UNIT – 4, TAXATION

Registration Procedure under GST

Person Liable for Registration -

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Section 22 of CGST Ac,

1. Those who exceed the threshold limit.
2. Who are registered under the earlier law.
3. In case of transfer of business on account of succession etc.,
4. In the case of amalgamation / demerger by an order of High Court etc.,

Person Not Liable for Registration -

Section 23 of CGST,
1. Any person engaged exclusively in the business of supplying goods and /or services that
are not liable to tax or wholly exempt from tax under CGST/IGST Act.
2. An agriculturist, to the extent of supply of produce out of cultivation of land.
3. Specified category of persons notified by the Government. Persons making only reverse
charge supplies have been notified as being exempted from obtaining registration under GST
law.

Compulsory Registration in Certain Cases -

Section 24 of CGST,
1. Persons making any inter-state taxable supply.
2. Casual taxable persons making taxable supply.
3. Persons who are required to pay tax under reverse charge.
3. Persons who are required to pay tax under sub-section 5 of Section 9.
4. Non-resident taxable persons making taxable supply.
5. Persons who are required to deduct tax under section 51, whether or not separately
registered under this Act.
6. Every electronic commerce operator.

Procedure for Registration -

Section 25 of CGST Act 2017,

1. Every person who is liable to be registered under section 22 or section 24 shall apply for
registration in every such State or Union territory in which he is so liable within 30 days from
the date on which he becomes liable to registration, in such manner and subject to such
conditions as may be prescribed.

2. A person seeking registration under this Act shall be granted a single registration in a State
or Union territory.

3. A person, though not liable to be registered under section 22 or section 24 may get himself
registered voluntarily, and all provisions of this Act, as are applicable to a registered person,
shall apply to such person.

4. A person who has obtained or is required to obtain more than one registration, whether in
one State or Union territory or more than one State or Union territory shall, in respect of each
such registration, be treated as distinct persons for the purposes of this Act.

5. Where a person who has obtained or is required to obtain registration in a State or Union
territory in respect of an establishment, has an establishment in another State or Union
territory, then such establishments shall be treated as establishments of distinct persons for
the purposes of this Act.

6. Every person shall have a Permanent Account Number issued under the Income tax Act,
1961 in order to be eligible for grant of registration.

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In case a person required to deduct tax under section 51 may have, in lieu of a Permanent
Account Number, a Tax Deduction and Collection Account Number issued under the said
Act in order to be eligible for grant of registration.

7. Where a person who is liable to be registered under this Act fails to obtain registration, the
proper officer may, without prejudice to any action which may be taken under this Act or
under any other law for the time being in force, proceed to register such person in such
manner as may be prescribed.

8. notwithstanding anything contained in sub-section (1),

a. any specialised agency of the United Nations Organisation or any Multilateral Financial
Institution and Organisation notified under the United Nations (Privileges and Immunities)
Act, 1947, Consulate or Embassy of foreign countries.
b. any other person or class of persons, as may be notified by the Commissioner, shall be
granted a Unique Identity Number in such manner and for such purposes, including refund of
taxes on the notified supplies of goods or services or both received by them, as may be
prescribed.

9. The registration or the Unique Identity Number shall be granted or rejected after due
verification in such manner and within such period as may be prescribed.

10. A certificate of registration shall be issued in such form and with effect from such date as
may be prescribed.

Levy and Collection of tax

A. Levy and Collection of GST under CGST Act -

Section 9
1. Under CGST Act, central tax called as the central goods and services tax (CGST) shall be
levied on all intra-State supplies of goods or services or both, except on the supply of
alcoholic liquor for human consumption. It shall be levied on the value determined under
section 15 and at such rates, not exceeding 20%, as may be notified by the Government on
the recommendations of the Council and collected in such manner as may be prescribed and
shall be paid by the taxable person.

2. The central tax on the supply of petroleum crude, high speed diesel and petrol, natural gas
and aviation turbine fuel shall be levied with effect from such date as may be notified by the
Government on the recommendations of the Council.

3. The Government may, on the recommendations of the Council, by notification, specify

categories of supply of goods or services or both, the tax on which shall be paid on reverse
charge basis by the recipient of such goods or services or both.

4. The central tax in respect of the supply of taxable goods or services or both by a supplier,
who is not registered, to a registered person shall be paid by such person on reverse charge
basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is
the person liable for paying the tax in relation to the supply of such goods or services or both.

5. The Government may, on the recommendations of the Council, by notification, specify

categories of services the tax on intra-State supplies of which shall be paid by the electronic
commerce operator (ECO), if such services are supplied through it. Further, all the provisions
of this Act shall apply to such electronic commerce operator (ECO) as if he is the supplier
liable for paying the tax in relation to the supply of such services.
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B. Levy and Collection of GST Under IGST Act –

Section 5 are similar to section 9 of CGST Act except—

a. the word CGST has been substituted by IGST under IGST Act
b. under IGST Act, tax called integrated tax is to be levied on all interState supplies and on
goods imported into India.
c. maximum rate under section 5(1) of the IGST Act is 40% (i.e. 20% CGST + 20%
UTGST).

C. Levy and Collection of GST Under UTGST Act –

Section 7 are similar to section 9 of CGST Act except—
a. the word CGST has been substituted by the word UTGST under the UTGST Act. b. under
UTGST Act, tax called UT tax is be levied on all intra-State supplies,
c.maximumrate7(1)ofUTGST Actis20%.

Composition under GST

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Section 10 of CGST Act 2017,

1. A registered person whose aggregate turnover in the preceding financial year did not
exceed specified amount, may opt to pay tax under Composition Scheme in lieu of the tax
payable under normal taxation
a. A registered person who opts for composition can pay tax at one per cent of the turnover in
State or turnover in Union territory in case of manufacturer,
b. Two and half per cent of the turnover in State turnover or Union territory in case of
persons engaged in making supplies referred to in clause (b) of the paragraph 6 of the
Schedule II, and
c. Half per cent of the turnover in State or turnover in Union Territory in case of other
supplies,

2. The registered person shall be eligible to opt,

a. He is not engaged in the supply of services as provide in sub-section (1).
b. He is not engaged in making any supply of goods which are not leviable to tax under
CGST Act;
c. He is not engaged in making any inter-State outward supplies of goods.
d. He is not engaged in making any supply of goods through an electronic commerce operator
who is required to collect tax at source under section 52 and
e. He is not a manufacturer of such goods as may be notified by the Government on the
recommendation of the Council.

3. Composition scheme shall lapse with effect from the day on which his aggregate turnover
during a financial year exceeds the limit specified under sub-section (1) section 10.

4. The person who opts for composition scheme shall not collect any tax from the recipient
on supplies made by him. Further he not entitled to take input credit.

5. The composition taxable person is required to mention “composition taxable person” on

every notice or signboard at the principal place of business and at every additional place or
places of business.

Tax Invoice

Section 31, every registered person under GST supplying Goods or Services is required to
issue a tax invoice for all supplies.

Tax invoice issued by the registered person contain the following particulars – 1. Name,
address and GSTIN of the supplier.
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2. A consecutive serial number, not exceeding sixteen characters.

3. Date of issue.
4. Nam, address and GSTIN or UIN, if registered, of the recipient.
5. Name and address of the recipient and the address of delivery, along with the name of
State and its code, if such recipient is un-registered and where the value of taxable supply is
fifty thousand rupees or more.

6. HSN code for goods or services.

7. Description of goods or services.
8. Quantity in case of goods and unit or Unique Quantity Code thereof. 9. Rate of tax.
10. Amount of tax charged in respect of taxable goods or services.

Supplier of taxable goods is required to issue invoice –

a. Before or at the time of removal of the goods where the supply of involves movement of
goods or
b. Before or at the time of delivery of the goods to the recipient where the supply does not
involve movement of goods.

Supplier of services is required to issue a tax invoice –

a. Before the provision of the services or
b. After provision of the services but within a specified time.

The invoice is to be prepared in triplicate in case of supply of goods. Original for Recipient,
Duplicate for Supplier and Triplicate for Supplier.

In case of supply of services invoice is to be prepared in duplicate. Original for Recipient and
Duplicate for Supplier.

Credit and Debit Notes [ 3 Marks ]

In case where tax invoice has been issued for the supply and the taxable value or tax charged
in that tax invoice is found to exceed the taxable value or tax payable in respect of such
supply, or where the goods supplied are returned by the recipient, or where goods or services
or both supplied are found to be deficient, the registered person who has supplied may issue
to the recipient containing such particulars as may be prescribed.

The registered person who issues the credit note has to declare details of such credit note in
the return for the month during which such credit note has been issued but not later than
September following the end of the financial year in which such supply was made or date of
furnishing the annual return whichever is earlier.
Where invoice has been issued for supplies and taxable value or tax is charged in that tax
invoice is found to be less than the taxable value or tax payable in respect of such supply the
registered person who has supplied shall issue to the recipient a debit note containing such
particulars as prescribed.

Any registered person who issued a debit note in relation to a supply has to declare the details
of such debit note in the return for month during which such debit note has been issued and
the tax liability has to be adjusted in the prescribed manner.

Input Tax Credit

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Any registered person can avail credit of input tax charged on the inward supply of goods or
services or

both which are used or intended to be used in the course or furtherance of his business.

Conditions for availing in put tax credit by the registered person are as under –
1. Possession of tax invoice or debit note or any other specified tax paying document issued
by the supplier.
2. Has received the goods or services
3. Tax is actually paid by the supplier.
4. Has furnished the valid return prescribed under the Act.
5. If the inputs are received in lots or instalments, input credit can be availed only when the
last lot or instalment of the input is received.
6. Payment to the supplier towards value of the supplies with tax to be made within 180 days
from the date of issue of invoice, failing which the amount of credit availed by him would be
added to his output tax liability and he shall also liable to pay interest at 18% from the date of
availing credit till the date when the payment is made to the supplier.

Based on the following documents input tax credit can be availed –

a. Invoice issued by a supplier of goods or services or both.
b. Self-Invoice issued by recipient under reverse charge in case of receipt of goods or services
or both from unregistered supplier along with proof of payment of tax.
c. A debit note issued by supplier.
d. Bill of entry or similar document prescribed under Customs Act.
e. Revised invoice.
f. Document issued by Input Service Distributor.

Time limit for claiming Input Tax Credit (ITC) –

ITC on invoices pertaining to a financial year cannot be availed beyond the due date of filing
or

return for the month/quarter ended September of the following financial year or the date of
filing of annual return, whichever is earlier.

In respect of cases mentioned in section 17(5) of the CGST Act 2017 ITC is not available.

Payment of Tax

Provisions relating to payment of tax, interest, penalty and other amounts are covered under
section 49 of CGST Act, 2017.

Electronic Ledgers are statements of cash and input tax credit in respect of each registered
taxpayer. Along with the electronic cash ledger each taxpayer shall also have an electronic
liability register. Amount credited to the electronic cash ledger can be used for making
payment of tax, interest, penalty, fees or any other amount payable under the provisions of
CGST Act or CGST Rules subject to conditions and such time as may be prescribed.

The person has to generate a challan in Form GST PMT-06 on the common portal and enter
the details of the amount to be deposited by him towards tax, interest, penalty, fees or any
other amount.

For making payment challan is to be generated in the GST portal then payment is to be made
through electronic gateway.

Electronic Credit Ledger shall be maintained in Form GST PMT02 for each registered person
eligible for input tax credit under the CGST Act on the common portal and every claim of
input tax credit
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under this Act shall be credited to said ledger. When liability under GST is discharged
electronic cash

ledger is debited to extent of discharge of liability.

The amount of input tax available in the electronic credit ledger of the registered person on
account of –

Integrated tax shall first be utilized towards payment of integrated tax and the amount
remaining, if any may be utilized towards the payment of CGST and SGST, or as the case
may be, Union territory tax, in that order.

The Central tax shall first be utilized towards payment of central Tax and the amount
remaining, if any, may be utilized towards payment of integrated tax.

The State tax shall be first utilized towards payment of State Tax and the amount remaining,
if any, may be utilized towards payment of integrated tax.

The Union territory tax shall be first be utilized towards payment of Union territory tax and
the amount remaining, may be utilized towards payment of integrated tax.

The Central tax shall not be utilized towards payment of State tax or Union territory tax.

The State tax or Union territory tax shall not be utilized towards payment of Central tax.
Taxable person has to 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 related to returns of previous tax periods.
b. Self-assessed tax, and other dues related to the return of the current tax period.

c. Any other amount payable under this Act or the rules made thereunder including the
demand determined under section 73 and 74.
d. Payment of Interest towards delay in payment of tax.
e. Delay in payment of tax interest charged at 18% per annum.

f. Interest towards undue or excess claim of input tax credit or undue or excess reduction in
output tax liability interest charged at 24%.

Returns under GST

The registered person under GST is required to submit various returns at periodical intervals.
All returns are to be filed electronically.

GSTR-1 to be filed Monthly/Quarterly furnishing details of outward supplies of goods and

/or services effected during a tax period. GSTR- is to be filed on or before 10th day of the
succeeding the said tax period in cases where turnover exceeds Rs 1.50 crores. Quarterly
GST-1 are to furnished within prescribed due date after the end of the quarter.

GSTR-3B to be filed monthly furnishing details of inward and outward supplies of goods
and/or services, input tax credit availed, tax payable, tax paid and other prescribed
particulars.

GSTR-9 to be filed annually.

Return
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The available in the electronic cash ledger or electronic credit ledger after payment of tax,
interest, penalty, fee or any other amount payable under the CGST Act or the CGST Act
Rules made thereunder may be refunded in accordance with the provisions of section 54.

When refund claim has been made, such amount shall be debited to the electronic cash or
credit ledger, In cases where refund claim is rejected, electronic cash ledger or credit ledger
shall be credited by the proper officer by passing an order in From GST PMT-03.

GST Practitioners [ 3 Marks ]

Section 2(55), means any person who has been approved under section 48 to act such
practitioners.
A registered person under GST may authorize GST Practitioners to furnish details of outward
supplies and inward supplies through GST returns.

GST Practitioners are required to perform such other prescribed functions.

The responsibility for correctness of any particulars furnished in the return or other details
filed by the GST Practitioners rests with the registered person, as the GST Practitioner
furnishes the return on behalf of the registered person.

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