INDEX

I. Introduction to GST
1. Objectives of GST
2. Components of GST
3. GST Advantages
4. GST Dis advantages
II. GST Registration Process
1. GSTIN
2. GST Registration Eligibility
3. GST Registration Types
4. GST Registration Process
III. Amendment of GST Registration
IV. Cancellation of GST Registration
V. Revocation of GST Registration
VI. Determining Place of supply of goods and services GST
1. Understanding place of supply in GST
2. Place of supply rules for goods
3. Place of supply rules for services
VII. Time of Supply of goods and services GST
VIII. Value of supply of goods and services GST
IX. Goods and services exempted from GST
1. Exemptions under GST-goods
2. Meaning for Exempt supply
3. Types of exemptions
4. Important notifications issued for exemption
X. Invoicing under GST
1. Meaning of GST invoice
2. Who can raise a GST invoice
3. Mandatory fields of GST tax invoice format
XI. Input Tax Credit Mechanism
1. Eligibility and conditions for taking ITC
2. Calculation of ITC
3. Claiming of ITC
4. Documents and forms required to claim ITC
5. Important points regarding to ITC
XII. GST Returns
Regular Dealer under GST
1. Return Process
Composition Tax payer under GST
1. Return Process
 Goods And Services Tax ( GST)
Introduction:
GST stands for “Goods and Services Tax”, and is proposed to be a comprehensive indirect tax levy on
manufacture, sale and consumption of goods as well as services at the national level. Its main objective is to
consolidates all indirect tax levies into a single tax, except customs (excluding SAD) replacing multiple tax
levies, overcoming the limitations of existing indirect tax structure, and creating efficiencies in tax
administration.
Simply put, goods and services tax is a tax levied on goods and services imposed at each point of sale or
rendering of service. Such GST could be on entire goods and services or there could be some exempted class of
goods or services or a negative list of goods and services on which GST is not levied. GST is an indirect tax in
lieu of tax on goods (excise) and tax on service (service tax). The GST is just like State level VAT which is levied
as tax on sale of goods. GST will be a national level value added tax applicable on goods and services.
A major change in administering GST will be that the tax incidence is at the point of sale as against the
present system of point of origin. According to the Task Force under the 13th Finance Commission, GST, as a
well designed value added tax on all goods and services, is the most elegant method to eliminate distortions and
to tax consumption.
One of the reasons to go the GST way is to facilitate seamless credit across the entire supply chain and
across all States under a common tax base. It is a tax on goods and services, which will be levied at each point of
sale or provision of service, in which at the time of sale of goods or providing the services the seller or service
provider can claim the input credit of tax which he has paid while purchasing the goods or procuring the service.
This is because they include GST in the price of the goods and services they sell and can claim credits for the
most GST included in the price of goods and services they buy. The cost of GST is borne by the final consumer,
who can’t claim GST credits, i.e. input credit of the tax paid.
Example: A product whose base price is ₹ 100 and after levying excise duty @ 12%value of the product is ₹ 112.
On sale of such goods VAT is levied @ 12.5% and value to the ultimate consumer is ₹ 126. In the proposed GST
system on base price of ₹ 100 CGST and SGST both will be charged, say @ 8% each, and then the value to the
ultimate consumer is ₹ 116. So, in such a case the industry can better compete in global environment.
Therefore, GST is a broad based and a single comprehensive tax levied on goods and services consumed in an
economy.
In particular, it would replace the following indirect taxes as these will be subsumed in the proposed
GST:

At Central level
 Central Excise Duty
 Service Tax
 Additional Excise Duties
 CVD (levied on imports in lieu of Excise duty)
 SAD (levied on imports in lieu of VAT)
 Excise Duty levied on Medicinal and Toiletries preparations,
 Surcharges and cesses
 Central Sales Tax

At State level
 VAT/Sales tax
 Entertainment tax (unless it is levied by the local bodies)
  Luxury Tax
 Taxes on lottery, betting and gambling
 Entry tax not in lieu of Octroi
 Cesses and Surcharges

TAXES DUTIES LIKELY TO BE SUBSUMED IN GST

Central Taxes/Levies State Taxes/Levies

Central excise duty under Central Excise Act, 1944 Sales Tax/Value Added Tax
(VAT)
Additional excise duties - Under Additional Duties of Excise (Goods of Entertainment tax
Special Importance Act, 1957

Excise Duty under Medicinal & Toiletries Preparation Act, 1955 State excise duty

Service Tax under Finance Act, 1994 Luxury tax

Additional Customs Duty (Countervailing Duty - CVD) Taxes on lottery, betting &
gambling

Special Additional Duty of Customs (SAD) Entry tax (not in lieu of

Octroi)
Surcharges (e.g. national calamity contingent duty) Purchase tax
Cesses (e.g., Cess on rubber, Cess on tea etc.) State Cesses
Central Taxes/Levies State Taxes/Levies

Central Sales tax (to be phased out) State Surcharges

TAXES DUTIES NOT LIKELY TO BE SUBSUMED IN GST

CentralTaxes/Levies StateTaxes/Levies

Basic Customs Duty Taxes on Liquors

Excise Duty on Tobacco products Toll Tax/ Road Tax

ExportDuty Environment Tax

Taxes on petroleum products Property Tax

Stamp Duties Purchase tax on food grains

Specific Central Cess like Oil Cess etc. Taxes on motor spirit & high speed diesel
Objectives of GST
One of the main objective of Goods & Service Tax (GST) would be to eliminate the cascading effects of
taxes on production and distribution cost of goods and services. The exclusion of cascading effects i.e. tax on tax
will significantly improve the competitiveness of original goods and services in market which leads to beneficial
impact to the GDP growth of the country. It is felt that GST would serve a superior reason to achieve the
objective of streamlining indirect tax regime in India which can remove cascading effects in supply chain till the

level of final consumers.

components of GST:
There are 3 taxes applicable under this system: CGST, SGST & IGST.

 CGST: Collected by the Central Government on an intra-state sale (Eg: transaction happening within
Andhra Pradesh)
 SGST: Collected by the State Government on an intra-state sale (Eg: transaction happening within
Andhra Pradesh)
 IGST: Collected by the Central Government for inter-state sale (Eg: Andhra Pradesh to Tamil Nadu)

In most cases, the tax structure under the new regime will be as follows:

Transaction New Old Regime

Regime

Sale within the CGST + VAT + Central Revenue will be shared equally between the Centre and the
State SGST Excise/Service tax State

Sale to another IGST Central Sales Tax + There will only be one type of tax (central) in case of inter-
State Excise/Service Tax state sales. The Center will then share the IGST revenue
based on the destination of goods.
Illustration: 1
 Let us assume that a dealer in Gujarat had sold the goods to a dealer in Punjab worth Rs. 50,000. The tax
rate is 18% comprising of only IGST.

In such case, the dealer has to charge Rs. 9,000 as IGST. This revenue will go to the Central Government.

 The same dealer sells goods to a consumer in Gujarat worth Rs. 50,000. The GST rate on the good is 12%.
This rate comprises of CGST at 6% and SGST at 6%.

The dealer has to collect Rs. 6,000 as Goods and Service Tax. Rs. 3,000 will go to the Central Government and
Rs. 3,000 will go to the Gujarat government as the sale is within the state.

Illustration: 2
Based on the above example of biscuit manufacturer along with some numbers, let’s see what happens to
the cost of goods and the taxes in the earlier and GST regimes.

Tax calculations in earlier regime:

Action Cost 10% Tax Total

Manufacturer 1,000 100 1,100

Warehouse adds label and repacks @ 300 1,400 140 1,540

Retailer advertises @ 500 2,040 204 2,244

Total 1,800 444 2,244

Along the way, the tax liability was passed on at every stage of the transaction and the final liability comes to
rest with the customer. This is called the Cascading Effect of Taxes where a tax is paid on tax and the value of
the item keeps increasing every time this happens.
Tax calculations in current regime:

Action Cost 10% Tax Actual Liability Total

Manufacturer 1,000 100 100 1,100

Warehouse adds label and repacks @ 300 1,300 130 30 1,430

Retailer advertises @ 500 1,800 180 50 1,980

Total 1,800 180 1,980

In the case of Goods and Services Tax, there is a way to claim credit for tax paid in acquiring input. What
happens in this case is, the individual who has paid a tax already can claim credit for this tax when he submits his
taxes.
In the end, every time an individual is able to claim input tax credit, the sale price is reduced and the cost price
for the buyer is reduced because of a lower tax liability. The final value of the biscuits is therefore reduced from
Rs. 2,244 to Rs. 1,980, thus reducing the tax burden on the final customer.
GST also brought with it a single nation-wide system of waybills by the introduction of “E-way bills”. This
system started on 1st April 2018 for Inter-state movement of goods and 15th April 2018 for intra-state
movement of goods in a staggered manner. By this system, manufacturers, traders & transporters are benefitted
by a common portal where e-way bills can be generated and presence of its visibility to all stakeholders in the
process of moving goods from the place of its origin to its destination. Tax authorities are also in vantage as this
reduces the time at check -posts and help reduce tax evasion.

GST Advantages and Disadvantages

The GST is a Value added Tax (VAT) is proposed to be a comprehensive indirect tax levy on manufacture,
sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on
goods and services by the Indian Central and State governments. Though GST is considered to be a historical
tax reform in India, it also has some demerits. We here would look into GST Taxation and deal with its
advantages and disadvantages.

GST Advantages
1. GST is a transparent tax and also reduce number of indirect taxes.
2. GST will not be a cost to registered retailers therefore there will be no hidden taxes and and the cost of
doing business will be lower.
3. Benefit people as prices will come down which in turn will help companies as consumption will increase.
4. There is no doubt that in production and distribution of goods, services are increasingly used or consumed
and vice versa.
 5. Separate taxes for goods and services, which is the present taxation system, requires division of transaction
values into value of goods and services for taxation, leading to greater complications, administration,
including compliances costs.
6. In the GST system, when all the taxes are integrated, it would make possible the taxation burden to be
split equitably between manufacturing and services.
7. GST will be levied only at the final destination of consumption based on VAT principle and not at various
points (from manufacturing to retail outlets). This will help in removing economic distortions and bring
about development of a common national market.
8. GST will also help to build a transparent and corruption free tax administration.
9. Presently, a tax is levied on when a finished product moves out from a factory, which is paid by the
manufacturer, and it is again levied at the retail outlet when sold.
10. GST is backed by the GSTN, which is a fully integrated tax platform to deal with all aspects of GST.

GST Disadvantages
1. Some Economist say that GST in India would impact negatively on the real estate market. It would add
up to 8 percent to the cost of new homes and reduce demand by about 12 percent.
2. Some Experts says that CGST(Central GST), SGST(State GST) are nothing but new names for Central
Excise/Service Tax, VAT and CST. Hence, there is no major reduction in the number of tax layers.
3. Some retail products currently have only four percent tax on them. After GST, garments and clothes
could become more expensive.
4. The aviation industry would be affected. Service taxes on airfares currently range from six to nine
percent. With GST, this rate will surpass fifteen percent and effectively double the tax rate.
5. Adoption and migration to the new GST system would involve teething troubles and learning for the
entire ecosystem.
GST Registration:
What is GST Registration?
Every supplier who is making a taxable supply of goods or services or both shall register in
every State/Union Territory from where he makes taxable supply if his aggregate turnover exceeds 20 lac (10 lac
for north eastern states) in a financial year.
Aggregate turnover means value of all taxable supplies (excluding value of inward supplies liable to tax on
reverse charge basis), exempt supplies, exports of goods and services or both and inter-state supplies of persons
having the same Permanent Account Number [PAN] to be computed on all India basis, but excludes Central
sales tax, State tax, Union Territory Tax, Integrated Tax and Cess.

Advantages of taking registration in GST:

1. Legally recognized as suppliers of goods or services

2. Tax paid on the input goods or services which can be utilized for payment of GST, i.e., ITC allowed to
registered persons.
3. Legally authorized to collect tax from his purchasers
4. Eligible to avail various other benefits and privileges rendered under the GST laws.

Mandatory GST Registration Criteria:

The following person are required to take registration under GST irrespective of turnover:
i. Person making interstate supplies
ii. casual taxable persons
 iii. Persons who are required to pay tax under RCM
iv. Person who are required to pay tax under sub-section (5) of section 9
v. Non-resident taxable persons making taxable supply Persons who are required to deduct tax under section
51
vi. Persons who make taxable supply of goods or services or both on behalf of other taxable persons whether
as an agent or otherwise Input Service Distributor
vii. Persons who supply goods or services or both, other than supplies specified under sub-section (5) of section
9, through such electronic commerce operator who is required to collect tax at source under section 52
viii. Every E-commerce operator
ix. Every person supplying OIDR services from a place outside India to a person in India, other than a
registered person
x. Notified Persons

Persons not required to obtain GST Registration:

i. an agriculturist, to the extent of supply of produce out of cultivation of land
ii. Person making supplies of goods or services that are not liable to tax under GST or wholly exempt under
GST.
iii. Individual advocates (including senior advocates)
iv. Individual sponsorship service providers (including players)

Multiple Registration Under GST:

A taxable person who has been granted multiple registrations under the earlier law on the basis of a single
PAN shall be granted only one provisional registration under GST.
PAN is mandatory for GST Registration. One person would be allotted a single registration in a State or Union
territory. However, there is an exception to the said provision which provides that if a person is having multiple
business verticals in a State or Union territory, he may be granted separate registration for each business
vertical.

What is GSTIN
Currently, any service provider who is registered under service tax law is assigned a ST registration
number by CBEC. Similarly, when any dealer registered under VAT laws a unique TIN number is issued by state
authorities.
Now, in the GST regime all the business entities registering under GST will be provided a unique identification
number known as GSTIN or GST Identification Number. The government will allot a state-wise PAN-based 15-
digit Goods and Services Taxpayer Identification Number (GSTIN). Also, existing taxpayers have to migrate
into GST and a unique GSTIN will also be allotted to them.
GSTIN Number Format:
GSTIN contains 15 digits which will be assign to each registered person and it is a state-wise PAN-based
Number.
 First two digits of GSTIN will represent the state code
 Next ten digits of GSTIN will belongs the PAN number registered person.
 Next two digits will be assigned based on the number of registration within a state.
 Last digit will be for check code
 There is no fee applicable for enrolment under GST and obtaining GSTIN.

GST Registration Eligibility Criteria’s

The following are some of the major GST registration eligibility criteria in India.
Turnover Criteria
“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 Permanent Account Number, to be
computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.

If an entity has an aggregate turnover of more than Rs.20 lakhs, GST registration is mandatory. In special
category state, the annual aggregate turnover threshold for GST registration is Rs.10 lakhs.

Inter-State Supply
If a supplier of goods supplies goods from one state to another, he/she would become liable for obtaining
GST registration, even if the annual aggregate turnover criteria is not satisfied. Earlier, GST registration was
mandatory even for suppliers of services when then provided inter-state supply. However, the GST Council later
amended the regulation and now, service providers can provide services of upto Rs.20 lakhs inter-state or intra-
state before having to obtain GST registration.

Supply through E-Commerce Platforms

Any person who supplies goods or services through an e-commerce platform is required to obtain GST
registration mandatorily irrespective of turnover. Hence, sellers on Flipkart, Amazon and other e-commerce
platforms must obtain registration to commence activity.

Causal Taxable Persons

Any person who undertakes supply of goods or services periodically or through a temporary stall or shop
must obtain GST registration mandatory, irrespective of annual aggregate turnover.
Voluntary Registration
In addition to the above, any person can obtain GST registration voluntarily irrespective of turnover or
any other criteria. Earlier, any person who obtained voluntary GST registration was not allowed to surrender
the registration for upto a year. However, this provision has been modified and now, voluntary GST registration
can be surrendered by the applicant at anytime.

GST Registration Types

There are various types of GST registration provided under the GST Act. While applying for a GST
registration, the taxpayer must be aware of the distinctions between the registration and select the right one.

Normal Taxpayer
This category of GST registration will be applicable for most of the taxpayer who are running a business
in India. To obtain normal taxpayer GST registration, the application would not have to pay a deposit. Also, a
registration provided under the normal category will not have an expiry date.

Composition Taxpayer
This type of GST registration can be obtained for those wishing to enroll under the GST Composition
Scheme. Taxpayers enrolled under the Composition Scheme can pay a flat GST rate. However, the taxpayer
would not be allowed to claim input tax credit.

Casual Taxable Person

Casual Taxable Person GST registration can be obtained by those proposing to setup a stall or seasonal
shop. To obtain a casual taxable person registration, the taxpayer must deposit an advance equal to the amount of
GST liability expected during the period in which the GST registration would be active. Casual taxable person
registration is normally provided for a period of up to 3 months and can be renewed or extended.

Know more about casual taxable person GST registration.

Non-Resident Taxable Person

Non-resident taxable person GST registration can be obtained by any person located outside of India
who is supplying goods or services to residents in India. To obtain non-resident taxable person GST
registration, the taxpayer must deposit an advance equal to the amount of GST liability expected during the
period in which the GST registration would be active. Non-resident taxable person GST registration is normally
provided for a period of up to 3 months and can be renewed or extended.

The above are the most common types of GST registrations in India. In addition to the above, other GST
registration types are as follows:

 GST Registration for Non-Resident Online Service Provider

 UN Body / Embassy / Other Notified Person
 Special Economic Zone Developer
 Special Economic Zone Unit
 GST TDS Deductor – Government Entities
 GST TCS Collector – E-commerce Companies

Documents Required for GST Registration

 The following is the list of documents required for obtaining GST registration:
Proof of Constitution of Business (Any One) Certificate of Incorporation

Photo of Stakeholder (Promoter / Partner) Photo of the Promoter/ Partner

Photo of the Authorised Signatory Photo

Proof of Appointment of Authorised Signatory Letter of Authorisation

(Any One)

Copy of Resolution passed by BoD/ Managing Committee and

Acceptance letter

Proof of Principal Place of business (Any One) Electricity Bill

Legal ownership document

Municipal Khata Copy

Property Tax Receipt

Proof of Details of Bank Accounts (Any One) First page of Pass Book

Bank Statement

Cancelled Cheque

GST Registration Procedure

GST registration can be done online through the GST Portal. On submission of a GST registration
application, GST ARN is provided immediately. Using the GST ARN, the application status can be checked and
queries if any can be replied by the applicant. Within 7 days of ARN generation, the taxpayer would receive GST
registration certificate and GSTIN.
Step 1: Go to the GST Portal

1. Access the GST Portal ->https://www.gst.gov.in/

2. Click on Services -> Registration > New Registration option.

Step 2: Generate a TRN by Completing OTP Validation

The new GST registration page is displayed. Select the New Registration option. In case you left a GST
registration application without completing, the section TRN number option can be used to continue to fill the
old application.

1. In the drop down list, select the Taxpayer type from the options provided.
2. In the State/UT and District drop down list, select the state for which GST registration is required and
district.
3. In the Legal Name of the Business (As mentioned in PAN) field, enter the legal name of your business/
entity as mentioned in the PAN database. There will be an automated check with the PAN database.
Hence, ensure the name is the same as in PAN. In case a wrong name is mentioned in PAN, apply for
correction of PAN first.
4. In the Permanent Account Number (PAN) field, enter PAN of your business or PAN of the
Proprietor. GST registration is linked to PAN. Hence, in case of company or LLP, enter the PAN of the
company or LLP.
5. In the Email Address field, enter the email address of the Primary Authorized Signatory. (Will be verified
in next step)
6. In the Mobile Number field, enter the valid Indian mobile number of the Primary Authorized
Signatory. (Will be verified in next step)
7. Click the PROCEED button.
Step 3: OTP Verification & TRN Generation
On submission of the above information, the OTP Verification page is displayed. OTP will be valid only for
10 minutes. Hence, enter the two separate OTP sent to validate email and mobile number.

 In the Mobile OTP field, enter the OTP you received on your mobile number.
 In the Email OTP field, enter the OTP you received on your email address.

Step 4: TRN Generated

On successfully completing OTP verification, a TRN will be generated. TRN will now be used to complete
and submit the GST registration application.

Step 5: Login with TRN

Now that TRN is generated, you can begin the GST registration process. In the Temporary Reference
Number (TRN) field on the GST Portal, enter the TRN generated and enter the captcha text as shown on the
screen. Complete the OTP verification on mobile and email. You will now be taken to the GST registration page
shown below:

Step 6: Submit Business Information

Various information must be submitted for obtaining GST registration. In the first tab, business details
must be submitted.

 In the Trade Name field, enter the trade name of your business.
 Input the Constitution of the Business from the drop-down list.
 Enter the District and Sector/ Circle / Ward / Charge/ Unit from the drop-down list.
  In the Commissionerate Code, Division Code and Range Code drop-down list, select the appropriate
choice.
 Select if you would like to opt for the Composition Scheme.
 Input the date of commencement of business.
 Select the Date on which liability to register arises. This is the day the business crossed the aggregate
turnover threshold for GST registration. Taxpayers are required to file the application for new GST
registration within 30 days from the date on which the liability to register arises.

Step 7: Submit Promoter Information

In the next tab, details of the promoters of the business must be submitted. In case of a company, the
directors information must be submitted. In case of proprietorship, the proprietors information must be
submitted. Details of up to 10 Promoters or Partners can be submitted in a GST registration application.

The following details must be submitted for the promoters:

 Personal details of the stakeholder like name, date of birth, address, mobile number, email address and
gender.
 Designation of promoter.
 DIN of the Promoter, only for the following types of applicants:
o Private Limited Company
o Public Limited Company
o Public Sector Undertaking
o Unlimited Company
o Foreign Company registered in India
 Details of citizenship
 PAN &Aadhar
 Residential address.
 Photo of promoter.
In case the applicant provides Aadhar, aadhar e-sign can be used for signing the GST returns instead of a digital
signature.

Step 8: Submit Authorised Signatory Information

The authorised signatory is a person nominated by the promoters of the company to be responsible for
filing GST returns of the company and maintaining the necessary compliance. The authorised signatory will
have full access to the GST Portal and will be able to undertake a wide range of transactions on behalf of the
promoters. The promoter of a company can also be an authorised signatory.

In case a promoter was selected as an authorised signatory in the previous section, this section will be auto-
populated with the relevant details. The details required for authorised signatory is same as that of the
promoters.

Step 9: Principal Place of Business

In this section, the details of principal place of business must be provided by the applicant. The Principal
Place of Business is the primary location within the State where a taxpayer’s business is performed. The principal
place of business is generally the address where the business’s books of accounts and records are kept and is often
where the head of the firm or at least top management is located. Hence, in case of company or LLP, the principal
place of business would be the registered office.

For the principal place of business enter the following:

 Enter the address details of the principal place of business.

 Enter the official contact details like Email address, telephone number (with STD Code), mobile number
field and fax number (with STD Code).
 Select the nature of possession of the premises.
If the principal place of business is located in SEZ or the applicant is SEZ developer, necessary documents/
certificates issued by Government of India are required to be uploaded by choosing ‘Others’ value in Nature of
possession of premises drop-down and upload the document.

In this section you will have to upload documents to provide proof of ownership or occupancy of the property as
follows:

 For Own premises – Any document in support of the ownership of the premises like Latest Property Tax
Receipt or Municipal Khata copy or copy of Electricity Bill.
 For Rented or Leased premises – A copy of the valid Rent / Lease Agreement with any document in
support of the ownership of the premises of the Lessor like Latest Property Tax Receipt or Municipal
Khata copy or copy of Electricity Bill.
 For premises not covered above – A copy of the Consent Letter with any document in support of the
ownership of the premises of the Consenter like Municipal Khata copy or Electricity Bill copy. For shared
properties also, the same documents may be uploaded.

Step 10: Additional Place of Business

In case you have additional place of business, enter details of the property in this tab. For instance, if you
are a seller on flipkart or other ecommerce portal and use the sellers warehouse, that location can be added as an
additional place of business.

Step 11: Details of Goods and Services

In this section, the taxpayer must provide details of top 5 goods and services supplied by the applicant.
This is just an indicative list and the business of the applicant will not be restricted in any way to the goods and
services mentioned in this part.
For goods supplied, provide the HSN code and for services, provide SAC code. In case, you have more than 5
goods or services, you can add the top 5 goods or services you are dealing with.

Step 12: Details of Bank Account

In this section, enter the number of bank accounts held by the applicant. If there are 5 accounts, enter 5.
Then provide details of the bank account like account number, IFSC code and type of account. Finally, upload a
copy of the bank statement or passbook in the place provided.

Step 13: Verification of Application

In this step verify the details submitted in the application before submission. Once verification is complete,
select the verification checkbox. In the Name of Authorized Signatory drop-down list, select the name of
authorized signatory. Enter the place from where the form is filled. Finally, digitally sign the application using
Digital Signature Certificate (DSC)/ E-Signature or EVC. Digitally signing using DSC is mandatory in case of
LLP and Companies.

Step 14: ARN Generated

On signing the application, the success message is displayed. You will receive the acknowledgement in
next 15 minutes on your registered e-mail address and mobile phone number. Application Reference Number
(ARN) receipt is sent on your e-mail address and mobile phone number. Using the GST ARN Number, you can
track the status of your GST registration application.
Amendment of registration

1. Where there is any change in any of the particulars furnished in the application for registration in FORM
GST REG-01 or FORM GST REG-07 or FORM GST REG-09 or FORM GST REG-10 or for UIN in
FORM GST-REG-13 either at the time of obtaining registration or UIN or as amended from time to time,
the registered person shall, within fifteen days of such change, submit an application, duly signed or verified
through EVC, electronically in FORM GST REG-14, along with documents relating to such change at the
Common Portal either directly or through a Facilitation Centre notified by the Commissioner.

2. a. Where the change relates to-

i. legal name of business;
ii. address of the principal place of business or any additional place of business; or
iii. addition, deletion or retirement of partners or directors, Karta, Managing Committee, Board of
Trustees, Chief Executive Officer or equivalent, responsible for day to day affairs of the business,-
which does not warrant cancellation of registration under section 29, the proper officer shall,
after due verification, approve the amendment within fifteen working days from the date of
receipt of application in FORM GST REG-14 and issue an order in FORM GST REG-15
electronically and such amendment shall take effect from the date of occurrence of the event
warranting amendment.
b. The change relating to sub-clause (i) and sub-clause (iii) of clause (a) in any State or Union territory
shall be applicable for all registrations of the registered person obtained under these rules on the same
PAN.
 c. Where the change relates to any particulars other than those specified in clause (a), the certificate of
registration shall stand amended upon submission of the application in FORM GST REG- 14 on the
Common Portal:
Provided that any change in the mobile number or e-mail address of the authorised signatory submitted
under rule 1, as amended from time to time, shall be carried out only after online verification through
the Common Portal in the manner provided under the said rule.
d. Where a change in the constitution of any business results in change of PAN of a registered person, the
said person shall apply for fresh registration in FORM GST REG-01.

3. Where the proper officer is of the opinion that the amendment sought under clause (a) of sub-rule (2) is either
not warranted or the documents furnished therewith are incomplete or incorrect, he may, within fifteen
working days from the date of receipt of the application in FORM GST REG-14 , serve a notice in FORM
GST REG-03, requiring the registered person to show cause, within seven working days of the service of the
said notice, as to why the application submitted under sub-rule (1) shall not be rejected.

4. The registered person shall furnish a reply to the notice to show cause, issued under subrule 3, in FORM GST
REG-04 within seven working days from the date of the service of the said notice.
5. Where the reply furnished under sub-rule (4) is found to be not satisfactory or where no reply is furnished in
response to the notice issued under sub-rule (3) within the period prescribed in sub-rule (4), the proper officer
shall reject the application submitted under subrule (1) and pass an order in FORM GST REG -05.

6. If the proper officer fails to take any action-

 a. within fifteen working days from the date of submission of application, or
b. within seven working days from the date of receipt of reply to the notice to show cause under sub-rule
(4),
the certificate of registration shall stand amended to the extent applied for and the amended certificate
shall be made available to the registered person on the Common Portal.

Cancellation of gst registration:

A GST registration obtained in India can be cancelled by the registered person or by an Officer or by the
legal heirs, in case of death of person registered under GST. GST registration cancellation is different from GST
Registration amendment. In this article, we look at the procedure for GST registration cancellation in detail.

Who Can Cancel GST Registration?

An Officer under GST can either on his own accord or an application filed by the registered person or by
legal heirs of the registered person , in case of death of such person, can cancel a GST registration. However, a
person who obtained GST registration voluntarily cannot apply for GST Registration cancellation before the
expiry of a one year from the effective date of registration.

A GST registration granted to a person can be cancelled by an Officer, if:

  The taxable person under GST does not conduct any business from the declared place of business; or
 Issues invoice or bill without supply of goods or services in violation of the GST Act and/or GST rules.

Prior to cancellation of registration, the Officer would issue a notice to such person whose GST registration is
liable to be cancelled, requiring show cause within 7 working days from the date of service of such notice as to
why the GST registration should not be cancelled. The registered person can reply to the show cause notice
within the prescribed time or the GST registration can stand cancelled.
Procedure for Cancellation of GST Registration
To cancel a GST registration, application must be submitted on the GST Common Portal in FORM GST REG-
16. Along with FORM GST REG-16, the following details need to be submitted:

 Details of inputs held in stock or inputs contained in semi-finished or finished goods held in stock and of
capital goods held in stock on the date from which cancellation of registration is sought.
 Details of any tax liability.
 Details of any GST payment, made against such liability.

If a GST registration is cancelled involuntarily, then the above documents along with the application for GST
Registration Cancellation and other relevant documents must be submitted on the GST Common Portal within
30 days.

On submission of an application for cancellation of GST registration, the GST officer is required to verify the
application and issue an order in FORM GST REG-19, within 30 days from the date of application.

Revoking a Cancelled GST Registration

In case a GST registration application is cancelled involuntarily by a GST Officer, an application for
revocation of cancellation of registration can be filed. All application for revocation of cancellation of GST
registration must be filed within 30 days of order of cancellation of GST registration on the GST common portal.
If a GST registration was cancelled due to failure in filing GST returns, then an application for revocation of
cancellation can be filed only after filing the GST returns and paying any amount due as tax, along with any
amount payable towards interest, penalty and late fee payable.

After filing the delayed GST returns and paying the penalty, an application can be made by a taxpayer for
revocation of cancellation of registration. The GST Officer would then verify the reasons for revocation of
cancellation of registration, and if satisfied about the grounds for revocation of cancellation of registration, he
would revoke the cancellation of registration.

Revocation of GST Registration Cancellation

The GST Act is very comprehensive and covers various situations a taxpayer may face with provision and
procedures. In this article, we look at the procedure for revocation of GST registration cancellation order along
with the applicable forms. The provision for revocation are contained under rule 23 of the CGST Rules, 2017.

Note: Revocation of GST registration can be initiated if a GST registration certificate has been cancelled by
GST authorities.

Time Limit for Revocation

Any registered taxable person can apply for revocation of cancellation of GST registration within a period
of 30 days from the date of service of order of cancellation of GST registration. It must be noted that the
application for revocation can be done only during the circumstances when the registration has been cancelled by
the proper officeron his own motion. Hence, revocation cannot be used when GST registration was cancelled
voluntarily by a taxpayer.

Application for Revocation

Application in FORM GST REG-21 needs to be filed by the registered person, for revocation of GST
registration, either directly or through a facilitation centre notified by the Commissioner.

Online Revocation Procedure

Following are the steps which a registered person needs to be followed, who wants to apply for revocation
online through the GST Portal:

1. Access the GST Portal at www.gst.gov.in.

2. In order to enter into the account, enter the username and appropriate password.
3. In the GST Dashboard, select services, under services select registration and further under registration
select application for revocation of cancelled registration option.
4. Select the option of applying for revocation of cancelled registration. In the select box, enter the reason for
revocation of GST registration cancellation. Further, you need to choose appropriate file to be attached for
any supporting documents and you need to select verification checkbox and select name of authorized
signatory and fill up the place filed box.
5. The final step would be to select SUBMIT WITH DSC OR SUBMIT WITH EVC box.
Processing of Application
When the proper officer is satisfied that the reason being provided for revocation of cancellation of
registration is appropriate, then, the officer will revoke the cancellation of registration.

The time period of revocation, by the proper officer, is 30 days from the date of application. The proper
officer is required to pass an order revoking the cancellation of registration in FORM GST REG-22.

Rejection of Application
If a GST officer is not satisfied with the revocation application, the officer would issue a notice in FORM
GST REG-23. On receipt of the notice, the applicant is required to furnish a suitable reply in FORM GST REG-
24 within a period of 7 working days from the date of service of the notice. On receipt of a suitable reply from the
applicant, the officer is required to pass a suitable order in FORM GST REG-05 within a period of 30 days from
the date of receipt of a reply from the applicant.

PLACE OF SUPPLY OF GOODS AND SERVICES

GST is all set to float its wings across India, and it is a high time that we start adapting to its rules and
provisions. Under GST, special attention is given to the reporting structure of all transactions, irrespective of the
fact that it is of goods or for services. There are three types of taxes under GST, CGST, SGST and IGST. All
these taxes are leviable whenever there is a movement of goods or services.

Movement of goods and services can be of 2 types:

 Within the State i.e. Intra-State
 Between Two States i.e. Inter-State
Intra-State movement attracts CGST and SGST whereas Inter-State movement attracts IGST.

In order to determine the levy of taxes based on Place of Supply, following two things are considered:
Location of Supplier: It is the registered place of business of the supplier
Place of Supply: It is the registered place of business of the recipient
In this article, we’ll cover the importance of place of supply, time of supply and value of supply. We’ll dig deeper
into place of supply rules and various aspects around it.

Understanding Place of Supply in GST

To determine the actual nature of the movement of goods and services, it is imperative to understand the “place
of supply” of such goods or services. It plays a pivotal role in identifying whether CGST & SGST or IGST will
be levied on any transaction.

Place of supply of goods and services have been given separate provisions. The location of the supplier and the
place of supply together define the nature of the transaction. The registered place of business of the supplier is
the location of the supplier, and the registered place of the recipient is the place of supply.
Here is an example:
Location of Service Receiver Place of supply Nature of Supply GST Applicable

Maharashtra Maharashtra Intra-state CGST + SGST

Maharashtra Kerala Inter-state IGST

Place of supply rules for Goods

1) Where the supply involves a movement of goods, the place of supply shall be determined by the location of
the goods at the time of final delivery.
For e.g. A manufacturer in Kolkata, West Bengal, has an order from a customer in Surat, Gujarat. The
manufacturer directs his branch in Mumbai, Maharashtra to ship the goods to Surat. In this case, place of supply
shall be Surat, Gujarat and thus entails an inter-state movement of goods and will attract levy of IGST.

2) Where the supply involves a movement of goods, on the direction of a third party, whether as an agent or
otherwise, the place of supply shall be the principle place of business of such third party, irrespective of the
place of delivery of goods.
For e.g. A dealer in Mumbai, Maharashtra sells products to a customer in Delhi. Delhi-based customer directs
the Mumbai seller to send the materials to Kolkata-based customer. Although the place of delivery is Kolkata,
since Delhi-based seller had directed such movement, then the place of supply shall be the principle place of
business, i.e. Delhi and thus, charge IGST on such movement.

3) Where the supply does not involve any movement of goods, then place of supply shall be the location of such
goods at the time of final delivery.
For e.g. A Ltd has its registered office in Hyderabad, Telangana, opens a branch in Bengaluru, Karnataka, and
purchases workstations from B Ltd. Whose office is in Bengaluru, Karnataka. Even though the same is, a supply
of goods but there is no movement of goods. Since the movement is intra-state, it will attract CGST and SGST.

4) Where the supply includes installation of goods at site, then place of supply shall be the place of such
installation.
For e.g. Installation of telephone towers or lift in an office building.

5) Where the goods are being supplied on board a vehicle, vessel, aircraft, or a train, i.e. on board a conveyance,
then place of supply shall be the first location at which the goods are boarded.
For e.g. Howrah to New Delhi Rajdhani starts its journey from Howrah, West Bengal and passes through many
states before ending its journey in New Delhi. The food served on board the train shall be considered as supply of
goods. Thus, place of supply shall be Howrah since it is the first location of the goods.

6) Any other cases not covered above will be determined further as per recommendations from the GST council
(yet to be finalised)
The above rules are defined for goods. The place of supply of services is separate and specific in nature. They go
as follows.

Place of supply rules for Services

 For an immovable property:Where such immovable property is located or supposed to be located

 Where both service provider and recipient are required to be physically present:Location of the service
provided
 In case of an event:The location where such event was held or amusement park is located
 Ancillary activities to the events:If the person is registered, then his location or if the person is unregistered,
then the place where the event was held
Note: Where the event is to be held across many States, then place of supply shall be treated as all the States in
which such services are being provided on a proportionate basis as per the terms of the contract. Where no such
contract exists, then on a reasonable basis or as may further be prescribed.

 Transportation of goods:If the recipient is registered, then his location and if unregistered, then location of
the goods from where they started for being delivered
 Passenger Transportation:If the recipient is registered, then his location and if unregistered, then location
from where the passenger embarks on his journey
 Supply of services on board a conveyance, vehicle, vessel, train or aircraft:The first point of departure for
that journey
 Telecommunication Services :-
1. Fixed leased line, Internet leased line, cable or dish antenna: Place of installation
2. Postpaid Mobile or Internet Connection: Billing Address of the recipient of service
 Prepaid Mobile or Internet Connection: Location where such pre-payment was made or vouchers are sold

Note: When such a recharge is made through Internet Banking or E-Wallets, then the place of supply of service
shall be the address of the recipient as on the record with the service provider.

 Banking or Financial Institutions to account holders:Location of the recipient of the services as per record
of the provider
 Banking or Financial Institutions to non-account holders:Location of the supplier of service
 Insurance:If the person is registered, then his location or if the person is unregistered, then the location of the
recipient as per records of the service provider.
 Restaurant, catering, personal grooming, beauty treatment, fitness and health services, cosmetic or
plastic surgery: Location where the service is provided

In all the above cases, where the location of the recipient cannot be identified, which is generally the fixed
establishment or registered office of the recipient, then the usualplace of residence of the recipient shall be
treated as the location of receipt.

Understanding the Importance of Bill To-Ship To w.r.t. above provisions

When there are 3 parties involved in a transaction, then the place of supply plays a crucial part in
determining which of the parties will pay tax. This is similar to point 2 above, where goods are moved from one
place to the other on the direction of a third party, then the place of supply shall be the principle place of business
of that third party.

Wherever the third party exists, accordingly, the inter-state and intra-state sale can be adjudged and taxed.

Time of Supply
Meaning of Time of Supply:
For the purpose of paying tax liability, point of taxation is required. Time of supply is nothing but, it is
point of taxation. When the supplies have been made at that time, point of taxation has arisen. To find out that
supplies have been made or not, we need to determine time of supply. Once time of supply occurred, a supplier is
required to discharge his GST liability.
There are some general provision and some specific provision for determining time of supply. Time of supply is
different for goods & services. If specific provision are applied to determine the time of supply then general
provision are irrelevant.

Once you have determined what to tax, whether CGST, SGST or IGST, then it is time to identify the “when to
tax.” It is another critical point in payment of taxes and regularizing the returns. Different rules and provisions
have been created for notifying the time at which tax becomes due.

For determining the time of supply in case of goods and services,

1. The date of issuance of invoice or,

2. Date of receipt of payment
Whichever is earlier.

Further, for item (b) above, the date of receipt of payment shall be,

1. The date of credit in bank account or,

2. Date at which the receiver actually entered the payment in his books of accounts
Whichever is earlier.
Where the amount received is in excess of the invoice, and then time of supply shall be treated from the date of
issuance of invoice for that extra amount.

For e.g. Maruti Enterprises issued invoice to Telga Informatics on 30th May 2017. Telga made a payment
to Maruti on 2nd June 2017 and further, Maruti credited the entry in their books on 3rd June 2017. In the above
example, time of supply shall be 30th May 2017.

Further, in case of reverse charge, things are a little bit different for goods and services. The time of supply shall
be earlier of the following:
1. Date of payment or
2. Date of receipt of goods or
3. Date immediately 30 days from the date of issue of invoice in case of goods (60 days in case of services)
If is still not possible to determine the correct date from the above options, then time of supply shall be the date
at which recipient makes an entry in his books of accounts.

Similarly, to determine the time of supply in case of receipt vouchers, it shall be,
1. The date on which the voucher is issued or
2. If the above cannot be ascertained, then the date on which the voucher is redeemed.
Point of time when supplier receives the payment or date of receipt of payment

The phrase “the date on which supplier receives the payment” or “the date of receipt of payment” means the
date on which payment is entered in his books of accounts or the date on which the payment is credited to
his bank account, whichever is earlier.

Time of issue of invoice for supply

As per section 31 of the CGST Act, an invoice for supply of goods needs to be issued before or at the
time of removal of goods for supply to the recipient, where the supply involves movement of goods.
However, in other cases, an invoice needs to be issued before or at the time of delivery of goods or while
making goods available to the recipient.
Similarly an invoice for supply of services needs to be issued before or after the provision of service but not
later than thirty days from the date of provision of service.

Time of supply of goods (Default Rule)

Earliest of the following dates:

• Date of issue of invoice by the supplier. If the invoice is not issued, then the last date on which the supplier
is legally bound to issue the invoice with respect to the supply
• Date on which the supplier receives the payment
Section 148 of the CGST Act, 2017, confers powers on the
government (on the recommendation of the GST Council) to notify certain classes of registered persons and
the special procedures to be followed by such persons including those with regard to registration, furnishing
of return, payment of tax and administration of such persons. In exercise of powers conferred by this section,
the government on the recommendations of the GST Council has notified the registered persons (who have
not opted for composition levy) as the class of persons who shall pay GST on outward supply of goods at the
time of supply specified in clause (a) of sub-section (2) of Section 12. Thus, in respect of supply of goods by
normal registered persons (other than composition dealers), the time of supply will be the issue of invoice (or
the last date by which invoice has to be issued in terms of Section 31) Therefore, all taxpayers (except
composition taxpayers) are exempted from paying GST at the time of receipt of advance in relation to supply
of goods. The entire GST shall be payable only when the invoice is issued for such supply of goods. The special
procedure will be applicable to this class of persons (registered persons making supplies of goods other than
composition dealers) even in situations governed by Section 14 of the Act (change in rate). Notification no.
66/2017-Central Tax dated 15.11.2017 may be referred to.

Time of supply of services (Default Rule)

Earliest of the following dates:

• Date of issue of invoice by the supplier (If the invoice is issued within the legally prescribed period under
section 31(2) of the CGST Act) or the date of receipt of payment, whichever is earlier
• Date of provision of service (If the invoice is not issued within the legally prescribed period under section
31(2) of the CGST Act) or the date of receipt of payment, whichever is earlier
• Date on which the recipient shows the receipt of service in his books of account, in case the aforesaid
two provisions do not apply
The supply of goods or services shall be deemed to have been made to the extent it is covered by the invoice
or by the payment, as the case may be. For example, Firm ‘A’ receives an advance ofRs. 2500/- on 29.07.17 for
goods worth Rs. 10000/- to be supplied in the month of September, then it is deemed that firm ‘A’ has made a
supply of Rs. 2500/- on 29.07.17 and tax liability on Rs. 2500/- is to be discharged by 20.08.17.
Although tax is payable on any advance received for a supply of goods or services, however for the
convenience of trade, it is provided that if a supplier of taxable goods or services receives an amount uptoRs.
1000/- in excess of the amount indicated on the tax invoice, then the supplier has an option to take the date
of issue of invoice in respect of such supply as the time of supply. For example, if a supplier has received an
amount of Rs. 1500/- against an invoice of Rs.1100/- on 25.07.17 and the date of invoice of next supply to the
said recipient is 14.08.17, then he has an option to treat the time of supply w.r.t Rs. 400/- either as 25.07.17 or
14.08.17.

Time of supply of goods when tax is to be paid on reverse charge basis

Earliest of the following dates:

• Date of receipt of goods
• Date on which the payment is entered in the books of accounts of the recipient or the date on which the
payment is debited in his bank account, whichever is earlier
• Date immediately following 30 days from the date of issue of invoice or any other legal document in lieu of
invoice by the supplier
However, if it is not possible to determine the time of supply in aforesaid manner, then the time of supply is
the date of entry of the transaction in the books of accounts of the recipient of supply.

Time of supply of services when tax is to be paid on reverse charge basis

Earliest of the following dates:

• Date of payment as entered in the books of account of the recipient or the date on which the payment is
debited in his bank account, whichever is earlier
• Date immediately following 60 days from the date of issue of invoice or any other legal document in lieu of
invoice by the supplier
However, if it is not possible to determine the time of supply in aforesaid manner, then the time of supply is
the date of entry of.the transaction in the books of accounts of the recipient of supply.

Time of supply of services in case of supply by Associated Enterprises located outside India

In this case, the time of supply is the date of entry in the books of account of the recipient or the date
of payment, whichever is earlier.

Time of supply in case of supply of vouchers:

A voucher has been defined in the CGST Act as an instrument where there is an obligation to accept it as
consideration or part consideration for a supply of goods or services or both, and where the goods or services
or both to be supplied or the identities of their potential suppliers are either indicated on the instrument itself
or in related documentation, including the terms and conditions of use of such instrument. Vouchers are
commonly used for transaction in the Indian economy. A shopkeeper may issue vouchers for a specific supply
i.e. supply which is identifiable at the time of issuance of voucher. In trade parlance, these are known as single
purpose vouchers. For example, vouchers for pressure cookers or television or for spa or haircut. Similarly a
voucher can be a general purpose voucher which can be used for multiple purposes. For example a Rs. 1000/-
voucher issued by Shoppers Stop store can be used for buying any product or service at any Shoppers Stop
store. The time of supply is different in case of single purpose voucher and in the case of general purpose
voucher.
Time of supply in the case of single purpose voucher i.e. case where supply is identifiable at the time of
issuance of voucher is the date of issue of voucher. However, in all other cases of supply of vouchers, the time
of supply is the date of redemption of voucher.
Time of supply of goods or services (Residual provisions)

In case it is not possible to determine the time of supply under aforesaid provisions, the time of supply
is:
• Due date of filing of return, in case where periodical return has to be filed
• Date of payment of tax in all other cases
Time of supply of goods or services related to an addition in the value of supply by way of interest, late fees
or penalty

Time of supply related to an addition in the value of supply by way of interest, late fee or penalty for
delayed payment of anyconsideration shall be the date on which supplier receives such addition in value. For
example, a supplier receives consideration in the month of September instead of due date of July and for
such delay he is eligible to receive an interest amount of Rs. 1000/- and the said amount is received on 15.12.17.
The time of supply of such amount (Rs. 1000/-) will be 15.12.17 i.e. the date on which it is received by the
supplier and tax liability on this is to be discharged by 20.01.18.

Value of Supply
After determining what and when of GST, it is time to determine “How much” of GST is to be paid.

The value of supply has been defined as the “transaction value” of the goods and services transacted between un-
related parties. The value of supply shall include the following:

1. Basic consideration for the goods and services

2. Any taxes, cess, duties, fees and charges under any Act
3. Any amount payable by the supplier for the recipient
 4. All ancillary or incidental expenses like packing, commission, etc.
5. Subsidies, not Central or State Government subsidies
6. Interest, penalty or late fee charged for delayed payment
7. Any discounts that are given for the supply of goods and services, which were not known earlier.
Other discounts, which are linked to specific invoices or were agreed upon at the time of entering into a contract,
shall be allowed as a deduction from transaction value.

Thus, after ravaging through all the above provisions, it is clear for a taxpayer to identify when to pay tax, how
much tax is to be paid and who will finally bear the tax burden. As such, place of supply, time of supply and the
value of supply, knit together, determine the total tax liability that needs to be cleared as per schedule.
It is necessary to determine the value of goods or services on which GST is levied. There may be charges other
than exact value of goods or services, which may be included or excluded in determination of the value of such
goods or services for the purpose of GST.
The value of the goods or services is determined according to Section 15 of CGST Act and Section 27 to 35 of
CGST Rules under Chapter IV.

As per Section 15 (1) of CGST Act, the value of goods or services is determined under two categories:

 Supplier and Recipient are related – Value is determined as per the Rule 28 of CGST Rules
 Supplier and Recipient are not related – Value is determined based on the transaction value which is the price
actually paid or payable for the said supply of goods or services or both, when the price is the sole consideration
for supply – Rule 27 to 35 (except Rule 28) of CGST Rules
 Value of goods or services includes the following – Sec 15(2):
 Any taxes, duties, cesses, fees and charges levied under any law for the time being in force other than CGST Act,
SGST Act, UGST Act and the Goods and Services Tax (Compensation to States) Act, if charged separately by
the supplier
 Any amount that the supplier is liable to pay in relation to supply but which has been incurred by the recipient
and not included in the price actually paid or payable for the goods or services or both
 Incidental expenses, including commission and packing, charged by the supplier to the recipient and any amount
charged for anything done by the supplier in respect of the supply of goods or services or both at the time of, or
before delivery of goods or supply of services
 Interest, late fee, penalty for delayed payment of any consideration of any supply paid by the recipient to the
supplier
 Subsidies directly linked to the price excluding subsidies provided by the Central Government and State
Governments – subsidy to be included in the value

Value of Discount – Sec 15(3)

GST is not levied on discounts when given before or at the time of supply and the same is indicated separately in
the Invoice.
If the discounts are given after the supply, the same should have been included as a term in the agreement either
before or at the time of supply and should be linked to relevant invoices. Input Tax Credit as is attributable to
the discount on the basis of document issued by the supplier to be reversed by the recipient.

Meaning of ‘Related Persons’

The following persons are deemed to be ‘related persons’ for the purpose of this Act:
 Officers or directors of one another’s businesses
 Legally recognised partners in business
 Employer and employee
 Any person who directly or indirectly owns, controls or holds 25% or more of the outstanding voting stock or
shares of both of them
 One of them directly or indirectly controls the other
 Both of them are directly or indirectly controlled by a third person
 Both of them, together, controls a third person directly or indirectly
 Member of the same family
 Legal persons
 Persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole
concessionaire, however described, of the other

Value of goods or services where the consideration is not wholly in money – Rule 27
Where the consideration for supply of goods or services is partially paid in money and partially in
exchange of goods or services, the value of supply shall be:
 Open market value
 If the open market value is not available, the value of supply is the sum total of consideration paid in money and
further amount in money as is equivalent to the consideration not in money, if such amount is known at the time
of supply
 If the value is not determinable applying the above rules, the value shall be the value of like kind and quality of
such goods or services
 If the value is not determinable applying the above rules, the value shall be the sum total of consideration in
money and further amount in money as is equivalent to consideration not in money by applying the rules 30 and
31 in that order
Example: Sale price of a car: Rs.200000, Open market value of the car: Rs.500000, Value of that kind of car:
Rs.450000, Value of old car: Rs.150000, Cost of acquisition: Rs.350000
 If the open market value is available – Value is Rs.500000 (open market value)
 If the open market value is not available – Value is Rs.350000 (200000+150000) (sale price + value of old car)
 If the value is not determinable as above two methods – Value is Rs.450000 (value of kind of car)
 If the value is not determinable as above three methods – Value is Rs.385000 (350000*110%) (Cost of acquisition
x 110%) (See Rule 30)

Value of goods or services between distinct or related persons other than through an agent – Rule 28
Where the supply is between distinct or related persons other than through an agent, the value of supply
shall be:
 Open market value
 If the open market value is not available, the value shall be the value of like kind and quality of such goods or
services
 If the value is not determinable applying the above rules, value shall be determined as per the rules 30 and 31 in
that order
If the goods are intended for further supply as such by the recipient, the value of such goods, at the option of the
supplier, shall be 90% of the price charged for the supply of goods of like kind and quality by the recipient to his
customers, not being a related person.
If the recipient is eligible to take full ITC, the value declared in the invoice shall be deemed to be the open market
value of the goods or services.

Exempted goods from gst:

What is exempted from GST?

Exemptions in GST. The government has classified certain goods and services asexempt from GST.
Unlike with zero-rated goods and services, business owners cannot claim ITC for the sale of exempted goods
and services.
What do you mean by exempted goods?
Nil rated goods and exempted goods are the same....as the definition of exemptsupply says-
“exempt supply” means supply of any goods or services or both which attracts nil rate of tax or which may be
wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and
includes.

Exemptions Under GST – Goods

Understanding the taxability also involves knowing whether item is exempt or not under GST. Due to the scope
of taxable supplies being widened under GST, GST Exemptions have clearly been defined. Not just knowing the
Exemption list, but also understanding the implication of item being exempt is important as certain conditions
are attached to it like reversing the ITC.

Also, what can be Nil rated today may become charged to a higher tax rate in the future. Hence, clearly demarking the various
terms such as Nil Rated, Exempt, Zero-rated and Non-GST supplies under GST is important.

1. What is Exempt Supply?

Exempt supplies comprise the following three types of supplies:

1. Supplies taxable at a ‘NIL’ rate of tax* (0% tax);

2. Supplies that are wholly or partially exempted from CGST or IGST, by way of a notification amending
Section 11 of CGST Act or Section 6 of IGST Act;
3. Non-taxable supplies as defined under Section 2(78) – supplies that are not taxable under the Act (For
Example Alcoholic liquor for human consumption.
Tax need not be paid on these supplies. Input tax credit attributable to exempt supplies will not be available for
utilization/setoff.
*Zero-rated supplies such as exports would not be treated as supplies taxable at ‘NIL’ rate of tax;

Central or the State Governments are empowered to grant exemptions from GST. Conditions are:

1. Exemption should be in public interest

2. By way of issue of notification
3. Must be recommended by the GST Council
4. Absolute exemption or conditional exemption may be for any goods and / or services of any specified
description.
5. Exemption by way of special order (not notification) may be granted exceptional circumstances.
6. Registered person supplying the goods and / or services is not entitled to collect tax higher than the
effective rate, where the supply enjoys an absolute exemption.
Classification of Exemptions:
Supplier may be exempt – Exemption to the person making supplies-i.e supplier, regardless of the nature
of outward supply.
Ex: Services by Securities and Exchange Board of India, Services by Charitable entities.
Certain Supplies may be exempt –Certain supplies due to their nature and type are exempted from GST. All
supplies that are notified would be eligible for the exemption. Here, irrespective of who the the supplier is,
exemption is allowed. not very much relevant.
Ex: Services by way of sponsorship of sporting events, Services by way of public conveniences

Types of Exemptions:
Absolute exemption: Exemption without any conditions.
Ex: Transmission or distribution of electricity by an electricity transmission or distribution utility, Services by
Reserve Bank of India.
Conditional Exemption: Exemption subject to certain conditions.
Ex: Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging
purposes, having declared tariff of a unit of accommodation less than ` 1000/- per day”.

Conditional or partial exemption:

Intra-State supplies of goods and/or services received from an unregistered person by a registered person is
exempted from payment of tax under reverse charge provided the aggregate value of such supplies received by a
registered person from all or any of the suppliers does not exceed ` 5000/- in a day.
Exemption under one GST Law and the effect on another GST Law:
Note that the exemption allowed under the CGST Act cannot be deemed to be applicable under IGST Act. In
other words, GST Exemption allowed in case of inter-State transactions is not the same as the GST exemptions
available in case of Intra-State transactions.

Exemption under Deemed to be exempt under SGST

CGST Act / UTGST Act

No auto-application of exemption
under IGST Act

Exemption under No auto-application of exemption

IGST Act under CGST Act

Important Notifications issued for exemption from payment of GST:

Notification No. Particulars

02/2017 Exempted supplies of around 149 items of

goods in terms of Section
Central Tax
11(1) of the CGST Act, 2017. Ex.
(Rate) dated Electricity, Salt, fresh fruits, plastic
28.06.2017
bangles, passenger baggage etc.
Amended vide Notification No.28/2017,
35/2017,42/2017, 7/2018, 19/2018 –
Central Tax (Rate)

12/2017 Exemption to supply specified services

under the CGST Act. More or less, all
Central Tax
the exemptions were available earlier
(Rate) dated
under the erstwhile service tax law
28.06.2017
Amended vide Notification No.21/2017,
25/2017, 32/2017 and 47/2017, 2/2018
– Central Tax (Rate)

Difference between Nil Rated, Exempt, Zero Rated and Non-

GST supplies
Supply Name Description
 Zero Rated Exports

Supplies made to SEZ or SEZ Developers.

Nil Rated Supplies that have a declared rate of 0% GST.

Example: Salt, grains, jaggery etc.

Exempt Supplies are taxable but do not attract GST and for which ITC cannot be claimed.
Example: Fresh milk, Fresh fruits, Curd, Bread etc.

Non-GST These supplies do not come under the purview of GST law.
Example: Alcohol for human consumption, Petrol etc.

LIST OF EXEMPTED GOODS WITH HSN:

. No. Description of Goods

1 0101 Live asses, mules and hinnies

2 0102 live bovine animals
3 0103 Live swine
4 0104 Live sheep and goats
5 0105 Live poultry, that is to say, fowls of the species Gallus domesticus, ducks,
geese, turkeys and guinea fowls.
6 0106 Other live animal such as Mammals, Birds, Insects
7 0201 Meat of bovine animals, fresh and chilled.
8 0202 Meat of bovine animals frozen [other than frozen and put up in unit container]
9 0203 Meat of swine, fresh, chilled or frozen [other than frozen and put up in unit
container]
10 0204 Meat of sheep or goats, fresh, chilled or frozen [other than frozen and put up
in unit container)
11 0205 Meat of horses, asses, mules or hinnies, fresh, chilled or frozen (other than
frozen and put up in unit container)
12 0206 Edible offal of bovine animals, swine, sheep, goats, horses, asses, mules or
hinnies, fresh, chilled or frozen [other than frozen and put up in unit
container]
13 0207 Meat and edible offal, of the poultry of heading 0105, fresh, chilled or frozen
[other than frozen and put up in unit container]
14 0208 Other meat and edible meat offal, fresh, chilled or frozen [other than frozen
and put up in unit container]
15 0209 Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted,
fresh, chilled or frozen [other than frozen and put up in unit container]
16 0209 Pig fat, free of lean meat, and poultry fat, not rendered or otherwise extracted,
salted, in brine, dried or smoked [other than put up in unit containers]
17 0210 Meat and edible meat offal, salted, in brine, dried or smoked; edible flours and
meals of meat or meat offal [other than put up in unit containers].
18 3 Fish seeds, prawn / shrimp seeds whether or not processed, cured or in frozen
state [other than goods falling under Chapter 3 and attracting 5%]
19 0301 Live fish.
20 0302 Fish, fresh or chilled, excluding fish fillets and other fish meat of heading 0304
21 0304 Fish fillets and other fish meat (whether or not minced), fresh or chilled.
22 0306 Crustaceans, whether in shell or not, live, fresh or chilled; crustaceans, in shell,
cooked by steaming or by boiling in water live, fresh or chilled.
23 0307 Molluscs, whether in shell or not, live, fresh, chilled; aquatic invertebrates
other than crustaceans and molluscs, live, fresh or chilled.
24 0308 Aquatic invertebrates other than crustaceans and molluscs, live, fresh or
 chilled.
25 0401 Fresh milk and pasteurized milk, including separated milk, milk and cream, not
concentrated nor containing added sugar or other sweetening matter,
excluding Ultra High Temperature (UHT) milk
26 0403 Curd; Lassi; Butter milk
27 0406 Chena or paneer, other than put up in unit containers and bearing a registered
brand name;
28 0407 Birds’ eggs, in shell, fresh, preserved or cooked
29 0409 Natural honey, other than put up in unit container and bearing a registered
brand name
30 0501 Human hair, unworked, whether or not washed or scoured; waste of human
hair
31 0506 All goods i.e. Bones and horn-cores, unworked, defatted, simply prepared (but
not cut to shape), treated with acid or gelatinised; powder and waste of these
products
32 0507 90 All goods i.e. Hoof meal; horn meal; hooves, claws, nails and beaks; antlers; etc.
33 0511 Semen including frozen semen
34 6 Live trees and other plants; bulbs, roots and the like; cut flowers and
ornamental foliage
35 0701 Potatoes, fresh or chill

What is GST Invoice?

According to the Tax Laws Lexicon, an Invoice means a list of goods shipped or sent, or services rendered
with prices and charges, a bill.
Who can raise a GST Tax Invoice?
A Tax invoice can only be raised by a registered taxable person for every supply of goods or services.
Raising tax invoice is compulsory under the CGST Act.
Tax invoice under Section 31 of the CGST act includes:
a. A document issued by an Input Service Distributor
b. Any supplementary invoice
c. A Revised invoice
A tax invoice shall include any revised invoice issued by the supplier in respect of a supply made earlier.

Mandatory fields of GST Tax Invoice Format:

1. Particulars: Tax invoice has to contain:

• Name, address and the GSTIN of the Supplier has to mention;

• Serial Number (Not exceeding 16 characters);
• Date of issue of invoice;
• Name, address and the GSTIN or Unique Identification Number, if registered, of the recipient and the address
of delivery;
• Name and address of the recipient and the address of delivery, along with the state name and the code of the
state, if such recipient is un-registered;
• HSN Code of Goods or Accounting Code of Services;
• Tax invoice should mention description of the goods or services;
• Quantity of goods and unit or Unique Quantity Code should be properly mentioned;
• Value of the goods or services or both supplied should be stated in the invoice;
• Taxable value of goods or services;
• Rate of tax and nature of tax (CGST, SGST, IGST or UTGST);
• Amount of tax charged has to be mentioned;
• Place of supply along with the name & code of the state;
• Whether tax is payable on reverse charge basis, has to be mentioned;
• Signature of Digital Signature of the supplier or his representative.

2. The tax charged on the goods or services or both and other particulars should be very specific and
crystal clear.

3. The Government vide Notification No. 12/2017 – CGST and 5/2017 – IGST dated 28th June 2017,
has specified the number of digits of HSN code to be specified on a tax invoice.
Sr. Particulars Code
No.
1. Turnover of up to Rupees One Crore Fifty Lakhs 0
2. Turnover of more than Rupees One Crore Fifty Lakhs 2
and up to Rupees Five Crores
3. Turnover of more than Rupees Five Crores 4
4. In case of exports / imports 8
It is mandatory to indicate the tax charged under GST regime unlike the current system of taxation wherein
invoices inclusive of tax could be raised.

Export Invoice Format in GST:

In case of exports of goods and services, the invoice shall mandatorily carry an endorsement
“SUPPLY MEANT FOR EXPORT OR SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR
AUTHORISED OPERATIONS ON PAYMENT OF INTEGRATED TAX” or
“SUPPLY MEANT FOR EXPORT OR SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR
AUTHORISED OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT
PAYMENT OF INTEGRATED TAX.”
It shall also contain the following details:
a. Name and address of the recipient
b. Address of delivery
c. Name of the country of destination

Time Limit for Issuing Tax Invoice:

For every registered person Closing of each day
Supply of Goods 30 days from the date of supply
Supply of Services

For services by Insurer 45 days from the date of supply

 company, banking companies of services.
& financial institutions
including NBFCs

For services between distinct a. Before or at the time such

persons by Insurer company,
banking companies &
financial institutions
including NBFCs, including
Non-Banking Financial
Companies,
Telecom Operators or any
other class that may be notified
by the Govt.
supplier records the same in his
books of account
OR
b. Before the expiry of the
quarter during which the supply
was made.

Input Tax Credit:

This is the most common word with which we associate present day taxation system. Lesser the cascading effect
of taxes, better is the taxation system. In an ideal taxation system, taxes never form part of cost of the product,
until the goods or services reach the final consumer.

This is possible only when credit of any taxes paid in the course of business, by the recipient of goods or services
is allowed to him. Thus, entire taxes paid by him are set off against his output tax liability and there is no
cascading impact of taxes.
The taxes attach themselves with the cost only when the goods or services are finally consumed by the consumer.
Input Tax Credit Mechanism in GST:
ITC is a mechanism to ensure that the supplier needs to pay GST in cash only on the value addition. ITC
mechanism thereby avoids cascading of taxes that is ‘tax on tax’. Under the previous system of indirect taxation,
credit of taxes being levied by Central Government was not available as set-off for payment of taxes levied by
State Governments, and vice versa.

One of the most important features of GST is that the entire value chain would be subject to only a single
indirect tax i.e. GST. GST would comprise of Centre and State/UT levies but will be collected as a single tax at a
uniform rate for both inter-State and intra-State supplies. GST will thus subsume a number of State and Centre
taxes into a single tax thereby allowing ITC of tax paid at every stage to be available as set-off for payment of
tax at every subsequent stage.

Let us understand how ‘cascading’ of taxes took place in the previous tax regime. Central excise duty charged on
inputs used for manufacture of final product could be availed as credit for payment of Central Excise Duty on the
final product.

For example, to manufacture a ‘pen’, the manufacturer requires plastic granules, refill tube, metal clip, etc. All
these ‘inputs’ were chargeable to central excise duty. Once a ‘pen’ is manufactured by using these inputs, the pen
is also chargeable to central excise duty. Let us assume that the cost of all the above-mentioned inputs is Rs.10/-
on which central excise duty @10% is paid, i.e. Rs.1/-. Now the manufacturer of the pen can take input tax credit
of the duty paid on inputs, i.e. Rs.1/- which can be utilised for payment of duty on the pen. If the cost of the
manufactured pen is Rs.20/-, the central excise duty payable on the pen @10% would be Rs.2/-. So he will use
Rs.1/- paid on inputs (by debiting his ITC credit account) and will only pay Rs.1/- through cash (1+1=2), the
price of the pen becomes Rs.22/-. In effect he actually pays duty of Rs.1/- only on the ‘value added’ over and
above the cost of the inputs.

However, when the pen is sold by the manufacturer to a trader he is required to levy VAT on such sale. But
under the previous system, since these were two separate levies by Central and State government respectively
with no statutory linkage between the two, VAT was to be paid on the entire value of the pen, i.e. Rs.22/-, which
actually includes the central excise duty to the tune of Rs.2/-. This is cascading of taxes or tax on tax as now
VAT is not only paid on the cost of the pen i.e. Rs.20/- but also on tax component i.e. Rs.2/-.

Goods and Services Tax (GST) would mitigate such cascading of taxes. Under this new system most of the
indirect taxes levied by Central and the State Governments on supply of goods or services or both would be
combined together under a single levy. GST comprises of the following taxes:
1. Central Tax on intra-state or intra-union territory without legislature supply of goods or services or both.
2. State Tax on intra-state (including in 2 Union Territories with legislature) supply of goods or services or
both.
3. Union Territory Tax on intra-union territory supply of goods or services or both.
4. Integrated Tax on inter-state supply of goods or services or both. In case of import of goods also the present
levy of Countervailing Duty (CVD) and Special Additional Duty (SAD) would be replaced by Integrated tax.

The protocol to avail and utilise the credit of these taxes is as follows:
Credit of To be utilised first for May be utilised further for
payment of payment of
CGST CGST IGST

SGST/UTGST SGST/UTGST IGST

IGST IGST CGST, then SGST/UTGST

Credit of Central Tax (CGST) cannot be used for payment of State Taxes (SGST/UTGST) and vice versa.
Eligibility and Conditions for taking Input Tax Credit (ITC)
Following are the key points which should be kept in mind while determining eligibility of Input Tax
Credit on Input Services and Inputs:

1.The registered person is entitled to take credit of input tax charged on any supply of goods or services or both
to him which are used or intended to be used in the course or furtherance of his business.

2. The registered person should in possession of a tax invoice or debit note issued by a registered supplier or such
other tax paying documents as may be prescribed.

3. The registered person has received the goods or services or both.

Explanation.—For the purposes of this clause, it shall be deemed that the registered person has received the
goods where the goods are delivered by the supplier to a recipient or any other person on the direction of such
registered person, whether acting as an agent or otherwise, before or during movement of goods, either by way
of transfer of documents of title to goods or otherwise;

4. The tax charged in respect of supply has been actually paid to the Government, either in cash or through
utilisation of input tax credit admissible in respect of the said supply.

5. The registered person has furnished the return under section 39 of the CGST Act 2017.

6. Where the goods against an invoice are received in lots or installments, the registered person shall be entitled
to take credit upon receipt of the last lot or installment.

7. Where a recipient fails to pay to the supplier of goods or services or both, other than the supplies on which tax
is payable on reverse charge basis, the amount towards the value of supply along with tax payable thereon within
a period of 180 days from the date of issue of invoice by the supplier, an amount equal to the input tax credit
availed by the recipient shall be added to his output tax liability, along with interest thereon.
8. The recipient shall be entitled to avail of the credit of input tax on payment made by him of the amount
towards the value of supply of goods or services or both along with tax payable thereon.

9. Where the registered person has claimed depreciation on the tax component of the cost of capital goods and
plant and machinery under the provisions of the Income-tax Act, 1961, the input tax credit on the said tax
component shall not be allowed.

10. A registered person shall not be entitled to take input tax credit in respect of any invoice or debit note for
supply of goods or services or both after the due date of furnishing of the return under section 39 for the month
of September following the end of financial year to which such invoice or invoice relating to such debit note
pertains or furnishing of the relevant annual return, whichever is earlier.

How to calculate Input Tax Credit?

Let’s consider an example on how to calculate Input Tax Credit:
Suppose you have a business. The service or product you sell attracts a tax of 18%. You use input services or
goods during your business. The tax due from you (of 18%) can be adjusted to the taxes paid already by you on
the purchase of such inputs. The manufacturers add taxes only for the value addition done and not on the total
product value.
Let’s consider an example of a steel utensils manufacturer who manufactures utensils like spoons, plates, etc.
Assume that the manufacturer had bought an INR 500 worth of raw steel to make a pressure cooker and INR 100
worth other raw materials. Let’s assume that the GST for steel is 18%. Also, assume that the GST he paid is 28%
of other raw materials.
Hence, the manufacturer has paid Rs. 28 on other raw materials and Rs. 90 on raw steel which he used as inputs.
So, the total input tax paid was INR 118 by the manufacturer.
Now, after considering the cost of manufacturing steel pressure cooker using the raw materials and including a
decent profit, he decided to sell the pressure cooker to a distributor at INR 800 + GST.
Assume that the steel utensil attracts a GST of 18%.
Now the tax on it will be INR 144. So the manufacturer will invoice the pressure cooker for INR 944.
Hence, the manufacturer is collecting INR 144 as GST on sale from the distributor. The manufacturer had paid
INR 118 towards GST during the purchase of his input raw materials. Hence, out of INR 144 of GST, the
manufacturer can now claim a credit of INR 118 which he already paid towards GST for inputs and deposit the
difference of INR 26 with the government.
This tax credit is available at all succeeding stages, retailers and distributors charge GST and can claim the Input
Tax Credit.

How to claim Input Tax Credit (ITC)?

The following conditions have to be met to be entitled to Input Tax Credit under the GST scheme:
1. One must be a registered taxable person.
2. One can claim Input Tax Credit only if the goods and services received is used for business purposes.
3. Input Tax Credit can be claimed on exports/zero-rated supplies and are taxable.
4. For a registered taxable person, if the constitution changes due to merger, sale or transfer of business, then the
Input Tax Credit which is unused shall be transferred to the merged, sold or transferred business.
5. One can credit the Input Tax Credit in his Electronic Credit Ledger in a provisional manner on the common
portal as prescribed in model GST law.
6. Supporting documents – debit note, tax invoice, supplementary invoice, are needed to claim the Input Tax
Credit.
7. If there is an actual receipt of goods and services, an Input Tax Credit can be claimed.
8. The Input Tax should be paid through Electronic Credit/Cash ledger.
9. All GST returns such as GST-1, 2,3, 6, and 7 needs to be filed
How Input Tax Works Under GST
Suppose Mr. A is a seller. He sells goods to Mr. B. The buyer Mr. B is now eligible to claim the purchase
credit using his purchase invoices.
This is how it works:
1. A uploads all his tax invoices details as issued in GSTR-1.

2. The details uploaded by Mr. A is automatically populated or reflected in GSTR-2A. This same data will get
reflected when Mr. B files the GSTR-2 returns which are nothing but the details of his purchase.

3. The details of thesale are then accepted and acknowledged for by Mr. B, and subsequently, the purchase tax is
credited to Mr. B’s ‘Electronic Credit ‘ He can use this to adjust it later for future output tax liability and receive a
refund.

What is the manner of availing ITC On Capital goods?

Unlike earlier Laws,100% of the credit is allowed in the 1st year of purchases.
If the depreciation is charged on the GST portion(i.e. credit) of capital goods, ITC will not be allowed.
Example:
Cost GST Total cost Deprecation charged on ITC available
500 50 550 550 nil
500 25 525 500 25

Under what situations one CAN NOT claim Input Tax Credit (ITC)?

S No Items Exceptions

Credit on Motor vehicles and other conveyances purchased or
1 Expenses related to the normal use of motor vehicles for
office purposes cannot be claimed as an input tax credit.
Taxable person is in the business
of sale and purchase of new or
second-hand motor vehicle i.e
Dealer of the motor vehicle or
Providing the service of
transportation of passengers(Ola,
Uber)/ goods(GTA) or
The motor vehicle is used by the
driving school.

An inward supply of aforesaid

goods or services or both is used
by a registered person for making
an
outward taxable supply of the
Supply of food and beverages, outdoor catering, beauty same category of goods or services
2 treatment, health service and cosmetic and plastic surgery or both or as an element of
a taxable composite or mixed
supply then the input tax credit
will be available.Example- When
the outdoor catering service is
subcontracted then the main
contractor can avail
input on tax charged by sub-
 contractor because the service
received is used for making the
outward supply of the same
category.

The Government notifies the

Rent-a-cab, Life and health insurance
3 in force or The receiver of service
services which are obligatory for
an employer to provide to its
employees
under any law for the time being
provides the same line or category
of service example- Government
made a law for the companies to
provide cab facility for there
female employees.

Travel benefit to employees as leave or home travel

concession
4
Example – Tour arranged for the employee

Works contract service for construction of immovable Works contractor uses the service
5
property of another contractor, then the
 former can claim the ITC.

Construction of immovable property which includes

reconstruction, renovation, additions or repairs.
Goods/services used for construction on his own account or
even when it is used for the furtherance of business.
6
Example- Mr.A constructing his own office, ITC on goods or
services used for the construction of the office cannot be
claimed by Mr.A

In case if Non-resident taxable

ITC will not be available for the goods/services received by
person imports goods or service,
7 the non-resident taxable person.
then ITC will be allowed.

Goods/services received for personal consumption

8

Goods stolen /destroyed/ written off/distributed as a gift or

9 free samples
 Dealer under composition scheme- Neither the dealer nor the
10 receiver of goods from the dealer can claim ITC

Membership in a club, Health, and Fitness centre

11 Example- Company paying the gym fees for its employees

What are the documents and forms required to claim Input Tax Credit?
Each applicant will require the following documents to claim Input Tax Credit under GST:
1. Supplier issued invoice for supplying the services and goods or both according to GST law.

2. A debit note issued by the supplier to the recipient in case of tax payable or taxable value as specified in the
invoice is less than the tax payable or taxable value on such supplies.

3. Bill of entry.

4. A credit note or invoice which is to be issued by the ISD (Input Service Distributor) according to the GST
invoice rules.

5. An invoice issued like the bill of supply under certain situations instead of the tax invoice. If the amount is
lesser than INR 200 or in conditions where the reverse charges are applicable according to the GST law.

6. A supplier issued a bill of supply for goods and services or both as per the GST invoice rules.
The above documents prepared as per the GST invoice rules should be furnished while filing the GSTR-2 form.
Failure to present these forms can lead to either rejection or resubmission of the request.
For taxes paid on goods and services or both due to any fraud or due to order for the demand raised, suppression
of facts or wilful misstatement, Input Tax Credit cannot be claimed.
Since input credit will be available to the seller at each stage, the input tax credit is expected to bring down the
overall taxes charged on the product at present. So, if input credit mechanism works efficiently, final consumers
may see the cost reduction.

Important points regarding ITC

1. For advance payment, the supplier is required to pay tax on such advance receipt but in case of the recipient,
he can avail the ITC only when tax invoice is issued and goods/services are received.

2. ITC cannot be availed on the basis of a photocopy of the valid document.

3. SGST paid in one state cannot be utilized as credit for payment of SGST of another state.

4. For payment of interest and penalty Input tax credit cannot be utilized in other words it should be paid using
electronic cash ledger.

5. For claiming ITC goods/ services must be actually received. Hence the goods or services received by the
agent or the job worker will be assumed to be received by the recipient.

6. On receipt of invoice by the recipient, invoice amount must be paid within 180 days from the date of invoice. If
the recipient fails to pay so, the amount taken as credit will be reversed and output tax will be payable on such
amount. Yet on the later date, if the recipient pays the invoice amount, he can again claim the credit.

7. On filing the form GSTR-2 (inward supplies details) by the recipient, the credit claimed in the return will be
credited to electronic credit ledger on the provisional basis. The recipient can file Form GSTR-3 and pay self-
 assessed tax by taking credit of input available in electronic credit ledger. After filling of form GSTR-3 by
both supplier and recipient system carries out the matching process. If the supplier has paid the tax on the
goods/services, ITC will be allowed to the recipient. In case during the matching process, any mismatch is
found due to-
a) duplication of claim or
b) If the input claimed by the recipient is in excess of output declared by the supplier,
then, the excess amount will be added to the output tax liability of the recipient and the tax amount will be
required to be paid along with the interest.

8. In case if goods (inputs and Capital goods both) has been received in installment or lot against a single invoice
then input can be availed on the receipt of last installment or lot.

9. GST paid under reverse charge can also be utilized as ITC

10. If goods or services purchased/received are used for both business and non-business purpose, then only part of
ITC relating to goods/service used for business purpose will be allowed as a credit.Even in case of taxable and
exempted goods/services, only the part relating to taxable goods/service will be allowed as a credit.

11. Consider what happens today. A manufacturer who is compliant under Central Excise, Service Tax, and VAT
has to file returns as specified by each of the states. The manufacturer has to deal with returns, annexures, and
registers for Excise, Service tax and VAT with monthly, quarterly, half-yearly and yearly periodicity.

12. With GST in place, it does not matter whether you are a trader, manufacturer, reseller or a service provider,
you only need to file GST returns.

13. Wow! This sounds good. Let us understand different types of return forms in GST.
14. Under
GST, there are 19 forms for filing of returns by tax payers. All these forms are required to be e-filed.
The details of each form are listed below along with details of applicability and periodicity.

Regular Dealer
Form Type Frequency Due Date Details to be Furnished

Furnish details of outward supplies of taxable goods and/or

Form GSTR-1 Monthly 10th of succeeding month
services affected

Auto-populated details of inward supplies made available to

Form GSTR-
Monthly On 11th of succeeding Month the recipient on the basis of Form GSTR-1 furnished by the
2A
supplier

Details of inward supplies of taxable goods and/or services

for claiming input tax credit. Addition (Claims) or
Form GSTR-2 Monthly 15th of succeeding month
modification inForm GSTR-2A should be submitted in Form
GSTR-2.

Details of outward supplies as added, corrected or deleted by

Form GSTR-
Monthly 17th of succeeding month the recipient in Form GSTR-2 will be made available to
1A
supplier

Form GSTR-3 Monthly 20th of succeeding month Monthly return on the basis of finalization of details of
 outward supplies and inward supplies along with the payment
of amount of tax

Form GST Communication of acceptance, discrepancy or duplication of

Monthly —
MIS-1 input tax credit claim

Form GSTR- Notice to a registered taxable person who fails to furnish

— 15 Days from Default
3A returns

Annual Return – furnish the details of ITC availed and GST

Form GSTR-9 Annually 31st Dec of next fiscal
paid which includes local, interstate and import/exports.

Composite Tax Payer

Return Type Frequency Due Date Details to be Furnished

Details of inward supplies made available to the recipient

Form GSTR-
Quarterly — registered under composition scheme on the basis of Form
4A
GSTR-1 furnished by the supplier

Furnish all outward supply of goods and services. This

Form GSTR-4 Quarterly 18th of succeeding month includes auto-populated details from Form GSTR-4A, tax
payable and payment of tax.

Form GSTR- Furnish the consolidated details of quarterly returns filed

Annual 31st Dec of next fiscal
9A along with tax payment details.

The Return Process

 The taxpayer must fill the GSTR-01 form in case of Sales Register on or before 10th day of the month.
 In the case of Purchase Register he will be filling GSTR-02 on or before 15th day of the month.
 After that monthly Return will be available i.e. GSTR-03 on or before 20th day of the month.While the
GSTR-09 for an annual return which will be file on or before 31st December at the end of the Y.
The Return Process

 The taxpayer will have to fill sales return to form of GSTR-01 on or before 10th day of the month.
 Then there will be two forms, for quarterly return there is GSTR-04 and
 For annual return there is GSTR-09A.