Adjustment/Fun

ds Transfer
between Centre
and States
Credit of CGST paid on inputs may be used only for paying
CGST on the output and the credit of SGST/UTGST paid on
inputs may be used only for paying SGST/UTGST. In other
words, the two streams of input tax credit (ITC) cannot be
cross utilized, except in specified circumstances of inter-
State supplies for payment of IGST. The credit would be
permitted to be utilized in the following manner(Section
49(5):
a) ITC of CGST allowed for payment of CGST & IGST in that
order;
b) ITC of SGST allowed for payment of SGST & IGST in that
order;
c) ITC of UTGST allowed for payment of UTGST & IGST in
that order;
d) ITC of IGST allowed for payment of IGST, CGST &
SGST/UTGST in that order.
ITC of CGST cannot be used for payment of SGST/UTGST
and vice versa.
Accounts would be settled periodically
between the Centre and the State to ensure
that the credit of SGST used for payment of
IGST is transferred by the originating State to
the Centre. Similarly the IGST used for
payment of SGST would be transferred by
Centre to the destination State. Further the
SGST portion of IGST collected on B2C
supplies would also be transferred by Centre
to the destination State. The transfer of funds
would be carried out on the basis of
information contained in the returns filed by
the taxpayers.
Transfer Of Input Tax Credit
As per Section 53 of the CGST Act 2017- on utilisation
of input tax credit availed under this Act for payment
of tax dues under the Integrated Goods and Services
Tax Act in accordance with the provisions of sub-
section (5) of section 49, as reflected in the valid
return furnished under sub-section (1) of section 39,
the amount collected as central tax shall stand
reduced by an amount equal to such credit so utilised
and the Central Government shall transfer an amount
equal to the amount so reduced from the central tax
account to the integrated tax account in such manner
and within such time as may be prescribed.
Transfer of input tax credit.(similar to
CGST act word by word)
As per Section 53 Of Delhi SGST Act,2017- on
utilisation of input tax credit availed under this Act for
payment of tax dues under the Integrated Goods and
Services Tax Act in accordance with the provisions of
sub-section (5) of section 49, as reflected in the valid
return furnished under sub-section (1) of section 39,
the amount collected as State tax shall stand reduced
by an amount equal to such credit so utilised and the
State Government shall transfer an amount equal to
the amount so reduced from the State tax account to
the integrated tax account in such manner and within
such time as may be prescribed.
Transfer of input tax credit.(See
similarity)
As per Section 18 of IGST Act,2017- on utilisation of
credit of integrated tax availed under this Act for
payment of –– (a) central tax in accordance with the
provisions of sub-section (5) of section 49 of the Central
Goods and Services Tax Act, the amount collected as
integrated tax shall stand reduced by an amount equal to
the credit so utilised and the Central Government shall
transfer an amount equal to the amount so reduced from
the integrated tax account to the central tax account in
such manner and within such time as may be prescribed;
-similar provision for UTGST,
-similar provision for SGST
As per Concept Paper issued by CBEC(www.cbec.gov.in)
on its website its mentioned that Accounts would be
settled periodically between the Centre and the State
to ensure that the credit of SGST used for payment of
IGST is transferred by the originating State to the
Centre. Similarly the IGST used for payment of SGST
would be transferred by Centre to the destination State.
Further the SGST portion of IGST collected on B2C
supplies would also be transferred by Centre to the
destination State. The transfer of funds would be
carried out on the basis of information contained in the
returns filed by the taxpayers.
Location of Supplier
Broadly, it is the registered place of business or
the fixed establishment of the supplier from
where the supply is made. Sometimes, a service
provider has to go to a client location for
providing service. However, such place would not
be considered as the location of the supplier. It
has to be either a regular place of business or a
fixed establishment, which is having sufficient
degree of permanence and suitable structure in
terms of human and technical resources.
Place of supply
Places of supply provisions have been framed for goods
and services, keeping in mind the
destination/consumption principle. In other words, the
place of supply is based on the place of consumption of
goods or services. As goods are tangible, the
determination of their place of supply, based on the
consumption principle, is not difficult. Generally, the
place of delivery of goods becomes the place of supply.
However, the services being intangible in nature, it is
not easy to determine the exact place where services
are acquired, enjoyed and consumed. In respect of
certain categories of services, the place of supply is
determined with reference to a proxy.
A distinction has been made
between B2B (Business to
Business) & B2C (Business to
Consumer) transactions, as B2B
transactions are wash transactions
since the ITC is availed by the
registered person (recipient) and
no real revenue accrues to the
Government.
Separate provisions for the supply
of goods and services have been
made for the determination of
their place of supply. Separate
provisions for the determination of
the place of supply in respect of
domestic supplies and cross border
supplies have been framed.