Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
ADMINISTRATION 1-1
COMPOSITION 10-12
REGISTRATION 14-17
INVOICE 28-29
RETURNS 35-35
EXPORTS 36-37
REFUND 39-46
1. Power to grant registration in Bengaluru given to Principal Commissioner of Central Tax in case of
OIDAR
• Overseas supplier of OIDAR Service supplying service to NTOR (Non-taxable online recipient): GST payable by
overseas supplier – RCM not applicable, GST payable by overseas entity
• Simplified registration scheme has been made for such overseas supplier – Sec 14 of IGST Act
.
• Where to apply for registration?: CG notified the Principal Commissioner of Central Tax, Bengaluru
.
and all the officers subordinate to him as the officers empowered to grant registration in such case.
.
This power was granted by the CG through N/N 2/2017 - IT dated 19 June 2017. w.e.f. 22.06.2017
• Detection of Case by Central Tax officer of Audit Commissionerate / Director General of GST
Intelligence (DG-GST I): They shall exercise the powers only to issue SCN. A SCN issued by them shall be
adjudicated by the competent central tax officer of the Executive Commissionerate in whose jurisdiction the
noticee is registered.
o In case there are more than one noticees mentioned in the SCN having their principal places of business
falling in multiple Commissionerate’s, the SCN shall be adjudicated by the competent central tax officer in
whose jurisdiction, the principal place of business of the noticee from whom the highest demand of central
tax and/or integrated tax (including cess) has been made falls.
The above has been prescribed vide Circular no. 31/05/2018-GST dated 9th February 2018.
2
SUPPLY – TAXABLE EVENT
1. Applicability of GST on inter-state transfer of aircraft engines, parts and accessories for use by their
own airlines
.
• Sec 7(1)(c) read with Schedule I of the CGST Act, supply of goods or services or both between related persons
or between distinct persons as specified in Section 25, when made in the course or furtherance of
business, even if, without consideration, attracts GST. Thus, GST is payable on such inter-state transfer of
aircraft engines.
.
• Clarification:
o Recipient unit shall be eligible to avail ITC.
o ITC admissible notwithstanding that credit of input tax charged on consumption of such goods is not
allowed for supply of service of transport of passengers by air in economy class at GST rate of 5%.
This was clarified by the Circular no. 16/16/2017-GST dated 15th November 2017.
2. Movement of goods (such as jewellery) for supply on approval basis (intra or inter-State)
At times, suppliers have to visit other places and carry their goods along for approval. They can only issue the
invoice at the time of supply and while carrying the goods they are not aware if the goods will be sold. While
carrying goods to other goods, the supplier cannot even register as a casual taxable person as it is impossible for
him to ascertain the supplies beforehand.
• For carrying out this supply, it has been provided that the supplier should issue a delivery challan for initial
transportation of goods.
• Only when the supply gets confirmed, the invoice can be issued.
• Further, such supplies where the supplier carries the goods from one State to another and supplies them in a
different State, will be treated as inter-State supplies. Therefore, they will attract integrated tax.
The above has been clarified vide Circular No. 10/10/2017-GST dated 18th October 2017.
Author
Jeweler of Delhi taking jewelry with him for sale on approval basis to a buyer in UP
• Jewellery taken from Delhi Showroom to UP = Not a supply – movement under delivery challan
• Jewellery shown to customer
• Customer confirms acceptance after 3 days
• Now, supply is taking place – [acceptance creating supply] – this supply involving no movement
• PoS as per Sec 10(1)(c) of IGST Act = Location of goods at time of delivery to recipient = UP
• Thus, this supply by jeweler = Inter State Supply = IGST Chargeable
• If not, then what shall be the place of supply of such transaction and consequent nature of supply?
3
Clarifications:
1) Time when supply is taking place: in case of supply by artists through galleries, there is no consideration
flowing from the gallery to the artist when the art works are sent to the gallery for exhibition and therefore,
the same is not a supply. It is only when the buyer selects a particular art work displayed at the gallery, that
the actual supply takes place and applicable GST would be payable at the time of such supply.
• The confusion here was regarding the treatment of this activity whether it is taxable in the hands of the artist
when the same is given to the art gallery or at the time of actual supply by the gallery.
• It is seen that Rule 55 (1)(c) of the CGST Rules, 2017 provides that the supplier shall issue a delivery challan
for the initial transportation of goods where such transportation is for reasons other than by way of supply.
• It is also seen that Rule 55(4) of CGST Rules provides that where the goods being transported are for the
purpose of supply to the recipient, but the tax invoice could not be issued at the time of removal of goods for
the purpose of supply, the supplier shall issue a tax invoice after delivery of goods.
.
2) Dispatch to Art Gallery: Documentation: Removal of art work is for supply on approval basis. Such
movement shall take place on a delivery challan along with the e-way bill wherever applicable.
The invoice may be issued at the time of actual supply of art work.
.
3) Nature of Supply: The supplies of the art work from one State to another State will be inter-State supplies
and attract IGST in terms of section 5 of the IGST Act, 2017.
This was clarified vide Circular no. 22/22/2017-GST dated 21st December 2017.
Author:
• Artist of Delhi sending their artwork to ART GALLERY for exhibition in Mumbai – Art Gallery exhibit it for supply
• Movement of art work to art gallery = Not a supply – movement under Delivery Challan (Rule 55) & EWB (Rule 168)
• Visitor selecting artwork and purchasing it
• Now, supply is taking place –– now, tax invoice shall be issued - this supply involving no movement
• PoS as per Sec 10(1)(c) of IGST Act= Location of goods at time of delivery to recipient = Mumbai
• thus, this supply by Delhi’s Artist = Inter State Supply = IGST Chargeable
..
• Artist does not arrange any resources (technical or human) at Art Gallery. Thus, Art Gallery shall not be considered as
‘place of business’ of artist.
• Thus, Artist cannot be treated as ‘Casual TP’ of the State in which Art Gallery is situated.
• Where a supplier of goods takes a stall in ‘Trade Fair’ / Some Business Exhibition for making sales therefrom,
whether he becomes casual TP in that case?
• In such case, supplier has arranged resources (technical or human) at Business Exhibition. Thus, such stall shall be
considered as ‘place of business’ of the supplier of goods.
• Thus, he is treated as ‘Casual TP’ of the State in which trade fair is held.
.
4. Applicability of GST on the Superior Kerosene Oil retained for the manufacture of Linear Alkyl Benzene
Consider following situation
IOC (Refinery) sending SKO (kerosene oil) to Manufacturer
• Generally supplied through pipeline
• Manufacturer retain 17%, returned balance quantity
• IOC (refinery) raised invoices only for that 17% quantity retained by manufacturer
• Issues:
• Whether the said practice is correct?
View I: Correct – invoice shall be raised only on quantity sold (i.e., 17%)
4
View-2: Incorrect – invoice shall be raised for whole quantity (100%), raise credit note for quantity returned (83%)
and claim adjustment in output tax liability in the period in which credit note is issued (Sec 34)
• .
Issues:
a. Whether in this transaction GST would be levied on SKO sent by IOC for extracting n-paraffin or only on
the n-paraffin quantity extracted by the LAB manufactures?
b. Whether the return of remaining Kerosene by LAB manufactures would separately attract GST in such
transaction?
.
Clarifications:
a. GST will be payable by the refinery (IOC, in our case) on the value of net quantity of superior kerosene
oil (SKO) retained (i.e., 15% to 17%) for the manufacture of Linear Alkyl Benzene (LAB).
b. The refinery (IOC) would be liable to pay GST on such returned quantity of SKO, when the same is supplied
by it to any other person.
[Delivery Challan = for sending goods, Tax Invoice = For quantity sold in the transaction]
Author:
• IOC (refinery) shall do following:
• Dispatch of SKO – Raise delivery Challan for entire quantity send
[EWB is not required (as transportation is through pipeline, not through motorized conveyance) – Rule 138(14)]
• Sale Materialization – Raise Tax Invoice for quantity sold (15% to 17%) .
View-2: Out of Scope of Supply– CDRC is like a court (though not a court) – So spirit wise, treatment similar to
fees received by Court/Tribunal shall be given
• .
5
CBEC /CBIC Circular No. 32/ 6/ 208- GST (Dated 2nd Feb, 2018)
Issue
Is GST leviable on the fee / amount charged in the following situations / cases : —
• A customer pays fees while registering complaints to Consumer Disputes Redressal
Commission office and its subordinate offices. These fees are credited into State Customer
Welfare Fund’s bank account.
• Consumer Disputes Redressal Commission office and its subordinate offices charge penalty in cash
when it is required.
• When a person files an appeal to Consumers Disputes Redressal Commission against order of District
Forum, amount equal to 50% of total amount imposed by the District Forum or Rs. 25000/-, whichever
is less, is required to be paid.
Clarification
• Services by an court or Tribunal established under any law for the time being in force is neither a
supply of goods nor services. Consumer Disputes Redressal Commissions (National / State / District)
may not be tribunals literally as they may not have been set up directly under Article 323B of the
Constitution. However, they are clothed with the characteristics of a tribunal on account of
the following : —
o Statement of objects and reasons as mentioned in the Consumer Protection Bill state that one of
its objects is to provide speedy and simple redressal to consumer disputes, for which a quasi
judicial machinery is sought to be set up at District, State and Central levels. The President of
the District / State / National Disputes Redressal Commissions is a person who has been or is
qualified to be a District Judge, High Court Judge and Supreme Court Judge respectively.
o These Commissions have been vested with the powers of a civil court under CPC for issuing
summons, enforcing attendance of defendants / witnesses, reception of evidence, discovery /
production of documents, examination of witnesses, etc.
o Every proceeding in these Commissions is deemed to be judicial proceedings as per
sections 193/228 of IPC. The Commissions have been deemed tobe a civil court under CrPc.
o Appeals against District Commissions lie to State Commission while appeals against the State
Commissions lie to the National Commission. Appeals against National Commission lie to the
Supreme Court.
.
In view of the aforesaid, it is hereby clarified that fee paid by litigants in the Consumer
Disputes Redressal Commissions are not leviable to GST.
Any penalty imposed by or amount paid to these Commissions will also not attract GST.
.
.
Author:
• Extending the logic of above circular:
• Fees paid for obtaining Advance Ruling from Advance Ruling Authority (AAR) will also not be subject to GST.
• Fees paid for obtaining Advance Ruling from Appellate Authority for Advance Ruling (AAAR) will also not be
subject to GST.
.
6
COMPOSITE & MIXED SUPPLY
• Issues:
• Whether supply of Mishra is – supply of Goods or supply of service?
Order I: Supply of napkin – It is essentially sale of napkins.
Order-2: Supply of books/ magazines– Is it also sale of books/ magazines? – No – as Mishra has no right /
authorization to sell books/ magazines (as content is owned by Sujata Publication) – so it is supply of service.
• .
In the case of printing of books, pamphlets, brochures, annual reports, and the like, where only
content is supplied by the publisher or the person who owns the usage rights to the intangible
inputs while the physical inputs including paper used for printing belong to the printer, supply
of printing [of the content supplied by the recipient of supply] is the principal supply and therefore such
supplies would constitute supply of service falling under heading 9989 of the scheme of classification of
services.
In case of supply of printed envelopes, letter cards, printed boxes, tissues, napkins, wall paper
etc. falling under Chapter 48 or 49, printed with design, logo etc. supplied by the recipient of
goods but made using physical inputs including paper belonging to the printer, predominant
supply is that of goods and the supply of printing of the content [supplied by the recipient of supply] is
ancillary to the principal supply of goods and therefore such supplies would constitute supply of goods falling
under respective headings of Chapter 48 or 49.
.
CRUX
Situation Analysis
What is the position in respect Contents : Belongs to publisher or the person who owns the usage rights to the
of printing of books, pamphlets, intangible inputs;
brochures, annual reports, and Physical inputs including paper : Belongs to printer;
the like?
Categorization : Treated as supply of services falling under CTH 9989.
What is the position in respect Design, logo etc. : supplied by the recipient of goods;
of supply of printed envelopes, Physical inputs including paper : Belongs to printer;
letters cards, printed boxes,
Categorization : Treated as supply of goods falling under Chapter 48 or 49
issues, napkins, wall paper etc.
falling under Chapter 48 or 49?
.
Clarification:
The supply of books shall be treated as supply of goods as long as the supplier owns the books and has the legal
rights to sell those books on his own account.
.
• Issues:
• Whether supply of Ramesh is – supply of Goods or supply of service?
Order I: Doing retreading for B Ltd. – it is supply of service.
.
Order-2: Selling retreaded tyres – (supply of goods or service) – Composite Supply - supply of goods.
• .
Author:
Retreading of tyres (where tyres belong to recipient)**
Re-treading = (supply of goods/rubber and supply of service/labour) = Composite Supply
CBEC Circular = Treatment as per Sec 8 of CGST Act which provides that determine principal supply and treat the
combination as principal supply)
Author = Treatment as provided by Schedule II (Para 3) which provides that any treatment or process which is supplied
on another person’s goods is a supply of service.
.
Option-2: State as per circular and at the end, mention yours opinion (i.e. restate Author note)
.
8
REVERSE CHARGE MECHANISM
Vide N/N 10/2018-CT (Rate) and N/N 11/2018-IT (Rate) dated 23rd March 2018, reverse charge under
Sec 9(4) / Sec 5(4) has been deferred till 30th June 2018.
.
This means that all such supplies will be treated as exempt in nature till 30th June 2018.
Author:
Above RCM has been made practically ineffective via issuance of exemption in respect of GST payable on such supplies.
• Since GST has been exempted. the registered recipient is not required to pay RCM GST. He is also not required to
raise any self-invoice in respect of such supply.
• Further supply by A Ltd. to B Ltd. (GST registered) -- RCM not applicable (GST payable by A Ltd.)
.
[B] RCM on services
Entry No. 5A Added: Renting of immovable property by Government/local authority to a registered person
.
o Renting of immovable property to unregistered entity – GST on rental payable by Govt / Local Authority
Entry No. 7: Insurance agent services subject to RCM – Insurance agent has now been defined.
.
o Thus, if there is an insurance company selling insurance policies through an ECO (E-Commerce Operator) and
paying commission to ECO for sale of policies, then such ECO shall not be termed as ‘insurance agent’ unless
such ECO is licensed under Section 42 of Insurance Act.
o Unless ECO can be termed as ‘insurance agent’, RCM shall not be applicable.
.
10
COMPOSITION
The rate of tax for persons under composition scheme was revised with effect from 23rd January 2018
vide Notification no. 3/2018-Central Tax dated 23rd January 2018.
.
3. Any Other Supplier 0.5% of the TO in the 0.5% of the TO in 1% of TO in the State / UT
(basically, traders of goods) State/ UT the State/ UT
.
Post-Amendment
.
2. Suppliers making supplies 2.5% of the TO in the 2.5% of the TO in the 5% of TO in the State
referred to in Schedule II – State/ UT State/ UT / UT
Para 6(b),
i.e., Restaurant and Caterers
.
• Great Savings to trader, especially considering the fact that composition supplier does not collect GST payable
from his customer.
• Earlier, such trader used to open a separate premise for selling / supplying exempted goods (that separate
premise was operated without taking GST registration as per Sec 23(1)(a) of CGST Ac)
11
Composition Liability of Manufacturer
Earlier, CT liability = 2% of TO in the State / UT (which includes exempt as well as non-exempt supplies)
.
Now, CT liability = 1% of TO in the State / UT (which includes exempt as well as non-exempt supplies)
Note:
o GST Council has mentioned that w.e.f. 1st Jan, 2018, for traders, turnover will be counted only for
supply of taxable goods.
o Thus, ‘taxable supplies of goods’ to be understood to mean ‘supply of taxable goods’.
o Taxable supply = Supply on which GST is leviable under GST Act (thus, even supply of exempted
goods is also taxable supply)
o Supply of taxable goods = Supply of goods on which GST is payable (thus, supply of exempted
goods is not supply of taxable goods)
.
o Since GST Council has stated that ‘taxable supplies of goods’ to be understood to mean ‘supply
of taxable goods’, thus, taxable of exempted goods shall now not be counted into ATO while
computing composition liability of trader.
Answer
Case-A Case-B Case-C
[Product A only] [Product A & B only] [Product A, & & C also]
For Manufacturer CT liability CT liability Composition Scheme not available
= 1% of 25,00,000 = 1% of 50,00,000
Spl Note:
Next year eligibility (FY 2019-20): Any supplier is eligible if his ATO in preceding year did not exceed Rs 100 lakhs.
For that purpose, ATO shall be determined in usual manner (i.e., it will include all supplies – exempt as well as non-exempt,
taxable supply as well as non-taxable supply)
.
12
2. Time limits - extension thereof
.
Supplier opting for composition scheme for the first time : Allowance of Composition Scheme at
any time during the year 2017-18
Generally, composition scheme has to be opted for from the beginning of FY (and intimation as to that shall be
given well in advance – i.e., before beginning of such FY)
However, for FY 2017-18 (first year of implementation of GST), considering increase in composition limits in
between the FY 2017-18 itself, supplier have been allowed to opt for composition scheme during the year itself.
Supplier can submit intimation (Form GST CMP-02 on the GST portal) and can avail composition scheme with
effect from the first day of the month succeeding the month in which he opts for the same.
Supplier shall also need to furnish the statement in Form GST ITC-03 within a period of 180 days
from the date of commencement of payment of tax under composition scheme. This amendment was
brought vide N/N 45/2017 -CT dated 13th October 2017.
Also, the aforesaid period of 180 days was enhanced from 90 days vide N/N 3/2018 - CT dated
23rd January 2018.
Supplier migrated into GST law and opted for composition scheme at the stage of migration itself
: Extension of time period for furnishing stock Statement in Form GST CMP-03
A person who had migrated from the earlier law into the GST law has to furnish a stock statement in Form
GST CMP-03.
The original time period was 60 days from the date of commencement of payment under composition
scheme.
Through multiple extensions, the final date for furnishing such statement was 31st January 2018
vide Order No. 11/2017-GST dated 21st Dec 2017.
13
VALUATION OF SUPPLY
.
Now -- Special valuation through new specific rule – Rule 31-A of CGST Rules, 2017 (vide N/N 3/2018- CT)
Effective date of applicability of amendment –23rd January 2018
Rule 31A : Value of supply in case of Lottery, Betting, Gambling And Horse Racing
.
(b) The value of supply of lottery authorized by State Governments shall be deemed to be
… 100/128 of the higher of following
… face value of ticket or
… the price as notified in the Official Gazette by the organizing State.
.
(b) “lottery authorised by State Governments” means a lottery which is authorized to be sold in State(s) other than
the organizing State also; (GST Rate on such lottery is 28%)
.
and
(c) “Organizing State” has the same meaning as assigned to it in rule 2 (1)(f) of the Lotteries (Regulation) Rules, 2010.
1 Totalisator = (Horse Racing) the machine that records bets in this system and works out odds, pays out winnings, etc
14
REGISTRATION
are notified as the category of persons exempted from obtaining registration under GST law.
Author: All notified persons which till date have been exempted from registration under section 23(2):
.
Inter-State supply of Handicraft Goods Yes N/N 8/2017 -IT Covered ----
Intra-State Supply of Handicraft Goods by Casual Taxable Yes N/N 32/2017 -CT Covered ----
Person
Inter-State supply of Job-Worker Services No N/N 7/2017 -IT ---- Covered
Inter-State supply of Any Service Yes N/N 10/2017 -IT ---- Covered
Supply of Services through ECO (intra-state) Yes N/N 65/2017 –CT ---- Covered
(dated 15th Nov, 2017)
.
15
CGST Rules, 2017:
.
2. Registration Procedure : Specified Entities/ Notified Entities allotted UIN for enabling them to claim
refund of GST paid on inward supplies
(1A) The UIN granted under sub-rule (1) to a person under section 25(9)(a) shall be applicable to the
territory of India.
[inserted by N/N 75/2017-CT (dated 29th Dec, 2017)]
* Circular No.36/10/2018-GST dated 13th March, 2018: Due to delays in making available FORM GST REG-
13 on the common portal, an alternative mechanism has been developed. Entities covered under Section 25
(9)(a) of the CGST Act may approach the Protocol Division, Ministry of External Affairs in this regard, who
will facilitate grant of UINs in coordination with the CBEC/ CBIC and GSTN.
Provided that any change in the mobile number or e-mail address of the authorized signatory, as amended
from time to time, shall be carried out only after online verification through the Common Portal in the manner
provided under the said rule.
.
4. Cancellation of registration: Voluntarily registered person allowed to cancel registration even within
period of 1 year
Rule 20 : Application for cancellation of registration
A registered person,
other than tax deductor or tax collector to whom a registration has been granted or a person to whom a UIN has been granted,
seeking cancellation of his registration
.
shall electronically
… submit an application in FORM GST REG-16,
… including therein the details of inputs held in stock or inputs contained in semi-finished or finished goods held in
stock and of capital goods held in stock on the date from which cancellation of registration is sought, liability thereon,
details of the payment, if any, made against such liability
and
may furnish, along with the application, relevant documents in support thereof at the Common Portal within thirty days of
occurrence of the event warranting cancellation, either directly or through a Facilitation Centre notified by the
Commissioner:
Provided that no application for cancellation of registration shall be considered in case of a taxable
person, who has registered voluntarily, before the expiry of a period of one year from the effective date
of registration.
[deleted by N/N 3/2018-CT (dated 3rd Jan, 2018)]
17
Effect of the amendment –
It had been specified in the Registration rules that a person cannot opt for cancellation of registration for a period of 1
year from the effective date of registration if he had registered himself voluntarily. This provision has been removed
vide N/N 3/2018-CT dated 23rd January, 2018. Hence, any person who had registered himself voluntarily can now apply
for cancellation of registration without waiting for any time limit..
1. Sec 17 – Apportionment of ITC (for supplier of exempt supply as well as non-exempt supply)
ITC to be apportioned by application of Rule 42 (input and input service) and Rule 43 (Capital Goods)
ITC to be apportioned in ration of TO (exempt supply) to Total TO (exempt supply as well as non-exempt
supply)
Explanation has been inserted in Rule 43 providing that certain exempt supplies are to be treated as non-
exempt and thus, would not necessitate any ITC Reversal
Explanation: For the purposes of rule 42 and this rule, it is hereby clarified that the aggregate value
of exempt supplies shall exclude: -
.
(a) the value of supply of services specified in the N/N 42/2017-Integrated Tax (Rate);
• N/N 42/2017-IT provides full exemption to supply of services having place of supply in Nepal and Bhutan,
against payment in Indian rupees.
(b) the value of services by way of extending deposits, loans or advances in so far as the
consideration is represented by way of interest or discount, except in case of a banking company
or a financial institution including a non-banking financial company, engaged in supplying services by
way of accepting deposits, extending loans or advances; and
(c) the value of supply of services by way of transportation of goods by a vessel from the
customs station of clearance in India to a place outside India.
Sea Transportation of GOODS (from Customs Station in India to a place outside India – i.e., of EXPORT GOODS)
Sea transportation of Export Freight Exempted by Notification Such supply = Newly inserted
Goods Charges [through N/N 12/2017-CT (Rate) – Exempt supply explanation::
(Supplier and recipient in Entry 19-B (inserted w.e.f. 25th Jan, Such supply = Non-exempt
India: PoS as per Sec 12 of 2018)]
IGST Act = Location of
recipient who is GST
Registered)
.
20
JOB WORK
Quarterly Intimation over portal: Dispatches to job-worker as well as receipt back from job-worker shall be intimated
over portal [Form GST ITC 03] ---- Sec 143 read with Rule 45 of CGST Rules, 2017
Breach of specified period of 1 year (input)/ 3 years (CG): Earlier dispatch = Deemed supply (GST payable with
Interest)
i. Tax invoice shall be raised for such supply now.
ii. Such supply shall now be reported in GSTR-1 (Statement of Outward Supplies) .
Rule 45 of CGST Rules, 2017 has been amended vide N/N 14/2018-CT dated 23rd March, 2018, the
procedure for sending of goods on job work basis has been simplified.
21
Rule 45: : Conditions and restrictions in respect of inputs & capital goods sent to the JOB WORKER
(1) The inputs, semi-finished goods or capital goods shall be sent to the job worker under the
cover of a CHALLAN issued by the principal, including where such goods are sent directly to
a job-worker
(inserted by N/N 14/2018-CT(23rd March, 2018)
and where the goods are sent from one job worker to another job worker,
… the challan may be issued either by the principal or the job worker sending the goods
.
to another job worker.
Provided that
… the challan issued by the principal may be endorsed by the job worker,
indicating therein the quantity and description of goods where the goods
… are sent by one job worker to another or
.
(2) The challan issued by the principal to the job worker shall contain the details specified in rule 55:
(4) Goods sent to J/Wker must be received within period-stipulated u/Sec 143
Consequence of Non-Receipt = Transaction to be treated as supply (made at the time goods were
sent for job-work)
(Supplier)
Author :
1. Job-Work = Treatment or process undertaken by one person on goods of other persons
[Job-Work = Supply of Service - Schedule II]
2. Person undertaking job-work = Job-worker (may be registered or unregistered)
3. Person on whose goods job-work is being done = Principal (must be registered)
.
Scope of Job-work:
Whether any inputs, other than the goods provided by the principal, can be used by the job worker
for providing the services of job-work?
.
Clarification: The job worker, in addition to the goods received from the principal, can use his own goods for
providing the services of job work.
Clarification:
The provisions of section 143 of the CGST Act are applicable to a registered person. Thus, it is only a registered
person who can send the goods for job work under the said provisions.
• It may also be noted that the registered person (principal) is not obligated to follow the said provisions.
It is his choice whether or not to avail or not to avail of the benefit of these special provisions.
Therefore, it is clarified that a job worker is required to obtain registration only in cases where his aggregate
turnover, to be computed on all India basis, in a financial year exceeds the threshold limit regardless of whether
the principal and the job worker are located in the same State or in different States.
23
Movement of goods from the principal to the job worker and the documents and intimation required
therefor:
Rule 45 Goods sent for job-work - Dispatch under challan issued by the Principal
Rule 55 Dispatch of goods other than by way of supply – Delivery Challan to be issued by the
Consignor
Rule 138 EWB (E-way Bill): EWB to be raised for movement of goods (whether by way of supply or not)
Clarification: On conjoint reading of the relevant legal provisions, the following is clarified with respect to
the issuance of challan, furnishing of intimation and other documentary requirements in this regard:
(i) Where goods are sent by principal to only one job worker:
o The principal shall prepare in triplicate, the challan in terms of rules 45 and 55 of the CGST Rules,
for sending the goods to a job worker.
o Two copies of the challan may be sent to the job worker along with the goods.
o The job worker should send one copy of the said challan along with the goods, while returning them
to the principal.
o The FORM GST ITC-04 will serve as the intimation as envisaged under section 143 of the CGST Act,
2017.
(ii) Where goods are sent from one job worker to another job worker:
• In such cases, the goods may move under the cover of a challan issued either by the principal
or the job worker.
• In the alternative, the challan issued by the principal may be endorsed by the job worker
sending the goods to another job worker, indicating therein the quantity and description of goods
being sent. The same process may be repeated for subsequent movement of the goods to other job
workers.
(iii) Where the goods are returned to the principal by the job worker:
• The job worker should send one copy of the challan received by him from the principal while returning
the goods to the principal after carrying out the job work.
(iv) Where the goods are sent directly by the supplier to the job worker:
• In this case, the goods may move from the place of business of the supplier to the place of
business/premises of the job worker with a copy of the invoice issued by the supplier in the name
of the buyer (i.e. the principal) wherein the job worker’s name and address should also be
mentioned as the consignee, in terms of rule 46(o) of the CGST Rules.
• The buyer (i.e., the principal) shall issue the challan under rule 45 of the CGST Rules and send the
same to the job worker directly in terms of para (i) above.
• In case of import of goods by the principal which are then supplied directly from the customs
station of import, the goods may move from the customs station of import to the place of
business/premises of the job worker with a copy of the Bill of Entry and the principal shall issue the
challan under rule 45 of the CGST Rules and send the same to the job worker directly.
24
(v) Where goods are returned in piecemeal by the job worker:
In case the goods after carrying out the job work, are sent in piecemeal quantities by a job worker to
another job worker or to the principal, the challan issued originally by the principal cannot be
endorsed and a fresh challan is required to be issued by the job worker.
Clarification: On conjoint reading of all the provisions, the following is clarified with respect to the
issuance of an invoice, time of supply and value of supply:
(1) Supply of job work services: The job worker, as a supplier of services, is liable to pay GST if he is liable
to be registered.
• He shall issue an invoice at the time of supply of the services as determined in terms of section 13 read
with section 31 of the CGST Act.
• The value of services would be determined in terms of section 15 of the CGST Act and would include not
only the service charges but also the value of any goods or services used by him for supplying the job
work services, if recovered from the principal.
It may be noted that if the job worker is not registered, GST would be payable by the principal on
reverse charge basis in terms of the provisions contained in section 9(4) of the CGST Act. However,
the said provision has been kept in abeyance for the time being.
(2) Supply of goods by the principal from the place of business/ premises of job worker: Section 143
of the CGST Act provides that the principal may supply, from the place of business / premises of a job worker,
inputs after completion of job work or otherwise or capital goods (other than moulds and dies, jigs and fixtures
or tools) within one year or three years respectively of their being sent out, on payment of tax within India,
or with or without payment of tax for exports, as the case may be. This facility is available to the principal
only if he declares the job worker’s place of business / premises as his additional place of business or if the
job worker is registered.
Since the supply is being made by the principal, it is clarified that the time, value and place of
supply would have to be determined in the hands of the principal irrespective of the location of the
job worker’s place of business/premises.
Further, the invoice would have to be issued by the principal.
It is also clarified that in case of exports directly from the job worker’s place of
business/premises, the LUT or bond, as the case may be, shall be executed by the
principal.
25
Illustration: The principal is located in State A, the job worker in State B and the recipient in
State C. In case the supply is made from the job worker’s place of business / premises, the
invoice will be issued by the supplier (principal) located in State A to the recipient located in
State C. The said transaction will be an inter-State supply. In case the recipient is also located
in State A, it will be an intra-State supply.
.
(3) Violation of conditions laid down in section 143: As per the provisions contained in section 143 of the
CGST Act, if the inputs or capital goods (other than moulds and dies, jigs and fixtures or tools) are neither
received back by the principal nor supplied from the job worker’s place of business within the specified time
period, the inputs or capital goods (other than moulds and dies, jigs and fixtures or tools) would be deemed
to have been supplied by the principal to the job worker on the day when such inputs or capital goods were
sent out to the first job worker.
Thus, if the inputs or capital goods are neither returned nor supplied from the job worker’s place of
business / premises within the specified time period, the principal would issue an invoice for the
same and declare such supplies in his return for that particular month in which the time
period of one year / three years has expired. The date of supply shall be the date on which
such inputs or capital goods were initially sent to the job worker and interest for the intervening
period shall also be payable on the tax.
• If such goods are returned by the job worker after the stipulated time period, the
same would be treated as a supply by the job worker to the principal and the job
worker would be liable to pay GST if he is liable for registration in accordance with
the provisions contained in the CGST Act read with the rules made thereunder.
o It may be noted that if the job worker is not registered, GST would be payable
by the principal on reverse charge basis in terms of the provisions contained in section
9(4) of the CGST Act. However, the said provision has been kept in abeyance for the
time being.
Note: There is no requirement of either returning back or supplying the goods from the job worker’s place of
business/premises as far as moulds and dies, jigs and fixtures, or tools are concerned.
Availability of input tax credit to the principal and the job worker
Doubts have been raised regarding the availability of input tax credit (ITC) to the principal in respect of inputs /
capital goods that are directly received by the job worker.
Doubts have also been raised whether the job worker is eligible for ITC in respect of inputs, etc. used by him in
supplying job work services.
Clarification:
• In view of the provisions contained in section 16 (2)(b) of the CGST Act, the input tax credit would be
available to the principal, irrespective of the fact whether the inputs or capital goods are received by the
principal and then sent to the job worker for processing, etc. or whether they are directly received at the job
worker’s place of business/premises, without being brought to the premises of the principal.
.
• It is also clarified that the job worker is also eligible to avail ITC on inputs, etc. used by him in
supplying the job work services if he is registered.
.
.
26
INPUT SERVICE DISTRIBUTOR
.
What if invoice of common service is received by one of the unit/premise registered as taxpayer?
• Solution 1: Such unit shall now registered as a new ISD and then distribute ITC to all.
• Solution-2: Such unit shall transfer ITC to ISD who shall then distribute ITC to all.
Solution 1 is easy and simple.
Law has introduced provisions for materializing solution1.
27
Rule 54 : Tax invoice in SPECIAL CASES
.
(1A) (a) A registered person, having the same PAN and State code as an Input Service
Distributor,
… may issue an invoice or, as the case may be, a credit or debit note to transfer the
credit of common input services to the Input Service Distributor, which shall contain
the following details:-
i. name, address and GSTIN of the registered person having the same PAN and same State
code as the ISD;
ii. a consecutive serial number not exceeding sixteen characters, in one or multiple series,
containing alphabets or numerals or special characters -hyphen or dash and slash
symbolised as “-” and “/” respectively, and any combination thereof, unique for a financial
year;
iii. date of its issue;
iv. GSTIN of supplier of common service and original invoice number whose credit is sought to
be transferred to the Input Service Distributor;
v. name, address and GSTIN of the ISD;
vi. taxable value, rate and amount of the credit to be transferred; and
vii. signature or digital signature of the registered person or his authorized representative.
(b) The taxable value in the invoice issued under clause (a) shall be the same as the value of the
common services.
.
INVOICE
1. Special Invoicing by Bank/FI or Insurer: Issuance of Consolidated tax invoice is optional (not
mandatory)
1) Rule 54(2) - Banks/FI & Insurer allowed ‘consolidated invoices’ on monthly basis
(2) Where the supplier of taxable service is an insurer or a banking company or a financial institution,
including a non-banking financial company,
… the said supplier shall may issue a CONSOLIDATED tax invoice or any other document in lieu thereof,
by whatever name called, for the supply of services made during a month at the end of the month
.
… whether issued or made available, physically or electronically
… whether or not serially numbered, and
… whether or not containing the address of the recipient of taxable service
but containing other information as prescribed under rule 46.
Q 2. When a banking company is not required to serially number its invoices / document for supply of its services,
how will the service recipient get credit for GST on the services provided by the bank?
(CBIC – FAQ on Financial Services)
Ans. Under Rule 54(2) of the CGST Rules, 2017 a banking company or a financial institution including a NBFC or an insurer
can issue an invoice or any other document in lieu thereof whether or not serially numbered and whether or not
containing the address of the recipient but containing other information as mentioned under Rule 46. There is no
restriction on the invoice/document being a consolidated invoice/document but it must bear an identification
number, which need not necessarily be serially numbered. The recipient of service will get the credit for GST so long
as the bank, etc. uploads the details of the invoice / document under that number with GSTIN of the recipient in its
statement if FORM GSTR-1.
.
Q 3. Whether commission paid to insurance agents shall be construed as supplies received under Section 9(3) of
CGST Act, 2017? If yes, whether the Life Insurance Company can raise a consolidated invoice for such
commission payments?
.
Ans. Supplies received from Insurance Agents and provides for the Insurance Company to pay GST on such supplies under
Section 9(3) of the CGST Act, 2017. Insurance company is liable to pay GST as RCM liability.
In such cases, the insurance company may issue agent-wise consolidated invoice at the end of the month for the
supply of services received during the month. [rule 54(2) of CGST Rules, 2017]
29
Effect of the amendment –
The original rules required the insurers/banks/financial institutions/non-banking financial companies to mandatorily
issue invoices even though the same might have been without the serial number and the address of the recipient.
Consolidated invoicing allowed.
o Earlier, the suppliers were mandated to issue consolidated tax invoice for supply of services made during the
month at the end of the month.
o However, vide N/N 55/2017-CT dated 15th November 2017, this mandatory requirement was changed to optional.
So, these categories of persons were provided an option only to issue consolidated invoices.
2. Transport of Goods: Tax Invoice / Bill of Supply is must, even if EWB is not required in any case
The person-in- charge of the conveyance shall carry a copy of the tax invoice or the bill of supply
issued in accordance with the provisions of
– rules 46, (Rule 46 makes provision for issuance of tax invoice)
– 46A or (Rule 46-A makes provision for issuance of tax invoice-cum-bill of supply)
– 49 (Rule 49 makes provision for issuance of bill of supply)
in a case where such person is not required to carry an E-WAY BILL under these rules.
As per the first proviso of section 35(1) of the CGST Act, 2017 both the
principal and the auctioneer are required to maintain the books of
accounts relating to their additional place(s) of business in such
places.
It was represented that both the principal as well as the auctioneer may be
allowed to maintain the books of accounts relating to the additional place(s)
of business at their principal place of business itself.
So, the matter was clarified vide Circular no. 23/23/2017-GST dated 21st December 2017.
(a) The principal and the auctioneer of tea, coffee, rubber etc. are required to declare warehouses where such
goods are stored as their additional place of business. The buyer is also required to disclose such warehouse
as his additional place of business if he wants to store the goods purchased through auction in such
warehouses.
(b) Both the principal and the auctioneer are required to maintain the books of accounts relating to each and
every place of business in that place itself as per the first proviso to sub-section (1) of section 35 of the CGST
Act. However, in case difficulties are faced in maintaining the books of accounts, it is clarified that they may
maintain the books of accounts relating to the additional place(s) of business at their principal place of
business instead of such additional place(s).
(c) Such principal or auctioneer shall intimate their jurisdictional proper officer in writing about the maintenance
of books of accounts relating to additional place(s) of business at their principal place of business.
(d) Further, the principal or the auctioneer shall be eligible to avail input tax credit subject to the fulfilment of
other provisions of the Act and the rules made thereunder.
It is further clarified that this Circular is applicable to the supply of tea, coffee, rubber, etc. where the auctioneer
claims ITC in respect of the supply made to him by the principal before the auction of such goods and the said
goods are supplied only through auction.
31
TIME OF SUPPLY
.
Through Sec 148 (special procedure for certain persons), CG has made advances non taxable at time of
receipt of advances – GST shall be payable only when goods are actually supplied.
Sec 12 (2):
Time of supply in case of goods has been stated to be earlier of the following dates:
a) Date of issue of invoice or the last date on which he is required to issue the invoice with respect to the supply;
b) Date on which supplier receives the payment with respect to the supply;
Notification issued
N/N 40/2017-CT (dated 13th Oct, 2017) (amended on 15th Nov)
.
In exercise of the powers conferred by section 148 of the CGST Act, 2017, the CG, on the recommendations of
the Council, hereby notifies
… the registered person who did not opt for the composition levy under section 10 of the said
Act
.
as the class of persons
… who shall pay the central tax2 on the outward supply of GOODS at the time of supply as
specified in Section 12 (2)(a) of the said Act.
.
.
* Composition supplier is not covered under notification. He shall be liable to pay GST on advances received by him.
• Possible logic is that he never recovers composition tax from recipient.
2 Notification under Integrated tax has not been issued -- This is an unintended omission- Practically, same treatment is being
allowed to inter-state supply also.
32
Special procedure is applicable only for supplier whose ToS is determined as per Sec 12(2)
.
• ToS for supply of goods is determined as per Sec 12. If supply of goods is subject to RCM, then ToS for RCM liability
is determined as per Sec 12(3)
• Thus, above provision as to non-taxation of advances received is not applicable to RCM situation.
• Thus advances paid for receiving supply of goods which are subject to RCM will attract GST liability.
Through Sec 148 (special procedure for certain persons), CG has changed ToS in case of transaction involving
cross supply of services between landowner and builder/ developer / construction company.
Real estate developers usually do not have ownership of land when developing a property. It enters into an agreement
with the land owner for transfer of development rights on the land. Against such development rights, the landowner can
either be given share in the revenue of the total flats that will be sold, or he may be given a certain number of the flats
through an area sharing agreement. In an area sharing agreement, there were quite a few areas of concern. One of the
biggest concerns was that the time of supply of services in this case was very difficult to determine. If the date of joint
development agreement would have been the time of supply, then determining the valuation on such date would have
been very difficult. Also, the blockage of working capital for payment of taxes even before the commencement of
construction was another issue which was prevailing. To settle such issues, the government issued N/N 4/2018- CT
(Rate) dated 25th Jan 2018 and N/N 4/2018-IT (Rate) dated 25th Jan 2018 regarding time of supply in case of
construction service against transfer of development right and vice versa.
• The time of supply has been deferred to the time when the possession or right in the complex is transferred
through a conveyance deed or an allotment letter. This date will allow the valuation to be more certain as
compared to the date of joint development agreement. Also, the blockage of working capital is cushioned due
to the deferment in the payment of taxes especially for landowners who intend to keep flats for their own use.
N/N 4/2018-CT (Rate) + N/N 4/2018-IT (Rate) (dated 25th Jan, 2018)
In exercise of the powers conferred by section 148 of the CGST Act, 2017, the CG, on the recommendations of
the Council, hereby notifies the following classes of registered persons, namely-
.
(a) registered persons who supply development rights to a developer, builder, construction company or any
other registered person against consideration, wholly or partly, in the form of construction service of complex,
building or civil structure; and
(b) registered persons who supply construction service of complex, building or civil structure to supplier of
development rights against consideration, wholly or partly, in the form of transfer of development rights,
as the registered persons in whose case the liability to pay central tax3 on supply of the said services, on
the consideration received
… in the form of construction service referred to in clause (a) above and
… in the form of development rights referred to in clause (b) above,
shall arise at the time when the said developer, builder, construction company or any other registered person,
as the case may be, transfers possession or the right in the constructed complex, building or civil structure,
to the person supplying the development rights by entering into a conveyance deed or similar instrument
(for example allotment letter).
3 If supply is inter-state supply attracting IGST – then same ToS has been prescribed by N/N 4/2018-IT.
33
Analysis
Supply of Service
(Supply of development rights – consideration in form
of construction service)
Landowner [LDR transferred – consideration (non-monetary) received at later Developer, Builder,
stage] Construction Company or
any other Person
(Registered (Registered Person)
Person)
Supply of Service
(Supply of construction service – consideration in form of
development rights)
[Construction Service – will be provided in stages
– consideration (non-monetary / LDR) received in advance ] .
1) Mr. A, a land owner, enters into following agreement with PQR Builder:
2) Mr A will transfer development rights to PQR builder enabling PQR Builder to construct residential complex thereon.
3) The residential complex will consist of 25 residential units.
4) In lieu of transfer of development rights, PQR Builder will handover full constructed 10 residential units to Mr A.
5) Rest 15 residential units shall belong to PQR builder who shall be entitled to sell those in the market. PQR Builder has sold these flats
.
before completion of construction of project.
Analysis
Activity Consideration GST Liability Time of Supply
Mr A (land Transfer of 10 complete Transfer of LDR = Supply of Sr – ToS as per Sec 148
owner) development residential unit GST payable = Date when conveyance deed is
rights entered into (or date when allotment
letter is issued to Mr A)
PQR Construction
(Builder)
(1) 10 units Development Construction (Building sold under ToS as per Sec 148
(handed over rights in land construction) = Supply of Sr – = Date when conveyance deed is
to landowner) GST payable entered into (or date when allotment
letter is issued to Mr A)
(2) 15 units (sold Money Construction (Building sold under ToS as per Sec 13(2)
in open construction) = Supply of Sr –
market) GST payable
.
34
TDS / TCS
It may be noted that the applicability of the provisions of TDS has been deferred to a date to be notified in
future.
It may be noted that the applicability of the provisions of TCS has been deferred to a date to be notified in
future.
35
RETURNS
Form GSTR 2 and 3 have been deferred by the Government at least till 30th June 2018.
.
Multiple notifications have been issued for the extension of this form GSTR 3B till June, 2018.
2. GSTR-1: Quarterly returns for persons having aggregate turnover less than Rs. 1.5 crores
.
.
In cases where the registered person wrongly reports his aggregate turnover and opts to file FORM GSTR-1 on quarterly
basis, he may be liable for punitive action under the CGST Act, 2017. This has been clarified as per.
Sec 128 provides for waiver (full or partial) of late fees by CG (upon recommendation of Council)
Waiver has been granted vide N/N 4/2018-CT.
Considering waiver, new applicable late fee is
Reduced Late fee= Rs 25 per day (upto Rs 5000)
In case of nil return, reduced rate fee shall be Rs 10 per day (upto Rs 5000)
Late fee will be double: [Late fee u/Sec 47 of CGST] + [Late fee u/Sec 47 of SGST Act]
Thus, normally if GSTR is filed belatedly, then late fee shall be Rs 50 per day (subject to maximum of Rs 10,000).
As per Section 16(3)(a) of the IGST Act, 2017 provides for supply without payment of GST but upon execution of
bond/ LuT. (Bond/LuT submission shall be governed by Rule 96-A of CGST Rules)
• Such supplier can claim ITC – Sec 16(2) of IGST Act & Sec 17(2) of CGST Act
• Such supplier is entitled to claim refund of ITC – Sec 16(3)(a) of IGST Act
• ITC refund shall be subject to compliance with Sec 54 of CGST Act
o Refund procedure as specified in Sec 54 read with Rule 89(4), (4A) & (4B) shall be complied with.
o Conditions for claiming refund as stated in Sec 54(3) shall also be complied with.
.
• Issue: Whether every supplier (of goods / services) can opt for execution of LUT instead of Bond?
.
… As per section 16(2) of the IGST Act, ITC may be availed for making zero rated supplies, notwithstanding
that such supply is an exempt supply. Whereas, as per section 2 (47) of the CGST Act, exempt supply
includes non-taxable supply. Further, as per section 16(3) of the IGST Act, a registered person making
zero rated supply shall be eligible to claim refund when he either makes supply of goods or services or
both under bond or letter of undertaking (LUT) or makes such supply on payment of integrated tax.
.
… However, in case of zero rated supply of exempted or non-GST goods, the requirement for
furnishing a bond or LUT cannot be insisted upon.
… It is thus, clarified that in respect of refund claims on account of export of non-GST and
exempted goods without payment of integrated tax; LUT/bond is not required..
38
DEEMED EXPORTS
Contrary to export, deemed export supplies are made upon payment of GST. However, either the supplier or
recipient is entitled to claim refund of that GST paid.
• Sec 147 provides for notification of transactions which will be regarded as ‘deemed export’
4 types of supplies have been notified as deemed export.
1. Supply of goods by a registered person against Advance Authorization
2. Supply of capital goods by a registered person against Export Promotion Capital Goods Authorization
4. Supply of gold by a bank or Public-Sector Undertaking specified in the N/N 50/2017- Customs, against Advance
Authorization.
.
• Refund related to deemed export transaction shall be claimed as per – Sec 54 read with Rule 89
o Refund application: Form GST RFD 01
o Documentation: Statement of invoices of such supplies + Additional Documents (as notified)
• Regarding deemed export supply to EoU, additional document is tax
invoice duly signed by EoU.
• Areas of amendment
o Circular no. 14/14/2017-GST dated 6th November 2017 has stated the procedure and
safeguards as to issuance of invoice by EoU.
i. Prior Intimation by EoU (before procuring supply): The recipient EOU shall give prior intimation
in a prescribed proforma in “Form–A” (appended herewith) bearing a running serial number containing
the goods to be procured, as pre-approved by the Development Commissioner and the details of the
supplier before such deemed export supplies are made. The said intimation shall be given to –
a) the registered supplier;
b) the jurisdictional GST officer in charge of such registered supplier; and
c) its jurisdictional GST officer.
.
ii. Supply by supplier under Tax Invoice: The registered supplier thereafter will supply goods under tax
invoice to the recipient EOU.
.
iii. Endorsement of tax invoice by EoU and submission of copy: On receipt of such supplies, the EOU
shall endorse the tax invoice and send a copy of the endorsed tax invoice to –
a) the registered supplier;
b) the jurisdictional GST officer in charge of such registered supplier; and
c) its jurisdictional GST officer.
.
iv. Endorsed tax Invoice = Proof of Deemed Export: The endorsed tax invoice will be considered as
proof of deemed export supplies by the registered person to EOU.
.
v. EoU shall maintain records of deemed export supplies: The recipient EOU shall maintain records of
such deemed export supplies in digital form [Form_B to be maintained by EOU/ for the receipt, use and
removal of goods received under deemed export benefit]
.
vi. Duty exemption Notification conditions are to be complied additionally: The above procedure
and safeguards are in addition to the terms and conditions to be adhered to by a EOU / EHTP / STP /
BTP unit in terms of the Foreign Trade Policy, 2015-20 and the duty exemption notification being availed
by such unit.
39
REFUND
The officers appointed under the SGST/UTGST Act, 2017 who are authorized for the purposes of refund
shall act as proper officers even under the CGST Act 2017.
• This is subject to specific sub-rules of Rule 96 of the CGST Rules, 2017 wherein the refund is granted in case
of export of goods on payment of tax. (i.e., IGST paid on exports – refund shall be granted by Customs Officer)
• This has been specified as per N/N 39/2017-CT dated 13th October 2017 and N/N 11/2017-IT dated
13th October 2017 as modified by N/N1/2018-IT dated 23rd January 2018 and N/N10/2018-CT
dated 23rd January 2018.
Manual Claim allowed for time being: Rule 97-A of CGST Rules
• In case refund claim is filed manually, then refund application is required to be filed in Form GST RFD-01A.
• In manual process also, application is required to be prepared online. ARN will be generated. Applicant is then required to
submit the Form GST RFD-01A alongwith the relevant documents and a copy of ARN generated in the jurisdictional department.
Modalities/Records in respect of manual refund claims
• The Circular no.17/17/2017-GST dated 15.11.2017 read with Circular no. 24/24/2017-GST dated 21.12.2017 lays down
the modalities for maintenance of records in respect of such manual refund claims. The time limits laid down in the Act
need to be followed and the prescribed forms need to be generated manually for processing of such refund claims
.
… any other person or class of persons, as notified under section 55, (CSD – Canteen Stores Department)
.
entitled to a refund of tax paid by it on inward supplies of goods or services or both,
.
40
… may make an application for such refund,
… in such form and manner as may be prescribed*, (* Rule 95 of CGST Rules, 2017)
… before the expiry of six months from the last day of the quarter in which such supply
was received.
.
N/N 20/2018-CT (dated 28th March, 2018): Due dates for filing refund application extended for entities covered by Sec 55
Since the facility of claiming refund on the common portal has been made available only recently, exercising
powers conferred by Sec 148 of CGST Act, CG, on recommendation of GST Council, has notified special
procedures for filing refund claim by entities covered by Sec 55 as the class of persons who shall make an
application for refund of tax paid by it on inward supplies, to the jurisdictional tax authority, in such form and
manner as specified, before the expiry of 18 months from the last date of the quarter in which such supply
was received.
… along with a statement of the inward supplies of goods or services or both in FORM GSTR-
11, prepared on the basis of the statement of the outward supplies furnished by the
corresponding suppliers in FORM GSTR-1.
(2) An acknowledgement for the receipt of the application for refund shall be issued in FORM GST RFD-02.
.
(3) The refund of tax paid by the applicant shall be available if-
(a) the inward supplies of goods or services or both were received from a registered person
against a tax invoice and the price of the supply covered under a single tax invoice exceeds
five thousand rupees, excluding tax paid, if any;
.
Crux of Amendment:: Refund will be available even if invoice value is upto Rs 5,000
.
(b) name and UIN of the applicant is mentioned in the tax invoice; and
.
(c) such other restrictions or conditions as may be specified in the notification are satisfied. (*nothing
specified presently)
(4) The provisions of rule 92 (*i.e, order sanctioning refund) shall, mutatis mutandis, apply for the sanction and payment
of refund.
.
(5) Where an express provision in a treaty or other international agreement, to which the President or the Government of
India is a party, is inconsistent with the provisions of this Chapter,
… such treaty or international agreement shall prevail.
41
4. Refunds due to exports: Refund of IGST paid on exports
Sec 16(3)(b) grants right of claiming refund of IGST paid on export.
• Procedure for claiming refund: As specified in Section 54
• Submission of application: Rule 96 – Shipping Bill / Bill of Export = Deemed Refund Application
• Documentation:
o Exporter of goods: Tax Invoices + Shipping Bills/ Bill of Export
.
Rule 96 : Refund of integrated tax paid on GOODS or SERVICES exported out of India.
Exporter of Goods:
(1) Exporter of Goods: [Shipping Bill / Bill of export = Deemed RA]:
• Deemed filing when of refund application when ‘Bill of Lading’ and ‘GSTR-3 / 3B’ is filed
<.
Exporter of Goods & Services: [inserted in 2018 – w.e.f. 23rd Oct, 2017]
(10) The persons claiming refund of IGST paid on exports of goods or services should not have
received supplies on which the supplier has availed the benefit of
… notification No. 40/2017-CT (Rate) (supplies under ‘Deemed Export’)) or
Rule 96 (10) of the CGST Rules seeks to prevent an exporter, who is receiving goods from
suppliers availing the benefit of certain specified notifications under which they supply goods
without payment of tax or at reduced rate of tax, from exporting goods under payment of
integrated tax. This is to ensure that the exporter does not utilise the input tax credit availed
on other domestic supplies received for making the payment of integrated tax on export of
goods.
However, the said restriction is not applicable to an exporter who has procured goods from
suppliers without availing benefit of any of the above notifications.
.
42
5. Refunds due to exports: Refund of ITC availed on inputs/ inputs services used in exports
Sec 16(3)(a) grants right of claiming refund of ITC related to export.
• Procedure for claiming refund: As specified in Section 54
• Submission of application: Rule 89 - Refund Application = GST RFD 01
• Documentation:
o Exporter of Services: Tax Invoices + Bank Realization certificate
Rule 89 : Application for refund of tax, interest, penalty, fees or any other amount.
(4) In the case of zero-rated supply of goods or services or both without payment of tax under bond
or letter of undertaking in accordance with the provisions of Sec 16(3) of the IGST Act, 2017,
.
Particulars Amount
ITC availed on receipt of input and input services XXX
Less : ITC availed for which refund is claimed u/Rule 89 (4A) : XXX
Less : ITC availed for which refund is claimed u/Rule 89 (4B) : (XXX)
Net ITC XXX
(C) “Turnover of zero-rated supply of goods” means the value of zero-rated supply of
goods made during the relevant period without payment of tax under bond or LuT;
“Turnover of zero-rated supply of goods” means the value of zero-rated supply of
goods made during the relevant period without payment of tax under bond or LuT,
other than the turnover of supplies in respect of which refund is claimed under sub-rules
(4a) or (4B) or both;
Particulars Amount
Zero-rated supply of goods made without payment of tax under bond or LuT XXX
Less : TO of supply of goods for which refund is claimed u/Rule 89 (4A): XXX
Less : TO of supply of goods for which refund is claimed u/Rule 89 (4B): (XXX)
Turnover of zero-rated supply of goods XXX
(D) “Turnover of zero-rated supply or services” means the value of zero-rated supply of
services made without payment of tax under bond or LuT, calculated in the following
manner, namely :—
Aggregate of the payments received during the relevant XXX
period for zero-rated supply of services
Add : Zero-rated supply of services where supply has been completed XXX
for which payment had been received in advance in any period
prior to the relevant period.
Less : Advances received for zero-rated supply of services for which (XXX)
the supply of services has not been completed during the
relevant period.
Turnover of zero-rated supply of services XXX
(E) “Adjusted Total turnover” means the turnover in a State or a Union territory, as
defined under clause (112) of section 2, excluding the value of exempt supplies other than
zero-rated supplies, during the relevant period
“Adjusted Total turnover” means the turnover in a State or a Union territory, as
defined under clause (112) of section 2, excluding —
(a) the value of exempt supplies other than zero-rated supplies and
(b) the turnover of supplies in respect of which refund is claimed under sub rules
(4A) or (4B) or both, if any,
during the relevant period
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Particulars Amount
Turnover in a State or Union territory XXX
(includes all non-taxable, exempt, non-exempt supplies)
Less : Exempt supplies other than those which have been exported (XXXX)
Less : TO of supply of goods for which refund is claimed u/Rule 89 (4A): (XXXX)
Less : TO of supply of goods for which refund is claimed u/Rule 89 (4B): (XXXX)
“Adjusted Total turnover” XXXX
(F) “Relevant period” means the period for which the claim has been filed.
CBEC Clarification:
.
The terms ‘Net ITC’ and ‘turnover of zero rated supply of goods/services’ are used in the context of
the relevant period in rule 89(4) of CGST Rules.
In many scenarios, exports may not have been made in that period in which the inputs or input
services were received, and ITC has been availed. Similarly, there may be cases where exports
may have been made in a period, but no ITC has been availed in the said period. The above
referred rule, taking into account such scenarios, defines relevant period in the context of the
refund claim and does not link it to a tax period.
In this regard, it is hereby clarified that the exporter, at his option, may file refund claim for one
calendar month / quarter or by clubbing successive calendar months / quarters. The calendar
month(s) / quarter(s) for which refund claim has been filed, however, cannot spread across
different financial years.
.
(4A) Refund to exporter of goods who received supplies under ‘deemed export’ mechanism (without payment of GST)
.
In the case of supplies received on which the supplier has availed the benefit of
… notification No. 48/2017-CT (supplies under ‘Deemed Export’),
refund of
… ITC, availed in respect of other inputs or input services used in making zero-rated supply of goods or
services or both,
shall be granted-
.
(4B) Refund to merchant exporter where he receives the inward supply of goods without payment of GST / at concessional rate
In the case of supplies received on which the supplier has availed the benefit of
… notification No. 40/2017-CT (Rate) (Supply of goods at 0.1%) or
… notification No. 41/2017-IT (Rate) (Supply of goods at 0.1%) or
… notification number 78/2017-Customs (Import of goods without payment of IGST & Cess by EoU)
… or notification No. 79/2017-Customs (Import of goods without payment of IGST & Cess by Holder
of Advance Authorization and Holder of EPCG Authorization) or
.
… all of them,
refund of
… ITC, availed in respect of inputs received under the said notifications for export of goods and
… the ITC availed in respect of other inputs or input services to the extent used in making such
export of goods,
shall be granted.
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6. Refunds OF ITC due to INVERTED TAX STRUCTURE: Formula amended
Sec 54(3)(ii) grants right of claiming refund of ITC to a supplier having inverted tax structure under GST.
• Inverted tax structure = (Rate of tax on inputs) higher than (Rate of GST on outward supply of goods/service)
• Procedure for claiming refund: As specified in Section 54
• Submission of application: Rule 89 - Refund Application = GST RFD 01 (Formulae based refund)
• Documentation:
o Inputs: Purchase of inputs
o Outward Supply: Tax Invoices of outward supplies (goods/ services)
• Areas of amendment:
o Formulae for claiming refund has been amended: – Rule 89(5)
The formulae has been modified to cover unintended omission of services
The definition of Net ITC has been modified to exclude ITC of input services
Adjusted total turnover has been modified to exclude supplies on which refund is claimed due to
deemed export and export in respect of which inputs have been procured either without payment of
GST or upon payment of concessional GST
Rule 89 : Application for refund of tax, interest, penalty, fees or any other amount.
Refund of ITC arising out of zero-rated supplies made without payment of tax – Sec 54(3)(i)
(4) Zero-rated supply (whether exports or supply to SEZ): Refundable ITC to be computed as per formulae
(5) In the case of refund on account of inverted duty structure, refund of input tax credit shall be
granted as per the following formula-
Maximum Amount* Net x (Turnover of INVERTED rated supply of Goods)
Of Refund = ITC
Adjusted Total Turnover*
ADVANCE RULING
Payment of Fees (Fee of Rs 5,000 for filing application / Fees of Rs 10,000 for filing appeal): Online or manual
Though the application shall be filed manually till the advance ruling module is made available on the common portal,
the fee is required to be deposited online in terms of section 49 of the CGST Act.
How to make online payment? - the applicant has to fill his details using “Generate User ID for Advance Ruling”
under “User Services”. After entering the email id and mobile number, a OTP shall be sent to the email id. Upon
submission of OTP, Systems shall generate a temporary ID and send it to the declared email and mobile number
of the applicant.
.
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APPEALS AND REVISION
1. Appellate Authority (before whom first appeal is filed) has been appointed
Sec 107 provides for filing of appeal before Appeallate Authority.
CG has appointed Appellate Authority Vide N/N 55/2017-CT dated 15th November 2017
2. if adjudication order is passed by Addl/ Joint Commissioner – appeal lies before Commissioner
(Appeals)
Delivering success, not lectures
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