GST Law Practice Part 1

Model GST Laws Law & Practice
Part-1
GSTpanacea.com Consultancy Pvt. Ltd.
Sumamry
GST Law & Practice (Part-1) Compiled by www.GSTpanacea.com
MODEL LAW GST LAW & PRACTICE (PART-1)

1.
History ............................................................................................................................................................ 2
Kelkar Committee Recommendations ................................................................................................................ 2
Empowered Committee of State Finance Ministers ........................................................................................... 3
2.
GST Panels & their Reports ............................................................................................................................. 3
3.
Model GST Law ............................................................................................................................................... 4

Goods & Service Tax Act2016 ............................................................................................................................ 4
The Integrated Goods & Service Tax Act2016 ................................................................................................... 5
4.
Classes of Officers [Section-4] ........................................................................................................................ 6

Jurisdictions ........................................................................................................................................................ 6
Powers of Officers .............................................................................................................................................. 6
Powers of First Appellate Authority ................................................................................................................... 7
5.
Levy and Collection of Central/State Goods and Services Tax [Section 7] ..................................................... 8
6.
Composition Levy [Section 8] ......................................................................................................................... 8
7.
Taxable Person [Section 9] ............................................................................................................................. 9
8.
Power to Grant EMEXMPTION from Tax [Section 10] .................................................................................. 12
9.
Remission of Tax on Supplies [Section 11] ................................................................................................... 13
10.
Time of Supply of Goods [Section 12] ..................................................................................................... 14

Normal Supply of Goods ............................................................................................................................... 15
Continuous Supply of Goods [Section 12(3)] ................................................................................................ 15
Goods on Reverse Charge Basis [Section 12(5)] ........................................................................................... 16
Time of Supply cannot be Determined [Section 12(7)] ................................................................................ 16
11.
Time of Supply of Services [Section 13] ................................................................................................... 17

Normal Supply Of Services............................................................................................................................ 17
Continuous Supply of Goods [Section 13(3)] ................................................................................................ 18
Supply of Services on Reverse Charge Basis [Section 13(5)] ........................................................................ 19
Time of Supply cannot be Determined [Section 13(7)] ................................................................................ 19
12.
Change in Rate of Tax in Respect of Supply of Services [Section 14] ...................................................... 20

If taxable services has been provided BEFORE the change in effective rate of Tax ..................................... 20
If taxable services has been provided AFTER the change in effective rate of Tax........................................ 20
13.
Value of Taxable Supply [Section 15] ...................................................................................................... 21
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GST LAW & PRACTICE

INTRODUCTION TO GST
"Goods and Services Tax" would be a comprehensive indirect tax on manufacture,
sale and consumption of goods and services throughout India, to replace taxes levied
by the Central and State governments. Goods and services tax would be levied and
collected at each stage of sale or purchase of goods or services based on the input
tax credit method. This method allows GST-registered businesses to claim tax credit
to the value of GST they paid on purchase of goods or services as part of their normal
commercial activity. Taxable goods and services are not distinguished from one
another and are taxed at a single rate in a supply chain till the goods or services reach
the consumer. Administrative responsibility would generally rest with a single authority
to levy tax on goods and services. Exports would be zero-rated and imports would be
levied the same taxes as domestic goods and services adhering to the destination
principle.
1. HISTORY
In 2000, the Vajpayee government set up the Empowered Committee of State Finance
Ministers with the aim of facilitating a switch from the existing national-level central
excise duty and state-level sales tax model to a value added tax (VAT) model.
KELKAR COMMITTEE REC OMMENDATIONS
Dr. Vijay Kelkar, was head of Kelkar Committee which submitted Roadmaps for Fiscal
Consolidations. This committee was set up in August2012 which submitted reforms
for medium terms & fiscal consolidations. Among other various suggestions
recommendations for Indirect Taxes were as follows:
implementing the nationwide Goods and Services Tax (GST) recommended by

the 13th Finance Commission. This should increase output, exports and tax
revenues.
The committee recommends reforming union excise duties and service tax to
allow for integration into the GST regime. The standard tax rate of 12% should
be gradually phased down to the 8% proposed for the central GST.
Currently items on the negative list of services are exempt from tax. The list
should be reviewed and pruned
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Then, Finance Minister P. Chidambram, made announcement for introduction of GST

on 28.02.2006. It was then proposed to be introduced wef 01.04.2010.
EMPOWERED COMMITTEE OF STATE FINANCE MIN ISTERS
Task of designing GST was given to empowered committee of State Finance

Ministers. First discussion paper was released on 10.11.2009. All proposed GST Laws
have been developed on the basis of discussion paper.
2. GST PANELS & THEIR REPORTS
Further in February2013 3 GST panels were constituted which are as follows:
GST Panel-1
Determination of Revenue Neutral Rate (RNR)
Place of Provision of Services Rules
GST Panel-2
GST on Inter State Supplies
GST on Imports
GST Panel-3
Dual Administrative Controls
Threshold Limits & Other Exemptions including list of common
exempted items.
In 2015, Reports were issued by these committees with respect to:
Refund Process
Registration
Payment Process
After considering all suggestions, Constitution (One Hundred & Twenty Second
Amendment) Bill 2014 was introduced in December2014 by Finance Minister Arun
Jaitely with now revised implementation date of 01.04.2016. [ Author Comments - Still
waiting for new Dates] This GST Bill was passed by Loksabha (Lower House) in 2015 but
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still pending in Rajya Sabha (Upper House). After Rajya Sabha pass it, Union & States
have to pass GST Acts.
3. MODEL GST LAW
On June 14, 2016 the Finance Ministry has released the 'Model GST Law'. It outlines
the structure of the GST regime. Further, the draft of 'Integrated GST Bill, 2016' is
also released along with such Model GST laws. It also provides the framework for
levy and collection of CGST and SGST. "CGST" is the tax levied under the Central
Goods and Services Tax Bill, 2016. "IGST" is the tax levied under the Integrated
Goods and Services Tax Bill, 2016. This model law is 190 pages long.
Model Law is divided between:
GOODS AND SERVICES TAX ACT, 2016

THE INTEGRATED GOODS AND SERVICES TAX ACT, 2016
GOODS & SERVICE TAX ACT2016
Brief of this proposed legislation is as follows:

GST Act
25 Chapters
162 Sections
4 Schedules
1 Rules
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This has 4 Schedules which are:
I Matters to be treated as supply without consideration.

II Matters to be treated as supply of goods or services.
III Liability to be registered
IV Activities or transactions in respect of which the Central Government, a State
Government or any Local Authority shall not be regarded as a taxable person.
It also have 1 Rules which is GST Valuation (Determination of the Value of

supply of Goods and Services) Rules, 2016.
THE INTEGRATED GOODS & SERVICE TAX ACT2 016
This act contains 11 chapters & 33 Section.
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ADMINISTRATION
4. CLASSES OF OFFICERS [SECTION-4]
There shall be different classes of Officers under the Central GST and States GST
Acts. They are as follows:
Under Central GST
Under States GST
(a) Principal Chief Commissioners of CGST or

Principal Directors General of CGST
(b) Chief Commissioners of CGST or Directors
General of CGST
(c) Principal Commissioners of CGST or
Principal Additional Directors General of CGST
(d) Commissioners of CGST or
Additional Directors General of CGST
(e) First Appellate Authority
(f) Additional Commissioners of CGST or
Additional Directors of CGST
(g) Joint Commissioners of CGST or Joint
Directors of CGST
(h) Deputy Commissioners of CGST or Deputy
Directors of CGST
(i) Assistant Commissioners of CGST or
Assistant Directors of CGST
(j) such other class of officers as may be
appointed for the purposes of this Act.
a) Commissioner of SGST
b) Special Commissioners of SGST,
c) Additional Commissioners of SGST,
d) Joint Commissioners of SGST,
e) Deputy Commissioners of SGST,
f) Assistant Commissioners of SGST, and
g) such other class of officers and persons as
may be appointed for the purposes of this Act.
This list is indicative and there may be more officers as required.
JURISDICTIONS
The Commissioner shall have jurisdiction over the whole of the State of.
All other officers shall have jurisdiction over the whole of the State or over such
areas as the Commissioner may, by notification, specify.
POWERS OF OFFICERS
Subject to such conditions and limitations as may be imposed, an officer may

exercise the powers and discharge the duties conferred or imposed on him under
this Act
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POWERS OF FIRST APPELLATE AUTHORITY
Notwithstanding anything contained in this section, a First Appellate Authority shall

not exercise the powers and discharge the duties conferred or imposed on an officer
of Central Goods and Services Tax other than those specified in section 79 of this
Act.
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LEVY OF, AND EXEMPTION FROM TAXES

Taxes shall be levied and exemptions shall be provide as defined.
5. LEVY AND COLLECTION OF CENTRAL/STATE GOODS AND SERVICES TAX [SECTION 7]
On Intra-State Sale of
Goods or Services
CGST or SGST
@Rate specified in
Schedule
Payable
Reverse Charge
CGST/SGST shall be
paid by every taxable
person
On Certain categories
as may be notified by
Central/State
Government
6. COMPOSITION LEVY [SE CTION 8]
A registered person whose aggregate turnover in a financial year does not exceed
Rs. 50,00,000/- can opt for Composition.
Composition Scheme shall not be available for persons who are dealing in
inter-states supplies of goods and/or services.
Provided further that no such permission shall be granted to a taxable person unless
all the registered taxable persons, having the same PAN as held by the said taxable
person, also opt to pay tax under the provisions of this sub-section.
Section 2(6) aggregate turnover means the aggregate value of all taxable and
non-taxable supplies, exempt supplies and exports of goods and/or services of a
person having the same PAN, to be computed on all India basis and excludes taxes,
if any, charged under the CGST Act, SGST Act and the IGST Act, as the case may
be;
Explanation.- Aggregate turnover does not include the value of supplies on which tax
is levied on reverse charge basis and the value of inward supplies.
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Section 2(42) exempt supply means supply of any goods and/or services which
are not taxable under this Act and includes such supply of goods and/or services
which are specified in Schedule of the Act or which may be exempt from tax under
section 10.
A taxable person to whom the provisions of sub-section (1) apply shall not collect
any tax from the recipient on supplies made by him nor shall he be entitled to any
credit of input tax.
7. TAXABLE PERSON [SECT ION 9]
This section defines taxable person and threshold limit for their turnover.
Taxable Person means a person who carries on any business at any place in India
and who is registered or required to be registered under Schedule III of this act.
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Limits for Taxability is as follows:
All over India (Except North East including Sikkim)
Registered
Person
Turnover
Rs. 10
Lakhs
Taxable
Person
North East Including Sikkim
Registered
Person
Turnover
Rs. 5
Lakhs
Taxable
Person
Note: Agriculturist shall not be considered as a taxable person.
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Can Central Government or State Government or Local Authority be

considered as Taxable Person?
Yes, as per Section 9(2) The Central Government, a State Government or any local
authority shall be regarded as a taxable person in respect of activities or transactions
in which they are engaged as public authorities other than the activities or transactions
as specified in Schedule IV to this Act.
Persons shall not be

considered as Taxable
Person
Employee Providing
service to Employer
any person engaged in

the business of
exclusively supplying
goods and/or services
that are not liable to tax
any person receving

servies for personal use,
other than for use in the
course or furtherance of
his business.
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8. POWER TO GRANT EMEXMPTION FROM TAX [SECTION 10]
This section defines EXEMPTION from DUTY => Duty foregone by Central or a
State Government in Public Interest
Sec. 10(1)
GENERAL EXEMPTION
Section 10(2)
AD-HOC EXEMPTION
Coverage of Goods
or Service
Circumstances
leading to issuance
of exemption
Mode of Granting
Exemption
Any goods or Service
Any Goods or Service
Public Interest
Public Interest
+ Circumstances of Exceptional
Nature
Special Order
[Such orders are called Exemption
Order]
Date from which

Exemption will come
into force
Sec. 10(4) Exemption becomes

effective from date of its
issuance, unless otherwise
provided.
Notification in Official Gazette

[Such notifications are called
Exemption Notification]
No specific legal provision

Current Position in Indirect Taxes
Assessee makes a request for
consideration of his case for ad-hoc
exemption
Government consider the request
and finds it a fit case issues Ad-Hoc
exemption:
Subsequent clarification in Exemption Notification / Order [Section 5(3)]

Clarification as to SCOPE or APPLICABILITY may be done by INSERTION of an
EXPLANATION
Such clarification if inserted within 1 year, it shall have RETROSPECTIVE EFFECTB (as
it shall be deemed to be part of the original notification/order from the very beginning]
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9. REMISSION OF TAX ON SUPPLIES [SECTION 11]
This section deals with Remission* of tax on supplies found deficient in quantity due
to natural causes**. Rules shall be made having regard to the nature of supply and fix
the limit or limits of percentage beyond which no remission shall be allowed.
*Remission means waiver or cancellation of Duty legally payable.
[Authors Note: Current Excise Laws allows Remission of Duty on Goods lost or Destroyed by
Natural Causes or by Unavoidable accidents. Model GST Law speaks only about Natural Causes. So
Unavoidable Accidents might be covered by rules made in this regard]
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TIME & VALUE OF SUPPLY

This chapter deals with Time of Supply of Goods, Services and Value of Taxable
Supply along with Changes in Rate of Tax in respect of supply of Services. Provisions
relating to time and value of supply are contained in Section 12 to 14.
10. TIME OF SUPPLY OF GOODS [SECTION 12]
The provisions are broadly similar to present laws. The liability to pay CGST/SGCT
on the goods shall arise AT THE TIME OF SUPPLY.
Types of
Supply
Normal Supply
Continuous
Supply
Reverse
Charge
Time cannot
be determined
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NORMAL SUPPLY OF GOODS
The time of supply shall be EARLIEST of the following dates:
Date on
which Goods
are removed
Date on
which
Invoice is
Issued
Date on
which
Payments is
Received.
Date on which the

Recepient shows
the Receipt of
Goods in his
Books of Account.
CONTINUOUS SUPPLY OF GOODS [SECTION 12(3)]
Section 2(30) continuous supply of goods means a supply of goods which is

provided, or agreed to be provided, continuously or on recurrent basis, under a
contract, whether or not by means of a wire, cable, pipeline or other conduit, and for
which the supplier invoices the recipient on a regular or periodic basis.
In case of Continuous supply of goods where successive statements of accounts or

successive payments are involved; the time of supply shall be;
o the date of expiry of the period to which such successive statements of
accounts; or
o successive payments relate.
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GOODS ON REVERSE CHA RGE BASIS [SECTION 12(5)]
Time of Supply on Reverse Charge Basis will be EARLIEST of the following:
Date of
Receipt of
Goods
Date of
which the
payment is
made
Date of
Receipt of
Invoice
Date on
debit in the
Books of
Accounts
TIME OF SUPPLY CANNOT BE DETERMINED [SEC TION 12(7)]
Where it is NOT POSSIBLE to determine the time of supply of goods, in that case
the time of supply shall be:
in case where a periodical return has to be filed, be the date on which such
return is to be filed, or
in any other case, be the date on which the CGST/SGST is paid.
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11. TIME OF SUPPLY OF SERVICES [SECTION 13]
The provisions are broadly similar to present laws. The liability to pay CGST/SGCT on
Services shall be determined AT THE TIME OF SUPPLY.
Types of
Supply
Normal Supply
Continuous
Supply
Reverse
Charge
Time cannot
be determined
NORMAL SUPPLY OF SERVICES
The time of supply of Services shall be EARLIEST of the following dates:
Earliest of the following
Date of Issue of Invoice
Invoice Issued in
Prescribed Time
Invoice not issued

within Prescribed Time
Date of Receipt of
Payments
Date of Completion of
Service
In Other Case
Date of Receipt of
Payments
Date of booking in
Recipents Books.
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CONTINUOUS SUPPLY OF GOODS [SECTION 13(3)]
Section 2(31) continuous supply of services means a supply of services which is

provided, or agreed to be provided, continuously or on recurrent basis, under a
contract, for a period exceeding three months with periodic payment obligations and
includes supply of such service as the Central or a State Government may, whether
or not subject to any condition, by notification, specify.
Earliest of the Following
In case of Continuous supply of services the time of supply shall be
Whether any invoice is raised

or not
Due Date of Payment
Asertainable from Contract
Due Date of Payment is not

Ascertainable from Contract
Date on which Payment is

liable to be made
each such time when the
supplier of service receives
the payment.
Whether any payment has

been received or not
issues an invoice
In Other Case
Where payment is linked to

completion of an event
the time of completion of

that event.
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SUPPLY OF SERVICES ON REVERSE CHARGE B ASIS [SECTION 1 3(5)]
Time of Supply of Services on Reverse Charge Basis will be EARLIEST of the

following:
Date of
Receipt of
Services
Date on
which the
payment is
made
Date of
Receipt of
Invoice
Date on
debit in the
Books of
Accounts
TIME OF SUPPLY CANNOT BE DETERMINED [SEC TION 13(7)]
Where it is NOT POSSIBLE to determine the time of supply of services, in that case
the time of supply shall be:
in case where a periodical return has to be filed, be the date on which such
return is to be filed, or
in any other case, be the date on which the CGST/SGST is paid.
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12. CHANGE IN RATE OF TAX IN RESPECT OF SUPPLY OF SERVICES [SECTION 14]
The provisions are broadly similar to present Rules 5 and 7 of Point of Taxation
Rules2011.
IF TAXABLE SERVICES HAS BEEN PROVIDED BEFORE THE CHANGE IN EFFEC TIVE RATE OF TAX
Time of Issue
of Invoice
After
Time of
Receipt of
Payments
After
Before
After
After
Before
Point of Taxation / Applicable Rates
Earlier of:
Date of Payment; or
Date of issuing of Invoice
Date of Payment
IF TAXABLE SERVICES HAS BEEN PROVIDED AFTER THE CHANGE IN EFFECT IVE RATE OF TAX
Time of Issue
of Invoice
Before
Time of
Receipt of
Payments
Before
After
Before
Before
After
Point of Taxation / Applicable Rates
Earlier of:
Date of Payment; or
Date of Payment
*****END of PART-1*****
DISCLAIMER: This document is for information only. All care has been taken for
laws but in case something has been missed request our readers to update us.
This should not be taken as any advice from our concern. We shall not be liable
for any loss if occurred for laws stated in this document.
Thanks & Regards
Team GSTpanacea.com
7503031378
info@gstpanancea.com
20 | P a g e

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Model GST Laws Law & Practice

GSTpanacea.com Consultancy Pvt. Ltd.

GST Law & Practice (Part-1) Compiled by www.GSTpanacea.com

MODEL LAW GST LAW & PRACTICE (PART-1)

GST Panels & their Reports ............................................................................................................................. 3

Model GST Law ............................................................................................................................................... 4

Classes of Officers [Section-4] ........................................................................................................................ 6

Composition Levy [Section 8] ......................................................................................................................... 8

Taxable Person [Section 9] ............................................................................................................................. 9

Power to Grant EMEXMPTION from Tax [Section 10] .................................................................................. 12

Remission of Tax on Supplies [Section 11] ................................................................................................... 13

Time of Supply of Goods [Section 12] ..................................................................................................... 14

Time of Supply of Services [Section 13] ................................................................................................... 17

Change in Rate of Tax in Respect of Supply of Services [Section 14] ...................................................... 20

Value of Taxable Supply [Section 15] ...................................................................................................... 21

To get daily updates please send your details on 7503031378

GST Law & Practice (Part-1) Compiled by www.GSTpanacea.com

GST LAW & PRACTICE

implementing the nationwide Goods and Services Tax (GST) recommended by

To get daily updates please send your details on 7503031378

GST Law & Practice (Part-1) Compiled by www.GSTpanacea.com

Then, Finance Minister P. Chidambram, made announcement for introduction of GST

EMPOWERED COMMITTEE OF STATE FINANCE MIN ISTERS

Task of designing GST was given to empowered committee of State Finance

2. GST PANELS & THEIR REPORTS

Further in February2013 3 GST panels were constituted which are as follows:

To get daily updates please send your details on 7503031378

GST Law & Practice (Part-1) Compiled by www.GSTpanacea.com

GOODS AND SERVICES TAX ACT, 2016

GOODS & SERVICE TAX ACT2016

Brief of this proposed legislation is as follows:

To get daily updates please send your details on 7503031378

GST Law & Practice (Part-1) Compiled by www.GSTpanacea.com

This has 4 Schedules which are:

I Matters to be treated as supply without consideration.

It also have 1 Rules which is GST Valuation (Determination of the Value of

This act contains 11 chapters & 33 Section.

To get daily updates please send your details on 7503031378

GST Law & Practice (Part-1) Compiled by www.GSTpanacea.com

Under States GST

(a) Principal Chief Commissioners of CGST or

This list is indicative and there may be more officers as required.

Subject to such conditions and limitations as may be imposed, an officer may

To get daily updates please send your details on 7503031378

GST Law & Practice (Part-1) Compiled by www.GSTpanacea.com

POWERS OF FIRST APPELLATE AUTHORITY

Notwithstanding anything contained in this section, a First Appellate Authority shall

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GST Law & Practice (Part-1) Compiled by www.GSTpanacea.com

LEVY OF, AND EXEMPTION FROM TAXES

5. LEVY AND COLLECTION OF CENTRAL/STATE GOODS AND SERVICES TAX [SECTION 7]

6. COMPOSITION LEVY [SE CTION 8]

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GST Law & Practice (Part-1) Compiled by www.GSTpanacea.com

7. TAXABLE PERSON [SECT ION 9]

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GST Law & Practice (Part-1) Compiled by www.GSTpanacea.com

Limits for Taxability is as follows:

All over India (Except North East including Sikkim)

North East Including Sikkim

Note: Agriculturist shall not be considered as a taxable person.

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GST Law & Practice (Part-1) Compiled by www.GSTpanacea.com

Can Central Government or State Government or Local Authority be