GST PDF

CA.
ROHIT GAMBHIR
[B.Com (H), CA]
CS PROFESSIONAL CA ROHIT GAMBHIR
 Reverse Charge Mechanism (RCM):

i) Forward Charge Mechanism:
SG
SGST = 09
CGST = 09
Value = 100
CGST = 09
X, Supplier SGST = 09 Y, Recipient
Total =118
ii) Reverse Charge Mechanism u/s 9(3):
SG
SGST = 09
CGST = 09
Value = 100
CGST = XX
X, Supplier SGST = XX Y, Recipient
Total =100
ii) Reverse Charge Mechanism u/s 9(4):
SG
SGST = 09
CGST = 09
Value = 100
CGST = XX
X, Supplier SGST = XX Y, Recipient
Total =100
Unregistered person Registered person
1
REVERSE CHARGE
 Reverse charge?
SN Particulars Description
> Reverse “Reverse charge” means the
charge  liability to pay tax by the recipient of supply of goods or services or both instead of the
supplier of such goods or services or both
 under subsection (3) or sub-section (4) of section 9, or
 under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services
Tax Act;
 Why Reverse Charge??

The factors are as under:
1) Large number of assessees with small payment of taxes from each assessee-
Sometimes the number of assessees (who is the supplier of goods or services or both) are very large and
the recipient of goods or services or both are few. The Govt feels that each of large number of assessee
will pay small amount of tax and the recovery of tax from the service recipient will be much simpler & will
save public at large from burden of complying with the law.
For example: Insurance agents. There may be over 1 Crore insurance agents employed by 25 to 30
Companies engaged in providing life insurance services. The commission received by each of the agent
may not exceed the threshold of Rs.20 lacs/10 lacs. The Government may not earn substantial revenue
due to the constraint in the law. Therefore the Government can collect the same amount of tax from its
25 to 30 Insurance companies. Thus, the administrative problems in collecting the tax is heavily reduced.
2) Jurisdiction-
In case of import of services or goods, supplier is outside India. Therefore it’s a big hassle to get hold on
the person who resides outside making him to comply with the requirement of the filing returns & paying
taxes. Therefore to make it simpler from the administrative point of view and from the point of supplier
from abroad the recipient of supply is made liable to pay tax as he is located in India. The Government can
recover the tax from the recipient.
2
 Difference between Normal charge & Reverse Charge:
SN Particulars Normal Charge Reverse Charge

1) Liability? Supplier Recipient
2) Registration? Sec 22: Sec 24:
On exceeding threshold [20 lakhs/10 lakhs] Mandatory Registration
Sec 24:
Mandatory Registration
3) Threshold Available Not Available

benefit?
4) Payment of Along with periodic return (GSTR-3) Along with periodic return (GSTR-3)
th th
taxes? [Monthly/Quarterly by 20 ] [Monthly/Quarterly by 20 ]
5) Modes of Input tax credit can be utilized for the Input tax credit CANNOT be utilized for the
payment payment of taxes. payment of taxes
Means by using: Means by using:

 E- Credit ledger  E- Cash ledger
 E-Cash ledger
[Payment of tax liability under Reverse
charge can be made only through CASH]
3
REVERSE CHARGE u/s 9(3)

GOODS
[N/N- 4/2017 – CT (Rate), amended vide N/N- 36/ 2017-CT (Rate) and N/N- 43/ 2017-CT (Rate)]
S. Tariff item, Description of Supplier of Recipient of supply

No. sub-heading, supply of Goods goods
heading or
Chapter
(1) (2) (3) (4) (5)

1. 0801 Cashew nuts, not Agriculturist Any registered person
shelled or peeled
2. 1404 90 10 Bidi wrapper leaves Agriculturist Any registered person
(tendu)
3. 2401 Tobacco leaves Agriculturist Any registered person
4. 5004 to 5006 Silk yarn Any person Any registered person
who manufactures
silk yarn from raw
silk or silk worm
cocoons for supply
of silk yarn
4A 5201 Raw cotton Agriculturist Any registered person
5. - Supply of lottery. State Government, Lottery distributor or selling agent.

Union Territory or Explanation.- For the purposes of this
any local authority entry, lottery distributor or selling
agent has the same meaning as
assigned to it in clause (c) of Rule 2
of the Lotteries (Regulation) Rules,
2010, made under the
6. Any Chapter Used vehicles, seized CG, SG, UT or a Any registered person
and confiscated local authority
goods, old and used
goods, waste and
scrap
4
REVERSE CHARGE u/s 9(3)

SERVICES
[N/N- 13/2017 – CT (Rate), amended vide N/N- 33/ 2017-CT (Rate)]
SN Category of Supply of Services Supplier of Recipient of Service

service
(1) (2) (3) (4)
1 Supply of Services Goods (a) Any factory registered under or
 BY Transport governed by the Factories Act, 1948(63 of
a GOODS TRANSPORT AGENCY (GTA) in Agency 1948); or
respect of transportation of goods by (GTA) (b) any society registered under the
road Societies Registration Act, 1860 (21 of 1860)
 TO- or under any other law for the time being
(a) any factory registered under or in force in any part of India; or
governed by the Factories Act, 1948(63 (c) any co-operative society established
of 1948);or by or under any law; or
(b) any society registered under the (d) any person registered under the
Societies Registration Act, 1860 (21 of CGST Act or the IGST or the SGST Act or
1860) or under any other law for the the UTGST Act; or
time being in force in any part of India; (e) any body corporate established, by or
or under any law; or
(c) any co-operative society established (f) any partnership firm whether
by or under any law; or registered or not under any law
(d) any person registered under the including association of persons; or
CGST Act or the IGST Act or the SGST (g) any casual taxable person;
Act or the UTGST Act; or
located in the taxable territory.
(e) any body corporate established, by
or under any law; or
(f) any partnership firm whether
registered or not under any law
including association of persons; or
(g) any casual taxable person.
5
2 Services supplied An  Any business entity

BY individual  located in the taxable territory.
 an individual advocate including a senior advocate
advocate including a
 by way of representational services senior
before any court, tribunal or authority, advocate
directly or indirectly, to any business or firm of
entity advocates.
 located in the taxable territory,
 including where contract for provision of
such service has been entered through
another advocate or a firm of advocates,
or by a firm of advocates,
 by way of legal services,
TO a business entity.
3 Services supplied An arbitral  Any business entity

 BY an arbitral tribunal tribunal.  located in the taxable territory.
 TO a business entity.
4 Services provided Any person  Any body corporate or partnership

 BY way of sponsorship firm
 TO any body corporate or partnership  located in the taxable territory.
firm.
5 Services supplied CG, SG,  Any business entity

 BY the CG, SG, Union territory or local Union  located in the taxable territory.
authority territory or
 TO a business entity EXCLUDING - local
(1) renting of immovable property, and authority
(2) services specified below-
(i) services by the Department of Posts by

way of speed post, express parcel post,
life insurance, and agency services
provided to a person OTHER THAN CG, SG or
Union territory or local authority;
(ii) services in relation to an aircraft or a

vessel, inside or outside the precincts of a
port or an airport;
(iii) transport of goods or passengers.
6
6 Services supplied A director  The company or a body corporate

 BY a director of a company or a body of a  located in the taxable territory.
corporate company
 TO the said company or the body or a body
corporate. corporate
7 Services supplied An  Any person carrying on insurance

 BY an insurance agent insurance business,
 TO any person carrying on insurance agent  located in the taxable territory.
business.
8 Services supplied A  A banking company or a financial
 BY a recovery agent recovery institution or a non-banking
 TO a banking company or a financial agent financial company,
institution or a non- banking financial  located in the taxable territory.
company.
9 Supply of services Author or  Publisher, music company, producer

 BY an author, music composer, music or the like,
photographer, artist or the like composer,  located in the taxable territory.
 by way of transfer or permitting the use photograp
or enjoyment of a copyright covered her, artist,
under clause (a) of sub-section (1) of or the like
section 13 of the Copyright Act, 1957
relating to original literary, dramatic,
musical or artistic works
 TO a publisher, music company,
producer or the like.
10 Supply of services Members  Reserve Bank of India [RBI].

 BY the members of Overseeing of
Committee Overseeing
 TO Reserve Bank of India [RBI] Committee
constituted
[N/N- 33/2017] by the RBI
7
In addition to the above list given under Central Tax- Rate, following additional category of supply of services
is listed under Notification No. 10/2017- Integrated Tax (Rate) on which GST shall be paid by the recipient on
reverse charge basis:-
SN Category of Supply of Services Supplier of Recipient of Service

service
(1) (2) (3) (4)
1 Any service supplied Any person  Any person located in the taxable
 BY any person who is located in a non- located in a territory
taxable territory non-taxable  OTHER THAN non-taxable online
 TO any person other than non-taxable territory recipient.
online recipient
2 Services supplied A person  Importer, as defined in clause (26) of
 BY a person located in non- taxable located in section 2 of the Customs Act, 1962(52 of
territory by way of transportation of non-taxable 1962),
goods by a vessel from a place outside territory  located in the taxable territory.
India up to the customs station of
clearance in India
Business Entity:
Business entity has been defined as any person ordinarily carrying out any activity relating to industry,
commerce or any other business or profession.
Explanation.-
For purpose of this notification,-
(a) The person who pays or is liable to pay freight for the transportation of goods by road in goods carriage,
located in the taxable territory shall be treated as the person who receives the service for the purpose of
this notification.
(b) “Body Corporate” has the same meaning as assigned to it in clause (11) of section 2 of the Companies
Act, 2013.
(c) the business entity located in the taxable territory who is litigant, applicant or petitioner, as the case
may be, shall be treated as the person who receives the legal services for the purpose of this notification.
(d) the words and expressions used and not defined in this notification but defined in the CGST Act, the
IGST Act, and the UTGST Act shall have the same meanings as assigned to them in those Acts.
8
CT = 09 SG
ST = 09
Goods transportation by ROAD

ABC Ltd.
Value = 100
CT = XX
Supplier ST = XX Recipient
Total =100
Individual Advocate
OR GST
Firm of Advocates
T/O upto 20/ 10

GST
lakhs in PFY
Individual Advocate Business

OR
Entity
Firm of Advocates
Others GST (RCM)
Other than
GST
Business Entity
9
T/O upto 20/

GST
10 lakhs in PFY
Business
Entity
Others GST (RCM)
Senior
Advocate
Other than
GST
Business Entity
T/O upto 20/

GST
10 lakhs in PFY
Business
Entity
Others GST (RCM)
Arbitral
Tribunal
Other than
GST
Business Entity
 Understanding:
Arbitration, a form of alternative dispute resolution (ADR), is a technique for the resolution of disputes
outside the courts. The parties to a dispute refer it to arbitration by Arbitral Tribunal, and agree to be bound
by the decision of Arbitral Tribunal. A third party reviews the evidence in the case and imposes a decision
that is legally binding on both sides and enforceable in the courts.
10
SG
CT = 09 ST = 09
FILMFARE
Awards JIO
Value = 100
CT = XX Recipient
Supplier
ST = XX
Total =100
 Government and Local Authority:

Main Part:
Services provided by Government/ Local Authority = Not liable to GST
Specific Part:
Dept of POST
Speed Post, Agency Others

services, Life insurance
& Express parcel post
GOVT Other than GOVT

GOVT Other than GOVT
GST GST
GST GST (NCM)
11
Services provided by
Government/ Local Authority
In relation to Aircraft Transport of Goods or Other services

or Vessel (Repairs) Passengers
Railways = First Class / AC
Coach - GST
Tourism = GST
GOVT Business Entity
GST (NCM)
GST (NCM) GST

[Entry 45]
Upto Rs. 5K Exceeding Rs. 5K
GST
[Entry 83] Renting of Others
Immovable Property (Security Services)
GST (NCM) GST (RCM)
BE =< 20 lakhs/ 10 BE > 20 lakhs/ 10

lakhs in PFY lakhs in PFY
GST (RCM) GST (RCM)

[Entry 39]
12
DIRECTOR
Whole Time Director Part Time Director
Out of GST, Employer- Under GST, liability to

Employee relation pay tax under RCM
SG
CT = 09 ST = 09
Consultancy services
ABC Ltd
Value = 100
CT = XX
ST = XX Recipient
Director, Supplier
Total = 100
SG
CT = 09
ST = 09
Agent services
Value = 100
CT = XX
ST = XX
Insurance Agent,
Total = 100 Recipient
Supplier
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SG
CT = 09 ST = 09
Agent services
Value = 100
CT = XX
ST = XX
Recovery Agent, Total = 100
Recipient
Supplier
SG
CT = 09 ST = 09
Transfer or permitting the use

or enjoyment of a copyright
Publisher, Music
company, Producer
Value = 100
CT = XX
Author, Music Composer, ST = XX Recipient
Total = 100
artist, photographer, etc
14
IT = 18
Supply of Services
ABC Inc, USA PQR Ltd, India
Supplier Recipient
Value = 100
IT = XX
Total = 100
Non-assessee Online
Recipient (Business
Recipient)
IT = 18
Ocean freight
ABC Inc PQR Ltd (Delhi)
Supplier Recipient
Value = 100
IT = XX
Total = 100
Shipping Company
15
Notified services u/s 9(5)

 N/N- 17/2017 – CT (Rate)] and [N/N- 23/2017 – CT (Rate):
The Central Government hereby notifies that in case of the following categories of services, the tax on intra-State
supplies shall be paid by the ELECTRONICE COMMERCE OPERATOR:
1) Services by way of transportation of passengers by a radio-taxi, motorcab, maxicab and motor cycle.
[N/N- 17/2017 – CT (Rate)]
2) Services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or other
commercial places meant for residential or lodging purposes,
EXCEPT where the person supplying such service through electronic commerce operator is liable for
registration under section 22(1) of the CGST Act.
[N/N- 17/2017 – CT (Rate)]
3) Services by way of house-keeping, such as plumbing, carpentering etc,

EXCEPT where the person supplying such service through electronic commerce operator is liable for
registration under subsection 22(1) of the CGST Act.
[N/N- 23/2017 – CT (Rate)]
Explanation-
For the purposes of this notification,-
a) “Radio taxi” means a taxi including a radio cab, by whatever name called, which is in twoway radio
communication with a central control office and is enabled for tracking using Global Positioning System (GPS)
or General Packet Radio Service (GPRS);
b) “Maxicab”, “Motorcab” and “Motor cycle” shall have the same meanings as assigned to them respectively in
clauses (22), (25) and (26) of section 2 of the Motor Vehicles Act, 1988 (59 of 1988).
Motorcab Motorcab means any motor vehicle constructed or adapted to carry not more than six passengers (upto
[Sec 2 (25)] 6 passengers) excluding the driver.
Maxi cab Maxicab means any motor vehicle constructed or adapted to carry more than six passengers, but not
[Sec 2 (22)] more than twelve passengers (6 passengers <MV<=12 passengers), excluding the driver.
Motor cycle Motor cycle means a two-wheeled motor vehicle.

[Sec 2 (26)]
16
CGST = 09 SGST = 09
SG
Cab services Cab services
Payment made = 100 Value = 100

CGST = 09
SGST = 09
Cab Driver ECO Total =120 Recipient
Invoice from Ola:
Value = 20
CGST = 1.8
SGST = 1.8
Total =23.6
CGST = 1.8 SGST = 1.8

SG
17
CGST = 09 SGST = 09
SG

CGST = 09
SGST = 09
Hotel ECO Total =120 Recipient
Invoice from Ola:
Value = 20
CGST = 1.8
SGST = 1.8
Total =23.6
CGST = 1.8 SGST = 1.8

SG
18
CGST = 09 SGST = 09
SG

CGST = 09
SGST = 09
Electrician ECO Total =120 Recipient
Invoice from Ola:
Value = 20
CGST = 1.8
SGST = 1.8
Total =23.6
CGST = 1.8 SGST = 1.8

SG
19
EXEMPTIONS
 Sec 11: Power to grant exemption from tax:
 Goods exempt from tax [N/N 02/2017]:

A list of items have been notified under section 11(1) of the CGST Act, 2017/section 6(1) of the IGST Act, 2017.
These items have been EXEMPTED from whole of the tax.
Since GST is a tax for common man, everyday items used by the common man have been included in the list of
exempted items. Items such as unbranded atta/maida/besan, unpacked food grains, salt, fresh milk, eggs,
curd, lassi, fresh fruits, fresh vegetables, Indian national flag, plastic bangles, etc are among the items
exempted from GST.
 Services exempt from tax [N/N 12/2017 as amended]:
SN Particulars
1) Services by way of-
(74) (a) health care services
 by a clinical establishment,
 an authorised medical practitioner or
 para-medics;
(b) services provided by way of TRANSPORTATION of a patient in an ambulance, other than those
specified in (a) above.
 Terms used:
(i) Health care services means any service by way of diagnosis or treatment or care for illness, injury,
deformity, abnormality or pregnancy in any recognised system of medicines in India and
 includes services by way of transportation of the patient to and from a clinical establishment,
 but does not include hair transplant or cosmetic or plastic surgery, except when undertaken to
restore or to reconstruct anatomy or functions of body affected due to congenital defects,
developmental abnormalities, injury or trauma;
(ii) Clinical establishment means a hospital, nursing home, clinic, sanatorium or any other institution
by, whatever name called, that offers services or facilities requiring diagnosis or treatment or care
for illness, injury, deformity, abnormality or pregnancy in any recognised system of medicines in
India, or a place established as an independent entity or a part of an establishment to carry out
diagnostic or investigative services of diseases;
GST
GST
Renting of Ambulance GST
20
2) Services provided by the cord blood banks by way of preservation of stem cells or any other service in
(73) relation to such preservation.
GST
3) Services provided by operators of the common bio-medical waste treatment facility to a clinical
(75) establishment by way of treatment or disposal of bio-medical
bio waste or the processes incidental thereto
thereto.
Treatment of Biomedical waste
Collection services
GST
4) Services by a veterinary clinic in relation to health care of animals or birds.

(46)
GST
5) Services by an entity registered under section 12AA of the Income-tax

Income tax Act, 1961 (43 of 1961) by way of
(1) charitable activities.
 Terms used:
“Charitable activities”” means activities relating to -
(i) public health by way of ,-
,
(A) care or counseling of
(I) terminally ill persons or persons with severe physical or mental disability;
(II) persons afflicted with HIV or AIDS;
(III) persons addicted to a dependence-forming
dependence forming substance such as narcotics drugs or
alcohol; or
(B) public awareness of preventive health, family planning or prevention of HIV infection;
(ii) advancement of religion

eligion , spirituality or yoga;
(iii) advancement of educational programmes or skill development relating to,-

to,
(A) abandoned, orphaned or homeless children;
(B) physically orr mentally abused and traumatized persons;
(C) prisoners; or
(D) persons over the age of 65 years residing in a rural area;
(iv) preservation of environment including watershed, forests and wildlife;
21
6) Services by a person by way of-

(13) (i) conduct of any religious ceremony;
(ii) renting of precincts of a religious place meant for general public, owned or managed by an entity
registered as a charitable or religious trust under section 12AA of the Income-tax Act, 1961
(hereinafter referred to as the Income-tax Act) or a trust or an institution registered under sub clause
(v) of clause (23C) of section 10 of the Income-tax Act or a body or an authority covered under clause
(23BBA) of section 10 of the said Income-tax Act:
Provided that nothing contained in entry (b) of this exemption shall apply to,-
(i) renting of rooms where charges are one thousand rupees or more per day;
(ii) renting of premises, community halls, kalyanmandapam or open area, and the like where charges
are ten thousand rupees or more per day;
(iii) renting of shops or other spaces for business or commerce where charges are ten thousand
rupees or more per month.
 Terms used:
(i) Religious place means a place which is primarily meant for conduct of prayers or worship
pertaining to a religion, meditation, or spirituality;
(ii) General public means the body of people at large sufficiently defined by some common quality
of public or impersonal nature;
 Conduct of any Religious ceremony:
Pandit Ji
services GST
Purpose: Marriage, etc

 Renting of Religious Precincts:
Renting of Precincts
Charges for RENTING Charges for RENTING Charges for RENTING

OF ROOMS OF HALL OF SHOPS
< Rs.10,000 => Rs.10,000
GST GST
22
7) Services by a specified organisation in respect of a religious pilgrimage facilitated by the Ministry of

(60) External Affairs, the Government of India, under bilateral arrangement.
 Terms used:
Specified organisation shall mean,-
i) Kumaon Mandal Vikas Nigam Limited, a Government of Uttarakhand Undertaking; or
ii) Committee or State Committee as defined in section 2 of the Haj Committee Act, 2002 (35 of
2002);
Specified
Organisation
(KMVN Ltd)
GST
8) Services provided by-

(45) (a) an arbitral tribunal to –
(i) any person other than a business entity; or
(ii) a business entity with an aggregate turnover up to twenty lakh rupees (ten lakh rupees in the
case of special category states) in the preceding financial year;
(b) a partnership firm of advocates or an individual as an advocate other than a senior advocate, by way
of legal services to-
(i) an advocate or partnership firm of advocates providing legal services;
(ii) any person other than a business entity; or
(iii) a business entity with an aggregate turnover up to twenty lakh rupees (ten lakh rupees in the
case of special category states) in the preceding financial year;
(c) a senior advocate by way of legal services to-

(i) any person other than a business entity; or
(ii) a business entity with an aggregate turnover up to twenty lakh rupees (ten lakh rupees in the
case of special category states) in the preceding financial year.
 Terms used:
(i) “Arbitral tribunal” has the same meaning as assigned to it in clause (d) of section 2 of the
Arbitration and Conciliation Act, 1996 (26 of 1996);
(ii) “Legal service” means any service provided in relation to advice, consultancy or assistance in any
branch of law, in any manner and includes representational services before any court, tribunal or
authority;
(iii) “Advocate” has the same meaning as assigned to it in clause (a) of sub-section (1) of section 2 of
the Advocates Act, 1961 (25 of 1961);
(iv) “Senior advocate” has the same meaning as assigned to it in section 16 of the Advocates Act,
1961 (25 of 1961)
23
9) Services relating to
(54)  cultivation of plants and
 rearing of all life forms of animals,
 EXCEPT the rearing of horses,
 for food, fibre, fuel, raw material or other similar products or agricultural produce by way of—
(i) agricultural operations directly related to production of any agricultural produce including
cultivation, harvesting, threshing, plant protection or testing;
(ii) supply of farm labour;
(iii) processes carried out at an agricultural farm including tending, pruning, cutting, harvesting,
drying, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk
packaging and such like operations which do not alter the essential characteristics of agricultural
produce but make it only marketable for the primary market;
(iv) renting or leasing of agro machinery or vacant land with or without a structure incidental to its
use;
(v) loading, unloading, packing, storage or warehousing of AGRICULTURE PRODUCE;
(vi) agricultural extension services;
(vii) services by any Agricultural Produce Marketing Committee or Board or
(viii) services provided by a commission agent for sale or purchase of agricultural produce.
 Terms used:
(i) “Agricultural extension” means application of scientific research and knowledge to agricultural
practices through farmer education or training;
(ii) “Agricultural Produce Marketing Committee or Board” means any committee or board
constituted under a State law for the time being in force for the purpose of regulating the
marketing of agricultural produce;
10) Services by way of loading, unloading, packing, storage or warehousing of RICE.

54)
11) Services by way of pre-conditioning, pre- cooling, ripening, waxing, retail packing, labelling of fruits and
55) vegetables which do not change or alter the essential characteristics of the said fruits or vegetables.
12) Carrying out an intermediate production process as job work in relation to cultivation of plants and
56) rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other
similar products or agricultural produce.
24
13) Service of transportation of passengers, with or without accompanied belongings, by—

(17) (a) railways in a class OTHER THAN—
(i) first class; or
(ii) an air-conditioned coach;
(b) metro, monorail or tramway;
(c) inland waterways;
(d) public transport, other than predominantly for tourism purpose, in a vessel between places located
in India; and
(e) metered cabs or auto rickshaws (including e-rickshaws).
 Terms used:
(i) Metered cab means
 any contract carriage on which an automatic device, of the type and make approved under
the relevant rules by the State Transport Authority, is fitted which indicates reading of the
fare chargeable at any moment and
 that is charged accordingly under the conditions of its permit issued under the Motor
Vehicles Act, 1988 (59 of 1988) and the rules made thereunder (but does not include radio
taxi)
(ii) E-rickshaw means a special purpose battery powered vehicle of power not exceeding 4000
watts, having three wheels for carrying goods or passengers, as the case may be, for hire or
reward, manufactured, constructed or adapted, equipped and maintained in accordance with
such specifications, as may be prescribed in this behalf;
(iii) Radio Taxi:

“Radio taxi’ means a taxi including a radio cab, by whatever name called, which is in two way
radio communication with a central control office and is enabled for tracking using Global
positioning System (GPS) or General Packet Radio Service (GPRS).
Transport of Passengers:
i) Railways (GST)
a) First Class (GST)
b) An air-conditioned coach (GST)
Transport of Passengers
ii) metro, monorail or tramway (GST) 1
iii) Inland waterways (GST)

GST
iv) Public transport, other than predominantly

for TOURISM PURPOSE (GST), in a vessel
between places located in India (GST)
v) metered cabs or auto rickshaws (including E-

rickshaws) (GST) Public Transport by VESSEL
Not for predominantly* For predominantly **

TOURISM purpose TOURISM purpose
GST GST
25
Not for predominantly* TOURISM purpose:

 Normal public ships or other vessels that sail between places located in India would be
EXEMPTED even if some of the passengers on board are using the service for tourism
as it is PREDOMINANTLY (substantially) not running for tourism purpose. Therefore,
GST is NOT levied.
Predominantly* TOURISM purpose:

 Charter vessel or cruise ships which is PREDOMINANTLY for the tourism purpose would
NOT be EXEMPTED even if some of the passengers in such vessel are not tourists as it is
PREDOMINANTLY (substantially) is running for tourism purpose. Therefore, GST is
levied.
14) Transport of passengers, with or without accompanied belongings, by –

(15) (a) air, embarking from or terminating in an airport located in the state of Arunachal Pradesh,
Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or Tripura or at Bagdogra located in
West Bengal;
(b) non-airconditioned contract carriage other than radio taxi, for transportation of passengers,
excluding tourism, conducted tour, charter or hire; or
(c) stage carriage other than air- conditioned stage carriage.
1) Arunachal Pradesh,
2) Assam, GST
3) Manipur,
4) Meghalaya,
5) Mizoram,
6) Nagaland,
7) Sikkim, or Tripura or at
8) Bagdogra located in West Bengal
 Contract Carriage:
A Contract carriage carries passengers in pursuance of a contract & should not stop to pick up or set
down passengers not included in the contract anywhere during the journey;
 Stage Carriage:
It is a motor vehicle which operates between stipulated destinations. It is allowed to pick up
passengers en-route.
26
GST
 Contract Carriage (Point to Point):
They do NOT stop to pick

or drop the passengers
during the journey
Non-Air Conditioned Contract

Carriage (Office Bus)
GENERALLY For tourism conducted RADIO TAXI

tour, charter or hire; or
GST GST
GST
 Stage Carriage:
GST
They stop to pick or drop the
passengers during the journey
GST
15) Services by way of transportation of goods-

(15) (a) by road EXCEPT the services of—
(i) a goods transportation agency;
(ii) a courier agency;
(b) by inland waterways (a river, canal, Channel like or other navigable waters used as a means of
transport or travel).
16) Services by way of transportation of goods by an AIRCRAFT from a place outside India upto the customs
(19) station of clearance in India.
Ocean freight RCM
Air freight
USA Airlines
PQR Ltd (Delhi)
Supplier
Recipient
Transportation of Goods
GST
27
17) Services by way of transportation by rail or a vessel from one place in India to another of the following
(20) goods –
(a) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;
(b) defence or military equipments;
(c) newspaper or magazines registered with the Registrar of Newspapers;
(d) railway equipments or materials;
(e) agricultural produce;
(f) milk, salt and food grain including flours, pulses and rice; and
(g) organic manure
18) Services provided by a goods transport agency, by way of transport in a goods carriage of -
(21) (a) agricultural produce;
(b) goods, where consideration charged for the transportation of goods on a consignment transported
in a single carriage does not exceed one thousand five hundred rupees;
(c) goods, where consideration charged for transportation of all such goods for a single consignee does
not exceed rupees seven hundred and fifty;
(d) milk, salt and food grain including flour, pulses and rice;
(e) organic manure;
(f) newspaper or magazines registered with the Registrar of Newspapers;
(g) relief materials meant for victims of natural or man-made disasters, calamities, accidents or mishap;
or
(h) defence or military equipments.
SN Particulars Transportation by
RAIL/ VESSEL GTA
a) Relief Material Non taxable Non taxable
b) Defence or Military Non taxable Non taxable
equipment
c) Newspaper or Magazines Non taxable Non taxable
d) Agriculture produce Non taxable Non taxable
e) Milk, salt and food grain Non taxable Non taxable
including flours, pulses &
rice
f) Organic manure Non taxable Non taxable
g) Railway equipments or Non taxable TAXABLE

materials
h)  Single Carriage <= XXX Non taxable If even one
Rs.1,500 >Rs.1,500 = TAXABLE condition is
 Single Consignee XXX Non taxable satisfied =
<= Rs.750 >Rs.750 = TAXABLE No GST
28
 Discussion on (b) & (c):
Transaction Clause (b) Clause (c) Conclusion

A goods carriage carrying 4 Exemption Exemption Exemption
consignments (all belonging to
different person) at freight of Rs
300 each
A goods carriage carrying 4 No Exemption Exemption Exemption

500 each
A goods carriage carrying 4 No Exemption No Exemption No Exemption

800 each
A goods carriage carrying 4 Exemption No Exemption Exemption

same person i.e. same
consignee) at freight of Rs 300
each
A goods carriage carrying 4 No Exemption No Exemption No Exemption

same person i.e. same
consignee) at freight of Rs 500
each
19) Services provided by a goods transport agency to an unregistered person, including an unregistered
(21A) casual taxable person, other than the following recipients, namely: -
a) any factory registered under or governed by the Factories Act, 1948(63 of 1948); or
b) any Society registered under the Societies Registration Act, 1860 (21 of 1860) or under any other law
for the time being in force in any part of India; or
c) any Co-operative Society established by or under any law for the time being in force; or
d) any body corporate established, by or under any law for the time being in force; or
e) any partnership firm whether registered or not under any law including association of persons;
f) any casual taxable person registered under the CGST Act or the IGST Act or the SGST Act or the UTGST
Tax Act.
[N/N- 32/2017- CT (Rate)]
20) Services by way of renting of residential dwelling for use as residence.

(12)
 Understanding:
Residential Accommodation but does not include - Hotel, Motel, Inn, Guest House, Lodge, House Boat,
or like place for TEMPORARY STAY.
What if: Residential Dwelling used for Commercial Purpose- Taxable
What if: Hotel, Motel, Inn, etc. – Taxable
What if: What is furnished flats given on rent – Non Taxable
29
21) Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or lodging
(14) purposes, having DECLARED TARIFF of a unit of accommodation below one thousand rupees per day or
equivalent.
Declared Tariff Concession Net Amount charged Taxable Taxable Value

(Rs) (Rs) (Rs) (Rs.)
1,600 800 800 Taxable 800
1,200 100 1,100 Taxable 1,100
900 Nil 900 Non- Taxable 900
22) Services by an artist by way of a performance in folk or classical art forms of-
(78) (a) music, or
(b) dance, or
(c) theatre,
if the consideration charged for such performance is not more than one lakh and fifty thousand rupees:
Provided that the exemption shall not apply to service provided by such artist as a brand ambassador.
If amount charged If amount charged

is upto Rs.1.5 lakhs exceeds Rs.1.5 lakhs
GST
GST
BRAND AMBASSADOR:
KENT organizes a
1,25,000 GST
Classical dance
event by HM
30
23) Services by way of right to admission to-

(81) (a) circus, dance, or theatrical performance including drama or ballet;
(b) award function, concert, pageant, musical performance or any sporting event other than a
recognised sporting event;
(c) recognised sporting event, where the consideration for admission is not more than Rs 250 per
person as referred to in (a), (b) and (c) above.
 Terms used:
Recognised sporting event means any sporting event,-
i) organised by a recognised sports body where the participating team or individual represent any
district, state, zone or country;
ii) organised –
A) by a national sports federation, or its affiliated federations, where the participating teams or
individuals represent any district, state or zone;
B) by Association of Indian Universities, Inter-University Sports Board, School Games Federation
of India, All India Sports Council for the Deaf, Paralympic Committee of India or Special
Olympics Bharat;
C) by Central Civil Services Cultural and Sports Board;
D) as part of national games, by Indian Olympic Association; or
E) under Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme;
Service by way admission

to (Ticket charges):
 Circus,  Award function  Recognised or Non –

 Dance,  Concert recognised sporting
 Theatrical performance  Pageant event
including drama and  Musical performance
ballet.
Ticket upto Rs.250 Ticket exceeds

per person Rs.250 per person
GST GST
24) Services by way of admission to a museum, national park, wildlife sanctuary, tiger reserve or zoo.
(79)
31
25) Services by way of training or coaching in recreational activities relating to-

(80) (a) arts or culture, or
(b) sports by charitable entities registered under section 12AA of the Income-tax Act.
 XYZ Singing Classes

 PQR Dance Classes Coaching
 MNO Craft Classes
 ABC Pottery Classes
GST
Coaching in relation to SPORTS
GST
26) Services by way of—

(27) a) extending deposits, loans or advances in so far as the consideration is represented by way of
INTEREST or DISCOUNT (OTHER THAN interest involved in credit card services);
b) inter se sale or purchase of foreign currency amongst banks or authorised dealers of foreign
exchange or amongst banks and such dealers.
SERVICE by way of:
Extending Deposits, Loans & Advances Foreign Exchange transactions between:

where consideration is represented by i) Banks- Banks = GST
way of INTEREST or DISCOUNT ii) Banks- Dealer = GST
iii) Dealer – Dealer = GST
(OTHER THAN interest involved in iv) Dealer – Bank = GST
credit card services)
GST
GST
1) What about Loan processing fees? GST 1) What about??

2) Interest on Loan/OD = GST Bank – Customer = GST
3) Discount received by Bank on discounting Dealer – Customer = GST
Bill of Exchange = GST
4) What about interest paid on Credit card
payment = GST
[V. IMP]
32
27) Services BY an acquiring bank, TO any person in relation to settlement of an amount UPTO TWO
(34) THOUSAND RUPEES in a single transaction transacted through credit card, debit card, charge card or
other payment card service.
Explanation.— For the purposes of this entry, “acquiring bank” means any banking company, financial
institution including non-banking financial company or any other person, who makes the payment to any
person who accepts such card.
 Example: -
Mr. A is using the Credit card of HDFC Bank and to purchase grocery amounting of INR 1800/-, Mr. A is
making payment through Credit card to M/s. S Mart. S Mart is swiping card of Mr. A for an amount of
Rs. 1,800/- on the swipe machine of ICICI Bank. In such cases, ICICI Bank is charging 2% (INR 36/- of
INR 1800/-) as a service charge to T Mart and charges GST @ 18% i.e. INR 6.48 (18% of INR 36/-). As
per the notification, now on such type of transaction ICICI bank will not charge GST to T mart, as it is a
single transaction below INR 2,000/- and payment has been made by Credit card.
28) Services provided -

(a) BY an educational institution TO its students, faculty and staff;
(b) TO an educational institution, by way of,-
(i) transportation of students, faculty and staff;
(ii) catering, including any mid-day meals scheme sponsored by the Central Government, State
Government or Union territory;
(iii) security or cleaning or house- keeping services performed in such educational institution;
(iv) services relating to admission to, or conduct of examination by, such institution; upto higher
secondary:
Provided that nothing contained in entry (b) shall apply to an educational institution other than an
institution providing services by way of pre-school education and education up to higher secondary school
or equivalent.
 Terms used:
1) Educational institution means an institution providing services by way of,-
(i) pre-school education and education up to higher secondary school or equivalent;
(ii) education as a part of a curriculum for obtaining a qualification recognised by any law for the
time being in force;
(iii) education as a part of an approved vocational education course;
2) Approved vocational education course means, -

a) a course run by an industrial training institute or an industrial training centre affiliated to the
National Council for Vocational Training or State Council for Vocational Training offering
courses in designated trades notified under the Apprentices Act, 1961 (52 of 1961); or
b) a Modular Employable Skill Course, approved by the National Council of Vocational Training,
run by a person registered with the Directorate General of Training, Ministry of Skill
Development and Entrepreneurship;
33
Students, Faculty & Staff

Education services,
Transportation services, etc.
Transportation
Students
Catering, MDM by
GOVT Faculty
Security, HKS,
Cleaning GST Staff
Admission/
conduct of EXAM
29) Services provided TO a recognised sports body BY-

(i) an individual as a player, referee, umpire, coach or team manager for participation in a sporting
event organised by a recognized sports body;
(j) another recognised sports body.
 Terms used:
Recognised sports body means –
(i) the Indian Olympic Association;
(ii) Sports Authority of India;
(iii) a national sports federation recognised by the Ministry of Sports and Youth Affairs of the
Central Government, and its affiliate federations;
(iv) national sports promotion organisations recognised by the Ministry of Sports and Youth
Affairs of the Central Government;
(v) the International Olympic Association or a federation recognised by the International
Olympic Association; or
(vi) a federation or a body which regulates a sport at international level and its affiliated
federations or bodies regulating a sport in India;
GST
30) Services provided BY and TO Fédération Internationale de Football Association (FIFA) and its subsidiaries
(9A) directly or indirectly related to any of the events under FIFA U-17 World Cup 2017 to be hosted in India.
Provided that Director (Sports), Ministry of Youth Affairs and Sports certifies that the services are directly
or indirectly related to any of the events under FIFA U17 World Cup 2017.” [N/N- 21/2017- CT (Rate)]
34
31) Services by way of right to admission to the events organised under FIFA U-17 World Cup 2017
(82) [N/N- 25/2017 - CT (Rate)]
32) Services by way of sponsorship of sporting events organised -

(53) (a) by a national sports federation, or its affiliated federations, where the participating teams or
individuals represent any district, State, zone or Country;
(b) by Association of Indian Universities, Inter-University Sports Board, School Games Federation of India,
All India Sports Council for the Deaf, Paralympic Committee of India or Special Olympics Bharat;
(c) by the Central Civil Services Cultural and Sports Board;
(d) as part of national games, by the Indian Olympic Association; or
(e) under the Panchayat Yuva Kreeda Aur Khel Abhiyaan Scheme.
Tournament organized by:

Sponsorship services
 National Sports Fed. Vodafone
 Indian Olympic Asso.
 PYKKA
GST
Advertisement
33) Service by way of access to a road or a bridge on payment of toll charges.

(23)
 What about Security and Collection Agency?
 Taxable
34) Service by way of access to a road or a bridge on payment of annuity. [N/N- 32/2017- CT (Rate)]
(23A)
35) Services by the Reserve Bank of India.

(26)
Services
Services provided BY RBI Services provided TO RBI

Example: Example:
i) Advisor to GOVT i) Security Services
ii) Issues Currency ii) Internet Services
iii) Regulates Banking System iii) Renting of Immovable
iv) Monitor Monetary Policy Property
GST GST
35
36) Services BY a foreign diplomatic mission located in India.

(59)
Services
Services provided BY Foreign Services provided TO Foreign

Diplomatic mission, Embassy, High Diplomatic mission, Embassy, High
Commission, etc Commission, etc
Example: Example:
i) VISA i) Security Services
ii) Immigration/ Emigration ii) Internet Services
iii) Renting of Immovable Property
GST
GST
37) Services by the Central Government, State Government, Union territory or local authority excluding the
(6) following services—
i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and
agency services provided to a person other than the Central Government, State Government, Union
territory;
ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;
iii) transport of goods or passengers; or
iv) any service, other than services covered under entries (a) to (c) above, provided to BUSINESS
ENTITIES.
[Covered with RCM]
38) Services by a [Central Government, State Government, Union territory, local authority or governmental
(5) authority] by way of any activity in relation to any function entrusted to a Panchayat under article 243G of
the Constitution.
39) Services provided by the Central Government, State Government, Union territory or local authority to a
(7) business entity with an aggregate turnover of up to twenty lakh rupees (ten lakh rupees in case of a
special category state) in the preceding financial year.
Explanation.- For the purposes of this entry, it is hereby clarified that the provisions of this entry SHALL
NOT be applicable to-
(a) services,-
(i) by the Department of Posts by way of speed post, express parcel post, life insurance, and
agency services provided to a person other than the Central Government, State Government,
Union territory;
(ii) in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;
(iii) of transport of goods or passengers; and
(b) services by way of renting of immovable property.
36
40) Services provided by Central Government, State Government, Union territory or a local authority where
(9) the consideration for such services does not exceed five thousand rupees:
Provided that nothing contained in this entry shall apply to-

(i) services by the Department of Posts by way of speed post, express parcel post, life insurance, and
agency services provided to a person other than the Central Government, State Government, Union
territory;
(ii) services in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;
(iii) transport of goods or passengers:
Provided further that in case where continuous supply of service, as defined in sub-section (33) of section
2 of the Central Goods and Services Tax Act, 2017, is provided by the Central Government, State
Government, Union territory or a local authority, the exemption shall apply only where the consideration
charged for such service does not exceed five thousand rupees in a financial year.
41) Services provided by the Central Government, State Government, Union territory or local authority by
(47) way of-
i) registration required under any law for the time being in force;
ii) testing, calibration, safety check or certification relating to protection or safety of workers,
consumers or public at large, including fire license, required under any law for the time being in force.
 Understanding:
 Registration fees paid for registration under GST Act – EXEMPTED
 Testing under
 BIS (Bureau of Indian Standards) – Eg- Gold
 ISI (Indian Standards Institute) – Eg – Helmets
 FSSAI (Food Safety and Standards Authority of India) – Eg - Maggie
 AGMARK - Eg – Spices
 Meaning of Calibration:
Calibration is the activity of checking, by comparison with a standard, the accuracy of a measuring
instrument of any type. It may also include adjustment of the instrument to bring it into
alignment with the standard
Eg: Meter at Petrol pumps, Taxi meter, Electricity meter, Water meter etc.
(61) way of issuance of passport, visa, driving licence, birth certificate or death certificate.
(52) way of allowing a business entity to operate as a telecom service provider or use radio frequency
st
spectrum during the period prior to the 1 April, 2016, on payment of licence fee or spectrum user
charges, as the case may be.
 Clarification:
 Whether GST is leviable on spectrum user charges and license fee payable after 1.4.2016 for the
year 2015-16?
 GST is payable on such installments. However, the same have been specifically exempted vide
Exemption Notification.
37
(63) way of assignment of right to use natural resources to an individual farmer for cultivation of plants and
rearing of all life forms of animals, except the rearing of horses, for food, fibre, fuel, raw material or other
similar products.
(64) way of assignment of right to use any natural resource where such right to use was assigned by the
st
Central Government, State Government, Union territory or local authority before the 1 April, 2016:
Provided that the exemption shall apply only to tax payable on one time charge payable, in full upfront
or in installments, for assignment of right to use such natural resource.
 Clarification:
 Whether GST is payable on yearly installments due after 1.4.2016 in respect of spectrum
assigned before 1.4.2016?
 GST is payable on such installments. However, the same have been specifically exempted vide
Exemption Notification.
46) Supply of service by a Government Entity to Central Government, State Government, Union territory,
(65) local authority or any person specified by Central Government, State Government, Union territory or local
authority against consideration received from Central Government, State Government, Union territory or
local authority, in the form of grants.
[N/N- 32/2017- CT (Rate)]
47) Services provided by the Central Government, State Government, Union territory or local authority to
(8) another Central Government, State Government, Union territory or local authority:
Provided that nothing contained in this entry shall apply to services-

(i) by the Department of Posts by way of speed post, express parcel post, life insurance, and agency
services provided to a person other than the Central Government, State Government, Union territory;
(ii) in relation to an aircraft or a vessel, inside or outside the precincts of a port or an airport;
(iii) of transport of goods or passengers.
48) Services provided by the Central Government, State Government, Union territory by way of deputing
(65) officers after office hours or on holidays for inspection or container stuffing or such other duties in relation
to import export cargo on payment of Merchant Overtime charges.
49) Services provided by the Central Government, State Government, Union territory or local authority by way
(62) of tolerating non-performance of a contract for which consideration in the form of fines or liquidated
damages is payable to the Central Government, State Government, Union territory or local authority
under such contract.
50) Service provided by Fair Price Shops to Central Government by way of sale of wheat, rice and coarse grains
(11A) under Public Distribution System(PDS) against consideration in the form of commission or margin. [N/N-
21/2017- CT (Rate)]
51) Service provided by Fair Price Shops to State Governments or Union territories by way of sale of kerosene,
(11B) sugar, edible oil, etc. under Public Distribution System (PDS) against consideration in the form of
commission or margin. [N/N- 21/2017- CT (Rate)]
38
52) Services provided by the Goods and Services Tax Network to the Central Government or State
(51) Governments or Union territories for implementation of Goods and Services Tax.
53) Pure services (excluding works contract service or other composite supplies involving supply of any goods)
(3) provided to the Central Government, State Government or Union territory or local authority or a
Governmental authority by way of any activity in relation to any function entrusted to a Panchayat under
article 243G of the Constitution or in relation to any function entrusted to a Municipality under article
243W of the Constitution.
54) Services by Central Government, State Government, Union territory, local authority or governmental
(4) authority by way of any activity in relation to any function entrusted to a municipality under article 243 W
of the Constitution.
55) Services provided to the Central Government, State Government, Union territory under any insurance
(40) scheme for which total premium is paid by the Central Government, State Government, Union territory.
56) Services provided to the Central Government, State Government, Union territory administration under any
(72) training programme for which total expenditure is borne by the Central Government, State Government,
Union territory administration.
57) Services provided to the Central Government, by way of transport of passengers with or without
(16) accompanied belongings, by air, embarking from or terminating at a regional connectivity scheme
airport, against consideration in the form of viability gap funding:
Provided that nothing contained in this entry shall apply on or after the expiry of a period of one year
from the date of commencement of operations of the regional connectivity scheme airport as notified by
the Ministry of Civil Aviation.
58) Services by the Employees’ State Insurance Corporation to persons governed under the Employees’ State
(30) Insurance Act, 1948 (34 of 1948).
59) Services provided by the Employees Provident Fund Organisation to the persons governed under the
(31) Employees Provident Funds and the Miscellaneous Provisions Act, 1952 (19 of 1952).
60) Services provided by the Insurance Regulatory and Development Authority of India to insurers under the
(32) Insurance Regulatory and Development Authority of India Act, 1999 (41 of 1999).
39
61) Services provided by the Securities and Exchange Board of India set up under the Securities and Exchange
(33) Board of India Act, 1992 (15 of 1992) by way of protecting the interests of investors in securities and to
promote the development of, and to regulate, the securities market.
62) Services by way of collection of contribution under any pension scheme of the State Governments.
(38)
63) Services of leasing of assets (rolling stock assets including wagons, coaches, locos) by the Indian Railways
(43) Finance Corporation to Indian Railways.
64) Services provided by the National Centre for Cold Chain Development under the Ministry of Agriculture,
(58) Cooperation and Farmer’s Welfare by way of cold chain knowledge dissemination.
65) Services by way of giving on hire –

(22) (i) to a state transport undertaking, a motor vehicle meant to carry more than twelve passengers; or
(ii) to a goods transport agency, a means of transportation of goods.
Means of Transport:
Delhi Transport
Corporation GST
[BUSES > 12 passengers]
Giving on HIRE
Goods Transport
Agency (GTA) GST
[TRUCKS]
66) Upfront amount (called as premium, salami, cost, price, development charges or by any other name)
(41) payable in respect of service by way of granting of long term lease of thirty years, or more) of industrial
plots or plots for development of infrastructure for financial business, provided by the State Government
40
Industrial Development Corporations or Undertakings or by any other entity having 50 per cent. or more
ownership of Central Government, State Government, Union territory to the industrial units or the
developers in any industrial or financial business area.”;
[N/N- 32/2017- CT (Rate)]
67) Transmission or distribution of electricity by an electricity transmission or distribution utility.

(25)
 Terms used:
1) Electricity Transmission & Distribution Utility
 Central Electricity Board
 State Electricity Board
 Central Transmission Unit
 State Transmission Unit
 A distribution transmission license under the “Electricity, 2003”
 Any other entity entrusted with such functions by the CG or SG.
2) What if the service provided by Installation of Gensets or similar equipments (solar energy) by
private contractor for distribution of electricity?
Liable to GST
68) Services by way of collection of contribution under the Atal Pension Yojana.
(37)
69) Services of assessing bodies empanelled centrally by the Directorate General of Training, Ministry of Skill
(70) Development and Entrepreneurship by way of assessments under the Skill Development Initiative
Scheme.
70) Services provided by training providers (Project implementation agencies) under Deen Dayal Upadhyaya
(71) Grameen Kaushalya Yojana implemented by the Ministry of Rural Development, Government of India by
way of offering skill or vocational training courses certified by the National Council for Vocational
Training.
71) Services provided by an incubatee up to a total turnover of fifty lakh rupees in a financial year subject to
(44) the following conditions, namely:-
(i) the total turnover had not exceeded fifty lakh rupees during the preceding financial year; and
(ii) a period of three years has not elapsed from the date of entering into an agreement as an incubatee.
 Terms Used:
Incubatee means an entrepreneur located within the premises of a Technology Business Incubator or
Science and Technology Entrepreneurship Park recognised by the National Science and Technology
Entrepreneurship Development Board (NSTEDB) of the Department of Science and Technology,
Government of India and who has entered into an agreement with the Technology Business Incubator
or the Science and Technology Entrepreneurship Park to enable himself to develop and produce hi-
tech and innovative products;
INCUBATEE
GST
TBI/STEP
(Located at Indian prime educational
institute
Example: IIT Delhi, Birla Institute of
Technology)
41
Q1.
Year Ist Year IInd Year III Year IV Year
Turnover 15 lakhs 25 lakhs 35 lakhs 45 lakhs
GST GST GST GST GST on 45 lakhs
Q2.
Year Ist Year IInd Year III Year
Turnover 15 lakhs 65 lakhs 35 lakhs
GST GST On 50 Lakhs = GST GST on 35
On 15 Lakhs = GST lakhs
Q3.
Year Ist Year IInd Year III Year
Turnover 65 lakhs 15 lakhs 35 lakhs
GST On 50 Lakhs = GST GST on 15 GST
On 15 Lakhs = GST lakhs
72) Services provided by way of pure labour contracts of construction, erection, commissioning, installation,
(10) completion, fitting out, repair, maintenance, renovation, or alteration of a civil structure or any other
original works pertaining to the beneficiary-led individual house construction or enhancement under the
Housing for All (Urban) Mission or Pradhan Mantri Awas Yojana.
 Terms used:
Original works means- all new constructions;
i) all types of additions and alterations to abandoned or damaged structures on land that are
required to make them workable;
ii) erection, commissioning or installation of plant, machinery or equipment or structures, whether
pre-fabricated or otherwise;
Beneficiary-led individual
Services by way of repairs house construction /
construction, erection of enhancement
original works
BUILDER GOVT
GST
 Housing for All (Urban)
Mission
 Pradhan Mantri Awas
Yojana (PMAY)
73) Services by way of pure labour contracts of construction, erection, commissioning, or installation of
(11) original works pertaining to a single residential unit otherwise than as a part of a residential complex.
 Terms used:
i) Single residential unit means a self-contained residential unit which is designed for use, wholly or
principally, for residential purposes for one family;
ii) Residential complex means any complex comprising of a building or buildings, having more than
one single residential unit;
42
Service by way of construction of

ORIGINAL WORKS
Single Residential
Labour Contractor
Unit
GST Otherwise than as a part of

residential complex.
74) Services of life insurance business provided by way of annuity under the National Pension System
(28) regulated by the Pension Fund Regulatory and Development Authority of India under the Pension Fund
Regulatory and Development Authority Act, 2013 (23 of 2013).*
Service of Life insurance - ANNUITY

PFRDA under National
Pension System
GST
75) Services of life insurance business provided or agreed to be provided by the Army, Naval and Air Force
(29) Group Insurance Funds to members of the Army, Navy and Air Force, respectively, under the Group
Insurance Schemes of the Central Government.
CG’s Group
Insurance Scheme
Service of Life insurance

Army, Naval & Air
Force Group
Insurance Fund
GST
76) Services of general insurance business provided under following schemes –

(35) (a) Hut Insurance Scheme;
(b) Cattle Insurance under Swarnajaynti Gram Swarozgar Yojna (earlier known as Integrated Rural
Development Programme);
(c) Scheme for Insurance of Tribals;
(d) Janata Personal Accident Policy and Gramin Accident Policy;
(e) Group Personal Accident Policy for Self-Employed Women;
(f) Agricultural Pumpset and Failed Well Insurance;
(g) premia collected on export credit insurance;
(h) [Restructured Weather Based Crop Insurance Scheme (RWCIS)] approved by the Government of India
and implemented by the Ministry of Agriculture;
43
(i) Jan Arogya Bima Policy;

(j) Pradhan Mantri Fasal BimaYojana (PMFBY);
(k) Pilot Scheme on Seed Crop Insurance;
(l) Central Sector Scheme on Cattle Insurance;
(m) Universal Health Insurance Scheme;
(n) Rashtriya Swasthya Bima Yojana;
(o) Coconut Palm Insurance Scheme;
(p) Pradhan Mantri Suraksha BimaYojna;
(q) Niramaya Health Insurance Scheme implemented by the Trust constituted under the provisions of the
National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and
Multiple Disabilities Act, 1999 (44 of 1999).
77) Services of life insurance business provided under following schemes-

(36) (a) Janashree Bima Yojana;
(b) Aam Aadmi Bima Yojana;
(c) Life micro-insurance product as approved by the Insurance Regulatory and Development Authority,
having maximum amount of cover of fifty thousand rupees;
(d) Varishtha Pension BimaYojana;
(e) Pradhan Mantri Jeevan JyotiBimaYojana;
(f) Pradhan Mantri Jan DhanYogana;
(g) Pradhan Mantri Vaya Vandan Yojana.
78) Services by way of transfer of a going concern, as a whole or an independent part thereof.*
(2)
79) Services by an organiser to any person in respect of a business exhibition held outside India.
(52)
80) Service by an unincorporated body or a non- profit entity registered under any law for the time being in
(77) force, to its own members by way of reimbursement of charges or share of contribution –
(a) as a trade union;
(b) for the provision of carrying out any activity which is exempt from the levy of Goods and service Tax;
or
(c) up to an amount of five thousand rupees per month per member for sourcing of goods or services
from a third person for the common use of its members in a housing society or a residential
complex.*
81) Services provided by the Indian Institutes of Management, as per the guidelines of the Central
(67) Government, to their students, by way of the following educational programmes, except Executive
Development Programme:
(a) two year full time Post Graduate Programmes in Management for the Post Graduate Diploma in
Management, to which admissions are made on the basis of Common Admission Test (CAT)
conducted by the Indian Institute of Management;
(b) fellow programme in Management;
(c) five year integrated programme in Management.
44
Executive Development Prog.

GST
(for working people)
Students
i) Two year (+) full time residential PG

programme in MGT (+) for PGDM (+) GST
CAT
ii) Fellow programme in MGT (Post
PGDM- Doctorate)
iii) 5 year integrated programme in
MGT
82) Services by the following persons in respective capacities –

(39) (a) business facilitator or a business correspondent to a banking company with respect to accounts in its
rural area branch;
(b) any person as an intermediary to a business facilitator or a business correspondent with respect to
services mentioned in entry (a); or
(c) business facilitator or a business correspondent to an insurance company in a rural area.
SP
GST
GST
GST
SR
GST
SR/SP
SR/SP
83) Taxable services, provided or to be provided, by a Technology Business Incubator or a Science and
(48) Technology Entrepreneurship Park recognised by the National Science and Technology Entrepreneurship
Development Board of the Department of Science and Technology, Government of India or bio-
incubators recognised by the Biotechnology Industry Research Assistance Council, under the Department
of Biotechnology, Government of India.
45
Incubators
 IIT Delhi (TBI)  Technology Business Incubators (TBI)
 BITS (STEP)  Science and Technology
 Hyderabad BT Park Entrepreneurship Park (STEP)
 Bio Incubators
GST
Incubatee
GST, subject to conditions
Industry
84) Services by way of collecting or providing news by an independent journalist, Press Trust of India or
(49) United News of India.
GST
85) Services of public libraries by way of lending of books, publications or any other knowledge-enhancing
(50) content or material.
86) Services by way of slaughtering of animals.

(56)
46
87) Services by way of public conveniences such as provision of facilities of bathroom, washrooms, lavatories,
(76) urinal or toilets.
88) Supply of services associated with transit cargo to Nepal and Bhutan (landlocked countries).
(9B) [N/N- 30/2017- CT (Rate)]
89) Any services provided by, _

(69) (a) the National Skill Development Corporation set up by the Government of India;
(b) a Sector Skill Council approved by the National Skill Development Corporation;
(c) an assessment agency approved by the Sector Skill Council or the National Skill Development
Corporation;
(d) a training partner approved by the National Skill Development Corporation or the Sector Skill
Council,
in relation to-
i) the National Skill Development Programme implemented by the National Skill Development
Corporation; or
ii) a vocational skill development course under the National Skill Certification and Monetary Reward
Scheme; or
iii) any other Scheme implemented by the National Skill Development Corporation.
 National Skill Development

Corporation (NSDC) Services in relation to:
 Sector Skill Council (SSC)
 Approved assessment agency  National Skill Development
 Approved training partner programme
 Vocational Skill
Development course
 Other Scheme
GST
 Other Exemptions under CGST:
 N/N – 26/2017 [CT (Rate)]:

The Central Government hereby exempts intra state supply of heavy water and nuclear fuels falling in
Chapter 28 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) by the Department of Atomic
Energy to the Nuclear Power Corporation of India Ltd from the whole of the central tax leviable thereon
under section 9 of the Central Good and Services Tax Act, 2017 (12 of 2017).
47
 Besides these above services, N/N-09/ 2017 – Integrated Tax (Rate) has notified the following services which are
exempted from Integrated Tax:
SN Description of Services
1) Services received from a provider of service located in a non taxable territory by –
(a) the Central Government, State Government, Union territory, a local authority, a governmental
authority or an individual in relation to any purpose other than commerce, industry or any other
business or profession;
(b) an entity registered under section 12AA of the Income- tax Act, 1961 for the purposes of providing
charitable activities; or
(c) a person located in a non-taxable territory.
However, the exemption shall not apply to –

i) online information and database access or retrieval services received by persons specified in
entry (a) or entry (b); or
ii) services by way of transportation of goods by a vessel from a place outside India up to the
customs station of clearance in India received by persons specified in the entry.
Clause (a):
Supply of Service
GOVT + LA + GA
Mr. John,
NY, USA Business purpose
Other than
Business purpose
GST
OIDAR OTHERS
GST
GST
48
Clause (b):
Supply of Service
Charitable Institution
Mr. John,
NY, USA
Charitable purpose
Other than
Charitable purpose
GST
OIDAR OTHERS
GST GST
Clause (c):
Supply of Service
XYZ Inc, Mr. Michael,

NY, USA Australia
[Transportation of GOODS + VESSEL Others**

+ to India]* Example:
Example: Mr. Michael, Sydney, Australia is
Mr. Michael, Sydney, Australia planning to construct a property
made certain purchases from USA. in Delhi and avails the interior
Now Mr. Michael wants to supply designing services from XYZ Inc,
the same goods to Mr. X in India New York, USA. In this case,
(directly from USA) and therefore though the property is located in
avails the services of transportation Delhi (ie In TT), XYZ Inc is EXEMPT
of goods by a vessel from XYZ Inc, from GST as both supplier &
USA which takes the consignment recipient are in NTT.
to India. The amount charged is
TAXABLE in India.
XYZ Inc. liable to GST XYZ Inc. NOT liable to GST
49
2) Services received by the RBI, from outside India in relation to management of foreign exchange reserves.
[Specialised financial services received by RBI from global institutions in the course of management of
Foreign Exchange Reserves, e.g., External Asset MGT, Custodial Services, Security lending services, etc
have been exempted.]
Services received for MGT of FER

ABC Inc, USA
Supplier
 External Asset MGT

 Custodial Services
 Security lending services
GST
3) Services provided by a tour operator to a foreign tourist in relation to a tour conducted wholly outside
India.
 Example:
Service provided by an Indian tour operator to a Chinese national for a tour conducted in Sri Lanka
will be exempted.
Mr. Lee, Tourist DESTINATION
GST Mr.X, Tour

Operator
 Other Exemptions under IGST:
 N/N – 18/2017 [IT (Rate)]:

Services imported by unit/developer in SEZ exempt from IGST:
The Central Government hereby exempts services imported by a unit or a developer in the Special
Economic Zone for authorised operations, from the whole of the integrated tax leviable thereon under
section 5 of the Integrated Goods and Service Tax Act, 2017 (13 of 2017).
50
 N/N – 64/2017 [Customs]:

Goods imported by unit/developer in SEZ exempt from IGST:
The Central Government hereby exempts all goods imported by a unit or a developer in the Special
Economic Zone for authorised operations, from the whole of the integrated tax leviable thereon under
sub-section (7) of section 3 of the Customs Tariff Act, 1975 (51 of 1975) read with section 5 of the
Integrated Goods and Service Tax Act, 2017 (13 of 2017).
 N/N – 26/2017 [IT (Rate)]:

The Central Government hereby exempts inter-state supply of heavy water and nuclear fuels falling in
Chapter 28 of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) by the Department of Atomic
Energy to the Nuclear Power Corporation of India Ltd from the whole of the integrated tax leviable
thereon under section 5 of the Integrated Good and Services Tax Act, 2017 (13 of 2017).
51
52
53
Chapter-IV
TIME and VALUE OF SUPPLY
SN Particulars
12 Chapter [IVA] -Time of supply of goods
13 Chapter [IVA] -Time of supply of services
14 Chapter [IVA] - Change in rate of tax in respect of supply of goods or services
15 Chapter [IVB] - Value of taxable supply
Chapter IVA- Time of Supply
 Introduction:
Point of taxation means the point in time when goods have been deemed to be supplied or services have been
deemed to be provided. The point of taxation enables us to determine the rate of tax, value, and due dates for
payment of taxes. Under GST the point of taxation, i.e., the liability to pay CGST / SGST, will arise at the time of
supply as determined for goods and services.
12. Time of supply of goods:
1 Relevance The liability to pay tax on goods shall arise at the time of supply, as determined in accordance with
of TOS the provisions of this section.
2 Time of The time of supply of goods shall be the earlier of the following dates, namely:—
Supply
(a) the date of issue of invoice by the supplier or
Earlier of :
i) Invoice or (b) the last date on which he is required, under sub-section (1) of section 31, to issue the invoice
ii) Payment with respect to the supply; or
received
 Note:- Provisions of Sec. 31(1) relating to issue of invoice in case of supplier of
goods:-
A registered person supplying the taxable goods shall issue the invoice before or at
the time of-
1) removal of goods to the recipient, where supply involves movement of goods;
or
2) delivery of goods or making available thereof to the recipient , in any other
case.
(c) the date on which the supplier receives the payment with respect to the supply:
54
 Sec 12: Time of Supply- Goods:
1) Supply involves movement of goods -- Section 12(2) r/w Section 31(1)(a):
SN Invoice Removal of Delivery of Receipt of Time of

Date Goods Goods Payment Supply
1 26th Oct 20th Oct 26th Oct 26th Oct 20th Oct
2 10th Oct 20th Oct 26th Oct 10th Oct
2) Supply otherwise than involving movement of goods -- Section 12(2) r/w Section 31(1)(b):
SN Invoice Removal of Delivery of Receipt of Time of

Date Goods Goods Payment Supply
1 30th Oct 5th Nov 26th Oct 10th Nov 26th Oct
2 20th Oct 10th Nov 26th Oct 10th Nov 20th Oct
3) Supply involves movement of goods -- Section 12(2) r/w Section 31(4):
SN Invoice Removal of SOA/Payments Receipt of Time of

Date Goods due date Payment Supply
1 1st Nov 15th Oct 5th Nov 1st Nov 1st Nov
2 11th Dec 8th Nov 5th Dec 11th Dec 5th Dec
3 8th Jan 14th Dec 5th Jan 1st Jan 1st Jan
4) Reverse Charge Mechanism – Section 12(3):
SN Invoice Removal of Receipt of Payment Time of

Date Goods Goods By recipient supply
1 31st Oct 31st Oct 20th Nov 30th Nov 20th Nov
2 31st Oct 31st Oct 20th Nov 5th Nov 5th Nov
3 31st Oct 30th Dec 5th Jan 30th Nov
(31st day)
5) Sale on Approval Basis – Section 12(2) r/w Section 31(7):
SN Removal of Issue of Accepted by Receipt of Time of

Goods Invoice Recipient Payment supply
1 1st Nov 25th Nov 15th Nov 25th Nov 15th Nov
2 1st Nov 25th Nov 15th Nov 12th Nov 12th Nov
3 1st Nov 15th May-NY 15th May-NY 2nd May-NY 1st April-NY
(6 months)
55
 NN- 66/2017-Central Tax dated 15-Nov-17:

The registered person who did not opt for the composition levy under section 10 shall pay the
central tax on the outward supply of goods at the time of supply as specified in section 12(2)(a)
i.e. the date of issue of invoice by the supplier or the last date on which he is required, under
section 31(1), to issue the invoice with respect to the supply.
Therefore, no GST is payable on advances received against supply of goods.
PROVIDED that where the supplier of taxable goods receives an amount upto one thousand rupees
in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess
amount shall, at the option of the said supplier, be the date of issue of invoice in respect of such
excess amount.
 Example:
1) Invoice (25-8-2018) = Rs.1,00,000
Payment (28-8-2018) = Rs. 1,20,000
Going by TOS (For Rs.1,00,000)-- Invoice being earlier = Supply being of Rs.1,00,000 (25-8-
2018).
Going by TOS (For Rs.20,000)-- Payment being earlier = Supply being of Rs.20,000 (28-8-
2018).
2) Invoice (25-8-2018) = Rs.1,00,000

Payment (28-8-2018) = Rs. 1,00,600
Going by TOS (For Rs.1,00,000)-- Invoice being earlier = Supply being of Rs.1,00,000 (25-8-
2018).
Going by TOS (For Rs.600)-- Payment being earlier = Supply being of Rs.20,000 (28-8-2018).
OR (For TOS for Rs.600)
Option is given to the supplier to determine the TOS (For Rs.600) – When the invoice is
issued for the same (i.e. Rs.600). Say the invoice is issued for the same is issued on 10-9-
2018. TOS for Rs.600 is 10-9-2018.
Explanation 1.––For the purposes of clauses (a) and (b), “supply” shall be deemed to have been made
to the extent it is covered by the invoice or, as the case may be, the payment.
 Example:
1) Invoice (25-8-2018) = Rs.1,00,000
Payment (28-8-2018) = Rs. 80,000
Going by TOS -- Invoice being earlier = Supply being of Rs.1,00,000 (25-8-18)
2) Payment (25-8-2018) = Rs.80,000

Invoice (28-8-2018) = Rs. 1,00,000
Going by TOS (For Rs.80,000)-- Payment being earlier = Supply being of Rs.80,000 (25-8-
2018)
Going by TOS (For Rs.20,000)-- Invoice being earlier = Supply being of Rs.20,000 (28-8-2018).
Explanation 2.––For the purposes of clause (b), “the date on which the supplier receives the
payment” shall be the date on which the payment is entered in his books of account or the date on
which the payment is credited to his bank account, whichever is earlier.
56
6) Time of Supply for Vouchers - Section 13(4):
SN Issue of vouchers First Service/ Issue of Redemption Last date Time of

Section 13(4) [or Delivery Voucher of voucher For acceptance supply
Section 12(4)] of goods of voucher
1 Voucher issued to a 1st Nov 1st Nov 14th Dec 30th Oct 1st Nov
recipient after
supply
of a service [or
specific goods], for
the same service -
valid for 1 year
2 Voucher issued to a 1st Nov 1st Nov 14th Dec 30th Oct 1st Nov
recipient of
machinery along at
the time of
delivery, for
availing repair
services [or specific
goods] worth Rs.
5,000 - valid for 1
year
3 Voucher issued to a 1st Nov 1st Nov 14th Dec 30th Oct 14th Dec
recipient after
supply of a service,
for any other
services or
goods across India,
-
valid for 1 year)
57
3 RCM In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time
of supply shall be the earliest of the following dates, namely:—
(a) the date of the receipt of goods; or

 Understanding:
The person is said to have received the goods when he accepts the goods delivered to him.
Acceptance of goods to a person CANNOT be considered as received by him. The liability to
pay tax arises only when the person accepts the goods and NOT merely when the goods are
received by him. Thus, date on which person accepts the goods shall be considered as date
of receipt of goods.
Example:
The goods are delivered to the person say Mr.X on 10/07/2018. He examines the quality and
quantity of goods and provides the acceptance note to the supplier on 15/07/2018 .
Therefore the date of receipt of goods can be construed as 15/07/2018.
(b) the date of payment as entered in the books of account of the recipient or the date on which the
payment is debited in his bank account, whichever is earlier; or
(c) the date immediately following thirty days from the date of issue of invoice or any other
st
document, by whatever name called, in lieu thereof by the supplier [31 Day]:
Example:
Say the invoice dated 5/7/2018 raised by supplier Y is received by the recipient X. As per
clause (b) date on which payment is made is one the event for determining the Time of
Supply. Clause (c) provide that, if the payment is not made within 30 days from the date of
th
invoice, the date immediately following the 30 day will be considered as date under clause
(c) . Therefore in the example above, if the invoice is not made by 4/8/2018, the 5/8/2018
will be considered as one of the date under clause (c).
PROVIDED that where it is not possible to determine the time of supply under clause (a) or clause (b)
or clause (c), the time of supply shall be the date of entry in the books of account of the recipient of
supply.
4 Supply of In case of supply of vouchers by a supplier, the time of supply shall be—
Voucher (a) the date of issue of voucher, if the supply is identifiable at that point; or
 Examples:
st
 Mr. A buys vouchers from Levi’s of worth Rs. 1,000/- for a shirt dated December 01 .
st
Mr. A gifts such vouchers to Mr. B who redeems such vouchers on January 31 – Time of
st
supply is the date of issue of vouchers viz., December 01 .
 With each purchase of a large Burger during the Christmas week from Burger Point, one
can buy a voucher for Rs. 20 which will be redeemable till 5 Jan for a small burger.
As the supply against which the voucher will be redeemed is known on the date of the
sale, the time of supply is the date of issue of the voucher.
58
 Some Illustrations:
1) An elevator has to be supplied at site. It is done by sourcing various components from vendors and
assembling the machine at site. The details of the various events are:
17th September Purchase order with advance of Rs. 70,000 is received for goods worth Rs. 12 lakh and
entry duly made in the seller’s books of account
20th October The elevator is assembled, tested at site, and accepted by buyer
23rd October Invoice raised
4th November Balance payment of Rs. 11,30,000 received
Determine the time of supply(ies) in the above scenario.
1) The time of supply of goods to the extent of Rs. 70,000 is 17th September, as this payment was received
before the date of invoice [Section 12(2)(b)]. The time of supply of goods to the extent of the balance amount
of Rs. 11,30,000 is 20th October which is the date on which the goods were made available to the recipient as
per section 31(1)(b), and the invoice should have been issued on this date [Section 12(2)(a)].
2) GAIL supplies gas to XYZ Ltd by a pipeline. Monthly payments are made by the recipient as per contract.
Every quarter, invoice is issued by the supplier supported by a statement of the goods dispatched and
payments made, and the recipient has to pay the differential amount. The details of the various events are:
August 5, September 5, Payments of Rs 3 lakhs made in each month

October 6
October 3 Statement of accounts issued by supplier, with invoice for the quarter July – Sept
October 17 Differential payment of Rs. 56,000 received by supplier for the quarter July –
September as per statement of accounts
Determine the time of supply.
2) As per section 31(4), in the case of continuous supply of goods, the invoice should be issued before or when the
statement of accounts is issued; hence October 3 is the correct invoice date.
Time of supply will be August 5, September 5 respectively for goods valued at Rs. 3 lakh each, as the date of
payment is earlier than the date of invoice. [Invoice is yet to be issued for payment made on October 6].
Time of supply will be October 3 for goods valued at Rs. 3,56,000, as the date of invoice is earlier than the date
of payment.
3) Determine the time of supply from the given information (Reverse Charge Mechanism).
May 4 Supplier invoices goods taxable on reverse charge basis to Roadster & Co. (30 days from the
date of issuance of invoice elapse on June 3)
May 12 Roadster & Co receives the goods
May 30 Roadster & Co makes the payment
3) Here, May 12 will be the time of supply, being the earliest of the three stipulated dates namely, receipt of
goods, date of payment and date immediately following 30 days of issuance of invoice [Section 12(3)]. (Here,
date of invoice is relevant only for calculating thirty days from that date.)
3A) Determine the time of supply from the given information (Reverse Charge Mechanism).
May 4 Supplier invoices goods taxable on reverse charge basis to Tunnel & Co. (30 days from the date
of issuance of invoice elapse on June 3)
June 12 Tunnel & Co receives the goods;
July 3 Tunnel & Co makes the payment
3A) Here, June 4, 31st day from the date of supplier’s invoice, will be the time of supply, being the earliest of the
three stipulated dates namely, receipt of goods, date of payment and date immediately following 30 days of
issuance of invoice [Section 12(3)].
59
(b) the date of redemption of voucher, in all other cases.
 Examples:
 Mr.A buys a voucher for Rs.500 from Shoppers Stop or say Reliance Trends on
st th
December 1 & redeemed the same on 15 Jan .Now at the time of issuance there is no
idea that whether the voucher will used against readymade garments or Shoes or
Cosmetics or Jewellery or gadgets or watches, etc. So here the supply against the
voucher gets unidentifiable and therefore the Time of Supply happens to be the date of
th
redemption of voucher i.e. 15 Jan.
 Sodexo Limited sells food coupons to a company, which gives these to its employees as
part of the agreed perquisites. The coupons can be redeemed for purchase of any item
of food /provisions in the outlets that are part of the program.
As the supply against which the coupon will be redeemed is not known on the date of
the sale of the coupon, the time of supply of the coupon will be the date on which the
employee redeems it against food / provision items of his choice.
5 Residual Where it is not possible to determine the time of supply under the provisions of subsection (2) or
Rule sub-section (3) or sub-section (4), the time of supply shall––
(a) in a case where a periodical return has to be filed, be the date on which such return is to be
filed; or
(b) in any other case, be the date on which the tax is paid.
 Example:
Investigation on XYZ Ltd reveals clandestine removal of goods by a supplier who is not
registered under GST. The supplier voluntarily pays tax during the investigation, to close the
case. The time of supply will be the date on which the tax is paid, as being unregistered, the
supplier is not required to file periodical returns.
6 Interest, The time of supply to the extent it relates to an addition in the value of supply by way of interest, late
late fee or fee or penalty for delayed payment of any consideration shall be the date on which the supplier
penalty receives such addition in value.
TOS - Date  Understanding:
on which The clause (d) of section 15 (2) of the Act specifies that Interest, late fee or penalty or
the supplier delayed payment of any consideration for any supply will be included in the TV.
receives
such In many cases supplier of goods & services specifies the credit period within which the
amount recipient is required to make the payment. In case the recipient makes the payment beyond
stipulated in the invoice, the supplier will charge separate charges.
These charges are mainly in the nature of INTEREST. Sometimes the rate of interest is so
heavy that it looks in the nature of PENALTY.
This section provides the TOS for such payment. The TOS shall be the date on which the
supplier receives the Interest, late fee or penalty. In case the amount is not received, the
tax on the same shall not be payable.
Practically, most of the suppliers raise the Debit Note for Interest, late fee or penalty
payable by the recipient by the recipient. In case where the supplier has waived the recovery
no tax will be payable on the said amount even if the Debit Note for the recovery of the
amount have been accounted for in the BOA. The receipt of payment is essential to attract
levy of tax
60
61
13. Time of supply of services:
 Background:
Section 31(2) of the GST Act provides that a taxable person supplying taxable services shall, before or after the
provision of service but within a period of 30 days, issue a tax invoice from the date of provision of services.
The period of 30 days is specified in Rule 47 under the INVOICE RULES.
Where the supplier of service is INSURER, BANKING COMPANY or a FINANCIAL INSTITUTION, including NBFC,
the period of issuing the invoice is 45 days as against 30 days from the date of supply of service.
1 Relevance The liability to pay tax on services shall arise at the time of supply, as determined in accordance with
of TOS the provisions of this section.
2 Time of The time of supply of services shall be the earliest of the following dates, namely:—
Supply
(a) the date of issue of invoice by the supplier, if the INVOICE IS ISSUED WITH 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 WITH THE PERIOD PRESCRIBED
under sub-section (2) of section 31 or the date of receipt of payment, whichever is earlier; or
(c) the date on which the recipient shows the receipt of services in his books of account, in a case
where the provisions of clause (a) or clause (b) do not apply:
 Understanding:
Inspection shows that XYZ & Co carried out service of cleaning and repairs of tanks in a
Hotel, for which the Hotel showed a payment in cash on 4th April to them against work of
this description. The dates of the work are not clear from the records of XYZ & Co. XYZ & Co
have not issued invoice or entered the payment in their books of account.
PROVIDED that where the supplier of taxable service receives an amount upto one thousand rupees
in excess of the amount indicated in the tax invoice, the time of supply to the extent of such excess
amount shall, at the option of the said supplier, be the date of issue of invoice relating to such
excess amount.
 Understanding:
Vodafone company receives Rs. 10,000 against an invoice of Rs.9,800. The excess amount of
Rs. 200 can be adjusted against the next invoice. The company has the option to take the
date of the next invoice as the time of supply of service in relation to the amount of Rs. 200
received in excess against the earlier invoice.
Explanation.–For the purposes of clauses (a) and (b)––

(i) the supply shall be deemed to have been made to the extent it is covered by the invoice or, as the
case may be, the payment;
(ii) “the date of receipt of payment” shall be the date on which the payment is entered in the books
of account of the supplier or the date on which the payment is credited to his bank account,
whichever is earlier.
62
 Sec 13: Time of Supply- Services:
1) Based on due date for invoicing Section 13(2) r/w Section 31(2):
SN Date of Commencement Completion of Receipt of Time of

Invoice of service service payment Supply
1 26th Dec 20th Oct 16th Nov 28th Jan 16th Nov
2) Reverse Charge Section 13(3):
SN Reverse charge Date of Date of Payment by Entry of Time of

Section 13(3) Invoice completion Recipient receipt of supply
of service services
in recipient's
books
1 ___ 31st Oct 31st Oct 20th Nov 30st Nov 20th Nov
2 ___ 31st Oct 31st Oct 5th Nov 31st Oct 5th Nov
3 ___ 31st Oct 31st Oct 10th Jan 31st Oct 31st Dec
(60 days)
4 Service by 30th Nov 5th Dec 5th Dec

unregistered
person, no
payment made
5 Service received 31st Oct’17 30th Nov’17 5th April’18 31st Mar’18 31st Mar
from associated
enterprise located
outside India
5A Service received 31st Oct’17 30th Nov’17 5th April’18 31st Mar’18 31st Dec’17
from NON-
associated
enterprise located
outside India
63
3 RCM In case of supplies in respect of which tax is paid or liable to be paid on reverse charge basis, the time
[Eg – of supply shall be the earlier of the following dates, namely:
Import of
Service] (a) the date of payment as entered in the books of account of the recipient or the date on which the
payment is debited in his bank account, whichever is earlier; or
(b) the date immediately following sixty days from the date of issue of invoice or any other
st
document, by whatever name called, in lieu thereof by the supplier [61 Day]:
 Understanding:
(Keep in mind that in the above list there is no mention of the Invoice)
Example:
Say a person Mr.X has received the invoice on 15-07-2018 and has made the payment of
invoice of Rs.5 lakhs on 20-08-2018. The TOS would be 20-08-2018. However in case of any
reason he does not pay by 13-09-2018 (within 60 days), then the TOS would be the date
immediately following the date of 60 days i.e. 14-09-2018. Hence, the time of supply would
be 14-09-2018.
PROVIDED that where it is not possible to determine the time of supply under clause (a) or clause
(b), the time of supply shall be the date of entry in the books of account of the recipient of supply:
 Example:
Investigation shows that XYZ & Co renders GTA services to PQR Ltd. It was agreed between
the parties that the consideration shall be settled in cash & there will be no invoice issued
for the same services. But the date when the PQR Ltd (the recipient) records the same in its
th
books is 17 Aug which happens to be time of supply for the same service & the PQR Ltd
(the recipient) will dispense the liability of GST accordingly as the GTA services attracts RCM.
PROVIDED FURTHER that in case of supply by associated enterprises, where the supplier of service is
located outside India, the time of supply shall be:
 the date of entry in the BOA of the recipient of supply or

 the date of payment,
whichever is earlier.
4 Voucher for In case of supply of vouchers by a supplier, the time of supply shall be––
supply of
services (a) the date of issue of voucher, if the supply is identifiable at that point; or
 Example:
 Say Restaurant XYZ has issued a voucher of Rs.1 lakh to Mr.A on 10-07-2018. The
voucher may encashed or used by the Mr.A till August 2018, but the TOS would be 10-
07-2018 as the voucher is identifiable with particular supply.
 The EXCELLENT Hospitality Services enters into agreement with XYZ Marketing Ltd by
which XYZ Marketing Ltd. markets The EXCELLENT Hospitality Services for stay in hotel
rooms and sells coupons / vouchers redeemable for a discount against stay in the hotel.
As the supply against which the voucher will be redeemed is identifiable, the time of
64
1) Determine the time of supply from the following particulars:
6th May Booking of Meeting hall, sum agreed Rs. 25,000, advance of Rs. 3,000 received
15th Sept Meeting held in hall
17th Sept Invoice issued for Rs. 25,000, indicating balance of Rs. 22,000 payable
3rd Nov Balance payment of Rs. 22,000 received
1) As per section 31 read with rule 47 of CGST Rules, the tax invoice is to be issued within 30 days of supply of
service. In the given case, the invoice is issued within the prescribed time limit. As per section 13(2)(b), in a case
where the invoice is issued within the prescribed time, the time of supply of service is the date of issue of
invoice or receipt of payment, whichever is earlier.
Therefore, the time of supply of service to the extent of Rs. 3,000 is 6th May as the date of payment of Rs. 3000
is earlier than the date of issue of invoice. The time of supply of service to the extent of the balance Rs. 22,000
is 17th September which is the date of issue of invoice.
1A) Determine the time of supply from the following particulars:
6th May Booking of Meeting hall, sum agreed Rs. 25,000, advance of Rs. 3,000 received
15th Sept Meeting held in hall
27th Oct Invoice issued for Rs. 25,000, indicating balance of Rs. 22,000 payable
3rd Nov Balance payment of Rs. 22,000 received
1A) As per section 31 read with rule 47 of CGST Rules, the tax invoice is to be issued within 30 days of supply of
service. In the given case, the invoice is NOT issued within the prescribed time limit. As per section 13(2)(b), in a
case where the invoice is not issued within the prescribed time, the time of supply of service is the date of
provision of service or receipt of payment, whichever is earlier.
Therefore, the time of supply of service to the extent of Rs. 3,000 is 6th May as the date of payment of Rs. 3000
is earlier than the date of provision of service. The time of supply of service to the extent of the balance Rs.
22,000 is 15th September which is the date of provision of service.
2) Determine the time of supply from the given information (Reverse charge Mechanism)
4th May The supplier of service issues invoice for service provided.
15th June Payment made to the supplier of service
2) Here, June 15 will be the time of supply, being the earliest of the two stipulated dates namely, date of payment
and date immediately following 60 days since issue of invoice.
2A) Determine the time of supply from the given information (Reverse charge Mechanism)
4th May The supplier of service issues invoice for service provided.
24th Aug Payment made to the supplier of service
2A) Here, July 4 will be the time of supply, being the earliest of the two stipulated dates namely, date of payment
and date immediately following 60 days since issue of invoice.
65
supply of the voucher will be its date of issue.
(b) the date of redemption of voucher, in all other cases.

 Example:
Say XYZ Ltd is into airline business and owns a hotel as well which provides restaurant
services as well as accommodation services. The airlines issues a voucher of Rs.50,000 which
can be encashed by the passenger either by purchasing a ticket or for having food in the
restaurant or for staying in the hotel. Here the voucher is NOT identifiable with any
particular supply of service. Hence, the date of encashment or availment will be Time of
Supply.
5 Residual Where it is not possible to determine the time of supply under the provisions of subsection (2) or
Rule sub-section (3) or sub-section (4), the time of supply shall––
(a) in a case where a periodical return has to be filed, be the date on which such return is to be
filed; or
(b) in any other case, be the date on which the tax is paid.
 Understanding:
(Same in case of GOODS)
6 Interest, The time of supply to the extent it relates to an addition in the value of supply by way of interest, late
late fee or fee or penalty for delayed payment of any consideration shall be the date on which the supplier
penalty receives such addition in value.
 Understanding:
(Same in case of GOODS)
66
 FAQs (Modified):
Q. Time of supply of services under reverse charge mechanism where the supplier of service is
associated enterprises?
A. In case of associated enterprises located within India, the time of supply in terms of Section 13(3)
shall be the earliest of the following:
(a) Date of payment as per books of accounts; or
(b) Date on which payment is debited in the bank account of the supplier; or
(c) Sixty days from the date of issuing invoice by the supplier; or
Where associated enterprises is located outside India, the time of supply shall be the earliest of the
following dates:
(a) Date of entry in the books of accounts of the recipient; or
(b) Date of payment.
Particulars Non-associated Associated

Enterprises Enterprises
Date on which payment is December 15, 2017 December 15, 2017
entered in BOA
Date on which payment is December 17, 2017 December 17, 2017
debited to bank account
Date of issuance of invoice December 10, 2017 December 10, 2017
Sixty days from the date of February 09, 2018 February 09, 2018
issuing invoice
Date of entry in the books of December 10, 2017 December 10, 2017
accounts of the recipient
Time of supply December 15, 2017 December 10, 2017
67
 Change in rate of tax in respect of supply of goods or services:
Supplied Issue of Invoice Receipt of Time of Supply Rate of Tax

payment
Before After After Date of invoice or Receipt of New
payment, whichever is Earlier
Before Before After Date of issue of Invoice Old
Before After Before Date of receipt of payment Old
After Before After Date of receipt of payment New
After Before Before Date of invoice or Receipt of Old
payment, whichever is Earlier
After After Before Date of issue of Invoice New
 TEST:
Q. If 95% of the work is complete before the change in rate of tax but invoice can be raised only after
completion of supply then what is the rate of tax to be applied?
Ans. Assuming the supply is completed after the change in rate of tax, new rate will apply.
Understanding of PROVISO:
Say, Change of rate: 1st April 2018
Particulars Scenario 1 Scenario 1

Bookish Entry 30th March 2018 30th March 2018
Rate change 1st April 2018 1st April 2018
Date of Credit 20th April 2018 4th April 2018
Date of Payment 20th April 2018 30th March 2018
Example:
Some examples assuming change in rate of tax in respect of supply of services is w.e.f. 01.07.2018 (old rate 15%
& new rate is 18%):
Cases Date of Date of Date of Time of Rate of

providing invoice by Payment by Supply tax
service supplier recipient
1 12.05.2018 12.05.2018 15.07.2018 12.05.2018 15%
2 20.07.2018 12.06.2018 26.07.2018 26.07.2018 18%
3 10.06.2018 15.06.2018 18.07.2018 15.06.2018 15%
4 26.07.2018 08.06.2018 11.06.2018 08.06.2018 15%
5 21.06.2018 21.07.2018 12.06.2018 12.06.2018 15%
6 28.07.2018 28.07.2018 12.06.2018 28.07.2018 18%
68
14. Change in rate of tax in respect of supply of goods or services:
1 Notwithstanding anything contained in section 12 or section 13, the time of supply, where there is a
change in the rate of tax in respect of goods or services or both, shall be determined in the
following manner, namely: ––
If the service (a) in case the goods or services or both have been supplied before the change in rate of tax, –
has been
provided (i) where the invoice for the same has been issued and the payment is also received after
before the the change in rate of tax, the time of supply shall be the date of receipt of payment or the
change in date of issue of invoice, whichever is earlier; or
ROT
(ii) where the invoice has been issued prior to the change in rate of tax but payment is
received after the change in rate of tax, the time of supply shall be the date of issue of
invoice; or
(iii) where the payment has been received before the change in rate of tax, but the invoice
for the same is issued after the change in rate of tax, the time of supply shall be the date of
receipt of payment;
If the service
has been (b) in case the goods or services or both have been supplied after the change in rate of tax,––
provided
after the (i) where the payment is received after the change in rate of tax but the invoice has been
change in issued prior to the change in rate of tax, the time of supply shall be the date of receipt of
ROT payment; or
(ii) where the invoice has been issued and payment is received before the change in rate
of tax, the time of supply shall be the date of receipt of payment or date of issue of
invoice, whichever is earlier; or
(iii) where the invoice has been issued after the change in rate of tax but the payment is
received before the change in rate of tax, the time of supply shall be the date of issue of
invoice:
PROVIDED that the date of receipt of payment shall be the date of credit in the bank account if
such credit in the bank account is after four working days from the date of change in the rate of tax.
Explanation.–For the purposes of this section, “the date of receipt of payment” shall be the date on
which the payment is entered in the books of account of the supplier or the date on which the
payment is credited to his bank account, whichever is earlier.
69
 Date of receipt of payment:
i) General Part:
Within 4 WD
Entry in BOA Change in ROT Date of Credit

28-3-2018 01-04-2018 03-04-2018
(Cheque received)
Date of payment receipt

28-03-2018
ia) General Part:
Within 4 WD
Change in ROT Entry in BOA Date of Credit

01-04-2018 02-04-2018 03-04-2018
(Cheque received)

02-04-2018
ii) Special Part:
More than 4 WD
Entry in BOA Change in ROT Date of Credit

28-3-2018 01-04-2018 10-04-2018
(Cheque received)

10-04-2018
iia) Special Part:

More than 4 WD
Change in ROT Entry in BOA Date of Credit

01-04-2018 02-04-2018 10-04-2018
(Cheque received)

10-04-2018
70
 Associated Enterprises:
“Associated enterprises” shall have the same meaning as assigned to it in section 92A of the Income-tax Act,
1961;
Section 92A:
(1) For the purposes of this section and sections 92, 92B, 92C, 92D, 92E and 92F, “associated enterprise”, in
relation to another enterprise, means an enterprise—
(a) which participates, directly or indirectly, or through one or more intermediaries, in the management or
control or capital of the other enterprise; or
(b) in respect of which one or more persons who participate, directly or indirectly, or through one or more
intermediaries, in its management or control or capital, are the same persons who participate, directly or
indirectly, or through one or more intermediaries, in the management or control or capital of the other
enterprise.
(2) [For the purposes of sub-section (1), two enterprises shall be deemed to be associated enterprises if, at any
time during the previous year,—]
(a) one enterprise holds, directly or indirectly, shares carrying not less than twenty-six per cent of the voting
power in the other enterprise; or
(b) any person or enterprise holds, directly or indirectly, shares carrying not less than twenty-six per cent of
the voting power in each of such enterprises; or
(c) a loan advanced by one enterprise to the other enterprise constitutes not less than fifty-one per cent of the
book value of the total assets of the other enterprise; or
(d) one enterprise guarantees not less than ten per cent of the total borrowings of the other enterprise; or
(e) more than half of the board of directors or members of the governing board, or one or more executive
directors or executive members of the governing board of one enterprise, are appointed by the other
enterprise; or
(f) more than half of the directors or members of the governing board, or one or more of the executive directors
or members of the governing board, of each of the two enterprises are appointed by the same person or
persons; or
(g) the manufacture or processing of goods or articles or business carried out by one enterprise is wholly
dependent on the use of know-how, patents, copyrights, trade-marks, licences, franchises or any other
business or commercial rights of similar nature, or any data, documentation, drawing or specification
relating to any patent, invention, model, design, secret formula or process, of which the other enterprise is
the owner or in respect of which the other enterprise has exclusive rights; or
(h) ninety per cent or more of the raw materials and consumables required for the manufacture or processing of
goods or articles carried out by one enterprise, are supplied by the other enterprise, or by persons specified
by the other enterprise, and the prices and other conditions relating to the supply are influenced by such
other enterprise; or
(i) the goods or articles manufactured or processed by one enterprise, are sold to the other enterprise or to
persons specified by the other enterprise, and the prices and other conditions relating thereto are
influenced by such other enterprise; or
(j) where one enterprise is controlled by an individual, the other enterprise is also controlled by such individual
or his relative or jointly by such individual and relative of such individual; or
(k) where one enterprise is controlled by a Hindu undivided family, the other enterprise is controlled by a
member of such Hindu undivided family or by a relative of a member of such Hindu undivided family or
jointly by such member and his relative; or
(l) where one enterprise is a firm, association of persons or body of individuals, the other enterprise holds not
less than ten per cent interest in such firm, association of persons or body of individuals; or
71
(m) there exists between the two enterprises, any relationship of mutual interest, as may be prescribed.
 Illustration to TOS:
th
 During the course of search, it was found that 20 LED Television sets were despatched on 15 Sept 2017 but no
invoice was made and the same was not entered in the books of accounts. There was no evidence of receipt of
payment. What is the time of supply of 20 LED Television sets?
 The time of supply of goods shall be the earlier of the following dates, namely:—
(a) the date of issue of invoice by the supplier or

(b) 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
(c) the date on which the supplier receives the payment with respect to the supply:
In this case, since the invoice has not been issued, the TOS will be the last date on which the invoice is required
to be issued or the date of receipt of payment, whichever is earlier.
th
The invoice for supply of goods must be issued on or before the despatch of goods, i.e., 15 Sept 2017. Since,
th
there is no evidence of receipt of payment, TOS of goods shall be the 15 Sept 2017, i.e., the date when the
invoice should have been issued.
72
 Illustration 1 (Supply of goods under Normal charge):
SN Date of Date of Last date of Date of receipt of payment TOS Reasons

Removal Invoice invoice as per In Supplier’s Credit in
Sec 31(1) book Bank A/C
1)
2)
3)
4)
5)
 Illustration 2 (Receipt of goods under Reverse Charge Mechanism):

st
SN Date of Date of issue 31 day after Date of TOS Comments
receipt of of invoice by invoice Payment in Payment
goods the supplier books of debited in
recipient Bank A/C
1)
2)
3)
4)
 Illustration 3 (Supply of services under Normal Charge):
SN Date of Date of issue Last date to issue Date on which payment is TOS Comments
completion of invoice invoice as per received
of service Section 31(2)
1)
2)
3)
4)
73
 Illustration 4 (Receipt of services under Reverse Charge Mechanism):

st
SN Date of Date of issue 61 day after Date of TOS Comments
provision of invoice by invoice Payment in Payment
of services the supplier books of debited in
by the recipient Bank A/C
supplier
1)
2)
3)
4)
74
 Illustration 5 (Continuous supply of goods):
SN Date of Date of receipt of payment Date of Last date TOS Reasons

removal of Statement of Successive issue of of issue of
goods Account Payment invoice invoice as
per Sec
31(4)
1)
2)
3)
4)
5)
 Illustration 6 ( Sec-13: Time of Supply – Continuous supply of services):
SN Date of Date of Invoice issued Date of receipt of payment TOS Reasons

provision of payment due In Supplier’s Credit in
services as per book Bank A/C
contract
1)
2)
3)
4)
5)
75
76
 Basic Introduction:
REGISTRATION
WHO? WHERE? WHEN?
EVERY PERSON IN EVERY STATE FROM WITHIN 30 DAYS

COVERED UNDER WHERE HE MAKES
Chapter REGISTRATION. TAXABLE SUPPLY
 Registration- When?
30 days
10 lacs/20 lacs
REGISTRATION
 Example on REGISTRATION:
ABC Ltd
Assam (SCS) Uttar Pradesh

(Manufacture of RG)
Lucknow, Kanpur,
(Trading of Laptops) (Manufacturing of
Plastic toys)
77
Chapter VI
REGISTRATION
 Introduction:
 In any tax system, registration is the most fundamental requirement for identification of tax payers
ensuring tax compliance in the economy.
 Registration of any business entity under the GST Law implies obtaining a unique number from the
concerned tax authorities for the purpose of collecting tax on behalf of the government and to avail Input
Tax Credit for the taxes on his inward supplies.
 Without registration, a person can neither collect tax from his customers nor claim any input Tax Credit
of tax paid by him.
 Persons liable to register:

Section 22 of the CGST Act, 2017 specifies the list of persons liable for registration and section 24 of the CGST
Act, 2017 lists categories of persons who are required specifically to take registration even if they are not
covered under section 22 of the Act. Following is a summarised list:
 FAQs:
SN Particulars
Q. Can a person without GST registration claim ITC and collect tax?
A. No. A person without GST registration can neither collect GST from his customers nor claim any input tax
credit of GST paid by him.
S No Particulars
22 Persons liable for registration
23 Persons not liable for registration
24 Compulsory registration in certain cases
25 Procedure for registration
26 Deemed registration
27 Special provisions relating to casual taxable person and non-resident taxable person
28 Amendment of registration
29 Cancellation of registration
30 Revocation of cancellation of registration
22. Persons liable for registration:
1 Threshold Every supplier shall be liable to be registered under this Act in the State or Union territory,
to get other than special category States, from where he makes a taxable supply of goods or services
registered or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees:
PROVIDED that that where such person makes taxable supplies of goods or services or both
from any of the special category States, he shall be liable to be registered if his aggregate
turnover in a financial year exceeds ten lakh rupees.
 Example:
Mr. P has a furniture business in the State of Uttar Pradesh. Value of supplies of business
did not exceed Rs. 18 lakhs in the financial Year. Mr. A does not have any other business
establishment in any of the other States. He will not be liable to seek registration under GST.
78
In next year, Mr. A opens another branch in the State of Uttarakhand (one of the category
States for which prescribed threshold limit is Rs. 10 lakh). As the branch was opened at the
end of the financial year, he could achieve turnover of one lakh rupees only in that State.
Along with the supplies of Rs. 18 lakhs from the business in Uttar Pradesh.
Since value of supplies in Uttar Pradesh and Uttarakhand put together exceeds ten lakh
rupees, he will be liable to seek registration in both the States.
 Conclusion:
A person, who makes supplies from both Special Category States and Other States shall
become liable to registration if his aggregate turnover in a financial year exceeds ten lakh
rupees.
2 Existing Every person who, on the day immediately preceding the appointed day, is registered or holds a
assessees licence under an existing law, shall be liable to be registered under this Act with effect from the
on the AD appointed day.
[Assessees under Central Excise Act, Service Tax Law, VAT Law, etc]
3 Fresh  Where a business carried on by a taxable person registered under this Act is transferred,
Registration whether on account of succession or otherwise, to another person as a going concern,
in case of
Transfer or  the transferee or the successor, as the case may be, shall be liable to be registered with
Succession effect from the date of such transfer or succession.
[Registration is not transferable]
4 Amalgamati  Notwithstanding anything contained in sub-sections (1) and (3), in a case of transfer
on/ pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case may
Demerger be, de-merger of two or more COMPANIES pursuant to an order of a High Court, Tribunal or
by an order otherwise,
of High
Court  the transferee (COMPANY) shall be liable to be registered, with effect from the date on
which the Registrar of Companies issues a certificate of incorporation giving effect to such
order of the High Court or Tribunal.
Ex Explanation Explanation – For the purposes of this section,––

p (i) the expression “aggregate turnover” shall include all supplies made by the taxable person,
whether on his own account or made on behalf of all his principals;
(ii) the supply of goods, after completion of job-work, by a registered job worker shall be treated
as the supply of goods by the principal referred to in section 143, and the value of such goods
shall not be included in the aggregate turnover of the registered job worker;
SN Particulars Amount (Rs.)

Taxable supplies XXX
(+) Exempt supplies XXX
(+) Exports of goods and/or services XXX
(+) Inter-State supplies XXX
Sub Total XXX [A]
(+) Supply by Agent on behalf of the principal XXX [B]
(+) Supply from the premises of the registered J/W XXX [C]
AGGREGATE TURNOVER XXX
(iii) the expression “special category states” shall mean the States as specified in sub-clause (g)
of clause (4) of Article 279A of the Constitution.
79
SN States SN States
1) Arunachal Pradesh 7) Tripura
2) Assam 8) Sikkim
3) Manipur 9) Himachal Pradesh
4) Meghalaya 10) Jammu & Kashmir
5) Mizoram 11) Uttarakhand
6) Nagaland
23. Persons not liable for registration:
23 Exemption (1) The following persons shall not be liable to registration, namely:–
from
registration (a) 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;
 Example:
ABC Ltd supplying only alcoholic liquor for human consumption only will not be
required to take registration under GST law.
(b) an agriculturist, to the extent of supply of produce out of cultivation of land.
(2) The Government may, on the recommendations of the Council, by notification, specify the
category of persons who may be exempted from obtaining registration under this Act.
(Notification came)
Note:-
1) Notification No. 5/2017-CT dated 19-06-20417 w.e.f. 22-06-2017:
In exercise of the powers conferred by Section 23(2) of the Central Goods and Services
Tax Act, 2017 (12 of 2017), the Central Government has specified that
Persons who are only engaged in making supplies of taxable goods or services or both,
the total tax on which is liable to be paid on reverse charge basis by the recipient of such
goods or services or both under section 9(3) of the CGST Act as the category of persons
EXEMPTED from obtaining registration under the Act.
2) Central Government vide Notification No. 65/2017-Central Tax, dt. 15-11-2017 w.e.f 15th
November 2017 has amended section 23(2), of CGST Act, 2017. the Central Government,
on the recommendations of the Council, hereby specifies the persons making supplies of
services, other than supplies specified under subsection (5) of section 9 of the said Act
through an electronic commerce operator who is required to collect tax at source under
section 52 of the said Act, and having an aggregate turnover, to be computed on all
India basis, not exceeding an amount of twenty lakh rupees in a financial year, as the
category of persons exempted from obtaining registration under the said Act,
Provided that the aggregate value of such supplies, to be computed on all India basis,
should not exceed an amount of ten lakh rupees in case of “special category States” as
specified in sub-clause (g) of clause (4) of article 279A of the Constitution, other than the
State of Jammu and Kashmir.
80
 Example:
Illustration 1 – Registration liability : Mr. A of U.P. has effected following supplies within the State of U.P. You
are required to determine whether he is required to obtain registration under GST law.
Particulars Rs.
(1) Intra-State/inter-state supply of good agricultural produce grown out of cultivation of 12,00,000
land by family members
(2) Intra-State supply of goods which are wholly exempt from GST u/s 11 of CGST Act, 2017 8,00,000
(3) Intra-State supply of goods chargeable with GST @ 5% 6,50,000
Solution: Computation of Aggregate value of taxable supplies :

Particulars Rs.
(1) Intra-State/ Inter-state supply of goods agricultural produce grown out of cultivation of Nil
land by family members
(2) Intra-State supply of goods which are wholly exempt from GST u/s of CGST Act, 2017 8,00,000
Total Value of supplies 14,50,000
Illustration 2 – Registration requirement : From the following information you are required to determine
whether Ashish Ltd incorporated in U.P. is liable to be registered under GST Law if the company has effected
following supplies within the state of Uttar Pradesh.
Particulars Rs.
(3) Intra-State supply of goods chargeable with Nil rate 8,50,000
Solution: Computation of Aggregate turnover :

Particulars Rs.
(1) Intra-State supply of goods chargeable with GST @ 5% [W 6,51,000
[WN-2]
(3) Intra-State supply of goods chargeable with Nil rate of GST [WN-3] 8,50,000
Total Value of supplies 20,01,000
Thus, in this case since aggregate turnover of the company exceeds Rs. 20 lakhs, it is liable to get itself
registered under GST Law.
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24. Compulsory registration in certain cases:
 Some Definitions:
1 Casual A person who occasionally undertakes transactions involving supply of goods or services or both
Taxable in the course or furtherance of business, whether as principal, agent or in any other capacity, in a
Person State or a Union territory where he has no fixed place of business is termed as a casual taxable
person. Such persons if making taxable supply of goods or services or both comes under the
ambit of taxable persons
(Like: Architects, Makeup artists, Fashion designers, Trainers, Musicians, etc)
Example:
A Jeweller who has a showroom in Mumbai participates in exhibition-cum-sale in Delhi would fall
under Casual Taxable Person in Delhi.
2 Non- Non-resident taxable person:

Resident “Non-resident taxable person” means any person who occasionally undertakes transactions
Taxable involving supply of goods or services or both, whether as principal or agent or in any other
person capacity, but who has no fixed place of business or residence in India;
3 Input Input Service Distributor:

Service “Input Service Distributor” means an office of the supplier of goods or services or both which
Distributor receives tax invoices issued under section 31 towards
 the receipt of input services and

 issues a prescribed document for the purposes of distributing the credit of central tax,
State tax, integrated tax or Union territory tax paid on the said services to a supplier of
taxable goods or services or both
 having the same Permanent Account Number as that of the said office;
 Example:
i) Advertisement services
ii) Accounting services
iii) Audit services
iv) Software license & maintenance services
v) Security services
 FAQs:
Q. Why the concept of ISD only in respect of Services??

A. Concept of input service distributer is applicable only for services. It is not required
for goods that are procured centrally and distributed for use in various registrations
as credit would automatically get distributed when goods are stock transferred to
other registrations for actual use on payment of GST.
Q. Will ISD be required to be separately registered other than the existing taxpayer
registration?
A. Yes. The ISD registration is for one office of the taxpayer which will be different from
the normal registration irrespective of the threshold.
Q. Can a taxpayer have multiple ISDs?

A. Yes. Different offices of a taxpayer can apply for ISD registration.
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24. Compulsory registration in certain cases:
24 Mandatory Notwithstanding anything contained in sub-section (1) of section 22, the following categories of
Registration persons shall be required to be registered under this Act, ––
(i) persons making any inter-State taxable supply;

 Generally:
The transaction in which the location of supplier & place of supply are in two different
states is in the nature of inter-state supply.(Detailed discussion)
 Note:
Notification No.10/2017-GSR1260(E)-IGST:
Based on the recommendations of the GST council in 22nd meeting on 6th October
2017, Government has notified that person making inter-state supply of services
having turnover not exceeding threshold limit of 20 lakh in the financial year is not
required to get registered. This exemption is to a person making inter-state supply of
services only.
Also provided that the aggregate value of such supplies, to be computed on all India
basis, should not exceed an amount of ten lakh rupees in case of “special category
States” as specified in sub-clause (g) of clause (4) of article 279A of the Constitution,
other than the State of Jammu and Kashmir.
Notification No.8/2017-IGST:
Supplier = Making inter-state supplies of handicraft goods
Such supplier shall be exempt from taking registration
(ii) casual taxable persons making taxable supply; (Refer Definition)
Notification No.32/2017-IGST:
Supplier = Casual taxable person making taxable supplies of handicraft goods
Such supplier shall be exempt from taking registration
(iii) persons who are required to pay tax under reverse charge; (Refer notified RCM
transactions)
(iv) person who are required to pay tax under sub-section (5) of section 9
[Electronic commerce operator];
(v) non resident taxable persons making taxable supply; (Refer Definition)
(vi) persons who are required to deduct tax under section 51, whether or not separately
registered under this Act; (Refer Section 51)
 Section 51:
1 Who will Notwithstanding anything to the contrary contained in this Act,
deduct the Government may mandate,––
TDS?
(a) a department or establishment of the CG or SG; or
(b) local authority; or
(c) Governmental agencies; or
(d) such persons or category of persons as may be
notified by the Government on the recommendations
of the Council,
83
(hereafter in this section referred to as “the deductor”), to

deduct tax at the rate of one per cent from the payment made
or credited to the supplier (hereafter in this section referred
to as “the deductee”) of taxable goods or services or both,
where the total value of such supply, under a contract,
exceeds two lakh and fifty thousand rupees:
(vii) persons who make taxable supply of goods or services or both on behalf of other taxable
persons whether as an agent or otherwise;
 Example:
Clearing & Forwarding agent receives the goods on behalf of the principal. He makes
supply of goods to the customer as an agent of the principal. The agent can make
registration in his name as agent will be liable to obtain registration.
(viii) Input Service Distributor, whether or not separately registered under this Act;
(Refer Definition)
(ix) 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; [Refer Section 23(2) above]
 Section 52:
1 When to Notwithstanding anything to the contrary contained in this Act,
Collect  every electronic commerce operator (hereafter in this
TCS section referred to as the “operator”),
 not being an agent,
 shall collect an amount calculated at such rate not

exceeding 1 %., as may be notified on the
recommendations of the Council,
 of the net value of taxable supplies made through it

by other suppliers where the
 consideration with respect to such supplies is to be

collected by the operator.
 Example:
ABC stationers supplying stationery through Flipkart. Flipkart requires to deduct
TCS & pay the rest of the amount to ABC Stationers.
(x) every electronic commerce operator;
(xi) every person supplying online information and data base access or retrieval services from
a place outside India to a person in India, other than a registered person [Importation of
Service]; and
(xii) such other person or class of persons as may be notified by the Government on the
recommendations of the Council.
84
ABC Ltd
Punjab Uttar Pradesh

(Manufacture of RG)
Lucknow, Kanpur,
Plastic toys)
85
 Example:
Ashish Ltd. of lucknow, Uttar Pradesh has effected intra-State supplies of taxable goods amounting Rs.
9,00,000 till 31-12-2017. On 01-01-2018 it has effected inter-State supply of taxable goods amounting Rs.
1,20,000. Ashish Ltd. is of the opinion that it is not required to get registered under GST law since its
aggregate turnover is not likely to exceed Rs. 20,00,000 during financial year 2017-18. As a consultant of the
company you are required to advise the company relating to registration requirements.
Solution:
The opinion of Ashish Ltd is not correct. As per provisions of Section 25 of CGST Act, 2017, every person who
is liable to be registered under section 22 or section 24 shall apply for registration in every such State of Union
territory in which he is so liable within 30 days from the date on which he becomes liable to registration, in
such manner and subject to such conditions as may be prescribed. Thus, Ashish Ltd. is required to obtain
registration upto 31-01-2018.
25. Procedure for registration:
1 If liable to Every person who is liable to be registered under section 22 or section 24 shall apply for
get registration in every such State or Union territory in which he is so liable within thirty days from
registered- the date on which he becomes liable to registration, in such manner and subject to such
apply within conditions as may be prescribed:
30 days
PROVIDED that a casual taxable person or a non-resident taxable person shall apply for
registration at least five days prior to the commencement of business.
CTP and
NRTP atleast EXPLANATION - Every person who makes a supply from the territorial waters of India shall
5 days prior obtain registration in the coastal State or Union territory where the nearest point of the
to COB appropriate base line is located.
 Understanding #1:
st
If a person is liable to be registered on 1 Sept 2018 and he has applied for registration on
14 Sept 2018, the effective date of registration will be 1st Sept 2018. However, if the
th
person has applied for registration subsequent to 30 days from the date when he is liable
to be registered, the effective date would be the date of grant of registration. Thus, in our
example, if the person has applied for registration after 30-9-2018, say on 15-11-2018,
th
and is granted certificate of registration on 20 Nov 2018, the effective date of
th
registration will be the date on which the registration is granted, i.e., say 20 Nov ‘18.
2 State wise A person seeking registration under this Act shall be granted a single registration in a State or
registration Union territory:
Multiple PROVIDED that a person having multiple business verticals in a State or Union territory MAY
registration? (optional) be granted a separate registration for each business vertical, subject to such
conditions as may be prescribed.
 Rule 8 (VERY IMP):

A person having a unit(s) in a Special Economic Zone or being a Special Economic Zone
developer shall make a separate application for registration as a business vertical distinct
from his other units located outside the Special Economic Zone.
3 Voluntary A person, though not liable to be registered under section 22 or section 24 may get himself
registration registered voluntarily, and all provisions of this Act, as are applicable to a registered person,
shall apply to such person.
86
4 Distinct A person who has obtained or is required to obtain more than one registration, whether in one
persons-1 State or Union territory or more than one State or Union territory shall, in respect of each such
registration, be treated as distinct persons for the purposes of this Act.
5 Distinct Where a person who has obtained or is required to obtain registration in a State or Union
persons-2 territory in respect of an establishment, has an establishment in another State or Union
territory, then such establishments shall be treated as establishments of distinct persons for the
purposes of this Act.
6 PAN is Every person shall have a Permanent Account Number issued under the Income-tax Act, 1961 in
mandatory order to be eligible for grant of registration:
PROVIDED that a person required to deduct tax under section 51 may have, in lieu of a
Permanent Account Number, a Tax Deduction and Collection Account Number issued under the
said Act in order to be eligible for grant of registration.
Imp Note: However, the provisions of TDS/TCS have been postponed till March 31, 2018 as per
decisions taken in GST Council 22nd meeting on 6-10-17.
7 NRTP- other Notwithstanding anything contained in sub-section (6), a non-resident taxable person may be
documents granted registration under sub-section (1) on the basis of such other documents as may be
prescribed.
8 Failing to Where a person who is liable to be registered under this Act fails to obtain registration, the
registration, proper officer may, without prejudice to any action which may be taken under this Act or under
PO may any other law for the time being in force, proceed to register such person in such manner as
proceed for may be prescribed.
registration
(self)
9 Unique Notwithstanding anything contained in sub-section (1),––
Identity
Number (a) any specialised agency of the United Nations Organisation or any Multilateral Financial
(UIN) Institution and Organisation notified under the United Nations (Privileges and Immunities) Act,
1947, Consulate or Embassy of foreign countries; and
(b) any other person or class of persons, as may be notified by the Commissioner, shall be
granted a Unique Identity Number in such manner and for such purposes, including refund of
taxes on the notified supplies of goods or services or both received by them, as may be
prescribed.
 FAQs:
Q. Is it necessary for the foreign embassy’s to get registration under GST Law?
A. All UN bodies, Consulate or Embassy of foreign countries and any other class of
persons, so notified, would be required to obtain a unique identification number
(UIN) from the GST portal. This UIN will be needed for claiming refund of taxes
paid by them and for any other purpose as may be prescribed in the GST Rules.
Q. What is the responsibility of the taxable person supplying to UN bodies?

A. The taxable supplier supplying to these organizations is expected to mention the
UIN on the invoices and treat such supplies as supplies to another registered
person (B2B) and the supplier will upload the invoices of the same.
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10 Registration The registration or the Unique Identity Number shall be granted or rejected after due
or UIN shall verification in such manner and within such period as may be prescribed.
be granted
or rejected (Means initially the registration or the UIN is granted provisionally)
after due
verification
11 COR A certificate of registration shall be issued in such form and with effect from such date as may
be prescribed.
12 Granting of A registration or a Unique Identity Number shall be deemed to have been granted after the
registration expiry of the period prescribed under sub-section (10), if no deficiency has been communicated
to the applicant within that period.
 Example 1:
Ashish Ltd. has two manufacturing units located in Uttar Pradesh. One unit located in Lucknow is engaged in
manufacture of yarn and another unit located in Kanpur is engaged in manufacture of fabric. Can separate
registration be granted for its two units though located in same state?
Ans.
According to Section 25(2) of CGST Act, 2017, 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. In this case both the units are suppling different goods, thus falls under separate business
verticals, hence will be granted separate registration.
 Example 2:
Ashish Ltd. has two manufacturing units located in Uttar Pradesh. One unit located in Lucknow is engaged in
manufacture of yarn and another unit located in Noida (SEZ) is engaged in manufacture of fabric. Can the
taxable person comply with its GST requirements with a single registration in the state of UP?
Ans.
Under GST, one registration per state is required. However, since in this case one of the two units of Ashish
Limited is located in SEZ, it will make a separate application for registration as a business vertical distinct from
a unit located outside SEZ.
26. Deemed registration:
1 Approval in The grant of registration or the Unique Identity Number under the State Goods and Services Tax
one Act Act or the Union Territory Goods and Services Tax Act shall be deemed to be a grant of
deemed to registration or the Unique Identity Number under this Act subject to the condition that the
be in the application for registration or the Unique Identity Number has not been rejected under this Act
other Act within the time specified in sub-section (10) of section 25.
2 Rejection in Notwithstanding anything contained in sub-section (10) of section 25, any rejection of
one Act application for registration or the Unique Identity Number under the State Goods and Services
deemed to Tax Act or the Union Territory Goods and Services Tax Actshall be deemed to be a rejection of
be in the application for registration under this Act.
other Act
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27. Special provisions relating to casual taxable person and non-resident taxable person:
1 Validity for The certificate of registration issued to a casual taxable person or a non-resident taxable person
COR for CTP shall be valid for the period specified in the application for registration or ninety days from the
or NRTP effective date of registration, whichever is earlier and such person shall make taxable supplies
only after the issuance of the certificate of registration:
Ext.= 90(+90 PROVIDED that the proper officer may, on sufficient cause being shown by the said taxable
days) person, extend the said period of ninety days by a further period not exceeding ninety days.
2 Advance A casual taxable person or a non-resident taxable person shall, at the time of submission of
deposit of application for registration under sub-section (1) of section 25, make an advance deposit of
tax equal to taxin an amount equivalent to the estimated tax liabilityof such person for the period for which
estimated the registration is sought:
tax liability
PROVIDED that where any extension of time is sought under sub-section (1), such taxable
person shall deposit an additional amount of tax equivalent to the estimated tax liability of
such person for the period for which the extension is sought
3 Rejection/ Any rejection or approval of amendments under the State Goods and Services Tax Act or the
Approval Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a
under rejection or approval under this Act.
SGST/UTGST
= Rejection/
Approval
under CGST
 FAQs:
Q. Whether the Registration granted to any person is permanent?

A. Yes, except for non-resident and casual taxable person, the registration Certificate once granted is
permanent unless surrendered, cancelled, suspended or revoked.
28. Amendment of registration:
1 Intimation Every registered person and a person to whom a Unique Identity Number has been
of assigned shall inform the proper officer of any changes in the information furnished at the time of
changes registration or subsequent thereto, in such form and manner and within such period as may be
prescribed.
2 Approval The proper officer may, on the basis of information furnished under sub-section (1) or as
for ascertained by him, approve or reject amendments in the registration particulars in such manner
changes is and within such period as may be prescribed:
required
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.
[Principle of Natural justice]
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3 Approval 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 rejection or approval under this Act.
29. Cancellation of registration:
1 Circumstances The proper officer may, either on his own motion or on an application filed by the registered
that leads to person or by his legal heirs, in case of death of such person, cancel the registration, in such
Cancellation manner and within such period as may be prescribed, having regard to the circumstances
of registration where,–
(Normal
Cases) (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; or
(b) there is any change in the constitution of the business; or
(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.
2 Circumstances The proper officer may cancel the registration of a person from such date, including any
that leads to retrospective date, as he may deem fit, where,–
Cancellation
of registration (a) a registered person has contravened such provisions of the Act or the rules made
(PO itself) thereunder as may be prescribed; or
(b) a person paying tax under section 10 has not furnished returns for three consecutive tax
periods; or
(c) any registered person, other than a person specified in clause (b), has not furnished
returns for a continuous period of six months; or
(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; or
(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.
3 Cancellation The cancellation of registration under this section shall not affect the liability of the person to
shall not pay tax and other dues under this Act or to discharge any obligation under this Act or the rules
waive the made thereunder for any period prior to the date of cancellation whether or not such tax and
liability to pay other dues are determined before or after the date of cancellation.
tax
4 Cancellation The cancellation of registration under the State Goods and Services Tax Act or the Union
under one law Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a
deemed to be cancellation of registration under this Act.
cancellation
under the
other law
5 Reversal of Every registered person whose registration is cancelled shall pay an amount, by way of debit
Credit in the electronic credit ledger or electronic cash ledger, equivalent to the credit of input tax in
respect of
90
-Stock  inputs held in stock and
 inputs contained in semi-finished or finished goods held in stock or capital goods or plant
and machinery on the day immediately preceding the date of such cancellation
or
the output tax payableon such goods,
whichever is higher, calculated in such manner as may be prescribed:
-Cap Goods PROVIDED that in case of capital goods or plant and machinery, the taxable person shall pay
an amount equal to the input tax credit taken on the said capital goods or plant and
machinery, reduced by such percentage points as may be prescribed
or
the tax on the transaction value of such capital goods or plant and machinery under section
15, whichever is higher.
6 Reference to The amount payable under sub-section (5) shall be calculated in such manner as may be
Sub-sec (7) prescribed.
 FAQ:
Q. Situations which can cause cancellation of GST registration.

A. Following changes can lead to cancellation of registration
i) The business is closed down.
ii) The business is sold.
iii) The constitution of business has changed.
iv) Taxpayer is no longer liable to be registered.
v) Taxpayer has contravened the provisions of the Act and rules made thereunder.
vi) Composition scheme holder has not filed returns for three consecutive tax periods.
vii) A taxpayer has not filed returns for a continuous period of six months.
viii) A person who has taken voluntary registration has not commenced business within 6 months of
registration.
Q. Cancellation of voluntary registration??

A. The proper officer may cancel such registration if the person who has voluntarily registered, doesn’t commence
the business within 6 months for the date of registration.
The registered person himself may apply for cancellation of registration only after the expiry of 1 year from the
grant of registration. (Reference Rules)
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30. Revocation of cancellation of registration:
1 Cancellation Subject to such conditions as may be prescribed, any registered person, whose registration is
by PO on his cancelled by the proper officer on his own motion,
own motion
may apply to such officer for revocation of cancellation of the registration in the prescribed
manner within thirty days from the date of service of the cancellation order.
2 PO may The proper officer may, in such manner and within such period as may be prescribed, by order,
either either
revoke or
reject the  revoke cancellation of the registration or
application
for  reject the application:
revocation
PROVIDED that the application for revocation of cancellation of registration shall not be
rejected unless the applicant has been given an opportunity of being heard.
3 Revocation The revocation of cancellation of registration under the State Goods and Services Tax Act or
of the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a
cancellation revocation of cancellation of registration under this Act.
is one law
deemed to
be in the
other law
 Structure of Registration Number:
The taxpayer will be allotted a State wise PAN based 15 digit Goods and / or servicesTaxpayer Unique
Identification Number (GSTIN). The various digits in the GSTIN will denote the following:-
State Entity Check

PAN Blank
Code Code digit
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
The first two digits represent the State in the Country where such registration is allowed. Asan illustration in
terms of the Indian Census 2011 the unique two digit code of “09” has beenallotted for the State of Uttar
Pradesh while “27” has been allotted for the State ofMaharashtra, so on and so forth.The second set of 10
digits would be the Permanent Account Number (PAN) allotted by theIncome tax department for each Legal
entity.
The 13th digit would be alpha-numeric (1-9 and then A-Z) and would be assigned depending upon the number
of Registrations a legal entity (having the same PAN Number) has within theState. To illustrate, a legal entity
with single registration within the State would have “1” as its 13th digit of GSTIN. If the same legal entity goes
for a second registration for a second business vertical in the same State, the 13th digit of GSTIN assigned to
this second entity would be “2‟. This way 35 business verticals of the same legal entity can be registered
within a State.The 14th digit of GSTIN would be kept BLANK for future use. The 15th Digit will be the
checkdigit.
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 FAQ’s- Registration:
Q. What is advantage of taking registration in GST?

A. Registration under Goods and Service Tax (GST) regime will confer following advantages to the business:
• Legally recognized as supplier of goods or services.
• Proper accounting of taxes paid on the input goods or services which can be utilized for payment of GST due
on supply of goods or services or both by the business.
• Legally authorized to collect tax from his purchasers and pass on the credit of the taxes paid on the goods or
services supplied to purchasers or recipients.
• Getting eligible to avail various other benefits and privileges rendered under the GST laws.
Q. Can a person without GST registration claim ITC and collect tax?
A. No, a person without GST registration can neither collect GST from his customers nor can claim any input tax
credit of GST paid by him.
Q. What will be the effective date of registration?

A. 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 on which he became liable 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 a person 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.
Q. Who are the persons liable to take a Registration under the Model GST Law?
A. As per Section 22 of the CGST/SGST Act 2017, every supplier (including his agent) who makes a taxable supply
i.e. supply of goods and / or services which are leviable to tax under GST law, and his aggregate turn over in a
financial year exceeds the threshold limit of twenty lakh rupees shall be liable to register himself in the State or
the Union territory of Delhi or Puducherry from where he makes the taxable supply.
In case of eleven special category states (as mentioned in Art.279A(4)(g) of the Constitution of India), this
threshold limit for registration liability is ten lakh rupees.
Besides, Section 24 of the Act mentions certain categories of suppliers, who shall be liable to take registration
even if their aggregate turnover is below the said threshold limit of 20 lakh rupees.
On the other hand, as per Section 23 of the Act, an agriculturist in respect of supply of his agricultural produce;
as also any person exclusively making supply of non-taxable or wholly exempted goods and/or services under
GST law will not be liable for registration.(Notification inserted)
Q. What is aggregate turnover?
A. As per section 2(6) of the CGST/SGST Act “aggregate turnover” includes the aggregate value of:
(i) all taxable supplies,
(ii) all exempt supplies,
(iii) exports of goods and/or service, and,
(iv) all inter-state supplies
93
of a person having the same PAN.
The above shall be computed on all India basis and excludes taxes charged under the CGST Act, SGST Act, UTGST
Act, and the IGST Act. Aggregate turnover shall include all supplies made by the Taxable person, whether on his
own account or made on behalf of all his principals.
Aggregate turnover does not include value of supplies on which tax is levied on reverse charge basis, and
value of inward supplies. (Clarification)
The value of goods after completion of job work is not includible in the turnover of the job-worker. It will be
treated as supply of goods by the principal and will accordingly be includible in the turnover of the Principal.
Q. Which are the cases in which registration is compulsory?

A. As per Section 24 of the CGST/SGST Act, the following categories of persons shall be required to be registered
compulsorily irrespective of the threshold limit:
i) persons making any inter-State taxable supply;
ii) casual taxable persons;
iii) persons who are required to pay tax under reverse charge;
iv) electronic commerce operators required to pay tax under sub-section (5) of section 9;
v) non-resident taxable persons;
vi) persons who are required to deduct tax under section 51;
vii) persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent
or otherwise;
viii) Input service distributor (whether or not separately registered under the Act)
ix) persons who are required to collect tax under section 52;
x) every electronic commerce operator
xi) every person supplying online information and data base retrieval services from a place outside India to a
person in India, other than a registered person; (SRS) and,
xii) such other person or class of persons as may be notified by the Central Government or a State Government
on the recommendations of the Council.
Q. What is the time limit for taking a Registration under GST?

A. A person should take a Registration, within thirty days from the date on which he becomes liable to registration,
in such manner and subject to such conditions as is prescribed under the Registration Rules.
A Casual Taxable person and a non-resident taxable person should however apply for registration at least 5
days prior to commencement of business.
Q. If a person is operating in different states, with the same PAN number, whether he can operate with a single
Registration?
A. No. Every person who is liable to take a Registration will have to get registered separately for each of the States
where he has a business operation and is liable to pay GST in terms of Sub-section (1) of Section 22 of the
CGST/SGST Act.
Q. Whether a person having multiple business verticals in a state can obtain for different registrations?
A. Yes. In terms of the proviso to Sub-Section (2) of Section 25, a person having multiple business verticals in a State
may obtain a separate registration for each business vertical, subject to such conditions as may be prescribed.
Q. Is there a provision for a person to get himself voluntarily registered though he may not be liable to pay GST?
A. Yes. In terms of Sub-section (3) of Section 25, a person, though not liable to be registered under Section 22 may
94
get himself registered voluntarily, and all provisions of this Act, as are applicable to a registered taxable person,
shall apply to such person.
Q. Is possession of a Permanent Account Number (PAN) mandatory for obtaining a Registration?

A. Yes. As per Section 25(6) of the CGST/SGST Act every person shall have a Permanent Account Number issued
under the Income Tax Act,1961 (43 of 1961) in order to be eligible for grant of registration.
However as per the proviso to the aforesaid section 25(6), a person required to deduct tax under Section 51,
may have, in lieu of a PAN, a Tax Deduction and Collection Account Number issued under the said Income Tax
Act, in order to be eligible for grant of registration.
Also, as per Section 25(7) PAN is not mandatory for a non-resident taxable person who may be granted
registration on the basis of any other document as maybe prescribed.
Q. Whether the Department through the proper officer, can suo-moto proceed to register of a Person under this
Act?
A. Yes. In terms of sub-section (8) of Section 25, where a person who is liable to be registered under this Act fails to
obtain registration, the proper officer may, without prejudice to any action which may be taken under this Act,
or under any other law for the time being in force, proceed to register such person in the manner as is prescribed
in the Registration rules.
Q. Whether the proper officer can reject an Application for Registration?

A. Yes. In terms of sub-section 10 of section 25 of the CGST/SGST Act, the proper officer can reject an application
for registration after due verification.
Q. Whether the Registration granted to any person is permanent?

A. Yes, the registration Certificate once granted is permanent unless surrendered, cancelled, suspended or
revoked.
Q. Is it necessary for the UN bodies to get registration under GST?

A. Yes. In terms of Section 25(9) of the CGST/SGST Act, all notified UN bodies, Consulate or Embassy of foreign
countries and any other class of persons so notified would be required to obtain a unique identification number
(UIN) from the GST portal. The structure of the said ID would be uniform across the States in conformity with
GSTIN structure and the same will be common for the Centre and the States.
This UIN will be needed for claiming refund of taxes paid on notified supplies of goods and services received by
them, and for any other purpose as may be notified.
Q. What is the responsibility of the taxable person supplying to UN bodies? (VERY IMP)
A. The taxable supplier supplying to these organizations is expected to mention the UIN on the invoices and treat
such supplies as supplies to another registered person (B2B) and the invoices of the same will be uploaded by
the supplier.
Q. Is it necessary for the Govt. Organization to get registration? (VERY VERY IMP)
A. A unique identification number (ID) would be given by the respective state tax authorities through GST portal to
Government authorities / PSUs not making outwards supplies of GST goods (and thus not liable to obtain GST
registration) but are making inter-state purchases.
Q. What is the validity period of the Registration certificate issued to a Casual Taxable Person and non- Resident
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Taxable person?
A. In terms of Section 27(1) read with proviso thereto, the certificate of registration issued to a “casual taxable
person” or a “non-resident taxable person” shall be valid for a period specified in the application for registration
or ninety days from the effective date of registration, whichever is earlier.
However, the proper officer, at the request of the said taxable person, may extend the validity of the aforesaid
period of ninety days by a further period not exceeding ninety days.
Q. Is there any Advance tax to be paid by a Casual Taxable Person and Non-resident Taxable Person at the time
of obtaining registration under this Special Category?
A. Yes. While a normal taxable person does not have to make any advance deposit of tax to obtain registration, a
casual taxable person or a non-resident taxable person shall, at the time of submission of application for
registration is required, in terms of Section 27(2) read with proviso thereto, 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.
If registration is to be extended beyond the initial period of ninety days, an advance additional amount of tax
equivalent to the estimated tax liability is to be deposited for the period for which the extension beyond ninety
days is being sought.
Q. Whether Amendments to the Registration Certificate is permissible?

A. Yes. In terms of Section 28, the proper officer may, on the basis of such information furnished either by the
registrant or as ascertained by him, approve or reject amendments in the registration particulars within a period
of 15 common working days from the date of receipt of application for amendment.
It is to be noted that permission of the proper officer for making amendments will be required for only certain
core fields of information, whereas for the other fields, the certificate of registration shall stand amended upon
submission of application in the GST common portal.
Q. Whether Cancellation of Registration Certificate is permissible?

A. Yes. Any Registration granted under this Act may be cancelled by the Proper Officer, in circumstances mentioned
in Section 29 of the CGST/SGST Act. The proper officer may, either on his own motion or on an application filed,
in the prescribed manner, by the registered taxable 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.
As per the Registration Rules, an order for cancellation is to be issued within 30 days from the date of receipt of
reply to SCN (in cases where the cancellation is proposed to be carried out suo moto by the proper officer) or
from the date of receipt of application for cancellation (in case where the taxable person/legal heir applies for
such cancellation)
Q. Whether cancellation of Registration under CGST Act means cancellation under SGST Act also?
A. Yes, the cancellation of registration under one Act (say CGST Act) shall be deemed to be a cancellation of
registration under the other Act (i.e. SGST Act). (Section 29 (4))
Q. Can the proper Officer Cancel the Registration on his own?

A. Yes, in certain circumstances specified under section 29(2) of the CGST/SGST Act, the proper officer can cancel
the registration on his own. Such circumstances include contravention of any of the prescribed provisions of the
CGST Act or the rules made there under, not filing return by a composition dealer for three consecutive tax
periods or non-furnishing of returns by a regular taxpayer for a continuous period of six months, and not
commencing business within six months from the date of voluntary registration.
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However, before cancelling the registration, the proper officer has to follow the principles of natural justice.
(proviso to Section 29(2)(e))
Q. What happens when the registration is obtained by means of willful mis statement, fraud or suppression of
facts?
A. In such cases, the registration may be cancelled with retrospective effect by the proper officer. (Section 29(2)(e))
Q. Is there an option to take centralized registration for services under GST Law?
A. No, the tax paper has to take separate registration in every state from where he makes taxable supplies.
Q. If the taxpayer has different business verticals in one state, will he have to obtain separate registration for
each such vertical in the state?
A. No, however the taxpayer has the option to register such separate business verticals independently in terms of
the proviso to Section 25(2) of the CGTST Act, 2017.
Q. Will ISD be required to be separately registered other than the existing tax payer registration? (VERY IMP)
A. Yes, the ISD registration is for one office of the taxpayer which will be different from the normal registration.
Q. What is the process of refusal of registration?

A. 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. As per sub-
section (2) of section 26 of the CGST Act, any rejection of application for registration by one authority (i.e. under
the CGST Act / SGST Act) shall be deemed to be a rejection of application for registration by the other tax
authority (i.e. under the SGST Act / UTGST Act/ CGST Act).
Q. Will there be any communication related to the application disposal?

A. 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. Jurisdictional details would be intimated to the applicant at this stage.
Q. Can the registration certificate be downloaded from the GSTN portal?

A. In case registration is granted; applicant can download the Registration Certificate from the GST common
portal.
Q. Can cancellation of registration order be revoked?

A. Yes, but only in cases where the initial cancellation has been done by the proper officer suo moto, and not on the
request of the taxable person or his legal heirs. A person whose registration has been cancelled suo moto can
apply to the proper officer for revocation of cancellation of registration within 30 days from the date of
communication of the cancellation order. The proper officer may within a period of 30 days from the date of
receipt of application for revocation of cancellation or receipt of information/clarification, either revoke the
cancellation or reject the application for revocation of cancellation of registration.
Q. Does cancellation of registration impose any tax obligations on the person whose registration is so cancelled?
A. Yes, as per Section 29(5) of the CGST/SGST Act, every registered taxable person whose registration is cancelled
shall pay an amount, by way of debit in the electronic cash/credit ledger, equivalent to the credit of input tax
in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock or
capital goods or plant and machinery on the day immediately preceding the date of such cancellation or the
output tax payable on such goods, whichever is higher.
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Chapter VII
TAX INVOICE, CREDIT AND DEBIT NOTES
SN Particulars
31 Tax invoice
32 Prohibition of unauthorised collection of tax
33 Amount of tax to be indicated in tax invoice and other documents
34 Credit and debit notes
 Introduction:
Whenever a transaction takes place, different kinds of documents are issued under different
circumstances, like invoice, credit note, debit note and bill of supply.
 Some Definitions:
>> Continuous “Continuous supply of goods” means a supply of goods which is provided, or agreed to be
supply of provided,
GOODS  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 and
includes supply of such goods as the Government may, subject to such conditions, as it
may, by notification, specify;
 Examples:
i) Supply of gas from IOC to Hindustan Petroleum through a pipeline with a fortnight
billing schedule.
ii) Ready Mix Concrete (RMC) supplied to the Site
iii) Water is supplied
iv) Coal is supplied from mines to the factory.
v) Electricity is goods but it is just that it is outside the ambit of GST.
vi) Supply of say, 10 litre water cans on an as and when required basis with a
frequency of monthly billing under a contract.
>> Continuous “Continuous supply of services” means a supply of services which is

supply of  provided, or agreed to be provided,
SERVICES  continuously or on recurrent basis,
 under a contract, for a period exceeding THREE MONTHS with periodic payment
obligations and
 includes supply of such services as the Government may, subject to such conditions, as
it may, by notification, specify;
 Examples:
i) Annual Maintenance Contract (AMC).
ii) Internal Audit.
iii) Renting of Immovable property,
iv) Licensing of software
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 Other procedural compliances:
Business
Commenced
30 days
Effective date of Date of issue of

registration COR
20-07-18 25-08-18
Revised Invoices
b/w
25-07 to 25-08
 Supplying exempted goods/services

 Under Composition Scheme Bill of Supply
No “Bill of Supply” if the value of supply

is less than Rs.200 (unless asked for).
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31. Tax invoice:
1 Supply of A registered person supplying taxable goods shall, before or at the time of,—
Goods-
When to (a) removal of goods for supply to the recipient, where the supply involves movement of
issue tax goods; or
Invoice??
 Example:
“R Manufacturers”, Delhi supplies goods to “P Electronics, Haryana”. The goods
rd
were removed from its factory in Delhi on 23 September. “R Manufacturers”
needs to issue a tax invoice on or before 23rd September.
(b) delivery of goods or making available thereof to the recipient, in any other case,
 Example:
When an operator of a warehouse who is in possession of some goods decides to
buy the goods on his account, there will be a delivery without any movement of
the goods. Say the operator intimated XYZ Ltd the person to whom goods
rd
belonged about the same on 23 Oct. The XYZ Ltd needs to issue a tax invoice on
rd
or before 23 Oct.
issue a tax invoice showing the description, quantity and value of goods, the tax charged
thereon and such other particulars as may be prescribed:
PROVIDED that the Government may, on the recommendations of the Council, by notification,
specify the categories of goods or supplies in respect of which a tax invoice shall be issued,
within such time and in such manner as may be prescribed.
2 Supply of A registered person supplying taxable services shall, before or after the provision of service
Services- but within a prescribed period [30/45 days – Invoice Rules],
When to
issue tax issue a tax invoice, showing the description, value, tax charged thereon and such other
Invoice?? particulars as may be prescribed:
PROVIDED that the Government may, on the recommendations of the Council, by notification
For certain and subject to such conditions as may be mentioned therein, specify the categories of services
category of in respect of which––
services
other (a) any other document issued in relation to the supply shall be deemed to be a tax
document invoice; or
can also be
Tax invoice (b) tax invoice may not be issued.
3 Revised Notwithstanding anything contained in sub-sections (1) and (2)––

invoice-
Effective (a) a registered person may, within one month from the date of issuance of certificate of
DOR to registration and in such manner as may be prescribed, issue a revised invoice against the
date of invoice already issued during the period beginning with the effective date of registration till
issuance of the date of issuance of certificate of registration to him;
COR
 Example:
st
Ashish Pvt ltd. commenced business of supply of goods on 1 April 2018 in Uttar Pradesh.
th
Its turnover exceeded Rs. 20 lakhs on 5 Sept 2018 and he has applied for registration on
th rd
25 Sept 2018 and granted with registration certificate on 3 October 2018. Further,
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th rd
assumed that the person has issued 10 invoices during the period from 5 Sept 2018 to 3
October 2018.
This sub-section permits such person to issue the revised invoice in place of 10 invoices
th rd
already issued by him during the period 05 Sept 2018 to 3 Oct 2018.
Applicable taxes to be collected in the revised invoices issued.
BOS for
supply of
exempted (b) a registered person may not issue a tax invoice if the value of the goods or services or both
goods or supplied is less than two hundred rupees subject to such conditions and in such manner as
Sec. 9 may be prescribed;
supply
(c) a registered person supplying exempted goods or services or both or paying tax under the
provisions of section 10 shall issue, instead of a tax invoice, a bill of supply containing such
particulars and in such manner as may be prescribed:
PROVIDED that the registered person may not issue a bill of supply if the value of the
goods or services or both supplied is less than two hundred rupees subject to such
conditions and in such manner as may be prescribed;
Advance (d) a registered person shall, on receipt of advance payment with respect to any supply of
payment- goods or services or both, issue a receipt voucher or any other document, containing such
receipt particulars as may be prescribed, evidencing receipt of such payment;
voucher
(e) where, on receipt of advance payment with respect to any supply of goods or services or
Refund both the registered person issues a receipt voucher, but subsequently no supply is made and
voucher no tax invoice is issued in pursuance thereof, the said registered person may issue to the
person who had made the payment, a refund voucher against such payment;
RCM- shall (f) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of
issue an section 9 shall issue an invoice (self invoicing) in respect of goods or services or both received
invoice iro by him from the supplier who is not registered on the date of receipt of goods or services or
receipt of both;
supply
(g) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of
section 9 shall issue a payment voucher at the time of making payment to the supplier.
4 Continuous  In case of continuous supply of goods, where successive statements of accounts or

supply of successive payments are involved,
goods
 the invoice shall be issued before or at the time each such statement is issued or, as the
case may be, each such payment is received.
 Example:
M/S GAIL supplies gas continuously to Company PQR Ltd. The contract for supply
st
provides that the statement of supply shall be made by 1 of the subsequent month
th
and shall be paid by 8 of the subsequent month. Thus in such cases where the supply
is made in the month of August-2018, the statement will be provided by 01-09-2018
and the payment will be made by 08-09-2018. The invoice shall be issued either before
01-09-2018 or on 01-09-2018. If the payment is issued prior to 01-09-2018, the invoice
shall be issued at the time of payment.
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 Other cases:
re
Other Issues
GOODS SERVICES
Goods sent on “SALE Supply of services ceases

ON APPROVAL BASIS” before COMPLETION of
Supply
Before/At the time:

 It becomes known that the At the time when
supply has taken place. Supply ceases.
OR EARLIER
 6 months from the date of
removal
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5 Continuous Subject to the provisions of clause (d) of sub-section (3), in case of continuous supply of
supply of services,––
services
(a) where the due date of payment is ascertainable from the contract, the invoice shall be
issued on or before the due date of payment;
 Understanding:
Say the purchaser of the premise enters into a contract with the builder and the
contract specifies the payment schedule by specifying the particular date. Say the
agreement for purchase of the premise specifies the consideration of Rs.40 Lacs and
the various dates on which the payment is to be made are also to be specified. Hence
the invoice shall be prepared on or before these dates.
(b) where the due date of payment is not ascertainable from the contract, the invoice shall be
issued before or at the time when the supplier of service receives the payment;
 Understanding:
In our example given above, if the due dates are NOT specified, the invoice shall be
issued as and when the payments are received by the builder.
(c) where the payment is linked to the completion of an event, the invoice shall be issued on
or before the date of completion of that event.
 Understanding:
In the above example, if the agreement links the payment on completion of certain
floors. For example, the agreement provides that the 25% is payable on 2nd floor, the
nd
invoice shall be payable on or before the date when the 2 floor is ready.
6 Supply  In a case where the supply of services ceases under a contract before the completion of
ceases the supply,
under the  the invoice shall be issued at the time when the supply ceases and such invoice shall be
contract issued to the extent of the supply made before such cessation.
 FAQs:
Q. I had a contract for supplying manpower for 28 days for Rs. 28,000/-. However, after
10 days, the service has stopped. When shall I raise the invoice?
th
A. Invoice has to be issued at the time when the supply ceased, i.e., on the 10 day. The
invoice shall be for that much of service, which is provided.
7 Goods sent Notwithstanding anything contained in sub-section (1), where the goods being sent or taken on
on approval for sale or return are removed before the supply takes place, the invoice shall be
approval issued
basis  before or at the time of supply or
 six months from the date of removal,
 whichever is earlier.
EXP Tax Invoice Explanation - For the purposes of this section, the expression “tax invoice” shall include any
includes revised invoice issued by the supplier in respect of a supply made earlier.
revised
invoice
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Example 1:
Ashish Enterprises, Delhi, entered into a contract with Rohit Enterprises, Delhi, for supply of parts of a machine
th th
on 10 September, 2017. The spare parts were to be delivered on 30 September, 2017. Ashish Enterprises
th
removed the finished spare parts from its factory on 25 September, 2017. Determine the date by which
invoice must be issued by Ashish Enterprises under GST law.
Ans: As per the provisions of Section 31, invoice shall be issued before or at the time of removal of goods for
supply to the recipient, where the supply involves movement of goods. Accordingly, in the given case, the
th
invoice must be issued on or before 25 September, 2017.
Example 2:
Ashish Ltd. entered into an annual maintenance contract with XYZ Ltd. for financial year 2018-19 for repairs of
th
the machinery fitted in factory of XYZ Ltd. As per the contract, payment for said services had to be made on 4
th
April, 2018. However, XYZ Ltd. made the payment on 14 April, 2018. Since services provided by Ashish Ltd. to
XYZ Ltd. is a continuous supply of services and due date of payment is ascertainable from the contract, Ashish
th
Ltd. had to issue a tax invoice on or before such due date, viz. 4 April, 2018.
Example 3:
th
The aggregate turnover of Ashish Enterprises Ltd. exceeded Rs. 20 lakh on 5 October 2017. It applied for
th nd
registration on 27 October, 2017 and was granted the registration certificate on 2 November, 2017. You
are required to advice Kamlesh Enterprises Ltd. as to what is the effective date of registration in its case. It
has also sought your advice regarding period for issuance of Revised Tax Invoices.
Ans: As per Section 25 read with CGST Rules, 2017, where an applicant submits application for registration
within 30 days from the date he becomes liable for registration, effective date of registration is the date on
th
which he becomes liable to registration. Since, Ashish Enterprises Ltd.’s turnover exceeded Rs. 20 lakh on 5
October, 2017, it became liable to registration on same day. Further, it applied for registration within 30 days
of so becoming liable to registration, the effective date of registration is the date on which it becomes liable to
th
registration, i.e. 5 October, 2017.
Therefore, in the given case, Ashish Enterprises Ltd. has to issue the Revised Tax Invoices in respect of taxable
th
supplies effected during the period starting from the effective date of registration (5 October, 2017) till the
date of issuance of certificate of registration (2nd November, 2017) within 1 month from the date of issuance
nd
of certificate of registration, i.e. on or before 2 December, 2017.
Example 4:
Mr.X is a manufacturer of goods who has opted for composition levy under section 10. It will issue a Bill of
Supply to the buyers of goods and not the tax invoice as it does not collect any tax from the buyers.
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108
 Credit Note & Debit Note- Flowchart:
RTP shall issue
Credit Note Debit Note
 Value of supply or the tax charged  Value of supply or the tax charged
previously is HIGHER THAN correct previously is LESS THAN correct value
value or the correct tax applicable. or the correct tax applicable.
 Goods supplied returned by the
recipient (Sale Return).
 Goods or Services supplied are
deficient.
Credit Note can be issued on or

th
before 30 Sept following end of FY
of supply or date of Annual return,
whichever is EARLIER.
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32. Prohibition of unauthorised collection of tax:
1 Tax not to be A person who is not a registered person shall not collect in respect of any supply of
collected by URD goods or services or both any amount by way of tax under this Act.
2 Tax to be No registered person shall collect tax except in accordance with the provisions of this
collected only as Act or the rules made thereunder.
per the law
33. Amount of tax to be indicated in tax invoice and other documents:
33 Amount of tax to Notwithstanding anything contained in this Act or any other law for the time being in
be indicated in force, where any supply is made for a consideration, every person who is liable to pay
tax invoice and tax for such supply shall prominently indicate in all documents relating to assessment,
other documents tax 40 invoice and other like documents, the amount of tax which shall form part of the
price at which such supply is made.
34. Credit and debit notes:

[Both Credit notes and Debit notes are issued by the supplier only]
1 Issue of Where a tax invoice has been issued for supply of any goods or services or both and the taxable
Credit value or tax charged in that tax invoice is found to exceed
Note
 the taxable value or tax payable in respect of such supply, or
 where the goods supplied are returned by the recipient, or
 where goods or services or both supplied are found to be deficient, the registered
person, who has supplied such goods or services or both,
may issue to the recipient a credit note containing such particulars as may be prescribed.
2 Time limit Any registered person who issues a credit note in relation to a supply of goods or services or
to furnish both shall declare the details of such credit note in the
the details
of Credit  return for the month during which such credit note has been issued but not later than
Note September following the end of the financial year in which such supply was made, or
(leeway  the date of furnishing of the relevant annual return,

with Debit
Notes)  whichever is earlier, and the tax liability shall be adjusted in such manner as may be
prescribed:
PROVIDED that no reduction in output tax liability of the supplier shall be permitted, if the
incidence of tax and interest on such supply has been passed on to any other person.
3 Issue of Where a tax invoice has been issued for supply of any goods or services or both and the taxable
Debit value or tax charged in that tax invoice is found to be less than the taxable value or tax payable
Note in respect of such supply, the registered person, who has supplied such goods or services or
both, shall issue to the recipient a debit note containing such particulars as may be prescribed.
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4 Furnishing Any registered person who issues a debit note in relation to a supply of goods or services or
the details both shall declare the details of such debit note in the return for the month during which such
of Debit debit note has been issued and the tax liability shall be adjusted in such manner as may be
Note prescribed.
Explanation - For the purposes of this Act, the expression “debit note” shall include a
supplementary invoice.
 FAQs:
Q. I had made a supply in April. The party returned the goods in May. How will I declare the credit note to the
tax authorities?
A. The credit note should be declared in return of outward supplies for the month of May.
Q. I had made a supply in April. The party returned the goods in Oct. Will I still be able to issue a Credit Note?
A. A credit note for old supplies can be issued provided annual return for the period during which the supply was
made is not filed. Also, a credit note for any supply can be issued only up to the 30th of September following
the end of the financial year in which the supply was made.
E.g. Assuming that annual return for the year 2017-18 is not filed, if the supply is made on 1st April 2017, a
credit note can be issued up to 30th September 2018. However, if Annual Return is filed for financial year
2017-18 on 30th June 2018, then credit note cannot be issued after that date for the supplies made during
the financial year 2017- 18.
Q. So, Debit note can be issued only for increasing tax liability by the supplier?
A. Yes. ‘Debit notes’ are akin to ‘supplementary invoices’. They are issued by the supplier for recording increase
in taxable value or tax charged in the supply.
Q. I had made a supply in April. In May, the recipient decided to permit increased rate for the supply. How will
I declare the debit note to the tax authorities?
A. Debit note in will have to bed declared in the return of outward supplies for the month of May.
Q. Are there any restrictions on raising debit notes for earlier supplies?
A. No. The debit notes can be raised for earlier supplies without any restriction
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 E-way Bill-A Concept:

Under GST regime, a check will be created by way of e-way bill system. Transporters will have to carry an
electronic waybill or E-Way Bill while carrying goods from one place to another place. All consignors/consignees
and transporters have to be alert on the issue. They should necessarily ensure compliance of the e- way bill
system. A waybill is a physical document that permits movement of goods and since it is obtained electronically
this is therefore named as E-Way bill.
E-way bill is an electronic way bill for movement of goods which is generated on the GSTN Portal. It is
required when a ‘movement’ of goods is of more than Rs 50,000 in value . A registered person can not move
goods without an e-way bill. When an e-way bill is generated a unique e-way bill number (EBN) is allocated
and is available to the supplier, recipient, and the transporter.
Note: E-way bill will also be allowed to be generated or cancelled through SMS. Government of India made
E-WAY RULES as given below:
 Rule 138: E-Way Rules:
SRN Description
1 Every registered person who causes movement of goods of consignment value exceeding fifty thousand
rupees –
i) in relation to a supply; or
ii) for reasons other than supply; or
iii) due to inward supply from an unregistered person,
shall, before commencement of such movement, furnish information relating to the said goods in Part A
of FORM GST EWB-01, electronically, on the common portal.
Provided that where goods are sent by a principal located in one State to a job worker located in any other
State, the e-way bill shall be generated by the principal irrespective of the value of the consignment:
Provided further that where handicraft goods are transported from one State to another by a person who has
been exempted from the requirement of obtaining registration under clauses (i) and (ii) of section 24, the e-
way bill shall be generated by the said person irrespective of the value of the consignment.
2 Where the goods are transported by the registered person as a consignor or the recipient of supply as
the consignee, whether in his own conveyance or a hired one or by railways or by air or by vessel, the said
person or the recipient may generate the e-way bill in FORM GST EWB-01 electronically on the common portal
after furnishing information in Part B of FORM GST EWB-01.
3 W here the e-way bill is not generated under sub-rule (2) and the goods are handed over to a transporter for
transportation by road, the registered person shall furnish the information relating to the transporter in Part B
of FORM GST EWB-01 on the common portal and the e-way bill shall be generated by the transporter on the
said portal on the basis of the information furnished by the registered person in Part A of FORM GST EWB-01:
Provided that the registered person or, as the case may be, the transporter may, at his option, generate and
carry the e-way bill even if the value of the consignment is less than fifty thousand rupees:
Provided further that where the movement is caused by an unregistered person either in his own conveyance
or a hired one or through a transporter, he or the transporter may, at their option, generate the e-way bill in
FORM GST EWB-01 on the common portal in the manner specified in this rule:
Provided also that where the goods are transported for a distance of less than ten kilometres within the State
or 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
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FORM GST EWB-01.
Explanation 1.– For the purposes of this sub-rule, where the goods are supplied by an unregistered supplier to
a recipient who is registered, the movement shall be said to be caused by such recipient if the recipient is
known at the time of commencement of the movement of goods.
Explanation 2.– The information in Part A of FORM GST EWB-01 shall be furnished by the consignor or the
recipient of the supply as consignee where the goods are transported by railways or by air or by vessel.
4 Upon generation of the e-way bill on the common portal, a unique e-way bill number (EBN) shall be made
available to the supplier, the recipient and the transporter on the common portal.
5 Any transporter transferring goods from one conveyance to another in the course of transit shall, before such
transfer and further movement of goods, update the details of conveyance in the e-way bill on the common
portal in FORM GST EWB-01:
Provided that where the goods are transported for a distance of less than ten kilometres within the State or
Union territory from the place of business of the transporter finally to the place of business of the consignee,
the details of conveyance may not be updated in the e-way bill.
6 After e-way bill has been generated in accordance with the provisions of sub-rule (1), where multiple
consignments are intended to be transported in one conveyance, the transporter may indicate the serial
number of e-way bills generated in respect of each such consignment electronically on the common portal and
a consolidated e-way bill in FORM GST EWB-02 maybe generated by him on the said common portal prior to
the movement of goods.
7 Where the consignor or the consignee has not generated FORM GST EWB-01 in accordance with the
provisions of sub-rule (1) and the value of goods carried in the conveyance is more than fifty thousand
rupees, the transporter shall generate FORM GST EWB-01 on the basis of invoice or bill of supply or delivery
challan, as the case may be, and may also generate a consolidated e-way bill in FORM GST EWB-02 on the
common portal prior to the movement of goods.
8 The information furnished in Part A of FORM GST EWB-01 shall be made available to the registered
supplier on the common portal who may utilize the same for furnishing details in FORM GSTR-1:
Provided that when the information has been furnished by an unregistered supplier in FORM GST EWB-01, he
shall be informed electronically, if the mobile number or the email is available.
9 Where an e-way bill has been generated under this rule, but goods are either not transported or are not
transported as per the details furnished in the e-way bill, the e-way bill may be cancelled electronically on the
common portal, either directly or through a Facilitation Centre notified by the Commissioner, within 24 hours
of generation of the eway bill:
Provided that an e-way bill cannot be cancelled if it has been verified in transit in accordance with the
provisions of rule 138B.
10 An e-way bill or a consolidated e-way bill generated under this rule shall be valid for the period as
Specified
SN Distance Validity period

1 Upto 100 km One day
2 For every 100 km or part thereof thereafter One additional day
Provided that the Commissioner may, by notification, extend the validity period of eway bill for certain
categories of goods as may be specified therein:
Provided further that where, under circumstances of an exceptional nature, the goods cannot be
113
transported within the validity period of the e-way bill, the transporter may generate another e-way bill after
updating the details in Part B of FORM GSTEWB-01.
Explanation.– For the purposes of this rule, the “relevant date” shall mean the date on which the e-way bill has
been generated and the period of validity shall be counted from the time at which the e-way bill has been
generated and each day shall be counted as twenty four hours.
11 The details of e-way bill generated under sub-rule (1) shall be made available to the recipient, if
registered, on the common portal, who shall communicate his acceptance or rejection of the consignment
covered by the e- way bill.
12 Where the recipient referred to in sub-rule (11) does not communicate his acceptance or rejection within
seventy two hours of the details being made available to him on the common portal, it shall be deemed that
he has accepted the said details.
13 The e-way bill generated under this rule or under rule 138 of the Goods and Services Tax Rules of any
State shall be valid in every State and Union territory.
14 Notwithstanding anything contained in this rule, no e-way bill is required to be generated –

a) where the goods being transported are specified in
b) where the goods are being transported by a non-motorised conveyance;
c) where the goods are being transported from the port, airport, air cargo complex and land customs station
to an inland container depot or a container freight station for clearance by Customs; and
d) in respect of movement of goods within such areas as are notified under clause (d) of sub-rule (14) of rule
138 of the Goods and Services Tax Rules of the concerned State.
Explanation. - The facility of generation and cancellation of e-way bill may also be made available through
SMS.
 Rule 138A: Documents and devices to be carried by a person-in-charge of a conveyance:
SRN Description
1 The person in charge of a conveyance shall carry—
a) the invoice or bill of supply or delivery challan, as the case may be; and
b) a copy of the e-way bill or the e-way bill number, either physically or mapped to a Radio Frequency
Identification Device embedded on to the conveyance in such manner as may be notified by the
Commissioner.
2 A registered person may obtain an Invoice Reference Number from the common portal by uploading, on the
said portal, a tax invoice issued by him in FORM GST INV-1 and produce the same for verification by the proper
officer in lieu of the tax invoice and such number shall be valid for a period of thirty days from the date of
uploading.
3 Where the registered person uploads the invoice under sub-rule (2), the information in Part A of FORM GST
EWB-01 shall be auto-populated by the common portal on the basis of the information furnished in FORM GST
INV-1.
4 The Commissioner may, by notification, require a class of transporters to obtain a unique Radio Frequency
Identification Device and get the said device embedded on to the conveyance and map the e-way bill to the
Radio Frequency Identification Deviceprior to the movement of goods.
5 Notwithstanding anything contained clause (b) of sub-rule (1), where circumstances so warrant, the
Commissioner may,by notification, require the person-in-charge of the conveyance to carry the following
documents instead of the e-way bill-
a) tax invoice or bill of supply or bill of entry; or
b) a delivery challan, where the goods are transported for reasons other than by way of supply.
114
 Section 138B: Verification of documents and conveyances:
SRN Description
1 The Commissioner or an officer empowered by him in this behalf may authorise the proper officer to intercept
any conveyance to verify the e-way bill or the e-way bill number in physical form for all interState and intra-
State movement of goods.
2 The Commissioner shall get Radio Frequency Identification Devicereaders installed at places where the
verification of movement of goods is required to be carried out and verification of movement of vehicles shall
be done through such device readers where the eway bill has been mapped with the said device.
3 The physical verification of conveyances shall be carried out by the proper officer as authorised by the
Commissioner or an officer empowered by him in this behalf:
Provided that on receipt of specific information on evasion of tax, physical verification of a specific conveyance
can also be carried out by any officer after obtaining necessary approval of the Commissioner or an officer
authorised by him in this behalf.
 Section 138C: Inspection and verification of goods:
SRN Description
1 A summary report of every inspection of goods in transit shall be recorded online by the proper officer in Part
A of FORM GST EWB-03 within twenty four hours of inspectionand the final report in Part B of FORM GST EWB-
03 shall be recorded within three days of such inspection.
2 Where the physical verification of goods being transported on any conveyance has been done during transit at
one place within theState or in any other State, no further physical verification of the said conveyance shall be
carried out again in the State, unless a specific information relating to evasion of tax is made available
subsequently.
 Section 138D:
Facility for uploading information regarding detention of vehicle.-Where a vehicle has been intercepted and
detained for a period exceeding thirty minutes, the transporter may upload the said information in FORM GST
EWB-04 on the common portal.
115
116
Retention of BOA:
1)
17 18 19 20 21 22 23 24 25
Last date of Expiry of 72

filing AR months
(31-12-2018) (31-12-2024)
2)
17 18 19 20 21 22 23 24 26
25
Last date of Disposal of 1 year from disposal

filing AR Appeal of Appeal
(31-12-2018) (30-06-2024) (29-06-2025)
Expiry of 72
Appeal filed iro months
FY 2017-18 (31-12-2024)
(31-12-2018)
LATER
117
Chapter VIII
ACCOUNTS and RECORDS
[Annual return is to be filed on or before 31st December of the following Financial Year]
[Eg: For FY 2017-18 – Due date for Annual Return is 31st Dec 2018]
SN Particulars
35 Accounts and other records
36 Period of retention of accounts
35. Accounts and other records:
1 Maintenance Every registered person shall keep and maintain, at his principal place of business, as
of records mentioned in the certificate of registration, a true and correct account of—
(a) production or manufacture of goods;

(b) inward and outward supply of goods or services or both;
(c) stock of goods;
(d) input tax credit availed;
(e) output tax payable and paid; and
(f) such other particulars as may be prescribed:
PROVIDED that where more than one place of business is specified in the certificate of
registration, the accounts relating to EACH place of business shall be kept at such places of
business:
PROVIDED FURTHER that the registered person may keep and maintain such accounts and
other particulars in electronic form in such manner as may be prescribed.
 Example:
Say the company has 3 place of business. One among 3 is principal place of business
and rest two are additional places of business. Is the company required to maintain the
records for all three places of business at principal place of business?
Ans. No
2 Maintenance  Every owner or operator of warehouse or godown or any other place used for storage
of records by of goods and
the owner or
operator of  every transporter,
warehouse
irrespective of whether he is a registered person or not, shall maintain records of the
consigner, consignee and other relevant details of the goods in such manner as may be
prescribed.
3 Additional The Commissioner may notify a class of taxable persons to maintain additional accounts or
Accounts for documents for such purpose as may be specified therein.
the notified
persons
4 Not in a Where the Commissioner considers that any class of taxable persons is not in a position to
position to keep and maintain accounts in accordance with the provisions of this section, he may, for
maintain reasons to be recorded in writing, permit such class of taxable persons to maintain accounts
accounts in such manner as may be prescribed.
118
2)a)
17 18 19 20 21 22 23 24 25
Last date of 1 year from disposal

filing AR Disposal of
Appeal of Appeal
(31-12-2018) (24-05-2024)
(25-05-2023)
Appeal filed iro Expiry of 72

FY 2017-18 months
(31-12-2018) (31-12-2024)
LATER
119
5 Audit of Every registered person whose turnover during a financial year exceeds the prescribed limit
Accounts and shall get his accounts audited by a chartered accountant or a cost accountant and shall
Reconciliation submit a copy of the audited annual accounts, the reconciliation statement under sub-
Statements section (2) of section 44 and such other documents in such form and manner as may be
prescribed.
6 Fails to Subject to the provisions of clause (h) of sub-section (5) of section 17, where the registered
account for person fails to account for the goods or services or both in accordance with the provisions of
the supply of sub-section (1), the proper officer shall determine the amount of tax payable on the goods
the goods & or services or both that are not accounted for, as if such goods or services or both had been
services- PO supplied by such person and the provisions of section 73 or section 74, as the case may be,
to the best of shall, mutatis mutandis, apply for determination of such tax.
his judgement
 FAQs:
Q. In case of more than one place of business, the records are required to be maintained only at principal place
of business?
A. No, in case of additional places of business, the accounts relating to each place of business shall be kept at such
places of business concerned.
36. Period of retention of accounts:
36 Period of Every registered person required to keep and maintain books of account or other records in
retention of accordance with the provisions of sub-section (1) of section 35 shall retain them until the expiry
accounts of SEVENTY TWO MONTHS from the due date of furnishing of annual return for the year
pertaining to such accounts and records:
PROVIDED that a registered person, who is a party to an appeal or revision or any other
proceedings before any Appellate Authority or Revisional Authority or Appellate Tribunal or
court, whether filed by him or by the Commissioner, or is under investigation for an offence
under Chapter XIX, shall retain the books of account and other records pertaining to the
subject matter of such appeal or revision or proceedings or investigation
 for a period of one year after final disposal of such appeal or revision or proceedings
or investigation, or
 for the period specified above (seventy two months),
 whichever is LATER.
Example to the Main Section:

If the annual return for the FY 2017-18 is filed on say 30.11.2018, then the books of
account and other records are to be maintained till 31.12.2024.
[Books of Accounts in entirety].
Example to the Proviso:

If the annual return for the FY 2017-18 is filed on say 30.11.2018 but certain issues have
been taken to the court which got finalized on 30.06.2024 then the books of account and
other records pertaining to the subject matter of such appeal are to be maintained till
30.06.2025 (as 6 years expires on 31.12.2024)
[Books of Accounts pertaining to the subject matter of such appeal].
120
 Rule 56 - Maintenance of accounts by Registered Persons:
SRN Description
1 Every registered person shall keep and maintain, in addition to the particulars mentioned in Section 35(1), a
true and correct account of the goods or services imported or exported or of supplies attracting payment of
tax on reverse charge along with the relevant documents, including invoices, bills of supply, delivery challans,
credit notes, debit notes, receipt vouchers, payment vouchers and refund vouchers.
2 Every registered person, other than a person paying tax under section 10, shall maintain the accounts of stock
in respect of goods received and supplied by him, and such accounts shall contain particulars of the opening
balance, receipt, supply, goods lost, stolen, destroyed, written off or disposed of by way of gift or free sample
and the balance of stock including raw materials, finished goods, scrap and wastage thereof.
3 Every registered person shall keep and maintain a separate account of advances received, paid and
adjustments made thereto.
4 Every registered person, other than a person paying tax under section 10, shall keep and maintain an account,
containing the details of tax payable (including tax payable in accordance with the provisions of sub-section
(3) and sub-section (4) of section 9), tax collected and paid, input tax, input tax credit claimed, together with a
register of tax invoice, credit notes, debit notes, delivery challan issued or received during any tax period.
5 Every registered person shall keep the particulars of -

a) names and complete addresses of suppliers from whom he has received the goods or services chargeable
to tax under the Act;
b) names and complete addresses of the persons to whom he has supplied goods or services, where
required under the provisions of this Chapter;
c) the complete address of the premises where goods are stored by him, including goods stored during
transit along with the particulars of the stock stored therein.
6 If any taxable goods are found to be stored at any place(s) other than those declared under sub-rule (5)
without the cover of any valid documents, the proper officer shall determine the amount of tax payable on
such goods as if such goods have been supplied by the registered person.
7 Every registered person shall keep the books of account at the principal place of business and books of
account relating to additional place of business mentioned in his certificate of registration and such books of
account shall include any electronic form of data stored on any electronic device.
8 Any entry in registers, accounts and documents shall not be erased, effaced or overwritten, and all incorrect
entries, otherwise than those of clerical nature, shall be scored out under attestation and thereafter, the
correct entry shall be recorded and where the registers and other documents are maintained electronically, a
log of every entry edited or deleted shall be maintained.
9 Each volume of books of account maintained manually by the registered person shall be serially numbered.
10 Unless proved otherwise, if any documents, registers, or any books of account belonging to a registered
person are found at any premises other than those mentioned in the certificate of registration, they shall be
presumed to be maintained by the said registered person.
11 Every agent referred to in clause (5) of section 2 shall maintain accounts depicting the,-
a) particulars of authorisation received by him from each principal to receive or supply goods or services on
behalf of such principal separately;
b) particulars including description, value and quantity (wherever applicable) of goods or services received
on behalf of every principal;
c) particulars including description, value and quantity (wherever applicable) of goods or services supplied
121
on behalf of every principal;

d) details of accounts furnished to every principal; and
e) tax paid on receipts or on supply of goods or services effected on behalf of every principal.
12 Every registered person manufacturing goods shall maintain monthly production accounts showing
quantitative details of raw materials or services used in the manufacture and quantitative details of the goods
so manufactured including the waste and by products thereof.
13 Every registered person supplying services shall maintain the accounts showing quantitative details of goods
used in the provision of services, details of input services utilised and the services supplied.
14 Every registered person executing works contract shall keep separate accounts for works
contract showing -
a) the names and addresses of the persons on whose behalf the works contract is executed;
b) description, value and quantity (wherever applicable) of goods or services received for the execution of
works contract;
c) description, value and quantity (wherever applicable) of goods or services utilized in the execution of
works contract;
d) the details of payment received in respect of each works contract; and
e) the names and addresses of suppliers from whom he received goods or services.
15 The records under the provisions of this Chapter may be maintained in electronic form and the record so
maintained shall be authenticated by means of a digital signature.
16 Accounts maintained by the registered person together with all the invoices, bills of supply, credit and debit
notes, and delivery challans relating to stocks, deliveries, inward supply and outward supply shall be
preserved for the period as provided in section 36 and shall, where such accounts and documents are
maintained manually, be kept at every related place of business mentioned in the certificate of registration
and shall be accessible at every related place of business where such accounts and documents are maintained
digitally.
17 Any person having custody over the goods in the capacity of a carrier or a clearing and forwarding agent for
delivery or dispatch thereof to a recipient on behalf of any registered person shall maintain true and correct
records in respect of such goods handled by him on behalf of such registered person and shall produce the
details thereof as and when required by the proper officer.
18 Every registered person shall, on demand, produce the books of accounts which he is required to maintain
under any law for the time being in force.
 Rule 57- Generation and maintenance of electronic records:
SRN Description
1 Proper electronic back-up of records shall be maintained and preserved in such manner that, in the event of
destruction of such records due to accidents or natural causes, the information can be restored within a
reasonable period of time.
2 The registered person maintaining electronic records shall produce, on demand, the relevant records or
documents, duly authenticated by him, in hard copy or in any electronically readable format.
3 Where the accounts and records are stored electronically by any registered person, he shall, on demand,
provide the details of such files, passwords of such files and explanation for codes used, where necessary, for
access and any other information which is required for such access along with a sample copy in print form of
the information stored in such files.
122
 Rule 58- Records to be maintained by owner or operator of godown or warehouse and transporters:
SRN Description
1 Every person required to maintain records and accounts in accordance with the provisions of sub-section (2)
of section 35, if not already registered under the Act, shall submit the details regarding his business
electronically on the common portal in FORM GST ENR-01, either directly or through a Facilitation Centre
notified by the Commissioner and, upon validation of the details furnished, a unique enrolment number shall
be generated and communicated to the said person.
2 The person enrolled under sub-rule (1) as aforesaid in any other State or Union territory shall be deemed to
be enrolled in the State or Union territory.
3 Every person who is enrolled under sub-rule (1) shall, where required, amend the details furnished in FORM
GST ENR-01 electronically on the common portal either directly or through a Facilitation Centre notified by
the Commissioner.
4 Subject to the provisions of rule 56,-

(a) any person engaged in the business of transporting goods shall maintain records of goods
transported, delivered and goods stored in transit by him alongwith the Goods and Services Tax
Identification Number of the registered consigner and consignee for each of his branches.
(b) every owner or operator of a warehouse or godown shall maintain books of accounts with respect to
the period for which particular goods remain in the warehouse, including the particulars relating to
dispatch, movement, receipt and disposal of such goods.
5 The owner or the operator of the godown shall store the goods in such manner that they can be identified
item-wise and owner-wise and shall facilitate any physical verification or inspection by the proper officer on
demand.
123
124
 Flow of Returns:
Flow of Returns:
GSTR-2A GSTR-1A
Actions of Accept, •Rejections,
Data will be auto Reject or Modify
Upload details of modifications and
populated in GSTR- have to be taken. additions in GSTR-
outward supply
Additions can be 2 will be made
on or before 10th 2A and
communicated to made. available to
of following
month. Recipient tax supplier in GSTR-
payer. Return needs to be 1A.
GSTR-1 filed after 10th and
on or before 15th of Supplier has to
following month. take action by
GSTR-2 17th.
GSTR-3
•Auto-populated
return will be
available for
submission along
with the payment
on 20th.
Flow of Returns (Summary):
SUPPLIER RECIPIENT
GSTR-1 GSTR-2
3 1 2
GSTR-1A GSTR-2A
GSTR-3
125
Chapter IX
RETURNS
SN Particulars
37 Furnishing details of outward supplies
38 Furnishing details of inward supplies
39 Furnishing of returns
40 First return
41 Claim of input tax credit and provisional acceptance thereof
42 Matching, reversal and reclaim of input tax credit
43 Matching, reversal and reclaim of reduction in output tax liability
44 Annual return
45 Final return
46 Notice to return defaulters
47 Levy of late fee
48 Goods and services tax practitioners
37. Furnishing details of outward supplies:
1 Outward Every registered person, other than
Return -  an Input Service Distributor,
10th of the  a non-resident taxable person and
month  a person paying tax under the provisions of section 10 or section 51 or section 52,
succeeding
the Tax shall furnish, electronically, in such form and manner as may be prescribed, the details of
period outward supplies of goods or services or both effected during a tax period on or before the
tenth day of the month succeeding the said tax period and such details shall be communicated
(GSTR-1 to to the recipient* of the said supplies within such time and in such manner as may be
be prescribed:
furnished
& PROVIDED that the registered person shall not be allowed to furnish the details of outward
communic supplies during the period from the eleventh day to the fifteenth day of the month succeeding
ated in the tax period:
GSTR-2A)
PROVIDED FURTHER that the Commissioner may, for reasons to be recorded in writing, by
notification, extend the time limit for furnishing such details for such class of taxable persons
as may be specified therein:
PROVIDED also that any extension of time limit notified by the Commissioner of State tax or
Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.
 Communicated to the recipient (in Form GSTR-2A)*

Form GSTR-2A is an auto-drafted form and contains the details of inward supplies
made by the assessee, the details of which have been uploaded by the supplier. It
also contains the input tax credit distributed by the Input Service Distributor, tax
deducted at source and tax collected at source. The details in GSTR-2A are auto
populated.
126
Time limit for rectification of details

19 20
18
20-10-2019 31-12-2019
April
Before filing of return for the month of

September of the following year.
EARLIER
OR
Before filing of Annual Return
Where Annual return for Financial Year 2018-19 is filed on August 16, 2019.
Return Last date up to which details can be

rectified
April ‘18 August 16, 2019
March ’19 August 16, 2019
Where Annual return for Financial Year 2017-18 is filed on Dec 31, 2019.
Return Last date up to which details can be

rectified
April ‘18 October 20, 2019
March ’19 October 20, 2019
127
2 The Every registered person who has been communicated the details under sub-section (3) of
recipient section 38 or the details pertaining to inward supplies of Input Service Distributor under sub-
shall section (4) of section 38, shall either accept or reject the details so communicated, on or
accept or before the seventeenth day, but not before the fifteenth day, of the month succeeding the tax
reject the period and the details furnished by him under sub-section (1) shall stand amended accordingly.
details by
th
17 [Communication to the supplier to be made in GSTR-1A]
3 Details of Any registered person, who has furnished the details under sub-section (1) for any tax period
outward and which have remained unmatched under section 42 or section 43, shall, upon discovery of
supplies any error or omission therein, rectify such error or omission in such manner as may be
remain prescribed, and shall pay the tax and interest, if any, in case there is a short payment of tax on
unmatched account of such error or omission, in the return to be furnished for such tax period:
u/s 37 &
38-
Rectificatio PROVIDED that no rectification of error or omission in respect of the details furnished under
n of error sub-section (1) shall be allowed after furnishing of the return under section 39 for the month of
September following the end of the financial year to which such details pertain, or furnishing of
the relevant annual return, whichever is earlier.
Time limit
for Explanation - For the purposes of this Chapter, the expression “details of outward supplies”
rectificatio shall include details of invoices, debit notes, credit notes and revised invoices issued in relation
n to outward supplies made during any tax period.
 Rule 59 - Form and manner of furnishing details of outward supplies:
SRN Description
1 Every registered person, other than a person referred to in section 14 of the Integrated Goods and Services
Tax Act, 2017, required to furnish the details of outward supplies of goods or services or both under section
37, shall furnish such details in FORM GSTR-1 electronically through the common portal, either directly or
through a Facilitation Centre notified by the Commissioner.
2 The details of outward supplies of goods or services or both furnished in FORM GSTR-1 shall include the –
a) invoice wise details of all –
(i) inter-State and intra-State supplies made to the registered persons; and
(ii) inter- State supplies with invoice value more than two and a half lakh rupees made to the
unregistered persons;
b) consolidated details of all -

(i) intra-State supplies made to unregistered persons for each rate of tax; and
(ii) State wise inter-State supplies with invoice value upto two and a half lakh rupees made to
unregistered persons for each rate of tax;
c) debit and credit notes, if any, issued during the month for invoices issued previously.
3 The details of outward supplies furnished by the supplier shall be made available electronically to the
concerned registered persons (recipients) in Part A of FORM GSTR2A, in FORM GSTR-4A and in FORM GSTR-
6A through the common portal after the due date of filing of FORM GSTR-1.
4 The details of inward supplies added, corrected or deleted by the recipient in his FORM GSTR-2 under
section 38 or FORM GSTR-4 or FORM GSTR-6 under section 39 shall be made available to the supplier
electronically in FORM GSTR-1A through the common portal and such supplier may either accept or reject
the modifications made by the recipient and FORM GSTR-1 furnished earlier by the supplier shall stand
amended to the extent of modifications accepted by him.
128
Outward
Taxable Supplies
B2B Supplies B2C Supplies
Inter-state Intra-state Inter-state Intra-state

Supplies Supplies Supplies Supplies
Invoice > Invoice <= Consolidated details

Rs.2,50,000 Rs.2,50,000 of all supplies to be
uploaded
Invoice-wise details Invoice-wise details State-wise

to be uploaded to be uploaded consolidated details
to be uploaded
129
Illustration 1–
Ashish Ltd. furnished the annual returns for the year 2018-19 on August 24, 2019. An error is discovered in
respect of a transaction pertaining to outward supplies of November 2018. Determine the time limit to rectify
th
the mistake in case return of September 2019 is furnished on 18 October 2019. Would your answer be
different if annual return for financial year 2018-19 is furnished on 25-12-2019.
Solution: In this case the annual return for financial year 2018-19 has been furnished by Ashish Ltd. on August
th
25, 2019 and return for the month of September, 2019 is furnished on 18 October 2019, the rectification of
th
the error pertaining to a transaction in November 2018 cannot be made beyond August 24 , 2019 i.e., earlier
th th
of 24 August 2019 or 18 October 2019.
In other words, once annual return for financial year 2018-19 is filed before the filling of return for the month
of September, 2019, no amendments relating to financial year 2018-19 will be permitted thereafter and in
such case, mismatch will become permanent and liability to that extent will be fastened on the receiver.
38. Furnishing details of inward supplies:
1 The recipient Every registered person, other than
crosschecks or  an Input Service Distributor or
even may alter  a non-resident taxable person or
or includes in  a person paying tax under the provisions of section 10 or section 51 or section 52,
the details
communicated shall verify, validate, modify or delete, if required, the details relating to outward supplies
to him to and credit or debit notes communicated under sub-section (1) of section 37 to prepare the
prepare his details of his inward supplies and credit or debit notes and may include therein, the details
inward supplies of inward supplies and credit or debit notes received by him in respect of such supplies that
have not been declared by the supplier under subsection (1) of section 37.
[GSTR-2A to be verified]
2 Furnishing the Every registered person, other than

Inward Return an Input Service Distributor or
(GSTR-2 to be  a non-resident taxable person or
verified)  a person paying tax under the provisions of section 10 or section 51 or section 52,
shall furnish, electronically, the details of inward supplies of taxable goods or services or
both, including
 inward supplies of goods or services or both on which the tax is payable on reverse
charge basis under this Act and
 inward supplies of goods or services or both taxable under the Integrated Goods
and Services Tax Act or on which integrated goods and services tax is payable
under section 3 of the Customs Tariff Act, 1975, and
 credit or debit notes received in respect of such supplies during a tax period after
the tenth day but on or before the fifteenth day of the month succeeding the tax
period in such form and manner as may be prescribed:
PROVIDED that the Commissioner may, for reasons to be recorded in writing, by

notification, extend the time limit for furnishing such details for such class of taxable
persons as may be specified therein:
PROVIDED FURTHER that any extension of time limit notified by the Commissioner of State
tax or Commissioner of Union territory tax shall be deemed to be notified by the
130
Commissioner.
3 Details to the The details of supplies modified, deleted or included by the recipient and furnished under
supplier be sub-section (2) shall be communicated to the supplier concerned in such manner and within
communicated such time as may be prescribed.
in GSTR-1A
4 Details to the The details of supplies modified, deleted or included by the recipient in the return furnished
supplier be under sub-section (2) or sub-section (4) of section 39 shall be communicated to the
communicated supplier concerned in such manner and within such time as may be prescribed.
in GSTR-1A
5 The details of Any registered person, who has furnished the details under sub-section (2) for any tax
inward supplies period and which have remained unmatched under section 42 or section 43, shall, upon
remain discovery of any error or omission therein, rectify such error or omission in the tax period
unmatched u/s during which such error or omission is noticed in such manner as may be prescribed, and
37 & 38- shall pay the tax and interest, if any, in case there is a short payment of tax on account of
Rectification of such error or omission, in the return to be furnished for such tax period:
Error
Time limit for PROVIDED that no rectification of error or omission in respect of the details furnished under
rectification sub-section (2) shall be allowed after furnishing of the return under section 39 for the
month of September following the end of the financial year to which such details pertain, or
furnishing of the relevant annual return, whichever is earlier.
 Rule 60 - Form and manner of furnishing details of inward supplies:
SRN Description
1 Every registered person, other than a person referred to in section 14 of the Integrated Goods and Services
Tax Act, 2017, required to furnish the details of inward supplies of goods or services or both received during a
tax period under sub-section (2) of section 38 shall, on the basis of details contained in Part A, Part B and Part
C of FORM GSTR-2A, prepare such details as specified in sub-section (1) of the said section and furnish the
same in FORM GSTR-2 electronically through the common portal, either directly or from a Facilitation Centre
notified by the Commissioner, after including therein details of such other inward supplies, if any, required to
be furnished under sub-section (2) of section 38.
2 Every registered person shall furnish the details, if any, required under sub-section (5) of section 38
electronically in FORM GSTR-2.
3 The registered person shall specify the inward supplies in respect of which he is not eligible, either fully or
partially, for input tax credit in FORM GSTR-2 where such eligibility can be determined at the invoice level.
4 The registered person shall declare the quantum of ineligible input tax credit on inward supplies which is
relatable to non-taxable supplies or for purposes other than business and cannot be determined at the
invoice level in FORM GSTR-2.
4A The details of invoices furnished by an non-resident taxable person in his return in FORM GSTR-5 under rule
63 shall be made available to the recipient of credit in Part A of FORM GSTR 2A electronically through the
common portal and the said recipient may include the same in FORM GSTR-2.
5 The details of invoices furnished by an Input Service Distributor in his return in FORM GSTR-6 under rule 65
shall be made available to the recipient of credit in Part B of FORM GSTR 2A electronically through the
common portal and the said recipient may include the same in FORM GSTR-2.
131
6 The details of tax deducted at source furnished by the deductor under sub-section (3) of section 39 in FORM
GSTR-7 shall be made available to the deductee in Part C of FORM GSTR-2A electronically through the
common portal and the said deductee may include the same in FORM GSTR-2.
7 The details of tax collected at source furnished by an e-commerce operator under section 52 in FORM GSTR-8
shall be made available to the concerned person in Part C of FORM GSTR 2A electronically through the
common portal and such person may include the same in FORM GSTR-2.
8 The details of inward supplies of goods or services or both furnished in FORM GSTR-2 shall
include the -
a) invoice wise details of all inter-State and intra-State supplies received from registered persons or
unregistered persons;
b) import of goods and services made; and
c) debit and credit notes, if any, received from supplier.
 FAQs:
*Q How should the assessee disclose the details of inward supplies on which he wishes to avail input tax credit?
*A In Form GSTR-2, against each inward supply, an option for eligibility of input tax credit is available. The assessee
can select the option if he is eligible for input tax credit.
39. Furnishing of returns:
1 Furnishing Every registered person, other than
of return-  an Input Service Distributor or
Monthly-  a non-resident taxable person or
th
20 of the  a person paying tax under the provisions of section 10 or section 51 or section 52
month
shall, for every calendar month or part thereof, furnish, in such form and manner 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.
2 Composition A registered person paying tax under the provisions of section 10 shall, for each quarter or part
Scheme- thereof, furnish, in such form and manner as may be prescribed, a return, electronically, of
Quarterly- turnover in the State or Union territory, inward supplies of goods or services or both, tax
th
18 of the payable and tax paid within eighteen days after the end of such quarter.
month
 Example:
th
Mr.X is required to file the return for the period April/June-2018 by 18 July 2018 and also
the tax is required to be paid by him for supplies made by him during the period April/June-
th
2018 by 18 July 2018.
3 TDS Every registered person required to deduct tax at source under the provisions of section 51 shall
Deductor- furnish, in such form and manner as may be prescribed, a return, electronically, for the month in
Monthly- which such deductions have been made within ten days after the end of such month.
th
10 of the
month
132
 FAQs:
Q I am notified under Section 46 of the GST Act to deduct tax at source. What
are the returns to be furnished by me?
A Any person liable to deduct tax at source under Section 46 of the GST Act is
specifically liable to furnish returns in Form GSTR-7. The details in respect of tax
deduced at source, as well as the details relating to tax payable and tax paid
shall be disclosed. This apart, the person shall be required to furnish other
returns in Forms GSTR-1, GSTR-2 and GSTR-3, to the extent not covered in Form
GSTR-7.
Q I am notified under section 56 of the GST Act to collect tax at source. What are
the returns to be furnished by me?
A Any person liable to collect tax at source under section 56 of the GST Act is
specifically liable to furnish returns in Form GSTR-8.The details in respect of tax
collected at source, as well as the details relating to tax collected and tax paid
shall be disclosed. This apart, the person shall be required to furnish other
returns in Forms GSTR-1, GSTR-2 and GSTR-3, to the extent not covered in Form
GSTR-8 above.
(Can be discussed with Sec 52 under Chapter- Payment of Taxes)
4 ISD- Every taxable person registered as an Input Service Distributor shall, for every calendar month
Monthly- or part thereof, furnish, in such form and manner as may be prescribed, a return, electronically,
th
13 of the within thirteen days after the end of such month.
month
5 NRTP- Every registered non-resident taxable person shall, for every calendar month or part thereof,
Monthly- furnish, in such form and manner as may be prescribed, a return, electronically,
th
20 or  within twenty days after the end of a calendar month or
within 7  within seven days after the last day of the period of registration specified under sub-
days of the section (1) of section 27,
last day of whichever is earlier.
the COR
6 Extension of The Commissioner may, for reasons to be recorded in writing, by notification, extend the time
time limit limit for furnishing the returns under this section for such class of registered persons as may be
specified therein:
PROVIDED that any extension of time limit notified by the Commissioner of State tax or Union
territory tax shall be deemed to be notified by the Commissioner.
7 Payment of Every registered person, who is required to furnish a return under sub-section (1) or sub-section
tax dues not (2) or sub-section (3) or sub-section (5), shall pay to the Government the tax due as per such
later than return not later than the last date on which he is required to furnish such return.
the last due
date Q What is the due date for payment of tax under GST?
A As per Section 34 (7), the due date for payment of tax shall be the due date for
filing of returns
8 Return to be Every registered person who is required to furnish a return under sub-section (1) or subsection
furnished (2) shall furnish a return for every tax period whether or not any supplies of goods or services or
even if no both have been made during such tax period.
supplies
have been Q Whether returns have to be filed if the assessee has not effected any inward
made or outward supply during a tax period?
A Section 34(8) specifies that the periodical return in Form GSTR-3 or GSTR-4 (as
the case may be) shall be furnished whether or not any supplies have been
133
effected during the tax period. Here, it is relevant to note that the term
“supplies” includes both inward and outward supplies.
However, a non-resident taxable person, an input service distributor, a person

liable to deduct tax at source and person liable to collect tax at source would
not be liable to furnish returns (in Forms GSTR-5, GSTR-6, GSTR-7 and GSTR-8,
respectively) if they have not effected any supplies requiring them to furnish
the respective forms (as mentioned above).
9 No revision Subject to the provisions of sections 37 and 38, if any registered person after furnishing a return
is allowed under sub-section (1) or sub-section (2) or sub-section (3) or sub-section (4) or sub-section (5)
rather discovers any omission or incorrect particulars therein, other than as a result of scrutiny, audit,
rectification inspection or enforcement activity by the tax authorities, he shall rectify such omission or
of errors is incorrect particulars in the return to be furnished for the month or quarter during which such
done omission or incorrect particulars are noticed, 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, or the actual date of furnishing of relevant annual return,
(V IMP) whichever is earlier.
 Example:
In the month of August 2018, the assessee notices that the particulars furnished in Form
GSTR-3 for the month of July 2017 are incorrect. While filing the GSTR-3 for the period
August 2018, the assessee can make an entry in the table showing amendment to details of
earlier tax periods and thereby rectify the details entered earlier in the return for July 2017.
Q During the course of inspection/audit/scrutiny/ enforcement activity, the

department has pointed out certain omissions or incorrect particulars in the
returns. Whether the assessee can rectify the returns to correct the omissions or
incorrect particulars in its returns?
A As per Section 34(9), where the omission / incorrect particulars are pointed out by
the department during audit/inspection/ scrutiny/ enforcement, the assessee
cannot rectify such omissions/incorrect particulars in the returns. However, due
tax and interest shall be payable thereon.
10 No return A registered person shall not be allowed to furnish a return for a tax period if the return for any
can be filed of the previous tax periods has not been furnished by him.
if the return
for previous
periods are
not filed
134
 Rule 61- Form and manner of submission of monthly return:
SRN Description
1 Every registered person other than a person referred to in section 14 of the Integrated Goods and Services Tax
Act, 2017 or an Input Service Distributor or a non-resident taxable person or a person paying tax under section
10 or section 51 or, as the case may be, under section 52 shall furnish a return specified under sub-section (1)
of section 39 in FORM GSTR-3 electronically through the common portal either directly or through a Facilitation
Centre notified by the Commissioner.
2 Part A of the return under sub-rule (1) shall be electronically generated on the basis of information furnished
through FORM GSTR-1, FORM GSTR-2 and based on other liabilities of preceding tax periods.
3 Every registered person furnishing the return under sub-rule (1) shall, subject to the provisions of section 49,
discharge his liability towards tax, interest, penalty, fees or any other amount payable under the Act or the
provisions of this Chapter by debiting the electronic cash ledger or electronic credit ledger and include the
details in Part B of the return in FORM GSTR-3.
4 A registered person, claiming refund of any balance in the electronic cash ledger in accordance with the
provisions of sub-section (6) of section 49, may claim such refund in Part B of the return in FORM GSTR-3 and
such return shall be deemed to be an application filed under section 54.
5 Where the time limit for furnishing of details in FORM GSTR-1 under section 37 and in FORM GSTR-2 under
section 38 has been extended and the circumstances so warrant, the Commissioner may, by notification,
specify that return shall be furnished in FORM GSTR-3B electronically through the common portal, either
directly or through a Facilitation Centre notified by the Commissioner.
6 Where a return in FORM GSTR-3B has been furnished, after the due date for furnishing of details in FORM
GSTR-2— (a) Part A of the return in FORM GSTR-3 shall be electronically generated on the basis of information
furnished through FORM GSTR-1, FORM GSTR-2 and based on other liabilities of preceding tax periods and
PART B of the said return shall be electronically generated on the basis of the return in FORM GSTR-3B
furnished in respect of the tax period; (b) the registered person shall modify Part B of the return in FORM
GSTR-3 based on the discrepancies, if any, between the return in FORM GSTR-3B and the return in
FORM GSTR-3 and discharge his tax and other liabilities, if any; (c) where the amount of input tax credit in
FORM GSTR-3 exceeds the amount of input tax credit in terms of FORM GSTR-3B, the additional amount shall
be credited to the electronic credit ledger of the registered person.
 Rule 62- Form and manner of submission of quarterly returns by the composition supplier:
SRN Description
1 Every registered person paying tax under section 10 shall, on the basis of details contained in FORM GSTR-4A,
and where required, after adding, correcting or deleting the details, furnish the quarterly return in FORM
GSTR-4 electronically through the common portal, either directly or through a Facilitation Centre notified by
the Commissioner.
2 Every registered person furnishing the return under sub-rule (1) shall discharge his liability towards tax,
interest, penalty, fees or any other amount payable under the Act or the provisions of this Chapter by debiting
the electronic cash ledger.
3 The return furnished under sub-rule (1) shall include the -

a) invoice wise inter-State and intra-State inward supplies received from registered and un-registered
persons; and
b) consolidated details of outward supplies made.
4 A registered person who has opted to pay tax under section 10 from the beginning of a financial year shall,
where required, furnish the details of outward and inward supplies and return under rules 59, 60 and 61
135
relating to the period during which the person was liable to furnish such details and returns till the due date of
furnishing the return for the month of September of the succeeding financial year or furnishing of annual
return of the preceding financial year, whichever is earlier.
Explanation: For the purposes of this sub-rule, it is hereby declared that the person shall not be eligible to avail
of input tax credit on receipt of invoices or debit notes from the supplier for the period prior to his opting for
the composition scheme.
5 A registered person opting to withdraw from the composition scheme at his own motion or where option is
withdrawn at the instance of the proper officer shall, where required, furnish the details relating to the period
prior to his opting for payment of tax under section 9 in FORM GSTR- 4 till the due date of furnishing the return
for the quarter ending September of the succeeding financial year or furnishing of annual return of the
preceding financial year, whichever is earlier.
 Rule 63- Form and manner of submission of return by non-resident taxable person:
RN Description
63 Every registered non-resident taxable person shall furnish a return in FORM GSTR-5 electronically through the
common portal, either directly or through a Facilitation Centre notified by the Commissioner, including therein
the details of outward supplies and inward supplies and shall pay the tax, interest, penalty, fees or any other
amount payable under the Act or the provisions of this Chapter within twenty days after the end of a tax
period or within seven days after the last day of the validity period of registration, whichever is earlier.
 Rule 64- Form and manner of submission of return by persons providing online information and database
access or retrieval services:
RN Description
64 Every registered person providing online information and data base access or retrieval services from a place
outside India to a person in India other than a registered person shall file return in FORM GSTR-5A on or before
the twentieth day of the month succeeding the calendar month or part thereof.
 Rule 65- Form and manner of submission of return by an Input Service Distributor:
RN Description
65 Every Input Service Distributor shall, on the basis of details contained in FORM GSTR-6A, and where required,
after adding, correcting or deleting the details, furnish electronically the return in FORM GSTR-6, containing
the details of tax invoices on which credit has been received and those issued under section 20, through the
common portal either directly or from a Facilitation Centre notified by the Commissioner.
 Rule 66- Form and manner of submission of return by a person required to deduct tax at source:
SRN Description
1 Every registered person required to deduct tax at source under section 51 (hereafter in this rule referred to as
deductor) shall furnish a return in FORM GSTR-7 electronically through the common portal either directly or
from a Facilitation Centre notified by the Commissioner.
2 The details furnished by the deductor under sub-rule (1) shall be made available electronically to each of the
suppliers in Part C of FORM GSTR-2A and FORM-GSTR4A on the common portal after the due date of filing of
FORM GSTR-7.
136
3 The certificate referred to in sub-section (3) of section 51 shall be made available electronically to the deductee
on the common portal in FORM GSTR-7A on the basis of the return furnished under sub-rule (1).
 Rule 67- Form and manner of submission of statement of supplies through an ecommerce operator:
SRN Description
1 Every electronic commerce operator required to collect tax at source under section 52 shall furnish a
statement in FORM GSTR-8 electronically on the common portal, either directly or from a Facilitation Centre
notified by the Commissioner, containing details of supplies effected through such operator and the amount of
tax collected as required under subsection (1) of section 52.
2 The details furnished by the operator under sub-rule (1) shall be made available electronically to each of the
suppliers in Part C of FORM GSTR-2A on the common portal after the due date of filing of FORM GSTR-8.
40. First return:
40 First return Every registered person who has made outward supplies in the period between
 the date on which he became liable to registration

till
 the date on which registration has been granted
shall declare the same in the first return furnished by him after grant of registration.
Q I was liable to get registered from April 12, 2017. I got my registration only on
August16, 2017. How should I disclose the details of supplies effected during the
period April12, 2017 to August 16, 2017?
A As per Section 35, a registered taxable person is required to file First Return to
disclose the details of supplies effected during the period between the date on
which he became liable to registration till the date on which registration is granted.
Therefore, the assessee has to file First Return to disclose the supplies effected
during the period April 12, 2017 to August 16, 2017.
41. Claim of input tax credit and provisional acceptance thereof:
1 Entitled to Every registered person shall, subject to such conditions and restrictions as may be prescribed, be
take self- entitled to take the credit of eligible input tax, as self-assessed, in his return and such amount
assessed shall be credited on a provisional basis to his electronic credit ledger.
ITC
 Understanding:
One of the conditions for taking ITC by the recipient of the supply is that “the tax charged in
respect of such supply has actually been paid to the Government, either in cash or through
utilization of ITC admissible in respect of the said supply” [Section 16(2)(c)].
For this reason, the statute provides that the ITC will first be taken provisionally in the
electronic credit ledger, then after filling of GSTR 3, ITC be matched with the available
information of tax payment in respect of that supply.
137
138
Value of Goods = Rs.1,000

GST= Rs.180
th
Transaction dated 15 April 2018
Mr.A, Supplier Mr.B, Recipient

A declares the A does not declare or
details in GSTR-1 misdeclares the details in GSTR-1
th th
(by 10 May’18) (by 10 May’18)
B takes ITC in GSTR-2 B claims ITC in GSTR-2 by

& NO mismatch arise ADDITION. This is communicated
th
(by 15 May’18) to A in GSTR-1A.
th
(by 15 May’18)
A Accepts GSTR-1A A Rejects GSTR-1A

No point of B accepting th th
(by 17 May ’18) (by 17 May ’18)
or not accepting it
NO mismatch. A’s GSTR-1 Mismatch arised

stand amended & shall pay
additional Rs.200.
th
On 20 May 2018, Both A & B
furnishes their return in GSTR-3
Assuming the matching is carried out in June, the

DEPT communicates the discrepancies to BOTH in
nd
FORM GST MIS-1/2 (say on 22 June’18)
{on or before the last day of the month in which such
matching is carried out}
139
No point of B rectifying
or not rectifying it A rectifies in A does not
June’18 rectify in June’18
 A rectifies Outward Return (GSTR-1) The DEPT adds Rs. 200 to the OTL of B
Very Important: th

on 10 July
(recipient) in the return for the month
Once the discrepancy is rectified (in the return for the month in which th
he is communicated) of July ‘18 to be filed on 20 Aug’18
and the ITC is matched, a (in the return of the month succeeding
 Resultantly, A is liable to pay Rs. 200
communication in FORM GST in the return of June to be filed on the month in which he is
MIS-1 will be sent to the recipient th
20 July communicated)
& the claim of ITC will be finally (in the return for the month in which  B is liable to pay Rs. 200 along with
accepted. he is communicated) interest for the period …. May 2018 to
…. July 2018.
(Date of availing credit till date of
addition)
A rectifies within given period A does not rectify

No point of B rectifying or th
(rectified on 15 Dec’18) within given period
not rectifying it
No changes
 A is liable to pay Rs. 200 along with
th th
Interest from 10 May ‘18 till 10 Jan
19.
 B can reduce OTL for Jan’19 by Rs.200.
 B will also be eligible for refund of

interest paid earlier & shall be credited
to E-Cash Ledger in FORM GST PMT-3.
This amount shall be used for the
future payment of INTEREST only.
Maximum interest that can be
140
2 Use of The credit referred to in sub-section (1) shall be utilised only for payment of self-assessed output
provisional tax as per the return referred to in the said sub-section.
ITC
 FAQs:
Q How should the assessee disclose the details of inward supplies on which he wishes to avail input tax credit?
A In Form GSTR-2, against each inward supply, an option for eligibility of input tax credit is available. The assessee
can select the option if he is eligible for input tax credit.
This is claim of ITC & provisional acceptance thereof & will get final only after it is matched with outward
supplies of the Supplier.
42. Matching, reversal and reclaim of input tax credit:
1 Matching The details of every inward supply furnished by a registered person (hereafter in this section
referred to as the “recipient”) for a tax period shall, in such manner and within such time as may
be prescribed, be matched––
a) with the corresponding details of outward supply furnished by the corresponding

registered person (hereafter in this section referred to as the “supplier”) in his valid
return for the same tax period or any preceding tax period;
b) with the integrated goods and services tax paid under section 3 of the Customs Tariff
Act, 1975 in respect of goods imported by him; and
c) for duplication of claims of input tax credit.
*Q Supplier raises an invoice on 30.08.2018 and discloses the same in GSTR-1 for
August 2018. Recipient receives the goods and records the inward supply in his
books of account on 01.09.2018. How will the inward supply of the recipient and
outward supply of the supplier match?
*A As per Section 37, details of inward supply of the recipient should match with the
outward supply declared by the supplier for the current tax period or for the earlier
tax period. In this case, the inward supply of the recipient is filed for the period
September 2018 and will match with the outward supply of the supplier filed for the
period August 2018.
2 The claim The claim of input tax credit in respect of invoices or debit notes relating to inward supply that
for ITC, if match with the details of corresponding outward supply or with the integrated goods and
matched, services tax paid under section 3 of the Customs Tariff Act, 1975 in respect of goods imported by
is finally him shall be finally accepted and such acceptance shall be communicated, in such manner as
accepted may be prescribed, to the recipient.
3 Discrepanc Where the input tax credit claimed by a recipient in respect of an inward supply is in excess of
y to be the tax declared by the supplier for the same supply or the outward supply is not declared by the
communic supplier in his valid returns, the discrepancy shall be communicated to both such persons in such
ated to manner as may be prescribed.
BOTH
141
4 Duplicatio The duplication of claims of input tax credit shall be communicated to the recipient in such
n to be manner as may be prescribed.
communic
ated to
RECIPIENT
5 Discrepanc The amount in respect of which any discrepancy is communicated under sub-section (3) and
y-----if not which is not rectified by the supplier in his valid return for the month in which discrepancy is
rectified by communicated shall be added to the output tax liability of the recipient, in such manner as may
supplier be prescribed, in his return for the month succeeding the month in which the discrepancy is
shall be communicated.
added to
the OTL of
recipient
6 Duplicatio The amount claimed as input tax credit that is found to be in excess on account of duplication of
n of claim claims shall be added to the output tax liability of the recipient in his return for the month in
shall be which the duplication is communicated.
added to
the OTL of
the
recipient
7 If rectified The recipient shall be eligible to reduce, from his output tax liability, the amount added under
by supplier sub-section (5), if the supplier declares the details of the invoice or debit note in his valid return
then within the time specified in sub-section (9) of section 39.
recipient
shall be
eligible to
reduce the
same from
the his OTL
8 Additions A recipient in whose output tax liability any amount has been added under sub-section (5) or sub-
in the OTL section (6), shall be liable to pay interest at the rate specified under subsection (1) of section 50
of on the amount so added from the date of availing of credit till the corresponding additions are
recipient- made under the said sub-sections.
pay
interest
9 If Where any reduction in output tax liabilityis accepted under sub-section (7) ,the interest paid
reduction under sub-section (8) shall be refunded to the recipient by crediting the amount in the
is made corresponding head of his electronic cash ledger in such manner as may be prescribed:
from OTL
of PROVIDED that the amount of interest to be credited in any case shall not exceed the amount of
recipient- interest paid by the supplier.
then
interest
paid by
recipient is
refunded
10 If The amount reduced from the output tax liability in contravention of the provisions of sub-
reduction section (7) shall be added to the output tax liability of the recipient in his return for the month in
in the OTL which such contravention takes place and such recipient shall be liable to pay interest on the
is by way amount so added at the rate specified in sub-section (3) of section 50.
of FRAUD -
then added
to the OTL
of the
recipient
142
& interest
also to be
paid
 Example 1:
Mr. X supplies goods to Mr. Y for on which GST paid is Rs. 8,000 available as ITC to Mr. Y M. X – the supplier –
th
furnishes Form GSTR-1 pertaining to November on 10 December. Mr. Y – the recipient – furnishes Form
th
GSTR-2 pertaining to November on 15 December and mistakenly claims the ITC of Rs. 18,000. Both the
th
parties furnish their return GSTR-3 pertaining to November on 20 December. The mismatch report is
generated and discrepancy to the effect that Mr. Y has claimed excess tax credit of Rs. 10,000 is communicated
to Mr. X and Mr. Y in Form GST MIS-2 and Form GST MIS-1 respectively in December end.
In this case, since discrepancy is communicated in the month of December, same has to rectified by the
recipient – Mr. Y – in his Statement of Inward Supplies GSTR-2 to be furnished for the month of December.
 Example 2:
Mr.X is the supplier of services which is received by Mr.Y on which GST paid is Rs. 8,000 available as ITC to
th
Mr.Y. Mr.X– the supplier – furnishes Form GSTR-1 pertaining to November on 10 December. Mr.Y – the
th
recipient – furnishes Form GSTR-2 pertaining to November on 15 December and wrongly claims the ITC claim
th
of Rs. 8,000 twice. Both the parties furnish their return GSTR-3 pertaining to November on 20 December. The
mismatch report is generated and discrepancy to the effect that Mr.Y as claimed excess tax credit of Rs. 8,000
is communicated to Mr.Y in Form GST MIS-1 in December end.
In this case, amount of excess credit shall be added to the output tax liability of Mr.Y in his return for the
th
month of December (Due date for the same is 20 January)
Example 3:
R’s GSTR-2 for October includes an Invoice No. 30 from supplier ‘S’ on which ‘R’ has taken Rs. 18,000 as ITC,
but S’s GSTR-1 for October does not show this invoice. On matching of credit after filing of GSTR-3 (for the
th
month of October) on 20 November, this discrepancy is communicated on the GST Common Portal to ‘S’ in
the month of November itself, who rectifies his omission and includes Invoice No. 50 in his GSTR-1 [Statement
of Outward Supplies] thereby reflecting the same in his GSTR-3 filed for the month November (filed on or
th
before 20 Dec) and pays tax on it along with interest. This confirms the credit taken by ‘R’.
In an alternate scenario, ‘S’ does not add the Invoice in his GSTR-1 Statement of Outward Supplies for
th
November [filed on or before 20 Dec] due to his accountant being on leave. ‘R’ finds Rs. 18,000 added to his
th
output tax liability for the month of December, and pays it with interest @ 18% p.a. as required on 20
January (next year).
He communicates the problem to ‘S’, who looks into the issue and rectifies the discrepancy and includes
Invoice No. 50 in his GSTR-1 [Statement of Outward Supplies] thereby reflecting the same in his GSTR-3 for
March and pays tax on it along with interest.
Under section 42(7), ‘R’ can reduce the said amount from his output tax liability, and the interest paid will be
refunded to his electronic cash ledger subject to a maximum of amount of interest paid by the supplier ‘S’.
143
Illustration 1:
Mr. Ashish, a registered supplier, supplies goods valuing Rs. 10,00,000 plus GST @ 12% to Mr. Y on 9-07-
2017, incorporating these supplies in the details of outward supplies for the month of July 2017 furnished by
him on 10-08-2017. However, Mr. Y claimed input tax credit @ 18% in respect of the said supplies and
furnished his return for the said month. On matching being carried out the discrepancy was noticed and the
same was communicated to both the parties on 30-08-2017. Mr. Y did not rectify the same in the return for
the month of August 2017 i.e. upto 20-09-2017. In whose tax liability this mismatch will be added.
Solution:
As per provisions of Section 42(5) of CGST Act, 2017, the amount in respect of which any discrepancy is
communicated under Section 42(3) and which is not rectified by the supplier in his valid return for the month
in which discrepancy is communicated shall be added to the output tax liability of the recipient in his return for
the month succeeding the month in which the discrepancy is communicated.
Thus, the amount of Rs. 60,000 [Rs. 1,80,000 – Rs. 1,20,000] will be added to the output tax liability of Mr. Y in
the return for the month of September 2017. The return for the month of September 2017 is to be filed on 20-
10-2017. Thus, he will be liable to pay the said amount along with interest @ 18% p.a. for the period from the
date of availing the credit till the date of furnishing the return for the month of September, 2017 i.e. 20-10-
2017.
43. Matching, reversal and reclaim of reduction in output tax liability:
1 Details of The details of every credit note relating to outward supply furnished by a registered person
Credit (hereafter in this section referred to as the “supplier”) for a tax period shall, in such manner and
Note shall within such time as may be prescribed, be matched––
match (a) with the corresponding reduction in the claim for input tax credit by the
with: corresponding registered person (hereafter in this section referred to as the
“recipient”) in his valid return for the same tax period or any subsequent tax
period; and
(b) for duplication of claims for reduction in output tax liability.
*Q Supplier issues a credit note on 30.08.2017 and discloses the same in GSTR-1 for August
2017. Recipient receives the same& recorded in the inward supply in his books of
account on 01.09.2017. How will the outward supply of the supplier and inward supply
of the recipient match?
*A As per Section 38, details of every credit note relating to outward supply furnished by a
supplier for a tax period shall, in the manner and within the time prescribed, be matched
with the corresponding reduction in the claim for input tax credit by the recipient in his
valid return for the same tax period or any subsequent tax period
In this case, the outward supply of the supplier is filed for the period August 2017 and will
match with the inward supply of the supplier filed for the period September 2017.
2 Reduction The claim for reduction in output tax liability by the supplier that matches with the
in OTL = corresponding reduction in the claim for input tax credit by the recipient shall be finally accepted
reduction and communicated, in such manner as may be prescribed, to the supplier.
ITC
To be
finally
accepted
144
3 Reduction Where the reduction of output tax liability in respect of outward supplies exceeds the
in OTL > corresponding reduction in the claim for input tax credit or the corresponding credit note is not
the declared by the recipient in his valid returns, the discrepancy shall be communicated to both such
correspond persons in such manner as may be prescribed.
ing
reduction
ITC-
Communic
ate BOTH
4 Duplicatio The duplication of claims for reduction in output tax liability shall be communicated to the
n of claims- supplier in such manner as may be prescribed.
Communic
ate
SUPPLIER
5 Not The amount in respect of which any discrepancy is communicated under sub-section (3) and
rectified by which is not rectified by the recipient in his valid return for the month in which discrepancy is
the communicated shall be added to the output tax liability of the supplier, in such manner as may
recipient be prescribed, in his return for the month succeeding the month in which the discrepancy is
communicated.
6 Duplicatio The amount in respect of any reduction in output tax liability that is found to be on account of
n of claims- duplication of claims shall be added to the output tax liability of the supplier in his return for
added to the month in which such duplication is communicated.
the OTL of
the
supplier
7 Declaratio The supplier shall be eligible to reduce, from his output tax liability, the amount added under
n by the sub-section (5) if the recipient declares the details of the credit note in his valid return within the
recipient--- time specified in sub-section (9) of section 39.
supplier
shall be
eligible to
reduce
from the
OTL
8 If added- A supplier in whose output tax liability any amount has been added under sub-section (5) or sub-
interest is section (6), shall be liable to pay interest at the rate specified under subsection (1) of section 50
required to in respect of the amount so added from the date of such claim for reduction in the output tax
be paid liability till the corresponding additions are made under the said sub-sections.
9 If Where any reduction in output tax liabilityis accepted under sub-section (7), the interest paid
reduction under sub-section (8) shall be refunded to the supplier by crediting the amount in the
is allowed- corresponding head of his electronic cash ledger in such manner as may be prescribed:
interest is
refunded PROVIDED that the amount of interest to be credited in any case shall not exceedthe amount of
interest paid by the recipient.
10 Reduction The amount reduced from output tax liability in contravention of the provisions of subsection (7)
made by shall be added to the output tax liability of the supplier in his return for the month in which such
contraveni contravention takes place and such supplier shall be liable to pay interest on the amount so
ng sub added at the rate specified in sub-section (3) of section 50.
section 7
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Illustration:
Mr. Ashish, a registered supplier, supplied services valuing Rs. 10,00,000 plus GST @ 12% to Mr. Y on 09-10-
2017, incorporating these supplies in the details of outward supplies furnished for the month of October
2017 on 10-11-2017. Mr. Y recorded the said supplies as his inward supplies and accordingly claimed input
tax credit on said inward supplies and furnished his return. There was disagreement regarding the quality of
service and Mr. Ashish issued a credit note on 15-12-2017 in favour of Mr. Y amounting Rs. 2,00,000 and
reduced his output tax liability amounting Rs. 24,000 in the return furnished for the month of December
th
2017 on 20 January 2018. However, Mr. Y did not reverse his input tax credit amounting Rs. 24,000 in the
return furnished for the month of December, 2017. On matching being carried out the discrepancy was
noticed and the same was communicated to both the parties on 31-01-2018. The said discrepancy was not
corrected by Mr. Y (the recipient) in the return furnished for the month of January 2018 (filed on or before
th
20 Feb 2018). In whose tax liability this mismatch will be added.
Solution:
As per provisions of Section 43(3) of CGST Act, 2017, where the reduction of output tax liability in respect of
outward supplies exceeds the corresponding reduction in the claim for input tax credit or the corresponding
credit note is not declared by the recipient in his valid returns, the discrepancy shall be communicated to both
st
such persons upto the end of the month in which such matching is carried out. i.e. 31 January 2018.
A recipient to whom any discrepancy is communicated may make suitable rectifications in the statement of
th
inward supplies to be furnished for the month in which the discrepancy is made available i.e. upto 20
February 2018.
Where the discrepancy is not rectified by the recipient, an amount to the extent of discrepancy shall be added
to the output tax liability of the supplier and debited to the electronic liability register and also shown in his
return in FORM GSTR-3 for the month succeeding the month in which the discrepancy is made available.
Thus, in this case since Mr. Y has not rectified the discrepancy in the return filed for the month of January
th
2018, i.e. upto 20 February, 2018, therefore the said amount of Rs. 24,000 shall be added to the output tax
th
liability of the supplier i.e. Mr. Ashish in the return of the month of February, 2018 which is filed on 20 March
2018. In this case Mr. Ashish will be liable to pay interest from 20th January 2018 to 20th March 2018. i.e. Rs.
24,000 × 18% × 59/365 = Rs. 698.3.
146
44. Annual return:
1 Annual Every registered person, other than
Return  an Input Service Distributor,
 a person paying tax under section 51 or section 52,
RTP-FORM  a casual taxable person and
GSTR-9  a non-resident taxable person,
CS- FORM
GSTR-9A shall furnish an annual return for every financial year electronically in such form and manner as
may be prescribed on or before the thirty-first day of December following the end of such
financial year.
2 Audited Every registered person who is required to get his accounts audited in accordance with the
Copy of provisions of sub-section (5) of section 35 shall furnish, electronically, the annual return under
Annual sub-section (1) along with a copy of the audited annual accounts and a reconciliation
Accounts statement, reconciling the value of supplies declared in the return furnished for the financial
(+) year with the audited annual financial statement, and such other particulars as may be
prescribed.
Reconciliat
ion
Statement-
GSTR-9B
 Rule 80:Annual return:
SRN Description
1 Every registered person, other than an Input Service Distributor, a person paying tax under section 51 or
section 52, a casual taxable person and a nonresident taxable person, shall furnish an annual return as
specified under sub-section (1) of section 44 electronically in FORM GSTR-9 through the common portal either
directly or through a Facilitation Centre notified by the Commissioner:
Provided that a person paying tax under section 10 shall furnish the annual return in FORM GSTR-9A.
2 Every electronic commerce operator required to collect tax at source under section 52 shall furnish annual
statement referred to in sub-section (5) of the said section in FORM GSTR - 9B.
3 Every registered person whose aggregate turnover during a financial year exceeds two crore rupees shall get
his accounts audited as specified under sub-section (5) of section 35 and he shall furnish a copy of audited
annual accounts and a reconciliation statement, duly certified, in FORM GSTR-9C, electronically through the
common portal either directly or through a Facilitation Centre notified by the Commissioner.
45. Final return:
45 Final Every registered person who is required to furnish a return under sub-section (1) of section 39
return and whose registration has been cancelled shall furnish a final return
within 3
months-  within three months of the date of cancellation or
GSTR-10  date of order of cancellation,
 whichever is later,
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46. Notice to return defaulters:
46 Notice to Where a registered person fails to furnish a return under section 39 or section 44 or section 45,
return a notice shall be issued requiring him to furnish such return within 15 days.
defaulters
47. Levy of late fee:
1 Late fee- Any registered person who fails to furnish the details of outward or inward supplies required
other than under section 37 or section 38or returns required under section 39 or section 45 by the due
Annual date shall pay a late fee of Rs.100 for every day during which such failure continues subject to a
Return maximum amount of five thousand rupees.
2 Late fee- Any registered person who fails to furnish the return required under section 44 by the due date
Annual shall be liable to pay a late fee of Rs.100 for every day during which such failure continues
Return subject to a maximum of an amount calculated at a quarter per cent. of his turnover in the
State or Union territory.
 Late fees summary:
SN Particulars Late fee

1 Details of Outward
Supplies (Sec 32)
2 Details of Inward Supplies Rs. 100 per day of delay

(Sec 33) OR LOWER
Rs. 5,000
3 Periodic Return (Sec 34)
4 Final Return (Sec 40)

5 Annual Return (Sec 39) Rs. 100 per day of delay
OR
0.25% of Turnover in a State LOWER
48. Goods and services tax practitioners:
1 Eligibility, duties The manner of approval of goods and services tax practitioners, their eligibility
and obligations conditions, duties and obligations, manner of removal and other conditions
shall be as relevant for their functioning shall be such as may be prescribed.
prescribed in
rules
2 The RP may A registered person may authorise an approved goods and services tax practitioner
authorise the to furnish the details of outward supplies under section 37, the details of inward
person to supplies under section 38 and the return under section 39 or section 44 or section
furnish returns 45 in such manner as may be prescribed.
3 Responsibility Notwithstanding anything contained in sub-section (2), the responsibility for
continue to rest correctness of any particulars furnished in the return or other details filed by the
with the RTP goods and services tax practitioners shall continue to rest with the registered
person on whose behalf such return and details are furnished.
148
 Details of Returns to be filed under the GST Laws:
Form of the Details to be provided in the Who Should file? By What date?
Return Return
GSTR-1 Details of outward supplies of Registered Taxable Supplier 10th of the next month
taxable goods and/or services
effected/ provided
GSTR-2 Details of inward supplies of Registered Taxable Recipient 15th of the next month
taxable goods and/or services
effected claiming ITC
GSTR-3 Monthly return on the basis of Registered Taxable Person 20th of the next month
finalization of details of
outward supplies and inward
supplies along with the
payment of amount of tax.
GSTR-4 Quarterly return for Composition Supplier 18th of the month

compounding taxable person succeeding quarter
GSTR-5 Return for Non-Resident Non-Resident Taxable Person 20th of the next month
foreign taxable person
GSTR-6 Return for Input Service Input Service Distributor 13th of the next month
Distributor
GSTR-7 Return for authorities Tax Deductor 10th of the next month
deducting tax at source.
GSTR-8 Details of supplies effected E-commerce Operator/ Tax 10th of the next month
through e-commerce operator Collector
and the amount of tax
collected
GSTR-9 Annual Return Registered Taxable Person 31st December following

the financial Year
GSTR-10 Final Return Taxable person whose Within three months of

registration has been the date of cancellation or
surrendered or cancelled date of cancellation order,
whichever is LATER.
GSTR-11 Details of inward supplies to be Person having UIN and 2 8th of the month
furnished by a person having claiming refund following the month for
UIN which statement is filed
149
150
CREDIT
AVAILABLE CT ST UTT IT
Ist - CT Ist - ST Ist - UTT Ist - IT

UTILIZATION
AGAINST IInd -IT IInd -IT IInd -IT IInd -CT
IIIrd –ST/UTT
Note :
The ST would not be allowed to be adjusted to the CT and
vice versa.
The UTT would not be allowed to be adjusted to the CT and
vice versa
Where there is an OTL of ST there will NOT be ITC of UTT and
vice versa.
151
Chapter X
PAYMENT OF TAXES
SN Particulars
49 Payment of tax, interest, penalty and other amounts
50 Interest on delayed payment of tax
51 Tax deduction at source
52 Collection of tax at source
53 Transfer of input tax credit
49. Payment of tax, interest, penalty and other amounts:
1 Deposits Every deposit made towards tax, interest, penalty, fee or any other amount by a person by
credited to internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real
E-Cash Time Gross Settlement or by such other mode and subject to such conditions and restrictions as
Ledger may be prescribed, shall be credited to the electronic cash ledger of such person to be
maintained in such manner as may be prescribed.
2 ITC shall The input tax credit as self-assessed in the return of a registered person shall be credited to his
credited to electronic credit ledger, in accordance with section 41, to be maintained in such manner as may
E-Credit be prescribed.
ledger
3 E-Cash The amount available in the electronic cash ledger may be used for making any payment
ledger- tax, towards tax, interest, penalty, fees or any other amount payable under the provisions of this
Interest, Actor the rules made thereunder in such manner and subject to such conditions and within such
penalty, time as may be prescribed.
fees, etc
 Head wise information is to be maintained:
In E-cash ledger, information is kept minor head wise for each major head as under:
Major Minor Major Minor Major Minor Major Minor

Head Heads Heads Heads Heads Heads Heads Heads
 IT  Tax  CT  Tax  ST/  Tax  Cess  Tax
 Interest  Interest UTT  Interest  Interest
 Penalty  Penalty  Penalty  Penalty
 Fees  Fees  Fees  Fees
 Others  Others  Others  Others
1) An amount of Rs. 5,000 is available under minor head ‘tax’ of major head ‘SGST/UTGST’ and
the taxpayer has a liability of Rs. 800 for minor head ‘interest’ under the same major head
‘SGST/UTGST’. Since, there is no amount available under minor head ‘interest’ under major
head “SGST/UTGST”, therefore, interest payment cannot be made from the amount available
under ‘tax’ of the same major head.
2) Amount available in SGST/UTGST cannot be utilised for discharging liabilities under CGST,
IGST, or CESS and vice versa.
152
4 E-Credit The amount available in the electronic credit ledger may be used for making any payment
ledger - towards output tax under this Act or under the Integrated Goods and Services Tax Act in such
making manner and subject to such conditions and within such time as may be prescribed.
payments
of tax *Q. Can one use input tax credit for payment of interest/penalty?
payable *A. No, as per Section 49 (4) of the CGST Act, amount available in the electronic credit
ledger may be used for making any payment towards ‘output tax’ payable only. As
per Section 2 (71) of the CGST Act. ‘Output tax’ in relation to a taxable person,
means the CGST/SGST chargeable under this Act on taxable supply of goods and/or
services made by him or by his agent and excludes tax payable by him on reverse
charge basis. Therefore, ITC cannot be used for payment of interest/penalty.
5 Utilization The amount of input tax credit available in the electronic credit ledger of the registered person
of Credit - on account of––
Sequence
(a) integrated tax shall first be utilised towards payment of integrated tax and the amount
remaining, if any, may be utilised towards the payment of central tax and State tax, or as the case
may be, Union territory tax, in that order;
(b) the central tax shall first be utilised towards payment of central tax and the amount
remaining, if any, may be utilised towards the payment of integrated tax;
(c) the State tax shall first be utilised towards payment of State tax and the amount remaining, if
any, may be utilised towards payment of integrated tax;
(d) the Union territory tax shall first be utilised towards payment of Union territory tax and the
amount remaining, if any, may be utilised towards payment of integrated tax;
(e) the central tax shall NOT be utilised towards payment of State tax or Union territory tax; and
(f) the State tax or Union territory tax shall NOT be utilised towards payment of central tax.
6 Balance is The balance in the electronic cash ledger or electronic credit ledger after payment of tax,
to be interest, penalty, fee or any other amount payable under this Act or the rules made thereunder
refunded may be refunded in accordance with the provisions of section 54.
7 E- Liability All liabilities of a taxable person under this Act shall be recorded and maintained in an electronic
register liability register in such manner as may be prescribed.
8 Sequence Every taxable person shall discharge his tax and other dues under this Act or the rules made
in which thereunder in the following order, namely:––
the (a) self-assessed tax, and other dues related to returns of previous tax periods;
payment
of tax is (b) self-assessed tax, and other dues related to the return of the current tax period;
made
(c) any other amount payable under this Act or the rules made thereunder including the demand
determined under section 73 or section 74;
9 Incidence Every person who has paid the tax on goods or services or both under this Act shall, unless the
on the contrary is proved by him, be deemed to have passed on the full incidence of such tax to the
recipient recipient of such goods or services or both.
[Let suppose in a transaction of sale of goods from A to B. A paid GST to the GOVT that means B
has bourne the incidence of such tax as it has been assumed that the amount representing tax
153
has been collected from B by A and then paid to the GOVT]
 Date of Explanation - For the purposes of this section,—

Credit= (a) the date of credit to the account of the Government in the authorised bank shall be deemed
Date of to be the date of deposit in the electronic cash ledger; -
Deposit
(Example for explanation: Let suppose RTGS was made on Saturday and the amount gets
credited on Monday. Therefore, Monday shall be deemed to be DATE OF DEPOSIT)
(b) the expression,—

(i)“tax dues” means the tax payable under this Act and does not include interest, fee and
penalty; and
(ii)“Other dues” means interest, penalty, fee or any other amount payable under this Act
or the rules made thereunder.
50. Interest on delayed payment of tax:
1 Interest on Every person who is liable to pay tax in accordance with the provisions of this Act or the rules
delayed made thereunder, but fails to pay the tax or any part thereof to the Government within the
payment of period prescribed, shall for the period for which the tax or any part thereof remains unpaid,
tax pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be notified
by the Government on the recommendations of the Council.
[The phrase ‘on his own’ used in the section indicates that the payment of interest is
automatic and should be made voluntarily, even without a demand]
*Q. Is a show cause notice or demand required to determine the liability to pay
interest?
*A. No, there is no requirement of demand from the department to determine the
interest liability. It is the responsibility of the person liable to pay tax to compute
and pay the interest.
2 Begins-FIRST The interest under sub-section (1) shall be calculated, in such manner as may be prescribed,
DAY OF from the day succeeding the day on which such tax was due to be paid.
DEFAULT
3 Reduction A taxable person who makes an

claimed in  undue or excess claim of input tax credit under subsection (10) of section 42 or
contravention
of Sec 37(7)  undue or excess reduction in output tax liability under subsection (10) of section 43,
and 38(7)
shall pay interest on such undue or excess claim or on such undue or excess reduction, as the
case may be, at such rate not exceeding twenty-four per cent., as may be notified by the
Government on the recommendations of the Council.
154
 Analysis:
Interest on delayed payment of tax-
At the rate as may be notified by the Government on the recommendation of the GST Council but not
exceeding 18% from the day succeeding the day on which such tax was due to be paid till the date of payment.
Interest on excess claim of credit or excess reduction in output tax liability-

Section 38 of the CGST Act requires the recipient of supply to declare the details of inward supply and the
recipient may declare the credit which is not available to him. The details of credit will be matched with the
return filed by the supplier under Section 39. In case there is excess claim of credit or excess reduction in
output tax liability, the said amount will be added to the output tax liability of recipient and he shall be liable
to pay interest at the rate as may be notified by the government on the recommendation of the Council but
not exceeding 24%.
 Rule 85: Electronic Liability Register:
SRN Description
1 The electronic liability register specified under subsection (7) of section 49 shall be maintained in FORM GST
PMT-01 for each person liable to pay tax, interest, penalty, late fee or any other amount on the common
portal and all amounts payable by him shall be debited to the said register.
2 The electronic liability register of the person shall be debited by-

a) the amount payable towards tax, interest, late fee or any other amount payable as per the return
furnished by the said person;
b) the amount of tax, interest, penalty or any other amount payable as determined by a proper officer in
pursuance of any proceedings under the Act or as ascertained by the said person;
c) the amount of tax and interest payable as a result of mismatch under section 42 or section 43 or section
50; or
d) any amount of interest that may accrue from time to time.
3 Subject to the provisions of section 49, payment of every liability by a registered person as per his return
shall be made by debiting the electronic credit ledger maintained as per rule 86 or the electronic cash ledger
maintained as per rule 87 and the electronic liability register shall be credited accordingly.
4 The amount deducted under section 51, or the amount collected under section 52, or the amount payable
on reverse charge basis, or the amount payable under section 10, any amount payable towards interest,
penalty, fee or any other amount under the Act shall be paid by debiting the electronic cash ledger
maintained as per rule 87 and the electronic liability register shall be credited accordingly.
5 Any amount of demand debited in the electronic liability register shall stand reduced to the extent of relief
given by the appellate authority or Appellate Tribunal or court and the electronic tax liability register shall be
credited accordingly.
6 The amount of penalty imposed or liable to be imposed shall stand reduced partly or fully, as the case may
be, if the taxable person makes the payment of tax, interest and penalty specified in the show cause notice
or demand order and the electronic liability register shall be credited accordingly.
7 A registered person shall, upon noticing any discrepancy in his electronic liability ledger, communicate the
same to the officer exercising jurisdiction in the matter, through the common portal in FORM GST PMT-04.
155
 Rule 86: Electronic Credit ledger:
SRN Description
1 The electronic credit ledger shall be maintained in FORM GST PMT-02 for each registered person eligible for
input tax credit under the Act on the common portal and every claim of input tax credit under the Act shall
be credited to the said ledger.
2 The electronic credit ledger shall be debited to the extent of discharge of any liability in accordance with the
provisions of section 49.
3 Where a registered person has claimed refund of any unutilized amount from the electronic credit ledger in
accordance with the provisions of section 54, the amount to the extent of the claim shall be debited in the
said ledger.
4 If the refund so filed is rejected, either fully or partly, the amount debited under subrule (3), to the extent of
rejection, shall be re-credited to the electronic credit ledger by the proper officer by an order made in FORM
GST PMT-03.
5 Save as provided in the provisions of this Chapter, no entry shall be made directly in the electronic credit
ledger under any circumstance.
6 A registered person shall, upon noticing any discrepancy in his electronic credit ledger, communicate the
same to the officer exercising jurisdiction in the matter, through the common portal in FORM GST PMT-04.
Explanation: For the purposes of this rule, it is hereby clarified that a refund shall be deemed
to be rejected, if the appeal is finally rejected or if the claimant gives an undertaking to the
proper officer that he shall not file an appeal.
 Rule 87: Electronic Cash ledger:
SRN Description
1 The electronic cash ledger under sub-section (1) of section 49 shall be maintained in FORM GST PMT-05 for
each person, liable to pay tax, interest, penalty, late fee or any other amount, on the common portal for
crediting the amount deposited and debiting the payment therefrom towards tax, interest, penalty, fee or
any other amount.
2 Any person, or a person on his behalf, shall generate a challan in FORM GST PMT-06 on the common portal
and enter the details of the amount to be deposited by him towards tax, interest, penalty, fees or any other
amount.
Provided that the challan in FORM GST PMT-06 generated at the common portal shall be
valid for a period of fifteen days.
Provided further that a person supplying online information and database access or retrieval
services from a place outside India to a nontaxable online recipient referred to in section 14
of the Integrated Goods and Services Tax Act, 2017 (13 of 2017) may also do so through the
Board‟s payment system namely, Electronic Accounting System in Excise and Service Tax
from the date to be notified by the Board.
3 (a) The deposit under sub-rule (2) shall be made through any of the following modes, namely:-
i) Internet Banking through authorised banks;
ii) Credit card or Debit card through the authorised bank;
iii) National Electronic Fund Transfer or Real Time Gross Settlement from any bank; or
iv) Over the Counter payment through authorised banks for deposits up to ten thousand rupees per
156
challan per tax period, by cash, cheque or demand draft.
Provided further that a person supplying online information and database 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, 2017 (13 of 2017) may also make the deposit under sub-rule (2) through international
money transfer through Society for Worldwide Interbank Financial Telecommunication payment network,
from the date to be notified by the Board.
(b) Proper officer or any other officer authorised to recover outstanding dues from any person, whether
registered or not, including recovery made through attachment or sale of movable or immovable
properties;
(c) Proper officer or any other officer authorised for the amounts collected by way of cash, cheque or
demand draft during any investigation or enforcement activity or any ad hoc deposit.
Provided further that a person supplying online information and database 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, 2017 (13 of 2017) may also make the deposit under sub-rule (2) through international
money transfer through Society for Worldwide Interbank Financial Telecommunication payment network,
from the date to be notified by the Board. Notification No. 22/2017-Central Tax dated 17.08.2017.
Explanation.– For the purposes of this sub-rule, it is hereby clarified that for making payment of any amount
indicated in the challan, the commission, if any, payable in respect of such payment shall be borne by the
person making such payment.
4 Any payment required to be made by a person who is not registered under the Act, shall be made on the
basis of a temporary identification number generated through the common portal.
5 Where the payment is made by way of National Electronic Fund Transfer or Real Time Gross Settlement
mode from any bank, the mandate form shall be generated along with the challan on the common portal
and the same shall be submitted to the bank from where the payment is to be made:
Provided that the mandate form shall be valid for a period of fifteen days from the date of
generation of challan.
6 On successful credit of the amount to the concerned government account maintained in the authorised
bank, a Challan Identification Number shall be generated by the collecting bank and the same shall be
indicated in the challan.
7 On receipt of the Challan Identification Number from the collecting bank, the said amount shall be credited
to the electronic cash ledger of the person on whose behalf the deposit has been made and the common
portal shall make available a receipt to this effect.
8 Where the bank account of the person concerned, or the person making the deposit on his behalf, is debited
but no Challan Identification Number is generated or generated but not communicated to the common
portal, the said person may represent electronically in FORM GST PMT-07 through the common portal to the
bank or electronic gateway through which the deposit was initiated.
9 Any amount deducted under section 51 or collected under section 52 and claimed in FORM GSTR-02 by the
registered taxable person from whom the said amount was deducted or, as the case may be, collected shall
be credited to his electronic cash ledger in accordance with the provisions of rule 87.
10 Where a person has claimed refund of any amount from the electronic cash ledger, the said
amount shall be debited to the electronic cash ledger.
157
11 If the refund so claimed is rejected, either fully or partly, the amount debited under sub-rule (10), to the
extent of rejection, shall be credited to the electronic cash ledger by the proper officer by an order made in
FORM GST PMT-03.
12 A registered person shall, upon noticing any discrepancy in his electronic cash ledger, communicate the same
to the officer exercising jurisdiction in the matter, through the common portal in FORM GST PMT-04.
Explanation 1: The refund shall be deemed to be rejected if the appeal is finally rejected.
Explanation 2: For the purposes of this rule, it is hereby clarified that a refund shall be deemed to be
rejected, if the appeal is finally rejected or if the claimant gives an undertaking to the proper officer that he
shall not file an appeal.
 Rule 88- Identification number for each transaction:
SRN Description
1 A unique identification number shall be generated at the common portal for each debit or
credit to the electronic cash or credit ledger, as the case may be.
2 The unique identification number relating to discharge of any liability shall be indicated in the
corresponding entry in the electronic liability register.
3 A unique identification number shall be generated at the common portal for each credit in the
electronic liability register for reasons other than those covered under sub-rule (2).
158
Illustration 1 –
The following are details of purchases, sales, etc. effected by M/s Ashish & Co. a registered manufacturer
under CGST Act, 2017 :
(1) Purchased Raw material ‘A’ from local dealer Rs. 1,72,200 (inclusive of GST @ 5%).
(2) Purchased Raw material ‘B’ from local dealer Rs. 2,24,000 (inclusive of GST @ 12%).
(3) Purchased capital goods from within the state to be used in manufacture of the taxable goods Rs. 3,92,000
(inclusive of GST @ 12%). Depreciation @ 15% to be charged.
(4) Other Direct and Indirect expenses Rs. 1,10,920.
(5) Earned 5% profit margin on total cost.
(6) During the month of November, 2017 only 70% production is sold within the state and applicable GST rate
being 12%.
Calculate the amount of CGST and SGST payable after utilising input tax credit for the month of October, 2017
assuming no opening balance of input tax credit is available.
Solution: Computation of Taxable value of supply :
Particulars Rs.
Purchase Raw material ‘A’ from local dealer [Rs 1,72,200×100÷105]
Purchase Raw material ‘B’ from local dealer [Rs 2,24,000×100÷112]
Depreciation expense [(Rs 3,92,000-3,92,000×12÷112)×15%]
Other direct and indirect expense
Total Cost of goods manufactured
Cost of goods sold (70% of goods produced were sold)
Add: Profit margin @ 5% of cost
Taxable value of supply
Working Note : Credit will be available for CGST and SGST charged by local suppliers. Hence, the same is not to
be included in the cost.
Computation of CGST and SGST payable for the month of October, 2017 after utilising the available input tax
credit. [assuming no ITC opening balance]
Particulars CGST (Rs.) SGST (Rs.)
Output tax liability for the month of November, 2017 @ 12% (being CGST
6% and SGST 6%)
Less: Eligible input tax credit in respect of purchases of –
Raw material ‘A’
Raw material ‘B’
Capital goods
CGST/SGST credit to be carried forward
159
Illustration 2 –
Ashish Ltd., a registered manufacturer in state of Uttar Pradesh provides the following particulars for tax
period of February, 2018.
(1) Inputs purchased within state Rs. 2,10,000 (includes GST @ 5%).
(2) Machinery purchased on 15-01-2018 for Rs. 2,00,000 (excluding 18% GST) from a local dealer in
Gujarat, eligible for input tax credit. Depreciation rate 15% p.a.
(3) Manufacturing expenses and profits Rs. 1,10,000
(4) Goods produced were sold outside Gujarat with IGST @ 18% on sales.
Calculate the amount of CGST and SGST payable after utilising input tax credit for the month of February, 2018
assuming no opening balance of input tax credit available.
Solution: Computation of Taxable value of supply and Tax liability :
Particulars Rs.
Inputs purchased from local dealer
Depreciation expense
Manufacturing Expense and profits
Output tax Liability (IGST @ 18%)
Less: Input tax credit available on :
Inputs –
 CGST
 SGST
Capital goods –
 CGST
 SGST
IGST to be deposited in cash
Illustration 3 –
Mr. K of Kolkata purchased goods from Mr. A of Assam amounting to Rs. 3,36,000 (including 18% IGST) in the
month of February, 2018. He also purchased raw material worth Rs. 2,50,000 from local dealer who has opted
for composition scheme. He incurred Rs. 1,00,000 as direct and indirect expenses and added profit margin @
12% of cost.
Mr. K sold 70% of finished goods to Mr. M of Mumbai with IGST @ 12% payable thereon, and 30% of finished
goods to Mr. N of Kolkata with CGST and SGST @ 12% payable thereon.
Compute the net CGST, SGST and IGST liability and input tax credit if any, for the month of March, 2018.
Solution: Computation of Taxable value of supply :
Particulars Rs.
Purchases of raw material from Mr. A of Assam [WN-1]
Purchases of raw material from dealer opted for composition scheme [WN-2]
Other direct and indirect expenses
160
Total Cost of goods manufactured

Add: Profit margin @ 12% of cost
Goods sold to Mr. M of Mumbai (70% of goods produced)
Goods sold to Mr. N of Kolkata (30% of goods produced)
Computation of GST liability :

Particulars CGST @ 6% SGST @ 6% IGST @ 12%
(Rs.) (Rs.) (Rs.)
Goods sold to Mr. M of Mumbai
Goods sold to Mr. N of Kolkata
Less: Eligible input tax credit in respect of purchases of –
Raw material (from Assam)
CGST/SGST/IGST to be paid in cash
Illustration 4 –
Ashish & Co., a registered dealer in Agra, Uttar Pradesh furnishes the following details of purchases and sales
pertaining to the month of July, 2018 :
Particulars Rs.
Goods ‘A’ purchased from local market (including GST @ 12%) 1,00,800
Goods ‘B’ purchased from Jaipur (including IGST @ 18%) 1,65,200
Sales made during the month to dealer of Kolkata of product :
 Goods ‘A’ 80,000
 Goods ‘B’ 50,000
Sales made within the state of Goods ‘B’ 70,000
Above sales amount is given is exclusive of tax. Compute the net CGST, SGST and IGST liability and input tax
credit, if any for the month of July, 2018.
Solution: Computation of GST liability :
Particulars CGST (Rs.) SGST (Rs.) IGST (Rs.)
Inter-State Sale :
Goods ‘A’ sold to Kolkata (IGST @ 12%)
Goods ‘B’ sold to Kolkata (IGST @ 18%)
Intra-State Sale :
Goods ‘B’ sold within state (CGST/SGST @ 9% each)
Less: Eligible Input tax credit
Net amount of CGST/SGST/IGST
Less: IGST used to set off payment liability of CGST and SGST in order
Net amount of IGST credit to be carried forward
161
162
 Tax Deduction at Source:
Contract value> 2.5 lakhs
SG SGST = 09
SG
CGST = 09 TDS = 01
TDS = 01
Value = 100
CGST = 09
SGST = 09 1) Dept of CG/SG
Total =118 2) Local Authority
3) Govt Agencies
4) Other persons
Gross payment = 118

TDS @1% [C] = (1)
X, Supplier TDS @1% [S] = (1) Y, Recipient
Net Payment = 116
NOTES:
1) TDS is to be deducted on the amount exclusive of GST.
2) TDS shall be paid to GOVT within 10 days of the following month.
163
51. Tax deduction at source:
Start:
A deductor of tax shall electronically submit an application duly signed in Form GST-REG-07 for granting
registration through common portal. The applicant is required to attach the proof of Principal POB.
If the applicant ceases to be liable to deduct tax at source, then the registration may be cancelled and the
intimation for cancellation shall be communicated to the applicant in Form GST-REG-08.
1 Who will Notwithstanding anything to the contrary contained in this Act, the Government may mandate-
deduct (a) a department or establishment of the Central Government or State Government; or
TDS? (b) local authority; or
(c) Governmental agencies; or
(d) such persons or category of persons as may be notified by the Government on the
recommendations of the Council,
(hereafter in this section referred to as “the deductor”), to deduct tax at the rate of one per cent
from the payment made or credited to the supplier (hereafter in this section referred to as “the
deductee”) of taxable goods or services or both, where the total value of such supply, under a
contract, exceeds two lakh and fifty thousand rupees:
PROVIDED that no deduction shall be made if the location of the supplier and the place of supply
is in a State or Union territory which is different from the State or as the case may be, Union
territory of registration of the recipient.
[LOS – Maharashtra, POS – Maharashtra, Recipient is registered in Gujarat -> No TDS]
Explanation - For the purpose of deduction of tax specified above, the value of supply shall be
taken as the amount excluding the central tax, State tax, Union territory tax, integrated tax and
cess indicated in the invoice.
 Understanding:
Normally, the specified agencies issues the Purchase Order for the purpose of procuring
goods or services. As per this section if the value of PO is Rs.2.5 lakhs or less than 2.5 lakhs,
no tax is required to be deducted. The tax will be deducted only where the value of goods &
services under one contract exceeds Rs.2.5 Lakhs.
The explanation further provides that the value of supply shall be considered as an amount
excluding the tax amount. Thus, assuming that the PO issued by the company is for Rs.3 lakhs
and the tax amount is Rs. 60,000. Thus, the value of goods or supply is Rs.3,00,000 minus
Rs.60,000 which is Rs.2,40,000. Since the value is less than 2,50,000 therefore no tax will be
deducted.
 Example:
X supplier has received two different purchase orders from B, Government department. The
details of the two purchase orders are:
a) PO number- 100 for Rs.2 lakhs
b) PO number- 101 for Rs.3 lakhs
No TDS is required to be deducted in respect of supplies made under PO No 100, as the value
of the contract is less than Rs.2.5 lakhs. The TDS is required to be deducted in respect of the
supplies to be made under PO number 101, as the PO is for the value of the contract above
Rs. 2.5 lakhs.
164
2 Cut-off The amount deducted as tax under this section shall be paid to the Government by the deductor
time for within ten days after the end of the month in which such deduction is made, in such manner as
payment may be prescribed.
of tax
deducted  Example:
Say, the TDS has been deducted in the month of Aug 2018, therefore the same has to paid to
th
the GOVT by 10 Sept 2018.
3 Certificate The deductor shall furnish to the deductee a certificate mentioning therein the contract value,
to rate of deduction, amount deducted, amount paid to the Government and such other particulars
Deductee in such manner as may be prescribed.
4 Time limit If any deductor fails to furnish to the deductee the certificate, after deducting the tax at source,
for within 5 days of crediting the amount so deducted to the Government, the deductor shall pay, by
furnishing way of a late fee, a sum of one hundred rupees per day from the day after the expiry of such five
the days period until the failure is rectified, subject to a maximum amount of 5,000 rupees.
Certificate-
5 days of  Example:
th
crediting In the above example, if the tax has been deposited by 10 Sept 2018 therefore the
th th
the certificate shall be furnished by 15 Sept 2018. If the certificate is NOT furnished by 15 Sept
th
amount to 2018, the person will be liable for the payment of late fees of Rs.100 per day from 16 Sept
th
the GOVT 2018 that is from the day after the expiry of the 5 day until the failure is rectified. The
Otherwise- section further provides the late fees shall not exceed Rs.5,000.
Late fees
5 Deductee The deductee shall claim credit, in his electronic cash ledger, of the tax deducted and reflected
shall claim in the return of the deductor furnished under sub-section (3) of section 39, in such manner as
the credit may be prescribed.
of TDS in
his E-CASH  Understanding:
LEDGER Every person required to deduct the tax at source shall furnish the return in FORM GSTR-7
within 10 days after the end of the month in which tax is deducted. The details of deduction
of tax is required to be disclosed in FORM GSTR-7 and from there the information
automatically flows to GSTR-2A and thus auto populated in FORM GSTR-2 and from there the
information flows to table 9A of FORM GSTR-3. The said amount shall be taken as credit in E-
Cash ledger.
6 If fails to If any deductor fails to pay to the Government the amount deducted as tax under subsection (1),
pay TDS to he shall pay interest in accordance with the provisions of sub-section (1) of section 50, in addition
Govt- to the amount of tax deducted.
(Interest to
be paid)
 Understanding:
Apart from the interest liability on the deductor, if the deductor deducts the tax but does not
deposit the same with the GOVT, the supplier will not get credit of the said tax deducted.
Even if the deductor pays the tax but does not files GSTR-7, the supplier will not get credit
of tax. Thus, it is essential that the supplier does follow up with the deductor to ensure that
the tax is paid by him and return is furnished by him.
7 How much The determination of the amount in default under this section shall be made in the manner
is the specified in section 73 or section74.
amount in
default??
8 Refund of The refund to the deductor or the deductee arising on account of excess or erroneous deduction
TDS is shall be dealt with in accordance with the provisions of section 54:
possible in
case of
165
excess or PROVIDED that no refund to the deductor shall be granted, if the amount deducted has been
erroneous credited to the electronic cash ledger of the deductee.
deduction
 Time of Deduction:
The liability to deduct tax arises when the payment is made to the supplier or credited to the account (BOA)
of the supplier.
Example–
Ashish Ltd. has supplied goods to local authority for Rs. 23,60,000 (inclusive of GST @ 18%). Determine the
amount of tax to be deducted at source. Also determine the interest liability if the tax deducted at source on
25-11-2017 is deposited 28-02-2018.
Solution: Computation of Interest on delay in deposit of TDS :
Due date for deposit of TDS [A] 10-12-2018
Date of payment of GST [B] 28-02-2018
Period of delay (in days) [C = B – A] 80
Amount of TDS 10,000
Interest payable @ 18% p.a. for delay in payment of days [Rs.20,000 × 18% × 80 ÷ 789
365 days]
166
 Understanding ECO:
CGST = 09 SGST = 09
TCS = (01) TCS = (01)
TCS = 01 TCS = 01
Net = 08 SG Net = 08 SG
Value = 100
CGST = 09
SGST = 09
Supply of Shoes Total =118
“Styles” Shoe
Company
Value = 118 Payment=118
TCS CGST (1%) = (1)
TCS SGST (1%) = (1) Recipient
Supplier
Net payment =116 ECO
SGST = 1.8
ECO’s invoice for services: CGST = 1.8

Value = 20 SG
CGST = 1.8
SGST = 1.8
Total = 23.6
167
52. Collection of tax at source:
1 When to Notwithstanding anything to the contrary contained in this Act,
Collect
TCS?  every electronic commerce operator (hereafter in this section referred to as the
“operator”),
 not being an agent,
 shall collect an amount calculated at such rate not exceeding one per cent, as may be
notified by the Government on the recommendations of the Council,
 of the net value of taxable supplies made through it by other suppliers where the
 consideration with respect to such supplies is to be collected by the operator.
Explanation - For the purposes of this sub-section, the expression “net value of taxable supplies”
shall mean the
 aggregate value of taxable supplies of goods or services or both,
 other than services notified under sub-section (5) of section 9,
 made during any month by all registered persons through the operator
 reduced by the aggregate value of taxable supplies returned to the suppliers during the
said month.
*Q. Whether the rate of tax of 1% specified in section 52 is CGST or SCGST or a

combination of both CGST and SGST?
*A. The rate of TCS as specified in CGST Act, 2017 is payable under CGST and the equal
rate of TCS is expected under the SGST Act also in effect aggregating to 2%.
*Q. If out of the total consideration received by the operator some part is adjusted
against receivable from the supplier, should tax be collected at source by the
operator even on such amount which is adjusted against other amounts received
from the supplier?
*A. Yes, as per Section 52, irrespective if the mode of recovery of consideration by the
supplier from the operator, tax should be collected at source on the net value as
defined in section 52 of the law. There is no deduction envisaged in the GST law in
this regard.
 Understanding:
TCS will be applicable in the above mentioned cases on the supplies effected through an
ecommerce operator for which the consideration is receivable by the e-commerce operator
from the end customer.
To explain further, if the supply is made through an e-commerce operator and if the
consideration is not received by the e-commerce operator but is received, say, directly by the
supplier of goods, the TCS provisions would not be applicable.
2 No affect The power to collect the amount specified in sub-section (1) shall be without prejudice to any
to other other mode of recovery from the operator.
powers
3 Time limit The amount collected under sub-section (1) shall be paid to the Government by the operator
for credit within ten days after the end of the month in which such collection is made, in such manner as
of amount- may be prescribed.
10 days
168
 Understanding:
st
Say the FY for 2017-18 ends on 31 March 2018, therefore the Annual Statement is required
st
to be submitted on or before 31 Dec 2018.
4 Monthly Every operator who collects the amount specified in sub-section (1) shall furnish a statement,
Statement- electronically, containing the details of outward supplies of goods or services or both effected
within 10 through it, including the supplies of goods or services or both returned through it, and the
days amount collected under sub-section (1) during a month, in such form and manner as may be
prescribed, within ten days after the end of such month.
5 Annual Every operator who collects the amount specified in sub-section (1) shall furnish an annual
Statement statement, electronically, containing the details of outward supplies of goods or services or both
st
– 31 Dec effected through it, including the supplies of goods or services or both returned through it, and
the amount collected under the said sub-section during the financial year, in such form and
manner as may be prescribed, before the thirty first day of December following the end of such
financial year.
 Understanding:
st
Say the FY for 2017-18 ends on 31 March 2018, therefore the Annual Statement is required
st
to be submitted on or before 31 Dec 2018.
6 Rectificatio If any operator after furnishing a statement under sub-section (4) discovers any omission or
n of incorrect particulars therein, other than as a result of scrutiny, audit, inspection or enforcement
statement activity by the tax authorities, he shall rectify such omission or incorrect particulars in the
statement to be furnished for the month during which such omission or incorrect particulars are
noticed, subject to payment of interest, as specified in sub-section (1) of section 50:
PROVIDED that no such rectification of any omission or incorrect particulars shall be allowed
 after the due date for furnishing of statement for the month of September following
the end of the financial year or
 the actual date of furnishing of the relevant annual statement,
 whichever is earlier.
 Example:
FY 2017-18 will end on March 2018. Sep following the end of FY is September 2018. The
th
monthly statement for September 2018 is required to be filed on 10 Oct 2018 and the
st
annual statement for 2017-18 is required to be filed before 31 Dec 2018. The proviso
provides that the omission or incorrect particulars are to be corrected before earlier of the
th
two dates. Say, ECO files annual statement on 30 Sept 2018 for FY 2017-18. He cannot
th
correct the omission or incorrect particulars after 30 Sept 2018. However, if the annual
th th
statement is filed after 10 Oct 2018 (say 15 Nov 2018), as per proviso, the last date for
corrections of any particulars or omission will be 10th Oct 2018.
7 E-Cash The supplier who has supplied the goods or services or both through the operator shall claim
ledger gets credit, in his electronic cash ledger, of the amount collected and reflected in the statement of the
credited operator furnished under sub-section (4), in such manner as may be prescribed.
with TCS
collected
8 Matching The details of supplies furnished by every operator under sub-section (4) shall be matched with
of details the corresponding details of outward supplies furnished by the concerned supplier registered
under this Act in such manner and within such time as may be prescribed.
[Details by the operator in his statement = Details by the supplier in his return]
169
9 Mismatch Where the details of outward supplies furnished by the operator under sub-section (4) do not
is to be match with the corresponding details furnished by the supplier under section 37, the
communic discrepancy shall be communicated to both persons in such manner and within such time as may
ate to be prescribed.
BOTH
10 If not The amount in respect of which any discrepancy is communicated under sub-section (9) and
rectified- which is not rectified by the supplier in his valid return or the operator in his statement for the
shall be month in which discrepancy is communicated, shall be added to the output tax liability of the
added to said supplier,
the OTL of
the WHERE THE VALUE OF OUTWARD SUPPLIES FURNISHED BY THE OPERATOR IS MORE THAN THE
supplier VALUE OF OUTWARD SUPPLIES FURNISHED BY THE SUPPLIER, in his return for the month
succeeding the month in which the discrepancy is communicated in such manner as may be
prescribed.
 Example:
Say, the discrepancy is communicated to the supplier in September 2017 and let say the
same has NOT been rectified by the supplier in his GSTR-1 and the operator in his statement
th
in GSTR-8 by 10 October 2017. The same discrepancy shall be added to the output tax
liability of the supplier if THE VALUE OF OUTWARD SUPPLIES FURNISHED BY THE OPERATOR
IS MORE THAN THE VALUE OF OUTWARD SUPPLIES FURNISHED BY THE SUPPLIER in the
return for the month succeeding the month in which discrepancy is communicated that
th
means in the return for the month of October 2017 which is to be filed on 10 November
2017.
11 Interest The concerned supplier, in whose output tax liability any amount has been added under sub-
payable on section (10), shall pay the tax payable in respect of such supply along with interest, at the rate
addition specified under sub-section (1) of section 50 on the amount so added from the date such tax was
made in due till the date of its payment.
the OTL of
supplier
12 Requesting Any authority not below the rank of Deputy Commissioner may serve a notice, either before or
for details during the course of any proceedings under this Act, requiring the operator to furnish such
details relating to—
(a) supplies of goods or services or both effected through such operator during any
period; or
(b) stock of goods held by the suppliers making supplies through such operator in the
godowns or warehouses, by whatever name called, managed by such operator and
declared as additional places of business by such suppliers, as may be specified in the
notice.
13 Details to Every operator on whom a notice has been served under sub-section (12) shall furnish the
be required information within fifteen working days of the date of service of such notice.
furnished -
15 working
days
14 Penalty-Rs. Any person who fails to furnish the information required by the notice served under subsection
25,000 (12) shall, without prejudice to any action that may be taken under section 122, be liable to a
penalty which may extend to twenty-five thousand rupees.
Concerned Explanation - For the purposes of this section, the expression “concerned supplier” shall mean
Supplier the supplier of goods or services or both making supplies through the operator.
170
 Example:
Mr. Ashish is a supplier selling his own products through a web site hosted by him. Does he fall under the
definition of an “electronic commerce operator”? Whether he is required to collect TCS on such supplies?
Ans: As per the definitions in Section 2(44) and 2(45) of the CGST Act, 2017, Mr. Ashish will come under the
definition of an “electronic commerce operator”. However, according to Section 52 of the Act, TCS is required
to be collected on the net value of taxable supplies made through it by other suppliers where the
consideration is to be collected by the ECO. In cases where someone is selling their own products through a
website, there is no requirement to collect tax at source as per the provisions of this Section. These
transactions will be liable to GST at the prevailing rates.
 Example:
Ashish Ltd. a registered supplier of goods is effecting supplies through E-Comm Ltd (an Electronic Commerce
operator). It has made taxable supplies of goods amounting Rs. 25,00,000 in month of December 2017
through E-Comm Ltd. E-comm Ltd. has returned goods amounting Rs. 2,50,000 to Ashish Ltd during the
month of December 2017. Determine the amount of tax to be collected at source by E-comm Ltd.
Solution: As per provisions of Section 52 of CGST Act, 2017, every electronic commerce operator, not being an
agent, shall collect an amount calculated at such rate not exceeding 1%, as may be notified by the Government
on the recommendations of the Council, of the net value of taxable supplies made through it by other
suppliers where the consideration with respect to such supplies is to be collected by the operator.
Thus, the amount of tax to be collected at source by E-Comm Ltd. is as under :
Particulars Rs.
Value of taxable supplies of goods made by Ashish Ltd. 35,00,000
Less: Value of taxable supplies of goods returned to Ashish Ltd. 3,50,000
Amount on which tax is to be collected at source 31,50,000
Rate of TCS 1%
Amount of TCS 31,500
 FAQs:
Q. In case the e-commerce operator agrees to bear a part of the discount offered by the supplier on the
products, is the e-commerce operator required to collect tax at source on such discount borne by him?
a) Yes, as this can be considered as consideration received from the customer
b) No, this cannot be considered as consideration received from the customer
A. Yes, as this can be considered as consideration received from the customer
Note:-
Provisions of Section 51 and 52 in respect of TDS/TCS have been postponed till 31-03-2018 as per decision
made in 22nd meeting of GST council on 06-10-2017.
171
53. Transfer of input tax credit:
53 Transfer of On utilisation of input tax credit availed under this Act for payment of tax dues under the
ITC Integrated Goods and Services Tax Act in accordance with the provisions of sub-section
(5) of section 49, as reflected in the valid return furnished under sub-section (1) of section
39, the amount collected as central tax shall stand reduced by an amount equal to such
credit so utilised and the Central Government shall transfer an amount equal to the
amount so reduced from the central tax account to the integrated tax account in such
manner and within such time as may be prescribed.
172
INTRA-STATE SUPPLY:
I. Supply of goods/ services by A (UP) to B (UP)
Particulars Amount (in Rs)
Value charged for supply of goods/ services 10,000
Add: CGST @ 9% 900
Add: SGST @ 9% 900
Total price charged by A from B for local supply of 11,800
goods/ services
II. Supply of goods/services by B (UP) to C (UP) – Value addition @ 20%

Value charged (Rs 10,000 x 120%) 12,000
Add: CGST @ 9% 1,080
Add: SGST @ 9% 1,080
Total price charged by A from B for local supply of 14,160
goods/ services
Computation of CGST, SGST payable by B to Government

CGST payable 1,080
Less: Credit of CGST 900
CGST payable to Central Government 180
SGST payable (UP GOVT) 1,080

Less: Credit of SGST 900
SGST payable to State Government 180
Statement of revenue earned by CG and SG:

Particulars Revenue to CG (Rs) Revenue to UP (Rs)
Supply by A(UP) to B (UP) 900 900
Supply by B (UP) to C (UP) 180 180

Total 1,080 1,080
173
INTER-STATE SUPPLY:
I. Supply of goods/services by X (UP) to A (UP)
Value charged for supply of goods/ services 10,000
Add: CGST @ 9% 900
Add: SGST @ 9% 900
Total price charged by X from A for intra-State 11,800
supply of goods/services
II. Supply of goods/services by A (UP) to B (UK)– Value addition @
20%
Value charged (Rs 10,000 x 120%) 12,000
Add: IGST @ 18% 2,160
Total price charged by A from B for inter-State 14,160
Computation of IGST payable to Government (CG)

IGST payable 2,160
Less: Credit of CGST 900
Less: Credit of SGST 900
IGST payable to Central Government 360
UP (Exporting State) will transfer SGST credit of Rs. 900 utilised in the
payment of IGST to the Central Government.
174
III. Supply of goods/services by B (UK) to C (UK) – Value addition @ 20%

Value charged (Rs.12,000 x 120%) 14,400
Add: CGST @ 9% 1,296
Add: SGST @ 9% 1,296
Total price charged by B (UK) from C (UK) for local 16,992
Computation of CGST, SGST payable to Government

CGST payable 1,296
Less: Credit of IGST 1,296
CGST payable to Central Government Nil
SGST payable 1,296
Less: Credit of IGST (Rs.2,160 - Rs.1,296) 864
SGST payable to State Government (UK) 432
Statement of revenue earned by CG and SG:

Particulars Revenue to CG Revenue to Revenue to
(Rs) SG-1 (Rs) SG-2 (Rs)
Supply by X to A 900 900
Supply by A to B 360
Transfer by UP to 900 (900)
Centre
Supply of goods/ 432
services by B to C
Transfer by Centre to 864
UK
Total 1,296 Nil 1,296
175
Particulars Revenue to Revenue to Revenue Revenue

CG -CGST CG - IGST to UP to UK
(Rs) (Rs) (Rs) (Rs)
Supply by X to A 900 900
Supply by A to B 360
Transfer by UP to 900 (900)
Centre (IGST)
Transfer by CG (CGST ) (900) 900
to CG (IGST)
Supply of goods/ 432
services by B to C
Transfer by Centre to (864) 864
UK
Transfer by CG (IGST ) 1,296 (1,296)
to CG (CGST)
Total 1,296 Nil Nil 1,296
176
GSTIN- XXXX
Legal Name – XXXX
Tax period - XXXX
177
178
>> Interest on delayed refunds:
2 years Interest
RD =22-10-18 21-10-20 Date of Refund

25-03-21
Application filed 14-11-20

15-09-20
NOTES:
1) Period between 15-09-20 to 14-11-20 is 60 days.
2) Interest shall be paid from 14-11-20 till 25-03-21.
179
Chapter XI
REFUNDS
SN Particulars
54 Refund of tax
55 Refund in certain cases
56 Interest on delayed refunds
57 Consumer Welfare Fund
58 Utilisation of Fund
 Situations where REFUND would arise:
SN Description
i) Refund of Pre – deposit for filing appeal including refund arising in pursuance of an appellate authority’s
order (when the appeal is decided in favour of the appellant) and Payment of duty / tax during
investigation but no/ less liability arises at the time of finalization of investigation / adjudication.
ii) Finalization of provisional assessment.
iii) Export of goods / services under claim of rebate or refund of accumulated input credit of duty / tax when
goods / services are exported.
iv) Tax paid on supply of Goods and Services to SEZ unit or SEZ developer.
v) Credit accumulation due to inverted duty structure i.e. due to tax rate differential between output and
inputs.
vi) Refund of tax payment on purchases made by Embassies or UN bodies.

vii) Others (Excess payment of tax due to mistake or inadvertence, Refund to Casual Taxable person or Non-
Resident Taxable Person, Refund to tax refund for International Tourists (Refer Section 15 of the IGST Act)
180
54. Refund of Tax:
1 Apply within Any person claiming refund of any tax and interest, if any, paid on such tax or Refund of tax.
2 years from any other amount paid by him, may make an application before the expiry of two years from
the RD the relevant date in such form and manner as may be prescribed:
E- Cash PROVIDED that a registered person, claiming refund of any balance in the electronic cash
ledger - ledger in accordance with the provisions of sub-section (6) of section 49, may claim such
Return refund in the return furnished under section 39 in such manner as may be prescribed.
2 Refund of tax  A specialised agency of the United Nations Organisation or

paid on  any Multilateral Financial Institution and Organisation notified under the United Nations
inward (Privileges and Immunities) Act, 1947,
supplies-  Consulate or Embassy of foreign countries or any other person or class of persons, as
GSTR-11 notified under section 55,
Claim within entitled to a refund of tax paid by it on inward supplies of goods or services or both, may
Six months make an application for such refund, in such form and manner as may be prescribed, before
the expiry of six months from the last day of the quarter in which such supply was received.
 Example:
th th
Say the supply is received on 20 July 2018, six months shall be computed from 30
st
September, 2018 onwards. Six months will therefore expire on 31 March 2019. The
st
refund claim for supply made in July 2018 shall be made on or before 31 March 2019.
3 Exports Subject to the provisions of sub-section (10), a registered person may claim refund of any
(Export Duty) unutilised input tax credit at the end of any tax period:
+ Zero rated
supplies +
ROT tax on PROVIDED that no refund of unutilised input tax credit shall be allowed in cases other than––
inputs being
higher than (i) zero rated supplies made WITHOUT payment of tax;
the ROT on
output (ii) where the credit has accumulated on account of rate of tax on inputs being higher
supplies than the rate of tax on output supplies (other than nil rated or fully exempt
supplies), except supplies of goods or services or both as may be notified by the
Government on the recommendations of the Council:
If the PROVIDED FURTHER that no refund of unutilised input tax credit shall be allowed in cases
supplier where the goods exported out of India are subjected to EXPORT DUTY:
claims DBK
or refund of PROVIDED also that no refund of input tax credit shall be allowed, if the supplier of goods or
Output tax is services or both avails of DRAWBACK in respect of central tax or claims refund of the
claimed then integrated tax paid on such supplies.
no refund of
ITC Q. Whether refund of unutilized credit at the end of tax period can be claimed
by supplier who does not have any exports.
A. Yes. It is available in cases where the accumulation of credit is for the reason of
tax rate on inputs being higher, than the rate of tax on outputs.
4 Application The application shall be accompanied by—

with
documentary
evidences (a) such documentary evidence as may be prescribed to establish that a refund is
Indicating due to the applicant; and
181
that
incidence has (b) such documentary or other evidence (including the documents referred to in
not been section 33) as the applicant may furnish to establish that the amount of tax and
passed interest, if any, paid on such tax or any other amount paid in relation to which such
refund is claimed was collected from, or paid by, him and the incidence of such tax
and interest had not been passed on to any other person:
Refunds < 2 PROVIDED that where the amount claimed as refund is less than two lakh rupees, it shall not
lakhs------ be necessary for the applicant to furnish any documentary and other evidences but he may
Declaration file a declaration, based on the documentary or other evidences available with him, certifying
will suffice that the incidence of such tax and interest had not been passed on to any other person.
5 Order of PO- If, on receipt of any such application, the proper officer is satisfied that the whole or part of
if found the amount claimed as refund is refundable, he may make an order accordingly and the
refundable- amount so determined shall be credited to the Fund referred to in section 57.
credited to
the Fund Q. What happens in case the incidence of duty/tax has been passed on by the
person claiming the refund?
A. The refund claimed and eligible will be credited to Consumer Welfare Fund.
6 Refund in Notwithstanding anything contained in sub-section (5), the proper officer may, in the case of
case of Zero any claim for refund on account of zero-rated supply of goods or services or both made by
Rated Supply registered persons, other than such category of registered persons as may be notified by the
Government on the recommendations of the Council, refund on a provisional basis, ninety
per cent. of the total amount so claimed, excluding the amount of input tax credit
provisionally accepted, in such manner and subject to such conditions, limitations and
safeguards as may be prescribed and thereafter make an order under sub-section (5) for final
settlement of the refund claim after due verification of documents furnished by the
applicant.
7 Time limit for The proper officer shall issue the order under sub-section (5) within sixty days from the date
passing of of receipt of application complete in all respects.
Order in case
of exports
8 When the Notwithstanding anything contained in sub-section (5), the refundable amount shall, instead
amount of being credited to the Fund, be paid to the applicant, if such amount is relatable to—
instead of
being (a)refund of tax paid on zero-rated supplies of goods or services or both or on inputs
credited to or input services used in making such zero-rated supplies;
Fund be
given to (b) refund of unutilised input tax credit under sub-section (3);
Applicant
(c) refund of tax paid on a supply which is not provided, either wholly or partially,
(Very and for which invoice has not been issued, or where a refund voucher (payment) has
Important) been issued;
(d) refund of tax in pursuance of section 77;
(e) the tax and interest, if any, or any other amount paid by the applicant, if he had
not passed on the incidence of such tax and interest to any other person; or
(f) the tax or interest borne by such other class of applicants as the Government may,
on the recommendations of the Council, by notification, specify.
182
9 Only 6 Notwithstanding anything to the contrary contained in any judgment, decree, order or
reasons for direction of the Appellate Tribunal or any court or in any other provisions of this Act or the
refund as rules made thereunder or in any other law for the time being in force, no refund shall be
listed above made except in accordance with the provisions of sub-section (8).
10 Default in Where any refund is due under sub-section (3) to a registered person who has defaulted in
furnishing of furnishing any return or who is required to pay any tax, interest or penalty, which has not
return & been stayed by any court, Tribunal or Appellate Authority by the specified date, the proper
payment of officer may—
tax-- by the
specified (a) withhold payment of refund due until the said person has furnished the return or
date paid the tax, interest or penalty, as the case may be;
(Very Imp) (b) deduct from the refund due, any tax, interest, penalty, fee or any other amount
which the taxable person is liable to pay but which remains unpaid under this Act or
under the existing law.
Explanation - For the purposes of this sub-section, the expression “specified date” shall mean
the last date for filing an appeal under this Act.
11 Order giving Where an order giving rise to a refund is the subject matter of an appeal or further
rise to refund proceedings or where any other proceedings under this Act is pending and the Commissioner
is a subject is of the opinion that grant of such refund is likely to adversely affect the revenue in the said
matter of appeal or other proceedings on account of malfeasance or fraud committed, he may, after
appeal- giving the taxable person an opportunity of being heard, withhold the refund till such time as
withholding he may determine.
the refund
12 Refund- Where a refund is withheld under sub-section (11), the taxable person shall, notwithstanding
withheld ,the anything contained in section 56, be entitled to interest at such rate not exceeding six per
applicant is cent. as may be notified on the recommendations of the Council, if as a result of the appeal or
entitled for further proceedings he becomes entitled to refund.
INTEREST
13 Casual Notwithstanding anything to the contrary contained in this section, the amount of advance
Taxable tax deposited by a casual taxable person or a non-resident taxable person under sub-section
person & NR (2) of section 27, shall not be refunded unless such person has, in respect of the entire period
taxable for which the certificate of registration granted to him had remained in force, furnished all the
person returns required under section 39.
14 No refund if Notwithstanding anything contained in this section, no refund under sub-section (5) or sub-
it is less than section (6) shall be paid to an applicant, if the amount is less than one thousand rupees.
Rs.1,000
Explanation - For the purposes of this section,––
1. Refund “Refund” includes

 refund of tax paid on zero-rated supplies of goods or services or both or on inputs or
input services used in making such zero-rated supplies, or
 refund of tax on the supply of goods regarded as deemed exports, or
 refund of unutilised input tax credit as provided under sub-section (3).
2.Relevant “Relevant date” means—

date
Export of (a) in the case of goods exported out of India where a refund of tax paid is available in respect
Goods of goods themselves or, as the case may be, the inputs or input services used in such goods,–
–
(i) if the goods are exported by sea or air, the date on which the ship or the aircraft in which
183
such goods are loaded, leaves India; or
(ii) if the goods are exported by land, the date on which such goods pass the frontier; or
(iii) if the goods are exported by post, the date of despatch of goods by the Post Office
concerned to a place outside India;
Deemed (b) in the case of supply of goods regarded as deemed exports where a refund of tax paid is
Export of available in respect of the goods, the date on which the return relating to such deemed
goods exports is furnished;
Export of (c) in the case of services exported out of India where a refund of tax paid is available in
Services 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, 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;
Judgment, (d) in case where the tax becomes refundable as a consequence of judgment, decree, order
decree or direction of the Appellate Authority, Appellate Tribunal or any court, the date of
communication of such judgment, decree, order or direction;
Refund of (e) in the case of refund of unutilised input tax credit under sub-section (3), the end of the
unutilized financial year in which such claim for refund arises;
Provisional (f) in the case where tax is paid provisionally under this Act or the rules made thereunder,
Assessment the date of adjustment of tax after the final assessment thereof;
Date of (g) in the case of a person, other than the supplier, the date of receipt of goods or services or
receipt of G both by such person; and
&/or S
Payment of (h) in any other case, the date of payment of tax.
tax
55. Refund in certain cases:
55 Refund in The Government may, on the recommendations of the Council, by notification, specify any
case of
supplies of  specialised agency of the United Nations Organisation or
goods &/or
services  any Multilateral Financial Institution and Organisation notified under the United Nations
received (Privileges and Immunities) Act, 1947,
by notified
persons  Consulate or Embassy of foreign countries and any other person or class of persons as may
be specified in this behalf, who shall, subject to such conditions and restrictions as may be
prescribed,
be entitled to claim a refund of taxes paid on the notified supplies of goods or services or both
received by them.
184
56. Interest on delayed refunds:
56 60 days- If any tax ordered to be refunded under sub-section (5) of section 54 to any applicant is not
processing refunded within sixty days from the date of receipt of application under sub-section (1) of that
time from section, interest at such rate not exceeding six per cent. as may be specified in the notification
date of issued by the Government on the recommendations of the Council shall be payable in respect of
receipt of such refund from the date immediately after the expiry of sixty days from the date of receipt of
application application under the said sub-section till the date of refund of such tax:
 Example:
X Ltd has filed a refund claim of excess tax paid with all the documents and records on
19.06.2018. The department sanctioned the refund on 30.09.2018. In such a case, interest
has to be paid for the period from 18.08.2018 to 30.09.2018.
Order of PROVIDED that where any claim of refund arises from an order passed by an adjudicating
Appellate authority or Appellate Authority or Appellate Tribunal or court which has attained finality and
Authority = the same is not refunded within sixty days from the date of receipt of application filed
Order of consequent to such order, interest at such rate not exceeding nine per cent. as may be notified
PO by the Government on the recommendations of the Council shall be payable in respect of such
refund from the date immediately after the expiry of sixty days from the date of receipt of
application till the date of refund.
Explanation – For the purposes of this section, where any order of refund is made by an
Appellate Authority, Appellate Tribunal or any court against an order of the proper officer
under sub-section (5) of section 54, the order passed by the Appellate Authority, Appellate
Tribunal or by the court shall be deemed to be an order passed under the said sub-section (5).
 Example:
A Ltd has filed a refund claim of excess tax paid with all the documents and records on
19.06.2018. It was rejected by refund sanctioning authority. On Appeal the Appellate
Authority passed the order for refund based on which the department sanctioned the
refund on 30.07.2019. In such a case interest has to be paid for the period from 18.08.2018
to 30.07.2019 (i.e. 345 days).
 Illustration:
M/s Ashish Ltd filed an application for refund of tax amounting Rs. 10,00,000 on 1-09-2017. The refund was
granted on 25-11-2017. Compute the amount of interest, if any payable to RLL Ltd. as per provisions of
Section 56 of the CGST Act, 2017.
Solution: If any tax ordered to be refunded under section 54(5) to any applicant, and such tax is not refunded
within 60 days from the date of receipt of application under section 54(1), interest @ 6% p.a. shall be payable
in respect of such refund from the date immediately after the expiry of 60 days from the date of receipt of
application till the date of refund of such tax.
The relevant computation is as follows (amounts in Rs.) –
Amount of refund [A] 10,00,000
Date of making application [B] 01-09-2017
60 days period from the date of application expires on – [C] = [B] + 60 days 30-10-2017
Date of making refund [D] 25-11-2017
No. of days for which interest to be granted [E] = [D] – [C] 26
185
Interest on refund @ 6% 10,00,000 × 6% X 26 ÷ 365 4,274
 Rule 89- Application for refund of tax, interest, penalty, fees or any other amount:
RN Description
1 Any person, except the persons covered under notification issued under section 55, claiming refund of any
tax, interest, penalty, fees or any other amount paid by him, other than refund of integrated tax paid on
goods exported out of India, may file an application electronically in FORM GST RFD-01 through the common
portal, either directly or through a Facilitation Centre notified by the Commissioner:
Provided that any claim for refund relating to balance in the electronic cash ledger in accordance with the
provisions of sub-section (6) of section 49 may be made through the return furnished for the relevant tax
period in FORM GSTR-3 or FORM GSTR-4 or FORM GSTR-7, as the case may be:
Provided further that in respect of supplies to a Special Economic Zone unit or a Special Economic Zone
developer, the application for refund shall be filed by the –
a) supplier of goods after such goods have been admitted in full in the Special Economic Zone for
authorised operations, as endorsed by the specified officer of the Zone;
b) supplier of services along with such evidence regarding receipt of services for authorised operations as
endorsed by the specified officer of the Zone:
Provided also that in respect of supplies regarded as deemed exports, the application shall be filed by the
recipient of deemed export supplies:
Provided also that refund of any amount, after adjusting the tax payable by the applicant out of the advance
tax deposited by him under section 27 at the time of registration, shall be claimed in the last return required
to be furnished by him.
2 The application under sub-rule (1) shall be accompanied by any of the following documentary evidences in
Annexure 1 in Form GST RFD-01, as applicable, to establish that a refund is due to the applicant, namely:-
a) the reference number of the order and a copy of the order passed by the proper officer or an appellate
authority or Appellate Tribunal or court resulting in such refund or reference number of the payment of
the amount specified in subsection (6) of section 107 and sub-section (8) of section 112 claimed as
refund;
b) a statement containing the number and date of shipping bills or bills of export and the number and the
date of the relevant export invoices, in a case where the refund is on account of export of goods;
c) a statement containing the number and date of invoices and the relevant Bank Realisation Certificates
or Foreign Inward Remittance Certificates, as the case may be, in a case where the refund is on account
of the export of services;
d) a statement containing the number and date of invoices as provided in rule 46 along with the evidence
regarding the endorsement specified in the second proviso to subrule (1) in the case of the supply of
goods made to a Special Economic Zone unit or a Special Economic Zone developer;
e) a statement containing the number and date of invoices, the evidence regarding the endorsement
specified in the second proviso to sub-rule (1) and the details of payment, along with the proof thereof,
made by the recipient to the supplier for authorised operations as defined under the Special Economic
Zone Act, 2005, in a case where the refund is on account of supply of services made to a Special
Economic Zone unit or a Special Economic Zone developer;
f) a declaration to the effect that the Special Economic Zone unit or the Special Economic Zone developer
has not availed the input tax credit of the tax paid by the supplier of goods or services or both, in a case
where the refund is on account of supply of goods or services made to a Special Economic Zone unit or a
Special Economic Zone developer;
186
g) a statement containing the number and date of invoices along with such other evidence as may be
notified in this behalf, in a case where the refund is on account of deemed exports;
h) a statement containing the number and the date of the invoices received and issued during a tax period
in a case where the claim pertains to refund of any unutilised input tax credit under sub-section (3) of
section 54 where the credit has accumulated on account of the rate of tax on the inputs being higher
than the rate of tax on output supplies, other than nil-rated or fully exempt supplies;
i) the reference number of the final assessment order and a copy of the said order in a case where the
refund arises on account of the finalisation of provisional assessment;
j) a statement showing the details of transactions considered as intra-State supply but which is
subsequently held to be inter-State supply;
k) a statement showing the details of the amount of claim on account of excess payment of tax;
l) a declaration to the effect that the incidence of tax, interest or any other amount claimed as refund has
not been passed on to any other person, in a case where the amount of refund claimed does not exceed
two lakh rupees.
Provided that a declaration is not required to be furnished in respect of the cases covered under clause
(a) or clause (b) or clause (c) or clause (d) or clause (f) of subsection (8) of section 54;
m) a Certificate in Annexure 2 of FORM GST RFD-01 issued by a chartered accountant or a cost accountant
to the effect that the incidence of tax, interest or any other amount claimed as refund has not been
passed on to any other person, in a case where the amount of refund claimed exceeds two lakh rupees:
Provided that a certificate is not required to be furnished in respect of cases covered under clause (a) or
clause (b) or clause (c) or clause (d) or clause (f) of subsection (8) of section 54;
Explanation: For the purposes of this rule

i) in case of refunds referred to in clause (c) of sub-section (8) of section 54, the expression “invoice”
means invoice conforming to the provisions contained in section 31;
ii) where the amount of tax has been recovered from the recipient, it shall be deemed that the
incidence of tax has been passed on to the ultimate consumer.
3 Where the application relates to refund of input tax credit, the electronic credit ledger shall be debited by
the applicant by an amount equal to the refund so claimed.
4 In the case of zero-rated supply of goods or services or both without payment of tax under bond or letter of
undertaking in accordance with the provisions of sub-section (3) of section 16 of the Integrated Goods and
Services Tax Act, 2017 (13 of 2017), refund of input tax credit shall be granted as per the following formula -
Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated supply of services) x
Net ITC ÷Adjusted Total Turnover
Where,-
A) "Refund amount" means the maximum refund that is admissible;
B) "Net ITC" means input tax credit availed on inputs and input services during the relevant period;
C) "Turnover of zero-rated supply of goods" means the value of zero-rated supply of goods made during
the relevant period without payment of tax under bond or letter of undertaking;
D) "Turnover of zero-rated supply of services" means the value of zero-rated supply of services made
without payment of tax under bond or letter of undertaking, calculated in the following manner,
namely:-
187
Zero-rated supply of services is the aggregate of the payments received during the relevant period for
zero-rated supply of services and zero-rated supply of services where supply has been completed for
which payment had been received in advance in any period prior to the relevant period reduced by
advances received for zero-rated supply of services for which the supply of services has not been
completed during the relevant period;
E) "Adjusted Total turnover" means the turnover in a State or a Union territory, as defined under clause
(112) of section 2, EXCLUDING the value of exempt supplies other than zero-rated supplies, during the
relevant period;
F) “Relevant period” means the period for which the claim has been filed.
5 In the case of refund on account of inverted duty structure, refund of input tax credit shall be
granted as per the following formula -
Maximum Refund Amount = {(Turnover of inverted rated supply of goods) x Net ITC ÷ Adjusted Total
Turnover} - tax payable on such inverted rated supply of goods
Explanation: For the purposes of this sub rule, the expressions “Net ITC” and “Adjusted Total turnover” shall
have the same meanings as assigned to them in sub-rule (4).
 Illustration:
M Ltd furnishes following information and requests you to compute the maximum refund eligible in respect of
Zero-rated supplies for the relevant period:
SN Particulars Rs.
1) ITC availed on inputs 2,75,000
2) ITC availed on input services 1,25,000
3) ITC availed on Capital Goods 2,50,000
4) Taxable value of goods exported without payment of tax 10,00,000
5) Value of goods supplied within India (includes exempt supply of Rs.3,00,000) 40,00,000
6) Payment received towards services supplied for exports (includes Rs.50,000 of 6,50,000
advance towards services to be supplied/exported after the current relevant
period)
7) Taxable value of services supplied within India 7,00,000
Solution:
Computation of maximum refund admissible in respect of Zero-rated supplies:
Particulars Rs.
Net ITC (A) 4,00,000
[ITC availed on only on inputs and input services Capital Goods during the relevant period]
Turnover of zero-rated supply of goods (B) 10,00,000

[Value of zero-rated supply of goods made during the relevant period without payment of
tax under bond or letter of undertaking]
Turnover of zero-rated supply of services © 6,00,000

[advance received towards services to be supplied/ exported after the current relevant
period shall not be included] {6,50,000-50,000}
Adjusted Total turnover (D) 60,00,000
188
Value of Zero rated supplies of goods and services – 16,00,000

Turnover in State [{40,00,000-3,00,000} + 7,00,000] – 44,00,000
Maximum refund = [{(B)+(C)}/(D)*(A)] 1,06,667
 Rule 90- Acknowledgement:
SRN Description
1 Where the application relates to a claim for refund from the electronic cash ledger, an acknowledgement in
FORM GST RFD-02 shall be made available to the applicant through the common portal electronically, clearly
indicating the date of filing of the claim for refund and the time period specified in sub-section (7) of section
54 shall be counted from such date of filing.
2 The application for refund, other than claim for refund from electronic cash ledger, shall be forwarded to the
proper officer who shall, within a period of fifteen days of filing of the said application, scrutinize the
application for its completeness and where the application is found to be complete in terms of sub-rule (2),
(3) and (4) of rule 89, an acknowledgement in FORM GST RFD-02 shall be made available to the applicant
through the common portal electronically, clearly indicating the date of filing of the claim for refund and the
time period specified in sub-section (7) of section 54 shall be counted from such date of filing.
3 Where any deficiencies are noticed, the proper officer shall communicate the deficiencies to the applicant in
FORM GST RFD-03 through the common portal electronically, requiring him to file a fresh refund application
after rectification of such deficiencies.
4 Where deficiencies have been communicated in FORM GST RFD-03 under the State Goods and Service Tax
Rules, 2017, the same shall also deemed to have been communicated under this rule along with the
deficiencies communicated under sub-rule (3).
 Rule 91- Grant of provisional refund:
SRN Description
1 The provisional refund in accordance with the provisions of sub-section (6) of section 54 shall be granted
subject to the condition that the person claiming refund has, during any period of five years immediately
preceding the tax period to which the claim for refund relates, not been prosecuted for any offence under
the Act or under an existing law where the amount of tax evaded exceeds two hundred and fifty lakh rupees.
2 The proper officer, after scrutiny of the claim and the evidence submitted in support thereof and on being
prima facie satisfied that the amount claimed as refund under sub-rule (1) is due to the applicant in
accordance with the provisions of sub-section (6) of section 54, shall make an order in FORM GST RFD-04,
sanctioning the amount of refund due to the said applicant on a provisional basis within a period not
exceeding seven days from the date of the acknowledgement under sub-rule (1) or sub-rule (2) of rule 90.
3 The proper officer shall issue a payment advice in FORM GST RFD-05 for the amount sanctioned under sub-
rule (2) and the same shall be electronically credited to any of the bank accounts of the applicant mentioned
in his registration particulars and as specified in the application for refund.
 Rule 92- Order sanctioning refund:
SRN Description
1 Where, upon examination of the application, the proper officer is satisfied that a refund under sub-section
(5) of section 54 is due and payable to the applicant, he shall make an order in FORM GST RFD-06 sanctioning
the amount of refund to which the applicant is entitled, mentioning therein the amount, if any, refunded to
him on a provisional basis under subsection (6) of section 54, amount adjusted against any outstanding
demand under the Act or under any existing law and the balance amount refundable:
Provided that in cases where the amount of refund is completely adjusted against any outstanding demand
189
under the Act or under any existing law, an order giving details of the adjustment shall be issued in Part A of
FORM GST RFD-07.
2 Where the proper officer or the Commissioner is of the opinion that the amount of refund is liable to be
withheld under the provisions of sub-section (10) or, as the case may be, subsection (11) of section 54, he
shall pass an order in Part B of FORM GST RFD-07 informing him the reasons for withholding of such refund.
3 Where the proper officer is satisfied, for reasons to be recorded in writing, that the whole or any part of the
amount claimed as refund is not admissible or is not payable to the applicant, he shall issue a notice in FORM
GST RFD-08 to the applicant, requiring him to furnish a reply in FORM GST RFD-09 within a period of fifteen
days of the receipt of such notice and after considering the reply, make an order in FORM GST RFD-06
sanctioning the amount of refund in whole or part, or rejecting the said refund claim and the said order shall
be made available to the applicant electronically and the provisions of sub-rule (1) shall, mutatis
mutandis, apply to the extent refund is allowed.
Provided that no application for refund shall be rejected without giving the applicant an opportunity of being
heard.
4 Where the proper officer is satisfied that the amount refundable under sub-rule (1) or subrule (2) is payable
to the applicant under sub-section (8) of section 54, he shall make an order in FORM GST RFD-06 and issue a
payment advice in FORM GST RFD-05 for the amount of refund and the same shall be electronically credited
to any of the bank accounts of the applicant mentioned in his registration particulars and as specified in the
application for refund.
5 Where the proper officer is satisfied that the amount refundable under sub-rule (1) or subrule (2) is not
payable to the applicant under sub-section (8) of section 54, he shall make an order in FORM GST RFD-06
and issue an advice in FORM GST RFD-05, for the amount of refund to be credited to the Consumer Welfare
Fund.
 Rule 93- Credit of the amount of rejected refund claim:
SRN Description
1 Where any deficiencies have been communicated under sub-rule (3) of rule 90, the amount debited under
sub-rule (3) of rule 89 shall be re-credited to the electronic credit ledger.
2 Where any amount claimed as refund is rejected under rule 92, either fully or partly, the amount debited, to
the extent of rejection, shall be re-credited to the electronic credit ledger by an order made in FORM GST
PMT-03.
Explanation: For the purposes of this rule, a refund shall be deemed to be rejected, if the appeal is finally
rejected or if the claimant gives an undertaking in writing to the proper officer that he shall not file an
appeal.
 Rule 94- Order sanctioning interest on delayed refunds:
RN Description
94 Where any interest is due and payable to the applicant under section 56, the proper officer shall make an
order along with a payment advice in FORM GST RFD-05, specifying therein the amount of refund which is
delayed, the period of delay for which interest is payable and the amount of interest payable, and such
amount of interest shall be electronically credited to any of the bank accounts of the applicant mentioned in
his registration particulars and as specified in the application for refund.
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57. Consumer Welfare Fund:
55 The credits The Government shall constitute a Fund, to be called the Consumer Welfare Fund and there
to the fund shall be credited to the Fund, -
(a) the amount referred to in sub-section (5) of section 54 [General credit to CWF];
(b) any income from investment of the amount credited to the Fund; and
(c) such other monies received by it, in such manner as may be prescribed.
58. Utilisation of Fund:
1 Welfare of All sums credited to the Fund shall be utilised by the Government for the welfare of the
consumers consumers in such manner as may be prescribed.
2 Maintenan The Government or the authority specified by it shall maintain proper and separate account
ce of and other relevant records in relation to the Fund and prepare an annual statement of accounts
accounts in in such form as may be prescribed in consultation with the Comptroller and Auditor General of
relation to India.
the fund
Q. How can it be traced whether the amount in the fund is utilised for the welfare of
the consumers?
A. The Central/State Government shall maintain proper and separate account and
other relevant records in relation to the Fund in such form as may be prescribed in
consultation with the Comptroller and Auditor-General of India. From these
records, it can be ascertained if the amounts in the fund were utilised for the
welfare of the consumers.
 Rule 95- Refund of tax to certain persons:
SRN Description
1 Any person eligible to claim refund of tax paid by him on his inward supplies as per notification issued
section 55 shall apply for refund in FORM GST RFD-10 once in every quarter, electronically on the common
portal, either directly or through a Facilitation Centre notified by the Commissioner, along with a statement
of the inward supplies of goods or services or both in FORM GSTR-11, prepared on the basis of the statement
of the outward supplies furnished by the corresponding suppliers in FORM GSTR-1.
2 An acknowledgement for the receipt of the application for refund shall be issued in FORM GST RFD-02.
3 The refund of tax paid by the applicant shall be available if-

(a) the inward supplies of goods or services or both were received from a registered person against a
tax invoice and the price of the supply covered under a single tax invoice exceeds five thousand
rupees, excluding tax paid, if any;
(b) name and Goods and Services Tax Identification Number or Unique Identity Number of the
applicant is mentioned in the tax invoice; and
(c) such other restrictions or conditions as may be specified in the notification are satisfied.
4 The provisions of rule 92 shall, mutatis mutandis, apply for the sanction and payment of refund under this
rule.
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192
193
Chapter XII
ASSESESSMENT
SN Particulars
2(11) “Assessment” means determination of tax liability under this Act and includes
 self-assessment,
 re-assessment,
 provisional assessment,
 summary assessment and
 best judgement assessment;
SN Particulars
59 Self-assessment
60 Provisional assessment
61 Scrutiny of returns
62 Assessment of non-filers of returns
63 Assessment of unregistered persons
64 Summary assessment in certain special cases
59. Self-assessment:
1 Trusting Every registered person shall
the
assessee to  self assess the taxes payable under this Act and
voluntary  furnish a return for each tax period as specified under section 39.
comply
with the  Understanding:
law Assessment by the tax payer himself and not an assessment by the Proper Officer. This is in
line with the policy of trusting the assessee to voluntarily comply with the law.
Every RTP would be required to assess his tax dues in accordance with the provisions of GST
Act and report the basis of calculation of tax dues to the tax administrations by filing
periodic tax returns.
194
195
60. Provisional assessment:
1 Unable to Subject to the provisions of sub-section (2), where the taxable person is unable to determine
determine
the value &  the value of goods or services or both or
tax  determine the rate of tax applicable thereto,
he may request the proper officer in writing giving reasons for payment of tax on a provisional
basis and the proper officer shall pass an order, within a period not later than ninety days from
the date of receipt of such request, allowing payment of tax on provisional basis at such rate or
on such value as may be specified by him.
 Understanding #1:
All though it is very broad in itself but, except for the above instances –value or rate of tax –
the facility of provisional assessment is not available in any other instance. For example,
 there may be uncertainty about the kind of tax (IGST or CGST-SGST) applicable,
 time of supply, place of supply,
 supplies to be treated as “supply of goods” or “supply of services”, etc.
In these cases, no recourse is available to the taxable person to seek provisional assessment
of tax.
 Understanding #2:
i) Value of supply cannot be determined by the taxable person, viz, there is difficulty
about:
 Transaction value to be adopted for determination of tax payable; (Discount
treatment)
 Inclusion or exclusion of any receipts in the value of supply.
Existence of any circumstance causing failure of transaction value declared. (Price

is not Sole consideration + Related party).
ii) Rate of tax applicable on the supply cannot be determined by the taxable person,
viz there is difficulty about:
 Classification of the goods and / or services under the relevant Schedule;
 Eligibility to any exemption notification or compliance with conditions
associated with such exemption.
2 Execution of The payment of tax on provisional basis may be allowed, if the taxable person executes a bond
bond with in such form as may be prescribed, and with such surety or security as the proper officer may
surety & deem fit, binding the taxable person for payment of the difference between the amount of tax
security as may be finally assessed and the amount of tax provisionally assessed.
3 Time period The proper officer shall, within a period not exceeding six months from the date of the
for final communication of the order issued under sub-section (1), pass the final assessment order after
assessment- taking into account such information as may be required for finalizing the assessment:
within 6
months PROVIDED that the period specified in this sub-section may, on sufficient cause being shown and
(+) 6 for reasons to be recorded in writing, be
months by  extended by the Joint Commissioner or Additional Commissioner for a further period
JC/AC not exceeding six months and
(+) ….-
Comm.  by the Commissioner for such further period not exceeding four years.
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197
4 If fails to The registered person shall be liable to pay interest on any tax payable on the supply of goods or
pay amount services or both under provisional assessment but not paid on the due date specified under sub-
as per section (7) of section 39 or the rules made thereunder, at the rate specified under sub-section
provisional (1) of section 50, from the first day after the due date of payment of tax in respect of the said
assessment supply of goods or services or both till the date of actual payment, whether such amount is
– Interest paid before or after the issuance of order for final assessment.
shall be
payable  Redrafting of Sec 39 (7):
Every registered taxable person, who is required to furnish a return under sub section (1),
(2), (3) or, as the case may be, under sub-section (5) shall pay to the account of the
appropriate Government the tax due as per such return not later than the last date on
which he is required to furnish such return.
5 Refund shall Where the registered person is entitled to a refund consequent to the order of final assessment
be made as under sub-section (3), subject to the provisions of sub-section (8) of section 54, interest shall be
per Sec 48 paid on such refund as provided in section 56.
61. Scrutiny of returns:
 Discretionary facility for a Proper Officer.

 To verify the correctness of the return.
 It is a pre-adjudication process.
1 Scrutinizing The proper officer may scrutinize the return and related particulars furnished by the registered
of returns person to verify the correctness of the return and inform him of the discrepancies noticed, if
any, in such manner as may be prescribed and seek his explanation thereto.
2 Satisfactory In case the explanation is found acceptable, the registered person shall be informed accordingly
Explanation and no further action shall be taken in this regard.
3 Explanation In case no satisfactory explanation is furnished within a period of thirty days of being informed
does not by the proper officer or such further period as may be permitted by him or where the registered
found person, after accepting the discrepancies, fails to take the corrective measure in his return for
satisfactory the month in which the discrepancy is accepted,
the proper officer may initiate appropriate action including those under section 65 or section 66
or section 67, or proceed to determine the tax and other dues under section 73 or section 74.
62. Assessment of non-filers of returns:
1 To the best Notwithstanding anything to the contrary contained in section 73 or section 74, where a
of his registered person fails to furnish the return under section 39 or section 45, even after the
judgement service of a notice under section 46, the proper officer may proceed to assess the tax
assessment liability of the said person to the best of his judgment taking into account all the relevant
material which is available or which he has gathered and issue an assessment order within a
period of five years from the date specified under section 44 for furnishing of the annual return
for the financial year to which the tax not paid relates.
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199
 Understanding:
Notice to return defaulters-
Issuance of notice under Section 46 is a necessity for commencing proceedings under
Section 62. And non-issuance of notice under Section 46 closes the door on invoking Section
62 although other provisions are available to recover the tax dues.
Non-compliance with the notice under Section 46 paves the way for the proceedings under
this Section.
The Proper Officer may after serving him notice under section 46 proceed to assess the tax
liability to the best of his judgment, taking into account all the relevant material available on
record, and issue an assessment order. This is also known as ‘best judgment assessment’. It
can be completed without giving notice of hearing to the assessee.
2 Yet there is Where the registered person furnishes a valid return within thirty days of the service of the
last chance assessment order under sub-section (1), the said assessment order shall be deemed to have
been withdrawn but the liability for payment of interest under subsection (1) of section 50 or
for payment of late fee under section 47 shall continue.
63. Assessment of unregistered persons:
1 Assessment  Notwithstanding anything to the contrary contained in section 73 or section 74, where a
of taxable person fails to obtain registration even though liable to do so or whose registration
unregistered has been cancelled under sub-section (2) of section 29 but who was liable to pay tax,
persons
 the proper officer may proceed to assess the tax liability of such taxable person to the best of
his judgment for the relevant tax periods and issue an assessment order within a period of
five years from the date specified under section 44 for furnishing of the annual return for the
financial year to which the tax not paid relates:
PROVIDED that no such assessment order shall be passed without giving the person an
opportunity of being heard.
Principle of Q. Can an assessment order be passed without affording an opportunity of being

Natural heard to the person liable to be registered?
Justice A. No, an assessment order cannot be passed without giving a notice to show cause in
writing and without giving him an opportunity of being heard.
64. Summary assessment in certain special cases:
 Background:
 Summary Assessment is used to denote those assessments which are completed ex-parte and on
priority basis when there is reason to believe that there will be loss of tax revenue, if such
assessment is delayed.
 This provision is only to enforce recovery of dues from potential defaulters, and this requires an
assessment of the tax liability.
 Summary Assessment is a protective assessment where there are grounds to believe that taxable
person will fail to make payment of any tax, penalty or interest, if the assessment is not completed
immediately.
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 Example: Insolvency, instances of defaulting, absconding etc
 SA under this Section is not a substitute for assessment getting time barred.
 The Section allows the person who is assessed and is served the order so passed to come forward and
make an application to the Additional / Joint Commissioner challenging the reasons for the belief
about risk of revenue loss and further accept to be available to respond, if proceedings under Section
66/67 were to be undertaken & if the AC/JC is satisfied, the summary assessment will be set aside.
 The AC/JC may, on his own motion, withdraw such order and follow the procedure laid down in
Section 66 or as the case may be Section 67for determination of taxes not paid or short paid or
erroneously refunded, if he considers that such order is erroneous.
 It appears that every SA order so withdrawn under sub-Section (2), must be followed by a notice
under Section 66 or as the case may be 67.
1 If PO finds The proper officer may,
some  on any evidence showing a tax liability of a person coming to his notice, with the
evidences previous permission of Additional Commissioner or Joint Commissioner, proceed to
showing a assess the tax liability of such person to protect the INTEREST OF REVENUE and issue an
person assessment order,
liable to
tax  if he has sufficient grounds to believe that any delay in doing so may adversely affect
the interest of revenue:
PROVIDED that where the taxable person to whom the liability pertains is not ascertainable and
such liability pertains to supply of goods, the person in charge of such goods shall be deemed to
be the taxable person liable to be assessed and liable to pay tax and any other amount due
under this section.
Q. Whether proper officer can proceed, suo - moto in assessing the tax liability of a
taxable person on possession of relevant evidence?
A. No, the proper officer has to obtain prior permission of Additional /Joint Commissioner
to proceed to assess the tax liability.
2 Withdraw On an application made by the taxable person within thirty days from the date of receipt of
of order order passed under sub-section (1) or on his own motion, if the Additional Commissioner or
Joint Commissioner considers that such order is erroneous, he may withdraw such order and
follow the procedure laid down in section 73 or section 74.
201
202
 Types of Audit:
Commissioner or
General By way of General
Officer authorised
Audit or Special order
by commissioner
AUDIT
Regard to nature or
Officer not below
Special complexity of the
the rank of Assistant
Audit case & the interest
Commissioner
of revenue
 Audit by Tax Authorities:
15-09-18 30-09-18
15 days 3M+EXT (6M)
Notice to be 06-10-18
atleast 15 days in
Notice for
advance before
AUDIT
commencement
203
Chapter XIII
AUDIT
SN Particulars
65 Audit by tax authorities
66 Special audit
65. Audit by tax authorities:
 Audit of records of tax payers is important for the proper functioning of self -assessment. It is an
important tool in the tax administration to ensure the compliance of law and prevent revenue
leakage.
1 Audit The Commissioner or any officer authorised by him,
 by way of a general or a specific order,

 may undertake audit of any registered person for such period,
 at such frequency and in such manner as may be prescribed.
Q. Whether audit is mandatory in case of every taxable person?

A. No, it is not mandatory. It will be applicable only in cases where the appropriate
authorities authorize the same by issue of general / specific orders.
Q. Whether any reason to believe or evidence is required for initiate audit under
Section 65?
A. No, Sec 65 does not specify any such requirements. Commissioner can initiate audit
on any taxable person for such period, at such frequency and in such manner as may
be prescribed.
2 Where to The officers referred to in sub-section (1) may conduct audit at the place of business of the
execute registered person or in their office.
audits?
3 Intimation The registered person shall be informed by way of a notice not less than fifteen working days
atleast 15 prior to (before the) the conduct of audit in such manner as may be prescribed.
prior to
audit
4 Time limit The audit under sub-section (1) shall be completed within a period of three months from the
for date of commencement of the audit:
completion
of audit- 3 PROVIDED that where the Commissioner is satisfied that audit in respect of such registered
(+6) months person cannot be completed within three months, he may, for the reasons to be recorded in
writing, extend the period by a further period not exceeding six months.
Explanation – For the purposes of this sub-section, the expression “commencement of audit”
shall mean the
 date on which the records and other documents, called for by the tax authorities, are
made available by the registered person or
 the actual institution of audit at the place of business,

 whichever is LATER.
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5 Cooperation During the course of audit, the authorised officer may require the registered person—
from the (i) to afford him the necessary facility to verify the books of account or other
taxable documents as he may require;
person
(ii) to furnish such information as he may require and render assistance for timely
completion of the audit.
6 Intimation On conclusion of audit, the proper officer shall, within thirty days, inform the registered person,
of findings whose records are audited, about the findings, his rights and obligations and the reasons for
such findings.
7 Default in Where the audit conducted under sub-section (1) results in detection of tax not paid or short
respect of paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer
TAX may initiate action under section 73 or section 74.
Q. What action will be initiated when the audit conducted u/s 65(1) results in a
demand?
A. Where the audit u/s 65(1) results in detection of tax not paid or short paid or
erroneously refunded, or input tax credit wrongly availed or utilized, the proper
officer may initiate action under section 73 or 74.
 Example:
A notice for audit was served to M/s. XYZ Ltd, on 20.02.2021. Required information was given by M/s. XYZ
Ltd, on 25.05.2021. The audit officers visited the place of business on 26.06.2021. What is the last date
within which the audit is to be completed?
It will be 3 months from 26.06.2021, viz., 25.09.2021 or within an extended period of 6 months. The
extended period would be 25.03.2022.
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66. Special audit:
1 Why? If at any stage of scrutiny, inquiry, investigation or any other proceedings before him, any
officer not below the rank of Assistant Commissioner, having regard to the
 nature and complexity of the case and

 the interest of revenue,
is of the opinion that the value has not been correctly declared or the credit availed is not
within the normal limits, he may, with the prior approval of the Commissioner, direct such
registered person by a communication in writing to get his records including books of account
examined and audited by a chartered accountant or a cost accountant as may be nominated
by the Commissioner.
2 Reporting The chartered accountant or cost accountant so nominated shall, within the period of ninety
within 90 days, submit a report of such audit duly signed and certified by him to the said Assistant
(+90) days Commissioner mentioning therein such other particulars as may be specified:
PROVIDED that the Assistant Commissioner may, on an application made to him in this behalf
by the registered person or the chartered accountant or cost accountant or for any material
and sufficient reason, extend the said period by a further period of ninety days.
3 Already The provisions of sub-section (1) shall have effect notwithstanding that the accounts of the
audited- Not registered person have been audited under any other provisions of this Act or any other law for
a matter the time being in force.
4 Opportunity The registered person shall be given an opportunity of being heard in respect of any material
of being gathered on the basis of special audit under sub-section (1) which is proposed to be used in
heard any proceedings against him under this Act or the rules made thereunder.
5 Expenses & The expenses of the examination and audit of records under sub-section (1), including the
remuneratio remuneration of such chartered accountant or cost accountant, shall be determined and paid
n by the Commissioner and such determination shall be final.
6 Detection of Where the special audit conducted under sub-section (1) results in detection of tax not paid or
irregularities short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper
officer may initiate action under section 73 or section 74.
Q. What action will be initiated when the special audit conducted under Section 66
(1) results in a demand?
A. Where the special audit conducted under Section 66 (1) results in detection of tax
not paid or short paid or erroneously refunded, or input tax credit wrongly availed
or utilised, the proper officer may initiate action under section 73 or 74, as the case
maybe.
206
Chapter XIV
INSPECTION, SEARCH, SEIZURE, ARREST
SN Particulars
67 Power of inspection, search and seizure
68 Inspection of goods in movement
69 Power to arrest
70 Power to summon persons to give evidence and produce documents
71 Access to business premises
72 Officers to assist proper officers
 Understanding of the Terms :

Let’s have an understanding of the terms:
1) Inspection This provision enables officers to access any place of business of a taxable person and also any
place of business of a person engaged in transporting goods or a person who is an owner or an
operator of a warehouse or godown.
2) Search It is a harder provision than Inspection. The term ‘search’, in simple language, denotes an action
of a government machinery to go, look through or examine carefully a place, area, person,
object etc. in order to find something concealed or for the purpose of discovering evidence of a
crime. The search of a person or vehicle or premises etc. can only be done under proper and
valid authority of law.
3) Seizure In Law Lexicon Dictionary, ‘seizure’, is defined as the act of taking possession of property by an
officer under legal process.
67. Power of inspection, search and seizure:
1 Inspection Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe
that––
(a) a taxable person has
 suppressed any transaction relating to supply of goods or services or both or the stock
of goods in hand, or
 has claimed input tax credit in excess of his entitlement under this Act or
 has indulged in contravention of any of the provisions of this Act or the rules made
thereunder
to evade tax under this Act; or
(b) any person engaged in the business of
 transporting goods or an owner or operator of a warehouse or a godown or any other

place is keeping goods which have escaped payment of tax or
 has kept his accounts or goods in such a manner as is likely to cause evasion of tax
payable under this Act,
207
he may authorise in writing any other officer of central tax to inspect any places of business of
the
 taxable person or
 the persons engaged in the business of transporting goods or the owner or the
operator of warehouse or godown or any other place.
2 Search & Where the proper officer, not below the rank of Joint Commissioner, either pursuant to an
Seizure of inspection carried out under sub-section (1) or otherwise, has reasons to believe that
Goods &
documents  any goods liable to confiscation or
 any documents or books or things, which in his opinion shall be useful for or relevant to
any proceedings under this Act, are secreted in any place,
he may authorise in writing any other officer of central tax to search and seize or may himself
search and seize such goods, documents or books or things:
PROVIDED that where it is not practicable to seize any such goods, the proper officer, or any
officer authorized by him, may serve on the owner or the custodian of the goods an order that
he shall not remove, part with, or otherwise deal with the goods except with the previous
Time limit - permission of such officer:
retention
of PROVIDED FURTHER that the documents or books or things so seized shall be retained by such
goods & officer only for so long as may be necessary for their examination and for any inquiry or
documents proceedings under this Act.
3 Documents The documents, books or things referred to in sub-section (2) or any other documents, books or
shall be things produced by a taxable person or any other person, which have not been relied upon for
returned if the issue of notice under this Act or the rules made thereunder, shall be returned to such
not relied person within a period not exceeding thirty days of the issue of the said notice.
for issuing
SCN
4 Power to The officer authorised under sub-section (2) shall have the power to seal or break open the door
break open of any premises or to break open any almirah, electronic devices, box, receptacle in which any
goods, accounts, registers or documents of the person are suspected to be concealed, where
access to such premises, almirah, electronic devices, box or receptacle is denied.
5 Can take The person from whose custody any documents are seized under sub-section (2) shall be
copies of entitled to make copies thereof or take extracts therefrom in the presence of an authorised
the officer at such place and time as such officer may indicate in this behalf except where making
documents such copies or taking such extracts may, in the opinion of the proper officer, prejudicially affect
the investigation.
6 Goods The GOODS so seized under sub-section (2) shall be released, on a provisional basis, upon
shall be execution of a bond and furnishing of a security, in such manner and of such quantum,
released respectively, as may be prescribed or on payment of applicable tax, interest and penalty
on prov. payable, as the case may be.
basis
7 If no notice Where any goods are seized under sub-section (2)and no notice in respect thereof is given
within 6 within six months of the seizure of the goods, the goods shall be returned to the person from
months… whose possession they were seized:
6 (+6) PROVIDED that the period of six months may, on sufficient cause being shown, be extended by
months the proper officer for a further period not exceeding six months.
208
8 Certain The Government may, having regard to the

goods
which can  perishable or hazardous nature of any goods,
be  depreciation in the value of the goods with the passage of time,
disposed  constraints of storage space for the goods or
off as soon  any other relevant considerations, by notification, specify the goods or class of goods
as may be
after which shall, as soon as may be after its seizure under sub-section (2), be disposed of by the
seizure proper officer in such manner as may be prescribed.
9 Inventory Where any goods, being goods specified under sub-section (8), have been seized by a proper
of such officer, or any officer authorised by him under sub-section (2), he shall prepare an inventory of
goods such goods in such manner as may be prescribed.
10 Code of The provisions of the Code of Criminal Procedure, 1973, relating to search and seizure, shall, so
Criminal far as may be, apply to search and seizure under this section subject to the modification that
Procedure, sub-section (5) of section 165 of the said Code shall have effect as if for the word “Magistrate”,
1973 shall wherever it occurs, the word “Commissioner” were substituted.
apply
11 Seizure of Where the proper officer has reasons to believe that
documents  any person has evaded or is attempting to evade the payment of any tax,
he may, for reasons to be recorded in writing, seize the accounts, registers or documents of
such person produced before him and shall grant a receipt for the same, and shall retain the
same for so long as may be necessary in connection with any proceedings under this Act or the
rules made thereunder for prosecution.
12 Test The Commissioner or an officer authorised by him may cause purchase of any goods or services
purchases or both by any person authorised by him from the business premises of any taxable person, to
to ensure check the issue of tax invoices or bills of supply by such taxable person, and on return of goods
the so purchased by such officer, such taxable person or any person in charge of the business
invoices premises shall refund the amount so paid towards the goods after cancelling any tax invoice or
are issued bill of supply issued earlier.
properly
68. Inspection of goods in movement:
1 Conveyance The Government may require the person in charge of a conveyance carrying any consignment
to carry of goods of value exceeding such amount as may be specified to carry with him such
documents documents and such devices as may be prescribed.
2 Officer to The details of documents required to be carried under sub-section (1) shall be validated in
validate the such manner as may be prescribed.
details
3 PIC shall Where any conveyance referred to in sub-section (1) is intercepted by the proper officer at any
produce the place, he may require the person in charge of the said conveyance to produce the documents
documents prescribed under the said sub-section and devices for verification, and the said person shall be
& devices liable to produce the documents and devices and also allow the inspection of goods.
209
69. Power to arrest:
1 When to Where the Commissioner has reasons to believe that a person has committed any offence
arrest?? specified in clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1) of section 132
which is punishable under clause (i) or (ii) of sub-section (1), or subsection (2) of the said
section, he may, by order, authorise any officer of central tax to arrest such person.
2 Cognizable Where a person is arrested under sub-section (1) for an offence specified under subsection (5) of
offence section 132, the officer authorised to arrest the person shall inform such person of the grounds
of arrest and produce him before a Magistrate within twenty four hours.
Q. What is a cognizable offence?

A. Generally, cognizable offence means serious category of offences in respect of which a
police officer has the authority to make an arrest without a warrant and to start an
investigation with or without the permission of a Court.
3 Non- Subject to the provisions of the Code of Criminal Procedure, 1973,––

cognizable
offence (a) where a person is arrested under sub-section (1) for any offence specified under sub-section
(4) of section 132, he shall be admitted to bail or in default of bail, forwarded to the custody of
the Magistrate;
(b) in the case of a non-cognizable and bailable offence, the Deputy Commissioner or the
Assistant Commissioner shall, for the purpose of releasing an arrested person on bail or
otherwise, have the same powers and be subject to the same provisions as an officer-in-charge
of a police station.
Q. What is a non-cognizable offence?

A. Non-cognizable offence means relatively less serious offences in respect of which a
police officer does not have the authority to make an arrest without a warrant and an
investigation cannot be initiated without a court order, except as may be authorized
under special legislation.
70. Power to summon persons to give evidence and produce documents:
1 Summon The proper officer under this Act shall have power to summon any person whose attendance he
for person- considers necessary either to give evidence or to produce a document or any other thing in any
to attend inquiry in the same manner, as provided in the case of a civil court under the provisions of the
in person Code of Civil Procedure, 1908.
2 Judicial Every such inquiry referred to in sub-section (1) shall be deemed to be a “judicial proceedings”
proceeding within the meaning of section 193 and section 228 of the Indian Penal Code.
 Understanding:
As per section 14(3) of CEA, proceedings after the summon are ‘judicial proceedings’
within the meaning of section 193 and section 228 of the Indian Penal Code.
As per section 193 of the IPC giving false evidence is punishable with imprisonment
upto 7 years and fine.
U/S 228 of IPC, intentional insult or causing interruption to any public servant while
such servant is in any stage of judicial proceedings shall be punishable with
imprisonment upto six months or with fine upto Rs.1,000 or more.\
210
71. Access to business premises:
1 Access to Any officer under this Act, authorised by the proper officer not below the rank of Joint
any Commissioner, shall have access to any place of business of a registered person to inspect
business  books of account,
premises  documents,
to  computers, computer programs, computer software whether installed in a computer or
safeguard otherwise and
the  such other things as he may require and which may be available at such place,
interest of
revenue for the purposes of carrying out any audit, scrutiny, verification and checks as may be necessary
to safeguard the interest of revenue.
2 In charge Every person in charge of place referred to in sub-section (1) shall, on demand, make available
of to the
premises
shall make  officer authorised under sub-section (1) or
available  the audit party deputed by the proper officer or
records to  accountant or a cost chartered accountant nominated under section 66—
the officer
within 15 (i) such records as prepared or maintained by the registered person and declared to
days (+ the proper officer in such manner as may be prescribed;
ext.) (ii) trial balance or its equivalent;
(iii) statements of annual financial accounts, duly audited, wherever required;
(iv)cost audit report, if any, under section 148 of the Companies Act, 2013;
(v) the income-tax audit report, if any, under section 44AB of the Income-tax Act,
1961; and
(vi) any other relevant record,
for the scrutiny by the officer or audit party or the chartered accountant or cost
accountant within a period not exceeding fifteen working days from the day when such
demand is made, or such further period as may be allowed by the said officer or the
audit party or the chartered accountant or cost accountant.
72. Officers to assist proper officers:
1 Assisting  All officers of Police, Railways, Customs, and
CGST/SGST
officers  those officers engaged in the collection of land revenue, including village officers,
 officers of State tax and officers of Union territory tax shall assist the proper officers in the
implementation of this Act.
2 Notification The Government may, by notification, empower and require any other class of officers
 to assist the proper officers in the implementation of this Act when called upon to do so by
the Commissioner.
211
212
>> Sec 73: Determination of tax not paid or short paid or erroneously refunded:
Honest Assessee:
D/D or A/D of Annual Return
Relevant Date OR
Date of erroneous refund
Voluntary Payment
=Tax + Interest+ Penalty
1) Not paid/ short paid or ITC wrongly availed or utilized
3 years from –D/D of AR
OR EARLIER
A/D of AR
Fully Paid Partially Paid 2) Erroneously refunded- 3 years from the date of
erroneous refunded
Close
SCN
Payment made
=Tax + Interest+ Penalty 30 days
 SCN (2018-19) = Tax + Interest + Penalty

 Statement
Payment made  2019-20 = Tax + Interest + Penalty
=Tax + Interest+ Penalty  2020-21 = Tax + Interest + Penalty
(Provided grounds are same)
10% of tax
HIGHER OR
10,000
Demand Order
Payment made
10% of tax
HIGHER OR
10,000
213
Chapter XV
DEMANDS AND RECOVERY
 Comparative Study between Honest and Fraud:

SN Particulars Sec 73-Determination of tax not paid or short paid or erroneously Sec 74-Determination of tax not paid or short paid or erroneously
refunded or input tax credit wrongly availed or utilised for any refunded or input tax credit wrongly availed or utilised by reason of
reason other than fraud or any wilful misstatement or fraud or any wilful-misstatement or suppression of facts
suppression of facts
(Honest) (Fraud)
1 Service of SCN- for Where it appears to the proper officer that any tax has not been Where it appears to the proper officer that any tax has not been paid
particular period paid or short paid or erroneously refunded, or where input tax or short paid or erroneously refunded or where input tax credit has
credit has been wrongly availed or utilized for any reason, other been wrongly availed or utilized by reason of fraud, or any wilful-
than the reason of fraud or any wilful-misstatement or misstatement or suppression of facts to evade tax, he shall serve
suppression of facts to evade tax, he shall serve notice on the notice on the person chargeable with tax which has not been so paid
person chargeable with tax which has not been so paid or which or which has been so short paid or to whom the refund has
has been so short paid or to whom the refund has erroneously erroneously been made, or who has wrongly availed or utilised input
been made, or who has wrongly availed or utilised input tax credit, tax credit, requiring him to show cause as to why he should not pay
requiring him to show cause as to why he should not pay the the amount specified in the notice along with interest payable
amount specified in the notice along with interest payablethereon thereon under section 50 and a penalty equivalent to the tax
under section 50 and a penalty leviable under the provisions of specifiedin the notice.
this Act or the rules made thereunder.
2 Time limit for The proper officer shall issue the notice under sub-section (1) at The proper officer shall issue the notice under sub-section (1) at
furnishing SCN least three months prior to the time limit specified in sub-section least six months prior to the time limit specified in sub-section (10)
(10) for issuance of order. for issuance of order.
214
>> Sec 74: Determination of tax not paid or short paid or erroneously refunded:
Fraud Assessee:
D/D or A/D of Annual Return
Relevant Date OR
Date of erroneous refund
Voluntary Payment
15% of TAX
1) Not paid/ short paid or ITC wrongly availed or utilized
5 years from –D/D of AR
OR
A/D of AR
Fully Paid Partially Paid 2) Erroneously refunded- 5 years from the date of
erroneous refunded
Close
SCN
Payment made
25% of TAX
 SCN (2018-19) = Tax + Interest + Penalty
 Statement
Payment made  2019-20 = Tax + Interest + Penalty
=Tax + Interest+ Penalty  2020-21 = Tax + Interest + Penalty
50% of TAX (Provided grounds are same)
Demand Order
Payment made
50% of TAX
Payment made
=Tax + Interest+ Penalty 100% of TAX
215
3 Service of statement- Where a notice has been issued for any period under sub-section Where a notice has been issued for any period under sub-section (1),
for a period other (1), the proper officer may serve a statement, containing the the proper officer may serve a statement, containing the details of
than period referred details of tax not paid or short paid or erroneously refunded or tax not paid or short paid or erroneously refunded or input tax credit
to in sub section 1 input tax credit wrongly availed or utilised for such periods other wrongly availed or utilised for such periods other than those
than those covered under sub-section (1), on the person covered under sub-section (1), on the person chargeable with tax.
chargeable with tax.
4 Service of The service of such statement shall be deemed to be service of The service of statement under sub-section (3) shall be deemed to
statement=Service of notice on such person under sub-section (1), subject to the be service of notice under sub-section (1) of section 73, subject to
SCN condition that the grounds relied upon for such tax periods other the condition that the grounds relied upon in the said statement,
than those covered under sub-section (1) are the same as are except the ground of fraud, or any wilful-misstatement or
mentioned in the earlier notice. suppression of facts to evade tax, for periods other than those
covered under subsection (1) are the same as are mentioned in the
earlier notice.
5 Voluntary payment The person chargeable with tax may, before service of notice under The person chargeable with tax may, before service of notice under
on the basis of own sub-section (1) or, as the case may be, the statement under sub- sub-section (1), pay the amount of tax along with interest
ascertainment or the section (3), pay the amount of tax along with interest payable payableunder section 50 and a penalty equivalent to fifteen per
tax as ascertained by thereon under section 50 on the basis of his own ascertainment of cent. of such taxon the basis of his own ascertainment of such tax
the proper officer such tax or the tax as ascertained by the proper officer and inform or the tax as ascertained by the proper officer and inform the
the proper officer in writing of such payment. proper officer in writing of such payment.
6 No further The proper officer, on receipt of such information, shall not serve The proper officer, on receipt of such information, shall not serve
proceedings in any notice under subsection (1) or, as the case may be, the any notice under subsection (1), in respect of the tax so paid or any
respect of the statement under sub-section (3), in respect of the tax so paid or penalty payable under the provisions of this Act or the rules made
amount Voluntary any penalty payable under the provisions of this Act or the rules thereunder.
paid made thereunder.
7 Amount partly paid Where the proper officer is of the opinion that the amount paid Where the proper officer is of the opinion that the amount paid
under sub section 3- under sub-section (5) falls short of the amount actually payable, he under sub-section (5) falls short of the amount actually payable, he
PO shall issue SCN shall proceed to issue the notice as provided for in sub-section (1) shall proceed to issue the notice as provided for in sub-section (1) in
in respect of such amount which falls short of the amount actually respect of such amount which falls short of the amount actually
payable. payable.
216
 Statement instead of SCN (Honest):
13 14 15 16 17 18
SCN STATEMENT STATEMENT
1 year 2 years 3 years
Last date of Last date of Last date of Last date of

filing AR filing AR filing AR filing AR
(31-12-2014) (31-12-2015) (31-12-2016) (31-12-2017)
Furnishing of SCN for

the FY 2013-14.
>> Statement instead of SCN (Fraud):
13 14 15 16 17 18 19 20
SCN STATEMENT STATEMENT STATEMENT STATEMENT
1 year 2 years 3 years 4 years 5 years
Last date of Last date of Last date of Last date of Last date of Last date of
filing AR filing AR filing AR filing AR filing AR filing AR
(31-12-2014) (31-12-2015) (31-12-2016) (31-12-2017) (31-12-2018) (31-12-2019)
Furnishing of SCN for

the FY 2013-14.
217
8 If paid within 30 days Where any person chargeable with tax under sub-section (1) or Where any person chargeable with tax under sub-section (1) pays
of issue of SCN--No sub-section (3) pays the said tax along with interest payable under the said tax along with interest payable under section 50 and a
penalty section 50 within thirty days of issue of show cause notice, no penalty equivalent to twenty-five per cent. of such tax within thirty
penalty shall be payable and all proceedings in respect of the said days of issue of the notice, all proceedings in respect of the said
notice shall be deemed to be concluded. notice shall be deemed to be concluded.
9 Representation The proper officer shall, after considering the representation, if The proper officer shall, after considering the representation, if any,
received- any, made by person chargeable with tax, determine the amount of made by the person chargeable with tax, determine the amount of
tax, interest and a penalty equivalent to ten per cent. of tax or ten tax, interest and penalty due from such person and issue an order.
Issue of DEMAND thousand rupees, whichever is higher, due from such person and
ORDER issue an order.
10 Time limit for issuing The proper officer shall issue the order under sub-section (9) within The proper officer shall issue the order under sub-section (9) within a
of order under sub three years from the due date for furnishing of annual return for period of five years from the due date for furnishing of annual
section (6)- 3/5 years the financial year to which the tax not paid or short paid or input return for the financial year to which the tax not paid or short paid
tax credit wrongly availed or utilised relates to or within three years or input tax credit wrongly availed or utilised relates to or within five
from the date of erroneous refund. years from the date of erroneous refund.
11 Payment to be made Notwithstanding anything contained in sub-section (6) or sub-- Where any person served with an order issued under sub-section (9)
within 30 days section (8), penalty under sub-section (9) shall be payable where pays the tax along with interest payable thereon under section 50
any amount of self-assessed tax or any amount collected as tax has and a penalty equivalent to fifty per cent. of such tax within thirty
not been paid within a period of thirty days from the due date of days of communication of the order, all proceedings in respect of
payment of such tax. the said notice shall be deemed to be concluded.
Explanation 1.- For the purposes of section 73 and this section,—

(i) the expression “all proceedings in respect of the said notice” shall not include proceedings under section 132;
(ii)where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the
main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under sections 122, 125,
129 and 130 are deemed to be concluded.
Explanation 2.- For the purposes of this Act, the expression “suppression” shall mean:
 non-declaration of facts or information which a taxable person is required to declare in the return, statement, report or any other document furnished under
this Act or the rules made thereunder, or failure to furnish any information on being asked for, in writing, by the proper officer.
218
 Penalty implications in brief:
Situation Honest Assessee Fraud Assessee
Before issuance of show No penalty 15% of the tax amount

cause notice
Within 30 days after the No penalty 25% of the tax amount
issuance of show cause
notice
After 30 days of issuance of 10% of the tax or XXX
show cause notice or After Rs. 10,000
the issuance of order whichever is higher.
Within 30 days from the XXX 50% of the tax amount
issuance of order
In any other case XXX 100% of the tax amount
(equivalent to tax)
219
220
>> SCN invoking Fraud but not-sustainable:
1)
18 19 20 21 22 23 24 25
15-12-2019 15-12-2020 15-12-2021 15-12-2022 15-12-2023 15-12-2024
20-06-2024
1) Let suppose, on 26-06-2024, PO issued a SCN

invoking fraud charges for the FY 2018-19, 2018-19 FY Proper Officer Court FY
& 2019-20. 2018-19 Fraud Honest 2018-19
2) But, Court concludes that the notice is NOT- 2019-20 Fraud Honest 2019-20
SUSTAINABLE.
2020-21 Fraud Honest 2020-21
3) Therefore,
2021-22 - - 2021-22
 FY 2018-19
2022-23 - - 2022-23
 FY 2019-20
 FY 2020-21
 FY 2021-22
 FY 2022-23
 FY 2023-24
221
Chapter XV
DEMANDS AND RECOVERY
SN Particulars
75 General provisions relating to determination of tax
76 Tax collected but not paid to Government
77 Tax wrongfully collected and paid to Central Government or State Government
78 Initiation of recovery proceedings
79 Recovery of tax
80 Payment of tax and other amount in instalments
81 Transfer of property to be void in certain cases
82 Tax to be first charge on property
83 Provisional attachment to protect revenue in certain cases
84 Continuation and validation of certain recovery proceedings
75. General provisions relating to determination of tax:
1 Period of Where the service of notice or issuance of order is stayed by an order of a court or Appellate
stay shall Tribunal, the period of such stay shall be excluded in computing the period specified in sub-
be sections (2) and (10) of section 73 or sub-sections (2) and (10) of section 74, as the case may
excluded be.
2 Notice Where any Appellate Authority or Appellate Tribunal or court concludes that the notice issued
issued under sub-section (1) of section 74 is not sustainable for the reason that the charges of fraud
assuming or any wilful-misstatement or suppression of facts to evade tax has not been established
fraud is against the person to whom the notice was issued, the proper officer shall determine the tax
NOT payable by such person, deeming as if the notice were issued under sub-section (1) of section
sustainable 73.
3 Order to Where any order is required to be issued in pursuance of the direction of the Appellate
be issued Authority or Appellate Tribunal or a court, such order shall be issued within two years from the
on the date of communication of the said direction.
direction
of Tribunal
or Court- 2
years
4 Natural An opportunity of hearing shall be granted where a request is received in writing from the
Justice person chargeable with tax or penalty, or where any adverse decision is contemplated (the
state of being planned) against such person.
5 Adjourn - The proper officer shall, if sufficient cause is shown by the person chargeable with tax, grant
3 times time to the said person and adjourn the hearing for reasons to be recorded in writing:
PROVIDED that no such adjournment shall be granted for more than three times to a person
during the proceedings.
6 Speaking The proper officer, in his order, shall set out the relevant facts and the basis of his decision.
order
222
7 SCN>=DO The amount of tax, interest and penalty demanded in the order shall not be in excess of the
Grounds amount specified in the notice and no demand shall be confirmed on the grounds other than
SCN=Groun the grounds specified in the notice.
ds DO
8 Interest Where the Appellate Authority or Appellate Tribunal or court modifies the amount of tax
and determined by the proper officer, the amount of interest and penalty shall stand modified
penalty accordingly, taking into account the amount of tax so modified.
shall stand
modified
9 The The interest on the tax short paid or not paid shall be payable whether or not specified in the
mention of order determining the tax liability.
interest is
not
necessary
10 Proceeding The adjudication proceedings shall be deemed to be concluded, if the order is not issued
be deemed within three years as provided for in sub-section (10) of section 73 or within five years as
to be provided for in sub-section (10) of section 74.
concluded?
11 Excluding An issue on which the Appellate Authority or the Appellate Tribunal or the High Court has
the period- given its decision which is prejudicial to the interest of revenue in some other proceedings
Departmen and
tal Appeal
an appeal to the Appellate Tribunal or the High Court or the Supreme Court against such
decision of the Appellate Authority or the Appellate Tribunal or the High Court is pending,
the period spent between the

 date of the decision of the Appellate Authority and that of the Appellate Tribunal or
 the date of decision of the Appellate Tribunal and that of the High Court or
 the date of the decision of the High Court and that of the Supreme Court
shall be excluded in computing the period referred to in sub-section (10) of section 73 or sub-
section (10) of section 74 where proceedings are initiated by way of issue of a show cause
notice under the said sections.
12 Amount Notwithstanding anything contained in section 73 or section 74, where any amount of self-
agreed - assessed tax in accordance with a return furnished under section 39 remains unpaid, either
remains wholly or partly, or any amount of interest payable on such tax remains unpaid, the same shall
unpaid be recovered under the provisions of section 79.
Recovery
as per Sec
72
13 Penalty Where any penalty is imposed under section 73 or section 74, NO penalty for the same act
imposed or omission shall be imposed on the same person under any other provision of this Act.
u/s 66 or
67---no Q. Whether penalties under any other provisions of the Act be imposed in respect
other of adjudication proceedings under section 73 or 74?
penalty A. No. Where any penalty is imposed under section 73 or 74, no penalty for the same
shall be act and/or omission shall be imposed under any other provisions of the Act on the
imposed same person.
223
76. Tax collected but not paid to Government:
1 Amount Notwithstanding anything to the contrary contained in any order or direction of any
collected Appellate Authority or Appellate Tribunal or court or in any other provisions of this Act or the
representing rules made thereunder or any other law for the time being in force, every person who has
tax shall be collected from any other person any amount as representing the tax under this Act, and has
deposited to not paid the said amount to the Government, shall forthwith pay the said amount to the
Govt - Government, irrespective of whether the supplies in respect of which such amount was
collected are taxable or not.
[Regardless taxable or not]
2 If not paid, Where any amount is required to be paid to the Government under sub-section (1), and
issue of SCN which has not been so paid, the proper officer may serve on the person liable to pay such
for amount a notice requiring him to show cause as to why the said amount as specified in the
i) for notice, should not be paid by him to the Government and why a penalty equivalent to the
depositing amount specified in the notice should not be imposed on him under the provisions of this
tax Act.
ii) for penalty
(Tax +
Penalty)
3 Determining The proper officer shall, after considering the representation, if any, made by the person on
amount- whom the notice is served under sub-section (2), determine the amount due from such
considering person and thereupon such person shall pay the amount so determined.
the
representatio
ns filed
4 Interest will The person referred to in sub-section (1) shall in addition to paying the amount referred to in
start from sub-section (1) or sub-section (3) also be liable to pay interest thereon at the rate specified
the day such under section 50 from the date such amount was collected by him to the date such amount
amount was is paid by him to the Government.
collected by
him.
5 Opportunity An opportunity of hearing shall be granted where a request is received in writing from the
for personal person to whom the notice was issued to show cause.
hearing
6 D/O-1 year The proper officer shall issue an order within one year from the date of issue of the notice.
from the
date of SCN Q. Is there any time limit for issue of notice under section 76 in cases where tax
collected but not paid?
A. No. There is no time limit and notice can be issued on detection of such cases
without any time limit. Once notice is issued, the order should be passed within
1 year from the date of issue of notice.
7 Stay -period Where the issuance of order is stayed by an order of the court or Appellate Tribunal, the
shall be period of such stay shall be excluded in computing the period of one year.
excluded
8 Speaking The proper officer, in his order, shall set out the relevant facts and the basis of his decision.
order
9 The amount The amount paid to the Government under sub-section (1) or sub-section (3) shall be
paid shall be adjusted against the tax payable, if any, by the person in relation to the supplies referred to
first adjusted in sub-section (1).
against the
tax payable
224
 Tax wrongfully collected & deposited with GOVT:
A)
Intra-State Transactions
CGST = 09 SG
SGST = 09
Supply of Goods &/or Services
Value = 100
CGST = 09
SGST = 09
Total =118
Supplier (UP) Recipient
POS =UP
B) Later on, held to be an Inter-state transaction
IGST = 18
Inter-State Transaction
Supply of Goods &/or Services
Value = 100
IGST = 18
Total =118
Supplier (UP) Recipient
POS =UK
Refund of CGST & SGST is possible only after payment of IGST.
225
10 In case of Where any surplus is left after the adjustmentunder sub-section (9), the amount of such
surplus surplus shall either be credited to the Fund or refunded to the person who has borne the
collected incidence of such amount.
11 Refund of The person who has borne the incidence of the amount, may apply for the refundof the
taxes same in accordance with the provisions of section 54.
77. Tax wrongfully collected and paid to Central Government or State Government:
1 Interstate A registered person who has paid the Central tax and State tax or, as the case may be, the
transaction central tax and the Union territory tax on a transaction considered by him to be an intra-
Initially State supply, but which is subsequently held to be an inter-State supply, shall be refunded
considered the amount of taxes so paid in such manner and subject to such conditions as may be
as intra-state prescribed.
2 Interest not A registered person who has paid integrated tax on a transaction considered by him to be an
to be paid inter-State supply, but which is subsequently held to be an intra-State supply, shall not be
required to pay any interest on the amount of central tax and State tax or, as the case may
be, the central tax and the Union territory tax payable.
Q. Whether a taxable person who has paid IGST on a transaction considered by him
to be an inter-state supply, but which is subsequently held to be an intra-state
supply is required to pay interest?
A. No. Taxable person shall not be required to pay any interest on the amount of
CGST/SGST payable.
78. Initiation of recovery proceedings:
78 Initiation of Any amount payable by a taxable person in pursuance of an order passed under this Act shall
recovery be paid by such person within a period of three months from the date of service of such
proceedings order failing which recovery proceedings shall be initiated:
PROVIDED that where the proper officer considers it expedient in the interest of revenue, he
may, for reasons to be recorded in writing, require the said taxable person to make such
payment within such period less than a period of three months as may be specified by him.
226
79. Recovery of tax:
1 Methods in Where any amount payable by a person to the Government under any of the provisions
which of this Act or the rules made thereunder is not paid, the proper officer shall proceed to
recovery can recover the amount by one or more of the following modes, namely:––
be made…
(a) Deduct from the proper officer may deduct or may require any other specified officer to deduct the
any money amount so payable from any money owing to such person which may be under the
owing to control of the proper officer or such other specified officer;
such person
(b) Recover by the proper officer may recover or may require any other specified officer to recover the
detaining amount so payable by detaining and selling any goods belonging to such person which
and selling are under the control of the proper officer or such other specified officer;
goods
‘(c)(i) Recovery (i) the proper officer may, by a notice in writing, require any other person from whom
from Debtor money is due or may become due to such person or who holds or may subsequently hold
or to be money for or on account of such person, to pay to the Government either forthwith upon
debtor or say the money becoming due or being held, or within the time specified in the notice not
accounts being before the money becomes due or is held, so much of the money as is sufficient to
receivable pay the amount due from such personor the whole of the money when it is equal to or
less than that amount;
‘(c)(ii) It shan’t be (ii) every person to whom the notice is issued under sub-clause (i) shall be bound to
necessary to comply with such notice, and in particular, where any such notice is issued to a post
produce any office, banking company or an insurer, it shall not be necessary to produce any pass
document book, deposit receipt, policy or any other document for the purpose of any entry,
endorsement or the like being made before payment is made, notwithstanding any rule,
practice or requirement to the contrary;
‘(c)(iii) Defaulter (iii) in case the person to whom a notice under sub-clause (i) has been issued, fails to
make the payment in pursuance thereof to the Government, he shall be deemed to be a
defaulter in respect of the amount specified in the notice and all the consequences of this
Act or the rules made thereunder shall follow;
‘(c)(iv) Amendment (iv) the officer issuing a notice under sub-clause (i) may, at any time, amendor revoke
of such such notice or extend the time for making any payment in pursuance of the notice;
notice
‘(c)(v) Payment to (v) any person making any payment in compliance with a notice issued under sub-clause
Govt shall be (i) shall be deemed to have made the payment under the authority of the person in
discharge of default and such payment being credited to the Government shall be deemed to
the liability constitute a good and sufficient discharge of the liability of such person to the person in
default to the extent of the amount specified in the receipt;
‘(c)(vi) Noticee shall (vi) any person discharging any liability to the person in default after service on him of
get the notice issued under sub-clause (i) shall be personally liable to the Government to the
personally extent of the liability discharged or to the extent of the liability of the person in default
liable for tax, interest and penalty, whichever is less;
‘(c)(vii) If not (vii) where a person on whom a notice is served under sub-clause (i) proves to the
payable by satisfaction of the officer issuing the notice that the money demandedor any part thereof
the person was not due to the person in default or that he did not hold any money for or on account
serving of the person in default, at the time the notice was served on him, nor is the money
notice at the demanded or any part thereof, likely to become dueto the said person or be held for or
227
time when on account of such person, nothing contained in this section shall be deemed to require
the notice is the person on whom the notice has been served to pay to the Government any such
served money or part thereof;
(d) Distress and the proper officer may, in accordance with the rules to be made in this behalf, distrain
detain any any movable or immovable property belonging to or under the control of such person,
property till and detain the same until the amount payable is paid; and in case, any part of the said
amount is amount payable or of the cost of the distress or keeping of the property, remains unpaid
paid & if for a period of thirty days next after any such distress, may cause the said property to
remain be soldand with the proceeds of such sale, may satisfy the amount payable and the costs
unpaid for a including cost of sale remaining unpaid and shall render the surplus amount, if any, to
period of 30 such person;
days, the
property can
be sold
(e) Collection as the proper officer may prepare a certificate signed by him specifying the amount due
if it were an from such person and send it to the Collector of the district in which such person owns
arrear of any property or resides or carries on his business or to any officer authorised by the
land revenue Government and the said Collector or the said officer, on receipt of such certificate, shall
proceed to recover from such person the amount specified thereunder as if it were an
arrear of land revenue;
(f) Collection as Notwithstanding anything contained in the Code of Criminal Procedure, 1973, the proper
if it were a officer may file an applicationto the appropriate Magistrate and such Magistrate shall
fine imposed proceed to recover from such person the amount specified thereunder as if it were a fine
by the PO imposed by him.
2 If provided Where the terms of any bond or other instrument executed under this Act or any rules or
…the amount regulations made thereunder provide that any amount due under such instrument may
may be be recovered in the manner laid down in sub-section (1), the amount may, without
recovered as prejudice to any other mode of recovery, be recovered in accordance with the provisions
per sub of that sub-section.
section (1)
3 SGST officers Where any amount of tax, interest or penalty is payable by a person to the Government
to recover under any of the provisions of this Act or the rules made thereunder and which remains
CGST arrears unpaid,
during the
recovery of the proper officer of State tax or Union territory tax, during the course of recovery of said
SGST arrears tax arrears, may recover the amount from the said person as if it were an arrear of State
tax or Union territory tax and credit the amount so recovered to the account of the
Government.
4 Recovered< Where the amount recovered under sub-section (3) is less than the amount due to the
Due—the Central Government and State Government, the amount to be credited to the account of
amount to be the respective Governments shall be in proportion to the amount due to each such
credited in Government.
the
proportion
Appeal Bar on recovery

Filed an appeal with FAA or AT PO may not enforce the payment of demand until the appeal is resolved.
Amount is not under appeal The provision does not give any stay against the recovery of any such
before FAA or AT amount due.
228
80. Payment of tax and other amount in instalments:
80 Leeway on On an application filed by a taxable person, the Commissioner may, for reasons to be recorded
time in writing, extend the time for payment or allow payment of any amount due under this Act,
period other than the amount due as per the liability self-assessed in any return, by such person in
monthly instalments not exceeding twenty four, subject to payment of interest under section
50 and subject to such conditions and limitations as may be prescribed:
PROVIDED that where there is default in payment of any one instalment on its due date, the
whole outstanding balance payableon such date shall become due and payableforthwith and
shall, without any further notice being served on the person, be liable for recovery.
Q. Mr.X requested the Chief Commissioner to provide the benefit to pay Rs.50,00,000/- under installments.
Chief Commissioner directs Mr.X to make the payment in five monthly installments. How to pay the interest?
[If one goes with the conventional interest calculation would have been same]
A. It is assumed that the actual date on which the tax was required to be paid as 06.06.2015. The benefit of
installment was granted by Chief Commissioner on 15.5.2016 to be paid w.e.f 02.06.2016 onwards over 5
installments. The instalments would be as under:
Payment date Interest to be paid as per section 45 Amount on which interest to be

– No of days paid
1st Installment – 02.06.2016 06.06.2015 to 01.06.2016 = 361 days Rs.10,00,000/-
2nd Installment – 02.07.2016 06.06.2015 to 01.07.2016 = 391 days Rs.10,00,000/-
3rd Installment – 02.08.2016 06.06.2015 to 01.08.2016 = 422 days Rs.10,00,000/-
4th Installment - 02.09.2016 06.06.2015 to 01.09.2016 = 453 days Rs.10,00,000/-
5th Installment – 02.10.2016 06.06.2015 to 01.10.2016 = 483 days Rs.10,00,000/-
81. Transfer of property to be void in certain cases:
81 Transfer with  Where a person, after any amount has become duefrom him,
an intention
of defrauding  creates a charge on or parts with the property belonging to him or in his possession by
the way of sale, mortgage, exchange, or any other mode of transfer whatsoever of any of his
Government properties in favour of any other person
revenue
deemed to  with the intention of defrauding the Government revenue, such charge or transfer shall
be void be void as against any claim in respect of any tax or any other sum payable by the said
person:
PROVIDED that,
 such charge or transfer shall not be voidif it is made for adequate consideration, in good
faith and without notice of the pendency of such proceedings under this Act or without
notice of such tax or other sum payable by the said person, or with the previous
permission of the proper officer.
229
 Illustrations:
1 Mr. X was served with a notice of demand for Rs. 2Crores on 10th July 2018. He filed a reply for the said
notice on 20th July 2018, stating that he was unable to deposit tax dues as he was financially stressed. On
15th July 2018, Mr. X transferred all the property worth Rs. 3.5 Crores under his name to the name of his wife
for a consideration of Rs. 10,00,000/-. Is this act of Mr. X valid?
1 As per section 75, the said transfer would be void and the property worth Rs. 3.5 Crores would be considered
still to be in the hands of Mr. X.
2 In the above illustration, if transfer of property was for a consideration of Rs. 4.2 Crores to Mr.Y who is
unaware of the pending proceedings of Mr. X. The transfer took place on 15th July 2018. Is the act of Mr.
Defrauder valid?
2 In this case the transaction would be a valid act, .since the transfer was made for adequate consideration and
also without notice of the pendency of proceeding.
3 A notice was issued on 10th July 2018 to Mr. A, However the same was received by Mr. A on 20th July, 2018.
Meanwhile the property of Mr. A was sold to Mr. B for Rs. 35 Crore. Is the sale void or valid?
3 The sale is valid since on the date of sale there was no pending proceeding on Mr.Perfect.
82. Tax to be first charge on property:
82 Tax to be Notwithstanding anything to the contrary contained in any law for the time being 31 of 2016.
first charge 20 in force, save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, any
on property amount payable by a taxable person or any other person on account of tax, interest or penalty
which he is liable to pay to the Government shall be a first charge on the property of such
taxable person or such person.
83. Provisional attachment to protect revenue in certain cases:
1 Provisional Where during the pendency of any proceedingsunder section 62 or section 63 or section 64 or
attachment section 67 or section 73 or section 74, the Commissioner is of the opinion that for the purpose
of property of protecting the interest of the Government revenue, it is necessary so to do, he may, by order
in writing attach provisionallyany property, including bank account, belonging to the taxable
person in such manner as may be prescribed.
2 Cannot be Every such provisional attachment shall cease to have effectafter the expiry of a 30 period of
more than 1 one yearfrom the date of the order made under sub-section (1).
year
230
 Continuation of certain recovery proceedings:
Relevant Date
SCN
Demand Order
Appeal/Revision
Reduced = 90
Enhanced = 110
Disposal of Appeal Disposal of Appeal
100 +10 100 90
Another notice of 1) It shall NOT be necessary to serve a fresh

Any recovery proceedings irt
demand iro notice of demand.
earlier notice of demand be
ENHANCED AMOUNT 2) The Commissioner shall give intimation of
continued from the stage at
such reduction to the authority with
which such proceedings
whom the recovery proceedings are
immediately before such
PENDING.
disposal.
3) Any recovery proceedings may be
continued in relation to the amount so
reduced from the stage at which such
proceedings stood immediately before
such disposal.
231
84. Continuation and validation of certain recovery proceedings:
84 Any appeal, Where any notice of demandin respect of any tax, penalty, interest or any other amount
is filed payable under this Act, (hereafter in this section referred to as “Government dues”), is served
against any upon any taxable person or any other person and any appeal or revision application is filed or
notice of any other proceedings is initiated in respect of such Government dues, then––
demand
Enhanced (a) where such Government dues are enhanced in such appeal, revision or other proceedings,
the Commissioner shall serve upon the taxable person or any other person another notice of
demand in respect of the amount by which such Government dues are enhanced and any
recovery proceedings in relation to such Government dues as are covered by the notice of
demand served upon him before the disposal of such appeal, revision or other proceedings
may, without the service of any fresh notice of demand, be continued from the stage at which
such proceedings stood immediately before such disposal;
Reduced (b) where such Government dues are reduced in such appeal, revision or in other proceedings–
–
(i) it shall not be necessary for the Commissioner to serve upon the taxable person a
fresh notice of demand;
(ii) the Commissioner shall give intimation of such reduction to him and to the
appropriate authority with whom recovery proceedings is pending;
(iii) any recovery proceedings initiated on the basis of the demand served upon him
prior to the disposal of such appeal, revision or other proceedings may be continued
in relation to the amount so reduced from the stage at which such proceedings stood
immediately before such disposal.
 FAQs:
Q. What happens in cases where the tax demand confirmed is enhanced in appeal /revision proceedings?
A. The notice of demand is required to be served only in respect of the enhanced dues. In so far as the amount
already confirmed prior to disposal of appeal/ revision, the recovery proceedings may be continued from the
stage at which such proceedings stood immediately before such disposal.
Q. What happens in cases where the tax demand confirmed is reduced in appeal / revision proceedings?
A. The fresh notice of demand is not required to be served in respect of the reduced dues. The Commissioner
shall give an intimation of such reduction to the taxable person and the appropriate authority with whom the
recovery proceeding is pending. The recovery proceedings already initiated prior to the disposal of such
appeal/revision may be continued in relation to the amount so reduced from the stage at which such
proceedings stood immediately before such disposal.
232
233
Chapter XVII
ADVANCE RULING
SN Particulars
95 Definitions
96 Authority for Advance Ruling
97 Application for Advance Ruling
98 Procedure on receipt of application
99 Appellate Authority for Advance Ruling
100 Appeal to Appellate Authority
101 Orders of Appellate Authority
102 Rectification of advance ruling
103 Applicability of advance ruling
104 Advance ruling to be void in certain circumstances
105 Powers of Authority and Appellate Authority
106 Procedure of Authority and Appellate Authority
95. Definitions:
In this Chapter, unless the context otherwise requires,––
Cl N Particulars Description
(a) Advance “Advance ruling” means a decision provided by the Authority or the Appellate Authority to
ruling an applicant on matters or on questions specified in
 sub-section (2) of section 97 or

 sub-section (1) of section 100,
in relation to the supply of goods or services or both being undertaken or proposed to be

undertaken by the applicant;
Q. Can a taxable person proposing to undertake any new activity seek an advance
ruling?
A. Yes. The provisions allows taxable person to seek advance ruling for any proposed
activity.
Q. Can a taxable person already undertaking an activity seek an advance ruling on the
same?
A. Yes. The provisions allow taxable person to seek advance ruling on an existing activity
undertaken by him.
(b) Appellate “Appellate Authority” means the Appellate Authority for Advance Ruling referred to in
Authority section 99;
(c) Applicant “Applicant” means any person registered or desirous of obtaining registration under this Act;
(d) Application “Application” means an application made to the Authority under sub-section (1) of section
97;
234
Authority for Advance Ruling
Maharashtra Rajasthan Gujarat Others
Member-CT Member-ST/UTT
 The issues that can be taken to Authority for Advance Ruling?
Value of supply XXX (c)

* ROD XXX (a)/(b)
Gross Output Tax Liability XXX (e)
(-) Input Tax Credit XXX (d)
Net Output Tax Liability XXX (e)
f) Whether the applicant is required to get registered?

g) Whether the particular thing done results in supply of goods/services?
235
(e) Authority “Authority” means the Authority for Advance Ruling referred to in section 96.
Q. Is Advance Ruling authority treated as Adjudicating Authority?

A. The definition of “Adjudicating Authority” excludes “Advance Ruling Authority”.
96. Authority for advance ruling:
96 Every Subject to the provisions of this Chapter, for the purposes of this Act, the Authority for
state/UT advance ruling constituted under the provisions of a State Goods and Services Tax Act or
has its own Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance
Authority ruling in respect of that State or Union territory.
for AAR
97. Application for Advance Ruling:
1 Application An applicant desirous of obtaining an advance ruling under this Chapter may make an
in the application in such form and manner and accompanied by such fee as may be prescribed,
prescribed stating the question on which the advance ruling is sought.
form and
manner
2 The issues The question on which the advance ruling is sought under this Act, shall be in respect of,––
that can be
taken to (a) classification of any goods or services or both;
Authority
for Advance (b) applicability of a notification issued under the provisions of this Act;
Ruling?????
(c) determination of time and value of supply of goodsor services or both;
(d) admissibility of input tax credit of tax paid or deemed to have been paid;
(e) determination of the liability to pay tax on any goods or services or both;
(f) whether applicant is required to be registered;
(g) whether any particular thing done by the applicant with respect to any goods or services
or both amounts to or results in a supply of goods or services or both, within the meaning of
that term.
98. Procedure on receipt of application:
1 Application On receipt of an application, the Authority shall
shall be
forwarded to  cause a copy thereof to be forwarded to the concerned officerand,
the
prescribed  if necessary, call upon him to furnish the relevant records:
officers and
the authority PROVIDED that where any records have been called for by the Authority in any case, such
may ask for records shall, as soon as possible, be returned to the said concerned officer.
the records
236
2 Admit or The Authority may, after examining the application and the records called for and after
reject the hearing the applicant or his authorised representative and the concerned officer or his
application authorised representative, by order, either admit or reject the application:
PROVIDED that the Authority shall not admit the application where the question raised in the
application is already pending or decided in any proceedings in the case of an applicant
under any of the provisions of this Act:
Opportunity PROVIDED FURTHER that no application shall be rejected under this sub-section unless an
of being opportunity of hearing has been given to the applicant:
heard
PROVIDED also that where the application is rejected, the reasons for such rejection shall be
specified in the order.
3 Copy of A copy of every order made under sub-section (2) shall be sent to the applicant and to the
order shall concerned officer.
be sent
4 Pronouncem Where an application is admitted under sub-section (2), the Authority shall, after examining
ent of such further material as may be placed before it by the applicant or obtained by the
Advance Authority and after providing an opportunity of being heard to the applicant or his authorised
Ruling representative as well as to the concerned officer or his authorised representative,
pronounce its advance ruling on the question specified in the application.
5 Deadlock= Where the members of the Authority differ on any questionon which the advance ruling is
Reference to sought, they shall state the point or points on which they differ and make a reference to the
AAR Appellate Authority (first time discussed) for hearing and decision on such question.
6 Time limit for The Authority shall pronounce its advance ruling in writing within ninety days from the date
pronouncem of receipt of application.
ent
7 Copy of the A copy of the advance ruling pronounced by the Authority duly signed by the members and
Advance certified in such manner as may be prescribed shall be sent to the
Ruling shall  applicant,
be sent to  the concerned officer and
the parties  the jurisdictional officer after such pronouncement.
99. Appellate Authority for Advance Ruling:
99 Every state/ Subject to the provisions of this Chapter, for the purposes of this Act, the Appellate
UT has its Authority for Advance Ruling constituted under the provisions of a State Goods and Services
own AAAAR Tax Act or a Union Territory Goods and Services Tax Act shall be deemed to be the
Appellate Authority in respect of that State or Union territory.
237
238
AAR
Application on specified Copy forwarded to PO &
issues with fees can ask for records
Applicant Prescribed officer
Applicant
Accept* Reject after

Copy Copy hearing the
applicant
Prescribed
Officer
NO Deadlock Deadlock
(Unanimous)
Applicant
Appeal/Reference-
Appeal AAAR
Order within 90 Copy
days of making
30(+30)
application days
PO or
CGST/SGST
Officer
NO Deadlock Deadlock
(Unanimous)
Order within 90 days No pronouncement

of making reference
Copy
Applicant PO or CGST/SGST AAR

Officer
239
100. Appeal to Appellate Authority:
 [It’s the first and the final Appellate Authority in Advance Ruling]
1 Appeal to the The concerned officer, the jurisdictional officer or an applicant aggrieved by any advance
Appellate ruling pronounced under sub-section (4) of section 98, may appeal to the Appellate
Authority Authority.
2 Time limit= Every appeal under this section shall be filed within a period of thirty days from the date on
30 (+30 days) which the ruling sought to be appealed against is communicated to the concerned officer,
the jurisdictional officer and the applicant:
PROVIDED that the Appellate Authority may, if it is satisfied that the appellant was
prevented by a sufficient cause from presenting the appeal within the said period of thirty
days, allow it to be presented within a further period not exceeding thirty days.
3 Appeal in Every appeal under this section shall be in such form, accompanied by such fee and verified
prescribed in such manner as may be prescribed.
form and
manner
101. Orders of Appellate Authority:
1 Orders of the The Appellate Authority may, after giving the parties to the appeal or reference an
Appellate opportunity of being heard, pass such order as it thinks fit, confirming or modifying the
Authority ruling appealed against or referred to.
2 Time limit- The order referred to in sub-section (1) shall be passed within a period of ninety days from
90 days the date of filing of the appeal under section 100 or a reference under sub-section (5) of
section 98.
3 In case of Where the members of the Appellate Authority differ on any point or points referred to in
deadlock-no appeal or reference, it shall be deemed that no advance rulingcan be issued in respect of the
pronouncem question under the appeal or reference.
ent
4 Communicati A copy of the advance ruling pronounced by the Appellate Authority duly signed by the
on to the Members and certified in such manner as may be prescribed shall be sent to
applicant,  the applicant,
CGST/SGST  the concerned officer,
Officer and  the jurisdictional officer and
to the  to the Authority after such pronouncement.
AUTHORITY
240
102. Rectification of Advance Ruling:
102 Time period The Authority or the Appellate Authority may amend any order passed by it under section
for 98 or section 101, so as to rectify any error apparent on the face of the record, if such error
rectification is noticed by the Authority or the Appellate Authority on its own accord, or is brought to its
- 6 months notice by the concerned officer, the jurisdictional officer, the applicant or the appellant
from the within a period of six months from the DATE OF THE ORDER:
date of
order PROVIDED that no rectification which has the effect of enhancing the tax liability or
reducing the amount of admissible input tax credit shall be made unless the applicant or the
appellant has been given an opportunity of being heard.
103. Applicability of Advance Ruling:
1 The The advance ruling pronounced by the Authority or the Appellate Authorityunder this
Advance Chapter shall be binding only—
Ruling shall
be binding (a) on the applicant who had sought it in respect of any matter referred to in subsection (2)
on… of section 97 for advance ruling;
(b) on the concerned officer or the jurisdictional officer in respect of the applicant.
2 When it The advance ruling referred to in sub-section (1) shall be binding unless the law, facts or
shall not be circumstances supporting the original advance ruling have changed.
binding??
104. Advance ruling to be void in certain circumstances:
1 Advance Where the Authority or the Appellate Authority finds that advance ruling pronounced by it
Ruling under sub-section (4) of section 98 or under sub-section (1) of section 101 has been obtained
obtained by by the applicant or the appellant by fraud or suppression of material facts or
fraud misrepresentation of facts, it may, by order, declare such ruling to be void ab-initio and
thereupon all the provisions of this Act or the rules made thereunder shall apply to the
applicant or the appellant as if such advance ruling had never been made:
PROVIDED that no order shall be passed under this sub-section unless an opportunity of
being heard has been given to the applicant or the appellant.
The
intervening Explanation – The period beginning with the date of such advance ruling and ending with the
period shall date of order under this sub-section shall be excluded while computing the period specified
be excluded in sub-sections (2) and (10) of section 73 or sub-sections (2) and (10) of section 74.
2 Communica A copy of the order made under sub-section (1) shall be sent to the applicant, the concerned
tion of officer and the jurisdictional officer.
order
241
105. Powers of Authority and Appellate Authority:
1 The AAR & The Authorityor the Appellate Authorityshall, for the purpose of exercising its powers
the AAAR regarding—
shall have
the powers (a) discovery and inspection;
of Civil
Courts (b) enforcing the attendance of any person and examining him on oath;
(c) issuing commissions and
(d) compelling production of books of account and other records, have all the powers of a civil
court under the Code of Civil Procedure, 1908.
2 Judicial The Authority or the Appellate Authority shall be deemed to be a civil court for the purposes
Proceeding of section 195, but not for the purposes of Chapter XXVI of the Code of Criminal Procedure,
+ 1973, and every proceeding before the Authority or the Appellate Authority shall be deemed
Authority/ to be a judicial proceedings within the meaning of sections 193 and 228, and for the purpose
Appellate of section 196 of the Indian Penal Code.
Authority=
Civil Court  Understanding:
but not for As per section 14(3) of CEA, proceedings after the summon are ‘judicial proceedings’
the within the meaning of section 193 and section 228 of the Indian Penal Code.
purpose of
Code of As per section 193 of the IPC giving false evidence is punishable with imprisonment
Criminal upto 7 years and fine.
Procedures
, 1973 U/S 228 of IPC, intentional insult or causing interruption to any public servant while
imprisonment upto six months or with fine upto Rs.1,000 or more.
106. Procedure of Authority and Appellate Authority:
106 Power to The Authority or the Appellate Authority shall, subject to the provisions of this Chapter, have
regulate power to regulate its own procedure.
its own
procedure
 FAQs:
*Q. Can the application made to the authority be withdrawn at any time?
*A. There is no such provision under GST law.
242
Appeal shall lie to SC : Special Cases:
i) on its OWN motion. Supreme Court i) Intra-state or Inter-
ii) by party aggrieved state supply?
ii) POS??
i) HC shall entertain only those QOL:

Substantial High Court a) Not determined by AT
Question of LAW b) wrongly determined by AT.
ii) Bench of atleast 2 judges of HC.
180 days + Ext
1 year
Rectification of mistake
AT 6 months + Ext
apparent from record = Refer the case back to FAA/OAA/RA. AT may refuse if Two officers
3 months from the date  Opinion that not legal & proper.
the Value of Committee
of order
case =< 50K (DA)
3mths + Ext
 PD=100% & 10%
3mths + Ext
1 year
First Appellate Revision by
PARTIAL MERGER
6(+1) months Authority  Additional Grounds
Chief Comm.
of appeal. or Comm.
 FAA cannot refer
back.
3(+1) months  PD=100% & 10%  Erroneous
Commissioner (DA)  Prejudicial to the
interest of revenue.
Adjudicating  Illegal & improper
 C&AG observation
 Call for records to ensure Authority Revision done by  Within-1 year or 3 years
legality & propriety whichever is LATER
Commissioner (Suo-moto)
 Own motion / request from
Comm. (IGST+UTGST)
243
Chapter XVIII
APPEALS AND REVISION
SN Particulars
107 Appeals to Appellate Authority
108 Powers of Revisional Authority
109 Constitution of Appellate Tribunal and Benches thereof
110 President and Members of Appellate Tribunal, their qualification, appointment, conditions of service,
111 Procedure before Appellate Tribunal
112 Appeals to Appellate Tribunal
113 Orders of Appellate Tribunal
114 Financial and administrative powers of President
115 Interest on refund of amount paid for admission of appeal
116 Appearance by authorised representative
117 Appeal to High Court
118 Appeal to Supreme Court
119 Sums due to be paid notwithstanding appeal, etc.
120 Appeal not to be filed in certain cases
121 Non-appealable decisions and orders
107. Appeals to Appellate Authority:
1 Appeal to FAA-  Any person aggrieved by any decision or order passed under this Act or the State
Within 3 months Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an
from the date of adjudicating authority
communication
 may appeal to such Appellate Authority as may be prescribed within three months
from the date on which the said decision or order is communicated to such person.
Q. Who is an adjudicating authority?

A. Section 2(4) defines adjudicating authority to mean any authority competent to
pass any order or decision under this Act. However, following are not covered
under the ambit of adjudicating authority:
(a) Board(Central Board of Customs and Excise),
(b) Revisional Authority,
(c) Authority for Advance Ruling,
(d) Appellate Authority for Advance Ruling,
(e) First Appellate Authority
(f) Appellate Tribunal
2 Departmental  The Commissioner may, on his own motion, or upon request from the Commissioner
Appeal (i.e. of State tax or the Commissioner of Union territory tax, call for and examine the
Appeal by record of any proceedings in which an adjudicating authority has passed any decision
Revenue)- or order under this Act or the State Goods and Services Tax Act or the Union
Within 6 months Territory Goods and Services Tax Act, for the purpose of satisfying himself as to the
from the date of legality or propriety of the said decision or order and
communication
244
 may, by order, direct any officer subordinate to him to apply to the Appellate
Authority within six months from the date of communication of the said decision or
order for the determination of such points arising out of the said decision or order as
may be specified by the Commissioner in his order.
Normal Appeal 3 months

Departmental Appeal 6 months
3 The provisions  Where, in pursuance of an order under sub-section (2), the authorised officer makes
shall apply to an application to the Appellate Authority, such application shall be dealt with by the
the Appellate Authority
Departmental
Appeal  as if it were an appeal made against the decision or order of the adjudicating authority
and such authorised officer were an appellant and the provisions of this Act relating to
appeals shall apply to such application.
4 Extension by a The Appellate Authority may, if he is satisfied that the appellant was prevented by
month- sufficient cause from presenting the appeal within the aforesaid period of three months or
six months, as the case may be, allow it to be presented within a further period of one
(3/6)+1 months month.
5 Prescribed form Every appeal under this section shall be in such form and shall be verified in such manner
and manner as may be prescribed.
6 Pre-Deposits No appeal shall be filed under sub-section (1), unless the appellant has paid—
(a) Admitted- (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the
100% of the tax impugned order, as is admitted by him; and
admitted
(b) Tax in (b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising from the
dispute-10% of said order, in relation to which the appeal has been filed.
the tax in
dispute
7 Recovery Where the appellant has paid the amount under sub-section (6), the recovery proceedings
proceedings for the balance amount shall be deemed to be stayed.
shall be stayed
on payment of
PRE-DEPOSIT
8 Opportunity of The Appellate Authority shall give an opportunity to the appellant of being heard.
being heard-at
the will of FAA
9 Adjournment- The Appellate Authority may, if sufficient cause is shown at any stage of hearing of an
Not more than 3 appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for
times to a party reasons to be recorded in writing:
(Directory PROVIDED that no such adjournment shall be granted more than three times to a party
power not during hearing of the appeal.
mandatory)
245
10 Additional  The Appellate Authority may, at the time of hearing of an appeal, allow an appellant
ground of to add any ground of appeal not specified in the grounds of appeal,
appeal
 if it is satisfied that the omission of that ground from the grounds of appeal was not
(Very Imp) wilful or unreasonable.
11 FAA pass the The Appellate Authority shall, after making such further inquiry as may be necessary, pass
order as thinks such order, as it thinks just and proper, confirming, modifying or annulling the decision or
fit order appealed against but shall not refer the case back to the adjudicating
authority that passed the said decision or order:
PROVIDED that an order enhancing any fee or penalty or fine in lieu of confiscation or
(if situation confiscating goods of greater value or reducing the amount of refund or input tax credit
leads to demand shall not be passed unless the appellant has been given a reasonable opportunity of
against the showing cause against the proposed order:
taxable person)
PROVIDED FURTHER that where the Appellate Authority is of the opinion that any tax has
not been paid or short-paid or erroneously refunded, or where input tax credit has been
wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax
credit shall be passed unless the appellant is given notice to show cause against the
proposed order and the order is passed within the time limit specified under section 73 or
section 74.
12 Speaking order The order of the Appellate Authority disposing of the appeal shall be in writing and shall
state the points for determination, the decision thereon and the reasons for such decision.
13 Time limit The Appellate Authority shall, where it is possible to do so, hear and decide every appeal
within a period within a period of one year from the date on which it is filed:
of 1 year from
the date on PROVIDED that where the issuance of order is stayed by an order of a court or Tribunal,
which it is filed the period of such stay shall be excluded in computing the period of one year.
and stay period
excluded
14 Communication On disposal of the appeal, the Appellate Authority shall communicate the order passed by
to Appellant and it to the appellant, respondent and to the adjudicating authority.
to the AA
15 Communication A copy of the order passed by the Appellate Authority shall also be sent to the
also to jurisdictional Commissioner or the authority designated by him in this behalf and the
Commissioner of jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an
CGST & SGST authority designated by him in this behalf.
16 The order Every order passed under this section shall, subject to the provisions of section 108 or
attains finality if section 113 or section 117 or section 118 be final and binding on the parties.
not appealed
further
246
Illustration 1 –
An assessee received an order of the Assistant Commissioner of Central Tax dated 20-10-2017 in relation to
adjudication of a demand on 27-10-2017. However, he was aggrieved by the said order, hence he filed an
appeal to Commissioner (Appeals) on 27-01-2018. The Commissioner (Appeals), in response, rejected the
appeal as he was of the opinion that it was time barred. Discuss.
Ans: Section 107 of the CGST Act, 2017 provides that an assessee aggrieved by the order of adjudicating
authority may appeal to the Commissioner (Appeals) within 3 months from the date of the communication to
him of such decision or order.
In the given case, the assessee received the order of Assistant Commissioner on 27-10-2017, hence he could
file the appeal to Commissioner (Appeals) within 3 months from the said date which expires on 27-01-2018.
Therefore, the assessee has made the appeal within time and the opinion of the Commissioner (Appeals) is not
tenable.
Illustration 2 –
Compute the quantum of pre-deposit required to be made under section 107 of the CGST Act, 2017 in each of
the following independent cases :
(1) In an order dated 15-10-2018 issued to M/s. MM Ltd., the Joint Commissioner of central tax has
confirmed a tax demand of Rs. 55,00,000. M/s. MM Ltd. has admitted Rs. 5,00,000 as tax liability and
intends to file an appeal with the Commissioner (Appeals) against tax demand of Rs. 50,00,000.
(2) In an order dated 15-10-2018 issued to M/s. JJ Ltd., the Joint Commissioner of central tax has
confirmed a tax demand of Rs. 55,00,000 and imposed a penalty of Rs. 7,00,000. M/s. JJ Ltd. intends
to file an appeal with the Commissioner (Appeals) against the said order.
Solution:
(1) Section 107(6) of the CGST Act, 2017 require an appellant before Appellate authority to pre-deposit full
amount of tax, interest, fine, fee and penalty, as is admitted by him, arising from the impugned order and
a sum equal to 10% of the remaining amount of tax in dispute arising from the impugned order. Thus, RR
Ltd. has to pre-deposit Rs. 5,00,000 (admitted tax) and 10% of Rs. 50,00,000 (tax in dispute) = Rs.
10,00,000.
(2) Section 107(6) of the CGST Act, 2017 require an appellant before Appellate authority to pre-deposit full
amount of tax, interest, fine, fee and penalty, as is admitted by him, arising from the impugned order and
a sum equal to 10% of the remaining amount of tax in dispute arising from the impugned order. In this
case since entire amount of tax demanded is in dispute, hence KK Ltd. has to pre-deposit 10% of Rs.
55,00,000 = 5,50,000.
247
108. Powers of Revisional Authority:
1 Revision= Subject to the provisions of section 121 and any rules made thereunder, the Revisional
Erroneous Authority may, on his own motion, or upon information received by him or on request from
+ Prejudicial the Commissioner of State tax, or the Commissioner of Union territory tax, call for and
to the interest examine the record of any proceedings, and if he considers that any decision or order
of revenue passed under this Act or under the State Goods and Services Tax Act or the Union Territory
Goods and Services Tax Act by any officer subordinate to him is
Commissioner  erroneous in so far as it is prejudicial to the interest of revenue and

while
exercising  is illegal or improper or has not taken into account certain material facts, whether
revisional available at the time of issuance of the said order or not or
powers may
enhance,  in consequence of an observation by the Comptroller and Auditor General of India,
modify or
annul the he may, if necessary, stay the operation of such decision or order for such period as he
order deems fit and after giving the person concerned an opportunity of being heard and after
making such further inquiry as may be necessary, pass such order, as he thinks just and
proper, including enhancing or modifying or annulling the said decision or order.
2 Inapplicability The Revisional Authority shall not exercise any power under sub-section (1), if—
(Very Imp)
(a) the order has been subject to an appeal under section 107 (Appellate Authority) or
section 112 (Appellate Tribunal) or section 117 (High Court) or section 118 (Supreme Court);
or
(b) the period specified under sub-section (2) of section 107 (i.e.6 months) has not yet
expired or more than three years have expired after the passing of the decision or order
sought to be revised; or
(c) the order has already been taken for revision under this section at an earlier stage; or
(d) the order has been passed in exercise of the powers under sub-section (1):
PARTIAL PROVIDED that the Revisional Authority may pass an order under sub-section (1) on any
MERGER point which has not been raised and decided in an appeal referred to in clause (a) of sub-
section (2),
 before the expiry of a period of one year from the date of the order in such appeal
or
 before the expiry of a period of three years referred to in clause (b) of that sub-
section (irt decision or order sought to be revised),
whichever is LATER.
3 The issues Every order passed in revision under sub-section (1) shall, subject to the provisions of section
raised 113 or section 117 or section 118, be final and binding on the parties.
in a appeal
attains finality
4 Exclusion in  If the said decision or order involves an issue on which the Appellate Tribunal or the
computing the High Court has given its decision in some other proceedings and an appeal to the High
period Court or the Supreme Court against such decision of the Appellate Tribunal or the High
referred Court is pending,
248
to in clause (b)
of sub-section  the period spent between the date of the decision of the Appellate Tribunal and
(2).
 the date of the decision of the High Court or the date of the decision of the High Court
and
 the date of the decision of the Supreme Court shall be
 excluded in computing the period of limitation referred to in clause (b) of sub-section

(2) where proceedings for revision have been initiated by way of issue of a notice under
this section.
5 Stay period by Where the issuance of an order under sub-section (1) is stayed by the order of a court or
the Court or Appellate Tribunal, the period of such stay shall be excluded in computing the period of
Tribunal limitation referred to in clause (b) of sub-section (2).
6 For the purposes of this section, the term,––
Record (i)“Record” shall include all records relating to any proceedings under this Act available at
the time of examination by the Revisional Authority;
(ii)“Decision” shall include intimation given by any officer lower in rank than the Revisional
Decision Authority.
 FAQs:
Q. Whether the Commissioner has any powers to remand the matter back to adjudicating authority for fresh
consideration?
A. No such powers are brought out in the provision.
Q. Which are the other orders or decision that a Revisional authority cannot review?
A. Following orders or decisions cannot be reviewed by a revision authority
(a) order has been subject to an appeal under before Tribunal (under section 112) or High Court (under section
117) or Supreme Court (under section 118); or
(b) the period of 6 months as specified under 107(2) for preferring an appeal by department before FAA has
not yet expired or
(c) where more than three years have expired after the passing of the decision or order sought to be revised.
(d) where the order has already been taken for revision under this section at any earlier stage.
(e) revisionary order passed under this section (i.e. section 108(1))
249
109. Constitution of Appellate Tribunal and Benches thereof:
1 Constitution The Government shall, on the recommendations of the Council, by notification, constitute with
of GST effect from such date as may be specified therein, an Appellate Tribunal known as the Goods
Appellate and Services Tax Appellate Tribunal for hearing appeals against the orders passed by the
Tribunal Appellate Authority or the Revisional Authority.
2 Benches The powers of the Appellate Tribunal shall be exercisable by the National Bench and Benches
thereof (hereinafter in this Chapter referred to as “Regional Benches”), State Bench and
Benches thereof (hereafter in this Chapter referred to as “Area Benches”).
[National Bench + Regional Benches and State Bench and Area Benches]
3 National The National Bench of the Appellate Tribunal shall be situated at New Delhi which shall be
Bench (New presided over by the PRESIDENT and shall consist of one Technical Member (Centre) and one
Delhi) Technical Member (State).
[President + 1 TM (Centre) + 1 TM (State)]
4 Regional The Government shall, on the recommendations of the Council, by notification, constitute such
Bench number of Regional Benches as may be required and such Regional Benches shall consist of a
JUDICIAL MEMBER, one Technical Member (Centre) and one Technical Member (State).
[Judicial Member + 1 TM (Centre) + 1 TM (State)]
5 Scope of NB The National Bench or Regional Benches of the Appellate Tribunal shall have jurisdiction to
or RB = hear appeals against the orders passed by the Appellate Authority or the Revisional Authority in
Place of the cases where one of the issues involved relates to the PLACE OF SUPPLY.
Supply
6 State Bench The Government shall, by notification, specify for each State or Union territory, a Bench of the
+ Area Appellate Tribunal (hereafter in this Chapter, referred to as “State Bench”) for exercising the
Benches powers of the Appellate Tribunal within the concerned State or Union territory:
Provided that the Government shall, on receipt of a request from any State Government,
constitute such number of Area Benches in that State, as may be recommended by the Council:
State AT = Provided further that the Government may, on receipt of a request from any State, or on its
AT for any own motion for a Union territory, notify the Appellate Tribunal in a State TO ACT AS the
OTHER Appellate Tribunal for ANY OTHER STATE or UNION TERRITORY, as may be recommended by
STATE or UT the Council, subject to such terms and conditions as may be prescribed.
7 Scope of SB The State Bench or Area Benches shall have jurisdiction to hear appeals against the orders
or AB = passed by the Appellate Authority or the Revisional Authority in the cases involving matters
Matters other than those referred to in sub-section (5).
other than
Place of
Supply
8 Transfer of The President and the State President shall, by general or special order, distribute the business
cases or transfer cases among Regional Benches or, as the case may be, Area Benches in a State.
among RB
or AB
9 SB and AB Each State Bench and Area Benches of the Appellate Tribunal shall consist of a Judicial
Member, one Technical Member (Centre) and one Technical Member (State) and the State
Government may designate the senior most Judicial Member in a State as the STATE
250
GST Appellate Tribunal
National Level State Level
National Bench Regional Bench State Bench Area Bench
President Judicial Member + 1

State President Judicial Member
+ 1 TM (Centre) TM (Centre)
+ 1 TM (Centre) + 1 TM (Centre)
+ 1 TM (State) + 1 TM (State)
+ 1 TM (State) + 1 TM (State)
Matters related to Matters related to

PLACE OF SUPPLY Other than PLACE OF
SUPPLY
251
PRESIDENT.
[SB = STATE PRESIDENT + 1 TM (Centre) + 1 TM (State)
AB = Judicial Member + 1 TM (Centre) + 1 TM (State)]
10 Absence of In the absence of a Member in any Bench due to vacancy or otherwise, any appeal may, with
member in the approval of the President or, as the case may be, the State President, be heard by a Bench
a Bench = of TWO Members:
Appeal may
be heard by PROVIDED that any appeal where the tax or input tax credit involved or the difference in tax or
2 members input tax credit involved or the amount of fine, fee or penalty determined in any order
When can a appealed against, does not exceed five lakh rupees and which does not involve any QUESTION
single OF LAW may, with the approval of the President and subject to such conditions as may be
member can prescribed on the recommendations of the Council, be heard by a bench consisting of a SINGLE
hear an MEMBER.
appeal??
Value =< Rs.

5 lakhs AND
There is NO
question of
LAW
Involved
11 In case of If the Members of the National Bench, Regional Benches, State Bench or Area Benches differ in
Deadlock opinion on any point or points, it shall be decided according to the opinion of the majority, if
there is a majority, but if the Members are EQUALLY DIVIDED equally divided, they shall state
the point or points on which they differ, and the case shall be referred by the President or as
the case may be, State President for hearing on such point or points to one or more of the
other Members of the National Bench, Regional Benches, State Bench or Area Benches and
such point or points shall be decided according to the opinion of the majority of Members
who have heard the case, including those who first heard it.
12 Transfer of The Government, in consultation with the President may, for the administrative convenience,
Members transfer—
(a) any Judicial Member or a Member Technical (State) from one Bench to another Bench,
whether National or Regional; or
(b) any Member Technical (Centre) from one Bench to another Bench, whether National,
Regional, State or Area.
[Total RB = Judicial Member + 1 TM (Centre) + 1 TM (State)]
13 Transfer of The State Government, in consultation with the State President may, for the administrative
Members convenience, transfer a Judicial Member or a Member Technical (State) from one Bench to
another Bench within the State.
[AB = Judicial Member + 1 TM (Centre) + 1 TM (State)]
14 Defect in No act or proceedings of the Appellate Tribunal shall be questioned or shall be invalid merely
constitution on the ground of the existence of any vacancy or defect in the constitution of the Appellate
of AT Tribunal.
252
110. President and Members of Appellate Tribunal, their qualification, appointment, conditions of service,
etc.:
1 Eligibility A person shall not be qualified for appointment as—
(a) the President, unless he has been a Judge of the Supreme Court or is or has been the
Chief Justice of a High Court, or is or has been a Judge of a High Court for a period not less
than five years;
(b) a Judicial Member, unless he—
(i) has been a Judge of the High Court; or
(ii) is or has been a District Judge qualified to be appointed as a Judge of a High

Court; or
(iii) is or has been a Member of Indian Legal Service and has held a post not less
than Additional Secretary for three years;
(c) a Technical Member (Centre) unless he is or has been a member of Indian Revenue
(Customs and Central Excise) Service, Group A, and has completed at least fifteen years of
service in Group A;
(d) a Technical Member (State) unless he is or has been an officer of the State Government
not below the rank of Additional Commissioner of Value Added Tax or the State goods and
services tax or such rank as may be notified by the concerned State Government on the
recommendations of the Council with at least three years of experience in the administration
of an existing law or the State Goods and Services Tax Act or in the field of finance and
taxation.
2 NB & RB: The President and the Judicial Members of the National Bench and the Regional Benches
Appointment shall be appointed by the Government after consultation with the Chief Justice of India or his
of President nominee:
+ Judicial
Member in
consultation
with CJI
Standing PROVIDED that in the event of the occurrence of any vacancy in the office of the President by
President in reason of his death, resignation or otherwise, the senior most Member of the National Bench
case of shall act as the President until the date on which a new President, appointed in accordance
vacancy + with the provisions of this Act to fill such vacancy, enters upon his office:
and in case
of illness of PROVIDED FURTHER that where the President is unable to discharge his functions owing to
President = absence, illness or any other cause, the senior most Member of the National Bench shall
Senior most discharge the functions of the President until the date on which the President resumes his
member of duties.
NB
3 NB & RB: The Technical Member (Centre) and Technical Member (State) of the National Bench and
TM (Centre) Regional Benches shall be appointed by the - on the recommendations of a Selection
+ TM (State) Committee consisting of such persons and in such manner as may be prescribed.
by CG =
Selection
Committee
253
4 SB & AB: The Judicial Member of the State Bench or Area Benches shall be appointed by the State
Appointment Government after consultation with the Chief Justice of the High Court of the State or his
of JM by SG nominee.
in
consultation
with CJ of
High Court
5 SB & AB: The Technical Member (Centre) of the State Bench or Area Benches shall be appointed by the
TM (Centre) - Central Government and
CG
TM (State) – Technical Member (State) of the State Bench or Area Benches shall be appointed by the State
SG Government in such manner as may be prescribed.
6 No No appointment of the Members of the Appellate Tribunal shall be invalid merely by the
appointment reason of any vacancy or defect in the constitution of the Selection Committee.
invalid if
there is
defect in SC
7 No conflicts Before appointing any person as the President or Members of the Appellate Tribunal, the
of interest Central Government or, as the case may be, the State Government, shall satisfy itself that such
person does not have any financial or other interests which are likely to prejudicially affect
his functions as such President or Member.
8 Salary shall The salary, allowances and other terms and conditions of service of the President, State
be as President and the Members of the Appellate Tribunal shall be such as may be prescribed:
prescribed PROVIDED that neither salary and allowances nor other terms and conditions of service of the
President, State President or Members of the Appellate Tribunal shall be varied to their
Salary cannot disadvantage after their appointment.
be reduced
post their
appointment
9 President’s The President of the Appellate Tribunal shall hold office for a term of three years from the
tenure date on which he enters upon his office, or until he attains the age of seventy years,
- 3 years whichever is earlier and shall be eligible for reappointment.
- 75 years
-
Reappointme
nt possible
10 JM + STATE The Judicial Member of the Appellate Tribunal and the State President shall hold office for a
PRESIDENT’s term of three years from the date on which he enters upon his office, or until he attains the
tenure age of sixty-five years, whichever is earlier and shall be eligible for reappointment.
- 3 years
- 65 years
-
Reappointme
nt possible
11 TM (Centre) The Technical Member (Centre) or Technical Member (State) of the Appellate Tribunal shall
or TM (State) hold office for a term of five years from the date on which he enters upon his office, or until
- 5 years he attains the age of sixty-five years, whichever is earlier and shall be eligible for
- 65 years reappointment.
-
Reappointme
254
nt possible
12 Resignation : The President, State President or any Member may, by notice in writing under his hand
addressed to the Central Government or, as the case may be, the State Government RESIGN
Continue to from his office:
hold office
for 3 months PROVIDED that the President, State President or Member shall continue to hold office until
OR successor the expiry of three months from the date of receipt of such notice by the Central Government,
enters OR or, as the case may be, the State Government or until a person duly appointed as his successor
expiry of his enters upon his office or until the expiry of his term of office, whichever is the earliest.
term
EARLIER
13 Removal: The Central Government may, after consultation with the Chief Justice of India, in case of the
President, Judicial Members and Technical Members of the National Bench, Regional Benches
or Technical Members (Centre) of the State Bench or Area Benches, and
the State Government may, after consultation with the Chief Justice of High Court, in case of
the State President, Judicial Members, Technical Members (State) of the State Bench or Area
Benches, may remove from the office such President or Member, who—
(a) has been adjudged an insolvent; or
(b) has been convicted of an offence which, in the opinion of such Government
involves moral turpitude; or
(c) has become physically or mentally incapable of acting as such President, State
President or Member; or
(d) has acquired such financial or other interest as is likely to affect prejudicially his
functions as such President, State President or Member; or
(e) has so abused his position as to render his continuance in office prejudicial to the
public interest:
PROVIDED that the President, State President or the Member shall not be removed on any of
the grounds specified in clauses (d) and (e), unless he has been informed of the charges
against him and has been given an opportunity of being heard.
14 The Without prejudice to the provisions of sub-section (13),––

members
shall not be (a) the President or a Judicial and Technical Member of the National Bench or Regional
removed Benches, Technical Member (Centre) of the State Bench or Area Benches shall not be
except by an removed from their office except by an order made by the Central Government on the
Order ground of proved misbehaviour or incapacity after an inquiry made by a Judge of the
Supreme Court nominated by the Chief Justice of India on a reference made to him by the
Central Government and of which the President or the said Member had been given an
opportunity of being heard;
(b) the Judicial Member or Technical Member (State) of the State Bench or Area Benches
shall not be removed from their office except by an order made by the State Government on
the ground of proved misbehaviour or incapacity after an inquiry made by a Judge of the
concerned High Court nominated by the Chief Justice of the concerned High Court on a
reference made to him by the State Government and of which the said Member had been
given an opportunity of being heard.
255
15 The CG may The Central Government, with the concurrence of the Chief Justice of India, may SUSPEND
suspend for from office, the President or a Judicial or Technical Members of the National Bench or the
whom the Regional Benches or the Technical Member (Centre) of the State Bench or Area Benches in
reference has respect of whom a reference has been made to the Judge of the Supreme Court under sub-
been made section (14).
to the judge
of SC
16 The SG may The State Government, with the concurrence of the Chief Justice of the High Court, may
suspend for SUSPEND from office, a Judicial Member or Technical Member (State) of the State Bench or
whom the Area Benches in respect of whom a reference has been made to the Judge of the High Court
reference has under sub-section (14).
been made
to the judge
of SC
17 On ceasing to Subject to the provisions of article 220 of the Constitution, the President, State President or
hold office other Members, on ceasing to hold their office, shall not be eligible to appear, act or plead
they cannot before the National Bench and the Regional Benches or the State Bench and the Area Benches
practice thereof where he was the President or, as the case may be, a Member.
before the
same BENCH
111. Procedure before Appellate Tribunal:
1 Principle of The Appellate Tribunal shall not, while disposing of any proceedings before it or an appeal
Natural before it, be bound by the procedure laid down in the Code of Civil Procedure, 1908, but shall
Justice to be be guided by the principles of natural justice and subject to the other provisions of this Act
followed and the rules made thereunder, the Appellate Tribunal shall have power to regulate its own
procedure.
2 Appellate The Appellate Tribunal shall, for the purposes of discharging its functions under this Act, have
Tribunal to the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 while
be the Court trying a suit in respect of the following matters, namely:—
under Code
of Civil (a) summoning and enforcing the attendance of any person and examining him on oath;
Procedure,
1908 (b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) subject to the provisions of sections 123 and 124 of the Indian Evidence Act, 1872,
requisitioning any public record or document or a copy of such record or document from any
office;
(e) issuing commissions for the examination of witnesses or documents;
(f) dismissing a representation for default or deciding it ex parte;
(g) setting aside any order of dismissal of any representation for default or any order passed
by it ex parte; and
(h) any other matter which may be prescribed.
256
3 AT send its Any order made by the Appellate Tribunal may be enforced by it in the same manner as if it
order to the were a decree made by a court in a suit pending therein, and it shall be lawful for the
Court for Appellate Tribunal to send for execution of its orders to the court within the local limits of
execution whose jurisdiction,—
(a) in the case of an order against a company, the registered office of the company is
situated; or
(b) in the case of an order against any other person, the person concerned voluntarily resides
or carries on business or personally works for gain.
4 Judicial All proceedings before the Appellate Tribunal shall be deemed to be judicial proceedings
Proceedings within the meaning of sections 193 and 228, and for the purposes of section 196 of the Indian
+ Appellate Penal Code, and
Tribunal to
be a Civil the Appellate Tribunal shall be deemed to be Civil court for the purposes of section 195 and
Court under Chapter XXVI of the Code of Criminal Procedure, 1973.
Code of
Criminal  Understanding:
Procedure, As per section 14(3) of CEA, proceedings after the summon are ‘judicial proceedings’
1973 within the meaning of section 193 and section 228 of the Indian Penal Code.
As per section 193 of the IPC giving false evidence is punishable with imprisonment upto
7 years and fine.
U/S 228 of IPC, intentional insult or causing interruption to any public servant while
imprisonment upto six months or with fine upto Rs.1,000 or more.
112. Appeals to Appellate Tribunal:
1 Order passed  Any person aggrieved by an order passed against him under section 107 or section 108
by FAA and the of this Act or the State Goods and Services Tax Act or the Union Territory Goods and
RA is Services Tax Act
appealable
here- within 3  may appeal to the Appellate Tribunal against such order within three months from the
months date on which the order sought to be appealed against is communicated to the person
preferring the appeal.
2 Tribunal can The Appellate Tribunal may, in its discretion, refuse to admit any such appeal where the tax
refuse if value or input tax credit involved or the difference in tax or input tax credit involved or the
of case is not amount of fine, fee or penalty determined by such order, does not exceed fifty thousand
exceeding rupees.
Rs.50K
3 Constitution of  The Commissioner may, on his own motion, or upon request from the Commissioner of
Committees of State tax or Commissioner of Union territory tax, call for and examine the record of any
2 officers to 10 order passed by the Appellate Authority or the Revisional Authority under this Act
review the or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax
orders Act for the purpose of satisfying himself as to the legality or propriety of the said
order and may, by order,
257
 direct any officer subordinate to him to apply to the Appellate Tribunal within six
months from the date on which the said order has been passed for determination of
such points arising out of the said order as may be specified by the Commissioner in
his order.
4 Departmental Where in pursuance of an order under sub-section (3) the authorised officer makes an
Appeal shall be application to the Appellate Tribunal, such application shall be dealt with by the Appellate
dealt as a Tribunal as if it were an appeal made against the order under sub-section (11) of section
proper appeal 107 or under sub-section (1) of section 108 and the provisions of this Act shall apply to such
application, as they apply in relation to appeals filed under subsection (1).
5 Memorandum  On receipt of notice that an appeal has been preferred under this section, the party
of cross- against whom the appeal has been preferred may, notwithstanding that he may not
objections- have appealed against such order or any part thereof, file, within forty-five days of the
within 45 days receipt of notice,
 a memorandum of cross-objections, verified in the prescribed manner, against any

part of the order appealed against and such memorandum shall be disposed of by the
Appellate Tribunal, as if it were an appeal presented within the time specified in sub-
section (1).
6 Extension of The Appellate Tribunal may admit an appeal within three months after the expiry of the
time limit for period referred to in sub-section (1), or permit the filing of a memorandum of cross-
filing appeal objections within forty-five days after the expiry of the period referred to in sub-section (5)
and MOCO- if it is satisfied that there was sufficient cause for not presenting it within that period.
infinity*
7 Application for An appeal to the Appellate Tribunal shall be in such form, verified in such manner and shall
appeal shall be be accompanied by such fee, as may be prescribed.
accompanied
by the fees (No fees for departmental appeal + MOCO)
8 Pre-deposits No appeal shall be filed under sub-section (1), unless the appellant has paid––
(a) Admitted- (a) in full, such part of the amount of tax, interest, fine, fee and penalty arising from the
100% of the tax impugned order, as is admitted by him, and
admitted
(b) Tax in (b) a sum equal to twenty per cent. of the remaining amount of tax in dispute, in addition
dispute-20% of to the amount paid under sub-section (6) of section 107, arising from the said order, in
the tax in relation to which the appeal has been filed.
dispute
9 Recovery Where the appellant has paid the amount as per sub-section (8), the recovery proceedings
proceedings for the balance amount shall be deemed to be stayed till the disposal of the appeal.
shall be stayed
on payment of
PRE-DEPOSIT
10 Application for Every application made before the Appellate Tribunal,—

appeal shall be
accompanied (a) in an appeal for rectification of error or for any other purpose; or
by the fees
(No fees for (b) for restoration of an appeal or an application, shall be accompanied by such fees as may
departmental be prescribed.
appeal)
258
Particulars Fees Pre-deposit

Assessee
-Appeal  
-MOCO X 
Department
-Appeal X X
-MOCO X X
Illustration 3:
M/s. Ashish Associates deposits Rs. 9,50,000 as pre-deposit on 10-10-2017 and files an appeal with CESTAT.
CESTAT decides the appeal in favour of M/s. Ashish Associates on 25-12-2017. M/s. Ashish Associates
submits a letter seeking refund of the pre-deposit on 30-01-2018. The pre-deposit is refunded to M/s. Ashish
Associates on 28-02-2018. Compute the amount of interest payable on refund of such pre-deposit, if any.
Solution: Section 115 of CGST Act, 2017 provides for payment of interest at rate specified in section 56 i.e. @
6% per annum on the refund of such pre-deposit from the date of its payment to the date of refund.
Thus, interest payable on refund of pre-deposit of Rs. 9,50,000 will be Rs. 22,019 (rounded off) [Rs. 9,50,000 ×
6% × 141/365]
113. Orders of Appellate Tribunal:
1 The AT  The Appellate Tribunal may, after giving the parties to the appeal an opportunity of
i. Passes order being heard, pass such orders thereon as it thinks fit, confirming, modifying or
annulling the decision or order appealed against or
ii. Refer the
case back to  may refer the case back to the Appellate Authority, or the Revisional Authority or to
the FAA, or the the original adjudicating authority, with such directions as it may think fit, for a fresh
RA and OAA adjudication or decision
iii. Additional  after taking additional evidence, if necessary.

evidence
2 Adjournment The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of an
appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for
(Not more than reasons to be recorded in writing:
3 times to a
party) PROVIDED that no such adjournment shall be granted more than three times to a party
during hearing of the appeal.
3 Rectification of The Appellate Tribunal may amend any order passed by it under sub-section (1) so as to
mistake rectify any error apparent on the face of the record, if such error is noticed by it on its own
apparent from accord, or is brought to its notice by the Commissioner or the Commissioner of State tax or
record- the Commissioner of the Union territory tax or the other party to the appeal within a period
Within 3 of three months from the date of the order:
months from
the date of the PROVIDED that no amendment which has the effect of enhancing an assessment or
order reducing a refund or input tax credit or otherwise increasing the liability of the other party,
shall be made under this sub-section, unless the party has been given an opportunity of
being heard.
259
4 Time limit to The Appellate Tribunal shall, as far as possible, hear and decide every appeal within a
dispense the period of one year from the date on which it is filed.
appeal
5 Communication The Appellate Tribunal shall send a copy of every order passed under this section to the
of the order Appellate Authority or the Revisional Authority, or the original adjudicating authority, as
the case may be, the appellant and the jurisdictional Commissioner or the Commissioner of
State tax or the Union territory tax.
6 AT regulates its Save as provided in section 117 or section 118, orders passed by the Appellate Tribunal on
procedures and an appeal shall be final and binding on the parties.
the procedures
of the Branches
 FAQs:
Q. Whether Tribunal has power to rectify / amend the orders passed by it?
A. Yes, Tribunal may amend any order passed by it under in terms of Section 113(1) so as to rectify any mistake
apparent from the record. Tribunal could undertake rectification on its own or on application by either of the
parties to t1he appeal. The application for rectification shall be made within a period of three months from the
date of the order sought to be rectified.
However, no amendment which has the effect of enhancing an assessment or reducing a refund or input tax
credit or otherwise increasing the liability of the other party, shall be made under this sub-section, unless the
Tribunal has given notice to him of its intention to do so and has allowed him a reasonable opportunity of
being heard.
114. Financial and administrative powers of President:
114 Financial & The President shall exercise such financial and administrative powers over the National
administrative Bench and Regional Benches of the Appellate Tribunal as may be prescribed:
powers of
President Provided that the President shall have the authority to DELEGATE such of his financial and
administrative powers as he may think fit to any other Member or any officer of the
National Bench and Regional Benches, subject to the condition that such Member or officer
shall, while exercising such delegated powers, continue to act under the DIRECTION,
CONTROL and SUPERVISION of the President.
115. Interest on refund of amount paid for admission of appeal:
115 Interest in Where an amount paid by the appellant under sub-section (6) of section 107 or subsection
case of (8) of section 112 is required to be refunded consequent to any order of the Appellate
refund of Authority or of the Appellate Tribunal, interest at the rate specified under section 56 shall be
pre-deposits payable in respect of such refund
(from the from the date of payment of the amount till the date of refund of such amount.
date of
payment till Q. Where an assessee gets a favorable decision either before FAA or the Tribunal,
the date of whether the pre-deposit would be refunded back? Whether any interest is paid?
refund) A. Yes, where the assessee gets a favorable decision (fully or partially), the amount paid
260
as pre-deposit would be refunded along with interest at the rate which is computed
from the date of deposit till date of refund.
116. Appearance by authorised representative:
1 Appearance Any person who is entitled or required to appear before an officer appointed under this Act, or
by AR the Appellate Authority or the Appellate Tribunal (the last forum) in connection with any
proceedings under this Act, may, otherwise than when required under this Act to appear
personally for examination on oath or affirmation, subject to the other provisions of this
section, appear by an authorised representative.
2 Who can be For the purposes of this Act, the expression “authorised representative” shall mean a person
the AR??? authorised by the person referred to in sub-section (1) to appear on his behalf, being—
(a) his relative or regular employee; or
(b) an advocate who is entitled to practice in any court in India, and who has not been
debarred from practicing before any court in India; or
(c) any chartered accountant, a cost accountant or a company secretary, who holds a
certificate of practice and who has not been debarred from practice; or
(d) a retired officer of the Commercial Tax Department of any State Government or Union
territory or of the Board who, during his service under the Government, had worked in a post
not below the rank than that of a Group-B Gazetted officer for a period of not less than two
years:
PROVIDED that such officer shall not be entitled to appear before any proceedings
under this Act for a period of one year from the date of his retirement or resignation;
or
[worked on the designation of Group-B Gazetted Officer rank & above for a period of
atleast 2 years]
(e) any person who has been authorised to act as a goods and services tax practitioner on
behalf of the concerned registered person.
3 Persons SN Particulars Till When?

who are No person, —
disqualified a) who has been dismissed or removed from
for being AR Government service
b) who is convicted of an offence connected with any
proceedings under this Act, the State Goods and
Services Tax Act, the Integrated Goods and
Services Tax Act or the Union Territory Goods and
Services Tax Act, or under the existing law or under
any of the Acts passed by a State Legislature
dealing with the imposition of taxes on sale of for all times in case of
goods or supply of goods or services or both; or persons referred to in
clauses (a), (b) and (c); and
c) who is found guilty of misconduct by the prescribed
authority;
Till when??
261
d) who has been adjudged as an insolvent, shall be for the period during which
qualified to represent any person under sub-section the insolvency continues in
(1) the case of a person
referred to in clause (d)
4 Disqualified Any person who has been disqualified under the provisions of the State Goods and Services
under SGST/ Tax Act or the Union Territory Goods and Services Tax Act shall be deemed to be disqualified
UTGST Act = under this Act.
Disqualified
under CGST
117. Appeal to High Court:
1 Appeal to HC Any person aggrieved by any order passed by the State Bench or Area Benches of the
Appellate Tribunal may file an appeal to the High Court and the High Court may admit such
appeal, if it is satisfied that the case involves a substantial question of law.
2 Time limit for An appeal under sub-section (1) shall be filed within a period of one hundred and eighty days
-appeal with from the date on which the order appealed against is received by the aggrieved person and it
HC shall be in such form, verified in such manner as may be prescribed:
Stating PROVIDED that the High Court may entertain an appeal after the expiry of the said period if it
"Question of is satisfied that there was sufficient cause for not filing it within such period.
law"
3 Formulation Where the High Court is satisfied that a substantial question of law is involved in any case, it
of question shall formulate that question and
by HC
The appeal shall be heard only on the question so formulated, and the respondents shall, at
Respondents the hearing of the appeal, be allowed to argue that the case does not involve such question:
to argue that
case does not PROVIDED that nothing in this sub-section shall be deemed to take away or abridge the
involve such power of the Court to hear, for reasons to be recorded, the appeal on any other substantial
question question of law not formulated by it, if it is satisfied that the case involves such question.
4 HC decision- The High Court shall decide the question of law so formulated and deliver such judgment
speaking thereon containing the grounds on which such decision is founded and may award such cost
order as it deems fit.
(containing
grounds)
5 What are the The High Court may determine any issue which––
questions
that will be (a) has not been determined by the State Bench or Area Benches; or
looked after
by the HC? (b) has been wrongly determined by the State Bench or Area Benches, by reason of a
decision on such question of law as herein referred to in sub-section (3).
6 Bench of Where an appeal has been filed before the High Court, it shall be heard by a Bench of not
atleast 2 less than two Judges of the High Court, and shall be decided in accordance with the opinion
judges of HC of such Judges or of the majority, if any, of such Judges.
262
7 In case of Where there is no such majority, the Judges shall state the point of law upon which they
deadlock differ and the case shall, then, be heard upon that point only, by one or more of the other
Judges of the High Court and such point shall be decided according to the opinion of the
majority of the Judges who have heard the case including those who first heard it.
8 Giving effect Where the High Court delivers a judgment in an appeal filed before it under this section,
to the effect shall be given to such judgment by either side on the basis of a certified copy of the
judgment of judgment.
the HC
9 The decision Where the High Court delivers a judgment in an appeal filed before it under this section,
of HC shall be effect shall be given to such judgment by either side on the basis of a certified copy of the
complied by judgment.
both party
118. Appeal to Supreme Court:
1 Appeal to An appeal shall lie to the Supreme Court—
SC
(a) from any order passed by the National Bench or Regional Benches of the Appellate
Tribunal; or
(b) from any judgment or order passed by the High Court in an appeal made under section 117
in any case which, on its own motion or on an application made by or on behalf of the party
aggrieved, immediately after passing of the judgment or order, the High Court certifies to be a
fit one for appeal to the Supreme Court.
2 Provisions The provisions of the Code of Civil Procedure, 1908, relating to appeals to the Supreme Court
Code of shall, so far as may be, apply in the case of appeals under this section as they apply in the case
Civil of appeals from decrees of a High Court.
Procedure,
1908 shall
apply
3 The issues Where the judgment of the High Court is varied or reversed in the appeal, effect shall be given
mentioned to the order of the Supreme Court in the manner provided in section 117in the case of a
in section judgment of the High Court.
87 (2) shall
lie to SC
(by-passing
HC)
 FAQs:
Q. Whether all the orders of the High Court could be challenged before the Supreme Court?
A. No only against the judgment or order, where the High Court certifies to be a fit one for appeal to the
Supreme Court.
119. Sums due to be paid notwithstanding appeal, etc. (VERY IMP):
119 There is no  Notwithstanding that an appeal has been preferred to the High Court or the Supreme
concept of Court, sums due to the Government as a result of
pre-deposits
263
in the case of  an order passed by the National or Regional Benches of the Appellate Tribunal under
appeals to sub-section (1) of section 113 or
HC and SC
 an order passed by the State Bench or Area Benches of the Appellate Tribunal under
subsection (1) of section 113 or
 an order passed by the High Court under section 117, as the case may be, shall be
payable in accordance with the order so passed.
 FAQs:
Q. Whether amounts confirmed in terms of the order to be remitted even though appeal is preferred before
High Court or Supreme Court?
A. Yes. Notwithstanding that an appeal has been preferred to the High Court or the Supreme Court, sums due
to the Government as a result of an order passed by the Tribunal or an order passed by the High Court, as
the case may be, shall be payable in accordance with the order so passed.
[i.e why there is no mention of PRE-Deposits in case of appeals to HC & SC]
120. Appeal not to be filed in certain cases:
1 Instructions The Board may, on the recommendations of the Council, from time to time, issue orders or
for filing instructions or directions fixing such monetary limits, as it may deem fit, for the purposes of
Departmental regulating the filing of appeal or application by the officer of the central tax under the
Appeal provisions of this Chapter.
2 If appeal not Where, in pursuance of the orders or instructions or directions issued under sub-section (1),
filed earlier the officer of the central tax has not filed an appeal or application against any decision or
even then he order passed under the provisions of this Act,
can file appeal
in the similar it shall not preclude such officer of the central tax from filing appeal or application in any
case other case involving the same or similar issues or questions of law.
3 No person Notwithstanding the fact that no appeal or application has been filed by the officer of the
shall contend central tax pursuant to the orders or instructions or directions issued under sub-section (1),
that the GST
officer has no person, being a party in appeal or application shall contend that the officer of the
acquiesced in central tax has acquiesced in the decision on the disputed issue by not filing an appeal or
the decision application.
on the
disputed issue [*Acquiesced:
by not filing to assent tacitly; submit or comply silently or without protest; agree; consent]
an appeal
4 The Appellate The Appellate Tribunal or court hearing such appeal or application shall have regard to the
Tribunal or circumstances under which appeal or application was not filed by the officer of the central
Court shall tax in pursuance of the orders or instructions or directions issued under subsection (1).
have regard to
the
circumstance
264
121. Non-appealable decisions and orders:
121 No appeal if Notwithstanding anything to the contrary in any provisions of this Act, no appeal shall lie
order of GST against any decision taken or order passed by an officer of central tax if such decision
Officer relates taken or order passed relates to any one or more of the following matters, namely:—
(a) Transfer of (a) an order of the Commissioner or other authority empowered to direct transfer of
proceedings proceedings from one officer to another officer; or
(b) Seizure of (b)an order pertaining to the seizure or retention of books of account, register and other
BOA documents; or
(c) (c) an order sanctioning prosecution under this Act; or
Prosecution
(d) Section 80 (d) an order passed under section 80 (i.e. Payment of tax and other amount in
installments.).
265
266
267
Chapter XIX
OFFENCES AND PENALTIES
 The Concept of Penalty:

 The duty of the State is not only to recover all lawful dues from a defaulter but to do justice towards the law
abiding populace. Any offence that does not have a specific penalty prescribed, cannot be let off without
penal consequences.
To ensure tax administration can be held accountable to the tax paying citizenry.
 Whether penalty becomes automatically leviable without any adjudication?

 Penalties cannot be imposed without affording him an adequate opportunity of being heard.
SN Particulars
122 Penalty for certain offences
123 Penalty for failure to furnish information return
124 Fine for failure to furnish statistics
125 General penalty
126 General disciplines related to penalty
127 Power to impose penalty in certain cases
128 Power to waive penalty or fee or both
129 Detention, seizure and release of goods and conveyances in transit
130 Confiscation of goods or conveyances and levy of penalty
131 Confiscation or penalty not to interfere with other punishments
132 Punishment for certain offences
133 Liability of officers and certain other persons
134 Cognizance of offences
135 Presumption of culpable mental state
136 Relevancy of statements under certain circumstances
137 Offences by companies
138 Compounding of offences
122. Penalty for certain offences:
1 Offences Where a taxable person who––
i) Supply without supplies any goods or services or both without issue of any invoice or issues an incorrect
invoice or false invoice with regard to any such supply;
ii) Invoice without issues any invoice or bill without supply of goods or services or both in violation of the
supply provisions of this Act or the rules made thereunder;
iii) Collects and fails collects any amount as tax but fails to pay the same to the Government beyond a period
to pay tax to the of three months from the date on which such payment becomes due;
Govt-Genuine
tax
iv) Collects & fails collects any tax in contravention of the provisions of this Act but fails to pay the same to
to pay tax to the Government beyond a period of three months from the date on which such payment
Govt- by becomes due;
268
contravening
law
v) Fails to deduct fails to deduct the tax in accordance with the provisions of sub-section (1) of section 51,
tax or fails to or deducts an amount which is less than the amount required to be deducted under the
pay to the Govt said sub-section, or where he fails to pay to the Government under sub-section (2)
thereof, the amount deducted as tax;
vi) Fails to collect fails to collect tax in accordance with the provisions of sub-section (1) of section 52, or
tax or fails to collects an amount which is less than the amount required to be collected under the said
pay to the Govt sub-section or where he fails to pay to the Government the amount collected as tax
under sub-section (3) of section 52;
vii) ITC without takes or utilises input tax credit without actual receipt of goods or services or both either
actual receipt fully or partially, in contravention of the provisions of this Act or the rules made
thereunder;
viii) fraudulently fraudulently obtains refund of tax under this Act;

obtains refund
ix) Wrong takes or distributes input tax credit in contravention of section 20, or the rules made
distribution of thereunder;
ITC by ISD
x) False or fake falsifies or substitutes financial records or produces fake accounts or documents or
accounts furnishes any false information or return with an intention to evade payment of tax due
under this Act;
xi) Failing for is liable to be registered under this Act but fails to obtain registration;
registration
xii) False furnishes any false information with regard to registration particulars, either at the time
information for of applying for registration, or subsequently;
registration
xiii) Obstructs any obstructs or prevents any officer in discharge of his duties under this Act;
officer in
discharging their
duties
xiv) Transportation transports any taxable goods without the cover of documents as may be specified in this
without behalf;
documents
xv) Suppressing suppresses his turnover leading to evasion of tax under this Act;
turnover
xvi) Fails to maintain fails to keep, maintain or retain books of account and other documents in accordance
BOA with the provisions of this Act or the rules made thereunder;
xvii Fails to furnish fails to furnish information or documents called for by an officer in accordance with the
) or furnishes provisions of this Act or the rules made thereunder or furnishes false information or
false documents during any proceedings under this Act;
information
xviii Supplies, supplies, transports or stores any goods which he has reasons to believe are liable to
) transport or confiscation under this Act;
stores goods
liable to
confiscation
xix) Issues invoice issues any invoice or document by using the registration number of another registered
with GSTIN of person;
other person
269
xx) Tampers tampers with, or destroys any material evidence or document;

evidence
xxi) Tampers goods disposes off or tampers with any goods that have been detained, seized, or attached
under this Act,
he shall be liable to pay a penalty of ten thousand rupees or an amount equivalent to the tax evaded or the
tax not deducted under section 51 or short deducted or deducted but not paid to the Government or tax
not collected under section 52 or short collected or collected but not paid to the Government or input tax
credit availed of or passed on or distributed irregularly, or the refund claimed fraudulently, whichever is
higher.
2 Short payment Any registered person who supplies any goods or services or both on which any tax has
of tax not been paid or short-paid or erroneously refunded, or where the input tax credit has
been wrongly availed or utilised,—
(a) for any reason, other than the reason of fraud or any wilful misstatement or
suppression of facts to evade tax, shall be liable to a penalty of ten thousand rupees or
ten per cent of the tax due from such person, whichever is higher;
(b) for reason of fraud or any wilful misstatement or suppression of facts to evade tax,
shall be liable to a penalty equal to ten thousand rupees or the tax due from such person,
whichever is higher.
3 Other penalty Any person who––
a) Aids or abets aids or abets any of the offences specified in clauses (i) to (xxi) of subsection (1);
(assistance)
b) Deals with acquires possession of, or in any way concerns himself in transporting, removing,
goods which are depositing, keeping, concealing, supplying, or purchasing or in any other manner deals
liable to with any goods which he knows or has reasons to believe are liable to confiscation under
confiscation this Act or the rules made thereunder;
c) Receiving receives or is in any way concerned with the supply of, or in any other manner deals with
services in any supply of services which he knows or has reasons to believe are in contravention of
contravention of any provisions of this Act or the rules made thereunder;
the Act
d) Summon issued fails to appear before the officer of central tax, when issued with a summon for
but fails to appearance to give evidence or produce a document in an inquiry;
appear
e) fails to issue fails to issue invoice in accordance with the provisions of this Act or the rules made
invoice or fails thereunder or fails to account for an invoice in his books of account,
to account for
an invoice
shall be liable to a penalty which may extend to twenty five thousand rupees.
 FAQs:
 Can there be any liability even if a person is not a taxable person?

 Yes, penalty under sub-section (3) can be levied on any person even if he is not a taxable person
270
123. Penalty for failure to furnish information return:
123 Penalty for If a person who is required to furnish an information return under section 150 fails to do so
failure to within the period specified in the notice issued under sub-section (3) thereof, the proper
furnish officer may direct that such person shall be liable to pay a penalty of one hundred rupees for
information each day of the period during which the failure to furnish such return continues:
return
PROVIDED that the penalty imposed under this section shall not exceed five thousand
rupees.
Rs.5,000
OR Lower
Rs.100 per day
124. Fine for failure to furnish statistics:
124 Fine for If any person required to furnish any information or return under section 151,—
failure to
furnish (a) without reasonable cause fails to furnish such information or return as may be required
statistics under that section, or
(b) wilfully furnishes or causes to furnish any information or return which he knows to be false,
he shall be punishable with a fine which may extend to ten thousand rupees and in case of a
continuing offence to a further fine which may extend to one hundred rupees for each day after
the first day during which the offence continues subject to a maximum limit of twenty five
thousand rupees.
125. General penalty:
125 General Any person, who contravenes any of the provisions of this Act or any rules made thereunder for
Penalty which no penalty is separately provided for in this Act, shall be liable to a penalty which may
extend to twenty five thousand rupees.
Q. Is there any provision prescribing penalty for contraventions of the provisions of the
Act or rules made there under?
A. Section 125 provides for general penalty which may extend to Rs. 25,000/- on any
person, who contravenes any of the provisions of this Act or any rules made there
under. This penalty would be applicable only where no penalty is separately provided for
in this Act.
271
126. General disciplines related to penalty:
1 No substantial No officer under this Act shall impose any penalty for minor breaches of tax regulations or
penalties for procedural requirements and in particular, any omission or mistake in documentation which
minor is easily rectifiable and made without fraudulent intent or gross negligence.
breaches
Explanation – For the purpose of this sub-section,––
"Minor (a) a breach shall be considered a ‘minor breach’ if the amount of tax involved is less than
Breach" and five thousand rupees;
"easily (b) an omission or mistake in documentation shall be considered to be easily rectifiable if the
rectifiable" same is an error apparent on the face of record.
2 Discretionary The penalty imposed under this Act shall depend on the facts and circumstances of each case
power and shall be commensurate with the degree and severity of the breach.
Q. What are the discretionary powers of the officers to waive the penalties?
A. Section 126 (2) prescribes that penalty shall be levied depending on the facts and
circumstances of the case and shall be commensurate with the degree and severity of
the breach.
3 Principle of No penalty shall be imposed on any person without giving him an opportunity of being
Natural heard.
Justice
4 Speaking The officer under this Act shall while imposing penalty in an order for a breach of any law,
order regulation or procedural requirement, specify the nature of the breach and the applicable
law, regulation or procedure under which the amount of penalty for the breach has been
specified.
5 The authority When a person voluntarily discloses to an officer under this Act the circumstances of a
may get breach of the tax law, regulation or procedural requirement prior to the discovery of the
liberal on breach by the officer under this Act, the proper officer may consider this fact as a mitigating
voluntary factor when quantifying a penalty for that person.
disclosure
Q. Where a person voluntarily discloses information whether in such cases the same
could be a factor to reduce the penalties?
A. In terms of Section 87(5) where a person voluntarily discloses to a tax authority the
circumstances of a breach of the tax law, regulation or procedural requirement prior
to the discovery of the breach by the tax authority, the tax authority may consider
this fact as a potential mitigating factor when quantifying a penalty for that person.
6 Section shall The provisions of this section shall not apply in such cases where the penalty specified under
not apply this Act is either a fixed sum or expressed as a fixed percentage.
(IMP)
 Example:
Section 122(2) provides penalty of Rs.10,000 or 10% of the tax short paid, whichever is
HIGHER. In such case, the provisions of this section shall NOT be applicable.
272
127. Power to impose penalty in certain cases:
127 Penalty in Where the proper officer is of the view that a person is liable to a penalty and the same is not
Certain cases covered under any proceedings under section 62 or section 63 or section 64 or section 73 or
section 74 or section 129 or section 130,
he may issue an order levying such penalty after giving a reasonable opportunity of being
heard to such person.
Section 62 Assessment of non-filers of returns

Section 63 Assessment of unregistered persons
Section 64 Summary assessment in certain special cases
Section 73 Determination of tax not paid or short paid or erroneously refunded or
Section 74 input tax credit wrongly availed
Section 129 Detention, seizure and release of goods and conveyances in transit
Section 130 Confiscation of goods or conveyances and levy of penalty
128. Power to waive penalty or fee or both:
128 Power to The Government may, by notification, waive in part or full, any penalty referred to in section
waive 122 or section 123 or section 125 or any late fee referred to in section 47 for such class of
penalty or taxpayers and under such mitigating circumstances as may be specified therein on the
fee or both recommendations of the Council.
129. Detention, seizure and release of goods and conveyances in transit:
Q. What is the distinction in law between ‘Seizure’ and ‘Detention’?

A. Denial of access to the owner of the property or the person who possesses the property at a particular point
of time by a legal order/notice is called detention. Seizure is taking over of actual possession of the goods by
the department.
Detention order is issued when it is suspected that the goods are liable to confiscation.
Seizure can be made only on the reasonable belief which is arrived at after inquiry/ investigation that the
goods are liable to confiscation.
1 When the Notwithstanding anything contained in this Act, where any person transports any goods or
goods can be stores any goods while they are in transit in contravention of the provisions of this Act or
detained or the rules made thereunder, all such goods and conveyance used as a means of transport for
seized? carrying the said goods and documents relating to such goods and conveyance shall be liable
to detention or seizure and after detention or seizure, shall be released,––
(a) Tax + (a) on payment of the applicable tax and penalty equal to one hundred per cent of the tax
Penalty payable on such goods and, in case of exempted goods, on payment of an amount equal to
(100% of tax) two per cent of the value of goods or twenty five thousand rupees, whichever is less, where
the owner of the goods comes forward for payment of such tax and penalty;
273
(b) Tax + (b) on payment of the applicable tax and penalty equal to the fifty per cent. of the value of
Penalty (50% the goods reduced by the tax amount paid thereon and, in case of exempted goods, on
of tax- tax payment of an amount equal to five per cent. of the value of goods or twenty five thousand
paid) rupees, whichever is less, where the owner of the goods does not come forward for
payment of such tax and penalty;
(c) upon furnishing a security equivalent to the amount payable under clause (a) or clause
(b) in such form and manner as may be prescribed:
PROVIDED that no such goods or conveyance shall be detained or seized without serving an
order of detention or seizure on the person transporting the goods.
2 Provisional The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for detention
release of and seizure of goods and conveyances.
goods on
furnishing of Section 67(6):
Bond and “The goods so seized under sub-section (2) shall be released, on a provisional basis, upon
Security execution of a bond and furnishing of a security, in such manner and of such quantum,
respectively, as may be prescribed or on payment of applicable tax, interest and penalty
payable, as the case may be.”
3 Issue of SCN The proper officer detaining or seizing goods or conveyances shall issue a notice specifying
and Demand the tax and penalty payable and thereafter, pass an order for payment of tax and penalty
Order under clause (a) or clause (b) or clause (c).
4 Principle of No tax, interest or penalty shall be determined under sub-section (3) without giving the
Natural person concerned an opportunity of being heard.
Justice
5 Pay and get On payment of amount referred in sub-section (1), all proceedings in respect of the notice
over with specified in sub-section (3) shall be deemed to be concluded.
proceedings
6 Fails to pay Where the person transporting any goods or the owner of the goods fails to pay the amount
within 7 of tax and penalty as provided in sub-section (1) within seven days of such detention or
days, the seizure, further proceedings shall be initiated in accordance with the provisions of section
proceedings 130:
shall be
initiated in
accordance
with Sec 130
In some PROVIDED that where the detained or seized goods are perishable or hazardous in nature or
cases…the are likely to depreciate in value with passage of time, the said period of seven days may be
period of 7 reduced by the proper officer.
days can be
reduced by
the PO
274
130. Confiscation of goods or conveyances and levy of penalty:
1 Confiscation Notwithstanding anything contained in this Act, if any person—
of goods
(i) supplies or receives any goods in contravention of any of the provisions of this Act or the
rules made thereunder with intent to evade payment of tax; or
(ii) does not account for any goods on which he is liable to pay tax under this Act; or
(iii) supplies any goods liable to tax under this Act without having applied for registration; or
(iv) contravenes any of the provisions of this Actor the rules made thereunder with intent to
evade payment of tax; or
(v) uses any conveyance as a means of transport for carriage of goods in contravention of the
provisions of this Act or the rules made thereunder unless the owner of the conveyance
proves that it was so used without the knowledge or connivance of the owner himself, his
agent, if any, and the person in charge of the conveyance,
then, all such goods or conveyances shall be liable to confiscation and the person shall be
liable to penalty under section 122.
2 Fine in lieu of Whenever confiscation of any goods or conveyance is authorised by this Act, the officer
confiscation adjudging it shall give to the owner of the goods an option to pay in lieu of confiscation, such
MP- XXX fine as the said officer thinks fit:
Tax- (XXX)
FINE- XXX PROVIDED that such fine leviable shall not exceed the market value of the goods confiscated,
This is the less the tax chargeable thereon:
maximum
fine that can  Market Value:
be imposed As per section 2(73), “Market value” shall mean the full amount which a recipient of
a supply is required to pay in order to obtain the goods or services or both of like
kind and quality at or about the same time and at the same commercial level where
the recipient and the supplier are not related;
Therefore, Say if 10 tons of Product X is confiscated, the market value of the

consignment of 10 tons shall be considered. The Officers shall not take the price of
1 kg and multiply by 10,000 to arrive at the market value of 10 tons.
PROVIDED FURTHER that the aggregate of such fine and penalty leviable shall not be less
than the amount of penalty leviable under sub-section (1) of section 129:
>>
Conveyance PROVIDED also that where any such conveyance is used for the carriage of the goods or
used for passengers for hire, the owner of the conveyance shall be given an option to pay in lieu of the
carriage of confiscation of the conveyance a fine equal to the tax payable on the goods being
the Goods transported thereon.
&/or
passengers Q. Is option to pay fine in lieu of confiscation of goods is to be granted in each case or
at the discretion of the officer?
A. The option to pay fine in lieu of confiscation is not at the discretion of proper officer
but it is an option provided by law.
Q. Can the option to pay fine in lieu of confiscation be exercised anytime?

A. The option to pay fine in lieu of confiscation shall be exercised within 3 months of
confiscation.
275
3 Along with Where any fine in lieu of confiscation of goods or conveyance is imposed under subsection
redemption (2), the owner of such goods or conveyance or the person referred to in subsection (1), shall,
fine... tax & in addition, be liable to any tax, penalty and charges payable in respect of such goods or
charges will conveyance.
remain
payable
4 Principle of No order for confiscation of goods or conveyance or for imposition of penalty shall be issued
Natural without giving the person an opportunity of being heard.
Justice
5 GOVT Where any goods or conveyance are confiscated under this Act, the title of such goods or
becomes the conveyance shall thereupon vest in the Government.
owner of
confiscated
goods
6 Assistance of The proper officer adjudging confiscation shall take and hold possession of the things
police confiscated and every officer of Police, on the requisition of such proper officer, shall assist
him in taking and holding such possession.
7 Disposing off The proper officer may, after satisfying himself that the confiscated goods or conveyance are
of not required in any other proceedings under this Act and after giving reasonable time not
confiscated exceeding three months to pay fine in lieu of confiscation,
goods
 Dispose of such goods or conveyance and deposit the sale proceeds thereof with the
Government.
131. Confiscation or penalty not to interfere with other punishments:
131 Other Without prejudice to the provisions contained in the Code of Criminal Procedure, 1973, no
provisions confiscation made or penalty imposed under the provisions of this Act or the rules made
will remain thereunder
applicable
 shall prevent the infliction of any other punishment to which the person affected thereby
is liable under the provisions of this Act or under any other law for the time being in force.
132. Punishment for certain offences:
1 Prosecution Whoever commits any of the following offences, namely:—
a) Supply Supplies any goods or services or both without issue of any invoice, in violation of the
without provisions of this Act or the rules made thereunder, with the intention to evade tax;
invoice
b) Invoice issues any invoice or bill without supply of goods or services or both in violation of the
without provisions of this Act, or the rules made thereunder leading to wrongful availment or
supply utilisation of input tax credit or refund of tax;
c) ITC based on avails input tax credit using such invoice or bill referred to in clause (b);
invoice with
no supply
d) Collects & fails collects any amount as tax but fails to pay the same to the Government beyond a period of
to pay tax - three months from the date on which such payment becomes due;
Genuine
276
e) Evades tax, evades tax, fraudulently avails input tax credit or fraudulently obtains refund and where
fraudulently such offence is not covered under clauses (a) to (d);
avails ITC or
obtains refund
f) False or fake falsifies or substitutes financial records or produces fake accounts or documents or furnishes
accounts any false information with an intention to evade payment of tax due under this Act;
g) Obstructs obstructs or prevents any officer in the discharge of his duties under this Act;
officer
h) Deals with acquires possession of, or in any way concerns himself in transporting, removing, depositing,
goods liable to keeping, concealing, supplying, or purchasing or in any other manner deals with, any goods
confiscation which he knows or has reasons to believe are liable to confiscation under this Act or the
rules made thereunder;
i) Receiving receives or is in any way concerned with the supply of, or in any other manner deals with any
services in supply of services which he knows or has reasons to believe are in contravention of any
contravention provisions of this Act or the rules made thereunder;
of the Act
j) Tampers tampers with or destroys any material evidence or documents;

evidences
k) Fails to supply fails to supply any information which he is required to supply under this Act or the rules
the made thereunder or (unless with a reasonable belief, the burden of proving which shall be
information or upon him, that the information supplied by him is true) supplies false information; or
furnishes false
information
l) Even an attempts to commit, or abets the commission of any of the offences mentioned in clauses (a)
attempt and to (k) of this section,
the one who
abets
shall be punishable––
i) Evasion in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or
>Rs.500 lakhs utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees, with
imprisonment for a term which may extend to five years and with fine;
ii) Evasion in cases where the amount of tax evaded or the amount of input tax credit wrongly availed or
Exceeds utilised or the amount of refund wrongly taken exceeds two hundred lakh rupees but does
Rs.200 lakhs not exceed five hundred lakh rupees, with imprisonment for a term which may extend to
upto Rs.500 three years and with fine;
lakhs
iii) Exceeds in the case of any other offence where the amount of tax evaded or the amount of input tax
Rs.100 lakhs credit wrongly availed or utilised or the amount of refund wrongly taken exceeds one
upto Rs.200 hundred lakh rupees but does not exceed two hundred lakh rupees, with imprisonment for
lakhs a term which may extend to one year and with fine;
iv) Clause (f), (g) in cases where he commits or abets the commission of an offence specified in clause (f) or
or (j) clause (g) or clause (j), he shall be punishable with imprisonment for a term which may
extend to six months or with fine or with both.
Clause (f) falsifies or substitutes financial records or produces fake accounts or

documents or furnishes any false information with an intention to evade
payment of tax due under this Act;
277
Clause (g) obstructs or prevents any officer in the discharge of his duties under this
Act;
Clause (j) tampers with or destroys any material evidence or documents;
2 Subsequent Where any person convicted of an offence under this section is again convicted of an offence
offences under this section, then, he shall be punishable for the second and for every subsequent
offence with imprisonment for a term which may extend to five years and with fine.
(Very imp-In this case apparently there is no consideration on value of the offences but this
also works when the value of the offence exceeds Rs.100 lakhs)
3 Minimum The imprisonment referred to in clauses (i), (ii) and (iii) of sub-section (1) and subsection (2)
imprisonment shall, in the absence of special and adequate reasons to the contrary to be recorded in the
of 6 months in judgment of the Court, be for a term not less than six months.
the absence of
SAR (Very imp- In the absence of special & adequate reasons-minimum imprisonment of 6
months. This is for both first and the second time offences)
4 Non- Notwithstanding anything contained in the Code of Criminal Procedure, 1973, all offences
cognizable under this Act, except the offences referred to in sub-section (5) shall be non cognizable and
and Bailable bailable.
Q. What is a cognizable offence?

A. Generally, cognizable offence means serious category of offences in respect of
which a police officer has the authority to make an arrest without a warrant and to
start an investigation with or without the permission of a court. However, GST
being a special legislation, only the officers, duly empowered under the Act can act
as above.
5 Cognizable The offences specified in clause (a) or clause (b) or clause (c) or clause (d) of subsection (1)
and non- and punishable under clause (i) of that sub-section shall be cognizable and non-bailable.
bailable
Q. What is a non-cognizable offence?
A. Non-cognizable offence means relatively less serious offences in respect of which a
police officer does not have the authority to make an arrest without a warrant and
an investigation cannot be initiated without a court order, except as may be
authorized under special legislation.
6 Prosecution A person shall not be prosecuted for any offence under this section except with the previous
shall be sanction of the Commissioner.
sanctioned by
authority
Explanation Explanation - For the purposes of this section, the term “tax” shall include the amount of tax
evaded or the amount of input tax credit wrongly availed or utilised or refund wrongly taken
under the provisions of
 this Act,
 the State Goods and Services Tax Act,
 the Integrated Goods and Services Tax Act or
 the Union Territory Goods and Services Tax Act and
 cess levied under the Goods and Services Tax (Compensation to States) Act.
278
SN Offence involving Punishment (Imprisonment In case of repetition of

extending upto) offence
1 Tax evaded exceeding Rs.500 lakh 5 years and fine
2 Tax evaded between Rs.200 lakh and 3 years and fine
Rs.500 lakh 5 years and fine
3 Tax evaded between Rs.100 lakh and 1 years and fine
Rs.200 lakh
Case Punishment Whether offence is

cognizable and non
bailable
(i) In cases where – Imprisonment for a term, Cognizable and non
 the amount of tax evaded, or which may extend to 5 years bailable for offences
and with fine. (However, such under section 132(1)
 the amount of input tax credit wrongly
punishment shall not be for (a)/(b)/(c)/(d).
availed or utilised, or
less than 6 months unless For other offences –
 the amount of refund wrongly taken special and adequate reasons Non cognizable and
exceeds Rs. 500 lakh to the contrary are recorded bailable
in the judgment of the court.)
(ii) In cases where – Imprisonment for a term, Non cognizable and
 the amount of tax evaded, or which may extend to 3 years bailable
and with fine. (However, such
punishment shall not be for
less than 6 months unless
 the amount of refund wrongly taken special and adequate reasons
exceeds Rs. 200 lakhs but does not to the contrary are recorded
exceed Rs. 500 lakh in the judgment of the court.)
(iii) In the case of any other offence where – Imprisonment for a term, Non cognizable and
 the amount of tax evaded, or which may extend to 1 year bailable
and with fine. (However, such
punishment shall not be for
less than 6 months unless
 the amount of refund wrongly taken special and adequate reasons
exceeds Rs. 100 lakh but does not to the contrary are recorded
exceed Rs. 200 lakh in the judgment of the court.)
(iv) In cases where he commits or abets the Imprisonment for a term Non cognizable and
commission of an offence specified in clause which may extend to 6 bailable
(f) or clause (g) or clause (j) months or with fine or with
both.
279
133. Liability of officers and certain other persons:
1 Consequences Where any person
of disclosing  engaged in connection with the collection of statistics under section 151 or
information  compilation or computerisation thereof or
acquired in the  if any officer of central tax having access to information specified under sub-
course of their section (1) of section 150, or
execution of  if any person engaged in connection with the provision of service on the common
duties portal or
 the agent of common portal,
WILFULLY DISCLOSES any information or the contents of any return furnished under this
Act or rules made thereunder otherwise than in execution of his duties under the said
sections or for the purposes of prosecution for an offence under this Act or under any other
Act for the time being in force, he shall be punishable with imprisonment for a term which
may extend to six months or with fine which may extend to twenty-five thousand rupees,
or with both.
2 Exemptions to Any person—

prosecution (a) who is a Government servant shall not be prosecuted for any offence under this section
under this except with the previous sanction of the GOVERNMENT;
section to
certain persons (b) who is not a Government servant shall not be prosecuted for any offence under this
section except with the previous sanction of the COMMISSIONER.
134. Cognizance of offences:
134 Cognizance No court shall take cognizance of any offence punishable under this Act or the rules made
of offence thereunder except with the previous sanction of the Commissioner, and no court inferior to
by the Court that of a Magistrate of the First Class, shall try any such offence.
135. Presumption of culpable mental state:
135 Presuming In any prosecution for an offence under this Act which requires a culpable mental state on the
the culpable part of the accused, the court shall presume the existence of such mental state but it shall be
mental a defence for the accused to prove the fact that he had no such mental state with respect to
state the act charged as an offence in that prosecution.
Explanation - For the purposes of this section,––

(i) the expression “culpable mental state” includes intention, motive, knowledge of a fact,
and belief in, or reason to believe, a fact;
(ii) a fact is said to be proved only when the court believes it to exist beyond reasonable
doubt and not merely when its existence is established by a preponderance of probability.
280
136. Relevancy of statements under certain circumstances:
136 Statement A statement made and signed by a person on appearance in response to any summons issued
shall be under section 70 during the course of any inquiry or proceedings under this Act shall be
relevant for relevant, for the purpose of proving, in any prosecution for an offence under this Act, the
the purpose truth of the facts which it contains,––
of proving
the truth of
the facts it (a) when the person who made the statement is dead or cannot be found, or is incapable of
contains giving evidence, or is kept out of the way by the adverse party, or whose presence cannot be
obtained without an amount of delay or expense which, under the circumstances of the case,
the court considers unreasonable; or
(b) when the person who made the statement is examined as a witness in the case before the
court and the court is of the opinion that, having regard to the circumstances of the case, the
statement should be admitted in evidence in the interest of justice.
137. Offences by Companies:
1 Person  Where an offence committed by a person under this Act is a company,
responsible
for the  every person who, at the time the offence was committed was in charge of, and was
conduct of responsible to, 5 the company for the conduct of business of the company,
the business
+ the  as well as the company, shall be deemed to be guilty of the offence and shall be liable to
Company be proceeded against and punished accordingly.
2 Anyone Notwithstanding anything contained in sub-section (1), where an offence under this Act has
(officer) who been committed by a company and it is proved that the offence has been 10 committed with
is involved in the consent or connivance of, or is attributable to any negligence on the part of, any
the offence director, manager, secretary or other officer of the company, such director, manager,
by virtue of secretary or other officer shall also be deemed to be guilty of that offence and shall be liable
his consent to be proceeded against and punished accordingly.
or negligence
3 Offence is  Where an offence under this Act has been committed by a taxable person being a 15
committed partnership firm or a Limited Liability Partnership or a Hindu undivided family or a
by Firm, HUF, trust,
Trust
 the partner or karta or managing trustee shall be deemed to be guilty of that offence
and shall be liable to be proceeded against and punished accordingly and
 the provisions of sub-section (2) shall, mutatis mutandis, apply to such persons.
Q. In the case of offences by LLP, HUF and Trust, who else can be punished?
A. If the offence is committed by a Partnership Firm, LLP, HUF or Trust, then such
Partner, Karta of Family and Managing Trustee of the Trust will be deemed to be
guilty of offence.
4 If bonafide- Nothing contained in this section shall render any such person liable to any punishment
281
No provided in this Act, if he proves that the offence was committed without his knowledge or
punishment that he had exercised all due diligence to prevent the commission of such offence.
Explanation – For the purposes of this section,––
(i) “Company” means a body corporate and includes a firm or other association of
individuals; and
(ii) “Director”, in relation to a firm, means a partner in the firm.
138. Compounding of offences:
Background Compounding of offence means payment of monetary compensation instead of undergoing

prosecution.
“Compounding an offence on the request of the defaulter party is neither an agreement nor a
contract. It is a sort of compromise between the two parties viz. defaulter and the department.”
1 Compounding Any offence under this Act may, either before or after the institution of prosecution, be
either before compounded by the Commissioner on payment, by the person accused of the offence, to
or after the the Central Government or the State Government, as the case be, of such compounding
institution of amount in such manner as may be prescribed:
the
proceedings PROVIDED that nothing contained in this section shall apply to—
of prosecution
(a) a person who has been allowed to compound once in respect of any of the
offences specified in clauses (a) to (f) of sub-section (1) of section 132 and the
offences specified in clause (l) which are relatable to offences specified in clauses (a)
to (f) of the said sub-section;
(b) a person who has been allowed to compound once in respect of any offence,
other than those in clause (a),under this Act or under the provisions of any SGST Act
or the UTGST Act or the IGST Act in respect of supplies of value exceeding one crore
rupees;
(c) a person who has been accused of committing an offence under this Act which is
also an offence under any other law for the time being in force;
(d) a person who has been convicted for an offence under this Act by a court;
(e) a person who has been accused of committing an offence specified in clause (g)
or clause (j) or clause (k) of sub-section (1) of section 132; and
(f) any other class of persons or offences as may be prescribed:
PROVIDED further that any compounding allowed under the provisions of this section shall
not affect the proceedings, if any, instituted under any other law:
PROVIDED also that compounding shall be allowed only after making payment of tax,
282
interest and penalty involved in such offences.
2 Amount for The amount for compounding of offences under this section shall be such as may be
compounding prescribed, subject to
the minimum amount not being less than ten thousand rupees or fifty per cent of the tax
involved, whichever is higher, and
the maximum amount not being less than thirty thousand rupees or one hundred and fifty
per cent of the tax, whichever is higher.
NU Minimum Rs.10,000 or 50% of the tax involved====>>>Higher

TSH amount
ELL Maximum Rs.30,000 or 150% of the tax involved===>>>Higher
amount
3 Abatement On payment of such compounding amount as may be determined by the Commissioner, no
from further further proceedings shall be initiated under this Act against the accused person in respect
proceedings & of the same offence and any criminal proceedings, if already initiated in respect of the said
proceedings offence, shall stand abated.
already
initiated
283
284
 Concept of Place of Business (CONTD):

ABC Ltd
Delhi [REG -1] Uttar Pradesh

(Manufacture of RG)
Lucknow [REG -2] Kanpur [REG -3]

Plastic toys)
Mr.X, Job-worker
285
Chapter XXIA
JOB WORKER
19. Taking input tax credit in respect of inputs and capital goods sent for job work:
1 Sending to a The principal shall, subject to such conditions and restrictions as may be prescribed, be allowed
J/w input tax credit on inputs sent to a job-worker for job-work.
2 Inputs sent Notwithstanding anything contained in clause (b) of sub-section (2) of section 16, the principal
DIRECTLY to shall be entitled to take credit of input tax on inputs even if the inputs are directly sent to a job
J/W- ITC worker for job-work without being first brought to his place of business.
allowed
3 If not Where the inputs sent for job work are not received back by the principal after completion of job-
received work or otherwise or are not supplied from the place of business of the job worker in accordance
back or with clause (a) or clause (b) of sub-section (1) of section 143 within one year of being sent out,
supplied
within 1 year  it shall be deemed that such inputs had been supplied by the principal to the job-worker on
deemed to the day when the said inputs were sent out:
be supplied
to J/W Provided that where the inputs are sent directly to a job worker, the period of one year shall be
(V.IMP) counted from the date of receipt of inputs by the job worker.
4 Principal The principal shall, subject to such conditions and restrictions as may be prescribed, be allowed
eligible for input tax credit on capital goods sent to a job worker for job work.
ITC on CG
sent to J/w
5 CG sent Notwithstanding anything contained in clause (b) of sub-section (2) of section 16, the principal
DIRECTLY to shall be entitled to take credit of input tax on capital goods even if the capital goods are directly
a J/w – ITC sent to a job worker for job-work without being first brought to his place of business.
allowed
6 If not Where the capital goods sent for job work are not received back by the principal within a period of
received three years of being sent out, it shall be deemed that such capital goods had been supplied by the
back or principal to the job worker on the day when the said capital goods were sent out:
supplied
within 3 yrs PROVIDED that where the capital goods are sent directly to a job worker, the period of three years
deemed to shall be counted from the date of receipt of capital goods by the job worker.
be supplied
to J/W
(V.IMP)
7 Sub section Nothing contained in sub-section (3) or sub-section (6) shall apply to moulds and dies, jigs and
(3) & (6) fixtures, or tools sent out to a job worker for job work.
shall not
apply to Explanation – For the purpose of this section, “principal” means the person referred to in section
moulds and 143.
dies, etc.
286
 Concept of Place of Business (CONTD):

ABC Ltd
Delhi [REG -1] Uttar Pradesh

(Manufacture of RG)
Lucknow [REG -2] Kanpur [REG -3]

Plastic toys)
Mr.X, Job-worker
287
143. Job work procedure:
1 Sending A registered person (hereafter in this section referred to as the “principal”) may under
goods to Job intimation [intimation to the Jurisdictional Officer under the cover of a Delivery Challan] and
worker subject to such conditions as may be prescribed, send any inputs or capital goods, without
without payment of tax, to a job worker for job-work and from there subsequently send to another job
payment of worker and likewise, and shall,––
taxes
(a) bring back inputs, after completion of job work or otherwise, or capital goods, other than
moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of
their being sent out, to ANY of his place of business [located in the same state], without
payment of tax;
(b) supply such inputs, after completion of job work or otherwise, or capital goods, other than
moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of
their being sent out from the place of business of a job worker on payment of tax within India,
or with or without payment of tax for export, as the case may be:
PROVIDED that the principal shall not supply the goods from the place of business of a job
worker in accordance with the provisions of this clause unless the said principal declares the
place of business of the job-worker as his ADDITIONAL PLACE OF BUSINESS* [if located in the
same state] except in a case—
(i) where the job worker is registered under section 25; or
(ii) where the principal is engaged in the supply of such goods as may be notified by the
Commissioner.
2 Who is The responsibility for keeping proper accounts for the inputs or capital goods shall lie with the
responsible? principal.
The
PRINCIPAL  Understanding:
Principal is responsible for payment of taxes even if the supply is made from the Job worker
premises.
3 If not Where the inputs sent for job work are not received back by the principal after completion of
received back job work or otherwise in accordance with the provisions of clause (a) of sub-section (1) or are
or supplied not supplied from the place of business of the job worker in accordance with the provisions of
therefrom clause (b) of sub-section (1) within a period of one year of their being sent out,
within 1 year-
Deemed that  it shall be deemed that such inputs had been supplied by the principal to the job-worker on
inputs were the day when the said inputs were sent out.
supplied
4 If not Where the capital goods, other than moulds and dies, jigs and fixtures, or tools, sent for job
received back work are not received back by the principal in accordance with the provisions of clause (a) of
or supplied sub-section (1) or are not supplied from the place of business of the job worker in accordance
therefrom with the provisions of clause (b) of sub-section (1) within a period of three years of their being
within 3 sent out,
years-
Deemed that  it shall be deemed that such capital goods had been supplied by the principal to the job-
CG were worker on the day when the said capital goods were sent out.
288
supplied
5 Treatment of Notwithstanding anything contained in sub-sections (1) and (2), any waste and scrap generated
waste and during the job work may be supplied by the
scrap
 job worker directly from his place of business on payment of tax, if such job worker is
registered, or
 by the principal, if the job worker is not registered.
Explanation.–For the purposes of job work, input includes intermediate goods arising from any
treatment or process carried out on the inputs by the principal or the job worker.
 Rule 45: Conditions and restrictions in respect of inputs and capital goods sent to the job worker:
SRN Description
1 The inputs, semi-finished goods or capital goods shall be sent to the job worker under the cover of a challan issued
by the principal, including where such goods are sent directly to a job-worker.
2 The challan issued by the principal to the job worker shall contain the details specified in rule 55.
3 The details of challans in respect of goods dispatched to a job worker or received from a job worker or sent from
one job worker to another during a quarter shall be included in FORM GST ITC-04 furnished for that period on or
before the twenty-fifth day of the month succeeding the said quarter.
4 Where the inputs or capital goods are not returned to the principal within the time stipulated in section 143, it
shall be deemed that such inputs or capital goods had been supplied by the principal to the job worker on the
day when the said inputs or capital goods were sent out and the said supply shall be declared in FORM GSTR-1 and
the principal shall be liable to pay the tax along with applicable interest.
Explanation: For the purposes of this Chapter,-

1) the expressions “capital goods” shall include “plant and machinery” as defined in the Explanation to section
17;
2) for determining the value of an exempt supply as referred to in sub-section (3) of section 17;
a) the value of land and building shall be taken as the same as adopted for the purpose of paying stamp duty;
and
b) the value of security shall be taken as one per cent. of the sale value of such security.
289
 Understanding #1*:
 As per Section 25 of the Act, the taxable person is required to obtain registration for each state separately.
The registration certificate will mention the principal POB. In addition to this, all establishments of a taxable
person in a STATE are required to be declared as an Additional POB.
 These establishments which are declared as an additional POB should be located in the same state. Thus, if a
person has a principal POB in Lucknow, UP, he can declare his establishment in Kanpur, UP as an additional
POB.
 But he cannot declare establishment located in Delhi as an additional POB for registration obtained in Uttar
Pradesh.
 In view of the above, it appears that the Job worker will be able to dispatch the inputs after processing to any
place of business located in the SAME STATE in which principal POB is located.
 Understanding #2:
th th
 Say X person has supplied inputs to Job worker Y on 25 July 2018. These inputs are not received back by 24
July 2019 by Mr.X after processing. As per this sub-section, principal will be required to pay the tax on supply
th th
of inputs. The TOS is 25 July 2018. If the tax liability arises on 24 July 2019 he will have to pay tax with
interest of one year.
th
 Say a principal X has sent inputs to the Job worker Y from the stock held by him on 25 July 2018. This sub
section provides that the Job worker shall either return the inputs after processing to any of his POB or shall
clear the inputs on payment of tax in India or export the goods outside India without payment of tax within
th
one year. In this case, one year expires on 24 July 2019. Hence, the activities by the Job worker must be
th
completed by the 24 July 2019.
 In case where the goods are sent directly by the Supplier to the Job worker, the period of one year will be
counted from the date of receipt of inputs by the Job worker and not from the date of dispatch of goods by
th
the Supplier. Assuming that the goods are cleared by the supplier on 25 July 2018 and received by the Job-
th th th
worker on 30 July 2018. The period of one year shall be counted by from 30 July 2018 not from 25 July
th
2018. However, if the goods are cleared from the stock of the principal on 25 July 2018 and received by the
th th th
Job- worker on 30 July 2018, the period will be counted from 25 July 2018 not from 30 July 2018. On
similar basis, the period of 3 years will be counted for Capital Goods [Refer sub-section (4)].
 Illustration 1–
Ashish Ltd. sends the goods/inputs to MM & Co. for further processing on 30-07-2017. The value of goods sent for
Job work is Rs. 2,00,000. What are the tax implications, in following cases, if GST @ 18% is levied:
(i) MM & Co. sends the processed goods back to Ashish Ltd on 30-10-2017
(ii) MM & Co. sends the processed goods back to Ashish Ltd on 30-10-2018
Make suitable assumptions as required.
Ans: MM & Co. sends the processed goods back to Ashish Ltd. on 30-10-2017 : As per section 143 of the Act,
Principal can remove the goods without payment of tax and take input tax credit provided inputs sent for job work
are returned back within one year of removal. Otherwise, it shall be treated as supply from principal to Job worker
as on 30-07-2017 and subject to tax along with interest.
290
In the present case, as the inputs are received back on 30-10-2017 i.e. before completion of one year, and hence
no tax is payable.
MM & Co. sends the processed goods back to Ashish Ltd. on 30-10-2018 : In the present case, the goods are
received after the period of one year and hence, Ashish Ltd. needs to pay the tax along with the interest on the
supply made by him to MM & Co. Hence, Ashish Ltd. need to pay Rs. 18,000 (CGST) and Rs. 18,000 (SGST) along
with specified interest on completion of one year.
 Illustration 2 –
Ashish Ltd. sends the machinery to MM & Co. for fixing of some technical issue and maintenance on 15-07-2017.
The value of goods sent to MM & Co. is Rs. 2,00,000/-. What are the tax implications (GST @ 18%), in the following
cases:
(i) MM & Co. sends the machinery back to Ashish Ltd. on 30-12-2018.
(ii) MM & Co. sends the machinery back to Ashish Ltd. on 30-09-2020
Make suitable assumptions as required.
Ans: In the given example the implications are as follows:
 MM & Co. sends the machinery back to Ashish Ltd on 30-12-2018 : As per section 143 of the Act, Principal
can remove the goods without payment of tax and take input tax credit provided capital goods sent for job
work are returned back within three years of removal. Otherwise, it shall be treated as supply from principal
to Job worker as on 15-07-2017 and subject to tax along with interest.
In the present case, as the machinery is received back on 30-12-2018 i.e. before completion of three years,
and hence no tax is payable.
 MM & Co. sends the machinery back to Ashish Ltd on 30-09-2020 : In present case, the machinery is received
after the period of three years and hence, Q Ltd. needs to pay tax taken along with the interest. Q Ltd. needs
to pay Rs. 18,000 (CGST) and Rs. 18,000 (SGST) along with specified interest on completion of 3 years.
 FAQs:
SN
Q. Whether the goods of principal directly supplied from the job-worker’s premises will be included in the
aggregate turnover of the Job Worker?
A. No. Since the responsibility of accountability of inputs and/or capital goods lies with principal, it will be
included in the aggregate turnover of the principal as enumerated in section 143 of the CGST Act, 2017.
Q. Any waste and scrap generated during the job work may be supplied by the job worker directly from his
place of business on payment of tax, if such job worker is registered. This will be included in the Aggregate
Turnover of Principal or Job worker?
A. This will be included in the Aggregate Turnover of Job Worker.
Q. Whether time limit of one year or three years in case of goods sent for job work is applicable to moulds and
dies, jigs and fixtures or tools sent out to job worker.
A. The time limit of one year or three years is not applicable to moulds and dies, jigs and fixtures or tools sent out
to job worker.
291
Q) Mr. X has sent his goods to Mr. Y on job-work on 07-05-2018. From when it will be considered as deemed
supply if not received back within one year?
a) 06-05-19
b) 07-05-18
c) 03-11-19
d) Not Taxable
292

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CA.

 Reverse Charge Mechanism (RCM):

ii) Reverse Charge Mechanism u/s 9(3):

ii) Reverse Charge Mechanism u/s 9(4):

 Why Reverse Charge??

 Difference between Normal charge & Reverse Charge:

SN Particulars Normal Charge Reverse Charge

3) Threshold Available Not Available

Means by using: Means by using:

REVERSE CHARGE u/s 9(3)

S. Tariff item, Description of Supplier of Recipient of supply

(1) (2) (3) (4) (5)

4A 5201 Raw cotton Agriculturist Any registered person

5. - Supply of lottery. State Government, Lottery distributor or selling agent.

REVERSE CHARGE u/s 9(3)

SN Category of Supply of Services Supplier of Recipient of Service

2 Services supplied An  Any business entity

3 Services supplied An arbitral  Any business entity

4 Services provided Any person  Any body corporate or partnership

5 Services supplied CG, SG,  Any business entity

(i) services by the Department of Posts by

(ii) services in relation to an aircraft or a

(iii) transport of goods or passengers.

6 Services supplied A director  The company or a body corporate

7 Services supplied An  Any person carrying on insurance

9 Supply of services Author or  Publisher, music company, producer

10 Supply of services Members  Reserve Bank of India [RBI].

SN Category of Supply of Services Supplier of Recipient of Service

Goods transportation by ROAD

T/O upto 20/ 10

Individual Advocate Business

Others GST (RCM)

T/O upto 20/

T/O upto 20/

 Government and Local Authority:

Speed Post, Agency Others

GOVT Other than GOVT

In relation to Aircraft Transport of Goods or Other services

GST (NCM) GST

GST (NCM) GST (RCM)

BE =< 20 lakhs/ 10 BE > 20 lakhs/ 10

GST (RCM) GST (RCM)

Whole Time Director Part Time Director

Out of GST, Employer- Under GST, liability to

Transfer or permitting the use

Notified services u/s 9(5)

3) Services by way of house-keeping, such as plumbing, carpentering etc,

Motor cycle Motor cycle means a two-wheeled motor vehicle.

Cab services Cab services

Payment made = 100 Value = 100

CGST = 1.8 SGST = 1.8

Cab services Cab services

Payment made = 100 Value = 100

CGST = 1.8 SGST = 1.8

Cab services Cab services

Payment made = 100 Value = 100

CGST = 1.8 SGST = 1.8

 Goods exempt from tax [N/N 02/2017]:

 Services exempt from tax [N/N 12/2017 as amended]:

Renting of Ambulance GST

Treatment of Biomedical waste

4) Services by a veterinary clinic in relation to health care of animals or birds.

5) Services by an entity registered under section 12AA of the Income-tax