Unit 1

The terms mentioned in your query are legal definitions and concepts under the
Goods and Services Tax (GST) framework in India. Below is an explanation of each
term:
1. Aggregate Turnover (Sec 2(6)): It refers to the total value of all taxable
supplies (excluding the value of inward supplies on which tax is payable on a
reverse charge basis), exempt supplies, exports of goods or services, and
inter-state supplies of persons having the same Permanent Account Number
(PAN), to be computed on an all-India basis.
2. Business (Sec 2(17)): It includes trade, commerce, manufacture, profession,
vocation, adventure, or any similar activity, whether or not for a pecuniary
benefit. It also includes any activity or transaction related to supply or
intended supply of goods or services.
3. Scope of Supply: The supply under GST includes all forms of supply of
goods/services such as sale, transfer, exchange, lease, etc., made for a
consideration during the course of business.
4. Capital Goods (Sec 2(19)): Goods used or intended to be used in the course
or furtherance of business are classified as capital goods under GST.
5. Taxable Person (Sec 2(20)): It refers to a person who is registered or
required to be registered under the GST Act.
6. Composite Supply (Sec 2(30)): A supply made by a taxable person
comprising two or more supplies of goods or services that are naturally
bundled and supplied together in the ordinary course of business. The supply
is treated as a single supply.
7. Consideration (Sec 2(31)): It includes any payment made or to be made for
the supply of goods or services and includes monetary as well as non-
monetary consideration.
8. Continuous Supply of Goods (Sec 2(32)): A supply of goods provided
continuously or on a recurrent basis under a contract for a period exceeding
three months.
9. Continuous Supply of Services (Sec 2(33)): A supply of services provided
continuously or on a recurrent basis under a contract with periodic payment
obligations.
10. Electronic Commerce (Sec 2(44)): The supply of goods or services,
including digital products, over a digital or electronic network.
11. Electronic Commerce Operator (Sec 2(45)): Any person who owns,
operates, or manages a digital or electronic platform for e-commerce.
12. Exempt Supply (Sec 2(47)): Supply of goods or services which attract a nil
rate of tax or are exempt from tax under the GST law.
13. Fixed Establishment (Sec 2(50)): A place, other than the principal place of
business, that is characterized by a sufficient degree of permanence and
suitable structure for the supply of goods or services.
14. Goods (Sec 2(52)): Every kind of movable property other than money and
securities but includes actionable claims, growing crops, grass, and things
attached to or forming part of the land.
15. Input Service Distributor (Sec 2(61)): A supplier who distributes input tax
credit to its branches or other units under the same PAN.
16. Job Work (Sec 2(68)): Any treatment or process undertaken by a person on
goods belonging to another registered person.
17. Location of Recipient of Services (Sec 2(70)):
Refers to the place where the recipient of services is located. The specific
determination depends on the nature of the recipient:
• If registered, it is the location of the recipient's registered place of business.
• If unregistered, it is the address on record of the recipient.
18. Market Value (Sec 2(73)):
The price at which goods or services are ordinarily sold in the open market to
unrelated persons at the time and place of supply under similar
circumstances.
19. Mixed Supply (Sec 2(74)):
A combination of two or more individual supplies of goods or services made
together for a single price where each supply does not naturally bundle
together. The tax rate for mixed supply is determined based on the highest
rate applicable to any item in the combination.
20. Outward Supply (Sec 2(83)):
Refers to the supply of goods or services or both by a person in the course or
furtherance of business.
21. Place of Business (Sec 2(85)):
Includes:
• A place where the business is ordinarily carried out, including storage of
goods.
• A place where the person maintains books of account.
• A place where the taxable person carries out activities through an agent.
22. Recipient (Sec 2(93)):
The person who receives the supply of goods or services. Depending on the
transaction:
• If consideration is involved, the person liable to pay the consideration is the
recipient.
 • If no consideration is involved (e.g., gifts), the person to whom goods or
services are delivered is the recipient.
23. Services (Sec 2(102)):
Anything other than goods, money, or securities. It includes intangible
products, actionable claims, and benefits derived from services.
Unit 2
Here’s an explanation of the GST-related terms from your query:
1. Section 7 - Scope of Supply:
This section defines the meaning and scope of "supply" under GST. Supply
includes:
o All forms of supply of goods or services such as sale, transfer, barter,
exchange, license, rental, lease, or disposal made for a consideration
in the course or furtherance of business.
o Certain specified activities without consideration, such as transfers
between related entities.
o Imports of services for consideration, whether or not in the course of
business.
2. Levy and Collection of GST (Section 9):
o GST is levied on all intra-state supplies of goods or services or both,
except alcohol for human consumption, at the rates prescribed by the
GST Council.
o It includes provisions for reverse charge mechanism (where the
recipient pays GST instead of the supplier).
o Also includes tax on e-commerce operators for specified services.
3. Composition Levy (Section 10):
This section provides an option for small taxpayers to pay GST at a fixed
percentage of their turnover instead of regular GST rates. Key points:
o Applicable to taxpayers with aggregate turnover not exceeding the
prescribed threshold (e.g., ₹1.5 crore in most states).
o Simplified compliance requirements, but certain conditions apply (e.g.,
no inter-state supply or supply of exempt goods).
Unit 3
Here’s an explanation of the concepts related to the Time of Supply under GST:
1. Time of Supply of Goods (Section 12(2)):
The time of supply of goods determines when the GST liability arises for a taxable
person. It is the earliest of the following:
 • Date of issue of the invoice or the last date when the invoice should have
been issued (as per Section 31 of the GST Act).
• Date of receipt of payment (the date when payment is credited to the
supplier's account or the date of entry in the books, whichever is earlier).
• In cases where the above two are not applicable, the date on which the
recipient shows receipt of goods in their books of accounts.
2. Time of Supply of Services (Section 13(2)):
The time of supply of services is the earliest of the following:
• Date of issue of the invoice or the last date when the invoice should have
been issued (as per Section 31 of the GST Act).
• Date of receipt of payment (the date when payment is credited to the
supplier’s account or the date of entry in the books, whichever is earlier).
If the above are not applicable, the time of supply will be the date on which the
recipient shows receipt of services in their books of accounts.
3. Time of Supply in Reverse Charge Mechanism (RCM):
For both goods and services, under reverse charge mechanism, the time of
supply is determined as follows:
• Date of receipt of goods/services.
• Date of payment (the date on which the payment is debited in the recipient’s
books or the date of payment, whichever is earlier).
• 30th day (for goods) or 60th day (for services) from the date of issue of the
invoice by the supplier.
Unit 4
Here is a detailed explanation of the relevant provisions regarding the Value of
Taxable Supply under GST:

Section 15 - Value of Taxable Supply

The value of a supply of goods or services under GST is the transaction value,
which is the price actually paid or payable for the supply, provided:
1. The supplier and recipient are not related.
2. The price is the sole consideration for the supply.
Components Included in Value:
The following are included in the transaction value:
• Any taxes, duties, cesses, fees, and charges (except GST), if charged
separately.
 • Any amount the supplier is liable to pay but which has been incurred by the
recipient.
• Incidental expenses (e.g., packing, commission) charged by the supplier.
• Interest, late fee, or penalty for delayed payment.
• Subsidies directly linked to the price, excluding subsidies provided by the
government.
Exclusions from Value:
• Discounts given before or at the time of supply, provided they are duly
recorded in the invoice.
• Post-supply discounts, if agreed upon before the supply and linked to relevant
invoices.

Rule 28 - Value of Supply Between Distinct or Related Persons (Other than

Through an Agent)
For supplies between related or distinct persons (e.g., branches or units of the same
company), the value of supply is:
1. Open Market Value (OMV), if available.
2. If OMV is not available, the value can be determined as:
o Value of similar goods or services.
o 110% of the cost of production/manufacture or cost of provision of
service.
o Self-assessed value if none of the above are feasible.
If the recipient is eligible for full input tax credit (ITC), the invoice value declared
will be accepted as the value of supply.

Rule 29 - Value of Supply of Goods or Services Through an Agent

When goods or services are supplied through an agent, the value is:
1. Open Market Value, if ascertainable.
2. If OMV is not available, it can be determined as:
o Value of identical or similar goods or services.
o 110% of the cost of goods manufactured or cost of service
provided.
If the recipient is entitled to full ITC, the value declared in the invoice can be
accepted as the value of supply.
 Unit 5
Here’s a detailed explanation of the Concept of Input Tax Credit (ITC) and related
principles under the GST framework:

Concept of ITC
Input Tax Credit (ITC) is the mechanism under GST that allows a registered
taxpayer to claim credit for the GST paid on purchases (inputs) used in the course of
business. This credit can be utilized to offset the tax liability on outward supplies.

Principles of ITC
1. ITC is available only to a registered taxable person.
2. ITC can be claimed only if the goods or services are used for the purpose of
business.
3. ITC eliminates the cascading effect of taxes, ensuring tax is levied only on the
value addition.
4. ITC is not available for goods and services used for personal consumption
or exempted supplies.
5. The benefit of ITC depends on proper documentation and compliance with
conditions.

Conditions for Availment of ITC (Section 16)

A registered taxable person can claim ITC if:
1. The taxpayer has a valid tax invoice or debit note issued by a registered
supplier.
2. The goods or services have been received by the taxpayer.
3. The tax has been paid to the government by the supplier (through cash or
ITC).
4. The taxpayer has filed a valid GST return (GSTR-3B).
5. If goods are received in lots or installments, ITC can only be claimed after
receipt of the last lot.

ITC in Case of Capital Goods (Section 17)

• ITC on capital goods (assets used for business) can be claimed in full,
provided the capital goods are used for taxable supplies.
 • If the capital goods are used partially for taxable and exempt supplies, ITC
must be apportioned accordingly.
• Depreciation cannot be claimed on the GST component of the cost of capital
goods for which ITC has been claimed.

ITC on the Basis of Use of Inputs (Section 17)

• If inputs are used for taxable supplies, ITC can be claimed fully.
• If inputs are used for exempt supplies or non-business purposes, ITC
cannot be claimed.
• If inputs are used for both taxable and exempt supplies, ITC must be
proportionately reversed for the exempt portion.

Restrictions on ITC (Blocked Credits - Section 17(5))

ITC is not available in the following cases:
1. Personal Consumption: Goods or services used for personal purposes.
2. Exempt Supplies: Inputs used for exempt supplies or supplies attracting nil
rate of tax.
3. Motor Vehicles: ITC on motor vehicles is restricted unless they are used for
specific purposes (e.g., transportation of goods, passenger transportation,
training, etc.).
4. Membership Fees: ITC is blocked for membership of clubs, health, or fitness
centers.
5. Travel and Accommodation: ITC is restricted for travel, life insurance, and
accommodation unless these are obligatory under employment law.
6. Works Contracts: ITC on works contract services is blocked unless it is an
input service for further supply of works contracts.
7. Goods Lost, Stolen, or Destroyed: ITC cannot be claimed on goods lost,
stolen, destroyed, written off, or disposed of as gifts or free samples.