CA Sumit Jalan

[ACA, DipIFR, B.Com.(H)]

*INCLUDING NOTIFIED PROVISIONS OF FINANCE ACT (No. 2), 2019

SALIENT FEATURES:
✓ A ready reference material for both academic as well as official purposes.
✓ Simplified version of the provisions of GST laws along with the relevant Rules,
Notifications and Circulars
✓ Includes significant case laws
✓ Applicable for CA/ CS/ CMA examinations due in Apr/ May, 2020
✓ Solutions to all the past examination questions of CA/ CS/ CMA till Oct, 2019
✓ Tabular and pictorial representations of certain topics for easy understanding
✓ Amendments of past six months highlighted.
GST Simplified™ Ready Reckoner for Students and Professionals

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 GST Simplified™ Ready Reckoner for Students and Professionals

CA Sumit Jalan is a qualified Chartered Accountant and a GST enthusiast

(that is what he prefers calling himself rather than an expert). He graduated
from S.G.T.B. Khalsa College, University of Delhi, with Honors degree in
Commerce and was the topper in commerce at his school DPS, Patna. He
earned his Diploma in International Financial Reporting from ACCA, London.

A born leader and motivator, he is keenly sought after by his pupils as well
as colleagues for his simplifying approach towards any subject matter. On
the front of GST, he is the founder of GST Simplified™, an organization based
in New Delhi that takes care of GST compliance, consultancy and training
matters under his expert supervision. He has been invited as a guest speaker
at several seminars across the country. He also serves as the visiting faculty
at NIRC of ICAI. Till date, he has trained hundreds of students, professionals
and businessmen alike, in GST, from high school to the corporate level.

He has also been invited for several career counselling and motivational
sessions, to shape the young minds of India. His audience adores him for his
humorous, simple and friendly style of sharing knowledge.

Whenever he gets time from his busy schedule, he also maintains two blogs
with the following URL –
For GST – www.gstsimplified.wordpress.com
Thought provoking – www.sumittalks.wordpress.com

He dedicates all his success and achievements till date to his family, friends,
well-wishers, as well as his critics, whom he recognizes as the support
wheels to his bicycle throughout the journey.

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GST Simplified™ Ready Reckoner for Students and Professionals

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 GST Simplified™ Ready Reckoner for Students and Professionals

AA Appellate Authority
AAAR Appellate Authority for Advance Ruling
AAR Authority for Advance Ruling
AC (with DC) Assistant Commissioner
AC (with JC) Additional Commissioner
ADG Additional Director General
AO Assessment Order
AOP Association of Persons
AT Appellate Tribunal
BIS Bureau of Indian Standards
BoEn Bill of Entry
BOI Body of Individuals
BoS Bill of Supply
BRC Bank Realization Certificates
BSBD Basic Saving Bank Deposit
CA Chartered Accountant
CA, 1962 Customs Act, 1962
CA, 2013 Companies Act, 2013
CAG Comptroller and Auditor General
CBIC Central Board of Indirect Taxes and Customs
CC Compensation Cess
CCPC Central Consumer Protection Council
CEA Central Excise Act
CENVAT Central Value Added Tax
CEO Chief Executive Officer
CETA Central Excise Tariff Act
CFS Container Freight Station
CG Central Government
CGSTA Central Goods and Services Tax Act
CIN Challan Identification No.
CJ Chief Justice
CKD Completely Knocked Down
CMA Cost and Management Accountant
CPA Consumer Protection Act
CPC Civil Procedure Code
CPI Consumer Price Index
CrPC Criminal Procedure Code
CSD Canteen Stores Department
CST Central Sales Tax
CTA Customs Tariff Act
CTP Casual Taxable Person
CVD Countervailing Duty
CWF Consumer Welfare Fund
DC Deputy Commissioner
DCA Department of Consumer Affairs
DD Demand Draft
DG Director General
DGAP Directorate General of Anti-Profiteering
DGFT Director General of Foreign Trade
DGS Directorate General of Safeguards
Doc. Document

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 GST Simplified™ Ready Reckoner for Students and Professionals

DSA Direct Selling Agent

DSC Digital Signature Certificate
DTH Direct to Home
EBN e-Way Bill Number
e-CaL Electronic Cash Ledger
e-CrL Electronic Credit Ledger
ED Excise Duty
EHTP Electronic Hardware Technology Park
ELR Electronic Liability Register
EOU Export Oriented Unit
EPCGA Export Promotion Capital Goods Authorization
EPFMP Employees' Provident Funds & Miscellaneous Provisions
EPFO Employees’ Provident Fund Organization
ESI Employees’ State Insurance
ESIC Employees’ State Insurance Corporation
EVC Electronic Verification Code
FA Finance Act
FAO Food and Agricultural Organization
FG Finished Goods
FI Financial Institution
FIFA Fédération Internationale de Football Association
FSI Floor Space Index
FSSAI Food Safety and Standards Authority of India
FY Financial Year
GA Governmental Authority
GAAP Generally Accepted Accounting Principles
GE Government Entity
GOI Government of India
GPRS General Packet Radio Services
GPS Global Positioning System
GST Goods and Services Tax
GSTIN Goods and Services Tax Identification Number
GSTN Goods and Services Tax Number
GSTP Goods and Services Tax Practitioner
GTA Goods Transport Agency
HC High Court
HSN Harmonized System of Nomenclature
HUF Hindu Undivided Family
IBC Insolvency and Bankruptcy Code
ICD Inland Container Depot
IIM Indian Institute of Management
IPC Indian Penal Code
IPR Intellectual Property Rights
IRDAI Insurance Regulatory and Development Authority of India
IS Inputs Stock
ISD Input Service Distributor
ISF Inputs contained in Semi-finished/ Finished goods Stock
IT Information Technology / Income Tax
ITA Income Tax Act
ITC Input Tax Credit
JC Joint Commissioner
KFC Kerala Flood Cess
LA Local Authority
LLP Limited Liability Partnership

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 GST Simplified™ Ready Reckoner for Students and Professionals

LPG Liquefied Petroleum Gas

LUT Letter of Undertaking
MAFW Ministry of Agriculture and Farmers Welfare
MEA Ministry of External Affairs
MLA Member of Legislative Assembly
MLC Member of Legislative Council
MMS Multi Modal Shipment
MP Member of Parliament
MV Market Value
MYAS Ministry of Youth Affairs and Sports
NBFC Non-Banking Financial Company
NCCD National Calamity Contingent Duty
NCVT National Council on Vocational Training
NDEC Non Domestic Exempted Category
NEFT National Electronic Funds Transfer
NIC National Informatics Centre
NPE Non-Profit Entity
NPS National Pension System
NRTP Non-Resident Taxable Person
NSDC National Skill Development Corporation
NTOR Non-Taxable Online Recipient
NTT Non-Taxable Territory
ODC Over Dimensional Cargo
OTC Over The Counter
OTL Output Tax Liability
OTP One Time Password
PAN Permanent Account Number
PFRDAI Pension Fund Regulatory and Development Authority of India
PIC Person In-Charge
PMJDY Pradhan Mantri Jan Dhan Yojana
PO Proper Officer
RA Revisional Authority
RBI Reserve Bank of India
RC Registration Certificate
RCI Act Rehabilitation Council of India Act
RCM Reverse Charge Mechanism
REP Real Estate Project
RFID Radio Frequency Identification Device
RREP Residential Real Estate Project
RRR Reserve Bank of India Reference Rate
RTGS Real Time Gross Settlement
RTI Right To Information
SAD Special Additional Duty
SCN Show Cause Notice
SCVT State Council on Vocational Training
SEBI Securities and Exchange Board of India
SEZ Special Economic Zone
SFG Semi-Finished Goods
SG State Government
SGSTA State Goods and Services Tax Act
SKD Semi-Knocked Down
SPV Special Purpose Vehicle
SRA Societies Registration Act
SRS Simplified Registration Scheme

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 GST Simplified™ Ready Reckoner for Students and Professionals

SSC Sector Skill Council

ST Service Tax
STEP Science and Technology Entrepreneurship Park
STP Sales Tax Practitioner
SWIFT Society for Worldwide Interbank Financial Telecommunication
TBI Technology Business Incubator
TCS Tax Collected at Source
TDR Transfer of Development Rights
TDS Tax Deducted at Source
TIN Tax Identification Number
TIP Tax, Interest and Penalty
TRP Tax Return Preparer
TT Taxable Territory
UCEN Unique Common Enrolment Number
UGC University Grants Commission
UIN Unique Identity Number
UN United Nations
UN(PI)A, 1947 United Nations (Privileges and Immunities) Act, 1947
UQC Unit Quantity Code
UT Union Territory
UTGSTA Union Territory Goods and Services Tax Act
VAT Value Added Tax

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 GST Simplified™ Ready Reckoner for Students and Professionals

• The idea was first introduced in 2006, with the proposal of implementing GST from 2010.
• Destination based tax on consumption of goods and services.
• Tax on “supply” of goods and/ or services.
• Following taxes levied earlier, subsumed under GST
Central Govt. Taxes State Govt. Taxes
• Excise Duty • State VAT/ CST
• Additional Excise Duties • Luxury Tax
• Excise Duty (Medicinal & Toilet • Entry Tax & Purchase Tax
Preps) • Entertainment Tax
• Service Tax • Taxes on Advertisements
• CVD & SAD • Taxes on lottery, betting &
• Surcharges and Cesses gambling
• Surcharges and Cesses

List any six state levies, which are subsumed in GST.

[CA-Inter, May 2018]

Choose the correct alternative and give brief justification for your answer:
(a) Following is not a tax which has been substituted by GST:
(i) Central Excise Duty
(ii) Service Tax
(iii) State VAT
(iv) Profession Tax
[CMA-Final, Dec 2017]

(iv) Profession Tax

GST in India is levied on the basis of:

(A) Consumption principle
(B) Set-off against that payable principle
(C) Destination base principle
(D) Both consumption and destination base principle
[CS-Exec, Jun 2018]

(A) Both consumption and destination base principle

GST has replaced the following law(s):

(A) Customs
(B) VAT
(C) Central excise
(D) Both (B) and (C)
[CMA-Inter, Jun 2018]

(B) Both (B) and (C)

GST is a ____________ based tax

(A) origin

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 GST Simplified™ Ready Reckoner for Students and Professionals

(B) destination
(C) territory
(D) None of the above
[CMA-Inter, Jun 2018]

(a) destination

State whether true or false:

GST will not abolish all the indirect taxes levied in India.
[CMA-Inter, Jun 2018]

True

GST is a ____________ based tax.

(a) territory
(b) origin
(c) destination
(d) None of the above
[CMA-Final, Jun 2018]

(c) destination

• CENVAT/ CVD – State VAT set off not possible.

• State VAT – Service Tax set off not possible.
• CST – VAT set off not possible.
• Cascading Effect of Taxes
• Multiplicity of Duties, Taxes and Cesses.
• SAD credit only available to manufacturer of excisable goods

Dual GST system implemented by the virtue of Article 246A and 269A of The Constitution, as
introduced by the Constitution (101st Amendment) Act, 2016, in order to uphold the federalism of
the nation.

Intra-state Supplies Inter-state

Which law will govern the inter-state supply of goods or services? Supplies
(A) CGST
(B) SGST

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 GST Simplified™ Ready Reckoner for Students and Professionals

(C) UTGST
(D) IGST
[CS-Exec, Dec 2017]

(D) IGST

Explain the concept of ‘Dual GST’.

[CA-Final, Nov 2017]

Choose the correct alternative and give brief justification for your answer:
(a) In an intra-state supply, following are levied under GST:
(i) SGST and CGST
(ii) Only IGST
(iii) Only CGST
(iv) CGST and IGST
[CMA-Final, Dec 2017]

(i) SGST and CGST

The tax under GST legislation in India is being levied:

(A) Exclusively by Union and State Laws
(B) Simultaneously by Union and State Laws
(C) Only by Union Laws
(D) Only by State Laws
[CS-Exec, Jun 2018]

(B) Simultaneously by Union and State Laws

In IGST, I stands for

(A) Integrated
(B) International
(C) Inter-State
(D) Indian
[CMA-Inter, Jun 2018]

(A) Integrated

For example, a carton manufacturer of Delhi sells his goods worth ₹ 100 to a dealer in Delhi
itself. Let us say, the Excise Duty on such goods used to be levied at a rate of 12% and the
VAT rate was 5%. In the GST regime, let us say, it falls under the purview of 12% GST,
bifurcated equally between CGST and SGST. Let us calculate the purchase price for the
dealer.

Earlier (Excise + VAT) Now (CGST + SGST)

Value ₹ 100.00 Value ₹ 100.00
Add: Excise Duty (12%) ₹ 12.00 Add: CGST (6%) ₹ 6.00
Value for VAT ₹ 112.00 Add: SGST (6%) ₹ 6.00
Add: VAT (5%) ₹ 5.60 Total ₹ 112.00
Total ₹ 117.60

What if in our example, the GST rate applicable is 18%?

Earlier (Excise + VAT) Now (CGST + SGST)

Value ₹ 100.00 Value ₹ 100.00
Add: Excise Duty (12%) ₹ 12.00 Add: CGST (9%) ₹ 9.00

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 GST Simplified™ Ready Reckoner for Students and Professionals

Value for VAT ₹ 112.00 Add: SGST (9%) ₹ 9.00

Add: VAT (5%) ₹ 5.60 Total ₹ 118.00
Total ₹ 117.60

Continuing our first example, let us say the dealer has made a Value Addition of 20% of the
cost to the carton. The tax rates remain the same. He sells the goods to a consumer in Uttar
Pradesh. Let us now calculate the purchase price for the ultimate consumer.

Earlier (CST) Now (IGST)

Purchase Value (excl. ITC ₹ 112.00 Purchase Value (excl. ITC ₹ 100.00
available) available)
Add: Value addition (20%) ₹ 22.40 Add: Value addition (20%) ₹ 20.00
Value for CST ₹ 134.40 Value for GST ₹ 120.00
Add: CST (5%) ₹ 6.72 Add: IGST (12%) ₹ 14.40
Total ₹ 141.72 Total ₹ 134.40

Briefly explain the following features of GST law in India:

(i) Consumption based tax
(ii) Integrated Goods and Services Tax
[CS-Prof, Dec 2018]

Who is authorized under Integrated Goods and Services Tax (IGST) Act, to levy tax:
(A) State
(B) Centre
(C) Union Territory
(D) Both (A) and (B)
[CS-Exec, Dec 2018]

(B) Centre

Transaction Central Government Delhi Government

Supply from Mfr. – Dealer (CGST + SGST) ₹ 6.00 ₹ 6.00

Supply from Dealer – Consumer (IGST) ₹ 2.40
Transfer from Delhi Govt. – Central Govt. ₹ 6.00 ₹ (6.00)
Total ₹ 14.40 ₹ 0.00

What is the impact of GST on Centre-State relations and how are they streamlined?
[CMA-Final, Dec 2017]

• GST Council has been set up, comprising of Union Finance Minister (Chairman), the
Minister of State (Revenue) and the State Finance Ministers, to make recommendations
to the Union and States on various matters like draft laws, rules and notifications,
threshold limits, composition threshold limits, exempted goods and services, rates of tax,
special provisions and such like.
• A SPV called the GSTN has been set up to provide a shared IT infrastructure and services
to the various stakeholders for implementation of GST.

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 GST Simplified™ Ready Reckoner for Students and Professionals

• Central Excise shall continue to be levied on Tobacco and Tobacco Products along with
GST.
• Alcohol for human consumption and the following 5 (“PANCH”) petroleum products have
presently been kept outside the purview of GST:
o Petrol (Motor Spirit)
o Air Turbine Fuel
o Natural Gas
o Crude Oil
o High Speed Diesel
• GST has been enforced nationwide w.e.f. 1 July, 2017.
• The rate structure has been implemented broadly as per the following slab:
o 0% – Food grains and other items from CPI basket.
o 0.25% and 3% - Pearls, gold, silver, diamonds, and other precious stones and
metals
o 5% – Essential commodities and items of mass consumption.
o 12% and 18% – Standard Rates of GST for the general items at large.
o 28% – White goods etc., which were previously taxed at somewhere around 30-
31% or even more.
o Luxury products and demerit goods, including aerated drinks, pan masala, luxury
cars and tobacco products, which were earlier taxed at much higher rate shall
now be taxed in the 4th slab rate of 28%, but with additional cess being levied
upon them.
• The aforementioned cess on luxury products and demerit goods, along with the clean
energy cess, jointly shall be used to fund the compensation for revenue loss of the states.

Special purpose vehicle to cater the IT needs of GST is called:

(A) HSN
(B) GSTN
(C) IGSTN
(D) SGSTN
[CS-Exec, Jun 2018]

(C) GSTN

GST Council comprises of various persons from Union and States and is being headed by a
Chair Person who is:
(A) Finance Secretary to Government of India
(B) Union Finance Minister
(C) Any State Finance Minister
(D) Union Revenue Minister
[CS-Exec, Jun 2018]

(d) Union Finance Minister

The Chairperson of GST Council is

(A) Prime Minister of India
(B) Finance Minister of India
(C) Minister of State for Finance
(D) None of the above
[CMA-Inter, Jun 2018]

(B) Finance Minister of India

State whether true or false:

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 GST Simplified™ Ready Reckoner for Students and Professionals

The highest rate of tax levied under IGST is 28%.

[CMA-Inter, Jun 2018]

True

What do you mean by GST Council? What are its functions?

[CMA-Inter, Jun 2018]

Find out from the following, who will be the member in GST Council on behalf of each of the
State:
(A) Chief Minister of the State
(B) Home Minister of the State
(C) The Minister in charge of Finance or Taxation or any other Minister nominated by the
State Government
(D) Chief Secretary of the State
[CS-Exec, Dec 2018]

(C) The Minister in charge of Finance or Taxation or any other Minister nominated by the
State Government

GST Council is being constituted for making recommendation on various issues relating to
policy making, formulation of principle and implementation of policies relating to CGST Act,
2017. It is thus ...........
(A) An administrative body
(B) A Central level body
(C) A Committee of Finance Ministers
(D) An Apex Body
[CS-Exec, Dec 2018]

(C) A Committee of Finance Ministers

• Buoyancy to the Government Revenue

• Unified National Market
• Make in India
• Prevention of Cascading Effects
• Elimination of Multiplicity of Taxes
• Reduction in average tax burden

Narrate all those advantages which will be available to Trade because of implementation
of GST.
[CS-Prof, Dec 2017]

State the benefits of GST to the customers.

[CMA-Final, Dec 2017]

Give a brief introduction to GST in India.

[CMA-Final, Dec 2017]

State the advantages of GST.

[CMA-Inter, Jun 2018]

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 GST Simplified™ Ready Reckoner for Students and Professionals

CGSTA, 2017
• Section 7: Scope of Supply
• Section 8: Tax Liability on Composite and Mixed Supply

For a consideration Without consideration (as per Sch. I)

• All forms of supply, such as • Business Assets –
Sale, Transfer, Barter, License, Permanent transfer/ disposal
Exchange, Lease, Rental, Disposal if ITC has been availed.
of goods/ services • Supply of goods/ services between
made or agreed to be made o related persons
by a person o distinct persons
in the course or furtherance of in the course or furtherance of
business. business.
• Importation of service Except gift from an employer to an
o In the course or furtherance employee below a value of ₹ 50,000
of business in a FY.
o Not in the course or • Supply of goods by –
furtherance of business o principal to agent
o agent to principal
• Importation of service
by a taxable person from
o a related person
o another establishment of the
person outside India
in the course or furtherance of
business.

What is the difference in tax consequence between intra-state (from HO to branch in same
state) and inter-state stock transfers (from HO to branch in different state) of the same
supplier, which is a private limited company? What kind of GST will be levied?
[CMA-Final, Jun 2018]

Circular No. 57/ 31/2018-GST

Scope of Principal-agent relationship in the context of Schedule I of the CGST Act

7. Thus, the key ingredient for determining relationship under GST would be
whether the invoice for the further supply of goods on behalf of the principal
is being issued by the agent or not. Where the invoice for further supply is
being issued by the agent in his name then, any provision of goods from the
principal to the agent would fall within the fold of the said entry. However, it
may be noted that in cases where the invoice is issued by the agent to the
customer in the name of the principal, such agent shall not fall within the
ambit of Schedule I of the CGST Act. Similarly, where the goods being

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procured by the agent on behalf of the principal are invoiced in the name of
the agent then further provision of the said goods by the agent to the principal
would be covered by the said entry. In other words, the crucial point is
whether or not the agent has the authority to pass or receive the title of the
goods on behalf of the principal.

Circular No. 73/ 47/2018-GST

Scope of principal and agent relationship under Schedule I of CGST Act, 2017 in the
context of del-credere agent

2. In commercial trade parlance, a DCA is a selling agent who is engaged by a principal

to assist in supply of goods or services by contacting potential buyers on behalf of
the principal. The factor that differentiates a DCA from other agents is that the DCA
guarantees the payment to the supplier. In such scenarios where the buyer fails to
make payment to the principal by the due date, DCA makes the payment to the
principal on behalf of the buyer (effectively providing an insurance against default by
the buyer), and for this reason the commission paid to the DCA may be relatively
higher than that paid to a normal agent. In order to guarantee timely payment to the
supplier, the DCA can resort to various methods including extending short-term
transaction-based loans to the buyer or paying the supplier himself and recovering
the amount from the buyer with some interest at a later date. This loan is to be repaid
by the buyer along with an interest to the DCA at a rate mutually agreed between
DCA and buyer. Concerns have been expressed regarding the valuation of supplies
from Principal to recipient where the payment for such supply is being discharged by
the recipient through the loan provided by DCA or by the DCA himself. Issues arising
out of such loan arrangement have been examined and the clarifications on the same
are as below:
Sl. Issue Clarification
No.
1. Whether a DCA falls under the ambit As already clarified vide circular No.
of agent under Para 3 of Schedule I 57/ 31/2018-GST dated 4th
of the CGST Act? September, 2018, whether or not the
DCA will fall under the ambit of
agent under Para 3 of Schedule I of
the CGST Act depends on the
following possible scenarios:
• In case where the invoice for
supply of goods is issued by
the supplier to the customer,
either himself or through
DCA, the DCA does not fall
under the ambit of agent.
• In case where the invoice for
supply of goods is issued by
the DCA in his own name,
the DCA would fall under the
ambit of agent.
2. Whether the temporary short-term In such a scenario following activities
transaction based loan extended by are taking place:
the DCA to the recipient (buyer), for 1. Supply of goods from
which interest is charged by the supplier (principal) to
DCA, is to be included in the value of recipient;
goods being supplied by the supplier 2. Supply of agency services
(principal) where DCA is not an from DCA to the supplier or
the recipient or both;

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 GST Simplified™ Ready Reckoner for Students and Professionals

agent under Para 3 of Schedule I of 3. Supply of extension of loan

the CGST Act? services by the DCA to the
recipient.

It is clarified that in cases where the

DCA is not an agent under Para 3 of
Schedule I of the CGST Act, the
temporary short-term transaction
based loan being provided by DCA
to the buyer is a supply of service by
the DCA to the recipient on Principal
to Principal basis and is an
independent supply.

Therefore, the interest being charged

by the DCA would not form part of
the value of supply of goods
supplied (to the buyer) by the
supplier. It may be noted that vide
notification No. 12/2017-Central Tax
(Rate) dated 28th June, 2017 (S. No.
27), services by way of extending
deposits, loans or advances in so far
as the consideration is represented
by way of interest or discount (other
than interest involved in credit card
services) has been exempted.
3. Where DCA is an agent under Para 3 In such a scenario following activities
of Schedule I of the CGST Act and are taking place:
makes payment to the principal on 1. Supply of goods by the
behalf of the buyer and charges supplier (principal) to the
interest to the buyer for delayed DCA;
payment along with the value of 2. Further supply of goods by
goods being supplied, whether the the DCA to the recipient;
interest will form a part of the value 3. Supply of agency services by
of supply of goods also or not? the DCA to the supplier or
the recipient or both;
4. Extension of credit by the
DCA to the recipient.

It is clarified that in cases where the

DCA is an agent under Para 3 of
Schedule I of the CGST Act, the
temporary short-term transaction
based credit being provided by DCA
to the buyer no longer retains its
character of an independent supply
and is subsumed in the supply of the
goods by the DCA to the recipient. It
is emphasised that the activity of
extension of credit by the DCA to the
recipient would not be considered as
a separate supply as it is in the
context of the supply of goods made
by the DCA to the recipient.

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 GST Simplified™ Ready Reckoner for Students and Professionals

It is further clarified that the value of

the interest charged for such credit
would be required to be included in
the value of supply of goods by DCA
to the recipient as per clause (d) of
sub-section (2) of section 15 of the
CGST Act.

List the activities to be treated as supply under CGST Act, 2017 even if made without
consideration.
[CA-IPCE, May 2018]

Mrs. Pragati received legal advice for her personal problems & paid 1,000 pounds as legal
fees to Miss Unnati of U.K. (London).
Explain whether the above activity of import of service would amount to supply u/s 7 of the
CGST Act, 2017.
If in above case both of them are real sisters & no consideration is paid then will it change
your answer?
Further in the above case both of them are real sisters & Mrs. Pragati received legal advice
for her business and she didn’t pay any consideration then what will be your answer?
[CA-IPCE, May 2018}

Yes, Yes, It is a supply.

When employer gifts goods to his employees, it will not be considered as taxable supply
for the purpose of GST if the value of supply to an employee does not exceed:
(A) ₹ 5,000
(B) ₹ 20,000
(C) ₹ 50,000
(D) ₹ 1,00,000
[CS-Exec, Dec 2017]

(C) ₹ 50,000

• Transfer –
o (G) - Transfer of title in goods
o (G) - Transfer of title in goods under hire-purchase agreement
o (S) - Transfer of goods/ right in goods/ undivided share in goods, without the
transfer of title
• Land and Building –
o (S) - Lease, tenancy, easement, licence to occupy land
o (S) - Wholly or partly leasing or letting out of building (including commercial,
industrial or residential complex) for business or commerce
• Treatment or process -
o (S) - Any treatment or process applied on another person’s goods
• Transfer of business assets
o (G) - Transfer or disposal
whether or not for a consideration.
o (S) - Private usage or making available to any person for non-business usage
whether or not for a consideration.

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 GST Simplified™ Ready Reckoner for Students and Professionals

o (G) - When the person ceases to become taxable

unless –
▪ The business is transferred as going concern to another person, or
▪ The business is carried on by a personal representative who is deemed
to be a taxable person
• Specific matters to be treated as supply of services –
o (S) - Renting of immovable property
o (S) - Construction (including addition, alteration etc.)
of a civil structure or its part, building, complex
to be sold for whole or part consideration being received before the completion
or first occupation
o (S) - Temporary transfer or permission to use any IPR
o (S) - Development, design, enhancement, upgradation etc. of IT software
o (S) - Agreeing to refrain from an act
o (S) - Transfer of the right to use any goods for any purpose for consideration.
• Composite Supply –
o (S) - Works Contract
o (S) - Supply of food or any other such article for human consumption or any
drink (other than alcohol)
by way of or as a part of any service
for a consideration
• Specific matters to be treated as supply of goods –
o (G) - Supply of goods by any unincorporated AOP or BOI
to its members
for a consideration

State whether the following supplies would be treated as supply of goods or supply of
services as per Schedule-II of CGST Act:
(i) Renting of Immovable Property
(ii) Transfer of right in goods without transfer of title in goods.
(iii) Works Contract Services
(iv) Temporary transfer of permitting use or enjoyment of any intellectual property right
(v) Sale of personal car to dealer.
[CA-IPCE, Nov 2018]

1. Services by an employee to his employer, with respect to his employment.

2. Services by any Court (District/ High/ Supreme Court) or Tribunal
3. Duties performed by –
(a) MPs, MLAs, MLCs and such like,
(b) any person holding a post under The Constitution, or
(c) any person as a Chairperson/ Member/ Director of a body established by
Central/ State govt. and who is not deemed as an employee before the
commencement of this clause
4. Services of funeral, burial, crematorium or mortuary, including transportation of the
deceased.
5. Sale of land and, subject to Schedule II, sale of building.
6. Actionable claims, other than lottery, betting and gambling.
7. Supply of goods from one place in NTT to another without such goods entering India.
8. (a) Supply of custom warehoused goods to any person before clearance for home

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 GST Simplified™ Ready Reckoner for Students and Professionals

consumption.
(b) Supply of goods by the consignee to any other person
by endorsement of documents of title
after the goods have been dispatched from the port of origin outside India
but before clearance for home consumption.

Which of the following incomes/ activities is liable for GST?

(A) Salary
(B) Salary and allowances of MPs
(C) Services by court
(D) Sale of jewellery
[CS-Exec, Dec 2017]

(D) Sale of jewellery

Construction of a complex, building, civil structure or the part thereof including a complex
or building intended for sale to a buyer, wholly or partly except where the entire
consideration has been received after issuance of completion certificate, where required, by
a competent authority or after its first occupation, whichever is earlier for the purpose of
taxability under the CGST Act, 2017 shall be treated as supply of:
(i) Goods
(ii) Both goods and services
(iii) Services
(iv) Contract work
[CS-Exec, Jun 2018]

(e) Services

B, a supplier registered in Chennai (Tamil Nadu) procures goods from China and directly
supplies the same to a customer in UAE without bringing to India. With reference to the
provisions of GST law examine whether the supply of goods by B to customer in UAE is an
inter-state supply.
[CS-Prof, Dec 2018]

Such notified activities or transactions undertaken by

• The Central Government
• The State Government
• Any local authority
in which they are engaged as public authorities.

Notfn. No.: 14/2017 – CT(R) and 11/2017 – IT(R)

Services by way of any activity in relation to a function entrusted to a
o Panchayat under article 243G of the Constitution or
o Municipality under article 243W of the Constitution
has been notified to be treated neither as a supply of goods nor a supply of service.

Notfn. No.: 25/2019 – CT(R) and 24/2019 – IT(R)

Services by way of grant of alcoholic liquor licence, against consideration in the form of
licence fee or application fee or by whatever name it is called.

What is the taxable event under GST? What are the four broad parts under which the same
may be considered?

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 GST Simplified™ Ready Reckoner for Students and Professionals

[CMA-Final, Dec 2017]

Subject to sub-sections (1), (1A) and (2), Central/ State government may notify certain
transactions to be treated as –
• Only supply of goods
• Only supply of services

Circular No. 35/ 9/2018-GST

Joint Venture - taxable services provided by the members of the Joint Venture (JV) to the JV
and vice versa and inter se between the members of the JV

4. Therefore, the law with regard to levy of GST on service supplied by member of an
unincorporated joint venture (JV) to the JV or to other members of the JV, or by JV to
the members, essentially remains the same as it was under service tax law. Thus, it is
clarified that the clarification given vide Board Circular No. 179/ 5/ 2014 – ST dated
24.09.2014 ibid in the context of service tax is applicable for the purpose of levy of
GST also. It is reiterated that the question whether cash calls are taxable or not will
entirely depend on the facts and circumstances of each case. ‘Cash calls’ are raised
by an operating member of the joint venture on other members in proportion to their
participating interests in the joint venture (unincorporated) to meet the expenditure
on the operations to be carried out as per the approved work programme and
budget. Taxability of cash calls can be further explained by the following illustrations:

Illustration A: There are 4 members in the JV including the operating member

and each one contributes Rs 100 as part of their share. A total amount of Rs 400
is collected. The operating member purchases machinery for Rs 400 for the JV
to be used in oil production.
Illustration B: There are 4 members in the JV including the operating member
and each one contributes Rs 100 as part of their share. A total amount of Rs 400
is collected. The operating member thereafter uses its own machine and
performs exploration and production activities on behalf of the JV.

4.1 Illustration A will not be the subject matter of ‘ST/ GST’ for the reason that the
operating member is not carrying out an activity for another for consideration. In
Illustration A, the money paid for purchase of machinery is merely in the nature
of capital contribution and is therefore a transaction in money.
4.2 On the other hand, in Illustration B, the operating member uses its own
machinery and is therefore providing ‘service’ within the scope of supply of
CGST Act, 2017. This is because in this scenario, the operating member is
recovering the cost appropriated towards machinery and services from the
other JV members in their participating interest ratio.

Composite Supply Mixed Supply

A composite supply A mixed supply
comprising two or more supplies, comprising two or more supplies
one of which is a principal supply, shall be treated as supply of that particular
shall be treated as a supply of such principal supply
supply. which attracts the highest rate of tax.

Explain the liability on composite and mixed supplies in the context of CGST Act, 2017

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 GST Simplified™ Ready Reckoner for Students and Professionals

[CS-Prof, Dec 2017]

How the tax liability on composite and mixed supplies is determined under GST law?
Answer in single sentence each.
[CA-Final, Nov 2017]

Circular No. 11/ 11/2017-GST

Clarification on taxability of printing contracts

2. Supply of books, pamphlets, brochures, envelopes, annual reports, leaflets, cartons,

boxes etc. printed with logo, design, name, address or other contents supplied by the
recipient of such printed goods, are composite supplies and the question, whether
such supplies constitute supply of goods or services would be determined on the
basis of what constitutes the principal supply.

3. Principal supply has been defined in Section 2(90) of the CGSTA as supply of goods/
services which constitutes the predominant element of a composite supply and to
which any other supply forming part of that composite supply is ancillary.

4. In the case of printing of books, pamphlets, brochures, annual reports, and the like,
where only content is supplied by the publisher or the person who owns the usage
rights to the intangible inputs while the physical inputs including paper used for
printing belong to the printer, supply of printing [of the content supplied by the
recipient of supply] is the principal supply and therefore such supplies would
constitute supply of service.

5. In case of supply of printed envelopes, letter cards, printed boxes, tissues, napkins,
wall paper etc., printed with design, logo etc. supplied by the recipient of goods but
made using physical inputs including paper belonging to the printer, predominant
supply is that of goods and the supply of printing of the content [supplied by the
recipient of supply] is ancillary to the principal supply of goods and therefore such
supplies would constitute supply of goods.

• Actionable claim [Sec. 2(1) of CGSTA]: shall have the same meaning as assigned to it
in section 3 of the Transfer of Property Act, 1882.
• Agent [Sec. 2(5) of CGSTA]: means a person, including a factor, broker, commission
agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by
whatever name called, who carries on the business of supply or receipt of goods or
services or both on behalf of another.
• Business [Sec. 2(17) of CGSTA]: includes–
(a) any trade, commerce, manufacture, profession, vocation, adventure, wager
or any other similar activity, whether or not it is for a pecuniary benefit;
(b) any activity or transaction in connection with or incidental or ancillary to sub-
clause (a);
(c) any activity or transaction in the nature of sub-clause (a), whether or not
there is volume, frequency, continuity or regularity of such transaction;
(d) supply or acquisition of goods including capital goods and services in
connection with commencement or closure of business;
(e) provision by a club, association, society, or any such body (for a subscription
or any other consideration) of the facilities or benefits to its members;
(f) admission, for a consideration, of persons to any premises;
(g) services supplied by a person as the holder of an office which has been
accepted by him in the course or furtherance of his trade, profession or
vocation;

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 GST Simplified™ Ready Reckoner for Students and Professionals

(h) activities of a race club including by way of totalisator or a license to book

maker or activities of a licensed book maker in such club; and
(i) any activity or transaction undertaken by the Central Government, a State
Government or any local authority in which they are engaged as public
authorities.
• Capital goods [Sec. 2(19) of CGSTA]: means goods, the value of which is capitalised in
the books of account of the person claiming the input tax credit and which are used
or intended to be used in the course or furtherance of business.
• Composite supply [Sec. 2(30) of CGSTA]: means a supply made by a taxable person
to a recipient consisting of two or more taxable supplies of goods or services or both,
or any combination thereof, which are naturally bundled and supplied in conjunction
with each other in the ordinary course of business, one of which is a principal supply;
Illustration— Where goods are packed and transported with insurance, the supply
of goods, packing materials, transport and insurance is a composite supply and
supply of goods is a principal supply.
• Consideration [Sec. 2(31) of CGSTA]: in relation to the supply of goods or services or
both includes–
(a) any payment made or to be made, whether in money or otherwise, in respect
of, in response to, or for the inducement of, the supply of goods or services
or both, whether by the recipient or by any other person but shall not include
any subsidy given by the Central Government or a State Government;
(b) the monetary value of any act or forbearance, in respect of, in response to, or
for the inducement of, the supply of goods or services or both, whether by
the recipient or by any other person but shall not include any subsidy given
by the Central Government or a State Government:
Provided that a deposit given in respect of the supply of goods or services or both
shall not be considered as payment made for such supply unless the supplier applies
such deposit as consideration for the said supply.
• Distinct persons [Sec. 25(4) and (5) of CGSTA]:
(4) A person who has obtained or is required to obtain more than one
registration, whether in one State or Union territory or more than one State or
Union territory shall, in respect of each such registration, be treated as
distinct persons for the purposes of this Act.
(5) Where a person who has obtained or is required to obtain registration in a
State or Union territory in respect of an establishment, has an establishment
in another State or Union territory, then such establishments shall be treated
as establishments of distinct persons for the purposes of this Act.
• Goods [Sec. 2(52) of CGSTA]: means every kind of movable property other than
money and securities but includes actionable claim, growing crops, grass and things
attached to or forming part of the land which are agreed to be severed before supply
or under a contract of supply
• Import of goods [Sec. 2(10) of IGSTA]: with its grammatical variations and cognate
expressions, means bringing goods into India from a place outside India.
• Import of services [Sec. 2(11) of IGSTA]: means the supply of any service, where–
(a) the supplier of service is located outside India;
(b) the recipient of service is located in India; and
(c) the place of supply of service is in India
• India [Sec. 2(56) of CGSTA]: means the territory of India as referred to in article 1 of
the Constitution, its territorial waters, seabed and sub-soil underlying such waters,
continental shelf, exclusive economic zone or any other maritime zone as referred to
in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other
Maritime Zones Act, 1976, and the air space above its territory and territorial waters.
• Input tax [Sec. 2(62) of CGSTA]: in relation to a registered person, means the central
tax, State tax, integrated tax or Union territory tax charged on any supply of goods or
services or both made to him and includes—

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 GST Simplified™ Ready Reckoner for Students and Professionals

(a) the integrated goods and services tax charged on import of goods;
(b) the tax payable under the provisions of sub-sections (3) and (4) of section 9;
(c) the tax payable under the provisions of sub-sections (3) and (4) of section 5
of the Integrated Goods and Services Tax Act;
(d) the tax payable under the provisions of sub-sections (3) and (4) of section 9
of the respective State Goods and Services Tax Act; or
(e) the tax payable under the provisions of sub-sections (3) and (4) of section 7
of the Union Territory Goods and Services Tax Act,
but does not include the tax paid under the composition levy.
• Local authority [Sec. 2(69) of CGSTA]: means–
(a) a “Panchayat” as defined in clause (d) of article 243 of the Constitution;
(b) a “Municipality” as defined in clause (e) of article 243P of the Constitution;
(c) a Municipal Committee, a Zilla Parishad, a District Board, and any other
authority legally entitled to, or entrusted by the Central Government or any
State Government with the control or management of a municipal or local
fund;
(d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006;
(e) a Regional Council or a District Council constituted under the Sixth Schedule
to the Constitution;
(f) a Development Board constituted under article 371 and article 371J of the
Constitution; or
(g) a Regional Council constituted under article 371A of the Constitution.
• Mixed supply [Sec. 2(74) of CGSTA]: means two or more individual supplies of goods
or services, or any combination thereof, made in conjunction with each other by a
taxable person for a single price where such supply does not constitute a composite
supply.
Illustration— A supply of a package consisting of canned foods, sweets, chocolates,
cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a
mixed supply. Each of these items can be supplied separately and is not dependent
on any other. It shall not be a mixed supply if these items are supplied separately.
• Money [Sec. 2(75) of CGSTA]: means the Indian legal tender or any foreign currency,
cheque, promissory note, bill of exchange, letter of credit, draft, pay order, traveller
cheque, money order, postal or electronic remittance or any other instrument
recognised by the Reserve Bank of India when used as a consideration to settle an
obligation or exchange with Indian legal tender of another denomination but shall not
include any currency that is held for its numismatic value.
• Person [Sec. 2(84) of CGSTA]: includes—
(a) an individual;
(b) a Hindu Undivided Family;
(c) a company;
(d) a firm;
(e) a Limited Liability Partnership;
(f) an association of persons or a body of individuals, whether incorporated or
not, in India or outside India;
(g) any corporation established by or under any Central Act, State Act or
Provincial Act or a Government company as defined in clause (45) of section
2 of the Companies Act, 2013;
(h) any body corporate incorporated by or under the laws of a country outside
India;
(i) a co-operative society registered under any law relating to co-operative
societies;
(j) a local authority;
(k) Central Government or a State Government;
(l) society as defined under the Societies Registration Act, 1860;
(m) trust; and
(n) every artificial juridical person, not falling within any of the above.

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 GST Simplified™ Ready Reckoner for Students and Professionals

• Principal supply [Sec. 2(90) of CGSTA]: means the supply of goods or services which
constitutes the predominant element of a composite supply and to which any other
supply forming part of that composite supply is ancillary.
• Recipient [Sec. 2(93) of CGSTA]: of supply of goods or services or both, means—
(a) where a consideration is payable for the supply of goods or services or both,
the person who is liable to pay that consideration;
(b) where no consideration is payable for the supply of goods, the person to
whom the goods are delivered or made available, or to whom possession or
use of the goods is given or made available; and
(c) where no consideration is payable for the supply of a service, the person to
whom the service is rendered,
and any reference to a person to whom a supply is made shall be construed as a
reference to the recipient of the supply and shall include an agent acting as such on
behalf of the recipient in relation to the goods or services or both supplied.
• Registered person [Sec. 2(94) of CGSTA]: means a person who is registered under
section 25 but does not include a person having a Unique Identity Number.
• Related persons [Explanation to Sec. 15 of CGSTA]: persons shall be deemed to be
“related persons” if–
(i) such persons are officers or directors of one another’s businesses;
(ii) such persons are legally recognised partners in business;
(iii) such persons are employer and employee;
(iv) any person directly or indirectly owns, controls or holds twenty-five per
cent. or more of the outstanding voting stock or shares of both of them;
(v) one of them directly or indirectly controls the other;
(vi) both of them are directly or indirectly controlled by a third person;
(vii) together they directly or indirectly control a third person; or
(viii) they are members of the same family.
Also, persons who are associated in the business of one another in that one is the
sole agent or sole distributor or sole concessionaire, howsoever described, of the
other, shall be deemed to be related.
• Securities [Sec. 2(101) of CGSTA]: shall have the same meaning as assigned to it in
clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956.
• Services [Sec. 2(102) of CGSTA]: means anything other than goods, money and
securities but includes activities relating to the use of money or its conversion by
cash or by any other mode, from one form, currency or denomination, to another
form, currency or denomination for which a separate consideration is charged.
Explanation – For the removal of doubts, it is hereby clarified that the expression
“services” includes facilitating or arranging transactions in securities.
• Supplier [Sec. 2(105) of CGSTA]: in relation to any goods or services or both, shall
mean the person supplying the said goods or services or both and shall include an
agent acting as such on behalf of such supplier in relation to the goods or services or
both supplied.
• Taxable person [Sec. 2(107) of CGSTA]: means a person who is registered or liable to
be registered under section 22 or section 24.
• Works contract [Sec. 2(119) of CGSTA]: means a contract for building, construction,
fabrication, completion, erection, installation, fitting out, improvement, modification,
repair, maintenance, renovation, alteration or commissioning of any immovable
property wherein transfer of property in goods (whether as goods or in some other
form) is involved in the execution of such contract.

Explain the meaning of the term “Recipient of supply of goods and/ or services” under the
CGST Act, 2017.
[CA-Inter, May 2018]

Which of the following represents composite supply?

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 GST Simplified™ Ready Reckoner for Students and Professionals

(A) Doctor’s service with medicines

(B) Package with fruits and chocolates
(C) Coaching centre with monthly excursions on trekking
(D) Supply of computer printer and laptop
[CS-Exec, Dec 2017]

(A) Doctor’s service with medicines

How is the concept of “Consideration” understood for levy of GST?

[CMA-Final, Dec 2017]

Briefly explain the concepts of composite supply and mixed supply under GST, with an
illustration for each.
[CMA-Final, Dec 2017]

Section 2(62) of the CGST Act, 2017 specifies input tax in relation to a registered person to
mean Central Tax, State Tax, Integrated Tax or Union Territory Tax charged on any supply
of goods or services or both and also include:
(i) Integrated goods and service tax charged on import of goods
(ii) Tax under the provisions of section 9(3) and 9(4)
(iii) Tax paid under composition levy
(iv) Tax under Union Territory Goods and Service Tax Act
(A) All the above four
(B) (i), (ii) and (iv)
(C) (i) and (ii)
(D) (ii), (iii) and (iv)
[CS-Exec, Jun 2018]

(B) (i), (ii) and (iv)

A supply made by a taxable person to a recipient consisting of two or more taxable supply
of goods or services of both or any combination thereof which are only bundled and supplied
in conjunction with each other in the ordinary course of business out of which one is a
principal supply has been defined u/s 2(30) of CGST Act, 2017 to mean:
(A) Mixed supply
(B) Composite supply
(C) Bundled supply
(D) Both (A) and (B)
[CS-Exec, Jun 2018]

(B) Composite supply

Under GST law the phrase ‘Goods’ does not inlude

(A) Actionable claim
(B) Growing crops on the land agreed to be severed before supply
(C) Money and Securities
(D) None of the above
[CMA-Inter, Jun 2018]

(C) Money and Securities

Sharma Carriers is a Good Transport Agency engaged in transportation of goods by road.

As per the general business practice, Sharma Carriers also provides intermediary and
ancillary services like loading/ unloading, packing/ unpacking, transhipment and
temporary warehousing in relation to transportation of goods by road.

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With reference to the provisions of GST Law, analyse whether such services are to be
treated as part of the GTA Services, being a composite supply or as mixed supply.
[CA-Final, Nov 2018]

Composite Supply

A supply made by a taxable person to a recipient of goods being buyer consisting of two or
more taxable supplies of goods or services or of both or any combination thereof which are
only bundled and supplied in conjunction with each other in the ordinarily course of business
out of which one is a principal supply has been defined u/s 2(30) of CGST Act, 2017 as
...............
(A) Composite supply
(B) Mixed supply
(C) Higher rate tax supply
(D) Bundled supply
[CS-Exec, Dec 2018]

(A) Composite supply

The limit of nautical miles from base line of sea coast into the sea in order to determine the
supply in territorial water as per section 9 of the IGST Act, 2017 is:
(A) Upto 7 nautical miles
(B) Upto 10 nautical miles
(C) Upto 12 nautical miles
(D) Upto 20 nautical miles
[CS-Exec, Dec 2018]

(C) Upto 12 nautical miles

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CGSTA, 2017
• Section 1: Extent of the Act
IGSTA, 2017
• Section 1: Extent of the Act
• Section 7: Inter-state Supply
• Section 8: Intra-state Supply
• Section 9: Supplies in territorial waters
• Section 10: Place of Supply of Goods (except Export/ Import)
• Section 11: Place of Supply of Goods (Export/ Import)
• Section 12: Place of Supply of Services (Supplier and Recipient in India)
• Section 13: Place of Supply of Services (Supplier/ Recipient outside India)

It extends to the whole of India except the state of Jammu and Kashmir.
NOTE: The said Acts have been extended to Jammu & Kashmir w.e.f. 8 July, 2017, by the virtue
of Section 2 of the CGST (Extension to J&K) Act, 2017 and the IGST (Extension to J&K) Act, 2017.

Location of Supplier Place of Supply

State X State Y
Union Territory X Union Territory Y
State X Union Territory Y
Union Territory Y State X

• Supply of goods (till they cross the customs frontiers)/ services

imported into the territory of India
shall be treated to be inter-state supply.
• Supply of goods/ services

Supplier – India To or by In the taxable territory

Place of Supply – Outside SEZ developer/ SEZ unit o Not an intra-state
India supply
o Not covered
anywhere else in
Sec 7

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Circular No. 3/ 1/2018-IGST

Applicability of Integrated Goods and Services Tax (integrated tax) on goods supplied while
being deposited in a customs bonded warehouse

6. Integrated tax shall be levied and collected at the time of final clearance of the
warehoused goods for home consumption i.e., at the time of filing the ex-bond bill of
entry and the value addition accruing at each stage of supply shall form part of the
value on which the integrated tax would be payable at the time of clearance of the
warehoused goods for home consumption. In other words, the supply of goods
before their clearance from the warehouse would not be subject to the levy of
integrated tax and the same would be levied and collected only when the
warehoused goods are cleared for home consumption from the customs bonded
warehouse.

Tax on inter-state supplies, import into India, supplies made outside India and supplies made
in SEZ shall be charged to:
(A) CGST and SGST
(B) CGST and UTGST
(C) CGST and IGST
(D) IGST
[CS-Exec, Jun 2018]

(D) IGST

State whether true or false:

When goods are imported into India, CGST is levied.
[CMA-Inter, Jun 2018]

False

Location of Supplier Place of Supply

State X State X
Union Territory Y Union Territory Y

Excluding – Supply of
Goods/ services to/ by Goods imported into the Goods to an international
SEZ developer/ SEZ unit territory of India till they tourist
cross the customs frontiers

• Explanation 1: Where a person has

Establishment 1 Establishment 2

India Outside India

State/ UT X State/ UT Y
State/ UT X State/ UT X
they shall be treated as establishment of distinct persons.

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 GST Simplified™ Ready Reckoner for Students and Professionals

• Explanation 2: Branch/ Agency/ Representational Office shall be treated as establishment

Define ‘intra state supply’ and ‘inter state supply’ under GST law. Is it correct to say that
inter state supply attracts both CGST and SGST?
[CA-Final, Nov 2017]

Intra-state supply of service is primarily covered in section _________ of the IGST Act, 2017.
(A) 12
(B) 14
(C) 8
(D) 18
[CS-Exec, Jun 2018]

(C) 8

Following is an intra-state supply:

(a) Goods sent from Delhi to another dealer in Delhi
(b) Goods sent from Delhi to a SEZ in Noida, Uttar Pradesh
(c) Goods sent from Delhi to Chandigarh branch (Haryana) of the same supplier
(d) None of the above
[CMA-Final, Jun 2018]

(a) Goods sent from Delhi to another dealer in Delhi

Circular No. 93/12/2019-GST

Nature of supply of Priority Sector Lending Certificates (PSLC)

2. It is stated that Circular No. 62/36/2018-GST dated 12.09.2018 was issued clarifying
that GST on PSLCs for the period 1.7.2017 to 27.05.2018 will be paid by the seller bank
on forward charge basis and GST rate of 12% will be applicable on the supply.
Further, Notification No. 11/2018-Central Tax (Rate) dated 28.05.2018 was issued
levying GST on PSLC trading on reverse charge basis from 28.05.2018 onwards to be
paid by the buyer bank.

3. It is further clarified that nature of supply of PSLC between banks may be treated as a
supply of goods in the course of inter-State trade or commerce. Accordingly, IGST
shall be payable on the supply of PSLC traded over e-Kuber portal of RBI for both
periods i.e 01.07.2017 to 27.05.2018 and from 28.05.2018 onwards. However, where
the bank liable to pay GST has already paid CGST/SGST or CGST/UTGST as the case
may be, such banks for payment already made, shall not be required to pay IGST
towards such supply.

• Location of supplier is in territorial waters, then such location

OR
• Place of supply is in territorial waters, then such place
shall be deemed to be in the coastal state/ UT
where the nearest point of appropriate baseline is located.

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• Where supply involves movement of goods

by the supplier/ recipient/ any third person
- Location of the Goods at the time of termination of movement for delivery to the
recipient
• Where supply does not involve movement of goods
by the supplier/ recipient
- Location of the Goods at the time of delivery to the recipient
• Where goods are delivered
to a recipient or any other person on the direction of a 3rd person
by way of transfer of documents of title of goods or otherwise,
it shall be deemed that the said 3rd person has received the goods
- Principal Place of Business of the 3rd person

Raman Row, a registered supplier under GST in Mumbai, is directed by Nero Enterprises,
Kolkata to deliver goods valued at ₹ 12,00,000 to Fabricana of Aurangabad in
Maharashtra. Raman Row makes out an invoice at 9% tax rate under CGST and SGST
respectively (scheduled rate) and delivers it locally in Maharashtra.
Discuss and comment on the above levy of tax and determine the tax liability of goods in
the above circumstances.
[CA-Final, May 2018]

Since, the supplier is registered in Maharashtra and the place of supply is in West Bengal, it
is in the nature of an inter-state transaction. Hence, IGST of ₹ 2,16,000 (18% of ₹ 12,00,000)
shall be levied.

Asha Enterprises, supplier of sewing machines, is located in Kota (Rajasthan) and

registered f or purpose of GST in the said State. It receives an order from Deep Traders,
located in Jalandhar (Punjab) and registered for the purpose of GST in the said State. The
order is for the supply of 100 sewing machines with an instruction to ship the sewing
machines to Jyoti Sons, located in Patiala (Punjab) and registered in the said State for the
purpose of GST. Jyoti Sons is a customer of Deep Traders. Sewing machines are being
shipped in a lorry by Asha Enterprises.
Briefly explain the following:
(a) The place of supply under IGST Act, 2017;
(b) The nature of supply:- whether inter-state or intra-state and
(c) Whether CGST/ SGST or IGST as would be applicable in this case
[CA-Final, May 2019]

(a) Punjab
(b) Inter-state supply
(c) IGST

• Where the goods are assembled or installed at site

- The place of installation or assembly
• Where goods are supplied
on board a conveyance (vessel/ aircraft/ train/ motor vehicle)
- The location at which such goods are taken on board

Refreshments were supplied on board in an aircraft proceeding from Chennai to Delhi. It

has a stop at Hyderabad. The refreshments were taken on board at Hyderabad. The place
of supply is:
(A) Delhi
(B) Chennai
(C) Hyderabad

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 GST Simplified™ Ready Reckoner for Students and Professionals

(D) None of the above

[CS-Exec, Dec 2017]

(C) Hyderabad

• Goods imported into India

- Location of the importer
• Goods exported from India
- Location outside India

(2) General Provision –

Except the services specified in sub-section (3) – (14)
Supply made to Place of Supply

A registered person - Location of the recipient

- Location of the recipient
Any other person where address on record exists
- Location of supplier in other cases

(3) Immovable Property –

Nature of Supply

a) Services provided by architects, interior b) Lodging accommodation by a hotel, inn,

decorators, engineers, estate agents, grant guesthouse, homestay, campsite, houseboat
of rights to use the property and such like or any other vessel
c) Accommodation in any immovable d) Any services ancillary to the other 3
property for organising any marriage or
reception, official, social, cultural and other
such functions
- Location at which the immovable property/ boat/ vessel is located
or intended to be located
• If the location of immovable property/ boat/ vessel is located or intended to be located
outside India
- Location of recipient
• Where the immovable property/ boat/ vessel is located in
more than one state or UT,
the supply of service shall be treated as made in each state
in proportion to the value for services separately collected or determined in terms of
the contract/ agreement entered into
or any other prescribed basis in the absence of such contract

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 GST Simplified™ Ready Reckoner for Students and Professionals

In the absence of any contract/ agreement, the supply of services u/s 12(3) attributable to
different states/ UTs of the IGSTA, 2017 shall be determined as follows –
Sl. No. Service Basis of Calculation
(i) Lodging accommodation by a hotel, Number of nights stayed in such
inn, guesthouse, club or campsite, by property
whatever name called (except cases
where such property is a single
property located in 2 or more
contiguous States/ UTs) and
services ancillary to such services
A hotel chain X charges a consolidated sum of ₹ 30,000/ - for stay in its two
establishments in Delhi and Agra, where the stay in Delhi is for 2 nights and the stay in
Agra is for 1 night. The place of supply in this case is both in the UT of Delhi and in the
State of UP and the service shall be deemed to have been provided in the UT of Delhi
and in the State of UP in the ratio 2:1 respectively. The value of services provided will
thus be apportioned as ₹ 20,000/ - in the UT of Delhi and ₹ 10,000/ - in the State of UP.
(ii) All other services in relation to Area of the immovable property lying
immovable property including services in each state/ UT
by way of accommodation in any
immovable property for organising any
marriage or reception etc., and in cases
of supply of accommodation by a
hotel, inn, guest house, club or
campsite, by whatever name called
where such property is a single
property located in 2 or more
contiguous States or UTs or both, and
services ancillary to such services
There is a piece of land of area 20,000 square feet which is partly in State
S1 say 12,000 square feet and partly in State S2, say 8,000 square feet. Site preparation
work has been entrusted to T. The ratio of land in the two states works out to 12:8 or 3:2
(simplified). The place of supply is in both S1 and S2. The service shall be deemed to have
been provided in the ratio of 12:8 or 3:2 (simplified) in the States S1 and S2 respectively.
The value of the service shall be accordingly apportioned between the States.
(iii) Lodging accommodation by a house Time spent by the boat/ vessel in each
boat or any other vessel and services such State/ UT, which shall be
ancillary to such services determined on the basis of a
declaration made to the effect by the
service provider.
A company C provides the service of 24 hours accommodation in a houseboat, which is
situated both in Kerala and Karnataka inasmuch as the guests board the house boat in
Kerala and stay there for 22 hours but it also moves into Karnataka for 2 hours (as
declared by the service provider). The place of supply of this service is in the States of
Kerala and Karnataka. The service shall be deemed to have been provided in the ratio of
22:2 or 11:1 (simplified) in the states of Kerala and Karnataka, respectively. The value of
the service shall be accordingly apportioned between the States.

(4)
Nature of Supply Place of Supply

Restaurant and Catering

- Location where the services are actually
Personal Grooming
performed
Fitness

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 GST Simplified™ Ready Reckoner for Students and Professionals

Beauty treatment
Heath Services (including plastic/ cosmetic
surgery)

(5) Services in relation to training and performance appraisal to –

o a registered person
- Location of such person
o any other person
- Location where the services are actually performed

Subbu, a registered supplier based at Erode coached the staff of a software company in
Hyderabad, which is registered. The classes were held at Erode. The place of supply is:
(a) As mutually agreed upon
(b) As decided by the Department, whichever is more favourable to them.
(c) Erode
(d) Hyderabad
[CMA-Final, Jun 2018]

(d) Hyderabad

(6)
Admission to a… Place of Supply

Cultural Event
Artistic Event
Sporting Event
Scientific Event - Place where the event is held
OR
Educational Event - Place where the park is located
Entertainment Event
Amusement Park
Any other place and ancillary services

(7) Organization of an event (cultural, educational etc.) including services in relation to a

conference, fair, exhibition etc.
OR
Ancillary services
OR
Assigning sponsorship to such event
o To a registered person
- Location of such person
o To any other person
- Place where the event is actually held if it is in India
OR
- Location of the recipient if the event is held outside India

Determine the Place of supply for the following independent cases under the IGST Act,
2017:

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 GST Simplified™ Ready Reckoner for Students and Professionals

(i) Grand Gala Events, an event management company at Kolkata, organises two
award functions for Kalyan Jewellers of Chennai (Registered at Chennai) at
New Delhi and Singapore.
(ii) Perfect Planners (Bengaluru) is hired by Dr Kelvin (unregistered person based in
Kochi) to plan and organise his son’s wedding at Mumbai.
Will your answer be different if the wedding is to take place at Malaysia?
[CA-Final, May 2018]

(i) The location of Kalyan Jewellers, i.e., Chennai (Tamil Nadu)

(ii) The place where the event is actually held, i.e., Mumbai (Maharashtra)
In case the wedding is at Malaysia, the location of the recipient Dr Kelvin, i.e.,
Kochi (Kerala)

Mr. Murthy, an unregistered person and a resident of Pune, hires the services of M/s Sun
Ltd. an event management company registered in Delhi, for organising of the new product
launch in Bengaluru.
(i) Determine the place of supply of services provided by M/s Sun Ltd.
(ii) What would your answer be in case the product launch takes place in Bangkok?
(iii) What would your answer be in case Mr. Murthy is a registered person and
product launches take place in Bengaluru and Bangkok?
[CA-Final, May 2018]

(i) The place where the event is actually held, i.e., Bengaluru (Karnataka)
(ii) The location of the recipient Mr. Murthy, i.e., Pune (Maharshtra)
(iii) The location of the recipient Mr. Murthy, i.e., Pune (Maharshtra)

• Where the event is held in more than one state or UT,

and a consolidated amount is charged
the place of supply shall be taken as being in each state/ UT
in proportion to the value for services separately collected or determined in terms of
the contract/ agreement entered into
or any other prescribed basis in the absence of such contract.

In the absence of any contract/ agreement, the supply of services to an unregistered person
u/s 12(7) attributable to different states/ UTs of the IGSTA, 2017 shall be determined by
application of the GAAP.
An event management company E has to organise some promotional events in States S1
and S2 for a recipient R. 3 events are to be organised in S1 and 2 in S2. They charge a
consolidated amount of ₹ 10,00,000 from R. The place of supply of this service is in both
the States S1 and S2. Say the proportion arrived at by the application of GAAP is 3:2. The
service shall be deemed to have been provided in the ratio 3:2 in S1 and S2 respectively.
The value of services provided will thus be apportioned as ₹ 6,00,000/ - in S1 and ₹
4,00,000/ - in S2.

(8) Services by way of transportation of goods, including mail or courier to –

o a registered person
- Location of such person
o any other person
- Location where the goods are handed over FOR transportation
However, if the transportation is to a place outside India
- Place of destination of the goods

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 GST Simplified™ Ready Reckoner for Students and Professionals

(9) Passenger transportation service to –

o a registered person
- Location of such person
o any other person
- Location where the passenger embarks on the conveyance for a continuous journey
• Where the right to passage is given for future use
AND
the point of embarkation is not known at that time
- As per Sub-Section (2)
NOTE: Return journey shall be treated as separate journey, even if the right to passage
for onward and return journey is issued at the same time.

(10) Where services are supplied

on board a conveyance (vessel/ aircraft/ train/ motor vehicle)
- The location of first scheduled point of departure

(11) Telecommunication services including

(a) Data transfer
(b) Broadcasting
(c) Cable
(d) DTH

Telecommunication Services
Fixed communication Postpaid mobile
line/ Leased Circuit/ connection for Prepaid mobile connection for telecom and
Cable or Dish telecom and internet internet services and DTH Any other case
Antenna services

Location of billing Address of the If address not

Location where it is Through a selling By any person to the
address of the recipient as per available, location of
installed recipient on record agent or distributor final subscriber records the supplier

Location of receipt of
Address of the selling payment or sale of
agent on record voucher

• Where the address of the recipient is not available in the records

- Location of the supplier
• Where the prepaid service is availed through internet banking or any other electronic
mode of payment
- Location of the recipient on the record
• Where the leased circuit is installed in more than one state or UT,
and a consolidated amount is charged
the place of supply shall be taken as being in each state/ UT
in proportion to the value for services separately collected or determined in terms of
the contract/ agreement entered into
or any other prescribed basis in the absence of such contract

In the absence of any contract/ agreement, the supply of service by way of leased circuit u/s
12(11) attributable to different states/ UTs of the IGSTA, 2017 shall be determined as follows –

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 GST Simplified™ Ready Reckoner for Students and Professionals

(a) The no. of points in a circuit shall be determined as follows –

(i) in the case of a circuit between 2 points/ places, the starting point/ place of
the circuit and the end point/ place will invariably constitute 2 points,
(ii) any intermediate point/ place in the circuit will also constitute a point
provided that the benefit of the leased circuit is also available at that
intermediate point,
(b) The supply of services shall be treated as made in each of the respective states/ UTs
in proportion to the no. of points lying in the state/ UT.
A company T installs a leased circuit between the Delhi and Mumbai offices of a
company C. The starting point of this circuit is in Delhi and the end point of the circuit is
in Mumbai. Hence one point of this circuit is in Delhi and another in Maharashtra. The
place of supply of this service is in the UT of Delhi and the State of Maharashtra. The
service shall be deemed to have been provided in the ratio of 1:1 in the UT of Delhi and
the State of Maharashtra, respectively.

A company T installs a leased circuit between the Chennai, Bengaluru and Mysuru
offices of a company C. The starting point of this circuit is in Chennai and the end point
of the circuit is in Mysuru. The circuit also connects Bengaluru. Hence one point of this
circuit is in Tamil Nadu and two points in Karnataka. The place of supply of this service is
in the States of Tamil Nadu and Karnataka. The service shall be deemed to have been
provided in the ratio of 1:2 in the States of Tamil Nadu and Karnataka, respectively

A company T installs a leased circuit between the Kolkata, Patna and Guwahati offices
of a company C. There are 3 points in this circuit in Kolkata, Patna and Guwahati. One
point each of this circuit is, therefore, in West Bengal, Bihar and Assam. The place of
supply of this service is in the States of West Bengal, Bihar and Assam. The service shall
be deemed to have been provided in the ratio of 1:1:1 in the States of West Bengal, Bihar
and Assam, respectively.

(12) Banking and other financial services, including stock broking services
o Location of recipient available on the records
- Location of the recipient
o Location of recipient not available on the records
- Location of the supplier

(13) Insurance Services to -

o a registered person
- Location of such person
o any person
- Location of the recipient available on record

(14) Advertisement services to

o The Central/ State Government
o A statutory body
o A local authority
meant for the states/ UTs identified in the contract/ agreement
shall be taken as being in each state/ UT
and the value of such supplies specific to each state/ UT shall be
in proportion to the amount attributable to dissemination service in the respective
states/ UTs
determined in terms of the contract/ agreement entered into
or any other prescribed basis in the absence of such contract

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 GST Simplified™ Ready Reckoner for Students and Professionals

In the absence of any contract, the proportion of value attributable to different states/ UTs
for the purpose of Section 12(14) of the IGSTA, 2017 shall be determined in the following
manner-
Advertisement… Value attributable to a particular state/ UT
(a) In newspapers and publications The amount payable for publishing the
advertisement in all the editions of a
newspaper or publication.
ABC, a government agency, issues a release order to a newspaper DEF (whose HO is in
Delhi) for an advertisement to be published on ‘Beti bachao beti padhao’, for the editions
of Delhi, Pune, Mumbai, Lucknow and Jaipur. The release order had the details of the
newspaper like the periodicity, language, size of the advertisement and the amount to be
paid to such a newspaper. The place of supply of this service shall be in Delhi,
Maharashtra, Uttar Pradesh and Rajasthan. The amounts payable to the Pune and
Mumbai editions would constitute the proportion of value for Maharashtra which is
attributable to the dissemination in Maharashtra. Likewise, the amount payable to the
Delhi, Lucknow and Jaipur editions would constitute the proportion of value attributable
to the dissemination in Delhi, Uttar Pradesh and Rajasthan respectively. DEF should issue
separate State and UT wise invoices based on the editions.
(b) On printed material like pamphlets, The amount payable for the distribution of a
leaflets, diaries, calendars, T-shirts etc. specific number of such material
As a part of the ‘Swachh Bharat’ campaign, ABC has engaged a company GH for printing
of 1 lakh pamphlets (at a total cost of ₹ 1 lakh) to be distributed in Haryana, Uttar Pradesh
and Rajasthan. In such a case, ABC should ascertain the breakup of the pamphlets to be
distributed in each of the three States, from the concerned department at the time of
giving the print order.
Let us assume that this breakup is 20,000, 50,000 and 30,000 respectively. This
breakup should be indicated in the print order. The place of supply of this service is in
Haryana, Uttar Pradesh and Rajasthan. The ratio of 2:5:3 will form the basis of value
attributable to the dissemination in each of the three states. Separate invoices will have
to be issued state-wise by GH to ABC indicating the value pertaining to that state i.e. ₹
20,000- Haryana, fifty thousand rupees- Uttar Pradesh and thirty thousand rupees-
Rajasthan.
(c) (i) on hoardings other than those on The amount payable for the hoardings
trains located in the state/ UT
As part of the ‘Saakshar Bharat’ campaign, ABC has engaged a firm IJ for putting up
hoardings near the Airports in the four metros i.e. Delhi, Mumbai, Chennai and Kolkata.
The release order issued by ABC to IJ will have the city-wise, location-wise breakup of
the amount payable for such hoardings. The place of supply of this service is in Delhi,
Maharashtra, Tamil Nadu and West Bengal. In such a case, the amount actually paid to
IJ for the hoardings in each of the four metros will be the value attributable to the
dissemination in Delhi, Maharashtra, Tamil Nadu and West Bengal respectively. Separate
invoices will have to be issued State and UT wise by IJ to ABC indicating the value
pertaining to that State/ UT.
(ii) on trains The breakup of the amount payable for
such advertisement, calculated on the basis
of the ratio of the length of the railway track
of that train in the state/ UT
ABC places an order on KL for advertisements to be placed on a train with regard to the
“Janani Suraksha Yojana”. The length of a track in a state will vary from train to train.
Thus, for advertisements to be placed on the Hazrat Nizamuddin - Vasco Da Gama Goa
Express which runs through Delhi, Haryana, Uttar Pradesh, Madhya Pradesh,
Maharashtra, Karnataka and Goa, KL may ascertain the total length of the track from
Hazrat Nizamuddin to Vasco Da Gama as well as the length of the track in each of these

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 GST Simplified™ Ready Reckoner for Students and Professionals

States and UT. The place of supply of this service is in Delhi, Haryana, Uttar Pradesh,
Madhya Pradesh, Maharashtra, Karnataka and Goa. The value of the supply in each of
these states and UT attributable to the dissemination in these states will be in the ratio of
the length of the track in each of these States and UT. If this ratio works out to say
0.5:0.5: 2:2 :3:3:1, and the amount to be paid to KL is ₹ 1,20,000, then the state and UT
wise breakup works out to Delhi (₹ 5,000), Haryana (₹ 5,000), Uttar Pradesh (₹
20,000), Madhya Pradesh (₹ 20,000), Maharashtra (₹ 30,000), Karnataka (₹ 30,000)
and Goa (₹ 10,000). Separate invoices will have to be issued state and UT-wise by KL to
ABC indicating the value pertaining to that State/ UT.
(d) (i) on the back of utility bills of oil and The amount payable for the advertisements
gas companies etc. on bills pertaining to consumers having
billing addresses in the state/ UT
(ii) on railway tickers The breakup of the amount payable for
such advertisement, calculated on the basis
of the ratio of the no. of railway stations in
the state/ UT
ABC has issued a release order to MN for display of advertisements relating to the
“Ujjwala” scheme on the railway tickets that are sold from all the stations in Madhya
Pradesh and Chattisgarh. The place of supply of this service is in Madhya Pradesh and
Chattisgarh. The value attributable to these two States will be in the ratio of the number
of railway stations in each State as ascertained from the Railways. Let us assume that
this ratio is 713:251 and the total bill is ₹ 9,640. The breakup of the amount between
Madhya Pradesh and Chattisgarh in this ratio of 713:251 works out to ₹ 7,130 and ₹ 2,510
respectively. Separate invoices will have to be issued State wise by MN to ABC indicating
the value pertaining to that State.
(e) over radio stations The amount payable to such radio station
which by virtue of its name is part of the
state/ UT
For an advertisement on ‘Pradhan Mantri Ujjwala Yojana’, to be broadcast on a FM radio
station OP, for the radio stations of OP Kolkata, OP Bhubaneswar, OP Patna, OP Ranchi
and OP Delhi, the release order issued by ABC will show the breakup of the amount
which is to be paid to each of these radio stations. The place of supply of this service is in
West Bengal, Odisha, Bihar, Jharkhand and Delhi. The place of supply of OP Delhi is in
Delhi even though the studio may be physically located in another state. Separate
invoices will have to be issued State and UT wise by MN to ABC based on the value
pertaining to each State/ UT.
(f) on TV channels The amount calculated on the basis of the
viewership of such channel in the state,
which is calculated in the following manner
–
▪ the figures published in this
regard by the Broadcast
Audience Research Council,
▪ the figures published for the
last week of a given quarter
shall be used for calculating the
figures for the succeeding
quarter,
▪ in case the viewership figures
relate to a region comprising of
more than one state/ UT, the
figures for a state/ UT of that
region shall be calculated on
the basis of the ratio of the
populations of that state/ UT,

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 GST Simplified™ Ready Reckoner for Students and Professionals

as determined in the latest

census
▪ the ratio of the viewership
figures for each state/ UT as so
calculated, when applied to the
amount payable for that
service, shall represent the
portion of the value
attributable to the
dissemination in that state/ UT
ABC issues a release order with QR channel for telecasting an advertisement relating to
the “Pradhan Mantri Kaushal Vikas Yojana” in the month of November, 2017. In the first
phase, this will be telecast in Delhi, Uttar Pradesh, Uttarakhand, Bihar and Jharkhand. The
place of supply of Delhi, Uttar Pradesh, Uttarakhand, Bihar and Jharkhand. In order to
calculate the value of supply attributable to Delhi, Uttar Pradesh, Uttarakhand, Bihar and
Jharkhand, QR has to proceed as under—
• QR will ascertain the viewership figures for their channel in the last week of
September 2017 from the Broadcast Audience Research Council. Let us
assume it is 1,00,000 for Delhi and 2,00,000 for the region comprising of
Uttar Pradesh and Uttarakhand and 1,00,000 for the region comprising of
Bihar and Jharkhand;
• Since the Broadcast Audience Research Council clubs Uttar Pradesh and
Uttarakhand into one region and Bihar and Jharkhand into another region, QR
will ascertain the population figures for Uttar Pradesh, Uttarakhand, Bihar and
Jharkhand from the latest census;
• By applying the ratio of the populations of Uttar Pradesh and Uttarakhand to
the Broadcast Audience Research Council viewership figures for their channel
for this region, the viewership figures for Uttar Pradesh and Uttarakhand and
consequently the ratio of these viewership figures can be calculated. Let us
assume that the ratio of the populations of Uttar Pradesh and Uttarakhand
works out to 9: 1. Thus, the viewership figures for Uttar Pradesh and
Uttarakhand work out to 1,80,000 and 20,000 respectively;
• In a similar manner the breakup of the viewership figures for Bihar and
Jharkhand can be calculated. Let us assume that the ratio of populations is 4:1.
Thus, the viewership figure for Bihar and Jharkhand works out to 80,000 and
20,000 respectively;
• The viewership figure for each State works out to Delhi (1,00,000), Uttar
Pradesh (1,80,000), Uttarakhand (20,000), Bihar (80,000) and Jharkhand
(20,000). The ratio is thus 10:18:2:8:2 or 5:9:1:4:1 (simplification).
• This ratio has to be applied when indicating the breakup of the amount
pertaining to each State. Thus, if the total amount payable to QR by ABC is ₹
20,00,000, the State wise breakup is ₹ 5,00,000 (Delhi), ₹ 9,00,000 (Uttar
Pradesh) ₹ 1,00,000 (Uttarakhand), ₹ 4,00,000 (Bihar) and ₹ 1,00,000
(Jharkhand). Separate invoices will have to be issued State and UT wise by QR
to ABC indicating the value pertaining to that State/ UT.
(g) at cinema halls The amount payable to a cinema hall or
screens in a multiplex in a state/ UT
ABC commissions ST for an advertisement on ‘Pradhan Mantri Awas Yojana’ to be
displayed in the cinema halls in Chennai and Hyderabad. The place of supply of this
service is in Tamil Nadu and Telengana. The amount actually paid to the cinema hall or
screens in a multiplex, in Tamil Nadu and Telangana as the case may be, is the value of
advertisement service in Tamil Nadu and Telangana respectively. Separate invoices will
have to be issued State-wise by ST to ABC indicating the value pertaining to that State.
(h) over internet The service shall be deemed to have been
provided all over India and amount

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 GST Simplified™ Ready Reckoner for Students and Professionals

calculated on the basis of the internet

subscribers in the state, which is calculated
in the following manner –
(i) the figures published in this
regard by the TRAI,
(ii) the figures published for the
last quarter of a given FY shall
be used for calculating the
figures for the succeeding FY,
(iii) in case the subscriber figures
relate to a region comprising of
more than one state/ UT, the
figures for a state/ UT of that
region shall be calculated on
the basis of the ratio of the
populations of that state/ UT,
as determined in the latest
census
(iv) the ratio of the subscriber
figures for each state/ UT as so
calculated, when applied to the
amount payable for that
service, shall represent the
portion of the value
attributable to the
dissemination in that state/ UT
ABC issues a release order to WX for a campaign over internet regarding linking
Aadhaar with one’s bank account and mobile number. WX runs this campaign over
certain websites. In order to ascertain the state-wise breakup of the value of this service
which is to be reflected in the invoice issued by WX to ABC, WX has to first refer to the
TRAI figures for quarter ending March, 2017. These figures show the service area wise
internet subscribers. There are 22 service areas. Some relate to individual states some to
two or more States and some to part of one State and another complete State. Some of
these areas are metropolitan areas. In order to calculate the state-wise breakup, first the
state-wise breakup of the number of internet subscribers is arrived at. (In case figures of
internet subscribers of one or more States are clubbed, the subscribers in each State is to
be arrived at by applying the ratio of the respective populations of these States as per the
latest census.). Once the actual number of subscribers for each State has been
determined, the second step for WX involves calculating the state-wise ratio of internet
subscribers. Let us assume that this works out to 8:1:2… and so on for Andhra Pradesh,
Arunachal Pradesh, Assam… and so on. The third step for WX will be to apply these ratios
to the total amount payable to WX so as to arrive at the value attributable to each State.
Separate invoices will have to be issued State and UT wise by WX to ABC indicating the
value pertaining to that State/ UT.
(i) through SMS service The amount calculated on the basis of the
telecom subscribers in the state, which is
calculated in the following manner –
(i) the figures of the no. of
telecom subscribers in a
telecom circle published in this
regard by the TRAI,
(ii) the figures published for a
given quarter shall be used for
calculating the figures for the
succeeding quarter,
(iii) in case the subscriber figures
relate to a telecom circle

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 GST Simplified™ Ready Reckoner for Students and Professionals

comprising of more than one

state/ UT, the figures for a
state/ UT of that region shall be
calculated on the basis of the
ratio of the populations of that
state/ UT, as determined in the
latest census
(iv) the ratio of the subscriber
figures for each state/ UT as so
calculated, when applied to the
amount payable for that
service, shall represent the
portion of the value
attributable to the
dissemination in that state/ UT
ABC commissions UV to send SMS to voters asking them to exercise their franchise in
elections to be held in Maharashtra and Goa. The place of supply of this service is in
Maharashtra and Goa. The telecom circle of Maharashtra consists of the area of
Maharashtra (excluding the areas covered by Mumbai which forms another circle) and
Goa. When calculating the number of subscribers pertaining to Maharashtra and Goa,
UV has to –
▪ obtain the subscriber figures for Maharashtra circle and Mumbai circle and
add them to obtain a combined figure of subscribers;
▪ obtain the figures of the population of Maharashtra and Goa from the latest
census and derive the ratio of these two populations;
▪ this ratio will then have to be applied to the combined figure of subscribers so
as to arrive at the separate figures of subscribers pertaining to Maharashtra
and Goa;
▪ the ratio of these subscribers when applied to the amount payable for the SMS
in Maharashtra circle and Mumbai circle, will give breakup of the amount
pertaining to Maharashtra and Goa. Separate invoices will have to be issued
State wise by UV to ABC indicating the value pertaining to that State.

Determine the place of supply according to the provisions of Integrated Goods and
Services Tax Act, 2017 in the following cases:
(i) K of Kerala places an order to H of Gurgaon (Haryana) to supply motor parts and
instructs him to deliver the spare parts to U of Kanpur (U.P.) directly to save
transportation cost.
(ii) P Ltd. registered in Punjab sold its pre-installed transformer tower of electricity
located at Himachal Pradesh to Bharat Ltd. registered in Delhi.
(iii) M from Mumbai enters into contract with the Indian Railways controlling office
situated in U.P. for sale of food items in the trains from Mumbai to Delhi.
(iv) D of Delhi has a savings bank account with HDFC Bank in Delhi. When he was in
Mumbai for official tour, he gets a DD (Demand Draft) from HDFC Bank in Mumbai.
(v) K of Kerala avails architect services for his property located in Chennai (Tamil
Nadu) from an architect H of Hyderabad in Telangana State.
[CS-Prof, Dec 2018]

(i) Kerala
(ii) Himachal Pradesh
(iii) Maharashtra
(iv) Delhi
(v) Tamil Nadu

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(2) General Provision –

Except the services specified in sub-section (3) – (13)
Location of recipient Place of Supply

Available - Location of the recipient

Not available in ordinary course of business - Location of the supplier

(3) (a)
o In respect of goods which are required to be made physically available by the
recipient to the supplier or his order
- Location where the services are performed
o When aforementioned service is provided from a remote location through
electronic means
- Location where goods are situated at that time
NOTE: This clause shall not apply in case where goods are temporarily imported for
repairs or any other treatment/ process and then exported without using in India,
except when it is required for such repairs/ treatment/ process.
(b) Services supplied to an individual or someone on his behalf
which require the physical presence of such individual
with the supplier for the service.
- Location where the services are performed

(4) Immovable property –

o Services provided by architects, interior decorators, engineers, estate agents,
grant of rights to use the property and such like
o Lodging accommodation by a hotel, inn, guesthouse, club, campsite
- Location where the immovable property is located or intended

Mr. Mahendra Goyal, an interior decorator provides professional services to Mr. Harish
Jain in relation to two of his immovable properties.
Determine the place of supply in the transactions below as per provisions of GST law in the
following independent situations:
Case Location of Mr. Location of Mr. Harish Properties situated at
Mahendra Goyal Jain
I Delhi Mumbai New York (USA)
II Delhi New York Paris (France)
Explain the relevant provisions of law to support your conclusions.
[CA-Final, May 2018]

I. Mumbai (Location of recipient Mr. Harish Jain)

II. Paris (Location where the immovable properties are located)

(5) Admission to/ Organization of –

o Cultural/ Artistic/ Sporting/ Scientific/ Educational etc.
o Conference/ Celebration/ Exhibition/ Fair etc.
and ancillary services
- Location where the event is held

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(6) When services as mentioned in (3), (4) or (5) is supplied at more than one location,
including a location in the taxable territory
- Location in the taxable territory

(7) When services as mentioned in (3), (4) or (5) is supplied in more than one state/ UT,
the supply of service shall be treated as made in each state
in proportion to the value for services separately collected or determined in terms of
the contract/ agreement entered into
or any other prescribed basis in the absence of such contract.

In the absence of any contract/ agreement, the supply of services u/s 13(7) attributable to
different states/ UTs of the IGSTA, 2017 shall be determined as follows –
Sl. No. Case Basis of Calculation
(i) Services supplied on the same goods Equally dividing the value of the
service in each of the states/ UTs
where the service is performed
A company C which is located in Kolkata is providing the services of testing of a
dredging machine and the testing service on the machine is carried out in Odisha and
Andhra Pradesh. The place of supply is in Orissa and Andhra Pradesh and the value of
the service in Odisha and Andhra Pradesh will be ascertained by dividing the value of
the service equally between these two States.
(ii) Services supplied on different goods Taking the ratio of the invoice value of
goods in each of the states/ UTs, on
which service is performed, as the ratio
of the value of the service performed in
each state/ UT
A company C which is located in Delhi is providing the service of servicing of two cars
belonging to Mr. X. One car is of manufacturer J and is located in Delhi and is serviced
by its Delhi workshop. The other car is of manufacturer A and is located in Gurugram
and is serviced by its Gurugram workshop. The value of service attributable to the UT of
Delhi and the State of Haryana respectively shall be calculated by applying the ratio of
the invoice value of car J and the invoice value of car A, to the total value of the service.
(iii) Services supplied to individuals Applying the GAAP
A makeup artist M has to provide make up services to an actor A. A is shooting some
scenes in Mumbai and some scenes in Goa. M provides the makeup services in Mumbai
and Goa. The services are provided in Maharashtra and Goa and the value of the service
in Maharashtra and Goa will be ascertained by applying the GAAP.

In the absence of any contract/ agreement, the supply of services

o directly in relation to an immovable property, including services supplied by experts
and estate agents,
o supply of accommodation by a hotel/ inn/ guest house/ club/ campsite,
o grant of rights to use immovable property,
o services for carrying out or co-ordination of construction work, including that of
architects or interior decorators
u/s 13(7) attributable to different states/ UTs of the IGSTA, 2017 shall be determined by
applying Rule 4, mutatis mutandis.

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In the absence of any contract/ agreement, the supply of services by way of

admission to/ organisation of
o a cultural, artistic, sporting, scientific, educational or entertainment event, or
o a celebration, conference, fair, exhibition or similar events,
and of services ancillary to such admission or organisation
u/s 13(7) attributable to different states/ UTs of the IGSTA, 2017 shall be determined by
applying Rule 5, mutatis mutandis.

(8)
Nature of Supply Place of Supply

Services supplied by a bank, financial

institution or NBFC to its account holders
Intermediary services
- Location of the supplier of service
Hiring of means of transport upto a period of 1
month
Include – Yachts
Exclude – Aircraft and vessels

(9) Transportation of goods

Exclude – Mail or courier
- Place of destination of such goods

(10) Transportation of passengers

- Place where the passenger embarks for a continuous journey

(11) Services provided on board a conveyance during passenger transportation

Include - services intended to be consumed wholly or substantially while on board
- The first scheduled point of departure

(12) OIDAR – Shall be covered in the next chapter

(13) Power to Government to notify the place of supply for any service
to be the place of effective use and enjoyment of the service
for preventing double/ non-taxation
or for uniform application of rules.

Circular No. 2/ 1/2017-IGST

Clarification on supply of satellite launch services by ANTRIX Corporation Ltd.

3. Place of supply of satellite launch services supplied by ANTRIX Corporation Limited

to international customers would be outside India in terms of section 13(9) of IGST
Act, 2017 and such supply which meets the requirements of section 2(6) of IGST Act,
thus constitutes export of service and shall be zero rated in accordance with section
16 of the IGST Act. Where satellite launch service is provided by ANTRIX Corporation
Limited to a person located in India, the place of supply of satellite launch service
would be governed by section 12 (8) of the IGST Act and would be taxable under
CGST Act, UTGST Act or IGST Act, as the case may be.

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Circular No. 103/22/2019-GST

Clarification regarding determination of place of supply in certain cases

1. Various representations have been received from trade and industry seeking
clarification in respect of determination of place of supply in following cases: -
(I) Services provided by Ports - place of supply in respect of various cargo
handling services provided by ports to clients;
(II) Services rendered on goods temporarily imported in India - place of supply
in case of services rendered on unpolished diamonds received from abroad,
which are exported after cutting, polishing etc.

2. The provisions relating to determination of place of supply as contained in the

Integrated Goods & Services Tax Act, 2017 (hereinafter referred to as “the IGST Act”)
have been examined. In order to ensure uniformity in the implementation of the
provisions of the law, the Board, in exercise of its powers conferred by sub-section
(1) of section 168 of the Central Goods & Services Tax Act, 2017 (hereinafter referred
to as “the CGST Act”) clarifies the same as below: -
S. No. Issue Clarification
1 Various services are being provided by It is hereby clarified that such services
the port authorities to its clients in are ancillary to or related to cargo
relation to cargo handling. Some of handling services and are not related to
such services are in respect of arrival immovable property. Accordingly, the
of wagons at port, haulage of wagons place of supply of such services will be
inside port area up-to place of determined as per the provisions
unloading, siding of wagons inside the contained in sub-section (2) of Section
port, unloading of wagons, movement 12 or sub-section (2) of Section 13 of
of unloaded cargo to plot and staking the IGST Act, as the case may be,
hereof, movement of unloaded cargo depending upon the terms of the
to berth, shipment/loading on vessel contract between the supplier and
etc. recipient of such services.
Doubts have been raised about
determination of place of supply for
such services i.e. whether the same
would be determined in terms of the
provisions contained in sub-section (2)
of Section 12 or sub-section (2) of
Section 13 of the IGST Act, as the case
may be or the same shall be
determined in terms of the provisions
contained in sub-section (3) of Section
12 of the IGST Act.
2 Doubts have been raised about the Place of supply in case of
place of supply in case of supply of performance-based services is to be
various services on unpolished determined as per the provisions
diamonds such as cutting and polishing contained in clause (a) of sub-section
activity which have been temporarily (3) of Section 13 of the IGST Act and
imported into India and are not put to generally the place of services is where
any use in India? the services are actually performed.
But an exception has been carved out
in case of services supplied in respect
of goods which are temporarily
imported into India for repairs or for
any other treatment or process and are
exported after such repairs or
treatment or process without being put

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to any use in India, other than that

which is required for such repairs or
treatment or process.
In case of cutting and polishing activity
on unpolished diamonds which are
temporarily imported into India are not
put to any use in India, the place of
supply would be determined as per the
provisions contained in sub-section (2)
of Section 13 of the IGST Act

• Address on record [Sec. 2(3) of CGSTA]: means the address of the recipient as
available in the records of the supplier.
• Continuous journey [Sec. 2(3) of IGSTA]: means a journey for which a single or more
than one ticket or invoice is issued at the same time, either by a single supplier of
service or through an agent acting on behalf of more than one supplier of service,
and which involves no stopover between any of the legs of the journey for which
one or more separate tickets or invoices are issued.
Explanation– For the purposes of this clause, the term “stopover” means a place
where a passenger can disembark either to transfer to another conveyance or break
his journey for a certain period in order to resume it at a later point of time.
• Conveyance [Sec. 2(34) of CGSTA]: includes a vessel, an aircraft and a vehicle.
• Customs frontiers of India [Sec. 2(4) of IGSTA]: means the limits of a customs area as
defined in section 2 of the Customs Act, 1962.
• Document [Sec. 2(41) of CGSTA]: includes written or printed record of any sort and
electronic record as defined in clause (t) of section 2 of the Information Technology
Act, 2000.
• Fixed establishment [Sec. 2(50) of CGSTA and Sec. 2(7) of IGSTA]: means a place
(other than the registered place of business) which is characterised by a sufficient
degree of permanence and suitable structure in terms of human and technical
resources to supply services, or to receive and use services for its own needs.
• Intermediary [Sec. 2(13) of IGSTA]: means a broker, an agent or any other person, by
whatever name called, who arranges or facilitates the supply of goods or services or
both, or securities, between two or more persons, but does not include a person
who supplies such goods or services or both or securities on his own account.
• Location of the recipient of services [Sec. 2(70) of CGSTA and Sec. 2(14) of IGSTA]:
means—
(a) where a supply is received at a place of business for which the registration
has been obtained, the location of such place of business;
(b) where a supply is received at a place other than the place of business for
which registration has been obtained (a fixed establishment elsewhere), the
location of such fixed establishment;
(c) where a supply is received at more than one establishment, whether the
place of business or fixed establishment, the location of the establishment
most directly concerned with the receipt of the supply; and
(d) in absence of such places, the location of the usual place of residence of the
recipient
• Location of the supplier of services [Sec. 2(71) of CGSTA and Sec. 2(15) of IGSTA]:
means—
(a) where a supply is made from a place of business for which the registration
has been obtained, the location of such place of business;
(b) where a supply is made from a place other than the place of business for
which registration has been obtained (a fixed establishment elsewhere), the
location of such fixed establishment;

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(c) where a supply is made from more than one establishment, whether the
place of business or fixed establishment, the location of the establishment
most directly concerned with the provisions of the supply; and
(d) in absence of such places, the location of the usual place of residence of the
supplier.
1. Motor vehicle [Sec. 2(76) of CGSTA]: shall have the same meaning as assigned to it in
clause (28) of section 2 of the Motor Vehicles Act, 1988.
2. Other territory [Sec. 2(81) of CGSTA]: includes territories other than those comprising
in a State and those referred to in sub-clauses (a) to (e) of clause (114).
3. Special economic zone [Sec. 2(19) of IGSTA]: shall have the same meaning as
assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005.
4. Special economic zone developer [Sec. 2(20) of IGSTA]: shall have the same meaning
as assigned to it in clause (g) of section 2 of the Special Economic Zones Act, 2005
and includes an Authority as defined in clause (d) and a Co-Developer as defined in
clause (f) of section 2 of the said Act.
5. Union territory [Sec. 2(114) of CGSTA]: means the territory of—
o the Andaman and Nicobar Islands;
o Lakshadweep;
o Dadra and Nagar Haveli;
o Daman and Diu;
o Chandigarh; and
o other territory.
Explanation– For the purposes of this Act, each of the territories specified in sub-
clauses (a) to (f) shall be considered to be a separate Union territory.
• Place of business [Sec. 2(85) of CGSTA]: includes–
(a) a place from where the business is ordinarily carried on, and includes a
warehouse, a godown or any other place where a taxable person stores his
goods, supplies or receives goods or services or both; or
(b) a place where a taxable person maintains his books of account; or
(c) a place where a taxable person is engaged in business through an agent, by
whatever name called.
• Principal place of business [Sec. 2(89) of CGSTA]: means the place of business
specified as the principal place of business in the certificate of registration.
• State [Sec. 2(103) of CGSTA]: includes a Union territory with Legislature.
• Telecommunication service [Sec. 2(110) of CGSTA]: means service of any description
(including electronic mail, voice mail, data services, audio text services, video text
services, radio paging and cellular mobile telephone services) which is made
available to users by means of any transmission or reception of signs, signals, writing,
images and sounds or intelligence of any nature, by wire, radio, visual or other
electromagnetic means.
• Usual place of residence [Sec. 2(113)]: means–
(a) in case of an individual, the place where he ordinarily resides;
(b) in other cases, the place where the person is incorporated or otherwise
legally constituted

XYZ Limited engaged in various activities, is having a garment show-room in Allahabad and
a leather processing unit in Kanpur. Both these units of XYZ Limited under section 2 of the
CGST Act, 2017 shall be treated as:
(A) Business Partners
(B) Business units
(C) Show-room and factory
(D) Business Verticals
[CS-Exec, Jun 2018]

(D) Business Verticals

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IGSTA, 2017
• Section 14: Special provision for payment of tax by a supplier of OIDAR services

(xi) Every person

supplying OIDAR services
from a place outside India
to a person in India, other than a registered person

(1) Any person supplying OIDAR services from a place outside India to a NTOR shall
submit a registration application in FORM GST REG – 10.

(2) The applicant shall be granted registration in FORM GST REG-06 subject to notified
conditions and restrictions.

(12) The place of supply of OIDAR services shall be the location of the recipient.
• Recipient shall be deemed to be located in the taxable territory if any 2 of the following
non-contradictory conditions are satisfied –
o the location of address presented by the recipient of services through internet is
in the taxable territory;
o the credit card/ debit card/ store value card/ charge card/ smart card/ any
other card by which the recipient of services settles payment has been issued in
the taxable territory;
o the billing address of the recipient of services is in the taxable territory;
o the IP address of the device used by the recipient of services is in the taxable
territory;
o the bank of the recipient of services in which the account used for payment is
maintained is in the taxable territory;
o the country code of the SIM card used by the recipient of services is of taxable
territory;
o the location of the fixed land line through which the service is received by the
recipient is in the taxable territory.

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(1) When
supplier – any person located in NTT
recipient – non-taxable online recipient
then, tax payment liability – Supplier
• However, if an intermediary located outside India
arranges or facilitates supply of such service
to a non-taxable online recipient in India,
then the intermediary shall be deemed to be the supplier,
except when he satisfies the following conditions:
o The invoice or customer’s bill or receipt issued by such intermediary taking part
in the supply clearly identifies the service in question and its supplier in NTT
o The intermediary involved in the supply does not authorise the charge to the
customer or take part in its charge.
o The intermediary involved in the supply does not authorise delivery
o The general terms and conditions of the supply are not set by the intermediary
involved in the supply but by the supplier of services

(2) For the payment of IGST,

o The supplier shall take a single registration under the SRS to be notified by the
Government.
o In case there is a person in the TT representing such overseas supplier in the TT
for any purpose, such person (representative in India) shall get registered and
pay IGST on behalf of the supplier.
o In case the overseas supplier does not have a physical presence or does not
have a representative for any purpose in the TT, he may appoint a person in the
TT.

Every registered person providing OIDAR services from a place outside India to a NTOR shall
file return in FORM GSTR-5A on or before 20th day of the succeeding calendar month.

Notfn. No.: 2/2017-IT

The CG has notified the Principal Commissioner of CGST, Bengaluru West and his
subordinate officers as the officers empowered to grant registration to OIDAR service
suppliers located in a NTT, whose services are received by a NTOR.

• Website hosting and webpage hosting

• Accessing or downloading software (including procurement/ accountancy
programmes and anti-virus software) plus updates
• Accessing or downloading desktop themes
• Subscription to online newspapers and journals
• Use of search engines and Internet directories
• Accessing or downloading of music on to computers and mobile phones
• Automated distance teaching

• Non-taxable online recipient Sec. 2(16) of IGSTA]: means any Government, local
authority, governmental authority, an individual or any other person not registered
and receiving online information and database access or retrieval services in relation

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to any purpose other than commerce, industry or any other business or profession,
located in taxable territory.
Explanation– For the purposes of this clause, the expression “governmental
authority” means an authority or a board or any other body–
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by any Government,
with ninety per cent. or more participation by way of equity or control, to carry out
any function entrusted to a Panchayat under article 243G or to a municipality under
article 243W of the Constitution.
• Non-taxable territory [Sec. 2(79) of CGSTA]: means the territory which is outside the
taxable territory.
• OIDAR services [Sec. 2(17) of IGSTA]: means services whose delivery is mediated by
information technology over the internet or an electronic network and the nature of
which renders their supply essentially automated and involving minimal human
intervention and impossible to ensure in the absence of information technology and
includes electronic services such as–
o advertising on the internet;
o providing cloud services;
o provision of e-books, movie, music, software and other intangibles through
telecommunication networks or internet;
o providing data or information, retrievable or otherwise, to any person in
electronic form through a computer network;
o online supplies of digital content (movies, television shows, music and the
like);
o digital data storage; and
o online gaming.
• Return [Sec. 2(97) of CGSTA]: means any return prescribed or otherwise required to
be furnished by or under this Act or the rules made thereunder.

Online Information and Database Access or Retrieval Services does not include the
following:
(A) Online gaming
(B) Cloud services
(C) Advertising on the internet
(D) Physical delivery of goods
[CS-Exec, Dec 2017]

(D) Physical delivery of goods

Circular No. 107/26/2019-GST

Clarification on doubts related to supply of Information Technology enabled Services (ITeS
services)

1. Various representations have been received seeking clarification on issues related to

supply of Information Technology enabled Services (hereinafter referred to as “ITeS
services”) such as call center, business process outsourcing services, etc. and
“Intermediaries” to overseas entities under GST law and whether they qualify to be
“export of services” or otherwise.

2. The matter has been examined. In view of the difficulties being faced by the trade
and industry and to ensure uniformity in the implementation of the provisions of the
law across field formations, the Board, in exercise of its powers conferred by section
168 (1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as
“CGST Act”), hereby clarifies the issues in succeeding paragraphs.

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3. Intermediary has been defined in the sub-section (13) of section 2 of the Integrated
Goods and Service Tax Act, 2017 (hereinafter referred to as “IGST” Act) as under-
“Intermediary means a broker, an agent or any other person, by whatever name
called, who arranges or facilitates the supply of goods or services or both, or
securities, between two or more persons, but does not include a person who
supplies such goods or services or both or securities on his own account.”
3.1 The definition of intermediary inter alia provides specific exclusion of a
person i.e. that of a person who supplies such goods or services or both
or securities on his own account. Therefore, the supplier of services
would not be treated as ‘intermediary’ even where the supplier of
services qualifies to be ‘an agent/ broker or any other person’ if he is
involved in the supply of services on his own account.

4. Information Technology enabled Services (ITeS services), though not defined under
the GST law, have been defined under the sub-rule (e) of rule 10 TA of the Income-
tax Rules, 1962 which pertains to Safe Harbour Rules for international transactions. It
defines ITeS services as-
"information technology enabled services" means the following business process
outsourcing services provided mainly with the assistance or use of information
technology, namely:—
(i) back office operations;
(ii) call centres or contact centre services;
(iii) data processing and data mining;
(iv) insurance claim processing;
(v) legal databases;
(vi) creation and maintenance of medical transcription excluding medical
advice;
(vii) translation services;
(viii) payroll;
(ix) remote maintenance;
(x) revenue accounting;
(xi) support centres;
(xii) website services;
(xiii) data search integration and analysis;
(xiv) remote education excluding education content development; or
(xv) clinical database management services excluding clinical trials,
but does not include any research and development services whether or not in the
nature of contract research and development services.”

5. There may be various possible scenarios when a supplier of ITeS services located in
India supplies services for and on behalf of a client located abroad. These scenarios
have been examined and are being discussed in detail hereunder:
5.1 Scenario -I:
The supplier of ITeS services supplies back end services as listed in para 4
above. In such a scenario, the supplier will not fall under the ambit of
intermediary under sub-section (13) of section 2 of the IGST Act where
these services are provided on his own account by such supplier. Even
where a supplier supplies ITeS services to customers of his clients on
clients’ behalf, but actually supplies these services on his own account,
the supplier will not be categorized as intermediary. In other words, a
supplier “A” supplying services, listed in para 4 above, on his own
account to his client “B” or to the customer “C” of his client would not be
intermediary in terms of sub-section (13) of section 2 of the IGST Act.
5.2 Scenario -II:
The supplier of backend services located in India arranges or facilitates
the supply of goods or services or both by the client located abroad to
the customers of client. Such backend services may include support

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services, during pre-delivery, delivery and postdelivery of supply (such

as order placement and delivery and logistical support, obtaining relevant
Government clearances, transportation of goods, post-sales support and
other services, etc.). The supplier of such services will fall under the ambit
of intermediary under sub-section (13) of section 2 of the IGST Act as
these services are merely for arranging or facilitating the supply of goods
or services or both between two or more persons. In other words, a
supplier “A” supplying backend services as mentioned in this scenario to
the customer “C” of his client “B” would be intermediary in terms of sub-
section (13) of section 2 of the IGST Act.
5.3 Scenario –III:
The supplier of ITeS services supplies back end services, as listed in para
4 above, on his own account along with arranging or facilitating the
supply of various support services during pre-delivery, delivery and
post-delivery of supply for and on behalf of the client located abroad. In
this case, the supplier is supplying two set of services, namely ITeS
services and various support services to his client or to the customer of
the client. Whether the supplier of such services would fall under the
ambit of intermediary under sub-section (13) of section 2 of the IGST Act
will depend on the facts and circumstances of each case. In other words,
whether a supplier “A” supplying services listed in para 4 above as well as
support services listed in Scenario -II above to his client “B” and / or to
the customer “C” of his client is intermediary or not in terms of sub-
section (13) of section 2 of the IGST Act would have to be determined in
facts and circumstances of each case and would be determined keeping
in view which set of services is the principal / main supply.

6. It is also clarified that supplier of ITeS services, who is not an intermediary in terms of
sub-section (13) of section 2 of the IGST Act, can avail benefits of export of services if
he satisfies the criteria mentioned in sub-section (6) of section 2 of the IGST Act,
which reads as under –
“export of services” means the supply of any service when,–
(i) the supplier of service is located in India;
(ii) the recipient of service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of service in
convertible foreign exchange; and
(v) the supplier of service and the recipient of service are not merely
establishments of a distinct person in accordance with Explanation 1 in
section 8”.

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CGSTA, 2017
• Section 9: Levy and Collection
IGSTA, 2017
• Section 5: Levy and Collection

(1) CGST (IGST) shall be levied

on all intra (inter)-state supplies of goods/ services
except on alcohol for human consumption
on the value determined u/s 15 of the CGSTA, 2017,
not exceeding 20% (40%)

GST Council Government Taxable Person

Notifies and Pays

Recommends
Collects

However, the IGST on imported goods

shall be levied and collected
o as per Sec. 3 of the CTA, 1975
o on the value as determined under the said Act
o at the point when Custom Duty is levied u/s 12 of the CA, 1962
The GST rates applicable on supplies have been notified vide
Notfn. No.: 01/2017 – CT(R) and 01/2017 – IT(R), for goods,
and
Notfn. No.: 11/2017 – CT(R) and 08/2017 – IT(R), for services,
as amended from time to time.

The highest enabling limit of tax rate of IGST has been prescribed at:
(A) 20%
(B) 14%
(C) 28%
(D) None of the above
[CS-Exec, Jun 2018]

(D) None of the above

(2) The GST on the following 5 petroleum products

shall be levied as and when the Government notifies:
o Petrol (motor spirit)
o Aviation Turbine Fuel
o Natural Gas
o Crude petroleum

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 GST Simplified™ Ready Reckoner for Students and Professionals

o High Speed Diesel

(3) The Government may notify

categories of supply of goods/ services
the GST on which shall be paid on reverse charge basis
by the recipient of such goods or services
and all the provisions of the Acts
shall apply to the recipient
as if he is the person liable to pay the tax on such supplies

Notfn. No.: 04/2017 – CT(R) and IT(R)

Reverse charge is applicable on supplies of following goods -
Who What To whom
Cashew nuts, not shelled or
peeled
Agriculturist Tendu leaves Any registered person
Tobacco leaves
Raw cotton
Any person who
manufactures silk yarn from
Silk yarn Any registered person
raw silk or silk worm
cocoons
Lottery distributor or selling
SG/ UT/ LA Supply of lottery
agent
Used vehicles, seized and
confiscated goods, old and
CG/ SG/ UT/ LA Any registered person
used goods, waste and
scrap
Priority Sector Lending
Any registered person Any registered person
Certificate

Mr. Velmurugan of Panruti (Tamil Nadu), a farmer, sold raw cashew nuts produced in his
farm land to M/s Rajesh International of Chennai, a company registered under GST.
Applicable rate of GST is 5%. Value of Goods is ₹ 1,00,000. M/s Rajesh International has
input credit of IGST ₹ 4,000. You are required to answer the following:
(a) Who is liable to pay GST?
(b) Net liability of GST
[CMA-Inter, Jun 2018]

(a) M/s Rajesh International

(b) ₹ 5,000

Notfn. No.: 13/2017 – CT(R) and 10/2017 - IT(R)

Reverse charge is applicable on supplies of following services -
Who What To whom
a) any factory regd.
under the FA,
1948; or
Goods Transport b) any society
Agency (GTA), who has Transportation of goods by road registered under
not paid GST @ of 12% the SRA, 1860 or
under any other
law for the time
being in force in

54
 GST Simplified™ Ready Reckoner for Students and Professionals

any part of India;

or
c) any co-operative
society
established by or
under any law; or
d) any person
registered under
the CGSTA/
IGSTA/ SGSTA/
UTGSTA; or
e) any body
corporate
established, by or
under any law; or
f) any partnership
firm whether
registered or not
under any law
including
association of
persons and LLP;
or
g) any CTP.
located in the TT, i.e., the
Payer
except
(a) a Deptt./ Estbt. of
the CG/ SG/ UT,
or
(b) LA or
(c) GA
which has registered
under the CGSTA, 2017
only for deducting tax u/s
51 and not for making a
taxable supply.

NOTE: The payer, located

in the TT, shall be treated
as the receiver.
An individual advocate Any business entity
including a senior located in the TT, who is
Legal services
advocate litigant, applicant or
A firm of advocates petitioner, as the case
An Arbitral Tribunal Any service may be
Any body corporate or
Any person Sponsorship partnership firm located
in the TT
Any service excluding-
(1) renting of immovable
property, and
Any business entity
CG/ SG/ UT/ LA (2) services specified below-
located in the TT
(a) services by the
Department of
Posts by way of

55
 GST Simplified™ Ready Reckoner for Students and Professionals

o speed post,
o express
parcel
post,
o agency
services
and
o life
insurance,
provided to a
person other than
CG/ SG/ UT/ local
authority;
(b) services in relation
to an aircraft or a
vessel, inside or
outside the
precincts of a port
or an airport;
(c) transport of
goods/
passengers.
Renting of immovable property A registered person
The company or a body
A director of a company
corporate located in the
or a body corporate
TT
Any person carrying on
Any service
An insurance agent insurance business
located in the TT
A bank/ FI/ NBFC located
A recovery agent
in the TT
Transfer or permitting the use or
enjoyment of a copyright covered
Author or music u/s 13(1)(a) of the Copyright Act,
A publisher, music
composer, 1957 relating to original literary,
company, producer or
photographer, artist or dramatic, musical or artistic
the like, located in the TT
the like works
Music company,
Music composer, Transfer or permitting the use or
producer or the like,
photographer, artist, or enjoyment of a copyright covered
located in the TT
the like u/s 13(1)(a) of the Copyright Act,
1957 relating to original dramatic,
musical or artistic works
Publisher located in the
TT, except where –
(i) the author has
taken registration
under the CGSTA,
Transfer or permitting the use or
2017, and filed a
enjoyment of a copyright covered
declaration within
Author u/s 13(1)(a) of the Copyright Act,
the prescribed
1957 relating to original literary
time limit, with the
works
jurisdictional
CGST/ SGST
commissioner,
that he exercises
the option to pay

56
 GST Simplified™ Ready Reckoner for Students and Professionals

CGST on the
service specified
under forward
charge u/s 9(1) of
the CGSTA, 2017,
and to comply
with all the
provisions of
CGSTA, 2017 as
they apply to a
person liable for
paying the tax in
relation to the
supply of any
goods/ services
and that he shall
not withdraw the
said option within
1 yr. from the date
of exercising such
option;
(ii) the author makes
a prescribed
declaration on the
invoice issued by
him in Form GST
Inv-I to the
publisher.
Members of Overseeing
Committee constituted Any service RBI
by the RBI
Individual DSAs except
Bank/ NBFC located in
body corporate/ LLP Any service
the TT
firm
Business Facilitator (BF) Any service Bank located in the TT
Agent of Business
Any service A BC located in the TT
Correspondent (BC)
A registered person,
located in the TT
except –
(i) (a) a Deptt./
Estbt. of the
CG/ SG/ UT,
or
(b) LA, or
Security services (services
Any person other than a (c) GA
provided by way of supply of
body corporate which has regd.
security personnel)
under the CGSTA,
2017 only for
deducting tax u/s 51
and not for making
a taxable supply, or
(ii) a regd. person
paying tax u/s 10 of
the CGSTA, 2017.

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 GST Simplified™ Ready Reckoner for Students and Professionals

TDRs/ FSI (including additional

FSI) for construction of a project
by a promoter
Long term lease of land (30 yrs.
or more) against consideration in
Any person the form of upfront amount Promoter
(called as premium/ salami/ cost/
price/ development charges/ any
other name) and/ or periodic rent
for construction of a project by a
promoter
Any person other than a
body corporate, paying
GST @ of 5% on renting
Any body corporate
of motor vehicles with Renting of a motor vehicle
located in the TT
ITC only of input service
in the same line of
business
Lender i.e. a person who
deposits the securities
registered in his name or Borrower i.e. a person
in the name of any other who borrows the
Lending of securities under
person duly authorised securities under the
Securities Lending Scheme, 1997
on his behalf with an Scheme through an
of SEBI, as amended
approved intermediary approved intermediary of
for the purpose of SEBI
lending under the
Scheme of SEBI
NOTE: “renting of immovable property” means allowing/ permitting/ granting access/
entry/ occupation/ use/ any such facility, wholly/ partly, in an immovable property, with/
without the transfer of possession/ control of the said immovable property and includes
letting/ leasing/ licensing/ other similar arrangements for immovable property.
NOTE: “project” means a REP/ RREP, where RREP means a REP in which the carpet area of
the commercial apartments ≤ 15% of the total carpet area of all the apartments in the REP.
NOTE: “FSI” means the ratio of a building’s total floor area (gross floor area) to the size of the
piece of land upon which it is built.

Notfn. No.: 10/2017 – IT(R)

Reverse charge is applicable on supplies of following services -
Who What To whom
Any person located in the
Any service
TT other than NTOR
Transportation of goods by
A person located in a NTT a vessel from a place
outside India up to the Importer located in the TT
customs station of
clearance in India

State with reason, person liable to pay GST in each of following independent cases.
Assume recipient is located in taxable territory.
(i) Rental income received by Tamil Nadu State Government from renting an
immovable property to Mannappa Pvt. Ltd. (Turnover of the company was ₹ 22
lakhs in the preceding F.Y.)
(ii) Legal Fees received by Mr. Sushrut, a senior advocate, from M/ s. Tatva Trading
Company having turnover of ₹ 50 lakhs in preceding F.Y.

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 GST Simplified™ Ready Reckoner for Students and Professionals

[CA-IPCE, May 2018]

(i) Mannappa Pvt. Ltd. (assuming it is registered).

(ii) Tatva Trading Company

(4) The CG may notify a class of registered persons

who shall pay the tax on reverse charge basis, as the recipient,
for supplies received from an unregistered supplier,
and all the provisions of this Act
shall apply to him as if
he is the person liable to pay the tax on such supplies.

Mani gave goods for processing by Murali. While Mani is registered in GST, Murali is not
registered in GST. Both are at Chennai. The processing is liable for GST @ 5%. The goods
were received after processing on 11-07-2017. Entries in the books were made by Mr. Mani
on 12-07-2017. The delivery challan was also received on 11-07-2017. Job work charges
amount to ₹ 1,00,000 (without GST). When and how much is the GST liability? And who
must pay?
(A) 11-07-2017; ₹ 5,000 and Murali must pay
(B) 12-07-2017; ₹ 1,050 and Murali must pay
(C) 11-07-2017; ₹ 5,000 and Mani must pay
(D) 12-07-2017; ₹ 2,500 and Mani must pay
[CS-Exec, Dec 2017]

(C) 11-07-2017; ₹ 5,000 and Mani must pay

Notfn. No.: 09/2017 – CT(R)

Supplies of goods/ services received by a deductor u/s 51, from an un-registered supplier,
shall be exempt from the GST leviable thereon u/s 9(4), subject to the condition that the
deductor is not liable to be registered otherwise than u/s 24(vi).

Notfn. No.: 10/2017 – CT(R)

Supplies of second-hand goods received by a registered person, dealing in buying and
selling of second hand goods and who pays the GST on the value of outward supply of
such second-hand goods as determined u/r 32(5) of the CGSTR, 2017, from an un-
registered supplier, shall be exempt from the GST leviable thereon u/s 9(4).
According to , where a person dealing in buying and selling of second hand
goods makes a taxable supply of such goods, on purchase of which he has not availed any
ITC, the value of such supply shall be higher of -
• zero, or
• difference between the selling price and purchase price

Notfn. No.: 07/2019 – CT(R)/ IT(R)

The CG has notified the following registered persons to pay GST on reverse charge basis for
receiving the following categories of goods/ services from an unregistered supplier-
Recipient Category of Supply
Supply of such goods/ services [except grant of development rights/ long
term lease of land (against upfront payment in the form of premium, salami,
development charges etc.)/ FSI (including additional FSI)] which constitute
Promoter
the shortfall from the minimum value of goods/ services required to be
purchased by a promoter for construction of project, in a FY (or part of the FY
till the date of issuance of completion certificate or first occupation,

59
 GST Simplified™ Ready Reckoner for Students and Professionals

whichever is earlier) as prescribed in notification no. 11/2017 – CT(R) or

8/2017- IT(R), as amended
Cement which constitute the shortfall from the minimum value of goods/
services required to be purchased by a promoter for construction of project,
in a FY (or part of the FY till the date of issuance of completion certificate or
first occupation, whichever is earlier) as prescribed in notification no. 11/2017
– CT(R) or 8/2017- IT(R), as amended
Capital goods supplied to a promoter for construction of a project on which
tax is payable or paid at the rate prescribed in notification no. 11/2017 – CT(R)
or 8/2017- IT(R), as amended
NOTE: “project” means a REP or a RREP, where RREP means a REP in which the carpet area
of the commercial apartments ≤ 15% of the total carpet area of all the apartments in the
REP.
NOTE: “FSI” means the ratio of a building’s total floor area (gross floor area) to the size of the
piece of land upon which it is built.

(5) The Government may notify

categories of supply of services
the GST on which shall be paid by the e-commerce operator
if such services are supplied through it
and all the provisions of the Acts
shall apply to the e-commerce operator
as if he is the person liable to pay the tax on such supplies
• In case the e-commerce operator does not have a physical presence in the TT,
any representative of such operator in the TT
shall be liable to pay GST.
• In case the e-commerce operator does not have a physical presence in the TT,
and also nobody to represent the operator in TT,
he shall appoint a person for the purpose of paying GST.

Notfn. No.: 17/2017 – CT(R) and 14/2017 – IT(R)

GST on the supply of following services shall be paid by the e-commerce operator –
(i) Transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle
NOTE: “radio taxi” means a taxi including a radio cab, by whatever name called,
which is in two-way radio communication with a central control office and is
enabled for tracking using GPS or GPRS
(ii) Providing accommodation in hotels, inns, guest houses, clubs, campsites or other
commercial places meant for residential or lodging purposes, except where the
person supplying such service through e-commerce operator is liable for
registration u/s 22(1).
(iii) House-keeping, such as plumbing, carpentering etc, except where the person
supplying such service through e-commerce operator is liable for registration u/s
22(1).

Mr. Sanjay of New Delhi made a request for a Motor cab to “Super ride” for travelling from
New Delhi to Gurgaon (Haryana). After Mr. Sanjay pays the cab charges using his debit
card, he gets details of the driver Mr. Jorawar Singh and the cab’s registration number.
“Super ride” is a mobile application owned and managed by D.T. Ltd. located in India. The
application “Super ride” facilitates a potential customer to connect with the persons
providing cab service under the brand name of “Super ride”.
D.T. Ltd. claims that cab service is provided by Mr. Jorawar Singh and hence, he is liable to
pay GST under the provisions of Goods and Services tax laws.
With reference to the provisions of IGST Act, 2017, determine who is liable to pay GST in
this case?

60
 GST Simplified™ Ready Reckoner for Students and Professionals

Would your answer be different, if D.T. Ltd. is located in New York (USA)? Also briefly state
the statutory provisions involved.
[CA-Final, Nov 2018]

D. T. Ltd.
No.

The exception to the general rule that ‘‘normally, the supplier of goods and services is liable
to pay tax on supply, even if he does not collect from his customer i.e. recipient of supply of
goods or services’’ shall be applicable where there are:
(A) supply from an unregistered dealer to registered dealer
(B) specified services through an e-commerce operator
(C) both (A) and (B)
(D) none of the above
[CS-Exec, Dec 2018]

(D) both (A) and (B)

The payment of tax by electronic operator who does not have physical presence in taxable
territory in India be made by ...........
(A) e-commerce operator himself
(B) his appointed representative in India
(C) the person who receives supply
(D) either (A) or (B)
[CS-Exec, Dec 2018]

(B) either (A) or (B)

Notfn. No.: 40/2017 – CT(R) and 41/2017 – IT(R)

GST @ 0.1% shall be levied on the supply of taxable goods by a registered supplier to a
registered recipient for export, subject to fulfilment of the following conditions:
(i) the supplier shall supply the goods on a tax invoice;
(ii) the recipient shall export the said goods within 90 days of the invoice date;
(iii) the recipient shall indicate the GSTIN of the supplier and the tax invoice number
issued by the supplier in respect of the said goods in the shipping bill or bill of
export, as the case may be;
(iv) the recipient shall be registered with an Export Promotion Council or a Commodity
Board recognised by the Department of Commerce;
(v) the recipient shall place an order on supplier for procuring goods at concessional
rate and a copy of the same shall also be provided to the jurisdictional tax officer
of the supplier;
(vi) the recipient shall move the said goods from place of supplier –
(a) directly to the Port, ICD, Airport or Land Customs Station from where the
said goods are to be exported; or
(b) directly to a registered warehouse from where such goods shall be moved
to the Port, ICD, Airport or Land Customs Station from where the said goods
are to be exported;
(vii) if the registered recipient intends to aggregate supplies from multiple registered
suppliers and then export, the goods from each registered supplier shall move to a
registered warehouse and after aggregation, the registered recipient shall move
goods to the Port, Inland Container Deport, Airport or Land Customs Station from
where they shall be exported;
(viii) in case of situation referred to in condition (vii), the registered recipient shall
endorse receipt of goods on the tax invoice and also obtain acknowledgement of
receipt of goods in the registered warehouse from the warehouse operator and
the endorsed tax invoice and the acknowledgment of the warehouse operator

61
 GST Simplified™ Ready Reckoner for Students and Professionals

shall be provided to the registered supplier as well as to the jurisdictional tax

officer of such supplier; and
(ix) when goods have been exported, the registered recipient shall provide copy of
shipping bill or bill of export containing details of Goods and Services Tax
Identification Number (GSTIN) and tax invoice of the registered supplier along with
proof of export general manifest or export report having been filed to the
registered supplier as well as jurisdictional tax officer of such supplier.
The supplier shall not be eligible for the aforementioned exemption if the recipient fails to
export the said goods within 90 days from the date of issue of tax invoice.

Circular No. 1/ 1/2017-IGST

Clarification on inter-state movement of various modes of conveyance, carrying goods or
passengers or for repairs and maintenance

4. The inter-state movement of goods like movement of various modes of conveyance,

between distinct persons as specified in section 25(4) of the CGST Act, 2017,
including –
i. Trains,
ii. Buses,
iii. Trucks,
iv. Tankers,
v. Trailers,
vi. Vessels,
vii. Containers,
viii. Aircrafts,
may not be treated as supply and consequently IGST will not be payable on such
supply.

5. However, applicable CGST/ SGST/ IGST, as the case may be, shall be leviable on
repairs and maintenance done for such conveyance.

Siddarth Transports Ltd., is running a regular tourist bus service, carrying passengers and
goods from Coimbatore, Tamil Nadu to Trivandrum, Kerala, with effect from 1st August,
2017. Discuss whether such inter-state movement of various modes of conveyance carrying
goods or passengers or both, between distinct persons as specified in section 25(4) of the
CGST Act, 2017 [except in cases where such movement is for further supply of the same
conveyance], is leviable to IGST.
[CS-Prof, Jun 2018]

No

Vimala Transports & Co., a partnership firm based at Chennai, is running a regular tourist
bus service, carrying passengers and goods from Chennai to Bengaluru in Karnataka state
and Trivandrum in Kerala state, with effect from 1st September, 2017.
The firm wants to know whether such inter-state movement of various modes of
conveyance carrying goods or passengers or both, between distinct persons as specified in
section 25(4) of the CGST Act, 2017 [except in cases where such movement is for further
supply of the same conveyance], is coming under IGST.
You are required to advise the firm suitably
[CMA-Final, Jun 2018]

No

Circular No. 21/ 21/2017-GST

Clarification on inter-state movement of rigs, tools and spares, and all goods on wheels [like
cranes]

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 GST Simplified™ Ready Reckoner for Students and Professionals

1. The issue pertaining to inter-state movement of rigs, tools and spares, and all goods
on wheels [like cranes] was discussed in GST Council’s meeting held on 10th
November, 2017 and the Council recommended that the circular 1/ 1/2017-IGST shall
mutatis mutandis apply to inter-state movement of such goods, and except in cases
where movement of such goods is for further supply of the same goods, such inter-
state movement shall be treated ‘neither as a supply of goods nor supply of service,’
and consequently no IGST would be applicable on such movements.

2. In this context, it is also reiterated that applicable CGST/ SGST/ IGST, as the case
maybe, is leviable on repairs and maintenance done for such goods.

• Agriculturist [Sec. 2(7) of CGSTA]: means an individual or a Hindu Undivided Family

who undertakes cultivation of land—
(a) by own labour, or
(b) by the labour of family, or
(c) by servants on wages payable in cash or kind or by hired labour under
personal supervision or the personal supervision of any member of the
family.
• Casual taxable person [Sec. 2(20) of CGSTA]: means a person who occasionally undertakes
transactions involving supply of goods or services or both in the course or furtherance of
business, whether as principal, agent or in any other capacity, in a State or a Union territory
where he has no fixed place of business.
• Electronic commerce [Sec. 2(44) of CGSTA]: means the supply of goods or services
or both, including digital products over digital or electronic network.
• Manufacture [Sec. 2(72) of CGSTA]: means processing of raw material or inputs in
any manner that results in emergence of a new product having a distinct name,
character and use and the term “manufacturer” shall be construed accordingly.
• Outward supply [Sec. 2(83) of CGSTA]: in relation to a taxable person, means supply
of goods or services or both, whether by sale, transfer, barter, exchange, licence,
rental, lease or disposal or any other mode, made or agreed to be made by such
person in the course or furtherance of business.
• Reverse charge [Sec. 2(98) of CGSTA]: means the liability to pay tax by the recipient
of supply of goods or services or both instead of the supplier of such goods or
services or both under sub-section (3) or sub-section (4) of section 9, or under sub-
section (3) or subsection (4) of section 5 of the Integrated Goods and Services Tax
Act.

Explain the following terms used under the Central Goods and Services Tax Act, 2017:
(i) Casual Taxable Person
(ii) Manufacture
F[CS-Prof, Dec 2017]

A casual taxable person is required to obtain registration where he makes

(a) Taxable inter-state supply
(b) Taxable inter-state or intra-state supply
(c) Taxable inter-state or intra-state supply whose proposed value exceeds ₹ 20 lakhs
(d) In none of the above situations.
[CMA-Final, Jun 2018]

(d) In none of the above situations

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 GST Simplified™ Ready Reckoner for Students and Professionals

CGSTA, 2017
• Section 11: Power to Grant Exemption from Tax
IGSTA, 2017
• Section 6: Power to Grant Exemption from Tax

(1) On the recommendation of the GST Council

the Government may notify
goods/ services of any specified description
to be exempt (absolutely or conditionally)
from the whole or a part of the GST leviable
w.e.f. such date as specified in the notification

Notfn. No.: 02/2017 – CT(R) and IT(R)

Illustrative list of Goods exempt from GST –
Live Animals Fruits and nuts Jaggery [17] Dicalcium Fuel wood [44]
[01] [08] Phosphate [28]
Meat and Tea, coffee Rice products, Blood and Stamps, maps
edible offal [09] paapad & contraceptives and duty credit
[02] bread [19] [30] scrips [48/ 49]
Fish [03] Grains [10] Prasad [21] Organic Silk [50]
manure [31]
Milk and other Flour [11] Water, toddy Kajal, Kumkum Wool [51]
animal and coconut etc. [33]
products [04] water [22]
Human hair Oil seeds [12] Cotton seed oil Municipal and Khadi [52]
and other cake [23] clinical waste
animal parts [38]
[05]
Trees and Lac and Salt [25] Plastic bangles Jute fibre, coir
plants [06] shellac [13] [39] fibre [53]
Vegetables Betel and Sal Electrical Condoms and Indian
[07] leaves [14] energy [27] contraceptives National Flag
[40] [63]
Human hair Earthen pot, Glass bangles Manual Handloom and
[67] clay lamps [70] agricultural charkha [84]
and clay idols implements
[69] [82]
Spacecraft Hearing aids Musical Muddhas and Passenger
[88] [90] instruments chalks [96] baggage [98]
[92]

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 GST Simplified™ Ready Reckoner for Students and Professionals

Puja Samagri Private Lottery Supply of Rakhi [Except

[Any] [-] goods by a 71]
Govt. Entity to
Govt. for
grants [-]

• A concessional rate of 2.5% CGST (i.e. 5% GST) has been prescribed for specified
supplies to Exploration and Production of Coal, Petroleum etc. [Notfn. No.: 03/2017 –
CT(R)]

• Supply of goods by CSD to Unit Run Canteens/ authorized customers, or by Unit Run
Canteens to authorized customers [Notfn. No.: 07/2017 – CT(R)/ IT(R)].

• Supply of heavy water and nuclear fuels falling in Chapter 28 of the First Schedule to
the Customs Tariff Act, 1975 (51 of 1975) by the Department of Atomic Energy to the
Nuclear Power Corporation of India Ltd. [Notfn. No.: 26/2017 – CT(R)/ IT(R)]

• Inter-state supply of skimmed milk powder, or concentrated milk to a distinct person

as per section 25(4) of the CGSTA, 2017, for use in production of milk [for distribution
through dairy cooperatives or companies registered under the Companies Act, 2013]
and not for further supply of skimmed milk powder, or concentrated milk as such
[Notfn. No.: 30/2017 – IT(R)].

• Goods supplied to the FAO of the UN for execution of specified projects, if an officer
ranking Dy. Sy. to the GOI in MAFW and above certifies the quantity, description and
purpose of the said goods in execution of the said projects. [Notfn. No.: 19/2019 –
CT(R)]

Notfn. No.: 12/2017 – CT(R) and 9/2017 – IT(R)

List of Services exempt from GST –
NOTE: The Sl. No. below is as mentioned in Notfn. No. 12/2017 – CT(R), as amended from
time to time, unless specified otherwise.
Sl. No. Description
1 Services by an entity registered under section 12AA of the ITA, 1961 by way of
charitable activities.
NOTE: “charitable activities” means activities relating to –
(i) public health by way of -
(A) care or counselling of
(I) terminally ill persons or persons with severe
physical or mental disability;
(II) persons afflicted with HIV or AIDS;
(III) persons addicted to a dependence-forming
substance such as narcotics drugs or alcohol;
or
(B) public awareness of preventive health, family planning
or prevention of HIV infection;
(ii) advancement of religion, spirituality or yoga;
(iii) advancement of educational programmes or skill
development relating to-
(A) abandoned, orphaned or homeless children;
(B) physically or mentally abused and traumatized
persons;
(C) prisoners; or

65
 GST Simplified™ Ready Reckoner for Students and Professionals

(D) persons over the age of 65 years residing in a rural

area;
(iv) preservation of environment including watershed, forests and
wildlife
2 Services by way of transfer of a going concern, as a whole or an independent
part thereof.
3 Pure services (excluding works contract service or other composite supplies
involving supply of any goods) provided to the CG/ SG/ UT/ LA/ GA/ GE by
way of any activity in relation to any function entrusted to a Panchayat under
article 243G of the Constitution or in relation to any function entrusted to a
Municipality under article 243W of the Constitution.
NOTE: “Governmental Authority” means an authority or a board or any other
body-
(i) set up by an Act of Parliament or a State Legislature; or
(ii) established by any Government,
with 90%. or more participation by way of equity or control, to carry out any
function entrusted to a Municipality under article 243W of the Constitution or
to a Panchayat under article 243G of the Constitution.
3A Composite supply of goods and services in which the value of supply of
goods constitutes not more than 25% of the value of the said composite
supply provided to the CG/ SG/ UT/ LA/ GA/ GE by way of any activity in
relation to any function entrusted to a Panchayat under article 243G of the
Constitution or in relation to any function entrusted to a Municipality under
article 243W of the Constitution.
4 Services by GA by way of any activity in relation to any function entrusted to
a municipality under article 243W of the Constitution.
5 Services by GA by way of any activity in relation to any function entrusted to
a Panchayat under article 243G of the Constitution.
6 Services by the CG/ SG/ UT/ LA excluding the following services—
a) services by the Department of Posts by way of
o speed post,
o express parcel post,
o agency services, and
o life insurance
provided to a person other than the CG/ SG/ UT;
b) services in relation to an aircraft or a vessel, inside or outside the
precincts of a port or an airport;
c) transport of goods or passengers; or
d) any service, other than services covered under entries (a) to (c) above,
provided to business entities.
7 Services provided by the CG/ SG/ UT/ LA to a business entity with an
aggregate turnover of up to ₹ 20 lakhs (₹ 10 lakhs in case of a special
category state) in the preceding FY such amount in the preceding FY as makes
it eligible for exemption from registration under the CGSTA, 2017.
Explanation- For the purposes of this entry, it is hereby clarified that the
provisions of this entry shall not be applicable to-
(a) services-
(i) by the Department of Posts by way of
▪ speed post,

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▪ express parcel post,

▪ agency services, and
▪ life insurance
provided to a person other than the CG/ SG/ UT;
(ii) in relation to an aircraft or a vessel, inside or outside the
precincts of a port or an airport;
(iii) of transport of goods or passengers; and
(b) services by way of renting of immovable property.
NOTE: “business entity” means any person carrying out business.
“renting in relation to immovable property” means allowing, permitting or
granting access, entry, occupation, use or any such facility, wholly or partly,
in an immovable property, with or without the transfer of possession or
control of the said immovable property and includes letting, leasing, licensing
or other similar arrangements in respect of immovable property.

8 Services provided by the CG/ SG/ UT/ LA to another CG/ SG/ UT/ LA:
Provided that nothing contained in this entry shall apply to services-
(i) by the Department of Posts by way of
o speed post,
o express parcel post,
o agency services, and
o life insurance
provided to a person other than the CG/ SG/ UT;
(ii) in relation to an aircraft or a vessel, inside or outside the precincts of a
port or an airport;
(iii) of transport of goods or passengers.
9 Services provided by CG/ SG/ UT/ LA where the consideration for such
services does not exceed ₹ 5,000:
Provided that nothing contained in this entry shall apply to-
(i) services by the Department of Posts by way of
o speed post,
o express parcel post,
o agency services, and
o life insurance
provided to a person other than the CG/ SG/ UT;
(ii) services in relation to an aircraft or a vessel, inside or outside the
precincts of a port or an airport;
(iii) transport of goods or passengers:
Provided further that in case where continuous supply of service, as defined in
section 2(33) of the CGSTA, 2017, is provided by the CG/ SG/ UT/ LA, the
exemption shall apply only where the consideration charged for such service
does not exceed ₹ 5,000 in a FY.
9A Services provided by and to Fédération Internationale de Football Association
(FIFA) and its subsidiaries directly or indirectly related to any of the events
under FIFA U-17 World Cup 2017 to be hosted in India:
Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies
that the services are directly or indirectly related to any of the events under
FIFA U-17 World Cup 2017.
9AA Services provided by and to FIFA and its subsidiaries directly or indirectly
related to any of the events under FIFA U-17 Women's World Cup 2020 to be
hosted in India.

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Provided that Director (Sports), MYAS certifies that the services are directly or
indirectly related to any of the events under FIFA U-17 Women's World Cup
2020.
9B Supply of services associated with transit cargo to Nepal and Bhutan
(landlocked countries).
9C Supply of service by a Government Entity to CG/ SG/ UT/ LA or any person
specified by CG/ SG/ UT/ LA against consideration received from CG/ SG/
UT/ LA, in the form of grants.
NOTE: “Government Entity” means an authority or a board or any other body
including a society, trust, corporation,
(i) set up by an Act of Parliament or State Legislature; or
(ii) established by any Government,
with 90%. or more participation by way of equity or control, to carry out a
function entrusted by the CG/ SG/ UT/ LA.
9D Services by an old age home run by CG/ SG/ an entity registered under
section 12AA of the ITA, 1961 to its residents (aged 60 years or more) against
consideration upto ₹ 25,000 p.m. per member, if the consideration charged is
inclusive of charges for boarding, lodging and maintenance.
10 Services received from a provider of service located in a non- taxable
(As per territory by –
Notfn. (a) the CG/ SG/ UT/ LA/ GA/ individual in relation to any purpose other
No. than commerce, industry or any other business or profession;
9/2017 (b) an entity registered under section 12AA of the ITA, 1961 for the
– IT(R)) purposes of providing charitable activities;
(ba) way of supply of online educational journals or periodicals to an
educational institution other than an institution providing services by
way of-
(i) pre-school education and education up to higher secondary
school or equivalent; or
(ii) education as a part of an approved vocational education
course; or
(c) a person located in a non-taxable territory

Provided that the exemption shall not apply to –

(i) OIDAR services received by persons specified in entry (a) or entry (b);
or
(ii) services by way of transportation of goods by a vessel from a place
outside India up to the customs station of clearance in India received
by persons specified in the entry.
10 Services provided by way of pure labour contracts of construction, erection,
commissioning, installation, completion, fitting out, repair, maintenance,
renovation, or alteration of a civil structure or any other original works
pertaining to the beneficiary-led individual house construction or
enhancement under the Housing for All (Urban) Mission or Pradhan Mantri
Awas Yojana.
NOTE: “original works” means- all new constructions;
(i) all types of additions and alterations to abandoned or damaged
structures on land that are required to make them workable;
(ii) erection, commissioning or installation of plant, machinery or
equipment or structures, whether pre-fabricated or otherwise

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10A Services supplied by electricity distribution utilities by way of construction,

erection, commissioning, or installation of infrastructure for extending
electricity distribution network upto the tube well of the farmer or
agriculturalist for agricultural use.
10F Services supplied by an establishment of a person in India to any
(As per establishment of that person outside India, which are treated as
Notfn. establishments of distinct persons as per Explanation to Section 8 of the
No. IGSTA, 2017.
9/2017 Provided the place of supply of the service is outside India as per section 13 of
– IT(R)) IGSTA, 2017.

10G Import of services by UN or a specified international organization for official

(As per use of the UN or the specified international organization.
Notfn.
No. Explanation- For the purposes of this entry, unless the context otherwise
9/2017 requires, “specified international organization” means an international
– IT(R)) organization declared by the CG in pursuance of section 3 of the UN(PI)A,
1947, to which the provisions of the Schedule to the said Act apply.
10H Import of services by Foreign diplomatic mission or consular post in India, or
(As per diplomatic agents or career consular officers posted therein.
Notfn.
No. NOTE: Foreign diplomatic mission/ consular post in India/ diplomatic agents/
9/2017 career consular officers posted therein shall be entitled to exemption from
– IT(R)) IGST leviable on the import of services, subject to the conditions –
(i) that the foreign diplomatic mission/ consular post in India/ diplomatic
agents/ career consular officers posted therein, are entitled to
exemption from IGST, as stipulated in the certificate issued by the
Protocol Division of the MEA, based on the principle of reciprocity,
(ii) that the services imported are for official purpose of the said foreign
diplomatic mission/ consular post, or for personal use of the said
diplomatic agent/ career consular officer/ members of his/ her family,
(iii) that in case the Protocol Division of the MEA, after having issued a
certificate to any foreign diplomatic mission or consular post in India,
decides to withdraw the same subsequently, it shall communicate the
withdrawal to the foreign diplomatic mission/ consular post,
(iv) that the exemption from the whole of the IGST granted to the foreign
diplomatic mission/ consular post in India for official purpose or for
the personal use or use of their family members shall not be available
from the date of withdrawal.
11 Services by way of pure labour contracts of construction, erection,
commissioning, or installation of original works pertaining to a single
residential unit otherwise than as a part of a residential complex.
NOTE: residential complex” means any complex comprising of a building or
buildings, having more than one single residential unit.
“single residential unit” means a self-contained residential unit which is
designed for use, wholly or principally, for residential purposes for one family.
11A Service provided by FPS to CG/ SG/ UT by way of sale of food grains,
kerosene, sugar, edible oil etc. under Public Distribution System (PDS) against
consideration in the form of commission or margin.
12 Services by way of renting of residential dwelling for use as residence.

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12AA Services provided by an intermediary when location of both supplier and

(As per recipient of goods is outside the TT.
Notfn. Following documents shall be maintained for a minimum duration of 5 years:
No. 1) Copy of BoL
9/2017 2) Copy of executed contract between Supplier/ Seller and Receiver/
– IT(R)) Buyer of goods
3) Copy of commission debit note raised by an intermediary service
provider in TT from service recipient located in NTT
4) Copy of certificate of origin issued by service recipient located in NTT
5) Declaration letter from an intermediary service provider in TT on
company letter head confirming that commission debit note raised
relates to contract when both supplier and receiver of goods are
outside the TT
13 Services by a person by way of-
(a) conduct of any religious ceremony;
(b) renting of precincts of a religious place meant for general public,
owned or managed by an entity registered as a charitable or religious
trust u/s 12AA of the ITA, 1961 or a trust or an institution registered u/s
10(23C)(v) of the ITA, 1961 or a body or an authority covered u/s
10(23BBA) of the said Act:
Provided that nothing contained in entry (b) of this exemption shall apply to-
(i) renting of rooms where charges are ₹ 1,000 or more per day;
(ii) renting of premises, community halls, kalyanmandapam or open area,
and the like where charges are ₹ 10,000 or more per day;
(iii) renting of shops or other spaces for business or commerce where
charges are ₹ 10,000 or more per month.
NOTE: general public” means the body of people at large sufficiently defined
by some common quality of public or impersonal nature.
“religious place” means a place which is primarily meant for conduct of
prayers or worship pertaining to a religion, meditation, or spirituality.
14 Services by a hotel, inn, guest house, club or campsite, by whatever name
called, for residential or lodging purposes, having value of supply of a unit of
accommodation below or equal to ₹ 1,000 per day or equivalent.
NOTE: “declared tariff” includes charges for all amenities provided in the unit
of accommodation (given on rent for stay) like furniture, air-conditioner,
refrigerators or any other amenities, but without excluding any discount
offered on the published charges for such unit
15 Transport of passengers, with or without accompanied belongings, by –
a) air, embarking from or terminating in an airport located in the state of
o Arunachal Pradesh,
o Assam,
o Manipur,
o Meghalaya,
o Mizoram,
o Nagaland,
o Sikkim,
o Tripura or
o West Bengal (Bagdogra);
b) non-airconditioned contract carriage other than radio taxi, for
transportation of passengers, excluding tourism, conducted tour,
charter or hire; or
c) stage carriage other than airconditioned stage carriage.

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16 Services provided to the CG, by way of transport of passengers with or

without accompanied belongings, by air, embarking from or terminating at a
regional connectivity scheme airport, against consideration in the form of
viability gap funding:
Provided that nothing contained in this entry shall apply on or after the expiry
of a period of 3 years from the date of commencement of operations of the
regional connectivity scheme airport as notified by the Ministry of Civil
Aviation.
17 Service of transportation of passengers, with or without accompanied
belongings, by—
(a) railways in a class other than—
(i) first class; or
(ii) an air-conditioned coach;
(b) metro, monorail or tramway;
(c) inland waterways;
(d) public transport, other than predominantly for tourism purpose, in a
vessel between places located in India; and
(e) metered cabs or auto rickshaws (including e-rickshaws)
NOTE: “e-rickshaw” means a special purpose battery powered vehicle of
power not exceeding 4000 watts, having three wheels for carrying goods or
passengers, as the case may be, for hire or reward, manufactured,
constructed or adapted, equipped and maintained in accordance with such
specifications, as may be prescribed in this behalf.
“inland waterway” means national waterways as defined in clause (h) of
section 2 of the Inland Waterways Authority of India Act, 1985 (82 of 1985) or
other waterway on any inland water, as defined in clause (b) of section 2 of
the Inland Vessels Act, 1917 (1 of 1917)
“metered cab” means any contract carriage on which an automatic device, of
the type and make approved under the relevant rules by the State Transport
Authority, is fitted which indicates reading of the fare chargeable at any
moment and that is charged accordingly under the conditions of its permit
issued under the Motor Vehicles Act, 1988 (59 of 1988) and the rules made
thereunder (but does not include radio taxi).
18 Services by way of transportation of goods-
(a) by road except the services of—
(i) a GTA;
(ii) a courier agency;
(b) by inland waterways.
NOTE: “courier agency” means any person engaged in the door-to-door
transportation of time-sensitive documents, goods or articles utilising the
services of a person, either directly or indirectly, to carry or accompany such
documents, goods or articles.
19 Services by way of transportation of goods by an aircraft from a place
outside India upto the customs station of clearance in India.
19A Services by way of transportation of goods by an aircraft from customs
station of clearance in India to a place outside India.
NOTE: Nothing contained in this serial number shall apply after the 30th day
of September, 2019 2020

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19B Services by way of transportation of goods by a vessel from customs station

of clearance in India to a place outside India.
NOTE: Nothing contained in this serial number shall apply after the 30th day
of September, 2019 2020
20 Services by way of transportation by rail or a vessel from one place in India
to another of the following goods –
(a) relief materials meant for victims of natural or man-made disasters,
calamities, accidents or mishap;
(b) defence or military equipment;
(c) newspaper or magazines registered with the Registrar of
Newspapers;
(d) railway equipment or materials;
(e) agricultural produce;
(f) milk, salt and food grain including flours, pulses and rice; and
(g) organic manure.
NOTE: “agricultural produce” means any produce out of cultivation of plants
and rearing of all life forms of animals, except the rearing of horses, for food,
fibre, fuel, raw material or other similar products, on which either no further
processing is done or such processing is done as is usually done by a
cultivator or producer which does not alter its essential characteristics but
makes it marketable for primary market.
21 Services provided by a GTA, by way of transport in a goods carriage of –
a) agricultural produce;
b) goods, where consideration charged for the transportation of goods
on a consignment transported in a single carriage does not exceed ₹
1,500;
c) goods, where consideration charged for transportation of all such
goods for a single consignee does not exceed ₹ 750;
d) milk, salt and food grain including flour, pulses and rice;
e) organic manure;
f) newspaper or magazines registered with the Registrar of
Newspapers;
g) relief materials meant for victims of natural or man-made disasters,
calamities, accidents or mishap; or
h) defence or military equipment.
NOTE: “GTA” means any person who provides service in relation to transport
of goods by road and issues consignment note, by whatever name called.
21A Services provided by a GTA to an unregistered person, including an
unregistered CTP, other than the following recipients, namely: -
(a) any factory registered under or governed by the FA, 1948; or
(b) any Society registered under the SRA, 1860 or under any other law for
the time being in force in any part of India; or
(c) any Co-operative Society established by or under any law for the time
being in force; or
(d) any body corporate established, by or under any law for the time
being in force; or
(e) any partnership firm whether registered or not under any law
including association of persons;
(f) any CTP registered under the CGSTA/ IGSTA/ SGSTA/ UTGSTA.
21B Services provided by a GTA, by way of transport of goods in a goods
carriage, to, -

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(a) a Department/ Establishment of the CG/ SG/ UT; or

(b) LA; or
(c) GA,
which has taken registration under the CGSTA, 2017 only for the purpose of
deducting tax u/s 51 and not for making a taxable supply of goods/ services.
22 Services by way of giving on hire –
(a) to a state transport undertaking, a motor vehicle meant to carry more
than twelve passengers; or
(aa)to a local authority, an Electrically operated vehicle meant to carry
more than twelve passengers; or
(b) to a GTA, a means of transportation of goods.
(c) motor vehicle for transport of students, faculty and staff, to a person
providing services of transportation of students, faculty and staff to an
educational institution providing services by way of pre-school
education and education upto higher secondary school or equivalent

NOTE: “Electrically operated vehicle” means vehicle falling under Chapter 87

in the First Schedule to the Customs Tariff Act, 1975 which is run solely on
electrical energy derived from an external source or from one or more
electrical batteries fitted to such road vehicle.’
23 Service by way of access to a road or a bridge on payment of toll charges.
23A Service by way of access to a road or a bridge on payment of annuity.
24 Services by way of loading, unloading, packing, storage or warehousing of
rice.
24A Services by way of warehousing of minor forest produce.
24B Services by way of storage or warehousing of cereals, pulses, fruits,
nuts and vegetables, spices, copra, sugarcane, jaggery, raw vegetable fibres
such as cotton, flax, jute etc., indigo, unmanufactured tobacco, betel leaves,
tendu leaves, coffee and tea.
25 Transmission or distribution of electricity by an electricity transmission or
distribution utility.
NOTE: “electricity transmission or distribution utility” means the Central
Electricity Authority; a State Electricity Board; the Central Transmission Utility
or a State Transmission Utility notified under the Electricity Act, 2003 (36 of
2003); or a distribution or transmission licensee under the said Act, or any
other entity entrusted with such function by the CG/ SG.

26 Services by the RBI.

27 Services by way of—
(a) extending deposits, loans or advances in so far as the consideration is
represented by way of interest or discount (other than interest
involved in credit card services);
(b) inter se sale or purchase of foreign currency amongst banks or
authorised dealers of foreign exchange or amongst banks and such
dealers.

NOTE: “interest” means interest payable in any manner in respect of any

moneys borrowed or debt incurred (including a deposit, claim or other similar
right or obligation) but does not include any service fee or other charge in

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respect of the moneys borrowed or debt incurred or in respect of any credit

facility which has not been utilised.
27A Services provided by a bank to BSBD account holders under PMJDY.
28 Services of life insurance business provided by way of annuity under the NPS
regulated by the PFRDAI under the PFRDA Act, 2013.
29 Services of life insurance business provided or agreed to be provided by the
Army, Naval and Air Force Group Insurance Funds to members of the Army,
Navy and Air Force, respectively, under the Group Insurance Schemes of the
CG.
29A Services of life insurance provided or agreed to be provided by the Naval
Group Insurance Fund to the personnel of Coast Guard under the Group
Insurance Schemes of the CG.
29B Services of life insurance provided or agreed to be provided by the Central
Armed Police Forces (under Ministry of Home Affairs) Group Insurance Funds
to their members under the Group Insurance Schemes of the concerned
Central Armed Police Force.
30 Services by the ESIC to persons governed under the ESI Act, 1948.
31 Services provided by the EPFO to the persons governed under the EPFMP Act,
1952.
31A Services by Coal Mines Provident Fund Organization to persons governed by
the Coal Mines Provident Fund and Miscellaneous Provisions Act, 1948.
31B Services by NPS Trust to its members against consideration in the form of
administrative fee.
32 Services provided by the IRDAI to insurers under the IRDAI Act, 1999.
33 Services provided by the SEBI set up under the SEBI Act, 1992 (15 of 1992) by
way of protecting the interests of investors in securities and to promote the
development of, and to regulate, the securities market.
34 Services by an acquiring bank, to any person in relation to settlement of an
amount upto ₹ 2,000 in a single transaction transacted through credit card/
debit card/ charge card/ other payment card service.

Explanation— For the purposes of this entry, “acquiring bank” means any
bank, FI including NBFC or any other person, who makes the payment to any
person who accepts such card.
34A Services supplied by CG/ SG/ UT to their undertakings or PSUs by way of
guaranteeing the loans taken by such undertakings/ PSUs from the banking
companies and FIs.
35 Services of general insurance business provided under following schemes
(a) Hut Insurance Scheme;
(b) Cattle Insurance under Swarnajaynti Gram Swarozgar Yojna (earlier
known as Integrated Rural Development Programme);
(c) Scheme for Insurance of Tribals;
(d) Janata Personal Accident Policy and Gramin Accident Policy;
(e) Group Personal Accident Policy for Self-Employed Women;
(f) Agricultural Pumpset and Failed Well Insurance;
(g) premia collected on export credit insurance;

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(h) Restructured Weather Based Crop Insurance Scheme (RWCIS),

approved by the Government of India and implemented by the
Ministry of Agriculture;
(i) Jan Arogya Bima Policy;
(j) Pradhan Mantri Fasal Bima Yojana (PMFBY);
(k) Pilot Scheme on Seed Crop Insurance;
(l) Central Sector Scheme on Cattle Insurance;
(m) Universal Health Insurance Scheme;
(n) Rashtriya Swasthya Bima Yojana;
(o) Coconut Palm Insurance Scheme;
(p) Pradhan Mantri Suraksha Bima Yojna;
(q) Niramaya Health Insurance Scheme implemented by the Trust
constituted under the provisions of the National Trust for the Welfare
of Persons with Autism, Cerebral Palsy, Mental Retardation and
Multiple Disabilities Act, 1999.
(r) Bangla Shasya Bima
36 Services of life insurance business provided under following schemes-
(a) Janashree Bima Yojana;
(b) Aam Aadmi Bima Yojana;
(c) Life micro-insurance product as approved by the IRDA, having
maximum amount of cover of ₹ 2,00,000;
(d) Varishtha Pension Bima Yojana;
(e) Pradhan Mantri Jeevan Jyoti Bima Yojana;
(f) Pradhan Mantri Jan Dhan Yojana;
(g) Pradhan Mantri Vaya Vandan Yojana
36A Services by way of reinsurance of the insurance schemes specified in sl. no.
35/ 36/ 40
37 Services by way of collection of contribution under the Atal Pension Yojana.
38 Services by way of collection of contribution under any pension scheme of the
SG.
39 Services by the following persons in respective capacities –
(a) business facilitator (BF) or a business correspondent (BC) to a bank
with respect to accounts in its rural area branch;
(b) any person as an intermediary to a business facilitator or a business
correspondent with respect to services mentioned in entry (a); or
(c) business facilitator or a business correspondent to an insurance
company in a rural area.

NOTE: “business facilitator or business correspondent” means an intermediary

appointed under the business facilitator model or the business correspondent
model by a bank or an insurance company under the guidelines issued by the
RBI.

“insurance company” means a company carrying on life insurance business

or general insurance business.

“rural area” means the area comprised in a village as defined in land revenue
records, excluding-
the area under any municipal committee/ municipal corporation/ town area
committee/ cantonment board/ notified area committee; or any area that
may be notified as an urban area by the CG/ SG.

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39A Services by an intermediary of financial services located in a multi services

SEZ with International Financial Services Centre (IFSC) status to a customer
located outside India for international financial services in currencies other
than Indian rupees (INR).

Explanation- For the purposes of this entry, the intermediary of financial

services in IFSC is a person,-
(i) who is permitted or recognised as such by the GOI or any Regulator
appointed for regulation of IFSC; or
(ii) who is treated as a person resident outside India under the Foreign
Exchange Management (International Financial Services Centre)
Regulations, 2015; or
(iii) who is registered under the Insurance Regulatory and Development
Authority of India (International Financial Service Centre) Guidelines,
2015 as IFSC Insurance Office; or
(iv) who is permitted as such by SEBI under the Securities and Exchange
Board of India (International Financial Services Centres) Guidelines,
2015.
40 Services provided to the CG/ SG/ UT under any insurance scheme for which
total premium is paid by the CG/ SG/ UT.
41 Upfront amount (called as premium, salami, cost, price, development charges
or by any other name) payable in respect of service by way of granting of
long term lease of 30 years, or more) of industrial plots or plots for
development of infrastructure for financial business, provided by the SG.
Industrial Development Corporations or Undertakings or by any other entity
having 50% or more ownership of CG/ SG/ UT to the industrial units or the
developers in any industrial or financial business area.

NOTE: The CG/ SG/ UT shall have 50% or more ownership in the entity
directly or through an entity which is wholly owned by the CG/ SG/ UT
41A Service by way of TDR or FSI (including additional FSI) on or after 01 April,
2019 for construction of residential apartments by a promoter in a project,
intended for sale to a buyer, wholly or partly, except where the entire
consideration has been received after issuance of completion certificate,
where required, by the competent authority or after its first occupation,
whichever is earlier.

The amount of GST exemption available for construction of residential

apartments in the project under this notification shall be calculated as under:
[GST payable on TDR/ FSI (including additional FSI) for construction of the
project] × (carpet area of the residential apartments in the project ÷ Total
carpet area of the residential and commercial apartments in the project)

Provided that the promoter shall be liable to pay tax at the applicable rate, on
reverse charge basis, on such proportion of value of development rights, or
FSI (including additional FSI), as is attributable to the residential apartments,
which remain un-booked on the date of issuance of completion certificate, or
first occupation of the project, as the case may be, in the following manner -

[GST payable on TDR/ FSI (including additional FSI) for construction of the
residential apartments in the project but for the exemption contained herein] ×
(carpet area of the residential apartments in the project which remain un-

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booked on the date of issuance of completion certificate or first occupation ÷

Total carpet area of the residential apartments in the project)

Provided further that tax payable in terms of the first proviso hereinabove
shall not exceed 0.5% of the value in case of affordable residential
apartments and 2.5% of the value in case of residential apartments other than
affordable residential apartments remaining un-booked on the date of
issuance of completion certificate or first occupation.

The liability to pay CGST on the said portion of the development rights or FSI,
calculated as above, shall arise on the date of completion or first occupation
of the project, whichever is earlier.

NOTE: Value of supply of service by way of TDRs/ FSI by a person to the

promoter against consideration in the form of residential/ commercial
apartments shall be deemed to be equal to the value of similar apartments
charged by the promoter from the independent buyers nearest to the date on
which such development rights or FSI is transferred to the promoter.

NOTE: Value of portion of residential/ commercial apartments remaining un-

booked on the date of issuance of completion certificate or first occupation,
as the case may be, shall be deemed to be equal to the value of similar
apartments charged by the promoter nearest to the date of issuance of
completion certificate or first occupation, as the case may be.

NOTE: The term “project” shall mean a REP/ RREP

NOTE: The term “RREP” shall mean a REP in which the carpet area of the
commercial apartments ≤ 15% of the total carpet area of all the apartments in
the REP

NOTE: “an apartment booked on/ before the date of completion/ first
occupation of the project” shall mean an apartment which meets all the
following 3 conditions –

(a) part of supply of construction of the apartment service has time of

supply on/ before the said date, and
(b) at least one instalment has been credited to the bank account of the
registered person on/ before the said date as consideration, and
(c) an allotment letter/ sale agreement/ any other similar document
evidencing booking of the apartment has been issued on/ before the
said date.

NOTE: “FSI” shall mean the ratio of a building’s total floor area (gross floor
area) to the size of the piece of land upon which it is built
41B Upfront amount (called as premium, salami, cost, price, development charges
or by any other name) payable in respect of service by way of granting of
long term lease of 30 years, or more, on or after 01.04.2019, for construction
of residential apartments by a promoter in a project, intended for sale to a
buyer, wholly or partly, except where the entire consideration has been
received after issuance of completion certificate, where required, by the
competent authority or after its first occupation, whichever is earlier. The

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amount of GST exemption available for construction of residential apartments

in the project under this notification shall be calculated as under:

[GST payable on upfront amount (called as premium, salami, cost, price,

development charges or by any other name) payable for long term lease of
land for construction of the project] × (carpet area of the residential
apartments in the project ÷ Total carpet area of the residential and
commercial apartments in the project).

Provided that the promoter shall be liable to pay tax at the applicable rate, on
reverse charge basis, on such proportion of upfront amount (called as
premium, salami, cost, price, development charges or by any other name)
paid for long term lease of land, as is attributable to the residential
apartments, which remain un-booked on the date of issuance of completion
certificate, or first occupation of the project, as the case may be, in the
following manner –

[GST payable on upfront amount (called as premium, salami, cost, price,

development charges or by any other name) payable for long term lease of
land for construction of the residential apartments in the project but for the
exemption contained herein] × (carpet area of the residential apartments in
the project which remain un-booked on the date of issuance of completion
certificate or first occupation ÷ Total carpet area of the residential apartments
in the project);

Provided further that the tax payable in terms of the first proviso shall not
exceed 0.5% of the value in case of affordable residential apartments and
2.5% of the value in case of residential apartments other than affordable
residential apartments remaining un-booked on the date of issuance of
completion certificate or first occupation.

The liability to pay CGST on the said proportion of upfront amount (called as
premium, salami, cost, price, development charges or by any other name)
paid for long term lease of land, calculated as above, shall arise on the date
of issue of completion certificate or first occupation of the project, as the case
may be.
42 Services received by the RBI, from outside India in relation to management of
(As per forex reserves.
Notfn.
No.
9/2017
– IT(R))
42 Services provided by the CG/ SG/ UT/ LA by way of allowing a business entity
to operate as a telecom service provider or use radio frequency spectrum
during the period prior to the 1 April, 2016, on payment of licence fee or
spectrum user charges, as the case may be.
43 Services of leasing of assets (rolling stock assets including wagons, coaches,
locos) by the Indian Railways Finance Corporation to Indian Railways.
44 Services provided by an incubatee up to a total turnover of ₹ 50 lakhs in a FY
subject to the following conditions, namely-
(a) the total turnover had not exceeded ₹ 50 lakhs during the preceding
FY; and

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 GST Simplified™ Ready Reckoner for Students and Professionals

(b) a period of 3 years has not elapsed from the date of entering into an
agreement as an incubatee.

NOTE: “incubatee” means an entrepreneur located within the premises of a

TBI/ STEP recognised by the National Science and Technology
Entrepreneurship Development Board (NSTEDB) of the Department of Science
and Technology, Government of India and who has entered into an
agreement with the TBI/ STEP to enable himself to develop and produce hi-
tech and innovative products.
45 Services provided by-
(a) an arbitral tribunal to –
(i) any person other than a business entity; or
(ii) a business entity with an aggregate turnover up to ₹ 20 lakhs
(₹ 10 lakhs in the case of special category states) in the
preceding FY such amount in the preceding FY as makes it
eligible for exemption from registration under the CGSTA, 2017;
(iii) the CG/ SG/ UT/ LA/ GA/ GE
(b) a partnership firm of advocates or an individual as an advocate other
than a senior advocate, by way of legal services to-
(i) an advocate or partnership firm of advocates providing legal
services;
(ii) any person other than a business entity; or
(iii) a business entity with an aggregate turnover up to ₹ 20 lakhs
(₹ 10 lakhs in the case of special category states) in the
preceding FY such amount in the preceding FY as makes it
eligible for exemption from registration under the CGSTA, 2017;
(iv) the CG/ SG/ UT/ LA/ GA/ GE
(c) a senior advocate by way of legal services to-
(i) any person other than a business entity; or
(ii) a business entity with an aggregate turnover up to ₹ 20 lakhs
(₹ 10 lakhs in the case of special category states) in the
preceding FY such amount in the preceding FY as makes it
eligible for exemption from registration under the CGSTA, 2017;
(iii) the CG/ SG/ UT/ LA/ GA/ GE

NOTE: “legal service” means any service provided in relation to advice,

consultancy or assistance in any branch of law, in any manner and includes
representational services before any court, tribunal or authority.
46 Services by a veterinary clinic in relation to health care of animals or birds.
47 Services provided by the CG/ SG/ UT/ LA by way of-
(a) registration required under any law for the time being in force;
(b) testing, calibration, safety check or certification relating to protection
or safety of workers, consumers or public at large, including fire
license, required under any law for the time being in force.
47A Services by way of licensing, registration and analysis or testing of food
samples supplied by the FSSAI to Food Business Operators.
48 Taxable services, provided or to be provided, by a TBI/ STEP recognised by
the National Science and Technology Entrepreneurship Development Board
(NSTEDB) of the Department of Science and Technology, Government of India
or bio-incubators recognised by the Biotechnology Industry Research
Assistance Council, under the Department of Biotechnology, Government of
India.

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 GST Simplified™ Ready Reckoner for Students and Professionals

49 Services by way of collecting or providing news by an independent journalist/

PTI/ UNI.
50 Services of public libraries by way of lending of books, publications or any
other knowledge-enhancing content or material.
51 Services provided by the GSTN to the CG/ SG/ UT for implementation of GST.
52 Services by an organiser to any person in respect of a business exhibition held
outside India.
53 Services by way of sponsorship of sporting events organised –
(a) by a national sports federation, or its affiliated federations, where the
participating teams or individuals represent any district, State, zone or
Country;
(b) by Association of Indian Universities, Inter-University Sports Board,
School Games Federation of India, All India Sports Council for the
Deaf, Paralympic Committee of India or Special Olympics Bharat;
(c) by the Central Civil Services Cultural and Sports Board;
(d) as part of national games, by the Indian Olympic Association; or
(e) under the Panchayat Yuva Kreeda Aur Khel Abhiyaan Scheme.
53A Services by way of fumigation in a warehouse of agricultural produce.
54 Services provided by a tour operator to a foreign tourist in relation to a tour
(As per conducted wholly outside India.
Notfn.
No.
9/2017
– IT(R))
54 Services relating to cultivation of plants and rearing of all life forms of
animals, except the rearing of horses, for food, fibre, fuel, raw material or
other similar products or agricultural produce by way of—
(i) agricultural operations directly related to production of any
agricultural produce including cultivation, harvesting, threshing, plant
protection or testing;
(ii) supply of farm labour;
(iii) processes carried out at an agricultural farm including tending,
pruning, cutting, harvesting, drying, cleaning, trimming, sun drying,
fumigating, curing, sorting, grading, cooling or bulk packaging and
such like operations which do not alter the essential characteristics of
agricultural produce but make it only marketable for the primary
market;
(iv) renting or leasing of agro-machinery or vacant land with or without a
structure incidental to its use;
(v) loading, unloading, packing, storage or warehousing of agricultural
produce;
(vi) agricultural extension services;
(vii) services by any Agricultural Produce Marketing Committee or Board
or services provided by a commission agent for sale or purchase of
agricultural produce;
(viii) services by way of fumigation in a warehouse of agricultural produce.

NOTE: “agricultural extension” means application of scientific research and

knowledge to agricultural practices through farmer education or training.
55 Carrying out an intermediate production process as job work in relation to
cultivation of plants and rearing of all life forms of animals, except the rearing

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 GST Simplified™ Ready Reckoner for Students and Professionals

of horses, for food, fibre, fuel, raw material or other similar products or
agricultural produce.
55A Services by way of artificial insemination of livestock (other than horses)
56 Services by way of slaughtering of animals.
57 Services by way of pre-conditioning, precooling, ripening, waxing, retail
packing, labelling of fruits and vegetables which do not change or alter the
essential characteristics of the said fruits or vegetables.
58 Services provided by the National Centre for Cold Chain Development under
the Ministry of Agriculture, Cooperation and Farmer’s Welfare by way of cold
chain knowledge dissemination.
59 Services by a foreign diplomatic mission located in India.
60 Services by a specified organisation in respect of a religious pilgrimage
facilitated by the Government of India, under bilateral arrangement.

NOTE: “specified organisation” shall mean-

(i) Kumaon Mandal Vikas Nigam Limited, a Government of Uttarakhand
Undertaking; or
(ii) ‘Committee’ or ‘State Committee’ as defined in section 2 of the Haj
Committee Act, 2002.
61 Services provided by the CG/ SG/ UT/ LA by way of issuance of passport,
visa, driving licence, birth certificate or death certificate.
62 Services provided by the CG/ SG/ UT/ LA by way of tolerating non-
performance of a contract for which consideration in the form of fines or
liquidated damages is payable to the CG/ SG/ UT/ LA under such contract.
63 Services provided by the CG/ SG/ UT/ LA by way of assignment of right to use
natural resources to an individual farmer for cultivation of plants and rearing
of all life forms of animals, except the rearing of horses, for food, fibre, fuel,
raw material or other similar products.
64 Services provided by the CG/ SG/ UT/ LA by way of assignment of right to use
any natural resource where such right to use was assigned by the CG/ SG/
UT/ LA before the 1 April, 2016:
Provided that the exemption shall apply only to tax payable on one time
charge payable, in full upfront or in instalments, for assignment of right to use
such natural resource.
65 Services provided by the CG/ SG/ UT by way of deputing officers after office
hours or on holidays for inspection or container stuffing or such other duties in
relation to import export cargo on payment of Merchant Overtime charges.
65A Services by way of providing information under the RTI Act, 2005.
65B Services supplied by a SG to Excess Royalty Collection Contractor (ERCC) by
way of assigning the right to collect royalty on behalf of the SG on the mineral
dispatched by the mining lease holders.
Provided that at the end of the contract period, ERCC shall submit an account
to the SG and certify that
the amount of GST deposited by mining lease holders on royalty > the GST
exempted on the service provided by SG to the ERCC of assignment of right to
collect royalty
and where such amount of GST paid by mining lease holders < amount of GST

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 GST Simplified™ Ready Reckoner for Students and Professionals

exempted, the exemption shall be restricted to the amount of GST paid by the
mining lease holders
and the ERCC shall pay the difference between GST exempted on the service
provided by SG to the ERCC of assignment of right to collect royalty and GST
paid by the mining lease holders on royalty.

NOTE: “mining lease holder” means a person who has been granted mining
lease, quarry lease/ license/ other mineral concession under the Mines and
Minerals (Development and Regulation) Act, 1957, the rules made thereunder
or the rules made by a SG u/s 15(1) of the Mines and Minerals (Development
and Regulation) Act, 1957.
66 Services provided –
(a) by an educational institution to its students, faculty and staff;
(aa) by an educational institution by way of conduct of entrance
examination against consideration in the form of entrance fee;
(b) to an educational institution, by way of-
(i) transportation of students, faculty and staff;
(ii) catering, including any mid-day meals scheme sponsored by
the Central Government, State Government or Union territory;
(iii) security or cleaning or housekeeping services performed in
such educational institution;
(iv) services relating to admission to, or conduct of examination
by, such institution;
(v) supply of online educational journals or periodicals:
Provided that nothing contained in sub-items (i), (ii) and (iii) of item (b) shall
apply to an educational institution other than an institution providing services
by way of pre-school education and education up to higher secondary school
or equivalent.
Provided further that nothing contained in sub-item (v) of item (b) shall apply
to an institution providing services by way of-
(i) pre-school education and education up to higher secondary school or
equivalent; or
(ii) education as a part of an approved vocational education course.

NOTE: “educational institution” means an institution providing services by

way of-
(i) pre-school education and education up to higher secondary school or
equivalent;
(ii) education as a part of a curriculum for obtaining a qualification
recognised by any law for the time being in force;
(iii) education as a part of an approved vocational education course

“approved vocational education course” means-

(i) a course run by an industrial training institute or an industrial training
centre affiliated to the NCVT/ SCVT offering courses in designated
trades notified under the Apprentices Act, 1961; or
(ii) a Modular Employable Skill Course, approved by the NCVT, run by a
person registered with the Directorate General of Training, Ministry of
Skill Development and Entrepreneurship

Central and State Educational Boards shall be treated as Educational

Institution for the limited purpose of providing services by way of conduct of
examination to the students.
68 Services provided to a recognised sports body by-

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 GST Simplified™ Ready Reckoner for Students and Professionals

(a) an individual as a player, referee, umpire, coach or team manager for

participation in a sporting event organised by a recognized sports
body;
(b) another recognised sports body.

NOTE: “recognised sports body” means –

(i) the Indian Olympic Association;
(ii) Sports Authority of India;
(iii) a national sports federation recognised by the Ministry of Sports and
Youth Affairs of the CG, and its affiliate federations;
(iv) national sports promotion organisations recognised by the Ministry of
Sports and Youth Affairs of the CG;
(v) the International Olympic Association or a federation recognised by
the International Olympic Association; or
(vi) a federation or a body which regulates a sport at international level
and its affiliated federations or bodies regulating a sport in India.
69 Any services provided by, -
(a) the NSDC set up by the Government of India;
(b) a SSC approved by the NSDC;
(c) an assessment agency approved by the SSC/ NSDC;
(d) a training partner approved by the NSDC/ SSC,
in relation to-
(i) the National Skill Development Programme implemented by the
NSDC; or
(ii) a vocational skill development course under the National Skill
Certification and Monetary Reward Scheme; or
(iii) any other Scheme implemented by the NSDC.
70 Services of assessing bodies empanelled centrally by the Directorate General
of Training, Ministry of Skill Development and Entrepreneurship by way of
assessments under the Skill Development Initiative Scheme.
71 Services provided by training providers (Project implementation agencies)
under Deen Dayal Upadhyaya Grameen Kaushalya Yojana implemented by
the Ministry of Rural Development, Government of India by way of offering
skill or vocational training courses certified by the NCVT.
72 Services provided to the CG/ SG/ UT administration under any training
programme for which total expenditure is borne by the CG/ SG/ UT
administration.
73 Services provided by the cord blood banks by way of preservation of stem
cells or any other service in relation to such preservation.
74 Services by way of-
(a) health care services by a clinical establishment, an authorised medical
practitioner or para-medics;
(b) services provided by way of transportation of a patient in an
ambulance, other than those specified in (a) above.

NOTE: “authorised medical practitioner” means a medical practitioner

registered with any of the councils of the recognised system of medicines
established or recognised by law in India and includes a medical professional
having the requisite qualification to practice in any recognised system of
medicines in India as per any law for the time being in force.

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 GST Simplified™ Ready Reckoner for Students and Professionals

“clinical establishment” means a hospital, nursing home, clinic, sanatorium or

any other institution by, whatever name called, that offers services or facilities
requiring diagnosis or treatment or care for illness, injury, deformity,
abnormality or pregnancy in any recognised system of medicines in India, or
a place established as an independent entity or a part of an establishment to
carry out diagnostic or investigative services of diseases.

“health care services” means any service by way of diagnosis or treatment or

care for illness, injury, deformity, abnormality or pregnancy in any recognised
system of medicines in India and includes services by way of transportation
of the patient to and from a clinical establishment, but does not include hair
transplant or cosmetic or plastic surgery, except when undertaken to restore
or to reconstruct anatomy or functions of body affected due to congenital
defects, developmental abnormalities, injury or trauma
74A Services provided by rehabilitation professionals recognised under the RCI
Act, 1992 by way of rehabilitation, therapy or counselling and such other
activity as covered by the said Act at medical establishments, educational
institutions, rehabilitation centers established by CG/ SG/ UT/ an entity
registered u/s 12AA of the ITA, 1961.
75 Services provided by operators of the common bio-medical waste treatment
facility to a clinical establishment by way of treatment or disposal of bio-
medical waste or the processes incidental thereto.
76 Services by way of public conveniences such as provision of facilities of
bathroom, washrooms, lavatories, urinal or toilets.
77 Service by an unincorporated body or a non- profit entity registered under
any law for the time being in force, to its own members by way of
reimbursement of charges or share of contribution –
(a) as a trade union;
(b) for the provision of carrying out any activity which is exempt from the
levy of GST; or
(c) up to an amount of ₹ 7,500 p.m. per member for sourcing of goods/
services from a third person for the common use of its members in a
housing society or a residential complex.
77A Services provided by an unincorporated body/ NPE registered under any law,
engaged in –
(i) activities relating to the welfare of industrial or agricultural labour or
farmers; or
(ii) promotion of trade, commerce, industry, agriculture, art, science,
literature, culture, sports, education, social welfare, charitable
activities and protection of environment,
to its own members against consideration in the form of membership fee upto
an amount of ₹ 1,000 p.a. per member.
78 Services by an artist by way of a performance in folk or classical art forms of-
(a) music, or
(b) dance, or
(c) theatre,
if the consideration charged for such performance is not more than ₹
1,50,000:
Provided that the exemption shall not apply to service provided by such artist
as a brand ambassador.

84
 GST Simplified™ Ready Reckoner for Students and Professionals

NOTE: “brand ambassador” means a person engaged for promotion or

marketing of a brand of goods, service, property or actionable claim, event or
endorsement of name, including a trade name, logo or house mark of any
person.
79 Services by way of admission to a museum, national park, wildlife sanctuary,
tiger reserve or zoo.
79A Services by way of admission to a protected monument so declared under
the Ancient Monuments and Archaeological Sites and Remains Act, 1958 or
any of the State Acts, for the time being in force.
80 Services by way of training or coaching in recreational activities relating to-
(a) arts or culture, or
(b) sports by charitable entities registered under section 12AA of the ITA,
1961.
81 Services by way of right to admission to-
(a) circus, dance, or theatrical performance including drama or ballet;
(b) award function, concert, pageant, musical performance or any
sporting event other than a recognised sporting event;
(c) recognised sporting event,
(d) planetarium
where the consideration for right to admission to the events or places as
referred to in items (a), (b), (c) or (d) above is not more than ₹ 500 per person.

NOTE: “recognised sporting event” means any sporting event-

(i) organised by a recognised sports body where the participating team
or individual represent any district, state, zone or country;
(ii) organised –
(A) by a national sports federation, or its affiliated federations,
where the participating teams or individuals represent any
district, state or zone;
(B) by Association of Indian Universities, Inter-University Sports
Board, School Games Federation of India, All India Sports
Council for the Deaf, Paralympic Committee of India or Special
Olympics Bharat;
(C) by Central Civil Services Cultural and Sports Board;
(D) as part of national games, by Indian Olympic Association; or
(E) under Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA)
Scheme.
82 Services by way of right to admission to the events organised under FIFA U-17
World Cup 2017
82A Services by way of right to admission to the events organised under FIFA U-17
Women's World Cup 2020.

Sarva Sugam Charitable Trust, a trust registered under section 12AA of the Income Tax Act,
1961 provides the following information relating to supply of its services for the month of
August 2017
Renting of residential dwelling for use as a residence 18,00,000
Renting of rooms for Pilgrims (Charges per day ₹ 1,200) 8,00,000
Renting of rooms for devotees (Charges per day ₹ 750) 6,00,000
Renting of Kalyana Mandapam (Charges per day ₹ 15,000) 12,00,000
Renting of Halls and open space (Charges per day ₹ 7,500) 10,75,000
Renting of Shops for business (Charges per month ₹ 9,500) 4,75,000

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 GST Simplified™ Ready Reckoner for Students and Professionals

Renting of Shops for business (Charges per month ₹ 12,000) 7,50,000

Compute the total taxable value of supply for the month of August 2017 assuming that the
above amounts are exclusive of GST.
[CA-Final, May 2018]

Calculation of total taxable value of supply

Particulars Amount (₹)
Renting of residential dwelling for use as a residence [Sl. No. 12] -
Renting of rooms for Pilgrims (Charges per day ₹ 1,200) [Sl. No. 13] 8,00,000
Renting of rooms for devotees (Charges per day ₹ 750) [Sl. No. 13] -
Renting of Kalyana Mandapam (Charges per day ₹ 15,000) [Sl. No. 13] 12,00,000
Renting of Halls and open space (Charges per day ₹ 7,500) [Sl. No. 13] -
Renting of Shops for business (Charges per month ₹ 9,500) [Sl. No. 13] -
Renting of Shops for business (Charges per month ₹ 12,000) [Sl. No. 13] 7,50,000
Total 27,50,000
Note: It has been assumed that the services of renting of room, Kalyana Mandapam, Halls
and Shops are being supplied in a religious place.

Mr. Nagarjun, a registered supplier of Chennai, has received the following amounts in
respect of the activities undertaken by him during the month ended on 30th September,
2017:
Sl. No. Particulars Amount (₹)
(i) Amount charged for service provided to recognized sports body 50,000
as selector of national team
(ii) Commission received as an insurance agent from insurance 65,000
company
(iii) Amount charged as business correspondent for the services 15,000
provided to the urban branch of a nationalized bank with respect
to savings bank accounts
(iv) Service to foreign diplomatic mission located in India 28,000
(v) Funeral services 30,000
He received the services from unregistered goods transport agency for his business
activities relating to serial numbers (i) and (iii) above and paid freight of ₹ 45,000 (his
aggregate turnover of previous year was ₹ 9,90,000).
Note: All the transactions stated above are intra state transactions and also are exclusive
of GST.
You are required to calculate gross value of taxable supply on which GST is to be paid by
Mr. Nagarjun for the month of September, 2017.
Working notes should form part of your answer.
[CA-Final, May 2018]

Calculation of gross value of taxable supply

Particulars Amount (₹)
Amount charged for service provided to recognized sports body as selector 50,000
of national team
Commission received as an insurance agent from insurance company -
Amount charged as business correspondent for the services provided to 15,000
the urban branch of a nationalized bank with respect to savings bank
accounts
Service to foreign diplomatic mission located in India 28,000
Funeral services -
Freight for GTA services received 45,000
Total 1,38,000

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 GST Simplified™ Ready Reckoner for Students and Professionals

M/s Pradyumn Corporation Pvt. Ltd., a registered dealer of Mumbai furnishes you
following information for the month of October, 2017.
Particulars Amount (₹)
(i) Intra state sale of taxable goods (out of above ₹ 50,000 was 2,00,000
received as advance in September, 2017)
(ii) Goods purchased from unregistered dealer (purchase on 20th 50,000
October, 2017) (10,000 in case of inter state and balance intra state)
(iii) Received for services by way of labour contracts for repairing a 50,000
single residential unit otherwise than as a part of residential complex
(it is intra-state transaction)
(iv) Professional fees paid to Ms. Udadhi located in a non-taxable 50,000
territory (it amounts to inter state transaction)
Compute GST liability (CGST, SGST or IGST, as the case may be) of M/s Pradyumn
Corporation Pvt. Ltd. for the month of October, 2017. Assume the rates of GST as under:
CGST 9%
SGST 9%
IGST 18%
Note: Turnover of M/s Pradyumn Corporation Pvt. Ltd. was ₹ 2 crore in the Previous
Financial Year.
[CA-IPCE, May 2018]
Calculation of GST liability for October, 2017
Particulars CGST (₹) SGST (₹) IGST (₹)
Intra state sale 13,500 13,500 -
Reverse charge on goods purchased - - -
Labour contract service receipts 4,500 4,500 -
Reverse charge on import of service of Mr. Udadhi - - 9,000
Total 18,000 18,000 9,000

Examine whether GST is exempted on the following independent supply of services:

(i) Teja & Co, a tour operator, provides services to a foreign tourist for tour conducted
to Jammu Kashmir and receives a sum of ₹ 3,00,000.
(ii) Ms. Poorva acts as a Team Manager for Indian Sports League (ISL), a recognised
sports body, for a Tennis tournament organised by Multi brand retail company and
received a remuneration of ₹ 2,00,000.
[CA-Inter, May 2018]

(i) No
(ii) No

Mr. Ijas, a performing artist, provides the following information relating to October, 2017:
Receipts from: Amount (₹)
Performing classical dance 1,49,000
Performing in television serial 2,80,000
Services as brand ambassador 12,00,000
Coaching in recreational activities relating to arts 2,10,000
Activities in sculpture making 3,10,000
Performing western dance 90,000
Determine the value of taxable supply of services and GST payable by Mr. Ijas for October,
2017, GST @ 18%.
[CMA-Inter, Jun 2018]

Calculation of value of taxable supply and GST payable by Mr. Ijas

Particulars Amount (₹)
Receipts from performing classical dance -
Receipts from performing in television serial 2,80,000

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Receipts from services as brand ambassador 12,00,000

Receipts from coaching in recreational activities relating to arts -
Receipts from activities in sculpture making 3,10,000
Receipts from performing western dance 90,000
Total 18,80,000
GST Payable @ 18% 3,38,400

State with reasons whether the following transactions attract GST or not.
(i) Services provided by a private school bus operator to a school in relation to
transportation of students to and from the school.
(ii) Campus interview conducted by M/s Sona College of Engineering, Mumbai by
collecting entry fee from the corporate houses.
(iii) Ms. Geethanjali, a classical dancer receives ₹ 1,00,000 from an event management
company for performing in a stage programme.
(iv) Madras Music Academy charged ₹ 500 per ticket for a music concert of Mr. Srinivas,
an Indian Classical Singer. But charged ₹ 1,000 per ticket for a music concert of
another Indian classical singer Mr. K. J. Jesudas
[CMA-Inter, Jun 2018]

(i) No
(ii) Yes
(iii) No
(iv) No, Yes

Worldwide Pvt. Ltd. (a registered Taxable Person) having the Gross receipt of ₹ 50 Lakhs in
the previous financial year provides the following information relating to their services for
the month of July, 2018.
Sr. No. Particulars Amount (₹)
(1) Running a boarding school 2,40,000
(2) Fees from prospective employer for campus interview 1,70,000
(3) Education Services for obtaining the qualification recognised by 3,10,000
Law of Foreign Country
(4) Renting of Furnished Flats for Temporary Stay to different 1,20,000
persons (Rent per day is less than ₹ 1,000 per person)
(5) Conducting Modular Employable Skill Course, Approved by 1,40,000
National Council of Vocational Training
(6) Conducting Private Tuitions 3,00,000
Compute the value of Taxable Supply and the amount of GST Payable. The above receipts
don’t include the GST Amount. Rate of GST is 18%.
[CA-IPCE, Nov 2018]

Calculation of Value of Taxable Supply and GST Payable

Particulars Amount (₹)
Running a boarding school Nil
Fees from prospective employer for campus interview 1,70,000
Education services for obtaining the qualification recognized by Law of 3,10,000
Foreign Country
Renting of furnished flats for temporary stay to different persons Nil
Conducting modular employable skill course, approved by NCVT Nil
Conducting private tuitions 3,00,000
Value of taxable supply 7,80,000
GST Payable [₹ 7,80,000 × 18%] 1,40,400

J P Charitable institution, an entity registered under Section 12AA of Income Tax Act, 1961
and registered in GST, has furnished you the following details with respect to the activities

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undertaken by it during the month of January, 2018. You are required to compute its
Taxable Value of GST from the information given below, assuming the rate of GST is 18%.
Brief reasoning should be part of your answer.
Particulars Amount (₹)
Excluding GST
Membership fees received from members 10,00,000
Amount received for advancement of educational programs relating to 4,00,000
abandoned or orphaned or homeless children
Amount received for renting of commercial property owned by Trust 5,00,000
Amount received for counselling of terminally ill person 3,50,000
Fees charged for Yoga Camp conducted by Trust 2,00,000
Amount received relating to preservation of Forest & Wildlife 6,00,000
[CA-IPCE, Nov 2018]

Calculation of Value of Taxable Supply

Particulars Amount (₹)
Membership fees received from members 10,00,000
Amount received for advancement of educational programs relating to Nil
abandoned or orphaned or homeless children
Amount received for renting of commercial property owned by Trust 5,00,000
Amount received for counselling of terminally ill person Nil
Fees charged for Yoga Camp conducted by Trust Nil
Amount received relating to preservation of Forest & Wildlife Nil
Value of taxable supply 15,00,000

M/s Apna Bank Limited, a Scheduled Commercial Bank has furnished the following details
for the month of August, 2018:
Particulars Amount ₹ in Crores
(Excluding GST)
Extended Housing Loan to its customers 100
Processing fees collected from its customers on sanction of loan 20
Commission collected from its customers on bank guarantee 30
Interest income on credit card issued by the bank 40
Interest received on housing loan extended by the bank 25
Minimum balance charges collected from current account and 01
saving account holder
[CA-Inter, May 2019]

Calculation of Value of Taxable Supply

Particulars Amount in crores (₹)
Extended Housing loan to its customer -
Processing fee collected from its customers on sanction of loan 20
Commission collected from its customers on bank guarantee 30
Interest income on credit card issued by the bank 40
Interest received on housing loan extended by the bank -
Minimum balance charges collected from current account and 01
saving account holder
Value of taxable supply 91

Decide with reason whether the following independent services are exempt under CGST
Act, 2017:
(i) Gokul Residents’ Welfare Association received ₹ 9,000 per month as contribution
from each member for sourcing of goods and services from third persons for
common use of its members.

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 GST Simplified™ Ready Reckoner for Students and Professionals

(ii) Mr. Vikalp, a performing artist, has received ₹ 1,58,000 from performance of
classical dance and ₹ 90,000 from acting in TV Serial during the month of June
2018.
[CA-Inter, May 2019]

(i) Yes, up to ₹ 7,500 per month per member

(ii) No

Explain the services provided by way of tolerating non-performance of a contract and its
chargeability under the provisions of the CGST Act, 2017.
[CA-IPCE, May 2019]

Determine taxable value of supply under the GST law with respect to each of the following
independent services provided by the registered persons:
(1) Fees charged from office staff for in-house personality development course
conducted by M.V. College – ₹ 10,000.
(2) Bus fees collected from students by M.V. College – ₹ 2,500 per month.
(3) Housekeeping service provided by M/s Clean well to Himavarsha Montessori
school, a play school – ₹ 25,000 per month.
(4) Infolink supplied “Tracing Alphabets”, an online educational journal, to students of
UKG class of Sydney Montessori School – ₹ 2,000.
[CA-Final, May 2019]

Determination of taxable value of supply

Particulars Amount (₹)
Fees charged for personality development course Nil
Bus fees collected from students Nil
Housekeeping service Nil
Supply of online educational journal 2,000
Total 2,000

Notfn. No.: 18/2017 – IT(R)

All services imported by a unit/ developer in the SEZ for authorised operations, has been
exempted from the entire IGST leviable thereon u/s 5 of the IGSTA, 2017

Notfn. No.: 5/2018 – CT(R) and IT(R)

The supply of grant of license/ lease to explore or mine petroleum crude and/ or natural
gas has been exempted from the GST leviable on the consideration paid to the CG in the
form of CG’s share of profit petroleum.

Notfn. No.: 6/2018 – IT(R)

CVD 3(7) under the CTA, 1975 has been exempted on the royalties and license fees paid for
import of service of temporary transfer of IPR, on which appropriate custom duties have
been paid.

(2) On the recommendation of the GST Council,

the Government may
in cases involving exceptional circumstances
exempt goods/ services/ both
from the GST leviable on it
by a special order in each case.

(3) The government may clarify the scope or applicability

of the notification/ order issued

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 GST Simplified™ Ready Reckoner for Students and Professionals

by inserting an explanation in such notification/ order

within 1 year from the date of issue
and such explanation shall be treated as to have always been a part of the said
notification/ order.

Circular No. 19/ 19/2017-GST

Clarification on taxability of custom milling of paddy

3. Milling of paddy is not an intermediate production process in relation to cultivation of

plants. It is a process carried out after the process of cultivation is over and paddy
has been harvested. Further, processing of paddy into rice is not usually carried out
by cultivators but by rice millers. Milling of paddy into rice also changes its essential
characteristics. Therefore, milling of paddy into rice cannot be considered as an
intermediate production process in relation to cultivation of plants for food, fibre or
other similar products or agricultural produce.

4. In view of the above, it is clarified that milling of paddy into rice is not eligible for
exemption under S. No 55 of Notification 12/2017 - Central Tax (Rate) dated 28th
June 2017 and corresponding notifications issued under IGST and UTGST Acts.

6. Difficulty if any, in the implementation of the circular should be brought to the notice
of the Board. Hindi version would follow.

Circular No. 16/ 16/2017-GST

Clarifications regarding applicability of GST and availability of ITC in respect of certain
services

S. No. Issue Comment

1. Is GST applicable on warehousing of 7. Processed products such as tea (i.e.
agricultural produce such as tea (i.e. black tea, white tea etc.),
black tea, white tea etc.), processed processed coffee beans or powder,
coffee beans or powder, pulses (de- pulses (de-husked or split), jaggery,
husked or split), jaggery, processed processed spices, processed dry
spices, processed dry fruits, processed fruits, processed cashew nuts etc.
cashew nuts etc? fall outside the definition of
agricultural produce given in
notification No. 11/2017-CT(Rate)
and 12/2017-CT(Rate) and
corresponding notifications issued
under IGST and UTGST Acts and
therefore the exemption from GST
is not available to their loading,
packing, warehousing etc. and that
any clarification issued in the past
to the contrary in the context of
Service Tax or VAT/ Sales Tax is no
more relevant.
2. Is GST leviable on inter-state transfer 2. Credit of GST paid on aircraft
of aircraft engines, parts and engines, parts & accessories will be
accessories for use by their own available for discharging GST on
airlines? inter–state supply of such aircraft
engines, parts & accessories by
way of inter-state stock transfers
between distinct persons as
specified in section 25 of the CGST
Act, notwithstanding that credit of

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input tax charged on consumption

of such goods is not allowed for
supply of service of transport of
passengers by air in economy class
at GST rate of 5%.
3. Is GST leviable on General Insurance Services provided to the Central
policies provided by a State Government, State Government, Union
Government to employees of the State territory under any insurance scheme
Government/ Police personnel, for which total premium is paid by the
employees of Electricity Department or Central Government, State
students of colleges/ private schools Government, Union territory are
etc. exempt from GST under Sl. No. 40 of
(a) where premium is paid by notification No. 12/2017-Central Tax
State Government and (Rate). Further, services provided by
(b) where premium is paid by State Government by way of general
employees, students etc.? insurance (managed by government) to
employees of the State government/
Police personnel, employees of
Electricity Department or students are
exempt vide entry 6 of notification No.
12/2017- CT(R) which exempts
Services by Central Government, State
Government, Union territory or local
authority to individuals.

Circular No. 27/ 01/2018-GST

Clarifications regarding levy of GST on accommodation services, betting and gambling in
casinos, horse racing, admission to cinema, homestays, printing, legal services etc.

Sl. No. Questions/ Clarifications sought Clarifications

1 1. Will GST be charged on actual tariff 1. Declared or published tariff is
or declared tariff for relevant only for determination of
accommodation services? the tax rate slab. GST will be
2. What will be GST rate if cost goes payable on the actual amount
up (more than declared tariff) charged (transaction value).
owing to additional bed. 2. GST rate would be determined
3. Where will the declared tariff be according to declared tariff for the
published? room, and GST at the rate so
4. Same room may have different determined would be levied on the
tariff at different times depending entire amount charged from the
on season or flow of tourists as per customer. For example, if the
dynamic pricing. Which rate to be declared tariff is ₹ 7,000 per unit
used then? per day but the amount charged
5. If tariff changes between booking from the customer on account of
and actual usage, which rate will be extra bed is ₹ 8,000, GST shall be
used? charged at 18% on ₹ 8,000.
6. GST at what rate would be levied if 3. Tariff declared anywhere, say on
an upgrade is provided to the the websites through which
customer at a lower rate? business is being procured or
printed on tariff card or displayed at
the reception will be the declared
tariff. In case different tariff is
declared at different places, highest
of such declared tariffs shall be the
declared tariff for the purpose of
levy of GST.

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4. In case different tariff is declared

for different seasons or periods of
the year, the tariff declared for the
season in which the service of
accommodation is provided shall
apply.
5. Declared tariff at the time of supply
would apply.
6. If declared tariff of the
accommodation provided by way
of upgrade is ₹ 10,000, but amount
charged is ₹ 7,000, then GST
would be levied @ 28% on ₹ 7,000/
-..
2 Vide notification No. 11/2017-CT(R) Relevant part of entry 34 of the said
entry 34, GST on the service of CGST notification reads as under:
admission into casino under Heading “Heading 9996 (Recreational, cultural
9996 has been levied @ 28%. Since the and sporting services) - …
Value of supply rule has not specified (iii) Services by way of admission to
the method of determining taxable entertainment events or access to
amount in casino, Casino Operators amusement facilities including
have been informed to collect 28% exhibition of cinematograph films,
GST on gross amount collected as theme parks, water parks, joy rides,
admission charge or entry fee. The merry-go rounds, go-carting, casinos,
method of levy adopted needs to be race-course, ballet, any sporting event
clarified. such as Indian Premier League and the
like - 14%
(iv)…
(v) Gambling. - 14 %”
As is evident from the notification,
“entry to casinos” and “gambling” are
two different services, and GST is
leviable at 28% on both these services
(14% CGST and 14% SGST) on the value
determined as per section 15 of the
CGST Act. Thus, GST @ 28% would
apply on entry to casinos as well as on
betting/ gambling services being
provided by casinos on the transaction
value of betting, i.e. the total bet value,
in addition to GST levy on any other
services being provided by the casinos
(such as services by way of supply of
food/ drinks etc. at the casinos).
Betting, in pre-GST regime, was
subjected to betting tax on full bet
value.
3 The provision in rate schedule GST would be leviable on the entire bet
notification No. 11/2017-CT(R) does not value i.e. total of face value of any or all
clearly state the tax base to levy GST bets paid into the totalisator or placed
on horse racing. This may be clarified. with licensed book makers, as the case
may be. Illustration: If entire bet value
is ₹ 100, GST leviable will be ₹ 28/ -.
4 1. Whether for the purpose of entries 1. Price/ declared tariff does not
at Sl. Nos. 34(ii) [admission to include taxes.
cinema] and 7(ii)(vi)(viii) 2. Room rent in hospitals is exempt.

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 GST Simplified™ Ready Reckoner for Students and Professionals

[Accommodation in hotels, inns, 3. Any service by way of serving of

etc.], of notification 11/2017-CT (R), food or drinks including by a
price/ declared tariff includes the bakery qualifies under section
tax component or not? 10(1)(b) of CGST Act and hence GST
2. Whether rent on rooms provided rate of composition levy for the
to in-patients is exempted? If liable same would be 5%.
to tax, please mention the entry of
CGST Notification 11/2017-CT(R)
3. What will be the rate of tax for
bakery items supplied where eating
place is attached - manufacturer
for the purpose of composition
levy?
5 Whether homestays providing Notification No. 17/2017-CT(R), has
accommodation through an Electronic been issued making ECOs liable for
Commerce Operator, below threshold payment of GST in case of
limit are exempt from taking accommodation services provided in
registration? hotels, inns guest houses or other
commercial places meant for
residential or lodging purposes
provided by a person having turnover
below ₹ 20 lakhs (₹ 10 lakhs in special
category states) p. a. and thus not
required to take registration under
section 22(1) of CGST Act. Such
persons, even though they provide
services through ECO, are not required
to take registration in view of section
24(ix) of CGST Act, 2017.
6 To clarify whether supply in the The supply of books shall be treated as
situations listed below shall be treated supply of goods as long as the supplier
as a supply of goods or supply of owns the books and has the legal rights
service – to sell those books on his own account.
1. The books are printed/
published/ sold on procuring
copyright from the author or his
legal heir. [e.g. White Tiger
Procures copyright from Ruskin
Bond]
2. The books are printed/
published/ sold against a
specific brand name. [e.g.
Manorama Year Book]
3. The books are printed/
published/ sold on paying
copyright fees to a foreign
publisher for publishing Indian
edition (same language) of
foreign books. [e.g. Penguin
(India) Ltd. pays fees to
Routledge (London)] The books
are printed/ published/ sold on
paying copyright fees to a
foreign publisher for publishing
Indian language edition
(translated). [e.g. Ananda

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 GST Simplified™ Ready Reckoner for Students and Professionals

Publishers Ltd. pays fees to

Penguin (NY)].
7 Whether legal services other than Yes. In case of legal services including
representational services provided by representational services provided by
an individual advocate or a senior an advocate including a senior
advocate to a business entity are liable advocate to a business entity, GST is
to GST under reverse charge required to be paid by the recipient of
mechanism? the service under reverse charge
mechanism, i.e. the business entity.

Circular No. 32/ 06/2018-GST

Clarifications regarding GST in respect of certain services

Sl. No. Issue Clarification

1. Is hostel accommodation provided by Hostel accommodation services do not
Trusts to students covered within the fall within the ambit of charitable
definition of Charitable Activities and activities as defined in para 2(r) of
thus, exempt under Sl. No. 1 of notification No. 12/2017-CT(R).
notification No. 12/2017-CT(R). However, services by a hotel, inn,
guest house, club or campsite, by
whatever name called, for residential
or lodging purposes, having declared
tariff of a unit of accommodation
below ₹ 1,000 per day or equivalent
are exempt. Thus, accommodation
service in hostels including by Trusts
having declared tariff below one
thousand rupees per day is exempt. [Sl.
No. 14 of notification No. 12/2017-CT(R)
refers]
2. Is GST leviable on the fee/ amount Services by any court or Tribunal
charged in the following situations/ established under any law for the time
cases – being in force is neither a supply of
(1) A customer pays fees while goods nor services. Consumer
registering complaints to Disputes Redressal Commissions
Consumer Disputes Redressal (National/ State/ District) may not be
Commission office and its tribunals literally as they may not have
subordinate offices. These fees been set up directly under Article 323B
are credited into State of the Constitution. However, they are
Customer Welfare Fund’s bank clothed with the characteristics of a
account. tribunal on account of the following –
(2) Consumer Disputes Redressal (1) Statement of objects and
Commission office and its reasons as mentioned in the
subordinate offices charge Consumer Protection Bill state
penalty in cash when it is that one of its objects is to
required. provide speedy and simple
(3) When a person files an appeal redressal to consumer
to Consumers Disputes disputes, for which a quasi-
Redressal Commission against judicial machinery is sought to
order of District Forum, amount be set up at District, State and
equal to 50% of total amount Central levels.
imposed by the District Forum (2) The President of the District/
or ₹ 25,000/ - whichever is State/ National Disputes
less, is required to be paid. Redressal Commissions is a
person who has been or is
qualified to be a District Judge,

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High Court Judge and Supreme

Court Judge respectively.
(3) These Commissions have been
vested with the powers of a
civil court under CPC for issuing
summons, enforcing
attendance of defendants/
witnesses, reception of
evidence, discovery/
production of documents,
examination of witnesses, etc.
(4) Every proceeding in these
Commissions is deemed to be
judicial proceedings as per
sections 193/ 228 of IPC.
(5) The Commissions have been
deemed to be a civil court
under CrPC.
(6) Appeals against District
Commissions lie to State
Commission while appeals
against the State Commissions
lie to the National Commission.
Appeals against National
Commission lie to the Supreme
Court. In view of the aforesaid,
it is hereby clarified that fee
paid by litigants in the
Consumer Disputes Redressal
Commissions are not leviable
to GST. Any penalty imposed
by or amount paid to these
Commissions will also not
attract GST.
3. Whether the services of elephant or Elephant/ camel joy rides cannot be
camel ride, rickshaw ride and boat ride classified as transportation services.
should be classified under heading These services will attract GST @ 18%
9964 (as passenger transport service) with threshold exemption being
in which case, the rate of tax on such available to small service providers. [Sl.
services will be 18% or under the No 34(iii) of notification No. 11/2017-
heading 9996 (recreational, cultural CT(Rate) dated 28.06.2017 as amended
and sporting services) treating them as by notification No. 1/2018-CT(Rate)
joy rides, leviable to GST@ 28%? dated 25.01.2018 refers]
4. What is the GST rate applicable on Leasing or rental services, with or
rental services of self-propelled access without operator, for any purpose are
equipment (Boom Scissors/ taxed at the same rate of GST as
Telehandlers)? The equipment is applicable on supply of like goods
imported at GST rate of 28% and involving transfer of title in goods.
leased further in India where operator Thus, the GST rate for the rental
is supplied by the leasing company, services in the given case shall be 28%,
diesel for working of machine is provided the said goods attract GST of
supplied by customer and 28%. IGST paid at the time of import of
transportation cost including loading these goods would be available for
and unloading is also paid by the discharging IGST on rental services.
customer. Thus, only the value added gets taxed.
[Sl. No 17(vii) of notification No. 11/2017

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 GST Simplified™ Ready Reckoner for Students and Professionals

- CT(Rate) dated 28.6.17 as amended

refers].
5. Is GST leviable in following cases: Health care services provided by a
(1) Hospitals hire senior doctors/ clinical establishment, an authorised
consultants/ technicians medical practitioner or para-medics
independently, without any are exempt. [Sl. No. 74 of notification
contract of such persons with No. 12/2017-CT(R) refers].
the patient; and pay them (1) Services provided by senior
consultancy charges, without doctors/ consultants/
there being any employer- technicians hired by the
employee relationship. Will hospitals, whether employees
such consultancy charges be or not, are healthcare services
exempt from GST? Will which are exempt.
revenue take a stand that they (2) Healthcare services have been
are providing services to defined to mean any service by
hospitals and not to patients way of diagnosis or treatment
and hence must pay GST? or care for illness, injury,
(2) Retention money: Hospitals deformity, abnormality or
charge the patients, say, ₹ pregnancy in any recognised
10,000/ - and pay to the system of medicines in India
consultants/ technicians only ₹ [para 2(zg) of notification No.
7,500/ - and keep the balance 12/2017-CT(R)]. Therefore,
for providing ancillary services hospitals also provide
which include nursing care, healthcare services. The entire
infrastructure facilities, amount charged by them from
paramedic care, emergency the patients including the
services, checking of retention money and the fee/
temperature, weight, blood payments made to the doctors
pressure etc. Will GST be etc., is towards the healthcare
applicable on such money services provided by the
retained by the hospitals? hospitals to the patients and is
(3) Food supplied to the patients: exempt.
Health care services provided (3) Food supplied to the in-
by the clinical establishments patients as advised by the
will include food supplied to doctor/ nutritionists is a part of
the patients; but such food may composite supply of healthcare
be prepared by the canteens and not separately taxable.
run by the hospitals or may be Other supplies of food by a
outsourced by the Hospitals hospital to patients (not
from outdoor caterers. When admitted) or their attendants or
outsourced, there should be no visitors are taxable.
ambiguity that the suppliers
shall charge tax as applicable
and hospital will get no ITC. If
hospitals have their own
canteens and prepare their
own food; then no ITC will be
available on inputs including
capital goods and in turn if they
supply food to the doctors and
their staff; such supplies, even
when not charged, may be
subjected to GST.
6. Appropriate clarification may be issued As per the Production Sharing
regarding taxability of Cost Petroleum. Contract(PSC) between the
Government and the oil exploration &

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production contractors, in case of a

commercial discovery of petroleum,
the contractors are entitled to recover
from the sale proceeds all expenses
incurred in exploration, development,
production and payment of royalty.
Portion of the value of petroleum
which the contractor is entitled to take
in a year for recovery of these contract
costs is called “Cost Petroleum”.
The relationship of the oil exploration
and production contractors with the
Government is not that of partners but
that of licensor/ lessor and licensee/
lessee in terms of the Petroleum and
Natural Gas Rules, 1959. Having
acquired the right to explore, exploit
and sell petroleum in lieu of royalty
and a share in profit petroleum,
contractors carry out the exploration
and production of petroleum for
themselves and not as a service to the
Government. Para 8.1 of the Model
Production Sharing Contract (MPSC)
states that subject to the provisions of
the PSC, the Contractor shall have
exclusive right to carry out Petroleum
Operations to recover costs and
expenses as provided in this Contract.
The oil exploration and production
contractors conduct all petroleum
operations at their sole risk, cost and
expense. Hence, cost petroleum is not
a consideration for service to GOI and
thus not taxable per se. However, cost
petroleum may be an indication of the
value of mining or exploration services
provided by operating member to the
joint venture, in a situation where the
operating member is found to be
supplying service to the oil exploration
and production joint venture.

Circular No. 44/ 18/2018-CGST

Issue related to taxability of ‘tenancy rights’ under GST

5. The activity of transfer of ‘tenancy rights’ is squarely covered under the scope of
supply and taxable per-se. Transfer of tenancy rights to a new tenant against
consideration in the form of tenancy premium is taxable. However, renting of
residential dwelling for use as a residence is exempt [Sl. No. 12 of notification No.
12/2017-Central Tax (Rate)]. Hence, grant of tenancy rights in a residential dwelling
for use as residence dwelling against tenancy premium or periodic rent or both is
exempt. As regards services provided by outgoing tenant by way of surrendering the
tenancy rights against consideration in the form of a portion of tenancy premium is
liable to GST.

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Circular No. 47/ 21/2018-GST

Clarifications of certain issues under GST

Sl. No. Issue Clarification

1 Whether moulds and dies owned by 1.1 Moulds and dies owned by the
Original Equipment Manufacturers original equipment manufacturer
(OEM) that are sent free of cost (FOC) (OEM) which are provided to a
to a component manufacturer is component manufacturer (the two
leviable to tax and whether OEMs are not being related persons or
required to reverse input tax credit in distinct persons) on FOC basis does
this case? not constitute a supply as there is
no consideration involved. Further,
since the moulds and dies are
provided on FOC basis by the OEM
to the component manufacturer in
the course or furtherance of his
business, there is no requirement
for reversal of input tax credit
availed on such moulds and dies by
the OEM.
1.2 It is further clarified that while
calculating the value of the supply
made by the component
manufacturer, the value of moulds
and dies provided by the OEM to
the component manufacturer on
FOC basis shall not be added to the
value of such supply because the
cost of moulds/ dies was not to be
incurred by the component
manufacturer and thus, does not
merit inclusion in the value of
supply in terms of section 15(2)(b)
of the CGST Act, 2017.
1.3 However, if the contract between
OEM and component manufacturer
was for supply of components
made by using the moulds/ dies
belonging to the component
manufacturer, but the same have
been supplied by the OEM to the
component manufacturer on FOC
basis, the amortised cost of such
moulds/ dies shall be added to the
value of the components. In such
cases, the OEM will be required to
reverse the credit availed on such
moulds/ dies, as the same will not
be considered to be provided by
OEM to the component
manufacturer in the course or
furtherance of the former’s
business.
2 How is servicing of cars involving both 2.1 The taxability of supply would have
supply of goods (spare parts) and to be determined on a case to case
services (labour), where the value of basis looking at the facts and
circumstances of each case.

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goods and services are shown 2.2 Where a supply involves supply of
separately, to be treated under GST? both goods and services and the
value of such goods and services
supplied are shown separately, the
goods and services would be liable
to tax at the rates as applicable to
such goods and services separately.
3 In case of auction of tea, coffee, rubber 3.1 The requirement of maintaining the
etc., whether the books of accounts books of accounts at the principal
are required to be maintained at every place of business and additional
place of business by the principal and place(s) of business is clarified as
the auctioneer, and whether they are below:
eligible to avail input tax credit? (a) For the purpose of auction of
tea, coffee, rubber, etc, the
principal and the auctioneer
may declare the warehouses,
where such goods are stored,
as their additional place of
business. The buyer is also
required to disclose such
warehouse as his additional
place of business if he wants
to store the goods purchased
through auction in such
warehouses. For the purpose
of supply of tea through a
private treaty, the principal
and an auctioneer may also
comply with the said
provisions.
(b) The principal and the
auctioneer for the purpose of
auction of tea, coffee, rubber
etc., or the principal and the
auctioneer for the purpose of
supply of tea through a
private treaty, are required to
maintain the books of
accounts relating to each and
every place of business in
that place itself in terms of
the first proviso to sub-
section (1) of section 35 of the
CGST Act. However, in case
difficulties are faced in
maintaining the books of
accounts, it is clarified that
they may maintain the books
of accounts relating to the
additional place(s) of
business at their principal
place of business instead of
such additional place(s).
(c) The principal and the
auctioneer for the purpose of
auction of tea, coffee, rubber
etc., or the principal and the

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auctioneer for the purpose of

supply of tea through a
private treaty, shall intimate
their jurisdictional officer in
writing about the
maintenance of books of
accounts relating to the
additional place(s) of
business at their principal
place of business.
3.2 It is further clarified that the
principal and the auctioneer for the
purpose of auction of tea, coffee,
rubber etc., or the principal and the
auctioneer for the purpose of
supply of tea through a private
treaty, shall be eligible to avail input
tax credit subject to the fulfilment
of other provisions of the CGST Act
read with the rules made
thereunder.
4 In case of transportation of goods by As per proviso to rule 138(2A) of the
railways, whether goods can be Central Goods and Services Tax Rules,
delivered even if the e-way bill is not 2017 (CGST Rules for short), the
produced at the time of delivery? railways shall not deliver the goods
unless the e-way bill is produced at the
time of delivery.
5 Whether e-way bill is required in the (i) It may be noted that e-way bill
following cases- generation is not dependent on
(i) Where goods transit through whether a supply is interState
another State while moving or not, but on whether the
from one area in a State to movement of goods is inter-
another area in the same State. State or not. Therefore, if the
(ii) Where goods move from a goods transit through a second
DTA unit to a SEZ unit or vice State while moving from one
versa located in the same State. place in a State to another
place in the same State, an e-
way bill is required to be
generated.
(ii) Where goods move from a
DTA unit to a SEZ unit or vice
versa located in the same State,
there is no requirement to
generate an eway bill, if the
same has been exempted
under rule 138(14)(d) of the
CGST Rules.

Circular No. 55/ 29/2018-GST

Taxability of services provided by Industrial Training Institutes (ITI)

2. Private ITIs qualify as an educational institution as defined under para 2(y) of

notification no. 12/2017 – CT(R) if the education provided by these ITIs is approved as
vocational educational course. The approved vocational educational course has been
defined in para 2(h) of notification ibid to mean a course run by an ITI or an Industrial
Training Centre affiliated to NCVT or SCVT offering courses in designated trade

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notified under the Apprenticeship Act, 1961; or a Modular employable skill course,
approved by NCVT, run by a person registered with DG Training in Ministry of Skill
Development. Therefore, services provided by a private ITI in respect of designated
trades notified under Apprenticeship Act, 1961 are exempt from GST under Sr. No. 66
of notification No. 12/2017 – CT(R). As corollary, services provided by a private ITI in
respect of other than designated trades would be liable to pay GST and are not
exempt.

3. In case of designated trades, services provided by a private ITI by way of conduct of

entrance examination against consideration in the form of entrance fee will also be
exempt from GST [Entry (aa) under Sr. No. 66 of notification No. 12/2017 – CT(R)
refers]. Further, in respect of such designated trades, services provided to an
educational institution, by way of, services relating to admission to or conduct of
examination by a private ITI will also be exempt [Entry (b(iv)) under Sr. No. 66 of
notification No. 12/2017 - CT(R) refers]. It is further clarified that in case of other than
designated trades in private ITIs, GST shall be payable on the service of conduct of
examination against consideration in the form of entrance fee and also on the
services relating to admission to or conduct of examination by such institutions, as
these services are not covered by the exemption ibid.

4. As far as Government ITIs are concerned, services provided by a Government ITI to

individual trainees/ students, is exempt under Sl. No. 6 of 12/2017 – CT(R) as these
are in the nature of services provided by the Central or State Government to
individuals. Such exemption in relation to services provided by Government ITI
would cover both – vocational training and examinations conducted by these
Government ITIs.

Circular No. 66/ 40/2018-GST

GST on residential programmes or camps meant for advancement of religion, spirituality or
yoga by religious and charitable trusts

2.1 The services provided by entity registered under Section 12AA of the Income Tax Act,
1961 by way of advancement of religion, spirituality or yoga are exempt. Fee or
consideration charged in any other form from the participants for participating in a
religious, Yoga or meditation programme or camp meant for advancement of
religion, spirituality or yoga shall be exempt. Residential programmes or camps
where the fee charged includes cost of lodging and boarding shall also be exempt as
long as the primary and predominant activity, objective and purpose of such
residential programmes or camps is advancement of religion, spirituality or yoga.
However, if charitable or religious trusts merely or primarily provide accommodation
or serve food and drinks against consideration in any form including donation, such
activities will be taxable. Similarly, activities such as holding of fitness camps or
classes such as those in aerobics, dance, music etc. will be taxable.

Circular No. 82/ 01/2019-GST

Applicability of GST on various programmes conducted by the Indian Institutes of
Management (IIMs)

I am directed to invite your attention to the Indian Institutes of Management Act,

2018 which came into force on 31st January, 2018. According to provisions of the IIM
Act, all the IIMs listed in the schedule to the IIM Act are “institutions of national
importance”. They are empowered to (i) grant degrees, diplomas, and other
academic distinctions or titles, (ii) specify the criteria and process for admission to
courses or programmes of study, and (iii) specify the academic content of
programmes. Therefore, with effect from 31st January, 2018, all the IIMs are
“educational institutions” as defined under notification No. 12/2017- Central Tax

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(Rate) dated 28.06.2017 as they provide education as a part of a curriculum for

obtaining a qualification recognised by law for the time being in force.

2. At present, Indian Institutes of Managements are providing various long duration

programs (one year or more) for which they award diploma/ degree certificate duly
recommended by Board of Governors as per the power vested in them under the IIM
Act, 2017. Therefore, it is clarified that services provided by Indian Institutes of
Managements to their students- in all such long duration programs (one year or
more) are exempt from levy of GST. As per information received from IIM
Ahmedabad, annexure 1 to this circular provides a sample list of programmes which
are of long duration (one year or more), recognized by law and are exempt from GST.

3. For the period from 1st July, 2017 to 30th January, 2018, IIMs were not covered by the
definition of educational institutions as given in notification No. 12/2017 Central Tax
(Rate) dated 28.06.2017. Thus, they were not entitled to exemption under Sl. No. 66
of the said notification. However, there was specific exemption to following three
programs of IIMs under Sl. No. 67 of notification No. 12/2017- Central Tax (Rate): -
(i) two-year full time Post Graduate Programmes in Management for the Post
Graduate Diploma in Management, to which admissions are made on the
basis of Common Admission Test (CAT) conducted by the Indian Institute of
Management,
(ii) fellow programme in Management,
(iii) five years integrated programme in Management.
Therefore, for the period from 1st July, 2017 to 30th January, 2018, GST exemption
would be available only to three long duration programs specified above.

4. It is further, clarified that with effect from 31st January, 2018, all IIMs have become
eligible for exemption benefit under Sl. No. 66 of notification No. 12/2017- Central Tax
(Rate) dated 28.06.2017. As such, specific exemption granted to IIMs vide Sl. No. 67
has become redundant. The same has been deleted vide notification No. 28/2018-
Central Tax (Rate) dated, 31st December, 2018 w.e.f. 1st January 2019.

5. For the period from 31st January, 2018 to 31st December, 2018, two exemptions, i.e.
under Sl. No. 66 and under Sl. No. 67 of notification No. 12/2017- Central Tax (Rate),
dated 28.06.2017 are available to the IIMs. The legal position in such situation has
been clarified by Hon’ble Supreme Court in many cases that if there are two or more
exemption notifications available to an assessee, the assessee can claim the one that
is more beneficial to him. Therefore, from 31st January, 2018 to 31st December, 2018,
IIMs can avail exemption either under Sl. No 66 or Sl. No. 67 of the said notification
for the eligible programmes. In this regard following case laws may be referred-
(i) H.C.L. Limited vs Collector of Customs [2001 (130) ELT 405 (SC)]
(ii) Collector of Central Excise, Baroda vs Indian Petro Chemicals [1997 (92) ELT
13 (SC)]
(iii) Share Medical Care vs Union of India reported at 2007 (209) ELT 321 (SC)
(iv) CCE vs Maruthi Foam (P) Ltd. [1996 (85) RLT 157 (Tri.) as affirmed by Hon’ble
Supreme Court vide 2004 (164) ELT 394 (SC)

6. Indian Institutes of Managements also provide various short duration/ short term
programs for which they award participation certificate to the executives/
professionals as they are considered as “participants” of the said programmes. These
participation certificates are not any qualification recognized by law. Such
participants are also not considered as students of Indian Institutes of Management.
Services provided by IIMs as an educational institution to such participants is not
exempt from GST. Such short duration executive programs attract standard rate of
GST @ 18% (CGST 9% + SGST 9%). As per information received from IIM Ahmedabad,
annexure 2 to this circular provides a sample list of programmes which are short

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duration executive development programs, available for participants other than

students and are not exempt from GST.

7. Following summary table may be referred to while determining eligibility of various

programs conducted by Indian Institutes of Managements for exemption from GST.
Sl. No. Periods Programmes offered by Indian Whether exempt
Institutes of Management from GST
1 st
1 July, 2017 i. two-year full time Post Exempt from GST
to 30th Graduate Programmes in
January, 2018 Management for the Post
Graduate Diploma in
Management, to which
admissions are made on the
basis of Common Admission
Test (CAT) conducted by the
Indian Institute of
Management,
ii. fellow programme in
Management,
iii. five years integrated
programme in Management.
i. One- year Post Graduate Not exempt from
Programs for Executives, GST
ii. Any programs other than those
mentioned at Sl. No. 67 of
notification No. 12/2017-
Central Tax (Rate), dated
28.06.2017.
iii. All short duration executive
development programs or
need based specially designed
programs (less than one year)
2 31st January, All long duration programs (one Exempt from GST
2018 onwards year or more) conferring degree/
diploma as recommended by Board
of Governors as per the power
vested in them under the IIM Act,
2017 including one- year Post
Graduate Programs for Executives.
All short duration executive Not exempt from
development programs or need GST
based specially designed programs
(less than one year) which are not a
qualification recognized by law.

8. This clarification applies, mutatis mutandis, to corresponding entries of respective

IGST, UTGST, SGST exemption notifications.

Circular No. 85/ 04/2019-GST

Clarification on GST rate applicable on supply of food and beverage services by educational
institution

Representations have been received seeking clarification as to the rate of GST

applicable on supply of food and beverages services by educational institution to its
students. It has been stated that the words “school, college” appearing in Explanation
1 to Entry 7 (i) of Notification No. 11/2017-Central Tax (Rate) dated 28.06.2017 give rise

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to doubt whether supply of food and drinks by an educational institution to its

students is eligible for exemption under Notification No. 12/2017- Central Tax (Rate)
dated 28.06.2017 Sl. No 66, which exempts services provided by an educational
institution to its students, faculty and staff.

2. The matter has been examined. Notification No. 11/2017-Central Tax (Rate) dated
28.06.2017, Sl. No. 7(i) prescribes GST rate of 5% on supply of food and beverages
services. Explanation 1 to the said entry states that such supply can take place at
canteen, mess, cafeteria of an institution such as school, college, hospitals etc. On
the other hand, Notification No. 12/2017-Central Tax (Rate), Sl. No. 66 (a) exempts
services provided by an educational institution to its students, faculty and staff.
There is no conflict between the two entries. Entries in Notification No. 11/2017-
Central Tax (Rate) prescribing GST rates on service have to be read together with
entries in exemption Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017. A
supply which is specifically covered by any entry of Notification No. 12/2017-Central
Tax (Rate) dated 28-06-2017 is exempt from GST notwithstanding the fact that GST
rate has been prescribed for the same under Notification No. 11/2017-Central Tax
(Rate) dated 28.06.2017.
2.1 Supply of all services by an educational institution to its students, faculty and
staff is exempt under Notification No. 12/2017-Central Tax (Rate) dated
28.06.2017, Sl. No. 66. Such services include supply of food and beverages
by an educational institution to its students, faculty and staff. As stated in
explanation 3 (ii) to Notification No. 12/2017-Central Tax (Rate) dated
28.06.2017 Chapter, Section, Heading, Group or Service Codes mentioned in
column (2) of the table in Notification No. 12/2017-Central Tax (Rate) dated
28.06.2017 are only indicative. A supply is eligible for exemption under an
entry of the said notification where the description given in column (3) of the
table leaves no room for any doubt. Accordingly, it is clarified that supply of
food and beverages by an educational institution to its students, faculty and
staff, where such supply is made by the educational institution itself, is
exempt under Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017,
vide Sl. No. 66 w.e.f. 01-07-2017 itself. However, such supply of food and
beverages by any person other than the educational institutions based on a
contractual arrangement with such institution is leviable to GST@ 5%.

3. In order to remove any doubts on the issue, Explanation 1 to Entry 7(i) of Notification
No. 11/2017-Central Tax (Rate) dated 28.06.2017 has been amended vide Notification
No. 27/2018-Central Tax (Rate) dated 31.12.2018 to omit from it the words “school,
college”. Further, heading 9963 has been added in Column (2) against entry at Sl. No.
66 of Notification No. 12/2017-Central Tax (Rate) dated 28.06.2017, vide Notification
No. 28/2018-Central Tax (Rate) dated 31.12.2018.

Circular No. 86/ 05/2019-GST

GST on Services of Business Facilitator (BF) or a Business Correspondent (BC) to Banking
Company

Representations have been received seeking clarification on following two issues:

(i) What is the value to be adopted for the purpose of computing GST on
services provided by BF/BC to a banking company?
(ii) What is the scope of services provided by BF/BC to a banking company with
respect to accounts in its rural area branch that are eligible for existing GST
exemption?

2. The matter has been examined. The issues involved are clarified as follows:
2.1 Issue 1: Clarification on value of services by BF/BC to a banking company: As
per RBI’s Circular No. DBOD.No.BL.BC. 58/22.01.001/2005-2006 dated
25.01.2006 and subsequent instructions on the issue (referred to as

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‘guidelines’ hereinafter), banks may pay reasonable commission/fee to the

BC, the rate and quantum of which may be reviewed periodically. The
agreement of banks with the BC specifically prohibits them from directly
charging any fee to the customers for services rendered by them on behalf of
the bank. On the other hand, banks (and not BCs) are permitted to collect
reasonable service charges from the customers for such service in a
transparent manner. The arrangements of banks with the Business
Correspondents specify the requirement that the transactions are accounted
for and reflected in the bank's books by end of the day or the next working
day, and all agreements/ contracts with the customer shall clearly specify
that the bank is responsible to the customer for acts of omission and
commission of the Business Facilitator/Correspondent.
2.2 Hence, banking company is the service provider in the business facilitator
model or the business correspondent model operated by a banking company
as per RBI guidelines. The banking company is liable to pay GST on the entire
value of service charge or fee charged to customers whether or not received
via business facilitator or the business correspondent.

3. Issue 2: Clarification on the scope of services by BF/BC to a banking company with

respect to accounts in rural areas: It has also been requested that the scope of
exemption to services provided in relation to “accounts in its rural area branch” vide
Sl. No. 39 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 be
clarified. This clarification has been requested as the exemption from tax on services
provided by BF/BC is dependent on the meaning of the expression “accounts in its
rural area branch”.
3.1 It is clarified that for the purpose of availing exemption from GST under Sl.
No. 39 of said notification, the conditions flowing from the language of the
notification should be satisfied. These conditions are that the services
provided by a BF/BC to a banking company in their respective individual
capacities should fall under the Heading 9971 and that such services should
be with respect to accounts in a branch located in the rural area of the
banking company. The procedure for classification of branch of a bank as
located in rural area and the services which can be provided by BF/BC, is
governed by the RBI guidelines. Therefore, classification adopted by the bank
in terms of RBI guidelines in this regard should be accepted.

Circular No. 101/20/2019-GST

GST exemption on the upfront amount payable in instalments for long term lease of plots

Representations have been received by the Board seeking clarification regarding

admissibility of GST exemption on the upfront amount which is determined upfront
but is paid or payable in instalments for long term (thirty years, or more) lease of
industrial plots or plots for development of financial infrastructure under Notification
12/2017 – Central Tax (R) S. No.41 dated 28.06.2017.

2. The matter has been examined. The entry at S. No.41 of Notification 12/2017 – Central
Tax (R) dated 28.06.2017 reads as under:

Sl. Chapter, Description of Services Rate Condition

No. Section, (per
Heading, cent)
Group
or
Service
Code
(Tariff)

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(1) (2) (3) (4) (5)

41 Heading “Upfront amount (called as premium, salami, cost, NIL NIL
9972 price, development charges or by any other name)
payable in respect of service by way of granting of
long term lease (of thirty years, or more) of
industrial plots or plots for development of
infrastructure for financial business, provided by the
State Government Industrial Development
Corporations or Undertakings or by any other entity
having 50 per cent. or more ownership of Central
Government, State Government, Union territory to
the industrial units or the developers in any
industrial or financial business area.”

3. It is hereby clarified that GST exemption on the upfront amount (called as premium,
salami, cost, price, development charges or by any other name) payable for long
term lease (of thirty years, or more) of industrial plots or plots for development of
infrastructure for financial business under Entry No. 41 of Exemption Notification
12/2017 – Central Tax (R) dated 28.06.2017 is admissible irrespective of whether such
upfront amount is payable or paid in one or more instalments, provided the amount
is determined upfront.

Circular No. 109/28/2019-GST

Issues related to GST on monthly subscription/ contribution charged by a Residential
Welfare Association from its members

A number of issues have been raised regarding the GST payable on the amount
charged by a Residential Welfare Association for providing services and goods for
the common use of its members in a housing society or a residential complex. The
same have been examined and are being clarified below.

Sl. Issue Clarification

No.
1. Are the maintenance charges paid by Supply of service by RWA
residents to the Resident Welfare (unincorporated body or a non- profit
Association (RWA) in a housing society entity registered under any law) to its
exempt from GST and if yes, is there an own members by way of
upper limit on the amount of such reimbursement of charges or share of
charges for the exemption to be contribution up to an amount of ₹ 7500
available? per month per member for providing
services and goods for the common use
of its members in a housing society or a
residential complex are exempt from
GST.
Prior to 25th January 2018, the
exemption was available if the charges
or share of contribution did not exceed
₹ 5000/- per month per member. The
limit was increased to ₹ 7500/- per
month per member with effect from
25th January 2018. [Refer clause (c) of
Sl. No. 77 to the notification No.
12/2017- Central Tax (Rate) dated
28.06.2017 as amended vide
notification No. 2/2018- Central Tax
(Rate), dated 25.01.2018]

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2. A RWA has aggregate turnover of ₹ 20 No. If aggregate turnover of an RWA

lakh or less in a financial year. Is it does not exceed ₹ 20 Lakh in a financial
required to take registration and pay year, it shall not be required to take
GST on maintenance charges if the registration and pay GST even if the
amount of such charges is more than ₹ amount of maintenance charges
7500/- per month per member? exceeds ₹ 7500/- per month per
member.
RWA shall be required to pay GST on
monthly subscription/ contribution
charged from its members, only if such
subscription is more than ₹ 7500/- per
month per member and the annual
aggregate turnover of RWA by way of
supplying of services and goods is also
₹ 20 lakhs or more.
Annual Monthly Whether
turnover maintenance exempt?
of RWA charge
More More than ₹ No
than ₹ 20 7500/-
lakhs ₹ 7500/- or Yes
less
₹ 20 More than ₹ Yes
lakhs or 7500/-
less ₹ 7500/- or Yes
less
3. Is the RWA entitled to take input tax RWAs are entitled to take ITC of GST
credit of GST paid on input and services paid by them on capital goods
used by it for making supplies to its (generators, water pumps, lawn
members and use such ITC for furniture etc.), goods (taps, pipes, other
discharge of GST liability on such sanitary/hardware fillings etc.) and
supplies where the amount charged for input services such as repair and
such supplies is more than ₹ 7,500/- maintenance services.
per month per member?
4. Where a person owns two or more flats As per general business sense, a person
in the housing society or residential who owns two or more residential
complex, whether the ceiling of ₹ apartments in a housing society or a
7500/- per month per member on the residential complex shall normally be a
maintenance for the exemption to be member of the RWA for each
available shall be applied per residential residential apartment owned by him
apartment or per person? separately. The ceiling of ₹ 7500/- per
month per member shall be applied
separately for each residential
apartment owned by him.
For example, if a person owns two
residential apartments in a residential
complex and pays ₹ 15000/- per
month as maintenance charges towards
maintenance of each apartment to the
RWA (₹ 7500/- per month in respect of
each residential apartment), the
exemption from GST shall be available
to each apartment.

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5. How should the RWA calculate GST The exemption from GST on
payable where the maintenance maintenance charges charged by a
charges exceed ₹ 7500/- per month RWA from residents is available only if
per member? Is the GST payable only such charges do not exceed ₹ 7500/-
on the amount exceeding ₹ 7500/- or per month per member. In case the
on the entire amount of maintenance charges exceed ₹ 7500/- per month
charges? per member, the entire amount is
taxable. For example, if the
maintenance charges are ₹ 9000/- per
month per member, GST @18% shall be
payable on the entire amount of ₹
9000/- and not on [₹ 9000 - ₹ 7500] =
₹ 1500/- .

• Aggregate turnover [Sec. 2(6) of CGSTA]: 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 Permanent Account Number, to be
computed on all India basis but excludes central tax, State tax, Union territory tax,
integrated tax and cess.
• Continuous supply of services [Sec. 2(33) of CGSTA]: means a supply of services
which is provided, or agreed to be provided, continuously or on recurrent basis,
under a contract, for a period exceeding three months with periodic payment
obligations and includes supply of such services as the Government may, subject to
such conditions, as it may, by notification, specify.
• Exempt supply [Sec. 2(47) of CGSTA]: means supply of any goods or services or both
which attracts nil rate of tax or which may be wholly exempt from tax under section
11, or under section 6 of the Integrated Goods and Services Tax Act, and includes
non-taxable supply.
• Export of goods [Sec. 2(5) of IGSTA]: with its grammatical variations and cognate
expressions, means taking goods out of India to a place outside India.
• Export of services [Sec. 2(6) of IGSTA]: means the supply of any service when–
(i) the supplier of service is located in India;
(ii) the recipient of service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of service in
convertible foreign exchange or in Indian rupees wherever permitted by the
Reserve Bank of India; and
(v) the supplier of service and the recipient of service are not merely
establishments of a distinct person in accordance with Explanation 1 in
section 8
• Family [Sec. 2(49) of CGSTA]: means–
(i) the spouse and children of the person, and
(ii) the parents, grand-parents, brothers and sisters of the person if they are
wholly or mainly dependent on the said person.
• Job work [Sec. 2(68) of CGSTA]: means any treatment or process undertaken by a
person on goods belonging to another registered person and the expression “job
worker” shall be construed accordingly.
• Non-taxable supply [Sec. 2(78)]: means a supply of goods or services or both which
is not leviable to tax under this Act or under the Integrated Goods and Services Tax
Act.

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Rajesh Dynamics, having its head office in Chennai, carries on the following activities with
respective turnovers in a Financial Year:
Particulars ₹
Supply of petrol at Chennai 18,00,000
Value of inward supplies on which tax is payable on reverse charge 9,00,000
basis
Supply of transformer oil at Chennai 2,00,000
Value of branch transfer from Chennai to Bengaluru without payment of 1,50,000
consideration
Value of taxable supplies at Manipur branch 11,50,000
It argues that it does not have taxable turnover crossing threshold limit of ₹ 20,00,000
either at Chennai or Bengaluru and including turnover at Manipur branch. It believes that
the determination of aggregate turnover is not required for the purpose of obtaining
registration but it is required for determining composition levy. Decide based on the above
facts:
(i) The aggregate turnover of Rajesh Dynamics
(ii) All conditions that fulfil the requirements for registration under CGST Act, 2017 in
the given circumstances.
[CA-Final, May 2018]

Calculation of aggregate turnover

Particulars Amount (₹)
Supply of petrol at Chennai 18,00,000
Value of inward supplies on which tax is payable on reverse charge basis -
Supply of transformer oil at Chennai 2,00,000
Value of branch transfer from Chennai to Bengaluru without payment of
consideration 1,50,000
Value of taxable supplies at Manipur branch 11,50,000
Aggregate turnover 33,00,000

With the help of the following information in the case of M/s Jayant Enterprises, Jaipur
(Rajasthan) for the year 2017-18, determine the aggregate turnover for the purpose of
registration under CGST Act, 2017:
Sl. No. Particulars Amount (₹)
i. Sale of diesel on which Sale Tax (VAT) is levied by Rajasthan 1,00,000
Government
ii. Supply of goods, after completion of job work, from the place of 3,00,000
Jayant Enterprises directly by principal
iii. Export supply to England (U.K.) 5,00,000
iv. Supply to its own additional place of business in Rajasthan 5,00,000
v. Outward supply on which GST is to be paid by recipient under 1,00,000
reverse charge
All the above amounts are excluding GST.
You are required to provide reasons for treatment of various items given above.
[CA-Final, May 2018]

Calculation of aggregate turnover

Particulars Amount (₹)
Sale of diesel 1,00,000
Supply of goods after completion of job work -
Export supply to England 5,00,000
Supply to its own additional place of business 5,00,000
Outward supply on which GST is paid under reverse charge 1,00,000
Aggregate turnover 12,00,000

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List the inclusions and exclusions for computing the “Aggregate Turnover” under CGST Act,
2017.
[CA-Inter, May 2018]

A service would be called as “continuous supply of service”, if the service under s contract
is provided continuously or on recurrent basis exceeding:
(E) one year
(F) 6 months
(G) 3 months
(H) 1 month
[CS-Exec, Dec 2017]

(E) 3 months

For the purpose of deciding ‘aggregate turnover’ in order to determine the GST payable
under composition scheme, which of the following is to be excluded?
(A) Exemption supply
(B) Export of goods
(C) Inter-state branch transfer
(D) CGST
[CS-Exec, Dec 2017]

(D) CGST

Mr. Bala has made supply (within State) of taxable goods to the tune of ₹ 17 lakhs, export
supplies of ₹ 3 lakhs and intra-state supply of exempt services of ₹ 4 lakhs. His aggregate
turnover as per Section 2(6) of the CGST/ SGST Act, 2017 is:
(A) ₹ 17 lakhs
(B) ₹ 20 lakhs
(C) ₹ 24 lakhs
(D) None of the above
[CS-Exec, Jun 2018]

(C) ₹ 24 lakhs

Export of service does not include:

(A) the supplier of service located outside India
(B) the recipient of service located outside India
(C) the place of supply of service is outside India
(D) the supplier of service is located in India
[CS-Exec, Dec 2017]

(D) the supplier of service is located in India

Briefly define the following terms as per CGST Act, 2017.

(i) Aggregate Turnover
(ii) Exempt Supply
[CS-Prof, Jun 2018]

Write short note on “Export of Service”.

[CMA-Inter, Jun 2018]

Exempt supply means supply of any goods or services or both which may be wholly exempt
from tax under section 11 or under section 6 of the IGST Act and includes ............
(i) Non-taxable supply

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(ii) Zero rated supply

(iii) Supply having Nil rate of tax
(iv) Composite supply
(A) (i), (ii) and (iii)
(B) (i) and (iv)
(C) (i) and (iii)
(D) All the four above
[CS-Exec, Dec 2018]

(C) (i) and (iii)

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CGSTA, 2017
• Section 10: Composition Levy

(1) Overruling everything to the contrary contained in the CGSTA,

except the provisions relating to Reverse Charge,
a taxable person,
whose aggregate turnover in the previous FY did not exceed ₹ 50 lakhs,
may opt to pay a nominal amount calculated at the prescribed rate,
instead of the tax payable by him u/s 9(1).
• The prescribed rate must not exceed –
(a) Manufacturer 1%
(b) Restaurant Services 2.5% Of the turnover in state/ UT
(c) Other Suppliers 0.5%
• However, the Government may increase the said limit to upto ₹ 1.5 crores by
notification.
• Moreover, a person opting to pay tax under (a)/ (b)/ (c) may supply services (except
restaurant services), of value upto
o 10% of turnover in a state/ UT in the preceding FY or
o ₹ 5 lakhs
whichever is higher.

Notfn. No.: 14/2019 – CT

The CG has increased the turnover limit for opting composition scheme to
• ₹ 1.5 crore – in general cases
• ₹ 75 lakhs – in case of special category states except Assam, J&K and Uttarakhand

Order No. 01/2017-CT

1. This Order may be called the Central Goods and Services Tax (Removal of
Difficulties) Order, 2017.

2. For the removal of difficulties-

a. it is hereby clarified that if a person supplies goods and/ or services referred
to in clause (b) of paragraph 6 of Schedule II of the said Act [i.e. restaurant
services] and also supplies any exempt services including services by way of
extending deposits, loans or advances in so far as the consideration is
represented by way of interest or discount, the said person shall not be
ineligible for the composition scheme under section 10 subject to the
fulfilment of all other conditions specified therein.
b. it is further clarified that in computing his aggregate turnover in order to
determine his eligibility for composition scheme, value of supply of any
exempt services including services by way of extending deposits, loans or

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advances in so far as the consideration is represented by way of interest or

discount, shall not be considered.

Sl. No. Category of Person Rate of Tax

1. Manufacturers (except otherwise 0.5% of the turnover in the state/ UT
notified)
2. Restaurant service suppliers 2.5% of the turnover in the state/ UT
3. Other eligible suppliers 0.5% of the turnover of taxable
supplies of goods and services in the
state/ UT

Abhijit Sen is engaged in running a textile showroom at Gangtok (Sikkim). In order to avail
composition scheme under GST law, his “aggregate turnover” in the preceding financial
year should not have exceeded:
(A) ₹ 10 lakhs
(B) ₹ 20 lakhs
(C) ₹ 50 lakhs
(D) ₹ 75 lakhs
[CS-Exec, Dec 2017]

(D) ₹ 75 lakhs

In the case of a manufacturer who opts for composition scheme the rate of GST (including
CGST and SGST) is:
(A) 1%
(B) 2%
(C) 3%
(D) 5%
[CS-Exec, Dec 2017]

(A) 1%

M/s Heeralal and Sons registered in Karnataka has opted to avail the benefit of
composition scheme. It has furnished the following details for the tax period ended on 30-
06-2018.
Sl. No. Items ₹
(i) Taxable turnover of goods within the state 15,00,000
(ii) Exempted turnover of goods within the state 17,00,000
Total turnover 32,00,000
Using the above information calculate total GST (No need for bifurcation between CGST
and SGST) to be paid by the firm for the tax period ended on 30-06-2018 in following
independent situations:
(i) M/s Heeralal and Sons is a Manufacturer
(ii) M/s Heeralal and Sons is a Trader
[CA-Final, Nov 2018]

(i) (0.5% + 0.5%) × ₹ 32,00,000 = ₹ 32,000

(ii) (0.5% + 0.5%) × ₹ 15,00,000 = ₹ 15,000

X is a registered trader in Ghaziabad (Uttar Pradesh). In the Financial Year 2017-18 total
value of supplies are as follows:
(i) Intra-state supplies made under forward charge - ₹ 35 lakhs

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(ii) Intra-state supplies made which are chargeable to GST at

Nil rate - ₹ 25 lakhs
(iii) Intra-state supplies of goods which are wholly exempt
under section 11 of CGST Act, 2017 - ₹ 30 lakhs
(iv) Value of inward supplies on which tax payable under
Reverse Charge Basis (RCM) - ₹ 20 lakhs
Briefly explain whether X is eligible to opt for Composition Scheme in the financial year
2018-19?
[CS-Prof, Dec 2018]

Mr. S, a manufacturer of medicines, whose turnover for financial year 2018-19 was of ₹ 70
lakh opted to pay tax under GST as per composition scheme from 1st April, 2019. His turnover
crosses ₹ 1.5 crores on 30 November, 2019. Will he be allowed to pay tax under composition
scheme for the remainder of year i.e. from 1st December, 2019 to 31st March, 2020?
(A) Yes, he can avail the benefit till 31st March, 2020
(B) No, the option availed shall lapse from the day on which his aggregate turnover
during the financial year 2019-20 exceeds ₹ 1.5 crores
(C) Yes, the option can be availed upto completion of half financial year i.e. till 30th
September, 2019
(D) None of the above
[CS-Exec, Dec 2018 Mod.]

(B) No, the option availed shall lapse from the day on which his aggregate turnover
during the financial year 2019-20 exceeds ₹ 1.5 crores.

(2) Conditions for eligibility to opt composition scheme –

(a) He is not engaged in the supply of services, except as provided in (1) above
(b) He is not engaged in making any supply of goods which are not leviable to GST
(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 e-commerce
operator
(e) He is not a manufacturer of goods notified by the government.

Notfn. No.: 14/2019 – CT

The manufacturers of
• ice cream,
• pan masala and
• tobacco products
• aerated water
have been notified to be ineligible to register as composition supplier.

• Where more than 1 registered person bear the same PAN,

all such persons must opt to pay tax under the composition levy scheme.

Prem is running a consulting firm and also a fancy store, registered under the same PAN
number. Turnover of the fancy store is ₹ 65,00,000 and receipt of consultancy firm is ₹
10,00,000 in the preceding financial year.
You are required to provide answers with supporting explanatory note for each answer to
the following questions:
(i) Is Prem eligible for composition scheme under CGST Act?
(ii) Whether it is possible for Prem to opt for composition scheme only for fancy store?
(iii) If Prem is running a restaurant with turnover of 65,00,000 instead of consultancy
firm as well as a fancy store, would he be eligible for composition scheme?
[CA-Final, May 2018]

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(i) No, because suppliers of consultancy services are not allowed to opt for composition
scheme.
(ii) No, because in case more than one registered person bear the same PAN, all such
persons must opt for composition scheme.
(iii) No, because his aggregate turnover from restaurant and fancy store exceeds the
threshold limit of ₹ 1 crore (or ₹ 75 lakhs, as the case may be) applicable for opting
composition scheme.

M/s Ginny and John Company is a partnership firm of interior decorators and also running
a readymade garment showroom. Turnover of the showroom was ₹ 80 lakhs and Receipts
of the interior decorators service was ₹ 22 lakhs in the preceding financial year.
With reference to the provisions of the CGST Act, 2017, examine whether the firm can opt
for the composition scheme.
Will your answer change, if the turnover of the showroom was ₹ 70 lakhs and receipts of
the interior decorators service was ₹ 22 lakhs in the preceding financial year?
Also discuss whether it is possible for M/s Ginny and John Company to opt for composition
scheme only for showroom.
[CA-IPCE, May 2018]
No, No, No.

M/s Sai Trading Company, an eligible registered dealer in goods making intra-state
supplies within the state of Andhra Pradesh, has reported an aggregate turnover of ₹ 78
lakhs in the preceding financial year.
(i) Determine whether Sai Trading Company will be eligible for composition levy, as
on 31-10-2017.
(ii) Will your answer be different, if in the above scenario, M/s Sai Trading Company is
making intra state supply within the state of Jammu and Kashmir?
[CA-Inter, May 2018]

(i) Yes
(ii) Yes

Who among the following is eligible for availing compositions scheme under GST?
(A) Supply through e-commerce operators
(B) Service supply like company secretary
(C) Goods not taxable under CGST/ SGST/ UTGST/ IGST
(D) Restaurants
[CS-Exec, Dec 2017]

(D) Restaurants

The following categories of registered persons are not being eligible for the Composition
Scheme under the CGST Act, 2017:
(i) Supplier of the Restaurant Services
(ii) Manufacturer of notified goods
(iii) Non-resident taxable persons
(iv) Casual taxable person
(A) (iii) and (iv)
(B) (ii), (iii) and (iv)
(C) (ii) and (iv)
(D) (i), (iii) and (iv)
[CS-Exec, Jun 2018]

(B) (ii), (iii) and (iv)

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MN Ltd. has two registered business verticals in the state of Haryana. Its aggregate
turnover during the previous financial year for both the business verticals was ₹ 62 lakhs. It
wishes to opt for composition levy for one of the verticals in the current year and wants to
continue with registration and pay taxes at the merit rate for the second vertical. Can MN
Ltd. do so? Explain with reason.
[CA-Final, Nov 2018]

No

Mr. X is running a consulting firm and also a readymade garment showroom in Kolkata
registered in same PAN. Turnover of the showroom is ₹ 70 lakhs and receipt of consultancy
firm is ₹ 15 lakhs in the preceding financial year. You are required to answer the following:
(1) Is Mr. X eligible for composition scheme?
(2) Is it possible for Mr. X to opt for composition scheme only for showroom?
[CA-IPCE, Nov 2018]

(1) No
(2) No

Enumerate the persons who are not eligible to opt for Composition Scheme under section
10(2) of the CGST Act, 2017.
[CA-Inter, May 2019]

(3) The option availed of by a registered person

shall lapse with effect from the day
on which his aggregate turnover during a FY
exceeds the specified threshold limit.

Examine in relation to composition levy scheme under the CGST Act, 2017 and the rules
made thereunder in the following individual cases:
(1) Ketu is a manufacturer of ice-cream and pan masala in State of Maharashtra. His
turnover for the year does not exceed ₹ 1 crore. He wants to register for
composition levy scheme. Is he eligible for it?
(2) Jadhu of Gujarat opts for composition scheme during a financial year 2017-18. But
on 10-02-2018 his turnover crosses ₹ 1 Crore, can he continue under composition
levy scheme?
(3) X Ltd. has 2 branches K & L in Delhi, having same PAN. Branch K opts for normal
scheme. X Ltd. want to continue composition levy in case of its branch L. Can X Ltd.
continue composition levy only for branch L?
[CA-IPCE, May 2019]

(1) No
(2) No
(3) No

(4) A taxable person opting to pay tax under composition levy

shall not collect any tax from the recipient on outward supplies
and also shall not be entitled to any credit of input tax.

(5) If an ineligible person pays tax under composition levy,

he shall be liable to a penalty
in addition to the tax payable by him under normal provisions
and the provisions of demand and recovery shall mutatis mutandis apply for
determination of the tax and penalty amount.

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M/s Ranveer Industries, registered in Himachal Pradesh, is engaged in making Interstate

supplies of readymade garments. The aggregate turnover of M/s Ranveer Industries in the
financial year 2016-17 is ₹ 70 lakhs. It opted for composition levy in the year 2017-18 and
paid tax for the quarter ending September 2017 under composition levy.
The proper officer has levied penalty for wrongly availing the scheme on M/s Ranveer
Industries in addition to the tax payable by it.
Examine the validity of the action taken by proper officer.
[CA-Final, Nov 2018]

(1) A provisionally registered person (migrated from existing laws) who opts to pay tax
u/s 10 shall file an intimation in FORM GST CMP-01 before the end of 30 days from
the appointed day.
However, where a person intimates after the appointed day, he shall not collect any
tax from the appointed day itself and issue bill of supply for supplies made after that
day.

(2) In case of new registrations, the person may give an option to pay tax u/s 10 in Part B
of FORM GST REG-01.

(3) Any registered person who opts to pay tax u/s 10 shall intimate about the same in
FORM GST CMP-02, before the commencement of the FY during which he wishes to
exercise the option and shall also furnish a stock statement as on the date
immediately before commencement of the relevant FY, in FORM GST ITC-03, within
60 days of the commencement of the said FY.

(3A) Overruling all of the above, a person may opt to pay tax u/s 10 from the next month
itself if he files the intimation in FORM GST CMP-02 before 31 March, 2018, along with
FORM GST ITC-03 within 180 days from the commencement of exercising this
option.
However, in such a case, the said person shall not be allowed to file FORM GST
TRAN-1 after furnishing FORM GST ITC-03.

(4) A provisionally registered person who has filed the intimation as per sub-rule (1) shall
furnish the stock details, including inward supply of goods received from
unregistered persons, as on the date immediately before the date from which he opts
to pay tax u/s 10, in FORM GST CMP-03, within 90 days (or as extended by the
Commissioner), from the said date of exercising the option.

(5) Any intimation under sub-rule (1)/ (3)/ (3A) regarding any place of business in a
State/ UT shall be considered as an intimation regarding all other places of business
registered on the same PAN.

(1) For registered persons switching to composition levy u/s 10, the option shall be
effective from the beginning of the FY, whereas for those migrating, it shall be
effective from the appointed day.

(2) In case of persons opting for the same u/r 3(2), it shall be considered only after the
grant of registration and effective from the effective date of registration.

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(1) The persons exercising the option to pay tax u/s 10 shall comply with the following
conditions –
(a) he is not a CTP/ NRTP;
(b) the goods held in stock by him on the appointed day have not been
▪ purchased from another state/ UT/ country or
▪ received from his branch situated outside the State or
▪ received from his agent/ principal outside the State,
where the option is exercised under rule 3(1);
(c) the goods held in stock by him have not been purchased from an
unregistered supplier and where purchased, he pays the tax on reverse
charge basis;
(d) he shall pay tax on reverse charge basis on inward supply of goods/ services,
wherever applicable;
(e) he was not engaged in the manufacture of goods as notified u/s 10(2)(e),
during the preceding FY;
(f) he shall mention the words “composition taxable person, not eligible to
collect tax on supplies” at the top of the bill of supply issued by him; and
(g) he shall mention the words “composition taxable person” on every notice or
signboard displayed at a prominent place at his principal place of business
and at every additional place(s) of business.

(2) The registered person is not required to furnish fresh intimation every year and he
may continue to pay tax u/s 10 subject to the provisions of the CGSTA and Rules.

(1) The option to pay tax u/s 10 shall remain valid as long as the registered person
satisfies all the conditions mentioned earlier.

(2) The day he ceases to satisfy any of the conditions, he shall be liable to pay tax under
the regular provisions u/s 9(1) and shall issue a tax invoice for every taxable supply
made thereafter. Also, he shall file an intimation in FORM GST CMP-04 within 7 days
to withdraw from the scheme.

(3) The registered person who intends to withdraw from the scheme shall file an
application in FORM GST CMP-04 before the date of such withdrawal.

(4) Where the PO suspects the eligibility of the registered person to pay tax u/s 10, he
may issue a SCN to such person in FORM GST CMP-05 to be responded within 15
days from the receipt in FORM GST CMP-06.

(5) Upon receipt of the reply, the PO shall issue an order in FORM GST CMP-07 within
30 days, either accepting the reply or denying the option to pay tax u/s 10 from the
beginning itself or from the date when the provisions of the scheme were
contravened, as the case may be.

(6) Every such person referred in sub-rule (2)/ (3)/ (5) may furnish a stock statement in
FORM GST ITC-01 within 30 days regarding the stock held by him as on the date of
the withdrawal/ denial.

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(7) Any intimation/ application for such withdrawal/ denial regarding any place of
business in a State/ UT shall be considered as an intimation regarding all other places
of business registered on the same PAN.

Notfn. No.: 02/2019 – CT(R)

The CG hereby notifies that the CGST, on the intra-state supply of goods or services as
mentioned hereinbelow shall be levied @ 3%, subject to the specified conditions:

Description of supply –
First supplies of goods/ services by a registered person upto an aggregate turnover of ₹ 50
lakhs, made on or after the 1st day of April in any FY.

NOTE: “First supplies of goods/ services” shall –

o For determining the eligibility of a person – include the supplies from 01 April of a FY
to the date from which he becomes liable for registration under the CGSTA, 2017.
However, value of supply of exempt services of extending deposits/ loans/
advances in so far as the consideration is represented by way of interest/ discount,
shall not be considered.
o For determining the tax payable – NOT include the supplies from 01 April of a FY to
the date from which he becomes liable for registration under the CGSTA, 2017

Conditions –
1. Supplies are made by a registered person –
(i) whose aggregate turnover in the preceding FY was ₹ 50 lakhs or below,
(ii) who is not eligible to pay tax u/s 10(1).
(iii) who is not engaged in making any supply which is not leviable to GST,
(iv) who is not engaged in making any inter-state outward supply,
(v) who is not a CTP/ NRTP
(vi) who is not engaged in making any supply through an e-commerce operator
who is required to collect TCS u/s 52, and
(vii) who is not engaged in supplying following goods –
▪ ice cream,
▪ pan masala and
▪ tobacco products
▪ aerated water
2. In case more than one registered person is having the same PAN, CGST on supplies
by all such registered persons is paid at the rate notified hereinabove.
3. The registered person shall not collect any tax from the recipient on supplies made
by him nor shall he be entitled to any ITC.
4. The registered person shall issue a BoS as referred to in section 31(3)(c) instead of a
tax invoice.
5. The registered person shall mention “Taxable person paying tax in terms of Notfn.
No.: 2/2019 – CT(R) dated 07.03.2019, not eligible to collect tax on supplies” atop
the BoS.
6. The registered person opting to pay CGST @ 3% under this notification shall be liable
to pay CGST at that rate on all outward supplies, irrespective of any other
notification issued u/s 9(1) or 11.
7. The registered person opting to pay CGST @ 3% under this notification shall be liable
to pay CGST under RCM on inward supplies on which he is so liable to do u/s 9(3)/
(4) at the applicable rates.
8. In case any registered person who has availed ITC opts to pay tax under this
notification,
he shall pay an amount equivalent to the ITC for
o inputs held in stock and contained in SFG/ FG held in stock and
o capital goods

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by debiting his e-CrL/ e-CaL

as if the supply made under this notification attracts section 18(4)
and after payment of such amount, any balance of ITC lying in his e-CrL shall lapse.

NOTE: The CGST Rules, 2017, as applicable to a person paying tax u/s 10 shall, mutatis
mutandis, apply to a person paying tax under this notification.

Circular No. 97/16/2019-GST

Clarification regarding exercise of option to pay tax under Notification No. 2/2019 – CT(R)
dt. 07.03.2019

(i) a registered person who wants to opt for payment of central tax @ 3% by
availing the benefit of the said notification, may do so by filing intimation in
the manner specified in sub-rule 3 of rule 3 of the said rules in FORM GST
CMP-02 by selecting the category of registered person as “Any other supplier
eligible for composition levy” as listed at Sl. No. 5(iii) of the said form, latest
by 30th April, 2019. Such person shall also furnish a statement in FORM GST
ITC-03 in accordance with the provisions of sub-rule (3) of rule 3 of the said
rules.
(ii) any person who applies for registration and who wants to opt for payment of
central tax @ 3% by availing the benefit of the said notification, if eligible, may
do so by indicating the option at serial no. 5 and 6.1(iii) of FORM GST REG-01
at the time of filing of application for registration.
(iii) the option of payment of tax by availing the benefit of the said notification in
respect of any place of business in any State or Union territory shall be
deemed to be applicable in respect of all other places of business registered
on the same Permanent Account Number.
(iv) the option to pay tax by availing the benefit of the said notification would be
effective from the beginning of the financial year or from the date of
registration in cases where new registration has been obtained during the
financial year.

3. It may be noted that the provisions contained in Chapter II of the said Rules shall
mutatis mutandis apply to persons paying tax by availing the benefit of the said
notification, except to the extent specified in para 2 above.

Explain Composition Levy in the context of CGST Act, 2017

[CS-Prof, Dec 2017]

A registered supplier under composition levy can withdraw at any time and be required to
file the Form for withdrawal from composition levy in:
(A) GST CMP-03
(B) GST CMP-04
(C) GST MIS-01
(D) GST PCT-02
[CS-Exec, Jun 2018]

(B) GST CMP-04

Circular No. 77/ 51/2018-GST

Denial of composition option by tax authorities and effective date thereof

Rule 6 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as
the “CGST Rules”) deals with the validity of the composition levy. As per the said rule,
the option exercised by a registered person to pay tax under the composition
scheme shall remain valid so long as he satisfies the conditions mentioned in section

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10 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the
“CGST Act”) and the CGST Rules. The rule lays down the procedure for withdrawal
from the composition scheme by a taxpayer who intends to withdraw from the said
scheme and also the procedure for denial of option to the taxpayer to pay tax under
the said scheme where he has contravened the provisions of the CGST Act or the
CGST Rules.

2. In this connection, doubts have been raised as to the date from which withdrawal
from the composition scheme shall take effect in a case where the composition
taxpayer has exercised such option to withdraw. Doubts have also been raised
regarding the effective date of denial of the option to pay tax under the composition
scheme where action has been initiated by the tax authorities to deny such option to
the composition taxpayer. Further, clarification has been sought regarding the follow
up action to be taken by the tax authorities when the composition option is denied to
the taxpayer retrospectively. In order to clarify these issues and to ensure uniformity
in the implementation of the provisions of the law across field formations, the Board,
in exercise of its powers conferred by section 168 (1) of the CGST Act, hereby clarifies
the issues raised as below.

3. Sub-rule (2) of rule 6 of the CGST Rules provides that the composition taxpayer shall
pay tax under sub-section (1) of section 9 of the CGST Act as a normal taxpayer from
the day he ceases to satisfy any of the conditions of the composition scheme and
shall issue tax invoice for every taxable supply made thereafter. Sub-rule (3) of rule 6
of the CGST Rules provides that the registered person who intends to withdraw from
the composition scheme shall, before the date of such withdrawal, file an application
in FORM GST CMP-04 on the common portal. He shall file intimation for withdrawal
from the scheme in FORM GST CMP-04 within seven days of the occurrence of such
event.

4. As per sub-rule (4) of rule 6 of the CGST Rules, where the proper officer has reasons
to believe that the registered person was not eligible to pay tax under section 10 of
the CGST Act or has contravened the provisions of the CGST Act or the CGST Rules,
he may issue a notice to such person in FORM GST CMP-05 to show cause as to why
the option to pay tax under section 10 of the CGST Act shall not be denied. Upon
receipt of the reply to the show cause notice from the registered person in FORM
GST CMP-06, the proper officer shall, in accordance with the provisions of sub-rule
(5) of rule 6 of the CGST Rules, issue an order in FORM GST CMP-07 within a period
of thirty days of the receipt of such reply, either accepting the reply, or denying the
option to pay tax under section 10 of the CGST Act from the date of the option or
from the date of the event concerning such contravention, as the case may be.

5. It is clarified that in a case where the taxpayer has sought withdrawal from the
composition scheme, the effective date shall be the date indicated by him in his
intimation/application filed in FORM GST CMP-04 but such date may not be prior to
the commencement of the financial year in which such intimation/application for
withdrawal is being filed. If at any stage it is found that he has contravened any of the
provisions of the CGST Act or the CGST Rules, action may be initiated for recovery of
tax, interest and penalty. In case of denial of option by the tax authorities, the
effective date of such denial shall be from a date, including any retrospective date as
may be determined by tax authorities, but shall not be prior to the date of
contravention of the provisions of the CGST Act or the CGST Rules. In such cases, as
provided under sub-section (5) of section 10 of the CGST Act, the proceedings would
have to be initiated under the provisions of section 73 or section 74 of the CGST Act
for determination of tax, interest and penalty for the period starting from the date of
contravention of provisions till the date of issue of order in FORM GST CMP-07. It is
also clarified that the registered person shall be liable to pay tax under section 9 of
the CGST Act from the date of issue of the order in FORM GST CMP-07. Provisions of

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section 18(1)(c) of the CGST Act shall apply for claiming credit on inputs held in stock,
inputs contained in semi-finished or finished goods held in stock and on capital
goods on the date immediately preceding the date of issue of the order.

• Appointed Day [Sec. 2(9) of CGSTA]: means the date on which the provisions of this
Act shall come into force.
• Commissioner [Sec. 2(24) of CGSTA]: means the Commissioner of central tax and
includes the Principal Commissioner of central tax appointed under section 3 and the
Commissioner of integrated tax appointed under the Integrated Goods and Services
Tax Act.
• Existing law [Sec. 2(48) of CGSTA]: means any law, notification, order, rule or
regulation relating to levy and collection of duty or tax on goods or services or both
passed or made before the commencement of this Act by Parliament or any
Authority or person having the power to make such law, notification, order, rule or
regulation.
• Inward supply [Sec. 2(67) of CGSTA]: in relation to a person, shall mean receipt of
goods or services or both whether by purchase, acquisition or any other means with
or without consideration.
• Non-resident taxable person [Sec. 2(77) of CGSTA]: means any person who
occasionally undertakes transactions involving supply of goods or services or both,
whether as principal or agent or in any other capacity, but who has no fixed place of
business or residence in India.
• Turnover in state/ UT [Sec. 2(112) of CGSTA]: 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) and exempt supplies made within a State or Union territory
by a taxable person, exports of goods or services or both and inter-State supplies of
goods or services or both made from the State or Union territory by the said taxable
person but excludes central tax, State tax, Union territory tax, integrated tax and
cess.

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CGSTA, 2017
• Section 31: Tax Invoice
• Section 32: Prohibition of unauthorized collection of tax
• Section 33: Amount of tax to be indicated on tax invoice
• Section 34: Credit and Debit Notes

(1) Supply of taxable goods

Nature of Supply Invoice to be issued before or at the time of…

Involves movement of goods removal of goods for supply

All other cases delivery of goods or making them available
• Tax invoice shall contain prescribed particulars such as description, quantity and value
of goods, the tax charged etc.
• The Government may notify categories of goods in respect of which tax invoice shall be
issued within prescribed time.

(2) Supply of taxable services

Invoice to be issued
within this period

Date of Provision Prescribed Date

of Service [ ]

• Tax invoice shall contain prescribed particulars such as description, value of services,
the tax charged etc.
• The Government may notify categories of services in respect of which
o any other document issued shall be deemed to be tax invoice
o tax invoice may not be issued

Barring the cases mentioned in Rule 54, a tax invoice shall contain these particulars –

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Address of Delivery

However, the signature/ digital signature shall not be required in case of an e-invoice issued
as per ITA, 2000.

The invoice shall be issued in

Triplicate (in case of supply of goods) Duplicate (in case of supply of services)

ORIGINAL for recipient ORIGINAL for recipient

DUPLICATE for transporter DUPLICATE for supplier
TRIPLICATE for supplier

Notfn. No.: 12/2017 – CT and 05/2017 - IT

A registered person shall be required to mention the following no. of digits of HSN code on
the invoice –

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Sl. No. Annual Turnover in the preceding FY No. of digits of HSN Code

1. Upto ₹ 1.5 crores NIL

2. ₹ 1.5 crores - ₹ 5 crores 2
3. Above ₹ 5 crores 4

The assessee is required mandatorily to mention the Harmonized System Nomenclature

(HSN) or Service Accounting Code (SAC) on the tax invoice of the product or service supplied
under GST:
(A) having a turnover of ₹ 1.5 crore and above
(B) having a turnover of ₹ 3 crore and above
(C) having a turnover of ₹ 4 crore and above
(D) having a turnover of ₹ 5 crore and above
[CS-Exec, Dec 2018]

(A) having a turnover of ₹ 1.5 crore and above

In case of export of goods/ services, the invoice shall bear the following words–
“SUPPLY MEANT FOR EXPORT/ SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR
AUTHORISED OPERATIONS ON PAYMENT OF INTEGRATED TAX”
or
“SUPPLY MEANT FOR EXPORT/ SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR
AUTHORISED OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT
PAYMENT OF INTEGRATED TAX”
as the case may be, and instead of the name of State, shall bear the name of the Country of
destination.

Taxable service supplied by… Invoice to be issued…

General supplier Within 30 days

An insurer/ bank/ FI/ NBFC Within 45 days
An insurer/ bank/ FI/ NBFC/ telecom Before or at the time such supplier records
operator/ any other class of notified the same in his books of account
suppliers, supplying taxable services OR
between distinct persons Before the end of the quarter in which
supply was made

Examine the following independent cases of supply of goods and services and determine
the time of issue of invoice under each of the cases as per the provisions of CGST Act, 2017:
(i) Sakthi Enterprises, Kolkata entered into a contract with Suraj Enterprises, Surat for
supply of goods on 31st October, 2018. The goods were removed from the factory at
Kolkata on 11th October, 2018. As per the agreement the goods were to be delivered
by 31st October, 2018. Suraj Enterprises has received the goods on 14 th October,
2018.

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(ii) Trust and Fun Ltd. an event management company, has provided its services for an
event at Kapoor Film Agencies, Mumbai on 5th June, 2018. Payment for the event
was made on 19th June, 2018.
[CA-Inter, May 2019]

(i) 11th October, 2018

(ii) 5th July, 2018

(3) Overruling sub-sections (1) and (2) –

(a)
Date of Issuance of RC

Effective Date of Registration 1 month

Revised Invoices to
be issued for
invoices issued
during this period

Where the registered person has made taxable supply to an unregistered person during the
said period, he may issue –
In case of Where the value is One consolidated invoice
Inter-state supplies Below ₹ 2,50,000 Per state
All other supplies Per recipient

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Chidanand Products Pvt. Ltd. started its business of supply of goods on 1st August, 2017. Its
turnover exceeds ₹ 20,00,000 on 5th September, 2017. It applied for registration on 28th
September, 2017 & granted registration certificate on 6th October, 2017. Guide the company
regarding invoice to be issued between 5th September, 2017 to 6th October, 2017 to
registered dealers. Further it had also made supplies to unregistered dealers in that period.
How it can raise invoices?
[CA-IPCE, May 2018]

(b) If the value of goods/ service supplied < ₹ 200

the supplier may not issue tax invoice
subject to prescribed conditions.

Subject to the fulfilment of the following conditions, a registered person, except the supplier
engaged in supplying services of admission to/ exhibition of cinemas in multiplex screens,
shall issue a consolidated tax invoice at the end of each day in lieu of issuing an invoice u/s
31(3)(b) in respect of all such supplies:
(a) The recipient is unregistered and
(b) The recipient does not require such invoice.

(c)
Scenario Document to be issued
Supply of exempted goods/ services
Bill of Supply
Composition Supplier
o Proviso – Similar to clause (b) above

A bill of supply shall contain these particulars –

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However, any tax invoice or similar document issued under any other Act in respect of any
non-taxable supply shall be treated as BoS.
However, the signature/ digital signature shall not be required in case of an e-BoS issued as
per ITA, 2000.

(d)
Scenario Document to be issued
Receipt of advance payment Receipt Voucher

A receipt voucher shall contain these particulars –

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Condition (at the time of receipt of advance…) Alternative

Rate of tax is not determinable 18%

Nature of supply is not determinable Inter-state

(e)
Scenario Document to be issued
Advance received but supply not made Refund voucher

A refund voucher shall contain these particulars –

(f)

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 GST Simplified™ Ready Reckoner for Students and Professionals

Scenario Document to be issued

Supplies taxable on reverse charge basis Tax Invoice
received from unregistered suppliers • by the recipient on himself
• on the date of receipt

(g)
Scenario Document to be issued
Payment for supplies taxable on reverse
Payment Voucher
charge basis

A payment voucher shall contain these particulars –

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Where an invoice is required to be issued under clause (f), the registered person may issue a
consolidated invoice at the end of a month for supplies received from unregistered suppliers
u/s 9(4) during that month, if the aggregate value of such supplies exceed ₹ 5,000 per day
from any or all the suppliers.

What are the documents required to be prepared by the recipient of supplies from an
unregistered person as per GST law?
[CS-Prof, Dec 2018]

(4) In case of continuous supply of goods,

the invoice shall be issued before or at the time
o each successive statement of accounts is issued, or
o each successive payment is received.

(5) In case of continuous supply of services, subject to (3)(d)

Payment
Due Date ascertainable Due date not Linked to completion of
by contract ascertainable by contract an event

On or before the due Before or at the time of On or before the date of

date of payment receipt of payment completion of the event

Jolla provides continuous supply of services regarding Annual Maintenance Contract

(AMC) of Air conditioner and all electronic items of Khotu Ltd. He provides following details
regarding same:
They made contract for the AMC. As mentioned in contract, AMC will start from 01-10-2017
and will be valid for a year. AMC ends on 30-09-2018. Jolla receives payment for the AMC
on 31-10-2018.
Explain the time of issue of invoice in case of Continuous Supply of Service (CSS) as per
provisions of CGST Act, 2017 and accordingly determine time of issue of invoice in following
different circumstances:
(4) As mentioned in contract Khotu Ltd. have to make payment on 05-11-2018.
(5) If terms of payment are not mentioned in AMC and also not agreed by both the
parties.
[CA-IPCE, May 2019]

(1) 05-11-2018
(2) 31-10-2018

(6) In case where the supply of services

ceases under a contract
before the completion of the supply,

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the invoice pertaining to supply till then

shall be issued at the time of such cessation.

(7) Overruling sub-section (1), in case of goods sent on approval,

where the goods are removed before supply,
the invoice shall be issued

Earlier of
6 months from the Before or at the time
date of removal of supply

Discuss the provisions relating to issue of an invoice/ document in the following

circumstances:
(i) Advance payment is received against a supply, but subsequently no supplies are
made.
(ii) Goods are sent on approval for sale or return and are removed before the supply
takes place.
(iii) Malcolm provides continuous supply of services to his client, where the due date of
payment for such services is not ascertainable. No advance has been received in
this behalf.
[CA-Final, May 2018]

(2) An insurer/ bank/ FI/ NBFC may issue a consolidated tax invoice or any other
document in lieu of it at the end of a month, for the supplies made during the month,
whether
o issued or made available, physically/ electronically,
o serially numbered or not, and
o containing the recipient’s address or not
but containing other information as per Rule 46.
However, the signature/ digital signature shall not be required in case of an e-
consolidated invoice issued as per ITA, 2000.

(3) A GTA shall issue a tax invoice or any other document in lieu of it, containing –
o Gross weight of consignment,
o Name of the consignor and the consignee,
o Goods carriage registration no.,
o Details of goods transported,
o Details of place of origin and destination,
o GSTIN of the tax payer whether as consignor/ consignee/ GTA
and other information as per Rule 46.

(4) In case of passenger transportation service, tax invoice shall include ticket in any
form, whether or not
o serially numbered and
o containing the address of the recipient

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but containing other information as per Rule 46.

However, the signature/ digital signature shall not be required in case of a ticket
issued as per ITA, 2000.

(4A) A registered person supplying services of admission to/ exhibition of cinemas in

multiplex screens shall be required to issue an e-ticket
and the said e-ticket shall be deemed to be a tax invoice for all purposes of the Act,
even if such ticket does not contain the details of the recipient
but contains the other information as required u/r 46.
Moreover, the supplier of such service in a screen other than multiplex screens may
opt to follow the above procedure as well.

(5) The provisions of (2)/ (4) above shall apply to the documents issued u/r 49/ 50/ 51/
52/ 53 mutatis mutandis.

Explain the meaning of consignment note in relation to Goods Transport Agency and state
its contents as per provisions of the CGST Act, 2017.
[CA-IPCE, May 2019]

(1) An unregistered person

shall not collect any tax
under these laws
on supplies made by him.

(2) A registered person

shall not collect any tax
except as mentioned in these laws
on supplies made by him.

Overruling everything,
where any supply is made for a consideration,
every person who is liable to pay tax
shall indicate the tax amount for such supplies
on all documents relating to assessment, tax invoice and such like.

Credit Notes
(1) The supplier may issue to the recipient one or more credit notes for supplies made in a
FY containing prescribed details in the following cases –
o Where one or more tax invoices have been issued for supply of goods/
services, but the value or tax amount mentioned in the invoice is found to
exceed the actual amount.
o Where the goods supplied are returned by the recipient.
o Where goods/ services supplied are found to be deficient.

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(2) The issuer shall declare the details of such credit note
in the return pertaining to the month of the issue,
but not later than
o September following the FY in which supply was made or
o the date of furnishing the relevant annual return
whichever is earlier.
• The output tax liability of the supplier shall not be reduced
if the incidence of tax and interest on such supply has been passed on
to any other person.

Debit Notes
(3) The supplier may issue to the recipient one or more debit notes for supplies made in a
FY containing prescribed details in the following cases –
o Where one or more tax invoices have been issued for supply of goods/
services, but the value or tax amount mentioned in the invoice is found to be
less than the actual amount.

(4) The issuer shall declare the details of such debit note
in the return pertaining to the month of the issue.

A debit note/ credit note shall contain these particulars –

Where a Dr. Note is issued for any tax payable in accordance with provisions of Sec. 74/ 129/
130, “INPUT TAX CREDIT NOT ADMISSIBLE” should be mentioned prominently on the face of
the document

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 GST Simplified™ Ready Reckoner for Students and Professionals

Write short note on “Contents of a revised tax invoice and credit or debit note”.
[CMA-Inter, Jun 2018]

Under what circumstances needs of issuance of debit note and credit note arise under
section 34 of CGST Act, 2017?
[CA-IPCE, May 2018]

Debit note is issued by the supplier of goods when:

(A) tax charged in the invoice is excessive
(B) when the goods are returned by recipient
(C) tax charged is less than the tax payable
(D) when the goods supplied are deficient
[CS-Exec, Dec 2017]

(C) tax charged is less than the tax payable

Discuss the provisions relating to issuance of credit notes and debit notes under CGST Act
and rules thereunder.
[CA-IPCE, Nov 2018]

List out the situations in which a Credit note/ Debit note may be issued under the CGST Act,
2017.
[CA-Inter, May 2019]

Overruling Rule 46/ 49/ 54,

where a registered person is making taxable as well as exempted supplies
to an un-registered person,
he may issue a single “invoice-cum-bill of supply” for all such supplies.

Determine with reason whether the following statements are true or false:
(i) A registered person shall issue a separate invoice for supplying both taxable as well
as exempted goods to an unregistered person.
(ii) A Non-banking financial company can issue a consolidated tax invoice at the end
of every month for the supply made during that month.
[CA-Inter, May 2018]

(i) False
(ii) False

• Tax invoice includes “revised invoice”

• Debit Note includes “supplementary invoice”

(1) For the following purposes, a consignor may issue DC at the time of removal of goods,
instead of invoice:
(a) supply of liquid gas where the quantity at the time of removal from the place
of business of the supplier is not known,

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(b) transportation of goods for job work,

(c) transportation of goods for reasons other than by way of supply, or
(d) such other supplies as may be notified by the Board
A delivery challan shall contain these particulars –

(2) The challan shall be prepared in triplicate –

o ORIGINAL for consignee
o DUPLICATE for transporter
o TRIPLICATE for consigner

(3) The goods being transported on challan shall be declared in accordance with e-Way
Bill Rules.

(4) Where the goods being transported are for the purpose of supply, but the supplier could
not issue a tax invoice at the time of removal of goods, he shall do so after delivery of
goods.

(5) Where the goods are being transported in SKD/ CKD condition-
(a) Complete invoice shall be issued before dispatch of FIRST consignment
(b) DC shall be issued for every subsequent consignment, w.r.t. the invoice
(c) A copy of DC and certified copy of invoice shall be sent along with each
consignment
(d) The original invoice shall be sent along with the last consignment.

Circular No. 10/ 10/2017-GST

Clarification on issues wherein the goods are moved within the State or from the State of
registration to another State for supply on approval basis

4. The goods which are taken for supply on approval basis can be moved from the
place of business of the registered supplier to another place within the same State or
to a place outside the State on a DC along with the e-way bill wherever applicable
and the invoice may be issued at the time of delivery of goods. For this purpose, the
person carrying the goods for such supply can carry the invoice book with him so
that he can issue the invoice once the supply is fructified.

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5. All such supplies, where the supplier carries goods from one State to another and
supplies them in a different State, will be inter-state supplies and attract IGST in
terms of Section 5 of the IGSTA, 2017.

6. This clarification would be applicable to all goods supplied under similar situations.

Circular No. 22/ 22/2017-GST

Clarification on issues regarding treatment of supply by an artist in various States and supply
of goods by artists from galleries

3. The art work for supply on approval basis can be moved from the place of business
of the registered person (artist) to another place within the same State or to a place
outside the State on a delivery challan along with the e-way bill wherever applicable
and the invoice may be issued at the time of actual supply of art work.

4. It is also clarified that the supplies of the art work from one State to another State will
be inter-State supplies and attract integrated tax in terms of section 5 of the
Integrated Goods and Services Tax Act, 2017.

5. It is further clarified that in case of supply by artists through galleries, there is no

consideration flowing from the gallery to the artist when the art works are sent to the
gallery for exhibition and therefore, the same is not a supply. It is only when the
buyer selects a particular art work displayed at the gallery, that the actual supply
takes place and applicable GST would be payable at the time of such supply.

• Address of delivery [Sec. 2(2) of CGSTA]: means the address of the recipient of goods
or services or both indicated on the tax invoice issued by a registered person for
delivery of such goods or services or both.
• Assessment [Sec. 2(11) of CGSTA]: means determination of tax liability under this Act
and includes self-assessment, re-assessment, provisional assessment, summary
assessment and best judgment assessment.
• Continuous supply of goods [Sec. 2(32) of CGSTA]: means a supply of goods which is
provided, or agreed to be provided, continuously or on recurrent basis, under a
contract, whether or not by means of a wire, cable, pipeline or other conduit, and for
which the supplier invoices the recipient on a regular or periodic basis and includes
supply of such goods as the Government may, subject to such conditions, as it may,
by notification, specify.
• Output tax [Sec. 2(82) of CGSTA and Sec. 2(18) of IGSTA]: in relation to a taxable
person, means the tax chargeable under this Act on taxable supply of goods or
services or both made by him or by his agent but excludes tax payable by him on
reverse charge basis.
• Removal [Sec. 2(96) of CGSTA]: in relation to goods, means—
(a) despatch of the goods for delivery by the supplier thereof or by any other
person acting on behalf of such supplier; or
(b) collection of the goods by the recipient thereof or by any other person acting
on behalf of such recipient.

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(1) Every registered person who causes movement of goods of consignment value
exceeding ₹ 50,000
o in relation to a supply, or
o for reasons other than supply, or
o due to inward supply from an un-registered person,
shall furnish information relating to the said goods in FORM GST EWB-01 (Part – A),
prior to the commencement of such movement
along with other required information
and a unique no. will be generated thereafter.
However, the transporter may furnish the information in the said FORM
on an authorization received from the registered person.
Further, in case the goods to be transported are supplied through
o an e-commerce operator or
o a courier agency,
the said operator/ courier agency may furnish the information in the said FORM
on an authorization received from the consignor.
Moreover, in the following cases, the threshold limit of ₹ 50,000 shall not be
considered for the generation of e-way bills
STATE/ UT A STATE/ UT B
Principal Job worker
Supplier of handicraft goods [as defined in Notfn. No.: 56/2018 - CT], Any recipient
exempt from liability to register u/s 24(i) and (ii)

NOTE: Consignment value = Taxable value declared in the invoice/ BoS/ delivery
challan (+) GST and cess charged (-) Value of exempt supply of goods (if supplied
along with taxable goods under the same invoice)

(2) Where the goods are transported by road by

o the registered person as consignor or
o the recipient as consignee,
whether in
o his own conveyance, or
o a hired conveyance, or
o a public conveyance
he shall generate the e-way bill in FORM GST EWB-01 after furnishing information in
Part – B.

(2A) Where the goods are transported by

o railways, or
o air, or
o vessel,
the e-way bill shall be generated by the registered supplier/ recipient
who shall furnish the information in FORM GST EWB-01 (Part – B)
either before or after the commencement of movement of the goods.
However, in case the goods are transported by railways,
the goods shall not be delivered unless
the e-way bill is produced at the time of delivery.

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NOTE: Transportation by railways does not include cases where leasing of parcel space by
Railways takes place.

(3) In case the e-way bill is not generated as above

and the goods are handed over for transportation by road,
the registered person shall furnish the information of the transporter on the common
portal
and the transporter shall generate the e-way bill
on the basis of information furnished by the registered person in FORM GST EWB-01
(Part – A).
Moreover, the transporter/ registered person may
generate and carry the e-way bill
even if the value of consignment < ₹ 50,000.
Further, where the movement is caused by an un-registered person
o in his own conveyance, or
o in a hired conveyance, or
o through a transporter,
he or the transporter may generate the e-way bill at their option.
Also, in the following case, the supplier/ recipient/ transporter may not furnish the
details of conveyance in FORM GST EWB-01 (Part – B)
STATE/ UT A

Consignor Distance ≤ 50 km Transporter

NOTE:
1. SUPPLIER RECIPIENT MOVEMENT IS SAID TO BE CAUSED BY
Un-registered Registered Recipient
Condition: The recipient is known at the time of commencement of the
movement
2. The e-way bill shall not be valid for movement of goods by road
unless FORM GST EWB-01 (Part – B) is furnished
except for the cases of distance ≤ 50 km under (3) and (5).

(4) Upon generation of the e-way bill, a unique EBN shall be made available to
(a) the supplier,
(b) the transporter and
(c) the recipient

(5) In case the goods are transferred from one conveyance to another
(a) the consignor/ consignee who furnished FORM GST EWB-01 (Part – A) or
(b) the transporter
shall update the details of conveyance in FORM GST EWB-01
before such transfer and further movement.
However, in the following case, the details of conveyance may not be updated in the
e-way bill
STATE/ UT A

Distance ≤ 50 km
Transporter Consignee

(5A) The consignor/ consignee who furnished FORM GST EWB-01 (Part – A),
or the transporter
may assign the EBN to another registered/ enrolled transporter

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for updating FORM GST EWB-01 (Part – B)

for further movement of the consignment.
Further, once the details in FORM GST EWB-01 (Part - B) have been updated by the
transporter,
the said consignor/ consignee shall not assign the EBN to another transporter.

(6) After e-way bill has been generated as per (1) above,
in case multiple consignments are intended to be transported in one conveyance,
the transporter may indicate the serial numbers of the e-way bills generated for each
consignment and generate a consolidated e-way bill in FORM GST EWB-02
before the movement of the goods.

(7) In case the consignor/ consignee has not generated FORM GST EWB-01
and the aggregate value of consignment in the conveyance > ₹ 50,000,
the transporter, except in case of transportation by
o railways,
o air or
o vessel
shall generate FORM GST EWB-01
in case of inter-state supply
on the basis of invoice/ BoS/ delivery challan
and may also generate FORM GST EWB-02
before the movement of the goods.
However, in case such goods are supplied through
o an e-commerce operator or
o a courier agency
FORM GST EWB-01 (Part – A) may be furnished by such operator/ courier agency.

(8) The information furnished in FORM GST EWB-01 (Part – A) shall be made available to
the registered supplier who may utilize the same for furnishing FORM GSTR – 1.
In case such information is furnished by an unregistered supplier/ recipient in FORM
GST EWB-01, he shall be informed, if the mobile no. or the e-mail ID is available.

(9) Where an e-way bill has been generated, but goods are either
o not transported, or
o not transported as per the details furnished in the e-way bill,
the e-way bill may be cancelled within 24 hrs. of generation.
However, it cannot be so cancelled if it has been verified in transit as per Rule 138B
Also, the unique no. generated under (1) above shall be valid for 15 days for updation
of FORM GST EWB-01 (Part – B)

(10) An (consolidated) e-way bill generated under this rule shall be valid for the following
periods from the relevant date:
Distance Validity Period
ODC Other than ODC
or MMS (in which at or MMS (in which at least
least one leg involves one leg involves transport
transport by ship) by ship)
Upto 20 km Upto 100 km 1 day
For every additional 20 For every additional 100 1 additional day
km or part thereof km or part thereof
However, The Commissioner may extend the validity period of certain notified
categories of goods.

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• In case the goods cannot be transported within the validity period of the e-way bill
under exceptional circumstances, including transhipment,
the transporter may extend the validity period of the e-way bill
after updating the details in FORM GST EWB-01 (Part – B)
• The validity of the e-way bill may be extended within 8 hrs. from the time of its
expiry.

NOTE:
o “Relevant date” means the date on which the e-way bill has been generated
o Period of validity shall be counted from the time of generation
o Each day shall be counted as period expiring at midnight of the day
immediately following the date of generation.

(11) The details of e-way bill shall be made available to –

(a) The supplier –
▪ If he is registered and
▪ If FORM GST EWB-01 (Part – A) has been furnished by the recipient/
transporter, or
(b) The recipient –
▪ If he is registered and
▪ If FORM GST EWB-01 (Part – A) has been furnished by the supplier/
transporter.
and he shall communicate his acceptance/ rejection of the consignment covered by
the e-way bill.

(12) In case no such acceptance/ rejection is communicated within 72 hrs. of

o the details being made available or
o the time of delivery of goods
whichever is earlier,
it shall be deemed to have been accepted.

(13) The e-way bill generated shall be valid in every state and UT.

(14) Overruling this rule, no e-way bill is required to be generated in case–

(a) of following goods –
▪ LPG supplied to household and NDEC customers
▪ Kerosene oil sold under PDS
▪ Postal baggage transported by Deptt. of Posts
▪ Pearls, precious stones and precious metals
▪ Jewellery, goldsmiths’ and silversmiths’ wares and articles
▪ Currency
▪ Used personal and household effects
▪ Coral
(b) goods are transported by a non-motorized conveyance,
(c) goods are transported from
▪ port
▪ airport
▪ air cargo complex
▪ land customs station
to an ICD/ CFS for clearance by Customs
(d) of movement of goods within notified areas of the state.
(e) goods are exempt, except de-oiled cake
(f) of
▪ alcohol for human consumption,
▪ petrol (motor spirit)
▪ aviation turbine fuel

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▪ natural gas
▪ crude oil
▪ high speed diesel, and
(g) goods transported are treated as no supply under Sch. III to the CGSTA, 2017.
(h) goods are transported –
1. under customs bond
from an ICD/ CFS to a
➢ customs port
➢ customs airport
➢ air cargo complex
➢ land customs station
or from one customs station/ port to another, or
2. under customs supervision/ seal
(i) of transit cargo from/ to Nepal/ Bhutan
(j) goods are exempt under Notfn. No. 07/2017 – CT(R) and 26/2017 – CT(R)
(k) of movement of goods caused by defence formation under MoD as a
consignor/ consignee
(l) CG/ SG/ LA are the consignor of goods
to be transported by rail,
(m) of empty cargo containers, and
(n) goods are being transported as follows with delivery challan:

Consignor Distance ≤ 20 km Weighbridge

(o) empty cylinders for packing LPG are being moved for reasons other than
supply.

Briefly explain provisions related to e-way bill as per CGST Act, 2017 relating to:
(i) What is e-way bill and when it is being required?
(ii) What is the validity period?
[CS-Prof, Jun 2018]

The validity period specified for an e-way bill or a consolidated e-way bill under E-way
rules as specified in rule 138 for ...........
(A) distance upto 1 km—half day
(B) distance upto 10 km—1 day
(C) for every 100 km or part thereof thereafter—one additional day
(D) both (B) and (C) above
[CS-Exec, Dec 2018]

(C) for every 100 km or part thereof thereafter—one additional day

When is an e-way bill required to be generated?

[CA-Final, May 2019]

Happy Company is a registered supplier of electric goods. It has three stores for electric
goods in Jodhpur (Rajasthan) namely Ram Store, Shyam Store, Mohan Store. It receives an
order for supply of electric goods worth ₹ 1,40,000 (exclusive of GST @ 18%) from Kishan
Sons of Bhopal (Madhya Pradesh). Happy Company found that order worth ₹ 43,000 can
be fulfilled from the company’s Ram Store, order worth ₹ 45,000 can be fulfilled from its
Shyam Store and remaining goods worth ₹ 52,000 can be sent from its Mohan Store. All
three stores are instructed to issue separate invoices for the goods sent to Kishan Sons. The
goods are transported to Kishan Sons in Bhopal in a single conveyance owned by Shiv
Transporters.

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You are required to advise Happy Company with regard to issuance of e-way bills as per
the provisions of the CGST Act, 2017.
[CA-Final, May 2019]

Circular No. 61/ 35/2018-GST

E-way bill in case of storing of goods in godown of transporter

3. As per rule 138 of the CGST Rules, e-way bill is a document which is required for the
movement of goods from the supplier’s place of business to the recipient taxpayer’s
place of business. Therefore, the goods in movement including when they are stored
in the transporter's godown (even if the godown is located in the recipient taxpayer’s
city/ town) prior to delivery shall always be accompanied by a valid e-way bill.

4. Further, section 2(85) of the CGST Act defines the “place of business” to include “a
place from where the business is ordinarily carried out, and includes a warehouse, a
godown or any other place where a taxable person stores his goods, supplies or
receives goods or services or both”. An additional place of business is the place of
business from where taxpayer carries out business related activities within the State,
in addition to the principal place of business.

5. Thus, in case the consignee/ recipient taxpayer stores his goods in the godown of the
transporter, then the transporter’s godown has to be declared as an additional place
of business by the recipient taxpayer. In such cases, mere declaration by the
recipient taxpayer to this effect with the concurrence of the transporter in the said
declaration will suffice. Where the transporter’s godown has been declared as the
additional place of business by the recipient taxpayer, the transportation under the
e-way bill shall be deemed to be concluded once the goods have reached the
transporter’s godown (recipient taxpayer’ additional place of business). Hence, e-
way bill validity in such cases will not be required to be extended.

6. Further, whenever the goods are transported from the transporters’ godown, which
has been declared as the additional place of business of the recipient taxpayer, to
any other premises of the recipient taxpayer then, the relevant provisions of the e-
way bill rules shall apply. Hence, whenever the goods move from the transporter’s
godown (i.e, recipient taxpayer’s additional place of business) to the recipient
taxpayer’s any other place of business, a valid e-way bill shall be required, as per the
extant State-specific e-way bill rules.

7. Further, the obligation of the transporter to maintain accounts and records as

specified in section 35 of the CGST Act read with rule 58 of the CGST Rules shall
continue as a warehouse-keeper. Furthermore, the recipient taxpayer shall also
maintain accounts and records as required under rules 56 and 57 of the CGST Rules.
Furthermore, as per rule 56 (7) of the CGST Rules, books of accounts in relation to
goods stored at the transporter’s godown (i.e., the recipient taxpayer’s additional
place of business) by the recipient taxpayer may be maintained by him at his
principal place of business. It may be noted that the facility of declaring additional
place of business by the recipient taxpayer is in no way putting any additional
compliance requirement on the transporters.

(1) The PIC of a conveyance shall carry –

(a) The invoice/ BoS/ Delivery Challan, and
(b) A copy of the e-way bill or
the EBN

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▪ in electronic form or
▪ mapped to a RFID embedded on to the conveyance
However, (b) shall not apply in case of rail, air or vessel.
Moreover, in case of imported goods, the PIC shall also carry a copy of BoEn filed by
the importer and shall indicate the no. and date of the same in FORM GST EWB-01
(Part – A).

(2) A registered person may obtain an Invoice Ref. No. by uploading a tax invoice in
FORM GST INV-1, which shall be valid for 30 days, and produce the same for
verification by the PO in lieu of the tax invoice.

(3) Where the invoice is so uploaded by the registered person, the information in FORM
GST EWB-01 (Part – A) shall be auto-populated on the basis of FORM GST INV-1

(4) The Commissioner may notify a class of transporters to obtain and embed a unique
RFID on to the conveyance and map the e-way bill to the RFID prior to the
movement of goods.

(5) Overruling sub-rule (1)(b), the Commissioner may notify that the PIC of the
conveyance shall carry the following documents instead of the e-way bill –
(a) Tax invoice/ BoS/ BoEn, or
(b) Delivery Challan, for goods being transported for reasons other than supply.

The PIC of a conveyance shall carry a copy of the tax invoice/ BoS
in case he is not required to carry an e-way bill.

(1) The Commissioner or any other empowered officer may authorise the PO to
intercept any conveyance to verify the e-way bill in physical/ electronic form for all
inter-state and intra-state movement of goods.

(2) The Commissioner shall get RFID readers installed at places where the verification of
movement of goods is required to be carried out and the verification shall be done
through such device readers where the e-way bill has been mapped with the said
device.

(3) The physical verification of conveyances shall be carried out by an authorized PO or

an officer empowered by him.
However, on receipt of specific information on evasion of tax, physical verification of
a specific conveyance can also be carried out by any officer after obtaining prior
approval of the Commissioner or an authorized officer.

1. A summary report of every inspection of goods in transit shall be recorded by the PO

in FORM GST EWB-03 (Part – A) within 24 hrs., and the final report in FORM GST
EWB-03 (Part – B) within 3 days of such inspection.
However, the Commissioner or any other authorized officer may extend the time for
recording final report in FORM GST EWB-03 (Part – B), for a further period not
exceeding 3 days, for appropriate circumstances.

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NOTE: The period of 24 hrs. or 3 days shall be counted from the midnight of the date on
which the vehicle was intercepted.

2. Where the physical verification of goods being transported on any conveyance has
been done during transit at one place, no further physical verification shall be carried
out in that State/ UT unless a specific information relating to tax evasion is received
subsequently.

Circular No.: 41/ 15/2018-GST

Procedure for interception of conveyances for inspection of goods in movement, and
detention, release and confiscation of such goods and conveyances

(a) The jurisdictional Commissioner or an officer authorised by him for this purpose
shall, by an order, designate an officer/ officers as the proper officer/ officers to
conduct interception and inspection of conveyances and goods in the
jurisdictional area specified in such order.
(b) The proper officer, empowered to intercept and inspect a conveyance, may
intercept any conveyance for verification of documents and/ or inspection of
goods. On being intercepted, the person in charge of the conveyance shall
produce the documents related to the goods and the conveyance. The proper
officer shall verify such documents and where, prima facie, no discrepancies are
found, the conveyance shall be allowed to move further. An e-way bill number
may be available with the person in charge of the conveyance or in the form of a
printout, SMS or it may be written on an invoice. All these forms of having an e-
way bill are valid. Wherever a facility exists to verify the e-way bill electronically,
the same shall be so verified, either by logging on to http:/ /
mis.ewaybillgst.gov.in or the Mobile App or through SMS by sending EWBVER
<EWB_NO> to the mobile number 77382 99899 (For e.g. EWBVER 120100231897).
(c) For the purposes of verification of the e-way bill, interception and inspection of
the conveyance and/ or goods, the proper officer under rule 138B of the CGST
Rules shall be the officer who has been assigned the functions under sub-section
(3) of section 68 of the CGST Act vide Circular No. 3/ 3/2017 – GST, dated
05.07.2017.
(d) Where the person in charge of the conveyance fails to produce any prescribed
document or where the proper officer intends to undertake an inspection, he
shall record a statement of the person in charge of the conveyance in FORM GST
MOV-01. In addition, the proper officer shall issue an order for physical
verification/ inspection of the conveyance, goods and documents in FORM GST
MOV-02, requiring the person in charge of the conveyance to station the
conveyance at the place mentioned in such order and allow the inspection of the
goods. The proper officer shall, within twenty-four hours of the aforementioned
issuance of FORM GST MOV-02, prepare a report in Part A of FORM GST EWB-
03 and upload the same on the common portal.
(e) Within a period of three days from the date of issue of the order in FORM GST
MOV-02, the proper officer shall conclude the inspection proceedings, either by
himself or through any other proper officer authorised in this behalf. Where
circumstances warrant such time to be extended, he shall obtain a written
permission in FORM GST MOV-03 from the Commissioner or an officer
authorized by him, for extension of time beyond three working days and a copy
of the order of extension shall be served on the person in charge of the
conveyance.
(f) On completion of the physical verification/ inspection of the conveyance and the
goods in movement, the proper officer shall prepare a report of such physical
verification in FORM GST MOV-04 and serve a copy of the said report to the
person in charge of the goods and conveyance. The proper officer shall also

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record, on the common portal, the final report of the inspection in Part B of FORM
GST EWB-03 within three days of such physical verification/ inspection.
(g) Where no discrepancies are found after the inspection of the goods and
conveyance, the proper officer shall issue forthwith a release order in FORM GST
MOV-05 and allow the conveyance to move further. Where the proper officer is
of the opinion that the goods and conveyance need to be detained under section
129 of the CGST Act, he shall issue an order of detention in FORM GST MOV-06
and a notice in FORM GST MOV-07 in accordance with the provisions of sub-
section (3) of section 129 of the CGST Act, specifying the tax and penalty payable.
The said notice shall be served on the person in charge of the conveyance.
(h) Where the owner of the goods or any person authorized by him comes forward
to make the payment of tax and penalty as applicable under clause (a) of sub-
section (1) of section 129 of the CGST Act, or where the owner of the goods does
not come forward to make the payment of tax and penalty as applicable under
clause (b) of sub-section (1) of the said section, the proper officer shall, after the
amount of tax and penalty has been paid in accordance with the provisions of the
CGST Act and the CGST Rules, release the goods and conveyance by an order in
FORM GST MOV-05. Further, the order in FORM GST MOV-09 shall be uploaded
on the common portal and the demand accruing from the proceedings shall be
added in the electronic liability register and the payment made shall be credited
to such electronic liability register by debiting the electronic cash ledger or the
electronic credit ledger of the concerned person in accordance with the
provisions of section 49 of the CGST Act.
(i) Where the owner of the goods, or the person authorized by him, or any person
other than the owner of the goods comes forward to get the goods and the
conveyance released by furnishing a security under clause (c) of sub-section (1)
of section 129 of the CGST Act, the goods and the conveyance shall be released,
by an order in FORM GST MOV-05, after obtaining a bond in FORM GST MOV-
08 along with a security in the form of bank guarantee equal to the amount
payable under clause (a) or clause (b) of sub-section (1) of section 129 of the
CGST Act. The finalisation of the proceedings under section 129 of the CGST Act
shall be taken up on priority by the officer concerned and the security provided
may be adjusted against the demand arising from such proceedings.
(j) Where any objections are filed against the proposed amount of tax and penalty
payable, the proper officer shall consider such objections and thereafter, pass a
speaking order in FORM GST MOV-09, quantifying the tax and penalty payable.
On payment of such tax and penalty, the goods and conveyance shall be
released forthwith by an order in FORM GST MOV-05. The order in FORM GST
MOV-09 shall be uploaded on the common portal and the demand accruing
from the order shall be added in the electronic liability register and, upon
payment of the demand, such register shall be credited by either debiting the
electronic cash ledger or the electronic credit ledger of the concerned person in
accordance with the provisions of section 49 of the CGST Act.
(k) In case the proposed tax and penalty are not paid within fourteen days from the
date of the issue of the order of detention in FORM GST MOV-06, the action
under section 130 of the CGST Act shall be initiated by serving a notice in FORM
GST MOV-10, proposing confiscation of the goods and conveyance and
imposition of penalty.
(l) Where the proper officer is of the opinion that such movement of goods is being
effected to evade payment of tax, he may directly invoke section 130 of the CGST
Act by issuing a notice proposing to confiscate the goods and conveyance in
FORM GST MOV-10. In the said notice, the quantum of tax and penalty leviable
under section 130 of the CGST Act read with section 122 of the CGST Act, and the
fine in lieu of confiscation leviable under sub-section (2) of section 130 of the
CGST Act shall be specified. Where the conveyance is used for the carriage of
goods or passengers for hire, the owner of the conveyance shall also be issued a
notice under the third proviso to sub-section (2) of section 130 of the CGST Act,

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proposing to impose a fine equal to the tax payable on the goods being
transported in lieu of confiscation of the conveyance.
(m) No order for confiscation of goods or conveyance, or for imposition of penalty,
shall be issued without giving the person an opportunity of being heard.
(n) An order of confiscation of goods shall be passed in FORM GST MOV-11, after
taking into consideration the objections filed by the person in charge of the goods
(owner or his representative), and the same shall be served on the person
concerned. Once the order of confiscation is passed, the title of such goods shall
stand transferred to the Central Government. In the said order, a suitable time not
exceeding three months shall be offered to make the payment of tax, penalty and
fine imposed in lieu of confiscation and get the goods released. The order in
FORM GST MOV-11 shall be uploaded on the common portal and the demand
accruing from the order shall be added in the electronic liability register and,
upon payment of the demand, such register shall be credited by either debiting
the electronic cash ledger or the electronic credit ledger of the concerned person
in accordance with the provisions of section 49 of the CGST Act. Once an order
of confiscation of goods is passed in FORM GST MOV-11, the order in FORM GST
MOV-09 passed earlier with respect to the said goods shall be withdrawn.
(o) An order of confiscation of conveyance shall be passed in FORM GST MOV-11,
after taking into consideration the objections filed by the person in charge of the
conveyance and the same shall be served on the person concerned. Once the
order of confiscation is passed, the title of such conveyance shall stand
transferred to the Central Government. In the order passed above, a suitable time
not exceeding three months shall be offered to make the payment of penalty and
fines imposed in lieu of confiscation and get the conveyance released. The order
in FORM GST MOV-11 shall be uploaded on the common portal and the demand
accruing from the order shall be added in the electronic liability register and,
upon payment of the demand, such register shall be credited by either debiting
the electronic cash ledger or the electronic credit ledger of the concerned person
in accordance with the provisions of section 49 of the CGST Act.
(p) The order referred to in clauses (n) and (o) above may be passed as a common
order in the said FORM GST MOV-11.
(q) In case neither the owner of the goods nor any person other than the owner of
the goods comes forward to make the payment of tax, penalty and fine imposed
and get the goods or conveyance released within the time specified in FORM GST
MOV-11, the proper officer shall auction the goods and/ or conveyance by a
public auction and remit the sale proceeds to the account of the Central
Government.
(r) Suitable modifications in the time allowed for the service of notice or order for
auction or disposal shall be done in case of perishable and/ or hazardous goods.
(s) Whenever an order or proceedings under the CGST Act is passed by the proper
officer, a corresponding order or proceedings shall be passed by him under the
respective State or Union Territory GST Act and if applicable, under the Goods
and Services Tax (Compensations to States) Act, 2017. Further, sub-sections (3)
and (4) of section 79 of the CGST Act/ respective State GST Acts may be referred
to in case of recovery of arrears of central tax/ State tax/ Union territory tax.
(t) The procedure narrated above shall be applicable mutatis mutandis for an order
or proceeding under the IGST Act, 2017.
(u) Demand of any tax, penalty, fine or other charges shall be added in the electronic
liability ledger of the person concerned. Where no electronic liability ledger is
available in case of an unregistered person, a temporary ID shall be created by
the proper officer on the common portal and the liability shall be created therein.
He shall also credit the payments made towards such demands of tax, penalty or
fine and other charges by debiting the electronic cash ledger of the concerned
person.
(v) A summary of every order in FORM GST MOV-09 and FORM GST MOV-11 shall
be uploaded electronically in FORM GST-DRC-07 on the common portal.

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Where a vehicle has been intercepted and detained for more than 30 min, the transporter
may upload the information regarding the detention of vehicle in FORM GST EWB-04.

Overruling 138(1), no person (including a consignor/ consignee/ transporter/ e-commerce

operator/ courier agency) shall be allowed to furnish the information in FORM GST EWB – 01
(Part – A) in respect of a registered supplier/ recipient, who –
(a) being a person paying tax u/s 10 or availing the benefit of Notfn. No.: 02/2019 – CT(R)
– has not furnished statement in FORM GST CMP – 08 for 2 consecutive quarters, or
(b) being a person other than specified above – has not furnished the returns for a
consecutive period of 2 months.
However, the Commissioner may on receipt of an application from a registered person in
FORM GST EWB – 05, allow furnishing of the said information subject to conditions and
restrictions specified by him by an order in FORM GST EWB – 06, on sufficient cause being
shown.
Moreover, the request of such person to furnish the information shall not be rejected without
affording him a reasonable opportunity of being heard.
Also, the permission granted/ rejected by the Commissioner of State Tax or Commission of
UT Tax shall be deemed to be granted/ rejected by the jurisdictional Commissioner of
Central Tax.

• PO [Sec. 2(91) of CGSTA]: in relation to any function to be performed under this Act,
means the Commissioner or the officer of the central tax who is assigned that
function by the Commissioner in the Board.

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CGSTA, 2017
• Section 12: Time of Supply of Goods
• Section 13: Time of Supply of Services
• Section 14: Change in Rate of Tax in Respect of Supply of Goods/ Services

Earliest of
Invoice Payment

Actual Date Last Date of Received* by

of Issue Issue the Supplier

• Supply shall be deemed to have been made to the extent it is covered by the invoice/
payment.
• Where the supplier of taxable goods
receives up to ₹ 1,000 in excess of the amount invoiced,
he may opt that
the time of supply of such excess shall be
the date of issue of invoice for the said amount.

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Notfn. No.: 66/2017 - CT

The registered persons who did not opt for the composition levy shall pay the CGST on
outward supply of goods at the actual/ last date of issue of invoice, including in the
situations attracting section 14 of the CGSTA. Thus, no GST is payable on advances received
on supply of goods.

M/s Mansh & Vansh Trading Company, a registered supplier, is liable to pay GST under
forward charge. Determine the time of supply from the following information furnished by
it:
(i) Goods were supplied on 03-10-2017
(ii) Invoice was issued on 05-10-2017
(iii) Payment received on 09-10-2017
[CA-Inter, May 2018]

Time of Supply = 03-10-2017

Mr. Ram supplied goods to Mr. Laxman. The invoice is dated 30-07-2017. Payment was
received for the supply on 30-10-2017. The goods were dispatched on 05-08-2017. What is
time of supply under CGST Act?
(A) 05-08-2017
(B) 30-07-2017
(C) 30-10-2017
(D) None of the above
[CS-Exec, Dec 2017]

(B) 30-07-2017

R, a manufacturer of machines (having a turnover of more than ₹ 1.5 crore) received an

advance of ₹ 1,20,000 along with the purchase order on 15.10.2017 for supply of machine X
for ₹ 20,00,000 to be manufactured according to the specifications. Advance payment
was entered in the books of account on 16.10.2017 and credited in his bank account
18.10.2017. The machine is manufactured and after approval has been delivered to the
buyer on 25.10.2017 and the invoice was raised at the time of removal. The balance
payment of 18,80,000 was received on 15.11.2017 which was recorded in the books of
accounts of R on the same date and was credited in his bank on 17.11.2017.
Determine time of supply.
[CMA-Inter, Jun 2018]

For ₹ 1,20,000 – 15.10.2017

For ₹ 18,80,000 – 25.10.2017

R issues an invoice of ₹ 64,100 for supply of goods 10.10.2017 and received ₹ 65,000 in his
bank through RTGS on the same date which was credited in his books of account on
11.10.2017 on receipt of intimation from the bank.
[CMA-Inter, Jun 2018]

For ₹ 64,100 – 10.10.2017

For ₹ 900 – 10.10.2017 or the date of issue of subsequent invoice (as R may opt)

Chiku Traders is a registered supplier of plastic goods. On 10th April, 2018, Chiku Traders
received an order from Neelu Traders for supply of a consignment of plastic goods. Chiku
Traders gets the consignment ready by 15th April, 2018. The invoice for the consignment
was issued the next day, 16th April, 2018. Neelu Traders collects the consignment from the
godown of Chiku Traders on 25th April, 2018 and hands over the cheque towards payment

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on the same date. The said payment is entered in the books of accounts of Chiku Traders on
26th April, 2018 and amount is credited in their bank account on 27th April, 2018.
Determine the time of supply of the plastic goods supplied by Chiku Traders to Neelu
Traders as per the provisions of CGST Act, 2017.
[CA-Final, Nov 2018]

16 April 2018

In case of reverse charge

Earliest of
Goods Payment Invoice

Date of Entered in the Debited from 30 days from

Receipt books of the the account of the issue date
Recipient the Recipient

OR
If the time of supply cannot be determined under any of
the above clauses
Date of Entry in the books of the Recipient

In case of supply of vouchers

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Supply of voucher All other cases

is identifiable

Date of issue of Date of redemption

voucher of voucher

In all other cases

Periodical return
has to be filed All other cases

Actual date of Date on which

filing the return tax is paid
In case of interest/ late fee/ penalty for delayed payment
the time of supply shall be
the date on which the supplier receives such additional payment

(2)

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Earliest of
Invoice issued Invoice not Any
within time issued within other
limit time limit case

Receipt* Receipt* Recipient

Issue of of Provision of shows the
Invoice of Service receipt in
Payment Payment
his books

• Supply shall be deemed to have been made to the extent it is covered by the invoice/
payment.
• Where the supplier of taxable services
receives up to ₹ 1,000 in excess of the amount invoiced,
he may opt that
the time of supply of such excess shall be
the date of issue of invoice for the said amount.

Determine the time of supply from the following particulars:

8th September Community hall booked for a marriage, Sum agreed ₹ 1,20,00,
Advance ₹ 20,000 recorded in the books of account
10th September Advance amount credited in bank account
2nd November Marriage held in the Community hall
18th December Invoice issued for ₹ 1,20,000 indicating the balance of ₹ 1,00,000
payable
22nd December Balance ₹ 1,00,000 recorded in the books of account
24th December Payment ₹ 1,00,000 credited to the bank account
[CA-Final, May 2018]

Determination of Time of Supply

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Particulars For advance ₹ 20,000 For balance ₹ 1,00,000

Date of provision of service 2nd November 2nd November
Date of entry in books 8th September 22nd December
Date of crediting in the bank 10th September 24th December
Time of Supply 8th September 2nd November

Harivallabh, a registered supplier, rendered taxable service for ₹ 2 lakhs on 1-11-2017. The
tax invoice was raised on 9-12-2017. Payment was received the next day. Ascertain the
time of supply for GST purposes.
[CS-Prof, Jun 2018]

Time of Supply = 01-11-2017

M/s XYZ & Co., a firm of Chartered Accountants, issued invoice for services rendered to Mr.
A on 7th September, 2017. Determine the Time of Supply in the following independent cases:
(1) The provision of service was completed on 1st August, 2017.
(2) The provision of service was completed on 14th August, 2017.
(3) Mr. A made the payment on 3rd August, 2017 where provision of service was
remaining to be completed.
(4) Mr. A made the payment on 15th September, 2017 where provision of service was
remaining to be completed.
[CA-IPCE, Nov 2018]

(1) 1st August, 2017

(2) 7th September, 2017
(3) 3rd August, 2017
(4) 7th September, 2017

(3) In case of reverse charge

Earliest of
Payment Invoice
Entered in the Debited from
60 days from
books of the the account of
the issue date
Recipient the Recipient

OR
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If the time of supply cannot be determined under any of

the above clauses
Date of Entry in the books of the Recipient

On 4th September, 2017, V. R. Mehman a famous music composer, received ₹ 3 crores of

consideration from Zilmil Music Co. Ltd. for sale of copyright of his original music album.
He finished his work & made available the CD to the music company on 20th July, 2017 &
raised the invoice on 24th July, 2017. What will be the time of supply as per CGST Act, 2017?
Note: Above service is taxable under reverse charge basis.
[CA-IPCE, May 2018]
Earlier of –
The date of payment = 4 September, 2017 or
60 days from the date of issue of invoice = 22 September, 2017
Hence, 4th September, 2017 is the time of supply.

• Supplier = Associated Enterprise outside India

Earlier of
Entry in the books Date of Payment
of the Recipient
• Section 13(4) = Section 12(4)

• Section 13(5) = Section 12(5)

• Section 13(6) = Section 12(6)

Notfn. No.: 4/2018 – CT(R) and IT(R)

In case of a transaction between two registered persons,
where one transfers development rights to the other, who is a developer/ builder/
construction company etc., against whole or part consideration in the form of construction
of complex/ building/ civil structure, or vice versa,
the liability to pay GST shall arise at the time when the said developer/ builder/
construction company etc. transfers possession or the right in the constructed complex/
building/ civil structure to the person supplying the development rights
by entering into a conveyance deed or similar instrument like allotment letter.
This notification shall apply only to the development rights supplied before 01 April 2019.

Notfn. No.: 06/2019 – CT(R)

The CG has notified the following classes of registered persons –

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(i) a promoter who receives development rights or FSI (including additional FSI) on or
after 01 April 2019 for construction of a project against consideration payable or
paid by him, wholly or partly, in the form of construction service of commercial/
residential apartments in the project or in any other form including cash,
(ii) a promoter, who receives long term lease of land on or after 01 April 2019 for
construction of residential apartments in a project against consideration payable or
paid by him, in the form of upfront amount (called as premium, salami, cost, price,
development charges or by any other name),
as the registered persons in whose case the liability to pay CGST on –
(a) the consideration paid by him in the form of construction service of commercial/
residential apartments in the project, for supply of development rights or FSI
(including additional FSI),
(b) the monetary consideration paid by him, for supply of development rights or FSI
(including additional FSI) relatable to construction of residential apartments in
project,
(c) the upfront amount (called as premium, salami, cost, price, development charges or
by any other name) paid by him for long term lease of land relatable to construction
of residential apartments in the project and
(d) the supply of construction service by him against consideration in the form of
development rights or FSI (including additional FSI) –
shall arise on the date of issuance of completion certificate for the project, where required,
by the competent authority or on its first occupation, whichever is earlier.

NOTE: In the following figures:

o S = Date of supply of goods/ services
o P = Date of receipt of payment
o I = Date of issue of invoice
o Pillar of the scale = Date of change in rate of tax
o Time of Supply = The earlier of the weights kept on the side which is heavier.
However, S is a deadweight and therefore, can NEVER be the time of supply.
Hence, the time of supply will always be either P or I.

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• Overruling Section 12 and 13, the time of supply shall be determined as –

(a) When S is before the change in rate of tax

(i)

(ii)

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(iii)

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(b) When S is after the change in rate of tax

(i)

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GST Simplified™ Ready Reckoner for Students and Professionals

(ii)

(iii)

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NOTE: Date of Receipt of Payment

4 working days

Mr. Mahendra Sharma, an interior decorator registered at Ahmedabad (Gujarat), provided

service to one of his clients XYZ Company Ltd., registered at Pune (Maharashtra). The
provision of service was completed on 10-08-2018 and payment received was entered in
the books of Mr. Mahendra Sharma on 11-08-2018.
With effect from 16/08/2018, applicable GST rate was increased from 5% to 12%. However,
payment for the service received was credited in his bank account on 17/08/2018 and
invoice for the same was raised on 23-08-2018.
Mr. Mahendra Sharma claimed that he is liable to pay IGST @ 5%. But the department took
the view that he is liable to pay IGST @ 12%.
Examine the correctness of Mr. Mahendra Sharma’s contention and determine the time of
supply and applicable rate of tax as per the statutory provisions.
Would your answer undergo any change in the above case if the payment was credited to
the bank account on 14-08-2018 instead of 17-08-2018?
Note: You may assume that all days are working days
[CA-Final, Nov 2018]

The contention of Mr. Mahendra Sharma is correct and the time of supply is 11-08-2018.
No change.

The time of supply ‘‘where goods or services or both have been supplied in a situation
where the invoice issued before the change in the rate of tax but payment received after
the change in rate of tax’’ as per section 14 of the CGST Act, 2017 shall be:
(A) Date of issue of invoice
(B) Date of receipt of payment or the date of issue of invoice whichever is earlier
(C) Date of receipt of payment
(D) None of the above
[CS-Exec, Dec 2018]

(A) Date of issue of invoice

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• Associated Enterprises [Sec. 2(12) of CGSTA]: shall have the same meaning as
assigned to it in section 92A of the Income-tax Act, 1961.
• Voucher [Sec. 2(118) of CGSTA]: means an instrument where there is an obligation to
accept it as consideration or part consideration for a supply of goods or services or
both and where the goods or services or both to be supplied or the identities of their
potential suppliers are either indicated on the instrument itself or in related
documentation, including the terms and conditions of use of such instrument.

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CGSTA, 2017
• Section 15: Value of Taxable Supply

(1) Value of Supply = Transaction Value

Transaction Value = The price actually paid or payable for the said supply

Conditions:
o The supplier and the recipient of supply are NOT RELATED
o The price is the SOLE CONSIDERATION for the supply

Mr. A supplied NIL rated goods to Mr. B at a price of ₹ 1,00,000. What is the value of
supply?

₹ 1,00,000

(2) Inclusions:
(a) Any taxes, duties, cesses, fees and charges levied by laws other than CGSTA,
SGSTA, UTGSTA, IGSTA and GST(CS)A, if charged separately.
(b) Any amount incurred by the recipient, but which was liable to be paid by the
supplier and not included in the price.
(c) Incidental expenses charged, including commission and packing or anything
done before or at the time of delivery of goods/ supply of services.
(d) Interest or late fee or penalty for delayed payment.
(e) Subsidies directly linked to the price except the ones provided by CG or SG
NOTE: Subsidy to be included in the value of supply of the supplier who
receives the subsidy

Circular No. 102/21/2019-GST

Clarification regarding applicability of GST on additional/ penal interest

Various representations have been received from the trade and industry regarding
applicability of GST on delayed payment charges in case of late payment of Equated
Monthly Instalments (EMI). An EMI is a fixed amount paid by a borrower to a lender
at a specified date every calendar month. EMIs are used to pay off both interest and
principal every month, so that over a specified period, the loan is fully paid off along
with interest. In cases where the EMI is not paid at the scheduled time, there is a levy
of additional / penal interest on account of delay in payment of EMI.

2. Doubts have been raised regarding the applicability of GST on additional / penal
interest on the overdue loan i.e. whether it would be exempt from GST in terms of Sl.
No. 27 of notification No. 12/2017-Central Tax (Rate) dated 28th June 2017 or such
penal interest would be treated as consideration for liquidated damages [amounting
to a separate taxable supply of services under GST covered under entry 5(e) of
Schedule II of the Central Goods and Services Tax Act, 2017 (hereinafter referred to

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as the CGST Act) i.e. “agreeing to the obligation to refrain from an act, or to tolerate
an act or a situation, or to do an act”]. In order to ensure uniformity in the
implementation of the provisions of the law, the Board, in exercise of its powers
conferred by section 168 (1) of the CGST Act, hereby issues the following clarification.

3. Generally, following two transaction options involving EMI are prevalent in the trade
-
a. Case – 1: X sells a mobile phone to Y. The cost of mobile phone is ₹ 40,000/-
. However, X gives Y an option to pay in instalments, ₹ 11,000/- every month
before 10th day of the following month, over next four months (₹ 11,000/- × 4
= ₹ 44,000/- ). Further, as per the contract, if there is any delay in payment
by Y beyond the scheduled date, Y would be liable to pay additional / penal
interest amounting to ₹ 500/- per month for the delay. In some instances, X
is charging Y ₹ 40,000/- for the mobile and is separately issuing another
invoice for providing the services of extending loans to Y, the consideration
for which is the interest of 2.5% per month and an additional / penal interest
amounting to ₹ 500/- per month for each delay in payment.
b. Case – 2: X sells a mobile phone to Y. The cost of mobile phone is ₹
40,000/-. Y has the option to avail a loan at interest of 2.5% per month for
purchasing the mobile from M/s ABC Ltd. The terms of the loan from M/s
ABC Ltd. allows Y a period of four months to repay the loan and an additional
/ penal interest @ 1.25% per month for any delay in payment.

4. As per the provisions of sub-clause (d) of sub-section (2) of section 15 of the CGST
Act, the value of supply shall include “interest or late fee or penalty for delayed
payment of any consideration for any supply”. Further in terms of Sl. No. 27 of
notification No. 12/2017- Central Tax (Rate) dated the 28.06.2017 “services by way of
(a) extending deposits, loans or advances in so far as the consideration is
represented by way of interest or discount (other than interest involved in credit
card services)” is exempted. Further, as per clause 2 (zk) of the notification No.
12/2017-Central Tax (Rate) dated the 28th June, 2017, “‘interest’ means interest
payable in any manner in respect of any moneys borrowed or debt incurred
(including a deposit, claim or other similar right or obligation) but does not include
any service fee or other charge in respect of the moneys borrowed or debt incurred
or in respect of any credit facility which has not been utilised;”.

5. Accordingly, based on the above provisions, the applicability of GST in both cases
listed in para 3 above would be as follows:
a. Case 1: As per the provisions of sub-clause (d) of sub-section (2) of section 15
of the CGST Act, the amount of penal interest is to be included in the value of
supply. The transaction between X and Y is for supply of taxable goods i.e.
mobile phone. Accordingly, the penal interest would be taxable as it would
be included in the value of the mobile, irrespective of the manner of
invoicing.
b. Case 2: The additional / penal interest is charged for a transaction between Y
and M/s ABC Ltd., and the same is getting covered under Sl. No. 27 of
notification No. 12/2017- Central Tax (Rate) dated 28.06.2017. Accordingly, in
this case the 'penal interest' charged thereon on a transaction between Y and
M/s ABC Ltd. would not be subject to GST, as the same would not be
covered under notification No. 12/2017-Central Tax (Rate) dated 28.06.2017.
The value of supply of mobile by X to Y would be ₹ 40,000/- for the purpose
of levy of GST.

6. It is further clarified that the transaction of levy of additional / penal interest does not
fall within the ambit of entry 5(e) of Schedule II of the CGST Act i.e. “agreeing to the
obligation to refrain from an act, or to tolerate an act or a situation, or to do an act”,

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as this levy of additional / penal interest satisfies the definition of “interest” as

contained in notification No. 12/2017- Central Tax (Rate) dated 28.06.2017. It is
further clarified that any service fee/charge or any other charges that are levied by
M/s ABC Ltd. in respect of the transaction related to extending deposits, loans or
advances does not qualify to be interest as defined in notification No. 12/2017-
Central Tax (Rate) dated 28.06.2017, and accordingly will not be exempt.

MR. A supplied a car to MR. B at an all-inclusive price of ₹ 5,00,000. The infrastructure

cess levied on this car is @ 1%, which MR. A charged separately in the invoice. The car
stereo was not available with MR. A at the moment. MR. B had good contacts at Sony
India, so he asked MR. A to reduce the price with ₹ 10,000 and he will purchase the same
from Sony itself. MR. A did the same. MR. A also charged ₹ 1,000 for decorating the car
with flowers and gift wrapping with satin ribbons. In order to promote small dealers of the
state, The State Government grants subsidy of ₹ 50,000 directly linked to the price, to MR.
A on the sale of this type of car. This subsidy has not been considered while calculating the
all-inclusive price for MR. B. What is the value of supply if the GST rate for this car is 28%?

Particulars Amount (₹)

Total consideration received 5,00,000.00
Less: Infrastructure cess @ 1% -
Less: Amount incurred by Mr. B for stereo (first less then add back) -
Less: Car decoration charges -
Less: State Government subsidy (50,000.00)
Amount inclusive of GST 4,50,000.00
Less: GST charged {(4,50,000.00 X 28)/ 128} (Rule 35) (98,437.50)
Value of Supply 3,51,562.50

Determine the value of supply and the GST liability, to be collected and paid by the owner,
with the following particulars
Particulars Amount (₹)
Rent on the commercial building 18,00,000
Maintenance charges collected by local society from the owner and 2,50,000
reimbursed by the tenant
Owner intends to charge GST on refundable advance, as GST is applicable 6,00,000
on advance
Municipal taxes paid by the owner 3,00,000
GST rates applicable on renting of business premises is as follows
CGST 9%
SGST 9%
Provide suitable explanations where required.
[CA-Final, May 2018]

Particulars Amount (₹)

Rent on the commercial building 18,00,000
Add: Maintenance charges 2.50,000
Add: Refundable advance -
Add: Municipal taxes 3,00,000
Value of taxable supply 23,50,000
CGST (9%) 2,11,500
SGST (9%) 2,11,500
Total 27,73,000

Shri Krishna Pvt. Ltd., a registered dealer, furnishes the following information relating to
goods sold by it to Shri Balram Pvt. Ltd. in the course of Intra State.
Particulars Amount (₹)

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(i) Price of the goods 1,00,000

(ii) Municipal Tax 2,000
(iii) Inspection charges 15,000
(iv) Subsidies received from Shri Ram Trust (As the products is going to 50,000
be used by blind association)
(v) Late fees for delayed payment. (Though Shri Balram Pvt. Ltd. made 1,000
late payment but these charges are waived by Shri Krishna Pvt. Ltd.)
(vi) Shri Balram Pvt. Ltd. paid to Radhe Pvt. Ltd. (on behalf of Shri 2,000
Krishna Pvt. Ltd.) weighment charges
According to GST Law, determine the value of taxable supply made by Shri Krishna Pvt.
Ltd. Items given in Point (ii) to (vi) are not considered while arriving at the price of the
goods given in point no. (i).
[CA-IPCE, May 2018]

Particulars Amount (₹)

Price of the goods 1,00,000
Add: Municipal Tax 2,000
Add: Inspection charges 15,000
Add: Subsidy received from Shri Ram Trust -
Add: Late fees for delayed payment 1,000
Add: Weighment charges 2,000
Value of taxable supply 1,20,000

Candy Blue Ltd., Mumbai, a registered supplier, is manufacturing Chocolates and Biscuits.
It provides the following details of taxable inter-state supply made by it for the month of
October 2017:
Particulars Amount in (₹)
(i) List price of goods supplied inter-state 12,40,000
Item already adjusted in the price given in (i) above:
(1) Subsidy from Central Government for supply of Biscuits to 1,20,000
Government School.
(2) Subsidy from Trade Association for supply of quality Biscuits 30,000
Items not adjusted in the price given in (i) above:
(3) Tax levied by Municipal Authority 24,000
(4) Packing charges 12,000
(5) Late fee paid by the recipient of supply for delayed Payment of 5,000
invoice
Calculate the Value of taxable supply made by M/s Candy Blue Ltd. for the month of
October 2017.
[CA-Inter, May 2018]

Particulars Amount (₹)

List price of the goods 12,40,000
Add: Tax levied by Municipal Authority 24,000
Add: Packing charges 12,000
Add: Late fees for delayed payment 5,000
Add: Subsidy from Trade Association 30,000
Value of taxable supply 13,11,000

Admission to True Theatre is ₹ 90 per ticket for a Tamil Movie as well as for a Hindi Movie
plus entertainment tax 10% on Tamil Movies and 20% on other languages. In the month of
November, True Theatre sold 2000 tickets of Tamil Movies and 1500 tickets of Hindi
Movies. Find the value of taxable supply of service. Applicable rate of GST 18% & 28%
respectively. Find the GST liability if any?
[CMA-Final, Jun 2018]

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Particulars Amount (₹) Amount (₹)

Tamil Hindi
No. of tickets sold 2,000 1,500
Ticket price 1,80,000 1,35,000
Add: Entertainment Tax 18,000 27,000
Value of taxable supply 2,00,000 1,63,500
GST 36,000 45,780

M/s Basu & Co., an Audit Firm based in Kolkata undertake an Audit assignment of a
Mumbai based client. The contract with the client includes ₹ 5,00,000 as audit fee and
arrangement of taxi for movement of auditors amounting to ₹ 15,000 actually spent by the
auditors and reimbursed by the client. Find out the transaction value in the hands of M/s
Basu & Co.
[CS-Prof, Dec 2018]

₹ 5,15,000

Subsidy given by the Central Government or a State Government while determining value
of taxable supply under Goods and Service Tax (GST) as per section 15 of the CGST Act,
2017:
(A) included in the transaction value i.e. (value of taxable supply)
(B) just ignored no treatment
(C) shall not be included in transaction value i.e. (value of taxable supply)
(D) deducted from the transaction value i.e. (value of taxable supply)
[CS-Exec, Dec 2018]

(D) shall not be included in transaction value i.e. (value of taxable supply)

(3) Exclusion:
Any discount given
(a) Before or at the time of supply if
▪ such discount is duly recorded in the invoice
(b) After the supply if
(i) such discount is established in an agreement entered into at or before
the time of supply and is specifically linked to relevant invoices.
(ii) ITC attributable to this discount has been reversed by the recipient of
supply

In the previous example, in order to build healthy relation with Mr. B, Mr. A further allowed
5% of discount at the time of supply. How will this impact the value of supply?

Particulars Amount (₹)

Amount before discount 4,50,000.00
Less: Discount @ 5% on ₹ 4,50,000.00 (22,500.00)
Amount inclusive of GST 4,27,500.00
Less: GST charged {(4,27,500.00 X 28)/ 128} (Rule 35) (93,515.63)
Value of Supply 3,33,984.37

Vayu Ltd. provides you the following particulars relating to goods supplied by it to Agni
Ltd.
Particulars Amount (₹)
List price of the goods (Exclusive of Taxes and discounts) 76,000
Special packing at the request of customer to be charged to the customer 5,000

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Duty levied by local authority on the sale of such goods 4,000

CGST and SGST charged in invoice 14,400
Subsidy received from a NGO (The price of ₹ 76,000 given above is after 5,000
considering the subsidy)
Vayu Ltd. offers 3% discount of the list price of the goods which is recorded in the invoice
for the goods.
Determine the value of taxable supplies made by Vayu Ltd.
[CA-Final, May 2018]

Particulars Amount (₹)

List price of the goods 76,000
Add: Special packing charges 5,000
Add: Duty levied by local authority 4,000
Add: Subsidy received from a NGO 5,000
Less: Discount (3% of ₹ 76,000) (2,280)
Value of taxable supply 87,720

Laxmi Ltd. of Bhopal (Madhya Pradesh) is a supplier of machinery. Laxmi Ltd. has supplied
machinery to PQR Enterprises in Indore (Madhya Pradesh) on 1st October, 2017. The invoice
for supply has been issued on 1st October, 2017. Thus, the time of supply of machinery is 1st
October, 2017. Laxmi Ltd. and PQR Enterprises are not related. Following information is
provided.
Basic price of machinery excluding all taxes but including design and engineering charges
of ₹ 10,000 and loading charges of ₹ 20,000 - ₹ 20,00,000.
Laxmi Ltd. provides 2 years free warranty for the machinery. Laxmi Ltd. also provides an
extended one year warranty on payment of additional charges of ₹ 1,00,000. PQR
Enterprises opted for one year warranty.
Laxmi Ltd. has collected consultancy charges in relation to pre-installation planning of ₹
10,000 and freight and insurance charges from place of removal to buyer's premises of ₹
20,000.
Laxmi Ltd. received subsidy of ₹ 50,000 from Central Government for supplying the
machinery to backward region since receiver was located in a backward region. Laxmi
Ltd. also received ₹ 50,000 from the joint venture partner of PQR Enterprises for making
timely supply of machinery to the recipient.
A cash discount of 1% on the basic price of the machinery is offered at the time of supply, if
PQR Enterprises agrees to make the payment within 30 days of the receipt of the
machinery at his premises. Discount @ 1% was given to PQR Enterprises as it agreed to
make the payment within 30 days.
The machinery attracts CGST and SGST@ 18% (9% + 9%) and IGST @ 18%.
Compute the CGST and SGST or IGST payable, as the case may be on the machinery.
[CA-Final, May 2018]

Particulars Amount (₹)

Basic price of machinery 20,00,000
Add: Additional warranty charges 1,00,000
Add: Consultancy charges 10,000
Add: Freight and insurance charges 20,000
Add: Subsidy from CG -
Add: Incentive received from JV partner of PQR enterprises 50,000
Less: Discount (1% of ₹ 20,00,000) (20,000)
Value of taxable supply 21,60,000
IGST (18%) 3,88,800

Which of the following though shown in Bill will not be included in determining the value of
supply for the purpose of GST?

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(A) Packing
(B) Discount
(C) Interest for late payment
(D) Installation charges
[CS-Exec, Dec 2017]

(B) Discount

From the following details pertaining to Ashwathama, a registered dealer engaged in

purchase and sale of goods, ascertain the GST liability (SGST/ CGST/ IGST) for the month
of November, 2017:
Particulars Amount (₹)
Sale price charged to customers within State (excluding GST) 12,50,000
Commission charged to buyers 12,000
Packing and forwarding expenses incidental to sale 18,000
Weighment charges, shown separately in invoices 9,500
Prompt payment discount, indicated in invoice 1%, if payment made
within 1 month. All buyers of goods have availed the discount
The rates of taxes for the goods supplied are as under:
Particulars Rate
CGST 9%
SGST 9%
IGST 18%

[CS-Prof, Jun 2018]

Particulars Amount (₹)

Sale price charged to customers 12,50,000
Add: Commission charged to buyers 12,000
Add: Packing and forwarding expenses incidental to sale 18,000
Add: Weighment charges, shown separately in invoices 9.500
Sub-total 12,89,500
Less: Discount (1% of ₹ 12,89,500) (12,895)
Value of taxable supply 12,76,605
CGST (9%) 1,14,894
SGST (9%) 1,14,894

RG Pvt. Ltd. provides the following particulars relating to goods sold by it to GK Pvt. Ltd.:
Particulars Amount in (₹)
List price of the goods (exclusive of taxes and discounts) 10,00,000
Tax levied by Municipal Authority in the sale of such goods 1,00,000
CGST and SGST chargeable on the goods 2,00,880
Packing charges (not included in price above) 20,000
RG Pvt. Ltd. received ₹ 40,000 as a subsidy from a NGO on sale of such goods. The price of
₹ 10,00,000 of the goods is after considering such subsidy.
RG Ltd. offers 2% discount on the list price of the goods which is recorded in the invoice for
the goods.
Determine the value of the taxable supply made by RG Pvt. Ltd.
[CMA-Inter, Jun 2018]

Calculation of Value of Supply

Particulars Amount in (₹)
List price of the goods 10,00,000
Add: Tax levied by Municipal Authority 1,00,000
Add: Packing charges 20,000

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Add: Subsidy received from NGO 40,000

Sub-total 11,60,000
Less: Discount (2% of ₹ 10,00,000) (20,000)
Value of taxable supply 11,40,000

Shankar Texmaco P Ltd. (STPL), having its registered office at Salem, Tamil Nadu, is a
manufacturer of dyeing machinery. It manufactures and installs the machinery at the
places opted by the buyers. For each machine manufactured and installed by it, STPL gets
a subsidy of ₹ 3 lakhs.
Poorni Dyers Ltd. (PDL), having their registered office at Coimbatore, Tamil Nadu have
ordered a machinery from STPL, to be erected at their place of manufacture at Palghat,
Kerala. The base price of the machine is ₹ 25 lakhs. For each machinery, there is a separate
handling charge of ₹ 50,000.
PDL have opted to take an additional warranty for ₹ 20,000 for an extended service
period of 1 year, in addition to the free warranty provided by STPL.
The installation costs of ₹ 80,000 charged by STPL, will be met by PDL.
STPL offers a cash discount of 2%, where the payment is made within a month. If the
payment is not so made, it not only recovers the discount earlier offered, but also charges
interest at 18% for the period of delay.
A machinery was supplied on 21st November, 2017, the tax invoice also being issued the
same day.
Ascertain the transaction value of the machine sold to MTL and the GST payable [SGST &
CGST or IGST] by STPL. You are further informed that MTL made the actual payment only
on 10th January, 2018.
You are informed that the GST rates applicable for the product as under:
SGST 6%
CGST 6%
IGST 12%
[CMA-Final, Jun 2018]

Calculation of Value of Supply

Particulars Amount in (₹)
Base price of the machine 25,00,000
Add: Handling charge 50,000
Add: Additional warranty 20,000
Add: Installation costs 80,000
Sub-total 26,50,000
Less: Discount (2% of ₹ 26,50,000) (53,000)
Value of taxable supply 25,97,000
IGST (12% of ₹ 25,97,000) 3,11,640
Total 29,08,640
Calculation of amount recoverable due to late payment
Particulars Amount in (₹)
Interest Payable (18% of ₹ 26,50,000 for 20 days) 26,137
Discount recovered 53,000
Sub-total 79,137
IGST (12% of ₹ 79,137) 9,496
Total 88,633

Koli Ltd. supplies machinery to Ghisa Ltd. (Dealer in same state), provides following
particulars regarding the same. Determine the value of taxable supply of machinery.
No. Particulars Amount (₹)
(i) Price of Machinery (exclusive of taxes and discounts) 5,50,000

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(ii) One part is directly fitted in machinery at place of Ghisa Ltd. 20,000
(amount paid by Ghisa Ltd. directly to supplier, as per contract this
amount should be paid by Koli Ltd. and not included in price)
(iii) Installation and testing charges for machinery, not included in 25,000
price
(iv) Discount 2% on machinery price (recorded in the invoice)
(v) Koli Ltd. provides additional 1% discount at year-end, based on
additional purchase of other machinery
[CA-IPCE, May 2019]

Calculation of Value of Supply

Particulars Amount in (₹)
Price of machinery 5,50,000
Add: Amount paid by Ghisa Ltd. 20,000
Add: Installation and Testing charges 25,000
Sub-total 5,95,000
Less: Discount (2% of ₹ 5,50,000) (11,000)
Less: Additional discount -
Value of taxable supply 5,84,000

(4) Where the value cannot be determined as per sub-section (1), the same shall be
determined in the prescribed manner.

(5) Overruling (1)/ (4) above, value of certain notified supplies shall be determined in the
prescribed manner

(a) The open market value

If not available, then
(b) Consideration in money + Equivalent amount in money for non-monetary
consideration if such amount is known at the time of supply
If not available, then
(c) Value of supply of like kind and quality
If not available, then
(d) Consideration in money + Equivalent amount in money for non-monetary
consideration as determined by
(i) Rule 30
If not available, then
(ii) Rule 31
A new laptop is available at a price of ₹ 40,000 along with the exchange of an old
laptop. The price of the new laptop without exchange is ₹ 50,000. Determine the value
of supply?

₹ 50,000

A new laptop is available at a price of ₹ 40,000 along with a barter of printer

manufactured by the recipient. The value of this printer at the time of supply is ₹ 5,000.
However, the open market value of the laptop is not known at the time of supply.
Determine the value of supply?

₹ 45,000

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In order to promote the sale of a particular model of laptop, it is made available at a

price of ₹ 40,000 along with the exchange of an old laptop whose value cannot be
determined at the time of supply. The open market price of the new laptop is not known
as well. However, the manufacturer sells another model of laptop with same
configuration and features at a price of ₹ 45,000. Determine the value of supply?

₹ 45,000
NOTE: “Open market value” of a supply of goods/ services means the full value in money,
excluding the IGST, CGST, SGST, UTGST and the CC payable by a person in a transaction,
where the supplier and the recipient of the supply are not related and price is the sole
consideration, to obtain such supply at the same time when the supply being valued is
made.

NOTE: “Supply of goods/ services of like kind and quality” means any other supply of goods/
services made under similar circumstances that, in respect of the characteristics, quality,
quantity, functional components, materials, and reputation of the goods/ services first
mentioned, is the same as, or closely or substantially resembles, that supply of goods/
services.

Dev Enterprises is the supplier of water coolers. Dev Enterprises supplied water coolers to
Vimal Traders for consideration of ₹ 2,95,000 (inclusive of GST @ 18%). Vimal Traders also
gave some materials to Dev Enterprises as consideration for such supply whose value was
₹ 10,000 (exclusive of GST).
Dev Enterprises has supplied the same goods to another person at price of ₹ 2,79,360
(inclusive of GST @ 18%).
You are required to:
(1) Determine the value of goods supplied by Dev Enterprises to Vimal Traders as per
the provisions of the CGST Act, 2017.
(2) What would your answer be if price of ₹ 2,97,360 is not available at the time of
supply of goods to Vimal Traders? Explain briefly.
[CA-Final, May 2019]

(1) ₹ 2,52,000
(2) ₹ 2,60,000

The value of supply between distinct/ related persons, other than when made through an
agent, shall be –
(a) The open market value
If not available, then
(b) Value of supply of like kind and quality
If not available, then
(c) Value as determined by
(i) Rule 30
If not available, then
(ii) Rule 31

1. Option available –

Related
A B Not Related
C

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Value of Supply from A – B = 90% of price charged by B from C for like kind and
quality goods.
2. If recipient is eligible for full ITC
Open market value = Value declared in the invoice
Mrs. C sold a new laptop to her son Mr. B at a price of ₹ 40,000. She sells the same
laptop in market at a price of ₹ 50,000. Determine the value of supply?

₹ 50,000

Mrs. C sold a new laptop to Mr. B at a price of ₹ 40,000. The open market price of this
model of laptop is not known. However, Mrs. C sells another model of laptop in the
market, with same configuration and features, at a price of ₹ 45,000. Determine the
value of supply.

₹ 45,000

Kamal & Co. manufactures customized products at its unit situated in Rajasthan. Cost of
production for Kamal & Co. for 1000 products is ₹ 20,00,000. These products require
further processing before sale, and for this purpose products are transferred from its
Rajasthan unit to its another unit in Punjab. The Punjab unit, apart from processing its own
products, engages in processing of similar products of other persons who supply the
products of the same kind and quality and thereafter sells these processed products to
wholesalers. There are no other factories in the neighbouring area which are engaged in
the same business as that of its Punjab unit. Products of the same kind and quality are
supplied in lots of 1000 each time by another manufacturer located in Punjab. The price of
such goods is ₹ 19,00,000. Determine the value of 1000 products supplied by Kamal & Co.
to its Punjab unit as per the provisions of CGST Act, 2017.
[CA-Final, May 2018]

110% of ₹ 20,00,000 = ₹ 22,00,000

OR
90% of ₹ 19,00,000 = ₹ 17,10,000

The value of supply of goods between principal and his agent, shall be –
(a) The open market value
OR
Option available –

P Agent
A Not Related
C
Value of Supply from P – A = 90% of price charged by A from C for like kind and
quality goods.
If not available, then
(i) Value as determined by
(i) Rule 30
If not available, then
(ii) Rule 31
A principal supplies textile to his agent and the agent supplies textile of like kind and
quality in subsequent supplies at a price of ₹ 5,000 per lot on the day of supply. Another

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independent supplier is supplying textiles of like kind and quality to the said agent at the
price of ₹ 4,800 per lot. Determine the value of supply?

₹ 4,800 OR 90% of ₹ 5,000 = ₹ 4,500

Value of Supply = 110% of cost of production/ manufacture/ acquisition of goods/ provision

of service

Determine the value of supply using reasonable means consistent with the principles and
general provisions of the Act and these rules.

Option for Supplier of Services – Go for Rule 31, disregarding Rule 30

(1) Overruling this Chapter, value in respect of lottery, betting, gambling and horse
racing shall be determined as follows:

(2) (a) Lottery run by SG = 100/ 112 of

▪ the Face Value of ticket or
▪ the Price notified by the SG
whichever is higher.
(b) Lottery authorized by SG = 100/ 128 of
▪ the Face Value of ticket or
▪ the Price notified by the SG
whichever is higher

NOTE: Lottery run by SG = A lottery not allowed to be sold in any state other than the
organizing state.
Lottery authorized by SG = Lottery which is authorized to be sold in states
other than the organizing state also.

(3) The value of betting, gambling or horse racing in a race club

shall be 100% of
o the Face Value of the bet or
o the amount paid to the totalizator.

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(1) Option to determine the value of certain supplies in the following manner –

(2) Services in relation to purchase or sale of foreign currency, including money

changing –
(a) Foreign Currency INR
Value of Supply = {(Buying or Selling Rate) – (RRR)} X Units of currency
Value of Supply = 1% X Gross Amount of INR
Value of Supply = Forex sold X RRR = INR
Forex purchased X RRR = INR
Whichever is lower INR X 1%
Determine the value of supply in following cases:

I. Sold 10,000 units of USD @ USD 1 = INR 60 (RRR: USD 1 = INR 59)
Value of Supply = INR (60 – 59) X 10,000 = INR 10,000

II. Purchased 5,000 units of KRW @ KRW 1 = INR 0.60 (RRR: Unavailable)
Value of Supply = INR {1% X (0.60 X 5,000)} = INR 30

III. Exchanged 10,000 JPY for 80 EUR (RRR: JPY 1 = INR 0.50, EUR 1 = INR 80)
Value of Supply = INR (10,000 X 0.50) = INR 5,000
INR (80 X 80) = INR 6,400
Lower of the two = INR 5,000 X 1% = INR 50
However, a supplier of services may opt for clause (b) for a FY and such option shall not be
withdrawn during the remaining part of that FY.
(b) Foreign Currency INR
Gross Amount of INR Value of Supply

Upto ₹ 1,00,000 Higher of [₹ 250 OR 1% of Gross Amount upto ₹ 1,00,000]

₹ 1,00,000 - ₹
₹ 1,000 + 0.5% of Gross Amount exceeding ₹ 1,00,000
10,00,000

Lower of [(₹ 5,500 + 0.1% of Gross Amount exceeding ₹

Above ₹ 10,00,000
10,00,000) OR ₹ 60,000]

A forex dealer entered into following transactions in a particular tax period. Determine
the value of supply:
• 10 conversions of USD to EUR = ₹ 20,00,000 per transaction
• 20 conversions of JPY to USD = ₹ 5,00,000 per transaction
• 5 conversions of INR to USD = ₹ 20,000 per transaction

• (₹ 5,500 + 0.1% × ₹ (20,00,000 – 10,00,000)) × 10 = ₹ 65,000

• (₹ 1,000 + 0.5% × ₹ (5,00,000 – 1,00,000)) × 20 = ₹ 60,000
• ₹ 250 × 5 = ₹ 1,250

(3) Services in relation to booking of air tickets by air travel agents –

o Domestic bookings - 5% of basic fare
o International bookings - 10% of basic fare

NOTE: Basic Fare = That part of the air fare on which commission is normally paid to the
agent by the airline.

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(4) Services in relation to life insurance business –

(a) If the amount allocated for investments/ savings on behalf of the policyholder
is intimated to him at the time of supply:
Gross premium charged (-) Amount allocated for investment
(b) Single premium annuity policy other than above:
10% X single premium charged
(c) Other cases:
Year I: 25% of premium charged
Subsequent years: 12.5% of premium charged
Only risk cover policy,
Value of supply = premium charged

(5) Supply of second hand goods by a dealer of second hand goods, i.e.
o used goods as such, or
o used goods after minor processing, without changing its nature
without availing any ITC on such goods
Value of Supply = Higher of [₹ 0 or (Selling price – Purchase price)]

NOTE: In case of goods repossessed from an unregistered defaulting borrower, for the
purpose of recovery of loan
Purchase price = Original purchase price (-) 5% for every quarter or part from purchase (by
the defaulting borrower) to disposal (by the lender) of such goods
Mr. A (un-registered) defaulted on a loan of ₹ 5,00,000 taken from Mr. B. As agreed
between them earlier, Mr. B took the possession of Mr. A’s favourite car which he had
bought for ₹ 5,00,000 1 year ago, and sold it off after 11 months for ₹ 3,50,000.
Determine the value of supply for Mr. B?

Original purchase value of the car for Mr. A ₹

Less: 40% (5% per quarter for 1 yr. and 11 months) 5,00,000
₹
(2,00,000)
Purchase price of car for Mr. B ₹
3,00,000
Value of Supply (₹ 3,50,000 - ₹ 3,00,000) ₹ 50,000

(6) Value of redeemable token/ voucher/ coupon/ stamp (except postage stamp) =
Money value of the goods/ services received on redemption

(7) Value of supply of services between notified distinct persons

o made in course or furtherance of business
o without consideration
o ITC is available
shall be deemed to be NIL

Zindagi Life Insurance Company Limited (ZLICL) has collected premium from subscribers
and it intimates the amount allocated for investment to subscribers at the time of collection
of premium. During the month of September 2018, it has collected the following receipts.
All amounts are exclusive of tax. You are required to compute the value of supply by M/s
Zindagi in accordance with GST laws:
Sl. No. Particulars Amount
1. Premium for only risk cover 25,00,000
2. Premium from new subscribers 40,00,000
3. Renewal Premium 80,00,000
4. Single premium on annuity policy 1,00,00,000

[CA-Final, May 2019]

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Calculation of Value of Supply

Particulars Amount
Premium for only risk cover 25,00,000
Premium from new subscribers [25% of ₹ 40,00,000] 10,00,000
Renewal premium [12.5% of ₹ 80,00,000] 10,00,000
Single premium on annuity policy [10% of ₹ 1,00,00,000] 10,00,000
Total 55,00,000

The value of supply of goods/ services on which KFC is levied under clause 14 of the Kerala
Finance Bill, 2019 shall be deemed to be the value determined u/s 14 of the Act, but shall not
include the said Cess.

Value of supply of services in case of pure agent –

The expenditure/ costs incurred by supplier as a pure agent of the recipient shall be
excluded from the value of supply, if the following conditions are satisfied:
• He makes payment to the third party on authorization of the recipient.
• Such payment made is separately indicated in the invoice from pure agent to
recipient.
• The supplies procured from third party are in addition to the services he supplies on
his own account.

NOTE: “Pure Agent” means a person who –

(a) enters into a contractual agreement with the recipient of supply to act as his pure
agent to incur expenditure or costs in the course of supply of goods or services or
both;
(b) neither intends to hold nor holds any title to the goods or services or both so
procured or supplied as pure agent of the recipient of supply;
(c) does not use for his own interest such goods or services so procured; and
(d) receives only the actual amount incurred to procure such goods or services in
addition to the amount received for supply he provides on his own account.
A CA firm is engaged to handle the legal work pertaining to the incorporation of a
Company. Other than its service fees, the firm also recovers from the Company,
registration fee and approval fee for the name of the company paid to the RoC. The fees
charged by the RoC for the registration and approval of the name are compulsorily levied
on the Company. The CA firm is merely acting as a pure agent in the payment of those
fees. Therefore, the firm’s recovery of such expenses is a disbursement and not part of the
value of supply made to the Company.

(1) For determination of value of goods, the rate of exchange of currency = Rate notified
by CBIC u/s 14 of CA, 1962 for the date of time of supply.
(2) For determination of value of services, the rate of exchange of currency = Rate
determined as per the GAAP for the date of time of supply

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For determination of value of supply inclusive of GST:

GST = Value inclusive of tax X Applicable GST Rate
100 + Applicable GST Rate

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CGSTA, 2017
• Section 22: Persons liable for registration
• Section 23: Persons not liable for registration
• Section 24: Compulsory registration in certain cases
• Section 25: Procedure for registration
• Section 26: Deemed registration
• Section 27: Special provisions relating to CTP/ NRTP
• Section 28: Amendment of registration
• Section 29: Cancellation/ Suspension of registration
• Section 30: Revocation of cancellation of registration

(1) Every supplier shall be liable to be registered

in the State/ UT from where he makes a taxable supply
if following condition is satisfied:
Where Aggregate Turnover exceeds

Special Category States ₹ 10,00,000

(except J&K, AP, Assam, HP, Meghalaya,
Sikkim and Uttarakhand)
All other states and UTs ₹ 20,00,000
However, the CG may enhance the aggregate turnover specified for a special category
state from ₹ 10 lakhs to an amount upto ₹ 20 lakhs, at its request, and subject to such
conditions and limitations as may be notified.
• “Aggregate Turnover” shall include all supplies made by the taxable person, including
the ones made on behalf of all his principals.
• Supply of goods after completion of job work by a registered job worker shall be
treated as supply by the principal and included in the A.T. of the principal.

Threshold limit of turnover for levy of GST in the case of a person carrying on business in
Gujarat is:
(A) ₹ 10 lakhs
(B) ₹ 20 lakhs
(C) ₹ 30 lakhs
(D) ₹ 40 lakhs
[CS-Exec, Dec 2017]

(B) ₹ 20 lakhs

Mrs. Lakshmi, intending to start a new business in January, 2018, furnishes the following
information pertaining to the period upto 31.03.2018:
Estimated supplies (₹)
Intra-State supplies of taxable goods 14,00,000

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Intra-State suppliesof exempt services 4,00,000

Export sales 3,20,000
Supplies made as agent of a principal 2,40,000
Ascertain the aggregate turnover. She wants to know whether she should get herself
registered for GST purposes. You are required to help her. Further, what will be the GST
payable by her, if the GST rate for taxable goods supplied is 18%?
[CMA-Inter, Jun 2018]

Calculation of aggregate turnover

Particulars Amount (₹)
Intra-State supplies of taxable goods 14,00,000
Intra-State supplies of exempt services 4,00,000
Export sales 3,20,000
Supplies made as agent of a principal 2,40,000
Aggregate turnover 23,60,000
CGST (9% of 14,00,000) 1,26,000
SGST/ UTGST (9% of 14,00,000) 1,26,000

Mr. X a dealer dealing with intra-state supply of goods and services has place of business
in India furnished the following information in the financial year 2017-18:
(i) Sale of taxable goods by Head Office located in Chennai for ₹ 1,00,000
(ii) Supply of taxable services by Branch office at Bengaluru for ₹ 50,000
(iii) Supply of goods exempted from GST ₹ 10,000
(iv) Export of goods and services for ₹ 2,00,000
(v) Sale of goods acting as agent on behalf of principal for ₹ 15,00,000
Advice Mr. X whether he is required to register himself under GST law.
[CMA-Final, Jun 2018]
Calculation of aggregate turnover
Particulars Amount (₹)
Sale of taxable goods by HO, Chennai 1,00,000
Supply of taxable services by BO, Bengaluru 50,000
Supply of exempted goods 10,000
Export of goods and services 2,00,000
Sale of goods acting as agent on behalf of a principal 15,00,000
Aggregate turnover 18,60,000

There is a dairy farm selling milk and milk products in Delhi. The turnover of his dairy farm
is as below:
Milk (Exempted): ₹ 19,90,000
Butter (Taxable): ₹ 50,000
What is the registration liability under GST for the above-mentioned person assuming he
has same PAN?
[CA-IPCE, Nov 2018]

Amit, a taxable person, is operating in Tamil Nadu, Punjab and West Bengal, with the
same PAN. Can he operate with a single registration in West Bengal?
[CA-IPCE, Nov 2018]

(2) Every person

who was registered or held a licence under
any subsumed indirect tax law
as on the day immediately preceding the GST implementation day
shall be liable to be registered under GST laws
w.e.f. the appointed day.

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(3) Where a business concern is succeeded or transferred

as a going concern
from a registered taxable person to another person
the successor or transferee shall be liable to be registered
w.e.f. the date of such transfer or succession.

(4) Overruling sub-sections (1) and (3),

in case of amalgamation or demerger
pursuant to an order by HC, Tribunal or otherwise
the transferee shall be liable to be registered
w.e.f. the date on which the RoC issues incorporation certificate
giving effect to such order by HC or Tribunal.

Rajesh Dynamics, having its head office in Chennai, carries on the following activities with
respective turnovers in a Financial Year:
Particulars ₹
Supply of petrol at Chennai 18,00,000
Value of inward supplies on which tax is payable on reverse charge 9,00,000
basis
Supply of transformer oil at Chennai 2,00,000
Value of branch transfer from Chennai to Bengaluru without payment of 1,50,000
consideration
Value of taxable supplies at Manipur branch 11,50,000
It argues that it does not have taxable turnover crossing threshold limit of ₹ 20,00,000
either at Chennai or Bengaluru and including turnover at Manipur branch. It believes that
the determination of aggregate turnover is not required for the purpose of obtaining
registration but it is required for determining composition levy. Decide based on the above
facts:
(i) The aggregate turnover of Rajesh Dynamics
(ii) All conditions that fulfil the requirements for registration under CGST Act, 2017 in
the given circumstances.
[CA-Final, May 2018]

Calculation of aggregate turnover

Particulars Amount (₹)
Supply of petrol at Chennai 18,00,000
Value of inward supplies on which tax is payable on reverse charge basis -
Supply of transformer oil at Chennai 2,00,000
Value of branch transfer from Chennai to Bengaluru without payment of
consideration 1,50,000
Value of taxable supplies at Manipur branch 11,50,000
Aggregate turnover 33,00,000

Vinod, a supplier of goods in Vadodara furnishes the following particulars pertaining to

supplies likely to be effected by him during the third and fourth quarters of the FY 2017-18:
Value of supply of goods chargeable to GST ₹ 18 lakhs
Goods to be supplied to World Health Organization, Ahmedabad office ₹ 4 lakhs
All supplies will be within the State only. He desires to know whether he should get himself
registered for GST purposes. Advise him suitably.
[CS-Prof, Jun 2018]

Calculation of aggregate turnover

Particulars Amount (₹)

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Value of supply of goods chargeable to GST 18,00,000

Goods to be supplied to WHO 4,00,000
Aggregate turnover 22,00,000
Since the aggregate turnover exceeds the threshold limit applicable for Gujarat, Vinod must
get himself registered.

State whether true or false:

GST threshold limit for North-Eastern and hilly states is ₹ 25 lakhs.
[CMA-Inter, Jun 2018]

False

A new supplier has taxable intra-state sales, exempt intra-state sales and export sales of
goods. He should get himself registered under GST law, where
(a) the aggregate value of taxable intra-state goods exceeds ₹ 20 lakhs
(b) the aggregate value of taxable as well as exempt intra-state goods exceeds ₹ 20
lakhs
(c) the aggregate value of all the three items exceeds ₹ 20 lakhs
(d) the aggregate value of taxable intra-state goods as well as export sales exceeds ₹
20 lakhs
[CMA-Final, Jun 2018]

(c) the aggregate value of all the three items exceeds ₹ 20 lakhs

(1) The following persons shall not be liable to register themselves –

(a) A person engaged exclusively in supplies that are not liable to or wholly exempt
from GST
(b) An agriculturist, to the extent of supply of produce out of cultivation of land

(2) The government may notify the categories of persons who may be exempted from
obtaining registration.
Notfn. No.: 05/2017 – CT
The suppliers of taxable goods/ services liable to reverse charge mechanism u/s 9(3).

Notfn. No.: 07/2017 – IT

Job workers engaged in inter-state supply of services to a registered person, except –
(a) who is liable to be registered u/s 22(1) or who takes voluntary registration u/s 25(3)
of the CGSTA, 2017, or
(b) who is involved in supplying services relating to jewellery, goldsmiths’ and
silversmiths’ wares and other articles

Notfn. No.: 10/2017 – IT

The persons making inter-State supplies of taxable services and having
an aggregate turnover ≤ ₹ 20 lakhs (10 lakhs for Special Category states as per Section
22(1) of the CGSTA, 2017) in a FY.

Notfn. No.: 65/2017 – CT

The persons making supplies of services through an e-commerce operator, except the ones
specified under section 9(5) of the CGSTA, 2017 and having an aggregate turnover ≤ ₹ 20
lakhs (10 lakhs for Special Category states as per Section 22(1) of the CGSTA, 2017) in a FY.

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Notfn. No.: 03/2018 - IT

A person making inter-state taxable supplies of –
o Handicraft goods (as defined in Notfn. No.: 21/2018 – CT(R))
o Following goods made by craftsmen predominantly by hand even though some
machinery may be used in the process –
o Leather articles
o Carved wood/ stone products
o Bamboo, grass, leaf and reed and fibre products
o Paper mache articles
o Textile
o Textiles hand printing
o Zari thread
o Carpet, rugs and durries
o Textiles hand embroidery
o Theatre costumes
o Coir products
o Pottery, clay and terracotta products
o Metal table and kitchen ware
o Metal statues, images etc. used for decoration
o Musical instruments
o Horn, conch shell and bone products
o Dolls and toys
o Folk paintings, madhubani, patchitra, Rajasthani miniature
and satisfying the following conditions –
o The aggregate value of such supplies computed on pan-India basis ≤ ₹ 20 lakhs (10
lakhs for Special Category states except J&K) in a FY
o He shall obtain a PAN and generate an e-way bill as prescribed

NOTE: A CTP availing the aforementioned benefit has also been exempted from obtaining
registration vide Notfn. No.: 56/2018 – CT

Notfn. No.: 10/2019 – CT

Any person,
o who is engaged in exclusive supply of goods and
o whose aggregate turnover in the FY does not exceed ₹ 40 lakhs,
except persons –
(a) required to take compulsory registration u/s 24,
(b) engaged in supplying ice cream, tobacco products or pan masala,
(c) engaged in making intra-state supplies in
▪ Arunachal Pradesh
▪ Manipur
▪ Meghalaya
▪ Mizoram
▪ Nagaland
▪ Puducherry
▪ Sikkim
▪ Telangana
▪ Tripura
▪ Uttarakhand
(d) opting for voluntary registration u/s 25(3), or such registered persons who intend to
continue with their registration.

Find out from the following, who are the persons not liable for registration under section 30
of the CGST Act, 2017:
(A) non-resident making taxable supply

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(B) person supplying exempted goods and services or goods or services which are not
liable for tax under GST
(C) an agriculturist, to the extent of supply of produce out of cultivation of land
(D) both (B) and (C)
[CS-Exec, Dec 2018]

(D) both (B) and (C)

Overruling Section 22(1),

the following persons shall be required to register themselves –
(i) Persons making any inter-state taxable supply
(ii) CTP making taxable supply
(iii) Persons required to pay tax under RCM
(iv) Persons required to pay tax under Section 9(5)
(v) NRTP making taxable supply
(vi) Deductor of tax at source u/s 51, whether or not separately registered.
(vii) Persons supplying on behalf of other taxable persons, as agent etc.
(viii) ISD, whether or not separately registered.
(ix) Supplier of goods/ services who supply through an e-commerce operator,
other than those covered u/s 9(5), who is required to collect tax at source u/s
52
(x) Every e-commerce operator who is required to collect tax at source u/s 52
(xi) Every person supplying OIDAR services from outside India, to an un-registered
person in India
(xii) Persons as notified by the Government

Madhan is located in Chennai. He has a branch office in Kochi. He wants to transfer goods.
His turnover was always below ₹ 10 lakhs. His registration under GST is:
(A) voluntary
(B) compulsory
(C) compulsory only when turnover exceeds 20 lakhs
(D) as and when deemed by the Revenue
[CS-Exec, Dec 2017]

(B) compulsory

List out the category of persons who are not liable for registration under GST. State at least
four category of persons who are required to compulsorily register under GST law.
[CMA-Inter, Jun 2018]

Is a dealer, who is not required to be registered because he has not crossed the turnover
limit, required to pay GST under reverse charge in respect of supplies for which reverse
charge is applicable.
[CS-Prof, Dec 2018]

State with brief reason, whether following suppliers of taxable goods are required to
register under the GST law:
(i) Mr. Raghav is engaged in wholesale cum retail trading of medicines in the State of
Assam. His aggregate turnover during the financial year is ₹ 9,00,000 which
consists of ₹ 8,00,000 as intra-state supply and ₹ 1,00,000 as inter-state supply.

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(ii) Mr. S. N. Gupta of Rajasthan is engaged in trading of taxable goods on his own
account and also acting as an agent of Mr. Rishi of Delhi. His turnover in the
financial year 2017-18 is of ₹ 12 lakhs on his own account and ₹ 9 lakhs on behalf of
principal. Both turnovers are intra-state supply.
[CA-Inter, May 2019]

(i) Yes
(ii) Yes

Examine the liability of compulsory registration under section 24 of the CGST Act, 2017, in
each independent case mentioned below:
(1) Meenu, a supplier in Maharashtra, is engaged in supply of potatoes within
Maharashtra and also outside Maharashtra, whose turnover exceeds threshold
limit under GST law.
(2) Jinu Oils, Gujarat, is engaged in supplying machine oil as well as petrol. Total
turnover of machine oil is ₹ 20 lakhs and of petrol is ₹ 15 lakhs.
(3) Tilu is working as an agent, he is supplying goods as an agent of Tiku (who is
registered taxable person) and its aggregate turnover does not exceed ₹ 20 lakhs
during the financial year.
[CA-IPCE, May 2019]

(1) No
(2) Yes
(3) Yes

(1) Every person liable to register u/s 22 and 24

shall apply for registration
in the prescribed manner and subject to prescribed conditions
in every such State/ UT in which he is so liable
as per following time limits:
Category of persons Time limit for registration

CTP/ NRTP 5 days before commencement of business

All other cases Within 30 days
However, a person having a unit in SEZ or being a SEZ developer
shall have to separately apply for registration
as distinct from his place of business located outside the SEZ in the same state/ UT
• Every person supplying from territorial waters of India
shall obtain the registration
in the coastal state/ UT
where the nearest point of baseline is located

A casual taxable person or a non-resident taxable person shall be required to apply for
registration at least ……. days prior to the commencement of business:
(D) 30
(E) 5
(F) 15
(G) 7
[CS-Exec, Jun 2018]

(B) 5

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(2) Single State/ UT – Single Registration

However, a person having multiple places of business in a state/ UT
may be granted a separate registration for each such place of business
subject to prescribed conditions.

(1) Any person having multiple places of business within a state/ UT, requiring a
separate registration for any such place of business u/s 25(2), shall be granted the
same subject to following conditions –
(a) such person has more than 1 place of business as defined u/s 2(85)
(b) such person shall not pay tax u/s 10 for any of his places of business, if he is
paying tax u/s 9 for any other place of business. Moreover, in case any place
of business that has been granted a separate registration becomes ineligible
to pay tax u/s 10, all other registered places of business of this person shall
become ineligible to pay tax under the said section.
(c) all separately registered places of business shall pay tax and issue tax
invoice/ BoS for the supplies made to another registered place of business of
such person.

(2) A registered person opting to obtain separate registration for a place of business shall
submit a separate application in FORM GST REG – 01 for such place of business.

(3) The provisions of Rule 9 and Rule 10 relating to verification and grant of registration
shall apply mutatis mutandis to an application submitted under this rule.

(1) A registered person who has obtained separate registration for multiple places of
business u/r 11
and who intends to transfer whole or part of the unutilized ITC lying in his e-CrL to
any or all of the newly registered place of business,
shall furnish the details in FORM GST ITC – 02A within 30 days from obtaining such
separate registrations.
The ITC shall be transferred to the newly registered entities in the ratio of the value of
assets held by them at the time of registration.
NOTE: “The value of assets” means the value of the entire assets of the business
whether or not ITC has been availed on them.

(2) The transferee shall accept the details so furnished by the transferor
and upon such acceptance, the unutilized ITC specified in FORM GST ITC – 02A shall
be credited to his e-CrL.

(3) A person may get voluntary registration

despite being not liable for the same
and all the provisions of GST laws shall apply on him.

(1) Every person liable to be registered u/s 25(1) or seeking registration u/s 25(3), except:

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o NRTP
o TDS deductor u/s 51
o TCS collector u/s 52
o Supplier of OIDAR services from a place outside India to a NTOR
shall declare his PAN, mobile no., e-mail ID, State/ UT in FORM GST REG-01 (Part –
A) before applying for registration.
• Every ISD shall make a separate application for registration as such ISD.

(2) The PAN, mobile no. and e-mail ID shall be validated/ verified.

(3) On successful verification a temporary reference no. shall be generated and

communicated to the applicant.

(4) Using this reference no. the applicant shall submit a duly signed application in FORM
GST REG-01 (Part – B) along with the specified documents.

(5) On receipt of the application an acknowledgement shall be issued in FORM GST

REG-02.

(6) A person applying for registration as a CTP shall be given a temporary reference no.
for making advance deposit of tax and the acknowledgement shall be issued only
after the said deposit.

Can a person get himself voluntarily registered though he may not be liable to pay GST?
[CA-IPCE, Nov 2018]

(4) A person who has obtained or is required to obtain

more than one registration,
whether in one State/ UT or more than one State/ UT
shall be considered distinct persons in respect of each such registration.

(5) Where a person who has obtained or is required to obtain

registration in a State/ UT in respect of an establishment,
has an establishment in another State/ UT
then such establishments shall be treated as establishments of distinct persons.

(6) Eligibility Condition:

o Every person shall have a PAN issued under ITA, 1961
o Every tax deductor may have TAN issued under ITA, 1961
instead of the PAN

(7) Overruling above, a NRTP may be granted registration

on the basis of other prescribed documents.

(8) Where a person liable for registration

fails to obtain the same,
the PO may proceed to register such person
in the prescribed manner
without adversely affecting the proceedings under any law.

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(1) Where as a result of any survey, enquiry, inspection, search or any other
proceedings, the PO finds that a person liable to registration has failed to apply for
the same, he may register the said person temporarily and issue an order in FORM
GST REG-12

(2) Such registration shall be effective from the date of the order.

(3) Every person to whom a temporary registration has been granted shall apply for
registration u/r 8 or 12 within 90 days from the grant of such registration.
However, in case the said person has appealed against the grant of temporary
registration, he shall submit the application of registration within 30 days from the
date of issuance of order of the Appellate Authority, upholding the liability to register.

(4) Rules 9 and 10 shall apply mutatis mutandis.

(5) The GSTIN assigned as a result of such verification shall be effective from the date of
order granting registration under sub-rule (1).

(9) Overruling sub-section (1),

the following persons shall be granted UIN
in the prescribed manner and prescribed purposes
including refund of taxes for notified inward supplies:
o Any specialized agency of the UN
o Any multilateral financial institution and organization under UN(PI)A, 1947
o Consulate or Embassy of foreign countries
o Any other person notified by the Commissioner

1. Every person required to be granted a UIN may apply in FORM GST REG-13.

(1A) The UIN granted shall be applicable to the territory of India.

2. The PO may
o upon submission of application in FORM GST REG-13. or
o after filling up FORM GST REG-13, or
o after receiving a recommendation from the MEA,
assign a UIN to the said person and issue a RC in FORM GST REG-06 within 3
working days from the date of application.

Circular No. 36/ 10/2018-GST

Processing of refund applications for UIN entities

The entities having Unique Identity Number (UIN) may be given centralized
registration at the option of such entities. Further, the Central Government will be
responsible for all administrative compliances in respect of such entities.

3. Status of registration for UINs:

i. Entities having UINs are given a special status under the CGST Act as these
are not covered under the definition of registered person. These entities have
been granted UINs to enable them to claim refund of GST paid on inward
supply of goods or services or both received by them. Therefore, if any such
entity is making supply of goods or services or both in the course or
furtherance of business then such entity will need to apply for GSTIN as per

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the provisions contained in the CGST Act read with the rules made
thereunder.
ii. The process for applying for UIN has been outlined under Rule 17 of the
Central Goods and Services Tax Rules, 2017 (hereinafter referred to as “CGST
Rules”). As stated in the said rule, any person covered under clause (a) of
sub-section (9) of section 25 of the CGST Act may submit an application
electronically in FORM GST REG-13 on the common portal. Therefore,
Specialised agency of the United Nations Organisation or any Multilateral
Financial Institution and Organisation notified under the United Nations
(Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign
countries shall apply for grant of UIN electronically by filling FORM GST REG-
13.
iii. Due to delays in making available FORM GST REG-13 on the common portal,
an alternative mechanism has been developed. Entities covered under clause
(a) of sub-section (9) of Section 25 of the CGST Act may approach the
Protocol Division, Ministry of External Affairs in this regard, who will facilitate
grant of UINs in coordination with the Central Board of Excise and Customs
(CBEC) and GSTN.
iv. It is clarified that the facility of single UIN is optional and an entity may seek
more than one UIN.

4. Filing of return by UIN agencies:

i. The procedure for filing returns by UIN entities is specified under sub-rule (1)
of Rule 82 of the CGST Rules. The UIN entity is required to file details of
inward supplies in FORM GSTR-11.
ii. It may be noted that return in FORM GSTR-11 is required to be filed only for
those tax periods for which refund is being claimed. In other words, if an UIN
entity is not claiming refund for a particular period, it need not file return in
FORM GSTR-11 for that period.

5. Applying for refund by UIN agencies:

i. All the entities who have been issued UINs and are notified under Section 55
of the CGST Act will be eligible for refund of inward supply of goods or
services in terms of notification No. 16/2017-Central Tax (Rate) dated 28th
June 2017 as amended.
ii. It may be noted that the conditions specified under the said notification need
to be complied with while applying for refund claims. Further, field officers
are hereby instructed to ensure that all the certificates / undertaking etc. as
stipulated in the said notification be duly checked while processing the
refund claims.
iii. The procedure for filing a refund application has been outlined under Rule 95
of the CGST Rules which provides for filing of refund on quarterly basis in
FORM RFD-10 along with a statement of inward invoices in FORM GSTR-11. It
is hereby clarified that FORM GSTR-11 along with FORM GST RFD-10 has to
be filed separately for each of those quarters for which refund claim is being
filed.
iv. Agencies which have been allotted UINs may visit User Manual / FAQ section
on the common portal (www.gst.gov.in) for step by step instructions on how
to file FORM GSTR-11 and FORM RFD-10.
v. It is hereby clarified that all the entities claiming refund shall submit the duly
filled in print out of FORM RFD-10 to the jurisdictional Central Tax
Commissionerate. All refund claims shall be processed and sanctioned by
respective Central Tax offices. In order to facilitate processing of refund
claims of UIN entities, a nodal officer has been designated in each State
details of whom are given in Annexure A. Application for refund claim may be
submitted before the designated Central Tax nodal officers in the State in
which the UIN has been obtained.

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vi. There may be cases where multiple UINs existed for the same entity but
were later merged into one single UIN. In such cases, field formations are
requested to process refund claims for earlier unmerged UINs also. Hence,
the refund application will be made with the single UIN only but invoices of
old UINs may be declared in the refund claim, which may be accepted and
taken into account while processing the refund claim.

6. Passing of refund order and settlement of funds:

i. The facility of centralized UIN ensures that irrespective of the type of tax
(CGST, SGST, IGST or Cess) and the State where such inward supply of goods
or services have been procured, all refunds would be processed by Central
authorities only. Therefore, field formations are advised that all refunds are to
be processed on merits irrespective of where and which type of tax is paid
on inward supply of goods or services or both by such entities.
ii. A monthly report as prescribed in Annexure B is required to be furnished to
the Director General of Goods and Services Tax by the 30th of the
succeeding month.
iii. Field officers shall send a copy of the order passed for such refunds to their
State counterparts for information purposes only.

Circular No. 43/ 17/2018-GST

Queries regarding processing of refund applications for UIN agencies

2. Providing statement of invoices while submitting the refund application:

2.1 The procedure for filing a refund application has been outlined under rule 95 of
the Central Goods and Services Tax Rules,2017 (hereinafter referred to as „the
CGST Rules‟) which provides for filing of refund on a quarterly basis in FORM
RFD-10 along with a statement of inward invoices in FORM GSTR-11. It has come
to the notice of the Board that the print version of FORM GSTR-11 generated by
the system does not have invoice-wise details. Therefore, it is clarified that till the
system generated FORM GSTR-11 does not have invoice-level details, UIN
agencies are requested to manually furnish a statement containing the details of
all the invoices on which refund has been claimed, along with refund application.

3. No mention of UINs on Invoices:

3.1 The recording of UIN on the invoice is a necessary condition under rule 46 of the
CGST Rules, 2017. If suppliers / vendors are not recording the UINs, action may
be initiated against them under the provisions of the CGST Act, 2017.

Circular No. 63/ 37/2018-GST

Clarification regarding processing of refund claims filed by UIN entities

3. UIN entities have been advised to submit a statement of invoices and hard copies of
only those invoices wherein the UIN is not mentioned vide Circular No. 43/ 17/2018-
GST. Further, refund processing officers have been advised not to request for original
or hard copy of the invoices unless necessary. However, it is observed that the delay
in processing of the UIN refunds is primarily due to the non-furnishing of the hard
copy of the invoices by the UIN entities and the statement of invoices as specified in
paragraph 2.1 of Circular No. 43/ 17/2018-GST dated 13.04.2018. It may be noted that
the same are needed in order to determine the eligibility for grant of refund in
accordance with the reciprocity letter issued by MEA. Further, it has been observed
that in some cases, the Certificate and Undertaking submitted by the UIN entities is
not in accordance with Notifications No. 13/2017 – Integrated Tax (Rate), 16/2017-
Central Tax (Rate) and No. 16/2017 – Union Territory tax (Rate) and corresponding
notifications under the respective SGST Acts.

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5. Prior Permission letter for GST refund for purchase of vehicles: MEA vide letter F. No.
D_II/ 451/ 12(5)/2017 has informed that it is mandatory to enclose the copy of ‘Prior
Permission Letter’ issued by the Protocol Special Section of MEA at the time of
submission of GST refund for purchase of vehicle by the foreign representatives.
Accordingly, it is advised that UIN entities must submit the copy of the ‘Prior
Permission letter’ and mention the same in the covering letter while applying for GST
refund on purchase of vehicles to avoid delay in processing of refunds.

6. Non-availability of refunds to personnel and officials of United Nations and other

International organizations: It is hereby clarified that the personnel and officials of
United Nations and other International organizations are not eligible to claim refund
under Notifications No. 13/2017 – Integrated Tax (Rate), 16/2017-Central Tax (Rate)
and No. 16/2017 – Union Territory tax (Rate) and corresponding notifications under
the respective State Goods and Services Tax Acts. However, the eligibility of refund
for the personnel and officials posted in the Embassy/ Mission/ Consulate shall be
determined based on the principle of reciprocity.

(10) The registration or UIN shall be granted or rejected

after due verification within the prescribed period

(1) The application shall be examined by the PO and if the same are found to be in order,
the grant of registration shall be approved within 3 working days from the date of
submission of application.

(2) Where the application is found to be deficient, or the PO requires any further
clarification, he may issue a notice to the applicant in FORM GST REG-03 within 3
working days from the date of submission of application, and the applicant shall
respond to the same in FORM GST REG-04 within 7 working days from the date of
receipt of such notice.

(3) Where the PO is satisfied with the clarification received, he may approve the grant of
registration within 7 working days from the date of such receipt.

(4) Where no reply is furnished by the applicant or the PO is not satisfied with the
clarification furnished, he shall reject such application and inform the applicant in
FORM GST REG-05.

(5) If the PO fails to take any action within 3 working days from the date of submission of
application (or 7 working days from the date of receipt of clarification), the grant of
registration shall be deemed to have been approved.

(11) A RC shall be issued in prescribed form within prescribed period.

(12) A registration or UIN shall be deemed to have been granted

after the expiry of prescribed period under sub-section 10
if no deficiency is communicated to the applicant within that period.

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(1) Subject to section 25(12), where the application for registration has been approved, a
RC in FORM GST REG-06 shall be made available to the applicant and a GSTIN shall
be assigned subject to the following characters –
(a) 2 characters – State Code
(b) 10 characters – PAN/ TAN
(c) 2 characters – Entity Code
(d) 1 character - Checksum

(2) The registration shall be effective from the date on which the person becomes liable
to registration, where the application has been submitted within 30 days from such
date.

(3) In case the application is submitted after 30 days, the effective date of registration
shall be the date of the grant of registration.

(4) Every RC shall be duly signed and verified through EVC by the PO.

(5) Where the registration has been granted under deeming fiction, the registration no.
shall be communicated to the applicant, and the RC shall be made available to him
within 3 days after the expiry of the stipulated period as per Rule 9(5).

Pari & Sons is an unregistered dealer. On 10th August, 2017 aggregate turnover of Pari &
Sons exceeded ₹ 20,00,000. The firm applied for registration on 27th August, 2017 and was
granted the registration certificate on 1st September, 2017.
Under CGST Rules, 2017, you are required to advise Pari & Sons as to what is the effective
date of registration in its case. It has also sought your advice regarding period for issuance
of revised tax invoices.
[CA-Final, May 2018]
Effective date of registration = 10th August, 2017
Period for issuance of revised tax invoices = 10th August, 2017 – 1st September, 2017

Determine the effective date of registration under CGST Act, 2017 in respect of the following
cases with explanation:
(i) The aggregate turnover of Varun Industries of Mumbai has exceeded ₹ 20 lakhs on
1st August, 2017. It submits the application for registration on 20th August, 2017.
Registration certificate granted on 25th August, 2017.
(ii) Sweta InfoTech Services are the provider of internet services in Pune. The
aggregate turnover of them exceeds ₹ 20 lakhs on 25th September, 2017. It submits
the application for registration on 27th October, 2017. Registration certificate is
granted on 5th November, 2017.
[CA-IPCE, May 2018]
(i) 1st August, 2017
(ii) 5th November, 2017

Determine the effective date of registration in the following instances:

(i) The aggregate turnover of Madhu Ltd., engaged in taxable supply of services in the
state of Punjab, exceeded ₹ 20 Lakhs on 25th August, 2017. It applies for registration
on 19th September, 2017 and is granted registration certificate on 29th September,
2017.
(ii) What will be your answer, if in the above scenario, Madhu Ltd. submits the
application for registration on 27th September, 2017 and is granted registration on
5th October, 2017?
[CA-Inter, May 2018]

(i) 25th August, 2017

(ii) 5th October, 2017

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State which shall be taken as the effective date of registration as per CGST Act, 2017 where
the aggregate turnover of Madhur Company engaged in supply of taxable services in the
state of Rajasthan exceeded ₹ 20 lakh during the year on 25th September, 2017, the
application for registration under GST was filed on 19th October, 2017 and the registration
certificate was granted on 29th October, 2017 by the authority:
(A) 25-9-2017
(B) 19-10-2017
(C) 24-10-2017
(D) 29-10-2017

[CS-Exec, Dec 2018]

(A) 25-9-2017

The Aggregate Turnover of Vikas Enterprise of Mumbai (Maharashtra) has exceeded ₹ 20

Lakhs on 25th January, 2018. It submits the application for Registration on 15th February,
2018. Registration certificate is granted on 20th February, 2018. Determine the effective
date of Registration under CGST Act, 2017.
[CA-IPCE, Nov 2018]

25th January, 2018

After a RC has been made available and a GSTIN has been assigned,
the registered person, except those who have been granted registration u/r 12/ 16,
shall furnish the details of bank a/c or any other information as required to comply with any
other provision within
o 45 days from the date of grant of RC or
o the due date for furnishing periodic return
whichever is earlier.

(1) Every registered person shall display his RC in a prominent location at his principal as
well as additional place(s) of business.

(2) Every registered person shall display his GSTIN on the name board exhibited at the
entry of his principal as well as additional place of business.

Where the PO is satisfied that the physical verification of the place of business of a
registered person is required after the grant of registration, he may do so and the verification
report along with other documents shall be uploaded in FORM GST REG-30 within 15
working days from such verification.

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(1) Grant of Registration/ UIN under SGSTA/ UTGSTA

shall be deemed to be grant of registration under CGSTA as well
if the application for such registration is not rejected u/s 25(10).

(2) Overruling Section 25(10),

any rejection of application for registration under SGSTA/ UTGSTA
shall be deemed to be rejection under CGSTA as well.

(1) The RC issued to a CTP/ NRTP

shall be valid for a maximum period of 90 days,
as specified in the certificate,
and the CTP/ NRTP shall make taxable supplies
only after the issuance of this RC.
• On sufficient cause being shown,
the PO may extend the period of 90 days
with a further period not exceeding 90 days.

Maximum validity period of certificate of registration issued to a casual and non-resident

taxable person as per section 27 of the CGST Act, 2017 is:
(A) 90 days from the effective date of registration
(B) 180 days from the effective date of registration
(C) 365 days from the effective date of registration
(D) none of the above
[CS-Exec, Dec 2018]

(A) 90 days from the effective date of registration

Answer the following questions with respect to casual taxable person under the CGST Act,
2017:
(i) Who is a casual taxable person?
(ii) Can a casual taxable person opt for the composition scheme?
(iii) When is the casual taxable person liable to get registered?
(iv) What is the validity period of the registration certificate issued to a casual taxable
person?
(v) Can the validity of registration certificate issued to a casual taxable person be
extended? If yes, what will be the period of extension
[CA-Inter, May 2019]

(2) The CTP/ NRTP shall deposit in advance

an amount equivalent to the estimated tax liability
for the period for which registration is sought,
at the time of submitting the application for registration.
• In case of any extension,
the CTP/ NRTP shall deposit in advance
an amount equivalent to additional estimated tax liability
for the period so extended.

(3) The amount deposited u/s 27(2),

shall be credited to the e-CaL of the CTP/ NRTP
and utilized for the payment of tax, interest, penalty etc.
as per the provisions of Section 49.

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(1) A NRTP shall submit a duly verified application in FORM GST REG-09, along with a
self-attested copy of his valid passport, at least 5 days prior to the commencement
of business.
However, in case of a business entity incorporated or established outside India, the
application for registration shall be submitted along with its TIN, PAN or any other
unique no. on the basis of which the entity is identified by the Government of that
country, if available.

(2) The NRTP applying for registration shall be given a TRN for making an advance
deposit of tax and the acknowledgement under rule 8(5) shall be issued only after
the said deposit in his e-CaL.

(3) The provisions of Rule 9 and 10 shall apply mutatis mutandis to the application
submitted.

(4) The registration application by a NRTP shall be duly signed through EVC by his
authorized signatory who shall be a resident with a valid PAN.

(1) Where a registered CTP/ NRTP intends to extend the period of registration, an
application in FOR GST REG-11 shall be submitted by such person before the end of
the validity of registration granted to him.

(2) This application shall be acknowledged only on payment of the amount specified in
section 27(2).

(1) Every registered person/ UIN holder

shall inform the PO
of any change in information furnished at the time of registration
in the prescribed form, prescribed manner and within prescribed period.

(2) On the basis of information furnished or as ascertained by him,

the PO may accept or reject the amendment
in prescribed manner and within the prescribed period.
• The approval of PO shall not be required
in respect of certain prescribed particulars.
• The PO shall not reject any application for amendment
without giving the applicant a chance to be heard.

(3) Any rejection/ approval of amendments

under the SGSTA/ UTGSTA
shall be deemed to be a rejection/ approval under CGSTA as well.

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(1) Where there is any change in any information furnished in the registration application
in FORM GST REG-01/ 07/ 09/ 10/ 13 either at the time of obtaining registration or as
amended from time to time, the registered person shall submit an application in
FORM GST REG-14 within 15 days of such change along with the relevant documents.
Furthermore,
(a) where the change relates to –
(i) legal name of business,
(ii) address of the principal or additional place of business or
(iii) addition, deletion or retirement of partners or directors, Karta,
Managing Committee, Board of Trustees, CEO or equivalent,
responsible for day to day affairs of the business.
which does not warrant cancellation of registration, the PO shall approve the
amendment within 15 working days from the date of receipt of application in
FORM GST REG-14 and issue an order in FORM GST REG-15 after due
verification effecting the amendment from the date of occurrence of such
event warranting the amendment.
(b) the change relating to (i) and (iii) in any state/ UT shall be applicable for all
registrations of the registered person obtained on the same PAN.
(c) where the change relates to any particulars other than (a), the RC shall stand
amended upon submission of FORM GST REG-14.
(d) where a change in the constitution of any business results in change of PAN
of a registered person, he shall apply for fresh registration in FORM GST REG-
01.
However, any change in the mobile no. or e-mail ID of the authorized
signatory submitted under this rule, shall be carried out only after online
verification through OTP.

State with reason whether following statement is true or false:

“When there is change in constitution of business results in change in PAN, the business
entity can apply for amendment of registration in prescribed manner within 15 days.”
[CA-IPCE, May 2018]
False

(1A) Overruling (1) above, no amendment shall be effective from a date

prior to the date of submission of FORM GST REG-14
except with the order of the Commissioner
for reasons to be recorded in writing
and subject to conditions specified in the order.

(2) Where the PO is of the opinion that the amendment sought is not warranted or the
documents furnished are incomplete/ incorrect he may serve a SCN in FORM GST
REG-03 within 15 working days of receipt of FORM GST REG-14 to be responded
within 7 working days.

(3) The registered person shall furnish a reply in FORM GST REG-04 within 7 working
days from the date of service of the said notice.

(4) Where the reply furnished is found to be not satisfactory or no reply is furnished
within the prescribed period, the PO shall reject the application and pass an order in
FORM GST REG-05.

(5) If the PO fails to take any action –

(a) within 15 working days from the date of submission of application, or
(b) within 7 working days from the date of receipt of reply to the SCN,

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the RC shall stand amended to the extent applied for and the amended RC shall be
made available to the registered person.

(1) The PO may either

o on his own motion, or
o on an application filed by the registered person, or
o on an application filed by legal heirs of a deceased registered person
cancel the registration in the prescribed manner and within the prescribed period, with
regards to the following circumstances –
(a) The business has been discontinued, transferred for any reason like death of
proprietor, amalgamation, demerger or disposed of for any reason, or
(b) There is any change in the constitution of the business, or
(c) The taxable person is no longer liable to be registered under Section 22 or
Section 24, unless he registered himself voluntarily.
However, during pendency of the proceedings relating to cancellation filed by the
registered person, the registration may be suspended for the prescribed period.

(2) The PO may cancel the registration

in the following cases, even from a retrospective date–
o The registered person has contravened any prescribed provision of the Act or
the Rules
o A person under composition levy scheme has not furnished returns for 3
consecutive tax periods
o Any other registered person has not furnished returns for 6 consecutive months
o Registration has been obtained by fraud, wilful misstatement
However, the PO shall not cancel the registration without giving the person an
opportunity of being heard.
Moreover, during pendency of the proceedings relating to cancellation, the PO may
suspend the registration for the prescribed period.

(3) The cancellation under this section

shall not affect the liability of the person
for any period prior to the date of cancellation
irrespective of when such dues were determined.

(4) The cancellation of registration

under the SGSTA/ UTGSTA
shall be deemed to be a cancellation under the CGSTA as well.

(5) Every registered person shall pay

o an amount equivalent to the credit of
input tax w.r.t.
▪ inputs held in stock
▪ inputs contained in semi-finished and finished goods
▪ capital goods or p&m
Or
o the output tax payable on such goods
whichever is higher,

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upon cancellation of his registration

on the day immediately preceding the date of such cancellation
in the prescribed manner.
• In case of capital goods or p&m, the taxable person shall pay
o The input tax credit taken (-) prescribed percentage points
OR
o Tax on the transaction value of such goods or p&m
whichever is higher

(6) The amount under sub-section (5) shall be calculated in the prescribed manner.

A registered person other than

• registered TDS deductor/ TCS collector, or
• person holding UIN
seeking cancellation of his registration shall apply in FORM GST REG-16 including the details
of stock on the date from which the cancellation of registration is sought, the tax liability
thereon and the payment made against such liability within 30 days of the occurrence of the
event warranting such cancellation.

The registration granted is liable to be cancelled, if the said person –

a) does not conduct any business from the declared place of business, or
b) issues invoice/ bill without supply of goods/ services
c) violates section 171 (anti-profiteering measure)
d) violates the provision of rule 10A

(1) Where a registered person has applied for cancellation of registration u/r 20, the
registration shall be deemed to be suspended from
o the date of submission of application or
o the date from which the cancellations is sought,
whichever is later,
pending the completion of cancellation proceedings u/r 22.

(2) If the PO suspects that the registration of a person is liable to be cancelled u/s 29 or
u/r 21, he may suspend the registration of such person w.e.f. from a date to be
determined by him, pending the completion of cancellation proceedings u/r 22,
after giving him a reasonable opportunity of being heard.

(3) A registered person, whose registration has been suspended under (1)/ (2),
shall not make any taxable supply, i.e. shall not issue a tax invoice and accordingly
not charge GST on supplies made by him,
during the period of suspension
and shall not be required to furnish any return u/s 39.

(4) The registration suspension under (1)/ (2) shall be deemed to be revoked
upon completion of the proceedings by the PO u/r 22

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and such revocation shall be effective from the date on which the suspension had
come into effect.

(5) Where any order for revocation of suspension of registration has been passed,
the provisions of section 31(3)(a) and section 40 shall apply
in respect of the supplies made during the period of suspension.

(1) Where the PO has reasons to believe that a registration is liable to be cancelled u/s
29, he shall issue a SCN to such person in FORM GST REG-17 to be responded within
7 working days from the date of the service of such notice.

(2) The reply to the SCN shall be furnished in FORM GST REG-18 within the specified
period.

(3) Where a person who has applied for cancellation of registration is no longer liable to
be registered or his registration is liable to be cancelled, the PO shall issue an order in
FORM GST REG-19, within 30 days from the date of submission of application u/r
20(1)/ the date of reply to the SCN, cancelling the registration, w.e.f. a date to be
determined by him and notify the taxable person, and direct him to pay the arrears.

(4) Where the reply furnished against the SCN is found to be satisfactory, the PO shall
drop all the proceedings and pass an order in FORM GST REG-20.

(5) The provisions of sub-rule (3) shall apply mutatis mutandis to the legal heirs of a
deceased proprietor, as if the application had been submitted by the proprietor
himself.

Circular No. 69/ 43/2018-GST

Processing of Applications for Cancellation of Registration submitted in FORM GST REG-16

2. Section 29 of the CGST Act, read with rule 20 of the Central Goods and Services Tax
Rules, 2017 (hereinafter referred to as the “CGST Rules”) provides that a taxpayer can
apply for cancellation of registration in FORM GST REG-16 in the following
circumstances:
a. Discontinuance of business or closure of business;
b. Transfer of business on account of amalgamation, merger, de-merger, sale,
lease or otherwise;
c. Change in constitution of business leading to change in PAN;
d. Taxable person (including those who have taken voluntary registration) is no
longer liable to be registered under GST;
e. Death of sole proprietor;
f. Any other reason (to be specified in the application).

3. Rule 20 of the CGST Rules provides that the taxpayer applying for cancellation of
registration shall submit the application in FORM GST REG-16 on the common portal
within a period of 30 days of the ‘occurrence of the event warranting the
cancellation’. It might be difficult in some cases to exactly identify or pinpoint the
day on which such an event occurs. For instance, a business may be transferred/
disposed over a period of time in a piece meal fashion. In such cases, the 30-day
deadline may be liberally interpreted and the taxpayers’ application for cancellation
of registration may not be rejected because of the possible violation of the deadline.

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4. While initiating the application for cancellation of registration in FORM GST REG-16,
the Common portal captures the following information which has to be mandatorily
filled in by the applicant:

a.Address for future correspondence with mobile number and email address;
b.Reason for cancellation;
c.Date from which cancellation is sought;
d.Details of the value and the input tax/ tax payable on the stock of inputs,
inputs contained in semi-finished goods, inputs contained in finished goods,
stock of capital goods/ plant and machinery;
e. In case of transfer, merger of business, etc., particulars of registration of the
entity in which the existing unit has been merged, amalgamated, or
transferred (including the copy of the order of the High Court/ transfer deed);
f. Details of the last return filed by the taxpayer along with the ARN of such
return filed.
On successful submission of the cancellation application, the same appears on the
dashboard of the jurisdictional officer.

5. Since the cancellation of registration has no effect on the liability of the taxpayer for
any acts of commission/ omission committed before or after the date of cancellation,
the proper officer should accept all such applications within a period of 30 days from
the date of filing the application, except in the following circumstances:
a. The application in FORM GST REG-16 is incomplete, i.e. where all the relevant
particulars, as detailed in para 4 above, have not been entered;
b. In case of transfer, merger or amalgamation of business, the new entity in
which the applicant proposes to amalgamate or merge has not got registered
with the tax authority before submission of the application for cancellation.
In all cases other than those listed at (a) and (b) above, the application for
cancellation of registration should be immediately accepted by the proper officer and
the order for cancellation should be issued in FORM GST REG-19 with the effective
date of cancellation being the same as the date from which the applicant has sought
cancellation in FORM GST REG-16. In any case the effective date cannot be a date
earlier to the date of application for the same.

6. In situations referred to in (a) or (b) in para 5 above, the proper officer shall inform
the applicant in writing about the nature of the discrepancy and give a time period of
seven working days to the taxpayer, from the date of receipt of the said letter, to
reply. If no reply is received within the specified period of seven working days, the
proper officer may reject the application on the system, after giving the applicant an
opportunity to be heard, recording reasons for rejection in the dialog box that opens
once the ‘Reject’ button is chosen. If reply to the query is received and the same on
examination is found satisfactory, the Proper Officer may approve the application for
cancellation and proceed to cancel the registration by issuing an order in FORM GST
REG-19. If reply to the query is found to be not satisfactory, the Proper Officer may
reject the application for cancellation on the system, after giving the applicant an
opportunity to be heard. The Proper Officer must also record his reasons for rejection
of the application in the dialog box that opens when the ‘Reject’ button is chosen.

7. Section 45 of the CGST Act requires every registered person (other than an Input
Service Distributor or a non-resident taxable person or a person paying tax under the
provisions of section 10 or section 51 or section 52) whose registration has been
cancelled, to file a final return in FORM GSTR-10, within three months of the effective
date of cancellation or the date of order of cancellation, whichever is later. The
purpose of the final return is to ensure that the taxpayer discharges any liability that
he/ she may have incurred under sub-section (5) of the section 29 of the CGST Act. It
may be noted that the last date for furnishing of FORM GSTR-10 by those taxpayers
whose registration has been cancelled on or before 30.09.2018 has been extended

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till 31.12.2018 vide notification No. 58/2018 – Central Tax dated the 26th October,
2018.

8. Further, sub-section (5) of section 29 of the CGST Act, read with rule 20 of the CGST
Rules states that the taxpayer seeking cancellation of registration shall have to pay,
by way of debiting either the electronic credit or cash ledger, the input tax contained
in the stock of inputs, semi-finished goods, finished goods and capital goods or the
output tax payable on such goods, whichever is higher. For the purpose of this
calculation, the stock of inputs, semi-finished goods, finished goods and capital
goods shall be taken as on the day immediately preceding the date with effect from
which the cancellation has been ordered by the proper officer i.e. the date of
cancellation of registration. However, it is clarified that this requirement to debit the
electronic credit and/ or cash ledger by suitable amounts should not be a
prerequisite for applying for cancellation of registration. This can also be done at the
time of submission of final return in FORM GSTR-10. In any case, once the taxpayer
submits the application for cancellation of his/ her registration from a specified date,
he/ she will not be able to utilize any remaining balances in his/ her electronic credit/
cash ledgers from the said date except for discharging liabilities under GST Act upto
the date of filing of final return in FORM GSTR-10. Therefore, the requirement to
reverse the balance in the electronic credit ledger is automatically met. In case it is
later determined that the output tax liability of the taxpayer, as determined under
sub-section (5) of section 29 of the CGST Act, was greater than the amount of input
tax credit available, then the difference shall be paid by him/ her in cash. It is
reiterated that, as stated in sub-section (3) of section 29 of the CGST Act, the
cancellation of registration does not, in any way, affect the liability of the taxpayer to
pay any dues under the GST law, irrespective of whether such dues have been
determined before or after the date of cancellation.

9. In case the final return in FORM GSTR-10 is not filed within the stipulated date, then
notice in FORM GSTR-3A has to be issued to the taxpayer. If the taxpayer still fails to
file the final return within 15 days of the receipt of notice in FORM GSTR-3A, then an
assessment order in FORM GST ASMT-13 under section 62 of the CGST Act read with
rule 100 of the CGST Rules shall have to be issued to determine the liability of the
taxpayer under sub-section (5) of section 29 on the basis of information available
with the proper officer. If the taxpayer files the final return within 30 days of the date
of service of the order in FORM GST ASMT-13, then the said order shall be deemed to
have been withdrawn. However, the liability for payment of interest and late fee shall
continue.

10. Rule 68 of the CGST Rules requires issuance of notices to registered persons who fail
to furnish returns under section 39 (FORM GSTR-1, FORM GSTR-3B and FORM GSTR-
4), section 44 (Annual Return – FORM GSTR-9 / FORM GSTR-9A / FORM GSTR-9C),
section 45 (Final Return – FORM GSTR-10) or section 52 (TCS Return – FORM GSTR-
6). It is clarified that issuance of notice would not be required for registered persons
who have not made any taxable supplies during the intervening period (i.e. from the
date of registration to the date of application for cancellation of registration) and has
furnished an undertaking to this effect.

11. It is pertinent to mention here that section 29 of the CGST Act has been amended by
the CGST (Amendment) Act, 2018 to provide for “Suspension” of registration. The
intent of the said amendment is to ensure that a taxpayer is freed from the routine
compliances, including filing returns, under GST Act during the pendency of the
proceedings related to cancellation. Accordingly, the field formations may not issue
notices for non- filing of return for taxpayers who have already filed an application
for cancellation of registration under section 29 of the CGST Act. Further, the
requirement of filing a final return, as under section 45 of the CGST Act, remains
unchanged.

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12. It may be noted that the information in table in FORM GST REG-19 shall be taken
from the liability ledger and the difference between the amounts in Table 10 and
Table 11 of FORM GST REG-16.

(1) In case the PO cancels registration on his own motion,

the previously registered person may apply to such officer
for revocation of such cancellation
within 30 days of service of the cancellation order
in the prescribed manner and subject to prescribed conditions.

(2) On such application, the PO may

either revoke the cancellation or reject the application
in the prescribed manner and within the prescribed period
after giving the applicant an opportunity to be heard.

(3) The revocation of cancellation of registration

under the SGSTA/ UTGSTA,
shall be deemed to be revocation of cancellation under CGSTA
as well.

(1) Where a registration is cancelled by the PO on his own motion, the taxable person
may apply for revocation of cancellation order in FORM GST REG-21 to such PO
within 30 days from the date of order of cancellation.
However, no application for revocation shall be filed, if the registration has been
cancelled for failure of the registered person to furnish returns, unless such returns
are furnished and all the amounts payable in respect of the said returns has been
paid.
Moreover, all returns due for the period from the date of the cancellation order till
the date of revocation order shall be furnished by the said person within 30 days
from the date of the said revocation order.
Also, in case the registration has been cancelled from a retrospective effect, the
registered person shall furnish all returns relating to period from the effective date of
cancellation till the date of revocation order within 30 days from the date of
revocation order.

(2) (a) Where the PO is satisfied that there are sufficient grounds for revocation of
cancellation, he shall do so by an order in FORM GST REG-22 within 30 days
from the date of receipt of application.
(b) The PO may reject the application for revocation of cancellation of
registration in FORM GST REG-05 under circumstances other than those
specified in (a) above.

(3) The PO shall, before passing the order as per (2)(b) issue a SCN in FORM GST REG-23
and the applicant shall reply to the same in FORM GST REG-24 within 7 working
days.

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(4) Upon receipt of clarification in FORM GST REG-24, the PO shall dispose the
application as per sub-rule (2), within 30 days from the date of receipt of such
information.

Circular No. 95/14/2019-GST

Verification of applications for grant of new registration

Recently, a large number of registrations have been cancelled by the proper officer
under the provisions of sub-section (2) of section 29 of the Central Goods and
Services Act, 2017 (hereinafter referred to as ‘CGST Act’) read with rule 21 of the
Central Goods and Services Rules, 2017 (hereinafter referred to as ‘CGST Rules’) on
account of non-compliance of the said statutory provisions. In this regard, instances
have come to notice that such persons, who continue to carry on business and
therefore are required to have registration under GST, are not applying for revocation
of cancellation of registration as specified in section 30 of the CGST Act read with
rule 23 of the CGST Rules. Instead, such persons are applying for fresh registration.
Such new applications might have been made as such person may not have
furnished requisite returns and not paid tax for the tax periods covered under the
old/cancelled registration. Further, such persons would be required to pay all
liabilities due from them for the relevant period in case they apply for revocation of
cancellation of registration. Hence, to avoid payment of the tax liabilities, such
persons may be using the route of applying for fresh registration. It is pertinent to
mention that as per the provisions contained in proviso to sub-section (2) of section
25 of the CGST Act, a person may take separate registration on same PAN in the
same State.

3. Sub-section (10) of section 25 of the CGST Act read with rule 9 of the CGST Rules
provide for rejection of application for registration if the information or documents
submitted by the applicant are found to be deficient. It is possible that the applicant
may suppress some material information in relation to earlier registration. Some of
the information that may be concealed in the application for registration in FORM
GST REG -01 are S. No. 7 ‘Date of Commencement of Business’, S. No. 8 ‘Date on
which liability to register arises’, S. No. 14 ‘Reason to obtain registration’ etc. Such
persons may also not furnish the details of earlier registrations, if any, obtained under
GST on the same PAN.

4. It is hereby instructed that the proper officer may exercise due caution while
processing the application for registration submitted by the taxpayers, where the tax
payer is seeking another registration within the State although he has an existing
registration within the said State or his earlier registration has been cancelled. It is
clarified that not applying for revocation of cancellation of registration along with the
continuance of the conditions specified in clauses (b) and (c) of sub-section (2) of
section 29 of the CGST Act shall be deemed to be a “deficiency” within the meaning
of sub-rule (2) of rule 9 of the CGST Rules. The proper officer may compare the
information pertaining to earlier registrations with the information contained in the
present application, the grounds on which the earlier registration(s) were cancelled
and the current status of the statutory violations for which the earlier registration(s)
were cancelled. The data may be verified on common portal by fetching the details
of registration taken on the PAN mentioned in the new application vis-a-vis
cancellation of registration obtained on same PAN. The information regarding the
status of other registrations granted on the same PAN is displayed on the common
portal to both the applicant and the proper officer. Further, if required, information
submitted by applicant in S. No. 21 of FORM GST REG-01 regarding details of
proprietor, all partner/ Karta/ Managing Directors and whole time Director/
Members of Managing Committee of Associations/ Board of Trustees etc. may be
analysed vis-à-vis any cancelled registration having same details.

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5. While considering the application for registration, the proper officer shall ascertain if
the earlier registration was cancelled on account of violation of the provisions of
clauses (b) and (c) of sub-section (2) of section 29 of the CGST Act and whether the
applicant has applied for revocation of cancellation of registration. If proper officer
finds that application for revocation of cancellation of registration has not been filed
and the conditions specified in clauses (b) and (c) of sub-section (2) of section 29 of
the CGST Act are still continuing, then, the same may be considered as a ground for
rejection of application for registration in terms of sub-rule (2) read with sub-rule (4)
of rule 9 of CGST Rules. Therefore, it is advised that where the applicant fails to
furnish sufficient convincing justification or the proper officer is not satisfied with the
clarification, information or documents furnished, then, his application for fresh
registration may be considered for rejection.

• Appellate authority [Sec. 2(8) of CGSTA]: means an authority appointed or authorised

to hear appeals as referred to in section 107.
• Common working days [Sec. 2(27) of CGSTA]: in respect of a State or Union territory
shall mean such days in succession which are not declared as gazetted holidays by
the Central Government or the concerned State or Union territory Government.
• Input [Sec. 2(59) of CGSTA]: means any goods other than capital goods used or
intended to be used by a supplier in the course or furtherance of business.
• Input service distributor [Sec. 2(61) of CGSTA]: means an office of the supplier of
goods or services or both which receives tax invoices issued under section 31
towards the receipt of input services and issues a prescribed document for the
purposes of distributing the credit of central tax, State tax, integrated tax or Union
territory tax paid on the said services to a supplier of taxable goods or services or
both having the same Permanent Account Number as that of the said office.
• Tax period [Sec. 2(106)]: means the period for which the return is required to be
furnished.

Explain the term Input Service Distributor used under the Central Goods and Services Tax
Act, 2017
[CS-Prof, Dec 2017]

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CGSTA, 2017
• Section 16: Eligibility and Conditions for taking ITC
• Section 17: Apportionment of Credit and Blocked Credits
• Section 18: Availability of Credit in Sp. Circumstances
• Section 20: Distribution of Credit by ISD
• Section 21: Recovery of Credit Distributed in Excess

(1) Every registered person

shall be entitled to take credit of input tax charged
on the inward supply of goods or services
used or intended to be used in the course or furtherance of his business,
subject to prescribed conditions and in the manner specified in Section 49.
This amount shall be credited to the e-CrL of the registered person.

(1) The ITC shall be availed by a registered person, including the ISD, on the basis of any
of the following documents –
o An invoice issued by the supplier u/s 31
o An invoice issued as per Section 31(3)(f), subject to payment of tax
o A dr. note issued u/s 34
o A BoE or any similar document prescribed under the CA, 1962 for the
assessment of IGST on imports
o An ISD invoice/ cr. note/ any other document issued u/r 54(1)

(2) ITC shall be availed only if all the applicable particulars as specified in the Tax
Invoice, Credit and Debit Notes Rules are contained in the said document, and such
relevant information is furnished in FORM GSTR-2.
However, in case the said document does not contain all the specified particulars,
but contains the details of
o amount of tax charged,
o description of goods/ services,
o total value of supply,
o GSTIN of the supplier and recipient and
o place of supply (if supply is inter-state),
the ITC may be availed by such registered person.

(3) No ITC shall be availed by a registered person for any tax that has been paid under
any order of demand on account of fraud, wilful misstatement or suppression of
facts.

(4) ITC to be availed by a registered person in respect of invoices/ dr. notes which have
not been declared by the suppliers u/s 37(1) shall not exceed 20% of the eligible ITC

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available in respect of invoices/ dr. notes which have been so declared by the
suppliers.

(2) Overruling this section, no credit shall be allowed to an entitled registered person
unless –
o he possesses a tax invoice, debit note or any other prescribed tax paying
document from a registered supplier
o he has received the goods/ services
▪ It shall be deemed that the registered person has received the supply of
–
➢ goods, if such goods are delivered by the supplier
to a recipient or any other person, agent or otherwise,
on the direction of such registered person,
before or during the movement of goods,
either by transferring the documents of title to goods or
otherwise.
➢ services, if such services are provided by the supplier
to any person
on the direction of and on account of such registered person.
(c) the tax charged for such supplies has actually been paid to the Government,
whether in cash or through utilization of admissible credit
subject to section 41.
(d) he has furnished the required return u/s 39.
• Where the goods against an invoice are received in lots/ instalments,
the credit shall be allowed upon receipt of the last lot/ instalment.
• In case the recipient does not pay to the supplier
the value of supply along with the tax amount, except the RCM cases,
within 180 days of the invoice date,
the amount of ITC availed shall be reversed and added to his output tax liability
along with interest on it, in the prescribed manner.
• The recipient shall be entitled to take the credit
on payment of the value of supply and the tax payable thereon.

(1) A registered person who has availed ITC on any inward supply but fails to pay the
consideration and applicable tax to the supplier within the time limit u/s 16(2), shall
furnish such details in FORM GSTR-2 for the month immediately following the period
of 180 days from the date of invoice.
However, in case of supplies made without consideration, the value of supplies shall
be deemed to have been paid for the purpose of Section 16(2).
Moreover, the value of supply as per amount included u/s 15(2)(b) shall also be
deemed to have been paid for the purpose of the said section.

(2) The amount of ITC referred in (1) shall be added to the OTL of the registered person
for the month in which the details are furnished.

(3) The registered person shall be liable to pay interest @ notified u/s 50(1) for the period
starting from the date of availing credit till the date when the amount added to the
OTL is paid.

(4) The time limit specified in Sec. 16(4) shall not apply to a claim for re-availing any
credit that had been reversed earlier.

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M/s Alpha Limited, Ahmedabad receives the input services from M/s Beta Limited of
Mumbai who raises the invoice for supply of services on 25th November, 2017 and availed
the credit on the same date. Find the time limit within which M/s Alpha Limited is required
to pay the bill amount to M/s Beta Limited. Also explain the consequences if payment is not
made within the stipulated period as mentioned in Section 16(2) of CGST Act.
[CMA-Inter, Jun 2018]

24 May, 2018

A registered supplier of taxable goods supplied goods valued at ₹ 2,24,000 (inclusive of

CGST ₹ 12,000 and SGST ₹ 12,000) to Mohan Ltd. under the forward charge on 15-08-2017
for which tax invoice was also issued on the same date. The inputs were received by
Mohan Ltd. on 15-08-2017. Mohan Ltd. availed credit of ₹ 24,000 on 18-08-2017. But
Mohan Ltd. did not make any payment towards such supply along with tax thereon to the
supplier. Is Mohan Ltd. eligible to avail Input Tax Credit on such supply? What are the
consequences of such non-payment by Mohan Ltd.
Discuss Input Tax Credit provisions if Mohan Ltd. makes the payment of ₹ 2,24,000 to the
supplier on 18-03-2018.
[CA-Final, Nov 2018]

Explain the consequences according to provisions of GST law, if a recipient of goods or

services or both does not make payment for the supply within 180 days.
[CS-Prof, Dec 2018]

(3) In case the registered person has claimed depreciation

on the tax component of the cost of capital goods and p&m
under IT Act, 1961,
the ITC on such component shall not be allowed.
o Plant and machinery means apparatus, equipment, and machinery
fixed to earth by foundation or structural support
that are used for making outward supply of goods/ services
and includes such foundation and structural supports
but excludes—
▪ land, building or any other civil structures;
▪ telecommunication towers; and
▪ pipelines laid outside the factory premises

(4) ITC in respect of any invoice or debit note shall not be allowed after
o the due date of furnishing of the monthly return for September following the
end of financial year to which such invoice or invoice relating to such debit note
pertains or
o the actual date of furnishing of the relevant annual return
whichever is earlier.

PQR Company Ltd., a registered supplier of Bengaluru (Karnataka), is a manufacturer of

goods. The company provides the following information pertaining to GST paid on input
supplies during the month of April, 2018:
Sl. No. Items GST paid in (₹)
(i) Life Insurance premium paid by the company on the life of 1,50,000
factory employees as per the policy of the company
(ii) Raw materials purchased for which invoice is missing but 38,000
delivery challan is available

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(iii) Raw materials purchased which are used for zero-rated 50,000
outward supply
(iv) Works contractor’s service used for repair of factory building 30,000
which is debited in the profit and loss account of company
(v) Company purchased the capital goods for ₹ 4,00,000 and 48,000
claimed depreciation of ₹ 44,800 (@ 10%) on the full amount
of ₹ 4,48,000 under Income Tax Act, 1961
Other information :-
(i) In the month of September, 2017, PQR Company Ltd. availed input tax credit of ₹
2,40,000 on purchase of raw material, which was directly sent to job worker’s
premises under a challan on 25-09-2017. The said raw material has not been
received back from the Job worker up to 30-04-2018.
(ii) All the above input supplies except (iii) above have been used in the manufacture of
taxable goods.
Compute the amount of net Input Tax Credit available for the month of April, 2018 with
necessary explanations for your conclusion for each item. You may assume that all the
other conditions necessary for availing the eligible input tax credits have been fulfilled.
[CA-Final, Nov 2018]

Calculation of ITC available

Particulars Amount (₹)
Life insurance premium paid -
Raw materials purchased -
Raw materials purchased for zero-rated supplies 50,000
Works contractor’s service used 30,000
Capital goods purchased -
Total 80,000

Patel of Surat, Gujarat supplied goods to Patil of Mumbai, Maharashtra for ₹ 1,20,000
(excluding GST) but after adding 30% profit margin (on cost). Patil is also a taxable person.
IGST rate is 18%. The amount of input tax credit that can be availed and the maximum time
limit for availing such input tax credit by Patil of Mumbai, Maharashtra as per CGST Act,
2017 is ...................
(A) ₹ 28,080 and within 6 months from the date of issue of tax invoice
(B) ₹ 7,020 and within next quarter from the date of issue of tax invoice
(C) ₹ 21,600 and within 1 year from the date of issue of tax invoice
(D) None of the above
[CS-Exec, Dec 2018]

(C) ₹ 21,600 and within 1 year from the date of issue of tax invoice

(1)

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Goods/ Services

Business Purposes Other Purposes

Where the goods/ services are used partly for business purpose and partly for other
purposes,
the credit shall be restricted to the IT as is attributable for business purposes.

(2)

Goods/ Services

Taxable Supplies Exempt Supplies

(including zero-rated supplies)

Where the goods/ services are used partly for taxable supplies (including zero-rated
supplies) and partly for exempt supplies,
the credit shall be restricted to the IT as is attributable for taxable supplies (including
zero-rated supplies).

(1) The IT that attract the provisions of section 17(1)/ (2) shall be attributed to the
business purposes or for making taxable supplies in the following manner –
(a) T = Total IT in a tax period (say, ₹ 1,00,000)
(b) T1 = IT out of T attributable to inputs used exclusively for non-business
purposes (say, ₹ 30,000)
(c) T2 = IT out of T attributable to inputs intended to be used exclusively for
making exempt supplies (say, ₹ 20,000)
(d) T3 = IT out of T in respect of inputs on which credit is not available u/s 17(5)
(say, ₹ 10,000)
(e) ITC credited to the e-CrL [C1], is calculated as –
C1 = T – (T1 + T2 + T3)
= ₹ 1,00,000 - ₹ (30,000 + 20,000 + 10,000)

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= ₹ 40,000
(f) T4 = ITC attributable to inputs intended to be used exclusively for making
supplies other than exempted but including zero-rated supplies (say, ₹
10,000)
NOTE: In case of supply of construction services, value of T4 shall be “0”
during the construction phase because inputs and input services will be
commonly used for construction of apartments booked both on/ before and
after the date of completion/ first occupation.
(g) T1, T2, T3 and T4 shall be determined and declared by the registered person at
the invoice level in FORM GSTR-2 and at summary level in FORM GSTR – 3B
(h) The balance ITC shall be called common credit [C2] and calculated as –
C2 = C1 – T4
= ₹ 40,000 - ₹ 10,000
= ₹ 30,000
(i) The balance ITC attributable towards exempt supplies [D1] shall be calculated
as –
D1 = (E ÷ F) × C2
= (₹ 2,00,000 ÷ ₹ 3,00,000) × ₹ 30,000
= ₹ 20,000
E = the aggregate value of exempt supplies during the tax period (excl. ED,
CST etc.) (say, ₹ 2,00,000)
F = the total turnover in the State of the registered person during the tax
period (excl. ED, CST etc.) (say, ₹ 3,00,000)
In case of supply of construction services, the value of ‘(E ÷ F)’ for a tax
period shall be calculated for each project separately, taking value of E and F
as under –
E = aggregate carpet area of apartments whose construction is exempt +
aggregate carpet area of apartments whose construction is not exempt, but
are identified by the promoter to be sold after completion/ first occupation.
F = aggregate carpet area of the apartments in the project
NOTE: In the tax period in which completion/ first occupation of the project
takes place, value of E shall also include the aggregate carpet area of the
apartments which have not been booked till the date of such completion/
occupation.
NOTE: Carpet area of apartments, tax on construction of which is paid/
payable at the rates specified for Sl. No. 3 (i)/ (ia)/ (ib)/ (ic)/ (id) in Notfn. No.:
11/2017 – CT(R) shall be considered for calculation of E.
However, in case the aforesaid information is not available for the particular
tax period, the values of E and F of the last tax period for which such
information is available, before the concerned month, shall be used for
calculation.
(j) The balance ITC attributable to non-business purposes [D2] shall be
calculated as follows:
D2 = 5% × C2
= 5% × ₹ 30,000
= ₹ 1,500
(k) The remainder ITC shall be the eligible ITC attributed to business purposes
and for supplies other than exempted but including zero-rated supplies [C3],
where:
C3 = C2 – (D1 + D2)
= ₹ 30,000 – ₹ (20,000 + 1,500)
= ₹ 8,500
(l) C3 shall be computed separately for ITC of CGST, SGST, UTGST and IGST and
declared in FORM GSTR – 3B or through FORM GST DRC - 03
(m) Aggregate of D1 and D2 (₹ 20,000 + ₹ 1,500 = ₹ 21,500) shall be reversed by
the registered person in FORM GSTR – 3B or through FORM GST DRC - 03.

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However, where the IT relating to inputs used partly for non-business

purposes and partly for exempt supplies has been identified and segregated
at the invoice level by the registered person, it shall be included in T1 and T2
respectively, and the remaining ITC on such inputs shall be included in T4.

(2) The ITC, except in case of supply of construction services, determined under (1) shall
be calculated finally for the FY
before the due date for furnishing return for September of the following FY
in the same manner
(a) where the amount calculated finally for (D1 + D2) exceeds the amount
determined under (1) for (D1 + D2), such excess shall be reversed by the
registered person in FORM GSTR – 3B or through FORM GST DRC - 03 in the
month of or before September of the following FY and he shall be liable to
pay interest on the said excess @ as per Sec. 50(1) for the period from 01 Apr
till the date of payment.
(b) where the amount calculated finally for (D1 + D2) is less than the amount
determined under (1) for (D1 + D2), such difference shall be claimed as credit
by the registered person in his return for the month of or before September
of the following FY.

(3) In case of supply of construction services, the IT determined under (1) shall be
calculated finally, for each ongoing project or project which commences on or after
01 April 2019, which did not undergo or did not require transition of ITC due to the
change of rates of tax, for the entire period
(a) commencing from commencement of the project or 1 July, 2017, whichever is
later, and
(b) ending on the date of completion/ first occupation,
before the due date for furnishing the return for the month of September of the FY
following the FY of completion/ first occupation,
in the manner prescribed in (1), with the modifications that value of ‘(E ÷ F)’ shall be
calculated taking value of E and F as under:
E = aggregate carpet area of apartments whose construction is exempt + aggregate
carpet area of apartments whose construction is not exempt, but are identified by
the promoter to be sold after completion/ first occupation.
F = aggregate carpet area of the apartments in the project;
and -
(a) where the amount calculated finally for (D1 + D2) exceeds the amount
determined under (1) for (D1 + D2), such excess shall be reversed by the
registered person in FORM GSTR – 3B or through FORM GST DRC - 03 in the
month of or before September of the following FY and he shall be liable to
pay interest on the said excess @ as per Sec. 50(1) for the period from 01 Apr
till the date of payment; or
(b) where the amount calculated finally for (D1 + D2) is less than the amount
determined under (1) for (D1 + D2), such difference shall be claimed as credit
by the registered person in his return for the month of or before September
of the following FY.

(4) In case of supply of construction services,

the IT determined under (1) shall be calculated finally,
for commercial portion in each project (except RREP)
which underwent transition of ITC due to change of rates of tax on 1 April 2019 as per
Notfn. No.: 11/2017 – CT(R),
for the entire period from the commencement of the project or 1 July 2017, whichever
is later,
to the completion/ first occupation,
before the due date for furnishing of the return for September following the end of FY

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in which the completion certificate is issued or first occupation takes place of the
project, in the following manner:
(a) The aggregate amount of common credit on commercial portion in the
project (C3aggregate_comm) shall be calculated as under,

C3aggregate_comm = [aggregate of C3 determined under (1) above for the tax

periods 1 July, 2017 - 31 March, 2019 × (AC ÷ AT)] + [ aggregate
of C3 determined under (1) above for the tax periods starting
from 1 April, 2019 to the date of completion/ first occupation]
Where –
AC = total carpet area of the commercial apartments in the project
AT = total carpet area of all apartments in the project
(b) The amount of final eligible common credit on commercial portion in the
project (C3final_comm) shall be calculated as under

C3final_comm = C3aggregate_comm × (E ÷ F)

Where –
E = total carpet area of commercial apartments which have not been booked
till the date of completion/ first occupation.
F = AC = total carpet area of the commercial apartments in the project
(c) In case C3aggregate_comm > C3final_comm, such excess shall be reversed by the
registered person in FORM GSTR-3B or through FORM GST DRC-03 in the
month of or before September following the end of the FY in which the
completion certificate is issued or first occupation takes place of the project
and the said person shall be liable to pay interest on the said excess amount
@ specified u/s 50(1) for the period starting from the 01 April of the
succeeding FY till the date of payment;
(d) In case C3final_comm > C3aggregate_comm, such excess amount shall be claimed as
credit by the registered person in his return for the month of or before
September following the end of the FY in which the completion certificate is
issued or first occupation takes place of the project.

(5) IT determined under (1) shall not be required to be calculated finally on completion/
first occupation of an RREP which underwent transition of ITC due to change of rates
of tax on 1 April, 2019 as per Notfn. No.: 11/2017 – CT(R).

(6) Where any input or input service are used for more than one project, ITC w.r.t. such
input or input service shall be assigned to each project on a reasonable basis and
credit reversal pertaining to each project shall be carried out as per (3) above.

(1) Subject to section 16(3), the ITC on cap goods that attract the provisions of section
17(1)/ (2) shall be attributed to the business purposes or for making taxable supplies
as follows –
(a) The IT on cap goods used or intended to be used exclusively for non-
business purposes or for making exempt supplies shall be indicated in FORM
GSTR-2 and FORM GSTR – 3B and shall not be credited to his e-CrL.
(b) The IT on cap goods used or intended to be used exclusively for making
supplies other than exempt supplies but including zero-rated supplies shall
be indicated in FORM GSTR-2 and FORM GSTR – 3B and shall be credited to
his e-CrL.

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(c) The IT on cap. goods, not covered under (a) and (b) [A], shall be credited to
the e-CrL and the useful life of such goods shall be taken as 5 years from the
invoice date.
However, where any cap. goods earlier covered under (a) is subsequently
covered under this clause, A shall be calculated by reducing the IT by 5% per
qtr. or part thereof and it shall be credited to the e-CrL
NOTE: An item of cap. goods declared under (a) on its receipt shall not attract
section 18(4), if it is subsequently covered under this clause.
NOTE: In case of supply of construction services, the amount of IT in respect
of capital goods used or intended to be used exclusively for effecting supplies
other than exempted supplies but including zero rated supplies, shall be “0”
during the construction phase because capital goods will be commonly used
for construction of apartments booked on/ before the date of completion/
first occupation of the project, and those which are not booked by the said
date.
(d) The aggregate of A credited to e-CrL = Tc shall be the common credit on cap.
goods for a tax period.
However, where any cap. goods earlier covered under (b) is subsequently
covered under (c), A shall be calculated by reducing the IT by 5% per qtr. or
part thereof and then it shall be added to Tc
(e) The ITC attributable to a tax period on common cap. goods during their useful
life [Tm] shall be calculated as –
Tm = Tc ÷ 60
(f) The ITC at the beginning of a tax period on all common capital goods whose
useful life remains during the tax period [Tr] shall be the aggregate of Tm of all
such capital goods;
(g) The common ITC attributable towards exempt supplies [Te] shall be
calculated as –
Te = (E ÷ F) × Tr
E = the aggregate value of exempt supplies during the tax period (excl. ED,
CST etc.)
F = the total turnover in the State of the registered person during the tax
period (excl. ED, CST etc.)
In case of supply of construction services, the value of ‘(E ÷ F)’ for a tax
period shall be calculated for each project separately, taking value of E and F
as under –
E = aggregate carpet area of apartments whose construction is exempt +
aggregate carpet area of apartments whose construction is not exempt, but
are identified by the promoter to be sold after completion/ first occupation.
F = aggregate carpet area of the apartments in the project
NOTE: In the tax period in which completion/ first occupation of the project
takes place, value of E shall also include the aggregate carpet area of the
apartments which have not been booked till the date of such completion/
occupation.
NOTE: Carpet area of apartments, tax on construction of which is paid/
payable at the rates specified for Sl. No. 3 (i)/ (ia)/ (ib)/ (ic)/ (id) in Notfn. No.:
11/2017 – CT(R) shall be considered for calculation of E.
However, in case this information is not available for the particular tax period,
the values of E and F of the last tax period for which such information is
available, before the concerned month, shall be used for calculation.
(h) This amount Te along with applicable interest shall be added to the OTL
during every tax period of the useful life of the concerned cap goods.
(i) Te shall be computed separately for ITC of CGST, SGST, UTGST and IGST and
declared in FORM GSTR – 3B.

(2) In case of supply of construction services,

the amount of common credit attributable towards exempted supplies (Tefinal) shall

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be calculated finally for the entire period

from the commencement of the project or 1 July, 2017, whichever is later,
to the completion/ first occupation of the project,
for each project separately,
before the due date for furnishing of the return for September following the end of FY
in which the completion certificate is issued or first occupation takes place of the
project,
as under:
Tefinal = [(E1 + E2 + E3) ÷ F] × Tcfinal
Where –
E1 = aggregate carpet area of the apartments whose construction is exempt from tax
E2 = aggregate carpet area of the apartments whose supply is partly exempt and
partly taxable, due to the change of rates of tax on 1 April, 2019, which shall be
calculated as under –
E2= [Carpet area of such apartments] × [V1 ÷ (V1 + V2)],
Where –
V1 = total value of supply of such apartments which was exempt from tax;
and
V2 = total value of supply of such apartments which was taxable
E3 = aggregate carpet area of the apartments whose construction is not exempt from
tax, but have not been booked till the completion/ first occupation of the project,
F= aggregate carpet area of the apartments in the project;
Tcfinal = aggregate of Afinal in respect of all capital goods used in the project, and Afinal
for each capital goods shall be calculated as under:
Afinal= A × (no. of months for which capital goods is used for the project ÷ 60)
and –
(a) in case, value of Tefinal exceeds the aggregate of amounts of Te determined for
each tax period under (1), such excess shall be reversed by the registered
person in FORM GSTR-3B or through FORM GST DRC-03 in the month of or
before September following the end of the FY in which the completion
certificate is issued or first occupation takes place of the project and the said
person shall be liable to pay interest on the said excess amount @ specified
u/s 50(1) for the period starting from 01 April of the succeeding FY till the date
of payment; or
(b) where aggregate of amounts of Te determined for each tax period under (1)
exceeds Tefinal, such excess amount shall be claimed as credit by the
registered person in his return for or before September following the end of
the FY in which the completion certificate is issued or first occupation takes
place of the project.

(3) The amount Tefinal and Tcfinal shall be computed separately for ITC of CGST, SGST,
UTGST and IGST.

(4) Where any capital goods are used for more than one project, ITC w.r.t. such capital
goods shall be assigned to each project on a reasonable basis and credit reversal
pertaining to each project shall be carried out as per (2).

(5) Where any capital goods used for the project have their useful life remaining on the
completion of the project, ITC attributable to the remaining life shall be availed in the
project in which the capital goods is further used.

NOTE: For Rule 42 and 43,

1. the aggregate value of exempt supplies shall exclude
(a) -
(b) the value of supply of services of accepting deposits, extending loans or
advances, for which the consideration is represented in the form of interest

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or discount
except when such services are supplied by a bank/ FI/ NBFC
(c) the value of supply of services of transportation of goods by a vessel
from a customs station in India to a place outside India.
2.
o The term “project” shall mean a REP/ RREP where RREP shall mean a REP in
which the carpet area of the commercial apartments is not more than 15% of
the total carpet area of all the apartments in the REP.
o The term “commercial apartment” shall mean an apartment other than a
residential apartment, while a “residential apartment” shall mean an
apartment intended for residential use as declared to the RERA/ competent
authority, i.e. the local authority or any authority created/ established under
any law by the CG/ SG/ UT Government, which exercises authority over land
under its jurisdiction, and has powers to give permission for development of
such immovable property.
o “an apartment booked on/ before the date of completion/ first occupation of
the project” shall mean an apartment which meets all the following 3
conditions –
(a) part of supply of construction of the apartment service has time of
supply on/ before the said date, and
(b) at least one instalment has been credited to the bank account of the
registered person on/ before the said date as consideration, and
(c) an allotment letter/ sale agreement/ any other similar document
evidencing booking of the apartment has been issued on/ before the
said date.

Soren Enterprises is in possession of certain capital goods and purchases more of them as
per the following particulars:
Particulars Input tax on Capital Goods Status of its use
(₹)
Capital Goods A 12,000 Exclusively used for non-
business purpose.
Capital Goods B 24,000 Exclusively used for zero-
rated supplies.
Capital Goods C 60,000 Used both for taxable and
exempt supplies.
Capital goods D (has been 1,20,000 Now there is change in use,
exclusively used for 2 years both for taxable and
for exempted supplies) exempt supplies.
Capital goods E (has been 1,80,000 Now there is change in use,
exclusively used for 3 years both for taxable and
for taxable supplies) exempt supplies
Useful life of all the above capital goods is considered as 5 years.

Apportion the input tax credit of capital goods, while being informed that aggregate value
of exempt supplies during the tax period being ₹ 6,00,000 and total turnover during the
tax period being ₹ 12,00,000.
[CA-Final, May 2018]

Extract of e-CrL (Capital Goods only)

Particulars Amount (₹)
Opening balance [ITC of Capital Goods E being used exclusively for taxable 1,80,000
supplies till date]
Add: ITC of Capital Goods A [See Note (i)] -
Add: ITC of Capital Goods B 24,000
Add: ITC of Capital Goods C 60,000

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Add: ITC of Capital Goods D [See Note (ii)] 72,000

Total 3,36,000
NOTE:
(i) Input tax of ₹ 12,000 in respect of Capital Goods A shall not be added to the e-CrL
since it is exclusively used for non-business purpose.
(ii) The input tax of ₹ 1,20,000 in respect of Capital Goods D has been reduced by 5%
per quarter for 2 years during which it was used exclusively for exempted supplies,
as calculated in the following table.

Calculation of common ITC attributable towards exempt supplies

Particulars Amount (₹)
IT on Capital Goods C 60,000
Add: Attributable IT on Capital Goods D [1,20,000 – (5% × 8) of 1,20,000] 72,000
Add: Attributable IT on Capital Goods E [1,80,000 – (5% × 12) of 1,80,000] 72.000
Total common ITC on Capital Goods 2,04,000
Common ITC attributable to the concerned tax period [2,04,000 ÷ 60] 3,400
Common ITC attributable to exempt supplies for the concerned tax period 1,700
[3,400 × (6,00,000 ÷ 12,00,000)]

Hence, the amount of ₹ 1,700 shall be added to the OTL of Seron Ltd. in the concerned tax
period and thereafter till the life of the capital goods.

With the help of information given below in respect of a manufacturer for the month of
September, 2017, calculate eligible input tax credit for the month and also calculate the
amount of ITC to be reversed in September, 2017 and October, 2017. There is no carry
forward credit or reversal requirement. Only the current month’s information is to be
considered for calculation purposes.
Sl. No. Particulars Amount in ₹
1. Outward supply of taxable goods 70,000
2. Outward supply of exempted goods 40,000
Total Turnover 1,10,000
3. Inward supplies GST paid (₹)
Capital goods purchased which are exclusively used for taxable 2,000
outward supply
Capital goods purchased which are exclusively used for 1,800
exempted outward supply
Capital goods purchased which are used for both taxable and 4,200
exempted outward supply
[CA-Final, Nov 2018]

Calculation of eligible ITC

Particulars Amount (₹)
Capital goods purchased which are exclusively used for taxable outward 2,000
supply
Capital goods purchased which are exclusively used for exempted -
outward supply
Total 2,000
Calculation of ITC to be reversed
Particulars Amount (₹)
Capital goods purchased which are used for both taxable and exempted 4,200
outward supply
Common ITC attributable to a tax period [4,200 ÷ 60] 70
Common ITC attributable to exempt supplies for a tax period [70 × (40,000 25.45
÷ 1,10,000)]
ITC to be reversed in September, 2017 25.45

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ITC to be reversed in October, 2017 25.45

(3) The value of exempt supply under the previous sub-section

shall be such as prescribed, and include
o Supplies on which tax is payable on reverse charge basis
o Transactions in securities
o Sale of land
o Sale of building, other than as mentioned in Sch. II
NOTE: “The value of exempt supply” shall not include the value of activities/
transactions specified in Schedule III, except the sale of land or building.

For determining the value of exempt supply –

(a) The value of land and building = The value adopted for paying stamp duty, and
(b) The value of security = 1% of the sale value of such security

CGST (ROD) Order No. 04/2019 – CT

For the removal of difficulties, it is hereby clarified that in case of supply of services covered
by clause (b) of paragraph 5 of Schedule II of the said Act, the amount of credit attributable
to the taxable supplies including zero-rated supplies and exempt supplies shall be
determined on the basis of the area of the construction of the complex, building, civil
structure or a part thereof, which is taxable and the area which is exempt.

(4) A bank/ FI/ NBFC, engaged in supplying services by way of

accepting deposits, extending loans or advances
shall have the following 2 options:
o Comply with sub-section (2), or
o Every month avail of 50% of eligible ITC in that month, and the rest shall lapse.
• Option once exercised shall not be withdrawn during the FY
• Restriction of 50% shall not apply on supplies made by one registered person to
another having the same PAN.

A bank/ FI/ NBFC engaged in the supply of services of accepting deposits or extending
loans/ advances that opts to not to comply with section 17(2) shall follow the following
procedure –
(a) The said bank shall not avail the credit of –
o The tax paid on inputs and input services that are used for non-business
purposes, and
o Supplies specified in Section 17(5)
in FORM GSTR-2.

(b) The said bank shall avail the ITC on supplies made by one registered person to
another having the same PAN

(c) 50% of the remaining amount of input tax shall be the ITC admissible to the bank and
shall be furnished in FORM GSTR-2

(d) The aforementioned amounts shall be credited to the e-CrL of the said bank subject
to the provisions of sections 41, 42 and 43.

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(5) Overruling Section 16(1) and 18(1), ITC shall not be available in respect of the following –
(a) motor vehicles for transportation of persons
having approved seating capacity upto 13 persons (including the driver),
except when they are used for making the following taxable supplies –
(A) further supply of such motor vehicles, or
(B) transportation of passengers, or
(C) imparting training on driving such motor vehicles
(aa) vessels and aircraft except when they are used –
(i) for making the following taxable supplies –
(A) further supply of such vessels/ aircraft, or
(B) transportation of passengers, or
(C) imparting training on navigating such vessels, or
(D) imparting training on flying such aircraft,
(ii) for transportation of goods
(ab) services of general insurance, servicing, repair and maintenance
of motor vehicles/ vessels/ aircraft referred to in (a)/ (aa).
However, the ITC for such services shall be available –
(i) if the motor vehicles/ vessels/ aircraft referred to in (a)/ (aa) are used for
the purposes specified therein,
(ii) if received by a taxable person engaged –
(I) in the manufacture of such motor vehicles/ vessels/ aircraft or
(II) in the supply of general insurance services for such motor
vehicles/ vessels/ aircraft insured by him
(b) the following supply of goods/ services –
(i) food and beverages, outdoor catering, beauty treatment, health services,
cosmetic and plastic surgery, leasing, renting/ hiring of motor vehicles/
vessels/ aircraft referred to in (a)/ (aa) except when used for the
purposes specified therein, life insurance and health insurance.
However, the ITC for such goods/ services shall be available where an
inward supply of such goods/ services is used by a registered person for
making an outward supply of the same category or as an element of a
taxable composite/ mixed supply;
(ii) membership of a club, health and fitness centre, and
(iii) travel benefits extended to employees on vacation such as LTC/ HTC
However, the ITC for such goods/ services shall be available,
if it is obligatory for an employer to provide the same to its employees
under any law.
(c) works contract services when supplied for construction of an immovable
property (other than plant and machinery) except where it is an input service
for further supply of works contract service.
NOTE: Construction includes re-construction, renovation, additions or
alterations or repairs, to the extent of capitalisation, to the said immovable
property.
(d) goods/ services received by a taxable person for construction of an immovable
property (other than plant or machinery) on his own account including when
such goods/ services are used in the course or furtherance of business.
(e) goods/ services on which tax has been paid under section 10;
(f) goods/ services received by a NRTP except on goods imported by him;
(g) goods/ services used for personal consumption;
(h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free
samples; and
(i) any tax paid in accordance with the provisions of sections 74, 129 and 130

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State whether input tax credit is available in the following cases:

(i) Motor car purchased by driving school for imparting training to the customers.
Whether your answer would be different if the motor car is purchased by a
manufacturing company to be used by its Managing Director for official purposes.
(ii) Amount spent for construction of factory building
(iii) Gift articles purchased on the occasion of Diwali to be distributed among the
employees.
[CMA-Inter, Jun 2018]

(i) Yes. Yes.

(ii) No.
(iii) No.

(6) The Government may prescribe the manner in which

the credit as mentioned in (1) and (2) shall be attributed.

Fun Pharma Private Limited, a registered supplier is engaged in the manufacture of taxable
goods. The company provides the following information of GST paid on the purchases
made/ input services availed by it during the month of September 2017:
Particulars GST paid (₹)
(i) Purchase of cabs used for the transportation of its employees 3,30,000
(ii) Inputs consisting of three lots, out of which first lot was received 1,25,000
during the month
(iii) Capital Goods (out of three items, invoice for one item was missing 2,50,000
and GST paid on that item was ₹ 25,000
(iv) Outdoor catering service availed on Women’s day 72,000
Determine the amount of Input Tax Credit available with M/s Fun Pharma Private Limited
for the month of September 2017 by giving necessary explanations for treatment of various
items. All the conditions necessary for availing the input tax credit have been fulfilled.
[CA-Inter, May 2018]

Calculation of ITC available

Particulars Amount (₹)
Cabs for employees -
Inputs for which only 1st lot is received -
CG (excluding the item for which invoice is missing) 2,25,000
Outdoor catering service -
Total 2,25,000

Which of the following expenditure is eligible for input tax credit?

(A) Membership fee of a club
(B) Home travel concession extended to employees
(C) Goods given as free gifts
(D) Caterer using the service of another caterer
[CS-Exec, Dec 2017]

(D) Caterer using the service of another caterer

Which are the input goods and services on which a registered dealer cannot claim Input
Tax credit under Section 17(5) of CGST Act, 2017. Give any six points/ items.
[CMA-Final, Jun 2018]

A company has entered into an agreement with a customer for the manufacture and
supply of cement pipes for their exclusive use. A company manufactured the product but
before receiving the inspection certificate, their customer rejected some quantity of goods

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on the grounds of quality. As per the agreement the rejected quantity will be destroyed in
front of the customer and shall not be sold. Examine the issue in the light of statutory
provisions and suggest future course of action to the assessee as to whether any liability
arises as per the provisions of GST law.
[CA-Final, Nov 2018]

Harshgeet Pvt. Ltd. a registered supplier is engaged in the manufacture of taxable goods.
The company provides the following information pertaining to GST paid on the purchases
made/input services availed by it during the month of July, 2018:
Sr. No. Particulars GST Paid
(1) Raw Material (To be received in September, 2018) 2,50,000
(2) Membership of a club availed for employees working in the factory 1,45,000
(3) Inputs to be received in 5 lots, out of which 3rd lot was received 80,000
during the month
(4) Trucks used for transport of raw material 40,000
(5) Capital Goods (out of 3 items, invoice for 2 items is missing and GST 1,50,000
paid on that item is ₹ 80,000.)
Determine the amount of Tax Credit available with Harshgeet Pvt. Ltd. for the month of
July, 2018 by giving the necessary explanation for treatment of various items. All the
conditions necessary for availing the ITC have been fulfilled.
[CA-IPCE, Nov 2018]

Calculation of ITC
Particulars GST (₹)
Raw material Nil
Membership of a club availed for employees working in the factory Nil
Inputs to be received in 5 lots, out of which 3rd lot was received during the Nil
month
Trucks used for transport of raw material 40,000
Capital goods 70,000
Total 1,10,000

Jamku Ltd. a registered person is engaged in the business of spices. It provides following
details for GST paid during October, 2018.
No. Particulars GST Paid (₹)
1. Raw spices purchase
o Raw spices used for furtherance of business 50,000
o Raw spices used for personal use of Directors 20,000
2. Electric machinery purchased to be used in the manufacturing 25,000
process.
3. Motor vehicle used for transportation of the employee. 55,000
4. Payment made for material and to contractor for construction of 1,25,000
staff quarter
Determine the amount of ITC available to Jamku Ltd. for the month October, 2018 with all
related workings and explanations.
All the conditions necessary for availing the ITC have been fulfilled.
[CA-IPCE, May 2019]

Calculation of ITC
Particulars GST (₹)
Raw spices purchased –
o for furtherance of business 50,000
o for personal use of directors Nil
Electric machinery purchased for manufacturing process 25,000
Motor vehicles used for transportation of the employee Nil

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Payment made for material and to contractor for construction of staff quarter Nil
Total 1,10,000

Siddhi Ltd. is a registered manufacturer engaged in taxable supply of goods. Siddhi Ltd.
purchased the following goods during the month of January, 2019. The following
particulars are provided:
S. No. Particulars Input Tax (₹)
1 Capital goods purchased on which depreciation has been taken 15,000
on full value including input tax thereon
2 Goods purchased from Ravi Traders (Invoice of Ravi Traders is 20,000
received in month of January, 2019, but goods were received in
month of March, 2019)
3 Car purchased for making further supply of such car. Such car 30,000
is destroyed in accident while being used for test drive by
potential customers
4 Goods used for setting up telecommunication towers being 50,000
immovable property
5 Goods purchased from Pooja Ltd. (Full payment is made by 10,000
Siddhi Ltd. to Pooja Ltd. against such supply, but tax has not
been deposited by Pooja Ltd.
6 Truck purchased for delivery of output goods 80,000
Determine the amount of input tax credit (ITC) available by giving necessary explanations
for treatment of various items as per the provisions of the CGST Act, 2017. You may assume
that all the necessary conditions for availing the ITC have been complied with by Siddhi
Ltd.
[CA-Final, May 2019]

Calculation of ITC
Particulars GST (₹)
Capital Goods -
Goods purchased from Ravi Traders -
Car purchased for making further supply of such car -
Goods used for setting up telecommunication towers -
Goods purchased from Pooja Ltd. 10,000
Truck purchased for delivery of output goods 80,000
Total 90,000

Circular No. 72/ 46/2018-GST

Circular to clarify the procedure in respect of return of time expired drugs or medicines

2. It is clarified that the retailer/ wholesaler can follow either of the below mentioned
procedures for the return of the time expired goods:
(A) Return of time expired goods to be treated as fresh supply:
a) In case the person returning the time expired goods is a registered
person (other than a composition taxpayer), he may, at his option,
return the said goods by treating it is as a fresh supply and thereby
issuing an invoice for the same (hereinafter referred to as the, “return
supply”). The value of the said goods as shown in the invoice on the
basis of which the goods were supplied earlier may be taken as the
value of such return supply. The wholesaler or manufacturer, as the
case may be, who is the recipient of such return supply, shall be
eligible to avail Input Tax Credit (hereinafter referred to as “ITC”) of
the tax levied on the said return supply subject to the fulfilment of the
conditions specified in Section 16 of the CGST Act.

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b) In case the person returning the time expired goods is a composition

taxpayer, he may return the said goods by issuing a bill of supply and
pay tax at the rate applicable to a composition taxpayer. In this
scenario there will not be any availability of ITC to the recipient of
return supply.
c) In case the person returning the time expired goods is an unregistered
person, he may return the said goods by issuing any commercial
document without charging any tax on the same.
d) Where the time expired goods which have been returned by the
retailer/ wholesaler are destroyed by the manufacturer, he/ she is
required to reverse the ITC availed on the return supply in terms of
the provisions of clause (h) of sub-section (5) of section 17 of the
CGST Act. It is pertinent to mention here that the ITC which is
required to be reversed in such scenario is the ITC availed on the
return supply and not the ITC that is attributable to the manufacture
of such time expired goods.
Illustration: Supposedly, manufacturer has availed ITC of ₹ 10/ - at the time
of manufacture of medicines valued at ₹ 100/ -. At the time of return of such
medicine on the account of expiry, the ITC available to the manufacturer on
the basis of fresh invoice issued by wholesaler is ₹ 15/ -. So, when the time
expired goods are destroyed by the manufacturer he would be required to
reverse ITC of ₹ 15/ - and not of ₹ 10/ -.
(B) Return of time expired goods by issuing Credit Note:
a) As per sub-section (1) of Section 34 of the CGST Act the supplier can
issue a credit note where the goods are returned back by the
recipient. Thus, the manufacturer or the wholesaler who has supplied
the goods to the wholesaler or retailer, as the case may be, has the
option to issue a credit note in relation to the time expired goods
returned by the wholesaler or retailer, as the case may be. In such a
scenario, the retailer or wholesaler may return the time expired goods
by issuing a delivery challan. It may be noted that there is no time
limit for the issuance of a credit note in the law except with regard to
the adjustment of the tax liability in case of the credit notes issued
prior to the month of September following the end of the financial
year and those issued after it.
b) It may further be noted that if the credit note is issued within the time
limit specified in sub-section (2) of section 34 of the CGST Act, the tax
liability may be adjusted by the supplier, subject to the condition that
the person returning the time expired goods has either not availed the
ITC or if availed has reversed the ITC so availed against the goods
being returned.
c) However, if the time limit specified in sub-section (2) of section 34 of
the CGST Act has lapsed, a credit note may still be issued by the
supplier for such return of goods but the tax liability cannot be
adjusted by him in his hands. It may further be noted that in case time
expired goods are returned beyond the time period specified in the
sub-section (2) of section 34 of the CGST Act and a credit note is
issued consequently, there is no requirement to declare such credit
note on the common portal by the supplier (i.e. by the person who
has issued the credit note) as tax liability cannot be adjusted in this
case.
d) Further, where the time expired goods, which have been returned by
the retailer/ wholesaler, are destroyed by the manufacturer, he/ she
is required to reverse the ITC attributable to the manufacture of such
goods, in terms of the provisions of clause (h) of sub-section (5) of
section 17 of the CGST Act. This has been illustrated in table below:

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Date of Supply of Date of return of Treatment in terms

goods from time expired goods of tax liability &
manufacturer/ from retailer/ credit note
wholesaler to wholesaler to
wholesaler/ wholesaler/
retailer manufacturer
Case 1 1st July, 2017 20th September, Credit note will be
2018 issued by the
supplier
(manufacturer /
wholesaler) and
the same to be
uploaded by him
on the common
portal.
Subsequently, tax
liability can be
adjusted by such
supplier provided
the recipient
(wholesaler /
retailer) has either
not availed the ITC
or if availed has
reversed the ITC.
Case 2 1st July, 2017 20th October, 2018 Credit note will be
issued by the
supplier
(manufacturer /
wholesaler) but
there is no
requirement to
upload the same
on the common
portal.
Subsequently tax
liability cannot be
adjusted by such
supplier.

3. It may be noted that though this circular discusses the scenarios in relation to return
of goods on account of expiry of the same, it may be applicable to such other
scenarios where the goods are returned on account of reasons other than the one
detailed above.

Circular No. 92/11/2019-GST

Clarification on various doubts related to treatment of sales promotion schemes under GST

2. It has been noticed that there are several promotional schemes which are offered by
taxable persons to increase sales volume and to attract new customers for their
products. Some of these schemes have been examined and clarification on the
aspects of taxability, valuation, availability or otherwise of Input Tax Credit in the
hands of the supplier (hereinafter referred to as the “ITC”) in relation to the said
schemes are detailed hereunder:

A. Free samples and gifts:

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i. It is a common practice among certain sections of trade and industry,

such as, pharmaceutical companies which often provide drug
samples to their stockists, dealers, medical practitioners, etc. without
charging any consideration. As per subclause (a) of sub-section (1) of
section 7 of the said Act, the expression “supply” includes all forms of
supply of goods or services or both such as sale, transfer, barter,
exchange, licence, rental, lease or disposal made or agreed to be
made for a consideration by a person in the course or furtherance of
business. Therefore, the goods or services or both which are supplied
free of cost (without any consideration) shall not be treated as
‘supply’ under GST (except in case of activities mentioned in Schedule
I of the said Act). Accordingly, it is clarified that samples which are
supplied free of cost, without any consideration, do not qualify as
‘supply’ under GST, except where the activity falls within the ambit of
Schedule I of the said Act.
ii. Further, clause (h) of sub-section (5) of section 17 of the said Act
provides that ITC shall not be available in respect of goods lost,
stolen, destroyed, written off or disposed of by way of gift or free
samples. Thus, it is clarified that input tax credit shall not be available
to the supplier on the inputs, input services and capital goods to the
extent they are used in relation to the gifts or free samples distributed
without any consideration. However, where the activity of
distribution of gifts or free samples falls within the scope of ‘supply’
on account of the provisions contained in Schedule I of the said Act,
the supplier would be eligible to avail of the ITC.

B. Buy one get one free offer:

i. Sometimes, companies announce offers like ‘Buy One, Get One free’
For example, ‘buy one soap and get one soap free’ or ‘Get one tooth
brush free along with the purchase of tooth paste’. As per sub-clause
(a) of sub-section (1) of section 7 of the said Act, the goods or services
which are supplied free of cost (without any consideration) shall not
be treated as ‘supply’ under GST (except in case of activities
mentioned in Schedule I of the said Act). It may appear at first glance
that in case of offers like ‘Buy One, Get One Free’, one item is being
‘supplied free of cost’ without any consideration. In fact, it is not an
individual supply of free goods but a case of two or more individual
supplies where a single price is being charged for the entire supply. It
can at best be treated as supplying two goods for the price of one.
ii. Taxability of such supply will be dependent upon as to whether the
supply is a composite supply or a mixed supply and the rate of tax
shall be determined as per the provisions of section 8 of the said Act.
iii. It is also clarified that ITC shall be available to the supplier for the
inputs, input services and capital goods used in relation to supply of
goods or services or both as part of such offers.

C. Discounts including ‘Buy more, save more’ offers:

i. Sometimes, the supplier offers staggered discount to his customers
(increase in discount rate with increase in purchase volume). For
example- Get 10 % discount for purchases above ₹ 5000/-, 20%
discount for purchases above ₹ 10,000/- and 30% discount for
purchases above ₹ 20,000/-. Such discounts are shown on the
invoice itself.
ii. Some suppliers also offer periodic/ year ending discounts to their
stockists, etc. For example- Get additional discount of 1% if you
purchase 10000 pieces in a year, get additional discount of 2% if you

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purchase 15000 pieces in a year. Such discounts are established in

terms of an agreement entered into at or before the time of supply
though not shown on the invoice as the actual quantum of such
discounts gets determined after the supply has been effected and
generally at the year end. In commercial parlance, such discounts are
colloquially referred to as “volume discounts”. Such discounts are
passed on by the supplier through credit notes.
iii. It is clarified that discounts offered by the suppliers to customers
(including staggered discount under ‘Buy more, save more’ scheme
and post supply/ volume discounts established before or at the time
of supply) shall be excluded to determine the value of supply
provided they satisfy the parameters laid down in sub-section (3) of
section 15 of the said Act, including the reversal of ITC by the recipient
of the supply as is attributable to the discount on the basis of
document(s) issued by the supplier.
iv. It is further clarified that the supplier shall be entitled to avail the ITC
for such inputs, input services and capital goods used in relation to
the supply of goods or services or both on such discounts.

D. Secondary Discounts:
i. These are the discounts which are not known at the time of supply or
are offered after the supply is already over. For example, M/s A
supplies 10000 packets of biscuits to M/s B at ₹ 10/- per packet.
Afterwards M/s A re-values it at ₹ 9/- per packet. Subsequently, M/s
A issues credit note to M/s B for ₹ 1/- per packet.
ii. The provisions of sub-section (1) of section 34 of the said Act provides
as under: “Where one or more tax invoices have been issued for
supply of any goods or services or both and the taxable value or tax
charged in that tax invoice is found to exceed the taxable value or tax
payable in respect of such supply, or where the goods supplied are
returned by the recipient, or where goods or services or both
supplied are found to be deficient, the registered person, who has
supplied such goods or services or both, may issue to the recipient
one or more credit notes for supplies made in a financial year
containing such particulars as may be prescribed.”
iii. Representations have been received from the trade and industry that
whether credit note(s) under sub-section (1) of section 34 of the said
Act can be issued in such cases even if the conditions laid down in
clause (b) of sub-section (3) of section 15 of the said Act are not
satisfied. It is hereby clarified that financial/ commercial credit note(s)
can be issued by the supplier even if the conditions mentioned in
clause (b) of sub-section (3) of section 15 of the said Act are not
satisfied. In other words, credit note(s) can be issued as a commercial
transaction between the two contracting parties.
iv. It is further clarified that such secondary discounts shall not be
excluded while determining the value of supply as such discounts are
not known at the time of supply and the conditions laid down in
clause (b) of sub-section (3) of section 15 of the said Act are not
satisfied.
v. In other words, value of supply shall not include any discount by way
of issuance of credit note(s) as explained above in para 2 (D)(iii) or by
any other means, except in cases where the provisions contained in
clause (b) of sub-section (3) of section 15 of the said Act are satisfied.
vi. There is no impact on availability or otherwise of ITC in the hands of
supplier in this case.

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(1) Subject to prescribed conditions and restrictions –

(a)
RC applied for and granted within this period

Date on which liability to register arises 30 days

In such a case, the person so registered shall be entitled to take ITC in respect of
▪ inputs stock
▪ inputs contained in semi-finished/ finished goods stock
on the day immediately preceding
the date from which he becomes liable to pay tax.
(b) A person who takes voluntary registration
shall be entitled to take ITC in respect of
▪ inputs stock
▪ inputs contained in semi-finished/ finished goods stock
on the day immediately preceding
the date of grant of registration.
(c) Where a registered person ceases to pay tax u/s 10
he shall be entitled to take ITC in respect of
▪ inputs stock
▪ inputs contained in semi-finished/ finished goods stock
▪ capital goods (reduced by prescribed percentage points)
on the day immediately preceding
the date he becomes liable to pay tax u/s 9
(d) Where an exempt supply becomes taxable
the registered supplier shall be entitled to take ITC in respect of
▪ exclusive inputs stock
▪ exclusive inputs contained in semi-finished/ finished goods stock
▪ exclusive capital goods (reduced by prescribed percentage points)
on the day immediately preceding
the date when such supply becomes taxable

Raj & Co., applied for voluntary registration under CGST Act, 2017 on 5th July, 2017 and the
registration was granted on 15th July, 2017. Raj & Co., was having the stock available against
the invoices for a period of 3 months old. Raj & Co., shall be eligible for input tax credit on
such stock as held as on:
(A) 30th June, 2017
(B) 05th July, 2017
(C) 15th July, 2017
(D) 14th July, 2017
[CS-Exec, Jun 2018]

(d) 14th July, 2017

Quanto Ltd. is not required to register under CGST Act, 2017 but it wishes to obtain
voluntary registration, so it applied for voluntary registration on 17th September, 2017 and

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registration certificate has been granted to it on 25th September, 2017. The CGST and SGST
liability for the month of September, 2017 is ₹ 24,000 each.
Quanto Ltd. provides the following information of inputs and capital goods held in stock on
24th September, 2017. It is not engaged in making interstate outward supplies.
Particulars Amount (₹)
Input procured on 02-09-2017 lying in stock
- CGST @ 6% 4,500
- SGST @ 6% 4,500
Input received on 21-07-2017 contained in semi-finished goods held in
stock:
- CGST @ 6% 7,500
- SGST @ 6% 7,500
Value of inputs contained in finished goods held in stock ₹ 2,00,000 were
procured on 19-09-2016
- IGST @ 18% 36,000
Inputs valued at ₹ 50,000 procured on 13-09-2017 lying in stock:
- IGST @ 18% 9,000
Capital goods procured on 12-09-2017
- CGST @ 6% 12,000
- SGST @ 6% 12,000
You are required to compute the amount of tax to be paid in cash by Quanto Ltd. for the
month of September, 2017.
You are also required to mention reasons for treatment of all above items.
[CA-Final, Nov 2018]

Happy Ltd. located at Alwar (Rajasthan), exclusively manufactures and sells the product
“Shine & Shine”, which is exempt from GST. Happy Ltd. sells “Shine & Shine” only within
Rajasthan. The turnover of Happy Ltd. in the previous year was ₹ 60 lakhs. Happy Ltd.
purchased additional machinery (Capital Goods) for manufacturing “Shine & Shine” on 1 st
April, 2018. The invoice for supply of machinery also was issued on 1 st April, 2018. The
purchase price of the machinery was ₹ 25 lakhs exclusive of CGST and SGST @ 12% (6% +
6%). On 1st December, 2018 exemption available on the product “Shine & Shine” was
withdrawn by the Central Government and CGST and SGST @ 18% (9% + 9%) was imposed
thereon. The turnover of Happy Ltd. on 30th September, 2018 was ₹ 45 lakhs.
Examine the issue and provide the answers (with supporting explanatory note for each
answer) to the following:
(i) Does Happy Ltd. have to register under CGST Act, 2017?
(ii) Can Happy Ltd. take Credit of tax paid on the machinery purchased? If yes, what is
the amount of Input Tax Credit (ITC) that can be availed?
[CA-Final, Nov 2018]

(i) Not until 01 December 2018

(ii) No

(2) No ITC as mentioned in sub-section (1) shall be allowed

in respect of any inward supply
after the expiry of 1 year of the invoice date.

(3) In case of change in constitution of a registered person

by way of sale/ merger/ demerger/ amalgamation/ lease/ transfer
with specific provision for transfer of liabilities
the said registered person shall be allowed
to transfer the unutilized ITC from his e-CrL to such

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sold/ merged/ demerged/ amalgamated/ leased/ transferred business

in the prescribed manner.

(1) On sale/ merger/ de-merger/ amalgamation/ lease/ transfer or change in the

ownership of business for any reason, the registered person shall furnish the details
of such event in FORM GST ITC-02 along with a request for transfer of unutilized ITC
lying in his e-CrL to the transferee.
Furthermore, in case of demerger, the ITC shall be apportioned between the resulting
units in the ratio of the value of assets (the value of entire assets of the business,
whether or not ITC has been availed thereon) as specified in the demerger scheme.

(2) The transferor shall also submit a copy of a certificate issued by a practicing CA/
CMA certifying that such sale, merger etc. has been done with a specific provision for
the transfer of liabilities.

(3) The transferee shall accept such furnished details and thereupon the unutilized ITC
shall be credited to his e-CrL.

(4) The inputs and cap. goods so transferred shall be duly accounted by the transferee in
his books of account.

Circular No. 96/15/2019-GST

Clarification in respect of transfer of input tax credit in case of death of sole proprietor

2. Clause (a) of sub-section (1) of section 29 of the CGST Act provides that reason of
transfer of business includes “death of the proprietor”. Similarly, for uniformity and
for the purpose of sub-section (3) of section 18, sub-section (3) of section 22, sub-
section (1) of section 85 of the CGST Act and sub-rule (1) of rule 41 of the CGST Rules,
it is clarified that transfer or change in the ownership of business will include transfer
or change in the ownership of business due to death of the sole proprietor.

3. In case of death of sole proprietor if the business is continued by any person being
transferee or successor, the input tax credit which remains un-utilized in the
electronic credit ledger is allowed to be transferred to the transferee as per
provisions and in the manner stated below –
a. Registration liability of the transferee/ successor: As per provisions of sub-
section (3) of section 22 of the CGST Act, the transferee or the successor, as
the case may be, shall be liable to be registered with effect from the date of
such transfer or succession, where a business is transferred to another
person for any reasons including death of the proprietor. While filing
application in FORM GST REG-01 electronically in the common portal the
applicant is required to mention the reason to obtain registration as “death of
the proprietor”.
b. Cancellation of registration on account of death of the proprietor: Clause (a)
of subsection (1) of section 29 of the CGST Act, allows the legal heirs in case
of death of sole proprietor of a business, to file application for cancellation of
registration in FORM GST REG-16 electronically on common portal on
account of transfer of business for any reason including death of the
proprietor. In FORM GST REG-16, reason for cancellation is required to be
mentioned as “death of sole proprietor”. The GSTIN of transferee to whom
the business has been transferred is also required to be mentioned to link the
GSTIN of the transferor with the GSTIN of transferee.

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c. Transfer of input tax credit and liability: In case of death of sole proprietor, if
the business is continued by any person being transferee or successor of
business, it shall be construed as transfer of business. Sub-section (3) of
section 18 of the CGST Act, allows the registered person to transfer the
unutilized input tax credit lying in his electronic credit ledger to the transferee
in the manner prescribed in rule 41 of the CGST Rules, where there is specific
provision for transfer of liabilities. As per sub-section (1) of section 85 of the
CGST Act, the transferor and the transferee/ successor shall jointly and
severally be liable to pay any tax, interest or any penalty due from the
transferor in cases of transfer of business “in whole or in part, by sale, gift,
lease, leave and license, hire or in any other manner whatsoever”.
Furthermore, sub-section (1) of section 93 of the CGST Act provides that
where a person, liable to pay tax, interest or penalty under the CGST Act,
dies, then the person who continues business after his death, shall be liable to
pay tax, interest or penalty due from such person under this Act. It is
therefore clarified that the transferee/ successor shall be liable to pay any tax,
interest or any penalty due from the transferor in cases of transfer of business
due to death of sole proprietor.
d. Manner of transfer of credit: As per sub-rule (1) of rule 41 of the CGST Rules, a
registered person shall file FORM GST ITC-02 electronically on the common
portal with a request for transfer of unutilized input tax credit lying in his
electronic credit ledger to the transferee, in the event of sale, merger, de-
merger, amalgamation, lease or transfer or change in the ownership of
business for any reason. In case of transfer of business on account of death of
sole proprietor, the transferee/ successor shall file FORM GST ITC-02 in
respect of the registration which is required to be cancelled on account of
death of the sole proprietor. FORM GST ITC-02 is required to be filed by the
transferee/ successor before filing the application for cancellation of such
registration. Upon acceptance by the transferee/ successor, the un-utilized
input tax credit specified in FORM GST ITC-02 shall be credited to his
electronic credit ledger.

(4) Where a registered person who has availed ITC

opts to pay tax u/s 10
OR
where the goods/ services supplied by him
becomes wholly exempt
he shall pay the amount of ITC in respect of
o inputs stock
o inputs contained in semi-finished/ finished goods stock
o capital goods (reduced by prescribed percentage points)
on the day immediately preceding
the date of exercising such option OR the date of such exemption
by debiting his e-CrL or e-CaL.
• After payment of such amount, any balance of ITC left in his e-CrL shall lapse.

(1) For the purposes of 18(4) and 29(5), the ITC relating to stock of inputs, semi-finished/
finished goods and cap goods shall be determined in the following manner –
(a) For stock of inputs, semi-finished and finished goods, the ITC shall be
calculated proportionately on the basis of corresponding invoices on which
credit had been availed on such stock

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(b) For stock of cap goods, the ITC involved in the remaining useful life in months
shall be computed on pro-rata basis, taking the useful life as 5 years.

(2) Such amount shall be determined separately for ITC of CGST, SGST, UTGST and IGST

(3) Where the tax invoices are not available, the amount shall be determined on the
basis of prevailing market price of the goods on the effective date of the occurrence
of any of the events as specified in 18(4) or 29(5)

(4) The amount shall form part of the OTL and the details shall be furnished in
o FORM GST ITC-03 – In case of 18(4)
o FORM GSTR-10 – In case of 29(5)

(5) The details furnished shall be duly certified by a practicing CA/ CMA

(5) The amount of credit u/ ss (1) and tax payable u/ ss (4)

shall be calculated in prescribed manner.

(6) In case of supply of capital goods or p&m

on which ITC has been taken
the registered person shall pay higher of the following:
o ITC taken on them (reduced by prescribed percentage points), OR
o Tax on their TV as determined u/s 15
• In case of refractory bricks, moulds and dies, jigs and fixtures supplied as scrap, the tax
on TV as determined u/s 15 shall be paid.

(2) The ITC in case of supply of cap. goods or p&m, for Sec. 18(6), shall be calculated by
reducing the input tax on the said goods by 5%/ qtr. or part thereof from the date of
its invoice.

(6) The ITC relating to capital goods shall be determined as per sub-rule (1)(b) and
determined separately for CGST, SGST, UTGST and IGST.
However, where the amount so determined is more than the tax on the transaction
value of the cap goods, it shall form part of the OTL and shall be furnished in FORM
GSTR-1

Bharat Associates Pvt. Ltd. purchased machinery worth ₹ 9,00,000 (excluding GST) on 20-
07-2017 on which it paid GST @ 18%. It availed the ITC. On 05-03-2018 it sold the
machinery for ₹ 7,00,000 (excluding GST) to Hindustan Associates Pvt. Ltd. The GST rate
on sale is 18%. What will be the course of action for Bharat Associates Pvt. Ltd. to follow
under CGST Act, 2017?
[CA-IPCE, May 2018]
Bharat Associates Pvt. Ltd. shall pay higher of the following:
ITC (reduced by 5% per quarter or part thereof) = ₹ 1,37,700
OR
Tax on TV = ₹ 1,26,000

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Jayakumar Textiles Ltd., purchased a machinery on 12th August, 2017 for ₹ 12 lakhs
(excluding GST). The company put the machinery to use after the purchase and availed
input tax credit for the eligible amount.
The machinery was sold as second-hand machinery on 14th May, 2018 for ₹ 9 lakhs.
During purchase as well as sale of the machinery, the GST rate applicable was 18%.
Assuming that there was no change in legal position after November, 2017, discuss the
steps which Jayakumar Textiles Ltd., is required to take at the time of sale of the second-
hand machine. Briefly state the statutory provisions involved.
[CS-Prof, Jun 2018]
Jayakumar Textiles Ltd. shall pay higher of the following:
ITC (reduced by 5% per quarter or part thereof) = ₹ 1,83,600
OR
Tax on TV = ₹ 1,62,000

On 25th August, 2017, M/s Agarwal & Agarwal Ltd., a registered supplier of textile products
located in Bengaluru (Karnataka) purchased one machine for ₹ 12,39,000 including IGST,
from one supplier of Maharashtra who issued invoice on the same date. M/s Agarwal &
Agarwal Ltd. put the machinery to use on the same day and availed input tax credit for the
eligible amount.
M/s Agarwal & Agarwal Ltd. sold this machine after using the machine in the process of
manufacture of taxable goods for ₹ 7,50,000 excluding IGST, to Mr. Suresh Kumar of Andhra
Pradesh on 20th August 2018.
During purchase as well as sale of the machinery, the IGST rate applicable was 18%.
Is M/s Agarwal & Agarwal Ltd., required to pay GST? If yes, calculate the amount of tax
payable under GST Laws at the time of sale of the machine. Also briefly state the relevant
statutory provisions.
Note: Assume that there was no change in legal position after August, 2017.
[CA-Final, Nov 2018]

Yes.
Higher of
ITC (involved in remaining useful life of 48 months) = ₹ 1,51,200
OR
Tax on TV = ₹ 1,35,000

(1) The ITC claimed on stock of inputs, SFG, FG and capital goods as per Sec. 18(1), shall
be subject to the following conditions –
(a) The ITC on cap goods shall be claimed after reducing the tax paid on such
cap goods by 5%/ qtr. or a part thereof from the date of its invoice.
(b) The registered person shall within 30 days (as extended by the
Commissioner) from becoming so eligible shall make a declaration in FORM
GST ITC-01 to effect his eligibility.
(c) Such declaration shall clearly specify the stock details –
(i) on the day immediately preceding the date of his liability to pay tax
u/s 18(1)(a)
(ii) on the day immediately preceding the date of grant of registration u/s
18(1)(b)
(iii) on the day immediately preceding the date of his liability to pay tax as
per 18(1)(c)
(iv) on the day immediately preceding the date of taxability of supplies as
per 18(1)(d)

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(d) Such declaration shall be duly certified by a practicing CA/ CMA if the
aggregate value of the claim for CGST, SGST, UTGST and IGST exceeds ₹ 2
lakhs.
(e) The ITC claimed u/s 18(1)(c) and (d) shall be verified with the corresponding
details furnished in FORM GSTR-1/ GSTR-4

(1) The ISD shall distribute the credit as follows

by way of issue of a document containing
the amount of ITC being distributed in the prescribed manner.

(2) The ISD may distribute the credit subject to following conditions:
(a) the credit can be distributed to the recipients of credit
against a document containing the prescribed details
(b) the amount of the credit distributed ≤ the amount of credit available for
distribution
(c) the ITC on input services attributable to a recipient of credit
shall be distributed only to that recipient
(d) the ITC on input services attributable to more than one recipient of credit
shall be distributed amongst such recipients on pro rata basis as follows:
Turnover of a recipient in a state/ UT during the relevant period
Agg. of the turnover of all relevant recipients, operational in the current FY, during the
relevant period

(e) the ITC on input services attributable to all recipients of credit

shall be distributed amongst such recipients on pro rata basis as follows:

Turnover of a recipient in a state/ UT during the relevant period

Agg. of the turnover of all relevant recipients, operational in the current FY, during the
relevant period

NOTE:
o Relevant period means
▪ If turnover of all the relevant recipients of credit in their States/ UTs
in the preceding FY is available – The previous FY
▪ If such details are not available for all relevant recipients of credit –
The last quarter preceding the month during which the credit is to be
distributed
for which such details are available
o Turnover, in relation to any registered person engaged in supplying
taxable + non-taxable goods, means

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The Value of Turnover (-) Central Excise Duty, State Excise Duty, CST and State
VAT

(1) An ISD shall distribute ITC as follows –

(a) The ITC available for distribution in a month shall be distributed in the same
month and its details shall be furnished in FORM GSTR-6
(b) The ISD shall separately distribute the amount of ineligible ITC and the
amount of eligible ITC, as per clause (d)
(c) The ITC on account of CGST, SGST, UTGST and IGST shall be distributed
separately as per clause (d)
(d) The ITC that is required to be distributed as per section 20(2)(d)/ (e) [C1] to
one of the recipients ‘R1’, whether registered or not, from the total of all of the
recipients to whom the ITC is attributable, including the recipients engaged in
making exempt supplies, or otherwise not registered, shall be calculated as
follows –
C1 = (t1 ÷ T) x C
C = the amount of credit to be distributed
t1 = turnover of R1 during the relevant period as referred in Sec. 20
T = aggregate of the turnover of all recipients to whom input service is
distributable during the relevant period
(e) The ITC of IGST shall be distributed as ITC of IGST to every recipient
(f) The ITC of CGST and SGST/ UTGST shall –
(i) For recipient located in the same state/ UT as the ISD – be distributed
as ITC of CGST and SGST/ UTGST respectively.
(ii) For other recipients – be distributed as IGST and the amount to be so
distributed shall be the aggregate of ITC of CGST and SGST/ UTGST
that qualifies for distribution to such recipient as per (d)
(g) The ISD shall issue an ISD invoice as per rule 54(1), clearly indicating in such
invoice that it is issued only for distribution of ITC
(h) The ISD shall issue an ISD cr. note as per rule 54(1), for reduction of credit in
case the ITC already distributed gets reduced for any reason.
(i) Any additional amount of ITC resulting from a dr. note issued to an ISD by the
supplier shall be distributed as per clauses (a) to (f) and such amount shall be
distributed as per (d). Such credit shall be distributed in the month in which
the dr. note is included in the return in FORM GSTR-6
(j) Any ITC required to be reduced resulting from a cr. note issued to an ISD by
the supplier shall be apportioned to each recipient in the same ratio in which
the ITC contained in the original invoice was distributed as per clause (d) and
the amount so apportioned shall be –
(i) reduced from the amount to be distributed in the month in which the
cr. note is included in the return in FORM GSTR-6, or
(ii) added to the OTL of the recipient where the amount so apportioned is
in negative due to amount of credit under distribution being less than
the amount to be adjusted.

(2) If the ITC distributed by an ISD is reduced later for any other reason for any of the
recipients, including that it was distributed to a wrong recipient by the ISD, the
process specified in clause (j) of sub-rule (1) shall apply mutatis mutandis for
reduction of credit.

(3) Subject to sub-rule (2), the ISD shall issue an ISD invoice on the basis of ISD cr. note
to the recipient entitled to such credit and include the ISD cr. note and the ISD
invoice in FORM GSTR-6 for the month in which such documents were issued.

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Write short note on “Distribution of input tax credit by ISD and manner of such
distribution”.
[CMA-Inter, Jun 2018]

• An ISD invoice/ cr. note shall contain the following details –

NOTE: Where the ISD is an office of a bank/ FI/ NBFC, a tax invoice shall include any
document in lieu thereof containing the said information

• A registered person with same PAN and state code as an ISD,

may issue an invoice/ dr. note/ cr. note
to transfer the credit of common input services to the ISD
which shall contain the following details -

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 GST Simplified™ Ready Reckoner for Students and Professionals

Sarani Weavers at Mumbai is an input service distributor and intends to distribute input tax
credit u/s 20 of the CGST Act, 2017, for the month of March 2018. The following are the
details available for such distribution:
Branch Turnover of the last quarter ITC specifically applicable
(Amt. in ₹) to the branch (Amt. in ₹)
Ganganagar Branch 10,00,000 IGST – ₹ 12,000
CGST – ₹ 3,000
SGST – ₹ 3,000
Madhugiri Branch 5,00,000 Nil
Kosala Branch 15,00,000 Nil
Mumbai HO 20,00,000 IGST – ₹ 1,50,000
CGST – ₹ 15,000
SGST – ₹ 15,000
Inputs/ Input services used commonly by all branches against which ITC available is:
CGST – ₹ 60,000
SGST – ₹ 60,000
IGST – ₹ 1,20,000
ITC (IGST) of December 2017, ₹ 10,000 which was inadvertently left out, whether same can
be considered for distribution in March, 2018. Madhugiri branch uses inputs to
manufacture exempted products. All branches are outside Maharashtra. Turnover excludes
duties & taxes payable to Central and State Government.
Determine the input tax distribution.
[CA-Final, May 2018]

Calculation of ITC distributable

CGST SGST IGST

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 GST Simplified™ Ready Reckoner for Students and Professionals

Ganganagar Branch:
Specific ITC - - 18,000
Share of common ITC - - 80,000
Total - - 98,000
Madhugiri Branch
Share of common ITC - - 40,000
Total - - 40,000
Kosala Branch
Share of common ITC - - 1,20,000
Total - - 1,20,000

XYZ Ltd, having its head office at Mumbai, is registered as Input Service Distributor (ISD). It
has three units in different cities situated in ‘Mumbai’, ‘Jabalpur’ and ‘Delhi’ which are
operational in the current year. XYZ Ltd. furnishes the following information for the month
of July 2017:
• CGST paid on services used only for Mumbai Unit: ₹ 3,00,000
• IGST, CGST & SGST paid on services used for all units: ₹ 12,00,000
• Total turnover of the units for the previous financial year is as follows:
Unit Turnover (₹)
Total Turnover of three units ₹ 10,00,00,000
Turnover of Mumbai unit ₹ 5,00,00,000
Turnover of Jabalpur unit ₹3,00,00,000
Determine the credit to be distributed by XYZ Ltd. to each of its three units.
[CS-Prof, Jun 2018]

Calculation of ITC distributable

CGST SGST IGST
Mumbai Unit:
Specific ITC 3,00,000 - -
Share of common ITC 2,00,000 2,00,000 2,00,000
Total 5,00,000 2,00,000 2,00,000
Jabalpur Unit:
Share of common ITC - - 3,60,000
Total - - 3,60,000
Delhi Unit:
Share of common ITC - - 2,40,000
Total - - 2,40,000
NOTE: In the absence of proper information, the entire amount of common input tax credit
has been divided equally as IGST, CGST and SGST, and distributed accordingly.

M/s XYZ Ltd., having its Head Office at Mumbai, is registered as ISD. It has three units in
different states namely ‘Mumbai’, ‘Chennai’ and ‘Delhi’ which are operational in the
current year. M/s XYZ Ltd. furnishes the following information for the month of July 2017.
You are required to distribute the below input tax credit
(i) CGST and SGST paid on services used only for Mumbai Unit: ₹ 3,00,000
(ii) IGST, CGST & SGST paid on services used for all units: ₹ 12,00,000
Total turnover of the units for the Financial Year 2016-17 are as follows:
Unit Turnover (₹)
Turnover of Mumbai unit 5,00,00,000
Turnover of Chennai 3,00,00,000
Turnover Delhi 2,00,00,000
Total turnover 10,00,00,000
[CMA-Inter, Jun 2018]

Calculation of ITC distributable

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 GST Simplified™ Ready Reckoner for Students and Professionals

CGST SGST IGST

Mumbai Unit:
Specific ITC 1,50,000 1,50,000 -
Share of common ITC 2,00,000 2,00,000 2,00,000
Total 3,50,000 3,50,000 2,00,000
Chennai Unit:
Share of common ITC - - 3,60,000
Total - - 3,60,000
Delhi Unit:
Share of common ITC - - 2,40,000
Total - - 2,40,000
NOTE: In the absence of proper information, the entire amount of common input tax credit
has been divided equally as IGST, CGST and SGST, and distributed accordingly.

What are the conditions applicable to Input Service Distributor to distribute the credit?
[CA-Final, Nov 2018]

The credit of tax paid on input services used by more than one supplier be distributed as
per provisions of the CGST Act, 2017 ...........
(A) only to one supplier
(B) equally among all the suppliers
(C) among the suppliers who used such input service on pro rata basis of turnover in
such state
(D) cannot be distributed
[CS-Exec, Dec 2018]

(E) among the suppliers who used such input service on pro rata basis of turnover in
such state

Where the ISD distributes the credit in contravention of Sec. 20

resulting in excess distribution to one or more recipients of credit
the excess credit so distributed shall be recovered
along with interest
and the provisions of Sec. 73 and 74 shall apply mutatis mutandis
for determination of the recovery amount.

Circular No. 71/ 45/2018-GST

Clarifications of issues under GST related to casual taxable person and recovery of excess
Input Tax Credit distributed by an Input Service Distributor

Sl. No. Issue Clarification

1 Whether the amount required to be 1. It has been noted that while
deposited as advance tax while taking applying for registration as a
registration as a casual taxable person casual taxable person, the
(CTP) should be 100% of the estimated FORM GST REG-1 (S. No. 11)
gross tax liability or the estimated tax seeks information regarding the
liability payable in cash should be “estimated net tax liability” only
calculated after deducting the due and not the gross tax liability.
eligible ITC which might be available to
CTP? 2. It is accordingly clarified that
the amount of advance tax
which a casual taxable person

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 GST Simplified™ Ready Reckoner for Students and Professionals

is required to deposit while

obtaining registration should be
calculated after considering the
due eligible ITC which might be
available to such taxable
person.
2 As per section 27 of the Central Goods 1. It is clarified that in case of long
and Services Tax Act, 2017 (hereinafter running exhibitions (for a
referred to as the said Act), period of period more than 180 days), the
operation by casual taxable person is taxable person cannot be
ninety days with provision for treated as a CTP and thus such
extension of same by the proper officer person would be required to
for a further period not exceeding obtain registration as a normal
ninety days. Various representations taxable person.
have been received for further
extension of the said period beyond 2. While applying for normal
the period of 180 days, as mandated in registration the said person
law. should upload a copy of the
allotment letter granting him
permission to use the premises
for the exhibition and the
allotment letter/ consent letter
shall be treated as the proper
document as a proof for his
place of business.

3. In such cases he would not be

required to pay advance tax for
the purpose of registration.

4. He can surrender such

registration once the exhibition
is over.
3 Representations have been received 1. According to Section 21 of the
regarding the manner of recovery of CGST Act where the ISD
excess credit distributed by an Input distributes the credit in
Service Distributor (ISD) in contravention of the provisions
contravention of the provisions contained in section 20 of the
contained in section 20 of the CGST CGST Act resulting in excess
Act. distribution of credit to one or
more recipients of credit, the
excess credit so distributed
shall be recovered from such
recipients along with interest
and penalty if any.

2. The recipient unit(s) who have

received excess credit from ISD
may deposit the said excess
amount voluntarily along with
interest if any by using FORM
GST DRC-03.

3. If the said recipient unit(s) does

not come forward voluntarily,
necessary proceedings may be
initiated against the said unit(s)

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GST Simplified™ Ready Reckoner for Students and Professionals

under the provisions of section

73 or 74 of the CGST Act as the
case may be. FORM GST DRC-
07 can be used by the tax
authorities in such cases.

4. It is further clarified that the ISD

would also be liable to a
general penalty under the
provisions contained in section
122(1)(ix) of the CGST Act.

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 GST Simplified™ Ready Reckoner for Students and Professionals

CGSTA, 2017
• Section 49: Payment of tax, interest etc.
• Section 49A: Utilization of ITC subject to certain conditions
• Section 49B: Order of utilization of ITC
• Section 50: Interest on delayed payment of tax

(1) Subject to prescribed conditions and restrictions

every deposit made towards tax, interest, penalty, fee etc.
by a person through
o Internet banking
o Credit/ Debit cards
o NEFT/ RTGS
o Any other mode
shall be credited to his e-CaL
maintained in the prescribed manner.

(1) The e-CaL shall be maintained in FORM GST PMT-05 for crediting the amount
deposited and debiting any payment made towards tax, interest, penalty, fee etc.

(2) Any person shall generate a challan in FORM GST PMT-06 and enter the details of
the amount to be deposited by him towards tax, interest, penalty, fees etc.
This challan shall be valid for 15 days.
Also, a person supplying OIDAR services from a place outside India to a NTOR may
do so through the “e-Accounting System in Excise and Service Tax” from a date to be
notified by the Board.

(3) The said deposit shall be made through any of the following modes –
(i) netbanking through authorised banks
(ii) Credit/ Debit card through authorised banks
(iii) NEFT/ RTGS from any bank
(iv) OTC payment through authorised banks for deposits upto ₹ 10,000 per
challan per tax period, by cash, cheque or DD
NOTE: Any commission payable in respect of such payment shall be borne by the
payer.
However, this restriction of ₹ 10,000 shall not apply to deposits made by –
(a) Govt. deptts. or any other deposit by notified persons
(b) PO or any other officer authorised to recover outstanding dues from any
other person, including recovery made through attachment or sale of
movable/ immovable properties
(c) PO or any other officer authorised to collect any amount in cash/ cheque/ DD
during an investigation or enforcement activity or any ad hoc deposit.

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 GST Simplified™ Ready Reckoner for Students and Professionals

A person supplying OIDAR services from a place outside India to NTOR may also
make the deposit as per (2) through international money transfer through SWIFT
network.

(4) Any payment required to be made by an un-registered person shall be made on the
basis of TIN generated through the common portal.

(5) Where the payment is made through NEFT/ RTGS, the mandate form shall be
generated along with the challan and submitted to the payer bank.
This mandate form shall be valid for 15 days from the date of generation of challan.

(6) On successful credit of the amount to concerned government account, a CIN shall be
generated by the collecting bank and indicated in the challan.

(7) On receipt of the CIN from the collecting bank, the amount deposited shall be credit
to the e-CaL and a receipt shall be made available on the common portal.

(8) In case the bank account gets debited but no CIN is generated/ communicated, the
payer may represent to the bank or e-gateway through which the deposit was
initiated in FORM GST PMT-07.

(9) Any TDS/ TCS claimed by the deductee/ collectee in his FORM GSTR-02 shall be
credited to his e-CaL

(10) Any refund claimed from the e-CaL shall be debited to the same.

(11) If the refund so claimed is fully or partly rejected, the rejected amount shall be re-
credited to the e-CaL by the PO by an order in FORM GST PMT-03

(12) In case of any discrepancy in the e-CaL, the registered person shall communicate the
same to the officer in FORM GST PMT-04

What is CIN?
[CA-IPCE, May 2018]

(2) In accordance with Section 41,

the self-assessed ITC of a registered person
as furnished in his return
shall be credited to his e-CrL
maintained in the prescribed manner.

(1) The e-CrL shall be maintained in FORM GST PMT-02 for each registered person
eligible for ITC and every claim of ITC shall be credited to this ledger.

(2) The e-CrL shall be debited to the extent of discharge of any liability

(3) Any unutilized amount claimed as refund u/s 54 shall be debited in the e-CrL

(4) If the refund so filed is fully or partly rejected, the rejected amount shall be re-
credited to the e-CrL by the PO by an order in FORM GST PMT-03

(5) No entry shall be made directly in the e-CrL under any circumstance except for the
provisions of this Chapter

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 GST Simplified™ Ready Reckoner for Students and Professionals

(6) In case of any discrepancy in the e-CrL, the registered person shall communicate the
same to the officer in FORM GST PMT-04

(3) Subject to prescribed conditions,

the amount available in the e-CaL
may be used in making the payment towards
tax, interest, penalty, fees etc.
in the prescribed manner and within the prescribed period.

(4) Subject to prescribed conditions,

the amount available in the e-CrL
may be used in making the payment towards output GST
in the prescribed manner and within the prescribed period.

(5) The ITC available in the e-CrL of a registered person

shall be utilised in the following order:

However, the ITC of SGST/ UTGST shall be utilized towards payment of IGST
only where the balance of the ITC of CGST is not available for payment of IGST.

The available balance of input tax credit in the electronic ledger of the registered person on
account of Union territory tax shall be utilized as per section 9 of UTGST Act, 2017 ............
(A) first towards payment of central tax
(B) first towards payment of integrated tax
(C) first towards payment of union territory tax and the amount remaining, if any
towards payment of integrated tax
(D) none of the above
[CS-Exec, Dec 2018]

(C) first towards payment of union territory tax and the amount remaining, if any
towards payment of integrated tax

(6) The balance in e-CaL or e-CrL

after payment of tax, interest, penalty, fee etc. payable
may be refunded in accordance with Section 54

(7) All liabilities of a taxable person

shall be maintained in an ELR
maintained in prescribed manner.

(1) The electronic liability register shall be maintained in FORM GST PMT-01 and all
amounts payable by him shall be debited to the said register.

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 GST Simplified™ Ready Reckoner for Students and Professionals

(2) The ELR shall be debited by –

(a) tax, interest, late fee etc. payable as per the return
(b) tax, interest, penalty etc. payable as determined by a PO as a result of any
proceedings or as ascertained by the person himself
(c) tax and interest payable due to mismatch u/s 42/ 43/ 50
(d) interest accruing from time to time

(3) Payment of every liability as per the return of a registered person shall be made by
debiting the e-CrL/ e-CaL and crediting the ELR

(4) TDS, TCS, amount payable under RCM, amount payable u/s 10, interest, penalty, fee
etc. shall be paid by debiting the e-CaL and crediting the ELR

(5) Any demand debited in the ELR shall stand reduced to the extent of relief given by
the AA/ AT/ court and crediting the electronic tax liability register.

(6) The penalty imposed or liable to be imposed shall be reduced partly or fully if the
taxable person pays the tax, interest and penalty as per the SCN or demand order
and the ELR shall be credited accordingly.

(7) In case of any discrepancy in the ELR, the registered person shall communicate the
same to the officer in FORM GST PMT-04

(8) Every taxable person shall discharge his dues in the following order –
(a) Self-assessed tax and other dues related to returns of previous tax periods
(b) Self-assessed tax and other dues related to return of the current tax period
(c) Any other amount payable, including demand u/s 73 or 74

(9) Every person who has paid tax on goods/ services

shall be deemed to have passed on the full incidence
to the recipient of such supplies
unless proven otherwise by such person.

(1) A UIN shall be generated for each debit/ credit to the e-CaL/ e-CrL

(2) The UIN relating to discharge of any liability shall be indicated in the corresponding
entry in the ELR

(3) A UIN shall be generated for each credit in the ELR for reasons other than (2) above.

Overruling Section 49, the ITC of CGST/ SGST/ UTGST

shall be utilized towards payment of IGST/ CGST/ SGST/ UTGST
only after the ITC of IGST available has first been utilized fully towards such payment.

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Overruling this chapter but subject to Section 49(5),

the Government may prescribe the order and manner of utilization of the ITC of IGST/ CGST/
SGST/ UTGST towards payment of any such tax.

The ITC of IGST shall first be utilized towards the payment of IGST,
and thereafter any amount remaining may be utilized towards the payments of CGST and
SGST/ UTGST in any order.
However, the ITC of CGST/ SGST/ UTGST
shall be utilized towards payment of IGST/ CGST/ SGST/ UTGST
only after the ITC of IGST available has first been utilized fully.

Circular No. 98/17/2019

Clarification in respect of utilization of input tax credit under GST

3. The newly inserted Section 49A of the CGST Act provides that the input tax credit of
Integrated tax has to be utilized completely before input tax credit of Central tax/
State tax can be utilized for discharge of any tax liability. Further, as per the
provisions of section 49 of the CGST Act, credit of Integrated tax has to be utilized
first for payment of Integrated tax, then Central tax and then State tax in that order
mandatorily. This led to a situation, in certain cases, where a taxpayer has to
discharge his tax liability on account of one type of tax (say State tax) through
electronic cash ledger, while the input tax credit on account of other type of tax (say
Central tax) remains un-utilized in electronic credit ledger.

4. The newly inserted rule 88A in the CGST Rules allows utilization of input tax credit of
Integrated tax towards the payment of Central tax and State tax, or as the case may
be, Union territory tax, in any order subject to the condition that the entire input tax
credit on account of Integrated tax is completely exhausted first before the input tax
credit on account of Central tax or State/ Union territory tax can be utilized. It is
clarified that after the insertion of the said rule, the order of utilization of input tax
credit will be as per the order (of numerals) given below:

Input tax credit on Output liability on Output liability on Output liability on

account of account of account of Central account of State
integrated tax tax tax/ Union Territory
tax
Integrated tax (I) (II) – In any order and in any proportion
(III) Input tax credit on account of Integrated tax to be completely exhausted mandatorily
Central tax (V) (IV) Not permitted
State tax/ Union (VII) Not permitted (VI)
Territory tax

5. The following illustration would further amplify the impact of newly inserted rule 88A
of the CGST Rules:

Illustration:

Amount of Input tax credit available and output liability under different tax heads

Head Output Liability Input tax credit

Integrated tax 1000 1300
Central tax 300 200

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State tax/ Union Territory tax 300 200

Total 1600 1700

Option 1:
Input tax credit Discharge of Discharge of Discharge of Balance of Input
on account of output liability output liability output liability Tax Credit
on account of on account of on account of
Integrated tax Central tax State tax/
Union Territory
tax
Integrated tax 1000 200 100 0
Input tax credit on account of Integrated tax has been completely exhausted
Central tax 0 100 - 100
State tax/ 0 - 200 0
Union territory
tax
Total 1000 300 300 100

Option 2:
Input tax credit Discharge of Discharge of Discharge of Balance of Input
on account of output liability output liability output liability Tax Credit
on account of on account of on account of
Integrated tax Central tax State tax/
Union Territory
tax
Integrated tax 1000 100 200 0
Input tax credit on account of Integrated tax has been completely exhausted
Central tax 0 200 - 0
State tax/ 0 - 100 100
Union territory
tax
Total 1000 300 300 100s

Bring out the salient features of cross utilization of Input Tax Credit (ITC) under the GST
law.
[CA-Final, Nov 2017]

Mr. NY, a supplier of goods pays GST under regular scheme. Mr. NY is not eligible for any
threshold exemption. He has made the following outward taxable supplies during
September, 2017:
Particulars Rate of Tax Amount (₹)
CGST SGST IGST
Intra State Supply of goods
Product A 6% 6% - 8,00,000
Product B 9% 9% - 2,00,000
Inter State Supply of goods
Product A - - 12% 3,00,000
Product B - - 18% 1,50,000
He has also furnished the following information in respect of supplies received by him
during September, 2017:
Particulars Rate of Tax Amount (₹)
CGST SGST IGST
Intra State Supply of goods
Product A 6% 6% - 2,00,000
Product B 9% 9% - 1,00,000

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Inter State Supply of goods

Product A - - 12% 1,50,000
Product B - - 18% 80,000
Mr. NY has following ITCs with him at the beginning of September, 2017:
Particulars ₹
CGST 40,000
SGST 28,000
IGST 44,600
NOTE:
(i) Both inward and outward supplies are exclusive of taxes, wherever applicable.
(ii) All the conditions necessary for availing the ITC have been fulfilled.
Compute net GST payable by Mr. NY for the Month of September, 2017.
Make suitable assumptions wherever required.
[CA-Final, May 2018]

Calculation of ITC available

Particulars CGST (₹) SGST (₹) IGST (₹)
Balance as at 01 Sep, 2017 40,000 28,000 44,600
Intra-state supply of Product A 12,000 12,000 -
(6% + 6% of ₹ 2,00,000)
Intra-state supply of Product B 9,000 9,000 -
(9% + 9% of ₹ 1,00,000)
Inter-state supply of Product A - - 18,000
(12% of ₹ 1,50,000)
Inter-state supply of Product B - - 14,400
(18% of ₹ 80,000)
Total 61,000 49,000 77,000
Calculation of OTL
Particulars CGST (₹) SGST (₹) IGST (₹)
Intra-state supply of Product A 48,000 48,000 -
(6% + 6% of ₹ 8,00,000)
Intra-state supply of Product B 18,000 18,000 -
(9% + 9% of ₹ 2,00,000)
Inter-state supply of Product A - - 36,000
(12% of ₹ 3,00,000)
Inter-state supply of Product B - - 27,000
(18% of ₹ 1,50,000)
Total 66,000 66,000 63,000
Calculation of net GST payable
Particulars CGST (₹) SGST (₹) IGST (₹)
Output tax liability 66,000 66,000 63,000
Less: CGST Credit (61,000) - -
Less: SGST Credit - (49,000) -
Less: IGST Credit (5,000) (9,000) (63,000)
Net GST payable - 8,000 -
Hence, the net GST payable in cash is SGST of ₹ 8,000.

ABC Company Ltd. of Bengaluru is a manufacturer and registered supplier of machine. It

has provided the following details for the month of November, 2017.
Details of GST paid on inward supplies during the month:
Items GST paid (₹)
Health Insurance of factory employees 20,000

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Raw materials for which invoice has been received and GST has also 18,000
been paid for full amount but only 50% of material has been received,
remaining 50% will be received in next month
Work contractor’s service used for installation of plant and machinery 12,000
Purchase of manufacturing machine directly sent to job worker’s 50,000
premises under challan
Purchase of car used by director for the business meetings only 25,000
Outdoor catering service availed for business meetings 8.000
ABC Company Ltd. also provides service of hiring of machines along with man power for
operation. As per trade practice machines are always hired out along with operators and
also operators are supplied only when machines are hired out.
Receipts on outward supply (exclusive of GST) for the month of November, 2017 are as
follows
Items Amount (₹)
Hiring receipts for machine 5,25,000
Service charges for supply of man power operators 2,35,000
Assume all the transactions are interstate and the rates of IGST to be as under:
(i) Sale of machine 5%
(ii) Service of hiring of machine 12%
(iii) Supply of man power operator service 18%
Compute the amount of Input Tax Credit available and also the net GST payable for the
month of November 2017 by giving necessary explanations for treatment of various items.
Note: Opening balance of input tax credit is Nil.
[CA-Final, May 2018]

Calculation of ITC available

Particulars IGST (₹)
Health insurance of factory employees -
Raw materials (for 50% received) 9,000
Work contractor’s service for installation of p&m 12,000
Purchase of machine sent directly to job worker’s premises 50,000
Purchase of car for director -
Outdoor catering service -
Total 71,000
Calculation of GST payable
Particulars IGST (₹)
Hiring receipts for machine (12% of ₹ 5,25,000) 63,000
Service charges for supply of operators (18% of 2,35,000) 42,300
Total 1,05,300
Calculation of net GST payable
Particulars IGST (₹)
Output tax liability 1,05,300
Less: IGST Credit (71,000)
Net GST payable 34,300
Hence, the net GST payable in cash is IGST of ₹ 34,300.

Mr. Nimit, a supplier of goods, pays GST under regular scheme. He is not eligible for any
threshold exemption. He has made the following outward taxable supplies in the month of
August, 2017:-
₹
Intra state supplies of goods 6,00,000
Inter state supplies of goods 2,00,000
He has also furnished the following information in respect of purchases made by him from
registered dealers during August, 2017:-
₹

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Intra state purchase of goods 4,00,000

Inter state purchase of goods 50,000
Balance of ITC available at the beginning of the August 2017:-
₹
CGST 15,000
SGST 35,000
IGST 20,000
Note:
(i) Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively on both inward
and outward supplies.
(ii) Both inward and outward supplies given above are exclusive of taxes, wherever
applicable.
(iii) All the conditions necessary for availing the ITC have been fulfilled.
Compute the net GST payable by Mr. Nimit for the month of August, 2017.
[CA-IPCE, May 2018]

Calculation of ITC available

Particulars CGST (₹) SGST (₹) IGST (₹)
Opening balance 15,000 35,000 20,000
Intra state purchase of goods 36,000 36,000 -
Inter state purchase of goods - - 9,000
Total 51,000 71,000 29,000
Calculation of GST payable
Particulars CGST (₹) SGST (₹) IGST (₹)
Intra state supplies of goods 54,000 54,000 -
Inter state supplies of goods - - 36,000
Total 54,000 54,000 36,000
Calculation of net GST payable
Particulars CGST (₹) SGST (₹) IGST (₹)
Output tax liability 54,000 54,000 36,000
Less: CGST Credit (51,000) - -
Less: SGST credit - (54,000) (7,000)
Less: IGST credit - - (29,000)
Net GST payable 3,000 - -
Hence, the net CGST payable in cash is ₹ 3,000.

Mr. Ajay, a registered supplier of goods, pays GST under regular scheme and provides the
following information for the month of August, 2017:-
Particulars ₹
Inter-state taxable supply of goods 10,00,000
Intra-state taxable supply of goods 2,00,000
Intra-state purchase of taxable goods 5,00,000
He has the following Input tax credit at the beginning of August 2017:-
Nature ITC Amount in (₹)
CGST 20,000
SGST 30,000
IGST 25,000
Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively. Both inward and outward
supplies are exclusive of taxes, wherever applicable.
All the conditions necessary for availing the ITC have been fulfilled.
Compute the net GST payable by Mr. Ajay for the month of August, 2017.
[CA-Inter, May 2018]

Calculation of ITC available

Particulars CGST (₹) SGST (₹) IGST (₹)

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Opening balance 20,000 30,000 25,000

Intra state purchase of taxable goods 45,000 45,000 -
Total 65,000 75,000 25,000
Calculation of GST payable
Particulars CGST (₹) SGST (₹) IGST (₹)
Intra state taxable supply of goods 18,000 18,000 -
Inter state taxable supply of goods - - 1,80,000
Total 18,000 18,000 1,80,000
Calculation of net GST payable
Particulars CGST (₹) SGST (₹) IGST (₹)
Output tax liability 18,000 18,000 1,80,000
Less: CGST Credit (18,000) - (47,000)
Less: SGST credit - (18,000) (57,000)
Less: IGST credit - - (25,000)
Net GST payable - - 51,000
Hence, the net GST payable in cash is ₹ 51,000 IGST.

Nargis Agro Traders located at Jaipur and engaged in the business as retail traders
provides the following details of its purchases and sales made during the month of July,
2017:
Items (Amount in Rupees)
Purchase Sales
(i) Sugar Candies 1,00,000 1,20,000
(ii) Chocolate Bars 80,000 1,00,000
(iii) Wafers Packets 75,000 60,000
(iv) Biscuits 50,000 50,000
The rate of tax under GST on the items are 5%, 12%, 12% and 18% respectively. You are
required to calculate the amount of GST payable and the date by which the due tax is to be
paid by the trader for the month of July, 17 after availing the Input Credit.
[CS-Prof, Dec 2017]

Calculation of ITC available

Particulars GST (₹)
Sugar Candies 5,000
Chocolate Bars 9,600
Wafers Packets 9,000
Biscuits 9,000
Total 32,600
Calculation of OTL
Particulars GST (₹)
Sugar Candies 6,000
Chocolate Bars 12,000
Wafers Packets 7,200
Biscuits 9,000
Total 34,200
Calculation of net GST payable
Particulars GST (₹)
Output tax liability 34,200
Less: ITC (32,600)
Net GST payable 1,600
Hence, the net GST payable in cash is ₹ 1,600.

Explain the mechanism under the CGST Act, 2017 for claiming Input Tax Credit while
making payment of taxes.

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[CS-Prof, Dec 2017]

Mr. Pankaj of Delhi supplied goods to Mr. Krishna of Delhi for ₹ 1 lakh, on which total GST
was charged @ 12%. Mr. Krishna, after purchase of goods, added 20% margin of profit (on
cost) and sold the entire goods to Mr. Ravi of Delhi. The total amount of tax payable after
claiming input tax on such transaction by Mr. Krishna is:
(A) ₹ 12,000
(B) ₹ 14,400
(C) ₹ 2,400
(D) None of the above
[CS-Exec, Jun 2018]

(C) ₹ 2,400

Balram, a registered supplier, furnishes the following details pertaining to the month of
October, 2017 (first month of starting of business):
Particulars Amount (₹)
Purchases of goods within the State 8,00,000
Purchases of goods from outside the State 10,00,000
Inter State Sales 6,00,000
Intra State Sales 12,50,000
The rates of taxes for the goods supplied are as under:
Particulars Rate
CGST 6%
SGST 6%
IGST 12%
Compute the GST payable by the supplier Balram for the month of October, 2017.
[CS-Prof, Jun 2018]

Calculation of ITC available

Particulars CGST (₹) SGST (₹) IGST (₹)
Intra state purchases of goods 48,000 48,000 -
Inter state purchase of taxable goods - - 1,20,000
Total 48,000 48,000 1,20,000
Calculation of GST payable
Particulars CGST (₹) SGST (₹) IGST (₹)
Intra state Sales 75,000 75,000 -
Inter state Sales - - 72,000
Total 75,000 75,000 72,000
Calculation of net GST payable
Particulars CGST (₹) SGST (₹) IGST (₹)
Output tax liability 75,000 75,000 72,000
Less: CGST Credit (48,000) - -
Less: SGST credit - (48,000) -
Less: IGST credit (27,000) (21,000) (72,000)
Net GST payable - 6,000 -
Hence, Net GST payable in cash is ₹ 6,000 SGST.

M/s Jonty India Ltd. a manufacturer of heavy machines registered at Jaipur (Rajasthan)
supplied one machine to M/s Dhanuka Ltd. of Udaipur (Rajasthan) on 05-02-2018 under an
invoice of the same date. Using the information given below, compute the value of the
machine and the GST payable (CGST & SGST or IGST as the case may be) in cash for the
month of February, 2018 by M/s Jonty India Ltd. with appropriate working notes.
Assume Rate of CGST, SGST and IGST on the machine to be 9%, 9% and 18% respectively.

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Sl. No. Particulars Amount in ₹

(i) The Basic price of the machine (exclusive of taxes and discount) 28,50,000
(ii) Trade discount is allowed at 3% on the basic price and is shown 85,500
in the invoice.
(iii) Secondary packing (in iron sheets) charges for safe transportation 30,000
of the machine on the request of buyer.
(iv) Design and engineering charges of the machine. 90,000
(v) Tax levied by Municipal Authority on the sale of the machine. 25,000
(vi) Subsidy received by the supplier from the State Government to 80,000
encourage manufacture of the machine.
(vii) Pre-delivery inspection charges paid to an independent agency in 22,000
terms of the agreement for supply. The amount was paid by M/s
Dhanuka Ltd.
(viii) Interest amount paid by M/s Dhanuka Ltd. for delay in payment 12,000
for the machine.
Inward Supplies
(i) IGST paid on food items for consumption by employees working in 8,000
the factory.
(ii) SGST and CGST (₹ 15,000 each) paid on Electrical transformer 30,000
used in the manufacturing process.
Note:
(i) M/s Jonty India Ltd. has no input tax credit balance at the beginning of
February, 2018. All the other conditions necessary for availing the eligible
input tax credit have been fulfilled.
(ii) There are no other transactions of supplies during the month of February,
2018.
(iii) M/s Jonty India Ltd. and M/s Dhanuka Ltd. are not related persons.
[CA-Final, Nov 2018]

Calculation of Taxable Value of the Machine

Particulars Amount (₹)
The basic price of the machine 28,50,000
Trade discount shown in the invoice [3% × 28,50,000] (85,500)
Secondary packing charges 30,000
Design and engineering charges 90,000
Tax levied by Municipal Authority 25,000
Pre-delivery inspection charges 22,000
Interest paid for delay in payment 12,000
Total 29,43,500
Calculation of GST payable
Particulars IGST (₹) CGST (₹) SGST (₹)
Gross GST payable - 2,64,915 2,64,915
Calculation of ITC available
Particulars IGST (₹) CGST (₹) SGST (₹)
Food items for consumption by employees - - -
Electrical transformer - 15,000 15,000
Total ITC available - 15,000 15,000
Calculation of Net GST Payable
Particulars IGST (₹) CGST (₹) SGST (₹)
Output Tax Liability - 2,64,915 2,6,915
Less: CGST Credit - (15,000) -
Less: SGST Credit - - (15,000)
Net GST payable - 2,49,915 2,49,915

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Pari Ltd. of Jodhpur (Rajasthan) is a registered manufacturer of cosmetic products. Pari Ltd.
has furnished following details for the month of April, 2018:
Sl. No. Particulars ₹
(A) Receipts
Details of Sales
(i) Sales in Rajasthan 8.75,000
(ii) Sales in States other than Rajasthan 3,75,000
(iii) Export under bond 6,25,000
(B) Payments
(1) Raw materials
(i) Purchased from registered suppliers located in Rajasthan 1,06,250
(ii) Purchased from unregistered suppliers located in 37,500
Rajasthan
(iii) Purchased from Punjab from registered supplier. 1,00,000
(iv) Integrated tax paid on Import from USA 22,732
(2) Consumables purchased from registered suppliers located in 1,56,250
Rajasthan including high speed diesel (Excise and VAT paid) worth
₹ 31,250 for running the machinery in the factory
(3) Monthly rent for the factory building to the owner in Rajasthan 1,00,000
(4) Salary paid to employees on rolls 6,25,000
(5) Premium paid on life insurance policies taken for specified 2,00,000
employees. Life insurance policies for specified employees have
been taken by Pari Ltd. to fulfil a statutory obligation in this
regard. The Government has notified such life insurance service
under section 17(5)(b)(iii)(A). The life insurance service provider is
registered in Rajasthan.
All the above amounts are exclusive of all kinds of taxes, wherever applicable. However,
the applicable taxes have also been paid by Pari Ltd.
The balance of Input Tax Credit (ITC) with Pari Ltd. as on 1st April, 2018 is
CGST ₹ 20,000
SGST ₹ 15,000
IGST ₹ 15,000
Assume CGST, SGST and IGST rates to be 9%, 9% and 18% respectively, wherever applicable.
Assume that all the other necessary conditions to avail the eligible input tax credit have been
complied with by Pari Ltd., wherever applicable.
Compute eligible input tax credit and net GST payable (CGST and SGST or IGST as the case
may be) by Pari Ltd. for the month of April, 2018.
[CA-Final, Nov 2018]

Calculation of eligible ITC available

Particulars IGST (₹) CGST (₹) SGST (₹)
Balance as at 01 April 2018 15,000.00 20,000.00 15,000.00
Raw materials purchased from local - 9,562.50 9,562.50
Registered suppliers
Raw materials purchased from local - - -
Unregistered suppliers
Raw materials purchased from registered 18,000.00 - -
suppliers of Punjab
Raw materials imported from USA 22,732.00 - -
Consumables purchased from local - 11,250.00 11,250.00
registered suppliers
Monthly rent to the local owner - 9,000.00 9,000.00
Salary paid to employees - - -
Premium paid on life insurance policies - 18,000.00 18,000.00
Total ITC available 55,732.00 67,812.50 62,812.50

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Calculation of OTL
Particulars IGST (₹) CGST (₹) SGST (₹)
Intra-state Sales - 78,750.00 78,750.00
Inter-state Sales 67,500.00 - -
Export under bond - - -
Total OTL 67,500.00 78,750.00 78,750.00
Calculation of Net GST Payable
Particulars IGST (₹) CGST (₹) SGST (₹)
Output Tax Liability 67,500.00 78,750.00 78,750.00
Less: IGST Credit (55,732.00) - -
Less: CGST Credit - (67,812.50) -
Less: SGST Credit - - (62,812.50)
Net GST payable 11,768.00 10,937.50 15,937.50

Quanto Ltd. is not required to register under CGST Act, 2017 but it wishes to obtain
voluntary registration, so it applied for voluntary registration on 17th September, 2017 and
registration certificate has been granted to it on 25th September, 2017. The CGST and SGST
liability for the month of September, 2017 is ₹ 24,000 each.
Quanto Ltd. provides the following information of inputs and capital goods held in stock on
24th September, 2017. It is not engaged in making Interestate outward taxable supplies.
Particulars Amount
(₹)
Input procured on 02-09-2017 lying in stock
- CGST @ 6% 4,500
- SGST @ 6% 4,500
Input received on 21-07-2017 contained in semi-finished goods held in stock:
- CGST @ 6% 7,500
- SGST @ 6% 7,500
Value of inputs contained in finished goods held in stock ₹ 2,00,000 were
procured on 19-09-2016
- IGST @ 18% 36,000
Inputs valued at ₹ 50,000 procured on 13-09-2017 lying in stock:
- IGST @ 18% 9,000
Capital goods procured on 12-09-2017
- CGST @ 6% 12,000
- SGST @ 6% 12,000
You are required to compute the amount of tax to be paid in cash by Quanto Ltd. for the
month of September, 2017.
You are also required to mention reasons for treatment of all above items.
[CA-Final, Nov 2018]

Calculation of eligible ITC available

Particulars IGST (₹) CGST (₹) SGST (₹)
Inputs procured on 02-09-2017 lying in - 4,500 4,500
stock
Input received on 21-07-2017 contained in - 7,500 7,500
semi-finished goods held in stock
Inputs contained in finished goods held in - - -
stock procured on 19-09-2016
Inputs procured on 13-09-2017 lying in 9,000 - -
stock
Capital goods procured on 12-09-2017 - - -
Total ITC available 9,000 12,000 12,000
Calculation of Net GST Payable in cash
Particulars IGST (₹) CGST (₹) SGST (₹)

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Output Tax Liability - 24,000 24,000

Less: IGST Credit - (9,000) -
Less: CGST Credit - (12,000) -
Less: SGST Credit - - (12,000)
Net GST payable - 3,000 12,000

A makes intrastate supply of goods valued at ₹ 50,000 to B within state of Karnataka. B

makes interstate supply to X Ltd. (located in Telangana) after adding 10% as his margin.
Thereafter X Ltd. sells it to Y in Telangana (intrastate sale) after adding 10% as its margin.
Assume that the rate of GST chargeable is 18% (CGST 9% plus SGST 9%) and IGST
chargeable is 18%. Calculate tax payable at each stage of the transactions detailed above.
Wherever input tax credit is available and can be utilized calculate the net tax payable in
cash. At each stage of the transaction indicate which government will receive the tax paid
and to what extent.
[CA-Final, Nov 2018]

Transaction between A – B (intra-state)

Particulars CGST (₹) [to CG] SGST (₹) [to KG]
Tax collected from B [₹ 50,000 × 9% each] 4,500 4,500
Net tax payable in cash by A 4,500 4,500
Transaction between B – X (inter-state)
Particulars IGST (₹) [to CG]
Tax collected from X [₹ (50,000 + 10%) × 18%] 9,900
Less: CGST Credit [from CG] (4,500)
Less: SGST Credit [from KG] (4,500)
Net tax payable in cash by B 900
Transaction between X – Y (intra-state)
Particulars CGST (₹) [to CG] SGST (₹) [to TG]
Tax collected from Y [₹ (55,000 + 10%) × 9% each] 5,445 5,445
Less: IGST Credit [from CG] (5,445) (4,455)
Net tax payable in cash by X - 990

M/s J & Co. Chartered Accountants a partnership firm having its registered and head office
in Mumbai and Registered under the GST Act in the State of Maharashtra only. It does not
have any branches in other state. The Gross Receipts of the firm in the Financial Year 2017-
18 was ₹ 60 lakhs. Firm has submitted following information for the month of August, 2018:
Particulars Amount (₹)
(Excluding GST)
Professional Services Provided and Bills Raised during the month for 1,00,000
Providing of Services of ITR Filing and Income Tax Consultancy
Internal Audit of X Pvt. Ltd. at their office in Mumbai (Registered in the 50,000
state of Maharashtra)
Statutory Audit Services provided to M/s Tirupati Trading Pvt. Ltd. at 70,000
Ahmedabad (Registered in the State of Gujarat)
Firm has also furnished following information in respect of input services availed from
registered dealers for providing of output services during the month August, 2018:
Particulars Amount (₹) CGST SGST IGST
(Excluding GST)
Services availed from Courier Agency 5,000 450 450 Nil
Railway Travelling Expenses from Mumbai to 12,000 Nil Nil 600
Ahmedabad and Return Ticket for conducting
of Audit of M/s Tirupati Trading Pvt. Ltd. for 3
Tier AC

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Service Availed from Another Professional 20,000 Nil Nil 3,600

Firm at Mumbai amount is paid without TDS
U/s 194J of Income Tax Act
Notes:
(i) Rate of CGST, SGST and IGST to be 9%, 9% & 18% respectively, on outward
supplies.
(ii) All the conditions necessary for availing the ITC have been fulfilled.
(iii) Opening Balance of available input tax credit is NIL for CGST, SGST and IGST.
Compute the Net GST Payable by M/s J & Co. for the month August, 2018 after adjusting the
GST Credit. Brief reasoning should form part of your answer.
[CA-IPCE, Nov 2018]

Calculation of OTL
Particulars CGST (₹) SGST (₹) IGST (₹)
Professional Services Provided and Bills Raised during 9,000 9,000 -
the month for Providing of Services of ITR Filing and
Income Tax Consultancy
Internal Audit of X Pvt. Ltd. 4,500 4,500 -
Statutory Audit Services provided to M/s Tirupati - - 12,600
Trading Pvt. Ltd.
Total GST Payable 13,500 13,500 12,600
Calculation of ITC
Particulars CGST (₹) SGST (₹) IGST (₹)
Services availed from Courier Agency 450 450 -
Railway Travelling Expenses from Mumbai to - - 600
Ahmedabad and Return Ticket for conducting of Audit
of M/s Tirupati Trading Pvt. Ltd. for 3 Tier AC
Service Availed from Another Professional Firm at - - 3,600
Mumbai
Total ITC Available 450 450 4,200
Calculation of Net GST Payable
Particulars CGST (₹) SGST (₹) IGST (₹)
Gross GST Payable 13,500 13,500 12,600
Less: IGST Credit - - (4,200)
Less: CGST Credit (450) - -
Less: SGST Credit - (450) -
Net GST Payable in Cash 13,050 13,050 8,400

‘M/s Maheshwari Corporation Pvt. Ltd.’ is a supplier of goods and services at Bangalore,
registered in the State of Karnataka having Turnover of ₹ 200 lakhs in the last financial
year. It has furnished the following information for the month of June, 2018.
Sr. Particulars Amount in (₹)
No. Excluding GST
(1) Services provided by way of Labour Contract for repairing a 1,30,000
single residential unit otherwise than as a part of residential
complex (It is an intra state transaction.)
(2) Intra State Sale of Taxable Goods including ₹ 50,000 received as 2,50,000
advance in April, 2018. The invoice for the entire sale value is
issued on 15th June, 2018
(3) Goods Transport Services received from GTA, GTA is paying tax @ 1,80,000
12% (It is an interstate transaction.)
(4) Goods Purchased from unregistered dealer on 20th June, 2018 80,000
(Interstate purchases are worth ₹ 45,000 and balance purchases
was intrastate).

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Compute Net GST Liability (CGST, SGST, IGST as the case may be) of M/s Maheshwari
Corporation Pvt. Ltd. for the month of June, 2018 assume the rates of GST, unless otherwise
specified, as under:
CGST – 9%, SGST – 9%, IGST – 18%
[CA-IPCE, Nov 2018]

Calculation of OTL
Particulars CGST (₹) SGST (₹) IGST (₹)
Services provided by way of Labour Contract for 11,700 11,700 -
repairing a single residential unit otherwise than as a
part of residential complex
Intra state sale of taxable goods 22,500 22,500 -
Total GST Payable 34,200 34,200 -
Calculation of ITC
Particulars CGST (₹) SGST (₹) IGST (₹)
Goods Transport Services received from GTA - - 21,600
Total ITC Available - - 21,600
Calculation of Net GST Payable
Particulars CGST (₹) SGST (₹) IGST (₹)
Gross GST Payable 34,200 34,200 -
Less: IGST Credit (21,600) - -
Net GST Payable in Cash 12,600 34,200 -

Insight Ltd. is operating in West Bengal. The Tax liability for the month of August, 2017 is as
follows:
Sl. No. Tax Liability West Bengal (₹)
(1) Output CGST Payable 24,000
(2) Output SGST Payable 9,000
(3) Output IGST Payable 3,000
(4) Input CGST 7,000
(5) Input SGST 14,000
(6) Input IGST 12,000
Calculate Tax payable and carry forward for the month of August, 2017.
[CA-IPCE, Nov 2018]

Calculation of Net GST Payable

Particulars CGST (₹) SGST (₹) IGST (₹)
Gross GST Payable 24,000 9,000 3,000
Less: IGST Credit (9,000) - (3,000)
Less: CGST Credit (7,000) - -
Less: SGST Credit - (9,000) -
Net GST Payable in Cash 8,000 - -

Mr. Himanshu, a registered supplier of chemicals, pays GST under regular scheme. He is
not eligible for any threshold exemption. He has made the following outward taxable
supplies for the month of September 2018:
Intra-state supply of goods ₹ 25,00,000
Inter-state supply of goods ₹ 5,00,000
He has also made the following inward supply:
Intra-state purchase of goods from registered dealer ₹ 14,00,000
Intra-state purchase of goods from unregistered dealer ₹ 2,00,000
Inter-state purchase of goods from registered dealer ₹ 4,00,000
Balance of ITC at the beginning of September 2018:
CGST ₹ 95,000

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SGST ₹ 60,000
IGST ₹ 50,000
Additional Information:
• He purchased a car (intra-state supply) used for business purpose at a price of ₹
6,72,000/- (including CGST of ₹ 36,000 & SGST of ₹ 36,000) on September 15,
2018. He capitalized the full value including GST in the books on the same date to
claim depreciation.
• Out of inter-state purchase from registered dealer, goods worth ₹ 1,00,000 were
received on October 3, 2018 due to road traffic jams.
Note:
(i) Rate of CGST, SGST and IGST to be 9%, 9% and 18% respectively.
(ii) Both inward and outward supplies given above are exclusive of taxes, wherever
applicable.
(iii) All the conditions necessary for availing the ITC have been fulfilled except
mentioned above.
Compute the net CGST, SGST and IGST payable in cash by Mr. Himanshu for the month of
September, 2018.
[CA-Inter, May 2019]

Calculation of OTL
Particulars CGST (₹) SGST (₹) IGST (₹)
Inter-state supply of goods - - 90,000
Intra-state supply of goods 2,25,000 2,25,000 -
Total GST Payable 2,25,000 2,25,000 90,000
Calculation of ITC
Particulars CGST (₹) SGST (₹) IGST (₹)
Opening Balance 95,000 60,000 50,000
Intra-state purchase of goods from registered dealer 1,26,000 1,26,000 -
Intra-state purchase of goods from unregistered - - -
dealer
Inter-state purchase of goods from registered dealer - - 54,000
Intra-state purchase of car used for business purpose - - -
Total ITC Available 2,21,000 1,86,000 1,04,000
Calculation of Net GST Payable
Particulars CGST (₹) SGST (₹) IGST (₹)
Gross GST Payable 2,25,000 2,25,000 90,000
Less: IGST Credit (4,000) (10,000) (90,000)
Less: CGST Credit (2,21,000) - -
Less: SGST Credit - (1,86,000) -
Net GST Payable in Cash - 29,000 -

M/s Daksha Enterprises has made a cash deposit of ₹ 10,000 under minor head ‘tax’ of
major head ‘SGST’. It has a liability of ₹ 2,000 for minor head ‘interest’ under the major
head ‘SGST’
State whether M/s Daksha Enterprises can utilize the amount available for payment of
interest.
[CA-Inter, May 2019]

No

Mr. Uttam Kumar a registered supplier of service in Kolkata, has provided following
information for the month of October, 2018:
No. Particulars Amount in (₹)
1. Intra-state taxable supply of service 6,40,000

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2. Amount received from Kapola Pvt. Ltd., for service provided to 5,00,000
company. (He is a director in Kapola P. Ltd.), being intra-state
transaction
3. Paid legal fee to senior advocate for one legal matter within state, 50,000
being intra-state transaction
4. Amount received for service provided by him as a commentator to 1,20,000
a local recognized sports body, being intra-state transaction
5. Amount received for acting as a coach in recreational activities 30,000
relating to sports, from one local charitable entity registered under
section 12AA of the Income Tax Act, 1961, being intra-state
transaction
Compute the net GST liability (CGST, SGST or IGST) of Mr. Uttam Kumar for the month of
October, 2018.
Rate of CGST, SGST and IGST are 9%, 9% and 18% respectively.
All the amounts given are exclusive of CGST, SGST and IGSST, wherever applicable.
[CA-IPCE, May 2019]

Calculation of Net GST Liability

Particulars CGST (₹) SGST (₹)
Intra-state taxable supply of service 57,600 57,600
Add: Amount received from Kapola Pvt. Ltd. - -
Add: Legal fee paid to senior advocate 4,500 4,500
Add: Amount received for service provided as commentator 10,800 10,800
Add: Amount received for acting as a coach - -
Gross GST payable 72,900 72,900
Less: ITC on tax paid on RCM basis 4,500 4,500
Net GST payable in cash (including RCM) 68,400 68,400

What are the e-ledgers? State the entries to be debited to electronic liability register under
the CGST Act, 2017 and the CGST Rules, 2017.
[CA-IPCE, May 2019]

X, a manufacturer of roofing sheets, has total input tax credit of ₹ 1,60,000 as on 30-06-
2018. He provides the following other information pertaining to June 2018:
(1) Input tax on raw materials in June is ₹ 40,000.
(2) Input tax on account of Harvest caterers in connection with his Housewarming is ₹
10,000.
(3) Input tax on inputs contained in exempt supplies of ₹ 2 lakhs in June is ₹ 20,000.
(4) GST paid on cosmetic and plastic surgery of CEO of the company is ₹ 30,000.
(5) Total turnover (interstate, taxable @ 18%) for the month of June 2018 is ₹ 60 lakhs.
Compute the ITC available and his output tax liability for the month of June 2018.
[CA-Final, May 2019]

Calculation of ITC available

Particulars GST (₹)
Balance as at 30-06-2018 1,60,000
Less: ITC to be reversed u/r 42 of CGSTR, 2017 (1,290)
Total 1,58,710
Calculation of OTL
Particulars GST (₹)
GST on taxable turnover 10,80,000
Total 10,80,000

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Mr. George, a registered supplier of goods at Kerala who pays GST under regular scheme,
has made the following transactions (exclusive of tax) during April 2018:
Source Purchases (₹) Sales (₹) Tax Rate
New Delhi 5,00,000 10,00,000 18%
Trivandrum 2,50,000 8,00,000 9% each for SGST & CGST
Total 7,50,000 18,00,000
He has complied with all the conditions for availing the ITC and has the following ITC
credit on 01-04-2018:
Source Taxes (₹) Interest (₹) Penalty (₹)
CGST 30,000 1,500 500
SGST 30,000 1,500 500
IGST 1,00,000 2,000 500
Compute the net CGST, SGST and IGST payable by Mr. George during April, 2018 in cash.
[CA-Final, May 2019]

Calculation of OTL
Particulars CGST (₹) SGST (₹) IGST (₹)
Inter-state supply of goods - - 1,80,000
Intra-state supply of goods 72,000 72,000 -
Total GST Payable 72,000 72,000 1,80,000
Calculation of ITC
Particulars CGST (₹) SGST (₹) IGST (₹)
Opening Balance 30,000 30,000 1,00,000
Intra-state purchase of goods 22,500 22,500 -
Inter-state purchase of goods - - 90,000
Total ITC Available 52,500 52,500 1,90,000
Calculation of Net GST Payable
Particulars CGST (₹) SGST (₹) IGST (₹)
Gross GST Payable 72,000 72,000 1,80,000
Less: IGST Credit (10,000) - (1,80,000)
Less: CGST Credit (52,500) - -
Less: SGST Credit - (52,500) -
Net GST Payable in Cash 9,500 19,500 -

Flowchem Palanpur (Gujarat) has entered into a contract with R Refinery, Abu Road
(Rajasthan) on 1st July, 2018 to supply 10 valves on FOR basis for its project, with following
terms and conditions:
(1) List price per valve is ₹ 1,00,000, exclusive of taxes.
(2) The valves go through two stage third party inspection during manufacturing, as
required by R Refinery. Cost of inspection of ₹ 15,000 is directly paid by R Refinery
to testing agency.
(3) A special packing is to be done, as required by R Refinery. Cost of special packing is
₹ 10,000.
(4) After making supply of valves, Flowchem has to arrange for erection and testing at
the site for commissioning. Cost of erection etc. is of ₹ 15,000.
(5) The goods were dispatched with tax invoice on 20th July, 2018 and they reached the
destination at Abu-Road on 21st July, 2018. The lorry freight of ₹ 5,000 has been
paid by R Refinery directly to lorry driver.
Assume the CGST and SGST rates to be 9% each and IGST rate to be 18%. Opening ITC of
CGST is ₹ 20,000 and SGST is ₹ 20,000. All the given amounts are exclusive of GST,
wherever applicable.
It has also undertaken following local transactions during the month of July, 2018 on which
it has paid CGST and SGST as under:

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Sl. Particulars Amount paid Amount paid

No. CGST (₹) SGST (₹)
1. It has availed services of works contractor to 5,000 5,000
erect foundation for fixing the machinery to
earth in the factory
2. It has laid pipe line upto the gate of its factory to 10,000 10,000
bring the water to the factory for the purpose of
production facility
3. For the purpose of smooth and convenient 5,000 5,000
communication in its factory, it has installed
telecommunication tower of a mobile company
(with due permission), the mobile phones of
which have been provided to staff for factory
work
4. It has entered into an agreement with a travel 2,500 2,500
company to provide home travel facility to its
employees when they are on leave
5. It has entered into an agreement with a fitness 2,000 2,000
centre to provide wellness services to its
employees after office hours
Work out the GST liability [CGST & SGST or IGST, as the case may be] of Flowchem
Palanpur (Gujarat) for July, 2018 after making suitable assumptions, if any.
[CA-Final, May 2019]

Calculation of Value of Taxable Supply

Particulars Amount (₹)
List price of valves 10,00,000
Add: Inspection cost 15,000
Add: Special packing 10,000
Add: Erection and testing 15,000
Add: Freight 5,000
Value of taxable supply 10,45,000
Calculation of OTL
Particulars IGST (₹)
GST liability 1,88,100
Total OTL 1,88,100
Calculation of ITC
Particulars CGST (₹) SGST (₹)
Opening Balance 20,000 20,000
Works contract 5,000 5,000
Pipe line upto factory gate - -
Installation of telecommunication towers - -
Home travel facility to employees - -
Fitness centre services - -
Total ITC Available 25,000 25,000
Calculation of Net GST Payable
Particulars CGST (₹) SGST (₹) IGST (₹)
Gross GST Payable - - 1,88,100
Less: CGST Credit - - (25,000)
Less: SGST Credit - - (25,000)
Net GST Payable in Cash - - 1,38,100

Vansh Shoppe is a registered supplier of both taxable and exempted goods, registered
under GST in the State of Rajasthan. Vansh Shoppe has furnished the following details for
the month of April, 2019:

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₹
(1) Details of sales:
Sales of taxable goods 50,00,000
Sales of goods not leviable to GST 10,00,000
(2) Details of goods purchased for being sold in the shop:
Taxable goods 45,00,000
Goods not leviable to GST 4,00,000
(3) Details of expenses:
Monthly rent payable for the shop 3,50,000
Telephone expenses paid 50,000
(₹ 30,000 for land line phone installed at the shop and ₹ 20,000 for
mobile phone given to employees for official use)
Audit fees paid to a Chartered Accountant 60,000
(₹ 35,000 for filing of income tax return & the statutory audit of
preceding financial year and ₹ 25,000 for filing of GST return)
Premium paid on health insurance policies taken for specified 10,000
employees of the shop. The Government has not notified such health
insurance service under section 17(5)(b)(iii)(A) CGST Act, 2017
Freight paid to goods transport agency (GTA) for inward 50,000
transportation of non-taxable goods
Freight paid to goods transport agency (GTA) for inward 1,50,000
transportation of taxable goods
GST paid on goods given as free samples 5,000
All the above amounts are exclusive of all kind of taxes, wherever applicable.
All the purchases and sales made by Vansh Shoppe are within Rajasthan. All the purchases
are made from registered suppliers. All the other expenses incurred are also within
Rajasthan.
Assume, wherever applicable, for purpose of reverse charge payable by Vansh Shoppe, the
CGSTSGST and IGST rates as 2.5%, 2.5% and 5% respectively. CGST, SGST and IGST rates
to be 6%, 6% and 12% respectively in all other cases.
There is no opening balance in the electronic cash ledger or electronic credit ledger.
Assume that all the necessary conditions for availing the ITC have been complied with.
Ignore interest, if any.
You are required to compute the following:
(1) Input Tax Credit (ITC) credited to Electronic Credit Ledger
(2) Common credit
(3) ITC attributable towards exempt supplies out of common credit
(4) Net GST liability for the month of April, 2019
[CA-Final, May 2019]

(1) CGST = ₹ 3,01,350 and SGST = ₹ 3,01,350

(2) CGST = ₹ 27,600 and SGST = ₹ 27,600
(3) CGST = ₹ 4,600 and SGST = ₹ 4,600
(4) CGST = ₹ 8,250 and SGST = ₹ 8,250

Mrs. Kajal, a registered supplier of Jaipur (Rajasthan), has made the following supplies in
the month of January, 2019:
(i) Supply of a laptop bag along with the laptop to a customer of Mumbai for 55,000
(exclusive of GST)
(ii) Supply of 10,000 kits (at 50 each) amounting to 5,00,000 (exclusive of GST) to
Ram Fancy Store in Kota (Rajasthan). Each kit consists of 1 hair oil, 1 beauty soap
and 1 hair comb
(iii) 100 kits are given as free gift to Jaipur customers on the occasion of Mrs. Kajal’s
birthday. Each kit consists of 1 hair oil and 1 beauty soap. Cost of each kit is 35, but
the open market value of such kit of goods of like kind and quality is not available.
Input tax credit has not been taken on the goods contained in the kit.

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(iv) Event management services provided free of cost for brother’s son marriage
function in Indore (Madhya Pradesh). Cost of providing said services is 80,000, but
the open market value of such services and of services of like kind and quality is not
available.
(v) 1,400 chairs and 100 coolers hired out to Function Garden, Ajmer (Rajasthan) for
3,30,000 (exclusive of GST) including cost of transporting the chairs and coolers
[20 (exclusive of GST) for each chair and each cooler] from Mrs. Kajal’s godown at
Jaipur to the Function Garden, Ajmer. The cost transportation of chairs and coolers
is paid by Mrs. Kajal to an unregistered Goods Transport Agency (GTA).
Interest of 6,400 (inclusive of GST) was collected by Mrs. Kajal from Ram Fancy
Store, Kota for the payment received with a delay of 30 days.
Assume rates of GST to be as under:-
S. Particulars Rate of Rate of Rate of
No. CGST (%) SGST (%) IGST (%)
1. Laptop 9 9 18
2. Laptop bag 14 14 28
3. Hair oil 9 9 18
4. Beauty soap 14 14 28
5. Hair comb 6 6 12
6. Event management service 2.5 2.5 5
7. Service of renting of chairs and coolers 6 6 12
8. Transportation service 2.5 2.5 5
From the above information, compute the GST liability (CGST and SGST and/ or
IGST, as the case may be) of Mrs. Kajal for the month of January, 2019
[CA-Final, May 2019]

Calculation of GST liability

Particulars CGST (₹) SGST (₹) IGST (₹)
Supply of laptop bags along with laptop - - 9,900
Supply of kits to Ram Fancy Store 70,700 70,700 -
Free gift of 100 kits - - -
Free event management services - - -
Chairs and coolers hired out to Function 19,800 19,800 -
Garden
GTA services 750 750
Net GST Payable 91,250 91,250 9,900

(1) Every person who is liable to pay tax

but fails to do so within the prescribed period
shall on his own pay an interest @ not exceeding 18%
as may be notified by the Government
for the period for which the amount remains unpaid.
NOTE: As per Notfn. No.: 13/2017 – CT and 06/2017 - IT, the rate of interest prescribed by the
Govt. is 18%

(2) The interest u/ ss (1) shall be calculated in the prescribed manner

from the day succeeding the date
on which such tax was due to be paid.

(3) Every taxable person

o who makes an undue or excess claim of ITC u/s 42(10) OR

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o who makes an undue or excess reduction in OTL u/s 43(10)

shall pay an interest @ not exceeding 24%
as may be notified by the Government.
NOTE: As per Notfn. No.: 13/2017 – CT and 06/2017 - IT, the rate of interest prescribed by the
Govt. is 24%

When interest is payable?

[CA-IPCE, May 2018]

Discuss the following in terms of provisions of CGST Act, 2017:

When interest shall be payable by a registered person and what is the maximum rate of
interest chargeable for the same?
[CA-Inter, May 2018]

When a person liable to pay tax under GST claims excess input tax credit or excess
reduction in output tax liability, he shall pay interest not exceeding:
(A) 12%
(B) 15%
(C) 24%
(D) 21%
[CS-Exec, Dec 2017]

(C) 24%

A taxable person who makes an excess claim of input tax credit or excess reduction in output
tax liability shall pay interest at such rate not exceeding:
(A) 18%
(B) 24%
(C) 20%
(D) 21%
[CS-Exec, Jun 2018]

(B) 24%

Miss Nitya has following balances in her Electronic Cash Ledger as on 28/02/2018 as per
GST portal.
Major Heads Minor Heads Amount (₹)
Tax 40,000
CGST Interest 1,000
Penalty 800
Tax 80,000
Interest 400
SGST
Penalty 1,200
Fee 2,000
Tax 45,000
IGST Interest 200
Penalty Nil
Her tax liability for the month of February, 2018 for CGST and SGST was ₹ 75,000 each.
She failed to pay the tax and contacted you as legal advisor on 12/04/2018 to advise her
as to how much amount of tax or interest she is required to pay, if any, by utilizing the
available balance to the maximum extent possible as per GST Laws. She wants to pay the
tax on 20-04-2018.
Other Information: -
(i) Date of collection of GST was 18th February, 2018.

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(ii) No other transaction after this up to 20th April 2018.

(iii) Ignore penalty for this transaction.
(iv) No other balance is available.
You are required to advise her with reference to legal provisions with brief notes on the
legal provisions applicable.
[CA-Final, Nov 2018]

Calculation of amount payable in cash

Particulars CGST SGST
Tax Interest Tax Interest
OTL 75,000 1,147 [75,000 × 75,000 1,147 [75,000 ×
18% × 31/365] 18% × 31/365]
Less: e-CaL 40,000 1,000 75,000 400
balance
Cash Payable 35,000 147 - 747

M/s Software Limited reduced the amount of ₹ 2,00,000 from the output tax liability in
contravention of provisions of section 42(10) of the CGST Act, 2017 in the month of
December 2017, which is ineligible credit. A show cause notice was issued by the Tax
Department to pay Tax along with interest. M/s Software Limited paid the tax and interest
on 31st March, 2018. Calculate interest liability (Ignore Penalty)
[CA-IPCE, Nov 2018]

₹ 2,00,000 × 24% × 70/365 = ₹ 9,205.48

• Authorized bank [Sec. 2(14) of CGSTA]: means a bank or a branch of a bank authorised by
the Government to collect the tax or any other amount payable under this Act.

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CGSTA, 2017
• Section 37: Furnishing Details of Outward Supplies
• Section 38: Furnishing Details of Inward Supplies
• Section 39: Furnishing Returns
• Section 40: First Return
• Section 41: Claim of ITC and Provisional Acceptance
• Section 42: Matching, Reversal and Reclaim of ITC
• Section 43: Matching, Reversal and Reclaim of Reduction in OTL
• Section 44: Annual Return
• Section 45: Final Return
• Section 46: Notice to Return Defaulters
• Section 47: Levy of Late Fee
• Section 48: GST Practitioners

Amend
details of
outward
Furnish details of outward supplies supplies
Section 37 Section 37(2)
1 10 15 17 20 30
Furnish details of Furnish
inward supplies return
Section 38 Section 39

• Furnish the details of outward supplies

(including invoices, debit notes, credit notes, revised invoices)
effected during a tax period
in the prescribed form and prescribed manner.
• The commissioner may extend the time limit for sufficient reasons
• Any such extension by Commissioner of state/ UT
shall be deemed to be extension by Commissioner under CGSTA
• Such details shall be communicated to the recipients
in the prescribed form and within prescribed time.

(1) The details of outward supplies shall be furnished in FORM GSTR-1.

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(2) The details shall include –

Nature of Supply Invoice wise details Consolidated details
Intra-state Supplies Registered Recipients Un-registered Recipients
Inter-state Supplies Registered Recipients + Un-registered Recipients
Un-registered Recipients (invoice value ≤ ₹ 2.5 lakhs)
(invoice value > ₹ 2.5 lakhs) [State wise]
Debit and Credit Notes issued during the month

(3) The details furnished in FORM GSTR-1 shall be made available to the concerned
registered recipients in
o FORM GSTR-2A (Part A) – General recipients
o FORM GSTR-4A – Composition recipients
o FORM GSTR-6A – ISD recipients
after the due date of filing the said form.

Please answer following individual independent cases with reference to section 37 of the
CGST Act, 2017 and rule 59 of CGST Rules, 2017:
(1) Mr. Kolly is registered supplier in the state of Gujarat. He is filing GSTR 1 every
month. During the month of February, 2018, he was out of India and so did not do
any transaction during the month. He believes that as there is no transaction there
is no need to file GSTR 1 for the month of February, 2018. Is he correct?
(2) Mr. Kaji is a registered dealer in Kerala. He was registered as a normal taxpayer for
FY 2017-18. But on 15-01-2018, he converted from normal taxpayer to composition
taxpayer. Is he liable to file GSTR-1 for the month of February, 2018?
(3) Mrs. Zeel a registered dealer in Rajasthan did not file GSTR 1 for the month of June,
2018 but she wants to file GSTR 1 for the month of July, 2018. Is it possible?
[CA-IPCE, May 2019]

(1) No
(2) No
(3) Yes

• The recipient may

verify, validate, modify or delete the details of outward supplies
communicated by the suppliers of such supplies.
• Such modifications shall be communicated to the suppliers
in the prescribed manner and within prescribed time.
• Furnish the details of inward supplies
(including inward supplies taxable under RCM, credit/ debit notes)
effected during a tax period
in the prescribed form and prescribed manner.

(1) The details of inward supplies shall be furnished in FORM GSTR-2 based on the
details received in FORM GSTR-2A as follows –

Part of FORM GSTR-2A Derived from…

Part A FORM GSTR-1 by registered suppliers

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FORM GSTR-5 by NRTP

Part B FORM GSTR-6 by ISD
Part C FORM GSTR-7 by TDS deductor
FORM GSTR-8 by TCS collector

(3) The registered person shall separately specify the ineligible ITC (fully or partially) in
FORM GSTR-2 where such eligibility can be determined at invoice level.

(4) Where the ITC relates to non-taxable supplies or for non-business purposes and
cannot be determined at invoice level, the registered person shall declare the
quantum of ineligible ITC in the said form.

(8) FORM GSTR-2 shall include –

o invoice wise details of inter-state + intra-state supplies received from
registered + un-registered persons,
o import of goods and services, and
o dr. and cr. notes received from supplier

(4) The details furnished in FORM GSTR-2 along with FORM GSTR-4 and FORM GSTR-6
shall be made available to the concerned suppliers in FORM GSTR-1A.

• The commissioner may extend the time limit for sufficient reasons
• Any such extension by Commissioner of state/ UT
shall be deemed to be extension by Commissioner under CGSTA

• Every registered supplier

shall either accept or reject
the details so communicated by the recipient
and the details of outward supplies
shall stand amended accordingly.

• Furnish a return of
inward and outward supplies, ITC availed, tax payable, tax paid
and other prescribed particulars
in prescribed form and prescribed manner.
• Pay the tax due as per the return to the Government.
• Furnishing the return is mandatory, irrespective of the supplies.

(1) The monthly return shall be filed in FORM GSTR-3

(2) Part A of the return shall be auto-populated on the basis of information furnished
through FORM GSTR-1 and FORM GSTR-2, and other liabilities of the preceding tax
period.

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(3) Every registered person furnishing FORM GSTR-3 shall discharge his liability towards
tax, interest, penalty, fees etc. by debiting his e-CaL or e-CrL as per Section 49 and
include the details in Part B of the said form.

(4) Any balance in the e-CaL may be claimed as refund as per Sec. 49(6) in Part B of the
return and it shall be deemed to be an application filed u/s 54.

• The commissioner may extend the time limit for sufficient reasons.
• Any such extension by Commissioner of state/ UT
shall be deemed to be extension by Commissioner under CGSTA.

(5) Where the time limit for furnishing FORM GSTR-1 and FORM GSTR-2 has been
extended, the Commissioner may notify the manner and conditions subject to which
return shall be furnished in FORM GSTR-3B

(5) Where the time limit for furnishing FORM GSTR-1 or FORM GSTR-2 has been
extended, the return u/s 39(1) shall be furnished in FORM GSTR-3B in the manner
and subject to the conditions notified by the Commissioner.
However, where a person referred to in (1) is required to furnish a return in FORM
GSTR-3B, then such person shall not be required to furnish the return in FORM
GSTR-3.

(6) Where FORM GSTR-3B is furnished after the due date for furnishing FORM GSTR-2 –
(a) Part A of the return shall be auto-populated on the basis of information
furnished through FORM GSTR-1 and FORM GSTR-2, and other liabilities of
the preceding tax period, and Part B shall be generated on the basis of FORM
GSTR-3B filed for the tax period.
(b) In case there is any discrepancy between FORM GSTR-3 and FORM GSTR-
3B, the registered person shall modify Part B accordingly and discharge his
tax and other liabilities.
(c) In case the amount of ITC in FORM GSTR-3 exceeds the amount of ITC as per
FORM GSTR-3B, the additional amount shall be credited to the e-CrL of the
registered person.

Discuss the provisions relating to refund of balance in electronic cash ledger as per the GST
law.
[CS-Prof, Dec 2018]

Furnish statement
1 10 Section 39 18 30

• Every Composition supplier shall

furnish a return of turnover in the State/ UT, inward supplies, tax payable and tax paid.

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• Pay the tax due as per the return

to the Government
• Furnishing the return is mandatory, irrespective of the supplies.
• The commissioner may extend the time limit for sufficient reasons
• Any such extension by Commissioner of state/ UT
shall be deemed to be extension by Commissioner under CGSTA
• The details of inward supplies
modified, deleted or included by the recipient in his return
shall be communicated to the supplier
in the prescribed manner and within the prescribed time.

(1) Every person registered to pay tax u/s 10 or by availing the benefit of Notfn. No.:
02/2019 – CT(R), shall –
(i) furnish a quarterly statement in FORM GST CMP – 08, and
(ii) furnish a return for every FY or part thereof in FORM GSTR – 4 till 30 April
following the end of such FY.

(2) Every registered person furnishing FORM GST CMP – 08 shall discharge his liability
towards tax, interest, by debiting his e-CaL

(3) FORM GSTR-4 shall include –

(i) invoice wise details of inter-state + intra-state supplies received from
registered + un-registered persons, and
(ii) consolidated details of outward supplies

(4) A registered person who opts to pay tax u/s 10 or avails the benefit of Notfn. No.:
02/2019 – CT(R) from the beginning of a FY, shall furnish FORM GSTR-1, FORM
GSTR-2 and FORM GSTR-3(or 3B) relating to the period during which he was liable
to do so till, earlier of –
o due date of furnishing return of September of the succeeding FY, or
o the date of furnishing annual return of the preceding FY.

NOTE: The said person shall not be eligible to avail ITC on receipt of invoices/ dr. notes from
the supplier for the period prior to his opting for composition scheme or availing the benefeit
of Notfn. No.: 02/2019 – CT(R).

(5) Where the option of composition scheme is withdrawn by the person himself or the
PO, the said person shall furnish a statement in FORM GST CMP – 08 for the period
for which he has paid tax under the composition scheme
till the 18th day of the month succeeding the quarter in which the withdrawal date
falls
and furnish a return in FORM GSTR – 4 for the said period till the 30th day of April
following the end of the FY during which such withdrawal falls.

(6) A registered person who ceases to avail the benefit of Notfn. No.: 02/2019 – CT(R)
shall, where required, furnish a statement in FORM GST CMP – 08 for the period for
which he has paid tax by availing the benefit under the said notification
till the 18th day of the month succeeding the quarter in which the date of cessation
takes place
and furnish a return in FORM GSTR – 4 for the said period till the 30th day of April
following the end of the FY during which such cessation happens.

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Notfn. No.: 21/2019 – CT

The CG has notified the registered persons paying tax under the provisions of section 10 or
by availing the benefit of Notfn. No.: 02/2019 – CT(R) as the class of registered persons who
shall follow the below-mentioned special procedure for furnishing return and payment of
tax –
o The said persons shall furnish a statement, every quarter or part thereof containing
the details of payment of self-assessed tax in FORM GST CMP-08, till the 18th day of
the month succeeding such quarter.
o The said persons shall furnish a return for every FY or part thereof in FORM GSTR -
4, on or before the 30th day of April following the end of such financial year.
o The registered persons paying tax by availing the benefit of the said notification, in
respect of the period for which he has availed the said benefit, shall be deemed to
have complied with the provisions of section 37 and section 39, if they have
furnished FORM GST CMP-08 and FORM GSTR-4 as provided above.

• Furnish a return in the prescribed manner and prescribed form

o Within 20 days of end of the relevant calendar month
OR
o Within 7 days after the last day of the period of registration
whichever is earlier
• Pay the tax due as per the return
to the Government.

Every registered NRTP shall furnish a return in FORM GSTR-5 providing the details of
outward as well as inward supplies and pay the tax, interest and other liabilities by the due
date of furnishing such return.

• The commissioner may extend the time limit for sufficient reasons
• Any such extension by Commissioner of state/ UT
shall be deemed to be extension by Commissioner under CGSTA

Non-resident taxable person is required to provide details in the return for non-resident
foreign taxable person in the Return Form No.:
(A) GSTR-3
(B) GSTR-5
(C) GSTR-8
(D) None of the above
[CS-Exec, Jun 2018]

(B) GSTR-5

Furnish return
Section 39
1 10 13 30

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• Furnish a return
in the prescribed manner and prescribed form
• The details of inward supplies
modified, deleted or included by the recipient in his return
shall be communicated to the supplier
in the prescribed manner and within the prescribed time.

Every ISD shall furnish a return in FORM GSTR-6 after adding, correcting or deleting the
details received in FORM GSTR-6A.
The said return shall contain the details of tax invoices on which credit has been received
and those issued u/s 20

• The commissioner may extend the time limit for sufficient reasons

• Any such extension by Commissioner of state/ UT

shall be deemed to be extension by Commissioner under CGSTA

Input Service Distributor shall file the return in GSTR-6 for the input service distributed by:
(A) 10th of the next month
(B) 18th of the next month
(C) 13th of the next month
(D) 20th of the next month
[CS-Exec, Jun 2018]

(C) 13th of the next month

State the Form Number and the due date for its filing under CGST Act, 2017 of the return by:
(i) a composition scheme taxable person
(ii) an input service distributor
[CS-Prof, Jun 2018]

(i) FORM GSTR-4 – 18th of the month succeeding the end of the relevant quarter.
(ii) FORM GSTR-6 – 13th of the month succeeding the end of the relevant month.

• Subject to Section 37 and 38

if the registered person discovers any error or omission
by himself
he shall rectify such mistakes
in the return to be furnished for the tax period of such discovery
and also pay the interest due on such amount.
• No such rectification shall be allowed after the due date for furnishing return for
September or Q2 of the next FY, or the actual date of furnishing relevant annual return,
whichever is earlier.

Mr. Anand Kumar, a regular taxpayer, filed his return of outward supply (GSTR-1) for the
month of August, 2017 before the due date. Later on, in February, 2018 he discovered error
in the GSTR-1 return of August 2017 already filed and wants to revise it.

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You are required to advise him as to the future course of action to be taken by him
according to statutory provisions.
[CA-Final, May 2018]

Explain the procedure of furnishing details of outward supplies and of revision for
rectification of errors and omissions as per CGST Act, 2017.
[CS-Prof, Dec 2017]

• Subject to prescribed conditions and restrictions

every registered person shall be entitled
to take the self-assessed ITC in his return
and such amount shall provisionally be credited to his e-CrL.
• This credit shall be utilized only for payment of
self-assessed output tax as per the return.

• The details of inward supplies furnished shall be matched

(a) with the corresponding details of outward supplies furnished by the
corresponding suppliers in his valid return
(b) with the IGST paid on imported goods
(c) for duplication of ITC claims
• All the claims of correctly matching ITC as mentioned above
shall be finally accepted and communicated to the recipient.
• Where the ITC claimed exceeds the tax declared by the supplier
OR
such supply is not declared by the supplier in his valid returns,
the discrepancy shall be communicated to both.
• If the supplier does not rectify the discrepancy
in his valid return for the month of communication,
it shall be added to the OTL of the recipient
in the month succeeding the month of communication.
• If the supplier declares the invoice / debit note in his valid return
within the time period prescribed in Section 39(9)
the recipient shall be eligible to reduce the amount added earlier
from his OTL
• In case of duplication of claims of ITC,
it shall be communicated to the recipient only
• Amount of such duplication shall be added
to the OTL of the recipient in his return
pertaining to the month of communication
• In both the scenarios,
if any amount is added to the OTL of the recipient,
he shall be liable to pay interest @ u/s 50(1) on such amount
from the date of availing credit
till the corresponding additions are made.
• If later on, any reduction as mentioned earlier is accepted
the interest paid shall be refunded

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by crediting the e-CaL of the recipient

but it should not exceed the amount of interest paid by the supplier
• If any amount is reduced from the OTL
in contravention to the aforementioned provision,
it shall be added to the OTL of the recipient
in his return for the month of contravention
and the recipient shall be liable to pay interest @ u/s 50(3)
on such added amount.

The following details relating to the claim of ITC provisionally allowed u/s 41 shall be
matched after the due date of furnishing FORM GSTR-3 –
(a) GSTIN of the supplier
(b) GSTIN of the recipient
(c) Invoice/ Dr. note no.
(d) Invoice/ Dr. note date
(e) Tax amount
However, where the time limit for filing FORM GSTR-1 and FORM GSTR-2 has been
extended, the date of matching the claim of ITC shall also be extended accordingly.
Furthermore, the Commissioner may extend the date of matching the claim of ITC to specific
dates by issuing an order on the recommendation of the GST Council.

NOTE:
(i) The claim of ITC in respect of invoices/ dr. notes in FORM GSTR-2 that were
accepted by the recipient from FORM GSTR-2A without any amendment shall be
treated as matched if the corresponding supplier has furnished a valid return.
(ii) The claim of ITC shall be considered as matched if
the amount of ITC claimed ≤ the tax paid by the corresponding supplier on such
invoice/ dr. note.

▪ The final acceptance of claim of ITC shall be made available to the claimant in FORM
GST MIS-1.

▪ The claim of ITC which had earlier been communicated as mismatched but now is
found to be matched after rectification by the supplier or recipient shall be finally
accepted and made available to the claimant in FORM GST MIS-1.

(1) Any discrepancy in the claim of ITC and the details of addition to the OTL on
continuation of such discrepancy shall be communicated to
o the recipient, making such claim, in FORM GST MIS-1
o the supplier in FORM GST MIS-2
on or before the last date of the month in which such matching was carried out.

(2) The supplier may make suitable rectifications in FORM GSTR-1 to be furnished for the
month in which the discrepancy is communicated.

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(3) The recipient may make suitable rectifications in FORM GSTR-2 to be furnished for
the month in which the discrepancy is communicated.

(4) In case it is not so rectified, the discrepancy shall be added to the OTL of the
recipient in his FORM GSTR-3 furnished for the succeeding month.

Any duplication in the claims of ITC in FORM GSTR-2 shall also be communicated in FORM
GST MIS-1

• The details of credit notes relating to outward supplies furnished shall be matched
(a) with the corresponding reduction in the ITC claimed by the corresponding
recipient in his valid return
(b) for duplication of claims for reduction in OTL
• All the claims of correctly matching reduction in OTL
shall be finally accepted and communicated to the supplier.
• Where the reduction of OTL claimed exceeds the corresponding reduction of claim for
ITC
OR
such credit note is not declared by the recipient in his valid returns,
the discrepancy shall be communicated to both.
• If the recipient does not rectify the discrepancy
in his valid return for the month of communication,
it shall be added to the OTL of the supplier
in the month succeeding the month of communication.
• If the recipient declares the credit note in his valid return
within the time period prescribed in Section 39(9)
the supplier shall be eligible to reduce the amount added earlier
from his OTL.
• In case of duplication of claims for reduction of OTL,
it shall be communicated to the supplier only.
• Amount of such duplication shall be added
to the OTL of the supplier in his return
pertaining to the month of communication.
• In both the scenarios,
if any amount is added to the OTL of the supplier,
he shall be liable to pay interest @ u/s 50(1) on such amount
from the date of such claim for reduction in OTL
till the corresponding additions are made.
• If later on, any reduction as mentioned earlier is accepted
the interest paid shall be refunded
by crediting the e-CaL of the supplier
but it should not exceed the amount of interest paid by the recipient.
• If any amount is reduced from the OTL
in contravention to the aforementioned provision,
it shall be added to the OTL of the supplier
in his return for the month of contravention

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and the supplier shall be liable to pay interest @ u/s 50(3)

on such added amount.

The following details relating to the claim of reduction in OTL shall be matched after the due
date of furnishing FORM GSTR-3 –
(a) GSTIN of the supplier
(b) GSTIN of the recipient
(c) Cr. note no.
(d) Cr. note date
(e) Tax amount
However, where the time limit for filing FORM GSTR-1 and FORM GSTR-2 has been
extended, the date of matching the claim of reduction in OTL shall also be extended
accordingly.
Furthermore, the Commissioner may extend the date of matching the claim of ITC to specific
dates by issuing an order on the recommendation of the GST Council.

NOTE:
(i) The claim of reduction in OTL in respect of cr. notes in FORM GSTR-1 that were
accepted by the recipient in FORM GSTR-2 without any amendment shall be treated
as matched if the corresponding supplier has furnished a valid return.
(ii) The claim of reduction in OTL shall be considered as matched if
the amount of OTL after the reduction claimed ≥ the claim of ITC after considering
the reduction admitted and discharged by the corresponding supplier on such cr.
note. in his valid return.

(1) The final acceptance of claim of reduction in OTL shall be made available to the
claimant in FORM GST MIS-1.

(2) The claim of reduction in OTL which had earlier been communicated as mismatched
but now is found to be matched after rectification by the supplier or recipient shall
be finally accepted and made available to the claimant in FORM GST MIS-1.

(1) Any discrepancy in the claim of reduction in OTL and the details of addition to the
OTL on continuation of such discrepancy shall be communicated to
o the supplier, making such claim, in FORM GST MIS-1
o the recipient in FORM GST MIS-2
on or before the last date of the month in which such matching was carried out.

(2) The supplier may make suitable rectifications in FORM GSTR-1 to be furnished for the
month in which the discrepancy is communicated.

(3) The recipient may make suitable rectifications in FORM GSTR-2 to be furnished for
the month in which the discrepancy is communicated.

(4) In case it is not so rectified, the discrepancy shall be added to the OTL of the supplier
in his FORM GSTR-3 furnished for the succeeding month and debited to his ELR as
well.

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Any duplication in the claims of reduction in OTL in FORM GSTR-1 shall also be
communicated in FORM GST MIS-1.

The interest to be refunded u/s 42(9) or 43(9) shall be claimed by the registered person in
FORM GSTR-3 and shall be credited to his e-CaL.
The amount so credited shall be available for payment of any future liability towards interest
or
the taxable person may claim refund of the amount u/s 54.

• Where any registered person,

who has furnished the outward/ inward supply details
and which have remained unmatched u/s 42 or 43,
discovers any error or omission
he shall rectify such mistakes
in the prescribed manner
and pay any tax and interest arising due to short payment earlier
• No such rectification shall be allowed after furnishing
o the periodic return for September following the FY to which such details
pertain, or
o the relevant annual return,
whichever is earlier

• Applicable on every registered person, except

ISD; TDS deductor; TCS collector; CTP; NRTP
• Before 31st day of December of the succeeding Financial Year
• In case the registered person is required to get his accounts audited u/s 35(5)
the annual return shall be accompanied with
o A copy of audited annual accounts
o A reconciliation statement, reconciling the value of supplies as per the return
and as per the audited annual financial statement

(1) In general cases, the annual return shall be furnished in FORM GSTR-9.
However, in case of composition suppliers, the annual return shall be furnished by
FORM GSTR-9A
(3) Every registered person, except the ones specified otherwise u/s 35(5), whose agg.
turnover during a FY exceeds ₹ 2 crores shall get his accounts audited u/s 35(5). A
copy of the audited annual accounts and a certified reconciliation statement shall be
furnished in FORM GSTR-9C

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Notfn. No. – 30/2019 – CT

The CG has notified the persons registered u/s 24 supplying OIDAR services from a place
outside India to an un-registered person in India as the class of registered persons who
shall not be required to furnish FORM GSTR – 9 or FORM GSTR – 9C.

Explain the provision relating to filing of Annual Return under section 44 of CGST Act, 2017
and Rules thereunder.
[CA-IPCE, May 2018]

Who are required to file Annual Return under CGST Act, 2017? Also explain the time limit for
filing such return. Is there any requirement of furnishing of the audited annual accounts?
[CS-Prof, Dec 2017]

• Applicable on every registered person, except

ISD; NRTP; TDS deductor; TCS collector; Composition supplier
whose registration has been cancelled
• Within 3 months of the
o date of cancellation
OR
o date of order of cancellation
whichever is later

Who is required to furnish Final Return under CGST Act, 2017 and what is the time limit for
the same? Discuss.
[CA-Inter, May 2018]

A taxable person whose registration has been cancelled or surrendered must file the final
return of GST within:
(A) 6 months of the cancellation
(B) 6 months after the end of the financial year
(C) 3 months after the end of the financial year
(D) 3 months after the date of cancellation
[CS-Exec, Dec 2017]

(D) 3 months after the date of cancellation

The Final Return shall be furnished in FORM GSTR-10

Taxable person whose registration has been surrendered or cancelled is required to file the
return within 3 months of the date of cancellation or date of cancellation order whichever is
later in Form Number .............
(A) GSTR-13
(B) GSTR-10
(C) GSTR-7
(D) GSTR-9
[CS-Exec, Dec 2018]

(B) GSTR-10

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Date on which liability to register arises

Date of Issuance of RC

Outward supplies made between

• Date on which he became liable for registration
AND
• Date on which registration has been granted
shall be declared in the first return
after grant of registration.

Where a registered person fails to furnish

Periodic/ annual/ final return
a notice shall be issued
requiring him to furnish the same
within 15 days
in the prescribed manner and prescribed form

A notice in FORM GSTR-3A shall be issued to a registered person who fails to furnish return
u/s 39/ 44/ 45/ 52

• Any registered person who fails to furnish

o Details of outward/ inward supplies
o Periodic return
o Final return
by the due date
shall pay late fee of
₹ 100/ day OR ₹ 5,000
whichever is lower

Notfn. No. – 64/2017, 73/2017, 04/2018, 05/2018, 06/2018, 07/2018 – CT

The CG has reduced the amount of late fee as follows:
o ₹ 25/ day – in general cases
o ₹ 10/ day –
▪ in case of FORM GSTR-3B/ 4/ 5, where the total amount of CGST
payable is nil.
▪ in case of FORM GSTR-5A, where the total amount of IGST payable is
nil.

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▪ in case of FORM GSTR-1, where there are no outward supplies in any

month/ quarter

• Any registered person who fails to furnish

the annual return
by the due date
shall pay late fee of
₹ 100/ day OR 25% of his turnover in the State/ UT
whichever is lower

Briefly discuss the provisions related to Levy of late fee as per section 47 of CGST Act, 2017
on a person who fails to furnish the details of outward or inward supplies required under
section 37 or 38 or 39 or 45 of CGST Act, 2017.
[CS-Prof, Dec 2018]

(1) The Government shall prescribe

o the manner of approval
o the eligibility conditions
o Duties and obligations
o Manner of removal
o Other conditions relevant for functioning
of a GST practitioner.

(2) A registered person may authorize

an approved GST practitioner to furnish
o the details of outward supplies
o the details of inward supplies
o the periodical returns
o the annual return
o the final return
and perform other prescribed functions
in the prescribed manner.

(3) Overruling sub-section 2,

the responsibility for correctness of
return or other details furnished by a GST practitioner
shall continue to rest with the registered person
on whose behalf such details are furnished.

(1) The application for enrolment as GSTP shall be submitted in FORM GST PCT-01 by
any person who,
(i) is a citizen of India,
(ii) is a person of sound mind,
(iii) is not adjudicated as insolvent,
(iv) has not been convicted by a competent court
and satisfied any of the following conditions:
(i) he is a rtd. officer of

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▪ Comm. Tax Deptt. of any SG, or

▪ CBIC, Deptt of Revenue, GOI
who had worked at a rank of Group-B gazetted officer or above for 2 yrs. or
more during his service under the Govt., OR
(b) he has enrolled as a STP or TRP under the existing law for 5 yrs. or more,
(c) he has passed
▪ graduate/ PG or equivalent degree exam in Commerce, Law, Banking
including Higher Auditing, Business Administration or Business
Management from any Indian University, OR
▪ a degree exam of any Foreign University recognized by any Indian
University as equivalent to the degree exam mentioned in (i), OR
▪ any other exam notified by the Govt., OR
▪ (a) final exam of the ICAI (CA)
(b) final exam of the ICAI (CMA)
(c) final exam of the ICSI (CS)

(2) On receipt of the aforementioned application, the authorized officer shall make
necessary enquiry and either enrol the applicant by issuing certificate in FORM GST
PCT-02 or reject the application if he is found to be unqualified for the same.

(3) Such enrolment shall be valid until it is cancelled.

However, no enrolled GSTP shall remain enrolled unless he passes certain exams
conducted at certain periods as may be notified by the Commissioner.
Also, no person earlier enrolled as STP/ TRP shall be eligible to remain enrolled
unless he passes the said exam within 30 months from the appointed date.

Notfn. No.: 24/2018 – CT

The National Academy of Customs, Indirect Taxes and Narcotics (NACIN), Department of
Revenue, Ministry of Finance, Government of India has been notified as the authority to
conduct examination as per Rule 83(3) of the CGSTR, 2017.

(4) A GSTP guilty of misconduct shall be issued a SCN in FORM GST PCT-03 for such
misconduct, and after being heard, may be directed by the PO by issuing an order in
FORM GST PCT-04 the he shall henceforth be disqualified to function as a GSTP.

(5) The aggrieved person may appeal against such order to the Commissioner within 30
days of issuance of the same.

(6) Any registered person may authorize a GSTP in FORM GST PCT-05, or at any time
withdraw such authorization in the same form, and the GSTP shall be allowed to
undertake the tasks indicated in the said authorization.

(7) Where a statement required to be furnished by a registered person has been

furnished by the GSTP, a confirmation shall be sought from the regd. person through
e-mail/ SMS and the furnished statement shall be made available to him as well.
However, where the regd, person fails to respond to such request till the last date of
furnishing such statement, his confirmation shall be deemed to have been received.

(8) A GSTP can undertake any of the following activities on behalf of the regd. person if
so authorized –
(a) furnish the details of outward and inward supplies;
(b) furnish monthly, quarterly, annual or final return;
(c) make deposit for credit into the e-CaL;
(d) file a claim for refund;
(e) file an application for amendment or cancellation of registration;
(f) furnish information for generation of e-way bill;

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(g) furnish details of challan in FORM GST ITC – 04

(h) file an application for amendment/ cancellation of enrolment u/r 58; and
(i) file an intimation to pay tax under the composition scheme or withdraw from
the same.
However, where any application for refund, amendment/ cancellation of registration
or intimation to pay tax/ withdraw from the composition scheme has been
submitted by the authorized GSTP, a confirmation shall be sought from the regd,
person and the application shall be made available to him. Such application shall not
be proceeded with until the regd. person gives his consent to the same.

(9) Any regd. person opting to furnish his return through GSTP shall-
(a) give his consent in FORM GST PCT-05 to any GSTP and
(b) before confirming submission of any statement prepared by the GSTP, ensure
that the facts mentioned are true and correct.

(10) The GSTP shall –

(a) prepare the statements with due diligence, and
(b) affix his DSC on the statements prepared by him or e-verify using his
credentials.

(11) A GSTP enrolled in any other state/ UT shall be treated as enrolled in the state/ UT
for the functions mentioned in (8).

(1) Every erstwhile enrolled STP/ TRP as specified u/r 83(1)(b),

who is enrolled now as a GSTP u/r 83(2)
shall pass an exam as per Rule 83(3)

(2) The NACIN shall conduct the exam.

(3) Frequency - The exam shall be conducted twice in a year as per the schedule
published by NACIN on the official websites of the Board, NACIN, common portal,
GST Council Secretariat and in the leading English and regional newspapers.

(4) Registration and fee –

(i) The required person shall register online on a website specified by NACIN.
(ii) The person so registered shall pay an exam fee, the amount and manner of
payment of which shall be specified by NACIN on the official websites of the
Board, NACIN and common portal

(5) Examination centres – The exam shall be held across India at the designated centres.
The candidate shall be given an option to choose from the list of centres as provided
by NACIN at the time of registration.

(6) Period for passing the exam and number of attempts allowed –
(i) A person enrolled as a GSTP u/r 83(2) is required to pass the exam within 2
years of enrolment.
However, in case a person is enrolled as GSTP before 1 July 2018, he shall get
1 more year to pass the exam.
Moreover, the period to pass the exam will be as specified u/r 83(3) for GSTP
to whom Rule 83(1)(b) apply.
(i) Every person referred to in rule 83(1)(b) and who is enrolled as a GSTP u/r
83(2)
is required to pass the examination within the period specified u/r 83(3).

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(ii) A person required to pass the exam may avail of any no. of attempts within
the period specified above.
(iii) A person shall register and pay the requisite fee every time he intends to
appear at the exam.
(iv) In case the GSTP who has applied for the exam is prevented from availing
one or more attempts due to unforeseen circumstances like critical illness,
accident or natural calamity, he may request the jurisdictional Commissioner
within 30 days of conduct of the said exam for granting him 1 additional
attempt to pass the same. NACIN may consider such requests on merits
based on recommendation of the jurisdictional Commissioner.

(7) Nature of exam – The exam shall be a computer based test. It shall have one
question paper consisting of MCQs.

(8) Qualifying marks – A person shall be required to secure 50% of the total marks.

(9) Guidelines for the candidates –

(i) NACIN shall issue exam guidelines covering issues such as
▪ procedure of registration,
▪ payment of fee,
▪ nature of ID documents,
▪ provision of admit card,
▪ manner of reporting at the exam centre,
▪ prohibition on possession of certain items in the exam centre,
▪ procedure of making representation and the manner of its disposal.
(ii) Any person who is or has been found to be indulging in unfair practices like
▪ obtaining support for his candidature by any means,
▪ impersonating,
▪ submitting fabricated documents,
▪ resorting to unfair practices relating to the exam or the result
▪ found in possession of any paper, book, note etc. which is not
permitted in the exam centre,
▪ communicating with others or exchanging calculators, chits, papers
etc.,
▪ misbehaving in the exam centre in any manner,
▪ tampering with the hardware and/ or software deployed, and
▪ attempting to commit or abet all or any of the aforementioned
practices
shall be dealt as per sub-rule (10)

(10) Disqualification of person using unfair means or practice – If any person is or has
been found indulging in use of unfair means or practices, NACIN may declare him
disqualified for the exam after considering any representation.

(11) Declaration of result – NACIN shall declare the results within 1 month of conduct of
exam on the official websites of the Board, NACIN, GST Council Secretariat, common
portal and state tax deptt. of the respective states/ UTs. The results shall also be
communicated to the applicant by e-mail and/ or post

(12) Handling representations – A person not satisfied with his result may represent
clearly specifying the reasons therein to NACIN or the jurisdictional Commissioner as
per the procedure established by NACIN on the official websites of the Board, NACIN
and common portal.

(13) Power to relax – The Board or SGST Commissioner may relax any of the provisions
of this rule with respect to any class or category of persons.

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(1) No person shall be eligible to attend before any authority as a GSTP for any
proceedings on behalf of any regd. person unless he has been enrolled as a GSTP.

(2) A GSTP attending on behalf of a regd./ un-regd. person in any proceedings before
any authority shall produce a copy of FORM GST PCT-05, if so required.

• Audit [Sec. 2(13) of CGSTA]: means the examination of records, returns and other
documents maintained or furnished by the registered person under this Act or the
rules made thereunder or under any other law for the time being in force to verify the
correctness of turnover declared, taxes paid, refund claimed and input tax credit
availed, and to assess his compliance with the provisions of this Act or the rules
made thereunder.
• Valid Return [Sec. 2(117) of CGSTA]: means a return furnished under sub-section (1) of
section 39 on which self-assessed tax has been paid in full.

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IGSTA, 2017
• Section 15: Refund of IGST to international tourists
• Section 16: Zero rated supply
• Section 17: Apportionment of tax and settlement of funds
• Section 18: Transfer of ITC
• Section 19: Tax wrongfully collected and paid to CG/ SG

The IGST paid by tourist leaving India

on any supply of goods taken out of India by him
shall be refunded in prescribed manner
subject to prescribed conditions.
NOTE: Tourist = Person not normally resident of India, staying in India for not more than 6
months for legitimate non-immigrant purposes.

(1) It means
(a) export of goods/ services, or
(b) supply of goods/ services to a SEZ developer/ unit

(2) Subject to Section 17(5) of the CGSTA, 2017

ITC may be availed for making zero-rated supplies
ignoring the fact that such supply may be an exempt supply.

(3) A registered person making zero rated supply

shall be eligible to claim refund under either of the following options, as per the
provisions of Sec 54 of CGSTA –
(a) He may supply goods/ services under bond or LUT
without payment of IGST
and claim refund of unutilised ITC
subject to prescribed conditions, or
(b) He may supply goods/ services on payment of IGST
and claim refund of such tax paid
subject to prescribed conditions.

(1) The shipping bill filed by an exporter of goods shall be deemed to be an application
for refund of IGST and it shall be deemed to have been filed only when –

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o The PIC of conveyance duly files a departure manifest/ an export manifest/

export report covering the no. and date of shipping bills/ bills of export, and
o the applicant has furnished a valid return in FORM GSTR-3 (or 3B)

(2) The details of relevant export invoices for goods contained in FORM GSTR-1 shall be
e-transmitted to the system designated by Customs and the said system shall
confirm that the goods covered by the said invoices have been exported.
However, in case the due date for furnishing FORM GSTR-1 is extended by the
Government, the supplier shall furnish the information related to exports in Table 6A
of FORM GSTR-1 after filing FORM GSTR-3B and this information shall be transmitted
to the Customs system.
Such information furnished in Table 6A shall be auto-drafted in FORM GSTR-1 for the
said tax period.

(3) On receipt of the information regarding furnishing of FORM GSTR-3 (or 3B), the
system designated by Customs or the PO of Customs shall process the refund claim
for export of goods and the IGST amount paid shall be credited to the bank account
of the applicant intimated to the Customs authorities.

(4) The refund claim shall be withheld in case –

o a request has been received from the jurisdictional Commissioner to withhold
the payment as per section 54(10)/ (11)
o the PO of Customs determines that the goods were exported in violation of
CA, 1962.

(5) Where refund is withheld as per (a) above, the PO of IGST at Customs station shall
intimate the applicant and the jurisdictional Commissioner.

(6) On transmission of the intimation to the common portal, the PO of CGST/ SGST/
UTGST shall pass an order in FORM GST RFD-07 (Part B)

(7) In case the applicant later on becomes entitled to the amount so withheld, the
concerned jurisdictional officer shall refund the same by passing an order in FORM
GST RFD-06.

(8) The CG may pay the refund of IGST to the Govt. of Bhutan instead of the exporter for
certain class of notified goods.

(9) The application for refund of IGST paid on exported services shall be filed in FORM
GST RFD-01
and shall be dealt with as per Rule 89

(10) The persons claiming refund of IGST on exports

should not have
o received supplies on which the following benefits have been availed
▪ deemed exports under Notfn. No.: 48/2017 – CT except relating to
receipt of capital goods against EPCGA or
▪ reduced tax rate on supplies made to exporters
vide Notfn. No.: 40/2017 – CT(R) or 41/2017 – IT(R)
o availed the benefit of exemption of IGST and cess on imports vide Notfn. No.
78/2017 - Customs and 79/2017 – Customs except relating to receipt of
capital goods against EPCG scheme.

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(1) A registered person opting to supply for export without payment of IGST shall furnish
a bond/ LUT in FORM GST RFD-11 to the Commissioner before exporting. This form
shall bind him to pay the due tax and interest within –
(a) 15 days after 3 months (as extended) from the invoice date, if the goods are
not exported, or
(b) 15 days after 1 year (as extended) from the invoice date, if the payment of
such services is not received in convertible forex or in INR wherever
permitted by the RBI.

(2) The details of relevant export invoices contained in FORM GSTR-1 shall be e-
transmitted to the system designated by Customs and the said system shall confirm
that the goods covered by the said invoices have been exported.
However, in case the due date for furnishing FORM GSTR-1 is extended by the
Government, the supplier shall furnish the information related to exports in Table 6A
of FORM GSTR-1 after filing FORM GSTR-3B and this information shall be transmitted
to the Customs system.
Such information furnished in Table 6A shall be auto-drafted in FORM GSTR-1 for the
said tax period.

(3) In case the goods are not exported within the specified time and the registered
person fails to pay the amount as per (1), the export allowed under the Bond/ LUT
shall be withdrawn and the amount shall be recovered u/s 79.

(4) The export so withdrawn shall be restored immediately when the amount due is
paid.

(5) CBIC may notify the conditions and safeguards under which a LUT may be furnished
instead of a bond.

(6) The provisions of (1) shall mutatis mutandis apply to zero-rated supplies made to a
SEZ developer/ unit without payment of IGST.

Notfn. No.: 37/2017 – CT

Conditions and safeguards for exporters for furnishing LUT instead of Bond –
(i) all registered persons who intend to supply for export without payment of IGST shall
be eligible to furnish a LUT in place of a bond
except those who have been prosecuted under the CGSTA/ IGSTA or any of the
existing laws in force in a case where the amount of tax evaded exceeds ₹ 250
lakhs.
(ii) the LUT shall be furnished in duplicate on the letter head of the registered person,
for a FY in the annexure to FORM GST RFD – 11 and it shall be executed by the
working partner/ the MD/ the CS/ the proprietor/ a person duly authorised by such
working partner/ BoD of such company/ proprietor.
(iii) where the regd. person fails to pay the tax and interest due within the period
specified in Rule 96A(1), the facility to export without payment of IGST shall be
deemed to have been withdrawn. It shall later be restored on making such
payment.

Circular No. 8/ 8/2017-GST

Clarification on issues related to furnishing of Bond/ Letter of Undertaking for Exports

a) Eligibility to export under LUT: The facility of export under LUT has been now
extended to all registered persons who intend to supply goods or services for export
without payment of IGST except those who have been prosecuted for any offence
under the CGSTA/ IGSTA, 2017 or any of the existing laws and the amount of tax
evaded in such cases exceeds ₹ 250 lakhs.

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b) Validity of LUT: The LUT shall be valid for the whole FY in which it is tendered.
However, in case the goods are not exported within the time specified in rule 96A(1)
of the CGSTR and the registered person fails to pay the amount mentioned in the said
sub-rule, the facility of export under LUT will be deemed to have been withdrawn. If
the amount mentioned in the said sub-rule is paid subsequently, the facility of export
under LUT shall be restored. As a result, exports, during the period from when the
facility to export under LUT is withdrawn till the time the same is restored, shall be
either on payment of the applicable integrated tax or under bond with bank
guarantee.
c) Form for LUT: The registered person (exporters) shall fill and submit FORM GST RFD-
11 on the common portal. An LUT shall be deemed to be accepted as soon as an
acknowledgement for the same, bearing the Application Reference Number (ARN), is
generated online.
d) Documents for LUT: No document needs to be physically submitted to the
jurisdictional office for acceptance of LUT.
e) Acceptance of LUT/ Bond: An LUT shall be deemed to have been accepted as soon
as an acknowledgement for the same, bearing the Application Reference Number
(ARN), is generated online. If it is discovered that an exporter whose LUT has been so
accepted, was ineligible to furnish an LUT in place of bond as per Notification No.
37/2017-Central Tax, then the exporter’s LUT will be liable for rejection. In case of
rejection, the LUT shall be deemed to have been rejected ab initio.
f) Bank guarantee: Since the facility of export under LUT has been extended to all
registered persons, bond will be required to be furnished by those persons who have
been prosecuted for cases involving an amount exceeding ₹ 250 lakhs. A bond, in all
cases, shall be accompanied by a bank guarantee of 15% of the bond amount.
g) Clarification regarding running bond: The exporters shall furnish a running bond
where the bond amount would cover the amount of self-assessed estimated tax
liability on the export. The exporter shall ensure that the outstanding IGST liability on
exports is within the bond amount. In case the bond amount is insufficient to cover
the said liability in yet to be completed exports, the exporter shall furnish a fresh
bond to cover such liability. The onus of maintaining the debit / credit entries of IGST
in the running bond will lie with the exporter. The record of such entries shall be
furnished to the CGST officer as and when required.
h) Sealing by officers: Till mandatory self-sealing is operationalized, sealing of
containers, wherever required to be carried out under the supervision of the officer,
shall be done under the supervision of the CE officer having jurisdiction over the
place of business where the sealing is required to be done. A copy of the sealing
report would be forwarded to the AC/ DC having jurisdiction over the principal place
of business.
i) Purchases from manufacturer and Form CT-1: It is clarified that there is no provision
for issuance of CT-1 form which enables merchant exporters to purchase goods from
a manufacturer without payment of tax under the GST regime. The transaction
between a manufacturer and a merchant exporter is in the nature of supply and the
same would be subject to GST.
j) Transactions with EOUs: Zero rating is not applicable to supplies to EOUs and there
is no special dispensation for them under GST regime. Therefore, supplies to EOUs
are taxable like any other taxable supplies. EOUs, to the extent of exports, are eligible
for zero rating like any other exporter.
k) Realization of export proceeds in Indian Rupee: The acceptance of LUT for supplies
of goods/ services to countries outside India or SEZ developer/ unit will be
permissible irrespective of whether the payments are made in INR or convertible
forex as long as they are in accordance with the applicable RBI guidelines.
l) Jurisdictional officer: The LUT/ Bond shall be accepted by the jurisdictional AC/ DC
having jurisdiction over the principal place of business of the exporter. The exporter
is at liberty to furnish the LUT/ bond before either the CGST Authority or the SGST
Authority till the administrative mechanism for assigning of taxpayers to the
respective authority is implemented.

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Circular No. 78/ 52/2018-GST

Clarification on export of services under GST

Representations have been received seeking clarification on certain issues relating to

export of services under the GST laws. The same have been examined and the
clarifications on the same are as below:

Sl. No. Issue Clarification

1. In case an exporter of services 1. Where an exporter of services
outsources a portion of the services located in India is supplying
contract to another person located certain services to a recipient
outside India, what would be the located outside India, either
tax treatment of the said portion of wholly or partly through any
the contract at the hands of the other supplier of services
exporter? There may be instances located outside India, the
where the full consideration for the following two supplies are taking
outsourced services is not received place:-
by the exporter in India. (i) Supply of services from
the exporter of services
located in India to the
recipient of services
located outside India for
the full contract value;
(ii) Import of services by the
exporter of services
located in India from the
supplier of services
located outside India with
respect to the outsourced
portion of the contract.
Thus, the total value of services
as agreed to in the contract
between the exporter of
services located in India and the
recipient of services located
outside India will be considered
as export of services if all the
conditions laid down in section
2(6) of the Integrated Goods and
Services Tax Act, 2017 (IGST Act
for short) read with section 13(2)
of the IGST Act are satisfied.
2. It is clarified that the supplier of
services located in India would
be liable to pay integrated tax on
reverse charge basis on the
import of services on that
portion of services which has
been provided by the supplier
located outside India to the
recipient of services located
outside India. Furthermore, the
said supplier of services located
in India would be eligible for

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taking input tax credit of the

integrated tax so paid.
3. Thus, even if the full
consideration for the services as
per the contract value is not
received in convertible foreign
exchange in India due to the fact
that the recipient of services
located outside India has directly
paid to the supplier of services
located outside India (for the
outsourced part of the services),
that portion of the consideration
shall also be treated as receipt of
consideration for export of
services in terms of section
2(6)(iv) of the IGST Act, provided
the:
(i) integrated tax has been
paid by the supplier
located in India for import
of services on that portion
of the services which has
been directly provided by
the supplier located
outside India to the
recipient of services
located outside India; and
(ii) RBI by general instruction
or by specific approval has
allowed that a part of the
consideration for such
exports can be retained
outside India.
Illustration: ABC Ltd. India has
received an order for supply of
services amounting to $
5,00,000/- to a US based client.
ABC Ltd. India is unable to
supply the entire services from
India and asks XYZ Ltd. Mexico
(who is not merely an
establishment of a distinct
person viz. ABC Ltd. India, in
accordance with the Explanation
1 in Section 8 of the IGST Act) to
supply a part of the services (say
40% of the total contract value).
ABC Ltd. India shall be the
exporter of services for the
entire value if the invoice for the
entire amount is raised by ABC
Ltd. India. The services provided
by XYZ Ltd. Mexico to the US
based client shall be import of
services by ABC Ltd. India and it
would be liable to pay integrated

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tax on the same under reverse

charge and also be eligible to
take input tax credit of the
integrated tax so paid. Further, if
the provisions contained in
section 2(6) of the IGST Act are
not fulfilled with respect to the
realization of convertible foreign
exchange, say only 60% of the
consideration is received in India
and the remaining amount is
directly paid by the US based
client to XYZ Ltd. Mexico, even
in such a scenario, 100% of the
total contract value shall be
taken as consideration for the
export of services by ABC Ltd.
India provided integrated tax on
import of services has been paid
on the part of the services
provided by XYZ Ltd Mexico
directly to the US based client
and RBI (by general instruction
or by specific approval) has
allowed that a part of the
consideration for such exports
can be retained outside India. In
other words, in such cases, the
export benefit will be available
for the total realization of
convertible foreign exchange by
ABC Ltd. India and XYZ Ltd.
Mexico.

Circular No. 108/27/2019-GST

Clarification in respect of goods sent/ taken out of India for exhibition or on consignment
basis for export promotion

1. Various representations have been received from the trade and industry regarding
procedure to be followed in respect of goods sent / taken out of India for exhibition
or on consignment basis for export promotion. Such goods sent / taken out of India
crystallise into exports, wholly or partly, only after a gap of certain period from the
date they were physically sent / taken out of India.

2. The matter has been examined and in view of the difficulties being faced by the trade
and industry and to ensure uniformity in the implementation of the provisions of the
law across the field formations, the Board, in exercise of its powers conferred under
section 168(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to
as the “CGST Act”) hereby clarifies various issues in succeeding paragraphs.

3. As per section 7 of the CGST Act, for any activity or transaction to be considered a
supply, it must satisfy twin tests namely-
(i) it should be for a consideration by a person; and
(ii) it should be in the course or furtherance of business.

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4. The exceptions to the above are the activities enumerated in Schedule I of the CGST
Act which are treated as supply even if made without consideration. Further, sub-
section (21) of section 2 of the Integrated Goods and Services Tax Act, 2017
(hereinafter referred to as the “IGST Act”) defines “supply”, wherein it is clearly stated
that it shall have the same meaning as assigned to it in section 7 of the CGST Act.

5. Section 16 of the IGST Act deals with “Zero rated supply”. The provisions contained in
the said section read as under:
16. (1) “zero rated supply” means any of the following supplies of goods or services
or both, namely:–
(a) export of goods or services or both; or
(b) supply of goods or services or both to a Special Economic Zone developer or a
Special Economic Zone unit.
Therefore, it can be concluded that only such ‘supplies’ which are either „export‟ or
are ‘supply to SEZ unit / developer’ would qualify as zero-rated supply.

6. It is, accordingly, clarified that the activity of sending / taking the goods out of India
for exhibition or on consignment basis for export promotion, except when such
activity satisfy the tests laid down in Schedule I of the CGST Act (hereinafter referred
to as the ‘specified goods’), do not constitute supply as the said activity does not fall
within the scope of section 7 of the CGST Act as there is no consideration at that
point in time. Since such activity is not a supply, the same cannot be considered as
‘Zero rated supply’ as per the provisions contained in section 16 of the IGST Act.

7. Since the activity of sending / taking specified goods out of India is not a supply,
doubts have been raised by the trade and industry on issues relating to maintenance
of records, issuance of delivery challan / tax invoice etc. These issues have been
examined and the clarification on each of these points is as under: -

Sl. No. Issue Clarification

1. Whether any records are required to The registered person dealing in
be maintained by registered specified goods shall maintain a record
person for sending/ taking specified of such goods as per the format at
goods out of India? Annexure to this Circular
2. What is the documentation required a) As clarified above, the activity
for sending/ taking the specified goods of sending/ taking specified
out of India? goods out of India is not a
supply.
b) The said activity is in the nature
of “sale on approval basis”
wherein the goods are sent/
taken outside India for the
approval of the person located
abroad and it is only when the
said goods are approved that
the actual supply from the
exporter located in India to the
importer located abroad takes
place. The activity of sending/
taking specified goods is
covered under the provisions
of sub-section (7) of section 31
of the CGST Act read with rule
55 of Central Goods & Services
Tax Rules, 2017 (hereinafter

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referred to as the “CGST

Rules”).
c) The specified goods shall be
accompanied with a delivery
challan issued in accordance
with the provisions contained
in rule 55 of the CGST Rules.
d) As clarified in paragraph 6
above, the activity of sending/
taking specified goods out of
India is not a zero-rated supply.
That being the case, execution
of a bond or LUT, as required
under section 16 of the IGST
Act, is not required.
3. When is the supply of specified goods a) The specified goods sent /
sent/ taken out of India said to take taken out of India are required
place? to be either sold or brought
back within the stipulated
period of six months from the
date of removal as per the
provisions contained in sub-
section (7) of section 31 of the
CGST Act.
b) The supply would be deemed
to have taken place, on the
expiry of six months from the
date of removal, if the specified
goods are neither sold abroad
nor brought back within the
said period.
c) If the specified goods are sold
abroad, fully or partially, within
the specified period of six
months, the supply is effected,
in respect of quantity so sold,
on the date of such sale.
4. Whether invoice is required to be a) When the specified goods sent
issued when the specified goods sent / / taken out of India have been
taken out of India are not brought back, sold fully or partially, within the
either fully or partially, within the stipulated period of six months,
stipulated period? as laid down in sub-section (7)
of section 31 of the CGST Act,
the sender shall issue a tax
invoice in respect of such
quantity of specified goods
which has been sold abroad, in
accordance with the provisions
contained in section 12 and
section 31 of the CGST Act read
with rule 46 of the CGST Rules.
b) When the specified goods
sent/ taken out of India have
neither been sold nor brought
back, either fully or partially,
within the stipulated period of
six months, as laid down in

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sub-section (7) of section 31 of

the CGST Act, the sender shall
issue a tax invoice on the date
of expiry of six months from
the date of removal, in respect
of such quantity of specified
goods which have neither been
sold nor brought back, in
accordance with the provisions
contained in section 12 and
section 31 of the CGST Act read
with rule 46 of the CGST Rules.
5. Whether the refund claims can be a) As clarified in para 5 above, the
preferred in respect of specified goods activity of sending / taking
sent / taken out of India but not specified goods out of India is
brought back? not a zero-rated supply. That
being the case, the sender of
goods cannot prefer any refund
claim when the specified goods
are sent / taken out of India.
b) It has further been clarified in
answer to question no. 3 above
that the supply would be
deemed to have taken place:
(i) on the date of expiry of
six months from the
date of removal, if the
specified goods are
neither sold nor brought
back within the said
period; or
(ii) on the date of sale, in
respect of such quantity
of specified goods
which have been sold
abroad within the
specified period of six
months.
c) It is clarified accordingly that
the sender can prefer refund
claim even when the specified
goods were sent / taken out of
India without execution of a
bond or LUT, if he is otherwise
eligible for refund as per the
provisions contained in sub-
section (3) of section 54 the
CGST Act read with sub-rule
(4) of rule 89 of the CGST Rules,
in respect of zero rated supply
of goods after he has issued the
tax invoice on the dates as has
been clarified in answer to the
question no. 4 above. It is
further clarified that refund
claim cannot be preferred
under rule 96 of CGST Rules as

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supply is taking place at a time

after the goods have already
been sent / taken out of India
earlier.

8. The above position is explained by way of illustrations below:

Illustrations:

i) M/s ABC sends 100 units of specified goods out of India. The activity of merely
sending/ taking such specified goods out of India is not a supply. No tax invoice
is required to be issued in this case but the specified goods shall be
accompanied with a delivery challan issued in accordance with the provisions
contained in rule 55 of the CGST Rules. In case the entire quantity of specified
goods is brought back within the stipulated period of six months from the date
of removal, no tax invoice is required to be issued as no supply has taken place
in such a case. In case, however, the entire quantity of specified goods is neither
sold nor brought back within six months from the date of removal, a tax invoice
would be required to be issued for entire 100 units of specified goods in
accordance with the provisions contained in section 12 and section 31 of the
CGST Act read with rule 46 of the CGST Rules within the time period stipulated
under sub-section (7) of section 31 of the CGST Act.
ii) M/s ABC sends 100 units of specified goods out of India. The activity of sending /
taking such specified goods out of India is not a supply. No tax invoice is
required to be issued in this case but the specified goods shall be accompanied
with a delivery challan issued in accordance with the provisions contained in
rule 55 of the CGST Rules. If 10 units of specified goods are sold abroad say after
one month of sending / taking out and another 50 units are sold say after two
months of sending / taking out, a tax invoice would be required to be issued for
10 units and 50 units, as the case may be, at the time of each of such sale in
accordance with the provisions contained in section 12 and section 31 of the
CGST Act read with rule 46 of the CGST Rules. If the remaining 40 units are not
brought back within the stipulated period of six months from the date of
removal, a tax invoice would be required to be issued for 40 units in accordance
with the provisions contained in section 12 and section 31 of the CGST Act read
with rule 46 of the CGST Rules. Further, M/s ABC may claim refund of
accumulated input tax credit in accordance with the provisions contained in
subsection (3) of section 54 of the CGST Act read with sub-rule (4) of rule 89 of
the CGST Rules in respect of zero-rated supply of 60 units.

Circular No. 111/30/2019-GST

Procedure to claim refund in FORM GST RFD – 01 subsequent to favourable order in appeal
or any other form

Doubts have been raised on the procedure to be followed by a registered person to

claim refund subsequent to a favourable order in appeal or any other forum against
rejection of a refund claim in FORM GST RFD-06. The matter has been examined and
in order to clarify this issue and to ensure uniformity in the implementation of the
provisions of the law across field formations, the Board, in exercise of its powers
conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017
(hereinafter referred to as “CGST Act”), hereby clarifies the issues raised as below:
2. Appeals against rejection of refund claims are being disposed offline as the electronic
module for the same is yet to be made operational. As per rule 93 of the Central
Goods and Services Tax Rules, 2017 (hereinafter referred to as “CGST Rules”), where
an appeal is filed against the rejection of a refund claim, re-crediting of the amount
debited from the electronic credit ledger, if any, is not done till the appeal is finally

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rejected. Therefore, such rejected amount remains debited in respect of the

particular refund claim filed in FORM GST RFD-01.
3. In case a favourable order is received by a registered person in appeal or in any other
forum in respect of a refund claim rejected through issuance of an order in FORM
GST RFD-06, the registered person would file a fresh refund application under the
category “Refund on account of assessment/provisional assessment/appeal/any
other order” claiming refund of the amount allowed in appeal or any other forum.
Since the amount debited, if any, at the time of filing of the refund application was
not re-credited, the registered person shall not be required to debit the said amount
again from his electronic credit ledger at the time of filing of the fresh refund
application under the category “Refund on account of assessment/provisional
assessment/appeal/any other order”. The registered person shall be required to give
details of the type of the Order (appeal/any other order), Order No., Order date and
the Order Issuing Authority. The registered person would also be required to upload
a copy of the order of the Appellate or other authority, copy of the refund rejection
order in FORM GST RFD 06 issued by the proper officer or such other order against
which appeal has been preferred and other related documents.
4. Upon receipt of the application for refund under the category “Refund on account of
assessment/provisional assessment/appeal/any other order” the proper officer
would sanction the amount of refund as allowed in appeal or in subsequent forum
which was originally rejected and shall make an order in FORM GST RFD 06 and
issue payment order in FORM GST RFD 05 accordingly. The proper officer disposing
the application for refund under the category “Refund on account of assessment/
provisional assessment/appeal/any other order” shall also ensure re-credit of any
amount which remains rejected in the order of the appellate (or any other authority).
However, such re-credit shall be made following the guideline as laid down in para
4.2 of Circular no. 59/33/2018 – GST dated 04/09/2018.
5. The above clarifications can be illustrated with the help of an example. Consider a
registered person who makes an application for refund of unutilized ITC on account
of export to the extent of Rs.100/- and debits the said amount from his electronic
credit ledger. The proper officer disposes the application by allowing refund of
Rs.70/- and rejecting the refund of Rs. 30/-. However, he does not recredit Rs.30/-
since appeal is preferred by the claimant and accordingly FORM GST RFD 01B is not
uploaded. Assume that the appellate authority allows refund of only Rs.10/- out of
the Rs. 30/- for which the registered person went in appeal. This Rs.10/- shall be
claimed afresh under the category “Refund on account of assessment/provisional
assessment/appeal/any other order” and processed accordingly. However,
subsequent to processing of this claim of Rs.10/- the proper officer shall re-credit
Rs.20/- to the electronic credit ledger of the claimant, provided that the registered
person is not challenging the order in a higher forum. For this purpose, FORM GST
RFD 01B under the original ARN which has so far not been uploaded will be uploaded
with refund sanctioned amount as Rs.80/- and the amount to be re-credited as Rs.
20/-. In case, the proper officer who rejected the refund claim is not the one who is
disposing the application under the category “Refund on account of assessment/
provisional assessment/appeal/any other order”, the latter shall communicate to the
proper officer who rejected the refund claim to close the ARN as above only after
obtaining the undertaking as referred in para 4.2 of Circular no. 59/33/2018 – GST
dated 04/09/2018.

(1) Out of the IGST paid to the CG

in respect of the following inter-state supplies or imports,
the amount of tax equivalent to CGST on similar intra-state supply shall be apportioned
to the CG –

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(a) To/ by an unregistered person or a person registered under composition levy

provisions.
(b) where the registered person is not eligible for ITC
(c) To/ by a registered person in a FY, where he does not avail of the ITC within the
specified period and thus remains in the IGST account after expiry of the due
date for furnishing of annual return

(2) The balance amount of IGST

in respect of the aforementioned supplies
shall be apportioned to-
(a) State where such supply takes place, and
(b) CG where such supply takes place in a UT
However, where the place of such supply cannot be determined separately, it shall be
apportioned to –
(a) Each of the state
(b) CG in relation to the UTs
in proportion to the total supplies made by such taxable person
to each of such States or UTs, in a FY.
In case the taxable person making such supplies is not identifiable,
the said balance shall be apportioned to all States and CG
in proportion to the SGST or UTGST collected by the SG/ CG
during the immediately preceding FY.

(2A) The amount not apportioned u/ss (1) and (2) may be apportioned as
50% to the CG and 50% to the SG/ UT provisionally on ad hoc basis
and shall be adjusted against the amount apportioned under the said sub-sections.

(3) Similar provisions as mentioned in (1) and (2)

shall apply to the apportionment of interest, penalty etc.
mutatis mutandis, in connection with the tax so apportioned,

(4) Where an amount has been apportioned to the CG/ SG

under sub-sections (1), (2) or (3)
the amount collected as IGST shall be reduced
and the CG shall transfer the amount to the respective accounts
in the prescribed manner and within prescribed time.

(5) Any IGST apportioned to a SG or the CG on account of UT

if subsequently found to be refundable and refunded
shall be reduced from the amount to be apportioned to such SG or CG in the prescribed
manner and within the prescribed time.

On utilization of IGST availed under this Act for payment of –

(a) CGST – the amount collected as IGST shall be reduced and CG shall transfer from the
IGST account to the CGST account in prescribed manner and within the prescribed
time.
(b) UTGST - the amount collected as IGST shall be reduced and CG shall transfer from the
IGST account to the UTGST account in prescribed manner and within the prescribed
time.

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(c) SGST - the amount collected as IGST shall be reduced and apportioned to “appropriate
SG”, and the CG shall transfer the apportioned amount to the account of “appropriate
SG” in prescribed manner and within the prescribed time.
NOTE: “appropriate state” means the State/ UT where a taxable person is registered/ liable to
be registered.

(1) A registered person who has paid IGST on an inter-state supply

which is subsequently held to be an intra-state supply
shall be granted refund of the IGST so paid
in prescribed manner and subject to prescribed conditions.

(2) A registered person who has paid CGST and SGST/ UTGST on an intra-state supply
which is subsequently held to be an inter-state supply
shall not be required to pay any interest on the IGST payable.

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CGSTA, 2017
• Section 54: Refund of Tax
• Section 55: Refund in Certain Cases
• Section 56: Interest on Delayed Refunds
• Section 57: Consumer Welfare Fund
• Section 58: Utilization of Fund

(1) Any person may make an application

for claiming refund of any tax and interest or any other amount
within 2 years from the relevant date
in the prescribed form and prescribed manner.
• However, refund of any balance in the e-CaL
may be claimed in the periodic return
in the prescribed manner.
• Relevant date means –
o In case of goods exported –
▪ By sea/ air – the date on which the ship/ aircraft leaves India
▪ By land – the date on which the goods pass the frontier
▪ By post – the date of despatch of goods by the Post Office
o In case of deemed exports, for tax paid on supply of goods,
the date on which the return relating to such supply is furnished.

Notfn. No.: 48/2017 – CT

The following supplies shall be considered as deemed exports –
Sl. Description of Supply
No.

1 Supply of goods by a registered person against Advance Authorisation issued by

DGFT,
if, in case exports have already been made after availing ITC on inputs used in
manufacture of such exports,
the goods so supplied shall be used in manufacture and supply of taxable goods
(other than nil-rated/ fully exempted goods)
and a relevant certificate from a CA is submitted to the jurisdictional
commissioner of GST or any other authorised officer
within 6 months of such supply.
However, no such certificate shall be required if ITC has not been availed on
inputs used in manufacture of export goods.
2 Supply of capital goods by a registered person against EPCGA
3 Supply of goods by a registered person to Export Oriented Unit
4 Supply of gold by a bank or PSU specified in the Notfn. No. 50/2017-Customs
against Advance Authorisation

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o In case of services exported –

▪ Where supply is completed before payment – the date of receipt of
payment in convertible forex or in INR wherever permitted by the RBI
▪ Where payment is received in advance before invoice date – The date
of issue of invoice
o In case tax is refundable as a result of any judgement/ decree/ order
of Appellate Authority, Appellate Tribunal, or any court –
The date of communication of such judgement etc.
o In case of refund of unutilized ITC u/ss (3) for inverted duty structure – the due
date of furnishing periodic return u/s 39 for the period in which such claim for
refund arises.
o In case tax is paid on provisional basis – The date of adjustment of tax after the
final assessment.
o In the case of a person, other than supplier – The date of receipt of supply
o In any other case – The date of payment of tax

Discuss three supplies which have been notified as deemed exports under section 147 of
CGST Act, 2017.
[CA-Final, Nov 2018]

(2) To be read with Section 55

(3) A registered person may claim refund of

any unutilized ITC
at the end of any tax period
in the following cases only –
o Zero-rated supplies made without payment of tax
o Accumulated credit on account of
Input tax rate > Output tax rate (except Nil rated/ fully exempt supplies)
other than supplies notified by the Government.

Notfn. No.: 05/2017 – CT(R) and IT(R), 15/2017 – CT(R) and 12/2017 – IT(R)
No refund of unutilized ITC accumulated due to higher rate of tax on inputs than that on
output supply shall be allowed in respect of -
• Rail locomotives, coaches, wagons etc.
• Supply of construction services as per 5(b) of Sch. II

• However, no refund of ITC shall be allowed

in case of exported goods subjected to export duty
• Also, no refund of ITC shall be allowed
if the supplier avails of drawback in respect of CGST or
claims refund of IGST paid on such supplies

(4) The application of refund shall be accompanied by –

(a) Prescribed documentary evidence to establish that a refund is due
(b) Documentary or other evidence to establish that
the tax, interest or any other amount
for which refund is claimed
is collected from/ paid by him
and the incidence has not been passed on to any other person.
However, in case the refund claim < ₹ 2,00,000

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such evidence is not necessary

but a declaration need to be filed which shall certify that
the incidence has not been passed on to any other person.

(5) If the PO is satisfied with the application

he may order the refund of whole or part of the amount
and such amount shall be credited to the CWF.

(6) Overruling sub-section (5),

in case of refund claimed on account of zero-rated supplies
by registered persons other than the ones notified by the Govt.
90% of the claimed amount (-) ITC provisionally accepted
shall be provisionally refunded in the prescribed manner
subject to prescribed conditions and safeguards
and then make the order u/ ss (5) after duly verifying
the documents furnished by the applicant.

(7) Such order shall be issued within 60 days

from the date of receipt of complete application.

(14) Overruling this section,

no refund shall be paid u/ ss (5) or (6)
if the amount is less than ₹ 1,000.

(8) Overruling sub-section (5)

the refundable amount shall be paid to the applicant
instead of being credited to the CWF –
(a) Refund of tax paid on export or
on inputs/ input services used in making such exports
(b) Refund of unutilized ITC under sub-section (3)
(c) Refund of tax paid on a supply which has
either wholly or partially not been provided
and for which either the tax invoice has not been issued
or a refund voucher is issued.
(d) Refund of tax u/s 77
(e) The tax, interest or any other amount paid by the applicant
if the incidence has not been passed on to any other person.
(f) The tax or interest borne by a notified class of applicants.

(8A) The CG may disburse the refund of SGST in the prescribed manner.

(9) Overruling anything to the contrary

contained in any judgement/ decree/ order/ direction
of the AT or any court
or any other provision in the Act/ Rules or any other law
refund shall be made according to sub-section (8) ONLY.

(10) In case any refund of unutilized ITC is due u/ ss (3)

to a registered person who
o has defaulted in furnishing any return, or
o is required to pay tax/ interest/ penalty,
which has not been stayed by any court, tribunal or appellate authority
by the specified date, i.e., last date for filing appeal under this Act.

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the PO may
(a) Withhold the payment of refund until the discrepancy is resolved
(b) Deduct the payable amount under this Act or previous laws from the refund
due

(11) In case the order of refund is under appeal, or

when any other proceeding under the Act is pending
and the Commissioner opines that
grant of such relief shall adversely affect the revenue
in the said appeal/ proceeding
on account of fraud or malfeasance,
he may withhold the refund till a specific time
after giving the applicant an opportunity of being heard.

(12) Overruling Section 56

in case a refund is withheld u/ ss (11), the taxable person
shall be entitled to interest @ 6% [Notfn. No.: 13/2017 – CT and 06/2017 - IT]
if as a result of the appeal/ proceedings
he becomes entitled to refund.

(13) Overruling anything to the contrary contained in this Section,

the amount of advance tax deposited by CTP/ NRTP
shall not be refunded unless such person
has furnished all the returns required u/s 39
in respect of the entire period for which RC has been granted.

State five cases where refundable amount shall be paid to the applicant, instead of being
credited to Consumer Welfare Fund under CGST Act, 2017.
[CA-Final, May 2018]

(1) Any person claiming refund of any tax, interest etc. paid by him, other than refund of
IGST paid on exports, may file an application in FORM GST RFD-01.
However, any claim for refund of balance in e-CaL may be made through the return
furnished for the relevant tax period in FORM GSTR-3/ 4/ 7
Furthermore, the application for refund for supplies to a SEZ unit/ developer shall be
filed by the –
(a) supplier of goods after such goods have been admitted in full in the SEZ for
authorized operations, as endorsed by the specified officer of the Zone,
(b) supplier of services along with such evidence regarding receipt of services for
authorised operations as endorsed by the specified officer of the Zone
Also, the application for refund for supplies regarded as deemed exports may be
filed by –
(a) the recipient of deemed export supplies, or
(b) the supplier of deemed export supplies, where
▪ the recipient does not avail of ITC on such supplies and
▪ the recipient furnishes an undertaking that the supplier may claim the
refund.
Also, the refund of any amount out of the advance tax deposited by a CTP/ NRTP
after adjusting the tax payable shall be claimed by him in the last return.

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(2) FORM GST RFD-01 shall be accompanied by any of the following evidences in
Annexure I to establish that a refund is due to the applicant-
(a) the ref. no. and a copy of the order passed by the PO/ AA/ AT/ court resulting
in such refund or ref. no. of the payment of the amount u/s 107(6) and 112(8)
claimed as refund
(b) in case of refund on export of goods - a statement containing the no. and
date of shipping bills/ bills of export and the no. and the date of relevant
export invoices
(c) in case of refund on export of services - a statement containing the no. and
date of invoices and the relevant BRC/ FIRC
(d) in case of refund on supply of goods to SEZ unit/ developer - a statement
containing the no. and date of invoices along with the evidence regarding the
endorsement specified earlier
(e) in case of refund on supply of services to SEZ unit/ developer - a statement
containing the no. and date of invoices, the evidence regarding the
endorsement specified earlier and the details and proof of payment made by
the recipient for authorised operations
(f) in case of refund for supply of goods/ services made to a SEZ unit/ developer
– a declaration that tax has not been collected from the SEZ unit/ developer.
(g) in case of refund on deemed exports - a statement containing the no. and
date of invoices along with other notified evidences.

Notfn. No.: 49/2017 – CT

CG has notified the following as evidences which are required to be produced by the
supplier of deemed export supplies for claiming refund –
1. Acknowledgement by the tax officer of the AA/ EPCGA holder that the said
supplies have been received by the said authorization holder, or
A copy of the tax invoice of such supplies duly signed by the recipient EOU
2. An undertaking by the recipient that no ITC has been availed by him on such
supplies
3. An undertaking by the recipient that he shall not claim any refund on such
supplies and that the supplier may claim the refund

(h) in case of claim of refund of unutilized ITC u/s 54(3) - a statement containing
the no. and date of invoices received and issued during the tax period
(i) in case of refund on finalization of provisional assessment - the ref. no. and a
copy of the final AO
(j) in case of refund for inter-state supply that was earlier considered as intra-
state supply - a statement showing the details of transactions
(k) in case of refund for excess payment of tax - a statement showing the details
of the amount
(l) in case the refund claimed does not exceed ₹ 2 lakhs - a declaration that the
incidence of tax, interest etc. claimed as refund has not been passed on to
any other person.
However, such a declaration is not required u/s 54(8) (a)/ (b)/ (c)/ (d)/ (f)
(m) in case the refund claimed exceeds ₹ 2 lakhs - a certificate in Annexure 2 of
FORM GST RFD-01 issued by a CA/ CMA that the incidence of tax, interest
etc. has not been passed on to any other person.
However, such a declaration is not required u/s 54(8) (a)/ (b)/ (c)/ (d)/ (f)

(3) In case the application relates to refund of ITC, the e-CrL shall be debited by the
applicant.

(4) In case of zero-rated supplies without payment of tax under bond/ LUT, refund of
ITC shall be granted as follows –

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Refund = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of

services) × Net ITC ÷ Adjusted Total Turnover
A. Refund = Max refund admissible
B. Net ITC = ITC availed on inputs and input services during the relevant period
except the ones for which refund is claimed under (4A) and/ or (4B)
C. Turnover of zero-rated supply of goods = The value of zero-rated supply of
goods made during the relevant period without payment of tax under bond/
LUT, except those in respect of which refund is claimed under (4A) and/ or
(4B)
D. Turnover of zero-rated supply of services = The value of zero-rated supply of
goods made during the relevant period without payment of tax under bond/
LUT, calculated as under:
Payments received for relevant period + advances received earlier for
services completed in relevant period (-) advances received for services not
completed during the relevant period
E. Adjusted Total Turnover = Turnover of goods in a state/ UT + Turnover of
zero-rated supply of services determined as per D
above and non-zero-rated supply of services,
excluding:
(i) the value of exempt supplies except zero-
rated supplies, and
(ii) the turnover of any supplies for which refund
is claimed under (4A) and/ or (4B)
during the relevant period.
F. Relevant period = Period for which claim has been filed.

(4A) In case of supplies received

on which the supplier has availed the benefit of deemed exports,
the refund of ITC shall be granted in respect of
other inputs/ input services used in making zero-rated supplies.

(4B) In case the claimant of refund of unutilized ITC for zero-rated supplies without
payment of tax has –
(a) received supplies on which the supplier has availed the benefit of Notfn.
No. 40/2017 – CT(R) or 41/2017 – IT(R) or
(b) availed the benefit of Notfn. No. 78/2017 – Customs or 79/2017 – Customs,
the refund of ITC availed for
o inputs received under the said notifications for export of goods and
o other inputs/ input services to the extent used in making such export of
goods
shall be granted..

(5) In case of refund for inverted duty structure, refund of ITC shall be granted as follows
–
Max Refund Amount = {(Turnover of inverted rated supplies) × Net ITC ÷
Adjusted Total Turnover} – Tax payable on such inverted rated
supplies
Where,
(a) Net ITC = ITC availed on inputs during the relevant period except the
ones for which refund is claimed under (4A) and/ or (4B)
(b) Adjusted Total Turnover = Same as (4) above
Relevant Period = Same as (4) above

Write short note on “Advance payment of GST and refund claim by casual taxable person”.
[CMA-Inter, Jun 2018]

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Wye Ltd. provides the following details of September 2018 for computation of refund claim
under rule 89(4) of the CGST Rules, 2017. Compute the eligible claim under the said rule
assuming that other conditions are fulfilled.
Particulars Amount (₹)
Opening balance of ITC 5,00,000
ITC availed during the period, which includes the claim for refund made 25,00,000
of ₹ 5,00,000 eligible under rule 89(4A)/ 89(4B) of the CGST Rules, 2017
Zero-rated supply of goods made during the period without payment of 6,00,00,000
tax under bond/ LUT, which include the supply of ₹ 1,00,00,000 for
which refund claim is made under rule 89(4A)/ 89(4B) of the CGST Rules,
2017
Supply of goods other than zero-rated supply 3,00,00,000
[CA-Final, May 2019]

₹ (5,00,00,000 × 20,00,000 ÷ 8,00,000) = ₹ 12,50,000

(1) In case of application for claim of refund of balance in e-CaL, an acknowledgement in

FORM GST RFD-02 shall be issued to the applicant, indicating the date of filing the
claim and the time period specified in 54(7) shall be counted from such date of filing.

(2) Other refund applications shall be forwarded to the PO who shall scrutinize the
application within 15 days of its filing, and where it is found complete u/r 89(2),(3)
and (4), an acknowledgement in FORM GST RFD-02 shall be issued to the applicant,
indicating the date of filing the claim and the time period specified in 54(7) shall be
counted from such date of filing.

(3) Any deficiency shall be communicated to the applicant in FORM GST RFD-03,
requiring him to file a fresh refund application after rectification of such deficiencies.

(4) FORM GST RFD-03 communicated under SGSTR, 2017 shall be deemed to have been
communicated under CGSTR, 2017 as well.

(1) The provisional refund u/s 54(6) shall be granted subject to the condition that the
claimant has not been prosecuted for any offence under the current or past indirect
tax laws with amount of tax evasion exceeding ₹ 250 lakhs during 5 yrs. immediately
preceding the tax period to which the claim for refund relates.

(2) On satisfaction after scrutiny, the PO shall make a sanction order in FORM GST RFD-
04 within 7 days from the date of acknowledgement u/r 90(1)/ (2)
However, FORM GST RFD – 04 shall not be required to be revalidated by the PO.

(3) The PO shall issue a payment advice order in FORM GST RFD-05 for the sanctioned
amount and the same shall be credited to the bank account specified in the
application for refund on the basis of a consolidated payment advice.
However, FORM GST RFD – 05 shall be required to be revalidated if the refund has
not been disbursed within the same FY in which the said payment advice order was
issued.

(4) The CG shall disburse the refund based on the consolidated payment advice issued
under (3).

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(1) On examination of the application, if any amount is found refundable u/s 54(5), the
PO shall issue a sanction order in FORM GST RFD-06 mentioning the following
details –
Total amount refundable
(-) Any amount provisionally refunded u/s 54(6)
(-) Any amount adjusted against o/s demand
Balance amount refundable
However. in case the amount of refund is completely adjusted against any o/s
demand, an order giving details of such adjustments shall be issued in FORM GST
RFD-07 (Part A)

(2) Where the PO/ Commissioner opines that the refundable amount is liable to be
withheld u/s 54(10)/ (11), he shall pass an order in FORM GST RFD-07 (Part B)
informing him the reasons for the same.

(3) In case the PO opines that the whole or any part of the refund claimed is not
admissible, he shall issue a SCN in FORM GST RFD-08, to which the applicant shall
be required to respond within 15 days in FORM GST RFD-09.
If the PO is satisfied with the response, a sanction order shall be issued in FORM GST
RFD-06, and if not, the whole or part of the claim shall be rejected after giving the
applicant an opportunity of being heard.

(4) Where any refundable amount is found payable u/s 54(8) in terms of sub-rule (1)/ (2)
above, the PO shall issue an order in FORM GST RFD-06 a payment advice order in
FORM GST RFD-05 for the sanctioned amount and the same shall be credited to the
bank account specified in the application for refund on the basis of a consolidated
payment advice.
However, FORM GST RFD – 06 shall not be required to be revalidated by the PO.
On the other hand, FORM GST RFD – 05 shall be required to be revalidated if the
refund has not been disbursed within the same FY in which the said payment advice
order was issued.

(4A) The CG shall disburse the refund based on the consolidated payment advice issued
under (4).

(5) In case the aforementioned amount is found not payable to the applicant, the PO
shall issue sanction order in FORM GST RFD-06 and an advice a payment order in
FORM GST RFD-05 to credit the said amount in CWF.

(1) In case any deficiency is communicated u/r 90(3), the amount earlier debited u/r
89(3) shall be re-credited to the ECrL.

(2) In case any refund claimed is fully or partly rejected FINALLY u/r 92, the amount so
debited shall be re-credited to the ECrL by an order made in FORM GST PMT-03.

Circular No. 17/17/2017-GST

Manual filing and processing of refund claims in respect of zero-rated supplies

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2.1 As per sub-section (3) of section 16 of the Integrated Goods and Services Tax Act,
2017 (hereinafter referred to as ‘the IGST Act’) read with clause (i) of subsection (3)
and sub-section (6) of section 54 of the CGST Act and rules 89 to 96A of the Central
Goods and Services Tax Rules, 2017 (hereinafter referred to as ‘the CGST Rules’), a
registered person may make zero-rated supplies of goods or services or both on
payment of integrated tax and claim refund of the tax so paid, or make zero-rated
supplies of goods or services or both under bond or Letter of Undertaking without
payment of integrated tax and claim refund of unutilized input tax credit in relation to
such zero rated supplies.

2.2 The refund of integrated tax paid on goods exported out of India is governed by rule
96 of the CGST Rules. The shipping bill filed by an exporter shall be deemed to be an
application for refund in such cases. The application shall be deemed to have been
filed only when export manifest or export report is filed and the applicant has
furnished a valid return in FORM GSTR-3 or FORM GSTR-3B, as the case may be.
Upon receipt of the information regarding furnishing of a valid return in FORM GSTR-
3 or FORM GSTR-3B, as the case may be, from the common portal, the system
designated by the Customs shall process the claim for refund and an amount equal
to the integrated tax paid in respect of such export shall be electronically credited to
the bank account of the applicant. Any order regarding withholding of such refund or
its further sanction respectively in PART-B of FORM GST RFD-07 or FORM GST RFD-
06 shall be done manually till the refund module is operational on the common
portal.

2.3 The application for refund of integrated tax paid on zero-rated supply of goods to a
Special Economic Zone developer or a Special Economic Zone unit or in case of
zero-rated supply of services (that is, except the cases covered in paragraph 2.2
above and para 2.4 below) is required to be filed in FORM GST RFD-01A (as notified
in the CGST Rules vide notification No. 55/2017 – Central Tax dated 15.11.2017) by the
supplier on the common portal and a print out of the said form shall be submitted
before the jurisdictional proper officer along with all necessary documentary
evidences as applicable (as per the details in statement 2 or 4 of Annexure to FORM
GST RFD – 01), within the time stipulated for filing of such refund under the CGST Act.

2.4 The application for refund of unutilized input tax credit on inputs or input services
used in making such zero-rated supplies shall be filed in FORM GST RFD-01A on the
common portal and the amount claimed as refund shall get debited in accordance
with sub-rule (3) of rule 86 of the CGST Rules from the amount in the electronic
credit ledger to the extent of the claim. The common portal shall generate a proof of
debit (ARN- Acknowledgement Receipt Number) which would be mentioned in the
FORM GST RFD-01A submitted manually, along with the print out of FORM GST RFD-
01A to the jurisdictional proper officer, and with all necessary documentary
evidences as applicable (as per details in statement 3 or 5 of Annexure to FORM GST
RFD-01), within the time stipulated for filing of such refund under the CGST Act.

2.5 The registered person needs to file the refund claim with the jurisdictional tax
authority to which the taxpayer has been assigned as per the administrative order
issued in this regard by the Chief Commissioner of Central Tax and the Commissioner
of State Tax. In case such an order has not been issued in the State, the registered
person is at liberty to apply for refund before the Central Tax Authority or State Tax
Authority till the administrative mechanism for assigning of taxpayers to respective
authority is implemented. However, in the latter case, an undertaking is required to
be submitted stating that the claim for sanction of refund has been made to only one
of the authorities. It is reiterated that the Central Tax officers shall facilitate the
processing of the refund claims of all registered persons whether or not such person
was registered with the Central Government in the earlier regime.

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2.6 Once such a refund application in FORM GST RFD-01A is received in the office of the
jurisdictional proper officer, an entry shall be made in a refund register.

2.7 Further, all communication in regard to the FORMS mentioned below shall be done
manually, within the timelines as specified in the relevant rules, till the module is
operational on the common portal, and all such communications shall also be
recorded appropriately in the refund register as discussed in the succeeding
paragraphs –
Sl. No. FORM Details Relevant provision of
the CGST Rules, 2017
1. FORM GST RFD-02 Acknowledgement Rules 90(1) and 90(2)
2. FORM GST RFD-03 Deficiency memo Rule 90(3)
3. FORM GST RFD-04 Provisional refund Rule 91(2)
order
4. FORM GST RFD-05 Payment advice Rules 91(3), 92(4),
92(5) and 94
5. FORM GST RFD-06 Refund sanction/ Rules 92(1), 92(3),
Rejection order 92(4), 92(5) and 96(7)
6. FORM GST RFD-07 Order for complete Rules 92(1), 92(2) and
adjustment/ 96(6)
withholding of
sanctioned refund
7. FORM GST RFD-08 Notice for rejection of Rule 92(3)
application for refund
8. FORM GST RFD-09 Reply to show cause Rule 92(3)
notice

2.8 The processing of the claim till the provisional sanction of refund shall be recorded in
the refund register.

2.9 After the sanction of provisional refund, the claim shall be processed and the final
order issued within sixty days of the date of receipt of the complete application form.
The process shall be recorded in the refund register.

2.10 After the refund claim is processed in accordance with the provisions of the
CGST Act and the rules made thereunder and where any amount claimed as refund is
rejected under rule 92 of the CGST Rules, either fully or partly, the amount debited,
to the extent of rejection, shall be re-credited to the electronic credit ledger by an
order made in FORM GST PMT-03. The amount would be credited by the proper
officer using FORM GST RFD-01B (as notified in the CGST Rules vide notification No.
55/2017 – Central Tax dated 15.11.2017) subject to the provisions of rule 93 of the
CGST Rules.

Circular No. 18/ 18/2017-GST

Clarification on refund of unutilized input tax credit of GST paid on inputs in respect of
exporters of fabrics

2.4 Subject to the provisions of sub-section (10) of the section 54 of the CGST Act, 2017,
a manufacturer of specified fabrics will be eligible for refund of unutilized input tax
credit of GST paid on inputs [other than the input tax credit of GST paid on capital
goods] in respect of fabrics manufactured and exported by him.

Circular No. 24/24/2017-GST

Manual filing and processing of refund claims on account of inverted duty structure, deemed
exports and excess balance in electronic cash ledger

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The provisions of Circular No. 17/17/2017-GST dated 15.11.2017 shall also be applicable
to the following types of refund in as much as they pertain to the method of filing of
the refund claim and its processing which is consistent with the relevant provisions
of the CGST Act, 2017 (hereafter referred to as ‘the CGST Act’) and the CGST Rules,
2017 (hereafter referred to as ‘the CGST Rules’) –
(i) refund of unutilized input tax credit where the credit has accumulated on
account of rate of tax on inputs being higher than the rate of tax on output
supplies (other than nil rated or fully exempt supplies) of goods or services or
both except those supplies which are notified by the Government on the
recommendations of the Council (section 54(3) of the CGST Act refers);
(ii) refund of tax on the supply of goods regarded as deemed exports; and
(iii) refund of balance in the electronic cash ledger.

2.0 Refund claims in respect of zero-rated supplies and on account of inverted duty
structure, deemed exports and excess balance in electronic cash ledger shall be filed
for a tax period on a monthly basis in FORM GST RFD-01A. However, in case
registered persons having aggregate turnover of up to ₹ 1.5 crore in the preceding
financial year or the current financial year are opting to file FORM GSTR-1 quarterly
(notification No. 57/2017-Central Tax dated 15.11.2017 refers), such persons shall
apply for refund on a quarterly basis. Further, it is stated that the refund claim for a
tax period may be filed only after filing the details in FORM GSTR-1 for the said tax
period. It is also to be ensured that a valid return in FORM GSTR-3B has been filed for
the last tax period before the one in which the refund application is being filed. Since
the date of furnishing of FORM GSTR 1 from July, 2017 onwards has been extended
while the dates of furnishing of FORM GSTR 2 and FORM GSTR 3 for such period are
yet to be notified, it has been decided by the competent authority to sanction refund
of provisionally accepted input tax credit at this juncture. However, the registered
persons applying for refund must give an undertaking to the effect that the amount of
refund sanctioned would be paid back to the Government with interest in case it is
found subsequently that the requirements of clause (c) of sub-section (2) of section
16 read with sub-section (2) of sections 42 of the CGST Act have not been complied
with in respect of the amount refunded. This undertaking should be submitted
manually along with the refund claim till the same is available in FORM RFD-01A on
the common portal.

4.0 Whereas, the Government has issued notification No. 48/2017-Central Tax dated
18.10.2017 under section 147 of the CGST Act wherein certain supplies of goods have
been notified as deemed export. Further, the third proviso to rule 89(1) of the CGST
Rules allows the recipient or the supplier to apply for refund of tax paid on such
deemed export supplies. In case such refund is sought by the supplier of deemed
export supplies, the documentary evidences as specified in notification No. 49/2017-
Central Tax dated 18.10.2017 are also required to be furnished which includes an
undertaking by the recipient of deemed export supplies that he shall not claim the
refund in respect of such supplies and that no input tax credit on such supplies has
been availed of by him. The undertaking should be submitted manually along with
the refund claim. Similarly, in case the refund is filed by the recipient of deemed
export supplies, an undertaking by the supplier of deemed export supplies that he
shall not claim the refund in respect of such supplies is also required to be furnished
manually. The procedure regarding procurement of supplies of goods from DTA by
Export Oriented Unit (EOU) / Electronic Hardware Technology Park (EHTP) Unit /
Software Technology Park (STP) Unit / Bio-Technology Parks (BTP) Unit under
deemed export as laid down in Circular No. 14/ 14/2017-GST dated 06.11.2017 needs
to be complied with.

5.0 Para 2.5 of Circular No. 17/ 17/2017-GST dated 15.11.2017 may be referred to in order
to ascertain the jurisdictional proper officer to whom the manual application for
refund is to be submitted. Where any amount claimed as refund is rejected under

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rule 92 of the CGST Rules, either fully or partly, the amount debited, to the extent of
rejection, shall be re-credited to the electronic credit ledger by an order made in
FORM GST RFD-1B until the FORM GST PMT-03 is available on the common portal.
Further, the payment of the sanctioned refund amount shall be made only by the
respective tax authority of the Central or State Government. Thus, the refund order
issued either by the Central tax authority or the State tax/ UT tax authority shall be
communicated to the concerned counter-part tax authority within seven working
days for the purpose of payment of the relevant sanctioned refund amount of tax or
cess, as the case may be. This time limit of seven working days is also applicable to
refund claims in respect of zero-rated supplies being processed as per Circular No.
17/ 17/2017-GST dated 15.11.2017 as against the time limit of three days prescribed in
para 4 of the said Circular. It must be ensured that the timelines specified under
section 54(7) and rule 91(2) of the CGST Rules for the sanction of refund are adhered
to.

6.0 In order to facilitate sanction of refund amount of central tax and State tax by the
respective tax authorities, it has been decided that both the Central and State Tax
authority shall nominate nodal officer(s) for the purpose of liasioning through a
dedicated e-mail id. Where the amount of central tax and State tax refund is ordered
to be sanctioned provisionally by the Central tax authority and a sanction order is
passed in accordance with the provisions of rule 91(2) of the CGST Rules, the Central
tax authority shall communicate the same, through the nodal officer, to the State tax
authority for making payment of the sanctioned refund amount in relation to State
tax and vice versa. The aforesaid communication shall primarily be made through e-
mail attaching the scanned copies of the sanction order [FORM GST RFD-04 and
FORM GST RFD-06], the application for refund in FORM GST RFD-01A and the
Acknowledgement Receipt Number (ARN). Accordingly, the jurisdictional proper
officer of Central or State Tax, as the case may be, shall issue FORM GST RFD-05 and
send it to the DDO for onward transmission for release of payment. After release of
payment by the respective PAO to the applicant’s bank account, the nodal officer of
Central tax and State tax authority shall inform each other. The manner of
communication as referred earlier shall be followed at the time of final sanctioning of
the refund also.

7.0 In case of refund claim for the balance amount in the electronic cash ledger, upon
filing of FORM GST RFD-01A as per the procedure laid down in para 2.4 of Circular
No. 17/ 17/2017-GST dated 15.11.2017, the amount of refund claimed shall get debited
in the electronic cash ledger.

8.0 It is also clarified that the drawback of all taxes under GST (Central Tax, Integrated
Tax, State/ Union Territory Tax) should not have been availed while claiming refund
of accumulated ITC under section 54(3)(ii) of the CGST Act. A declaration to this
effect forms part of FORM GST RFD-01A as well.

Circular No.: 37/ 11/2018-GST

Clarifications on exports related refund issues

2. Non-availment of drawback: The third proviso to sub-section (3) of section 54 of the

CGST Act states that no refund of input tax credit shall be allowed in cases where the
supplier of goods or services or both avails of drawback in respect of central tax.
2.1. This has been clarified in paragraph 8.0 of Circular No. 24/ 24/2017 – GST, dated 21st
December 2017. In the said paragraph, reference to “section 54(3)(ii) of the CGST
Act” is a typographical error and it should read as “section 54(3)(i) of the CGST Act”.
It may be noted that in the said circular reference has been made only to central tax,
integrated tax, State / Union territory tax and not to customs duty leviable under the
Customs Act, 1962. Therefore, a supplier availing of drawback only with respect to
basic customs duty shall be eligible for refund of unutilized input tax credit of central

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tax / State tax / Union territory tax / integrated tax / compensation cess under the
said provision. It is further clarified that refund of eligible credit on account of State
tax shall be available even if the supplier of goods or services or both has availed of
drawback in respect of central tax.

3. Amendment through Table 9 of GSTR-1: If a taxpayer has committed an error while

entering the details of an invoice / shipping bill / bill of export in Table 6A or Table 6B of
FORM GSTR-1, he can rectify the same in Table 9 of FORM GSTR-1.
3.1. While processing refund claims on account of zero-rated supplies, information
contained in Table 9 of FORM GSTR-1 of the subsequent tax periods should be taken
into cognizance, wherever applicable.

4. Exports without LUT: Export of goods or services can be made without payment of
integrated tax under the provisions of rule 96A of the Central Goods and Services Tax
Rules, 2017 (the CGST Rules). Under the said provisions, an exporter is required to furnish
a bond or Letter of Undertaking (LUT) to the jurisdictional Commissioner before effecting
zero rated supplies. A detailed procedure for filing of LUT has already been specified vide
Circular No. 8/ 8/2017 –GST. It has been brought to the notice of the Board that in some
cases, such zero-rated supplies have been made before filing the LUT and refund claims
for unutilized input tax credit have been filed.
4.1. The substantive benefits of zero-rating may not be denied where it has been
established that exports in terms of the relevant provisions have been made. The
delay in furnishing of LUT in such cases may be condoned and the facility for export
under LUT may be allowed on ex post facto basis considering the facts and
circumstances of each case.

5. Exports after specified period: Rule 96A(1) of the CGST Rules provides that any
registered person may export goods or services without payment of integrated tax after
furnishing a LUT / bond and that he would be liable to pay the tax due along with the
interest as applicable within a period of 15 days after the expiry of 3 months or such
further period as may be allowed by the Commissioner from the date of issue of the
invoice for export, if the goods are not exported out of India. The time period in case of
services is 15 days after the expiry of 1 year or such further period as may be allowed by
the Commissioner from the date of issue of the invoice for export, if the payment of such
services is not received by the exporter in convertible foreign exchange.
5.1. Exports have been zero-rated under the IGST Act, 2017 and as long as goods have
actually been exported even after a period of three months, payment of integrated
tax first and claiming refund at a subsequent date should not be insisted upon. In
such cases, the jurisdictional Commissioner may consider granting extension of time
limit for export as provided in the said sub-rule on post facto basis keeping in view
the facts and circumstances of each case. The same principle should be followed in
case of export of services.

6. Deficiency memo: If the application for refund is complete in terms of sub-rule (2), (3)
and (4) of rule 89 of the CGST Rules, an acknowledgement in FORM GST RFD-02 should
be issued. Rule 90 (3) of the CGST Rules provides for communication in FORM GST RFD-
03 (deficiency memo) where deficiencies are noticed. The said sub-rule also provides
that once the deficiency memo has been issued, the claimant is required to file a fresh
refund application after the rectification of the deficiencies.
6.1. There can be only one deficiency memo for one refund application and once such a
memo has been issued, the applicant is required to file a fresh refund application,
manually in FORM GST RFD-01A. This fresh application would be accompanied with
the original ARN, debit entry number generated originally and a hard copy of the
refund application filed online earlier. Once an application has been submitted
afresh, pursuant to a deficiency memo, the proper officer will not serve another
deficiency memo with respect to the application for the same period, unless the

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deficiencies pointed out in the original memo remain unrectified, either wholly or
partly, or any other substantive deficiency is noticed subsequently.

7. Self-declaration for non-prosecution:

7.2. This requirement is already satisfied in case of exports under LUT and asking for
self–declaration with every refund claim where the exports have been made under
LUT is not warranted.

8. Refund of transitional credit: As the transitional credit pertains to duties and taxes paid
under the existing laws viz., under Central Excise Act, 1944 and Chapter V of the Finance
Act, 1994, the same cannot be said to have been availed during the relevant period and
thus, cannot be treated as part of ‘Net ITC’.

9. Discrepancy between values of GST invoice and shipping bill/ bill of export: The zero-
rated supply of goods is effected under the provisions of the GST laws. An exporter, at
the time of supply of goods declares that the goods are for export and the same is done
under an invoice issued under rule 46 of the CGST Rules. The value recorded in the GST
invoice should normally be the transaction value as determined under section 15 of the
CGST Act read with the rules made thereunder. The same transaction value should
normally be recorded in the corresponding shipping bill / bill of export.
9.1. During the processing of the refund claim, the value of the goods declared in the
GST invoice and the value in the corresponding shipping bill / bill of export should
be examined and the lower of the two values should be sanctioned as refund.

11. Filing frequency of Refunds:

11.1. In many scenarios, exports may not have been made in that period in which the
inputs or input services were received and input tax credit has been availed.
Similarly, there may be cases where exports may have been made in a period but
no input tax credit has been availed in the said period. Rule 89(4) of CGST Rules,
considering such scenarios, defines relevant period in the context of the refund
claim and does not link it to a tax period.
11.2. The exporter, at his option, may file refund claim for one calendar month / quarter
or by clubbing successive calendar months / quarters. The calendar month(s) /
quarter(s) for which refund claim has been filed, however, cannot spread across
different financial years.

12. BRC / FIRC for export of goods: The realization of convertible foreign exchange is one of
the conditions for export of services. In case of export of goods, realization of
consideration is not a pre-condition. In rule 89 (2) of the CGST Rules, a statement
containing the number and date of invoices and the relevant Bank Realisation Certificates
(BRC) or Foreign Inward Remittance Certificates (FIRC) is required in case of export of
services whereas, in case of export of goods, a statement containing the number and
date of shipping bills or bills of export and the number and the date of the relevant
export invoices is required to be submitted along with the claim for refund.

13. Supplies to Merchant Exporters:

13.1. The benefit of supplies at concessional rate is subject to certain conditions and the
said benefit is optional. The option may or may not be availed by the supplier and /
or the recipient and the goods may be procured at the normal applicable tax rate.
13.2. The exporter will be eligible to take credit of the tax @ 0.05% / 0.1% paid by him.
The supplier who supplies goods at the concessional rate is also eligible for refund
on account of inverted tax structure as per the provisions of clause (ii) of the first
proviso to sub-section (3) of section 54 of the CGST Act. It may also be noted that
the exporter of such goods can export the goods only under LUT / bond and cannot
export on payment of integrated tax. In this connection, notification No. 3/2018-
Central Tax, may be referred.

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14. Requirement of invoices for processing of claims for refund:

14.1. Only the specified statements would be required for processing of refund claims
because the details of outward supplies and inward supplies would be available on
the common portal which would be matched. Most of the other information like
shipping bills details etc. would also be available because of the linkage of the
common portal with the Customs system. However, because of delays in
operationalizing the requisite modules on the common portal, in many cases,
suppliers’ invoices on the basis of which the exporter is claiming refund may not be
available on the system. For processing of refund claims of input tax credit, verifying
the invoice details is quintessential. In a completely electronic environment, the
information of the recipients’ invoices would be dependent upon the suppliers’
information, thus putting an in-built check-and-balance in the system. However, as
the refund claims are being filed by the recipient in a semi-electronic environment
and is completely based on the information provided by them, it is necessary that
invoices are scrutinized.

Circular No. 45/ 19/2018-GST

Clarifications of refund related issues

3. Claim for refund filed by an ISD, a person paying tax under section 10 or a non-
resident taxable person:
3.3 In case of a claim for refund of balance in the electronic cash ledger filed
by an ISD or a composition taxpayer; and the claim for refund of balance
in the electronic cash and/ or credit ledger by a non-resident taxable
person, the filing of the details in FORM GSTR-1 and the return in FORM
GSTR-3B is not mandatory. Instead, the return in FORM GSTR-4 filed by a
composition taxpayer, the details in FORM GSTR-6 filed by an ISD and
the return in FORM GSTR-5 filed by a non-resident taxable person shall
be sufficient for claiming the said refund.

5. Refund of unutilized ITC of CC availed on inputs in cases where the final product is
not subject to the levy of CC:
5.2 In this regard, section 16(2) of the IGST Act, 2017 states that, subject to the
provisions of section 17(5) of the CGST Act, credit of input tax may be
availed for making zero rated supplies. Further, as per section 8 of the
GST(CS) Act, 2017, all goods and services specified in the Schedule to the
Cess Act are leviable to cess under the Cess Act; and vide section 11 (2) of
the Cess Act, section 16 of the IGST Act is mutatis mutandis made
applicable to inter-State supplies of all such goods and services. Thus, it
implies that all supplies of such goods and services are zero rated under
the Cess Act. Moreover, as section 17(5) of the CGST Act does not restrict
the availment of input tax credit of compensation cess on coal, it is
clarified that a registered person making zero rated supply of aluminium
products under bond or LUT may claim refund of unutilized credit
including that of compensation cess paid on coal.
5.3 Such registered persons may also make zero-rated supply of aluminium
products on payment of integrated tax but they cannot utilize the credit of
the compensation cess paid on coal for payment of integrated tax in view
of the proviso to section 11(2) of the Cess Act, which allows the utilization
of the input tax credit of cess, only for the payment of cess on the
outward supplies. Accordingly, they cannot claim refund of
compensation cess in case of zero-rated supply on payment of integrated
tax.

6. Whether bond or Letter of Undertaking (LUT) is required in the case of zero rated
supply of exempted or non-GST goods and whether refund can be claimed by the
exporter of exempted or non-GST goods?

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6.2 In respect of refund claims on account of export of non-GST and

exempted goods without payment of integrated tax; LUT/ bond is not
required. Such registered persons exporting non-GST goods shall comply
with the requirements prescribed under the existing law (i.e. Central
Excise Act, 1944 or the VAT law of the respective State) or under the
Customs Act, 1962, if any.
6.3 Further, the exporter would be eligible for refund of unutilized input tax
credit of central tax, state tax, union territory tax, integrated tax and
compensation cess in such cases.

7. What is the scope of the restriction imposed by rule 96(10) of the CGST Rules,
regarding non-availment of the benefit of notification Nos. 48/2017-Central Tax
dated the 18.10.2017, 40/2017-Central Tax (Rate) dated 23.10.2017, 41/2017-Integrated
Tax (Rate) dated 23.10.2017, 78/2017-Customs dated 13.10.2017 or 79/2017-Customs
dated 13.10.2017?
7.1 Sub-rule (10) of rule 96 of the CGST Rules seeks to prevent an exporter,
who is receiving goods from suppliers availing the benefit of certain
specified notifications under which they supply goods without payment
of tax or at reduced rate of tax, from exporting goods under payment of
integrated tax. This is to ensure that the exporter does not utilise the input
tax credit availed on other domestic supplies received for making the
payment of integrated tax on export of goods.
7.2 However, the said restriction is not applicable to an exporter who has
procured goods from suppliers who have not availed the benefits of the
specified notifications for making their outward supplies. Further, the said
restriction is also not applicable to an exporter who has procured goods
from suppliers who have, in turn, received goods from registered persons
availing the benefits of these notifications since the exporter did not
directly procure these goods without payment of tax or at reduced rate of
tax.
7.3 Thus, the restriction under sub-rule (10) of rule 96 of the CGST Rules is
only applicable to those exporters who are directly receiving goods from
those suppliers who are availing the benefit under notification No.
48/2017-Central Tax dated the 18th October, 2017,notification No.
40/2017-Central Tax (Rate) dated the 23rd October, 2017, or notification
No. 41/2017-Integrated Tax (Rate) dated the 23rd October, 2017 or
notification No. 78/2017-Customs dated the 13th October, 2017 or
notification No. 79/2017-Customs dated the 13th October, 2017.
7.4 Further, there might be a scenario where a manufacturer might have
imported capital goods by availing the benefit of Notification No.
78/2017-Customs dated 13.10.2017 or 79/2017-Customs dated 13.10.2017.
Thereafter, goods manufactured from such capital goods may be
supplied to an exporter. It is hereby clarified that this restriction does not
apply to such inward supplies of an exporter.

Circular No. 48/ 22/2018-GST

Clarifications of certain issues under GST

Sl. No. Issue Clarification

1 Whether services of short-term 1.1 As per section 7(5)(b) of the IGST
accommodation, conferencing, Act, 2017, the supply of goods/
banqueting etc. provided to a SEZ services to a SEZ developer/ unit
developer/ unit should be treated as an shall be treated to be a supply of
inter-state supply (under section goods/ services in the course of
7(5)(b) of the IGST Act, 2017) or an inter-state trade or commerce.
Whereas, as per section 12(3)(c) of

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intra-state supply (under section the IGST Act, the place of supply of
12(3)(c) of the IGST Act, 2017)? services by way of accommodation
in any immovable property for
organising any functions shall be
the location at which the
immovable property is located.
Thus, in such cases, if the location
of the supplier and the place of
supply is in the same State/ UT, it
would be treated as intra-state
supply.
1.2 It is an established principle of
interpretation of statutes that in
case of an apparent conflict
between two provisions, the
specific provision shall prevail over
the general provision.
1.3 In the instant case, section 7(5)(b)
of the IGST Act is a specific
provision relating to supplies of
goods/ services made to a SEZ
developer/ unit, which states that
such supplies shall be treated as
inter-State supplies.
1.4 It is therefore, clarified that services
of short-term accommodation,
conferencing, banqueting etc.,
provided to a SEZ developer/ unit
shall be treated as an inter-State
supply.
2 Whether the benefit of zero-rated 2.1 As per section 16(1) of the IGST Act,
supply can be allowed to all “zero-rated supplies” means
procurements by a SEZ developer/ unit supplies of goods/ services to a SEZ
such as event management services, developer/ unit. Whereas, section
hotel and accommodation services, 16(3) of the IGST Act provides for
consumables etc.? refund to a registered person
making zero-rated supplies under
bond/ LUT or on payment of IGST,
subject to such conditions,
safeguards and procedure as may
be prescribed. Further, as per the
second proviso to rule 89(1) of the
CGST Rules, 2017, in respect of
supplies to a SEZ developer/ unit,
the application for refund shall be
filed by the:
(a) supplier of goods after such
goods have been admitted in
full in the SEZ for authorised
operations, as endorsed by
the specified officer of the
Zone;
(b) supplier of services along
with such evidences
regarding receipt of services
for authorised operations as

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endorsed by the specified

officer of the Zone.
2.2 A conjoint reading of the above
legal provisions reveals that the
supplies to a SEZ developer or a
SEZ unit shall be zero-rated and the
supplier shall be eligible for refund
of unutilized input tax credit or
integrated tax paid, as the case may
be, only if such supplies have been
received by the SEZ developer/ unit
for authorized operations. An
endorsement to this effect shall
have to be issued by the specified
officer of the Zone.
2.3 Therefore, subject to the provisions
of section 17(5) of the CGST Act, if
event management services, hotel,
accommodation services,
consumables etc. are received by a
SEZ developer/ unit for authorised
operations, as endorsed by the
specified officer of the Zone, the
benefit of zero-rated supply shall
be available in such cases to the
supplier.
3 Whether independent fabric 3.1 Notification No. 5/2017-Central Tax
processors (job workers) in the textile (Rate) specifies the goods in
sector supplying job work services are respect of which refund of
eligible for refund of unutilized ITC on unutilized ITC on account of
account of inverted duty structure inverted duty structure under
under section 54(3) of the CGST Act, section 54(3) of the CGST Act shall
2017, even if the goods (fabrics) not be allowed where the credit
supplied are covered under notification has accumulated on account of rate
No. 5/2017-Central Tax (Rate)? of tax on inputs being higher than
the rate of tax on output supplies of
such goods. However, in case of
fabric processors, the output
supply is the supply of job work
services and not of goods (fabrics).
3.2 Hence, it is clarified that the fabric
processors shall be eligible for
refund of unutilized ITC on account
of inverted duty structure under
section 54(3) of the CGST Act even
if the goods (fabrics) supplied to
them are covered under notification
No. 5/2017-Central Tax (Rate).

Circular No. 59/ 33/2018-GST

Clarification on refund related issues

2. Submission of invoices for processing of claims of refund:

2.1 It was clarified vide Circular No. 37/ 11/2018-GST that since the refund claims
were being filed in a semi-electronic environment and the processing was
completely based on the information provided by the claimants, it becomes

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necessary that invoices are scrutinized. Accordingly, it was clarified that the
invoices relating to inputs, input services and capital goods were to be
submitted for processing of claims for refund of integrated tax where services
are exported with payment of integrated tax; and invoices relating to inputs
and input services were to be submitted for processing of claims for refund of
input tax credit where goods or services are exported without payment of
integrated tax.
2.2 In this regard, trade and industry have represented that such requirement is
cumbersome and increases their compliance cost, especially where the
number of invoices is large.
2.3 In view of the difficulties being faced by the claimants of refund, it has been
decided that the refund claim shall be accompanied by a print-out of FORM
GSTR-2A of the claimant for the relevant period for which the refund is
claimed. The proper officer shall rely upon FORM GSTR-2A as an evidence of
the accountal of the supply by the corresponding supplier in relation to which
the input tax credit has been availed by the claimant. It may be noted that
there may be situations in which FORM GSTR-2A may not contain the details
of all the invoices relating to the input tax credit availed, possibly because the
supplier’s FORM GSTR-1 was delayed or not filed. In such situations, the proper
officer may call for the hard copies of such invoices if he deems it necessary
for the examination of the claim for refund. It is emphasized that the proper
officer shall not insist on the submission of an invoice (either original or
duplicate) the details of which are present in FORM GSTR-2A of the relevant
period submitted by the claimant.
2.4 The claimant shall also submit the details of the invoices on the basis of which
input tax credit had been availed during the relevant period for which the
refund is being claimed, in the format enclosed as Annexure-A manually along
with the application for refund claim in FORM GST RFD-01A and the
Application Reference Number (ARN). The claimant shall also declare the
eligibility or otherwise of the input tax credit availed against the invoices
related to the claim period in the said Annexure for enabling the proper officer
to determine the same.

3. System validations in calculating refund amount

3.1 Currently, in case of refund of unutilized input tax credit (ITC for short), the
common portal calculates the refundable amount as the least of the following
amounts:
a) The maximum refund amount as per the formula in rule 89(4) or rule
89(5) of the CGST Rules, 2017 [formula is applied on the consolidated
amount of ITC, i.e. Central tax + State tax/ Union Territory tax
+Integrated tax + Cess (wherever applicable)];
b) The balance in the electronic credit ledger of the claimant at the end of
the tax period for which the refund claim is being filed after the return
for the said period has been filed; and
c) The balance in the electronic credit ledger of the claimant at the time of
filing the refund application.
3.2 After calculating the least of the three amounts, as detailed above, the
equivalent amount is to be debited from the electronic credit ledger of the
claimant in the following order:
a) Integrated tax, to the extent of balance available;
b) Central tax and State tax/ Union Territory tax, equally to the extent of
balance available and in the event of a shortfall in the balance available
in a particular electronic credit ledger (say, Central tax), the differential
amount is to be debited from the other electronic credit ledger (i.e.,
State tax/ Union Territory tax, in this case).
3.3 The procedure described in para 3.2 above, however, is not presently available
on the common portal. Till the time such facility is made available on the

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common portal, the taxpayers are advised to follow the order as explained
above for all refund applications filed after the date of issue of this Circular.
However, for applications already filed and pending with the tax authorities,
where this order is not adhered to by the claimant, no adverse view may be
taken by the tax authorities.
3.4 The above system validations are being clarified so that there is no ambiguity
in relation to the process through which an application in FORM GST RFD-01A
is generated.
3.5 Further, it may be noted that the refund application can be filed only after the
electronic credit ledger has been debited in the manner specified in para 3.2
(read with para 3.3) above, and the ARN is generated on the common portal.

4. Re-credit of electronic credit ledger in case of rejection of refund claim:

4.1 In case of rejection of claim for refund of unutilized input tax credit on account
of ineligibility of the said credit under sub-sections (1),(2) or (5) of section 17 of
the CGST Act, or under any other provision of the Act and rules made
thereunder the proper officer shall order for the rejected amount to be re-
credited to the electronic credit ledger of the claimant using FORM GST RFD-
01B. For recovery of this amount, a demand notice shall have to be
simultaneously issued to the claimant under section 73 or 74 of the CGST Act,
as the case may be. In case the demand is confirmed by an order issued under
sub-section (9) of section 73, or sub-section (9) of section 74 of the CGST Act,
as the case may be, the said amount shall be added to the electronic liability
register of the claimant through FORM GST DRC07. Alternatively, the claimant
can voluntarily pay this amount, along with interest and penalty, if applicable,
before service of the demand notice, and intimate the same to the proper
officer in FORM GST DRC-03 in accordance with sub-section (5) of section 73
or sub-section (5) of section 74 of the CGST Act, as the case may be, read with
sub-rule (2) of rule 142 of the CGST Rules. In such cases, the need for serving a
demand notice will be obviated.
4.2 In case of rejection of claim for refund of unutilized input tax credit, on account
of any reason other than the eligibility of credit, the rejected amount shall be
re-credited to the electronic credit ledger of the claimant using FORM GST
RFD-01B only after the receipt of an undertaking from the claimant to the effect
that he shall not file an appeal against the said rejection or in case he files an
appeal, the same is finally decided against the claimant, as has been laid down
in rule 93 of the CGST Rules.
4.3 Consider an example where against a refund claim of ₹ 100, only ₹ 80 is
sanctioned (₹ 15 is rejected on account of ineligible ITC and ₹ 5 is rejected on
account of any other reason). As described above, ₹ 15 would be re-credited
with simultaneous issue of notice under section 73 or 74 of the CGST Act for
recovery of ineligible ITC. ₹ 5 would be re-credited (through FORM GST RFD-
01B) only after the receipt of an undertaking from the claimant to the effect that
he shall not file an appeal or in case he files an appeal, the same is finally
decided against the claimant.

5. Scope of rule 96(10) of the CGST Rules:

5.1 Rule 96(10) of the CGST Rules, as amended retrospectively by notification No.
39/2018-Central Tax, provides that registered persons, including importers,
who are directly purchasing/ importing supplies on which the benefit of
reduced tax incidence or no tax incidence under certain specified notifications
has been availed, shall not be eligible for refund of integrated tax paid on
export of goods or services. For example, an importer (X) who is importing
goods under the benefit of Advance Authorization/ EPCG, is directly
purchasing/ importing supplies on which the benefit of reduced/ Nil incidence
of tax under the specified notifications has been availed. In this case, the

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restriction under rule 96(10) of the CGST Rules is applicable to X. However, if X

supplies the said goods, after importation, to a domestic buyer (Y), on payment
of full tax, then Y can rightfully export these goods under payment of
integrated tax and claim refund of the integrated tax so paid. However, in the
said example if Y purchases these goods from X after availing the benefit of
specified notifications, then Y also will not be eligible to claim refund of
integrated tax paid on export of goods or services.
5.2 Overall, it is clarified that the restriction under rule 96(10) of the CGST Rules, as
amended retrospectively by notification No. 39/2018-Central Tax, applies only
to those purchasers/ importers who are directly purchasing/ importing
supplies on which the benefit of certain notifications, as specified in the said
sub-rule, has been availed.

6. Disbursal of refund amount after sanctioning by the proper officer:

6.1 A few cases have come to notice where a tax authority, after receiving a
sanction order from the counterpart tax authority (Centre or State), has refused
to disburse the relevant sanctioned amount calling into question the validity of
the sanction order on certain grounds. E.g. a tax officer of one administration
has sanctioned, on a provisional basis, 90% of the amount claimed in a refund
application for unutilized ITC on account of exports. On receipt of the
provisional sanction order, the tax officer of the counterpart administration has
observed that the provisional refund of input tax credit has been incorrectly
sanctioned for ineligible input tax credit and has therefore, refused to disburse
the tax amount pertaining to the same.
6.2 It is clarified that the remedy for correction of an incorrect or erroneous
sanction order lies in filing an appeal against such order and not in withholding
of the disbursement of the sanctioned amount. If any discrepancy is noticed by
the disbursing authority, the same should be brought to the notice of the
counterpart refund sanctioning authority, the concerned counterpart reviewing
authority and the nodal officer, but the disbursal of the refund should not be
withheld. It is hereby clarified that neither the State nor the Central tax
authorities shall refuse to disburse the amount sanctioned by the counterpart
tax authority on any grounds whatsoever, except under sub-section (11) of
section 54 of the CGST Act. It is further clarified that any adjustment of the
amount sanctioned as refund against any outstanding demand against the
claimant can be carried out by the refund disbursing authority if not already
done by the refund sanctioning authority.

7. Status of refund claim after issuance of deficiency memo:

7.1 Rule 90(3) of the CGST Rules provides that where any deficiencies in the
application for refund are noticed, the proper officer shall communicate the
deficiencies to the claimant in FORM GST RFD-03, requiring him to file a fresh
refund application after rectification of such deficiencies. Further, rule 93(1) of
the CGST Rules provides that where any deficiencies have been
communicated under rule 90(3), the amount debited under rule 89 (3) shall be
recredited to the electronic credit ledger. Therefore, the intent of the law is
very clear that in case a deficiency memo in FORM GST RFD-03 has been
issued, the refund claim will have to be filed afresh.
7.2 It has been learnt that certain field formations are issuing show cause notices
to the claimants in cases where the refund application is not re-submitted after
the issuance of a deficiency memo. These show-cause-notices are being
subsequently adjudicated and orders are being passed in FORM GST RFD-04/
06. It is clarified that show-cause-notices are not required to be issued where
deficiency memos have been issued. A refund application which is re-
submitted after the issuance of a deficiency memo shall have to be treated as a
fresh application. No order in FORM GST RFD-04/ 06 can be issued in respect

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of an application against which a deficiency memo has been issued and which
has not been resubmitted subsequently.

8. Treatment of refund applications where the amount claimed is less than ₹ 1,000:
8.1 Sub-section (14) of section 54 of the CGST Act provides that no refund under
subsection (5) or sub-section (6) of section 54 shall be paid to an applicant, if
the amount is less than ₹ 1,000.
8.2 In this regard, it is clarified that the limit of rupees one thousand shall be
applied for each tax head separately and not cumulatively. The limit would not
apply in cases of refund of excess balance in the electronic cash ledger. All
field formations are requested to reject claims of refund from the electronic
credit ledger for less than one thousand rupees and recredit such amount by
issuing an order in FORM GST RFD-01B.

Circular No. 70/ 44/2018-GST

Clarification on certain issues related to refund

2. Status of refund claim after issuance of deficiency memo and re-credit of electronic
credit ledger:
2.1 Para 7.1 of circular No. 59/ 33/2018-GST dated the 4th September, 2018
clarifies the intent of law in cases where a deficiency memo is issued in
respect of a refund claim. In para 7.2 of the said circular, the practise
being followed in the field formations was elaborated and it was clarified
that show cause notices are not required to be issued (and consequently
no orders are required to be issued in FORM GST RFD-04/ 06) in cases
where refund application is not resubmitted after the issuance of a
deficiency memo (in FORM GST RFD-03). It was also clarified that once a
deficiency memo has been issued against an application for refund, the
amount of Input Tax Credit debited under sub-rule (3) of rule 89 of the
Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the
“CGST Rules”) is required to be recredited to the electronic credit ledger
of the applicant by using FORM GST RFD-01B and the taxpayer is
expected to file a fresh application for refund.
2.2 The issue has been re-examined and it has been observed that presently
the common portal does not allow a taxpayer to file a fresh application
for refund once a deficiency memo has been issued against an earlier
refund application for the same period. Therefore, it is clarified that till the
time such facility is developed, taxpayers would be required to submit
the rectified refund application under the earlier Application Reference
Number (ARN) only. Thus, it is reiterated that when a deficiency memo in
FORM GST RFD-03 is issued to taxpayers, re-credit in the electronic
credit ledger (using FORM GST RFD-01B) is not required to be carried out
and the rectified refund application would be accepted by the
jurisdictional tax authorities with the earlier ARN itself. It is further
clarified that a suitable clarification would be issued separately for cases
in which such re-credit has already been carried out.

3. Allowing exporters who have received capital goods under EPCG to claim refund of
IGST paid on exports:
3.1 Sub-rule (10) of Rule 96 of the Central Goods and Services Tax Rules,
2017 (hereinafter referred to as “said sub-rule”), restricts exporters from
availing the facility of claiming refund of IGST paid on exports in certain
scenarios. It was intended that exporters availing benefit of certain
notifications would not be eligible to avail the facility of such refund.
However, representations have been received requesting that exporters
who have received capital goods under the Export Promotion Capital

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Goods Scheme (hereinafter referred to as “EPCG Scheme”), should be

allowed to avail the facility of claiming refund of the IGST paid on exports.
GST Council, in its 30th meeting held in New Delhi on 28th September,
2018, had accorded approval to the proposal of suitably amending the
said sub-rule along with sub-rule (4B) of rule 89 of the CGST Rules
prospectively in order to enable such exporters to avail the said facility
notification No. 54/2018 – Central Tax dated the 9th October, 2018 has
been issued to carry out the changes recommended by the GST Council.
Alongside the amendment carried out in the said sub-rule through the
notification No. 39/2018- Central Tax dated 4th September, 2018 has
been rescinded vide notification No. 53/2018 – Central Tax dated the 9th
October, 2018.
3.2 For removal of doubts, it is clarified that the net effect of these changes
would be that any exporter who himself/ herself imported any inputs/
capital goods in terms of notification Nos. 78/2017-Customs and 79/2017-
Customs both dated 13th October, 2017 shall be eligible to claim refund of
the IGST paid on exports till the date of the issuance of the notification
No. 54/2018 – Central Tax dated the 9th October, 2018 referred to above.
3.3 Further, after the issuance of notification No. 54/2018 – Central Tax dated
the 9th October, 2018, exporters who are importing goods in terms of
notification Nos. 78/2017- Customs and 79/2017-Customs both dated
13th October, 2017 would not be eligible for refund of IGST paid on
exports as provided in the said sub-rule. However, exporters who are
receiving capital goods under the EPCG scheme, either through import in
terms of notification No. 79/2017-Customs dated 13th October, 2017 or
through domestic procurement in terms of notification No. 48/2017-
Central Tax, dated 18th October, 2017, shall continue to be eligible to
claim refund of IGST paid on exports and would not be hit by the
restrictions provided in the said sub-rule. All clarifications issued in this
regard vide any Circular issued earlier are hereby superseded.

Circular No. 79/53/2018-GST

Clarification on refund related issues

Physical submission of refund claims with jurisdictional proper officer:

2. Due to the non-availability of the complete electronic refund module, a work around
was prescribed vide Circular No. 17/17/2017-GST dated 15.11.2017 and Circular No.
24/24/2017-GST dated 21.12.2017, wherein a taxpayer was required to file FORM GST
RFD-01A on the common portal, generate the Application Reference Number (ARN),
take print-outs of the same, and submit it physically in the office of the jurisdictional
proper officer, along with all the supporting documents. It has been learnt that this
requirement of physical submission of documents in the jurisdictional tax office is
causing undue hardship to the taxpayers. Therefore, in order to further simplify the
refund process, the following instructions, in partial modification of the aforesaid
circulars, are issued:
a) All documents/undertaking/statements to be submitted along with the claim
for refund in FORM GST RFD-01A shall be uploaded on the common portal at
the time of filing of the refund application. Circular No. 59/33/2018-GST
dated 04.09.2018 specified that instead of providing copies of all invoices, a
statement of invoices needs to be submitted in a prescribed format and
copies of only those invoices need to be submitted the details of which are
not found in FORM GSTR-2A for the relevant period. It is now clarified that
the said statement and these invoices, instead of being submitted physically,
shall be electronically uploaded on the common portal at the time of filing the
claim of refund in FORM GST RFD-01A. Neither the application in FORM GST

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RFD-01A, nor any of the supporting documents, shall be required to be

submitted physically in the office of the jurisdictional proper officer.
b) However, the taxpayer will still have the option to physically submit the
refund application to the jurisdictional proper officer in FORM GST RFD-01A,
along with supporting documents, if he so chooses. A taxpayer who still
remains unallocated to the Central or State Tax Authority will necessarily
have to submit the refund application physically. They can choose to do so
before the jurisdictional proper officer of either the State or the Central tax
authority, as was earlier clarified vide Circular No. 17/17/2017 - GST dated
15.11.2017.
c) The ARN will be generated only after the claimant has completed the process
of filing the refund application in FORM GST RFD-01A, and has completed
uploading of all the supporting documents/undertaking/statements/invoices
and, where required, the amount has been debited from the electronic
credit/cash ledger.
d) As soon as the ARN is generated, the refund application along with all the
supporting documents shall be transferred electronically to the jurisdictional
proper officer who shall be able to view it on the system. The application
shall be deemed to have been filed under rule 90(2) of the Central Goods and
Services Tax Rules, 2017 (hereinafter referred to as “CGST Rules”) on the date
of generation of the said ARN and the time limit of 15 days to issue an
acknowledgement shall be counted from that date. This will obviate the need
for a claimant to visit the jurisdictional tax office for the submission of the
refund application. Accordingly, the acknowledgement for the complete
application or deficiency memo, as the case may be, would be issued by the
jurisdictional tax officer based on the documents so received electronically
from the common portal. However, the said acknowledgement or deficiency
memo shall continue to be issued manually for the time being.
e) If a refund application is electronically transferred to the wrong jurisdictional
officer, he/she shall reassign it to the correct jurisdictional officer
electronically within a period of three days. In such cases, the application
shall be deemed to have been filed under rule 90(2) of the CGST Rules only
after it has been so reassigned. Deficiency memos shall not be issued in such
cases merely on the ground that the applications were received electronically
in the wrong jurisdiction. Where the facility of electronic re-assignment is not
available, the present arrangement shall continue.
f) It has already been clarified vide Circular No. 70/44/2018-GST dated
26.10.2018 that after the issuance of a deficiency memo, taxpayers would be
required to submit the rectified refund application under the earlier
Application Reference Number (ARN) only. It is further clarified that the
rectified application, which is to be treated as a fresh refund application, will
be submitted manually in the office of the jurisdictional proper officer.

3. It may be noted that the documents/statements/undertakings/invoices to be

submitted along with the refund application in FORM GST RFD-01A are the same as
have been prescribed under the CGST Rules and various Circulars issued on the
subject from time to time. Only the method of submission of these
documents/statements/undertakings/invoices is being changed from the physical
mode to the electronic mode. It may also be noted that the other stages of
processing of a refund claim submitted in FORM GST RFD-01A by the jurisdictional
tax officer shall continue to be carried out manually for the time being, as is being
presently done.

Calculation of refund amount for claims of refund of accumulated Input Tax Credit (ITC) on
account of inverted duty structure:

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4. Representations have been received stating that while processing the refund of
unutilized ITC on account of inverted tax structure, the departmental officers are
denying the refund of ITC of GST paid on those inputs which are procured at equal or
lower rate of GST than the rate of GST on outward supply, by not including the
amount of such ITC while calculating the maximum refund amount as specified in
rule 89(5) of the CGST Rules. The matter has been examined and the following issues
are clarified:
a) Refund of unutilized ITC in case of inverted tax structure, as provided in
section 54(3) of the CGST Act, is available where ITC remains unutilized even
after setting off of available ITC for the payment of output tax liability. Where
there are multiple inputs attracting different rates of tax, in the formula
provided in rule 89(5) of the CGST Rules, the term „Net ITC‟ covers the ITC
availed on all inputs in the relevant period, irrespective of their rate of tax.
b) The calculation of refund of accumulated ITC on account of inverted tax
structure, in cases where several inputs are used in supplying the final
product/output, can be clearly understood with help of the following
example:
i. Suppose a manufacturing process involves the use of an input A
(attracting 5 per cent GST) and input B (attracting 18 per cent GST) to
manufacture output Y (attracting 12 per cent GST).
ii. The refund of accumulated ITC in the situation at (i) above, will be
available under section 54(3) of the CGST Act read with rule 89(5) of
the CGST Rules, which prescribes the formula for the maximum
refund amount permissible in such situations.
iii. Further assume that the claimant supplies the output Y having value
of ₹ 3,000/- during the relevant period for which the refund is being
claimed. Therefore, the turnover of inverted rated supply of goods
and services will be ₹ 3,000/-. Since the claimant has no other
outward supplies, his adjusted total turnover will also be ₹ 3,000/-.
iv. If we assume that Input A, having value of ₹ 500/- and Input B,
having value of ₹ 2,000/-, have been purchased in the relevant
period for the manufacture of Y, then Net ITC shall be equal to ₹
385/- (₹ 25/- and ₹ 360/- on Input A and Input B respectively).
v. Therefore, multiplying Net ITC by the ratio of turnover of inverted
rated supply of goods and services to the adjusted total turnover will
give the figure of ₹ 385/-.
vi. From this, if we deduct the tax payable on such inverted rated supply
of goods or services, which is ₹ 360/-, we get the maximum refund
amount, as per rule 89(5) of the CGST Rules which is ₹ 25/-

Disbursal of refund amounts after sanction:

5. Section 56 of the CGST Act clearly states that if any tax ordered to be refunded is not
refunded within 60 days of the date of receipt of application, interest at the rate of 6
per cent (notified vide notification No. 13/2017-Central Tax dated 28.06.2017) on the
refund amount starting from the date immediately after the expiry of sixty days from
the date of receipt of application (ARN) till the date of refund of such tax shall have to
be paid to the claimant. It may be noted that any tax shall be considered to have
been refunded only when the amount has been credited to the bank account of the
claimant. Therefore, interest will be calculated starting from the date immediately
after the expiry of sixty days from the date of receipt of the application till the date
on which the amount is credited to the bank account of the claimant. Accordingly, all
tax authorities are advised to issue the final sanction orders in FORM GST RFD-06
within 45 days of the date of generation of ARN, so that the disbursement is
completed within 60 days by both Central and State Tax Authorities for CGST / IGST
/ UTGST / Compensation Cess and SGST respectively.

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Refund applications that have been generated on the portal but not physically received in
the jurisdictional tax offices:

6. There are a large number of applications for refund in FORM GST RFD-01A which
have been generated on the common portal but have not yet been physically
received in the jurisdictional tax offices. With the implementation of electronic
submission of refund application, as detailed in para 2 above, this problem is
expected to reduce. However, for the applications (except those relating to refund of
excess balance in the electronic cash ledger) which have been generated on the
common portal before the issuance of this Circular and which have not yet been
physically received in the jurisdictional offices (list of all applications pertaining to a
particular jurisdictional office which have been generated on the common portal, if
not already available, may be obtained from DG-Systems), the following guidelines
are laid down:
a) All refund applications in which the amount claimed is less than the statutory
limit of ₹ 1,000/- should be rejected and the amount re-credited to the
electronic credit ledger of the applicant through the issuance of FORM GST
RFD-01B.
b) For all applications wherein an amount greater than ₹ 1,000/- has been
claimed, a list of applications which have not been received in the
jurisdictional tax office within a period of 60 days starting from the date of
generation of ARN may be compiled. A communication may be sent to all
such claimants on their registered email ids, informing that the application
needs to be physical submitted to the jurisdictional tax office within 15 days
of the date of the email. The contact details and the address of the
jurisdictional officer may also be provided in the said communication. The
claimant may be further informed that if he/she fails to physically submit the
application within 15 days of the date of the email, the application shall be
summarily rejected and the debited amount, if any, shall be re-credited to the
electronic credit ledger.

7. For the applications generated on the common portal before the issuance of this
Circular in relation to refund of excess balance from the electronic cash ledger which
have not yet been received in the jurisdictional office, the amount debited in the
electronic cash ledger in such applications may be re-credited through FORM GST
RFD-01B provided that there are no liabilities in the electronic liability register. The
said amount shall be re-credited even though the return in FORM GSTR-3B, as the
case may be for the relevant period has not been filed.

8. For the refund applications generated on the common portal after the issuance of this
Circular, and for the refund applications generated on the common portal before the
issuance of this Circular and which have been physically received in the jurisdictional
tax offices before the issuance of this Circular, the existing guidelines, as modified by
this Circular may be followed.

Issues related to refund of accumulated Input Tax Credit of Compensation Cess:

9. Several representations have been received requesting clarifications on certain

issues related to refund of accumulated input tax credit of compensation cess on
account of zero-rated supplies made under Bond/Letter of Undertaking. These issues
have been examined and are clarified as below:
a) Issue: A registered person uses inputs on which compensation cess is
leviable (E.g. coal) to export goods on which there is no levy of compensation
cess (E.g. aluminium). For the period July, 2017 to May, 2018, no ITC is availed
of the compensation cess paid on the inputs received during this period. ITC
is only availed of the CGST, SGST/UTGST or IGST charged on the invoices for

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these inputs. This ITC is utilized for payment of IGST on export of goods. Vide
Circular No. 45/19/2018-GST dated 30.05.2018, it was clarified that refund of
accumulated ITC of compensation cess on account of zero-rated supplies
made under Bond/Letter of Undertaking is available even if the exported
product is not subject to levy of cess. After the issuance of this Circular, the
registered person decides to start exporting under bond/LUT without
payment of tax. He also decides to avail (through the return in FORM GSTR-
3B) the ITC of compensation cess, paid on the inputs used in the months of
July, 2017 to May, 2018, in the month of July, 2018. The registered person then
goes on to file a refund claim for ITC accumulated on account of exports for
the month of July, 2018 and includes the said accumulated ITC for the month
of July, 2018. How should the amount of compensation cess to be refunded
be calculated?
Clarification: In the instant case, refund on account of compensation cess is
to be recomputed as if the same was available in the respective months in
which the refund of unutilized credit of CGST/SGST/UTGST/IGST was
claimed on account of exports made under LUT/Bond. If the aggregate of
these recomputed amounts of refund of compensation cess is less than or
equal to the eligible refund of compensation cess calculated in respect of the
month in which the same has actually been claimed, then the aggregate of
the recomputed refund of compensation cess of the respective months
would be admissible. Further, the recomputed amount of eligible refund (of
compensation cess) in respect of past periods, as aforesaid, would not be
admissible in respect of consignments exported on payment of IGST. This
process would be applicable for application for refund of compensation cess
(not claimed earlier) in respect of the past period.
b) Issue: A registered person uses coal for the captive generation of electricity
which is further used for the manufacture of goods (say aluminium) which are
exported under Bond/Letter of Undertaking without payment of duty. Refund
claim is filed for accumulated Input Tax Credit of compensation cess paid on
coal. Can the said refund claim be rejected on the ground that coal is used for
the generation of electricity which is an intermediate product and not the final
product which is exported and since electricity is exempt from GST, the ITC
of the tax paid on coal for generation of electricity is not available?
Clarification: There is no distinction between intermediate goods or services
and final goods or services under GST. Inputs have been clearly defined to
include any goods other than capital goods used or intended to be used by a
supplier in the course or furtherance of business. Since coal is an input used
in the production of aluminium, albeit indirectly through the captive
generation of electricity, which is directly connected with the business of the
registered person, input tax credit in relation to the same cannot be denied.
c) Issue: A registered person avails ITC of compensation cess (say, of ₹ 100/-)
paid on purchases of coal every month. At the same time, he reverses a
certain proportion (say, half i.e. ₹ 50/-) of the ITC of compensation cess so
availed on purchases of coal which are used in making zero rated outward
supplies. Both these details are entered in the FORM GSTR-3B filed for the
month as a result of which an amount of ₹ 50/- only is credited in the
electronic credit ledger. The reversed amount (₹ 50/-) is then shown as a
'cost' in the books of accounts of the registered person. However, the
registered person declares ₹ 100/- as 'Net ITC' and uses the same in
calculating the maximum refund amount which works out to be ₹ 50/-
(assuming that export turnover is half of total turnover). Since both the
balance in the electronic credit ledger at the end of the tax period for which
the claim of refund is being filed and the balance in the electronic credit
ledger at the time of filing the refund claim is ₹ 50/- (assuming that no other
debits/credits have happened), the system will proceed to debit ₹ 50/- from

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the ledger as the claimed refund amount. The question is whether the proper
officer should sanction ₹ 50/- as the refund amount or ₹ 25/- (i.e. half of the
ITC availed after adjusting for reversals)?
Clarification: ITC which is reversed cannot be held to have been 'availed' in
the relevant period. Therefore, the same cannot be part of refund of
unutilized ITC on account of zero-rated supplies. Moreover, the reversed ITC
has been accounted as a cost which would have reduced the income tax
liability of the claimant. Therefore, the same amount cannot, at the same
time, be refunded to him/her in the ratio of export turnover to total turnover.
However, if the said reversed amount is again availed in a later tax period,
subject to the restriction under section 16(4) of the CGST Act, it can be
refunded in the ratio of export turnover to total turnover in that tax period in
the same manner as detailed in para 9(a) above. This is subject to the
restriction that the accounting entry showing the said ITC as cost is also
reversed.

Non-consideration of ITC of GST paid on invoices of earlier tax period availed in subsequent
tax period:

10. Presently, ITC is reflected in the electronic credit ledger on the basis of the amount of
the ITC availed on self-declaration basis in FORM GSTR-3B for a particular tax
period. It may happen that the goods purchased against a particular tax invoice
issued in a particular month, say August 2017, may be declared in the FORM GSTR-
3B filed for a subsequent month, say September 2017. This is inevitable in cases
where the supplier raises an invoice, say in August, 2017, and the goods reach the
recipient’s premises in September, 2017. Since GST law mandates that ITC can be
availed only after the goods are received, the recipient can only avail the ITC on such
goods in the FORM GSTR-3B filed for the month of September, 2017. However, it has
been observed that field officers are excluding such invoices from the calculation of
refund of unutilized ITC filed for the month of September, 2017.

11. In this regard, it is clarified that “Net ITC‟ as defined in rule 89(4) of the CGST Rules
means input tax credit availed on inputs and input services during the relevant
period. Relevant period means the period for which the refund claim has been filed.
Input tax credit can be said to have been „availed‟ when it is entered into the
electronic credit ledger of the registered person. Under the current dispensation, this
happens when the said taxable person files his/her monthly return in FORM GSTR-
3B. Further, section 16(4) of the CGST Act stipulates that ITC may be claimed on or
before the due date of filing of the return for the month of September following the
financial year to which the invoice pertains or the date of filing of annual return,
whichever is earlier. Therefore, the input tax credit of invoices issued in August, 2017,
„availed‟ in September, 2017 cannot be excluded from the calculation of the refund
amount for the month of September, 2017.

Misinterpretation of the meaning of the term “inputs”:

12. It has been represented that on certain occasions, departmental officers do not
consider ITC on stores and spares, packing materials, materials purchased for
machinery repairs, printing and stationery items, as part of Net ITC on the grounds
that these are not directly consumed in the manufacturing process and therefore, do
not qualify as input. There are also instances where stores and spares charged to
revenue are considered as capital goods and therefore the ITC availed on them is not
included in Net ITC, even though the value of these goods has not been capitalized in
his books of account by the claimant.

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13. In relation to the above, it is clarified that the input tax credit of the GST paid on
inputs shall be available to a registered person as long as he/she uses or intends to
use such inputs for the purposes of his/her business and there is no specific
restriction on the availment of such ITC anywhere else in the GST Act. The GST paid
on inward supplies of stores and spares, packing materials etc. shall be available as
ITC as long as these inputs are used for the purpose of the business and/or for
effecting taxable supplies, including zero-rated supplies, and the ITC for such inputs
is not restricted under section 17(5) of the CGST Act. Further, capital goods have been
clearly defined in section 2(19) of the CGST Act as goods whose value has been
capitalized in the books of account and which are used or intended to be used in the
course or furtherance of business. Stores and spares, the expenditure on which has
been charged as a revenue expense in the books of account, cannot be held to be
capital goods.

Refund of accumulated ITC of input services and capital goods arising on account of inverted
duty structure:

14. Section 54(3) of the CGST Act provides that refund of any unutilized ITC may be
claimed where the credit has accumulated on account of rate of tax on inputs being
higher than the rate of tax on output supplies (other than nil rated or fully exempt
supplies). Further, section 2(59) of the CGST Act defines inputs as any goods other
than capital goods used or intended to be used by a supplier in the course or
furtherance of business. Thus, inputs do not include services or capital goods.
Therefore, clearly, the intent of the law is not to allow refund of tax paid on input
services or capital goods as part of refund of unutilized input tax credit. Accordingly,
in order to align the CGST Rules with the CGST Act, notification No. 26/2018-Central
Tax dated 13.06.2018 was issued wherein it was stated that the term Net ITC, as used
in the formula for calculating the maximum refund amount under rule 89(5) of the
CGST Rules, shall mean input tax credit availed on inputs during the relevant period
other than the input tax credit availed for which refund is claimed under sub-rules
(4A) or (4B) or both. In view of the above, it is clarified that both the law and the
related rules clearly prevent the refund of tax paid on input services and capital
goods as part of refund of input tax credit accumulated on account of inverted duty
structure.

Circular No. 94/13/2019-GST

Clarifications on refund related issues under GST

Sl. No. Issue Clarification

1. Certain registered persons have a) As a one-time measure to resolve
reversed, through return in FORM this issue, refund of accumulated
GSTR-3B filed for the month of August, ITC on account of inverted tax
2018 or for a subsequent month, the structure, for the period(s) in which
accumulated input tax credit (ITC) there is reversal of the ITC required
required to be lapsed in terms of to be lapsed in terms of the said
notification No. 20/2018Central Tax notification, is to be claimed under
(Rate) dated 26.07.2018 read with the category “any other” instead of
circular No. 56/30/2018-GST dated under the category “refund of
24.08.2018 (hereinafter referred to as unutilized ITC on account of
the “said notification”). Some of these accumulation due to inverted tax
registered persons, who have structure” in FORM GST RFD-01A. It
attempted to claim refund of is emphasized that this application
accumulated ITC on account of for refund should relate to the same
inverted tax structure for the same tax period in which such reversal
period in which the ITC required to be has been made.
lapsed in terms of the said notification

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has been reversed, are not able to b) The application shall be

claim refund of accumulated ITC to the accompanied by all statements,
extent to which they are so eligible. declarations, undertakings and
This is because of a validation check on other documents which are
the common portal which prevents the statutorily required to be submitted
value of input tax credit in Statement with a “refund claim of unutilized
1A of FORM GST RFD-01Afrom being ITC on account of accumulation
higher than the amount of ITC availed due to inverted tax structure”. On
in FORM GSTR-3B of the relevant receiving the said application, the
period minus the value of ITC reversed proper officer shall himself
in the same period. This results in calculate the refund amount
registered persons being unable to admissible as per rule 89(5) of
claim the full amount of refund of Central Goods and Services Tax
accumulated ITC on account of Rules, 2017 (hereinafter referred to
inverted tax structure to which they as “CGST Rules”), in the manner
might be otherwise eligible. What is detailed in para 3 of Circular No.
the solution to this problem? 59/33/2018-GST dated 04.09.2018.
After calculating the admissible
refund amount, as described above,
and scrutinizing the application for
completeness and eligibility, if the
proper officer is satisfied that the
whole or any part of the amount
claimed is payable as refund, he
shall request the taxpayer, in
writing, to debit the said amount
from his electronic credit ledger
through FORM GST DRC-03. Once
the proof of such debit is received
by the proper officer, he shall
proceed to issue the refund order in
FORM GST RFD-06 and the
payment advice in FORM GST RFD-
05.
c) All refund applications for unutilized
ITC on account of accumulation
due to inverted tax structure for
subsequent tax period(s) shall be
filed in FORM GST RFD-01A under
the category “refund of unutilized
ITC on account of accumulation
due to inverted tax structure”.
2. The clarification at Sl. No. 1 above It is hereby clarified that all those
applies to registered persons who have registered persons required to make
already reversed the ITC required to be the reversal in terms of the said
lapsed in terms of the said notification notification and who have not yet done
through return in FORM GSTR-3B. so, may reverse the said amount
What about those registered persons through FORM GST DRC-03 instead of
who are yet to perform this reversal? through FORM GSTR-3B.
3. What shall be the consequence if any a) As the registered person has
registered person reverses the amount reversed the amount of credit to be
of credit to be lapsed, in terms the said lapsed in the return in FORM GSTR-
notification, through the return in 3B for a month subsequent to the
FORM GSTR-3B for any month month of August, 2018 or through
subsequent to August, 2018 or through FORM GST DRC-03 subsequent to
FORM GST DRC-03 subsequent to the the due date of filing of the return in
due date of filing of the return in FORM FORM GSTR-3B for the month of

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GSTR-3B for the month of August, August, 2018, he shall be liable to

2018? pay interest under sub-section (1)
of section 50 of the CGST Act on
the amount which has been
reversed belatedly. Such interest
shall be calculated starting from the
due date of filing of return in FORM
GSTR-3B for the month of August,
2018 till the date of reversal of said
amount through FORM GSTR-3B or
through FORM GST DRC-03, as the
case may be.
b) The registered person who has
reversed the amount of credit to be
lapsed in the return in FORM GSTR-
3B for any month subsequent to
August, 2018 or through FORM GST
DRC-03 subsequent to the due
date of filing of the return in FORM
GSTR-3B for the month of August,
2018 would remain eligible to claim
refund of unutilized ITC on account
of accumulation due to inverted tax
structure w.e.f. 01.08.2018.
However, such refund shall be
granted only after the reversal of
the amount of credit to be lapsed,
either through FORM GSTR-3B or
FORM GST DRC-03, along with
payment of interest, as applicable.
4. How should a merchant exporter claim a) Rule 89(4B) of the CGST Rules
refund of input tax credit availed on provides that where the person
supplies received on which the claiming refund of unutilized input
supplier has availed the benefit of the tax credit on account of zero-rated
Government of India, Ministry of supplies without payment of tax
Finance, notification No. 40/2017- has received supplies on which the
Central Tax (Rate), dated the 23rd supplier has availed the benefit of
October, 2017, published in the Gazette the said notifications, the refund of
of India, Extraordinary, Part II, Section input tax credit, availed in respect
3, Sub-section (i), vide number G.S.R of such inputs received under the
1320 (E), dated the 23rd October, 2017 said notifications for export of
or notification No. 41/2017-Integrated goods, shall be granted.
Tax (Rate), dated the 23rd October, b) This refund of accumulated ITC
2017, published in the Gazette of India, under rule 89(4B) of the CGST Rules
Extraordinary, Part II, Section 3, shall be applied under the category
Subsection (i), vide number G.S.R “any other” instead of under the
1321(E), dated the 23rd October, 2017 category “refund of unutilized ITC
(hereinafter referred to as the “said on account of exports without
notifications”)? payment of tax” in FORM GST RFD-
01A and shall be accompanied by
all supporting documents required
for substantiating the refund claim
under the category “refund of
unutilized ITC on account of exports
without payment of tax”. After
scrutinizing the application for
completeness and eligibility, if the

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proper officer is satisfied that the

whole or any part of the amount
claimed is payable as refund, he
shall request the taxpayer, in
writing, to debit the said amount
from his electronic credit ledger
through FORM GST DRC-03. Once
the proof of such debit is received
by the proper officer, he shall
proceed to issue the refund order in
FORM GST RFD-06 and the
payment advice in FORM GST RFD-
05.
5. Vide Circular No. 59/33/2018-GST In such cases, the claimant may
dated 04.09.2018, it was clarified that resubmit the refund application
after issuance of a deficiency memo, manually in FORM GST RFD-01A after
the input tax credit is required to be correction of deficiencies pointed out
re-credited through FORM GST RFD- in the deficiency memo, using the
01B and the taxpayer is expected to file same ARN. The proper officer shall
a fresh application for refund. then proceed to process the refund
Accordingly, in several cases, the ITC application as per the existing
amounts were recredited after guidelines. After scrutinizing the
issuance of deficiency memo. application for completeness and
However, it was later represented that eligibility, if the proper officer is
the common portal does not allow a satisfied that the whole or any part of
taxpayer to file a fresh application for the amount claimed is payable as
the same period after issuance of a refund, he shall request the taxpayer,
deficiency memo. Therefore, the in writing, to debit the said amount
matter was re-examined and it was from his electronic credit ledger
subsequently clarified, vide Circular through FORM GST DRC-03. Once the
No. 70/44/2018GST dated 26.10.2018 proof of such debit is received by the
that no re-credit should be carried out officer, he shall proceed to issue the
in such cases and taxpayers should file refund order in FORM GST RFD-06 and
the rectified application, after issuance the payment advice in FORM GST RFD-
of the deficiency memo, under the 05.
earlier ARN only. It was also further
clarified that a suitable clarification
would be issued separately for cases in
which such re-credit has already been
carried out. However, no such
clarification has yet been issued and
several refund claims are pending on
this account.

Circular No. 104/23/2019-GST

Processing of refund applications in FORM GST RFD – 01A submitted by taxpayers wrongly
mapped on the common portal

Doubts have been raised in respect of processing of a refund application by a

jurisdictional tax authority (either Centre or State) to whom the application has been
electronically transferred by the common portal in cases where the said tax authority
is not the one to which the taxpayer has been administratively assigned. The matter
has been examined. In order to ensure uniformity in the implementation of the
provisions of the law across field formations, the Board, in exercise of its powers
conferred by section 168 (1) of the Central Goods and Services Tax Act, 2017

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(hereinafter referred to as “CGST Act”), hereby clarifies the issues in succeeding

paras.

2. It has been reported by the field formations that administrative assignment of some
of the tax payers to the Central or the State tax authority has not been updated on
the common portal in accordance with the decision taken by the respective tax
authorities, in pursuance of the guidelines issued by the GST Council Secretariat, vide
Circular No. 01/2017 dated 20.09.2017, regarding division of taxpayer base between
the Centre and States to ensure Single Interface under GST. For example, a tax payer
M/s XYZ Ltd. was administratively assigned to the Central tax authority but was
mapped to the State tax authority on the common portal.

3. Prior to 31.12.2018, refund applications were being processed only after submission
of printed copies of FORM GST RFD 01A in the respective jurisdictional tax offices.
Subsequent to the issuance of Circular No.79/53/2018-GST dated 31.12.2018, copies
of refund applications are no longer required to be submitted physically in the
jurisdictional tax office. Now, the common portal forwards the refund applications
submitted on the said portal to the jurisdictional proper officer of the tax authority to
whom the taxpayer has been administratively assigned. In case of the example cited
in para 2 above, as the applicant was wrongly mapped with the State tax authority
on the common portal, the application was transferred by the common portal to the
proper officer of the State tax authority despite M/s XYZ Ltd. being administratively
assigned to the Central tax authority. As per para 2(e) of Circular No. 79/53/2018-
GST dated 31.12.2018, the proper officer of the State tax authority should
electronically re-assign the said application to the designated jurisdictional proper
officer. It has, however, been reported that the said re-assignment facility is not yet
available on the common portal.

4. Doubts have been raised as to whether, in such cases, application for refund can at
all be processed by the proper officer of the State tax authority or the Central tax
authority to whom the refund application has been wrongly transferred by the
common portal.

5. The matter has been examined and it is clarified that in such cases, where
reassignment of refund applications to the correct jurisdictional tax authority is not
possible on the common portal, the processing of the refund claim should not be
held up and it should be processed by the tax authority to whom the refund
application has been electronically transferred by the common portal. After the
processing of the refund application is complete, the refund processing authority
may inform the common portal about the incorrect mapping with a request to
update it suitably on the common portal so that all subsequent refund applications
are transferred to the correct jurisdictional tax authority.

Subject to prescribed conditions,

the following classes of persons, when notified,
shall be entitled to claim refund of taxes paid
on notified supplies received by them:
o Any specialized agency of the UN
o Any multilateral financial institution and organization under UN(PI)A, 1947
o Consulate or Embassy of foreign countries
o Any other person notified by the Commissioner
• Such person may make an application for refund
within 6 months

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from the last day of the quarter

in which such supply was received

Notfn. No.: 06/2017 – CT(R) and IT(R)

CSD under the MOD, GOI has been specified as a person who shall be entitled to claim a
refund of 50% of the applicable GST paid by it on all inward supplies of goods received by
it for the purposes of subsequent supply of such goods to the Unit Run Canteens of the CSD
or to the authorized customers of the CSD.

Circular No. 60/ 34/2018-GST

Processing of refund applications filed by CSD

3. Filing Application for Refund:

3.1 Invoice-based refund: It is clarified that the instant refund to be granted to the
CSD is not for the accumulated input tax credit but refund based on the
invoices of the inward supplies of goods received by them.
3.2 Manual filing of claims on a quarterly basis: In terms of rule 95 of the CGST
Rules, the CSD are required to apply for refund on a quarterly basis. Till the
time the online utility for filing the refund claim is made available on the
common portal, the CSD shall apply for refund by filing an application in FORM
GST RFD-10A manually to the jurisdictional tax office. The said form shall be
accompanied with the following documents:
(i) An undertaking stating that the goods on which refund is being
claimed have been received by the CSD;
(ii) A declaration stating that no refund has been claimed earlier against
the invoices on which the refund is being claimed;
(iii) Copies of the valid return filed in FORM GSTR-3B by the CSD for the
period covered in the refund claim;
(iv) Copies of FORM GSTR-2A of the CSD for the period covered in the
refund claim along with the attested hard copies of the invoices on
which refund is claimed but which are not reflected in FORM GSTR-
2A;
(v) Details of the bank account in which the refund amount is to be
credited.

4. Processing and sanction of the refund claim

4.1 Upon receipt of the complete application in FORM GST RFD-10A, an
acknowledgement shall be issued manually within 15 days of the receipt of the
application in FORM GST RFD-02 by the proper officer. In case of any
deficiencies in the requisite documentary evidences to be submitted as
detailed in para 3.2 above, the same shall be communicated to the CSD by
issuing a deficiency memo manually in FORM GST RFD-03 by the proper
officer within 15 days of the receipt of the refund application. Only one
deficiency memo should be issued which should be complete in all respects.
4.2 The proper officer shall validate the GSTIN details on the common portal to
ascertain whether the return in FORM GSTR- 3B has been filed by the CSD. The
proper officer may scrutinize the details contained in FORM RFD-10A, FORM
GSTR-3B and FORM GSTR-2A. The proper officer may rely upon FORM GSTR-
2A as an evidence of the accountal of the supply made by the corresponding
suppliers to the CSD in relation to which the refund has been claimed by the
CSD.
4.3 The proper officer should ensure that the amount of refund sanctioned is 50 %
of the Central tax, State tax, Union territory tax and integrated tax paid on the
supplies received by CSD. The proper officer shall issue the refund sanction/
rejection order manually in FORM GST RFD-06 along with the payment advice
manually in FORM GST RFD-05 for each tax head separately. The amount of

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sanctioned refund in respect of central tax/ integrated tax along with the bank
account details of the CSD shall be manually submitted in the PFMS system by
the jurisdictional Division’s DDO and a signed copy of the sanction order shall
be sent to the PAO for release of the said amount.

5. It is clarified that the CSD will apply for refund with the jurisdictional Central tax/
State tax authority to whom the CSD has been assigned. However, the payment of
the sanctioned refund amount in relation to central tax / integrated tax shall be made
by the Central tax authority while payment of the sanctioned refund amount in
relation to State Tax / Union Territory Tax shall be made by the State tax/ Union
Territory tax authority. It therefore, becomes necessary that the refund order issued
by the proper officer of any tax authority is duly communicated to the concerned
counter-part tax authority within seven days for the purpose of payment of the
remaining sanctioned refund amount. The procedure outlined in para 6.0 of Circular
No.24/ 24/2017-GST dated 21st December 2017 should be followed in this regard.

Notfn. No.: 16/2017 – CT(R) and 13/2017 – IT(R)

The Govt. has notified the following classes of persons for the purposes of Section 55 –
(i) UN or a declared international organization under the UN(PI)A, 1947, and
(ii) Embassies and their officers
subject to the following conditions –
(a) UN or a specified international organization shall be entitled to claim refund of GST
paid on inward supplies subject to a certificate from the UN/ organization stating
that the supplies have been used for official purposes.
(b) Embassies and their officers shall be entitled to claim refund of GST paid on inward
supplies subject to –
(i) that such person is entitled to refund of GST as stipulated in the certificate
issued by the Protocol Division of the MEA based on the principle of
reciprocity,
(ii) that in case of services, the head of the Embassy or any other officer
authorised by him shall furnish an undertaking in original stating that the
supply received is for official purpose or personal use of the officer or his/
her family members.
(iii) that in case of goods, the concerned embassy will produce a certificate that
–
I. the goods have been used by the embassy
II. the goods will not be supplied further or otherwise disposed of
before 3 yrs. from its receipt, and
III. in the event of non-compliance of (I), the embassy will pay back the
refund amount
(iv) in case the Protocol Division, MEA, GOI, withdraws the certificate granted, it
shall communicate such withdrawal to the embassy,
(v) the refund of GST facility shall not be available from the date of withdrawal
of such certificate.

Circular No. 68/ 42/2018-GST

Notifications issued under CGST Act, 2017 applicable to Goods and Services Tax
(Compensation to States) Act, 2017

2. Section 55 of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as
‘CGST Act’) provides that the Government may, on the recommendation of the
council, specify UN agencies and organizations notified under the UNPI Act 1947,
Consulates, Embassies of foreign countries and any other person to be entitled to
claim refund of the taxes paid on the notified supplies of goods and services, subject
to such conditions and restrictions as may be prescribed. Notification No. 16/2017-
Central Tax (Rate) dated 28.06.2017 has been issued specifying UN and specified

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international organizations, foreign diplomatic missions or consular posts in India, or

diplomatic agents or career consular officers posted therein for the purposes of the
said section.

3. Section 11 of the Goods and Services Tax (Compensation to States) Act,

2017(hereinafter referred to as ‘the Compensation Cess Act’), provides that provisions
of CGST Act and IGST Act apply in relation to levy and collection of Compensation
Cess. Further, section 9(2) of the Compensation Cess Act provides that for all the
purposes of claiming refunds, except the form to be filed, the provisions of the CGST
Act and the rules made thereunder, shall apply in relation to the levy and collection
of Compensation Cess. Therefore, notifications issued under the CGST Act except
those prescribing rate or granting exemptions, are applicable for the purpose of the
Compensation Cess Act.

4. Accordingly, notification No. 16/2017-Central Tax (Rate) dated 28.06.2017 shall be

applicable for the purposes of refund of Compensation Cess to UN and specified
international organizations, foreign diplomatic missions or consular posts in India, or
diplomatic agents or career consular officers posted therein.

5. In view of the above, it is clarified that UN and specified international organizations,

foreign diplomatic missions or consular posts in India, or diplomatic agents or career
consular officers posted therein, having being specified under section 55 of the CGST
Act, 2017, are entitled to refund of Compensation Cess payable on intra-State and
inter-State supply of goods or services or both received by them subject to the same
conditions and restrictions, mutatis mutandis, as prescribed in Notification No.
16/2017-Central Tax(Rate) dated 28.06.2017.

(1) Every notified UIN holder claiming refund of the taxes paid on his inward supplies,
shall furnish the details of such supplies in FORM GSTR-11 along with application for
such refund claim.

(2) Every person who has been issued a UIN for purposes other than refund shall also
furnish the details of inward supplies of taxable goods/ services as may be required
by the PO in FORM GSTR-11

(1) Every notified UIN holder claiming refund of the taxes paid on his inward supplies,
shall apply for refund in FORM GST RFD-10 once in every quarter, along with FORM
GSTR-11.

(2) An acknowledgement for receipt of the application shall be issued in FORM GST
RFD-02

(3) The refund shall be available if –

(a) the inward supplies have been received from a registered person against a
tax invoice,
(b) name and GSTIN/ UIN of the applicant is mentioned in the tax invoice, and
(c) other notified restrictions and conditions are satisfied.

(4) Rule 92 shall apply mutatis mutandis

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(5) In case any conflict between any express provision in a treaty/ international
agreement and the provisions of this Chapter arises, the treaty/ agreement shall
prevail.

(1) Retail outlet established in departure area of an international airport, beyond the
immigration counters, supplying indigenous goods to an outgoing international
tourist who is leaving India shall be eligible to claim refund of tax paid by it on inward
supply of such goods.

(2) Retail outlet claiming such refund shall furnish refund application in FORM GST RFD –
10B on a monthly/ quarterly basis.

(3) The self-certified compiled information of invoices issued for the supply made during
the month/ quarter, along with concerned purchase invoice, shall be submitted along
with the refund application.

(4) The refund of tax paid by the said retail outlet shall be available if –
(a) the inward supplies of goods were received by the said outlet from a
registered person against a tax invoice,
(b) the said goods were supplied by the said outlet to an outgoing international
tourist against forex without charging any tax,
(c) name and GSTIN of the retail outlet is mentioned in the tax invoice for the
inward supply, and
(d) other specified restrictions/ conditions are satisfied.

(5) The provisions of rule 92 shall apply for the sanction and payment of refund under
this rule mutatis mutandis.

NOTE: “Outgoing international tourist” means a person not normally resident in India, who
enters India for a stay ≤ 6 months for legitimate non-immigrant purposes.

Circular No. 106/25/2019-GST

Refund of taxes paid on inward supply of indigenous goods by retail outlets established at
departure area of the international airport beyond immigration counters when supplied to
outgoing international tourist against foreign exchange

The Government vide notification no. 11/2019-Central Tax (Rate), 10/2019-Integrated

Tax (Rate) and 11/2019-Union territory Tax (Rate) all dated 29.06.2019 issued in
exercise of powers under section 55 of the Central Goods and Services Tax Act, 2017
(hereinafter referred to as the „CGST Act‟) has notified that the retail outlets
established at departure area of the international airport beyond immigration
counters shall be entitled to claim refund of all applicable Central tax, Integrated tax,
Union territory tax and Compensation cess paid by them on inward supplies of
indigenous goods received by them for the purposes of subsequent supply of goods
to outgoing international tourists i.e. to a person not normally resident in India, who
enters India for a stay of not more than six months for legitimate non-immigrant
purposes against foreign exchange (hereinafter referred to as the “eligible
passengers”). Identical notifications have been issued by the State or Union territory
Governments under the respective State Goods and Services Tax Acts (hereinafter
referred to as the “SGST Act”) or Union Territory Goods and Services Tax Acts

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(hereinafter referred to as the “UTGST Act”) also to provide for refund of applicable
State or Union territory tax.

2. With a view to ensuring expeditious processing of refund claims, the Board, in

exercise of its powers conferred under section 168(1) of the CGST Act, hereby
specifies the conditions, manner and procedure for filing and processing of such
refund claims in succeeding paras.

3. Duty Free Shops and Duty Paid Shops: - It has been recognized that international
airports, house retail shops of two types – ‘Duty Free Shops’ (hereinafter referred to
as “DFS”) which are point of sale for goods sourced from a warehoused licensed
under Section 58A of the Customs Act, 1962 (hereinafter referred to as the “Customs
Act”) and duty paid indigenous goods and ‘Duty Paid Shops’ (hereinafter referred to
as “DPS”) retailing duty paid indigenous goods.

4. Procurement and supply of imported / warehoused goods: - The procedure for

procurement of imported / warehoused goods is governed by the provisions
contained in Customs Act. The procedure and applicable rules as specified under the
Customs Act are required to be followed for procurement and supply of such goods.

5. Procurement of indigenous goods: - Under GST regime there is no special procedure

for procurement of indigenous goods for sale by DFS or DPS. Therefore, all
indigenous goods would have to be procured by DFS or DPS on payment of
applicable tax when procured from the domestic market.

6. Supply of indigenous goods by DFS or DPS established at departure area of the

international airport beyond immigration counters (hereinafter referred to as “the
retail outlets”) to eligible passengers: The sale of indigenous goods procured from
domestic market by retail outlets to an eligible passenger is a “supply” under GST law
and is subject to levy of Integrated tax but the same has been exempted vide
notification No. 11/2019-Integrated Tax (Rate) and 01/2019-Compensation Cess
(Rate) both dated 29.06.2019. Therefore, retail outlets will supply such indigenous
goods without collecting any taxes from the eligible passenger and may apply for
refund as per procedure explained in succeeding paragraphs.

7. Who is eligible for refund:

7.1 Registration under CGST Act: The retail outlets applying for refund shall
be registered under the provisions of section 22 of the CGST Act read
with the rules made thereunder and shall have a valid GSTIN.
7.2 Location of retail outlets: Such retail outlets shall be established at
departure area of the international airport beyond immigration counters
and shall be entitled to claim a refund of all applicable Central tax, State
tax, Integrated tax, Union territory tax and Compensation cess paid by
them on all inward supplies of indigenous goods received for the
purposes of subsequent supply of such goods to the eligible passengers.

8. Procedure for applying for refunds:

8.1 Maintenance of Records: The records with respect to duty paid
indigenous goods being brought to the retail outlets and their supplies to
eligible passengers shall be maintained as per Annexure A in electronic
form. The data shall be kept updated, accurate and complete at all times
by such retail outlets and shall be available for inspection/verification of
the proper officer of central tax at any time. The electronic records must
incorporate the feature of an audit trail, which means a secure, computer
generated, time stamped record that allows for reconstruction of the
course of events relating to the creation, modification or deletion of an

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electronic record and includes actions at the record or system level, such
as, attempts to access the system or delete or modify a record.
8.2 Invoice-based refund: It is clarified that the refund to be granted to retail
outlets is not on account of the accumulated input tax credit but is refund
based on the invoices of the inward supplies of indigenous goods
received by them. As stated in para 6 above, the supply made by such
retail outlets to eligible passengers has been exempted vide notification
No. 11/2019-Integrated Tax (Rate) and 01/2019-Compensation Cess (Rate)
both dated 29.06.2019 and therefore such retail outlets will not be eligible
for input tax credit of taxes paid on such inward supplies and the same
will have to be reversed in accordance the provisions of the CGST Act
read with the rules made thereunder. It is also clarified that no refund of
tax paid on input services, if any, will be granted to the retail outlets.
8.3 Any supply made to an eligible passenger by the retail outlets without
payment of taxes by such retail outlets shall require the following
documents / declarations:
(i) Details of the Passport (via Passport Reading Machine);
(ii) Details of the Boarding Pass (via a barcode scanning
reading device);
(iii) A passenger declaration as per Annexure B;
(iv) A copy of the invoice clearly evidencing that no tax was
charged from the eligible passenger by the retail outlet.
8.4 The retail outlets will be required to prominently display a notice that
international tourists are eligible for purchase of goods without payment
of domestic taxes.
8.5 Manual filing of refund claims: In terms of rule 95A of the Central Goods
and Services Tax Rules, 2017 (hereinafter referred to as the „CGST Rules‟)
as inserted vide notification No. 31/2019-Central Tax dated 28.06.2019,
the retail outlets are required to apply for refund on a monthly or
quarterly basis depending upon the frequency of furnishing of return in
FORM GSTR-3B. Till the time the online utility for filing the refund claim is
made available on the common portal, these retail outlets shall apply for
refund by filing an application in FORM GST RFD-10B , as inserted vide
notification No. 31/2019-Central Tax dated 28.06.2019 manually to the
jurisdictional proper officer. The said refund application shall be
accompanied with the following documents:
(i) An undertaking by the retail outlets stating that the
indigenous goods on which refund is being claimed have
been received by such retail outlets;
(ii) An undertaking by the retail outlets stating that the
indigenous goods on which refund is being claimed have
been sold to eligible passengers;
(iii) Copies of the valid return furnished in FORM GSTR – 3B by
the retail outlets for the period covered in the refund
claim;
(iv) Copies of FORM GSTR-2A for the period covered in the
refund claim; and
(v) Copies of the attested hard copies of the invoices on
which refund is claimed but which are not reflected in
FORM GSTR-2A.

9. Processing and sanction of the refund claim:

9.1 Upon receipt of the complete application in FORM GST RFD-10B, an
acknowledgement shall be issued manually by the proper officer within
15 days of the receipt of application in FORM GST RFD-02. In case of any
deficiencies or any additional information is required, the same shall be
communicated to the retail outlets by issuing a deficiency memo

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manually in FORM GST RFD-03 by the proper officer within 15 days of the
receipt of the refund application. Only one deficiency memo should be
issued against one refund application which is complete in all respects.
9.2 The proper officer shall validate the GSTIN details on the common portal
to ascertain whether the return in FORM GSTR- 3B has been filed by the
retail outlets. The proper officer may scrutinize the details contained in
FORM RFD-10B, FORM GSTR-3B and FORM GSTR-2A. The proper officer
may rely upon FORM GSTR-2A as an evidence of the accountal of the
supply received by them in relation to which the refund has been claimed
by the retail outlets. Normally, officers are advised not to call for hard
copies of invoices or details contained in Annexure A. As clarified in
clause (v) of Para 8.5 above, it is reiterated that the retail outlets would be
required to submit hard copies of only those invoices of inward supplies
that have not been reflected in FORM GSTR-2A.
9.3 The proper officer shall issue the refund order manually in FORM GST
RFD-06 along with the manual payment advice in FORM GST RFD-05 for
each head i.e., Central tax/State tax/Union territory tax/Integrated
tax/Compensation Cess. The amount of sanctioned refund along with the
bank account details of the retail outlets shall be manually submitted in
the PFMS system by the jurisdictional Division‟s DDO and a signed copy
of the sanction order shall be sent to the PAO for disbursal of the said
amount.
9.4 Where any refund has been made in respect of an invoice without the tax
having been paid to the Government or where the supply of such goods
was not made to an eligible passenger, such amount refunded shall be
recovered along with interest as per the provisions contained in the
section 73 or section 74 of the CGST Act, as the case may be.
9.5 It is clarified that the retail outlets will apply for refund with the
jurisdictional Central tax/State tax authority only, however, the payment
of the sanctioned refund amount in relation to Central tax / Integrated tax
/ Compensation Cess shall be made by the Central tax authority while
payment of the sanctioned refund amount in relation to State Tax / Union
Territory Tax shall be made by the State tax/Union Territory tax authority.
It therefore becomes necessary that the refund order issued by the
proper officer of Central Tax is duly communicated to the concerned
counter-part tax authority within seven days for the purpose of disbursal
of the remaining sanctioned refund amount. The procedure outlined in
para 6.0 of Circular No.24/24/2017-GST dated 21stDecember 2017 should
be followed in this regard.

10. The scheme shall be effective from 01.07.2019 and would be applicable in respect of
all supplies made to eligible passengers after the said date. In other words, retail
outlets would be eligible to claim refund of taxes paid on inward supplies of
indigenous goods received by them even prior to 01.07.2019 as long as all the
conditions laid down in Rule 95A of the CGST Rules and this circular are fulfilled.

(1) If any tax ordered for refund is not paid within 60 days
from the date of receipt of application
an interest @ 6% shall be payable [Notfn. No.: 13/2017 – CT and 06/2017 - IT]
from the date immediately after the expiry of the 60 days
till the date of refund.
• However, in case such refund arises
from a final order passed by any adjudicating authority

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or an appellate authority/ tribunal or court

the rate of interest shall be 9% [Notfn. No.: 13/2017 – CT and 06/2017 - IT]
• In case such order is against
an order passed by the PO u/s 54(5),
the former shall be deemed to be an order passed under the said section.

Section 56 of the CGST Act, 2017 specifies that if any tax ordered to be refunded after the
order of an Appellate Authority is not refunded within 60 days from the date of application
filed consequent to such order, interest as such rate not exceeding ……………… shall be payable
in respect of such refund.
(A) 90%
(B) 6%
(C) 12%
(D) 18%
[CS-Exec, Jun 2018]

(B) 6%

Divy Trader obtained permission for provisional assessment and supplied three
consignments of furniture on 28th April, 2018. The tax payment on provisional basis was
made in respect of all the three consignments on 20th May, 2018.
Consequent to the final assessment order passed by the Assistant Commissioner on 21st
June, 2018, a tax of ₹ 1,20,000 and ₹ 1,50,000 became refundable on 1st and 3rd
consignments, whereas a tax of ₹ 1,20,000 became due on 2nd consignment. Divy Trader
applies for the refund of the tax on 1st and 3rd consignments on 12th July, 2018 and pays the
tax due on 2nd consignment on the same day. Tax was actually refunded to it of 1 st
consignment on 8th September, 2018, whereas of 3rd consignment on 18th September, 2018.
Customers of Divy Trader who purchased the consignments have not taken Input Tax
Credit (ITC).
Determine the interest payable and receivable, if any, under CGST Act, 2017 by Divy
Trader.
[CA-Final, Nov 2018]

1st consignment = No interest

2nd consignment = ₹ 1,20,000 × 18% × 53/365 = ₹ 3,136
3rd consignment = ₹ 1,50,000 × 6% × 8/365 = ₹ 197

Y Ltd. exported service valued at US$ 100,000. Supply of service was completed on 15th
November 2017. Payment for this service was received on 30th December 2017. Payment for
this service was received on 30th December 2017. Refund claim was filed by Y Ltd. in
respect of tax paid on inputs and input services for ₹ 6,00,000 on 31st January, 2018. The
refund claim was sanctioned on 30th April, 2018. What is the amount of refund Y Ltd. will
get in accordance with law? What is the relevant date and rate of interest as per GST law?
[CA-Final, Nov 2018]

₹ 6,00,000. 30 December 2017 and 6%

Where any interest is due and payable to the applicant, the PO shall make an order and issue
a payment advice order in FORM GST RFD-05 for the sanctioned amount and the same shall
be credited to the bank account specified in the application for refund.
This form shall specify –
• the amount of delayed refund, and

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• the period of delay for which interest is payable

The Government shall constitute a CWF,

and the following amounts shall be credited to the Fund
in the prescribed manner –
(a) The amount referred in Section 54(5)
(b) Any income from investment of the amount credited to the Fund
(c) Other money received

Consumer Welfare Fund has been constituted by the Government of India and as per
section 57 of the CGST Act, 2017, the following amounts will be credited to this fund:
(i) amount referred to in section 54(5)
(ii) refund of tax in pursuance of section 77
(iii) income from investment of the fund amount
(iv) refund of unutilized input tax credit
(A) (ii) and (iii)
(B) (i) and (iii)
(C) (i), (ii) and (iv)
(D) All the four above
[CS-Exec, Dec 2018]

(C) (i) and (iii)

(1) All sums credited to the Fund

shall be utilized by the Government for welfare of consumers
in the prescribed manner.

(2) The Government or the authority specified by it

shall maintain proper accounts and relevant records
and prepare an annual statement of accounts
in consultation with the CAG of India.

(1) The following amounts shall be credited to the CWF –

(a) Duty/ CGST/ SGST/ IGST/ UTGST/ CC
(b) Income from investment
(c) Any other amount
as per
o Section 12C(2) of the CEA, 1944
o Section 57 of the CGSTA, 2017
Moreover, an amount equivalent to 50% of IGST determined u/s 54(5)
shall be deposited in the CWF.
Further, an amount equivalent to 50% of CC determined u/s 54(5)
shall be deposited in the CWF.

(2) Any credited amount ordered to be paid to any claimant by orders of the PO/ AA/
court shall be paid from the CWF

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 GST Simplified™ Ready Reckoner for Students and Professionals

(3) The accounts of the CWF shall be audited by the CAG of India.

(4) The Govt. shall order to constitute a Standing Committee with a Chairman, a Vice-
Chairman, a Member Secretary and other members to recommend for proper
utilization of the CWF for welfare of consumers.

(5) (a) The Committee shall generally meet 4 times in a year.

(b) The Committee shall meet at such time and place as the Chairman/ Vice-
chairman may deem fit
(c) The meeting shall be presided over by the Chairman/ Vice-chairman
(d) At least 10 days’ notice shall be given to call the meeting
(e) The notice shall specify the place, date and hour of the meeting
and shall contain statement of business to be transacted.
(f) No proceeding of the Committee shall be valid,
unless it is presided over by the Chairman/ Vice-chairman
and attended by at least 3 other members.

(6) The Committee shall have powers –

o to require any applicant to get registered with any authority specified by the
CG.
o to require any applicant to produce books, accounts, documents, instruments
or commodities in his custody/ control
before a duly authorized officer of CG/ SG
that may be necessary for proper evaluation of the application
o to require any applicant to allow any authorised officer of CG/ SG
to enter and inspect the premises where consumer welfare activities are
claimed to be carried on
o to get the accounts of the applicant audited in order to ensure proper
utilization of the grant.
o in case of any default or suppression of material information,
to require any applicant to refund the sanctioned grant in lump-sum and get
prosecuted under the CGSTA, 2017 or CEA, 1944
o to recover any sum due from any applicant as per the CGSTA, 2017 or CEA,
1944
o to require any applicant to submit a periodical report indicating proper
utilization of the grant
o to reject any application due to factual inconsistency or inaccuracy in
material particulars
o to recommend min, grant to be given to an applicant after
considering his financial status, and importance and utility of the nature of
activity
and ensuring the proper utilization of the grant
o to identify and recommend beneficial and safe sectors for the purpose of
investments out of the CWF
o to relax the conditions required to be fulfilled by an applicant during the
period of engagement in consumer welfare activities.
o to make guidelines for the management and administration of the CWF.

(7) The Committee shall not consider an application

unless it has been inquired into by the Member Secretary
and accordingly recommended for consideration.

(7A) The Committee shall make 50% of the amount credited to the CWF each yr. available

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to the CBIC for publicity/ consumer awareness on GST,

provided the availability of funds for consumer welfare activities of the DCA ≥ ₹ 25
crores p.a.

(8) The Committee shall make recommendations –

o for giving grants to any applicant,
o for investing the CWF,
o for giving grants on selective basis in order to reimburse legal expenses
incurred by a complainant in a consumer dispute, after its final adjudication,
o for giving grants for any other purpose recommended by the CCPC and
considered appropriate by the Committee.
o for giving upto 50% of the funds credited each year for publicity/ consumer
awareness on GST
considering that the availability of funds for consumer welfare activities of the
DCA ≥ ₹ 25 crores p.a.
NOTE: ‘applicant’ means
(i) the CG/ SG
(ii) regulatory authorities or autonomous bodies
constitutes under an Act of Parliament or State/ UT legislature
(iii) any agency/ organization engaged in consumer welfare activities for at least 3
yrs. registered under any law,
(iv) village/ mandal/ samiti level consumer co-operatives especially Women, SC
and ST
(v) an educational/ research institution incorporated in India by an Act of
Parliament or State/ UT legislature
or other educational institutions established by an Act of Parliament
or deemed Universities declared under UGC Act, 1956
and which has consumers studies as part of it curriculum
for at least 3 yrs.
(vi) a complainant as defined u/s 2(1)(b) of CPA, 1986
who applies for reimbursement of legal expenses incurred by him
in a case instituted by him in a consumer dispute redressal agency.

• Adjudicating authority [Sec. 2(4) of CGSTA]: means any authority, appointed or

authorised to pass any order or decision under this Act, but does not include the
Central Board of Excise and Customs, the Revisional Authority, the Authority for
Advance Ruling, the Appellate Authority for Advance Ruling, the Appellate Authority,
the Appellate Tribunal and the Authority referred to in sub-section (2) of section 171.
• Appellate tribunal [Sec. 2(9) of CGSTA]: means the Goods and Services Tax Appellate
Tribunal constituted under section 109.
• Drawback [Sec. 2(42) of CGSTA]: in relation to any goods manufactured in India and
exported, means the rebate of duty, tax or cess chargeable on any imported inputs
or on any domestic inputs or input services used in the manufacture of such goods.
• Revisional authority [Sec. 2(99) of CGSTA]: means an authority appointed or authorised for
revision of decision or orders as referred to in section 108.

Briefly define the term “Adjudicating Authority” as per CGST Act, 2017.
[CS-Prof, Jun 2018]

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CGSTA, 2017
• Section 51: Tax deduction at source
• Section 52: Collection of tax at source

(1) Overruling anything to the contrary in the CGSTA, the Government may mandate –
(a) A CG/ SG department/ establishment,
(b) A local authority,
(c) A Government agency, or
(d) Persons/ category of persons notified by the Government
to deduct tax at source @ 1% from the payment to a supplier
of taxable supplies if the total value of such contractual supply (excluding GST and CC)
exceeds ₹ 2,50,000.
However, no TDS in the following case:
State/ UT A State/ UT B

Notfn. No.: 50/2018 – CT

The following persons have been notified for the purpose of Section 51(1)(d) of the CGSTA,
2017 –
(a) An authority/ board/ any other body –
(i) set up by an Act of Parliament or a State Legislature, or
(ii) established by any Government,
with 51% or more participation by way of equity/ control, to carry out any function,
(b) Society established by the CG/ SG/ LA under the SRA, 1860,
(c) PSUs
However, the said notification shall not apply to the authorities under the MoD u/s 51(1)(a)
which have not been specified.
Moreover, it shall not be applicable to a supply from a PSU to another PSU, whether or not
a distinct person.
Further, this notification shall not apply to supplies amongst the persons specified u/s
51(1)(a), (b), (c) and (d).

Section 51 of the CGST Act, 2017 mandates deduction of tax at source (TDS) at a specified
percentage by the Government or Local Authorities from the payments made or credited to
the supplier where the value of supply under a contract exceeds specified limit. State the
specified percentage of TDS and the threshold limit of taxable goods or services or both
under the contract .........
(A) 0.50% & ₹ 1,00,000
(B) 0.75% & ₹ 1,50,000

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 GST Simplified™ Ready Reckoner for Students and Professionals

(C) 2% & ₹ 5,00,000

(D) 1% & ₹ 2,50,000
[CS-Exec, Dec 2018]

(D) 1% & ₹ 2,50,000

(2) The tax deducted shall be paid to The Government

Month-end
10

(3) The deductor shall furnish a certificate to the deductee

mentioning the following:
o Contract value
o Rate of deduction
o Amount deducted
o Amount paid to the government
o Other prescribed particulars

(4) If any deductor fails to furnish such a certificate

within 5 days of crediting the tax to the Government
the deductor shall be liable to pay late fee of
₹ 100 per day from the expiry of aforementioned 5 days
till the actual payment date
subject to a maximum limit of ₹ 5,000.

(5) The deductee shall claim credit of the TDS

(furnished by the deductor in his periodic return)
in his e-CaL in the prescribed manner.

(1) Every tax deductor shall furnish a return in FORM GSTR-7 within 10 days after the
end of the tax period.

(2) The details furnished by the deductor shall be made available to the deductee
suppliers in FORM GSTR-2A (Part C) and FORM GSTR-4A deductees after the due
date of filing FORM GSTR-7 for claiming the amount of tax deducted in his e-CaL
after validation.

(3) The certificate referred to in section 51(3) shall be made available to the deductee in
FORM GSTR-7A on the basis of FORM GSTR-7 furnished.

State the Form Number and the due date for its filing under CGST Act, 2017 of the return by
a registered person deducting tax at source
[CS-Prof, Jun 2018]

FORM GSTR-7 – 10th of the month succeeding the end of the relevant quarter.

(6) If the deductor fails to pay to the Government the TDS

he shall also pay interest in accordance with Section 50(1)

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 GST Simplified™ Ready Reckoner for Students and Professionals

(7) The default amount shall be determined

in accordance with the provisions of demand and recovery

(8) The refund to the deductor or deductee

on account of excess or erroneous deduction
shall be dealt with in accordance with Section 54.
However, no such refund shall be granted to the deductor
if the deducted amount has been credited to e-CaL of deductee

Circular No. 65/ 39/2018-DOR

Guidelines for Deductions and Deposits of TDS by the deductor under GST

4. For payment process of TDS under GST two options can be followed, which are as
under:
Option I: Generation of challan for every payment made during the month
Option II: Bunching of TDS deducted from the bills on weekly, monthly or any
periodic manner

5. In order to give effect to the above options from 01.10.2018, a process flow of
deduction and deposit of TDS by the DDOs has been finalised in consultation with
CGA for guidance and implementation by Central and State Government Authorities.
The process flow for Option I and Option II are described as under:

Option I – Individual Bill-wise Deduction and its Deposit by the DDO

6. In this option, the DDO will have to deduct as well as deposit the GST TDS for each
bill individually by generating a CPIN (Challan) and mentioning it in the Bill itself.

7. Following process shall be followed by the DDO in this regard:

(i) The DDO shall prepare the Bill based on the Expenditure Sanction. The
Expenditure Sanction shall contain the (a) Total amount, (b) net amount
payable to the Contractor/ Supplier/ Vendor and (c) the 2% TDS amount of
GST.
(ii) The DDO shall login into the GSTN Portal (using his GSTIN) and generate the
CPIN (Challan). In the CPIN he shall have to fill in the desired amount of
payment against one/ many Major Head(s) (CGST/ SGST/ UTGST/ IGST) and
the relevant component (e.g. Tax) under each of the Major Head.
(iii) While generating the CPIN, the DDO will have to select mode of payment as
either (a) NEFT/ RTGS or (b) OTC. In the OTC mode, the DDO will have to
select the Bank where the payment will be deposited through OTC mode.
(iv) The DDO shall prepare the bill on PFMS (in case of Central Civil Ministries of
GoI), similar payment portals of other Ministries/ Departments of GoI or of
State Governments for submission to the respective payment authorities.
(v) In the Bill,
(a) the net amount payable to the Contractor; and
(b) 2% as TDS
will be specified
(vi) In case of NEFT/ RTGS mode, the DDO will have to mention the CPIN
Number (as beneficiary’s account number), RBI (as beneficiary) and the IFSC
Code of RBI with the request to payment authority to make payment in
favour of RBI with these credentials.
(vii) In case of the OTC mode, the DDO will have to request the payment
authority to issue ‘A’ Category Government Cheque in favour of one of the 25
authorized Banks. The Cheque may then be deposited along with the CPIN
with any of branch of the authorized Bank so selected by the DDO.

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 GST Simplified™ Ready Reckoner for Students and Professionals

(viii) Upon successful payment, a CIN will be generated by the RBI/ Authorized
Bank and will be shared electronically with the GSTN Portal. This will get
credited in the electronic Cash Ledger of the concerned DDO in the GSTN
Portal. This can be viewed and the details of CIN can be noted by the DDO
anytime on GSTN portal using his Login credentials.
(ix) The DDO should maintain a Register as per proforma given in Annexure ‘A’ to
keep record of all TDS deductions made by him during the month. This
Record will be helpful at the time of filing Monthly Return (FORM GSTR-7) by
the DDO. The DDO may also make use of the offline utility available on the
GSTN Portal for this purpose.
(x) The DDO shall generate TDS Certificate through the GST Portal in FORM
GSTR-7A after filing of Monthly Return.

Option II - Bunching of deductions and its deposit by the DDO

8. Option-I may not be suitable for DDOs who make large number of payments in a
month as it would require them to make large number of challans during the month.
Such DDOs may exercise this option wherein the DDO will have to deduct the TDS
from each bill, for keeping it under the Suspense Head. However, deposit of this
bunched amount from the Suspense Head can be made on a weekly, monthly or any
other periodic basis.

9. Following process shall be followed by the DDO in this regard:

(i) The DDO shall prepare the Bill based on the Expenditure Sanction. The
Expenditure Sanction shall contain the (a) Total amount, (b) net amount
payable to the Contractor/ Supplier/ Vendor and (c) the 2% TDS amount of
GST.
(ii) The DDO shall prepare the bill on PFMS (in case of Central Civil Ministries of
GoI), similar payment portals of other Ministries/ Departments of GoI or of
State Governments for submission to the respective payment authorities.
(iii) In the Bill, it will be specified
(a) the net amount payable to the Contractor; and
(b) 2% as TDS
(iv) To enable the DDOs to account for the TDS bunched together (in terms of
Option II), following sub-head related to the GST-TDS below the Head
8658.00.101-PAO Suspense has been opened.
Sl. Major Head Sub Head Major Head Serial Code SCCD
No. Description (8-digit reduced Code
accounting code)
1. 8658-00-101 08-GST TDS 86580344 367
(v) The DDO will require to maintain the Record of the TDS so being booked
under the Suspense Head so that at the time of preparing the CPIN for making
payment on weekly/ monthly or any other periodic basis, the total amount
could be easily worked out.
(vi) At any periodic interval, when DDO needs to deposit the TDS amount, he will
prepare the CPIN on the GSTN Portal for the amount (already booked under
the Suspense Head).
(vii) While generating the CPIN, the DDO will have to select mode of payment as
either (a) NEFT/ RTGS or (b) OTC. In the OTC mode, the DDO will have to
select the Bank where the payment will be deposited through OTC mode.
(viii) The DDO shall prepare the bill for the bunched TDS amount for payment
through the concerned payment authority. In the Bill, the DDO will give
reference of all the earlier paid bills from which 2% TDS was deducted and
kept in the suspense head. The DDO may also attach a certified copy of the
record maintained by him in this regard.
(ix) The payment authority will pass the bill by clearing the Suspense Head
operated against that particular DDO after exercising necessary checks.

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 GST Simplified™ Ready Reckoner for Students and Professionals

(x) In case of NEFT/ RTGS mode, the DDO will have to mention the CPIN
Number (as beneficiary’s account number), RBI (as beneficiary) and the IFSC
Code of RBI with the request to payment authority to make payment in
favour of RBI with these credentials.
(xi) In case of the OTC mode, the DDO will have to request the payment
authority to issue ‘A’ Category Government Cheque in favour of one of the 25
authorized Banks. The Cheque may then be deposited along with the CPIN
with any of branch of the authorized Bank so selected by the DDO.
(xii) Upon successful payment, a CIN will be generated by the RBI/ Authorized
Bank and will be shared electronically with the GSTN Portal. This will get
credited in the electronic Cash Ledger of the concerned DDO in the GSTN
Portal. This can be viewed and the details of CIN can be noted by the DDO
anytime on GSTN portal using his Login credentials.
(xiii) The DDO should maintain a Register as per proforma given in Annexure ‘A’ to
keep record of all TDS deductions made by him during the month. This
Record will be helpful at the time of filing Monthly Return (FORM GSTR-7) by
the DDO. The DDO may also make use of the offline utility available on the
GSTN Portal for this purpose.
(xiv) The DDO shall file the Return in FORM GSTR-7 by 10th of the following
month.
(xv) The DDO shall generate TDS Certificate through the GSTN Portal in FORM
GSTR-7A

Yash Shoppe, a registered supplier of Jaipur, is engaged in supply of various goods and
services exclusively to Government departments, agencies, local authority and persons
notified under section 51 of the CGST Act, 2017.
You are required to briefly explain the provisions relating to tax deduction at source under
section 51 of the CGST Act, 2017 and also determine the amount of tax, if any, to be
deducted from each of the receivable given below (independent cases) assuming that the
payments as per the contract values are made on 31.10.2018. The rates of CGST, SGST and
IGST may be assumed to be 6%, 6% and 12% respectively.
(1) Supply of computer stationery to Public Sector Undertaking (PSU) located in
Mumbai. Total contract value is ₹ 2,72,000 (inclusive of GST)
(2) Supply of air conditioner to GST department located in Delhi. Total contract value is
₹ 2,55,000 (exclusive of GST)
(3) Supply of generator renting service to Municipal Corporation of Jaipur. Total
contract value is ₹ 3,50,000 (inclusive of GST)
[CA-Final, May 2019]

(1) Nil
(2) IGST = ₹ 5,100
(3) CGST = ₹ 3,125 and SGST = ₹ 3,125

(1) Overruling anything to the contrary in the CGSTA,

every e-commerce operator, other than an agent,
shall collect an amount of tax @ notified by the Government not exceeding 1%
of the net value of taxable supplies made through it by other suppliers
where the consideration w.r.t. such supplies
is to be collected by the operator.
“Net Value of Taxable Supplies” = Aggregate value of taxable supplies, except the ones
mentioned in Sec. 9(5), made during any month by all registered persons through the

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 GST Simplified™ Ready Reckoner for Students and Professionals

operator (-) aggregate value of taxable supplies returned to the suppliers during that
month.

Notfn. No.: 52/2018 – CT and 02/2018 - IT

The CG has notified that every e-commerce operator, except an agent, shall collect tax @
o 0.5% of the net value of intra-state taxable supplies or
o 1% of the net value of inter-state taxable supplies
made through it by other suppliers where the consideration w.r.t. such supplies is to be
collected by the operator.

Who must perform the function of Tax Collection at Source (TCS) under GST:
(A) E-commerce operator
(B) Transport operator
(C) Job workers
(D) Input service distributor
[CS-Exec, Dec 2017]

(A) E-commerce operator

(2) The power to collect this tax amount

shall be without adversely affecting
any other mode of recovery from the operator.

(3) The tax collected shall be paid to The Government

Month-end
10

(4) Every operator who collects the tax

shall furnish a statement
containing the details of outward supplies effected through it,
including the supplies returned through it,
and the tax amount collected
within 10 days after the end of such month.

(5) Every operator who collects the tax

shall furnish an annual statement
containing aforementioned details
by 31 December of next financial year.

(1) Every tax collecting operator shall furnish a statement in FORM GSTR-8 containing
details of
o supplies effected through it and
o the amount of tax collected

(2) These details shall be made available to the collectee suppliers in Part C of FORM
GSTR-2A after the due date of filing FORM GSTR-8 for claiming the amount of tax
collected in his e-CaL after validation.

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 GST Simplified™ Ready Reckoner for Students and Professionals

(2) The annual statement u/s 52(5) shall be furnished in FORM GSTR-9B

(6) If any operator discovers any omission or incorrect particulars

after furnishing the monthly statement
other than as a result of scrutiny, audit, inspection or enforcement activity by the tax
authorities,
he shall rectify the same in the month during which
such omission/ incorrect particulars are noticed
subject to payment of interest as per Sec. 50(1)
However, no such rectification shall be allowed after
o the due date for furnishing statement for September following the FY or
o the actual date of furnishing relevant annual statement
whichever is earlier.

(7) The supplier who has supplied through the operator

shall claim credit of the TCS
(furnished by the operator in his periodic return)
in his e-CaL in the prescribed manner.

(8) The details of supplies furnished by every operator

under sub-section (4)
shall be matched with the corresponding details of outward supplies furnished by the
concerned supplier
in the prescribed manner and within prescribed time

(9) In case of mismatch, the discrepancy shall be communicated to both persons

within prescribed time.

(10) The amount of discrepancy communicated

and which is not rectified by either of them in the month of communication, shall be
added to the OTL of the said supplier
in his return for the month succeeding the month in which discrepancy is
communicated,
where the value of outward supplies furnished by the operator > the value of outward
supplies furnished by the supplier.

(11) The concerned supplier shall pay the tax payable

along with interest as per Sec. 50(1) on the added amount
from the due date till the date of payment.

The following details furnished in FORM GSTR-8, relating to the supplies made through an e-
commerce operator, shall be matched with the corresponding details declared by the
supplier in FORM GSTR-1:
(a) State of place of supply, and
(b) Net taxable value
In case the time limit for FORM GSTR-1 gets extended, the date of matching shall also be
extended accordingly.

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 GST Simplified™ Ready Reckoner for Students and Professionals

The date of matching may be extended by the Commissioner as well.

(1) Any discrepancy in the details so furnished shall be communicated to

o supplier in FORM GST MIS-3, and
o operator in FORM GST MIS-4
on or before the last day of the month of matching.

(2) The supplier may make suitable rectifications in FORM GSTR-1 pertaining to the
month of communication.

(3) The operator may make suitable rectifications in FORM GSTR-8 pertaining to the
month of communication.

(12) Any authority ranking DC and above may serve a notice

either before or during any proceeding
requiring the operator to furnish details relating to –
(a) Supplies effected through such operator during any period, or
(b) Stock of goods held by the suppliers in warehouses/ godowns managed by
such operator and declared as additional place of business by the suppliers

(13) Every such operator shall furnish the required information

within 15 working days of the date of service of such notice

(14) Any person who fails to furnish such information

will be liable to a penalty which may extend to ₹ 25,000.
without affecting the action that may be taken u/s 122.

(1) Any persons required to deduct/ collect tax at source shall submit a registration
application in FORM GST REG-07

(1A) A person applying for registration to deduct tax u/s 51 or collect tax u/s 52,
in a state/ UT where he does not have a physical presence, shall mention the name
of the state/ UT in FORM GST REG-07 (Part – A) and mention the name of the state/
UT in which the principal place of business is located in its (Part – B), which may be
different from the state/ UT mentioned in (Part – A).

(2) After due verification the PO may grant a RC in FORM GST REG-06 within 3 working
days from the date of submission of application

(3) Where upon enquiry or resulting from any proceeding, the PO is satisfied that the
said person is no longer liable to do so, he may cancel the registration and
communicate the same in FORM GST REG-08 following the cancellation procedure
in Rule 22

Circular No.: 74/ 48/2018-GST

Collection of tax at source by Tea Board of India

Tea Board of India (hereinafter referred to as the, “Tea Board”), being the operator of
the electronic auction system for trading of tea across the country including for

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 GST Simplified™ Ready Reckoner for Students and Professionals

collection and settlement of payments, admittedly falls under the category of

electronic commerce operator liable to collect Tax at Source (hereinafter referred to
as, “TCS”) in accordance with the provisions of section 52 of the Central Goods and
Service Tax Act, 2017 (hereinafter referred to as, “the CGST Act”).

2. The participants in the said auction are the sellers i.e. the tea producers and
auctioneers who carry out the auction on behalf of such sellers and buyers.

3. It has been represented that the buyers in the said auction make payment of a
consolidated amount to an escrow Account maintained by the Tea Board. The said
consolidated amount is towards the value of the tea, the selling and buying
brokerages charged by the auctioneers and also the amount charged by the Tea
Board from sellers, auctioneers and buyers. Thereafter, Tea Board pays to the sellers
(i.e. tea producers), from the said escrow account, for the supply of goods made by
them (i.e. tea) and to the auctioneers for the supply of services made by them (i.e.
brokerage). Under no circumstances, the payment is made by the Tea Board to the
auctioneers on account of supply of goods i.e., tea sold at auction.

4. A representation has been received from Tea Board, seeking clarification whether
they should collect TCS under section 52 of the CGST Act from the sellers of tea (i.e.
the tea producers), or from the auctioneers of tea or from both.

5. The matter has been examined. In exercise of the powers conferred under sub-
section (1) of section 168 of the CGST Act, for the purpose of uniformity in the
implementation of the Act, it is hereby clarified, that TCS at the notified rate, in terms
of section 52 of the CGST Act, shall be collected by Tea Board respectively from the -
(i) sellers (i.e. tea producers) on the net value of supply of goods i.e. tea; and
(ii) auctioneers on the net value of supply of services (i.e. brokerage).

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CGSTA, 2017
• Section 35: Accounts and other records
• Section 36: Period of retention of accounts
• Section 65: Audit by tax authorities
• Section 66: Special audit

(1) Every registered person

shall keep the following accounts
at his principal place of business –
(a) Production/ manufacture of goods
(b) Inward and Outward supplies
(c) Stock of Goods
(d) ITC availed
(e) Output tax payable and paid
(f) Other prescribed particulars
However, in case more than one place of business is specified in the RC, the accounts
relating to each such place shall be kept at such places of business.
Also, the registered person may maintain such accounts
in electronic form in the prescribed manner

Mr. Bala, a registered person at Chennai wants to maintain proper accounts and records
relating to GST. Advise him about the accounts and other records to be maintained under
Section 35(1) of the CGST Act, 2017.
[CA-Final, May 2018]

A registered person as per section 35 of the GST Act, 2017 is required to maintain proper
accounts and records, and keep at his registered, principal place of business. Following are
the records specified under this section are to be maintained by the registered person:
(i) Production or manufacturing of goods
(ii) Inward and Outward supply of goods or services or both
(iii) Stock of goods
(iv) Input credit availed
(v) Output tax payable and paid
(vi) Such other particulars as may be prescribed
(C) (i), (iii) and (iv)
(D) All the six as given in above
(E) (i), (ii), (iii) and (v)
(F) (i), (iii), (iv), (v) and (vi)
[CS-Exec, Jun 2018]

(B) All the six as given in above

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Circular No. 23/ 23/2017-GST

Issues in respect of maintenance of books of accounts relating to additional place of
business by a principal or an auctioneer for the purpose of auction of tea, coffee, rubber etc.

3. (a) The principal and the auctioneer of tea, coffee, rubber etc. are required to
declare warehouses where such goods are stored as their additional place of
business. The buyer is also required to disclose such warehouse as his
additional place of business if he wants to store the goods purchased through
auction in such warehouses.
(b) Both the principal and the auctioneer are required to maintain the books of
accounts relating to each and every place of business in that place itself as
per the first proviso to sub-section (1) of section 35 of the CGST Act.
However, in case difficulties are faced in maintaining the books of accounts, it
is clarified that they may maintain the books of accounts relating to the
additional place(s) of business at their principal place of business instead of
such additional place(s).
(c) Such principal or auctioneer shall intimate their jurisdictional proper officer in
writing about the maintenance of books of accounts relating to additional
place(s) of business at their principal place of business.
(d) Further, the principal or the auctioneer shall be eligible to avail input tax
credit (ITC) subject to the fulfilment of other provisions of the Act and the
rules made thereunder.

4. This Circular is applicable to the supply of tea, coffee, rubber, etc. where the
auctioneer claims ITC in respect of the supply made to him by the principal before or
after the auction of such goods and the said goods are supplied only through auction.

(2) Every owner/ operator of

o warehouse
o godown
o any other place used for storage of goods
and every transporter
irrespective of their registration status
shall maintain records of
consignor, consignee and other relevant details of the goods
in the prescribed manner.

(3) The Commissioner may notify

a class of taxable persons
to maintain additional accounts or documents
for specified purposes.

(4) Where the Commissioner considers

that any class of taxable persons cannot maintain books
as per the provisions of this section
he may permit them to maintain books
in the prescribed manner

(5) Every registered person

whose turnover exceeds the prescribed limit during a FY
shall get his accounts audited by CA/ CMA
and shall submit a copy of the audited annual accounts
reconciliation statement u/s 44(2) and
other prescribed documents

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 GST Simplified™ Ready Reckoner for Students and Professionals

in prescribed form.
However, this sub-section shall not apply
to any department of the CG/ SG/ LA
whose books of account are subject to audit by the CAG of India
or an auditor appointed for auditing the accounts of LA under any law.

(6) Subject to the provisions of Section 17(5)(h),

where the registered person fails to maintain accounts u/ ss (1),
the PO shall determine the tax payable
on the goods/ services not accounted for
as if such goods/ services had been supplied
and the provisions of demand and recovery shall apply mutatis mutandis for such tax
determination.

(1) In addition to Sec. 35(1), every registered person shall keep and maintain a true and
correct account along with relevant documents including invoices, BoS, delivery
challans, cr. notes, dr. notes, receipt vouchers, payment vouchers and refund
vouchers of
o the goods/ services imported/ exported, or
o supplies attracting RCM

(2) Every registered person other than a composition supplier shall maintain the
accounts of stock in respect of goods received and supplied including raw materials,
finished goods and scrap, containing the particulars of
opening balance, receipt, supply, goods lost, stolen, destroyed, written off or
disposed of as gift/ free sample and the balance of stock

(3) Every registered person shall maintain a separate account of advanced received,
paid and adjusted.

(4) Every registered person other than a composition supplier shall maintain an account
of
o tax payable
o tax collected and paid
o input tax
o ITC claimed
o register of tax invoice, cr. notes, dr. notes, delivery challans issued/ received
during any tax period.

(5) Every registered person shall keep the particulars of –

(a) names and addresses of suppliers from whom taxable supplies have been
received
(b) names and addresses of recipients to whom he has made supplies
(c) address of the premises where goods are stored by him along with the
details of the stock kept there, including storage during transit.

(6) If any taxable goods are found stored at any place other than the premises
mentioned above without the cover of any valid documents, the PO shall treat these
goods as supplied.

(7) Every registered person shall keep the account books, including e-records, at
principal place of business and additional place(s) of business.

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 GST Simplified™ Ready Reckoner for Students and Professionals

(8) Any account entry shall not be erased/ overwritten and all non-clerical incorrections
shall be scored out and corrected under attestation. In case of e-records, a log of
every entry edited and deleted shall be maintained.

(9) Each volume of manual account books shall be serially numbered.

(10) In case any account books are found at any premises other than place(s) of business
as per RC, they shall be presumed to be maintained by the said registered person,
unless proven otherwise.

(11) Every agent shall maintain accounts containing the –

(a) particulars of authorisation received from each principal to receive/ supply
goods/ services,
(b) particulars including description, value and quantity of goods/ services
received on behalf of every principal,
(c) particulars including description, value and quantity of goods/ services
supplied on behalf of every principal,
(d) details of accounts furnished to every principal, and
(e) tax paid on receipt/ supply of such goods/ services

(12) Every registered manufacturer shall maintain monthly production accounts showing
quantitative details of the input, output and waste/ by-products

(13) Every registered service supplier shall maintain the accounts with quantitative details
of inputs used and services supplied.

(14) Every registered works contract service provider shall keep separate accounts
showing –
(a) the names and addresses of the persons on whose behalf works contract is
executed
(b) description, value and quantity of inputs received
(c) description, value and quantity of inputs utilized
(d) the details of payment received for each works contract
(e) the names and addresses of input suppliers

(15) The aforementioned accounts may be maintained in electronic form and shall be
authenticated with DSC

(16) Accounts along with all the prescribed documents shall be preserved for the period
as mentioned in Sec. 36 and
o in case of manual maintenance – shall be kept at every related place of
business
o in case of digital maintenance – shall be accessible at every related place of
business

(17) Any carrier or c&f agent shall maintain true and correct records of goods handled by
him on behalf of a registered person and produce the same when required by the
PO.

(18) Every registered person shall produce the accounts books maintained under any law,
when demanded.

The supplier opting for composition levy need not maintain certain records as per rule 56(2)
and 56(4) of the CGST Rules, 2017. Explain.
[CA-Final, May 2019]

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 GST Simplified™ Ready Reckoner for Students and Professionals

(1) Proper electronic back-up of records shall be maintained in such manner that it can
be restored within reasonable period of time after accidental destruction of such
records.

(2) The registered person maintaining e-records shall produce a duly authenticated copy
of the same in hard copy or in any electronically readable format, when demanded.

(3) When required, the registered person shall provide the details, passwords and any
other relevant information for access to such electronic files along with a printed
copy of such files.

(1) Every un-registered person required to maintain accounts u/s 35(2) shall submit the
details regarding his business in FORM GST ENR-01. Upon validation of such details a
UEN shall be generated and communicated to him.

(1A) For the purpose of E-way Rules, a transporter registered in more than 1 state/ UT
having the same PAN, may apply for a unique enrolment no. by submitting details in
FORM GST ENR-02 using any one of his GSTIN.
Upon validation of the furnished details, a UCEN shall be generated and
communicated to the said transporter.
However, in case the said transporter has obtained a UCEN, he shall not be eligible to
use any of the GSTINs for the purposes of E-way Rules.

(2) The person so enrolled in any other state/ UT shall be deemed to be enrolled in the
state/ UT as well.

(3) Every such person shall amend the details furnished in FORM GST ENR-01 if
required.

(4) Subject to Rule 56 –

(a) Any person engaged in transporting goods shall maintain records of goods
transported, delivered and stored in transit by him along with GSTIN of the
registered consignor and consignee for each of the branches.
(b) Every owner/ operator of a warehouse/ godown shall maintain accounts
books w.r.t. the period for which particular goods remain in the warehouse,
including the particulars relating to dispatch, movement, receipt and disposal
of such goods.

(5) The owner/ operator of the godown shall store the goods in such manner that they
can be identified item-wise and owner-wise and shall facilitate any physical
verification/ inspection by the PO on demand.

Every registered person required to maintain accounts as per 35

shall retain them for 72 months
from the due date of furnishing annual return
for the year pertaining to such accounts and records.

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• However, in case the registered person is involved in

an appeal, revision or any other proceedings
before an Appellate Authority, Revisional Authority or AT,
whether filed by him or the Commissioner,
OR
he is under investigation for any offence,
the books pertaining to such proceedings shall be maintained,
for a period of 1 year after the final disposal of appeal etc.
or 72 months, whichever is later.

XYZ Co Ltd registered under GST has to maintain accounts and records until the expiry of
………… months from the due date of furnishing the annual return for the year.
(A) 36 months
(B) 84 months
(C) 72 months
(D) 60 months
[CS-Exec, Dec 2017]

(C) 72 months

Time duration as per section 36 of the CGST Act, 2017 for retention of accounts and records
under GST is until expiry of ……….. months from the due date of furnishing of annual return for
the year pertaining to such accounts and record.
(A) 72
(B) 84
(C) 60
(D) None of the above
[CS-Exec, Jun 2018]

(A) 72

For the year 2017-18 due date of filling of annual return is 31.12.2018. The books and records
of 2017-18 must be maintained till
(a) 31.03.2024
(b) 31.12.2024
(c) 31.12.2026
(d) 31.03.2034
[CMA-Final, Jun 2018]

(d) 31.12.2024

The time duration for retention of accounts and records under Goods and Services Tax
(GST) as per section 36 of the CGST Act, 2017 is:
(A) Until expiry of 36 months from the due date of furnishing of annual return for the
year pertaining to such accounts and records
(B) Until expiry of 48 months from the due date of furnishing of annual return for the
year pertaining to such accounts and records
(C) Until expiry of 60 months from the due date of furnishing of annual return for the
year pertaining to such accounts and records
(D) Until expiry of 72 months from the due date of furnishing of annual return for the
year pertaining to such accounts and records
[CS-Exec, Dec 2018]

(F) Until expiry of 72 months from the due date of furnishing of annual return for the year
pertaining to such accounts and records

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(1) The Commissioner or any officer authorized by him

may undertake audit of any registered person
for prescribed period, at prescribed frequency
and in prescribed manner
by way of general/ specific order.

(2) Such officer may conduct audit

at the place of business of the registered person
or in his office.

(3) The registered person shall be informed about audit

at least 15 days in advance

(4) The audit shall be completed within 3 months

• The Commissioner may extend this period
by a further period not exceeding 6 months
for reasons recorded in writing.

(5) During audit, the authorised officer may

require the registered person –
(i) to afford him the necessary facility to verify the books as required
(ii) to furnish such information as he may require and render assistance for timely
completion of the audit.

(6) On conclusion of audit,

the PO shall inform the auditee
about the findings, his rights and obligations and the reasons for such findings
within 30 days.

(7) Where the audit conducted u/ ss (1) results in detection of

tax not paid, short paid or erroneously refunded, or
ITC wrongly availed or utilised
the PO may initiate action under the provisions of
demand and recovery.

(1) The period of audit to be conducted u/s 65(1) shall be a FY or its part, or its multiples.

(2) The PO shall issue a notice u/s 65(3) in FORM GST ADT-01

(3) The PO authorized to conduct audit shall verify

o the documents on the basis of which account books are maintained and
returns are furnished.
o the correctness of the turnover
o exemptions and deductions claimed
o the rate of tax applied on supplies
o the ITC availed and utilised

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o refund claimed
o other relevant issues

(4) The PO may inform the registered person of any discrepancy noticed during audit and the
said person may file his reply. After considering the reply furnished, the PO shall finalise
the findings.

(5) The PO shall inform the findings of audit to the registered person u/s 65(6) in FORM GST
ADT-02

(1) If at any stage of scrutiny, inquiry, investigation or any other proceedings,

any officer ranking AC and above,
opines that the value declared is not correct or
the credit availed is beyond normal limits,
he may take the prior approval of the Commissioner and
direct such registered person
to get his records and books of accounts audited
by a CA/ CMA nominated by the Commissioner

Grounds which leads a commissioner to order for a special audit in case of a registered
person by a communication in writing for getting his records including books of accounts
examined and audited and by a person who ............
(A) supplies any goods or service or both without issue of any invoice by Cost
Accountant or Company Secretary
(B) avail input tax credit with bogus invoice by Company Secretary or Cost Accountant
(C) has not correctly declared the value or the credit availed is not within the normal
limits, by a Chartered Accountant or a Cost Accountant
(D) none of the above
[CS-Exec, Dec 2018]

(C) has not correctly declared the value or the credit availed is not within the normal
limits, by a Chartered Accountant or a Cost Accountant

(2) The CA/ CMA shall submit an audit report

duly certified and signed by him
to the said AC within 90 days,
mentioning therein other specified particulars.
• However, for any material and sufficient reason,
the AC may extend this period by a further period of 90 days
on an application made by the CA/ CMA/ registered person.

When a special audit is directed under GST with prior approval of Commissioner the audit
report signed and certified must be submitted within ………… days.
(A) 15
(B) 45
(C) 90
(D) 150
[CS-Exec, Dec 2017]

(C) 90

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 GST Simplified™ Ready Reckoner for Students and Professionals

(3) The provisions of sub-section (1) shall have effect

irrespective of the fact that the accounts of the assessee
has been audited under any other provision
of this Act or any other law in force.

(4) The auditee shall be given an opportunity of being heard

in respect of any material gathered on the basis of such audit
which is proposed to be used against him in any proceedings
under this Act.

(5) The expenses of examination and audit

including the remuneration of the CA/ CMA
shall be determined and paid by the Commissioner
and such determination shall be final.

(6) Where the audit conducted u/ ss (1) results in detection of

tax not paid, short paid or erroneously refunded, or
ITC wrongly availed or utilised
the PO may initiate action under the provisions of
demand and recovery.

(1) Where special audit is required to be conducted u/s 66, the PO shall issue a direction
to the registered person in FORM GST ADT-03 to get his records audited by a CA/
CMA specified in the said form.

(2) On conclusion of the special audit, the registered person shall be informed of the
findings of the special audit in FORM GST ADT-04.

Enumerate and explain the types of audits envisaged under GST law.
[CMA-Final, Jun 2018]

Explain the difference between Audit by Tax Authorities under section 65 and Special Audit
under section 66 of the CGST Act, 2017.
[CA-Final, Nov 2018]

How many types of Audit are prescribed under GST Act? Briefly explain each one of them.
[CA-Final, Nov 2018]

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 GST Simplified™ Ready Reckoner for Students and Professionals

CGSTA, 2017
• Section 59: Self-assessment
• Section 60: Provisional assessment
• Section 61: Scrutiny of Returns
• Section 62: Assessment of non-filers of returns
• Section 63: Assessment of unregistered persons
• Section 64: Summary assessment in certain special cases

Every registered person

shall self-assess the taxes payable under this Act
and furnish a return for each tax period as specified u/s 39.

(1) Where the taxable person is unable to determine

o the value of goods/ services, or
o the rate of tax applicable
he may request the PO in writing
giving reasons for payment of tax on provisional basis
and the PO shall pass an order within 90 days
from the date of receipt of such request
allowing payment of tax on provisional basis
at such rate or on such value
as specified.

(2) The payment of tax on provisional basis may be allowed

if the taxable person executes a bond in the prescribed form
and with such surety and security as the PO deems fit
binding the taxable person for payment of difference between
the tax finally assessed and the tax assessed provisionally

(3) The PO shall pass the final assessment order

within 6 months from the date of communication of order u/ ss (1)
after obtaining the information as may be required for the same.
However, this period may be extended
by a further period not exceeding
o 6 months by the JC or AC
o 4 years by the Commissioner
for sufficient reasons being recorded in writing.

(4) The registered person shall be liable to pay interest

on any tax payable but not paid by the due date u/s 39(7)

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on the supply of goods/ services under provisional assessment

at the rate specified u/s 50(1)
from the first day after the due date of payment
till the date of actual payment
whether such amount is paid before or after the issuance of final assessment order.

(5) Where the registered person is entitled to a refund

as a result of the final assessment order
an interest shall be paid on such refund u/s 56
subject to the provisions of section 54(8).

(1) Every registered person requesting for payment of tax on a provisional basis u/s
60(1) shall furnish an application in FORM GST ASMT-01 along with the supporting
documents.

(2) On receipt of application, the PO may issue a notice in FORM GST ASMT-02 requiring
the registered person to furnish additional information in support of his request in
FORM GST ASMT-03.

(3) The PO shall issue a permission order in FORM GST ASMT-04 indicating the value or
the rate based on which the assessment is to be allowed on a provisional basis and
the amount for which the bond is to be executed and security, to the extent of 25%
of the bond amount, to be furnished.

(4) The bond shall be executed u/s 60(2) in FORM GST ASMT-05 along with a security in
the form of a bank guarantee for the aforementioned amount.
Bond under SGSTA/ IGSTA shall be deemed to be under CGSTA.

(5) The PO shall issue a notice in FORM GST ASMT-06 for information required to
finalize the assessment u/s 60(3) and issue a final AO in FORM GST ASMT-07
specifying the amount payable/ refundable.

(6) After issue of final AO, the applicant may apply in FORM GST ASMT-08 for the
release of the security furnished earlier.

(7) After ensuring that the applicant has paid the required amount, the PO shall release
the security and issue an order in FORM GST ASMT-09 within 7 working days from
the date of application

Write a brief note on provisional assessment under section 60 of the CGST Act, 2017.
[CMA-Final, Jun 2018]

(1) The PO may scrutinize the return furnished by the registered person to verify the
correctness of the return
and inform him of the discrepancies noticed and seek explanation.
(2) In case the explanation is found acceptable,
the registered person shall be informed accordingly
and no further action shall be taken.

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(3) In case no satisfactory explanation is furnished

within 30 days of information, or as extended
OR
where even after accepting the discrepancy,
the registered person fails to take corrective actions
in his return for the month of acceptance
the PO may initiate appropriate action u/s 65, 66, 67
or determine tax and other dues u/s 73, 74

(1) Where any return is selected for scrutiny, the PO shall scrutinize the same u/s 61 and
in case of any discrepancy issue a notice to the registered person in FORM GST
ASMT-10 informing him of such discrepancy. The said person shall be required to
reply to such notice within the permitted period, which shall not exceed 30 days.
The PO shall also quantify the amount of tax, interest etc. in relation to such
discrepancy, wherever possible.

(2) The registered person may accept the discrepancy mentioned in the notice and pay
the tax, interest etc. and inform the same, or
furnish an explanation for the discrepancy to the PO
in FORM GST ASMT-11

(3) Where the explanation furnished or the information submitted is found acceptable,
the PO shall inform the registered person in FORM GST ASMT-12.

Explain the recourse that may be taken by the officer in case proper explanation is not
furnished for the discrepancy detected in the return filed, while conducting scrutiny under
section 61 of the CGST Act, 2017.
[CA-Final, May 2019]

(1) Overruling anything to the contrary u/s 73, 74.

where a registered person fails to file the periodic or final return
despite receiving a notice u/s 46
the PO may assess the tax liability of such person
to the best of his judgement
taking into account all relevant material available/ collected
and issue an assessment order within a period of 5 years
from the due date of furnishing annual return
pertaining to the FY to which the tax not paid relates.

(2) Where the registered person furnishes a valid return

within 30 days of the service of order u/ ss (1)
the said assessment order shall be deemed to have been withdrawn
but the liability for payment of interest u/s 50(1)
or for payment of late fee u/s 47 shall continue.

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 GST Simplified™ Ready Reckoner for Students and Professionals

(1) The AO made u/s 62(1) shall be issued in FORM GST ASMT-13 and its summary shall
be uploaded in FORM GST DRC – 07.

Facts: Petitioner defaulted in filing of returns from July 2018 onwards. The case of the
petitioner is that although there is a provision under the Act for an automatic setting aside of
the best judgment assessment in circumstances where the registered dealer furnishes a valid
return within 30 days of service of the assessment order, the petitioner sees this provision as
futile in his case inasmuch as even if the petitioner were to file the returns within the
extended time of 30 days from the date of receipt of the best judgment assessment orders,
he would not be in a position to pay the admitted tax liability as reflected from the returns.

Decision: Statutory provisions are clear with regard to the time frame within which the
assessee has to file his return and pay tax based on the said returns if he wants the
assessment done on best judgment basis to be cancelled. Statutory provisions enable the
assessee, who is aggrieved by the assessment order passed on best judgment basis, to
furnish his returns within a further period of 30 days and pay tax thereon on the basis of the
return filed by him, and in that event, the order of the proper officer passed on best
judgment basis will stand automatically withdrawn. Petitioner informs that he would not be
able to pay the admitted tax liability on account of paucity of funds. Statutory prescription of
30 days from the date of receipt of the assessment order passed under sub section (1) of
Section 62 has to be strictly construed against an assessee and in favour of the revenue,
since this is a provision in a taxing statute that enables an assessee to get an order passed
against him on best judgment basis set aside. The provision must be interpreted in the same
manner as an exemption provision in a taxing statute. Court may not be justified in granting
an extension of the period contemplated under sub section (2) of Section 62, so as to enable
the assessee to file a return beyond the said period for the purposes of getting the benefit of
withdrawal of an assessment order passed on best judgment basis under Section 62(1) of the
GST Act. Under such circumstances, prayer sought for in the writ petition cannot be granted.
Writ petition fails and is, accordingly dismissed.

Overruling anything to the contrary contained in Sec. 73 or 74

where a taxable person fails to obtain registration despite being liable to do so or
his registration has been cancelled but he was liable to pay tax,
the PO may assess the tax liability of such person to the best of his judgment for the relevant
tax periods
and issue an assessment order within 5 years
from the due date of furnishing annual return for the FY to which the tax not paid pertains
after giving the person an opportunity of being heard.

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 GST Simplified™ Ready Reckoner for Students and Professionals

(2) The PO shall issue a notice u/s 63 in FORM GST ASMT-14 containing the grounds on
which the assessment is proposed to be made on best judgement basis and shall
also serve its summary in FORM GST DRC – 01, and after allowing 15 days to the
taxable person to furnish any reply, he shall pass an order in FORM GST ASMT-15
and its summary in FORM GST DRC – 07.

State the default committed on the part of a registered person which attracts an action by
the proper officer to make best judgement assessment and also state the time limit within
which such assessment is to be made:
(A) furnish inaccurate data in return and within 2 years from the due date of annual
return of the period to which the tax not paid relates
(B) fails to file general return under section 39 and within 5 years from the due date of
annual return of the period to which tax not paid relates
(C) fails to file final return under section 45 even after notice under section 46 and
within 5 years from the due date of annual return of the period to which tax not
paid relates
(D) both (B) and (C) above
[CS-Exec, Dec 2018]

(D) both (B) and (C) above

(1) With the prior permission of AC/ JC

the PO may assess the tax liability of a person
regarding whom any evidence has come to his notice
and issue an assessment order
if he has sufficient grounds to believe that any delay in doing so
may adversely affect the interest of revenue.
• In case of supply of goods,
if the taxable person to whom the liability pertains is not ascertainable,
the person in charge of the such goods
shall be deemed to be the taxable person liable to be assessed.

(3) The AO u/s 64(1) shall be issued in FORM GST ASMT – 16 and its summary in FORM
GST DRC – 07

(2) On receiving an application from the taxable person

within 30 days of issue of the order u/ ss (1)
or on his own motion
if the AC/ JC considers that such order is erroneous
he may withdraw the same
and the procedure of demand and recovery shall follow.

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(4) The application u/s 64(2) may be filed in FORM GST ASMT-17.

(5) The withdrawal/ application rejection order u/s 64(2) shall be issued in FORM GST
ASMT-18.

Write a brief note on Summary Assessment in certain special cases as per Section 64 of the
CGST Act, 2017.
[CA-Final, May 2018]

Explain in what cases, assessment order passed by proper officer may be withdrawn under
CGST Act, 2017.
[CA-Final, May 2018]

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 GST Simplified™ Ready Reckoner for Students and Professionals

CGSTA, 2017
• Section 73: For any reason other than fraud or any wilful-misstatement or
suppression of facts.
• Section 74: By reason of fraud or any wilful-misstatement or suppression of facts.
• Section 75: General provisions relating to determination of tax
• Section 76: Tax collected but not paid to Government
• Section 77: Tax wrongfully collected and paid to CG/ SG
• Section 78: Initiation of Recovery Proceedings
• Section 79: Recovery of tax
• Section 80: Payment of tax and other amount in instalments
• Section 81: Transfer of property to be void in certain cases
• Section 82: Tax to be first charge on property
• Section 83: Provisional attachment to protect revenue in certain cases
• Section 84: Continuation and validation of certain recovery proceedings

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•
• •
•
•
•

Relevant Date
For (A), (B), (D) and (E) –
The due date for
furnishing of annual return
for the FY to which the Tax +
Tax + default relates to Interest + 15%
Interest + For (C) – of Penalty (=Tax) 5 years
3 years Penalty The date of refund

30 days Show Cause Notice Tax + 30 days

The PO may issue statements Interest + 25%
3 months for same grounds, in lieu of of Penalty (=Tax) 6 months
SCN, for other periods
Tax +
Order Interest + 50%
Tax + 30 days
Interest + of Penalty (=Tax)
Penalty Higher of
10% of tax Tax +
OR Interest +
₹ 10,000
Penalty (=Tax)

Discuss briefly the procedure for issue of Adjudication order under Section 74(9) & (11) and
the time limit for passing Adjudication order under Section 74(10) of the CGST Act, 2017.
[CA-Final, May 2018]

Achutha Motors Pvt. Ltd., have been served a show cause notice (SCN) on 2nd November,
2021 under section 73(1) of the CGST Act, 2017, alleging that the supplier had made short
remittances of GST for the months of September, October and November, 2017. The
department has afforded a personal opportunity of being heard on 15th November, 2021.
The Company seeks your expert advice in drafting the written submissions to be tendered
at the time of personal hearing, in respect of the SCN. You are required to draft the reply on
their behalf. You may assume that there is no change in legal position during November,
2021 and that it remains the same as it is at present.
[CMA-Final, Jun 2018]

Relevant Date = 31 December, 2018

Due date for issuing Demand Order u/s 73 = 31 December, 2021
Due date for issuing Notice u/s 73(1) = 30 September, 2021
Hence, the SCN issued on 2 November, 2021 is ultra vires.

Mr. Anant Kumar Gupta self-assessed his tax liability as ₹ 90,000 for the month of April
2018 but failed to make the payment.

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Subsequently the Department initiated penal proceedings against Mr. Anant Kumar Gupta
for recovery of penalty under section 73 of CGST Act, 2017 for failure to pay GST and issued
show cause notice on 10-08-2018 which was received by Mr.Anant Kumar Gupta on 14-
08-2018.
Mr. Anant Kumar Gupta deposited the tax along with interest on 25/08/2018 and informed
the department on the same day.
Department is contending that he is liable to pay a penalty of ₹ 45,000 (i.e. 50% of
90000)
Examine the correctness of the stand taken by the Department with reference to the
provisions of the CGST Act, 2017, explain the relevant provisions in brief.
[CA-Final, Nov 2018]

Mr. X registered under GST Act, had made short payment of GST for the month of July,
2017.
He does not want a Show Cause notice to be served on him by Proper Officer. Advice Mr.
X, if:
(i) Short payment of tax is on account of reasons other than fraud
(ii) Short payment of tax is on account of fraud
[CA-Final, Nov 2018]

(1) Any period of stay ordered by a court or AT

shall be excluded in computing the periods u/s 73 or 74

(2) Where any AA/ AT/ court concludes that charges of fraud do not stand, the notice u/s
74(1) shall be deemed to have been issued u/s 73(1) and dealt with accordingly.

(3) In case order is issued in pursuance with AA/ AT/ court direction
it shall be issued within 2 years from communication date.

(4) An opportunity of hearing shall be granted where a request is received in writing from
the taxable person

(5) On sufficient cause being shown, the hearing may be adjourned for not more than 3
times during the proceedings.

(6) All the relevant facts and the basis of decision of the PO shall be mentioned in the
order.

(7) The amount demanded in the order shall not exceed the amount specified in the notice
or on any other ground.

(8) Where the AA/ AT/ court modifies the amount of tax determined by the PO, the
interest and penalty shall stand modified accordingly.

(9) Interest shall be payable whether specified in the order or not

(10) The adjudication proceedings shall be deemed to be concluded if no order is issued

within the specified time limit.

(11) Where an appeal against a decision, prejudicial to the interest of revenue in some other
proceedings, of any lower adjudicating authority is pending before a higher adjudicating

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authority, the period between the 2 decisions (that of lower and higher) shall be
excluded in computing the period for order u/s 73 or 74

(12) Overruling both the sections, any unpaid amount of self-assessed tax shall be
recovered as per Sec. 79

(13) Where any penalty is imposed u/s 73 or 74, no penalty for the same act or omission
shall be imposed on the same person under any other provision.

On 05.07.2018, a show cause notice for ₹ 5,00,000 was issued to Mr. Vijay Kumar Sharma
demanding short payment of GST of ₹ 4,50,000 for the month of January, 2018 and also
interest of ₹ 50,000.
Mr. Sharma raised objections and after personal hearing on 30.08.2018, adjudicating
authority passed the final order for ₹ 3,50,000 on 02.09.2018 and informed the
department on the same day. Subsequently, on 15.09.2018, department demanded
payment of interest of ₹ 60,000 on GST of ₹ 3,50,000.
Mr. Vijay Kumar Sharma is not ready to pay any interest. His contention is that he is not
liable for interest because he deposited all the amount specified in the final adjudication
order.
Examine with a brief note the validity of the action taken by the Department with reference
to provisions of the CGST Act, 2017.
[CA-Final, May 2019]

(1) Overruling anything and everything to the contrary,

every person, who has collected any amount as GST from any other person, shall
forthwith pay this amount to the Government, irrespective of whether such supply was
taxable or not.

(2) In case it is not done so, the PO may serve such person with a SCN specifying the tax
amount and the penalty equivalent to that amount.

(3) If any representation is made by the person, the PO shall consider it and then
determine the amount due from such person. Thereupon, such person shall pay the
amount so determined.

(4) In addition to the amount as per (1) or (3), the person shall also be liable to pay interest
@ specified in Section 50 from the date of collection to the date of payment.

(5) On a request being received in writing, an opportunity of hearing shall be granted.

(6) The PO shall issue an order within 1 year of the issue of notice.

(7) In case issuance of such order is stayed by a court/ AT, the period of stay shall be
excluded while computing the period of 1 year

(8) In his order, the PO shall duly mention the relevant facts and basis of his decision.

(9) The amount paid under (1) or (3) shall be adjusted against the tax payable, if any, by the
person in relation to supplies referred in (1)

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(10) Where any surplus is left after such adjustment, it shall either be credited to the CWF
or refunded to the person who has borne the incidence of such amount.

(11) The person who has borne the incidence of the amount, may apply for refund as per
the provisions of Section 54.

Checkernot has self-assessed tax liability under IGST Act, 2017, as ₹ 80,000. He fails to
pay the tax within 30 days from the due date of payment of such tax.
Determine the interest and penalty payable by him explaining the provisions of law, with
the following particulars available from his records:
Date of collection of tax: 18th December, 2017
Date of payment of tax: 26th February, 2018
No Show Cause Notice (SCN) has been issued to him so far, while he intends to discharge
his liability even before it is issued to him, on the assumption that no penalty is leviable on
him as payment is made before issue of SCN.
[CA-Final, May 2018]

(1) The PO shall serve, along with the –

(a) notice u/s 52/ 73/ 74/ 76/ 122/ 123/ 124/ 125/ 127/ 129/ 130 – a summary
thereof in FORM GST DRC-01
(b) statement u/s 73(3)/ 74(3) – a summary thereof in FORM GST DRC-02
specifying the details of the amount payable.

(1A) Before serving the notice u/s 73(1)/ 74(1), the PO shall communicate the details of any
tax, interest and penalty, as ascertained by him, in FORM GST DRC-01A (Part-A).

(2) In case the person chargeable with tax makes the payment before service of notice/
statement as per Section 73(5)/ 74(5),
or where any person makes the payment of tax, interest and penalty or any other
due amount as per the provisions of the Act,
whether on his own ascertainment or as communicated by the PO under (1A)
he shall inform the PO in FORM GST DRC-03 and the PO shall issue an
acknowledgement in FORM GST DRC-04.

(2A) Where the person referred to in (1A) has made partial payment of the amount
communicated to him
or desires to file any submissions against the proposed liability,
he may make such submission in FORM GST DRC-01A (Part-B)

(3) In case the person chargeable with tax makes payment u/s 73(8)/ 74(8) within 30
days of the service of notice, or where the concerned person makes payment of the
amount u/s 129(1) within 14 days of detention/ seizure of the goods and conveyance,
he shall intimate the PO in FORM GST DRC-03 and the PO shall issue an order in
FORM GST DRC-05 concluding the proceedings.

(4) The representation referred in Section 73(9)/ 74(9)/ 76(3) or the reply to any notice
issued under any section whose summary has been uploaded in FORM GST DRC –
01 under (1) above, shall be in FORM GST DRC-06

(5) A summary of the order issued u/s 52/ 62/ 63/ 64/ 73/ 74/ 75/ 76/ 122/ 123/ 124/ 125/
127/ 129/ 130 shall be uploaded in FORM GST DRC-07 specifying the amount of tax,
interest and penalty payable.

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(6) This order shall be treated as the notice for recovery.

(7) Any rectification of the order u/s 161, or where any order earlier uploaded has been
withdrawn, a summary of the rectification/ withdrawal order shall be uploaded by
the PO in FORM GST DRC-08

(1) A summary of order issued under any of the existing laws creating demand of tax/
interest/ penalty/ fee/ any other dues which becomes recoverable due to
proceedings launched under the existing law before or in GST regime unless
recovered under that law,
be recovered under the CGSTA and
may be uploaded in FORM GST DRC-07A for recovery under the Act
and the demand of the order shall be posted in Part II of ELR.

(2) In case the demand of an order uploaded as above is rectified/ modified/ quashed in
any proceedings
or the recovery is made under the existing laws,
its summary shall be uploaded on the common portal in FORM GST DRC-08A and
and Part II of ELR shall be updated accordingly.

Similar provision has been discussed in Section 19 of the IGSTA, 2017 (please refer
)

A taxable person shall pay any amount payable as a result of any order issued under this Act,
within 3 months of service of such order.
However, this time limit may be reduced at the discretion of the PO for reasons to be recorded
in writing.

(1) One or more of the following modes may be adopted to recover any amount which is
payable to the Government under this Act but not paid:
(a) The PO may himself or ask any other specified officer to deduct the amount
payable from any owing to such defaulting person.
(b) The PO may himself or ask any other specified officer to recover the amount
payable by detaining and selling any goods belonging to such person which are
under the control of such officer.
(c)
(i) The PO may issue notice to any other person who has to pay to or holds
money on account of such defaulter, requiring him to pay to the
Government money, sufficient to pay the defaulter’s dues, within the
time specified in the notice or when such person’s liability arises. In case
the money is equal to or less than the defaulter’s dues, the entire
amount shall be required to be paid to the Government.

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(ii) Every person to whom such notice is issued, shall be bound to comply
with the same, and where such person is a bank, post officer or insurer,
it shall not be necessary to produce any deposit receipt, pass book,
policy or any such document for any entry, endorsement etc. despite
that being their regular practice, rule or requirement.
(iii) In case the person to whom notice is issued fails to comply with the
same, he shall be deemed to be a defaulter in respect of the specified
amount and all the consequences of this Act shall follow.
(iv) The officer issuing such notice may amend or revoke the notice or
extend the time limit for payment any time.
(v) Any person making payment in compliance with such notice shall be
deemed to have paid under the authority of the defaulter and such
payment credited to the Government shall be deemed to be good and
sufficient discharge of his liability to the extent of the receipt.
(vi) Any person discharging any liability of the defaulter after service of such
notice, shall be personally liable to the extent of liability discharged or to
the extent of the liability of the defaulter for tax, interest and penalty,
whichever is less.
(vii) Where the person to whom notice is issued proves to the satisfaction of
the PO that he does not have to pay any due to the defaulter or he does
not hold any money on account of the defaulter, the provisions of this
clause shall not be applied on him.
(d) In accordance with the rules, the PO may distrain any movable or immovable
property belonging to or under the control of the defaulter and detain the same
until the amount payable is paid.
In case any part of the payable amount, or the cost of distress or keeping the
property remains unpaid for 30 days after the distraint, the officer may sale the
property and the proceeds may be used to satisfy the payable amount and the
costs including cost of sale remaining unpaid and return any surplus to the
defaulter.
(e) The PO may send a signed certificate to the Collector of the district in which
such person owns any property or resides or carries on his business, or to any
officer authorized by the Government, and such officer shall proceed to recover
the specified amount from such person as an arrear of land revenue.
(f) Overruling the CrPC, the PO may apply to the appropriate Magistrate and such
Magistrate shall proceed to recover the amount as if it were a fine imposed.

(2) Where the terms of any bond or other instrument executed under the Act provides that
the amount due under that bond may be recovered as per sub-section (1), then without
prejudice to other modes of recovery, the amount may so be recovered.

(3) Where the amount of CGST, interest or penalty is payable and remains unpaid, the PO
of SGST/ UTGST may recover the same as if it were an arrear of SGST/ UTGST ad credit
it to the account of the CG.

(4) In case it is less than the amount due, it shall be credited in proportion to the amount
due to each Govt.
NOTE: Person includes “distinct persons” in this section.

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In case a person defaults in paying any amount payable to the Government, the PO may
require a specified officer* to deduct the amount from any money owing to such defaulter in
FORM GST DRC-09 as per Section 79(1)(a).

*specified officer = any officer of the CG/ SG/ UTG/ LA, or of a Board/ Corporation/
company owned/ controlled, wholly/ partly, by the CG/ SG/ UTG/ LA

(1) Where any amount due from a defaulter is to be recovered as per Section 79(1)(b) by
selling his goods, the PO shall prepare an inventory and estimate the MV of such
goods and sell only that quantity of the goods as may be required to recover the
amount payable + administrative expenditure incurred on recovery proceedings.

(2) The said goods shall be sold through auction for which a notice shall be issued in
FORM GST DRC-10 clearly indicating the goods to be sold and the purpose of sale.

(3) The last day to submit the bid or the date of auction shall not be earlier than 15 days
from the date of issue of FORM GST DRC-10.
However, in case the goods are perishable/ hazardous in nature or where the
expenses of keeping them in custody are likely to exceed their value, the PO may sell
them without delay.

(4) The PO may specify the amount of pre-bid deposit to be furnished to make the
bidders eligible to participate. The deposit may be returned to unsuccessful bidders
and forfeited in case the successful one fails to make the full payment.

(5) The PO shall issue a notice to the successful bidder in FORM GST DRC-11, requiring
him to make full payment within 15 days from the date of auction. On such payment,
he shall issue a certificate in FORM GST DRC-12 and transfer the possession of goods
to the said bidder.

(6) In case the defaulter pays the amount under recovery and the expenses incurred
thereon before the issue of FORM GST DRC-10, the PO shall cancel the auction and
release the goods.

(7) The PO shall cancel the process and proceed for re-auction in case
o no bid is received or
o the auction is non-competitive due to lack of
▪ adequate participation, or
▪ low bids

(1) The PO may serve a notice in FORM GST DRC-13 on a third person u/s 79(1)(c)
directing him to deposit the specified amount.
(2) Where the third person makes payment of the full amount specified in the notice, the
PO shall issue a certificate in FORM GST DRC-14 indicating the details of the liability
discharged.

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In case any amount is payable to a defaulter in the execution of a decree of a civil court, the
PO shall send a request to the said court in FORM GST DRC-15 and the court shall execute
the attached decree and credit the net proceeds for settlement of the recoverable amount,
subject to CPC.

(1) The PO shall prepare a list of defaulter’s movable/ immovable properties, estimate
their MV and issue an order of attachment/ distraint and a notice for sale in FORM
GST DRC-16 prohibiting any transaction with regard to such properties as may be
required for the recovery of amount due, subject to Rule 151.

(2) The PO shall send a copy of FORM GST DRC-16 to the concerned Authority to
encumber the said property, which shall be removed only on written instructions
from the PO.

(3) In case the property so attached is –

(a) immovable – the order shall be affixed on the said property and shall remain
affixed till the confirmation of sale.
(b) movable – the PO shall seize the said property in accordance with Chapter
XIV of CGSTA, 2017 and the custody of the property shall be taken by the PO
himself or an authorized officer.

(4) The said property shall be sold through an auction for which the notice shall be
issued in FORM GST DRC-17 indicating the property to be sold and the purpose of
sale

(5) Overruling this Chapter, in case the property to be sold is

o a negotiable instrument, or
o a share in a corporation,
the PO may sell such property through a broker and from the proceeds, the said
broker shall
o retain his commission,
o deposit the amount recoverable to the government and
o pay any balance amount to the owner of the instrument/ share

(6) The PO may specify the amount of pre-bid deposit to be furnished to make the
bidders eligible to participate. The deposit may be returned to unsuccessful bidders
and forfeited in case the successful one fails to make the full payment.

(7) The last day to submit the bid or the date of auction shall not be earlier than 15 days
from the date of issue of FORM GST DRC-17.
However, in case the goods are perishable/ hazardous in nature or where the
expenses of keeping them in custody are likely to exceed their value, the PO may sell
them without delay.

(8) In case of a claim/ objection is raised that any property is not liable to be attached/
distrained, the PO shall investigate such claim/ objection and may postpone the sale
for such time as he may deem fit.

(9) The person making the claim/ objection must adduce evidence to show that on the
date of issue of order under (1), he had some interest in, or was in possession of the
property in question.

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(10) On investigation, if the PO is satisfied that

o the property was not in the possession of the defaulter or any other person
on his behalf on the said date, or
o the property in his possession did not belong to him, wholly or partly, but to
any other person,
on the said date,
the PO shall order the release of the property from attachment wholly or to the
extent he deems fit.

(11) In case the PO is satisfied that

o the property possessed by the defaulter was his own property, or
o the property was in possession of some other person in trust for him, or
o the property was occupied by some other person paying rent to him,
on the said date, he shall reject the claim made and proceed with the auction.

(12) The PO shall issue a notice to the successful bidder in FORM GST DRC-11, requiring
him to make full payment within 15 days from the date of such notice. On such
payment, he shall issue a certificate in FORM GST DRC-12 specifying
o the details of the property,
o date of transfer
o the details of bidder
o the amount paid
and title of the property shall be deemed to be so transferred.
In case the highest bid is made by more than one person and one of them is a co-
owner of the property, he shall be deemed to be the successful bidder.

(13) Any stamp duty, tax or fee payable in respect of such transfer shall be paid to the
government by the person to whom the title of the property is transferred.

(14) In case the defaulter pays the amount under recovery and the expenses incurred
thereon before the issue of FORM GST DRC-17, the PO shall cancel the auction and
release the goods

(15) The PO shall cancel the process and proceed for re-auction in case
o no bid is received or
o the auction is non-competitive due to lack of
▪ adequate participation, or
▪ low bids

(1) A debt not secured by a negotiable instrument, a share in a corporation, or any other
movable property not in the possession of the defaulter except for that in custody of
any court shall be attached by FORM GST DRC-16 prohibiting –
(a) debt – the creditor from recovering and the debtor from paying off the debt,
till further order from the PO
(b) share – the person in whose name share may be standing from transferring
the same or receiving any dividend.
(c) any other property – the possessor from giving it to the defaulter.

(2) A copy of the order shall be

o affixed on some visible part of the PO’s office
o sent –
▪ debt – to the debtor

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▪ share – to the regd. address of the corporation

▪ any other property – to the possessor

(3) The said debtor may pay the indebted amount to the PO, and it shall be deemed to
be paid to the defaulter.

In case the property to be attached is in the custody of any court or Public Officer, the PO
shall send the order to such court/ officer, requesting to hold the property and any interest/
dividend payable thereon till the amount payable is recovered.

(1) In case the interest of the defaulter in a partnership property is to be attached, the PO
may order to charge the share of such partner in the partnership property and profits
with payment of due amount. The PO may appoint a receiver by the same or
subsequent order, who shall receive the profit share (declared or accruing) and any
other amount receivable by such partner. He may also direct the accounts and
enquiries and make an order for sale of such partnership interest if required.

(2) The other partners may redeem the interest charged or purchase the same in case
the sale is being directed.

The amount realised on sale of goods or properties for recovery purposes shall be –
(a) First, appropriated against administrative cost of the recovery process
(b) Next, appropriated against the recoverable amount
(c) Next, appropriated against any other amount due under GST laws
(d) Any balance, paid to the defaulter.

In case any amount is recoverable in accordance with section 79(1)(e), the PO shall send a
certificate to the Collector/ DC of the district or any other authorised officer in FORM GST
DRC-18, to recover the amount specified therein from the concerned person as if it were an
arrear of land revenue.

In case any amount is recoverable in accordance with section 79(1)(f), the PO shall make an
application to the appropriate Magistrate in FORM GST DRC-19, to recover the amount
specified thereunder from the concerned person as if it were a fine imposed by him under
the CrPC.

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In case any person has become surety for the amount due by the defaulter, he may be
proceeded against as if he were the defaulter.

No officer or any person involved in the organization of auction shall

o bid for,
o acquire or
o attempt to acquire
any interest in the property sold directly or indirectly.

No sale under this Chapter shall take place on

o a Sunday or
o other general holidays recognized by the Government or
o any notified holiday for the area in which the sale is to take place.

The PO may seek necessary assistance from the officer in-charge of the jurisdictional police
station and the said officer shall depute sufficient number of police officers for providing
such assistance.

On an application filed by a taxable person, the Commissioner may extend the time for
payment or allow the payment of dues other than the self-assessed amount in any return, in
max. 24 monthly instalments, subject to payment of interest u/s 50 and other prescribed
conditions.
However, in case there is default in payment of any instalment on its due date, the whole
outstanding balance payable on such date shall become due and payable forthwith and shall
be liable for recovery without any further notice.

(1) In case of an application filed by a taxable person in FORM GST DRC-20 seeking
extension of time u/s 80, the Commissioner shall ask for a report from the
jurisdictional officer about the financial ability of the taxable person to pay the said
amount.

(2) After considering the application and report, the Commissioner may issue an order in
FORM GST DRC-21 allowing the taxable person further time to make payment and/
or pay such amount in monthly instalments, not exceeding 24.

(3) Such facility shall not be allowed in case –

(a) the taxable person has already defaulted on payment of any amount under
GST laws for which the recovery process is on,

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(b) the taxable person has not been allowed to make payment in instalments in
the preceding FY under the GST laws.
(c) the instalment facility is sought for an amount less than ₹ 25,000.

Explain the concept of recovery in instalments under Section 80 of CGST Act 2017 giving
the circumstances in which such facility can be allowed and will not be allowed to the
defaulter.
[CMA-Final, Jun 2018]

After any amount becomes due on any taxable person, if he creates a charge on or parts with
the property belonging to him or in his possession through sale, mortgage, exchange etc. in
favour of any other person, with the intention of defrauding the Government, such transaction
shall be void against any claim in respect of any amount payable by such person.
However, such transaction shall not be void if it is made for adequate consideration, in good
faith and without notice of any such proceedings under this Act, or with prior permission of the
PO.

Overruling anything and everything, other than IBC, 2016, any amount payable by a person on
account of tax, interest or penalty, which he is liable to pay to the Government, shall be a first
charge on the property of such person.

During any proceeding u/s 62, 63, 64, 67, 73 or 74, where the Commissioner considers it to be
necessary, he may provisionally attach any property belonging to the taxable person, including
his bank account, by an order in writing, to protect the interest of the revenue.
Such provisional attachment shall cease to have effect after 1 year from the date of the order.

(1) An order u/s 83 shall be passed in FORM GST DRC-22, mentioning the details of
property to be attached.

(2) The PO shall send a copy of FORM GST DRC-22 to the concerned Authority to
encumber the said property, which shall be removed only on written instructions
from the PO

(3) In case of perishable/ hazardous property, if the taxable person pays the lower of
market value of such property or the amount payable, such property shall be
released by an order in FORM GST DRC-23 on proof of payment.

(4) In case the taxable person fails to pay such amount on perishable/ hazardous
property, the Commissioner may dispose of such property and the realized amount
shall be adjusted against the payable amount.

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(5) Any person whose property is so attached may file an objection against such
attachment within 7 days and the Commissioner may release the said property by
issuing an order in FORM GST DRC-23 after giving the person an opportunity of being
heard.

(6) The Commissioner may release the provisionally attached property by issuing an
order in FORM GST DRC-23, on being satisfied that the property attached was or is
no longer liable for attachment.

In case a notice of demand of Government dues is served upon a person and any appeal or
revision application is filed or any other proceeding is initiated in respect of such dues then –
(a) Where such dues are enhanced in such proceeding, the Commissioner shall serve upon
the person another notice of demand of the additional amount and any recovery
proceedings in relation to such dues may continue from the stage at which it stood
immediately before the disposal of such proceeding.
(b) In case such dues are reduced in such proceeding –
(i) A fresh notice of demand is not necessary
(ii) The Commissioner shall intimate about the reduction to such person and
appropriate authority with whom recovery proceedings are pending
(iii) Any recovery proceeding initiated before the disposal of the appeal may
continue from the stage at which it stood before such disposal

The order for reduction or enhancement of any demand u/s 84 shall be issued in FORM GST
DRC- 25

• Market Value [Sec. 2(73) of CGSTA]: shall mean the full amount which a recipient of a
supply is required to pay in order to obtain the goods or services or both of like kind
and quality at or about the same time and at the same commercial level where the
recipient and the supplier are not related.

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CGSTA, 2017
• Section 95: Definitions
• Section 96: Authority for Advance Ruling
• Section 97: Application for Advance Ruling
• Section 98: Procedure on Receipt of Application
• Section 99: Appellate Authority for Advance Ruling
• Section 100: Appeal to Appellate Authority
• Section 101: Orders of Appellate Authority
• Section 102: Rectification of Advance Ruling
• Section 103: Applicability of Advance Ruling
• Section 104: Advance Ruling to be void in certain circumstances
• Section 105: Powers of Authority and Appellate Authority

(a) Advance Ruling means a decision provided by the Authority or the Appellate Authority
to an applicant on matters or on questions specified in section 97(2) or section 100(1), in
relation to the supply of goods/ services being undertaken or proposed to be
undertaken by the applicant.
(b) Appellate Authority means the Appellate Authority for Advance Ruling constituted u/s
99.
(c) Applicant means any person registered or desirous of obtaining registration under this
Act.
(d) Application means an application made to the Authority u/s 97(1);
(e) Authority means the Authority for Advance Ruling, constituted u/s 99.

Subject to the provisions of this Chapter,

the AAR constituted under SGSTA/ UTGSTA
shall be deemed to be the AAR for that state/ UT

The Govt. shall appoint officers ranking JC and above as members of the AAR

(1) An applicant seeking advance ruling under this Chapter may make an application
stating the question on which advance ruling is sought in the prescribed manner and
with prescribed fee.

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(2) Categories of questions on which Advance Ruling may be sought –

(i) Classification of any goods/ services
(ii) Applicability of a notification issued under this Act
(iii) Determination of time and supply of goods/ services
(iv) Admissibility of ITC of tax paid or deemed to have been paid.
(v) Determination of the liability to pay tax on any goods/ services
(vi) Whether applicant is required to be registered
(vii) Whether any particular thing done amounts to supply

Discuss briefly provisions of CGST Act, 2017 regarding questions for which advance ruling
can be sought.
[CA-Final, May 2018]

Bharghav Pesticieds Ltd., a domestic company, intends to start a business in Kolkata,

involving supply of certain goods, mostly meant for foreign buyers in China. There is some
difficulty in the classification of the goods. Can the company seek advance ruling from the
Authority for Advance Ruling formed under CGST Act, 2017 in respect of the issue of
classification of goods? Can the company also seek ruling on issues involving place of
supply.
[CS-Prof, Jun 2018]

Yes. Yes.

Balaji & Co., a partnership firm, intend to start a business in Rajasthan, for supply of
garments, mostly meant for overseas buyers. As regards the classification of the goods,
there some difficulties in determination. Can the firm seek advance ruling from the
Authority for Advance ruling in respect of the issue of classification of goods? Can the firm
also seek ruling on issues involving place of supply of goods?
[CMA-Final, Jun 2018]

Yes. Yes.

(1) An advance ruling application u/s 97(1) shall be filed in FORM GST ARA-01 and shall
be accompanied by a fee of ₹ 5,000 to be deposited as per section 49.

(2) The application and all the relevant documents accompanying such application shall
be signed as per rule 26.

(1) On receipt of application, the AAR shall forward a copy to the concerned officer and
call upon him to furnish relevant records, if necessary.
However, where any such record has been called for by the AAR, it shall be returned to
the said concerned officer asap.

(2) After examining the application and the records called for
and after hearing the applicant and the concerned officer or their authorized
representative, the AAR may either admit or reject the application by order.
However, the AAR shall not admit any such application the question raised in which is

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already pending or decided in any proceedings in the case of an applicant under any of
the provisions of this Act.
However, no such application shall be rejected under this sub-section unless and
opportunity of hearing has been given.
And where the application is finally rejected, the reasons for such rejection shall be
specified in the order.

(3) A copy of every such order shall be sent to the applicant and the concerned officer

(4) Where an application is admitted, the AAR shall pronounce its advance ruling on the
question asked after examining further materials as placed before it by the applicant or
obtained by the AAR itself, and after providing an opportunity of hearing to the
applicant and the concerned officer or their authorized representatives.

(5) In case of difference of opinion amongst members of AAR, they shall state the points of
difference and refer the case to the AAAR for hearing and decision.

(6) The AAR shall pronounce its advance ruling in writing within 90 days from the date of
receipt of application.

(7) A duly signed and certified copy of this pronouncement shall be sent to the applicant,
the concerned officer and the jurisdictional officer.

Any member of the AAR shall certify a copy of the advance ruling to be a true copy of its
original.

Briefly explain the procedure to be followed by the Authority for Advance Ruling on receipt
of the application for Advance ruling under section 98 of CGST Act, 2017.
[CA-Final, Nov 2018]

Subject to the provisions of this Chapter,

the AAAR constituted under SGSTA/ UTGSTA
shall be deemed to be the AAAR for that state/ UT.

(1) The concerned officer, the jurisdictional officer or an applicant aggrieved by any
pronouncement of AAR may appeal to the AAAR.

(2) Every such appeal shall be filed within 30 days from the date on which the ruling
sought to be appealed is communicated to the trio.
However, on sufficient cause being shown, the AAAR may extend this period by a
further period not exceeding 30 days.

(3) Every appeal shall be accompanied with prescribed fee.

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(1) An appeal against advance ruling shall be filed in FORM GST ARA-02 and shall be
accompanied by a fee of ₹ 10,000 to be deposited as per section 49.

(2) An appeal against advance ruling shall be filed by the concerned officer referred u/s
100 in FORM GST ARA-03 and no fee shall be payable by the said officer for such
appeal.

(3) The said appeal and all relevant documents shall be signed –
(a) in case of concerned officer – by an officer authorised by such officer
(b) in case of applicant – as per Rule 26

Circular No. 25/ 25/2017

Manual filing of applications for Advance Ruling and appeals before Appellate Authority for
Advance Ruling

Form and Manner of Application to the Authority for Advance Ruling

3. An application for obtaining an advance ruling under sub-section (1) of section 97 of
the CGST Act and the rules made thereunder, shall be made in quadruplicate, in
FORM GST ARA-01. The application shall clearly state the question on which the
advance ruling is sought. The application shall be accompanied by a fee of five
thousand rupees which is to be deposited online by the applicant, in the manner
specified under section 49 of the CGST Act. It is reiterated that though the application
shall be filed manually till the advance ruling module is made available on the
common portal, the fee is required to be deposited online in terms of section 49 of
the CGST Act.

4. In order to make the payment of fee for filing an application for Advance Ruling on
the common portal, the applicant has to fill his details using “Generate User ID for
Advance Ruling” under “User Services”. After entering the email id and mobile
number, a One Time Password (OTP) shall be sent to the email id. Upon submission
of OTP, Systems shall generate a temporary ID and send it to the declared email and
mobile number of the applicant. On the basis of this ID, the applicant can make the
payment of the fee of ₹ 5,000/ - each under the CGST and the respective SGST Act.
The applicant is then required to download and take a print of the challan and file the
application with the Authority for Advance Ruling.

5. The application, the verification contained therein and all the relevant documents
accompanying such application shall be signed –
2.1 in the case of an individual, by the individual himself or where he is absent from
India, by some other person duly authorised by him in this behalf, and where the
individual is mentally incapacitated from attending to his affairs, by his guardian
or by any other person competent to act on his behalf,
2.2 in the case of a Hindu Undivided Family, by a Karta and where the Karta is
absent from India or is mentally incapacitated from attending to his affairs, by
any other adult member of such family or by the authorised signatory of such
Karta;
2.3 in the case of a company, by the Chief Executive Officer or the authorised
signatory thereof;
2.4 in the case of a Government or any Governmental agency or local authority, by
an officer authorised in this behalf;
2.5 in the case of a firm, by any partner thereof, not being a minor or the authorised
signatory thereof;

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2.6 in the case of any other association, by any member of the association or
persons or the authorised signatory thereof;
2.7 in the case of a trust, by the trustee or any trustee or the authorised signatory
thereof; or
2.8 in the case of any other person, by some person competent to act on his behalf,
or by a person authorised in accordance with the provisions of section 48 of the
CGST Act.

Form and Manner of Appeal to the Appellate Authority for Advance Ruling
6. An appeal against the advance ruling issued under sub-section (6) of section 98 of
the CGST Act and the rules made thereunder shall be made by an applicant in
quadruplicate, in FORM GST ARA-02 and shall be accompanied by a fee of ten
thousand rupees to be deposited online, in the manner specified in section 49 of the
CGST Act. It is reiterated that though the application shall be filed manually till the
advance ruling module is made available on the common portal, the fee is required
to be deposited online in terms of section 49 of the CGST Act. The payment of fee
shall be made as detailed in para 4 above.

7. An appeal made by the concerned officer or the jurisdictional officer referred to in

section 100 of the CGST Act and the rules made thereunder shall be filed in
quadruplicate, in FORM GST ARA-03 and no fee shall be payable by the said officer
for filing the appeal. As per section 100 (2) of the CGST Act, the appeal shall be filed
within a period of thirty days from the date on which the ruling sought to be
appealed against is communicated to the applicant or the concerned officer or the
jurisdictional officer, as the case may be.

8. The appeal, the verification contained therein and all the relevant documents
accompanying such appeal shall be signed-
2.1 in the case of the concerned officer or jurisdictional officer, by an officer
authorised in writing by such officer; and
2.2 in the case of an applicant, in the manner specified in Para 5 above.

9. The application for advance ruling or the appeal before the Appellate Authority shall
be filed in the jurisdictional office of the respective State Authority for Advance
Ruling or the State Appellate Authority for Advance Ruling respectively.

10. If the space provided for answering any item in the Forms is found to be insufficient,
separate sheets may be used. Further, the application, the verification appended
thereto, the Annexures to the application and the statements and documents
accompanying the Annexures must be self-attested

(1) After giving the parties to the appeal or reference an opportunity of being heard, the
AAAR may pass such order as it thinks fit, confirming or modifying the ruling.

(2) Such order shall be passed within 90 days from the date of filing appeal u/s 100 or a
reference u/s 98(5).

(3) In case of difference of opinion amongst members of AAAR on any point, it shall be
deemed that no advance ruling can be issued in respect of the question under appeal
or reference.

(4) A duly signed and certified copy of the pronouncement by the AAAR shall be sent to
the applicant, the concerned officer, the jurisdictional officer and to the AAR.

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A copy of the advance ruling pronounced and duly signed by the members of AAAR shall be
sent to –
(a) the applicant and the appellant
(b) the concerned officer of CGST and SGST/ UTGST
(c) the jurisdictional officer of CGST and SGST/ UTGST, and
(d) the AAR
as per section 101(4).

Briefly explain whether an appeal could be filed before the Appellate Authority against
order of Authority for Advance Ruling (AAR), with reference to sections 100 and 101 of the
CGST Act, 2017.
[CA-Final, May 2019]

The AAR or the AAAR may amend any order passed u/s 98 or 101, in order to rectify any
apparent error which is noticed by the AAR or AAAR suo moto, or is brought to his notice by
the concerned officer, jurisdictional officer, applicant or the appellant within 6 months from the
date of the order.
However, any such rectification that enhances the tax liability or reduced the amount
admissible as ITC shall be shall not be made unless the applicant/ appellant has been given an
opportunity of being heard.

(1) The advance ruling pronounced by the AAR or the AAAR shall be binding only –
(a) On the applicant
(b) On the concerned officer/ jurisdictional officer in respect of the applicant.

(2) It shall be binding unless the law, facts or circumstances supporting the original
advance ruling has changed.

(1) Where the AAR or the AAAR finds that the advance ruling pronounced by it has been
obtained by the applicant/ appellant by fraud or misrepresentation, it may declare by
order such ruling to be void ab-initio and all the provisions of this Act shall apply as if
no such ruling had ever been made.
However, no such order shall be passed without granting an opportunity of being heard
to the applicant/ appellant.

(2) A copy of this order shall be sent to the applicant, the concerned officer and the
jurisdictional officer.

Advance ruling can be declared to be void by the Authority if it has been obtained by an
applicant/ appellant by:
(a) Fraud

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(b) Suppression of facts

(c) Misrepresentation of facts
(d) Any one of the above
[CMA-Final, Jun 2018]

(d) Any one of the above

(1) For the purpose of exercising its powers regarding –

(a) Discovery and inspection
(b) Enforcing the attendance of any person and examining him on oath
(c) Issuing commissions and compelling production of books of account and other
records
the AAR and AAAR shall have all the powers of a civil court under CPC, 1908

(2) The AAR/ AAAR shall be deemed to be a civil court for the purpose of CrPC and every
proceeding before them shall be deemed to be a judicial proceeding under the IPC.

• Authorized Representative [Sec. 116(2) of CGSTA]: shall mean a person authorised by

the person referred to in sub-section (1) to appear on his behalf, being—
(a) his relative or regular employee; or
(b) an advocate who is entitled to practice in any court in India, and who has not
been debarred from practicing before any court in India; or
(c) any chartered accountant, a cost accountant or a company secretary, who
holds a certificate of practice and who has not been debarred from practice;
or
(d) a retired officer of the Commercial Tax Department of any State Government
or Union territory or of the Board who, during his service under the
Government, had worked in a post not below the rank than that of a Group-B
Gazetted officer for a period of not less than two years:
Provided that such officer shall not be entitled to appear before any
proceedings under this Act for a period of one year from the date of his
retirement or resignation; or
(e) any person who has been authorised to act as a goods and services tax
practitioner on behalf of the concerned registered person.

The proceedings under the CGST Act, 2017 before the authorities including the Appellate
Tribunal can be attended by the “Authorized Representative”. Explain who can act as an
authorized representative under the Act.
[CS-Prof, Dec 2017]

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CGSTA, 2017
• Section 107: Appeals to AA
• Section 108: Powers of RA
• Section 109: Constitution of AT and benches thereof
• Section 110: President and members of AT
• Section 111: Procedure before AT
• Section 112: Appeals to AT
• Section 113: Orders of AT
• Section 114: Financial and administrative powers of President
• Section 115: Interest on refund of amount paid for admission of appeal
• Section 116: Appearance by authorized representative
• Section 117: Appeal to HC
• Section 118: Appeal to SC
• Section 119: Sums due to be paid notwithstanding appeal, etc.
• Section 120: Appeal not to be filed in certain cases
• Section 121: Non-appealable decisions and orders

(1) Any person aggrieved by any decision/ order

passed under the GST Acts
by an adjudicating authority
may appeal to the prescribed AA
within 3 months from the date of communication of such decision/ order.

(1) An appeal to the AA shall be filed in FORM GST APL-01 along with the relevant
documents and a provisional acknowledgement shall be issued to the appellant
immediately.

(2) The grounds of appeal and the form of verification as contained in FORM GST APL-01
shall be signed by the appellant as per Rule 26.

(3) The appellant shall submit a certified copy of the decision/ order appealed against
within 7 days of filing FORM GST APL-01 and a final acknowledgement shall be
issued thereafter by the AA in FORM GST APL-02 indicating appeal number. The
appeal shall be treated as filed only when the final acknowledgement is issued.
Now, in case the said certified copy is filed
o Within 7 days of filing FORM GST APL-01 – The date of filing of appeal shall
be the date of issue of provisional acknowledgement
o After 7 days of filing FORM GST APL-01 – The date of filing of appeal shall be
the date of submission of such copy.

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(2) The Commissioner may examine the record of any proceedings in which
an adjudicating authority has passed any decision under the GST Acts
in order to satisfy himself regarding the legality of the said decision
and may order any subordinate officer
to apply to the AA within 6 months from the date of communication of the said decision
for the determination of such points arising out of the said decision
as may be specified in the said order.

(1) An application to the AA u/s 107(2) shall be made in FORM GST APL-03 along with
the relevant documents.

(2) The appellant shall submit a certified copy of the decision/ order appealed against
within 7 days of filing FORM GST APL-03 and an appeal number shall be generated
thereafter by the AA

Any person/ officer applying u/s 107(1)/ (2) may appeal to –

(a) The Commissioner (Appeals) – against order passed by the AC/ JC
(b) Any officer ranking JC (Appeals) and above – against order passed by the AC/ DC/
Superintendent

(3) The application filed by an authorised officer under (2) above

shall be treated as an appeal made against the order of the adjudicating authority
and the said authorized officer shall be treated as the appellant,
thereby applying the provisions of the Act accordingly.

(4) The AA may extend the aforementioned period of 3/ 6 months by 1 month

if he is satisfied that the appellant was prevented from appealing by sufficient cause.

(5) Every appeal under this section shall be in the prescribed form
and verified in the prescribed manner.

(6) No appeal shall be filed under (1), unless the appellant has paid —
(a) in full, such part of the tax, interest, fine, fee and penalty arising from the
impugned order, as is admitted by him; and
(b) 10% of the remaining amount of tax in dispute arising from the said order,
in relation to which the appeal has been filed.
subject to max ₹ 25 crores.

(7) Where the appellant has paid the aforementioned amount, the recovery proceedings
for the balance amount shall be deemed to be stayed.

(8) The AA shall give the appellant an opportunity of being heard

(9) The AA may grant time to the parties and adjourn the hearing for sufficient reasons to
be recorded in writing.
However, the said adjournment shall not be allowed more than 3 times to a party.

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(10) The AA may allow the appellant to add any ground of appeal
at the time of hearing,
which was not specified earlier in the application,
if it is satisfied that the omission was not wilful or unreasonable.

(11) After making necessary inquiry, the AA shall pass an order

confirming/ modifying/ annulling the decision/ order appealed against
but shall not refer the case back to the adjudicating authority that passed the said
decision/ order.
However, an order
o enhancing any fee/ penalty/ fine in lieu of confiscation or
o confiscating goods of greater value or
o reducing the amount of refund/ ITC
shall not be passed unless the appellant has been given an opportunity of being heard.
Further, where the AA opines that any tax has
o not been paid
o short paid
o erroneously refunded
or ITC has been
o wrongly availed
o wrongly utilized
no order shall be passed requiring the appellant to pay such tax/ ITC
unless he is given the SCN against the proposed order
and the order is passed within the time limit u/s 73/ 74

(12) The order of the AA disposing of the appeal shall be in writing

and shall state
o The points for determination,
o The decision on such points and
o The reasons for such decision.

(13) Where possible, the AA shall hear and decide every appeal within 1 year from the date
on which it is filed.
However, where the issuance of order is stayed by the order of court/ AT
the period of such stay shall be excluded in computing the 1 yr. period.

(14) and (15) On disposal of the appeal, the AA shall communicate the order passed by it to
o The appellant,
o The respondent,
o The adjudicating authority,
o The jurisdictional Commissioner of CGST and
o The jurisdictional Commissioner of SGST/ UTGST

(16) Every order passed under this section shall be final and binding on the parties,
subject to Sections 108/ 113/ 117/ 118.

XY Company received an adjudication order passed by the Assistant Commissioner of

Central Tax on 01-11-2017 under section 73 of the CGST Act, 2017 wherein it was decided as
follows:
Particulars
CGST and SGST due (Total) ₹ 6,00,000
Interest @ 18% p.a. for number of delayed days
Penalty ₹ 60,000

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The assessee filed an appeal before the Appellate Authority on 26-11-2017.

Case I
How much the company has to pay as pre-deposit of duty under section 107(6) of the CGST
Act, 2017?
Case II
Whether your answer would be different if the assessee appeals only against part of the
demanded amount say ₹ 4,00,000 and admits the balance liability of tax amounting to ₹
2,00,000 arising from the said order.
[CA-Final, May 2018]

(1) Along with its order u/s 107(11), the AA shall issue a summary order in FORM GST
APL-04 clearly indicating the final demand amount.

(1) Subject to Section 121, the RA may

(a) On his own motion, or
(b) Upon information received by him, or
(c) On request from the Commissioner of SGST/ UTGST
examine the record of any proceedings,
and if he considers that any decision passed by any subordinate officer is
o erroneous in so far as it is prejudicial to the interest of the revenue and
o is illegal or improper or has not taken into account certain material facts
▪ available at the time of issuance of the order, or
▪ not available at the time of issuance of the order, or
▪ in consequence of an observation by the CAG of India,
he may stay the operation of such decision for a befitting period
and after giving the concerned person an opportunity of being heard and making
necessary inquiry
pass an order enhancing/ modifying/ annulling the said decision.

(2) The RA shall not exercise any power under (1) above, if –
(a) the order has been subject to an appeal u/s 107/ 112/ 117/ 118, or
(b) the 6 months period as per section 107(2) has not yet expired or
more than 3 yrs. have expired after the passing of the decision/ order sought to
be revised, or
(c) the order has already been taken for revision under this section at an earlier
stage, or
(d) the order has been passed in exercise of the powers under (1) above.
Moreover, the RA may pass an order under (1) on any point which has not been raised
and decided in an appeal referred to in (a) above,
o before the expiry of 1 yr. from the date of the order in such appeal or
o before the expiry of 3 yrs. as referred in (b) above,
whichever is later.

The original adjudicating authority confirmed a demand of GST of ₹ 42,50,000 with

interest and imposed a penalty of ₹ 4,25,000 in its order dated 1st September, 2017. The
assessee filed an appeal before appellate authority challenging the demand as well as
penalty. The internal audit party after an audit of the records of the assessee, submitted a

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note to the Commissioner that actual amount demanded should have been ₹ 48,50,000.
While the issue was pending before the appellate authority, based on the note, the
Commissioner stayed the order of the original authority and issued a show cause notice on
15th March, 2018, proposing revision of the order of the original authority and revise the
demand on the basis of the audit note. Examine the correctness of the action taken by the
Commissioner in accordance with the provisions of GST law.
[CA-Final, Nov 2018]

(3) Every order passed under this section shall be final and binding on the parties,
subject to Sections 113/ 117/ 118.

(4) If the said order involves an issue on which the AT (or HC) has given its decision in
some other proceedings
and an appeal to the HC (or SC) against such decision is pending
the period spent between
o the date of the decision of the AT (or HC) and
o the date of the decision of the HC (or SC)
shall be excluded in computing the period of limitation as per (2)(b) above
where revision proceedings have been initiated by way of issue of notice under this
section.

(5) Where the issuance of the order under (1) is stayed by the order of court/ AT
the period of such stay shall be excluded in computing the limitation period under
(2)(b) above.

NOTE: In this section, “decision” includes intimation given by any officer lower in rank than the
RA.

(1) Where the RA decides to pass a revision order u/s 108, which is likely to adversely
affect the person, the RA shall serve a notice on him in FORM GST RVN-01 and shall
give him a reasonable opportunity of being heard.

(2) The RA shall issue a summary of the order in FORM GST APL-04 along with its order
u/s 108(1), clearly indicating the final amount of demand confirmed.

(1) On recommendations of The Council, The Government shall constitute an AT known as

Goods and Services Tax Appellate Tribunal (GSTAT) for hearing appeals against the
orders passed by the AA/ RA.

(2) The powers of the AT shall be exercisable by

o the National Bench and its Regional Benches

o the State Bench and its Area Benches

(3) The National Bench of the AT shall be situated at New Delhi

which shall be presided over by the President and shall consist of
o One Technical Member (Centre) and
o One Technical Member (State).

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(4) On recommendations of The Council, The Government shall constitute the required no.
of Regional Benches, and such Regional Benches shall consist of
o A Judicial Member,
o One Technical Member (Centre) and
o One Technical Member (State).

(5) The National Bench/ Regional Benches of the AT shall have jurisdiction to hear appeals
against the orders passed by the AA/ RA
in the cases where one of the issues involved relates to the place of supply.

(6) The Government shall notify a State Bench for each State/ UT
for exercising the powers of the AT within the concerned State/ UT.
Moreover, on receipt of request from any SG, the Government shall
constitute recommended number of Area Benches in that State.
Also,
o on receipt of a request from any State or
o on its own motion for a UT,
the Government may notify the AT in a State to act as the AT for any other State/ UT
subject to prescribed terms and conditions.

(7) The State Bench/ Area Benches shall have jurisdiction to hear appeals against the
orders passed by the AA/ RA
in the cases involving matters other than those referred in (5).

(9) Each State Bench and Area Benches of the AT shall consist of
o A judicial member,
o One technical member (centre) and
o One technical member (state)
and the SG may designate the senior most Judicial Member in a State as the State
President.
(8) The President and the State President shall distribute the business or transfer cases
among Regional Benches/ Area Benches by general/ special order.

(10) In the absence of a Member in any Bench due to vacancy or otherwise,

any appeal may be heard by a Bench of two Members
with the prior approval of the President/ State President.
However, any appeal where
o the tax/ ITC involved or
o the difference in tax/ ITC involved or
o the amount of fine/ fee/ penalty determined in any order appealed against
does not exceed ₹ 5,00,000 and
which does not involve any question of law
may be heard by a bench consisting of a single member
with the prior approval of the President and subject to prescribed conditions.

(11) If the Members of the National Bench/ Regional Benches/ State Bench/ Area Benches
differ in opinion on any point(s),
it shall be decided according to the opinion of the majority, if there is a majority,
but if the Members are equally divided, they shall state the point(s) on which they
differ,
and the case shall be referred by the President/ State President to one or more of the

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other Members of the National Bench/ Regional Benches/ State Bench/ Area Benches
for hearing on such point(s)
and such point(s) shall be decided according to the opinion of the majority of Members
who have heard the case, including those who first heard it.

(12) For administrative convenience, the Government may transfer –

(a) Any Judicial Member/ Technical Member (State) from one Bench to another
Bench, whether National or Regional; or
(b) Any Technical Member (Centre) from one Bench to another Bench, whether
National/ Regional/ State/ Area.
in consultation with the President.

(13) For administrative convenience, the SG may transfer a Judicial Member/ Technical
Member (State) from one Bench to another Bench within the State, in consultation with
the State President.

(14) No act or proceedings of the AT shall be questioned or shall be invalid

merely on the ground of any vacancy or defect in the constitution of the AT.

(1) The following persons shall be qualified for appointment as –

(a) The President –
▪ ex-judge of the SC, or
▪ present or ex-Chief Justice of a HC, or
▪ present or ex-judge of a HC
who have served in that capacity for at least 5 yrs.
(b) A Judicial Member –
▪ ex-judge of the HC, or
▪ present or ex-District Judge qualified to be appointed as a judge of a HC,
or
▪ present or ex-member of Indian Legal Service and has held a post
ranking Additional Secretary and above for 3 yrs.
(c) A Technical Member (Centre) –
▪ present or ex-member of the Indian Revenue (Customs and Central
Excise) Service (Group A), with 15 yrs. completed in the said Group.
(d) A Technical Member (State) –
▪ present or ex-officer of the SG ranking Additional Commissioner or
above of VAT/ SGST or any other notified rank,
with at least 3 yrs. experience in the administration of any previous law
or the SGSTA or in the field of finance and taxation.

(2) The President and the Judicial Members of the National Bench/ Regional Benches shall
be appointed by the Government after consultation with the CJI.
However, in case of any vacancy in the office of the President by reason of death,
resignation or otherwise, the senior most member of the National Bench shall act as the
President unless a new President is appointed.
Further, where the President is unable to discharge his function sue to absence. Illness
or any other cause, the senior most member of the National Bench shall discharge such
functions unless the President resumes his duties.

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 GST Simplified™ Ready Reckoner for Students and Professionals

(3) The Technical Member (Centre) and Technical Member (State) of the National Bench/
Regional Benches shall be appointed by the Government on the recommendations of a
Selection Committee consisting of prescribed persons.

(4) The Judicial Member of the State Bench/ Area Benches shall be appointed by the SG
after consultation with the CJ of the HC of the State.

(5) The Technical Member (Centre) of the State Bench/ Area Benches shall be appointed by
the CG and
Technical Member (State) of the State Bench/ Area Benches shall be appointed by the
SG
in the prescribed manner.

(6) No appointment of the members of the AT shall be invalid merely due to any vacancy
or defect in the constitution of the Selection Committee.

(7) Before appointing any person as the President or Members of the AT, the CG/ SG shall
satisfy itself that such person does not have any financial or other interests which may
prejudicially affect his functions.

(8) The President, State President and the Members of the AT shall be entitled to
prescribed salary and allowances.
Moreover, the said salary and allowances shall not be varied to their disadvantage after
their appointment.
Tenure of Earlier of… Eligible for
Reappointment
(9) The President 3 yrs. or until he is 70 yrs. of Yes
age
(10) The State President 3 yrs. or until he is 65 yrs. of Yes
age
The Judicial Member 3 yrs. or until he is 65 yrs. of Yes
age
(11) The Technical Member 5 yrs. or until he is 65 yrs. of Yes
(Centre) age
The Technical Member 5 yrs. or until he is 65 yrs. of Yes
(State) age

(12) The President, State President or any Member may resign from his office by addressing
a notice in writing under his hand to the CG/ SG.
However, the President/ State President/ Member shall continue to hold office -
o for 3 months from the date of receipt of notice by the CG/ SG, or
o until a duly appointed successor enters the office, or
o until the expiry of his term of office
whichever is earliest.

(13) In case of
(a) the President, Judicial Members and Technical Members of the National Bench/
Regional Benches or
(b) the Technical Members (Centre) of the State Bench/ Area Benches
the CG may (after consultation with the CJI), and in case of
o the State President, Judicial Members and Technical Members (State) of the
State Bench/ Area Benches

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the SG may (after consultation with the CJ of HC)

may remove such President/ Member from the office, who –
(a) has been adjudged an insolvent; or
(b) has been convicted of an offence which, in the opinion of such Government
involves moral turpitude; or
(c) has become physically or mentally incapable of acting as such President, State
President or Member; or
(d) has acquired such financial or other interest as is likely to affect prejudicially his
functions as such President, State President or Member; or
(e) has so abused his position as to render his continuance in office prejudicial to
the public interest
However, the President, State President or the Member shall not be removed under (d)
and (e), unless he has been informed of the charges against him and has been given an
opportunity of being heard.

(14) Without affecting sub-section (13), -

(a) After an inquiry made by a SC nominated by the CJI,
the President/ Judicial Member/ Technical Member of the National Bench/
Regional Benches, Technical Member (Centre) of the State Bench/ Area Benches
in respect of whom a reference has been made by the CG
shall be removed from their office
on the ground of proved misbehaviour or incapacity
only by an order by the CG and after giving the said President or Member an
opportunity of being heard.
(b) After an inquiry made by a HC judge nominated by the CJ of the concerned HC,
the Judicial Member/ Technical Member (State) of the State Bench/ Area
Benches
in respect of whom a reference has been made by the SG
shall be removed from their office
on the ground of proved misbehaviour or incapacity
only by an order by the SG and after giving the said President or Member an
opportunity of being heard.

(15) The CG may suspend

the President/ Judicial Member/ Technical Members of the National Bench/ Regional
Benches or
the Technical Member (Centre) of the State Bench/ Area Benches
from office
in respect of whom a reference has been made to the SC judge under (14) above,
with the concurrence of the CJI.

(16) The SG may suspend

the Judicial Member/ Technical Member (State) of the State Bench/ Area Benches
from office
in respect of whom a reference has been made to the HC judge under (14) above,
with the concurrence of the CJ of HC.

(17) Subject to Article 220 of The Constitution

the President/ State President/ other Members
on ceasing to hold their office,
shall not be eligible to appear/ act/ plead
before the National Bench and the Regional Benches or the

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State Bench and the Area Benches thereof

where he was the President/ Member.

(1) The AT shall not be bound by the procedure laid down in the CPC, 1908
while disposing any proceedings/ appeal before it
but shall be guided by the principles of natural justice and
shall have power to regulate its own procedure, under the provisions of this Act.

(2) The AT shall have the same powers as are vested in a civil court under the CPC, 1908
while trying a suit in respect of the following matters –
(i) summoning and enforcing the attendance of any person and examining him on
oath;
(ii) requiring the discovery and production of documents;
(iii) receiving evidence on affidavits;
(iv) subject to the provisions of sections 123 and 124 of the Indian Evidence Act,
1872, requisitioning any public record or document or a copy of such record or
document from any office;
(v) issuing commissions for the examination of witnesses or documents;
(vi) dismissing a representation for default or deciding it ex parte;
(vii) setting aside any order of dismissal of any representation for default or any
order passed by it ex parte; and
(viii) any other matter which may be prescribed.

(3) Any order made by the AT may be enforced by it

as if it were a decree made by a court,
and it shall be lawful for the AT to send for execution of its orders to the court
in whose jurisdiction –
(a) The regd. office of the company is situated (in case of an order against a
company), or
(b) The person concerned voluntarily resides/ carries on business (in case of an
order against any other person)

(1) Any person aggrieved by an order passed against him u/s 107/ 108
may appeal to the AT against such order
within 3 months from the date such order is communicated to the said person.

(2) The AT may refuse to admit any such appeal where

o the tax/ ITC involved, or
o the difference in tax/ ITC involved or
o the amount of fine/ fee/ penalty determined by such order,
does not exceed ₹ 50,000.

(3) The Commissioner may examine the record of any order

passed by the AA/ RA
in order to satisfy himself regarding the legality of the said order
and may order any subordinate officer
to apply to the AT within 6 months from the date of communication of the said order

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for the determination of such points arising out of the said decision
as may be specified in his order.

(4) The application filed by an authorised officer under (3) above

shall be treated as an appeal made against the order of the AA/ RA
and the provisions of the Act shall apply accordingly.

(5) On receipt of notice that an appeal has been filed under this section,
the party against whom the appeal has been preferred may file
a memorandum of cross-objections within 45 days of such receipt
against any part of the order appealed against,
and such memorandum shall be disposed of by the AT
as an appeal presented under (1).

(6) The AT may

o admit an appeal - within 3 months after the expiry of the period under (1), or
o permit the memorandum – within 45 days after the expiry of the period under
(5)
if it is satisfied that there was sufficient cause for not presenting it within the said
period.

(7) The appeal to the AT shall be in the prescribed form and accompanied by prescribed
fee, to be verified in the prescribed manner.

(8) No appeal shall be filed under (1), unless the appellant has paid —
(a) in full, such part of the tax, interest, fine, fee and penalty arising from the
impugned order, as is admitted by him; and
(b) 20% of the remaining amount of tax in dispute arising from the said order,
in relation to which the appeal has been filed,
subject to max. ₹ 50 crores,
in addition to the amount paid u/s 107(6).

(9) Where the appellant has paid the aforementioned amount, the recovery proceedings
for the balance amount shall be deemed to be stayed.

(10) Every application made before the AT –

(a) in an appeal for rectification of error or for any other purpose, or
(b) for restoration of an appeal or an application,
shall be accompanied by prescribed fees.

(1) An appeal to the AT u/s 112(1) shall be filed in FORM GST APL-05 along with the
relevant documents and a provisional acknowledgement shall be issued to the
appellant immediately.

(2) The memorandum of cross-objections u/s 112(5) shall be filed in FORM GST APL-06.

(3) The appeal and the memorandum of cross-objections shall be signed as per Rule 26.

(4) The appellant shall submit a certified copy of the decision/ order appealed against
within 7 days of filing FORM GST APL-05, along with the fees specified in sub-rule (5)

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and a final acknowledgement shall be issued thereafter by the AA in FORM GST APL-
02 indicating appeal number. The appeal shall be treated as filed only when the final
acknowledgement is issued.
Now, in case the said certified copy is filed
o Within 7 days of filing FORM GST APL-05 – The date of filing of appeal shall
be the date of issue of provisional acknowledgement
o After 7 days of filing FORM GST APL-05 – The date of filing of appeal shall be
the date of submission of such copy.

(5) The fees for filing of appeal or restoration of appeal shall be ₹ 1,000 for every ₹
1,00,000 of
o tax/ ITC involved or
o the difference in tax/ ITC involved or
o the fine/ fee/ penalty determined in the order appealed against
subject to ₹ 25,000.

(6) There shall be no fee for application made before the AT for rectification of errors
referred u/s 112(10).

(1) An application to the AT u/s 112(3) shall be filed in FORM GST APL-07, along with the
relevant documents.

(2) The appellant shall submit a certified copy of the decision/ order appealed against
within 7 days of filing FORM GST APL-07 and the registrar shall generate an appeal
number.

(1) The appellant shall not be allowed to produce any oral/ documentary evidence other
than the evidence produced by him during the proceedings before the adjudicating
authority/ AA except in the following circumstances –
(a) where the adjudicating authority/ AA has refused to admit evidence, which
ought to have been admitted; or
(b) where the appellant was prevented by sufficient cause from producing the
evidence which he was called upon to produce by the adjudicating authority/
AA; or
(c) where the appellant was prevented by sufficient cause from producing
before the adjudicating authority/ AA any evidence which is relevant to any
ground of appeal; or
(d) where the adjudicating authority/ AA has made the order appealed against
without giving sufficient opportunity to the appellant to adduce evidence
relevant to any ground of appeal.

(2) No evidence shall be admitted under (1) above unless the AA/ AT records the reasons
in writing.

(3) The AA/ AT shall not take any evidence produced under (1) above unless the
adjudicating authority has been allowed a reasonable opportunity to –
(a) examine the evidence or to cross-examine any witness produced by the
appellant, or
(b) produce any evidence/ witness in rebuttal of the evidence produced by the
appellant under sub-rule (1)

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(4) This rule shall not affect the power of the AA/ AT to direct the production of any
document, or the examination of any witness, to enable it to dispose of the appeal.

Explain briefly the provisions regarding mandatory pre-deposit to be made before filing an
appeal before Appellate Authority and Tribunal as per CGST Act, 2017.
[CA-Final, May 2018]

Rule 112 of the CGST Rules lays down that the appellant shall not be allowed to produce
before the Appellate Authority (AA) or the Tribunal any evidence, whether oral or
documentary, other than the evidence produced by him during the course of the
proceedings before the adjudicating authority or, as the case may be, the AA.
What are the exceptional circumstances specified in the rule where the production of
additional evidence will be allowed? Can AA or the Tribunal direct production of any
document or examination of any witness?
[CA-Final, Nov 2018]

(1) After giving the parties to the appeal an opportunity of being heard, the AT may pass
orders
confirming/ modifying/ annulling the order appealed against or
refer the case back to the AA/ RA/ original adjudicating authority
for a fresh adjudication or decision after taking additional evidence, if necessary.

(2) The AT may grant time to the parties and adjourn the hearing for sufficient reasons to
be recorded in writing.
However, the said adjournment shall not be allowed more than 3 times to a party.

(3) The AT may amend any order passed by it under (1) above
to rectify any error apparent on the face of the record,
if such error is
o noticed by it suo moto, or
o brought to its notice by
▪ the Commissioner of CGST/ SGST/ UTGST or
▪ the other party to the appeal
within 3 months from the date of the order.
However, no amendment
o enhancing an assessment or
o reducing a refund/ ITC or
o otherwise increasing the liability of the other party
shall be made, unless the party has been given an opportunity of being heard.

(4) Where possible, the AT shall hear and decide every appeal within 1 year from the date
on which it is filed.

(5) and (6) On disposal of the appeal, the AT shall communicate the order passed by it to
o The AA/ RA/ original adjudicating authority,
o The appellant, and
o The jurisdictional Commissioner of SGST/ UTGST

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(6) Every order passed under this section shall be final and binding on the parties,
subject to Sections 117/ 118.

(3) The jurisdictional officer shall issue a statement in FORM GST APL-04 clearly
indicating the final demand amount confirmed by the AT.

The President shall exercise the prescribed financial and administrative powers
over the National Bench and Regional Benches of the AT.
Moreover, the President shall have the authority to delegate
his financial and administrative powers
to any other Member or officer of the National Bench and Regional Benches
on the condition that he shall continue to act under the direction, control and supervision of the
President
while exercising such delegated powers.

In case an amount paid by the appellant u/s 107(6) or 112(8) is required to be refunded
on order of the AA/ AT,
interest u/s 56 shall be payable in respect of such refund
from the date of payment
till the date of refund.

(1) Any person who is required to appear before an officer/ AA/ AT

in connection with any proceedings
may appear by an authorized representative
except for when required under the Act to appear personally for examination on oath
or affirmation.

(3) Any person –

(a) who has been dismissed/ removed from Government service, or
(b) who is convicted of an offence connected with any proceedings under
▪ the CGSTA/ SGSTA/ IGSTA/ UTGSTA or
▪ the existing laws or
▪ the Acts passed by a SG dealing with the imposition of taxes on sale of
goods or supply of goods/ services, or
(c) who is found guilty of misconduct by the prescribed authority, or
(d) who has been adjudged as an insolvent
shall not be qualified to represent any person under (1) –
(i) for all times - in case of (a), (b) and (c), and
(ii) for the period during which the insolvency continues – in case of (d)

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(4) Any person who has been disqualified under the SGSTA/ UTGSTA
shall be deemed to be disqualified under this Act.

Where an authorized representative, except a practicing advocate/ CA/ CMA/ CS, is found
guilty of misconduct in connection with any proceedings under the Act, the Commissioner
may disqualify him from appearing as an authorized representative, after providing him an
opportunity of being heard.

(1) Any person aggrieved by any order passed by the State Bench/ Area Benches of the AT
may file an appeal to the HC
and the HC may admit such appeal,
if it is satisfied that the case involves a substantial question of law.

(2) An appeal under (1) above shall be filed within 180 days
from the date on which the order appealed against is received by the aggrieved person
and it shall be in the prescribed form and verified in prescribed manner.
However, the HC may entertain an appeal even after the said period expires
if it is satisfied that there was sufficient cause for not filing it.

(3) Where the HC is satisfied that a substantial question of law is involved in any case,
it shall formulate that question
and the appeal shall be heard only on the question so formulated,
and at the hearing of the appeal,
the respondents shall be allowed to argue that the case does not involve such question.
However, if the HC is satisfied that the case involves any other substantial question of
law not formulated by it,
it may hear the appeal on such question as well
for reasons to be recorded in writing.

(4) The HC shall decide the formulated question of law

and deliver a befitting judgement
containing the grounds on which such decision is founded.

(5) The HC may determine any issue which –

(a) has not been determined by the State Bench/ Area Benches, or
(b) has been wrongly determined by the State Bench/ Area Benches by reason of a
decision on the said question of law.

(6) Where an appeal has been filed before the HC,

it shall be heard by a bench of at least 2 judges,
and shall be decided in accordance with the opinion of such judges
or of any majority of such judges.

(7) In case there is no such majority, the judges shall state the point of law upon which
they differ
and then the case shall be heard upon that point

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by one or more of the other judges of the HC

and such point shall be decided according to the opinion of the majority of the judges
who have heard the case
including those who first heard it.

(8) The HC judgement shall be given effect by either side on the basis of a certified copy of
the judgement.

(9) The provisions of CPC, 1908 relating to appeals to the HC shall apply mutatis mutandis.

Hema Lubricants Ltd., filed an appeal before the Appellate Tribunal against the order of
the Appellate Authority, wherein the issue was revolving around the place of supply. The
Tribunal decided the issue against the company and in favour of the department. The
company is of the firm opinion that its view is correct and hence there is need to take the
issue to an appellate forum higher than the Appellate Tribunal. As the Company Secretary,
dealing with indirect tax matters, advise the company about filing of appeal before the
appropriate forum.
[CS-Prof, Jun 2018]

(1) An appeal to the HC u/s 117(1) shall be filed in FORM GST APL-08.

(2) The grounds of appeal and the form of verification as contained in FORM GST APL-
08 shall be signed as per Rule 26.

(1) An appeal shall lie to the SC –

(a) from any order passed by the National Bench/ Regional Benches of the AT, or
(b) from any order passed by the HC in an appeal made u/s 117,
which the HC certifies to be fit for appeal to the SC
immediately after passing the judgement,
suo moto or on an application made by the aggrieved party.

(2) The provisions of CPC. 1908 relating to appeals to the SC shall apply mutatis mutandis.

(3) Where the judgement of the HC is varied/ reversed in the appeal,

the SC order shall be given effect
in the same manner as the HC judgement u/s 117.

The jurisdictional officer shall issue a statement in FORM GST APL-04 clearly indicating the
final demand amount confirmed by the HC/ SC.

Overruling the fact that an appeal has been filed to the HC/ SC,
sums due to the Govt. resulting from an order passed by

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o the National Bench/ Regional Benches of the AT u/s 113(1), or

o the State Bench/ Area Benches of the AT u/s 113(1), or
o the HC u/s 117
shall be payable in accordance with the said order.

(1) On recommendations of The Council,

The Board may issue orders/ instructions/ directions from time to time
fixing monetary limits for regulating the filing of appeal by an officer.

(2) Where the officer of the CGST has not filed an appeal
against any order passed under this Act
due to the orders/ instructions/ directions issued under (1) above,
it shall not preclude such officer from filing appeal in any other case
involving similar issues or questions of law.

(3) Overruling the fact that no appeal has been filed by the officer
due to the orders/ instructions/ directions issued under (1) above,
no party in appeal shall contend that the officer has acquiesced in the decision
by not filing an appeal.

(4) The AT/ court hearing such appeal shall have regard to the circumstances
under which appeal was not filed by the officer
due to the orders/ instructions/ directions issued under (1) above.

Overruling anything to the contrary in this Act,

no appeal shall lie against any order passed by an officer
if such order relates to any of the following matters –
(a) an order of the Commissioner or other authority empowered to direct transfer of
proceedings from one officer to another officer; or
(b) an order pertaining to the seizure or retention of books of account, register and other
documents; or
(c) an order sanctioning prosecution under this Act; or
(d) an order passed u/s 80.

Enumerate any four order against which appeal cannot be filed under the CGST Act 2017.
[CA-Final, May 2019]

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CGSTA, 2017
• Section 85: Liability in case of transfer of business
• Section 86: Liability of agent and principal
• Section 87: Liability in case of amalgamation or merger of companies
• Section 88: Liability in case of company in liquidation
• Section 89: Liability of directors in private company
• Section 90: Liability of partners of firm to pay tax
• Section 91: Liability of guardians, trustees etc.
• Section 92: Liability of Court of Wards etc.
• Section 93: Special provisions regarding liability to pay tax, interest or penalty
• Section 94: Liability in other cases

(1) Where a taxable person transfers his business in whole or part

by sale, gift, lease, leave and license, hire etc.
he himself and the transferee
shall jointly and severally be liable
wholly or to the extent of such transfer
to pay the TIP due from the taxable person
upto the time of such transfer
irrespective of whether the amount due was determined before transfer or thereafter.

(2) Where the aforementioned transferee carries on such business

in his own name or in some other name,
he shall be liable to pay tax on the supplies made after the transfer date
and in case he is already registered,
he shall apply for amendment to his RC within prescribed time.

Where an agent supplies/ receives any taxable goods

on behalf of his principal,
such agent and principal shall be liable to pay tax on such goods
jointly and severally.

(1) When 2 or more companies are amalgamated/ merged

as per court/ Tribunal order or otherwise
and the order is w.e.f. a date earlier than the order date

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then any transaction of supply amongst such companies during this period
shall be included in the turnover of supply/ receipt of the respective companies
and they shall be liable to pay tax accordingly.

(2) Overruling such order of amalgamation/ merger

the said amalgamating/ merging companies
shall be treated as distinct companies for the period upto the date of the said order
and that is the date w.e.f. which the RC of the said companies shall be cancelled.

(1) When any company is being wound up

as per court/ Tribunal order or otherwise
every liquidator appointed as receiver of any assets of the company
shall give the intimation of his appointment to the Commissioner
within 30 days of such appointment.

(2) After obtaining required information

the Commissioner shall notify the liquidator
within 3 months of receiving the aforesaid intimation
the amount of TIP which is due or likely to be due
to be paid by the Company.

The Commissioner shall notify the liquidator in FORM GST DRC-24

(3) When any private company is wound up

and any TIP determined cannot be recovered
then every director of such company at any time during which the tax was due
shall be liable to pay such amount jointly and severally
unless he proves to the satisfaction of the Commissioner
that such non-recovery cannot be attributed to any gross neglect, misfeasance or
breach of duty on his part.

Explain the provisions relating to liability for GST in case of company in liquidation (section
88 of the CGST Act, 2017).
[CA-Final, May 2018]

(1) Overruling Companies Act, 2013,

where any TIP due from a private company
for any period cannot be recovered
then every director of the Company during such period
shall be liable to pay such amount jointly and severally
unless he proves that such non-recovery cannot be attributed to any gross neglect,
misfeasance or breach of duty on his part.

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(2) Where any private company is converted into a public company and any TIP for any
period
during which such company was a private company cannot be recovered before such
conversion,
then nothing contained in sub-section (1) shall apply on any director of such private
company.
However, this sub-section shall not apply to any personal liability imposed on such
director.

Overruling any contract to the contrary and any other law,

where any firm is liable to pay any TIP,
the firm and each of the partners of the firm
shall be liable for such payment jointly and severally.
Where any partner retires from the firm, he or the firm shall intimate the Commissioner of the
date of such retirement in writing and such partner shall be liable to pay TIP due up to the date
of his retirement.
However, in case no such intimation is given within 1 month from the date of retirement, the
liability of such retiring partner shall continue until the date of receipt of such intimation by the
Commissioner.

Discuss the liability of the retiring partner of a firm to pay any tax, interest or penalty, if
any, leviable on the firm under CGST/ IGST/ SGST Act.
[CA-Final, Nov 2018]

Where the business in respect of which any TIP is payable is carried on by any guardian,
trustee or agent of a minor/ other incapacitated person,
the amount due shall be levied and recovered from such guardian, trustee or agent in the same
manner and to the same extent as it would have been determined and recovered from such
minor/ incapacitated person, had this not been the case, and all the provisions of the Act shall
apply accordingly.

Where the estate or any portion thereof of a taxable person owning a business in respect of
which any TIP is payable is under the control of the Court of Wards, the Administrator General,
the Official Trustee or any receiver or manager appointed by a court order, shall be levied and
recovered from such person in the same manner and to the same extent as it would have been
determined and recovered from the taxable person as if he were conducting the business
himself, and all the provisions of the Act shall apply accordingly.

(1) Subject to IBC, 2016, where a person liable to pay TIP dies –

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(a) Then, if a business carried on by such person is continued by his legal

representative or any other person, such legal rep or other person shall be liable
to pay TIP due from the deceased, and
(b) If the business is discontinued, his legal representative shall be liable to pay the
TIP due from the deceased, out of his estate and to the extent to which the
estate is capable of meeting the charge.
irrespective of when the TIP is determined.

(2) Subject to IBC, 2016, where a person liable to pay TIP is a HUF/ AOP, and its property is
partitioned amongst the various members or groups of members, then,
each member/ group of members shall jointly and severally be liable to pay the TIP due
from the HUF/ AOP upto the time of the partition, irrespective of when it is determined.

(3) Subject to IBC, 2016, where a person liable to pay TIP is a firm being dissolved, then
every partner shall jointly and severally be liable to pay the TIP due from the firm upto
the time of dissolution, irrespective of when it is determined.

(4) Subject to IBC, 2016, where a person liable to pay TIP is –

(a) the guardian of a ward on whose behalf the business is carried on by the
guardian, or
(b) a trustee who carries on the business under a trust for a beneficiary,
then, if the guardianship or trust is terminated,
the ward/ beneficiary shall be liable to pay the TIP due from the taxable person upto
the time of termination, irrespective of when it is determined.

(1) Where a taxable person is a firm/ AOP/ HUF and has discontinued business –
(a) The TIP payable by such firm/ AOP/ HUF upto the date of such discontinuance
may be determined as if no such discontinuance had taken place, and
(b) Every person who was a partner/ member at the time of discontinuance shall
jointly and severally be liable for the TIP payable irrespective of when it is
determined, and the provisions of the Act shall mutatis mutandis apply on such
person.

(2) In case the constitution of a firm/ AOP has changed, the partners/ members, both
before and after such change, shall jointly and severally be liable to pay TIP due from
such firm/ AOP before the reconstitution, subject to Section 90

(3) Sub-section (1) shall mutatis mutandis apply where a firm/ AOP is dissolved or a HUF
has effected partition w.r.t. the business carried on by it.

NOTE: (i) Firm includes LLP

(ii) Court means District Court, High Court or Supreme Court

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CGSTA, 2017
• Section 143: Job Work Procedure
• Section 19: ITC w.r.t. inputs and cap goods sent on job work
• Section 141: Transitional provisions relating to job work

(1) A registered principal

may send any inputs or capital goods
to a job worker for job work
and subsequently to another job worker from there and likewise
without payment of tax
under intimation and subject to prescribed conditions.
(a) The principal shall bring back
the inputs/ capital goods
(other than moulds & dies, jigs & fixtures or tools)
after completion of job work or otherwise
within 1 year/ 3 years
of being sent out
to any of his place of business
without payment of tax.
(b) The principal shall supply
the inputs/ capital goods
(other than moulds & dies, jigs & fixtures or tools)
after completion of job work or otherwise
within 1 year/ 3 years
of being sent out
from the place of business of job worker
on payment of tax within India
or with/ without paying tax for export
as the case may be.
However, the principal shall not supply such goods
from the place of business of job worker
unless he declares this place of business
as his additional place of business
except –
▪ where the job worker is registered u/s 25, or
▪ where the job worker is engaged in supply of goods notified by
Commissioner.
Moreover, the period of 1 yr./ 3 yrs. may be extended by the Commissioner
for a further period not exceeding 1 yr. and 2 yrs. respectively.

(2) The responsibility for keeping proper accounts

for the inputs or capital goods
shall lie with the principal.

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(3) In case the prescribed time period

with respect to inputs sent for job work
is not adhered to,
it shall be deemed that such inputs had been supplied
by the principal to the job worker
on the day when the said inputs were sent for job work.

(4) In case the prescribed time period

with respect to capital goods sent for job work,
other than moulds & dies, jigs & fixtures and tools,
is not adhered to,
it shall be deemed that such capital goods had been supplied
by the principal to the job worker
on the day when the said capital goods were sent for job work.

(5) Overruling sub-sections (1) and (2),

any waste and scrap generated during the job work
may be supplied by
o The job worker (from his place of business on payment of tax) – if he is
registered
o The principal – if job worker is not registered.
NOTE: Input includes intermediate goods.

(1) Subject to prescribed conditions and restrictions

the principal shall be allowed ITC
on inputs sent to job worker for job work

(2) Overruling Section 16(2)(b)

the principal shall be entitled to take ITC
on inputs sent directly to the job worker for job work.

(3) Where the inputs sent for job work

are not received back or supplied
from the place of business of job worker
in accordance with Section 143(1)(a)/ (b)
within 1 year of
o being sent out or
o receipt (in case sent directly to the job worker)
they shall be deemed to have been supplied
by the principal to the job worker.

(4) Subject to prescribed conditions and restrictions

the principal shall be allowed ITC
on capital goods sent to job worker for job work

(5) Overruling Section 16(2)(b)

the principal shall be entitled to take ITC
on capital goods sent directly to the job worker for job work

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(6) Where the capital goods sent for job work

are not received back
within 3 years of
o being sent out or
o receipt (in case sent directly to the job worker)
they shall be deemed to have been supplied
by the principal to the job worker.

(7) Sub-sections (3) and (6) shall not apply to

o moulds and dies
o jigs and fixtures
o tools
sent out to a job worker for job work.

(1) The inputs/ semi-finished goods/ cap goods shall be sent to the job worker
under the cover of a challan issued by the principal.
including the case where such goods are sent directly to a job-worker.
However, where the goods are sent from one job worker to another,
the challan may be issued by
o the principal or
o the sending job worker
• The challan issued by the principal
may be endorsed by the job worker
indicating the quantity and description of goods
where the goods are
o sent to another job worker or
o returned to the principal.
• Such endorsed challan may be further endorsed by another job worker
indicating the quantity and description of goods
where the goods are
o sent to another job worker or
o returned to the principal

(2) The challan issued shall contain the details specified in Rule 55.

(3) The details of challans in respect of goods

o dispatched to a job worker or
o received from a job worker
during a quarter shall be included in FORM GST ITC-04
to be furnished on or before 25th day of the succeeding month (as extended).

(4) Where the inputs/ cap goods are not returned to the principal within the time
stipulated in Section 143,
they shall be deemed to have been supplied by the principal to the job worker
on the day when the said inputs/ cap goods were sent out
and the said supply shall be declared in FORM GSTR-1 of the principal
thereby making him liable to pay tax along with applicable interest.

Bedi Manufacturers, a registered person, instructs its supplier to send the capital goods
directly to Rajesh Enterprises, who is a job worker, outside its factory premises for carrying
out certain operations on the goods. The goods were sent by the supplier on 10-04-2018

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and were received by the job worker on 15-04-2018. Rajesh Enterprises carried out the job
work but did not return the capital goods to their Principal Bedi Manufacturers. Discuss
whether Bedi Manufacturers are eligible to retain the input tax credit availed by them on
the capital goods. What action under the GST Act is required to be taken by Bedi
Manufacturers?
What would be your answer if in place of capital goods jigs and fixtures are supplied to the
job worker and the same has not been returned to the Principal.
[CA-Final, Nov 2018]

The stipulated time limit within which inputs and capital goods sent to a job worker in a job
work, shall be brought back and beyond that period it will be treated as supply and tax is
payable by the principal as per CGST Act, 2017 is .........
(A) months and 1 year in case of inputs and capital goods respectively
(B) 1 year and 2 years in case of inputs and capital goods respectively
(C) 1 year and 3 years in case of inputs and capital goods respectively
(D) None of the above
[CS-Exec, Dec 2018]

(C) 1 year and 3 years in case of inputs and capital goods respectively

(1) Where any inputs received at a place of business had been removed
o as such or
o after being partially processed
to a job worker as per the existing law
prior to the appointed day
and such inputs are returned to the said place
within 6 months from the appointed day,
no tax shall be payable on such inputs.
The said period of 6 months may be extended by the Commissioner for a further period
of upto 2 months.
Moreover, if such inputs are not returned within the specified period,
the ITC shall be liable to be recovered as per Section 142(8)(a).

(2) Where any semi-finished goods had been removed

from the place of business to any other premises
for carrying out certain manufacturing processes
as per the existing law
prior to the appointed day
and the said goods are returned to the said place
within 6 months from the appointed day,
no tax shall be payable on the said goods.
The said period of 6 months may be extended by the Commissioner for a further period
of upto 2 months.
Moreover, if the said goods are not returned within the specified period,
the ITC shall be liable to be recovered as per Section 142(8)(a).
Also, the manufacturer may transfer the said goods to the premises of any registered
person
for supplying therefrom
o in India - on payment of tax, or
o outside India - without payment of tax

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within the specified period,

in accordance with the existing law.

(3) Where any excisable goods manufactured at a place of business had been removed
without payment of duty
for carrying out tests or any other process not amounting to manufacture,
to any other premises
in accordance with the existing law
prior to the appointed day
and such goods, are returned to the said place
after undergoing tests or any other process
within 6 months of the appointed day,
no tax shall be payable on such goods.
The said period of 6 months may be extended by the Commissioner for a further period
of upto 2 months.
Moreover, if the said goods are not returned within the specified period,
the ITC shall be liable to be recovered as per Section 142(8)(a).
Also, the manufacturer may transfer the said goods from the said other premises
in accordance with the existing law
o in India - on payment of tax, or
o outside India - without payment of tax
within the specified period.

(4) The tax under (1), (2) and (3) above shall not be payable
only if the manufacturer and the job worker
declare the details of the inputs or goods held in stock by the job worker on behalf of
the manufacturer
on the appointed day
in the prescribed form and within the prescribed period.

Every person to whom Section 141 applies

shall submit a declaration in FORM GST TRAN-1
within the period specified in Rule 117
specifying the stocks of
o inputs,
o semi-finished goods or
o finished goods
held by him on the appointed day.

Circular No. 38/ 12/2018

Clarification on issues related to Job Work

5. Scope/ ambit of job work: The job worker is expected to work on the goods sent by
the principal and whether the activity is covered within the scope of job work or not
would have to be determined on the basis of facts and circumstances of each case.
Further, the job worker, in addition to the goods received from the principal, can use
his own goods for providing the services of job work.

6. Requirement of registration for the principal/ job worker: Section 143 of the CGST
Act is applicable to a registered person. Thus, it is only a registered person who can
send the goods for job work under the said provisions. However, the registered

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person (principal) is not obligated to follow the said provisions. It is his choice
whether or not to avail of the benefit of these special provisions.
6.1 The job worker is required to obtain registration only if his aggregate turnover, to
be computed on all India basis, in a FY exceeds the specified threshold limit as
specified in section 22(1) of the said Act, read with clause (iii) of the Explanation
to the said section in case both the principal and the job worker are located in
the same State. Where the principal and the job worker are located in different
States, the requirement for registration flows from section 24(i) of the CGST Act
which provides for compulsory registration of suppliers making any inter-State
supply of services. However, exemption from registration has been granted in
case the aggregate turnover of the inter-State supply of taxable services does
not exceed the specified threshold limit as specified in section 22(1) of the said
Act, read with clause (iii) of the Explanation to the said section in a FY vide
notification No. 10/2017 – IT as amended vide notification No 3/2019- IT.
Therefore, it is clarified that a job worker is required to obtain registration only in
cases where his aggregate turnover, to be computed on all India basis, in a FY
exceeds the threshold limit regardless of whether the principal and the job
worker are located in the same State or in different States.

7. Supply of goods by the principal from job worker’s place of business/ premises: The
supply of goods by the principal from the place of business/ premises of the job
worker will be regarded as supply by the principal and not by the job worker as
specified in section 143(1)(a) of the CGST Act.

8. Movement of goods from the principal to the job worker and the documents and
intimation required therefor:
(i) Where goods are sent by principal to only one job worker: The principal shall
prepare in triplicate, the challan in terms of rules 45 and 55 of the CGST
Rules, for sending the goods to a job worker. Two copies of the challan may
be sent to the job worker along with the goods. The job worker should send
one copy of the said challan along with the goods, while returning them to
the principal. The FORM GST ITC-04 will serve as the intimation as envisaged
under section 143 of the CGST Act, 2017.
(ii) Where goods are sent from one job worker to another job worker: In such
cases, the goods may move under the cover of a challan issued either by the
principal or the job worker. In the alternative, the challan issued by the
principal may be endorsed by the job worker sending the goods to another
job worker, indicating therein the quantity and description of goods being
sent. The same process may be repeated for subsequent movement of the
goods to other job workers.
(iii) Where the goods are returned to the principal by the job worker: The job
worker should send one copy of the challan received by him from the
principal while returning the goods to the principal after carrying out the job
work.
(iv) Where the goods are sent directly by the supplier to the job worker: In this
case, the goods may move from the place of business of the supplier to the
place of business/ premises of the job worker with a copy of the invoice
issued by the supplier in the name of the buyer (i.e. the principal) wherein the
job worker’s name and address should also be mentioned as the consignee,
in terms of rule 46(o) of the CGST Rules. The buyer (i.e., the principal) shall
issue the challan under rule 45 of the CGST Rules and send the same to the
job worker directly in terms of para (i) above. In case of import of goods by
the principal which are then supplied directly from the customs station of
import, the goods may move from the customs station of import to the place
of business/ premises of the job worker with a copy of the Bill of Entry and
the principal shall issue the challan under rule 45 of the CGST Rules and send
the same to the job worker directly.

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(v) Where goods are returned in piecemeal by the job worker: In case the goods
after carrying out the job work, are sent in piecemeal quantities by a job
worker to another job worker or to the principal, the challan issued originally
by the principal cannot be endorsed and a fresh challan is required to be
issued by the job worker.
(vi) Submission of intimation: Rule 45(3) of the CGST Rules provides that the
principal is required to furnish the details of challans in respect of goods sent
to a job worker or received from a job worker or sent from one job worker to
another job worker during a quarter in FORM GST ITC-04 by the 25th day of
the month succeeding the quarter or within such period as may be extended
by the Commissioner. It is clarified that it is the responsibility of the principal
to include the details of all the challans relating to goods sent by him to one
or more job worker or from one job worker to another and its return
therefrom. The FORM GST ITC-04 will serve as the intimation as envisaged
under section 143 of the CGST Act.

9. Liability to issue invoice, determination of place of supply and payment of GST:

(i) Supply of job work services: The job worker, as a supplier of services, is liable
to pay GST if he is liable to be registered. He shall issue an invoice at the time
of supply of the services as determined in terms of section 13 read with
section 31 of the CGST Act. The value of services would be determined in
terms of section 15 of the CGST Act and would include not only the service
charges but also the value of any goods or services used by him for supplying
the job work services, if recovered from the principal. The value of moulds
and dies, jigs and fixtures or tools sent by the principal may not be included in
the value of job work services provided its value has been factored in the
price for the supply of such services by the job worker. It may be noted that if
the job worker is not registered, GST would be payable by the principal on
reverse charge basis in terms of the provisions contained in section 9(4) of
the CGST Act. However, the said provision has been kept in abeyance for the
time being.
(ii) Supply of goods by the principal from the place of business/ premises of job
worker: Section 143 of the CGST Act provides that the principal may supply,
from the place of business / premises of a job worker, inputs after completion
of job work or otherwise or capital goods (other than moulds and dies, jigs
and fixtures or tools) within one year or three years respectively of their being
sent out, on payment of tax within India, or with or without payment of tax
for exports, as the case may be. This facility is available to the principal only if
he declares the job worker’s place of business / premises as his additional
place of business or if the job worker is registered.
Since the supply is being made by the principal, it is clarified that the time,
value and place of supply would have to be determined in the hands of the
principal irrespective of the location of the job worker’s place of business/
premises. Further, the invoice would have to be issued by the principal. It is
also clarified that in case of exports directly from the job worker’s place of
business/ premises, the LUT or bond, as the case may be, shall be executed
by the principal.
Illustration: The principal is located in State A, the job worker in State B and
the recipient in State C. In case the supply is made from the job worker’s
place of business / premises, the invoice will be issued by the supplier
(principal) located in State A to the recipient located in State C. The said
transaction will be an inter-State supply. In case the recipient is also located
in State A, it will be an intra-State supply.
(iii) Supply of waste and scrap generated during the job work: Sub - section (5)
of Section 143 of the CGST Act provides that the waste and scrap generated
during the job work may be supplied by the registered job worker directly
from his place of business or by the principal in case the job worker is not

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registered. The principles enunciated in para (ii) above would apply mutatis
mutandis in this case.
9.6 If the inputs or capital goods are neither returned nor supplied from the job
worker’s place of business/ premises within the specified time period, the
principal would issue an invoice for the same and declare such supplies in his
return for that particular month in which the time period of 1 yr./ 3 yrs. has
expired. The date of supply shall be the date on which such inputs or capital
goods were initially sent to the job worker and interest for the intervening period
shall also be payable on the tax. If such goods are returned by the job worker
after the stipulated time period, the same would be treated as a supply by the job
worker to the principal and the job worker would be liable to pay GST if he is
liable for registration in accordance with the provisions contained in the CGST
Act read with the rules made thereunder. Further, there is no requirement of
either returning back or supplying the goods from the job worker’s place of
business/ premises as far as moulds and dies, jigs and fixtures, or tools are
concerned.

10. Availability of input tax credit to the principal and job worker: The input tax credit
would be available to the principal, irrespective of the fact whether the inputs or
capital goods are received by the principal and then sent to the job worker for
processing, etc. or whether they are directly received at the job worker’s place of
business/ premises, without being brought to the premises of the principal. It is also
clarified that the job worker is also eligible to avail ITC on inputs, etc. used by him in
supplying the job work services if he is registered.

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CGSTA, 2017
• Section 139: Migration of existing taxpayers
• Section 140: Transitional arrangements for input tax credit
• Section 142: Miscellaneous transitional provisions

(1) Every person

o registered under the existing laws and
o having a valid PAN
shall be issued a RC on provisional basis
on and from the appointed day
subject to prescribed conditions
which unless replaced by a final RC under (2) below
shall be liable to be cancelled if the prescribed conditions are not complied with.

(2) The final RC shall be granted in the prescribed form and subject to prescribed
conditions.

(3) The provisional RC issued under (1) above

shall be deemed to have not been issued
if the said registration is cancelled
due to an application filed by the registered person
that he was not liable to registration u/s 22 or 24.

(1) (a) Every person other than TDS deductor/ ISD, registered under an existing law
and having PAN shall enrol under GST laws by validating his e-mail ID and
mobile no.
(b) Upon enrolment, the said person shall be granted registration on a
provisional basis and a RC in FORM GST REG-25, incorporating the GSTIN
therein shall be made available to him.
However, a taxable person who has been granted multiple registrations
under the existing law based on a single PAN shall be granted only 1
provisional registration under the Act.

(2) (a) Every person who has been granted a provisional registration shall apply in
FORM GST REG-26, along with the documents specified in the said
application.
(b) The information asked for above shall be furnished within 3 months
(extended till 31 Dec, ’17 vide Order No.: 06/2017-GST).
(c) If the information furnished are found proper, a RC shall be made available in
FORM GST REG-06.

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(3) Where the information is either not furnished or not found to be proper, the PO shall
serve a SCN in FORM GST REG-27 and after allowing the person concerned a
reasonable opportunity of being heard, cancel the provisional registration by issuing
an order in FORM GST REG-28.

(3A) Where the RC has not been made available to the applicant
within 15 days from furnishing the information as per (2)(c), and
no notice has been issued as per (3) within the said period, the
registration shall be deemed to have been granted.
However, the SCN issued in FORM GST REG-27 can be withdrawn by issuing an
order in FORM GST REG-20, if it is found that there was no cause to issue the notice.

(4) Every person registered under existing law who is not liable to be registered under
the Act may apply for cancellation of registration in FORM GST REG-29 on or before
31 Mar, 2018 and the PO shall do so, after conducting the required enquiry.

(1) A registered person, other than composition supplier,

shall be entitled to take CENVAT credit of eligible duties
carried forward in the return relating to period ending 30 June,’17
furnished by him under the existing law
in his e-CrL.
However, the registered person shall not be allowed
to take credit in the following circumstances –
(i) Where the said credit is inadmissible as ITC under this Act
(ii) Where he has not furnished all the returns required under the existing laws
pertaining to the last 6 months before GST laws
(iii) Where the said amount of credit relates to goods sold under exemptions
notified by the Government.

(2) A registered person, other than composition supplier,

shall be entitled to take credit of unavailed CENVAT credit of capital goods
not carried forward in the return relating to
period ending 30 June,’17
furnished by him under the existing law
in his ECrL,
only if such credit is admissible as
o CENVAT credit under the existing law and
o ITC under this Act.

NOTE: Unavailed CENVAT credit = Entitled CENVAT credit (-) Availed CENVAT credit

(3) A registered person who was

o not liable to be registered under the existing law or
o engaged in the manufacture of exempted goods or provision of exempted
services
o providing works contract service and availing benefit of Notfn. No. 26/ 2012 –
ST
o a first stage dealer/ second stage dealer/ registered importer/ depot of a
manufacturer
shall be entitled to take credit of eligible duties in respect of
o Inputs stock

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o Inputs contained in semi-finished/ finished goods stock

on 1 July, 2017 subject to the following conditions:
(i) such inputs/ goods are used/ intended to be used for making taxable supplies
under this Act,
(ii) the said registered person is eligible for ITC on such inputs
(iii) the said registered person is in possession of invoice or other prescribed
documents evidencing payment of duty under the previous laws, issued not
before 12 months immediately preceding the enforcement of GST laws.
(iv) the supplier of services is not eligible for any abatement under this Act.
In case a registered person,
other than a manufacturer or a supplier of services
does not possess invoice or any such other document
then such registered person shall be allowed
to take credit at prescribed rate in prescribed manner
subject to prescribed conditions and limitations.

(4) A registered person who was engaged in manufacture of

taxable goods as well as exempted goods under the CEA, 1944 or
taxable services as well as exempted services under the FA, 1994
but which are taxable under this Act,
he shall be entitled to take the CENVAT credit –
(a) carried forward in a return furnished as per sub-section (1)
(b) In respect of IS/ ISF as on 1 July, 2017 relating to such exempted goods/ services
as per sub-section (3)
in his e-CrL.

(5) A registered person shall be entitled to take the credit of

eligible duties and taxes in respect of inputs received
on or after the appointed day
but the duty or tax of which has been paid by the supplier under the existing law,
if the invoice for the same was recorded in the books of such person within 30 days
(extendible by Commissioner for upto 30 days) from the appointed day.
He shall furnish a statement w.r.t. this credit taken
in the prescribed manner.

(6) A registered person who was

o paying tax at a fixed rate or
o paying a fixed amount in lieu of tax payable
under the existing law
shall be entitled to take credit of VAT and ET in respect of IS/ ISF
held on the appointed day,
in his ECrL,
subject to the following conditions:
(i) such inputs/ goods are used/ intended to be used for making GSTable supplies
(ii) the said registered person in not paying tax under composition levy scheme
(iii) the said registered person is eligible for ITC on such inputs
(iv) the said registered person is in possession of invoice or other prescribed
documents evidencing payment of tax under the previous laws, issued not
before 12 months immediately preceding the enforcement of GST laws

(7) Overruling anything to the contrary contained in this Act,

the ITC on services received by an ISD before the appointed day

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shall be eligible for distribution as credit under this Act

even if the invoice relating to such services are received on or after the appointed day.

(8) Where a registered person having centralized registration under the previous laws
has obtained a registration under this Act,
such person shall be allowed to take the CENVAT credit
carried forward in the return relating to period ending 30 June, ‘17
furnished under the previous laws
in his e-CrL
if such credit is admissible as ITC under this Act.
However, if the registered person furnishes the said return within 3 months of the
appointed day,
if such return is either original return
or revised return, reducing the credit claimed earlier.

(9) Where any CENVAT credit availed for input services has been reversed
due to non-payment of consideration within 3 months,
such credit can be reclaimed
if the registered person pays the amount of consideration
within 3 months from the appointed day.

(10) The amount of credit under (3), (4) and (6) shall be calculated in the prescribed manner.

NOTE: For (3), (4) and (6), “eligible duties” mean –

(i) ACD/ SAD
(ii) Central Excise Duty
(iii) NCCD
For (5), “eligible duties and taxes” mean –
(i) Eligible duties as defined above
(ii) Service Tax
NOTE: “Eligible duties and taxes” excludes
o any cess not specified above and
o any cess collected as ACD u/s 3(1) of CTA, 1975.

Circular No. 33/ 07/2018-GST

Directions under Section 168 of the CGST Act regarding non-transition of CENVAT credit
under section 140 of CGST Act or non-utilization thereof in certain cases

2. Non-utilization of Disputed Credit carried forward

2.1 Where in relation to a certain CENVAT credit pertaining to which a show cause
notice was issued under rule 14 of the CENVAT Credit Rules, 2004, which has
been adjudicated and where in the last adjudication order or the last order-in-
appeal, as it existed on 1st July, 2017, it was held that such CENVAT credit is not
admissible, then such CENVAT credit (herein and after referred to as “disputed
credit”), credited to the electronic credit ledger in terms of sub-section (1), (2),
(3), (4), (5) (6) or (8) of section 140 of the Act, shall not be utilized by a registered
taxable person to discharge his tax liability under this Act or under the IGST Act,
2017, till the order-in-original or the last order-in-appeal, as the case may be,
holding that disputed credit as inadmissible is in existence. 2.2
2.2 During the period, when the last order-in-original or the last order-in-appeal, as
the case may be, holding that disputed credit as inadmissible is in operation, if
the said disputed credit is utilised, it shall be recovered from the tax payer, with
interest and penalty as per the provisions of the Act.

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3. Non-transition of Blocked Credit

3.1 In terms of clause (i) of sub-section (1) of section 140 of the Act, a registered
person shall not take in his electronic credit ledger, amount of CENVAT credit as
is carried forward in the return relating to the period ending with the day
immediately preceding the appointed day which is not eligible under the Act in
terms of sub-section (5) of section 17 (hereinafter referred to as „blocked credit‟),
such as, telecommunication towers and pipelines laid outside the factory
premises.
3.2 If the said blocked credit is carried forward and credited to the electronic credit
ledger in contravention of section 140 of the Act, it shall not be utilized by a
registered taxable person to discharge his tax liability under this Act or under the
IGST Act, 2017, and shall be recovered from the tax payer with interest and
penalty as per the provisions of the Act.

4. In all cases where the disputed credit as defined in terms of para 2.1 or blocked credit
under para 3.1 is higher than ₹ ten lakhs, the taxpayers shall submit an undertaking to
the jurisdictional officer of the Central Government that such credit shall not be
utilized or has not been availed as transitional credit, as the case may be. In other
cases of transitional credit of an amount lesser than ₹ ten lakhs, the directions as
above shall apply but the need to submit the undertaking shall not apply.

Circular No. 87/ 06/2019-GST

Central Goods and Services Tax (Amendment) Act, 2018- Clarification regarding section
140(1) of the CGST Act, 2017

1. Attention is invited to sub-section (a) of section 28 of the CGST (Amendment) Act,

2018 (No. 31 of 2018) which provides that section 140(1) of the CGST Act, 2017 be
amended with retrospective effect to allow transition of CENVAT credit under the
existing law viz. Central Excise and Service Tax law, only in respect of “eligible
duties”. In this regard, doubts have been expressed as to whether the expression
“eligible duties” would include CENVAT credit of Service Tax within its scope or not.

2. Therefore, in exercise of powers conferred under section 168 of the Central Goods
and Services Act (hereinafter referred to as “Act”), for the purposes of uniformity in
the implementation of the Act, the Central Board of Indirect Taxes and Customs
hereby directs the following:

3.1 The CENVAT credit of service tax paid under section 66B of the Finance Act,
1994 was available as transitional credit under section 140(1) of the CGST Act
and that legal position has not changed due to amendment of section 140(1)
on account of following reasons:
i) The amendment in provisions of section 140(1) and the explanations
to section 140 need to be read harmoniously such that neither any
provision of the amendment becomes otiose nor does the legislative
intent of the amendment get defeated.
ii) The intention behind the amendment of section 140(1) to include the
expression "eligible duties” has been indicated in the “Rationale/
Remarks” column (at Sl. No. 37) of the draft proposals for amending
the GST law which was uploaded in the public domain for comments.
It is clear that the transition of credit of taxes paid under section 66B
of the Finance Act, 1994 was never intended to be disallowed under
section 140(1) and therefore no such remark was present in the
document.
iii) Under tax statutes, the word “duties" is used interchangeably with the
word “taxes” and in the present context, the two words should not be
read in a disharmonious manner.

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3.2 Thus, expression "eligible duties” in section 140(1) which are allowed to be
transitioned would cover within its fold the duties which are listed as "eligible
duties” at sl. no. (i) to (vii) of explanation 1, and “eligible duties and taxes” at sl.
no. (i) to (viii) of explanation 2 to section 140, since the expression “eligible
duties and taxes” has not been used elsewhere in the Act.
3.3 The expression “eligible duties” under section 140(1) does not in any way refer
to the condition regarding goods in stock as referred to in Explanation 1 to
section 140 or to the condition regarding inputs and input services in transit,
as referred to in Explanation 2 to section 140.

4. Further, it has been decided not to notify the clause (i) of sub-section (b) of section
28 and clause (i) of sub-section (c) of section 28 of CGST (Amendment) Act, 2018
which link Explanation 1 and Explanation 2 of section 140 to section 140(1). This would
ensure that the credit allowed to be transitioned under section 140(1) is not linked to
credit of goods in stock, as provided under Explanation 1, and credit of goods and
services in transit, as provided under Explanation 2. However, the duties and taxes
for which transition is allowed shall be governed by para 3.2 above.

5. No transition of credit of cesses, including cess which is collected as additional duty

of customs under sub-section (1) of section 3 of the Customs Tariff Act, 1975, would
be allowed in terms of Explanation 3 to section 140, inserted vide sub-section (d) of
section 28 of CGST Amendment Act, 2018 which shall become effective from the
date the same is notified giving it retrospective effect.

The CGST credit taken as per Section 140

on the stock of gold dore bar or jewellery made out of such bar held on 01 July, ’17,
relating to the CENVAT credit carried forward
which had accrued on account of payment of the CVD u/s 3(1) of the CTA, 1975
at the time of importation of such bar
shall be restricted to 1/ 6th of the credit.
The remaining 5/ 6th of the credit shall be debited from the e-CrL at the time of supply of
such bar/ jewellery.
Where such supply has already been made, the debit shall be within one week from the
date of commencement of these Rules.

(1) Every registered person entitled to take ITC u/s 140 shall submit a declaration in
FORM GST TRAN-1 within 90 days of the appointed day, specifying separately the
amount of ITC of eligible duties and taxes to which he is entitled under the provisions
of the said section.
The Commissioner may extend the said period by a further period of upto 90 days.
Moreover, in case the inputs have been received from an EOU or a unit located in
EHTP, the credit shall be allowed to the extent as provided in Rule 3(7) of the
CENVAT Credit Rules, 2004.

(1A) Overruling (1) above, the Commissioner may extend the date for submitting
Declaration in FORM GST TRAN-1 by a further period not exceeding 31 March, 2019
31 December 2019, for registered persons who could not submit the said declaration
by the due date due to technical difficulties on the common portal.

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(2) Every declaration under (1) above shall –

(a) in the case of a claim u/s 140(2), specify separately the following particulars
in respect of every capital good as on the appointed day –
(i) The tax/ duty availed/ utilized, and
(ii) The tax/ duty yet to be availed/ utilized
by way of ITC under each of the existing laws till the appointed day.
(b) in the case of a claim u/s 140(3)/ (4)(b)/ (6)/ (8), specify separately the details
of stock held on the appointed day,
(c) in the case of claim u/s 140(5), furnish the following details –
(i) the name of the supplier, invoice serial no. and date,
(ii) the description and value of the goods/ services
(iii) the quantity and the unit/ unit quantity code (in case of goods)
(iv) the amount of eligible taxes and duties, or the VAT/ ET charged by the
supplier, and
(v) the date on which the receipt of goods/ services is entered in the
books of account of the recipient.

(3) The credit specified in FORM GST TRAN-1 shall be credited to the e-CrL of the
applicant maintained in FORM GST PMT-2

(4) (a) (i) In accordance with the proviso to Section 140(3),

a registered person who was not registered under the existing law
shall be allowed to avail the ITC on ED/ CVD levied goods
held in stock on the appointed day
for which he does not possesses any document evidencing payment of ED.
(ii) The ITC referred in (i) above shall be allowed @ -
➢ 60% - on goods attracting 9% or more CGST, and
➢ 40% - on other goods
of the CGST applicable on supply of such goods
and shall be credited after the CGST payable on such supply has been paid.
In case IGST is paid on such goods, the amount of credit allowed shall be @
30% and 20% respectively of the said tax.
(iii) The scheme shall be available for 6 tax periods from the appointed date.
(b) The CGST credit shall be availed subject to the following conditions –
(i) Such goods were not
➢ unconditionally exempt from ED or
➢ nil rated in CETA, 1985
(ii) the document for procurement of such goods is available with the registered
person,
(iii) the registered person availing of this scheme submits a statement in FORM
GST TRAN-2 by 31 March, 2018 (or as extended by the Commissioner), for
each of the aforementioned 6 tax periods, indicating the details of supplied
of such goods effected during the tax period.
However, registered persons filing the declaration in FORM GST TRAN-1 as
per (1A) may submit the statement in FORM GST TRAN-2 by 30 April 2019 31
January 2020.
(iv) The credit allowed shall be credited to the e-CrL of the applicant, and
(v) The stock of goods on which the credit is availed is stored in an easily
identifiable manner.

The amount credited under Rule 117(3) may be verified and proceedings u/s 73/ 74 shall be
initiated in respect of any credit wrongly availed, wholly or partly.

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Facts: Writ applicant had sought issuance of a writ of mandamus to allow filing of
declaration in FORM GST TRAN-1 and GST TRAN-2 to enable it to claim transitional credit of
eligible duties in respect of inputs held in stock on the appointed day in terms of Section
140(3) of the CGST Act; to issue a writ of declaration for declaration of the due date
contemplated u/r 117 of the Rules to claim transitional credit as being procedural in nature
and thus merely directory and not a mandatory provision; grant ad interim reliefs and award
costs.

Decision: Section 140(3) of the Act allows carry forward of the eligible duties in respect of
inputs held in stock subject to fulfilment of conditions (i) to (v) as mentioned therein -
Section 140(3) of the Act is a complete Code in itself and the substantive right conferred by
the Act cannot be curtailed by way of rules - entitlement of credit of eligible duties on the
purchases made in the pre-GST regime as per the then existing CENVAT Credit Rules is a
vested right and, therefore, it cannot be taken away by virtue of Rule 117 of the CGSTR with
retrospective effect for failure to file FORM GST TRAN-1 within the due date i.e. 27.12.2017 -
provision for facility of credit is as good as the tax paid till the tax is adjusted and, therefore,
the right to credit had become absolute under the CEA and, therefore, the credit is
indefeasible and the same cannot be taken away. Right to carry forward credit is a right or
privilege acquired and accrued under the repealed CEA, 1944 and it has been saved u/s
174(2)(c) of the CGST Act, 2017 and, therefore, it cannot be allowed to lapse u/r 117 of the
Rules for failure to file declaration in FORM GST TRAN-1 within the due date i.e. 27.12.2017 -
right to carry forward CENVAT credit for not being able to file the FORM GST TRAN-1 within
the due date offends the policy of the Government to remove the cascading effect of tax by
allowing the Input Tax Credit as mentioned in the Objects and Reasons of the Constitution
122 and Amendment Bill, 2014, and which clearly sets out that it is intended to remove the
cascading effect of taxes and bring out a nationwide taxation system - Denial of carry
forward of tax paid on stock on the appointed day may lead to cascading effect of tax
because the GST will again have to be paid on the Central Excise duty already suffered
on the stock. It is an established principle of law that it is necessary to look into the mischief
against which the statute is directed, other statutes in pari materia and the state of law at the
time - It is arbitrary, irrational and unreasonable to discriminate in terms of the time-limit to
allow the availment of the Input Tax Credit with respect to purchase of goods and services
made in the pre-GST regime and post-GST regime and, therefore, it is violative of Article 14
of the Constitution of India - Section 16 of the Act allows the entitlement to take input tax
credit in respect of post-GST purchase of goods or services within return to be filed u/s 39
for the month of September following the end of the financial year to such purchase or
furnishing of the relevant annual return, whichever is earlier whereas rule 117 allows time
limit only up to 27th December 2017 to claim transitional credit on pre-GST purchases,
therefore, it is arbitrary and unreasonable to discriminate in terms of the time limit to allow
the availment of ITC with respect to the purchase of goods and services made in the pre-
GST regime and post-GST regime - as this discrimination does not have any rationale,
therefore, it is violative of Article 14 of the Constitution - It is legitimate for a going concern to
expect that it will be allowed to carry forward and utilise the CENVAT credit after satisfying
all the conditions as mentioned in the CEX law and, therefore, disallowing such vested right
is offensive against Article 14 as it goes against the essence of doctrine of legitimate
expectation - By not allowing the right to carry forward the CENVAT credit for not being able
to file the form GST TRAN-1 within the due date may severely dent the writ-applicants
working capital and may diminish their ability to continue with the business and such action
violates the mandate of Article 19(1)(g) of the Constitution - liability to pay GST on sale of
stock carried forward from the previous tax regime without corresponding input tax credit

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would lead to double taxation on the same subject matter and is, therefore, arbitrary and
irrational; CBEC GST Flyer no. 20 dated 01.01.2018 refers – CENVAT credit earned under the
erstwhile Central Excise law is the property of the writ-applicants and it cannot be
appropriated for merely failing to file declaration in the absence of law in this respect (Article
300A refers). It could have been appropriated by the government by providing for the same
in the CGST Act but it cannot be taken away by virtue of merely framing Rules in this regard
– All four writ-applications succeed and are allowed – respondents are directed to permit
the writ-applicants to allow filing of declaration in form GST TRAN-1 and GST TRAN-2 so as
to enable them to claim transitional credit of the eligible duties in respect of inputs held in
stock on the appointed day in terms of s.140(3) of the Act - Furthermore, it is declared that
the due date contemplated u/r 117 of the CGST Rules, 2017 is procedural in nature and thus
should not be construed as a mandatory provision.

(1) Where any goods on which any ED has been paid at the time of removal
during 6 months prior to the appointed day,
are being returned to any place of business of a registered person
within 6 months after the appointed day,
by an un-registered person,
the said registered person shall be eligible for refund of the ED so paid
if such goods are identifiable to the satisfaction of the PO.
However, in case such goods are returned by a registered person,
the return shall be deemed to be a supply.

(2) (a) Where the price of any goods/ services is revised upwards on or after 01 July,
2017
due to a contract entered into before the said day,
the registered person who had removed such goods/ provided such services
shall issue a supplementary invoice/ dr. note to the recipient
within 30 days of such price revision
and such supplementary invoice/ dr. note shall be deemed to have been issued
in respect of an outward supply made under this Act.
(b) Where the price of any goods/ services is revised downwards on or after
01 July, ‘17
due to a contract entered into before the said day,
the registered person who had removed such goods/ provided such services
may issue a cr. note to the recipient
within 30 days of such price revision
and such cr. note shall be deemed to have been issued
in respect of an outward supply made under this Act.
However, the registered person shall be allowed to reduce his OTL
on account of issue of the cr. note
only if the recipient of the said note has reduced his corresponding ITC.

(3) Every claim for refund of any CENVAT credit/ duty/ tax/ interest/ any other amount
paid under the existing law
filed by any person before, on or after the appointed day
shall be disposed of as per the previous laws
and any amount eventually accruing to him shall be paid in cash
overruling anything to the contrary contained under the previous laws
except for Section 11B(2) of the CEA, 1944.
However, any fully/ partially rejected claim for refund of CENVAT credit shall lapse.

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Moreover, no such refund of CENVAT credit shall be allowed where the balance as on
the appointed day has been carried forward under this Act.

(4) Every refund claim of any duty/ tax paid under the previous indirect tax laws
filed in respect of goods/ services exported before or after the appointed day
shall be disposed of as per the previous laws.
However, any fully/ partially rejected claim for refund of CENVAT credit shall lapse.
Moreover, no such refund of CENVAT credit shall be allowed where the balance as on
the appointed day has been carried forward under this Act.

(5) Every refund claim of ST paid under the previous laws

filed in respect of services not provided
shall be disposed of as per the previous laws
and any amount eventually accruing to him shall be paid in cash
overruling anything to the contrary contained under the previous laws
except for Section 11B(2) of the CEA, 1944.

(6) (a) Every appeal/ review/ reference proceeding relating to a CENVAT credit claim
initiated before, on or after the appointed day under the previous laws
shall be disposed of as per the previous laws
and any amount of credit found admissible to him shall be refunded in cash
overruling anything to the contrary contained under the previous laws
except for Section 11B(2) of the CEA, 1944
and any amount rejected shall not be admissible as ITC under this Act.
However, no such refund of CENVAT credit shall be allowed where the balance
as on the appointed day has been carried forward under this Act.
(b) Every appeal/ review/ reference proceeding relating to recovery of CENVAT
credit
initiated before, on or after the appointed day under the previous laws
shall be disposed of as per the previous laws
and if any amount of credit becomes recoverable as a result of such appeal/
review/ reference
the same shall be recovered as an arrear of tax under this Act
unless it is recovered under the existing law
and the amount so recovered shall not be admissible as ITC under this Act

(7) (a) Every appeal/ review/ reference proceeding relating to any output duty/ tax
liability initiated before, on or after the appointed day under the previous laws
shall be disposed of as per the previous laws
and if any amount becomes recoverable as a result of such appeal/ review/
reference
the same shall be recovered as an arrear of duty/ tax under this Act
unless it is recovered under the existing law
and the amount so recovered shall not be admissible as ITC under this Act.
(b) Every appeal/ review/ reference proceeding relating to any output duty/ tax
liability initiated before, on or after the appointed day under the previous laws
shall be disposed of as per the previous laws
and if any amount is found admissible to him, it shall be refunded in cash
overruling anything to the contrary contained under the previous laws
except for Section 11B(2) of the CEA, 1944
and any amount rejected shall not be admissible as ITC under this Act.

(8) (a) Where as a result of an assessment/ adjudication proceedings instituted under

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the existing law before/ on/ after the appointed day

any amount of tax/ interest/ fine/ penalty becomes recoverable,
the same shall be recovered as an arrear of tax under this Act
unless it is recovered under the existing law
and the amount so recovered shall not be admissible as ITC under this Act.
(b) Where as a result of an assessment/ adjudication proceedings instituted under
the existing law before/ on/ after the appointed day
any amount of tax/ interest/ fine/ penalty becomes refundable,
the same shall be refunded in cash under the said law
overruling anything to the contrary contained under the previous laws
except for Section 11B(2) of the CEA, 1944
and any amount rejected shall not be admissible as ITC under this Act.

(9) (a) Where any return furnished under the existing law is revised after the
appointed day, and as a result of such revision
any amount is found recoverable or
any amount of CENVAT credit is found inadmissible,
the same shall be recovered as an arrear of tax under this Act
unless it is recovered under the existing law
and the amount so recovered shall not be admissible as ITC under this Act.
(b) Where any return furnished under the existing law is revised after the
appointed day, and as a result of such revision
any amount is found refundable or
any amount of CENVAT credit is found admissible,
the same shall be refunded in cash under the said law
overruling anything to the contrary contained under the previous laws
except for Section 11B(2) of the CEA, 1944
and any amount rejected shall not be admissible as ITC under this Act.

(10) Except for the cases provided to the contrary in this Chapter,
the goods/ services supplied on or after the appointed day
under a contract entered into before the appointed day
shall be liable to tax under this Act.

(11) (a) Overruling Section 12, no tax shall be payable on goods under this Act
to the extent tax was leviable on the said goods under the VAT Act of the State.
(b) Overruling Section 13, no tax shall be payable on services under this Act
to the extent tax was leviable on the said services under the FA, 1994.
(c) Where tax was paid on any supply both under the VAT Act and the FA, 1994,
GST shall be leviable under this Act
and the taxable person shall be entitled to take credit of VAT and ST
paid under the existing law
to the extent of supplies made after the appointed day
and such credit shall be calculated in the prescribed manner.

(12) Where any goods sent on approval basis

within 6 months before the appointed day
are rejected/ not approved by the buyer and returned to the seller
within 6 months after the appointed day
no tax shall be payable thereon.
The said period of 6 months may be extended by the Commissioner for a further period
not exceeding 2 months.

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Moreover, in case the goods are returned after the specified period
the tax shall be payable by the person returning the goods
if such goods are liable to tax under this Act.
Also, the tax shall be payable by the person who has sent the goods on approval basis
if such goods are liable to tax under this Act
and are not returned.

(13) Where a supplier has sold any goods in respect of which

tax was required to be deducted at source
under any VAT law of a state/ UT
and has also issued an invoice for the same before the appointed day,
no TDS shall be made u/s 51 by the deductor under the said section
where the payment to the said supplier is made on or after the appointed day.

Circular No. 42/ 16/2018-GST

Clarification regarding procedure for recovery of arrears under the existing law and reversal
of inadmissible input tax credit

a) Recovery of central excise duty, service tax or wrongly availed CENVAT credit
thereof under the existing law and inadmissible transitional credit:
(a) The CENVAT credit of central excise duty or service tax wrongly carried
forward as transitional credit shall be recovered as central tax liability to be
paid through the utilization of amounts available in the electronic credit
ledger or electronic cash ledger of the registered person, and the same shall
be recorded in Part II of the Electronic Liability Register (FORM GST PMT-01).
(b) The arrears of central excise duty, service tax or wrongly availed CENVAT
credit thereof under the existing law arising out of any of the situations
discussed in para 3 above, shall, unless recovered under the existing law, be
recovered as central tax liability to be paid through the utilization of amounts
available in the electronic credit ledger or electronic cash ledger of the
registered person, and the same shall be recorded in Part II of the Electronic
Liability Register (FORM GST PMT-01).
b) Recovery of interest, penalty and late fee payable:
o The arrears of interest, penalty and late fee in relation to CENVAT credit
wrongly carried forward, arising out of any of the situations discussed in para
3 above, shall be recovered as interest, penalty and late fee of central tax to
be paid through the utilization of the amount available in electronic cash
ledger of the registered person and the same shall be recorded in Part II of
the Electronic Liability Register (FORM GST PMT-01).
o The arrears of interest, penalty and late fee in relation to arrears of central
excise duty, service tax or wrongly availed CENVAT credit thereof under the
existing law arising out of any of the situations discussed in para 3 above,
shall, unless recovered under the existing law, be recovered as interest,
penalty and late fee of central tax to be paid through the utilization of the
amount available in the electronic cash ledger of the registered person and
the same shall be recorded in Part II of the Electronic Liability Register (FORM
GST PMT-01).
c) Payment of central excise duty & service tax on account of returns filed for the
past period:
The registered person may file Central Excise / Service Tax return for the period
prior to 1st July, 2017 by logging onto www.aces.gov.in and make payment
relating to the same through EASIEST portal (cbec-easiest.gov.in), as per the
practice prevalent for the period prior to the introduction of GST. However, with
effect from 1st of April, 2018, the return filing shall continue on www.aces.gov.in
but the payment shall be made through the ICEGATE portal. As the registered

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person shall be automatically taken to the payment portal on filing of the return,
the user interface remains the same for him.
d) Recovery of arrears from assessees under the existing law in cases where such
assessees are not registered under the CGST Act, 2017:
Such arrears shall be recovered in cash, under the provisions of the existing law
and the payment of the same shall be made as per the procedure mentioned in
para 4.3 supra.

Every person to whom Section 142(11)(c) applies,

shall submit a declaration in FORM GST TRAN-1
within the period specified in Rule 117 (or as extended),
furnishing the proportion of supply on which VAT/ ST has been paid before the appointed
day
but the supply is made after the appointed day and the ITC admissible.

Every person having sent goods on approval under the existing law
and to whom section 142(12) applies
shall submit details of such goods set on approval in FORM GST TRAN-1
within the period specified in Rule 117 (or as extended).

Every registered person who has submitted a declaration in FORM GST TRAN-1 within the
time period specified in Rule 117, 118, 119 and 120 may revise such declaration once and
submit the revised declaration in FORM GST TRAN-1 within the time period specified in the
said rules or as extended.

The transitional provisions enable the existing taxpayers to migrate to GST in transparent
and smooth manner under the GST Act, 2017 on and from the appointed day being 1.7.2017.
Explain.
[CS-Prof, Dec 2017]

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CGSTA, 2017
• Section 144: Presumption as to documents in certain cases
• Section 145: Admissibility of micro films, facsimile copies of documents and
computer print outs as documents and as evidence
• Section 146: Common Portal
• Section 147: Deemed Exports
• Section 148: Special procedure for certain processes
• Section 149: Goods and services tax compliance rating
• Section 150: Obligation to furnish information return
• Section 151: Power to collect statistics
• Section 152: Bar on disclosure of information
• Section 153: Taking assistance from an expert
• Section 154: Power to take samples
• Section 155: Burden of proof
• Section 156: Persons deemed to be public servants
• Section 157: Protection of action taken under this Act
• Section 158: Disclosure of information by a public servant
• Section 159: Publication of information in respect of persons in certain cases
• Section 160: Assessment proceedings etc. not to be invalid on certain grounds
• Section 161: Rectification of errors apparent on the face of record
• Section 162: Bar on jurisdiction of civil courts
• Section 163: Levy of fee
• Section 169: Service of notice in certain circumstances
• Section 170: Rounding off of tax, etc.
• Section 171: Anti-profiteering measure
• Section 172: Removal of difficulties
• Section 173: Amendment of Act 32 of 1994
• Section 174: Repeal and saving

Where any document –

(i) is produced by any person under any Act
(ii) has been seized from the custody/ control of any person under any Act
(iii) has been received from any place outside India in the course of any proceedings under
any Act
and such document is tendered by the prosecution in evidence against him or any other
person being tried jointly with him, the court shall –
(a) unless the contrary is proved by such person, presume –
(i) that the contents of such document are true
(ii) that the signature and every other part of such document which purports to be
in the handwriting of any particular person, or it has been reasonably assumed
by the court to be as such, is in that person’s handwriting, and in case a

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document is executed or attested, that it was done so by whom it purports to

have been executed or attested.
(b) admit the document in evidence without considering that it is not duly stamped, if it is
otherwise admissible in evidence.

(1) Overruling any other law –

(a) A micro film of a document or the reproduction of the image/ images embodied
in such micro film, or
(b) A fax copy of a document, or
(c) A statement contained in a document and included in a printed material
produced by a computer, subject to prescribed conditions, or
(d) Any information stored electronically on any device or media, including their
hard copies
shall be deemed to be a document for the purposes of this Act, admissible as
independent evidence in any proceedings.

(2) In any proceedings under GST Act, where it is desired to give a statement in evidence
by virtue of this section, a certificate –
(a) identifying the document containing the statement and describing the manner in
which it was produced
(b) giving appropriate particulars of the device involved in production of that
document to show that it was produced by a computer
shall be evidence of any matter stated in the certificate and for the purposes of this
sub-section for a matter to be stated to the best of the knowledge and belief of the
person stating it.

The Government may notify the Common GST e-Portal for facilitating registration, payment of
tax, furnishing of returns, computation and settlement of IGST, e-way bill and for carrying out
other prescribed functions and purposes.

Notfn. No.: 9/2018 - CT

The CG has notified
o www.gst.gov.in, the website managed by the GSTN, as the Common GST e-Portal
for facilitating registration, payment of tax, furnishing of returns, computation and
settlement of IGST and
o www.ewaybillgst.gov.in, the website managed by the NIC, as the Common GST e-
Portal for furnishing e-way bill.

Write a short note on Common Portal.

[CS-Prof, Dec 2017]

The Government may notify certain supplies of goods as deemed exports, where goods
supplied do not leave India, and payment for such supplies is received either in INR or in
convertible foreign exchange, if such goods are manufactured in India.

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Write a short note on Deemed Exports

[CS-Prof, Dec 2017]

Circular No. 14/ 14/2017-GST

Procedure regarding procurement of supplies of goods from DTA by Export
Oriented Unit (EOU) / Electronic Hardware Technology Park (EHTP) Unit / Software
Technology Park (STP) Unit / Bio-Technology Parks (BTP) Unit under deemed export
benefits under section 147 of CGST Act, 2017

(i) The recipient EOU / EHTP / STP / BTP unit shall give prior intimation in a
prescribed proforma in "Form–A" bearing a running serial number containing
the goods to be procured, as pre-approved by the Development
Commissioner and the details of the supplier before such deemed export
supplies are made. The said intimation shall be given to –
(a) the registered supplier;
(b) the jurisdictional GST officer in charge of such registered
supplier; and
(c) its jurisdictional GST officer.
(ii) The registered supplier thereafter will supply goods under tax invoice to the
recipient EOU / EHTP / STP / BTP unit.
(iii) On receipt of such supplies, the EOU / EHTP / STP / BTP unit shall endorse
the tax invoice and send a copy of the endorsed tax invoice to –
(a) the registered supplier;
(b) the jurisdictional GST officer in charge of such registered
supplier; and
(c) its jurisdictional GST officer.
(iv) The endorsed tax invoice will be considered as proof of deemed export
supplies by the registered person to EOU / EHTP / STP / BTP unit.
(v) The recipient EOU / EHTP / STP / BTP unit shall maintain records of such
deemed export supplies in digital form, based upon data elements contained
in "Form-B". The software for maintenance of digital records shall incorporate
the feature of audit trail. While the data elements contained in the Form-B are
mandatory, the recipient units will be free to add or continue with any
additional data fields, as per their commercial requirements. All recipient
units are required to enter data accurately and immediately upon the goods
being received in, utilized by or removed from the said unit. The digital
records should be kept updated, accurate, complete and available at the said
unit at all times for verification by the proper officer, whenever required. A
digital copy of Form – B containing transactions for the month, shall be
provided to the jurisdictional GST officer, each month (by the 10th of month)
in a CD or Pen drive, as convenient to the said unit.

Subject to prescribed conditions and safeguards the Government may notify certain classes of
registered persons and the special procedures to be followed by such persons including those
with regard to registration, furnishing of return, payment of tax and administration of such
persons.

(1) Every registered person may be assigned a GST compliance rating score by the
Government based on his record of compliance with the provisions of this Act.

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(2) The GST compliance rating score may be determined on the basis of prescribed
parameters.

(3) The GST compliance rating score may be updated at periodic intervals and intimated to
the registered person and also placed in the public domain in prescribed manner.

(1) Any person being –

(a) a taxable person, or
(b) A local authority or other public body or association, or
(c) any authority of the SG responsible for the collection of VAT or sales tax or
State excise duty or an authority of the CG responsible for the collection of
excise duty or customs duty; or
(d) an IT authority, or
(e) a bank; or
(f) a State Electricity Board or an electricity distribution or transmission licensee
under the Electricity Act, 2003, or any other entity entrusted with such
functions by the CG/ SG; or
(g) the Registrar or Sub-Registrar appointed under section 6 of the Registration Act,
1908; or
(h) a Registrar of Companies; or
(i) the registering authority empowered to register motor vehicles under the Motor
Vehicles Act, 1988; or
(j) the Collector, or
(k) the recognised stock exchange, or
(l) a depository; or
(m) an officer of the RBI; or
(n) the GSTN, or
(o) a person to whom a UIN has been granted; or
(p) any other person as may be specified, on the recommendations of the Council,
by the Government,
who is responsible for maintaining
o record of registration or
o statement of accounts or
o any periodic return/ document containing details of payment of tax and other
details of transaction of goods/ services or
o transactions related to bank account or
o consumption of electricity or
o transaction of purchase, sale or exchange of goods/ property or right/ interest
in a property
shall furnish an information return of the same for prescribed period and within
prescribed time.

(2) Where the Commissioner, or an officer authorized by him, considers that the
information so furnished is defective, he may intimate the provider of such information
return and give him an opportunity of rectifying the defect within 30 days of such
intimation (extendible on application).
In case he fails to do so within the prescribed time, then overruling the Act, such
information return shall be treated as not furnished and the provisions of this Act shall
apply accordingly.

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(3) Where a person who is required to furnish information return has not furnished the
same within the specified time, the said authority may serve upon him a notice
requiring furnishing such information return within 90 days from the date of service of
notice and such person shall furnish the information return.

(1) The Commissioner may, by notification, direct that statistics may be collected relating
to any matter dealt with by or in connection with this Act.

(2) Upon such notification, the Commissioner, or any person authorized by him, may call
upon the concerned persons to furnish such information or returns in the prescribed
manner relating to any matter in respect of which statistics is to be collected.

(1) No information of any individual return or any part thereof with respect to any matter
given for Section 150/ 151, shall be published in a manner enabling the identification of
its relation with any particular person without prior consent of the concerned person or
his authorized rep in writing. Also, no such information shall be used for the purpose of
any proceedings under this Act.

(2) Except for prosecution under any Act, no person who is not engaged in the collection
of statistics under this Act or compilation/ computerization of the same shall be
permitted to see or have access to any information or any individual return referred to
in Section 151.

(3) This section shall not apply to the publication of any information relating to a class of
taxable persons or class of transactions, if in the opinion of the Commissioner, it is
desirable in the public interest to publish such information.

Any officer ranking AC and above may take assistance of any expert at any stage of scrutiny,
inquiry, investigation or any other proceedings before him having regard to the nature and
complexity of the case and the interest of revenue.

Write a short note on taking assistance from an expert.

[CS-Prof, Dec 2017]

The Commissioner or an officer authorised by him may take samples of goods from the
possession of any taxable person, where he considers it necessary, and provide a receipt for
any samples so taken.

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Where any person claims that he is eligible for ITC under this Act, the burden of proving such
claim shall lie on such person.

All persons discharging functions under this Act shall be deemed to be public servants within
the meaning of section 21 of the IPC.

(1) No suit, prosecution or other legal proceedings shall lie against the President/ State
President/ Members/ officers/ other employees of the AT or any other person
authorised by the said AT for anything which is in good faith done or intended to be
done under this Act.

(2) No suit, prosecution or other legal proceedings shall lie against any officer appointed/
authorised under this Act for anything which is done or intended to be done in good
faith under this Act.

(1) All particulars contained in any statement made, return furnished or accounts/
documents produced or in any record of evidence given in the course of any
proceedings under this Act, except for proceedings before a criminal court, or in any
record of any proceedings under this Act shall not be disclosed, except for as provided
in sub-section (3).

(2) Overruling the Indian Evidence Act, 1872, no court shall require any officer of this Act to
produce before it or to give evidence before it in respect of particulars referred in sub-
section (1), except as provided in sub-section (3)

(3) This section shall not apply to the disclosure of –

(a) Any particulars in respect of any statement, return, accounts, documents,
evidence, affidavit or deposition, for any prosecution under the IPC or the
Prevention of Corruption Act, 1988, or any other law, or
(b) Any particulars to the CG/ SG or to any person acting in the implementation of
this Act, for carrying out the objects of this Act, or
(c) Any particulars when such disclosure is caused by the lawful exercise of any
process for the service of any notice or recovery of any demand under this Act,
or
(d) Any particulars to a civil court in any suit or proceedings, to which the
Government or any authority under this Act is a party, which relates to any
matter arising out of any proceedings under any law authorizing any such
authority to exercise any powers thereunder, or
(e) Any particulars to any officer appointed for audit of tax receipts or refunds of
the tax imposed by this Act; or

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(f) Any particulars relevant for any inquiry into the conduct of any officer
appointed/ authorised under this Act, to any person(s) appointed as an inquiry
officer under any law; or
(g) Any such particulars to an officer of the CG/ SG, as may be necessary to enable
that Government to levy or realise any tax or duty; or
(h) Any particulars when such disclosure is caused by the lawful exercise by a
public servant or any other statutory authority, of his or its powers under any
law; or
(i) Any particulars relevant to any inquiry into a charge of misconduct in
connection with any proceedings under this Act against
▪ a practising advocate,
▪ a tax practitioner,
▪ a practising cost accountant,
▪ a practising chartered accountant,
▪ a practising company secretary
to the authority empowered to take disciplinary action against the members
practising the profession of a legal practitioner, a cost accountant, a chartered
accountant or a company secretary, as the case may be; or
(j) Any particulars to any agency appointed for data entry on any automated
system or for operating/ upgrading/ maintaining any automated system where
such agency is contractually bound not to use/ disclose such particulars except
for the aforesaid purposes; or
(k) Any particulars to an officer of the Government as may be necessary for the
purposes of any other law; or
(l) Any information relating to any class of taxable persons or class of transactions
for publication, if, in the opinion of the Commissioner, it is desirable in the
public interest, to publish such information.

(1) If the Commissioner or any officer authorized by him is of the opinion that it is in the
public interest to publish the name of any person and any other particulars relating to
any proceedings/ prosecution under this Act in respect of such person, he may get
such name and particulars published.

(2) No publication shall be made in relation to any penalty imposed under this Act until the
time for presenting an appeal to the AT u/s 107 has expired without an appeal being
presented, or if presented, has been disposed of.
In case of firm/ company/ AOP, the names of the
o Partners
o Directors
o Managing agents
o Secretaries
o Treasurers/ managers
o Members
may also be published if justified by the circumstances.

(1) No assessment, re-assessment, adjudication, review, revision, appeal, rectification,

notice, summons or other proceedings done, accepted, made, issued, initiated in

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pursuance of this Act shall be invalid or deemed to be invalid merely by reason of any
mistake, defect or omission therein, if such proceedings are in substance and effect in
conformity with or according to the intents, purposes and requirements of this Act or
any existing law.

(2) The service of any notice, order or communication shall not be called in question, if the
notice, order or communication, as the case may be, has already been acted upon by
the person to whom it is issued or where such service has not been called in question
at or in the earlier proceedings commenced, continued or finalised pursuant to such
notice, order or communication.

Subject to Section 160 but overruling the rest of the Act, any authority who has issued any
decision/ order/ notice/ certificate/ any other document may rectify any error which is
apparent on the face of record in such document, either on its own motion or where such error
is brought to its notice by any officer appointed under CGSTA/ SGSTA/ UTGSTA or by the
affected person within3 months from the date of issue of such document.
However, no such rectification shall be done after 6 months of the issue of such document,
except where it is purely in the nature of correction of clerical/ arithmetical error, arising due to
some accidental slip or omission.
If such rectification adversely affects any person, the principles of natural justice shall be
followed by the correcting authority.

A show cause notice was issued demanding GST of ₹ 1,80,180 for the month of July, 2017 on
1st October, 2017. However adjudicating authority after the personal hearing found that
there was a typographical error while mentioning the amount of GST and he confirmed the
demand for ₹ 10,80,180. Assessee seeks your advice.
What would be your advice if: (a) assessee comes to you after issue of order or (b) a
corrigendum revising the amount to ₹ 10,80,180 on 15th November, 2017, is issued.
[CA-Final, Nov 2018]

Explain the provisions relating to rectification of error apparent on the face of record under
section 161 of the CGST Act, 2017.
[CA-Final, May 2019]

Subject to sections 117 and 118, no civil court shall have jurisdiction to deal with or decide any
question arising from or relating to anything done or purported to be done under this Act.

Wherever a copy of any order or document is to be provided to any person on an application

made by him for that purpose, there shall be paid such fee as may be prescribed.

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(1) Any decision, order, summons, notice or other communication under this Act shall be
served by any one of the following methods —
(a) by giving it directly or by a messenger including a courier to
▪ the addressee or
▪ the taxable person or
▪ his manager/ authorised representative / an advocate/ a tax practitioner
holding authority to appear in the proceedings on behalf of the taxable
person or
▪ a person regularly employed by him in connection with the business, or
▪ any adult member of family residing with the taxable person;
(b) by registered post or speed post or courier with acknowledgement due, to the
person for whom it is intended or his authorised representative, if any, at his last
known place of business or residence; or
(c) by sending a communication to his e-mail address provided at the time of
registration or as amended from time to time; or
(d) by making it available on the common portal; or
(e) by publication in a newspaper circulating in the locality in which the taxable
person or the person to whom it is issued is last known to have resided, carried
on business or personally worked for gain; or
(f) if none of the modes aforesaid is practicable, by affixing it in some conspicuous
place at his last known place of business or residence and if such mode is not
practicable for any reason, then by affixing a copy thereof on the notice board
of the office of the concerned officer or authority who or which passed such
decision or order or issued such summons or notice.

(2) Every decision, order, summons, notice or any communication shall be deemed to
have been served on the date on which it is tendered or published or a copy thereof is
affixed in the manner provided in sub-section (1).

(3) When such decision, order, summons, notice or any communication is sent by
registered post or speed post, it shall be deemed to have been received by the
addressee at the expiry of the period normally taken by such post in transit unless the
contrary is proved.

The amount of tax, interest, penalty, fine or any other sum payable, and the amount of refund
or any other sum due, under the provisions of this Act shall be rounded off to the nearest rupee
and, for this purpose, where such amount contains a part of a rupee consisting of paise, then, if
such part is 50p or more, it shall be increased to ₹ 1 and if such part is less than 50p it shall be
ignored.

(1) Any reduction in rate of tax on any supply of goods/ services or the benefit of ITC shall
be passed on to the recipient by way of commensurate reduction in prices.

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(2) The CG may by notification, constitute an Authority, or empower an existing Authority

constituted under any law, to examine whether ITC availed by any registered person or
the reduction in the tax rate have actually resulted in a commensurate reduction in the
price of the goods/ services supplied by him.

The National Anti-Profiteering Authority shall consist of –

(a) a Chairman who holds or has held a post equivalent in rank to a Secretary to the GOI,
and
(b) 4 Technical Members who are or have been Commissioners of SGST/ CGST for at
least 1 year
OR
have held an equivalent post under the previous indirect tax laws
(to be nominated by the Council)

(1) The Council may constitute a Standing Committee on Anti-profiteering

which shall consist of the officers nominated by CG and SG.

(2) The SG of each state shall constitute a State level Screening Committee
which shall consist of –
i) 1 officer of the SG to be nominated by the Commissioner, and
ii) 1 officer of the CG to be nominated by the Chief Commissioner

(1) The Chairman and Members of the Authority shall be appointed by the CG
on the recommendations of a Selection Committee constituted by the Council.

(2) The Chairman shall be paid a salary of ₹ 2,25,000 p.m.

and other allowance and benefits admissible to a CG officer with equivalent pay.
However, in case the Chairman is a retired officer,
the salary shall be reduced by the amount of pension.

(3) The Technical Member shall be paid a monthly salary and other allowances and
benefits as are admissible to him when holding an equivalent Group ‘A’ post in the
GOI.
However, where a retired officer is selected as a Technical Member,
his monthly salary shall be the last drawn salary reduced by the amount of pension
in accordance with the recommendations of the 7th Pay Commission
as accepted by the CG.

Tenure of Earlier of… Eligible for

Reappointment
(4) The Chairman 2 yrs. or until he is 65 yrs. of Yes
age*
(5) The Technical Member 2 yrs. or until he is 65 yrs. of Yes
age*

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*NOTE: The Chairman/ Technical Member shall not be selected if he has attained 62
yrs. of age.
Moreover, on recommendation of the Council, the CG may terminate the appointment
of the Chairman/ Technical Member at any time, subject to an opportunity of being
heard.

An officer ranking AC and above (working in the Directorate General of Safeguards)

shall be the Secretary to the Authority.

The Authority may determine the methodology and procedure to determine

whether the benefit of reduction in tax rate or ITC has been passed on
by the registered person to the recipient
by way of commensurate reduction in prices.

The Authority shall –

(i) determine whether any benefit of reduction in tax rate or ITC
has been passed on to the recipient
by commensurate reduction in prices.
(ii) identify the registered person who has not passed on such benefits
(iii) order
(a) reduction in prices
(b) return of the amount not passed on by way of commensurate reduction in
prices
along with interest @ 18% from the date of collection till the date of return
OR
recovery of the said amount, in case the eligible person does not claim the
return or is not identifiable,
and depositing the same in the CWF.
(c) Imposition of penalty as specified in the Act, and
(d) Cancellation of registration under the Act.
(iv) furnish a performance report to the Council by the 10th day of the close of each
quarter.

What are the duties of National Anti-profiteering Authority enumerated in the CGST Act?
[CA-Final, Nov 2018]

(1) Within 2 months from the date of receipt of a written application or within a period
further extended by at most 1 month from
o an interested party or
o a Commissioner or
o any other person
the Standing Committee shall examine the accuracy and adequacy of the evidence
provided in the application

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to determine whether there is prima-facie evidence to support the claim

that the benefit of reduction in the rate of tax or the ITC has not been passed on
to the recipient by commensurate reduction in prices.

(2) All applications from interested parties on issues of local nature

or those forwarded by the Standing Committee
shall first be examined by the State level Screening Committee
and the Committee shall forward the same with its recommendations to the Standing
Committee
within 2 months from the date of receipt of a written application or within a period
further extended by at most 1 month
upon being satisfied that the supplier has contravened section 171.

NOTE: “Interested party” includes –

a. suppliers of goods/ services under the proceedings,
b. recipients of goods/ services under the proceedings and
c. any other person
alleging that a registered person has not passed on the benefit of
▪ reduction in the tax rate on any supply or
▪ ITC
to the recipient
by corresponding reduction in prices

(1) Where the Standing Committee is satisfied with the prima-facie evidence under Rule
128, it shall refer the matter to the DGAP for a detailed investigation.

(2) The DGAP shall conduct investigation and collect necessary evidence to determine
whether the said benefits have been passed on to the recipient.

(3) Before initiation of the investigation, the DGAP shall issue a notice to the interested
parties containing the following –
(a) The description of the goods/ services in respect of which the proceedings
have been initiated.
(b) Summary of the statement of facts on which the allegations are based, and
(c) The time limit allowed to the interested parties and other persons who may
have information related to the proceedings for furnishing their reply

(4) The DGAP may also issue notices to other persons for a fair enquiry into the matter.

(5) The DGAP shall make available the evidence presented to it by one interested party
to the other interested parties who are participating in the proceedings.

(6) The DGAP shall complete the investigation within 3 6 months (or as extended by
upto 3 months by the Authority) of the receipt of reference from the Standing
Committee and upon completion of the investigation furnish a report of its findings to
the Authority with the relevant records.

(1) The provisions of Section 11 of the RTI Act, 2005 shall apply mutatis mutandis to the
disclosure of any confidential information.

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(2) The DGAP may require the parties providing confidential information to furnish a
non-confidential summary thereof.
In case the party feels it cannot be summarised, the said party may submit a
statement of reasons as to why summarisation is not possible.

The DGAP may seek opinion of any other agency or statutory authorities.

(1) The Authority, DGAP or an authorized officer shall be deemed to be the PO to

summon any person whose attendance he considers necessary to give evidence or
any other thing u/s 70 and shall have the same power as that of a civil court under
CPC, 1908.

(2) Every such inquiry shall be deemed to be a judicial proceeding u/s 193 and 228 of
IPC.

(1) Within 3 6 months from the date of receipt of DGAP report, the Authority shall
determine whether a registered person has passed on the benefit of the reduction in
tax rate or ITC to the recipient by commensurate reduction in prices.

(2) An opportunity of hearing shall be granted to the interested parties by the Authority
where any request is received in writing from such interested parties.

(2A) The Authority may seek any clarification from the DGAP on the report submitted u/r
129(6) during the process of determination under (1) above.

(3) Where the Authority determines that such benefit has not been passed on, it may
order –
(a) reduction in prices,
(b) return the amount, not passed on by reduction in prices, to the recipient
along with interest @ 18% from the date of collection till the date of return
OR
recovery of the said amount including interest not returned,
(c) the deposit of an amount equivalent to 50% of the amount determined under
the above clause along with interest @ 18% from the date of collection of the
higher amount till the date of its deposit in the CWF constituted under this
Act, and the remaining 50% in the CWF constituted under “concerned State”
GST Act,
in case the eligible person does not claim return of the amount or
is not identifiable
(d) imposition of penalty as specified in the Act and
(e) cancellation of registration under the Act.

(4) If the DGAP report referred to in rule 129(6) recommends that there is contravention
or even non-contravention of section 171 or these rules,
but the Authority opines that further investigation/ inquiry is called for in the matter,
it may refer the matter to the DGAP to cause further investigation or inquiry.

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(5) (a) Overruling (4) above,

where upon receipt of the DGAP report referred to in rule 129(6)
the Authority has reasons to believe that there has been contravention of
section 171 for goods/ services other than those covered in the said report,
it may direct the DGAP to cause investigation/ inquiry with regard to such
other goods/ services within the time limit specified in (1) above.
(b) The investigation/ inquiry under (a) shall be deemed to be a new
investigation/ inquiry
and all the provisions of Rule 129 shall mutatis mutandis apply to such
investigation/ inquiry.

NOTE: Concerned State means the state/ UT for which the Authority passes an order.

(1) At least 3 members of the Authority shall constitute quorum at its meetings
(2) If the Members of the Authority differ in opinion on any point,
the point shall be decided according to the opinion of the majority of members
present and voting
and in case of equal votes, the Chairman shall have the second/ casting vote..

Any order passed by the Authority shall be immediately complied with by the registered
person
failing which action shall be initiated to recover the amount under the GST laws.

The Authority may require any authority of CGST/ SGST/ UTGST to monitor the
implementation of the order passed by it.

The National Anti-profiteering Authority shall cease to exist after 2 4 yrs. from the date on
which the Chairman enters upon his office
unless the Council recommends otherwise.

State the duties and powers of the Anti-profiteering Committee under GST law.
[CMA-Final, Jun 2018]

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CGSTA, 2017
• Section 67: Power of inspection, search and seizure
• Section 68: Inspection of goods in movement
• Section 70: Power to summon
• Section 71: Access to business premises
• Section 72: Officers to assist PO

(1) Where the PO ranking JC and above

has reasons to believe that –
(a) a taxable person has
▪ suppressed any transaction relating to supply
▪ suppressed the stock of goods in hand
▪ claimed ITC in excess of his entitlement
▪ indulged in contravention of any provisions of the Act or Rules to evade
tax
OR
(b) any person engaged in the business of transporting goods or
an owner/ operator of warehouse/ godown
is keeping goods which have escaped payment of tax or
has kept his accounts or goods in a manner to evade tax
he may authorize any other officer to inspect any places of business of
o the taxable person,
o the persons engaged in the business of transporting goods, or
o the owner/ operator of warehouse/ godown.

(2) As a result of inspection or otherwise

where the PO ranking JC and above
has reasons to believe that
any goods liable to confiscation or
any documents/ books/ things which shall be relevant to any proceedings under the
Act
are secreted in any place
he may himself/ authorize any other officer to
search and seize such goods/ documents/ books/ things.
However, where it is not practicable to seize any such goods
the PO may serve an order
on the owner/ custodian of the goods
that he shall not remove/ part with/ otherwise deal with the goods
without prior permission of such officer.

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Also, the documents/ books/ things seized

shall be retained only for so long as may be necessary for their examination and for any
inquiry/ proceedings under this Act.

(3) The documents/ books/ things referred previously or

any other documents/ books/ things produced by
the taxable person or any other person
which have not been relied upon for issue of any notice under the Act
shall be returned to such person within 30 days of the issue of said notice.

(4) Where the access to any premises, almirah, electronic devices, box or receptacle is
denied
and it is suspected that
any goods/ accounts/ registers/ documents of the person are concealed in it
the officer authorized u/ ss (2) shall have the power to seal or break open the door of
such premises
or to break open any such almirah, electronic devices, box or receptacle.

(5) The person from whose custody any documents are seized
shall be entitled to make copies or take extracts from them
in the presence of an authorized officer
at the time and place indicated by such officer
except where in his opinion
making such copies or taking extracts
may prejudicially affect the investigation

(6) The seized goods shall be released provisionally

upon execution of a bond and furnishing of a security
in the prescribed manner
or on payment of applicable tax, interest and penalty
as the case may be.

(7) Where no notice in respect of the seized goods

is given within 6 months of the seizure,
the goods shall be returned to the person
from whose possession they were seized.
However, on sufficient cause being shown
this period may be extended by the PO
by a period not exceeding 6 months.

(8) Considering the

o Perishable/ hazardous nature of any goods
o Depreciation in the value of goods over time
o Constraints of storage space for the goods
o Other relevant considerations
the Government may notify the goods or class of goods
which shall be disposed of by the PO in the prescribed manner
as soon as may be after its seizure.

Notfn. No.: 27/2018 – CT

The CG has notified the following goods which shall be disposed of by the PO asap after its
seizure u/s 67(2), considering the perishable/ hazardous nature, depreciation in value over
time, constraints of storage space or any other relevant considerations:

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(1) Salt and hygroscopic substances (substances tending to absorb moisture from the
air)
(2) Raw (wet and salted) hides and skins
(3) Newspapers and periodicals
(4) Menthol, Camphor, Saffron
(5) Refills for ball point pens
(6) Lighter fuels, including lighters with gas, not having arrangement for refilling
(7) Cells, batteries and rechargeable batteries
(8) Petroleum products
(9) Dangerous drugs and psychotropic substances
(10) Bulk drugs and chemicals as per CTA, 1975, First Schedule, Section VI.
(11) Pharmaceutical products as per CTA, 1975, First Schedule, Chapter 30
(12) Fireworks
(13) Red Sander
(14) Sandalwood
(15) All taxable goods falling within Chapters 1 – 24 of CTA, 1975, First Schedule, like live
animals, meat, vegetable products etc.
(16) All unclaimed/ abandoned goods which are liable to rapid depreciation in value due
to fast change in technology or new models etc.
(17) Any goods seized u/s 67 which are to be provisionally released u/s 67(6), but
provisional release has not been taken by the concerned person within 1 month from
the date of execution of the bond for provisional release.

(9) The PO or any authorized officer

shall prepare an inventory of the seized goods
specified in sub-section (8)

(10) The provisions of the CrPC, 1973 relating to search and seizure
shall apply mutatis mutandis

(11) Where the PO has reasons to believe that

any person has evaded or is attempting to evade any tax
he may seize the accounts/ registers/ documents
of such person produced before him
for reasons to be recorded in writing
and grant him a receipt for the same.
These shall be retained for so long as may be necessary
in connection with any proceedings under the Act for prosecution,

(12) The Commissioner or any authorized officer

may cause purchase of any goods/ services
by any authorized person from the business premises of any taxable person
to check issue of tax invoices/ bills of supply
and on return of goods so purchased
the taxable person shall refund the amount so paid towards the goods
after cancelling any tax invoice/ bill of supply issued earlier.

(1) A PO ranking JC and above shall issue an authorization in FORM GST INS-01 to any
subordinate officer to conduct inspection/ search/ seizure of goods/ documents/
books/ things liable to confiscation where he has reasons to believe that any place is
to be visited for such purposes.

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(2) The PO shall make a seizure order in FORM GST INS-02 where any goods/
documents/ books/ things are liable to be seized u/s 67(2).

(3) The PO may entrust upon the owner/ custodian of seized goods, the custody of such
goods for safe keeping and the said person shall not remove, part with, or otherwise
deal with these goods without prior permission of such officer.

(4) For goods that cannot practicably be seized, the PO may serve an order of
prohibition in FORM GST INS-03 on the owner/ custodian of goods that he shall not
remove, part with, or otherwise deal with these goods without prior permission of
the officer.

(5) The officer seizing the goods/ documents/ books/ things shall prepare an inventory
of such goods/ documents/ books/ things containing the description, quantity/ unit,
make/ model and get it signed by the owner/ custodian.

A proper officer not below the rank of Joint Commissioner or an Officer authorized by such
proper Officer can make an order of seizure in Form:
(A) GST INS-01
(B) GST INS-02
(C) GST INS-03
(D) None of the above
[CS-Exec, Jun 2018]

(B) GST INS-02

(1) The seized goods may be provisionally released on execution of a bond in FORM GST
INS-04 for the value of the goods and furnishing bank guarantee equivalent to tax,
interest and penalty payable as security.

(2) In case such a person fails to produce the goods at the appointed date and place
indicated by the PO, the security shall be encashed and adjusted against the tax,
interest and penalty and fine.

Goods seized by a proper Officer or an Authorized Officer can be released on a provisional

basis upon execution of a bond for the value of goods and furnishing of security. The bond
so executed will be in Form:
(A) GST INS-06
(B) GST INS-03
(C) GST INS-01
(D) GST INS-04
[CS-Exec, Jun 2018]

(D) GST INS-04

(1) In case perishable/ hazardous goods are seized, and if the taxable person pays
(a) the MV of such goods or
(b) the tax, interest and penalty payable

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whichever is lower,
such goods shall be released immediately by an order in FORM GST INS-05, on
proof of payment.

(2) In case he fails to make such payment, the Commissioner may dispose of such goods
and the realization shall be adjusted against the amount payable.

(1) The Government may require the PIC of a conveyance

carrying any consignment of goods of specified value
to carry with him prescribed documents and devices.

(2) The details of documents required to be carried u/ ss (1)

shall be validated in prescribed manner.

(3) Where any conveyance referred u/ ss (1) is intercepted by PO

he may require the PIC to produce the documents and devices for verification, and the
said person shall be liable to produce the same and also allow the inspection of goods.

(1) The PO shall have power to summon any person

whose attendance he considers necessary
to produce evidence/ document/ any other thing
in any inquiry in the same manner as CrPC
(2) Every such inquiry shall be deemed to be a “judicial proceeding”
within the meaning of Section 193 and 228 of IPC.

(1) Any officer authorized by PO ranking JC and above

shall have access to any place of business of a registered person to inspect books of
account, documents, computers, computer programs, computer software (installed or
not)
and other things required/ available at such place
for carrying out any audit, scrutiny, verification and checks
to safeguard the interest of revenue

(2) Every PIC of such place shall make available to the authorized officer, or the audit
party/ CA/ CMA nominated u/s 66
the following documents for scrutiny
within 15 days from the day of demand (or as extended) –
(i) Records prepared/ maintained by the registered person
and declared to the PO in the prescribed manner,
(ii) Trial balance or its equivalent
(iii) Annual financial statements, duly audited, wherever required
(iv) Cost audit report u/s 148 of CA, 2013
(v) The income tax audit report u/s 44AB of the IT Act, 1961
(vi) Any other relevant record

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All officers of Police, Railways, Customs, and those officers engaged in the collection of land
revenue, including village officers, officers of SGST/ UTGST, shall assist PO in implementation
of this Act.

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CGSTA, 2017
• Section 122: Penalty for certain offences
• Section 123: Penalty for failure to furnish information return
• Section 124: Fine for failure to furnish statistics
• Section 125: General Penalty
• Section 126: General disciplines related to penalty
• Section 127: Power to impose penalty in certain cases
• Section 128: Power to waive penalty or fee or both
• Section 129: Detention, seizure and release of goods and conveyances in transit
• Section 130: Confiscation of goods or conveyances and levy of penalty
• Section 131: Confiscation or penalty not to interfere with other punishments
• Section 132: Punishment for certain offences
• Section 69: Power to Arrest
• Section 133: Liability of officers and certain other persons
• Section 134: Cognizance of offences
• Section 135: Presumption of culpable mental state
• Section 136: Relevancy of statements under certain circumstances
• Section 137: Offences by companies
• Section 138: Compounding of offences

(1)
Offences Penalty
(i) Supply goods/ services without issuing any invoice
OR
Issue an incorrect/ false invoice for any such supply
(ii) Issue invoice/ bill without supply of goods/ services
(iii) Collect tax but fail to pay the same to the Government
beyond 3 months of such payment becoming due.
(iv) Collect any tax in contravention of the Act but fail to
pay the same to the Government beyond 3 months of
such payment becoming due
(v) o Fail to deduct tax u/s 51(1)
o Deduct less tax than required u/s 51(1)
o Fail to pay the tax deducted to the Government
u/s 51(2)
(vi) o Fail to collect tax u/s 52(1)
o Collect less tax than required u/s 52(1) Higher of
o Fail to pay the tax collected to the Government o ₹ 10,000
u/s 52(3) o Tax evaded
(vii) Utilize full or part ITC without actual receipt of goods/ o Tax not/ short
services deducted u/s 51 or
(viii) Fraudulently obtain any refund deducted but not
(ix) Distribute ITC in contravention of Section 20 paid to the
(x) o Falsify/ substitute financial records or Government

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o Produce fake accounts/ documents o Tax not/ short

o Furnish any false information/ return collected u/s 52 or
with an intention to evade tax collected but not
(xi) Fail to obtain registration despite being liable to the paid to the
same Government
(xii) Furnish any false information regarding registration o ITC availed/ passed
particulars at the time of applying for registration, or on/ distributed
subsequently irregularly
(xiii) Obstruct or prevent any GST officer in discharge of o Refund claimed
his duties fraudulently
(xiv) Transport any taxable goods without the cover of
specified documents
(xv) Suppress turnover in order to evade tax
(xvi) Fail to keep/ maintain/ retain books of accounts and
other specified documents
(xvii) o Fail to furnish
o Furnish false
Information/ documents during any proceedings
(xviii) Supply/ transport/ store any goods which are liable
to confiscation
(xix) Issue any invoice by using the regn. no. of another
registered person.
(xx) Tamper with or destroy any material evidence
(xxi) Dispose of/ tamper with any detained/ seized/
attached goods

(2) Any registered person who supplies any goods/ services on which any
(a) tax
▪ has not been paid,
▪ short paid or
▪ erroneously refunded; or
(b) ITC has been wrongly
▪ availed or
▪ utilized
For reason Penalty
(a) other than Higher of
▪ fraud or ▪ ₹ 10,000 or
▪ any wilful-misstatement or ▪ 10% of the tax due from
▪ suppression of facts such person
to evade tax
(b) of Higher of
▪ fraud or ▪ ₹ 10,000 or
▪ any wilful-misstatement or ▪ the tax due from such
▪ suppression of facts person
to evade tax

(3)
Any person who - Shall be liable to a penalty of
(a) aids/ abets any of the offences u/ ss (1)

(b) possesses or in any way concerns himself in

▪ transporting
▪ removing
▪ depositing

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▪ keeping ₹ 25,000 max.

▪ concealing
▪ supplying
▪ purchasing
▪ dealing in any other way
goods which he knows are liable to confiscation under
this Act
(c) receives or is in any way concerned with the supply of
services which he knows are in contravention of this
Act.
(d) fails to appear before the GST officer when issued with
a summon for the same
(e) fails to issue invoice or account for an invoice in his
books

If a person who is required to furnish an information return u/s 150 fails to do so

within the period specified in the notice issued u/s 150(3),
the PO may direct that
such person shall be liable to pay a penalty of
o ₹ 100/ day OR
o ₹ 5,000
whichever is lower.

If any person required to furnish any information/ return u/s 151 –

➢ fails to furnish the same without any reasonable cause, or
➢ furnishes false information/ return wilfully
he shall be punishable with a fine
which may extend to ₹ 10,000
and in case of a continuing offence
to a further fine which may extend to
o ₹ 100 per day after the first day, OR
o ₹ 25,000
whichever is lower.

Any person contravening any provision of this Act

for which no penalty is separately provided for anywhere
shall be liable to pay a penalty extending to ₹ 25,000.

(1) No penalty shall be imposed for minor breaches of tax regulations or procedural
requirements,

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particularly, any omission/ mistake in documentation which is easily rectifiable and

made without any fraud intent or gross negligence.
NOTE: (a) Minor breach = Tax involved in breach < ₹ 5,000.
(b) Easily rectifiable omission/ mistake = Error apparent on the face of record.

(2) The penalty imposed shall depend on the facts and circumstances of each case
and shall be commensurate with the degree and severity of the breach.

(3) No penalty shall be imposed on any person without giving him an opportunity of being
heard.

(4) While imposing penalty in an order, the officer shall specify the nature of the breach
and the applicable law, regulation or procedure under which the penalty for breach has
been specified.

(5) When a person voluntarily discloses the circumstances of a breach to an officer

prior to the discovery of the breach
the PO may consider this fact as a mitigating factor while quantifying a penalty for that
person.

(6) This section shall not apply in cases where

the penalty specified is
o either a fixed sum or
o a fixed percentage.

Mangeshwar, registered under the CGST Act, 2017 has made a breach in payment of tax
amounting to ₹ 6,100. Assessing authority has imposed a penalty as per law applicable to
the breach. Invoking the provisions of Section 126, Mangeshwar argues that it is a minor
breach and therefore no penalty is imposable.
In another instance, Mangeshwar has omitted certain details in documentation that is not
easily rectifiable. This has occurred due to the gross negligence of his accountant and he
makes a plea that he was unaware of it and therefore no penalty should be levied.
Mangeshwar voluntarily writes accepting a major procedural lapse from his side and
requests the officer to condone the lapse as the loss caused to the revenue was not
significant. Also, a lapse on the part of Mangeshwar has no specific penalty provision
under the CGST Act, 2017. He is very confident that no penalty should be levied without a
specific provision under the Act.
Discuss, what action may be taken by the Assessing Authority under law for each of the
above breaches.
[CA-Final, May 2018]

Where the PO is satisfied that a person is liable to be penalised

and the same is not covered under proceedings in section 62/ 63/ 64/ 73/ 74/ 129/ 130
he may issue an order levying such penalty
after giving the person an opportunity of being heard.

On the recommendation of the Council,

the Government may notify the waiver of any

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 GST Simplified™ Ready Reckoner for Students and Professionals

o penalty referred u/s 122/ 123/ 125 or

o late fee referred u/s 47
for a specified class of taxpayers
under the specified mitigating circumstances.

(1) Overruling this Act, where any person

o Transports any goods or
o Stores any goods while in transit
in contravention to the Act,
all such goods and conveyances
and the documents relating to such goods and conveyances
shall be liable to be detained/ seized,
and shall be released –
(a) where the owner of the goods comes forward for payment of tax and penalty -
▪ in case of taxable goods – on payment of applicable tax + penalty (100%
tax payable)
▪ in case of exempted goods – on payment of
➢ 2% of the value of goods or
➢ ₹ 25,000
whichever is less
(b) where the owner of the goods does not come forward for payment of tax and
penalty –
▪ in case of taxable goods – on payment of applicable tax + penalty (50%
of value – tax paid)
▪ in case of exempted goods – on payment of
➢ 5% of the value of goods or
➢ ₹ 25,000
whichever is less
(c) upon furnishing a security equivalent to the amount payable under (a)/ (b) in the
prescribed form.
However, no such goods/ conveyances shall be detained/ seized without serving an
order of detention/ seizure on the person transporting the goods.

(2) Section 67(6) shall apply for detention and seizure mutatis mutandis.

(3) The PO detaining/ seizing goods/ conveyances

shall first issue a notice specifying the tax and penalty
and then an order for payment of the same
under clause (a)/ (b)/ (c)

(4) No tax, interest or penalty u/ ss (3) shall be determined

without giving the person an opportunity of being heard.

(5) On payment of amount referred in (1) above,

all proceedings in respect of the notice specified in (3)
shall be deemed to be concluded.

(6) Where the person transporting any goods

or the owner of the goods

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 GST Simplified™ Ready Reckoner for Students and Professionals

fails to pay the tax and penalty u/ ss (1)

within 14 days of such detention/ seizure,
further proceedings shall be initiated u/s 130.
However, where the detained/ seized goods are perishable/ hazardous in nature
or are likely to depreciate in value with passage of time,
the said period may be reduced by the PO.

XYZ carries goods from Vadodra to Pune. The value of the goods is ₹ 80,000 which are
chargeable to tax @ 18% IGST and in transit, proper officer intercepted the same under
section 68 of the CGST Act, and found contravention.
Calculate the penalty payable under section 129 of CGST Act, 2017:
- If XYZ comes forward for payment of tax and penalty
- If XYZ does not come forward for payment of tax and penalty
[CA-Final, May 2019]

- 100% × 18% of ₹ 80,000 = ₹ 14,400

- (50% × ₹ 80,000) + (50% × ₹ 80,000) – ₹ 14,400 = ₹ 65,600

From the following details, calculate the amount to be paid, for release of goods detained
or seized under section 129 of the CGST Act, 2017, if owner of the goods does not come
forward for payment of applicable tax and penalty
Details are as follows:
Particulars Amount (₹)
Value of goods 30,00,000
Applicable GST on such goods 5,40,000
GST already paid on such goods 3,60,000
Would your answer be different if goods were exempted from GST and value remains the
same namely ₹ 30,00,000?
[CA-Final, May 2019]

₹ [5,40,000 + 50% × 30,00,000] – 3,60,000 = ₹ 16,80,000

Yes

Circular No. 64/ 38/2018-GST

Modification of the procedure for interception of conveyances for inspection of goods in
movement, and detention, release and confiscation of such goods and conveyances

1. Section 68 of the CGST Act read with rule 138A of the CGST Rules requires that the
person in charge of a conveyance carrying any consignment of goods of value
exceeding ₹ 50,000/ - should carry a copy of documents viz., invoice/ bill of
supply/ delivery challan/ bill of entry and a valid e-way bill in physical or electronic
form for verification. In case such person does not carry the mentioned documents,
there is no doubt that a contravention of the provisions of the law takes place and the
provisions of section 129 and section 130 of the CGST Act are invokable. Further, it
may be noted that the non-furnishing of information in Part B of FORM GST EWB-01
amounts to the e-way bill becoming not a valid document for the movement of
goods by road as per Explanation (2) to rule 138(3) of the CGST Rules, except in the
case where the goods are transported for a distance of upto 50 km within the State
or Union territory to or from the place of business of the transporter to the place of
business of the consignor or the consignee, as the case may be.

2. Whereas, section 129 of the CGST Act provides for detention and seizure of goods
and conveyances and their release on the payment of requisite tax and penalty in
cases where such goods are transported in contravention of the provisions of the
CGST Act or the rules made thereunder. It has been informed that proceedings under

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 GST Simplified™ Ready Reckoner for Students and Professionals

section 129 of the CGST Act are being initiated for every mistake in the documents
mentioned in para 3 above. It is clarified that in case a consignment of goods is
accompanied by an invoice or any other specified document and not an e-way bill,
proceedings under section 129 of the CGST Act may be initiated.

3. Further, in case a consignment of goods is accompanied with an invoice or any other

specified document and also an e-way bill, proceedings under section 129 of the
CGST Act may not be initiated, inter alia, in the following situations:
a) Spelling mistakes in the name of the consignor or the consignee but the
GSTIN, wherever applicable, is correct;
b) Error in the pin-code but the address of the consignor and the consignee
mentioned is correct, subject to the condition that the error in the PIN code
should not have the effect of increasing the validity period of the e-way bill;
c) Error in the address of the consignee to the extent that the locality and other
details of the consignee are correct;
d) Error in one or two digits of the document number mentioned in the e-way
bill;
e) Error in 4 or 6 digit level of HSN where the first 2 digits of HSN are correct
and the rate of tax mentioned is correct;
f) Error in one or two digits/ characters of the vehicle number.

4. In case of the above situations, penalty to the tune of ₹ 500/ - each under section
125 of the CGST Act and the respective State GST Act should be imposed (₹ 1,000/ -
under the IGST Act) in FORM GST DRC-07 for every consignment. A record of all
such consignments where proceedings under section 129 of the CGST Act have not
been invoked in view of the situations listed in paragraph 5 above shall be sent by
the proper officer to his controlling officer on a weekly basis.

Circular No. 76/ 50/2018-GST

Clarification on certain issues related to GST

Various representations have been received seeking clarification on certain issues

under the GST laws. In order to clarify these issues and to ensure uniformity of
implementation across field formations, the Board, in exercise of its powers
conferred under section 168 (1) of the Central Goods and Services Tax Act, 2017
(hereinafter referred to as the “CGST Act”) hereby clarifies the issues as below:

Sl. No. Issue Clarification

1. Whether the supply of used 1. It may be noted that intra-State
vehicles, seized and confiscated and inter-State supply of used
goods, old and used goods, waste vehicles, seized and
and scrap by Government confiscated goods, old and
departments are taxable under used goods, waste and scrap
GST? made by the Central
Government, State
Government, Union territory or
a local authority is a taxable
supply under GST.
2. Vide notification No. 36/2017-
Central Tax (Rate) and
notification No. 37/2017-
Integrated Tax (Rate) both
dated 13.10.2017, it has been
notified that intra-State and
inter-State supply respectively
of used vehicles, seized and

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 GST Simplified™ Ready Reckoner for Students and Professionals

confiscated goods, old and

used goods, waste and scrap
by the Central Government,
State Government, Union
territory or a local authority to
any registered person, would
be subject to GST on reverse
charge basis as per which tax is
payable by the recipient of
such supplies.
3. A doubt has arisen about
taxability of intra-State and
inter-State supply of used
vehicles, seized and
confiscated goods, old and
used goods, waste and scrap
made by the Central
Government, State
Government, Union territory or
a local authority to an
unregistered person.
4. It was noted that such supply
to an unregistered person is
also a taxable supply under
GST but is not covered under
notification No. 36/2017-
Central Tax (Rate) and
notification No. 37/2017-
Integrated Tax (Rate) both
dated 13.10.2017.
5. In this regard, it is clarified that
the respective Government
departments (i.e. Central
Government, State
Government, Union territory or
a local authority) shall be liable
to get registered and pay GST
on intra-State and inter-State
supply of used vehicles, seized
and confiscated goods, old and
used goods, waste and scrap
made by them to an
unregistered person subject to
the provisions of sections 22
and 24 of the CGST Act.
2. Whether penalty in accordance 1. As per the provisions of section
with section 73 (11) of the CGST Act 73(11) of the CGST Act, penalty
should be levied in cases where the is payable in case self-
return in FORM GSTR-3B has been assessed tax or any amount
filed after the due date of filing such collected as tax has not been
return? paid within a period of thirty
days from the due date of
payment of such tax.
2. It may be noted that a show
cause notice (SCN for short) is
required to be issued to a
person where it appears to the

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proper officer that any tax has

not been paid or short paid or
erroneously refunded or where
input tax credit has been
wrongly availed or utilised for
any reason under the
provisions of section 73(1) of
the CGST Act. The provisions of
section 73(11) of the CGST Act
can be invoked only when the
provisions of section 73 are
invoked.
3. The provisions of section 73 of
the CGST Act are generally not
invoked in case of delayed
filing of the return in FORM
GSTR-3B because tax along
with applicable interest has
already been paid but after the
due date for payment of such
tax. It is accordingly clarified
that penalty under the
provisions of section 73(11) of
the CGST Act is not payable in
such cases. It is further clarified
that since the tax has been paid
late in contravention of the
provisions of the CGST Act, a
general penalty under section
125 of the CGST Act may be
imposed after following the
due process of law.
3. In case a debit note is to be issued 1. It may be noted that as per the
under section 142(2)(a) of the CGST provisions of section 142(2) of
Act or a credit note under section the CGST Act, in case of
142(2)(b) of the CGST Act, what will revision of prices of any goods
be the tax rate applicable – the rate or services or both on or after
in the pre-GST regime or the rate the appointed day (i.e.,
applicable under GST? 01.07.2017), a supplementary
invoice or debit/credit note
may be issued which shall be
deemed to have been issued in
respect of an outward supply
made under the CGST Act.
2. It is accordingly clarified that in
case of revision of prices, after
the appointed date, of any
goods or services supplied
before the appointed day
thereby requiring issuance of
any supplementary invoice,
debit note or credit note, the
rate as per the provisions of
the GST Acts (both CGST and
SGST or IGST) would be
applicable.

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4. Applicability of the provisions of 1. A doubt has arisen about the

section 51 of the CGST Act (TDS) in applicability of long line
the context of notification No. mentioned in clause (a) of
50/2018-Central Tax dated notification No. 50/2018-
13.09.2018. Central Tax dated 13.09.2018.
2. It is clarified that the long line
written in clause (a) in
notification No. 50/2018Central
Tax dated 13.09.2018 is
applicable to both the items (i)
and (ii) of clause (a) of the said
notification. Thus, an authority
or a board or any other body
whether set up by an Act of
Parliament or a State
Legislature or established by
any Government with fifty-one
per cent. or more participation
by way of equity or control, to
carry out any function would
only be liable to deduct tax at
source.
3. In other words, the provisions
of section 51 of the CGST Act
are applicable only to such
authority or a board or any
other body set up by an Act of
parliament or a State
legislature or established by
any Government in which fifty-
one per cent. or more
participation by way of equity
or control is with the
Government.
5. What is the correct valuation 1. Section 15(2) of CGST Act
methodology for ascertainment of specifies that the value of
GST on Tax collected at source supply shall include “any taxes,
(TCS) under the provisions of the duties cesses, fees and charges
Income Tax Act, 1961? levied under any law for the
time being in force other than
this Act, the SGST Act, the
UTGST Act and the GST
(Compensation to States) Act,
if charged separately by the
supplier.”
2. It is clarified that as per the
above provisions, taxable value
for the purposes of GST shall
include the TCS amount
collected under the provisions
of the Income Tax Act since the
value to be paid to the supplier
by the buyer is inclusive of the
said TCS.
6. Who will be considered as the It is hereby clarified that if the
„owner of the goods‟ for the invoice or any other specified
document is accompanying the

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purposes of section 129(1) of the consignment of goods, then either

CGST Act? the consignor or the consignee
should be deemed to be the
owner. If the invoice or any other
specified document is not
accompanying the consignment of
goods, then in such cases, the
proper officer should determine
who should be declared as the
owner of the goods.

(1) Overruling this Act, if any person –

o supplies/ received any goods in contravention of the Act in order to evade tax,
or
o does not account for any goods on which he is liable to pay tax, or
o supplies any goods liable to tax without having applied for registration, or
o contravenes this Act in order to evade tax, or
o uses any conveyance for transporting goods in contravention of the Act
unless the owner of the conveyance proves that it was so used without the
knowledge of
▪ the owner,
▪ his agent, if any, and
▪ the PIC of the conveyance.
then, all such goods/ conveyances shall be liable to confiscation
and the defaulting person shall be liable to penalty u/s 122.

(2) Whenever any goods/ conveyance is confiscated under this Act,

the owner of the goods shall be given an option
to pay a befitting fine in lieu of confiscation.
However, such fine shall not exceed (the MV of the goods confiscated – the tax
chargeable)
Moreover, fine + penalty leviable ≥ penalty leviable u/s 129(1).
Also, where any such conveyance is used for carriage of goods/ passengers for hire,
the owner of the conveyance shall be given an option
to pay a fine equal to the tax payable on the goods being transported in lieu of
confiscation.

(3) In addition to the fine in lieu of confiscation imposed u/ ss (2),

the owner of the goods/ conveyance shall be liable to any tax, penalty and charges
payable.

(4) No order for

o confiscation of goods/ conveyance
o imposition of penalty
shall be issued without giving the person an opportunity of being heard.

(5) Where any goods/ conveyance are confiscated under this Act,
the title of such goods/ conveyance shall vest in the Government.

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 GST Simplified™ Ready Reckoner for Students and Professionals

(6) The PO adjudging confiscation shall hold possession of the things confiscated
and on his request, every police officer shall assist him in holding such possession.

(7) After being satisfied that the confiscated goods/ conveyance are not required in any
other proceedings,
the PO may dispose such goods/ conveyance
after giving reasonable time not exceeding 3 months to pay fine in lieu of confiscation,
and the sale proceeds shall be deposited with the Government.

From the details given below determine the maximum amount of fine in lieu of confiscation
leviable under section 130 of CGST Act, 2017 on:
(i) The goods liable for confiscation
(ii) On the conveyance used for carriage of such goods
Details are as follows
Cost of the goods for owner before GST 15,00,000
Market Value of Goods 20,00,000
GST on such goods 3,60,000
You are also required to explain relevant legal provisions in brief
[CA-Final, May 2018]
(i) ₹ (20,00,000 – 3,60,000) = ₹ 16,40,000
(ii) ₹ 3,60,000

Without adversely affecting the CrPC, 1973,

the confiscation made/ penalty imposed under this Act
shall prevent the infliction of any other punishment
to which the defaulter is liable
under this act or any other law.

(1)
Offences Punishment
(a) Supply goods/ services without issuing any
invoice in order to evade tax
(b) Issue invoice/ bill without supply of goods/
services leading to wrongful utilization of
ITC or refund of tax.
(c) Avail ITC using the invoices referred to in
(b) above
(d) Collect any tax but fail to pay the same to
the Government beyond 3 months of such
payment becoming due
(e) o Evade tax
o Fraudulently avail ITC
o Fraudulently obtain refund In cases where the
in cases not covered under (a) – (d) above o tax evaded
(f) o Falsify/ substitute financial records or o ITC wrongly availed/ utilized
o Produce fake accounts/ documents o refund wrongly taken
o Furnish any false information
with an intention to evade tax

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 GST Simplified™ Ready Reckoner for Students and Professionals

(g) Obstruct or prevent any GST officer in (i) exceeds ₹ 500 lakhs -
discharge of his duties imprisonment for 6 mths. - 5
(h) Possess or in any way concerns himself in yrs. + fine
▪ transporting
▪ removing (ii) is between ₹ 200 lakhs - ₹
▪ depositing 500 lakhs -
▪ keeping imprisonment for 6 mths. - 3
▪ concealing yrs. + fine
▪ supplying
▪ purchasing (iii) is between ₹ 100 lakhs - ₹ 200
▪ dealing in any other way lakhs -
goods which he knows are liable to imprisonment for 6 mths. - 1
confiscation under this Act yr. + fine
(i) Receive or is in any way concerned with
the supply of services which he knows are
in contravention of this Act. In case of (f)/ (g)/ (j) –
(j) Tamper with or destroy any material
evidence (iv) imprisonment for upto 6
(k) o Fail to furnish months
o Furnish false OR
information which he is required to furnish fine
under the Act OR
(l) o Attempt to commit both
o Abet the commission of
any of the offences mentioned in (a) to (k)

When a person evades GST or avails input tax credit exceeding ₹ 500 lakhs he is liable for
the following punishment:
(A) Imprisonment for 5 years and with fine
(B) Imprisonment for 3 years and with fine
(C) Imprisonment for 3 years
(D) Imprisonment for 5 years
[CS-Exec, Dec 2017]

(A) Imprisonment for 5 years and with fine

(2) In case a person convicted under this section

is again convicted of an offence under this section
he shall be punishable with imprisonment for 6 mths. - 5 yrs. + fine

The quantum of punishment ‘‘where any person convicted of an offence under section
132(2) of the CGST Act, 2017 and again convicted of an offence under this section’’ is:
(A) imprisonment for a term which may extend to five years and with fine
(B) imprisonment for a term which may extend to four years and with fine
(C) imprisonment for a term which may extend to three years and with fine
(D) imprisonment for a term which may extend to two years and with fine
[CS-Exec, Dec 2018]

(A) imprisonment for a term which may extend to five years and with fine

(3) The imprisonment referred in (1)(i)/ (ii)/ (iii) and (2)

may be for less than 6 months only for special and adequate reasons
to be recorded in the judgement of the Court.

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 GST Simplified™ Ready Reckoner for Students and Professionals

(4) Overruling CrPC, 1973, all offences under this Act

except the ones referred to in (5)
shall be non-cognizable and bailable.

(5) The following offences shall be cognizable and non-bailable –

Offences Involving
(a) Supply goods/ services without issuing
any invoice in order to evade tax
(b) Issue invoice/ bill without supply of
goods/ services leading to wrongful
utilization of ITC or refund of tax.
Amount exceeding ₹ 500 lakhs
(c) Avail ITC using the invoices referred to
in (b) above
(d) Collect any tax but fail to pay the same
to the Government beyond 3 months
of such payment becoming due

(6) A person shall not be prosecuted under this section

except with the previous sanction of the Commissioner.

NOTE: For the purpose of this Section, “tax” includes CGST/ SGST/ UTGST/ IGST and
Compensation Cess.

What are cognizable and non-cognizable offences under Section 132 of CGST Act, 2017?
[CA-Final, May 2018]

Examine the implications as regards the bailability and quantum of punishment on

prosecution, in respect of the following cases pertaining to the period December, 2017
under CGST Act, 2017:
(i) ‘X’ collects ₹ 245 lakhs as tax from its clients and deposits ₹ 241 lakhs with the
Central Government. It is found that he has falsified financial records and has not
maintained proper records.
(ii) ‘Y’ collects ₹ 550 lakhs as tax from its clients but deposits only ₹ 30 lakhs with the
Central Government.
What will be the implications with regard to punishment on prosecution of ‘X’ and ‘Y’ for
the offences? What would be the position, if ‘X’ and ‘Y’ repeat the offences?
It may be assumed that offences are proved in the court.
[CA-Final, May 2018]

(1) The Commissioner may authorize any CGST officer to arrest a person
where he has reasons to believe that the person has committed any offence
specified u/s 132(1)(a)/ (b)/ (c)/ (d)
punishable under (i)/ (ii) of sub-section (1), or sub-section (2) of the said section.

(2) Where a person is arrested u/ ss (1)

for an offence specified u/s 132(5),
the officer authorized to arrest him
shall inform him of the grounds of arrest
and produce him before a Magistrate within 24 hrs.

(3) Subject to CrPC, 1973 –

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(a) Where a person is arrested u/ ss (1) for any offence u/s 132(4),
he shall be admitted to bail
or in default of bail, forwarded to the custody of the Magistrate.
(b) In the case of a non-cognizable and bailable offence,
the AC/ DC shall have the same powers and subject to same provisions
as an officer in charge of a police station,
for the purpose of releasing an arrested person on bail,

Explain the safeguards provided under Section 69 of CGST Act, 2017, to a person who is
placed under arrest.
[CA-Final, May 2018]

(1) Where
(a) any person
▪ engaged in collection of statistics u/s 151 or
▪ compilation/ computerization of such statistics
or
(b) any officer of CGST
▪ having access to information specified u/s 150(1)
or
(c) any person engaged with the provision of service on the common portal
or
(d) the agent of common portal
wilfully discloses any information or contents of any return furnished
otherwise than
(e) in execution of his duties under the said sections or
(f) for the purposes of prosecution for an offence under any law
he shall be punishable with
o imprisonment for upto 6 months, or
o fine of upto ₹ 25,000, or
o both

(2) Any person –

(a) who is a Government servant
shall not be prosecuted for any offence under this section
except with the prior sanction of the Government.
(b) who is not a Government servant
shall not be prosecuted for any offence under this section
except with the prior sanction of the Commissioner.

No court shall take cognizance of any offence punishable under this Act
except with the prior sanction of the Commissioner,
and no court inferior to that of a Magistrate of First Class,
shall try any such offence.

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In any prosecution for an offence under this Act

which requires a culpable mental state on the part of the accused,
the court shall presume the existence of such mental state
but it shall be a defence for the accused to prove otherwise.

NOTE: Culpable mental state includes intention, motive, knowledge of a fact, and belief in, or
reason to believe, a fact.

A statement made and signed by a person on appearance

in response to any summons issued u/s 70
during any proceeding
shall be relevant in any prosecution for an offence under this Act,
for proving the truth of the facts which it contains
in the following cases –
(a) when the person who made the statement
o is dead or
o cannot be found or
o is incapable of giving evidence or
o is kept out of the way by the adverse party or
o whose presence cannot be obtained without unreasonable delay or expense
or
(b) when the person who made the statement is examined as a witness in the case before
the court
and the court opines to admit the statement as evidence.

(1) Where an offence under this Act is committed by a Company,

every person who was in charge of the conduct of business of the company
at the time the offence was committed,
as well as the company itself,
shall be deemed to be guilty of the offence and
shall be liable to be proceeded against and punished.

(2) Overruling sub-section (1),

where an offence under this Act is committed by a Company
and it is proved that the offence has been committed
with the consent of or is attributable to any negligence on the part of
any director/ manager/ secretary/ other officer
then such officer shall also be deemed to be guilty of that offence
and shall be liable to be proceeded against and punished.

(3) Where an offence under this Act is committed by

a partnership firm/ LLP/ HUF/ trust,
the partner/ karta/ managing trustee
shall be deemed to be guilty of the offence

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and shall be liable to be proceeded against and punished.

Sub-section (2) shall apply to such persons, mutatis mutandis.

(4) This section shall not render any such person liable to any punishment
if he proves that the offence was committed without his knowledge or
that he had exercised all due diligence to prevent such offence.

Where an offence under the GST law is committed by a taxable person being a trust, who
are deemed to be guilty of the offence and under what circumstances? When do the
relevant provisions become inapplicable in respect of individuals concerned with the trust?
[CA-Final, Nov 2018]

(1) Any offence under this Act may be compounded by the Commissioner
either before or after the institution of prosecution,
on payment of the prescribed compounding amount
by the person accused of the offence to the CG/ SG.
However, this section shall not apply to –
(f) a person who has been allowed to compound once
in respect of any offence specified in section 132(1)(a) to (f)
and the offences specified in clause (l) of the said sub-section
which are relatable to the ones specified in (a) to (f).
(g) a person who has been allowed to compound once
in respect of any offence other than the ones specified in (a) above
in respect of supplies of value exceeding ₹ 1 crore.
(h) a person who has been accused of committing an offence under this Act
which is also an offence under any other law.
(i) a person who has been convicted for an offence under this Act by a court
(j) a person who has been accused of committing an offence specified in section
132(1)(g)/ (j)/ (k), and
(k) any other prescribed class of persons/ offences.
Moreover, any compounding allowed under this section
shall not affect the proceedings instituted under any other law.
Also, compounding shall be allowed only after making payment of tax, interest and
penalty involved in such offences.

(2) The compounding amount prescribed for the offences shall be

o at least
▪ Higher of
➢ ₹ 10,000 or
➢ 50% of tax involved
and
o at most
▪ Higher of
➢ ₹ 30,000 or
➢ 150% of tax involved

(3) On payment of the compounding amount determined by the Commissioner,

no further proceedings shall be initiated under this Act
against the accused in respect of the same offence

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and any criminal proceedings shall stand abated

if already initiated for the said offence.

(1) An applicant may make an application u/s 138(1)

in FORM GST CPD-01 to the Commissioner for compounding of an offence
either before or after the institution of prosecution.

(2) On receipt of the application, the Commissioner shall call for a report from the
concerned officer w.r.t. the particulars furnished in the said application
or any other information relevant for the examination of the application.

(3) By an order in FORM GST CPD-02,

the Commissioner may allow the application indicating the compounding amount
and grant the applicant immunity,
if he is satisfied that the applicant has
o co-operated in the proceedings before him and
o made full and true disclosure of facts of the case
OR
he may reject the application
within 90 days.

(4) The application shall not be decided as per (3) above

without giving the applicant an opportunity of being heard
and recording the grounds of such rejection.

(5) The application shall not be allowed unless

the applicable tax, interest and penalty have been paid.

(6) The applicant shall pay the compounding amount ordered within 30 days of receipt
of FORM GST CPD-02.

(7) In case the applicant fails to pay the compounding amount within the specified time,
the order in FORM GST CPD-02 shall be vitiated and be void.

(8) The immunity granted to a person under (3) above

may be withdrawn by the Commissioner at any time
if he is satisfied that such person had concealed any material particulars
or had given false evidence
during the compounding proceedings.
Thereupon, such person may be tried for the offence that appears to have been
committed by him
and the Act shall apply as if no such immunity had been granted.

Department initiated prosecution proceedings against a taxable person who had evaded
GST of ₹ 4.2 crores. He has approached the Commissioner with a request for compounding
the offence. After considering the request, the Commissioner has directed him to pay an
amount of ₹ 2.5 crores as compounding amount. Indicate the minimum and maximum
limits for compounding amount. Is the amount fixed by the Commissioner in this case
within the limits prescribed under the law? What is the consequence of the decision of the
commissioner allowing the request for compounding the offence?
[CA-Final, Nov 2018]

Minimum limit = ₹ 2.1 crores and Maximum limit = ₹ 6.3 crores.

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Yes.

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UTGSTA, 2017
• Section 1: Extent
• Section 10: Transfer of input tax credit
• Section 15: Constitution of Authority for Advance Ruling
• Section 16: Constitution of Appellate Authority for Advance Ruling

(2) This Act extends to the UTs of

o The Andaman and Nicobar Islands,
o Lakshadweep
o Dadra and Nagar Haveli
o Daman and Diu
o Chandigarh
and other territory.

Notfn. No.: 17/2017 – UTT

Subject to provisions of this Act, the notifications issued under CGSTA, 2017 are
automatically extended to this Act.

Which of the following although called the Union territory is not being covered under
Union Territory Goods and Service Tax Act, (UTGST), 2017?
(A) Andaman and Nicobar Island
(B) Puducherry
(C) Daman and Diu
(D) None of the above
[CS-Exec, Dec 2018]

(D) None of the above

On utilization of ITC of UTGST for payment of IGST,

the amount collected as UTGST shall stand reduced by that amount
and the CG shall transfer the same
to the IGST account in the prescribed manner and within prescribed time.

(1) The CG shall constitute an Authority to be known as

the (name of the UT)AAR.
The CG may notify any State AAR or any other UTAAR
to act as the Authority for the purposes of this Act.
(2) The AAR shall consist of –

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(i) 1 member from amongst the officers of CGST, and

(ii) 1 member from amongst the officers of UTGST
to be appointed by the CG.

(1) The CG shall constitute an Appellate Authority to be known as

the (name of the UT)AAAR for GST
for hearing appeals against AAR
The CG may notify any State AA or any other UTAA
to act as the Appellate Authority for the purposes of this Act.
(2) The AAAR shall consist of –
(i) The Chief Commissioner of CGST, and
(ii) The Commissioner of UTGST having jurisdiction over the applicant

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An Act to provide for compensation to the States for the lo ss of revenue arising on
account of implementation of the GST in pursuance of the provisions of the
Constitution (101 s t Amendment) Act, 2016.

GST(CS)A, 2017
• Section 3: Projected growth rate
• Section 4: Base year
• Section 5: Base year revenue
• Section 6: Projected revenue for any year
• Section 7: Calculation and release of compensation
• Section 8: Levy and collection of cess
• Section 9: Returns, payments and refunds
• Section 10: Crediting proceeds of cess to Fund

Projected nominal growth rate (PGR) of revenue subsumed for a State during the transition
period = 14% p.a.

For calculating the compensation amount payable in any FY during the transition period, the
base year = FY 2015-16

The base Financial Year for the purpose of calculating compensation amount payable to the
State as per Goods and Service Tax (Compensation to States) Act, 2017 shall be taken:
(A) 2014-15
(B) 2016-17
(C) 2012-13
(D) 2015-16
[CS-Exec, Jun 2018]

(D) 2015-16

State the ‘‘Base Year’’ and ‘‘Projected Growth Rate’’ for the purpose of calculating the
compensation amount payable by the Centre on account of revenue loss to the States as
specified under the Goods and Services Tax (Compensation to States) Act, 2017:
(A) Financial Year 2014-15, @ 14%
(B) Financial Year 2015-16, @ 14%
(C) Financial Year 2016-17, @ 14%
(D) Financial Year 2017-18, @ 14%

[CS-Exec, Dec 2018]

(B) Financial Year 2015-16, @ 14%

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(1) Subject to sub-sections (2)-(6),

Particulars (₹) (₹)

Sum of revenue collected by (the state + local bodies)
through:
(a) VAT, Sales Tax, Purchase Tax, Tax collected on xxx
Works Contract etc. levied by the State under former
Entry 54 of the State List
(b) CST levied under the CST Act, 1956 xxx
(c) Entry Tax, Octroi, Local body tax etc. levied by the xxx
State under former Entry 52 of the State List
(d) Luxury tax, including taxes on entertainment, xxx
amusements, betting and gambling etc. levied by the
State under former Entry 62 of the State List
(e) Advertisement tax etc. levied by the State under
former Entry 55 of the State List xxx
(f) Duties of excise (Medicinal and toilet preparations) xxx
levied by the Union under former Article 268 of the
Constitution
(g) Any cess/ surcharge/ fee on the above State taxes xxx
leviable under Entry 66 of the State List

Except the following taxes

(a) Any taxes levied under any Act enacted under the (xxx)
former Entry 54 of the State List before 08 Sep, 2016
on the sale/ purchase of “PANCH” and alcoholic
liquor (xxx)
(b) Tax levied under the CST Act, 1956 on the sale/
purchase of “PANCH” and alcoholic liquor (xxx)
(c) Any cess imposed by the SG on the sale/ purchase of
“PANCH” and alcoholic liquor (xxx)
(d) The entertainment tax levied by the State but
collected by local bodies under any Act enacted
under the former Entry 62 of the State List before 08 xxx
Sep, 2016

Less: Refunds (xxx)

Base year revenue for the state xxx

(2) In case of J&K, the base year revenue shall include

the tax collected on sale of services by the SG during 2015-16

(3) In case of the special category states (Special 11),

the revenue foregone on account of exemptions or remission given by the SGs
to promote industrial investment in the State
in respect of taxes referred to in sub-section (1)
shall be included in the base year revenue of the State
subject to prescribed conditions.

(4) The Acts of the CG and SGs under which

the specific taxes are being subsumed into the GST
shall be the ones notified.

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(5) The base year revenue shall be calculated as per the aforementioned sub-sections on
the basis of
the figures of revenue and refunds of that year
as audited by the CAG

(6) In case of any state, if any part of the aforementioned revenues

are not credited in the Consolidated Fund of the State
it shall be included in the base year revenue
subject to prescribed conditions.

Projected Revenue for 𝑛𝑡ℎ year shall be calculated as follows:

Projected Revenue = Base year revenue × (1 + 𝑃𝐺𝑅)𝑛

If the base year revenue for 2015-16 for a concerned State, calculated as per section 5 is ₹ 100, then
the projected revenue for FY 2018-19 shall be as follows—
Projected Revenue for 2018-19 = ₹ 100 × (1 + 14%)3 = ₹ 148.15

(1) The compensation under this Act shall be payable to any State
during the transition period

(2) The compensation payable to a State

shall be provisionally calculated and released
at the end of every 2 months
and shall be finally calculated for every FY
after receipt of the audited final revenue figures.
• Any excess payment shall be adjusted in the succeeding FY.

(3) The total compensation payable for any FY to a state shall be calculated as follows:
Particulars Amount (₹)
Projected Revenue for a FY during the transition period calculated as xxx
per Section 6
Less: Actual Revenue collected by the state in that FY on account of – (xxx)
o SGST collected (net of refunds) and
o IGST apportioned to that state
as certified by the CAG of India
Total compensation payable in that FY xxx

(4) The loss of revenue at the end of every 2 months in any year for a state shall be
calculated as follows:
Particulars Amount (₹)
Projected Revenue till the end of the relevant 2 months period of the xxx
respective FY shall be calculated on pro-rata basis,
as a percentage of the total projected revenue calculated as per
Section 6
If the projected revenue calculated for any year as per Section 6 is
₹ 120, then the projected revenue that could be earned till the end
of 4 months shall be ₹ 120 × (4/ 12) = ₹ 40

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Less: Actual Revenue collected by the state till the end of the relevant (xxx)
2 months period in that FY on account of –
o SGST collected (net of refunds) and
o IGST apportioned to that state
Less: Provisional compensation already paid for earlier periods of that (xxx)
FY
Provisional compensation payable for the relevant 2 months period xxx

(5) Any difference between

o the compensation payable as per (3), upon receipt of the audited revenue
figures from CAG and
o the total provisional compensation released as per (4) in the relevant FY
shall be adjusted against release of compensation in the subsequent FY.

(6) In case no compensation is due to be released in a particular FY

and any excess amount has been released in the previous FY,
then such excess shall be refunded by the State to the CG
and such amount shall be credited to the Compensation Fund in prescribed manner.

Answer the following with reference to GST (compensation to states) Act, 2017:
(i) Projected Growth Rate
(ii) Base year
(iii) Projected Revenue for any year
(iv) Calculation and release of compensation
(v) Objective of GST (compensation to states) Act, 2017
[CS-Prof, Jun 2018]

(i) Section 3
(ii) Section 4
(iii) Section 6
(iv) Section 7
(v) Sub-title of the Chapter

(1) A cess shall be levied and collected on both inter-state as well as intra-state supplies,
except on supplies made under composition scheme,
for providing compensation to the States
for loss of revenue due to GST
w.e.f. the date of implementation of CGSTA, 2017
for a period of 5 years.

(2) The cess shall be levied as per Sch. II to the Act.

• Where the cess is to be charged based on the value,
the value shall be determined as per Sec. 15 of the CGSTA
• Also, the cess on goods imported
shall be levied and collected as per Sec. 3 of the CTA, 1975
on the value determined under the same Act
at the point when the custom duty shall be levied.

Particulars Max. rate at which GST Compensation Cess

may be collected
Pan Masala 135% ad valorem

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Tobacco and Tobacco products ₹ 4,170 per 1,000 sticks

OR
290% ad valorem
OR
a combination of the two but not exceeding
(₹ 4,170 + 290% ad valorem)
Coal and other similar solid fuels except jet ₹ 400 per tonne
and peat
Aerated waters 15% ad valorem
Motor cars and other such motor vehicles 15% ad valorem
except vehicles for transport of 10+ persons
including the driver
Any other supplies 15% ad valorem

NOTE: These rates are the maximum allowed limits in law. The actual applicable rates have
been notified vide Notfn. No.: 1/2017 – CC(R) and 2/2017 – CC(R)

(1) Every taxable person making a taxable supply shall –

(a) Pay the amount of cess payable in the prescribed manner
(b) Furnish the prescribed returns along with returns to be filed under the CGSTA
(c) Apply for refunds of such cess paid in the prescribed manner.

(2) The provisions of levy and collection of tax as per CGSTA

shall apply to this Act as well, mutatis mutandis
for the purpose of furnishing returns and claiming refunds.

(1) The proceeds of cess leviable u/s 8

and other amounts recommended by the Council
shall be credited to a non-lapsable GSTCF
which shall form part of public account of India
and shall be utilized for purposes specified in Section 8

(2) All amounts payable u/s 7 shall be paid out of the Fund.

(3) At the end of the transition period,

the balance amount remaining unutilized in the Fund shall be distributed as follows –
a) 50% - Consolidated Fund of India, as the share of the Centre
b) 50% - To be distributed amongst States and UTs in the ratio of their total
revenues from SGST or UTGST in the last year of transition period.

(3A) Overruling (3) above,

50% of the amount that is recommended by The Council
which remains unutilized in the Fund
shall be transferred to the Consolidated Fund of India as the share of CG
at any point of time in any FY during the transition period,
and the balance 50% shall be distributed amongst the States
in the ratio of their base year revenue determined u/s 5.

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However, in case of shortfall of the amount collected in the Fund against the
requirement of compensation to be released u/s 7 for any 2 months,
50% of the same, upto a limit of the total amount transferred to the CG and SGs
as recommended by the Council,
shall be recovered from the CG
and the balance 50% from the States
in the ratio of their base year revenue determined u/s 5.

(4) The accounts of the Fund shall be audited by CAG or order at such intervals as he may
specify, and the expenses of audit shall be payable by the CG to the CAG.

Notfn. No.: 4/2017 – CC(R)

The CG hereby exempts intra-state supplies of second hand goods, supplied by an
unregistered person to a registered person, dealing in buying and selling of second hand
goods and who pays GST compensation cess on the value of outward supply determined
as per rule 32(5) of the CGSTR, 2017, from the whole GST compensation cess leviable
thereon.

The proceeds of the cess and such other amounts as being recommended by the GST Council
shall be credited to a non-lapsable fund known as:
(A) Goods and Service Tax Compensation Fund
(B) Goods and Service Tax Cess Fund
(C) Goods and Service Tax Welfare Fund
(D) None of the above
[CS-Exec, Jun 2018]

(A) Goods and Service Tax Compensation Fund

What do you mean by the term ‘GST Compensation Cess’? Can Input tax credit be availed
on GST Compensation Cess paid on inward supplies? List out some of the Notified Goods on
which GST Compensation Cess is applicable.
[CMA-Inter, Jun 2018]

Circular No. 1/ 1/2017-Compensation Cess

Clarification regarding applicability of section 16 of the IGST Act, 2017, relating to zero-rated
supply for the purpose of Compensation Cess on exports

8. Provisions of section 16 of the IGST Act, 2017, relating to zero-rated supply will apply
mutatis mutandis for the purpose of Compensation Cess (wherever applicable), that
is to say that:
a) Exporter will be eligible for refund of Compensation Cess paid on goods
exported by him [on similar lines as refund of IGST under section 16(3) (b) of
the IGST, 2017]; or
b) No Compensation Cess will be charged on goods exported by an exporter
under bond and he will be eligible for refund of input tax credit of
Compensation Cess relating to goods exported [on similar lines as refund of
input taxes under section 16(3) (a) of the IGST, 2017]

• State [Sec. 2(m)]: means –

(i) for sections 3 – 7 = the states as defined under the CGSTA, 2017
(ii) for sections 8 onwards = the states as defined under the CGSTA, 2017 and the
UTs defined under the UTGSTA, 2017.
• Transition date [Sec. 2(q)]: shall mean, in respect of any state, the date on which the
SGSTA of the concerned state comes into force.

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• Transition period [Sec. 2(r)]: means a period of 5 years from the transition date

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