GST important definitions and glossary

Goods and Services Tax (GST) Important Definitions and Glossary
CA Narayan Lodha, Chartered AccountantPrivileged and Confidential
Good and Service Tax (GST)
Glossary: Defining important terms
With Goods and Service Tax (GST) coming into effect from July 1, 2017 it is very important to understand
the new definition and concepts under GST Act.
Section 2 of the Central Goods and Services Tax (GST) Act 2017 deals with definitions, phrases, and
expressions.
Understanding the definitions are necessary to ensure proper interpretation and compliance of the GST
law. Some of the major definitions / terms are enumerated below : -
GST Important definitions
(95). Actionable claim shall have the same meaning as assigned to it in section 3 of the Transfer of
Property Act, 1882 (4 of 1882), which refers to a claim on any unsecured debt or any beneficial
interest in movable property of the claimant.
(96). Address of delivery refers to the address of the recipient of goods and/or services or both
indicated on the tax invoice issued by a taxable person for delivery of such goods and/or
services.
(97). Address on record means the address of the recipient as available in the records of the
suppliers. This may or may not be the same as the address of delivery.
(98). Adjudicating authority means any authority competent to pass any order or decision relating to
the GST Act, but does not include the CBEC (i.e. board), the revisional authority, authority for
advance ruling, appellate authority for advance ruling, the appellate authority, or the appellate
tribunal.
(6). Aggregate turnover means the total value of all taxable supplies, (excluding reverse Charge
supplies) exempt supplies, exports of goods and/or services, and interstate supplies of a person
having the same PAN, computed on the pan-India basis, and excluding taxes under GST. The
value of inward supplies on which taxation is based on reverse-charge mechanism shall not be
considered.
(8). Appellate tribunal means the Goods and Services Tax Appellate Tribunal set up under section
109.
(12). Associated Enterprises shall have the same meaning as assigned to it in section 92A of the
Income-tax Act, 1961, which refers to common control, direct/ indirect/ common holding of
voting power more than 26%, dependent enterprise on each other Etc.
(19). Capital goods are goods that are capitalised in the books of accounts of the person claiming the
input credit and are intended to be used during course or furtherance of business.
(20). Casual taxable person is a person occasionally undertakes transactions involving supply of
goods and/or services during business, whether as principal, agent, or in any other capacity, in a
taxable territory where he has no fixed place of business.
(21). Central Tax (CGST) is the tax levied under the Central Goods and Services Tax Act.

(22). Cess shall have the same meaning as assigned to it in the Goods and Services Tax (Compensation
to States) Act;
(26). Common portal refers to the common online GST portal approved by the Central and State
Governments, on the recommendation of the council.
(30). Composite supply means a supply consisting of two or more goods and/or services or both, or
any combinations thereof, which are naturally bundled and provided together, one being a
principal supply.
(31). Consideration relates to the supply of goods or services involving:
a. Any payment made or to be made, whether in money or kind
b. Monetary value of any act or forbearance, whether or not voluntary
However, the subsidy given by the Central and/or State Governments are not included.
(32). Continuous supply of goods means a supply of goods which is provided, or agreed to be
provided, continuously or on recurrent basis, under a contract, whether or not by means of a
wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a
regular or periodic basis and includes supply of such goods as the Government may, subject to
such conditions, as it may, by notification, specify.
(33). Continuous supply of services means a supply of services which is provided, or agreed to be
provided, continuously or on recurrent basis, under a contract, for a period exceeding three
months with periodic payment obligations and includes supply of such services as the
Government may, subject to such conditions, as it may, by notification, specify
(36). Council refers to the Goods and Services Tax Council set up under Article 279A of the
Constitution.
(37). Credit note means a document issued by a taxable person, in relation to the tax invoice already
issued and the taxable value and/or tax payable in respect of supply exceed, or where the goods
supplied are returned by the recipient, or where the services supplied are found to be deficient
etc. Document as issued u/s (1) of 34
(38). Debit note means a document issued by a taxable person relating to the taxable value and/or
tax charged as per the tax invoice already issued, when found to be less than the taxable value
and/or tax payable in respect of such supply. Document as issued u/s (3) of 34
(43). Electronic cash ledger means the electronic cash ledger referred to in subsection (1) of section
49, which refers to ledger which is credited with every deposit made towards towards tax,
interest, penalty, fee or any other amount by a person.
(44). Electronic commerce means the supply of goods and/or services including digital products over
a digital or electronic network.
(47). Exempt supply means supply of any goods and/or services that are not taxable and includes
such supply of goods and/or services that attract Nil rate of tax or that may be exempt from tax
per section 11.
(50). Fixed establishment is a place, other than the place of business, that has a sufficient degree of
permanence and suitable structure regarding human and technical resources as to
supply/receive/use services for its own

(52). Goods means every kind of movable property other than money and securities but includes
actionable claim, growing crops, grass and things attached to or forming part of the land which
are agreed to be severed before supply or under a contract of supply
(58). Integrated Tax (IGST) means the tax imposed under the Integrated Goods and Services Tax Act.
(59). Input means any goods other than capital goods used or intended to be used by a supplier in the
course or furtherance of business;
(60). Input service means any service used or intended to be used by a supplier in the course or
furtherance of business
(61). Input service distributor means an office of the supplier of goods and/or services that receives
tax invoices issued under section 31 toward the receipt of input services and issues a prescribed
document for distributing the credit of CGST, SGST/ UTGST, and/or IGST paid for the said
services.
(62). Input tax means the CGST, IGST, SGST, UTGST, including that on import of goods, CGST, and
SGST charged on any supply of goods or services, and includes the tax payable under subsection
(3) and (4) of section 9, but does not include the tax paid under composition levy.
(63). Input tax credit means the credit of input tax..
(64). Intrastate supply of goods means the supply of goods during intrastate (i.e. within the state)
trade or commerce as defined in section 8 of IGST Act.
(65). Intrastate supply of services means the supply of services during intrastate (i.e. within the state)
trade or commerce as referred in section 8 of IGST Act.
(66). Invoice shall have the meaning as assigned to “Tax Invoice” as under section 31.
(67). Inward supply refers to the receipt of goods and/or services, whether by purchase, acquisition,
or any other means, and with or without any consideration.
(68). Job work means undertaking any treatment or process by a person on goods belonging to
another registered taxable person.
(69). Local authority means:
a. Panchayat as defined in clause (d) of Article 243 of the Constitution
b. Municipality as specified in clause (e) of Article 243P of the Constitution
c. A municipal committee, a zilla parishad, a district board, and any other authority legally
entitled to or entrusted by the Central or any State Government with the control or
management of a municipal or local fund
d. Cantonment board as defined in section 3 of the Cantonments Act, 2006 (41 of 2006)
e. Regional council or a district council formed under the Sixth Schedule to the
Constitution
f. Development board formed under Article 371 of the Constitution
g. Regional council formed under Article 371A of the Constitution
(72). Manufacture means processing of raw material or inputs in any manner that results in
emergence of a new product having a distinct name, character and use and the term
“manufacturer” shall be construed accordingly

(73). Market value refers to the full amount that a recipient of supply would pay to obtain the goods
and/or services of like kind and quality at or about the same time and at the same commercial
level and are not related.
(74). Mixed supply means two or more individual supplies of goods and/or services or any
combination thereof, made together by a taxable person for a single price where such supply
does not form a composite supply.
(77). Non-resident taxable person is someone who occasionally undertakes transactions involving
the supply of goods and/or services, whether as principal or agent, or in any other capacity, but
with no fixed place of business in India.
(78). Non-taxable supply means a supply of goods or services or both which is not leviable to tax
under this Act or under the Integrated Goods and Services Tax Act
(79). Output tax means the CGST/ SGST on taxable supply of goods and/or services made by a taxable
person or by his agent. Excludes tax payable on a reverse-charge basis.
(80). Outward supply refers to the supply of goods and/or services, whether by sale, transfer, barter,
exchange, licence, rental, lease, or disposal, or any other means made or agreed to be made
during business.
(81). Person includes:
a. An individual
b. A Hindu undivided family
c. A company
d. A firm
e. A Limited Liability Partnership
f. An association of persons or a body of individuals, whether incorporated or not, in India
or outside India
g. Any corporation set up by or under any Central, State, or Provincial Act or a government
company as defined in section 2(45) of the Companies Act, 2013 (18 of 2013)
h. A body corporate incorporated by or under the laws of a country outside India
i. A cooperative society registered under any law relating to cooperative societies
j. A local authority
k. Government
l. Society as defined under the Societies Registration Act, 1860 (21 of 1860)
m. A trust
n. Every artificial juridical person, not falling within any of the preceding sub-clauses
(82). Place of business includes:
a. A place from where the business is ordinarily carried on, including a warehouse, a
godown, or any other place where a taxable person stores his goods, or provides or
receives goods and/or services
b. A place where a taxable person keeps his books of account
c. A place where a taxable person is engaged in business through an agent
(88). Principal means a person on whose behalf an agent carries on the business of supply or receipt
of goods and/or services or both.
(89). Principal place of business means the location of business specified as the principal place of
business in the certificate of registration.

(90). Principal supply means the supply of goods and/or services that form the significant element of
a composite supply and any other related supply being ancillary and acting as a means for better
enjoyment of the principal supply.
(93). Recipient of supply of goods and/or services means:
a. Where the consideration is payable, the person liable to pay that consideration
b. Where no consideration is payable, the person to whom the goods and/or services are
delivered/rendered or made available Includes an agent working on behalf of the
recipient in relation to the goods and/or services provided.
(96). Removal means:
a. Dispatch of the goods for delivery by the supplier or by any other person acting on
behalf of such supplier
b. Collection of the goods by the recipient or by any other person acting on behalf of such
recipient
(97). Return refers to any return prescribed or required to be furnished.
(98). Reverse charge means the tax liability on the recipient of the supply of goods and/or services
instead of the supplier/ Provider of such goods and/or services.
(101).Securities shall mean as per subsection (h) of section 2 of the Securities Contracts (Regulation)
Act, 1956 (42 of 1956).
(102).Services refers to anything other than goods, money and securities but includes activities
relating to the use of money or its conversion by cash or by any other mode, from one form,
currency or denomination, to another form, currency or denomination for which a separate
consideration is charged.
(104).State Tax (SGST) means the tax imposed under the State Goods and Services Tax Act.
(105).Supplier signifies the person providing the said goods and/or services and shall include an agent
acting as such on behalf of such supplier about the goods and/or services provided.
(107).Taxable persons a person who is registered or required to be registered under GST
(108).Taxable supply means a supply of goods or services or both which is leviable to tax under this
Act
(112).Turnover in state or Turnover in Union territory means the aggregate value of all taxable
supplies, exempt supplies, exports of goods and/or services made within a state/ UT by a
taxable person and interstate supplies of goods and/or services made from the state/ UT
excluding taxes. Like aggregate turnover, the value of inward supplies on which taxation is based
on reverse-charge mechanism shall not be admitted.
(113).Usual place of residence means:
a. In the case of an individual, the place where he ordinarily resides
b. In other cases, the place where the person is incorporated or otherwise legally
constituted

Some other Important Definitions and concept under GST
(1). Goods and Services Tax Network (GSTN) is a non-profit, public-private partnership company. Its
main purpose is to provide IT infrastructure and services to Central and State Governments,
taxpayers, and other stakeholders to facilitate the implementation of GST.
(2). GST Suvidha Provider (GSP) refers to third-party applications that assist the taxable person in
accessing the GST portal in an enriched manner by being more user-friendly and customer-
centred.
(3). Harmonized System Nomenclature (HSN) Code is a numeral used to classify goods for taxation
purposes. HSN used for VAT purposes shall be adopted under GST.
(4). Supply shall refer to supply of goods and/or services such as sale, transfer, barter, exchange,
license, rental, lease, or disposal made or agreed to be made for a consideration by a person in
the course of business.
(5). Tax return preparer is any person approved to act as a tax return preparer under the scheme
framed.
(6). Zero-rated supply means supply of any goods and/or services regarding section 16 of the IGST
Act.

Other Detailed Presentation
For more details and reference please refer to my Presentations at Slide share
1) Presentation on GST https://www.slideshare.net/narayanlodha/a-presentation-on-gst
2) Input Credit under GST https://www.slideshare.net/narayanlodha/1-presentation-on-input-tax-
credit-under-gst
3) Illustrative guide how the transaction will take place good and service tax
https://www.slideshare.net/narayanlodha/ilustrative-guide-how-the-transaction-will-take-place-
good-and-service-tax
4) Goods and Services Tax (GST) Compliances and Returns
https://www.slideshare.net/narayanlodha/gst-compliances-and-returns
5) Summary of GST rates as on 18-05-2017 https://www.slideshare.net/narayanlodha/gst-rates-as-on-
18-05-2017
6) Chapter wise rate of GST on goods as on 18 05 2017
https://www.slideshare.net/narayanlodha/chapter-wiseratewisegstschedule18052017
7) GST Compensation Cess to be levied on certain goods
https://www.slideshare.net/narayanlodha/gst-compensationcessrates18052017
8) Chapter wise rate of Services under GST as on 19 05 2017
https://www.slideshare.net/narayanlodha/schedule-of-gst-rates-for-services
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#indirecttax, #law, #narayanlodha, #taxation, gst, gstrates, india, Credit note, Debit note, Electronic cash
ledger, Definitions, Glossary

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GST important definitions and glossary

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GST important definitions and glossary