1. Goods & Services Tax GST Conclave III Hosted by:
LEVY & Scope of Supply
GST Conclave III
Hosted by:
Kolkata Branch of EIRC of ICAI
17th June, 2017

2. Goods and services tax
Scope of Supply

3. Schedule I – Activities treated as supply
includes
All forms of supply
Made/ agreed to be made for consideration
In the course/ furtherance of business
Sale, transfer barter, exchange, licence, rental, lease, disposal
Import of services
For consideration whether or not in the course/ furtherance of business
Supplier – outside India
Recipient – in India
Schedule I – Activities treated as supply
If made/ agreed to be made without a consideration
1. Permanent transfer/ disposal of business assets (ITC availed)
2. Supplies between related/ distinct persons
3. Supplies between principal & agent
4. Services imported by taxable persons from related persons in the course/ furtherance of business
Schedule II
Treated as supplies of goods/ services
For example:-
Supply of goods - transfer of title in goods, HP transfers, transfer of title in goods where property passes at a future date
Supply of services – Hotelier, Constn of complex, civil structure, software, renting of immovable property, leasing

4. Exclusions from scope of supply
Schedule III
Services by employee to employer
Services by Court/ tribunal
Functions of MPs, MLAs, etc.
Services of funeral, burial, etc.
Sale of land, sale of building
(except those covered under 5(b) of Sch II)
Actionable claims other than lottery, betting, gambling
Notified activities/ transactions undertaken as public authorities by:-
Central Govt.
State Govt.
Local authority

5. Scope of supply 2 or more taxable supplies of goods/ services
The Government may notify transactions that are to be treated as: supply of goods and not as supply of services; or supply of services and not as supply of goods.
Composite supplies will be treated as supply of principal supply
Mixed supplies will be treated as supply of goods/ services attracting highest rate of tax
2 or more taxable supplies of goods/ services
Naturally bundled
One principal supply
2 or more supplies of goods/ services
Not a composite supply
Single price

6. Scope of supply – examples of composite and mixed supplies
Composite Supply
Mixed Supply
Rajdhani Express provides rail transportation services; they also supply food on board to passengers. Supply of transportation services would be the principal supply and such supply would qualify as composite supply.
Dell Electronics sells laptops with pre-installed software. Such supplies, being naturally bundled, would qualify as composite supplies with the sale of laptops being the principal supply.
Surf Excel offers plastic buckets free along with supplies of detergent powder. Since such supplies are not naturally bundled and the buckets are capable of being sold independently, the supply would be treated as mixed supply.
Since plastic buckets attract a higher rate of tax, the entire supply would be taxed at 18%
Item
Rate of tax (assumed)
Detergent
12%
Plastic bucket
18%

7. Goods and services tax
LEVY

8. Levy CGST & SGST IGST Levied on all intra-state supplies
Rates, CGST & SGST taken individually, will not exceed 20%
Levied on all inter-state supplies
Rates will not exceed 40%
CGST, SGST and IGST will apply on all supplies of goods/ services
Except: alcoholic liquor for human consumption
Petroleum, natural gas, ATF, etc., will be taxed w.e.f. date notified
Reverse charge mechanism will apply:-
On notified categories of goods/ services
In cases where the supplier of goods/ services is an unregistered person
Notified e-commerce operators will be required to pay tax on intra-state supplies OF SERVICES ONLY made through them as if they are the persons liable to pay tax on such supplies

9. INTRA-STATE & INTER-STATE SUPPLIES
Goods and services tax
INTRA-STATE & INTER-STATE SUPPLIES

10. NATURE OF SUPPLY Intra-state supply Inter-state supply
Location of supplier and place of supply are in the same State*
Location of supplier and place of supply are in the same Union Territory
Intra-state supply
Location of supplier and place of supply are in:-
2 different States or
2 different UTs or
A State and an UT
Supply of imported goods into territory of India till they cross customs frontiers
Supply of imported services into territory of India
Supply of goods and/ or services where supplier is located in India and place of supply is outside India
Supplies made to/ by an SEZ developer/ SEZ unit
Residual clause – all supplies into taxable territory which are not intra-state supplies
Inter-state supply
Notes:-
“State” includes a UT with legislature (Delhi & Chandigarh)
Location of supplier or place of supply is in territorial waters – such location or place will be deemed to be in the coastal State/ UT where the nearest point of the appropriate baseline is located.

11. Nature of supply - examples
Works Ltd., located in Bangalore, imports goods from China via sea-routes to a port located in Chennai and then transports such goods to Bangalore. The goods are deemed to have been imported when the goods reach the Chennai port and not when they are ultimately transported to Bangalore.
Sec 7(2) of the IGST Act, 2017
Import
Logwood Ltd., an SEZ unit, located in Karnataka purchases goods from a supplier located in Karnataka. Although such purchase takes place within the state of Karnataka, it would be reckoned as an inter-State supply and would be zero-rated in the hands of the supplier.
Sec 7(5)(b) r/w Sec 16(1)(b)
SEZ
Indian Oil has an offshore oil field off the coast of Mumbai. Supplies from such oil field would be deemed to be supplies from the state of Maharashtra.
Sec 9 of the IGST Act, 2017
Territorial Waters

12. Reverse Charge - specified goods or services
Government may notify the list of goods or services or both based on the recommendation of Council
On such recommended supplies- recipient shall pay
All the provisions of the Act in respect of levy, collection, invoicing etc., shall apply to the recipient
Similar provisions under IGST Act- Section 5(3)

13. Issues This will be applicable for registered and unregistered persons
Examples: Import of services or import of goods- must register under GST irrespective of the turnover

14. Reverse Charge-
Supply of goods and services or both by an un registered to a registered supplier- shall be paid by the registered supplier on RCM- Section 9(4).
Similar provisions under Section 5(4) of IGST Act

15. Levy-supply of service through e-comm
The Govt may notify on the recommendation of the Council, the list of services supplied intra state through e commerce operator- E commerce operator will be liable to pay GST.
If the e commerce operator does not have any presence in the state, then the person representing such e commerce operator for any purpose in the taxable territory shall be liable to pay tax.
Similar provisions under Section 5(5) of the IGST Act and 7(5) of UTGST

16. Issues
The classification such as supply or works contract or composition supply or mixed supply is on receiver
Pay tax by cash
Comply other requirements like preparation of purchase invoice
Create separate serial number for RCM for URD purchases
How under IGST act one can sell without registration- Section 24) of CGST Act.

17. Relevance Applicable for certain services only.
Who operates within the state without physical presence
As per the second proviso to Section 9(5), if they do not have physical presence, they have to appoint the agent in “taxable territory”.

18. Issue
Whether a lawyer or CA representing the tax issue would be held liable to pay tax?
A courier person acting for the e commerce operator for supply of goods can be held responsible for supply of services
Whether a non-resident e-commerce operator should appoint agents in each State if they want to operate within that state?

19. Goods and services tax
COMPOSITION OF TAX

20. COT Composition of tax… Availed Available Allowed Eligible Compliance
1% - Manufacturers
2.5% - Hoteliers
0.5% - Others
Eligible
Available
Availed
Allowed
Compliance

21. Composition suppliers: Conditions & restrictions
Unless all registrations of the same PAN also eligible and opt for composition
If aggregate turnover (all India basis) of preceding FY exceeds 75 Lakhs (If during the FY, the aggregate turnover exceeds 75 Lakhs, no composition from the following day.)
In the following specific cases composition scheme will not be available:
Services supplied:
Any/ all services except service specified in Sch II Para 6 clause (b)
Goods supplied:
Non-taxable goods
Inter-State outward supplies
Through e-commerce operators
Notified goods manufactured by the supplier

22. Tax Invoice

23. Tax Invoice – Sec 31 Before/ at the time of :-
Removal of goods for supply (supply involves movement of goods)
Delivery of goods/ making available to the recipient (other cases)
Supply of taxable goods
Registered taxable person shall issue tax invoice
Supply of taxable services
Before/ after provision of service but within prescribed period
Revised invoices may be issued against the invoice already issued during the period starting from the effective date of registration till the date of issuance of certificate of registration within one month from date of issuance of certificate of registration. (Rule 8)
A registered person supplying exempted goods or opting for composition to issue a bill of supply instead of tax invoice (Rule 4)
Receipt voucher shall be issued by a person receiving advances and refund voucher (Rule 6) when such advance is returned for not having effected supplies. (Rule 5)
A registered person is required to issue an invoice on receiving goods/services from unregistered person and a payment voucher (Rule 7) at the time of making payment of such taxes on behalf of the supplier.

24. Thank you
Singhvi, Dev & Unni