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TMI BlogSALIENT FEATURES OF GSTX X X X Extracts X X X X X X X X Extracts X X X X ..... 9/- and SGST of Rs. 9/-, in addition to the basic price of the goods. He would be required to deposit Rs. 9/- as CGST component, which will go into the credit of Central Government account and Rs. 9/- as the SGST component, which will go into the credit of the concerned State Government, i.e. Uttar Pradesh here. Illustration II : An advertising company located in Mumbai supplies advertising services to a company manufacturing soap also located within the State of Maharashtra for Rs. 100/-. The tax rate for the said service is 9% CGST and 9% SGST. The ad company would charge CGST of Rs. 9/- and SGST of Rs. 9/- to the basic value of the service. He would be required to deposit Rs. 9/- as the CGST component, which will go into the Central Government account and Rs. 9/- as the SGST component which will go into the account of the concerned State Government, i.e. Maharashtra. Illustration III : The rate of CGST is 9% and that of SGST is 9%. When a wholesale dealer of Chemicals in Karnataka supplies his goods to a company located in Telangana for Rs. 100/-. As this is an inter-State supply, the dealer would charge IGST of Rs. 18/-, in addition to the basic price of the goods. He would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Special Economic Zone (SEZ) Unit. Under zero rating of supplies, the outward supplies as well as the inputs or input services used in supplying the supplies are free of GST. Meaning, the taxes paid on the supplies which are zero rated are refunded, the credit of inputs/ input services is allowed and wherever the supplies are exempted, or the supplies are made without payment of tax, the taxes paid on the inputs or input services i.e. the unutilized input tax credit is refunded. 1[No refund of unutilised input tax credit on account of zero rated supply of goods or of Integrated tax paid on account of zero rated supply of goods shall be allowed where such zero rated supply of goods are subjected to export duty.] 5.1.6. Goods and Services tax (GST) is a destination based tax, levied as per Section 9 of the CGST Act, 2017. It is levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff, called as Input Tax Credit (ITC). In other words, only value addition will be taxed and burden of tax is to be borne by the final consumer. 5.1.7. As per Section 7 of the CGST Act, 2017, the term 'supply' covers all forms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DULE II, which are as under - 1) Transfer- (a) any transfer of the title in goods is a supply of goods; (b) any transfer of right in goods or of undivided share in goods without the transfer of title thereof, is a supply of services; (c) any transfer of title in goods under an agreement which stipulates that property in goods shall pass at a future date upon payment of full consideration as agreed, is a supply of goods. 2) Land and Building- (a) any lease, tenancy, easement, licence to occupy land is a supply of services; (b) any lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly, is a supply of services. 3) Any treatment or process which is applied to another person's goods is a supply of services. 4) Transfer of business assets- (a) where goods forming part of the assets of a business are transferred or disposed of by or under the directions of the person carrying on the business so as no longer to form part of those assets, such transfer or disposal is a supply of goods by the person; (b) where, by or under the direction of a person carrying on a business, goods he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... supply of goods nor a supply of services, i.e. the Negative List supplies. Details of activities/transactions are as under - (1) Services by an employee to the employer in the course of or in relation to his employment. (2) Services by any court or Tribunal established under any law for the time being in force. (3) (a) the functions performed by the Members of Parliament, Members of State Legislature, Members of Panchayats, Members of Municipalities and Members of other local authorities; (b) the duties performed by any person who holds any post in pursuance of the provisions of the Constitution in that capacity; or (c) the duties performed by any person as a Chairperson or a Member or a Director in a body established by the Central Government or a State Government or local authority and who is not deemed as an employee before the commencement of this clause. (4) Services of funeral, burial, crematorium or mortuary including transportation of the deceased. (5) Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building. (6) Actionable claims, other than "specified actionable claims. (7) Supply of goods from a place in the non-table territory to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or small taxpayers with annual aggregate turnover not exceeding Rs. 1.50 Crore (Rs. 75 lakhs for Arunachal Pradesh, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura and Uttarakhand) in goods (including upto 10% value of services) during the previous financial year. As per Notification No. 2/2019-CT (Rate), dated 07.03.2019, for service provider the turnover should not exceed Rs. 50 lakhs during the previous financial year and such supplier is not engaged in making any inter-State outward supply, who is neither a casual taxable person nor a non-resident taxable person, who is not engaged in making any supply through an electronic commerce operator. It is a voluntary and optional scheme. Under the Composition scheme the eligible manufacturer has to pay 1% (0.5% CGST + 0.5% SGST/ UTGST) of turnover, the eligible service providers (or goods and service suppliers) have to pay 6% (3% CGST + 3% SGST / UTGST) of turnover; the eligible supplier of Restaurant Services has to pay 5% (2.5% CGST + 2.5% SGST/UTGST) of turnover and the traders have to pay 1% (0.5% CGST + 0.5% SGST/UTGST) of the taxable turnover. (iii) Levy under Reverse Charge Mechanism - In normal circumstances, the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evant financial year. 5.3.4. The following taxable persons are not eligible for the Composition Levy scheme: (a) A casual taxable person - A person who occasionally undertakes supplies in a State or Union Territory where he has no fixed place of business; (b) A Non-Resident Taxable Person - A person who occasionally undertakes supplies but has no fixed place of business or residence in India; (c) A person engaged in providing inter-state (from one State to another) supply of goods and services or both; (d) A person engaged in supply of non-taxable goods i.e. goods which are not taxable under GST law; (e) A person engaged in supply of goods through an Electronic Commerce Operator (E-Commerce) who is required to collect Tax at source (TCS) under Section 52 of the CGST Act, 2017; (f) A person engaged in manufacturing of goods notified under Section 10(2)(e) of the CGST Act, 2017, viz., Ice Cream and other edible Ice, Pan Masala, Aerated Water, Tobacco and manufactured Tobacco substitutes, Fly Ash Bricks, Fly Ash aggregates, Fly Ash Blocks, Brick Fossil Meals or similar Siliceous earthen building bricks and earthen or roofing tiles. 5.3.5. Section 10 of the CGST Act, 2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him on the date on which the option is withdrawn, within a period of thirty days from the date from which the option is withdrawn. 5.3.10. The aggregate turnover shall be computed on the basis of turnover on all India basis, which shall be 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, excluding Central tax, State tax, Union territory tax, integrated tax and cess. 5.3.11. If it is found that the taxpayer was not eligible to pay tax under Composition Scheme or has contravened the provisions of the Act or provisions of this Chapter, jurisdictional officer may issue a notice to such person in FORM GST CMP-05 to show cause within fifteen days of the receipt of such notice as to why the option to pay tax under this scheme shall not be denied. The taxpayer shall submit reply in FORM GST CMP-06. The proper officer shall issue an order in FORM GST CMP-07 within a period of thirty days of the receipt of such reply, either accepting the reply, or denying the option ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... egator), viz., Ola, Uber, etc., then in such cases the reverse charge will apply to the e-commerce operator and he will be liable to pay GST at the applicable rate. 5.4.3. As per Section 9(3) of CGST Act, 2017, the Government on the recommendations of the GST Council notifies the categories of supply of goods and/or services, the tax on which is required to be paid on reverse charge basis by the recipient of such goods and/or services. Section 9(4) of CGST Act, 2017 provides that in respect of the supply of taxable goods and/or services by unregistered supplier (who is not registered under GST), to a registered person, the tax shall be paid by the recipient on reverse charge basis. 5.4.4. All the provisions of the CGST Act, 2017 shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods and/or services. 5.4.5. Initially from 01.07.2017 to 12.10.2017, in terms of Notification No. 8/2017-CT (Rate) dated 28.06.2017 exemption from payment of tax on reverse charge basis was given if total value of the purchases in a day by a taxpayer from all unregistered persons was less than Rs. 5000/-. From 13.10.2017 to 31.01.2019 the ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 24(iii) of the CGST Act, 2017. 5.4.12. The persons engaged only in supplying goods and/or services on which tax is liable to be paid under reverse charge basis by the recipient, is not required to obtain registration. 5.4.13. The registered taxpayer making payment under reverse charge can take input tax credit on the tax paid under reverse charge on the eligible goods and services after making the payment of tax. 5.4.14. The goods on which GST is payable on reverse charge basis, i.e. the tax is required to be paid by the GST registered recipient, notified in Notification No. 4/2017-CT (Rate), dated 28.06.2017, as amended, are as under- (i) Cashew nuts not shelled or peeled, Bidi wrapper leaves (Tendu), Tobacco leaves and Raw cotton, purchased by any registered person from any Agriculturist; (ii) Essential oils other than those of citrus fruit, namely, peppermint (Mentha piperita), other mints: Spearmint oil (ex-mentha spicata), Water mint-oil (ex-mentha aquatic), Horsemint oil (ex-mentha ylvestries), Bergament oil (ex-mentha citrate), supplied by unregistered person to registered person; (iii) Silk Yarn, supplied by a person manufacturing silk yarn from raw silk or si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Director of a company or a Body Corporate to the said company or the Body Corporate. (xi) Services provided by an Insurance Agent to person carrying on insurance business. (xii) Supply of Services by a music composer, photographer, artist or the like by way of transfer or permitting the use or enjoyment of a copyright relating to original dramatic, musical or artistic works to a music company, producer or the like. (xiii) Supply of services by an author by way of transfer or permitting the use or enjoyment of a copyright relating to original literary works to a publisher. (xiv) Supply of services by the members of Overseeing Committee to Reserve Bank of India. (xv) Services supplied by individual Direct Selling Agents (DSAs) other than a body corporate partnership or limited liability partnership firm to bank or non-banking financial company (NBFCs). (xvi) Services provided by Business Facilitator (BF) to a banking company. (xvii) Services provided by an agent of Business Correspondent (BC) to Business Correspondent (BC). (xviii) Security Services (services provided by way of supply of security personnel) provided to a registered person. (xix) Services provided b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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