KGMA

GST – Practice Pointer Issues

including implications under
Companies Act and Income Tax Act
By:
CA Kamal Garg
Basic Compliance Structure
 Chapters = 21

CGST Sections = 174

Schedules = 3

SGST States Specific

UTGST Sections = 26
GST Law Five Acts
Chapters = 9
IGST
Sections = 25

Sections = 14
Compensation
GST
Schedule = 1
 Regular
GST Registration
Composition
Regular

Levy and Collection Composition

Reverse Charge
IGST
Inter State
Tax CGST
Intra State
SGST

Taxability Supply
Time of Supply

Regular Place of Supply

Returns
Composition
 sale,
transfer,
made or agreed to be
barter, made for a
exchange, consideration by a
person in the course
licence, or furtherance of
rental, business

Supply lease,
disposal
import of services for a consideration whether or not
in the course or furtherance of business;
activities specified in Schedule I, made or agreed to be
made without a consideration;
activities to be treated as supply of goods or supply
of services as referred to in Schedule II
Schedule III – negative list
 export of goods or services
Zero Rated Supply or both
[Section 16 of
IGST Act] supply of goods or services
or both to SEZ

which attracts nil rate of tax

Exempt Supply which may be wholly

[Section 2(47) of exempt from tax
CGST Act]
includes non-taxable
supply
Value of Supply
 Price actually paid (or payable) for the supply of 
goods/services between un-related parties (i.e., 
price is the sole consideration);
(+) Any taxes, duties, cess, fees and charges levied 
under any act, except GST;
(+) Any amount that the supplier is liable to pay
which has been incurred by the recipient and is not 
included in the price;
(+) All incidental expenses in relation to supply such 
as packing, commission etc.;
(+) Subsidies linked to supply, except Government 
subsidies;
(+) Interest/ late fee/ penalty for delayed payment of 
consideration
 Available OMV
Consideration is Not

Example: Where a new TV is supplied for Rs.

Wholly in Money
Cases where

20,000 along with the exchange of anValue old TV

andOMV
if the price of
Notthe new TV without
Available/ exchange
equivalent to
is Rs. 24,000 theDeterminable thatofofthe
open market value likenew
kind
and quantity
TV is Rs. 24,000
Above Cost or Residual
Methods
fail Methods
 Exception: If the recipient of goods or services (or
Available OMV
both) is eligible for full input tax credit, the value
declared in the invoice shall be deemed to be the
open market value of goods or service.Monetary value
Related Person Under GST
Value of Supply of Goods

of partial
or Services Between

Example: let’s sayNot Available

that TATA Steel supplies goods
consideration
but is the OMV of the goods)
worth Rs. 1,50,000 (which will be added to
determinable
to TATA Motors for Rs. 1,00,000; and TATA monetary
Motors
OMV
claims the full amount of GST chargedconsideration
in the invoice
which is Rs. 18,000 (@18% of Rs. 1,00,000) as input
Not value will hold true for
tax credit, then this invoice Value
Determinable
valuation purpose. Eventually, when equivalent
TATA Motors to
that of like kind
sell their products to their end consumers they will
only get input credit of what was paidand quantity
earlier as tax
Above
i.e. Rs. 18,000 (andMethods
not the tax that should
Cost or have been
Residual
paid if the goods werefail
sold at OMV). Methods
 Example: The principal Mr. X, supplies
OMV
groundnuts to his agent Mr. Y. Mr. Y,
supplies groundnuts of like kind and
Valuation of Supply – Principal to

qualityOrin subsequent supplies at a price

of
90%Rs. 5,000
priceper quintal on supply
the day
of of
Agent and Vice Versa

of the charged for the

supply.
goodsAnother independent
of like kind supplier
and quality by the Mr.
Z, recipient
is supplying groundnuts
to his customer of like
not being a kind
and quality to Mr. person
related Y at the price of Rs.
4,550 per quintal.
The value of the supply made by Mr. X,
shall therefore be Rs. 4,550 per quintal
(theAbove
open market value Cost or Residual or
of groundnuts)
Methods
where hefail
exercises the optionMethodsthe value
shall be 90% of Rs. 5,000 i.e. is Rs. 4,500
per quintal.
 Example:  PQR Limited is manufacturing
office chairs and the cost of manufacturing is
Rs. 4,000 per chair. Similar chair the cost of
in open
where the
market is valued at Rs. 4,500. production or
value ofchairs
These a are supplied tomanufacturing
a furniture
Under GST – Cost Method
Valuation of Supply Rule

supply of
showroom
goods or
at the rate Rs. 3,000 and balance
inservices
non-monetary consideration. Now since
the open market
the value or cost
value is available, Rs. of
4,500
or both is acquisition of
will not
be considered for valuation
shall be of supply.
110% of such goods
However
determin-in case if Open Market Value is not
available,
able by the value of supply as per cost
method
any of thewill be followed which says it has
or cost of to
be 110% of the cost of manufacturing
preceding i.e.ofRs.
provision
4,000 (x) 110% = Rs. 4,400.
rules such services
Thus GST will be charged on Rs. 4,400 in this
case.
Valuation of Supply Rule Under GST –
where the
value of
supply of the same shall be
Residual Method

goods or determined
services or using reasonable
both cannot means
be consistent  with
determined GST Law
under the
cost method
 Contractual
agreement with the
A practising
recipient CA/
of supply to
Valuation of Supply Rule Under GST

act on their behalf

CS/ CWA
No title to the goods
In Case of Pure Agent

incorporating a
or services (or both)
procured/limited
private provided
Pure Agent on behalf
company on
not use the goods or
behalf of his
services client
so procured
for his own interest
is an example of a
receives
pure only
agent. the
actual amount
incurred [no mark up
allowed]
 payment actually made to a
third party, on behalf of and
under authorisation the
recipient
Valuation of Supply Rule Under

recipient of the supply is the

GST In Case of Pure Agent

Expenditure only user of the services

or costs procured by the pure agent
incurred by from the third party

Conditions
the supplier
recipient liable to make
as a pure payment to the third party
agent shall be
excluded from recipient knows that services
the value of are provided by third party
supply
Payment separately indicated
in the invoice issued by the
agent
Place of Supply of Goods
 Place of supply of goods under GST defines

whether the transaction will be counted as

intra-state or inter-state

accordingly levy of SGST, CGST & IGST

will be determined

Movement No Goods Imports

of goods movement supplied on &
of goods a vessel/ exports
conveyance
 Place of Supply of Goods – other than imports/ exports
Section 10(1)(c)
Section 10(1)(a) Section 10(1)(b) Section 10(1)(d) Section 10(1)(e)
Supply does not
Supply involves Goods supplied involves Goods are Goods supplied
movement of on direction of movement of assembled or on board a
Goods the third person installed at site conveyance
goods

Location of Principal
goods at the Place of
Location of Location at
time at Business of
goods at the Place of which such
which the third
time of installation goods are
movement person (i.e.,
delivery to or assembly taken on
terminates address in
the recipient board
for delivery Registration
to recipient Certificate)

18
• Example 1- Intra-state sales
• Mr. Raj of Mumbai, Maharashtra sells 10 TV sets
to Mr. Vijay of Nagpur, Maharashtra
• The  place  of  supply  is  Nagpur  in  Maharashtra. 
Since  it  is  the  same  state  CGST  &  SGST  will  be 
charged.
• Example 2-Inter-State sales
• Mr. Raj of Mumbai, Maharashtra sells 30 TV sets
to Mr. Vinod of Bangalore, Karnataka
• The  place  of  supply  is  Bangalore  in  Karnataka. 
Since it is a different state IGST will be charged.
• Example 3- Deliver to a 3rd party as per instructions
• Anand in Lucknow (UP) buys goods from Mr. Raj in Mumbai
(Maharashtra). The buyer requests the seller to send the goods
to Nagpur (Maharashtra)
• In  this  case,  it  will  be  assumed  that  the  buyer  in  Lucknow  has 
received the goods & IGST will be charged.
• Place of supply: Lucknow (UP)
• GST: IGST
• Example 4- Receiver takes the goods ex-factory
• Mr. Raj of Mumbai, Maharashtra gets an order of 100 TV sets
from Sales Heaven Ltd. of Chennai, Tamil Nadu. Sales Heaven
mentions that it will arrange its own transportation and take TV
sets from Mr. Raj ex-factory
• Place of supply: Chennai
• GST: IGST
• Example 5 – E-commerce sale
• Mr. Raj of Mumbai, Maharashtra orders a mobile
from Amazon to be delivered to his mother in
Lucknow (UP) as a gift. M/s ABC (online seller
registered in Gujarat) processes the order and
sends the mobile accordingly and Mr. Raj is billed
by Amazon.  
• Similar to example 3, it will be assumed that the buyer 
in  Lucknow  has  received  the  goods  &  IGST  will  be 
charged.
• Place of supply: Mumbai, Maharashtra
• GST: IGST
• Example 6- No movement of goods
• Sales Heaven Ltd. (Chennai) opens a new
showroom in Bangalore. It purchases a building for
showroom from ABC Realtors (Bangalore) along
with pre-installed workstations
• Place of supply: Bangalore
• GST: CGST& SGST
• There is no movement of goods (work stations), so the 
place of supply will be the location of such goods at the 
time of delivery (handing over) to the receiver.
• Note: There is no GST on purchase of building or part 
thereof. RENT of commercial space attracts GST
• Example 7- Installing goods
• Strong Iron & Steel Ltd. (Jharkhand) asks M/s SAAS
Constructions (West Bengal) to build a blast furnace in
their Jharkhand steel plant
• Place of supply: Jharkhand
• GST: CGST & SGST
• Although  M/s  SAAS  is  in  West  Bengal,  the goods  (blast 
furnace) is being installed at site in Jharkhand which will be 
the place of supply.
• Note: M/s  SAAS  will  have  to  be  registered  in  Jharkhand  to 
take  up  this  contract.  They  can  opt  to  register  as  a  casual 
taxable  person  which  will  be  valid  for  90  days  (extendable 
by 90 days more, on basis of a reasonable cause).
• Example 8- Plane
• Mr. Ajay is travelling from Mumbai to Delhi by air.
He purchases coffee and snacks while on the
plane. The airlines is registered in both Mumbai
and Delhi.
• Place of supply: Mumbai
• GST: CGST& SGST
• The  food  items  were  loaded  into  the  plane  at 
Mumbai. So, place of supply becomes Mumbai.
• Example 9- Plane- Business travel
• Mr. Ajay is travelling from Mumbai to Chennai by
air on behalf of his company Ram Gopal and
Sons (registered in Bangalore). In the plane he
purchases lunch. The airlines is registered in
Mumbai & Chennai.
• Place of supply: Mumbai
• GST: CGST & SGST
• The  food  items  were  loaded  into  the  plane  at 
Mumbai.  So,  place  of  supply  becomes  Mumbai.  It 
does not matter where the buyer is registered.
• Example 10- Train
• Mr. Vinod is travelling to Mumbai via train. The
train starts at Delhi and stops at certain stations
before Mumbai. Vinod boards the train at
Vadodara (Gujarat) and promptly purchases
lunch on board. The lunch had been boarded in
Delhi.
• Place of supply: Delhi
• GST: CGST & SGST
• The food items were loaded into the train at Delhi. 
So, place of supply becomes Delhi.
 Place of Supply of Goods –
goods imported into/ exported from India
• Export of goods:  Means  taking  goods  out  of  India  to  a  place 
outside India;
• Import of goods:  Means  bringing  goods  into  India  from  a  place 
outside India
Section Situation Place of supply
11(a) Goods imported into India Location of importer
11(b) Goods exported from India Location outside India

Note: Section 5 provides that IGST shall be levied on goods

imported into India as per Section 3 of Customs Tariff Act
§ Point of taxation - When duties of customs are levied on the
said goods
§ Value - As determined as per Customs Act
29
• Example 1- Import
• Ms. Malini imports school bags from China for
her shop (registered in Mumbai)
• Place of supply: Mumbai
• GST: IGST
• Example 2- Export
• Ms. Anita (Kolkata) exports Indian perfumes to
UK
• Place of supply: Kolkata
• GST: Exempted
Place of Supply of Services – Sec 12 of IGST
(where supplier and recipient are in India)
 Location of
Section 12(2)(a)):
recipient
Registered
recipient

For Supply of any Location of

other Service, recipient if
Place of supply is: address in
Section supplier’s
(General Rule)
12(2)(b): records
Unregistered
recipient Location of
supplier if
address not
available
 Services directly in relation to:
a) Immovable property – grant-
of-rights, construction, use, Place of supply - Section
accommodation, marriage, 12(3):
letting out, architects, Location of property/ boat/
surveyors, etc. vessel
b) Boat, Vessel – lodging, club, If property is outside India
etc. – Location of Recipient
c) Ancillary services to the
above
Supply of:

a) Restaurant and catering

b) Personal grooming Place of supply - Section
c) Fitness 12(4):
d) Beauty treatment Location of ‘actual’
performance
e) Health service including
cosmetic and plastic surgery
 Sec 12(5): Sec 12(7): Supply of:
Supply of Sec 12(6): Supply of a) Organising cultural,
Services of Services for arts, sports,
Training and admission to: educational, scientific,
Performance a)Cultural and artistic entertainment,
Appraisal b) Sporting conference, fair
exhibition or similar
c)Scientific and events
Registered educational b) Services ancillary to
recipient: above
d)Entertainment
Location of event Registered
recipient e) Amusement Park recipient:
Location of
Unregistered f)Services ancillary to recipient
recipient: above
Unregistered
Place of recipient:
‘actual’ Venue of event
performance Venue of
event/ park Event outside
India:
Location of
recipient
 Registered Recipient: Location of
Sec 12(8): Recipient
Transportation of
goods, including by Unregistered Recipient: Location
mail or courier where goods handed over for
transportation

Registered Recipient: Place of

Sec 12(9): Passenger Registered Recipient
Supply
Transportation
of Unregistered Recipient: Place
Service (Return
services where passenger embarks on the
journey treated as
of: conveyance for a continuous
separate journey)
journey

Sec 12 (10): Services on

First scheduled point of departure
board conveyance like
of that conveyance for that
vessel, aircraft, train,
journey
motor vehicle
 • In (a)
cases not ofcovered,
Services fixed address of recipient on records
telecommunication
shall be the place of line,
supply;Location where line / device is
Supply of telecommunication services
including data transfer, broadcasting,

leased circuits, internet

• Where no address of the recipient
leased circuit, cable or
installed available in records,
location of the supplier shall be the place of supply
dish antenna
(b) Post-paid mobile Location of billing address of the
DTH, cable etc.

connection for recipient on record

telecommunication and
internet services*
Through internet: Location of
recipient on record
(c) Pre-paid mobile Through selling agents:
connection for Location of selling agent on
telecommunication and record of supplier
internet services* Though others: Location where
pre-payment received /
vouchers sold
 Supply of:

Sec 12(14)
Sec 12(12) Banking Sec 12(13) Advertisement
and Other Financial Insurance Services Services to
Services including
Government, etc.
Stock Broking

Registered
recipient: Location
Location of recipient of recipient Place is State of
in suppliers records dissemination in
Unregistered
proportion
(If not available, recipient: Location
location of supplier) of recipient in
supplier’s records
Place of Supply of Services – Sec 13 of IGST
(where supplier or recipient is outside India
Services when Service by Banking
goods Services way of services to
required to be supplied admission to account Transportation
made directly in / organising holders, of goods (other
physically relation to an event, etc. intermediary than by way of
available by immovable and ancillary services, mail / courier)
recipient or property services hiring of
requiring means of
physical transport
presence of (other than
receiver / aircraft and
person acting vessels) upto
on his behalf 1 month

Location of
Location such Place
where immovable where the Location Destination
services property event is of of the
actually (or where it actually supplier goods
performed is intended held
to be
located)
 circumstances
CG has power
Service Online

services/
to notify
Passenger information
provided on
transportation and Residuary
board a
service database
conveyance
access or
retrieval
services
Location
of the
Place where First recipient;
passenger scheduled If not Place of
embarks on point of available effective
the departure of Location in the use and
conveyance that of ordinary enjoyment
for a conveyance recipient course of of a service
continuous for that business,
journey journey location
of
supplier
 Basic Examples
Example 1- Registered Person
Mr. Ajay (Karnataka) provides consultancy services to M/s Sumati
Technologies Ltd. (registered in Maharashtra).
Place of supply: Maharashtra (location of registered person)
GST: IGST
Example 2 – Unregistered Person
Mr. Ajay (Karnataka) provides consultancy services to Mr. Vijay
(unregistered but address on record shows Tamil Nadu).
Place of supply: Tamil Nadu (address of unregistered person is
available)
GST: IGST
Example 3 -Unregistered Person & address is not available
Mr. Ajay (Karnataka) provides consultancy services to Mr. Anand
(unregistered and address is not available).
Place of supply: Karnataka (unregistered person)
GST: CGST + SGST
• Example 1- Goods transportation intra-state
• XYZ, a goods transportation company based in
Karnataka, is hired by Akash Electronics
registered in Karnataka to transport 50 tv sets.
• Supply of service: Transporting goods
• Place of supply: Karnataka (the location of registered 
person)
• GST: CGST+ SGST (intra-state)
• Example 2- Goods transportation inter-state
• XYZ, a goods transportation company based in
Karnataka, is hired by Vinay Garments
(registered in Maharashtra) to transport 200 saris
from Bangalore to Mumbai.
• Supply of service: Transporting goods
• Place  of  supply:  Maharashtra  (the  location  of 
registered person)
• GST: IGST (inter-state)
• Example 3- Goods transportation by unregistered
person
• Mr. Sharma (in Bangalore) is transferring his car
by rail freight to Mumbai. He puts up the car in
Bangalore station.
• Supply of service: Transporting goods
• Place of supply: Karnataka (Location at which such 
goods are handed over for their transportation)
• GST: CGST+SGST (Indian railways have a pan-India 
presence and are registered in all states)
• Example 4-Registered person
• Akash Electronics, registered in Bangalore,
purchased corporate flight tickets from
Bangalore to Delhi from Happy Air Travels Ltd.’s
Delhi branch
• Supply of service: Transporting passengers
• Place  of  supply:  Karnataka  (location  of  registered 
person)
• GST:  IGST  since  this  branch  of  Happy  Travels  is 
registered in Delhi (most airlines are registered in all 
states).
• Example 5-Unregistered person
• Ms. Anita books a 2-way air journey from Bangalore to Kolkata.
She leaves Bangalore on 1st Aug and lands in Kolkata the
same day. She leaves Kolkata on 7th Aug and comes back to
Bangalore the same day. She booked the return journey tickets
in Bangalore at the same time.
Flight Ticket issued by Place of supply GST
From Bangalore Bangalore Bangalore CGST+SGST
to Kolkata branch of airlines Since she is (Karnataka)
unregistered, the
location where
she embarks the
journey becomes
place of supply
From Kolkata to Bangalore Kolkata IGST
Bangalore branch of airlines
• Example 6 - Vimana Air (registered in West Bengal)
has a flight from Guwahati (Assam) to Chennai
stopping at Kolkata & Bangalore. Ms. Anita boards
the flight at Kolkata (destination Bangalore). Air
crew is present on board serving food to
passengers and taking care of their safety.
• Supply  of  service:  Serving  food  passengers  &  safety 
measures
• Place of supply: Guwahati (Assam) (Location of the first 
point of departure of that plane)
• GST: IGST since this branch of Vimana Air is registered 
in  West  Bengal  (most  airlines  are  registered  in  all 
states).
• Example 7- Restaurant
• Raj Hotels in Mumbai, Maharashtra, provides
catering services to Polaris Ltd. (registered in
Gujarat) for their annual sales event in Mumbai.
• Supply of service: Catering
• Place of supply: Maharashtra
• GST: CGST + SGST
• Example 8- Personal Grooming
• Ajay, a chartered accountant (Karnataka) has
been advised to take an ayurvedic treatment at
Om Ayurvedic Centre in Kerala.
• Supply of service: Health by Ayurvedic Centre
• Place of supply: Kerala
• GST: CGST + SGST
• Example 9 – Training
• Kyathi Industries Ltd (Gujarat) hires First Source
Consultancy (Mumbai) to impart soft-skills
training to its employees. The training will be
conducted in Mumbai.
• Supply of service: Training
• Place  of  supply:  Gujarat  (since  the  recipient  is  a 
registered person, location of recipient is the place 
of supply)
• GST: IGST (inter-state as supplier is in Maharashtra 
& recipient is in Gujarat)
• Example 10- Training unregistered person
• Ms. Anita (unregistered person based in
Bangalore) signs up with Gavin Consultancy
(Mumbai) for a training on public speaking. She
attends the training in Mumbai.
• Supply of service: Training
• Place of supply: Maharashtra (since the recipient is 
unregistered  person,  location  where  services  are 
provided is the place of supply)
• GST: CGST + SGST
• Example 11- Admission to amusement parks
• A person in Karnataka buys admission tickets
for Nicco Park (amusement park) in Kolkata,
West Bengal from the Nicco Park organizers.
• Supply of service: Admission
• Place of supply: West Bengal (Location of the park)
• GST: CGST+SGST
• Example 12- Events managed for registered
persons
• Yardy Event Managers (Mumbai) is hired by
Akash Electronics (Gujarat) to organize their
annual sales event in Mumbai.
• Supply of service: Event management
• Place  of  supply:  Gujarat  (since  the  recipient  is  a 
registered person, location of recipient is the place 
of supply)
• GST: IGST
• Example 13- Events managed for unregistered
persons
• Yardy Event Managers (Mumbai) is hired by Ms.
Malini (based in Bangalore) to manage her
sister’s wedding (held in Mumbai).
• Supply of service: Event management
• Place  of  supply:  Mumbai  (since  the  recipient  is 
unregistered person, location of event is the place of 
supply)
• GST: CGST+SGST
• Example 14- Events managed outside India for
registered persons
• Yardy Event Managers (Mumbai) is hired by
Akash Electronics (Gujarat) to organize their
annual business collaboration event in
Singapore.
• Supply of service: Event management
• Place  of  supply:  Gujarat  (since  the  recipient  is  a 
registered person, location of recipient is the place 
of supply). Location of event is immaterial.
• GST: IGST
• Example 15- Events managed outside India for
unregistered persons
• Jack and Jones Event Managers (Mumbai) is
hired by Ms. Malini (based in Bangalore) to
manage her sister’s wedding (held in Dubai).
• Supply of service: Event management
• Place  of  supply:  Bangalore  (since  the  location  of 
event is outside India, the location of recipient is the 
place of supply)
• GST: IGST
Input Tax Credit
 Conditions for Availment of ITC

Basis - tax Tax actually paid

invoice/ debit by the supplier to
He has furnished
note issued by a the credit of the
Goods and/or the monthly
registered appropriate
services have return in Form
supplier, or other Government,
been received* GSTR-3 under
prescribed either in cash or
Section 39
taxpaying by utilization of
document ITC

*Note:
Ø Credit only upon receipt of the last lot/ instalment in case of goods received in
lots/ instalments.
Ø Goods deemed to be received by a taxable person when the supplier delivers the
goods to the recipient/ any other person, on the direction provided by the taxable
person to the supplier.
Ø If the recipient of services fails to pay (value + tax) within 180 days from date of
invoice, (ITC availed + interest) shall be added to his output tax liability. ITC
available when amount discharged later 59
 Restrictions on ITC – Sec 17(5)
Blocked credits
a) Motor Vehicles
§ Transportation of goods , or
§ Making the following taxable
ITC for Except services:
Motor when i. Further supply of such
Vehicles they vehicles / conveyances, or
will NOT be are ii. Transportation of
used passengers, or
available for iii. Training for driving / flying /
navigating such vehicles /
conveyances

Note: Where any amount has been paid on goods and / or services,
in lieu of tax, under composition scheme, no credit on such amount
would be allowed.
60
 Restrictions on ITC – Sec 17(5)
Blocked credits
b) Supply of goods and services being:
Allowed ONLY if goods /
Cosmetic services of a particular
Food and Outdoor Beauty Health and
category are used towards
Beverages Catering Treatment Services Plastic
Surgery making taxable outward
supplies of the same
category
Life /
Rent-a-
health
cab
Insurance

Health and Travel

Membership
Allowed ONLY if where the services are Fitness Benefits to
of club
notified as obligatory for an employer to Centre employees
provide to an employee or services of a
particular category are used towards making
taxable outward supplies of the same
category NEVER allowed 61
 Restrictions on ITC – Sec 17(5)
Blocked credits
c)  Construction  of  Immovable  Property  (other  t
machinery)

Works contract services,  Goods or services received by a 
taxable person for construction of an
except where it is an input  immovable property on his own 
service for further supply  account even when used in course
of works contract service or furtherance of business

Construction includes
re-construction,
renovation, additions
ITC not Available or alterations or
repairs to the extent of
capitalisation 62
 Restrictions on ITC : Sec 17(5)
Blocked credits
§ Taxes on supply of goods or services paid u/s 10

§ Goods or services or both received by a non-resident taxable person

except on goods imported by him, shall not be allowed

§ Goods or services or both used for personal consumption

§ Goods lost, stolen, destroyed, written off or disposed of by way of gift
or free supplies and

§ Any tax paid in accordance with the provisions of sections 74, 129 and
130.

Plant and machinery means means apparatus, equipment, and machinery

fixed to earth by foundation or structural support that are used for making
outward supply of goods or services or both and includes such foundation
and structural supports but excludes — (i) land, building or any other civil
structures; (ii) telecommunication towers; and (iii) pipelines laid outside the
factory premises. 63
Companies Act and Income Tax
Act
• Section 12(3)(c) of the Companies   Act: Corporate 
Identity  Number  [CIN]  printed  in  all  its  business  letters, 
billheads,  letter  papers  and  in  all  its  notices and  other 
official publications;
• AS 3: Impact of GST Paid under RCM;
• AS 4:  Effect  of transition  whether  to be accounted as on 
31st March, 2017;
• AS 2 and AS 10: respectively for Inventory and PPE;
• CARO, 2016:  Fixed Assets and Inventories – Clause 3(i) 
and 3(ii) respectively;
• AS 29:  Provisions  and  Contingent  Liabilities  –  RCM  on 
amounts  payable  at  year  end  like  accounting  charges, 
legal and professional charges, etc.
• PAN:  Sale  or  purchase,  by  any  person,  of  goods  or  services for  an 
amount  exceeding  Rs.  2,00,000  per  transaction  –  Rule  114B  of 
Income Tax Rules, 1962;
• Cost of Fixed Assets and Inventories:   If  ITC  availed  then 
depreciation/ impairment cannot be claimed on such component;
• Section 43B [Income Tax] vs. 2 nd Proviso of Section 16(2) [GST]: 
any sum payable by the assessee by way of tax, duty, cess or fee, by 
whatever name called, under any law for the time being in force;
• Form 3CD:
1) Clause 4: IDT Registration;
2) Clause 11(c):  List  of  books  of  account  and  nature  of  relevant 
documents examined;
3) Clause 18(d)(i): CENVAT on Fixed Assets;
4) Clause 21: Section 40A(3);
5) Clause 26: Section 43B
6) Clause 27(a): CENVAT availed and utilised during the year;
7) Clause 35: Details of Stock – Quantitative;
8) Clause 40: Accounting Ratios;
9) Clause 41: Details of demand raised or refund issued other than 
under DT Law
Technical and Practical Issues
 Notification 8/ 2017:
No reverse charge for goods and services of Rs. 5000
per day received from unregistered person
Any notification issued by the Central Government, on the
recommendations of the Council, under sub-section (1) of section
11 or order issued under sub-section (2) of the said section of the
Central Goods and Services Tax Act shall be deemed to be a
notification or, as the case may be, an order issued under this Act
– Section 11(4) of Delhi GST Act, 2017
• Mr. X  purchased following items from unregistered
dealer, all are dated 01.07.2017 as under:
1) 1st bill – From Ram: Stationery = 2000/-
2) 2nd bill – From Shyam: Lunch = 1000/-
3) 3rd bill – From Madhu : Books = 3000/-
• In this case, the bills of Mr. X will not get covered under this 
notification  as  aggregate  value  of  all  supplies  exceeds 
5000/- on a single date (01.07.2017)
• Mr. X  purchased following items from unregistered
dealer, all are dated 01.07.2017 as under:
1) 1st bill – From Ram: Lassi Glasses = 2000/-
2) 2nd bill – From Shyam: Salad Beetroot = 1000/-
3) 3rd bill – From Madhu : Apricots, cherries,
peaches = 3000/-
• In this case, RCM u/s 9(4) itself is not applicable
 Yes Allowed
Before or at Duly as
the time of recorded in deduction
Supply the invoice from the
No sale price

Not
allowed
as
Discount is established under T & C deduction
Discount of agreement entered into before or at from the
the time of supply sale price
Discount linked to
relevant invoices

After the
time of Recipient should have
Supply reversed attributable ITC
Under an agreement, A supplied toffees to B whereby a discount of
2% would be provided if B would make an off take of 2,000 toffees in
one month. The following details are available for July 2017:
Particulars Toffees Total Price GST Gross Total
[@ 10%]
Invoice 1 500 1,000 100 1,100
Invoice 2 1,000 2,000 200 2,200
Invoice 3 1,000 2,000 200 2,200
Gross Total 2,500 5,000 500 5,500
Now A would issue a credit note to B on all the invoices issued during the 
month  and  would  reverse  tax  levied  on  such  invoices  and  B  would 
reverse corresponding attributable ITC as well
Invoice 1 500 20 2 22
Invoice 2 1,000 40 4 44
Invoice 3 1,000 40 4 44
Gross Total 2,500 100 10 110
• Suppose a factory is located at a place in Gujarat. Said factory
receives an order from a customer having registered place of
business at Mumbai for supply of goods. However, as per terms
of order the sale shall be done on ex-factory basis, i.e., property
in goods will pass on to buyers at the factory gate in Gujarat and
a seller or a buyer at the request of the seller shall arrange for
transportation of goods to Mumbai. Thus, movement of goods is
contemplated under the contract and property in goods passes
on at the factory gate. In this case where will be the place of
supply - Factory gate in Gujarat or registered place of business
of buyer in Mumbai.
• in case of ex-factory sale where movement has been contemplated of 
goods  through  a  transporter  in  the  contract  whether  arranged  by 
buyer  or  seller,  place  of  supply  shall  be  the  place  of  business  of 
buyer.
• Company pays telephone bill on behalf of
employees. Whether company can avail ITC on
the same.
• if for personal use how it can avail? In any case if 
bill in name of employee there will be no GSTIN of 
company in invoice and ITC not applicable
• Whether GST has to be paid on employee
reimbursements or not (considering employee
has taken a supply from unregistered dealer).
• indeed it should apply - as really it is expenditure of 
company itself - only that the employee first paid on 
behalf of company
• Will there be any GST on reverse charge in case
of advance against imports.
• really no as in case of imports IGST is recovered by 
customs; departmental harassment is possible
• Goods returned to unregistered dealer, whether
liability of GST would be attracted? Note -
Liability of GST under reverse charge has been
discharged by the company at the time of
purchase from unregistered dealer.
• It  has  to  charge  GST  while  returning  goods  as  it 
must have taken ITC of those goods
• Its known that service of transportation of goods
by road provided by any person other than a
GTA/ Courier agent is exempt. My doubt is:
What will be the GST implication if a
manufacturer were to deliver goods by road to
the customers using his own vehicle and
charges freight in his bill.
• that freight will be part of value of goods and GST 
payable on total value at same rate as of goods
• GTA registered in Delhi and recipient registered
in Haryana; Recipient tax deposit: IGST or CGST
and SGST.
• really IGST is payable as in case of reverse charge 
as only liability of supplier is transferred to recipient
• What will be the GST provisions for a dealer
engaged in providing mobile recharge services.
Under service tax there was a notification no
25/2012 which specified taxability of mobile
recharge service only at the time of telecom
company providing service to the dealer.
Whether now it would be to be taxed at
transaction value. GST to be levied on each
recharge – like telecom co. to distributor ~
distributor to dealer ~ dealer to end customer.
• really distributor should invoice to dealer and charge 
GST and dealer should charge GST and take credit 
of GST charged by distributor
• A manufacturer (company) is located in Jharkhand. The
officials of the company travel to different states for
official work and stay in different hotels. Please clarify:
1) In hotel bill which would be in the name of the
company, what will be the place of supply
2) IGST would be charged or CGST + SGST
3) Whether the company can claim the credit of the
same.
§ it will be where hotel is situated and the hotel will charge 
local SGST and CGST
§ CGST and SGST of that State 
§ legally if you give your GSTIN you can take ITC for CGST 
for CGST; SGST of that State cannot be taken for SGST 
for your State but that can be used for IGST. However, as 
per departmental  view this is not allowed and hence the 
system will not allow. Hence you will have to contest 
• Whether the GST paid under RCM with respect to GTA
can be availed as ITC.
• yes
• If a dealer is engaged in selling of taxable as well as
non-taxable goods, can he opt for CMP scheme as
section states on of the condition that he is not
engaged in making any supply of goods which are not
leviable to tax under this Act. The word "any" is used
Further, if a dealer is engaged in selling of taxable
goods as well as services can he opt for CMP scheme.
• he can go for composition scheme but GST payable on non 
taxable  goods  also.  In  the  second  part  of  question  that 
option is not allowed even if wants only for goods portion - 
no such provision has been made.
• Law states that no registration is required if any person
is engaged exclusively in the business of supplying
goods or services or both that "are not liable to tax" or
wholly exempt from tax. When there is no liability to tax
then why registration is required by 100% EOU.
• supplies  of  EOU  are  liable  to  tax  and  even  exports  are 
liable to tax - they are zero rated - not exempt.
• Indian Company is having a parent company based out
of India. Foreign company got the order to supply the
material in the Indian Market. Further, Foreign co.
authorised the Indian company to do the installation
activities in India. Indian company will get the service
fee in the form of cost plus margin from the foreign
company. Consideration will be in the form of USD.
Please advise about place of supply & whether the
above service will fall under export of service and out
from GST purview.
• it  is  a  performance  based  service  and  hence  place  of 
supply is India. The Indian company is liable to pay GST; 
however, if Indian company is getting commission on sales, 
GST  is  payable  as  Indian  company  is  intermediary  and 
hence place of supply is India.
• If I charge freight on bill which is containing rates (%)
as 5/ 12/ 18/ 28 - GST, then it will be a composite supply
and freight will be charged at the rates of 5/ 12/ 18/ 28,
respectively. What if invoice of freight is sent later on
after delivery of goods; then what rate will be
chargeable on freight.
• even  then  same  GST  rate  as  factually  it  is  a  composite 
supply only.
• Employees of Party X, having corporate office in
Mumbai, travels to Rajasthan incurs hotel expenses
with applicable GST where it has also branch
registered at Rajasthan. What is the tax implication on
ITC.
• if he gives GSTIN number of Rajasthan and if hotel uploads 
that invoice ITC can be taken in Rajasthan.
• Whether GST will be paid on free samples & buy one
get one scheme; if yes, what is treatment.
• actually it is not free - price is composite - it is like quantity 
discount.
• Mandate of section 5(4) of IGST Act, 2017 is that
interstate tax in case of interstate taxable supply from
unregistered person to registered person will be paid
by the recipient on reverse charge basis. At the same
time Section 24 of CGST Act, 2017 mandate that every
person making interstate taxable supply is
compulsorily required to be registered.
• indeed some contradiction
• There's a dilemma over charging IGST on exports to
Nepal. Is it still applicable.
• really IGST cannot apply as Nepal is not a State of India.
• In CMP Scheme inter State supplies are not allowed. So
it means for purchase and sale both.
• purchases  from  registered  persons  allowed  -  the  supplier 
has  to  upload  the  return;  if  purchases  form  unregistered 
persons then he is liable to pay GST under reverse charge.
• IGST paid on imports, credit available against any
outward supplies or outward supplies out of imported
goods only.
• any supply - GST does not required one to one relation.
• Mr. X own a property and lets out the same to Y a GST
Registered entity. Mr. X has no other property given on
rent. Whether the tenant in this case i.e. Y is required to
pay GST under reverse charge.
• if  commercial  property  and  less  than  20  lakhs  rent  per 
annum then Y is required to pay under reverse charge.
• If short supply is received, then whether ITC is to be
availed proportionately less or Debit Note should be
issued to supplier for the short quantity by charging
GST on it and the same to be paid at the month end
along with other GST liability.
• avail full ITC and raise debit note - payment as per normal 
time limit.
• XYZ is registered with GST at Mumbai. They had
received an order for Installation and Commissioning
from ABC in Bhopal. XYZ sub-contracted this work to
PQR from Bhopal.
• (1). PQR will charge IGST to XYZ; and (2). XYZ will charge 
IGST to ABC.
• If a person supplying exempted goods and not
registered, can he make inter state supply of exempted
goods without registration.
• yes - no problem.
• I am a textile dealer, until unregistered, wants to opt
composition scheme. My opening stock as on 01.07.17
is out of purchases from unregistered dealer since
there was no tax on textile in earlier regime. Now
whether I will have to pay full tax at the time of
registration itself to become eligible for composition
scheme.
• strictly legally - yes.
• I am an individual, not engaged in any business. I
purchased residential flat in under construction
building from builder, agreement for which is executed
and registered in 2012. Completion certificate for
building in which I purchased flat is not yet received
from Municipal Corporation. I wish to sell my right, title
and interest in the said under construction flat.
Question: Whether I will be required to collect GST on
sale of my right, title and interest in the said under
construction flat.
• Since you are not in business of selling flats - no GST.
• Which documents to be issued for sending the goods
in the following cases:
1. Sending marketing material to branch in same state.
2. Sending marketing material to branch in different
state.
3. Sending material to replace faulty material under
warranty.
4. Getting faulty material back from client which is
under warranty.
5. Sending material to client for training purposes.
6. Sending material to vendor purchased earlier but
rejected due to poor quality.
• Delivery Challan in 1, 2 and 5 
• For 6 DC with debit note
• For 3, 4 DC and proportionate ITC is reversible 
• A company sells goods and charge transportation in his
invoice. It does not issue consignment note. Goods sold
leviable to tax @ 18%. Does GST shall be levied on
transportation charges. Although transportation service
is exempt from tax if it is not GTA but in this case should
we charge GST as it is a composite supply.
• GST  payable  on  value  including  freight  @  18%  -  It  is 
composite supply.
• An Indian company purchase goods from Europe and
before clearing from custom station, it sold the goods to
another person in India. Whether GST will be charged?
• An Indian company purchase goods from Europe and
directly send the same to Singapore from Europe.
Whether GST will be charged in this case, if yes, who will
charge to whom.
• (1). no GST as high seas sale 
• (2). of course no - how GST can apply.
• How the goods can be sent from one jobworker to
another jobworker? As per Sec. 143 of CGST Act goods
can be sent for further processing but i want to know on
whose challan goods for further processing can be sent
whether of principal or jobworker? If the goods are sent
on job-workers challan how the principal will fill the detail
of point 5 of ITC-04 or the goods will be sent on principal
challan from jobworker place for further processing to
another jobworker?
• Delivery challan - advisable that Principal Manufacturer sends 
challan  and  fill  whatever  details  possible;  really  DC  can  be 
sent by job worker also - but harassment possible.
• We are a restaurant. During the course of business we
provide some services where consideration is not
received.
(1). Free lunch to bus drivers; invoice is not made but
order slip is being prepared;
(2). free lunch to waiters;
(3). free lunch to government officer. Please advice
transaction wise impact of GST or on ITC?
• really  all  these  are  expenses  in  relation  to  business  -  as 
regard  (3),  you  cannot  officially  say  so;  as  regards  (2),  no 
GST as benefit to employee; as regards (1), really not free as 
it is for business promotion - but departmental harassment is 
possible
• Our company is registered under VAT (as trader) &
Service tax (as service provider) both, Vat sale is 80%
and Service 20%; Now I have to sell material under GST,
Am I eligible to avail deemed credit u/s 140 (3) as stock is
huge & I don't have duty paid documents?
• If you are registered under VAT then you must have filed VAT 
returns and whatever is your closing VAT credit, you can carry 
forward by filing GST TRAN-1;
• Really  they  have  not  envisaged  such  a  situation  in  section 
140(3) i.e. trader who is also a service provider and thus as 
per proviso to section 140(3) you can take deemed credit in 
respect of your trading activity but issue prone to litigation.
• My client's business is provision store. Can he make
invoices inclusive of tax. 
• No
• A CA, registered under GST, filed return of his friends
and relatives, with out charging any fees. What will be
scenario post GST?
• GST  payable  for  service  to  relatives  but  not  friends  - 
technically  for  service  to  friends,  proportionate  ITC  is 
reversible
• Remuneration to partners over & above share of profits
not in nature of employer-employee relationship. Hence
whether liable to tax under GST.  
• Share in partnership firm is actionable claim - Bharat Prasad
v. Paras Singh Jute Mills ,  (1907),  34,  Cal.  289.  Share  in 
partnership is actionable claim and Schedule 3 - negative list 
clearly exclude actionable claims
• A Hospital is billing for operation charge which includes
surgeon fee, anesthesia fee, OT charges and cost of
consumables including drugs and medicines. Services of
hospital are exempt but medicines and consumables are
taxable supply even for a hospital. W hether hospital is
under an obligation to get GST registration and pay tax.
• Composite Supply concept
• Whether on transition, credit of SBC and KKC is available
• No
1) KKC [Rule 3(7)(d) of CENVAT Rules, 2004]
2) SBC was not eligible for CENVAT Credit under the Rules, 
2004
• An individual having less than 50 lacs of turnover is
allowed to pay service tax on receipt basis. Now if on
30th June he has an outstanding of Rs. 10 lacs in his
books on which service tax is to paid as and when he
receives the payments. Assuming he will realise Rs. 2
lacs in December how he will pay the service tax.
• he  will  have  to  pay  GST  @  18%  -  if  he  had  not  charged 
service tax in his invoice - otherwise whatever service tax was 
charged would be paid as GST
• What will happen for the items with MRP printed tags.
• GST  payable  on  basis  of  sale  price  -  If  sale  at  MRP,  then 
make  back  calculations  and  charge  GST  such  that  total 
amount charged is equal to or les than MRP
1) Can transition forms be revised;
2) What about goods purchased and sold against statutory
forms;
3) How about movement of goods as Form DS 2 (DVAT
Law) is no longer available from July 1 and E Way Bill
rules are not existing GST payable on basis of sale price
1) no  specific  provision  -  but  they  say  more  than  one  return 
permissible; 
2) you  have  to  get  form  like  C,  F  etc.  within  three  months  - 
otherwise Vat credit is not allowed to be carried forward as 
SGST;
3) DVAT Law provisions for forms will continue
• If there is balance in Excise PLA since 2010 can we get
the credit in current year against GST payable.
• yes  -  no  legal  bar  -  if  it  was  shown  in  your  excise  monthly 
returns till June 2017, you have to file GST TRAN 1 return
• If any person voluntarily take registration under GST, is
he will be liable to charge GST on supply irrespective of
total amount of supplies? Or only when his total supplies
exceeds Rs. 20 lakhs.
• really  as  registration  and  liability  of  GST  are  independent 
issue - but we have to wait for actual exemption notification
• In case of Supply of Goods and Services, if the goods
have been sold and service has been provided and the
Tax invoice has been raised by supplier, but the payment
is delayed for a long period of time by the Customer, will
the supplier be obligated to pay GST even though the
payment is not received. This can affect the liquidity of
the Supplier. Also In case of Irrecoverable claims will the
supplier get refund of GST.
• supplier  has  to  pay  GST  even  if  recipient  does  not  pay;  no 
provision of refund of GST if debt is not recoverable
• If a person doing business in Haryana with TO of 9 lacs
and in Uttrakhand with TO 6 lacs. His total turnover is 15
lacs. Is he under compulsion for registration in
Uttrakhand.
• really they have not thought of such possibility at all but yes, 
he will require registration in UK and then also automatically 
in Haryana also. 
• How the reimbursements shall be taxed under GST, for
instance, an auditor charges his fees and he is
reimbursed the travelling etc expenses additionally.
• really  these  are  part  of  value  of  his  service  as  he  cannot 
provide audit service without those expenses and hence GST 
should apply - as his bill for audit is not sole consideration for 
his supply of service. 
• Whether E Way Bill is required as an essential document
to claim ITC;
• Whether E Way Bill is required if exempted goods are
being despatched;
• How the E Way bill would be managed when sales
persons travel with costly goods from one state to
another.
• no such law but harassment possible 
• Yes - as they have not made any distinction between exempt 
and  taxable  goods  -  but  mostly  exempted  goods  will  be 
exempted from provisions of e way bill 
• yes  that  is  practical  problem  -  they  will  find  some  solution  - 
hope so. 
• Whether providing inter corporate loan is a supply of
service and subjected to GST.
• no as it is simple supply of money which is outside GST. 
• Whether Supply of free items during warranty will be
taxable? To supply on Challan or Invoice? ITC to be
Reversed or not?
• Free  supply  during  warranty  is  not  taxable  if  GST  has 
already  been  paid  on  warranty  charges.  ITC  reversal  not 
required. To be sent on challan.
• Points to be taken care of:
q Mention  warranty  (including  extended  warranty,  if 
any)  period  on  Invoice,  retain  any  warranty  related 
brochures or any document. 
q When  issue  material  free  of  cost,  mention  Original 
Invoice No. and date on Challan.
Observation about a flaw w.r.t. ISD in GST
• Does the Government feel that ISD will be not be taking 
supplies  from  unregistered  vendors?  Or  from  persons 
specifically covered under Reverse Charge? 
• Mostly all entities have their legal function centralised at 
HO, and, as was bound to happen, legal services taken 
from advocates are notified under reverse charge. 
• So, it seems, as the vision goes of the powers-that-
be, that HO must have a separate registration as a
normal taxpayer too. And then, in absence of any
outward tax liability, such reverse charge GST
becoming a cost.