This book provides a basic-working-knowledge of the GST mechanism, right from understanding the GST Process to the procedure & payment of tax & penalties under the law. It provides a basic understanding of the GST law and guidance on various compliances under GST law. All complex provisions have been explained with lucid & simple language, examples, FAQs, flow charts, and diagrams. This book is the second edition amended up to 1st July 2020. This book contains: • GST Compliance Chart for April-September 2020 • Basis provisions of GST • GST Returns along with due dates • Provisions pertaining to Offences & penalties

2. TEAM WORK MAKES THE DREAM WORK
The above phrase truly justifies the efforts with which
this book “GST - Mini ready reckoner” has been
drafted. The book is drafted with a view to provide
the readers an understanding of GST and an ease in
complying with the GST law. With the simplicity of
language used, the sole aim was to deliver a handy book
which would provide the basic working knowledge of
GST mechanism.
We feel proud to acknowledge that this is our 2nd
publication on GST, which would not have been
possible without the mutual efforts of our team.
The Vision of this publication was to make even a
common man understand the concepts of GST Law
and also to meet the requirements of beginners &
professionals belonging to this field. The book will
take you step by step through the process of GST
mechanism starting from the meaning of Goods &
Services to the end procedure of payment of tax &
penalties under the law.
In this book, we have tried to explain each and every
concept to its fullest through the relevant examples,
Preface
I-7

3. FAQs, flow charts and diagrams. This method will help
you to understand, to implement and to comply with
the complicated law of GST.
CA AKHIL SINGLA
PAVAN KUMAR GAUR
CA MAYANK GOEL
P R E F A C E
I-8

4. P A G E
About the Authors I-5
Preface I-7
Acknowledgements I-9
GST Compliance Chart for April-September 2020 I-11
Chapter-heads I-15
1
LEVY AND COLLECTION ON SUPPLY
1.1
I n t r o d u c t i o n
1
1.2
L e v y a n d c o l l e c t i o n u n d e r C G S T A c t & I G S T A c t
( r e f e r s e c t i o n 9 o f C G S T A c t & s e c t i o n 5 o f I G S T A c t )
2
1.3
R e v e r s e C h a r g e M e c h a n i s m - G o o d s ( S e c t i o n 9 ( 3 ) o f
C G S T A c t , 2 0 1 7 )
4
1.4
R e v e r s e C h a r g e M e c h a n i s m - G o o d s ( S e c t i o n 9 ( 4 )
o f t h e C G S T A c t )
6
1.5
R e v e r s e C h a r g e M e c h a n i s m - S e r v i c e s ( S e c t i o n 9 ( 3 )
o f t h e C G S T A c t )
6
1.6
R e v e r s e c h a r g e o n s p e c i f i e d c l a s s o f r e g i s t e r e d
p e r s o n s
11
1.7
L e v y b y E - c o m m e r c e o p e r a t o r o n c e r t a i n N o t i f i e d
T r a n s a c t i o n s ( S e c t i o n 9 ( 5 ) o f t h e C G S T A c t )
12
Contents
I-17

5. P A G E
1.8
I G S T o n I m p o r t e d G o o d s
14
1.9
S c o p e o f S u p p l y ( R e f e r S e c t i o n 7 o f C G S T A c t , 2 0 1 7 )
15
1.10
L i s t o f S u p p l i e s c o v e r e d i n S c h e d u l e I ( S e c t i o n 7 o f
C G S T A c t , 2 0 1 7 )
19
1.11
L i s t o f S u p p l i e s c o v e r e d i n S c h e d u l e I I
23
1.12
S c h e d u l e I I I ( S e c t i o n 7 o f C G S T A c t , 2 0 1 7 )
30
1.13
S e c t i o n 8 o f C G S T A c t , 2 0 1 7 : C o m p o s i t e & m i x e d
s u p p l y
33
1.14
T i m e o f s u p p l y
34
1.15
T i m e f o r s o m e c l a r i f i c a t i o n s
35
2
NATURE OF SUPPLY
2.1
R e l e v a n c e o f N a t u r e o f S u p p l y i n G S T
37
2.2
I m p o r t a n c e o f d e t e r m i n i n g N a t u r e o f S u p p l y
38
2.3
D e t e r m i n a t i o n o f n a t u r e o f s u p p l y
39
2.4
D e t e r m i n a t i o n o f s u p p l y a s I n t e r - S t a t e S u p p l y u n d e r
s e c t i o n 7 o f I G S T A c t
39
2.5
D e t e r m i n a t i o n o f s u p p l y a s I n t r a - S t a t e S u p p l y u n d e r
s e c t i o n 8 o f I G S T A c t
42
2.6
D e t e r m i n a t i o n o f s u p p l y a s t e r r i t o r i a l w a t e r s s u p p l y
u n d e r s e c t i o n 9
43
2.7
M e a n i n g o f p l a c e o f s u p p l y
44
2.8
P i l l a r s f o r d e t e r m i n i n g t h e t a x c a t e g o r y o f G o o d s &
S e r v i c e s
44
2.9
D e t e r m i n a t i o n o f l o c a t i o n o f s u p p l i e r / R e c i p i e n t
44
2.10
I m p o r t a n c e o f c o n c e p t o f p l a c e o f s u p p l y
45
2.11
C o n s e q u e n c e s o f w r o n g s e l e c t i o n o f p l a c e o f s u p p l y
45
2.12
P l a c e o f s u p p l y i n c a s e o f g o o d s
46
2.13
P l a c e o f s u p p l y i n c a s e o f s e r v i c e s
49
C O N T E N T S
I-18

6. P A G E
3
TIME AND VALUE OF SUPPLY
3.1
T i m e o f s u p p l y m e a n s & r e l e v a n c e
64
3.2
T i m e o f s u p p l y i n c a s e o f g o o d s ( S e c t i o n 1 2 o f C G S T
A c t , 2 0 1 7 )
64
3.3
T i m e o f s u p p l y i n c a s e o f s e r v i c e s ( S e c t i o n 1 3 o f
C G S T A c t , 2 0 1 7 )
66
3.4
T i m e o f s u p p l y i n c a s e o f s u p p l y o f v o u c h e r o f g o o d s
o r s e r v i c e s
69
3.5
T i m e o f s u p p l y i n o t h e r c a s e s n o t c o v e r e d a b o v e
70
3.6
T i m e o f s u p p l y i n c a s e o f a d d i t i o n o f v a l u e
70
3.7
T i m e o f s u p p l y w h e r e t h e r e i s a c h a n g e i n t h e r a t e o f
t a x i n r e s p e c t o f s u p p l y o f g o o d s o r s e r v i c e s ( S p e c i f i c
P r o v i s i o n ) ( S e c t i o n 1 4 o f C G S T A c t , 2 0 1 7 )
70
3.8
V a l u e o f t a x a b l e s u p p l y a s p e r s e c t i o n 1 5 o f C G S T A c t
71
3.9
R u l e s t o d e t e r m i n e t h e v a l u e o f s u p p l y
73
4
INPUT TAX CREDIT (ITC)
4.1
D e f i n i t i o n s o f I T C ( I n p u t T a x C r e d i t ) & f e w t e r m s
u s e d i n t h i s c h a p t e r
85
4.2
E l i g i b i l i t y a n d c o n d i t i o n s f o r t a k i n g I n p u t T a x C r e d i t
( I T C ) ( S e c t i o n 1 6 r e a d w i t h R u l e s 3 6 & 3 7 o f C G S T
R u l e s )
86
4.3
A p p o r t i o n m e n t , d e t e r m i n a t i o n & r e v e r s a l o f I T C a n d
B l o c k e d C r e d i t ( S e c t i o n 1 7 r e a d w i t h r u l e s 3 8 , 4 2 &
4 3 o f C G S T R u l e s )
92
4.4
A v a i l a b i l i t y & r e v e r s a l o f I T C i n s p e c i a l c i r c u m s t a n c e s
u n d e r G S T ( S e c t i o n 1 8 r e a d w i t h r u l e s 4 0 , 4 1 , 4 1 A &
4 4 o f C G S T R u l e s )
117
4.5
R u l e s & p r o v i s i o n s f o r t a k i n g I T C i n r e s p e c t o f i n p u t s
a n d c a p i t a l g o o d s s e n t f o r j o b w o r k ( S e c t i o n 1 9 r e a d
w i t h R u l e 4 5 o f C G S T R u l e s )
122
I-19
C O N T E N T S

7. P A G E
4.6
R u l e s & p r o v i s i o n s f o r t h e d i s t r i b u t i o n o f I T C b y I n p u t
S e r v i c e D i s t r i b u t o r ( I S D ) ( S e c t i o n 2 0 r e a d w i t h R u l e
3 9 o f C G S T R u l e s )
124
5
GST REGISTRATION & TYPES
OF TAXPAYERS
5.1
P e r s o n s l i a b l e f o r G S T r e g i s t r a t i o n
130
5.2
P e r s o n s e x e m p t e d f r o m G S T r e g i s t r a t i o n
133
5.3
C o m p u l s o r y G S T r e g i s t r a t i o n i n c e r t a i n c a s e s
134
5.4
O t h e r g e n e r a l p r o v i s i o n s i n G S T r e g i s t r a t i o n
138
5.5
D o c u m e n t s r e q u i r e d f o r G S T r e g i s t r a t i o n
139
5.6
D i s p l a y o f G S T N o .
140
5.7
P r o h i b i t i o n o f u n a u t h o r i z e d c o l l e c t i o n o f t a x
140
5.8
P e n a l t i e s f o r n o t o b t a i n i n g G S T r e g i s t r a t i o n
140
5.9
I s s u e o f r e g i s t r a t i o n c e r t i f i c a t e ( R C )
140
5.10 Suo motu
r e g i s t r a t i o n
141
5.11
C a n c e l l a t i o n o f G S T r e g i s t r a t i o n
142
5.12
R e v o c a t i o n o f c a n c e l l a t i o n o f G S T r e g i s t r a t i o n
144
5.13
T y p e s o f t a x p a y e r s i n G S T
145
6
COMPOSITION SCHEME UNDER GST
(SECTION 10)
6.1
I n t r o d u c t i o n
155
6.2
T h r e s h o l d l i m i t f o r c o m p o s i t i o n s c h e m e ( e f f e c t i v e
f r o m 1 - 4 - 2 0 1 9 )
155
6.3
G S T r a t e s a p p l i c a b l e o n c o m p o s i t i o n d e a l e r s [ S e c t i o n
1 0 ( 1 ) ]
158
6.4
E l i g i b i l i t y f o r c o m p o s i t i o n s c h e m e - S e c t i o n 1 0 (
2
)
160
6.5
C o n d i t i o n s & r e s t r i c t i o n s f o r c o m p o s i t i o n s c h e m e
161
C O N T E N T S
I-20

8. P A G E
6.6
N e w C o m p o s i t i o n S c h e m e ( C o n s i d e r e d a s p r e s u m p
-t i v e s c h e m e ) ( a p p l i c a b l e f r o m 1 - 4 - 2 0 1 9 ) ( o p t i o n f o r
t h e s u p p l i e r s o f g o o d s o r s e r v i c e s o r b o t h n o t e l i g i b l e
i n e a r l i e r c o m p o s i t i o n s c h e m e )
162
6.7
C o n d i t i o n s a n d e l i g i b i l i t y f o r t h e p r e s u m p t i v e s c h e m e
163
6.8
R e g i s t r a t i o n a n d i n t i m a t i o n u n d e r t h e s c h e m e
165
6.9
I n t i m a t i o n f o r o p t i n g c o m p o s i t i o n s c h e m e i n F o r m
G S T C M P - 0 2 b y a r e g i s t e r e d p e r s o n [ R u l e 3 ( 3 ) ]
166
6.10
H o w d o c o m p o s i t i o n d e a l e r r a i s e b i l l ?
167
6.11
R e t u r n s t o b e f i l e d b y c o m p o s i t i o n d e a l e r
168
6.12
M e r i t s o f c o m p o s i t i o n s c h e m e
168
6.13
D e m e r i t s o f c o m p o s i t i o n s c h e m e
168
6.14
P e n a l c o n s e q u e n c e s o n a v a i l i n g c o m p o s i t i o n s c h e m e
b y a n i n e l i g i b l e p e r s o n [ S e c t i o n 1 0 ( 5 ) ]
169
6.15
L a p s e o f o p t i o n [ S e c t i o n 1 0 ( 3 ) ]
169
6.16
D i f f e r e n c e b e t w e e n r e g u l a r t a x p a y e r a n d c o m p o s i
-t i o n d e a l e r
169
6.17
L i s t o f v a r i o u s f o r m s f o r c o m p o s i t i o n d e a l e r s
170
6.18
W i t h d r a w a l f r o m t h e c o m p o s i t i o n s c h e m e a n d p r o
-c e d u r e t h e r e a f t e r
171
6.19
A c t i o n s b y t h e G o v e r n m e n t f o r w r o n g l y o p t i n g t h e
s c h e m e
172
7
TAX INVOICE, CREDIT & DEBIT NOTES
7.1
W h a t i s a T a x I n v o i c e ?
175
7.2
T i m e l i m i t f o r i s s u i n g t a x i n v o i c e
175
7.3
M a n n e r o f i s s u i n g T a x I n v o i c e
177
7.4
P a r t i c u l a r s o f T a x I n v o i c e
178
7.5
P a r t i c u l a r s o f E x p o r t I n v o i c e
178
7.6
H S N / S A C c o d e i n i n v o i c e
179
I-21
C O N T E N T S

9. P A G E
7.7
B i l l o f S u p p l y
179
7.8
R e v i s e d I n v o i c e
180
7.9
R e c e i p t V o u c h e r
181
7.10
R e f u n d V o u c h e r
182
7.11
I n v o i c e - c u m - b i l l o f s u p p l y
182
7.12
P a y m e n t V o u c h e r s
182
7.13
I n v o i c e i n c a s e o f T r a n s p o r t e r
183
7.14
C r e d i t N o t e ( I n r e l a t i o n t o s a l e s o r o u t w a r d s u p p l i e s )
184
7.15
D e b i t N o t e ( I n r e l a t i o n t o s a l e s o r o u t w a r d s u p p l i e s )
185
7.16
E - I n v o i c e & Q R C o d e ( A p p l i c a b l e f r o m 1 - 1 0 - 2 0 2 0 b u t
s u b j e c t t o a n y f u r t h e r d e f e r m e n t b y t h e G o v e r n m e n t )
185
8
E-WAY BILL
8.1
O v e r v i e w o f e - w a y b i l l
190
8.2
B e n e f i t s o f e - w a y b i l l
191
8.3
E x p l a n a t i o n s o f a l l t h e p r o v i s i o n s r e l a t e d t o e - w a y B i l l
( S e c t i o n 6 8 o f C G S T A c t & R u l e 1 3 8 o f C G S T R u l e s )
191
9
ACCOUNTS & RECORDS
9.1
R e q u i r e m e n t t o m a i n t a i n a c c o u n t s a n d r e c o r d s
u n d e r G S T
211
9.2
A c c o u n t s t o b e m a i n t a i n e d f o r
212
9.3
G e n e r a l p r o v i s i o n s g o v e r n i n g m a i n t e n a n c e o f
A c c o u n t s
212
9.4
S p e c i f i c p r o v i s i o n s g o v e r n i n g m a i n t e n a n c e o f
A c c o u n t s
213
9.5
M a n n e r o f m a i n t e n a n c e o f r e c o r d s
215
9.6
R e q u i r e m e n t t o g e t a c c o u n t s a u d i t e d
216
C O N T E N T S
I-22

10. P A G E
9.7
P e r i o d o f R e t e n t i o n o f A c c o u n t s u n d e r G S T
217
9.8
C o n c l u s i o n
219
10
GST RETURNS
10.1
D e f i n i t i o n o f G S T r e t u r n
222
10.2
P e r s o n s r e q u i r e d t o f i l e G S T r e t u r n s
222
10.3
B e n e f i t s o f f i l i n g G S T r e t u r n s
222
10.4
T y p e s o f G S T r e t u r n s a n d t h e i r d u e d a t e s
223
10.5
L a t e f e e s f o r f i l i n g G S T r e t u r n s a f t e r d u e d a t e
226
10.6
N e w G S T r e t u r n s ( A p p l i c a b l e f r o m O c t o b e r 2 0 2 0 )
226
10.7
U p d a t e d p r o v i s i o n s r e g a r d i n g t h e d u e d a t e s , l a t e f e e s
& i n t e r e s t f o r t h e G S T r e t u r n s a s p e r t h e N o t i f i c a t i o n s
i s s u e d t i l l 2 7 t h J u n e 2 0 2 0
231
11
PAYMENT OF TAX & OTHER DUES
11.1
S e c t i o n 4 9 o f C G S T A c t , 2 0 1 7 - P a y m e n t o f T a x ,
I n t e r e s t , P e n a l t y a n d o t h e r A m o u n t s
236
11.2
S e c t i o n 4 9 A o f C G S T A c t , 2 0 1 7 - U t i l i z a t i o n o f I n p u t
T a x c r e d i t s u b j e c t t o c e r t a i n c o n d i t i o n s
237
11.3
S e c t i o n 4 9 B o f C G S T A c t , 2 0 1 7 - U t i l i z a t i o n o f I n p u t
T a x c r e d i t s u b j e c t t o c e r t a i n c o n d i t i o n s
238
11.4
R u l e 8 8 A : O r d e r o f u t i l i z a t i o n o f i n p u t t a x c r e d i t
238
11.5
E l e c t r o n i c L i a b i l i t y R e g i s t e r ( R u l e 8 5 o f C G S T R u l e s ,
2 0 1 7 )
240
11.6
R u l e 8 6 A : C o n d i t i o n s o f u s e o f a m o u n t a v a i l a b l e i n
e l e c t r o n i c c r e d i t l e d g e r ( n e w l y i n s e r t e d r u l e )
241
11.7
E l e c t r o n i c C r e d i t L e d g e r ( R u l e 8 6 o f C G S T R u l e s ,
2 0 1 7 )
242
11.8
E l e c t r o n i c C a s h L e d g e r ( R u l e 8 7 o f C G S T R u l e s , 2 0 1 7 )
242
I-23
C O N T E N T S

11. P A G E
11.9
I n t e r e s t o n d e l a y e d p a y m e n t o f t a x ( S e c t i o n 5 0 o f
C G S T A c t , 2 0 1 7 )
244
11.10
T a x D e d u c t e d a t S o u r c e ( S e c t i o n 5 1 o f C G S T A c t ,
2 0 1 7 )
245
11.11
T a x C o l l e c t e d a t S o u r c e ( S e c t i o n 5 2 o f C G S T A c t , 2 0 1 7 )
246
11.12
H o w t o c a l c u l a t e t h e G S T p a y m e n t t o b e m a d e ?
247
11.13
T r a n s f e r o f i n p u t t a x c r e d i t b y t h e G o v e r n m e n t
( S e c t i o n 5 3 o f C G S T A c t , 2 0 1 7 )
247
11.14
T r a n s f e r o f a m o u n t t o c a s h l e d g e r b y t h e G o v e r n m e n t
( S e c t i o n 5 3 A o f C G S T A c t , 2 0 1 7 )
247
12
ZERO RATED SUPPLY & REFUND
12.1
Z e r o r a t e d s u p p l y [ S e c t i o n 1 6 o f I G S T A c t ]
251
12.2
R e f u n d o f t a x [ S e c t i o n 5 4 o f C G S T A c t ]
252
13
ASSESSMENT AND AUDIT
13.0
A s s e s s m e n t u n d e r G S T
260
13.1
I n t r o d u c t i o n [ S e c t i o n 2 (
11
) ]
260
13.2
T y p e s o f a s s e s s m e n t
260
13.3
A s s e s s m e n t b y t a x p a y e r
260
13.4
A s s e s s m e n t b y t a x a u t h o r i t y
261
13.5
A s s e s s m e n t o f n o n - f i l e r s o f r e t u r n s [ S e c t i o n 6 2 ]
265
13.6
A s s e s s m e n t o f u n r e g i s t e r e d r e t u r n s [ S e c t i o n 6 3 ]
266
13.7
S u m m a r y a s s e s s m e n t i n c e r t a i n s p e c i a l c a s e s
267
13.8
A u d i t u n d e r G S T [ S e c t i o n 2 (
13
) ]
268
13.9
T y p e s o f a u d i t a n d w h o c a n c o n d u c t t h e s e a u d i t s
269
13.10
A u d i t b y C h a r t e r e d A c c o u n t a n t o r a C o s t A c c o u n t a n t
269
13.11
R e l e v a n t p o i n t s t h a t m u s t b e k e p t i n m i n d t h r o u g h
-o u t t h e a u d i t
270
C O N T E N T S
I-24

12. P A G E
13.12
S o m e i m p o r t a n t p o i n t s a b o u t t h e F o r m G S T R - 9 C
271
13.13
C o n s e q u e n c e s f o r n o t g e t t i n g a c c o u n t s a u d i t e d a s
p e r l a w i n c a s e o f t u r n o v e r m o r e t h a n
`
2 C r o r e s o r
`
5 c r o r e s a s t h e c a s e m a y b e
271
13.14
A u d i t b y t a x A u t h o r i t i e s ( S e c t i o n 6 5 o f t h e C G S T
A c t , 2 0 1 7 )
272
13.15
N o t i c e r e q u i r e d b e f o r e s t a r t i n g t h e A u d i t u n d e r t h i s
s e c t i o n
272
13.16
T i m e l i m i t f o r c o m p l e t i n g t h e a u d i t
272
13.17
W h a t i s m e a n t b y c o m m e n c e m e n t o f a u d i t ?
272
13.18
W h a t d o c u m e n t s h a l l b e v e r i f i e d b y p r o p e r o f f i c e r ?
273
13.19
D u t y o f r e g i s t e r e d p e r s o n w h i l e c o n d u c t i n g a u d i t
273
13.20
C o m m u n i c a t e t h e d i s c r e p a n c y f o u n d i n t h e a u d i t
273
13.21
A c t i o n t a k e n b y t h e o f f i c e r a f t e r f o u n d i n g d i s c r e p
-a n c y d u r i n g A u d i t
273
13.22
S p e c i a l a u d i t [ S e c t i o n 6 6 ]
274
14
OFFENCES & PENALTIES
14.1
P e n a l t y f o r c e r t a i n o f f e n c e s ( S e c t i o n 1 2 2 o f C G S T
A c t , 2 0 1 7 )
276
14.2
P e n a l t y f o r f a i l u r e t o f u r n i s h i n f o r m a t i o n r e t u r n
( S e c t i o n 1 2 3 o f C G S T A c t , 2 0 1 7 )
280
14.3
P e n a l t y f o r f a i l u r e t o f u r n i s h s t a t i s t i c s ( S e c t i o n 1 2 4
o f C G S T A c t , 2 0 1 7 )
280
14.4
G e n e r a l P e n a l t y ( R e s i d u a r y C l a u s e ) ( S e c t i o n 1 2 5 o f
C G S T A c t , 2 0 1 7 )
281
14.5
G e n e r a l d i s c i p l i n e s r e l a t e d t o p e n a l t y ( S e c t i o n 1 2 6
o f C G S T A c t , 2 0 1 7 )
281
14.6
D e t e n t i o n , s e i z u r e a n d r e l e a s e o f g o o d s a n d c o n
-v e y a n c e s i n t r a n s i t ( S e c t i o n 1 2 9 o f C G S T A c t , 2 0 1 7 )
282
14.7
C o n f i s c a t i o n o f g o o d s o r c o n v e y a n c e s a n d l e v y o f
p e n a l t y ( S e c t i o n 1 3 0 o f C G S T A c t , 2 0 1 7 )
283
14.8
P u n i s h m e n t f o r c e r t a i n o f f e n c e s ( S e c t i o n 1 3 2 o f
C G S T A c t , 2 0 1 7 )
285
I-25
C O N T E N T S

13. 2.1 RELEVANCE OF NATURE OF SUPPLY IN GST
G o o d s a n d S e r v i c e s T a x c o m m o n l y k n o w n a s G S T i s a n i n d i r e c t t a x
w h i c h i s l e v i e d o n m a n u f a c t u r e , s a l e a n d c o n s u m p t i o n o f g o o d s a n d
s e r v i c e s . G S T i s a d e s t i n a t i o n - b a s e d t a x o r c o n s u m p t i o n t a x w h i c h
m e a n s t h a t i t i s l e v i e d a t t h e p l a c e w h e r e g o o d s a n d s e r v i c e s a r e
c o n s u m e d r a t h e r t h a n t h e p l a c e w h e r e t h e y g e t m a n u f a c t u r e d o r
f r o m w h e r e t h e y a r e s u p p l i e d .
T h e n a t u r e o f s u p p l y m e a n s t o d e t e r m i n e w h e t h e r a s u p p l y i s i n t e r -
S t a t e o r i n t r a - S t a t e . I t h e l p s u s t o l e v y t h e t a x t h a t n e e d s t o b e p a i d
b e i t I G S T o r C G S T + S G S T .
NATURE OF SUPPLY
Intra State (Within the state)
Supply
Inter State (Outside the state or
from one state to another) Supply
Central GST
(CGST)
State GST
(SGST)
Dual GST
(IGST)
GST to be levied by
the Centre
GST to be levied by
the State
GST to be levied by the
Centre & States
together
C H A P T E R
2 Nature of Supply
37

14. 2.2 IMPORTANCE OF DETERMINING NATURE OF SUPPLY
F o l l o w i n g a r e t h e r e a s o n s d u e t o w h i c h t h e d e t e r m i n a t i o n o f N a t u r e
o f S u p p l y h a v i n g h u g e i m p o r t a n c e :
u
W r o n g c l a s s i f i c a t i o n o f s u p p l y b e t w e e n i n t e r s t a t e ( i . e . b e t w e e n
t w o d i f f e r e n t s t a t e s ) o r i n t r a s t a t e a n d
vice versa
m a y l e a d t o
d i s t r e s s f o r t h e t a x p a y e r a s p e r I G S T A c t a n d C G S T A c t .
u
I f t a x e s h a v e b e e n p a i d d u e t o w r o n g c l a s s i f i c a t i o n , t h e n t h e
t a x p a y e r h a v e t o p a y t h e c o r r e c t t a x a g a i n & s e e k i n g r e f u n d
f o r w r o n g t a x . I t w i l l h a v e h u g e i m p a c t o n w o r k i n g c a p i t a l .
u
A l s o , c o r r e c t d e t e r m i n a t i o n o f n a t u r e o f s u p p l y w i l l h e l p u s i n
k n o w i n g t h e i n c i d e n c e o f t a x , a s i f p l a c e o f s u p p l y i s d e t e r m i n e d
a s a p l a c e o u t s i d e I n d i a t h e n t a x w i l l n o t h a v e t o b e p a i d o n
t h a t t r a n s a c t i o n .
I t i s v e r y d i f f i c u l t f o r t a x p a y e r s t o i d e n t i f y t h e c a t e g o r y t r a n s a c t i o n s
o f ( i . e . I n t e r o r I n t r a s t a t e ) . S o , f o r k n o w i n g t h e c o r r e c t t r a n s a c t i o n t h e
t a x p a y e r m u s t h a v e t o u n d e r s t a n d t h e c o n c e p t o f n a t u r e o f s u p p l y
w h i c h h e l p s t o d e t e r m i n e w h i c h t y p e o f G S T i s t o b e p a i d , w h e t h e r
I G S T , C G S T o r S G S T a n d h o w t h e d e a l e r s h a v e t o a c c o u n t f o r I n p u t
T a x C r e d i t o n i n w a r d s u p p l i e s a n d o u t w a r d s u p p l i e s .
Kindly note: -
u Intra-state transactions are transactions which are occurring
within the state.
u Inter-state transactions are transactions which are occurring
from one state to another.
N a t u r e o f s u p p l y h e l p s i n d e t e r m i n i n g t h e c o m p o n e n t s o f t a x e s w h i c h
c a n b e u n d e r s t o o d w i t h t h e b e l o w d i a g r a m : -
Para 2.2
N A T U R E O F S U P P L Y
38

15. I G S T
( I n t e g r a t e d T a x )
I G S T i s a p p l i c a b l e o n i n t e r s t a t e a n d i m p o r t t r a n s a c t i o n s a n d t a x c o l l e c t e d i s
s h a r e d b e t w e e n C e n t r e a n d S t a t e G o v t .
C G S T
( C e n t r a l G S T )
C G S T i s a p p l i c a b l e o n s u p p l i e s w i t h i n s t a t e a n d t a x c o l l e c t e d i s s h a r e d t o
C e n t r e G o v t . o n l y .
S G S T
( S t a t e G S T )
S G S T i s a p p l i c a b l e o n s u p p l i e s w i t h i n s t a t e a n d t a x c o l l e c t e d i s s h a r e d t o s t a t e
G o v t . o n l y .
U T G S T ( U n i o n
t e r r i t o r y G S T )
U T G S T i s a p p l i c a b l e o n s u p p l i e s w i t h i n u n i o n t e r r i t o r y s t a t e a n d t a x c o l l e c t e d
i s s h a r e d t o u n i o n t e r r i t o r y G o v t . o n l y .
2.3 DETERMINATION OF NATURE OF SUPPLY
I n I n t e g r a t e d G o o d s a n d S e r v i c e s T a x ( I G S T ) A c t , 2 0 1 7 C h a p t e r I V
d e a l s w i t h t h e d e t e r m i n a t i o n o f n a t u r e o f s u p p l y , u n d e r w h i c h t h e r e
a r e t h r e e S i t u a t i o n s a s f o l l o w s : -
a
.
I n t e r - S t a t e S u p p l y
b
.
I n t r a - S t a t e S u p p l y
c
.
S u p p l y i n T e r r i t o r i a l W a t e r s .
2.4DETERMINATIONOFSUPPLYASINTER-STATESUPPLYUNDER
SECTION 7 OF IGST ACT
I n t h e f o l l o w i n g c a s e s , t h e s u p p l y s h a l l b e t r e a t e d a s i n t e r - s t a t e s u p p l y
2.4.1
C o n s i d e r i n g t h e r u l e s o f P l a c e o f S u p p l y , s u p p l y o f g o o d s s h a l l
b e t r e a t e d a s i n t e r - s t a t e s u p p l y , w h e r e t h e l o c a t i o n o f t h e s u p p l i e r
a n d t h e p l a c e o f s u p p l y a r e i n
-
39
D E T E R M I N A T I O N O F S U P P L Y
Para 2.4

16. (a) two different States;
u Example
- M r . V i j a y f r o m D e l h i s u p p l i e s 1 0 T V s e t s t o
M r . S a n j a y i n H a r y a n a . I n t h i s t r a n s a c t i o n , i t w i l l b e
I n t e r - S t a t e t r a n s a c t i o n s t h e l o c a t i o n o f s u p p l i e r a n d
t h e p l a c e o f s u p p l y a r e i n t w o d i f f e r e n t s t a t e s . H e n c e ,
I G S T w i l l b e c h a r g e d .
(b) two different Union territories; or
u Example
- M r . V a n i s h s u p p l i e s l a p t o p f r o m D a m a n &
D i u t o M i s s A v a n t i i n C h a n d i g a r h . W e c a n s e e t h a t h e r e
t r a n s a c t i o n s h e l d i n t w o d i f f e r e n t u n i o n t e r r i t o r i e s s o
t h i s t r a n s a c t i o n w i l l b e I n t e r - S t a t e t r a n s a c t i o n . H e n c e ,
I G S T w i l l b e c h a r g e d .
(c) a State and a Union territory, (from one State to a UT or
vice versa)
u Example
- M r . R a v i s u p p l i e s g o o d s f r o m G o a t o M r .
M a y a n k i n D a m a n a n d D i u . I n t h i s c a s e t r a n s a c t i o n h e l d
i n o n e s t a t e t o a n o t h e r u n i o n t e r r i t o r y s o t h i s t r a n s a c
-t i o n w i l l b e I n t e r - S t a t e t r a n s a c t i o n . H e n c e , I G S T w i l l
b e c h a r g e d .
2.4.2
S u p p l y o f g o o d s i m p o r t e d i n t o t h e t e r r i t o r y o f I n d i a , t i l l t h e y
c r o s s t h e c u s t o m s f r o n t i e r s o f I n d i a , s h a l l b e t r e a t e d t o b e a s u p p l y
o f g o o d s i n t h e c o u r s e o f i n t e r - S t a t e t r a d e o r C o m m e r c e .
2.4.3
C o n s i d e r i n g t h e r u l e s o f p l a c e o f s u p p l y , s u p p l y o f s e r v i c e s s h a l l
b e t r e a t e d a s i n t e r - s t a t e s u p p l y , w h e r e t h e l o c a t i o n o f t h e s u p p l i e r
a n d t h e p l a c e o f s u p p l y a r e i n
-
(a) two different States;
u Example
- M r . A f r o m G u j a r a t p r o v i d e s c o n s u l t a n c y
s e r v i c e s t o M r . B i n M u m b a i . I n t h i s t r a n s a c t i o n , i t w i l l
b e I n t e r - S t a t e t r a n s a c t i o n a s t h e l o c a t i o n o f s u p p l i e r a n d
t h e p l a c e o f s u p p l y a r e i n t w o d i f f e r e n t s t a t e s . H e n c e ,
I G S T w i l l b e c h a r g e d .
(b) two different Union territories; or
u Example
- M r . A n o r a k p r o v i d e s C A c l a s s e s f r o m L a k
-s h a d w e e p t o M r . B a s u i n C h a n d i g a r h . I n t h i s t r a n s a c
-t i o n , i t w i l l b e I n t e r - S t a t e t r a n s a c t i o n a s t h e l o c a t i o n
o f s u p p l i e r a n d t h e p l a c e o f s u p p l y a r e i n t w o d i f f e r e n t
u n i o n t e r r i t o r i e s . H e n c e , I G S T w i l l b e c h a r g e d .
Para 2.4
N A T U R E O F S U P P L Y
40

17. (c) a State and a Union territory,
u Example
- M r . R a m p r o v i d e s C A c l a s s e s f r o m U P t o M r .
R o t a n i n D a m a n a n d D i u . I n t h i s t r a n s a c t i o n , i t w i l l b e
I n t e r - S t a t e t r a n s a c t i o n a s t h e l o c a t i o n o f s u p p l i e r a n d
t h e p l a c e o f s u p p l y a r e i n a s t a t e a n d u n i o n t e r r i t o r y .
H e n c e , I G S T w i l l b e c h a r g e d .
2.4.4
S u p p l y o f s e r v i c e s i m p o r t e d i n t o t h e t e r r i t o r y o f I n d i a s h a l l b e
t r e a t e d t o b e a s u p p l y o f s e r v i c e s i n t h e c o u r s e o f i n t e r - S t a t e t r a d e
o r c o m m e r c e .
u Example
- M s . M a l i k a i m p o r t s S o f t w a r e S e r v i c e s f r o m L o n
-d o n f o r h e r i . e . i n I n d i a . A s p e r s e c t i o n 7 o f I G S T A c t , i f a n y
t r a n s a c t i o n s h e l d o f i m p o r t t h e n i t a t t r a c t s I G S T t a x l i a b i l i t y
a n d a l s o i n t h i s c a s e M s . M a l i k a d o i n g t r a n s a c t i o n o f i m p o r t .
2.4.5
S u p p l y o f g o o d s o r s e r v i c e s o r b o t h s h a l l b e t r e a t e d a s i n t e r -
s t a t e s u p p l y i n t h e f o l l o w i n g c a s e s :
(a) WhenthesupplierislocatedinIndiaandtheplaceofsupply
is outside India (export);
u Example
- M r . A j a y f r o m D e l h i e x p o r t s A y u r v e d i c
m e d i c i n e s t o M r . T o m i n U . K . A s p e r s e c t i o n 7 o f I G S T
A c t , i f a n y t r a n s a c t i o n s h e l d o f e x p o r t t h e n i t a t t r a c t s
I G S T t a x l i a b i l i t y a n d a l s o i n t h i s c a s e M r . A j a y d o i n g
t r a n s a c t i o n s o f e x p o r t .
(b) Supply to or by a Special Economic Zone developer or a
Special Economic Zone unit; or (export)
u Example
- T a x a b l e p e r s o n ( n o n - S E Z ) l o c a t e d i n D w a r k a
D e l h i s u p p l y i n g g o o d s t o a S E Z u n i t l o c a t e d i n L a x m i
-n a g a r D e l h i i s a s u p p l y i n t h e c o u r s e o f i n t e r - S t a t e t r a d e
o r c o m m e r c e . E v e n t h o u g h b o t h a r e l o c a t e d i n D e l h i
i t s e l f , s t i l l d u e t o t h i s c l a u s e i t w i l l b e t r e a t e d a s I G S T
t r a n s a c t i o n .
u Example
- S E Z u n i t i n M u m b a i s u p p l y i n g s e r v i c e s t o
a n o t h e r S E Z u n i t i n M u m b a i i s a s u p p l y i n t h e c o u r s e
o f i n t e r - S t a t e t r a d e o r c o m m e r c e .
u Example
- E x p o r t o f g o o d s b y a S E Z u n i t t o a c u s t o m e r
i n I t a l y i s a s u p p l y i n t h e c o u r s e o f i n t e r - S t a t e t r a d e o r
c o m m e r c e .
41
D E T E R M I N A T I O N O F S U P P L Y
Para 2.4

18. (c) Supply in the taxable territory, not being an intra-State
supply and not covered elsewhere in this section, shall be
treated to be a supply of goods or services or both in the
course inter-state supply.
E x p l a n a t i o n
to sub-clause
( c )
please note this clause is a residuary
clause, be which if a transaction cannot be covered. Elsewhere, it
will be covered automatically as IGST transaction.
Points to be noted (for location of Supplier/Recipient)
Sl.
No.
Case Location of Supplier/Recipient
of service
1
W h e r e a s u p p l y i s m a d e / r e c e i v e d
a t a p l a c e o f b u s i n e s s f o r w h i c h
t h e r e g i s t r a t i o n i s o b t a i n e d .
S u c h p l a c e o f b u s i n e s s .
2
W h e r e a s u p p l y i s m a d e / r e c e i v e d
a t a p l a c e o t h e r t h a n t h e p l a c e o f
b u s i n e s s f o r w h i c h r e g i s t r a t i o n
h a s b e e n o b t a i n e d ( a f i x e d
e s t a b l i s h m e n t ) .
S u c h fi x e d e s t a b l i s h m e n t .
3
W h e r e s u p p l y i s m a d e / r e c e i v e d
a t m o r e t h a n o n e p l a c e .
S u c h p l a c e w h i c h i s m o r e d i r e c t l y
r e l a t e d w i t h t h e s u p p l y .
4
I n o t h e r c a s e s R e s i d e n c e o f S u p p l i e r / R e c i p i e n t .
For further explanation, Kindly refer Point 2.9
2.5DETERMINATIONOFSUPPLYASINTRASTATESUPPLYUNDER
SECTION 8 OF IGST ACT
I f , t h e l o c a t i o n o f t h e s u p p l i e r & t h e p l a c e o f s u p p l y o f g o o d s o r
s e r v i c e s a r e i n t h e s a m e s t a t e o r u n i o n t e r r i t o r y t h e n i t i s c o n s i d e r e d
a s a n I n t r a - S t a t e s u p p l y .
2.5.1
S u p p l y o f g o o d s w h e r e t h e l o c a t i o n o f t h e s u p p l i e r a n d t h e p l a c e
o f s u p p l y o f g o o d s a r e i n t h e s a m e S t a t e o r s a m e U n i o n t e r r i t o r y
s h a l l b e t r e a t e d a s i n t r a - S t a t e s u p p l y :
u Example
- M r . R a m p r o v i d e s t u i t i o n c l a s s e s f r o m D w a r k a ,
D e l h i t o M r . H a r i i n L a x m i n a g a r , D e l h i . I n t h i s t r a n s a c t i o n , i t
w i l l b e I n t r a - S t a t e t r a n s a c t i o n a s t h e l o c a t i o n o f s u p p l i e r a n d
t h e p l a c e o f s u p p l y a r e i n s a m e s t a t e . S i n c e , C G S T & S G S T
w i l l b e c h a r g e d .
u Example
- M r . S a n j e e v p r o v i d e s I E L T S c l a s s e s f r o m P u n e t o
M r . R a j e e v i n P u n e i t s e l f . I n t h i s c a s e , t r a n s a c t i o n o c c u r r i n g
w i t h i n a s t a t e . S i n c e , C G S T & S G S T w i l l b e l e v i e d .
Para 2.5
N A T U R E O F S U P P L Y
42

19. Provided
t h a t t h e f o l l o w i n g s u p p l y o f g o o d s s h a l l n o t b e t r e a t e d a s
i n t r a - S t a t e s u p p l y , n a m e l y :
(
i
)
Supply of goods to or by a Special Economic Zone developer
or a Special Economic Zone unit;
(
ii
)
Goods imported into the territory of India till they cross the
customs frontiers of India; or
(
iii
)
Supplies made to a tourist referred to in section 15.
2.5.2
S u p p l y o f s e r v i c e s w h e r e t h e l o c a t i o n o f t h e s u p p l i e r a n d t h e
p l a c e o f s u p p l y o f s e r v i c e s a r e i n t h e s a m e S t a t e o r s a m e U n i o n
t e r r i t o r y s h a l l b e t r e a t e d a s i n t r a - S t a t e s u p p l y :
Provided
t h a t t h e i n t r a - s t a t e s u p p l y o f s e r v i c e s s h a l l n o t i n c l u d e
s u p p l y o f s e r v i c e s t o o r b y a S p e c i a l E c o n o m i c Z o n e d e v e l o p e r o r a
S p e c i a l E c o n o m i c Z o n e u n i t .
2.6 DETERMINATION OF SUPPLY AS TERRITORIAL WATERS SUP-
PLY UNDER SECTION 9
If the location of the supplier or the place of supply is in territorial
waters, then it should be considered as supply in territorial waters.
Ignoring all the provisions of the act,
(
a
)
where the location of the supplier is in the territorial waters,
the location of such supplier; or
(
b
)
where the place of supply is in the territorial waters, the place
of supply,
shall be deemed to be in the coastal State or Union territory where
the nearest point of the appropriate baseline is located.
u Example
- R e p a i r s e r v i c e s a r e p r o v i d e d b y a c o m p a n y i n D e l h i
o n s h i p m o v e d o f f t h e c o a s t i . e . a n a r e a o f l a n d t h a t i s n e x t t o
t h e s e a o f K o c h i f o r a s h i p p i n g c o m p a n y f r o m U . K , t h e p l a c e
o f s u p p l y o f t h e r e p a i r s s e r v i c e s w i l l n o t b e t h e w a t e r s b u t
K o c h i i t s e l f .
u Example
- I n d i a n O i l h a s o n o f f s h o r e ( s e a w a r d ) o n t h e f i e l d
o f f c o a s t ( s e a b o a r d ) o f M u m b a i . S u p p l i e s f r o m s u c h o i l f i e l d
w o u l d b e d e e m e d t o b e s u p p l i e s f r o m t h e S t a t e o f M a h a r a s h t r a .
43
D E T E R M I N A T I O N O F S U P P L Y
Para 2.6

20. PLACE OF SUPPLY
2.7 MEANING OF PLACE OF SUPPLY
Place of Supply
d e f i n e s w h e t h e r t h e t r a n s a c t i o n w i l l b e c l a s s i f i e d a s
i n t r a - s t a t e ( w i t h i n t h e s t a t e ) o r i n t e r - s t a t e ( o u t s i d e t h e s t a t e ) w h i c h
f u r t h e r d e t e r m i n e s w h a t t a x e s a r e t o b e c h a r g e d i . e . I G S T o r C G S T
& S G S T .
I n o t h e r w o r d s ,
Place of supply
m e a n s t h e p l a c e w h e r e a s u p p l y o f
g o o d s o r s e r v i c e s i s m a d e & w h e r e t h e G S T m a y b e c h a r g e d o r p a i d .
2.8 PILLARS FOR DETERMINING THE TAX CATEGORY OF GOODS
& SERVICES
u
T h e r e a r e t w o p i l l a r s f o r d e t e r m i n i n g t h e t a x c a t e g o r y i n G S T : -
n Location of supplier
&
n Place of Supply
For example
If Location of Supplier = Place of Supply → CGST + SGST
If Location of Supplier ≠ Place of Supply → IGST
2.9 DETERMINATION OF LOCATION OF SUPPLIER/RECIPIENT
u
T h e r e g i s t e r e d ( p r i n c i p a l ) p l a c e o f b u s i n e s s f r o m w h e r e t h e
s u p p l y i s b e i n g m a d e .
u Example
-
X Ltd. Delhi a registered company provides services
to Y Ltd., Mumbai a registered company.
In this above case, the Location of Supplier is registered place
of business i.e. Delhi and Location of Recipient is registered
place of business i.e. Mumbai.
u
T h e p l a c e i . e . f i x e d e s t a b l i s h m e n t o t h e r t h a n a p l a c e o f b u s i n e s s
( m e n t i o n e d i n p o i n t 1 ) f r o m w h e r e t h e s u p p l y i s b e i n g m a d e .
u Example
-
A service provider in the business of renting of
immovable property services has his registered office at Ban-
galore and the property for rent along with an office is located
in Chennai.
In this case, the registered office will be the principal place of business
and the property in Chennai along with the office will be regarded
as a fixed establishment of the service provider.
Para 2.9
N A T U R E O F S U P P L Y
44