What is GST?

GST is an Indirect Tax which has replaced many Indirect Taxes in India. The Goods and Service
Tax Act was passed in the Parliament on 29th March 2017. The Act came into effect on 1st July
2017; Goods & Services Tax Law in India is a comprehensive, multi-stage, destination-based
tax that is levied on every value addition. GST will be completing three complete years on 1st
July 2020.
In simple words, Goods and Service Tax (GST) is an indirect tax levied on the supply of goods
and services. This law has replaced many indirect tax laws that previously existed in India.
GST is one indirect tax for the entire country.
So, before Goods and Service Tax, the pattern of tax levy was as follows:

Under the GST regime, the tax is levied at every point of sale. In the case of intra-state sales,
Central GST and State GST are charged. Inter-state sales are chargeable to Integrated GST.

Multi-stage
There are multiple change-of-hands an item goes through along its supply chain: from
manufacture to final sale to the consumer.
Let us consider the following case:

 Purchase of raw materials

  Production or manufacture
 Warehousing of finished goods
 Sale to wholesaler
 Sale of the product to the retailer
 Sale to the end consumer

 
Goods and Services Tax is levied on each of these stages which makes it a multi-stage tax.

Value Addition

The manufactu
rer who makes biscuits buys flour, sugar and other material. The value of the inputs increases
when the sugar and flour are mixed and baked into biscuits.

The manufacturer then sells the biscuits to the warehousing agent who packs large quantities of
biscuits and labels it. That is another addition of value after which the warehouse sells it to the
retailer.
The retailer packages the biscuits in smaller quantities and invests in the marketing of the
biscuits thus increasing its value.
GST is levied on these value additions i.e. the monetary value added at each stage to achieve the
final sale to the end customer.

Destination-Based
Consider goods manufactured in Maharashtra and are sold to the final consumer in Karnataka.
Since Goods & Service Tax is levied at the point of consumption. So, the entire tax revenue will
go to Karnataka and not Maharashtra.

Journey of GST in India

The GST journey began in the year 2000 when a committee was set up to draft law. It took 17
years from then for the Law to evolve. In 2017 the GST Bill was passed in the Lok Sabha and
Rajya Sabha. On 1st July 2017 the GST Law came into force.
. Advantages Of GST
GST has mainly removed the Cascading effect on the sale of goods and services. Removal of
cascading effect has impacted the cost of goods. Since the GST regime eliminates the tax on tax,
the cost of goods decreases.
GST is also mainly technologically driven. All activities like registration, return filing,
application for refund and response to notice needs to be done online on the GST Portal; this
accelerates the processes.

What are the 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 Maharashtra)
 SGST: Collected by the State Government on an intra-state sale (Eg: transaction
happening within Maharashtra)
 IGST: Collected by the Central Government for inter-state sale (Eg: Maharashtra to
Tamil Nadu)
In most cases, the tax structure under the new regime will be as follows:

Transaction New Old Regime

Regime

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

Sale to IGST Central Sales There will only be one type of tax (central) in case of
another State Tax + inter-state sales. The Centre will then share the IGST
Excise/Service revenue based on the destination of goods.
Tax

Illustration:

 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.

 Tax Laws before GST

In the earlier indirect tax regime, there were many indirect taxes levied by both state and centre.
States mainly collected taxes in the form of Value Added Tax (VAT). Every state had a different
set of rules and regulations.
Interstate sale of goods was taxed by the Centre. CST (Central State Tax) was applicable in case
of interstate sale of goods.  Other than above there were many indirect taxes like entertainment
tax, octroi and local tax that was levied by state and centre.
This led to a lot of overlapping of taxes levied by both state and centre.
For example, when goods were manufactured and sold, excise duty was charged by the centre.
Over and above Excise Duty, VAT was also charged by the State. This lead to a tax on tax also
known as the cascading effect of taxes.
The following is the list of indirect taxes in the pre-GST regime:

 Central Excise Duty

 Duties of Excise
 Additional Duties of Excise
 Additional Duties of Customs
 Special Additional Duty of Customs
 Cess
 State VAT
 Central Sales Tax
 Purchase Tax
 Luxury Tax
 Entertainment Tax
 Entry Tax
 Taxes on advertisements
 Taxes on lotteries, betting, and gambling

CGST, SGST, and IGST has replaced all the above taxes.
However, the chargeability of CST for Inter-state purchase at a concessional rate of 2%, by issue
and utilisation of c-Form is still prevalent for certain Non-GST goods such as:

i. Petroleum crude;
ii. High-speed diesel
iii. Motor spirit (commonly known as petrol);
iv. Natural gas;
v. Aviation turbine fuel; and
vi. Alcoholic liquor for human consumption.

in respect of following transactions only:

 Resale
 Use in manufacturing or processing
 Use in the telecommunication network or in mining or in the generation or distribution of
electricity or any other power

What changes has GST brought in?

In the pre-GST regime, every purchaser including the final consumer paid tax on tax. This tax on
tax is called Cascading Effect of Taxes.
GST has removed this cascading effect as the tax is calculated only on the value-addition at
each stage of the transfer of ownership. 
 Now let us try to understand the definition of Goods and Service Tax – “GST is
a comprehensive, multi-stage, destination-based tax that is levied on every value addition.”
This indirect tax system under GST has improved the collection of taxes as well as boosted the
development of Indian economy by removing the indirect tax barriers between states and
integrating the country through a uniform tax rate.

Illustration:
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 a label and repacks @ Rs. 300 1,400 140 1,540

Retailer advertises @ Rs. 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 Total

Liability

Manufacturer 1,000 100 100 1,100

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

Retailer advertises @ Rs. 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 the input tax credit, the sale price is reduced
and the cost price for the buyer is reduced because of 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 regime also brought a centralised system of waybills by the introduction of “E-way bills”.
This system was launched on 1st April 2018 for Inter-state movement of goods and on 15th April
2018 for intra-state movement of goods in a staggered manner. Under the e-way bill system,
manufacturers, traders & transporters are now able to generate e-way bills for the goods
transported from the place of its origin to its destination on a common portal with ease. Tax
authorities are also benefitted as this system has reduced time at check- posts and help reduce tax
evasion.
CENTRAL GOODS AND SERVICES TAX ACT, 2017

 Definitions of CGST Act 2017

Section 2(4).  Adjudicating Authority:
New Definition: “adjudicating authority” means any authority, appointed or authorised to
pass any order or decision under this Act, but does not include the Central Board of Indirect
Taxes and Customs, the Revisional Authority, the Authority for Advance Ruling, the
Appellate Authority for Advance Ruling, the Appellate Authority, the Appellate Tribunal and the
Authority referred to in sub-section (2) of section 171”
Earlier Definition: “adjudicating authority” means any authority, appointed or authorised to pass
any order or decision under this Act, but does not include the Central Board of Excise and
Customs, the Revisional Authority, the Authority for Advance Ruling, the Appellate Authority
for Advance Ruling, the Appellate Authority and the Appellate Tribunal;
 
Section 2(17) (h). Definitions of CGST Act 2017: business
New Definition: activities of a race club including by way of totalisator or a license to
bookmaker or activities of a licensed bookmaker in such club; and
Earlier Definition: services provided by a race club by way of totalisator or a licence
to bookmaker in such club; and
 
Section 2(18). Definitions of CGST Act 2017: business vertical
This definition has been deleted in its entirety.
Earlier Definition: “business vertical” means a distinguishable component of an enterprise that is
engaged in the supply of individual goods or services or a group of related goods or services
which is subject to risks and returns that are different from those of the other business verticals.
 
Section 2(35). Definitions of CGST Act 2017: cost accountant
New Definition: “cost accountant” means a cost accountant as defined in clause (b) of sub-
section (1) of section 2 of the Cost and Works Accountants Act, 1959.
Earlier Definition: “cost accountant” means a cost accountant as defined in clause (c) of sub-
section (1) of section 2 of the Cost and Works Accountants Act, 1959.
 
Section 2(69) (f). Definitions of CGST Act 2017: local authority
New Definition: a Development Board constituted under article 371 and article 371J of the
Constitution;
Earlier Definition: a Development Board constituted under article 371 of the Constitution;
 
Section 2(102). Definitions of CGST Act 2017: services
New Definition: “services” means anything other than goods, money and securities but includes
activities relating to the use of money or its conversion by cash or by any other mode, from one
form, currency or denomination, to another form, currency or denomination for which a separate
consideration is charged;
Explanation.––For the removal of doubts, it is hereby clarified that the
expression “services” includes facilitating or arranging transactions in
securities;
Earlier Definition: “services” means anything other than goods, money and securities
but includes activities relating to the use of money or its conversion by cash or by any other
mode, from one form, currency or denomination, to another form, currency or denomination for
which a separate consideration is charged;
 

Section 7. The scope of supply:

Amended relating to “Scope of Supply” in order to clarify the scope of supply
(1)(b)
Replaced clause: import of services for consideration whether or not in the course or furtherance
of business and;
Earlier clause: import of services for consideration whether or not in the course or furtherance of
business;
(1)(c)
Replaced clause: the activities specified in Schedule I, made or agreed to be made without
a Consideration;
[Note: The word “and” after the word “consideration” is omitted and always deemed to have
been omitted]
Earlier clause: the activities specified in Schedule I, made or agreed to be made
without consideration; and
(1)(d)
This clause has been deleted in its entirety.
Earlier clause: the activities to be treated as supply of goods or supply of services as referred to
in Schedule II.
(1A) newly inserted after sub-section (1) of Section 7:
“ where certain activities or transactions constitute a supply in accordance with the provisions of
sub-section (1), they shall be treated either as supply of goods or supply of services as referred to
in Schedule II ”
(3)
Replaced sub-section: Subject to the provisions of sub-sections (1), (1A) and (2), the
Government may, on the recommendations of the Council, specify, by notification, the
transactions that are to be treated as—
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods.
Earlier sub-section: (3) Subject to the provisions of sub-sections (1) and (2), the Government
may, on the recommendations of the Council, specify, by notification, the transactions that are to
be treated as—
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods.
 

Section 9. Levy and collection:

Amended so as to restrict the levy of tax on reverse charge basis under Section 9(4) on receipt of
supplies of certain specified categories of goods or services or both by notified classes of
registered persons from unregistered suppliers on the recommendations of the Council. This is
against the earlier provision that was applicable for all purchases from the unregistered supplier.
 
Section 10. Composition levy:
Amended so as to raise the statutory threshold of turnover for a taxpayer to be eligible for the
composition scheme from Rs 1 crore to Rs 1.5 crores, and to allow the composition taxpayers to
supply services (other than restaurant services), for up to a value not exceeding ten per cent. of
turnover in the preceding financial year, or five lakh rupees, whichever is higher.
 

Section 12. Time of supply of goods:

Amended and the said amendment is drafting in nature.
12(2)(a)
Replaced clause: the date of issue of invoice by the supplier or the last date on which he
is required, under section 31, to issue the invoice with respect to the supply; or
[Note: The word “under sub-section (1) of” is omitted]
Earlier clause: the date of issue of invoice by the supplier or the last date on which he is required,
under sub-section (1) of section 31, to issue the invoice with respect to the supply; or
 

Section 13. Time of supply of services:

Amended and the said amendment is drafting in nature.
Replaced clauses:
(a) the date of issue of invoice by the supplier, if the invoice is issued within the period
prescribed under section 31 or the date of receipt of payment, whichever is earlier; or
(b) the date of provision of service, if the invoice is not issued within the period prescribed under
section 31 or the date of receipt of payment, whichever is earlier; or
[Note: The word “under sub-section (2) of” is omitted in both clauses]
Earlier clauses:
(a) the date of issue of invoice by the supplier, if the invoice is issued within the period
prescribed under sub-section (2) of section 31 or the date of receipt of payment, whichever is
earlier; or
(b) the date of provision of service, if the invoice is not issued within the period prescribed under
sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or
 

Section 16. Eligibility and conditions for taking the input tax credit:
Amended in order to provide for the input tax credit in cases of “Bill- to-ship-to” model in the
case of supply of services. The said Amendment further seeks to include the provisions relating
to the new return format as specified in the proposed new section 43A, for availing the input tax
credit.
 
Section 17. Apportionment of credit and blocked credits:
Amended in order to further expand the scope of eligibility of input tax credit.
Newly inserted explanation to Section 17(3):
‘Explanation.—For the purposes of this sub-section, the expression
‘‘value of exempt supply’’ shall not include the value of activities or transactions specified in
Schedule III, except those specified in paragraph 5 of the said Schedule.’;
Section 17(5) amended as follows:
Clause (a) and (b) replaced with (a), (aa), (ab) and (b):
Replaced clauses:
(a) motor vehicles for transportation of persons having approved seating capacity of not more
than thirteen persons (including the driver), except when they are used for making the following
taxable supplies, namely:—
(A) further supply of such motor vehicles; or
(B) transportation of passengers; or
(C) imparting training on driving such motor vehicles;
(aa) vessels and aircraft except when they are used––
(i) for making the following taxable supplies, namely:—
(A) further supply of such vessels or aircraft; or
(B) transportation of passengers; or
(C) imparting training on navigating such vessels; or
(D) imparting training on flying such aircraft;
(ii) for transportation of goods;
(ab) services of general insurance, servicing, repair and maintenance in so far as they relate to
motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa):
Provided that the input tax credit in respect of such services shall be available—
(i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used
for the purposes specified therein;
(ii) where received by a taxable person engaged—
(I) In the manufacture of such motor vehicles, vessels or aircraft; or
(II) In the supply of general insurance services in respect of such motor vehicles, vessels or
aircraft insured by him;
(b) the following supply of goods or services or both—
(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic
surgery, leasing, renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or
clause (aa) except when used for the purposes specified therein, life insurance and health
insurance:
Provided that the input tax credit in respect of such goods or services or both shall be available
where an inward supply of such goods or services or both is used by a registered person for
making an outward taxable supply of the same category of goods or services or both or as an
element of a taxable composite or mixed supply;
(ii) membership of a club, health and fitness centre; and
(iii) travel benefits extended to employees on vacation such as leave or home travel concession:
Provided that the input tax credit in respect of such goods or services or both shall be available,
where it is obligatory for an employer to provide the same to its employees under any law for the
time being in force.”.
Earlier clause (a) and (b):
(a) motor vehicles and other conveyances except when they are used––
(i) for making the following taxable supplies, namely:—
(A) further supply of such vehicles or conveyances ; or
(B) transportation of passengers; or
(C) imparting training on driving, flying, navigating such vehicles
or conveyances;
(ii) for transportation of goods;
(b) the following supply of goods or services or both—
(i) food and beverages, outdoor catering, beauty treatment, health services,
cosmetic and plastic surgery except where an inward supply of goods or services or both of a
particular category is used by a registered person for making an outward taxable supply of the
same category of goods or services or both or as an element of a taxable composite or mixed
supply;
(ii) membership of a club, health and fitness centre;
(iii) rent-a-cab, life insurance and health insurance except where––
(A) the Government notifies the services which are obligatory for an
employer to provide to its employees under any law for the time being in
force; or
(B) such inward supply of goods or services or both of a particular
category is used by a registered person for making an outward taxable
supply of the same category of goods or services or both or as part of a
taxable composite or mixed supply; and
(iv) travel benefits extended to employees on vacation such as leave or
home travel concession;
 

Section 20. The manner of distribution of credit by Input Service Distributor:

Amended in order to exclude the amount of tax levied under Entry 92A of List I of the Seventh
Schedule of the Constitution from the value of turnover for the purposes of distribution of credit.
Replaced clause (c) of the explanation: the term ‘‘turnover’’, in relation to any registered person
engaged in the supply of taxable goods as well as goods not taxable under this Act, means the
value of turnover, reduced by the amount of any duty or tax levied under entries 84 and 92A of
List I of the Seventh Schedule to the Constitution and entries 51 and 54 of List II of the said
Schedule.
Earlier clause (c) of the explanation: the term ‘‘turnover’’, in relation to any registered person
engaged in the supply of taxable goods as well as goods not taxable under this Act, means the
value of turnover, reduced by the amount of any duty or tax levied under entry 84 of List I of the
Seventh Schedule to the Constitution and entries 51 and 54 of List II of the said Schedule.
 
Section 22. Persons liable for registration:
Amended so as to increase the threshold turnover for registration in special category States of
Arunachal Pradesh, Assam, Himachal Pradesh, Meghalaya, Sikkim and Uttarakhand from ten
lakh rupees to twenty lakh rupees.
 

Section 24. Compulsory registration in certain cases:

Amended so as to provide for mandatory registration for only those e-commerce operators who
are liable to collect tax at source under section 52 of the Act.
Replaced clause (x) every electronic commerce operator who is required to collect tax at source
under section 52
Earlier clause (x) every electronic commerce operator
 

Section 25. Procedure for registration:

Amended also as to allow persons having multiple places of business in a State or Union territory
to obtain a separate registration for each such place of business, and to insert the provisions for
separate registration for a person having a unit(s) in a Special Economic Zone or being a Special
Economic Zone developer, distinct from his other units located outside the Special Economic
Zone.
Newly inserted second proviso under sub-section (1):
“Provided further that a person having a unit, as defined in the Special Economic Zones Act,
2005, in a Special Economic Zone or being a Special Economic Zone developer shall have to
apply for a separate registration, as distinct from his place of business located outside the Special
Economic Zone in the same State or Union territory.”
Proviso to Section 25(2):
Replaced proviso: Provided that a person having multiple places of business in a State or Union
territory may be granted a separate registration for each such place of business, subject to such
conditions as may be prescribed.
Earlier Proviso: Provided that a person having multiple business verticals in a State or Union
territory may be granted a separate registration for each business vertical, subject to such
conditions as may be prescribed.
 

Section 29. Cancellation of registration:

Amended so as to provide for temporary suspension of registration while the cancellation of
registration is under process.
in the marginal heading after the word “Cancellation”, the words “or suspension” shall be
inserted;
in sub-section (1), after clause (c), the following proviso shall be inserted, namely:—
“Provided that during the pendency of the proceedings relating to cancellation of registration
filed by the registered person, the registration may be suspended for such period and in such
manner as may be prescribed.”;
in sub-section (2), after the proviso, the following proviso shall be inserted, namely:—
“Provided further that during the pendency of the proceedings relating to cancellation of
registration, the proper officer may suspend the registration for such period and in such manner
as may be prescribed.”.
 

Section 34. Credit and debit notes:

Amended so as to allow registered persons to issue consolidated credit or debit notes in respect
of multiple invoices issued in a Financial Year, by replacing sub-section (1) and (3), at words:
“Where a tax invoice has” or “a credit note” or “a debit note” with “Where one or more tax
invoices have” or “one or more credit notes for supplies made in a financial year” or “one or
more debit notes for supplies made in a financial year” respectively.
 

Section 35. Accounts and other records:

Amended so as to provide that any Department of the Central or State Government or local
authority which is subject to audit by the Comptroller and Auditor-General of India need not get
their books of account audited by any Chartered Accountant or Cost Accountant.
Newly inserted proviso
“Provided that nothing contained in this sub-section shall apply to any department of the Central
Government or a State Government or a local authority, whose books of account are subject to
audit by the Comptroller and Auditor-General of India or an auditor appointed for auditing the
accounts of local authorities under any law for the time being in force.”.
Section 39. Furnishing of returns: Amended so as to provide for prescribing the procedure for
quarterly filing of returns with monthly payment of taxes.
Replaced sub-section (1):
Every registered person, other than an Input Service Distributor or a
non-resident taxable person or a person paying tax under the provisions of section 10 or section
51 or section 52 shall, for every calendar month or part thereof, furnish, in such form, manner
and within such time as may be prescribed, a return, electronically, of inward and outward
supplies of
goods or services or both, input tax credit availed, tax payable, tax paid and such
other particulars as may be prescribed. on or before the twentieth day of the month
succeeding such calendar month or part thereof.
Newly inserted proviso to sub-section (1):
“Provided that the Government may, on the recommendations of the Council, notify certain
classes of registered persons who shall furnish return for every quarter or part thereof, subject to
such conditions and safeguards as may be specified therein.”;
Newly inserted proviso to sub-section (7)
“Provided that the Government may, on the recommendations of the
Council, notify certain classes of registered persons who shall pay to the
Government the tax due or part thereof as per the return on or before the last date on which he is
required to furnish such return, subject to such conditions and safeguards as may be specified
therein.”;
Replaced sub-section (9) and its proviso:
Subject to the provisions of sections 37 and 38, if any registered person
after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or sub-section
(4) or sub-section (5) discovers any omission or incorrect particulars therein, other than as a
result of scrutiny, audit, inspection or enforcement activity by the tax authorities, he shall rectify
such omission or incorrect particulars in such form and manner as may be prescribed, subject to
payment of interest under this Act:
Provided that no such rectification of any omission or incorrect particulars shall be allowed after
the due date for furnishing of return for the month of September or second quarter following the
end of the financial year to which such details pertain, or the actual date of furnishing of relevant
annual return, whichever is earlier.
 

Section 43A: Procedure for furnishing return and availing input tax credit.
Newly inserted section:
“43A. (1) Notwithstanding anything contained in sub-section (2) of section 16, section 37 or
section 38, every registered person shall in the returns furnished under sub-section (1) of section
39 verify, validate, modify or delete the details of supplies furnished by the suppliers.
(2) Notwithstanding anything contained in section 41, section 42 or section 43, the procedure for
availing of input tax credit by the recipient and verification thereof shall be such as may be
prescribed.
(3) The procedure for furnishing the details of outward supplies by the supplier on the common
portal, for the purposes of availing input tax credit by the recipient shall be such as may be
prescribed.
(4) The procedure for availing input tax credit in respect of outward supplies not furnished under
sub-section (3) shall be such as may be prescribed and such procedure may include the
maximum amount of the input tax credit which can be so availed, not exceeding twenty per cent.
of the input tax credit available, on the basis of details furnished by the suppliers under the said
sub-section.
(5) The amount of tax specified in the outward supplies for which the details have been furnished
by the supplier under sub-section (3) shall be deemed to be the tax payable by him under the
provisions of the Act.
(6) The supplier and the recipient of a supply shall be jointly and severally liable to pay tax or to
pay the input tax credit availed, as the case may be, in relation to outward supplies for which the
details have been furnished under sub-section (3) or sub-section (4) but return thereof has not
been furnished.
(7) For the purposes of sub-section (6), the recovery shall be made in such manner as may be
prescribed and such procedure may provide for non-recovery of an amount of tax or input tax
credit wrongly availed not exceeding one thousand rupees.
(8)The procedure, safeguards and threshold of the tax amount in relation to outward supplies, the
details of which can be furnished under sub-section (3) by a registered person,—
(i) within six months of taking registration;
(ii) who has defaulted in payment of tax and where such default has continued for more than two
months from the due date of payment of such defaulted amount, shall be such as may be
prescribed.”.
Section 48. Goods and services tax practitioners: Amended so as to allow Goods and Services
Tax Practitioners to perform other functions such as filing the refund claim, filing the application
for cancellation of registration, etc.
Replaced sub-section (2) by inserting words highlighted:
A registered person may authorise an approved goods and services tax practitioner to furnish the
details of outward supplies under section 37, the details of inward supplies under section 38 and
the return under section 39 or section 44 or section 45 and to perform such other functions in
such manner as may be prescribed.
 

Section 49. Payment of tax, interest, penalty and other amounts:

Amended in order to provide that the credit of State tax or Union territory tax can be utilised for
payment of integrated tax only when the balance of the input tax credit on account of central tax
is not available for payment of integrated tax.
Replaced Sub-section (2):
The input tax credit as self-assessed in the return of a registered person shall be credited to his
electronic credit ledger, in accordance with section 41 or section 43A, to be maintained in such
manner as may be prescribed.
Inserted new provisos below clause (c) and (d)
“Provided that the input tax credit on account of State tax/Union Territory Tax shall be utilised
towards payment of integrated tax only where the balance of the input tax credit on account of
central tax is not available for payment of integrated tax;”
 

Section 49A : Utilisation of input tax credit subject to certain conditions:

Newly inserted: This Section seeks to specify that a taxpayer would be able to utilise the input
tax credit on account of central tax, State tax or Union territory tax only after exhausting all the
credit on account of integrated tax available to him towards payment or integrated tax, Central
tax, State tax or Union territory tax.
 
Section 49B: Order of utilisation of input tax credit:
Newly inserted: This Section seeks to empower the Government to prescribe any specific order
of utilisation of input tax credit of any of the taxes for the payment of any tax.
 

Section 52: Collection of tax at source:

Amended in order to give the reference of section 39 of CGST Act 2017 Furnishing of Returns
Replaced sub-section (9):
Where the details of outward supplies furnished by the operator under sub-section (4) do not
match with the corresponding details furnished by the supplier under section 37 or section 39, the
discrepancy shall be communicated to both persons in such manner and within such time as may
be prescribed.

Section 54. Refund of tax:

Amended in order to provide that the principle of unjust enrichment will apply in case of a
refund claim arising out of supplies of goods or services or both made to a Special Economic
Zone developer or unit, and to allow receipt of payment in Indian rupees, where permitted, by
the Reserve Bank of India in case of export of services.
Replaced clause (a) of sub-section (8) of Section 54:
“refund of tax paid on export of goods or services or both or on inputs or input services used in
making such exports;”
[Note: replaced the word ‘zero-rate supplies’ with ‘exports’]
Replaced item 1 of clause (c) to point (2)-Relevant date of the explanation as follows:
“In the case of services exported out of India where a refund of tax paid is available in respect of
services themselves or, as the case may be, the inputs or input services used in such services, the
date of––
(i) receipt of payment in convertible foreign exchange or in Indian rupees wherever permitted by
the Reserve Bank of India, where the supply of services had been completed prior to the receipt
of such payment; or
(ii) issue of invoice, where payment for the services had been received
in advance prior to the date of issue of the invoice;”
Replaced the clause (e) to point (2)-Relevant date of the explanation is as follows:
In the case of refund of unutilised input tax credit under clause (ii) of the first proviso to sub-
section (3), the due date for furnishing of return under section 39 for the period in which such
claim for refund arises;
 
Section 79. Recovery of tax:
Amended to enable recovery to be made from distinct persons registered in different States or
Union territories in order to ensure a speedy recovery from other establishments of the registered
person by inserting following explanation:
‘Explanation.––For the purposes of this section, the word person shall include “distinct persons”
as referred to in sub-section (4) or, as the case may be, sub-section (5) of section 25.’.
 

Section 107. Appeals to Appellate Authority:

Amended Authority”, in order to specify twenty-five crore rupees as the upper limit of the
amount of pre-deposit payable for the filing of appeal before the Appellate Authority.
 

Section 112. Appeals to Appellate Tribunal:

Amended in order to specify fifty crore rupees as the upper limit of the amount of pre-deposit
payable for the filing of appeal before the Appellate Tribunal.
 

Section 129. Detention, seizure and release of goods and conveyances in transit:
Amended in order to increase the time limit before which proceedings shall be initiated.
Replaced sub-section(6) of Section 129:
Where the person transporting any goods or the owner of the goods fails to pay the amount of tax
and penalty as provided in sub-section (1) within fourteen days of such detention or seizure,
further proceedings shall be initiated in accordance with the provisions of section 130.
 

Section 140. Transitional arrangements for the input tax credit:

Amended in order to clarify with retrospective effect from 1st July 2017 that the cesses and
additional duty of excise (on textile and textile articles) levied under the pre-Goods and Services
Tax laws shall not be a part of the transitional input tax credit under the goods and services tax.
 

Section 143. Job work procedure:

Amended in order to empower the Commissioner to extend the time limit for return of inputs and
capital goods sent on job work, up to a period of one year and two years, respectively.
Newly inserted second proviso to Section 143(1)(b):
“Provided further that the period of one year and three years may, on sufficient cause being
shown, be extended by the Commissioner for a further period not exceeding one year and two
years respectively.”.
In SCHEDULE I. of CGST Act 2017 “Activities to be treated as supply even if made without
consideration”. : Amended
Replaced para 4 is as follows:
Import of services by a taxable person from a related person or from any of his
other establishments outside India, in the course or furtherance of business.
 

SCHEDULE II of CGST Act 2017:

Amended the title of Schedule II of the principal Act from “Activities to be treated as a supply of
goods or supply of services” to “Activities or transactions to be treated as a supply of goods or
supply of services”.
 

SCHEDULE III of CGST Act 2017:

“Activities or transactions which shall be treated neither as a supply of goods nor a supply of
services”.
Newly inserted paras after 6:
7. Supply of goods from a place in the non-taxable territory to another place in the non-taxable
territory without such goods entering into India.
8.
(a) Supply of warehoused goods to any person before clearance for home consumption;
(b) Supply of goods by the consignee to any other person, by endorsement of documents of title
to the goods, after the goods have been dispatched from the port of origin located outside India
but before clearance for home consumption.”;
Newly inserted explanation 2:
‘Explanation 2.––For the purposes of paragraph 8, the expression “warehoused goods” shall have
the same meaning as assigned to it in the Customs Act, 1962.’.

Changes in IGST Act 2017 

Following are the Changes in the Relevant Sections of IGST Act 2017 by replacing it with
the Integrated GST Amendment Act 2018:
Section 2(6). Definitions. “export of services
Section 2(16). Definitions. “non-taxable online recipient”
Section 5. Levy and collection:
Amended to empower the Central Government to notify classes of registered persons to pay tax
on reverse charge basis in respect of receipt of supplies of certain specified Categories of goods
or services or both from unregistered suppliers;
 
Section 8. Intra-State supply.
Words ‘‘being a business vertical’’ shall be omitted.
 
Section 12. Place of supply of services where the location of supplier and recipient is in
India:
Amended to provide that if the transportation of goods is to a place outside India, the place of
supply shall be the place of destination of such goods;
 
Section 13. Place of supply of services where the location of supplier or location of the
recipient is outside India:
Provisions of Section 13(1)(3)(a) Amended and shall not apply in the case of services supplied in
respect of goods which are temporarily imported into India for repairs or for any other treatment
or process and are exported after such repairs or treatment or process without being put to any
use in India, other than that which is required for such repairs or treatment or process;
 
Section 17. Apportionment of tax and settlement of funds:
Amended to make a provision for settlement of balance in the integrated tax account equally
between the Central Government and the State Governments or the Union territories, as the case
may be, on ad hoc basis and shall be adjusted against the amount apportioned under the said sub-
sections.
 
Section 20. Application of provisions of Central Goods and Services Tax Act.
Amended to specify the amount of pre-deposit payable for the filing of appeals —
(a) before the Appellate Authority to be capped at fifty crore rupees;
(b) before the Appellate Tribunal to be capped at one hundred crore rupees

STATE GOODS AND SERVICES ACT ,2017

What is State Goods and Services Tax (SGST)?
Under GST, SGST is a tax levied on Intra State supplies of both goods and services by the State
Government and will be governed by the SGST Act. As explained above, CGST will also be
levied on the same Intra State supply but will be governed by the Central Government.
Note: Any tax liability obtained under SGST can be set off against SGST or IGST input tax
credit only.
An example for CGST and SGST:
Let’s suppose Rajesh is a dealer in Maharashtra who sold goods to Anand in Maharashtra worth
Rs. 10,000. The GST rate is 18% comprising of CGST rate of 9% and SGST rate of 9%. In such
case, the dealer collects Rs. 1800 of which Rs. 900 will go to the Central Government and Rs.
900 will go to the Maharashtra Government.
INTEGRATED GOODS AND SERVICES TAX,2017
What is Integrated Goods and Services Tax (IGST)?
Under GST, IGST is a tax levied on all Inter-State supplies of goods and/or services and will be
governed by the IGST Act. IGST will be applicable on any supply of goods and/or services in
both cases of import into India and export from India.
Note: Under IGST,

 Exports would be zero-rated.

 Tax will be shared between the Central and State Government.

An example for IGST:

Consider that a businessman Rajesh from Maharashtra had sold goods to Anand from Gujarat
worth Rs. 1,00,000. The GST rate is 18% comprised of 18% IGST. In such case, the dealer has
to charge Rs. 18,000 as IGST. This IGST will go to the Centre.
 SPLIT OF UNDER GST

India is a federal country where both the Centre and the States have been assigned the powers to
levy and collect taxes. Both the Governments have distinct responsibilities to perform, as per the
Constitution, for which they need to raise tax revenue.
The Centre and States are simultaneously levying GST.
The three types tax structure is implemented to help taxpayers take the credit against each other,
thus ensuring “One Nation, One Tax”.

The Union Territory Goods and Services Tax Bill, 2017

 The Union Territory Goods and Services Tax Bill, 2017 was introduced in Lok Sabha on
March 27, 2017.  The Bill provides for the levy of the Union Territory Goods and
Services Tax (UTGST).

 Levy of UTGST:  The centre will levy UTGST on the supply of goods and services
within the boundary of a union territory. 

 Tax rates: The tax rates of UTGST will be recommended by the GST Council.  This rate
will not exceed 20%. 
  Exemptions from UTGST: The centre may exempt certain goods and services from the
purview of UTGST through a notification.  This will be based on the recommendations of
the GST Council.

 Assistance to search, seizure and arrest: All officers of Police, Railways, Customs, and
those officers engaged in the collection of land revenue, including village officers, and
officers of central tax will assist the tax administrative officers in the implementation of
this Act.

 Applicability of provisions of Central Goods and Services Tax Act, 2017: Several

provisions of the Central Goods and Services Tax Act, 2017 apply to this Act.  Such
provisions include (i) time and value of supply, (ii) composition levy, (iii) registration,
(iv) returns, (v) payment of tax, (vi) assessment, (vii) refunds, (viii) inspection, (ix)
search and seizure, (x) advance ruling, (xi) appeals, and offences.

 Transition to the new regime: Taxpayers with unutilised input tax credit obtained under
the current laws may utilise it under GST.

input tax credits adjusted?Offset liability in GST

Let us consider that goods worth Rs. 10,000 are sold by manufacturer A from Maharashtra to
Dealer B in Maharashtra.
Dealer B resells them to Trader C in Rajasthan for Rs. 17,500.
Trader C finally sells to end user D in Rajasthan for Rs. 30,000.
Suppose the applicable tax rates for the goods sold are CGST= 9%, SGST=9%, and
IGST=9+9=18%
Since A is selling this to B in Maharashtra itself, it is an intra-state sale and so, CGST@9% and
SGST@9% will apply.
Dealer B (Maharashtra) is selling to Trader C (Rajasthan). Hence, this is an interstate sale, with
IGST@18%.
Trader C (Rajasthan) is selling to end user D also in Rajasthan. Once again it is an intra-state sale
and hence, CGST@9% and SGST@9% will apply.
How SGST, CGST and IGST will be collected?

*** Any IGST credit will first be applied to set off in this order:

 First set off against IGST liability.

 Then either set off with CGST or SGST liability, at your preference.

Know further about how ITC optimisation works by reading our article about ITC optimisation
under GST.
GST being a consumption-based tax the state where the goods were consumed(Rajasthan) will
receive GST. By that logic, Maharashtra (where goods were sold) should not get any taxes. State
Rajasthan and Central Government should have got (30,000*9%) = 2,700 each.
Thus, Maharashtra (exporting state) will have to transfer credit of SGST of Rs. 900 (used in
payment of IGST) to the Centre.
In turn, Central Government will transfer to state Rajasthan (importing state) Rs. 450 IGST.
The above example shows the need for 3 taxes: SGST, CGST, and IGST. All 3 together will
serve the two purposes of GST :

1. One Nation, One Tax – so all taxes on all purchases are available as credits.
2. Dual tax system – both Centre and states have their revenue.

GST is a completely new tax with new concepts like ‘place of supply’ and new tax structures.
This creates confusion with taxpayers who may end up paying the wrong type of GST.
Do you wish to register for GST? Or would you like to know about the input tax
credit provisions and the transition provisions under GST? If you’re looking for the right HSN
codes for the goods you deal with, we will be glad to help you find one on our ClearTax HSN
lookup tool.
 Time of Supply
Time of supply means the point in time when goods/services are considered supplied’. When the
seller knows the ‘time’, it helps him identify due date for payment of taxes.
CGST/SGST or IGST must be paid at the time of supply. Goods and services have a separate
basis to identify their time of supply. Let’s understand them in detail.

A. Time of Supply of Goods

Time of supply of goods is earliest of:
1. Date of issue of invoice
2. Last date on which invoice should have been issued
3. Date of receipt of advance/ payment*.
For example:
Mr. X sold goods to Mr. Y worth Rs 1,00,000. The invoice was issued on 15th January. The
payment was received on 31st January. The goods were supplied on 20th January.
*Note:  GST is not applicable to advances under GST. GST in Advance is payable at the time of
issue of the invoice.  Notification No. 66/2017 – Central Tax issued on 15.11.2017
Let us analyze and arrive at the time of supply in this case.
Time of supply is earliest of –
1. Date of issue of invoice = 15th January
2. Last date on which invoice should have been issued  = 20th January
Thus the time of supply is 15th January.
What will happen if, in the same example an advance of Rs 50,000 is received by Mr. X on 1st
January?
The time of supply for the advance of Rs 50,000 will be 1st January(since the date of receipt of
advance is before the invoice is issued). For the balance Rs 50,000, the time of supply will be
15th January.

B. Time of Supply for Services

Time of supply of services is earliest of:
1. Date of issue of invoice
2. Date of receipt of advance/ payment.
3. Date of provision of services (if invoice is not issued within prescribed period)
Let us understand this using an example:
Mr. A provides services worth Rs 20000 to Mr. B on 1st January. The invoice was issued on
20th January and the payment for the same was received on 1st February.
In the present case, we need to 1st check if the invoice was issued within the prescribed time.
The prescribed time is 30 days from the date of supply i.e. 31st January. The invoice was issued
on 20th January. This means that the invoice was issued within a prescribed time limit.
The time of supply will be earliest of –
1. Date of issue of invoice = 20th January
2. Date of payment = 1st February
This means that the time of supply of services will be 20th January.

C. Time of Supply under Reverse Charge

In case of reverse charge the time of supply for service receiver is earliest of:
1. Date of payment*
2. 30 days from date of issue of invoice for goods (60 days for services)
*w.e.f. 15.11.2017 ‘Date of Payment’ is not applicable for goods and applies only to
services.  Notification No. 66/2017 – Central Tax 
For example:
M/s ABC Pvt. Ltd undertook service of a director Mr. X worth Rs. 50,000 on 15th January. The
invoice was raised on 1st February. M/s ABC Pvt Ltd made the payment on 1st May.
The time of supply, in this case, will be earliest of –
1. Date of payment = 1st May
2. 60 days from date of date of invoice = 2nd April
Thus, the time of supply of services is 2nd April.
 Place of supply
It is very important to understand the term ‘place of supply’ for determining the right tax to be
charged on the invoice.   
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

A. Place of Supply of Goods

Usually, in case of goods, the place of supply is where the goods are delivered.
So,  the place of supply of goods is the place where the ownership of goods changes.
What if there is no movement of goods. In this case, the place of supply is the location of goods
at the time of delivery to the recipient.
For example: In case of sales in a supermarket, the place of supply is the supermarket itself.
Place of supply in cases where goods that are assembled and installed will be the location where
the installation is done.
For example, A supplier located in Kolkata supplies machinery to the recipient in Delhi. The
machinery is installed in the factory of the recipient in Kanpur. In this case, the place of supply
of machinery will be Kanpur.

B. Place of Supply for Services

Generally, the place of supply of services is the location of the service recipient.
In cases where the services are provided to an unregistered dealer and their location is not
available the location of service provider will be the place of provision of service.
Special provisions have been made to determine the place of supply for the following services:

 Services related to immovable property

 Restaurant services
 Admission to events
 Transportation of goods and passengers
 Telecom services
 Banking, Financial and Insurance services.
In case of services related to immovable property, the location of the property is the place of
provision of services.
Example 1:
Mr. Anil from Delhi provides interior designing services to Mr. Ajay(Mumbai). The property is
located in Ooty(Tamil Nadu).
In this case, place of supply will be the location of the immovable property i.e. Ooty, Tamil
Nadu.
Example 2:
A registered taxpayer offers passenger transport services from Bangalore to Hampi. The
passengers do not have GST registration. What will be the place of supply in this case?
The place of supply is the place from where the departure takes place i.e. Bangalore in this case.
Valuation of Supply under GST

Updated on Jun 05, 2020 - 03:18:23 PM

Goods and service tax or GST will be one tax to

subsume all taxes. It will bring in “One nation one tax” regime. 
Being a completely new form of indirect taxation there are many questions in the minds of the
organizations. One of the most important questions is what is valuation of supply under GST?
What will be included in the value of taxable supply on which GST is calculated?
Earlier regime
In the earlier regime, taxes are calculated on the value of goods/services:

Tax Value of goods/services

Excise Transaction value of goods or MRP

VAT Sale Value

Tax Value of goods/services

Service tax Taxable value of service rendered

 Value of supply under GST 

Currently, GST will be charged on the ‘transaction value’. Transaction value is the price actually
paid(or payable) for the supply of goods/services between un-related parties (i.e., price is the sole
consideration)
The value of supply under GST shall include:

1. Any taxes, duties, cess, fees, and charges levied under any act, except GST. GST
Compensation Cess will be excluded if charged separately by the supplier.
2. Any amount that the supplier is liable to pay which has been incurred by the recipient and
is not included in the price.
3. The value will include all incidental expenses in relation to sale such as packing,
commission etc.
4. Subsidies linked to supply, except Government subsidies will be included.
5. Interest/late fee/penalty for delayed payment of consideration will be included.

Example

Let us consider an example of ABC, a manufacturer, selling tools and 

hardware like drills, polishers, spades etc. It sells a power drill to XYZ a wholesaler. The MRP is
Rs. 5,500 but ABC sells it for Rs. 3,000.
Currently, the invoice will look like-
Value of supply under GST
The va lue of
goods Power Drill 3,000 &/or

Add: Excise @ 12.5% 375

Subtotal 3,375

Add: VAT @14.5% (on subtotal) 490

Total 3,865

services supplied is the transaction value, i.e. the price paid/payable, which is Rs 3,000 in the
example. Assuming CGST=9% and SGST= 9%

Power Drill 3,000

Add: CGST @9% 270

Add: SGST @9% 270

Total 3,540

Discounts
Discounts will be treated differently under GST.Discounts given before or at the time of supply
will be allowed as a deduction from transaction value. Discounts given after supply will be
allowed only if certain conditions are satisfied.
Please read part II of this article which deals with discounts and impact of GST along with
examples.
Valuation of supply when a transaction is not in INR.
When exports are made the invoice may be raised by the taxpayer in Foreign Currency. The
IGST (if any) charged in the invoice will be converted using RBI Exchange Rate. The exchange
rates are available on the RBI Website.
RBI exchange rates are to be used in case of imports too. When reverse charge is applicable on
imported supplies the invoice amount has to be converted using the RBI Exchange Rate.
  

REGISTRATION UNDER GST

Multiple taxes are merged under the GST structure for example Excise, Entry Tax, Sales Tax,
Service Tax, VAT etc. Earlier taxpayers were under the burden of complex tax structure and thus
ultimately they were paying taxes over such tax, hence to simplify the Indirect Taxation system,
GST is introduced. Government introduce this taxation system as One Nation, One Market, One
Tax, hence it will lead to uniform taxation system all around the counry thus state wise different
tax rates is no longer be the case. it will also boost the secnerio of ease of doing business in the
country.
The process of registration is referred as GST registration under GST Act. GST registration is
very important because it will enable you to avail various benefits that are available under the
GST regime, Also, timely registration will help you to avoid any kind of interface with tax
authorities. In simple words registratioin under GST as a normal taxpayer person is mandatory
for every business entirty carrying out a taxable supply of goods or services and whose turnover
exceeds the threshold limit of Rs. 20 lakh/ 10 Lakh as applicable for different states. A person
without GST registration can neither collect GST from his customers/ Consumers/ Clients nor
claim any input tax credit of GST paid by him on his purchases. Hence one of the most important
benefit is to avail seamless input tax credit.
GST registration is Mandatory for:-
 Any business whose turnover in a financial year exceeds Rs 20 lakhs (limit is Rs 10 lakhs
for special category States) Section 22 (1)
(Note: If turnover is of only exempted good /services which are exempt under GST, this clause
does not apply.)
 Every person who, on the day immediately preceding the appointed day, is registered or
holds a licence under an existing law, shall be liable to be registered under this Act with effect
from the appointed day (Section 22 (2))
 persons making any inter-State taxable supply;
 casual taxable persons making taxable supply;
 persons who are required to pay tax under reverse charge;
 person who are required to pay tax under sub-section (5) of section 9;
 non-resident taxable persons making taxable supply;
 persons who are required to deduct tax under section 51, whether or not separately
registered under this Act;
 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, whether or not separately registered under this Act;
 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;
 every electronic commerce operator;
 every person supplying online information and database access or retrieval services from
a place outside India to a person in India, other than a registered person; and
 such other person or class of persons as may be notified by the Government on the
recommendations of the Council.
The following persons shall not be liable to registration
 Any person engaged exclusively in the business of supplying goods or services or both
that are not liable to tax or wholly exempt from tax under this Act or under the Integrated Goods
and Services Tax Act.
 An agriculturist, to the extent of supply of produce out of cultivation of land.
 The Government on the recommendations of the Council may specify by notification.
Process of Registration Under GST
GST registration process is a online process through a online portal provided by Central
Government of India. Government also appoint GSPs (GST Suvidha Providers) to help
businesses with the registration process. Facilitation Center are also available for assisting
taxpayers for getting registration under GST.
Registration process for getting GST Registration is quite simple and important steps are as
Follow:-
Step One:-
 Logon to the GST online portal and select New registration.
 The applicant, will need to submit his PAN, mobile number and email address in Part A
of Form GST REG–01 on the GSTN portal.The PAN is verified on the GST Portal. Mobile
number and E-mail address are verified with a one-time password (OTP).
 Temporary Reference Number (TRN) will be allotted after successfully furnishing
preliminary details in PART –A of the application which can be used for filling up details in
PART-B of the application. TRN will be available on the Common Portal with a validity of a
period of 15 days.
Step Two:
 Applicant needs to fill Part- B of Form GST REG-01 then the form can be submitted
after attaching required documents as applicable.
Step Three:
 Your Application is Now Submitted and under process, The GST Officer now will verify
your application on the basis of data and details you provided in application.
(This Process will lasts for Three Days that means the officer has to either approve your request
or submit all of his objections for further process and clarification.)
Step Four:
 If the information and the uploaded documents are found in order, the State and the
Central authorities shall approve the application and communicate the approval to the common
portal within three common working days. The portal will then automatically generate the
Registration Certificate Form GST REG –06.
(In case no deficiency is communicated to the applicant by the tax authorities within three
common working days, the registration shall be deemed to have been granted)
 The applicant shall be informed of the fact of grant or rejection of his registration
application through an e-mail and SMS by the GST common portal.
Step Five:
 If additional information is required, Form GST REG-03 will be issued. Applicant needs
to respond in Form GST REG-04 with required information within 7 working days from the
date of receipt of Form GST REG-03.
Step Six:
 The officer will further look in to the application / documents submitted in detail and then
either approve or reject the application with in seven days.
In case registration is refused, the applicant will be informed about the reasons for such refusal
through a speaking order.The applicant shall have the right to appeal against the decision of the
Authority. 
Final Step:
 If you have provided all required information via Form GST REG-01 or Form GST
REG-04,the registration certificate in Form GST REG –06 will be issued to the applicant,for the
principal place of business as well as for every additional place of business
Note:
 In case registration is granted, applicant can download the Registration Certificate from
the GST common portal.
 No fee is payable for filing application for registration.
 Fifteen digits GSTIN includes First two digit of state code next TEN characters of PAN
and TWO characters of entity code & one checksum character
 Every certificate of registration shall be digitally signed by the proper officer under the
Act. The registration Certificate once granted is permanent unless surrendered, cancelled,
suspended or revoked.
 As per Section 25(3) A person, though not liable to be registered under section 22 or
section 24 may get himself registered voluntarily, and all provisions of this Act, as are applicable
to a registered person, shall apply to such person.
 Any person who applies for registration may give an option to pay tax under section 10
(Composition Scheme) in Part B of FORM GST REG-01, which shall be considered as an
intimation to pay tax under the said section.
 As per Section 28(3) Any rejection or approval of amendments under the State Goods
and Services Tax Act or the Union Territory Goods and Services Tax Act, as the case may be,
shall be deemed to be a rejection or approval under this Act.
 A person seeking registration under this Act shall be granted a single registration in a
State or Union territory: Provided that a person having multiple business verticals in a State or
Union territory may be granted a separate registration for each business vertical, subject to such
conditions as may be prescribed. Section (25)(5)
 Special provisions for registration relating to casual taxable person and non-resident taxable
person.
Section 27 of CGST Act provides for special provisions relating to casual taxable person
and non-resident under GST. As per section 24 of CGST Act 2017, casual taxable person or a
non-resident taxable person are liable to get registered under this act irrespective of the their total
turnover. Further a casual taxable person or a non-resident taxable person shall apply for
registration at least five days prior to the commencement of business. Section 25.
Section 27 says that Casual/non-resident taxable person may obtain a temporary registration for a
period of 90 days (extendable for additional 90 days).
A casual taxable person or a non-resident taxable person shall, at the time of submission of
application for registration under sub-section (1) of section 25, make an advance deposit of tax in
an amount equivalent to the estimated tax liability of such person for the period for which the
registration is sought.
Basic Documents required for GST registration:
 Photographs of applicant as per business entity i.e. Indvidual / Partners/ MD/ Directors/
Authorised person etc
 PAN card No./ Aadharcard No./ Valid Mobile No./ E-mail ID of the Applicant
 Proof of constitution like partnership deed, Memorandum of Association (MOA)
/Articles of Association (AOA), certificate of incorporation any other Registration Certificate
issued by government.
 Details and proof of place of business like Rent Agreement/Lease Deed/Electricity Bill/
Consent Letter/ Affidavit as the case may be.
 Cancelled cheque/ Bank Passbook of your bank account showing name of account
holder, MICR code, IFSC code and bank branch details.
 Authority Letter/ Board Resolution for applying for GST
Effective date of registration
 Where the application for registration has been submitted within thirty days from the date
on which the person becomes liable to registration, the effective date of registration shall be the
date of his liability for registration.
 Where an application for registration has been submitted by the applicant after thirty days
from the date of his becoming liable to registration, the effective date of registration shall be the
date of grant of registration.
 In case of suo moto registration, i.e. taking registration voluntarily while being within the
threshold exemption limit for paying tax, the effective date of registration shall be the date of
order of registration.
Digitally Signed Application
Taxpayers would have the option to sign the submitted application using valid digital signatures
or other alternative mechanisms. Further some specified taxpayers mandatorily have to sign
digitally only, details are given in table below:-

SR. No. Type of Applicant Type of Signature required

1 Private Limited Company, Public Limited Digital Signature

Company, Public Sector Undertaking, Certificate (DSC)- Class-2
Unlimited Company, Limited Liability and above
Partnership, Foreign Company, Foreign
Limited Liability Partnership

2 Other than above Digital Signature

Certificate class 2 and
  above e-Signature or any
other mode as may be
notified

Further Amendments to the Registration Certificate is permissible

As per Section 28 Every registered person and a person to whom a Unique Identity Number has
been assigned shall inform the proper officer of any changes in the information furnished at the
time of registration or subsequent thereto, in such form and manner and within such period as
may be prescribed. The proper officer may, on the basis of information furnished or as
ascertained by him, approve or reject amendments in the registration particulars in such manner
and within such period as may be prescribed.
Provided that approval of the proper officer shall not be required in respect of amendment of
such particulars as may be prescribed, Provided further that the proper officer shall not reject the
application for amendment in the registration particulars without giving the person an
opportunity of being heard.
Cancellation OF GST Registration
The proper officer may, either on his own motion or on an application filed by the registered
person or by his legal heirs, in case of death of such person, cancel the registration, in such
manner and within such period as may be prescribed, having regard to the circumstances where,–
(a) the business has been discontinued, transferred fully for any reason including death of the
proprietor, amalgamated with other legal entity, demerged or otherwise disposed of;
(b) there is any change in the constitution of the business;
(c) the taxable person, other than the person registered under sub-section (3) of section 25, is no
longer liable to be registered under section 22 or section 24.
Further the registration may be cancelled with retrospective effect by the proper officer in
following cases:
(a) registered person has contravened such provisions of the Act or the rules made thereunder as
may be prescribed;
(b) registered person paying tax under section 10 (Composite Scheme) has not furnished returns
for three consecutive tax periods, and other registered person, has not furnished returns for a
continuous period of six months;
(d) any person who has taken voluntary registration under sub-section (3) of section 25 has not
commenced business within six months from the date of registration;
(e) registration has been obtained by means of fraud, wilful misstatement or suppression of facts:
Provided that the proper officer shall not cancel the registration without giving the person an
opportunity of being heard.
The cancellation of registration under this section shall not affect the liability of the person to
pay tax and other dues under this Act or to discharge any obligation for any period prior to the
date of cancellation.
The cancellation of registration under the State Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a cancellation
of registration under this Act.
Important forms Related with GST Registration:
Various forms pertaining to registration and its cancellation as provided under the GST law are
given in table below:-

egistration Under GST

SR. No. Forms Particulars

1. GST REG-01 Application for Registration (Other than a non-resident taxable

person, a person supplying online information and data base access
or retrieval services from a place outside India to a non-taxable
online recipient referred to in section 14 of the Integrated Goods and
Services Tax Act, a person required to deduct tax at source under
section 51 and a person required to collect tax at source under
section 52))

2. GST REG-02 Acknowledgement

3. GST REG-03 Notice for Seeking Additional Information / Clarification /

Documents relating to Application for Registration / Amendment /
 Cancellation

4. GST REG-04 Clarification /additional information/ document for Registration /

Amendment / Cancellation

5. GST REG-05 Order of Rejection of Application for Registration/ Amendment /

Cancellation

6. GST REG-06 Registration Certificate

Application for Registration of Non Resident Taxable Person

SR. No. Forms Particulars

1. GST REG-09 Application for Registration of Non Resident Taxable Person

Cancellation Of Registration

SR. No. Forms Particulars

1. GST REG-16 Application for Cancellation of Registration

2. GST REG-17 Show Cause Notice for Cancellation of Registration

3. GST REG-18 Reply to the Show Cause Notice issued for Cancellation

4. GST REG-19 Order for Cancellation of Registration

5. GST REG-20 Order for dropping the proceedings for cancellation of registration

6. GST REG-21 Application for Revocation of Cancellation of Registration

7. GST REG-22 Order for revocation of cancellation of registration

 GST Invoice
An invoice or a GST bill is a list of goods sent or services provided, along with the amount due
for payment.

2. Who should issue GST Invoice?

If you are a GST registered business, you need to provide GST-complaint invoices to your
clients for sale of good and/or services.
Your GST registered vendors will provide GST-compliant purchase invoices to you

3. What are the mandatory fields a GST Invoice should have?

A tax invoice is generally issued to charge the tax and pass on the input tax credit. A GST
Invoice must have the following mandatory fields-

1. Invoice number and date

2. Customer name
3. Shipping and billing address
4. Customer and taxpayer’s GSTIN (if registered)**
5. Place of supply
6. HSN code/ SAC code
7. Item details i.e. description, quantity (number), unit (meter, kg etc.), total value
8. Taxable value and discounts
9. Rate and amount of taxes i.e. CGST/ SGST/ IGST
10. Whether GST is payable on reverse charge basis
11. Signature of the supplier

**If the recipient is not registered AND the value is more than Rs. 50,000 then the invoice
should carry:
   i. name and address of the recipient,
  ii. address of delivery,
  iii. state name and state code
Here is a sample invoice for your reference:
4. By when should you issue invoices?
The GST Act has defined time limit to issue GST tax invoice, revised GST bill, debit note, and
credit note.
Following are the due dates for issuing an invoice to customers:
5. How to personalize GST Invoices?
You can personalize your invoice with your company’s logo. The ClearTax BillBook allows you
to create and personalize GST Invoice free of cost.

6. What are other types of invoices?

6.A. Bill of Supply

A bill of supply is similar to a GST invoice except for that bill of supply does not contain any tax
amount as the seller cannot charge GST to the buyer.
A bill of supply is issued in cases where tax cannot be charged:

 Registered person is selling exempted goods/services,

 Registered person has opted for composition scheme

Invoice-cum-bill of supply
As per Notification No. 45/2017 – Central Tax dated 13th October 2017
If a registered person is supplying taxable as well as exempted goods/ services to an unregistered
person, then he can issue a single “invoice-cum-bill of supply” for all such supplies.

6.B. Aggregate Invoice

If the value of multiple invoices is less than Rs. 200 and the buyer are unregistered, the seller can
issue an aggregate or bulk invoice for the multiple invoices on a daily basis.
For example, you may have issued 3 invoices in a day of Rs.80, Rs.90 and Rs. 120. In such a
case, you can issue a single invoice, totaling to Rs290, to be called an aggregate invoice.
. Debit and credit note

A debit note is issued by the seller when the amount payable by the buyer to seller increases:

1. Tax invoice has a lower taxable value than the amount that should have been charged
2. Tax invoice has a lower tax value than the amount that should have been charged

A credit note is issued by the seller when the value of invoice decreases:

1. Tax invoice has a higher taxable value than the amount that should have been charged
2. Tax invoice has a higher tax value than the amount that should have been charged
3. Buyer refunds the goods to the supplier
4. Services are found to be deficient

7. Can you revise invoices issued before GST?

Yes. You can revise invoices issued before GST. Under the GST regime, all the dealers must
apply for provisional registration before getting the permanent registration certificate.
Refer to this image below to understand the protocol of issuing a revised invoice:
This applies to all the invoices issued between the date of implementation of GST and the date
your registration certificate has been issued.
As a dealer, you must issue a revised invoice against the invoices already issued. The revised
invoice has to be issued within 1 month from the date of issue of the registration certificate.

8. How many copies of Invoices should be issued?

 For goods– 3 copies

 For services– 2 copies

9. GST Invoicing under Special Cases?

In some cases, like banking, passenger transport, etc., the government has provided relaxations
on the invoice format issued by the supplier.
 Composite Supply under GST
This is a new concept introduced in GST which will cover supplies made together whether the
supplies are related or not. Supplies of two or more goods or services can be either ‘composite
supply’ or ‘mixed supply’. The concept of composite supply in GST regime is similar to the
concept of naturally bundled services under Service Tax Law. However, the concept of mixed
supply is entirely new.

What is a supply under GST?

The expression “supply” simply means all forms of supply of goods/ services. It is made for a
consideration during the course of business and includes the following:

 Sale
 Transfer
 Barter
 Exchange
 License
 Rental
 Lease
 Disposal
 Import of services for a consideration (if even it is not in the course or furtherance of
business)

Certain activities specified in Schedule I of GST Act will also be treated as supply.

 

Why is the concept of mixed supply & composite supply important?

Specific rates for goods and services have been defined by the GST Council. GST Rate for each
type of goods and services have been defined in the GST Law. So if you are supplying a
particular good or a service rates are easy to identify. However, sometimes supply of a good and
service may be connected or may be done together even though not connect. Say for example, an
AC is supplied and AC installation services are also supplied along with it. The GST Act defines
how such supply must be rated.
 
Therefore, the concept of composite supply and mixed supply becomes important. It helps to
determine the correct GST rate and provides uniform tax treatment under GST for such supplies.

What is a bundled supply?

A bundled supply is a combination of goods and/or services. This concept was mainly found in
service tax where a bundled service meant a combination of two or more services.

How to determine if it is naturally bundled, i.e., it cannot be separated?

The question of bundled supply in the ordinary course of business depends on the normal
practices followed in the industry. Here are some ways to identify them:

1. If buyers mostly expect such services to be provided as a package, then the package will
be treated as naturally bundled.

For example, most business conventions look for combination of hotel accommodation,
auditorium and food.
2. If most of the service providers in the industry provide a package of services then it can be
considered as naturally bundled. For example, air transport and food on board is a bundle offered
by most airlines.
3. The nature of the various services in a bundle of services will also help to identify whether the
services are bundled.
If there is a main service and the others are ancillary service then it becomes a bundled service.
For example, five- star hotels often provide free laundry services on staying at the hotel. Renting
the room is the primary service and laundry is ancillary. A person can opt for laundry services
only if he is staying at the hotel
 
Other indicators of bundling of services in the ordinary course of business (but they are not a
foolproof identification):
– There is a single price for the package even if the customers opt for less
– The components are normally advertised as a package
– The different components are not available separately
 

What is composite supply under GST?

Composite supply means a supply is comprising two or more goods/services, which are naturally
bundled and supplied in with each other in the ordinary course of business, one of which is a
principal supply.
It means that the items are generally sold as a combination.
The items cannot be supplied separately.
 

How to determine if it is a composite supply?

A supply of goods and/or services will be treated as composite supply if it fulfills the following
criteria:

 Supply of 2 or more goods or services together AND

 It is a natural bundle, i.e., goods or services are usually provided together in the

normal course of business. 

 They cannot be separated.

 
What tax rate will apply?
The tax rate of the principal supply will apply on the entire supply.
Example:
 Goods are packed and transported with insurance. The supply of goods, packing materials,
transport and insurance is a composite supply. Insurance, transport cannot be done separately if
there are no goods to supply. Thus, the supply of goods is the principal supply.
Tax liability will be the tax on the principal supply i.e., GST rate on the goods.
If the second condition is not fulfilled it becomes a mixed supply.
 

What is mixed supply under GST?

 Mixed supply under GST means a combination of two or more goods or services made
together for a single price.
 Each of these items can be supplied separately and is not dependent on any other.

Under GST, a mixed supply will have the tax rate of the item which has the highest rate of
tax.
For example-
A Diwali gift box consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drink
and fruit juices supplied for a single price is a mixed supply. All are also sold separately. Since
aerated drinks have the highest GST rate of 28%, aerated drinks will be treated as principal
supply and 28% will apply on the entire gift box.
 

How to determine if it is a mixed supply or a composite supply?

You have to rule out that the supply is a composite supply. A supply can be a mixed supply only
if it is not a composite supply.
If the items can be sold separately, i.e., the supplies not naturally bundled in the ordinary course
of business, then it would be a mixed supply.
 
For example:
If a person buys canned foods, sweets, chocolates, cakes, dry fruits, aerated drink and fruit juices
separately and not as a Diwali gift box, then it is not considered a mixed supply. All items will
be taxed separately.
Differences between mixed and composite supplies
 

Particulars Composite Supply Mixed supply

Main item Principal item Item with highest tax rate

Tax rate applicable Tax rate of principal item Highest tax rate of all the items

Important GST Terms, Definitions and Applicability

GST, the new genre taxation module is imbibed with numerous new terms and nomenclatures,
which you should be aware about.
The article aims to apprise you of all the GST terms, their broad definitions and their
applicability.
Following are the major ones, some of which you may have heard until now or may encounter
soon:
 GST
 GSTIN
 CGST, SGST and IGST
 Reverse Charge
 Mixed Supply
 Composite Supply
 Continuous Supply
 ITC
 GSTR
 GST Compliance Rating
GST
Goods and Services Tax, commonly known as GST, is a single, indirect, multi-stage, destination
based consumption tax, which will replace almost all the existing Central and State taxes,
including but not limited to CENVAT, Octroi, Sales Tax and Excise Duty etc.  GST has replaced
all existing direct and indirect, Central and State taxes, from 1st July, 2017.
GSTIN
GSTIN, i.e. Goods and Services Tax Identification Number is a business’s legal and unique
identity with the government of India in the GST regime. GSTIN is a 15 alphanumeric character,
PAN based distinctive number, allotted state-wise.
CGST, SGST and IGST
GST consists of three major taxes – Central GST, i.e. CGST, State GST i.e. SGST and Integrated
GST i.e. IGST.
The different taxes would enable the tax payers to take credit against each other, enhancing ease
and transparency in the taxation cycle.
 CGST:
Central GST [CGST] is the GST, to be levied by the Centre, on inter-state businesses.
 SGST:
State GST [SGST] is the GST, to be levied by the State, on inter-state businesses.
 IGST:
Integrated GST [IGST] is the GST, to be levied by the Centre, on intra-state businesses and
imports.
Reverse Charge
Reverse Charge is a mechanism and supervisory arrangement to monitor and increase the tax
coverage, compliance, synchronization and track-ability amongst unorganized, partly organized
and fully organized sectors.
Generally, the supplier of goods or services is liable to pay GST. However, in specified cases
like imports and other notified supplies, the liability may switch to the recipient under the reverse
charge mechanism. Reverse charge means the liability to pay tax rests on the recipient of supply
of goods or services instead of the supplier, however only on special categories of supply.
Mixed Supply
A mixed supply is a combination of two or more individual supplies of goods or services or any
other arrangement of goods or services made by a GST payer for a single price. The components
of the mixed supply are not organically bundled but it is an intentional fusion from business
perspective.
A mixed supply could be a gifting set comprising of a pen, a tie, a wallet and a key ring.
Composite Supply
A composite supply is an organic combination of two or more individual supplies of goods and
services or any other natural arrangement of goods or services made by a GST payer for a single
price.
A composite supply is further broken into two parts:
 Principal Supply: The major and the foremost element in the Composite Supply of goods
or services.
 Dependent Supply: This is the depending element and rests on the Principal Supply.
A composite supply could be a breakfast coupled with the stay package in a hotel, which would
be seen as a natural blend. In this case, stay package is the Principal Supply and the breakfast is a
Composite Supply.
Continuous Supply
A continuous supply is a supply, when the goods and / or services are supplied at a specific
interval [fortnight / monthly] and the payments are also received in the same manner.
A composite supply could be the services provided by a telecom operator.
ITC
Input tax credit [ITC] is the credit manufacturers receive for paying input taxes towards inputs
used in the manufacture of products. Likewise, a dealer is entitled to input tax credit, if he has
purchased goods for resale.
To avoid double taxation on items used as inputs to make other items, credit of taxes paid on the
inputs can be taken by the maker of the next item while paying tax on the output. If the tax paid
on inputs is higher than the tax on the output, the excess can be claimed as a refund.
Input Tax Credit is not generic for PAN India, differs state-wise and does not apply to the
composite tax payers.
GSTR
GSTR, i.e. GST Return is a document capturing the details of the income, which a tax payer is
supposed to file with the authorities to calculate his tax liability. There are total eleven types of
GST returns, starting from GSTR-1 to GSTR-11, capturing and catering to different forms of tax
payers.
A GST primarily includes:
 Sales data
 Purchase data
 Output GST [Derived from Sales]
 Input Tax Credit [ GST paid on purchases]
GST Compliance Rating
GST Compliance Rating is primarily a numerical value and a score between [0 -10] assigned by
the government to all the tax payers, which speaks about being their GST compliance. The rating
is assigned to all the GSTIN and GSTUIN holders based on a number of factors including but
not limited to your return filing habits on time, accuracy of your fed data etc. among many
others.
Though the actual rating format is still to be announced, however it should be similar to having a
0-10 scale, where zero accounts for the lowest score and 10 denotes a cent percent compliance.
To avail the ITC and also keep it flowing seamlessly, the rating would be a critical factor. If the
ITC is not available smoothly, the working capital will also be impacted adversely. The rating
will also impact the legitimate buyers to avail the input tax credit, if the suppliers is not
complying up to the mark.
Amendments To The Central Goods And Services Tax Act,
Under The Finance Bill, 2019

1. Composition Scheme

 Section 10: Composition Scheme 

A new sub-section has been introduced to bring in a similar Composition Scheme for Service
Providers, as well as suppliers of both goods and services (mixed suppliers), having an annual
turnover of up to Rs 50 lakhs in the preceding financial year.
Two further explanations have been added to this section-
(i) Value of exempt supplies of services provided by way of extending deposits, loans or
advances, with interest or discount as the consideration shall not be considered as part of the
aggregate turnover, for determining eligibility into the scheme.
(ii) Value of exempt supplies of services provided by way of extending deposits, loans or
advances, with interest or discount as the consideration shall not be considered as part of the
aggregate turnover, to determine the value of turnover in a particular State or Union Territory.
In addition, any supplies made from 1st April of the year till the date the taxpayer becomes liable
for registration shall not be taken into account.
Our take: As committed by the GST Council this amendment brings into effect the composition
scheme for mixed suppliers. It also clarifies that services that include extending deposits etc
shall not be part of aggregate turnover. This brings clarity for taxpayers who were worried
about including such supplies while estimating aggregate turnover and whether they will have
higher GST composition liability on account of such services.
2. Registration

 Section 22: Persons liable for registration

The threshold limit for Registration under GST has been increased from Rs 20 lakhs to Rs 40
lakhs for a supplier of goods only. 
Our take: The GST Council has proposed this change in the 32nd Council Meet, to come into
force from the 1st of April, 2019. However, this has now been passed in Parliament. Only those
suppliers of goods whose turnover exceeds Rs 40 lakhs will now come under the purview of GST
registration. This amendment is beneficial especially for small and medium taxpayers who do
not need to get themselves registered under GST unless their turnover exceeds Rs 40 lakhs. This
applies only to those who are exclusive suppliers of goods. 

 Section 25: Procedure for Registration

A new sub-section has been introduced to mandate authentication using Aadhaar number for
every registered person under GST. This section also prescribes the manner in which Aadhaar
authentication needs to be done. In case a person fails to undergo Aadhaar authentication, then
his registration would be deemed invalid.
This provision will also be applicable in cases where registration is being granted for the first
time. In addition to this, the Aadhaar number of the authorized signatory such as Karta,
Managing Director, Board of Trustees, etc as per the list specified by the Government, shall also
need to be authenticated.
Our take: The mandatory disclosure of the Aadhaar number, first under the Income Tax Act,
and now under the Central Goods and Services Act, shows the importance the Government has
now placed on the Aadhaar Card. The government plans to administer both direct and indirect
taxes via Aadhaar while PAN may continue to be in use for routine compliances.

3. Mode Of Making Supplier Payments

 Section 31A: Mode of Payment

This will be a new section inserted in the CGST Act which will mandate certain registered
suppliers to give their recipients the option of prescribed modes of electronic payment.
Our take The Government is moving towards a cashless economy, and one such measure is the
introduction of electronic modes of payment for certain payment and certain registered persons.
Under this new section, these registered suppliers will have to mandatorily give their recipients
the option of making electronic payments. This move will also help prevent the evasion of taxes.
This is in line with an amendment made in the direct tax act, which requires businesses with a
turnover in excess of Rs 50 crores to mandatorily provide electronic means of payment. E-
payment charges for such suppliers shall also not be borne by them, Giving cashless economy an
essential push. 

4. Furnishing Of Returns
  Section 39: Furnishing of Returns

This section has been amended to introduce an option for specified taxpayers to furnish their
returns on a quarterly basis instead of monthly. Taxes will need to be paid monthly.
Likewise, the sub-section prescribes the time limit for Composition taxpayers to file their
returns, which as per the Act, formerly need to have been filed every quarter. The Government
has now introduced the annual filing of returns for Composition Taxpayers, however, the tax will
still need to be paid on a quarterly basis. 
Our take: Small and Medium Businesses, as well as Composition dealers, had found the
compliance under GST to be cumbersome and costly. As per the latest update in the Finance
Bill, now a specified class of taxpayers can file a single quarterly return, and in the case of
Composition taxpayers, an annual return can be filed instead. This will greatly reduce the cost
and burden of compliance to these small businesses, who had to file as many as 24 monthly
returns in the past. This is line with announcements made in the GST Council meetings.

5. Payment Of Taxes And Interest

 Section 49: Payment of tax, interest, penalty and other amounts

To remove inconveniences for taxpayers, a new sub-section has been added to facilitate the
transfer of amounts paid under tax, interest, penalty, fee or any other amount that is available in
the electronic cash ledger to the correct head under integrated tax, central tax, State tax, Union
territory tax or cess in the electronic cash ledger, as applicable.
Our take: This was a long-standing problem that causes grievances amongst taxpayers who
have mistakenly paid taxes under the wrong head of tax, in the past. Previously, this tax could
not be utilised and would need to be paid again under the correct head. The introduction of this
sub-section means that henceforth, all taxes that are incorrectly paid under the wrong heads of
tax can now be simply transferred to the correct head.

 Section 50: Interest on delayed payment of tax

This section has been amended to levy interest on unpaid taxes only to the extent of that portion
paid in cash i.e. through the electronic cash ledger.
Our take: This will be a welcome move for taxpayers who, earlier, had to pay interest on the
entire portion of unpaid taxes without allowing ITC, if taxes had not been paid within the due
dates prescribed. However, with the amendment in this section, taxpayers now only need to pay
on that portion of tax which is paid by cash or in other words, through the electronic cash
ledger, thus reducing their tax burden.
This benefit will not extend to those cases where proceedings have been initiated under Section
73 and Section 74, i.e if there is a pending investigation and tax is due, interest shall have to be
paid on the gross tax liability.

6. Miscellaneous
  Section 171: Anti-profiteering measure 

This section has been amended to empower the National Anti-profiteering Authority to impose a
penalty that is equivalent to 10% of the profiteered amount.
The National Anti-profiteering Authority examines whether the benefit of input tax credit has
been passed on to the recipient by way of reduction in prices, and that no supplier unlawfully
benefits from the same.
Our take: This move will help in preventing the suppliers from using the benefit of input tax
credit to reduce their tax costs while at the same time, not reduce prices for consumers.

e- Way Bill? E Waybill Rules & Generation Process Explained

Latest Updates
VAHAN-e-Way Bill Integration
In February 2020, the e-way bill portal has been linked to the VAHAN system. A pilot run has
already begun in the state of Karnataka. Now, the vehicle registration number will be validated at
the time of generating e-way bill.
Blocking and Unblocking of E-way Bill

1. E-way bill generation is blocked for taxpayers who have not filed their returns for the
previous two consecutive months/quarters.
2. Thus, if a taxpayer has not filed GSTR-3B for two or more consecutive months, then
he/she cannot generate e-way bills to do dispatches and receive goods, resulting in a
standstill.
3. Only when a taxpayer files GSTR-3B, the e-way bills will get unblocked on the next day.
4. The system of e-way bill blocking was implemented from the 2nd of December 2019.

All States require to use e-way bills for Intra-state movement of goods

1. E-way bill requirement for Intra State movement of goods in Delhi began from 16th
June 2018.
2. E-way bill operations are compulsory for intra-state movement of goods for all states
except Delhi with effect from 3rd June 2018
3. Eway bill operations are compulsory for intra-state movement of goods for Andaman &
Nicobar, Chandigarh, Dadar & Nagar Haveli, Daman & Diu, Lakshadweep, Maharashtra
and Manipur from 25th May 2018
4. eway bill operations are enabled on trial basis for the intra-state movement of goods
for Odisha from 23rd May 2018
5. Roll out of e Way Bill system for intra-State movement of goods in the States / Union
Territory of Arunachal Pradesh, Madhya Pradesh, Meghalaya, Sikkim and
Puducherry from 25 April 2018
On EWay bill generation

1. Latest Update as on 26th Sept 2018:New enhancements are done in the E- Way Bill
(EWB) generation form to be released on 1st of October 2018 as below:

2. Now multi-vehicle updation is possible for the e-way bill. Know more

3. In case of ‘Bill To’ & ‘Ship to’, now consignor  (seller) or consignee (buyer) either of
them can generate Eway bill

1. What is an eWay Bill?

EWay Bill is an Electronic Way bill for movement of goods to be generated on the eWay Bill
Portal. A GST registered person cannot transport goods in a vehicle whose value exceeds Rs.
50,000 (Single Invoice/bill/delivery challan) without an e-way bill that is generated on
ewaybillgst.gov.in.
Alternatively, Eway bill can also be generated or cancelled through SMS, Android App and by
site-to-site integration through API.
When an eway bill is generated, a unique Eway Bill Number (EBN) is allocated and is available
to the supplier, recipient, and the transporter.

2.When Should eWay Bill be issued?

  eWay bill will be generated when there is a movement of goods in a vehicle/ conveyance of
value more than Rs. 50,000 (either each Invoice or in aggregate of all invoices in a
vehicle/conveyance)  –

 In relation to a ‘supply’
 For reasons other than a ‘supply’ ( say a return)
 Due to inward ‘supply’ from an unregistered person

For this purpose, a supply may be either of the following:

 A supply made for a consideration (payment) in the course of business

 A supply made for a consideration (payment) which may not be in the course of business
 A supply without consideration (without payment)In simpler terms,  the term ‘supply’
usually means a:

1. Sale – sale of goods and payment made

2. Transfer – branch transfers for instance
3. Barter/Exchange – where the payment is by goods instead of in money

Therefore, eWay Bills must be generated on the common portal for all these types of
movements. For certain specified Goods, the eway bill needs to be generated mandatorily even if
the value of the consignment of Goods is less than Rs. 50,000:

1. Inter-State movement of Goods by the Principal to the Job-worker by Principal/

registered Job-worker***,
2. Inter-State Transport of Handicraft goods by a dealer exempted from GST registration

3. Who should Generate an eWay Bill?

 Registered Person – Eway bill must be generated when there is a movement of goods of
more than Rs 50,000 in value to or from a registered person. A Registered person or the
transporter may choose to generate and carry eway bill even if the value of goods is less
than Rs 50,000.
 Unregistered Persons – Unregistered persons are also required to generate e-Way Bill.
However, where a supply is made by an unregistered person to a registered person, the
receiver will have to ensure all the compliances are met as if they were the supplier. 
 Transporter – Transporters carrying goods by road, air, rail, etc. also need to generate e-
Way Bill if the supplier has not generated an e-Way Bill.

Update as on 23rd Mar 2018:

Until a date yet to be notified, the transporters need not generate the Eway bill (as Form EWB-01
or EWB-02) where all the consignments in the conveyance :

 Individually(single Document**) is less than or equal to Rs 50,000 BUT

  In Aggregate (all documents** put together) exceeds Rs 50,000

**Document means Tax Invoice/Delivery challan/Bill of supply

Unregistered Transporters will be issued Transporter ID on enrolling on the e-way bill portal
after which Eway bills can be generated.

Who When Part Form

Every Registered person Before movement of Fill Part A Form GST EWB-01
under GST goods

Registered person is Before movement of Fill Part B Form GST EWB-01

consignor or consignee goods
(mode of transport may be
owned or hired) OR is
recipient of goods

Registered person is Before movement of Fill Part B  The registered person

consignor or consignee goods shall furnish the
and goods are handed over information relating to
to transporter of goods the transporter in Part B
of FORM GST EWB-01

Transporter of goods Before movement of  Generate e-way bill on

goods basis of information
shared by the registered
person in Part A of
FORM GST EWB-01

An unregistered person Compliance to be  1. If the goods are

under GST and recipient is done by Recipient as if transported for a distance
registered he is the Supplier. of fifty kilometers or
less, within the same
State/Union territory
from the place of
business of the consignor
to the place of business
 of the transporter for
further transportation,
the supplier or the
transporter may not
furnish the details of
conveyance in Part B of
FORM GST EWB-01. 2.
If supply is made by air,
ship or railways, then the
information in Part A of
FORM GST EWB-01
has to be filled in by the
consignor or the
recipient

Note: If a transporter is transporting multiple consignments in a single conveyance, they can use
the form GST EWB-02 to produce a consolidated e-way bill, by providing the e-way bill
numbers of each consignment. If both the consignor and the consignee have not created an e-way
bill, then the transporter can do so * by filling out PART A of FORM GST EWB-01 on the basis
of the invoice/bill of supply/delivery challan given to them.

4. Cases when eWay bill is Not Required

In the following cases it is not necessary to generate e-Way Bil:

1. The mode of transport is non-motor vehicle

2. Goods transported from Customs port, airport, air cargo complex or land customs station
to Inland Container Depot (ICD) or Container Freight Station (CFS) for clearance by
Customs.
3. Goods transported under Customs supervision or under customs seal
4. Goods transported under Customs Bond from ICD to Customs port or from one custom
station to another.
5. Transit cargo transported to or from Nepal or Bhutan
6. Movement of goods caused by defence formation under Ministry of defence as a
consignor or consignee
7. Empty Cargo containers are being transported
8. Consignor transporting goods to or from between place of business and a weighbridge for
weighment at a distance of 20 kms, accompanied by a Delivery challan.
9. Goods being transported by rail where the Consignor of goods is the Central
Government, State Governments or a local authority.
10. Goods specifed as exempt from E-Way bill requirements in the respective State/Union
territory GST Rules.
 11. Transport of certain specified goods- Includes the list of exempt supply of goods,
Annexure to Rule 138(14), goods treated as no supply as per Schedule III, Certain
schedule to Central tax Rate notifications.  (PDF of List of Goods).

Note: Part B of e-Way Bill is not required to be filled where the distance between the consigner
or consignee and the transporter is less than 50 Kms and transport is within the same state.

 5. Status of Implementation across India

Inter-State movement of goods has seen rise in numbers of generation of eway bills ever since its
implementation began from 1st April 2018. State-wise implementation of e-way bill system has
seen a good response with all the States and Union Territories joining the league in
the generation of eway bills for movement of goods within the State/UT. However, reliefs have
been provided to people of few States by way of exempting them from eway bill generation in
case of monetary limits falling below threshold amount or certain specified items. For
Instance, Tamil Nadu has exempted people of its State from the generation of eway bill if the
monetary limit of the items falls below Rs. One Lakh. To know more of such reliefs for other
States/UTs, visit commercial tax websites for each of such States/UTs.
 
Validity of eWay Bill
An e-way bill is valid for periods as listed below, which is based on the distance travelled by the
goods. Validity is calculated from the date and time of generation of e-way bill-

Type of conveyance Distance Validity of EWB

Other than Over dimensional cargo Less Than 100 Kms 1 Day

For every additional 100 Kms or part thereof additional 1 Day

For Over dimensional cargo Less Than 20 Kms 1 Day

For every additional 20 Kms or part thereof additional 1 Day

  Validity of Eway bill can be extended also. The generator of such Eway bill has to either four
hours before expiry or within four hours after its expiry can extend Eway bill validity.

THANK YOU
THANK YOU