Key Notes

  • CGST – Central GST, to be collected by the Centre and applicable on supplies within the State
  • Jurisdictional issues in GST
  • Impact of GST in the increase in FDI
  • All about GST Council
  • Brief Note on Taxation Laws (Amendment) Bill, 2017
  • 101st Amendment of the Constitution
    • Article 246
    • Article 269 A
    • Article 366(12A)
    • Artice 286

Interstate transactions include exports, SEZ, etc.

Principles of GST

The scope of supply, levy & Collection

  • The subject could be anything – services, goods or goods as services
  • Supply – included, implied, excluded
  • Place – inter-state, intra-state
  • Time – Specified for goods, specified for services
  • Levy is based on Sec.9 of CGST and Sec.5 of IGST
  • GST Rates – Rate of duty is separate tax rate for precious metals
  • Reverse charge – 9(3) – Compulsory and 9(4) – Unregistered dealer purchases – is being exempted till Sep. 19
  • URD purchases
  • E-commerce operator  – services supplied through them

The concept of Supply – Sec. 7 GST

  • Supply of goods and services
  • Supply to be in the course or furtherance of business
  • Supply to be for a consideration

Section 7(1)(a) – All forms of supply of goods and/ or services, for a consideration, in the course or furtherances of business – such as sale, transfer, barter, exchange, license, rental, lease or disposal

Section 7(1)(b) – Importation of service, – for a consideration, – whether or not in the course or furtherance of business

Section 7(1)(c) – Supplies specified*

  • To be treated as supplies made without a consideration

*Schedule I:

  • Permanent transfer/disposal
  • Supplies between related persons/distinct persons in the course or furtherance of business
  • Supply of goods by the principal (or agent) to the agent (or principal)
  • Importation of service from a related person, etc.
  • Supply between business verticals
  • Supply between branches located in different states
  • A gift to employee valued more than Rs.50,000/- is taxable in a FY

Sec 7(2)

  • Activities note treated neither as the supply of goods/services
  • Activities by CG/SG/etc.

Levy – Goods and Services

Goods

  • means every kind of movable property
  • other than money
  • other than securities
  • includes actionable claims – debtor, lottery, money recovery from the bank
  • NO specific exclusion for intangible property (trademark, ip, etc)

Services

  • Anything other than goods is a service
  • Other than money
  • Other than securities
  • Includes activity of changing of money from one form to another for a consideration

Valuation of supply

  • Business – a type of the business
  • Place of business
  • Location of supplier
  • Person-taxable person
  • Centralized registration – No single registration is allowed
  • Goods or services
    • Rights-to-occupy land
    • Works contracts
    • Free-of-charge supplies
  • Types of GST Transaction
    • Supply or non-supply
    • Taxable or non-taxable
    • Exempt of zero-rated
    • Taxable but not in the business
  • Payment of tax

Schedule 2:

  • Job work is a service
  • To classify a good or service – refer Schedule 2

Composite Supply or Mixed Supply

  • What is Composite Supply
    • Composite Supply – Sec. 2(30)
    • 2 or more goods or services or a combination of goods and services
    • which are naturally bundled and supplied in conjunction with the trade of the business
    • with each other in the ordinary course of business
    • one of which is a principal supply
      Illustration: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is the principal supply.
  • What is Mixed Supply?
    • Mixed Supply – Sec. 2(74)
    • Means two or more individual supplies of goods or services, or any combination thereof
    • made in conjunction with each other by a taxable person for a single price
    • where such supply does not constitute a composite supply
    • Illustration: A supply of a package consisting of canned foods, sweets, chocs, cakes, dry fruits and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent.

Works contract – Sec. 2 (119)

  • includes a contract for  building,  construction, fabrication, completion, erection, installation
  • fitting out, improvement, modification, repair, maintenance, renovation, alteration, commissioning
  • of any immovable property
  • wherein the transfer of property in goods is involved in the execution of such contract

Supply

  • Included supplies, implied supplies (Sch. I), excluded supplies
  • Chargeability to tax
  • Supply characterization

Types of supplies

  • Zero-rated: Exports, Supply to SEZ
  • Exempt: Non-taxable – how much is the exempted
  • Non-Taxable:

Intra-State Supply

  • One tax – IGST (higher rate)

Input credit & setoff

  • No differentiation between goods or services

Filing of returns

  • Uniform Cutoff date
  • Uniform formals for filing for CGST, SGST & IGST
  • Returns shall be processed and credits shall be validated simultaneously
  • Center and states have jurisdictions