3

CHARGE OF GST

Definitions Levy & Collection of GST & IGST [Sec 9 of CGST act & Sec 5 of IGST
Act]
Exempt Supply
Supply which attracts NIL rate of tax or which may be wholly exempt from tax 1. Section 9(1): Levy of CGST on Intra-State Supply on the value determined
& includes non-taxable supply u/s 15 [Max@ 20%]
Reverse charge
The liability to pay tax is on ‘recipient’ of supply of G/&S instead of supplier 2. Section 9(2): No Levy of GST on ‘petroleum products’ till recommended
of such Goods and Services
by GST council
India
• Territory of India & its territorial waters (TWI);
• seabed & sub-soil underlying such waters, 3. Section 9(3): Power of Government (on recommendation of GST council)
• Continental shelf, to specify category of Supply on which RCM shall apply
• Exclusive economic zone or any other maritime zone
• Air space above its territory & TWI
4. Section 9(4): Tax under RCM is payable on Notified category of Inward
Extent & Commencement of GST Law
Supplies of G/&S received from any unregistered supplier by Notified
CGST Act: It extends to whole of India including J&K. class of registered persons Q 25
SGST Act: SGST Act of a State/UT with State Legislature
extends to whole of that State/UT
IGST Act: It extends to the whole of India including J&K. 5. Section 9(5): PAYMENT OF GST BY ELECTRONIC COMMERCE
UTGST Act It extends to All UTs without state legislature. OPERATOR (ECO): Govt to specify certain category of services where
ECO would be required to pay GST
UTs without state legislature are: Andaman & Nicobar, Dadra & Nagar Haveli and
Daman & Diu; Lakshadweep; Chandigarh, Ladakh Situation Person liable to pay tax
UTs with state legislature are: Delhi, J&K, Puducherry If ECO does not have a physical Person representing such ECO for any
presence in TT purpose in TT
A hotel provided accommodation in Himachal Pradesh, through ECO Makemytrip.
com. Hotel is not liable to get registered as per the provisions of Section 22 (1) If ECO does not have a physical Person appointed by ECO in TT
of the CGST Act. Who is the person liable to pay GST in this case? Will your presence in TT & also he does not
answer be different if ECO Makemytrip.com does not have a physical presence have a representative
in India?

CHARGE OF GST 18
 Issues clarified on
Notified Services are: Q 24

1. ECOs not required to collect TCS

Notified ECOs are no longer required to collect TCS and file GSTR-8 on
1. Transportation of Passengers by a radio-taxi, motorcab, maxicab & Motor which it pays tax u/s 9(5)
cycle.
2. ECOs are not required to take a separate registration for paying tax u/s
Amendment
9(5)
Services notified u/s 9(5): Tax shall be paid by ECO if supplied through such
3. Revenue from supply made by a restaurant through ECO – shall be
ECO [N/n16/2023]
included in his turnover while computing his aggregate turnover.

Any Motor vehicle: 4. Not inward supplies for ECOs

If service is supplied through ECO, then ECO is liable to pay tax, whether Even though ECOs are paying GST on such supply – such supply is not an
supplier is liable to registered or not. inward supply for them

In case of Omnibus: 5. Cannot Utilize the ITC

 If Supplier is Other than Company: ECO is liable to pay tax. ECOs are required to pay the GST in CASH – it cannot utilize their ITC
 If Supplier is Company: Company is liable to pay tax
6. Supplier providing supply through ECOs which are not NOTIFIED u/s 9(5)
Such suppliers to pay the GST and NOT the ECOs
2. Hotel Business (If hotel owner is Unregistered).
3. House-Keeping Services (If service provider is Unregistered). 7. Invoice w.r.t. restaurant service supplied through ECOs u/s 9(5) will be
4. Supply of restaurant services other than restaurants located at specified issued by ECOs
premises (hotels providing accommodation where declared tariff per unit
per day is > 7500) 8. Billing of Restaurant Service and other goods in the same order
ECO is responsible only for a billing of a Restaurant serviceSupplier to
issue a separate bill for the other goods / services

CHARGE OF GST 19
 Reverse Charge Mechanism SERVICES NOTIFIED UNDER RCM

1. Generally - Supplier is liable to pay GST Nature of Service Supplier (BY) Recipient [Person
2. Under RCM, liability to pay GST is on recipient of Goods / Services liable to pay GST]
3. However, underlying principle of an indirect tax is that burden of such tax 1. Goods Transport Agency GTA paying 5% (a) Factory
has to be ultimately passed on to the recipient (GTA) by Road CGST (Factories Act,
4. GST being an indirect tax, this principle holds good for GST • who has not paid CGST 1948);
5. Therefore, under RCM, only the compliance requirements, [i.e. to obtain @12% (b) Society
registration under GST, deposit the tax with the Government, filing • who has not availed ITC (Societies
returns, etc.] have been shifted from supplier to recipient Registration
Not
GTA Specified
Exempt Act)
(c) Co-operative
RCM society
Specified person
(d) Any body
corporate
FCM RCM
Goods Services excluding reg
co-op society
12% 5% 5% (e) P’ship Firm
(including AOP/
1. Cashew nuts [not shelled/ ITC ITC ITC
BOI)
peeled] (f) Casual Taxable
Person in TT.
2. Bidi wrapper leaves &
Q 9 (g) Registered
tobacco leaves Person under
3. Supply of Lottery; Silk yarn, GST
IMPORTANT - RCM shall not apply if
used vehicles
services are provided by GTA to CG/
4. Seized & confiscated goods SG undertakings/ Local Authorities/
5. Old & used goods Govt agencies which has taken
registration ONLY FOR deducting tax
6. Waste & scrap
at source (TDS) and not for making
7. Raw cotton etc taxable outward supply

CHARGE OF GST 20
2. Legal Services Individual Business Entity 5.AA Service by way of renting Any person Any Registered
Advocate located in TT. of residential dwelling to a person.
Q 14 (including senior Registered person.
advocate or firm
of advocates) 5.B Services of “Transfer of Any person Promoter Builder.
development rights or
3. Services by Arbitral Tribunal Arbitral Tribunal Business Entity
located in TT. Floor Space Index (FSI) for
Q 1
construction of a project by a
4. Sponsorship Any Person Body Corporate or promoter
Q 1 29 P’ship Firm in TT. 5.C Long term lease of land ( ≥ 30 Any person Promoter
years) against consideration
5. Any Services supplied by CG, SG, UT or LA Any Business Entity in the form of upfront amount
Government to a business entity. located in taxable (called as premium, salami,
territory
Exceptions: (i.e. Forward charge is cost, price, development
applicable) charges) &/or periodic rent
1) Renting of immovable property, for construction of a project
and by a promoter.
2) Services specified below- 6. Services supplied by director Director Company or Body
a) Services by the to company or body corporate Corporate
in his private or personal
Department of Posts and
capacity such as renting of
the Ministry of Railways immovable property are not
(Indian Railways) taxable under RCM.But if
b) Services in relation to supplied by director as or
an aircraft or a vessel, in capacity of director, it is
inside or outside the taxable under RCM.
precincts of a port/ an Q 15 26
airport
c) Transport of goods or 7. Services supplied by Insurance Insurance Agent Insurance Company
passengers. Agent located in TT.
5A. Services by way of Renting of CG [excluding Any person 8. Services supplied by Recovery Recovery agent Banking company or
Immovable Property the Ministry of Registered under Agent financial institution
Railways (Indian the CGST Act. or NBFC located in
Q 1 5 Q 7 27
Railways)], TT.
SG, UT or LA

CHARGE OF GST 21
9. Transfer/permitting use or Author, Music Publisher, Music 12. Services provided by Business Business Banking company,
enjoyment of copyright composer, company, Producer facilitator to a banking facilitator located in TT.
relating to original literary, Photographer, etc. located in company
dramatic, musical or artistic Artist etc. taxable territory. 13. Services provided by Agent of Agent of Business Business
works Business Correspondent Correspondent correspondent,
9A. Supplier of services by an Author Publisher located in located in TT
author by way of transfer taxable territory 14. Security Services (Services Any person other Any Registered
or permitting the use or -Supply of security personnel) than BC Person, located in
enjoyment of a copyright TT
covered under clause (a)of
sub-section (1) of section 13 Q 30
of the Copyright Act, 1957
relating to original literary
works to a publisher Transfer of TDR / FSI / Long Term Lease
* Author can opt to pay tax as per
FCM If full following Conditions:
1) Take Registration under CGST 5 Cr
Act
2) File declaration with Taxability of premium
Jurisdictional CGST/SGST
Commissioner that he wants to
opt for FCM Exempt
3) This option shall be exercised
for 1 yr. from date of exercising To the extent of the % of the flats are by the builder
such option.
4) Invoice to be issued by him to
publisher Before completion of construction (before cc is
Q 8 9 received)

10. Supply of Services by Members of RBI Before CC is received

Members of Overseeing Overseeing
Committee Committee
constituted by
RBI All flats are sold 60% of flats are sold
11. Services supplied by Individual Individual Direct Banking company or
Direct Selling Agents (DSAs) Selling Agents NBFC in TT.
Q 28 other than BC,
P’ship firm or LLP Proportionate amount
Premium is exempt
is exempt

CHARGE OF GST 22
 Any person Any BODY
Q 31 (Other than body CORPORATE
15. Renting of motor
vehicles designed to corporate who located in TT
carry passengers (NOT supplies service to
PASSENGER TRANSPORT a body corporate
SERVICES) here the cost and doesn’t issue
of fuel is included in the an invoice charging
consideration charged CGST @ 6% to
from the service recipient, service recipient.)
provided to a body
corporate
16. Services of lending of Lender i.e. a person Borrower i.e. a
securities under Securities who deposits the person who borrows
Lending Scheme 1997 of securities registered the securities
Securities and Exchange in his name or under the scheme ABC Ltd. is GST registered with aggregate turnover of Rs. 4 crores. It has
Board of India (SEBI) in the name of through an approved
received the following services from different persons during January 2019.
any other person intermediary of
duly authorised SEBI. Discuss the applicability of reverse charge to the above transactions.
on his behalf (a) Service by Department of Posts by way of speed post Qs
with an approved (b) For transportation of goods, ABC Ltd. paid Rs. 50,000 to Indian Railways.
intermediary for the (c) ABC Ltd. has availed Manpower services from XYZ Ltd. Will your answer
purpose of lending differ if service provider is Mr. A.
under the scheme of (d) Renting of immovable property service provided by CG to ABC Ltd.
SEBI.
(registered business entity).
17. Any service supplied by any Any person located Any person located
person who is located in in non- taxable in the taxable
a non- taxable territory territory territory other (a) Nature of service is speed post provided by Department of Posts. RCM
to any person other than Provider than non-taxable not applicable to these services. Supplier has to pay GST as forward
non- taxable online recipient online recipient charge.
Non taxable (b) Nature of service is transportation of goods provided by Indian Railways.
territory RCM not applicable to these services. Supplier has to pay GST as forward
charge. Ans
Recipient Taxable territory Taxable territory Recipient (c) XYZ Ltd. is liable to pay GST. Even if it is provided by Mr. A, treatment
remain same i.e. service provide Mr. A, is liable to pay GST.
NON Taxable online Taxable online (d) GST on services supplied by CG/SG/UT/LA by way of renting of immovable
recipient recipient property to a registered person is payable under RCM. Therefore, GST is
payable under RCM by the recipient – registered business entity.
FCM RCM

CHARGE OF GST 23
 Composition Scheme

Q 15
Q 4 16

Remuneration
1. The composition levy is an alternative method of levy of tax designed for
to directors
small taxpayers whose turnover is up to prescribed limit

T/O Limit in prec FY

TDS deducted under
TDS deducted u/s 192 other than Sec
192(Say Sec 194J) <1.5 Crores < 75 Lakhs

Other than SCS SCS

Employer-Employee No E’er-E’ee
relationship relationship Special Category States

Nagaland Uttarakhand Sikkim Tripura

NO GST GST Arunachal Pradesh Mizoram Manipur Meghalaya

Rates under GST 2. OBJECTIVE - The objective of composition scheme is to bring simplicity
1. Maximum rate (IGST) – 40% and to reduce the compliance cost for the small taxpayers
2. Maximum SGST / CGST – 20%
3. The composition scheme is available to the suppliers of goods and restaurant
- Classification of the goods / services is the first step before service
identifying the rate of GST
- 6 rates have been notified for services, viz., 1.5%, 5%, 7.5%, 12%, 18%
and 28%
- For certain specified services, NIL rate of tax has been notified
- Services not covered under any specific heading are taxed at the rate
of 18% (CGST @ 9% and SGST @ 9% or IGST @ 18%)
- Gambling, admission to amusement facilities like casinos, race club,
sporting event – 28%

CHARGE OF GST 24
 Limit for providing other service
Aggregate T/O – PREVIOUS YEAR – For eligibility purpose
As per second proviso to section 10(1), composition suppliers are permitted to
supply other services upto Q 22

- 10% of turnover in the state or UT in the preceding FY or Taxable Exempt Export Inter Interest TOTAL
- Rs.5,00,000 Supply supply or of state on
HIGHER NIL rated goods / supply - Deposit
supply services - Advance
Eg. Mr Mahajan is engaged in supply of goods. His aggregate turnover in preceding - Loan
FY is Rs. 60 lakh. Since his aggregate turnover in the preceding FY does not Mnfg      This
exceed Rs. 1.5 crore, he is eligible for composition scheme in current FY Supplier or amount
Dealer      should be
Rates of taxes < 1.5 Cr /
Restaurant 75L
Dealer / Restaurant services      (Of ALL
Manufacturer service
Trader offices
together
1% 1% 5% Sec 10(2A)
     regd
under 1
Aggregate Taxable supply Aggregate T/O
T/O of CY of G/S of CY of CY PAN)

Aggregate T/O – CURRENT YEAR – For payment of TAXES

Taxable Exempt Export Inter Interest TOTAL

Supply supply or of state on
NIL rated goods / supply - Deposit
supply services - Advance
- Loan
Mnfg      XX * 1%
Supplier or XX * 1%
    
Dealer
Restaurant XX * 5%
    
services
Sec 10(2A) XX * 6%
    

CHARGE OF GST 25
 through an ecommerce portal, unless such portal is owned by the same
person
Payment of Filing of
TAXES GSTR-4
RETURN (iv) Restriction on manufacture of notified goods (no restriction on trader X):
The person opting for the scheme should not be a manufacturer of certain
goods as are notified in this regard. However, there is no restriction in case
Quarterly Annually the person is engaged in trading of such goods. Q 3 23
Notified goods - Ice cream and other edible ice, whether or not containing
CMP-08 GSTR -4 cocoa, Pan Masala, All goods i.e. Tobacco and manufactured tobacco
substitutes, Aerated water, Fly ash bricks or fly ash aggregate with 90%
Section 10(2A) Presumptive Scheme For Service Provider or more fly ash content; Fly ash blocks, Bricks of fossil meals or similar
siliceous earths, Building bricks, Earthen or roofing tiles
Question 13 16 19 20

(v) Would be applicable for all transactions under the same PAN: Composition
For other service Agg TO in the scheme would become applicable for all the business verticals having separate
providers prec FY 6% registrations within the State and all other registrations outside the State
which are held by the person with same PAN. Q 4 23
(vi) Shall not collect tax: Taxable person opting to pay tax under the composition
< 50 Lakhs scheme is prohibited from collecting tax on the outward supplies

(vii) Not entitled to input tax credit: Taxable person opting to pay tax under the
Conditions for Sec 10(1), 10(2), 10(2A) composition scheme will not be eligible to claim any input tax credits

(vii) Such supplier shall mention the words “composition taxable person not
Question 18 eligible to collect tax on supplies” at the top of the bill of supply. (not
(i) Restricted from making supply of goods which are not liable to GST: Certain allowed to issue tax invoice)
goods are not liable to GST, e.g. petroleum, alcohol for human consumption,
etc. – a person opting for composition scheme shall not be entitled to make (ix) NRTP and CTP cannot opt for the composition scheme
any supply of non-GST goods.
Amendment

(ii) Restricted from effecting inter-State outward supplies: The taxable person If Composition dealer supplies goods through ECO who is liable to collect TCS,
should not affect any inter-State outward supplies. This means that even its Composition levy shall not be withdrawn, Now restriction is only on supply of
stock transfers to branches outside the State would not be permitted. Services.
However, in so far as it relates to inter-State inward procurements / receipts, However Following Conditions Shall Be Fulfilled:
there is no restriction. 1. ECO shall not allow inter state supply
Question 3 11 16
2. ECO shall Collect and Pay TCS
(iii) Restricted from making supplies through an e-commerce operator: A person 3. ECO shall furnish the details in GSTR-8
opting for composition scheme is not allowed to affect any supply of goods 4. ECO shall make necessary checks & validations on their systems/platforms.

CHARGE OF GST 26
 PAN Who cannot opt for composition scheme?

Question 3

1. Ice cream and other edible ice, whether or not containing cocoa
2. Pan Masala
3. All goods i.e. Tobacco and manufactured tobacco substitutes
4. Aerated water
Mumbai Rajasthan Bihar 5. Fly ash bricks or fly ash content, Fly ash blocks
6. Bricks of fossil meals or similar siliceous earths
7. Building bricks
8. Earthen or roofing tiles
Registered under same PAN
Other points

1. Where any registered person who has availed of ITC opts to pay tax under
I want to opt for this notification, he shall pay an amount, by way of debit in the electronic
Possible? NO
composition scheme credit ledger or electronic cash ledger. Said amount shall be equivalent to
only for Mumbai Office the ITC in respect of inputs held in stock and inputs contained in semi-
finished or finished goods held in stock and on capital goods as if the
Opting for Composition scheme is PAN BASED and NOT location based supply made under this notification attracts the provisions of section
18(4) of the CGST Act and the rules made thereunder.
2. Tax on inward supplies on which he is liable to pay tax under section
9(3)/9(4) (reverse charge) at the Normal applicable rates
Question 10 Other points
Consider Prev. Year’s TO of
all offices together Apply for CY for ALL Person providing exempted service is eligible for composition scheme
OFFICES
(< 1.5Cr) (NOT Individual) A person supplies restaurant service and also supplies any exempt services
including services by way of extending deposits, loans or advances in so far as
the consideration is represented by way of interest or discount, the said person
shall not be ineligible for the composition scheme
Further, while computing aggregate turnover of such person in order to
determine his eligibility for composition scheme, Value of Supply of any exempt
services including services 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

If any one office breaches any one of the conditions – all

Memory technique to be discussed in the lecture the offices would become INELIGIBLE

CHARGE OF GST 27
 Rule 3

Registration - A person applying for registration may give option for composition scheme in part B of REG-01. Such intimation shall be considered only after the grant
of registration to the applicant and his option to pay tax under composition levy shall be effective from the date from which registration is effective

Rule 4

WHICH INTIMATION AND EFFECTIVE FROM WHICH DATE?

1. INTIMATION - A registered person who opts to pay tax under composition levy scheme shall electronically file an intimation in Form CMP-02 form on the GST
Common Portal, prior to the commencement of the FY for which said option is exercised.
2. EFFECTIVE FROM WHICH DATE? Option to pay tax under section 10 shall be effective from the beginning of the next FY but such person shall also furnish
statement in ITC-03 for reversal of tax credit within a period of 60 days from the date of commencement of composition scheme

Rule 5

NRTP and CTP - Such person should be neither casual taxable person nor non - resident taxable person

Rule 6
WITHDRAWAL OF SCHEME Question 2 12 23

If turnover exceeds Rs. 1.5Cr he will be shifted to normal scheme with immediate effect and he will give an intimation in CMP-04 within 7 days of exceeding the limit.

Any person who is in the composition scheme may opt out of the scheme at any time and shall file an application in CMP-04 and he will get shifted to normal scheme
with immediate effect. He shall be required to submit ITC-01 for availing ITC within 30 days from the date of withdrawal. Such withdrawal shall be applicable to all the
places in all the states/Uts

Denial of option to pay tax under the composition scheme by tax authorities.
Where the proper officer has reasons to believe that the registered person was not eligible to pay tax under composition scheme or has contravened the provisions
of the CGST Act, he may issue a show cause notice (SCN) to such person

CHARGE OF GST 28