GST Summary Book by Vivek Gaba Sir (1).pdf

INDEX
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
Introduction of Taxation Laws
Constituiton of India
Introduction Of GST
Introduction of GST
Charging Section of GST
Taxable Event - SUPPLY
Valuation of supply
Input Tax Credit
Accounts & Records
Audit Under GST
Compensation Act, 2017
Composition Levy
Demand & Recovery
E-Way Bill
Input Service Distributor
Place of Supply [POPOS/POPS]
Refund Under GST
Registration Under GST
Return Under GST
Tax Invoice, Credit & Debit Note
TDS & TCS
Time of Supply / Point of Supply
Inspection, Search, Seizure & Arrest
Job Work
Payment of GST
Amendments in Payment of GST
1-7
8-17
18-24
25-32
33-41
42-58
59-67
68-80
81-83
84-84
85-86
87-101
102-103
104-112
113-114
115-122
123-125
126-135
136-142
143-153
154-156
157-163
164-165
166-167
168-169
170-172
S. No. Chapter Name Page No.
V-71

CA Vivek Gaba GST Summary book JUNE & DEC 2021
Ph: 9643036663 (Only Whatsapp), 7703880232 (Call & Whatsapp) 1
Chapter-1
Introduction of Taxation Laws
Subject Overview & Syllabus Partition
Part-1 Basis of Income Tax
 Introduction of Income tax with tax rates
 Residential Status
Part-2 Computation of Total Income & tax liability
 5 heads of income
 Clubbing of income
 Set off of losses
 Deduction u/C VI-A
Part-3 Miscellaneous Topics
 Return of Income
 Advance Tax
 TDS / TCS
Taxation
Direct Tax
(50/70 marks)
Indirect Tax
(50/30 marks)
Income Tax
(50/70 marks)
International Tax
(old syllabus)
GST
(30/40 marks)
Custom (new syllabus)
(5-10 marks)
1

Which amendments/ updations are relevant for Exams?
June 2021 December 2021
Income Tax + GST
 Finance Act -2020  Finance Act -2020
+ +
Notifications /circulars upto 31/12/20 Notifications /circulars upto 30/06/2021
Meaning of Tax :
 A tax from latin word taxo is a compulsory charge under an act.
 The money that you have to pay to the govt. so that it can provide
public services.
Objectives of Tax :
 Raising Revenue
 Encouraging domestic industry
 Reducing income inequalities
 Promoting economic growth
 Development of Backward regions
 Ensuring Price Stability
 And so on ……..
Types of TAX
Particulars Direct Tax Indirect Tax
 General
meaning
Levy of tax
Incidence of tax
“AND” same
Burden of tax person
Impact of tax
Levy of tax
Incidence of tax
“AND” different
Burden of tax person
Impact of tax
2

 Example  Income tax
 Gift tax etc.
 GST
 Custom
 Nature of tax Progressive nature
-2 income
-2 tax
 These are linked with
paying capacity
 Rich person will pay
more tax in comparison
to poor people
Regressive nature
Fix nature
 These are not linked with
paying capacity
 IDT is uniform, whether
goods/services purchased
by rich or poor.
 Concept of P.Y
& C.Y
Previous year income
assessed in A.Y
No concept of P.Y & A.Y
 Distribution or
payment of revenue
Central Govt. Central Govt. or State Govt.
as the case may be
 Department CBDT
(Central Board of Direct
Tax)
CBIC
(Central Board of Indirect
Taxes & Custom)
 Taxable Event Income arise  Supply of GST
 Import / Export of goods
3

NOTE :
Particulars Income Tax GST Custom
 Tax ? Income पर Goods & services Only on goods
 पर
?
Income arise
पर
On supply of
goods / services
Import or Export
Import = र India
Export = India र
Some important concepts :
 Basic -1:- Meaning of Income Tax, GST & Custom
 Income Tax: Income tax is a tax that Govt. imposed on total income
generated by person within their jurisdiction.
 GST (Article 366(12A)): GST is a tax which is levied on supply of
goods or services or both except alcoholic Liquor for human
consumption.
 Custom : Tax levied on Import or Export of Goods
 Basic -2 :- Origin of Law
 Act
 Rules
 Notification , Circulars , Explanation
 Case laws
4

Formation of Act :
 Income Tax Act, 1961
 Provision of Income Tax contains 298 Sections & XIV Schedules
 Amendments in Income Tax by Finance Act
अ र Income Tax amendment Finance Act amendment
& then Income Tax
Rules 
Income Tax Rules , 1962
 Supporting system of Act
 Administration with CBDT
 Rules cannot override Act
 Sec-295 of Income Tax give empowerment to frame rules
CRUX :-
Act  Tell what to do & what not to do ?
Rules  How to do ?
Act  Provisions
Rules  Procedure
Bill
Money Bill Ordinary Bill
Can be presented before
either of the house first
Ist: Lok Sabha
2nd
: Rajya Sabha
3rd
: President’s assent
Becomes an Act
Recommendatory
time limit: 75 days
5

Notification and Circulars
 Notification :
 Issued by CG or CBDT
 Bring changes in the middle of year
 Add or remove the provision of Act
 Binding for department and assessee
 Circulars :
 CBDT issues circulars and circulations
 Clarify doubts regarding meaning of various provisions
 Binding on A.O not on assesse and court
 Not override the Act
Case laws (High Court & Supreme Court Judgement)
 SC & HC can give Judgement only on the question of Law
 SC is the “Apex Court” of the country & decision of SC is law of land
 Decision of HC will apply in respective states within its jurisdiction
Important points for Exams
Particulars Income Tax GST Custom
Act Income Tax Act,
1961
 CGST Act, 2017
 SGST Act, 2017
 IGST Act, 2017
 UTGST Act, 2017
 GST
Compensation
Act, 2017
Custom Act, 1962
&
Custom Tariff
Act, 1975
Provision of
Act
Provisions
contained in the
act
Provisions
contained in the
act
Provisions
contained in the
act
&
6

Rules/ rate of
Custom Duty
Applicability Whole of India
incl. J&K
w.e.f from 1/7/17 to
7/7/17, whole of
India excluding
J&K.
w.e.f from 8/7/17
Whole of India incl.
J&K
Whole of India
incl. J&K
Level of Taxes Central Level Central & State
Level
Central level
Total no. of
Act
1 35 Act 1
7

CA Vivek Gaba Summary book www.expertbano.com
Chapter - 2
Constituiton of India
 Architect - Dr. Bhim Rao Ambedkar
 Effective Date - 26th
Jan. 1950
 Uniqueness - longest constitution
 Total Articles - 448 ( EARLIER 395)
 Schedule - 12 schedules
 Articles covered in syllabus - 18 Articles
 Schedule covered in syllabus - 1 Schedule
List Of 18 Articles & 1 Schedule
Old Articles New Articles Amended Arcicles
 A- 245imp
 A- 246imp
 A- 248imp
 A- 254
 A- 265imp
 A- 270imp
 A- 246Aimp
 A- 269Aimp
 A- 279Aimp
 A-366(12A)imp
 A- 1imp
 A- 249
 A- 250
 A- 268
 A- 268A
 A- 269
 A- 286
Contents of Articles
 Article- 245
Extent of laws made by Parliament or State Assembly.
 Article- 246
Subject matter of laws made by made by Parliament or state Assembly.
 Article- 248
Residuary Article.
8

 Article- 254
Who will prevail if conflicts between Parliament or State Assembly.
 Article- 265
No tax shall be levied or collected without the authority of Law.
 Article- 270
Distribution of taxes between Union & States.
 Article- 271
Power to levy Cess or Surcharge by Parliament
 Article- 246A
Special Provision with respect to GST
 Article- 269A
Apportionment of IGST
 Article- 279A
Formation of GST COUNCILE
 Article- 366(12A)
Definition of GST
 Article- 1
Definition of INDIA
Article – 245 + 246 + 248 + 254
Refers VIIth
Schedule
List I List II List III
Name Union list /
Central list
State list Concurrent list
Law making
authority
Parliament State Legislature Parliament/ State
Legislature
Extent of laws Whole of India Whole of State
Constitution of India
9

(A-245) “or” Part of India “or” Part of State
If any matter is not covered under any list, then laws are made by the
Parliament from Entry-97 of List-I (Residuary entry)
Important points
List I List II
Entry no. Particulars Entry no. Particulars
82 taxes on income other
than Agri. Income
46 taxes on Agri. Income
83 custom laws
10

Definition of India / State / U. territory under GST
Sec. 2(56) + 2(103) + 2(114) + Article 1
India
Base line/ land mass TWI EEZ
12 NM 200 NM
29 28 States 7 8 UT other territory for oil & natural gas
purpose
with legislature without legislature
 Delhi Andaman other territory
 Pondicerry Lakshadweep UT
 J/K Dadra & Daman
Daman LADAKH CGST + UTGST
Chandigarh
Other territory
Deemed States
CGST + SGST Deemed UT
Example :
S. No. Supply Nature GST
1 Haryana  UP Inter IGST
2 UP  UP Intra CGST + SGST
3 UP  Chandigarh Inter IGST
4 Chandigarh  Chandigarh Intra CGST + UTGST
5 Chandigarh  Andaman Inter IGST
6 Andaman  Mumbai Inter IGST
7 Mumbai  Delhi Inter IGST
8 Delhi  Delhi (SEZ) Inter (export) NO GST
11

SEZ  SEZ bhar se bhar  nothing to do with this
Definition of INDIA under Income Tax
Section – 2(25A) + A-1
O/S India 200 NM 12 NM
29 states
Only oil & natural For all 7 UT
gas purpose purpose
Definition 0f INDIA under Custom Laws
SAME
Custom Law mei 200 NM tak EEZ &
200 NM तक ICW (Indian Custom Water)
9 Delhi (SEZ)  Punjab Inter IGST
10 Punjab  USA Inter (export) NO GST
11 USA  Gujrat Inter
(imports)
IGST
12 Gujrat  8 NM (near
Mumbai)
Inter IGST
13 8 NM  Mumbai
(near Mumbai)
Intra CGST + SGST
14 J&k  Ladakh Inter IGST
15 Dadara  Daman Intra CSGT + UTGST
28
8
12

Article – 265
No tax shall be LEVIED “or” COLLECTED without authority of law.
Example : Income Tax = Income Tax Act, 1961
Custom = Custom Act, 1962 & Custom Tariff Act, 1975
GST = CGST Act , 2017 – 1 Act
SGST Act , 2017 – 31 Act
UTGST Act , 2017 – 1 Act 35 Acts
IGST Act , 2017 – 1 Act
GST Compensation Act, 2017 – 1 Act
Article-269A : Apportionment of GST
Inter-state
IGST levy & collected by CG
Shall be appropriated b/w union & sate  provided by
Parliament by law on the recommendation of GST Council.
In nutshell, IGST is a sum total of CGST & SGST.
Important points :
 GST क state क त इ त प क त क व प
क व कत , इ त प क त क व प
व कत .
i.e. GST is a Consumption / Destination based tax.
 GST क person क registration origin state , क
revenue consumption state क .
Delhi
Haryana
13

Article-279A : Formation of GST Council
President  within 60 days from 8/9/16
(formation of CAA , IOI)
GST Council formed  10/9/16
GST Council notified  12/9/16
Members in GST council = total 33 members
1) Chairperson = Union Finance Minister
2) Member from CG = IRS Officer
3) Member from SG = FM or other nominated by SG
4) Vice Chairperson = One member from
5) Quorum required = Minimum 50%
6) Voting in favour = 75% (3/4)
7) CG share = 1/3 i.e. 33.33%
8) SG share = 2/3 i.e. 66.67%
GST council make recommendation on following:
 Taxes to be subsumed
 Goods / services to be subjected “or” to be exempted from GST
 Apportionment of GST
 Special rate for specified period
 Threshold limit of turnover
 Special provision w.r.t Special Category States
Example -1
Total members = 33
Members present = 16
CG = 2  yes
SG = 14  yes
14

Decision approved or not ?
Answer : NO (quorum is not present)
Example -2
Total members = 33
Members present = 25
CG = 2  yes
SG = 23  No
Decision approved or not?
Answer : NO, not approved ( only 33.33% votes are in favour)
Article-270 : Distribution of taxes b/w Union & State
 All of the taxes & duties referred in Union list
 Shall be levied & collected by Govt. of India
 Shall be distributed b/w Union & State
Amendment after GST
 CGST levied on Intra-state Supply shall also be distributed among CG &
SG
 IGST component apportionment to the Union shall also be distributed
Name of taxes Payment to Apportionment
Income Tax CG √
CGST CG √
SGST SG X
UTGST CG X
IGST CG IGST
A-269A
CG SG
A-270
15

CG SG
Article-271 : Power to levy Cess or Surcharge by Parliament
Parliament may at any time increase any tax by a Surcharge for the purpose of
Union
Concept of Cess :
Amended articles
A-249
If council of state has declared by resolution supported by >/= 2/3rd
[66.67%]
member present & voting then Parliament may make laws w.r.t GST (i.e. SGST) if
in case of National Interest.
A-250
In case of proclamation of Emergency , Parliament has power to make laws w.r.t
GST (i.e. SGST) “or” any other matter in State List (No Resolution Required)
A-268
Pending (will be discussed after Supply chapter)
A-268 A
Omitted (Related to Service Tax Apportionment)
A-269
Income Tax GST
Name of CESS Health & Education Cess GST Compensation Cess
DOB Finance Act, 2018 GST Compensation Act,
2017
Rate 4% 3% to 290%
Levied on Tax Value of supply
Nature Direct Tax Indirect Tax
16

Taxes on sale “or” Purchase of goods and Tax on consignment of goods Except
A-269A shall be assigned to the States.
A-286
No law of supply shall impose, a tax on the supply of goods or services , Where
supply takes place:
 Outside the State
 In the case of Import / Export
17

Chapter – 3
Introduction Of GST
Before GST discussion firstly we will have to find out what was the problem in
old indirect tax system.
Problems & Limitations in old system
 Multiple tax
 Multiple taxable event
 Cascading effect
 No uniformity
 Classification issue
 Different department if different types of taxes
 Higher compliance and so on ……
 To remove above problems govt. introduced GST laws in India ; w.e.f. 1 July,
2017 [ in J&K 8th
July Onwards].
 Picture after GST laws [w.e.f. 1st
July, 2017)
1) Multiple taxes  GST
2) Multiple taxable events  Supply
(manufacturing , sales etc.)
3) Assessee names  Supplier ( Taxable person )
(manufacturer , seller , etc. )
18

4) Intra state  Intra state
Interstate  Inter State
International trade  Inter State
5) Double tax  No double tax (classify what is SOS or SOG)
6) Cascading effect  No Cascading effect (seamless flow of credit)
7) No uniformity  ONE Nation, ONE Tax (5%, 12%, 18%, 28%)
(Multiple state = multiple tax)
8) Different department  ONE department
9) Higher compliance cost  Lesser compliance cost as compared to old
indirect tax.
Example for understanding:
Double Tax Cascading
Value = 10,000 Value = 10,000
Excise duty @ 10%= 1,000 VAT @12.5% = 1,250
= 11,000 =11,250
S.Tax @ 15% = 1,500 S.Tax @ 15% = 1,687
G. Value = 12,500 = 12,937
[same value i.e. 10K पर र tax ) (tax पर र tax )
NOW,
Problem kya hai?  प
Solution kya hai?  प
Doubts coming in mind  ????
1. GST article  Article 246A
19

2. GST list  No List
3. GST entry  No Entry No.
4. GST liye constitutionGovt. wants simultaneously power
Amend ?
 Constitution Amendment Bill – 122
 Constitution Amendment Act – 101
Article 246A : Special Provision with respect to GST
Article 246A(1) Article 246A(2)
Intra - state supply Inter - state supply
Laws made by Parliament & Laws made by only Parliament
State Assembly
GST Charge GST Charged
CGST, SGST, UTGST IGST
Above GST is not applicable on following goods :-
 Petroleum Crude
 High Speed Diesel
 Motor spirit
20

 Natural Gas
 Aviation Turbine Feul
GST on these goods will be applicable, when recommended by the GST
Council.
Meaning of Intra state supply / Interstate supply / Zero-rated
supply (export) [Sec 8, 7 and 16 of IGST Act]
Section 8 OF IGST ACT Section 7 OF IGST ACT
INTRA - STATE SUPPLY
Where the location of supplier
(and)
Place of supply(POS)
 Same State or
 Same UT
CGST +  Payment
CGST + UTGST to S.G.
(Consumption State)
(Payment to C.G)
INTER - STATE SUPPLY
Where the location of supplier
(and)
Place of supply(POS)
 Two different states
 Two different UT
 Two different country
 One state , One UT
 Supply to SEZ
 Supply by SEZ
IGST
(Payment to C.G)
SGST
21

Sec 16 OF IGST ACT (Zero Rated Supply)
No GST
GOVT THUMB RULE – “IMPORT THE GOODS, HIGHER THE TAXES,
“EXPORT THE GOODS, NOT THE TAXES.
Example (SECTION 7, 8 & 16):-
Location
Of supplier
Actual
Supply
Place of
supply
Nature GST
Delhi Delhi Haryana Inter IGST
Delhi Delhi Delhi Intra CG+SG
Delhi U.P. Delhi Intra CG+SG
Chandigarh Chandigarh Chandigarh Intra CG+UT
Chandigarh A.N. A.N Inter IGST
Haryana Delhi Haryana(SEZ) Inter NO GST
SEZ
SEZ
ZZ
Outside India
Supply
EXPORT Supply
Zero rated supply
22

Haryana USA USA Inter NO GST
USA Mumbai Mumbai Inter IGST
China China Gujarat Inter IGST
CRUX: Actual place of provision in not relevant for determination of “NATURE
OF SUPPLY”.
Taxes Subsumed under GST
Central Level
 Central Excise duty
 Additional duty of excise
 Custom duty CVD & SAD
 Central Surcharge & Cess
 Service Tax
State Level
 State VAT
 Central Sales Tax
 Luxury Tax
 Entry Tax
 Entertainment Tax Except when levied by local authorities
 Taxes of Advertisements
 Purchase tax
 Taxes on betting, gambling & Lottery
 State Surcharge & cess
23

Few taxes which have not been subsumed into GST:
 Basic Custom duty
 Entertainment Tax levied by Local authorities
 Stamp duties
 Road tax
 Toll Tax
 Municipal Taxes
Focus Area: Tobacco and tobacco products would subject to GST. In addition,
the Centre would have the power to levy Central Excise duty. (i.e Double
Taxation)
24

Chapter – 4
Introduction of GST
 GST was first levied by France in 1954.
 Last country to adopt GST is Malaysia.
 GST is a destination/consumption based tax.
 India has the highest GST rate in the world i.e. 28% next highest rate is in
Argentina @ 27%.
 GST is technically paid by supplier but it is actually funded by customers.
 Indian GST has 4 General rate structures ( applicable on goods or services or
both) , viz. 5%, 12%, 18%, 28% and 3% or 0.25% special rate (applicable
only on goods) on precious metals like gold , rough diamond etc.
Australian Model Kelkar-Shah Model
Canadian Model Bagchi –Podder Model
Model of GST
25

 India follows dual GST model (CGST & SGST)
 GST model is adopted from Canada.
 Currently Brazil & Canada also follows dual GST Model.
 GST is value added tax (VAT) on activity of supply of goods/services or both.
 There is a special purpose vehicle called GSTN to carter to IT needs of GST.
GSTN  Goods & services tax network (GST Portal). [The CG & SG holds
24.5% each equity shares respectively and the remaining 51% are held by Non-
Governmental institutions (LIC Housing Finance, which owns 11%, and HDFC Bank, ICICI Bank, HDFC Ltd
and NSE Strategic Investment Co, each owning about 10%.). & GSTN contacted Infosys in 2015 to
build, run the network and system for the GST.]
GSTIN  Goods & services tax Identification number.(15 DIGIT)
Two most important concept
 Concept-1 Taxation Principles
Destination Principle Origin Principle
i.e. , the country / state where goods are
consumed or designed will get the tax
instead of origin state / country.
i.e. , the country / state from where
goods are originated will get the tax
instead of destination state.
Example : GST / Excise duty Example : CST
 Concept-2 Taxation System
1. First Point Collection
2. Last Point Collection
3. Multipoint Collection
4. Multipoint Collection with ITC method
Follows in GST
26

Value Added Tax : Concept [ MOST IMPORTANT]
Example 1 : GST rate(assume) = 18%
Intra State Intra State
Value = 10,000 Govt.
CGST = 900 1800 . Cost- 14,160
SGST = 900
Total 11,800 Cost = 10,000
V/A. = 2,000
12,000
CGST = 1080
SGST = 1080
14,160
Manufacturer
Delhi
Exa
mple
:
GST
rate
=
18%
c
Wholesaler
Delhi
Customer
Delhi
X Y Z
C.G-900 [ITC]
S.G-900 [ITC]
27

Example 2: GST rate [assume] = 18%
Value = 10,000 900 CG Cost to consumer
CGST = 900 900 SG = 14,160
SGST = 900 Cost = 10,000
= 11,800 VA = 2000
12,000
IGST = 2,160
14,160
Revenue to Govt. = C.G.= 1080 = 900+360+180
S.G.= 900+180
How to Flow our GST ?
Total check point = 13
For Consultancy
Professional Client
(CA / CS / CMA)
Delhi Delhi Haryana
Intra Inter
28

Now start process
of GST collection
Check Point 6: Value of Supply (Sec. 15)
Check Point 7: Rate of GST
Check Point 8: Who is liable to pay GST
liability to Govt.?
Recipient
Supplier
3rd Party
(i.e. ECO)
Forward Charge Reverse Charge Special Provision
under GST
Check Point 9: When is GST liable to be paid? i.e. TIME OF SUPPLY /point of taxation?
Check Point 10
A
Audit
I
Invoice
M
Manner of
payment
R
Return
R
Record
R
Registration
R
Refund
ITC
Input tax
credit
Check Point 11: Assessment & inspection under GST
Check Point 12: Appeal , Advance ruling etc.
Check Point 13: Interest , Penalty & other penal proceedings
YES
No question
of GST
Check Point 1: Element covered in the definition of goods/services or both
NO
Check Point 2: Whether activity covered under GST Supply ?
YES
No question
of GST
NO
Check Point 3: Whether place of supply
in taxable territory i.e. India?
YES
No question
of GST
NO
Check Point 4: Whether person covered
under definition of Taxable Person?
YES
No question
of GST
NO
Check Point 5: Whether such supply covered
under 100% exemption notification?
NO
GST levied but
not collected
YES
GST levied &
collected
29

Check Point – 1
Definition of goods & services
Goods means Services means
Section 2(52) of CGST Act Section 2(102) of CGST Act
Provision – Any kind of “Movable Property” Anything
Excludes  Money Excludes  Goods
 Securities  Money
 Securities
Includes  Actionable Claims, growing crops, grass
Includes  Activity relating to
use of money where separate
consideration is charged.
 Money : Section- 2(75)
Money means
 Indian legal tender
 Foreign currency
 Cheque
 Draft
 Promissory notes/ Bill of exchange etc.
Does not include ;
Any currency that is held fir its numismatic value
30

(Face Value not equal to Market Value)
Security ( not defined in GST Act)
Normal meaning:
 Shares
 Debentures
 Bonds
 Mutual Funds units etc.
 Activity relating to use of money
Transactions only in money Transactions not only in money
GST (not levied) GST( Yes Levied)
Example :  Money deposit in Bank Example : Commission
 Money withdrawn from Bank Draft
 Money change Chit fund etc.
 Actionable Claims
Actionable claim other than Betting/Gambling/Lottery then no GST
Example :
Particulars Goods Services
Grass Yes NO
Growing crops Yes NO
Building NO Yes
Mobile Yes NO
Shares NO NO
Facilitating or arranging
transactions in shares
(Brokers)
NO Yes
31

Units of mutual fund NO NO
Commission on draft NO Yes
Furniture Yes NO
Telecom NO Yes
Rs. 100 note NO NO
Old coins Yes NO
32

Chapter - 5
Charging Section of GST
Section – 9 of CGST Act, 2017
Section – 5 of IGST Act, 2017
Section – 7 of UTGST Act, 2017
Section–9 of CGST Act, 2017
Sec. 9(1) Sec. 9(2)
Sec. 9(3)
& Sec. 9(4)
Sec. 9(5)
General Provision
1. When GST levied?
2. On which taxable
event?
3. On which value?
4. Rate of GST?
5. Goods excluded
from GST?
6. Collection procedure?
5 Petroleum
Products
When GST
Levied?
Reverse Charge *ECO
Special provision
Under GST
*ECO – Electronic Commerce Operator
Section 9(1)
Activity must be Supply
Supply of Goods / Services or both
Goods / Services does not include:
 5 Petroleum Products
33

 Money
 Security
 Electricity
 Alcoholic liquor for human consumption
Goods or services
Other than negative goods Value determined u/s 15
 Tax rates 20% to 20% =
CGST SGST IGST
Maximum Rate
 Collection of GST as may be prescribed
 Tax Paid by “ *Taxable Person” [section 2(107)]
*Taxable Person
 A person who is registered (or)
 Liable to be registered
 u/s 22 to 24
CRUX:
1. GST GST PERSON REGISTRATION पर DEPEND र
|
2. GST REGISTRATION THRESHOLD LIMIT BUT GST
THRESHOLD LIMIT अलग |
3. As per Section 9 of CGST Act Specifies that the CG & SG may specify rate of
tax not exceeding 20% but at present;
 Four rates of CGST has been prescribed for goods, viz., 2.5%, 6%, 9% &
14%
 Four rates of CGST has been prescribed for Services, viz., 2.5%, 6%, 9%
& 14%
40%
%
34

Remember:
 CGST Rate = SGST Rate = UTGST Rate
 IGST Rate = CGST Rate + SGST/UTGST Rate
Section 9(2)
GST applicable on *5 PP from the date when GST council will recommend.
* 5 PP
1. Petroleum crude
2. High speed diesel
3. Motor spirit (commonly used as Petrol)
4. Natural gas
5. Aviation turbine fuel
Section 9(3) & Section 9(4) : Reverse Charge
Section 2(98): Reverse charge means the liability to pay tax by the recipient of
SOG or SOS or both instead of supplier.
Two types of RCM under GST
RCM-1 = Section 9(3)
RCM-2 = Section 9(4)
Reverse Charge : Section 9(3) & Section 9(4)
Section 9(3) Section 9(4)
Notify = Goods or Services NOTIFY = Persons/Goods/Services
Process = Supplier
Specified G/S
Recipient
GST Discharge by recipient
35

Example of section 9(3)
Insurance agent of Insurance agent services Insurance Co.
ABC Ins. Co.
Supplier Notified u/s 9(3) Recipient
Liable to pay GST
RCM Apply
Example of section 9(4)
Unregistered Person Supply of Notified Notified registered person
Goods/services
Liable to pay GST
RCM Apply
List of notified / specified goods covered under RCM
S.No. Supplier of Goods Supply of Goods Receiver of Goods
1
2
3
4
5
6
7
Agriculturist
Agriculturist
Agriculturist
Any person who
manufactures silk yarn
Agriculturist
SG/ UT/ LA
CG/ UT/ UT/ LA
Cashew nuts not
shelled or peeled
Bidi wrapper
(Tendu leaves)
Tobacco leaves
Silk yarn
Raw cotton
Supply of lottery
Used vehicles, seized
& confiscated goods
or old used goods,
waste & scrap
Any *R.P
Any R.P
Any R.P
Any R.P
Any R.P
Lottery distributor
or selling agent
Any R.P
Any R.P
36

8 Any registered person Priority sector lending
certificate
Any R.P
*R.P = Registered Person
Agriculturist : sec 2(7) of CGST Act
Agriculturist means a individual or HUF who undertakes cultivation of land.
a) By own labour
b) By the labour of family
c) By servants on wages payable in cash or kind or by hired labour under
personal supervision of any family member.
List of notified / specified Services covered under RCM
S.No. Service provider
Supplier of service
Name of service Service receiver
1. Foreign party Import of service Any business entity
located in T.T.
2. Goods transport
agency
Transport of goods  Any person registered
under (GST, UTGST ,
SGST)
 Any factory
 Any society
 Any co-operative
society registered in
India
 Any body corporate
 Any partnership firm
(AOP)
 Casual taxable person
3. Advocate /firm of
advocate
Advocate / legal service Any business entity
4. Advocate /firm of Arbitral tribunal Any business entity
37

advocate
5. Any person Sponsorship service Any body corporate or
partnership firm
6. Director or body
corporate
Service of director or
body corporate
Company or body
corporate located in
Taxable territory
Circular issued
clarifying applicability
of RCM on services of
directors to Company/
Body Corporate-
 Services rendered
by directors not
in capacity of
employee to
attract GST and
also RCM
[Entry No. 6 of N/N
13/2017-CT (Rate) –
CBIC Circular No.
140/10/2020- GST
(dated 10th June,
2020)]
7. Insurance agent Insurance agent service Insurance co.
8. Recovery agent /
recovery agent office
Recovery agent service Bank or financial
institution
9. Foreign party
(person located in
NTT)
Ocean freight
(transportation of goods
by vessel from place o/s
India to custom
clearance India)
Importer
10. Author/Music co./ Copyright services related Publisher , music
38

Photographer/ Artist to literary, musical,
artistic work.
composer, producer
11. Govt. All services of Govt.
Except:
 Service by dept. of
post
 Renting of immovable
property
 Service in relation to
aircraft/ vessel
 Service of
transportation of
goods
Business entity
12. Govt. +
(CG/SG/UT/LA)
Renting of immovable
property
Any person registered in
taxable territory
13. Member of
overseeing
committee
Any service RBI
14. Individual direct
selling agent (DSA)
other than a body
corp., PP or LLP
Direct selling agent
service (DSA)
Banking co.
Or
NBFC
15. Business facilitator Any service Banking co.
16. An agent of
business
correspondent
Any service Any registered person
located in taxable
territory
17. Any person other
than corp.
Security service Any registered person
located in taxable
territory
18 Author Transfer of copyright Publisher (located in
TT)
19 Any person other Renting of motor Any body corporate
39

than a body
corporate, who
supplies the service
to a body corporate
and does not issue
an invoice charging
GST@ 12% (CGST-
6% + SGST/UTST-
6%) to the service
recipient
vehicle designed to
carrying passengers
where the cost of fuel
is included in the
consideration charged
from the service
recipient
( located in TT)
20 Lender Lending of securities Borrower
21 Any person Services supplied by
any person by way of
transfer of development
rights (TDR) or Floor
Space Index (FSI)
(including additional
FSI) for construction of
a project by a promoter.
promoter
22 Any person Long term lease of land
(30 years or more) by
any person against
consideration in the
form of upfront amount
(called as premium,
salami, cost, price,
development charges or
by any other name)
and/or periodic rent for
construction of a
project by a promoter
Promoter
40

Section 9(4)
If ‘Promoter’ (Recipient) purchased input goods and services used in the
construction of project from the unregistered person, the he is liable to pay
GST under RCM on the supplies made from unregistered supplier under Section
9(4) of CGST Act, 2017.
41

Chapter - 6
Taxable Event - SUPPLY
Taxable event  Supply + Composite / mixed supply
Sec.7 of CGST Act, 2017 Sec.8 of CGST Act, 2017
Relevant provision related to supply
 Section-7 = Scope of supply
Section-8 = Tax liability on composite supply & mixed supply
 Schedule I = Activity : treated as supply even if made without
Consideration [Free supply बन )
 Schedule II = Activity or transactions treated as “SOG” or “SOS”.
 Schedule III = Negative list of GST (total =8 Para) not liable to GST
Section 7 : Scope of supply
SCOPE OF SUPPLY
Section 7(3)
NA
Section 7(1)
a. General definition
b. IMPORT OF SR.
c. Schedule –I
without
consideration
Section 7(1A)
Schedule II
Total 7 Para
Section 7(2)
Schedule III
Total 8 Para
42

Section 7(1)(a) [INCLUSIVE DEFINITION]
Two main conditions under sec. 7(1) (a)
1. With consideration
+
2. In the course or furtherance of business
Two Doubts Arise In Student Mind?
 If no consideration
Sol: Then not a supply u/s 7(1) (a) but may be covered under u/s 7(1) (c)
 If not in the course or FOB
Sol: Then not a supply u/s 7(1) (a) but may be covered under u/s 7(1)(b)or
7(1)(c).
All forms of supply
(or)
Of Goods Of Services
Such as (Examples)
• Sale
• Transfer
• Disposal
• Barter
• Exchange
• License
• Lease
• Rental
Made or agreed to be made
For a consideration
By a person
In the course of business or FOB
STD BELL
|
Both
(or)
43

Main key points under sec. 7(1)(a)
 Goods 2(52) - already done
 Consideration 2(31)
 Services 2(102) – already done
 Person 2(84)
 Business 2(17)- Self read
Consideration 2(31)
Consideration includes :
 Any payment whether in money or non-money
 Any act or negative act
Except any subsidy given by CG/SG
IMPORTANT POINTS:
Security deposit-  Adjustable Consideration
 Non-Adjustable No consideration
Features of Consideration
Must be exist
Or at the time of provision of activity
Must be certain
CRUX of 7(1)(a)
Supply of Goods or services or both
With consideration
Not in the course of FOB
Sec. 7(1)(a)
In the course or FOB
In the course (or)
Not in the course of
FOB
may be covered
u/s 7(1)(b)
may be covered
u/s 7(1)(c)
Without consideration
44

Some questions
1. Activity without consideration whether can be treated as “supply”
Yes ! under sec. 7(1)(c)
2. Activity for considerationwhether will always treated as “supply”
No, it must be in course or FOB
Section 7(1)(b) link with Para 4 of Section 7(1)(c)+Schedule-I
Section 7(1)(b) Section 7(1)(c)
 Import of service
 By any person
 From any person
 for a consideration
 whether or not in the course or
furtherance of business .
 Import of service
 By any person
 From Related party
Other Estb. o/s India
 Made without consideration
 In the course or FOB
Related Party - Definition given under explanation 1 of section 15 of CGST ACT.
Persons shall be deemed to be related if they fall under any of the categories below:
 Officer/ director of one business is the officer/ director of another business
 Businesses are legally recognised as partners
 An employer and an employee
 Any person holds at least 25% of shares in another company either directly or indirectly
 One of them controls the other directly or indirectly
 They are under common control or management
 The entities together control another entity
 They are members of the same family
45

Family u/s 2(49) of CGST Act.
Family means
 The spouse & the children of the person and
 The parents, grandparents, brother, sister of the person if they are
wholly dependent on the said person.
Summary diagram of sec. 7(1)(b) with Para 4 of 7(1)(c)
Treatment of Import of Goods under GST
CUSTOM , IGST
CRUX of IOS
 For consideration = check 7(1)(b)
 For without consideration = check 7(1)(c) PARA 4
Import of service
Overseas
supplier
Not in the
course of FOB
7(1)(b)
In the course
or FOB
With consideration Without consideration
Indian
recipient
Not in the
course of FOB
In the course
or FOB
From
• RP
• O.EST o/s
India
From
• Other than
Specified
Person
Not Supply
7(1)(b) 7(1)(c)
Supply
Act CGST CGST CGST
Nature
Inter-state
(Sec 7 of IGST)
Inter-state
(Sec 7 of IGST)
GST liab
discharged by
RCM
Exempt (except
OIDAR*)
RCM
*Online Information Database access & retrieval sr.:
Supplier will be liable to pay GST on UIN (Unique Identification Number) basis
46

Section 7(1)(c)
Activities or transactions to be treated as supply even if made without
consideration.
Refer - Schedule 1
Total - 4 Para
Section 7(1)(c) + Schedule 1
Para 1
Permanent transfer of Business asset when ITC has been availed
4 Conditions:
 Permanent transfer +
 Business asset +
 ITC Availed +
 Without consideration
Example:
SOL: It is a supply u/s 7(1)(a) , since all conditions are satisfied.
Para 2
Supply of goods or services or both
Between related party Between deemed distinct person
In the course of business or FOB
Mr. X Mr. Y
Sale of car: INR 5,00,000
Car dealer: No ITC Claimed
47

Special point
Employer gift Employee
Upto ₹ 50,000 Excess ₹ 50,000
in a F.Y in a F.Y
Not a supply It is a supply and whole value shall be chargeable to Tax
Related Person (Ex – 1 Of Sec 15)
Employer/ Employee Others
50,000 limit No Exemption Limit
Para 3
Supply of Goods
Principal Selling Agent
Supply of Goods
Buying
agent
Principal
48

CRUX of 7(1):
After “determination of supply”, next question arises regarding
classification of Supply  बन ?
Question: Why is classification necessary???
Reasons 
 Different of GST in case of SOG or SOS.
 Different coding system
Summary Diagram of Sec. 7(1)(a), 7(1)(b), 7(1)(c)
Section 7(1)(a) Section 7(1)(b) Section 7(1)(c)
All goods/ services
With consideration
In the course or FOB
Import of service
With consideration
By any person
From any person
Whether FOB or not
Permanent t/f
Business Asset
ITC availed
P-1 P-2 P-3 P-4
SOG/S
Between
RP/ DDP
FOB
PA
AP
IOS
FOC
BY AP
From RP or other
est. o/s India
FOB
Supply , Supply
u/s Section 7(1A) [New Addition]
Mr. X Transaction
Carrying Out
supplier (taxable person)
With
Consideration
Without
Consideration
7(1)(a) / 7(1)(b) only check
sec 7(1)(c)
7(1)(c) P-1, P-2, P-3, P-4
49

 Goods = HSN Code
 Service = SAC
 Different valuation rules
 Different ITC rules
 Different “time of supply” provision
 Different “place of supply” provision
 And so on……
Solution  Section 7(1A)
Or
Section 7(3)
Or
Section 8 of CGST ACT
Points to be noted
SUPPLY
Determination of Supply Classification of Supply
Section 7(1)(a) Section 7(1A)
Section 7(1)(b) Section 7(3)
Section 7(1)(c) Section 8
Section 7(1A)
Where certain activities or transactions constitute a supply in accordance with
the provision of sub section (1) they shall be treated either as SOG or SOS
as referred in Schedule-II.
Schedule-II:
Activities or transactions to be treated as supply of goods or supply of services
50

Summary diagram of section 7(1A)
Total = 7 Para
5 entries 8 entries
Supply of goods
Supply of
services
If not covered in 18 Entries then, refer Sec. 8 & Sec. 7(3)
18 entries
Transfer
Title Right
transfer of title in goods
Immediate transfer Future date
Para 1 link with 5(f)
transfer of “right in
goods”
1(a) 1(c)
Supply of goods
transfer of “right to
use” any goods
1(b) 5(f)
Supply of services
Renting
Land & Building
Other Immovable
Property
2(a)/ 2(b)
Para 2 link with Para 5(a)
5(a)
Supply of services
51

 Sale of land & building covered under Schedule-III
Para 3
Para 5
Supply of Services
 Renting of immovable property other than Land/ Building.
 Construction services Except 100% consideration received after completion or
occupation – Earlier.
 Temporary transfer of IPR
 I.T. software development etc.
 Negative Act ( not to do something)
 Transfer of “Right to use” any Goods
52

Para 6
Composite and Mixed Supply
Section 2(30)
Composite Supply
(Natural Bundle)
Means a supply made by a taxable
person to a recipient consisting of two
or more taxable supply of goods/
services or any combination thereof,
which are naturally bundled, one of
which is a principal supply.
Tax treatment (Sec.8)
Treated as a supply of such principal
supply.
Example :
 Shirt + Packing
Section 2(74)
Mixed Supply
(Unnatural Bundle)
Means two or more individual supplies
of goods or services or any
combination made in conjunction with
each other by a taxable person for a
single price where the supply does not
constitute composite supply.
Treated as a supply of that particular
supply which attracts highest rate of
tax.
Example :
 Canned Foods
Composite Supply
Specified composite supply
Non- specified composite
supply
Restaurant
Supply of services
Work Contract
Related to
Immovable
property
Related to
Movable
property
Refer Section 8
53

 TV + Warranty
 Laptop + Laptop bag
 AC + AC Installation
 Boarding School
 Hotel + Laundry Service
 Sweets
 Chocolates
 Dry fruits
 Juice etc.
 Box of Tie + Watch + Wallet
Para 4
Para 7
Transfer of Business Asset
4(a)
Transfer / disposal of
business asset whether with
or without consideration
Putting goods to private use or
making available goods to other
person for non-business purpose
4(b)
Supply of Goods Supply of Service
4(c)
Cessation of business;
Goods in stock:
Deemed Supply
Supply of Goods
Unincorporated
AOP/ BOI
It’s Members
Supply
Supply Of Goods
54

Summary diagram of Section 7(1A)
Negative List of GST (Schedule-III) (Total 8 Para)
Para 1
Employee Service Employer
In the course or in relation to employment .
Neither as SOG nor as SOS
Para 2
Service By any Court or Tribunal established under Law.
Para 3
M.P / MLA / CAG / IAS etc....
Para 4
Funeral , burial , transportation of deceased.
Para 5
Sale of land / building subject to 5(b).
Para-1
 SOG
 SOS
 SOS
Para-2
 SOS
 SOS
Para-3
 SOS
Para-4
 SOG
 SOS
 SOG
Para-5
 SOS
 SOS
 SOS
 SOS
 SOS
 SOS
Para-6
 SOS
 SOS
Para-7
 SOG
Section-7(1A)
55

Para 6
Actionable claim other than batting/ gambling/ lottery.
Para 7
Para 8
12 Nautical
Mile
200 Nautical
Miles
Outside Indian
boundary
Bangladesh
NTT NTT
NO GST
12 NM
200 NM
Outside Indian
boundary
W/H
HC
Sale
BCD
GST
Custom
GST
Custom
GST
56

AMENDMENTS IN SUPPLY CHAPTER:
Amendment - 1
Circular No. 121/40/2019 GST dated 11.10.2019 has clarified that the above special
dispensation applies only to supply of service by way of grant of liquor licenses by
the State Governments as an agreement between the Centre and States and has
no applicability or precedence value in relation to grant of other licenses and
privileges for a fee in other situations, where GST is payable. It may be noted that
services provided by the Government to business entities including by way of grant
of privileges, licences, mining rights, natural resources such as spectrum etc. against
payment of consideration in the form of fee, royalty etc. are taxable under GST.
Tax is required to be paid by the business entities on such services under reverse
charge.
Supply
Supply Supply
7(1)(a)
7(1)(b)
Summary of Sec.7 and Schedule- I, II & III
7(2)
Schedule III
7(1)(c)
Schedule-I
Total 4 Para Total 8 Para
After above provisions
supply ?
7(1A)
Schedule-II : Total 8 Para
18 entries
• 5 SOG
• 13 SOS # How to read schedule
• 1st: Schedule-III
• 2nd: Schedule-I
• 3rd
: Schedule-II
57

Amendment - 2
Individual donors provide financial help or any other support in the form of donation
or gift to institutions such as religious institutions, charitable organisations, schools,
hospitals, orphanages, old age homes etc. The recipient institutions place a name
plate or similar such acknowledgement in their premises to express the gratitude.
When the name of the donor is displayed in recipient institution premises, in such
a manner, which can be said to be an expression of gratitude and public recognition
of donor’s act of philanthropy and is not aimed at giving publicity to the donor in
such manner that it would be an advertising or promotion of his business, then it
can be said that there is no supply of service for a consideration (in the form of
donation). There is no obligation (quid pro quo) on part of recipient of the
donation or gift to do anything (supply a service). Therefore, there is no GST
liability on such consideration.
Some examples of cases where there would be no taxable supply are as
follows:-
(i) “Good wishes from Mr. Rajesh” printed underneath a digital blackboard
donated by Mr. Rajesh to a charitable Yoga institution.
(ii) “Donated by Smt. Malati Devi in the memory of her father” written on the
door or floor of a room or any part of a temple complex which was constructed
from such donation.
In each of these examples, it may be noticed that there is no reference or mention
of any business activity of the donor which otherwise would have got advertised.
Thus, where all the three conditions are satisfied namely the gift or donation is
made to a charitable organization, the payment has the character of gift or
donation and the purpose is philanthropic (i.e., it leads to no commercial gain) and
not advertisement, GST is not leviable. [Circular No. 116/35/2019 GST dated
11.10.2019]
58

Chapter - 7
Valuation of supply
Transaction value means the price actually paid or payable for the said supply
Transaction Value = Assessable Value
(If following 2 conditions are satisfied)
 Buyer and supplier are not related party.
+
 Price is the sole consideration for the supply.
Value for GST liability = 15(1)
+ 15(2)
_ 15(3)
XXX
Computation of value of supply
Particulars Amount (₹)
Price actually paid or payable for said supply u/s 15(1)
Add: Inclusions u/s 15(2)
 Any taxes, taxes, cess, fees and charges which are not
subsumed under GST Laws. (Note-1)
 Any amount that the supplier is liable to pay but
incurred/met by the recipient. (Note-2)
 Incidental expenditure. (Note-3)
 Interest or late fees or penalty for delayed payment.
(Note-4)
 Subsidies directly linked to the price except Govt. subsidy
value after adjustment u/s 15(2). (Note-5)
XXX
XXX
XXX
XXX
XXX
XXX
59

Value after adjustment u/s 15(2)
Less :
Exclusions u/s 15(3)
 Pre-supply discount
 Post-supply discount subject to condition
XXX
XXX
XXX
Value for GST Liability XXX
Note-1: Taxes not subsumed under GST
Examples:
 Import duty
 Anti-dumping duty
 Safeguard duty
 Other custom duty
 Professional tax
 Toll tax
 Property tax
 Stamp duty
 Electrical duty
 Excise duty on tobacco etc…….
Note-2: Selling commission, Cost of transportation, Cost of insurance
Note-3: packing expense, special packing exp., commission, inspection charges,
warranty charges, cost of transportation, and cost of insurance
Note-4: Price actually paid = 50,000
Credit period = 3 months
Interest on late payment = 10% p.a.
Delayed period = 2 months
Interest (50,000 x 10/100 x 2/12) 833.33
60

Value for GST (50,000 + 833.33) = 50,833
Note-5: Price charged for supply = 80,000
Above price after giving the effect of following 2 items:
 Subsidy from private trust = 10,000
 Subsidy from Central Govt. = 15,000
Value for supply = 90,000
CRUX
Section 15(3)
 Pre-supply discount
Example:
Contracted Price/List price = 1,00,000
80,000
Already adjusted Not adjusted
Subsidy minus Subsidy minus
• Govt. subsidy= No treatment
• Other than govt. = Add back
• Govt. subsidy= Subtract (-)
• Other than govt. = No treatment
Silent
Subsidy minus
61

Discount = 50%
Value = ?
Value (1, 00,000 – 50%) = 50,000
Post-supply discount
Post supply discount shall be excluded from the value if following two
conditions are satisfied:
 Established in the agreement & linked with relevant invoice +
 ITC attributed to discount have been reversed by recipient
Rule 35: Value of supply inclusive of GST
Where the value of supply is inclusive of GST, the tax amount shall be determined
in the following manner:-
Tax Amount = Value inclusive of Taxes X GST rate
100 + GST rate
Value of GST = Value inclusive of Taxes X 100
100 + GST rate
OR
= Value inclusive of GST – GST
Example:
Contracted price = 2, 06,000
(Inclusive of GST @18%)
Value = 1, 74,576.27
GST = 31,423.73
Example:
Seem Ltd. Had made a supply of ₹ 11,50,000 to Reema Ltd. Following items are
not adjusted
1) Tax levied by Govt. = 30,000
2) CGST & SGST = 35,000
3) Packing charges = 10,000
62

4) Interest on delayed payment = 35,000
Compute value for supply?
Solution: 11, 50,000 + 30,000 + 10,000 + 35,000 = 12, 25,000
As per ICSI [for exams] As per ICAI [Alt – 2]
Transaction value 11, 50,000 Transaction value 11, 50,000
+ M.T 30,000 + M.T 30,000
+ Packing charges 10,000 + Packing charges 10,000
+ GST - + GST -
+ Interest 35,000 + Interest -
Value of supply 12,25,000 Value of supply 11, 90,000
Credit note issued 35,000
Example: Contracted price (Incl. of GST) = 11, 80,000
GST rate = 18%
Following items are not included in contracted price 
 Cost of transportation = 25,000
 Cost of packing = 10,000
 Commission = 5,000
 Installation Charges = 10,000
Solution:
As per ICSI [for exams] As per ICAI [Alt – 2]
Transaction value 11, 80,000 Transaction value (Note 1) 10,00,000
+ Cost of transportation 25,000 + Cost of transportation 25,000
+ Cost of packing 10,000 + Cost of packing 10,000
+ Commission 5,000 + Commission 5,000
+ Installation Charges 10,000 + Installation Charges 10,000
Value of supply
(inclusive of GST)
12,30,000 Value of supply (exclusive
of GST)
10,50,000
Value of supply
(exclusive of GST)
10, 42,373
63

(12, 30,000 X 100/ 118)
Note 1: Transaction value = 11, 80,000 X 100 / 118
= 10, 00,000
Section 15(4)
If value cannot be determined as per section 15(1), then value shall be determined
in such manner as may be prescribed (Rule 27 to Rule 31)
 Rule 27: value of supply of goods / services where consideration is not
wholly in money.
 Rule 28: value of supply of goods / services between related person or
deemed distinct person.
 Rule 29: value of supply of goods made or received through an agent
 Rule 30: value of supply of goods / services on cost basis.
 Rule 31: best judgement assessment.
Rule 27: Value of supply of goods / services where consideration is
not wholly in money
Applicability: Partly money or partly non-money or wholly non-money.
Value of supply shall be:
1) Open market value of such supplies (OMV)
2) If OMV is not available then:
Money Value = XXX
+ Money value of in kind = XXX
Consideration
XXX
3) If value not determined under point 1 & 2 then, value of supply of like kind a
quality
4) If value not determined under point 1, 2 & 3 then , refer rule No. 30 & 31
in that order
64

Rule 28: value of supply of goods / services between related person or deemed
distinct person
Applicability: Supply between related person or deemed distinct person.
1) Open market value of such supplies (OMV)
2) If value not determined under point 1 & 2 then, value of supply of like kind
and quality
3) If value not determined under point 1, 2 & 3 then , refer rule No. 30 & 31 in
that order
Rule 29: Value of supply of goods made or received through an Agent
Applicability: Principal  Agent
Agent  Principal
1. Open Market Value or 90% of price charged by recipient
Option  whichever is less
2. If value not determined under point 1 then , Refer rule No. 30 & 31 in that
order
Rule 30: value of supply of goods / services on cost basis
If value not determined under Rule- 27, 28, 29 then value shall be:-
110% of cost of production
“Or”
Cost of manufacturing
“Or”
Cost of acquisition
“Or”
Cost of provision of service
65

Rule 31: Best Judgement Assessment / Residuary Method
If value cannot be determined under Rule No. 27 to 30, then value shall be
determined by department, using reasonable means.
Rule 31A: Valuation in case of Lottery, betting, gambling & horse races
The value of supply of lottery shall be deemed to be
 100 / 128 of the higher of following
 face value of ticket or
 the price as notified in the Official Gazette by The Organizing State.
Explanation: – For the purposes of this sub-rule, the expression-
“Organizing State” has the same meaning as assigned to it in rule 2 (1) (f) of the Lotteries
(Regulation) Rules, 2010.
[i.e., the SG which conducts the lottery in his own-territory or sells its tickets in the territory of
any other state.]
Note: GST Rate on lottery has been changed- now, lottery is subject to a uniform rate of
28% (replacing earlier rates- 12% on Lottery run by SG and 12% on Lottery Authorized by SG).
Consequent to above change, Rule 31-A (dealing with valuation of lottery) has been amended to
remove separate existing provisions relating to valuation of lottery.
Note: The value of supply of actionable claim in the form of chance to win in
betting, gambling or horse racing in a race club shall be 100% of the face
value of the bet or the amount paid into the totalisator
Rule 32A: Value of supply in cases where Kerala Flood Cess is applicable.
Value of supply in cases where Kerala Flood Cess is applicable.- The value of
supply of goods or services or both on which Kerala Flood Cess is levied under
clause 14 of the Kerala Finance Bill, 2019 shall be deemed to be the value
determined in terms of section 15 of the Act, but shall not include the said
cess.
66

Section 15
15(1) 15(4)
Summary diagram of Valuation
15(2) 15(5)
15(3)
Transaction value If value not
determined u/s 15(1)
Addition in T.V. Special Provision
Deletion in T.V.
• If seller and buyer:
not RP
+
• •Price is sole consi.
Rules
5 points Rule 32
Discount
(Pre – Post)
27 28 29 30 31
• OMV
• + MV
+ Kind value
• Similar
supply
value
• Rule 30
• Rule 31
• Similar
supply
value
• Rule 30
• Rule 31
• Rule 30
• Rule 31
• OMV
• No MV
• OMV
“or”
90%
less
Cost x
110%
Best
judgement
assessment
Value by
Department
67

Chapter- 8
Input Tax Credit
Concept of ITC
Input Tax Credit
Raw material
Input service
Capital goods
CGST + SGST
CGST + UTGST
ITGST
Take benefit of
input tax and
adjustment with
output tax
Input Tax Availment Input Tax Utilisation
…
Sec. 49, 49A, 49B
(Payment of GST)
Sec 16 Eligibility & conditions for taking ITC
Sec 17 Apportionment of blockage of ITC
Sec 18 Availability of ITC in special circumstances
Sec 19 ITC in case of Job work
GST on capital goods
Converted into final goods
Supply
GST
68

INPUT TAX
Govt. ?
Seller
Burden in hands of?
Buyer
burden, ITC |
 Eligible Person: Registered person other than Person covered u/s 10.
 Purpose: In the course “Or” FOB
After above discussion such registered person shall comply all the below mentioned
conditions :-
(Recipient can avail ITC if he satisfies all the following conditions-)
 He [Receiver] is in the possession of tax invoice “or” Debit note, as the
case may be
 He [Receiver] has received the goods/services
 Tax charged in respect of such supply has been actually paid to Govt [by
Supplier]
 He [Receiver] has furnished the Return u/s 39(GSTR-3)
After satisfaction of all above conditions recipient can book/ avail ITC.
69

CRUX:
Important Points:
1) Availability of ITC to recipient has been dependent on the payment of tax
by supplier. If the recipient fails to pay the amount of supply along with the
tax payable within 180 days from the date of invoice , the recipient will be
liable to pay along with output tax liability , an amount equal to ITC with
interest.
2) Where the goods against an invoice are received in lots or instalments, the
registered shall be entitled to take credit upon receipt of the last lot or
instalment.
3) Where the registered person has claimed depreciaton on the tax component
of the cost of capital goods & plant and machinery under the provision of
Person
Registered Person Unregistered Person
Under section 10
Check: 4 conditions
Other than section 10
In the course or FOB Not in the course or FOB
No question of ITC
No question of ITC No question of ITC
All conditions are
satisfied
If any one condition is
not satisfied
No question of ITC
Check: Case coverage u/s 17(5)
Yes No
No question of ITC ITC availed
Note: The diagram is subject to Rule 36(4)
Buyer govt. |
70

Income Tax Act, 1961. The ITC on the sais tax component shall not be
allowed.
Example:
Time limit for claiming ITC as follows :
 Due date of GSTR-3/ 3B for the month of September following the end of
financial year
“OR”
 Actual date of furnishing the annual return.
Whichever is earlier
Example: Invoice related to F.Y 19-20, what will be the last date for claiming
ITC
CASE-I: Annual return furnishing date = 2/12/2020
CASE-II: Annual return furnishing date = 8/9/2020
Solution: CASE-I CASE-II
20/10/20 20/10/20
2/12/20 8/9/20
Cost of Plant & Machinery = 4,00,0000
GST @18% = 72,000
Total 4,72,000
4,00,000 72,0000
Claim depreciation u/s 32 of
Income Tax Act If depreciation
claimed, then No ITC
If ITC claimed, then
No depreciation
My Opinion: claiming ITC is more beneficial
Earlier Earlier
71

Amendment in ITC utilisation
1/07/2017 to 31/1/2019
credit USE Payment
credit use |
• IGST Credit
• CGST Credit
• SGST Credit
Till date: Govt. order
IGST / CGST / SGST
use problem
ITC GST Liability
IGST
CGST
UTGST
IGST
CGST
UTGST
Problem
Meaning: Assume, IGST payment , for IGST payment we can use:-
Now: Govt. amended the law and introduced new Section 49A
1st order= IGST
Now Problem arise
CGST & SGST GST
Govt. added proviso in section 49(5)
72

II-Order = CGST
III-Order = SGST
New picture amendment = CGST Amendment Act
Section Order/ Rank
preference
Credit GST liability
49A Ist IGST I-IGST
II-CGST
III-SGST
Proviso of 49(5) IInd CGST I-CGST
II-IGST
Proviso of 49(5) IIIrd
SGST I-SGST
II-IGST
Now Problem arise
amendment Order OR” Manner then?, Act
|
Govt. added proviso in section 49(5)
Govt. inserted new Section 49B and give power to GST council for
change by notification.
Now, picture after change (notification issued)
Order Credit GST liability
I IGST I-IGST
II-CGST “or” SGST (as desired)
II CGST I-CGST
II-IGST
III SGST I-SGST
II-IGST
73

CRUX of ITC Utilisation
Please keep in mind
IGST , CGST & last SGST |
Example of ITC Utilisation
ITC GST liablity  I-Adjustment II-Adj. III-Adj.
IGST 40,000 60,000 40,000 15,000 5,000
CGST 35,000 20,000 - 20,000 -
SGST 35,000 20,000 - - 2,000
AMENDMENTS IN ITC: [RULE – 36 OF CGST RULES]
Restriction on availment of ITC – ITC in respect of invoices/ debit notes not
uploaded by Suppliers in GSTR-1 further restricted from 20% to 10% [Sec
36(4) (EARLIER inserted on 9th Oct, 2019)- now amended w.e.f. 1st Jan,
2020]
ITC Utilisation
w.e.f. 1/07/17
to
31/01/2019
w.e.f 1/04/19
to
till date
w.e.f 1/02/19
to
31/03/2019
Order ITC GST
IGST IGST
CGST
SGST
CGST CGST
IGST
SGST SGST
IGST
Order ITC GST
I IGST IGST
CGST
SGST
II CGST CGST
IGST
III SGST SGST
IGST
Order ITC GST
I IGST IGST (1st)
CGST or SGST
(in any manner)
II CGST CGST
IGST
III SGST SGST
IGST
74

Latest Amendment [for Applicability in June 2021 wait for ICSI Supplement but for Dec 2021 100% applicable]
In Rule 36 (4), with effect from the 1st day of January, 2021,-
(a) for the word “uploaded”, at both the places where it occurs, the word
“furnished” shall be substituted; (b) after the words, brackets and figures
“by the suppliers under sub-section (1) of section 37”, at both the places
where they occur, the words, letters and figure “in FORM GSTR-1 or using the
invoice furnishing facility” shall be inserted; (c) for the figures and words “10
per cent.”, the figure and words “5 per cent.” shall be substituted.
Section 17 : Apportionment of Credit or Blockage of Credit
Banking Company
Option
ITC claimed on actual basis Total ITC = XXX
( Exempted supply = NO) - 50% Of ITC = XXX
( Taxable supply = YES) Eligible ITC = XXX
(Notional Basis)
Section 17(5): Blocked ITC
Input used method
Personal purpose
Input used for
Business purpose
Exempted supply*
Taxable supply
(includes Zero Rated Supply)
No
Yes
No
Yes
*Exempted supply
• RCM case
• Security transaction
• Sale of land/ building
• Interest or discount
75

No ITC in the following cases:
1) Motor vehicles for transportation of persons having approved seating
capacity of not more than thirteen persons (including the driver), vessels
and aircraft, except when they are used for making the following taxable
supplies, namely:—:
i. Further supply of motor vehicle, vessel & aircraft
ii. Transportation of passengers
iii. Transportation of goods [Related to Vessel & Aircraft]
iv. Imparting training on motor vehicle, vessel or aircraft
Except above 4 cases No ITC in case of motor vehicle/ Vessel/ Aircraft
2) Services related to Motor vehicle/ Vessel/ Aircraft
Note: [ITC ALLOWED also in below mentioned case)
where received by a taxable person engaged—
(I) in the manufacture of such motor vehicles, vessels or aircraft; or
(II) in the supply of general insurance services in respect of such
motor vehicles, vessels or aircraft insured by him
3) Food and beverages, outdoor catering , beauty treatment, health services,
cosmetic & plastic surgery, leasing, renting or hiring of motor vehicles, vessels
or aircraft referred to in clause (a) or clause (aa) except when used for the
purposes specified therein, life insurance and health insurance.
EXCEPT: inward supply & outward supply is same then ITC allowed.
4) Membership of a club, health & fitness centre.
Motor vehicle/ Vessel/ Aircraft
covered under
specified cases
Not covered under
specified cases
ITC allowed
Blocked ITC
(No ITC)
76

5) Travel benefits extended to employees on vacation such as leave travel
concession
Provided that the input tax credit in respect of such goods or services or
both shall be available, where it is obligatory for an employer to provide
the same to its employees under any law for the time being in force
6) Work contract service related to immovable property (other than plant &
machinery) except inward & outward supply is same.
7) Goods or services received by taxable person for construction of immovable
property (other than plant & machinery) on his own amount.
8) Goods or services received “NR” except import of goods.
9) Goods or services used for personal consumption.
10) Goods lost / stolen / destroyed / written off or disposed by way of gift or
free sample.
11) Any tax paid in accordance with the provision of section 74/129 and 130.
ITC
Section 18 Availability of credit in special circumstances
(a) Section 18(1)(a)
(b)
Unregistered person Registered person
Liable for registration
Stock purchased &
consumed
Stock purchased &
not consumed
GST but
ITC |
Balance stock
ITC allowed on balance stock
ITC allowed
77

(c)
ITC allowed on Capital goods also but after reduction of prescribed %age
ITC on capital goods = XXX
-5% each quarter or part = (XXX)
ITC allowed = XXX
(d)
ITC allowed on Capital goods also but after reduction of prescribed %age [5%
each quarter or part).
Unregistered person Registered person
Voluntary registration
Stock purchased &
consumed
Stock purchased &
not consumed
GST but
ITC |
Balance stock
ITC allowed on balance stock
ITC allowed
Composition Scheme Normal Scheme
Conversion date
Input purchased &
supplied
Input purchased but
balance in stock
NO ITC ITC allowed
Exempted supply Taxable supply
Taxability date
Input purchased &
supplied
Input purchased but
balance in stock
NO ITC ITC allowed
78

Section 18(2)
Time limit: Upto 1 year from the date of issuance of Tax invoice.
Section 18(3)
In case of amalgamation, merger, demerger, succession of companies, Unutilised ITC
can be carried forward to amalgamated, resulting co.
In the case of demerger, ITC will be apportioned in the ratio of the value of
assets of the new units as specified in the demerger scheme. Here, “value of
assets” means the value of the entire assets of the business irrespective of
whether ITC has been availed thereon or not.
79

Section 18(4)
(a)
ITC reversed on Capital goods also but after reduction of prescribed %age
ITC on capital goods = XXX
-5% each quarter or part = (XXX)
ITC not allowed = XXX
(b)
ITC reversed on Capital goods also but after reduction of prescribed %age [5%
each quarter or part].
Section 18(6)
In case of supply of capital goods or plant & machinery, on which ITC has been
taken, the registered person shall pay an amount equal to ITC taken on said capital
goods or plant & machinery reduced by such percentage (i.e. 5%) or the tax on
transaction value of such capital goods, plant & machinery determined under
section 15, WHICHEVER IS HIGHER.
Normal Scheme Composite Scheme
Conversion date
Input purchased &
supplied
Input purchased but
balance in stock
ITC allowed ITC not allowed
Taxable supply Exempted supply
Exemption date
Input purchased &
supplied
Input purchased but
balance in stock
ITC allowed ITC not allowed
80

Chapter - 9
Accounts & Records
 Location of maintenance of books of accounts
At his principle place of supply (mentioned in certificate of registration)
 Mode
Manual or electronic (at the option of registered person)
 Audit under GST
If aggregate turnover > 2 crores  by CA/CMA
[For FY 2018-19 & FY 2019-20 : GST Audit required if ATO> 5 crores]
Amendment : Every registered person except any assessee of C.G or S.G or
local authority whose accounts are subject to audit by CAG.
Eligible Assessee
Assessee
Registered person Unregistered person
• production / manufacture of goods
• inward / outward supply
• balance stock of goods
• ITC availed
• output tax paid or payable
• others, as may be prescribed
Owner of warehouse or Transporter
Types of books of account
• Consigner
• Consignee
• other relevant, as may be
prescribed
81

Analysis of Amendment [Proviso to Rule 80(3) substituted– N/N
79/2020-CT w.e.f. 15th Oct, 2020]
1. Registered Person whose ATO upto 2 crores = Annual Return Filing
Has been made Optional (for FY 2017-18, 2018-19 and 2019-20)
and GST Audit and furnishing of copy of Audited Annual Accounts
& Reconciliation Statement Not Required
2. Registered Person whose ATO > 2 crores but upto 5 crores =
Annual Return Filing is Compulsory and GST Audit and furnishing
of copy of Audited Annual Accounts & Reconciliation Statement
Not Required for FY 2018-19 and 2019-20
3. Registered Person whose ATO > 5 crores = Annual Return Filing is
Compulsory and GST Audit and furnishing of copy of Audited
Annual Accounts & Reconciliation Statement Required
Amendment: Clarification about the calculation for FY (17-18)
 For Audit Turnover  1/4/17 - 1/7/18 + 1/7/18 - 31/3/18
 For Reconciliation: Turnover  only 1/7/18 - 31/3/18
 Power of Commissioner: Commissioner or above than Commissioner (officer)
may notify class of person for :
Additional books of A/c Relaxation in books of A/c
Sec. 35 (sub-section 3) Sec. 35 (sub-section 4)
 Penal Provision: If any default arise u/s 35(1) or 35(2) then punishment u/s 73
or 74
1 April 2017 1 July 2018 31 March 2018
Birth of GST
82

 Time limit for maintaining books of A/c: 72 months from the date of annual
GST return
Eg. F.Y 19-20 = due date of annual return = 31/12/20
+ 6 years
31/12/26
 Who is party of an appeal / revision: 1 year after disposal
“or”
72 months (6 years) from due date of annual GST return.
“Whichever is later”
Example : a) 30/6/2026 + 1 year  30/6/2027
31/12/2020 + 6 years  31/12/2026
b) 30/6/2024 + 1 year  30/6/2025
31/12/2020 + 6 years  31/12/2026
83

Chapter - 10
Audit Under GST
Audit General Audit Special Audit
Section Sec. 65 of IGST Sec. 65 of IGST
Direction given by Assistant
Commissioner or above officer
previous approval of Commissioner
Undertaken by Commissioner or any other
officer authorised by him
CA or CMA (if the value has not
correctly declared or ITC wrongly
availed)
Co. CA र ,
independent person |
Prior notice to
registered
person
15 days N.A.
Completion
limit
3 month from the date of
commencement (+) 6
months extension by
commissioner
90 days + 90 days (extension)
Final report Within 30 days after
completion
N.A.
84

Chapter - 11
Compensation Act, 2017
1) It is a kind of tax which will be collected over & above of the declared
taxes by the GST council i.e. CGST / SGST / UTGST / IGST.
2) GST Compensation Cess imposed u/s 8 of GST Compensation Act, 2013.
3) It has to be charged on the luxuries & SIN items only. Ex- Cars, Ciggarates,
Tobacco, Pan-masala etc.
4) It would be imposed for the next 5 years only . Therefore No Cess will be
levied.
5) It will be charged on the Intra-state & Inter-state transaction over & above
GST.
6) It has been levied to pay the compensation to the State for loss of revenue
in result of implementation of GST.
7) If any fund at the end of 5 years, the excess amount will be shared by the
State & central Govt.
8) The state account will be audited by “CAG” therefore an amount will be
cleared to the state for the loss of revenue every year but preliminary
amount shall be paid on every 3 month / 2 month / half yearly as the case
may be.
9) Base year is F.Y 2015-16
85

10) Growth rate is 14% p.a.
Example: If the base year revenue for 2015-16 for a concerned State, calculated as per
section 5 is one hundred rupees, then the projected revenue for financial year 2020-21
shall be as follows – Projected Revenue for 2020-21=100 (1+14/100)
5
11) Compensation cess will be applicable on goods or services or both
12)All the tax payers under GST except section 10 person will collect & remit
the cess to central govt.
13)ITC shall be allowed to the assesse but permitted only for payment of cess.
14) Rates (Maximum)
Pan-masala = 204%
Cigarattes = 290%
Cars = 3% - 15%
86

Chapter - 12
Composition Levy
What is the difference between Composition scheme & Normal scheme?
Normal Scheme (NS) Composition Scheme (CS)
1 Covered u/s 9 of CGST Act Covered u/s 10 & 10(2A) of CGST Act
2 ITC available on inward supply.
Eg.
ITC not available on inward supply.
Eg.
3 GST payable = Output tax
= (-) ITC
Net GST payable = XXX
Eg. X GST (1200) Y (NS)
GST (1500)
Z
Net GST = 1500-1200 = 300
TAX payable =Turnover X concessional
rate
= (-) ITC
TAX payable = XXX
Eg. X GST (1200) Y (CS)
GST (1500)
Z
Net GST = 1500-1200 = 1500
GST paid
Mr. Y to
claim ITC
Mr. X Mr. Y
Mr. Z
Normal Supply
GST paid
Mr. Y cannot
claim ITC
Mr. X Mr. Y
Mr. Z
Composite Supply
87

4 Reg. person can make intrastate
supply as well as interstate supply.
Example:
Composite taxable person cannot make
interstate supply.
CRUX: Purchase …
Supply only intra …
Example:
5 Any Reg. person can opt normal
scheme.
Only specified Reg. person can opt
composite scheme.
(Aggregate turnover = 1.5 crore / 75
lacs /50 lacs )
6 Return under GST
File 3 monthly returns
+
1 Annual return
Total= 37 returns
Now, 2 monthly returns & 1 annual
return (Total 25 return).
GSTR-1 , GSTR-3B , GSTR-9
File quarterly return
+
1 annual return
Total = 5 returns
Now, 1 annual return
+
1 annual return
Total 2 returns
GSTR-4 , GSTR-9A
7 Higher tax rates
(5%, 12%, 18%, 28%)
Lower tax rates
(1%, 1%, 5%, 6%)
Y (Delhi)
A (Delhi)
X (Delhi)
Z (Bihar) B (Bihar)
Y (Delhi)
A (Delhi)
X (Delhi)
Z (Bihar) B (Bihar)
88

Section 10:
1. Normal tax procedure are not practical or cost efficient to small suppliers for
such small suppliers GST law provides for composition levy scheme under GST.
2. Such scheme are devised for procedural case for small suppliers &
administrative convenience
3. Composition scheme is provided for simple taxation system. (Aggregate
turnover is taxed at flat rate therefore this system is known as Flat Rate
Taxation System)
4. Such scheme is optional :
 Scheme is available only when it is opted.
 Benefit of this scheme cannot be claimed unless the option is exercised
as per the prescribed procedure = Rule 3.
 Option may be exercised at the time of registration or past registration.
 Scheme has no lock in period i.e. supplier may opt out this scheme at
anytime.
8 Detailed books of A/c Less books of A/c
9 Classification of goods is required No classification is required
10 Audit is required if aggregate
turnover > 2 crore [For 18-19 & 19-20
A.T.O is more than 5 Crore]
No question of Audit under GST
11 Burden of GST can be shifted on
consumer
Concessional Tax cannot be collected
from consumer
12 Normal registered person will issue
tax invoice
Composite dealer will issue Bill of
Supply
89

Section 10: Eligibility Limit & Eligible Assessee
Eligible Assessee: Registered person
Eligibility Limit: depends on normal state or special category state.
CASE 1: Normal state (includes Assam, J&K, and Himachal pradesh)
Special category state* (8 notified states)
*8 Special category states
Preceding Financial year
Eligible
• Aggregate turnover= upto 150 lakh
• Aggregate turnover= upto 75 lakh
upto 150 lakh
upto 75 lakh
Current Financial year
more than 150 lakh
more than 75 lakh
• No GST liability
• pay concessional
rate of tax
• No ITC
• burden of tax
cannot be shifted
• GST payable
• ITC allowed
• burden of tax on
customers pocket
Normal state
Special cat. state
Himachal
Pradesh
1. Himachal Pradesh
2. Arunachal Pradesh
3. Meghalaya
4. Nagaland
5. Manipur
6. Mizoram
7. Sikkim
8. Tripura
Uttarakhand
90

Important Note:
1) Section 10 overruled section 9(1)
Means
Normal tax on outward supply pay ,
Outward supply प concessional tax pay |
In other words: Section 10 complete GST ko overrule Except 9(3) & 9(4).
Agar inward supply RCM covered RCM GST even if assesse
ne composition scheme opt |
Example:
CASE 1: Normal Scheme
Miss C
Mr. D
Mr. A
Mr. B Miss E
GST charged on both
outward supply.
91

CASE 2: Composite Scheme
Amendments
Particulars Old law Amended law
1) Change is Turnover limit
 Normal state
 Special category state
100 lakhs
75 lakhs
150 lakhs
75 lakhs
2) Special category state 9 states 8 states (Assam shifted to
normal state)
Aggregate turnover: section 2(6)
The law says that “aggregate turnover” means the aggregate value of all
taxable supplies (excluding the value of inward supplies on which tax is
payable by a person on reverse charge basis), exempt supplies, exports of
goods or services or both and inter-state supplies of persons having the same
Miss C
Mr. P
Mr. A
Mr. B Miss Q
Concessional tax rate
to apply
92

Permanent Account Number, to be computed on an all-India basis but excludes
Central tax, State tax, Union territory tax, Integrated tax and cess
Explanation 1
For the purposes of computing AGGREGATE TURNOVER of a person for
determining his ELIGIBILITY To pay tax under this section,
 the expression “AGGREGATE TURNOVER” shall include the value of
supplies made by such person from the 1st day of April of a financial year
up to the date when he becomes liable for registration under this Act, but
shall not include the value of exempt supply of services provided by way of
extending deposits, loans or advances in so far as the consideration is
represented by way of interest or discount
Explanation 2:
For the purposes of determining the tax payable by a person under this
section,
 the expression “TURNOVER in State or Union territory” shall not
include the value of following supplies, namely:––
(i) supplies from the first day of April of a financial year up to the
date when such person becomes liable for registration under this
Act; and
(ii) Exempt supply of services provided by way of extending deposits,
loans or advances in so far as the consideration is represented by
way of interest or discount’.
Important point
A person who opts to pay tax under clause (a) or clause (b) or clause (c),
may supply SERVICES (other than those referred to in Paragraph 6(b) of
Schedule II), of value not exceeding
 10% of TURNOVER in a State or UT in the preceding FY or
 Rs 5,00,000,
93

Whichever is higher
Explanation: For the purposes of second proviso, the value of EXEMPT SUPPLY
of services provided by way of extending deposits, loans or advances in so far
as the consideration is represented by way of interest or discount shall not
be taken into account for determining the value of TURNOVER in a State or
UT
Note: limit of 10% or 5 lakh, whichever is higher will be in addition to
exempt interest/discount
The registered person shall be eligible to opt under sub-section (1), if—
a) save as otherwise provided in sub-section (1), he is not engaged in the
supply of SERVICES;
b) he is not engaged in making any supply of GOODS which are not leviable
to tax under this Act;
c) he is not engaged in making any inter-State outward supplies of GOODS;
d) he is not engaged in making any supply of GOODS through an
electronic commerce operator who is required to collect tax at source
under section 52; and
e) he is not A MANUFACTURER* of such GOODS as may be notified by
the Government* on the recommendations of the Council; and
N/N 8/2017-CT: 4 Goods notified
1) Tobacco and Manufactured tobacco substitutes
2) Ice cream and other edible ice, whether or not containing cocoa
3) Pan Masala
4) Aerated Water
f) he is neither a casual TP nor a NRTP.
Provided that , where more than one registered person are having the same
Permanent Account Number issued under the Income tax Act, 1961, the
registered person shall not be eligible to opt for the scheme under sub-section
(1) unless all such registered persons opt to pay tax under that sub-section.
94

Example
Example
Aggregate turnover= 90 lakh
may provide service upto
Mr. A
Eligible for scheme
= 90 lakh X 10% = 9 lakh
”or”
= 5 lakh
Higher 9 lakh
Delhi
Mr. X
Haryana Punjab
TO: 40 lakh TO: 70 lakh TO: 30 lakh
Aggregate turnover = 140 lakh
Eligible for Composite Scheme
In C.Y assessee wants
to deal in:
Delhi Punjab Haryana
Goods Goods Goods & Services
Eligible limit in C.Y subject to 150 lakh subject to 150 lakh subject to 150 lakh
but service of max.
5 lakh allowed
Higher of
= 30 lakh X 10% = 3 lakh
”or”
= 5 lakh
95

NOTE: Composite scheme Branches & withdraw
withdraw |
Now, Composition Scheme Eligible for Supplier of Services also
[section 10(2A)]
(2A) Notwithstanding anything to the contrary contained in this Act but
subject to the provisions of section 9 (3) and (4) (i.e., Supplies under RCM),
 a registered person, not eligible to opt to pay tax under sub-section (1)
and sub-section (2),
 whose AGGREGATE TURNOVER in the preceding financial year did not
exceed Rs 50 lakhs, may opt to pay, in lieu of the tax payable by him
under Section 9(1),
 AN AMOUNT of tax calculated at such rate as may be prescribed, but
not exceeding 3% of the turnover in State or turnover in Union
territory,
a) he is not engaged in making any supply of goods or services which are not
leviable to tax under this Act;
b) he is not engaged in making any inter-State outward supplies of goods or
services;
Eligible
Aggregate turnover= upto 50 lakh Upto 50 lakh
more than 50 lakh
• No GST liability
• pay concessional
rate of tax
• No ITC
• burden of tax
cannot be shifted
• GST payable
• ITC allowed
• burden of tax on
customers pocket
96

c) he is not engaged in making any supply of goods or services through an
electronic commerce operator who is required to collect tax at source under
section 52;
d) he is not a manufacturer* of such goods or supplier of such services as may
be notified by the Government* on the recommendations of the Council;
and
e) he is neither a casual TP nor a NRTP;
Provided that, where more than one registered person are having the same
Permanent Account Number issued under the Income-tax Act, 1961, the
registered person shall not be eligible to opt for the scheme under sub-section
(2A) unless all such registered persons opt to pay tax under that sub-section.
Note:
Sec 10(2A) = Tax calculated at such rates as prescribed (but not exceeding
3% CGST) Thus,
 Maximum C/Tax rate = @6% (3% CGST + 3% SGST)
 Actual C/Tax rate = As prescribed = as prescribed by Rule * Rule 7
(prescribing C/Tax Rates) has been recently amended to provide for
C/Tax rates of such suppliers.
 C/Tax rate = 6% of TO in the State/ UT (3% CGST + 3% SGST)
RULE 7: Rate of Composition Levy / Concessional Rate
Particulars CGST SGST Total
Manufacturer of Goods 0.5% 0.5% 1% of TO
Trader of Goods 0.5% 0.5% 1% of TS
Restaurant Services 2.5% 2.5% 5% of TO
Services provided with above
category
0.5% 0.5% 1% of TO
97

Only supply of services 3% 3% 6% of TS
Note: In simple words, RP opting for Sec 10(2A) shall be liable to pay C/Tax
on TO in the State/UT (such TO shall include non-exempt as well as exempt
supplies). However, exempt service by way of income in form of
interest/discount will remain excludible in view of Explanation 2 to Sec 10.
Other Conditions & restrictions for composition scheme
Section 10(2) & Rule 5:
1) Supplier of non taxable goods under GST is not eligible for this scheme.
2) If supplier making Inter state supply, then not eligible for this scheme.
3) Supplier can issue only Bill of supply instead of tax invoice.
4) A dealer registered under composition scheme is not required to maintain
detailed books of A/c as required by normal tax payer.
5) A composition dealer is not allowed to avail ITC of GST on inward
supply.
6) The taxable person is required to furnish only one return i.e. GSTR-4 on
a quarterly basis and one on annual return in GSTR-9A.s
Amendment: The GST council in its 32nd
meeting held on 10/1/19has decided
the compliance under Composition scheme shall be simplified as now they
would need to file ONE ANNUAL RETURN , but payment of tax would remain
quarterly (along with a simple declaration). This amendment shall be effective
from 1/4/19.
CRUX
Particulars Before 1/4/19 After 1/4/19
GSTR-4 (return) Quarterly Annually
Payment Quarterly Quarterly
98

GSTR-9A (return) Annually Annually
7) Composition scheme is opened for all business that are associated with
same PAN.
8) Tax payer making supply of goods through on ECO is not eligible for
scheme.
9) He shall maintain the words “Composition taxable person, not eligible to
collect tax on supply” at the top of bill of supply issued by them.
10) He shall mention the word “Composition taxable person” on every notice
board or sign board.
11) Such a dealer cannot claim ITC of concessional rate paid under this
scheme.
Rule 3 & Rule 4 Availment of Composition Scheme
 Separate intimation is required
 Form GST CMP-01
 Time limit: prior to appointed day, but not later than 30 days, or such further
period as may be extended by commissioner.
Migrated Taxpayer
Fresh GST reg.
application filed wherein
Comp. scheme opted
Currently in Normal
scheme, subsequently
switch to Comp. scheme
(An already existing reg.
person under old law through
provisional reg.) opting for
Comp. scheme
Intimation through reg.
application itself which shall be
considered as an intimation to
pay tax u/s 10
Separate intimation required
(before start F.Y for which
comp. scheme opted
Form GST CMP-02
Part B of Form GST REG 01
Rule 3(1)- mentioned below
Option shall be effective from
appointed day under rule 4(1)
Option shall be effective from
the effective date of reg.
Beginning of Financial year
Availment of Composition Scheme
99

NOTE: Intimation submitted post appointed day, but within 30 days/ extended
date.
 He shall not collect any tax from buyer.
 He shall issue Bill of supply instead of tax invoice.
 He shall also furnish stock details under rule 3(4).
 Form GST CMP-03
 It shall be filed within 90 days from the date on which option of CS
exercised.
RULE 3(5)
Option exercised for one State / UT = Deemed exercised for all States / UT on
PAN India basis
RULE 6
Rule 6(1)
Once opted for this scheme is valid for lifetime so long as he satisfy all the
conditions mentioned in the said sections & rules
100

Auto withdrawl
(may take place at
anytime in C.Y)
Discretionary withdrawl
of supplier
(may take place at
anytime in C.Y)
Denial by Proper Officer
Option lapses if aggregate TO
exceeds 1.5 crore/ 75 lakh/ 50
lakh, intimation of withdrawal
should be given by supplier
(within 7 days of occurrence of
such event)
Intimation of withdrawal shall
be given by supplier before
withdrawal
as he has reason to believe
that supplier was ineligible “or”
has contravened conditions)
• SCN: CMP-05
• Reply: CMP-06
• Order: CMP-07 (30 days)
Form GST CMP-04
Form GST CMP-04
Rule 6(2)/(3)/(4)/(5)/(6)
Withdrawal from Composition Scheme
101

Chapter -13
Demand & Recovery
Penalty under Demand & Recovery
S. No. Action by Tax Payer Bonafied case Malafied case
1 Tax & interest paid before
show cause notice
No penalty 15% of tax
2 Tax & interest within 30
days of show cause notice
No penalty 25% of tax
3 Tax & interest paid within
30 days of order
Higher of 10% of
tax “or” ₹ 10,000
50% of tax
4 Tax & interest paid after
30 days of order
Higher of 10% of
tax “or”₹ 10,000
100%
Time limit of show cause notice & order
Show cause notice Order
Bonafied Within 2 year & 9 months
of services from due date
annual return filing.
Within 3 years from due date
of annual GST return
Malafied Within 4 years & 6 months
from the dye date of annual
GST Return
Within 5 years from due date
of annual GST return
Any amount of
tax collected
but not paid
No Time Limit Within 1 year from date of
issue of notice
102

Rule 142(1A) Notice and Order for demand of amounts payable under this Act
GST payable ascertained by PO – before issuance of SCN, that shall be
communicated to taxpayer in Form GST DRC-01A (Part A)
The proper officer shall may, before service of notice to the person chargeable
with tax, interest and penalty, under Section 73 (1) or Section 74 (1), as the
case may be, shall may communicate the details of any tax, interest and
penalty as ascertained by the said officer
Reason of Amendment:
Council Decided that such communication shall not be a mandatory
requirement. Rather, it shall be at DISCRETION of tax officer. Accordingly, Rule
142(1A) has been amended (w.e.f. 15th Oct, 2019) – therein the word ‘shall’
have been substituted with the word ‘may’.
103

Chapter - 14
E-Way Bill
Only in case of goods  Rule 138
1) Objectives of E-Way Bill (why introduced?)
 To control / stop practice of bogus invoice related to goods.
 To control tax evasion in country.
 For track movement of goods
2) E-Way Bill ( Mandatory)
Yes, mandatory subject to *condition.
*Condition  If value of consignment exceeds ₹ 50,000 (for less value –
optional)
Exception: In the following cases e-way bill is mandatory irrespective of value of
consignment
 Movement of handicraft goods
Example-1 A truck contains 3 consignment based on 3 invoices, Invoice-1 for ₹
65,000, invoice-2 for ₹ 45,000 & Invoice-1 for ₹1, 00,000. How many E-Way
Bills will be generated?
Answer: E-Way Bill will be generated for Invoice 3 & 4.
Example-2
E-way bill
Mandatory without exemption limit
Principal Job worker
104

# In case of handicraft goods same treatment of example 2 will prevail
# Meaning of value:
Particulars Consolidated bill E-Way Bill
Value of taxable goods 20,000 20,000
Value of exempted goods 35,000
Total 55,000 20,000
GST @28% 5,600 5,600
Cess @ 15% 3,000 3,000
Total value 63,600 28,600
No E-Way Bill
3) Where required  Intra / Inter?
E-Way bill for Inter as well as Intra State. However, for Intra state movement
of goods  value for E-Way Bill may vary
Example:
 Delhi  Intra  1,00,000 (value)
 Bihar  Intra  2,00,000 (value)
4) E-Way Bill made by?
 E-Way bill can be made by any of the above person by using GSTIN
₹ 25,000
Delhi
Mr. VG
Job Worker
Mandatory e-way bill
Supplier Transporter Recipient
105

GST Summary Book by Vivek Gaba Sir (1).pdf

GST Summary Book by Vivek Gaba Sir (1).pdf

Recomendados

Recomendados

Más contenido relacionado

La actualidad más candente

La actualidad más candente (20)

Similar a GST Summary Book by Vivek Gaba Sir (1).pdf

Similar a GST Summary Book by Vivek Gaba Sir (1).pdf (20)

Último

Último (20)

GST Summary Book by Vivek Gaba Sir (1).pdf