GST

COMPACT

CA/CMA – INTER

APPLICABLE FOR MAY’25/JUNE’25/SEP’25/DEC’25/JAN’26

1 Brief introduction 1 - 4

2 Supply under GST 5 - 18

3 Charge under GST & Composition levy 19 – 32

4 Place of supply 33 - 45

5 Exemption under GST 46 - 65

6 Time of supply 66- 72

7 Value of supply 73 - 76

8 Input tax credit 77 - 103

9 Registration under GST 104 - 121

10 Tax invoice, debit and credit note, e-way bill 122 - 133

Accounts and records 134 - 138

11

Payment under GST 139 - 144

12

13
TDS & TCS 145 - 156

14 Returns under GST 157 - 169

Red – heading, , Green – amendment , Other colour – key words

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 GST SUMMARY NOTES (Applicable for MAY’25/JUNE ‘25/SEP’25/ /DEC’25)/JAN’26)

GST – 50 Marks
Section-wise weightage

Content Section Weightage

GST – an introduction I 0% – 5%

Supply, Charge, Composition, Exemption, II 50% - 80%

Place of supply, Time of supply, Value of
supply, ITC, Computation of GST
liability

Registration, Tax invoice, debit note & III 20% - 45%

credit note, E-way bill, Accounts and
records, Payment of tax, Returns

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 GST Compact (Applicable for MAY’25/JUNE ‘25/SEP’25/ /DEC’25)/JAN’26)

CHAPTER – 1: GST IN INDIA – A BRIEF

INTRODUCTION
Tax – is a “pecuniary burden laid upon individuals or property owners to support the
government, a payment exacted by legislative authority
Direct Taxes Indirect Taxes
(i) Levied by persons Levied on goods and services
(ii) Amt of tax on the basis of income Amt of tax is determined indirectly
(iii) Tax incidence is borne by the same Tax passes on to ultimate consumer
person who pays it
(iv) Higher collection cost Less collection cost
(v) Eg. Income tax Eg. GST, custom duty
FEATURES
 Major source of revenue
 Levied on goods and services
 Shifting of incidence of tax
 Consumer do not feel direct pinch of such taxes
 Leads to inflation
 Widens the tax base
 Helps in promotion social welfare
 Regressive in nature
Goods and Services Tax (GST): supply of goods or services or both. GST rolled out on
1st July 2017. France was the first country in 1954.
CONCEPT OF GST:
❖ Value added tax
❖ Continuously flow of credits
❖ Tax incidence is to be ultimately borne by final consumer
❖ Mitigation of cascading/double taxation
❖ Dual GST model is followed in India
GST – A TAX ON GOODS AND SERVICES
Alcoholic liquor for human consumption not leviable to GST
Petroleum crude, diesel, petrol, ATF and natural gas not liable to GST till
notified
Opium, Indian hemp and other narcotic drugs and narcotics GST is leviable.
FUNCTIONS OF GSTN:
 Facilitating registration
 Forward the return to central and state authorities
 Computation and settlement of IGST

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 Matching of tax payment details with banking network

 Providing analysis of tax payer’s profile
 Providing various MIS reports to the central and the state government based
on the tax payer return information.
 Running the matching engine for matching, reversal and reclaim of input tax
credit.
BENEFITS OF GST
(1) Benefit to economy:
• Creation of common national market
• Boost to ‘Make in India’ initiative
• Enhanced investment and employment
(2) Simplified tax regime:
• Ease of doing business
• Certainty in tax administration
(3) Easy tax compliance
• Automated procedures with greater use of IT
• Reduction in compliance costs
(4) Advantages for trade and industry
• Benefits to agriculture and industry
• Mitigation of ill effects of cascading
• Benefits to small traders and entrepreneurs
CONSITITUTION 101st AMENDMENT ACT, 2016:
Sec. Particulars Analysis
1 Short title and commencement -
2 Article 246A: special provisions with • Concurrent Power: This article
respect to goods and services tax. grants power to Centre and State
Governments to make laws with
respect to GST imposed by Centre
or such State.
• Inter state transactions – Exclusive
power with Centre: Centre has the
exclusive power to make laws with
respect to GST in case of inter-
State supply of goods and/or
services.
• Petroleum products Outside purview
of GST till
Notified Date: However, in respect
to the following goods, the
aforesaid provisions shall apply from

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the date recommended by the GST

Council :
(a) Petroleum Crude
(b) High Speed Diesel
(c) Motor Spirit (commonly known as
Petrol
(d) Natural Gas
(e) Aviation Turbine Fuel
• Overriding Effect: The provisions of
Article 246A are notwithstanding
anything contained in Articles 246
and Article 254 deals with the
supremacy of the laws made by
Parliament
3 Article 248: Residuary powers of -
legislation.
4 Article 249: Power of parliament to -
legislate with respect to a matter in
the state list in the national interest
5 Article 250: Power of parliament to -
legislate with respect to any matter
in the state List if a proclamation of
emergency is in operation
6 Article 268: Duties levied by the -
union but collected and appropriated
by the state
7 Omission of Article 268A: service -
tax levied by union and collected by
the union and the states
9 Article 269A: levy and collection of • Levy of interstate GST
goods and service tax in course of • Imports subject to integrated tax
inter-state trade or commerce • Cross utilization of IGST and SGST
– not to form part of consolidated
fund of India
• Supply whether inter-state supply –
principles to be formulated by
parliament
10 Article 270:taxes levied and -
distributed between the union and
the states
11 Article 271: surcharge on certain -

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duties and taxes for purposes of the

union
12 Article 279A: GST council -
13 Article 286: restriction as to -
imposition of tax on the sale or
purchase of goods
14 Article 366: Definitions -
15 Article 368: power of parliament to -
amend the constitution and procedure
thereof

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 GST Compact (Applicable for MAY’25/JUNE’25/SEP’25/DEC’25/JAN’26)

CHAPTER – 2: SUPPLY UNDER GST

TERM DEFINATION
GOODS Means every kind of movable property
• Other than –
Money, and
Securities
• But include –
Actionable claim,
Growing crops, grass and things attached to or forming part
of the land which are agreed to be served before supply or
under a contract of supply
Taxable Means a supply of goods or services or both which is leviable to tax
supply under the act
Taxable Extend to whole of India including J&K
territory
Supplier In relation to any goods or services or both, shall mean –
• The person supplying the said goods or services or both and
shall include
• An agent acting as such on behalf of such supplier in relation
to the goods or services or both supplied.
Recipient Of supply of goods or services or both, means –
(a) where a consideration is payable for the supply of goods or
services or both, the person who is liable to pay that
consideration;
(b) where no consideration is payable for the supply of goods, the
person to whom the goods are delivered or made available, or
to whom possession or use of the goods is given or made
available; and
(c) where no consideration is payable for the supply of a service,
the person to whom the service is rendered, and
any reference to a person to whom a supply is made shall be
construed as a reference to the recipient of the supply and shall
include an agent acting as such on behalf of the recipient in relation
to the goods or services or both supplied. [Section 2(93)1
Service Means anything –
➢ other than
• goods,
• money, and
• securities
➢ but includes activities relating to –
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(a) the use of money, or

(b) Its conversion by cash or by any other mode, from one
form, currency or denomination, to another form, currency
or denomination for which a separate consideration is
charged.
Explanation: For the removal of doubts, it is hereby clarified that
the expression "services" includes facilitating or arranging
transactions in securities.
SCOPE OF SUPPLY [ SECTION 7 ]
 Supply should be of goods or services.
 Supply should be made for a consideration
 Supply should be in the course or furtherance of business
 Supply should be made by Taxable person
 Supply should be a taxable supply
Notes:
• Consideration in relation to the supply of goods or services or both includes –
(a) Any payment made or to be made, whether in money or otherwise, in
respect of, in response to, or for the inducement of, the supply of goods
or services or both, whether by the recipient or by any other person but
shall not include and subsidy given by the central government or a state
government;
(b) The monetary value of any act or forbearance, in respect of, in response
to, or for the inducement of, the supply of goods or services or both,
whether by the recipient or by any other person but shall not include any
subsidy given by the central government or a state government;
Deposit not a consideration unless appropriated by supplier
• Supply should be in the course or furtherance of business: activities of a race
club including by way of totalisator or a licensee to book maker or activities of
a licensed book maker in such club
• Activities/transaction involving supply of goods or services by any person other
than an individual to its members/constituents or vice-versa [section 7(1)(aa)]

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 GST Compact (Applicable for MAY’25/JUNE’25/SEP’25/DEC’25/JAN’26)

IMPORT OF SERVICES COVERED IN SCOPE OF SUPPLY

WITH CONSIDERATION WITHOUT CONSIDERATION

In course of Not in course Related person Other cases

furtherance or furtherance /distinct person + in
of business of business course or furtherance Non-taxable
of business

Taxable

SUPPLY WITHOUT CONSIDERATION [ SCHEDULE I ]

(1) Permanent transfer or disposal of business assets where input tax credit has
been availed on such assets.
(2) Supply of goods or services or both between related persons or between
distinct persons as specified in Section 25, when made in the course or
furtherance of business.
However, gifts not exceeding Rs 50,000 in value in a financial year by an
employer to an employee shall not be treated as supply of goods or services or
both.
(3) Supply of goods -
(a) by a principal to his agent where the agent undertakes to supply such goods
on behalf of the principal; or
(b) by an agent to his principal where the agent undertakes to receive such
goods on behalf of the principal.
(agar principal ke naam pe hoga toh supply nahi hai and agent apne naam se
karega toh supply hai)
(4) Import of services by a person from a related person or from any of his other
establishments outside India, in the course or furtherance of business.
Note:
 Perquisite by employer to employee is outside the scope of GST
 Stock transfer and branch transfer main GST lagega (single registration main
nahi lagega)
 Supply of used vehicles, seized and confiscated goods by the government -
fall within the ambit of GST (supply to registered person then reverse charge,
supply to unregistered person then government pay under forward charge)

ACTIVITIES OR TRANSACTIONS TREATED AS SUPPLY OF GOODS OR SUPPLY OF

SERVICES.[ Schedule II]

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ACTIVITIES/ TYPE NATURE

TRANSACTION OF
SUPPLY
1. Transfer (a)
Transfer of the title in goods Goods
(b)
Transfer of right (without title) Services
(c)
Transfer of title upon future payment Goods
2. Land and (a)
Lease, tenancy, easement, license to occupy land Services
building (b)
Lease or letting out, either wholly or partly, of
the building including a commercial, industrial or Services
residential complex for business or commerce
3. Treatment of Treatment or process Services
process
4. Transfer of (a) Goods forming part of the asset of a business Goods
business assets are transferred or disposed of by or under the
directions of the person carrying on the business
so as no longer to form part of those assets
(b) Goods held used for business are put to private Services
use or are made available to any person for use
for any purpose other than business, by or under
the directions of the person carrying on the
business, whether or not for a consideration
(c) Where any person ceases to be a taxable person,
any goods forming part of the asset of any Goods
business carried on by him shall be deemed to be
supplied by him in the course or furtherance of
his business immediately
5.  Renting of immovable property Service
 Constructtion of a complex, building, civil structure or a part
thereof, including a complexor building intended for sale to a
buyer, wholly or partly, except where the entire consideration has
been received after issuance of completion certificate, where
required, by the competent authority or after its first occupation,
whichever is earlier
 temporary transfer or permetting the use or enjoyment of any
intellectual property right.
 Development design, programming, customisation, adaptation,
upgradation, enhancement, implementation of information
technonogy software
 Agreeing to the obligation to refrain from an act, or to tolerate an
act or a situation, or to do an act
 Trasnfer of the right to use any goods for any purpose for cash,
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deferred payment or other valuable consideration.

6. Following composite supplies: Service
 Works contract
 Supply, by way of or as part of any service or in any other manner
whatsoever of goods,being food or any other article for human
comsumption or any drink.
CIRCULARS:
➢ Transfer of tenancy right – supply of service and liable to GST
➢ GST is attracted even through stamp duty and registration charges is levied on
such premium.
➢ Grant of tenancy rights in a residential dwelling against tenancy premium –
exempt from tax.
ACTIVITIES NEITHER SUPPLY OF GOODS NOR SUPPLY OF SERVICES [ SCHEDULE
III ]
(1) Services by an employee to the employer in the course of or in relation to his
employment.
(2) Services by any court or Tribunal established under any law for the time being
in force. Explanation 1: The term "court" includes District Court, High Court
and Supreme Court.
(3) (a)The functions performed by the Members of Parliament, Members of State
Legislature, Members of Panchayats, Members of Municipalities and Members of
other local authorities;
(b) The duties performed by any person who holds any post in pursuance of the
provisions of the Constitution in that capacity; or
(c) the duties performed by any person as a Chairperson or a Member or a
Director in a body established by the Central Government or a State
Government or local authority and who is not deemed as an employee before the
commencement of this clause.
(4) Services of funeral, burial, crematorium or mortuary including transportation of
the deceased.
(5) Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of
building.
(6) Actionable claims, other than specified actionable claim.
Specified actionable claim means the actionable claim involved in or by way of—
(i) betting;
(ii) casinos;
(iii) gambling;
(iv) horse racing;
(v)lottery; or
(vi) online money gaming;

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(7) Supply of goods from a place in the non-taxable territory to another place in
the non-taxable territory without such goods entering into India.
(8) (a) Supply of warehoused goods to any person before clearance for home
consumption;
(b) Supply of goods by the consignee to any other person, by endorsement of
documents of title to the goods, after the goods have been dispatched from the
port of origin located outside India but before clearance for home consumption.
The term "warehoused goods" shall have the same meaning as assigned to it in
the Customs Act, 1962. [Explanation 2]
NOTE:
 Services supplied outside employment for a consideration – taxable
 Services supplied on contract basis – taxable
 Amount received by an employee from the employer on premature termination
of contract of employment – not regarded as supply
 Non-competing fees – taxable
 Independent directors, nominee directors or non-executive directors cannot be
regarded as employee remuneration to them is liable to GST
 GST is not leviable on the fee or penalty or pre-deposit amount charged by
consumer disputes redressal commission office.
 Remuneration paid to independent director/non-employee directors – covered
under the ambit of supply – liable to GST under RCM
 Remuneration to employee director – if services are provided in course of
employment – liable to TDS under section 192 of the Income Tax Act, 1961 –
covered in Schedule – III – not liable to GST. Other services – outside service
contract of employment – liable for TDS under section 194J – covered in the
scope of supply – liable for GST under RCM.
CIRCULARS:
Inter-state movement of various modes of conveyance, carrying goods or
passengers is not regarded as supply. However, if it is or for repairs and
maintenance, it shall be regarded as supply.
Inter-state transfer of aircraft engines, part and accessories for self use by
airlines-liable to GST, however ITC admissible.
Taxability of printing contracts
(i) Content owned by publisher/ author – paper and printing by printer – is
supply of service
(ii) Supply of printed envelopes, letter cards etc using design supplied by
recipient – is supply of goods
Supply of services by JV to members – regarded as supply
Supplies between JV and members or members inter se – liable to GST
Cash calls/capital – mere flow of money – taxable if by way of advance
towards suppliers.
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Priority sector lending certificate (PSLCs) are in nature of goods and liable to
GST.
Retreading of tyres is a supply. Supply of retreated tyres is supply of goods
(pre-dominant element is process of retreading which is a supply of service)
GST is applicable on payment of honorarium to the Guest Anchors.
Sale of land after levelling, laying down of drainage lines etc., is covered in
Schedule III and is not taxable under GST [Circular No. 177/09/2022-TRU
dated 03-08-2022]
Perquisites provided in terms of contractual agreement to employee are not
liable to GST.
Supply of food and beverages at cinema halls taxable as restaurant service.
No Claim Bonus cannot be consideredas a consideration for any supplyprovided
by the insured to the insurance company.
Clarification on the taxability of ESOP/ESPP/RSU provided by a company to its employees
through its overseas holding company. — Circular No. 213/07/2024-GST dated 26-06-2024
Issue: It has been represented that some of the Indian companies provide the option to their
employees for allotment of securities/shares of their foreign holding company as part of the
compensation package as per terms of contract of employment. In such cases, on exercising
the option by the employees of Indian subsidiary company, the securities/shares of foreign
holding company are allotted directly by the holding company to the concerned employees of
Indian subsidiary company, and the cost of such securities/shares is generally reimbursed by
the subsidiary company to the holding company.

Doubts are being raised regarding taxability of such a transaction under GST, i.e. whether
such transfer of shares/ securities by the foreign holding company directly to the employees
of the Indian subsidiary company and subsequent re-imbursement of the cost of such shares/
securities by the Indian subsidiary company to the foreign holding company can be considered
as import of financial services by the Indian subsidiary company from the foreign holding
company and whether the same can be considered as liable to GST in the hands of Indian
subsidiary company on reverse charge basis.

Clarification : The Board hereby clarifies the issues as under –

The companies are providing option of allotment of securities/shares to their employees as a
means of incentivization and the same is commonly referred to as an Employee Stock Purchase
Plan (ESPP) or Employee Stock Option Plan (ESOP) or Restricted Stock Unit (RSU). Such
specific terminology usage depends on the agreed-upon compensation terms between the
employer and the employee. ESPPs and ESOPs are typically presented as 'options' granted to
employees, whereas RSUs take the form of awards or rewards contingent upon the employee
meeting specific performance standards. Regardless of the terminology used, the fundamental
essence of the transaction remains the same i.e. the allocation of securities or shares from

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the employer to employee as part of compensation package with the aim of motivating
enhanced performance.
(a) A transaction involving transfer of ESOP/ESPP/RSU to the employees of domestic
subsidiary by the foreign holding company appears to involve the following steps:
The domestic subsidiary company gives option/ facility of ESOP/ESPP/RSU to its
employees as part of compensation package as per terms of employment.
The employees exercise their stock options, either by purchasing shares at the grant
price or by holding the options until they vest.
The foreign holding company of the domestic subsidiary company issues ESOP/ESPP/RSU,
which are securities/shares listed on the foreign stock exchange, to the employees of
the domestic subsidiary company.
The foreign holding company transfers the shares directly to the employees of the
subsidiary company.
The domestic subsidiary company generally reimburses the cost of such shares to the
foreign holding company on cost-to cost basis either through an actual remittance or
through an equity transfer as prescribed by the relevant Indian Accounting Standard.
The employees hold the shares and may sell them at a later date, if they so choose.
(b) The foreign holding company issues securities/shares as ESOP/ESPP/RSU to the employees
of the domestic subsidiary company on the request of the said domestic subsidiary
company. However, Securities under GST Law are considered neither goods nor services in
terms of definition of “goods” under section 2(52) of CGST Act and in terms of definition
of “services” under Section 2 (102) of the said section.
Further, securities include ‘shares’ as per definition of “securities” under section 2(h) of
Securities Contracts (Regulation) Act, 1956. Accordingly, purchase or sale of
securities/shares, in itself, is neither a supply of goods nor a supply of services.
Therefore, in the absence of such transaction, falling under the supply of ‘goods’ or
‘services’ as per GST Act, GST is not leviable on said transaction of
sale/purchase/transfer of securities/shares.

(c) Further, the companies offer ESOP/ESPP/RSU to their employees to motivate them to
perform better, and to retain the employees, by aligning the interest of employees with
that of company. The ESOP/ESPP/RSU is a part of remuneration of the employee by the
employer as per terms of employment. As per Entry 1 of Schedule III of the CGST Act,
the services by an employee to the employer in the course of or in relation to his
employment are treated neither as supply of goods nor as supply of services. Therefore,
GST is not leviable on the compensation paid to the employee by the employer as per the
terms of employment contract which involve transfer of securities/shares of the foreign
holding company to the employees of domestic subsidiary company.
(d) The foreign holding company directly transfers the shares/securities to the employees of
the domestic subsidiary company on the request of the said domestic subsidiary company.
Reimbursement of such securities/ shares is generally done by domestic subsidiary
company to foreign holding company on cost-to-cost basis i.e. equal to the market value
of securities without any element of additional fee, markup or commission. Since the said
reimbursement by the domestic subsidiary company to the foreign holding company is for

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transfer of securities/shares, which is neither in nature of goods nor services, the same
cannot be treated as import of services by the domestic subsidiary company from the
foreign holding company and hence, is not liable to GST under CGST Act.
(e) However, if the foreign holding company charges any additional fee, markup, or
commission from the domestic subsidiary company for issuing ESOP/ESPP/RSU to the
employees of the domestic subsidiary company, then the same shall be considered to be in
nature of consideration for the supply of services of facilitating/ arranging the
transaction in securities/ shares by the foreign holding company to the domestic
subsidiary company. In this case, GST will be leviable on such amount of the additional
fee, markup, or commission, charged by the foreign holding company from the domestic
subsidiary for issuance of its securities/shares to the employees of the latter. The GST
shall be payable by the domestic holding company on reverse charge basis on such import
of services from the foreign holding company.
(f) Accordingly, it is clarified that no supply of service appears to be taking place between
the foreign holding company and the domestic subsidiary company where the foreign
holding company issues ESOP/ESPP/RSU to the employees of domestic subsidiary company,
and the domestic subsidiary company reimburses the cost of such securities/ shares to
the foreign holding company on cost-to-cost basis. However, in cases where an additional
amount over and above the cost of securities/shares is charged by the foreign holding
company from the domestic subsidiary company, by whatever name called, GST would be
leviable on such additional amount charged as consideration for the supply of services of
facilitating/ arranging the transaction in securities/ shares by the foreign holding company
to the domestic subsidiary company. The GST shall be payable by the domestic subsidiary
company on reverse charge basis in such a case on the said import of services.
(10) Clarification on taxability of salvage/ wreck value earmarked in the claim assessment of
the damage caused to the motor vehicle. — Circular No. 215/9/2024-GST dated 26-06-2024
The insurance companies, which are engaged in providing general insurance services in respect
of insurance of motor vehicles, insure the cost of repairs/ damages of motor vehicles incurred
by the policyholders. Such damages to the insured vehicle are classified in two categories:

(i) Total Loss/ Constructive Total Loss or Cash Loss; and

(ii) Partial Loss Situation
Issue: Whether the insurance company is liable to pay GST on the salvage/ wreckage value
earmarked in the claim assessment of the damage caused to the motor vehicle?

Clarification : Under GST law, supply is the relevant taxable event for levying tax. For an
activity/transaction to be liable to GST, existence of ‘supply’ as defined under section 7 of
CGST Act should be there.
Section 7 of CGST Act defines supply to mean ‘all forms of supply of goods or services or
both made or agreed to be made for a consideration by a person in the course or furtherance
of business.’
In the instant case, insurance companies are providing service of insuring the vehicle/
automobile for any damages and in return, charging consideration in the form of premium
charged from the owner of the vehicle. It is also noted that in respect of insurance services

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being provided by the insurance companies, it is the responsibility of the insurance company to
get the damaged vehicle repaired or to compensate the insured person against the damage
caused to the vehicle, to the extent covered under the terms of the insurance.
Any Deduction made by the insurance company from the final claim amount paid to the insured
is in the form of deductibles which is pre-decided and mutually agreed by the insured and the
insurer while signing the insurance contract. In cases where as per the policy contract, the
insurance company’s liability to pay the insured is limited to Insured’s Declared Value (IDV) of
the vehicle less the value of salvage/ wreck in cases of total loss to the vehicle, if the
insurance claim is settled by the insurance company as per the terms of the insurance
contract by deducting value of salvage/ wreckage from the claim settlement amount, the
salvage/ wreckage does not become property of insurance company, and the ownership for such
wreckage/ salvage remains with the insured.
However, in some cases, the insurance company may support sourcing of competitive quotes
from various salvage/ wreckage buyers and the insured may select the best available offer for
sale of wreckage or damaged car. The insured may also source quotes from open markets and
dispose the wreckage or damaged car to such a buyer. In any case, the ownership of the
wreckage vests with the insured and not with the insurance company. The same can be
disposed by the insured either directly, or through the garage, or may not be disposed at all,
as per his wish and choice. The deduction of the value of salvage from the insurance
settlement amount, is as per the terms of the insurance contract, and cannot be said to be
consideration for any supply being made by insurance company. Accordingly, in such cases,
there does not appear to be any supply of salvage by insurance company and as such, there
does not appear to be any liability under GST on the part of insurance company in respect of
this salvage value.
However, in situations where the insurance contract provides for settlement of claim on full
IDV, without deduction of value of salvage/ wreck, the insured will be paid for full claim
amount without any deductions on account of salvage value. In such a situation, the salvage
becomes the property of Insurance Company after settling the claim for the full amount and
the insurance company is obligated to deal with the same or dispose of the same. In such
cases, the outward GST liability on disposal/sale of the salvage is to be discharged by the
insurance companies.
Therefore, in cases where due to the conditions mentioned in the contract itself, general
insurance companies are deducting the value of salvage as deductibles from the claim amount,
the salvage remains the property of insured and insurance companies are not liable to
discharge GST liability on the same. However, in cases, where the insurance claim is settled
on full claim amount, without deduction of value of salvage/ wreckage (as per the terms of the
contract), the salvage becomes the property of the insurance company and the insurance
company will be obligated to discharge GST on supply of salvage to the salvage buyer.
(11) GST applicability on liquidated damages, compensation and penalty arising out of breach
of contract or other provisions of law. —Circular No. 178/10/2022-GST dated 03-08-2022
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Clarification: “Agreeing to the obligation to refrain from an act or to tolerate an act or a

situation, or to do an act” has been specifically declared to be a supply of service in para 5(e)
of Schedule II to the CGST Act, 2017 if the same constitutes a “supply” within the meaning
of the CGST Act.

GST applicability on liquidated damages, compensation and penalty arising out of

breach of contract or other provisions of law.
1. "Agreeing to the obligation to refrain from an act or to tolerate an act
or a situation, or to do an act" has been specifically declared to be a supply
of service in para 5 (e) of Schedule II of CGST Act if the same constitutes a
"supply" within the meaning of the Act. The said expression has following three
limbs:-
Agreeing to the Example of activities that would be covered by this part of
obligation to the expression would include non-compete agreements, where
refrain from an one party agrees not to compete with the other party in a
act product, service or geographical area against a consideration
paid by the other party.
Another example of such activities would be a builder
refraining from constructing more than a certain number of
floors, even though permitted to do so by the municipal
authorities, against a compensation paid by the neighbouring
housing project, which wants to protect its sunlight, or an
industrial unit refraining from manufacturing activity during
certain hours against an agreed compensation paid by a
neighbouring school, which wants to avoid noise during those
hours.
Agreeing to the Example - This would include activities such a shopkeeper
obligation to allowing a hawker to operate from the common pavement in
tolerate an act front of his shop against a monthly payment by the hawker or
or a situation an RWA tolerating the use of loud speakers for early morning
prayers by a school located in the colony subject to the
school paying an agreed sum to the RWA as compensation.
Agreeing to the Example - This would include the case where an industrial unit
obligation to do agrees to install equipment for the zero emission/discharge at
an act the behest of the RWA of a neighbouring residential complex
against a consideration paid by such RWA, even though the
emission/discharge from the industrial unit was within
permissible limits and there was no legal obligation upon the
individual unit to do so.
2. The description "agreeing to the obligation to refrain from an act or to
tolerate an act or a situation, or to do an act" was intended to cover

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services such as described above. However, over the years doubts have
persisted regarding various transactions being classified under the said
description.
Some of the important examples of such cases are Service Tax GST demands on-
i) Liquidated damages paid for breach of contract,
ii) Cheque dishonor fine/penalty charged by a power distribution company
from the customers,
iii) Penalty paid by a mining company to State Government for unaccounted
stock of river bed material:
iv) Bond amount recovered from an employee leaving the employment
before the agreed period
v) Late payment charges collected by any service provider for late payment of
bill
vi) Fixed charges collected by a power generating company from State
Electricity Boards (SEB) or by SEBS/DISCOMS from individual customer
for supply of electricity:
vii) Cancellation charges recovered by railways for cancellation of tickets,
etc.
3. Contractual agreement and consideration necessary to constitute supply :-
The service of agreeing to the obligation to refrain from an act or to
tolerate an act or a situation, or to do an act is nothing but a contractual
agreement. A contract to do something or to abstain from doing something
cannot be said to have taken place unless there are two parties, one of which
expressly or impliedly agrees to do or abstain from doing something and the
other agrees to pay consideration to the first party for doing or abstaining
from such an act. There must be a necessary and sufficient nexus between the
supply (i.e.agreement to do or to abstain from doing something) and the
consideration.
A perusal of the entry at serial 5(e) of Schedule II would reveal that it
comprises the aforementioned three different sets of activities viz.:
(a) the obligation to refrain from an act
(b) obligation to tolerate an act or a situation and
(c) obligation to do an act
All the three activities must be under an "agreement" or a "contract"
(whether express or implied) to fall within the ambit of the said entry. In
other words, one of the parties to such agreement/contract (the first party)
must be under a contractual obligation to either (a) refrain from an act,
or (b) to tolerate an act or a situation or (c) to do an act.
Further some "consideration" must flow in return from the other party
to this contract/agreement (the second party) to the first party for such (a)

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refraining or (b) tolerating or (c) doing. Such contractual arrangement must be

an independent arrangement in its own right. Such arrangement or
agreement can take the form of an independent stand-alone contract or may
form part of another contract.
Thus, a person (the first person) can be said to be making a supply by way
of refraining from doing something or tolerating some act or situation to
another person (the second person) if the first person was under an
obligation to do so and then performed accordingly.
4. Agreement to do or refrain from an act should not be presumed to
exist:
Every payment cannot be presumed to be for doing or refraining from an
act:- There has to be an express or implied agreement, oral or written,
to do or abstain from doing something against payment of consideration for
doing or abstaining from such act, for a taxable supply to exist. An
agreement to do an act or abstain from doing an act or to tolerate an act
or a situation cannot be imagined or presumed to exist just because there is
a flow of money from one party to another. Unless there is an express or
implied promise by the recipient of money to agree to do or abstain from doing
something in return for the money paid to him, it cannot be assumed that such
payment was for doing an act or for refraining from an act or for tolerating an
act or situation.
Payments such as liquidated damages for breach of contract, penalties under
the mining act for excess stock found with the mining company, forfeiture
of salary or payment of amount as per the employment bond for leaving the
employment before the minimum agreed period, penalty for cheque dishonour
etc. are not a consideration for tolerating an act or situation. They are
rather amounts recovered for not tolerating an act or situation and to deter
such acts; such amounts are for preventing breach of contract or non-
performance and are thus mere 'events' in a contract. Further, such amounts
do not constitute payment (or consideration) for tolerating an act, because
there cannot be any contract:
(a) for breach thereof, or
(b) for holding more stock than permitted under the mining contract.or
(c) for leaving the employment before the agreed minimum period or
(d) for doing something leading to the dishonour of a cheque.
As has already been stated, unless payment has been made for an independent
activity of tolerating an act under an independent arrangement entered into
for such activity of tolerating an act, such payments will not constitute
'consideration' and hence such activities will not constitute "supply" within the
meaning of the Act.
Taxability of these transactions is discussed in greater detail in the following

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paragraphs.

TAXABILITY OF COMPOSITE AND MIXED SUPPLY

COMPOSITE SUPPLY MIXED SUPPLY

❖ Consists of two or more ❖ Consists of two or more supplies for
supplies single price
❖ Naturally bundled ❖ Not naturally bundled
❖ In conjunction with each other ❖ Though can be supplied independently,
❖ One of which is principal but supplied together
supply ❖ Tax liability shall be the rate
❖ Tax liability shall be rate of applicable to the supply that attracts
principal supply highest rate of tax

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 GST Compact (Applicable for MAY’25/JUNE’25/SEP’25/DEC’24/JAN’26)

CHAPTER – 3: CHARGE OF GST &

COMPOSITION LEVY
CATEGORIES OF SERVICES ON WHICH TAX WILL BE PAYABLE UNDER REVERSE
CHARGE MECHANISM UNDER CGST ACT, 2017 [ NOTIFICATION NO. 13/2017]
CATEGORY OF SUPPLY OF SUPPLIER RECIPIENT OF SERVICE
SERVICES OF
SERVICE
1. Supply of services by a Good Goods a) Any factory registered
Transport Agency (GTA) in Transport under or governed by the
respect of transportation of Agency factories Act, 1948; or
b) Any society registered
goods by road to – (GTA)
under the societies
a) any factory register under or
Registration Act, 1860 or
governed by the Factories
under any other law for the
Act, 1948; or
time being in force in any
b) any society registered under
part of India; or
the Societies Registration Act,
c) Any co-operative society
1860 or under any other law
established by or under any
for the time being in force in
law; or
any part of India; or
d) Any person registered under
c) any Co-operative society
the CGST Act or the IGST
established by or under any
Act or the SGST Act or the
law; or
UTGST Act; or
d) any person registered under
e) Any body corporate
the CGS Act or the IGST Act
established, by or under any
or the SGST Act or the
law; or
UTGST Act; or
f) Any partnership firm
e) any body corporate
whether registered or not
established, by or under
under any law including
any law; or
association of persons; or
f) any partnership firm whether
g) Any casual taxable person;
registered or not under any
located in the taxable
law including Association of
territory.
persons; or
g) any casual taxable person However nothing contained in
this entry shall apply where :-
RCM not applicable if recipient
i. the supplier has taken
registered only for TDS :-
registration under the
However, nothing contained in this
CGST Act 2017 and

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entry shall apply to services exercised the option to pay

provided by a goods transport tax on the services of GTA
agency, by way of transport of in relation to transport of
goods supplied by him under
goods in a goods carriage by road,
forward charge; and
to, -
ii. the supplier has issued at
a) A department or establishment tax invoice to the recipient
of the central government or charging Central Tax at the
State government or Union applicable rates and has
Territory; or made a prescribed
b) Local authority; or declaration on such invoice
c) Governmental Agencies, issued by him.
which has taken registration under
the CGST Act, 2017 only for the
purpose of deducting tax u/s 51
and not for making a taxable
supply of goods or services.
2. Services provided by an individualAn Any business entity located in
advocate including a seniorindividual taxable territory.
advocate or firm of advocates by advocate
way of legal services, directly orincluding a
indirectly senior
advocate
or firm of
advocates
3. Services supplied by an arbitral An arbitral Any business entity located in
tribunal to a business entity tribunal the taxable territory
4. Services provided by way of Any person Any body corporate or
sponsorship to any body corporate partnership firm located in the
or partnership firm taxable territory
5. Services supplied by the Central Central Any business entity located in
Government, State Government, Governmen the taxable territory.
Union territory or local authority t, State
to a business entity excluding,- Governmen
(1) renting of immovable property, t, Union
and territory
(2) Services specified below: or local
a) services by the Department authority
of Posts and the Ministry

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of Railways (Indian
Railways)
b) services in relation to an
aircraft or a vessel, inside
or outside the precincts of
a port or an airport;
c) transport of goods or
passengers.
5A Services supplied by the Central Central Any person registered under
. Government, excluding the Governmen the CGST Act, 2017
Ministry of Railways (Indian t, State
Railways), State Government, Governmen
Union territory or local authority t, Union
by way of renting of immovable territory
property to a person registered or local
under the CGST Act, 2017 authority
5A Service by way of renting of Any Any registered person
A residential dwelling to a person
registered person.
5B Services supplied any person by Any person Promoter
. way of transfer of development
rights or Floor Space Index (FSI)
(including additional FSI) for
construction of a project by a
promoter.
5C Long term lease of land (30 years Any person Promoter
. or more) by any person against
consideration in the form of
upfront amount (called as
premium, salami, cost, price,
development charges or by any
other name) and/or periodic rent
for construction of a project by a
promoter.
6. Services supplied by a director ofA director The company or a body
a company or a body corporate to of a corporate located in taxable
the said company or the body company or territory
corporate. a body
corporate
7. Services supplied by an insurance A Any person carrying on
agent to any person carrying on insurance insurance business, located in
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insurance business. agent the taxable territory

8. Services supplied by a recovery A recovery A banking company or financial
agent to a banking company or a agent institution or a non-banking
financial institution or a non- financial company, located in
banking financial company. the taxable territory
9. Supply of services by a music Music Music company, producer or the
composer, photographer, artist or composer, like, located in the taxable
the like by way of transfer or photograph territory.
permitting the use or enjoyment er, artist,
of a copyright covered under or the like
Section 13(1)(a) of the
Copyright Act, 1957 relating to
original dramatic, musical or
artistic works to a music company,
producer or the like
9A *Supply of services by an author Author Publisher located in the taxable
. by way of transfer or permitting territory: however, nothing
the use or enjoyment of a contained in this entry shall
copyright covered u/s 13(1) (a) of apply where –
the Copyright Act, 1957 relating (I) the author has taken
to literary works to a publisher. registration under the
original CGST Act, 2017 and filed
a declaration, in the
specified form before the
commencement of financial
year with the jurisdictional
CGST or SGST
Commissioner, as the case
may be, that he exercises
the option to pay central
tax on such services in
accordance with Section
9(1) of the
CGST Act, 2017 under
forward charge, and to
comply with all the
provisions of CGST Act,
2017 as they apply to a
person liable for paying the
tax in relation to the supply
of any goods or services or

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both and that he shall not

withdraw the said option
within a period of 1 year
from the date of exercising
such option;
(II) the author makes a
declaration regarding
payment of tax on forward
charge on the invoice issued
by him in Form GST Inv-I
to the publisher.
10 Supply of services by the Members RBI
members of Overseeing Committee of
to RBI overseeing
committee
constituted
by the RBI
11 Services supplied by individual individual A banking company or a non-
Direct Selling Agents (DSAs) Direct banking financial company,
other than a body corporate, Selling located in the taxable territory
partnership or limited liability Agents
partnership firm to bank or non- (DSAs)
banking financial company (NBFCs) other than
a body
corporate,
partnershi
p or
limited
liability
partnershi
p firm
12 Services provided by business Business A banking company, located in
facilitator (BF) to a banking facilitator the taxable territory
company (BF)
13 Services provided by an agent of An agent A business correspondent
business correspondent (BC) to of business located in taxable territory
business correspondent (BC) correspond
ent
14 Security services (services Any person A registered person, located in
provided by way of supply of other than the taxable territory
security personnel) provided to a body

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registered person. corporate

RCM not applicable if recipient
registered only for TDS and in
case composition suppliers :
However, nothing contained in this
entry shall apply to, -
(i) (a) a Department or
Establishment of the Central
Government or State
Government or Union territory; or
(b) local authority; or
(c) Governmental agencies,
which has taken
registration under the CGST Act,
2017 only for the purpose of
deducting tax u/s 51 of the said
Act and not for making a taxable
supply of goods or services; or
(ii) a registered person paying tax
under section 10 of the said Act.
15 Services provided by way of Any person Any body corporate located in
renting of a motor vehicle other than the taxable territory
provided to a body corporate a body
corporate,
paying
central tax
at the
rate of
2.5% on
renting of
motor
vehicles
with input
tax credit
only of
input
service in
the same
line of
business
16 Services of lending of securities Lender i.e. Borrower i.e. a person who

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under Securities Lending Scheme, a person borrows the securities under

1997 who the scheme through an
("Scheme") of SEBI as amended. deposits approved intermediary of SEBI
the
securities
registered
in his name
or in the
name of
any other
person
duly
authorised
on his
behalf
with an
approved
intermedia
ry for the
purpose of
lending
under the
Scheme of
SEBI
CIRCULAR:
 supply of securities under securities lending scheme, 1997 by the lender is
taxable under GST as lending of securities is not covered under disposal of
securities, thus covered under the ambit of services. Lending fees charged by
the lender from the borrower is liable to IGST under reverse charge
mechanism.
 Tax on services by director of a company in his personal capacity such as
renting of immovable property to the company/body corporate not payable
under RCM

Provisions of this notification, in so far as they apply to the Central Government

and State Governments, shall also apply to the Parliament, State Legislatures,
Courts and Tribunals. [Amended w.e.f. 01-03-2023]

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Recipient of GTA service Person who pays or is liable to pay freight

Person liable to pay tax under GTA service

GTA paying GST @ 5% GTA paying GST @ 12%

Recipient is one of Recipient is other than Forward charge

the Specified recipient
specified recipient (Unregistered individual end consumer)

Person liable to
pay GST is GTA
Reverse charge Exempt from GST

Person liable to pay GST is such recipient

GST SERVICES ARE TAXABLE:

❖ @5% provided GTA has not taken the input tax credit on goods and services
used in supplying GTA service. Such services are taxable under reverse charge
mechanism. However, GTA can exercise the option to pay tax under forward
charge mechanism. In such a case, GTA has to take registration under the
CGST,2017 has to issue tax invoice to the receipient charging GST@5% and
has to make a prescribed declaration on such invoice issued by him.
❖ @12% provided GTA pays GST under forward charge. There is no restriction
on availing ITC on goods and services used in supplying GTA services by GTA

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Person liable to pay tax under renting of motor vehicle service

Where GST is payable @ 5% Where GST is payable @ 12%

Supplier is other than Body corporate Supplier is Body corporate

Forward
Recipient is a Body Corporate Recipient is other than charge
Body Corporate
Reverse charge
Person liable to pay GST is such supplier

Person liable to pay GST is such recipient

Services Services supplied by a director of a company or body corporate to the

company or body corporate in his private or personal capacity are not taxable under
RCM - Circular No. 201/13/2023-GST dated 1-8-2023
Service of transport of passengers is distinct from service of renting of a vehicle
that is used for Transport. Where the body corporate hires the motor vehicle (for
transport of employees etc) for a period of time, during which the motor vehicle shall
be at the disposal of the body corporate, it shall be liable to pay GST on the same
under RCM.

E-COMMERCE OPERATOR
E-commerce operator will be liable to pay GST in respect of service provided
through E-commerce operator.
No physical presence of E-commerce operator in the taxable territory –
representative liable to GST
No representative in taxable territory – E-commerce operator shall appoint
person and he shall be liable to pay.
It is important to note that this exception is carved out only in respect of
supply of services through an e-commerce operator and will not be applicable
/relevant to supply of any goods through an e-commerce operator.
Categories of services the tax on intra-state supplies of which shall be paid by
the electronic commerce operator.
× Services by way of transportation of passengers by a radio-taxi,
motorcab, maxicab,motor cycle, or any other motor vehicle except
omnibus

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× Services by way of transportation of passengers by an omnibus except

where the person supplying such services through ECO is a company
× Services by way of providing accommodation in hotels
× Services by house keeping
× Supply of restaurant service other than the services supplied by
restaurant, eating joints etc. located at specified premises ( “specified
premises” means premises providing hotel accommodation service having
declared tariff of any unit of accommodation above ₹7,500/- per unit
per day or equivalent )
IGST to be paid on reverse charge by recipient on notified goods/services or both
CATEGORY OF SUPPLY OF SERVICE SUPPLIER OF RECIPIENT OF
SERVICE SERVICE
1. Any service supplied by any person who is Any person Any person located in
located in a non territory to any person located in a the taxable territory
other than non-taxable online recipient non-taxable other than non-taxable
territory online recipient
IGST is levied on export, supply to/by SEZ, import of services

COMPOSITION LEVY
[SECTION 10]
 Optional scheme: option available to taxable person
 Eligibility: a registered person, whose aggregate turnover in the preceding F.Y did
not exceed ₹ 1.5 crore, will be eligible.
Special category states ( ₹75 lakh)
Arunachal Pradesh Manipur Meghalaya Tripura
Mizoram Nagaland Sikkim Uttarakhand
Assam, Himachal Pradesh and Jammu and Kashmir, the turnover limit will be ₹ 1.5
crore
Aggregate turnover means the aggregate value of –
➢ All taxable supplies (excluding the value of inward supplies on which tax is
payable by a person on a reverse charge basis),
➢ Exempt supplies,( excluding value of exempt supply of services by way of
extending loans, deposit and advances in so far consideration is represented by
way of interest or discount )
➢ Export of goods or services or both, and
➢ Inter-state supplies
Of persons having the same PAN, to be computed on all India basis,
But excludes –
➢ Central tax, state tax, union territory tax, integrated tax, and cess.
 Scheme will be applicable for all goods and restaurant services.

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 Rates of composition tax

S. Eligible person Rate of Tax cannot exceed (% of Total rate of tax
N turnover) cannot exceed
O. CGST SGST
(a) Manufacturer 0.5% of the 0.5% of the 1 % of the
turnover of the turnover of the turnover of the
state or union state or union state or union
territory territory territory
(b) Restaurant 2.5% of the 2.5% of the 5% of the turnover
service turnover of the turnover of the of the state or
state or union state or union union territory
territory territory
(c) Other supplies 0.5% of the 0.5% of the 1 % of the
turnover of the turnover of the turnover of the
taxable supplies of taxable supplies of taxable supplies of
goods and services goods and services goods and services
state or union state or union state or union
territory territory territory
Services can be supplied by the composition suppliers: A person who opts to pay tax
under (a) or clause (b) or clause (c) may supply services (other than those referred to
in clause (b) of paragraph 6 of schedule II i.e. restaurant services), of value –
(a) Not exceeding 10% of turnover in a state or union territory in the preceding
F.Y or
(b) Rs 500000
Whichever is higher.
 Persons not eligible to opt for composition scheme
Supplier of services other than those mentioned above.
Supplier of goods which are not taxable under GST
An inter-state supplier of goods
Person supplying goods through an electronic commerce operator
Manufacturer of certain notified goods (ineligible manufacturer)
S.no Tariff item, Description
subheading, heading or
chapter
1. 21050000 Ice cream and other edible ice, whether or not
containing cocoa
2. 21069020 Pan masala
2A. 22021010 Aerated water
3. 24 All goods, i.e. Tobacco and manufactured tobacco
substitutes

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4. 6815 Fly ash bricks; Fly ash aggregates; Fly ash blocks
5. 69010010 Bricks of fossil meals or similar siliceous earths
6. 69041000 Building bricks
7. 69051000 Earthen or roofing tiles
There is no restriction on composition supplier to procure goods from inter-state
supplies.
 Applicable for all transactions of registered person with same PAN
 Option lapses if aggregate turnover exceeds Rs 1.5 crore/ Rs 75 lakh
 Composition tax not to be collected from recipients
 Input tax credit cannot be availed
 Composition scheme not applicable for tax payable under reverse charge
mechanism
 Customer not entitled to tax credit of composition scheme.
PRESUMPTIVE SCHEME FOR SERVICES SUPLLIERS AND MIXED SUPPLIES (
Section 10(2A) )
• New scheme in GST dated 07-03-2019 in which a tax payer has been allowed to
pay GST on a presumptive basis at the rate of 6% (3% CGST and 3% SGST).
• Benefit of this scheme is available on or after 01-04-2019 only in respect of
intra-state supplies of goods or services or both
• Traders, manufacturer, restaurant service providers who are eligible for
composition scheme (even if not opted) will not avail this benefit.
• Conditions:
Aggregate turnover in preceding F.Y foes not exceed Rs 50 lakh. In
aggregate turnover loan and deposit wali exemption ko nahi lenge exempt
supply ko include karte time.
He is not eligible to pay tax under composition scheme
He is not engaged in making any inter-state outward supply – neither of
goods nor of services.
He is not engaged in the business of making any supplies on which GST is
not leviable under this act( i.e. petroleum product and alcoholic liquor for
home consumption)
He is neither casual taxable person nor a non-resident taxable person.
He is not engaged in supply through E-commerce operator.
He is not engaged in making supplies of goods being (icre-cream and other
edible ice, whether or not containing cocoa, pan masala, tobacco and
manufactured tobacco substitutes)
• Applicable for all transactions of registered person with same PAN
• Presumptive tax not to be collected from recipient and ITC not admissible
• Bill of supply to be issued instead of tax invoice
• Tax is to be paid @6% on all outward supplies i.e. goods or services

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• Presumptive scheme not applicable for tax payable under reverse charge
• ITC to be reversed on switching to presumptive income.
• Rate of tax:
Description of supply Rate of Tax cannot exceed (% of Total rate of tax
turnover) cannot exceed
CGST SGST
First supplies of goods or 3% of the 3% of the 6% of the
services or both upto an aggregate aggregate aggregate
aggregate turnover of Rs turnover in the turnover in the turnover in the
50 lacs made on or after state or union state or union state or union
1st day of April in any territory territory territory
financial year, by a
registered person
Meaning of first supplies of goods or services or both –
(a) For the purpose of determining the eligibility of presumptive levy: From the 1st
day of April of a F.Y to the date from which he becomes liable for
registration
(b) For the purpose of payment tax: shall be after the date of registration.
RULES RELATING TO COMPOSITION AND PRESUMPTIVE LEVY
➢ Deemed intimation for composition in Part B of FORM GST REG-01
➢ Composition levy shall be effective from the beginning of the F.Y
➢ Furnish ITC declaration with 60days [ GST ITC – 03 ]
➢ Details of stock to be furnished within 90 days from the date of option [ GST
CMP – 03 ]
➢ Person exercising the option to pay tax under composition shall comply with
following conditions:
(a) neither a casual taxable person nor a non-resident taxable person
(b) goods held in stock by him have not been purchased from an unregistered
supplier and if purchased the he should in reverse charge basis.
(c) Pay tax on reverse charge basis
(d) Not engaged in supply of notified goods
(e) Not eligible to collect tax on supplies
(f) Composition taxable person on every notice or sign board
➢ Option valid till cessation
➢ Mandatory cessation of composition levy on violation of conditions in FORM GST
CMP-04 within 7 days
➢ Application for withdrawal from scheme in FORM GST CMP-04
➢ Denial of option to pay tax under the composition scheme by tax authorities –
issuance of SCN in FORM GST CMP-05 within 15 days

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➢ Reply to SCN in FORM GST CMP-06. Final order within 30 days of reply in FORM
GST CMP-07
➢ Details of stock to be furnished on opting out of such scheme – details of the
stock to be furnished within a period of 30 days
➢ Composition/presumptive to file return annually (GSTR 4) on or before 30th day of
June following the end of the F.Y and make payment quarterly (GST CMP-08) by
18th day of the month succeeding such quarter.

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CHAPTER – 4: PLACE OF SUPPLY

4.2 RELEVANT DEFINITIONS
Term Definitions
Place of supply It means the place of supply as referred to in Chapter V of the
Integrated Goods and Services Tax Act. [Section 2(86)]
Location of the It means,-
supplier of (a) where a supply is made from a place of business for which
services the registration has been obtained, the location of such place of
business;
(b) where a supply is made from a place other than the place of
business for which registration has been obtained (a fixed
establishment elsewhere), the location of such fixed
establishment;
(c) where a supply is made from more than one establishment,
whether the place of business or fixed establishment, the
location of the establishment most directly concerned with the
provisions of the supply; and
(d) in absence of such places, the location of the usual place of
residence of the supplier.
Broadly, it is the registered place of business or the fixed
establishment of the supplier from where the supply is made.
Sometimes, a service provider has to go to a client location for
providing service.
However, such place would not be considered as the location of
the supplier. It has to be either a regular place of business or a
fixed establishment, which is having sufficient degree of
permanence and suitable structure in terms of human and
technical resources.
Note: It must be noted that the term 'location of supplier of
goods' has not been defined in the Act.
Location of the It means,-
recipient of (a) where a supply is received at a place of business for which
services the registration has been obtained, the location of such place of
business;
(b) where a supply is received at a place other than the place of
business for which registration has been obtained (a fixed
establishment elsewhere), the location of such fixed
establishment;
(c) where a supply is received at more than one establishment,
whether the place of business or fixed establishment, the
location of the establishment most directly concerned with the
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receipt of the supply;

and
(d) in absence of such places, the location of the usual place of
residence of the recipient.
Note: it must be noted that the term 'location of recipient of
goods' has not defined in the Act.
Place of Includes-
business (a) a place from where the business is ordinarily carried on, and
includes a warehouse, a godown or any other place where a
taxable person stores his goods, supplies or receives goods or
services or both; or
(b) a place where a taxable person maintains his books of
account; or
(c) a place where a taxable person is engaged in business
through an agent, by whatever name called. [Section 2(85)]
Note: This is an inclusive definition and is applicable for both
goods and services.
Fixed It means a place (other than the registered place of business)
establishment which is characterised by a sufficient degree of permanence and
suitable structure in terms of human and technical resources to
supply services, or to receive and use services for its own needs.
Thus, following points are relevant-
(i) it is a place other than the registered place of business;
(ii) it has sufficient human and technical resources to supply and
receive services, thus it is also a place of business;
(iii) temporary presence of staff by way of a short visit at a
place cannot be called as fixed establishment;
(iv) the number of staff at a location is irrelevant and only the
adequacy of the arrangement of human and technical resources
to carry out the activities is to be considered;
(v) permanent nature of the arrangement and location need to be
considered.
Usual place of It means-
residence (a) in case of an individual, the place where he ordinarily
resides;
(b) in other cases, the place where the person is incorporated or
otherwise legally constituted. [Section 2(113)]
Address of It means the address of the recipient of goods or services or
delivery both indicated on the tax invoice issued by a registered person
for delivery of such goods or services or both. [Section 2(2)]
Address on It means the address of the recipient as available in the records
record of the supplie [Section 2(3)]
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4.3 INTER-STATE SUPPLIES [SECTION 7 OF THE IGST ACT, 2017]

According to Section 7 of the IGST Act, 2017, the broad principles for
determining the supply of goods and services in the course of inter state trade or
commerce are:
(1) With reference to goods:
Where 'location of the supplier' and 'place of supply' are in different States/
Union territories - Inter-State
Supply [Section 7(1):
➢ 'location of the supplier' and
➢ Supply of goods where-
➢ 'place of supply'
are in-
(a) two different States;
(b) two different Union territories; or
(c) a State and a Union territory,
shall be treated as a supply of goods in the course of inter-State trade or
commerce.
Section 7(1) is subject to the provisions of Section 10: Section 7(1) is subject to
the provisions of Section 10, it implies that the place of supply of goods shall be
determined as per Section 10 of the IGST Act and thereafter, Section 7(1) would
be applied.

Import of goods - Deemed to be inter-State Supply [Section 7(2)]: Supply of

goods imported into the territory of India, till they cross the customs frontiers of
India, shall be treated to be a supply of goods in the course of inter-State trade
or commerce.

Location of supplier of goods: Unlike in the case of services, location of supplier of

goods is a term that is not defined in the law. This is not an oversight of the
draftsmen but a deliberate intention of the lawmakers to leave it to the facts of
each case to determine the 'location of supplier of goods'.

The location of supplier of goods is more accurately determined by the physical

point where the goods are located under the control of the person wherever
incorporated or registered, ready to be supplied instead of relying on a
superfluous fact of the registered place of business.

(2) With reference to services:

Where 'location of the supplier' and 'place of supply' are in different States/
Union territories - Inter-State Supply [Section 7(3):

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Supply of services where-

➢ the location of the supplier, and
➢ the place of supply
are in-
(a) two different States;
(b) two different Union territories; or
(c) a State and a Union territory.
shall be treated as a supply of services in the course of inter-State trade or
commerce.

Section 7(3) is subject to the provisions of Section 12: Section 7(3) is subject to
the provisions of Section 12, it implies that the place of supply of services shall
be determined as per Section 12 of the IGST Act and thereafter, Section 7(3)
would be applied.

Import of service - Deemed to be inter-State supply [Section 7(4)]: Supply of

services imported into the territory of India shall be treated to be a supply of
services in the course of inter-State trade or commerce.

(3) Supply of goods where supplier located in India and the place of supply outside
India - Deemed to be inter-State supply [Section 7(5)(a)]: Supply of goods and/or
services, when the supplier is located in India and the place of supply is outside
india, shall be deemed to be a supply of goods and/or services in the course of
inter-State trade or commerce.

(4) Supply of goods/ and or services - to/by SEZ developer/ unit - Deemed to be
inter-State supply [Section 7(5)(b)]: Supply of goods and/or services to or by a
SEZ developer or an SEZ unit, shall be deemed to be a supply of goods and/or
services in the course of inter-State trade or commerce.

(5) Supply of goods/ and or services - Not being an intra-State supply - Deemed
to be inter-State supply [Section 7(5)(c)] : Supply of goods or services or both, in
the taxable territory, not being an intra-State supply and not covered elsewhere
in this Section, shall be treated to be a supply of goods or services or both in the
course of inter-State trade or commerce.

➢ Services of short-term accommodation, conferencing, banqueting etc. provided

to a SEZ developer/ SEZ unit will be treated as an inter-State supply.
➢ Supply of goods/ and or services - Not being an intra-State supply - Deemed
to be inter-State Supply: As per section 7(5)(b) of the IGST Act, the supply
of goods or services or both to a SEZ developer or a SEZ unit shall be
treated to be a supply in the course of inter-State trade or commerce.
➢ Services supplied in relation to immovable property - POS will be location of

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immovable property: However, as per section 12(3)(c) of the IGST Act, the
place of supply of services by way of accommodation in any immovable property
for organising any functions shall be the location at which the immovable
property is located. Thus, in such cases, if the location of the supplier and
the place of supply is in the same State/ Union territory, it would be treated
as an intra-State supply.
➢ Specific provision to prevail over general provision: It is an established principle
of interpretation of statutes that in case of an apparent conflict between two
provisions, the specific provision shall prevail over the general provision. In the
instant case, section 7(5)(b) of the IGST Act is a specific provision relating to
supplies of goods
➢ or services or both made to a SEZ developer or a SEZ unit, which states that
such supplies shall be treated as inter-State supplies. It is therefore,
clarified that services of short term accommodation. conferencing, banqueting
etc., provided to a SEZ developer or a SEZ unit shall be treated as an inter-
State supply.
- Circular No. 48/22/2018 GST dated 14-06-2018

4.4 INTRA-STATE SUPPLIES [SECTION 8 OF IGST ACT 2017]

As per Section 8 of the IGST Act, 2017, the broad principles for determining the
supplies of goods and/or services in the course of intra-State trade or commerce
are:
(1) With reference to supply of goods:
Where the location of the supplier and the place of supply are in the same State
or Union territory - Intra-State Supply [Section 8(1):
Supply of goods where-
➢ the location of the supplier, and
➢ the place of supply of goods are in the same State or same Union territory
shall be treated as intra-State supply.

Section 8(1) is subject to the provisions of Section 10: Section 8(1) is subject to
the provisions of Section 10, it implies that the place of supply of goods shall be
determined as per Section 10 of the IGST Act and thereafter, Section 8(1) would
be applied.

Intra-State supply - Exceptions: The following supply of goods shall not be

treated as intra-State supply, namely-
(i) supply of goods to or by a Special Economic Zone developer or a Special
Economic Zone unit;
(ii) goods imported into the territory of India till they cross the customs frontiers
of India; or
(iii) supplies made to a tourist referred to in Section 15.

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(2) With reference to supply of services:

Where 'location of the supplier' and 'place of supply' are in same State/ Union
territory - Intra- State supply [Section 8(2)]:

Supply of services where-

➢ the location of the supplier; and
➢ the place of supply of services
are in the same State or same Union territory shall be treated as intra-State
supply.
Section 8(2) is subject to the provisions of Section 12: Section 8(2) is subject to
the provisions of Section 12, it implies that the place of supply of services shall
be determined as per Section 12 of the IGST Act and thereafter, Section 8(2)
would be applied.
Exception: The intra-State supply of services shall not include supply of services
to or by a Special Economic Zone developer or a Special Economic Zone unit.

4.5 SUPPLIES IN TERRITORIAL WATERS [SECTION 9 OF IGST ACT, 2017]

Notwithstanding anything contained in this Act,-

(a) where the location of the supplier is in the territorial waters, the location of
such supplier; or
(b) where the place of supply is in the territorial waters, the place of supply,
shall, for the purposes of this Act, be deemed to be in the coastal State or
Union territory where the nearest point of the appropriate baseline is located.

4.6 PLACE OF SUPPLY OF GOODS OTHER THAN SUPPLY OF GOODS IMPORTED

INTO,OR EXPORTED FROM INDIA [SECTION 10]
Section Nature of Transction Place of Supply
Place of supply of goods in domestic transactions i.e within India: The place of
supply of goods, other than supply of goods imported into, or exported form India
,shall be as under,-
10(1)(a) Where the supply involves Location of the goods at the time
MOVEMENT OF GOODS, whether at which the movement of goods
by the supplier or by the recipient terminates for delivery to the
or by any other person, recipient.
Note: Thus, irrespective of the
number of states the goods pass
through during the course of its
journey, the state in which the
movement of goods terminates for
delivery to the recipient is the
place of supply of goods.
10(1)(b) Where the goods are delivered by ➢ It shall be deemed that the said

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the supplier to a recipient or any third person has received the

other person on the direction of a goods; and
third person, whether acting as an ➢ The place of supply of such
agent or otherwise, before or goods shall be the principal place
during movement of goods, either of business of such person.
by way of transfer of documents These transactions are also known
of title to the goods or otherwise, as Bill to Ship transactions.
10(1)(c) Where the supply does not involve Location of such goods at the time
movement of goods, whether by of delivery to the recipient.
the supplier or the recipient,
10(1)(ca) Where the supply of goods is
made to a person other than a
registered person, the place of
supply, notwithstanding anything
contrary contained in clause (a) or
(c)
(i) Where the address of the POS is location as per address of
unregistered person is unregistered person recorded in
recorded in the invoice the invoice
(ii) Where the address of the POS is location of the supplier
unregistered person is not
recorded in the invoice
10(1)(d) Where the goods are assembled or Place of such installation or
installed at site, assembly.
10(1)(e) Where the goods are supplied on Location at which such goods are
board a conveyance, including a taken on board.
vessel, an aircraft, a train or a
motor vehicle,
10(2) Where the place of supply of Shall be determined in such manner
goods cannot be determined, as may be prescribed.

It must be kept in mind that the provisions of section 10 discussed hereunder are
all in relation to domestic supply of goods.
4.7 PLACE OF SUPPLY OF SERVICES WHERE LOCATION OF SUPPLIER AND
RECIPIENT IS IN INDIA [SECTION 12 OF THE IGST ACT, 2017]

Section Nature of Transaction Place of Supply

12(1) Determination of the place of supply of services where the location of
supplier of services and the location of the recipient of services is in
India.
12(2) General provisions: The place of supply of services,-
(a) made to a registered person location of such person;
(b) made to any person other than a
registered person-

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(i) where the address on record exists, Address of such person

(ii) in other cases. the location of the supplier
of services
12(3) Services provided in relation to immovable property-
Services,- Location at which the
(a) directly in relation to an immovable immovable property or boat
property, including services provided by or vessel as the case may
architects, interior decorators,
be,is location or intended to
surveyors, engineers and other related be located.
experts or estate agents, any service
provided by way of grant of rights to
use immovable property or for carrying
out or co- ordination of construction
work; or
(b) by way of lodging accommodation by
a hotel, inn, guest house, home stay,
club or campsite, by whatever name
called, and including a house boat or any
other vessel; or
(c) by way of accommodation in any
immovable property for organising any
marriage or reception or matters related
thereto, official, social, cultural,
religious or business function including
services provided in relation to such
function at such property, or
(d) any services ancillary to the services
referred to in clauses (a), (b) and (c),
IF the location of the immovable Location of the recipient.
property or boat or vessel is located or
intended to be located outside India,
Explanation: Where the immovable property or boat or vessel is located
in more than one State or Union territory, the supply of services shall
be treated as made in each of the respective States or Union
territories, in proportion to the value for services separately collected
or determined in terms of the contract or agreement entered into in
this regard or, in the absence of such contract or agreement, on such
other basis as may be prescribed.
12(4) Restaurant and catering services, Location where the services
personal grooming, fitness, beauty actually performed.
treatment, health service including
cosmetic and plastic surgery
12(5) Services in relation to training and
performance appraisal to,-

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(a) a registered person, Location of such person;

(b) a person other than a registered Location where the services
person, are actually performed.
12(6) Services provided by way of admission to Place where the event is
a culture, artistic, sporting, scientific, actually held or where the
education, entertainment event or park or such other place is
amusement park and services ancillary located
thereto
12(7) Services provided by way of,-
(a) organisation of a cultural, artistic,
sporting, scientific, educational or
entertainment event including supply of
services in relation to a conference,
fair, exhibition, celebration or similar
events, or
(b) services ancillary to organisation of
any of the events or services referred
to in clause (a), or assigning of
sponsorship to such events.-
(i) to a registered person, Location of such person;
(ii) to a person other than a registered
person,
➢ If event is held in India Place where event is actually
held
➢ If event is hold outside India Location of the recipient
Explanation: Where the event is held in more than one State or Union
territory and a consolidated amount is charged for supply of services
relating to such event, the place of supply of such services shall be
taken as being in each of the respective States or Union territories in
proportion to the value for services separately collected or determined
in terms of the contract or agreement entered into in this regard or,
in the absence of such contract or agreement, on such other basis as
may be prescribed.
12(8) Services by way of transportation of goods, including by mail or courier
to,-
(a) to a registered person, Location of such person;
(b) to a person other than a registered Location at which such goods
person, are handed over for their
transportation.
12(9) Passenger transportation service to,-
(a) to a registered person, Location of such person;
(b) to a person other than a registered Place where the passenger
person, embarks on the conveyance
for a continuous journey.

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Where the right to passage is given for

future use and the point of embarkation
is not known at the time of issue of
right to passage,
(a) made to a registered person location of such person;
(b) made to any person other than a
registered person-
(i) where the address on record exists, the location of the recipient
(ii) in other cases. the location of the supplier
of services
Return Journey to be treated as a separate journey: The return
journey shall be treated as a separate journey, even if the right to
passage for onward and return journey is issued at the same time.
(Explanation)
"Continuous journey" means a journey for which a single or more than
one ticket or invoice is issued at the same time, either by a single
supplier of service or through an agent acting on behalf of more than
one supplier of service, and which involves no stopover between any of
the legs of the journey for which one or more separate tickets or
invoices are issued. [Section 2(3) of IGST Act, 2017]
"Stopover" means a place where a passenger can disembark either to
transfer to another conveyance or break his journey for a certain
period in order to resume it at a later point of time. [Explanation]
12(10) Services on board a conveyance, Location of the first
including a vessel, an aircraft, a train or scheduled point of departure
a motor vehicle, of that conveyance for the
journey.
12(11) Telecommunication services including data
transfer, broadcasting, cable and direct
to home television services to any person
shall,-
(a) in case of services by way of fixed Location where the
telecommunication line, leased circuits, telecommunication line,
internet leased circuit, cable or dish leased circuit or cable
antenna, connection or dish antenna is
installed for receipt of
services;
Where the leased circuit is installed in more than one State or Union
territory and a consolidated amount is charged for supply of services
relating to such circuit, the place of supply of such services shall be
taken as being in each of the respective States or Union territories in
proportion to the value for services separately collected or determined
in terms of the contract or agreement entered into in this regard or,
in the absence of such contract or agreement, on such other basis as

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may be prescribed. [Explanation]

(b) in case of mobile connection for Location of billing address
telecommunication and internet services of the recipient of services
provided on post- paid basis on the record of the
supplier of service,
(c) in cases where mobile connection for
telecommunication, internet service and
direct to home television services are
provided on pre- payment basis through a
voucher or any other means,-
(i) through a selling agent or a re-seller Address if the selling agent
or a distributor of subscriber identity or re-seller or distributor
module card or re-charge voucher, as per the record of the
supplier at the time of
supply ,or
(ii) by any person to the final Location where such
subscriber, prepayment is received or
such voucher are sold;
If such pre-paid service is availed or Location of the recipient of
the recharge is made through internet services on the record of
banking or other electronic mode of the supplier of service
payment,
(d) in other cases,
(i) If address of the recipient as per Address of the recipient as
the records of the supplier of services is per the record of the
available supplier of services and
(ii) where such address is not available, Place of supply shall be
location of the supplier of
services.
Where the address of the recipient as per the records of the supplier of services
is not available, the place of supply shall be the location of the supplier of
services. [Applicable for 12(11) (a) to (d) above]
"Telecommunication service" means service of any description (including electronic
mail, voice mail, data services, audio text services, video text services, radio
paging and cellular mobile telephone services) which is made available to users by
means of any transmission or reception of signs, signals, writing, images and
sounds or intelligence of any nature, by wire, radio, visual or other
electromagnetic means. [Section 2(110) of CGST Act, 2017]
12(12) Banking and other financial services, Location of the recipient of
including stock broking services to any services on the records of
person the supplier of services:
If the location of recipient of services Location of the supplier of
is not on the records of the supplier, services.

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12(13) Insurance services,-

(a) to a registered person, Location of the such person
(b) to a person other than a registered Location of the recipient of
person, service on the record of the
supplier of service
12(14) Advertisement services to the Central Place of supply shall be
Government, a State Government, a taken as being in each of
statutory body or a local authority such States or Union
meant for the States or Union territories
territories identified in the contract or Value of such supplies
agreement specific to each State or
Union territory shall be in
proportion to:
- amount attributable to
services provided by
way of dissemination in
the respective States
or Union territories as
may be determined in
terms of the contract
or agreement entered
regard, or
- in the absence of such
contract or agreement,
on such other basis as
may be prescribed.
into in this

It must be kept in mind that the provisions of section 12 discussed hereunder are
all in relation to the domestic supply of services.
Clarification –
(1) place of supply of service provided by way of supply of sale of space on
hoarding/structure for advertising or for grant of rights to use the
hoarding/structure for advertising in this case would be the location where
such hoarding/structure is located.
(2) Service provided by the vendor to advertising company are purely in the
nature of advertising services in respect of which place of supply shall be
determined in terms of section 12(2) of IGST Act.
Clarification on the provisions of Section 10(1)(ca) of the IGST Act, 2017 relating to place
of supply of goods to unregistered persons. – Circular No.209/3/2024-GST dated 26-06-
2024
Place of supply of goods (particularly being supplied through e-commerce platform) to
unregistered persons where billing address is different from the address of delivery of
goods –
Issue Clarification

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Mr. A (unregistered person) located in X As per the provisions of section 10(1)(ca) of

State places an order on an ecommerce IGST Act, where the supply of goods is
platform for supply of a mobile phone, which made to an unregistered person, the place
is to be delivered at an address located in Y of supply would be the location as per the
State. Mr. A, while placing the order on address of the said person recorded in the
the ecommerce platform, provides the billing invoice and the location of the supplier
address located in X state. In such a where the address of the said person is not
scenario, what would be the place of supply recorded in the invoice.
of the said supply of mobile phone, whether Further, as per Explanation to the said
the State pertaining to the billing address clause, recording the name of the State of
i.e. State X or the State pertaining to the the said unregistered person on the invoice
delivery address i.e. State Y? shall be deemed to be the recording of the
address of the said person. Accordingly, it
is clarified that in such cases involving
supply of goods to an unregistered person,
where the address of delivery of goods
recorded on the invoice is different from
the billing address of the said unregistered
person on the invoice, the place of supply of
goods in accordance with the provisions of
section 10(1)(ca) of IGST Act, shall be the
address of delivery of goods recorded on
the invoice i.e. State Y in the present case
where the delivery address is located.
Also, in such cases involving supply of goods
to an unregistered person, where the billing
address and delivery address are different,
the supplier may record the delivery
address as the address of the recipient on
the invoice for the purpose of determination
of place of supply of the said supply of
goods.

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CHAPTER – 5: EXEMPTION FROM GST

POWER OF GOVT [ SECTION 11 OF CGST/ SECTION 6 OF IGST ]

By way of issuance of

Notification Special order

• Exempt generally Exempt from payment of tax

• Either absolutely or subject to such under circumstances of an
conditions as may as specified exceptional nature to be stated
• Goods and/or services of any
in such order, in public interest.
specified description

LIST OF SERVICES EXEMPT FROM GST [ NOTIFICATION NO. 12/2017 ]

S.NO. LIST
SERVICES BY CHARITABLE INSTITUTION
(1) Services by charitable entity [ entry 1 ]
 Charitable activities by entity registered under 12AA or 12AB [
Amended by Finance Act 2021].
 Advancement of any other object of general public utility – not
charitable purpose
 GST on services provided to charitable trusts
 Service of display of name or placing of name plates of the donor in
the premises of charitable organisations receiving donations or gifts
from individual donors – if the same is not aimed at giving publicity to
the donor in such manner that it would be an advertising or promotion
of his business, it will not be leviable to GST.
(2) Recreational Training Or Coaching [Entry 80 ]
Services by way of training or coaching in –
a) Recreational activities relating to arts or culture, by an individual, or
b) Sports by charitable entities registered under section 12AB of the
Income Tax Act,
are exempt from tax.
(3) Import of services by charitable entity [ Entry 10 ]
(4) Services by an old age home [ Entry 9D]
 to a resident aged 60 years or more upto ₹ 25000 per month per
member.

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RELIGIOUS SERVICES
(5) Religious service [ Entry 13 ]
Services by a person by way of –
a. conduct of any religious ceremony;
b. renting of precincts of religious place meant for general public, owned
or managed by –
(i) an entity registered as a charitable or religious trust u/s 12AA of
the Income-tax Act,1961; or
(ii) a trust or an institution registered under Section 10(23C)(v) of the
Income-tax Act; or
(iii) a body or an authority covered under Section 10(23BBA) of the said
Income- tax Act, are exempt.
However, nothing contained in entry (b) of this exemption shall apply to,-
❖ renting of rooms where charges are ₹ 1,000 or more per day,
❖ renting of premises, community halls, kalyanmandapam or open area,
and the like where charges are ₹ 10,000 or more per day;
❖ renting of shops or other spaces for business or commerce where
charges are ₹ 10,000 or more per month.
(6) Services by a specified organisation in respect of a religious pilgrimage [
Entry 60 ]
Specifies organisation means Kumaon Mandal vikas nigam limited, Haj
committee
SERVICE RELATING TO AGRICULTURE OR AGRICULTURE PRODUCE
(7) Services relating to agriculture or agriculture produce [ Entry 54 ]
 Sab exempt except rearing of horses
 Processed tea, coffee, jiggery and pluses – not agriculture produce-
not exempt
(8) Carrying out an intermediary production process in relation to cultivation of
plant and rearing of all forms of animals [ Entry 55 ]
❖ Except the rearing of horses
❖ Milling of paddy into rice – not eligible for exemption – liable to GST
(9) Artificial insemination of livestock (other than horses) [ Entry 55A ]
(10) Loading, unloading packing, storage or warehousing of rice [ Entry 24 ]
(11) Warehousing of minor forest produce [ Entry 24A ]
(12) STORAGE OR WAREHOUSING OF CEREALS, PULSES ETC [Entry 24B ]
Services by way of storage or warehousing of cereals, pulses, fruits and
vegetables are exempt.
(13) Services in relation to fruits and vegetables [ Entry 57 ]
(14) Services provided by NCCD by way of cold chain knowledge dissemination [
Entry 58 ]

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EDUCATIONAL SERVICES
(15) Services to or by educational institution [ Entry 66 ]
Services provided by boarding schools – exempt
Services provided by international school – exempt
Private tuitions – taxable
Placement services provided to educational institutions – taxable
Campus recruitment fees – taxable
Institutions preparing students for competitive exams – taxable
Postal coaching covered – taxable
Foreign courses conducted by private institutes – taxable
Personality development institutes – liable to GST
College hostel mess – if provided by educational institution then
exempt catering services by third person is taxable
Services provided by industrial training institutes (ITI) is exempt.
DG shipping approved maritime courses conducted by maritime training
institute of India – exempt from GST
Services provided by IIM – short term courses (1 year) taxable, long
term courses – exempt.
Supply of food in Anganwadis and Schools – exempt from tax
Services of various services by National Board of Examination –
- services related to conduct of examination – exempt
- other services – taxable
Applicability of GST on application fee charged for entrance for the
fee charged for issuance of eligibility certificate for admission or for
issuance of migration certificate by educational institutions.
Accordingly, such activities of educational institution are also exempt.
NTA to be treated as Educational Institution
HEALTH CARE SERVICES
(16) Health care services [Entry 74 ]:
Services by way of :-
a) health care services by a clinical establishment, an authorised medical
practitioner or para-medics;
However, the above exemption shall not apply to the services provided by
a clinical establishment by way of providing room [other than Intensive
Care Unit (ICU) Critical Care Unit (CCU) Intensive Cardiac Care Unit
(ICCU) Neo natal Intensive Care Unit (NICU) having room charges
exceeding 5000 per day to a person receiving health care services.
b) services provided by way of transportation of a patient in an
ambulance, other than those specified in (a) above
are exempt.

Services in form of Assisted Reproductive Technology (ART)/ In vitro

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Fertilization (IVF) are exempt from GST.

GST is not leviable on consultancy charges payable to doctor, consultant
etc., retention money and food supplies to patient as advised by doctor.
Other supplies of food by a hospital to patients (not admitted) or their
attendants or visitor are liable to GST
(17) Services by recognised rehabilitation professionals [ Entry 74A ]
(18) Veterinary services [ Entry 46 ]
SERVICES PROVIDED BY GOVERNMENT
(19) Services by government authority in relation to municipality functions [
Entry 4 ]
Applicability of GST on the statutory collections made by the Real Estate
Regulatory Authority (RERA) in accordance with the Real Estate (Regulation and
Development) Act, 2016. — Circular No. 228/22/2024-GST dated 15-07-2024
Issue: Whether GST is applicable on the statutory collections made by the Real
Estate Regulatory Authority (RERA).
Clarification: RERA is constituted under the Real Estate (Regulation and
Development) Act, 2016.
RERA performs function of regulating the real estate development and
construction of the building entrusted to them which fall under Entry No. 1 and 2
of the Twelfth Schedule of the Indian Constitution.
RERA is a 'governmental authority' as per the definition in the exemption
notification No.12/2017-CT(R) dated 28-06-2017 and is covered under the scope
of entry at Si. No. 4 of notification No. 12/2017-CT(R) dated 28-06-2017.
Thus, it is hereby clarified that statutory collections made by RERA are covered
under the Sl. No. 4 of notification No. 12/2017-CT(R) dated 28-06-2017 and
hence exempt from tax.
(20) Services by government authority in relation to panchayat functions [ entry
5 ]
(21) SOVEREIGN SERVICES BY THE CENTRAL GOVERNMENT STATE
GOVERNMENT UNION TERRITORY OR LOCAL AUTHORITY [Entry 6]:
Services by the Central Government, State Government, Union Territory or
local authority excluding the following services :-
a) Services by the Department of posts and the Ministry of Railways
(Indian Railways)
b) Services in relation to an aircraft or a vessel, inside or outside the
precincts of a port or airport;
c) Transport of goods or passenger; or
d) Any service, other than services covered under entries (a) to (C) above,
provided to business entities,

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are exempt.
Services provided by Department of Post :
Exempt services :- the following services provided by the Department of
posts are not liable to tax-
➢ basic mail services by the Department of Post by way of post card,
inland letter, book post and ordinary post (envelopes weighing less
than 10 grams) to meet the universal postal obligations vide entry
24C of Notification No. 12/2017- CT (Rate).
➢ Transfer of money through money order, operation of savings
accounts, issue of postal order, pension payments and other such
services.
Registered post, Speed Post etc. - Taxable :- The services by way of
ordinary post (envelopes weighing 10 grams or more), registered post,
Speed Post, Express parcel post, life insurance and Agency services
provided to a peron other than the Government or union territory are not
exempt. In respect of these services the Department of Posts is liable to
pay tax without application of revere charge.
Agency services - Taxable: The Department of Posts also provides services
like distribution of mutual funds, bonds, passport applications, collection of
telephone and electricity bills on commission basis. The services are in the
nature of intermediary and generally called agency services. In these
cases, the Department of posts is liable to pay tax without application of
reve₹e charge.
Applicability of GST on accommodation services supplied by Air Force Mess and
other similar messes to its personnel. - Circular No. 190/02/2023- GST dated
13-1-2023
Issue Clarification
Is GST leviable It is hereby clarified that accommodation services provided
on by Air Force Mess and other similar messes, such as, Army
accommodation mess, Navy mess, Paramilitary and Police forces mess to
services supplied their personnel or any person other than a business entity
by Air Force are covered by Sl. No. 6 of Notification No. 12/2017-CT
Mess to its (Rate), dated 28-6-2017 provided the services supplied by
personnel such messes qualify to be considered as services supplied by
Central Government, State Government, Union Territory or
local authority.

(22) SERVICES PROVIDED BY GOVERNMENT/UT OR A LOCAL AUTHORITY

TO A BUSINESS ENTITY HAVING AGGREGATE TURNOVER BELOW THE

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THRESHOLD LIMIT IN PRECEDING FY - EXEMPT [Entry 7] :

Services provided by the Central Government, State Government, Union
Territory or local authority to a business entity with an aggregate turnover
of up to such amount in the preceding financial year as makes it eligible
for exemption from registration under the CGST Act, 2017 are exempt.
Explanation : The provisions of this entry shall not be applicable to –
a) Services,-
i. by the Department of posts and the Ministry of Railways (Indian
Railways)
ii. in relation to an aircraft or a vessel, inside or outside the
precincts of a pot or an airport ;
iii. or transport of goods or passenger ; and
b) Services by way of renting of immovable property.
(23) SERVICES PROVIDED BY GOVERNMENT OR A LOCAL AUTHORITY TO
ANOTHER GOVERNMENT OR A LOCAL AUTHORITY [Entry 8]:
Services provided by the Central Government, State Government, Union
Territory or local authority to another Central Government, State
Government, union territory or local authority are exempt.
However, nothing contained in this entry shall apply to services –
by the Department of posts and the Ministry of Railways (Indian
Railways)
in relation to an aircraft or a vessel, inside or outside the precincts of
a pot or an airport ;
or transport of goods or passenger.
(24) SERVICES PROVIDED BY GOVERNMENT OR UT OR LOCAL AUTHORITY
WHERE THE CONSIDERATION FOR SUCH SERVICES DOES NOT
EXCEED ₹.5000 [Entry 9 ]:
Services provided by Central Government, State Government, Union
Territory or local authority where the consideration for such service s
does not exceed ₹ 5000 are exempt.
However, nothing contained in this entry shall apply to :-
• Services by the Department of posts and the Ministry of Railways
(Indian Railways)
• in relation to an aircraft or a vessel, inside or outside the precincts of
a pot or an airport ;
• or transport of goods or passenger.

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Continuous supply of service : In case where continuous supply of service,

as defined in section 2(33) of the CGST Act, 2017, is provided by the
Central Government, State Government, Union Territory or local authority,
the exemption shall apply only where the constitution charged for such
services does not exceed ₹5000 in a financial year.
(26) SERVICES BY MINISTRY OF RAILWAYS (INDIAN RAILWAYS) TO
INDIVIDUALS [ENTRY 9E] [ Inserted by notification no. 04/2024-CT (rate)
dated 12/7/2024 w.e.f. 15/7/2024]
Services provided by Ministry of Railways (Indian Railways) to individuals by way
of—
(a) sale of platform tickets;
(b) facility of retiring rooms/waiting rooms;
(c) cloak room services;
(d) battery operated car services, are exempt.
(27) INTER ZONE/ DIVISION SERVICES UNDER MINISTRY OF RAILWAYS
(INDIAN RAILWAYS) [ENTRY 9F] [ Inserted by notification no. 04/2024-CT
(rate) dated 12/7/2024 w.e.f. 15/7/2024]
Services provided by one zone/division under Ministry of Railways (Indian Railways)
to another zone(s)/ division(s) under Ministry of Railways (Indian Railways) are
exempt.
(28) SERVICES PROVIDED BY SPVS TO MINISTRY OF RAILWAYS (INDIAN
RAILWAYS) [ENTRY 9G] [ Inserted by notification no. 04/2024-CT (rate) dated
12/7/2024 w.e.f. 15/7/2024]
Services provided by Special Purpose Vehicles (SPVs) to Ministry of Railways
(Indian Railways) by way of allowing Ministry of Railways (Indian Railways) to use
the infrastructure built and owned by them during the concession period against
consideration and services of maintenance supplied by Ministry of Railways (Indian
Railways) to SPVs in relation to the said infrastructure built and owned by the
SPVs during the concession period against consideration are exempt.
(29) SERVICES OF POSTCARD INLAND LETTER ETC. BY POSTAL
DEPARTMENT [Entry 24C]:
Services by the Department of posts by way of postcard, Inland Letter,
book post and ordinary post (envelopes weighing less than 10 grams) are
exempt from tax.
(30) Services by way of guaranteeing of loans taken by government undertaking
or PSU’s from the banking companies and FI’s [ Entry 34A ]
(31) Services provided by government or UT or local authority by way of
registration Etc. [Entry 47 ] (registration under any law, testing,
calibration, safety check or certification)
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(32) Services provided to individuals – issuance of passport, visa, driving

certificate, birth certificate, death certificate etc. [ Entry 61 ]
(33) Services by way of granting National Permit to a goods carriage to operate
through-out India/ contiguous states [Entry 61A ]
(34) Services by way of tolerating non performance of a contract [ Entry 62 ]
(fines or liquidated damages)
(35) Services by way of assignment of right to use natural resources to an
individual farmer for the purpose of agriculture [ Entry 63 ]
Royalty payable to the government for assignment of rights to use natural
resources is covered under GST
(36) Merchant overtime charges [ Entry 65 ]
(37) State government services to excess royalty collection contractor [ Entry
65B ]
SERVICES PROVIDED TO GOVERNMENT
(38) Pure services to government/UT/local authority in relation to panchayat
functions/municipal function [ Entry 3 ]
(39) Composite supply to government/UT/Local authority in relation to
panchayat functions/municipal functions – exempt if value of goods is not
more than 25% of total value [ Entry 3A ]
Sanitation and Conservancy services supplied to Army and other Central
and State government departments liable to GST.
(40) Services provided to a government authority by way of [Entry 3B] –
(a) water supply;
(b) public health;
(c) sanitation conservancy;
(d) solid waste management; and
(e) slum improvement and upgradation.
(41) Supply of service by a government entity to government, UT, Local
authority in form of grants [ Entry 9C]
(42) Service provided by fair price shops to government/UT [ Entry 11A ]
(43) Services provided to government/UT’s under any insurance scheme for
which total premium is paid by the government or UT’s[ Entry 40 ]
(44) Service provided to government to government/UT’s under any training
programme for which 75% or more of the total expenditure is borne by
the government/UT’s [ Entry 72 ]
Coaching services supplied by coaching institutions and NGOs under the
central sector scheme of ‘Scholarships for students with Disabilities’ are
exempt from GST
CONSTRUCTION SERVICES
(45) Pure labour contracts pertaining to the beneficiary-LED individual house

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construction or enhancement under the housing for all the (URBAN) mission
or pradhan mantri awas yojana [ Entry 10 ]
(46) Services supplied by electricity distribution utilities for extending
electricity distribution network upto the tube well of the farmer or
agriculturalist for agriculture use [ Entry 10A ]
(47) Pure labour contract pertaining to a single residential unit [ Entry 11 ]
(otherwise than as a part of residential complex)
(48) Transfer of development rights and FSI for construction of residential
apartments [ Entry 41 ]
Before completion certificate toh exempt
After completion raha toh promoter ko revere charge me pay karna
hoga on unsold flat.
(49) Long term lease for construction of residential apartment [ Entry 41B ]
Before completion certificate toh exempt
After completion raha toh promoter ko reverse charge me pay karna
hoga on unsold flat.
PASSENGER TRANSPORTATION SERVICES
(50) TRANSPORT OF PASSENGER BY DIFFERENT MODES [Entry 15 ]
Transport of passenger, with or without accompanied belongings, by –
a) air in economy class, 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 ; or
b) non-air conditioned contract carriage other than radio taxi, for
transportation of passenger, excluding tourism, conducted tour, charter
or hire; or
c) stage carriage other than air-conditioned stage carriage
are exempt.
However, nothing contained in (B) and (C) above shall supplied through an
electronic Commerce operator, and notified u/s 9(5) of the CGST Act,
2017.
However, nothing contained in items (b) and (c) above shall apply to
services supplied through an electronic commerce operator (ECO), and
notified under section 9(5) of the CGST, 2017. Services referred herein
are the services by way of transportation of passenger by a radio-taxi,
motarcab, maxicab, motor cycle, omnibus or any other motor vehicle, the
tax on supplies of which shall be paid by the CEO if such services are
supplied through ECO.
Where transportation takes place over pre-determined route on a pre-
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determined scheduled in non air conditioned contract carriage same will

be exempt from GST.
(51) VG funding amount received by airline operator under RCS [ Entry 16 ]
(52) Transportation of passenger by different modes [ Entry 17 ]
Service of transportation of passenger, with or without accompanied
belongings, by-
(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
vessel between places located in India and
(e) metered cabs or auto rickshaws ( including e-rickshaws)
are exempt.
▪ Services provided by leisure or charter vessels or a cruise ship –
taxable
▪ Transport of passenger by ropeway, cable car or aerial tramway is
liable to GST.
▪ GST is exempt on tickets purchased for transportation from one point to
another irrespective of whether the ferry is owned or operated by a
private sector enterprise or by a PSU/ Government.
However, nothing contained in items (b) and (c) above shall apply to
services supplied through an electronic commerce operator (ECO), and
notified under section 9(5) of the CGST, 2017. Services referred herein
are the services by way of transportation of passenger by a radio-taxi,
motarcab, maxicab, motor cycle, omnibus or any other motor vehicle, the
tax on supplies of which shall be paid by the CEO if such services are
supplied through ECO
GOODS TRANSPORT AGENCY
(53) Transportation of goods by different modes [ Entry 18 ]
Services by way of transportation of goods –
(a) By road except the services of –
(i) A GTA
(ii) A courier agency (express cargo service, angadia)
(b) By inland waterways
Are exempt.
(54) Services by way of transportation of goods by an aircraft [ Entry 19 ]
From a place outside india to custom port in India
(55) Air freight for export goods [ Entry 19A ]
Nothing contained in this entry shall apply after 30-9-2022

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(56) Sea freight for export goods [ Entry 19B ]

Nothing contained in this entry shall apply after 30-9-2022
(57) SATELLITE LAUNCH SERVICES [ ENTRY 19C ]
Satellite launch services are exempt
(58) TRANSPORTATION OF CERTAIN GOODS BY RAIL OR VESSEL [Entry
20]
Services by way of transportation by rail or a vessel from one place in
India to another of the following goods-
a) relief materials meant for victims of natural or man-made disaster,
calamities, accidents or mishaps;
b) defence or military equipments;
c) newspaper or magazines registered with the Registrar of Newspaper;
d) agricultural produce;
e) milk, salt and food grain including flour, pulses and rice; and
f) organic manure
are exempt.
(59) SERVICES PROVIDED BY A GOODS TRANSPORT AGENCY [Entry 21]
Services provided by a goods transport agency, by way of transport in a
goods carriage of –
a) agricultural produce;
b) milk, salt and food grain including flour, pulses and rice;
c) organic manure;
d) newspaper or magazines registered with the Registrar of Newspaper;
e) relief materials meant for victims of natural or man-made disaster,
calamities,
accidents or mishap; or
f) defence or military equipments
are exempt.
Transport of minerals from mining pit head to railway siding,
beneficiation plant etc., by vehicles deployed with driver for a specific
duration of time - liable to GST under Rental services of transport
vehicles with operator.
(60) Services provided by a GTA to an unregistered person [ Entry 21A ]
Other than
(a) Any factory registered under factories act
(b) Any society registered under society registration act
(c) Any co-operative society
(d) Any person registered under GST
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(e) Any body co-operative

(f) Any partnership firm including AOP
(g) Any casual taxable person
Are exempt
(61) Service provided by a GTA to persons registered for TDS [ Entry 21B ]
BANKING AND FINANCIAL SERVICES
(62) Services by way of extending deposits, loans or advances/inter se sale or
purchase of foreign currency amongst banks or authorized dealer [ Entry
27 ]
• interest involved in credit card services is taxable
• Service charges or administrative charges is taxable
• Charges for late payment of outstanding dues on credit card is
taxable
• Processing fees is liable for gst
• Interchange fees on card settlement is liable for gst
Clarification regarding taxability of the transaction of providing loan by an
overseas affiliate to its Indian affiliate or by a person to a related person. —
Circular No.218/12/2024-GST dated 26-06-2024
Issue: Whether the activity of providing loans by an overseas affiliate to its
Indian affiliate or by a person to a related person, where there is no
consideration in the nature of processing fee/ administrative charges/ loan
granting charges etc., and the consideration is represented only by way of
interest or discount, will be treated as a taxable supply of service under GST
or not.
Clarification:
(i) As per Section 7(1)(c) of the CGST Act, read with Schedule I of CGST
Act, supply of goods or services or both between related persons, when
made in the course or furtherance of business, shall be treated as supply,
even if made without consideration. Therefore, it is evident that the
service of granting loan/ credit/ advances by an entity to its related entity
is a supply under GST.
(ii) Services by way of 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) are exempted under sub entry (a)
of entry 27 of Notification No. 12/2017Central Tax (Rate). Therefore, it
is clear that the supply of services of granting loans/ credit/ advances, in
so far as the consideration is represented by way of interest or discount,
is fully exempt under GST.
(iii) It is mentioned that overseas affiliates or domestic related persons are
generally charging no consideration in the form of processing fee/ service
fee, other than the consideration by way of interest or discount on the
loan amount.
Doubts are being raised regarding the taxability of the services of
processing/ administering/ facilitating the loan in such cases, by deeming

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the same as supply as per Section 7(1)(c) of the CGST Act, read with
Schedule I of CGST Act. The processing fee/ service fee is generally a
one-time charge that lenders levy on applicants when they apply for a loan.
This fee is generally non-refundable and is used to cover the administrative
cost of processing the loan application. Charges of any other nature in
respect of loan, other than by way of interest or discount, would represent
taxable consideration for providing the facilitation/ processing/
administration services for the loan and hence would be liable to GST.
(iv) It is significant to note that the processing/ service fee is generally
charged by the bank/ financial institution from the recipient of the loan in
order to cover the administrative cost of processing the loan application. An
independent lender may carry out a thorough credit assessment of the
potential borrower to identify and evaluate the risks involved and to
consider methods of monitoring and managing these risks. Such credit
assessment may include understanding the business of the applicant, as well
as the purpose of the loan, financial standing and credibility of the
applicant, how it is to be structured and the source of its repayment which
may include analysis of the borrower’s cash flow forecasts, the strength of
the borrower’s balance sheet, and where any collateral is offered, due
diligence on the collateral offered may also be required to be carried out.
To cover such costs, the independent lender generally collects a fee that is
in the nature of processing fee/ administrative charges/ service fee/ loan
granting charges, which is leviable to GST.
(v) However, when an entity is extending a loan to a related entity, it may not
require to follow such processes as are followed by an independent lender.
For example, it may not need to go through the same process of
information gathering about the borrower’s business, his financial standing
and credibility and other details, as the required information may already
be readily available within the group, or between related persons. The
lender may not also take any collateral from the borrower. Accordingly, in
case of loans provided between related parties, there may not be the
activity of ‘processing’ the loan, and no administrative cost may be involved
in granting such a loan. Therefore, it may not be desirable to place the
services being provided for processing the loans by banks or independent
lenders vis-a-vis the loans provided by a related party, on equal footing.
(vi) Even in case of loans provided between unrelated parties, there may not be
any processing fee/ administrative charges/ loan granting charges etc.,
based on the relationship between the bank/ independent lender and the
person taking the loan. The lender might waive off the administrative
charges in full, based on the nature and amount of loan granted, as well as
based on the relationship between the lender and the concerned person
taking the loan.
(vii) Accordingly, in the cases, where no consideration is charged by the person
from the related person, or by an overseas affiliate from its Indian party,
for extending loan or credit, other than by way of interest or discount, it
cannot be said that any supply of service is being provided between the said

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related persons in the form of processing/ facilitating/ administering the

loan, by deeming the same as supply of services as per Section 7(1)(c) of
the CGST Act, read with Schedule I of CGST Act. Accordingly, there is no
question of levy of GST on the same by resorting to open market value for
valuation of the same as per rule 28 of CGST Rules, 2017.
(viii) However, in cases of loans provided between related parties, wherever
any fee in the nature of processing fee/ administrative charges/ service
fee/ loan granting charges etc. is charged, over and above the amount
charged by way of interest or discount, the same may be considered to be
the consideration for the supply of services of processing/ facilitating/
administering of the loan, which will be liable to GST as supply of services
by the lender to the related person availing the loan.

(63) Services provided to BSBD A/C holder under PMJDY [ Entry 27A ]
(64) Credit card, debit card, charge card or other payment card service –
exempt upto ₹ 2000 per transaction [ Entry 34 ]
(65) Services provided by financial intermediaries located in IFSC SEZ [ Entry
39A ]
LIFE INSURANCE SERVICES
(66) Life insurance services under NPS [ Entry 28 ]
(67) Life insurance services to member of the ARMY, NAVY and AIR FORCE [
Entry 29 ]
(68) Life insurance services to coast guard personnel [ Entry 29A ]
(69) Life insurance services to central armed police force [ Entry 29B ]
(70) Life insurance services [ Entry 36 ]
 Life Micro insurance product maximum amount of ₹ 200000
SERVICES PROVIDED BY SPECIFEID BODIES
(71) ESI services [ Entry 30 ]
(72) EPF services [ Entry 31 ]
(73) Services by coal mines provident fund organisation [ Entry 31A]
(74) Services by national pension fund (NPS) trust [ Entry 31B ]
GENERAL INSURANCE SERVICES
(75) General insurance services [ Entry 35 ]
(76) Re-insurance services [ Entry 36A ]
Applicability of GST on retrocession services. — Circular No. 228/22/2024-GST
dtd 15-7-2024
Issue Clarification
Whether the term As per the IRDAI (Re-insurance) Regulations, 2018,
'reinsurance' as 'Retrocession' means a re-insurance transaction
mentioned in Sl. No. whereby a part of assumed reinsured risk is further
36A of Notification No. ceded to another Indian Insurer or a CBR (Cross
12/2017-CT(R) dated Border Reinsurer). It is hereby clarified that the

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28-06-2017 includes term 'reinsurance' as mentioned in Sl. No. 36A of

'retrocession'. notification No. 12/2017CT(R) dated 28.06-2017
includes 'retrocession' services.
PENSION SCHEMES
(77) Collection of contribution under ATAL PENSION YOJANA (ATY) [ Entry
37 ]
(78) Collection of contribution under pension scheme of state government [
Entry 38 ]
BUSINESS FACILITATOR/CORRESPONDENT
(79) Business facilitator/ correspondent [ Entry 39 ]
Services by the following persons in respective capacities
(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
are exempt.
LEASING SERVICES
(80) Upfront amount payable in respect or service by way of granting of long
term lease of industrial plots or plots for development of infrastructure
for financial business [ Entry 41 ]
LEGAL SERVICES
(81) Legal services [ Entry 45 ]
Service provided by –
(a) An arbitral tribunal to ✓ any person other than a business
- entity; or
✓ a business entity with an aggregate
turnover up to such amount in the
preceding financial year as makes it
eligible for exemption from
registration under the CGST Act,
2017; or
✓ the Central Government, State
Government, Union territory, local
authority, Governmental Authority or
Government Entity;
(b) A partnership firm of ➢ an advocate or partnership firm of
advocates or an advocates providing legal services;
individual as an ➢ any person other than a business
advocate other than a

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senior advocate, by way entity; or

of legal services to - ➢ a business entity with an aggregate
turnover up to such amount in the
preceding financial year as makes it
eligible for exemption from
registration under the CGST Act,
2017; or
➢ the Central Government, State
Government, Union territory, local
authority, Governmental Authority or
Government Entity;
(c) A senior advocate by ❖ any pe₹on other than a business
way of legal services to entity; or
- ❖ a business entity with an aggregate
turnover up to such amount in the
preceding financial year as makes it
eligible for exemption from
registration under the CGST Act,
2017;
❖ the Central Government, State
Government, Union territory, local
authority, Governmental Authority or
Government Entity;
Are exempt.
(82) SPONSORSHIP OF SPORTS
Services by way of sponsorship of sporting events organised are exempt
SKILL DEVELOPMENT SERVICES
(83) Services provided by national skill development corporation/sector skill
council/assessment agency/training partner [ Entry 69 ]
(84) Services provided by assessing bodies by way of assessments under the
skill development initiative scheme [ Entry 70 ]
(85) Services provided by training provider under DEEN DAYAL UPADHYAYA
GRAMEEN KAUSHALYA YOJANA [ Entry 71 ]
PERFORMANCE BY ARTIST
(86) Art related services [ Entry 78 ]
Performance in folk or classical art forms of music, dance, theatre, if
consideration does not exceed ₹ 150000. But does not include brand

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ambassador services.
RIGHT TO ADMISSION TO VARIOUS EVENTS
(87) Services by way of admission to museum, national park, wildlife sanctuary,
tiger reserve, zoo [ Entry 79 ]
(88) Services by way of admission to protected monument [ Entry 79A ]
(89) Admission to entertainment events or access to amusement facilities [
Entry 81 ]
Not more than ₹ 500 per person
Valuation in case of entry to casinos and gambling services, GST is
leviable.
Elephant/ camel joy rides – not covered under passenger
transportation service hence taxable
SERVICES BY UNINCOPRATED BODY OR NON-PROFIT ENTITY
(90) Services by an unincorporated body or a non-profit entity to member [
Entry 77 ]
Service by an unincorporated body or a non- profit entity registered under
any law for the time being in force, to its own member 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 ₹ 7,500 per month per member for sourcing of
goods or services from a third person for the common use of its
member in housing society or a residential complex,
are exempt.
[ RWA ka agar aggregate turnover ₹ 20 lakh or less hai and contribution ₹
7500 se jayada hai toh GST lagega ]
(91) Services by an unincorporated body or a non-profit entity to member [
Entry 77A]
Agriculture se related hai and ₹ 1000 per member per year are exempt.
OTHER EXEMPT SERVICES
(92) Transfer of going concern [ Entry 2 ]
(93) SUPPLY OF SERVICES ASSOCIATED WITH TRANSIT CARGO TO NEPAL
AND BHUTAN (LANDLOCKED COUNTRIES) [Entry 9B ]
Supply of services associated with transit cargo to Nepal and Bhutan
(landlocked countries) are exempt.
Whether exemption under Sl. No. 9B of Notification No. 12/2017-CT
(Rate) dated 28-06-2017 cover services associated with transit cargo
both to and from Nepal and Bhutan
Issue Clarification

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Applicability of GST on It is also clarified that movement

transportation of empty container of empty container from Nepal and
returning from Nepal and Bhutan Bhutan, after delivery of goods
after delivery of transit cargo, to there, is a service associated with
India. the transit cargo to Nepal and
Bhutan and is therefore covered by
the exemption.
(94) RENTING OF RESIDENTIAL DWELLING FOR USE AS RESIDENCE
[Entry 12 ]
Services by way of renting of residential dwelling for use as residence
except where the residential dwelling is rented to a registered person
are exempt.
Explanation: Services by way of renting of residential dwelling to a
registered person where, -
(i) the registered person is proprietor of a proprietorship concern
and rents the residential dwelling in his personal capacity for
use as his own residence; and
(ii) such renting is on his own account and not that of the
proprietorship concern shall be exempt.
Shall be exempt.
Explanation 2: Nothing contained in this entry shall apply to –
(a) accommodation services for students in student residences;
(b) accommodation services provided by Hostels, Camps, Paying Guest
accommodations and the like. [ inserted by notification no. 04/2024-CT
(rate) dated 12/7/2024 w.e.f. 15/7/2024]
Note: tax on renting of residential dwelling to a registered person us
payable by the registered person under reverse charge whether such
residential dwelling is being used for commercial purposes or residential
purposes.
(95) SUPPLY OF ACCOMMODATION SERVICES [ENTRY 12A] [ inserted by notification
no. 04/2024-CT (rate) dated 12/7/2024 w.e.f. 15/7/2024]
Supply of accommodation services having value of supply less than or equal to ₹
20,000 per person per month provided that the accommodation service is supplied
for a minimum continuous period of 90 days are exempt.
(96) Hiring of means of transport of passenger and goods [ Entry 22 ]
▪ To GTA
▪ To state transport undertaking meant to carry more than 12
passenger
▪ To a local authority, an electrically operated vehicle meant to carry

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more than 12 passenger

▪ To transport of student, faculty, staff
(97) Access to a road or a bridge on payment of toll charges [ Entry 23 ]
Overloading charges at toll plaza – same is exempt from GST
Additional toll fees collected in the form of higher toll charges from
vehicles not having fastag is exempt from GST.
(98) Transmission or distribution of electricity by an electricity transmission or
distribution utility [ Entry 25 ]
(99) Technology business incubate services [ Entry 44 ]
Turnover not exceeding ₹ 50 lakh and period of 3 year has not elapsed
(100) Services by TBI/STEP/BIO-INCUBATOR [ Entry 48 ]
(101) News agency service [ Entry 49 ]
(102) Service of public libraries [ Entry 50 ]
(103) Organising business exhibition outside India [ Entry 52 ]
(104) Services by foreign diplomatic mission [ Entry 59 ]
(105) Information under RTI Act [ Entry 65A ]
(106) Sports related services [ Entry 68 ]
Individual as player, referee, coach or team manager and another
recognized sports body.
(107) Public conveniences [ Entry 76 ]
LIST OF SERVICES EXEMPT FROM IGST
(108) Import of services [ Entry 10 ]
(109) Services received by RBI from outside India in relation to
management of foreign exchange reserves [ Entry 42 ]
(110) TOUR OPERATOR SERVICES SUPPLIED TO FOREIGN TOURIST [Entry
52A ]
Tour operator service, which is performed partly in India and partly
outside India, supplied by a tour operator to a foreign tourist, to the
extent of the value of the tour operator service which is performed
outside India shall be exempt from tax.
Value of services performed outside India: Value of the tour operator
service performed outside India shall be lower of the following-
a) Total consideration charged for the entire tour x Number of days for
which the tour is performed outside India ÷ Total number of days
comprising the tour, or
b) 50% of the total consideration charged for the entire tour.
In making the above calculations, any duration of time equal to or
exceeding 12 hour shall be considered as one full day and any duration of
time less than 12 hour shall be taken as half a day.
"Foreign tourist" means a person not normally resident in India, who ente₹

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India for a stay of not more than six months for legitimate non- immigrant
purposes.
Illustrations: A tour operator provides a tour operator service to a foreign
tourist as follows:-
a) 3 days in India, 2 days in Nepal; Consideration Charged for the entire
tour: 1,00,000.
Exemption: ₹ 40,000 (₹1,00,000 x 2 ÷ 5) or, 50,000 (50% of ₹
1,00,000) whichever is less, i.e. 40,000. Taxable value: ₹ 60,000.
b) 2 days in India, 3 nights in Nepal; Consideration Charged for the entire
tour: ₹ 1,00,000.
Exemption: ₹ 60 000 (₹ 1,00,000 × 3÷5) or ₹50,000 (50% of
₹1,00,000) whichever is less, i.e. 50,000. Taxable value: ₹ 50,000.
c) 2.5 days in India, 3 days in Nepal; Consideration Charged for the
entire tour: ₹1,00,000.
Exemption: 54,545 (₹ 1,00,000 × 3 ÷ 5.5) or, ₹ 50,000 (50% of ₹
1,00,000) whichever is less, i.e. ₹ 50,000. Taxable value: ₹ 50,000 .
(111) Export of services to own establishment outside India provided place of
supply outside India [ Entry 10 F ]
(112) Import of services by UN or specified international organisation [ Entry
10G ]
(113) Import of services by foreign diplomatic mission or consular post in India [
Entry 10H ]
(114) Intermediaries services [ Entry 12AA ]
OTHER EXEMPTIONS
(116) Intra-state supplies received by a tax deductor from any unregistered
supplier exempt from CGST
(117) Services imported by Unit/developer in SEZ exempt from IGST
(118) Government share of profit from grant of licence/lease to explore or mine
petroleum crude or natural gas – exemption from tax
(119) Royalty and licence fee included in transaction value under rule 10(1)(c) of
custom valuation rules – exemption from IGST
Clarifications:-
1. GST on delayed payment charges in case of late payment of Equated Monthly
Insatlments (EMI): - transaction of levy of additional/penal interest does not
fall within the entry 5(e) of schedule II of the CGST Act as this levy of
additional/ penal interest satisfies the definition of “interest” as contained in
exemption notification.

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CHAPTER – 6: TIME OF SUPPLY

TIME OF SUPPLY OF GOODS
[ INVOICE PROVISION (SECTION 31)]

Time limit for issuance of Issuance of Goods sent on

invoice in case of supplier of invoice in case of approval
goods: before or at the time continuous supply  Before or at
of of goods before the time of
▪ Removal of goods where or at the time supply or
supply involves movement  Statement of  6 months from
of goods account or the date of
▪ in any other case,  Successive removal
delivery of goods or payment Whichever is
making available to earlier.
recipient

TIME OF SUPPLY OF GOODS [ SECTION 12 ]

FORWARD CHARGE

Date of issue of invoice Last date on which he is Date on which supplier

by the supplier required to issue invoice u/s 31 receives payment

Whichever is earlier
Small advances upto
– Rs 1000 – date of • Date on which payment is entered in books of account.
• Date on which the payment is credited to his bank
invoice to be time of
account
supply
Whichever is earlier

Exemption to all taxpayers from payment of tax on advances received in case of

supply of goods – tax on supply of goods is to be paid on invoice basis and receipt
basis is not applicable

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REVERSE CHARGE

Date of Date immediately • Date on which payment is entered in books

receipt following 30 days of account.
of from the date of • Date on which the payment is debited to
goods issue of invoice his bank account
Whichever is earlier

Whichever is earlier
If TOS cannot be determined as above – TOS is date of entry in the books of
account of the recipient of supply
VOUCHERS

Date of issue of voucher, if the Date of redemption of voucher, in

supply is identifiable all other cases

RESIDUAL CASES

Where periodical return has to be Any other cases, the date on which
filed, the date on which such the tax is paid
return is filed

Special charges like interest, late fees etc. – TOS is date of receipt of additional
amount.

TIME OF SUPPLY OF SERVICES

TIME LIMIT FOR ISSUE OF INVOICE [ RULE 47 ]

30 days from Insurers, bank Inter-bank transaction between

the date of etc. – time insurers, bank, telecom and
supply of service limit – 45 days notified suppliers – date of invoice
– book entry or quarterly

Cessation of supply of services – invoice to be issued at the time when supply ceases.

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CONTINUOUS SUPPLY OF SERVICES [ period exceeding 3 months ]

(1) Where the due date of payment is The invoice shall be issued on or before
ascertainable from the contract the due date of payment
(2) Where the due date of payment is The invoice shall be issued before or at
not ascertainable from the the time when the supplier of service
contract received the payment
(3) Where the payment is linked to The invoice shall be issued on or before
the completion of an event the date of completion of that event

TIME OF SUPPLY OF SERVICE [ SECTION 13 ]

FORWARD CHARGE

Invoice issued within the time limit Invoice not issued within time limit

Date of Date of receipt of Date of provision Date of receipt

invoice payment of service of payment

Whichever is earlier Whichever is earlier

• Date on which payment is entered in books of Small advances upto

account. – Rs 1000 – date of
• Date on which the payment is credited to his invoice to be time of
bank account supply
Whichever is earlier

TOS in case of TDR, FSI and long term lease for construction of residential
commercial apartments – TOS shall arise on shall arise on the date of issuance of
completion certificate or on its first occupation, whichever is earlier.

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REVERSE CHARGE

Date immediately • Date on which payment is entered in books of account.

following 60 days • Date on which the payment is debited to his bank
from the date of account
Whichever is earlier
invoice

Whichever is earlier

Time of supply in other cases – TOS – date of entry in the books of account of the
recipient of supply.
ASSOCIATED ENTERPRISES

Date of entry in the books of account of the Date of payment

recipient of supply

Whichever is earlier

Clarification on time of supply in respect of supply of services of construction of road and

maintenance thereof of National Highway Projects of National Highways Authority of India
(NHAI) in Hybrid Annuity Mode (HAM) model. — Circular No. 221/15/2024-GST dated 26-
06-2024
Issue : Under HAM model of National Highways Authority of India (NHAI), the concessionaire
has to construct the new road and provide Operation & Maintenance of the same which is
generally over a period of 15-17 years and the payment of the same is spread over the
years. What is the time of supply for the purpose of payment of tax on the said service
under the HAM model?
Clarification :
(i) Under the Hybrid Annuity Model (HAM) of concession agreements, the highway
development projects are under Design, Build, Operate and Transfer model (DBOT),
wherein the concessionaire is required to undertake new construction of Highway, as well
as the Operation and Maintenance (O&M) of Highways. The payment terms for the
construction portion as well as the O&M portion of the contract are provided in the
agreement between National Highways Authority of India (NHAI) and the concessionaire.

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(ii) A HAM contract is a single contract for construction as well as operation and maintenance
of the highway. The payment terms are so staggered that the concessionaire is held
accountable for the repair and maintenance of the highway as well. The contract needs to
be looked at holistically based on the services to be performed by the concessionaire and
cannot be artificially split into two separate contracts for construction and operation and
maintenance, based on the payment terms. The concessionaire is bound contractually to
complete not only the construction of the highway but also to operate and maintain the
same.
In HAM contract, the payment is made spread over the contract period in installments
and payment for each installment is to be made after specified periods, or on completion
of an event, as specified in the contract. The same appears to be covered under the
‘Continuous supply of services’ as defined under section 2(33) of the CGST Act.
As per Section 13(2)(a) of CGST Act, the time of supply in respect of a supply of
services shall be the date of issue of Invoice, or date of receipt of payment, whichever
is earlier, in cases where invoice is issued within the period prescribed under section 31
of CGST Act. Further, as per Section 13(2)(b) of CGST Act, in cases where invoice is not
issued within the period prescribed under section 31, the time of supply of service shall
be date of provision of the service or date of receipt of payment, whichever is earlier.
However, as per section 31(5) of CGST Act, in cases of continuous supply of services,
where the payment is made periodically, either due on a specified date or is linked to the
completion of an event, the invoice is required to be issued on or before the specified
date or the date of completion of that event.
Accordingly, as per section 13(2) of CGST Act, read with section 31(5) of CGST Act,
time of supply of services under HAM contract, including construction and O&M portion,
should be the date of issuance of such invoice, or date of receipt of payment, whichever
is earlier, if the invoice is issued on or before the specified date or the date of
completion of the event specified in the contract, as applicable. However, in cases, where
the invoice is not issued on or before the specified date or the date of completion of the
event specified in the contract, as per section 13(2)(b), time of supply should be the date
of provision of the service, or date of receipt of payment, whichever is earlier. In case
of continuous supply of services, the date of provision of service may be deemed as the
due date of payment as per the contract, as the invoice is required to be issued on or
before the due date of payment as per the provisions of Section 31(5) of CGST Act.
(iii) In the light of above, it is clarified that the tax liability on the concessionaire under the
HAM contract, including on the construction portion, would arise at the time of issuance
of invoice, or receipt of payments, whichever is earlier, if the invoice is issued on or
before the specified date or the date of completion of the event specified in the
contract, as applicable. If invoices are not issued on or before the specified date or the
date of completion of the event specified in the contract, tax liability would arise on the
date of provision of the said service (i.e., the due date of payment as per the contract),
or the date of receipt of the payment, whichever is earlier.

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(iv) It is also clarified that as the installments/annuity payable by NHAI to the

concessionaire also includes some interest component, the amount of such interest shall
also be includible in the taxable value for the purpose of payment of tax on the said
annuity/installment in view of the provisions of section 15(2)(d) of the CGST Act.

Clarification on time of supply of services of spectrum usage and other similar services under
GST. — Circular No.-222/16/2024-GST dated 26-06-2024
Issue : In cases of spectrum allocation where the successful bidder (i.e. the ‘telecom
operator’) opts for making payments in instalments as mentioned in the Notice Inviting
Application (NIA) and Frequency Assignment Letter (FAL) issued by Department of
Telecommunications (DoT), Government of India, what will be the time of supply for the
purpose of payment of GST on the said supply of spectrum allocation services.
Classification :
(i) Under the spectrum allocation model followed by DoT, bidder (the telecom operator) bids
for securing the right to use spectrum offered by the government. Here, service provider
is the Government of India (through DoT) and service recipient is the bidder/ telecom
operator. The GST is to be discharged on the supply of spectrum allocation services by
the recipient of services (the telecom operator) on reverse charge basis [Notification No.
13/2017-CT (Rate) dated 28th June, 2017 referred].
(ii) In respect of the said supply of spectrum allocation services, if the telecom operator
chooses the option to make payment in installments, the payment has to be made spread
over the contract period in installments and payment for each installment is to be made
after specified periods, as specified in the Frequency Assignment Letter of DoT, which is
in the nature of contract. The same is a ‘continuous supply of services’ as defined under
section 2(33) of the CGST Act, since the supply of services (spectrum usage) is agreed to
be provided by the supplier (DoT) to the recipient (telecom operator) continuously for a
period which is exceeding three months with periodic payment obligations.
As per section 13(1) of CGST Act, the liability to pay tax on supply of services shall
arise at the time of supply. In case of forward charge supplies, the time of supply of
services is governed by section 13(2) of CGST Act, which is the earlier of date of issue
of invoice by the supplier or date of provision of service or the date of payment, as the
case maybe.
However, in respect of supply of services, on which tax is paid or liable to be paid on
reverse charge basis, as per Section 13(3) of CGST Act, 2017, the time of supply of
services shall be the earlier of the following dates, namely:-
(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 60 days from the date of issue of invoice or any other
document, by whatever name called, in lieu thereof by the supplier.
Some of the field formations are considering the Frequency Assignment Letter issued by
DoT as akin to any other document, by whatever name called, in lieu of an invoice
mentioned in section 13(3)(b) of CGST Act and are demanding interest on instalments paid
after 60 days from the date of issue of the same.

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It is observed that Frequency Assignment Letter is in the nature of a bid acceptance

document intimating the telecom operator that the result of the auction has been
accepted by the competent authority and the details of blocks and spectrum allotted to
the telecom operator. The Frequency Allotment Letter also mentions the options and the
amounts to be paid by the telecom operator in each of the two options.
Further, as per section 31(5)(a) of CGST Act, in cases of continuous supply of services,
where the due date of payment is ascertainable from the contract, the invoice shall be
issued on or before such due date of payment. In the instant case, the date of payment
to be made by the telecom operator to DoT is clearly ascertainable from the Notice
Inviting Applications read with the Frequency Assignment Letter. Accordingly, tax invoice
will be required to be issued in respect of the said supply of services, on or before such
due date of payment as per the option exercised by the telecom operator.
(iii) In the light of above, it is clarified that in case where full upfront payment is made by
the telecom operator, GST would be payable when the payment of the said upfront
amount is made or is due, whichever is earlier, whereas in case where deferred payment
is made by the telecom operator in specified installments, GST would be payable as and
when the payments are due or made, whichever is earlier.
(iv) It is also clarified that the similar treatment regarding the time of supply, as is
discussed in the above paras, may apply in other cases also where any natural resources
are being allocated by the government to the successful bidder/ purchaser for right to
use the said natural resource over a period of time, constituting continuous supply of
services as per the definition under section 2(33) of the CGST Act, with the option of
payments for the said services either through an upfront payment or in deferred periodic
installments over the period of time.

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CHAPTER – 7: VALUE OF SUPPLY

VALUE OF TAXBALE SUPPLY [ section 15(1)]
(1) Value of taxable supply to be transaction value:
❖ Price actually paid or payable for the said supply
❖ Supplier and recipient are not related and
❖ Price is the sole consideration for the supply
(2) Inclusions:
Taxes, duties, cesses, fees and charges except CGST,SGST, UTGST &
GST compensation cess. (if charged saperately). TCS under Income Tax
not included.
Amount incurred by recipient on behalf of the supplier. (agar customer
direct payment bhi karega third party ko toh bhi include karenge). Payment
made on own account of recipient – not to be included.
Incidental expenses and amount charged for activities done before delivery
(commission, packing, inspection or certification charges, installation and
testing charges, outward freight, transit insurance)
Charges for delayed payment of consideration.
Subsidies (govt wali exclude karenge and private wali include)
(3) Exclusions:
 Discounts:
 Discount given on or before supply
 Post supply discount:
• Specially linked to relevant invoices and
• Input tax credit as is attributable has to be reversed.
 Non deductible discount (year end discount after reviewing
dealer performance)
CIRCULARS
֎ Free samples and gifts: not regarded as supply and ITC not admissible.
֎ Buy one get one free offer: value already included and ITC admissible.
֎ Staggered discount/volume discount – deductible.
֎ Secondary discount not deductible.
֎ Valuation of supply made by a component manufacturing using moulds and dies
owned by original equipment manufacturers (OEM) sent free of cost to him – value
of such moulds and dies not to be added to the value of supply made by
component manufacturer. If under obligation of component manufacturer such
moulds and dies supplied by OEM, then amortized value to be added in value of
component.
If value cannot be determined on the above basis then shall b determined on basis of
rules

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Issue clarification
Whether No Claim Bonus provided by Accordingly, where the deduction on account
the insurance company to the insured of No claim bonus is provided in the invoice
can be considered as an admissible issued by the insurer to the insured, GST
discount for the purpose of shall be leviable on actual insurance premium
determination of value of supply of amount, payable by the policy holders to the
insurance e service provided by the insurer, after deduction of No Claim
insurance companyto the insured? Bonus mentioned on the invoice.
Applicability of GST on the incentive amount shared by acquiring banks with other
stakeholders in the digital payment ecosystem under the notified Incentive Scheme for
promotion of RuPay Debit Cards and low value BHIM-UPI transactions. — Circular No.
228/22/2024-GST dated 15-07-2024
Issue : Whether GST is applicable on the incentive amount shared by acquiring banks with
other stakeholders in the digital payment ecosystem under the notified Incentive Scheme for
promotion of RuPay Debit Cards and low value BHIM-UPI transactions.
Clarification :
The Gazette Notifications dated 17th December, 2021 and 14th January, 2023 issued by
MeitY state that the incentives will be shared by the acquiring banks with other payment
system participants and the payment system operator, in the proportion and manner decided
by the National Payments Corporation of India (NPCI) in consultation with the participating
banks. MeitY pays the incentive to the acquiring bank and it is further shared by the
acquiring bank with the issuer bank. Issuer bank further shares the incentive with the Payer
Payment Service Provider (PSP), which are typically banks, and the UPI app.
The share of incentive paid by the acquiring bank to the issuer bank and further shared by
the issuer bank to the Payer PSPs and the UPI app are decided by the NPCI in consultation
with participating banks. Payer PSPs may choose to further share this incentive with Third
Party App Providers (TPAP). However, the proportion of the incentive shared by Payer PSPs
with TPAPs is not being decided by NPCI in consultation with the participating banks for
Financial Years 2021-22 and 2022-23 and was determined by the business agreement between
the Payer PSPs and TPAP.
GST Council in its 53rd meeting held on 22nd June, 2024 has recommended to clarify that
further sharing of the incentive amount by the acquiring bank with other stakeholders, up to
the point where the incentive is distributed in the proportion and manner as decided by NPCI
in consultation with the participating banks under the notified Incentive Scheme, is in the
nature of a subsidy and thus, not taxable.
Thus, it is hereby clarified that further sharing of the incentive amount by the acquiring bank
with other stakeholders, up to the point where the incentive is distributed in the proportion
and manner as decided by NPCI in consultation with the participating banks under the notified
Incentive Scheme for promotion of RuPay Debit Cards and low value BHIM-UPI transactions,
is in the nature of a subsidy and is thus, not taxable.

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Mechanism for providing evidence of compliance of conditions of Section 15(3)(b)(ii) of the

CGST Act, 2017 by the suppliers. — Circular No. 212/6/2024-GST dated 26-06-2024
Issue : In cases where the discounts are offered by the suppliers through tax credit notes,
after the supply has been effected, the said discount is not to be included in the taxable
value only if the condition of section 15(3)(b)(ii) of the CGST Act, for reversal of the input
tax credit attributable to the said discount by the recipient, is satisfied. Representations
have been received from the trade and the field formations mentioning that there is presently
no facility available to the supplier as well as the tax officers on the common portal to verify
whether the input tax credit attributable to the said discount has been reversed by the
recipient or not. Request has been made to provide a suitable mechanism for enabling the
suppliers as well as tax officers to verify fulfilment of the condition of section 15(3)(b)(ii) of
the CGST Act regarding proportionate reversal of input tax credit by the recipients in respect
of such discounts given by the supplier by issuing tax credit notes after the supply has been
effected.
Clarification : The Board, in exercise of its powers conferred by section 168 (1) of the CGST
Act, hereby clarifies the issues as under:
(a) Wherever any discount is offered by the supplier to the recipient, by issuance of a tax
credit note as per section 34 of the CGST Act, after the supply has been effected, the
said discount can be excluded from the value of taxable supply only if the conditions of
section 15(3)(b) of the CGST Act are fulfilled. Such conditions inter alia includes the
requirement of reversal of input tax credit by the recipient attributable to the said
discount.
(b) However, there is no system functionality/ facility presently available on the common
portal to enable the supplier or the tax officer to verify the compliance of the said
condition of proportionate reversal of input tax credit by the recipient.
(c) In view of the above, till the time a functionality/ facility is made available on the
common portal to enable the suppliers as well as the tax officers to verify whether the
input tax credit attributable to such discounts offered through tax credit notes has been
reversed by the recipient or not, the supplier may procure a certificate from the
recipient of supply, issued by the Chartered Accountant (CA) or the Cost Accountant
(CMA), certifying that the recipient has made the required proportionate reversal of input
tax credit at his end in respect of such credit note issued by the supplier.
(d) The said CA/CMA certificate may include details such as the details of the credit notes,
the details of the relevant invoice number against which the said credit note has been
issued, the amount of ITC reversal in respect of each of the said credit notes along with
the details of the FORM GST DRC-03/ return/ any other relevant document through
which such reversal of ITC has been made by the recipient.
(e) Such certificate issued by CA or CMA shall contain UDIN (Unique Document Identification
Number). UDIN of the certificate issued by CAs can be verified from ICAI website
https://udin.icai.org/search-udin. and that issued by CMAs can be verified from ICMAI
website https://eicmai.in/udin/VerifyUDIN.aspx.
(f) In cases, where the amount of tax (CGST + SGST + IGST and including compensation
cess, if any) involved in the discount given by the supplier to a recipient through tax

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credit notes in a Financial Year is not exceeding ₹ 5,00,000, then instead of CA/CMA
certificate, the said supplier may procure an undertaking/ certificate from the said
recipient that the said input tax credit attributable to such discount has been reversed
by him, along with the details mentioned above.
(g) Such certificates issued by the CA/CMA or the undertakings/ certificates issued by the
recipient of supply, as the case may be, shall be treated as a suitable and admissible
evidence for the purpose of section 15(3)(b)(ii) of the CGST Act, 2017. The supplier shall
produce such certificates/ undertakings before the tax officers, if required, during any
proceedings such as scrutiny, audit, investigations, etc. Even for the past period, where
ever any such evidence as per section 15(3)(b)(ii) of CGST Act in respect of credit note
issued by the supplier for post-sale discounts is required to be produced by him to the
tax authorities, the concerned taxpayer may procure and provide such certificates issued
by CA/CMA or the undertakings/ certificates issued by the recipients of supply, as the
case may be, to the concerned investigating/ audit/ adjudicating authority as evidence of
requisite reversal of input tax credit by his recipients.

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CHAPTER-8: INPUT TAX CREDIT

ELIGIBILITY AND CONDITIONS FOR TAKING INPUT TAX CREDIT [SECTION 16]
(1) Only registered person eligible to take ITC.
(2) Conditions to be satisfied for taking ITC:
(a) Possession of tax paying documents
(i)
Documents on basis of which ITC can be availed (Rule 36(1)

1. An invoice issued by the supplier of goods or services or both

2. Invoice issued by the recipient along with proof of payment of
tax in case of reverse charge;
3. A debit note issued by the supplier as per sec 34
4. A bill of entry or any similar document prescribed under
custom act, 1962
5. An input service distributor invoice or input service distributor
credit note or any document issued by an ISD

(ii) Document must contain prescribed particulars and relevant information

to be furnished by registered person.
(iii) ITC cannot be availed on tax demands on account of fraud etc.
(aa) the details of the invoice or debit note referred above has been furnished by
the supplier in the statement of outward supplies and such details have been
communicated to the recipient of such invoice or debit note in the manner specified
under section 37.
Restriction on availment of ITC [rule 36(4)] : No input tax credit shall be availed by
a registered person in respect of invoices or debit notes the details of which are
required to be furnished under section 37(1) unless:-
(i) The details of such invoices or debit notes have been furnished by the
supplier in the statement of outward supplies in FORM GSTR-1, as amended
in FORM GSTR-1A if any [inserted vide notification no. 12/20204-CT
dated 10/7/2024 ] or using the IFF; and
(ii) The details of input tax credit in respect of such invoices or debit notes
have been communicated to the registered persons in FORM GSTR-2B under
Rule 60(7).
(b) Receipt of goods and services [ delivery of goods or services at registered
persons direction is valid receipt of goods or services]

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(ba) ITC must not to be restricted: The details of input tax credit in respect of
the said supply communicated to such registered person u/s 38 has not been
restricted.
(c) Tax charged is actually paid to the government
(d) Furnishing of return.
(3) ITC not admissible if depreciation claimed on tax component
(4) Burden of proof – persons taking the credit.

TIME LIMIT FOR AVAILING ITC [Section 16(4)]

Maximum time limit

for availing ITC

30th day of November following

Furnishing of the
the end of the F.Y to which such
relevant annual return
invoice or debit note pertains, or

Whichever
is earlier

Exception: it must be further noted that the time limit under section 16(4) does not
apply to claim for re-availing of credit that had been reversed earlier

Clarification on time limit under Section 16(4) of CGST Act, 2017 in respect of RCM supplies
received from unregistered persons. – Circular No. 211/5/2024-GST dated 26-06-2024
(1) Issue: It has been represented that in some cases, where tax is payable on reverse
charge basis by the recipient, such as, where an activity is performed by the overseas
related person for the entity located in India and no consideration is involved, such an
activity may not be considered as supply of services by the concerned recipient in India
and accordingly, no invoice is issued as well as no tax is paid by the said recipient under
RCM in respect of the same. However, later on, either on their own on the basis of some
clarification issued by the department or on the basis of some court judgment or on being
pointed out by the tax authorities during scrutiny or audit or otherwise, the said recipient
issues the invoice and pays the tax under RCM, along with interest, and claims input tax
credit on such tax paid.
It has been represented that some of the field formations are taking the view that in
such cases, the relevant year of the invoice for the purpose of section 16(4) of CGST
Act is the year in which the said supply was received and accordingly, the time limit for
availment of ITC under section 16(4) of CGST Act is only upto the September/ November
of the following financial year, i.e. the financial year following the financial year in which
the said services was received.

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On the other hand, industry has represented that as the invoice in respect of such
supplies received from unregistered supplier, where tax has to be paid by the recipient on
RCM basis, is to be issued by the recipient as per section 31(3)(f) of CGST Act, the
relevant year of invoice for the purpose of section 16(4) of CGST Act is the financial
year in which such invoice has been issued and accordingly, ITC should be available on the
said invoice under section 16(4) of CGST Act till the September/ November of the
financial year following the financial year in which such invoice has been issued. Request
has been made to issue clarification in the matter to avoid litigation.
(2) Clarification : The Board, in exercise of its powers conferred under section 168(1) of the
CGST Act, hereby clarifies the issue as follows :
(a) As per section 16(2)(a) of CGST Act, no registered person shall be entitled to the
credit of any input tax in respect of any supply of goods or services or both to him
unless he is in possession of a tax invoice or debit note issued by a supplier
registered under this Act, or such other tax paying documents as may be prescribed.
(b) Rule 36(1)(b) of the CGST Rules prescribes that input tax credit shall be availed by a
registered person inter-alia on the basis of an invoice issued in accordance with the
provisions of section 31(3)(f) of CGST Act, subject to the payment of tax.
(c) Further, section 31(3)(f) of CGST Act provides that a registered person, who is
liable to pay tax under section 9(4)/(3), shall issue an invoice in respect of goods or
services or both received by him from the supplier who is not registered on the date
of receipt of goods or services or both. Accordingly, where the supplier is
unregistered and recipient is registered, and the recipient is liable to pay tax on the
said supply on RCM basis, the recipient is required to issue invoice as per section
31(3)(f) of CGST Act and pay the tax in cash on the same under RCM.
(d) It can be seen that section 16(4) of CGST Act links the time limit for ITC availment
with the financial year to which the invoice or debit note pertains. In case of supplies
where the supplier is unregistered and recipient is registered and the tax has to be
paid by the recipient on RCM basis, the recipient is required to issue invoice in terms
of the provisions of section 31(3)(f) of CGST Act and pay the tax on the same in
cash under RCM.
Further, ITC cannot be availed by a registered person in respect of any supply of
goods or services or both received by him, as per the provisions of section 16(2)(a)
of CGST Act, unless he is in possession of a tax invoice or debit note or such other
tax paying documents as may be prescribed.
(e) A combined reading of the above provisions leads to a conclusion that as ITC can be
availed by the recipient only on the basis of invoice or debit note or other duty
paying document, and as in case of RCM supplies received by the recipient from
unregistered supplier, invoice has to be issued by the recipient himself, the relevant
financial year, to which invoice pertains, for the purpose of time limit for availment
of ITC under section 16(4) of CGST Act in such cases shall be the financial year of
issuance of such invoice only. In cases, where the recipient issues the said invoice
after the time of supply of the said supply and pays tax accordingly, he will be
required to pay interest on such delayed payment of tax.

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(f) Accordingly, it is clarified that in cases of supplies received from unregistered

suppliers, where tax has to be paid by the recipient under reverse charge mechanism
(RCM) and where invoice is to be issued by the recipient of the supplies in accordance
with section 31(3)(f) of CGST Act, the relevant financial year for calculation of time
limit for availment of input tax credit under the provisions of section 16(4) of CGST
Act will be the financial year in which the invoice has been issued by the recipient
under section 31(3)(f) of CGST Act, subject to payment of tax on the said supply by
the recipient and fulfilment of other conditions and restrictions of section 16 and 17
of CGST Act. In case, the recipient issues the invoice after the time of supply of
the said supply and pays tax accordingly, he will be required to pay interest on such
delayed payment of tax. Further, in cases of such delayed issuance of invoice by the
recipient, he may also be liable to penal action under the provisions of Section 122 of
CGST Act.

Payment for the invoice to be made within 180 days [Second proviso to section 16(2)]
(i) Payment is not made within 180 days from date of invoice - ITC availed is to be
paid along with interest:
As per Second Proviso to Section 16(2), where a recipient fails to pay-
➢ to the supplier of goods or services or both,
➢ the amount towards the value of supply along with tax payable thereon.
➢ within a period of 180 days from the date of issue of invoice by the supplier, an
amount equal to the input tax credit availed by the recipient shall be paid by him
along with interest payable u/s 50 thereon (i.e. 18% p.a.), in such manner as may be
prescribed.
(ii) Re-credit when payment is made subsequently: However, the recipient shall be
entitled to avail of the credit of input tax on payment made by him to the supplier of the
amount towards the value of supply of goods or services or both along with tax payable
thereon. In case part payment has been made to the supplier, proportionate credit would
be allowed.
(iii) Exceptions: This condition of payment of value of supply plus tax within 180 days
does not apply in the following situations:
(a) Supplies on which tax is payable under reverse charge
(b) Deemed supplies without consideration Le. value of supplies made without consideration
as specified in Schedule I of the said Act.
(c) The value of supplies on account of any amount added in accordance with the provisions
Section 15(2)(b) shall be deemed to have been paid for the purposes of the second proviso
to Section 16(2), i.e. additions made to the value of supplies on account of supplier's
liability, in relation to such supplies, being incurred by the recipient of the supply.

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Note: Under situations given in points (b) & (c), the value of supply is deemed to have been
paid.

Reversal of ITC in case of non-payment of consideration [Rule 37]: The procedural

requirements are discussed as under-
1) Payment is not made within 180 days from date of invoice - ITC availed is to be
paid along with interest: A registered person, who has availed of input tax credit
on any inward supply of goods or services or both, but fails to pay to the supplier
thereof, the amount towards the value of such supply whether wholly or partly
along with the tax payable thereon, within 180 days from the date of invoice,
shall pay an amount equal to the input tax credit availed in respect of such supply
along with interest payable thereon under section 50, while furnishing the return
in FORM GSTR-3B for the tax period immediately following the period of 180
days from the date of the issue of the invoice.
2) Re-credit when payment is made subsequently [Rule 37(2)]:
3) Re-availing of credit reversed earlier – time limit provisions for taking credit not
applicable

Reversal of input tax credit in the case of non-payment of tax by the supplier and
re-availment thereof [Rule 37A]

(1) Reversal of ITC in case GSTR-3B has not been furnished by his supplier:
Where input tax credit has been availed by a registered person in the return in
FORM GSTR-3B for a tax period in respect of such invoice or debit note, the
details of which have been furnished by the supplier in the statement of outward
supplies in FORM GSTR-1, as amended in FORM GSTR-1A if any [inserted vide
notification no. 12/20204-CT dated 10/7/2024 ] or using the invoice furnishing
facility, but the return in FORM GSTR-3B for the tax period corresponding to the
said statement of outward supplies has not been furnished by such supplier till the
30th September following the end of financial year in which the input tax credit in
respect of such invoice or debit note has been availed, the said amount of input tax
credit shall be reversed by the said registered person, while furnishing a return in
FORM GSTR-3B on or before the 30th November following the end of such
financial year.
(2) Interest liability for non reversal of ITC by 30th November: Where thesaid
amount of input tax credit is not reversed by the registered person in a return in
FORM GSTR-3B on or before the 30th November following the end of such

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financial year during which such input tax credit has been availed, such amount
shall be payable by the said person along with interest@ 18% p.a.
(3) Re-availment of ITC: Where the said supplier subsequently furnishes the
return in FORM GSTR-3B for the said tax period, the said registered person may
re-avail the amount of such credit in the return in FORM GSTR- 3B for a tax
period thereafter.
APPORTIONMENT OF CREDIT AND BLOCKED CREDIT
(1) Ineligible inputs/capital goods/input services – blocked credits [ section 17 (5) ]
(2) Items ineligible for credit [ section (5) ]: ITC shall not be available in respect
of following:
(a) Motor vehicle for Motor vehicles for transportation of persons
transportation of having approved seating capacity of not more than
passenger 13 persons (including the driver),
However, credit will be available when they are
used for making the following taxable supplies,
namely:
(A) further supply of such motor vehicles; or
(B) transportation of passengers; or
(C) imparting training on driving such motor
vehicles.
(aa) Vessel and aircraft Vessels and aircraft
However, credit will be available when they are
used –
(i) for making the following taxable supplies,
namely:
(a) further supply of such vessels or
aircraft; or
(b) transportation of passengers; or
(c) imparting training on navigating such
vessels;
(d) imparting training on flying such aircraft;
(ii) for transportation of goods.
(ab) Insurance, repairs and Services of general insurance, servicing, repair
maintenance of motor and maintenance in so far as they relate to motor
vehicles, vessels and vehicles, vessels or aircraft referred to in clause
aircraft (a) or clause (aa).
However, the input tax credit in respect of such
services shall be available
(i) where the motor vehicles, vessels or
aircraft referred to in clause (a) or clause

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(aa) are used for the purposes specified

therein;
(ii) where received by a taxable person engaged
-
(a) in the manufacture of such motor
vehicles, vessels or aircraft; or
(b) in the supply of general insurance
services in respect of such motor vehicles,
vessels or aircraft insured by him;
(b) Food & beverages outdoor (i) the following supply of goods or services or
catering beauty treatment both-
etc. ֎ food and beverages,
֎ outdoor catering,
֎ beauty treatment,
֎ health services,
֎ cosmetic and plastic surgery,
֎ leasing, renting or hiring of motor
vehicles, vessels or aircraft referred to in
clause (a) or clause (aa) above except
when used for the purposes specified
therein,
֎ life insurance, and
֎ health insurance.
However, the input tax credit in respect of such
goods or services or both shall be available where
an inward supply of such goods or services or
both is used by a registered person for making
an outward taxable supply of the same category
of goods or services or both or as an element of
a taxable composite or mixed supply;
(ii) membership of a club, health and fitness
centre; and
(iii) travel benefits extended to employees on
vacation such as leave or home travel
concession.
However, the input tax credit in respect of such
goods or services or both shall be available,
where it is obligatory for an employer to provide
the same to its employees under any law for the
time being in force.
(c) Works contract Works contract services when supplied for

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construction of an immovable property.

However, credit is allowed –
(i) Where it is an input service for further
supply of works contract service.
(ii) Where it is supplied for construction of
plant and machinery.
Explanation:
(1) "Plant and machinery" means apparatus,
equipment, and machinery fixed to earth by
foundation or structural support that are used
for making outward supply of goods or services or
both and includes such foundation and structural
supports but excludes-
(i) land, building or any other civil structures;
(ii) telecommunication towers; and
(iii) pipelines laid outside the factory
premises.
(2) "Construction" includes re-construction,
renovation, additions or alterations or repairs,
to the extent of capitalisation, to the said
immovable property.
(d) Input and input services Goods or services or both received by a taxable
for construction of person for construction of an immovable property
immovable property on his own account including when such goods and
services or both are used in the course or
furtherance of business. However, credit is
allowed if they are supplied for construction of
plant and machinery.
(e) Input under composition -
scheme
(f) Inputs by NR Goods and services or both received by a non-
resident taxable person except on goods imported
by him
(fa) Goods or services for CSR Goods or services or both received by a taxable
expenditure person, which are used or intended to be used
for activities relating to his obligations under
corporate social responsibility referred to in
section 135 of the companies act 2013 [Finance
act, 2023]
(g) Personal consumption -
(h) Lost, stolen goods etc. -

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(i) Evasion, confiscation etc. -

Entitlement of ITC by the insurance companies on the expenses incurred for repair of
motor vehicles in case of reimbursement mode of insurance claim settlement-reg. – Circular
No. 217/11/2024-GST dated 26-06-2024
Issue Clarification
(i) The insurance companies, which are Under reimbursement mode of claim
engaged in providing general settlement, the insured avails repair services
insurance services in respect of from non-network garages with which the
insurance of motor vehicles, insure insurance companies do not have routine
the cost of repairs/ damages of business relationship. The said garages issue
motor vehicles incurred by the the invoice in the name of the insurance
policyholders and settle the claims company while not extending credit facility
in two modes i.e., Cashless or for the repair costs. Accordingly, the policy
Reimbursement. Whether ITC is holder/ insured makes payment of such repair
available to insurance companies in services, and subsequently, the insurance
respect of repair expenses company reimburses the approved claim cost
reimbursed by the insurance to the insured.
company in case of reimbursement Section 17(5) of the CGST Act provides that
mode of claim settlement. ITC in respect of services of repair of motor
vehicles shall be available where received by
a taxable person engaged in the supply of
general insurance services in respect of motor
vehicles insured by him. Section 16 of CGST
Act provides that every registered person
shall, subject to such conditions and
restrictions as may be prescribed and in the
manner specified in section 49 of the said
Act, be entitled to take credit of input tax
charged on any supply of goods or services or
both to him which are used or intended to be
used in the course or furtherance of his
business and the said amount shall be
credited to the electronic credit ledger of
such person.
Further, section 2(93) of CGST Act defines
“recipient" of supply of goods or services or
both, as the person who is liable to pay the
consideration, where such consideration is
payable for the said supply of goods or
services or both.
Moreover, as per section 2(31) of CGST Act,
“consideration” includes any payment made or
to be made in relation to supply of the goods
or services or both, whether by the recipient

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or by any other person. In reimbursement

mode of claim settlement, the payment is
made by the insurance company for the
approved cost of repair services through
reimbursement to the insured. Further,
irrespective of the fact that the payment of
the repair services to the garage is first
made by the insured, which is then
reimbursed by the insurance company to the
insured to the extent of the approved claim
cost, the liability to pay for the repair
service for the approved claim cost lies with
the insurance company, and thus, the
insurance company is covered in the definition
of “recipient” in respect of the said supply of
services of vehicle repair provided by the
garage under section 2(93) of CGST Act, to
the extent of approved repair liability.
Moreover, availment of credit in respect of
input tax paid on motor vehicle repair
services received by the insurance company
for outward supply of insurance services for
such motor vehicles is not barred under
section 17(5) of CGST Act.
Accordingly, it is clarified that ITC is
available to Insurance Companies in respect
of motor vehicle repair expenses incurred by
them in case of reimbursement mode of claim
settlement.
(ii) Where the invoice raised by the In cases where the garage issues two
garage also includes an amount in separate invoices in respect of the repair
excess of the approved claim cost, services, one to the insurance company in
the insurance company only respect of approved claim cost and second to
reimburses the approved claim cost the customer for the amount of repair
to the garage after considering the service in excess of the approved claim cost,
standard deductions viz. the input tax credit may be available to the
compulsory deductibles to be borne insurance company on the said invoice issued
by the insured, depreciation, to the insurance company subject to
improvements outside the coverage, reimbursement of said amount by insurance
value of salvage of the damaged company to the customer. However, if the
parts of the motor vehicles, etc. invoice for full amount for repair services is
The remaining amount is to be paid issued to the insurance company while the
by the insured to the garage. What insurance company makes reimbursement to
is the extent of ITC available to the insured only for the approved claim cost,
the insurer in such cases? then, the input tax credit may be available

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to the insurance company only to the extent

of reimbursement of the approved claim cost
to the insured, and not on the full invoice
value.
(iii) Whether ITC is available to the In such a case, condition of clause (a) and
insurer where the invoice for the (aa) of section 16(2) of CGST Act is not
repair of the vehicle is not in name satisfied and accordingly, input tax credit will
of the insurance company not be available to the insurance company in
respect of such an invoice.

Clarification on availability of input tax credit on ducts and manholes used in network of
optical fiber cables (OFCs) in terms of section 17(5) of the CGST Act, 2017. — Circular
No. 219/13/2024-GST dated 26-06-2024
Issue Clarification
Whether the input tax credit on the ducts (1) Section 17(5) of the CGST Act provides
and manholes used in network of optical that input tax credit shall not be
fiber cables (OFCs) for providing available, inter alia, in respect of the
telecommunication services is barred in following:
terms of section 17(5)(c)/(d) of the CGST (i) works contract services when
Act, read with Explanation to section 17 of supplied for construction of an
CGST Act ? immovable property (other than plant
and machinery) except where it is an
input service for further supply of
works contract service; or
(ii) goods or services or both received
by a taxable person for construction
of an immovable property (other
than plant or machinery) on his own
account including when such goods or
services or both are used in the
course or furtherance of business.
(2) Explanation in section 17 of CGST Act
provides that the expression "plant and
machinery" means apparatus, equipment,
and machinery fixed to earth by
foundation or structural support that are
used for making outward supply of goods
or services or both and includes such
foundation and structural supports but
excludes land, building or any other civil
structures; telecommunication towers;
and pipelines laid outside the factory
premises.
(3) Ducts and manholes are basic components
for the optical fiber cable (OFC)
network used in providing

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telecommunication services. The OFC

network is generally laid with the use of
PVC ducts/sheaths in which OFCs are
housed and service/connectivity
manholes, which serve as nodes of the
network, and are necessary for not only
laying of optical fiber cable but also
their upkeep and maintenance. In view of
the Explanation in section 17 of the
CGST Act, it appears that ducts and
manholes are covered under the
definition of “plant and machinery” as
they are used as part of the OFC
network for making outward supply of
transmission of telecommunication signals
from one point to another. Moreover,
ducts and manholes used in network of
optical fiber cables (OFCs) have not
been specifically excluded from the
definition of “plant and machinery” in the
Explanation to section 17 of CGST Act,
as they are neither in nature of land,
building or civil structures nor are in
nature of telecommunication towers or
pipelines laid outside the factory
premises.
(4) Accordingly, it is clarified that availment
of input tax credit is not restricted in
respect of such ducts and manhole used
in network of optical fiber cables
(OFCs), either u/s 17(5)(c)/(d) of CGST
Act.

Clarification on availability of input tax credit in respect of demo vehicles. — Circular No.
231/25/2024-GST dated 10-09-2024
The demo vehicles are the vehicles which the authorised dealers for sale of motor vehicles
are required to maintain at their sales outlet as per dealership norms and are used for
providing trial run and for demonstrating features of the vehicle to the potential buyers.
These vehicles are purchased by the authorised dealers from the vehicle manufacturers
against tax invoices and are typically reflected as capital assets in books of account of the
authorized dealers. As per dealership norms, these vehicles may be required to be held by
the authorized dealers as demo vehicle for certain mandatory period and may, thereafter,
be sold by the dealer at a written down value and applicable tax is payable at that point
of time.
Reference has been received to issue clarification regarding availability of input tax credit
in respect of demo vehicles on the following issues:

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Issue Clarification
1. Availability of input tax credit on demo Section 17(5)(a) of CGST Act provides that
vehicles, which are motor vehicles for input tax credit shall not be available in
transportation of passengers having respect of motor vehicles for transportation
approved seating capacity of not more of persons having approved seating capacity
than 13 persons (including the driver), of not more than 13 persons (including the
in terms of section 17(5)(a) of CGST driver), except when they are used for
Act. making following taxable supplies, namely:
(A) further supply of such motor vehicles;
or
(B) transportation of passengers; or
(C) transportation of passengers; or
The intention of law, as it appears from the
use of expression ‘when they are used for
making the following taxable supplies’ in
section 17(5)(a) of CGST Act, is to exclude
certain cases (based on the nature of
outward taxable supplies being made using
the said motor vehicle) from the restriction
on availment of input tax credit in respect
of the specified motor vehicles i.e. motor
vehicles for transportation of persons having
approved seating capacity of not more than
13 persons (including the driver). The
taxable supplies, permitted for the purpose
of being excluded from the blockage of input
tax credit as per provisions of section
17(5)(a) of CGST Act, being further supply
of such motor vehicles, transportation of
passengers and imparting training on driving
such motor vehicles.
As demo vehicles are used by authorized
dealers to provide trial run and to
demonstrate features of the vehicle to
potential buyers, it is quite apparent that
demo vehicles cannot be said to be used by
the authorized dealer for providing taxable
supply of transportation of passengers or
imparting training on driving such motor
vehicles. Therefore, demo vehicles are not
covered in the exclusions specified in sub-
clauses (B) and (C) of section 17(5)(a) of
CGST Act. Accordingly, it is to be seen
whether or not the Demo vehicles in question
can be said to be used for making “further

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supply of such motor vehicles”, as specified

in the sub-clause (A) of section 17(5)(a) of
CGST Act.
Regarding the provision for blockage of input
tax credit in respect of motor vehicles for
transportation of persons having approved
seating capacity of not more than 13
persons (including the driver), the
usage of the words “such motor vehicles”
instead of “said motor vehicle”, in sub-
clause (A) of section 17(5)(a) of CGST Act,
implies that the intention of the lawmakers
was not only to exclude from the blockage
of input tax credit, the motor vehicle which
is itself further supplied, but also to
exclude from the blockage of input tax
credit, the motor vehicle which is being used
for the purpose of further supply of similar
type of motor vehicles. As demo vehicles
are used by authorized dealers to provide
trial run and to demonstrate features of the
vehicle to potential buyers, it helps the
potential buyers to make a decision to
purchase a particular kind of motor vehicle.
Therefore, as demo vehicles promote sale of
similar type of motor vehicles, they can be
considered to be used by the dealer for
making ‘further supply of such motor
vehicles’.
Accordingly, input tax credit in respect of
demo vehicles is not blocked under section
17(5)(a) of CGST Act, as it is excluded
from such blockage in terms of sub-clause
(A) of the said clause.
There may be some cases where motor
vehicles for transportation of persons having
approved seating capacity of not more than
13 persons (including the driver) are used by
an authorized dealer for purposes other
than for making further supply of such
motor vehicles, say for transportation of its
staff employees/ management etc. In such
cases, the same cannot be said to be used
for making ‘further supply of such motor
vehicles’ and therefore, input tax credit in

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respect of such motor vehicles would not be

excluded from blockage in terms of
subclause (A) of section 17(5)(a) of CGST
Act.
Further, there may be cases where the
authorized dealer merely acts as an agent
or service provider to the vehicle
manufacturer for providing marketing
service, including providing facility of vehicle
test drive to the potential customers of the
vehicle on behalf of the manufacturer and is
not directly involved in purchase and sale of
the vehicles. In such cases, the sale invoice
for the vehicle is directly issued by the
vehicle manufacturer to the customer. For
providing facility of vehicle test drive to the
potential customers of the vehicle, the
dealer purchases demo vehicle from the
vehicle manufacturer. The dealer may sell
the said demo vehicle to a customer after a
specified time or kilometres as per
agreement with the vehicle manufacturer on
payment of applicable GST. In such a case,
the authorized dealer is merely providing
marketing and/or facilitation services to the
vehicle manufacturer and is not making the
supply of motor vehicles on his own account.
Therefore, the said demo vehicle cannot be
said to be used by the dealer for making
further supply of such motor vehicles.
Accordingly, in such cases, input tax credit
in respect of such demo vehicle would not be
excluded from blockage in terms of sub-
clause (A) of section 17(5) (a) of CGST Act
and therefore, input tax credit on the same
would not be available to the said dealer.
2. Availability of input tax credit on demo As per provisions of section 16(1) of CGST
vehicles in cases where such vehicles Act, every registered taxpayer is entitled
are capitalized in the books of account to take input tax credit charged on any
by the authorized dealers. supply of goods and services made to him,
where such goods or services are used in
the course or furtherance of business of
such person, subject to such conditions and
restrictions as may be prescribed and in the
manner which is specified.

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Further, “goods” has been defined in section

2(52) of CGST Act, as, "goods" means
every kind of movable property other than
money and securities but includes actionable
claim, growing crops, grass and things
attached to or forming part of the land
which are agreed to be severed before
supply or under a contract of supply.
Also, section 2(19) of CGST Act defines
“capital goods” as, “capital goods” means
goods, the value of which is capitalized in
the books of account of the person claiming
the input tax credit and which are used or
intended to be used in the course or
furtherance of business.
As mentioned in paras above, as the demo
vehicles are used by the authorized dealers
to promote further sale of motor vehicles
of the similar type and therefore, such
vehicles appear to be used in the course or
furtherance of business of the authorized
dealers. Where such vehicles are capitalized
in the books of accounts by the authorized
dealer, the said vehicle falls in the
definition of “capital goods” under section
2(19) of CGST Act. As per provision of
section 16(1) of CGST Act, subject to such
conditions and restrictions as may be
prescribed, a recipient of goods is entitled
to take input tax credit in respect of tax
charged on the inward supply of any goods,
which as per definition of “goods” under
section 2(52) of CGST Act, includes even
capital goods. Further, section 2(19) of
CGST Act also recognizes that capital goods
are used or intended to be used in the
course or furtherance of business.
Accordingly, availability of input tax credit
on demo vehicles is not affected by way of
capitalization of such vehicles in the books
of account of the authorized dealers,
subject to other provisions of the Act.
However, it is to be mentioned that in case
of capitalization of demo vehicles,
availability of input tax credit would be

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subject to provisions of section 16(3) of

CGST Act, which provides that where the
registered person has claimed depreciation
on the tax component of the cost of capital
goods and plant and machinery under the
Income-tax Act, 1961, the input tax credit
on the said tax component shall not be
allowed. It is further mentioned that in
case demo vehicle, which is capitalized, is
subsequently sold by the authorized dealer,
the authorized dealer shall have to pay an
amount or tax as per provisions of section
18(6) of CGST Act read with rule 44(6) of
the CGST Rules, 2017.

Clarification on availability of ITC in respect of warranty replacement of parts and

repair services during warranty period. - Circular No. 195/07/2023-GST dated
17-07-2023
Issue Clarification
1. There are cases where the original The value of original supply of goods
equipment manufacturer offers (provided along with warranty) by the
warranty for the goods supplied by manufacturer to the customer includes
him to the customer and provides the likely cost of replacement of parts
replacement of parts and/or repair and/or repair services to be incurred
services to the customer during the during the warranty period, on which tax
warranty period, without separately would have already been paid at the
charging any consideration at the time time of original supply of goods.
of such replacement/repair services. As such, where the manufacturer
Whether GST would be payable on provides replacement of parts and/or
such replacement of parts or supply repair services to the customer during
of repair services, without any the warranty period, without separately
consideration from the customer, as charging any consideration at the time
part of warranty? of such replacement/ repair services, no
further GST is chargeable on such
replacement of parts and/or repair
service during warranty period.
However, if any additional consideration
is charged by the manufacturer from
the customer, either for replacement of
any part or for any service, then GST
will be payable on such supply with
respect to such additional consideration.

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2. Whether in such cases, the In such cases, the value of original

manufacturer is required to reverse supply of goods (provided along with
the input tax credit in respect of warranty) by the manufacturer to the
such replacement of parts or supply customer includes the likely cost of
of repair services as part of replacement of parts and/ or repair
warranty, in respect of which no services to be incurred during the
additional consideration is charged warranty period.
from the customer? Therefore, these supplies cannot be
considered as exempt supply and
accordingly, the manufacturer, who
provides replacement of parts and/ or
repair services to the customer during
the warranty period, is not required to
reverse the input tax credit in respect
of the said replacement parts or on the
repair services provided.
3. Whether GST would be payable on In such cases, as no consideration is
replacement of parts and/ or repair being charged by the distributor from
services provided by a distributor the customer, no GST would be payable
without any consideration from the by the distributor on the said activity
customer, as part of warranty on of providing replacement of parts and/
behalf of the manufacturer? or repair services to the customer.
However, if any additional consideration
is charged by the distributor from the
customer, the customer, either for
replacement of any part or for any
service, then GST will be payable on
such supply with respect to such
additional consideration.
4 In the above scenario where the (a) There may be cases where the
distributor provides replacement of distributor replaces the part(s) to
parts to the customer as part of the customer under warranty either
warranty on behalf of the by using his stock or by purchasing
manufacturer, whether any supply is from a third party and charges the
involved between the distributor and consideration for the part(s) so
the manufacturer and whether the replaced from the manufacturer, by
distributor would be required to issuance of a tax invoice, for the
reverse the input tax credit in said supply made by him to the
respect of such replacement of parts? manufacturer. In such a case, GST
would be payable by the distributor
on the said supply by him to the

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manufacturer and the manufacturer

would be entitled to avail the input
tax credit of the same, subject to
other conditions of CGST Act. In
such case, no reversal of input tax
credit by the distributor is
required in respect of the same.
(b) There may be cases where the
distributor raises a requisition to
the manufacturer for the part(s) to
be replaced by him under warranty
and the manufacturer then provides
the said part(s) to the distributor
for the purpose of such
replacement to the customer as
part of warranty.
In such a case, where the
manufacturer is providing such
part(s) to the distributor for
replacement to the customer during
the warranty
period, without separately charging
any consideration at the time of
such replacement, no GST is
payable on such replacement of
parts by the manufacturer.
Further, no reversal of ITC is
required to be made by the
manufacturer in respect of the
parts so replaced by the distributor
under warranty.
(c) There may be cases where the
distributor replaces the part(s) to
the customer under warranty out of
the supply already received by him
from the manufacturer and the
manufacturer issues a credit note
in respect of the parts so replaced
subject to provisions of Section
34(2) of the CGST Act.
Accordingly, the tax liability may be

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adjusted by the manufacturer,

subject to the condition that the
said distributor has reversed the
ITC availed against the parts so
replaced.
(d) There may be cases where the
distributor replaces the goods or its
parts to the customer under
warranty by using his stock and then
raises a requisition to the
manufacturer for the goods or the
parts, as the case may be. The
manufacturer then provides the said
goods or the parts, as the case may
be, to the distributor through a
delivery challan, without separately
charging any consideration at the
time of such replenishment. In such a
case, no GST is payable on such
replenishment of goods or the parts,
as the case may be. Further, no
reversal of ITC is required to be
made by the manufacturer in respect
of the goods or the parts, as the
case may be, so replenished to the
distributor. – Circular No.
216/10/2024GST dated 26-06-2024
5. Where the distributor provides repair In such scenario, there is a supply of
service, in addition to replacement ofservice by the distributor and the
parts or otherwise, to the customer manufacturer is the recipient of such
without any consideration, as part of supply of repair services in accordance
warranty, on behalf of thewith the provisions of Section 2(93)(a)
manufacturer but charges theof the CGST Act, 2017.
manufacturer for such repair services Hence, GST would be payable on such
either by way of issue of tax invoice provision of service by the distributor
or a debit note, whether GST would to the manufacturer and the
be payable on such activity by the manufacturer would be entitled to avail
distributor? the input tax credit of the same,
subject to other conditions of CGST
Act.
6 Sometimes companies provide offers (a) If a customer enters in to an
of Extended warranty to the agreement of extended warranty
customers which can be availed at the with the manufacturer at the time

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time of original supply or just before of original supply, then the

the expiry of the standard warranty consideration for such extended
period. Whether GST would be warranty becomes part of the value
payable in both the cases? of the composite supply, the
principal supply being the supply of
goods, and GST would be payable
accordingly.
(b) However, in case where a consumer
enters into an agreement of
extended warranty at any time
after the original supply, then the
same is a separate contract and
GST would be payable by the
service provider, whether
manufacturer or the distributor or
any third party, depending on the
nature of the contract (ie. whether
the extended warranty is only for
goods or for services or for
composite supply involving goods
and services)

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APPORTIONMENT OF CREDIT AND BLOCKED CREDIT [SECTION 17]

Sec 17(1) Sec 17(2) ITC is Sec 17(4) a banking

Proportionate ITC to restricted to the extent company or a financial
the extent used for of taxable supplies institution including a
business purposes is including zero-rated non-banking financial
admissible when supplies, when company shall have the
goods/services are goods/services are option to either comply
partly used for partly used for with: provisions of sub-
other than business effecting exempt sec (2) OR Every month,
purposes. supplies including supplies 50% of the eligible ITC
under reverse charge on inputs, capital goods
basis. and input service in that
month and the balance
amount of input tax
Sec 17(6) attributable credit shall be reversed
credit to be in FORM GSTR-3B
determined in
accordance with rules

Sec 17(3) Inclusions in exempt supplies

and valuation, supplies under reverse
charge, transactions in securities, sale of
land and building when entire
consideration is received after completion
certificate is issued

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UTILIZATION OF INPUT TAX CREDIT

Availment of input tax credit [Section 41(1)] [Amended by Finance Act, 2022
w.e.f. 01-10-2022]: Every registered person shall, subject to such conditions
and restrictions as may be prescribed, be entitled to avail the credit of
eligible input tax, as self-assessed, in his return and such amount shall be
credited to his electronic credit ledger.
Reversal of credit if tax has not been paid by the supplier [Section 41(2)]:
The credit of input tax availed by a registered person in respect of such
supplies of goods or services or both, the tax payable whereon has not been
paid by the supplier, shall be reversed along with applicable interest, by the
said person in such manner as may be prescribed.
Re-availment of ITC when tax deposited by the supplier: Where the said
supplier makes payment of the tax payable in respect of the aforesaid
supplies, the said registered person may re-avail the amount of credit
reversed by him in such manner as may be prescribed.
CGST credit – CGST and uske baad IGST se use ho sakti hai
SGST credit – SGST and uske baad IGST se use ho sakti hai
IGST credit – IGST uske baad CGST and uske baad SGST se use ho sakti hai
CGST credit – SGST se use nahi ho sakti hai
SGST credit – CGST se use nahi ho sakti hai
Clarification in respect of utilization of input tax credit under GST (circular no.
98/17/2019-GST dated 23-04-2019) –
ITC of integrated tax can be utilized towards the payment of central tax and state
tax/Union territory tax, in any order subject to the condition that the entire ITC on
account of integrated tax is completely exhausted first before the input tax credit
on account of central tax or state tax/ union territory tax can be utilized.

Rule 86A – conditions of use of amount available in electronic credit ledger

(1) Restriction on utlization of balance in ErcL – Conditions:
(a) The credit of input tax has been availed on the strength of tax invoices or
debit notes or any other document
(i) Issued by a registered person who has been found non-existent or not
to be conducted any business from any place for which registration has
been obtained; or
(ii) Without receipt of goods or services or both; or
(b) Tax has not been paid to the government

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(c) Registered person availing any credit of input tax is not in possession of a tax
invoice or debit note or any other document.
(2) Maximum period of restriction – one year
Rule 86B – Restrictions on use of amount available in electronic credit ledger
Applicability of Rule 86B – registered person having value of taxable supply
(other than exempt supply and zero-rated supply) in a month exceeding ₹ 50
lakh.
Nature of restriction imposed – ITC to be utilized to the extent of 99% of the
output tax liability.
Non applicability –
a) Payment of income tax of more than ₹ 1,00,000 – registered person,
proprietor or karta or the managing director, any of its tow partners,
whole-time directors, members of managing committee of association or
board of trustees, as the case may be in each of the two financial year
for which time limit to file return of income has expired under section
139(1).
b) Refund of ITC of more than ₹ 1,00,000 – on account of zero rated
supply or on account of inverted tax structure.
c) Cumulative discharge of tax liability of more than 1% during the
financial year. (reverse charge liability not included)
d) Specified registered person – government department, a public sector
undertaking, local authority, statutory body.

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AVAILABILITY OF CREDIT IN SPECIAL CIRCUMSTANCES (Section 18)

Mandatory Inputs, semi-finished On the day immediately ITC to be availed

preceding the date from within 1 year from
registration goods, finished
which he becomes liable the date of the issue
(applied within 30 goods
to pay tax
days) of the tax invoice

Inputs, semi-finished
Voluntary On the day ITC to be availed within
goods, finished
registration immediately 1 year from the date of
goods
preceding the date the issue of the tax
of registration invoice
Inputs, semi-
Person ceases to finished goods, On the day • ITC on capital goods
finished goods, immediately preceding will be reduced by 5%
pay tax under
the date from which per quarter of a year
composition capital goods
he becomes liable to
scheme or part thereof.
pay tax
• ITC to be availed
Input held in stock ,semi within 1 year from the
Exempt supply -finished good, finished On the day date of issue of tax
into taxable goods, capital goods as immediately preceding invoice
reduced for exclusively the date from which he
supply • ITC claimed to be
used for exempt supply becomes liable to pay
verified.
tax

• Time limit for filing declaration within 30 days

• Certification by CA/CMA if the claim of ITC exceed ₹ 200000.
• verification of ITC claimed with details furnished by supplies – in GSTR-1 and
in FORM GSTR-1A if any [inserted vide notification no. 12/20204-CT dated
10/7/2024 ]

Manner of claiming credit in special circumstances (Rule 40)

Capital Goods ▪ ITC shall be claimed after reducing tax paid by 5% points per
Sec 18(1)(c) &(d) quarter of a year or part thereof
▪ From date of invoice or such other documents.

E form &Time ▪ Within 30 days from date of becoming eligible to avail ITC
u/s.18(1) or as extended
limit
▪ Declaration in Form GST ITC 01

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MANNER OF REVERSAL OF CREDIT UNDER SPECIAL CIRCUMSTANCES [Rule 44]

(1) Reversal of ITC [Rule 44(1)]:
(a) For inputs – credit to be calculated proportionately on the basis of
corresponding invoices
(b) For capital goods – credit to be calculated on pro rata basis taking useful
life of capital goods 5 years
(2) Tax invoice of inputs not available – credit amount to be estimated on basis of
market price.
(3) Furnishing of details of credit – FORM GST ITC-03

ITC IMPLICATIONS ON SUPPLY OF CAPITAL GOODS OR PLANT AND MACHINERY ON

WHICH ITC HAS BEEN TAKEN [ section 18(6) read with rule 40(2) of CGST rules, 2017]

(1) supply of plant and machinery after use – shall pay higher of the following
amount:
 an amount equal to the ITC taken on the said capital goods or plant and
machinery reduced @ 5% points for every quarter or part thereof from the
date of issue of invoice or
 the tax on the transaction value
(2) refractory bricks, moulds and dies, jigs and fixtures are supplied as scrap –
tax leviable on transaction value is to be paid
(3) amount determined is greater than tax on transaction value – to be added to
output tax liability.

CHANGE IN CONSTITUTION SEC 18(3)

Change in On account of Transfer of unutilized

➢ Sale ITC in the books allowed
constitution
➢ Merger to such :
of registered
➢ Sale
taxable ➢ Demerger
➢ Merger
person ➢ Amalgamation
➢ Demerger
➢ Lease
➢ Amalgamation
➢ Transfer of
➢ Lease
business
➢ Transfer of business

TRANSFER OF CREDIT ON SALE, MERGER, AMALGAMATION ,

RULE 41 LEASE OR TRANSFER OF BUSINESS

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• Transfer of unutilized ITC lying in Electronic Credit Ledger to

transferee
• Form GST ITC- 02
• In case of Demerger ITC shall be apportioned in ratio of value
E- FORM of assets as over scheme.
• Value of assets means value of entire assets of business
whether ITC availed or not.

• Certificate by practicing Chartered Accountant or Cost

Accountant
CERTIFICATE • Certifying transfer of business has been done with a specific
provision for the transfer of liabilities.

ACCEPTANCE • Post filing of GST ITC -02

• Transferee shall accept in common portal details furnished by
transferor

• Inputs and capital goods so transferred shall be duly

ACCOUNTING
accounted by the transferee in his books of accounts.

• Transfer of credit on obtaining separate registration for

multiple places of business within a state or UT
RULE 41 A • ITC in electronic credit ledger to newly registered unit
• Within 30 days from obtaining registration
• Form GST ITC-02
• Acceptance by transferee

TRANSFER OF CREDIT ON OBTAINING SEPARATE REGISTRATION FOR MUTIPLE PLACES

OF BUSINESS WITHIN A STATE OR UNION TERRIORY [Rule 41A]
(1) Details of transfer of ITC to be furnished on account of separate registration for
multiple places of business – FORM GST ITC – 02A
(2) Transfer details to be accepted by transferee.

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CHAPTER – 9: REGISTRATION
NEED FOR REGISTRATION
1. Advantages of registration:
Legally recognized as supplier of goods or services.
Proper accounting of taxes paid
Legally authorized to collect tax
2. No centralized registration
3. No tax specific registration
PERSON LIABLE FOR REGISTRATION [ SECTION 22 ]
Threshold limit for registration:
States with threshold States with threshold States with threshold limit of
limit of Rs 10 lakh for limit of Rs 20 lakh for Rs 20 lakh for services and
both goods and both goods and services Rs 40 lakh for goods (i.e
services persons engaged exclusively in
supply of goods)
Manipur, Mizoram, Arunachal Pradesh, Jammu and Kasmir, Assam,
Nagaland, Tripura Meghalaya, Sikkim, Himachal Pradesh, All other
Uttarakhand, Puducherry, states
Telangana

Analysis of aggregate turnover:

1. Aggregate turnover to include total turnover of all branches with same PAN.
2. Outward supplies taxed on reverse charge basis – to be included in turnover of
the supplier.
3. Aggregate turnover to include all supplies made on behalf of principal
4. Supply of goods by job worker to be included in supplies of principal
PERSONS NOT LIABLE FOR REGISTRATION - SEC 23
Aggregate Turnover < 20 L/10L No registration in following cases

Persons not ✓ Person exclusively engaged in the business of

supplying goods/ services that are not liable to tax.
liable for
✓ Persons exclusively engaged in the business of
registration
supplying goods/services that are wholly exempt
in GST from tax
✓ Agriculturist, to the extent of supply of produce
out of cultivation of land

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Sec. 23(2)

The Government may, on the recommendations of

the council, by notification, specify the category
of persons who may be exempted from
registration under this act.

Persons
making
reverse Persons
charge supplying Supplier
supply e.g. through Persons making
of goods Persons making
Advocates, E- interstate Job-workers
having interstate
GTA. taxable engaged in
commerc aggregate supplies of
supplies of making
e turnover taxable
notified interstate
not services having
handicraft supply of
exceeding aggregate
goods upto Rs services-
40L turnover not
20L (Rs 10L in exempt from
exceeding 20L
case of special obtaining
category registration
states)
EXCEPT

➢ Persons required to get compulsory registration

➢ Supplier of Ice cream , pan masala , Tobacco, fly ash bricks or fly ash aggregate,
fly ash blocks, bricks of fossil meals or similar siliceous earths, building bricks and
earthen or roofing tiles
➢ Persons engaged in making intra state supply in special category states.
➢ Persons exercising options of voluntary registration. Sec.25(3)
➢ Registered persons who intend to continue with their registration.

Services provided by the commission agent for sale/purchase of agriculture produce:

A commission agent making supplies on behalf of such an agriculturist – not a taxable
person – is not liable for compulsory registration. However, where a commission agent
is liable to pay tax under reverse charge, such an agent will be required to get
registered compulsory.
Aggregate Turnover means the aggregate value of all taxable supplies (excluding the
Value of inward supplies, on which tax is payable on reverse charge basis), exempt

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supplies, export of goods or services or both or inter-state supplies of people having

same permanent account Number, to be computed in all India basis but excludes
central tax, state tax, Union territory tax, Integrated tax and cess.
Exemption to persons making supply of goods through e-commerce operator subject to
fulfillment of specified conditions:

The Central Government has exempted the persons making supplies of goods through
an electronic commerce operator who is required to collect tax at source u/s 52 of
the said Act and having an aggregate turnover in the preceding financial year and in
the current financial year not exceeding the amount of aggregate turnover above
which a supplier is liable to be registered in the State or Union territory in
accordance with the provisions of Section 22(1) of the said Act, from obtaining
registration under the said Act, subject to the following conditions, namely:
(i) such persons shall not make any inter-State supply of goods;
(ii) such persons shall not make supply of goods through electronic commerce operator
in more than one State or Union territory;
(iii) such persons shall be required to have a Permanent Account Number issued under
the Income-tax Act, 1961;
(iv) such persons shall, before making any supply of goods through electronic
commerce operator, declare on the common portal their Permanent Account Number
issued under the Income-tax Act, 1961, address of their place of business and the
State or Union territory in which such persons seek to make such supply, which shall
be subjected to validation on the common portal;
(v) such persons have been granted an enrolment number on the common portal on
successful validation of the Permanent Account Number;
(vi) such persons shall not be granted more than one enrolment number in a State or
Union territory;
(vii) no supply of goods shall be made by such persons through electronic commerce
operator unless such persons have been granted an enrolment number on the common
portal; and
(viii) where such persons are subsequently granted registration under section 25 of
the said Act, the enrolment number shall cease to be valid from the effective date
of registration.
- Notification No. 34/2023- CT dated 31-7-2023 w.e.f 01-10-2023 J

COMPULSORY REGISTRATION UNDER CERTAIN CASES [ SECTION 24 ]

(i) Persons making any inter-state taxable supply: (C.G has granted exemption
from registration to person making interstate supplies of taxable services
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having aggregate turnover not exceeding up to Rs 20 lakh/Rs 10 lakh in

special category states)
(ii) Casual Taxable persons making taxable supply: [Sec2(20) “Casual taxable
person” means a persons who occasionally undertakes transactions involving
supply of goods or services or both in the course or furtherance of
business, whether as a principal agent or in any other capacity, in a state
or a Union Territory where he has no fixed place of business.] C.G has
granted exemption from interstate registration up to Rs 20 lakh/Rs 10 lakh
in special category states.
Compulsory Registration u/s 25 (without any turnover limit)
1. Persons liable to pay tax under RCM
2. Electronic commerce Operator [covered un section 9(5)]
3. Non - resident taxable person
4. Persons required to deduct tax u/s 51
5. Supplier of goods on behalf of other taxable person whether as agent or
otherwise
6. Input service distributor
7. Person who Supplies Goods/services through E-commerce Operator who are
required to collect TCS. (however person who are suppliers of service and
supplying services through e-commerce operator are not required to get
registered if there aggregate turnover does exceed the limit specified) other
than section 9(5)
8. Every E-commerce operator required to deduct TCS u/s 52
9. Every person supplying OIDAR services outside India, other than registered
person
10. Any person or class of person notified by CG
PROCEDURE FOR REGSITRATION [ SECTION 25 ]
(1) Application to be made within 30 days in every state/ UT in which such person
is liable for registration.
Supplier making supply from territorial water of India (TWI) – registration to
be obtained from nearest costal state or union territory
Separate registration of SEZ units and NON – SEZ units.
(2) One registration per state: we declare one place as Principal place of business
(PPOB) and branches as Additional place of business (APOB) for single
registration within state. However separate registration can be obtained for
multiple place of business in a state/UT.
(3) Voluntary registration – all provisions of registration applicable.
(4) Person having more than one registration – each registration to be treated as
distinct persons.
(5) Premises in separate states – deemed distinct person.

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(6) PAN mandatory for registration, however TAN is required by a person who is
required to deduct tax u/s 51
(7) Non-resident taxable person – registration can be granted on basis of other
documents.
(8) Failure to obtain registration – then officer may compel to mandatory register.
(9) UIN to be granted to specialized agency of UNO/consulate/embassy of foreign
country/other notified persons.
(10) RC/UIN to be granted or rejected after due verification within 3 days.
(11) RC to be issued in prescribed form.
(12) RC/UIN nor granted within prescribed period – deemed to be granted.
(13) Aadhaar Authentication of registered person: every person shall undergo
authentication, or furnish proof of possession of Aadhar number. Alternate
means of authentication if Aadhar number not assigned. If authentication
failed then registration invalid.
(14) Non-individuals – authentication by Aadhaar number of authorised persons
The central government as the date from which the -
(a) Authorised signatory of all types;
(b) Managing and authorised partners of a partnership firm; and
(c) Karta of an hindu undivided family,
Shall undergo authentication of possession of Aadhaar number, as specified in
rule 8 of the CGST rules, 2017, in order to be eligible for registration under
GST
(15) Non-applicability [ section 25(6D)]:
Persons exempted from Aadhaar authentication: the central government, on the
Recommendations of the council, hereby notifies that Aadhaar authentication
provisions shall not apply to a person who is not a citizen of India or to a class
of persons other than the following class of persons, namely -
(a) Individual;
(b) Authorised signatory of all types;
(c) Managing and authorised partner; and
(d) Karta of an hindu undivided family
Application for registration [ Rule 8 of CGST Rules, 2017]
• Aadhaar authentication [Rule 8(4A)]: where an applicant, other than a person
notified under section 25(6D), opts for authentication of Aadhar number, he
shall, while submitting the registration application, w.e.f 21-8-2020, undergo
authentication of Aadhar number and the date of submission of the application
in such cases shall be the date of authentication of the Aadhar number, or 15
days from the submission of the application in Part B of FORM GST REG-01,
whichever is earlier.

AADHAAR BASED GST REGISTRATION PROCEDURE

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GST Registration (w.e.f. 21st August,, 2020)

Aadhaar authentication Without Aadhaar authentication

After submission of application an After submission of application

authentication link will be sent to
registered mobile number and E-mail Officer will conduct physical verification
of place of business within 30 days of
Successful Aadhaar authentication through application
Aadhar OTP
After physical investigation of POB in
RC to be granted within 7 days of presence, RC will be granted
authentication or else deemed registered

PO fails to issue SCN within 30 days of

If fails to authenticate through Aadhaar application then deemed RC
OTP

Note: if Tax official raises SCN within 30 days working days , then applicant will have to reply
within 7 working days. Tax official can take further action on that reply within 7 working
days. If Tax official doesn’t take any action within 7 working days, then application will be
deemed approved after 7 working days.

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PART II
Proper officer issues notice electronically, within 7 working
Proper officer examines the application
and accompanying documents days from application date thereby seeking clarification,
information or document from the applicant.
Notice may be issued not later than 30 days from application
If same are found in order…? submission date in case where a person fails to undergo aadhaar
authentication/ does not opt for aadhaar authentication or PO
Yes deems is fit to carry out site verification

No
Within 7 If applicant has furnished the clarification, information or
working days documents within 7 working days from receipt of notice..?
from the date
of submission Yes
of application
No
If proper officer is satisfied with it…?
Yes
Within 7 working
days from the date of
Proper officer will grant registration receipt of
certificate in FORM GST REG-06 information/
clarification/
document

Proper officer may reject the application

for reasons to be recorded in writing

Deemed approval of application

If the proper officer fails to take any action -
• Within 7 working days from the date of submission of application, or
• Within 30 days from the date of submission of application where a person fails to
undergo Aadhaar authentication or doesn’t opt for the same
• Within 7 working days from the date of receipt of clarification, information or
documents furnished by the applicant,
The application for grant of registration shall be deemed to have been approved.

Application for registration [Rule 8 of CGST Rules, 2017]:

Aadhaar Authentication [Rule 8(4A) & (4B)]: Where an applicant, other than a
person exempt from Aadhar authentication, opts for authentication of

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Aadhaar number, he shall, while submitting theapplication, undergo

authentication of Aadhaar number.
The date of submission of the application in such cases shall be -
(a) the date of authentication of the Aadhaar number, or
(b) 15 days from the submission of the application in Part B of FORM GST
REG-01,
whichever is earlier:
Biometric-based Aadhaar authentication: Every application made under by a
person, other than a person exempt from Aadhar authentication, who has opted
for authentication of Aadhaar number and is identified on the common
portal, based on data analysis and risk parameters, shall be followed by
biometric-based Aadhaar authentication and taking photograph of the applicant
where the applicant is an individual or of such individuals in relation to the
applicant as notified u/s 25(6C) where the applicant is not an individual, along
with the verification of the original copy of the documents uploaded with the
application in FORM GST REG-01 at one ofthe notified Facilitation Centers and
the application shall be deemed to be complete only after completion of the said
process.
The Central Government may notify the States or Union territories wherein the
provisions of biometric-based Aadhaar authentication will not apply.
It has been further provided that every application made under Rule 8(4) by a person, other
than a person exempt from Aadhar authentication, who has not opted for authentication of
Aadhaar number, shall be followed by taking photograph of the applicant where the applicant
is an individual or of such individuals in relation to the applicant as notified under Section
25(6C) where the applicant is not an individual, along with the verification of the original copy
of the documents uploaded with the application in FORM GST REG-01 at one of the
Facilitation Centers notified by the Commissioner for the purpose of this sub-rule and the
application shall be deemed to be complete only after successful verification as specifed here.
[Inserted vide Notification No. 12/2024-CT dated 10-07-2024 w.e.f. yet to be notified]

Verification of the application and approval [Rule 9 of CGST Rules, 2017]:

(1) Application found in order - Approval to grant RC within 7 working days[Rule

9(1)]: The application shall be forwarded to the proper officer who shall
examine the application and the accompanying documents and if the same
are found to be in order, approve the grant of registration to the applicant
within a period of 7 working days from the date of submission of the

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application.
However, where-
(a) a person, other than a person exempt from Aadhar authentication, fails to
undergo authentication of Aadhaar number or does not opt for
authentication of Aadhaar number; or
(b) a person, who has undergone authentication of Aadhaar number, is
identified on the common portal, based on data analysis and risk
parameters, for carrying out physical verification of places of business; or
(c) the proper officer, with the approval of an officer authorised by the
Commissioner not below the rank of Assistant Commissioner, deems it fit
to carry out physical verification of places of business,
the registration shall be granted within 30 days of submission of
application, after physical verification of the place of business in the
manner provided under rule 25and verification of such deem fit.
2) Deficiency found in application - E-Notice within 7 working days [Rule9(2)]:
Where the application submitted is found to be deficient, either in
terms of any information or any document required to be furnished under
the said rule, or where the proper officer requires any clarification with
regard to any information provided in the application or documents
furnished therewith, he may issue a notice to the applicant electronically
in FORM GST REG-03 within a period of 7 working days from the date of
submission of the application.
(a) a person, other than a person exempt from Aadhar authentication, fails
to undergo authentication of Aadhaar number or does not opt for
authentication of Aadhaar number; or
(b) a person, who has undergone authentication of Aadhaar number, is
identified on the common portal based on data analysis and risk
parameters, for carrying out physical verification of places ofbusiness; or
(c) the proper officer, with the approval of an officer authorised by the
Commissioner not below the rank of Assistant Commissioner, deems it fit
to carry out physical verification of places of business,
the notice in FORM GST REG-03 may be issued not later than 30 days from the
date of submission of the application.
E-Clarification, information etc. within 7 working days of receipt of notice: The
applicant shall furnish such clarification, information or documents electronically, in
FORM GST REG-04, within a period of 7 working days from the date of the
receipt of such notice.
PHYSICAL VERIFICATION OF BUSINESS PREMISES IN CERTAIN CASES [RULE
25]
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(1) Physical verification after grant of registration: Where the proper officer is
satisfied that the physical verification of the place of business of a person is
required after the grant of registration, he may get such verification of the place of
business done and the verification report along with the other documents, including
photographs, shall be uploaded in FORM GST REG-30 on the common portal within a
period of 15 working days following the date of such verification.

(2) Physical verification before grant of registration: Where the physical verification
of the place of business of a person is required before the grant of registration in
the circumstances specified in the proviso to Rule 9(1), the proper officer shall get
such verification of the place of business done and the verification report along with
the other documents, including photographs, shall be uploaded in FORM GST REG-30
on the common portal at least 5 working days prior to the completion of the time
period specified in the said proviso.

ISSUE OF REGISTRATION CERTIFICATE [ RULE OF CGST Rules, 2017 ]

(1) Grant of RC on approval of application – 15 digit GSTN: in FORM GST REG-06
(2) If application made within 30 days – registration effective from the date on
which the person become liable to registration.
(3) If application not made within 30 days – registration effective from the date
of grant of registration.
(4) RC to be digitally signed
(5) Grant of RC within 7 working days.
(6) Furnishing of Bank Account Details [Rule 10A]: After a certificate of
registration in FORM GST REG-06 has been made available on the common
portal and a GSTIN has been assigned, the registered person, except those
who have been granted registration under rule 12 (ie. registered persons
required to deduct tax at source or to collect tax at source) or, as the case
may be rule 16 (ie. persons who take suo motu registration), shall -
➢ within a period of 30 days from the date of grant of registration, or
➢ before furnishing the details of outward supplies of goods or services or
both under section 37 in FORM GSTR-1 or using invoice furnishing facility,
whichever is earlier, furnish information with respect to details of bank account on
the common portal.

Aadhar authentication for registered person [ rule 10B]

Purposes for which aadhar authentication is required: The registered person,
other than a person notified u/s 25(6D), who has been issued a certificate of
registration shall, undergo authentication of the aadhaar number for the
following purposes:

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(a) For filing of application for revocation of cancellation of registration in

FORM GST REG-21 under Rule 23
(b) For filing of refund application in FORM RFD-01 under rule 89
(c) For refund under rule 96 of the integrated tax paid on goods exported out
of India.
Persons whose Aadhar authentication will be done:
Category of persons Person whose Aadhar authentication is required
1. Proprietorship firm, Proprietor
2. Partnership firm Any partner
3. HUF Karta
4. Company MD or WTD
5. AOP/BOI/Society Any of the members of the managing director,
6. Trust Trustee in the board of trustees or authorized
signatory
Documents to be furnished if aadhar number is not assigned: if aadhar number
has not been assigned to the person required to undergo authentication of the
aadhar number, such person shall furnish the following identification documents
namely:-
(a) His/her aadhar enrolment ID slip; and
(b) (i) bank passbook with photograph; or
(ii) voter identity card or
(iii) passport; or
(iv) driver license
Such person shall undergo the authentication of Aadhaar number within a period of 30
days of the allotment of the aadhar number.
SEPARATE REGISTRATION FOR MULTIPLE PLACES OF BUSINESS WITHIN A
STATE OR UNION TERRITORY [ RULE 11 ]
(1) Conditions:
(a) More than one place of business
(b) Person not paying tax under section 10
(c) All separately registered places of business of such person paying tax
(2) Separate registration application for each places of business: in FORM GST
REG-01
(3) Verification and grant of registration certificate.
SUO MOTO REGISTRATION [ RULE 16 OF CGST Rules 2017 ]
(1) Temporary registration by proper officer: in FORM GST REG-12
(2) Effective date of registration: date of granting of order.

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(3) Application for registration to be made within 90 days of temporary

registration; if appeal filed against order of temporary registration is
dismissed – within 30 days of appellate order
(4) Verification and grant of registration certificate.
(5) GSTIN to be effective from the date of temporary registration.
DISPLAY OF REGISTRATION CERTIFICATE AND GSTIN ON THE NAME BOARD [
RULE 18 OF CGST RULES, 2017]
(1) RC to be displayed at principal and additional place of business.
(2) GSTIN to be displayed on the name board.
METHOD OF AUTHENTICATION [ RULE 26 OF CGST RULES, 2017 ]
E-application, replies etc. to be authenticated by E-signature. Digital signature
mandatory for companies. E-notices certificates, etc to be authenticated by DSC.
ASSIGNMENT OF UIN TO CERTAIN SPECIAL ENTITIES [ RULE 17 OF CGST
RULES, 2017 ]
(1) E-Application for grant of UIN: in FORM GST REG-13
(2) UIN applicable to the territory of India.
(3) UIN to be assigned and RC to be given within 3 working days: from the date
of submission of the application
DEEMED REGISTRATION [ SECTION 26 ]
(1) RC/UIN granted under SGST/UTGST Act – deemed registration under CGST
Act.
(2) Rejection of registration application under SGST/UTGST Act – deemed
rejection under CGST Act
EXTENSION IN PERIOD OF OPERATION BY CASUAL TAXABLE PERSON AND
NON-RESIDENT TAXABALE PERSON [ RULE 15 OF CGST RULES, 2017 ]
(1) Application for extension before the end of the validity of registration period:
in FORM GST REG-11
(2) Acknowledgement of application only on advance deposit of tax.
(3) Casual taxable person(CTP) – advance tax to be deposited while taking
registration should be 100% of the estimated tax liability payable in cash i.e.
estimated gross tax liability after deducting the due eligible ITC which might
be available to CTP
AMENDEMENT OF REGISTRATION [ SECTION 28 ]
(1) Change in formation relating to RC/UIN to be furnished to proper officer:
within 15 days from such change.
(2) Approval / rejection of amendments: in such form manner as may be
prescribed.
Opportunity of being heard must be given before rejection.

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(3) Rejection or approval of amendments under SGST/UTGST act – deemed

rejection or approval under CGST.
AMENDMENT FOR REGISTRATION [ RULE 19 OF CGST RULES, 2017 ]
(1) E-application for change in particulars within 15 days of such change: in FORM
GST REG – 14.
Approval of amendment:
(a) In case of amendment of core fields of information, approval of amendment
within 15 days :Where the change relates to core field
(i) of information i.e., legal name of business;
(ii) address of the principal place of business (PPoB) or any additional
place(s) of business (APoB); or
(iii) addition, deletion or retirement of partners or directors, Karta,
Managing Trustees, Chief Executive Officer or equivalent,
responsible for the day to day
Committee, Board of affairs of the business,
which does not warrant cancellation of registration under Section 29, the
proper officer shall, after due verification, approve the amendment within a
period of 15 working days from the date of the receipt of the application
in FORM GST REG-14 and issue an order in FORM GST REG-15
electronically and such
amendment shall take effect from the date of the occurrence of the event
warranting such amendment;
(b) Change to be effective in all registrations obtained on basis of same PAN :
The change relating to core field information in any State or Union
territory shall be applicable for all registrations of the registered person
obtained under the provisions of this Chapter on the same PAN;
(c) Where change relates to non-core fields of information To be effective
upon submission of the application: Where the change relates to any
particulars other than those specified in (a) above, the certificate of
registration shall stand amended upon submission of the application in FORM
GST REG-14 on the common portal;
Change in the mobile number or e-mail address of the authorised signatory
Online verification for such change through OTP: Any change in the mobile
number or e-mail address of the authorised signatory submitted under this
rule, as amended from time to time, shall be carried out only after online
verification through the common portal in the manner provided under Rule
8(2).
(d) Fresh registration in case of change in PAN: person shall apply for fresh
registration in FORM GST REG-01.
(2) Retrospective amendment to be effective on commissioner’s order.

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(3) SCN to be issued prior to rejection of amendment application: within a period

of 15 working days in FORM GST REG -14, serve a notice in FORM GST REG
-03, required the registered person to show cause , within a period of 7 days
(4) Reply to SCN within 7 days in FORM GST REG-04
(5) Rejection of application in FORM GST REC -05
(6) Deemed amendment: if the proper officer fails to take any action-
(a) Within a period of 15 working days
(b) Within a period of 7 working days
CANCELLATION OR SUSPENSION OF REGISTRATION [ SECTION 29 ]
(1) Cancellation of registration either suo motu or an application by registered person:
The proper officer may –
 either on his own motion, or
 on an application filed by the registered person, or by his legal heirs, in
case of death of such person,
cancel the registration, in such manner and within such period as may be
prescribed,
Circumstances in which Registration is Cancelled: The registration can be cancelled
having regard to the following circumstances where, -
(a) the business has been
 discontinued,
 transferred fully for any reason including death of the proprietor,
 amalgamated with other legal entity,
 demerged, or
 otherwise disposed of; or
(b) there is any change in the constitution of the business; or
(c) the taxable person, other than the person registered under Section 25(3) i.e.
Voluntary Registration, is no longer liable to be registered under Section 22 or
Section 24.
Suspension of registration during pendency of cancellation of proceedings: During
pendency of the proceedings relating to cancellation of registration filed by the
registered person, the registration may be suspended for such period and in such
manner as may be prescribed.
Cancellation of registration by proper officer - Reasons thereof [Section 29(2) and
Rule 21 of CGST Rules, 2017]: The proper officer may cancel the registration of a
person from such date, including any retrospective date, as he may deem fit,
where,-
a) a registered person has contravened such provisions of the Act or the rules made
thereunder i.e. –
i. he does not conduct any business from the declared place of business; or

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ii. he issues invoice or bill without supply of goods or services or both in

violation of the provisions of this Act, or the rules made thereunder.
iii. he violates the provisions of Section 171 [i.e. Anti Profiteering Measure] of
the Act or the rules made thereunder;
iv. violates the provision of rule 10A (i.e. Furnishing of Bank Account Details)
v. avails input tax credit in violation of the provisions of section 16 of the Act
or the rules made thereunder; or
vi. furnishes the details of outward supplies in FORM GSTR-1 as amended
GSTR-1A if any [amended by notification no. 12/2024-CT dated
10/7/2024], under section 37 for one or more tax periods which is in
excess of the outward supplies declared by him in his valid return under
section 39 for the said tax periods; or
vii. violates the provision of rule 86B i.e. utlises ITC in excess of 99% of
output tax liability; or
viii. violates the provisions of third or fourth proviso to Rule 23(1) [Amended by
notification no. 12/2024-CT dated 10/7/2024]
ix. being a registered person required to file return u/s 39(1) for each month
or part thereof, has not furnished returns for a continuous period of six
months;
x. being a registered person required to file return u/s 39(1) under QRMP
scheme for each quarter or part thereof, has not furnished returns for a
continuous period of two tax periods.
b) a person paying tax under section 10 (ie. composition supplier) has not furnished
the return for a financial year beyond three months from the due date of
furnishing the said return; or
c) any registered person, other than a composition supplier, has not furnished
returns for a such continuous tax period as may be prescribed; or
d) any person who has taken voluntary registration under Section 25(3) has not
commenced business within 6 months from the date of registration; or
e) registration has been obtained by means of fraud, wilful misstatement or
suppression of facts.
Opportunity of being heard before cancellation.
Suspension of registration during pendency of cancellation of proceedings.
(2) Cancellation of registration – not to affect tax liability
(3) Cancellation under SGST/UGST Act – deemed cancellation under CGST ACT.
(4) On cancellation – pay ITC availed on goods in stock or output tax whichever is
higher.
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(5) On cancellation – payment in respect of capital goods shall be amount equal to ITC
taken on capital goods as reduced by the percentage i.e. ITC involved in the
remaining useful life of the capital goods will be reversed on pro-rata basis,
taking the useful life as 5 years or tax on transaction value, whichever is
higher.
PROCEDURE FOR CANCELLATION OF REGISTRATION [ RULE 20 OF CGST RULES,
2017 ]
(1) Application for cancellation of registration – a registered person other than,
TDS or UIN in Form GST Reg-16 including therein details of inputs, liability
and payment within a period of 30 days
SUSPENSION OF REGISTRATION [ RULE 21A ]
(1) Deemed suspension on application for cancellation of registration.
(2) Suspension shall be by proper officer [without affording the said person
reasonable opportunity of being heard ]
(3) Suspension of registration on account significant differences or anomalies in
returns and statement of outward/ inward supplies [Rule 21A(2A)]:
Where,-
(a) a comparison of the returns furnished by a registered person under section
39 with the details of outward supplies furnished in FORM GSTR-1 an amended
in FORM GSTR-1A if any, [Amended by notification no. 12/2024-CT dated
10/7/2024] or the details of inward supplies derived based on the details of
outward supplies furnished by his suppliers in their FORM GSTR-1 or in FORM
GSTR-1A of the previous tax period, if any, or such other analysis, as may be
carried out on the recommendations of the Council, show that there are
significant differences or anomalies indicating contravention of the provisions of
the Act or the rules made there under, leading to cancellation of registration
of the said person, or
(b) there is a contravention of the provisions of rule 10A by the registered
person i.e. bank account details has not been furnished, the registration of
such person shall be suspended.
Said person shall be intimated in FORM GST REG-31, electronically, on the
common portal, or by sending a communication to his e-mail address provided
at the time of registration or as amended from time to time.
In this intimation for suspension and notice for cancellation of registration, the
said differences, anomalies or non-compliances and asking him to explain,
within a period of 30 days, as to why his registration shall not be cancelled.
(4) Taxable supplies not to be effected / return not to be filed during suspension

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(5) In a case where the cancellation is initiated by the department on its own and
registration of a person has been suspended, such person shall not be granted
any refund under section 54 of the CGST act, during the period of suspension
of his registration.
(6) Revocation of suspension [Rule 21A(4)]: The suspension of registration under
21A(1)/(2)/(2A) shall be deemed to be revoked upon completion of the
proceedings by the proper officer under rule 22 and such revocation shall be
effective from the date on which the suspension had come into effect.
However, the suspension of registration under this rule may be revoked by the
proper officer, anytime during the pendency of the proceedings for
cancellation, if he deems fit.
(7)

Revocation of suspension on furnishing of returns: Where the registration has

been suspended under Rule 21A(2A) for contravention of the provisions
contained in section 29(2)(b)/(c) i.e. non furnishing of returns and the
registration has not already been cancelled by the proper officer under rule
22, the suspension of registration shall be deemed to be revoked upon
furnishing of all the pending returns.
(8) Revised tax invoice and first return provisions applicable in respect of the
supplies made during the period of suspension and the procedure specified
therein shall apply.
CANCELLATION OF REGSITRATION [ RULE 22 OF CGST RULES, 2017 ]
(1) SCN for cancellation of registration in FORM GST REG – 17 within a period of
7 working days from the date of service of notice
(2) Reply to SCN in FORM GST REG – 18 within 7 days working days from the
date of service of notice
(3) Order for cancellation of registration in FORM GST REG – 19 within a period
of 30 days from the date of application or the date of reply to the show cause
issued.
(4) Dropping of proceedings for cancellation of Registration [Rule 22(4)]: Where
the reply furnished under rule 22(2) or in response to the notice issued under
rule 21(2A) is found to be satisfactory, the proper officer shall drop the
proceedings and pass an order in FORM GST REG-20.
However, where the person instead of replying to the notice served under rule
22(1) for contravention of the provisions contained in Section 29(2)(b)/(c) [i.e.
failure to furnish returns for a continuous period of 6 months or 2 tax periods,
as the case may be (return for a F.Y. beyond 3 months from due date of
furnishing the said return in case of composition scheme supplier], furnishes all
the pending returns and makes full payment of the tax dues along with

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applicable interest and late fee, the proper officer shall drop the proceedings
and pass an order in FORM GST-REG 20.
(5) Shall apply to legal heirs.
REVOCATION FOR CANCELLATION OF REGISTRATION [ SECTION 30 ]
(1) Application for restoration of registration to be made within 90 days from the
service of cancellation order – in such manner, within such time and subject to
such conditions and restrictions, as may be prescribed.
(2) Acceptance/rejection of application – opportunity of heard must be given.
(3) Restoration of RC under STCG/UTCG act – deemed restoration under CGST
Act.
REVOCATION OF CANCELLATION OF REGISTRATION [ RULE 23 OF CGST RULES,
2017]
(1) Restoration Application to be filed in 90 days - [Rule 23(1)]: A registered
person, whose registration is cancelled by the proper officer on his own motion,
may, subject to the provisions of rule 10B, submit an application for revocation
of cancellation of registration, in FORM GST REG-21, to such proper officer,
within a period of 90 days from the date of the service of the order of
cancellation of registration, at the common portal, either directly or through a
Facilitation Centre notified by the Commissioner.
Extension - 180 days: Such period may, on sufficient cause being shown, and
for reasons to be recorded in writing, be extended by the Commissioner or an
officer authorised by him in this behalf, not below the rank of Additional
Commissioner or Joint Commissioner, as the case may be, for a further period
not exceeding 180 days.
Cancellation on account of failure to furnish returns - Restoration Application
shall not be filed 01-10-2023 until returns furnished and tax has been paid:
No application for revocation shall be filed, if the registration has been
cancelled for the failure of the registered person to furnish returns, unless
such returns are furnished and any amount due as tax, in terms of such
returns, has been paid along with any amount payable towards interest, penalty
and late fee in respect of the said returns.
(2) Order for approval / rejection of restoration application:
(a) Order for approval of restoration application in FORM GST REG – 22 within
a period of 30 days
(b) Order for rejection of restoration application in FORM GST REG -05.
(3) Issuance of SCN before rejection in FORM GST REG – 24 within a period of 7
working days.
(4) Disposal of application in FORM GST REG – 24 within a period of 30 days from
the date of the receipt of such information or clarification from the applicant.

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CHAPTER – 10: TAX INVOICE, CREDIT &DEBIT NOTES AND E-

WAY BILL
Invoice requirement in case of export/SEZ supplies: same as in case of tax invoice
except where the recipient is unregistered and value of supply is Rs 50000 or more,
instead of name of the state and its code, in case of an export invoice, name of the
country of destination is to be mentioned.
Tax invoice [Rule 46]:- Quick response code, having embedded invoice reference
number (IRN) in it, in case e-invoice has been issued under Rule 48(4).
➢ A declaration as below, that an e-invoice is not required to be issued u/r
48(4), in all cases where an invoice is issued, other than an e-invoice, by the
taxpayer having aggregate turnover in any preceding financial year from 2017-
18 onwards more than ₹ 5 crores.

If recipient is Particulars of invoice

unregistered and value
of supply is-
➡ ₹ 50,000 or more; Name and address of the recipient and the
address of delivery, along with the name of
the State and its code;
➡ ₹ less than 50,000. Un-registered recipient may still request the
aforesaid details to be recorded in the tax
invoice;
However, where any taxable service is
supplied by or through an ECO or y a supplier
of OIDAR services to a recipient who is
unregistered, respective of the value of such
supply, a tax invoice issued by the gistered
person shall contain the name and address of
the recipient ong with its PIN code and the
name of the State of the recipient and the
same shall be deemed to be the address on
record of the recipient

Invoice having QR code: The central government has notified that –

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➢ An invoice issued by a registered person, whose aggregate turnover in any

preceding financial year from 2017-18 onwards exceed ₹ 500 crore
➢ Other than those referred to Rule 54(2)/(3)/(4)/(4A) (i.e service suppliers
of notified services), and registered person referred to in section 14 of
the IGST Act, 2017 (i.e OIDAR service suppliers)
➢ To an unregistered person (hereinafter referred to as B2C invoice), shall
have Dynamic QR code.
However, where such registered person makes a Dynamic QR code available
to the Recipient through a digital display, such B2C invoice issued by such
registered person containing cross-reference of the payment using a Dynamic
QR code, shall be deemed to be having QR code.
Clarification in respect of applicability of Dynamic Quick Response (QR) code on B2C
invoices (circular)
Issues Clarification
1 To which invoice is Notification This notification is applicable to a tax invoice
No 14/2020-CT dated 21-03- issued to an unregistered person by a
2020 applicable? Would this registered person (B2C invoice) whose annual
requirement be applicable on aggregate turnover exceeds ₹500 crore in
invoices issued for supplies made any of the financial years from 2017-18
for Exports? onwards.
However, the said notification is not
applicable to an invoice issued in following
cases:
(i) Where the supplier of taxable service is:
(a) an insurer or a banking company or a
financial institution, including a non-banking
company;
(b) a goods transport agency supplying
services in relation to transportation of
goods by road in a goods carriage;
(c) supplying passenger transportation
service;
(d) supplying services by way of admission
to exhibition of cinematograph in films in
multiplex screens.
(ii) OIDAR supplies made by any registered
person, who has obtained registration under
section 14 of the IGST Act 2017, to an
unregistered person.
As regards the supplies made for exports,
though such supplies are made by a

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registered person to an unregistered person,

however, as e-invoices are required to be
issued in respect of supplies for exports, in
terms of Notification no. 13/2020-CT,
dated 21-03-2020 treating them as Business
to Business (B2B) supplies, Notification no.
14/2020-CT dated 21-03-2020 will not be
applicable to them.
• Relaxation in respect of quoting of HSN/accounting code: the board may, on the
recommendations of the council, by notification, specify –
(i) The number of digits of harmonised system of Nomenclature code for
goods or services that a class of registered persons shall be required to
mention; or
(ii) A class of supply of supply of goods or services for which specified number
of digits of Harmonised system a Nomenclature code shall be required to
be mentioned by all registered taxpayers; and
(iii) The class of registered persons that would not be required to mention the
Harmonised system of Nomeclature code for goods or services.
Sl.No. Annual Turnover in the preceding Financial Year Number of Digit of HSN
Code
1. Upto Rs 5 crores 4
2. More than Rs 5 crores 6
However, a registered person having aggregate turnover up to Rs 5 crores in the
previous financial year may not mention 4 digit of HSN Code in a tax invoice issued
by him under the said rules in respect of supplies made to unregistered persons.

Invoice-cum-bill of supply [Rule 46A]: Where a registered person issupplying

taxable as well as exempted goods or services or both to an unregistered
person, a single "invoice-cum-bill of supply" may be issued for all such
supplies. The said single "invoice-cum-bill of supply" shall contain the
particulars as specified under rule 46 or rule 54, as the case may be, and
rule 49.

MANNER OF ISSUING INVOICE [ RULE 48 ]

SUPPLY OF GOODS SUPPLY OF SERVICE
Triplicate Duplicate
Original copy for recipient Original copy for recipient
Duplicate copy for transporter and Duplicate copy for supplier
Triplicate copy for supplier

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The serial no. of invoices issued during the month/quarter shall be furnished
electronically in FORM GSTR – 1 or in FORM GSTR-1A, if any [ inserted vide
notification no. 12/2024-CT dated 10/7/2024]
E – invoicing [ Rule 48(4)]: The invoice shall be prepared by such class of
registered persons as may be notified by the government, on the
recommendations of the council, by including such particulars contained in
FORM GST INV-01 after obtaining an Invoice Reference Number by uploading
information contained therein on the common Goods and Service Tax Electronic
Portal in such manner and subject to such conditions and restrictions as may be
specified in the notification.
Exemption by commissioner: However, the Commissioner through notification
may exempt a person or a class of registered persons from issuance of e-
invoice for a specified period, subject to such conditions and restrictions as
may be specified in the said notification.
Applicability of e-invoice – more than ₹ 5 crore from 1st Aug 2023
Invoices other than E-invoice – not regarded as invoice [ Rule 48(5)]
E-invoicing not applicable to a government department and a local authority
All registered businesses with an aggregate turnover in any preceding financial year
from 2017-18 onwards greater than ₹ 5 crore are mandatory required to issue e-
invoices except –
Special economic zone units
Insurer or banking company or financial institution including NBFC
GTA supplying services in relation to transportation of goods by road in a goods
carriage
Supplier of passenger transportation service
Person supplying services by way of admission to exhibition of cinematograph
films in multiplex screens
Government department
Local authority
Exemption from generation of e-invoices is for the entity as a whole and is
not restricted by the nature of supply being made by the said entity.

E-invoices are required to be issued for the supplies made to such Government
Departments or establishments/ Government agencies/ local authorities/ PSUs, etc.
who are registered only for the purpose of tax deduction at source. - Circuiar No.
198/10/2023-GST dated 17-07-2023
Issue Clarification
Whether e-invoicing is Government Departments or establishments/ Government
applicable for supplies agencies/ local authorities/ PSUs, which are required to
made by a registered deduct tax at source as per provisions of section 51 of

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person, whose turnover the CGST/SGST Act, are liable for compulsory
exceeds the prescribed registration in accordance with section 24(vi) of the
threshold for generation CGST Act.
of e-invoicing, to Therefore, Government Departments or establishments/
Government Departments Government agencies/ local authorities/ PSUs,
or establishments/ registered solely for the purpose of deduction of tax at
Government agencies/ source as per provisions of section 51 of the CGST Act,
local authorities/ PSUs are to be treated as registered persons under the GST
which are registered law as per provisions of Section 2 (94) of CGST Act.
solely for the purpose of Accordingly, the registered person, whose turnover
deduction of tax at exceeds the prescribed threshold for generation of e-
source as per provisions invoicing, is required to issue e-invoices for the supplies
of section 51 of the made to such Government Departments or
CGST Act establishments/ Government agencies/ local authorities/
PSUs, etc under rule 48(4) of CGST Rules

REVISED TAX INVOICE

• Revised tax invoice to be issued in respect of taxable supplies affected during the
period from effective date of registration to date of issuance of certificate of
registration.
• Revised invoice may be issued within 1 month.
• Consolidated revised tax invoice in respect of taxable supplies to an unregistered
person, if the value of supply does not exceed Rs 200000.
• Tax invoice is not required to be issued if value of supply is less than Rs 200 +
recipient is unregistered + recipient does not require such invoice. Then
consolidated tax invoice can be issued at the end of each day.
RECEIPT VOUCHER
When the recipient pay an advance to supplier, then supplier issue receipt voucher to
recipient.
When at the time of receipt of advance rate is
not identifiable 18%
Nature of supply is not determinable Treated as interstate supply

REFUND VOUCHER
Refund voucher if no supply is made and advance refunded (no supply is made and no
tax invoice is issued)
INVOICE REQUIREMENT IN CASE OF REVERSE CHARGE
➢ Where the recipient is registered and receives the supplies taxable on reverse
charge basis u/s 9(3)/(4)[whether supplier is registered or not]: recipient will
issue payment voucher at the time of making payment to supplier.

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➢ Where the recipient is registered and receives the supplies taxable on reverse
charge basis u/s 9(3)/(4)[whether supplier is unregistered ]: recipient will issue
invoice.
BILL OF SUPPLY
(1) Bill of supply instead of tax invoice to be issued in case of exempted supply or
composition scheme
(2) No bill of supply if value is less than Rs 200.
(3) It shall contain QR code
(4) However, the government may, by notification, on the recommendations of the
council, and subject to such conditions and restrictions as mentioned therein,
specify that the bill of supply shall have Quick Response (QR) code.
TAX INVOICE IN SPECIAL CASES
(1) Relaxation from issuance of tax invoice in respect of notified services.
(2) Notified supplies:
(a) Insurers, banks etc. – consolidated monthly tax invoice may be issued – no
serial numbering and no address of service recipient.
(b) GTA – additional requirements as may be prescribed.
(c) Passenger transportation service – ticket is invoice
(d) Multiplex screens exhibiting films – electronic ticket is invoice
SOME IMP CIRCULARS
 Goods moved within the state or from the state of registration to another
state for supply on approval basis – removal under delivery challan – on
conformation of sale IGST payable.
 Removal of art work by an artist to art galleries for exhibition is in various
states is not regarded as supply and supply of goods by artist to customers
from galleries will be liable to GST. Supplies of art work to galleries – not
regarded as supply and not liable to GST.
 Goods sent/taken out of India for exhibition or on consignment basis for
export promotion – not supply, hence cannot be regarded as zero-rated supply.
PROHIBITION OF UNAUSTHORISED COLLECTION OF TAX
Unregistered person not to collect tax. Amount of tax to be indicated in tax invoice and
other document

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CREDIT NOTE AND DEBIT NOTE

Scenarios of
Credit/Debit Note

Section 34(1) Section 34(3)

Taxable Tax Goods are Goods are Taxable Tax

value > charged> returned found to value < charged<
Actual value by be Actual value
Actual tax Actual tax
recipient deficient

The registered person, who has supplied such goods or The registered person, who has supplied such
services or both, may issue to the recipient one or more goods or services or both, may issue to the
credit note for supplies made in a financial year recipient one or more credit note for supplies
containing such particulars as may be as prescribed made in a financial year containing such
particulars as may be as prescribed

Details of credit note to be given in Return [Section

34(2)] Sec 34(4) Any regd
Any registered person who issues a credit note in person who issues a
relation to a supply of goods or services or both
debit note in relation to
shall declare the details of such credit note-
➢ in the return for the month during which such a supply of goods or
credit note has been issued but not later than services or both shall
30th November following the end of the declare the details of
financial year in which such supply was made, or such debit note in the
➢ the date of furnishing of the relevant annual return for the month
return,
during which such debit
whichever is earlier, and the tax liability shall be
note has been issued.
adjusted in such manner as may be prescribed

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ELECTRONIC WAY BILL (E-WAY BILL)

E-WAY BILL: A way bill is a receipt or a document issued by a carrier giving details
and instructions relating to the shipment of a consignment of goods and the details
include name of consignor, consignee, the point of origin of the consignment, its
destination and route.

1. Physical interface to pave way for digital interface resulting in

elimination of state boundary check posts.
BENEFIT
2. It will facilitate faster movement of goods.
S OF E-
3. It will improve the turnaround time of trucks and helps the
WAY
logistics industry by increasing the average distance travelled as
BILL
well as time and costs.

Inspection of goods in Movement ( Section 68)

1. Carrying of E-WAY Bill (sec 68(1)): The govt. may require person in charge of
conveyance to carry the e-way bill.
2. Validation of E-way Bill Section 68(2): The details of documents should be
validated.
3. Transit check of E-way Bill Section 68(3): Where any conveyance is intercepted
by the proper officer at any place, he may require the person in charge of the
said conveyance to produce the documents prescribed.

Every Registered person 1. In relation to supply or,

who causes movement of
2. For reasons other than supply or,
goods of consignment
value exceeding 3. due to inward supply from an unregistered person
Rs.50000 -

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.

(3) Who is mandatorily required to generate e-way bill?

E-way bill is to be generated by the consignor or consignee himself if the

transportation is being done in own/hired conveyance or by railways by air or by
vessel. If the goods are handed over to a transporter for transportation by road, e-
way bill is to be generated by the transporter. Where neither the consignor nor
consignee generates the e-way bill and the value of goods is more than ` 50,000, it

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shall be the responsibility of the transporter to generate it. This has been explained
in detail below:

• Where the goods are transported by a registered person – whether as consignor

or recipient as the consignee (whether in his own conveyance or a hired one or a
public conveyance, by road), the said person shall have to generate the e-way bill
(by furnishing information in part B on the common portal) [Rule 138(2)].
• Where the e-way bill is not generated by the registered person and the goods
are handed over to the transporter, for transportation of goods by road, the
registered person shall furnish the information relating to the transporter in Part
B on the common portal and the eway 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.
• Where the goods are transported by railways or by air or by vessel, the e-way
bill shall be generated by the registered person, being the supplier or the
recipient, who shall, either before or after the commencement of movement,
furnish, information in part B [viz transport document number (Goods Receipt
Number or Railway Receipt Number or Airway Bill Number or Bill of Lading
Number)] on the common portal [Rule 138(2A)].
Other important points :
(i) Where the goods are transported by railways: There is no requirement to
carry e-way bill along with the goods, but railways has to carry invoice or
delivery challan or bill of supply as the case may be along with goods.
Further, e-way bill generated for the movement is required to be produced at
the time of delivery of the goods. Railways shall not deliver goods unless the
e-way bill required under rules is produced at the time of delivery [Proviso to
rule 138(2A)].
(ii) Optional generation of e-way bill: The registered person or, the transporter
may, at his option, generate and carry the e-way bill even if the value of the
consignment is does not exceed ₹ 50,000 [First proviso to rule 138(3)].
(iii) 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 [Second proviso to rule 138(3)].
(iv) An unregistered person required to generate e-way bill in FORM GST EWB-01
or an unregistered person opting to generate e-way bill in Form GST EWB-01,
on the common portal, shall submit the details electronically on the common
portal in FORM GST ENR03 either directly or through a Facilitation Centre
notified by the Commissioner and, upon validation of the details so furnished,
a unique enrolment number shall be generated and communicated to the said
person.[ Inserted vide Notification No. 12/2024-CT dated 10.07.2024.]
(v) Where the goods are supplied by an unregistered supplier to a recipient who is

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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 1 to rule 138(3)].

Special situations where e-way bill need to be issued even if the value of consignments is
less than Rs.50000:
(1) Inter-State transfers of goods by Principal to job Worker: where goods sent by
principal to job worker from one territory/state to another territory/state, the e-
way bill shall be generated either by principal or job worker irrespective of
consignment value.
(2) Interstate transfer of handicraft goods by a person exempted from obtaining registration.

Validity period of E-way Bill consolidated E-way Bill (Rule 138(10)

1. Upto 200 km – one day in cases of over dimensional cargo or multimodal shipment
in which at least one leg involves transport by ship.
2. For every 200km or part thereof – one day additional in case of over dimensional
cargo or multimodal shipment in which at least one leg involves transport by ship.
3. Upto 20 KM – ONE day in case of over dimensional cargo or multimodal shipment
in which at least one leg involves transport by ship.
4. For every 20 km. or part thereof – one additional day in case of over
dimensional cargo or multimodal shipment in which at least one leg involves
transport by ship.

 Cancellation of E-way: within 24 hours of generation

 Acceptance or rejection of E-way bill: if E-way bill is not accepted within 72
hours from the time of generation of E-way bill or the time of delivery of
goods whichever is earlier, it will be deemed he has accepted the details.
 Inspection and verification of goods report to be submitted within 3 days of
such inspection
Restriction on furnishing of information in PART A of FORM GST EWB-01 [RULE
138E] – no person shall be allowed to furnish the information in PART A of FORM
GST EWB-01, in respect of any outward movement of goods of a registered person,
who,
Non furnishing of CMP-08 statement for consecutive two quarters
Non furnishing of GSTR-3B returns for consecutive two months
Non furnishing of GSTR-1 statement for any two months/quarters
Registration suspended
E-way bill generation facility to be blocked only in respect of outward movements of
goods, by the defaulting registered person [Rule 138E]

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Blocking of GSTIN for e-way bill generation would only be for the defaulting supplier
GSTIN and not for the defaulting recipient or transporter GSTIN. Suspended GSTIN
cannot generate e-way bill as supplier. However, the suspended GSTIN can get the
e-way bill generated as recipient or as transporter.
In other words, e-way bill generation facility is blocked only in respect of any
outward movement of goods of the registered person who is not eligible for e-way bill
generation as per rule 138E. E-way bills can be generated in respect of inward
supplies of said registered person.

Exemption from generation of e-invoices is for the entity as a whole and is

not restricted by the nature of supply being made by the said entity.

(16) Situations where E-way bill not required to be generated [Rule 138(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 Annexure contains a list of
items where e-way bill is not required to be generated being –
S.No. Description of Goods
1. LPG for supply to household and non-domestic exempted category (NDEC)
customers;
2. Kerosene oil sold under PDS
3. Postal baggage transported by Department of Posts
4. Natural or cultured pearls and precious or semi-precious stones precious
metal and metals clad with precious metals (Chapter 71)
5. Jewellery, goldsmiths’ and silversmiths’ wares and other articles (Chapter 71)
“excepting Imitation Jewellery (7117)”
6. Currency
7. Used personal and household effects
8. Used personal and household effects

(b) where the goods are being transported by a non-motorised conveyance;

(c) where the goods are being transported from the customs port, airport, air cargo
complex and land customs station to an inland container depot or a container
freight station for clearance by Customs;
(d) in respect of movement of goods within such areas as are notified under rule
138(14)(d) of the Goods and Services Tax Rules of the concerned State or Union
Territory;
(e) where the goods, other than de-oiled cake, being transported, are specified in
the Schedule appended to Notification No. 2/2017-CT (Rate) dated the 28-06-
2017 as amended from time to time;

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(f) where the goods being transported are alcoholic liquor for human consumption,
petroleum crude, high speed diesel, motor spirit (commonly known as petrol),
natural gas or aviation turbine fuel;
(g) where the supply of goods being transported is treated as no supply under
Schedule III of the Act;
(h) where the goods are being transported—
(i) under customs bond from an inland container depot or a container freight
station to a customs port, airport, air cargo complex and land customs station,
or from one customs station or customs port to another customs station or
customs port, or
(ii) under customs supervision or under customs seal;
(i) where the goods being transported are transit cargo from or to Nepal or Bhutan;’
(j) where the goods being transported are exempt from tax under notification No.
7/2017-CT (Rate), dated 28-06-2017 as amended from time to time and
notification No. 26/2017-CT (Rate), dated 21-09-2017 as amended from time to
time;
(k) any movement of goods caused by defence formation under Ministry of defence as
a consignor or consignee;
(l) where the consignor of goods is the Central Government, Government of any
State or a local authority for transport of goods by rail;
(m) where empty cargo containers are being transported;
(n) where the goods are being transported upto a distance of 20 kms from the place
of the business of the consignor to a weighbridge for weighment or from the
weighbridge back to the place of the business of the said consignor subject to
the condition that the movement of goods is accompanied by a delivery challan
issued in accordance with Rule 55, and
(o) where empty cylinders for packing of liquefied petroleum gas are being moved for
reasons other than supply.
Explanation: The facility of generation, cancellation, updation and assignment of e-
way bill shall be made available through SMS to the supplier, recipient and the
transporter, as the case may be.

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CHAPTER – 11: ACCOUNTS AND RECORDS

11.2 ACCOUNTS AND OTHER RECORDS [SECTION 35]

(1) List of records and place of maintenance of records [Section 35(1)]:

Every registered person shall keep and maintain, at his principal place of business,
as mentioned in the certificate of registration, a true and correct account of-
(a) production or manufacture of goods;
(b) inward supply of goods or services or both;
(c) outward supply of goods or services or both;
(d) stock of goods;
(e) input tax credit availed;
(f) output tax payable and paid; and
(g) such other particulars as may be prescribed.

Records to be maintained at each place of business

Records found at other places - Presumption thereof [Rule 56(10)]:

"Place of business" includes-

(a) a place from where the business is ordinarily carried on, and includes a
warehouse, a godown or any other place where a taxable person stores his
goods, supplies or receives goods or services or both; or
(b) a place where a taxable person maintains his books of account; or
(c) a place where a taxable person is engaged in business through an agent, by
whatever name called. [Section 2(85)]
"Principal place of business" means the place of business specified as the principal
place of business in the certificate of registration. [Section 2(89)]

(2) Records prescribed by the Rules [Rule 56(1)]: As prescribed by CGST Rules,
2017 following records are required to be maintained:
(a) Accounts and documents pertaining to goods or services imported or exported
etc. to be kept: Every registered person shall keep and maintain, in addition to
the particulars mentioned in Section 35(1), a true and correct account of-
(i) the goods or services imported or exported, or
(ii) 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.

(b) Commodity wise stock account to be maintained by non-composition supplier

[Rule 56(2)]
(c) Separate accounts for advances [Rule 56(3)]

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(d) Accounts containing tax details [including ITC] to be kept by person other than
composite supplier [Rule 56(4)]
(e) Suppliers, Recipients and Storage Details [Rule 56(5)]: Every registered person
shall keep the particulars of –
a) suppliers from whom he has received the goods or services.
b) Person to whom he has supplied goods or services.
c) Premises where goods are stored by him.

(3) Additional accounts or documents by Notified Persons [Section 35(3)]

(4) Relaxation in manner of maintenance of records [Section 35(4)]

(5) Non accountal of goods or services - Deemed supply - Liable for tax [Section
35(6)]
(6) Tax payable on goods stored at undeclared places without valid documents [Rule
56(6)]: the proper officer shall determine the amount of tax payable on such goods
as if such goods have been supplied by the registered person.

11.3 PERIOD OF RETENTION OF ACCOUNTS [SECTION 36]

(1) Accounts to be kept for 72 months from the due date of furnishing of Annual
return

(2) Accounts pertaining to subject matter of appeal etc. - to be kept for a period
of ONE year after final disposal of such appeal etc. or for 72 months from the
due date of furnishing of annual return which ever period expires later

11.4 RECORDS WHICH ARE TO BE MAINTAINED ONLY BY A SUPPLIER OTHER

THAN A SUPPLIER OPTING FOR COMPOSITION LEVY [RULE 56(2) & (4)]

A supplier who has opted for composition scheme is not required to maintain such
records.

(1) Commodity wise stock account

(2) Accounts containing tax details including ITC

11.5 RECORDS TO BE MAINTAINED BY AGENT [RULE 56(11)]

1. Meaning of Agent: Agent means a person, including a factor, broker,

commission agent, arhatia, del credere agent, an auctioneer or any other
mercantile agent, by whatever name called, who carries on the business of
supply or receipt of goods or services or both on behalf of another [Section
2(5)].
2. Records to be maintained by Agent [Rule 56(11)]: Every agent referred to in
Section 2(5) shall maintain accounts depicting the,-

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(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 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.

11.6 RECORDS TO BE MAINTAINED BY A MANUFACTURER [RULE 56(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.

11.7 RECORDS OF SERVICE SUPPLIERS [RULE 56(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.

11.8 RECORDS BY CARRIER AND C&F AGENTS [RULE 56(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.

11.9 RECORDS OF WORKS CONTRACTORS [RULE 56(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

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(e) the names and addresses of suppliers from whom he received goods or
services.

11.10 RECORDS TO BE MAINTAINED BY OWNER OR OPERATOR OF GODOWN

OR WAREHOUSE AND TRANSPORTERS [SECTION 35 (2) READ WITH RULE 58]
(1) Obligation of Owner/Operator of Warehouse and Transporter to Maintain
Records [Section 35(2)]: Every owner or operator of warehouse or godown or any
other place used for storage of goods and every transporter, 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.

(2) Records to be maintained by owner or operator of godown or warehouse and

transporters [Rule 58]:

(a) Enrolment, if not already registered in GST - Business details to be submitted:

Generation and communication of unique enrollment number

(b) Application for unique common enrollment number: A transporter who is

registered in more than one State or Union Territory having the same Permanent
Account Number, he may apply for a unique common enrolment number by
submitting the details in FORM GST ENR-02 using any one of his GSTIN's, and
upon validation of the details furnished, a unique common enrolment number shall
be generated and communicated to the said transporter.
However, where the said transporter has obtained a unique common enrolment
number, he shall not be eligible to use any of the GSTIN for the purposes of E-
Way Bills under Chapter XVI of these rules.
(c) Deemed enrollment if already enrolled in other state or UT:

(d) Amendment of details

(e) Type of records: The following records are to be maintained-

(i) Records to be maintained by a transporter:
(ii) Records to be maintained by an owner/operator of a warehouse/godown:
(f)Manner of storage of goods by warehouse owner/operator: 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.

11.11 MAINTENANCE OF ACCOUNTS BY REGISTERED PERSONS [RULE 56]

(1) Records may be in electronic form [Rule 56(15)]

(2) Accounts to be kept all places mentioned in RC [Rule 56(7)]
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(3) No entry to be erased/overwritten [Rule 56(8)]: Any entry in registers,

accounts and documents shall not be erased, effaced or overwritten. All incorrect
entries, otherwise than those of clerical nature, shall be scored out under
attestation and there after correct entry shall be recorded. Where the registers
and other documents are maintained electronically, a log of every entry edited or
deleted shall be maintained.
(4) Serial Number [Rule 56(9)]
(5) Production of records on demand [Rule 56(18)]
(6) Preservation of records [Rule 56(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 (i.e., 72 months from
the due date of furnishing of annual return for the year pertaining to such
accounts and records) 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.

11.12 GENERATION AND MAINTENANCE OF ELECTRONIC RECORDS [RULE 57]

(1) Back up of e-records

(2) Production of hard copy or soft copy on demand
(3) Audit trail etc. to be produced

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CHAPTER – 12: PAYEMENT OF TAX

PAYMENT OF TAX, INTEREST, PENALTY AND OTHER AMOUNT [ SECTION 49 ]
(1) Amount deposited to be credited to the electronic cash ledger: by internet
banking, debit card or credit card, NEFT, RTGS and other mode as may be
prescribed.
(2) ITC credited to electronic credit ledger.
Transfer of CGST to IGST/ SGST/UTT in electronic cash ledger of the same or
distinct person [Section 49(10)]: A registered person may, on the common portal,
transfer any amount of tax, interest, penalty, fee or any other amount available in
the electronic cash ledger under this Act, to the electronic cash ledger for,-
a) integrated tax, central tax, State tax, Union territory tax or
b) integrated tax or central tax of a distinct person as specified in Section
25(4)/(5),in such form and manner and subject to such conditions and restrictions
as may be prescribed and such transfer shall be deemed to be a refund from the
electronic cash ledger under this Act.
However, no such transfer under Section 49(10) (b) shall be allowed if the said
registered person has any unpaid liability in his electronic liability register.
Utilisation of amount in Electronic credit ledger - For payment of output fax under
CGST and IGST Act [Section 49(4)]: The amount available in the electronic credit
ledger may be used for making any payment towards output tax under this Act or
under the IGST Act in such manner and subject to such conditions and restrictions
within such time as may be prescribed.
Maximum proportion of output tax liability to be discharged through E-credit ledger
to be specified (Section 49(12)]
Order of discharge of liabilities [Section 49(7)]: Every taxable person shall discharge
his tax and other dues under this act or the rules made thereunder in the following
order namely-

(a) self assessed tax, and other dues of previous tax period
(b) self assessed tax, and other dues of current tax period
(c) any other amount payable under this act or the rules made thereunder including
the demand determined under section 73 or section 74

ELECTRONIC CASH LEDGER [ RULE 87]

(1) Shall be maintained in FORM GST PMT – 05
(2) Generation of challan in FORM GST PMT – 06, validity for a period of 15days

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(3) It reflect all deposit made in cash, and TDS/TCS made on account of the tax
payer.
(4) Ledger can be used for making any payment towards tax, interest, penalty,
fees or any other amount on GST
Modes of deposit of amount in Electronic Cash Ledger [Rule 87(3)]: The deposit under
Rule 87(2) shall be made through any of the following modes, namely:-
i. Internet Banking through authorised banks;
ii. Unified Payment Interface (UPI) from any bank;
iii. Immediate Payment Services (IMPS) from any bank;
iv. Credit card or Debit card through the authorised bank;
v. National Electronic Fund Transfer or Real Time Gross Settlement from any
bank; or
vi. Over the Counter payment through authorised banks for deposits up to 10,000
per challan per tax period, by cash, cheque or demand draft.

Mandate form for NeFT or RTGS payments [Rule 87(5)]: Where the payment is made
by way of National Electronic Fund Transfer or Real Time Gross Settlement or
Immediate Payment Service 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.
Transfer of amount from one account head to another – FORM GST PMT-09

Representation to bank on non generation of CIN despite payment [Rule 87(8)]:

Where the bank account of the person concerned, or the person making the deposit
on his behalf, is debited but no CIN 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.
However, where the bank fails to communicate details of CIN to the
Common Portal, the E-Cash Ledger may be updated on the basis of e-Scrollof the
RBI in cases where the details of the said e-Scroll are inconformity with
the details in challan generated in FORM GST PMT-06 on the Common Portal.

Transfer of cash balance to distinct person [Rule 87(14)]: A registered person may,
on the common portal, transfer any amount of tax, interest, penalty, fee or any
other amount available in the electronic cash ledger under the Act to the electronic
cash ledger for central tax or integrated tax of a distinct person as specified in
Section 25(4)/(5), in FORM GST PMT-09.

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However, no such transfer shall be allowed if the said registered person has any
unpaid liability in his electronic liability register.

ELECTRONIC CREDIT LEDGER [ RULE 86]

• Shall be maintained in FORM GST PMT -02
• Re-credit in FORM GST PMT-03
• Communication of discrepancy in FORM GST PMT-04
• It will reflect ITC as self assessed in monthly returns
• The credit in this ledger can be used to make payment of ONLY TAX i.e.
output tax not other amount such as interest, penalty, fees etc.
Repayment of erroneous refund - to be credited to ledger [Rule 86(4B)]: Where a
registered person deposits the amount of erroneous refund sanctioned to him,-
a) under Section 54(3) of the Act, or
b) under Rule 96(3), in contravention of Rule 96(10),
along with interest and penalty, wherever applicable, through FORM GST DRC-03, by
debiting the electronic cash ledger, on his own or on being pointed out, an amount
equivalent to the amount of erroneous refund deposited by the registered person shall
be re-credited to the electronic credit ledger by the proper officer by an order
made in FORM GST PMT-03A.

ELECTRONIC LIABILITY REGISTER [ RULE 85]

▪ Shall be maintained in FORM GST PMT – 01
▪ Discrepancy to be communicated in FORM GST PMT – 04
▪ It reflects the total tax liability of a tax payer (after netting ) for a month.
INTEREST ON DELAYED PAYMENT [ SECTION 50 ]
֎ Interest payable on delayed payment of tax not exceeding 18% from the date
following the due date of payment to the actual date of payment of tax
֎ Interest payable on net amount payable through E-cash ledger: The interest
on tax payable in respect of supplies made during a tax period and declared in
the return for the said period furnished after the due date in accordance with
the provisions of Section 39, except where such return is furnished after
commencement of any proceeding under section 73 or section 74 in respect of
the said period, shall be levied in that portion of the tax that is paid by
debiting the electronic cash ledger.
Thus, interest on delayed payment of tax is to be levied on the net tax
liability i.e after allowing the credit of input tax.
֎ Interest on wrong availment or utlisation of ITC [Section 50(3)] - Where the
input tax credit has been wrongly availed and utilised, the registered persons
shall pay interest on such input tax credit wrongly availed and utilised, at 18%.

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Manner of calculating interest on delayed payment of tax [Rule 88B]

(1) Supplies declared in the belated return filed for tax period - Interest payable on
tax paid through cash ledger: In case, where the supplies made during a tax period
are declared by the registered person in the return for the said period and the said
return is furnished after the due date in accordance with provisions of section 39,
except where such return is furnished after commencement of any proceedings under
section 73 or section 74 in respect of the said period, the interest on tax payable in
respect of such supplies shall be calculated on the portion of tax which is paid by
debiting the electronic cash ledger, for the period of delay in filing the said return
beyond the due date, @ 18% p.a.
Where any amount has been credited in the Electronic Cash Ledger as per provisions
of Section 49(1) on or before the due date of filing the said return, but is debited
from the said ledger for payment of tax while filing the said return after the due
date, the said amount shall not be taken into consideration while calculating such
interest if the said amount is lying in the said ledger from the due date till the date
of its debit at the time of filing return [Inserted vide notification no. 12/2024-CT
dated 10/7/2024]
(2) Other cases - Interest payable on outstanding amount: In all other cases, where
interest is payable in accordance with Section 50(1), the interest shall be calculated
on the amount of tax which remains unpaid, for the period starting from the date on
which such tax was due to be paid till the date such tax is paid, @ 18% p.a.
(3) Computation of Interest on wrongly availed and utlised ITC: In case, where
interest is payable on the amount of input tax credit wrongly availed and utilised in
accordance with Section 50(3), the interest shall be calculated on the amount of input
tax credit wrongly availed and utilised, for the period starting from the date of
utilisation of such wrongly availed input tax credit till the date of reversal of such
credit or payment of tax in respect of such amount, @18% p.a.
Utilisation of wrongly availed ITC: Input tax credit wrongly availed shall be construed
to have been utilised, when the balance in the electronic credit ledger falls below the
amount of input tax credit wrongly availed, and the extent of such utilisation of input
tax credit shall be the amount by which the balance in the electronic credit ledger
falls below the amount of input tax credit wrongly availed.
Date of utlisation of ITC: The date of utilisation of such input tax credit shall be
taken to be,-
a) the date, on which the return is due to be furnished under section 39 or the
actual date of filing of the said return, whichever is earlier, if the balance in
the electronic credit ledger falls below the amount of input tax credit wrongly
availed, on account of payment of tax through the said return; or

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b) the date of debit in the electronic credit ledger when the balance in the
electronic credit ledger falls below the amount of input tax credit wrongly
availed, in all other cases.
Clarification on charging of interest u/s 50(3) of the CGST Act, 2017, in cases of
wrong availment of IGST credit and reversal thereof. - Circular No. 192/04/2023-
GST dated 17-07-2023
Issue Clarification
1. In the cases of wrong availment of Since the amount of input tax credit
IGST credit by a registered person available in electronic credit ledger,
and reversal thereof, for the under any of the heads of IGST, CGST
calculation of interest under rule or SGST, can be utilized for payment of
88B of CGST Rules, whether the liability of IGST, it is the total input
balance of input tax credit available tax credit available in electronic credit
in electronic credit ledger under the ledger, under the heads of IGST, CGST
head of IGST only needs to be and SGST taken together, that has to
considered or total input tax credit be considered for calculation of interest
available in electronic credit ledger, under rule 88B of CGST Rules and for
under the heads of IGST, CGST and determining as to whether the balance in
SGST taken together, has to be the electronic credit ledger has fallen
considered. below the amount of wrongly availed
input tax credit of IGST, and to what
extent the balance in electronic credit
ledger has fallen below the said amount
of wrongly availed credit.
Thus, in the cases where IGST credit
has been wrongly availed and
subsequently reversed on a certain date,
there will not be any interest liability
under section 50(3) of CGST Act if,
during the time period starting from
such availment and up to such reversal,
the balance of input tax credit (ITC) in
the electronic credit ledger, under the
heads of IGST, CGST and SGST taken
together, has never fallen below the
amount of such wrongly availed ITC,
even if available balance of IGST credit
in electronic credit ledger individually
falls below the amount of such wrongly
availed IGST credit.

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However, when the balance of ITC,

under the heads of IGST, CGST and
SGST of electronic credit ledger taken
together, falls below such wrongly
availed amount of IGST credit, then it
will amount to the utilization of such
wrongly availed IGST credit and the
extent of utilization will be the extent
to which the total balance in electronic
credit ledger under heads of IGST,
CGST and SGST taken together falls
below such amount of wrongly availed
IGST credit, and will attract interest as
per section 50(3) of CGST Act, read
with section 20 of Integrated GST Act,
2017 and rule 88B (3) of CGST Rules.
2. Whether the credit of compensation As per proviso to section 11 of Goods
cess available in electronic credit and Services Tax (Compensation to
ledger shall be taken into account States) Act, 2017, input tax credit in
while considering the balance of respect of compensation cess on supply
electronic credit ledger for the of goods and services leviable under
purpose of calculation of interest section 8 of the said Act can be utilised
under rule 88B (3) of CGST Rules in only towards payment of compensation
respect of wrongly availed and cess leviable on supply of goods and
utilized IGST, CGST or SGST services.
credit. Thus, credit of compensation cess cannot
be utilized for payment of any tax under
CGST or SGST or IGST heads and/or
reversals of credit under the said
heads.
Accordingly, credit of compensation cess
available in electronic credit ledger
cannot be taken into account while
considering the balance of electronic
credit ledger for the purpose of
calculation of interest under Rule 88B(3)
of CGST Rules in respect of wrongly
availed and utilized IGST, CGST or
SGST credit.

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CHAPTER – 13: TAX DEDUCTION AT SOURCE

AND COLLECTION OF TAX AT SOURCE

14.2 TAX DEDUCTION AT SOURCE [SECTION 51]

TDS

person liable to deduct rate of deduction Due date of paymentof

threshold limit NO TDS
tax at source TDS to government

total value of supply when location of supplier when 10 days from

central and state CGST - 1% and SGST
under a contract > ₹ and place of supply is the end of the
government - 1%
2.5 lakhs exclusive of different from the state of month
GST as per invoice registration of recipient

local
authority

government
agencies

notified
goods

For the purpose of Section 51(1)(d), the following persons have been notified
(i) an authority or a board or any other body.
(a) set up by an Act of Parliament or a State Legislature, or
(b) established by any Government,
with 51% or more participation by way of equity or control, to carry out any function,
(ii) Society established by the Central Government or the State Government or a Local
Authority under the Societies Registration Act, 1860,
(iii) public sector undertakings.

14.3 REGISTRATION OF PERSONS LIABLE TO DEDUCT TAX AT SOURCE

(1) Registration of tax deductor:

A deductor has to compulsorily register without any threshold limit. The deductor has
a privilege of obtaining registration under GST without requiring PAN.

(2) Grant of registration to persons required to deduct tax at source [Rule 12 of

CGST Rules, 2017] :
(a) E-Application by tax deductor electronically: in FORM GST REG-07 for the
grant of registration through the common portal.
(b) Procedure if tax deductor do not have principal place of business in the
state in which registration application is made: shall mention the name of the

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State or Union territory in PART A of the application in FORM GST REG-07

and mention the name of the State or Union territory in PART B thereof in
which the principal place of business is located which may be different from the
State or Union territory mentioned in PART A.
(c) RC to be issued within 3 Working Days: in FORM GST REG-06 within a
period of 3 working days from the date of submission of the application.
(d) Cancellation of RC: Where on request made in writing by registered person
or upon an enquiry or pursuant to any other proceeding under the Act, the
proper officer is satisfied that a person to whom a certificate of registration in
FORM GST REG-06 has been issued is no longer liable to deduct tax at source,
the said officer may cancel the registration and such cancellation shall be
communicated to the said person electronically in FORM GST REG-08.

(3) Form and manner of submission of return by a person required to deduct tax
at source [Rule 66]:
(i) Furnishing of GSTR-7 Return
(ii)Details of TDS to be made available to deductee
(iii) Certificate to deductee: in FORM GSTR-7A on the basis of the return
furnished above.

14.5 COLLECTION OF TAX AT SOURCE [SECTION 52]

(5) Annual Statement to be filed upto 31" December of succeeding financial year
[Section 52(5)]:
(6) Rectification of mistake in monthly statement by ECO [Section 52(6)]:

Time limit of rectification: No such rectification of any omission or incorrect

particulars shall be allowed after-
➢ 30th November following the end of the financial year, or
➢ the actual date of furnishing of the relevant annual statement,
whichever is earlier.
(7) Claim of TCS by the supplier [Section 52(7)] :

(8) Matching of details furnished by the e-commerce operator with the details
furnished by the supplier [Section 52(8)]: The following details relating to the
supplies made through an e-Commerce operator, as declared in FORM GSTR-8,
shall be matched with the corresponding details declared by the supplier in FORM
GSTR-1, as amended in FORM GSTR-1A if any,
(a) State of place of supply; and
(b) net taxable value.

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However, where the time limit for furnishing FORM GSTR-1, as amended in FORM
GSTR-1A if any, under section 37 has been extended, the date of matching of
the above mentioned details shall be extended accordingly.
The Commissioner may, on the recommendations of the Council, by order, extend
the date of matching to such date as may be specified therein.

(9) Communication of discrepancy in details furnished by the e-commerce operator

and the supplier [Section 52(9)]:
(10) Non-rectification of discrepancy, addition of amount of discrepancy to output
tax liability of supplier [Section 52(10)]:
(11) Interest payable on amount added to the output tax liability of the supplier
[Section 52(11)]:
(12) Issuance of notice to furnish details of supplies and stock [Section 52(12)] :
Any authority not below the rank of Deputy Commissioner may serve a notice along
with summary thereof electronically in form GST DRC-01, either before or during
the course of any proceedings under this Act, requiring the ECO to furnish such
details relating to-
(a) supplies of goods or services or both effected through such ECO during any
period; or
(b) stock of goods held by the suppliers making supplies through such ECO in the
godowns or warehouses, by whatever name called, managed by such ECO and
declared as additional places of business by such suppliers, as may be specified in
the notice.
(13) Information to be furnished within 15 days from service of notice [Section
52(13)]:
(14) Penalty for failure to furnish information - Upto ₹ 25,000
(15) When TCS provisions do not apply: TCS provisions are not applicable where GST
is payable under reverse charge. TCS provisions also do not apply in case of exempt
supply. TCS provisions do not apply on import of goods or services.
"Concerned supplier" shall mean the supplier of goods or services or both making
supplies through the ECO.
Clarification on TCS liability u/s 52 of the CGST Act, 2017 in case of multiple E-
commerce Operators in one transaction - Circular No. 194/06/2023-GST dated 17-
07-2023
Issue 1: In a situation where multiple ECOS are involved in a single transaction of
supply of goods or services or both through ECO platform and where the supplier-
side ECO himself is not the supplier in the said supply, who is liable for compliances
under section 52 including collection of TCS?

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Buyer Buyer –side Supplier – supplier

Eco side Eco

Clarification: In such a situation where multiple ECOS are involved in a single

transaction of supply of goods or services or both through ECO platform and where
the supplier-side ECO himself is not the supplier of the said goods or services, the
compliances under section 52 of CGST Act, including collection of TCS, is to be done
by the supplier-side ECO who finally releases the payment to the supplier for a
particular supply made by the said supplier through him.
e.g.: Buyer-side ECO collects payment from the buyer, deducts its fees/commissions
and remits the balance to Seller-side ECO. Here, the Seller-side ECO will release
the payment to the supplier after deduction of his fees/commissions and therefore
will also be required to collect TCS, as applicable and pay the same to the
Government in accordance with section 52 of CGST Act and also make other
compliances under section 52 of CGST Act.
In this case, the Buyer-side ECO will neither be required to collect TCS nor will be
required to make other compliances in accordance with section 52 of CGST Act with
respect to this particular supply.
Issue 2: In a situation where multiple ECOs are involved in a single transaction of
supply of goods or services or both through ECO platform and the Supplier-side ECO
is himself the supplier of the said supply, who is liable for compliances under section
52 including collection of TCS?

Buyer Buyer –side Supplier –

Eco side Eco

Clarification: In such a situation, TCS is to be collected by the Buyer-side ECO

while making payment to the supplier for the particular supply being made through it.
e.g.: Buyer-side ECO collects payment from the buyer, deducts its fees and remits
the balance to the supplier (who is itself an ECO as per the definition in Sec 2(45)
of the CGST Act).
In this scenario, the Buyer-side ECO will also be required to collect TCS, as
applicable, pay the same to the Government in accordance with section 52 of CGST
Act and also make other compliances under section 52 of CGST Act.
➢ Special procedure to be followed by the electronic commerce operators in respect
of supplies of goods through them by composition taxpayers. - Notification No.
36/2023 dated 4-8-2023 w.e.f 1-10-2023
The Central Government has notified that the electronic commerce operator who is
required to collect tax at source under section 52 as the class of persons who shall
follow the following special procedure in respect of supply of goods made through it
by the persons paying tax under composition scheme (hereinafter referred to as the
said person), namely:-

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(i) the electronic commerce operator shall not allow any inter-State supply of goods
through it by the said person;
(ii) the electronic commerce operator shall collect tax at source u/s 52(1) of the
said Act in respect of supply of goods made through it by the said person and pay to
the Government as per provisions of Section 52(3) of the said Act; and
(iii) the electronic commerce operator shall furnish the details of supplies of goods
made through it by the said person in the statement in FORM GSTR-8 electronically
on the common portal.
➢ Special procedure to be followed by the electronic commerce operators in
respect of supplies of goods through them by unregistered persons. - Notification
No. 37/2023 dated 04-08-2023 w.e.f01-10-2023

The Central Government has notified that the electronic commerce operator who is
required to collect tax at source under section 52 shall follow the following special
procedure in respect of supply of goods made through it by the persons exempted
from obtaining registration (hereinafter referred to as the said person):
(1) the electronic commerce operator shall allow the supply of goods through it by
the said person only if enrolment number has been allotted on the common portal to
the said person;
(ii) the electronic commerce operator shall not allow any inter-State supply of goods
through it by the said person;
(iii) the electronic commerce operator shall not collect tax at source u/s 52(1) in
respect of supply of goods made through it by the said person; and
(iv) the electronic commerce operator shall furnish the details of supplies of goods
made through it by the said person in the statement in FORM GSTR-8 electronically
on the common portal.
Where multiple electronic commerce operators are involved in a single supply of
goods through electronic commerce operator platform, "the electronic commerce
operator" shall mean the electronic commerce operator who finally releases the
payment to the said person for the said supply made by the said person through
him.

GST on service supplied by restaurants through e-commerce operators [Circular

No. 167/23/2021- GST dated 17-12-2021]: Certain representations have been
received requesting for clarification regarding modalities of compliance to the GST
laws in respect of supply of restaurant service through e-commerce operators (ECO).
Clarifications are as follows:
Issue Clarification
1. Would ECOS have to still collect TCS in As 'restaurant service' has been
compliance with section 52 of the CGST notified u/s 9(5) of the CGST Act,
Act, 2017? 2017, the ECO shall be liable to pay
GST on restaurant services provided,
with effect from the 1s January,

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2022, through ECO. Accordingly, the

ECOS will no longer be required to
collect TCS and file GSTR 8 in
respect of restaurant services on
which it pays tax in terms of section
9(5).
On other goods or services supplied
through ECO, which are not notified
u/s 9(5), ECOs will continue to pay
TCS in terms of section 52 of CGST
Act, 2017 in the same manner at
present
2. Would ECOS have to mandatorily take a As ECOs are already registered in
separate registration w.r.t supply of accordance with rule 8(in Form GST-
restaurant service [notified under 9(5)] REG 01) of the CGST Rules, 2017 (as
through them even though they are a supplier of their own goods or
registered to pay GST on services on services), there would be no
their own account? mandatory requirement of taking
separate registration by ECOS for
payment of tax on restaurant service
under section 9(5) of the CGST Act,
2017.
3. Would the ECOS be liable to pay tax on Yes. ECOS will be liable to pay GST
supply of restaurant service made by on any restaurant service supplied
unregistered business entities? through them including by an
unregistered person.
4 What would be the aggregate turnover It is clarified that the aggregate
of person supplying 'restaurant service' turnover of person supplying
through ECOS? restaurant service through ECOS shall
be computed as defined in section 2(6)
of the CGST Act, 2017 and shall
include the aggregate value of supplies
made by the restaurant through
ECOS. Accordingly, for threshold
consideration or any other purpose in
the Act,
the person providing restaurant
service through ECO shall account
such services in his aggregate turnover
5 Can the supplies of restaurant service No ECOs are not the recipient of
made through ECOS be recorded as restaurant service supplied through
inward supply of ECOS (liable to them. Since these are not input
reverse charge) in GSTR 3B? services to ECO, these are not to be
reported as inward supply (liable to

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reverse charge)
6 Would ECOS be liable to reverse ECOS provide their own services as an
proportional input tax credit on his electronic platform and an
input goods and services for the reason intermediary for which it would
that input tax credit is not admissible acquire inputs/ input service on which
on 'restaurant service'? ECOs avail input tax credit (ITC). The
ECO charges commission/ fee etc. for
the services it provides. The ITC is
utilised by ECO for payment of GST
on services provided by ECO on its
own account (say, to a restaurant).
The situation in this regard remains
unchanged even after ECO is made
liable to pay tax on restaurant service
ECO would be eligible to ITC as
before. Accordingly, it is clarified
that ECO shail not be required to
reverse ITC on account of restaurant
services on which it pays GST in terms
of section 9(5) of the Act.

It may also be noted that on

restaurant service, ECO shall pay the
entire GST liability in cash (No ITC
could be utilised for payment of GST
on restaurant service supplied through
ECO).
7 Can ECO utilize its Input Tax Credit to No. As stated above, the liability of
pay tax w.r.t 'restaurant service' payment of tax by ECO as per section
supplied through the ECO? 9(5) shall be discharged in cash.
8 Would supply of goods or services other ECO is required to pay GST on
than 'restaurant service' through ECOS services notified u/s 9(5), besides the
be taxed at 5% without ITC? services/other supplies made on his
own account.
On any supply that is not notified u/s
9(5), that is supplied by a person
through ECO, the liability to pay GST
continues on such supplier and ECO
shall continue to pay TCS on such
supplies.
Thus, present dispensation continues
for ECO, on supplies other than
restaurant services. On such supplies
(other than restaurant services made
through ECO) GST will continue to be

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billed, collected and deposited in the

same manner as is being done at
present. ECO will deposit TCS on such
supplies.
9 Would 'restaurant service' and goods or Considering that liability to pay GST
services other than restaurant service on supplies other than 'restaurant
sold by a restaurant to a customer service' through the ECO, and other
under the same order be billed compliances under the Act, including
differently? Who shall be liable for issuance of invoice to customer,
raising invoices in such cases? continues to lie with the respective
suppliers (and ECOS being liable only
to collect tax at source (TCS) on such
supplies), it is advisable that ECO
raises separate bill on restaurant
service in such cases where ECO
provides other supplies to a customer
under the same order.
10 Who will issue invoice in respect of The invoice in respect of restaurant
restaurant service supplied through ECO service supplied through ECO under
whether by the restaurant or by the section 9(5) will be issued by ECO.
ECO?
11 Clarification may be issued as regard A number of other services are
reporting of restaurant services, value already notified u/s 9(5). In respect
and tax liability etc in the GST return. of such services, ECO operators are
presently paying GST by furnishing
details in GSTR 3B.
The ECO may, on services notified u/s
9(5) of the CGST Act, 2017, including
on restaurant service provided through
ECO, may continue to pay GST by
furnishing the details in GSTR 3B,
reporting them as outward taxable
supplies for the time being.
Besides, ECO may also, for the time
being, furnish the details of such
supplies of restaurant services u/s
9(5) in Table 7A(1) or Table 4A of
GSTR-1, as the case maybe, for
accounting purpose.
Registered persons supplying
restaurant services through ECOs u/s
9(5) will report such supplies of
restaurant services made through
ECOS in Table 8 of GSTR-1 and

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Table 3.1 (c) of GSTR-3B, for the

time being.

TCS

person liable to collect tax Due date of

at source threshold limit rate of deduction value for collection of tax collection paymentof TDS to
tax at source when to be made government

CGST - Not exceeding

1% and SGST - not
exceeding 1% when 10 days from
electronic commerce operator Nil during the month in the end of the
at present notifed rate net value of taxable
which supply was month
of TCS is 0.5% CGST, supply
made
0.5% SGST and 1%
IGST

#Net Value of Taxable Supplies:

Amount
Aggregate value of taxable supplies of goods and/or services (other than xxx
notified services under section 9(5) by all registered persons)
Less: Taxable supplies returned to supplier xxx
Net value of Taxable Supplies xxx

The Government vide Notification No. 15/2024-CT dated 10-07-2024 has notified that
every electronic commerce operator, not being an agent, shall collect an amount calculated
@ 0.5% (0.25% CGST and 0.25% SGST) of the net value of intra-State taxable supplies
made through it by other suppliers where the consideration with respect to such supplies is
to be collected by the said operator. Prior to 10 th July 2024, rate of TCS was 1% (0.5%
CGST and 0.5% SGST)
It may be noted that Section 20 of IGST Act provides that in case of tax collected at
source, the operator shall collect tax at such rate not exceeding 2%, as may be notified
on the recommendations of the Council, of the net value of taxable supplies.
Further, the value of a supply shall include any taxes, duties, cesses, fees and charges
levied under any law for the time being in force other than this Act, and the Goods and
Services Tax (Compensation to States) Act, if charged separately by the supplier.
The Central Government vide Notification No. 01/2024-IT dated 10-07-2024 has notified
that every electronic commerce operator, not being an agent, shall collect an amount
calculated @ 0.5% of the net value of inter-State taxable supplies made through it by
other suppliers where consideration with respect to such supplies is to be collected by the
said operator. Prior to 10th July 2024, rate of TCS was 1%.

14.6 PROCEDURAL REQUIREMENTS OF E-COMMERCE OPERATOR

(1) Registration:

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The e-Commerce Operator who is required to collect tax at source as well as the
supplier supplying goods or services through an Operator need to compulsorily
register under GST. As per Section 24(x) of CGST Act, Every ECO (Electronic
Commerce Operator) who is required to collect tax at source under section 52 is
specifically required to take registration.
Service suppliers entitled for threshold exemption: Also, supplier who supplies
through an e- commerce operator needs to be mandatorily registered irrespective
of its turnover [Section 24(ix) of CGST Act].
However, Persons making supplies of services, other than supplies specified u/s
9(5) through an ECO who is required to collect tax at source u/s 52, and having an
aggregate turnover, to be computed on all India basis, not exceeding an amount of
20 lakh (10 lakh in case of Special Category States of Mizoram, Tripura, Manipur
and Nagaland) in a financial year, have been exempted from obtaining registration
vide Notification No. 65/2017-CT dated 15-11-2017.
Where the e-commerce operators are liable to pay tax on behalf of the suppliers
under a notification issued under section 9(5) of the CGST Act, 2017 the suppliers
of such services are entitled for threshold exemption.
Exemption to persons making supply of goods through e-commerce operator subject
to fulfillment of specified conditions :
The Central Government has exempted the persons making supplies of goods
through an electronic commerce operator who is required to collect tax at source
u/s 52 of the said Act and having an aggregate turnover in the preceding financial
year and in the current financial year not exceeding the amount of aggregate
turnover above which a supplier is liable to be registered in the State or Union
territory in accordance with the provisions of Section 22(1) of the said Act, from
obtaining registration under the said Act, subject to the following conditions,
namely :
(a) such persons shall not make any inter-State supply of goods;
(b) such persons shall not make supply of goods through electronic commerce
operator in more than one State or Union territory;
(c) such persons shall be required to have a Permanent Account Number issued
under the Incometax Act, 1961;
(d) such persons shall, before making any supply of goods through electronic
commerce operator, declare on the common portal their Permanent Account
Number issued under the Income-tax Act, 1961, address of their place of
business and the State or Union territory in which such persons seek to make such
supply, which shall be subjected to validation on the common portal;
(e) such persons have been granted an enrolment number on the common portal on
successful validation of the Permanent Account Number;

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(f) such persons shall not be granted more than one enrolment number in a State
or Union territory;
(g) no supply of goods shall be made by such persons through electronic commerce
operator unless such persons have been granted an enrolment number on the
common portal; and
(g) no supply of goods shall be made by such persons through electronic commerce
operator unless such persons have been granted an enrolment number on the
common portal; and
(h) where such person are subsequently granted registration under section 25of
the said act, the enrollment number shall cease to be valid from the effective
date of registration.
– Notification No. 34/2023-CT dated 31-7-2023 w.e.f 01-10-2023
(2) Grant of registration to persons required to collect tax at source [Rule 12 of
CGST Rules, 2017]:
(a) E-Application by Tax collector electronically [Rule 12(1)]: in FORM GST REG-
07 for the grant of registration through the common portal, either directly or
through a Facilitation Centre notified by the Commissioner.
(b) Procedure if tax collector do not have principal place of business in the state
in which registration application is made: A person applying for registration to
collect tax in accordance with the provisions of section 52, in a State or Union
territory where he does not have a physical presence, shall mention the name of
the State or Union territory in PART A of the application in FORM GST REG-07
and mention the name of the State or Union territory in PART B thereof in which
the principal place of business is located which may be different from the State
or Union territory mentioned in PART A.
(c) RC to be issued within 3 working days [Rule 12(2)]: The proper officer may
grant registration after due verification and issue a certificate of registration in
FORM GST REG-06 within a period of 3 working days from the date of submission
of the application.
(d) Cancellation of RC [Rule 12(3)]: Where, on request made in writing by
registered person or upon an enquiry or pursuant to any other proceeding under
the Act, the proper officer is satisfied that a person to whom a certificate of
registration in FORM GST REG-06 has been issued is no longer liable to collect
tax at source under Section 52, the said officer may cancel the registration
issued under Rule 12(2) and such cancellation shall be communicated to the said
person electronically in FORM GST REG-08.
However, the proper officer shall follow the procedure as provided in Rule 22 for
the cancellation of registration.

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(3) Form and manner of submission of statement of supplies through an e-

commerce operator [Rule 67]:
(a) E-commerce operator to furnish return in FORM GSTR-8: 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 section 52(1).
(b) Details to be made available to supplier: The details furnished by the operator
shall be made available electronically to each of the suppliers on the common
portal after filing of FORM GSTR-8 for claiming the amount of tax collected in
his electronic cash ledger after validation.

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CHAPTER – 14: RETURNS

FURNSHING DETAILS OF OUTWARD SUPPLIES [Section 37]
× Person liable to furnish the details of outward supply – every registered person
and casual registered person except ISD, non-resident taxable person,
composition scheme, person deducting tax at source, person collecting at source,
OIDAR.
× Form for submission of details of outward supplies – Form GSTR-1 on monthly or
quarterly basis.
However, the said person may, after furnishing the details of outward supplies of goods
or service or both in FORM GSTR-1 for a tax period but before filing of return in FORM
GSTR-3B for the said tax period, at his own option, amend or furnish additional details
of outward supplies of goods or services or both in FORM GSTR-1A for the said tax
period electronically through the common portal, either directly or through a Facilitation
Centre as may be notified by the Commissioner [ Inserted vide notification no.12/2024-
CT dated 10/7/2024]
× Due date of furnishing GSTR-1 – 10th of the next month (time limit can be
extended by commissioner)
× QRMP Scheme –
(a) Quarterly statement – GSTR – 1 quarterly by 13th day of the month succeeding
quarter
(b) IFF – for the first two month by 13th of the succeeding month. The details of
the outward supplies does not exceed ₹ 50 lakh in each month.
(c) Details of the outward supplies furnished using IFF shall not be furnished in
GSTR-1
GSTR-1 cannot be furnished in certain cases [Section 37(4)] : A registered person
shall not be allowed to furnish the details of outward supplies for a tax period, if the
details of outward supplies for any of the previous tax periods has not been furnished
by him.
However, the Government may, on the recommendations of the Council, by
notification, subject to such conditions and restrictions as may be specified therein,
allow a registered person or a class of registered persons to furnish the details of
outward supplies, even if he has not furnished the details of outward supplies for one
or more previous tax periods.

As per provisions of Rule 59(6) of the CGST Rules, 2017, A registered person shall
not be allowed to furnish GSTR-1 statement in the following cases-

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a) When GSTR 3B not furnished for preceding 1 month: A registered person shall not
be allowed to furnish the details of outward supplies of goods or services or both
under section 37 in FORM GSTR-1, if he has not furnished the return in FORM
GSTR-3B for preceding one month.
b) When GSTR-3B not furnished for preceding tax period by QRMP taxpayer: A
registered person, required to furnish quarterly return, shall not be allowed to
furnish the details of outward supplies of goods or services or both under section
37 in FORM GSTR-1 or using the invoice furnishing facility, if he has not
furnished the return in FORM GSTR-3B for preceding tax period.
c) Tax liability on excess supply declared in GSTR-1 in comparison toGSTR- 3B is not
paid: A registered person, to whom an intimation has been issued on the common
portal under the provisions of Rule 88C(1) in respect of a tax period, shall not be
allowed to furnish the details of outward supplies of goods or services or both
under section 37 in FORM GSTR-1 or using the invoice furnishing facility for a
subsequent tax period, unless he has either deposited the amount specified in the
said intimation or has furnished a reply explaining the reasons for any amount
remaining unpaid, as required under the provisions of Rule 88C(2).

Note: Where the tax payable by a registered person, in accordance with the
statement of outward supplies furnished by him in FORM GSTR-1 or using the
Invoice Furnishing Facility in respect of a tax period, exceeds the amount of tax
payable by such person in accordance with the return for that period furnished by
him in FORM GSTR-3B, he is given intimation for payment of the differential
liability under Rule 88C of the CGST Rules, 2017.
(d) Excess ITC claimed not paid or reasons not explained: A registered person, to
whom an intimation has been issued on the common portal under the provisions of
Rule 88D(1) in respect of a tax period or periods, shall not be allowed to furnish
the details of outward supplies of goods or services or both under section 37 in
FORM GSTR-1 or using the invoice furnishing facility for a subsequent tax
period, unless he has either paid the amount equal to the excess input tax credit
as specified in the said intimation or has furnished a reply explaining the reasons
in respect of the amount of excess input tax credit that still remains to be paid.
(e) Non furnishing of bank account details: A registered person shall not be allowed
to furnish the details of outward supplies of goods or services or both under
section 37 in FORM GSTR-1 or using the invoice furnishing facility, if he has not
furnished the details of the bank account as per the provisions of rule 10A.'

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(6) Maximum time limit to furnish GSTR-1 statement - 3 years from the due date
[Section 37(5)]: A registered person shall not be allowed to furnish the details of
outward supplies for a tax period after the expiry of a period of 3 years from the
due date of furnishing the said details.

However, the Government may, on the recommendations of the Council, by

notification, subject to such conditions and restrictions as may be specified therein,
allow a registered person or a class of registered persons to furnish the details of
outward supplies for a tax period, even after the expiry of the said period of 3
years from the due date of furnishing the said details.

Some imp points:

✓ There is no mechanism for revision of return
✓ Rectification of errors/omissions is allowed.
✓ No rectification is allowed after the due date of furnishing the return for the
month of September following the end of the financial year to which such
details pertains or furnishing of the relevant annual return, whichever is
earlier.
✓ B2B agar transaction hai toh chahe INTRA ya INTER ho invoice wise details
dalna padega. But agar B2C hai toh INTER ke case me agar Rs 100000
[substituted vide notification no. 12/2024-CT dated 10/7/2024 w.e.f.
1/8/2024] se jayada gaya toh invoice wise details otherwise consolidated and
agar INTRA raha toh consolidated.
✓ Small taxpayer whose aggregate turnover does not exceed Rs 2 crore does not
require to get audited.
✓ Notice to return defaulters u/s 46, a notice shall be issued requiring him to
furnish such return within 15 days.
✓ Nil GSTR can be furnished by SMS through OTP.
Amendment in the details of outward supply furnished for prior period [Section 37(3)]
➢ Amendment on communication of mismatch report
➢ Rectification of unmatched entries and in case of short payment of tax – tax
and interest to be paid.
Time limit for rectification is earliest of following -
(a) in the return for the month during which such credit note has been issued but
not later than 30th November following the end of the financial year in which
such supply was made, or
(b) the date of furnishing of the relevant annual return,
whichever is earlier, and the tax liability shall be adjusted in such manner as may
be prescribed.

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(7) Scope of additional details in Form GSTR-1A [Rule 59(4A)]: The additional details or the
amendments of the details of outward supplies of goods or services or both furnished in
FORM GSTR-1A may, as per the requirement of the registered person, include the –
(a) invoice wise details of –
(i) inter-State and intra-State supplies made to the registered persons; and
(ii) inter-State supplies with invoice value more than ₹ 1,00,000 made to the unregistered
persons;
(b) consolidated details of –
(i) intra-State supplies made to unregistered persons for each rate of tax; and
(ii) State wise inter-State supplies with invoice value upto ₹ 1,00,000 made to unregistered
persons for each rate of tax;
(c) debit and credit notes, if any, issued during the month for invoices issued previously.
[Inserted vide notification no. 12/2024-CT dated 10/7/2024]

Communication of details of inward supplies and input tax credit [Section 38]: The
relevant provisions are as under-
1) The details of outward supplies furnished by the registered persons under Section
37(1) and of such other supplies as may be prescribed, and an auto-generated
statement containing the details of input tax credit shall be made available
electronically to the recipients of such supplies in such form and manner, within
such time, and subject to such conditions and restrictions as may be prescribed.
2) Details in auto-generated statement of ITC.

FORM AND MANNER OF ASCERTAINING DETAILS OF INWARD SUPPLIES [RULE 60]

1) Form GSTR-2A:
 It is a system generated read only statement of inward supplies for a recipient. This
statement is updated on a real time basis. The details become available to the
recipient for view/download and are updated incrementally as and when supplier(s)
upload or change details in their respective form of return/statement, for the given
tax period
 Details of outward supplies furnished by the supplier in Form GSTR-1 or GSTR-1A or
using the IFF is made available electronically to the concerned registered persons
(recipients) in Form GSTR-2A, in Form GSTR-4A and in Form GSTR-6A, as the case
may be.
 Details of invoices furnished by a non-resident taxable person in Form GSTR-5 and by
an Input Service Distributor in Form GSTR-6, details of TDS by deduct or furnished
in Form GSTR-7 and details of TCS by an e-commerce operator furnished in Form
GSTR-8, are made available to the recipient, deductee or concerned person, in Form
GSTR-2A.
2) Form GSTR-2B [Amended by Notification No. 19/2022-CT dated 28-09-2022 w.e.f. 01-
10

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 It is an auto-generated read only statement containing the details of ITC is made

available to the registered person (recipient) for every month. It is a static
statement and is available only once a month.
 It consists of –
(i) the details of outward supplies furnished by the suppliers in Form GSTR-1, other
than a supplier who has opted for QRMP scheme, between the day immediately
after the due date of furnishing of Form GSTR-1 for the previous month to the
due date of furnishing of Form GSTR-1 for the month
(ii) the details of outward supplies furnished by the suppliers in may be,-
(a) for the 1st month of the quarter, between the day immediately after the
due date of furnishing of Form GSTR-1 for the preceding quarter to the due
date of furnishing details using the IFF for the 1" month of the quarter;
(b) for the 2nd month of the quarter, between the day immediately after the
due date of furnishing details using the IFF for the 1stprime prime month of
the quarter to the due date of furnishing details using the IFF for the
2ndmonth of the quarter;
(c) for the 3rd month of the quarter, between the day immediately after the
due date of furnishing of details using the IFF for the 2 month of the
quarter to the due date of furnishing of Form GSTR-1 for the quarter.
(iii) The additional details or amendments in details of outward supplies furnished
by his supplier in FORM GSTR-1A filed between the day immediately after
the due date of furnishing of FORM GSTR-1 for the previous tax period to
the due date of furnishing of FORM GSTR-1 for the current tax period [
inserted vide notification no. 12/2024-CT dated 10/7/2024]
(iv) the details of the integrated tax paid on the import of goods or goods brought
in the DTA from SEZ unit/developer on a bill of entry in the month.

FURNISHING OF RETURN [ Section 39]

× Furnishing of monthly return – every registered person and casual registered
person except ISD, non-resident taxable person, composition scheme,
person deducting tax at source, person collecting at source, OIDAR shall
pay tax and such other particulars in Form GSTR – 3B by 20th of the
succeeding month and such liability should be discharged by debiting
electronic cash ledger or electronic credit ledger.
× Quarterly return by notified person [QRMP Scheme]
Monthly payment of taxes by prescribed persons [First proviso to Section 39(7)]:
Every registered person furnishing return under QRMP scheme shall pay to the
Government, in such form and manner, and within such time, as may be prescribed,-
a) an amount equal to the tax due taking into account inward and outward supplies of
goods or services or both, input tax credit availed, tax payable and such other
particulars during a month; or

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b) in lieu of the amount referred to in (a) above, an amount determined in such

manner and subject to such conditions and restrictions as may be prescribed.
× Time limit for rectification is same
× When return cannot be filed: A registered person shall not be allowed to furnish
a return for a tax period if-
a) the return for any of the previous tax periods; or
b) the details of outward supplies under Section 37(1) for the said tax period,
has not been furnished by him.
However, the Government may, on the recommendations of the Council, by
notification, subject to such conditions and restrictions as may be specified
therein, allow a registered person or a class of registered persons to furnish the
return, even if he has not furnished the returns for one or more previous tax
periods or has not furnished the details of outward supplies for the said tax
period.
× Maximum time limit to furnish returns - 3 years from due date [Section 39(11)]
Manner of dealing with difference in liability reported in statement of outward
supplies and that reported in return [Rule 88C]
(1) Intimation of difference in liability reported in GSTR-1 and GSTR-3B: Where
the tax payable by a registered person, in accordance with the statement of
outward supplies furnished by him in FORM GSTR-1 as amended in FORM GSTR-
1A if any [Inserted vide notification no. 12/2024-CT dated 10/7/2024] or using
the IFF in respect of a tax period, exceeds the amount of tax payable by such
person in accordance with the return for that period furnished by him in FORM
GSTR-3B, by such amount and such percentage, as may be recommended by the
Council, the said registered person shall be intimated of such difference in Part
A of FORM GST DRC-01B, electronically on the common portal, and a copy of
such intimation shall also be sent to his registered e-mail address, highlighting
the said difference and directing him to--
(a) pay the differential tax liability, along with interest u/s 50, through FORM
GST DRC-03; or
(b) explain the aforesaid difference in tax payable on the common portal,
within a period of 7 days.
(2) Response to Intimation: The registered person shall, upon receipt of the
intimation, either,-
(a) pay the amount of the differential tax liability, as specified in Part A of
FORM GST DRC-01B, fully or partially, along with interest under section

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50, through FORM GST DRC-03 and furnish the details thereof in Part B of
FORM GST DRC-01B electronically on the common portal; or
(b) furnish a reply electronically on the common portal, incorporating reasons in
respect of that part of the differential tax liability that has remained
unpaid, if any, in Part B of FORM GST DRC-01B,
within the said period of 7 days.
(3) Recovery as per Section 79.

MANNER OF DEALING WITH DIFFERENCE IN INPUT TAX CREDIT AVAILABLE IN

AUTO-GENERATED STATEMENT CONTAINING THE DETAILS OF INPUT TAX
CREDIT AND THAT AVAILED IN RETURN [RULE 88D]

(1) Intimation for excess availment of ITC: Where the amount of input tax credit
availed by a registered person in the return for a tax period or periods furnished by
him in FORM GSTR-3B exceeds the input tax credit available to such person in
accordance with the auto-generated statement containing the details of input tax
credit in FORM GSTR-2B in respect of the said tax period or periods, as the case
may be, by such amount and such percentage, as may be recommended by the
Council, the said registered person shall be intimated of such difference in Part A of
FORM GST DRC-01C, electronically on the common portal, and a copy of such
intimation shall also be sent to his e-mail address provided at the time of
registration or as amended from time to time, highlighting the said difference and
directing him to-

(a) pay an amount equal to the excess input tax credit availed in the said FORM
GSTR-3B, along with interest payable under section 50, through FORM GST DRC-03,
or
(b) explain the reasons for the aforesaid difference in input tax credit on the
common portal,
within a period of 7 days.
(2) Response to Intimation: The registered person shall, upon receipt of the
intimation either,-
(a) pay an amount equal to the excess input tax credit, as specified in Part A of
FORM GST DRC-01C, fully or partially, along with interest payable under section 50,
through FORM GST DRC-03 and furnish the details thereof in Part B of FORM GST
DRC-01C, electronically on the common portal, or
(b) furnish a reply, electronically on the common portal, incorporating reasons in
respect of the amount of excess input tax credit that has still remained to be paid,
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if any, in Part B of FORM GST DRC-01C, within the period of 7 days from receipt of
Intimation

(3) SCN: Where any amount specified in the intimation remains to be paid within the
specified period of 7 days and where no explanation or reason is furnished by the
registered person in default or where the explanation or reason furnished by such
person is not found to be acceptable by the proper officer, the said amount shall be
liable to be demanded in accordance with the provisions of section 73 or section 74,
as the case may be.

LIST OF STATEMENT AND RETURNS UNDER GST

RETURN DECSRIPTION WHO FILES...? DATE FOR FILING
GSTR-1 Monthly statement of Registered person under 10th of the next
outward supplies of regular scheme (including a month. However
goods and / or casual taxable person) presently, the same
services is being extended to
11th of the next
month.
Quarterly statement Registered person opting 13th of the next
of outward supplies of for QRMP scheme month succeeding the
goods and / or (including a casual taxable quarter has been
services person) notified as the due
date for the recent
quarter.
GSTR- Monthly return Registered person under 20th of the month
3B regular scheme (including a
casual taxable person)
Quarterly return Registered person opting22nd or 24th of the
for QRMP scheme
month depending
(including a casual taxable
upon the state or
person) union territory in
which they are
registered.
GSTR-4 Return for a financial Registered person paying 30th June of the
year tax under composition next financial year
scheme
GST Quarterly statement Registered person paying 18th of the month
CMP-08 for payment of tax tax under composition succeeding the
scheme quarter
GSTR-5 Monthly return Registered non resident 13th of the next

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tax payer month or within 7

days after the
expiry of
registration,
whichever is earlier
GSTR- Monthly return Registered person 20th of the next
5A providing OIDAR services month
from a place outside India
to a non-taxable online
recipient
GSTR-6 Monthly return for Input service distributor 13th of the next
input service month
distributor
GSTR-7 Monthly return for Tax deductor at source 10th of the next
Tax deduction at month
source
GSTR-8 Monthly return for e-commerce operator who 10th of the next
Tax collection at is required to collect tax month
source at source [note]
GSTR-9 Annual return Registered person other 31st December of
than ISD, tax the next financial
deductor/tax collector, year
casual taxable person, and
a non-resident taxpayer
GSTR- Final return Taxable person whose Within three months
10 registration has been of the date of
surrendered or cancelled cancellation or date
of order of
cancellation,
whichever is later.
GSTR- Annual return Composition scheme 31st December of
9A the next financial
year
GSTR- Annual return E-commerce operator 31st December of
9B the next financial
year
GST-9C Reconciliation Registered person whose To be submitted
statement aggregate turnover during along with the annual
the financial year exceed return [ GSTR-9/9A]
₹2 crore
GSTR – Final return Taxable person whose Within 3 months of

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10 registration has been the date of

suspended or cancelled cancellation or date
of order of
cancellation,
whichever is later.
GSTR- Details of inward Person who have been
11 supplies issued a UIN
LATE FEE FOR DELAY IN FILING OF RETURN [ SECTION 47 ]

(a) Delay in furnishing return – fees of ₹ 100 per day subject to maximum of ₹
5,000 payable: As per Section 47(1), any registered person who fails to furnish
the details of outward supplies required under Section 37 or returns required u/s
39 or Section 45 or Section 52 by the due date shall pay a late fee of –
(i) ₹ 100 for every day during which such failure continues; or
(ii) ₹ 5000
Whichever is less
(b) Delay in furnishing annual return – Fees of ₹ 100 per day subject to maximum of
0.25% of turnover in the state/UT: As per Section 47(2), any registered person
who fails to furnish the return required under section 44 i.e., annual return by
the due date shall be liable to pay a late fee of –
(i) ₹ 100 for every day during which such failure continues; or
(ii) 0.25% of his turnover in the state or union territory
Whichever is les

For delayed filing of GSTR-7:-

quantum of late fee

₹ 25 for every day during which ₹ 1000

such failure continues

Whichever is lower

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For delayed filing of GSTR-1 and/or GSTR-3B (quantum of late fee):-

Class of registered persons

(1) Registered persons who have (2) Registered (3) Registered

nil outward supplies in the tax persons other persons other
period/whose total amount of than those than (1) and (2)
tax payable in the GSTR-3B is covered in (1)
Nil, as the case may be above

Late fee as
specified under
₹500 (₹250 each under CGST &
section 47
SGST/UTGST )
₹20 (₹10 each under CGST &
SGST/UTGST)
Whichever is lower

Aggregate turnover of < ₹1.5 ₹ 5 crores > Aggregate turnover of

crores in the preceding F.Y > ₹1.5 crores, in the preceding F.Y

₹2000 (₹1000 each under CGST & SGST/UTGST ) ₹2000 (₹1000 each under CGST &
₹50 (₹25 each under CGST & SGST/UTGST) SGST/UTGST )
Whichever is lower ₹50 (₹25 each under CGST &
SGST/UTGST)
Whichever is lower

Aggregate turnover of > ₹5

crores in the preceding F.Y

₹10000 (₹5000 each under CGST & SGST/UTGST )

₹50 (₹25 each under CGST & SGST/UTGST)
Whichever is lower

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For delayed filing of GSTR-4:-

Class of registered persons

(1) Total tax payable in (2) Registered persons other

GSTR-4 is nil than those covered in (1)

₹500 (₹250 each under CGST & SGST/UTGST ) ₹2000 (₹1000 each under CGST & SGST/UTGST )
₹20 (₹10 each under CGST & SGST/UTGST) ₹50 (₹25 each under CGST & SGST/UTGST)
Whichever is lower Whichever is lower

For delayed filing of GSTR-9:-

Class of registered persons

Aggregate turnover of < ₹5 ₹ 5 crores < Aggregate turnover of

crores in the preceding F.Y < ₹20 crores, in the preceding F.Y

₹50 per day (₹25 each under CGST & ₹100 per day (₹50 each under CGST &
SGST/UTGST ) SGST/UTGST )
₹0.04(₹0.02 each under CGST & SGST/UTGST) ₹0.04 (₹0.02 each under CGST &
Whichever is lower SGST/UTGST)
Whichever is lower

Aggregate turnover of > ₹20

crores in the preceding F.Y

₹200 per day(₹100 each under CGST &

SGST/UTGST )
₹0.50 (₹0.02 each under CGST & SGST/UTGST)
Whichever is lower
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ANNUAL RETURN [RULE 80]

➢ Every registered person whose aggregate turnover exceed Rs 5 crore shall get
his account audited as specified under section 35(5) and he shall furnish a copy
of audited annual accounts and a reconciliation statement, duly certified, in
FORM GSTR-9C for the said financial year, electronically through the common
portal either directly or through a facilitation centre notified by the
commissioner.
➢ Maximum time limit to furnish annual return - 3 years from due date [Section
44(2)]: A registered person shall not be allowed to furnish an annual return for
a financial year after the expiry of a period of 3 years from the due date of
furnishing the said annual return.
However, the Government may, on the recommendations of the Council, by
notification, and subject to such conditions and restrictions as may be
specified therein, allow a registered person or a class of registered persons to
furnish an annual return for a financial year, even after the expiry of the said
period of 3 years from the due date of furnishing the said annual return.

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