GST Ready Reckoner

1. Introduction and Coverage 1

2. 1.1 Evolution of GST Structure…………………………………………………………………………. 1
   1.2 Method for Computation of GST—General Concept ………………………………….. 2
   1.3 GST on Inter-State supplies ………………………………………………………………………… 3
   1.4 How IGST Model Works? …………………………………………………………………………… 5
   1.5 Flow of credits under GST ………………………………………………………………………….. 6
   1.6 Sharing of GST between Centre and the State …………………………………………….. 8
   1.7 Earlier Tax structure and GST—A Comparison………………………………………….. 8
   1.8 Framework of GST Laws…………………………………………………………………………….. 9
   1.9 Coverage of CGST Act………………………………………………………………………………. 10
   1.9.1 Coverage under GST ………………………………………………………………………… 10
   1.9.2 Territorial Coverage of Act……………………………………………………………….. 11
   1.10 Common Portal and Authentication …………………………………………………………. 13
   1.11 Appointed Day …………………………………………………………………………………………. 13
   1.12 Judgments…………………………………………………………………………………………………. 13
   2. Concept of Supply 14
   2.1 Supply—Section 7 …………………………………………………………………………………….. 14
   2.2 Inclusions………………………………………………………………………………………………….. 16
   2.2.1 Meaning of the specified transactions…………………………………………. 18
   2.2.1.1 Supply on approval basis …………………………………………… 19
   2.2.1.1.1 Export of Goods for Exhibitions ……………….. 20
   2.2.1.2 Clarification on GST implications on Cost
   Petroleum earned by Oil Exploration Contractor……….. 21
   2.2.1.3 GST on Tenancy Premium or Pagadi………………………….. 22
   2.2.1.4 GST Applicability and ITC Availability on
   Warranty and Extended Warranty……………………………… 22
   2.2.1.5 Clarification on GST applicability on holding shares
   of subsidiary Company by a holding Company…………. 24
   2.2.2 Made or agreed to be made ………………………………………………………… 24
   2.3 Provided or agreed to be provided……………………………………………………………. 24

2.3.1 What is the significance of the phrase ‘agreed to be
provided’?…………………………………………………………………………………… 24
2.3.2 Does the liability to pay the service tax on a taxable
service arise the moment it is agreed to be provided
without actual provision of service?……………………………………………. 24
2.3.3 Supply should be “For a Consideration”—Section 2(31) &
2(75) of CGST Act………………………………………………………………………. 25
2.3.3.1 Display of Name by Charitable Institution is not a
Supply………………………………………………………………………… 26
2.3.4 Supply should be made “by a Person”—Section 2(84) of
CGST Act……………………………………………………………………………………. 28
2.3.4.1 Supplies by Unincorporated Joint Ventures to its members
and vice-versa ……………………………………………………………………29
2.3.5 Supply should be made “In the course or furtherance of business”—
Section 2(17) of CGST Act …………………………………………………………… 30
2.3.5.1 No reverse charge on supplies not in the course or
furtherance of business ………………………………………………. 32
2.4 Inclusions—Second Limb………………………………………………………………………….. 32
2.4.1 Activity or Transaction Between a Person and its Members ……….. 33
2.5 Inclusions—Third Limb ……………………………………………………………………………. 35
2.5.1 Permanent Transfer of business assets………………………………………… 35
2.5.2 Transaction between Related or Distinct persons ……………………….. 36
2.5.2.1 Press Release for Employer – Employee Transactions … 38
2.5.2.2 Taxability on transaction between employer
and employee …………………………………………………………….. 39
2.5.2.3 GST on Recoveries made by Employer………………………. 39
2.5.2.4 Taxability of Loan Granting Transaction Between
Related Parties……………………………………………………………. 40
2.5.3 Transaction between Principal and Agent ………………………………….. 41
2.5.3.1 Concept of Agent……………………………………………………….. 41
2.5.3.2 Del Credere Agent……………………………………………………… 42
2.5.4 Import of services between related persons………………………………… 43
2.5.4.1 GST on Import of Services By Related Parties………………….. 44
2.6 Inclusions—Fourth Limb ………………………………………………………………………….. 44
2.6.1 Schedule II – Activities or Transactions to be treated as
supply of goods ………………………………………………………………………….. 45
2.6.1.1 Transfer of title in goods Entry 1(a) ……………………………. 46
2.6.1.2 Transfer of Property in goods at later date …………………. 46
2.6.1.3 Transfer of Business Assets ………………………………………… 46
2.6.1.4 Person ceasing to be a taxable person…………………………. 47
2.6.1.5 Supply to a member by unincorporated Associations … 48
2.6.2 Schedule II – Activities or Transactions to be treated as
supply of services ……………………………………………………………………….. 48
2.6.2.1 Transfer of rights in goods related—Entries 1(b)
and 5(f)……………………………………………………………………….. 49
2.6.2.2 Immovable property related—Entries 2 and 5(a),
(b) and 6(a)…………………………………………………………………. 49

2.6.2.3 Treatment or process—Entry 3 …………………………………… 50
2.6.2.4 Putting business goods to personal or
non-business use— Entry 4(b)……………………………………. 51
2.6.2.5 Intellectual Property Rights
Related—Entry 5(c) & (d) …………………………………………… 52
2.6.2.6 Refrainment Related—Entry 5(f)………………………………… 53
2.6.2.6.1 Clarifications issued by CBIC……………………. 54
2.6.2.7 Restaurant/Outdoor caterer Related—Entry 6(b)………. 58
2.7 Exclusions Schedule III……………………………………………………………………………… 58
2.7.1 Employee related services—Schedule III Clause 1………………………. 59
2.7.1.1 Taxability of services provided by Employer to
Employee …………………………………………………………………… 59
2.7.1.2 Taxability of ESOP/ESPP OR RSU By An
Employer To Employee ……………………………………………… 60
2.7.2 Schedule III – Clauses 2 & 3………………………………………………………… 61
2.7.2.1 Clarification on fee/amount levied by
Consumer Disputes Redressal Forums ………………………. 61
2.7.3 Schedule III – Clause 4………………………………………………………………… 62
2.7.4 Schedule III – Clause 5………………………………………………………………… 63
2.7.5 Schedule III – Clause 6………………………………………………………………… 63
2.7.6 Schedule III – Clause 7 Merchant Trade Transactions
(with retrospective effect from 01.07.2017)………………………………….. 64
2.7.6.1 Non-Reversal of ITC…………………………………………………… 64
2.7.6.2 No refund of tax earlier paid………………………………………. 64
2.7.7 Schedule III – Clause 8 High Sea Sales/Sales of Warehoused
Goods before clearance for home consumption
(with retrospective effect from 01.07.2017)………………………………….. 65
2.7.7.1 Non-Reversal of ITC…………………………………………………… 66
2.7.7.2 No refund of tax earlier paid………………………………………. 66
2.7.8 Schedule III- Clause 9: Co-insurance premium
Apportionment by Lead Insurer to Co-insurer …………………………… 67
2.7.9 Schedule III- Clause 10: Ceding re-insurance premium after
netting of re-insurance commission by lead insurer to re-insurer.. 68
2.8 Exclusion—Notified Activities by the Government…………………………………… 68
2.8.1 Grant of Alcoholic Liquor License by State Government ……………. 68
2.8.2 Inter-State Movement of Conveyances ……………………………………….. 69
2.9 Goods ……………………………………………………………………………………………………….. 70
2.10 Services …………………………………………………………………………………………………….. 71
3. Taxable Event and Composition Levy 72
3.1 Charging Section under CGST Act—Section 9 ………………………………………….. 72
3.1.1 Forward charge…………………………………………………………………………… 73
3.1.2 Reverse Charge under CGST Act………………………………………………… 74
3.2 Charging Section under IGST Act—Section 5……………………………………………. 75
3.2.1 Forward charge…………………………………………………………………………… 75
3.2.2 Judgments…………………………………………………………………………………… 76
3.2.3 Reverse Charge under IGST Act…………………………………………………. 77

3.2.4 Levy of IGST on import of goods………………………………………………… 78
3.3 Composition Levy—Section 10 …………………………………………………………………. 78
3.3.1 Composition Levy for Manufacturers and Specified Services …….. 78
3.3.2 Composition Levy For Remaining Supplies of Goods or
Services or Both ………………………………………………………………………….. 83
3.3.2.1 Procedures for Adopting Composition
Scheme by Service Providers ……………………………………… 84
3.3.3 Filing of Returns/Statement……………………………………………………….. 85
3.3.4 Registration and intimation under the Composition scheme………. 85
3.3.5 Withdrawal from the composition levy scheme and
procedure thereafter …………………………………………………………………… 86
3.3.5.1 Effective Date of Withdrawal from Composition
Scheme……………………………………………………………………….. 86
3.3.6 Action for wrongly opting the scheme or for contravention
of any provision of the scheme……………………………………………………. 86
3.3.6.1 Effective Date of Denial of Composition
Option by Authorities ………………………………………………… 87
3.4 List of Composition Forms ……………………………………………………………………….. 87
4. Reverse Charge Mechanism 88
4.1 What is Reverse Charge?…………………………………………………………………………… 88
4.2 Constitutional Validity……………………………………………………………………………… 88
4.3 Whether Threshold applicable on Reverse Charge? ………………………………….. 88
4.4 Charging Section under CGST Act—Section 9 ………………………………………….. 89
4.4.1 Reverse Charge under CGST Act………………………………………………… 89
4.4.2 Reverse charge on Supplies from Unregistered Persons……………… 90
4.4.2.1 No reverse charge on supplies not in course or
furtherance of business ………………………………………………. 90

4.4.3 Reverse charge on supplies from unregistered persons
not applicable to TDS deductors…………………………………………………. 90
4.5 Supplies Notified under Reverse Charge ………………………………………………….. 90
4.5.1 Reverse Charge on Services ………………………………………………………… 91
4.5.1.1 Services received from outside India………………………….. 91
4.5.1.2 Services provided by Goods Transport Agency …………. 92
4.5.1.2.1 Reverse Charge Not Applicable on
Certain Supplies by GTA………………………….. 93
4.5.1.2.2 Who will be treated as recipient of
GTA services? …………………………………………… 93
4.5.1.2.3 Firm and LLP……………………………………………. 94
4.5.1.2.4 Undertaking to be filed by GTA on
GSTN Portal……………………………………………… 94
4.5.1.2.4.1 Declaration filing by

newly registered GTAs ………… 94
4.5.1.2.5 Reverting to RCM by GTA operating
under forward charge……………………………….. 95
4.5.1.3 Legal Services provided by advocates, etc………………….. 95

4.5.1.3.1 Clarifications issued in
relation to services by
advocates……………………………… 95
4.5.1.3.2 Press Release issued in
relation to services ……………….. 96
4.5.1.4 Services by Arbitral Tribunal……………………………………… 96
4.5.1.4.1 Exemption for Services by Advocates and
Arbitral Tribunal………………………………………. 97
4.5.1.5 Sponsorship Services………………………………………………….. 98
4.5.1.6 Services provided by Government to Business Entity… 99
4.5.1.7 Renting Services provided by Government etc.
to a Registered Person………………………………………………. 100
4.5.1.8 Services provided by Director of a Company …………… 101
4.5.1.8.1 Clarification on Director Remuneration ………101
4.5.1.8.2 Service supplied by director in his
personal capacity to Company …………………….101

4.5.1.9 Services provided by Agent to an Insurance
Company………………………………………………………………….. 102
4.5.1.10 Services provided by Recovery Agent to a Bank/FI …. 102
4.5.1.11 Transportation of goods by vessel upto
custom station ………………………………………………………….. 102
4.5.1.11.1 Dual Taxation and Special Valuation
Procedure for GST on Ocean Freight………. 103
4.5.1.11.2 Special Valuation Provision for Transportation
by Vessel…………………………………………………. 103

4.5.1.12 Services by music composer, photographer
and artist ………………………………………………………………….. 104
4.5.1.13 Services by the members of Overseeing
Committee to Reserve Bank of India ………………………… 104
4.5.1.14 Supplies by DSAs to banks or NBFCs ………………………. 104
4.5.1.15 Reverse charge made applicable on specified
services to Banking Company…………………………………………105
4.5.1.16 Reverse charge made applicable on specified
services to Business Correspondent………………………………….. 105
4.5.1.17 Reverse charge made applicable on Supply of
Security Services to Registered Person……………………… 105
4.5.1.18 Services supplied by way of TDR or Floor Space
Index (FSI) (including additional FSI) for
construction of a project by a promoter…………………….. 106
4.5.1.19 Long-term lease of land (30 years or more) by
any person against consideration in the form of
upfront amount………………………………………………………… 106
4.5.1.20 Copyrights Granted by an Author……………………………. 107
4.5.1.21 Services provided by way of Renting of Motor
Vehicle ……………………………………………………………………… 108
4.5.1.22 Lending of Securities as Securities Lending
Scheme 1997……………………………………………………………… 108

4.5.1.23 Renting of Residential Dwelling to Registered Person . 109
4.5.1.24 RCM on renting of immovable properties
(w.e.f. 10. 10.2024)…………………………………………………….. 109
4.5.1.24.1 Renting of Immovable Property by
Unregistered Person to Composition
Dealers ……………………………………………………. 109
4.5.2 Reverse Charge on Goods…………………………………………………………. 110
4.5.2.1 Reverse Charge and Rate on Priority Sector
Lending Certificate (PSLC)……………………………………….. 112
4.5.2.2 Reverse Charge on Supply of Second-Hand
Goods by Government Clarified ………………………………. 112
4.5.2.3 RCM on scrap (w.e.f. 10.10.2024)………………………………. 113
4.5.2.3.1 Registration requirement for such
scrap suppliers (w.e.f 10. 10.2024) ………….. 113

4.6 Electronic Commerce Operator to be treated as supplier for
specified services …………………………………………………………………………………….. 113
4.7 Reverse Charge on Receipt of Supplies from an Unregistered Person …….. 116
4.8 Reverse Charge Tax Not to be Paid by Credit …………………………………………. 116
4.9 Credit on supplies used for making supplies on which reverse
charge is applicable…………………………………………………………………………………. 117
5. Classification of Supply 118
5.1 Composite Supply, Mixed Supply and Single Supply …………………………….. 118
5.1.1 Naturally bundled in ordinary course of business…………………….. 119
5.1.2 Principles for determining single supply ………………………………….. 120
5.1.3 Classification of Printing Contracts …………………………………………… 120
5.1.4 Clarifications issued in relation to printing of books…………………. 121
5.1.5 Classification of Cut Pieces of Fabric…………………………………………. 121
5.1.6 Clarification on classification of various supplies ……………………… 122
5.1.7 Time of supply in case of Composite supply…………………………….. 123
5.1.8 Time of supply in case of mixed supplies………………………………….. 124
5.2 Determination of tax liability under Composite supplies and
Mixed supplies – Section 8 of CGST Act………………………………………………….. 124
5.3 Judgments……………………………………………………………………………………………….. 124
5.4 Classification of Services …………………………………………………………………………. 126
5.5 Customs Classification under Customs Tariff Act, 1975 (‘CTA’)……………… 127
5.5.1 Codification under CTA……………………………………………………………. 127
5.5.2 Interpretation of CTA ……………………………………………………………….. 128
5.5.3 Classification Rules at a glance………………………………………………….. 128
5.5.4 Other Rules……………………………………………………………………………….. 128
5.5.5 Interpretative Rules…………………………………………………………………… 129
5.5.6 Classification of Parts………………………………………………………………… 129
5.5.7 General Principles of Classification…………………………………………… 130
6. Time of Supply 131
6.1 Section 12—Concept of Time of supply…………………………………………………… 131
6.1.1 Timeline for issuance of invoice—Section 31 of CGST Act………… 132

6.2 Time of Supply of Goods—Section 12 of CGST Act…………………………………. 133
6.2.1 Special Provision for Government Supplies and Goods
on Approval Basis …………………………………………………………………….. 134
6.2.2 GST on receipt of advance payment of specified
actionable claims ………………………………………………………………………. 134
6.2.3 Vouchers—Section 2(118) of CGST Act …………………………………….. 135
6.2.3.1 Supply of Vouchers are Outside the GST Ambit ………. 136
6.3 Time of Supply of Service—Section 13 of CGST Act ……………………………….. 136
6.3.1 Time of supply of services provided by contractor to
NHAI under hybrid annuity mode (HAM)
[Section 13(2) of CGST Act, 2017)………………………………………………. 137
6.3.2 Time of supply of services provided by Government for allocation
of spectrum usage or other natural resource
(Section 13(3) of CGST Act, 2017)………………………………………………. 138
6.3.3 Time of Supply in case of self-invoicing by recipient –
A dicotomy……………………………………………………………………………….. 139
6.4 Time of supply in case of change in rate of tax for both goods and services—
Section 14 of CGST Act……………………………………………………………………………. 140
6.5 Date of receipt of payment in case of change in rate of tax………………………. 140
7. Place of Supply of Goods 141
7.1 Need for Ascertaining Place of Supply……………………………………………………. 141
7.2 Delivery ………………………………………………………………………………………………….. 141
7.2.1 Constructive Delivery of Goods in Ex Works Delivery Cases …… 142
7.3 Supply involving movement of goods…………………………………………………….. 143
7.4 Intra-State Supplies—Sections 8 & 9 of IGST Act…………………………………….. 144
7.5 Inter-State Supplies—Section 7 of IGST Act…………………………………………….. 144
7.6 Location of Recipient of Services—Section 2(14) of IGST Act ………………….. 145
7.6.1 Recipient of Supplies–Section 2(93) of CGST Act………………………. 146
7.7 Location of supplier of Services—Section 2(15) of IGST Act……………………. 146
7.7.1 Supplier—Section 2(105) of CGST Act………………………………………. 147
7.8 Judgments……………………………………………………………………………………………….. 147
7.9 Place of Supply of Goods (not Import and Export)— Section 10
of IGST ……………………………………………………………………………………………………. 148
7.9.1 Place of Supply of Goods to Unregistered Person-Section
10(1)(ca) of the IGST Act …………………………………………………………… 150
7.10 Place of Supply of Goods imported into or exported from India—
Section 11 of IGST Act …………………………………………………………………………….. 150
8. Place of Supply of Services (Both Supplier and Recipient in India) 151
8.1 General Rule—Section 2(2) of IGST Act…………………………………………………… 151
8.1.1 Address on Record as defined u/s 2(3) of CGST Act ………………… 151
8.1.2 Place of Supply of Software Development Services…………………… 151
8.1.3 Bill to Ship to scenario for supply of Services……………………………. 152
8.1.4 Place of Supply in case of Services Provided by Ports ………………. 152
8.1.5 Place of Supply for Advertisement Services ……………………………… 153
8.2 Immovable Property Related—Section 12(3) of IGST Act………………………… 153

8.2.1 What are the criteria to determine if a service is
‘directly in relation to’ immovable property? ……………………………. 154
8.2.2 Judgments…………………………………………………………………………………. 155
8.2.3 Determination of Place of Supply in case of Immovable
Property Related Services in Multiple States
[Section 12(3) of IGST Act]………………………………………………………… 157
8.2.4 Place of Supply for Advertisement Services ……………………………… 157
8.3 Where personal appearance is required—Section 12(4) of IGST Act ……….. 158
8.4 Training and Performance Appraisal Related—Section 12(5) of IGST Act…. 158
8.5 Admission to Events—Section 12(6) of IGST Act…………………………………….. 158
8.6 Organisation of Events—Section 12(7) of IGST Act…………………………………. 159
8.6.1 Determination of Place of Supply in case of Event, etc.,
in Multiple States [Section 12(7) of IGST Act]……………………………. 160
8.6.2 Judgments…………………………………………………………………………………. 160
8.7 Transportation of Goods—Section 12(8) of IGST Act………………………………. 161
8.8 Transportation of Passengers—Section 12(9) of IGST Act ……………………….. 161
8.8.1 Continuous Journey—Section 2(3) of IGST Act…………………………. 162
8.9 Supply of services on board or conveyance or
vessel— Section 12(10) of IGST Act…………………………………………………………. 164
8.10 Supply of Telecommunication Services including Data Transfer,
Broadcasting, Cable and Direct to Home Television
services— Section 12(11) of IGST Act………………………………………………………. 164
8.10.1 Determination of Place of Supply in case of provision of
Lease Circuit Services in Multiple States
[Section 12(11) of IGST Act]………………………………………………………. 165

8.11 Supply of Banking or other financial or stock broking
services —Section 12(12) of IGST Act………………………………………………………. 165
8.12 Supply of Insurance services—Section 12(13) of IGST Act………………………. 165
8.13 Supply of Advertisement services—Section 12(14) of IGST Act………………. 166
8.13.1 Determination of place of supply of advertisement services to
Government ……………………………………………………………………………… 166

9. Place of Supply of Services–II (Either Supplier or Recipient
are located outside India) 168
9.1 Import and Export of Goods or Services or Both …………………………………….. 168
9.2 Zero Rated Supplies and Import/Export of Goods and
Services— (Section 16 of IGST Act) …………………………………………………………. 169
9.3 Place of Supply of Services Rules (Either Supplier or Recipient
are located outside India)—Section 13 of IGST Act …………………………………. 170
9.3.1 General Rule—Section 13(2) of IGST Act…………………………………… 170
9.3.1.1 Exemption to services having place of supply in
Nepal and Bhutan…………………………………………………….. 170
9.3.1.2 Place of Supply of Software Development
Services…………………………………………………………………….. 171
9.3.1.3 Place of Supply in relation to Advertising
Services to Foreign Clients …………………………………….. 171
9.3.2 Actual Performance Basis—Section 13(3) of IGST Act ………………. 173

9.3.2.1 Place of supply for testing software
loaded in a prototype ……………………………………………….. 174
9.3.2.2 Place of Supply in case of Temporary
Imports of Diamonds ……………………………………………….. 175
9.3.2.3 Judgments ………………………………………………………………… 175
9.3.3 Immovable Property Related—Section 13(4) of IGST Act………….. 175
9.3.4 Admission to or Organisation of Event, etc.—Section 13(5)
of IGST Act……………………………………………………………………………….. 175
9.3.5 Service supply in taxable and non-taxable
territory— Section 13(6) of IGST Act…………………………………………. 176
9.3.6 Service supply in multiple States /UTs—Section 13(7) of
IGST Act……………………………………………………………………………………. 176
9.3.6.1 Determination of Place of Supply in case of
Performance Based Services are
Received/Provided in Multiple States
[Section 13(7) of IGST Act]………………………………………… 177
9.3.6.2 Determination of Place of Supply in case of
Immovable Property R elated Services in
Multiple States [Section 13(7) of IGST Act]……………….. 177
9.3.6.3 Determination of Place of Supply in case of
Event, etc., in Multiple States
[Section 13(7) of IGST Act]………………………………………… 178

9.3.7 Service supplied by Banking co./FI/NBFC—
Section 13(8)(a) of IGST Act……………………………………………………… 178
9.3.7.1 Place of supply of Custodial Services by an
Indian Bank to FPI (Section 13(8) of IGST Act, 2017) … 179
9.3.8 Service provided by an intermediary—Section 13(8)(b) of
IGST Act……………………………………………………………………………………. 180
9.3.8.1 Determining factors to be an intermediary……………….. 181
9.3.8.2 CBIC Clarification on Intermediary………………………….. 182
9.3.8.3 Exemption to intermediary services in case of
merchant trade transactions of goods……………………….. 184
9.3.8.4 Place of Supply in relation to Advertising
Services to Foreign Clients ……………………………………….. 185
9.3.8.5 Place of Supply of Data Hosting Services provided
by suppliers located in India to cloud computing
service providers located outside India…………………….. 186
9.3.8.6 Judgments ………………………………………………………………… 187
9.3.9 Service provided by hiring of Yachts, etc.—Section 13(8)(c)
of IGST Act……………………………………………………………………………….. 191
9.3.10 Transportation of goods—Section 13(9) of IGST Act…………………. 192
9.3.10.1 Place of Supply for Launch of Satellite……………………… 193
9.3.11 Transportation of Passengers—Section 13(10) of IGST Act ……….. 193
9.3.12 Supply of services on board conveyance, etc.—
Section 13(11) of IGST Act…………………………………………………………. 194
9.3.13 Supply of Online Information and Database—
Section 13(12) & Section 14 of IGST Act…………………………………….. 194

9.3.14 Place of effective use and enjoyment of service—
Section 13(13) of IGST Act…………………………………………………………. 197
9.3.14.1 Place of Supply of R&D services related to
Pharmaceutical Sector………………………………………………. 197
9.3.14.2 Place of Supply in case of Aircraft MRO Services……… 199
9.3.14.2.1 Rate of Aircraft MRO Services…………………… 199
9.3.14.3 Place of Supply in case of MRO Services For
Ships and Vessels……………………………………………………… 199
9.3.14.3.1 Rate of Ship or Vessel MRO Services ………. 200
10. GST Rate on Supply of Services 201
10.1 Construction Services and Real Estate …………………………………………………….. 201
10.2 Commission Agents, etc………………………………………………………………………….. 202
10.3 Services relating to mining, petroleum exploration, electricity,
gas and water distribution………………………………………………………………………. 203
10.4 Accommodation Services in Hotels, etc…………………………………………………… 204
10.5 Restaurant Related Services…………………………………………………………………….. 204
10.6 Passenger Transportation in Rail…………………………………………………………….. 204
10.7 Passenger Transportation in Cab…………………………………………………………….. 204
10.8 Passenger Transportation through Air……………………………………………………. 204
10.9 Goods Transportation through Rail ………………………………………………………… 204
10.10 Goods Transportation through Vessel…………………………………………………….. 204
10.11 Goods Transportation through Road by Goods Transport Agency (GTA) … 204
10.12 Rental Services of Vehicles meant for Transportation……………………………… 204
10.13 Transportation of goods by postal or courier services …………………………….. 204
10.14 Services by Foreman of Chit Fund…………………………………………………………… 204
10.15 Transfer of Right to Use Goods……………………………………………………………….. 204
10.16 Real Estate Related………………………………………………………………………………….. 205
10.17 IPR Related……………………………………………………………………………………………… 205
10.18 Lease of Goods………………………………………………………………………………………… 205
10.19 R&D and Legal and Accounting Services………………………………………………… 205
10.20 Advertisement Space Selling and other professional services …………………. 205
10.20.1 GST Rate on selling of space for advertisement in souvenirs…….. 206
10.21 Supply of E-Books, Telecommunication, Broadcasting, etc……………………… 206
10.22 Tour Operator and Other Support Services …………………………………………….. 207
10.23 Agriculture Related Services …………………………………………………………………… 207
10.24 Maintenance, Repair and Installation Services ………………………………………… 207
10.24.1 Meaning of not taking input tax credit on goods or services …….. 208
10.25 Job Work Related Services ………………………………………………………………………. 209
10.26 Other Manufacturing, Publishing, Printing, etc. Services………………………… 209
10.27 Public Administration and Social Security Services ………………………………… 209
10.28 Education and Health Related Services …………………………………………………… 209
10.28.1 GST Rate on Catering in Educational Institution ………………………. 210
10.29 Sewage and Waste Collection Related Services……………………………………….. 210
10.30 Membership of Organisation Related Services………………………………………… 211
10.31 Admission to Events, films and Actionable Claim Related ……………………… 211

10.32 Residuary Entry………………………………………………………………………………………. 211
10.33 Domestic Services……………………………………………………………………………………. 211
10.34 Services provided by extra territorial organisations and bodies………………. 212
10.34.1 Activities of extra territorial organizations and bodies ……………… 212
10.35 Construction, Engineering or Installation Services in relation to
Renewable Energy Plants………………………………………………………………………… 212
10.36 GST applicability on services of Film Distributors and sub-distributors …. 213
10.37 Definition of the Terms used in the Rate Notifications ……………………………. 213
10.37.1 Meaning of Goods …………………………………………………………………….. 213
10.37.2 Applicability of Customs Tariff Act, 1975 …………………………………. 213
11. Exemptions on Supply of Services 214
11.1 Charitable Institution Services ………………………………………………………………… 214
11.1.1 CBIC Clarification on Charitable Institutions …………………………… 218
11.1.1.1 GST on management of educational institutions
by charitable trusts …………………………………………………… 219
11.1.1.2 Import of Services …………………………………………………….. 219
11.1.1.3 Services by and to Educational Institutions
(including institutions run by Charitable trusts) ………. 219
11.1.1.4 GST on arranging yoga and meditation camp by
charitable trusts………………………………………………………… 220
11.1.1.5 GST on hospital managed by charitable trusts………….. 220
11.1.1.6 GST on services provided to charitable trusts…………… 221
11.1.1.7 GST on supply of goods by Charitable Trusts…………… 221
11.1.2 Judgments…………………………………………………………………………………. 221
11.2 Transfer of a Going Concern, as a Whole or an Independent Part Thereof…… 221
11.3 Services to or by Government …………………………………………………………………. 222
11.4 Construction related Services ………………………………………………………………….. 222
11.5 Rent Related Services………………………………………………………………………………. 222
11.6 Accommodation in Hotel, etc. Related Service………………………………………… 222
11.7 Passenger Transport Related Service ………………………………………………………. 222
11.8 Goods Transport Related Service…………………………………………………………….. 222
11.9 Transfer of Right to Use or Leases, etc. ……………………………………………………. 222
11.10 Financial Institutions, Insurance, Employee Benefits, etc. Related…………… 222
11.11 Education or Sports Related ……………………………………………………………………. 223
11.12 Agriculture Related…………………………………………………………………………………. 223
11.13 Health Related ………………………………………………………………………………………… 223
11.13.1 Applicability of GST on Services provided by Hospitals…………… 225
11.14 Event, Brand Ambassador, Artist, Music, etc. Related…………………………….. 226
11.15 Public Convenience Related ……………………………………………………………………. 227
11.16 Services to members by societies, unincorporated body or
non-profit entity ……………………………………………………………………………………… 227
11.16.1 CBIC Clarification on Services by RWAs…………………………………… 228
11.17 Tour Operator Services……………………………………………………………………………. 229
11.18 Incubator or Incubatee Related ……………………………………………………………….. 229
11.19 Advocate, Arbitral Tribunal Related……………………………………………………….. 230

xxii CONTENTS
11.19.1 Partnership firm and LLP …………………………………………………………. 231
11.20 Transmission of Electricity Related …………………………………………………………. 232
11.20.1 Exemption to meter testing and ancillary services to transmission
and distribution of electricity (w.e.f. 10.10.2024)…………………….. 233
11.20.1.1 Regularizing payment of GST on certain support services
provided by an electricity transmission
or distribution utility………………………………………………… 234

11.21 Exemption and Refund to Canteen Store Departments (CSD)
(Section 55 of CGST Act) …………………………………………………………………………. 234
11.22 Exemption on Supplies to TDS Deductor in Specified Circumstances …….. 234
11.23 Exemption from Reverse Charge Payment on Purchase of Second
Hand Goods From Unregistered Supplier………………………………………………. 235
11.24 Inter-State Supply of Conveyances—Not a Supply …………………………………. 235
11.25 Services Associated with Transit Cargo to Nepal and Bhutan…………………. 236
11.26 Exemption to services having place of supply in Nepal and Bhutan……….. 237
11.27 Toll charges to Road, etc………………………………………………………………………….. 237
11.27.1 GST on Overload Charges at Toll Plazas…………………………………… 237
11.27.2 Applicability of GST on Payment of Annuity for
Construction of Road………………………………………………………………… 237
11.27.3 GST on payment of additional toll fee ………………………………………. 238
11.28 Exemption to royalties payment to be made outside India ……………………… 238
11.29 Import of Services by SEZ unit or Developer ………………………………………….. 239
11.30 Import of Goods by SEZ unit or Developer…………………………………………….. 239
11.31 Services Provided by Indian Establishment to Establishment
Located Outside India …………………………………………………………………………….. 239
11.32 Services Imported by UNO or Specified Organizations…………………………… 240
11.33 Services Imported by Foreign Diplomatic Missions,
Consular posts, Diplomatic Agent or Career Consulars ………………………….. 240
11.33.1 Services Provided by ADB and IFC…………………………………………… 241
11.34 Import of Services by Individual for Non-Business Purposes …………………. 241
11.35 Satellite Launch by ISRO…………………………………………………………………………. 241
11.36 Miscellaneous Exemptions………………………………………………………………………. 242
12. Compensation Cess and Rate of Tax on Goods 243
12.1 Compensation Cess ………………………………………………………………………………… 243
12.2 GST Rate on Supplies of Goods ………………………………………………………………. 245
12.2.1 GST Rate on REC certificates and PSLC certificates…………………… 246
12.3 Special Rate on Intra State Supply of Goods or Services………………………….. 247
12.4 GST Rate on laterals and other parts (Even if supplied separately)
solely used for another goods………………………………………………………………….. 247
13. Valuation of Supply 248
13.1 Valuation of Taxable Supply—Section 15 of CGST Act
Valuation of Supply ………………………………………………………………………………… 248
13.1.1 Price payable—Section 15(1) of CGST Act ………………………………… 249
13.1.2 Inclusions u/s 15(2) of CGST Act ……………………………………………… 250
13.1.3 Exclusions from value of supplies u/s 15(3) of CGST Act…………. 253

13.1.3.1 Post Supply Discount……………………………………………….. 254
13.1.3.2 Treatment of Gifts, Samples, Discounts and
Post Supply Discounts ……………………………………………… 255
13.1.3.3 Treatment of Additional Discounts ………………………….. 256
13.1.3.4 Evidence for non-inclusion of discount in taxable
value of the supplier (Section 15 of CGST Act, 2017)… 258
13.1.4 Related Person u/s 15 of CGST Act…………………………………………… 258
13.1.5 Examples for Valuation of Supplies ………………………………………….. 259
13.1.6 Inclusion of Value of Moulds and Dies for Valuation Purposes… 260
13.1.7 GST on Car Maintenance Comprising of Both Goods and
Services …………………………………………………………………………………….. 260
13.1.8 Value of Supply where Kerala Flood Cess is Applicable
(Rule 32A of CGST Rules)…………………………………………………………. 260
13.2 Valuation Rules—Section 15(4) of CGST Act…………………………………………… 260
13.2.1 Valuation based on costing of goods (Rule 30)………………………….. 261
13.2.2 Residual Rule (Rule 31) …………………………………………………………….. 261
13.2.3 Consideration not wholly in money (Rule 27)…………………………… 261
13.2.4 Branch Transfer or Supplies to Related Persons of
goods and services (Rules 28 and 32(7)) …………………………………… 263
13.2.4.1 Valuation of Extending Corporate Guarantees
(Rule 28(2))……………………………………………………………….. 264
13.2.4.1.1 Corporate Guarantee related clarifications. 265
13.2.4.2 GST applicability on transactions between HO
and Branches ……………………………………………………………. 266
13.2.4.2.1 Whether Input Service Distributor
(ISD) route is mandatory to follow?………… 266
13.2.4.2.2 What should be taxable value for
services provided by HO to BO? …………….. 266

13.2.4.3 Taxability of Loan Granting Transaction
Between Related Parties……………………………………………. 267
13.2.4.4 GST On Import of Services by Related Parties ………….. 268
13.2.5 Supplies of Goods (only) Through Agent (Rule 29)…………………… 269
13.3 Valuation of Specific Supplies (Rule 32)………………………………………………….. 269
13.3.1 Valuation of Foreign Currency Exchange—Rule 32(2)………………. 269
13.3.2 Valuation of Air Travel Agent Services—Rule 32(3) …………………. 269
13.3.3 Life Insurance Services—Rule 32(4) ………………………………………….. 270
13.3.4 Margin Scheme – Sale of Second Hand Goods—Rule 32(5) ………. 270
13.3.5 Vouchers, Coupons and Stamps (Other than
postage stamp)— Rule 32(6)……………………………………………………… 270
13.3.6 Value of supply of services in case of Pure
Agents—Rule 32(7) …………………………………………………………………… 270
13.3.6.1 Non-Inclusion of Airport Levies in Taxable Value……. 271
13.3.6.2 Judgments ………………………………………………………………… 272
13.3.7 Value of Lottery………………………………………………………………………… 272
13.3.8 Valuation of Betting, Gambling, online gaming,
online money gaming, casinos and Horse Racing……………………… 273

13.3.9 Special Valuation Provision for Transportation by Vessel…………. 273
13.4 Valuation for Construction of Renewable Energy Projects………………………. 273
13.5 Valuation on the Basis of Retail Sales Price……………………………………………… 274
13.6 Exchange rate for Valuation of Supplies (Rule 34)…………………………………… 276
14. Input Tax Credit 277
14.1 Some important definitions …………………………………………………………………….. 277
14.1.1 Scope of Credits under erstwhile CENVAT credit
Rules (CCR) and GST……………………………………………………………….. 281
14.2 Eligibility for availment of input credit—Section 16 of CGST Act …………… 281
14.2.1 ITC Not Available on Input Invoices Not Available in GSTR-2B. 285
14.2.1.1 Clarification Put Forth for Restriction of Credit
Availment ………………………………………………………………… 286
14.2.1.2 Full credit allowed owing to COVID-19 during Specified
Time Period………………………………………………………………. 287
14.2.1.3 DRC 01C Notice in case of difference between
ITC in GSTR-3B and auto populated in
GSTR-2B (Rule 88D) …………………………………………………. 287
14.2.2 Clarification as to availability of credit to suppliers engaged
in passenger transportation by air in economy class …………………. 287
14.2.3 Credit Availability in respect of addition to taxable value pursuant
to Valuation Provisons ……………………………………………………………… 287
14.2.4 Specifying return in Form GSTR-3B as return to be filed
under Section 39 ……………………………………………………………………….. 288
14.2.5 Restriction on ITC Utilisation on specified Taxpayers for
Tax Payment: Section 49 and Rule 86B ……………………………………… 288
14.2.6 Restricted credit in GSTR-2B as per Section 38………………………….. 289
14.2.7 Reversal of ITC where supplier has not paid the taxes:
Section 41………………………………………………………………………………….. 290
14.2.8 Timing of ITC availability in case of RCM Payment on
supplies by unregistered persons ……………………………………………… 290
14.2.9 Whether ITC is available on “Any Other Duty paying
Document”? ……………………………………………………………………………… 291
14.2.10 Evidence for non-inclusion of discount in taxable value
of the supplier (Section 15 of CGST Act, 2017) ………………………….. 291
14.2.11 Constructive Delivery of Goods in Ex Works Delivery Cases………..292
14.2.12 Judgments…………………………………………………………………………………. 292
14.3 Disallowed Credits—Section 17(5) of CGST Act……………………………………… 297
14.3.1 Additional categories on which input tax credit is
restricted or not available………………………………………………………….. 301
14.3.2 ITC Availability in case of Sales Promotion Scheme………………….. 302
14.3.3 ITC Availed and Reversed………………………………………………………… 302
14.3.4 Clarification on barred ITC on motor vehicle, etc. …………………….. 303
14.3.4.1 ITC availability on purchase and resale of
demo cars …………………………………………………………………. 303

14.3.5 ITC availability on manholes to Telecommunication
Service Providers………………………………………………………………………. 304

 

14.3.6 GST Applicability and ITC availability on warranty
and extended warranty …………………………………………………………….. 304
14.3.7 Judgments…………………………………………………………………………………. 306
14.4 ITC reversal / restriction for exempt/non-business
supplies— Section 17(1) of CGST Act ……………………………………………………… 314
14.4.1 CBIC Flyer………………………………………………………………………………… 318
14.4.2 Value of Land and Security ………………………………………………………. 318
14.4.3 Value of exempt Supplies………………………………………………………….. 318
14.5 Special cases—Section 18 of CGST Act ……………………………………………………. 318
14.5.1 Removal of Capital Goods or Plant &
Machinery— Section 18(6) of CGST Act……………………………………. 318
14.5.2 Credit on taking registration—Section 18(1) and 18(4) of
CGST Act………………………………………………………………………………….. 319
14.5.3 Credit Transfer on Amalgamation, Merger, etc.
allowed to Transferee—Section 18(3) of CGST Act……………………. 321
14.5.3.1 Rules for allowing the credit on
amalgamation, etc…………………………………………………….. 321
14.5.3.2 Clarifications on Transfer of Credits in
case of Demerger………………………………………………………. 322

14.5.4 Credit Transfer on Obtaining Separate Registration for
Multiple Places of Business within State
(Rule 41A of CGST Rules w.e.f. 01.02.2019) …………………………….. 322
14.5.5 Credits and Job Work—Section 19 of CGST Act and
Input Credit Rules…………………………………………………………………….. 323
14.6 Input Service Distributor (‘ISD’)—Section 20 of CGST Act ……………………… 324
14.6.1 Meaning of ISD—Section 2 of CGST Act…………………………………… 324
14.6.2 Input Service Distributor (ISD) …………………………………………………. 324
14.6.3 Refund claim by ISD and Non-Resident Taxable Person…………… 328
14.6.4 CBIC Flyer………………………………………………………………………………… 328
14.6.5 Judgments…………………………………………………………………………………. 330
14.7 Blocking Available Input Tax Credit (Rule 86A)……………………………………… 330
14.7.1 Reasons for disallowing the usage of input tax credit……………….. 330
14.7.2 Consequences of such disallowance………………………………………….. 331
14.7.3 Revocation of such Disallowance ……………………………………………… 331
14.7.4 Whether the order given is Appealable? …………………………………… 331
14.7.5 Guidelines for Blocking the Credit under Rule 86A ………………….. 332
14.7.5.1 Grounds for blocking the credit ……………………………….. 332
14.7.5.2 Proper Authority for Blocking the Credit…………………. 332
14.7.5.3 Process of Blocking the Credit ………………………………….. 332
14.7.5.4 Period of Blocking of Credit……………………………………… 333
14.7.6 Judgments…………………………………………………………………………………. 333
14.8 ITC Related Amensty Schemes ……………………………………………………………….. 333
14.8.1 ITC Availment of FY 2017-18 to FY 2020-21 input
invoice till 30th November, 2021……………………………………………….. 333
14.8.2 ITC availment by persons whose registration
cancellation has been revoked…………………………………………………… 334
14.9 Forms under Input Tax Credit Rules ………………………………………………………. 335

15. Job Work 336
15.1 Job work Definition—Section 2(68) of CGST Act …………………………………….. 336
15.1.1 Whether Manufacturing Activity Will Come
under Job Work Process ……………………………………………………………. 337
15.2 Job Work Procedure—Section 143 of CGST Act………………………………………. 337
15.2.1 Issue of Challan under Job Work Procedures ……………………………. 339
15.2.2 Character of supply of goods by Principal to a job worker ……….. 340
15.2.3 Usage of goods by job worker…………………………………………………… 340
15.2.4 Input Tax Credit Availability to Job Worker and Principal……….. 340
15.2.5 Registration Requirements for principal and job worker…………… 341
15.2.6 Movement of goods for job work………………………………………………. 341
15.2.7 Issuance of intimation by principal under Section 143 of
CGST Act, 2017 …………………………………………………………………………. 342
15.2.7.1 ITC-04 filing periodicity …………………………………………… 343
15.2.8 Valuation of Job work services………………………………………………….. 343
15.2.9 Determination of Place of Supply for moving job
worked goods directly from job worker’s premises ………………….. 343
15.3 Job Work and Credit to Principal—Section 19 of CGST Act…………………….. 344
15.4 Whether Goods or Services?—Schedule II of CGST Act………………………….. 345
15.4.1 Classification of Printing Contracts …………………………………………… 345
15.4.2 Clarifications issued in relation to printing of books…………………. 346
15.4.3 GST on Body building of Motor Vehicles………………………………….. 346
15.4.4 Job work in relation to manufacture of alcoholic liquor…………….. 346
15.5 Place of Supply—Section 12 of IGST Act…………………………………………………. 347
15.6 Place of Supply—Section 13 of IGST Act…………………………………………………. 347
15.7 GST Rate on Job Work Services……………………………………………………………….. 347
15.7.1 Job Work Related………………………………………………………………………. 348
15.7.1.1 GST Rate on job work to manufacture
alcoholic liquor…………………………………………………………. 357
15.7.2 Other Manufacturing, Publishing, Printing, etc., Services…………. 357
15.8 Exemptions……………………………………………………………………………………………… 359
15.8.1 Customised Milling of Paddy……………………………………………………. 359
15.9 CBIC Flyer on Job Work………………………………………………………………………….. 360
15.9.1 Job work Procedural aspects …………………………………………………….. 360
15.9.2 Input Tax credit on goods supplied to job worker…………………….. 361
15.9.3 Extended Meaning of input………………………………………………………. 361
15.9.4 Waste clearing provisions …………………………………………………………. 361
16. Construction of Complex & Real Estate 362
16.1 Construction of Complex—Schedule II of CGST Act ………………………………. 362
16.2 Definitions ………………………………………………………………………………………………. 364
16.3 Various models prevalent in the industry for construction of complex……… 365
16.3.1 GST Applicability on Transfer of Development Rights……………… 365
16.4 Whether Goods or Service?—Schedule II of CGST Act……………………………. 366
16.5 Input Credit—Section 17(5) of CGST Act………………………………………………… 366

 

16.5.1 Determination of Proportionate credit attributable to
Taxable and Exempt Supplies for Construction of Complex …….. 367
16.6 Place of Supply—Section 12 of IGST Act…………………………………………………. 367
16.7 Place of Supply—Section 13 of IGST Act…………………………………………………. 368
16.8 GST Rates………………………………………………………………………………………………… 368
16.8.1 Meaning of not taking input tax credit on goods or services …….. 387
16.8.1.1 Value of Land and Total Amount …………………………….. 387
16.8.1.2 Government Authority [Para 4(ix)]…………………………… 388
16.8.1.3 Government Entity [Para 4(x)]………………………………….. 388
16.8.1.4 CBIC Flyer on Valuation of Construction of
Complex Services……………………………………………………… 388
16.8.1.5 What are Affordable Housing Projects?……………………. 389
16.8.1.6 Definitions………………………………………………………………… 389
16.8.2 Real Estate Related Supplies……………………………………………………… 395
16.8.2.1 Meaning of Total Amount………………………………………… 396
16.8.3 Rate on Services Supplied by Unregistered Suppliers to
Promoters …………………………………………………………………………………. 397
16.8.4 Rate on Goods Supplied by Unregistered Suppliers to
Promoters …………………………………………………………………………………. 398
16.8.5 GST applicability on PLC charges in relation to
Construction of Complex ………………………………………………………….. 398
16.9 Exemptions……………………………………………………………………………………………… 399
16.9.1 Residential Complex…………………………………………………………………. 400
16.9.2 Original Works …………………………………………………………………………. 400
16.9.3 Exemption on Transfer of Development Rights, etc. …………………. 402
16.9.3.1 Determination of Value for the purpose of
Exemption and Payment by Promoter
under RCM ………………………………………………………………. 405

16.10 Liability to pay tax in case of joint development
(Section 148 of CGST Act) ……………………………………………………………………….. 406
16.10.1 Special Provision for Payment of GST by Promoter on
Procurement of Development Rights or FSI or Long-Term
Lease (Section 148 of CGST Act) ……………………………………………….. 407
16.11 Press Release in relation to Construction of Complex……………………………… 409
16.12 Refund of Input Tax………………………………………………………………………………… 409
16.13 Reverse Charge ………………………………………………………………………………………. 410
16.13.1 Reverse Charge on Receipt of Supplies from an
Unregistered Person…………………………………………………………………. 410
16.13.2 Reverse Charge on Services ………………………………………………………. 411
16.14 Judgments……………………………………………………………………………………………….. 411
16.15 ITC Reversals ………………………………………………………………………………………….. 415
16.15.1 ITC Reversal in relation to inputs and input
services for Construction of Complex……………………………………….. 415
16.15.1.1 Periodic Calculation of “E” and “F” for
tax period wise calculations in case of
Construction of Complex services…………………………….. 415

16.15.1.2 Final Calculation of “E” and “F” in case of
Construction of Complex services……………………………. 415
16.15.1.3 For projects commence on or after 1st April, 2019,
which did not undergo or did not require
transition of input tax credit consequent
to change of rates of tax on 1st April, 2019 ………………. 415
16.15.1.4 For commercial portions in projects other than
RREP which underwent transition of input tax
credit consequent to change of rates of tax on
1st April, 2019…………………………………………………………… 416
16.15.1.5 For RREP projects which underwent transition of input
tax credit consequent to change of rates of
tax on 1st April, 2019………………………………………………… 417

16.15.2 ITC Reversal in relation to capital goods for
Construction of Complex ………………………………………………………….. 417
16.15.2.1 Periodic Calculation of “E” and “F” for tax
period wise calculations
in case of Construction of Complex services ……………. 417
16.15.2.2 Final Calculation of “E” and “F” in case
of Construction of Complex services ……………………….. 417
16.16 Clarifications on Real Estate ……………………………………………………………………. 419
16.17 GST on sale of developed land ……………………………………………………………….. 419
16.18 GST on Preferential Location Charges (PLC)…………………………………………… 419
16.19 Challenges ………………………………………………………………………………………………. 419
17. Services by or to Government 421
17.1 Supplies by Government…………………………………………………………………………. 421
17.2 GST Rates………………………………………………………………………………………………… 428
17.2.1 Real Estate Related Suppllies ………………………………………………………… 428
17.3 Exemptions available to supply by or to Government…………………………….. 429
17.3.1 Clarification on non-applicability of GST on general
insurance services provided to/by Government ………………………. 447
17.3.2 Exemption on Supplies to TDS Deductor in Specified
Circumstances…………………………………………………………………………… 447
17.3.3 Applicability of GST on Milling of Wheat/Paddy under PDS………… 447
17.3.4 Applicability of GST on Loans Guaranteed by State
Government to its undertakings and PSUs …………………………………….. 448
17.3.5 GST Exemptions to Coaching Services Supplied by NGOs
under Central Scheme of ‘Scholarship for Students
with Disabilities’ …………………………………………………………………………….. 448
17.3.6 GST Exemption on services supplied to CPWD by way of
horticulture……………………………………………………………………………………. 448
17.3.8 GST on statutory collections made by RERA…………………………….. 448
17.3.9 Exemption to grants received for R&D by Government Entity or
specified Institutions (w.e.f. 10.10.2024)…………………………………….. 449
17.3.10 DDA is not a local authority……………………………………………………… 449
17.3.11 Facility Management services to MCD is not exempt……………………… 449

17.4 Reverse Charge on Services …………………………………………………………………….. 450
17.5 Reverse Charge on Goods……………………………………………………………………….. 452
17.5.1 Reverse Charge on Supply of Second-Hand Goods by
Government Clarified……………………………………………………………….. 453
17.5.2 Judgments…………………………………………………………………………………. 453
18. Services relating to Agriculture 454
18.1 Registration …………………………………………………………………………………………….. 454
18.2 Exemption of Services in relation to Agriculture …………………………………….. 455
18.2.1 Terminologies in the Exemptions ……………………………………………… 458
18.2.2 Customised Milling of Paddy……………………………………………………. 459
18.2.3 Clarification as to Agricultural Produce ……………………………………. 459
18.2.4 Applicability of GST on storage or warehousing of
cotton in baled or ginned form………………………………………………….. 460
18.2.5 Judgments and Advance Rulings Relating to
Agricultural Produce ………………………………………………………………… 460
18.3 GST Rate on services……………………………………………………………………………….. 461
18.3.1 Meaning of Agriculture Extension (Para 24)……………………………… 463
18.3.2 Meaning of Agricultural Produce (Para 24) ………………………………. 463
18.3.3 Meaning of Agricultural Produce Marketing
Committee or Board (Para 24)…………………………………………………… 463
18.4 Reverse Charge on Goods……………………………………………………………………….. 463
19. Service in Relation to Passenger Transport 467
19.1 Rate of GST on Passenger Transport Services………………………………………….. 467
19.1.1 Passenger Transportation in Rail………………………………………………. 467
19.1.2 Passenger Transportation in Cab………………………………………………. 468
19.1.3 Rental Services of Vehicles Meant for Transportation……………….. 470
19.1.4 Passenger Transportation through Air……………………………………… 473
19.1.4.1 Clarification as to availability of credit to
passenger transportation by air in economy class …….. 475
19.1.4.2 Meaning of not taking input tax credit on goods
or services…………………………………………………………………. 475
19.1.4.3 Specified Organisations ……………………………………………. 475
19.1.5 GST on Helicopter Transportation Services (w.e.f. 10.10.2024)….. 475
19.2 Exemption on Passenger Transport Services …………………………………………… 476
19.2.1 Stage carriage……………………………………………………………………………. 477
19.2.2 Metro, monorail or tramway …………………………………………………….. 478
19.2.3 Inland waterways……………………………………………………………………… 479
19.2.4 Metered cabs, radio taxis or auto rickshaws or e-rickshaw
Metered Cab……………………………………………………………………………… 479
19.2.5 Contract Carriage ……………………………………………………………………… 480
19.2.6 Maxi cab and motorcab …………………………………………………………….. 481
19.2.7 Omnibus …………………………………………………………………………………… 481
19.2.8 Motor Vehicle……………………………………………………………………………. 481
19.2.9 GST exemption on hiring of vehicle by Companies
for transportation of employees………………………………………………… 481

19.2.10 GST applicability on passenger transportation through
private ferry………………………………………………………………………………. 482
19.2.11 Difference between renting of motor vehicle and
passenger transportation…………………………………………………………… 482

19.3 Liability of Electronic Commerce Operator to pay Tax for
specified services under Section 9(5) of the CGST Act …………………………….. 483
19.4 Place of Supply (When both recipient and provider are located in India)—
Section 12(9) of IGST Act…………………………………………………………………………. 483
19.4.1 Continuous Journey—Section 2(3) of IGST Act…………………………. 483
19.5 Place of Supply (When either recipient or supplier is located
outside India)—Section 13(10) of IGST Act……………………………………………… 484
19.5.1 Supply of services on board conveyance, etc.—
Section 13(11) of IGST Act…………………………………………………………. 484
19.6 Valuation of Air Travel Agent Services (Valuation Rule)………………………… 484
19.7 Inter-State Movement of Conveyances ……………………………………………………. 485
19.8 Reverse Charge on Services provided by way of Renting of
Motor Vehicle………………………………………………………………………………………….. 486
19.9 Exemption on Import of Services by Establishment of Foreign
Airlines in India (w.e.f. 10.10.2024)………………………………………………………….. 487
20. Transportation of Goods 489
20.1 What is Goods?……………………………………………………………………………………….. 489
20.2 Goods Transport Agency (GTA)……………………………………………………………… 490
20.2.1 Enrolment for Transporters ………………………………………………………. 490
20.3 Courier Agency……………………………………………………………………………………….. 491
20.3.1 Door to Door Transportation…………………………………………………….. 491
20.3.2 Difference between Courier Agency and GTA………………………….. 491
20.4 GST Rate on Goods Transportation Services …………………………………………… 492
20.4.1 Goods Transportation through Rail ………………………………………….. 492
20.4.2 Goods Transportation through Vessel………………………………………. 493
20.4.3 Goods Transportation through Road by Goods
Transport Agency (GTA) ………………………………………………………….. 494
20.4.4 Transportation of Goods Through Pipeline ………………………………. 497
20.4.5 Multimodal Transportation of Goods ……………………………………….. 498
20.4.6 Support Services in Transportation of Goods by GTA………………. 501
20.4.7 Multimodal Transportation, Mode of Transport and
Multimodal Transporter……………………………………………………………. 503
20.4.8 Transportation of goods by postal or courier services ………………. 505
20.4.9 Transportation of goods by ropeway………………………………………… 506
20.5 Exemption on Goods Transportation Services ………………………………………… 506
20.5.1 Goods Transportation Through Air ………………………………………….. 506
20.5.2 Goods Transportation Through Vessel or Rail ………………………….. 507
20.5.3 Goods Transportation by GTA………………………………………………….. 508
20.5.4 Partnership firm and LLP …………………………………………………………. 512
20.5.5 Services associated with transit cargo to Nepal and Bhutan……… 512
20.5.5.1 GST exemption on services associated with
transit cargo both to and from Nepal and Bhutan…….. 512

20.5.6 Aircraft, Vessel, Goods Carriage and Custom Station……………….. 512
20.5.7 Inland waterways……………………………………………………………………… 514
20.6 Reverse Charge Mechanism on Services………………………………………………….. 515
20.6.1 Who will be treated as recipient of GTA services?…………………….. 516
20.6.2 Firm and LLP ……………………………………………………………………………. 517
20.6.3 Special Valuation Provision for Transportation by Vessel…………. 517
20.6.4 Undertaking to be filed by GTA………………………………………………… 517
20.6.5 Reverting to RCM by GTA operating under forward charge…….. 517
20.7 Place of Supply (both supplier and recipient are located in
India)—Section 12(8) of IGST Act……………………………………………………………. 519
20.7.1 ITC on Transportation of Goods with destination outside India.. 519
20.8 Place of Supply (either supplier or recipient is located in
India)— Section 13(9) of IGST Act…………………………………………………………… 519
20.9 Inter-State Movement of Conveyances ……………………………………………………. 521
20.10 Clarification on GTA……………………………………………………………………………….. 522
20.10.1 Who is a GTA – Goods Transport Agency? ………………………………. 522
20.10.2 Position under GST…………………………………………………………………… 522
20.10.3 What is a consignment note? …………………………………………………….. 523
20.10.4 Significance of the term ‘in relation to’ in the definition of GTA.. 523
20.10.5 GST on Ancillary services with GTA services …………………………… 523
21. Transfer of Right To Use, Lease, License, Etc. 524
21.1 Transaction as supply of goods or services ……………………………………………… 524
21.2 GST Rate on supply of such services……………………………………………………….. 525
21.2.1 Rental Services of Transport Vehicles with Operators ………………. 525
21.2.1.1 GST on Renting of trucks and other freight vehicles…. 529
21.2.2 Transfer of Right to Use Goods…………………………………………………. 529
21.2.2.1 Meaning of not taking input tax credit on
goods or services………………………………………………………. 530
21.2.2.2 Meaning of Operator for Leasing of Aircraft
(Para 15(iv))………………………………………………………………. 530
21.2.2.3 Meaning of Scheduled Air Transport Services
for Leasing of Aircraft (Para 15(iv)……………………………. 530
21.2.2.4 Meaning of Scheduled Air Cargo Services for
Leasing of Aircraft (Para 15(iv)) ……………………………….. 531
21.2.2.5 SAC is determining factor to determine whether supply
falls under “same line of business”………………………….. 531
21.2.3 IPR Related……………………………………………………………………………….. 531
21.2.3.1 Meaning of Information Technology
Software (Para 17(ii))………………………………………………… 532
21.2.3.2 Copyright…………………………………………………………………. 532
21.2.3.3 SAC is determining factor to determine whether
supply falls under “same line of business”………………. 532
21.2.3.4 Trademark………………………………………………………………… 533
21.2.3.5 Patent……………………………………………………………………….. 533
21.2.3.6 Design………………………………………………………………………. 533

21.2.3.7 Possible Classification of Software……………………………. 533
21.2.3.8 Permanent Transfer of Intellectual
Property Rights ………………………………………………………… 534
21.2.4 Lease…………………………………………………………………………………………. 534
21.2.4.1 Clarification on Grant of Right for Mineral
Exploration and Mining……………………………………………. 536
21.2.4.2 SAC is determining factor to determine whether supply
falls under “same line of business” …………………………. 536
21.3 Compensation Cess Rate…………………………………………………………………………. 536
21.4 Exemptions……………………………………………………………………………………………… 537
21.4.1 Hire or Renting of Vehicles……………………………………………………….. 539
21.4.2 Exemption to Royalties Payment to be made Outside India ……… 539
21.4.3 Difference between instalment sales, conditional sale,
outright sales and hire purchase……………………………………………….. 539
21.4.4 Lease…………………………………………………………………………………………. 540
21.4.5 Hiring……………………………………………………………………………………….. 540
21.4.6 Transfer of right to use ……………………………………………………………… 540
21.4.7 Judgments…………………………………………………………………………………. 540
21.5 Reverse charge ………………………………………………………………………………………… 541
21.5.1 Copyright………………………………………………………………………………….. 543
21.6 Clarification on GST Rate Applicable on Imported Equipment……………….. 543
22. Renting of Immovable Properties 544
22.1 Whether service or goods?………………………………………………………………………. 544
22.2 What is renting in relation to immovable property?………………………………… 544
22.3 GST Rate …………………………………………………………………………………………………. 545
22.3.1 GST rate on electricity charges charged by owner from tenant …. 545
22.4 Exemptions……………………………………………………………………………………………… 545
22.4.1 Residence and Dwelling (S.No. 13)……………………………………………. 550
22.4.1.1 Exemption to residential dwelling……………………………. 551
22.4.2 Precincts and Religious ceremony (S.No. 14)…………………………….. 551
22.4.3 Religious place………………………………………………………………………….. 552
22.4.4 Exemption to Upfront Premium Payable in Instalment…………….. 552
22.5 Place of Supply of Services (When both supplier and recipient are
located in India)………………………………………………………………………………………. 553
22.6 Place of Supply of Services (When either supplier or recipient
is located outside India) ………………………………………………………………………….. 553
22.7 Reverse Charge……………………………………………………………………………………….. 554
22.7.1 Renting Services Provided by Government etc., to a
Registered Person……………………………………………………………………… 554
22.7.2.1 Meaning of Residential Dwelling……………………………… 554
22.7.2.2 Service supplied by director in his personal
capacity to Company………………………………………………… 555

22.7.3 RCM on renting of immovable
properties (w.e.f. 10. 10.2024) ……………………………………………………. 555

22.7.3.1 Renting of Immovable Property by
Unregistered Person to Composition Dealers …………… 556
22.8 Judgments……………………………………………………………………………………………….. 556
23. Specified Actionable Claims 558
23.1 Supplier of specified actionable claims ……………………………………………………. 558
23.2 GST Rate on Services ………………………………………………………………………………. 559
23.3 GST Rate on Goods …………………………………………………………………………………. 560
23.3.1 Judgments…………………………………………………………………………………. 560
23.4 Online Gaming and Online Money Gaming……………………………………………. 561
23.4.1 Online Gaming …………………………………………………………………………. 561
23.4.2 Online Money Gaming……………………………………………………………… 561
23.4.2.1 Virtual Digital Asset…………………………………………………. 562
23.5 GST on receipt of advance payment of specified actionable claims …………. 562
23.6 Value of specific specified actionable claims (Section 15(5) of CGST Act) .. 563
23.7 Value of Online Gaming including actionable claim involved in
Online Money Gaming (Rule 31B of CGST Rules)…………………………………… 563
23.8 Value of actionable claim involved in Casinos (Rule 31C of
CGST Rules)……………………………………………………………………………………………. 563
23.9 Value of Lottery………………………………………………………………………………………. 564
23.10 Valuation of Betting, Gambling and Horse Racing………………………………….. 565
23.10.1 Clarification issued for Betting and Gambling ………………………….. 565
23.11 Exemptions……………………………………………………………………………………………… 566
23.12 Reverse Charge……………………………………………………………………………………….. 566
23.12.1 Lottery distributor or selling agent……………………………………………. 567
23.13 Mandatory Registration for supplier of online gaming services
from outside India (Section 14A of IGST Act, 2017)…………………………………. 567
23.13.1 Consequences of not obtaining mandatory registration
(Section 14A(3) of IGST Act)……………………………………………………… 567
24. Education and Sports 568
24.1 GST Rate …………………………………………………………………………………………………. 568
24.1.1 GST Rate on Catering in Educational Institution ………………………. 569
24.2 Exemptions……………………………………………………………………………………………… 569
24.2.1 Educational Institution (S. No. 69)…………………………………………….. 574
24.2.1.1 Pre-School ………………………………………………………………… 576
24.2.1.2 Higher Secondary School or equivalent……………………. 576
24.2.1.3 Forming part of curriculum ……………………………………… 577
24.2.1.4 Maritime Training Institutions …………………………………. 577
24.2.1.5 Judgments ………………………………………………………………… 577
24.2.2 Approved vocational courses……………………………………………………. 578
24.2.3 Recognised Sports Body……………………………………………………………. 578
24.3 Clarification as to Catering Services Provided by Educational
Institution ……………………………………………………………………………………………….. 578
24.3.1 Applicability of GST on Supply of Food in Anganwadis
and Schools……………………………………………………………………………….. 579

24.4 Clarification on accommodation services provided to students by a Trust ….. 579
24.5 Taxability of Programmes Run by IIMs…………………………………………………… 579
24.6 Applicability of GST on Services Provided by Central and State
Boards such as NBE ………………………………………………………………………………… 580
24.6.1 GST Exemption on Testing Services Provided by
Certain Institutes ………………………………………………………………………. 580

24.7 Applicability of GST on entrance fee or issue of eligibility
certificate or migration certificates by educational institutions ………………. 580
24.8 Exemption to grants received for R&D by Government Entity or
specified Institutions (w.e.f. 10.10.2024)…………………………………………………… 581
24.8.1 Regularisation of past cases on as is where is basis ………………….. 581
24.9 GST on Affiliation provided by Universities to Colleges…………………………. 581
24.10 GST on DGCA approved flying courses conducted by Flying
Training Organisations approved by DGCA…………………………………………… 581
24.11 Place of Supply ……………………………………………………………………………………….. 582
24.12 CBIC clarification on Education………………………………………………………………. 582
24.12.1 Composite and Mixed Supply insofar as Education is
concerned………………………………………………………………………………….. 582
24.13 Judgments……………………………………………………………………………………………….. 583
25. Financial Institutions, Insurance, Pension, Etc. 585
25.1 Services by Foreman of Chit Fund…………………………………………………………… 585
25.1.1 Meaning of not taking input tax credit on goods or services …….. 586
25.1.2 Chit…………………………………………………………………………………………… 586
25.2 Transfer of Right to Use Goods……………………………………………………………….. 587
25.2.1 Meaning of not taking input tax credit on goods or services …….. 588
25.2.2 Scheduled Air Transport Services for Leasing of
Aircraft [Para 15(iv)]…………………………………………………………………. 588
25.2.3 Scheduled Air Cargo Services for Leasing of
Aircraft [Para 15(iv)] …………………………………………………………………. 588
25.2.4 Aircraft……………………………………………………………………………………… 589
25.2.5 Meaning of taking input tax credit on goods or services …………. 589
25.2.6 Goods Carriage…………………………………………………………………………. 589
25.3 Lease of Goods………………………………………………………………………………………… 589
25.3.1 Meaning of not taking input tax credit on goods or services …….. 591
25.4 Exemptions……………………………………………………………………………………………… 591
25.4.1 Authorised Dealer of Foreign Exchange……………………………………. 600
25.4.2 Banking Company…………………………………………………………………….. 601
25.4.3 Business Facilitator or Business Correspondent………………………… 601
25.4.4 Insurance Business ……………………………………………………………………. 601
25.4.5 Interest ……………………………………………………………………………………… 602
25.4.6 Rural Area ………………………………………………………………………………… 602
25.5 Reverse Charge on Services …………………………………………………………………….. 602
25.5.1 Services Provided by Business Facilitator (BF) or
business Correspondent (BC)……………………………………………………. 603
25.6 Reverse Charge on Supply of Goods……………………………………………………….. 603

25.7 Valuation of Foreign Currency (Valuation Rules)……………………………………. 604
25.8 Valuation of Life Insurance Services (Valuation Rules) …………………………… 605
25.8.1 Whether Life Insurance Premium not includible in
taxable value is exempt?……………………………………………………………. 605

25.9 Place of Supply of Banking or other financial or stock broking
Services (Both supplier and recipient are located in India) …………………….. 606
25.10 Place of Supply of Insurance Services (Both supplier and recipient
are located in India) ………………………………………………………………………………… 606
25.11 Place of Supply of Service supplied by Banking Co./FI/NBFC
(When either supplier or recipient is located outside India)
Section 13(8)(a) of IGST Act…………………………………………………………………….. 606
25.12 Applicability of GST on Additional/Penal Interest on Late
Payment of EMIs…………………………………………………………………………………….. 607
25.12.1 Penal Charges levied by Banks / NBFC are not subjected to GST… 607
25.13 Taxability of no claim bonus by Insurance companies…………………………….. 608
25.14 GST applicability on the salvage/wreck value in an insurance claim……… 608
25.15 ITC Availability to insurance company on the repair work done
by garages……………………………………………………………………………………………….. 609
25.16 GST applicability on sharing of incentive by acquiring banks
with other stakeholders in RuPay Debit cards and low value BHIM-UPI………………610
25.17 Retrospective benefit of reinsurance services in certain cases …………………. 610
25.18 Schedule III Transactions………………………………………………………………………… 610
25.18.1 Schedule III-Co-insurance premium Apportionment by
Lead Insurer to Co-insurer………………………………………………………… 610
25.18.2 Schedule III- Ceding re-insurance premium after netting
of re-insurance commission by lead insurer to re-insurer …………. 611
25.18.2.1 ITC availability to insurance company on the
repair work done by garages ……………………………………. 611

25.18.3 Schedule III-Insurance Activities Regularised on as is
where is Basis……………………………………………………………………………. 612
25.19 Exemption to Payment Aggregators ……………………………………………………….. 613
25.20 Judgments……………………………………………………………………………………………….. 613
26. Tour Operator Services 614
26.1 Tour Operator…………………………………………………………………………………………. 614
26.2 GST Rate …………………………………………………………………………………………………. 615
26.2.1 Meaning of not taking input tax credit on goods or services …….. 616
26.2.2 SAC is determining factor to determine whether
supply falls under “same line of business” ………………………………. 616
26.3 Exemptions……………………………………………………………………………………………… 617
26.4 Valuation of Air Travel Agent Services (Valuation Rules) ………………………. 619
26.5 Judgments……………………………………………………………………………………………….. 619
27. Event, Brand Ambassador, Artist, etc., Services 620
27.1 GST Rate …………………………………………………………………………………………………. 620
27.1.1 Admission to Events, films, etc. Related……………………………………. 620
27.1.2 Clarification issued for Events, etc.15………………………………………… 624

27.1.3 Clarification on GST rate on admission to place
having casino, etc., and otherwise …………………………………………….. 625
27.2 Exemptions……………………………………………………………………………………………… 625
27.2.1 GST on payment of honorarium to guest anchors …………………….. 628
27.3 Place of Supply for Admission to Events (Both supplier and
recipient are located in India)—Section 12(6) of IGST Act……………………….. 628
27.3.1 Place of Supply of organisation of Events (Both supplier
and recipient are located in India)—Section 12(7) of IGST Act…. 628
27.3.1.1 Determination of Place of Supply in case of
Event, etc. in Multiple States
[Section 12(7) of IGST Act]………………………………………… 628
27.4 Place of Supply of organisation of or admission to Events (Either
supplier or recipient are located in India)—Section 13(5) of IGST Act …….. 629
27.4.1 Determination of Place of Supply in case of Event, etc. in
Multiple States (Section 13(7) of IGST Act) ……………………………….. 629
28. Restaurant, Hotel and Catering Services 630
28.1 Restaurant Services—Entry 6(b) of Schedule II of CGST Act…………………… 630
28.2 Composition Levy…………………………………………………………………………………… 631
28.3 Place of Supply—Section 12 of IGST Act…………………………………………………. 631
28.4 Place of Supply—Section 13 of IGST Act…………………………………………………. 631
28.4.1 Hotel Accommodation services to SEZ are always
inter-State………………………………………………………………………………….. 631
28.5 GST Rates for Restaurant Services…………………………………………………………… 632
28.5.1 Restaurant Related Services………………………………………………………. 632
28.5.1.1 GST Rate on catering in Indian railways…………………… 634
28.5.1.2 GST Rate on Supply of food and beverage in
Cinema Hall……………………………………………………………… 635
28.5.2 Accommodation Services in Hotels, etc…………………………………….. 635
28.5.2.1 Declared Tariff………………………………………………………….. 637
28.5.2.2 Clarification in respect of accommodation in
Hotels, etc…………………………………………………………………. 639
28.5.2.3 Clarification on accommodation services
provided by Air Force mess to its personnel…………….. 640
28.5.2.4 Provision of food and beverage in cinema hall…………. 640
28.5.3 GST Rates on Outdoor Catering ……………………………………………….. 641
28.5.4 GST Rates on Food etc, supplied by IRCTC in Trains or at
Platforms…………………………………………………………………………………… 643
28.5.5 Clarification on GST Rate on Takeaway Services and Door
Delivery Services ………………………………………………………………………. 644
28.5.6 Clarification on GST Rate on Ice Cream supply by Ice
Cream Parlours…………………………………………………………………………. 644
28.5.6.1 GST rate on supply of ice-cream by ice-cream
parlours ……………………………………………………………………. 644
28.6 Exemptions……………………………………………………………………………………………… 644
28.7 Reverse Charge on Electronic Commerce Operator for specified services …. 645

28.7.1 Clarifications in relation to Restaurant services tax
to be paid by E Commerce Judgments……………………………………… 646
29. Works Contract 649
29.1 Distinction between Contract for Works or Services and
Contract for Sales of Goods ……………………………………………………………………. 649
29.2 Works Contract—Section 2(119) of CGST Act …………………………………………. 650
29.2.1 Some Definitions ………………………………………………………………………. 651
29.3 Works Contract: Whether Goods or Service? Schedule II of CGST Act………….653
29.4 Input Credit—Section 17(5) of CGST Act………………………………………………… 653
29.5 Place of Supply of Works Contract Service—Section 12 of IGST Act……………………..654
29.6 Place of Supply of Works Contract Service—Section 13 of IGST Act……………………..654
29.7 GST Rate on Works Contract Services …………………………………………………….. 655
29.7.1 Meaning of not taking input tax credit on goods or services …….. 669
29.7.2 Value of Land and Total Amount……………………………………………… 669
29.7.3 Government Authority Para 4(ix)……………………………………………… 670
29.7.4 Government Entity Para 4(x)…………………………………………………….. 670
29.7.5 Applicable GST Rate on construction of Ropeway ……………………. 670
29.8 Exemption ……………………………………………………………………………………………… 670
29.8.1 Original Works …………………………………………………………………………. 671
29.9 Works Services by Contractor to Government and Time of Supply ………… 672
29.10 Valuation for Construction of Renewable Energy Projects………………………. 673
29.11 Judgments……………………………………………………………………………………………….. 674
30. Online Information Database Access or Retrieval Services 675
30.1 What is online information and database access or retrieval services? ………. 675
30.2 What will not constitute online information and database access …………… 676
and retrieval services? …………………………………………………………………………….. 676
30.3 Compulsory Registration—Section 24 of CGST Act………………………………… 676
30.4 Place of Supply of Services (Either Supplier or Recipient located
outside India)………………………………………………………………………………………….. 677
30.5 Place of Supply of Services (Both supplier and recipient located
in India)—Section 12 of IGST ………………………………………………………………….. 679
30.6 Exemptions……………………………………………………………………………………………… 679
30.7 Reverse Charge……………………………………………………………………………………….. 681
30.8 Service Tax Clarification………………………………………………………………………….. 681
30.9 Some Important Clarifications ………………………………………………………………… 681
30.9.1 Examples of what could be or could not be OIDAR services…………..681
30.9.2 Indicative List of OIDAR Services …………………………………………….. 682
30.9.2.1 Website supply, web-hosting, distance
maintenance of programmes and equipment:…………… 682
30.9.2.2 Supply of software and updating thereof: ………………… 682
30.9.2.3 Supply of images, text and information and
making available of databases: …………………………………. 682
30.9.2.4 Supply of music, films and games, including
games of chance and gambling games, and of
political, cultural, artistic, sporting …………………………… 682

30.9.2.5 Supply of Distance Teaching…………………………………….. 683
31 Electronic Commerce Operator and TCS 684
31.1 Electronic Commerce Operator……………………………………………………………….. 684
31.2 Liability of ECS to pay GST …………………………………………………………………….. 686
31.2.1 Clarifications in relation to Restaurant services tax to be
paid by E Commerce ………………………………………………………………… 689
31.3 E-Commerce Operators Not Required To Reverse ITC …………………………… 692
31.4 Tax Collected at Source (TCS)—Section 52 of CGST Act …………………………. 692
31.5 Registration Requirements – Section 24 of CGST Act………………………………. 695
31.6 Procedure to be followed by ECS allowing persons
(exempted from obtaining registration) supplying
goods through ECS …………………………………………………………………………………. 696
31.7 Procedure to be followed by ECS allowing persons under
Composition Scheme supplying goods through ECS……………………………… 696
31.8 Penal Provisions – Section 122(1B) ………………………………………………………….. 697
31.9 Judgements……………………………………………………………………………………………… 697
32. Supply of Second hand Goods and Vehicles 698
32.1 Supply of Old Goods by Individual is not Subject to GST……………………….. 698
32.2 Margin Scheme – Sale of Second Hand Goods—Rule 32(5)……………………… 698
32.3 Exemption from Reverse Charge on Purchase of Second Hand Goods …… 699
32.4 Exemption from Compensation Cess to dealers operating under
Margin Scheme ……………………………………………………………………………………….. 699
32.5 GST Rate on Supply of Second Hand Vehicles………………………………………… 700
32.6 Concessional Rate on Supply of Specific Second Hand Vehicles……………… 701
32.7 Reverse Charge……………………………………………………………………………………….. 702
32.7.1 Supply of Used, Confiscated, Waste and Scrap by
Government, etc. to Registered Person……………………………………… 702
32.8 Judgments……………………………………………………………………………………………….. 702
33. Registration 703
33.1 Registration—Section 22 of CGST Act …………………………………………………….. 703
33.1.1 Prescribed Documents for Obtaining/Amending
GST Registration……………………………………………………………………….. 709
33.1.1.1 Prescribed documents for Constitution of
Business……………………………………………………………………. 711
33.1.1.2 Prohibiting seeking documents on the basis
of presumptions ……………………………………………………….. 711
33.1.1.3 Processing of Registration Application …………………….. 711
33.1.1.4 Cases where officer may seek clarification/information/
documents:……………………………………………………………….. 711
33.1.1.5 Replies by the taxpayer…………………………………………….. 712
33.1.1.6 No irrelevant queries by the officer ………………………….. 712
33.1.1.7 Physical Verification of Premises ……………………………… 712
33.1.2 Grant of Registration Electronically ………………………………………….. 713
33.1.3 Simplified Registration for Tax Payment upto
Rs. 2.5 Lacs per month………………………………………………………………. 713

33.1.4 Credit Transfer on Obtaining Separate Registration for
Multiple Places of Business within State
(Rule 41A of CGST Rules w.e.f. 01.02.2019) ………………………………. 715
33.1.5 Mandatory Furnishing of Bank Account
(Rule 10A of CGST Rules)…………………………………………………………. 715
33.1.5.1 Bank account to be linked with PAN of the
registered person ……………………………………………………… 716

33.2 Person not Requiring Registration—Section 23 of CGST Act
From 01.10.2023 by Finance Act, 20238 with retrospective
effect from 01.07.2017………………………………………………………………………………. 716
33.2.1 Movement of Goods on Approval Basis……………………………………. 722
33.2.2 Clarification in respect of non-registration by small service
provider providing services through E-Commerce …………………… 722
33.3 Cases requiring Compulsory Registration—Section 24 of CGST Act ………. 722
33.3.1 Section 24 is a Mandatory Provision ………………………………………… 723
33.4 Special provisions relating to casual taxable and non-resident
taxable person — Section 27 of CGST Act……………………………………………….. 724
33.4.1 Special Provision as to Enrolment of Warehouse
Operator and Transporters (Rule 58) ………………………………………… 724
33.4.2 Special procedure for registration, etc. of transporter
godown for storing goods………………………………………………………… 725
33.4.3 Special Registration Procedure for Corporates undergoing
Resolution Procedure………………………………………………………………… 726
33.4.4 Mandatory Registration for supplier of online gaming
services from outside India (Section 14A of IGST Act, 2017)……… 727
33.4.4.1 Consequences of not obtaining mandatory
registration (Section 14A(3) of IGST Act)………………….. 727
33.4.5 Temporary Identification Number (Rule 16A) ………………………….. 727
33.5 AADHAAR Based Authentications For New and Existing
Registrations (Section 22 of CGST Act, 2017)…………………………………………… 728
33.5.1 Deemed Approval of Registration Application…………………………. 729
33.5.2 AADHAAR Validation For Registered Taxable Persons
(section 25(6A) of CGST Act, 2017)……………………………………………. 730
33.5.2.1 Mandatory AADHAAR authentication of
already registered persons in specified cases …………. 730
33.5.2.2 Exceptions to AADHAAR authentication of
already registered persons (w.e.f. 24.09.2021)…………… 731

33.5.3 Mandatory declaration of PAN and State of
Applicant (Rule 8(1) of CGST Rules)…………………………………………. 731
33.5.4 Separate registration for ISD (Rule 8(1) of CGST Rules)……………. 731
33.5.5 Physical Verification of Business Premises (Rule 25)…………………. 731
33.5.6 Physical verification at facilitation centre in case of certain
assessees (W.E.F. 01.02.2025 vide Notification
No. 09/2025-Central Tax, dated 01.02.2025 ………………………………. 732
33.6 Amendment to and Cancellation or Suspension and Revocation of
cancellation of registration — Sections 28, 29 & 30 of CGST Act……………… 733
33.6.1 Procedure for Extension of time for filing revocation
application………………………………………………………………………………… 737

33.6.2 Relaxation in Revocation of Cancelled Registrations ………………… 738
33.6.2.1 Who can file the revocation application
under Amnesty Scheme? ………………………………………….. 738
33.6.2.2 Further extensions by Commissioner for
revocation application relating to
Amnesty Scheme………………………………………………………. 739
33.6.2.3 Further relaxation for revocation of registration
application in specific cases………………………………………. 739
33.6.2.4 ITC availment by persons whose registration
cancellation has been revoked ………………………………….. 739
33.7 Forms under Registration (Registration Rules) ……………………………………….. 740
33.8 Process Flow Under Registration (Rules)………………………………………………… 742
33.8.1 Migration of Person Registered Under the Existing Law…………… 742
33.8.1.1 Surrender of Registration by Migrated Taxpayer……… 743
33.8.1.2 Special Procedure of Registration for Persons Who
Received only Provisional Identification Number
(PID) till 31.12.2017…………………………………………………… 743
33.8.2 Registration Procedure in General…………………………………………….. 743
33.8.2.1 Mandatory Furnishing of Bank Account
(Rule 10A of CGST Rules)…………………………………………. 745
33.8.2.2 Mandatory Verfication Through AADHAAR…………… 745
33.8.3 Casual Taxable Person………………………………………………………………. 746
33.8.4 Non-resident Taxable Person …………………………………………………… 747
33.8.4.1 Difference between Casual Taxable Person and
Non-resident Taxable Person………………………………….. 747
33.8.4.2 Validity Period of the Registration Certificate
Issued to a Casual Taxable Person and
Non-Resident Taxable person………………………………….. 748
33.8.5 Person Liable to Deduct Tax at Source………………………………………. 748
33.8.6 Person supplying Online Information & Data Base
Access or Retrieval service from a place outside India
to a non-taxable online recipient……………………………………………….. 749
33.8.6.1 Person supplying online money gaming from
a place outside India to a person in India …………………. 749
33.8.7 Suo Moto Registration by Proper Officer ………………………………….. 749
33.8.8 Unique Identification Number to Certain Special Entities…………. 749
33.8.9 Amendment to Registration ……………………………………………………… 750
33.8.9.1 Effective Date of Amendment to
Registration (Rule 19)……………………………………………….. 751

33.8.10 Cancellation of Registration (On Application Made by
Registered Person)…………………………………………………………………….. 751
33.8.11 Cancellation of Registration by Proper Officer Suo Moto …………… 752
33.8.12 Revocation of Cancellation of Registration ……………………………….. 753
33.8.13 Goods & Services Tax Practitioner ……………………………………………. 754
33.8.13.1 Flow Chart Depicting Enrolment of
GST Practitioner……………………………………………………….. 756
33.8.14 Miscellaneous …………………………………………………………………………… 757

33.9 Modes of Authentication (Rule 26)………………………………………………………….. 757
34. Payment of Tax, Interest, TDS & TCS 760
34.1 Payment of Tax, Interest, etc. —Section 49 of CGST Act………………………….. 760
34.1.1 Utilisation of input credit………………………………………………………….. 762
34.1.2 Inter-head Transfer of Tax, Interest, Penalty, Fee or any other
Amount in Cash ledger [Rule 67 (13) of CGST Rules]……………….. 762
34.1.3 Restriction on ITC Utilisation on specified Taxpayers for
Tax Payment (Rule 86B) ……………………………………………………………. 763
34.2 Interest —Section 50………………………………………………………………………………… 763
34.2.1 Interest Payable only on utilization of wrongly
availed ITC Section 50(3)…………………………………………………………… 764
34.2.2 Lower Interest in COVID 19(I) Conditions………………………………… 765
34.2.2.1 Lower Interest in COVID 19 (II) Conditions……………… 768
34.2.3 Non-payment of Interest on Liability Arising Due to
Late Filing of Returns (Section 50)…………………………………………….. 770
34.2.4 Interest Applicable Only on Net Cash Liability ………………………… 770
34.2.4.1 Interest Applicable on Net Cash Liability
Retrospectively from 01.07.2017 ……………………………….. 770
34.2.4.2 No interest on amount lying in Electronic
Cash Ledger (Valid from 10.07.2024)………………………… 770

34.2.5 Prescribing procedure for calculation of interest
under Section 50 ……………………………………………………………………….. 771
34.2.5.1 Calculation of interest on wrong availment
and reversal of IGST…………………………………………………. 771
34.3 Interest Related Amnesty Scheme …………………………………………………………… 772
34.3.1 Waiver of Interest and Penalty Pertaining to 01.07.2017
till 31.03.2020 (Section 128A) …………………………………………………….. 772
34.4 Tax Deduction at Source (TDS)—Section 51 of CGST Act……………………….. 776
34.4.1 CGST Exemption on Supplies to TDS Deductor in
Specified Circumstances……………………………………………………………. 777
34.4.2 Date from which the TDS Provisions are Effective? ………………….. 778
34.4.3 Exemption From TDS provisions………………………………………………. 778
34.4.4 TDS on Scrap (w.e.f. 10. 10.2024)……………………………………………….. 779
34.4.5 Judgments…………………………………………………………………………………. 780
34.5 Tax Collected at Source (TCS)—Section 52 of CGST Act …………………………. 780
34.5.1 Date from which TCS Provisions are Effective? ………………………… 782
34.5.2 Clarification on TCS Collection by Tea Board……………………………. 782
34.5.3 Clarification on TCS in case of more than one Electronic
Commerce Operators (ECOs) in a transaction…………………………… 782
34.5.4 GST Flier…………………………………………………………………………………… 784
34.6 Tax Payment Procedures (Payment of Tax Rules 26) ………………………………. 785
34.6.1 Electronic Tax Liability Register ……………………………………………….. 785
34.6.1.1 CBIC Flyer on Electronic Liability Register………………. 786
34.6.2 Electronic Credit Ledger …………………………………………………………… 787
34.6.2.1 CBIC Flyer on Credit Ledger ……………………………………. 787
34.6.3 Electronic cash Ledger………………………………………………………………. 788

34.6.3.1 CBIC Flyer on Cash Ledger………………………………………. 789
34.6.3.2 Transfer of balance in Electronic Cash
Ledger between GSTINs under same PAN ………………. 790
34.7 Utilisation of amount in cash ledger and credit ledger……………………………. 790
34.8 Form Index for Payment of Tax ………………………………………………………………. 791
35. Tax Invoice, Credit Notes & Debit Notes 792
35.1 Issue of Tax invoice—Section 31 of CGST Act…………………………………………. 792
35.1.1 Types of Invoices………………………………………………………………………. 792
35.1.2 Timelines for issuance of Invoices …………………………………………….. 793
35.1.3 Tax Invoice—General Requirement ………………………………………….. 795
35.1.4 Revised Invoice…………………………………………………………………………. 797
35.1.5 Bill of Supply and Bill of Supply-Cum-Invoice …………………………. 798
35.1.6 Receipt Voucher………………………………………………………………………… 799
35.1.7 Refund Voucher………………………………………………………………………… 799
35.1.8 Payment Voucher (Reverse Charge) …………………………………………. 800
35.1.9 Input Service Distributor…………………………………………………………… 800
35.1.9.1 Invoice to be issued by Taxpayer to its ISD………………. 801
35.1.10 Banks/NBFC/Insurance …………………………………………………………… 802
35.1.11 Goods Transport and Passenger Transport……………………………….. 802
35.1.12 Completely/Semi Knocked Down or in Batches or Lots …………… 802
35.1.13 Specific Cases for Transportation of Goods without issue
of Invoice ………………………………………………………………………………….. 802
35.1.14 Movement of Goods on Approval Basis……………………………………. 803
35.1.15 Creation of Challan in Job Work……………………………………………….. 803
35.1.16 Mandatory Recording of State of Unregistered Recipient
in case of Online Services to Unregistered Service Recipients …… 804
35.2 E-Invoice …………………………………………………………………………………………………. 804
35.2.1 What is E-invoice………………………………………………………………………. 804
35.2.2 Format of E-Invoice…………………………………………………………………… 805
35.2.3 Objective of introduction of E-Invoices……………………………………… 805
35.2.4 Interfaces in Generation of E-Invoice ………………………………………… 805
35.2.5 Portals for Generation of E-Invoice (IRN) …………………………………. 805
35.2.6 Documents for Which E Invoice has to be generated ………………… 805
35.2.6.1 Obligation of Suppliers …………………………………………….. 805
35.2.7 Format of IRN …………………………………………………………………………… 805
35.2.8 Mandatory Fields in an E-Invoice……………………………………………… 806
35.2.9 Whether QR Code is mandatory to be included in E-invoice? ……… 806
35.2.10 Notified persons to issue E-Invoice…………………………………………….. 806
35.2.11 E-Invoice Not Applicable For Following Persons………………………. 807
35.2.11.1 Declaration on Tax- Invoice in specified cases ………….. 807
35.2.11.2 Whether exemption from E-invoice is service specific?…………807
35.2.12 E-invoice not to be issued in Duplicate or Triplicate …………………. 808
35.2.13 E-invoice not to be issued for below supplies……………………………. 808
35.2.14 Clarification on E-invoice for invoices to be issued to
Government Department etc., registered due to TDS
deduction only………………………………………………………………………….. 808

35.3 Mandatory mention of Dynamic QR Code on Specified B2C
Tax Invoices…………………………………………………………………………………………….. 808
35.3.1 Clarifications Issued For Dynamic Quick Response Code…………. 808
35.3.2 Dynamic Quick Response (QR) Code for supplies
not qualifying as exports ………………………………………………………….. 811
35.4 Consolidated Invoice or No Invoice………………………………………………………… 811
35.5 Bar on Unauthorised Collection of Tax—Section 32 of CGST Act……………. 812
35.6 Credit Note & Debit Note—Section 32 of CGST Act ……………………………….. 812
35.6.1 Credit Notes (Section 34)…………………………………………………………… 813
35.6.1.2 Reducing Output Liability by Suppliers on
Issue of Credit Notes ………………………………………………… 813

35.7 Documents to accompany during Transportation of
Goods (Rule 55A) ……………………………………………………………………………………. 814
35.8 Procedure for Return of Material…………………………………………………………….. 814
35.9 CBIC Flyer on Tax Invoice ………………………………………………………………………. 815
35.9.1 Importance of tax invoice under GST ……………………………………….. 815
35.9.2 Revised Invoice…………………………………………………………………………. 816
35.9.3 Issue of invoice in case, where supply of service
ceases under a contract before completion of supply………………… 816
35.9.4 Sale on approval basis ………………………………………………………………. 816
35.9.5 Amount of tax to be indicated in invoice…………………………………… 816
35.10 Some important Clarifications…………………………………………………………………. 816
36. Returns
EASING OUT OF COMPLIANCE BURDEN : 27th GST COUNCIL MEETING 818
36.1 New Return Filing System………………………………………………………………………. 818
36.2 Furnishing of Returns……………………………………………………………………………… 818
36.3 Contents of Form GSTR-1 Return (Rule 59) …………………………………………….. 820
36.3.1 Restriction on Filing of Form GSTR-1 (Rule 59) ………………………… 820
36.3.2 Rectification of omissions or errors in Form GSTR-1
(Section 37 of CGST Act, 2017) ………………………………………………….. 821
36.3.3 Outer Limit for Filing Form GSTR-1 …………………………………………. 821
36.3.3.1 Return in Form GSTR-1A for amending Form
GSTR-1 (applicable from 10.07.2024)………………………… 821
36.3.3.2 Lowering threshold for reporting B2C Large in
GSTR-1 (applicable from 10.07.2024)………………………… 822
36.4 Contents of Invoice Furnishing Facility (IFF) (Rule 59)……………………………. 822
36.5 Inward Supplies Details : Section 38 and Rule 60 …………………………………… 822
36.5.1 Difference between Form GSTR-2A and Form GSTR-2B…………… 823
36.5.2 Form GSTR-2A and Form GSTR-3B mismatch for FY 2017-18
and 2018-19………………………………………………………………………………………………….824
36.5.3 Clarification on dealing with differences in ITC as
mentioned in Form GSTR-3B and that in Form GSTR-2A …………. 825

36.6 Quarterly Return Monthly Payment Scheme – Proviso to Section
39(1) and Rules 59, 60 and 61…………………………………………………………………… 826
36.6.1 Eligibility for the Scheme ………………………………………………………….. 826
36.6.2 QRMP Scheme is GSTIN wise…………………………………………………… 827

36.6.3 How to opt for OR opt out of the Scheme …………………………………. 827
36.6.3.1 Default For First Quarter of QRMP…………………………… 827
36.6.3.2 Opting for QRMP……………………………………………………… 827
36.6.3.3 Opting out of QRMP ………………………………………………… 827
36.6.4 Filing of outward Supplies Return by QRMP……………………………. 827
36.6.4.1 Invoice Furnishing Facility (IFF) ………………………………. 828
36.6.5 Monthly Tax Payment by QRMP………………………………………………. 828
36.6.5.1 Fixed Sum Method …………………………………………………… 829
36.6.5.1.1 Interest liability under Fixed Sum Method…. 829
36.6.5.1.2 Late Fee for delay in payment of deposit… 829
36.6.5.2 Self-Assessment Method…………………………………………… 829
36.6.5.2.1 Interest liability under Self-assessment
Method……………………………………………………. 829
36.6.5.2.2 Late Fee for delay in payment of deposit……830
36.6.6 Quarterly Form GSTR-3B by QRMP …………………………………………. 830
36.7 NIL Form GSTR-3B Filing Through SMS ………………………………………………… 830
36.8 Specifying return in Form GSTR-3B as return to be filed under Section 39…..830
36.8.1 How to take care of differences between Form
GSTR-3B and Form GSTR-1? …………………………………………………….. 831
36.8.2 System based reconciliation between Form GSTR-3B and
GSTR-1/ GSTR-2 ………………………………………………………………………. 832
36.8.3 Mismatches in Forms GSTR-3B and GSTR-1 and
consequential tax payments………………………………………………………. 833
36.8.3.1 Intimation of difference of liability in Forms
GSTR-1 and GSTR-3B (Rule 88C)……………………………… 833

36.8.4 Rectification of any omission or Error in Form
GSTR-3B: Section 39(9) …………………………………………………………….. 834
36.8.5 Restriction in filing of Form GSTR-3B……………………………………….. 834
36.8.6 Outer Limit for Filing GSTR-3B ………………………………………………… 834
36.8.7 Amendment to Return in Form GSTR-3B………………………………….. 835
36.8.7.1 Clarifications in relation to amended Form GSTR-3B.. 835
36.8.8 Reclaim Ledger for Section 16(4)……………………………………………….. 836
36.9 First Return—Section 40………………………………………………………………………….. 837
36.10 Annual Return—Section 44 …………………………………………………………………….. 837
36.10.1 Annual Return from 01.08.2021 by Finance Act, 2021 ……………….. 838
36.10.2 Optional Annual return (GSTR-9) and Reconciliation
Statement (Form GSTR-9C) For Eligible Persons ………………………. 839
36.10.3 Non-Filing of Form GSTR-9C by Foreign
Airline Companies ……………………………………………………………………. 839
36.10.4 Abolition of CA Certification of Form GSTR-9C by
Finance Act, 2021………………………………………………………………………. 839
36.10.5 Outer Limit for Filing Form GSTR-9 …………………………………………. 839
36.11 Final Return—Section 45…………………………………………………………………………. 840
36.12 Fee for Late Filing—Section 47………………………………………………………………… 840
36.12.1 Reduced Late Filing Fee (w.e.f. 01.06.2021)……………………………….. 840
36.12.1.1 Reduced fines for late filings (Till 31.05.2021) …………… 842

CONTENTS xlv
36.12.2 General Amnesty For Late Filing of Returns For Past Periods…… 842
36.12.2.1 Late filing of Form GSTR-4 return for past periods…… 842
36.12.2.2 Reduced Late Filing Fee for Annual Return for
Past periods and from FY 2022-23…………………………….. 843
36.12.2.3 Reduced Late Filing Fee for Final Return in
Form GSTR-10 ………………………………………………………….. 843
36.13 Return Rules (List of Forms) …………………………………………………………………. 843
36.14 Online Information and Database Access or Retrieval Services (OIDAR) .. 844
36.15 Form and Manner of Submission of Return by Non-resident
Taxable Person (Monthly Returns)………………………………………………………….. 844
36.16 Form and Manner of Submission of Return by ISD (Monthly)………………… 844
36.17 Form and Manner of Submission of Return by a Person Required
to Deduct Tax at Source (Monthly)………………………………………………………….. 845
36.18 Other Returns………………………………………………………………………………………….. 845
36.18.1 Rectification of any omission or Error in Form
GSTR-8: Section 52(6) ……………………………………………………………….. 845
36.18.2 Outer Limit for Filing Form GSTR-8 …………………………………………. 845
36.18.3 Time limit for filing Form GSTR-04 (Valid from 10.07.2024)……… 846
36.19 Person Having Unique Identification Number………………………………………… 846
36.19.1 Returns to be filed by UN Entities …………………………………………….. 846
36.20 Returns to be filed by OIDAR and Online Money Gaming Suppliers located
Outside India to persons in India (Rule 64)……………………………………………… 846
36.21 Judgments……………………………………………………………………………………………….. 846
37. Import, Export and Supplies To Sez 848
37.1 Export and Import of Goods and Services ………………………………………………. 848
37.1.1 Export of Services Through a Third Party…………………………………. 851
37.1.2 Difference Between Exempted Supplies and Zero
Rated Supplies ………………………………………………………………………….. 851
37.1.3 Supply of Goods by Duty Free Shops ……………………………………….. 852
37.1.4 Taxability of short-term accommodation services to SEZ
developer or unit………………………………………………………………………. 852
37.1.5 Export condition of “Establishments of a Distinct Person” ……….. 853
37.2 Duties on Import of Goods and Services …………………………………………………. 854
37.3 Import of Goods ……………………………………………………………………………………… 854
37.3.1 Duty Calculation ………………………………………………………………………. 854
37.3.2 Change in the Import Procedures……………………………………………… 855
37.3.2.1 Import Export Code (IEC) ………………………………………… 855
37.3.2.2 Bill of Entry Regulations and Format ……………………….. 855
37.3.2.3 Import under Export Promotion Schemes and
Duty Payment through EXIM Scrips ………………………. 856
37.3.2.4 IGST on Import of Goods by EOUs and SEZ…………….. 856
37.3.2.5 IGST on Import of Services by SEZ…………………………… 856
37.3.2.6 Project Imports …………………………………………………………. 856
37.3.2.7 Baggage ……………………………………………………………………. 856
37.3.2.8 Input Tax Credit……………………………………………………….. 856

37.3.3 Supply on High Seas basis and Sale of Warehoused Goods,
before Clearance, are not Supply (Schedule III to CGST Act)………. 857
37.4 Export of Goods or Services…………………………………………………………………….. 857
37.4.1 Drawback………………………………………………………………………………….. 857
37.4.2 Refund under GST ……………………………………………………………………. 857
37.4.2.1 Option 1: Refund on Exports Under Bond or
Letter of Undertaking (LUT) (Refund Rules) ………….. 859
37.4.2.1.1 Online Filing of LUT for FY 2018-19
and onwards …………………………………………… 862
37.4.2.1.2 Requirement of filing of LUT/Bond in
case of export of exempted supplies ……….. 863
37.4.2.1.3 Availability of refund of IGST paid on
non-receipt of consideration in time for
exports ……………………………………………………. 863

37.4.2.2 Option 2: Refund of IGST Paid on Export of
Goods (Refund Rules)………………………………………………. 864
37.4.2.2.1 Refund of IGST paid on upward
revision of prices post export of goods ….. 865
37.4.2.2.2 Persons or goods which can export/
supply to SEZ on payment of IGST and
seek refund of IGST so paid
(Section 16 of IGST Act) ………………………….. 868
37.5 Export of Services……………………………………………………………………………………. 869
37.5.1 Clarifications on Exports to Nepal and Bhutan…………………………. 870
37.6 Supplies to SEZ Unit or Developer………………………………………………………….. 870
37.6.1 Exemption on Import of Services by SEZ Unit or Developer…….. 870
37.6.2 Exemption on Import of Goods by SEZ Unit or Developer……….. 870
37.6.3 Persons or goods which can export/supply to SEZ on
payment of IGST and seek refund of IGST so paid
(Section 16 of IGST Act)…………………………………………………………….. 871
37.7 Concessional Rate to Trader Exporters for Procurement of Goods………….. 871
37.8 CBIC Clarification on Certain Import Transactions…………………………………. 873
37.8.1 Import as Baggage…………………………………………………………………….. 873
37.8.2 Import of Goods by 100% EOU’s and SEZs ………………………………. 873
37.8.3 Input tax Credit of Integrated Tax…………………………………………….. 874
37.8.4 Import of Services……………………………………………………………………… 874
38. Refunds 876
38.1 Kinds of Refunds and General Points—Section 54 of CGST Act ……………… 876
38.1.1 Relevant Date …………………………………………………………………………. 877
38.1.1.1 Extension of Time Limit for Filing Refund Claim……… 878
38.1.2 Kinds of Refund Claims that can be Filed by Form RFD-01………. 878
38.1.3 Jurisdiction for Filing the Refund Claim……………………………………. 879
38.1.4 Steps in Refund Claim Processing …………………………………………….. 879
38.1.4.1 Facility of Withdrawal of Refund Claim…………………… 879
38.1.5 Pre-requisites, Periodicity and Procedure of Filing the
Refund Claims ………………………………………………………………………….. 880

38.1.5.1 Mandatory AADHAAR authentication of
already registered persons seeking refunds …………….881
38.1.6 Drawbacks and Refund Claims…………………………………………………. 882
38.1.7 Special Dispensation of Zero-Rated Supplies of
Services with Payment of GST ………………………………………………….. 882
38.1.8 Whether realization proof is required for refund
of export of goods?……………………………………………………………………. 882
38.1.9 Refund Filing Process where inadvertently NIL
Refund has Already Been Filed…………………………………………………. 883
38.1.10 Refund claim by ISD and Non-Resident Taxable Person…………… 883
38.1.10.1 Time of claiming refund by Non-Resident
Taxable Person (Rule 89)…………………………………………… 883

38.1.11 Refund of Compensation Cess when final
product is not leviable to Cess………………………………………………….. 884
38.2 Refund of Unutilised Input Tax Credit—Section 54(3) of CGST Act ……….. 884
38.2.1 Supplies of Services on which Refund is not Allowed………………. 885
38.2.2 Eligibility of Refund of accumulated ITC in case of
Export Goods attracting Nil rate of Export Duty ………………………. 885
38.3 Inverted Duty Refunds……………………………………………………………………………. 885
38.3.1 Supplies of Goods on which Refund is not Allowed
(Inverted Duty)…………………………………………………………………………. 885
38.3.2 How to reverse the input credit for intervening period? …………… 888
38.3.3 Filing of refund claim by persons who have not reversed the lapsed
credit till prescribed date ………………………………………………………….. 888
38.3.4 Refund of input credit allowed on export of specified items …….. 889
38.3.5 Restriction on granting refund of CESS due to inverted
duty structure …………………………………………………………………………… 889
38.3.6 Clarifications Relating to Refund Arising on Account of
Inverted Duty……………………………………………………………………………. 889
38.3.7 Calculation of Refund Amount For Inverted Duty
Structure Illustration…………………………………………………………………. 890
38.3.8 Reduction of GST Rate on a goods will not result in
Refund on Account of Inverted Duty Structure ………………………… 891
38.3.8.1 Inverted Tax Refund owing to concessional
lower rate …………………………………………………………………. 891
38.3.9 Provisional Refund in case of Inverted Tax Structure ……………….. 891
38.4 Deemed Exports ……………………………………………………………………………………… 891
38.4.1 Refund of Deemed Exports……………………………………………………….. 893
38.4.2 Procedure to be followed by Recipient of Deemed
Export Supplies…………………………………………………………………………. 893
38.4.3 Debit entry to be passed in case of Refund filed by
recipients of Deemed Exports…………………………………………………… 894

38.5 Time of Filing the Refund Claim in Specific Instances—Section
54(3) of CGST Act……………………………………………………………………………………. 895
38.6 Refund Restrictions in Some Cases …………………………………………………………. 895
38.6.1 Allowability of Refund Pursuant to Deemed Exports
Supplies and Supplies at Reduced Rate for Trader
Exporter [Rule 89(4A) and (4B) of CGST Rules]………………………… 895

38.6.2 Allowability of Refund of IGST Paid on Export of Supplies
Pursuant to Deemed Exports Supplies and Supplies at
Reduced Rate for Trader Exporter [Rule 96(10) of CGST Rules]………..897
38.6.3 Refund Restrictions on export of supplies procured at
concessional GST rate or exempt ………………………………………………. 899
38.6.4 Restriction on refund of Input Tax in case of Construction
of Complex ……………………………………………………………………………….. 900
38.6.5 Regulated refunds on specified goods or to specified
persons (Section 16(4 ) IGST Act)………………………………………………. 900
38.6.6 No Refund on Zero Rated Supplies of Goods Subjected to
Export Duty (Section 16(5) of IGST Act)……………………………………. 900
38.7 Refund of unutilised Credit of concessional rate of 0.05%/0.1%……………… 901
38.8 Other Clarification…………………………………………………………………………………… 901
38.8.1 One to One Correlation not Required……………………………………….. 901
38.8.2 Input Invoice dated For Previous Period is Valid For
Claiming Refund of Subsequent Relevant Period……………………… 901
38.8.3 ITC Availed and Reversed………………………………………………………… 902
38.8.4 Clarifications on Refund of Compensation Cess ……………………….. 902
38.9 Disbursal of Entire Refund Claim Amounts [Section 54(8A) of
CGST Act] by Jurisdictional Authority……………………………………………………. 903
38.10 Amount of Refund Claim of ITC in Relation to Zero Rated Supply ………… 903
38.10.1 Capping Value of Export Goods for Refund Purposes………………. 906
38.10.2 NET ITC restricted up to the input invoices reflecting in
Form GSTR-2B ………………………………………………………………………….. 906
38.10.2.1 Incorporation of HSN codes against the input
supplies while providing NET ITC Details in
Annexure B ………………………………………………………………. 907
38.10.3 Adjusted Total Turnover…………………………………………………………… 907
38.10.3.1 Calculation of adjusted total turnover for
export of goods…………………………………………………………. 908
38.10.4 Calculation of Refund Amount…………………………………………………. 908
38.10.5 Bifurcation of Refund Claim amount of Respective
Taxes for Both Zero Rated and inverted Duty Refund………………. 908
38.10.6 Availability of refund of IGST paid on non-receipt of
consideration in time for exports (Rule 96A)…………………………….. 909
38.10.6.1 Availability of refund of unutilised ITC……………………. 909
38.10.6.2 Availability of refund of IGST paid pursuant to
non-receipt of consideration or non-export of
goods within time allowed……………………………………….. 910
38.11 Endorsement for SEZ Supplies………………………………………………………………… 910
38.12 Documents to be filed……………………………………………………………………………… 913
38.12.1 Refund to Supplier of IGST paid on Supplies to
SEZ Unit or Developer ……………………………………………………………… 922
38.13 Acknowledgement and Refund order……………………………………………………… 922
38.14 Provisional Refund………………………………………………………………………………….. 922
38.14.1 Mandatory grant of provisional refund…………………………………….. 923
38.14.2 Disallowance of refund on provisional basis …………………………….. 924

38.15 Deficiency Memo…………………………………………………………………………………….. 924
38.16 Recredit in Credit Ledgers ………………………………………………………………………. 925
38.16.1 Recredit in case of Type 1 Rejections…………………………………………. 925
38.16.2 Recredit in case of Type 2 Rejections…………………………………………. 926
38.16.3 Procedure for recredit pursuant to excess or erroneous
refund sanctioned……………………………………………………………………… 926
38.17 Bank Account and Disbursal of Refund Claim………………………………………… 927
38.17.1 Payment of refund in credit………………………………………………………. 927
38.17.2 Refund Payment in cash and credit in certain cases ………………….. 928
38.17.3 38.17.3 Refund credit in the bank account linked with
PAN of the refund claimant………………………………………………………. 928
38.18 Unjust Enrichment—Sections 54(8), 57 and 58 ………………………………………… 928
38.18.1 Consumer Welfare Fund…………………………………………………………… 930
38.19 Withholding Refund or Adjustment of Refund—Section 54(10) ……………… 932
38.19.1 Adjustment of Refund (Rule 92) ……………………………………………….. 933
38.19.2 Withholding and Release of Withheld Refund Claim ……………….. 933
38.19.3 Automatic intimation/transfer of withheld refund
cases of IGST paid on export of goods …………………………………….. 933
38.20 Interest on Delayed Refunds—Section 56………………………………………………… 934
38.21 Refunds filed by UNO, etc. and Canteen Store Department
(CSD)—Section 55 ………………………………………………………………………………….. 935
38.21.1 Conditions for allowing the refunds to UNO ……………………………. 935
38.21.1.1 Refund Claim Processing for application by
UN Entities……………………………………………………………….. 937

38.21.2 Exemption and Refund to Canteen Store
Departments (CSD) (Section 55 of CGST Act) …………………………… 939
38.21.2.1 Refund of Canteen Stores Department …………………….. 940
38.21.2.1.1 Automated Refunds to CSDs ………………….. 940
38.22 Refund Under ‘Seva Bhoj Yojna’ of the Ministry of Culture ……………………. 942
38.23 Refund of Tax Paid on Inward supplies by Duty Free Shops,
Etc. at International Airport for Goods Supplied to Outgoing
International Tourist without Payment of Tax ………………………………………… 943
38.23.1 Procedure for Filing such a Refund…………………………………………… 943
38.24 Refund of TDS/TCS Deposited in Excess………………………………………………… 945
38.25 Refund claim Pursuant to Order by Appellate Authority ……………………….. 945
38.26 Refund Filing of incorrect payment of Tax (w.e.f. 24.09.2021) …………………. 946
38.27 Refund of Excess Balance in Cash ledger ………………………………………………… 946
38.28 Special procedure prescribed for seeking refund of ITC on export
of electricity…………………………………………………………………………………………….. 947
38.28.1 Procedure for refund of unutilised ITC on account of
export of electricity……………………………………………………………………. 947
38.29 Recredit in case of wrongly sanctioned refund ……………………………………….. 949
38.30 Instructions for Scrutiny of Refund Claims……………………………………………… 949
38.30.1 Uploading of detailed order along with Form RFD-06 ……………… 949
38.30.2 Contents of refund order for all refund claims………………………….. 949

38.30.3 Contents of refund order pertaining to refund of accumulated
ITC on zero rated supplies or inverted tax supplies and
refund of IGST paid on export of zero rated supplies ……………….. 950
38.30.3.1 Details for refund of accumulated credit for zero
rated supplies and inverted rated structure ……………… 950
38.30.3.2 Additional details for refund of accumulated
credit on account of zero-rated supplies …………………… 950
38.30.3.3 Additional details for refund of accumulated
credit for inverted rated structure…………………………….. 951
38.30.3.4 Additional details for refund relating to
IGST paid on zero rated supplies …………………………….. 951
38.30.3.5 Additional details for refund relating to zero rated
supplies to SEZ…………………………………………………………. 951

38.30.4 Contents of refund order pertaining to refund of
accumulated ITC on zero rated supplies or inverted
tax supplies and refund of IGST paid on export of zero
rated supplies……………………………………………………………………………. 951
38.30.5 Contents of refund order pertaining to refund of excess
balance in cash ledger……………………………………………………………….. 951
38.30.6 Contents of refund order pertaining to refund under
“Any Other” category……………………………………………………………….. 952
38.30.7 Post audit………………………………………………………………………………….. 952
38.30.8 Review of Refund orders by Commissioner……………………………… 952
38.31 Exclusion of COVID-19 related period from adjudication and
refund filing ……………………………………………………………………………………………. 952
38.32 Filing of refund by unregistered persons ………………………………………………… 953
38.33 Refund of IGST paid on upward revision of prices post export of goods .. 954
38.34 Refund Forms under Refund Rules…………………………………………………………. 957
38.35 Judgments……………………………………………………………………………………………….. 957
39. Accounts, Audit and Inspection 965
39.1 Account and Records—Section 35 of CGST Act………………………………………. 965
39.1.1 Records Maintenance by Registered Person (Rules)………………….. 966
39.1.2 Records Maintenance by Agent (Rules)…………………………………….. 967
39.1.2.1 Records Maintenance by Auctioneer………………………… 967
39.1.3 Records Maintenance by Manufacturer (Rules) ………………………… 968
39.1.4 Records Maintenance by Service Providers (Rules)…………………… 968
39.1.5 Records Maintenance by Works Contractor (Rules)………………….. 968
39.1.6 Requirement as to Electronic Records (Rules) …………………………… 968
39.1.7 Requirement as to Warehouse Operator and Transporters (Rules)………..969
39.2 Access to Business Premises—Section 71 of CGST Act……………………………. 969
39.3 Audit—Section 65 of CGST Act ………………………………………………………………. 970
39.3.1 Audits under Service Tax………………………………………………………….. 970
39.3.2 Definition of Audit Under CGST Act………………………………………… 971
39.3.3 Types of Audits—Sections 65 & 66 of CGST Act……………………….. 972
39.3.4 GST Audit Manual……………………………………………………………………. 973
39.3.4.1 Selection of Assessees for Audit……………………………….. 973

39.3.4.2 Apprising the registered person of irregularities
noticed and ascertaining his view point……………………. 974
39.3.4.3 Preparation of Draft Audit Report and
submission to senior officers…………………………………….. 974
39.3.4.4 Final Audit Report……………………………………………………. 974
39.3.4.5 Follow up action and issue of show cause notice …….. 974
39.4 Special Audit…………………………………………………………………………………………… 974
39.5 Issues arising out of Audits …………………………………………………………………….. 975
39.6 Audit Forms (Rules)………………………………………………………………………………… 975
39.7 Inspection, Search and Seizure—Section 67 of CGST Act………………………… 975
39.7.1 Process Flow of inspection, search or seizure ……………………………. 977
39.7.2 Amount of Bond and Security for Release of
Goods (Inspection, Search and Seizure Rules)…………………………… 978
39.7.3 Procedure in Respect of Seized Hazardous or Perishable
Goods (Inspection, Search and Seizure Rules)…………………………… 980
39.7.4 Specification of Goods that can be disposed off as soon as
possible after seizure…………………………………………………………………. 980
39.7.5 Procedure for Search Under Section 67……………………………………… 980
39.7.5.1 Pre-requisite for a valid search …………………………………. 980
39.7.5.2 Procedure to be followed during a search …………………… 980
39.7.5.3 Rights of person searched…………………………………………. 981
39.8 Power to Arrest—Section 69……………………………………………………………………. 982
39.9 Important Clarifications on Search, Seizure and Inspection…………………….. 982
39.10 Guidelines to be followed During Investigation ……………………………………… 991
39.11 Forms Under Accounts, Audit and Inspection………………………………………… 993
40. Assignment of Functions to Various Officers 994
40.1 Functions Under GST as per Departmental Hierarchy ……………………………. 994
40.2 Monetary Limits to Issue SCNs……………………………………………………………….. 994
40.3 Issuance of SCNs by Audit Teams or DGST Intelligence…………………………. 994
40.4 Rank wise Section wise Distribution of Work …………………………………………. 995
40.5 Adjudication of SCNs issued by DGGSTI……………………………………………….. 998
40.6 Judgments……………………………………………………………………………………………….. 999
41. Assessments 1000
41.1 Provisional Assessment—Section 60 of CGST Act…………………………………. 1001
41.1.1 CBIC Flyer on Provisional Assessment……………………………………. 1001
41.1.1.1 Procedure ……………………………………………………………….. 1001
41.1.1.2 Finalization of provisional assessment……………………. 1002
41.1.1.3 Interest Liability……………………………………………………… 1002
41.1.1.4 Release of Security Consequent to Finalization ………. 1003
41.2 Scrutiny of Returns—Section 61 of CGST Act………………………………………… 1003
41.2.1 Procedure for Scrutiny of Return ………………………………………………… 1003
41.2.2 Specified items to be scrutinised by POs …………………………………. 1004
41.2.2.1 Outward Tax Liability Related ……………………………….. 1004
41.2.2.2 Input Tax Credit Related ………………………………………… 1004
41.2.2.3 General …………………………………………………………………… 1005

41.3 Assessment of Unregistered Persons—Section 63 of CGST Act …………….. 1005
41.4 Summary Assessment—Section 64………………………………………………………… 1006
41.5 Best Judgment Assessment—Section 62 ………………………………………………… 1006
41.5.1 Procedure for Assessment in case of Non-Filers of Returns…….. 1007
41.5.2 Best Judgment Assessment Amnesty for certain orders …………. 1008
41.6 Assessment Proceedings not to be Invalid—Section 160 ……………………….. 1008
41.7 List of Forms (Audit and Assessment Rules)…………………………………………. 1008
41.7.1 Provisional Assessment…………………………………………………………… 1008
41.7.2 Scrutiny Assessment……………………………………………………………….. 1008
41.7.3 Best Judgment Assessment of Unregistered Persons……………….. 1009
41.7.4 Summary Assessment……………………………………………………………… 1009
41.8 Judgments……………………………………………………………………………………………… 1009
42. Show Cause Notice, Demands and Recoveries 1010
42.1 Some of the Essential Attributes of Show Cause Notice ………………………… 1010
42.2 DIN Not Required for GSTN Portal Generated Documents…………………… 1011
42.3 Notice has to be served on the assessee (Section 169 of CGST Act)………… 1011
42.4 What constitutes fraud, or wilful misstatement, or suppression
of facts to evade tax ? …………………………………………………………………………….. 1013
42.5 Furnishing a memo before issuance of SCN ………………………………………….. 1015
42.5.1 Partial payment of demand in Form DRC 01A ……………………….. 1015
42.5.2 Judgments……………………………………………………………………………….. 1015
42.6 Issuance of SCN in case of no Fraud, etc. pertaining to period upto
F.Y. 2023-2024 (Section 73)…………………………………………………………………….. 1016
42.6.1 Extension of timeline for passing order—Section 73(10)………….. 1018
42.6.1.1 Force Majeure Event and Time Extension
(Section 168A)…………………………………………………………. 1018
42.6.2 Mandatory uploading of summary to SCN and summary
to order on GSTN Portal………………………………………………………….. 1018

42.7 Issuance of SCN in case of Fraud, etc., pertaining to period upto
F.Y. 2023-24 (Section 74)………………………………………………………………………… 1019
42.7.1 No need of issue of SCN for Seizure and Confiscation
Procedures………………………………………………………………………………. 1021

42.8 Issuance of SCN pertaining to period From 2024-25 onwards
(Section 74A) …………………………………………………………………………………………. 1021
42.8.1 Difference between Section 73, Section 74 and Section 74A …….. 1024
42.9 General Provision as to Adjudication of SCN (Section 75) …………………….. 1025
42.9.1 Redetermination of demand pursuant to non-sustenance
of allegation of fraud, etc………………………………………………………… 1026
42.9.2 Exclusion of COVID-19 related period from adjudication
and refund filing……………………………………………………………………… 1026
42.9.3 Judgments……………………………………………………………………………….. 1027
42.10 Monetary Limits to Issue SCNs……………………………………………………………… 1035
42.10.1 Monetary limit for issue of SCN and Order under Section 74A . 1035
42.10.2 Monetary limit for issue of penalty under Section 122…………….. 1036
42.10.3 Issue of Statement for subsequent period
under Section 73, 74 or 74A …………………………………………………….. 1036

42.10.4 Summary of Adjudication Order (Rule 142)……………………………. 1036
42.11 Adjudication of SCNs by Audit Teams or DGST Intelligence………………… 1037
42.11.1 Adjudication of SCNs issued by DGGSTI……………………………….. 1037
42.12 Tax Collected but not paid (Section 76) …………………………………………………. 1037
42.13 Opportunity of Being Heard to Such Person …………………………………………. 1039
42.13.1 Judgments on Principles of Natural Justice……………………………… 1039
42.14 Rectification of Errors by Departmental Authorities—Section 161
of CGST Act………………………………………………………………………………………….. 1040
42.15 Recovery Proceedings—Sections 78 & 79 ………………………………………………. 1041
42.15.1 Mode of Recoveries and Procedure (Demand Recoveries Rules)……….1042
42.15.1.1 Auction Process under Rule 144A of CGST
Rules, 2017 ……………………………………………………………… 1045
42.15.1.2 Regularisation of payment of liability in liability
ledger though Form DRC-03…………………………………… 1046
42.15.1.3 Procedure for Recovery before Prescribed 3 months….. 1046
42.15.1.4 Judgements ……………………………………………………………………..1046
42.15.2 Mode of Recoveries of Central Excise, CENVAT
Credit and Service Tax…………………………………………………………….. 1046
42.15.2.1 Type of Demand and its recovery…………………………… 1047
42.15.2.2 Excise Duty and Services Tax payment of
period prior to 01.07.2018 ……………………………………….. 1048

42.15.3 Intimation for Recovery of certain amounts
under Section 79 (Rule 142B)………………………………………………….. 1048
42.16 Payment of Tax in Installments—Section 80………………………………………….. 1048
42.16.1 Disallowance of Facility of Tax Payment in Installments
(Demand Recoveries Rules)…………………………………………………….. 1049
42.17 GST to have first charge on Property (Section 82 of CGST Act)……………… 1049
42.18 Provisional Attachment (Section 83 of CGST Act and
Rule 159 of CGST Rules) ……………………………………………………………………….. 1049
42.18.1 Guidelines for Attachment of Property …………………………………… 1050
42.18.1.1 Circumstances when the property
can be attached……………………………………………………….. 1050
42.18.1.2 How would the Commissioner form an opinion? …… 1050
42.18.1.3 Cases fit for Provisional Attachment ………………………. 1051
42.18.1.4 Procedure for Provisional Attachment……………………. 1051
42.18.1.5 Release of movable attached property…………………….. 1052
42.18.1.6 Some important things to be taken care of………………. 1052
42.18.1.7 Period of Attachment……………………………………………… 1052
42.18.2 Judgments……………………………………………………………………………….. 1052
42.19 Recovery Procedures for Enhancement or Reduction of
Government Dues (Section 84 of CGST Act)………………………………………….. 1056
42.20 SCN Related Amnesty Scheme ……………………………………………………………… 1057
42.20.1 Waiver of interest and penalty pertaining to 01.07.2017 till
31.03.2020 (Section 128A) ………………………………………………………… 1057
42.21 List of Forms under Demand and Recoveries………………………………………… 1058

43. Amnesty Schemes 1060
43.1 Waiver of Interest and Penalty Pertaining to 01.07.2017 till
31.03.2020 (Section 128A) ………………………………………………………………………. 1060
43.1.1 Due Date up to Which Taxes are to be Paid and Application
for Availment of Amnesty Scheme has to be Filed ………………….. 1061
43.1.2 Proper officer under the Amnesty Scheme………………………………. 1062
43.1.3 Scenarios when the waiver granted under
Amnesty Scheme would become void…………………………………….. 1062
43.1.4 Procedure to be followed by a registered taxpayer………………….. 1063
43.1.5 Procedure post issue of Order…………………………………………………. 1064
43.2 ITC Availment of FY 2017-18 to FY 2020-21 input invoice till
30th November, 2021 …………………………………………………………………………….. 1070
43.3 ITC availment by persons whose registration cancellation has
been revoked…………………………………………………………………………………………. 1071
43.4 Procedure for ITC Amnesty Scheme (w.e.f. 08.10.2024)…………………………. 1071
43.4.1 Clarifications issued in relation to ITC Amnesty Schemes ………. 1072
43.4.2 Some important points for Amnesty Scheme ………………………….. 1073
43.4.3 How to file rectification application on GSTN portal………………. 1074
44. Advance Ruling 1075
44.1 Application for Advance Ruling (AR)—Section 97 of CGST Act……………. 1075
44.2 Procedure for AR and Questions under AR—Section 98……………………….. 1076
44.2.1 Procedure of Application to AAR(Advance Ruling Rules)……… 1077
44.2.2 Certification of AR (Rules)………………………………………………………. 1077
44.3 Manual Filing of Application for Advance Ruling (Rules)…………………….. 1077
44.3.1 Application to Advance Ruling……………………………………………….. 1077
44.4 Appeal to AAAR and Procedure—Sections 100 & 101…………………………… 1078
44.4.1 Procedure of Application to AAAR (Rules)…………………………….. 1079
44.5 Manual Filing of Application for Advance Ruling (Rules)…………………….. 1079
44.5.1 Application of appeal against Advance Ruling……………………….. 1079
44.5.2 Certification of AAAR Rulings (Rules)……………………………………. 1080
44.5.3 Judgments……………………………………………………………………………….. 1080
44.6 Rectification and Applicability of AR—Sections 102 & 103 of CGST Act.. 1080
44.7 Other important points—Sections 104 & 105 …………………………………………. 1081
44.8 Appeal to National Appellate Authority (NAA) (Section 101B of
CGST Act) (effective from date to be notified)……………………………………….. 1081
44.8.1 Procedure of Application to NAA…………………………………………… 1082
44.9 List of Advance Ruling Forms……………………………………………………………….. 1082

45. Appeals and Revision 1083
45.1 Types of Available Avenues Post Adjudication…………………………………….. 1083
45.2 Appeals to Appellate Authority—Section 107……………………………………….. 1083
45.2.1 Judgments……………………………………………………………………………….. 1085
45.2.2 Procedure for Appeal to Appellate Authority by
Assessee (Appeal and Revision Rules) ……………………………………. 1087
45.2.2.1 Amnesty Scheme for Filing Appeal before
First Appellate Authority ……………………………………….. 1088

45.2.3 Procedure for application to Appellate Authority by
Authorities (Rules)………………………………………………………………….. 1089
45.2.4 Authority to whom Appeal will be filed?………………………………… 1089
45.2.5 Additional Evidence before Appellate Authority (Rules)………… 1090
45.2.6 Withdrawal of Appeal (Rule 109C)…………………………………………….. 1090
45.2.7 Order of Appellate Authority (Rules)……………………………………… 1091
45.2.8 Pre-Deposit for stopping recovery proceedings post
order of first appellate authority……………………………………………… 1091
45.3 Revision—Section 108……………………………………………………………………………. 1092
45.3.1 Circumstances when RA cannot revise—Section 108(2)
of CGST Act…………………………………………………………………………….. 1092
45.3.2 Other RA Related Points—Section 108(2) of CGST Act……………. 1093
45.4 Appeal to Tribunal—Section 109 of CGST Act………………………………………. 1093
45.4.1 Types of Tribunal and their Jurisdiction………………………………….. 1093
45.4.2 Constitution of Tribunal Benches ……………………………………………. 1094
45.4.3 Hearing by a Single Bench and Double bench…………………………. 1094
45.4.3.1 Hearing by a Single Bench…………………………………………. 1094
45.4.3.2 Hearing of Other Cases……………………………………………… 1094
45.4.4 Procedure before the Tribunal—Section 112 of CGST Act……….. 1095
45.4.4.1 Procedure for filing an appeal before Tribunal
notified (Rule 110 of CGST Rules) ………………………….. 1097

45.4.5 Authorised Representative before the
Tribunal—Section 116 of CGST Act…………………………………………. 1098
45.4.6 Procedure for Appeal to Tribunal by Assessee (Rules)……………. 1099
45.4.7 Procedure for application to Appellate Tribunal by
Authorities (Rules)………………………………………………………………….. 1099
45.4.8 Additional Evidence before Tribunal (Rules) ………………………….. 1099
45.4.9 Order of Tribunal (Rules)………………………………………………………… 1100
45.4.10 Difference of Opinion Between Members (Section 109(9)) ………. 1100
45.4.11 State Benches Location ……………………………………………………………. 1101

45.4.12 Pre-Deposit for stopping recovery proceedings post
order of first appellate authority……………………………………………… 1102
45.4.13 Some Specific Matters to be heard only by Tribunal
Principal Bench located at Delhi ……………………………………………… 1103
45.4.14 Specification of Form number for appeal filing……………………….. 1103
45.4.15 All appeals to be filed electronically………………………………………… 1103
45.4.16 Time limit of Filing Appeals before GSTAT…………………………….. 1104
45.4.17 GSTAT Rules…………………………………………………………………………… 1104
45.4.17.1 Who can appear before GSTAT (Section 116)?………… 1104
45.4.17.2 Some General Procedures GSTAT Rules…………………. 1105
45.4.17.3 Procedure of filing appeals before GSTAT?…………….. 1105
45.4.17.4 Fee to be paid while filing appeals
before GSTAT? For Other Purposes………………………… 1108
45.4.17.5 Publishing Cause List……………………………………………… 1108
45.4.17.6 Service of notice or communication………………………… 1109
45.4.17.7 Conduct of Proceedings in GSTAT …………………………. 1109
45.4.17.8 Dress of Parties and Authorised Representatives……. 1109
45.4.18 Procedure for appeals to be heard by Single member Bench …… 1110
45.5 Appeals to High Court—Section 117 …………………………………………………….. 1110
45.5.1 Substantial Question of Law……………………………………………………. 1111
45.6 Appeals to Supreme Court (Section 118)……………………………………………….. 1111
45.7 COVID-19 Related Time Extensions………………………………………………………. 1111
45.7.1 Supreme Court COVID Orders……………………………………………….. 1111
45.7.2 CBIC Clarification on COVID related Limitation Periods ……….. 1113
45.8 Demand Decided is payable even if appealed against (Section 119)………. 1113
45.9 Fixing monetary limits for filing Departmental Appeal(s)
(Section 120 of CGST Act, 2017) ……………………………………………………………. 1113
45.9.1 Monetary Thresholds for non-filing a departmental appeal ……. 1114
45.9.2 Determination of monetary limits …………………………………………… 1114
45.9.3 Exclusions where monetary limits are not applicable ……………… 1114
45.10 Judgments……………………………………………………………………………………………… 1115
45.11 List of Forms for Appeal and Revisions…………………………………………………. 1119
46. Penalties, Detention, Prosecution & Compounding 1120
46.1 General Discipline for Penalty—Section 126 of CGST Act……………………… 1120
46.2 Penalty under no fraud—Section 122(2) of CGST Act……………………………. 1122
46.3 Penalty under fraud, etc.—Section 122(2) of CGST Act …………………………. 1122
46.4 Penalty under Various Cases—Section 122(1) of CGST Act…………………… 1123
46.4.1 Penalty Provisions in Specific Circumstances………………………….. 1125

46.4.2 Clarification on demand and penalty in respect of fake invoices …….. 1125
46.5 Power to Impose Penalty in Certain Cases (Section 127 of CGST
Act, 2017) ………………………………………………………………………………………………. 1126
46.6 Waiver of Penalty (Section 128 of CGST Act, 2017) ……………………………….. 1126
46.7 Offences by Companies (Section 137 of CGST Act, 2017) ………………………. 1127
46.8 Detention, Seizure of Goods/Conveyance—Section 129 of
CGST Act2 …………………………………………………………………………………………….. 1127
46.8.1 Owner of Goods ……………………………………………………………………… 1128
46.8.2 Reduced Penalties on Minor Deficiency During Inspection…….. 1128
46.8.3 Inspection of vehicle ……………………………………………………………….. 1129
46.8.4 Procedure of inspection of Vehicle, …………………………………………. 1129
46.8.5 Procedure for Detention and Release of Vehicle ……………………… 1130
46.8.6 Auction Process under Rule 144A of CGST Rules, 2017 ………….. 1130
46.8.7 Judgments……………………………………………………………………………….. 1130
46.9 Confiscation of Goods/Conveyances—Section 130 of CGST Act…………… 1134
46.9.1 Fine payable in lieu of confiscation …………………………………………. 1135
46.9.2 Procedure for Confiscation of Vehicle……………………………………… 1136
46.9.3 Goods/Conveyances Violating Provisions of GST
alone are to be detained/confiscated ………………………………………. 1136
46.9.4 No need of issue of SCN for Seizure and Confiscation Procedures ……….1136
46.9.5 Guidelines for Issuance of Summary of Demand
Order in Form GST DRC-07…………………………………………………….. 1137
46.10 Prosecution Provisions—Section 132 of CGST Act ………………………………… 1137
46.10.1 Circumstances for Prosecution………………………………………………… 1137
46.10.2 Imprisonment and Fine …………………………………………………………… 1139
46.10.3 Guidelines to arrest…………………………………………………………………. 1139
46.11 Compounding of Offences—Section 138……………………………………………….. 1141
46.11.1 Procedure for Compounding (Offences and
Penalties Rules)……………………………………………………………………….. 1142
46.11.2 Amount of Compounding [Rule 162(3A]………………………………… 1143
46.12 Penalty Related Amesty Scheme……………………………………………………………. 1145
46.12.1 Waiver of Interest and Penalty Pertaining to 01.07.2017 till
31.03.2020 (Section 128A) ………………………………………………………… 1145
46.13 List of Forms under Compounding……………………………………………………….. 1146
46.14 List of Forms for Vehicle Inspection, Detention and Confiscation……………… 1146
47. Transitional Provisions 1147
47.1 Transitional Provisions for CENVAT Credit—Section 140 of
CGST Act………………………………………………………………………………………………. 1147

47.1.1 Other Compliances to be Undertaken under Section 140
(Transitional Provisions Rules) ……………………………………………….. 1152
47.1.1.1 Revision of Form GST TRAN-1 ………………………………. 1153
47.1.1.2 Extension of Form TRAN-1 Filing Not Filed
Due to Technical Faults…………………………………………… 1153

47.1.2 Transitional Provisions for Unregistered Persons not
possessing duty paying document—Section 140(3) of
CGST Act………………………………………………………………………………… 1154
47.1.2.1 Methods for allowing Credit Under
Section 140(3) of CGST Act……………………………………… 1155
47.1.2.2 Credit Transfer Documents (CTD)………………………….. 1155
47.1.2.3 Credit Availment at Prescribed Percentage…………….. 1157
47.2 Job Work Related Transitional Provisions—Section 141 of CGST Act……. 1158
47.3 Miscellaneous Transitional Provisions—Section 142 of CGST Act…………. 1159
47.4 Some Specific Cases—Section 142 of CGST Act …………………………………….. 1160
47.5 Non-Utilisation/Transition of Disputed and Not Allowed Credits……….. 1161
47.6 Procedure for verification of Transitional Credit …………………………………… 1162
47.6.1 Basis on which the assessee needs to be picked by
authorities for verification……………………………………………………….. 1162
47.6.2 Transition of CENVAT Credit in relation to Cesses ………………… 1163
47.6.3 Documents that can be asked by the verification authorities …… 1163
47.6.4 Information details to be filed by the specific taxpayers………….. 1163
47.6.5 Prescribed procedure for carrying out the verification ……………. 1164
47.7 Appeal to be filed against adjudication order in case of
Transition Credits …………………………………………………………………………..1164
47.8 Forms Under Transitional Provisions ……………………………………………………. 1165
48. E-Way Bill 1166
ELECTRONIC WAY BILL (EWB) RULES…………………………………………………………… 1166
48.1 Concept and Validity of EWB………………………………………………………………… 1166
48.1.1 Restriction on Filing Part A of EWB………………………………………… 1173
48.1.1.1 Relaxation in rule restricting generation
of e-way bill by a registered person………………………… 1173
48.1.2 EWB Generation in Case of ‘Bill to’ ‘Ship To’ Transaction ………. 1173
48.1.3 EWB Generation in Case of ‘Bill From’ and ‘Ship From’
Scenario…………………………………………………………………………………… 1174
48.1.4 Procedure to be Adopted for Transportation
through Road………………………………………………………………………….. 1175
48.1.4.1 Procedure to be adopted when consignor or
consignee does not generate EWB in case of
inter-State supplies …………………………………………………. 1176

48.1.4.2 EWB Requirement if Goods are supplied within
a State but Transited Through Different States ……….. 1176
48.1.4.3 Procedure for generating E-way Bill by
unregistered persons ……………………………………………… 1176

48.1.5 Procedure to be Adopted for Transportation
Through Rail or Air or Vessel………………………………………………….. 1177
48.1.5.1 Meaning of Transportation of Goods by
Rail under E-Way Bill Provisions ……………………………. 1177

48.1.6 Procedure to be adopted for transportation of goods
supplied through electronic commerce operator (ECO)
or Courier Agency…………………………………………………………………… 1177
48.1.7 Re-assignment to new transporter for updation of
information in EWB ………………………………………………………………… 1178
48.1.8 E-Way Bill Details to be made available by Portal…………………… 1178
48.1.9 Documents to be carried …………………………………………………………. 1179
48.1.9.1 Physical Copy of invoice not to be carried when
E-invoice has been generated………………………………….. 1179
48.1.10 Verification of Documents and Coveyance ……………………………… 1180
48.1.11 Prescribed Goods not requiring EWB for transportation…………. 1180
48.1.12 Generation of E-Way Bills……………………………………………………….. 1180
48.1.13 Consolidated EWB ………………………………………………………………….. 1181
48.1.14 E-Way Bills for multi modal transportation of goods………………. 1182
48.1.15 Transporters and E-Way Bills………………………………………………….. 1183
48.1.15.1 Special Provision as to Enrolment of Warehouse
Operator and Transporters (Rule 58)………………………. 1184
48.1.16 Reports Generated on E-Way Bill System ……………………………….. 1184
48.1.17 Transportation of goods: One Invoice Multiple Vehicles ………… 1185
48.1.18 Facilities given to large units having considerable EWBs………… 1185
48.1.19 Miscellaneous issues ……………………………………………………………….. 1186
48.1.20 E-Way Bill generation in case of movement of
goods pursuant to service as principal supply ………………………. 1186
48.1.21 EWB for intra State movement of gold, precious stone, etc……… 1187
48.2 Judgments……………………………………………………………………………………………… 1188
49. Anti Profiteering 1189
ANTI-PROFITEERING MEASURES—SECTION 171 OF CGST ACT…………………. 1189
49.1 Discontinuation of Anti Profiteering Authority …………………………………….. 1189
49.1.1 Anti-Profiteering Rules, 2017…………………………………………………… 1189
49.1.1.1 Different Authorities provided under
the said Rules………………………………………………………….. 1189

49.1.1.2 Process to be followed for complaints
received under Section 171……………………………………… 1190
49.1.1.3 Powers, Duties, etc. of Authority ……………………………. 1190
49.2 Competition Commission of India ………………………………………………………… 1192
49.3 Judgments……………………………………………………………………………………………… 1192
50. Liability and Other Miscellaneous Provisions 1193
50.1 Liability Provisions (Chapter XVI of CGST Act, 2017) …………………………… 1193
50.1.1 Liability in case of Transfer of Business (Section 85 of
CGST Act, 2017)………………………………………………………………………. 1193
50.1.2 Liability of Agent and Principal (Section 86 of CGST
Act, 2017) ………………………………………………………………………………… 1193
50.1.3 Taxability of Supplies during intervening period in Case of
Amalgamation or Merger (Section 87 of CGST Act, 2017)……….. 1194
50.1.4 Liability of Directors of Private Company
(Sections 88 and 89 of CGST Act, 2017)……………………………………. 1195
50.1.5 Liability of a Partner of Firm (Section 90 of CGST Act, 2017)………. 1195
50.1.6 Liability of a Guardian or Trustee, etc.
(Section 91 of CGST Act, 2017) ………………………………………………… 1196
50.1.7 Liability of Legal Representative
(Section 93 of CGST Act, 2017) ………………………………………………… 1196
50.1.8 Liability in other Cases (Section 94 of CGST Act, 2017) …………… 1196
50.2 Culpable Mental State [Section 135 of CGST Act, 2017]…………………………. 1196
50.3 Goods and Services Tax Compliance Rating—Section 149 of
CGST Act………………………………………………………………………………………………. 1196
50.4 Information Return—Section 150 of CGST Act ……………………………………… 1197
50.5 Power to Collect Statistics—Section 151 of CGST Act……………………………. 1198
50.6 Sharing of Information by GSTN Portal (Section 158A)…………………………. 1198
50.6.1 Consent based sharing system (Rule 163) ……………………………….. 1198
50.7 Publication of Names (Section 159 of CGST Act, 2017)………………………….. 1199
50.8 Rectification of errors—Section 161 of CGST Act…………………………………… 1199
50.9 Rounding off of Taxes—Section 170 of CGST Act………………………………….. 1199
50.10 Mandatory Provision of Electronic Payment Option by Specified
Suppliers ……………………………………………………………………………………………….. 1199
50.11 Mandatory Mention of Document Identification Number (DIN)…………… 1200
50.12 Extension of Timeline for Other Compliances in view
of COVID-19 (I)……………………………………………………………………………………… 1200
50.12.1 Extension of Timeline for Other Compliances in
view of COVID-19 (II)……………………………………………………………… 1201
50.12.2 Exclusion of COVID-19 related period from adjudication
and refund filing……………………………………………………………………… 1202

50.13 COVID-19 Related Time Extensions………………………………………………………. 1203
50.13.1 Supreme Court COVID Orders……………………………………………….. 1203
50.13.2 CBIC Clarification on COVID related Limitation Periods ……….. 1204
50.14 Details of Machines to be submitted by Guthka and Tobacco manufacturers .
1205
50.14.1 Clarifications by CBIC …………………………………………………………….. 1207
50.15 New Track and Trace Mechanism (Section 122A)………………………………….. 1209
APPENDIX
 The Central Goods and Services Tax Act, 2017………………………………………1213-1403
 The Integrated Goods and Services Tax Act, 2017 …………………………………1404-1431
 The Central Goods and Services Tax Rules, 2017…………………………………..1432-1625
 The Goods and Services Tax Appellate Tribunal
(Procedure) Rules, 2025 ………………………………………………………………………..1626-1651
 The Goods and Services Tax Settlement of Funds Rules, 2026……………….1652-1666