Definitions, Scope of Supply, Levy & Collection Under GST CA Ganesh Prabhu Balakumar B.Com, MFM, F.C.A, LL.B, DISA (ICAI) 1
Introduction of GST Goods & Services Tax Dual GST : CGST/SGST Or IGST Single Tax payable on Taxable Supply Applicability - Whole India except Jammu & Kashmir Force Notification in the Official Gazette 2
India (Sec 2(56) of CGST Act) Territory of India Territorial waters Seabed & sub-soil Continental Shelf Exclusive Economic Zones Maritime Zones Air Spaces above Territory & waters 3
Definitions {Sec 2(1) to Sec 2(121)} Goods & Services Persons Location & Place Supply ITC Misc... 4
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Goods & Services under CGST Act Goods - Sec 2(52) Services - Sec 2(102) Goods means Services 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 served before supply or under a contract of supply Anything Other than goods, money and securities but includes activities relating to the use of money; or its conversion by cash or any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is Charged 6
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Person (Sec 2(84) of CGST Act) 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 Section 2(45) of the Companies Act, 2013 h) Any body corporate incorporated by or under the laws of a country outside India. 8
Person (Sec 2(84) of CGST Act) (I ) A co-operative society registered under law relating to co-operative society (j) A local authority (k) A Central Government or 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 9
Supplier (Sec 2(105) of CGST Act) 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 10
Recipient (Sec 2(93) of CGST Act) In relation to any goods or services or both Where a consideration is payable Where no consideration is payable Where no consideration is payable for the supply of goods or services or both for the supply of goods for the supply of services. The person who is liable to pay that consideration. The person to whom the goods are: delivered or made available; or possession or use of the goods is given or made available. The person to whom the service is rendered. 11
Recipient (Sec 2(93) of CGST Act) 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 12
Taxable Person (Sec 2(107) of CGST Act) Means a person a)who is registered; or b)who is liable to be registered u/s 22 or 24 Casual Taxable Person (Sec 2(20) of CGST Act) 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 13
Non Resident Taxable Person - Sec 2(77) 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 14
Principal (Sec 2(88) of CGST Act) Means a person On whose behalf an agent carries on the business of supply or receipt of Goods or Services or Both Means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer, other mercantile agent, whatever name called, who carries on business of supply or Receipt of Goods or Services or both on behalf of another Agent (Sec 2(5) of CGST Act) 15
Job Work u/s 2(68) of CGST Act Job Work is defined as : Means Any Treatment or Process Undertaken by a Person On goods belonging to Another Registered Person Expression Job Worker shall be constructed Accordingly 16
Agriculturist (Sec 2(7) of CGST Act) Means an Individual or a HUF 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 17
Family (Sec 2(49) of CGST Act) Means a)the Spouse and children of the person, and b)the parents, grand-parents, brothers and sisters of the person if they are wholly or mainly dependent on the said person 18
E- Commerce Operator - Sec 2(45) Means any person Who Owns, Operates or Manages digital or Electronic facility or platform for E - Commerce E Commerce (Sec 2(44) of CGST Act) Means The supply of Goods or Services or Both including digital Products over digital or electronic network 19
Input Service Distributor - Sec 2 (61) Office of Supplier of G or S Issues Invoice or Other Documents prescribed for Distribution of Credit ISD Receives Tax Invoice towards receipt of Input Services Distribute Credit of CGST/SGST/IGST to a Suppler of G or S 20
Location & Place 21
Place of Business - Sec 2(85) of CGST Act 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 A place where a taxable person maintains his books of account; or A place where a taxable person is engaged in business through an agent, by whatever name called 22
Business - Sec 2(17) of CGST Act 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; 23
Business - Sec 2(17) of CGST Act (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 (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 24
Business Vertical-Sec 2(18) of CGST Act Means a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which is subject to risks and returns that are different from those of the other business verticals. Explanation. For the purposes of this clause, factors that should be considered in determining whether goods or services are related include (a) the nature of the goods or services; (b) the nature of the production processes; (c) the type or class of customers for the goods or services; (d) the methods used to distribute the goods or supply of services; (e) the nature of regulatory environment (wherever applicable), including banking, insurance, or public utilities 25
Principal Place of Business Sec 2(89) Means the Place of Business specified as Principal place of Business in the certificate of Registration Fixed Establishment - Sec 2(50) of CGST Means a place (other than the registered place of business) which is characterized 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. 26
Location of the Recipient of Services Sec 2(70) Where a supply is received Place of Business for which the registration has been obtained Place other than the place of business for which registration has been obtained (a fixed establishment elsewhere) More than one establishment, whether the place of business or fixed establishment In absence of such places The Location of such Place of Business The location of such fixed establishment The location of the establishment most directly concerned with the receipt of the supply The location of the usual place of residence of the recipient 27
Location of the Supplier of Services Sec 2(71) Where a supply is made Place of Business for which the registration has been obtained Place other than the place of business for which registration has been obtained (a fixed establishment elsewhere) More than one establishment, whether the place of business or fixed establishment In absence of such places The Location of such Place of Business The location of such fixed establishment The location of the establishment most directly concerned with the provision of the supply The location of the usual place of residence of the Supplier 28
Usual Place of Residence Sec 2(113) Incase of an individual, the place where he ordinarily resides In other cases, the place where the person is incorporated or otherwise Legally constituted Address of Delivery - Sec 2(2) of CGST Act 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 Address on Record - Sec 2(3) of CGST Act Address of Recipient as available in the records of the Supplier 29
Non Taxable Territory Sec 2(79) The territory which is outside the Taxable Territory Taxable Territory - Sec 2(109) of CGST Act The territory to which the Provisions of this Act Apply Sec 1 of CGST Act Extents to Whole of India except J & K Taxable Territory Vs India 30
Turnover in State / UT- Sec 2(112) of CGST Act 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 made within state or Union Territory by a Taxable Person, export of Goods or Services or Both Inter-State supplies of Goods or Services or Both made from the State or UT by the taxable person but excludes Central Tax, State Tax, Union Territory Tax, Integrated Tax and Cess 31
Aggregate Turnover (Sec 2(84) of CGST Act) 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; 32
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Composite Supply - Sec 2(30) Mixed Supply - Sec 2 (74) Means Supply made by a taxable person to a recipient Means Two or more individual supplies of goods or services, or any combination thereof 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 Made in conjunction with each other by a taxable person For a single price One of which is a principal supply Where such supply does not constitute a Composite Supply 34
Principal Supply (Sec 2(90) of CGST Act) 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 Taxable Supply (Sec 2(108) of CGST Act) Means a Supply of Goods or Services or Both which is leviable to tax under this Act 35
Exempted Supply Sec 2(47) of CGST Act Means supply of goods or services or both which attracts nil rate of tax ; or which may be wholly exempt from tax u/s 11 or u/s 6 of the IGST Act; and includes non-taxable supply. Non-taxable supply - Sec 2(78) of CGST Act Means a supply of goods or services or both which is not leviable to tax under CSGT Act / SGST Act / IGST Act. 36
Continuous Supply of Goods Sec 2(32) 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 37
Continuous Supply of Services Sec 2(33) 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 38
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Input Tax u/s 2(62) of CGST Act Input Tax in relation to taxable person Means IGST (Including IGST Paid on IG) CGST SGST/UTGST Charged on any Supply of G or S Includes Tax Payable under RCM Excludes Tax paid under Composition Levy Sec 10 40
Capital Goods u/s 2(19) of CGST Act Capital Goods is defined as : Means Any Goods Value of which is Capitalized In books of Accounts Of the Taxable Person Who Claims ITC Used or intended to be used In the Course or Furtherance of Business 41
Input u/s 2(59) of CGST Act Input is defined as : Means Any Goods Other than CG Used or Intended to be used By a Supplier In the Course or Furtherance of Business 42
Input Service u/s 2(60) of CGST Act Input Service is defined as : Means Any Service Used or Intended to be used By a Supplier In the Course or Furtherance of Business 43
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Consideration Sec 2(31) of CGST Act 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 (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 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 45
Works Contract Sec 2(119) of CGST Act 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 46
Voucher Sec 2(118) of CGST Act 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 47
Reverse Charge Sec 2(98) of CGST Act 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 Tax Period Sec 2(106) of CGST Act Means the period for which the return is required to be furnished 48
Audit Sec 2(13) of CGST Act Means the examination of records, returns and other documents maintained or furnished by the registered person under this Act or the rules made There under 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 49
Adjudicating Authority Sec 2(4) 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 and the Appellate Tribunal 50
Officers under GST(Sec 3 of CGST Act) Government by notification Appoints the following classes of Officers Principal Chief Commissioners / Principal Director of CT Principal Commissioners or Principal Additional Directors of general CT. Commissioners or Additional Directors of general CT. Additional Commissioners or Additional Directors of CT. Joint/Deputy Commissioners or Joint/Deputy Directors of CT. Assistant Commissioners or Assistant Directors of CT. Any other class of Officers as it may deem fit 51
Appointment & Powers of Officers (Sec 4 & 5) Board Appoints officers in Addition to Sec 3 Board may, by order Authorize any officer to appoint Officer below the Rank of Assistant Commissioner of Central Tax for the Administration of the Act An officer of Central Tax may exercise the powers and discharge the duties conferred or imposed under this Act Officer who is Subordinate to him. The Commissioner may, subject to such conditions and limitations as may be specified in this behalf by him, delegate his powers to any other officer who is subordinate to him. 52
Authorization of ST or UTT Officers (Sec 6) Officers appointed under State/ UT Act - Proper Officers (a) PO issues order CGST Act he shall issue an order under SGST/UGST Act under intimation to the jurisdictional Officer of ST/UTT (b) PO under the SGST/UGST Act has initiated any proceedings on subject matter, no proceedings shall be initiated by the proper Officer under CGST Act on same subject matter (c) Proceedings for rectification, appeal and revision, of order passed by an Officer appointed under CGST Act shall not lie before a ST/UTT Officer 53
Section 7 of CGST Act - Supply Import services w/ or w/o Consd. Sale, transfer, barter, exchange, license, rental, lease, disposal w/o consd Sch 1 Activities w/o Consd. Sch 2 Activities Sch3 Activities NOT Scope of Supply Activities by Govt or LA as Public Authorities Notified by Govt + Co GST recom. 54
Sch I Supply without Consideration Permanent Transfer of BA - ITC Supply Between Related or Distinct Person FoB Gift by Employer to Employee Rs.50,000/- Supply by Principal to Agent or Receipt of Goods by Agent on behalf of Principal Import of Service Related Person - FoB 55
Sch II Supply of Goods or Services Transfer of title in Goods - SoG Right or UDS in Goods W/O Title Transfer SoS Transfer of title in Goods - Future Date HP/EMI - SoG Right in Immovable Property W/O Title Transfer - SoS Treatment or Process Another Person Goods - SoS Transfer of BA No Longer Forms Part - SoG 56
Sch II Supply of Goods or Services If a BA Private Use or Any Purpose other than purpose of Business SoS If a BA held by a taxable person who ceases to be a taxable person SoG Renting of IMP SoS (DS) Construction of Complex SoS - Except Entire Consd. Temporary Transfer IPR SoS 57
Sch II Supply of Goods or Services Information Technology Software SoS Refrain from Act or Tolerate an Act SoS Transfer of Right to use any Goods SoS Composite Supply WCS & Supply of Food Supply of Food by Club or Association - SoG 58
Sch III Neither SoG or SoS Service - Employee to Employer In Relation or Course Any Court or Tribunal, Functions MP, MLA, etc. Post Recognized by CoI or CP, M, D of Board or Commission of CG or SG or LA Funeral, Burial, Cremation, or Mortuary Sale of Land (except Construction of Complex) Actionable Claims (except Lottery, Betting, Gambling) 59
Sec 9 (1) Levy of CGST & SGST Tax Levy of CGST (SGST Levy Respective SGST Act) All Intra-State Supply of G or S or B Except Liquor Value determined as per Sec 15 of CGST Act Rate Notified by CG, SG Not Exceeding 20% Collected in Manner Prescribed (Sec 12 & 13) 60
Sec 9 (3) Levy of CGST & SGST - RCM CG & SG Recommendation GST Council Specify Goods or Services or Both Tax on which Payable under Reverse Charge Tax shall be paid by Recipient All provisions apply as if he is Supplier of such Goods or Services. 61
Sec 9 (4) Levy of CGST & SGST URS Supply of taxable Goods or Services or Both By a Supplier, who is not registered under GST Tax on which Payable under Reverse Charge Tax shall be paid by such person as Recipient All provisions apply as if he is Supplier of such Goods or Services. 62
Sec 9 (5) Levy of CGST & SGST ECom CG & SG on Recommendations of GST Council Specify category of Services (Goods NA) Tax on which shall be paid by E-Commerce Operator If such services are supplied through them All provisions apply as if he is Supplier of such Goods or Services. 63
Sec 8 TL on Mixed & Composite Basis Meaning Treatment Mixed Supply Two or more supplies together, which is NOT a Composite Supply As supply of that supply w/ higher tax rate Composite Supply Two or More supplies with 1 Principal Supply & Naturally Bundled As supply of that principal supply 64
Composition Levy - Eligibility PY Aggregate Turnover Rs.50 Lakh Engage in making Supply of goods which are liveable to tax under this Act; Engage in Supply of Services of Supply of Foods (Sch2 Para6 Clause (b)) NOT Engaged Inter-State Outward supplies of Goods; NOT Engaged Supply of goods through E Com (Sec 52 of CGST Act) 65
Composition Levy - Eligibility NOT Manufacturer of goods Notified* If same PAN for more than 1 RP, eligible only if both or all opt for Composition Levy NOT collect any tax from Recipient & NOT entitled to ITC If RP opted without being eligible and PO has reasons Tax+ Penalty u/s 73 & 74 66
Composition Levy - Sec 10 of CGST Act Manufacturer 1% of State or UT Turnover Supply of Food 2 ½% of State/UT Turnover Other Suppliers ½% of State/UT Turnover 67
Conditions & Restrictions Neither a CTP or a NRTP. Goods held in Stock as on AD are not Inter State or Branch Transfer Imported Purchase Unregistered Person. (pay tax under (3) & (4) of Sec 9 of CGST Act) Mention the word CTP - on every Bill, on Signboard Notices & Need not file a fresh intimation every year. 68
Validity of Composition Levy Option to pay tax u/s 10 is valid only till all conditions are fulfilled. Conditions Not satisfied then withdrawal is made in FORM GST CMP 04 within 7 days of violation. And liable to pay tax U/s 9 of CGST Act 69
Sec 11 of CGST Power to Exempt Govt on GST Council recommendation in public interest may exempt:- By notification, exempt partly or wholly By special order under exceptional nature By Inserting explanation within one year of issue with retrospective effect 70
Doubts / Questions? 71
CA Ganesh Prabhu Balakumar Partner C.Ramasamy & B.Srinivasan Chartered Accountants, Chennai. Mobile: +91 98404 71139 E- Mail : ganeshbrabhu.b@crbs.in ganeshprabhu.b@gmail.com 72