Goods And Services Tax 5th Sem BBA

IGST ACT: (12 Marks)

The Integrated Goods and Services Tax Bill was introduced in Lok-Sabha on March 27,
2017. The Bill provides for the levy of the Integrated Goods and Services Tax (IGST) by the
center on inter-state supply of goods and services.
1. Existing CST (Central state tax, tax on interstate movement of goods) shall be
discontinued.
2. The center will levy IGST in the case of (i) inter-state supply_ of goods and services,
(i) imports and (iii) supplies to and from special economic zones. Supply includes
sale, transfer, exchange and lease made for a consideration to further a business. In
addition, IGST will be levied on any supply which will not fall under the purview of
the Central and State GST Acts.
3. The IGST revenue collected by the center will be apportioned between the center and
to the state where the supply of goods or services was received. The collected
revenue will be apportioned to the center at tax rate specified in the CGST Act. The
rest will be apportioned to the state.
4. IGST is intermediary tax mainly on B2B transactions It is not imagined as final tax.
5. If IGST is paid on B2C transaction, the state where goods/services/both are
consumed will get their share of SGST.
6. IGST rate is double the CGST rate and will be uniform all, over India.
7. The relevant information shall be submitted to the Central Agency which will act as
a clearing house mechanism, verify the claims and inform the respective state
governments or central government to transfer the funds.
8. The provisions of the CGST Act with respect to registration, valuation, time of
supply of goods and services, returns, refunds, prosecution, appeals will be
applicable to the IGST Act.
9. IGST will be payable on inter-state stock transfers, branch transfers etc.

FRAMEWORK UNDER GST (DUAL MODEL): (2 Marks)

Since July 2017, India has been following the dual-GST model, which Is made up of the
following components:
• SGST-GST collected by the State Government.
• CGST - GST collected by the Central Government.
When the sale of goods and services takes place within the same state, both taxes will be
levied. If the movement of goods occurs between two different states (i.e., an interstate

Govindaraj G
Lecturer of Commerce & management
Goods And Services Tax 5th Sem BBA

transaction), a combined tax called the IGST or the Integrated GST (SGST + CGST) will be
collected by the central government. The IGST will replace the previously levied Central
Sales Tax (CST) of 2%. The tax amount collected as IGST will later be distributed to
respective state governments.

GST TAX RATE STRUCTURE:

Zero rate
The tax structure of GST has the following slabs:
The zero-rate tax is a nil tax that is applied on goods and services. Zero rated items include
milk, eggs, curd, fresh meat, fish, chicken, butter milk, natural honey, fresh fruits and
vegetables, salt, bindi, stamps, judicial papers, printed books, newspapers, bangles, etc.
Lower rate
A lower rate of 5% will be applied on items like Coffee, tea, edible oil, coal, spices, cream,
skimmed milk powder, frozen vegetables, medicines, kerosene, life boats and cotton
fabric.
Standard rate
There are two standard rates that have been finalized by the GST Council: 12% and 18%.
Processed food, butter, cheese, ghee, tooth powder, agarbatti, umbrella and mobile phones
will be taxed at 12%. Refined sugar, soups, Ice cream, mineral water, tissues, camera,
speakers, Capital goods, Industry Intermediaries, toiletries, computers and printers will
be taxed the second standard rate of 18%.
Higher rate
A higher rate of 28% will be levied on white goods. This Includes Items such as washing
machines, high-end motorcycles, air conditioners, refrigerators, small cars, hair shampoo,
speakers, etc.

GOODS:
As per Section 2(52) of the Central Goods and Services Tax (CGST) Act, 2017, the term
"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.

Govindaraj G
Lecturer of Commerce & management
Goods And Services Tax 5th Sem BBA

SERVICES:
The term services mean anything other than goods, money and securities. It Includes
activities relating to the use of money or its conversion by cash or by any other mode to
another form for which a separate consideration Is charged.

CASUAL TAXABLE PERSON: (2 Marks)

As per Section 2(20) of the Central Goods and Services Tax (CGST) Act, 2017, the term
"casual taxable person" means a person who occasionally undertakes transactions
involving supply of goods or services or both in the course or furtherance of business,
whether as principal, agent or in any other capacity, in a State or a Union territory, where
he has no fixed place of business.

GOODS EXEMPTED FROM GST:

1. Agriculture implements
2. Bangles (except those made from precious metals).
3. Indian national flag
4. Gandhi Topi.
5. Raw silk, silk waste
6. Court fee stamps sold by authorized vendors
7. Jaggery.
8. Coffee beans (not roasted).
9. Vegetables (other than those put up in a container, which has registered brand
name),.
10.Trees and plants.
11.Milk (other than those put up in a container, which has registered brand name).
12.Meat (other than those put up in a container, which has registered brand name).
13.Fire wood.
14.Kajal(kajal pencil sticks), Bindi, Kumkum.
15. Salt

SERVICES EXEMPTED FROM GST:

1. Import of services by UNO.
2. Import of services by foreign diplomatic mission
Govindaraj G
Lecturer of Commerce & management
Goods And Services Tax 5th Sem BBA

3. Services provided by intermediary when supplier and recipient of goods are located
outside India.
4. Health care services
5. Disposal of bio-medical waste.
6. Training program financed by the government.
7. Services by RBI
8.Transportation of goods by GTA (goods transport agency) Services.
9. Services provided by the Indian institutes of management.
10. Services provided to recognized sports body.
11. Services relating to agricultural activities.

Composition Scheme: (2 Marks)

In order to bring simplicity and to reduce the cost for the small tax payers, a simplified
scheme has been Introduced u/s 10 of CGST Act called as composition levy or composition
scheme.

It is available to the Assessee, whose aggregate turnover in. the preceding FY does not
exceed Rs 1.5 crores. In case of Uttarakhand, Manipur, Meghalaya, Mizoram, Arunachal
Pradesh, Assam, Sikkim, Tripura, Nagaland, and, this limit is ₹ 75 lakhs.

Composition Scheme is optional. The taxpayer has to mention the words `composition
taxable person' on every bill of supply issued by him. They are also required to display the
words" composition taxable person" on every notice and signboard.

This scheme is not available to the manufacture of ICE creams, Pan masala, Aerated water,
Tobacco products. Composite scheme dealer cannot make inter-state supply and
imports/exports.

Govindaraj G
Lecturer of Commerce & management
Goods And Services Tax 5th Sem BBA

Registration

As per Section 24 of CGST Act, compulsory registration is applicable on the casual taxable
person making a taxable supply in India irrespective of the turnover. In other words, no
threshold limit is applicable to the casual taxable person. Also, a casual taxable person is
not allowed to exercise the option to pay tax under the composition scheme.

Taxable Person Under GST:

A ‘taxable person’ under GST, is a person who carries on any business at any place in India
and who is registered or required to be registered under the GST Act. Any person who
engages in economic activity including trade and commerce is treated as a taxable person.

Who is the person compulsorily required to register under the GST act?
(12 Marks)

As per section 24, the following category of person are compulsorily required to get
registered under the GST act irrespective whether the turnover has crossed the threshold
limit or not:

1. Person making interstate taxable supply except person who is engaged exclusively
in interstate supply of service having aggregate turnover up to RS. 20 lakhs and Rs.
10 lakhs in case of special category states
2. Casual taxable person who does not have a fixed place of business in the state or
union territory from where he wants to make supply. However, threshold limit of
Rs, 20 lakh/ Rs. 10 lakhs in case of special category states of Tripura, Manipur and
Nagaland is available in case of person who is engaged in exclusive supply of
notified handicraft goods.
3. Persons who are required to pay tax under reverse charge mechanism (where the
recipient of the goods or services is liable to pay Goods and Services Tax (GST)
instead of the supplier) (registered with unregistered dealer)
4. E-commerce operator who are required to pay tax on specified services
5. Persons who are required to deduct TDS under section 51
6. Persons who make taxable supply of goods or services or both on behalf of other
taxable persons whether as an agent or otherwise;
7. Non-resident taxable person making taxable supply
8. Input service distributor whether or not separately registered under the act.

Govindaraj G
Lecturer of Commerce & management
Goods And Services Tax 5th Sem BBA

9. Person who is supplying goods or service through e-commerce operator and whose
aggregate turnover exceed Rs. 20 lakhs (10 Lakhs in case of special category states of
Tripura, Manipur and Nagaland.
10.Every e-commerce operator who is required to collect tax at source as per section 52
(Section 52 of the CGST Act, 2017 provides for Tax Collection at source, by e-
Commerce operator)
11.Every person supplying online information and database access or retrieval services
(services provided through the medium of internet) from a place outside India to a
person in India, other than a registered person and
12.Any other person as may be notified by the government on the recommendation of
the GST council

Summary Of Taxable person:

Turnover limit for
Person the previous year
Person engaged exclusively in supply of goods Rs. 40 lakhs
Person engaged in supply of goods or service or both Rs. 20 Lakhs
Person engaged in supply of goods or service or both in states Rs. 10 Lakhs
of Manipur, Mizoram, Nagaland and Tripura

Who is the person not liable for registration under GST? (2 Marks)
Section 23 of the CGST act 2017 provides the detailed list of persons not liable for GST
registration. As per the said section the following are the persons not liable for registration
under GST:

1. Person engaged exclusively in supplying goods or services or both not liable to tax.
2. Person engaged exclusively in supplying goods or services or both exempt from tax.
3. Agriculturist engaged in supply of produce cultivated out of land.
4. Any other person as may be notified by the government.

Till date the government has notified the following persons who are not
liable for registration under GST: (4 Marks)
1. Person making interstate supply of service and having an aggregate turnover not
exceeding Rs. 20 Lakhs on all India basis (Rs. 10 lakhs in case of Mizoram, Nagaland,
Manipur and Tripura).
Govindaraj G
Lecturer of Commerce & management
Goods And Services Tax 5th Sem BBA

2. Persons making interstate supply of notified handicraft goods and having turnover not
exceeding Rs. 20 Lakhs on all India basis (Rs. 10 lakhs in case of Nagaland, Manipur
and Tripura).

3. Casual taxable person making interstate taxable supply of handicraft goods and other
notified handicraft goods not exceeding Rs. 20 Lakhs on all India basis (Rs. 10 lakhs in
case of Nagaland, Manipur and Tripura).

4. Job workers engaged in interstate supply of services to a registered person except

person who is liable to get registered as per section 22 of the CGST act, 2017 (Special
category) i.e. he is liable for registration after the threshold limit is crossed.

5. Person engaged in exclusive supply of goods and whose aggregate turnover in the
previous financial year exceed Rs. 40 Lakhs except:

i. Ice cream and other edible ice, whether or not containing cocoa.

ii. Pan masala.

iii. Tobacco and manufactured tobacco substitutes.

Cancellation of Registration: (4 Marks)

1. Business has been discontinued
2. The registered taxable person has broken the law provisions of GST
3. Any taxable person who has not furnished returns for a continuous period of six
months.
4. Any registration has been obtained by fraud, willful misstatement or suppression of
facts.
5. Person paying tax under composition levy has not furnished returns for three
consecutive quarters.
6. There is any change in the constitution of the business.
7. Any person who has taken voluntary registration and has not commenced business
within six months from the date of registration.

SUPPLY: (2 Marks)
Supply of goods or services or both is defined as sale, transfer, barter, exchange, license,
rental, lease or disposal made or agreed to be made for a consideration by a person in the
course or furtherance of business.

Govindaraj G
Lecturer of Commerce & management
Goods And Services Tax 5th Sem BBA

Types Of
Supply

A) Based on B) Based on C) Based on D) Based on

location Combination Recipient tax treatement

1. Intra State 1. Composite 1. Inward 1. Non Taxable

Supply Supply Supply supply

2. Inter State 2. Mixed 2. Outward 2. Taxable

Supply Supply Supply Supply

3. Exempted
Supply

4. Zero Rated
supply

A) BASED ON LOCATION
1. INTRA-STATE SUPPLY
Under GST, supply of goods or services within the same state or Union territory is called
as intrastate supply. In the case of intrastate supply, the GST rate for the goods or services
would remain the same. However, the GST rate and tax amount are divided equally into
the two heads namely SGST and CGST.
2. INTER-STATE SUPPLY
Under GST, supply of goods or services from one state to another would be called as
interstate supply. The GST Act defines interstate supply as when the location of the
supplier and the place of supply for the customer are in:
• Two different States; or
* Two different Union territories; or
* State and a Union territory.

Govindaraj G
Lecturer of Commerce & management
Goods And Services Tax 5th Sem BBA

B) BASED ON COMBINATION
1. COMPOSITE SUPPLY: (2 Marks)
As per Section 2(30) of the Central Goods and Services Tax (CGST) Act, 2017, the term
("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.
Example:
1. Goods with insurance.
2. Laptop with charger.
3. Computer along with repair services.
4. Health care services along with medicaments.
5. 5 star hotel with breakfast
On charging of GST principal supply GST will be considered. Example: 5 star hotel GST
rate is 18% and breakfast GST rate is 12%, principal supply is hotel GST rate to be
considered has 18%.
PRINCIPAL SUPPLY (2 Marks)

As per Section 2(90) of the Central Goods and Services Tax (CGST) Act, 2017, the term "principal supply"
means the supply of goods or services, which constitutes the predominant element of a composite supply
to which any other supply forming part of that composite supply is ancillary.

2. MIXED SUPPLY: (2 Marks)

As per Section 2(74) of the Central Goods and Services Tax (CGST) Act, 2017, the term
("mixed supply" means two or more individual supplies of goods or services or any
combination thereof, made in conjunction with each other by a taxable person for a single
price, where such supply does not constitute a composite supply.

C) BASED ON RECIPIENT
1. INWARD SUPPLY
Inward supply means receipt of goods or services or both whether by purchase, acquisition
or any other means with or without consideration.

Govindaraj G
Lecturer of Commerce & management
Goods And Services Tax 5th Sem BBA

2. OUTWARD SUPPLY
As per Section 2(83) of the Central Goods and Services Tax (CGST) Act, 2017, the term
outward supply" in relation to a taxable person, means supply of goods or services or both,
whether by sale, transfer, barter, exchange, license, rental, lease or disposal or any other
mode, made or agreed to be made by such person in the course or furtherance of business.
D) BASED ON TAX TREATMENT
1. NON-TAXABLE SUPPLY OF GOODS AND SERVICES
Non-taxable supply is the sale of any goods or services which attracts nil rate of tax and is
similar to exempt supply.

2. TAXABLE SUPPLY OF GOODS AND SERVICES

List of Taxable Goods
Tax Products
Rates
Milk, Kajal, Eggs, Educational Services, Curd, Lassi, Health Services, Children’s Drawing &
0% Colouring Books, Unpacked Foodgrains, Unbranded Atta/Maida, Unpacked Paneer, Gur,
Besan, Unbranded Natural Honey, Fresh Vegetables, Salt, Prasad, Palmyra Jaggery, Phool Bhari
Jhadoo, etc
Sugar, Packed Paneer, Tea, Coal, Edible Oils, Raisin, Domestic LPG, Roasted Coffee Beans, PDS
Kerosene, Skimmed Milk Powder, Cashew Nuts, Footwear (< Rs.500), Milk Food for Babies,
5% Apparels (< Rs.1000), Fabric, Coir Mats, Matting & Floor Covering Spices, Agarbatti,
Mishti/Mithai (Indian Sweets),, Life-saving drugs, Coffee, etc (except instant)
Butter, Computers, Ghee, Processed food, Almonds, Mobiles, Fruit Juice, Preparations of
12% Vegetables, Fruits, Nuts or other parts of Plants, including Pickle Murabba, Chutney, Jam, Jelly,
Packed Coconut Water, Umbrella, etc
Hair Oil, Capital goods, Toothpaste, Industrial Intermediaries, Soap, Ice-cream, Pasta,
18% Toiletries, Corn, Flakes, Computers, Soups,
Printers, etc
Small cars (+1% or 3% cess), High-end motorcycles (+15% cess), Consumer durables such as AC
28% and fridge, Beedis are NOT included here, Luxury & sin items like BMWs, cigarettes
and aerated drinks (+15% cess), etc

3. EXEMPT SUPPLY: (2 Marks)

As per Section 2(47) of the Central Goods and Services Tax (CGST) Act, 2017, the term
("exempt supply'" means supply of any goods or services or both which attracts rate of tax

Govindaraj G
Lecturer of Commerce & management
Goods And Services Tax 5th Sem BBA

or which may be wholly exempt from tax under section 11 or under section 6 of the
Integrated Goods and Services Tax Act and Includes non- taxable supply.
Exempt supplies comprise the following types of supplies:
a) Supplies taxable at a 'NIL' rate of tax.
b) Supplies that are wholly or partially exempted from CGST or IGST, by way of a
notification.
4. ZERO RATED SUPPLY UNDER GST:
Zero Rated Supply in IGST is being introduced through Chapter VIII. Zero Rated V
Supplies refers to items that are taxable under GST but the Rate of Tax is Nil The concepts
of Zero Rated Supply are covered under Section 16 of the IGST Act.

Govindaraj G
Lecturer of Commerce & management