Notes - Notes on clauses - Integrated Goods And Services Tax Act, 2017

Notes on clauses Clause 1 provides for short title, extent and commencement of the proposed Act. Clause 2 defines various terms and expressions used in the proposed Act. Clause 3 provides for appointment of Commissioners and other class of officers as may be required for carrying out the purposes of the proposed Act. Clause 4 provides for authorisation of State tax and Union territory tax officers, subject to certain exceptions and conditions as shall be notified by the Central Government on recommendations of the Council, to be proper officers for the purposes of the proposed Act. Clause 5 provides for levy and collection of integrated tax on all inter-State supplies of goods or services or both except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 of the Central Goods and Services Tax Act at a rate not exceeding forty per cent. It further provides that integrated tax on goods imported into India shall be levied and collected under section 3 of the Customs Tariff Act, 1975, at the time and in the manner in which customs duty shall be collected under the provisions of the Customs Act, on a value as determined under the provisions of the Customs Tariff Act. This clause also provides that - (i) integrated tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel to be levied with effect from a date notified by the Central Government on the recommendations of the Council; (ii) the Central Government to notify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both, on the recommendations of the Council; (iii) the integrated tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis; (iv) the Central Government may notify categories of services, the tax on inter-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, on the recommendations of the Council. Clause 6 confers powers on Central Government to exempt either absolutely or conditionally goods or services or both of any specified description from the whole or part of the integrated tax, on the recommendations of the Council. This clause also confers powers on the Central Government to exempt from payment of tax any goods or services or both, by special order, on which tax is leviable on the recommendations of the Council. Clause 7 provides for instances where a supply of goods or services or both will be considered as inter- State supply. Clause 8 provides for instances where a supply of goods or services or both will be considered as intra- State supply. Clause 9 provides for supplies made in territorial waters to be deemed to be made in the States or Union territories where the nearest point of the appropriate baseline is located. Clause 10 provides for the place of supply for all supplies of goods other than those goods which are imported into or exported out of India. Clause 11 provides for the place of supply for all supplies of goods which are imported into or exported out of India. Clause 12 provides for the place of supply for all supplies of services where location of supplier and recipient is in India. Clause 13 provides for the place of supply for all supplies of services where location of supplier or location of recipient is outside India. Clause 14 provides for deeming the supplier of services located in non-taxable territory to be liable to pay tax on the online information and database access or retrieval services by any person located in a non-taxable territory and received by a non- taxable online recipient. Clause 15 provides for refund of integrated tax paid on supply of goods to tourists leaving India. Clause 16 provides for zero rating of certain supplies namely exports and supplies made to Special Economic Zone Unit or Special Economic Zone developer and the manner of zero rating. Clause 17 provides for apportionment of integrated tax and settlement of funds between the Central and State Government. Clause 18 provides for utilisation of credit of integrated tax availed under the proposed Act for payment of central tax, Union territory tax or State tax. Clause 19 provides for refund of integrated tax in situations where inter-State supplies are subsequently held to be intra-State supplies. Clause 20 provides for application of specific provisions of the Central Goods and Services Tax Act to the proposed Act. Clause 21 provides that all import of services made on or after the appointed day will be liable to integrated tax regardless of whether the transactions for such import of services had been initiated before the appointed day. Clause 22 confers powers on the Central Government to make rules for carrying out the provisions of the proposed Act on recommendation of the Council. Clause 23 confers powers on the Board to make regulations for carrying out the provisions of the proposed Act. Clause 24 provides for laying of rules, regulations and notifications made by the Central Government before each House of the Parliament. Clause 25 confers powers on the Central Government to make such provisions not inconsistent with the provisions of the proposed Act or the rules or regulations by a general or special order, on the recommendations of the Council within a period of three years from the date of commencement of the proposed Act.