GST Handwritten Summary Book

INDEX
S. No. Chapter Name Page No.

1. Introduction of Taxation Laws 1-7
2. Constituiton of India 8-17
3. Introduction Of GST 18-24
4. Introduction of GST 25-32
5. Charging Section of GST 33-41
6. Taxable Event - SUPPLY 42-58
7. Valuation of supply 59-67
8. Input Tax Credit 68-80
V-71
9. Accounts & Records 81-83
10. Audit Under GST 84-84
11. Compensation Act, 2017 85-86
12. Composition Levy 87-101
13. Demand & Recovery 102-103
14. E-Way Bill 104-112
15. Input Service Distributor 113-114
16. Place of Supply [POPOS/POPS] 115-122
17. Refund Under GST 123-125
18. Registration Under GST 126-135
19. Return Under GST 136-142
20. Tax Invoice, Credit & Debit Note 143-153
21. TDS & TCS 154-156
22. Time of Supply / Point of Supply 157-163
23. Inspection, Search, Seizure & Arrest 164-165
24. Job Work 166-167
25. Payment of GST 168-169
26. Amendments in Payment of GST 170-172
CA Vivek Gaba GST Summary book JUNE & DEC 2021
Chapter-1
Introduction of Taxation Laws
Subject Overview & Syllabus Partition
Taxation
Direct Tax Indirect Tax

(50/70 marks) (50/30 marks)
Income Tax International Tax GST Custom (new syllabus)

(50/70 marks) (old syllabus) (30/40 marks) (5-10 marks)
Part-1 Basis of Income Tax

 Introduction of Income tax with tax rates
 Residential Status
Part-2 Computation of Total Income & tax liability

 5 heads of income
 Clubbing of income
 Set off of losses
 Deduction u/C VI-A
Part-3 Miscellaneous Topics

 Return of Income
 Advance Tax
 TDS / TCS
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Ph: 9643036663 (Only Whatsapp), 7703880232 (Call & Whatsapp)

1 1
Which amendments/ updations are relevant for Exams?
June 2021 December 2021
Income Tax + GST
 Finance Act -2020  Finance Act -2020
+ +
Notifications /circulars upto 31/12/20 Notifications /circulars upto 30/06/2021
Meaning of Tax :
 A tax from latin word taxo is a compulsory charge under an act.
 The money that you have to pay to the govt. so that it can provide
public services.
Objectives of Tax :
 Raising Revenue
 Encouraging domestic industry
 Reducing income inequalities
 Promoting economic growth
 Development of Backward regions
 Ensuring Price Stability
 And so on ……..
Types of TAX
Particulars Direct Tax Indirect Tax
 General Levy of tax Levy of tax
meaning Incidence of tax Incidence of tax
“AND” same “AND” different
Burden of tax person Burden of tax person
Impact of tax Impact of tax

2 2
 Example  Income tax  GST

 Gift tax etc.  Custom
 Nature of tax Progressive nature Regressive nature
-2 income Fix nature

-2 tax  These are not linked with
 These are linked with paying capacity
paying capacity  IDT is uniform, whether
 Rich person will pay goods/services purchased
more tax in comparison by rich or poor.
to poor people
 Concept of P.Y Previous year income No concept of P.Y & A.Y

& C.Y assessed in A.Y
 Distribution or Central Govt. Central Govt. or State Govt.

payment of revenue as the case may be
 Department CBDT CBIC

(Central Board of Direct (Central Board of Indirect
Tax) Taxes & Custom)
 Taxable Event Income arise  Supply of GST

 Import / Export of goods

3 3
NOTE :
Particulars Income Tax GST Custom
 Tax ? Income पर Goods & services Only on goods
 पर Income arise On supply of Import or Export
? पर goods / services
Import = र India
Export = India र
Some important concepts :

 Basic -1:- Meaning of Income Tax, GST & Custom
 Income Tax: Income tax is a tax that Govt. imposed on total income
generated by person within their jurisdiction.
 GST (Article 366(12A)): GST is a tax which is levied on supply of
goods or services or both except alcoholic Liquor for human
consumption.
 Custom : Tax levied on Import or Export of Goods
 Basic -2 :- Origin of Law

 Act
 Rules
 Notification , Circulars , Explanation
 Case laws

4 4
Formation of Act :
Bill
Money Bill Ordinary Bill
Can be presented before

Ist: Lok Sabha
either of the house first
2nd: Rajya Sabha
Recommendatory 3rd : President’s assent
time limit: 75 days
Becomes an Act
 Income Tax Act, 1961

 Provision of Income Tax contains 298 Sections & XIV Schedules
 Amendments in Income Tax by Finance Act
अ र Income Tax amendment Finance Act amendment

& then Income Tax
Rules 
Income Tax Rules , 1962
 Supporting system of Act
 Administration with CBDT
 Rules cannot override Act
 Sec-295 of Income Tax give empowerment to frame rules
CRUX :-
Act  Tell what to do & what not to do ?
Rules  How to do ?
Act  Provisions
Rules  Procedure

5 5
Notification and Circulars
 Notification :
 Issued by CG or CBDT
 Bring changes in the middle of year
 Add or remove the provision of Act
 Binding for department and assessee
 Circulars :
 CBDT issues circulars and circulations
 Clarify doubts regarding meaning of various provisions
 Binding on A.O not on assesse and court
 Not override the Act
Case laws (High Court & Supreme Court Judgement)

 SC & HC can give Judgement only on the question of Law
 SC is the “Apex Court” of the country & decision of SC is law of land
 Decision of HC will apply in respective states within its jurisdiction
Important points for Exams

Particulars Income Tax GST Custom
Act Income Tax Act,  CGST Act, 2017 Custom Act, 1962
1961  SGST Act, 2017 &
 IGST Act, 2017 Custom Tariff
 UTGST Act, 2017 Act, 1975
 GST
Compensation
Act, 2017
Provision of Provisions Provisions Provisions
Act contained in the contained in the contained in the
act act act
&

6 6
Rules/ rate of
Custom Duty
Applicability Whole of India w.e.f from 1/7/17 to Whole of India
incl. J&K 7/7/17, whole of incl. J&K
India excluding
J&K.
w.e.f from 8/7/17
Whole of India incl.
J&K
Level of Taxes Central Level Central & State Central level
Level
Total no. of 1 35 Act 1
Act

7 7
CA Vivek Gaba Summary book www.expertbano.com
Chapter - 2
Constituiton of India
 Architect - Dr. Bhim Rao Ambedkar
 Effective Date - 26th Jan. 1950
 Uniqueness - longest constitution
 Total Articles - 448 ( EARLIER 395)
 Schedule - 12 schedules
 Articles covered in syllabus - 18 Articles
 Schedule covered in syllabus - 1 Schedule
List Of 18 Articles & 1 Schedule

Old Articles New Articles Amended Arcicles
 A- 245imp  A- 246Aimp  A- 249
 A- 246imp  A- 269Aimp  A- 250
 A- 248imp  A- 279Aimp  A- 268
 A- 254  A-366(12A)imp  A- 268A
 A- 265imp  A- 1imp  A- 269
 A- 270imp  A- 286
Contents of Articles
 Article- 245
Extent of laws made by Parliament or State Assembly.
 Article- 246
Subject matter of laws made by made by Parliament or state Assembly.
 Article- 248
Residuary Article.

8 8
 Article- 254
Who will prevail if conflicts between Parliament or State Assembly.
 Article- 265
No tax shall be levied or collected without the authority of Law.
 Article- 270
Distribution of taxes between Union & States.
 Article- 271
Power to levy Cess or Surcharge by Parliament
 Article- 246A
Special Provision with respect to GST
 Article- 269A
Apportionment of IGST
 Article- 279A
Formation of GST COUNCILE
 Article- 366(12A)
Definition of GST
 Article- 1
Definition of INDIA
Article – 245 + 246 + 248 + 254

Refers VIIth Schedule
Constitution of India
List I List II List III

Name Union list / State list Concurrent list
Central list
Law making Parliament State Legislature Parliament/ State
authority Legislature
Extent of laws Whole of India Whole of State
9 9
(A-245) “or” Part of India “or” Part of State
If any matter is not covered under any list, then laws are made by the
Parliament from Entry-97 of List-I (Residuary entry)
Important points
List I List II
Entry no. Particulars Entry no. Particulars
82 taxes on income other 46 taxes on Agri. Income
than Agri. Income
83 custom laws

10 10
Definition of India / State / U. territory under GST

Sec. 2(56) + 2(103) + 2(114) + Article 1
India
Base line/ land mass TWI EEZ

12 NM 200 NM
29 28 States 7 8 UT other territory for oil & natural gas

purpose
with legislature without legislature
 Delhi Andaman other territory
 Pondicerry Lakshadweep UT
 J/K Dadra & Daman
Daman LADAKH CGST + UTGST
Chandigarh
Other territory
Deemed States
CGST + SGST Deemed UT
Example :
S. No. Supply Nature GST
1 Haryana  UP Inter IGST
2 UP  UP Intra CGST + SGST
3 UP  Chandigarh Inter IGST
4 Chandigarh  Chandigarh Intra CGST + UTGST
5 Chandigarh  Andaman Inter IGST
6 Andaman  Mumbai Inter IGST
7 Mumbai  Delhi Inter IGST
8 Delhi  Delhi (SEZ) Inter (export) NO GST
11 11
9 Delhi (SEZ)  Punjab Inter IGST

10 Punjab  USA Inter (export) NO GST
11 USA  Gujrat Inter IGST
(imports)
12 Gujrat  8 NM (near Inter IGST
Mumbai)
13 8 NM  Mumbai Intra CGST + SGST
(near Mumbai)
14 J&k  Ladakh Inter IGST
15 Dadara  Daman Intra CSGT + UTGST
SEZ  SEZ bhar se bhar  nothing to do with this
Definition of INDIA under Income Tax

Section – 2(25A) + A-1
O/S India 200 NM 12 NM

2829 states
Only oil & natural For all 87 UT
gas purpose purpose
Definition 0f INDIA under Custom Laws
SAME
Custom Law mei 200 NM tak EEZ &
200 NM तक ICW (Indian Custom Water)

12 12
Article – 265
No tax shall be LEVIED “or” COLLECTED without authority of law.
Example : Income Tax = Income Tax Act, 1961

Custom = Custom Act, 1962 & Custom Tariff Act, 1975
GST = CGST Act , 2017 – 1 Act
SGST Act , 2017 – 31 Act

UTGST Act , 2017 – 1 Act 35 Acts
IGST Act , 2017 – 1 Act
GST Compensation Act, 2017 – 1 Act
Article-269A : Apportionment of GST
Inter-state
Delhi IGST levy & collected by CG

Haryana
Shall be appropriated b/w union & sate  provided by

Parliament by law on the recommendation of GST Council.
In nutshell, IGST is a sum total of CGST & SGST.
Important points :
 GST क state क त इ त प क त क व प
क व कत , इ त प क त क व प
व कत .
i.e. GST is a Consumption / Destination based tax.
 GST क person क registration origin state , क
revenue consumption state क .

13 13
Article-279A : Formation of GST Council

President  within 60 days from 8/9/16
(formation of CAA , IOI)
GST Council formed  10/9/16
GST Council notified  12/9/16
Members in GST council = total 33 members
1) Chairperson = Union Finance Minister
2) Member from CG = IRS Officer
3) Member from SG = FM or other nominated by SG
4) Vice Chairperson = One member from
5) Quorum required = Minimum 50%
6) Voting in favour = 75% (3/4)
7) CG share = 1/3 i.e. 33.33%
8) SG share = 2/3 i.e. 66.67%
GST council make recommendation on following:

 Taxes to be subsumed
 Goods / services to be subjected “or” to be exempted from GST
 Apportionment of GST
 Special rate for specified period
 Threshold limit of turnover
 Special provision w.r.t Special Category States
Example -1
Total members = 33
Members present = 16
CG = 2  yes
SG = 14  yes

14 14
Decision approved or not ?

Answer : NO (quorum is not present)
Example -2
Total members = 33
Members present = 25
CG = 2  yes
SG = 23  No
Decision approved or not?
Answer : NO, not approved ( only 33.33% votes are in favour)
Article-270 : Distribution of taxes b/w Union & State

 All of the taxes & duties referred in Union list
 Shall be levied & collected by Govt. of India
 Shall be distributed b/w Union & State
Amendment after GST

 CGST levied on Intra-state Supply shall also be distributed among CG &
SG
 IGST component apportionment to the Union shall also be distributed
Name of taxes Payment to Apportionment
Income Tax CG √
CGST CG √
SGST SG X
UTGST CG X
IGST CG IGST
A-269A
CG SG
A-270
15 15
CG SG
Article-271 : Power to levy Cess or Surcharge by Parliament

Parliament may at any time increase any tax by a Surcharge for the purpose of
Union
Concept of Cess :
Income Tax GST

Name of CESS Health & Education Cess GST Compensation Cess
DOB Finance Act, 2018 GST Compensation Act,
2017
Rate 4% 3% to 290%
Levied on Tax Value of supply
Nature Direct Tax Indirect Tax
Amended articles
A-249
If council of state has declared by resolution supported by >/= 2/3 rd [66.67%]
member present & voting then Parliament may make laws w.r.t GST (i.e. SGST) if
in case of National Interest.
A-250
In case of proclamation of Emergency , Parliament has power to make laws w.r.t
GST (i.e. SGST) “or” any other matter in State List (No Resolution Required)
A-268
Pending (will be discussed after Supply chapter)
A-268 A
Omitted (Related to Service Tax Apportionment)
A-269
16 16
Taxes on sale “or” Purchase of goods and Tax on consignment of goods Except
A-269A shall be assigned to the States.
A-286
No law of supply shall impose, a tax on the supply of goods or services , Where
supply takes place:
 Outside the State
 In the case of Import / Export

17 17
Chapter – 3
Introduction Of GST
Before GST discussion firstly we will have to find out what was the problem in
old indirect tax system.
 Problems & Limitations in old system

 Multiple tax
 Multiple taxable event
 Cascading effect
 No uniformity
 Classification issue
 Different department if different types of taxes
 Higher compliance and so on ……
 To remove above problems govt. introduced GST laws in India ; w.e.f. 1 July,
2017 [ in J&K 8th July Onwards].
 Picture after GST laws [w.e.f. 1st July, 2017)

1) Multiple taxes  GST
2) Multiple taxable events  Supply
(manufacturing , sales etc.)
3) Assessee names  Supplier ( Taxable person )
(manufacturer , seller , etc. )

18 18
4) Intra state  Intra state

Interstate  Inter State
International trade  Inter State
5) Double tax  No double tax (classify what is SOS or SOG)
6) Cascading effect  No Cascading effect (seamless flow of credit)
7) No uniformity  ONE Nation, ONE Tax (5%, 12%, 18%, 28%)
(Multiple state = multiple tax)
8) Different department  ONE department
9) Higher compliance cost  Lesser compliance cost as compared to old
indirect tax.
Example for understanding:

Double Tax Cascading
Value = 10,000 Value = 10,000
Excise duty @ 10%= 1,000 VAT @12.5% = 1,250
= 11,000 =11,250
S.Tax @ 15% = 1,500 S.Tax @ 15% = 1,687
G. Value = 12,500 = 12,937
[same value i.e. 10K पर र tax ) (tax पर र tax )
NOW,
Problem kya hai?  प
Solution kya hai?  प
Doubts coming in mind  ????
1. GST article  Article 246A

19 19
2. GST list  No List

3. GST entry  No Entry No.
4. GST liye constitutionGovt. wants simultaneously power
Amend ?
 Constitution Amendment Bill – 122

 Constitution Amendment Act – 101
Article 246A : Special Provision with respect to GST
Article 246A(1) Article 246A(2)
Intra - state supply Inter - state supply
Laws made by Parliament & Laws made by only Parliament

State Assembly
GST Charge GST Charged
CGST, SGST, UTGST IGST
Above GST is not applicable on following goods :-
 Petroleum Crude
 High Speed Diesel
 Motor spirit

20 20
 Natural Gas
 Aviation Turbine Feul
GST on these goods will be applicable, when recommended by the GST
Council.
Meaning of Intra state supply / Interstate supply / Zero-rated
supply (export) [Sec 8, 7 and 16 of IGST Act]
Section 8 OF IGST ACT Section 7 OF IGST ACT

INTRA - STATE SUPPLY INTER - STATE SUPPLY
Where the location of supplier Where the location of supplier
(and) (and)
Place of supply(POS) Place of supply(POS)
 Same State or  Two different states

 Same UT  Two different UT
 Two different country
CGST + SGST  Payment  One state , One UT
CGST + UTGST to S.G.  Supply to SEZ
(Consumption State)  Supply by SEZ
(Payment to C.G) IGST

(Payment to C.G)

21 21
Sec 16 OF IGST ACT (Zero Rated Supply)
SEZ
Supply
EXPORT Supply
Outside India
SEZ
ZZ
Zero rated supply
No GST
GOVT THUMB RULE – “IMPORT THE GOODS, HIGHER THE TAXES,
“EXPORT THE GOODS, NOT THE TAXES.
Example (SECTION 7, 8 & 16):-
Location Actual Place of Nature GST

Of supplier Supply supply
Delhi Delhi Haryana Inter IGST
Delhi Delhi Delhi Intra CG+SG
Delhi U.P. Delhi Intra CG+SG
Chandigarh Chandigarh Chandigarh Intra CG+UT
Chandigarh A.N. A.N Inter IGST
Haryana Delhi Haryana(SEZ) Inter NO GST

22 22
Haryana USA USA Inter NO GST

USA Mumbai Mumbai Inter IGST
China China Gujarat Inter IGST
CRUX: Actual place of provision in not relevant for determination of “NATURE
OF SUPPLY”.
Taxes Subsumed under GST
Central Level
 Central Excise duty

 Additional duty of excise
 Custom duty CVD & SAD
 Central Surcharge & Cess
 Service Tax
State Level
 State VAT
 Central Sales Tax
 Luxury Tax
 Entry Tax
 Entertainment Tax Except when levied by local authorities
 Taxes of Advertisements
 Purchase tax
 Taxes on betting, gambling & Lottery
 State Surcharge & cess

23 23
Few taxes which have not been subsumed into GST:
 Basic Custom duty

 Entertainment Tax levied by Local authorities
 Stamp duties
 Road tax
 Toll Tax
 Municipal Taxes
Focus Area: Tobacco and tobacco products would subject to GST. In addition,
the Centre would have the power to levy Central Excise duty. (i.e Double
Taxation)

24 24
Chapter – 4
Introduction of GST
 GST was first levied by France in 1954.
 Last country to adopt GST is Malaysia.
 GST is a destination/consumption based tax.
 India has the highest GST rate in the world i.e. 28% next highest rate is in
Argentina @ 27%.
 GST is technically paid by supplier but it is actually funded by customers.
 Indian GST has 4 General rate structures ( applicable on goods or services or

both) , viz. 5%, 12%, 18%, 28% and 3% or 0.25% special rate (applicable
only on goods) on precious metals like gold , rough diamond etc.
Model of GST
Australian Model Kelkar-Shah Model
Canadian Model Bagchi –Podder Model

25 25
 India follows dual GST model (CGST & SGST)

 GST model is adopted from Canada.
 Currently Brazil & Canada also follows dual GST Model.
 GST is value added tax (VAT) on activity of supply of goods/services or both.
 There is a special purpose vehicle called GSTN to carter to IT needs of GST.
GSTN  Goods & services tax network (GST Portal). [The CG & SG holds
24.5% each equity shares respectively and the remaining 51% are held by Non-
Governmental institutions (LIC Housing Finance, which owns 11%, and HDFC Bank, ICICI Bank, HDFC Ltd
and NSE Strategic Investment Co, each owning about 10%.). & GSTN contacted Infosys in 2015 to
build, run the network and system for the GST.]
GSTIN  Goods & services tax Identification number.(15 DIGIT)
Two most important concept
 Concept-1 Taxation Principles
Destination Principle Origin Principle

i.e. , the country / state where goods are i.e. , the country / state from where
consumed or designed will get the tax goods are originated will get the tax
instead of origin state / country. instead of destination state.
Example : GST / Excise duty Example : CST
 Concept-2 Taxation System

1. First Point Collection
2. Last Point Collection
3. Multipoint Collection
4. Multipoint Collection with ITC method
Follows in GST

26 26
Value Added Tax : Concept [ MOST IMPORTANT]
Example 1 : GST rate(assume) = 18%
X Y Z
Manufacturer Intra State Wholesaler Intra State Customer
Delhi Delhi Delhi
Exa
Value = 10,000 C.G-900 [ITC] Govt.
CGST =
mple
900 1800 . Cost- 14,160
S.G-900 [ITC]
SGST = :900
Total GST
11,800 Cost = 10,000
rate V/A. = 2,000
12,000
=
CGST = 1080
18%
SGST = 1080
c
14,160

27 27
Example 2: GST rate [assume] = 18%
Intra Inter
Delhi Delhi Haryana
Value = 10,000 900 CG Cost to consumer
CGST = 900 900 SG = 14,160
SGST = 900 Cost = 10,000

= 11,800 VA = 2000
12,000
IGST = 2,160
14,160
Revenue to Govt. = C.G.= 1080 = 900+360+180
S.G.= 900+180
How to Flow our GST ?
Total check point = 13
For Consultancy
Professional Client
(CA / CS / CMA)

28 28
Check Point 1: Element covered in the definition of goods/services or both
YES NO
Check Point 2: Whether activity covered under GST Supply ? No question

of GST
YES NO
Check Point 3: Whether place of supply
No question
in taxable territory i.e. India?
of GST
NO YES
No question
of GST Check Point 4: Whether person covered
under definition of Taxable Person?
NO YES
Check Point 5: Whether such supply covered

No question under 100% exemption notification?
of GST
YES NO
GST levied but GST levied &

not collected collected
Now start process

of GST collection
Check Point 6: Value of Supply (Sec. 15)
Check Point 7: Rate of GST
Check Point 8: Who is liable to pay GST

liability to Govt.?
3rd Party
Supplier Recipient
(i.e. ECO)
Forward Charge Reverse Charge Special Provision
under GST
Check Point 9: When is GST liable to be paid? i.e. TIME OF SUPPLY /point of taxation?
Check Point 10
A I M R R R R ITC
Audit Invoice Manner of Return Record Registration Refund Input tax
payment credit
Check Point 11: Assessment & inspection under GST

Check Point 12: Appeal , Advance ruling etc.
Check Point 13: Interest , Penalty & other penal proceedings
29 29
Check Point – 1
Definition of goods & services
Goods means Services means
Section 2(52) of CGST Act Section 2(102) of CGST Act
Provision – Any kind of “Movable Property” Anything
Excludes  Money Excludes  Goods
 Securities  Money
 Securities
Includes  Actionable Claims, growing crops, grass
Includes  Activity relating to
use of money where separate

consideration is charged.
 Money : Section- 2(75)

Money means
 Indian legal tender
 Foreign currency
 Cheque
 Draft
 Promissory notes/ Bill of exchange etc.
Does not include ;
Any currency that is held fir its numismatic value

30 30
(Face Value not equal to Market Value)
 Security ( not defined in GST Act)
Normal meaning:
 Shares
 Debentures
 Bonds
 Mutual Funds units etc.
 Activity relating to use of money

Transactions only in money Transactions not only in money
GST (not levied) GST( Yes Levied)
Example :  Money deposit in Bank Example : Commission
 Money withdrawn from Bank Draft
 Money change Chit fund etc.
 Actionable Claims
Actionable claim other than Betting/Gambling/Lottery then no GST
Example :
Particulars Goods Services
Grass Yes NO
Growing crops Yes NO
Building NO Yes
Mobile Yes NO
Shares NO NO
Facilitating or arranging NO Yes
transactions in shares
(Brokers)
31 31
Units of mutual fund NO NO

Commission on draft NO Yes
Furniture Yes NO
Telecom NO Yes
Rs. 100 note NO NO
Old coins Yes NO

32 32
Chapter - 5
Charging Section of GST

Section – 9 of CGST Act, 2017
Section – 5 of IGST Act, 2017
Section – 7 of UTGST Act, 2017
Section–9 of CGST Act, 2017
Sec. 9(3)
Sec. 9(1) Sec. 9(2) Sec. 9(5)
& Sec. 9(4)
General Provision 5 Petroleum Reverse Charge *ECO
Products
1. When GST levied? When GST Special provision
2. On which taxable Levied? Under GST
event?
3. On which value?
4. Rate of GST?
5. Goods excluded
from GST?
6. Collection procedure?
*ECO – Electronic Commerce Operator
Section 9(1)
Activity must be Supply
Supply of Goods / Services or both
Goods / Services does not include:
 5 Petroleum Products
33 33
 Money
 Security
 Electricity
 Alcoholic liquor for human consumption
Goods or services
Other than negative goods Value determined u/s 15
 Tax rates 20% to 20% = 40%
CGST SGST %
IGST
Maximum Rate
 Collection of GST as may be prescribed
 Tax Paid by “ *Taxable Person” [section 2(107)]
*Taxable Person
 A person who is registered (or)

 Liable to be registered
 u/s 22 to 24
CRUX:
1. GST GST PERSON REGISTRATION पर DEPEND र
|
2. GST REGISTRATION THRESHOLD LIMIT BUT GST
THRESHOLD LIMIT अलग |
3. As per Section 9 of CGST Act Specifies that the CG & SG may specify rate of
tax not exceeding 20% but at present;
 Four rates of CGST has been prescribed for goods, viz., 2.5%, 6%, 9% &
14%
 Four rates of CGST has been prescribed for Services, viz., 2.5%, 6%, 9%
& 14%

34 34
Remember:
 CGST Rate = SGST Rate = UTGST Rate

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

RCM-2 = Section 9(4)
Reverse Charge : Section 9(3) & Section 9(4)

Section 9(3) Section 9(4)
Notify = Goods or Services NOTIFY = Persons/Goods/Services
Process = Supplier
Specified G/S
Recipient
GST Discharge by recipient

35 35
Example of section 9(3)
Insurance agent of Insurance agent services Insurance Co.
ABC Ins. Co.
Supplier Notified u/s 9(3) Recipient
Liable to pay GST
RCM Apply
Example of section 9(4)
Unregistered Person Supply of Notified Notified registered person

Goods/services
Liable to pay GST
RCM Apply
List of notified / specified goods covered under RCM

S.No. Supplier of Goods Supply of Goods Receiver of Goods
1 Agriculturist Cashew nuts not Any *R.P
shelled or peeled
2 Agriculturist Bidi wrapper Any R.P
(Tendu leaves)
3 Agriculturist Tobacco leaves Any R.P
4 Any person who Silk yarn Any R.P
manufactures silk yarn
5 Agriculturist Raw cotton Any R.P
6 SG/ UT/ LA Supply of lottery Lottery distributor
or selling agent
Any R.P
7 CG/ UT/ UT/ LA Used vehicles, seized
& confiscated goods Any R.P
or old used goods,
waste & scrap
36 36
8 Any registered person Priority sector lending Any R.P

certificate
*R.P = Registered Person
Agriculturist : sec 2(7) of CGST Act
Agriculturist means a individual or HUF who undertakes cultivation of land.
a) By own labour
b) By the labour of family
c) By servants on wages payable in cash or kind or by hired labour under
personal supervision of any family member.
List of notified / specified Services covered under RCM

S.No. Service provider Name of service Service receiver
Supplier of service
1. Foreign party Import of service Any business entity
located in T.T.
2. Goods transport Transport of goods  Any person registered
agency under (GST, UTGST ,
SGST)
 Any factory
 Any society
 Any co-operative
society registered in
India
 Any body corporate
 Any partnership firm
(AOP)
 Casual taxable person
3. Advocate /firm of Advocate / legal service Any business entity
advocate
4. Advocate /firm of Arbitral tribunal Any business entity
37 37
advocate
5. Any person Sponsorship service Any body corporate or
partnership firm
6. Director or body Service of director or Company or body
corporate body corporate corporate located in
Taxable territory
Circular issued
clarifying applicability
of RCM on services of
directors to Company/
Body Corporate-
 Services rendered
by directors not
in capacity of
employee to
attract GST and
also RCM
[Entry No. 6 of N/N
13/2017-CT (Rate) –
CBIC Circular No.
140/10/2020- GST
(dated 10th June,
2020)]
7. Insurance agent Insurance agent service Insurance co.
8. Recovery agent / Recovery agent service Bank or financial
recovery agent office institution
9. Foreign party Ocean freight Importer
(person located in (transportation of goods
NTT) by vessel from place o/s
India to custom
clearance India)
10. Author/Music co./ Copyright services related Publisher , music
38 38
Photographer/ Artist to literary, musical, composer, producer

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

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

40 40
Section 9(4)
If ‘Promoter’ (Recipient) purchased input goods and services used in the

construction of project from the unregistered person, the he is liable to pay
GST under RCM on the supplies made from unregistered supplier under Section
9(4) of CGST Act, 2017.

41 41
Chapter - 6
Taxable Event - SUPPLY
Taxable event  Supply + Composite / mixed supply
Sec.7 of CGST Act, 2017 Sec.8 of CGST Act, 2017
Relevant provision related to supply
 Section-7 = Scope of supply

Section-8 = Tax liability on composite supply & mixed supply
 Schedule I = Activity : treated as supply even if made without
Consideration [Free supply बन )
 Schedule II = Activity or transactions treated as “SOG” or “SOS”.
 Schedule III = Negative list of GST (total =8 Para) not liable to GST
Section 7 : Scope of supply

SCOPE OF SUPPLY
Section 7(1) Section 7(1A) Section 7(2) Section 7(3)
NA
a. General definition Schedule II Schedule III

b. IMPORT OF SR. Total 7 Para Total 8 Para
c. Schedule –I
without
consideration

42 42
Section 7(1)(a) [INCLUSIVE DEFINITION]
All forms of supply
Of Goods (or) Of Services (or) Both
Such as (Examples)
• Sale
• Transfer
• Disposal
• Barter
• Exchange STD BELL
• License |
• Lease
• Rental
Made or agreed to be made
For a consideration
By a person
In the course of business or FOB
Two main conditions under sec. 7(1) (a)
1. With consideration
+
2. In the course or furtherance of business
Two Doubts Arise In Student Mind?
 If no consideration
Sol: Then not a supply u/s 7(1) (a) but may be covered under u/s 7(1) (c)
 If not in the course or FOB
Sol: Then not a supply u/s 7(1) (a) but may be covered under u/s 7(1)(b)or
7(1)(c).

43 43
Main key points under sec. 7(1)(a)
 Goods 2(52) - already done

 Consideration 2(31)
 Services 2(102) – already done
 Person 2(84)
 Business 2(17)- Self read
Consideration 2(31)
Consideration includes :
 Any payment whether in money or non-money

 Any act or negative act
Except any subsidy given by CG/SG
IMPORTANT POINTS:
Security deposit-  Adjustable Consideration

 Non-Adjustable No consideration
Features of Consideration
Must be exist
Or at the time of provision of activity
Must be certain
CRUX of 7(1)(a)
Supply of Goods or services or both
With consideration Without consideration
In the course (or)

In the course or FOB Not in the course of FOB Not in the course of
FOB
may be covered may be covered

Sec. 7(1)(a)
u/s 7(1)(b) u/s 7(1)(c)
44 44
Some questions
1. Activity without consideration whether can be treated as “supply”
Yes ! under sec. 7(1)(c)
2. Activity for considerationwhether will always treated as “supply”
No, it must be in course or FOB
Section 7(1)(b) link with Para 4 of Section 7(1)(c)+Schedule-I
Section 7(1)(b) Section 7(1)(c)

 Import of service  Import of service
 By any person  By any person
 From any person  From Related party
 for a consideration Other Estb. o/s India
 whether or not in the course or  Made without consideration
furtherance of business .  In the course or FOB
Related Party - Definition given under explanation 1 of section 15 of CGST ACT.
Persons shall be deemed to be related if they fall under any of the categories below:
 Officer/ director of one business is the officer/ director of another business

 Businesses are legally recognised as partners
 An employer and an employee
 Any person holds at least 25% of shares in another company either directly or indirectly
 One of them controls the other directly or indirectly
 They are under common control or management
 The entities together control another entity
 They are members of the same family

45 45
Family u/s 2(49) of CGST Act.

Family means
 The spouse & the children of the person and
 The parents, grandparents, brother, sister of the person if they are
wholly dependent on the said person.
Summary diagram of sec. 7(1)(b) with Para 4 of 7(1)(c)
Import of service
Overseas Indian
supplier recipient
With consideration Without consideration
In the course Not in the In the course Not in the

or FOB course of FOB or FOB course of FOB
From From
• RP • Other than
• O.EST o/s Specified
India Person
Not Supply
Supply 7(1)(b) 7(1)(b) 7(1)(c)
Act CGST CGST CGST

Inter-state Inter-state
Nature
(Sec 7 of IGST) (Sec 7 of IGST)
GST liab Exempt (except
RCM RCM
discharged by OIDAR*)
*Online Information Database access & retrieval sr.:
Supplier will be liable to pay GST on UIN (Unique Identification Number) basis
Treatment of Import of Goods under GST

CUSTOM , IGST
CRUX of IOS
 For consideration = check 7(1)(b)
 For without consideration = check 7(1)(c) PARA 4

46 46
Section 7(1)(c)
Activities or transactions to be treated as supply even if made without
consideration.
Refer - Schedule 1
Total - 4 Para
Section 7(1)(c) + Schedule 1
Para 1
Permanent transfer of Business asset when ITC has been availed
4 Conditions:
 Permanent transfer +
 Business asset +
 ITC Availed +
 Without consideration
Example:
Sale of car: INR 5,00,000

Mr. X Mr. Y
Car dealer: No ITC Claimed
SOL: It is a supply u/s 7(1)(a) , since all conditions are satisfied.
Para 2
Supply of goods or services or both
Between related party Between deemed distinct person
In the course of business or FOB

47 47
Special point
Employer gift Employee
Upto ₹ 50,000 Excess ₹ 50,000
in a F.Y in a F.Y
Not a supply It is a supply and whole value shall be chargeable to Tax
Related Person (Ex – 1 Of Sec 15)
Employer/ Employee Others
50,000 limit No Exemption Limit
Para 3
Supply of Goods
Principal Selling Agent
Buying Supply of Goods

Principal
agent

48 48
Summary Diagram of Sec. 7(1)(a), 7(1)(b), 7(1)(c)
Section 7(1)(a) Section 7(1)(b) Section 7(1)(c)
All goods/ services Import of service P-1 P-2 P-3 P-4
SOG/S PA IOS

With consideration With consideration Permanent t/f
Between AP FOC

In the course or FOB By any person Business Asset
RP/ DDP
BY AP
From any person ITC availed
FOB
From RP or other
Whether FOB or not est. o/s India
FOB
Supply , Supply
u/s Section 7(1A) [New Addition]
CRUX of 7(1):
Carrying Out
Mr. X Transaction
supplier (taxable person)

With Without
Consideration Consideration
7(1)(a) / 7(1)(b) only check

sec 7(1)(c)
7(1)(c) P-1, P-2, P-3, P-4
After “determination of supply”, next question arises regarding

classification of Supply  बन ?
Question: Why is classification necessary???

Reasons 
 Different of GST in case of SOG or SOS.
 Different coding system
49 49
 Goods = HSN Code

 Service = SAC
 Different valuation rules
 Different ITC rules
 Different “time of supply” provision
 Different “place of supply” provision
 And so on……
Solution  Section 7(1A)

Or
Section 7(3)
Or
Section 8 of CGST ACT
Points to be noted
SUPPLY
Determination of Supply Classification of Supply
Section 7(1)(a) Section 7(1A)
Section 7(1)(b) Section 7(3)
Section 7(1)(c) Section 8
Section 7(1A)
Where certain activities or transactions constitute a supply in accordance with

the provision of sub section (1) they shall be treated either as SOG or SOS
as referred in Schedule-II.
Schedule-II:
Activities or transactions to be treated as supply of goods or supply of services

50 50
Total = 7 Para
18 entries
5 entries 8 entries
Supply of
Supply of goods
services
If not covered in 18 Entries then, refer Sec. 8 & Sec. 7(3)
Summary diagram of section 7(1A)
Para 1 link with 5(f)

Transfer
Title Right
transfer of title in goods

transfer of “right in transfer of “right to
goods” use” any goods
Immediate transfer Future date
1(a) 1(c) 1(b) 5(f)
Supply of goods Supply of services
Para 2 link with Para 5(a)

Renting
Other Immovable
Land & Building
Property
2(a)/ 2(b)
5(a)
Supply of services
51 51
 Sale of land & building covered under Schedule-III
Para 3
Para 5
Supply of Services
 Renting of immovable property other than Land/ Building.
 Construction services Except 100% consideration received after completion or
occupation – Earlier.
 Temporary transfer of IPR
 I.T. software development etc.
 Negative Act ( not to do something)
 Transfer of “Right to use” any Goods

52 52
Para 6
Composite Supply
Non- specified composite

Specified composite supply
supply
Restaurant Work Contract
Related to Related to
Immovable Movable
property property
Supply of services Refer Section 8
Composite and Mixed Supply

Composite Supply Mixed Supply
(Natural Bundle) (Unnatural Bundle)
Means a supply made by a taxable Means two or more individual supplies

person to a recipient consisting of two of goods or services or any
or more taxable supply of goods/ combination made in conjunction with
services or any combination thereof, each other by a taxable person for a
which are naturally bundled, one of single price where the supply does not
which is a principal supply. constitute composite supply.
Tax treatment (Sec.8) Treated as a supply of that particular

Treated as a supply of such principal supply which attracts highest rate of
supply. tax.
Example : Example :
 Shirt + Packing  Canned Foods
53 53
 TV + Warranty  Sweets
 Laptop + Laptop bag  Chocolates
 AC + AC Installation  Dry fruits
 Boarding School  Juice etc.
 Hotel + Laundry Service  Box of Tie + Watch + Wallet
Para 4
Transfer of Business Asset
4(a) 4(b) 4(c)
Transfer / disposal of Putting goods to private use or Cessation of business;

business asset whether with making available goods to other Goods in stock:
or without consideration person for non-business purpose Deemed Supply
Supply of Goods Supply of Service Supply of Goods
Para 7
Supply
Unincorporated
It’s Members
AOP/ BOI
Supply Of Goods

54 54
Summary diagram of Section 7(1A)
Section-7(1A)
Para-1 Para-2 Para-3 Para-4 Para-5 Para-6 Para-7
 SOG  SOS  SOS  SOG  SOS  SOS  SOG

 SOS  SOS  SOS  SOS  SOS
 SOS  SOG  SOS
 SOS
 SOS
 SOS
Negative List of GST (Schedule-III) (Total 8 Para)
Para 1
Employee Service Employer
In the course or in relation to employment .

Neither as SOG nor as SOS
Para 2
Service By any Court or Tribunal established under Law.
Para 3
M.P / MLA / CAG / IAS etc....
Para 4
Funeral , burial , transportation of deceased.
Para 5
Sale of land / building subject to 5(b).

55 55
Para 6
Actionable claim other than batting/ gambling/ lottery.
Para 7
Outside Indian
boundary
200 Nautical 12 Nautical

Miles Mile Bangladesh
NTT NTT
NO GST
Para 8
Outside Indian
boundary
W/H
200 NM 12 NM
HC
Sale
Custom Custom BCD

GST GST GST

56 56
Summary of Sec.7 and Schedule- I, II & III
Supply
Supply Supply
7(1)(a) 7(2)
7(1)(b) Schedule III
Schedule-I
7(1)(c)
Total 4 Para Total 8 Para
After above provisions

supply ?
7(1A)
Schedule-II : Total 8 Para
18 entries
• 5 SOG
• 13 SOS # How to read schedule
• 1st: Schedule-III
• 2nd: Schedule-I
• 3rd: Schedule-II
AMENDMENTS IN SUPPLY CHAPTER:

Amendment - 1
Circular No. 121/40/2019 GST dated 11.10.2019 has clarified that the above special
dispensation applies only to supply of service by way of grant of liquor licenses by
the State Governments as an agreement between the Centre and States and has
no applicability or precedence value in relation to grant of other licenses and
privileges for a fee in other situations, where GST is payable. It may be noted that
services provided by the Government to business entities including by way of grant
of privileges, licences, mining rights, natural resources such as spectrum etc. against
payment of consideration in the form of fee, royalty etc. are taxable under GST.
Tax is required to be paid by the business entities on such services under reverse
charge.

57 57
Amendment - 2
Individual donors provide financial help or any other support in the form of donation
or gift to institutions such as religious institutions, charitable organisations, schools,
hospitals, orphanages, old age homes etc. The recipient institutions place a name
plate or similar such acknowledgement in their premises to express the gratitude.
When the name of the donor is displayed in recipient institution premises, in such
a manner, which can be said to be an expression of gratitude and public recognition
of donor’s act of philanthropy and is not aimed at giving publicity to the donor in
such manner that it would be an advertising or promotion of his business, then it
can be said that there is no supply of service for a consideration (in the form of
donation). There is no obligation (quid pro quo) on part of recipient of the
donation or gift to do anything (supply a service). Therefore, there is no GST
liability on such consideration.
Some examples of cases where there would be no taxable supply are as

follows:-
(i) “Good wishes from Mr. Rajesh” printed underneath a digital blackboard
donated by Mr. Rajesh to a charitable Yoga institution.
(ii) “Donated by Smt. Malati Devi in the memory of her father” written on the
door or floor of a room or any part of a temple complex which was constructed
from such donation.
In each of these examples, it may be noticed that there is no reference or mention

of any business activity of the donor which otherwise would have got advertised.
Thus, where all the three conditions are satisfied namely the gift or donation is
made to a charitable organization, the payment has the character of gift or
donation and the purpose is philanthropic (i.e., it leads to no commercial gain) and
not advertisement, GST is not leviable. [Circular No. 116/35/2019 GST dated
11.10.2019]
58 58
Chapter - 7
Valuation of supply
Transaction value means the price actually paid or payable for the said supply
Transaction Value = Assessable Value
(If following 2 conditions are satisfied)
 Buyer and supplier are not related party.

+
 Price is the sole consideration for the supply.
Value for GST liability = 15(1)

+ 15(2)
_ 15(3)
XXX
Computation of value of supply
Particulars Amount (₹)

Price actually paid or payable for said supply u/s 15(1) XXX
Add: Inclusions u/s 15(2)
 Any taxes, taxes, cess, fees and charges which are not XXX
subsumed under GST Laws. (Note-1)
 Any amount that the supplier is liable to pay but XXX
incurred/met by the recipient. (Note-2)
 Incidental expenditure. (Note-3) XXX
 Interest or late fees or penalty for delayed payment. XXX
(Note-4)
 Subsidies directly linked to the price except Govt. subsidy XXX
value after adjustment u/s 15(2). (Note-5)
59 59
Value after adjustment u/s 15(2) XXX
Less :
Exclusions u/s 15(3)
 Pre-supply discount XXX
 Post-supply discount subject to condition XXX
Value for GST Liability XXX
Note-1: Taxes not subsumed under GST

Examples:
 Import duty
 Anti-dumping duty
 Safeguard duty
 Other custom duty
 Professional tax
 Toll tax
 Property tax
 Stamp duty
 Electrical duty
 Excise duty on tobacco etc…….
Note-2: Selling commission, Cost of transportation, Cost of insurance
Note-3: packing expense, special packing exp., commission, inspection charges,

warranty charges, cost of transportation, and cost of insurance
Note-4: Price actually paid = 50,000

Credit period = 3 months
Interest on late payment = 10% p.a.
Delayed period = 2 months
Interest (50,000 x 10/100 x 2/12) 833.33
60 60
Value for GST (50,000 + 833.33) = 50,833
Note-5: Price charged for supply = 80,000

Above price after giving the effect of following 2 items:
 Subsidy from private trust = 10,000
 Subsidy from Central Govt. = 15,000
Value for supply = 90,000
80,000
Already adjusted Silent Not adjusted
Subsidy minus Subsidy minus Subsidy minus
• Govt. subsidy= No treatment • Govt. subsidy= Subtract (-)

• Other than govt. = Add back • Other than govt. = No treatment
CRUX
Section 15(3)
 Pre-supply discount
Example:
Contracted Price/List price = 1,00,000
61 61
Discount = 50%
Value = ?
Value (1, 00,000 – 50%) = 50,000
Post-supply discount
Post supply discount shall be excluded from the value if following two
conditions are satisfied:
 Established in the agreement & linked with relevant invoice +
 ITC attributed to discount have been reversed by recipient
Rule 35: Value of supply inclusive of GST

Where the value of supply is inclusive of GST, the tax amount shall be determined
in the following manner:-
Tax Amount = Value inclusive of Taxes X GST rate
100 + GST rate
Value of GST = Value inclusive of Taxes X 100
100 + GST rate
OR
= Value inclusive of GST – GST
Example:
Contracted price = 2, 06,000
(Inclusive of GST @18%)
Value = 1, 74,576.27
GST = 31,423.73
Example:
Seem Ltd. Had made a supply of ₹ 11,50,000 to Reema Ltd. Following items are
not adjusted
1) Tax levied by Govt. = 30,000
2) CGST & SGST = 35,000
3) Packing charges = 10,000

62 62
4) Interest on delayed payment = 35,000

Compute value for supply?
Solution: 11, 50,000 + 30,000 + 10,000 + 35,000 = 12, 25,000
As per ICSI [for exams] As per ICAI [Alt – 2]

Transaction value 11, 50,000 Transaction value 11, 50,000
+ M.T 30,000 + M.T 30,000
+ Packing charges 10,000 + Packing charges 10,000
+ GST - + GST -
+ Interest 35,000 + Interest -
Value of supply 12,25,000 Value of supply 11, 90,000
Credit note issued 35,000
Example: Contracted price (Incl. of GST) = 11, 80,000

GST rate = 18%
Following items are not included in contracted price 
 Cost of transportation = 25,000
 Cost of packing = 10,000
 Commission = 5,000
 Installation Charges = 10,000
Solution:
As per ICSI [for exams] As per ICAI [Alt – 2]

Transaction value 11, 80,000 Transaction value (Note 1) 10,00,000
+ Cost of transportation 25,000 + Cost of transportation 25,000
+ Cost of packing 10,000 + Cost of packing 10,000
+ Commission 5,000 + Commission 5,000
+ Installation Charges 10,000 + Installation Charges 10,000
Value of supply 12,30,000 Value of supply (exclusive 10,50,000
(inclusive of GST) of GST)
Value of supply 10, 42,373
(exclusive of GST)

63 63
(12, 30,000 X 100/ 118)

Note 1: Transaction value = 11, 80,000 X 100 / 118
= 10, 00,000
Section 15(4)
If value cannot be determined as per section 15(1), then value shall be determined
in such manner as may be prescribed (Rule 27 to Rule 31)
 Rule 27: value of supply of goods / services where consideration is not

wholly in money.
 Rule 28: value of supply of goods / services between related person or
deemed distinct person.
 Rule 29: value of supply of goods made or received through an agent
 Rule 30: value of supply of goods / services on cost basis.
 Rule 31: best judgement assessment.
Rule 27: Value of supply of goods / services where consideration is

not wholly in money
Applicability: Partly money or partly non-money or wholly non-money.

Value of supply shall be:
1) Open market value of such supplies (OMV)
2) If OMV is not available then:
Money Value = XXX
+ Money value of in kind = XXX
Consideration
XXX
3) If value not determined under point 1 & 2 then, value of supply of like kind a
quality
4) If value not determined under point 1, 2 & 3 then , refer rule No. 30 & 31
in that order

64 64
Rule 28: value of supply of goods / services between related person or deemed
distinct person
Applicability: Supply between related person or deemed distinct person.

1) Open market value of such supplies (OMV)
2) If value not determined under point 1 & 2 then, value of supply of like kind
and quality
3) If value not determined under point 1, 2 & 3 then , refer rule No. 30 & 31 in
that order
Rule 29: Value of supply of goods made or received through an Agent
Applicability: Principal  Agent

Agent  Principal
1. Open Market Value or 90% of price charged by recipient
Option  whichever is less
2. If value not determined under point 1 then , Refer rule No. 30 & 31 in that
order
Rule 30: value of supply of goods / services on cost basis
If value not determined under Rule- 27, 28, 29 then value shall be:-
110% of cost of production
“Or”
Cost of manufacturing
“Or”
Cost of acquisition
“Or”
Cost of provision of service

65 65
Rule 31: Best Judgement Assessment / Residuary Method

If value cannot be determined under Rule No. 27 to 30, then value shall be
determined by department, using reasonable means.
Rule 31A: Valuation in case of Lottery, betting, gambling & horse races
The value of supply of lottery shall be deemed to be

 100 / 128 of the higher of following
 face value of ticket or
 the price as notified in the Official Gazette by The Organizing State.
Explanation: – For the purposes of this sub-rule, the expression-
“Organizing State” has the same meaning as assigned to it in rule 2 (1) (f) of the Lotteries
(Regulation) Rules, 2010.
[i.e., the SG which conducts the lottery in his own-territory or sells its tickets in the territory of
any other state.]
Note: GST Rate on lottery has been changed- now, lottery is subject to a uniform rate of
28% (replacing earlier rates- 12% on Lottery run by SG and 12% on Lottery Authorized by SG).
Consequent to above change, Rule 31-A (dealing with valuation of lottery) has been amended to
remove separate existing provisions relating to valuation of lottery.
Note: The value of supply of actionable claim in the form of chance to win in
betting, gambling or horse racing in a race club shall be 100% of the face
value of the bet or the amount paid into the totalisator
Rule 32A: Value of supply in cases where Kerala Flood Cess is applicable.
Value of supply in cases where Kerala Flood Cess is applicable.- The value of
supply of goods or services or both on which Kerala Flood Cess is levied under
clause 14 of the Kerala Finance Bill, 2019 shall be deemed to be the value
determined in terms of section 15 of the Act, but shall not include the said
cess.

66 66
Summary diagram of Valuation
Section 15
15(1) 15(2) 15(3) 15(4) 15(5)
Transaction value Addition in T.V. Deletion in T.V. If value not Special Provision
determined u/s 15(1)
• If seller and buyer:

not RP Discount
5 points Rules Rule 32
+ (Pre – Post)
• •Price is sole consi.
27 28 29 30 31
• OMV • OMV • OMV Best

Cost x
• + MV • No MV “or” judgement
110%
+ Kind value 90% assessment
less
• Similar • Similar
Value by
supply supply
Department
value value
• Rule 30 • Rule 30 • Rule 30

• Rule 31 • Rule 31 • Rule 31

67 67
Chapter- 8
Input Tax Credit
Input Tax Credit
Raw material CGST + SGST

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

68 68
INPUT TAX
Govt. ?
Seller
Burden in hands of?
Buyer
burden, ITC |
 Eligible Person: Registered person other than Person covered u/s 10.
 Purpose: In the course “Or” FOB
After above discussion such registered person shall comply all the below mentioned
conditions :-
(Recipient can avail ITC if he satisfies all the following conditions-)
 He [Receiver] is in the possession of tax invoice “or” Debit note, as the

case may be
 He [Receiver] has received the goods/services
 Tax charged in respect of such supply has been actually paid to Govt [by
Supplier]
 He [Receiver] has furnished the Return u/s 39(GSTR-3)
After satisfaction of all above conditions recipient can book/ avail ITC.

69 69
CRUX:
Person
Registered Person Unregistered Person
Under section 10 Other than section 10
No question of ITC No question of ITC

In the course or FOB Not in the course or FOB
Check: 4 conditions No question of ITC
All conditions are If any one condition is

satisfied not satisfied
Check: Case coverage u/s 17(5) No question of ITC
Yes No
No question of ITC ITC availed Buyer govt. |
Note: The diagram is subject to Rule 36(4)
Important Points:
1) Availability of ITC to recipient has been dependent on the payment of tax

by supplier. If the recipient fails to pay the amount of supply along with the
tax payable within 180 days from the date of invoice , the recipient will be
liable to pay along with output tax liability , an amount equal to ITC with
interest.
2) Where the goods against an invoice are received in lots or instalments, the
registered shall be entitled to take credit upon receipt of the last lot or
instalment.
3) Where the registered person has claimed depreciaton on the tax component
of the cost of capital goods & plant and machinery under the provision of
70 70
Income Tax Act, 1961. The ITC on the sais tax component shall not be
allowed.
Example:
Cost of Plant & Machinery = 4,00,0000

GST @18% = 72,000
Total 4,72,000
4,00,000 72,0000
Claim depreciation u/s 32 of

Income Tax Act If depreciation If ITC claimed, then
claimed, then No ITC No depreciation
My Opinion: claiming ITC is more beneficial
Time limit for claiming ITC as follows :
 Due date of GSTR-3/ 3B for the month of September following the end of
financial year
“OR”
 Actual date of furnishing the annual return.
Whichever is earlier
Example: Invoice related to F.Y 19-20, what will be the last date for claiming
ITC
CASE-I: Annual return furnishing date = 2/12/2020
CASE-II: Annual return furnishing date = 8/9/2020
Solution: CASE-I CASE-II
20/10/20 20/10/20
Earlier Earlier
2/12/20 8/9/20

71 71
Amendment in ITC utilisation

1/07/2017 to 31/1/2019
ITC GST Liability
IGST IGST
CGST CGST
UTGST UTGST
Problem
credit USE Payment

credit use |
Meaning: Assume, IGST payment , for IGST payment we can use:-
• IGST Credit
• CGST Credit use problem
• SGST Credit
Till date: Govt. order
IGST / CGST / SGST
Now: Govt. amended the law and introduced new Section 49A
1st order= IGST
Now Problem arise
CGST & SGST GST
Govt. added proviso in section 49(5)

72 72
II-Order = CGST
III-Order = SGST
New picture amendment = CGST Amendment Act
Section Order/ Rank Credit GST liability

preference
49A Ist IGST I-IGST
II-CGST
III-SGST
Proviso of 49(5) IInd CGST I-CGST
II-IGST
Proviso of 49(5) IIIrd SGST I-SGST
II-IGST
Now Problem arise
amendment Order OR” Manner then?, Act

|
Govt. inserted new Section 49B and give power to GST council for
change by notification.
Govt. added proviso in section 49(5)
Now, picture after change (notification issued)
Order Credit GST liability

I IGST I-IGST
II-CGST “or” SGST (as desired)
II CGST I-CGST
II-IGST
III SGST I-SGST
II-IGST

73 73
CRUX of ITC Utilisation

ITC Utilisation
w.e.f. 1/07/17 w.e.f 1/02/19 w.e.f 1/04/19

to to to
31/01/2019 31/03/2019 till date
Order ITC GST Order ITC GST Order ITC GST

IGST IGST I IGST IGST I IGST IGST (1st)
CGST CGST CGST or SGST
SGST SGST (in any manner)
CGST CGST II CGST CGST II CGST CGST
IGST IGST IGST
SGST SGST III SGST SGST III SGST SGST
IGST IGST IGST
Please keep in mind
IGST , CGST & last SGST |
Example of ITC Utilisation
ITC GST liablity  I-Adjustment II-Adj. III-Adj.
IGST 40,000 60,000 40,000 15,000 5,000
CGST 35,000 20,000 - 20,000 -
SGST 35,000 20,000 - - 2,000
AMENDMENTS IN ITC: [RULE – 36 OF CGST RULES]
Restriction on availment of ITC – ITC in respect of invoices/ debit notes not

uploaded by Suppliers in GSTR-1 further restricted from 20% to 10% [Sec
36(4) (EARLIER inserted on 9th Oct, 2019)- now amended w.e.f. 1st Jan,
2020]

74 74
Latest Amendment [for Applicability in June 2021 wait for ICSI Supplement but for Dec 2021 100% applicable]
In Rule 36 (4), with effect from the 1st day of January, 2021,-
(a) for the word “uploaded”, at both the places where it occurs, the word
“furnished” shall be substituted; (b) after the words, brackets and figures
“by the suppliers under sub-section (1) of section 37”, at both the places
where they occur, the words, letters and figure “in FORM GSTR-1 or using the
invoice furnishing facility” shall be inserted; (c) for the figures and words “10
per cent.”, the figure and words “5 per cent.” shall be substituted.
Section 17 : Apportionment of Credit or Blockage of Credit
Personal purpose No
Input used method
Business purpose Yes
Exempted supply* No
Input used for
Taxable supply Yes
*Exempted supply (includes Zero Rated Supply)

• RCM case
• Security transaction
• Sale of land/ building
• Interest or discount
Banking Company
Option
ITC claimed on actual basis Total ITC = XXX

( Exempted supply = NO) - 50% Of ITC = XXX
( Taxable supply = YES) Eligible ITC = XXX
(Notional Basis)
Section 17(5): Blocked ITC

75 75
No ITC in the following cases:
1) Motor vehicles for transportation of persons having approved seating

capacity of not more than thirteen persons (including the driver), vessels
and aircraft, except when they are used for making the following taxable
supplies, namely:—:
i. Further supply of motor vehicle, vessel & aircraft
ii. Transportation of passengers
iii. Transportation of goods [Related to Vessel & Aircraft]
iv. Imparting training on motor vehicle, vessel or aircraft
Except above 4 cases No ITC in case of motor vehicle/ Vessel/ Aircraft
2) Services related to Motor vehicle/ Vessel/ Aircraft
covered under
ITC allowed
specified cases
Motor vehicle/ Vessel/ Aircraft
Not covered under Blocked ITC

specified cases (No ITC)
Note: [ITC ALLOWED also in below mentioned case)

where received by a taxable person engaged—
(I) in the manufacture of such motor vehicles, vessels or aircraft; or
(II) in the supply of general insurance services in respect of such
motor vehicles, vessels or aircraft insured by him
3) Food and beverages, outdoor catering , beauty treatment, health services,
cosmetic & plastic surgery, leasing, renting or hiring of motor vehicles, vessels
or aircraft referred to in clause (a) or clause (aa) except when used for the
purposes specified therein, life insurance and health insurance.
EXCEPT: inward supply & outward supply is same then ITC allowed.
4) Membership of a club, health & fitness centre.

76 76
5) Travel benefits extended to employees on vacation such as leave travel

concession
Provided that the input tax credit in respect of such goods or services or
both shall be available, where it is obligatory for an employer to provide
the same to its employees under any law for the time being in force
6) Work contract service related to immovable property (other than plant &
machinery) except inward & outward supply is same.
7) Goods or services received by taxable person for construction of immovable
property (other than plant & machinery) on his own amount.
8) Goods or services received “NR” except import of goods.
9) Goods or services used for personal consumption.
10) Goods lost / stolen / destroyed / written off or disposed by way of gift or
free sample.
11) Any tax paid in accordance with the provision of section 74/129 and 130.
ITC
Section 18 Availability of credit in special circumstances
(a) Section 18(1)(a)
Unregistered person Registered person
Liable for registration
Stock purchased & Stock purchased &

consumed not consumed
ITC allowed
GST but Balance stock

ITC | ITC allowed on balance stock
(b)

77 77
Unregistered person Registered person
Voluntary registration
Stock purchased & Stock purchased &

consumed not consumed
ITC allowed
GST but Balance stock

ITC | ITC allowed on balance stock
(c)
Composition Scheme Normal Scheme
Conversion date
Input purchased & Input purchased but

supplied balance in stock
NO ITC ITC allowed
ITC allowed on Capital goods also but after reduction of prescribed %age
ITC on capital goods = XXX

-5% each quarter or part = (XXX)
ITC allowed = XXX
(d)
Exempted supply Taxable supply
Taxability date

NO ITC ITC allowed
ITC allowed on Capital goods also but after reduction of prescribed %age [5%
each quarter or part).

78 78
Section 18(2)
Time limit: Upto 1 year from the date of issuance of Tax invoice.
Section 18(3)
In case of amalgamation, merger, demerger, succession of companies, Unutilised ITC

can be carried forward to amalgamated, resulting co.
In the case of demerger, ITC will be apportioned in the ratio of the value of
assets of the new units as specified in the demerger scheme. Here, “value of
assets” means the value of the entire assets of the business irrespective of
whether ITC has been availed thereon or not.

79 79
Section 18(4)
(a)
Normal Scheme Composite Scheme
Conversion date

ITC allowed ITC not allowed
ITC reversed on Capital goods also but after reduction of prescribed %age
ITC on capital goods = XXX

-5% each quarter or part = (XXX)
ITC not allowed = XXX
(b)
Taxable supply Exempted supply
Exemption date

ITC allowed ITC not allowed
ITC reversed on Capital goods also but after reduction of prescribed %age [5%
each quarter or part].
Section 18(6)
In case of supply of capital goods or plant & machinery, on which ITC has been
taken, the registered person shall pay an amount equal to ITC taken on said capital
goods or plant & machinery reduced by such percentage (i.e. 5%) or the tax on
transaction value of such capital goods, plant & machinery determined under
section 15, WHICHEVER IS HIGHER.

80 80
Chapter - 9
Accounts & Records
Eligible Assessee
Assessee
Registered person Unregistered person
Owner of warehouse or Transporter
Types of books of account
• production / manufacture of goods • Consigner

• inward / outward supply • Consignee
• balance stock of goods • other relevant, as may be
• ITC availed prescribed
• output tax paid or payable
• others, as may be prescribed
 Location of maintenance of books of accounts
At his principle place of supply (mentioned in certificate of registration)
 Mode
Manual or electronic (at the option of registered person)
 Audit under GST
If aggregate turnover > 2 crores  by CA/CMA
[For FY 2018-19 & FY 2019-20 : GST Audit required if ATO> 5 crores]
Amendment : Every registered person except any assessee of C.G or S.G or

local authority whose accounts are subject to audit by CAG.

81 81
Analysis of Amendment [Proviso to Rule 80(3) substituted– N/N

79/2020-CT w.e.f. 15th Oct, 2020]
1. Registered Person whose ATO upto 2 crores = Annual Return Filing

Has been made Optional (for FY 2017-18, 2018-19 and 2019-20)
and GST Audit and furnishing of copy of Audited Annual Accounts
& Reconciliation Statement Not Required
2. Registered Person whose ATO > 2 crores but upto 5 crores =

Annual Return Filing is Compulsory and GST Audit and furnishing
of copy of Audited Annual Accounts & Reconciliation Statement
Not Required for FY 2018-19 and 2019-20
3. Registered Person whose ATO > 5 crores = Annual Return Filing is

Compulsory and GST Audit and furnishing of copy of Audited
Annual Accounts & Reconciliation Statement Required
Amendment: Clarification about the calculation for FY (17-18)
1 April 2017 1 July 2018 31 March 2018

Birth of GST
 For Audit Turnover  1/4/17 - 1/7/18 + 1/7/18 - 31/3/18
 For Reconciliation: Turnover  only 1/7/18 - 31/3/18
 Power of Commissioner: Commissioner or above than Commissioner (officer)

may notify class of person for :
Additional books of A/c Relaxation in books of A/c

Sec. 35 (sub-section 3) Sec. 35 (sub-section 4)
 Penal Provision: If any default arise u/s 35(1) or 35(2) then punishment u/s 73
or 74

82 82
 Time limit for maintaining books of A/c: 72 months from the date of annual
GST return
Eg. F.Y 19-20 = due date of annual return = 31/12/20
+ 6 years
31/12/26
 Who is party of an appeal / revision: 1 year after disposal
“or”
72 months (6 years) from due date of annual GST return.
“Whichever is later”
Example : a) 30/6/2026 + 1 year  30/6/2027
31/12/2020 + 6 years  31/12/2026
b) 30/6/2024 + 1 year  30/6/2025
31/12/2020 + 6 years  31/12/2026

83 83
Chapter - 10
Audit Under GST
Audit General Audit Special Audit

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

84 84
Chapter - 11
Compensation Act, 2017

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

85 85
10) Growth rate is 14% p.a.
Example: If the base year revenue for 2015-16 for a concerned State, calculated as per
section 5 is one hundred rupees, then the projected revenue for financial year 2020-21
5
shall be as follows – Projected Revenue for 2020-21=100 (1+14/100)
11) Compensation cess will be applicable on goods or services or both
12) All the tax payers under GST except section 10 person will collect & remit
the cess to central govt.
13) ITC shall be allowed to the assesse but permitted only for payment of cess.
14) Rates (Maximum)
Pan-masala = 204%
Cigarattes = 290%
Cars = 3% - 15%

86 86
Chapter - 12
Composition Levy
What is the difference between Composition scheme & Normal scheme?
Normal Scheme (NS) Composition Scheme (CS)

1 Covered u/s 9 of CGST Act Covered u/s 10 & 10(2A) of CGST Act
2 ITC available on inward supply. ITC not available on inward supply.

Eg. Eg.
Normal Supply Composite Supply
GST paid GST paid

Mr. Y to Mr. Y cannot
claim ITC claim ITC
Mr. X Mr. Y Mr. X Mr. Y
Mr. Z Mr. Z
3 GST payable = Output tax TAX payable =Turnover X concessional

= (-) ITC rate
Net GST payable = XXX = (-) ITC
TAX payable = XXX
Eg. X GST (1200) Y (NS) Eg. X GST (1200) Y (CS)

GST (1500) GST (1500)
Z Z
Net GST = 1500-1200 = 300 Net GST = 1500-1200 = 1500

87 87
4 Reg. person can make intrastate Composite taxable person cannot make
supply as well as interstate supply. interstate supply.
CRUX: Purchase …
Supply only intra …
Example: Example:
X (Delhi) A (Delhi) X (Delhi) A (Delhi)
Y (Delhi) Y (Delhi)
Z (Bihar) B (Bihar) Z (Bihar) B (Bihar)

5 Any Reg. person can opt normal Only specified Reg. person can opt
scheme. composite scheme.
(Aggregate turnover = 1.5 crore / 75
lacs /50 lacs )
6 Return under GST

File 3 monthly returns File quarterly return
+ +
1 Annual return 1 annual return
Total= 37 returns Total = 5 returns
Now, 2 monthly returns & 1 annual Now, 1 annual return

return (Total 25 return). +
GSTR-1 , GSTR-3B , GSTR-9 1 annual return
Total 2 returns
GSTR-4 , GSTR-9A
7 Higher tax rates Lower tax rates

(5%, 12%, 18%, 28%) (1%, 1%, 5%, 6%)
88 88
8 Detailed books of A/c Less books of A/c

9 Classification of goods is required No classification is required
10 Audit is required if aggregate No question of Audit under GST

turnover > 2 crore [For 18-19 & 19-20
A.T.O is more than 5 Crore]
11 Burden of GST can be shifted on Concessional Tax cannot be collected

consumer from consumer
12 Normal registered person will issue Composite dealer will issue Bill of
tax invoice Supply
Section 10:
1. Normal tax procedure are not practical or cost efficient to small suppliers for
such small suppliers GST law provides for composition levy scheme under GST.
2. Such scheme are devised for procedural case for small suppliers &
administrative convenience
3. Composition scheme is provided for simple taxation system. (Aggregate
turnover is taxed at flat rate therefore this system is known as Flat Rate
Taxation System)
4. Such scheme is optional :
 Scheme is available only when it is opted.
 Benefit of this scheme cannot be claimed unless the option is exercised
as per the prescribed procedure = Rule 3.
 Option may be exercised at the time of registration or past registration.
 Scheme has no lock in period i.e. supplier may opt out this scheme at
anytime.
89 89
Section 10: Eligibility Limit & Eligible Assessee

Eligible Assessee: Registered person
Eligibility Limit: depends on normal state or special category state.
CASE 1: Normal state (includes Assam, J&K, and Himachal pradesh)

Special category state* (8 notified states)
Eligible
Preceding Financial year Current Financial year
Normal state • Aggregate turnover= upto 150 lakh upto 150 lakh more than 150 lakh
Special cat. state• Aggregate turnover= upto 75 lakh upto 75 lakh more than 75 lakh
• No GST liability • GST payable

• pay concessional
rate of tax
• No ITC • ITC allowed
• burden of tax • burden of tax on
cannot be shifted customers pocket
*8 Special category states
Himachal
Pradesh
1. Uttarakhand
Himachal Pradesh
2. Arunachal Pradesh
3. Meghalaya
4. Nagaland
5. Manipur
6. Mizoram
7. Sikkim
8. Tripura

90 90
Important Note:
1) Section 10 overruled section 9(1)
Means
Normal tax on outward supply pay ,
Outward supply प concessional tax pay |
In other words: Section 10 complete GST ko overrule Except 9(3) & 9(4).
Agar inward supply RCM covered RCM GST even if assesse
ne composition scheme opt |
Example:
CASE 1: Normal Scheme
Mr. A Mr. D
GST charged on both

outward supply.
Miss C
Mr. B Miss E

91 91
CASE 2: Composite Scheme
Mr. A Mr. P
Concessional tax rate

to apply
Miss C
Mr. B Miss Q
Amendments
Particulars Old law Amended law

1) Change is Turnover limit
 Normal state 100 lakhs 150 lakhs
 Special category state 75 lakhs 75 lakhs
2) Special category state 9 states 8 states (Assam shifted to
normal state)
Aggregate turnover: section 2(6)
The law says that “aggregate turnover” means the aggregate value of all
taxable supplies (excluding the value of inward supplies on which tax is
payable by a person on reverse charge basis), exempt supplies, exports of
goods or services or both and inter-state supplies of persons having the same

92 92
Permanent Account Number, to be computed on an all-India basis but excludes

Central tax, State tax, Union territory tax, Integrated tax and cess
Explanation 1
For the purposes of computing AGGREGATE TURNOVER of a person for

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

 Rs 5,00,000,
93 93
Whichever is higher
Explanation: For the purposes of second proviso, the value of EXEMPT SUPPLY
of services provided by way of extending deposits, loans or advances in so far
as the consideration is represented by way of interest or discount shall not
be taken into account for determining the value of TURNOVER in a State or
UT
Note: limit of 10% or 5 lakh, whichever is higher will be in addition to

exempt interest/discount
The registered person shall be eligible to opt under sub-section (1), if—
a) save as otherwise provided in sub-section (1), he is not engaged in the

supply of SERVICES;
b) he is not engaged in making any supply of GOODS which are not leviable
to tax under this Act;
c) he is not engaged in making any inter-State outward supplies of GOODS;
d) he is not engaged in making any supply of GOODS through an
electronic commerce operator who is required to collect tax at source
under section 52; and
e) he is not A MANUFACTURER* of such GOODS as may be notified by
the Government* on the recommendations of the Council; and
N/N 8/2017-CT: 4 Goods notified
1) Tobacco and Manufactured tobacco substitutes

2) Ice cream and other edible ice, whether or not containing cocoa
3) Pan Masala
4) Aerated Water
f) he is neither a casual TP nor a NRTP.
Provided that , where more than one registered person are having the same
Permanent Account Number issued under the Income tax Act, 1961, the
registered person shall not be eligible to opt for the scheme under sub-section
(1) unless all such registered persons opt to pay tax under that sub-section.

94 94
Example
Mr. A
Aggregate turnover= 90 lakh Eligible for scheme

may provide service upto
= 90 lakh X 10% = 9 lakh

Higher 9 lakh ”or”
= 5 lakh
Example
Mr. X
Delhi Haryana Punjab
TO: 40 lakh TO: 70 lakh TO: 30 lakh
Aggregate turnover = 140 lakh

Eligible for Composite Scheme
Delhi Punjab Haryana
In C.Y assessee wants

to deal in: Goods Goods Goods & Services
Eligible limit in C.Y subject to 150 lakh subject to 150 lakh subject to 150 lakh
but service of max.
5 lakh allowed
Higher of
= 30 lakh X 10% = 3 lakh
”or”
= 5 lakh

95 95
NOTE: Composite scheme Branches & withdraw

withdraw |
Now, Composition Scheme Eligible for Supplier of Services also

[section 10(2A)]
(2A) Notwithstanding anything to the contrary contained in this Act but
subject to the provisions of section 9 (3) and (4) (i.e., Supplies under RCM),
 a registered person, not eligible to opt to pay tax under sub-section (1)
and sub-section (2),
 whose AGGREGATE TURNOVER in the preceding financial year did not
exceed Rs 50 lakhs, may opt to pay, in lieu of the tax payable by him
under Section 9(1),
 AN AMOUNT of tax calculated at such rate as may be prescribed, but
not exceeding 3% of the turnover in State or turnover in Union
territory,
Eligible
Aggregate turnover= upto 50 lakh Upto 50 lakh more than 50 lakh
• No GST liability • GST payable

• pay concessional
rate of tax
• No ITC • ITC allowed
• burden of tax • burden of tax on
cannot be shifted customers pocket
a) he is not engaged in making any supply of goods or services which are not
leviable to tax under this Act;
b) he is not engaged in making any inter-State outward supplies of goods or
services;

96 96
c) he is not engaged in making any supply of goods or services through an

electronic commerce operator who is required to collect tax at source under
section 52;
d) he is not a manufacturer* of such goods or supplier of such services as may
be notified by the Government* on the recommendations of the Council;
and
e) he is neither a casual TP nor a NRTP;
Provided that, where more than one registered person are having the same
Permanent Account Number issued under the Income-tax Act, 1961, the
registered person shall not be eligible to opt for the scheme under sub-section
(2A) unless all such registered persons opt to pay tax under that sub-section.
Note:
Sec 10(2A) = Tax calculated at such rates as prescribed (but not exceeding
3% CGST) Thus,
 Maximum C/Tax rate = @6% (3% CGST + 3% SGST)

 Actual C/Tax rate = As prescribed = as prescribed by Rule * Rule 7
(prescribing C/Tax Rates) has been recently amended to provide for
C/Tax rates of such suppliers.
 C/Tax rate = 6% of TO in the State/ UT (3% CGST + 3% SGST)
RULE 7: Rate of Composition Levy / Concessional Rate

Particulars CGST SGST Total
Manufacturer of Goods 0.5% 0.5% 1% of TO
Trader of Goods 0.5% 0.5% 1% of TS
Restaurant Services 2.5% 2.5% 5% of TO
Services provided with above 0.5% 0.5% 1% of TO
category
97 97
Only supply of services 3% 3% 6% of TS
Note: In simple words, RP opting for Sec 10(2A) shall be liable to pay C/Tax
on TO in the State/UT (such TO shall include non-exempt as well as exempt
supplies). However, exempt service by way of income in form of
interest/discount will remain excludible in view of Explanation 2 to Sec 10.
Other Conditions & restrictions for composition scheme

Section 10(2) & Rule 5:
1) Supplier of non taxable goods under GST is not eligible for this scheme.
2) If supplier making Inter state supply, then not eligible for this scheme.
3) Supplier can issue only Bill of supply instead of tax invoice.
4) A dealer registered under composition scheme is not required to maintain
detailed books of A/c as required by normal tax payer.
5) A composition dealer is not allowed to avail ITC of GST on inward
supply.
6) The taxable person is required to furnish only one return i.e. GSTR-4 on
a quarterly basis and one on annual return in GSTR-9A.s
Amendment: The GST council in its 32nd meeting held on 10/1/19has decided
the compliance under Composition scheme shall be simplified as now they
would need to file ONE ANNUAL RETURN , but payment of tax would remain
quarterly (along with a simple declaration). This amendment shall be effective
from 1/4/19.
CRUX
Particulars Before 1/4/19 After 1/4/19
GSTR-4 (return) Quarterly Annually
Payment Quarterly Quarterly

98 98
GSTR-9A (return) Annually Annually
7) Composition scheme is opened for all business that are associated with
same PAN.
8) Tax payer making supply of goods through on ECO is not eligible for
scheme.
9) He shall maintain the words “Composition taxable person, not eligible to
collect tax on supply” at the top of bill of supply issued by them.
10) He shall mention the word “Composition taxable person” on every notice
board or sign board.
11) Such a dealer cannot claim ITC of concessional rate paid under this
scheme.
Rule 3 & Rule 4 Availment of Composition Scheme
Option shall be effective from Option shall be effective from

Beginning of Financial year
appointed day under rule 4(1) the effective date of reg.
Availment of Composition Scheme
Fresh GST reg. Currently in Normal

Migrated Taxpayer application filed wherein scheme, subsequently
Comp. scheme opted switch to Comp. scheme
(An already existing reg. Intimation through reg.

Separate intimation required
person under old law through application itself which shall be
(before start F.Y for which
provisional reg.) opting for considered as an intimation to
comp. scheme opted
Comp. scheme pay tax u/s 10
Rule 3(1)- mentioned below Part B of Form GST REG 01 Form GST CMP-02
 Separate intimation is required

 Form GST CMP-01
 Time limit: prior to appointed day, but not later than 30 days, or such further
period as may be extended by commissioner.

99 99
NOTE: Intimation submitted post appointed day, but within 30 days/ extended
date.
 He shall not collect any tax from buyer.
 He shall issue Bill of supply instead of tax invoice.
 He shall also furnish stock details under rule 3(4).
 Form GST CMP-03
 It shall be filed within 90 days from the date on which option of CS
exercised.
RULE 3(5)
Option exercised for one State / UT = Deemed exercised for all States / UT on
PAN India basis
RULE 6
Rule 6(1)
Once opted for this scheme is valid for lifetime so long as he satisfy all the
conditions mentioned in the said sections & rules

100 100
Withdrawal from Composition Scheme
Rule 6(2)/(3)/(4)/(5)/(6)
Discretionary withdrawl
Auto withdrawl
of supplier
(may take place at Denial by Proper Officer
(may take place at
anytime in C.Y)
anytime in C.Y)
Option lapses if aggregate TO

exceeds 1.5 crore/ 75 lakh/ 50
Intimation of withdrawal shall as he has reason to believe
lakh, intimation of withdrawal
be given by supplier before that supplier was ineligible “or”
should be given by supplier
withdrawal has contravened conditions)
(within 7 days of occurrence of
such event)
• SCN: CMP-05
Form GST CMP-04 Form GST CMP-04 • Reply: CMP-06
• Order: CMP-07 (30 days)

101 101
Chapter -13
Demand & Recovery

Penalty under Demand & Recovery
S. No. Action by Tax Payer Bonafied case Malafied case

1 Tax & interest paid before No penalty 15% of tax
show cause notice
2 Tax & interest within 30 No penalty 25% of tax
days of show cause notice
3 Tax & interest paid within Higher of 10% of 50% of tax
30 days of order tax “or” ₹ 10,000
4 Tax & interest paid after Higher of 10% of 100%
30 days of order tax “or”₹ 10,000
Time limit of show cause notice & order
Show cause notice Order
Bonafied Within 2 year & 9 months Within 3 years from due date
of services from due date of annual GST return
annual return filing.
Malafied Within 4 years & 6 months Within 5 years from due date
from the dye date of annual of annual GST return
GST Return
Any amount of No Time Limit Within 1 year from date of

tax collected issue of notice
but not paid

102 102
Rule 142(1A) Notice and Order for demand of amounts payable under this Act
GST payable ascertained by PO – before issuance of SCN, that shall be

communicated to taxpayer in Form GST DRC-01A (Part A)
The proper officer shall may, before service of notice to the person chargeable
with tax, interest and penalty, under Section 73 (1) or Section 74 (1), as the
case may be, shall may communicate the details of any tax, interest and
penalty as ascertained by the said officer
Reason of Amendment:
Council Decided that such communication shall not be a mandatory

requirement. Rather, it shall be at DISCRETION of tax officer. Accordingly, Rule
142(1A) has been amended (w.e.f. 15th Oct, 2019) – therein the word ‘shall’
have been substituted with the word ‘may’.

103 103
Chapter - 14
E-Way Bill
Only in case of goods  Rule 138
1) Objectives of E-Way Bill (why introduced?)

 To control / stop practice of bogus invoice related to goods.
 To control tax evasion in country.
 For track movement of goods
2) E-Way Bill ( Mandatory)

Yes, mandatory subject to *condition.
*Condition  If value of consignment exceeds ₹ 50,000 (for less value –
optional)
Exception: In the following cases e-way bill is mandatory irrespective of value of
consignment
E-way bill
Mandatory without exemption limit
Principal Job worker
 Movement of handicraft goods

Example-1 A truck contains 3 consignment based on 3 invoices, Invoice-1 for ₹
65,000, invoice-2 for ₹ 45,000 & Invoice-1 for ₹1, 00,000. How many E-Way
Bills will be generated?
Answer: E-Way Bill will be generated for Invoice 3 & 4.
Example-2
104 104
₹ 25,000
Delhi Job Worker
Mr. VG
Mandatory e-way bill
# In case of handicraft goods same treatment of example 2 will prevail

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

105 105
Process for Unregistered Person
Enrolment via PAN & Aadhar number
2
1 Create User ID & Password Login to generate e-way bill
4 Contains QR code for fast

E-way bill with 12 digit unique
verification of movement of
goods 3 no. generated
5 E-way bill no. will be communicated by SMS and e-mail to supplier,

transporter and buyer.
5) Types of E-Way Bill

Normal e-Way Bill Bulk e-Way Bill
 Transportation of goods of one  Transportation of multiple
type / HSN Code variety of goods /multiple HSN
code
 Supported with an excel sheet
6) Cancellation of E.W.B
E.W.B once generated can be Cancellation within 24 hours.
cancelled ( after verification, no
(reason prescribed in GST portal) cancellation)
7) When is E-Way Bill not required?

 Non motorized vehicle
 Exempted goods movement / supply
 Non taxable goods (alcoholic liquor , 5 P.P)
 Jewellery & Gems, Coral etc.
 LPG gas
 Kerosin oil
 Post / parcel / mail etc.
106 106
 Currency ( not covered in goods )

 Custom control goods (port to warehouse etc.)
 Movement  o/s the definition of supply (schedule- III) [except in
the case of job worker]
 Government specified area
 Govt. department goods ( ex- defence goods)
 Empty container transportation
 Goods transported upto “dharamkaanta” etc. (upto 20 km)
8) Validity of E-Way Bill

Based on  Cargo type & distance
Normal cargo Over-dimensional Cargo / M.M.CARGO (not

overloaded) WITH SHIP
 Upto 100 km – 1 day  20 km – 1day
 Excess 100 km – 1 day  Excess 20 km – 1 day
(every 100 km or part – 1 day) (every 20 km or part – 1 day)
Example : 252 km = 3 days Example : 35 km = 2 days
(every 100
. km or part – 1 day) 42 km = 3 day .
. .
Extension
By commissioner E-Way Bill generator
In certain cases Extended by self
9) Consolidated E-Way Bill (GST-EWB-021)

107 107
Delhi
Supplier 1
Make consolidated EWB
Transporter Bihar
Supplier 2
ST2 ST3 ST4
ST1 DL
Supplier 3
Supplier 4
10) What happen in case of Multi vehicle?

Example:  Truck problem
 Transhipment case
Delhi Delhi
Laxmi Intra Inter
ISBT Chandigarh
Nagar
T-1 T-2
E-Way Bill generated Amend /update EWB with

with details of Truck-1 details of Truck-2
12 digit number
However, Movement Intra + upto 50 km

No need to generate details of Truck-1
Details of Truck-2 is necessary.

108 108
11) Rejection of E-Way Bill (other party can Reject)

Yes, within 72 hours, if not rejected then deemed to be accepted.
 Cancellation by generator
 Rejection by other than generator
12) Own master

 List of customer
 List of supplier
 List of items
 List of destination, etc.
13) Time of E-Way Bill

Before of movement of goods
Rule Particulars Relevant Form no.
R-138 Info. To be furnished prior to GST-EWB-01
commencement of movement of goods.
R-138A Documents to be carried by a person-in GST-INV-1
charge of a conveyance.
R-138C Inspection & verification of goods. GST-EWB-03
R-138D Facility for uploading information regarding GST-EWB-04
detention of vehicle
R-138 Consolidate E-Way Bill GST-EWB-02
AMENDMENTS IN EWB:
ANALYSIS:
EWB generation blocked in respect of Non-Filers
 [Non filing of 2 consecutive GSTR-1 (Sec 37) / Returns (Sec 39) ] or

109 109
 [Non filing of 2 consecutive Quarterly Tax payment Statement

(Composition Supplier)
FAQ (Frequently Asked Questions) on Blocking and Unblocking of EWB generation

facility On EWB Portal
Q. What is blocking of E-waybill (EWB) generation facility?
Ans. Blocking of EWB generation facility means disabling taxpayer from generating EWB, in
case of non-filing of 2 or more consecutive GSTR 3B Return on GST Portal, by such
taxpayer. The GSTINs of such blocked taxpayers cannot be used to generate the EWBs either
as Consignor or Consignee. e.g., taxpayers who are required to file Form GSTR-3B and have
not filed it for the month of January and February, will be blocked from EWB generation
facility form March onwards.
Q Whether recipient can generate EWB of blocked GSTINs, indicating them as supplier and
vice versa?
Ans. No, if a Taxpayer GSTIN is blocked for EWB Generation facility, that GSTIN cannot be
entered in EWB either as supplier or recipient. Thus, recipient of such blocked GSTINs cannot
generate EWB indicating such blocked GSTIN as supplier.
Q. Can transporter generate EWB in respect of Blocked GSTIN, either as supplier or as

recipient?
Ans. No, the transporter cannot generate the e-way bills in respect of such blocked
taxpayer’s GSTINs, as supplier or as recipient.
Q. How does blocking take place in the EWB system?
Ans. The GST System and EWB System are integrated and accordingly GSTIN’s of the
taxpayers who have not filed GSTR 3B return, for two or more consecutive period, will be
blocked for EWB generation.
Q. What is unblocking of E-waybill (EWB) generation facility?
Ans. Unblocking of EWB generation facility means restoring the facility of generation of
EWB, in respect of such taxpayers GSTIN (as Consignor or Consignee), in the event of filing
110 110
of the return for the default period(s), thereby reducing the default period to less than 2
consecutive tax periods. Also, the Unblocking can be done by the jurisdictional
COMMISSIONER online on the GST Portal, upon considering the manual representation
received from such taxpayer. [Proviso to Rule 138-E of CGST Rules, 2017]
Q. How does unblocking take place in e-waybill system?
Ans. In case of filing of GSTR 3B returns by taxpayers, resulting in reduction of their return
filing default period of less than two tax periods, their return filing status will be updated on
EWB Portal, and their GSTIN will be unblocked for EWB generation facility, next day. The
Unblocking can be done by the jurisdictional officer online on the GST Portal, upon
considering the manual representation received from such taxpayer.
How much time does it take to update status on EWB Portal, for generation of E- Way
Bill, after return is filed on GST Portal. -- Once the Return is filed on GST Portal, the
blocking status is removed by the system, next day.
Q. What happens to the already generated EWBs, on which goods are in transit (i.e. EWB
generated earlier pertaining to the blocked GSTINs)?
Ans. There will not be any effect/impact on the already generated e-way bills, of the blocked
GSTINs. These e-way bills are valid and can be used to move goods to the destination.
Can one update the vehicle and transporter details and extend the validity of e-way bills, if
required, for the e-way bills belonging to the blocked GSTINs? - The transporters/ taxpayers
can update the vehicle and transporter details and carry out the extension in validity period
of these e-way bills, if required.
Q. What is the effect of blocking/unblocking on the transporters?
Ans. There are two types of transporters — the Transporters who have only enrolled
themselves on EWB portal (i.e. who don’t have GSTIN) and the Transporters who are also
registered at GST portal (i.e., who have GSTIN). Transporters enrolled in EWB Portal and
who are not registered on GST portal, will not be impacted (as they are not required to file
GSTR 3B returns). If the GSTIN of the GST registered transporter is blocked, then that
GSTIN cannot be used as Consignor, Consignee or transporter, while generating EWB and
updating transporter details.

111 111
Will the EWB system block the updating of Transporter Id, if registered in GST & filing GSTR
3B return, if transporter GSTIN is blocked for EWB generation facility? - Yes, the EWB
system will block the updating of Transporter Id, if registered in GST and has not filed the
GSTR 3B Return for last two successive tax periods. However, there will not be any problem
in updating details of the enrolled TRANSPORTER ID (i.e. who don’t have GSTIN), while
generating the EWB.
Rule 138-A : Documents and devices to be carried by a person-in-charge of

a conveyance
RP covered by e-invoicing provisions – QR code can be produced for verification of PO

(instead of tax invoice)
In case, invoice is issued in the manner prescribed under Rule 48 (4), the
Quick Response (QR) code having an embedded Invoice Reference Number
(IRN) in it, may be produced electronically for verification by the proper
officer, in lieu of the physical copy of such tax invoice.

112 112
Chapter - 15
Input Service Distributor
Distribution of ITC
CGST
CGST
IGST
SGST
SGST
IGST

113 113
IGST
IGST IGST IGST always as IGST
IGST
Example:
Service (all)
CGST 50,000 A
SGST 50,000
Service benefit
Delhi Delhi
Delhi
Head Office
Service (A)
CGST 50,000 B
SGST 50,000
Delhi Registered as ISD Delhi
IGST 1,50,000
Service (all)
C
Haryana Haryana
Turnover:
A = 5,00,000, B = 3,00,000 , C = 2,00,000
Distribution of ITC:
A = CGST = 25,000 + 50,000
SGST = 25,000 + 50,000
IGST = 75,000
B = CGST = 15,000
SGST = 15,000
IGST = 45,000
C = CGST = Nil
SGST = Nil
IGST = 10,000 + 10,000 + 30,000
114 114
Chapter - 16
Place of Supply[POPOS/POPS]
Supply provide |
Need of POS
LOS
+ Same State/ UT = Intra state
POS
LOS 2 different state

+ 2 different UT = Inter state
POS 1 state & 1 UT & so on
• Without determining the POS we cannot find out nature of supply

• POS Sections = Sec 10 = SOG
Sec 11 = import / export
Sec 12 = SOS
Sec 13 =
A: Place of supply of goods other than import & export

(Section 10)
S. No. Nature of Supply Place of Supply

1 Where the supply involves Location of the goods at the time
movement of goods whether by at which, the movement of goods
the supplier or the recipient or by terminate for delivery to the
any other person recipient.
2 Where the goods are delivered to Principal place of business of such
the recipient or any person on the third party.
115 115
direction of third person by way of

transfer of title or otherwise.
3 Where there is no movement of Location of such goods at the time
goods either by supplier or of delivery to the recipient.
recipient
4 Where the goods are assembled or Place where the goods are
installed at site assembled or installed.
5 Where the goods are supplied on Place where such goods are taken
board a conveyance like a vessel, on-board the conveyance.
aircraft, train or motor vehicle
6 Where the place of supply of To be determined in the prescribed
goods cannot be determined in manner.
terms of above provision
B: Place of supply of goods imported into or exported from India

(Section 11)

1 Import Location of importer
2 Export Location outside India
C: Place of supply of service where location of supplier AND

recipient is in India (Section 12)
(i) In case of the following 12 categories of services, the place of supply is

determined with reference to a proxy; rest of the services are governed by
the default provision.

1 Immovable property related  location at which the immovable
services including accommodation property or boat or vessel is
in hotel / boat / vessel located or intended to be
116 116
located
 If located outside India:
location of the recipient.
If the immovable property or Each such state in proportion to

boat or vessel is located in more the value of services provided in
than one State each state.
2 Restaurant and catering services, Location where the services are
personal grooming, fitness, actually performed.
beauty treatment & health
service
3 Training & performance appraisal  B2B : location of such
registered person
 B2C: Location where the
services are actually performed.
4 Admission to an even or Place where the event is actually
amusement park held or where the park or the other
place is located.
5 Organisation of an event  B2B : location of such
including ancillary services & registered person
assigning of sponsorship to such  B2C : Location where the
events event is actually held
 If the event is held outside
India-Location of the recipient
If event is held in more than one Each such State in proportion to

state the value of services provided in
each state.
6 Transportation of goods including  B2B : location of such
mails or courier registered person
 B2C: Location at which such
goods are handed over for their
transportation
117 117
7 Passenger transportation  B2B : location of such

registered person
 B2C: Place where the passenger
embark on the conveyance for a
continuous journey
8 Services on board a conveyance Location of the first scheduled
point of departure of that
conveyance for the journey.
9 Banking & other financial  Location of the recipient of
services including stock broking services in the records of the
supplier
 Location of the supplier of
services if the location of the
recipient of services is not
available
10 Insurance services  B2B : location of such
registered person
 B2C: Location of the recipient
of services in the records of the
supplier
11 Advertisement services to the  Each of State / Union Territory
Govt. where the advertisement is
broadcasted / displayed / run /
disseminated
 Proportionate value in the case
of multiple States.
12 Telecommunication services  Services involving fixed line,
leased & internet leased circuit,
dish antenna etc: Location of
such fixed equipment.
 Post-paid mobile/ internet
services: Location of billing
118 118
address of the recipient & if the

same is not available: location of
supplier.
 Pre-paid mobile/ internet/ DTH
service provider
 Through selling agent/ re-seller/
distributor : Address of such
selling agent/ re-seller/
distributor in the records of
supplier at the time of supply
 By any person to final
subscriber: Location where pre-
payment is received or place of
sale of vouchers.
 When payment made through
electronic mode: Location of
recipient in records of supplier.
 Other cases: Address of the
recipient in the records of the
supplier & if the same is not
available, location of supplier.
If the leased circuit is installed Each such State in proportion to

in more than one state the value of services provided in
each State

119 119
(ii) For the rest of the services other than those specified above,
the default provision has been prescribed as under:
Default rule for the services other than the 12 specified services
S. No. Description of Supply Place of Supply
1 B2B Location of such registered person.
2 B2C  Where the address on record exist:
Location of the recipient
 Other cases: Location of the supplier
of services.
D: Place of supply of services where location of supplier OR

location of recipient is outside India (Section 13)
(i) In respect of the followings category of service, the supply is

determined with reference to a proxy; rest of the services are governed by
the default provision.
S. No. Nature of Service Place of Service

1 Services supplied in respect of Location where the services are actually
goods which are required to be performed.
made physically available.
Services supplied in respect of Location where the goods are situated

goods but from a remote at the time of supply of services.
location by way of electronic
means.
Above provisions are not applicable in case of goods that are temporarily
imported into India for repairs & exported after repairs without being put
to any other use in India
2 Services which require the Location where the services are actually
120 120
physical presence of recipient or performed.

the person acting on his behalf
with the supplier of services.
3 Services supplied directly in Place where the immovable property is
relation to an immovable located or intended to be located.
property including
accommodation in hotel, boat,
and vessel.
4 Admission to or organisation of Place where the event is actually held.
an event
If the above services are supplied at more than one location i.e.
i. Goods & individual related
ii. Immovable property-related
iii. Event related
At more than one location, Location: territory in the taxable
including a location in the territory
taxable territory
In more than one state Each such State in proportion to the
value of services provided in each state
5 Services supplied by a banking Location of the supplier of services.
company, or a financial
institution, or a NBFC to
account holders.
Intermediary services
Services consisting of hiring of

means of transport, including,
yachts but excluding aircrafts &
vessels, up to a period of one
month.
6 Transportation of goods, other Place of destination of such goods.
121 121
than by way of mail or courier.

7 Passenger transportation. Place where the passenger embarks on
the conveyance for a continuous
journey.
8 Services provided on-board a First scheduled point of departure of
conveyance. that conveyance for the journey.
9 Online information & database Location of recipient of services.
access or retrieval services.
(ii) For the rest of the services other than those specified above, a default
provision has been prescribed as under:
Default rule for the cross-border supply of services other than nine
specified services.
S. No. Description of Supply Place of Supply
1 Any  Location of the recipient of service.
 Location of the supplier of service, if

location of recipient is not available in the
ordinary course of business.
AMENDMENT IN POS:
Supply of MRO (Maintenance, Repair and Overhaul) Services in respect of
(AIRCRAFTS) (Aircrafts engines and other aircraft components or parts): Notified
u/Sec 13(13) – PoS will now be location of recipient of service (as against place of
performance) [Notification issued in exercise of powers given by Sec 13(13) –
amended and made effective from 1st April, 2020 .

122 122
Chapter - 17
Refund Under GST

Q  What is refund? When can one apply for refund under GST?
A  A person can make an application for refund of GST before the expiry of 2
years from the relevant date in prescribed form & manner as may be
prescribed.
 Such refund may be claimed in the return filed in regular manner by the
taxable person if refund is related to E-Credit ledger & cash ledger.
 No refund shall be paid to an applicant if the amount of refund is less
than ₹ 1,000
Q  What are the cases where refunds are allowed?

A  In the following cases
 In the case where excess GST has been paid Erroneously
 Zero Rated Supply made without payment of tax
 Supply of goods / services to a SEZ unit
 The registered dealer has regarded taxability of a particular supply as
Inter-state supply instead if Intra-state supply “or” vice versa
 In the case where Reg. person is selling goods at lower rate & has
paid a higher rate of tax on the purchase , then he my claim refund
of excess portion
 Assessee cannot claim refund in case where he is selling NIL rated
“or” fully exempted supply.

123 123
Application Procedure & Time Limit of refund granted

 The application is to be submitted along with documents to establish
that a refund is due. (100% evidence)
 Documents to establish that amount of tax & interest was collected
from “or” paid by applicant and incidence if tax & interest has not
been passed to other person.
 Certificate issued by CA / CMA if amount of refund is more than ₹
2 lakh
 After receipt of application Proper Officer is satisfied that the whole
amount claimed as refund is refundable. He may make an order 60
days from the date of application and amount so determined shall be
credited to the Consumer Welfare Fund “or” Applicant Account as the
case may be
Cases where refund is not allowed

 Goods exported out of India are subject to Export duty. Example :
Negative goods
 If supplier of goods / services “or” both avails drawback of GST paid
on such supplies
Interest on delayed payments

 If not refunded within 60 days from the date of receipt then interest
@ maximum 6% p.a. shall be payable in respect of such refund
 Where any claim arise from an order passed by Adjudicating Authority
“or” Court etc. and same not refunded within 60 days from the date
of receipt of application then interest @ maximum 9% shall be
payable by the department.
Interest rate (Summary)

 Default in payment of GST = 18% p.a.
 Default in payment of ITC = 24% p.a.

124 124
 Interest in case of refund = 6% p.a. (normal)

 Interest in case of refund = 9% p.a. (appeal case)
 Refund Application = GST RFD-01
AMENDMENTS
1. *Circular No. 135/05/2020-GST [Bunching of refund claim of different FY
- allowed] Now, bunching of refund claims across different Financial Years
has been allowed- i.e., refund claims covering different tax periods falling
in different FYs can now be filed.
2. Refund of ITC No Refund of ITC in respect of those invoices, the details of
which are not available in GSTR-2A. (The benefit of 110% as per Rule
36(4) not to apply for refunds.)
*Circular No. 135/05/2020-GST [Bunching of refund claim of different FY -

allowed] The refund of accumulated ITC shall be restricted to the ITC as per those
invoices, the details of which are uploaded by the supplier in Form GSTR-1 and are
reflected in the Form GSTR-2A of the applicant.

125 125
Chapter-18
Registration Under GST

Summary of Section 22 to 30
Registration Normal Limit = 20 lakh

Except: Special Category States*
*Special Category States as per A-279A = 11

1. Arunachal Pradesh
2. Assam
3. Jammu & Kashmir
4. Manipur
5. Meghalaya
6. Mizoram
7. Nagaland
8. Sikkim
9. Tripura
10. Himachal Pradesh
11. Uttarakhand

126 126
Special category States for Section-22

Now: Total 4 States
1. Nagaland
2. Manipur
3. Mizoram
4. Tripura
Registration Limit = 10 lakh
Picture Before Amendment & After Amendment
Names of the States Upto 31st Jan 2019 w.e.f. 1st Feb, 2019
Manipur, Mizoram, Nagaland, 10 Lakh 10 Lakh (may be
Tripura enhanced)
AP, Assam, Meghalaya, 10 Lakh 20 Lakh
Sikkim, HP, UK
Other states incl. J&K 20 Lakh 20 Lakh
Notification 10/2019 u/s 23: Exemption from registration
 Supplier of goods : Exemption limit increased to 40 lakh (with certain

conditions)
Except:
1) Person covered u/s 24 (mandatory reg.)
2) Person engaged in the making supply of following goods :
 Ice cream
 Pan masala
 Tobacco

127 127
3) Person engaged in making Intra state supply in the state of Arunachal

Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Puducherry, Sikkim,
Telangana, Tripura & Uttarakhand
4) Person who wants to take Voluntary Registration
 Person supplying exempted goods
 An agriculturist to the extent of supply of produce out of cultivation of land
 Other notified person
Final picture after amendment
In case of supply of services “or” supply of goods/ services
Nagaland
Manipur
Other states
Mizoram
Tripura
Threshold limit = 10 lakh Threshold limit = 20 lakh


In case of supply of goods
Nagaland Sikkim Other states

Manipur Uttarakhand including J&K,
Mizoram Meghalaya HP, Assam
Tripura Arunachal Pradesh
Telangana
Puducherry
Threshold limit = 10 lakh Threshold limit = 20 lakh

Supplier of Supplier of
• Pan masala other goods
• Tobacco
• Ice cream
Threshold limit = Threshold limit

20 lakh = 40 lakh

128 128
Crux of GST Registration threshold limit
Nagaland Sikkim
Uttarakhand Other states
Manipur
Meghalaya including J&K,
Mizoram
Arunachal Pradesh HP, Assam
Tripura
Telangana
Puducherry
Threshold limit = 10 Threshold limit = Threshold limit

lakh in all cases, 20 lakh in all cases, • Services = 20 lakh
whether SOG or SOS whether SOG or • Goods and Services = 20 lakh
SOS • Goods (PTI) = 20 lakh
• Other goods = 40 lakhs

Process / Flow of Registration
Consult for registration
Mr. Binod Mr. VG

Advise to Mr. VG
(CS) (client)
First check: Person covered u/s 23?
Yes No
No question of registration Second check: Person covered u/s 24?

irrespective of aggregate TO
Yes No
Mandatory registration u/s 24 Third check: person covered under
(Without any exemption limit) clause (ii) (iii) (iv) of Sec. 22?
No Yes
Foruth check: person covered Mandatory registration u/s 24
under clause (i) Sec. 22? (Without any exemption limit)
Yes No
Registration required Optional/ Voluntary Registration

129 129
Registration number
GSTIN = 15 digits
State
PAN Number
code entity no. of Check
same PAN sum no.
Alphabet “Z”

130 130
Summary of Important Points covered under rules 25 to 30
CASE I
Effective from date of liable
Normal taxable person Liable for Certificate

registration granted
Application GST Reg-01

(time limit 30 days)
Validity = Till cancellation / Lifetime
CASE 2
Effective from date of grant of certificate
Normal taxable person Voluntary Certificate

registration granted
application
Validity = Till cancellation / Lifetime
CASE 3
(Non Resident taxable person)

A casual taxable person & non resident taxable person shall apply for registration at
least 5 days prior to commencement of business
Validity of Reg. = date/period specified in the application of Reg.

“or”
90 days from the effective date of Reg.,
whichever is earlier

131 131
AMENDMENTS IN REGISTRATION
SECTION 22: (PROVISO INSERTED)
Provided also that the Government may, at the request of a State and on
the recommendations of the Council, enhance the aggregate turnover from
Rs 20 lakhs to such amount not exceeding Rs 40 lakhs in case of supplier
who is engaged exclusively in the supply of goods subject to such conditions
and limitations, as may be notified.
Explanation: For the purposes of this sub-section, a person shall be

considered to be engaged exclusively in the supply of goods even if he is
engaged in exempt supply of services provided by way of extending deposits,
loans or advances in so far as the consideration is represented by way of
interest or discount
NOTE: Sec 22 has been amended by FA, 2019 wherein threshold limit can
be enhanced to 40 lakhs for exclusive supplier of goods via issuance of
notification. But till date no such notification has been issued. Presently,
enhanced threshold is applicable through Sec 23(2) notification only.
AMENDMENT – 2
W.e.f. 1st April, 2020, GST Registration shall be AADHARR BASED [Sec 25
amended to provide for Aadhar based authentication for EXSITING and NEW
REGISTRATION (if applicant not having Aadhar, then as alternative means-
there shall be compulsory physical verify action of principal place of
business) [Sec 25(6A) to (6D) inserted by FA, 2019- w.e.f. 1st Jan, 2020
+ Corresponding notifications issued and effective from 1st April, 2020 +
Consequential amendments in Rule 8 (submission of Reg Application), 9
(verification and grant of registration) and 25 (physical verification of
premises)]
132 132
Amendment – 3 Rule 8 : Application for registration
Rule 8(4A)
Where an applicant, other than a person notified under section 25 (6D), opts for
authentication of Aadhaar number, he shall, while submitting the application
under sub-rule (4), w.e.f. 21st August, 2020, undergo authentication of Aadhaar
number and the date of submission of the application in such cases shall be the
date of authentication of the Aadhaar number, or 15 days from the submission
of the application in Part B of FORM GST REG-01 under sub- rule (4),
whichever is EARLIER .
Amendment – 4 Rule 9 Verification of the application and approval
(1) Examination of application and grant of registration PO who shall

examine the application and the accompanying documents and if the
same are found to be in order, approve the grant of registration to
the applicant within 3 working days from the date of submission of
application.
Provided that, where an applicant, other than a person notified under
section 25 (6D), fails to undergo authentication of Aadhaar number
as specified in rule 8 (4A) or does not opt for authentication of
Aadhaar number, the registration shall be granted only after physical
verification of the place of business in the presence of the said
person, in the manner provided under rule 25:
Provided further that the proper officer may , for reasons to be

recorded in writing and with the approval of an officer not below the
rank of Joint Commissioner, in lieu of the physical verification of
the place of business, carry out the verification of such documents
as he may deem fit.
133 133
Amendment – 5 Rule 9(2) (proviso inserted by N/N 62/2020 – w.e.f. 21st Aug,
2020)
Provided that Where an applicant, other than a person notified under section
25 (6D), fails to undergo authentication of Aadhaar number as specified in
rule 8 (4A) or does not opt for authentication of Aadhaar number, the notice
in FORM GST REG-03 may be issued not later than 21 days from the date of
submission of the application.
Amendment – 6 Rule 9(4) [substituted by N/N 62/2020 – w.e.f. 21st Aug,

2020)
Where no reply is furnished by the applicant in response to the notice issued

under sub-rule (2) within the prescribed period or where the proper officer
is not satisfied with the clarification, information or documents furnished,
he shall may, for reasons to be recorded in writing, reject such application
and inform the applicant electronically in FORM GST REG-05.
Amendment – 7 Rule 9(5) [substituted by N/N 62/2020 – w.e.f. 21st Aug,

2020)
If the PO fails to take any action –
(a) within a period of 3 working days from the date of submission of the
application in cases where a person successfully undergoes
authentication of Aadhaar number or is notified under section 25
(6D); or
(b) within the time period prescribed under the proviso to sub-rule (2),
in cases where a person, other than a person notified under section
25 (6D), fails to undergo authentication of Aadhaar number as
specified in rule 8 (4A); or

134 134
(c) within a period of 21 days from the date of submission of the

application in cases where a person does not opt for authentication
of Aadhaar number ; or
(d) within a period of 7 working days from the date of the receipt of the
clarification, information or documents furnished by the applicant
under sub-rule (2), the application for grant of registration shall be
deemed to have been approved.
Rule 25 : Physical verification of business premises in certain cases [amended

by N/N 62/2020 – w.e.f. 21st Aug, 2020]
Where the proper officer is satisfied that the physical verification of the
place of business of a person is required due to failure of Aadhaar
authentication or due to not opting for Aadhaar Authentication before the
grant of registration, or due to any other reason after the grant of
registration, he may get such verification of the place of business, in the
presence of the said person, done and the verification report along with the
other documents, including photographs , shall be uploaded in FORM GST REG-
30 on the common portal within a period of 15 working days following the
date of such verification.

135 135
Chapter - 19
Return Under GST

Section 38 of Central Goods & Services Act, 2017 mentions that the details of
inward supplies of goods / services both are required to be furnished by every
registered person , including casual taxable person , but excluding:
a) Input service distributor (ISD)
b) Non-resident taxable person
c) Person paying tax under composition scheme
d) Person effecting TDS
e) Person effecting TCS
f) Supplier of online information & data base access / retrival services
(OIDAR)
 GSTR-2 of any month has to be filed within 11th to 15th of the following
month.
 GSTR-1 signifies the tax liability while GSTR-2 signifies the ITC availability
Timeline can be summarised as under
Return Who has to

Particulars Frequency Due date
form file?
GSTR-1 Details of outward Monthly 11th of next Normal reg.
supply of taxable G/S month person
affected
GSTR-2 Details of inward Monthly 15th of next Normal RP
supply of taxable G/S month
affected claiming ITC

136 136
GSTR-3 Monthly return on Monthly 20th of next Normal RP

the basis of month
finalisation of details
of outward & inward
supplies along with
payment of tax
GSTR-3B Simple return in Monthly 20th of next Normal RP
which summary of month
outward supply along
with ITC is declared
& payment of tax is
affected by taxpayer
GSTR-4 Return for a taxpayer Annually 30th April Composition
reg. under comp. Levy dealer
GSTR-5 Return for a non- Monthly 20 th of next Non-resident
resident foreign month taxable
taxable person “or” person
within 7 days
of expiry of
reg. (earlier)
GSTR-5A Monthly return for Monthly 20 th of next OIDAR
OIDAR service month
GSTR-6 Return for an Input Monthly 13 th of next ISD
Service Distributor month
GSTR-7 Return for authorities Monthly 10 th of next TDS
deducting TDS month deductor
GSTR-8 Details of supply Monthly 10 th of next TCS collector
effected through E- month

137 137
commerce operator &

the amount of tax
collected
GSTR-9 Annual return for a Annually 31st Dec of Reg. person
normal taxpayer next month other than
ISD, TDS,
Comp.dealer,
TCS & non-
resident
GSTR-9A Annual return for a Annually 31st Dec of Composition
taxpayer reg. under next month dealer
composition levy
anytime during the
year
GSTR-9B Annual return for Annually 31st Dec of ECO
ECO next month
GSTR-9C GST reconciliation Annually 31st Dec of Normal tax
statement next month payer having
ATO more
than 2 crore
GSTR-10 Final return Only when within 3 RP whose
GST reg. months of Reg. has
cancelled date of been
or cancellation cancelled
surrendered
“or”
date of order
of

138 138
cancellation
“Later”
GSTR-11 Details of inward Monthly Law silent Specified
supply to be person
furnished by a person allotted UIN
having UIN &
claiming a refund.
Important points:
 Due dates are subject to changes by notification / orders.
 Filing of GSTR-2 & GSTR-3 has been postponed till further announcement.
 Entities with an annual aggregate turnover of upto 1.5 crores have been
given an option file quarterly GSTR-1 returns.
 Notification no. 32/2018 – central govt. has extended the due date of filing
GSTR-1 for registered person having aggregate turnover of more than ₹ 1.5
crores in the preceeding financial year or the current F.Y for each of the
months from July, 2018 to March, 2019 till the eleventh day of the month
succeeding such month.
 The revised due date of GSTR-9 & GSTR-9A is now 30th June 2019 for the
F.Y 2017-18.
 All tax payers filing return GSTR-1 to GSTR-3 are required to file an annual
return. The following are required not to do so –
a) Casual taxable person
b) Non- resident taxable person
c) Input Service Distributor
d) Person affecting TDS / TCS

139 139
Amendment in return under GST

Amendment – 1 Earlier quarterly
GSTR - 4
Now annually
Amendment – 2
Section 48 + Rule 83 + Rule 83A
Enrollment GST PCT-02
GST Practitioner Assessee
File Form GST PCT-01
at GST Portal
Eligibility Conditions
Any one of the following

• CBI officer (retired)
• Indian citizen
• Sale tax practice of 5 yrs or
• Sound mind
more
• No punishment by court
• B.com, M.com, CS, CA,
CMA final exam cleared
Activities which can be undertaken on behalf of Reg. person
Earlier Now (scope enhanced)

• Furnish details of inward & outward supply • Furnish information for E-Way Bill
• Furnish every type of return • Furnish Job Work challan (GSTR ITC-04)
• Challan payment • File intimation of composition
• File refund claim • File application of enrollment
• Registration application

140 140
ADDITIONAL AMENDMENTS UNDER RETURN:
AMENDMENT - 1
Normal / Regular Supplier
Regular Supplier
Sec 39(1) Normal RP – Monthly return - in prescribed form, manner and

time
Rule 61 – Prescribed Form: GSTR-3B – Prescribed time: Staggered Dates

(20th, 22nd, 24th following end of the month)
AMENDMENT - 2
Composition supplier opting for composition scheme u/Sec 10
Sec 39(2) Composition Supplier – Annual return - in prescribed form,

manner and time.
Rule 62 – Prescribed Form: GSTR-4 – Prescribed time: 30th April

Condition: [Tax shall be paid on quarterly basis (by 18th following end of
quarter) - A statement Form GST CMP-08 (intimation of payment) shall be
submitted] Sec 39(7) – Tax to be paid by due date of filing return FA,
2019 Proviso inserted in Sec 39(7) – It provides that RP opted for paying
tax u/Sec 10 shall be required to pay tax on QUARTERLY BASIS (by 18th of
following month)

141 141
Amendment 3
Commissioner empowered to extend time limit for furnishing of ANNUAL

RETURN u/Sec 44 [Proviso inserted in Sec 44(1) by FA, 2019 – w.e.f. 1st
April, 2020]
Amendment – 4
Rule 67-A inserted to allow taxpayer facility of filing [GSTR-3B] as well

as [GSTR-1] by SMS – if such return or statement is having Nil Entry
(No entry) for the tax period. Same facility allowed to Composition
Supplier for filing GST CMP-08 (Quarterly tax Payment Statement) [Rule
67-A inserted vide N/N 58/2020-CT – w.e.f. 1st July, 2020 (lastly
amended by N/N 79/2020-CT – w.e.f. 15th Oct, 2020)]

142 142
Chapter - 20
Tax Invoice, Credit & Debit Note

Tax Invoice
Issued by registered person under GST
In case of “SOG” In case of “SOS”
Section 31(1)
Supply of Goods
When supply involves When supply does not

movement of goods involve movement of goods
On or before at the time of On or before at the time of

removal of goods delivery of goods
Tax Invoice Contains

 Description
 Quantity
 Value of goods
 GST charged

143 143
 Others as may be prescribed
Section 31(2)
Supply of Service
General Provision Continuous supply of Service
Invoice shall be issued within

the prescribed time limit Where successive Ascertainable Not Payment linked
from the date of “SOS” (30 Statement & due date ascertainable with completion
days / 45 days) Payment involved due date event
Before or at the On or before On or before On or before

time of issuance the due date the date of the date of
of statement or of payment payment completion
payment, as the
case may be
Goods sent on Approval Basis
Goods sent on Approval Basis
Before or at the time of 6 months from the date of

supply (i.e. confirmation) removal
Whichever is earlier

144 144
Section 31(3) Invoice issued in Special Cases
1.
Liable for registration Govt. issued registration

certificate
Revised invoice within 1 month from the

date of issuance of certificate
2.
Value of Goods or Services
less than ₹ 200 ₹ 200 or more
Reg. person may not issue Mandatory to issue Tax

Tax invoice subject to invoice
condition
3. Registered person
Supply of exempted G/S or covered u/s 10
Issue Bill of Supply instead of tax invoice

145 145
4.
Value of Goods & Service
less than ₹ 200 ₹ 200 or more
Reg. person may not issue Mandatory to issue

Bill of Supply subject to Bill of Supply
condition
5. In case of Advance Payment

Issue a receipt voucher
6. In case of refund
Issue refund voucher
7. In case of RCM u/s 9(3) or 9(4)
Issue payment voucher
Rule 48: Manner of issue of Tax Invoice
1. In case of supply of Goods

Original = Buyer
Duplicate = Transporter
Triplicate = Supplier
2. In case of supply of Services
Original = Recipient
Duplicate = Supplier

146 146
Rule 55: Delivery Challan

Delivery challan should be issued instead of Invoice. Such situations are as
follows:
 Supply of liquid gas where the quantity at the time of removal is not
known.
 Transportation of goods for job work.
 Transportation of goods for reason other than by way of supply.
 Such other supply as may be notified by Board
Copies of Challan:  Original = Consignee
  Duplicate = Transporter
  Triplicate = Consignor
Concept of Debit Note or Credit Note

Both are issued by Supplier to Receiver.
a) Credit note = Taxable value in the taxable invoice is found to exceed the
taxable value in respect of such supply.
GST charged on TV is found to exceed.
Goods supplied are returned by recipient.
Goods supplied are found to be deficient.
Amendment  Comparison OLD LAW & NEW LAW
Old Law New Law

 One tax invoice Assessee / supplier can issue more
than one credit note for one tax
One credit note invoice

147 147
 More than one tax invoice Supplier can issue only one credit
note for more than one tax invoice.
More than one credit note
b) Debit Note : Supplementary Invoice

Debit note time limit |
 Taxable value in Tax Invoice is found to be less than
Tax Invoice in respect of such supply.
 GST charged in tax invoice is found to be less than
GST payable in respect of such supply.
Amendment: Same as credit note except that credit note will be replaced by
Debit note.
Time limit to issue for Credit Note:

Details of credit note shall be issued till the end of September month following
the end of F.Y in which supply was made. (I.e. 30 Sept. of next year)
Eg. F.Y 17-18 = 30/9/2018
CRUX:
Value/ rate , value increase |= Debit Note.
Value/ rate , value kam h|= Credit Note.

148 148
Amendments (Read once)
1. CBIC clarification in respect of certain challenges faced by RP in

implementation of provisions of GST law [CBIC Circular 137/ 07/ 2020]
Circular No. 137/07/2020- GST (Clarification i.r.o. certain challenges faced
by RP in implementation of GST provisions)
Supplier of Services
Advance received by Supplier of Services — Documented by ‘Receipt Voucher’
— GST liability paid on advances Subsequent Event–Refund of Advance — to
be documented by ‘Refund Voucher’ — Supplier to claim ‘refund of GST paid’
Issue
An advance is received by a supplier for a service contract which got
cancelled subsequently. The supplier has issued receipt voucher and paid the
GST on such advance received. Whether he can claim refund of tax paid on
advance OR he is required to adjust his tax liability in his Returns?
Clarification
In case GST is paid by the supplier on advances received for an event which
got cancelled subsequently and for which no invoice has been issued in terms
of Section 31(2) of the CGST Act, he is required to issue a “refund voucher”
in terms of Section 31(3) (e) of the CGST Act read with Rule 51 of the
CGST Rules.
 The taxpayer can apply for refund of GST paid on such advances by filing
Form GST RFD-01 under the category “Refund of excess payment of tax”

149 149
Advance received by Supplier of Services — Documented by ‘Receipt

Voucher’— GST liability paid on advances -- Tax invoice also issued before
supply of service
Subsequent Event–Refund of Advance
Option 1 — Supplier to issue Credit Note and claim ‘adjustment of GST paid
in the tax period in which CN is issued and declared in return’ (as per
provisions of Sec 34)
Option 2 — Supplier can opt to claim ‘refund of GST paid’ (as per provisions
of Sec 54)
Issue
An advance is received by a supplier for a service contract which

subsequently got cancelled. The supplier has issued the invoice before supply
of service and paid the GST thereon. Whether he can claim refund of tax
paid OR is he required to adjust his tax liability in his Returns?
Clarification
In case GST is paid by the supplier on advances received for a future event
which got cancelled subsequently and for which invoice is issued before
supply of service, the supplier is required to issue a “Credit Note” in terms of
Section 34 of the CGST Act. He shall declare the details of such Credit
Notes in the Return for the month during which such Credit Note has been
issued. The tax liability shall be adjusted in the Return subject to conditions
of Section 34 of the CGST Act. There is no need to file a separate refund

150 150
claim. However, in cases where there is no output liability against which a

credit note can be adjusted, registered persons may proceed to file a refund
claim under “Excess payment of tax, if any” through Form GST RFD-01.
Supplier of Goods
Goods supplied with tax invoice — GST paid
Subsequent Event–Goods returned by recipient
Option 1 — Supplier to issue Credit Note and claim ‘adjustment of GST paid
in the tax period in which CN is issued and declared in return’ (as per
Option 2 — Supplier can opt to claim ‘refund of GST paid’ (as per
Issue
Goods supplied by a supplier under cover of a tax invoice are returned by the
recipient. Whether he can claim refund of tax paid OR is he required to
adjust his tax liability in his Returns?
Clarification
In such a case where the goods supplied by a supplier are returned by the
recipient and where tax invoice had been issued, the supplier is required to
issue a “Credit Note” in terms of section 34 of the CGST Act. He shall
declare the details of such Credit Notes in the Return for the month during
which such Credit Note has been issued. The tax liability shall be adjusted in

151 151
the Return subject to conditions of Section 34 of the CGST Act. There is no

need to file a separate refund claim in such a case.
However, in cases where there is no output liability against which a credit

note can be adjusted, registered persons may proceed to file a refund claim
under “Excess payment of tax, if any” through Form GST RFD-01.
Section 31-A: Facility of DIGITAL PAYMENT to recipient
The Government may, on the recommendations of the Council, prescribe a

class of registered persons who shall provide prescribed modes of electronic
payment to the recipient of supply of goods or services or both made by him
and give option to such recipient to make payment accordingly, in such
manner and subject to such conditions and restrictions, as may be prescribed.
Rule 48 (4) : Manner of issuing invoice
The invoice shall be prepared by such class of registered persons as may be

notified by the Government, on the recommendations of the Council, by
including such particulars contained in FORM GST INV-01 after obtaining an
Invoice Reference Number by uploading information contained therein on the
Common GST Electronic Portal in such manner and subject to such conditions
and restrictions as may be specified in the notification.
Provided that the Commissioner may, on the recommendations of the Council,

by notification , exempt a person or a class of registered persons from
issuance of invoice under this sub-rule for a SPECIFIED PERIOD, subject to
such conditions and restrictions as may be specified in the said notification

152 152
Notified RP mandated to do e-invoicing (with effect from 1st Oct, 2020)
[N/N 13/2020-CT (dated 21st march, 2020) (as amended by N/N 61/2020-CT (dated 30th July,
2020) and further amended by N/N 70/2020-CT (dated 30th Sep, 2020)]
whose ATO (in any preceding FY from 2017-18 onwards) > Rs 500 Crores
shall prepare Invoice and other prescribed documents (Debit Note and Credit
Notes) in terms of Rule 48(4) (i.e., Document with QR Code (with
embedded RN) in respect of supply of goods or services or both to a
Registered person (i.e., B2B supply) or for EXPORT
HSN Code mandated for ALL CLASSES OF TAXPAYERS w.e.f. 1st April, 2021
[first proviso to Rule 46 substituted (N/N 79/2020-CT – w.e.f. 15th Oct,
2020) + N/N 78/2020-CT issued thereunder but to be effective from 1st
April, 2021]
The requirement to furnish HSN code in TAX INVOICE has been revised w.e.f.
1-4-2021.
ATO in the preceding FY No. of Digits of HSN Code

Upto Rs 5 crores 4 digits * In respect of supply to
URP (i.e., B2C
Supply): Mention of
HSN code is optional
More than Rs 5 Crores 6 digits
* for both Goods and Services

153 153
Chapter - 21
TDS & TCS

Summary of concept of TDS & TCS
TDS: (Sec-51)
Payment contracted where value is more than ₹ 2.5 lakh
Supplier
Specified /Notified Recipient*
Deduct TDS @2% (1% CGST, 1% SGST)
*Specified / notified recipient
 A department of CG / SG
 Local authority
 Govt. agencies
 An authority “or” a board or any other body
o set up by an act of Parliament “or” State
o established by Govt. with 51% or more voting power to carry out any
function.
 Society established under Society Act.
 Public sector undertaking
 Others to be notified

154 154
Three Exceptions (amendment) ( TDS |)

 Ministry of defence
 Public sector undertaking  Public sector undertaking
 Person covered us 51  Person covered u/s 51
TCS (Sec.52)
 Who collect TCS = ECO u/s 9(5)
 Threshold limit = Zero
 Rate = 1% ( 0.5% CGST , 0.5% SGST )
 Form = GSTR-8 ( 10th of next month)
 Collected within 10 days
 Details to be filed within 10 days
Amendment:
Commissioner empowered to extend time limit for furnishing of monthly as
well as annual STATEMENT by Tax Collector-ECO u/Sec 52 (Extension for
reasons to be recorded in writing and by issuing extension notification) –
[Provisos inserted in Sec 52(4) and (5) by FA, 2019 – w.e.f. 1st Jan, 2020]
Introduction of UTGST & IGST

UTGST
1. The UTGST Act applicable only on following territory :-
 Andaman & Nicobar
 Lakshadweep

155 155
 Dadra & Nagar Haveli Daman & Diu

 Ladakh
 Daman & Diu
 Chandigarh
 Other territory
2. The Delhi, JAMMU & KASHMIR and Pondicherry are the 3 UT but
this act shall not apply there as they have their own state legislature
and Govt. state GST would be applicable in their case.
3. Other provisions if UTGST same as CGST Act.
IGST
1. GST Council in its 11th meeting held on 4/3/17 approved the draw
IGST bill make a provision of Inter-State Supply.
2. CG present the IGST Bill in Lok Sabha on 27/3/2017 & same was
passed by Lok Sabha on 29/3/2017
3. The Rajya Sabha passed the bill on 6/4/2017 & was assented by
President on 12/4/2017
4. Other provisions of IGST Act same as CGST Act subject to some
modifications.

156 156
Chapter - 22
Time of Supply / Point of Supply
‘Supply provide “ ब” ?
What is difference b/w Place of Supply & time of Supply?

Particulars POS/POPS/POPOS TOS/POS
Section Sec. 10 to 13 of IGST Act Sec. 12,13 & 14 of CGST Act
Meaning Supply provide Supply provide ब
? ?
Decide GST , and अ र GST ब ?
?
Sequence: First check “POS”
POS in India POS outside India
POS within POS outside NO GST (because its export)

same state state
No question of TOS
CGST + SGST IGST
Next question: GST ?
Solution: refer TOS chapter (Sec. 12, 13 & 14) of CGST Act.

157 157
Time of Supply
Sections
Section 12 Section 13 Section 14
Supply of goods Supply of service Change in rate of GST
12(1) 12(2) 12(3) 12(4) 12(5) 12(6)
13(1) 13(2) 13(3) 13(4) 13(5) 13(6)
For POT, General Reverse POT in Residuary POT in

refer provision charge case of case case of
further (POT in Vouchers interest,
provision case of penalty
forward etc.
charge)

158 158
Section 13(2) : General Provision (forward charge)
Applicability: All services except services covered under RCM
Check if invoice is issued within time or not?
YES NO
DOP* DOP*
“or” Earlier “or” Earlier
DOI DOC
Time limit for the issue of invoice
DOP*
“or” Within 30/45 days of whichever is earlier
DOC
*Date of Payment (DOP)
Book Entry
“or” Earlier
Credited in Bank A/c
Example :
DOC DOP DOT POT
18/9/2018 Book entry = 17/9/18 25/9/18 17/9/18
Bank Cr. = 20/9/18
25/11/2018 Book entry = 28/11/18 30/11/18 26/11/18
Bank Cr. = 26/11/18
5/1/2019 4/1/19 14/2/19 4/1/19
8/12/2018 10/12/18 5/2/19 8/12/18

159 159
Concept of Advance Payment
Advance Payment
Upto ₹ 1,000 More than ₹ 1,000
POT = DOP or DOI at the POT = date of

option of supplier payment
Section 13(3): Time of supply in case of RCM :-

Date of Invoice
Payment received / made Payment not received /

within 60 days from the made within 60 days from
date of invoice. the date of invoice.
POT = Date of payment* POT = 61st day from

the date of invoice
*Date of Payment (DOP)
Book Entry
“or” Earlier
Bank Debit

160 160
Section 13(4): POT in case if Vouchers

Vouchers
Supply is identifiable Supply is not identifiable
POT = Date of issue of voucher POT = Date of redemption

of voucher
Section 13(6): POT in case of Interest, Penalty etc.
POT = When receive such additional condition.
Section 13(5): POT in residuary case
Residuary case
If periodic return filed Other cases
POT = The date on which return is POT = The date on which

to be filed tax is paid.

161 161
Section 12: The provision of section 12 is same as section 13 except

Section 12(2) and section 12(3)
Section 12(2): TOS in case of supply of goods (forward charge)

Latest Law (amended Law)
Last date* when invoice is

Date of issuance of invoice
required to be issued
Whichever is later
*Last date
If supply involves movement If supply does not involve

of goods movement of goods
Date of removal Date of delivery of goods
Section 12(3) : TOS in case of supply of goods (RCM)
Date of receipt of Goods

“or”
Date of Payment Earlier
“or”
31st from the date of issue of invoice or any other doc.

162 162
Section 14: TOS in case if change in rate of tax
Supply Issue of Receipt of Time of supply

invoice payment
Before Before After Date of issue of invoice
Before After Before Date of receipt of payment
Before After After Date of issue of invoice or date of
receipt of payment, whichever is earlier
After After Before Date of issue of invoice
After Before After Date of receipt of payment
After Before Before Date of issue of invoice or date of
receipt of payment, whichever is earlier
Example: Change in rate of tax = 1/9/2018
Old rate = 18%
New rate = 5%
DOC DOP DOI POT Rate of GST

25/8/18 28/8/18 5/9/18 28/8/18 18%
10/9/18 25/8/18 5/9/18 5/9/18 5%
24/7/18 10/10/18 18/8/18 18/8/18 18%
8/9/18 10/11/18 29/8/18 10/11/18 5%
25/10/18 25/8/18 28/8/18 25/8/18 18%
8/7/18 5/9/18 3/9/18 3/9/18 5%
NOTE: The date of receipt of payment shall be the date of credit in the Bank A/c if
such credit in the bank account is after 4 working days from the date of change in
rate of GST.

163 163
Chapter - 23
Inspection, Search, Seizure & Arrest

(other provisions chapter from book)
Punishment & Fine

 Tax Evasion > 500 lakh
Imprisonment Max. 5 years
+
Fine
 Tax Evasion > 200 lakh & upto 500 lakh

Imprisonment Max. 3 years
+
Fine
 Tax Evasion > 100 lakh & upto 200 lakh

Imprisonment Max. 1 year + fine
 Tax Evasion upto 100 lakh

Imprisonment Max. 6 months (and / or) Fine

164 164
Form No.
 Inspection = GST INS 01
 Seizure = GST INS 02
 Prohibition = GST INS 03
 Bond = GST INS 04
 Auction = GST INS 05
Amendment
Rule 141(2) amended empowering PO to order disposal of seized goods or
things perishable or hazardous in nature– [Rule 141 (2) amended– w.e.f.
[N/N 16/2020- CT 23rd March, 2020]

165 165
Chapter - 24
Job Work
Section- 2(68):
Job work means any treatment “or” process undertaken by a person on goods
belonging to another Registered person.
Summary diagram of Job Work1
Customer Supply in
hands of
owner
Raw material/ Input / Cap. goods
Owner J/W -01

Return within 1 year* or 3 years*
Supply in
hands of
Supply in Not a
hands of J/W -01
Supply
owner
Customer
*1 year for Input

J/W -02
*3 years for capital goods
Supply in
Except: moulds & dies, Jigs & hands of
fixtures or tools
owner
Customer
1
J/W = Job worker

166 166
Important Note:
Owner Job Worker
Goods directly sent to

Although sec-16 of CGST Act specifically states
job worker on the
that ITC will be allowed only when goods are direction of owner
actually received, but under Job work this this
condition is Exempt & ITC can be allowed even
if input or Cap goods are directly sent to the
Job worker premises without being firstly Supplier of
received to the place of business of Principal. Owner
Note: GST is applicable on the supply of waste & scrap in the hands of
Principal “or” Job worker as the case may be.
Amendment:
Filing of GST ITC-04 (Job-work intimation) – waived off for period (July
2017 to June 2019

167 167
Chapter - 25
Payment of GST
 Section-49 : Payment of GST liability, Interest & Penalty
 Section-50 : Interest on delayed payment
 Section-51 : TDS collection
 Section-52 : TCS collection
Link with Rule: 85, 86, 87
1) Due date of payment is 20th of next month.

2) Return cannot be filed without payment of GST
3) No further return without previous
4) Generate payment Challan GST PMT 06
5) Payment mode : E-Credit Ledger
*E-Cash Ledger
*Payment deposit in E-Cash ledger through following mode:
 Net banking  RTGS
 Debit card  NEFT
 Credit card  IMPS etc.
6) Payment over the counter, maximum of ₹ 10,000
7) All the tax payers will get three Electronic ledgers namely
E-liability ledger - Rule 85
E-credit ledger - Rule 86
E-cash ledger - Rule 87

168 168
E-Ledgers
E-liability ledger E-credit ledger E-cash ledger

Rule 85 Rule 86 Rule 87
• The ELL shall be maintained • The E-CrL shall be • The ECL shall be maintained
in Form GST PMT 01 for each maintained in Form GST PMT in Form GST PMT 05 for each
person liable to pay tax, 02 for each person who are person liable to pay tax,
interest, penalty, late fees or eligible for ITC. interest, penalty etc.
any other sum under this
• can be used for the payment • ECL can be used for payment
Act.
of GST liab. of all types of liability.
• ELL contains following
• Cr.L cannot be adjusted with
amounts :-
Interest/ Penalty / Fees etc.
o GST
• Balance of ECrL may be C/F
o Interest or get refund by assessee, as
the case may be.
o Penalty
o Fees
o Etc.
• For the payment of ELL,
assessee can use ECrL or
ECL, as the case may be

169 169
Amendments in Payment of GST
Provisions to be followed by RP (submit transfer request in Form GST PMT-

09 form over common portal) [Sec 49(10) & (11) of CGST Act + Rule
87(13) of CGST Rules, 2017] [As inserted by FA, 2019]
Sec 49 (10): A registered person may, on the common portal, transfer any
amount of tax, interest, penalty, fee or any other amount available in the
electronic cash ledger under this Act, to the electronic cash ledger for
integrated tax, central tax, State tax, Union territory tax or cess, in such
form and manner and subject to such conditions and restrictions as may be
prescribed and such transfer shall be deemed to be a refund from the
electronic cash ledger under this Act. [Rule 87 (13) inserted in CGST Rules,
2017]
Rule 87 : Electronic Cash Ledger (13) E-cash ledger: Inter-head adjustment

(major / minor) allowed A registered person may, on the common portal ,
transfer any amount of tax, interest, penalty, fee or any other amount
available in the electronic cash ledger under the Act to the electronic cash
ledger for integrated tax, central tax, State tax or Union territory tax or cess
in FORM GST PMT-09.4
Sec 49 (11) Where any amount has been transferred to the electronic cash
ledger under this Act, the same shall be deemed to be deposited in the said
ledger as provided in sub-section (1).
Section 53A of CGST Act : Transfer of certain amounts Where any amount
has been transferred from the electronic cash ledger under this Act (i.e.,

170 170
CGST Act) to the electronic cash ledger under the State GST Act or the
Union territory GST Act, (i.e., SGST Act/ UTGST Act) the Government shall,
transfer to the State tax account or the Union territory tax account, an
amount equal to the amount transferred from the electronic cash ledger, in
such manner and within such time as may be prescribed.
Section 17-A of IGST Act: Transfer of certain amounts where any amount
has been transferred from the electronic cash ledger under this Act (i.e.,
IGST Act) to the electronic cash ledger under the State GST Act or the
Union territory GST Act, (i.e., SGST Act/ UTGST Act) the Government shall,
transfer to the State tax account or the Union territory tax account, an
amount equal to the amount transferred from the electronic cash ledger, in
such manner and within such time as may be prescribed.
Section 50: Interest on DELAYED PAYMENT of tax. Failure to pay (full/

part):
Interest @18% p.a.
(1) Every person who is liable to pay tax in accordance with the provisions of
this Act or the rules made thereunder, but fails to pay the tax or any part
thereof to the Government within the period prescribed*, shall for the period
for which the tax or any part thereof remains unpaid, pay, on his own,
interest at such rate, not exceeding 18% p.a., as may be notified by the
Government on the recommendations of the Council. Notified Rate 18% p.a.
[N/N 13/2017-CT + N/N 6/2017-IT]

171 171
Computation of Interest
(2) The interest under sub-section (1) shall be calculated, in such manner
as may be prescribed*, from the day succeeding the day on which such tax
was due to be paid.
Belated return and belated tax payment : Interest on NET GST Liability
paid through RCL (and not on gross GST liability)
Provided that the interest on tax payable in respect of supplies made during
a tax period and declared in the return for the said period furnished after the
due date in accordance with the provisions of section 39, except where such
return is furnished after commencement of any proceedings under section 73
or section 74 in respect of the said period, shall be levied on that portion
of the tax that is paid by debiting the electronic cash ledger.

172 172

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INDEX

S. No. Chapter Name Page No.

Direct Tax Indirect Tax

Income Tax International Tax GST Custom (new syllabus)

Part-1 Basis of Income Tax

Part-2 Computation of Total Income & tax liability

Part-3 Miscellaneous Topics

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Which amendments/ updations are relevant for Exams?

June 2021 December 2021

Income Tax + GST

 Finance Act -2020  Finance Act -2020

Notifications /circulars upto 31/12/20 Notifications /circulars upto 30/06/2021

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 Example  Income tax  GST

 Nature of tax Progressive nature Regressive nature

-2 income Fix nature

 Concept of P.Y Previous year income No concept of P.Y & A.Y

 Distribution or Central Govt. Central Govt. or State Govt.

 Department CBDT CBIC

 Taxable Event Income arise  Supply of GST

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Some important concepts :

 Basic -2 :- Origin of Law

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Money Bill Ordinary Bill

Can be presented before

 Income Tax Act, 1961

अ र Income Tax amendment Finance Act amendment

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Notification and Circulars

Case laws (High Court & Supreme Court Judgement)

Important points for Exams

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List Of 18 Articles & 1 Schedule

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Article – 245 + 246 + 248 + 254

List I List II List III

(A-245) “or” Part of India “or” Part of State

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Definition of India / State / U. territory under GST

Base line/ land mass TWI EEZ

29 28 States 7 8 UT other territory for oil & natural gas

9 Delhi (SEZ)  Punjab Inter IGST

SEZ  SEZ bhar se bhar  nothing to do with this

Definition of INDIA under Income Tax

O/S India 200 NM 12 NM

Definition 0f INDIA under Custom Laws

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Example : Income Tax = Income Tax Act, 1961

GST = CGST Act , 2017 – 1 Act

SGST Act , 2017 – 31 Act

Article-269A : Apportionment of GST

Delhi IGST levy & collected by CG

Shall be appropriated b/w union & sate  provided by

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