SUPPLY, LEVY AND COLLECTION

Transcription

1 3 CHAPTER SUPPLY, LEVY AND COLLECTION 3.1 relevant definition meaning of GSt It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer Business [Sec. 2(17)] It 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; (h) services provided by a race club by way of totalisator or a licence to book maker in such club ; and 31

2 Para 3.2 Supply, levy and collection 32 (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; Meaning of goods [Sec. 2(52)] As per section 2(52) goods 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 Meaning of services [Sec. 2(102)] As per section 2(102) services 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. Example: A foreign exchange dealer while exchanging one currency for another also charges a commission (often inbuilt in the difference between the purchase price and selling price currency).the related activity of providing the services for which a commission is charged separately would be very much a supply Job work [Sec. 2(68)] 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 Works contract [Sec. 2(119)] 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 Electronic Commerce Operator [Sec. 2(45)] Means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. 3.2 Levy and collection [Sec. 9] General [Sec. 9(1)] Subject to the provisions of sub-section (2), u there shall be levied a tax called the CGST u on all intra-state supplies u of goods or services or both,

3 33 Levy and collection Para 3.2 Tax on petroleum etc. [Sec. 9(2)] Reverse charge on notified services [Sec. 9(3)] (See below for notified services) u except on the supply of alcoholic liquor for human consumption, u on the value determined under section 15 and u at such rates, not exceeding twenty per cent., u 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. Note: Supply of alcoholic liquor for human consumption is specifically excluded and subject to State levy. 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. As per section 2(107) taxable person means a person who is registered or liable to be registered under section 22 or section 24. 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. Meaning of reverse charge It means the liability to pay tax is on the recipient of supply of goods and services instead of the supplier of such goods or services in respect of notified categories of supply Notification No. 5/2017-Central Tax, dated (effective from ) In exercise of the powers conferred by sub-section (2) of section 23 of the Central Goods and Services Tax Act, 2017 (12 of 2017), the Central Government hereby specifies the persons who are only engaged in making supplies of taxable goods or services or both, the total tax on which is liable to be paid on reverse charge basis by the recipient of such goods or services or both under sub-section (3) of section 9 of the said Act as the category of persons exempted from obtaining registration under the aforesaid Act.

4 Para 3.2 Supply, levy and collection 34 Reverse charge on supply received from unregistered person [Sec. 9(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. Notification No. 8/2017-Central Tax (Rate), dated 28th Central Government exempts intra-state supplies of goods or services or both received by a registered person from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017): Provided that the said exemption shall not be applicable where the aggregate value of such supplies of goods or service or both received by a registered person from any or all the suppliers, who is or are not registered, exceeds five thousand rupees in a day. Notification No. 9/2017-Central Tax (Rate), dated 28th Central Government hereby exempts intra-state supplies of goods or services or both received by a deductor under section 51 of the said Act, from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the said Act, subject to the condition that the deductor is not liable to be registered otherwise than under sub-clause (vi) of section 24 of the said Act. Notification No. 10/2017-Central Tax (Rate), dated 28th Central Government hereby exempts intra-state supplies of second hand goods received by a registered person, dealing in buying and selling of second hand goods and who pays the central tax on the value of outward supply of such second hand goods as determined under sub-rule (5) of rule 32 of the Central Goods and Services Tax Rules, 2017, from any supplier, who is not registered, from the whole of the central tax leviable thereon under sub-section (4) of section 9 of the Central Goods and Services Tax Act, 2017 (12 of 2017).

5 35 Levy and collection Para 3.2 Tax on electronic commerce operator [Sec. 9(5)] Example: ABC an unregistered CA firm supply service to XYZ an registered person, in this case GST shall be required to be paid by registered person XYZ. Example: Mr. Ronaldo whose aggregate turnover is below threshold limit not registered in GST. Mr. Johnson buy goods from Mr. Ronaldo. In this situation Mr. Johnson is liable to pay tax on the value of such goods purchased under Reverse charge. 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: u 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: u 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. Notification No. 17/2017-Central Tax (Rate), dated 28th Central Government hereby notifies that in case of the following categories of services, the tax on intra-state supplies shall be paid by the electronic commerce operator (i) services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle; (ii) services by way of 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 electronic commerce operator is

6 Para 3.2 Supply, levy and collection 36 liable for registration under sub-section (1) of section 22 of the said Central Goods and Services Tax Act. (iii) services by way of house-keeping, such as plumbing, carpentering etc., except where the person supplying such service through electronic commerce operator is liable for registration under sub-section (1) of section 22 of the said Central Goods and Services Tax Act. [Amended by Notification No. 23/2017- Central Tax (Rate)]. Explanation. For the purposes of this notification, (a) 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 Global Positioning System (GPS) or General Packet Radio Service (GPRS); (b) maxicab, motorcab and motor cycle shall have the same meanings as assigned to them respectively in clauses (22), (25) and (26) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988) Services notified Under Reverse Charge [Notification No. 13/2017-Central Tax (Rate)] Title Provisions Supplier of Service Recipients of Service (Liable to pay tax) Service received from Goods transport agency Supply of Services by a goods transport agency (GTA) who has not paid Central tax at the rate of 6% in respect of transportation of goods by road to (a) Any factory registered under or governed by the Factories Act, 1948 (63 of 1948); or (b) any society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law for the time being in force Goods Transport Agency (GTA) (a) Any factory registered under or governed by the Factories Act, 1948 (63 of 1948); or (b) any society registered under the Societies Registration Act, 1860 (21 of 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; or

7 37 Levy and collection Para 3.2 Title Provisions Supplier of Service Recipients of Service (Liable to pay tax) Service received from advocate by business entity Service received from arbitral tribunal in any part of India; or (c) any co-operative society established by or under any law; or (d) any person registered under CGST/IGST/ SGST/UTGST Act; 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; or (g) any Casual taxable person; including a senior advocate by way of representational services before any court, tribunal or authority, directly or indirectly, to any business entity located in the taxable territory, including where contract for provision of such service has been entered through another advocate or a firm of advocates, or by a firm of advocates, by way of legal services, to a business entity. Services supplied by an arbitral tribunal An individual advocate including a senior advocate or firm of advocates An arbitral Tribunal (d) any person registered under CGST/ IGST/SGST/ UTGST Act; 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; or (g) any Casual taxable person; located in the taxable territory. Any Business entity located in the taxable territory. Any Business entity located in the taxable territory.