THE INTEGRATED GOODS AND SERVICES TAX BILL, 2017.
GST
Dated:- 27-3-2017
THE INTEGRATED GOODS AND SERVICES TAX BILL, 2017.
\nGST bills – Clause by Clause
\n=============
\nDocument 1
\nTO BE INTRODUCED IN LOK SABHA
\nBill No. 58 of 2017
\nTHE INTEGRATED GOODS AND SERVICES TAX BILL, 2017
\nCLAUSES
\nARRANGEMENT OF CLAUSES
\nCHAPTER I
\nPRELIMINARY
\n1. Short title, extent and commencement.
\n2. Definitions.
\nCHAPTER II
\nADMINISTRATION
\n3. Appointment of officers.
\n4. Authorisation of officers of State tax or Union territory tax as proper officer in
\ncertain circumstances.
\n5. Levy and collection.
\nCHAPTER III
\nLEVY AND COLLECTION OF TAX
\n6. Power to grant exemption from tax.
\nCHAPTER IV
\nDETERMINATION OF NATURE OF SUPPLY
\n7. Inter-State supply.
\n8. Intra-State supply.
\n9. Supplies in territorial waters.
\nCHAPTER V
\nPLACE OF SUPPLY OF GOODS OR SERVICES OR BOTH
\n10. Place of supply of goods other than supply of goods imported into, or exported
\nfrom India.
\n11. Place of supply of goods im<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ations. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ater point of time; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ut does not include a person who supplies = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n thority” means an authority or a board or any other body,\u2014 = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n Tax Act; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n son: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n taxable territory, any person representing such electronic commerce operator = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n been = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ntra-State supply: = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n than supply of goods imported into, or = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ion of supplier of services and the location of the recipient of supply of = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ies, in proportion to the value for services separately = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n n as being in each of the respective = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n or dish antenna is installed = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n terms of the contract or agreement entered into in this regard or, in the absence of such 5 = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n e the location of the supplier of 30 = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ancillary to such admission or = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ) a non-banking institution which is a company and which has as = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n by the recipient of services = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n he intermediary neither collects or = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ne developer = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n a registered person paying tax under section 10 of the Central Goods and Services = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n pportionment of interest, penalty and compounding = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n l to the amount so reduced from the = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n egistration; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n d day shall be liable to tax under = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n r a = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ollected and retained by = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ied, not = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n t title, extent and commencement of the proposed Act. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n vices, the tax on = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ro rating of certain supplies namely exports and supplies = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n to appeals, advance ruling and anti-profiteering. So = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n (i) manner in which tax wrongfully collected and paid to Central Government = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" THE INTEGRATED GOODS AND SERVICES TAX BILL, 2017. GSTDated:- 27-3-2017THE INTEGRATED GOODS AND SERVICES TAX BILL, 2017. GST bills – Clause by Clause ============= Document 1 TO BE INTRODUCED IN LOK SABHA Bill No. 58 of 2017 THE INTEGRATED GOODS AND SERVICES TAX BILL, 2017 CLAUSES ARRANGEMENT OF CLAUSES CHAPTER I PRELIMINARY 1. Short title, … Continue reading “THE INTEGRATED GOODS AND SERVICES TAX BILL, 2017.”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-2258","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/2258","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=2258"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/2258\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=2258"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=2258"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=2258"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
For full text:-Visit the Source <\/a><\/p>\n
\n24. Laying of rules, regulations and notifications.
\n25. Removal of difficulties.
\nTO BE INTRODUCED IN LOK SABHA
\nBill No. 58 of 2017
\nTHE INTEGRATED GOODS AND SERVICES TAX
\nBILL, 2017
\nA
\nBILL
\nto make a provision for levy and collection of tax on inter-State supply of goods or services
\nor both by the Central Government and for matters connected therewith or incidental
\nthereto.
\nBE it enacted by Parliament in the Sixty-eighth year of the Republic of India as
\nfollows:-
\nCHAPTER I
\nPRELIMINARY
\n5
\n1. (1) This Act may be called the Integrated Goods and Services Tax Act, 2017.
\n(2) It shall extend to the whole of India except the State of Jammu and Kashmir.
\n(3) It shall come into force on such date as the Central Government may, by notification
\nin the Official Gazette, appoint:
\nProvided that different dates may be appointed for different provisions of this Act
\n10 and any reference in any such provision to the commencement of this Act shall be construed
\nas a reference to t<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n(4) “customs frontiers of India\u201d means the limits of a customs area as defined
\nin section 2 of the Customs Act, 1962;
\n(5) “export of goods” with its grammatical variations and cognate expressions,
\nmeans taking goods out of India to a place outside India;
\n(6) “export of services\u201d means the supply of any service when,\u20ac\u2022
\n(i) the supplier of service is located in India;
\n(ii) the recipient of service is located outside India;
\n(iii) the place of supply of service is outside India;
\n(iv) the payment for such service has been received by the supplier of
\nservice in convertible foreign exchange; and
\n5
\n10
\n20
\n(v) the supplier of service and the recipient of service are not merely
\nestablishments of a distinct person in accordance with Explanation 1 in 25
\nsection 8;
\n(7) “fixed establishment\u201d means a place (other than the registered place of
\nbusiness) which is characterised by a sufficient degree of permanence and suitable
\nstructure in ter<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nsuch goods or services or both or securities on his own account;
\n45
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\n(14) “location of the recipient of services” means,\u2014
\n(a) where a supply is received at a place of business for which the
\nregistration has been obtained, the location of such place of business;
\n(b) where a supply is received at a place other than the place of business
\nfor which registration has been obtained (a fixed establishment elsewhere), the
\nlocation of such fixed establishment;
\n(c) where a supply is received at more than one establishment, whether
\nthe place of business or fixed establishment, the location of the establishment
\nmost directly concerned with the receipt of the supply; and
\n(d) in absence of such places, the location of the usual place of residence
\nof the recipient;
\n(15) “location of the supplier of services” means,-
\n(a) where a supply is made from a place of business for which the
\nregistration<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n(i) set up by an Act of Parliament or a State Legislature; or
\n(ii) established by any Government,
\nwith ninety per cent. or more participation by way of equity or control, to carry out any
\nfunction entrusted to a municipality under article 243W of the Constitution;
\n(17) “online information and database access or retrieval services” means
\nservices whose delivery is mediated by information technology over the internet or
\nan electronic network and the nature of which renders their supply essentially
\nautomated and involving minimal human intervention and impossible to ensure in
\nthe absence of information technology and includes electronic services such as,\u20ac\u2022
\n(i) advertising on the internet;
\n(ii) providing cloud services;
\n(iii) provision of e-books, movie, music, software and other intangibles
\nthrough telecommunication networks or internet;
\n(iv) providing data or information, retrievable or otherwise, to an<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n(22) “taxable territory” means the territory to which the provisions of this Act
\napply;
\n(23) “zero-rated supply” shall have the meaning assigned to it in section 16;
\n(24) words and expressions used and not defined in this Act but defined in the 15
\nCentral Goods and Services Tax Act, the Union Territory Goods and Services Tax
\nAct and the Goods and Services Tax (Compensation to States) Act shall have the
\nsame meaning as assigned to them in those Acts;
\n(25) any reference in this Act to a law which is not in force in the State of
\nJammu and Kashmir, shall, in relation to that State be construed as a reference to the 20
\ncorresponding law, if any, in force in that State.
\n28 of 2005.
\n28 of 2005.
\nCHAPTER II
\nADMINISTRATION
\nAppointment of
\nofficers.
\nAuthorisation
\nof officers of
\nState tax or
\nUnion territory
\ntax as proper
\nofficer in
\ncertain
\ncircumstances.
\n3. The Board may appoint such central tax officers as it thinks fit for exercising the
\npowers under this Act.\n<\/p>\n
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\nProvided that the integrated tax on goods imported into India shall be levied and 40
\ncollected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 on
\nthe value as determined under the said Act at the point when duties of customs are levied on
\nthe said goods under section 12 of the Customs Act, 1962.
\n(2) The integrated tax on the supply of petroleum crude, high speed diesel, motor
\nspirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied 45
\nwith effect from such date as may be notified by the Government on the recommendations
\nof the Council.
\n51 of 1975.
\n52 of 1962.
\n5
\n5
\n(3) The Government may, on the recommendations of the Council, by notification,
\nspecify categories of supply of goods or services or both, the tax on which shall be paid on
\nreverse charge basis by the recipient of such goods or services or both and all the provisions
\nof this Act shall apply to such recipient as if he is the person liable for pa<\/p>\n
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\nfor any purpose in the taxable territory shall be liable to pay tax:
\nProvided further that where an electronic commerce operator does not have a physical
\n20 presence in the taxable territory and also does not have a representative in the said territory,
\nsuch electronic commerce operator shall appoint a person in the taxable territory for the
\npurpose of paying tax and such person shall be liable to pay tax.
\n6. (1) Where the Government is satisfied that it is necessary in the public interest so
\nto do, it may, on the recommendations of the Council, by notification, exempt generally,
\n25 either absolutely or subject to such conditions as may be specified therein, goods or services
\nor both of any specified description from the whole or any part of the tax leviable thereon
\nwith effect from such date as may be specified in such notification.
\n(2) Where the Government is satisfied that it is necessary in the<\/p>\n
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\n40 granted absolutely, the registered person supplying such goods or services or both shall not
\ncollect the tax, in excess of the effective rate, on such supply of goods or services or both.
\nCHAPTER IV
\nDETERMINATION OF NATURE OF SUPPLY
\n7. (1) Subject to the provisions of section 10, supply of goods, where the location of
\n45 the supplier and the place of supply are in\u2014
\n(a) two different States;
\n(b) two different Union territories; or
\n(c) a State and a Union territory,
\nshall be treated as a supply of goods in the course of inter-State trade or commerce.
\nPower to grant
\nexemption
\nfrom tax.
\nInter-State
\nsupply.
\nIntra-State
\nsupply.
\n(2) Supply of goods imported into the territory of India, till they cross the customs
\nfrontiers of India, shall be treated to be a supply of goods in the course of inter-State trade
\nor commerce.
\n(3) Subject to the provisions of section 12, supply of services, where the location of
\nthe supplier and the place of supply are in\u20ac\u2022<\/p>\n
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\nProvided that the following supply of goods shall not be treated as intra-State supply,
\nnamely:\u20ac\u2022
\n(i) supply of goods to or by a Special Economic Zone developer or a Special
\nEconomic Zone unit;
\n(ii) goods imported into the territory of India till they cross the customs frontiers
\nof India; or
\n(iii) supplies made to a tourist referred to in section 15.
\n(2) Subject to the provisions of section 12, supply of services where the location of
\nthe supplier and the place of supply of services are in the same State or same Union territory
\nshall be treated as intra-State supply:
\nProvided that the intra-State supply of services shall not include supply of services to
\nor by a Special Economic Zone developer or a Special Economic Zone unit.
\nExplanation 1.\u2014For the purposes of this Act, where a person has,\u2014
\n(i) an establishment in India and any other establishment outside India;
\n(ii) an establishment in a State or Union territory and any other estab<\/p>\n
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\n10 exported from India, shall be as under,\u20ac\u2022
\n15
\n20
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\n25
\n(a) where the supply involves movement of goods, whether by the supplier or
\nthe recipient or by any other person, the place of supply of such goods shall be the
\nlocation of the goods at the time at which the movement of goods terminates for
\ndelivery to the recipient;
\n(b) where the goods are delivered by the supplier to a recipient or any other
\nperson on the direction of a third person, whether acting as an agent or otherwise,
\nbefore or during movement of goods, either by way of transfer of documents of title
\nto the goods or otherwise, it shall be deemed that the said third person has received
\nthe goods and the place of supply of such goods shall be the principal place of business
\nof such person;
\n(c) where the supply does not involve movement of goods, whether by the
\nsupplier or the recipient, the place of supply shall be the location of such goods at the
\ntime of the d<\/p>\n
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\nservices is in India.
\nservices
\n40
\nwhere
\n(2) The place of supply of services, except the services specified in sub-sections (3)
\nto (14),\u2014
\nlocation of
\nsupplier and
\n(a) made to a registered person shall be the location of such
\nperson;
\n(b) made to any person other than a registered person shall be,\u2014
\nrecipient is in
\nIndia.
\n45
\n(i) the location of the recipient where the address on record exists; and
\n(ii) the location of the supplier of services in other cases.
\n(3) The place of supply of services,\u20ac\u2022
\n(a) directly in relation to an immovable property, including services provided
\nby architects, interior decorators, surveyors, engineers and other related experts or
\n8
\nestate agents, any service provided by way of grant of rights to use immovable property
\nor for carrying out or co-ordination of construction work; or
\n(b) by way of lodging accommodation by a hotel, inn, guest house, h<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\ncollected or determined in terms of the contract or agreement entered into in this regard or,
\nin the absence of such contract or agreement, on such other basis as may be prescribed.
\n(4) The place of supply of restaurant and catering services, personal grooming, fitness, 20
\nbeauty treatment, health service including cosmetic and plastic surgery shall be the location
\nwhere the services are actually performed.
\nto,\u20ac\u2022
\n(5) The place of supply of services in relation to training and performance appraisal
\n(a) a registered person, shall be the location of such
\nperson;
\n(b) a person other than a registered person, shall be the location where the services
\nare actually performed.
\n25
\n(6) The place of supply of services provided by way of admission to a cultural, artistic,
\nsporting, scientific, educational, entertainment event or amusement park or any other place
\nand services ancillary thereto, shall be the place where the e<\/p>\n
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\nStates or Union territories in proportion to the value for services separately collected 45
\nor determined in terms of the contract or agreement entered into in this regard or, in
\nthe absence of such contract or agreement, on such other basis as may be prescribed.
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\n9
\n(8) The place of supply of services by way of transportation of goods, including by
\nmail or courier to,\u2014
\n(a) a registered person, shall be the location of such person;
\n(b) a person other than a registered person, shall be the location at which such
\ngoods are handed over for their transportation.
\n(9) The place of supply of passenger transportation service to,\u20ac\u2022
\n(a) a registered person, shall be the location of such person;
\n(b) a person other than a registered person, shall be the place where the passenger
\nembarks on the conveyance for a continuous journey:
\nProvided that where the right to passage is given for future use and the <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nfor receipt of services;
\n(b) in case of mobile connection for telecommunication and internet services
\nprovided on post-paid basis, be the location of billing address of the recipient of
\nservices on the record of the supplier of services;
\n(c) in cases where mobile connection for telecommunication, internet service
\nand direct to home television services are provided on pre-payment basis through a
\nvoucher or any other means,\u20ac\u2022
\n(i) through a selling agent or a re-seller or a distributor of subscriber
\nidentity module card or re-charge voucher, be the address of the selling agent
\nor re-seller or distributor as per the record of the supplier at the time of supply;
\nor
\n(ii) by any person to the final subscriber, be the location where such pre-
\npayment is received or such vouchers are sold;
\n(d) in other cases, be the address of the recipient as per the records of the
\nsupplier of services and where such address is not available, the place of suppl<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\ncontract or agreement, on such other basis as may be prescribed.
\n(12) The place of supply of banking and other financial services, including stock
\nbroking services to any person shall be the location of the recipient of services on the
\nrecords of the supplier of services:
\nProvided that if the location of recipient of services is not on the records of the 10
\nsupplier, the place of supply shall be the location of the supplier of services.
\n(13) The place of supply of insurance services shall,\u2014
\n(a) to a registered person, be the location of such person;
\n(b) to a person other than a registered person, be the location of the recipient of
\nservices on the records of the supplier of services.
\n15
\n(14) The place of supply of advertisement services to the Central Government, a
\nState Government, a statutory body or a local authority meant for the States or Union
\nterritories identified in<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nservices.
\n(3) The place of supply of the following services shall be the location where the
\nservices are actually performed, namely:\u2014
\n(a) services supplied in respect of goods which are required to be made
\nphysically available by the recipient of services to the supplier of services, or to a 35
\nperson acting on behalf of the supplier of services in order to provide the services:
\nProvided that when such services are provided from a remote location by way
\nof electronic means, the place of supply shall be the location where goods are situated
\nat the time of supply of services:
\nProvided further that nothing contained in this clause shall apply in the case 40
\nof services supplied in respect of goods which are temporarily imported into India
\nfor repairs and are exported after repairs without being put to any other use in India,
\nthan that which is required for such repairs;
\n(b) services supplied to an individual, represented either as <\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\n10 organisation, shall be the place where the event is actually held.
\n(6) Where any services referred to in sub-section (3) or sub-section (4) or
\nsub-section (5) is supplied at more than one location, including a location in the taxable
\nterritory, its place of supply shall be the location in the taxable territory.
\n(7) Where the services referred to in sub-section (3) or sub-section (4) or
\n15 sub-section (5) are supplied in more than one State or Union territory, the place of supply
\nof such services shall be taken as being in each of the respective States or Union territories
\nand the value of such supplies specific to each State or Union territory shall be in proportion
\nto the value for services separately collected or determined in terms of the contract or
\nagreement entered into in this regard or, in the absence of such contract or agreement, on
\n20 such other basis as may be prescribed.
\n55
\n25
\n30
\n40
\n45
\n(8) The place of supply of the follo<\/p>\n
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\nits principal business the receiving of deposits, under any scheme or
\narrangement or in any other manner, or lending in any manner; or
\n(iii) such other non-banking institution or class of such institutions,
\nas the Reserve Bank of India may, with the previous approval of the
\nCentral Government and by notification in the Official Gazette, specify.
\n(9) The place of supply of services of transportation of goods, other than by way of
\nmail or courier, shall be the place of destination of such goods.
\n(10) The place of supply in respect of passenger transportation services shall be the
\nplace where the passenger embarks on the conveyance for a continuous journey.
\n2 of 1934.
\n35
\n12
\nSpecial
\nprovision for
\npayment of tax
\nby a supplier of
\nonline
\ninformation and
\ndatabase access
\nor retrieval
\nservices.
\n(11) The place of supply of services provided on board a conveyance during the
\ncourse of a passenger transport operat<\/p>\n
For full text:-Visit the Source <\/a><\/p>\n
\nis in the taxable territory;
\n(e) the bank of the recipient of services in which the account used for payment
\nis maintained is in the taxable territory;
\n15
\n(f) the country code of the subscriber identity module card used by the recipient 20
\nof services is of taxable territory;
\n(g) the location of the fixed land line through which the service is received by
\nthe recipient is in the taxable territory.
\n(13) In order to prevent double taxation or non-taxation of the supply of a service, or
\nfor the uniform application of rules, the Government shall have the power to notify any 25
\ndescription of services or circumstances in which the place of supply shall be the place of
\neffective use and enjoyment of a service.
\n14. (1) On supply of online information and database access or retrieval services by
\nany person located in a non-taxable territory and received by a non-taxable online recipient,
\nthe supplier of services located in a non-taxable territory sh<\/p>\n
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\nprocesses payment in any manner nor is responsible for the payment between the
\nnon-taxable online recipient and the supplier of such services;
\n(c) the intermediary involved in the supply does not authorise delivery; and
\n(d) the general terms and conditions of the supply are not set by the intermediary
\ninvolved in the supply but by the supplier of services.
\n45
\n13
\n5
\n(2) The supplier of online information and database access or retrieval services referred
\nto in sub-section (1) shall, for payment of integrated tax, take a single registration under the
\nSimplified Registration Scheme to be notified by the Government:
\nProvided that any person located in the taxable territory representing such supplier
\nfor any purpose in the taxable territory shall get registered and pay integrated tax on behalf
\nof the supplier:
\nProvided further that if such supplier does not have a physical presence or does not
\nhave a representative for any purpose in the ta<\/p>\n
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\nor a Special Economic Zone unit.
\n(2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods
\nand Services Tax Act, credit of input tax may be availed for making zero-rated supplies,
\nnotwithstanding that such supply may be an exempt supply.
\n(3) A registered person making zero rated supply shall be eligible to claim refund
\n30 under either of the following options, namely:\u20ac\u2022
\n35
\n40
\n45
\n(a) he may supply goods or services or both under bond or Letter of Undertaking,
\nsubject to such conditions, safeguards and procedure as may be prescribed, without
\npayment of integrated tax and claim refund of unutilised input tax credit; or
\n(b) he may supply goods or services or both, subject to such conditions,
\nsafeguards and procedure as may be prescribed, on payment of integrated tax and
\nclaim refund of such tax paid on goods or services or both supplied,
\nin accordance with the provisions of section 54 of the Central Goods and Services Tax Act
\nor<\/p>\n
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\nTax Act;
\n(e) in respect of import of goods or services or both where the registered person
\nis not eligible for input tax credit;
\n(f) in respect of import of goods or services or both made in a financial year by 10
\na registered person, where he does not avail of the said credit within the specified
\nperiod and thus remains in the integrated tax account after expiry of the due date for
\nfurnishing of annual return for such year in which the supply was received,
\nthe amount of tax calculated at the rate equivalent to the central tax on similar intra-State
\nsupply shall be apportioned to the Central Government.
\n(2) The balance amount of integrated tax remaining in the integrated tax account in
\nrespect of the supply for which an apportionment to the Central Government has been done
\nunder sub-section (1) shall be apportioned to the,\u20ac\u2022
\n(a) State where such supply takes place; and
\n15
\n(b) Central<\/p>\n
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\namount realised in connection with the tax so apportioned.
\n35
\n(4) Where an amount has been apportioned to the Central Government or a State
\nGovernment under sub-section (1) or sub-section (2) or sub-section (3), the amount collected
\nas integrated tax shall stand reduced by an amount equal to the amount so apportioned and
\nthe Central Government shall transfer to the central tax account or Union territory tax
\naccount, an amount equal to the respective amounts apportioned to the Central Government 40
\nand shall transfer to the State tax account of the respective States an amount equal to the
\namount apportioned to that State, in such manner and within such time as may be prescribed.
\n(5) Any integrated tax apportioned to a State or, as the case may be, to the Central
\nGovernment on account of a Union territory, if subsequently found to be refundable to any
\nperson and refunded to such person, shall be reduced from the amount to be a<\/p>\n
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\nintegrated tax account to the Union territory tax account in such manner and within
\nsuch time as may be prescribed;
\n(c) State tax in accordance with the provisions of the respective State Goods
\nand Services Tax Act, the amount collected as integrated tax shall stand reduced by
\nan amount equal to the credit so utilised and shall be apportioned to the appropriate
\nState Government and the Central Government shall transfer the amount so
\napportioned to the account of the appropriate State Government in such manner and
\nwithin such time as may be prescribed.
\nExplanation. For the purposes of this Chapter, \u201cappropriate State\u201d in relation
\nto a taxable person, means the State or Union territory where he is registered or is
\nliable to be registered under the provisions of the Central Goods and Services Tax
\nAct.
\n19. (1) A registered person who has paid integrated tax on a supply considered by
\n25 him to be an inter-State supply, but which <\/p>\n
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\n(vi) tax invoice, credit and debit notes;
\n(vii) accounts and records;
\n(viii) returns, other than late fee;
\n(ix) payment of tax;
\n45
\n(x) tax deduction at source;
\n(xi) collection of tax at source;
\n(xii) assessment;
\n(xiii) refunds;
\n(xiv) audit;
\n16
\n(xv) inspection, search, seizure and arrest;
\n(xvi) demands and recovery;
\n(xvii) liability to pay in certain cases;
\n(xviii) advance ruling;
\n(xix) appeals and revision;
\n(xx) presumption as to documents;
\n(xxi) offences and penalties;
\n(xxii) job work;
\n5
\n10
\nImport of
\nservices made
\non or after the
\nappointed day.
\nPower to make
\nrules.
\n(xxiii) electronic commerce;
\n(xxiv) transitional provisions; and
\n(xxv) miscellaneous provisions including the provisions relating to the 15
\nimposition of interest and penalty,
\nshall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they
\napply in relation to central tax as if they are enacted under this Act:
\nProvided that in the case of tax deducted at<\/p>\n
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\nthe provisions of this Act regardless of whether the transactions for such import of services
\nhad been initiated before the appointed day:
\nProvided that if the tax on such import of services had been paid in full under the 35
\nexisting law, no tax shall be payable on such import under this Act:
\nProvided further that if the tax on such import of services had been paid in part under
\nthe existing law, the balance amount of tax shall be payable on such import under this Act.
\nExplanation. For the purposes of this section, a transaction shall be deemed to
\nhave been initiated before the appointed day if either the invoice relating to such supply or 40
\npayment, either in full or in part, has been received or made before the appointed day.
\n22. (1) The Government may, on the recommendations of the Council, by notification,
\nmake rules for carrying out the provisions of this Act.
\n(2) Without prejudice to the generality of the provisions of sub-section <\/p>\n
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\ntotal period of thirty days which may be comprised in one session or in two or more successive
\nsessions, and if, before the expiry of the session immediately following the session or the
\nsuccessive sessions aforesaid, both Houses agree in making any modification in the rule or
\nregulation or in the notification, as the case may be, or both Houses agree that the rule or
\n15 regulation or the notification should not be made, the rule or regulation or notification, as
\nthe case may be, shall thereafter have effect only in such modified form or be of no effect,
\nas the case may be; so, however, that any such modification or annulment shall be without
\nprejudice to the validity of anything previously done under that rule or regulation or
\nnotification, as the case may be.
\n20
\n25
\n25. (1) If any difficulty arises in giving effect to any provision of this Act, the
\nGovernment may, on the recommendations of the Council, by a general or a special order
\npublished in the Official Gazette<\/p>\n
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\nthe exporting States.
\n2. The crucial aspect of central sales tax is that it is non-vatable, i.e. the credit of
\nthis tax is not available as set-off for the future tax liability to be discharged by the
\npurchaser. It directly gets added to the cost of the goods purchased and becomes part
\nof the cost of business and thereby has a direct impact on the increase in the cost of
\nproduction of a particular product. Further, the fact that the rate of central sales tax is
\ndifferent from the value added tax being levied on the intra-State sale creates a tax
\narbitrage which is exploited by unscrupulous elements.
\n3. In view of the above, it has become necessary to have a Central legislation,
\nnamely, the Integrated Goods and Services Tax Bill, 2017. The proposed Legislation
\nwill confer power upon the Central Government for levying goods and services tax on
\nthe supply of goods or services or both which takes place in the course of inter-State
\ntrade or commerce. Th<\/p>\n
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\nexceeding forty per cent. as recommended by the Goods and Services Tax Council
\n(the Council);
\n(b) to provide for levy of tax on goods imported into India in accordance
\nwith the provisions of the Customs Tariff Act, 1975 read with the provisions
\ncontained in the Customs Act, 1962;
\n(c) to provide for levy of tax on import of services on reverse charge basis
\nunder the proposed Legislation;
\n(d) to empower the Central Government to grant exemptions, by notification
\nor by special order, on the recommendations of the Council;
\n(e) to provide for determination of the nature of supply as to whether it is
\nan inter-State or an intra-State supply;
\n(f) to provide elaborate provisions for determining the place of supply in
\nrelation to goods or services or both;
\n18
\n19
\n(g) to provide for payment of tax by a supplier of online information and
\ndatabase access or retrieval services;
\n(h) to provide for refund of tax paid on supply of goods to tourist leaving
\nIndia;
\n(i) to provi<\/p>\n
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\nClause 2 defines various terms and expressions used in the proposed Act.
\nClause 3 provides for appointment of Commissioners and other class of officers
\nas may be required for carrying out the purposes of the proposed Act.
\nClause 4 provides for authorisation of State tax and Union territory tax officers,
\nsubject to certain exceptions and conditions as shall be notified by the Central
\nGovernment on recommendations of the Council, to be proper officers for the purposes
\nof the proposed Act.
\nClause 5 provides for levy and collection of integrated tax on all inter-State
\nsupplies of goods or services or both except on the supply of alcoholic liquor for
\nhuman consumption, on the value determined under section 15 of the Central Goods
\nand Services Tax Act at a rate not exceeding forty per cent. It further provides that
\nintegrated tax on goods imported into India shall be levied and collected under
\nsection 3 of the Customs Tariff <\/p>\n
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\ninter-State supplies of which shall be paid by the electronic commerce operator
\nif such services are supplied through it, on the recommendations of the Council.
\nClause 6 confers powers on Central Government to exempt either absolutely or
\nconditionally goods or services or both of any specified description from the whole or
\npart of the integrated tax, on the recommendations of the Council. This clause also
\nconfers powers on the Central Government to exempt from payment of tax any goods
\nor services or both, by special order, on which tax is leviable on the recommendations
\nof the Council.
\nClause 7 provides for instances where a supply of goods or services or both will
\nbe considered as inter- State supply.
\nClause 8 provides for instances where a supply of goods or services or both will
\nbe considered as intra- State supply.
\nClause 9 provides for supplies made in territorial waters to be deemed to be
\nmade in the States or Union territories where the nearest po<\/p>\n
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\nmade to Special Economic Zone Unit or Special Economic Zone developer and the
\nmanner of zero rating.
\nClause 17 provides for apportionment of integrated tax and settlement of funds
\nbetween the Central and State Government.
\nClause 18 provides for utilisation of credit of integrated tax availed under the
\nproposed Act for payment of central tax, Union territory tax or State tax.
\nClause 19 provides for refund of integrated tax in situations where inter-State
\nsupplies are subsequently held to be intra-State supplies.
\nClause 20 provides for application of specific provisions of the Central Goods
\nand Services Tax Act to the proposed Act.
\nClause 21 provides that all import of services made on or after the appointed day
\nwill be liable to integrated tax regardless of whether the transactions for such import of
\nservices had been initiated before the appointed day.
\nClause 22 confers powers on the Central Government to make rule<\/p>\n
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\nauthorities under the Central Goods and Services Tax Act will be utilised for the purposes of
\nthe proposed legislation. Thus there will be no extra financial expenditure under this
\nBill.
\n3. The total financial implications in terms of recurring and non-recurring expenditure
\ninvolved in carrying out the various functions under the Bill would be borne by the Central
\nGovernment. Most of the existing officers and staff of the Central Board of Excise and
\nCustoms would be used for carrying out the various functions under the Bill. However, it is
\nnot possible to estimate the exact recurring and non-recurring expenditure from the
\nConsolidated Fund of India at this stage.
\n22
\n22
\nMEMORANDUM REGARDING DELEGATED LEGISLATION
\nClause 22 of the Integrated Goods and Services Tax Bill seeks to empower the
\nCentral Government to make rules, inter alia, in the following matters, namely:\u2014
\n(a) collection of taxes under section 5; (b) <\/p>\n
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\nor State Government is to be refunded under section 19; and (j) any other matter
\nwhich is to be, or may be, prescribed, or in respect of which provision is to be
\nmade, by rules.
\n2. Clause 23 of the Bill empowers the Board to make regulations to provide for
\nany matter which is required to be, or may be, specified by regulation or in respect of
\nwhich provision is to be made by regulations.
\n3. The matters in respect of which the said rules and regulations may be made
\nare matters of procedure and administrative detail, and as such, it is not practicable to
\nprovide for them in the proposed Bill itself. The delegation of legislative power is,
\ntherefore, of a normal character.
\n23
\nLOK SABHA
\nA
\nBILL
\nto make a provision for levy and collection of tax on inter-State supply of goods or services
\nor both by the Central Government and for matters connected therewith or incidental
\nthereto.
\n(Shri Arun Jaitley,<\/p>\n
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