the goods are zero rated
If he execises this option he must execute a Bond or a LUT with GST

But on the inputs I ould have paid GST either by way of CGST/ SGST Or IGST

Since ITC is availble on the inputs in respect of Zero rated Supplies under this section he can
claim a refund of the same

We are in luch break we will resume at 1.25

We will discuss supplies to SEZ there are FAQs

Sec 16(3) (2) option to pay igst and claim refund in case of supplies to SEZ

a) Raise a tax invoice on the SEZ unit and charge IGST at applicable rates. This is to be done by the unit in DTA

b) In the invoice declaration is to be given that supply is made to SEZ under payment of IGST

c) The amount charged in the invoice as IGST is only for presentation purposes and not to be collected
from the SEZ unit

d) If there is any ITC credit available claim the same against the output Iigst

f) If ITC is not sufficient to cover the output IGST pay the balance

g) Collect evidence as per GST Rules that the supply has been effected to the SEZ

h) Claim refund of the entire amount of IGST Charged in the invoice

i) in view on the latest judgement the SEZ unit will not be claim any refund of IGST on their inputs
 even if they have paid igst to the supplier in DTA
Example

AB DTA Unit AB supplies goods of Rs 200000 to XY

XY SEZ unit Invoice by AB
Input or purchase by AB
Value 200000
IGST 18% 36000 Value 125000
236000 GST 18% 22500
147500
AB discharge of GST Liability

Output GST 36000

ITC 22500
Payment 13500
Thus the ITC on inputs has been fully utilized by AB

After getting the evidence that supplies to SEZ has been effected AB will claim the refund of IGST of Rs 36,000
Thus by virtue of the above not only will it get refund on the Input tax but also of the payment made

Zero rated Supplies without payment of IGST

This would be most suited when the input tax in respect of Supplies to SEZ can be set off against other
domestic Supplies

Basic Conditions for claimimg Input Tax Credit

a) The benefit of ITC can only be claimed by a Registered Person. An ungistered person will have to forego this
benefit and will have to absorb Input tax as a part of his cost. Thus it is recommended that any person
who pays tax on inputs should go for registration even if he is not required under law
However a person only supplying Exempt good need not go for registration because he will
not be able to claim ITC For a person supply zero rated goods registration would be required as
for the following reasons
a For interstate supply of goods registration is compulsory
b If he is not registered he will not be able to take benefit of Sec 16(3)
b) The benefit of ITC can be taken only if the inputs have been utilized for furtherence of Business

Case Study Mr A is a Director of AB Ltd. The company buys Aircinditioners which are installed at the
residence of A. This is not for furtherece of business

c) Further two conditions that should be satisfied for claiming the benefit of ITC are as follows

i The person claiming benefit of ITC should be in possession of Tax Invoice/ Debit
ii The goods should have been delivered to him

c) For claimimg ITC you must ensure that tax has been by the supplier

d) The claimant has to file return

Frauds

A form an enterprise and gets it registered under GST

B is also a registered person and he supplies goods to another registred person

A issues a Tax Invoice to B without delivering goods or providing service and charges a comission

B claims ITC on the basis of Tax Invoice issued by A

A will one day close his firm. In this ITC will be denied to B as the goods were never delivered to him

TEA BREAK TILL 4.15 pm

Practicioner Money Laundering EOW has

opened an
S S GUPTA read as many advance rulings and judgements as posiible PMLA office in
gst office
For fake service invoice for these frauds

gst deptt will claim the ITC claimed by the person along with interest and penalty
GST deppt will inform income tax that the invoice is a fake invoice
so Income will reject than exp and addit to your profit. So libility of Income intt and penalty
If the amount is large CBI/ EOW will also get involved
ED

Will also have adverese repurcussions on the Auditor and staff of the organization
d an

se frauds
 1 Interest is exempt from GST. You have supplied goods to a customer and the terms are that he will pay u within 30 days and for delayed payments
interest would be charged @ 1% per month. Your GST consultant tell u that no gst is payable on this interest as interest is exempt. What are
your views
GST will be payable as only interest on loans and deposits is exempt

2 As a Director of a Company you are entitled to get sitting fees from the said company. This sitting fees is under RCM to be paid by the company
You have unutilized Input Tax Credit. Can you ask the company to set off the ITC against the payment of GST. NO

3 You are conducting GST Audit of a Company and are verifying the ITC availed by the company. You ask for records of input supplies. Tax Invoices
are produced before. Is this document sufficient to claim ITC.

there should be an evidence that the goods and services have been received

4 You have supplied goods to a unit in SEZ. You have raised a tax invoice and have collected full amount of the invoice . Now the SEZ unit has
proceeded to claim refund of GST. Can they claim refund in view of recent Ruling.

5 You are exporter of goods. Your Aggregate Turnover is less than the threhold limit. Is it mandatory to get GST registration in this case
Interstate Supply

6 What is the difference between zero rated goods and exempt goods
Incase of Zero rate ITC can be claimed
In case of Exempt goods ITC cannot be claimed

7 You are the proprietor of a firm. The firm purchased 3 Airconditioners which are installed at your residence.
Would you be eligible to claim ITC on the airconditioners purchased by you.
ITC can be claimed only if the supply is for furtherence of business

8 A GTA can opt for two rates of Tax -- 5% & 12%. What is the difference between the two
5% No ITC & generally under RCM
12% Benefit of ITC is available

9 Since railways also carry goods and issue a document called Railway Receipt it will be classified as Goods Transport Agency
GTA is only for Road Transport

10 Dividend on Securities are added to Aggregate Turnover NO

 JOB Work
a) What do we understand by Job Work
Treatment on other registered persons goods . It will always be a service

b) Provisions relating to Job Work

i) Sec 143
ii) Rule 45 of CGST Rules
iii) Sec 19 in respect of claiming ITC on goods sent for job work

c) Parties Involved in the activity of Job Work

Situation No iii
i Principal A is the Principal
ii Job Worker A sources the goods from B
iii Supplier of Principal in case the supplier delivers goods to the Job Worker B is the supplier of A
iv A job worker could be sending goods to another job worker A directs B that instead of delivering the goods
v The job worker after completing the job work will return the goods to to A under his directions the goos
the Principal should be delivered to his job worker C
vi The Principal could direct the Job Worker to deliver the goods to his customer

The job worker will raise an invoice on the Principal for Job Work Charges. That will be Considered as Service in terms of
Schedule II . On this the job worker would be charging GST at the

A is a garment Fabricator. He procures raw fabric fro XY Ltd which is mill.

The raw fabric needs to be proceed in a unit called process house
The process house cleans the raw fabric/ applies chemicals to make the fabric soft and if required puts dyes on the fabric
Process House Job Worker
Principal A
XY lltd if it has been directed by A to deliver the fabric directly to Process house then XT Ltd will be the supplier

The Process house will be raising an invoice on A for the processing charges. This is called Job Work

After the processing is done there could be following situations

a) The fabric is complete in all respects and is returned to the Principal

b) The fabric requires further processing and needs to be sent to another job worker on the directions of Principal
c) The fabric is complete in all respect and the Principal has sold the fabric to a Customer while it is being
processed by the Job worker and the Principal directs the Job Worker to deliver it directly to the customer

The essential condition for applicability of Sec 143 is that the Principal should be a Registered Person
The job worker may be registered or unregistered

We will examine the applicability of GST in both cases

What are the things that could be sent by the Principal to the Jobworker
a) Input of the Principal Materials to be processed
b) Capital Goods for the pupose of processing the goods of the Principal
c) Dyes & Moulds

Obligation of return of things sent to the job worker When job work is given the principal will give
specifications
a) No obligation to bring back dyes/ tools/ moulds etc
b) Inputs should be brought back within a period of One year Can be extended by another on year Subject to permission
c) Capital Goods should be brought back within a period of three Can be extended by another two years by Comissioner

A principal who is a registered dealer may send the goods to a job worker withou payment of tax
subject to fulfillment of conditions

There could be two situations in case of the status of Job Work

a) The job worker is a registered person either voluntarily or because his turnover is above the threshold limit
b) The job worker is a unregitered peroson

In case the job worker is a unregistered person then the Principal has to declare the place of the job worker as his
additional place of business

The other alternative for the Principal is that within the prescibed period he supplies the goods to a third party directly from Job Worker
i) If the supply is within the taxable territory then on payment of tax by the Principal
ii) If exports then without payment of tax as per export procedures

In the above scenario two invoices will be raised

a) The Principal will raise the invoice on his customer even if the goods have been supplied from the premises of the job worker
It will be the obligation of the Principal to pay applicable GST on this supply
b) The job worker, if he is registered will charge GST at applicable rates on the job work charges
 If the job worker is unregistered he cannot raise tax invoice.
The job worker who is registered and has raised tax invoice will be able to take ITC on his inputs utilized by him
for executing the job work

Supply to job worker by principal even though a supply will not attract GST
Job Work done by the Job Worker is a supply of service as per Schedule II, hence Job Work charges which
is a consideration for Service applicable GST would be charged

What will be Adustment of GST done by Principal

GST on Supplies made directly or from the premises of Job Worker 100000
Less Input Tax Credit
a) GST paid on Inputs 50000
b) GST paid on Job Work Charges 5000 55000

Balance to be paid to Govt 45000

Wahat will be the adjustment for Job Worker This is only if the job worker is registered

The job may, in order to execute the job work may need some inputs
such as Chemicals/ polising material/ colours/tools
When he acquired these input he paid a GST of Rs 2000. He will be entitled to ITC of this Rs 2000 because the
inputs are for furtherence of Business

Hence his adjustments will be as follows:

Tax on Output 5000

Tax on Input 2000
Balance Tax Payable to Govt 3000

Except for tools and dyes etc if the inputs or capital goods are not brought back by the Principal or are not futher supplied
it will be considered to be to a supply to the job worker from the day on which it was delivered
Hence GST would become payble by the Principal along with interest

GST Act does not say that the Principal must take a consideration for goods not returned
GST Act says on the supply to job worker we had given you an exemption under Sec 143. We are not taxing sale but we are taking supply
So if you do not fulfill the prescibed conditions this supply becomes taxable

In case of default of return otherwise

In case the goods are sent by the Principal to the job worker the date on which the said goods were sent have to
be taken as date for caculation the prescribed period
In case the goods are sent to the job worker by the supplier of the Principal then the date on which the said goods were
received by the job worker shall be taken as date for this compliance

Rule No 45 of CGST Rules Procedure and Documentation to be followed for

outward and inward to and from Job Wokerr

LUNCH BREAK 14.45 will be back

A is the supplier of Goods

A raises a tax invoice on B . A uploads the invoice on GSTR1 and on that basis
B is the receiver of Goods B taken input tax credit

How the liability is to be discharged

A has raised the tax invoice say in the month of Jan so by 20th Feb A must make payment
How payment is made
a) From the output tax that is as per the invoices raised in the month of Jan the Input Tax Credit is deducted
b) If there is a shortfall ie the ITC is not sufficient the balance will have to be paid to Govt

The payment of GST by A is not dependent upon receipt of funds by A from B

What happens if B never makes payment of the Invoice to A ie it becomes a Bad Debt

Consequence for B If B does not make payment to A of the invoice within 180 days of the date of Invoice
then B will have to reverse the ITC availed by it added to his output tax
liability and along with interest he has to pay the same

Subsequently if B makes payment to A then he will be able to take ITC

 A paid GST to the Govt
B availed ITC on the basis of the Invoice uploaded by A
B did not discharge his liability to A for the amount of the Invoice for a period exceeding 180 days
In the month following the month in which the period of 180 days expired B will have to reverse
the ITC claimed by it. It will not only have to pay the GST accruing cause of this reversal but also interest

A raised the invoice on 29th of Jan . Period of Credit is 60 days. So the payment of invoice will fall due on 28th of March
But A will ve to make payment of GST by 20th of Feb

B does not do the reversal, how will gst authorities come to know that B has not reversed
a) This will be a part of your Audit report
b) at the time of assessment
c) A can make a complaint that he has not been paid within 180 hence B should reverese the credit

Suppose B reverses the ITC after expiry of 180 days and pays to the Govt the GST along with Interest now GST authoroties are out

On this basis can A get a refund on Bad Debt

Invoice Raised by A on 1000000
Sale Value 180000 Insolvenct
GST 18% 1180000 IBC

Circumsatances in which refund can be claimed for unutilzed Input Tax Credit

a) ITC on inputs used for supply of Zero Rated Goods

ie Exports & supplies to units in SEZ and SEZ developers

b) Inverted Tax Sturcture

Rate of GST on outward Supply 5% 13%

Rate of GST on Inputs is 18%

In case the rate of GST on outward supply is lower than the rate of GST on inputs refund of excess will be allowed

There are exceptions

a) No refund of GST will be allowed on ITC in respect of Exempted Goods
 b) In case of Exports if any Export Duty is payable then no refund will be allowed

In case of Bad Debt as of now there is no provision of claim of refund by the the supplier

The entire value becomes your expense

Apportionment of Blocked Credit

a) If goods or sevices are used both for Business and Personal and other purposes the ITC on the same shall be restricted
proprtionate to the use for Business purposes as ITC can only be claimed if the goods and services are used
for furtherence of Business
b) Inputs are being used for following supplies
a) Taxable Supplies
b) Zero rated Supplies
c) Exempt supplies

We know that on exempt supplies neither ITC is available nor refund is available

Apportion the input tax to the following

a) Attributable to Taxable and Zero rated Inverted Tax Structure
b) Attributable to Exempt no ITC would be allowed

Lease
Financial Lease
Operational Lease
As per Sec 2(83) lease is covered under the definition of Outward Supply
As per Schedule II lease is a supply of service and not supply of goods as it is transfer of right of use without transfer of title

Operational Lease Short term transfer or what we can also say giving goods on hire
Construction Equipment
Examples Cinema Equipment

loan agreement but not a loan

Financial Lease like a

When I want to buy an equipment I have two options On interest on loan there is no GST
a) Take term loan from bank Exp interest
b) Enter into a long term lease agreement with a financer . In this case the financer buys the equipment
and gives it to me on long term basis and ta Exp the entire lease rental

generally on the expiry of the term of the lease the lessor will transfer the equipment at a pre determined price

So during the lease period there is no distiction under GST between operational lease and financial lease
on both gst at applicable rates wil be charged
 GST DAY 9

CHECK YOUR KNOWLEDGE

GOOD MORNING TO EVERY ONE

WE WILL START AT 10.10 AM

Sat next 9 am to 3.30 pm

GST S S Gupta Practioners Manual

TaxGuru Free subscription

CA Club You can put your queries

1 What is the time limit within which if the Receiver does not make payment to the job worker of the

180 days

2 Can I claim refund of GST in case the amount receivable against an invoice on which GST has been p

No

3 What do you understand by the term Inverted Tax Structure

When the rate of tax on inputs is more than the rate of tax on output

4 On Operational Lease GST would be applicable. However on Financial Lease GST is not applicable sin
agreement and on interest on loans GST is not applicable

GST is applicable both on Financial Lease and on Operational Lease

 5 Is refund of GST on in respect of ITC allwed

6 Can the goods be supplied by my supplier to my job worker directly

yes

7 The procedure for job work is that when I send goods for job work I ve to execute a bond with GST A

Bond is only in case of exports without payment of tax

In case of Job Work it is only intimation

8 The goods sent by me for job work are added to by my supplies to calculate aggregate turnover

No the goods sent to job worker will not be added to the aggregate turnover o

9 Can a job worker send goods to another job worker on my behalf

yes

10 Within how much time the capital goods should be returned by the job worker

3 +2 ( If permitted by comissioner)

11 Within how much time the goods sent on job work be returned by the job worker

1 + 1 ( if permitted by Comissioner)

12 Is there any obligation on the Job Worker to return tools and moulds

No
13 Can the goods be sent directly from the place of job worker to the customer

Yes

14 What are the consequences if the goods are not received back from the job worker within the stipul

It will be considered as Supply

15 Can the goods be sent for job work to a job worker who is not registered under GST

Yes goods can be sent to the urp but his place has to be declared as additional

16 Would the job work be considered to be a supply of goods or supply of service

Job work would be considered to be a service because of the classification in S

17 Can a supplier from a DTA unit to a SEZ unitbe a Unregistered Person

Since it is an interstate supply the supplier has to be registered

18 In the same state you have one unit in DTA and one unit in SEZ. Is single registration sufficient

DTA unit and SEZ unit require separate registrations

19

TCS Tax Collected at Source

TDS Tax Deducted at Source

Salaries TDS deduction by employer

Professional Charges TDS

In Case of GST TCS is applicable on supplies made through E Commerce Operators

in cases where the payment is collected by the E Com Operator

Amazon/ FlipKart/ Snap Deal

They are only providing a platform
But they collect the payments from the consumers and charge a comission and make pay

Both case of TDS and TCS the actual liability of payment of tax is of the person

Hence the person on whose behalf tax is being retained is entitled to credit of

After taking ITC THE GST LIABILITY

Less : TDS/TCS

Sec 52(1)

a) Supplies should be made through E Commerce Operator

b) The payment should be collected by the E Commerce Operator
If the payment is collected by the Supplier directly then TCS provisions are not applicable

In case of Supplies through E Com Operators the requirement of Registration is as follows

a) The supplier supplying through E Com Operator has to mandatorily register un

b) The Ecom operator who is laible to deduct TCSis required to be registered und

Calculation for TCS is done on monthly basis

Total Outward Supplies

Less Return in the month
Net Value of Supplies

If the suppler through E Com operator has turnover below the threshold limit
to take registration by virtue of a specific exemption notification he may opt n

Three Stages

A Turnover below threshold

B Turnover above Threshold

c Not entitled to Composition Scheme

The credit of TCS has to go to the supplier and to be adjusted against the tax li

TDS under Income Tax

 E COM OPERATOR
Commission GST

Reverse Charge Mechanism

A is a supplier of Services which is under RCM

The said services are provided through a E Com Operator
B is the receipent of the said Service

But on making payment to E Com Operator ( when Sec 52 will get attracted) B
to Govt under RCM

In this case since RCM was applicable on the said service the E Com operator w
to deduct TCS on payments collected by it and for onward payment to A .

Who files the returns

It is not the supplier through E Com who files the returns

but it is the E Com Operator ie Amazon etc who file the Return in respect of NET suppliers effected t
which payment will be collected by it

Three services are covered under Sec 9(5)

whereby the E Com operator himself becomes liable to discharge the liability of GST even though
it is third party which is providing services

a) radio cab services OLA/UBER/MERU

b) Hotel Accomodation In case the service provider is a Un
c) House Keeping/ In case the service provider is a Un
Carpentary Services

TAX DEDUCTED AT SOURCE Applicable Sec 51

a) The recepient of goods and services should the person covered by Sec 51. In princ
by this

b) Even in this case TDS will become applicable only the value of contract exceeds Rs 2,50,00

This is different from payments under a contract in a financial year

10 lacs 2.50 per financial year TDS will be applicable

 Lunch Break till 2.40 pm

ENJOY YOUR LUNCH

Govt Dept Receiver of service

Exempt Services
AB Provider of Service
GST charged Chargeable to GST
here cd sub contractor

ITC cannot be claimed against inputs for exempt goods or services

Refund also cannot be claimed of unutilized input tax credit

Thus by virtue of this Advance Ruling it becomes clear that if the output service is exempt
the input for the exempt output will automatically be exempt. The

Hence in case of exempt outputs the GST paid on Input will be cost to the supplier and ul

A club is formed with various members. The club collects charges from various members which are for providin
The club is not carrying any business activity it is not for profit and those who are contributing are the ones who
So in essence the members are only pooling in resources and untilizing services in a combined manner.
Hence there should no applicability of GST in this case on the charges charged by the club

AAAR has held that membership fees or any other subscription charged by a club is a service liable to GST
The services provided by the club to its members even though there is a concept of mutuality will be a
business activity in view of provision of sec 2( )

Applicability of GST on membership fees collected by Housing Societies

a) Monthly maintence charges are exempt upto Rs 7,500 per member.

b)

In a housing society if you are a member you are entitled to a house.

Composite Supply in case of Printing Activity

A has designed its own hoarding or the Art Work for the hoardings has been designed by the the Principal
It engages a Printer to print the Art Work on Vinyl Sheets
The printer provides to supplies which are natuarally bundled
a) Printing Activity
b) Goods in form of Vinyl Sheets

Since the two supplies are naturally bundled and are inseperable it is a composite supply

Now the question arises which is the Principal Supply

a) Supply of Service which is the printing activity
b) Supply of Vinyl which is goods
 Depending upon the Principal Supply the rate of GST would be determined

In the matter of Hundai it was held that the printing on vinyl is a service since the copyright of the Ar
Hence rate of GST on such service will be applicable on the entire supply

Tea Break
Will resume at 4.20 pm

Goods Transport Agency

By virtue of this ruling the following is concluded

a) Issue of a formal Consignment note is not the only condition for classification of a Transp
b) In all cases where E Way Bill is issued it will be deemed that Consignment Note has been
because it is mandatory to mention Transport document no in column A8 of the E Way Bi
c) Such documents amounts to a consignment note

Thus in all cases where the E Way is issued the transported will be deemed to be a GTA
and unless GTA services are specifically exempt by some notification GST would be applic

Input Service Distributor ( ISD)

Place of Supply
Value of Supply
Invoices
Composition Scheme
Place of Supply
AML
IBC
SECURITY LAWS
UR KNOWLEDGE

EVERY ONE

3 volumes

o the job worker of the Invoice Value he will have to reverse ITC

n which GST has been paid becomes a Bad Debt

Refund is allowed

GST is not applicable since financial lease is similar to a loan

nd on Operational Lease
ecute a bond with GST Authorities

Goods sent to jobworker - not a part of my turnover

Goods supplied after job work is completed
then it will added to the AT of the Principal

aggregate turnover

he aggregate turnover of the Principal

worker within the stipulated time period

e declared as additional place of business

of the classification in SCH II

stration sufficient

Backward Mechanism Reverse Charge

In case of TCS the person receiving or collecting the money is liable to deduct /chrage TCS

In case the person making the payment is responsible to deduct tax and make payment
Forward Mechanism

deduction by employer Witholding Tax

merce Operators
comission and make payment to the orignal supplier

nt of tax is of the person on whose whose account tax is being retained

d is entitled to credit of such tax

THE GST LIABILITY 1000000

Less : TDS/TCS 100000
900000

Three parties are involved

a) The supplier
b) The E Com operator
sions are not applicable c) Consumer
Condition : Payment should be collecte
by E Com operator

Registration is as follows:

mandatorily register under GST Sec 24

red to be registered under GST

on Net Value of Supplies

2000000
500000
1500000

elow the threshold limit then even though it is mandatoty under Sec 24
otification he may opt not to take registration

By virtue of exemption notification not mandatory to go for registration

Two option
Be a regular Tax Payer
Opt for Composition scheme

djusted against the tax libility of the supplier

TDS Return on the basis on which the tax payer gets credit in 26AS
 The liability of TCS to to be paid to the Govt cannot be discharged
by the E Com operator out Input Tax Credit that may be availble
to him for input services availed by him
However E Com operators other output tax liability

c 52 will get attracted) B will also make payment of GST

ce the E Com operator will not be liable

ward payment to A .

NET suppliers effected through it on

y of GST even though

e service provider is a Unregistered Person

e service provider is a Unregistered Person

vered by Sec 51. In principal Govt Bodies and organizations are covered

ntract exceeds Rs 2,50,000

 Exempt Services

Chargeable to GST

s or services

output service is exempt including goods

matically be exempt. There has to be a specific notification to this effect

st to the supplier and ultimately to the final receipent

s which are for providing services to the members

buting are the ones who are availing these services
mbined manner.

rvice liable to GST

tuality will be a

Earlier this limit was Rs 5000 per month per member

y the the Principal

posite supply
e the copyright of the Art Work belongs to the Principal

lassification of a Transporter as GTA

gnment Note has been issued
lumn A8 of the E Way Bill

e deemed to be a GTA
tion GST would be applicable

[email protected]

SECURITY LAWS
part of my turnover
Reverse Charge
Three parties are involved

The supplier Reg

The E Com operator Reg

: Payment should be collected

 1 In case of a Cooperative Housing Society what is the maximum amount upto which members are not liable to pay GST on maintenance
Charges per month
Rs 7500 per flat
2 The Aggregate Turnover of a Housing Society is Rs 15 Lacs hence it is not liable to be registered. However the maintenance
charges being charged from members is Rs 10,000 per month per member
Will it be liable to get itself registered Not required to get registered

3 What is the rate of TCS 1%

4 What is the rate of TDS 2%
5 I have two flats in a Cooperative Housing Society. The maintence Charges of each flat is Rs 6,000. Will I be liable to pay GST
if the Society is registered as the total amount payable by me per month is Rs 12,000 No bcos exemption is on per flat basis
6 I supply goods through a E Com operator. As per Section 24 it is mandatory for me to get registered. My Aggregate Turnover
is less than the threshold limit for regiatration. Am I under compulsion to take registration No bcos there is a specific exemption notification
7 TDS is applicable to all companies in which Central Govt or State Govt has a stake. Is thiss statement correct
TDS is only applicable to PSUs ie Govt Company
Govt Company if stake of govt is 51% or more

8 I supply my own Art Work to Printer. The copyright on the said Art Work belongs to me. The printer prints it on Vinyl Sheets.
As per the Printer the Principal supply in this case is Vinyl. Is he correct No as per advance ruling this will be a supply of service
9 A Cooperative Housing Society is charging Rs 10000 towards Maintenance Charges from its members on monthly basis.
What is the amount on which GST would be payable by the members. Whole amount of maintenance charges will be subject to GST
10 I use a E Com platform to market my goods. However the payments against supplies are collected by me directly. Will the E Com
operator be liable to collect TCS No, essential condition is that the payments should be collected by E Com operator
11 Can the E Com operator use his ITC to discharge his liability of TCS No Tcs can be discharged only on cash payment
12 Can the person on whose behalf TDS/TCS is deducted claim credit of the same while discharging his liability
of GST Yes he can claim credit of TDS/TCS
13 What do you understand by the term Net Supplies in case of TCS Outward Supplies - Returns in a month
14 By what time TCS is to be paid By the 10th of subsequent month
15 A transporter does not issue a consignment note. However the transportation requires issue of E Way Bill.
Will he be covered by the definition of Goods Trasport Agency Yes as per the Advance Ruling
16 Will TCS be applicable when Goods/ Services are under Reverse Charge Mechanism NO
17 Is TCS applicable on supply of radio cabs through a E Com operator
No bcos in this case it is the E Com operator who is liable to pay GST u/s 9(5)

Aggregate Turnover of HSG Society

a Maintenance charges
b Hoarding Charges
c Installation of Towers
d Interest
e Rental Income

Disallowance of ITC

a) If inputs for personal purpose no ITC cause it is not allowed under Sec 16(1)

b) If a particular input is covered by Sec 16(1) then you must whether it comes in the ambit of
Sec 17(5) . If it comes ITC will not be available

1) Motor Vehicles where capacity is less than 13 ( including Driver)

except in following cases
a) Buying & Selling of Vehicles
b) Vehicles used for transportation of passengers
c) Vehicles used for imparting training in driving

2) GST paid on insurance/ repairs etc on such vehicles on which ITC is not allowed will also
not qualify for ITC

c) Hundai engaged a Contractor to build up a factory

This is a Works contract as construction of immovable property is involved 10000000
The contract was given to AB Pvt Ltd 11000000
AB Pvt Ltd further subcontracted a part of the work to XY Enterprises

XY Enterprises raises an invoice on AB Pvt Ltd and charges GST

AB Pvt Ltd being the main contractor will be able to take ITC on the gst charged By XY Enterprises
Now AB Pvt Ltd raises an Invoice on Hundai and charges GST
As per Sec 17(5) Hundai will not be able to claim ITC on the GST paid to AB Pvt Ltd

d) If as Taxable person I construct an office building which will be used by me for my office
any gst paid on the inputs whether by way of goods or by way of services will not qualify for
ITC against GST on Output In this case ITC will also not be available on Inputs

However the above provisions are not applicable to fabrication of Plant and Machinery

e) In case of a person who opts for Composition Scheme under Sec 10 benefit of ITC will not be available

d) No ITC available on
 a Goods lost/ destryoed/ free samples Will resume at 12.15
[[

Free Samples
Buy 1 get 1 free
Buy 1 Get something else free
Samples given for promotions/ samples to doctors for medicines

a) Free samples supplied without consideration is not a supply even if it for furtherence of Business
unless covered by Schedule I. Since it is not a supply GST would not be charged on notional values
except supplied covered under Schedule 1
b) In terms of Sec 17(5) ITC is not available on free samples, However transactions covered by
Schedule 1 would be eligible for ITC

Buy 1 and get 1 free

a) It is a supply of 2 or more products for a single price. Hence it could be a mixed supply or a c
composite supply. Accordingly GST would be applicable
b) The both items are covered in supply ITC would be available

Discounts
Cash Discount For early payment
Trade Discount For Volumes

TradeDiscount Issue Credit Note 10000

Reverse ITC Trade Discount 1000 Credit Note
9000
Input Service Distributor

a Marketing Office creates designs

Marketing Offices engages Serrvice Providers for various activities such as
TV Commercials Hoardings Printing etc.
The invoices are received by the Marketing Office on which GST would be applicable.
The marketing office has no output because it is not producing anything or providing
to any third parties
So the marketing will distribute the GST on inputs which is available by way of ITC
to the the different units who were benefited from this marketing activity.
 Once this credit passes on to the individual units they will be able take ITC of this credit

b Liscence of a Software

Out of 10 units 5 units use this software so the GST

would be distributed to 5 units

Cardinal Principal

The ISD cannot distribute Credit exceeding the credit that has been accumulated to it. It will be a fraud
and there are penalties
A B
10000

A) ISD can distribute GST only to those units who have the same PAN as the ISD
That is why we say that ISD is the office of the supplier

B. Only those units which have received or utilized Services can avail the benefit of credit from ISD

C A document has to be issued for distribution of credit by the ISD

D The distribution has done in proportion to the turnover of the respective units as compared
the total turnover of all such units to whom Credit is being distributed

E For the distribution the turnover of the last financial year is to be taken as the basis of distribution
If some units do ve turnover in the last financial year then turnover of the last quarter will be taken
as the basis of distribution

G In computing turnover GST in all forms will be excluded

E The maximum amount that can be distributed will be the amount of credit available

Advance Rulings GST India Online

CBIT

Distribution of Credit

ISD & Unit located in same state CGST etc will be distributed as CGST
 ISD & UNIT Located in different states CGST will be distrbuted as IGST

IGST will be distributed as IGST only

Nexus for distribution is important criterea

A services which is solely attributed to a particular unit will be distributed only to that unit

Combined services to be distributed to all user unit in proportion of their turnover during the relevant
period

All credit available with ISD has to be distributed on Monthly basis

Carry Forward
UNIT Accumulated Credit 1000000 April of Business loss 8 year
Output Tax Liability 200000 Depreciation No time
Carry forward 800000 May limit

Queris

a) How ISD will distribute the credit for GST in new units which have not completed a quarter
b) What is the time limit upto which credit note in respect of ISD can be claimed

Tea Break till 16.05

Raw material purchased on which GST is paid

Raw Materials have been utilized for manufacture of Finished Goods
Hence Raw material have been used for furtherence of Business thus ITC is available

However the Finished Goods were destroyed.

Since Raw Materials have been used for furtherence of Business If finished goods are destroyed
the ITC on Raw Materials cannot be denied

Periodicity of ITC

Tax Invoice raised by supplier in the month of May 2020

Tax Invoice will be uploaded in GSTR 1 till 10th of June
Credit available in the filling of the return of May can be utilized for discharge of liability

If there is any untilized ITC it can be carried forward to next period

Unutilized Credit for the Financial Year 20 21 can at the maximum be carried forward
till last date of filling of Return for the month of Sept which is 2oth Oct