GST – GST Law and Procedure – 021 – Chapter Twenty One Integrated Goods and Services Tax Act The introduction of Goods and Services Tax (GST) is a significant reform in the field of indirect taxes in our country. Multiple taxes levied and collected by the Centre and states would be replaced by one tax called Goods and Services Tax (GST). GST is a multi-stage value added tax on consumption of goods or services or both. 2. A dual GST model has been adopted in view of the federal structure of our country. Centre and States will simultaneously levy GST on every supply of goods or services or both which takes place within a State or Union territory. Thus, there shall be two components of GST as under: – i. Central tax (CGST): (levied & collected under the authority of CGST Act, 2017 passed by the Parliament) ii. State tax (SGST) (levied & collected under the authority of SGST Act, 2017 passed by respective State) Why the third tax in the name of IGST? 3. Before discussing the IGST
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om following shortcomings: i. CST is collected and retained by the origin state, which is an aberration. Any indirect tax, by definition is a consumption tax, the incidence of which is borne by the consumer. Logically, the tax should accrue to the destination state having jurisdiction over such consumer. ii. Input Tax Credit (ITC) of CST is not allowed to the buyer which results in cascading of tax (tax on tax) in the supply chain. iii. Various accountal forms are required to be filed in CST viz., C Form, E1, E2, F, I, J Forms etc. which adds to the compliance cost of the business and impedes the free flow of trade. iv. Another negative feature of CST is the opportunity it provides for arbitrage because of the huge difference between tax rates under VAT and CST being levied on intra-State sales and inter-State sales respectively 5. The IGST model would remove all these deficiencies. IGST is a mechanism to monitor the inter-state trade of Goods and services and further to ensure that th
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lizing ITC. The amount of ITC on account of IGST is allowed to be utilized towards payment of IGST, CGST and SGST in that order. 8. Nature of Supply It is very important to determine the nature of supply – whether it is inter-state or intra state, as the kind of tax to be paid (IGST or CGST+SGST) depends on that. i. Inter- state Supply: Subject to place of supply provisions, where the location of the supplier and the place of supply are in- a) two different States; a) two different Union territories; or a) a State and a Union territory, Such supplies shall be treated as a supply of goods or services in the course of inter-State trade or commerce. Any supply of goods or services in the taxable territory, not being an intra-State supply shall be deemed to be a supply of goods or services in the course of inter-State trade or commerce. Supplies to or by SEZ are defined as inter-State supply. Further supply of goods imported into territory of India till they cross the customs frontiers of
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the supplier and the place of supply. Both these terms have been defined in the IGST Act. 9. Location of Supplier broadly is the registered place of business or the fixed establishment of the supplier from where the supply is made. Sometime, a service provider has to go to client location for providing service. However, such place would not be considered as the location of supplier. It has to be either regular place of business or fixed establishment which is having sufficient degree of permanence and suitable structure in terms of human and technical resources. 10. Place of supply 10.1 Place of supply provisions have been framed for goods & services keeping in mind the destination/consumption principle. In other words, place of supply is based on the place of consumption of goods or services. As goods are tangible, the determination of their place of supply based on the consumption principle is not difficult. Generally the place of delivery of goods becomes the place of supply. H
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the time at which the movement of goods terminates for delivery to the recipient. 2 where the goods are delivered to recipient or any person on the direction of third person by way of transfer of title or otherwise, it shall be deemed that third person has received the goods The principal place of business of such person 3 where there is no movement of goods either by supplier or recipient Location of such goods at the time of delivery to recipient 4 where goods are assembled or installed at site The place where the goods are assembled or installed 5 where the goods are supplied on board a conveyance, like vessel, aircraft, train or motor vehicle The place where such goods are taken on board the conveyance 6 Where the place of supply of goods cannot be determined in terms of sub-section (2), (3), (4) and (5) It shall be determined in such manner as may be prescribed B. Place of supply of goods in case of import &Export [Section -11] S.No. Nature of supply of goods Place of Supply 1
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ere the event is actually held or where the park or such other place is located. 5 Organization of an event. B2B : Location of such registered person; B2C: Location where the event is actually held. If event is held outside India :Location of the recipient 6 Transportation of goods including mails B2B : Location of such registered person; B2C : Location at which such goods are handed over for their transportation 7 Passenger transportation. B2B : Location of such registered person; B2C : Place where the passenger embarks on the conveyance for a continuous journey 8 Services on board a conveyance Location of the first scheduled point of departure of that conveyance for the journey. 9 Telecommunication services. Services involving fixed line, circuits, dish etc., place of supply is location of such fixed equipment. In case of mobile/ internet post-paid services, it is location of billing address of the recipient. In case of sale of pre-paid voucher, place of supply is place of sale of su
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pply of services in case of cross-border supplies 🙁 Section 13) (Where the location of the supplier of services or the location of the recipient of services is outside India) i. In respect of following category of services, the place of supply is determined with reference to a proxy. Rest of the services are governed by a default provision. S.No Nature of service Place of supply 1. Services supplied in respect of goods that are required to be made physically available from a remote location by way of electronic means, (Not Applicable in case of goods that are temporarily imported into India for repairs and exported.) the location where the services are actually performed, the location where goods are situated 2. services supplied to an individual which require the physical presence of the receiver the location where the services are actually performed. 3. Immovable property related services including hotel accommodation Location at which the immovable property is located. 4. Admission
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and database access or retrieval services The location of recipient of service. ii. For the rest of the services other than those specified above, a default provision has been prescribed as under. Default Rule for the cross border supply of Services other than nine Specified Services S.No. Description of supply Place of supply 1 Any Location of the Recipient of Service If not available in the ordinary course of business: The location of the supplier of service. 11. Supplies in territorial waters: Where the location of the supplier is in the territorial waters, the location of such supplier; or where the place of supply is in the territorial waters, the place of supply is be deemed to be in the coastal State or Union territory where the nearest point of the appropriate baseline is located. 12. Export /Import of services: a supply would be treated as Import or export if certain conditions are satisfied. These conditions are as under: – Export of Services Import of Services means the sup
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