THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA

GST & INDIRECT TAXES COMMITTEE

Certificate Course on
Goods & Services Tax (GST)
CA Sushil K Goyal
 2

What basis
the GST
is levied ???

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 Article 246A - Inserted 3

▪ Article 246A(1):
Notwithstanding anything contained in articles
246 and 254, Parliament and the State [subject
to clause (2)], have power to make laws with
respect to goods and services tax imposed by the
Union or by such State.
▪ Article 246A(2):
Parliament has exclusive power to make laws
with respect to supply of goods/ services in the
course of inter-State trade or commerce.
 4
GST Acts

Parliament Assembly

CGST Act SGST Act

IGST Act

UTGST Act
Comp Cess Act 23 July 2021

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 Power to Levy Tax 5

Article 265 “No Tax to be imposed or collected

without the Authority of Law”

1 There must be a Law.

2 The Law must Authorise the Tax

3 Tax must be levied and collected by Law
 6

Agenda
Section 7 Scope of Supply

Section 8 Mixed/Composite

Section 9 Levy & Collection

Section 10 Composition levy

23 July 2021
 27

Levy

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 8
There shall levied a tax

called the central goods and services tax

Levy Sec 9(1)
on all intra-State supplies

supplies of goods or services

exception the supply of alcoholic liquor for

human consumption,

on the value determined under section 15

at such rates, not exceeding 20%

Shall be paid by the taxable person.

23 July 2021

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 9
There shall be tax on the supply of

petroleum crude
Levy Sec 9(2)
high speed diesel

motor spirit (petrol),

natural gas and

aviation turbine fuel

date as may be notified by the Government

on the recommendations of the Council.

23 July 2021

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 10

on the recommendations of the Council,

Levy Sec 9(3)
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 and

all the provisions of this Act shall apply to

such recipient

23 July 2021

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 11
on the recommendations of the Council,

by notification, specify categories of

Levy Sec 9(4)
specify a class of registered persons,

supply of specified categories of goods or

services or both

received from an unregistered supplier

the tax on which shall be paid on reverse

charge basis

by the recipient of and

all the provisions of this Act shall apply to

such recipient
23 July 2021

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 12
on the recommendations of the Council,

Levy Sec 9(5) by notification, specify categories of

service by the electronic commerce operator ,

intra-State supplies of which shall be

shall be paid by the electronic commerce

operator

if such services are supplied through it

all the provisions of this Act shall apply to

such recipient
23 July 2021

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E commerce Operator 13

Neither a supplier nor receiver of Service.

Only notified categories of services

if such services are supplied through it.

Deemed to be supplier of such services

 E commerce Operator 14

services by way of
providing
accommodation in
services by way of
hotels, inns, guest services by way of
transportation of
houses, clubs, house-keeping, such as
passengers by a radio-
campsites or other plumbing, carpentering
taxi, motorcab,
commercial places etc. except by
maxicab and motor
meant for residential registered persons
cycle
or lodging purposes
except by registered
persons
 Sec 9 CGST vs Sec 5 IGST

Intra State CGST/SGST Except

• Inter • IGST • Import

State of Goods

23 July 2021
 2
16

Supply

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 Supply

Central Excise Service Tax VAT

(On Manufacturing) (On provision of Service) ( On sale of Goods)
 Supply

Inward Central
Service
VATExcise
Tax Outward
Supply (On
(On
( provision
OnManufacturing)
sale ofof
Goods)
Service) Supply

Receiving Giving
Supply
 Sec 7(1)(a) 19

Supply
Sale
made or agreed to be made
Transfer

Barter for a consideration

Includes

Exchange
by a person
Licence

Rental
in the course or
Lease

Disposal furtherance of business

 Consideration 20
Section 2(31) :
“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 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:
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

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 Consideration 21

Definition of “consideration” in relation to

the supply includes

Buyer

Grant Government
Supplier Excluded

Any
other
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 Consideration 22

Advances are liable for payment of tax in case

of Services. Goods are excluded from taxation
in case of advances.
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

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 Related Person 23
Explanation.—For the purposes of this Act,––
(a)persons shall be deemed to be “related persons” if––
(i) such persons are officers or directors of one another’s
businesses;
(ii) such persons are legally recognized partners in business;
(iii) such persons are employer and employee;
(iv) any person directly or indirectly owns, controls or holds twenty-
five per cent. or more of the outstanding voting stock or shares
of both of them;
(v) one of them directly or indirectly controls the other;
(vi) both of them are directly or indirectly controlled by a third
person;
(vii) together they directly or indirectly control a third person; or
(viii)they are members of the same family;
(b) the term “person” also includes legal persons;
(c) persons who are associated in the business of one another in that one
is the sole agent or sole distributor or sole concessionaire, howsoever
described, of the other, shall be deemed to be related.
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 Related Person 24

Officers / Directors
Partners in Employer –
of one another’s
business employee
business

Owns/controls / Both are directly /

One directly /
holds 25% of indirectly
indirectly controls
shares of both the controlled by a
the other
persons third person
Together, they Sole
directly / indirectly Members of the agent/distributor
control a third same family /concessionaire of
person the other

The term “Person” also includes Legal Persons

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 Family 25
Spouse Person

Father
Mother

Grand Grand
Brother Sister
Mother Father

Son Daughter

“family” means,–
(i) the spouse and children of the person, and
(ii) the parents, grand-parents, brothers and sisters of the person if they
are wholly or mainly dependent on the said person;
 Business 26

Business includes:-
a) any
trade commerce manufacture profession
vocation adventure wager any other similar activity
whether or not it is for a pecuniary benefit;

b) any activity or transaction in connection with or incidental or

ancillary to sub-clause (a);

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
 Business 27

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 totalisator or a
license to book maker or activities of a licensed book maker in
such club; and
 Business 28

h) any activity or transaction undertaken by the Central

Government, a State Government or any local authority in
which they are engaged as public authorities;
Income Tax Act, 1961
"business” includes any trade, commerce or manufacture or any
adventure or concern in the nature of trade, commerce or
manufacture;
 Sec 7(1)(aa) 29
the activities or transactions, by a person, other than an
individual, to its members or constituents or vice versa,
for cash, deferred payment or other valuable
consideration.
notwithstanding anything
Notwithstanding anything contained in any judgment,
contained in any other law decree or order of any Court,
for the time being in force tribunal or authority

the person and its the supply of activities or

members or constituents transactions inter se shall be
shall be deemed to be two deemed to take place from
separate persons one such person to another

Inserted clause by the Finance Act, 2021, and shall be deemed to

have been inserted with effect from w.e.f. 01-07-2017
Sec 7(1)(b) 30

import of for a
services consideration

whether or
furtherance
not in the
of business;
course or
 Sec 7(1)(c) 31

the activities specified in Schedule I, made or agreed to be

made without a consideration

Permanent transfer or Supply between related Supply of goods by a

disposal of business persons / distinct principal to his agent
assets where input tax persons, when made in where the agent
credit has been availed the course or undertakes to supply
on such assets. furtherance of business such goods on behalf of
the principal; or

Supply of goods by an Import of services from a

agent to his principal related person or from his
where the agent establishments outside
undertakes to receive India, in the course or
such goods on behalf of furtherance of business.
the principal.
 Sec 7(1A) 32

Where certain activities or transactions constitute a

supply in accordance with the provisions of sub-section
(1), they shall be treated either as supply of goods or
supply of services as referred to in Schedule II

❑ It includes mainly the disputed service and declared

as service
❑ Composite supply such as work contract and Supply
of food items are considered as service
 Sec 7(2) 33

Notwithstanding anything contained in sub-section (1),—

(a) activities or transactions specified in Schedule III; or
(b) such activities or transactions undertaken by the
Central Government, a State Government or any
local authority in which they are engaged as public
authorities, as may be notified by the Government
on the recommendations of the Council,
shall be treated neither as a supply of goods nor a
supply of services.
 Sec 7(2) 34
Schedule III
1. Services by an employee to the employer in the course of or
in relation to his employment.
2. Services by any court or Tribunal established under any law
for the time being in force.
3. (a) The functions performed by the Members of Parliament,
members of State Legislature, Members of Panchayats,
Members of Municipalities and Members of other local
authorities;
(b) The duties performed by any person who holds any post
in pursuance of the provisions of the Constitution in
that capacity; or
 Sec 7(2) 35
Schedule III
(c)The duties performed by any person as a Chairperson or a
Member or a Director in a body established by the Central
Government or a State Government or local authority and
who is not deemed as an employee before the
commencement of this clause.
4. Services of funeral, burial, crematorium or mortuary
including transportation of the deceased.
5. Sale of land and, subject to clause (b) of paragraph 5 of
Schedule II, sale of building.
6. Actionable claims, other than lottery, betting and gambling.
 Sec 7(2) 36
Schedule III
Inserted by the CGST (Amendment) Act, 2018, w.e.f. 1-2-2019
7. Supply of goods from a place in the non-taxable territory to
another place in the non-taxable territory without such
goods entering into India.
8. (a) Supply of warehoused goods to any person before
clearance for home consumption;
(b) Supply of goods by the consignee to any other person, by
endorsement of documents of title to the goods, after
the goods have been dispatched from the port of origin
located outside India but before clearance for home
consumption.
 Sec 7(3) 37

(3) Subject to the provisions of sub-sections (1), (1A) and

(2), the Government may, on the recommendations of
the Council, specify, by notification, the transactions
that are to be treated as—
(a) a supply of goods and not as a supply of services;
or
(b) a supply of services and not as a supply of goods.
 38

Issues !!!

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Thank You
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9830088400
CA Sushil K Goyal
 THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
GST & INDIRECT TAXES COMMITTEE
Certificate Course on
Goods & Services Tax (GST)
CA Sushil K Goyal
 2

Agenda
Section 7 Scope of Supply

Section 8 Mixed/Composite

Section 9 Levy & Collection

Section 10 Composition levy

23 July 2021
 23

Composite
or
Mixed

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 4
composite supply

The tax liability on a composite or a

mixed supply shall be determined in the
following manner, namely:—

(a) a composite supply comprising two

or more supplies, one of which is a
principal supply, shall be treated as a
supply of such principal supply; and

23 July 2021

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 5
composite supply

“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;

23 July 2021

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 6
composite supply

Illustration. -- Where goods are packed

and transported with insurance, the
supply of goods, packing materials,
transport and insurance is a composite
supply and supply of goods is a principal
supply;

23 July 2021

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 7
principal supply

“principal supply” means the supply of

goods or services which constitutes
the predominant element of a
composite supply and to which any
other supply forming part of that
composite supply is ancillary;

23 July 2021

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 8
mixed supply

The tax liability on a composite or a

mixed supply shall be determined in the
following manner, namely:—

(b) a mixed supply comprising two or

more supplies shall be treated as a
supply of that particular supply which
attracts the highest rate of tax.

23 July 2021

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 9
mixed supply

“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.

23 July 2021

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 10
mixed supply

Illustration.- A supply of a package consisting

of canned foods, sweets, chocolates, cakes,
dry fruits, aerated drinks and fruit juices
when supplied for a single price is a mixed
supply. Each of these items can be supplied
separately and is not dependent on any other.
It shall not be a mixed supply if these items
are supplied separately;

23 July 2021

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 11
Illustration

23 July 2021

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 12
Illustration

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 13
Illustration

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 14
Illustration

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 15
Illustration

23 July 2021

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 2
16

Composition
Levy

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 Composition Supply

Section 10. – Composition levy

(1) Notwithstanding anything to the contrary contained in this
Act but subject to the provisions of sub-sections (3) and (4)
of section 9, a registered person, whose aggregate turnover
in the preceding financial year did not exceed fifty lakh
rupees, may opt to pay, in lieu of the tax payable by him
under sub-section (1) of section 9, an amount of tax
calculated at such rate as may be prescribed, but not
exceeding,

© CA. (Dr.) Gaurav Gupta 17

 Tax Payable

Supply of Other
Manufacturer Food Suppliers
½% of
2 ½% of ½% of
State/UT
State/UT State/UT
TOTAL
Turnover Turnover
Turnover
 Turnover 19

▪ Seventy-Five Lakh
• Arunachal Pradesh, • Nagaland,
• Manipur, • Sikkim,
• Meghalaya, • Tripura,
• Mizoram, • Uttarakhand
▪ Rest of the country One Crore Fifty Lakh

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 Conditions 20

he is not engaged in making any

he is not engaged in the supply of supply of goods or services which
services; are not leviable to tax under this
Act;

he is not engaged in making any

supply of goods or services
he is not engaged in making any
through an electronic commerce
inter-State outward supplies of
operator who is required to
goods or services;
collect tax at source under
section 52;

he is not a manufacturer of such

goods as may be notified by the he is neither a casual taxable
Government on the person nor a non-resident taxable
recommendations of the Council; person:
and
 Conditions 21

No person can have composition and normal registration together

in different states

Provided that where more than one registered persons are

having the same Permanent Account Number [issued under
the Income-tax Act, 1961 (43 of 1961)], the registered person
shall not be eligible to opt for the scheme under sub-section
(1) unless all such registered persons opt to pay tax under that
sub-section
 Conditions and restrictions 22

❑ the goods held in stock by him on the appointed day have not been
purchased in the course of inter-State trade or commerce or imported from
a place outside India or received from his branch situated outside the State
or from his agent or principal outside the State, where the option is
exercised under sub-rule (1) of rule 3;
❑ the goods held in stock by him have not been purchased from an
unregistered supplier and where purchased, he pays the tax under sub-
section (4) of section 9;
❑ he shall pay tax under sub-section (3) or sub-section (4) of section 9 on
inward supply of goods or services or both;
❑ he shall mention the words "composition taxable person, not eligible to
collect tax on supplies" at the top of the bill of supply issued by him; and
❑ he shall mention the words "composition taxable person" on every notice or
signboard displayed at a prominent place at his principal place of business
and at every additional place or places of business.
 Not Available 23

Description
• Ice cream and other edible ice, whether or not containing cocoa.
• Pan masala.
• Aerated Water
• All goods, i.e. Tobacco and manufactured tobacco substitutes.
 Limit for Service 24

Provided further that a person who opts to pay tax under

clause (a) or clause (b) or clause (c) may supply services
(other than those referred to in clause (b) of paragraph 6 of
Schedule II), of value not exceeding ten per cent of turnover
in a State or Union territory in the preceding financial year
or five lakh rupees, whichever is higher.

Explanation.—For the purposes of second proviso, the value

of exempt supply of services provided by way of extending
deposits, loans or advances in so far as the consideration is
represented by way of interest or discount shall not be
taken into account for determining the value of turnover in
a State or Union territory.
 Service Composition

Section 10. – Composition levy

(2A) Notwithstanding anything to the contrary contained in this
Act, but subject to the provisions of sub-sections (3) and (4)
of section 9, a registered person, not eligible to opt to pay
tax under sub-section (1) and sub-section (2), whose
aggregate turnover in the preceding financial year did not
exceed fifty lakh rupees, may opt to pay, in lieu of the tax
payable by him under sub-section (1) of section 9, an amount
of tax calculated at such rate as may be prescribed, but not
exceeding three per cent of the turnover in State or turnover
in Union territory, if he is not

25
Tax Payable

Supply of
Service
3% of
State/UT
Turnover
 Service Composition 27

engaged in making any

engaged in making any supply of goods or
engaged in making any
supply of goods or services through an
inter-State outward
services which are not electronic commerce
supplies of goods or
leviable to tax under this operator who is required
services;
Act; to collect tax at source
under section 52;

a manufacturer of such
goods or supplier of
such services as may be a casual taxable person
notified by the or a non-resident taxable
Government on the person:
recommendations of the
Council; and
Service Composition 28

Provided that where more than one registered person are

having the same Permanent Account Number issued under
the Income-tax Act, 1961 (43 of 1961), the registered person
shall not be eligible to opt for the scheme under this sub-
section unless all such registered persons opt to pay tax
under this sub-section.
 Relevant Forms 29

Rule Form Name of the Form

3(3) CMP-02 Intimation to pay tax under section
& 10 (composition levy)- (For persons
3(3A) registered under the Act
6(2) CMP-04 Intimation/Application for withdrawal
from composition levy

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 Relevant Forms 30

Rule Form Name of the Form

40 ITC-01 Declaration for claim of input tax
credit under sub-section (1) of
section 18
44 ITC-03 Declaration for intimation of ITC
reversal/payment of tax on
inputs held in stock, inputs
contained in semi-finished and
finished goods held in stock and
capital goods under sub-section
(4) of section 18

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 Relevant Forms 31

Rule Form Name of the Form

62 CMP-08 Statement for payment of self-

assessed tax

62 GSTR-4 Return for composition taxpayer

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 Turnover 32
Turnover in the State vs Turnover of Taxable supplies
• Turnover in State encompasses all kinds of supplies be it
in the nature of taxable, exempt, exports or inter-State.
• On the other hand, turnover of taxable supplies seeks to
exclude all other supplies apart from taxable supplies.
• It may be noteworthy that for the manufacturer and
service providers mentioned above, the composition levy
would be calculated on the total turnover.
• On the other hand, for the traders, the base value on
which the composition levy would be calculated would be
the taxable supplies only.

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 Turnover 33

"turnover in State or turnover in Union territory" shall

not include value of following supplies: -
i. Supplies from the first day of April of a financial year
upto the date when such person becomes liable for
registration under this Act
ii. Exempt supply of services provided by way of
extending deposits, loans or advances in so far as the
consideration is represented by way of interest or
discount

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 Turnover 34

with effect from 1st January 2020, suppliers making:

❑ supplies referred to in clause (b) of paragraph 6 of
Schedule II and
❑ manufacturers, other than manufacturers of such
goods as may be notified by the Government,
❑ would not now be required to pay tax on exempt
supply of services provided by way of extending
deposits, loans or advances in so far as the
consideration is represented by way of interest or
discount.

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 Case Study 35
Particulars Manufacturer Persons engaged in Any Other Supplier
supplies referred to
in clause (b) of
paragraph 6 of
Schedule II
Example Previous Year Previous Year Previous Year
Turnover-55 Lakh Turnover-55 Lakh Turnover-55 Lakh
Taxable Turnover Taxable Turnover - Taxable Turnover
(Goods)-60 Lakh 60 Lakh (Goods)-60 Lakh
Taxable Turnover Taxable Turnover Taxable Turnover
(Services)-3 Lakh (other Services)-3 (Services)-3 Lakh
Interest Income-2 Lakh Interest Income-2

Lakh Interest Income-2 Lakh

Lakh
1st February 2019 1% of Turnover in 5% of Turnover in 1% of Turnover of
to 31st December State State taxable supplies in
2019 State
Amount 0.65 3.25 0.63
1st January 2020 1% of Turnover in 5% of Turnover in 1% of Turnover of
to till date State State taxable supplies in
State
Amount 0.63 3.15 0.63
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 Case Study 36
Particulars Manufacturer Persons engaged in Any Other Supplier
supplies referred to
in clause (b) of
paragraph 6 of
Schedule II
Example Previous Year Previous Year Previous Year
Turnover-55 Lakh Turnover-55 Lakh Turnover-55 Lakh
Taxable Turnover Taxable Turnover - Taxable Turnover
(Goods)-60 Lakh 60 Lakh (Goods)-60 Lakh
Taxable Turnover Taxable Turnover Taxable Turnover
(Services)-3 Lakh (other Services)-3 (Services)-3 Lakh
Interest Income-2 Lakh Interest Income-2
Lakh Interest Income-2 Lakh
Lakh
1st February 2019 1% of Turnover in 5% of Turnover in 1% of Turnover of
to 31st December State State taxable supplies in
2019 State
Amount 0.65 3.25 0.63
1st January 2020 1% of Turnover in 5% of Turnover in 1% of Turnover of
to till date State State taxable supplies in
State
Amount 0.63 3.15 0.63
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 Case Study 37
Particulars Manufacturer Persons engaged in Any Other Supplier
supplies referred to
in clause (b) of
paragraph 6 of
Schedule II
Example Previous Year Previous Year Previous Year
Turnover-55 Lakh Turnover-55 Lakh Turnover-55 Lakh
Taxable Turnover Taxable Turnover - Taxable Turnover
(Goods)-60 Lakh 60 Lakh (Goods)-60 Lakh
Taxable Turnover Taxable Turnover Taxable Turnover
(Services)-3 Lakh (other Services)-3 (Services)-3 Lakh
Interest Income-2 Lakh Interest Income-2
Lakh Interest Income-2 Lakh
Lakh
1st February 2019 1% of Turnover in 5% of Turnover in 1% of Turnover of
to 31st December State State taxable supplies in
2019 State
Amount 0.65 3.25 0.63
1st January 2020 1% of Turnover in 5% of Turnover in 1% of Turnover of
to till date State State taxable supplies in
State
Amount 0.63 3.15 0.63
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 38

Issues !!!

[email protected] 23-Jul-21
Thank You
[email protected]
9830088400
CA Sushil K Goyal