GST Book

GST Law & Analysis
with Conceptual Procedures
BIMAL JAIN
ISHA BANSAL
YOUNG GLOBAL’SYOUNG GLOBAL
YOUNG GLOBAL’S
YOUNG GLOBAL
Highlights of the Book
• Detailed commentary on Model GST Law with illustrations, diagrams
and flowcharts.
• Discussion on various domains viz. inter-state/intra-state supply of
goods and/or services, principles of place of supply & time of supply,
exclusion and exemptions in GST, exports & imports under GST,
determination of Revenue Neutral Rate (RNR) etc. in a pragmatic
manner through illustrations for easy digest
• DVD containing:
 PPT on Model GST Law, 2016
 Video presentation on highlights of Model GST Law, supply,
taxable person, time of supply, place of supply etc.
 Appendices on Model GST Law, 2016, Constitution (101st
)
Amendment Act, 2016, GST Draft Rules & Formats on registration,
invoice, payment, returns and refunds, FAQs released by CBEC etc.
ABOUT THE BOOK
This edition of GST book extensively covers in-depth analyses of Model CGST/SGST and
IGST Act, 2016 and the Draft Business Processes released by the Government of India.
This edition comprehensively discusses all the key GST provisions along with impact,
preparations required for GST and challenges ahead, providing an insight to the readers
for assisting in smooth transition to GST.
KEY FEATURES OF THE BOOK
l Detailed commentary on Model GST Law to encapsulate the provisions for easy
digest
l Overview of present indirect taxes-shortcomings, cascading and double taxes
l GST-need and necessity, what it is, how it works, etc., alongwith discussion on
challenges ahead
l Detailed discussion on meaning and scope of the term ‘supply’ alongwith the
discussion on likely issues
l Detailed discussion on meaning of taxable persons, liability to be registered, exclusion
and compulsory registration
l Discussion on various domains viz. inter-state/intra-state supply of goods and/or
services, principles of place of supply & time of supply, exclusion and exemptions in
GST, exports & imports under GST, determination of Revenue Neutral Rate (RNR)
etc. in a pragmatic manner through illustrations for easy digest
l Discussion on flow of input tax credit in GST with multiple illustrations
l Business processes and procedural aspects of GST-registration, return, payment,
refund, demand & recovery, adjudication, appeals, etc., alongwith key suggestions
l Journal entries for various scenarios in GST to provide clarity from accounting
perspective
l Transitional issues and impact of GST on manufacturer, trader, service sector and
specifically on various sectors viz. alcohol, real estate, automobiles, telecom, FMCG,
insurance, e-commerce etc.
l Section-by-section analyses of the Constitution (101st
Amendment) Act, 2016 and its
comparison with the 122nd
Constitutional Amendment Bill, 2014
l Journey of GST including important milestones with way forward for GST
l Comprehensive FAQs to provide conceptual clarity on various aspects of GST in
easy and understandable way
l Appendices on Model GST Law, 2016, Constitution (101st
Amendment) Act, 2016,
GST Draft Rules & Formats on registration, invoice, payment, returns and refunds,
FAQs released by CBEC etc.
l DVD containing PPT on Model GST Law, video presentation on Highlights of Model
GST Law, supply, taxable person, time of supply, place of supply, valuation, GST
credit, impact on service sector etc.
October, 2016
Published by
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withConceptualProcedures
BIMAL JAIN
ISHA BANSAL
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GST Law and Analysis
Bimal Jain
FCA, FCS, LLB, B.Com (Hons.)
Isha Bansal
ACS, LLB, B.Com (Hons.)
An Insight into
Goods & Service Tax
CA. Chitresh Gupta
B. Com (H), FCA,
IFRS (Certified), IDT (Certified)
®
WWW.BOOKSKHOJ.COM

vii
BIMAL JAIN
FCA, FCS, LLB, B.Com (Hons.) with 21
years of experience in Indirect Taxation
– GST, Service tax, Excise, Customs, VAT/
CST, Foreign Trade Policy, DGFT matters,
etc.
BimalJain,qualifiedasaCharteredAccountantin
May 1994, and Company Secretary in December
2006 and LLB in December, 2009. He has worked in renowned companies
viz. LG Electronics India Pvt. Ltd, Honda Motorcycle & Scooters India Pvt. Ltd,
Hindustan Development Corporation Ltd, Khaitan & Company. Currently, he is
the Chief Executive Director of A2Z Taxcorp LLP.
Bimal is a Chairman of the Indirect Tax Committee of PHD Chamber of
Commerce, Chairman of the Corporate Advisory Committee of IPEM Group of
Institutions, Member of Indirect Tax Committee of FICCI & Assocham, Special
Invitee of Indirect Tax Committee of ICAI, and Member of eminent faculties in
Indirect tax committee of ICAI/ ICSI/ ICMA.
He is awarded as Best Participant Award in MSOP – 117th
Batch by ICSI, Business
Leader Award by Amity School Noida, Best Speaker Award by NIRC – ICAI/ ICMA
and Young Achievers Award at Igniting Minds, 2015.
He regularly writes articles on multiple indirect tax issues and has authored
books, namely, Service Tax Voluntary Compliance Encouragement Scheme,
About the Authors

viii GST Law and Analysis - with Conceptual Procedures
2013 and another GST book titling ‘Goods and Services Tax – Introduction and
Way Forward’.
He has also represented PHD Chamber of Commerce, Assocham, ICAI, ICSI
before various Government Authorities/Committees viz. the Central Board of
Excise and Customs, Ease of doing Business Committee, Empowered Committee
of State Finance Ministers, etc.
Bimal’scorecompetencyandareaofexpertiseareindirecttaxation, international
and corporate taxation. He specializes in all aspects of GST, Excise, Service tax,
Customs, Sales tax/VAT laws, Free trade/economic cooperation agreements,
anti-dumping duty, foreign trade policy, etc.
He carries a blend of industrial and professional acumen, knowledge and
experience in carrying out diagnostic review of business operations, opinion
& advisory services, process review, structuring of various business models,
litigation services at all appropriate forums including Commissioner(Appeals),
CESTAT, High Court and representation made before the TRU/ CBEC/ DGFT, etc.,
for various matters concerning trade, industry and commerce.
ISHA BANSAL
ACS, LLB, B.Com (Hons.) with more than 5 years of
experience in indirect taxation matters
Isha, qualified as a Company Secretary and LLB, after
obtaining a Bachelor’s degree in Commerce (Hons.) from
University of Delhi in 2008. She worked as an intern with
DLF group looking after company secretarial and legal
matters before moving to indirect taxation for which she
had interest and flair.
Thereafter, she joined A2Z Taxcorp LLP and is presently working as Senior
Associate, providing legal and advisory services to various multinational
companies in the areas of GST, Excise, Customs, VAT, Service tax, anti-dumping
duty, foreign trade policy, etc. Her in-depth knowledge, drive and strategic
insights have contributed immensely to the organizations she has worked with.
Isha has done extensive study on GST in India and has been following all the
developments in the rollout of GST by the Indian Government. GST is therefore
one of her core competency areas along with other indirect tax laws.

xlv
The DVD attached with the Book contains the following:
1. Comprehensive PPT on Model GST Law, 2016
2. Video Presentations on various aspects of Model GST Law and its impact:
• Goods and Services Tax (GST) - Need and Necessity
• Overview of Dual GST Model in India
• Highlights of Draft GST Law, 2016
• Presentation on Draft GST Law - Levy, Taxable Event- Supply, Taxable
Person, Composition Scheme
• GST Impact & Preparedness for Service Sector
3. GST Draft Rules and formats relating to registration, invoice and payments,
released by CBEC on September 26, 2016:
• Draft Registration Rules
• Draft Registration Formats
• Draft Payment Rules
• Draft Payment Formats
• Draft Invoice Rules
• Draft Invoice Formats
4. GST Draft Rules and formats relating to returns and refunds, released by
CBEC on September 27, 2016:
• Draft Return Rules
• Draft Return Formats
DVD Contains
DVD FREE WITH BOOK

xlvi GST Law and Analysis - with Conceptual Procedures
 GSTR 9B
 ITC Mismatch Report
• Draft Refund Rules
• Draft Refund Formats
5. The Constitution (101st
Amendment) Act, 2016
6. Decoding of the Constitution (101st
Amendment) Act, 2016 – Section by
section analyses and comparison with 122nd
Constitutional Amendment Bill,
2014
7. Model CGST/SGST and IGST Act, 2016 along with Schedules and GST
Valuation Rules
8. Draft Business Processes Report on registration, payment, returns and
refund, placed on public domain in the month of October, 2015
9. 122nd
Constitutional Amendment Bill, 2014, as introduced in Lok Sabha
10. Select Committee Report on 122nd
Constitutional Amendment Bill, 2014
11. 122nd
Constitutional Amendment Bill, 2014, as reported by the Select
Committee of Rajya Sabha
12. Key Amendments in the 122nd
Constitutional Amendment Bill, 2014 by
Rajya Sabha
13. Report on the Revenue Neutral Rate by CEA Dr. Arvind Subramanian led
Panel
14. FAQs on GST released by CBEC on August 3, 2016 and September 21, 2016
15. GSTN ‘GST Eco-System & GST Suvidha Provider (GSP)’ Report
16. CBEC Presentation on GST and Background material for GST

xiii
About the Authors vii
Preface ix
DVD Contains xlv
GST – Great Step to Transformation xlvii
CHAPTER 1 Overview of Present Indirect Taxation in India -
Shortcomings, Cascading and Double Taxes 1
CHAPTER 2 Overview Need of GST - How GST can
Solve Present Shortcomings 22
CHAPTER 3 Taxes to be subsumed in GST 35
CHAPTER 4 Administration of GST 41
CHAPTER 5 Intra-State Supply of Goods and/or Services 47
CHAPTER 6 Inter-State Supply of Goods and/or Services 63
CHAPTER 7 Taxable event under GST – Meaning and scope of supply 82
CHAPTER 8 Taxable Person under GST and Reverse Charge Mechanism 153
CHAPTER 9 Composition Levy under GST 184
CHAPTER 10 Exclusions and Exemptions under GST 190
CHAPTER 11 Input Tax Credit under GST – Availment and Utilisation 238
CHAPTER 12 Valuation under GST 279
CHAPTER 13 Exports and Imports under GST 305
CHAPTER 14 Place of Supply of Goods and/or Services in GST 316
Content at a Glance
WWW.BOOKSKHOJ.COM

xiv GST Law and Analysis - with Conceptual Procedures
CHAPTER 15 Time of Supply (Point of Taxation) of Goods and/or
Services in GST 361
CHAPTER 16 Registration under GST 391
CHAPTER 17 Payment of Tax under GST 435
CHAPTER 18 Returns under GST 472
CHAPTER 19 Refunds in GST 523
CHAPTER 20 Tax Invoice, Credit and Debit Notes 566
CHAPTER 21 Accounts, Records and Presumption as to Documents 579
CHAPTER 22 Journal Entries under GST 594
CHAPTER 23 Assessments and Audit 634
CHAPTER 24 Demands and Recovery 656
CHAPTER 25 Inspection, Search, Seizure and Arrest 701
CHAPTER 26 Offences, Penalties, Prosecution and Compounding 716
CHAPTER 27 Appeals and Revision 746
CHAPTER 28 Advance Ruling and Settlement of Cases 780
CHAPTER 29 Transitional Provisions in GST 808
CHAPTER 30 Classification, Rates and Miscellaneous provisions 866
CHAPTER 31 Robust Information Technology Infrastructure and GST 903
CHAPTER 32 Impact of GST in General and on Various Sectors 927
CHAPTER 33 Electronic Commerce 974
CHAPTER 34 Job Work 990
CHAPTER 35 Journey of GST in India 1002
CHAPTER 36 Decoding of the Constitution (101st Amendment)
Act, 2016 1010
CHAPTER 37 Preparation for GST and challenges ahead 1015
CHAPTER 38 FAQs on GST 1024
CHAPTER 39 Commentary on Model GST Law 1135

xv
About the Authors vii
Preface ix
DVD Contains li
GST – Great Step to Transformation liii
CHAPTER 1 Overview of Present Indirect Taxation in
India - Shortcomings, Cascading and Double Taxes
1.1 TAXATION – MEANING AND PURPOSE 1
1.2 PRESENT INDIRECT TAXATION IN INDIA –
A HYBRID STRUCTURE 2
1.3 SHORTCOMINGS IN PRESENT INDIRECT TAX STRUCTURE –
TRIGGERING THE NEED FOR TAX REFORM 16
1.3.1 Intense cascading of taxes – One of the major
shortcomings of present indirect taxation system 17
Non-availability of credit of excise duty for VAT 17
Non-availability of credit of service tax for VAT 18
No credit of CST 18
No credit of basic customs duty and customs cess 18
No credit of VAT to service providers 18
No credit of SBC to manufacturers and service providers 18
No cenvat credit of Krishi Kalyan cess to manufacturers 19
No credit to exempt sectors 19
1.3.2 Encroachment on each other’s territory by the centre
and the state ending up in double taxation 19
Detailed Content

xvi GST Law and Analysis - with Conceptual Procedures
1.3.3 Interpretational and conceptual mist: classification and
valuation issues 19
1.3.4 Lack of uniformity in the provisions and rates 20
1.3.5 Administrational difficulties 20
1.3.6 Hindrances in international competitiveness 20
CHAPTER 2 Overview Need of GST - How GST can
Solve Present Shortcomings
2.1 WHAT IS GST? 23
2.2 VARIOUS MODELS OF GST 23
2.2.1 Single GST 24
A. National GST 24
B. State GST 25
2.2.2 Dual GST 25
A. Non-concurrent Dual GST 25
B. Concurrent Dual GST 26
2.2.3 Quebec model 27
2.3 GST MODEL FOR INDIA – CONCURRENT DUAL GST 27
2.3.1 Modus-Operandi of Dual GST Model 27
2.4 HOW GST CAN HELP IN OVERCOMING THE SHORTFALLS
IN OUR PRESENT INDIRECT TAXATION STRUCTURE 29
2.4.1 Harmonization of taxation powers under GST -
abolition of multiple layers of taxes 29
2.4.2 Avoidance of double taxation 30
2.4.3 Minimal tax cascading and smooth input tax credit chain 31
2.4.4 Reduced complexity - common classification under
legislation 32
2.4.5 Development of common national market 32
2.4.6 Uniform compliance at low cost 33
2.4.7 Less complexities: a simple, transparent and easy
tax structure 33
2.4.8 Increase in global competitiveness and employment
opportunities 33
2.4.9 Boost to the government and economy 33
CHAPTER 3 Taxes to be subsumed in GST
3.1 PRINCIPLES OF SUBSUMATION OF VARIOUS TAXES 35
3.2 TAXES LIKELY TO BE SUBSUMED/NOT TO BE SUBSUMED
IN TERMS OF THE CONSTITUTION (101ST
AMENDMENT)
ACT, 2016 36
3.3 RELEVANT PROVISIONS FOR TAX SUBSUMATION AS PER
THE CONSTITUTIONAL AMENDMENT ACT 37
3.3.1 Relevant Articles of the Constitution 38

Detailed Content xvii
3.3.2 Union List under seventh schedule 38
3.3.3 State List under seventh schedule 39
CHAPTER 4 Administration of GST
4.1 INTRODUCTION 41
4.2 ADMINISTRATION UNDER CGST AND IGST 41
4.3 ADMINISTRATION UNDER SGST 42
4.4 APPOINTMENT OF OFFICERS UNDER CGST/IGST AND SGST 43
4.5 POWER OF OFFICERS UNDER CGST/IGST AND SGST 44
ANALYSIS 45
CHAPTER 5 Intra-State Supply of Goods and/or Services
5.1 PRESENT INDIRECT TAX STRUCTURE 47
5.1.1 Intra-state transactions related to goods under the
present scenario 48
5.1.2 Intra-state transactions related to services 49
5.2 INTRA-STATE SUPPLY OF GOODS AND/OR SERVICES
UNDER THE GST 50
5.2.1 Levy and collection of CGST/SGST - taxation of intra-state
supply of goods and/ or services under the GST regime 51
5.2.2 Availment and utilization of input tax credit of CGST
and SGST 53
5.2.3 Advantages of the proposed GST model for intra-
state supplies 55
5.3 PRESENT STRUCTURE VIS-À-VIS GST STRUCTURE FOR
INTRA-STATE SUPPLIES OF GOODS 55
5.3.1 Taxation under the present indirect tax structure 55
5.3.2 Taxation under the GST regime 57
5.4 PRESENT STRUCTURE VIS-À-VIS GST FOR INTRA-STATE
SUPPLIES OF SERVICES 59
5.4.2 Taxation under GST regime 61
CHAPTER 6 Inter-State Supply of Goods and/or Services
6.1 INTRODUCTION 63
6.2 PRESENT INDIRECT TAX STRUCTURE 64
6.2.1 Concept and taxation of sale/purchase of goods for
the inter-state transactions 64
6.2.2 Concept and taxation of rendering of services in case
of inter-state transactions 68
6.3 INTER-STATE SUPPLY OF GOODS AND/OR SERVICES UNDER GST 69
6.3.1 Levy and collection of IGST - IGST model for taxing
inter-state supply of goods and/or services 70

xviii GST Law and Analysis - with Conceptual Procedures
6.3.2 Scope of the IGST model 71
How to determine whether a supply is inter-state in nature? 71
6.3.3 How to set-off input tax credit 72
6.3.4 Advantages of the IGST model 73
6.4 IMPORTANT HIGHLIGHTS OF INTER-STATE TRANSACTIONS
UNDER THE CONSTITUTION (101ST
) AMENDMENT ACT, 2016 74
6.5 PRACTICAL ILLUSTRATION 75
6.5.2 Taxation under GST regime 77
CHAPTER 7 Taxable event under GST – Meaning and scope of supply
7.1 TAXABLE EVENT UNDER THE PRESENT INDIRECT
TAX STRUCTURE 82
7.2 “SUPPLY” – THE TAXABLE EVENT UNDER GST REGIME 84
7.3 MEANING AND SCOPE OF THE TERM ‘SUPPLY’ – SECTION 3 84
7.3.1 Inclusive definition of term ‘supply’ 86
7.3.2 Normal supply of goods and/or services: Section 3(1)(a) 87
I. All forms of supply 88
II. Made or agreed to be made for a ‘consideration’ 91
III. By a person 94
IV. In the course or furtherance of ‘business’ 97
Profession and Vocation – New terms included in the
definition of term ‘business’ 98
Scope of the term ‘in the course or furtherance of......’ 99
7.3.3 Import of service: Section 3(1)(b) 100
No GST on importation of services for personal use up
to specified amount 100
GST on importation of services in the course or furtherance
of business irrespective of any threshold amount 101
Conditions to be satisfied to qualify as ‘import of service’ 101
7.3.4 Supply without consideration: Section 3(1)(c) 102
7.3.5 Supply of goods v/s supply of services: Section 3(2) 107
Double taxation under present regime 107
A prominent ray of hope under GST 108
Meaning of ‘goods’ under GST 108
Meaning of ‘services’ under GST 109
Actionable claim is a service and liable to GST –
New taxability on the chart 112
Unsecured debt transferred to a third person for a
consideration is a service under GST 113
Beneficial interest in moveable property 113
Assignment of actionable claim - is it not a transaction
in money? 114

Detailed Content xix
7.3.6 Matters to be treated as supply of ‘goods’ or ‘services’ 114
7.3.7 Principal – Agent transaction under GST: Section 3(2A) 139
Agent liable to GST only when goods and/or services are
received/supplied on behalf of principal 139
7.3.8 Power(s) of central/state government to specify nature
of supply to be treated as supply of goods or services:
Section 3(3) 140
7.3.9 Branded services by an aggregator: Section 3(4) 140
7.3.10 Even self-supply to constitute supply under GST–
Analysis on branch/stock transfers 142
Concept of branch/stock transfers 142
Taxation of branch/stock transfers in the present regime 143
Taxation of branch/stock transfers under GST 144
ANNEXURE I- RELEVANT EXTRACT OF THE EDUCATION GUIDE ON
CONSTRUCTION SERVICES 148
CHAPTER 8 Taxable Person under GST and
Reverse Charge Mechanism
8.1 DEFINITION OF ‘TAXABLE PERSON’ UNDER GST 153
8.2 PERSONS REQUIRED TO BE REGISTERED UNDER GST –
SCHEDULE III TO THE MODEL CGST/SGST ACT 157
8.2.1 Agriculturist out of GST net - not a taxable person 163
8.3 THRESHOLD EXEMPTION LIMITS TO CHARGE PAY GST 165
8.4 CENTRAL GOVERNMENT, STATE GOVERNMENT(S) AND
LOCAL AUTHORITY ARE TAXABLE PERSON 168
8.5 PERSONS WHO SHALL NOT BE CONSIDERED AS
TAXABLE PERSONS 174
8.6 REVERSE CHARGE MECHANISM UNDER GST 177
CHAPTER 9 Composition Levy under GST
9.1 COMPOSITION LEVY UNDER PRESENT INDIRECT
TAX STRUCTURE 184
9.2 COMPOSITION LEVY UNDER GST 185
9.2.1 Turnover limit for composition scheme – Section 8 of
the Model CGST/SGST Act 185
Composition scheme to be adopted uniformly by all the
registered taxable persons, having the same PAN 186
No composition scheme in case of reverse charge liability 186
No composition scheme for effecting inter-state transactions 187
No composition scheme for casual dealers 187
9.2.2 Compounding dealers cannot enter into the credit chain 187
9.2.3 Equivalent penalty in case of irregular availment of
composition scheme 187

xx GST Law and Analysis - with Conceptual Procedures
CHAPTER 10 Exclusions and Exemptions under GST
10.1 EXCLUSIONS UNDER GST AND TREATMENT OF SPECIFIC GOODS190
10.1.1 Relevant provisions pertaining to the treatment of specific
goods under the Constitutional Amendment Act 191
10.1.2 Chief Economic Adviser led Panel on Revenue
Neutral Rate bats for wider tax base under GST 193
10.1.3 Excerpts of various Discussions on Exclusion of
Products and Treatment of Specific Products 194
10.1.4 Negative list of services 196
10.2 EXEMPTIONS UNDER GST 198
10.2.1 Meaning of exemptions 199
10.2.2 Exemptions under the GST regime—high degree of
precision required while determining exemptions 199
10.2.3 Zero rating v Exemption 199
10.2.4 CEA led Panel on RNR bats for lower exemptions under GST 201
10.3 TYPES OF EXEMPTIONS – BROAD OVERVIEW 202
10.3.1 Threshold exemption limits under GST 203
10.3.2 Goods/service specific exemption- Power to grant
exemption from tax under GST 203
General exemptions in public interest by way of notification 204
Absolute exemptions are mandatory to be availed 206
Exemption in exceptional circumstances by way
of special order 207
Explanation inserted within 1 year to have
retrospective effect 208
Effective date of notification/order 208
10.3.3 Specified supplier’s exemption 209
Small scale suppliers 209
Deemed non-taxable person 209
Governmental and public sector bodies 209
10.3.4 Area based exemptions 210
10.4 REMISSION OF TAX ON SUPPLIES FOUND DEFICIENT
IN QUANTITY 213
ANNEXURE - I: VARIOUS SUGGESTIONS/RECOMMENDATIONS
MADE SO FAR ON GOODS/SERVICES SPECIFIC EXEMPTIONS 215
ANNEXURE - II: EXEMPTIONS AVAILABLE UNDER THE EUROPEAN
UNION COUNCIL DIRECTIVE 222
CHAPTER 11 Input Tax Credit under GST –
Availment and Utilisation
11.1 MEANING OF INPUT TAX CREDIT AND INPUT TAX 239
ITC allowed to every taxable person irrespective of a
manufacturer/service provider/ seller 240

Detailed Content xxi
‘Business’ concept for availing ITC brought in GST 240
ITC available on CGST SGST on intra-state transactions and
IGST on inter-state transactions 240
11.2 MEANING OF ‘INPUT’ UNDER GST 241
11.3 MEANING OF ‘INPUT SERVICE’ UNDER GST 242
11.4 MEANING OF ‘CAPITAL GOODS’ UNDER GST 242
11.5 MANNER OF TAKING ITC AND UTILISATION THEREOF 245
11.5.1 General Provisions 245
Only registered taxable person can claim ITC 245
Conditions specified in sec 35 to be complied for
claiming ITC 246
Eligible amount of ITC shall be credited to electronic
credit ledger 246
Matching concept of inward supplies of buyer with
outward supplies of supplier 247
11.5.2 ITC on opening stock of inputs at the time of registration 247
11.5.3 ITC on opening stock of inputs in case of voluntary
registration249
11.5.4 ITC on opening stock of inputs on opting out of
composition scheme 250
11.5.5 ITC reversal on closing stock of inputs on switching
to composition scheme 251
11.5.6 ITC reversal on closing stock of inputs on goods and/or
services becoming absolutely exempt 251
11.5.7 Proportionate ITC to the extent used for business
purposes admissible when partly used for other purposes 252
11.5.8 ITC restricted to the extent of taxable supplies including
zero-rated supplies when partly used for non-taxable
supplies including exempt supplies 253
11.5.9 Transfer of ITC in case of sale, merger, demerger,
amalgamation etc. 254
11.5.10 Goods and services on which ITC shall not be admissible 255
11.5.11 ITC not allowed if depreciation claimed on tax component
of cost of capital goods 260
11.5.12 Removal of capital goods 260
11.5.13 Availing ITC under GST – essential requirements 262
11.5.14 Time limit for availing ITC under GST 263
11.5.15 Recovery of ITC wrongly taken 265
11.5.16 Distribution of ITC by input service distributor 265
11.5.17 Manner of recovery of credit distributed in excess 267
Distribution of excess credit than available - Recoverable
from ISD with interest 267

xxii GST Law and Analysis - with Conceptual Procedures
Excess distribution of credit to one or more supplier -
recoverable from such supplier with interest 268
11.5.18 Transfer of ITC 268
When CGST used for payment of IGST 268
When SGST used for payment of IGST 268
When IGST used for payment of CGST 268
When IGST used for payment of SGST 269
11.6 ILLUSTRATIONS TO UNDERSTAND AVAILMENT AND
UTILISATION OF INPUT TAX CREDIT IN GST 270
11.6.1 Input tax credit when input goods are supplied within state 270
11.6.2 Input tax credit when supplier supplies goods outside
the state 270
11.6.3 Input tax credit when supplier has credit of IGST and
supplies goods within the state 272
supplies goods outside the state 273
11.6.5 Input tax credit when input goods not fully utilized 274
11.6.6 Input tax credit when supplier supplies goods intra
and inter State 274
supplies goods within the State as well as outside State 276
11.6.8 Input tax credit when supplier supplies taxable
as well as exempted goods 277
11.6.9 Input tax credit when supplier supplies goods within
India and outside India 278
CHAPTER 12 Valuation under GST
12.1 VALUATION UNDER THE PRESENT REGIME OF
INDIRECT TAXATION 279
12.1.1 Valuation of goods under the present regime of
indirect taxation 280
12.1.2 Valuation of services under service tax 286
12.2 VALUATION UNDER THE GST REGIME 286
12.2.1 Consideration – Meaning, scope and importance 287
12.2.2 Glimpse of the provisions which deals with the valuation
under the Model GST Law 289
12.2.3 Basis of valuation under the GST regime –
Transaction Value 289
Inclusion in the transaction value 289
Exclusion from the transaction value 291
12.2.4 Valuation Rules – where transaction value is not
determinable291

Detailed Content xxiii
12.2.5 Method of determination of value 292
(A) Transaction Value Method [r 3 of the
Model GST Valuation Rules] 293
(B) Comparison Method [r 4 of the Model GST
Valuation Rules] 294
(C) Computed Value Method [r 5 of the Model
GST Valuation Rules] 294
(D) Residual Method [r 6 of the Model GST
Valuation Rules] 294
12.2.6 Rejection of declared value 295
12.3 VALUATION IN CERTAIN CASES 301
12.3.1 Pure agent 301
12.3.2 Money changer 303
CHAPTER 13 Exports and Imports under GST
13.1 EXPORTS OF GOODS AND/OR SERVICES UNDER GST 305
13.1.1 Meaning of ‘exports of goods’ and ‘export of services’
under GST 306
Export of goods 306
Export of services 306
13.1.2 Exports under GST to be zero-rated 307
13.1.3 Deemed exports and its treatment under GST 307
Recommendation for treatment of supply of goods and/
or services to/by SEZs 309
Recommendation for treatment of supply of goods and/
or services to/by EOUs 309
13.2 IMPORT OF GOODS AND/OR SERVICES UNDER GST 309
13.2.1 Meaning of ‘import of goods’ and ‘import of services’
under GST 310
13.2.2 Import of goods and/or services – to be treated as inter-
state supplies under GST 312
13.2.3 Service tax, CVD and SAD are likely to be subsumed
under GST 312
13.2.4 Duties on import of goods – Present regime v GST regime 312
13.2.5 No GST on importation of services for personal use only
up to specified amount 313
13.2.6 GST on importation of services in the course or furtherance
of business irrespective of any threshold amount 313
13.2.7 Reporting import transactions in monthly return 313
13.2.8 Major customs valuation principles adopted for goods
and/ or services under GST – a new mechanism for
service sector 313

xxiv GST Law and Analysis - with Conceptual Procedures
13.3 IMPACT ON FOREIGN TRADE POLICY (FTP) 313
Payment of taxes under GST by way of debit to export scrips
should be allowed 314
CHAPTER 14 Place of Supply of Goods and/or Services in GST
14.1 INTRODUCTION 316
14.2 GST - A DESTINATION BASED CONSUMPTION TAX:
DETERMINING PLACE OF CONSUMPTION IS CRUCIAL 317
14.2.1 Inter-state supply of goods: Present regime v GST regime 318
14.2.2 Import of goods: Present regime v GST regime 319
14.2.3 Inter-state supply of services: Present regime v
GST regime 319
14.3 DETERMINATION OF PLACE OF SUPPLY FOR GOODS AND/OR
SERVICES 321
14.3.1 Place of supply of goods – Section 5 of the Model IGST Act 321
Meaning of key terms 322
Place of supply when movement of goods is involved 323
Place of supply when goods are supplied by transfer of
documents during movement of goods 324
Place of supply when movement of goods is not involved 325
Place of supply when goods are assembled or installed at site 326
Place of supply when goods are supplied on board a
conveyance327
14.3.2 Place of supply of services – Section 6 of the Model
IGST Act 327
Meaning of key terms 328
General Rule of place of supply of services 334
Place of supply for immovable property related services
or lodging in boat or vessel 335
Place of supply of performance based services like
restaurant, beauty treatment, health services etc. 340
Place of supply of training and performance appraisal
services342
Place of supply in case of admission to events 344
Place of supply in case of organisation of events assigning
sponsorship of such events 345
Place of supply of goods transportation services 348
Place of supply of passenger transportation services 350
Place of supply of services on board a conveyance 353
Place of supply of telecommunication services including
data transfer, broadcasting, cable and DTH services 354
Place of supply of banking and other financial services 357
Place of supply of insurance services 358

Detailed Content xxv
Place of supply of advertisement services to the central
government, state government, a statutory body or a
local authority 358
CHAPTER 15 Time of Supply (Point of Taxation) of Goods
and/or Services in GST
15.2 CONCEPT OF TIME OF SUPPLY/POINT OF TAXATION 362
15.3 TIME OF SUPPLY FOR GOODS 367
15.3.1 Time of supply – general provision 368
15.3.2 Time of supply – continuous supply of goods 371
15.3.3 Time of supply of goods - when GST is payable by
recipient under the reverse charge mechanism (RCM) 372
15.3.4 Time of supply – where goods are being sent or taken
on approval or sale or return or similar terms 374
15.3.5 Time of supply of goods – when not possible to
determine under the above provisions 375
15.4 TIME OF SUPPLY FOR SERVICES 376
15.4.1 Time of supply of services – general provision 377
15.4.2 Time of supply – continuous supply of services 380
15.4.3 Time of supply - when GST is payable under RCM 383
15.4.4 Time of supply – where supply of services ceases under
a contract before the completion of the supply 385
15.4.5 Time of supply – When not possible to determine under
the above provisions 385
15.5 CHANGE IN THE RATE OF TAX IN RESPECT OF SUPPLY
OF SERVICES 386
15.5.1 Where taxable service provided before the change in
effective rate of tax 386
15.5.2 Where taxable service provided after the change in
effective rate of tax 387
15.6 TIME OF SUPPLY - WHEN NEW SERVICES BECOME TAXABLE 389
CHAPTER 16 Registration under GST
16.1 GLIMPSE OF PROVISIONS PERTAINING TO REGISTRATION
UNDER GST 392
16.2 REGISTRATION NUMBER/UNIQUE IDENTITY NUMBER 393
16.2.1 Multiple registrations within a state allowed subject to
specific stipulations 394
16.2.2 Exception where Unique Identity Number will be
granted instead of registration number 395
16.3 PERSONS WHO ARE REQUIRED TO GET REGISTERED 397
16.3.1 Classes of registration 399

xxvi GST Law and Analysis - with Conceptual Procedures
A. Supplier whose aggregate turnover exceeds threshold
limit399
B. Migration of existing taxpayers to GST 403
C. Transfer of business, whether on account of succession
or otherwise, to another person as a going concern 403
D. Transfer pursuant to sanction of a scheme or an
arrangement for amalgamation or, as the case may be,
de-merger of two or more companies by an order of
a High Court 403
E. Mandatory registration 403
F. Voluntary registration 406
G. Registration in case of enforcement cases 406
16.4 PLACE OF REGISTRATION 407
16.5 PROCEDURE FOR REGISTRATION 407
16.5.1 Registration procedures for new applicant 407
16.5.2 Summarization of procedure for registration 419
16.6 EFFECT OF REGISTRATION APPLICATION FILED WITHIN
30 DAYS OR OTHERWISE 420
16.7 WHERE PERSON FAILS TO OBTAIN REGISTRATION 421
16.8 PROCEDURES FOR GRANTING/REJECTING REGISTRATION
OR UIN 421
16.9 PROVISION FOR A PERSON OPTING FOR COMPOSITION
SCHEME 422
16.10 SPECIAL PROVISIONS RELATING TO CASUAL TAXABLE
PERSON AND NON-RESIDENT TAXABLE PERSON 424
16.11 FACILITATION CENTRE AND TAX RETURN PREPARER SCHEME 426
16.11.1 Tax return preparer 426
16.11.2 Facilitation Centres 427
16.12 AMENDMENT OF REGISTRATION 427
16.13 CANCELLATION OF REGISTRATION 429
16.14 REVOCATION OF CANCELLATION OF REGISTRATION 432
16.15 OTHER POINTS - BLACK LISTING OF DEALERS 433
CHAPTER 17 Payment of Tax under GST
17.2 PROVISIONS FOR PAYMENT OF TAX, INTEREST, PENALTY
ETC. UNDER GST 437
Two types of challans i.e. one for GST and other for non-GST
would be used under GST 437
Glimpse of provision pertaining to payment of tax under
the Model GST Law 438
17.2.1 Payment of tax, interest, penalty and other amounts 438

Detailed Content xxvii
Amount credited to the electronic cash ledger and
its utilization 438
Amount credited to the electronic credit ledger and
its utilization 439
Refund of balance in the cash or credit ledger 439
All liabilities of a taxable person shall be recorded and
maintained in an electronic register 439
17.2.2 Ascertainment of the liability of IGST, CGST or SGST 439
17.2.3 Due date for payment of tax 440
17.2.4 Order of discharging tax and other dues 441
17.2.5 Deemed passing of incidence of tax to the recipient
immediately on payment of tax 441
17.2.6 Meaning of the expression ‘tax dues’ 442
17.3 PAYMENT PROCESSES UNDER GST 442
17.3.1 Modes of payment 442
17.3.2 Payment across departmental counter 459
17.3.3 Penalty mechanism for defaulting banks 460
17.3.4 Banking arrangement 460
17.3.5 Proposed accounting system under GST 461
17.3.6 Reconciliation 463
Reconciliation by GSTN 463
Reconciliation by accounting authorities 463
Resolution of reconciliation outcomes (i.e. discrepancies
noted during the reconciliation process) 463
17.3.7 Recording by tax authorities 464
17.3.8 Challan 464
All modes of payment to use system generated electronic
challan464
Modes of creation of tax challan 465
17.3.9 RBI to play the role of aggregator 467
17.3.10 Summarization of the payment process 468
17.4 INTEREST ON DELAYED PAYMENT OF TAX 468
17.5 INTEREST IN CASE OF AN UNDUE OR EXCESS CLAIM OF INPUT TAX
CREDIT 468
17.6 PAYMENT OF TAX DEDUCTION AT SOURCE (TDS) 468
CHAPTER 18 Returns under GST
18.1 FILING OF RETURNS UNDER PRESENT INDIRECT
TAXATION REGIME 472
18.2 FILING OF RETURNS UNDER GST 474
18.2.1 Who is required to file return? 474
18.2.2 Legal obligation of a taxable person for filing GST return 475

xxviii GST Law and Analysis - with Conceptual Procedures
18.2.3 Types of returns required to be filed under GST 475
18.2.4 First return 476
18.2.5 Furnishing details of outward supplies made by
registered taxable person [GSTR-1] 477
18.2.6 Furnishing details of inward supplies made by taxpayer
[GSTR-2]486
18.2.7 Monthly Return (Periodic) [GSTR-3] 492
18.2.8 Quarterly return by a registered taxable person paying
tax under composition scheme [GSTR-4] 495
18.2.9 Return by non-resident foreign taxpayers [GSTR-5] 497
18.2.10 Monthly return by ISD [GSTR-6] 497
18.2.11 Monthly return by a registered taxable person who is
required to deduct tax at source [GSTR-7] 499
18.2.12 Annual Return [GSTR-8] 500
18.2.13 Final return (who applies for cancellation of registration) 501
18.2.14 Summarization of the returns required to be filed by
each taxpayer 502
18.2.15 Other relevant provisions 502
Return cannot be filed unless valid previous period returns
were filed 502
Due date of payment of tax 502
Return to be treated as invalid return for allowing ITC
if tax not paid 503
Even ‘Nil return’ required to be filed 503
No revision of monthly/quarterly return 503
18.2.16 Claim of ITC and provisional acceptance thereof 504
No utilization of credit allowed unless valid return has
been filed 505
18.2.17 Matching, reversal and reclaim of ITC 505
18.2.18 Matching, reversal and reclaim of reduction in output
tax liability 507
18.2.19 Where will the taxpayer file return? 509
18.2.20 Steps for return filing 510
18.2.21 Generation of acknowledgement number on
submission of return 511
18.2.22 Contents of Invoice level information to be captured
in the Return 511
18.2.23 Processing of return 515
18.2.24 Notice to return defaulter 516
18.2.25 Levy of late fees 516
18.2.26 Tax return preparers 517
18.2.27 Summarization - periodicity of return filing 518

Detailed Content xxix
CHAPTER 19 Refunds in GST
19.1 MEANING OF THE TERM ‘REFUND’ 524
19.2 SITUATIONS WHERE REFUNDS WOULD ARISE 524
(A) Excess payment of tax due to mistake or inadvertence 525
(B) Export (including deemed export) of goods and/or services
under claim of rebate or refund of accumulated credit of
tax when goods and/or services are exported 526
(C) Finalization of provisional assessment 534
(D) Refund of pre-deposit for filing Appeal including refund
arising in pursuance of an Appellate Authority’s order 535
(E) Payment of tax during investigation but no/reduced
liability arises at the time of finalization of investigation/
adjudication536
(F) Refund for tax payment on purchase by UN Bodies, supplies
to CSD Canteens, Para Military Forces Canteens, etc. 538
(G) Tax credit on inputs used for manufacturing/generation/
production/creation of tax free supplies or non-
GST supplies 539
(H) Refund of carry forward input tax credit 540
(I) Refund on account of year end or volume based incentives
provided by the supplier through credit notes 541
(J) Tax refund for International Tourists 542
19.3 REFUND FORMS 543
19.4 TIME PERIOD FOR FILING OF REFUND 543
19.5 RELEVANT DATE FOR FILING REFUND APPLICATION 544
19.5.1 Analysis of relevant date under Draft Business Process
for Refund and the Model GST Law 546
19.6 APPLICATION SHALL BE ACCOMPANIED BY THE
RELEVANT DOCUMENT AND DECLARATION 550
19.7 NUMBER OF COPIES OF APPLICATIONS TO BE FILED 551
19.8 REQUIREMENT FOR TAXPAYER TO KEEP A COPY OF
REFUND APPLICATION FOR THE PRESCRIBED PERIOD 551
19.9 RECEIPT OF REFUND APPLICATION AND PROCEDURE
FOR GENERATING PROOF OF RECEIPT OF APPLICATION
FOR REFUND 551
19.10 PROCEDURE AND THE TIME WITHIN WHICH PRELIMINARY
SCRUTINY OF SUBMISSION OF THE RELEVANT DOCUMENTS
IS CARRIED OUT 553
19.11 PROCEDURE FOR DEALING WITH REFUND THEREAFTER
INCLUDING EXAMINATION OF PRINCIPLE OF “UNJUST
ENRICHMENT” 553

xxx GST Law and Analysis - with Conceptual Procedures
19.12 MINIMUM AMOUNT BELOW WHICH REFUND SHALL NOT
BE GRANTED 554
19.13 SANCTIONING OF REFUND 554
19.14 TIME LIMIT FOR PASSING ORDER 557
19.15 VERIFICATION AND CONTROL (REFUND AUDIT) 558
19.16 INTEREST ON DELAYED REFUNDS 561
19.17 ADJUSTMENT OF REFUND IF REGISTERED TAXABLE
PERSON IS IN DEFAULT 562
19.18 REFUND CAN BE WITHHELD WHERE REFUND IS SUBJECT
TO APPEAL OR FURTHER PROCEEDING AND LIKELY TO
ADVERSELY AFFECT THE REVENUE 563
19.19 RECOVERY OF ERRONEOUS REFUND 563
19.20 CONSUMER WELFARE FUND 563
19.21 UTILIZATION OF THE FUND 563
19.22 TRANSITIONAL PROVISIONS 564
CHAPTER 20 Tax Invoice, Credit and Debit Notes
20.1 INVOICING ASPECTS UNDER PRESENT INDIRECT
TAXES REGIME 567
20.2 INVOICING ASPECTS UNDER GST 571
20.2.1 Invoicing for supply of taxable goods 571
20.2.2 Invoicing for supply of taxable services 572
20.2.3 Provision of issuance of revised invoice against the
invoice already issued 572
20.2.4 Certain cases where a bill of supply shall be issued
instead of tax invoice 573
20.2.5 Invoicing by input service distributor (“ISD”) 573
20.2.6 ‘Tax invoice’ to include ISD document, supplementary
or revised invoice 573
20.2.7 Amount of tax to be indicated in tax invoice and other
documents574
20.3 CREDIT AND DEBIT NOTES 575
20.3.1 Credit note 576
20.3.2 Debit note 577
20.3.3 Details of credit and debit notes to be given in return 577
CHAPTER 21 Accounts, Records and Presumption as to Documents
21.1 MAINTENANCE OF ACCOUNTS AND RECORDS UNDER
THE PRESENT INDIRECT TAXATION REGIME 579
21.2 ACCOUNTS AND RECORDS UNDER GST 583
21.2.1 Accounts and other records 583
21.2.2 Period of retention of accounts 588

Detailed Content xxxi
21.3 PRESUMPTION AS TO DOCUMENTS 590
21.3.1 Presumption as to documents in certain cases 590
21.3.2 Admissibility of micro films, facsimile copies of
documents and computer printouts as documents
and as evidence 591
CHAPTER 22 Journal Entries under GST
22.1 OVERVIEW OF SCENARIOS 595
22.2 BASIC JOURNAL ENTRIES 596
22.3 SCENARIO WITH ILLUSTRATION 600
22.3.1 Purchase and supply of goods and services - within the
state (intra-state supply of goods and services) 600
22.3.2 Purchase and supply of goods and services - outside the
state (inter-state supply of goods and services) 602
22.3.3 Purchase of goods and services - within the state and
supply of goods and services - outside the state 604
22.3.4 Purchase of goods and services - outside the state and
supply of goods and services - within the state 606
22.3.5 Purchase of goods and services – within and outside the
state and supply of goods and services – within and
outside the state 609
22.3.6 Export of goods and services 612
CASE I. Purchase of goods and services - within the state
and export of such goods and services 612
CASE II. Purchase of goods and services - outside the state
and export of such goods and services 614
CASE III. Purchase of goods and services–within and
outside the state and export of such goods and services 616
22.3.7 Import of goods and services 618
CASE I. Import of goods and services and supply of goods
and services – within the state 618
CASE II. Import of goods and services and supply of goods
and services – outside the state 622
CASE III. Import of goods and services and supply of goods
and services – within and outside the state 625
22.3.8 Import of goods and services and export of goods and
services629
22.3.9 Miscellaneous entries 632
CHAPTER 23 Assessments and Audit
23.1 TYPES OF ASSESSMENT 635
23.1.1 Self-assessment 635
23.1.2 Provisional assessment 638

xxxii GST Law and Analysis - with Conceptual Procedures
23.1.3 Best judgement assessment 641
Assessment of non- filers of return 641
Assessment of unregistered persons 643
23.1.4 Summary assessment in certain special cases 643
23.1.5 Re-assessment 643
23.1.6 General provisions 644
Scrutiny of returns 644
Assessment proceedings, etc. not to be invalid on
certain grounds 644
23.2 AUDIT 646
23.2.1 Meaning of term ‘Audit’ 648
23.2.2 Audit by tax authorities 648
23.2.3 Special audit 652
Notice of special audit 652
Time period for submission of audit report 652
Extension of time period for submission of audit report 652
Special audit can be conducted irrespective of accounts
already audited under any other provision or law 653
Opportunity of being heard to be given before using the
findings of special audit in any proceedings 653
Expenses incidental etc., to be determine and paid by
the commissioner 653
Initiation of action against the taxable person 653
CHAPTER 24 Demands and Recovery
24.1 DEMANDS AND RECOVERY 656
24.1.1 Determination of tax not paid or erroneously refunded
etc. for any reason other than fraud or any wilful-
misstatement or suppression of facts 657
24.1.2 Determination of tax not paid or erroneously refunded
etc. by reason of fraud or any wilful- misstatement or
suppression of facts 666
24.1.3 General provisions relating to demand of tax 677
24.1.4 Provisions of sec 51(A), sec 51(B), sec 51(C) shall
apply, mutatis mutandis, to the recovery of interest 680
24.1.5 Tax collected but not deposited with the central or
state government 680
24.1.6 Tax wrongfully collected and deposited with the
central or a state government 683
24.1.7 Recovery of tax 683
24.1.8 Payment of tax and other amount in installments 688
24.1.9 Transfer of property to be void in certain cases 688
24.1.10 Tax to be first charge on property 689

Detailed Content xxxiii
24.1.11 Provisional attachment to protect revenue in certain cases 689
24.1.12 Continuation of certain recovery proceedings 690
24.2 LIABILITY TO PAY IN CERTAIN CASES 691
24.2.1 Liability in case of transfer of business 691
24.2.2 Liability in case of amalgamation/merger of companies 692
24.2.3 Liability in case of company in liquidation 693
24.2.4 Liability of partners of firm to pay tax 694
24.2.5 Liability of guardians, trustees etc. 695
24.2.6 Liability of Court of Wards etc. 696
24.2.7 Liability if a person liable to pay tax dies 697
24.2.8 Liability in case of Hindu Undivided Family or
Association of Person 697
CHAPTER 25 Inspection, Search, Seizure and Arrest
25.1 MEANING OF IMPORTANT TERMS 701
25.2 POWER OF INSPECTION, SEARCH AND SEIZURE 703
25.2.1 Power to search and seize goods, documents or
books or things 705
25.2.2 Power to seal or break open the door of any premises,
etc. during seizure operation 705
25.2.3 Person entitled to make copies or take extracts of
seized documents 706
25.2.4 Seized goods to be returned, if no notice is given
within 60 days of seizure or within such extended period 706
25.2.5 Disposing of seized perishable goods or goods of
hazardous nature etc., by the proper officer 706
25.2.6 Preparation of inventory of seized perishable goods
or goods of hazardous nature etc., by proper officer 707
25.2.7 Applicability of provisions of the Code of Criminal
Procedure707
25.3 INSPECTION OF GOODS IN MOVEMENT 708
25.3.1 Person in charge of conveyance to carry prescribed
documents, where the value of goods is more than
INR 50,000/- 708
25.3.2 Production of documents for verification to proper officer 708
25.4 POWER TO ARREST 708
25.4.1 Authorization to arrest 708
25.4.2 Person arrested for cognizable offence to be produced
before magistrate within 24 hours of arrest 709
25.4.3 Power to release a person on bail in case of non-
cognizable and bailable offence 709
25.4.4 Arrest in accordance with provision of the Code
of Criminal Procedure 709

xxxiv GST Law and Analysis - with Conceptual Procedures
25.5 POWER TO SUMMON PERSONS TO GIVE EVIDENCE AND
PRODUCE DOCUMENTS 710
25.5.1 Power to summon persons 710
25.5.2 Persons summoned shall be bound to attend, either in
person or by authorized representative and to state truth 710
25.5.3 Deemed judicial proceedings 711
25.6 ACCESS TO BUSINESS PREMISES 711
25.6.1 Power to access business premises to inspect books
of account, documents etc. 711
25.6.2 Submission of records for scruitiny 711
25.7 OFFICERS REQUIRED TO ASSIST CGST/SGST OFFICERS 712
CHAPTER 26 Offences, Penalties, Prosecution and Compounding
26.1 OFFENCES AND PENALTIES UNDER GST 716
26.1.1 Specific offences and penalties 716
26.1.2 General penalty 721
26.1.3 Summarization of the penalty provisions in respect
of offences committed 722
26.1.4 General disciplines related to penalty 723
26.1.5 Detention of goods and conveyances and levy of penalty 724
26.1.6 Confiscation of goods and levy of penalty 726
26.1.7 Confiscation of conveyances 727
26.1.8 Confiscation or penalty not to interfere with
other punishments 727
26.2 PROSECUTION AND COMPOUNDING OF OFFENCES 727
26.2.1 Prosecution 728
26.2.2 Cognizance of offences 740
26.2.3 Presumption of culpable mental state 740
26.2.4 Relevancy of statements under certain circumstances 741
26.2.5 Offences by companies and certain other persons 741
26.2.6 Compounding of offences 742
CHAPTER 27 Appeals and Revision
27. 1 HIERARCHY OF APPELLATE AUTHORITY UNDER GST 747
27.2 FIRST APPELLATE AUTHORITY 748
27.2.1 Revisional powers of the commissioner 755
27.3 APPELLATE TRIBUNAL 758
27.3.1 Constitution of the National Appellate Tribunal 758
27.3.2 Appeals to the appellate tribunal 759
27.3.3 Orders of appellate tribunal 764
27.3.4 Procedure of filing appeal to appellate tribunal 766
27.4 COMMON PROVISIONS FOR CGST/SGST 768
27.4.1 Interest on delayed refund of pre-deposit 768

Detailed Content xxxv
27.4.2 Appearance by authorized representatives 769
27.5 HIGH COURT 772
27.5.1 Appeal to the high court 772
27.5.2 Power of the high court to formulate the question
of law, hear appeal and give decision 773
27.5.3 Determination of issues by high court 773
27.5.4 Appeal to be heard by bench of at least two judges 774
27.5.5 Action to be taken on basis of certified copy of
the judgement 774
27.5.6 Applicability of the Code of Civil Procedure, 1908 774
27.6 SUPREME COURT 774
27.6.1 Appeal to the Supreme Court 774
27.6.2 Hearing before the Supreme Court 775
27.6.3 Cost of appeal 775
27.6.4 Action to be taken on basis of certified copy of
the judgement 775
27.7 OTHER COMMON PROVISIONS 776
27.7.1 Sums due to be paid notwithstanding appeal, etc. 776
27.7.2 Exclusion of time taken for copy of the order 776
27.7.3 Appeal not to be filed in certain cases 776
27.7.4 Non appealable decisions and orders 777
CHAPTER 28 Advance Ruling and Settlement of Cases
28.1 ADVANCE RULING 780
28.1.1 Who can be an applicant under advance ruling provisions? 781
28.1.2 Application and fee for advance rulings 783
28.1.3 Question for which advance ruling can be sought 783
28.2 CONSTITUTION OF AUTHORITY AND APPELLATE
AUTHORITY FOR ADVANCE RULING 784
28.2.1 Authority for advance ruling 784
28.2.2 Appellate authority for advance ruling 785
28.3 POWERS OF AUTHORITY AND APPELLATE AUTHORITY 786
28.3.1 Powers of Civil Court as given under the Code of
Civil Procedure, 1908 [Section 104(1) of the
Model CGST/SGST Act] 786
28.3.2 Powers of civil court under the Code of Criminal
Procedure and proceedings to be treated as judicial
proceedings under the Indian Penal Code, 1860
[Section 104(2) of the Model CGST/SGST Act] 787
28.3.3 Power to regulate own procedure 787
28.4 PROCEDURE ON RECEIPT OF APPLICATION FOR
ADVANCE RULING 787
28.5 APPEAL TO THE APPELLATE AUTHORITY 789

xxxvi GST Law and Analysis - with Conceptual Procedures
28.6 ORDERS OF THE APPELLATE AUTHORITY 789
28.7 APPLICABILITY OF ADVANCE RULING 790
28.8 RECTIFICATION OF ORDER OF ADVANCE RULING 791
28.9 CIRCUMSTANCES WHEN THE ORDER OF ADVANCE
RULING WILL BE VOID 792
28.10 SETTLEMENT OF CASES 792
28.10.1 Constitution of National Goods and Services Tax Settlement
Commission793
28.10.2 Jurisdiction of settlement commission 794
28.10.3 Decisions to be by majority 795
28.10.4 Application for settlement of cases 796
Who can file application for settlement of cases? 797
Format of application and information to be contained
therein797
Cases when an application cannot be filed to settlement
commission?797
28.10.5 Procedure for settlement on receipt of an application
under sec 15 of the Model IGST Act 798
28.10.6 Order by the Settlement Commission 800
28.10.7 Powers of the Settlement Commission 802
To order provisional attachment to protect revenue 802
To reopen completed proceedings 803
To grant immunity from prosecution and penalty 803
To send a case back to the IGST officer 804
Powers of a civil court for purpose of discovery,
inspection, issuing commissions etc. 805
Power to regulate own procedure 806
28.10.8 Bar on subsequent application for settlement in
certain cases 806
CHAPTER 29 Transitional Provisions in GST
29.1 PRESENT CENTRAL/STATE OFFICERS TO BE DEEMED
GST OFFICERS 810
29.2 MIGRATION OF EXISTING TAXPAYERS TO GST 811
29.3 STATUS OF EXISTING INPUT CREDIT LYING UNDER
CENVAT AND VAT 816
29.3.1 Amount of cenvat credit carried forward in a return
to be allowed as input tax credit 817
29.3.2 Unavailed cenvat credit on capital goods, not carried
forward in a return, to be allowed in certain situations 819
29.3.3 Credit of eligible duties and taxes in respect of inputs
held in stock to be allowed in certain situations 823

Detailed Content xxxvii
29.3.4 Credit of eligible duties and taxes on inputs held in
stock to be allowed to a taxable person switching
over from composition scheme 828
29.3.5 Amount payable in the event of a taxable person switching
over to composition scheme 831
29.4 Exempted goods returned to the Place of Business
on or after the Appointed Day 833
29.5 Duty paid goods returned to the Place of Business
on or after the Appointed Day 834
29.6 Transitional provisions for inputs and semi-finished
and finished goods lying with Job Worker on
Appointed Day 835
29.6.1 Inputs removed for job work and returned on or after
the appointed day 835
29.6.2 Semi-finished goods removed for job work and returned
on or after the appointed day 836
29.7 FINISHED GOODS REMOVED FOR CARRYING OUT
CERTAIN PROCESSES AND RETURNED ON OR AFTER THE
APPOINTED DAY 838
Direct removal of goods after processing from such other premises 839
29.8 ONGOING CONTRACTS/AGREEMENTS, PURCHASE ORDERS,
WORK ORDERS 839
29.8.1 Issue of supplementary invoices, debit or credit notes where
price is revised in pursuance of a contract 839
29.8.2 Progressive or periodic supply of goods or services 841
29.8.3 Treatment of retention payments 842
29.8.4 Treatment of long term construction/works contracts 844
29.9 PENDING REFUND CLAIMS TO BE DISPOSED OF UNDER
EARLIER LAW 846
Amount accruing to be paid in cash (CGST)/ refunded in
accordance with State VAT laws (SGST) 846
Rejected portion of refund claim shall lapse 848
29.10 PENDING LITIGATIONS 848
29.10.1 Claim/recovery of Cenvat credit to be disposed of under
the earlier law 849
29.10.2 Finalization of proceedings relating to output duty liability 850
29.10.3 Treatment of the amount recovered or refunded in
pursuance of assessment or adjudication proceedings 851
29.10.4 Treatment of the amount recovered or refunded
pursuant to revision of returns 851
29.11 CREDIT DISTRIBUTION OF SERVICE TAX BY ISD 852
29.12 TAX PAID ON GOODS/CAPITAL GOODS LYING WITH
AGENTS TO BE ALLOWED AS CREDIT 852

xxxviii GST Law and Analysis - with Conceptual Procedures
29.13 TREATMENT OF BRANCH TRANSFERS 853
29.14 GOODS SENT ON APPROVAL BASIS RETURNED ON OR
AFTER THE APPOINTED DAY 853
29.15 NO DEDUCTION OF TAX AT SOURCE ON PAYMENT
RECEIVED AFTER APPOINTED DAY 854
29.16 IMPORT OF SERVICES OR INTER-STATE SUPPLY OF
GOODS AND/OR SERVICES MADE ON OR AFTER
THE APPOINTED DAY 854
29.17 REPEAL AND SAVING 856
29.17.1 Excise and sales tax to continue on few products 856
29.17.2 Acts to be repealed 858
Transitional provisions under the Constitution (101st
Amendment) Act, 2016 enables centre and states to continue
their levies under existing laws for a period of 1 year 859
29.18 UNITS ENJOYING INCENTIVES / CONCESSIONS /
TAX HOLIDAYS 860
29.18.1 Claiming total exemption/exemption on value addition
only/exemption by way of deferment in payment of
state VAT or CST 860
29.18.2 Continuation of exemption by export oriented units (EOU) 861
29.19 OTHER MATTERS ON WHICH GST MAY HAVE IMPACT 861
29.19.1 Public sector undertakings (PSUs) 861
29.19.2 Units located in exclusive zones 862
29.19.3 Natural resource based industries 862
29.20 CREATING AWARENESS/IMPARTING TRAINING OR
EDUCATION ON GST 862
29.20.1 Assessees 863
29.20.2 Tax administrators at the state and the central level 863
29.20.3 Tax professionals, return preparers and other
professionals such as tax practitioners, advocates 863
29.20.4 Consumers of goods and services 863
29.20.5 Policy makers 863
29.20.6 State governments 863
CHAPTER 30 Classification, Rates and Miscellaneous provisions
30.1 CLASSIFICATION UNDER GST 866
30.1.1 Need for Classification 866
30.1.2 Classification of goods under GST 867
General rules of classification 868
Non-statutory principles 869
30.1.3 Classification of services under the GST 870
30.2 REVENUE NEUTRAL RATE 872
30.2.1 Importance of RNR 872

Detailed Content xliii
CHAPTER 38 FAQs on GST
38.1 FAQS ON GST ITS NEEDS 1024
38.2 FAQS ON THE CONSTITUTION (101ST
AMENDMENT)
ACT, 2016 1027
38.3 FAQS ON GST COUNCIL 1028
38.4 FAQS ON MODUS OPERANDI OF GST 1030
38.5 FAQS ON RATES UNDER GST - REVENUE NEUTRAL
RATE (RNR) 1035
38.6 FAQS ON TERM “SUPPLY” 1036
38.7 FAQS ON EXPORTS AND IMPORTS 1043
38.8 FAQS ON VALUATION OF SUPPLY OF GOODS AND/
OR SERVICES 1046
38.9 FAQS ON TIME OF SUPPLY 1055
38.10 FAQS ON PLACE OF SUPPLY 1062
38.11 FAQS ON EXCLUSIONS AND EXEMPTIONS UNDER GST 1069
38.12 FAQS ON REGISTRATION UNDER GST 1073
38.13 FAQS ON PAYMENT OF TAX 1082
38.14 FAQS ON INPUT TAX CREDIT 1091
38.15 FAQS ON REFUNDS 1102
38.16 FAQS ON RETURN 1107
38.17 FAQS ON JOB WORK 1120
38.18 FAQS ON TRANSITIONAL PROVISIONS 1125
CHAPTER 39 Commentary on Model GST Law
39.1 COMMENTARY ON MODEL CGST/SGST ACT, 2016 1135
39.2 COMMENTARY ON MODEL IGST ACT, 2016 1682

Detailed Content xxxix
30.2.2 Factors effecting determination of RNR 873
30.2.3 Recommendation of the select panel of Rajya Sabha 874
30.2.4 CEA led panel recommends RNR at 15%-15.5% -
The report bats for lower exemptions and higher
threshold for GST 875
30.3 MISCELLANEOUS PROVISIONS 878
30.3.1 GST compliance rating 879
30.3.2 Furnishing of information return 880
30.3.3 Power to collect statistics 883
30.3.4 Disclosure of information required under section 119 884
30.3.5 Test purchase of goods and/or services 885
30.3.6 Drawal of samples 885
30.3.7 Burden of proof 886
30.3.8 Persons discharging functions under the act shall be
deemed to be public servants 887
30.3.9 Indemnity – no legal proceeding against any goods
and services tax officer 887
30.3.10 Disclosure of information by a public servant 887
30.3.11 Publication of information respecting persons in
certain cases 889
30.3.12 Rectification of mistakes or errors apparent from record 891
30.3.13 Bar of jurisdiction of civil courts 892
30.3.14 Levy of fees 893
30.3.15 Power of central (or state) government to make rules 893
30.3.16 General power to make regulations 897
30.3.17 Delegation of powers 897
30.3.18 Instructions to GST officers 897
30.3.19 Removal of difficulties 898
30.3.20 Service of notice in certain circumstances 898
30.3.21 Rounding off of tax etc. 900
30.3.22 Effect of amendments, etc., of rules, notifications or orders 900
30.3.23 Publication of rules and notifications and laying of rules
before parliament/state legislature 901
30.3.24 Application of certain provisions of the CGST Act, 2016 901
30.3.25 Power to make rules 901
30.3.26 Interest on delayed payment of tax 902
30.3.27 Tax wrongfully collected and deposited with the central or a
state government 902
CHAPTER 31 Robust Information Technology Infrastructure and GST
31.2 NEED FOR ROBUST IT INFRASTRUCTURE AND
COMPUTERIZATION 904

xl GST Law and Analysis - with Conceptual Procedures
31.3 IMPORTANT ISSUES FOR COMPREHENSIVE IT
INFRASTRUCTURE 905
31.4 BENEFITS OF AN INTEGRATED IT INFRASTRUCTURE 906
31.5 ESTABLISHMENT OF GOODS AND SERVICES TAX
NETWORK (GSTN) 907
31.6 RECOMMENDATION OF THE SELECT COMMITTEE ON
CONSTITUTION OF GSTN AND IT PREPAREDNESS 907
CHAPTER 32 Impact of GST in General and on Various Sectors
32.1 IMPACT OF GST – GENERALLY 928
32.1.1 Impact of GST on manufacturers 928
32.1.2 Impact of GST on service providers 931
32.1.3 Impact of GST on traders 933
32.2 IMPACT OF GST ON SPECIFIC SECTORS 935
32.2.1 Alcohol industry 935
32.2.2 Petroleum industry 938
32.2.3 Tobacco industry 941
32.2.4 Real estate industry 943
32.2.5 Power – Electricity sector 947
32.2.6 Fast moving consumer goods (FMCG) industry 950
32.2.7 Textile industry 953
32.2.8 Financial services industry 955
32.2.9 Agricultural sector 958
32.2.10 Telecommunication industry 961
32.2.11 Transport/Logistics sector 965
32.2.12 Entertainment/media industry 967
32.2.13 Pharmaceutical industry 969
32.2.14 Automobile sector 971
32.2.15 Cement industry 973
CHAPTER 33 Electronic Commerce
33.2 TYPES OF E-COMMERCE 974
33.2.1 Business-to-Business (B2B) 974
33.2.2 Business-to-Consumer (B2C) 975
33.2.3 Business-to-Government (B2G) 975
33.2.4 Consumer-to-Consumer (C2C) 976
33.2.5 Consumer-to-Business (C2B) 976
33.2.6 M-commerce (mobile commerce) 976
33.3 E-COMMERCE BUSINESSES BROADLY OPERATE
UNDER TWO MODELS 977
33.3.1 Market place model 977
33.3.2 Fulfilment center model 977

Detailed Content xli
33.4 TAX TREATMENT OF E-COMMERCE TRANSACTION
UNDER THE PRESENT INDIRECT TAXATION REGIME 978
33.5 KEY ISSUES FACED BY E-COMMERCE 978
33.5.1 Levy of Service tax on e-commerce transactions 978
33.5.2 Levy of VAT/CST on e-commerce transactions 979
33.5.3 Levy of entry tax on online purchases 980
33.5.4 Restrictions on claim of credit by suppliers 980
33.6 SPECIFIC PROVISION FOR E-COMMERCE UNDER GST 980
33.7 MEANING OF SOME OF THE RELEVANT TERMS 981
33.7.1 Aggregator 981
33.7.2 Brand name or trade name 981
33.7.3 Branded services 981
33.7.4 Electronic commerce 981
33.7.5 Electronic commerce operator 981
33.8 COLLECTION OF TAX AT SOURCE BY E-COMMERCE OPERATOR 982
33.8.1 Mode of recovery 982
33.8.2 Time limit for payment 982
33.8.3 Monthly Statements 982
33.8.4 Deposition of amount shall be deemed to be a payment
of tax on behalf of the concerned supplier 983
33.8.5 Matching of the statement of operator and supplier 983
33.8.6 Discrepancy between details of operator and supplier 983
33.8.7 Where any amount has been added to the output tax
liability of the supplier, he is liable to pay tax along
with interest 983
33.8.8 Power of any authority not below the rank of
Joint Commissioner to ask for details from the operator 984
33.8.9 Operator shall furnish details within 5 working days 984
33.8.10 Penalty if the operator fails to furnish the information
as required by the notice 984
33.9 CHALLENGES LIKELY TO BE FACED BY E-COMMERCE
SECTOR UNDER GST 984
CHAPTER 34 Job Work
34.2 PROVISIONS UNDER PRESENT INDIRECT TAXES REGIME 991
34.3 SPECIFIC PROVISION FOR JOB WORK UNDER GST 993
34.4 CONCEPT OF JOB WORK UNDER GST 993
34.5 SPECIAL PROCEDURE FOR REMOVAL OF GOODS FOR JOB WORK994
34.6 TAKING INPUT TAX CREDIT IN RESPECT OF INPUTS
SENT FOR JOB WORK 996
34.6.1 Input tax credit of inputs sent to job worker 996
Provision under the present regime 996

xlii GST Law and Analysis - with Conceptual Procedures
Provision under the Model GST Law 996
34.6.2 Input tax credit of capital goods sent to job worker 996
Provision under the present regime 996
Provision under the Model GST Law 997
34.6.3 If the inputs or capital goods are not received back
by the “principal” within the time specified 997
34.6.4 Snapshot of job work in present regime v job work in GST 1000
34.7 TRANSITIONAL PROVISIONS 1001
CHAPTER 35 Journey of GST in India
35.1 STATUS OF JOURNEY AS ON DATE 1002
35.2 SNAPSHOT OF IMPORTANT MILESTONES OF JOURNEY TO GST 1005
CHAPTER 36 Decoding of the Constitution
(101st
Amendment) Act, 2016
36.2 KEY AMENDMENTS TO THE GST BILL VIDE THE
CONSTITUTION (101ST
AMENDMENT) ACT, 2016 1011
36.3 SECTION-WISE ANALYSES OF THE CONSTITUTION
(101ST
AMENDMENT) ACT, 2016 1014
CHAPTER 37 Preparation for GST and challenges ahead
37.1 GETTING GST READY 1015
37.2 LIKELY IMPACT OF GST AND FOCUS AREAS 1016
37.3 HOW TO GO ABOUT FOR GST – ACTION PLAN 1017
37.4 TO-DO LIST FOR DEPARTMENTS AND GOVERNMENT
AUTHORITIES 1019
37.4.1 Initial preparation 1019
37.4.2 Creating awareness and imparting education 1019
37.4.3 IT Infrastructure and computerization 1019
37.5 CHALLENGES AHEAD 1020
37.5.1 GST Council powers only recommendatory in nature 1020
37.5.2 Exemptions and exclusions under GST 1021
37.5.3 Deciding the Revenue Neutral Rate (RNR) 1021
37.5.4 Finalising principles of place of supply 1022
37.5.5 Finalising principles of time of supply 1022
37.5.6 Extensive training to tax administration staff 1022
37.5.7 Goods and Services Tax Network (GSTN) 1022
37.5.8 Providing platform for deliberation with trade on
likely issues under the Model GST law 1023

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