INTERPRETATION OF CENTRAL GOODS AND SERVICES TAX (CGST) ACT (PART-7)(Meaning of Important Terms)
By: – Dr. Sanjiv Agarwal
Goods and Services Tax – GST
Dated:- 29-5-2017
This part of the series contains meanings of certain terms covered in Section 2 of the CGST Act, 2017. These are Goods, Government, GST Practitioner, India, Input, Input Service , Input Service Distributor, Input Tax and Input Tax Credit.
Goods [Section 2(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.
A very wide definition of goods covering all movable properties with the exception of money and securities have been provided in GST law. Immovable properties are not included in 'goods'. For the first time in indirect taxation, actionable claims have been considered as goods b
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General Clauses Act 1897, defines Central Government as under:
"Central Government" shall in relation to anything done or to be done after the commencement of the Constitution, means the President; and shall include-
* in relation to functions entrusted under clause (1) of article 258 of the Constitution, to the Government of a State, the State Government acting within the scope of the authority given to it under that clause;
* in relation to the administration of a Part C State, the Chief Commissioner or the Lieutenant-Governor or the Government of a neighboring State or other authority acting within the scope of the authority given to him or it under article 239 or article 243 of the Constitution, as the case may be; and
* in relation to the administration of a Union Territory, the administrator thereof acting within the scope of the authority given to him under article 239 of the Constitution;
GST Practitioner [Section 2(55)]
'Goods and services tax practition
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orial waters, continental shelf, exclusive economic zone or any other maritime zone as defined in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976;
* the seabed and the subsoil underlying the territorial waters;
* the air space above its territory and territorial waters; and
* the installations, structures and vessels located in the continental shelf of India and the exclusive economic zone of India, for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof.
It is important to note that the definition of term ' India' does not specifically include installation, structure and vessels located in continental shelf and exclusive economic zone for the purpose of extracting/ prospecting/ production of mineral oil and natural gas and supply thereof.
Input [Section 2(59)]
'Input' means any goods other than capital goods used or intended to be used by a supplier in the cours
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e eligible for availment of input tax credit.
It should be a service(not a good). Such service should be used or intended to be used by supplier in the course of or furtherance of business.
Input Service Distributor [Section 2(61)]
'Input Service Distributor' means an office of the supplier of goods or services or both which receives tax invoices issued under Section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax, State tax, integrated tax or Union territory tax paid on the said services to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the said office.
The term 'Input Service distributor' has been defined in section 2(61) of GST law to mean:
* An office of the supplier of goods and / or services,
* Which receives tax invoices issued under Section 31,
* Towards receipt of input services ,
* Who issues tax invoices or such other d
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other offices under the same PAN which are engaged in supply of goods and / or services.
The ISD is entitled to take credit of services used by it and further, ISD has been made eligible for distributing the credit of ITC so accumulated to various other units proportionately. Under the provisions of Section 24 of CGST law, every ISD is required to be registered under the Act.
Input Tax [Section 2(62)]
'Input tax' in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or
both made to him and includes-
* the integrated goods and services tax charged on import of goods;
* the tax payable under the provisions of sub-sections (3) and (4) of section 9;
* the tax payable under the provisions of sub-section (3) and (4) of section 5 of the Integrated Goods and Services Tax Act;
* the tax payable under the provisions of sub-section (3) and sub-section (4) of section 9 of the respe
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tax paid as composition levy under the provisions of section 10 will not be considered as an input tax.
Input Tax Credit [Section 2(63)]
'Input tax credit' means the credit of input tax.
Input tax credit means credit of input tax as defined in section 2(62). From the definition of input tax and Input tax credit, it is important to note that:
* The credit of CGST, SGST, IGST and UTGST and tax paid under reverse charge mechanism shall be available as input tax credit (ITC).
* The tax credit is available to registered taxable person only.
* Tax credit is a tax charged on goods and services supplied to taxable person.
* Goods and services on which credit is eligible should be used or meant to be used in the course or furtherance of business of such taxable person.
(To be continued…..)
Reply By ANIL ANIKHINDI as =
Dear Dr. Sanjiv Agarwal
Very good article. I think you should publish a book compiling all your articles written so far on GST.
Dated: 30-5-2017
S
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