E-Book on IGST and UTGST Laws Written By Anand Singh IRS Retd. Additional Commissioner (Customs) New Delhi, India

Transcription

1 E-Book on IGST and UTGST Laws Written By Anand Singh IRS Retd. Additional Commissioner (Customs) New Delhi, India All Rights Reserved. Copyright 2017 by the Authors

2 ABOUT THE AUTHOR The author Shri Anand Singh is an ex IRS officer who did his BE (HONS) from BITS Pilani and M Tech from IIT Delhi. He also did his law graduation and has authored a large number of books on taxation in various fields of taxation such as Central Excise, Customs, Service Tax, Export and Import laws, FEMA, PMLA, Competition Commission, Anti Dumping, Safeguard Duties, SEZ policy, EOU policy Etc. The tax books written by the author is in a very easy to use style with all relevant reading materials on a particular topic being described in a single place so that an ordinary reader does not have to refer in different places to understand a particular topic. For each topic of tax discussed in a book all the relevant provisions of the Act, Rules, notifications, circulars and directions have been placed under that topic so that a reader does not have to refer in different places. The author s experience in government in implementation of the taxation laws has also come in handy in making the taxation books written by the author more practical in approach. Some of the taxation books written by the author that can be very useful to the reader and can serve as a useful guide are mentioned below: GST Book Series Goods and Services Tax User Manual Input Tax Credit, Accounts & Records, Returns, Assessment and Audit of Records under GST Laws Appeals, Revision and Advance Ruling under GST Laws Levy & Collection of Tax and Valuation under GST Laws Offences & Penalties, Search, Seizure, Arrest, Demand and Recovery under GST Laws IGST and UTGST Laws Other Books Antidumping Duty Laws in India Advance Ruling Laws in India Competition Laws in India Countervailing Duty and Subsidy Laws in India Anti-money Laundering Laws in India Safeguard Duty Laws in India Indian Law on Special Economic Zones (SEZ)

3 Table of Contents IGST (Integrated Goods and Service Tax) Chapter 1 - Preliminary 1.1 Short Title, Extent and Commencement 1.2 Definitions Chapter 2 - Administration of GST 2.1 Appointment of Officers 2.2 Authorisation of Officers of State Tax or Union Territory Tax as Proper Officer in Certain Circumstances Chapter 3 - Levy and Collection of Tax 3.1 Levy and Collection of Integrated Goods and Services Tax 3.2 Power to Grant Exemption from Tax Chapter 4 - Determination of Nature of Supply 4.1 Inter-State Supply 4.2 Intra-State Supply 4.3 Supplies in Territorial Waters 4.4 Rules Framed for Determination of Value of Supply under GST Chapter 5 - Place of Supply of Goods or Services or Both 5.1 Place of Supply of Goods Other than Supply of Goods Imported into, or Exported from India 5.2 Place of Supply of Goods Imported into, or Exported from India 5.3 Place of Supply of Services Where Location of Supplier and Recipient is in India 5.4 Place of Supply of Services Where Location of Supplier or Location of Recipient is Outside India 5.5 General FAQs on Place of Supply of Goods and Service 5.6 Special Provision for Payment of Tax by a Supplier of Online Information and Database Access or Retrieval Services Chapter 6 - Refund of Integrated Tax to International Tourist 6.1 Refund of Integrated Tax Paid on Supply of Goods to Tourist Leaving India Chapter 7 Zero Rated Supply 7.1 Zero Rated Supply Chapter 8 - Apportionment of Tax and Settlement of Funds 8.1 Apportionment of Tax and Settlement of Funds 8.2 Transfer of Input Tax Credit 8.3 Tax Wrongfully Collected and Paid to Central Government or State Government Chapter 9 Miscellaneous 9.1 Application of provisions of Central Goods and Services Tax Act 9.2 Import of Services Made on or After the Appointed Day 9.3 Power to Make Rules 9.4 Power to Make Regulations 9.5 Laying of Rules, Regulations and Notifications 9.6 Removal of Difficulties 9.7 General FAQ on Overview of the IGST Act UTGST (Union Territories Goods and Services Tax) Chapter 1 Preliminary 1.1 Short Title, Extent and Commencement 1.2 Definitions Chapter 2 - Administration 2.1 Officers under This Act 2.2 Authorisation of Officers 2.3 Powers of Officers

4 2.4 Authorisation of Officers of Central Tax as Proper Officer in Certain Circumstances Chapter 3 Levy and Collection of Tax 3.1 Levy and Collection 3.2 Power to Grant Exemption from Tax Chapter 4 Payment of Tax 4.1 Payment of Tax 4.2 Transfer of Input Tax Credit Chapter 5 - Inspection, Search, Seizure and Arrest 5.1 Officers Required to Assist Proper Officers Chapter 6 Demands and Recovery 6.1 Tax Wrongfully Collected and Paid to Central Government or Union territory Government 6.2 Recovery of Tax Chapter 7 Advance Ruling 7.1 Definitions 7.2 Constitution of Authority for Advance Ruling 7.3 Constitution of Appellate Authority for Advance Ruling Chapter 8 Transitional Provisions 8.1 Migration of Existing Tax Payers 8.2 Transitional Arrangements for Input Tax Credit 8.3 Transitional Provisions Relating to Job Work 8.4 Miscellaneous Transitional Provisions Chapter 9 - Miscellaneous 9.1 Application of Provisions of Central Goods and Services Tax Act 9.2 General Power to Make Regulations 9.3 Laying of Rules, Regulations and Notifications 9.4 Power to Issue Instructions or Directions 9.5 Removal of Difficulties The Goods and Services Tax (Compensation to States) Act, 2017 Chapter 1 - The Goods and Services Tax (Compensation to States) Act, Short Title, Extent and Commencement 1.2 Definitions 1.3 Projected Growth Rate 1.4 Base Year 1.5 Base Year Revenue 1.6 Projected Revenue for Any Year 1.7 Calculation and Release of Compensation 1.8 Levy and Collection of Cess 1.9 Returns, Payments and Refunds 1.10 Crediting Proceeds of Cess to Fund 1.11 Other Provisions Relating to Cess 1.12 Power to Make Rules 1.13 Laying of Rules Before Parliament 1.14 Power to Remove Difficulties THE SCHEDULE

5 Integrated Goods and Service Tax

6 CHAPTER 1 - PRELIMINARY Chapter Short Title, Extent and Commencement Section 1 - Short title, extent and commencement Relevant Statutory Provision (1) This Act may be called the Integrated Goods and Services Tax Act, (2) It shall extend to the whole of India except the State of Jammu and Kashmir. (3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint: Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision. Back to Index

7 Chapter Definitions Section 2 - Definitions Relevant Statutory Provision 2. In this Act, unless the context otherwise requires, (1) Central Goods and Services Tax Act means the Central Goods and Services Tax Act, 2017; (2) central tax means the tax levied and collected under the Central Goods and Services Tax Act; (3) continuous journey 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; (4) customs frontiers of India means the limits of a customs area as defined in section 2 of the Customs Act, 1962; (5) export of goods with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India; (6) export of services means the supply of any service when, (i) (ii) (iii) (iv) (v) the supplier of service is located in India; the recipient of service is located outside India; the place of supply of service is outside India; the payment for such service has been received by the supplier of service in convertible foreign exchange; and 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; (7) fixed establishment 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; (8) Goods and Services Tax (Compensation to States) Act means the Goods and Services Tax (Compensation to States) Act, 2017; (9) Government means the Central Government; (10) import of goods with its grammatical variations and cognate expressions, means bringing goods into India from a place outside India; (11) import of services means the supply of any service, where (i) (ii) (iii) the supplier of service is located outside India; the recipient of service is located in India; and the place of supply of service is in India; (12) integrated tax means the integrated goods and services tax levied under this Act; (13) 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; (14) location of the recipient of services means,

8 (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; (15) location of the supplier of services 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; (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 provision of the supply; and (d) in absence of such places, the location of the usual place of residence of the supplier; (16) non-taxable online recipient 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 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) (ii) set up by an Act of Parliament or a State Legislature; or 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 municipality under article 243W of the Constitution; (17) online information and database access or retrieval services 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, (i) advertising on the internet; (ii) providing cloud services; (iii) provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet; (iv) providing data or information, retrievable or otherwise, to any person in electronic form through a computer network; (v) online supplies of digital content (movies, television shows, music and the like); (vi) digital data storage; and (vii) online gaming; (18) output tax, in relation to a taxable person, means the integrated 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; (19) Special Economic Zone shall have the same meaning as assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005; (20) Special Economic Zone developer 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)

9 and a Co-Developer as defined in clause (f) of section 2 of the said Act; (21) supply shall have the same meaning as assigned to it in section 7 of the Central Goods and Services Tax Act; (22) taxable territory means the territory to which the provisions of this Act apply; (23) zero-rated supply shall have the meaning assigned to it in section 16; (24) words and expressions used and not defined in this Act but defined in the Central Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act shall have the same meaning as assigned to them in those Acts; (25) any reference in this Act to a law which is not in force in the State of Jammu and Kashmir, shall, in relation to that State be construed as a reference to the corresponding law, if any, in force in that State. Back to Index

10 CHAPTER 2 ADMINISTRATION OF IGST Chapter Appointment of Officers Section 3 - Appointment of officers Relevant Statutory Provision The Board may appoint such central tax officers as it thinks fit for exercising the powers under this Act. Back to Index

11 Chapter Authorisation of Officers of State Tax or Union Territory Tax as Proper Officer in Certain Circumstances Relevant Statutory Provision Section 4 - Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances Without prejudice to the provisions of this Act, the officers appointed under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are authorised to be the proper officers for the purposes of this Act, subject to such exceptions and conditions as the Government shall, on the recommendations of the Council, by notification, specify. Back to Index

12 CHAPTER 3 - LEVY AND COLLECTION OF TAX Chapter Levy and Collection Section 5 - Levy and Collection Relevant Statutory Provision (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the integrated goods and services tax on all inter-state supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 of the Central Goods and Services Tax Act and at such rates, not exceeding forty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person: Provided that the integrated tax on goods imported into India shall be levied and collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 on the value as determined under the said Act at the point when duties of customs are levied on the said goods under section 12 of the Customs Act, (2) The integrated tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council. (3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. (4) The integrated tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. (5) The Government may, on the recommendations of the Council, by notification, specify categories of services, the tax on inter-state supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services: Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax: Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax. Related Provisions Section 8 of IGST - Meaning of intra-state supply Section 9 - Levy and collection of CGST (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the central goods and services tax on all intra-state supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not

13 exceeding twenty per cent., as may be notified by the Government on the recommendations of the Council and collected in such manner as may be prescribed and shall be paid by the taxable person. (2) The central tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council. (3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. (4) The central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. (5) The Government may, on the recommendations of the Council, by notification, specify categories of services the tax on intra-state supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services: Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax: Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax. Section 7 of IGST read with Schedule I and Schedule II - Definition of supply Section 18 of IGST - Transfer of input tax credit Section 49 - Payment of tax of CGST (1) Every deposit made towards tax, interest, penalty, fee or any other amount by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed. (2) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with section 41, to be maintained in such manner as may be prescribed. (3) The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made thereunder in such manner and subject to such conditions and within such time as may be prescribed. (4) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the Integrated Goods and Services Tax Act in such manner and subject to such conditions and within such time as may be prescribed. (5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of (a) integrated tax shall first be utilised towards payment of integrated tax and the amount remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order;

14 (b) the central tax shall first be utilised towards payment of central tax and the amount remaining, if any, may be utilised towards the payment of integrated tax; (c) the State tax shall first be utilised towards payment of State tax and the amount remaining, if any, may be utilised towards payment of integrated tax; (d) the Union territory tax shall first be utilised towards payment of Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax; (e) the central tax shall not be utilised towards payment of State tax or Union territory tax; and (f) the State tax or Union territory tax shall not be utilised towards payment of central tax. (6) The balance in the electronic cash ledger or electronic credit ledger after payment of tax, interest, penalty, fee or any other amount payable under this Act or the rules made thereunder may be refunded in accordance with the provisions of section 54. (7) All liabilities of a taxable person under this Act shall be recorded and maintained in an electronic liability register in such manner as may be prescribed. (8) Every taxable person shall discharge his tax and other dues under this Act or the rules made thereunder in the following order, namely: (a) (b) (c) self-assessed tax, and other dues related to returns of previous tax periods; self-assessed tax, and other dues related to the return of the current tax period; any other amount payable under this Act or the rules made thereunder including the demand determined under section 73 or section 74. (9) Every person who has paid the tax on goods or services or both under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such tax to the recipient of such goods or services or both. Explanation. For the purposes of this section, (a) (b) the date of credit to the account of the Government in the authorised bank shall be deemed to be the date of deposit in the electronic cash ledger; the expression, i. tax dues means the tax payable under this Act and does not include interest, fee and penalty; and ii. other dues means interest, penalty, fee or any other amount payable under this Act or the rules made thereunder Back to Index

15 Chapter Power to Grant Exemption from Tax Section 6 - Power to grant exemption from tax Relevant Statutory Provision (1) Where the Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by notification, exempt generally, either absolutely or subject to such conditions as may be specified therein, goods or services or both of any specified description from the whole or any part of the tax leviable thereon with effect from such date as may be specified in such notification. (2) Where the Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by special order in each case, under circumstances of an exceptional nature to be stated in such order, exempt from payment of tax any goods or services or both on which tax is leviable. (3) The Government may, if it considers necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under subsection (2), insert an Explanation in such notification or order, as the case may be, by notification at any time within one year of issue of the notification under sub-section (1) or order under sub-section (2), and every such Explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be. Explanation. For the purposes of this section, where an exemption in respect of any goods or services or both from the whole or part of the tax leviable thereon has been granted absolutely, the registered person supplying such goods or services or both shall not collect the tax, in excess of the effective rate, on such supply of goods or services or both. Back to Index