GOODS & SERVICES TAX
LEVY & SCOPE OF SUPPLY
GST Conclave III
Hosted by:
Kolkata Branch of EIRC of ICAI
th
17 June, 2017
GOODS AND SERVICES TAX
Scope of Supply
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Supply
includes
All forms of
supply
Made/ agreed to be
made for
consideration
In the course/
furtherance of
business
Sale, transfer
barter, exchange,
licence, rental,
lease, disposal
Import of
services
For
consideration
whether or not in
the course/
furtherance of
business
Supplier – outside
India
Recipient – in India
Schedule I – Activities
treated as supply
If made/ agreed to be made
without a consideration
1. Permanent transfer/ disposal of
business assets (ITC availed)
2. Supplies between related/
distinct persons
3. Supplies between principal &
agent
4. Services imported by taxable
persons from related persons in
the course/ furtherance of
business
Schedule II
Treated as supplies of
goods/ services
For example:Supply of goods transfer of title in goods,
HP transfers, transfer of
title in goods where
property passes at a
future date
Supply of services –
Hotelier, Constn of
complex, civil structure,
software, renting of
immovable property,
leasing
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EXCLUSIONS FROM SCOPE OF SUPPLY
Schedule III
Notified activities/ transactions undertaken
as public authorities by:-
Services by employee to employer
Central Govt.
Services by Court/ tribunal
State Govt.
Functions of MPs, MLAs, etc.
Local authority
Services of funeral, burial, etc.
Sale of land, sale of building
(except those covered under 5(b) of Sch II)
Actionable claims other than lottery, betting,
gambling
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SCOPE OF SUPPLY
The Government may notify transactions that are to be treated as:
supply of goods and not as supply of services; or
supply of services and not as supply of goods.
Composite supplies will be treated
as supply of principal supply
One
principa
l supply
2 or more
taxable
supplies of
goods/
services
Naturally
bundled
Mixed supplies will be treated as supply of
goods/ services attracting highest rate of
tax
2 or
more
Single
supplies
price
of goods/
services
Not a
composite
supply
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SCOPE OF SUPPLY – EXAMPLES OF COMPOSITE AND MIXED
SUPPLIES
Composite Supply
Mixed Supply
• Rajdhani Express provides rail transportation
services; they also supply food on board to
passengers. Supply of transportation services
would be the principal supply and such supply
would qualify as composite supply.
• Surf Excel offers plastic buckets free along with
supplies of detergent powder. Since such
supplies are not naturally bundled and the
buckets are capable of being sold
independently, the supply would be treated as
mixed supply.
• Dell Electronics sells laptops with pre-installed
software. Such supplies, being naturally
bundled, would qualify as composite supplies
with the sale of laptops being the principal
supply.
Item
Rate of tax (assumed)
Detergent
12%
Plastic bucket
18%
• Since plastic buckets attract a higher rate of
tax, the entire supply would be taxed at 18%
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GOODS AND SERVICES TAX
LEVY
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LEVY
CGST & SGST
IGST
• Levied on all intra-state supplies
• Rates, CGST & SGST taken
individually, will not exceed 20%
• Levied on all inter-state
supplies
• Rates will not exceed 40%
 CGST, SGST and IGST will apply on all supplies of goods/ services
 Except: alcoholic liquor for human consumption
 Petroleum, natural gas, ATF, etc., will be taxed w.e.f. date notified
 Reverse charge mechanism will apply: On notified categories of goods/ services
 In cases where the supplier of goods/ services is an unregistered person
 Notified e-commerce operators will be required to pay tax on intra-state supplies OF SERVICES ONLY
made through them as if they are the persons liable to pay tax on such supplies
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GOODS AND SERVICES TAX
INTRA-STATE & INTER-STATE
SUPPLIES
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NATURE OF SUPPLY
Intra-state
supply
Inter-state
supply
• Location of supplier and place of supply are in the same State*
• Location of supplier and place of supply are in the same Union Territory
• Location of supplier and place of supply are in: 2 different States or
 2 different UTs or
 A State and an UT
• Supply of imported goods into territory of India till they cross customs frontiers
• Supply of imported services into territory of India
• Supply of goods and/ or services where supplier is located in India and place of supply is
outside India
• Supplies made to/ by an SEZ developer/ SEZ unit
• Residual clause – all supplies into taxable territory which are not intra-state supplies
Notes:1. “State” includes a UT with legislature (Delhi & Chandigarh)
2. Location of supplier or place of supply is in territorial waters – such location or place will be deemed to be in the
coastal State/ UT where the nearest point of the appropriate baseline is located.
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NATURE OF SUPPLY - EXAMPLES
Import
Works Ltd., located in Bangalore,
imports goods from China via
sea-routes to a port located in
Chennai and then transports
such goods to Bangalore. The
goods are deemed to have been
imported when the goods reach
the Chennai port and not when
they are ultimately transported
to Bangalore.
Sec 7(2) of the IGST Act, 2017
SEZ
Logwood Ltd., an SEZ unit,
located in Karnataka
purchases goods from a
supplier located in
Karnataka. Although such
purchase takes place within
the state of Karnataka, it
would be reckoned as an
inter-State supply and
would be zero-rated in the
hands of the supplier.
Sec 7(5)(b) r/w Sec
16(1)(b)
Territorial
Waters
Indian Oil has an offshore
oil field off the coast of
Mumbai. Supplies from such
oil field would be deemed
to be supplies from the
state of Maharashtra.
Sec 9 of the IGST Act, 2017
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REVERSE CHARGE - SPECIFIED GOODS OR SERVICES
 Government may notify the list of goods or services or both based on the recommendation of Council
 On such recommended supplies- recipient shall pay
 All the provisions of the Act in respect of levy, collection, invoicing etc., shall apply to the recipient
 Similar provisions under IGST Act- Section 5(3)
ISSUES
 This will be applicable for registered and unregistered persons
 Examples: Import of services or import of goods- must register under GST irrespective of the turnover
REVERSE CHARGE Supply of goods and services or both by an un registered to a registered supplier- shall be paid by the registered
supplier on RCM- Section 9(4).
 Similar provisions under Section 5(4) of IGST Act
LEVY-SUPPLY OF SERVICE THROUGH E-COMM
 The Govt may notify on the recommendation of the Council, the list of services supplied intra state through e
commerce operator- E commerce operator will be liable to pay GST.
 If the e commerce operator does not have any presence in the state, then the person representing such e
commerce operator for any purpose in the taxable territory shall be liable to pay tax.
 Similar provisions under Section 5(5) of the IGST Act and 7(5) of UTGST
ISSUES
 The classification such as supply or works contract or composition supply or mixed supply is on receiver
 Pay tax by cash
 Comply other requirements like preparation of purchase invoice
 Create separate serial number for RCM for URD purchases
 How under IGST act one can sell without registration- Section 24) of CGST Act.
RELEVANCE
 Applicable for certain services only.
 Who operates within the state without physical presence
 As per the second proviso to Section 9(5), if they do not have physical presence, they have to appoint the agent in
“taxable territory”.
ISSUE
 Whether a lawyer or CA representing the tax issue would be held liable to pay tax?
 A courier person acting for the e commerce operator for supply of goods can be held responsible for supply of
services
 Whether a non-resident e-commerce operator should appoint agents in each State if they want to operate within
that state?
GOODS AND SERVICES TAX
COMPOSITION OF TAX
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COMPOSITION OF TAX…
Availed
Available
Eligible
Allowed
COT
1% - Manufacturers
2.5% - Hoteliers
0.5% - Others
Compliance
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COMPOSITION SUPPLIERS: CONDITIONS
& RESTRICTIONS
 Unless all registrations of the same PAN also eligible and opt for composition
 If aggregate turnover (all India basis) of preceding FY exceeds 75 Lakhs (If during the FY, the
aggregate turnover exceeds 75 Lakhs, no composition from the following day.)
 In the following specific cases composition scheme will not be available:
 Services supplied:
 Any/ all services except service specified in Sch II Para 6 clause (b)
 Goods supplied:
 Non-taxable goods
 Inter-State outward supplies
 Through e-commerce operators
 Notified goods manufactured by the supplier
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Tax Invoice
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TAX INVOICE – SEC 31
Registered
taxable
person shall
issue tax
invoice
Supply of
taxable goods
Supply of
taxable
services
Before/ at the time of :• Removal of goods for supply (supply involves movement
of goods)
• Delivery of goods/ making available to the recipient
(other cases)
Before/ after provision of service but within prescribed
period
a) Revised invoices may be issued against the invoice already issued during the period starting from the effective date of
registration till the date of issuance of certificate of registration within one month from date of issuance of
certificate of registration. (Rule 8)
b) A registered person supplying exempted goods or opting for composition to issue a bill of supply instead of tax
invoice (Rule 4)
c) Receipt voucher shall be issued by a person receiving advances and refund voucher (Rule 6) when such advance is
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returned for not having effected supplies. (Rule 5)
d) A registered person is required to issue an invoice on receiving goods/services from unregistered person and a
payment voucher (Rule 7) at the time of making payment of such taxes on behalf of the supplier.
Thank you
Singhvi, Dev & Unni
+ 91 80 2226 1371
[email protected]
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