Key Definitions Under GST
Goods:
Means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply.
Service:
Means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged.
Aggregate turnover
Means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;
Agent:
Means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another
Voucher:
Means an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services or both and where the goods or services or both to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related documentation, including the terms and conditions of use of such instrument…
Business
Business has been widely defined to include trade, commerce, manufacture, profession, vocation or any other similar activity, including transactions related or incidental thereto, irrespective of volume or frequency, as well as supply of goods/ services in connection with commencement or closure of business. The definition of ‘business’ is expansive and appears to have been borrowed from State VAT legislations, with modifications made to include transactions in services.
Reverse Charge
With the introduction of GST, a new provision is introduced which is not there is any of the earlier tax laws. As per the new law, in case one registered person receives any goods or services or both, which is taxable, from the unregistered person, registered person shall be required to pay tax and all the other liabilities like issue of invoice, filing return, assessment of the same shall be the responsibility of the recipient/registered person. As per section 9(4) of the CGST Act, the central tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
Capital goods
Capital goods definition is similar to the current definition in Rule 2(a) of CENVAT Credit Rules, 2004. The definition however does not appear to include the changes brought in by the Union Budget 2016-17 amendments to the CENVAT Credit Rules. Further, for manufacturers, capital goods have been confined to only those used at the place of business.
Consideration
Consideration in relation to the supply of goods and/or services to any person, includes (a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods and/or services, whether by the said person or by any other person (b) the monetary value of any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of goods and/or services, whether by the said person or by any other person The definition excludes from its ambit, any deposit, whether refundable or not, given in respect of the supply of goods and/or services unless the supplier applies the deposit as a consideration for the supply. Valuation Rules in this regard have been prescribed, which are discussed separately.
Deemed exports
Deemed exports has been defined to include transactions in which the goods supplied do not leave India, and payment for such supplies is received either in Indian Rupees or in convertible foreign exchange. Transactions that will get covered within deemed exports shall be notified by the Government. The Model GST Law is presently silent on treatment of supplies to SEZS, STPs and EOUs; it is likely that the same may find place in such notification. Further, zero rated supply status is expected to be granted to deemed exports.
Export of services and Import of services
Export of services and Import of services have been defined to exclude transactions between establishments of the same person in India and outside India.
Exports of goods and services
Exports of goods and services have been included within the scope of zero-rated supplies. Zero-rated supplies are defined as any supply of goods/ services on which no tax is payable but credit of related input tax credit is admissible.
Prologue:
Finally the long awaited Single Indirect Tax Regime GST Law received the assent of the President on the 12th day of April, 2017. GST Law extends to whole of India except the State of Jammu and Kashmir. It supercedes about 17 indirect tax laws which eliminate the Cascading-Effect (“Tax on Tax”). GST is destination/consumption based taxing method thus the term “supply” of goods/ services plays a vital role in GST. GST is similar to existing VAT system i.e., Tax on Value Addition. Input Tax Credit is the backbone of the GST regime
Works contract
Works contract have been defined to mean an agreement for carrying out for cash, deferred payment or other valuable consideration, building, construction, fabrication, erection, installation, fitting out, improvement, modification, repair, renovation or commissioning of any moveable or immovable property. Deeming of works contracts as services should simplify taxation of works contracts. However, whether a particular contracting structure qualifies as a works contract, is a determination that the taxpayer would need to undertake.
Composite supply
Composite supply have been defined to include any combination of services and/ or goods provided in the course of furtherance of business. While the principles of classification have not been included in the Model GST Law, it is possible that such contracts could be treated as bundled supplies and specific classification rules proposed for the same. especially because in all public discussion the industry has been given to understand by Government authorities that branch transfers will attract IGST. It is specifically clarified that supply of goods by a registered taxable person to a job worker shall not be considered as a supply of goods. Further, under Section 43A, supply of raw material and receipt of goods after completion of job-work may be done without payment of tax, subject to permission from the Commissioner.
Credit Note:-
Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to the recipient a credit note containing such particulars as may be prescribed.
Debit Note: –
Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient a debit note containing such particulars as may be prescribed.
Assessments under GST
In term of Section 2 (11) of the CGST “Assessment” means determining the tax liability under GST Act. Assessment simply means calculation of the tax liability. It is integrating part of the GST as without assessment it is very much difficult to determine tax liability of a taxable person.
Inspection:
‘Inspection’ is a softer provision than search which enables officers to access any place of business or of a person engaged in transporting goods or who is an owner or an operator of a warehouse or go down. As discussed above the inspection can be carried out by an officer of CGST/SGST only upon a written authorization given by an officer of the rank of Joint Commissioner or above.
Arrests:
In the administration of taxation the provisions for arrests are created to tackle the situations created by some unscrupulous tax evaders. To some these may appear very harsh but these are necessary for efficient tax administration and also act as a deterrent and instil a sense of discipline. The provisions for arrests under GST Law have sufficient inbuilt safeguards to ensure that these are used only under authorisation from the Commissioner. Besides this, the GST Law also stipulates that arrests can be made only in those cases where the person is involved in offences specified for the purposes of arrest and the tax amount involved in such offence is more than the specified limit Recommended Articles
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