GST

 COMPOSITION LEVY

Small taxpayers can opt to pay tax at a flat rate and opt for composition of tax if their annual aggregate turnover is within 75 lakhs. This option is available for certain special category of manufacturers and service providers also. No input tax credit is available for a compounding dealer. Compounding dealer cannot issue a tax invoice but only a bill of supply. Compounding dealers are not permitted to collect tax

Persons not eligible for Composition

(a) Supplier of services other than Supplier of Restaurant service

(b) Neither a casual Taxable person nor a Non-Resident Taxable person.

(c) An Inter State supplier of Goods

(d) Persons supplying Goods through e-commerce operator

(e) Manufacturers of certain notified goods

Composition Rates

(a) For manufacturers, SGST 1% + CGST 1%

(b) For hotels other than Liquor SGST 2.5% + CGST 2.5%

(c) For others SGST 0.5% + CGST 0.5%

Return of a composition dealer: A composition dealer instead of filing monthly return, has to file return for each quarter in GSTR-4 within 18 days after the end of such quarter. In GSTR -4, invoice wise details of inter-state and intra-state supplies received from registered persons as well as unregistered persons, imports of goods and services, consolidated details of outward supplies, consolidated statement of advances paid/advances adjusted on account of receipt of supplies, debit note, and credit note received and issued have to be reported

Conditions for Composition

(a) With respect to migrated dealers, the Goods in stock should not have been purchased on Inter-State basis/imports/stock Transfer.

(b) The Goods in stock must not have been purchased from Un-registered Dealers, and if purchased tax has to be paid under Reverse charge mechanism.

(c) Composition dealers have to issue Bill of supply instead of invoice

(d) In the bill of supply, such dealer should mention "Composition Taxable person not eligible to collect tax on supplies"

(e) In sign boards at prominent place of business he shall mention the words "Composition Taxable person."

Cancellation of registration:  Failure to file returns for 3 consecutive tax periods will lead to cancellation of registration.

Transitional Provisions: Dealer paying tax in the composition scheme under the earlier law but decided to pay tax under section 9 of the GST law (i.e. Regular dealer), shall be eligible for ITC in GST on the closing stock of goods purchased locally.

INPUT TAX CREDIT

Uninterrupted and seamless chain of input tax credit (hereinafter referred to as,"ITC") is one of the key features of Goods and services Tax. ITC is a mechanism to avoids cascading of taxes. Cascading of taxes, in simple language, is 'tax on tax; Under the present system of taxation, credit of taxes being levied by Central Government is not available as set-off for payment of taxes being levied by Central Government is not available as set- off for payment of taxes levied by State Government, and vice versa.

One of the most important features of the GST system is that the entire supply chain would be subject to GST to be levied by Central and state Government Concurrently. As the tax charged by the Central or the state Governments would be part of the same tax regime, the credit of tax paid at every stage would be available as set- off for payment of tax at every subsequent state.

Under this new system, most of the indirect taxes levied by Central and the State Government on supply of goods or services or both, would be combined together under a single levy.

GST comprises of the following levies:

(a) Central Goods and services Tax (CGST) on intra-state supply of goods or services or both

(b) State Goods and Services Tax (SGST) on intra-state supply of goods or services or both

(c) Integrated goods and services Tax (IGST) on inter-state supply of goods or services or both. In case of import of goods also, the present levy of Countervailing Duty (CVD)and Special Additional duty (SAD) would be available as set- off for payment of tax at every subsequent stage.

Conditions for claiming ITC

(I) Taxpayer should possess tax invoice or debit note or any other tax paying documents issued by supplier registered under the GST Act.

(ii) He should have received the goods or services or both.

(iii) Supplier should have reported the supply in the returns and should have paid tax.

ITC not allowed in the following circumstances

(i) ITC not allowed for a composition dealer.

(ii) ITC not allowed for goods or services received by a nonresident taxable person except on goods imported by him.

(iii) ITC not allowed for goods or services used for personal consumption

(iv) ITC not allowed for Goods lost/stolen/destroyed/returned or disposed of by way of gift/free samples.

Time limit for claiming ITC

ITC for a supply received in a financial year has to be claimed any time before the filing of returns for the month of September (of the following financial year) or the relevant annual return whichever is earlier.

TIME OF SUPPLY OF GOODS 

Under GST, the point of taxation, i.e. the liability to pay CGST/SGST will arise at the time of supply as determined for Goods & Services

The time of supply of Goods shall be the earlier of the following dates, namely: -

(a) The date of issue of invoice by the supplier (or the last date on which he is required to issue the invoice)

or 

(b) The date on which the supplier receives the payment with respect to the supply.

The time of supply of goods where tax is to be paid on reverse charge shall be the earlier of the following dates, namely: -

(i) The date of receipt of goods or (ii) The date of payment or 30 days from the date of issue of invoice by the supplier (If it is not possible to determine under i), ii) or iii), the date of entry of supply in the books of the recipient)

The time of supply of goods in case of vouchers shall be the earlier of the following dates, namely: -

(a) The date of issue of voucher (If the date could not be determined then the date of periodical return filed or the date on which the CGST/SGST is paid

JOB WORK

Job-work means 'any treatment or process undertaken by person on goods belonging to another registered person. The one who does the said job would be termed as 'job worker'. The ownership of the goods does not transfer to the job-worker, but it rests with the principal. The job worker is required to carry out the process specified by the principal on the goods.

Registration of a job worker

Job work is a service. Job worker is required to obtain registration if his aggregate turnover exceeds Rs. 20 lakhs.

Procedural aspects for job work

(a) A registered person under intimation can send/receive inputs or capital goods without payment of tax, provided the input or capital goods are brought back within one year (for input) and three years (for capital goods) of their being sent out.

(b) The principal is allowed to do so. The tax paid on input or capital goods (ITC) can be claimed by the principal provided the inputs or capital goods are received back within one year and three years respectively.

        (Provided the principal had declared the unregistered job worker's premises as his additional place of business or if the job worker is a registered person or if supply of such goods are notified by the commissioner.)

If the inputs or capital goods are not received back or are not supplied from the place of business of the job worker within the prescribed time limit, it would be treated as supply and the principal would be liable to pay tax.                                                                                                                     

Income Tax

 Last Income Tax Slab and

Rates-FY2024-25/AY 2025-26

The financial minister Nirmala Sitharaman has made Chages in the income tax slabs under the new tax regime in Budget 2024. The new income tax slabs under the new tax regime have retrospectively come into effect from 1st April 2024 for the current financial year 2014-25. The changes in income tax slabs of new tax regime were announced in July 2024 as government presented its full budget after the Lok Sabha elections 2024. Remember there were no. changes announced by the government in the interim budget announced in February 2024

Not all the tax slabs have been changed in the new tax regime. Only two tax slabs under the tax regime. Only two tax slabs under the new tax regime have been changed in the Budget 2024. The changes in the income tax slabs raise the upper limit in two slabs by Rs. 1 Lakh. 

The current Rs. 3 Lakh - Rs. 6 Lakh slab has become Rs 3 lakh - Rs.7 lakh; and the Rs.6 lakh - Rs. 9 lakh slabs have become Rs. 7 -Rs 10 lakhs. This means people earning Rs 7 lakh would be taxed at 5% instead of 10 earlier; and those earning Rs. 10 lakhs would be taxed at 10% instead of 15% earlier.

This income tax slabs under the new tax regime are as follows: Rs. 0 - Rs. 3,00,000 - 0%, Rs 3,00,001 and Rs.7,00,000 - 5%, Rs 7,00,001and Rs 10,00,000-10%, Rs 10,00,001 and Rs. 12,00,000 and Rs. 15,00,000-20% and 15,00,001 and above - 30%

Apart from making Chages in the two-income tax slabs in the new tax regime, the finance minister has announced Chages in the standard deduction limit and employer's contribution to employee's NPS account available in the new tax regime. Even standard deduction available for family pensioners have been changed under the new tax regime. No. other changes, such as tax rebate available under the Section 87A, surcharge rate applicable for incomes exceeding Rs.50 lakh, have been made in the new tax regime.

The new tax regime continues to offer tax rebate of up to Rs. 25,000 for taxable incomes not exceeding Rs. 7 lakhs. Further, no Chage in surcharge for those earning more than Rs. 2 Crore.

The Chages have been made to make the new tax regime attractive. However, no changes have been made in the old tax regime. The income tax slab, rates and other income tax rules have not been changed under the old tax regime. 

The old rules will continue to apply under the old tax regime. This means that higher deduction available under the new tax regime for standard deduction and employer's contribution will not be available in the old tax regime. Further, tax, rebate or Rs. 12,500 will continue to be available under the old tax regime if the taxable incomes do no exceed Rs. 5 lakhs. The main difference between the old and new tax regime is the availability of usual deductions and tax exemptions. The new tax regime does not allow deduction of common deductions such as Section 80C deduction up to Rs. 1.5 lakh for specified investments and expenditures, Section 80D deduction up to Rs. 25,000/Rs 50,000 for health insurance premium paid and Section 80TTA deduction of up to Rs 10,000 for interest earned from savings accounts of bank and post office, among others. 

The income tax slabs applicable under the old tax regime depends on the age of individual.

The old tax regime offered multiple basic income exemption limits depending on the ae of the taxpayer. For individuals below 60 years of age, the basic income exemption limit is Rs 2.5 lakhs. For senior citizens aged 60 years and above but below 80 years, the basic exemption limit is Rs. 3 lakhs. For super senior citizens aged 80 years and above, the basic exemption limit is Rs. 5 lakhs.

Currently, the new tax regime is the default tax regime. An individual who wants to opt for the old tax regime now has to specifically choose it while filing income tax return. When new tax regime was introduced in FY 2020-21, it was an optional tax regime, they knew tax regime has lower tax rates as compared with the old tax regime. if individuals opt for the new tax regime, they can now claim only two deductions - Standard deduction of Rs, 50,000 from salary/pension income and Section 80CCD (2) for empolyer'scontribution to the employee's account. 

Currently, a taxpayer having business income waiting to continue with the old tax regime in a financial year, will specifically have to opt for it. Once opted, they would have once in a lifetime option to switch to new tax regime. Once new tax regime is opted, they cannot opt for old tax regime again.

Income tax slabs for FY 2024 - 25 (AY 2025-26), FY 2023-24(AY 2024-25) under the new tax regime

The income tax slabs in the new tax regime have been tweaked for the current FY 2024-25(AY 2025-26). The changes in the income tax slabs raised the upper limit in two labs by Rs. 1 lakh. The Rs. 3 lakhs - Rs. 6 lakhs slab become Rs. 3 lakh - Rs. 7 lakhs; and the Rs. 6 lakh- Rs. 9 lakh slabs have become Rs. 7 lakh- Rs 10 lakh.

The changes in the new tax regime have been made to make it more attractive vis-a-vis old tax regime. In February 2023, the changes were announced in the new tax regime to make it more attractive for the individual taxpayers. Some of these changes were - introduction of standard deduction, rising basic exemption limit, hike in tax rebate under section 87A for taxable income up to Rs 7 lakh and so on.

Here are the new income tax slabs under new tax regime.

Income tax slabs under new tax regime for FY 2024-25

Income tax slabs (Rs)               Income Tax rate (%)

From 0 to 3,00,000                                            0

From 3,00,001 to 7,00,000                                5

From 7,00,001 to 10,00,000                             10

From 10,00,001 to 12,00,000                           15

From 12,00,001 to 15,00,000                           20

From 15,00,001 and above                               30

Changes made in the new tax regime in Budget 2024

Apart from tweaking income tax slabs, some changes were also made in the new tax regime. Changes announced in the new tax regime are as follows:

(a) new tax regime is the default tax regime. An individual has an option to opt for the old tax regime in any financial year, provided there is no business income

(b) Basic exemption limit of Rs 3 lakh for all individual taxpayers irrespective of their age

(c) Tax rebate under section 87A makes zero tax payable for taxable incomes up to Rs. 7 lakhs

(d) Highest surcharge rate for those earning above Rs 2 crore is 25%

Income tax slabs under new tax regime for FY 2023-24(AY 2024-25)

For those filing income tax return for previous financial year 2023-24, the income tax slabs under the new tax regime are different. Following are the income tax slabs under new tax regime for FY 2023-24 (AY 2024-25) that will be used for ITR filing:

Income tax slabs (Rs)                         Income tax rate (%)

From 0 to 3,00,000                                              0

From 3,00,001 to 6,00,000                                  5

From 6,00,001 to 9,00,000                                10

From 9,00,001 to 12,00,000                              15

From 12,00,001 to 15,00,000                            20

From 15,00,001 and above                                30

Income tax slab rates for FY 2024-25 (AY 2025-26), FY 2023-24(AY2024-25), FY 2022-23(AY 2023-24), FY 2021-22 (AY 2022-23) under old tax regime

There are no Chages in the income tax slabs of the old tax regime in the July Budge 2024. Remember, income tax slabs under the new tax regime are tweaked. It will mean that anyone choosing the old tax regime for the current financial year 2024-25 (1st April 2024 and 31 March 2025) will calculate the income tax payable at the same rates as in FY 2023-24 (1st April 2023 and 31st March 2024).

Under the old tax regime, income tax slabs applicable to an individual depend on the age of an individual in a particular financial year. Hence, the basic exemption limit will also be different for individuals.

For an individual below 60 years of age, the basic exemption limit is or Rs 2.5 lakh. For senior citizens (aged 60 years and above but below 80 years) the basic income exemption limit is of Rs. 3 lakhs. For super senior citizens (aged 80 years and above), the basic income exemption limit is Rs. 5 lakhs. For non-resident individuals, the basic income exemption limit is of Rs. 2.5 lakh irrespective of age.

Given below are the income tax rates for FY 2024-25(AY2025-26), FY 2023-24 (AY 2024-25), FY 2022-23(AY 2023-24) and FY 2021-22 (AY 2022-23) under the old tax regime.

Income tax slabs for individuals under old tax regime

Income tax slabs (Rs)                Income tax rate (%)

From 0 to 2,50,000                                      0

From 2,50,001 to 5,00,000                          5

From 5,00,001 to 10,00,000                       20

From 10,00,001 and above                         30

Income tax slabs for senior citizens under old tax regime

Income tax slabs (Rs)                            Income tax rates (%)

From o to 5,00,000                                               0

From 5,00,001 to 10,00,000                                20

From 10,00,001 to above                                     30

Comparison of income tax slabs under the old and new tax regime for FY 2024-25 (AY 2025-26)

Taxable income           Old Tax Regime          New Tax Regime

0 to Rs 2,50,000                      0%                                  0%

Rs 2,50,001 to 3,00,000          5%                                  0%

Rs 3,00,001 to 5,00,000           5%                                 5%

Rs 5,00,001 to 7,00,000         20%                                 5%

Rs 7,00,001 to 10,00,000       20%                               10%

Rs 10,00,001 to 12,00,000      30%                               15%

Rs 12,00,001 to 15,00,000      30%                               20%

Rs 15,00,001 and above          30%                               30%

How to calculate income tax payable under new tax regime

For those salaried individuals who are continuing with the new tax regime for the current financial year, 2024-25

                                                   

GST REGISTRATION

 GST REGISTRATION 

Registration is the most fundamental requirement for the identification of taxpayers to ensure compliance and to obtain a unique registration number for the purpose of collecting tax on behalf of the Government and to avail ITC accrued on the inward supplies.

Benefits of registration - 

Registration will confer the following advantages to a taxpayer:

(a) He is legally recognized as supplier of goods or services.

(b) He is legally authorized to collect taxes from his customers and pass on the credit of the taxes paid on the goods or services supplied to the purchasers/recipients.

(c) He can claim input tax credit of taxes paid and can utilized the same for payment of taxes due on supply of goods or services.

(d) Seamless flow of Input Tax Credit from suppliers to recipients at the national level.

Threshold limit for registration - 

Registration is mandatory when Aggregate Turnover in a Financial year exceeds Rs.20 lakhs (Aggregate Turnover = Value of Taxable of Supplies + Exempt supplies + Inter State supplies + Exports of both Goods and services of persons having the same PAN calculated on all India basis less tax under IGST, CGST, SGST and Cess), except for special Category States, where the threshold limit for aggregate turnover is Rs.10 lakhs.

Exemption from registration - Irrespective of the turnover, the following dealers are exempted from Registration: -

(a) Agriculturist for the purpose of Agriculture.

(b) Supply of exclusively exempted goods

Voluntary Registration -

A person not liable to be registered under the Act, may get himself registered voluntarily to avail ITC and pass on the ITC to the recipient.

Compulsory Registration - The following class of persons shall compulsorily register; -

(a) Casual Taxable person.

(b) Persons making Inter-state Taxable supply.

(c) Persons who are required to pay tax under reverse charge.

(d) Persons who are required to pay tax as e- commerce operators.

(e)Non-resident taxable person.

(f) Persons required to deduct tax as TDS (Government Agencies, Department etc.)

(g) Persons required to collect tax as TCS (electronic commerce operators)

Casual taxable person and a Nonresident taxable person - A Casul taxable person is one who has a registered business in some State in India but wants to effect supplies in some other State in which he is not having any fixed place of business. such person needs to register in the State from where he seeks to supply as a Casual taxable person.

A Non-Resident taxable person is one who is a foreigner and occasionally wants to effect taxable supplies from any State in India, and for that he needs GST registration. GST law prescribes special procedure for registration, as also for extension of the operation period of such Casual or Non-Resident taxable persons.

They have to apply for registration at least five days in advance before making any supply. Also, registration is granted to them, or period of operation is extended only after they make advance deposit of the estimated tax liability.

Registration process 

(a) Application to be filed online within 30 days of becoming liable.

(b) Casual Dealers and non-resident taxable person shall apply at least 5 days prior to the date of commencement of business period of Validation is as specified in the application or 90 days from the effective date of registration whichever is earlier and an advance deposit of tax, an amount equivalent to the estimated tax liability of such person.

(c) All the core fields (name of business, principal place of business and stakeholders' details, etc.) should be filled up.

(d) Scanned documents to be attached.

(e) Digital Signature or e-sign should be done.

(f) Application to be processed within 3 common working days.

(g) If application is successful the Registration Certification will be sent in the PDF format to the e-mail.

(h) All queries to be raised and communicated by the proper officer within 3 common working days sent in PDF format to the e-mail of the applicant.

(I) Applicant should reply to query within 7 days - failure will entail automatic rejection by the system.

(j) On receipt of reply, registration should be granted/rejected within 7 days.

(k) Rejection of Application under CGST will be a deemed rejection under SGST and vice-versa.

(l) Deemed Approval, if no query.

Credit Note 

For issuing credit note, an invoice for a supply should have been issued earlier. A credit note may be issued in the following circumstances.

(a) The taxable value on which the tax collected is more than the actual taxable value

(b) The tax charged is more than what should have been charged

(c) The recipient has returned the goods

Debit Note 

A debit note may be issued in the following circumstances

(a) The taxable value on which the tax collected is less than the actual taxable value.

(b) The tax charged is less than what should have been charged.

Copies of invoices   for supply of goods the invoice should be prepared in triplicate.

(a) The original copy being marked as "ORIGINAL FOR RECIPENT"

(b) The duplicate copy being marked as "

DUPLICATE FOR TRANSPORTER "and

(c) The triplicate copy being marked as "TRIPLICATE FOR SUPPLIER"

Document for Reverse charge Were tax is to be collected on reverse charges basis, the recipient of goods or services has to issue a payment voucher at the time of making payment to the supplier. The dealer is also required to issue tax invoice mentioning that the tax has been collected on reverse charge basis

Contents of an INVOICE - 

A Tax invoice should contain the following details:

(1) Name, address and GSTIN of the supplier

(2) Consecutive serial number containing alphabets or numerals or special characters hyphen (-) or slash (/) for a financial year.

(3) Date of issue 

(4) Name, address and GSTIN or UIN of the recipient, if the recipient is a registered dealer.

(5) Name and address of the recipient if the invoice value is more than Rs. 50000/-

(6) HSN code of goods or accounting code of services

(7) Description of goods or services 

(8) Quantity in case of goods and unit or Unique Quantity code thereof

(9) Total value of supply of goods or services or both

(10) Taxable value of supply of goods or services or both taking into account

(11) Rate of tax separately for each type of tax (central tax, State tax, integrated tax or cess)

(12) Amount of tax charged (central tax, State tax, integrated)

Amendment in Registration:

Except for the changes in some core information in the registration application, a taxable person shall be able to make amendments without requiring any specific approval from the tax authority. In case the Chage is for legal name of the business or additional place of business, the taxable person will apply for amendment within 15 days of the event necessitating the change. The proper officer, then, will approve the amendment within the next 15 days. For other charges like the name of day-to-day functionaries, e-mail IDs, mobile numbers etc. no. approval of the proper officer is required, and the amendment can be affected by the taxable person on his own on the common portal.

Cancellation of registration - Cancellation of registration can be done in the following circumstances

(1) Transfer of business or discontinuation of business or merger

(2) Death of the proprietor

(3) Change in the constitution of business. (Partnership firm may be changed to sole Proprietorship due to death of one of the two partners, leading to Change in (PAN)

(4) Person no longer liable to be registered (Except when he is voluntarily registered)

(5) Registered taxable person has contravened provisions of the Act or Rules

(6) A composition supplier has not furnished returns for 3 consecutive tax period/any other taxable person has not furnished returns for a continues period of 6 months

(7) Non- commencement of business within 6 months from date of registration by a person who has registered voluntarily.

(8) Where registration has been obtained by means of fraud, willful misstatement or suppression of facts, the registration may be cancelled with retrospective effect.

Revocation of cancellation of registration:

Application for revocation should be made within 30 days from the date of service of cancellation order. The proper officer can revoke cancellation/reject application.

Issue of Invoice for supply of goods - When movement of goods is not involved, tax invoice has to be issued before or at the time of removal of the goods.

When movement of goods is not involved, tax invoice has to be issued before or at the time of delivery of goods to the recipient or when the goods are made available to the recipient.

Issue of Invoice for Supply of services

 In case of supply of service, tax invoice has to be issued within 30 days of supply of services. In case of banking, insurance and other finance companies, invoice has to be raised within 45 days of supply of services.

Issue of invoice by an unregistered person Only a registered person can issue a tax invoice. GST law specifically prohibits collection of tax by persons who are not registered under the GST law

Revised Invoice - The words 'Revised invoice' or Supplementary invoice' should be mentioned prominently in such invoices along with reference of the date and invoice number of the original invoice.

Bill of supply

A Bill of supply is a document issued instead of a tax invoice. Bill of supply is issued for the following supplies

(a) Supply of exempted goods or services, or 

(b) Supply made by a composition taxpayer

For all sales of exempted goods made for a value more than Rs. 200/- and for all sales made by a composition supplier for a value more than Rs. 200/-, Bill of supply need not be issued unless the recipient demands for such a bill. At the end of the day, a consolidated Bill of supply should be.                                  

GST

GST REGISTRATION 

Registration is the most fundamental requirement for the identification of taxpayers to ensure compliance and to obtain a unique registration number for the purpose of collecting tax on behalf of the Government and to avail ITC accrued on the inward supplies)

Benefits of registration

Registration will confer the following advantages to a taxpayer.

(a) He is legally recognized as supplier of goods or services 

(b) He is legally authorized to collect taxes from his customers and pass on the credit of the taxes paid on the goods or services supplied to the purchasers/recipients.

(c) He can claim input tax credit of taxes paid and can utilize the same for payment of taxes due on supply of goods or services

(d) Seamless flow of Input Tax Credit from suppliers to recipients at the national level

Compulsory Registration

The following class of persons shall compulsorily register: -

(a) persons making Inter-State Taxable supply.

(b) Casual Taxable person.

(c) Persons who are required to pay tax under reverse charge.

(d) Persons who are required to pay tax as e-commerce operators.

(e) non-residential taxable person.

(f) Persons required to deduct tax as TDS (Government Agencies, Department etc.,)

(g) Persons required to collect tax as TCS (electronic Commerce operator)

Casual taxa

Goods and services tax (GST)

GST is an indirect tax, which is a transaction-based taxation regime, that has been in effect in India since 1 July 2017

Multiple indirect taxes (except customs duty) have been subsumed within GST, and there is one single tax applicable on supply of goods and services. However, there are a few products that continue to be outside the ambit of GST, such as petrol, diesel, aviation turbine fuel (ATF), natural gas, alcohol for human consumption, and crude oil.

For smooth GST implementation, the government has formed a GST Council. The Council consists of the State Finance Ministers representing their states. The GST Council provides recommendations to the government on various aspects of GST law, such as rate revisions and amendments in GST rules, etc.

GST regime

GST is a comprehensive 'consumption tax' levied on the supply of all goods and services. Indian GST is a dual model:

In case of intra-state supply of goods and services, GST+SGST/UTGST would become applicable, and in case of inter-state supply of goods and services, integrated GST (IGST). The rate of GST varies from 5% to 28% depending upon the category of goods and services being supplied or procured, the general rate of tax being 18% for the majority of supplies. Additionally, some categories of goods/services, such as vehicles, aerated beverages, etc. notified by the government are subject to compensation cess under GST.

Import of goods and services

The import of goods under the GST regime will be subject to IGST and compensation cess (if applicable), along with basic custom duty (BCD)and social welfare surcharge (up to 10% levied on the BCD), BCD and social welfare surcharge paid at the time of imports are not available as credit under GST; consequently, they will always be a cost to the importer.

Similar to erstwhile service tax laws, on import of service, service recipient would be liable to pay IGST under reverse charge. Also, there are specified categories of goods and services notified by the government on which GST needs to be paid by the recipient under reverse charge such as legal services. Goos Transport Agency services, etc.

CBIC vide Notification Nos.11/2023 and 13/2023 and 13/2023 dated 26 September 2023, has exempted the importers from paying IGST on ocean freight in CIF contracts. This is pursuant to the Supreme Court's pronouncement inf the matter of Moth Minerals.

Zero-rated supplies/export of goods and services

Export of goods and services are zero rated under GST. Exporters can claim refund of input tax credit (ITC) of inputs/input services used in export of goods/services, subject to fulfilment of prescribed conditions. To claim the zero, rate on exports, there is a requirement to file a bond/Letter of Undertaking (LUT) to the jurisdictional tax authorities at the beginning of each financial year. Alternatively, the exporter can pay tax on output and claim refund for the same.

Also, the supplies to an SEZ for authorized operations have been made zero rated under GST. Unlike the erstwhile indirect tax regime, which involved a lot of paperwork to claim export refund claims, a simplified online process to claim refund of exports has been speckled under GST.

(A) Bank account for credit of refund means such bank account of the applicant that is in the name of the applicant and obtained on one's Permanent Account Number (PAN)

(B) Option for filing refund of accumulated ITC by taxpayers making exempt/nil-rated supplies, by selecting an option of not having an LUT number is the refund application (to enable a taxpayer making exempt and/or nil-rated supplies, without LUT, to file a refund application as they don't have a valid LUT number to enter in the refund application the Form RFD-01has now been modified

(C) To facilitate exporters, bunching of refund claims across financial years has now been allowed.

(D) Previously to claim a refund of zero-rated supply of services, there was a requirement to receive remittance in foreign exchange within a stipulated time period. Now this requirement has been extended to zero-rated supply of goods as well.

(E) Refund of accumulated ITC is restricted to the amount appearing in Form GSTR-2A/2B. However, the department has now clarified that the restriction will not impact the refund of ITC availed on the invoices/documents relating to imports, input service Distributor (ISD)invoices, and the inwards supplies liable to reverse charge (RC supplies) merely because the same is not reflecting in Form GSTR-

2A

(F) For export of goods, if unutilized ITC is claimed as refund, it is proposed to be mandated to realize the considerations foreign currency within the timelines prescribed in the Foreign Exchanged Management Act (FEMA) guidelines, if the consideration is not realized within the prescribed time, the refund needs to be remitted back to the government along with interest.

(G) Refund of payment wrongly made through electronic credit ledger is allowed (refund amount would be re-credited to credit ledger).

(1) "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

(2) "existing law" means any law, notification, order, rule or regulation relating to levy and collection of duty or tax on goods or services or both passed or made before the commencement of this Act by Parliament or any Authority or person having the power to make such law, notification, order, rule or regulation.

(3) "family" means-  (I) the spouse and children of the person, and the parents, grand-parents, brothers and sisters of the person if they are wholly or namely dependent on the said person.

(4) "Fixed establishment" means a place (other than the registered place of business) which is characterized 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.

(5) "fund" means the consumer welfare fund established under section 57.

(6) "electronic cash ledger" means the electronic cash ledger referred to in sub section (1) of section 49.

(7) "existing law" means any law, notification order, rule or regulation relating to levy and collection of duty or tax on goods or services or both passed or made before the commencement of this Act by parliament or any Authority or person having the power to make such law notification, order, rule or regulation.

GST

 THE CENTRAL GOODS AND SERVICES TAX ACT, 2017 NO. OF 2017

An Act to make a provision for levy and collection of tax on intra-state supply of goods or services or both by the Central Government and for matters connected therewith or incidental thereto.

BE it enacted by parliament in the sixty-eighth Year of the Republic of India as follows: -  

1. Short title, extent and commencement. -(a) This Act may be called the Central Goods and Services Tax Act, 2017.

(b) It extends to the whole of India (*******)'

(c) It shall come into force on such date as the Central Government may, by notification in the official Gazette, appoint:

Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision

(2) Definitions - In this Act, unless the context

otherwise requires, (a) " actionable claim" shall have the same meaning as assigned to it in section 3 of the Transfer of Property Act, 1882.

(b) " address of delivery" means the address of the recipient of goods or services or both indicated on the tax invoice issued by a registered person for delivery of such goods or services or both.

(c) "address on record" means the address of the recipient as available in the records of the supplier.

(d) " adjudicating authority" means any authority, appointed or authorized to pass order or decision under this Act, but does not include the (Central Board of Indirect Taxes and Customs), the Revisional Authority, the Authority for Advance Ruling the Appellate Tribunal and the Authority referred to in sub-section (2) of section 171)

(e) "agent" means a person, including a factor, broker, commission agent, Arratia, del criadera 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.

(f) "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 reverse charge basis), exports of goods or services or both and inter-state supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax integrated tax and cess.

(g) " agriculturist" means an individual or a Hindu Undivided Family who undertakes cocultivation of land-

(b) by the Laboure of family, or

(c) by servants on wages payable in cash or kind or by hired Laboure under personal supervision or the personal supervision of any member of the family.

(d) "Appellate Authority" means an authority appointed or authorized to hear appeals as referred to in section 107

(1) "Appellate Tribunal" means the Goods and services Tax Appellate Tribunal constituted under section 109

(2) " appointed day" means the date on which the provisions of this Act shall come into force.

(3) "Board" means the (Central Board of Indirect Taxes and customs) constituted the Central Board or Revenue Act 1963

(4) "audit" means the examination of records, returns and other documents maintained or furnished by the registered person under this Act or the rules made thereunder or under any other law for the time being in force to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess his compliance with the provisions of this Act or the rules made thereunder

"BUSINESS" INCCLUDES - 

(a) any trade, commerce, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit.

(b) any activity or transaction in commotion with or incidental or ancillary to sub-clause 

(c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction.

(d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business

(e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members.

(f) admission, for a consideration, of persons to any premises.

(g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation.

(h) {activities of a race club including by way of totalizator or a license to book maker or activities of a licensed book maker in such club; and}

(1) " 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.

(2) "causal taxable person" means a person who occasionally undertakes transactions involving supply of goods or services or both in the Couse or furtherance of business, whether as principal, agent or in any other capacity, in a state or a Union territory here he has no fixed place of business.

(3) "central tax" means the central goods and services tax levied under section 9.

4. " common working days" in respect of a State or Union territory shall mean such days in succession which are not declared as gazette holidays by the Central Government or the concerned State or Union Territory Government.

5. "commissioner" means the Commissioner of central tax and includes the Principal Commissioner of central tax appointed under section 3 and the commissioner of integrated tax appointed under the Integrated Goods and Services Tax Act.

6. "composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.

7. "cess" shall have the same meaning as assigned to it in the Goods and Services Tax (Compensation to States) Act.

8. "chartered accountant" means a chartered accountant as defined in clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949

 

9. "Commissioner in the Board" means the commissioner referred to in section 168.

10. "common portal" means the common goods and services tax electronic portal referred to in section 146.

11. "competent authority" means such authority as may be notified by the Government.

Illustration - Where goods are packed and transported with insurance, the supply of goods, packing material, transport and insurance is a composite supply and supply of goods is a principal supply.

12. "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 any 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 ro 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.

provided that a deposit given in respect of the supply of goods or services, or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply.

 13. "continuous supply of goods" means a supply of goods which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, whether or not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis and includes supply of such goods as the Government may, subject to such conditions, as it may, by notification, specify;

14."continuous supply of services" means a supply of services which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes supply of such services as the Government may, subject to such conditions, as it may, by notification, specify.

15. "drawback" in relation to any goods manufactured in India and exported, means the rebate of duty, tax or cess chargeable on any imported inputs or on any domestic inputs or input services used in the manufactured of such goods.

16. "document" includes written or printed record of any sort and electronic record as defined in clause (1) of section 2 of the Information Technology Act, 2000

17. "conveyance" includes a vessel, an aircraft and a vehicle.

18. "cost accountant "means a cost accountant as defined in (Clause (b) of sub-section(I) of section 2 of the Cost and works Accountants Act, 1959

19. "credit note" means a document issued by a registered person under sub-section (1) of section 34. 

20. "debit note" means a document issued by a registered person under sub-section (3) of section 34.