Goods & Services Tax Cases

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A weekly guide to statutory changes & Landmark rulings
Case Laws
No writ could be filed against issues which could be addressed to by
appellate authorities under GST Act: HC
Indusind Media Communications Ltd. v. Union of India [2019] 101 taxmann.com 128
(Kar.)
The assessee had failed to upload Form GST TRAN-1 due to technical glitches
and, therefore, due credit of the input tax credit which was lying in its credit
under the earlier tax regime was not reflected in the Data Base of the
Government. The assessee filed a writ petition contending that despite the
representation filed to the Commissioner, GST, Bengaluru, he had not acted on
such representation. It had also challenged the assessment order. The revenue,
on the other hand, submitted that separate Nodal Officers at the level of
Commissioner had been appointed by the Central Government in all the States
and they could definitely look into the grievances of the assessee regarding
technical and administrative difficulties faced by it and could pass appropriate
orders in the matter. However, the assessee could comply with the condition of
filing the requisite returns and declarations in this regard.
The Hon’ble High Court held that instant Court was not inclined to entertain the
writ petition on the merits of the issues raised in the writ petition as the same
could be addressed to by the authorities under the GST Act and the appellate
authorities. The assessee, therefore, present his case before the Nodal Officer
(Commissioner). If any prejudicial order would be passed against the assessee
by the Nodal Officer, the assessee would have liberty to avail the appropriate
legal remedy.
No input tax credit is available for rent paid on leasehold land

acquired for construction of resort
GGL Hotel & Resort Company Ltd., In re [2019] 101 taxmann.com 138 (AAR - W.B.)
The applicant company is in the hospitality and real estate business and is
contemplating a new project on a leasehold land. Bengal Housing Infrastruc-
ture Development (WBHIDCL) has leased out a piece of land for a period of 32
GOODS & SERVICES TAX CASES n JANUARY 22 - JANUARY 28, 2019 n 11
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years to the applicant. The applicant is liable to pay annual lease rent at certain
rate. The project is proposed to be completed within a period of two years from
the foundation of the project and the lease rent paid during the pre-operative
period would be capitalized in the books of account by the applicant.
The applicant has sought advance ruling as to whether Input Tax Credit is
available for lease rent paid during pre-operative period for the leasehold land
on which the resort is being constructed to be used for furtherance of business,
when the same is capitalised and treated as capital expenditure.
The Authority for Advance Ruling observed that the prohibition on availing of
input tax credit is not limited to the civil structure being constructed. It extends
to the immovable property in general (other than plant and machinery), which
includes the supplies received for retaining the right to use and develop the land.
Therefore, the lease rental paid during the pre-operative period would be
treated as part of the cost of goods and services received for the purpose of
constructing an immovable property and ITC would not be admissible on such
lease rental.
Works contract service to IWAI for construction of Multi Model IWT

terminal shall be taxed at 18% GST
ITD Cementation India Ltd., In re [2019] 101 taxmann.com 137 (AAR - W.B.)
The applicant has entered into an agreement with Inland Waterways Authority
of India (IWAI) for construction of a multi-model IWT terminal at Haldia on
EPC basis. The applicant has filed an application before authority of advance
ruling to seek ruling on applicability of rate of GST on the works contract
service to be supplied for construction of the above terminal.
Authority of advance ruling observed that there is Notification No. 24/2017 -
CT(Rate) dated 21.09.2017 which clearly states that if works contract service
supplied to Govt. Entity the same is taxable at 12% GST provided supply
received predominantly for use other than for commerce, industry, or any
other business or profession, otherwise 18% GST will be levied. It has been
further noted that IWAI is a Government Entity having no sovereign authority
to collect Governmental revenue and user fees that IWAI collects is not credited
to the Consolidated Fund of India.
Therefore, unless proceeds from such activities, including user fees and
charges, are credited to the Consolidated Fund of India, they must be construed
as proceeds from commerce and business. It is, therefore, evident that the
applicant is supplying works contract service that is meant for commerce and
business. So, it is held that benefit of reduced tax is not available and GST will
be attracted at 18%.
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Weekly Review A-3
Delayed payment surcharge attributable to distribution and

transmission of electricity is exempt from GST
Madhya Pradesh Poorv Kshetra Vidyut Vitaran Co. Ltd., In re [2019] 101 taxmann.com
100 (AAR - M.P.)
The applicant is a PSU fully owned by Govt. and is engaged in the distribution
and supply of electricity. It collects charges for supply of electricity along with
the other non-tariff. Applicant issues bills of electricity to its consumers, which
has a particular due date to pay, every payment received after due date
mentioned in bills is liable to pay delayed payment charges. Applicant has raised
question before Authority of Advance Ruling whether he is eligible for exemp-
tion from GST in respect of collection of delayed payment surcharge as
exemption is being provided on supply of ‘Transmission or Distribution of
electricity by an electricity transmission or distribution of electricity utility’ and
what will be the rate of tax if exemption not available?
The Authority of Advance Ruling has observed that applicant is recovering
delay payment charges not only towards supply of electricity, supply transmis-
sion/distribution of electricity services as an electricity distribution utility
which are exempted but also towards charges like metering charges and others
which are taxable. As per section 15 of the CGST Act, 2017 it is clear that of any
amount is recovered in the name of interest or late fee or penalty for delayed
payment of any consideration for any supply, then same shall be included in the
value of such supply. Therefore, it is held that the portion of delayed payment
surcharge attributable to distribution and transmission of electricity and
supply of energy is exempt and rest portion of delayed payment surcharge is
taxable.
Company established by the Govt. notification is liable to deduct

TDS under GST if controlled by the Govt.
WEBFIL Ltd., In re [2019] 101 taxmann.com 139 (AAR - W.B.)
The applicant is a joint venture company formed by undertakings of State Govt.
(WBIDC) and Central Govt. (Yule & Co) and they together hold 62.29% of the
subscribed and paid up share capital of the applicant. The rest is held by the
public. Applicant filed an application before authority of advance ruling to seek
ruling whether it is liable to deduct TDS as per GST Law.
Authority of Advance ruling observed that the Applicant is not a “Government
Company”, as per the Companies Act, 2013. It is also not a subsidiary of any
“Government Company”. Hence, applicant cannot be termed a “Public Sector
Undertaking”, where 51% or more of the paid-up share capital is held by the
Central or the State Governments. As per section 51 certain categories of
recipients shall deduct tax at source at a percentage while making payments to
the suppliers above a threshold limit. Such recipients include inter alia an
authority or a board or any other body set-up by an Act of the Parliament or a
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State Legislature or established by any Government with 51% or more partici-

pation by way of equity or control to carry out any function.
In the instant case Govt., acting through the government companies is in
position to indirectly control the management or policy of the applicant. Hence,
it is held that the Applicant, if established by government notification, is liable
to deduct tax at source under GST, being a company controlled by the Central
and the State Governments.
Rice Bucket Elevator & Rice Conveyor classifiable as rice mill

machinery under Heading No. 8437
Alpsco Graintech (P.) Ltd. v. CCE & ST [2019] 101 taxmann.com 74
(Chandigarh - CESTAT)
The assessee was engaged in the manufacture of Rice Milling Machinery and
Parts thereof like rice bucket elevator (grain discharger), rice conveyor (grain
feeder), paddy cleaner, paddy husker, paddy separator, etc. It classified ‘rice
bucket elevator’ and ‘rice conveyor’ under Heading No. 8437 as machinery used
in Rice Milling Industry. The Adjudicating Authority held that ‘rice bucket
elevator’ and ‘rice conveyor’ were classifiable under Heading No. 8428 as other
lifting, handling, loading or unloading machinery. The assessee filed appeal
before the Tribunal.
The Hon’ble Tribunal observed that the assessee had produced various techni-
cal opinions as well as the data from Customs and Central Excise Department
wherein the importer as well as exporter of elevators and conveyors used
specifically designed for rice milling had been classified under Heading No.
8437. Moreover, it was observed that Central Excise Tariff is clear with respect
to aspect that the said machines if supplied as a combination of machines would
be covered under the main Heading No. 8437. Therefore, the conveyors and
elevators specifically manufactured as the parts of rice milling machinery along
with other machinery of rice by the assessee would be classified under Heading
No. 8437.
Mouth freshener has been classified as Food preparation not

elsewhere specified or included under HSN 2106
Prem Ghan Products, In re [2019] 101 taxmann.com 97 (AAR - M.P.)
Applicant is engaged in the manufacture, supply and trading of various types of
mouth fresheners. Currently the product falls under chapter heading 2106 of
HSN as ‘Miscellaneous Edible Preparation not elsewhere specified or included
and attracts GST at 18% on supply of such product. While other major market
players in this field dealing in similar products under brand names ‘Chutki’,
‘Pass’, etc., are classified under chapter 20 of the HSN attracting GST at 12%. It
filed an application for advance ruling, whether such products are liable to be
tax at 18% or 12%?
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Weekly Review A-5
Authority of advance ruling observed that such products are being classified
under chapter heading 2106 of erstwhile Central Excise Tariff Act 1985, and
there is neither any change in ingredients nor any change in manufacturing
process. It is held that Mouth Freshener shall be classified under chapter
heading 2106 of the GST tariff as ‘Food preparation not elsewhere specified or
included’ and would be chargeable to GST at 18%.
Statutory Changes
GST Amendments Acts, 2018 would be applicable from February 1,
2019: GST Council
PRESS RELEASE DATED, 04-01-2019
Based on the representations received from various stake holders, the GST
council in its 31st meeting decided that the CGST Amendment Act, 2018, the
UTGST Amendment Act, 2018, the GST(Cess) Amendment Act, 2018 and the
IGST Amendment Act, 2018 would be brought into force with effect from
February 1st, 2019. It is also affirmed vide press release dated January 10, 2019.
Last date for passing examination for GST practitioner to be extended

till 31.12.2019: GST Council
The GST council has proposed in its 32nd council meeting that last date for
passing the examination for GST practitioners would be extended till 31.12.2019
for those GST practitioners who have enrolled under rule 83(1)(b) of the CGST
Rules, 2017, i.e., who were sales tax practitioners or tax return preparers under
the existing law for a period of not less than five years
GST Council has proposed various reliefs to MSME sector in its 32nd
GST council meeting
In the 32nd GST Council meeting held on January 10, 2019, the council has
proposed various reliefs for MSME sector, such as widening the scope of
composition scheme, simplification of compliances, free accounting-cum-
billing software for small taxpayers, so on and so forth. All these proposals
would be effective from the April 1, 2019. Key takeaways of 32st GST Council
meeting are as follows:
u MSMEs engaged in supply of goods (not services) would get relaxation
from GST Registration. The existing threshold limit of ` 20 lakhs for
obtaining the GST registration and levy of GST has been increased to ` 40
lakhs. The GST Council Meeting has given a choice to the States to choose
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between the applicable threshold limit from ` 20 lakhs or ` 40 lakhs. The

States have to take a decision on this aspect within a week. No such
relaxation has been given to suppliers of services.
u The Govt. shall provide a free accounting-cum-billing software to small
taxpayers.
u The limit of annual turnover, in the preceding financial year, for availing
of the composition scheme for goods has been increased from ` 1 Crore
to ` 1.5 Crores. For Special category States, the Council has given the
liberty to the States to decide on independently about the threshold limit
within one week.
u Currently, composition suppliers are required to file GSTR 4 on quarterly
basis. The Council has proposed to simplify the compliance procedure for
such suppliers. The suppliers shall now be required to file just one return
on annual basis, while as the payment of tax shall continue to be on a
quarterly basis. It is not clear whether annual return to be filed by
composition supplier in Form GSTR-9A shall continue?
u The option to avail of composition scheme has been extended to service
providers who have the turnover of upto ` 50 lakhs during the previous
financial year. Under this scheme, the service providers shall be liable to
pay GST at the rate of 6% (3% CGST + 3% SGST). The said scheme shall be
applicable to both, service providers as well as suppliers of goods and
services.
u A new cess at the rate of 1% shall be levied on intra-State supply of goods
or services within the State of Kerala for a period of not exceeding 2 years
for revenue mobilization for natural calamities.
u GST Council has asked the Group of Ministers to evaluate the proposal of
extending the composition scheme to real estate sector so as to give a boost
to residential housing segment.
u The Council has also asked the Group of ministers to examine the GST rate
structure on Lotteries.
nn
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Contents A-7
COntents
STATUTES
❑ CIRCULARS/PRESS RELEASE
- Central Goods and Services Tax Act, 2017 - Major decisions taken by Central Government
in Thirty Second GST council meeting held on 10-1-2019 - PIB PRESS RELEASE, DATED 10-
1-2019 477
- Recommendations made during Thirty Second GST council meeting held at New Delhi on
10-1-2019 - PIB PRESS RELEASE, DATED 10-1-2019 478
CASE LAW
TABLE OF CASES REPORTED
u NHPC Ltd., In re (AAR - Uttarakhand) 202
u Sandvik Asia (P.) Ltd., In re (AAR - Rajasthan) 174
u SST Sustainable Transport Solutions India (P.) Ltd., In re (AAR - Maharashtra) 188
SUBJECT INDEX
ADVANCE RULING [SECTION 97 OF THE CENTRAL GOODS AND SERVICES TAX ACT, 2017]
- Application for - Determination of place of supply not having been specified under section
97(2), no finding could be given in respect of place of supply, as an authority constituted
under section 96 can determine or pronounce Advance Ruling only on issues specified
under section 97(2) - Sandvik Asia (P.) Ltd., In re (AAR - Raj.) 174
CENTRAL GOODS AND SERVICES TAX ACT, 2017
- Section 2(30) 174

- Section 2(90) 174
- Section 7 202
- Section 8 175
- Section 97 175
CIRCULARS & NOTIFICATIONS
- Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 188

- Maharashtra GST Notification No. 12/2017 - State Tax (Rate), dated 29-6-2017 188
CLASSIFICATION OF SERVICE
- Construction service - Where applicant-company has been entrusted with contract for
construction of road by Government and funds will be provided to NHPC in form of grants,
applicant, being a Government company, is entitled to exemption under Notification No.
12/2017 - Central Tax (Rate) dated 28-6-2017 - NHPC Ltd., In re (AAR - Uttarakhand) 202
- Maintenance and repair services - Maintenance and repair services of commercial and
industrial machinery fall under heading 9987171 and prescribed rate of GST is 18 per cent
- Sandvik Asia (P.) Ltd., In re (AAR - Raj.) 174
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A-8 Contents
- Rental service - Where assessee was rendering services to

State Municipal Corporation by way of giving out on FOUNDER EDITOR :
rent/hire, buses, which were further used by Corporation U.K. BHARGAVA
for transportation of passengers, such renting of buses by u
assessee would fall under Sr. 10, Heading No. 9966 of EDITOR :
RAKESH BHARGAVA
Notification No. 11/2017-Central Tax (Rate), dated 28-6-
u
2017 - SST Sustainable Transport Solutions India (P.)
HONY. CONSULTING EDITOR :
Ltd., In re (AAR - Maharashtra) 188 V.S. DATEY
RAJASTHAN GOODS AND SERVICES TAX ACT, 2017 u
Goods & Services Tax Cases comes in Six
- Section 2(30) 174 Volumes, subscription for Jan.- Dec. 2019 is
Rs. 6975. Single copy Rs. 200 only.
- Section 2(90) 174
u
- Section 8 175 Goods & Services Tax Cases is published
on Every Tuesday.
- Section 97 175
Non-receipt of part must be notified
SUPPLY within 60 days of the due date.
u
- Composite supply/Mixed supply [Section 2(30) of the
Address your editorial and
Central Goods and Services Tax Act, 2017] - Activities subscription correspondence to :
performed by applicant under ‘Comprehensive Mainte- Taxmann Allied Services (P.) Ltd.,
59/32, New Rohtak Road, New Delhi-110 005.
nance Contract’ are to be treated as a composite supply of
Phone : 91-11-45562222
services and activities performed under ‘Equipment Parts Fax : 91-11-45577111.
Supply and Services Agreement’ are to be treated as u
Mixed Supply - Sandvik Asia (P.) Ltd., In re (AAR - Raj.) Printed and Published by
174 Ansh Bhargava on behalf of Taxmann Allied
Services (P.) Ltd. and Printed at Tan Prints
- Composite and mixed suppliers, tax liability on [Section (India) Pvt. Ltd., 44 Km. Mile Stone, National
Highway, Rohtak Road, Village Rohad, Distt.
8 of the Central Goods and Services Tax Act, 2017 -
Jhajjar (Haryana) and
Maintenance and repair services of commercial and in- Published at 59/32,
dustrial machinery fall under heading 9987171 and pre- New Rohtak Road, New Delhi-110 005
Editor : Rakesh Bhargava
scribed rate of GST is 18 per cent - Sandvik Asia (P.) Ltd.,
u
In re (AAR - Raj.) 174
Material published in this part is the exclusive
- Principal Supply [Section 2(90) of the Central Goods and copyrighted property of Taxmann Allied
Services (P.) Ltd. and cannot be reproduced or
Services Tax Act, 2017] - Concept of principal supply is copied in any form or by any means without
applicable only in supply of composite service and not in written permission of the Publisher.
case of mixed supplies - Sandvik Asia (P.) Ltd., In re (AAR u
- Raj.) 174 Editors do not necessarily agree
with the views expressed by authors of
- Scope of [Section 7 of the Central Goods and Services articles/features. Views so expressed are the
Tax Act, 2019] - Where applicant-company has been personal views of author(s).
entrusted with contract for construction of road by Gov- u

This publication is sold with the understanding
ernment and funds will be provided to NHPC in form of
that authors/editors and publishers are not
grants, applicant, being a Government company, is en- responsible for the result of any action taken on
titled to exemption under Notification No. 12/2017 - the basis of this work nor for any error or
omission to any person, whether a purchaser of
Central Tax (Rate) dated 28-6-2017 - NHPC Ltd., In re this publication or not. All disputes are subject
(AAR - Uttarakhand) 202 to jurisdiction of the Delhi High Court.
u
UTTARAKHAND GOODS AND SERVICES TAX ACT, 2017
Email:[email protected]
- Section 7 202 Website: http//www.taxmann.com
MODE OF CITATION [2019] 71 GST. . . (. . .)
TOTAL PAGES [220]
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2019 FAQs 315
Q 22. What are the consequences of credit distributed in contravention of the

provisions of the Act?
Ans. The credit distributed in contravention of provisions of Act could be recovered
from the recipient to which it is distributed along with interest.
12. RetuRns PRocess
Q 1. What is the purpose of returns?

Ans.
(a) Mode for transfer of information to tax administration;
(b) Compliance verification program of tax administration;
(c) Finalization of the tax liabilities of the taxpayer within stipulated period of
limitation; to declare tax liability for a given period;
(d) Providing necessary inputs for taking policy decision;
(e) Management of audit and anti-evasion programs of tax administration.
Q 2. Who needs to file Return in GST regime?
Ans. Every person registered under GST will have to file returns in some form or
other. A registered person will have to file returns either monthly (normal supplier)
or quarterly basis (Supplier opting for composition scheme). An ISD will have to file
monthly returns showing details of credit distributed during the particular month.
A person required to deduct tax (TDS) and persons required to collect tax (TCS)
will also have to file monthly returns showing the amount deducted/collected and
other specified details. A non-resident taxable person will also have to file returns
for the period of activity undertaken.
Q 3. What type of outward supply details are to be filed in the return?
Ans. A normal registered taxpayer having aggregate turnover in the preceding or
current financial year more than ` 1.5 Crore has to file the outward supply de-
tails in GSTR-1 in relation to various types of supplies made in a month, namely
outward supplies to registered persons, outward supplies to unregistered persons
(consumers), details of Credit/Debit Notes, zero rated, exempted and non-GST
supplies, exports, and advances received in relation to future supply.
Q 4. Do taxpayers with an aggregate turnover less than ` 1.5 Crores also need to
file GSTR-1 on a monthly basis?
Ans. No. A special procedure has been prescribed for such taxpayers vide notification
No. 57/2017-Central Tax dated 15.11.2017. Such taxpayers need to file GSTR-1 on
a quarterly basis. The last date for filing GSTR-1 for such taxpayers for the period
Oct-Dec 18 is 31.01.2018. It is also clarified that the registered person may opt to
file FORM GSTR-1 on monthly basis if he so wishes even though his aggregate
turnover is up to ` 1.5 Crore.
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316 Goods & Services Tax - Statutes Vol. 71
Q 5. Is the scanned copy of invoices to be uploaded along with GSTR-1?

Ans. No scanned copy of invoices is to be uploaded. Only certain prescribed fields
of information from invoices need to be uploaded.
Q 6. Whether all invoices have to be uploaded in the returns?
Ans. No. It depends on whether the invoice is B2B or B2C plus whether Intra-State
or Inter-State supplies.
For B2B supplies, all invoices, whether Intra-State or Inter-State supplies, will have
to be uploaded. Why So? Because ITC will be taken by the recipients.
In B2C supplies, uploading in general may not be required as the buyer will not be
taking ITC. However still in order to implement the destination based principle,
invoices of value more than ` 2.5 lacs in inter-State B2C supplies will have to be
uploaded. For inter-State invoices below ` 2.5 lacs and all intra-State invoices, state
wise summary will be sufficient.
Q 7. Whether description of each item in the invoice will have to be uploaded?
Ans. No. In fact, description will not have to be uploaded. Only HSN code in respect
of supply of goods and classification code in respect of supply of services will have
to be fed. The minimum number of digits that the filer will have to upload would
depend on his turnover in the previous year.
Q 8. Whether value for each transaction has to be fed in GSTR-1? What if no
consideration?
Ans. Yes. Not only value but taxable value has to be fed. In some cases, both may
be different.
In case there is no consideration, but it is supply by virtue of schedule 1, the taxable
value will have to be worked out as prescribed and uploaded.
Q 9. What is the status of GSTR-2 and GSTR-3?
Ans. GSTR-2 and GSTR-3 have been indefinitely postponed and GSTR- 3B is being
filed since July, 2017. The matching as envisaged is not being done. Section 43A
has been inserted in the CGST Act, 2017 vide the CGST (Amendment) Act, 2018
for new procedure for furnishing returns and availing input tax credit. The work
on the same is being done and this will be implemented at a later date.
However, GSTR-2A is being auto-populated by GST Portal. The taxpayers can
view the details of supplies made to them wherever their suppliers have uploaded
the details of their outward supplies in their GSTR-1. The GSTR-2A is helping the
taxpayers in reconciling the ITC being taken by them on self-declaration basis in
Form GSTR-3B with the taxes declared by their suppliers in their respective GSTR-1.
Q 10. Do taxpayers under the composition scheme also need to file GSTR-1 and
GSTR-2?
Ans. No. Composition taxpayers do not need to file any statement of outward or
inward supplies. They have to file a quarterly return in Form GSTR-4 by the 18th
of the month after the end of the quarter. Since they are not eligible for any input
tax credit, there is no relevance of GSTR-2 for them and since the credit of tax
paid under Composition Levy is notE-JOURNAL
eligible, there is no relevance of GSTR-1 for
them. In their return, they have to declare summary details of their outward sup-

2019 FAQs 317
plies along with the details of tax payment. They also have to give details of their
purchases in their quarterly return itself, most of which will be auto populated.
Q 11. Do Input Service Distributors (ISDs) need to file separate statement of
outward and inward supplies with their return?
Ans. No, the ISDs need to file only a return in Form GSTR-6 and the return has the
details of credit received by them from the service provider and the credit distrib-
uted by them to the recipient units. Since their return itself covers these aspects,
there is no requirement to file separate statement of inward and outward supplies.
Q 12. How does a taxpayer get the credit of the tax deducted at source on his be-
half? Does he need to produce TDS certificate from the deductee to get the credit?
Ans. Under GST, the deductor will be submitting the deductee wise details of all
the deductions made by him in his return in Form GSTR-7 to be filed by 10th of
the month next to the month in which deductions were made.
TDS amount deducted from the payment due to the deductee, would be reflected
in electronic cash ledger of deductee after furnishing of return and payment of tax
to the Government account by the deductor. The amount credited to electronic
cash ledger of the deductee may be utilized by the deductee towards payment of
his GST liability as a regular taxpayer.
Q 13. How can taxpayers file their returns?
Ans. Taxpayers will have various modes to file the statements and returns. Firstly,
they can file their statement and returns directly on the Common Portal online.
However, this may be tedious and time consuming for taxpayers with large number
of invoices. For such taxpayers, an offline utility will be provided that can be used
for preparing the statements offline after downloading the auto populated details
and uploading them on the Common Portal. GSTN has also developed an ecosys-
tem of GST Suvidha Providers (GSP) that will integrate with the Common Portal.
Q 14. Is it compulsory for a taxpayer to file return by himself?
Ans. No. A registered taxpayer can also get his return filed through a GST Practi-
tioner, duly approved by the Central or the State tax administration.
Q 15. What is the consequence of not filing the return within the prescribed date?
Ans. A registered person who files return beyond the prescribed date will have to
pay late fees of rupees one hundred for every day of delay subject to a maximum
of rupees five thousand. For failure to furnish Annual returns by due date, late fee
of ` One hundred for every day during which such failure continues subject to a
maximum of an amount calculated at a quarter per cent [0.25%] of his turnover
in a state, will be levied.
Q 16. What happens if ITC is taken on the basis of a document more than once?
Ans. In case the system detects ITC being taken on the same document more than
once (duplication of claim), the amount of such credit would be added to the out-
put tax liability of the recipient in the return for the month in which duplication
is communicated. [Section 42(6)]. In other words, the same would be recovered
along with interest.
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Q 17. What is GSTR-3B?

Ans. GSTR-3B is a simplified monthly return that all taxpayers need to file on
monthly basis. It is a summarized return form which every taxpayer is required to
file on self-declaration basis. The same needs to be filed by 20th day of subsequent
month. i.e. for the month of December, 2018 GSTR-3B needs to be filed by 20th
January, 2019 after paying appropriate taxes.
Q 18. Is there any late fees for late filing of GSTR-3B?
Ans. The late fees for filing GSTR-3B for the months of July to September 2017 has
been waived by the Government. Where such late fee was paid, it will be re-credited
to taxpayer’s Electronic Cash Ledger under “Tax” head instead of “Fee” head so as
to enable them to use that amount for discharge of their future tax liabilities. For
subsequent months, i.e. October 2017 onwards, the amount of late fee payable by
a taxpayer whose tax liability for that month was ‘NIL’ will be ` 20 per day (` 10
per day each under CGST & SGST Acts) and will be ` 50 per day (` 25 per day each
under CGST & SGST Acts) for all other taxpayers.
Q 19. How does the taxpayer need to account for Advances in his GSTR-1?
Ans. Where against an advance the invoice is issued in the same tax period, the
advance need not be shown separately in Form GSTR-1 but the specified details of
invoice itself can be directly uploaded on the system. Details of all advances against
which the invoices have not been issued till the end of the tax period shall have
to be reported on a consolidated basis in Table 11 of Form GSTR-1. As and when
the invoices against these advances are issued, they have to be declared in Form
GSTR-1 and the adjustment of the tax paid on advances against the tax payable
on the invoices uploaded in Form GSTR-1 shall have to be done in Table 11 of
Form GSTR-1. It may be noted that in terms of notification 66/2017-Central Tax
dated 15.11.2017, there is no liability to pay tax at the time of receipt of advance
in case of supply of goods.
Q 20. What is an annual return?
Ans. Section 44(1) of CGST Act read with Rule 80(1) of CGST Rules, 2017 requires
that every registered person other than ISD’s, casual/non-resident taxpayers and
TDS/TCS deductors are required to file an annual return in form GSTR-9 for
every financial year.
The composition taxpayers are required to file Annual return in Form GSTR-9A.
Every registered person whose aggregate turnover during a financial year exceeds
two crore rupees shall get his accounts audited as specified under section 35(5) and
he shall furnish a copy of audited annual accounts and a reconciliation statement
is duly certified in FORM GSTR-9C.
There is no threshold limit for annual return. Every registered person is required
to file it on or before the thirty-first day of December following the end of such
financial year.
Q 21. What is the time period for the annual return for which transactions are to
be taken?
Ans. The time period for the annual return is one financial year. This being the first
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year and GST introduced w.e.f. 1st July, 2017, the details for the period between

2019 FAQs 319
July 2017 to March 2018 are to be provided in this return. The dates for the annual
return for this financial year has been extended to 31st March, 2019.
Q 22. Whether annual return is to be filed GSTIN wise or entity wise?
Ans. As per section 44(1) of CGST Act, every registered person is required to file
annual return. Thus, each GSTIN will have to file separate annual return.
Q 23. What is final return? What is the need for it?
Ans. Every registered person whose registration is cancelled needs to file a final
return in GSTR-10 within three months of the date of cancellation or date of order
of cancellation, whichever is later. The purpose of the final return is to ensure that
the taxpayer discharges any liability that he/she may have incurred under section
29(5) of the CGST Act.
As per section 29(5) of the CGST Act, read with rule 20 of the CGST Rules a tax-
payer seeking cancellation of registration has to pay, by way of debiting either
the electronic credit or cash ledger, the input tax contained in the stock of inputs,
semi-finished goods, finished goods and capital goods or the output tax payable
on such goods, whichever is higher. This requirement to debit the electronic credit
and/or cash ledger by suitable amounts should not be a prerequisite for applying
for cancellation of registration. This can also be done at the time of submission of
final return in FORM GSTR-10.
The cancellation of registration does not, in any way, affect the liability of the
taxpayer to pay any dues under the GST law, irrespective of whether such dues
have been determined before or after the date of cancellation
(Section 45 read with rule 81)
Q 24. What if the final return is not filed within 90 days of cancellation of regis-
tration?
Ans. In case the final return in FORM GSTR-10 is not filed within the stipulated
date, then notice in FORM GSTR-3A has to be issued to the taxpayer.
If the taxpayer still fails to file the final return within 15 days of the receipt of
notice in FORM GSTR-3A, then an assessment order (BEST JUDGMENT BASIS)
in FORM GST ASMT-13 under section 62 of the CGST Act read with rule 100 of
the CGST Rules shall have to be issued to determine the liability of the taxpayer
under section 29(5) on the basis of information available with the proper officer.
If the taxpayer files the final return within 30 days of the date of service of the
order in FORM GST ASMT-13, then the said order shall be deemed to have been
withdrawn.
However, the liability for payment of interest and late fee shall continue.
13. Assessment And Audit
Q 1. Who is the person responsible to make assessment of taxes payable under

the Act?
Ans. Every person registered underE-JOURNAL
the Act shall himself assess the tax payable

by him for a tax period and after such assessment he shall file the return required
under section 39. Self-assessment will be the norm under GST.
Q 2. Under what circumstances can provisional assessment be done?
Ans. As a taxpayer has to pay tax on self-assessment basis, a request for paying
tax on provisional basis has to come from the taxpayer which will then have to be
permitted by the proper officer. This is governed by section 60 of CGST Act and
rule 98 of the CGST Rules. Tax can be paid on a provisional basis only after the
proper officer has permitted it through an order passed by him. For this purpose,
the taxable person has to make a written request to the proper officer, giving rea-
sons for payment of tax on a provisional basis. Such a request can be made by the
taxable person only in such cases where he is unable to determine:
(a) the value of goods or services to be supplied by him, or
(b) determine the tax rate applicable to the goods or services to be supplied by
him.
In such cases the taxable person has to execute a bond in the prescribed form, and
with such surety or security as the proper officer may deem fit.
Q 3. In what form and manner should the taxable person make a request for pro-
visional assessment?
Ans. Every registered person requesting for payment of tax on a provisional basis
in accordance with the provisions of section 60(1) shall furnish an application
along with the documents in support of his request, electronically, in FORM GST
ASMT-01 on the common portal. The taxpayer need to specify reasons for seeking
provisional assessment.
Q 4. Can the proper officer ask for additional documents/clarification upon receipt
of request for provisional assessment? If so how? Whether he has to issue any
order for allowing provisional assessment?
Ans. In case the proper officer requires further information or documents, the
proper officer, on receipt of the application should issue a notice in FORM GST
ASMT-02 requiring the registered person to furnish additional information or
documents in support of his request.
The applicant has to file a reply to the notice in FORM GST ASMT-03
The order for provisional assessment has to be issued within ninety days of the
application. The order for provisional assessment has to specify the rate and/or
value, as the case may be, to be applied for by the taxpayer.
Q 5. Is it mandatory for the applicant to appear before the proper officer in such
cases?
Ans. No. However, if the applicant desires, he can appear before the proper officer
in person.
Q 6. In what form and manner will the proper officer issue an order of provisional
assessment?
Ans. The proper officer shall issue an order in FORM GST ASMT-04, allowing
payment of tax on a provisional basis indicating the value or the rate or both on
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the basis of which the assessment is to be allowed on a provisional basis and the

2019 FAQs 321
amount for which the bond is to be executed and security to be furnished not ex-
ceeding twenty-five per cent of the amount covered under the bond.
Q 7. Is there any time limit within which the order for provisional assessment has
to be issued by the proper officer?
Ans. Yes. The order needs to be issued by the proper officer within a period not
later than ninety days from the date of receipt of such request, allowing payment of
tax on provisional basis, at such rate or on such value as may be specified by him.
Q 8. How should the applicant execute the Bond as per directions given in the
order of provisional assessment?
Ans. The applicant should execute a bond in accordance with the provisions of
sub-section (2) of section 60 in FORM GST ASMT-05 along with a security in the
form of a bank guarantee for an amount as determined under sub-rule (3) (i.e.
amount determined in the order of provisional assessment)
Q 9. While executing the bond, is it necessary for the applicant to execute separate
bonds for Central Tax and State Tax?
Ans. No. The bond furnished to the proper officer under the State Goods and Services
Tax Act or Integrated Goods and Services Tax Act shall be deemed to be a bond
furnished under the provisions of the CGST Act and the rules made thereunder.
Q 10. What is the time limit within which the proper officer has to finalize the
provisional assessment?
Ans. Finalisation has to be done by the proper officer within a period of six months
from the date of communication of the order of provisional assessment to the tax-
able person. The period of six months can be extended by a further period of six
months by the Joint/Additional Commissioner and by the Commissioner for such
further period not exceeding four years. However, such extension can be given
only on sufficient cause being shown and for reasons to be recorded in writing.
Q 11. What procedure will the proper officer follow for finalizing the provisional
assessment?
Ans. The proper officer shall issue a notice in FORM GST ASMT-06, calling for
information and records required for finalization of assessment and shall issue a
final assessment order, specifying the amount payable by the registered person or
the amount refundable, if any, in FORM GST ASMT-07.
Q 12. In case the amount of tax determined at the time of final assessment is
higher than the tax paid at the time of provisional assessment, should the taxable
person pay interest on the entire amount of tax (as finalised) from the initial due
date of payment?
Ans. Yes. The registered person shall be liable to pay interest on any tax payable
on the supply of goods or services or both under provisional assessment but not
paid on the due date specified under sub-section (7) of section 39 or the rules made
thereunder, at the rate specified under sub-section (1) of section 50, from the first
day after the due date of payment of tax in respect of the said supply of goods
or services or both till the date of actual payment, whether such amount is paid
before or after the issuance of order for final assessment.
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Q 13. In case, the tax payable on finalisation is less than the tax actually paid at
the time of provisional assessment, how can the taxable person claim refund?
Ans. Where the registered person is entitled to a refund consequent to the order
of final assessment, such person will have to make an application for refund elec-
tronically at the common portal under Section 54 of the Act. The refund claim has
to be filed within 2 years from the date of order of final assessment. The claim for
refund (if it is not a zero rated supply) will have to pass the test of unjust enrichment.
If the refund is not given within 60 days from the date of receipt of refund claim,
interest (@ not exceeding 6%) shall be paid on such refund as provided in section 56.
Q 14. After finalization of assessment, how can the taxable person seek release of
the security furnished at the time of provisional assessment?
Ans. The applicant has to file an application in FORM GST ASMT-08 for release
of security furnished.
Q 15. In what manner and within what time will the security be released in favour
of the applicant?
Ans. The proper officer shall release the security furnished, after ensuring that the
applicant has paid the amount specified in sub-rule (5) and issue an order in FORM
GST ASMT-09 within a period of seven working days from the date of receipt of
the application in FORM GST ASMT-08.
Q 16. In what manner will returns be scrutinized under GST?
Ans. Where any return furnished by a registered person is selected for scrutiny,
the proper officer shall scrutinize the same in accordance with the provisions of
section 61 with reference to the information available with him, and in case of
any discrepancy, he shall issue a notice to the said person in FORM GST ASMT-
10, informing him of such discrepancy and seeking his explanation thereto. Also,
where possible, the proper officer should quantify the amount of tax, interest and
any other amount payable in relation to such discrepancy.
Q 17. What is the time limit for the taxable person to respond to such notice?
Ans. The Taxable person has to respond within 30 days from the date of service
of the notice or such further period as may be permitted by the proper officer.
Q 18. In case the taxable person accepts the discrepancies, how should he comply?
Ans. The registered person may either accept the discrepancy mentioned in the
notice issued under sub-rule (1), and pay the tax, interest and any other amount
arising from such discrepancy and inform the same or furnish an explanation for
the discrepancy in FORM GST ASMT-11 to the proper officer.
Q 19. How will the proper officer deal with reply given in FORM GST ASMT-11
by the taxable person?
Ans. Where the explanation furnished by the registered person or the information
furnished in FORM GST ASMT-11 is found to be acceptable, the proper officer
shall inform him accordingly in FORM GST ASMT-12.
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2019 FAQs 323
Q 20. In case the taxable person does not agree with the discrepancies communi-
cated nor does he pay tax/interest etc. arising out of such discrepancy, what course
of an action the proper officer take?
Ans. In case no satisfactory explanation is furnished within a period of thirty days
of being informed by the proper officer or such further period as may be permitted
by him or where the registered person, after accepting the discrepancies, fails to
take the corrective measure in his return for the month in which the discrepancy is
accepted, the proper officer may initiate appropriate action including those under
section 65 or section 66 or section 67, or proceed to determine the tax and other
dues under section 73 or section 74.
Q 21. How will assessment of non-filers of returns take place under GST?
Ans. Where a registered person fails to furnish a return under section 39 or section
44 or section 45 or Section 52, a notice in FORM GSTR-3A shall be issued, elec-
tronically requiring him to furnish such return within fifteen days.
If within 15 days the returns are not furnished, the proper officer will make an
order of assessment and it shall be issued electronically in FORM GST ASMT-13.
This order of assessment shall be made by the proper officer to the best of his
judgment taking into account all the relevant material which is available or which
he has gathered and issue an assessment order within a period of five years from
the date specified under section 44 for furnishing of the annual return for the
financial year to which the tax not paid relates.
If the registered person furnishes a valid return within thirty days of the service
of FORM GST ASMT-13, the said assessment order shall be deemed to have been
withdrawn but the liability for payment of interest under sub-section (1) of section
50 or for payment of late fee under section 47 shall continue.
Q 22. How will assessment of un-registered persons take place under GST?
Ans. Where a taxable person fails to obtain registration even though liable to do
so or whose registration has been cancelled under sub-section (2) of section 29 but
who was liable to pay tax, the proper officer may proceed to assess the tax liability
of such taxable person to the best of his judgment for the relevant tax periods and
issue an assessment order within a period of five years from the date specified
under section 44 for furnishing of the annual return for the financial year to which
the tax not paid relates:
The proper officer shall issue a notice to a taxable person in accordance with the
provisions of section 63 in FORM GST ASMT-14 containing the grounds on which
the assessment is proposed to be made on best judgment basis and after allowing
a time of fifteen days to such person to furnish his reply, if any, pass an order in
FORM GST ASMT-15.
Q 23. Under what circumstances can a tax officer initiate Summary Assessment?
Ans. As per section 64 of CGST/SGST Act, Summary Assessments can be initiated
to protect the interest of revenue when:
(a) the proper officer has evidence that a taxable person has incurred a liability
to pay tax under the Act, and
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(b) the proper officer believes that delay in passing an assessment order will
adversely affect the interest of revenue.
Such order can be passed after seeking permission from the Additional Commis-
sioner/Joint Commissioner.
Q 24. In what manner will a summary assessment order be issued?
Ans. The order of summary assessment under sub-section (1) of section 64 shall
be issued in FORM GST ASMT-16.
Q 25. Is summary assessment order to be necessarily passed against the taxable
person?
Ans. No. In certain cases, like when goods are under transportation or are stored in
a warehouse, and the taxable person in respect of such goods cannot be ascertained,
the person in charge of such goods shall be deemed to be the taxable person and
will be assessed to tax (proviso to Section 64 of CGST/SGST Act).
Q 26. Other than appellate remedy, is there any other recourse available to the
taxpayer against a summary assessment order?
Ans. A taxable person against whom a summary assessment order has been passed
can apply for its withdrawal to the jurisdictional Additional/Joint Commissioner
within thirty days of the date of receipt of the order. If the said officer finds the
order erroneous, he can withdraw it and direct the proper officer to carry out
determination of tax liability in terms of section 73 or 74 of CGST/SGST Act. The
Additional/Joint Commissioner can follow a similar course of action on his own
motion if he finds the summary assessment order to be erroneous (section 64 of
CGST/SGST Act).
Q 27. How can the taxable person make an application for withdrawal of summary
assessment order?
Ans. The taxable person may file an application for withdrawal of the summary
assessment order in FORM GST ASMT-17.
Q 28. How will the proper officer respond to the request made in FORM GST
ASMT-17?
Ans. The order of withdrawal or, as the case may be, rejection of the application
in FORM GST ASMT-17 shall be issued in FORM GST ASMT-18.
Q 29. Who can conduct audit of taxpayers?
Ans. There are three types of audit prescribed in the GST Act(s) as explained below:
(a) Audit by Chartered Accountant or a Cost Accountant: Every registered per-
son whose turnover exceeds ` two crore, shall get his accounts audited by
a chartered accountant or a cost accountant. (Section 35(5) of the CGST/
SGST Act)
(b) Audit by Department: The Commissioner or any officer of CGST or SGST
or UTGST authorized by him by a general or specific order, may conduct
audit of any registered person. The frequency and manner of audit will be
prescribed in due course. (Section 65 of the CGST/SGST Act)
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(c) Special Audit: If at any stage of scrutiny, inquiry, investigations or any other
proceedings, if department is of the opinion that the value has not been

2019 FAQs 325
correctly declared or credit availed is not with in the normal limits, depart-
ment may order special audit by chartered accountant or cost accountant,
nominated by department. (Section 66 of the CGST/SGST Act)
Q 30. Whether any prior intimation is required before conducting the audit?
Ans. Yes, prior intimation is required and the taxable person should be informed
at least 15 working days prior to conduct of audit.
Q 31. What is the period within which the audit is to be completed?
Ans. The audit is required to be completed within 3 months from the date of com-
mencement of audit. The period is extendable for a further period of a maximum
of 6 months by the Commissioner.
Q 32. What is meant by commencement of audit?
Ans. The term ‘commencement of audit’ is important because audit has to be
completed within a given time frame in reference to this date of commencement.
Commencement of audit means the later of the following:
(a) the date on which the records/accounts called for by the audit authorities
are made available to them, or
(b) the actual institution of audit at the place of business of the taxpayer.
Q 33. What are the obligations of the taxable person when he receives the notice
of audit?
Ans. The taxable person is required to:
(a) facilitate the verification of accounts/records available or requisitioned by
the authorities,
(b) provide such information as the authorities may require for the conduct of
the audit, and
(c) render assistance for timely completion of the audit.
Q 34. What would be the action by the proper officer upon conclusion of the audit?
Ans. The proper officer shall, on conclusion of audit, within 30 days inform the
taxable person about his findings, reasons for findings and the taxable person’s
rights and obligations in respect of such findings.
Q 35. In what manner will an audit under Section 65(1) be conducted?
Ans. The period of audit to be conducted under sub-section (1) of section 65 shall
be a financial year or multiples thereof.
Where it is decided to undertake the audit of a registered person in accordance
with the provisions of section 65, the proper officer shall issue a notice in FORM
GST ADT-01 in accordance with the provisions of sub-section (3) of the said section.
This will be issued at least 15 days prior to the conduct of audit.
The proper officer authorised to conduct audit of the records and books of ac-
count of the registered person shall, with the assistance of the team of officers
and officials accompanying him, verify the documents on the basis of which the
books of account are maintained and the returns and statements furnished under
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the provisions of the Act and the rules made thereunder, the correctness of the
turnover, exemptions and deductions claimed, the rate of tax applied in respect of

supply of goods or services or both, the input tax credit availed and utilised, refund
claimed, and other relevant issues and record the observations in his audit notes.
The proper officer may inform the registered person of the discrepancies noticed, if
any, as observed in the audit and the said person may file his reply and the proper
officer shall finalise the findings of the audit after due consideration of the reply
furnished.
On conclusion of the audit, the proper officer shall inform the findings of audit
to the registered person in accordance with the provisions of sub-section (6) of
section 65 in FORM GST ADT-02.
Q 36. Under what circumstances can a special audit be instituted?
Ans. A special audit can be instituted in limited circumstances where at any stage
of scrutiny, inquiry, investigation or any other proceedings, any officer not below
the rank of Assistant Commissioner, having regard to the nature and complexity
of the case and the interest of revenue is of the opinion that
(i) the value has not been correctly declared or
(ii) the credit availed is not within the normal limits.
Prior approval of commissioner is necessary before ordering special audit.
The chartered accountant or a cost accountant must be nominated by the Com-
missioner.
Q 37. What is the time limit to submit the audit report?
Ans. The auditor will have to submit the report within 90 days or within the further
extended period of 90 days. This can be done by the Commissioner when he is
satisfied that the audit cannot be completed in three months. The reasons for the
same must also be recorded in writing.
Q 38. Who will bear the cost of special audit?
Ans. The expenses for examination and audit including the remuneration payable
to the auditor will be determined and borne by the Commissioner.
Q 39. What action the tax authorities may take after the special audit?
Ans. Based on the findings/observations of the special audit, action can be initiated
under Section 73 or Section 74 of the CGST/SGST Act. The action would also depend
on whether the taxpayer voluntarily pays the requisite tax, interest and penalty.
For instance, in case of fraud/suppression cases, if the taxpayer pays the requisite
tax with 18% interest and 15% penalty, no notice will be issued by department and
proceedings would be concluded.
Post issue of notice, in case he pays the requisite tax, 18% interest and 25% penalty
within 30 days, proceedings shall be concluded.
Post adjudication, in case he pays the requisite tax, 18% interest and 50% penalty
within 30 days of order, proceedings shall be concluded.
Q 40. What if Audit (Departmental/Compulsory audit by CA) is already conducted
or being conducted?
Ans. This audit will be in addition toE-JOURNAL
the audit already conducted under any other

2019 FAQs 327
statute. Section 66(3) overrides provisions of any audit conducted under this act
or any other law.
Q 41. In what form and manner will a special audit be ordered and how will the
result of such audit be communicated to the taxable person?
Ans. Where special audit is required to be conducted in accordance with the provi-
sions of section 66, the officer referred to in the said section shall issue a direction
in FORM GST ADT-03 to the registered person to get his records audited by a
chartered accountant or a cost accountant specified in the said direction.
On conclusion of special audit, the registered person shall be informed of the
findings of special audit in FORM GST ADT-04.
Q 42. When does a taxpayer has to get audited compulsorily?
Ans. Every registered person whose turnover during a financial year exceeds the
prescribed limit of ` two crores has to get his accounts audited by a chartered
accountant or a cost accountant and needs to submit a copy of the
a. audited annual accounts,
b. the reconciliation statement under section 44(2),
c. and such other documents in such form and manner as may be prescribed.
(Sections 35(5), 44(2) of CGST Act, 2018; Rule 80(3) of
CGST Rules, 2018; Form GSTR-9C)
Q 43. Whether the turnover of ` 2 crore needs to be taken All India or State wise?
Ans. Section 35(5) of CGST Act uses the term turnover whereas the relevant Rule
80(3) of CGST Rules uses the expression aggregate turnover. Aggregate turnover
is PAN based while turnover in a State/UT is similarly worded except to the extent
that turnover in a State/UT is limited to a State. Therefore, the word turnover used
in section 35(5) ought to be understood as aggregate turnover and all taxpayers
who had their aggregate turnover exceeding ` 2 crore at PAN India level, should
get their accounts audited from chartered engineer or cost accountant.
13.1 Invoice, Credit and Debit note

Q 44. What is the significance of Tax Invoice under GST?
Ans. An invoice is an important document evidencing supply of goods and services.
It is an important determinant of time of supply i.e. when the liability to pay GST
arises. It is also a mandatory document for the purposes of availing Input Tax Credit.
Q 45. When should a supplier of goods issue a Tax Invoice?
Ans. A registered person supplying taxable goods shall, before or at the time of, —
(a) removal of goods for supply to the recipient, where the supply involves
movement of goods; or
(b) delivery of goods or making available thereof to the recipient, in any other
case,
issue a tax invoice showing the description,
E-JOURNAL quantity and value of goods, the tax
charged thereon and such other particulars as may be prescribed.

Where the goods being sent or taken on approval for sale or return are removed
before the supply takes place, the invoice shall be issued before or at the time of
supply or six months from the date of removal, whichever is earlier.
Q 46. When should a supplier of services issue a Tax Invoice?
Ans. Where the supplier of services is an insurer or a banking company or a finan-
cial institution, including a non-banking financial company, or a telecom operator,
the period within which the invoice or any document in lieu thereof is to be issued
shall be 45 days from the date of supply of service.
Further, if the supplier of services is an insurer or a banking company or a financial
institution, including a non-banking financial company, or a telecom operator, or
any other class of supplier of services as may be notified by the Government on
the recommendations of the Council, making taxable supplies of services between
distinct persons as specified in section 25, it may issue the invoice before or at the
time such supplier records the same in his books of account or before the expiry
of the quarter during which the supply was made.
In all other cases, invoice for supply of service should be issued within a period of
30 days from the date of supply of service.
Q 47. What are the particulars to be mentioned on the invoices which are pre-
scribed by the rules?
Ans. The tax invoice should contain the following particulars
(a) name, address and GSTIN of the supplier;
(b) a consecutive serial number, not exceeding 16 characters, in one or multiple
series, containing alphabets or numerals or special characters’ hyphen or
dash and slash symbolised as “-” and “/” respectively, and any combination
thereof, unique for a financial year;
(c) date of its issue;
(d) name, address and GSTIN or UIN, if registered, of the recipient;
(e) name and address of the recipient and the address of delivery, along with
the name of State and its code, if such recipient is un-registered and where
the value of taxable supply is fifty thousand rupees or more;
(f) HSN code of goods or Accounting Code of services;
(g) description of goods or services;
(h) quantity in case of goods and unit or Unique Quantity Code thereof;
(i) total value of supply of goods or services or both;
(j) taxable value of supply of goods or services or both taking into account
discount or abatement, if any;
(k) rate of tax (Central tax, State tax, Integrated tax, Union territory tax or cess);
(l) amount of tax charged in respect of taxable goods or services (Central tax,
State tax, Integrated tax, Union territory tax or cess);
(m) place of supply along with the name of State, in case of a supply in the course
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of inter-State trade or commerce;

2019 FAQs 329
(n) address of delivery where the same is different from the place of supply;
(o) whether the tax is payable on reverse charge basis; and
(p) signature or digital signature of the supplier or his authorized representative.
Q 48. Are any particular suppliers exempt from any of the above provisions?
Ans. Yes. Where the supplier of taxable service is an insurer or a banking company
or a financial institution, including a non-banking financial company, the said sup-
plier shall issue a tax invoice or any other document in lieu thereof, by whatever
name called, whether or not serially numbered, and whether or not containing
the address of the recipient of taxable service but containing other information
as prescribed under rule 46 of CGST Rules.
Where the supplier of taxable service is a goods transport agency supplying services
in relation to transportation of goods by road in a goods carriage, the said supplier
shall issue a tax invoice or any other document in lieu thereof, by whatever name
called, containing the gross weight of the consignment, name of the consignor
and the consignee, registration number of goods carriage in which the goods are
transported, details of goods transported, details of place of origin and destination,
GSTIN of the person liable for paying tax whether as consignor, consignee or goods
transport agency, and also containing other information as prescribed under rule
46 of CGST Rules.
Where the supplier of taxable service is supplying passenger transportation service,
a tax invoice shall include ticket in any form, by whatever name called, whether or
not serially numbered, and whether or not containing the address of the recipient of
service but containing other information as prescribed under rule 46 of CGST Rules.
Q 49. Are there any special requirements for an invoice meant for export of goods
and/or services?
Ans. Yes. In case of exports of goods or services, the invoice shall carry an en-
dorsement “SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ
DEVELOPER FOR AUTHORISED OPERATIONS ON PAYMENT OF INTEGRAT-
ED TAX” or “SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ
DEVELOPER FOR AUTHORISED OPERATIONS UNDER BOND OR LETTER OF
UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX”, as the case may
be, and shall, in lieu of the details specified in clause (e) of rule 46 of CGST Rules,
contain the following details:
(i) name and address of the recipient;
(ii) address of delivery;
(iii) name of the country of destination.
Q 50. When can a registered person not issue a tax invoice?
Ans. A registered person may not issue a tax invoice if the value of the goods or ser-
vices or both supplied is less than two hundred rupees subject to the condition that
(a) the recipient is not a registered person; and
(b) the recipient does not require such invoice,
and he shall issue a consolidated taxE-JOURNAL
invoice for such supplies at the close of each
day in respect of all such supplies.

Q 51. In what manner, should an invoice be issued?

Ans. (1) The invoice shall be prepared in triplicate, in case of supply of goods, in
the following manner: -
(a) the original copy being marked as ORIGINAL FOR RECIPIENT;
(b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and
(c) the triplicate copy being marked as TRIPLICATE FOR SUPPLIER.
(2) The invoice shall be prepared in duplicate, in case of supply of services, in the
following manner: -
(a) the original copy being marked as ORIGINAL FOR RECIPIENT; and
(b) the duplicate copy being marked as DUPLICATE FOR SUPPLIER.
The serial number of invoices issued during a tax period has to be furnished elec-
tronically through the Common Portal in FORM GSTR-1.
Q 52. What is a Bill of Supply?
Ans. A bill of supply is document which is issued in lieu of a tax invoices. In cases
where it is not mandatory for the supplier to issue an invoice, a bill of supply can
be issued.
Q 53. Who are the persons required to issue a Bill of Supply under GST?
Ans. A registered person supplying exempted goods or services or both or paying
tax under the provisions of section 10 (i.e. a composition taxable person) shall issue,
instead of a tax invoice, a bill of supply.
Q 54. What should be the contents of a Bill of Supply?
Ans. The bill of supply should containing the following particulars:
(b) a consecutive serial number, not exceeding 16 characters, in one or multiple
series, containing alphabets or numerals or special characters -hyphen or
(e) HSN Code of goods or Accounting Code for services;
(f) description of goods or services or both;
(g) value of supply of goods or services or both taking into account discount
or abatement, if any; and
(h) signature or digital signature of the supplier or his authorized representative.
Q 55. Can issue of a bill of supply be dispensed with in any circumstances ?
Ans. Yes. A registered person may not issue a bill of supply if the value of the
goods or services or both supplied is less than two hundred rupees subject to the
condition that
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(a) the recipient is not a registered person; and

2019 FAQs 331
(b) the recipient does not require such bill of supply,

and he shall issue a consolidated bill of supply for such supplies at the close of each
day in respect of all such supplies.
Q 56. What is a receipt voucher?
Ans. A receipt voucher is a document evidencing receipt of advance money towards
a supply of goods and/or services or both.
Q 57. Who has to issue a receipt voucher under GST?
Ans. A registered person, on receipt of advance payment with respect to any supply
of goods or services or both, shall issue a receipt voucher or any other document,
evidencing receipt of such payment.
Q 58. What particulars should be mentioned in the receipt voucher?
Ans. A receipt voucher has to contain the following particulars:
(b) a consecutive serial number containing not exceeding 16 characters, in one
or multiple series, alphabets or numerals or special characters -hyphen or
(e) description of goods or services;
(f) amount of advance taken;
(g) rate of tax (Central tax, State tax, Integrated tax, Union territory tax or cess);
(h) amount of tax charged in respect of taxable goods or services (Central tax,
State tax, Integrated tax, Union territory tax or cess);
(i) place of supply along with the name of State and its code, in case of a supply
in the course of inter-State trade or commerce;
(j) whether the tax is payable on reverse charge basis; and
(k) signature or digital signature of the supplier or his authorized representative.
Q 59. What should be done in case a receipt voucher is issued, but subsequently
no supply takes place?
Ans. Where, on receipt of advance payment with respect to any supply of goods
or services or both the registered person issues a receipt voucher, but subsequent-
ly no supply is made and no tax invoice is issued in pursuance thereof, the said
registered person may issue to the person who had made the payment, a refund
voucher against such payment.
It is important to note that there is no liability to pay GST at the time of receipt of
advance in case of supply of goods.
Q 60. Is a Tax Invoice supposed to be issued only by the supplier of goods/services
under GST?
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Ans. No. In some cases even the recipient has to issue a tax invoice. A registered

person who is liable to pay tax under sub-section (3) or sub-section (4) of section
9 (i.e. where the recipient is liable to discharge GST on reverse charge basis) shall
issue an invoice in respect of goods or services or both received by him from the
supplier on the date of receipt of goods or services or both.
Q 61. What is a payment voucher? When is to be issued?
Ans. A payment voucher is a document evidencing payment of a certain sum of
money to the supplier. Under GST, a registered person who is liable to pay tax un-
der sub-section (3) or sub-section (4) of section 9 (i.e. where the recipient is liable
to discharge GST on reverse charge basis) shall issue a payment voucher at the
time of making payment to the supplier.
Q 62. When should an invoice be issued in case of continuous supply of goods?
Ans. In case of continuous supply of goods, where successive statements of accounts
or successive payments are involved, the invoice shall be issued before or at the
time each such statement is issued or, as the case may be, each such payment is
received.
Q 63. When should an invoice be issue in case of continuous supply of services?
Ans. In case of continuous supply of services,—
(a) where the due date of payment is ascertainable from the contract, the invoice
shall be issued on or before the due date of payment;
(b) where the due date of payment is not ascertainable from the contract, the
invoice shall be issued before or at the time when the supplier of service
receives the payment;
(c) where the payment is linked to the completion of an event, the invoice shall
be issued on or before the date of completion of that event.
Q 64. In case where supply of services ceases under a contract before completion
of the contract, when should an invoice be issued?
Ans. The invoice has to be issued at the time when the supply ceases and such
invoice shall be issued to the extent of the supply made before such cessation.
Q 65. Can an unregistered person collect GST?
Ans. No. A person who is not a registered person shall not collect any amount by
way of tax under this Act in respect of any supply of goods or services or both.
Q 66. Does the term “invoice” include a revised invoice also?
Ans. Yes. The expression “tax invoice” shall include any revised invoice issued by
the supplier in respect of a supply of goods or services or both made earlier.
Q 67. Is it mandatory to show tax amount on every invoice?
Ans. Yes. Where any supply is made for a consideration, every person who is liable
to pay tax for such supply shall prominently indicate in all documents relating to
assessment, tax invoice and other like documents, the amount of tax which shall
form part of the price at which such supply is made.
Q 68. What is a Credit Note?
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Ans. A Credit note is a document evidencing reduction in value of a particular
supply made earlier. Every credit note has to be linked to an invoice issued earlier.

2019 FAQs 333
A credit note enables a supplier to reduce his output tax liability in relation to the
invoice issued earlier.
Q 69. When can a supplier issue a credit note?
Ans. (1) 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 is prescribed under Rules.
(2) Any registered person who issues a credit note in relation to a supply of goods
or services or both shall declare the details of such credit note in the return for
the month during which such credit note has been issued but not later than Sep-
tember following the end of the financial year in which such supply was made, or
the date of furnishing of the relevant annual return, whichever is earlier, and the
tax liability shall be adjusted in the prescribed manner.
Q 70. What is a debit note?
Ans. A debit note is a document evidencing enhancement in value of a particular
supply made earlier. Every debit note has to be linked to an invoice issued earlier.
A debit note enables a recipient to take further Input Tax Credit in relation to the
invoice issued earlier.
Q 71. When can a supplier issue a debit note?
Ans. (1) 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 is prescribed under the rules.
(2) Any registered person who issues a debit note in relation to a supply of goods
or services or both shall declare the details of such debit note in the return for the
month during which such debit note has been issued and the tax liability shall be
adjusted in the prescribed manner.
Q 72. Does the term Debit Note include a supplementary invoice?
Ans. Yes. For the purposes of this Act, the expression “debit note” shall include a
supplementary invoice.
Q 73. What should be the contents of a revised invoice?
Ans. A revised tax invoice, credit or debit note shall contain the following particulars
(a) the word “Revised Invoice”, wherever applicable, indicated prominently;
(b) name, address and GSTIN of the supplier;
(c) nature of the document;
(d) a consecutive serial number not exceeding 16 characters, in one or multiple
series, containing alphabets or numerals or special characters -hyphen or
dash and slash symbolised asE-JOURNAL
“-” and “/” respectively, and any combination

(e) date of issue of the document;

(f) name, address and GSTIN or UIN, if registered, of the recipient;
(g) name and address of the recipient and the address of delivery, along with
the name of State and its code, if such recipient is un-registered;
(h) serial number and date of the corresponding tax invoice or, as the case may
be, bill of supply;
(i) value of taxable supply of goods or services, rate of tax and the amount of
the tax credited or, as the case may be, debited to the recipient; and
(j) signature or digital signature of the supplier or his authorized representative.
Q 74. Can an Input Service Distributor (ISD) issue a Invoice or credit note?
Ans. Yes. An ISD can issue an invoice or credit note.
Q 75. What should be the contents of an ISD Invoice/Credit Note issued by the ISD?
Ans. An ISD invoice or, as the case may be, an ISD credit note issued by an Input
Service Distributor shall contain the following details:-
(a) name, address and GSTIN of the Input Service Distributor;
(b) a consecutive serial number not exceeding 16 characters, in one or multiple
series, containing alphabets or numerals or special characters hyphen or
dash and slash symbolised as, “-”, “/”, respectively, and any combination
(d) name, address and GSTIN of the recipient to whom the credit is distributed;
(e) amount of the credit distributed; and
(f) signature or digital signature of the Input Service Distributor or his autho-
rized representative:
Provided that where the Input Service Distributor is an office of a banking company
or a financial institution, including a non-banking financial company, a tax invoice
shall include any document in lieu thereof, by whatever name called, whether or
not serially numbered but containing the information as prescribed above.
Q 76. Can a registered person having the same PAN as that of ISD issue an invoice/
debit/credit note to the ISD? If so what would be the contents of such an invoice
Ans. Yes.
(1) A registered person, having the same PAN and State code as an Input Service
Distributor, may issue an invoice or, as the case may be, a credit or debit
note to transfer the credit of common input services to the Input Service
Distributor, which shall contain the following details:-
i. name, address and Goods and Services Tax Identification Number
of the registered person having the same PAN and same State code
as the Input Service Distributor;
ii. a consecutive serial number not exceeding sixteen characters, in one
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or multiple series, containing alphabets or numerals or special charac-

2019 FAQs 335
ters -hyphen or dash and slash symbolised as “-” and “/” respectively,
and any combination thereof, unique for a financial year;
iii. date of its issue;
iv. Goods and Services Tax Identification Number of supplier of com-
mon service and original invoice number whose credit is sought to
be transferred to the Input Service Distributor;
v. name, address and Goods and Services Tax Identification Number
of the Input Service Distributor;
vi. taxable value, rate and amount of the credit to be transferred; and
vii. signature or digital signature of the registered person or his authorised
representative.
(2) The taxable value in the invoice issued under clause (1) shall be the same
as the value of the common services.
Q 77. When should delivery challans be issued?
Ans. For the purposes of
(a) supply of liquid gas where the quantity at the time of removal from the
place of business of the supplier is not known,
(b) transportation of goods for job work,
(c) transportation of goods for reasons other than by way of supply, or
(d) such other supplies as may be notified by the Board,
the consigner may issue a delivery challan, serially numbered, not exceeding
16 characters in lieu of invoice at the time of removal of goods for trans-
portation.
Q 78. What should be the contents of the delivery challan?
Ans. The delivery challan should contain the following details
(i) date and number of the delivery challan,
(ii) name, address and GSTIN of the consigner, if registered,
(iii) name, address and GSTIN or UIN of the consignee, if registered,
(iv) HSN code and description of goods,
(v) quantity (provisional, where the exact quantity being supplied is not known),
(vi) taxable value,
(vii) tax rate and tax amount - Central tax, State tax, Integrated tax, Union ter-
ritory tax or cess, where the transportation is for supply to the consignee,
(viii) place of supply, in case of inter-State movement, and
(ix) signature.
Q 79. What is the manner of issuing a delivery challan?
Ans. The delivery challan shall be prepared in triplicate, in case of supply of goods,
in the following manner: -
(a) the original copy being marked as ORIGINAL FOR CONSIGNEE;
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(b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and

(c) the triplicate copy being marked as TRIPLICATE FOR CONSIGNER.

Q 80. When can an invoice cum bill of supply be issued?
Ans. Notwithstanding anything contained in rule 46 or rule 49 or rule 54, where
a registered person is supplying taxable as well as exempted goods or services or
both to an unregistered person, a single “invoice-cum-bill of supply” may be issued
for all such supplies.
Q 81. When should a person in charge of a conveyance be necessarily carrying a
Tax Invoice or a bill of supply?
Ans. The person-in-charge of the conveyance shall carry a copy of the tax invoice
or the bill of supply issued in accordance with the provisions of rule 46, 46A or
49 in a case where such person is not required to carry an e-way bill under CGST
Rules. It may be noted that carrying a tax invoice is compulsory even where car-
rying e-way bill is necessary.
13.2 Accounts and Records under GST

Q 82. Whether every registered person is required to maintain records?
Ans. Yes, every registered person is required to keep and maintain books of ac-
count at his principal place of business. Where more than one place of business
is specified in the certificate of registration, the accounts relating to each place of
business shall be kept at such places of business (Section 35 of the CGST Act, 2017).
Furthermore, the transporters, warehouse keepers are required to maintain records
of consigner, consignee or any relevant details even if they are not registered in
GST. They need to enrol for the purpose.
Q 83. What are the records that a registered person is mandatorily required to
maintain under the GST Act?
Ans. Every registered person should maintain a true and correct account of
(a) production or manufacture of goods;
(b) inward and outward supply of goods or services or both;
(c) stock of goods;
(d) input tax credit availed;
(e) output tax payable and paid; and
(f) such other particulars as may be prescribed.
CGST Rules, 2017 prescribe maintaining records pertaining to goods or
services imported or exported or of supplies attracting payment of tax on
reverse charge along with relevant documents, including invoices, bills of
supply, delivery challans, credit notes, debit notes, receipt vouchers, payment
vouchers, refund vouchers and e-way bills. Every registered person shall
also keep and maintain a separate account of advances received, paid and
adjustments made thereto.
Detailed method of keeping records have been prescribed in rule 56 of CGST
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2019 FAQs 337
Q 84. Where should the registered person keep the records under GST?
Ans. The accounts and records have to be maintained at the place of business
mentioned in the certificate of registration. If more than one place of business
is specified in the certificate of registration, the accounts relating to each place
of business shall be kept at such places of business. (Section 35(1) of CGST Act).
In case of supply of tea, coffee, rubber, etc. where the auctioneer claims ITC in
respect of the supply made to him by the principal before or after the auction of
such goods and the said goods are supplied only through auction, the principal and
the auctioneer may maintain the books of account relating to the additional place(s)
of business at their principal place of business instead of such additional place(s).
Such principal or auctioneer shall intimate their jurisdictional proper officer in
writing about the maintenance of books of account relating to additional place(s)
of business at their principal place of business. (CBIC Circular No. 23/23/2017-GST
dated 21.12.2017 and Circular No. 47/21/2018-GST dated 08.06.2018).
Q 85. Can a registered person maintain the records in electronic form?
Ans. Yes, the records may be maintained in electronic form and the records so
maintained have to be authenticated by means of a digital signature. However,
proper electronic back-up of records is to be maintained and preserved in such
manner that, in the event of destruction of such records due to accidents or natural
causes, the information can be restored within reasonable period of time.
Registered person, on demand, provide the details of such files, passwords of such
files and explanation for codes used, where necessary, for access. (Rules 56(15)
and 57 of the CGST Rules, 2017)
Q 86. For how long (period of time) should the mandatory records be maintained
by the registered person?
Ans. Every registered person required to keep and maintain books of account or
other records in accordance with the provisions of section 35(1) shall retain them
until the expiry of seventy-two months from the due date of furnishing of annual
return for the year pertaining to such accounts and records.
If a registered person is a party to an appeal or revision or any other proceedings
before any Appellate Authority or Revisional Authority or Appellate Tribunal or
court, whether filed by him or by the Commissioner, or is under investigation for
an offence under Chapter XIX, then, he shall retain the books of account and other
records pertaining to the subject matter of such appeal or revision or proceedings
or investigation for a period of one year after final disposal of such appeal or re-
vision or proceedings or investigation, or seventy two months as specified above,
whichever is later. (Section 36 of the CGST Act, 2017)
Q 87. With respect to stock of goods, which records are required to be maintained
by the registered person?
Ans. Every registered person, other than a person paying tax under section 10, shall
maintain accounts of stock in respect of goods received and supplied by him, and
such account shall contain particulars of opening balance, receipt, supply, goods
lost, stolen, destroyed, written off or disposed of by way of gift or free sample and
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balance of stock including raw material, finished goods, scrap and wastage thereof.
(Rule 56(2) of CGST Rules, 2017).

Q 88. Is it necessary for the registered person to keep separate record of advances
received?
Ans. Yes. As per Accounts and records rules, every registered person has to keep
and maintain a separate account of advances received, paid and adjustments made
thereto. (Rule 56(3) of CGST Rules, 2017).
Q 89. Is it necessary for registered persons to maintain details of tax paid and
payable?
Ans. All registered persons except persons opting to pay tax under composition
levy need to maintain such details. As per the rules, every registered person, other
than a person paying tax under section 10, shall keep and maintain an account,
containing the details of tax payable (including tax payable in accordance with the
provisions of sub-section (3) and sub-section (4) of section 9), tax collected and
paid, input tax, input tax credit claimed, together with a register of tax invoice,
credit note, debit notes, delivery challan issued or received during any tax period.
(Rule 56(4) of CGST Rules, 2017)
Q 90. What are the particulars of suppliers that need to be maintained by the
registered person under GST?
Ans. Every registered person shall keep the particulars of -
(a) names and complete addresses of suppliers from whom he has received the
goods or services chargeable to tax under the Act;
(b) names and complete addresses of the persons to whom he has supplied
goods or services, where required under these rules;
(c) the complete address of the premises where goods are stored by him, in-
cluding goods stored during transit along with the particulars of the stock
stored therein. (Rule 56(5) of CGST Rules, 2017)
Q 91. What would be the consequences if the registered person fails to account for
the goods and services in accordance with the provisions of the Act?
Ans. Where the registered person fails to account for the goods or services or
both in accordance with the provisions of section 35(1), the proper officer shall
determine the amount of tax payable on the goods or services or both that are
not accounted for, as if such goods or services or both had been supplied by such
person and the provisions of section 73 or section 74, as the case may be, shall,
mutatis mutandis, apply for determination of such tax. This is however, subject to
the provisions of section 17(5)(h). (Section 35(6) of CGST Act, 2017 read with Rule
56(6) of the CGST Rules, 2017)
Q 92. What are the production accounts, which a manufacturer need to specifically
maintain under GST apart from other records?
Ans. Every registered person manufacturing goods has to maintain monthly pro-
duction accounts, showing quantitative details of raw materials or services used in
the manufacture and quantitative details of the goods so manufactured including
the waste and by products thereof.
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2019 FAQs 339
Q 93. What are the accounts that a service provider need to specially maintain, in
addition to other accounts and records?
Ans. Every registered person supplying services has to maintain the accounts
showing quantitative details of goods used in the provision of services, details of
input services utilised and the services supplied. (Rule 56(13) of CGST Rules, 2017)
Q 94. What are the accounts which a person supplying works contract need to
maintain?
Ans. Every registered person executing works contract has to keep separate ac-
counts for works contract showing -
(a) the names and addresses of the persons on whose behalf the works contract
is executed;
(b) description, value and quantity (wherever applicable) of goods or services
received for the execution of works contract;
(c) description, value and quantity (wherever applicable) of goods or services
utilized in the execution of works contract;
(d) the details of payment received in respect of each works contract; and
(e) the names and addresses of suppliers from whom he received goods or
services. (Rule 56(14) of the CGST Rules, 2017)
Q 95. What are the accounts and records that an Agent need to maintain?
Ans. Every agent referred to in section 2(5) shall maintain accounts depicting the -
(a) particulars of authorization received by him from each principal to receive
or supply goods or services on behalf of such principal separately;
(b) particulars including description, value and quantity (wherever applicable)
of goods or services received on behalf of every principal;
(c) particulars including description, value and quantity (wherever applicable)
of goods or services supplied on behalf of every principal;
(d) details of accounts furnished to every principal; and
(e) tax paid on receipts or on supply of goods or services effected on behalf of
every principal. (Rule 56(11) of the CGST Rules, 2017)
Q 96. What are the records that an owner or operator of warehouse or godown or
transporters need to maintain under GST Rules?
Ans. Every owner or operator of warehouse or godown or any other place used for
storage of goods and every transporter, irrespective of whether he is a registered
person or not, shall maintain records of the consigner, consignee and other relevant
details of the goods in the following manner. (Section 35 of the CGST Act, 2017)
Enrolment, if not already registered in GST: Every such person, if not already
registered under the Act, shall submit the details regarding his business electron-
ically on the Common Portal in FORM GST ENR-01, either directly or through a
Facilitation Centre notified by the Commissioner and, upon validation of the details
furnished, a unique enrolment number shall be generated and communicated to
the said person. E-JOURNAL

The person enrolled as aforesaid in any other State or Union territory shall be
deemed to be enrolled in the State or Union territory.
Every person who is enrolled shall, where required, amend the details furnished in
FORM GST ENR-01 electronically on the Common Portal either directly or through
a Facilitation Centre notified by the Commissioner.
Any person engaged in the business of transporting goods shall maintain records of
goods transported, delivered and goods stored in transit by him along with GSTIN
of the registered consignor and consignee for each of his branches. The transporter
(for the purpose of chapter XVI-E way rules) who is registered in more than one
State or Union Territory having the same Permanent Account Number, he may
apply for a unique common enrolment number by submitting the details in FORM
GST ENR-02 using any one of his Goods and Services Tax Identification Numbers.
Every owner or operator of a warehouse or godown shall maintain books of account
with respect to the period for which particular goods remain in the warehouse,
including the particulars relating to dispatch, movement, receipt, and disposal of
such goods.
The owner or the operator of the godown shall store the goods in such manner that
they can be identified item wise and owner wise and shall facilitate any physical
verification or inspection by the proper officer on demand.
Q 97. What are the records which a person having custody over the goods in the
capacity of a carrier or clearing and forwarding agent need to maintain?
Ans. Any person having custody over the goods in the capacity of a carrier or a
clearing and forwarding agent for delivery or dispatch thereof to a recipient on
behalf of any registered person shall maintain true and correct records in respect
of such goods handled by him on behalf of the such registered person and shall
produce the details thereof as and when required by the proper officer.
Q 98. Is it necessary to show the records and accounts maintained under these
rules to the proper officer?
Ans. Yes. The records need to be shown on Demand. Every registered person shall,
on demand, produce the books of account which he is required to maintain under
any law in force.
The registered person maintaining electronic records shall produce, on demand,
the relevant records or documents, duly authenticated by him, in hard copy or in
any electronically readable format.
Where the accounts and records are stored electronically by any registered per-
son, he shall, on demand, provide the details of such files, passwords of such files
where necessary for access and any other information which is required for such
access along with sample copy in print form of the information stored in such files.
Q 99. Does any competent authority have the power to relax rules in regard to
maintenance of accounts and records?
Ans. Yes. Commissioner in Board (CBIC) is empowered to relax as well as prescribe
additional records for certain classes of taxable persons.
Where the Commissioner considersE-JOURNAL
that any class of taxable persons is not in a
position to keep and maintain accounts in accordance with the provisions of this

2019 FAQs 341
Section, he may, for reasons to be recorded in writing, permit such class of taxable
persons to maintain accounts in such manner as may be prescribed. Similarly,
Commissioner may notify a class of taxable persons to maintain additional ac-
counts or documents for such purpose as may be specified therein. (Section 35(3)
and 35(4) of CGST Act, 2017)
Q 100. How are mistakes in records to be rectified?
Ans. Any entry in registers, accounts and documents shall not be erased, effaced
or overwritten, and all incorrect entries, otherwise than those of clerical nature,
shall be scored out under attestation and thereafter the correct entry shall be
recorded and where the registers and other documents are maintained electroni-
cally, a log of every entry edited or deleted shall be maintained. (Rule 56(8) of the
CGST Rules, 2017)
Q 101. Is it necessary for the registered person to get their accounts audited from
a professional?
Ans. Yes, only cases where the turnover of the registered person exceeds ` 2 crores
during a financial year. Every registered person whose turnover during a financial
year exceeds ` 2 crores shall get his accounts audited by a chartered accountant
or a cost accountant and shall submit a copy of the audited annual accounts, the
reconciliation statement under section 44(2) (FORM GSTR-9C) and such other
documents in such form and manner as may be prescribed.
Q 102. In case books of account are maintained manually, it is necessary to serially
number the books of account?
Ans. Yes. Each volume of books of account maintained manually by the registered
person shall be serially numbered.
Q 103. Who will be responsible for keeping proper for the inputs or capital goods
sent to Job-worker?
Ans. The responsibility for keeping proper accounts for the inputs or capital goods
shall lie with the principal.
13.3 E-Way bill

Q 104. What is an E-Way Bill?
Ans. E-way bill (FORM GST EWB-01) is an electronic document (available to
consignor (i.e. supplier)/consignee (i.e. recipient)/transporter) generated on the
common portal evidencing movement of goods of consignment value more than
` 50000/-. It has two Components - (i) Part A comprising of details of GSTIN of
supplier and - recipient, place of despatch (indicated by PIN code), place of de-
livery (indicating PIN Code also), document (Tax invoice, Bill of Supply, Delivery
Challan or Bill of Entry) number and date, value of goods, HSN code, and reasons
for transportation; and (ii) Part B-comprising of transport details - transport docu-
ment number (Goods Receipt Number or Railway Receipt Number or Airway Bill
Number or Bill of Lading Number) and Vehicle number for road.
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Q 105. What is the common portal for e-way bill?

Ans. The Common Goods and Services Tax Electronic Portal for furnishing elec-
tronic way bill is www.ewaybillgst.gov.in.
Q 106. What is consignment value?
Ans. The consignment value of goods shall be the value, determined in accordance
with the provisions of section 15 of the CGST Act, 2017, declared in an invoice, a
bill of supply or a delivery challan, as the case may be, issued in respect of the said
consignment and also includes the Central tax, State or Union territory tax, Inte-
grated tax and cess charged, if any, in the document, and shall exclude the value
of exempt supply of goods where the invoice is issued in respect of both exempt
and taxable supply of goods.
Q 107. Whether consignment value of goods shall include tax also? In case of
movement other than by way of supply, value may not be available. How to value
such cases?
Ans. As per Explanation 2 to Rule 138(1) of CGST Rules, 2017, the consignment
value shall also include the Central tax, State or Union territory tax, Integrated tax
and cess charged, if any, in the document. Furthermore, in view of the valuation
provisions in Section 15 of the CGST Act, 2017, Customs duty shall also be inclu-
dible in the value of goods.
In case of movement of goods for reasons other than supply, the movement would
be occasioned by means of a delivery challan which is a mandatory document.
The delivery challan has to necessarily contain the value of goods as per Rule 55
of the CGST Rules, 2017. The value given in the delivery challan should be adopted
in the e-way bill.
Q 108. What are the benefits of e-way bill?
Ans. Following benefits are expected from e-way bill mechanism
(i) Physical interface to pave way for digital interface resulting in elimination
of state boundary check-posts.
(ii) It will facilitate faster movement of goods.
(iii) It will improve the turnaround time of trucks and help the logistics industry
by increasing the average distances travelled, reducing the travel time as
well as costs.
(iv) The consignor needs to give details of consignee also. This would ensure
more transparency among all stakeholders of the system.
Q 109. When the e-way bill provisions were implemented?
Ans. The e-way bill provisions in respect of inter-state supplies of goods were im-
plemented w.e.f. 1st April, 2018. Whereas for all movement of goods (i.e. inter and
intra-State both), e-way bill provisions were made effective from 1st June 2018.
Q 110. When should an e-way bill be generated?
Ans. As per Rule 138 of the CGST Rules, 2017, an e-way bill has to be generated
prior to the commencement of movement of goods.
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2019 FAQs 343
Q 111. Whether E-way bill need to be generated for all movements of goods?
Ans. E-way bill is not required to be generated in the following cases:
(a) transport of goods as specified in Annexure to Rule 138 of the CGST Rules,
2017 which is reproduced below:
Sl. No. Description of Goods

1 Liquefied petroleum gas for supply to household and non-domestic
exempted category (NDEC) customers
2 Kerosene oil sold under PDS
3 Postal baggage transported by Department of Posts
4 Natural or cultured pearls and precious or semi-precious stones;
precious metals and metals clad with precious metal (Chapter 71)
5 Jewellery, goldsmiths’ and silversmiths’ wares and other articles
(Chapter 71)
6 Currency
7 Used personal and household effects
8 Coral, unworked (0508) and worked coral (9601)
(b) goods being transported by a non-motorised conveyance;
(c) goods being transported from the port, airport, air cargo complex and land
customs station to an inland container depot or a container freight station
for clearance by Customs;
(d) in respect of movement of goods within such areas as are notified under
rule 138(14)(d) of the SGST Rules, 2017 of the concerned State;
(e) where the goods, other than de-oiled cake, being transported are specified in
the Schedule appended to notification No. 2/2017- Central tax (Rate) dated
the 28th June, 2017;
(f) where the goods being transported are alcoholic liquor for human consump-
tion, petroleum crude, high speed diesel, motor spirit (commonly known as
petrol), natural gas or aviation turbine fuel;
(g) where the goods being transported are treated as no supply under Schedule
III of the Act;
(h) where the goods are being transported— (i) under customs bond from an
inland container depot or a container freight station to a customs port,
airport, air cargo complex and land customs station, or from one customs
station or customs port to another customs station or customs port, or (ii)
under customs supervision or under customs seal;
(i) where the goods being transported are transit cargo from or to Nepal or
Bhutan;
(j) where the goods being transported are exempt from tax under notifications
No. 7/2017-Central Tax (Rate), dated 28.06.2017 and No. 26/2017-Central
Tax (Rate), dated the 21.09.2017;
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(k) any movement of goods caused by defence formation under Ministry of

defence as a consignor or consignee;
(l) where the consignor of goods is the Central Government, Government of
any State or a local authority for transport of goods by rail;
(m) where empty cargo containers are being transported; and
(n) where the goods are being transported up to a distance of twenty kilome-
tres from the place of the business of the consignor to a weighbridge for
weighment or from the weighbridge back to the place of the business of
the said consignor subject to the condition that the movement of goods is
accompanied by a delivery challan issued in accordance with rule 55.
Q 112. Whether an e-way bill is to be issued, even when there is no supply?
Ans. Yes. Even if the movement of goods is caused due to reasons others than
supply, the e-way bill is required to be issued. Reasons other than supply include
movement of goods due to job-work, replacement under warranty, recipient not
known, supply of liquid gas where quantity is not known, supply returns, exhibition
or fairs, for own use, Sale on approval basis and others etc.
Q 113. Who should generate e-way bill?
Ans. An e-way bill contains two parts- Part A to be furnished by the registered
person who is causing movement of goods of consignment value exceeding
` 50,000/- and part B (transport details) is to be furnished by the person who is
transporting the goods.
Where the goods are transported by a registered person-whether as consignor
or recipient, the said person shall have to generate the e-way bill (by furnishing
information in part B on the common portal). Where the e-way is not generated by
registered person and the goods are handed over to the transporter, for transporta-
tion of goods by road, the registered person shall furnish the information relating
to the transporter in Part B of FORM GST EWB-01 on the common portal and the
e-way bill shall be generated by the transporter on the said portal on the basis of the
information furnished by the registered person in Part A of FORM GST EWB-01.
In a nutshell, E-way bill is to be generated by the consignor or consignee himself
(if the transportation is being done in own/hired conveyance or by railways by air
or by Vessel) or the transporter (if the goods are handed over to a transporter for
transportation by road). In case the goods to be transported are supplied through
an e-commerce operator, the information in Part A may be furnished by such
ecommerce operator.
Q 114. Who has to generate E-way bill in case of transportation of goods by rail,
air or vessel?
Ans. The registered person, being the supplier or recipient, is required to generate
E-way Bill by furnishing the information in part B of the E-Way bill viz. transport
document number (Goods Receipt Number or Railway Receipt Number or Airway
Bill Number or Bill of Lading Number).
Q 115. Who causes movement of goods?
Ans. The movement of goods can beE-JOURNAL
caused by the supplier, if he is registered and

2019 FAQs 345
he undertakes to transport the goods. In case the recipient undertakes to transport

or arrange transport, the movement would be caused by him.
In case the goods are supplied by an unregistered supplier to a recipient who is
registered, the movement shall be said to be caused by such recipient if the recipient
is known at the time of commencement of the movement of goods.
Q 116. Is there any time gap allowed between furnishing information in Part-A
and updating transport details in Part-B?
Ans. On furnishing of Part-A, a unique number will be generated on the portal
which shall be valid for 15 days for updating of Part B of FORM GST EWB-01.
Q 117. Is it mandatory to generate e-way bill? What if not done? What are the
consequences for non-issuance of e-way bill?
Ans. It is mandatory to generate e-way bill in all cases where the value of consign-
ment of goods being transported is more than ` 50,000/- and it is not otherwise
exempted in terms of Rule 138(14) of CGST Rules, 2017.
Further no e-way bill is required to be generated in respect of goods being trans-
ported by a non-motorised conveyance; goods being transported from the port,
airport, air cargo complex and land customs station to an inland container depot or
a container freight station for clearance by Customs; and in respect of movement
of goods within such areas as are notified under rule 138(14) (d) of the SGST Rules,
2017 of the concerned State.
If e-way bills, wherever required, are not issued in accordance with the provisions
contained in Rule 138, the same will be considered as contravention of rules. As
per Section 122(1)(xiv) of CGST Act, 2017, a taxable person who transports any
taxable goods without the cover of specified documents (e-way bill is one of the
specified documents) shall be liable to a penalty of ` 10,000/- or tax sought to be
evaded (wherever applicable) whichever is greater. Moreover, as per Section 129(1)
of CGST Act, 2017, where any person transports any goods or stores any goods
while they are in transit in contravention of the provisions of this Act or the Rules
made thereunder, all such goods and conveyance used as a means of transport
for carrying the said goods and documents relating to such goods and conveyance
shall be liable to detention or seizure.
Q 118. Is e-way bill required when the goods are supplied by an unregistered supplier?
Ans. Where the goods are supplied by an unregistered supplier to a recipient who is
registered, the movement shall be said to be caused by such recipient if the recip-
ient is known at the time of commencement of movement of goods. The recipient
shall be liable to generate e-way bill.
There could be three possibilities as below:
Situation Movement caused by Impact

Recipient is un- Unregistered person E-way bill not required;
known However, the supplier has an option
to generate e-way bill under “citizen”
option on the e-way bill portal
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Situation Movement caused by Impact

Recipient is known Unregistered person E-way bill not required;
and is unregistered However, the supplier has an option
to generate e-way bill under “citizen”
option on the e-way bill portal
Recipient is known Deemed to be caused by Recipient to generate e-way bill
and is registered the Registered recipient
Q 119. What are the reasons for transportation to be furnished in the part A of
e-way bill?
Ans. E-way bill is to be issued for movement of goods, irrespective of the fact
whether the movement of goods is caused by reasons of supply or otherwise. The
format for GST EWB-01 lists ten reasons for transportation viz. Supply, Export or
Import, Job Work, SKD or CKD, Recipient not known, Line Sales, Sales Return,
Exhibition or fairs, for own use and Others, one of which can be chosen.
Q 120. Whether an unregistered transporter need to compulsorily enroll on the
e-way bill system?
Ans. Yes, in terms of Rule 58 of the CGST Rules, 2017 read with section 35(2) of
the CGST Act, 2017, a transporter and operator of godown or warehouse, if not
already registered, shall have to enrol on the common portal by filing GST ENR-01.
The transporter enrolled in any one State or UT shall be deemed to be enrolled in
other States as well.
The unregistered transporter gets a transporter Id when he enrols on the system.
Q 121. What is invoice reference number?
Ans. A registered person may obtain an Invoice Reference Number from the com-
mon portal by uploading, on the said portal, a tax invoice issued by him in FORM
GST INV-1 and produce the same for verification by the proper officer in lieu of
the tax invoice and such number shall be valid for a period of thirty days from
the date of uploading.
In the above case, the registered person will not have to upload the information in
Part A of FORM GST EWB-01 for generation of e-way bill and the same shall be
auto-populated by the common portal on the basis of the information furnished
in FORM GST INV-1.
Q 122. Can the e-way bill be cancelled if the goods are not transported after gen-
eration of e-way bill?
Ans. Where an e-way bill has been generated, but goods are either not being
transported or are not being transported as per the details furnished in the e-way
bill, the e-way bill may be cancelled electronically on the common portal, either
directly or through a Facilitation Centre notified by the Commissioner, within 24
hours of generation of the e-way bill.
However, if the e-way has been verified in transit in accordance with the provisions
of rule 138B of the CGST Rules, 2017, the same cannot be cancelled.
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2019 FAQs 347
Q 123. What happens if the conveyance is changed en-route?

Ans. Where the goods are transferred from one conveyance to another, the con-
signer or the recipient, who has provided information in Part- A of the FORM GST
EWB-01, or the transporter shall, before such transfer and further movement of
goods, update the details of conveyance in the e-way bill on the common portal
in FORM GST EWB-01.
Any transporter transferring goods from one conveyance to another in the course
of transit shall, before such transfer and further movement of goods, update the
details of the conveyance in the e-way bill on the common portal in FORM GST
EWB-01.
Q 124. Can the transporter assigned by a supplier or recipient further re-assign the
e-way bill to another transporter?
Ans. The consignor or the recipient, who has furnished the information in Part-A,
or the transporter, may assign the e-way bill number to another registered or en-
rolled transporter for updating the information in Part-B for further movement
of consignment.
However once the details of the conveyance have been updated by the transporter
in Part B of FORM GST EWB-01, the consignor or recipient, as the case may be,
who has furnished the information in Part-A of FORM GST EWB-01 shall not be
allowed to assign the e-way bill number to another transporter.
Q 125. How does transporter come to know that particular e-way bill has been
assigned to him?
Ans. The transporter comes to know the EWBs assigned to him by the taxpayers
for transportation, in one of the following ways:
u The transporter can go to reports section and select ‘EWB assigned to me
for trans’ and see the list.
u The transporter can go to ‘Update Vehicle No.’ and select ‘Generator GSTIN’
option and enter taxpayer GSTIN, who has assigned or likely to assign the
EWBs to him.
u The taxpayer can contact and inform the transporter that the particular
EWB is assigned to him.
Q 126. How does the supplier or recipient come to know about the e-way bills
generated on his GSTIN by other person/party?
Ans. The supplier or the recipient can view the same from either of the following
options:
u He can view on his dashboard, after logging on to the system;
u He can go to reject option and select date and see the e-way bills generated
on his GSTIN by others.
u He can go to report section and see the ‘EWBs by other parties’.
u He will get one SMS everyday indicating the total e-way bill activities on his
GSTIN.
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Q 127. How does the taxpayer become transporter in the e-way bill system?
Ans. To change his position from supplier or recipient to transporter, the taxpayer
has to select the option ‘Register as Transporter’ under registration and update his
profile. Once it is done, the system changes taxpayer as transporter.
Q 128. How many times can Part-B or Vehicle number be updated for an e-way bill?
Ans. The Part-B (Vehicle details) can be updated as many times as one wants for
movement of goods to the destination. However, the updating should be done
within the validity period and at any given point of time, the vehicle number up-
dated should be that of the one which is actually carrying the goods. The validity
of e-way bill is not re-calculated for subsequent entries in Part-B.
Q 129. What is the concept of acceptance of e-way bill by the recipient?
Ans. The details of e-way bill generated shall be made available to the-
(a) supplier, if registered, where the information in Part A of FORM GST EWB-
01 has been furnished by the recipient or the transporter; or
(b) recipient, if registered, where the information in Part A of FORM GST EWB-
01 has been furnished by the supplier or the transporter,
on the common portal, and the supplier or the recipient, as the case maybe,
shall communicate his acceptance or rejection of the consignment covered
by the e-way bill.
In case, the person to whom the information in Part-A is made available, does not
communicate his acceptance or rejection within seventy-two hours of the details
being made available to him on the common portal, it shall be deemed that he has
accepted the said details.
Q 130. What happens if multiple consignments are transported in one conveyance?
Ans. Where multiple consignments are intended to be transported in one con-
veyance, the transporter may indicate the serial number of e-way bills generated
in respect of each such consignment electronically on the common portal and a
consolidated e-way bill in FORM GST EWB-02 may be generated by him on the
common portal prior to the movement of goods.
The various situations where multiple consignments are transported in one con-
veyance may be as under:
Situation Impact
Multiple consignments in one conveyance; A consolidated e-way bill in FORM GST
all more than ` 50,000/-; and the consignor EWB-02 may be generated on the common
has generated e-way bill for all the con- portal prior to the movement
signments.
Multiple consignments in one conveyance; The relevant provision 138(7) has not been
all more than ` 50,000/-; but the consignor brought into force as of now, so e-way bill
has not generated e-way bill not required to be generated by transporter
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2019 FAQs 349
Situation Impact
Multiple consignments in one conveyance; The relevant provision 138(7) has not been
a few less than ` 50,000/- and e-way bill brought into force as of now, so e-way bill
not generated for these consignments (less not required to be generated by transporter
than ` 50,000/-)
Q 131. Many distributors transport goods of multiple customers and know the
details of the requirement only at the time of delivery? What to do if name of the
consignee is not known?
Ans. Such movement of goods would be for reasons other than supply. The rea-
sons for transportation will have to be mentioned in the Part A of the e-way bill.
Q 132. What is the validity period of e-way bill?
Ans. The validity of e-way bill remains valid for a time period which is based on
distance to be travelled by the goods as below:
Distance Validity Period

Up to 100 Km One day in cases other than Over Dimensional Cargo
For every 100 km or part One additional day in cases other than Over Dimensional
thereof thereafter Cargo
Up to 20 km One day in case of Over Dimensional Cargo
For every 20 km. or part One additional day in case of Over Dimensional Cargo
thereof thereafter
Q 133. What is a day for e-way bill? How to count hours/day in e-way bill?
Ans. This has been explained in Rule 138(10) of CGST Rules, 2017. The term “rel-
evant date” shall mean the date on which the e-way bill has been generated and
the period of validity shall be counted from the time at which the e-way bill has
been generated and each day shall be counted as the period expiring at midnight
of the day immediately following the date of generation of e-way bill.
Q 134. Can the validity period of e-way bill be extended?
Ans. In general No. However, Commissioner may extend the validity period only
by way of issuance of a notification for certain categories of goods which shall be
specified later.
Also, if under circumstances of an exceptional nature, the goods cannot be trans-
ported within the validity period of the e-way bill, the transporter may generate
another e-way bill after updating the details in Part B of FORM GST EWB-01.
Q 135. What is the validity period of consolidated e-way bill?
Ans. A consolidated e-way bill has no separate validity and will be governed by the
underlying validity period of the individual e-way bills.
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Q 136. Can a e-way bill be modified?

Ans. No. Part-A of an e-way bill once generated, cannot be modified. However,
Part-B can be updated as many times as the transport vehicle is changed within
the overall validity period. The validity period is not changed when the Part-B is
updated.
Q 137. Is it necessary to feed information and generate e-way bill electronically
in the common portal?
Ans. Yes. The facility of generation and cancellation of e-way bill is also available
through SMS.
Q 138. What is EBN? Who gives it?
Ans. Upon generation of the e-way bill on the common portal, a unique e-way
bill number (EBN) shall be made available to the supplier, the recipient and the
transporter on the common portal. The common portal will generate the EBN.
Q 139. Whether e-way bill generated in one state is valid in another state?
Ans. Yes, it is valid throughout the country.
Q 140. What if one consignment, is transported in CKD/SKD condition in multiple
transport vehicles?
Ans. As per Rule 55(5) of the CGST Rules, 2017, in such cases, the supplier shall
issue the complete invoice before dispatch of the first consignment and shall issue
a delivery challan for each of the subsequent consignments, giving reference of
the invoice. Each such subsequent consignment shall be accompanied by copies of
the corresponding delivery challan along with a duly certified copy of the invoice;
and the original copy of the invoice shall be sent along with the last consignment.
Every consignment shall also be accompanied with a separate e-way bill.
Q 141. Can a transport vehicle be intercepted?
Ans. Yes, the Commissioner or an officer empowered by him in this behalf may
authorise the proper officer to intercept any conveyance to verify the e-way bill
or the e-way bill number in physical form for all inter-State and intra-State move-
ment of goods.
Physical verification of a specific conveyance can also be carried out by any offi-
cer, on receipt of specific information on evasion of tax, after obtaining necessary
approval of the Commissioner or an officer authorised by him in this behalf.
Q 142. Are there any checks and balances on excessive use of power of interception
of vehicles and inspection of goods?
Ans. A summary report of every inspection of goods in transit shall be recorded
online on the common portal by the proper officer in Part A of FORM GST EWB-
03 within twenty-four hours of inspection and the final report in Part B of FORM
GST EWB-03 shall be recorded within three days of such inspection.
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Once physical verification of goods being transported on any conveyance has
been done during transit at one place within the State or in any other State, no

2019 FAQs 351
further physical verification of the said conveyance shall be carried out again in
the State, unless a specific information relating to evasion of tax is made available
subsequently.
Where a vehicle has been intercepted and detained for a period exceeding thirty
minutes, the transporter may upload the said information in FORM GST EWB-04
on the common portal.
Q 143. What is the responsibility of transporters, owners or operators of godown
or warehouse?
Ans. As per section 35(2) of the CGST Act, 2017, every owner or operator of ware-
house or godown or any other place used for storage of goods and every transporter,
irrespective of whether he is a registered person or not, shall maintain records of
the consigner, consignee and other relevant details of the goods in such manner
as prescribed in rule 58 of the CGST Rules, 2017.
Q 144. What has to be done by the transporter if consignee refuses to take goods
or rejects the goods?
Ans. The transporter can get one more e-way bill generated with the help of suppli-
er or recipient by indicating supply as ‘Sales Return’ and with relevant document
details and return the goods to supplier.
Q 145. What are the documents to be carried by the person in charge of a convey-
ance while transporting goods?
Ans. The person in charge of a conveyance shall carry—
(a) the invoice or bill of supply or delivery challan, as the case may be; and
(b) a copy of the e-way bill or the e-way bill number, either physically or mapped
to a Radio Frequency Identification Device (RFID) embedded on to the
conveyance in such manner as may be notified by the Commissioner.
Q 146. What are RFIDs?
Ans. RFIDs are Radio Frequency Identification Device used for identification. The
Commissioner may require RFIDs to be embedded on to the conveyance in such
manner as may be notified. The Commissioner shall get RFID readers installed
at places where the verification of movement of goods is required to be carried
out and verification of movement of vehicles shall be done through such device
readers where the e-way bill has been mapped with the said device.
Q 147. Is it necessary that the e-way bill has to be mapped to a RFID device?
Ans. It is optional. However, the Commissioner may, by notification, require a class
of transporters to obtain a unique Radio Frequency Identification Device and get
the said device embedded on to the conveyance and map the e-way bill to the Radio
Frequency Identification Device prior to the movement of goods.
Q 148. Are there any special situations where e-way bill needs to be issued even if
than ` 50,000/-?
the value of the consignment is lessE-JOURNAL

Ans. As per the provisos to Rule 138(1) of CGST Rules, 2017, where goods are sent
by a principal located in one State to a job worker located in any other State, the
e-way bill shall have to be generated by the principal irrespective of the value of
the consignment. Also, where handicraft goods are being transported from one
State to another by a person who has been exempted from the requirement of
obtaining registration, the e-way bill shall have to be generated by the said person
irrespective of the value of the consignment.
Q 149. Can a taxpayer update his business name, address, mobile number or e-mail
id in the e-way bill system?
Ans. No. EWB System will not allow taxpayer to update these details directly. The
taxpayer has to change these details at GST Common portal, from where it will
be updated in EWB system.
Q 150. What are the modes of e-way bill generation?
Ans. The e-way bill can be generated through multiple modes viz. the common
portal for e-way bill or Using SMS based facility or Android App or Site-to-Site
integration or GSP (Goods and Services Tax Suvidha Provider).
For using the SMS facility, a person has to register the mobile numbers through
which he wants to generate the e-way bill on the e-way bill system.
For using Android App, the taxpayer has to register the IMEI numbers of the mo-
biles through which he wants to generate the e-way bill on the e-way bill system.
For site to site integration, the APIs of the e-way bill system have to be used for
integrating the system.
Q 151. What is the role of sub-users in e-way bill system? How can sub-users be
activated?
Ans. A taxpayer can create sub-users in the e-way bill system and assign specific
roles to them like generation of EWB or rejection or report generation activities
based on requirements. This helps the large firms with multi locations/shifts to
distribute work.
Q 152. Whether information submitted for e-way bill can be used for filing GST
Returns?
Ans. The information furnished in the Part-A of E-way bill shall be made available
to the registered supplier on the common portal who may utilize the same for
furnishing details in GSTR-1.
Q 153. Whether individuals while shifting their personal belongings will have to
generate E-way bill?
Ans. No. Used personal and household effects are specifically exempted from the
requirement of E-way Bill as explained in Q 8 above.
Q 154. Consider a situation where a consignor is required to move goods from City
X to City Z. He appoints Transporter A for movement of his goods. Transporter
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A moves the goods from City X to City Y. For completing the movement of goods
i.e. from City Y to City Z, Transporter A now hands over the goods to Transporter
2019 FAQs 353
B. Thereafter, the goods are moved to the destination i.e. from City Y to City Z by
Transporter B. How would the e-way bill be generated in such situations?
Ans. In such a scenario, only one e-way bill would be required. PART A of Form
GST EWB-01 can be filled by the consignor and then the e-way bill will be assigned
by the consignor to Transporter A.
Transporter A will fill the vehicle details, etc. in PART B of Form GST EWB-01and
will move the goods from City X to City Y. On reaching City Y, Transporter A will
assign the said e-way bill to the Transporter B. Thereafter, Transporter B will be
able to update the details of PART B. Transporter B will fill the details of his vehicle
and move the goods from City Y to City Z.
Q 155. Consider a situation where a Consignor hands over his goods for transpor-
tation on Friday to transporter. But, the assigned transporter starts the movement
of goods on Monday. How would the validity of e-way bill be calculated in such
situations?
Ans. The validity period of e-way bill starts only after the details in PART B of
FORM GST EWB-01 are updated by the transporter for the first time.
Q 156. Where an invoice is in respect of both goods and services, whether the con-
signment value should be based on the invoice value (inclusive of value of services)
or only on the value of goods. Further, whether HSN wise details of service is also
required to be captured in Part A of the e-way bill in such case?
Ans. Consignment value and HSN needs to be determined for goods only not for
services as only the goods are in movement and e-way bill needs to be generated
accordingly.
Q 157. What should be the value in e-way bill in case goods are sent on lease basis
as the value of machine is much higher than leasing charges?
Ans. The value of goods needs to be mentioned as per the explanation 2 of the
sub-rule (1) of rule 138.
Q 158. How to handle “Bill to” - “Ship to” invoice in e-way bill system?
Ans. In the e-way bill form, there are two portions under ‘TO’ section. In the left
hand side - ‘Billing to’ GSTIN and trade name is entered and in the right hand side
- ‘Ship to’ address of the destination of the movement is entered. The other details
are entered as per the invoice.
In case ship to state is different from Bill to State, the tax components are entered
as per the billing state party. That is, if the Bill to location is inter-State for the
supplier, IGST is entered and if the Bill to Party location is intra-State for the sup-
plier, the SGST and CGST are entered irrespective of movement of goods whether
movement happened within state or outside the state.
Q 159. What form of e-way bill - original printout or soft copy need to be carried
by the transporter?
Ans. An e-way bill number may be available with the person in charge of the con-
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veyance or in the form of a printout, sms or it may be written on an invoice. All
these forms of having an e-way bill are valid.

14. Refunds
Q 1. What are the situations which may give rise to refund under GST?
Ans. A claim for refund may arise on account of-
1. Export of Goods or services on payment of tax
2. Supply of goods or services to SEZs units and developers on payment of
tax
3. Export of Goods or services under Bond/Letter of Undertaking, without
payment of tax
4. Supply of goods or services to SEZs units and developers under Bond/Letter
of Undertaking, without payment of tax
5. Deemed Exports (refund available to both supplier and recipient)
6. Refund of taxes on purchase made by UN Agencies, Embassies etc
7. Refund arising on account of judgment, decree, order or direction of the
Appellate Authority, Appellate Tribunal or any court
8. Refund of accumulated Input Tax Credit on account of inverted duty struc-
ture
9. Finalisation of provisional assessment
10. Excess balance in electronic cash ledger
11. Excess payment of tax
12. Refunds to International tourists of GST paid on goods in India and carried
abroad at the time of their departure from India (not yet operationalized)
13. Refund on account of tax paid on a supply which is not provided, either
wholly or partially, and for which invoice has not been issued (tax paid on
advance payment)
14. Refund of CGST & SGST paid by treating the supply as intra-State supply
which is subsequently held as inter-State supply and vice versa.
15. Refund to CSD Canteens.
The list is only indicative and not exhaustive.
Q 2. Whether Provisional Refund is allowable for all refunds under GST?
Ans. No. Section 54(6) of CGST Act provides for grant of provisional refund of 90%
of the total refund claim, in case the claim relates to refund arising on account of
zero rated supplies. Thus only refund claims where refund arises on account of
zero rated supply will be entitled to provisional refund.
Q 3. Which supplies would be considered as zero rated?
Ans. In terms of Section 16(1) of IGST Act, following supplies are considered as
zero rated (a) export of goods or services or both; or
(b) supply of goods or services or both to a Special Economic Zone developer or
a Special Economic Zone unit.
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2019 FAQs 355
Q 4. The GST Law allows exports to be made under a LUT in all cases. Is this
statement true or false?
Ans. The facility of export under LUT is available to all exporters in terms of no-
tification No. 37/2017- Central Tax dated 4th October, 2017, except to those who
have been prosecuted for any offence under the CGST Act or the IGST Act or any
of the existing laws in force in a case where the amount of tax evaded exceeds
two hundred and fifty lakh rupees. Para 2(d) of the Circular No. 8/8/2017-GST
dated 4th October, 2017, mentions that a person intending to export under LUT is
required to give a self-declaration at the time of submission of LUT that he has not
been prosecuted. Persons who are not eligible to export under LUT are required
to export under bond/bank guarantee.
Q 5. What is the time limit within which provisional refund has to be sanctioned
by the proper officer?
Ans. The provisional refund has to be sanctioned within 7 days from date of ac-
knowledgement.
Q 6. Can refund of Transitional Credit be claimed as refund of accumulated ITC?
Ans. No. Refund of accumulated ITC is given based on a formula which uses the
phrase ‘Net ITC’ and defines the same as “input tax credit availed on inputs and
input services during the relevant period other than the input tax credit availed for
which refund is claimed under sub-rule (4A) or (4B) or both”. Since the transitional
credit pertains to duties and taxes paid under the existing laws viz., under Central
Excise Act, 1944 and Chapter V of the Finance Act, 1994, the same cannot be said
to have been availed during the relevant period and thus, cannot be treated as
part of ‘Net ITC’.
Q 7. When is a deficiency memo issued in respect of a refund claim made u/s 54?
Ans. Rule 90(3) of the CGST Rules provides for communication in FORM GST
RFD-03 (deficiency memo) where deficiencies are noticed. The said sub-rule also
provides that once the deficiency memo has been issued, the claimant is required
to file a fresh refund application after the rectification of the deficiencies.
Q 8. Can deficiency memo be issued more than once for a refund claim?
Ans. No. Rule 90 of the CGST Rules clearly states that once an applicant has been
communicated the deficiencies in respect of a particular application, the applicant
shall furnish a fresh refund application after rectification of such deficiencies. Thus,
there can be only one deficiency memo for one refund application and once such a
memo has been issued, the applicant is required to file a fresh refund application,
manually in FORM GST RFD-01A. Once an application has been submitted afresh,
pursuant to a deficiency memo, the proper officer will not serve another deficiency
memo with respect to the application for the same period, unless the deficiencies
pointed out in the original memo remain unrectified, either wholly or partly, or
any other substantive deficiency is noticed subsequently (Para 6.1 of CBIC Circular
No. 37/11/2018-GST dated 15.03.2018)
Q 9. How can fresh claims be filed pursuant to issuance of deficiency memo?
Ans. This fresh application has to be accompanied with the original ARN, debit
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entry number generated originally and a hard copy of the refund application filed
online earlier.
Q 10. What would happen if exports have been made without submitting any
Bond/LUT. Will refund be denied on account of such exports?
Ans. No. Substantive benefits of zero rating will not be denied where it has been
established that exports in terms of the relevant provisions have been made. The
delay in furnishing of LUT in such cases may be condoned and the facility for export
under LUT will be allowed on ex post facto basis taking into account the facts and
circumstances of each case. Reference may be made to Circular No.37/11/2018-
GST dated 15th March 2018.
Q 11. What are the documents to be submitted along with a refund claim of accu-
mulated ITC on account of export of goods and services without payment of tax?
Ans. The following documents will have to be submitted:
u Copy of FORM RFD-01A filed on common portal
u Copy of ARN
u Copy of Statement 3A of FORM RFD-01A generated on common portal
u Copy of Statement 3 of FORM RFD-01A
u Printout of GSTR-2A and in cases where invoice details are not reflected
in the GSTR-2A, the copy of Invoices w.r.t. input and input services. (Refer
Circular No. 59/33/2018-GST dated 04th September 2018)
u BRC/FIRC for export of services
u Undertaking/Declaration in FORM RFD-01A.
Q 12. What are the documents to be submitted along with a refund claim of IGST
paid on export of services?
Ans. The following documents will have to be submitted:
u Copy of FORM RFD-01A filed on common portal
u Copy of ARN
u Copy of Statement 2 of FORM RFD-01A generated on common portal
u Printout of GSTR-2A and in cases where invoice details are not reflected in
the GSTR-2A, the copy of Invoices w.r.t. input and input services and capital
goods (Refer Circular No. 59/33/2018-GST dated 04th September 2018)
u BRC/FIRC for export of services.
u Undertaking/Declaration in FORM RFD-01A.
Q 13. Whether the claimant will need to produce FIRC/BRC in a claim for refund
of ITC on account of export of goods?
Ans. No. In case of export of goods, realization of consideration is not a pre-condi-
tion. Insistence on proof of realization of export proceeds for processing of refund
claims related to export of goods has not been envisaged in the law and will not
be insisted upon.
Q 14. In case of supplies made to Merchant Exporters, will the supplies so made
be treated as zero rated for the supplier?
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Ans. No. Such supplies are considered as normal supplies. However, if the manufac-
turer makes supplies by fulfilling conditions under notification no.40/2017-Central

2019 FAQs 357
Tax (Rate) dated 23.10.2017 (corresponding IGST notification no.41/2017-Integrated

Tax (Rate) dated 23.10.2017) and paying tax @ 0.1%, he can claim refund of unuti-
lised ITC on account of inverted duty structure.
Q 15. If such supplies are not zero rated, will it mean that the supplier will not be
entitled to any refund on such supplies?
Ans. No. The supplier who supplies goods at the concessional rate is also eligible
for refund on account of inverted tax structure as per the provisions of clause (ii)
of the first proviso to sub-section (3) of section 54 of the CGST Act.
Q 16. What is meant by the terms “relevant period” insofar as refund claims under
GST are concerned. Is it different from “tax period” defined under the law?
Ans. Section 2(107) of the CGST Act defines the term “tax period” as the period for
which the return is required to be furnished. The terms ‘Net ITC’ and ‘turnover of
zero rated supply of goods/services’ are used in the context of the relevant period
in rule 89(4) of CGST Rules. The phrase ‘relevant period’ has been defined in the
said sub-rule as ‘the period for which the claim has been filed’. Thus, it can be seen
that the two terms have different connotations under the law.
Q 17. Is refund linked to a tax period or relevant period under GST Law?
Ans. Refund is related to “relevant period” and not to “tax period”. In many scenar-
ios, exports may not have been made in that period in which the inputs or input
services were received and input tax credit has been availed. Similarly, there may
be cases where exports may have been made in a period but no input tax credit
has been availed in the said period. The above referred rule, taking into account
such scenarios, defines relevant period in the context of the refund claim and does
not link it to a tax period.
Q 18. Can the exporter file refund claims by clubbing successive calendar months/
quarter or should the claim be filed on a monthly basis?
Ans. The Exporter, at his option, may file refund claim for one calendar month/
quarter or by clubbing successive calendar months/quarters. The calendar month(s)/
quarter(s) for which refund claim has been filed, however, cannot spread across
different financial years.
Q 19. Can refund of taxes paid under existing laws (Central Excise/Service Tax)
be made under GST?
Ans. No. Refund claims of taxes paid under existing laws have to be dealt with as
per the provisions of existing laws only.
Q 20. How will refund claims made under existing laws be dealt with?
Ans. As per section 142(3) of the CGST Act, the amount of refund arising out of such
claims shall be refunded in cash. Further, the first proviso to the said sub-section
provides that where any claim for refund of CENVAT credit is fully or partially
rejected, the amount so rejected shall lapse and therefore, will not be transitioned
into GST.
Q 21. For Export of goods made under LUT, what is the time period within which
proof of export need to be submitted?
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Ans. Rule 96A (1) of the CGST Rules provides that any registered person may ex-

port goods or services without payment of integrated tax after furnishing a LUT/
bond and that he would be liable to pay the tax due along with the interest as
applicable within a period of fifteen days after the expiry of three months or such
further period as may be allowed by the Commissioner from the date of issue of
the invoice for export, if the goods are not exported out of India.
Q 22. For Export of services made under LUT, what is the time period within which
proof of export need to be submitted?
Ans. The time period in case of services is fifteen days after the expiry of one year
or such further period as may be allowed by the Commissioner from the date of
issue of the invoice for export, if the payment of such services is not received by
the exporter in convertible foreign exchange or in Indian rupees wherever permit-
ted by the Reserve Bank of India. (The underlined portion has been inserted vide
CGST (Amendment) Act, 2018 and shall not into force once the same is notified).
Q 23. What are the circumstances in which manual filing of refund claims is per-
mitted under GST?
Ans. Manual filing of refund claims is permitted, vide circular no.17/17/2017-GST
dated 15th November 2017 and circular no.24/24/2017 dated 24th November
2017 and circular no.36/10/2018-GST dated 13th March 2018, if the claim is on
account of following:
(i) refund of unutilized input tax credit on account of zero rated supplies
(ii) refund of unutilized input tax credit where the credit has accumulated on
account of rate of tax on inputs being higher than the rate of tax on output
supplies (other than nil rated or fully exempt supplies) of goods or services
or both except those supplies which are notified by the Government on the
recommendations of the Council.
(iii) Refund on account of supplies in terms of notification Nos. 40/2017-Central
Tax (Rate) and 41/2017-Integrated Tax (Rate) both dated 23.10.2017
(iv) refund of tax on the supply of goods regarded as deemed exports;
(v) refund of balance in the electronic cash ledger; and
(vi) Refund claim by UIN entities.
(Other scenarios may be added after the proposal is accepted by Council in its
meeting scheduled on 22/12/2018).
Q 24. What is the form in which manual claims need to be filed?
Ans. Manual claims need to be filed in Form GST RFD-01A. Form RFD-10 for UIN
entities.
Q 25. What is the periodicity for filing of refund claims?
Ans. Refund claims in respect of zero-rated supplies and on account of inverted
duty structure, deemed exports and excess balance in electronic cash ledger shall
be filed for a tax period on a monthly basis in FORM GST RFD-01A. However,
in case registered persons having aggregate turnover of up to ` 1.5 crore in the
preceding financial year or the current financial year are opting to file FORM
GSTR-1 quarterly (notification No. 57/2017-Central
E-JOURNAL Tax dated 15.11.2017 refers),
such persons shall apply for refund on a quarterly basis.

2019 FAQs 359
The Exporter, at his option, may file refund claim for one calendar month/quar-
ter or by clubbing successive calendar months/quarters. The calendar month(s)/
quarter(s) for which refund claim has been filed, however, cannot spread across
different financial years.
RFD-10 has to be filed by UIN entities on a quarterly basis.
Q 26. Can refund claims be filed even if GSTR-1/3B for the particular period has
not been filed?
Ans. No. Refund claim for a tax period can be filed only after filing the details in
FORM GSTR-1 for the said tax period. It is also to be ensured that a valid return
in FORM GSTR-3B has been filed for the last tax period before the one in which
the refund application is being filed.
Q 27. Will provisionally accepted ITC be allowed as refund?
Ans. Yes, it will be allowed for the time being. Since the date of furnishing of FORM
GSTR 1 from July, 2017 onwards has been extended while the dates of furnishing
of FORM GSTR-2 and FORM GSTR-3 for such period are yet to be notified, it
has been decided by the competent authority to sanction refund of provisionally
accepted input tax credit at this juncture. However, the registered persons apply-
ing for refund must give an undertaking to the effect that the amount of refund
sanctioned would be paid back to the Government with interest in case it is found
subsequently that the requirements of clause (c) of sub-section (2) of section 16
read with sub-section (2) of section 42 of the CGST Act have not been complied
with in respect of the amount refunded.
Q 28. What is the format in which the undertaking referred to above needs to be
filed?
Ans. The undertaking should be submitted manually along with the refund claim
and the same is available in FORM RFD-01A on the common portal.
Q 29. What will happen if the refund claim of unutilised ITC is rejected?
Ans. Where any amount claimed as refund is rejected under rule 92 of the CGST
Rules, either fully or partly, the amount debited, to the extent of rejection, shall be
re-credited to the electronic credit ledger by an order made in FORM GST RFD-1B
until the FORM GST PMT-03 is available on the common portal. (Para 4 of circular
no. 59/33/2018-GST dated 04th September, 2018 refers).
Q 30. In respect of deemed export supplies, who can claim refund?
Ans. The third proviso to rule 89(1) of the CGST Rules allows the recipient or the
supplier to apply for refund of tax paid on such deemed export supplies.
Q 31. What are the documents required to be filed where the claim is on account
of deemed exports?
Ans. In case such refund is sought by the supplier of deemed export supplies, the
documentary evidences as specified in notification No. 49/2017-Central Tax dated
18.10.2017 are also required to be furnished which includes an undertaking by the
recipient of deemed export supplies that he shall not claim the refund in respect of
such supplies and that no input tax credit on such supplies has been availed of by
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him. The undertaking should be submitted manually along with the refund claim.

Similarly, in case the refund is filed by the recipient of deemed export supplies,
an undertaking by the supplier of deemed export supplies that he shall not claim
the refund in respect of such supplies is also required to be furnished manually.
Further, as per the provisions of rule 89(2)(g) of the CGST Rules, a statement 5B
of FORM GST RFD-01A (showing details of invoices of outward supplies in case
refund is claimed by supplier/Details of invoices of inward supplies in case refund
is claimed by recipient) is also required to be furnished for claiming refund on
supplies declared as deemed exports.
Q 32. What are deemed export supplies?
Ans. The following categories of supply of goods have been notified as deemed
exports under section 147 of CGST Act, vide notification No. 48/2017-Central Tax
dated 18.10.2017:
Sr.No Description of Supply

1 Supply of goods by a registered person against Advance Authorisation
2 Supply of capital goods by a registered person against Export Promo-
tion Capital Goods Authorisation
3. Supply of goods by a registered person to Export Oriented Unit
4. Supply of gold by a bank or Public Sector Undertaking specified in the
notification No. 50/2017-Customs, dated the 30th June, 2017 (as amend-
ed) against Advance Authorisation.
Q 33. What are the situations in which refund of accumulated ITC is allowed
under GST?
Ans. Refund of accumulated ITC is allowed only when the credit accumulation is
on account of zero rated supply or on account of inverted rate structure.
Q 34. What are the situations in which refund of accumulated ITC will not be
allowed even if it’s a case of zero rated supplies or inverted rate structure?
Ans. Refund of ITC will not be allowed where the goods exported out of India are
subject to export duty or where the supplier claims refund of IGST paid on such
supplies. The Government also has the power to notify supplies where refund of
ITC will not be admissible even if such credit accumulation is on account of an
inverted duty structure.
Q 35. Has the Government exercised its powers to curtail refund of ITC in respect
of any product/services ?
Ans. Yes. The government has issued notification no.15/2017-Central Tax (Rate)
dated 28th June 2017 wherein it has been notified that no refund of unutilised input
tax credit shall be allowed under section 54(3) of the CGST Act, in case of supply of
services specified in sub-item (b) of item 5 of Schedule II of the Central Goods and
Services Tax Act. The supplies specified under item 5(b) of Schedule II are construc-
tion services. In respect of goods, the central government has issued notification
no.5/2017- Central Tax (Rate) dated 28th June 2017 as amended by notification
no.44/2017-Central Tax (Rate) dated 14.11.2017 and notification no.20/2018-Central
Tax (Rate) dated 26th July 2018. TheE-JOURNAL
government has notified the following goods
in respect of which unutilized ITC will not be admissible as refund.

2019 FAQs 361
S r . Tariff item, Description of Goods

No heading,
sub-heading
or Chapter
1 8601 Rail locomotives powered from an external source of electricity
or by electric accumulators
2 8602 Other rail locomotives; locomotive tenders; such as Diesel-electric
locomotives, Steam locomotives and tenders thereof
3 8603 Self-propelled railway or tramway coaches, vans and trucks, other
than those of heading 8604
4 8604 Railway or tramway maintenance or service vehicles, whether or
not self-propelled (for example, workshops, cranes, ballast tam-
pers, trackliners, testing coaches and track inspection vehicles)
5 8605 Railway or tramway passenger coaches, not self-propelled;
luggage vans, post office coaches and other special purpose
railway or tramway coaches, not self-propelled (excluding those
of heading 8604)
6 8606 Railway or tramway goods vans and wagons, not self-propelled
7 8607 Parts of railway or tramway locomotives or rolling-stock; such as
Bogies, bissel-bogies, axles and wheels, and parts thereof
8 8608 Railway or tramway track fixtures and fittings; mechanical (in-
cluding electro-mechanical) signalling, safety or traffic control
equipment for railways, tramways, roads, inland waterways, park-
ing facilities, port installations or airfields; parts of the foregoing
Q 36. Will the above restriction in Q35 (applicable for inverted rate structure re-
fund) apply for zero rated supplies?
Ans. No. It has also been clarified by the Government vide Circular No.18/18/2017-
GST dated 16.11.2017, that the aforesaid notification having been issued under
clause (ii) of the proviso to Section 54(3) of the CGST Act, 2017, restriction on
refund of unutilised input tax credit of GST paid on inputs will not be applicable
to zero rated supplies, that is (a) export of goods or services or both; or (b) supply
of goods or services or both to a Special Economic Zone Developer of Special
Economic Zone Unit.
Q 37. How will the refund amount be calculated in case of claim of unutilised ITC
on account of zero rated supplies?
Ans. The refund will be calculated based on the formula Refund Amount = (turn-
over of zero rated supply of goods + turnover of zero rated supply of services) ×
Net ITC/Adjusted total turnover.
Q 38. How will the refund amount be calculated in case of claim of unutilised ITC
on account of inverted rate structure?
Ans. In the case of refund on account of inverted duty structure, refund of input
tax credit shall be granted as per the following formula -
Maximum Refund Amount = {(Turnover E-JOURNAL
of inverted rated supply of goods) × Net
ITC ÷ Adjusted Total Turnover} - tax payable on such inverted rated supply of goods.

Q 39. What does “Net ITC” mean for the purpose of calculation of refund amount?
Ans. “Net ITC” for the purpose of refund on account of zero rated supply means
input tax credit availed on inputs and input services during the relevant period
other than the input tax credit availed for which refund is claimed under sub-rule
(4A) or (4B) or both of Rule 89 of CGST Rules.
“Net ITC” for the purpose of refund on account of inverted rate structure means
input tax credit availed on inputs during the relevant period other than the input
tax credit availed for which refund is claimed under sub-rule (4A) or (4B) or both
of Rule 89 of CGST Rules.
Q 40. What does Turnover of zero rated supply of goods mean for the purpose of
calculation of refund amount?
Ans. “Turnover of zero-rated supply of goods” means the value of zero-rated sup-
ply of goods made during the relevant period without payment of tax under bond
or letter of undertaking, other than the turnover of supplies in respect of which
refund is claimed under sub-rule (4A) or (4B) or both of Rule 89 of CGST Rules.
Q 41. What does Turnover of zero rated supply of services mean for the purpose
of calculation of refund amount?
Ans. “Turnover of zero-rated supply of services” means the value of zero-rated sup-
ply of services made without payment of tax under bond or letter of undertaking,
calculated in the following manner, namely:-
Zero-rated supply of services is the aggregate of the payments received during
the relevant period for zero-rated supply of services and zero-rated supply of ser-
vices where supply has been completed for which payment had been received in
advance in any period prior to the relevant period reduced by advances received
for zero-rated supply of services for which the supply of services has not been
completed during the relevant period.
Q 42. What does Adjusted Total Turnover mean for the purpose of calculation of
refund amount?
Ans. “Adjusted Total Turnover” means the turnover in a State or a Union territory,
as defined under clause (112) of section 2, excluding -
(a) the value of exempt supplies other than zero-rated supplies; and
(b) the turnover of supplies in respect of which refund is claimed under rule
89(4A) or (4B) or both, if any, during the relevant period.
Q 43. For a claim of refund of IGST paid on export of goods, will the applicant
need to file GST RFD-01/01A?
Ans. No. As per Rule 96 of the CGST Rules, 2017, the shipping bill filed by an ex-
porter shall be deemed to be an application for refund of integrated tax paid on
the goods exported out of India.
Q 44. Will such refund claims be treated as having been filed when the shipping
bill is filed?
Ans. No. Such application shall be deemed to have been filed only when: -
(a) the person in charge of the conveyance carrying the export goods duly files
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an export manifest or an export report covering the number and the date
of shipping bills or bills of export; and

2019 FAQs 363
(b) the applicant has furnished a valid return in FORM GSTR-3 or FORM GSTR-
3B, as the case may be.
Q 45. Who will process/disburse refund of IGST paid on export of goods?
Ans. As per Rule 96, the refund of IGST paid on export of goods is processed and
disbursed by Customs.
Q 46. What are the validations required for processing refund claim of IGST on
export of goods?
Ans. For processing such refund, GST system transmits invoice level data of Table
6A in GSTR 1 subject to the following validations: -
1. GSTR-3B is filed for the corresponding period, with admitted tax liability
under Table 3.1(b);
2. Export invoices are submitted in GSTR-1/Table 6A and have correct shipping
bill number, shipping bill date and port code;
3. The admitted tax liability of IGST under table 3.1(b) of GSTR-3B, is equal
to, or greater than, the IGST amount claimed to have been paid under Table
6A of GSTR-1 of the corresponding period.
Q 47. Can refund of IGST on export of goods be withheld under any circumstances?
Ans. Yes. Situations where refund of IGST on goods can be withheld are as under:
(a) a request has been received from the jurisdictional Commissioner of central
tax, State tax or Union territory tax to withhold the payment of refund due to
the person claiming refund in accordance with the provisions of sub-section
(10) or sub-section (11) of section 54; or
(b) the proper officer of Customs determines that the goods were exported in
violation of the provisions of the Customs Act, 1962.
Q 48. What are the modalities to be followed when refund is withheld on the re-
quest of the jurisdictional Commissioner of Central/State Tax?
Ans. Where refund is withheld in accordance with request from jurisdictional
commissionerate, the proper officer of integrated tax at the Customs station shall
intimate the applicant and the jurisdictional Commissioner of Central tax, State
tax or Union territory tax, as the case may be, and a copy of such intimation shall
be transmitted to the common portal.
Thereafter, the proper officer of central tax or State tax or Union territory tax, as
the case may be, shall pass an order in Part B of FORM GST RFD-07.
Where the applicant becomes entitled to refund of the amount withheld as above,
the concerned jurisdictional officer of Central tax, State tax or Union territory tax,
as the case may be, shall proceed to refund the amount after passing an order in
FORM GST RFD-06.
Further, as per Circular no.17/17/2017-GST, any order regarding withholding of
such refund or its further sanction respectively in PART-B of Form GST RFD-07
or Form GST RFD-06 shall be done manually till the refund module is operational
on the common portal.
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Q 49. When will interest become payable in a refund claim?

Ans. As per Section 56 of CGST Act, if any tax ordered to be refunded under section
54(5) to any applicant is not refunded within sixty days from the date of receipt of
application under section 54(1), interest at such rate not exceeding six per cent as
may be specified in the notification issued by the Government on the recommen-
dations of the Council shall be payable in respect of such refund from the date
immediately after the expiry of sixty days from the date of receipt of application
under the said sub-section till the date of refund of such tax.
Where any claim of refund arises from an order passed by an adjudicating authority
or Appellate Authority or Appellate Tribunal or court which has attained finality and
the same is not refunded within sixty days from the date of receipt of application
filed consequent to such order, interest at such rate not exceeding nine per cent
as may be notified by the Government on the recommendations of the Council
shall be payable in respect of such refund from the date immediately after the
expiry of sixty days from the date of receipt of application till the date of refund.
Where the claim relates to refund of pre-deposit made as per Section 107 or 112 of
the GST Act, different provisions will apply for interest. As per Section 115 of the
GST Act, where an amount paid by the appellant under section 107(6) or section
112(8) is required to be refunded consequent to any order of the Appellate Authority
or of the Appellate Tribunal, interest at the rate specified under section 56 shall be
payable in respect of such refund from the date of payment of the amount till the
date of refund of such amount. Thus, in cases of refund of pre-deposit amount,
interest will have to be paid from the date of payment till the date of refund of
the amount (and not from date of receipt of claim for such refund of pre-deposit).
Q 50. What is the rate of interest notified by the Government for delayed settle-
ment of refund claims?
Ans. As per notification no.13/2017-Central Tax dated 28th June 2017, interest
@6% will be payable under Section 56 (normal claims where payment is delayed
beyond 60 days from the receipt of application). The same rate of interest @6% will
be payable in cases of refund of pre-deposit. Interest @ 9% will be payable in cases
of refund falling under proviso to Section 56 (cases where refund claim arises as
a consequence of court order/judgment).
Q 51. How will an order for payment of interest be made under GST?
Ans. Rule 94 of the CGST Rules provide that an order for interest shall be made
along with payment advice in Form GST RFD-05, specifying therein the amount
of refund which is delayed, the period of delay for which interest is payable and
the amount of interest payable, and such amount of interest shall be electronically
credited to any of the bank accounts of the applicant mentioned in his registration
particulars and as specified in the application for refund.
Q 52. Does interest become due if it is not paid within 60 days of receipt of appli-
cation or 60 days of acknowledgement?
Ans. Normally, interest becomes payable if claim is not settled within 60 days of
receipt of application. It is to be noted that the date of acknowledgement is not
the date of receipt of application. When an application for refund is submitted,
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it is transferred to the proper officer for scrutiny of the claim. The proper officer

2019 FAQs 365
needs to check for deficiencies if any in the claim and this scrutiny needs to be
completed within 15 days. If the documents are in order, the acknowledgement
needs to be given within 15 days from the date of receipt of application and the
acknowledgement will also show the date of receipt. The period of 60 days starts
from such date of receipt and not from the date when acknowledgement is given
which can be any date within 15 days from the date of receipt of application.
Q 53. What is the relevant date within which claim for refund is to be filed?
Ans. A claim for refund is to be filed within 2 years of a relevant date. Relevant
date is different for different scenarios which is as under:
(a) in the case of goods exported out of India where a refund of tax paid is
available in respect of the goods themselves or, as the case may be, the
inputs or input services used in such goods, -
(i) if the goods are exported by sea or air, the date on which the ship or
the aircraft in which such goods are loaded, leaves India, or
(ii) if the goods are exported by land, the date on which such goods pass
the frontier, or
(iii) if the goods are exported by post, the date of despatch of goods by
the Post Office concerned to a place outside India;
(b) in the case of supply of goods regarded as deemed exports where a refund
of tax paid is available in respect of the goods, the date on which the return
relating to such deemed exports is filed;
(c) in the case of services exported out of India where a refund of tax paid is
available in respect of services themselves or, as the case may be, the inputs
or input services used in such services, the date of -
(i) receipt of payment in convertible foreign exchange, where the supply
of service had been completed prior to the receipt of such payment;
or
(ii) issue of invoice, where payment for the service had been received in
advance prior to the date of issue of the invoice;
(d) in case where the tax becomes refundable as a consequence of judgment,
decree, order or direction of the Appellate Authority, Appellate Tribunal or
any Court, the date of communication of such judgment, decree, order or
direction;
(e) in the case of refund of unutilized input tax credit under sub-section (3), the
end of the financial year in which such claim for refund arises;
(f) in the case where tax is paid provisionally under this Act or the rules made
thereunder, the date of adjustment of tax after the final assessment thereof;
(g) in the case of a person, other than the supplier, the date of receipt of goods
or services by such person; and
(h) in any other case, the date of payment of tax.
It is to be noted that for refund claim filed by UN bodies, Embassies etc the rele-
vant date and the time period within E-JOURNAL
which refund claim is to be filed is specified

in Section 54(2) itself, which is before the expiry of six months from the last day
of the month in which such supply was received.
Q 54. What is the significance of relevant date for the purpose of refund?
Ans. Relevant Date assumes significance to ascertain whether the refund claim
has been filed within the period of limitation envisaged under the law. Thus, every
refund claim is to be filed within 2 years from the relevant date. The relevant date
is different for different scenarios. Thus, different relevant date is specified for
refund on account of export of goods, export of services, accumulated input tax
credit, finalisation of provisional assessment etc.
Q 55. Does GST law recognize the concept of payment of tax under protest?
Ans. No
Q 56. Can Merchant Exporters or recipient of deemed export supplies claim refund
of IGST paid on export of goods (exports made out of supplies received from sup-
porting manufacturer/supplies received under advance/EPCG authorization etc)?
Ans. No. It is to be noted that Rule 96(10) has been inserted, w.e.f 23.10.2017, in
CGST Rules, 2017 vide Notification no. 75/2017-Central Tax dated 29.12.2017 (this
was last amended vide notification No. 54/2018- Central tax dated 09.10.2018) so
as to provide that the refund of integrated tax paid on export of goods or services
is not permitted to such persons who have received supplies on which the supplier
has availed the benefit of Notification no. 48/2017-Central Tax dated 18.10.2017
(supplies regarded as deemed exports) or Notification no. 40/2017-Central Tax
(Rate) dated 23.10.2017 (supplies to merchant exporters at concessional rate of
CGST+SGST) or notification No. 41/2017-Integrated Tax (Rate) dated 23.10.2017.
(supplies to merchant exporters at concessional rate of IGST).
Thus, in respect of deemed export supplies/merchant exports, the option given
under section 16(3) of IGST Act, 2017, (of either paying tax and claiming refund of
IGST or exporting under Bond and claiming refund of ITC), gets restricted and the
zero-rated supplier can only avail of refund of ITC, as per Rule 89, in such cases.
Q 57. Are refunds of IGST on export of goods automated under the GST Law?
Ans. Yes. The IGST refund module has an in-built mechanism to automatically
grant refund after validating the Shipping Bill data as available in ICES with the
GST Returns data transmitted by GSTN. The matching between the two data
sources is done at Invoice level and any mismatch of the laid down parameters
returns shows error code.
Q 58. How will acknowledgement of manual refund claims be given?
Ans. The refund claim will be verified for its completeness and availability of sup-
porting documents. Once completeness in all respects is ascertained, acknowledge-
ment in Form GST RFD-02 shall be issued within 15 days from the date of filing
of application and entry shall be made in the refund register for receipt of refund
applications. The date of submission of application for which acknowledgement
has been given will be considered as the date for ensuring whether the refund
application has been sanctioned within the stipulated time period.
Q 59. What are the conditions subject to which provisional refund will be granted?
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Ans. Rule 91 of the CGST Rules deal with the grant of provisional refund. The pro-

2019 FAQs 367
visional refund in accordance with the provisions of section 54(6) shall be granted
subject to the condition that the person claiming refund has, during any period
of five years immediately preceding the tax period to which the claim for refund
relates, not been prosecuted for any offence under the Act or under an existing
law where the amount of tax evaded exceeds two hundred and fifty lakh rupees.
Q 60. How will provisional refunds be processed?
Ans. The proper officer, after scrutiny of the claim and the evidence submitted
in support thereof and on being prima facie satisfied that the amount claimed as
refund under sub-rule (1) is due to the applicant in accordance with the provi-
sions of section 54(6), shall make an order in FORM GST RFD-04, sanctioning the
amount of refund due to the said applicant on a provisional basis within a period
not exceeding seven days from the date of the acknowledgement under rule 90.
The proper officer shall issue a payment advice in FORM GST RFD-05 for the
amount sanctioned under sub-rule (2) and the same shall be electronically credited
to any of the bank accounts of the applicant mentioned in his registration partic-
ulars and as specified in the application for refund.
Q 61. Will provisional refund be granted separately under each head or will it be
combined?
Ans. Provisional refund shall be granted separately for each head Central Tax/State
Tax/UT Tax/Integrated Tax/Cess within 7 days of acknowledgement in Form GST
RFD-04. Central/Integrated Tax/Cess would be paid by the Central Tax Authorities
and State Tax/UT tax would be disbursed by the State/UT Tax Authorities.
Q 62. How will the proper officer satisfy the requirement of condition that the
applicant has not been prosecuted for any offence under the Act?
Ans. Based on declaration of applicant. Before sanction of the refund a declaration
shall be obtained that the applicant has not contravened Rule 91(1) (condition that
the person claiming refund has, during any period of five years immediately pre-
ceding the tax period to which the claim for refund relates, not been prosecuted
for any offence under the Act or under an existing law where the amount of tax
evaded exceeds two hundred and fifty lakh rupees).
Q 63. How will claims be processed finally after sanction of provisional refund?
Ans. After sanction of the provisional refund, final order is to be issued within sixty
days (after due verification of the documentary evidences) of the date of receipt
of the complete application form.
The proper officer has to validate the refund statement details with details in Form
GSTR-1 (or Table 6A of Form GSTR-1) available on the common portal. Details
of IGST paid, in case of export of services on payment of IGST, also needs to be
verified from Form GSTR-3 or Form GSTR-3B as the case may be, filed by the
applicant and it needs to be verified that the refund amount claimed shall be less
than the tax paid on account of zero rated supplies as per Form GSTR-3 or 3B as
the case may be. In case of export under bond/LUT, debit to the electronic credit
ledger need to be checked up.
If the sanctionable amount is less than the applied amount or if the refund claim
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is proposed to be rejected, then a notice has to be issued to the applicant in Form
GST RFD-08. The applicant has to reply within 15 days of receipt of notice in Form

GST-09. Principles of natural justice will have to be followed before making the
final decision. Final order will be made by the proper officer in Form GST RFD-06.
Q 64. How will final refund sanction order be issued?
Ans. The proper officer shall issue the refund order manually for each head i.e.
Central Tax/State Tax/UT Tax/Integrated Tax/Cess. Amount paid provisionally
needs to be adjusted accordingly. Payment advice is to be made in FORM GST
RFD-05. Refund, if any, will be paid by an order with payment advice in FORM GST
RFD-05. The details of the refund on account of Central Tax/Integrated Tax/Cess
along with taxpayer bank account details shall be manually submitted in PFMS
system by the jurisdictional Division’s DDO and a signed copy of the sanction order
shall be sent to PAO office for release of payment.
Q 65. Will both SGST and CGST be paid by the same authority?
Ans. No. The refund application for various taxes i.e. CT/ST/UT/IT/Cess is required
be filed with that tax authority to whom the taxpayer has been assigned and shall be
processed and sanction order for all taxes would be issued by the said authority. (In
case the taxpayer has not been assigned, he can submit his application with any tax
authority). However, payment of the sanctioned refund amount shall be made only
by the respective tax authority of the Centre or State Government. The payment
of the sanctioned refund amount in relation to Central Tax/Integrated Tax/Cess
shall be made by the Central Tax authority while payment of the sanctioned refund
amount in relation to ST/UT would be made by the State Tax/UT tax authority.
Q 66. How will communication between Central and State tax authorities take place?
Ans. The refund order issued either by the Central Tax authority or the State
Tax/UT Tax authority shall be communicated to the concerned counterpart tax
authority within seven days for the purpose of payment of the relevant sanctioned
refund amount of tax or cess as the case may be. In order to facilitate sanction of
refund amount of central tax and State tax by the respective tax authorities, it has
been decided that both the Central and State Tax authority shall nominate nodal
officer(s) for the purpose of liaisoning through a dedicated e-mail id.
Where the amount of Central tax and State tax refund is ordered to be sanctioned
provisionally/finally by the Central tax authority and a sanction order is passed
in accordance with the provisions of rule 91(2) of the CGST Rules, the Central
tax authority shall communicate the same, through the nodal officer, to the State
tax authority for making payment of the sanctioned refund amount in relation to
State tax and vice versa. The aforesaid communication shall primarily be made
through e-mail attaching the scanned copies of the sanction order [FORM GST
RFD-04 or FORM GST RFD-06], the application for refund in FORM GST RFD-01A
and the Acknowledgement Receipt Number (ARN). Accordingly, the jurisdictional
proper officer of Central or State Tax, as the case may be, shall issue FORM GST
RFD-05 and send it to the DDO for onward transmission for release of payment.
After release of payment by the respective PAO to the applicant’s bank account,
the nodal officer of Central tax and State tax authority shall inform each other.
The manner of communication as referred earlier shall be followed at the time of
final sanctioning of the refund also.
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2019 FAQs 369
Q 67. Who can file claim refund on account of supply to SEZs?

Ans. The DTA supplier will have to file the refund claim in such cases.
Q 68. When can the DTA supplier file refund claims on account of supplies made
to SEZ units?
Ans. The proviso to Rule 89 stipulates that in respect of supplies to a Special Eco-
nomic Zone unit or a Special Economic Zone developer, the application for refund
shall be filed by the —
(a) supplier of goods after such goods have been admitted in full in the Special
Economic Zone for authorised operations, as endorsed by the specified
officer of the Zone;
(b) supplier of services along with such evidence regarding receipt of services
for authorised operations as endorsed by the specified officer of the Zone:
Thus, proof of receipt of goods or services as evidenced by the specified officer of
the zone is a pre-requisite for filing of refund claim by the DTA supplier.
Q 69. What supporting documents are required to be filed by the DTA supplier in
a refund claim?
Ans. The claim has to be filed along with the following documents
1. a statement containing the number and date of invoices as provided in rule 46
along with the evidence regarding the endorsement specified in the second proviso
to sub-rule (1) in the case of the supply of goods made to a Special Economic Zone
unit or a Special Economic Zone developer;
2. a statement containing the number and date of invoices, the evidence regarding
the endorsement specified in the second proviso to sub-rule (1) and the details of
payment, along with the proof thereof, made by the recipient to the supplier for
authorised operations as defined under the Special Economic Zone Act, 2005,
in a case where the refund is on account of supply of services made to a Special
Economic Zone unit or a Special Economic Zone developer;
3. a declaration to the effect that the Special Economic Zone unit or the Special
Economic Zone developer has not availed the input tax credit of the tax paid by
the supplier of goods or services or both, in a case where the refund is on account
of supply of goods or services made to a Special Economic Zone unit or a Special
Economic Zone developer.
Q 70. Whether the DTA supplier would be entitled to provisional refund?
Ans. As per Section 54(6) of the CGST Act, the proper officer may, in the case of
any claim for refund on account of zero-rated supply of goods or services or both
made by registered persons, other than such category of registered persons as may
be notified by the Government on the recommendations of the Council, refund on
a provisional basis, ninety per cent of the total amount so claimed, excluding the
amount of input tax credit provisionally accepted, in such manner and subject to
such conditions, limitations and safeguards as may be prescribed and thereafter
make an order under sub-section (5) for final settlement of the refund claim after
due verification of documents furnished by the applicant.
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Thus DTA suppliers making zero rated supplies to SEZ units will be entitled for
provisional refund of 90%.

Q 71. How will the amount of claim (of ITC) be calculated?

Ans. The claim (of accumulated ITC) will be calculated using the following formula
Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated
supply of services) × Net ITC ÷Adjusted Total Turnover.
Q 72. What are the documents to be filed along with the claim of refund on account
of deemed exports, if the claim is to be filed by the supplier?
Ans. In case such refund is sought by the supplier of deemed export supplies, the
documentary evidences as specified in notification no.49/2017-Central Tax dated
18.10.2017 are required to be furnished. The notification specifies the following
documents.
1. Acknowledgement by the jurisdictional Tax officer of the Advance Authori-
sation holder or Export Promotion Capital Goods Authorisation holder, as
the case may be, that the said deemed export supplies have been received
by the said Advance Authorisation or Export Promotion Capital Goods Au-
thorisation holder, or a copy of the tax invoice under which such supplies
have been made by the supplier, duly signed by the recipient Export Oriented
Unit that said deemed export supplies have been received by it.
2. An undertaking by the recipient of deemed export supplies that no input
tax credit on such supplies has been availed of by him.
3. An undertaking by the recipient of deemed export supplies that he shall not
claim the refund in respect of such supplies and the supplier may claim the
refund.
The procedure regarding procurement of supplies of goods from DTA by Export
Oriented Unit (EOU)/Electronic Hardware Technology Park (EHTP) Unit/Software
Technology Park (STP) Unit/Bio-Technology Parks (BTP) Unit under deemed
export as laid down in Circular No. 14/14/2017-GST dated 06.11.2017 needs to
be complied with.
Q 73. What are the documents to be filed along with the claim of refund on account
of deemed exports, if the claim is to be filed by the recipient?
Ans. In case the refund is filed by the recipient of deemed export supplies, an
undertaking by the supplier of deemed export supplies that he shall not claim the
refund in respect of such supplies is also required to be furnished manually.
The procedure regarding procurement of supplies of goods from DTA by Export
Oriented Unit (EOU)/Electronic Hardware Technology Park (EHTP) Unit/Software
Technology Park (STP) Unit/Bio-Technology Parks (BTP) Unit under deemed
export as laid down in Circular No. 14/14/2017-GST dated 06.11.2017 needs to
be complied with.
Q 74. What will be the eligible amounts for refund in case of deemed exports?
Ans. While filing RFD-01A (recipient of deemed exports), taxpayers need to enter
the amount that they want to get as refund. The lowest of the following three
categories are eligible for refund.
1. Balance in the Electronic Credit Ledger
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2. ITC availed for the particular tax period
3. Amount entered by taxpayer in refund claim matrix.
2019 FAQs 371
Q 75. In case the supplier claims refund on account of deemed export supplies, will
the recipient be eligible for refund of ITC in respect of other inputs/input services
which have been used in making zero rated supply?
Ans. Yes. As per Rule 89(4A) In the case of supplies received on which the supplier
has availed the benefit of notification No. 48/2017-Central Tax dated 18th October,
2017, refund of input tax credit, availed in respect of other inputs or input services
used in making zero-rated supply of goods or services or both, shall be granted.
Q 76. What is the Procedure to be followed in case of Deemed Exports?
Ans. Rule 89 of the CGST Rules, 2017 as amended vide Notification No. 47/2017-
Central Tax dated 18.10.2017 allows either the recipient or supplier of such supplies
to claim refund of tax paid thereon.
For supplies to EOU/EHTP/STP/BTP units in terms of Notification No. 48/2017-Cen-
tral Tax dated 18.10.2017, the following procedure and safeguards are prescribed -
(i) The recipient EOU/EHTP/STP/BTP unit shall give prior intimation in a
prescribed proforma in “Form-A” (appended herewith) bearing a running
serial number containing the goods to be procured, as pre-approved by the
Development Commissioner and the details of the supplier before such
deemed export supplies are made. The said intimation shall be given to —
(a) the registered supplier;
(b) the jurisdictional GST officer in charge of such registered supplier;
and
(c) its jurisdictional GST officers.
(ii) The registered supplier thereafter will supply goods under tax invoice to the
recipient EOU/EHTP/STP/BTP unit.
(iii) On receipt of such supplies, the EOU/EHTP/STP/BTP unit shall endorse
the tax invoice and send a copy of the endorsed tax invoice to —
(a) the registered supplier;
(b) the jurisdictional GST officer in charge of such registered supplier;
and
(c) its jurisdictional GST officers.
(iv) The endorsed tax invoice will be considered as proof of deemed export
supplies by the registered person to EOU/EHTP/STP/BTP unit.
(v) The recipient EOU/EHTP/STP/BTP unit shall maintain records of such
deemed export supplies in digital form, based upon data elements contained
in “Form-B” (appended herewith). The software for maintenance of digital
records shall incorporate the feature of audit trail. While the data elements
contained in the Form-B are mandatory, the recipient units will be free to
add or continue with any additional data fields, as per their commercial
requirements. All recipient units are required to enter data accurately and
immediately upon the goods being received in, utilized by or removed from
the said unit. The digital records should be kept updated, accurate, complete
and available at the said unit at all times for verification by the proper officer,
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whenever required. A digital copy of Form-B containing transactions for

the month, shall be provided to the jurisdictional GST officer, each month
(by the 10th of month) in a CD or Pen drive, as convenient to the said unit.
3. The above procedure and safeguards are in addition to the terms and conditions
to be adhered to by a EOU/EHTP/STP/BTP unit in terms of the Foreign Trade
Policy, 2015-20 and the duty exemption notification being availed by such unit.
Q 77. What is the relevant date for filing of refund claim in case of deemed exports?
Ans. The relevant date is the date of on which return relating to such deemed
exports is furnished. The claim needs to be filed within 2 years from this date.
Q 78. What are the conditions subject to which supply of goods (to merchant
exporters) at concessional rate may be made?
Ans. Supplies at concessional rate of 0.1% can be made subject to compliance with
conditions mentioned in notification no.40/2017-Centra Tax (Rate) dated 23.10.2017.
(Corresponding IGST notification no. 41/2017-Integrated Tax (Rate) dated the 23rd
October, 2017). The conditions are as under:
(i) the registered supplier shall supply the goods to the registered recipient on
a tax invoice;
(ii) the registered recipient shall export the said goods within a period of ninety
days from the date of issue of a tax invoice by the registered supplier;
(iii) the registered recipient shall indicate the Goods and Services Tax Identifi-
cation Number of the registered supplier and the tax invoice number issued
by the registered supplier in respect of the said goods in the shipping bill or
bill of export, as the case may be;
(iv) the registered recipient shall be registered with an Export Promotion Council
or a Commodity Board recognised by the Department of Commerce;
(v) the registered recipient shall place an order on registered supplier for
procuring goods at concessional rate and a copy of the same shall also be
provided to the jurisdictional tax officer of the registered supplier;
(vi) the registered recipient shall move the said goods from place of registered
supplier -
(a) directly to the Port, Inland Container Deport, Airport or Land Customs
Station from where the said goods are to be exported; or
(b) directly to a registered warehouse from where the said goods shall be
moved to the Port, Inland Container Deport, Airport or Land Customs
Station from where the said goods are to be exported;
(vii) if the registered recipient intends to aggregate supplies from multiple reg-
istered suppliers and then export, the goods from each registered supplier
shall move to a registered warehouse and after aggregation, the registered
recipient shall move goods to the Port, Inland Container Deport, Airport or
Land Customs Station from where they shall be exported;
(viii) in case of situation referred to in condition (vii), the registered recipient shall
endorse receipt of goods on the tax invoice and also obtain acknowledge-
ment of receipt of goods in the registered warehouse from the warehouse
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operator and the endorsed tax invoice and the acknowledgement of the

2019 FAQs 373
warehouse operator shall be provided to the registered supplier as well as

to the jurisdictional tax officer of such supplier; and
(ix) when goods have been exported, the registered recipient shall provide copy
of shipping bill or bill of export containing details of Goods and Services Tax
Identification Number (GSTIN) and tax invoice of the registered supplier
along with proof of export general manifest or export report having been
filed to the registered supplier as well as jurisdictional tax officer of such
supplier.
Q 79. What happens if the merchant exporter fails to export such goods?
Ans. The registered supplier shall not be eligible for the exemption (i.e. supply at
concessional rate) if the registered recipient fails to export the said goods within
a period of ninety days from the date of issue of tax invoice.
Q 80. Can the merchant exporter claim refund of ITC in respect of supplies re-
ceived at concessional rate in terms of notification No. 40/2017-Central Tax (Rate)
dated 23.10.2017. What about other inputs/input services which have gone into
the subject export but which have not been procured under the said notification?
Ans. Yes. Rule 89(4B) of the CGST Rules stipulates that in the case of supplies received
on which the supplier has availed the benefit of the notification No. 40/2017-Central
Tax (Rate) dated the 23rd October, 2017 or notification No. 41/2017-Integrated Tax
(Rate) dated the 23rd October, 2017 or notification No. 78/2017-Customs dated the
13th October, 2017 or notification No.79/2017-Customs dated the 13th October,
2017 or all of them, refund of input tax credit, availed in respect of inputs received
under the said notifications for export of goods and the input tax credit availed in
respect of other inputs or input services to the extent used in making such export
of goods, shall be granted.
Thus, a merchant exporter (recipient) can claim refund of ITC in respect of supplies
on which the supplier has availed benefit of notification No. 40/2017 - Central Tax
(Rate) dated 23.10.2017 (at concessional rate of 0.1%). This entire 0.1% paid (along
with ITC of other supplies on which concessional rate of GST has not been availed
but used in export of such goods) will be available as refund.
For other exports made by merchant exporters in respect of which concessional
rate of GST has not been availed, the merchant exporters will be entitled to refund
of accumulated ITC in terms of Rule 89(4) by resort to the following formula
Refund Amount = (Turnover of zero-rated supply of goods + Turnover of zero-rated
supply of services) × Net ITC ÷Adjusted Total Turnover. It is important to note
that for the purpose of above calculation, turnover of zero rated supply of goods
WILL EXCLUDE turnover of supplies in respect of which refund is claimed under
sub-rule (4A) or (4B) or both.
Similarly, Net ITC will also EXCLUDE input tax credit availed for which refund
is claimed under sub-rule (4A) (supplies under deemed export provisions) or (4B)
(supplies to merchant exporters at concessional rate of duty) or both.
Q 81. How can the supplier to merchant exporter claim refund, since such supplies
will not be considered as zero rated supplies?
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Ans. The supplier who supplies goods at the concessional rate is also eligible for

refund on account of inverted tax structure as per the provisions of clause (ii) of
the first proviso to sub-section (3) of section 54 of the CGST Act read with Rule
89(5) of the CGST Rules.
Q 82. Is the scheme of making supplies to merchant exporters at concessional rate
of duty in terms of notification No. 40/2017-Central Tax (Rate) dated 23.10.2017
compulsory?
Ans. No. The benefit of supplies at concessional rate is subject to certain condi-
tions and the said scheme is optional. The option may or may not be availed by
the supplier and/or the recipient and the goods may be procured at the normal
applicable tax rate.
Q 83. Can the merchant exporter export goods (in respect of which concessional rate
of duty is availed by the supplier) on payment of IGST and claim refund of IGST?
Ans. No. The exporter of such goods can export the goods only under LUT/bond
and cannot export on payment of integrated tax. In this connection, Rule 96(10)
of the CGST Rules as amended from time to time may be referred.
Q 84. Will refund of Compensation Cess be also admissible under GST?
Ans. Yes. Circular No.1/1/2017-Compensation Cess issued by Board clarifies that
provisions of section 16 of the IGST Act, 2017, relating to zero rated supply will
apply mutatis mutandis for the purpose of Compensation Cess (wherever applica-
ble), that is to say that:
(a) Exporter will be eligible for refund of Compensation Cess paid on goods
exported by him [on similar lines as refund of IGST under section 16(3)(b)
of the IGST, 2017]; or
(b) No Compensation Cess will be charged on goods exported by an exporter
under bond and he will be eligible for refund of input tax credit of Compen-
sation Cess relating to goods exported [on similar lines as refund of input
taxes under section 16(3)(a) of the IGST, 2017].
Thus, refund of compensation Cess (if its on account of zero rated supplies) will be
admissible to the claimant. The process and procedure for claim of such refund
will be same as for refund of IGST (on both goods and services) and in respect of
accumulated ITC of compensation cess.
Further, in cases of unutilised ITC of compensation cess availed on inputs in cases
where the final product is not subject to the levy of compensation cess, it has been
clarified vide circular no. 45/19/2018-GST dated 30th May 2018, that refund of
accumulated ITC can be claimed in such situations, however the rebate route i.e.
payment of IGST and claiming refund of compensation cess of IGST paid will not
be permissible in such cases. In such cases they cannot utilise the compensation
cess paid on inputs for payment of IGST in view of the proviso to section 11(2) of
the Cess Act, which allows the utilization of the input tax credit of cess, only for the
payment of cess on the outward supplies. Accordingly, they cannot claim refund
of compensation cess in case of zero-rated supply on payment of integrated tax.
Q 85. How can refunds of excess balance in the electronic cash ledger be claimed?
Ans. Excess balance in the cash ledger after making good all liabilities, would be
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available as refund to the registered person. Presently this refund is also available

2019 FAQs 375
through RFD-01A procedure. Section 49(6) enables grants of refund of excess

balance in the cash ledger and reads as under.
Q 86. Is there any time limit within which refund of excess balance in cash ledger
need to be submitted?
Ans. No. Refunds of excess balance in cash ledger can be claimed anytime. The law
enables making the claim even at the time of filing monthly returns. No relevant
date has been prescribed for such claims.
Q 87. A registered person pays IGST for a supply which is subsequently held to
be intra-state. What is the relevant date, within which he has to file a claim for
refund of IGST wrongly paid?
Ans. Section 77 of CGST Act, 2017, read with Section 19 of IGST Act, are the en-
abling provisions for grant of refund in such cases. These provisions use the words
“………..shall be granted refund of the amount of Central/Integrated tax so paid
in such manner and subject to such conditions as may be prescribed….” Thus,
refunds will have to be mandatorily granted. The stipulation in Section 54(1) that
claims will have to be filed within 2 years from the relevant date, will not apply for
a claim under this category.
Q 88. Interest on delayed payment (if refund is not paid within 60 days from the
date of receipt of application) will be paid right from the first date of receipt of
claim till the date of payment. Is this statement true?
Ans. As per section 56 of CGST Act, 2017, If any tax ordered to be refunded under
section 54(5) to any applicant is not refunded within sixty days from the date of
receipt of application under section 54(1), interest at such rate not exceeding six
per cent as may be specified in the notification issued by the Government on the
recommendations of the Council shall be payable in respect of such refund from
the date immediately after the expiry of sixty days from the date of receipt of
|application under the said sub-section till the date of refund of such tax. Thus,
interest liability will start after expiry of 60 days of receipt of application.
Q 89. If refund arises on account of finalisation of provisional assessment under
GST, will the registered person need to make a separate claim for refund of such
amount under Section 54 or will it be granted suo-motu consequent to finalisation?
Ans. If a claim of refund arises on account of finalisation of provisional assessment,
the registered person will have to file a refund claim under section 54, claiming the
consequential refund. Such refunds will not be granted suo-motu by the officer
finalizing the refund claim.
Q 90. What is the relevant date within which claim has to be filed for refunds
arising as a consequence of finalisation of provisional assessment?
Ans. Such claims need to be filed within 2 years from the date of adjustment of
tax after the final assessment thereof.
Q 91. What documents need to be submitted along with the claim of refund (for
refunds arising as consequence to finalization of provisional assessment)?
Ans. The Refund claim needs to be filed in GST RFD-01A on the common portal
accompanied by the following documents:
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(a) the reference number of the final assessment order and a copy of the said

order in a case where the refund arises on account of the finalisation of

provisional assessment;
(b) a declaration to the effect that the incidence of tax, interest or any other
amount claimed as refund has not been passed on to any other person, in a
case where the amount of refund claimed does not exceed two lakh rupees;
(c) a Certificate in Annexure 2 of FORM GST RFD-01A issued by a chartered
accountant or a cost accountant to the effect that the incidence of tax,
interest or any other amount claimed as refund has not been passed on to
any other person, in a case where the amount of refund claimed exceeds
two lakh rupees.
Q 92. Is manual filing of claims permitted for refunds arising as a consequence of
finalisation of provisional assessment?
Ans. No.
Q 93. In case refund claim is filed as a consequence of any Court judgment, when
will interest become due?
Ans. For a claim of refund of tax paid during the course of proceedings & which
the Courts have held as not payable on merits, interest liability would arise under
Section 56 of the CGST Act i.e. interest would be payable if the amount has not
been refunded within 60 days of filing of application for refund by the claimant.
That is to say, after the judgment or decree holding the tax to be not payable, the
appellant will have to file a claim under section 54(1) and thereafter if the amount
is not refunded within 60 days of filing of application, interest liability will arise
for Revenue.
The position would be different in case of refund of pre-deposit. For refund of
amounts paid as pre-deposit (in terms of Sections 107(6) & 112(8)) interest liability
will arise in terms of Section 115 of the CGST Act. As per Section 115 of CGST
Act, where an amount paid by the appellant under sub-section (6) of section 107
or sub-section (8) of section 112 is required to be refunded consequent to any
order of the Appellate Authority or of the Appellate Tribunal, interest at the rate
specified under section 56 shall be payable in respect of such refund from the date
of payment of the amount till the date of refund of such amount. Thus, interest
liability starts from the date of making of payment (and not the date of filing of
application for refund) in the case of amounts paid as pre-deposit.
Q 94. What are the documentary evidences that need to accompany the refund
claim, in cases where the claim arises a consequence of any court order or judgment?
Ans. Such refund claims are to be filed in form GST RFD-01 on the common portal.
The application has to be accompanied by the following documentary evidences
in Annexure 1 in Form GST RFD-01A, as applicable, to establish that a refund is
due to the applicant, namely:-
(a) the reference number of the order and a copy of the order passed by the
proper officer or an appellate authority or Appellate Tribunal or court re-
sulting in such refund or reference number of the payment of the amount
specified in sub-section (6) of section 107 and sub-section (8) of section 112
claimed as refund; E-JOURNAL

2019 FAQs 377
(b) a declaration to the effect that the incidence of tax, interest or any other
amount claimed as refund has not been passed on to any other person, in a
case where the amount of refund claimed does not exceed two lakh rupees;
(c) a Certificate in Annexure 2 of FORM GST RFD-01 issued by a chartered
accountant or a cost accountant to the effect that the incidence of tax,
interest or any other amount claimed as refund has not been passed on to
any other person, in a case where the amount of refund claimed exceeds
two lakh rupees.
Q 95. What is unjust enrichment. Does the concept apply in GST?
Ans. The Hon’ble Supreme Court in the case of Sahakari Khand Udyog Mandal
Ltd. v. Commissioner of Central Excise & Customs as reported in 2005 (181) ELT
328 S.C. has defined ‘unjust enrichment’ as under:
(a) ‘Unjust enrichment’ means retention of a benefit by a person that is unjust
or inequitable. ‘Unjust enrichment’ occurs when a person retains money or
benefits which in justice, equity and good conscience, belong to someone
else.
(b) That no person can be allowed to enrich inequitably at the expense of another.
A right of recovery under the doctrine of ‘unjust enrichment’ arises where
retention of a benefit is considered contrary to justice or against equity.
The concept is inbuilt in Section 54(5) read with 54(8) of the CGST Act, 2017.
Every claim of refund sanctioned will be credited to the Consumer Welfare Fund
in terms of section 54(5) of CGST Act, 2017. It will, instead of being credited to the
fund, be paid to the claimant in situations mentioned in Section 54(8). Thus, the
principle will not apply to refund claims arising on account of zero rated supply,
refund of accumulated ITC on account of zero rated supply and inverted rate
structure, where wrong tax is paid (IGST instead of C+SGST & vice versa), where
tax has been paid on advances but no supply is made and no invoice has been
issued. These are cases where the principle of unjust enrichment is not applicable
and the proper officer need not satisfy himself whether the incidence of tax has
been passed on to any other person in such cases. In all other cases, refund will be
sanctioned to the claimant only if the claimant demonstrates that the incidence
of tax has not been passed on to any other person.
Q 96. What is the standard of proof required under GST to demonstrate non-passing
of incidence of tax to any other person?
Ans. Rule 89(2)(l) & (m) deals with documentary evidence pertaining to passing
of incidence of tax. In cases where the amount of refund claim does not exceed
2,00,000/- a declaration to the effect that the incidence of tax, interest or any other
amount claimed as refund has not been passed on to any other person. Where the
claim exceeds 2,00,000/- a Certificate in Annexure 2 of FORM GST RFD-01A issued
by a chartered accountant or a cost accountant to the effect that the incidence
of tax, interest or any other amount claimed as refund has not been passed on to
any other person. However, the aforesaid declaration/certificate is not required
to be furnished in respect of cases covered under clause (a) or clause (b) or clause
(c) or clause (d) or clause (f) of section 54(8). That is for cases covered by clauses
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(a) to (d) & (f) of section 54, since by default the doctrine of unjust enrichment

does not apply, there is no requirement of any declaration or certificate to prove

non-passing of the incidence of tax to any other person.
Explanation to Rule 89 expressly states that where the amount of tax has been
recovered from the recipient, it shall be deemed that the incidence of tax has
been passed on to the ultimate consumer. Thus, if Revenue has cogent evidence
to show that the amount of tax has been recovered from the recipient, then it will
be presumed that the incidence of tax has been passed on the consumer and the
declaration/certificate given by the applicant will not suffice to cross the bar of
unjust enrichment.
14.1 Refunds by UINS

Q 97. Which are the class of persons entitled for refund of GST paid on inward
supplies?
Ans. The Central Government has issued Notification No. 16/2017-Central Tax
(Rate) dated 28th June 2017, where-under the following entities have been specified
for the purposes of Section 55 of the CGST Act.
(i) United Nations or a specified international organisation; and
(ii) Foreign diplomatic mission or consular post in India, or diplomatic agents
or career consular officers posted therein.
Q 98. How can UN bodies claim refund of GST paid on their inward supplies?
Ans. The procedure for filing a refund application by UN bodies has been outlined
under Rule 95 of the CGST Rules. The process has been further clarified vide
Circular No. 36/10/2018-GST dated 13.03.2018 and Circular No. 43/17/2018-GST
dated 13.04.2018.
Q 99. Who will process the claims for refund filed by UN bodies/Embassies etc?
Ans. All the entities claiming refund have to submit the duly filled in print out of
FORM RFD-10 to the jurisdictional Central Tax Commissionerate along with state-
ment of inward invoices in FORM GSTR-11. All refund claims shall be processed
and sanctioned by respective Central Tax offices. In order to facilitate processing
of refund claims of UIN entities, a nodal officer has been designated in each State.
Application for refund claim may be submitted before the designated Central Tax
nodal officers in the State in which the UIN has been obtained.
Q 100. Are there any conditions prescribed in notification no.16/2017-Central Tax
(Rate) dated 28.06.2017?
Ans. Yes. The notification prescribes the following conditions:
(a) United Nations or a specified international organisation shall be entitled
to claim refund of central tax paid on the supplies of goods or services or
both received by them subject to a certificate from United Nations or that
specified international organisation that the goods and services have been
used or are intended to be used for official use of the United Nations or the
specified international organisation.
(b) Foreign diplomatic mission orE-JOURNAL
consular post in India, or diplomatic agents
or career consular officers posted therein shall be entitled to claim refund

2019 FAQs 379
of central tax paid on the supplies of goods or services or both received by

them subject to, —
(i) that the foreign diplomatic mission or consular post in India, or dip-
lomatic agents or career consular officers posted therein, are entitled
to refund of central tax, as stipulated in the certificate issued by the
Protocol Division of the Ministry of External Affairs, based on the
principle of reciprocity;
(ii) that in case of supply of services, the head of the foreign diplomat-
ic mission or consular post, or any person of such mission or post
authorised by him, shall furnish an undertaking in original, signed
by him or the authorised person, stating that the supply of services
received are for official purpose of the said foreign diplomatic mission
or consular post; or for personal use of the said diplomatic agent or
career consular officer or members of his/her family;
(iii) that in case of supply of goods, concerned diplomatic mission or con-
sulate or an officer duly authorized by him will produce a certificate
that,-
(I) the goods have been put to use, or are in the use, as the case
may be, of the mission or consulate;
(II) the goods will not be supplied further or otherwise disposed
of before the expiry of three years from the date of receipt of
the goods; and
(III) in the event of non-compliance of clause (I), the diplomatic
or consular mission will pay back the refund amount paid to
them;
(iv) in case the Protocol Division of the Ministry of External Affairs, af-
ter having issued a certificate to any foreign diplomatic mission or
consular post in India, decides to withdraw the same subsequently, it
shall communicate the withdrawal of such certificate to the foreign
diplomatic mission or consular post;
(v) the refund of the whole of the central tax granted to the foreign dip-
lomatic mission or consular post in India for official purpose or for
the personal use or use of their family members shall not be available
from the date of withdrawal of such certificate.
Q 101. What is the procedure for filing of refund applications by UIN agencies?
Ans. The procedure for filing a refund application has been outlined under Rule
95 of the CGST Rules which provides for filing of refund on quarterly basis in
FORM RFD-10 along with a statement of inward invoices in FORM GSTR-11. The
Board vide circular no.36/10/2018-GST dated 13.03.2018 has clarified that FORM
GSTR-11 along with FORM GST RFD-10 has to be filed separately for each of those
quarters for which refund claim is being filed. The Board has also clarified that
all the entities claiming refund shall submit the duly filled in print out of FORM
RFD-10 to the jurisdictional Central Tax Commissionerate.
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Q 102. How will the refund claims of UIN agencies be processed?

Ans. All refund claims shall be processed and sanctioned by respective Central Tax
offices. In order to facilitate processing of refund claims of UIN entities, a nodal
officer has been designated in each State details of whom are given in Annexure
A (of circular 36/10/2018-GST dated 13.03.2018). Application for refund claim
may be submitted before the designated Central Tax nodal officers in the State in
which the UIN has been obtained.
There may be cases where multiple UINs existed for the same entity but were later
merged into one single UIN. In such cases, field formations are requested to process
refund claims for earlier unmerged UINs also. Hence, the refund application will
be made with the single UIN only but invoices of old UINs may be declared in the
refund claim, which may be accepted and taken into account while processing
the refund claim. Other circulars on the subject are circular no. 43/17/2018-GST
dated 13.04.2018, Circular No. 63/37/2018-GST dated 14.09.2018 and Circular No.
68/42/2018-GST dated 05.10.2018.
Q 103. Can UIN agencies file refund claims with the proper officer of State Tax?
Ans. No. The claims are to be filed with the jurisdictional central tax Commis-
sionerate only. All refund claims shall be processed and sanctioned by respective
Central Tax offices.
Q 104. What are the documents required to be submitted by UIN agencies along
with refund claims?
Ans. The procedure for filing a refund application has been outlined under Rule 95
of the Central Goods and Services Tax Rules, 2017 which provides for filing of refund
on a quarterly basis in FORM RFD-10 along with a statement of inward invoices
in FORM GSTR-11. However, the print version of FORM GSTR-11 generated by
the system does not have invoice-wise details. Therefore, the Board vide circular
no. 43/17/2018-GST dated 13.04.2018 has clarified that till the system generated
FORM GSTR- 11 does not have invoice-level details, UIN agencies are requested
to manually furnish a statement containing the details of all the invoices on which
refund has been claimed, along with refund application.
Further all the relevant documents referred to in notification no.16/2017-Central
Tax (Rate) dated 28.06.2017 need to be submitted along with the refund claim.
Q 105. Will refund be granted if the inward invoices does not bear UIN number
of the recipient?
Ans. Many suppliers did not record the UINs on the invoices of supplies of goods
or services to UIN agencies. The Board vide circular no.43/17/2018-GST dated
13.04.2018 has clarified that the recording of UIN on the invoice is a necessary
condition under rule 46 of the CGST Rules, 2017. If suppliers/vendors are not
recording the UINs, action may be initiated against them under the provisions of
the CGST Act, 2017.
Further, in cases where, UIN has not been recorded on the invoices pertaining to
refund claim for the quarters of July - September 2017, October - December 2017
and January - March 2018, a one-time waiver is being given by the Government,
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subject to the condition that copies of such invoices will be submitted to the juris-
dictional officers and will be attested by the authorized representative of the UIN

2019 FAQs 381
agency. Further waiver from the period April 2018 to March 2019 has been given
vide Circular No. 63/37/2018-GST dated 14.09.2018. Field officers have been ad-
vised that the terms of Notification No. 16/2017-Central Tax (Rate) dated 28th June
2017 and corresponding notifications under the IGST Act, 2017, UTGST Act, 2017
and respective SGST Acts should be satisfied while processing such refund claims.
15. demands and RecoveRy
Q 1. Which are the applicable sections for the purpose of recovery of tax short paid
or not paid or amount erroneously refunded or input tax credit wrongly availed
or utilized?
Ans. Section 73 deals with the cases where there is no invocation of fraud/suppres-
sion/mis-statement etc. Section 74 deals with cases where the provisions related
to fraud/suppression/mis-statement etc. are invoked.
Q 2. In what form and manner will the demand notice be issued?
Ans. Demand notices can be issued under Section 73 (cases not involving fraud/
suppression), Section 74 (cases involving fraud/suppression) & Section 76 (Tax
collected but not paid to the Government. In all cases, along with the notices, a sum-
mary thereof has to be served electronically to the notice in FORM GST DRC-01
Where a statement of demand is issued in terms of Section 73(3) or 74(3), along
with the statement a summary thereof has to be served electronically to the noticee
in FORM GST DRC-02.
Q 3. What if person chargeable with tax, pays the amount along with interest before
issue of show cause notice under section 73?
Ans. A person can make payment voluntarily either before issue of notice or within
thirty days of issue of notice and file an intimation of such voluntary payment in
Form GST DRC-03.
In such cases if paid before issue of notice, notice shall not be issued by the proper
officer {sec. 73(6)} and if paid after issue of notice but within thirty days, all pro-
ceedings in respect of such notice shall be deemed to be concluded. {sec. 73(8)}
Q 4. What is the form and manner in which payment of tax/interest/penalty before
issue of notice under Section 73 or 74 will be communicated by the taxable person?
Ans. In cases falling under Section 73, the taxable person has the option to discharge
tax and interest liability before issuance of notice under Section 73(1) or statement
under Section 73(3). Similarly, in cases falling under Section 74, the taxable person
has the option to discharge tax/interest/penalty equal to 15% of tax liability before
issuance of notice under Section 74(1) or statement under Section 74(3). If he opts
to make such payment before issuance of notice, he shall make the payment of tax
and interest and thereafter inform the proper officer in FORM GST DRC-03. The
proper officer has to issue an acknowledgement in FORM GST DRC-04.
Q 5. What is the form and manner in which payment of tax/interest/penalty after
issue of notice under Section 73 or 74 will be communicated by the taxable person?
Ans. In cases falling under Section 73,E-JOURNAL
the taxable person has the option to discharge

tax and interest liability within 30 days of issuance of notice under Section 73(1)
or statement under Section 73(3). Similarly, in cases falling under Section 74, the
taxable person has the option to discharge tax/interest/penalty equal to 25% of
tax liability within 30 days of issuance of notice under Section 74(1) or statement
under Section 74(3). If he opts to make such payment within 30 days of issuance
of notice, he shall make the payment of tax and interest and thereafter inform the
proper officer in FORM GST DRC-03. In such cases, the proper officer shall issue
an order in FORM GST DRC-05 concluding the proceedings in respect of the said
notice.
Q 6. What is the course of action, if the assessee has not paid the tax or short paid
or erroneously refunded or input tax credit wrongly availed or utilised by reason
of fraud or any wilful mis-statement or suppression of facts?
Ans. In such circumstances, the proper officer shall serve notice on the person
chargeable with tax which has not been so paid or which has been so short paid
or to whom the refund has erroneously been made, or who has wrongly availed
or utilised input tax credit, requiring him to show cause as to why he should not
pay the amount specified in the notice along with interest payable thereon under
Section 50 and a penalty equivalent to the tax specified in the notice.
Q 7. What is the time limit for issuance of SCN in light of the above circumstances?
Ans. In such circumstances, the proper officer shall issue the notice at least six
months prior to the time limit specified in section 74(10) for issuance of the Order
i.e. 4 ½ years from the due date of furnishing of annual return for the financial
year to which the tax not paid or short paid or input tax credit wrongly availed or
utilised relates to or from the date of erroneous refund.
Thereafter, the proper officer is required to issue the Order under section 74(9)
within a period of five years from the due date of furnishing of annual return for
the financial year to which the tax not paid or short paid or input tax credit wrongly
availed or utilised relates to or from the date of erroneous refund.
Q 8. How will the taxable person respond to the SCN issued under Section 73 or
Section 74?
Ans. The taxable person shall respond to the notices issued under Section 73 or
Section 74 in FORM GST DRC-06.
Q 9. What is the form and manner in which an order determining tax liability will
be issued under Section 73 or Section 74?
Ans. The order will be a speaking order after following due process of law. A sum-
mary of the order issued under section 73(9) or section 74(9) or section 76(3) shall
be uploaded electronically in FORM GST DRC-07, specifying therein the amount
of tax, interest and penalty payable by the person chargeable with tax.
Q 10. After issuance of order, is it necessary for the proper officer to issue a
recovery notice?
Ans. No. The order itself will be treated as a recovery notice.
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2019 FAQs 383
Q 11. Is there any time limit for adjudication the cases?

Ans:
(i) In case of section 73 (cases other than fraud/suppression of facts/wilful
mis-statement), the time limit for adjudication of cases is 3 years from the
due date for filing of annual return for the financial year to which demand
relates to or the date of erroneous refund/ITC wrongly availed. {sec. 73(10)}
(ii) In case of section 74 (cases of fraud/suppression of facts/wilful mis-state-
ment), the time limit for adjudication is 5 years from the due date for filing
of annual return for the financial year to which demand relates to or the
date of erroneous refund/ITC wrongly availed. {sec.74(10)}
Q 12. If notice is issued under Section 74 and thereafter the noticee makes payment,
is there any need to adjudicate the case?
Ans. Where the person to whom a notice has been issued under sub-section (1) of
section 74, pays the tax along with interest with penalty equal to 25% of such tax
within 30 days of issue of notice, all proceedings in respect of such notice shall be
deemed to be concluded. {Sec. 74(8)}
Q 13. How will rectification of order be done by the proper officer?
Ans. As per Section 161, mistakes apparent on record can be rectified and such
rectification has to be done within 3 months of the date of issue of order. However,
no such rectification will be done after 6 months from the date of the order. This
period of 6 months will not be applicable to rectification of mistakes of purely clerical
or arithmetic in nature arising from accidental slip or omission. Any rectification
of the order, in accordance with the provisions of section 161, shall be made by
the proper officer in FORM GST DRC-08.
Q 14. What are the remedies available to the assessee who have been issued order
under section 74 of the CGST Act?
Ans. Any person served with an order issued under section 74(9) pays the tax along
with interest payable thereon under section 50 and a penalty equivalent to fifty per
cent of such tax within thirty days of communication of the order, all proceedings
in respect of the said notice shall be deemed to be concluded.
Explanation 1.—For the purposes of section 73 and this section, —
(i) the expression “all proceedings in respect of the said notice” shall not include
proceedings under section 132;
(ii) where the notice under the same proceedings is issued to the main person
liable to pay tax and some other persons, and such proceedings against
the main person have been concluded under section 73 or section 74, the
proceedings against all the persons liable to pay penalty under sections 122,
125, 129 and 130 are deemed to be concluded.
Explanation 2.—For the purposes of this Act, the expression “suppression” shall
mean non-declaration of facts or information which a taxable person is required
to declare in the return, statement, report or any other document furnished under
this Act or the rules made thereunder, or failure to furnish any information on
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being asked for, in writing, by the proper officer.

Q 15. What is the time limit for initiation of recovery proceedings under CGST
Act, 2017?
Ans. Any amount payable by a taxable person in pursuance of an order passed
under this Act shall be paid by such person within a period of three months from
the date of service of such order failing which recovery proceedings shall be initi-
ated. Provided that where the proper officer considers it expedient in the interest
of revenue he may, for reasons to be recorded in writing, require the said taxable
person to make such payment within such period less than a period of three months
as may be specified.
Q 16. What is the course of recovery in cases where the tax demand confirmed is
enhanced in appeal/revision proceedings?
Ans. The notice of demand is required to be served only in respect of the enhanced
dues. Insofar as the amount already confirmed prior to disposal of appeal/revision,
the recovery proceedings may be continued from the stage at which such pro-
ceedings stood immediately before such disposal of appeal/revision. {Sec. 84(a)}
Q 17. What are the provisions for recovery of the erstwhile dues in respect of
default of C.Ex. duties and Service Tax in the GST regime?
Ans. As per sub-section (8) of Section 142 of the GST Act,
(a) Where in pursuance of an assessment or adjudication proceedings instituted,
whether, before, on or after the appointed day, under the existing law, any
amount of tax, interest, fine or penalty becomes recoverable from the person,
the same shall, unless recovered under the existing law, be recovered as an
arrear or tax under this Act the amount so recovered shall not be admissible
as input tax credit under this Act;
(b) Where in pursuance of an assessment or adjudication proceedings instituted,
whether before, on or after the appointed day, under the existing law, any
amount of tax, interest, fine or penalty becomes refundable to the taxable
person, the same shall be refunded to him in cash under the said law, not-
withstanding anything to the contrary contained in the said law other than
the provisions of sub-section (2) of Section 11B of the Central Excise Act,1944
(1 of 1944) and the amount rejected, if any, shall not be admissible as input
tax credit under this Act.
Detailed procedure for recovery of arrears under the existing law and reversal of
inadmissible input tax credit has been outlined in the CBIC Circular No. 42/16/2018-
GST, dated 13th April, 2018. It may also be noted that recovery can now be made
using FORM GST DRC-07.
The CENVAT credit of central excise duty or service tax wrongly carried forward
as transitional credit, and the arrears of central excise duty, service tax or wrongly
availed CENVAT credit thereof under the existing law shall be recovered as central
tax liability to be paid through the utilization of amounts available in the electronic
credit ledger or electronic cash ledger of the registered person.
The arrears of interest, penalty and late fee in relation to CENVAT credit wrongly
carried forward, and in relation to arrears of central excise duty, service tax or
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wrongly availed CENVAT credit thereof under the existing law shall be recovered

2019 FAQs 385
as interest, penalty and late fee of central tax to be paid through the utilization of
the amount available in electronic cash ledger of the registered person.
Q 18. What are the modes of recovery of tax available to the proper officer?
Ans. The proper officer may recover the dues in following manner:
(a) Deduction of dues from the amount owned by the tax authorities payable
to such person.
(b) Recovery by way of detaining and selling any goods belonging to such per-
son;
(c) Recovery from other person, from whom money is due or may become
due to such person or who holds or may subsequently hold money for or
on account of such person, to pay to the credit of the Central or a State
Government;
(d) Distrain any movable or immovable property belonging to such person,
until the amount payable is paid. If the dues not paid within 30 days, the
said property is to be sold and with the proceeds of such sale the amount
payable and cost of sale shall be recovered;
(e) Through the Collector of the district in which such person owns any property
or resides or carries on his business, as if it was an arrear of land revenue;
(f) By way of an application to the appropriate Magistrate who in turn shall
proceed to recover the amount as if it were a fine imposed by him;
(g) Through enforcing the bond/instrument executed under this Act or any
rules or regulations made thereunder;
(h) CGST arrears can be recovered as an arrear of SGST and vice-versa.
Q 19. In what manner will the proper officer proceed to recover dues from the
amounts owed to the defaulter?
Ans. Where any amount payable by a defaulter to the Government under any of
the provisions of the Act or the rules made thereunder is not paid, the proper officer
may require, in FORM GST DRC-09, a specified officer to deduct the amount from
any money owing to such defaulter in accordance with the provisions of clause (a)
of sub-section (1) of section 79.
For the purposes of this rule, “specified officer” shall mean any officer of the Central
Government or a State Government or the Government of a Union territory or a
local authority, or of a Board or Corporation or a company owned or controlled,
wholly or partly, by the Central Government or a State Government or the Gov-
ernment of a Union territory or a local authority.
Q 20. What is the procedure for recovery of dues by sale of goods belonging to the
defaulter, which is in the control of the proper officer?
Ans. (1) Where any amount due from a defaulter is to be recovered by selling
goods belonging to such person in accordance with the provisions of clause (b)
of sub-section (1) of section 79, the proper officer shall prepare an inventory and
estimate the market value of such goods and proceed to sell only so much of the
goods as may be required for recovering the amount payable along with the ad-
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ministrative expenditure incurred on the recovery process.

(2) The said goods shall be sold through a process of auction, including e-auction,
for which a notice shall be issued in FORM GST DRC-10 clearly indicating the
goods to be sold and the purpose of sale.
(3) The last day for submission of bid or the date of auction shall not be earlier
than fifteen days from the date of issue of the notice referred to in sub-rule (2):
Provided that where the goods are of perishable or hazardous nature or where the
expenses of keeping them in custody are likely to exceed their value, the proper
officer may sell them forthwith.
(4) The proper officer may specify the amount of pre-bid deposit to be furnished
in the manner specified by such officer, to make the bidders eligible to participate
in the auction, which may be returned to the unsuccessful bidders, forfeited in
case the successful bidder fails to make the payment of the full amount, as the
case may be.
(5) The proper officer shall issue a notice to the successful bidder in FORM GST
DRC-11 requiring him to make the payment within a period of fifteen days from
the date of auction. On payment of the full bid amount, the proper officer shall
transfer the possession of the said goods to the successful bidder and issue a cer-
tificate in FORM GST DRC-12.
(6) Where the defaulter pays the amount under recovery, including any expenses
incurred on the process of recovery, before the issue of the notice under sub-rule
(2), the proper officer shall cancel the process of auction and release the goods.
(7) The proper officer shall cancel the process and proceed for re-auction where
no bid is received or the auction is considered to be non-competitive due to lack
of adequate participation or due to low bids.
Q 21. How will the dues owed by the defaulter be recovered by the proper officer
from a third person (a bank, post office, insurer etc.) who holds money on behalf
of the defaulter?
Ans. (1) The proper officer may serve upon a person referred to in clause (c) of
sub-section (1) of section 79 (referred to in question as “the third person”), a notice
in FORM GST DRC-13 directing him to deposit the amount specified in the notice.
(2) Where the third person makes the payment of the amount specified in the notice
issued under sub-rule (1), the proper officer shall issue a certificate in FORM GST
DRC-14 to the third person clearly indicating the details of the liability so discharged.
Q 22. What will be the consequences, if the third person referred to above, fails to
make payment in pursuance of notice issued in FORM GST DRC-13?
Ans. In case the person to whom a notice under sub-clause (i) has been issued,
fails to make the payment in pursuance thereof to the Government, he shall be
deemed to be a defaulter in respect of the amount specified in the notice and all
the consequences of this Act or the rules made thereunder shall follow.
Further, any person discharging any liability to the person in default after service
on him of the notice issued under sub-clause (i) shall be personally liable to the
Government to the extent of the liability discharged or to the extent of the liability
of the person in default for tax, interest and penalty, whichever is less.
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2019 FAQs 387
Q 23. How can the proper officer recover the dues from the amount payable to the
defaulter as a consequence of execution of a decree of a civil court?
Ans. Where any amount is payable to the defaulter in the execution of a decree of a
civil court for the payment of money or for sale in the enforcement of a mortgage
or charge, the proper officer shall send a request in FORM GST DRC-15 to the said
court and the court shall, subject to the provisions of the Code of Civil Procedure,
1908 (5 of 1908), execute the attached decree, and credit the net proceeds for
settlement of the amount recoverable.
Q 24. What is the manner in which the proper officer will recover dues from the
defaulter by sale of movable or immovable property belonging to the defaulter?
(Rule 147)
Ans. (1) The proper officer shall prepare a list of movable and immovable property
belonging to the defaulter, estimate their value as per the prevalent market price
and issue an order of attachment or distraint and a notice for sale in FORM GST
DRC-16 prohibiting any transaction with regard to such movable and immovable
property as may be required for the recovery of the amount due:
Provided that the attachment of any property in a debt not secured by a nego-
tiable instrument, a share in a corporation, or other movable property not in the
possession of the defaulter except for property deposited in, or in the custody of
any Court, shall be attached in the manner provided in rule 151.
(2) The proper officer shall send a copy of the order of attachment or distraint to
the concerned Revenue Authority or Transport Authority or any such Authority
to place encumbrance on the said movable or immovable property, which shall
be removed only on the written instructions from the proper officer to that effect.
(3) Where the property subject to the attachment or distraint under sub-rule (1) is-
(a) an immovable property, the order of attachment or distraint shall be affixed
on the said property and shall remain affixed till the confirmation of sale;
(b) a movable property, the proper officer shall seize the said property in ac-
cordance with the provisions of chapter XIV of the Act and the custody of
the said property shall either be taken by the proper officer himself or an
officer authorised by him.
(4) The property attached or distrained shall be sold through auction, including
e-auction, for which a notice shall be issued in FORM GST DRC-17 clearly indicating
the property to be sold and the purpose of sale.
(5) Notwithstanding anything contained in the provision of this Chapter, where
the property to be sold is a negotiable instrument or a share in a corporation, the
proper officer may, instead of selling it by public auction, sell such instrument or
a share through a broker and the said broker shall deposit to the Government so
much of the proceeds of such sale, reduced by his commission, as may be required
for the discharge of the amount under recovery and pay the amount remaining,
if any, to the owner of such instrument or a share.
(6) The proper officer may specify the amount of pre-bid deposit to be furnished
in the manner specified by such officer, to make the bidders eligible to participate
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in the auction, which may be returned to the unsuccessful bidders or, forfeited

in case the successful bidder fails to make the payment of the full amount, as the
case may be.
(7) The last day for the submission of the bid or the date of the auction shall not
be earlier than fifteen days from the date of issue of the notice referred to in sub-
rule (4):
Provided that where the goods are of perishable or hazardous nature or where the
expenses of keeping them in custody are likely to exceed their value, the proper
officer may sell them forthwith.
(8) Where any claim is preferred or any objection is raised with regard to the
attachment or distraint of any property on the ground that such property is not
liable to such attachment or distraint, the proper officer shall investigate the claim
or objection and may postpone the sale for such time as he may deem fit.
(9) The person making the claim or objection must adduce evidence to show that
on the date of the order issued under sub-rule (1) he had some interest in, or was
in possession of, the property in question under attachment or distraint.
(10) Where, upon investigation, the proper officer is satisfied that, for the reason
stated in the claim or objection, such property was not, on the said date, in the
possession of the defaulter or of any other person on his behalf or that, being in
the possession of the defaulter on the said date, it was in his possession, not on his
own account or as his own property, but on account of or in trust for any other
person, or partly on his own account and partly on account of some other person,
the proper officer shall make an order releasing the property, wholly or to such
extent as he thinks fit, from attachment or distraint.
(11) Where the proper officer is satisfied that the property was, on the said date,
in the possession of the defaulter as his own property and not on account of any
other person, or was in the possession of some other person in trust for him, or in
the occupancy of a tenant or other person paying rent to him, the proper officer
shall reject the claim and proceed with the process of sale through auction.
(12) The proper officer shall issue a notice to the successful bidder in FORM GST
DRC-11 requiring him to make the payment within a period of fifteen days from the
date of such notice and after the said payment is made, he shall issue a certificate
in FORM GST DRC-12 specifying the details of the property, date of transfer, the
details of the bidder and the amount paid and upon issuance of such certificate,
the rights, title and interest in the property shall be deemed to be transferred to
such bidder:
Provided that where the highest bid is made by more than one person and one of
them is a co-owner of the property, he shall be deemed to be the successful bidder.
(13) Any amount, including stamp duty, tax or fee payable in respect of the transfer
of the property specified in sub-rule (12), shall be paid to the Government by the
person to whom the title in such property is transferred.
(14) Where the defaulter pays the amount under recovery, including any expenses
incurred on the process of recovery, before the issue of the notice under sub-rule
(4), the proper officer shall cancel the process of auction and release the goods.
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2019 FAQs 389
(15) The proper officer shall cancel the process and proceed for re-auction where
no bid is received or the auction is considered to be non-competitive due to lack
of adequate participation or due to low bids.
Q 25. In what manner will a proper officer attach any property in a debt not secured
by a negotiable instrument, a share in a corporation, or other movable property
not in the possession of the defaulter? (Rule 151)
Ans. (1) A debt not secured by a negotiable instrument, a share in a corporation, or
other movable property not in the possession of the defaulter except for property
deposited in, or in the custody of any court shall be attached by a written order in
FORM GST DRC-16 prohibiting, -
(a) in the case of a debt, the creditor from recovering the debt and the debtor
from making payment thereof until the receipt of a further order from the
proper officer;
(b) in the case of a share, the person in whose name the share may be standing
from transferring the same or receiving any dividend thereon;
(c) in the case of any other movable property, the person in possession of the
same from giving it to the defaulter.
(2) A copy of such order shall be affixed on some conspicuous part of the office of
the proper officer, and another copy shall be sent, in the case of debt, to the debtor,
and in the case of shares, to the registered address of the corporation and in the
case of other movable property, to the person in possession of the same.
(3) A debtor, prohibited under clause (a) of sub-rule (1), may pay the amount of
his debt to the proper officer, and such payment shall be deemed as paid to the
defaulter.
Q 26. In what manner, will attachment of any property in the custody of courts
take place? (Rule 152)
Ans. Where the property to be attached is in the custody of any court or Public
Officer, the proper officer shall send the order of attachment to such court or offi-
cer, requesting that such property, and any interest or dividend becoming payable
thereon, may be held till the recovery of the amount payable.
Q 27. How will proper officer attach an interest in partnership of the defaulter?
(Rule 153)
Ans. (1) Where the property to be attached consists of an interest of the defaulter,
being a partner, in the partnership property, the proper officer may make an order
charging the share of such partner in the partnership property and profits with
payment of the amount due under the certificate, and may, by the same or subse-
quent order, appoint a receiver of the share of such partner in the profits, whether
already declared or accruing, and of any other money which may become due to
him in respect of the partnership, and direct accounts and enquiries and make an
order for the sale of such interest or such other order as the circumstances of the
case may require.
(2) The other partners shall be at liberty at any time to redeem the interest charged
or, in the case of a sale being directed, to purchase the same.
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Q 28. How will the amounts recovered as proceeds of sale of goods or movable or
immovable property be appropriated? (Rule 154)
Ans. The amounts so realised from the sale of goods, movable or immovable
property, for the recovery of dues from a defaulter shall, —
(a) first, be appropriated against the administrative cost of the recovery process;
(b) next, be appropriated against the amount to be recovered;
(c) next, be appropriated against any other amount due from the defaulter
under the Act or the IGST/UTGST/SGST Act(s), 2017 and the rules made
thereunder; and
(d) any balance, be paid to the defaulter.
Q 29. How will the proper officer make recovery of dues of the defaulter through
land revenue authority?
Ans. Where an amount is to be recovered in accordance with the provisions of clause
(e) of sub-section (1) of section 79, the proper officer shall send a certificate to the
Collector or Deputy Commissioner of the district or any other officer authorised
in this behalf in FORM GST DRC-18 to recover from the person concerned, the
amount specified in the certificate as if it were an arrear of land revenue.
Q 30. How will the amount be recovered from the defaulter, if it is to be recovered
as a fine imposed under the Code of Criminal Procedure, 1973?
Ans. Where an amount is to be recovered as if it were a fine imposed under the
Code of Criminal Procedure, 1973, the proper officer shall make an application
before the appropriate Magistrate in accordance with the provisions of clause (f)
of sub-section (1) of section 79 in FORM GST DRC-19 to recover from the person
concerned, the amount specified thereunder as if it were a fine imposed by him.
Q 31. Can the amount due from the defaulter be recovered from the surety?
Ans. Yes. Where any person has become surety for the amount due by the default-
er, he may be proceeded against under this Chapter as if he were the defaulter.
(Rule 157)
Q 32. Whether the payment of tax dues can be made in instalments?
Ans. Yes, a person can request for payment of any amount due under the Act, other
than the amount due as per the liability self-assessed in any return, in monthly
instalments not exceeding twenty-four, subject to payment of interest under section
50 with such limitations and conditions as may be prescribed.
However, where there is default in payment of any one instalment on its due date,
the whole outstanding balance payable on such date shall become payable and
recovered without any further notice. {sec. 80 of CGST Act}
Q 33. In what manner, will the Commissioner deal with a request for payment of
tax and other amounts in instalments? (Rule 158)
Ans. (1) On an application filed electronically by a taxable person, in FORM GST
DRC-20, seeking extension of time for the payment of taxes or any amount due
under the Act or for allowing payment of such taxes or amount in instalments
in accordance with the provisions of E-JOURNAL
section 80, the Commissioner shall call for

2019 FAQs 391
a report from the jurisdictional officer about the financial ability of the taxable
person to pay the said amount.
(2) Upon consideration of the request of the taxable person and the report of the
jurisdictional officer, the Commissioner may issue an order in FORM GST DRC-21
allowing the taxable person further time to make payment and/or to pay the amount
in such monthly instalments, not exceeding twenty-four, as he may deem fit.
(3) The facility shall not be allowed where-
(a) the taxable person has already defaulted on the payment of any amount
under the Act or the IGST/UTGST/SGST Act(s), 2017, for which the recovery
process is on;
(b) the taxable person has not been allowed to make payment in instalments
in the preceding financial year under the Act or the IGST/UTGST/SGST
Act(s), 2017;
(c) the amount for which instalment facility is sought is less than twenty-five
thousand rupees.
Q 34. In what manner will provisional attachment of property take place? (Rule 159)
Ans. (1) Where the Commissioner decides to attach any property, including bank
account in accordance with the provisions of section 83, he shall pass an order
in FORM GST DRC-22 to that effect mentioning therein, the details of property
which is attached.
(2) The Commissioner shall send a copy of the order of attachment to the concerned
Revenue Authority or Transport Authority or any such Authority to place encum-
brance on the said movable or immovable property, which shall be removed only
on the written instructions from the Commissioner to that effect.
(3) Where the property attached is of perishable or hazardous nature, and if the
taxable person pays an amount equivalent to the market price of such property
or the amount that is or may become payable by the taxable person, whichever is
lower, then such property shall be released forthwith, by an order in FORM GST
DRC-23, on proof of payment.
(4) Where the taxable person fails to pay the amount referred to in sub-rule (3) in
respect of the said property of perishable or hazardous nature, the Commissioner
may dispose of such property and the amount realized thereby shall be adjusted
against the tax, interest, penalty, fee or any other amount payable by the taxable
person.
(5) Any person whose property is attached may, within seven days of the attach-
ment under sub-rule (1), file an objection to the effect that the property attached
was or is not liable to attachment, and the Commissioner may, after affording
an opportunity of being heard to the person filing the objection, release the said
property by an order in FORM GST DRC- 23.
(6) The Commissioner may, upon being satisfied that the property was, or is no
longer liable for attachment, release such property by issuing an order in FORM
GST DRC- 23.
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Q 35. How will notice of tax dues be given to the liquidator in terms of Section 88?
Ans. Where the company is under liquidation as specified in section 88, the Com-
missioner shall notify the liquidator for the recovery of any amount representing
tax, interest, penalty or any other amount due under the Act in Form GST DRC-24.
Q 36. How will the order for reduction or enhancement of any demand in terms
of Section 84 be given? (Rule 161)
Ans. The order for the reduction or enhancement of any demand under section
84 shall be issued in Form GST DRC-25.
Q 37. Can recovery of arrears of a person registered in one State be effected from
a distinct person located in another State?
Ans. Yes, vide the CGST (Amendment) Act, 2018, an explanation clause has been
inserted in section 79 of the CGST Act, 2017 to the effect that person in section
79 includes “distinct persons” as referred to in sub-section (4) or, as the case may
be, sub-section (5) of section 25. Thus, the tax dues are recoverable from all the
persons having the same PAN. (This provision is yet to be notified)
16. appeals/Revision
Q 1. Who is an adjudicating authority under GST?

Ans. “Adjudicating authority” means any authority, appointed or authorised to
pass any order or decision under this Act, but does not include the Central Board
of Indirect Taxes and Customs (CBIC), the Revisional Authority, the Authority
for Advance Ruling, the Appellate Authority for Advance Ruling, the Appellate
Authority, the Appellate Tribunal and the Authority referred to in sub-section (2)
of section 171 (National Anti-Profiteering Authority).
Q 2. Whether any person aggrieved by any order or decision passed against him
has the right to appeal?
Ans. Yes. Any person aggrieved by any order or decision passed under the GST
Act(s) has the right to appeal to the Appellate Authority under Section 107. It must
be an order or decision passed by an “adjudicating authority”.
However, some decisions or orders (as provided for in Section 121) are not
appealable.
Q 3. Who is an appellate authority under GST?
Ans. “Appellate Authority” means an authority appointed or authorised to hear
appeals as referred to in section 107.
Q 4. What is the time limit within which appeals should be filed against any order
under GST?
Ans. For an Appeal by the aggrieved person - Appeal to the prescribed Appellate
Authority has to be made within three months from the date on which the said
decision or order is communicated to such person.
For an appeal by the department (Revenue) - the time limit is 6 months within which
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review proceedings have to be completed and appeal filed before the Appellate

2019 FAQs 393
Authority. The Commissioner of CGST/SGST may, in case he is of the opinion that

the order passed by the adjudicating authority is not legal and proper, by order,
direct any officer subordinate to him to apply to the Appellate Authority within
six months from the date of communication of the said decision or order for the
determination of such points arising out of the said decision or order as may be
specified by the Commissioner in his order.
The appellate authority can condone a delay of up to one month from the end
of the prescribed period of 3/6 months for filing the appeal (3+1/6+1), provided
there is “sufficient cause” as laid down in the section 107(4). A delay beyond one
month cannot be condoned by the appellate authority under any circumstances.
Q 5. Who are the proper officers to whom appeals will lie under GST?
Ans. The Appellate Authorities under the CGST and SGST Act(s) are as under:
For an appealable order passed under the CGST Act
Any person aggrieved by any decision or order passed under this Act or the SGST/
UTGST Act may appeal to —
(a) the Commissioner (Appeals) where such decision or order is passed by the
Additional or Joint Commissioner;
(b) any officer not below the rank of Joint Commissioner (Appeals) where
such decision or order is passed by the Deputy or Assistant Commissioner
or Superintendent, within three months from the date on which the said
decision or order is communicated to such person.
(Rule 109A of the CGST Rules, 2017)
For an appealable order passed under the respective SGST Act
Any person aggrieved by any decision or order passed under the SGST Act or the
CGST Act may appeal to —
(a) the Additional Commissioner where such decision or order is passed by the
Joint Commissioner;
(b) the Joint Commissioner (Appeals) where such decision or order is passed
by the Deputy Commissioner;
(c) the Deputy Commissioner (Appeals) where such decision or order is passed
by the Assistant Commissioner or State Tax Officer, within three months
from the date on which the said decision or order is communicated to such
person.
Q 6. Whether appeal can be filed to CGST Appellate Authority against the order
passed by an officer of SGST or vice versa?
Ans. Section 6(3) of the CGST Act specifically mandates that any proceedings for
rectification, appeal and revision, wherever applicable, of any order passed by an
officer appointed under CGST Act shall not lie before an officer appointed under
the SGST or UTGST Act. Similar provisions exist in SGST/UTGST Act also. Thus
appeal against any order passed by CGST officer lie before the Appellate Authority
specified under the CGST Act. Similarly appeal against any order passed by SGST
officer lie before the Appellate Authority specified under the SGST Act.
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Q 7. If the proper officer of CGST passes an order under the CGST Act, can such
proper officer issue an order under the corresponding State/UTGST Act?
Ans. Yes. Where any proper officer issues an order under the CGST Act, he shall
also issue an order under the SGST/UTGST Act, as authorised by the SGST/UTGST
Act, under intimation to the jurisdictional officer of State tax or Union territory
tax. Similar provisions exist under the SGST/UTGST Act also.
Q 8. Does the Appellate Authority have the power to condone any delay beyond
three/six months in filing of appeal. If so, what is the period of delay that can be
condoned by the Appellate Authority?
Ans. Yes. The Appellate Authority may, if he is satisfied that the appellant was pre-
vented by sufficient cause from presenting the appeal within the period of three
months (for aggrieved person) or six months (for revenue), as the case may be,
allow it to be presented within a further period of one month. A delay beyond one
month cannot be condoned by the Appellate Authority under any circumstances.
Q 9. Is there any requirement of any pre-deposit for filing of appeal before the
Appellate Authority?
Ans. Yes. Such a requirement is there where the appeal is filed by the aggrieved
person (i.e. taxable person and not departmental officer). No appeal shall be admitted
unless the appellant has paid—
(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising
from the impugned order, as is admitted by him; and
(b) a sum equal to ten per cent of the remaining amount of tax in dispute arising
from the said order, in relation to which the appeal has been filed.
This 10% shall be subject to a maximum limit of ` 50 crores (` 25 crores each under
CGST and SGST) as per the CGST (Amendment) Act, 2018, however, the notification
to bring the Act into effect is yet to be issued.
Q 10. Whether the Appellate Authority has any powers to allow additional grounds
not specified in the appeal memo?
Ans. Yes. He has the powers to allow additional grounds not specified in the grounds
of appeal if he is satisfied that the omission was not wilful or unreasonable. (Section
107(10) of the CGST Act, 2017)
Q 11. Is there any format in which appeal has to be filed before the Appellate
Authority?
Ans. Yes. Appeal has to be filed in FORM GST APL-03 along with relevant docu-
ments. (Rule 109 of CGST Rules).
Q 12. If an appeal is filed and pre-deposit made, can the Revenue authorities still
proceed and recover the balance amount?
Ans. No. In terms of Section 107(7) of CGST Act, 2017, where the appellant has
paid the amount of prescribed amount of pre-deposit, the recovery proceedings
for the balance amount shall be deemed to have been stayed.
Q 13. Is there any time limit within which the Appellate Authority has to decide
the appeal? E-JOURNAL
Ans. Yes, however, the limit is recommendatory in nature. As per section 107(13) of

2019 FAQs 395
CGST Act, 2017, the Appellate Authority shall, where it is possible to do so, hear and
decide every appeal within a period of one year from the date on which it is filed.
This has been done to avoid deliberate acts to delay the process to get substantive
benefits which is not desirable.
Further, there is a provision of not granting more than three adjournments during
an appeal so as to speed up the process.
Q 14. Does the Appellate Authority have the power to remand the case back to the
adjudicating authority?
Ans. No. As per the mandate of Section 107(11) of the CGST Act, 2017, the Appellate
Authority shall, after making such further inquiry as may be necessary, pass such
order, as it thinks just and proper, confirming, modifying or annulling the decision
or order appealed against but shall not refer the case back to the adjudicating
authority that passed the said decision or order.
Q 15. Can the Appellate Authority enhance any fees/penalty/fine in lieu of con-
fiscation or reduce any amount of refund or ITC etc. from that contained in the
order of the Adjudicating Authority?
Ans. Yes. However, an order enhancing any fee or penalty or fine in lieu of confis-
cation or confiscating goods of greater value or reducing the amount of refund or
input tax credit shall not be passed unless the appellant has been given a reasonable
opportunity of showing cause against the proposed order.
Q 16. Can the Appellate Authority enhance any tax demand from that contained
in the order of adjudicating authority?
Ans. Yes. However, where the Appellate Authority is of the opinion that any tax has
not been paid or short-paid or erroneously refunded, or where input tax credit has
been wrongly availed or utilised, no order requiring the appellant to pay such tax or
input tax credit shall be passed unless the appellant is given notice to show cause
against the proposed order and the order is passed within the time limit specified
under section 73 or section 74.
Q 17. Who is the Revisional Authority under GST?
Ans. “Revisional Authority” means an authority appointed or authorised for revision
of decision or orders as referred to in section 108.
Q 18. What are the powers of the Revisional Authority?
Ans. The Revisional Authority may, on his own motion, or upon information
received by him or on request from the Commissioner of State tax, or the Commis-
sioner of Union territory tax, call for and examine the record of any proceedings,
and if he considers that any decision or order passed under this Act or under
the SGST/UTGST by any officer subordinate to him is erroneous insofar as it is
prejudicial to the interest of revenue and is illegal or improper or has not taken
into account certain material facts, whether available at the time of issuance of
the said order or not or in consequence of an observation by the Comptroller and
Auditor General of India, he may, if necessary, stay the operation of such decision
or order for such period as he deems fit and after giving the person concerned
an opportunity of being heard and after making such further inquiry as may be
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necessary, pass such order, as he thinks just and proper, including enhancing or
modifying or annulling the said decision or order. Such powers are generally to

be exercised within three years from passing of the decision or order sought to
be revised.
Q 19. What are the circumstances in which the Revisional Authority shall not
exercise his power?
Ans. The Revisional Authority shall not exercise any power under sub-section (1)
of Section 108, if—
(a) the order has been subject to an appeal under section 107 (Appellate
Authority) or section 112 (Tribunal) or section 117 (High Court) or section
118 (Supreme Court); or
(b) the period specified under sub-section (2) of section 107 has not yet expired
or more than three years have expired after the passing of the decision or
order sought to be revised; or
(c) the order has already been taken for revision under this section at an earlier
stage; or
(d) the order has been passed in exercise of the powers under sub-section (1):
However, the Revisional Authority may pass an order under sub-section (1) on
any point which has not been raised and decided in an appeal referred to in clause
(a) above, before the expiry of a period of one year from the date of the order in
such appeal or before the expiry of a period of three years referred to in clause
(b) above, whichever is later.
Thus, if the impugned order is subject matter of an appeal, revision proceedings
will not be taken up in respect of the said order.
Q 20. An order can be taken up for revision within a time period of three years
from the date of passing of the original order. Can this time period of 3 years be
relaxed under any circumstances?
Ans. Yes. If the said decision or order involves an issue on which the Appellate
Tribunal or the High Court has given its decision in some other proceedings and
an appeal to the High Court or the Supreme Court against such decision of the
Appellate Tribunal or the High Court is pending, the period spent between the
date of the decision of the Appellate Tribunal and the date of the decision of the
High Court and the date of the decision of the Supreme Court shall be excluded in
computing the period of limitation of three years where proceedings for revision
have been initiated by way of issue of a notice under this section.
Further, where the issuance of an order of revision is stayed by the order of a court
or Appellate Tribunal, the period of such stay shall be excluded in computing the
period of limitation of three years.
Q 21. To whom will an appeal lie against the order of the appellate and revisional
authority?
Ans. The appeal against the order of the appellate authority will lie before the GST
Tribunal.
Q 22. What is the structure of Tribunal envisaged under GST?
Ans. A two tier Tribunal structure E-JOURNAL
is envisaged under GST, which will hear and
decide appeals filed against orders of appellate and revisional authority. There shall
2019 FAQs 397
be a National Bench and Regional Benches and there shall be a State Bench and
Area Benches of the Tribunal.
Q 23. What is the jurisdiction of the National (& Regional Benches) & the State
(& Area Benches) of the Tribunal?
Ans. The National Bench or Regional Benches of the Appellate Tribunal shall have
jurisdiction to hear appeals against the orders passed by the Appellate Authority
or the Revisional Authority in the cases where one of the issues involved relates
to the place of supply.
The State Bench or Area Benches shall have jurisdiction to hear appeals against
the orders passed by the Appellate Authority or the Revisional Authority in the
cases involving matters other than those cases where the issues involved relates
to the place of supply.
Q 24. What would be the composition of National/Regional Bench?
Ans. The National Bench shall be presided over by the President and shall consist
of one Technical Member (Centre) and one Technical Member (State).
The Regional Benches shall consist of a Judicial Member, one Technical Member
(Centre) and one Technical Member (State).
Q 25. What would be the composition of the State/Area Benches?
Ans. Each State Bench and Area Benches of the Appellate Tribunal shall consist
of a Judicial Member, one Technical Member (Centre) and one Technical Member
(State) and the State Government may designate the senior most Judicial Member
in a State as the State President.
Q 26. What happens in case of difference of opinion amongst the members of the
Bench?
Ans. If the Members of the National Bench, Regional Benches, State Bench or Area
Benches differ in opinion on any point or points, it shall be decided according to
the opinion of the majority, if there is a majority, but if the Members are equally
divided, they shall state the point or points on which they differ, and the case shall
be referred by the President or as the case may be, State President for hearing on
such point or points to one or more of the other Members of the National Bench,
Regional Benches, State Bench or Area Benches and such point or points shall be
decided according to the opinion of the majority of Members who have heard the
case, including those who first heard it.
Q 27. What is the time limit within which an aggrieved person should file an appeal
before the Tribunal?
Ans. Any person aggrieved by an order passed against him under section 107 (by the
Appellate Authority or section 108 (revisional authority) may appeal to the Appellate
Tribunal against such order within three months from the date on which the order
sought to be appealed against is communicated to the person preferring the appeal.
Q 28. How can Revenue file appeals against orders of Appellate/Revisional Au-
thority? What is the time limit for filing such appeals by the Revenue?
Ans. Revenue appeals before the Tribunal are filed by way of a review mechanism.
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The Commissioner may, on his own motion, or upon request from the Commissioner
of State tax or Commissioner of Union territory tax, call for and examine the record
of any order passed by the Appellate Authority or the Revisional Authority under
the CGST Act or the SGST/UTGST Act for the purpose of satisfying himself as
to the legality or propriety of the said order and may, by order, direct any officer
subordinate to him to apply to the Appellate Tribunal within six months from the
date on which the said order has been passed for determination of such points
arising out of the said order as may be specified by the Commissioner in his order.
Q 29. Does the Appellate Tribunal have power to condone the delay in filing ap-
peal/memorandum of cross objections, by the aggrieved person/Revenue. If so,
to what extent?
Ans. The Appellate Tribunal may admit an appeal within three months after the
expiry of the period referred to in Section 112(1) (which is three months for ag-
grieved person and six months for Revenue), or permit the filing of a memorandum
of cross-objections within forty-five days after the expiry of the period referred to
Section 112(5) (which is 45 days from the date of receipt of appeal) if it is satisfied
that there was sufficient cause for not presenting it within that period.
Thus, the Tribunal does not have unlimited powers to condone the delay of any
period. A delay of only upto three months can be condoned by the Tribunal.
Q 30. What is memorandum of cross objections? What is the time limit for filing
memorandum of cross objections before Tribunal?
Ans. A memorandum of cross objection is a tool to file an appeal at a later stage
even though a decision not to file an appeal has been earlier taken and the time limit
for filing such an appeal is already over, when the other party prefers an appeal
in the case. Thus, in the event of an aggrieved person filing appeal, the respondent
can also file memorandum of cross objections to be treated as appeal filed by him.
As per section 112(5) of the CGST Act, 2017, the party against whom the appeal has
been filed, may, notwithstanding that he may not have appealed against such order
or any part thereof, file, within forty-five days of the receipt of notice of appeal, file
a memorandum of cross-objections, against any part of the order appealed against
and such memorandum shall be disposed of by the Appellate Tribunal, as if it were
an appeal presented within the prescribed time limit specified for filing appeal.
Q 31. Is there any prescribed form for filing an appeal before the Appellate Tribunal?
Ans. Yes. The appeal has to be filed FORM GST APL-05 as prescribed under rule
110 of the CGST Rules, 2017.
Q 32. What are the pre-deposit requirements for an appeal to be heard by the
Appellate Tribunal?
Ans. No appeal shall be filed under Section 112(8), unless the appellant has paid—
(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising
from the impugned order, as is admitted by him, and
(b) a sum equal to twenty per cent of the remaining amount of tax in dispute,
in addition to the amount paid under sub-section (6) of section 107 (amount
of pre-deposit paid before the Appellate Authority), arising from the said
order, in relation to which the appeal has been filed.
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2019 FAQs 399
This 20% shall be subject to a maximum limit of ` 100 crores (` 50 crores each
under CGST and SGST) as per the CGST (Amendment) Act, 2018, however, the
notification to bring the Act into effect is yet to be issued.
Q 33. If the pre-deposit amount becomes refundable to the taxable person as a
consequence of the favourable decision in appeal, will any interest be paid on such
amount?
Ans. Yes. As per section 115 of the CGST Act, where an amount paid by the appellant
under section 107(6) (Appellate Authority) or section 112(8) (Appellate Tribunal)
is required to be refunded consequent to any order of the Appellate Authority or
of the Appellate Tribunal, interest at the rate specified under section 56 shall be
payable in respect of such refund from the date of payment of the amount (not
from date of order-in-appeal) till the date of refund of such amount. The rate of
interest notified is six per cent.
Q 34. Does the Tribunal have any power to amend its own order?
Ans. Yes. The Appellate Tribunal may amend any order passed by it so as to rectify
any error apparent on the face of the record, if such error is noticed by it on its
own accord, or is brought to its notice by the Commissioner or the Commissioner
of State tax or the Commissioner of the Union territory tax or the other party to
the appeal within a period of three months from the date of the order:
Provided that no amendment which has the effect of enhancing an assessment or
reducing a refund or input tax credit or otherwise increasing the liability of the
other party, shall be made under this sub-section, unless the party has been given
an opportunity of being heard.
Q 35. To which authority will further appeals lie from the order of Appellate Tribunal?
Ans. Any person aggrieved by any order passed by the State Bench or Area Bench-
es of the Appellate Tribunal may file an appeal to the High Court and the High
Court may admit such appeal, if it is satisfied that the case involves a substantial
question of law.
Against an order of the National Bench/Regional Benches, the appeal will lie to
the Hon’ble Supreme Court.
Q 36. What is the time limit within which an appeal has to be filed before the
High Court?
Ans. An appeal before the High court has to be within a period of one hundred
and eighty days from the date on which the order appealed against is received by
the aggrieved person and it shall be in such form, verified in such manner as may
be prescribed:
However, the High Court can entertain an appeal after the expiry of the said period
if it is satisfied that there was sufficient cause for not filing it within such period.
Q 37. Against which orders will appeals lie to the Hon’ble Supreme Court?
Ans. An appeal shall lie to the Supreme Court—
(a) from any order passed by the National Bench or Regional Benches of the
Appellate Tribunal; or E-JOURNAL
(b) from any judgment or order passed by the High Court in an appeal made
under section 117 in any case which, on its own motion or on an application
made by or on behalf of the party aggrieved, immediately after passing of
the judgment or order, the High Court certifies to be a fit one for appeal to
the Supreme Court.
Q 38. Which are the orders against which no appeal shall lie?
Ans. No appeal shall lie against any decision taken or order passed by an officer
of central tax if such decision taken or order passed relates to any one or more of
the following matters, namely:—
(a) an order of the Commissioner or other authority empowered to direct
transfer of proceedings from one officer to another officer; or
(b) an order pertaining to the seizure or retention of books of account, register
and other documents; or
(c) an order sanctioning prosecution under this Act; or
(d) an order passed under section 80. (Payment of tax in instalments).
Q 39. In case the aggrieved person prefers an appeal before the High Court/
Supreme Court, will the sums due on account of order of Tribunal be payable?
Ans. Yes. Notwithstanding that an appeal has been preferred to the High Court or
the Supreme Court, sums due to the Government as a result of an order passed by
the National Bench or Regional Benches of the Appellate Tribunal under sub-section
(1) of section 113 or an order passed by the State Bench or Area Benches of the
Appellate Tribunal under sub-section (1) of section 113 or an order passed by the
High Court under section 117, as the case may be, shall be payable in accordance
with the order so passed.
Thus, unless the Hon’ble High Court/Supreme Court stays the operation of the
order of the Tribunal, the amount due will be payable by the taxable person.
Q 40. Does the Board have the powers to issue directions fixing any monetary
limits for filing of appeals?
Ans. Yes. The Board may, on the recommendations of the Council, from time to
time, issue orders or instructions or directions fixing such monetary limits, as it
may deem fit, for the purposes of regulating the filing of appeal or application by
the officer of the central tax. No such circular has been issued so far.
Q 41. Whether the fee paid by litigants in the Consumer Disputes Redressal Com-
missions are leviable to GST?
Ans. Services by any court or Tribunal established under any law for the time
being in force is neither a supply of goods nor services.
It has been clarified vide CBIC Circular No. 32/06/2018, dated 12th February, 2018
that fee paid by litigants in the Consumer Disputes Redressal Commissions are not
leviable to GST. Any penalty imposed by or amount paid to these Commissions
will also not attract GST.
Q 42. What is the concept of authorised representative in GST?
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Ans. Any person who is entitled or required to appear before an officer appointed
under the CGST Act, or the Appellate Authority or the Appellate Tribunal in con-
2019 FAQs 401
nection with any proceedings, may, otherwise than when required under this Act
to appear personally for examination on oath or affirmation, authorise a person
to appear on his behalf. A person can authorise to appear on his behalf as his
representative:
(a) his relative or regular employee; or
(b) an advocate who is entitled to practice in any court in India, and who has
not been debarred from practicing before any court in India; or
(c) any chartered accountant, a cost accountant or a company secretary, who
holds a certificate of practice and who has not been debarred from practice;
or
(d) a retired officer of the Commercial Tax Department of any State Govern-
ment or Union territory or of the Board who, during his service under the
Government, had worked in a post not below the rank than that of a Group-B
Gazetted officer for a period of not less than two years:
Provided that such officer shall not be entitled to appear before any proceed-
ings under this Act for a period of one year from the date of his retirement
or resignation; or
(e) any person who has been authorised to act as a GST Practitioner on behalf
of the concerned registered person.
(Section 116 of the CGST Act, 2017)
Q 43. How can a taxpayer search for a GST Practitioner?
Ans. There is a functionality on the dashboard of the registered person on the GST
Portal wherein he can get the contact details of all GST Practitioners in a State,
district and pin code wise.
Q 44. Can a person be disqualified to act as authorised representative?
Ans. Yes, where an authorised representative, other than those referred to in clause
(b) or clause (c) in above question, upon an enquiry into the matter, guilty of mis-
conduct in connection with any proceedings under the Act, the Commissioner may,
after providing him an opportunity of being heard, disqualify him from appearing
as an authorised representative.
(Rule 116 of the CGST Rules, 2017)
Any person who has been disqualified under the provisions of the SGST/UTGST
Act shall be deemed to be disqualified under this CGST Act and vice versa.
(Section 116(4) of the CGST Act, 2017)
17. advance Ruling
Q 1. What is the meaning of Advance Ruling?

Ans. An ‘Advance Ruling’ means a decision provided by the authority or the Ap-
pellate Authority to an applicant on matters or on questions specified in section
97(2) or 100(1) of CGST/SGST Act E-JOURNAL
as the case may be, in relation to the supply
of goods and/or services proposed to be undertaken or being undertaken by the

applicant. (section 95 of CGST/SGST Law and section 12 of UTGST law) Authority
for Advance Rulings (AAR) are appointed under the respective SGST/UTGST Act(s)
and the same are deemed to be the Authority for advance ruling under CGST Act
also in respect of that State or Union territory.
Q 2. Which are the questions for which advance ruling can be sought?
Ans. Advance Ruling can be sought for the following questions:
(a) classification of any goods or services or both;
(b) applicability of a notification issued under provisions of the GST Act(s);
(c) determination of time and value of supply of goods or services or both;
(d) admissibility of input tax credit of tax paid or deemed to have been paid;
(e) determination of the liability to pay tax on any goods or services under the
Act;
(f) whether applicant is required to be registered under the Act;
(g) whether any particular thing done by the applicant with respect to any goods
or services amounts to or results in a supply of goods or services, within the
meaning of that term.
Q 3. Whether questions relating to place of supply can be asked under Advance
Ruling Mechanism?
Ans. No.
Q 4. What is the objective of having a mechanism of Advance Ruling?
Ans. The broad objective for setting up such an authority is to:
(i) provide certainty in tax liability in advance in relation to an activity being
undertaken or proposed to be undertaken by the applicant;
(ii) helps taxpayer in financial planning and making new investments;
(iii) attract Foreign Direct Investment (FDI);
(iv) reduce litigation;
(v) pronounce ruling expeditiously in transparent and inexpensive manner.
Q 5. What will be the composition of Authority for Advance Rulings (AAR) under
GST?
Ans. ‘Authority for Advance Ruling’ (AAR) shall comprise one member CGST
and one member SGST/UTGST. They will be appointed by the Central and State
government respectively.
Q 6. Is it necessary for a person seeking advance ruling to be registered?
Ans. No, any person registered under the GST Act(s) or desirous of obtaining reg-
istration can be an applicant. (Section 95(b)).
Q 7. At what time an application for advance ruling be made?
Ans. An applicant can apply for advance ruling even before taking up a transaction
(proposed supply of goods or services) or in respect of a supply which is being
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2019 FAQs 403
undertaken. The only restriction is that the question being raised is already not
pending or decided in any proceedings in the case of applicant.
Q 8. What is the fees for filing an application before AAR and AAAR?
Ans. A fee of ` 10,000/- (Rupees Five thousand each under CGST and SGST Act)
has to be deposited along with every application GST ARA-01 to AAR.
A fee of ` 20,000/- (Rupees Ten thousand each under CGST and SGST Act) has to
be deposited along with every application GST ARA-02 to AAAR.
In respect of application by department in Form GST ARA-03, no fee is required
to be enclosed.
Q 9. In how much time will the Authority for Advance Rulings have to pronounce
its ruling?
Ans. As per Section 98(6) of CGST/SGST Act, the Authority shall pronounce its
ruling in writing within ninety days from the date of receipt of application.
Q 10. What is the Appellate Authority for Advance Ruling (AAAR)?
Ans. Appellate Authority for Advance Ruling (AAAR), shall be constituted under
the SGST Act or UTGST Act and such AAAR shall be deemed to be the Appellate
Authority under the CGST Act in respect of the respective State or Union Territory.
An applicant, or the jurisdictional officer, if aggrieved by any advance ruling, may
appeal to the Appellate Authority.
Q 11. How many AAR and AAAR are constituted under GST?
Ans. There is one AAR and AAAR constituted for each State. Details of addresses,
contact details along with emails of AAR are available at-
http://www.gstcouncil.gov.in/sites/default/files/Details% 20of%20AAR%2030-11-
18.pdf. Similarly, the details of AAAR are available at-
http://www.gstcouncil.gov.in/sites/default/files/AAAR-as-on-14-12-2018.pdf .
Q 12. To whom will the Advance Ruling be applicable?
Ans. The advance rulings are given in personam and not in rem, that is, not to the
whole world and therefore, rulings cannot apply to other similar cases. Section 103
provides that an advance ruling pronounced by AAR or AAAR shall be binding only
on the applicant who sought it in respect of any matter referred to in section 97(2)
and on the jurisdictional tax authority of the applicant. This clearly means that an
advance ruling is not applicable to similarly placed taxable persons in the State. It
is only limited to the person who has applied for an advance ruling.
Q 13. Whether the advance ruling have precedent value of a judgment of the High
Court or the Supreme Court?
Ans. No, the advance ruling is binding only in respect of the matter referred. It
has no precedent value. However, even for persons other than applicant, it does
have persuasive value.
Q 14. What is the time period for applicability of Advance Ruling?
Ans. The law does not provide for a fixed time period for which the ruling shall
apply. Instead, in section 103(2), it isE-JOURNAL
provided that advance ruling shall be binding
till the period when the law, facts or circumstances supporting the original advance
ruling have changed. Thus, a ruling shall continue to be in force so long as the trans-
action continues and so long as there is no change in law, facts or circumstances.
Q 15. Can an advance ruling given be nullified?
Ans. Section 104(1) provides that an advance ruling shall be held to be ab initio
void if the AAR or AAAR finds that the advance ruling was obtained by the appli-
cant by fraud or suppression of material facts or misrepresentation of facts. In
such a situation, all the provisions of the GST Act(s) shall apply to the applicant
as if such advance ruling had never been made (but excluding the period when
advance ruling was given and up to the period when the order declaring it to be
void is issued). An order declaring advance ruling to be void can be passed only
after hearing the applicant.
Q 16. What is the procedure for obtaining Advance Ruling?
Ans. Sections 97 and 98 deals with procedure for obtaining advance ruling. The
applicant desirous of obtaining advance ruling should make application to AAR in
Form GST ARA-01. The format of the form and the detailed procedure for making
application is prescribed in the CGST Rules.
Section 98 provides the procedure for dealing with the application for advance
ruling. The AAR shall send a copy of application to the officer in whose jurisdiction
the applicant falls and call for all relevant records. The AAR may then examine
the application along with the records and may also hear the applicant. Thereafter
AAR will pass an order either admitting or rejecting the application.
Q 17. Under what circumstances will the application for Advance Ruling be com-
pulsorily rejected?
Ans. Application has to be rejected if the question raised in the application is already
pending or decided in any proceedings in the case of applicant under any of the
provisions of GST Act(s).
If the application is rejected, it should be by way of a speaking order giving the
reasons for rejection.
Q 18. What is the procedure to be followed by AAR once the application is admitted?
Ans. If the application is admitted, the AAR shall pronounce its ruling within ninety
days of receipt of application. Before giving its ruling, it shall examine the appli-
cation and any further material furnished by the applicant or by the concerned
departmental officer.
Before giving the ruling, AAR must hear the applicant or his authorized represen-
tative as well as the jurisdictional officers of CGST/SGST/UTGST.
Q 19. What happens if there is a difference of opinion amongst members of AAR?
Ans. If there is difference of opinion between the two members of AAR, they shall
refer the point or points on which they differ to the AAAR for hearing the issue. If
the members of AAAR are also unable to come to a common conclusion in regard
to the point(s) referred to them by AAR, then it shall be deemed that no advance
ruling can be given in respect of the question on which difference persists at the
level of AAAR. E-JOURNAL
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Q 20. What are the provisions for appeals against order of AAR?
Ans. The provisions of appeal before AAAR are dealt in sections 100 and 101 of
CGST/SGST Act or section 14 of the UTGST Act.
If the applicant is aggrieved with the finding of the AAR, he can file an appeal with
AAAR. Similarly, if the concerned or jurisdictional officer of CGST/SGST/UTGST
does not agree with the finding of AAR, he can also file an appeal with AAAR. The
word concerned officer of CGST/SGST means an officer who has been designated
by the CGST/SGST administration in regard to an application for advance ruling.
In normal circumstances, the concerned officer will be the officer in whose ju-
risdiction the applicant is located. In such cases the concerned officer will be the
jurisdictional CGST/SGST officer.
Any appeal must be filed within thirty days from the receipt of the advance ruling.
The appeal has to be in Form GST ARA-02 and has to be verified in manner as
prescribed in the CGST Rules, 2017.
The Appellate Authority must pass an order after hearing the parties to the appeal
within a period of ninety days of the filing of an appeal. If members of AAAR differ
on any point referred to in appeal, it shall be deemed that no advance ruling is
issued in respect of the question under appeal.
Q 21. Whether Appeal can be filed before High Court or Supreme Court against
the ruling of Appellate Authority for Advance Rulings?
Ans. The CGST/SGST Act do not provide for any appeal against the ruling of
Appellate Authority for Advance Rulings. Thus no further appeals lie and the ruling
shall be binding on the applicant as well as the jurisdictional officer in respect of
applicant.
However, Writ Jurisdiction may lie before Hon’ble High Court or the Supreme Court.
Q 22. Can the AAR & AAAR order for rectification of mistakes in the ruling?
Ans. Yes, AAR and AAAR have power to amend their order to rectify any mistake
apparent from the record within a period of six months from the date of the order.
Such mistake may be noticed by the authority on its own accord or may be brought
to its notice by the applicant or the concerned or the jurisdictional CGST/SGST
officer. If a rectification has the effect of enhancing the tax liability or reducing the
quantum of input tax credit, the applicant or the appellant must be heard before
the order is passed. (Section 102).
Q 23. Where can one find the orders passed by AAR and AAARs?
Ans. The orders passed by AAR are available at http://gstcouncil.gov.in/rul-
ings-by-advance-authority and those by AAAR are available at http://gstcouncil.gov.
in/orders-appellate-authority-advance-ruling . Till October, 2018, 615 applications
were filed to AAR and 286 applications have been disposed of; and 21 applications
have been filed to AAAR out of which 14 have been decided.
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18. inspection, seaRch, seizuRe and aRRest
Q 1. What is the meaning of the term “Search”?

Ans. As per law dictionary and as noted in different judicial pronouncements, the
term ‘search’, in simple language, denotes an action of a government machinery
to go, look through or examine carefully a place, area, person, object etc. in order
to find something concealed or for the purpose of discovering evidence of a crime.
The search of a person or vehicle or premises etc. can only be done under proper
and valid authority of law.
Q 2. What is the meaning of the term “Inspection”?
Ans. ‘Inspection’ is a new provision under the CGST/SGST Act. It is a softer pro-
vision than search to enable officers to access any place of business of a taxable
person and also any place of business of a person engaged in transporting goods
or who is an owner or an operator of a warehouse or godown.
Q 3. Who can order for carrying out “Inspection” and under what circumstances?
Ans. As per Section 67 of CGST/SGST Act, 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. A Joint Commissioner or an officer higher in
rank can give such authorization only if he has reasons to believe that the person
concerned has done one of the following:
i. suppressed any transaction of supply;
ii. suppressed stock of goods in hand;
iii. claimed excess input tax credit;
iv. contravened any provision of the CGST/SGST Act to evade tax;
v. a transporter or warehouse owner has kept goods which have escaped
payment of tax or has kept his accounts or goods in a manner that is likely
to cause evasion of tax.
Q 4. What are the powers of the proper officer during the search?
Ans. The officer authorised under to carry out inspection shall have the power to
seal or break open the door of any premises or to break open any almirah, electronic
devices, box, receptacle in which any goods, accounts, registers or documents of
the person are suspected to be concealed, where access to such premises, almirah,
electronic devices, box or receptacle is denied. (Section 67(4) of the Act).
Q 5. Whether the person from whose custody any documents are seized is entitled
to get the copies thereof?
Ans. Yes, the person from whose custody documents are seized is entitled to make
copies thereof or take extracts therefrom in the presence of an authorised officer
at such place and time as such office may indicate in this behalf except where
making such copies or taking such extracts may, in the opinion of the proper office,
prejudicially affect the investigation. (Section 67(5) of the Act).
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Q 6. Can the proper officer authorize Inspection of any assets/premises of any

person under this Section?
Ans. No. Authorization can be given to an officer of CGST/SGST to carry out
inspection of any of the following:
i. any place of business of a taxable person;
ii. any place of business of a person engaged in the business of transporting
goods whether or not he is a registered taxable person;
iii. any place of business of an owner or an operator of a warehouse or godown.
Q 7. Who can order for Search and Seizure under the provisions of CGST Act?
Ans. An officer of the rank of Joint Commissioner or above can authorize an officer
in writing to carry out search and seize goods, documents, books or things. Such
authorization can be given only where the Joint Commissioner has reasons to
believe that any goods liable to confiscation or any documents or books or things
relevant for any proceedings are hidden in any place.
Q 8. What is meant by ‘reasons to believe’?
Ans. Reason to believe is to have knowledge of facts which, although not amounting
to direct knowledge, would cause a reasonable person, knowing the same facts, to
reasonably conclude the same thing. As per Section 26 of the IPC, 1860, “A person is
said to have ‘reason to believe’ a thing, if he has sufficient cause to believe that thing
but not otherwise.” ‘Reason to believe’ contemplates an objective determination
based on intelligent care and evaluation as distinguished from a purely subjective
consideration. It has to be and must be that of an honest and reasonable person
based on relevant material and circumstances.
Q 9. Is it mandatory that such ‘reasons to believe’ has to be recorded in writing by
the proper officer, before issuing authorization for Inspection or Search and Seizure?
Ans. Although the officer is not required to state the reasons for such belief before
issuing an authorization for search, he has to disclose the material on which his
belief was formed. ‘Reason to believe’ need not be recorded invariably in each
case. However, it would be better if the materials/information etc. are recorded
before issue of search warrant or before conducting search.
Q 10. What is a Search Warrant and what are its contents?
Ans. The written authority to conduct search is generally called search warrant.
The competent authority to issue search warrant is an officer of the rank of Joint
Commissioner or above. A search warrant must indicate the existence of a reasonable
belief leading to the search. Search Warrant should contain the following details:
i. the violation under the Act,
ii. the premise to be searched,
iii. the name and designation of the person authorized for search,
iv. the name of the issuing officer with full designation along with his round
seal,
v. date and place of issue, E-JOURNAL
vi. serial number of the search warrant,

vii. period of validity i.e. a day or two days etc.
Q 11. When do goods become liable to confiscation under the provisions of CGST/
SGST Act?
Ans. As per section 130 of CGST/SGST Act, goods become liable to confiscation
when any person does the following:
(i) supplies or receives any goods in contravention of any of the provisions of
this Act or rules made thereunder leading to evasion of tax;
(ii) does not account for any goods on which he is liable to pay tax under this
Act;
(iii) supplies any goods liable to tax under this Act without having applied for
the registration;
(iv) contravenes any of the provisions of the CGST/SGST Act or rules made
thereunder with intent to evade payment of tax.
Q 12. What powers can be exercised by an officer during valid search?
Ans. An officer carrying out a search has the power to search for and seize goods
(which are liable to confiscation) and documents, books or things (relevant for any
proceedings under CGST/SGST Act) from the premises searched. During search,
the officer has the power to break open the door of the premises authorized to be
searched if access to the same is denied. Similarly, while carrying out search within
the premises, he can break open any almirah or box if access to such almirah or box
is denied and in which any goods, account, registers or documents are suspected
to be concealed. He can also seal the premises if access to it denied.
Q 13. What is the procedure for conducting search?
Ans. Section 67(10) of CGST/SGST Act prescribes that searches must be carried
out in accordance with the provisions of Code of Criminal Procedure, 1973. Section
100 of the Code of Criminal Procedure describes the procedure for search.
Q 14. What are the basic requirements to be observed during Search operations?
Ans. The following principles should be observed during Search:
u No search of premises should be carried out without a valid search warrant
issued by the proper officer.
u There should invariably be a lady officer accompanying the search team to
residence.
u The officers before starting the search should disclose their identity by
showing their identity cards to the person in-charge of the premises.
u The search warrant should be executed before the start of the search by
showing the same to the person in-charge of the premises and his signature
should be taken on the body of the search warrant in token of having seen
the same. The signatures of at least two witnesses should also be taken on
the body of the search warrant.
u The search should be madeE-JOURNAL
in the presence of at least two independent
witnesses of the locality. If no such inhabitants are available/willing, the
2019 FAQs 409
inhabitants of any other locality should be asked to be witness to the search.

The witnesses should be briefed about the purpose of the search.
u Before the start of the search proceedings, the team of officers conducting
the search and the accompanying witnesses should offer themselves for
their personal search to the person in-charge of the premises being searched.
Similarly, after the completion of search all the officers and the witnesses
should again offer themselves for their personal search.
u A Panchnama/Mahazar of the proceedings of the search should necessarily
be prepared on the spot. A list of all goods, documents recovered and seized/
detained should be prepared and annexed to the Panchnama/Mahazar. The
Panchnama/Mahazar and the list of goods/documents seized/detained
should invariably be signed by the witnesses, the in-charge/owner of the
premises before whom the search is conducted and also by the officer(s)
duly authorized for conducting the search.
u After the search is over, the search warrant duly executed should be returned
in original to the issuing officer with a report regarding the outcome of the
search. The names of the officers who participated in the search may also
be written on the reverse of the search warrant.
u The issuing authority of search warrant should maintain register of records
of search warrant issued and returned and used search warrants should be
kept in records.
u A copy of the Panchnama/Mahazar along with its annexure should be
given to the person in-charge/owner of the premises being searched under
acknowledgement.
Q 15. Can a CGST/SGST officer access business premises under any other cir-
cumstances?
Ans. Yes. Access can also be obtained in terms of Section 65 of CGST/SGST Act.
This provision of law is meant to allow an audit party of CGST/SGST or C&AG or
a cost accountant or chartered accountant nominated under section 66 of CGST/
SGST Act, access to any business premises without issuance of a search warrant
for the purposes of carrying out any audit, scrutiny, verification and checks as may
be necessary to safeguard the interest of revenue. However, a written authoriza-
tion is to be issued by an officer of the rank of Commissioner of CGST or SGST.
This provision facilitates access to a business premise which is not registered by
a taxable person as a principal or additional place of business but has books of
account, documents, computers etc. which are required for audit or verification
of accounts of a taxable person.
Q 16. What is meant by the term ‘Seizure’?
Ans. The term ‘seizure’ has not been specifically defined in the GST Law. In Law
Lexicon Dictionary, ‘seizure’ is defined as the act of taking possession of property
by an officer under legal process. It generally implies taking possession forcibly
contrary to the wishes of the owner of the property or who has the possession and
who was unwilling to part with the possession.
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Q 17. Does GST Act(s) have any power of detention of goods and conveyances?
Ans. Yes, under Section 129 of CGST/SGST Act, an officer has power to detain
goods along with the conveyance (like a truck or other types of vehicle) transport-
ing the goods. This can be done for such goods which are being transported or are
stored in transit in violation of the provisions of CGST/SGST Act. Goods which
are stored or are kept in stock but not accounted for can also be detained. Such
goods and conveyance shall be released after payment of applicable tax or upon
furnishing security of equivalent amount.
Q 18. What is the distinction in law between ‘Seizure’ and ‘Detention’?
Ans. Denial of access to the owner of the property or the person who possesses the
property at a particular point of time by a legal order/notice is called detention.
Seizure is taking over of actual possession of the goods by the department. Deten-
tion order is issued when it is suspected that the goods are liable to confiscation.
Seizure can be made only on the reasonable belief which is arrived at after inquiry/
investigation that the goods are liable to confiscation.
Q 19. What are the safeguards provided in GST Act(s) in respect of Search or
Seizure?
Ans. Certain safeguards are provided in section 67 of CGST/SGST Act in respect
of the power of search or seizure. These are as follows:
i. Seized goods or documents should not be retained beyond the period nec-
essary for their examination;
ii. Photocopies of the documents can be taken by the person from whose
custody documents are seized;
iii. For seized goods, if a notice is not issued within six months of its seizure,
goods shall be returned to the person from whose possession it was seized.
This period of six months can be extended on justified grounds up to a
further period of maximum six months;
iv. An inventory of seized goods shall be made by the seizing officer;
v. Certain categories of goods to be specified under CGST Rules (such as
perishable, hazardous etc.) can be disposed of immediately after seizure;
vi. Provisions of Code of Criminal Procedure, 1973 relating to search and
seizure shall apply. However, one important modification is in relation to
sub-section (5) of section 165 of Code of Criminal Procedure - instead of
sending copies of any record made in course of search to the nearest Mag-
istrate empowered to take cognizance of the offence, it has to be sent to the
Principal Commissioner/Commissioner of CGST/Commissioner of SGST.
. Q 20. What is the time limit for issuance of SCN in respect of seized goods?
Ans. The SCN in respect of seized goods is to be issued within six months from
. the date of seizure of goods, otherwise the goods shall be returned to the person
from whose possession they were seized. However, the period of six months, on
sufficient cause being shown can be extended by the proper officer for a further
. period not exceeding six months. (Section 67(7) of the Act).

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Q 21. Can the goods be sold by the department after seizure?

Ans. Yes. 17 types of goods have been prescribed in the Notification No. 27/2018-Cen-
tral Tax, dated 13th June, 2018 which can be disposed of, after seizure, by the
proper officer, having regard to the perishable or hazardous nature, depreciation
in value with the passage of time, constraints of storage space or any other relevant
considerations. The list is as under:
(i) Salt and hygroscopic substances
(ii) Raw (wet and salted) hides and skins
(iii) Newspapers and periodicals
(iv) Menthol, Camphor, Saffron
(v) Re-fills for ball-point pens
(vi) Lighter fuel, including lighters with gas, not having arrangement for refilling
(vii) Cells, batteries and rechargeable batteries
(viii) Petroleum Products
(ix) Dangerous drugs and psychotropic substances
(x) Bulk drugs and chemicals falling under Section VI of the First Schedule to
the Customs Tariff Act, 1975
(xi) Pharmaceutical products falling within Chapter 30 of the First Schedule to
the Customs Tariff Act, 1975
(xii) Fireworks
(xiii) Red Sander
(xiv) Sandalwood
(xv) All taxable goods falling within Chapters 1 to 24 of the First Schedule to the
Customs Tariff Act, 1975
(xvi) All unclaimed/abandoned goods which are liable to rapid depreciation in
value on account of fast change in technology or new models etc.
(xvii) Any goods seized by the proper officer under section 67 of the said Act,
which are to be provisionally released under section 67(6) of the said Act,
but provisional release has not been taken by the concerned person within a
period of one month from the date of execution of the bond for provisional
release.
(Section 68(7) of the CGST Act, 2017)
Q 22. Is there any special document required to be carried during transport of
taxable goods?
Ans. Under section 68 of CGST/SGST Act, a person in charge of a conveyance
carrying any consignment of goods of value exceeding a specified amount may
be required to carry a prescribed document as prescribed in the E-way Bill Rules.
Chapter XVI of CGST Rules contains provisions relating to documents required
to be carried.
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Q 23. What is meant by the term “arrest”?

Ans. The term ‘arrest’ has not been defined in the CGST/SGST Act. However, as
per judicial pronouncements, it denotes ‘the taking into custody of a person under
some lawful command or authority’. In other words, a person is said to be arrested
when he is taken and restrained of his liberty by power or colour of lawful warrant.
Q 24. When can the proper officer authorize ‘arrest’ of any person under CGST/
SGST Act?
Ans. The Commissioner of CGST/SGST can authorize a CGST/SGST officer to
arrest a person if he has reasons to believe that the person has committed an
offence attracting a punishment prescribed under section 132(1)(a), (b), (c), (d) or
Section 132(2) of the CGST/SGST Act.
Thus, the provisions of arrest are highly restricted in GST. The power can be
exercised only where combined evasion of duty is ` 2 crore or more and where
offence is very severe (only five offences) namely where supplies have been made
without any invoice; invoice made without any supply; tax collected but not paid
to the Government; tax collected in contravention of provisions of the GST Act but
not paid to the Government and taking input tax credit without receiving goods
and services.
Furthermore, the arrest made for duty evasion ranging from ` 2 crores to ` 5 crores
are bailable and those beyond ` 5 crores are non-bailable.
(Section 69 of the CGST Act, 2017)
Q 25. What are the safeguards provided under CGST/SGST Act for a person who
is placed under arrest?
Ans. There are certain safeguards provided under section 69 for a person who is
placed under arrest. These are:
(a) If a person is arrested for a cognizable offence, he must be informed in writ-
ing of the grounds of arrest and he must be produced before a magistrate
within 24 hours of his arrest;
(b) If a person is arrested for a non-cognizable and bailable offence, the Deputy/
Assistant Commissioner of CGST/SGST can release him on bail and he will
be subject to the same provisions as an officer in-charge of a police station
under section 436 of the Code of Criminal Procedure, 1973;
(c) All arrest must be in accordance with the provisions of the Code of Criminal
Procedure, 1973 relating to arrest.
Q 26. What are the precautions to be taken during arrest?
Ans. The provisions of the Code of Criminal Procedure, 1973 (2 of 1974) relating
to arrest and the procedure thereof must be adhered to. It is therefore necessary
that all field officers of CGST/SGST be fully familiar with the provisions of the
Code of Criminal Procedure, 1973.
One important provision to be taken note of is section 57 of Cr.P.C., 1973 which
provides that a person arrested without warrant shall not be detained for a longer
period than, under the circumstances of the case, is reasonable but this shall not
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exceed twenty-four hours (excluding the journey time from place of arrest to the
2019 FAQs 413
Magistrate’s court). Within this period, as provided under section 56 of Cr.PC. the
person making the arrest shall send the person arrested without warrant before a
Magistrate having jurisdiction in the case.
In a landmark judgment in the case of D.K. Basu v. State of West Bengal reported
in 1997 (1) SCC 416, the Hon’ble Supreme Court has laid down specific guidelines
required to be followed while making arrests. While this is in relation to police, it
needs to be followed by all departments having power of arrest. These are as under:
i. The police personnel carrying out the arrest and handling the interrogation of
the arrestee should bear accurate, visible and clear identification and name
tags with their designations. The particulars of all such police personnel who
handle interrogation of the arrestee must be recorded in a register.
ii. The police officer carrying out the arrest shall prepare a memo of arrest at
the time of arrest and such memo shall be attested by at least one witness,
who may be either a member of the family of the arrestee or a respectable
person of the locality from where the arrest is made. It shall also be counter
signed by the arrestee and shall contain the time and date of arrest.
iii. A person who has been arrested or detained and is being held in custody in
a police station or interrogation center or other lock up, shall be entitled to
have one friend or relative or other person known to him or having inter-
est in his welfare being informed, as soon as practicable, that he has been
arrested and is being detained at the particular place, unless the attesting
witness of the memo of arrest is himself such a friend or a relative of the
arrestee.
iv. The time, place of arrest and venue of custody of an arrestee must be notified
by the police where the next friend or relative of the arrestee lives outside
the district or town through the Legal Aid Organization in the District and
the police station of the area concerned telegraphically within a period of
8 to 12 hours after the arrest.
v. An entry must be made in the diary at the place of detention regarding the
arrest of the person which shall also disclose the name of the next friend of
the person who has been informed of the arrest and the names and partic-
ulars of the police officials in whose custody the arrestee is.
vi. The arrestee should, where he so requests, be also examined at the time of
his arrest and major and minor injuries, if any present on his/her body, must
be recorded at that time. The ‘Inspection Memo’ must be signed both by the
arrestee and the police officer effecting the arrest and its copy provided to
the arrestee.
vii. The arrestee should be subjected to medical examination by the trained
doctor every 48 hours during his detention in custody by a doctor on the
panel of approved doctors appointed by Director, Health Services of the
concerned State or Union Territory, Director, Health Services should prepare
such a panel for all Tehsils and Districts as well.
viii. Copies of all the documents including the memo of arrest, referred to above,
should be sent to the Magistrate for his record.
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ix. The arrestee may be permitted to meet his lawyer during interrogation,
though not throughout the interrogation.
x. A police control room should be provided at all district and State headquar-
ters where information regarding the arrest and the place of custody of the
arrestee shall be communicated by the officer causing the arrest, within
12 hours of effecting the arrest and at the police control room it should be
displayed on a conspicuous notice board.
Q 27. What are the broad guidelines for arrest followed in CBIC?
Ans. Decision to arrest needs to be taken on case-to-case basis considering various
factors, such as, nature and gravity of offence, quantum of duty evaded or credit
wrongfully availed, nature and quality of evidence, possibility of evidences being
tampered with or witnesses being influenced, cooperation with the investigation,
etc. Power to arrest has to be exercised after careful consideration of the facts of
the case which may include:
i. to ensure proper investigation of the offence;
ii. to prevent such person from absconding;
iii. cases involving organized smuggling of goods or evasion of customs duty
by way of concealment;
iv. master minds or key operators effecting proxy/benami imports/exports in
the name of dummy or non-existent persons/IECs, etc.;
v. where the intent to evade duty is evident and element of mens rea/guilty
mind is palpable;
vi. prevention of the possibility of tampering with evidence;
vii. intimidating or influencing witnesses; and
viii. large amounts of evasion of duty or service tax at least exceeding one crore
rupees.
Q 28. What is a cognizable offence?
Ans. Generally, as per Cr. PC, cognizable offence means serious category of offences
in respect of which a police officer has the authority to make an arrest without a
warrant and to start an investigation with or without the permission of a court.
However, GST being a special legislation, only the officers, duly empowered under
the Act can act as above.
Q 29. What is a non-cognizable offence?
Ans. Non-cognizable offence means relatively less serious offences in respect of
which a police officer does not have the authority to make an arrest without a
warrant and an investigation cannot be initiated without a court order, except as
may be authorized under special legislation.
Q 30. What are cognizable and non-cognizable offences under CGST Act?
Ans. In section 132 of CGST Act, it is provided that the offences relating to taxable
goods and/or services where the amount of tax evaded or the amount of input
tax credit wrongly availed or the amount of refund wrongly taken exceeds ` 5
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2019 FAQs 415
crores, shall be cognizable and non-bailable. Other offences under the act are
non-cognizable and bailable.
Q 31. When can the proper officer issue summons under CGST Act?
Ans. Section 70 of CGST/SGST Act gives powers to a duly authorized CGST/SGST
officer to call upon a person by issuing a summon to present himself before the
officer issuing the summon to either give evidence or produce a document or any
other thing in any inquiry which an officer is making. A summons to produce doc-
uments or other things may be for the production of certain specified documents
or things or for the production of all documents or things of a certain description
in the possession or under the control of the person summoned.
Q 32. What are the responsibilities of the person so summoned?
Ans. A person who is issued summon is legally bound to attend either in person
or by an authorized representative and he is bound to state the truth before the
officer who has issued the summon upon any subject which is the subject matter of
examination and to produce such documents and other things as may be required.
Q 33. What can be the consequences of non-appearance to summons?
Ans. The proceeding before the official who has issued summons is deemed to be
a judicial proceeding. If a person does not appear on the date when summoned
without any reasonable justification, he can be prosecuted under section 174 of
the Indian Penal Code (IPC). If he absconds to avoid service of summons, he can
be prosecuted under section 172 of the IPC and in case he does not produce the
documents or electronic records required to be produced, he can be prosecuted
under section 175 of the IPC. In case he gives false evidence, he can be prosecut-
ed under section 193 of the IPC. In addition, if a person does not appear before a
CGST/SGST officer who has issued the summons, he is liable to a penalty up to
` 25,000 under section 122(3) (d) of CGST/SGST Act.
Q 34. What are the guidelines for issue of summons?
Ans. The Central Board of Indirect Taxes and Customs (CBIC) in the Department
of Revenue, Ministry of Finance has issued guidelines from time to time to ensure
that summons provisions are not misused in the field. Some of the important high-
lights of these guidelines are given below:
i. summons is to be issued as a last resort where assessees are not co-operating
and this section should not be used for the top management;
ii. the language of the summons should not be harsh and legal which causes
unnecessary mental stress and embarrassment to the receiver;
iii. summons by Superintendents should be issued after obtaining prior written
permission from an officer not below the rank of Assistant Commissioner
with the reasons for issuance of summons to be recorded in writing;
iv. where for operational reasons, it is not possible to obtain such prior written
permission, oral/telephonic permission from such officer must be obtained
and the same should be reduced to writing and intimated to the officer
according such permission at the earliest opportunity;
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v. in all cases, where summons are issued, the officer issuing summons should
submit a report or should record a brief of the proceedings in the case file
and submit the same to the officer who had authorized the issuance of
summons;
vi. senior management officials such as CEO, CFO, General Managers of a large
company or a Public Sector Undertaking should not generally be issued
summons at the first instance. They should be summoned only when there
are indications in the investigation of their involvement in the decision
making process which led to loss of revenue.
Q 35. What are the precautions to be observed while issuing summons?
Ans. The following precautions should generally be observed when summoning
a person: —
(i) A summon should not be issued for appearance where it is not justified.
The power to summon can be exercised only when there is an inquiry being
undertaken and the attendance of the person is considered necessary.
(ii) Normally, summons should not be issued repeatedly. As far as practicable,
the statement of the accused or witness should be recorded in minimum
number of appearances.
(iii) Respect the time of appearance given in the summons. No person should be
made to wait for long hours before his statement is recorded except when
it has been decided very consciously as a matter of strategy.
(iv) Preferably, statements should be recorded during office hours; however, an
exception could be made regarding time and place of recording statement
having regard to the facts in the case.
Q 36. Are there any class of officers who are required to assist CGST/SGST officers?
Ans. Under section 72 of CGST/SGST Act, the following officers have been em-
powered and are required to assist CGST/SGST officers in the execution of CGST/
SGST Act. The categories specified are as follows:
i. Police;
ii. Railways
iii. Customs;
iv. Officers of State/UT/Central Government engaged in collection of GST;
v. Officers of State/UT/Central Government engaged in collection of land
revenue;
vi. All village officers;
vii. Any other class of officers as may be notified by the Central/State Govern-
ment.
Q 37. Is there any prescribed format for arrest memo under the CGST Act, 2017?
Ans. There is no prescribed format for arrest memo but an arrest memo must be
in compliance with the directions in the judgments of the Hon’ble Supreme Court
in the case of D.K. Basu v. State of West Bengal reported in 1997 (1) SCC 416. The
arrest memo should include:—
u Brief Facts of the case; E-JOURNAL
u Details of the person arrested;
2019 FAQs 417
u Gist of evidence against the person;

u Relevant section(s) of the CGST/SGST Law or other laws attracted to the
case and to the arrested person;
u The grounds of the arrest must be explained to the arrested person and this
fact should be recorded in the arrest memo;
u A nominated person (as per the detailed provided by arrested person) of the
arrested person should be informed immediately and this fact also may be
mentioned in the arrest memo;
u The date and time of arrest may be mentioned in the arrest memo should
be given to the person arrested under proper acknowledgement;
u A separate arrest memo has to be made and provided to each individual/
arrested person. This should particularly be kept in mind in the event that
there are several arrests in a single case.
Q 38. What are the post arrest procedure?
Ans. The following procedures are required to be followed after arrest:—
u Medical examination of an arrested person should be conducted by a medical
office in the service of Central or State Government and in case the medical
officer is not available, by a registered medical practitioner, soon after the
arrest is made.
u If an arrested person is a female then such an examination shall be made only
by, or under supervision of a female medical officer, and in case the female
medical officer is not available, by a female registered medical practitioner.
19. offences, penalties, pRosecution and compounding
Q 1. What are the prescribed offences under CGST/SGST Act?

Ans. The CGST/SGST Act codifies the offences and penalties in Chapter XVI. The
Act lists 21 offences in section 122, apart from the penalty prescribed under section
10 for availing compounding by a taxable person who is not eligible for it. The said
offences are as follows:—
(1) Making a supply without invoice or with false/incorrect invoice;
(2) Issuing an invoice without making supply;
(3) Not paying tax collected for a period exceeding three months;
(4) Not paying tax collected in contravention of the CGST/SGST Act for a period
exceeding 3 months;
(5) Non deduction or lower deduction of tax deducted at source or not depos-
iting tax deducted at source under section 51;
(6) Non collection or lower collection of or non-payment of tax collectible at
source under section 52;
(7) Availing/utilizing input tax credit without actual receipt of goods and/or
services; E-JOURNAL
(8) Fraudulently obtaining any refund;

(9) Availing/distributing input tax credit by an Input Service Distributor in
violation of Section 20;
(10) Furnishing false information or falsification of financial records or furnishing
of fake accounts/documents with intent to evade payment of tax;
(11) Failure to register despite being liable to pay tax;
(12) Furnishing false information regarding registration particulars either at the
time of applying for registration or subsequently;
(13) Obstructing or preventing any official in discharge of his duty;
(14) Transporting goods without prescribed documents;
(15) Suppressing turnover leading to tax evasion;
(16) Failure to maintain accounts/documents in the manner specified in the Act
or failure to retain accounts/documents for the period specified in the Act;
(17) Failure to furnish information/documents required by an officer in terms
of the Act/Rules or furnishing false information/documents during the
course of any proceeding;
(18) Supplying/transporting/storing any goods liable to confiscation;
(19) Issuing invoice or document using GSTIN of another person;
(20) Tampering/destroying any material evidence;
(21) Disposing of/tampering with goods detained/seized/attached under the
Act.
Q 2. What is meant by the term penalty?
Ans. The word “penalty” has not been defined in the CGST/SGST Act but judicial
pronouncements and principles of jurisprudence have laid down the nature of a
penalty as:
u a temporary punishment or a sum of money imposed by statute, to be paid
as punishment for the commission of a certain offence;
u a punishment imposed by law or contract for doing or failing to do some-
thing that was the duty of a party to do.
Q 3. What are the general disciplines to be followed while imposing penalties?
Ans. The levy of penalty is subject to a certain disciplinary regime which is based on
jurisprudence, principles of natural justice and principles governing international
trade and agreements. Such general discipline is enshrined in section 126 of the
Act. Accordingly—
u no penalty is to be imposed without issuance of a show cause notice and
proper hearing in the matter, affording an opportunity to the person pro-
ceeded against to rebut the allegations levelled against him,
u the penalty is to depend on the totality of the facts and circumstances of
the case,
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u the penalty imposed is to be commensurate with the degree and severity of
breach of the provisions of the law or the rules alleged,
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u the nature of the breach is to be specified clearly in the order imposing the
penalty,
u the provisions of the law under which the penalty has been imposed is to
be specified.
Section 126 further specifies that, in particular, no substantial penalty is to be
imposed for—
u any minor breach (minor breach has been defined as a violation of the
provisions in a case where the tax involved is less than ` 5,000), or
u a procedural requirement of the law, or
u an easily rectifiable mistake/omission in documents (explained in the law as
an error apparent on record) that has been made without fraudulent intent
or gross negligence.
Further, wherever penalty of a fixed amount or a fixed percentage has been pro-
vided in the CGST/SGST Act, the same shall apply.
Q 4. What is the quantum of penalty provided for in the CGST/SGST Act?
Ans. Section 122(1) provides that any taxable person who has committed any of
the offences mentioned in section 122 shall be punished with a penalty that shall
be higher of the following amounts:
u The amount of tax evaded, fraudulently obtained as refund, availed as credit,
or not deducted or collected or short deducted or short collected, or
u A sum of ` 10,000.
Further Section 122(2) provides that any registered person who has not paid tax
or makes a short payment of tax on supplies shall be a liable to penalty which will
be the higher of:
u 10% of the tax not paid or short paid, or
u ` 10,000.
Q 5. Is any penalty prescribed for any person other than the taxable person?
Ans. Yes. Section 122(3) provides for levy of penalty extending to ` 25,000 for any
person who-
u aids or abets any of the 21 offences,
u deals in any way (whether receiving, supplying, storing or transporting) with
goods that are liable to confiscation,
u receives or deals with supply of services in contravention of the Act,
u fails to appear before an authority who has issued a summon,
u fails to issue any invoice for a supply or account for any invoice in his books
of accounts.
Q 6. What is the penalty provided for any contravention for which no separate
penalty has been prescribed under CGST/SGST Act?
Ans. Section 125 of the CGST/SGST Act provides that any person who contravenes
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any provision of the Act or the rules made under this Act for which no separate
penalty has been prescribed shall be punishable with a penalty that may extend
to ` 25,000.
Q 7. What action can be taken for transportation of goods without valid documents
or attempted to be removed without proper record in books?
Ans. If any person transports any goods or stores any such goods while in transit
without the documents prescribed under the Act (i.e. invoice and a declaration) or
supplies or stores any goods that have not been recorded in the books or account
maintained by him, then such goods shall be liable for detention along with any
vehicle on which they are being transported.
Where owner comes forward: - Such goods shall be released on payment of the
applicable tax and penalty equal to 100% tax or upon furnishing of security equiv-
alent to the said amount.
In case of exempted goods, penalty is 2% of value of goods or ` 25,000 whichever
is lesser.
Where owner does not come forward: - Such goods shall be released on payment
of the applicable tax and penalty equal to 50% of value of goods or upon furnishing
of security equivalent to the said amount.
In case of exempted goods, penalty is 5% of value of goods or ` 25,000 whichever
is lesser.
Q 8. What is the penalty prescribed for a person who opts for composition scheme
despite being ineligible for the said scheme?
Ans. Section 10(5) provides that if a person who has paid under composition levy
is found as not being eligible for compounding then such person shall be liable to
penalty to an amount equivalent to the tax payable by him under the provisions
of the Act i.e. as a normal taxable person and that this penalty shall be in addition
to the tax payable by him.
Q 9. What is meant by confiscation?
Ans. The word ‘confiscation’ has not been defined in the Act. The concept is derived
from Roman law wherein it meant seizing or taking into the hands of emperor,
and transferring to Imperial “fiscus” or Treasury. The word “confiscate” has been
defined in Aiyar’s Law Lexicon as to “appropriate (private property) to the public
treasury by way of penalty; to deprive of property as forfeited to the State.”
In short in means transfer of the title to the goods to the Government.
Q 10. Under which circumstances can goods be confiscated under CGST/SGST Act?
Ans. Under Section 130 of the CGST Act, goods shall be liable to confiscation if
any person:
u supplies or receives any goods in contravention of any provision of this Act
and such contravention results in evasion of tax payable under the Act, or
u does not account for any goods in the manner required under the Act, or
u supplies goods that are liable to tax under the Act without applying for
registration, or
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2019 FAQs 421
u uses any conveyance as a means of transport for carriage of goods in

contravention of the provisions of CGST/SGST Act (unless used without
knowledge of owner) or
u contravenes any provision of the Act/Rules with the intention of evading
payment of tax.
Q 11. What happens to the goods upon confiscation of goods by the proper officer?
Ans. Upon confiscation, the title in the confiscated goods shall vest in the Govern-
ment and every Police officer to whom the proper officer makes a request in this
behalf, shall assist in taking possession of the goods.
Q 12. After confiscation, is it required to give option to the person to redeem the
goods?
Ans. Yes. In terms of section 130(2), the Owner or the person in-charge of the goods
liable to confiscation is to be given the option for fine (not exceeding market price
of confiscated goods) in lieu of confiscation. This fine shall be in addition to the
tax and other charges payable in respect of such goods.
Q 13. Can any conveyance carrying goods without cover of prescribed documents
be subject to confiscation?
Ans. Yes. Section 130 provides that any conveyance carrying goods without the
cover of any documents or declaration prescribed under the Act shall be liable to
confiscation. However, if the owner of the conveyance proves that the goods were
being transported without cover of the required documents/declarations without
his knowledge or connivance or without the knowledge or connivance of his agent
then the conveyance shall not be liable to confiscation as aforesaid.
Q 14. What is Prosecution?
Ans. Prosecution is the institution or commencement of legal proceeding; the pro-
cess of exhibiting formal charges against the offender. Section 198 of the Criminal
Procedure Code defines “prosecution” as the institution and carrying on of the legal
proceedings against a person.
Q 15. Which are the offences which warrant prosecution under the CGST/SGST Act?
Ans. Section 132 of the CGST/SGST Act codifies the major offences under the Act
which warrant institution of criminal proceedings and prosecution. 12 such major
offences have been listed as follows:
(a) Making a supply without issuing an invoice or upon issuance of a false/
incorrect invoice;
(b) Issuing an invoice without making supply;
(c) Not paying any amount collected as tax for a period exceeding 3 months;
(d) Availing or utilizing credit of input tax without actual receipt of goods and/
or services;
(e) Obtaining any fraudulent refund;
(f) evades tax, fraudulently avails ITC or obtains refund by an offence not
covered under clauses (a) to E-JOURNAL
(e);
(g) Furnishing false information or falsification of financial records or furnishing

of fake accounts/documents with intent to evade payment of tax;
(h) Obstructing or preventing any official in the discharge of his duty;
(i) Dealing with goods liable to confiscation i.e. receipt, supply, storage or
transportation of goods liable to confiscation;
(j) Receiving/dealing with supply of services in contravention of the Act;
(k) tampers with or destroys any material evidence or documents;
(l) Failing to supply any information required of him under the Act/Rules or
supplying false information;
(m) Attempting to commit or abetting the commission of any of the offences at
(a) to (l) above.
Q 16. What is the punishment prescribed on conviction of any offence under the
CGST/SGST Act?
Ans. The scheme of punishment provided in section 132(1) is as follows:
Offence involving Punishment (Imprisonment

extending to)
Tax evaded exceeding ` 5 crore or repeat offen- 5 years and fine
der 250 lakh
Tax evaded between ` 2 crore and ` 5 crore 3 years and fine
Tax evaded between ` 1 crore and ` 2 crore 1 years and fine
u False records 6 months
u Obstructing officer
u Tamper records
Q 17. What are cognizable and non-cognizable offences under CGST/SGST Act?
Ans. In terms of Section 132(4) and 132(5) of CGST/SGST Act —
u all offences where the evasion of tax is less than ` 5 crores shall be non-cog-
nizable and bailable,
u all offences where the evasion of tax exceeds ` 5 crores shall be cognizable
and non-bailable.
Q 18. Is prior sanction of competent authority mandatory for initiating prosecution?
Ans. Yes. No person shall be prosecuted for any offence without the prior sanction
of the designated authority.
Q 19. Is ‘mens rea’ or culpable mental state necessary for prosecution under CGST/
SGST Act?
Ans. Yes. However, Section 135 presumes the existence of a state of mind (i.e.
“culpable mental state” or mens rea) required to commit an offence if it cannot be
committed without such a state of mind.
Q 20. What is a culpable state of mind?
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Ans. While committing an act, a “culpable mental state” is a state of mind wherein-
2019 FAQs 423
u the act is intentional;

u the act and its implications are understood and controllable;
u the person committing the act was not coerced and even overcomes hurdles
to the act committed;
u the person believes or has reasons to believe that the act is contrary to law.
Q 21. Can a company be proceeded against or prosecuted for any offence under
the CGST/SGST Act?
Ans. Yes. Section 137 of the CGST/SGST Act provides that every person who was
in-charge of or responsible to a company for the conduct of its business shall,
along-with the company itself, be liable to be proceeded against and punished for
an offence committed by the company while such person was in-charge of the
affairs of the company. If any offence committed by the company-
u has been committed with the consent/connivance of, or
u is attributable to negligence of-
any officer of the company then such officer shall be deemed to be guilty of the
said offence and liable to be proceeded against and punished accordingly.
Q 22. What is meant by compounding of offences?
Ans. Section 320 of the Code of Criminal Procedure defines “compounding” as to
forbear from prosecution for consideration or any private motive.
Q 23. Can offences under CGST/SGST Act be compounded?
Ans. Yes. As per section 138 of the CGST/SGST Act, any offence, other than the
following, may upon payment of the prescribed (compounding) amount be com-
pounded and such compounding is permissible either before or after the institution
of prosecution:
u Offences numbered 1 to 6 of the 12 major offences (outlined in Q. 16 above),
if the person charged with the offence had compounded earlier in respect
of any of the said offences;
u Aiding/abetting offences numbered 1 to 6 of the 12 major offences, if the
person charged with the offence had compounded earlier in respect of any
of the said offences;
u Any offence (other than the above offences) under any SGST Act/IGST Act
in respect of a supply with value exceeding ` 1 crore, if the person charged
with the offence had compounded earlier in respect of any of the said of-
fences;
u Any offence which is also an offence under NDPSA or FEMA or any other
Act other than CGST/SGST;
Compounding is to be permitted only after payment of tax, interest and penalty and
compounding shall not affect any proceeding already instituted under any other law.
Q 24. Are there any monetary limits prescribed for compounding of offence?
Ans. Yes. The lower limit for compounding amount is to be the greater of the
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following amounts:—
u 50% of tax involved, or

u ` 10,000. The upper limit for compounding amount is to be greater of the
following amounts: -
 150% of tax involved or
 ` 30,000.
Q 25. What is the procedure for compounding of offences?
Ans. The applicant has to make an application in Form GST CPD-01 to the Com-
missioner for compounding of an offence. The application is not allowed unless
the tax, interest and penalty liable to be paid have been paid in the case for which
the application has been made.
On receipt of the application, the Commissioner shall call for a report from the
concerned officer with reference to the particulars furnished in the application,
or any other information, which may be considered relevant for the examination
of such application.
The Commissioner, after taking into account the contents of the said application,
may, by order in Form GST CPD-02, on being satisfied that the applicant has co-
operated in the proceedings before him and has made full and true disclosure of
facts relating to the case, allow the application indicating the compounding amount
and grant him immunity from prosecution or reject such application within ninety
days of the receipt of the application.
The application shall not be decided without affording an opportunity of being
heard to the applicant and recording the grounds of such rejection.
Q 26. What is the consequence of compounding of an offence under CGST/SGST
Act?
Ans. Sub-section (3) of section 138 provides that on payment of compounding
amount no further proceeding to be initiated under this Act and criminal proceeding
already initiated shall stand abated.
20. oveRview of the igst act
Q 1. What is IGST?
Ans. “Integrated Goods and Services Tax” (IGST) means tax levied under the IGST
Act on the supply of any goods and/or services in the course of inter-State trade
or commerce.
Q 2. What are inter-state supplies?
Ans. A supply of goods and/or services in the course of inter-State trade or com-
merce means any supply where the location of the supplier and the place of supply
are in different States, two different union territory or in a state and union territory
Further import of goods and services, supplies to SEZ units or developer, or any
supply that is not an intra state supply. (Section 7 of the IGST Act).
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2019 FAQs 425
Q 3. How will the Inter-State supplies of Goods and Services be taxed under GST?
Ans. IGST shall be levied and collected by Centre on inter-state supplies. IGST would
be broadly CGST plus SGST and shall be levied on all inter-State taxable supplies
of goods and services. The inter-State seller will pay IGST on value addition after
adjusting available credit of IGST, CGST, and SGST on his purchases. The Export-
ing State will transfer to the Centre the credit of SGST used in payment of IGST.
The Importing dealer will claim credit of IGST while discharging his output tax
liability in his own State. The Centre will transfer to the importing State the credit
of IGST used in payment of SGST. The relevant information is also submitted to
the Central Agency which will act as a clearing house mechanism, verify the claims
and inform the respective governments to transfer the funds.
Q 4. What are the salient features of the draft IGST Law?
Ans. The draft IGST law contains 25 sections divided into 9 Chapters. The law, inter
alia, sets out the rules for determination of the place of supply of goods. Where
the supply involves movement of goods, the place of supply shall be the location
of goods at the time at which the movement of goods terminates for delivery to
the recipient. Where the supply does not involve movement of goods, the place of
supply shall be the location of such goods at the time of delivery to the recipient.
In the case of goods assembled or installed at site, the place of supply shall be the
place of such installation or assembly. Finally, where the goods are supplied on
board a conveyance, the place of supply shall be the location at which such goods
are taken on board.
The law also provides for determination of place of supply of service where both
supplier and recipient are located in India (domestic supplies) or where supplier
or recipient is located outside India (international supplies). This is discussed in
details in the next Chapter.
It also provides for certain other specific provisions like payment of tax by online
information and database access service provider located outside India to an un-
registered person in India, upon taking registration in India, under the IGST Act,
following a simplified provision (section 14 of the IGST Act).
Q 5. What are the advantages of IGST Model?
Ans. The major advantages of IGST Model are:
a. Maintenance of uninterrupted ITC chain on inter-State transactions;
b. No upfront payment of tax or substantial blockage of funds for the inter-State
seller or buyer;
c. No refund claim in exporting State, as ITC is used up while paying the tax;
d. Self-monitoring model;
e. Ensures tax neutrality while keeping the tax regime simple;
f. Simple accounting with no additional compliance burden on the taxpayer;
g. Would facilitate in ensuring high level of compliance and thus higher collec-
tion efficiency. Model can handle ‘Business to Business’ as well as ‘Business
to Consumer’ transactions. E-JOURNAL
Q 6. How will imports/exports be taxed under GST?

Ans. All imports/exports will be deemed as inter-state supplies for the purposes of
levy of GST (IGST). The incidence of tax will follow the destination principle and
the tax revenue in case of SGST will accrue to the State where the imported goods
and services are consumed. Full and complete set-off will be available as ITC of
the IGST paid on import on goods and services. Exports of goods and services will
be zero rated. The exporter has the option either to export under bond without
payment of duty and claim refund of ITC or pay IGST at the time of export and
claim refund of IGST. The IGST on imports is leviable under the provisions of the
Customs Tariff Act and shall be levied at the time of imports along with the levy
of the Customs Act (Section 5 of the IGST Act).
Q 7. How will the IGST be paid?
Ans. The IGST payment can be done utilizing ITC or by cash. However, the use of
ITC for payment of IGST will be done using the following hierarchy -
u First available ITC of IGST shall be used for payment of IGST;
u Once ITC of IGST is exhausted, the ITC of CGST shall be used for payment
of IGST;
u If both ITC of IGST and ITC of CGST are exhausted, then only the dealer
would be permitted to use ITC of SGST for payment of IGST.
Remaining IGST liability, if any, shall be discharged using payment in cash. GST
System will ensure maintenance of this hierarchy for payment of IGST using the
credit.
Q 8. How will the settlement between Centre, exporting state and importing state
be done?
Ans. There would be settlement of account between the Centre and the states on
two counts, which are as follows-
u Centre and the exporting state: The exporting state shall pay the amount
equal to the ITC of SGST used by the supplier in the exporting state to the
Centre.
u Centre and the importing state: The Centre shall pay the amount equal to the
ITC of IGST used by a dealer for payment of SGST on intra-State supplies.
The settlement would be on cumulative basis for a state taking into account the
details furnished by all the dealer in the settlement period. Similar settlement of
amount would also be undertaken between CGST and IGST account.
Q 9. What treatment is given to supplies made to SEZ units or developer?
Ans. Supplies to SEZ units or developer shall be zero rated in the same manner
as done for the physical exports. Supplier shall have option to make supplies to
SEZ without payment of taxes and claim refunds of input taxes on such supplies
(section 16 of the IGST Act).
Q 10. Are business processes and compliance requirement same in the IGST and
CGST Acts?
Ans. The procedure and compliance E-JOURNAL
requirement are same for processes likes
registration, return filing and payment of tax. Further, the IGST act borrows the
2019 FAQs 427
provisions from the CGST Act as relating to assessment, audit, valuation, time
of supply, invoice, accounts, records, adjudication, appeal etc. (Section 20 of the
IGST Act).
21. expoRts and impoRts
21.1 Exports
Q. 1. How are exports be treated under GST?
Ans. All exports are deemed as inter-State supplies. Exports of goods and services
are treated as zero rated supplies. The exporter has the option either to export
under bond/Letter of Undertaking without payment of tax and claim refund of
ITC or pay IGST by utilizing ITC or in cash at the time of export and claim refund
of IGST paid.
Q 2. What is Zero Rating?
Ans. By zero rating it is meant that the entire value chain of the supply is exempt
from tax. This means that in case of zero rating, not only is the output exempt from
payment of tax, there is no bar on taking/availing credit of taxes paid on the input
side for making/providing the output supply. The concept of zero rating of supplies
requires the supplies as well as the inputs or input services used in supplying the
supplies to be free of GST. This is done by employing the following means:
(a) The taxes paid on the supplies which are zero rated are refunded;
(b) The credit of inputs/input services is allowed;
(c) Wherever the supplies are exempted, or the supplies are made without pay-
ment of tax, the taxes paid on the inputs or input services i.e. the unutilised
input tax credit is refunded.
Q 3. How is zero rated supply different from exempted supply?
Ans. The difference between zero rated supplies and exempted supplies is tabu-
lated as below:
Exempted Supplies Zero rated Supplies

“exempt supply” means supply of any goods “zero-rated supply” means export of goods
or services or both which attracts nil rate of or services or both or supply of goods or
tax or which may be wholly exempt from services or both to a SEZ developer or a
tax under section 11 of CGST Act, 2017 or SEZ unit as per section 16 of IGST Act, 2017
under section 6 of the IGST Act, 2017 and
includes non-taxable supply
No tax on the outward exempted supplies, No tax on the outward supplies; Input
however, the input supplies used for mak- supplies also to be tax free
ing exempt supplies to be taxed
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Exempted Supplies Zero rated Supplies

Credit of input tax needs to be reversed, Credit of input tax may be availed for
if taken; making zero-rated supplies, even if such
No ITC on the exempted supplies supply is an exempt supply ITC allowed
on zero-rated supplies
Value of exempt supplies, for apportion- Value of zero rated supplies shall be added
ment of ITC, shall include supplies on along with the taxable supplies for appor-
which the recipient is liable to pay tax tionment of ITC
on reverse charge basis, transactions in
securities, sale of land and, subject to
clause (b) of paragraph 5 of Schedule II,
sale of building.
Any person engaged exclusively in the A person exclusively making zero rated
business of supplying goods or services supplies may have to register as refunds
or both that are not liable to tax or wholly of unutilised ITC or integrated tax paid
exempt from tax under the CGST or IGST shall have to be claimed
Act shall not be liable to registration
A registered person supplying exempted Normal tax invoice shall be issued
goods or services or both shall issue, in-
stead of a tax invoice, a bill of supply
Q 4. Can a person claim input tax credit in case of export of exempted goods?
Ans. Yes, any zero rated supply is eligible for input tax credit paid by such supplier.
As per section 16(2) of the IGST Act, credit of input tax may be availed for making
zero-rated supplies, notwithstanding that such supply may be an exempt supply.
Q 5. What is the impact on importer-exporter code (IEC)?
Ans. All IECs issued with effect from 1.07.2017 reflect PAN as IEC. There will be
no separate IEC number allotted to the exporters. PAN number itself would be the
IEC number and would be authorised as IEC.
The GSTIN is the key identifier at the transaction level. The importer/exporter
need to declare only GSTIN (wherever registered with GST) at the time of import/
export of goods. The PAN level aggregation of data would automatically happen in
the system. The IEC holders shall quote their PAN number (instead of IEC) in all
their future correspondence as well as documentation with DGFT.
Q 6. What IEC number is to be used for special category of importers like gov-
ernment, individual importing for personal use etc in terms of para 2.07(b) of
Handbook of Procedure by DGFT?
Ans. DGFT has modified the para 2.07(b) and has allotted revised permanent IEC
number for such category of importers vide DGFT Public Notice No. 09/2015-20
dated 29th June, 2017. The same can be used for import/export by the categories
of importers/exporters mentioned therein.
For instance, persons/Institutions/Hospitals importing or exporting goods for per-
sonal use, not connected with trade or manufacture or agriculture, earlier using
IEC no. 0100000053 now have to use IIHIE0153E as IEC.
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2019 FAQs 429
Q 7. What is export of goods?

Ans. The definition of “export of goods” in section 2(5) of IGST Act has been straight
taken from section 2(18) of the Customs Act, 1962 and means taking goods out of
India to a place outside India.
Q 8. What is India in the context of GST?
Ans. The term “India” as per section 2(56) of CGST Act, 2017 means-
“the territory of India as referred to in article 1 of the Constitution, its territorial
waters, seabed and sub soil underlying such waters, continental shelf, exclusive
economic zone or any other maritime zone as referred to in the Territorial
Waters, Continental Shelf, Exclusive Economic Zone and other Maritime
Zones Act, 1976, and the air space above its territory and territorial waters”.
Under Article 1 of the Constitution of India, ‘India’ is defined as under:
1. Name and territory of the Union
(1) India, that is Bharat, shall be a Union of States.
(2) The States and the territories thereof shall be as specified in the First
Schedule.
(3) The territory of India shall comprise
(a) The territories of the states
(b) The Union Territories specified in the First Schedule
(c) Such other territories as may be acquired.
Article 1 of the Constitution makes it clear that the territories of the States and that
of the Union Territories are fixed in terms of First Schedule to the Constitution.
India is a Union of States however the territory of India is not limited to the territo-
ries of the respective States but also includes other territories as may be acquired.
The Maritime Zone Act vide section 3(1) thereof provides that the sovereignty of
India extends to territorial waters, seabed and subsoil underlying such waters and
the air space over such waters. The limit of territorial waters is fixed at 12 nautical
miles from the baseline as per section 3(2) of the Maritime Zone Act.
The continental shelf of India comprises the seabed and subsoil of the submarine
areas that extend beyond the limit of its territorial waters throughout the natural
prolongation of its land territory to the outer edge of the continental margin or to
a distance of two hundred nautical miles from the baseline where the outer edge
of the continental margin does not extend up to that distance.
The Exclusive Economic Zone (‘EEZ’) of India is an area beyond and adjacent
to the territorial waters, and the limit of such zone is two hundred nautical miles
from the baseline.
Q 9. What is a State in the context of GST?
Ans. The definition of Union Territory in Article 366 (30) of the Constitution means
any Union Territory specified in the First Schedule of the Constitution and includes
any other territory comprised within the territory of India but not specified in
that Schedule. The territorial waterE-JOURNAL
is not referred to in the First Schedule of the
Constitution, and therefore, as per the Constitutional provision, territorial waters

up to twelve nautical miles is part of Union Territory.
In case of Great Eastern Shipping Company vs. State of Karnataka and Ors. on 23
January, 2004 before Karnataka High Court, the Court held that State of Karna-
taka had taxation powers over territorial waters. The matter was appealed against
before the Supreme Court and the Supreme Court in Civil Appeal No. 3383/2004
has stayed the order of the High Court. The Hon’ble Supreme Court on 13.1.2016
while hearing this case had observed as follows:
“any pronouncement of the court would have far reaching implications not
only for central state relationship but the federal character and separation
of legislative powers of the union and the States”.
The GST Council in its ninth meeting held on 16th January, 2017 took the decision
that the territorial water within the twelve nautical miles shall be treated as the
territory of the Union of India unless the Hon’ble Supreme Court decides other-
wise in the on-going litigation on the issue but the power to collect the State tax in
the territorial waters shall be delegated by the Central Government to the States.
Accordingly, for supplies in territorial waters, section 9 of IGST Act gives powers
to States to levy GST. Section 9 is reproduced below:
Notwithstanding anything contained in this Act, —
(a) where the location of the supplier is in the territorial waters, the location of
such supplier; or
(b) where the place of supply is in the territorial waters, the place of supply,
shall, for the purposes of this Act,
be deemed to be in the coastal State or Union territory where the nearest point of
the appropriate baseline is located.
Further, explanation clause to section 25(1) of CGST Act, 2017 on registration pro-
visions provides that every person who makes a supply from the territorial waters
of India shall obtain registration in the coastal State or Union territory where the
nearest point of the appropriate baseline is located.
Q 10. Can an exporter purchase goods without payment of tax on furnishing of a
declaration form?
Ans. No, there is no such provision in GST. Tax has to be payable on their inward
supplies and they can claim refund of the accumulated ITC.
However, there is a 0.1% scheme in which a supplier can supply goods to an exporter
by paying only 0.1% GST and claim refund of unutilised ITC. The exporter in such
a scenario cannot export on payment of integrated tax and take refund. He has to
adopt the LUT/Bond route only.
Q 11. What is the 0.1% scheme for procurement of exports by merchant exporters?
Ans. It is a scheme for merchant exporters who have an option to pay nominal GST
of 0.1% for procuring goods from domestic suppliers for export vide Notification
40/2017-Central Tax (Rate) and 41/2017-Integrated Tax (Rate) both dated 23.10.2017.
Exemption from payment of GST on so much of the tax leviable on such goods
E-JOURNAL
as is in excess of the amount calculated @ 0.1%, is granted, subject to fulfilment
of following conditions:
2019 FAQs 431
u supply on a tax invoice;

u recipient to export goods within 90 days from issue of invoice by supplier;
u recipient to indicate the GSTIN number of the registered supplier & tax
invoice number issued by the registered supplier in the shipping bill or bill
of export as the case may be;
u the registered recipient shall be registered with an Export Promotion Council
or a Commodity Board recognised by the Department of Commerce;
u the registered recipient shall place an order on registered supplier for
procuring goods at concessional rate and a copy of the same shall also be
provided to the jurisdictional tax officer of the registered supplier;
u the registered recipient shall move the said goods from place of registered
supplier -
(a) directly to the Port, Inland Container Deport, Airport or Land Customs
Station from where the said goods are to be exported; or
(b) directly to a registered warehouse from where the said goods shall be
moved to the Port, Inland Container Deport, Airport or Land Customs
Station from where the said goods are to be exported;
u if the registered recipient intends to aggregate supplies from multiple reg-
istered suppliers and then export, the goods from each registered supplier
shall move to a registered warehouse and after aggregation, the registered
recipient shall move goods to the Port, Inland Container Deport, Airport or
Land Customs Station from where they shall be exported;
u in case of situation referred to in above condition, the registered recipient
shall endorse receipt of goods on the tax invoice and also obtain acknowl-
edgement of receipt of goods in the registered warehouse from the ware-
house operator and the endorsed tax invoice and the acknowledgement of
the warehouse operator shall be provided to the registered supplier as well
as to the jurisdictional tax officer of such supplier; and
u when goods have been exported, the registered recipient shall provide copy
of shipping bill or bill of export containing details of Goods and Services Tax
Identification Number (GSTIN) and tax invoice of the registered supplier
along with proof of export general manifest or export report having been
filed to the registered supplier as well as jurisdictional tax officer of such
supplier.
Q 12. What are the provisions for refund of taxes for exporters in GST?
Ans. Provisions relating to refund are contained in section 54 of the CGST Act,
2017. It provides for refund of tax paid on zero-rated supplies of goods or services
or on inputs or input services used in making such zero-rated supplies, or refund
of tax on the supply of goods regarded as deemed exports, or refund of unutilized
input tax credit. Identical provisions exist under the IGST Act, 2017 and relevant
SGST/UTGST Acts.
E-JOURNAL
Q 13. Can unutilized input tax credit be allowed as refund to exporters?

Ans. Yes. Section 54(3) of the CGST Act, 2017 provides for refund of any unutilised
input tax credit of inputs and input services at the end of any tax period except where
(i) the goods exported out of India are subjected to export duty; or
(ii) the exporter claims drawback of CGST or refund of IGST paid on such
export.
Q 14. Will the principle of unjust enrichment apply to exports?
Ans. The principle of unjust enrichment is not applicable in case of exports of goods
or services as the recipient is located outside the taxable territory.
However, in respect of supplies to SEZs, section 54(8) has been amended vide
CGST (Amendment) Act, 2018 so as to make the principle of unjust enrichment
applicable. Thus, from the date of coming of the CGST (Amendment) Act, 2018
into force, the principle of unjust enrichment will be applicable in case of refunds
against supplies to SEZs, even though such supplies are zero rated.
Q 15. What is deemed export under GST Law? Whether any supply has been
categorized as deemed export by the Government?
Ans. Deemed export has been defined under section 2(39) of CGST Act, 2017 as
supplies of goods as may be notified under section 147 of the said Act. Under
section 147, the Government may, on the recommendations of the Council, notify
certain supplies of goods manufactured in India as deemed exports, where goods
supplied do not leave India, and payment for such supplies is received either in
Indian rupees or in convertible foreign exchange. Notification No. 48/2017-Central
tax dated 18th October, 2017 has been issued notifying the following supplies of
goods as deemed exports.
(i) Supply of goods by a registered person against Advance Authorisation.
(ii) Supply of capital goods by a registered person against Export Promotion
Capital Goods Authorisation.
(iii) Supply of goods by a registered person to Export Oriented Unit.
(iv) Supply of gold by a bank or Public Sector Undertaking specified in the
notification No. 50/2017-Customs, dated the 30th June, 2017 (as amended)
against Advance Authorisation.
Q 16. What are the documents to be submitted as evidence of supplies as deemed
export supplies?
Ans. A supplier of deemed export supplies has to submit following documents for
claiming refund:
(i) Acknowledgement by the jurisdictional Tax officer of the Advance Authori-
sation holder or Export Promotion Capital Goods Authorisation holder, as
the case may be, that the said deemed export supplies have been received
by the said Advance Authorisation or Export Promotion Capital Goods Au-
thorisation holder, or a copy of the tax invoice under which such supplies
have been made by the supplier, duly signed by the recipient Export Oriented
Unit that said deemed exportE-JOURNAL
supplies have been received by it.
2019 FAQs 433
(ii) An undertaking by the recipient of deemed export supplies that no input

tax credit on such supplies has been availed of by him.
(iii) An undertaking by the recipient of deemed export supplies that he shall not
claim the refund in respect of such supplies and the supplier may claim the
refund.
(Notification No. 49/2017-Central Tax dated 18th October, 2017)
Q 17. When an exporter cannot use the route of payment of IGST and taking
refund under Rule 96 of CGST Rules, 2017?
Ans. Position from 23rd October, 2017 to 8th October, 2018: An exporter cannot
use the route of payment of IGST and taking refund under Rule 96 of CGST Rules,
2017 if he receives supplies on which following benefits are availed:
If Supplier Claims benefit of -
(i) Deemed Exports (Notn. No. 48/2017-CT)
(ii) 0.1% scheme (Notn. No. 40/2017-CT(R) and 41/2017-IGST(R))
(iii) EOU Scheme (Notn. No. 78/2017-Customs)
(iv) AA/EPCG etc. (Notn. No. 79/2017-Customs)
Position from 9th October, 2018: An exporter cannot use the route of payment of
IGST and taking refund under Rule 96 of CGST Rules, 2017 if he receives supplies
on which following benefits are availed-
(i) Deemed Exports (Notn. No. 48/2017-CT)
(ii) 0.1% scheme (Notn. No. 40/2017-CT(R) and 41/2017-IGST(R))
Or, if the exporter avails following benefits-
(i) EOU Scheme (Notn. No. 78/2017-Customs)
(ii) AA/EPCG etc. (Notn. No. 79/2017-Customs, except for capital goods)
In the above cases, he needs to avail refund of unutilised ITC as per Rule 89(4A)/(4B)
(Notification No. 54/2018 - Central Tax, dated 09.10.2018)
Q 18. What would be the GST rate if the product procured by merchant exporter
at 0.1 per cent is further exported on payment of IGST?
Ans. The option of payment of IGST and taking refund is not available in case the
exporter has procured the goods under 0.1% scheme. He should avail the LUT facility
while exporting such goods so that there is no tax liability at the time of export.
Q 19. Can we export under normal procedure without availing the benefit of 0.1
per cent while procuring goods for exports?
Ans. Yes, the facility of procuring goods at 0.1 per cent is an optional facility which
is available subject to adhering to the conditions mentioned in Notification no.
41/2017-Integrated Tax (Rate) dated 23rd October, 2017. In case, an exporter wants
to procure the goods for exports on payment of applicable GST and subsequent
exports either on LUT or on payment of IGST, the exporter can do it and claim
back ITC or IGST, as the case may be.
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Q 20. Can duty credit scrips received as incentive by exporters such as MEIS, SEIS
etc. be utilised for payment of all duties at the time of import?
Ans. No, these scrips can be utilised only for payment of Basic Customs duty and
Safeguard Duty, Transitional Product Specific Safeguard Duty, and Anti-dumping
Duty. In case of non-GST supplies like petroleum products etc., the scrips can also
be used for payment of duties like central excise, CVD/SAD.
The scrips cannot be used for payment of any type of GST-IGST/CGST/SGST/
UTGST or compensation cess.
Q 21. How can a manufacturer exporter of exempted goods take input stage credit
on raw materials used in the manufacture of exported goods?
Ans. Under IGST law a person engaged in export of goods which is an exempt sup-
ply is eligible to avail input stage credit for zero rated supplies. He needs to choose
the Bond/LUT route and not payment of integrated tax route. Once the goods are
exported, refund of unutilized credit can be availed under section 16(3)(a) of IGST
Act, 2017 and section 54 of the CGST Act, 2017 and the rules made there.
Q 22. What is the rate of duty on sale of MEIS/SEIS scrips?
Ans. The MEIS/SEIS scrips are classifiable under HSN code 4907 and the sale of
such scrips is exempted vide S. No. 122A of Notification No. 2/2017-Central Tax
(Rate), dated 28-06-2017, as amended vide Notification No. 35/2017-Central Tax
(Rate) dated 13-10-2017.
Q 23. Whether sale of DFIA scrips liable to GST?
Ans. As per Notification No. 35/2017-Central Tax (Rate), dated 13-10-2017, “Duty
Credit scrips” are exempted from GST. DFIA scrips are not “Duty Credit scrips”
and therefore are leviable to GST @ 12%.
Q 24. Can a person opting for composition scheme make supply of goods to SEZ?
Ans. No, because all supplies to SEZ are treated as inter-State supplies. A person
paying tax under composition scheme cannot make inter-State outward supply
of goods.
Q 25. An exporter gets an order from a Selling agent to whom he pays commission.
Will it be taxable under GST?
Ans. Situation I- Selling agent is located in India: The selling agent in India is pro-
viding service to the exporter. Supplier and recipient are in India, therefore place
of supply would be governed by the default provision in section 12 of IGST Act,
2017 and would be location of exporter. Thus, it would be taxable in GST.
Situation II- Selling agent is located outside India: The foreign agent, who facilitates
the supply of goods, is covered within the definition of intermediary. Since the
supplier is outside India and recipient is in India, place of supply would be as per
section 13 of IGST Act, 2017. The place of supply of service for services provided
by intermediary would be the location of service provider, i.e. the place where he
is registered. Since a foreign agent is located outside India and not registered in
India, the commission paid to him will not be taxable.
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2019 FAQs 435
Q 26. Whether commission received by a buying agent for helping procuring goods
from an exporter is exempted from GST?
Ans. Situation I- Buying agent is located in India: The buying commission received
by buying agent in India from the importer overseas in foreign exchange will be
taxable as the agent is covered in definition of intermediary and therefore place
of supply is in India.
Situation II- Buying agent is located outside India: The buying commission received
will not be taxable as place of supply will be outside India.
Q 27. Does GST be payable on goods not intended to be sold, taken out for par-
ticipation in overseas exhibitions and trade fairs and brought back into India after
exhibition?
Ans. GST is not payable in such cases. Exporters will need exhibition participation
letter and no foreign exchange involved letter from the concerned bank for the
purpose of exchange control requirements.
At the time of re-import of the subject goods, identity of goods with respect to the
export documents needs to be established to seek exemption from import duty in
accordance with Customs provisions.
Q 28. What is e-wallet scheme?
Ans. Concept of “e-Wallet” is being worked upon by a committee appointed by GST
Council. The e-wallet of the exporter would be credited with a notional amount
on the basis of the past export performance. An exporter could use the balance
in e-Wallet to pay tax liability and then adjust the credit against the refund paid
to him. The notional credit in e-Wallet is like an advance refund, with the restric-
tion that this could only be used to pay taxes and would be adjusted against final
payment of refunds. The credit in e-Wallet could be used for payment of IGST on
imports thus ensuring that there was no additional burden of working capital. As
regards payment of GST on domestic purchases, the e-Wallet system would permit
transfer of balances from the exporter’s account to his supplier’s account so that
GST could be paid by the supplier on the basis of the amount transferred in his
e-Wallet by the exporter. The working capital requirement in the eco-system would
get reduced by the amount of the notional credit given in the e-Wallets. This credit
would be used to pay IGST, GST etc. The details of the scheme are being worked
out and will be announced later.
Q 29. Whether section 16 of the IGST applicable to exports in respect of compen-
sation cess?
Ans. Section 11(2) of the GST (Compensation to States) Act, 2017 provides that
provisions of IGST Act, and the rules made thereunder, shall, mutatis mutandis,
apply in relation to the levy and collection of the cess leviable under section 8 on
the inter-State supply of goods and services as they apply in relation to the levy
and collection of integrated tax on such inter-State supplies under the said Act.
Thus, provisions of section 16 of the IGST Act, 2017, relating to zero rated supply
will apply mutatis mutandis for the purpose of Compensation Cess. Exporter will
be eligible for refund of Compensation Cess paid on goods exported by him and/
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or no Compensation Cess will be charged on goods exported by an exporter under
bond and he will be eligible for refund of input tax credit of Compensation Cess
relating to goods exported [on similar lines as refund of input taxes under section
16(3)(a) of the IGST, 2017].
(Circular No. 1/1/2017-Compensation Cess, dated 26th July, 2017)
21.2 Export of Services

Q 30. What is supply of services in the GST?
Ans. As in the earlier service tax regime, five conditions have been prescribed for
a service to be treated as exports in GST. The five conditions comprised in the
definition of the term “Export of Services” are cumulative and are to be fulfilled in
totality in order to consider a transaction of supply of service as an export supply.
They are as under:
(i) the supplier of service is located in India;
(ii) the recipient of service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of service
in convertible foreign exchange or in Indian rupees wherever permitted by
the Reserve Bank of India; and
(v) the supplier of service and the recipient of service are not merely establish-
ments of a distinct person in accordance with Explanation 1 in section 8;
[Section 2(6) of IGST Act read with IGST (Amendment) Act, 2018]
Q 31. What is location of supplier of service?
Ans. The location of supplier of service has been defined in section 2(15) of the
IGST Act, 2017 and is to be determined by applying the sequential test given in the
definition which is reproduced hereunder:
(a) Where a supply is made from place of business for which the registration
has been obtained, the location of such place of business.
(b) Where a supply is made from a place other than the place of business for
which registration has been obtained (a fixed establishment elsewhere), the
location of such fixed establishment.
(c) Where a supply is made from more than one establishment, whether the
place of business or fixed establishment, the location of the establishment
most directly concerned with the provision of the supply.
(d) In absence of such places, the location of the usual place of residence of the
supplier.
A “place of business” is defined in section 2(85) of the CGST Act, 2017 and includes—
(a) a place from where the business is ordinarily carried on, and includes a
warehouse, a godown or any other place where a taxable person stores his
goods, supplies or receives goods or services or both; or
(b) a place where a taxable person maintains his books of account; or
(c) a place where a taxable person is engaged in business through an agent, by
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whatever name called.
2019 FAQs 437
A fixed establishment is defined in section 2(50) of the CGST Act, 2017 and means
a place (other than the registered place of business) which is characterised by a
sufficient degree of permanence and suitable structure in terms of human and tech-
nical resources to supply services, or to receive and use services for its own needs.
Q 32. How is condition 5 viz the supplier of service and the recipient of service are
not merely establishments of a distinct person in accordance with Explanation 1
in section 8 of the IGST Act, 2017 impacts the taxability?
Ans. Explanation 1 in section 8(2) of the IGST Act, 2017 states that where a per-
son has an establishment in India and any other establishment outside India then
such establishments shall be treated as establishment of distinct persons. Where
the Indian arm is set up as a liaison office or a branch they would be treated as
establishments of the same entity and hence the supply inter se shall not qualify
as export of services.
However, if the Indian arm is set up as a wholly owned subsidiary company in-
corporated under the Indian laws, the foreign company and the Indian subsidiary
would not be governed by the provisions of distinct person or related person as
both are separate legal entities.
Q 33. Whether supply of services to Nepal and Bhutan in Indian rupees are liable
to GST?
Ans. No. Supply of services where place of supply is Nepal & Bhutan against pay-
ment in Indian Rupees are exempted from GST vide Sr. No.10D of notification
no. 09/2017- Integrated Tax (Rate), dated 28.06.2017 as amended by Notification
42/2017-Integrated Tax (Rate), dated 27.10.2017.
Further, requirement of remittance in foreign exchange has been relaxed by
amendment in the definition of “export of services” in section 2(6) of the IGST Act,
2017 vide the IGST (Amendment) Act, 2018. The payment for such service can now
be received by the supplier of service in Indian rupees wherever permitted by the
Reserve Bank of India.
Q 34. Whether services supplied by an establishment of a person in India to any
establishment of that person outside India, which are treated as establishments of
distinct persons in accordance with Explanation 1 in section 8 of the Integrated
Goods and Services Tax Act, 2017 taxable?
Ans. No. Such services are exempted with a condition that the place of supply
should be outside India as per section 13 of the IGST Act, 2017 (Notification No.
15/2018-Integrated Tax (Rate), dated 26th July, 2018)
21.3 Duty Drawback Scheme

Q 35. Is there any impact of GST on the Duty Drawback Scheme for exporters?
Ans. Following changes have been done in the Duty Drawback scheme in Customs:
(i) No amendments have been made to the drawback provisions (Section 74
or Section 75) under Customs Act, 1962 in the GST regime.
(ii) However, the duty drawback rules have substantially been amended and
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new Customs and Central Excise Duties Drawback Rules, 2017 with effect
from 01.10.2017, have been issued. (Notification No. 88/2017-Customs (N.T)

dated 21st September, 2017)
(iii) The definition of drawback has been amended to exclude Integrated Tax
and GST Compensation Cess, hence no refund of any of the GST taxes.
(iv) A new Duty Drawback schedule, comprising of only one rate for every
product irrespective of whether ITC is taken by the exporter or not has been
introduced with effect from 01.10.2017. (Notification No. 89/2017-Customs
(N.T) dated 21st September, 2017)
(v) The rates of drawback have substantially been reduced. The earlier rebate
had been done away with. Instead now, refund of integrated tax, if paid by
the exporter, is refunded by Customs.
(vi) The refund of integrated tax is irrespective of whether drawback is taken
by the exporter or not.
(vii) The drawback scheme will continue in terms of both section 74 and section
75. Option of All Industry Rate (AIR) as well as Brand Rate under section
75 shall also continue.
(viii) Drawback under section 74 will refund Customs duties as well as Integrated
Tax and Compensation Cess paid on imported goods which are re-exported.
However, a part of the Integrated Tax and Compensation Cess paid on im-
ported goods would have gone to the respective States/UT, therefore, the
same can only be refunded only if the concerned State/UT has not refunded
it and the importer has not taken ITC of the same.
Q 36. Will drawback at higher rate be available to exporters who do not avail Input
Tax Credit (ITC) like presently available to those who do not avail CENVAT credit?
Ans. Prior to GST, there were two All Industry Rates (AIRs) of duty drawback on
exports. The higher rate rebated Customs duties, Central Excise duties and Service
tax on inputs or input services used in the manufacture of export goods subject to
the condition that no input credit i.e. CENVAT credit was claimed. The lower rate
rebated Customs duties on inputs and Central excise duty on fuel for generation
of captive power, used in the manufacture of export goods.
In the post GST era, as Central Excise duties and Service Tax have been subsumed
in GST, for which full input tax credit is available, only single rate of AIRs have
been continued.
Therefore, there will be no difference in rate of Drawback for exporters not availing
ITC in GST regime. In GST regime, drawback will be admissible only at lower rate
determined on the basis of customs duties paid on imported materials used in the
manufacture of export goods.
However, as an export facilitation measure, for the transition period of 3 months
from July to September, 2017, drawback at higher composite rates were continued
to be granted subject to the condition that no input tax credit of CGST/IGST was
claimed, no refund of IGST paid on export goods was claimed and no CENVAT
credit was carried forward.
Q 37. Do state taxes also are refunded through duty drawback scheme?
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Ans. No. The central taxes which are outside GST but are embedded in exports
2019 FAQs 439
namely Customs, Central Excise are refunded under the Duty Drawback Scheme.
The State taxes are only refunded in respect of apparel and clothing under the
Refund of State Levies (RoSL) scheme wherein the amount is refunded from the
budget of Ministry of textiles.
21.4 Special Economic Zone (SEZ)

Q 38. How are supplies by and to SEZs treated in GST?
Ans. There is no change in the SEZ scheme. All imports by SEZs are exempted
from any duty/tax.
As per section 7(5)(b) of the IGST Act, 2017, a supply of goods or services or both to
or by a SEZ developer or a SEZ unit is treated to be a supply of goods or services
or both in the course of inter-State trade or commerce.
Further as per section 16 of IGST Act, 2017 supply of goods or services or both to
a SEZ developer or a SEZ unit is considered as zero rated supply.
Q 39. What will be the IGST rates when goods or services or both are supplied
to SEZ unit?
Ans. Supplies to SEZ unit or developer are considered as zero rated. As such, the
supplier can choose to either supply on payment of IGST and claim refund or
supply without payment of IGST and in that scenario can only claim the refund
of unutilized ITC, if any.
The IGST rates when supplying goods and services to SEZ unit on payment of tax
and taking refund route, will be as per rate Notifications No. 01, 02 and 03/2017-In-
tegrated Tax (Rate) dated 28.06.2017(for goods) and rate Notifications No. 08 and
09/2017 dated 28.06.2017(for Services) as amended from time to time.
Q 40. An SEZ unit in Mumbai avails hotel accommodation in Goa. Whether such
supply is intra-State or inter-State supply?
Ans. It is an established principle of interpretation of statutes that in case of an
apparent conflict between two provisions, the specific provision shall prevail over
the general provision. Section 7(5)(b) of the IGST Act is a specific provision relating
to supplies of goods or services or both made to a SEZ developer or a SEZ unit,
which states that such supplies shall be treated as inter-State supplies.
Accordingly, CBIC vide Circular No. 48/22/2018-GST dated 14.06.2018 has clar-
ified that services of short term accommodation, conferencing, banqueting etc.,
provided to a SEZ developer or a SEZ unit shall be treated as an inter-State supply.
Q 41. Whether SEZ unit or developer needs to pay IGST when it received supplies
which are under reverse charge mechanism?
Ans. All supplies to SEZs are zero rated. However, the suppliers are given two op-
tions. In this case, the supplier is not liable to pay GST as the supply is under reverse
charge mechanism. The recipient is considered as deemed supplier. Therefore, SEZ
has to pay GST in this case.
Q 42. What is the refund mechanism when a DTA supplier supplies goods/services
to SEZ Unit? E-JOURNAL
Ans. The supplier to SEZs has following two options:
(i) Supply goods or services or both to SEZ unit or developer on payment of

Integrated tax and claim refund.
(ii) Supply goods or services or both to SEZ unit or developer without payment
of Integrated tax under LUT/Bond and claim refund of unutilized ITC.
Option I: Supply goods or services or both to SEZ unit or developer on payment
of Integrated tax and claim refund.
The supplier has to follow the procedure outlined in rule 89 of the CGST Rules, 2017.
The refund in respect of supplies to a SEZ unit or a SEZ developer, the application
for refund shall be filed by the -
(a) supplier of goods after such goods have been admitted in full in the Special
Economic Zone for authorised operations, as endorsed by the specified
officer of the Zone;
(b) supplier of services along with such evidence regarding receipt of services
for authorised operations as endorsed by the specified officer of the Zone
The refund application in form GST RFD-01 shall be accompanied with:
(i) a statement containing the number and date of invoices as provided in
rule 46 along with the evidence regarding the endorsement specified in the
second proviso to sub-rule (1) in the case of the supply of goods made to a
Special Economic Zone unit or a Special Economic Zone developer;
(ii) a statement containing the number and date of invoices, the evidence re-
garding the endorsement specified in the second proviso to sub-rule (1) and
the details of payment, along with the proof thereof, made by the recipient
to the supplier for authorised operations as defined under the Special Eco-
nomic Zone Act, 2005, in a case where the refund is on account of supply
of services made to a Special Economic Zone unit or a Special Economic
Zone developer;
(iii) a declaration to the effect that the Special Economic Zone unit or the Special
Economic Zone developer has not availed the input tax credit of the tax
paid by the supplier of goods or services or both, in a case where the refund
is on account of supply of goods or services made to a Special Economic
Zone unit or a Special Economic Zone developer.
(Section 89(1) of CGST (Rules), 2017.)
Option II: Supply goods or services or both to SEZ unit or developer without
payment of Integrated tax under LUT/Bond and claim refund of unutilized ITC.
The supplier has to follow the procedure outlined in rule 96A of the CGST Rules,
2017. He needs to submit a bond/LUT in FORM GST RFD-11 to the jurisdictional
Commissioner, binding himself to pay the tax due along with the interest specified
under sub-section (1) of section 50 within a period of —
(a) fifteen days after the expiry of three months, or such further period as may
be allowed by the Commissioner, from the date of issue of the invoice for
export, if the goods are not exported out of India; or
(b) fifteen days after the expiryE-JOURNAL
of one year, or such further period as may
be allowed by the Commissioner, from the date of issue of the invoice for
2019 FAQs 441
export, if the payment of such services is not received by the exporter in

convertible foreign exchange.
Q 43. Whether a DTA supplier has to furnish a Bond or LUT while supplying
goods/services without payment of integrated tax?
Ans. Yes, a DTA supplier has to furnish a Bond or LUT while supplying goods/ser-
vices without payment of integrated tax as per section 16 of the Integrated Tax Act,
2017.
Q 44. Whether the Bond/LUT by a DTA supplier should be submitted to the De-
velopment Commissioner SEZ or the jurisdictional proper officer of GST?
Ans. As per Circular No. 2/2/2017-GST dated 04.07.2017 Bond/LUT shall be fur-
nished to the jurisdictional Deputy/Assistant Commissioner having jurisdiction
over the principal place of business of the exporter.
Q 45. What are the requirement for submitting Bond/LUT?
Ans. The requirement of Bond/LUT will be as prescribed under Circulars No. 4,
8 and 40/2017.
The registered person (exporters) shall fill and submit FORM GST RFD-11 on the
common portal. An LUT shall be deemed to be accepted as soon as an acknowl-
edgement for the same, bearing the Application Reference Number (ARN), is gen-
erated online. No document needs to be physically submitted to the jurisdictional
office for acceptance of LUT.
If it is discovered that an exporter whose LUT has been so accepted, was ineligible
to furnish an LUT in place of bond as per Notification No. 37/2017-Central Tax,
then the exporter’s LUT will be liable for rejection. In case of rejection, the LUT
shall be deemed to have been rejected ab initio.
(Circular No. 8/2017 as amended by 40/2018 dated 06.04.2018).
Q 46. Whether Bond/LUT is required to be submitted in case of exempted/non-
GST goods?
Ans. In case of zero rated supply of exempted or non-GST goods, the requirement
for furnishing a bond or LUT cannot be insisted upon. In this regard, the circular
no. 45/19/2018-Central Tax dated 30-05-2018 clarifies that in respect of refund
claims on account of export of non-GST and exempted goods without payment
of integrated tax, LUT/bond is not required
Q 47. If a DTA supplier is supplying the goods to SEZ unit without payment of
integrated tax what will the taxable value as per the format prescribed for SEZ
supply?
Ans. The taxable value will be the invoice value of the goods supplied to the SEZ unit.
Q 48. Whether Bank as a nominated agency in the non-processing area of SEZ
will be eligible for exemption granted to SEZs?
Ans. No. Bank as a nominated agency in the non-processing area of SEZ will not
be eligible for exemption granted to SEZ.
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Q 49. Whether the exemption granted to nominated agency pre-GST regime will
continue in the post GST regime for importing gold?
Ans. The bank as a nominated agency will continue to get the exemption of Cus-
toms duty as prevailed before the GST regime vide Notification No. 57/2000-Cus
dated 08.05.2000.
Import of gold by specified banks and specified PSUs as mentioned in Notification
No. 77/2017-Cus dated 13.10.2017 attracts Nil IGST. However, other banks will
have to pay the IGST as per the Notification No. 26/2017-Cus dated 28.06.2017 as
no exemption has been granted for payment of IGST duty to these.
Q 50. Can bank recover the IGST rate from the SEZ Unit while supplying gold to
the SEZ Unit?
Ans. No. The banks cannot recover IGST rate from the SEZ Unit. However, the
Banks can claim the refund of the IGST paid on imports after supplying the goods
to the SEZ Unit.
Q 51. Whether services of short term accommodation, conferencing, banqueting
etc., provided to a SEZ developer or a SEZ unit shall be treated as an intra or
inter-State supply?
Ans. Even though as per section 12(3)(c) of the IGST Act, the place of supply of
services by way of accommodation in any immovable property for organising any
functions is the location at which the immovable property is located and therefore
the above supply should be intra-State supply, it is an established principle of inter-
pretation of statutes that in case of an apparent conflict between two provisions,
the specific provision shall prevail over the general provision.
Section 7(5)(b) of the IGST Act is a specific provision relating to supplies of goods
or services or both made to a SEZ developer or a SEZ unit, which states that such
supplies shall be treated as inter-State supplies. Therefore, the services of short
term accommodation, conferencing, banqueting etc., provided to a SEZ developer
or a SEZ unit shall be treated as an inter-State supply.
(CBIC Circular No. 48/22/2018- GST dated 14th June, 2018)
Q 52. Whether the benefit of zero rated supply can be allowed to all procurements
by a SEZ developer or a SEZ unit such as event management services, hotel and
accommodation services, consumables etc.?
Ans. Subject to the provisions of section 17(5) of the CGST Act, if event man-
agement services, hotel, accommodation services, consumables etc. are received
by a SEZ developer or a SEZ unit for authorised operations, as endorsed by the
specified officer of the Zone, the benefit of zero rated supply shall be available in
such cases to the supplier.
(CBIC Circular No. 48/22/2018- GST dated 14th June, 2018)
Q 53. Whether a company having a unit in SEZ and a unit in DTA require separate
registration for both the units?
Ans. Yes, as per Section 8(1) of CGST (Registration) Rules, 2017 a person having a
units(s) in a Special Economic Zone or being a Special Economic Zone developer
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shall make a separate application for registration as a business vertical distinct
from his other units located outside the Special Economic Zone.
2019 FAQs 443
In the CGST Amendment Act, 2018, the concept of business vertical has been
removed. However, following proviso has been inserted in section 25(2), making
it mandatory for SEZs to have separate registration.
“Provided further that a person having a unit, as defined in the Special Economic
Zones Act, 2005, in a Special Economic Zone or being a Special Economic Zone
developer shall have to apply for a separate registration, as distinct from his place
of business located outside the Special Economic Zone in the same State or Union
territory.”
Q 54. Whether a SEZ unit or SEZ developer procure any goods or services from
an unregistered supplier, and whether these will be zero rated supplies?
Ans. Supplies to SEZ unit or SEZ developer have been accorded the status of in-
ter-State supplies under the IGST Act. Under the GST Law, any supplier making
inter-State supplies has to compulsorily get registered under GST. Thus anyone
making a supply to a SEZ unit or SEZ developer has to necessarily obtain GST
registration.
Q 55. Whether SEZ Act/Rules are aligned with the GST?
Ans. SEZ Rules, 2006 have been synced with the GST Provisions vide SEZ (Amend-
ment) Rules, 2018. The terms like Service Tax, Stamp Duty etc replaced with CGST/
SGST/IGST/UTGST etc. GST registration certificate required instead of Sales tax
registration earlier for establishment/setting up of SEZ unit(s)
Q 56. Whether duty drawback is admissible on supplies by DTA units to SEZs?
Ans. Yes. Supplies made by DTA unit to SEZ Unit or developer are eligible for
drawback in cases where the SEZ Unit or developer issues a disclaimer to the DTA
supplier and drawback is claimed by the DTA supplier.
Drawback shall be processed and paid by the office of Principal Commissioner or
Commissioner of Customs/Customs (Preventive) in whose jurisdiction the DTA Unit
falls. Brand rate fixation also to be done by the office of Principal Commissioner/
Commissioner of Customs/Commissioner of Customs (Preventive).
21.5 Export Oriented Units

Q 57. Whether the exemption granted to EOUs pre GST regime will continue in
the post GST regime?
Ans. Imports by EOUs: The EOUs will continue to get the exemption of Customs
duty as prevailed before the GST regime vide Notification No. 52/2003-Cus, dated
31.03.2003.
The imports by EOUs are to be levied IGST and compensation cess as per the
Notification No. 59/2017-Cus, dated 30.06. 2017. However, as part of export
package, imports by EOUs have been temporarily exempted from payment of
IGST and compensation cess upto 31st March, 2019 vide Customs Notification No.
65/2018-Customs dated 24.09.2018.
Supply to EOUs: A supply to EOU is considered as deemed exports in terms of
Notification No. 48/2017-Central tax dated 18th October, 2017. Supply has to be
made on payment of GST followingE-JOURNAL
the procedure as prescribed vide Circular No.
14/14/2017-GST, dated 06.11.2017 but the refund of such GST can be claimed
either by supplier or receiver EOU.
Q 58. Is there any procedural change in import clearance by EOUs post introduc-
tion of GST?
Ans. For import of goods, EOUs are required to follow Rule 5 of Customs (Import
of goods at Concessional rate of Duty) Rules, 2017 instead of earlier procedure
of obtaining procurement certificate. Under this, EOU has to submit a copy of
requirement of goods to be imported to the jurisdictional Customs Officer as well
as to the Customs Officer at port of import. On the basis of the declaration by
EOU, Customs Officer at port will allow the clearance of goods giving benefit of
exemption notification No. 52/2003, dated 31.03.2003. There is no requirement of
separate continuity bond to be submitted by EOU as per the requirement under
Customs (Import of goods at Concessional Rate of Duty) Rules, 2017 as B-17 bond,
being a general purpose bond will serve the said purpose.
The inter unit transfer would be on invoice on payment of applicable GST taxes.
However, such transfer would be without payment of custom duty. The supplier
unit will endorse on such documents the amount of custom duty, availed as exemp-
tion, if any, on the goods intended to be transferred. The recipient unit would be
responsible for paying such basic customs duty, as is obligated under Notification
no. 52/2003-Cus dated 31-3-2003 (as amended), when the finished goods made out
of such goods or such goods are cleared in DTA.
(Circular Nos. 35/2016-Customs dated 29.06.17 and
29/2017-Customs, dated 17.07.2017)
Q 59. Can EOUs take input tax credit of the IGST paid on imports?
Ans. Yes. EOUs can avail credit of IGST paid which can be used by them for pay-
ment of IGST for local supply of goods manufactured by them.
Q 60. Are EOUs entitled for refund of IGST and what is the time limit for obtaining
refund on the IGST paid?
Ans. Yes. EOUs are entitled for refund of IGST paid on export or refund of accu-
mulated input tax credit (ITC) on account of exports made under bond/LUT. As
per section 54 of CGST Act, 2017, a refund application may be filed within two
years from the relevant date by EOUs. The application in form RFDOIA has to
accompanied with the documents as prescribed under Rule 89 of CGST Rules,
2017 for claiming refund of ITC. Refund of IGST on exports is available as per
Rule 96 of CGST Rules and shipping bill filed is deemed to be application filed for
refund. 90% of the total amount claimed as refund will be granted within 10 days
of making application or within 7 days of issuance of acknowledgement of refund
application. Balance amount of 10% will be granted after verification of documents
furnished by the applicant.
Q 61. Will supply of goods from one EOU to another EOU termed as inter unit
transfer and whether the same will attract IGST?
Ans. Yes, the EOUs have to pay applicable IGST on inter unit transfer also. The basic
customs duty exempted on inputs of supplier unit utilised in such transferred goods
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would have to be reversed by the recipient EOU at the time of clearance into DTA.
2019 FAQs 445
Q 62. What are the conditions for DTA sales by EOUs?

Ans. DTA sale of goods by EOU is subject to fulfilment of following conditions:
(i) Fulfilment of maintaining positive Net Foreign Exchange Earnings (NFE)
(ii) Payment of applicable GST on the product under DTA sale
(iii) Reversal of the Basic Customs Duty exemption availed by the unit on the
inputs used in the manufacture of products under DTA Sale.
Q 63. Can the EOU use MEIS/SEIS scrips for payment of IGST or CGST?
Ans. No, the scrips cannot be used for payment of IGST or CGST.
Q 64. What will be the value to be taken for levy of IGST on goods imported by
EOUs?
Ans. IGST is levied on the value of imported goods including Customs duty and
Customs Cess levied thereon.
21.6 Imports
Q 65. How will imports be taxed under GST?
Ans. Import of Goods and Services are treated as deemed inter-State supplies
and IGST is levied on import of goods and services in to the country. The IGST on
import of goods is leviable under the provisions of Section 5 of the IGST Act, 2017
read with Section 3(5) of the Customs Tariff Act, 1975 and shall be levied at the
time of imports along with the levy of the applicable Customs duties on the value
in accordance with Section 3 of the Customs Tariff Act, 1975.
Q 66. What is import of goods under the GST regime? How are they taxed?
Ans. The import of goods has been defined in sub-section (10) of Section 2 of the
IGST Act, 2017 as bringing goods into India from a place outside India.
The IGST Act, 2017 provides that the integrated tax on goods shall be in addition
to the applicable Basic Customs Duty (BCD) which is levied as per the Customs
Tariff Act. In addition, GST compensation cess, may also be leviable on certain
luxury and de-merit goods under the Goods and Services Tax (Compensation to
States) Cess Act, 2017.
Q 67. What valuation is to be adopted for levying integrated tax and compensation
cess?
Ans. The value of the goods for the purpose of levying Integrated tax as well as
compensation cess shall be assessable value plus Customs Duty levied under the
Act, and any other duty chargeable on the said goods under any law for the time
being in force as an addition to, and in the same manner as, a duty of customs.
For instance: Suppose the assessable value of an article imported into India is
` 100/-. Basic Customs Duty is 10% ad-valorem; SWC- 10%; Integrated tax rate is
18% and compensation cess is 15%. The taxes will be calculated as under:
Particulars Duty
(A) Assessable Value E-JOURNAL ` 100/-
(B) Basic Customs Duty@10% ` 10/-
Particulars Duty
(C) Social Welfare Charge @10% ` 1/-
(D) Value for Integrated Tax ` 111/-
(E) Integrated Tax @18% ` 19.98
(F) Value for Compensation Cess ` 111
(G) Compensation Cess @ 15% ` 16.65
(H) Total Duty (B+C +E+G) ` 47.63
Q 68. Whether Anti-dumping duty/safeguard duty are to be added for determining
the value for integrated tax?
Ans. Yes. In cases where imported goods are liable to Anti-Dumping Duty or Safe-
guard Duty, value for calculation of IGST as well as Compensation Cess shall also
include Anti-Dumping Duty amount and Safeguard duty amount. Let’s say in the
above case if Safeguard duty is ` 20/-, the assessable value for integrated tax as
well as compensation cess shall be ` 131/-. The taxes calculation chart is as under:
Particulars Duty
(A) Assessable Value ` 100/-
(B) Basic Customs Duty@10% ` 10/-
(C) Social Welfare Charge @10% ` 1/-
(D) Safeguard Duty ` 20/-
(E) Value for Integrated Tax ` 131/-
(F) Integrated Tax @18% ` 23.58
(G) Value for Compensation Cess ` 131/-
(H) Compensation Cess @ 15% ` 19.65
(I) Total Duty (B+C +D+F+H) ` 74.23
Q 69. Whether GST is leviable on baggage imports?
Ans. Passenger Baggage are exempted from IGST as well as compensation cess.
The basic customs duty at the rate of 35% and the applicable education cess shall
be leviable on the value which is in excess of the duty free allowances provided
under the Baggage Rules, 2016.
Q 70. Please explain the tax treatment of goods imported into India and deposited
in a warehouse and sold while in warehouse before clearance from Customs
Ans. The Customs Act, 1962 provides for removal of goods from a customs sta-
tion to a warehouse without payment of duty. The said Act has been amended to
include ‘warehouse’ in the definition of “customs area” in order to ensure that an
importer would not be required to pay the Integrated tax at the time of removal
of goods from a customs station to a warehouse.
The “transfer/sale of goods while being deposited in a customs bonded warehouse”
is a common trade practice whereby the importer files an into-bond bill of entry
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and stores the goods in a customs bonded warehouse and thereafter, supplies such
2019 FAQs 447
goods to another person who then files an ex-bond bill of entry for clearing the said
goods from the customs bonded warehouse for home consumption.
As per section 7(2) of the IGST Act, 2017, the supply of goods imported into the
territory of India, till they cross the customs frontiers of India, is treated as a supply
of goods in the course of inter-State trade or commerce. Further, the proviso to
section 5(1) of the IGST Act provides that the integrated tax on goods imported into
India would be levied and collected in accordance with the provisions of section 3
of the Customs Tariff Act, 1975. Thus, in case of supply of the warehoused goods,
the point of levy would be the point at which the duty is collected under section
12 of the Customs Act, 1962 which is at the time of clearance of such goods under
section 68 of the Customs Act.
The Customs Tariff Act has been amended and a sub-section (8A) has been insert-
ed in section 3 of the CTA vide Finance Act, 2018, with effect from 31st March,
2018, so as to provide that the valuation for the purpose of levy of integrated tax
on warehoused imported goods at the time of clearance for home consumption
would be either the transaction value or the value as per section 3(8) of the CTA (i.e.
valuation done at the time of filing the into-bond bill of entry), whichever is higher.
Thus, the integrated tax shall be levied and collected at the time of final clearance
of the warehoused goods for home consumption i.e., at the time of filing the ex-
bond bill of entry and the value addition accruing at each stage of supply shall
form part of the value on which the integrated tax would be payable at the time
of clearance of the warehoused goods for home consumption. In other words, the
supply of goods before their clearance from the warehouse would not be subject
to the levy of integrated tax and the same would be levied and collected only
when the warehoused goods are cleared for home consumption from the customs
bonded warehouse.
Q 71. Whether high seas sales treated as supply in GST?
Ans. ‘High Sea Sales’ is a common trade practice whereby the original importer sells
the goods to a third person before the goods are entered for customs clearance.
After the High sea sale of the goods, the Customs declarations i.e. Bill of Entry etc.
is filed by the person who buys the goods from the original importer during the
said sale. IGST on high sea sale(s) transactions of imported goods, whether one
or multiple, shall be levied and collected only at the time of importation i.e. when
the import declarations are filed before the Customs authorities for the customs
clearance purposes for the first time. Further, value addition accruing in each
such high sea sale shall form part of the value on which IGST is collected at the
time of clearance.
Q 72. How are import of goods and services by EOUs and SEZs treated in GST?
Ans. Goods imported by a unit or a developer in the Special Economic Zone for
authorised operations are exempted from the whole of integrated tax under sec-
tion 3(7) of the Customs Tariff Act, 1975 vide Notification No. 64/2017-Customs
dated 05.07.2017.
Services imported by a unit or a developer in the Special Economic Zone for au-
thorised operations, are exempted from the whole of the integrated tax leviable
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thereon under section 5 of the IGST Act, 2017 vide Notification No. 18/2017-Inte-
grated tax dated 30th June, 2017.
Import of goods by 100% EOU’s are governed by Notification No. 52/2003-Cus-

toms as amended by Notification no. 78/2017-Customs dated 13.10.2017. EOUs
are allowed duty free import of goods (exempt from Customs duties, IGST &
Compensation Cess) under the said notifications. However, exemption from IGST
is only available till 01.10.2019.
Q 73. What are import of services? How are they treated in GST?
Ans. Import of services has specifically been defined under IGST Act, 2017 and refers
to supply of any service where the supplier is located outside India, the recipient
is located in India and the place of supply of service is in India.
As per the provisions contained in Section 7(1)(b) of the CGST Act, 2017, import of
services for a consideration whether or not in the course or furtherance of business
shall be considered as a supply. Thus, in general, import of services without con-
sideration shall not be considered as supply. However, business test is not required
to be fulfilled for import of service to be considered as supply.
Furthermore, in view of the provisions contained in Schedule I of the CGST Act,
2017, the import of services by a taxable person from a related person or from a
distinct person as defined in Section 25 of the CGST Act, 2017, in the course or
furtherance of business shall be treated as supply even if it is made without any
consideration.
In view of the provisions contained in Section 14 of the IGST Act, 2017, import of
free services from Google and Facebook by individuals without any consideration
are not considered as supply. Import (Downloading) of a song for consideration
for personal use would be a service, even though the same are not in the course
or furtherance of business. Import of some services by an Indian branch from
their parent company, in the course or furtherance of business, even if without
consideration will be a supply.
Thus, import of services can be considered as supply based on whether there is
consideration or not and whether the service is supplied in the course or further-
ance of business. The same has been explained in the table below:
Nature of Service Consideration Business Test

Import of services Necessarily Required Not required
Import of services by a taxable person Not required Necessarily Re-
from a related person or from a distinct quired
person
Q 74. As per the Customs Act, 1962, royalty and license fees are includible in the
assessable value of goods. Whether GST is also payable on such royalty and license
fees which is already included in the value of goods and IGST is already paid at
the time of import?
Ans. No. As per the notification no. 06/2018-Integrated tax dated 25th January, 2018,
supply of services, imported into the territory of India covered by such temporary
transfer or permitting the use or enjoyment of any intellectual property right are
exempted from payment of integrated tax to the extent that royalties and license
fees have been included in the transaction value as specified under rule 10(1)(c) of
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2019 FAQs 449
the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007

on which the appropriate duties of Customs have been paid.
Q 75. What procedure will be followed by EOU to import goods without payment
of Customs duty in the GST regime?
Ans. To avail such import benefits, EOUs will have to follow the procedure under
the Customs (Import of Goods at Concessional Rate of Duty) Rules, 2017
Q 76. Is the registered person procuring goods or services from a supplier outside
India required to raise a self-invoice, debit note or credit note in respect of the
price or value of services and adjustments thereto?
Ans. As the import of goods are under the cover of a bill of entry, there is no need
to raise a self-invoice.
In case of import of services, a self-invoice on the date of receipt of such supplies
is required to be issued. [Section 31(3)(f) of CGST Act read with section 20 of the
IGST Act]
Q 77. An airline imports aircrafts into India on lease basis. Whether integrated
tax is to be charged on such supplies as such supplies are supply of services under
item 1(b) or 5(f) of Schedule II of the CGST Act?
Ans. In case integrated tax is paid on the lease charges under the IGST Act, the
goods imported are exempted from payment of integrated tax at the time of import
subject to the importer undertaking to pay integrated tax on lease charges and other
conditions as stipulated in notification no. 65/2017-Customs dated 8th July, 2018
Q 78. Whether import of rigs and ancillary goods imported under lease is charge-
able to IGST?
Ans. Import of rigs and ancillary goods imported under lease is exempted from
IGST, subject to payment of appropriate IGST on the supply/import of such lease
service and fulfilment of other specified conditions.
Q 79. Whether bona fide gifts imported through post or air are exempted?
Ans. Bona fide gifts up to CIF value limit of ` 5000 imported through post or air
are exempted from payment of basic customs duty and integrated tax.
Q 80. How are supplies by SEZs to DTA treated in GST?
Ans. Supplies by SEZs to DTA units are liable to GST. Supplies from SEZs to DTA
can be categorised as under:
Supply under Bill of Entry: The supplies made by SEZ on cover of a bill of entry
shall be reported by DTA unit in its GSTR-3B as imports.
Supply without Bill of Entry: Any supply made by SEZ to DTA, without the cover
of a bill of entry is required to be reported by SEZ unit in GSTR-1. The liability
for payment of IGST in respect of supply of services is created from this Table.
Q 81. Whether imports by UINs are taxable?
Ans. The exemption in respect of Import of goods by UN bodies was available
through Notification No. 03/57-Customs which has been suitably amended vide
Customs Notifications No. 39/2017-Customs dated 30th June, 2017. Thus, the import
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of goods by UN Bodies shall not be subjected to integrated tax.
Similarly, import of services by Foreign diplomatic mission or consular post in

India, or diplomatic agents or career consular officers posted therein; United Na-
tions or a specified international organisation are exempted vide Notification No.
09/2017- Integrated Tax (Rate) dated 30th June, 2017.
Q 82. Whether services provided by the Central Government, State Government,
Union territory by way of deputing officers after office hours or on holidays for
inspection or container stuffing or such other duties in relation to import export
cargo on payment of Merchant Overtime charges are taxable?
Ans. No. These services have specifically been exempted vide Notification No.
09/2017- Integrated Tax (Rate) dated 28th June, 2017.
22. place of supply of goods and seRvices
Q 1. What is the need for the place of supply of goods and services under GST?
Ans. The basic principle of GST is that it should effectively tax the consumption
of such supplies at the destination thereof or as the case may at the point of con-
sumption. So place of supply provision determines the place i.e. taxable jurisdiction
where the tax should reach. The place of supply determines whether a transaction
is intra-State or inter-State. In other words, the place of Supply of Goods or services
is required to determine whether a supply is subject to SGST plus CGST in a given
State or union territory or else would attract IGST if it is an inter-State supply.
Q 2. Why are place of supply provisions different in respect of goods and services?
Ans. Goods being tangible do not pose any significant problems for determination
of their place of consumption. Services being intangible pose problems w.r.t. de-
termination of place of supply mainly due to following factors:
(i) The manner of delivery of service could be altered easily. For example,
telecom service could change from mostly post-paid to mostly pre-paid;
billing address could be changed, billers address could be changed, repair
or maintenance of software could be changed from onsite to online; banking
services earlier required the customer to go to the bank, now the customer
could avail service from anywhere;
(ii) Service provider, service receiver and the service provided may not be
ascertainable or may easily be suppressed as nothing tangible moves and
there would hardly be a trail;
(iii) For supplying a service, a fixed location of service provider is not mandatory
and even the service recipient may receive service while on the move. The
location of billing could be changed overnight;
(iv) Sometime the same element may flow to more than one location, for ex-
ample, construction or other services in respect of a railway line, a national
highway or a bridge on a river which originate in one state and end in the
other state. Similarly, a copy right for distribution and exhibition of film could
be assigned for many states in single transaction or an advertisement or a
programme is broadcasted across the country at the same time. An airline
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may issue seasonal tickets, containing say 10 leafs which could be used for
2019 FAQs 451
travel between any two locations in the country. The card issued by Delhi
metro could be used by a person located in Noida, or Delhi or Faridabad,
without the Delhi metro being able to distinguish the location or journeys
at the time of receipt of payment;
(v) Services are continuously evolving and would thus continue to pose newer
challenges. For example, 15-20 years back no one could have thought of
DTH, online information, online banking, online booking of tickets, internet,
mobile telecommunication etc.
Q 3. What proxies or assumptions in a transaction can be used to determine the
place of supply?
Ans. The various element involved in a transaction in services can be used as pro-
xies to determine the place of supply. An assumption or proxy which gives more
appropriate result than others for determining the place of supply, could be used
for determining the place of supply. The same are discussed below:
(a) location of service provider;
(b) the location of service receiver;
(c) the place where the activity takes place/place of performance;
(d) the place where it is consumed; and
(e) the place/person to which actual benefit flows.
Q 4. What is the need to have separate rules for place of supply in respect of B2B
(supplies to registered persons) and B2C (supplies to unregistered persons) trans-
actions?
Ans. In respect of B2B transactions, the taxes paid are taken as credit by the re-
cipient so such transactions are just pass through. GST collected on B2B supplies
effectively create a liability for the government and an asset for the recipient of
such supplies in as much as the recipient is entitled to use the input tax credit for
payment of future taxes. For B2B transactions the location of recipient takes care
in almost all situations as further credit is to be taken by recipient. The recipient
usually further supplies to another customer. The supply is consumed only when
a B2B transaction is further converted into B2C transaction. In respect of B2C
transactions, the supply is finally consumed and the taxes paid actually come to
the government.
22.1 Place of Supply of Goods

Q 5. What would be the place of supply where movement of goods is involved?
Ans. The place of supply of goods shall be the location of the goods at the time at
which the movement of goods terminates for delivery to the recipient. (Section
10 of IGST Act)
Q 6. What would be the place of supply wherein the supplier hands over the goods
to recipient in his state and further movement is caused by the recipient?
Ans. The movement can be caused by supplier, recipient or any other person. Where
the supply involves movement of goods, the place of supply shall be the location
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where the movement of goods terminates for delivery to the recipient.
Illustration: A person from Gujarat comes to Mumbai and purchases goods. He

declared his Gujarat GSTIN, arranges transport himself and takes goods to Gujarat.
The place of supply would be Gujarat in this case.
Q 7. What is the place of supply wherein movement of goods is not involved?
Ans. Where supply does not involve movement of goods, the place of supply shall
be the location of goods at the time of delivery to the recipient.
Illustration: A in Mumbai has given his goods on lease basis to B in Delhi. After
some time, the lessee B decides to purchase the goods. The supply takes place by
way of change of title and no movement is required as the goods are already with
the buyer. The place of supply is Delhi, the location of goods at the time of delivery.
Q 8. What will be the place of supply if the goods are delivered by the supplier to
a person on the direction of a third person?
Ans. It would be deemed that the third person has received the goods and the place
of supply of such goods shall be the principal place of business of such person.
(Section 10 of IGST Act)
Such cases are termed as bill to ship to cases wherein the supplier sends the invoice
to the buyer and the goods to the recipient on the direction of the buyer. Even
though the goods are not received by the buyer, it is presumed that he has received
the goods and he is able to take the input tax credit. The buyer may further issue
his invoice to the actual recipient of goods. Thus, it is a tripartite arrangement
wherein there are usually three parties and two transactions.
B (Buyer; Delhi)
Bill to
A (Supplier;
Mumbai)
Ship To C (Recipient;
Gurgaon))
In the above case, goods go directly to C. The place of supply is location of B
Location of Supplier Location of third Party Delivery of goods Place of Supply

First Transaction between A and B with delivery to C
Mumbai (Maharashtra) Delhi Gurgaon (Hary- Delhi
ana)
Q 9. What will be the place of supply where the goods or services are supplied on
board a conveyance, such as a vessel, an aircraft, a train or a motor vehicle?
Ans. In respect of goods, the place of supply shall be the location at which such
goods are taken on board. (Section 10(1)(e) of IGST Act). For instance, if goods are
taken on board at Vadodara, Gujarat on Rajdhani Express from Mumbai to Delhi.
The place of supply shall be Vadodara, Gujarat.
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2019 FAQs 453
However, in respect of services, the place of supply shall be the location of the
first scheduled point of departure of that conveyance for the journey. (Sections
12 and 13 of IGST Act)
Q 10. What is the place of supply in case of assembly or installation of goods at site?
Ans. The place of supply of goods, where the goods are installed or assembled at the
site, will be the place of such installation or assembly. (Section 10(1)(d) of IGST Act)
Q 11. What is the place of supply of goods imported into India?
Ans. The place of supply of goods imported into India shall be the location of the
importer.
Illustration: An importer from Jaipur, Rajasthan imports goods from China through
Mumbai Air Cargo and declared the GSTIN of Rajasthan. The place of supply of
goods shall be Rajasthan. Thus, the state tax component of the integrated tax
would accrue to Rajasthan.
Q 12. What is the place of supply of goods exported from India?
Ans. The place of supply of goods exported from India shall be the location outside
India.
22.2 Place of Supply of Services (Location of supplier as well as recip-

ient are in India)
Q 13. What is the default presumption for place of supply in respect of B2B supply
of services?
Ans. The terms used in the IGST Act are registered taxpayers and unregistered
person. The presumption in case of supplies to registered person is the location of
such person until and unless otherwise specified.
Q 14. What is the default presumption for place of supply in respect of unregistered
recipients?
Ans. In respect of unregistered recipients, the usual place of supply is the location
of the recipient, where the address on records exists. However, in many cases,
the address of recipient is not available, in such cases, location of the supplier of
services is taken as proxy for place of supply.
Q 15. What is the place of supply in case of services in relation to immovable
property?
Ans. Any service provided directly in relation to an immovable property including
services provided by architects, interior decorators, surveyors, engineers and other
related experts or estate agents, any service provided by way of grant of rights to
use immovable property or for carrying out or coordination of construction shall
be the location at which the immovable property is situated. (Section 12(3) of the
IGST Act)
Q 16. What is the place of supply in respect of a service of interior decorator in
relation to a palace in Nepal by an interior designer from Mumbai to a person
from Delhi?
Ans. The place of supply shall be theE-JOURNAL
location of recipient viz Delhi. (Proviso clause
to section 12(3) of IGST Act)
Q 17. The place of supply in relation to immovable property is the location of im-
movable property. Suppose a road is constructed from Delhi to Mumbai covering
multiple states. What will be the place of supply?
Ans. Where the immovable property is located in more than one State, the supply of
service shall be treated as made in each of the States in proportion to the value for
services separately collected or determined, in terms of the contract or agreement
entered into in this regard or, in the absence of such contract or agreement, on
such other reasonable basis as may be prescribed in this behalf. (The Explanation
clause to section 12(3) of the IGST Act, for domestic supplies)
Q 18. What is the place of supply of services of accommodation services in
homestays in Goa?
Ans. The place of supply shall be Goa, the location of the homestay. (Section 12(3)
of the IGST Act).
Q 19. What would be the place of supply of services provided for organizing an
event, say, IPL cricket series which is held in multiple states?
Ans. In case of an event, if the recipient of service is registered, the place of supply
of services for organizing the event shall be the location of such person.
However, if the recipient is not registered, the place of supply shall be the place
where event is held. Since the event is being held in multiple states and a consol-
idated amount is charged for such services, the place of supply shall be taken as
being in each state in proportion to the value of services so provided in each state.
(The Explanation clause to section 12(7) of the IGST Act)
Q 20. What will be the place of supply of goods and services by way of transpor-
tation of goods, including mail or courier?
Ans. In case both location of supplier & location of recipient is in India: If the
recipient is registered, the location of such person shall be the place of supply.
However, if the recipient is not registered, the place of supply shall be the place
where the goods are handed over for their transportation. (Section 12(8) of the
IGST Act)
However, where the transportation of goods is to a place outside India, the place
of supply shall be the place of destination of such goods (This proviso to section
12(8) has been inserted vide the IGST (Amendment) Act, 2018, however, the no-
tification to bring it into effect is yet to be issued)
In case location of supplier or location of recipient is outside India: The place of
supply of services of transportation of goods, other than by way of mail or courier,
shall be the place of destination of such goods. For courier, the place of supply of
services shall be the location of the recipient of services. Wherever the location of
the recipient of services is not available in ordinary course of business, the Place
of supply shall be location the supplier of service.
Q 21. A film star from Mumbai gets his cosmetic surgery done in a Hospital in
Delhi. What should be the place of supply?
Ans. The place of supply shall be based on the principle of place of performance
and shall be in Delhi. (Section 12(4) E-JOURNAL
of IGST Act)
2019 FAQs 455
Other such similar services requiring physical presence of natural person (recipient)
like restaurant and catering services, personal grooming, fitness, beauty treatment,
health services including cosmetic and plastic surgery shall be the location where
the services are actually performed.
Q 22. What will be the place of supply in case of training services provided in Goa?
Ans. When provided to a registered person: The place of supply shall be the location
of such registered person. If M/s Mahindra & Mahindra Ltd., Mumbai conducts
training for its employees at Goa, the place of supply shall be Mumbai.
When provided to a person other than a registered person: The place of supply shall
be the location where the services are actually performed viz. Goa.
Q 23. What will be the place of supply of passenger transportation service, if a
person travels from Mumbai to Delhi and back to Mumbai?
Ans. If the person is registered, the place of supply shall be the location of recipient.
If the person is not registered, the place of supply for the forward journey from
Mumbai to Delhi shall be Mumbai, the place where he embarks.
However, for the return journey, the place of supply shall be Delhi as the return
journey has to be treated as separate journey. (The Explanation clause to section
12(9) of the IGST Act)
Q 24. Suppose a ticket/pass for anywhere travel in India is issued by M/s Air India
to a person. What will be the place of supply?
Ans. In the above case, the place of embarkation will not be available at the time
of issue of invoice as the right to passage is for future use. Accordingly, place of
supply cannot be the place of embarkation. In such cases, the default rule shall
apply. (The proviso clause to section 12(9) of the IGST Act)
Q 25. What will be the place of supply for mobile connection? Can it be the loca-
tion of supplier?
Ans. For domestic supplies: The location of supplier of mobile services cannot be
the place of supply as the mobile companies are providing services in multiple
states and many of these services are inter-State. The consumption principle will
be broken if the location of supplier is taken as place of supply and all the revenue
may go to a few states where the suppliers are located.
The place of supply for mobile connection would depend on whether the connec-
tion is on post-paid or pre-paid basis. In case of post-paid connections, the place of
supply shall be the location of billing address of the recipient of service.
In case of pre-paid connections, the place of supply shall be the place where pay-
ment for such connection is received or such pre-paid vouchers are sold. However,
if the recharge is done through internet/e-payment, the location of recipient of
service on record shall be the taken as the place of service.
For international supplies: The place of supply of telecom services is the location
of the recipient of service.
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Q 26. A person in Goa buys shares from a broker in Delhi on NSE (in Mumbai).
What will be the place of supply?
Ans. The place of supply shall be the location of the recipient of services on the
records of the supplier of services. So Goa shall be the place of supply.
Q 27. A person from Mumbai goes to Kullu-Manali and takes some services from
ICICI Bank in Manali. What will be the place of supply?
Ans. If the service is not linked to the account of person, place of supply shall be
Kullu i.e. the location of the supplier of services. However, if the service is linked
to the account of the person, the place of supply shall be Mumbai, the location of
recipient on the records of the supplier.
Q 28. A person from Gurgaon travels by Air India flight from Mumbai to Delhi
and gets his travel insurance done separately in Mumbai. What will be the place
of supply of insurance service?
Ans. The location of the recipient of services on the records of the supplier of
insurance services shall be the place of supply. So Gurgaon shall be the place of
supply. (Proviso clause to section 12(13) of the IGST Act)
Q 29. A person from Gurgaon travels by Air India flight from Mumbai to Delhi
and gets his travel insurance done in Mumbai. What will be the place of supply?
Ans. The location of the recipient of services on the records of the supplier of
insurance services shall be the place of supply. So Gurgaon shall be the place of
supply. (Proviso clause to section 12(13) of the IGST Act)
22.3 Place of Supply of Services (Location of supplier or recipient is

outside India)
Q 30. What is the place of supply in respect of goods that are required to be made
physically available for providing the service?
Ans. The place of supply of service in respect of goods that are required to be made
physically available by the recipient of service to the supplier of service shall be
the location where the services are actually performed. (Section 13 (3) (a) of the
IGST Act, 2017)
Q 31. What is the place of supply of services provided from a remote location using
electronic means on goods?
Ans. The place of supply shall be the location where the goods are actually located
at the time of supply of services. (Proviso to Section 13(3) (a) of the IGST Act, 2017)
Illustration: A Laptop at Mumbai is repaired remotely by a software engineer from
Bangalore using Team Viewer software. The place of supply shall be Mumbai, the
place where the goods are located.
Q 32. Whether supplies by a banking company, or a financial institution, or a
non-banking financial company, in Mumbai to its account holders in Dubai can
be considered as export of service?
Ans. No. The place of supply of such services is location of supplier and therefore
these cannot be considered as export of services. In the present case, the supplier
E-JOURNAL
2019 FAQs 457
being located in Mumbai and place of supply also in Mumbai, these services will
be taxed and CGST plus SGST would be levied. [Section 13(8)(a) of IGST Act]
Q 33. Who is an intermediary?
Ans. “intermediary” means a broker, an agent or any other person, by whatever
name called, who arranges or facilitates the supply of goods or services or both,
or securities, between two or more persons, but does not include a person who
supplies such goods or services or both or securities on his own account.
Q 34. What is the place of supply of an intermediary?
Ans. The place of supply for intermediary services will be the location of supplier
of service. It is to be noted that this rule will apply only when either the supplier
or recipient is located outside India.
Q 35. What would be the place of supply in respect of services pertaining to goods
transportation, wherein either the supplier or recipient is located outside India?
Ans. The place of supply of services of transportation of goods, other than by way
of mail or courier, shall be the place of destination of such goods. (Section 13(9)
of IGST Act)
For goods transportation via mail or courier, the default provision of section 13(2)
will apply i.e. place of supply will be the location of the recipient of service.
Q 36. What would be the place of supply in respect of Online Information and
Database Access or Retrieval (OIDAR) Services?
Ans. For OIDAR services the place of supply will be the location of recipient of
services. In case the recipient of OIDAR services is registered, he will pay Integrated
tax on reverse charge basis. However, if the recipient is unregistered, the supplier
will be liable to pay the tax. For the purpose of determining place of supply, the
location of recipient of service shall be deemed to be in the taxable territory if any
two of the following seven non-contradictory conditions are satisfied, namely: -
(a) the location of address presented by the recipient of services through internet
is in the taxable territory;
(b) the credit card or debit card or store value card or charge card or smart
card or any other card by which the recipient of services settles payment
has been issued in the taxable territory;
(c) the billing address of the recipient of services is in the taxable territory;
(d) the internet protocol address of the device used by the recipient of services
is in the taxable territory;
(e) the bank of the recipient of services in which the account used for payment
is maintained is in the taxable territory;
(f) the country code of the subscriber identity module card used by the recipient
of services is of taxable territory;
(g) the location of the fixed land line through which the service is received by
the recipient is in the taxable territory.
E-JOURNAL
Q 37. Whether the launch service provided by ANTRIX Corporation qualifies to

be considered as export of services?
Ans. In terms of section 13(9) of IGST Act, 2017, the place of supply of satellite launch
service by ANTRIX Corporation to international customers would be outside India
and wherever such supply qualifies all conditions specified under section 2(6) of
the IGST Act, 2017, would constitute as export of service and shall be zero rated.
Where satellite service was provided to a person in India, the place of supply of
satellite launch service would be location of the recipient of services, provided
the recipient is registered. In case where the recipient is not registered then place
of supply is the place where such goods are handed over for their transportation.
(CBIC Circular No. 02/1/2017- IGST dated 27th September, 2017)
Q 38. What is the place of supply in case of supply of services relating to R&D,
technical testing etc. to a person located outside India who sends the goods tempo-
rarily into India as the same are required by the supplier to provide the services?
Ans. In such cases, the general principle as per section 13(3)(a) is that the place of
supply shall be the location where the services are actually performed. However,
following proviso has been inserted to section 13(3)(a) vide the IGST (Amendment)
Act, 2018. This amendment is yet to be brought into force.
However, in the case of services supplied in respect of goods which are temporar-
ily imported into India for repairs or for any other treatment or process and are
exported after such repairs or treatment or process without being put to any use
in India, other than that which is required for such repairs or treatment or process,
the default rule would be applicable i.e. the place of supply shall be the location
of recipient of services.
Thus, in such cases, the place of supply shall be the location of recipient of services
(Default provision in section 13(2)) i.e. outside India.
Q 39. How will the place of supply be determined wherein the goods are supplied
from the premises of job worker?
Ans. The principal may supply, from the place of business/premises of a job worker
on payment of tax within India. The place of supply would have to be determined
in the hands of the principal irrespective of the location of the job worker’s place
of business/premises.
Illustration: The principal is located in State A, the job worker in State B and the
recipient in State C. In case the supply is made from the job worker’s place of
business/premises, the invoice will be issued by the supplier (principal) located in
State A to the recipient located in State C. The said transaction will be an inter-State
supply. In case the recipient is also located in State A, it will be an intra-State supply.
(CBIC Circular No. 38/2018 dated 26th March, 2018)
E-JOURNAL
2019 FAQs 459
23. gstn and fRontend Business pRocess on gst poRtal
Q 1. What is GSTN?
Ans. Goods and Services Tax Network (GSTN) is a not-for-profit, non-government
company under section 8 of the Companies Act, 2013, promoted jointly by the Cen-
tral and State Governments, to provide shared IT infrastructure and services, to
both Central and State Governments including taxpayers and other stakeholders.
The Front end services of Registration, Returns, Payments, etc. to all taxpayers
will be provided by GSTN. It will be the interface between the government and
the taxpayers. Further, GSTN also provides the Back-End Services to tax officers
of the Model 2 states.
Considering the nature of function performed by GSTN, GST Council has taken
a decision that GSTN be converted into a fully owned government Company. For
this, the entire 51% equity holding held by the Non-Governmental Institutions in
GSTN shall be acquired equally by the Centre and the States Governments.
The existing financial commitments given by Centre and States to GSTN to share
the capital and O&M cost of the IT Systems shall continue.
Q 2. What was need to create GSTN?
Ans. The GST System Project is a unique and complex IT initiative. Before GST,
since, the Centre and State indirect tax administrations worked under different
laws, regulations, procedures and formats, there IT infrastructure and systems were
also independent of each other. Integrating them for GST implementation would
have been complex since it would have required integrating the entire indirect
tax ecosystem so as to bring all the tax administrations (Centre, State and Union
Territories) to the same level of IT maturity with uniform formats and interfaces
for taxpayers and other external stakeholders. Besides, GST being a destination
based tax, the inter-State trade of goods and services (IGST) would have needed
a robust settlement mechanism amongst the States and the Centre. Meeting these
objectives were only possible only when there is a strong IT Infrastructure and
Service back bone which would have enabled capturing, processing and exchange
of information amongst the stakeholders (including taxpayers, States and Central
Government, Bank and RBI). To achieve these objectives of establishing a uniform
interface for the taxpayer and a common and shared IT infrastructure between
the Centre and States, the SPV namely GSTN was created.
Q 3. What is the genesis of GSTN?
Ans. The requirement of a strong IT Infrastructure was discussed in the 4th meeting
of 2010 of the Empowered Committee of State Finance Ministers (referred to as
the EC) held on 21/7/2010. In the said meeting, the EC approved the creation of
an ‘Empowered Group on IT Infrastructure for GST’ (referred to as the EG) under
the chairmanship of Dr. Nandan Nilekani with Additional Secretary (Rev), Member
(B&C) CBIC, DG (Systems), CBIC, FA Ministry of Finance, Member Secretary EC
and five state commissioners of Trade Taxes (Maharashtra, Assam, Karnataka,
West Bengal and Gujarat) as its Members. The Group was mandated to suggest,
inter alia, the modalities for setting up a National Information Utility (NIU/SPV)
for implementing the Common Portal E-JOURNAL
to be called GST Network (GSTN) and
recommend the structure and terms of reference for the NIU/SPV, detailed im-
plementation strategy and the road map for its creation in addition to other items
like training, outreach etc.
In March 2010, TAGUP constituted by the Ministry of Finance had recommended
that National Information Utilities should be set up as private companies with a
public purpose for implementation of large and complex Government IT projects
including GST. Mandate of TAGUP was to examine the technological and systemic
issues relating to the various IT projects such as GST, TIN, NPS, etc.
The EG had seven meetings between 2nd August, 2010 and 8th August, 2011 to discuss
the modalities. After due deliberations, the EG recommended creation of a Special
Purpose Vehicle for implementing the GST System Project. To enable efficient and
reliable provision of services in a demanding environment, the EG recommended
a non-Government structure for the SPV called GSTN with Government equity of
49% (Centre - 24.5% and States - 24.5%) after considering key parameters such as
independence of management, strategic control of Government(s), flexibility in its
organizational structure, agility in decision making and ability to hire and retain
competent human resources from both, government and private sector.
In view of the sensitivity of the role of GSTN and the information that would be
available with it, the EG also considered the issue of strategic control of Government
over GSTN. The Group recommended that strategic control of the Government over
the SPV should be ensured through measures such as composition of the Board
of Directors (also referred to as the Board), mechanisms of Special Resolution and
Shareholders Agreement, induction of Government officers on deputation, and
agreements between GSTN SPV and the Government(s). Also, the said shareholding
pattern ensured that the Centre individually and States collectively are the largest
stakeholders at 24.5% each. In combination, the Government shareholding at 49%
would far exceed that of any single private institution.
EG also brought out the need to have technology specification to run this com-
pany so that there is 100 per cent matching of returns. The business knowledge
resides with the officials of Government of India and the States/Union Territories.
However, the professionals with knowledge pertaining to technology will also be
required as equally important stakeholders to run this company independently, on
the lines of NSDL which is working professionally, as well as independently. EG also
recommended a non-government company as that will have operational freedom.
These recommendations were presented before the Empowered Committee of
State Finance Ministers in its 3rd meeting of 2011 held on 19th August, 2011 and
in the 4th meeting of 2011 of the EC held on 14th Oct, 2011. The proposal of the
EG on IT infrastructure for GST regarding GSTN and formation of a not-for-profit
section 25 company with the strategic control of the Government were approved
by the Empowered Committee of State Finance Ministers (EC) in its meeting held
on 14.10.11.
The note of Department of Revenue for setting up a Special Purpose Vehicle to
be called Goods and Services Tax Network (GSTN-SPV) on the lines mentioned
above was considered by the Union Cabinet on 12th April, 2012 and approved. The
Union cabinet also approved the following:
E-JOURNAL
2019 FAQs 461
i. Suitable and willing non-government institutions will be identified and

firmed up by the Ministry of Finance to invest in GSTN-SPV prior to its
incorporation.
ii. The strategic control of the Government over the SPV would be ensured
through measures such as composition of the Board, mechanisms of Special
Resolution and Shareholders Agreement, induction of Government officers
on deputation, and agreements between GSTN SPV and Governments.
iii. The Board of Directors of GSTN SPV would comprise 14 Directors with
3 Directors from the Centre, 3 from the States, a Chairman of the Board
of Directors appointed through a joint approval mechanism of Centre and
States, 3 Directors from private equity stakeholders, 3 independent Directors
who would be persons of eminence and a CEO of the GSTN SPV selected
through an open selection process.
iv. Relaxation in relevant rules to enable deputation of Government officers to
the GSTN SPV for exercise of strategic control and for bringing in necessary
domain expertise.
v. GSTN SPV would have a self-sustaining revenue model, where it would be
able to levy user charges on the taxpayers and the tax authorities availing
services.
vi. GSTN SPV to be the exclusive national agency responsible for delivering
integrated indirect Tax related services involving multiple tax authorities.
Accordingly, any other service provider seeking to deliver similar integrated
services would be required to enter into a formal arrangement with GSTN
SPV for the services.
vii. A one- time non-recurring Grant- in aid of ` 315 crores from the Central
Government towards functioning of the SPV for a three-year period after
incorporation.
Considering the nature of function performed by GSTN, GST Council has taken
a decision that GSTN be converted into a fully owned government Company. For
this, the entire 51% equity holding held by the Non-Governmental Institutions in
GSTN shall be acquired equally by the Centre and the States governments.
Q 4. What is the equity structure and Revenue Model of GSTN?
Ans. (a) Equity Structure: - In compliance of the Cabinet decision, GST Network
was registered as a not-for-profit, non-Government, private limited company under
section 8 of the Companies Act, 1956 with the following equity structure:
Central Govt 2
State Govts 2
HDFC 1
HDFC Bank 1
ICICI Bank 1
NSE Strategic Investment Co. 1
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LIC Housing Finance Ltd. 1
The GSTN in its current form was created after taking approval of the Empowered
Committee of State Finance Ministers and Union Government after due delibera-
tions over a long period of time.
(b) Revenue Model: An amount of 315 Cr. was approved by the Govt. of India as
Grants-in-Aid for initial setting up of the GSTN-SPV in 2013. During the period
31-03-2013 to 31-03-2016, an amount of ` 143.96 Crores was released as Grant-In-
Aid to GSTN out of ` 315 Crores approved by Govt. of India. Out of the grant-in-aid
received, only ` 62.11 Cr was spent during this period in setting of the Company
and making it functional. The balance grant was returned to Govt. of India. During
FY 2016-17, GSTN has got loan sanctioned from a commercial bank to meet ex-
penditure over setting up the IT Platform to provide services to the Center and
States through GST portal and developing the backend for 27 States and Union
Territories. The Revenue model for GSTN has been approved by the Empowered
Committee of State Finance Ministers under which user charges will be paid by the
Centre and States/UTs equally on behalf of taxpayers and other stakeholders for
availing services from the GST Portal. The user charges will be shared equally by
the Centre and the States. The user charges for States will be apportioned amongst
them based on number of registered taxpayers.
Q 5. What services are being rendered by GSTN?
Ans. GSTN renders the following services through the Common GST Portal:
(a) Registration (including existing taxpayer migration);
(b) Payment management including payment Gateways and integration with
banking systems;
(c) Return filing and processing;
(d) Taxpayer management, including account management, notifications, in-
formation, and status tracking;
(e) Tax authority account and ledger Management;
(f) Computation of settlement (including IGST Settlement) between the
Centre and States; Clearing house for IGST;
(g) Processing and reconciliation of GST on import and integration with EDI
systems of Customs;
(h) MIS including need based information and business intelligence;
(i) Maintenance of interfaces between the Common GST Portal and tax ad-
ministration systems;
(j) Provide training to stakeholders;
(k) Provide Analytics and Business Intelligence to tax authorities;
(l) Carry out research and study best practices; and
(m) E-way bill generation by the stake holders.
Q 6. What is the interface system between GSTN and the States/CBIC?
Ans. It was decided that in the GST regime, while taxpayer facing core services of
applying for registration, uploadingE-JOURNAL
of invoices, filing of return, making tax pay-
ments shall be hosted by GST System, all the statutory functions (such as approval
2019 FAQs 463
of registration, assessment of return, conducting investigation and audit etc.) shall

be conducted by the tax authorities of States and Central governments.
Thus, it was decided that the Front-End (GST Portal services) shall be provided by
GSTN and the Back-End modules shall be developed by States and Central Gov-
ernment themselves. However, 27 States (termed as Model-2 States) asked GSTN
to develop their Back-End interface also. The CBIC and 9 states (Model 1) decided
to develop and host the Back-End modules themselves. For Model 1 states/CBIC
full data (registration, return, payment etc.) submitted by taxpayers is being shared
with them for information and analysis as deemed fit by them.
Q 7. What is the role of GSTN in registration?
Ans. The application for Registration is made Online on GST Portal. Some of the
key data like PAN, Business Constitution, Aadhaar, CIN/DIN etc. (as applicable)
is validated by the GST Portal online with the respective agency i.e. CBDT, UID,
MCA etc., thereby ensuring minimum need for submission of documentation. The
application data along with supporting scanned documents is being sent by GSTN
to states/Centre, which in turn processed that application and sends the query, if
any, or approval or rejection intimation and digitally signed registration to GSTN
for eventual download by the taxpayer.
Q 8. What is the role of Infosys in GSTN?
Ans. GSTN has engaged M/s Infosys as a single Managed Service Provider (MSP) for
the design, development and deployment of GST system, including all application
software, tools and Infrastructure and for operating & maintaining the system for
a period of 5 years from the Go-Live date.
Q 9. What are the basic features of GST common portal?
Ans. The GST portal (www.gst.gov.in ) is accessible over Internet (by Taxpayers
and their CAs/Tax Advocates etc.) and Intranet by Tax Officials etc. The portal is
going to be one single common portal for all GST related services e.g.-
i. Taxpayer registration (New, surrender, cancellation, amendment etc.);
ii. Invoice upload, auto-drafting of Purchase register of buyer, GST Returns
filing on stipulated dates for each type of return (GSTR 1, 2, 3, 5, 9.etc);
iii. Tax payment by creation of Challan and integration with agency Banks;
iv. ITC and Cash Ledger and Liability Register;
v. MIS reporting for taxpayers, tax officials and other stakeholders;
vi. BI/Analytics for Tax officials.
Q 10. What is the concept of GST Eco-system?
Ans. A common GST system will provide linkage to all State/UT Commercial Tax
departments, Central Tax authorities, Taxpayers, Banks and other stakeholders. The
eco-system consists of all stakeholders starting from taxpayer to tax professional
to tax officials to GST portal to Banks to accounting authorities. The diagram given
below depicts the whole GST eco-system.
E-JOURNAL
Q 11. What is GSP (GST Suvidha Provider)?

Ans. GST System will provide a GST portal for taxpayers to access the GST System
and do all the GST compliance activities. But there will be wide variety of taxpayers
(SME, Large Enterprise, Micro Enterprise etc.) which may require different kind of
facilities like converting their purchase/sales register data in GST compliant for-
mat, Integration of their Accounting Packages/ERP with GST System etc., various
kind of dashboards to view Matched/Mismatched ITC claims, Tax liability, Filing
status etc. As invoice level filing is required, so large organizations may require an
automated way to interact with GST system as it may be practically impossible for
them to upload large number of invoices through a web portal. So an eco-system
is required, which can help such taxpayers in GST compliance.
As Tax payer convenience will be the key to success of GST regime, this eco-system
also provides taxpayer options of using third party applications, which can provide
different kind of interfaces on desktop/mobile for them to be GST compliant.
All above reasons require an eco-system of third party service providers, who have
access to GST System and capability to develop such applications. These service
providers have been given a generic name, GST Suvidha Providers or GSP.
Q 12. What is the role of GST Suvidha Providers (GSP)?
Ans. GSP develops applications having features like return filing, reconciliation
of purchase register data with auto populated data for acceptance/rejection/
Modification, dashboards for taxpayers for quick monitoring of GST compliance
activities. They may also provide role based access to divide various GST related
activities like uploading invoice, filing returns etc., among different set of users
E-JOURNAL
inside a company (medium or large companies will need it), Applications for Tax
2019 FAQs 465
Professional to manage their client’s GST compliance activities, Integration of

existing accounting packages/ERP with GST System, etc.
Q 13. What are the benefits to taxpayers in using the GSPs?
Ans. At the outset it is clarified that all required functions under GST can be per-
formed by a taxpayer at the GST portal. GSP is an additional channel being made
available for facilitating the taxpayers for performing some of the functions and
use of their services is optional. Some of the specific solution(s) which could be
offered by the GSPs to meet specific requirements of Taxpayers for GST compli-
ance are given below:
1. Conversion of their current invoice format generated by their existing ac-
counting software, which could be in csv, pdf, excel, word format, into GST
compliant format.
2. Reconciliation of auto populated data from GST portal with their purchase
register data, where purchase register data can be on excel, csv or in any
proprietary database and uploaded data from GST format could be in json/
csv.
3. Organization having various branches will need a way to upload branch
wise invoices, as GST System will only provide one user-id/password for
GST system access. An application having role based access and different
view for different branches will be needed.
4. A company registered in multiple States may require unified view of all
branches in one screen.
5. GST professionals will need some specific applications to manage and
undertake GST compliance activities for their client Taxpayers from one
dashboard, etc.
Above are just a few illustrations. There will be many more requirements of dif-
ferent sets of Tax payers. These requirements of taxpayers can be met by GSPs.
Q 14. What are the functions which a taxpayer performs at the GST Common
Portal being developed and maintained by GSTN for the taxpayers?
Ans. GST Common Portal is envisaged as one-stop-shop for all requirements un-
der GST for the taxpayers. Illustrative list of functions that can be performed by
taxpayers through GST Portal managed by GSTN are:
u Application for registration as well as amendment in registration, cancellation
of registration and profile management;
u Payment of taxes, including penalties, fines, interest, etc. (in terms of cre-
ation of Challan as payment will take place at bank’s portal or inside a bank
premises);
u Change of status of a taxpayer from normal to Compounding and vice-versa;
u Uploading of Invoice data & filing of various statutory returns/Annual
statements;
u Track status of return/tax ledger/cash ledger etc. using unique Application
Reference Number (ARN) generated on GST Portal;
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u File application for refund, appeal, advance ruling etc.;
u Status review of return/tax ledger/cash ledger;

u Generation of E-way bill.
Q 15. What is the role of tax officers from State and Central Govt in respect of the
GST system being developed by GSTN?
Ans. The officers use information/application submitted by taxpayer on GST Portal
for following statutory functions:
u Approval/rejection for enrolment/registration of taxpayers;
u Tax administration (Assessment/Audit/Refund/Appeal/Investigation etc.);
u Business Analytics, MIS and other statutory functions.
Q 16. Can invoice data be uploaded on day to day basis?
Ans. Yes, GST Portal will have functionality for taxpayers to upload invoice data
on any time basis. Early upload of invoices by supplier taxpayer will help receiver
taxpayer in early reconciliation of data in Invoices as well as help supplier taxpayer
in avoiding last minute rush of uploading returns on the last day.
Q 17. Does GSTN provide tools for uploading invoice data on GST portal?
Ans. Yes, GSTN has provided spreadsheet like tools (such as Microsoft Excel), Of-
fline Utilities, free of cost, to taxpayers to enable them to compile invoice data in
the same and generate files which can then be uploaded on GST portal. This are
offline tools which can be used to input/capture invoice data without being online
and then generate final files in compatible format for uploading to GST portal.
These can be accessed at Download section of GST Portal.
Q 18. Does GSTN be provide mobile based Apps to view ledgers and other accounts?
Ans. The GST portal is being designed in such a way that it can be seen on any
smart phone. Thus ledgers like cash ledger, liability ledger, ITC ledger etc. can be
seen on a mobile phone using compatible browsers.
Q 19. Does GSTN provide separate user ID and password for GST Practitioner to
enable them to work on behalf of their customers (Taxpayers) without requiring
user ID and password of taxpayers, as happens today?
Ans. Yes, GSTN has provided a separate user ID and Password to GST Practitioner
to enable them to work on behalf of their clients without asking for their user
ID and passwords. They will be able to do all the work on behalf of taxpayers as
allowed under GST Law.
Q 20. Could the tax payer change the GST Practitioner once chosen in above
mentioned facility?
Ans. Yes, a taxpayer may choose a different GST Practitioner by simply unselecting
the previous one and then choosing a new GST Practitioner on the GST portal.
Q 21. What material has been provided by GSTN, on various aspects of working
on GST portal, for the benefit of taxpayers?
Ans. GSTN has prepared Computer Based Training materials (CBT’s), which have
videos embedded into them, for each process to be performed on the GST portal.
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These have been put on the GST portal as well as on the website of all tax author-
ities. Apart from CBT’s, Various User Manuals, FAQ’s etc., have also be placed on
2019 FAQs 467
GST Portal for education of the taxpayers. Apart from it, an interactive Self Help
Grievance Redressal Portal has been set up for the taxpayers for logging of their
tickets (https://selfservice.gstsystem.in/) or phone (0124-4688999). CBT, FAQ and
User Manuals for enrolment process are readily available at https://www.gst.gov.
in/help.
GSTN conducts webinars on various topics related to GST Portal and same can
be seen in GSTN you tube channel (https://www.youtube.com/c/GoodsandSer-
vicesTaxNetwork ).
Apart from sending bulk mails to the taxpayers regarding new functionalities and
advisories, GSTN connects with the taxpayers and other stakeholders through its
social media channel i.e. facebook
https://www.facebook.com/gstsystemsindia/ and twitter handle (@askGSTech)
https://www.facebook.com/gstsystemsindia/and through regular updates on new
functionalities/advisories and troubleshooting tips.
Q 22. Does the return and registration data furnished by the taxpayers on the GST
Common Portal remain Confidential? How does GSTN ensure the same?
Ans. Yes, all steps are being taken by GSTN to ensure the confidentiality of person-
al and business information furnished by the taxpayers on GST Common Portal.
This is being done by ensuring Role Based Access Control (RBAC) and encryption
of critical data of taxpayers both during transit and in storage. The access to the
taxpayer data is given only to the jurisdictional officers, and strictly on a need to
know basis, with ensuring due checks and balances.
Q 23. What are the security measures being taken by GSTN to ensure security of
the GST system?
Ans. GST Systems project has incorporated state of art security framework for
data and service security. Besides high end firewalls, intrusion detection, data en-
cryption at rest as well as in motion, complete audit trail, tamper proofing using
consistent hashing algorithms, OS and host hardening etc. has been done. GSTN
has also established a primary and secondary Security Operations Command &
Control center, which proactively monitors and protect malicious attack on a re-
al-time basis. GSTN is also ensuring secure coding practices through continuous
scanning of source code & libraries being used in GST system to protect against
commonly known and unknown threats.
24. tRansitional pRovisions
Q 1. Will CENVAT credit (or VAT credit) carried forward in the last return prior
to GST under existing law be available as ITC under GST?
Ans. A registered person, other than a person opting to pay tax under composition
scheme, shall be entitled to take credit in his electronic credit ledger the amount
of CENVAT (or VAT credit) credit carried forward in the return of the last period
before the appointed day, subject to the conditions stated therein. (Section 140(1)
of the CGST/SGST Act)
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Q 2. What are those conditions?

Ans. The conditions are that: -
(i) the said amount of credit is admissible as input tax credit under this Act;
(ii) the registered person has furnished all the returns required under the existing
law (i.e. Central Excise and VAT) for the period of six months immediately
preceding the appointed date;
(iii) the said amount of credit does not relate to goods manufactured and cleared
under such notifications as are notified by the Central Government.
Under SGST law there will be one more condition as given below: -
So much of the said credit as is attributable to any claim related to section 3,
sub-section (3) of section 5, section 6, section 6A or sub-section (8) of section 8 of
the Central Sales Tax Act, 1956 that is not substantiated in the manner, and within
the period, prescribed in rule 12 of the Central Sales Tax (Registration and Turn-
over) Rules, 1957 shall not be eligible to be credited to the electronic credit ledger:
However, an amount equivalent to the credit specified above shall be refunded
under the existing law when the said claims are substantiated in the manner pre-
scribed in rule 12 of the Central Sales Tax (Registration and Turnover) Rules, 1957.
Q 3. A registered person, say, purchases capital goods under the existing law (Cen-
tral Excise) in the June quarter of 2017-18. Though the invoice has been received
within 30th June but the capital goods are received on 5th July, 2017 (i.e. in GST
regime). Will such a person get full credit of CENVAT in GST regime?
Ans. Yes, he will be entitled to credit in 2017-18 provided such a credit was admis-
sible as CENVAT credit in the existing law and is also admissible as credit in CGST
-Section 140(2) of the CGST Act.
Q 4. VAT credit was not available on items ‘X’ & ‘Y’ as capital goods in the existing
law (Central Excise). Since they are covered in GST, can the registered taxable
person claim it now?
Ans. He will be entitled to credit only when ITC on such goods are admissible under
the existing law and is also admissible in GST. Since credit is not available under
the existing law on such goods, the said person cannot claim it in GST - Proviso to
section 140(2) of the SGST Act.
Q 5. Assuming the registered person has wrongly enjoyed the credit (Refer to
Q4) under the existing law, will the recovery be done under the GST Law or the
existing law?
Ans. The recovery relating to ITC wrongfully enjoyed, unless recovered under the
existing law, will be recovered as arrears of tax under GST.
Q 6. Give two examples of registered taxable persons who are not liable to be
registered under the existing law (Central Excise/VAT) but are required to be
registered under GST?
Ans. A manufacturer having a turnover of say ` 60 lakh who is enjoying SSI ex-
emption under the existing law will have to be registered under GST as the said
turnover exceeds the basic threshold of ` 20 lakh - Section 22.
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2019 FAQs 469
A trader having turnover below the threshold under VAT but, making sales through
e-commerce operator will be required to be registered in GST. There will be no
threshold for such person(s) - Section 24.
Q 7. Will ITC be allowed to a service provider on VAT paid inputs held as stock
on the appointed day?
Ans. Yes, he will be entitled to input tax credit on inputs held in stock in accordance
with the provisions of section 140(3).
Q 8. A registered person has excess ITC of ` 10,000 in his last VAT return for the
period immediately preceding the appointed day. Under GST he opts for compo-
sition scheme. Can he carry forward the aforesaid excess ITC to GST?
Ans. The registered person will not be able to carry forward the excess ITC of VAT
to GST if he opts for composition scheme - Section 140(1).
Q 9. Sales return under CST (i.e. Central Sales Tax Act) is allowable as deduction
from the turnover within six months? If, say, goods are returned in GST regime
by a buyer within six months from appointed day, will it become taxable in GST?
Ans. Where tax has been paid under the existing law [CST, in this case] on any
goods at the time of sale, not being earlier than six months prior to the appointed
day, and such goods are returned by the buyer after the appointed day, the sales
return will be considered as a supply of the said buyer in GST and tax has to be
paid on such supply, if, -
(i) the goods are taxable under the GST Law; and
(ii) the buyer is registered under the GST Law.
However, the seller is entitled to refund of such tax [CST, in this case] paid under
the existing law if the aforesaid buyer is an unregistered person under GST and
the goods are returned within 06(six) months (or within the extended period of
maximum two months) from the appointed day and the goods are identifiable -
Section 142(1).
Q 10. Shall a manufacturer or a job worker become liable to pay tax if the inputs
or semi-finished goods sent for job work under the existing law are returned after
completion of job work after the appointed day?
Ans. No tax will be payable by the manufacturer or the job worker under the
following circumstances: -
(i) Inputs/semi-finished goods are sent to the job worker in accordance with
the provisions of the existing law before the appointed day.
(ii) The job worker returns the same within six months from the appointed day
(or within the extended period of maximum two months).
(iii) Both the manufacturer and the job worker declare the details of inputs held
in stock by the job worker on the appointed day in the prescribed form.
The relevant sections are 141(1), 141(2) & 141(4).
However, if the said inputs/semi-finished goods are not returned within six months
(or within the extended period of maximum two months), the input tax credit
availed is liable to be recovered. E-JOURNAL
Q 11. What happens if the job worker does not return the goods within the
specified time?
Ans. Input tax credit availed by manufacturer will be payable by said manufac-
turer on the said goods if they are not returned to the place of business of the
manufacturer within six months (or within the extended period of maximum two
months) from the appointed day.
Q 12. Can a manufacturer transfer have finished goods sent for testing purpose to
the premises of any other taxable person?
Ans. Yes, a manufacturer can transfer finished goods sent for testing purpose to
the premise of any other registered person on payment of tax in India or without
payment of tax for exports within six months (or within the extended period of
maximum two months) - Section 141(3).
Q 13. If finished goods removed from a factory for carrying out certain processes
under existing law are returned on or after the appointed day, whether GST would
be payable?
Ans. No tax under GST will be payable if finished goods removed from factory
prior to the appointed day to any other premise for carrying out certain processes
are returned to the said factory after undergoing tests or any other process within
six months (or within the extended period of maximum two months) from the
appointed day - Section 141(3).
Q 14. When tax shall become payable in GST on manufactured goods sent to a Job
worker for carrying out tests or any other process not amounting to manufacture
under the existing law?
Ans. Where manufactured goods are sent to a job worker prior to the appointed
day for carrying out tests or any process not amounting to manufacture under
the existing law and if such goods are not returned to the manufacturer within
six months (or within the extended period of maximum two months) from the
appointed day, the input tax credit availed by the manufacturer will liable to be
recovered if the aforesaid goods are not returned within six months from the
appointed day - Section 141(3).
Q 15. Is extension of two months as discussed in section 141 automatic?
Ans. No, it is not automatic. It may be extended by the Commissioner on sufficient
cause being shown.
Q 16. What is the time limit for issue of debit/credit note(s) for revision of prices?
Ans. The taxable person may issue the debit/credit note(s) or a supplementary
invoice within 30 days of the price revision.
In case where the price is revised downwards the taxable person will be allowed to
reduce his tax liability only if the recipient of the invoice or credit note has reduced
his ITC corresponding to such reduction of tax liability - Section 142(2).
Q 17. What will be the fate of pending refund of tax/interest under the existing law?
Ans. The pending refund claims will be disposed of in accordance with the provi-
sions of the existing law - Section 142(3).
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2019 FAQs 471
Q 18. What will be fate of any appeal or revision relating to a claim of CENVAT/
ITC on VAT which is pending under the existing law? If say, it relates to output
liability then?
Ans. Every proceeding of appeal, revision, review or reference relating to a claim
for CENVAT/input tax credit or any output tax liability initiated whether before,
on or after the appointed day, will be disposed of in accordance with the existing
law and any amount of credit of CENVAT/input tax credit or output tax found
admissible for refund will have to be refunded in accordance with the existing
law. However, any amount which becomes recoverable will have to be recovered
as arrears of tax under the GST Law - Section 142(6)/142(7).
Q 19. If the appellate or revisional order goes in favour of the assessee, whether
refund will be made in GST? What will happen if the decision goes against the
assessee?
Ans. The refund will be made in accordance with the provisions of the existing
law only. In case any recovery is to be made then, unless recovered under existing
law, it will be recovered as an arrear of tax under GST - Section 142(6) & 142(7).
Q 20. How shall the refund arising from revision of return(s) furnished under the
existing law be dealt in GST?
Ans. Any amount found to be refundable as a consequence of revision of any
return under the existing law after the appointed day will be refunded in cash in
accordance with the provisions of the existing law - Section 142(9)(b).
Q 21. If any goods or services are supplied in GST, in pursuance of contract entered
under existing law, which tax will be payable?
Ans. GST will be payable on such supplies - Section 142(10) of the CGST Act.
Q 22. Tax on a particular supply of goods/services is leviable under the existing
law. Will GST be also payable if the actual supply is made in GST regime?
Ans. No tax will be payable on such supply of goods/services under GST to the
extent the tax is leviable under the existing law - Section 142(11).
Q 23. In pursuance of any assessment or adjudication proceedings instituted, after
the appointed day, under the existing law, an amount of tax, interest, fine or pen-
alty becomes refundable. Shall such amount be refundable under the GST law?
Ans. No refund of such amount will be made in cash under the existing law - Sec-
tion 142(8)(b) of the CGST Act.
Q 24. If services are received by ISD under the earlier law, can the ITC relating to
it be distributed in GST regime?
Ans. Yes, irrespective of whether the invoice(s) relating to such services is received
on or after the appointed day - Section 140(7) of the CGST Act.
Q 25. Where any goods are sold on which tax was required to be deducted at
source under State VAT law and an invoice was also issued before the appointed
day, shall deduction of tax at source shall be made under this Act if the payment
is made after the appointed day?
Ans. No, in such case no deduction E-JOURNAL
of tax at source shall be made under GST.
Q 26. Goods were sent on approval not earlier than six months before the appointed
day but are returned to the seller after 6 months from the appointed day, will tax
be payable under GST?
Ans. Yes, if such goods are liable to tax under GST and the person who has rejected
or has not approved the goods, returns it after 6 months (or within the extended
period of maximum two months) from the appointed day. In that case tax shall also
be payable by the person who has sent the goods on approval basis - Section 142(12).
25. anti-pRofiteeRing pRovisions
Q 1. What is profiteering?
Ans. In terms of section 171 of the CGST Act, 2017, the suppliers of goods and ser-
vices should pass on the benefit of any reduction in the rate of tax or the benefit of
input tax credit to the recipients by way of commensurate reduction in prices. The
wilful action of not passing on the above benefits to the recipients in the manner
prescribed is known as “profiteering”.
Q 2. What is the background to providing statutory provisions on anti-profiteering
in GST law?
Ans. The Study Report titled ‘Implementation of Value Added Tax (VAT) in In-
dia-Lessons for transition to GST’ released by the Comptroller & Auditor General
(C&AG) of India in June, 2010 mentioned about several cases of profiteering by
dealers by not passing on the benefit of tax rate reduction to the consumers in
the wake of implementation of VAT in the country. The above C&AG report, after
checking the records of 13 manufacturers in a State in three initial months of
implementation of VAT, found that the manufacturers did not reduce the MRP of
the goods despite sharp fall in the tax rate post-VAT implementation. As a learning
from the VAT experience, legal teeth was sought to be provided in GST law by
incorporating anti-profiteering provisions to check profiteering by businesses when
GST was being rolled out in the country.
Q 3. What are the statutory provisions of anti-profiteering in GST law?
Ans. Section 171 of CGST Act, 2017, provides that any reduction in rate of tax on
any supply of goods or services or the benefit of input tax credit shall be passed
on to the recipient by way of commensurate reduction in prices.
Chapter XV of the CGST Rules, 2017 comprising of 16 Rules (Rule 122 to Rule
137), contains the detailed mechanism and procedure.
Q 4. Is there a sunset clause for Anti-Profiteering law?
Ans. Yes. In terms of Rule 137 of the CGST Rules, 2017, the Anti-profiteering Au-
thority shall cease to exist after the expiry of two years from the date on which
the Chairman of the Authority enters upon his office unless the GST Council
recommends otherwise.
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2019 FAQs 473
Q 5. What are some of the instances in which the statutory provisions of anti-prof-
iteering will kick in?
Ans. The different situations in which section 171 of CGST Act, 2017 & the identical
provision in State/UT GST Act will get attracted include:
i. reduction in tax rate;
ii. benefit of Input Tax Credit (ITC) available to the registered person/supplier.
Q 6. What is the function of National Anti-Profiteering Authority (NAA)?
Ans. The National Anti-Profiteering Authority (NAA) is required to determine
whether the benefit of input tax credit or reduction in the tax rate has actually
resulted in a commensurate reduction in the price of the goods or services or both.
The NAA has the power to identify the registered person who has not passed on
the benefit of reduction in tax rate or input tax credit by way of commensurate
reduction in prices and it may order reduction in prices; return to the recipient,
an amount equivalent to the amount not passed on by way of commensurate
reduction in prices along with interest; cancellation of registration of the supplier
and imposition of penalty. In case the eligible recipient is not identifiable or does
not claim return of the amount, the NAA may order the supplier to deposit the
amount in the Consumer Welfare Fund.
Q 7. Should a customer pay extra GST on Maximum Retail Price (MRP) affixed
on goods?
Ans. No. MRP is inclusive of GST and is the maximum retail price that can be
charged from the consumers.
Q 8. In cases of over-charging in the name of GST, where can a consumer register
his complaint for redressal?
Ans. Charging more than MRP attracts the provisions of Legal Metrology Act. In
case of over-charging over MRP, a complaint can be lodged on toll-free number
1800-11-4000/14404.
There are multiple ways through which aggrieved consumers or suppliers of goods
and services can register their complaints against profiteering:
a. Online complaint facility:
Complainant can register an online complaint at http://www.naa.gov.in/
complaint.php
Link to see the guidelines to register online complaint: http://www.naa.gov.
in/page.php?id=guidelines-for-consumers
b. Via Mail:
User can mail the complaint at:
Agencies Mail-Id Nature of the complaint

Standing Com- [email protected] Complaints involving
mittee [email protected] issues of all-India na-
ture.
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Agencies Mail-Id Nature of the complaint

State-Screening For State-wise E-mail Addresses Complaints involving
Committees please refer to: http://www.naa. issues of local nature.
gov.in/docs/screening%20com
mittees%2020-08-18.xlsx
c. By Post:
Agencies Postal Addresses

National Anti-prof- National Anti-profiteering Authority Dept. of
iteering Authority Revenue, Ministry of Finance 6th Floor, Tower One
Jeevan Bharati Building Connaught Place New Delhi
- 110 001.
Directorate Gen- Directorate General of Anti-profiteering, Dept. of Rev-
eral of Anti-Profi- enue, Ministry of Finance, 2nd Floor, Bhai Vir Singh
teering & Standing Sahitya Sadan, Bhai Vir Singh Marg, Gole Market,
Committee New Delhi - 110001.
Q 9. In cases of profiteering in the name of GST, what is the complaint redressal
mechanism available to the consumer?
Ans. The CGST Act, SGST Acts & the CGST/SGST Rules framed thereunder pro-
vide for the following complaint redressal mechanism.
1. The aggrieved persons may file an application, in the prescribed
format, before the Standing Committee on Anti-profiteering or before
the State Level Screening Committee. (If the issue involved is of local
nature).
2. The State Level Screening Committee constituted in every State/UT with
legislature examines it & forwards it to the Standing Committee constituted
at the national level, if a prima facie case of profiteering is made out against
the registered person.
3. Thereafter, the Standing Committee shall refer the matter to the Director
General of Anti-Profiteering (erstwhile DG, Safeguards) for a detailed in-
vestigation, if prima facie evidence of profiteering exists.
4. The DG, Anti-Profiteering shall conduct the investigation and submit its
report to the National Anti-Profiteering Authority (NAA) constituted by the
Central Government under section 171 (2) of the CGST Act, 2017 for taking
appropriate action, as mentioned in the Answer to Q 6. above.
Q 10. How can one file complaint against profiteering?
Ans. An online complaint can be filed at http://www.naa.gov.in/complaint.php .
Complaints of the nature of national-level can be filed by e-mail at sc.antiprofi-
[email protected]. Complaints of local nature can be sent by mail to the respective
State Screening Committee.
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2019 FAQs 475
Q 11. Whether one form is sufficient for multiple goods or services?

Ans. No, the prescribed application form APAF-01 is with reference to a single Good/
Service. In case of application for multiple Goods/Services, separate application
for each Good/Service is required to be filed.
Q 12. What is the methodology to identify cases of profiteering?
Ans. Rule 126 of the CGST Rules, 2017 vests the power to determine the meth-
odology & procedure with the National Anti-Profiteering Authority constituted
by the Central Government under Section 171 (2) of the CGST Act, 2017. The
guiding principle mentioned in the said Rule states that the reduction in tax rate
on supply of goods or services or benefit of input tax credit has to be passed on
to the recipient by way of commensurate reduction in prices. The methodology
and procedure adopted to identify cases of profiteering may vary from case to
case, depending upon the facts of the case and the nature of goods or services
supplied.
Q 13. What are some of the measures taken by the Consumer Affairs Ministry in
the Government of India to check cases of profiteering post implementation of
GST?
Ans. The Consumer Affairs Ministry in the Government of India, vide its Letter No.
WM-10(31)/2017, dated 04-07-2017, permitted the manufacturers or packers or
importers of pre-packaged commodities to affix new MRP labels (after incorpo-
rating tax changes due to GST) in addition to existing MRP for three months from
1st July to 30th Sept. 2017. Similar action was taken after the GST rate reduction
in November, 2017 and July, 2018.
Q 14. What can buyers do if shopping malls and retail stores are still selling goods
at pre-GST affixed labels?
Ans. As per the Government’s directive, shopping malls and retail stores are required
to affix two MRP labels reflecting both pre-GST & post-GST prices. Despite this, if
consumers find that retailers are selling goods at pre-GST affixed labels, they can
report to National Consumer Helpline. Also, the administrative machinery of the
Controller of Legal Metrology can be effectively used by States/UTs to monitor
& resolve such cases.
Q 15. How can buyers of under-construction flats benefit from the anti-profiteering
provisions?
Ans. Section 171 of the CGST Act, 2017 can be invoked when the builder increases
the instalment amount to be paid in case of an under construction flat, complex
etc, on the pretext of leviability of 12% GST as against the apparently lower tax
rates in the earlier indirect tax regime. In pre-GST era, Central Excise duty was
payable on most construction material at 12.5%. In addition, VAT was payable on
construction material at 12.5% to 14.5% in most of the States & the construction
material also suffered entry tax. The input tax credit of the above taxes was inad-
E-JOURNAL
missible for meeting Service Tax liability of the builder, thus leading to cascading
of input taxes on constructed flats & a higher effective tax incidence. But GST
regime allows full input tax credit for offsetting the headline rate of 12%, thereby
reducing the effective tax incidence.
Q 16. Can action be taken under the anti-profiteering provisions in case benefit of
transitional credit availed is not passed to the consumers?
Ans. The benefit of transitional input tax credit allowed under section 140(3) of
the CGST Act, 2017, is required to be passed on to the recipient by way of reduced
prices.
Q 17. What is the time-frame for deciding cases of anti-profiteering provisions?
Ans. The maximum time envisaged for resolution of cases is 9 months excluding
the time taken by the State-level screening committee and the Standing Committee
(maximum 2 months) for processing the complaints.
Q 18. What should a complainant ensure while submitting complaint to Screening
Committee/Standing Committee?
Ans. The complainant should submit a duly filled in application form APAF-01 along
with his identification document and evidence of profiteering. The instructions for
filling the said form are contained in form APAF-01.
Q 19. A company in order to justify the prices being charged by it may have to
submit information which could be confidential and may impact its business
interest?
Ans. The provisions of section 11 of the Right to Information Act, 2005, shall ap-
ply mutatis mutandis to the disclosure of any information which is provided on a
confidential basis.
The DG, Anti-Profiteering may require the parties providing information on
confidential basis to furnish a non-confidential summary thereof. If, in the opinion
of the party providing such information, the said information cannot be sum-
marised, such party may submit a statement of reasons as to why summarisation
is not possible.
Q 20. Where can one access the orders passed by NAA?
Ans. All the orders passed by NAA are available on their website http://www.naa.
gov.in/news.php?cat=2.

E-JOURNAL
2019 Circular/Press Release 477
CIRCULAR/PRESS RELEASE
CENTRAL GOODS AND SERVICES TAX ACT, 2017 - MAJOR DECI-
SIONS TAKEN BY CENTRAL GOVERNMENT IN THIRTY SECOND
GST COUNCIL MEETING HELD ON 10-1-2019
PIB PRESS RELEASE, DATED 10-1-2019
The GST Council in its 32nd Meeting held today under the Chairmanship of the
Union Minister of Finance & Corporate Affairs, Shri Arun Jaitley in New Delhi
took the following major decisions to give relief to MSME (including Small
Traders) among others —
1. Increase in Turnover Limit for the existing Composition Scheme: The limit
of Annual Turnover in the preceding Financial Year for availing Composition
Scheme for Goods shall be increased to Rs. 1.5 crore. Special category States
would decide, within one week, about the Composition Limit in their respective
States.
1.1 Compliance Simplification: The compliance under Composition Scheme
shall be simplified as now they would need to file one Annual Return but
Payment of Taxes would remain Quarterly (along with a simple declaration).
2. Higher Exemption Threshold Limit for Supplier of Goods: There would be
two Threshold Limits for exemption from Registration and Payment of GST for
the suppliers of Goods i.e. Rs. 40 lakhs and Rs. 20 lakhs. States would have an
option to decide about one of the limits within a weeks’ time. The Threshold for
Registration for Service Providers would continue to be Rs 20 lakhs and in case
of Special Category States at Rs 10 lakhs.
3. Composition Scheme for Services: A Composition Scheme shall be made
available for Suppliers of Services (or Mixed Suppliers) with a Tax Rate of 6%
(3% CGST +3% SGST) having an Annual Turnover in the preceding Financial
Year up to Rs. 50 lakhs.
3.1 The said Scheme Shall be applicable to both Service Providers as well as
Suppliers of Goods and Services, who are not eligible for the presently available
Composition Scheme for Goods.
3.2 They would be liable to file one Annual Return with Quarterly Payment of
Taxes (along with a Simple Declaration).
4. Effective date: The decisions at Sl. Nos. 1 to 3 above shall be made operational
from the 1st of April, 2019.
5. Free Accounting and Billing Software shall be provided to Small Taxpayers
by GSTN.
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478 Goods & Services Tax - Statutes VOL. 71
6. Matters referred to Group of Ministers:

i. A seven Member Group of Ministers shall be constituted to examine the
proposal of giving a Composition Scheme to Boost the Residential Seg-
ment of the Real Estate Sector.
ii. A Group of Ministers shall be constituted to examine the GST Rate
Structure on Lotteries.
7. Revenue Mobilization for Natural Calamities: GST Council approved Levy
of Cess on Intra-State Supply of Goods and Services within the State of Kerala
at a rate not exceeding 1% for a period not exceeding 2 years.
nn
CIRCULAR/PRESS RELEASE
RECOMMENDATIONS MADE DURING THIRTY SECOND GST
COUNCIL MEETING HELD AT NEW DELHI ON 10-1-2019
PIB PRESS RELEASE, DATED 10-1-2019
The GST Council in its 32nd meeting held at New Delhi gave approval for the
following:
(a) Changes made by CGST (Amendment) Act, 2018, IGST (Amendment) Act,
2018, UTGST (Amendment) Act, 2018 and GST (Compensation to States)
Amendment Act, 2018 alongwith amendments in CGST Rules, Notifica-
tions and Circulars issued earlier and the corresponding changes in SGST
Acts would be notified w.e.f. 1-2-2019.
(b) The last date for passing the examination for GST Practitioners to be
extended till 31-12-2019 for those GST Practitioners who have enrolled
under rule 83(1)(b) i.e. who were sales tax practitioner or tax return
preparer under the existing law for a period of not less than five years.
nn
E-JOURNAL
2019 Ecool Gaming Solutions (P.) Ltd., In re (AAR - Maharashtra) 169
Description of Supplier of Goods Recipient of Goods

Goods
Supply of lott- State Government, Lottery distributor or selling agent. Expla-
ery. Union Territory or nation. For the purposes of this entry, lot-
any local authority tery distributor or selling agent has the
same meaning as assigned to it in clause (c)
of Rule 2 of the Lotteries (Regulation) Rules,
2010, made under the provisions of sub-
section (1) of Sec. 11 of the Lotteries (Regu-
lations) Act, 1998
In accordance with above notification, the applicant is paying IGST under

Reverse charge mechanism at the rate of 28% with place of supply as State of
Maharashtra.
Statement containing the applicant’s interpretation of law and/or facts, as the
case may be, in respect of the aforesaid question(s) (i.e. applicant’s view point
and submissions on issues on which the advance ruling is sought). Grounds/
Interpretation Relied on by the Applicant—
Most Respectfully Submitted
To the Hon’ble Members of Authority for Advance Rulings, Maharashtra
1. That the applicant is registered under GST primarily to pay GST under
reverse charge mechanism on supply of lottery tickets by the organising
state as distributor or marketing agents of such organising state;
2. That the supply of lottery tickets are covered under RCM under IGST Act
as well as under CGST/SGST Act;
3. That under the IGST Act, Government issued Notification No. 4/2017 -
IGST (Rate) and notified supply of lottery tickets as goods covered under
RCM. The distributors/agent of organising state have been notified as
person liable to pay IGST;
4. That in the instant case (based on agreements attached with Brief Facts
given in Annexure 1 and marked as Exhibit 1) the supplier (i.e. organising
state) is located outside Maharashtra;
5. That in the instant case, the recipient of supply i.e. the applicant) is located
in the State of Maharashtra;
6. That as per Sec. 7 (1) of IGST Act, which reads as under —
Subject to the provisions of section 10, supply of goods, where the location
of the supplier and the place of supply are in—
(a) two different States;
(b) two different Union territories; or
(c) a State and a Union territory,
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170 Goods & Services Tax Cases - Reports VOL. 71
Shall be treated as a supply of goods in the course of inter-State trade or

commerce
7. That the place of supply is State of Maharashtra in the instant case, as
determined under Sec.10 (1) (C) of IGST Act, 2017 which reads as under—
The place of supply of goods, other than supply of goods imported into, or
exported from India, shall be as under,—
(a) to (b)** ** **;
(C) Where the supply does not involve movement of goods, whether by the
supplier or the recipient, the place of supply shall be the location of such
goods at the time of the delivery to the recipient;
8. That the lottery tickets are notified as goods under GST and in case of
online tickets, no movement is involved, therefore, applying Sec. 10(1)(c)
above, place of supply is determined as Maharashtra i.e. place where
lottery tickets are made available or delivered for distribution.
9. That, therefore the place of supplier i.e. organising state is outside
Maharashtra and place of supply is in Maharashtra, the transaction ought
to be treated as inter-State supply as per section 7(1) given in Para 6 above.
10. That, therefore, IGST is payable on supply of lottery tickets by the
organizing State from Outside Maharashtra to a dealer located in the State
of Maharashtra.
11. That the applicant prays before Hon’ble Authority to pronounce the ruling
based on the aforesaid interpretation of law and held the levy of IGST on
the supply of lottery tickets involved in the instant case;
12. That any other interpretation will leave Serial No. 5 of Notification No. 4/
2017 ibid as obsolete and useless and IGST would be never payable;
13. That the applicant craves leave to add/modify any of the above ground
during the course of hearing.
3. Contention - As Per the Concerned Officer-
The submission, as reproduced verbatim, could be seen thus-
M/s. Ecool Gaming Solutions Pvt. Ltd., 37/1966, 613-A-Wing, Kohinoor City, 6th
Floor, L.B.S. Marg, Kurla(West), Mumbai 400070, (hereinafter referred to as ‘the
applicant’) has filed above detailed application under Sections 97 & 98 of the
Central Goods & Services Tax Act, 2017 read with Rule 104(1) of the CGST
Rules, 2017 seeking advance ruling on:
(i) Whether applicant is liable to pay IGST under section 5(3) of IGST Act,
2017;
(ii) Whether Serial No. 5 of Notification No. 4/2017 - Integrated Tax (Rate) is
applicable on supply received by the applicant.
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2. M/s. Ecool Gaming Solution as Pvt. Ltd., registered under GSTIN No.
27AABCE3886A1ZT is engaged in acting as distributor or marketing agents of
lottery schemes organised by the State Government of Mizoram (hereinafter
referred to as ‘organising state’) and procure online tickets from organising
state for distribution across Maharashtra. In Point No.15 of the application
(Annexure-I), the applicants submitted that the lottery tickets are sold through
a chain of dealers/sales terminals of applicant spread across Maharashtra.
Further submitted that the applicant is registered under GST primarily to pay
GST under Reverse Charge Mechanism on supply of lottery tickets by the
organising state and the rate of GST prescribed on lottery tickets is 28% if lottery
scheme is authorised by the State and submitted that there is no dispute that
reverse charge mechanism is applicable on the supply of lottery tickets by the
organising state to distributors (like applicant) and mentioned/discussed sec-
tion 5(3) of IGST, 2017 and Serial No. 5 of Notification No. 4/2017-IGST(Rate).
3. The basic issue to be decided in the application is whether
(i) Whether applicant is liable to pay IGST under Section 5(3) of IGST Act,
2017;
(ii) Whether Serial No. 5 of Notification No. 4/2017 - Integrated Tax (Rate) is
applicable on supply received by the applicant.
The applicant in Point No. 15 of the application, have stated that the relevant
provisions viz. Section 5(3) of the IGST Act, 2017 and Serial No. 5 of Notification
No. 4/2017-IGST(Rate), dated 28.06.2017 under which the applicant is paying
IGST under Reverse Charge mechanism at the rate of 28% with place of supply
as State of Maharashtra.
4. However, in Point No.16 (Annexure-II) serial No.10, the applicant has wrongly
interpreted that the IGST is payable on supply of lottery tickets by the
organizing state from outside Maharashtra to a dealer located in the State of
Maharashtra. The applicant’s interpretation that Serial No. 5 of Notification
No. 4/2017 - Integrated Tax (Rate) ibid will be obsolete and useless and IGST
would be never payable, is completely wrong and without any logic. IGST is
payable correctly on supply of lottery tickets under Section 5(3) of IGST Act,
2017 (the charging section) read with Serial No. 5 of Notification No. 4/2017-
IGST(Rate), dated 28.06.2017 under reverse charge mechanism by the appli-
cant and not by the organising state viz. State of Mizoram.
Prayer—
Considering the facts discussed in foregoing paragraphs, the question framed
by the applicant in Point No. 14,
(i) whether applicant is liable to pay IGST under Section 5(3) of IGST Act,
2017, the answer is “Yes”.
(ii) whether Serial No. 5 of Notification No. 4/2017 - Integrated Tax (Rate) is
applicable on supply received by the applicant, the answer is “Yes”.
E-JOURNAL
4. Hearing
The case was taken up for Preliminary hearing on dt. 17.07.2018 when Sh.
Mahesh Bhattar, consultant along with Sh. Mahadev Batwalkar, Sr. Manager
Taxation appeared and requested for admission of application as per conten-
tions in their ARA. Jurisdictional Officer, Sh. Shashikant Deshmukh Supdt,
Mumbai East Commissionerate appeared and made written submissions .
The application was admitted and called for final hearing on 07.08.2018, Sh.
Mahesh Bhattar, consultant along with Sh. Mahadev Batwalkar, Sr. Manager
Taxation appeared and made oral and written submissions. Jurisdictional
Officer, Sh. Manoj Kumar Inspector Mumbai East Commissionerate appeared
and stated that they have already made written submissions.
5. Observations
We have gone through the facts of the case. We find that:
(1) The applicant is registered person under GST ACT. As per the agreement
made between organizing State and applicant ,he is acting as distributor
or marketing agents of lottery schemes organised by the State Govern-
ment of Mizoram (hereinafter referred as ‘organizing state’) and procures
online tickets from organising state for distribution across Maharashtra.
The lottery tickets are sold through a chain of dealers/sales terminals of
applicant spread across Maharashtra.
(2) We find that the applicant is paying GST under Reverse Charge Mecha-
nism (hereinafter referred as RCM) on supply of lottery tickets by the
organising state. He is having no dispute that rate of GST prescribed on
lottery tickets by way of RCM is 28% if lottery scheme is authorised by the
State.
(3) We find that the applicant has raised the following questions before the
advance ruling authority:
(i) Whether applicant is liable to pay IGST under section 5(3) of IGST
act, 2017.
(ii) Whether Serial No. 5 of Notification No. 4/2017 - Integrated Tax
(Rate) is applicable on supply received by the applicant.
(4) We find that Section 5(3) of the IGST Act reads as under:-
Section 5(3) -The Government may, on the recommendations of the
Council, by notification, specify categories of supply of goods or services or
both, the tax on which shall be paid on reverse charge basis by the recipient
of such goods or services or both 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.
(5) The above position would be very clear from the facts of the case which
are reiterated as under:-
E-JOURNAL
In the present case, applicant is recipient of supply in the form of lottery and is
located in Maharashtra.
The supplier of lottery is the State Government of Mizoram which is located
outside State. Therefore as per the provisions of Section 7(1) of the IGST Act,
the transaction shall be treated as a supply of goods in the course of “inter-State”
trade or commerce.
In view of Section 5(3) of the IGST Act, we find that Notification No. 4/2017
Integrated Tax (Rate), dated 28.06.2017 has been issued which provides the
description of goods in respect of which Integrated Tax shall be paid on Reverse
Charge basis by the recipient of the Inter-State supply of such goods.
We find the ‘Lottery’ is covered under this Notification which is as under:—
Sr. Tariff item, Description Supplier of Recipient of Goods

No. sub head- of Goods Goods
ing or cha-
pter
5 - Supply of State Govern- Lottery distributor or selling agent. Expla-
lottery. ment, Union nation. For the purposes of this entry, lot-
Territory or tery distributor or selling agent has the
any local auth- same meaning as assigned to it in clause (c)
ority of Rule 2 of the Lotteries (Regulation) Rules,
2010, made under the provisions of sub-
section (1) of section 11 of the Lotteries
(Regulations) Act, 1998
In the present case, we clearly find that the supplier of Lottery in the present
case is the State Government of Mizoram and the recipient of supply i.e. Lottery
distributor or Agent, is the applicant in the present case who is located in
Maharashtra and therefore the applicant is liable to payment of IGST under
Reverse Charge mechanism as per the provisions and Notification referred
above.
6. In view of all above deliberations, the questions can be answered thus -
ORDER
For reasons as discussed in the body of the order, the questions are answered
thus -
Question :-1. Whether applicant is liable to pay IGST under section 5(3) of IGST
Act, 2017.
Answer :- Answered in affirmative.
Question :- 2. Whether Serial No. 5 of Notification No. 4/2017 - Integrated Tax
(Rate) is applicable on supply received by the applicant.
Answer :- Answered in affirmative.
nn
E-JOURNAL
[2019] 71 GST 174/[2018] 100 taxmann.com 14 (AAR - Rajasthan)

AUTHORITY FOR ADVANCE RULING, RAJASTHAN
Sandvik Asia (P.) Ltd., In re
NITIN WAPA AND HEMANT JAIN, MEMBER
ADVANCE RULING NO. RAJ/AAR/2018-19/21
OCTOBER 12, 2018
u Activities performed by applicant under Comprehensive Maintenance

Contract are to be treated as a composite supply of services and activities
performed under Equipment Parts Supply and Services Agreement are to be
treated as Mixed Supply
u Concept of principal supply is applicable only in supply of composite service
and not in case of mixed supplies
u Maintenance and repair services of commercial and industrial machinery
fall under heading 9987171 and prescribed rate of GST is 18 per cent
u Determination of place of supply not having been specified under section
97(2), no finding could be given in respect of place of supply, as an authority
constituted under section 96 can determine or pronounce Advance ruling
only on issues specified under section 97(2)
Section 2(30), read with section 2(74), of the Central Goods and Services Tax
Act, 2017/Section 2(30), read with section 2(74), of the Rajasthan Goods and
Services Tax Act, 2017 - Supply - Composite supply/Mixed supply - Whether
in case of applicant engaged into business of after sales support for mining
equipment manufactured by its overseas group entities which are imported by
customers into India, activities performed under ‘Comprehensive Maintenance
Contract’ wherein applicant is mainly providing operation and maintenance
services of machines supplied by them are to be treated as a composite supply
of services - Held, yes - Whether however, activities performed under
‘Equipment Parts Supply and Services Agreement’ wherein applicant can
supply parts or services individually or any combination thereof on a single
price is appropriately covered under mixed supply as specified under section
2(74) - Held, yes [Paras 5 and 6]
Section 2(90) of the Central Goods and Services Tax Act, 2017/Section 2(90)
of the Rajasthan Goods and Services Tax Act, 2017 - Supply - Principal Supply
- Whether concept of principle supply is applicable only in supply of composite
E-JOURNAL
2019 Sandvik Asia (P.) Ltd., In re (AAR - Raj.) 175
service and not in case of mixed supplies - Held, yes - Whether thus, in
composite supply of comprehensive maintenance contract, supply of
maintenance services is to be considered as principal supply and supply of
other goods or services shall be ancillary to such principal supply - Held, yes
[Paras 5 and 6]
Classification of service - Maintenance and repair services - Heading No.
9987171 - Section 8 of the Central Goods and Services Tax Act, 2017/Section
8 of the Rajasthan Goods and Services Tax Act, 2017 - Composite and mixed
suppliers, tax liability on - Whether maintenance and repair services of
commercial and industrial machinery fall under heading 9987171 and
prescribed rate of GST is 18 per cent (CGST at rate of 9 per cent of taxable
value, SGST at rate of 9 per cent of taxable value) or IGST at rate of 18 per cent
of taxable value - Held, yes - Whether however, for supply of mixed services,
applicant is liable to pay highest rate of tax as per section 8(b) of CGST Act -
Held, yes [Paras 5 and 6]
Section 97, read with section 96, of the Central Goods and Services Tax Act,
2017/Section 97, read with section 96, of the Rajasthan Goods and Services
Tax Act, 2017 - Advance ruling - Application for - Whether an authority
constituted under section 96 can determine or pronounce Advance ruling only
on issues specified under section 97(2) of CGST/SGST Act, 2017 - Held, yes -
Whether since determination of place of supply has not been specified under
section 97(2), no finding could have been given in respect of place of supply -
Held, yes [Paras 5 and 6]
(NR)
FACTS
n The applicant a multi-product company is engaged into the business of after

sales support for the mining equipment manufactured by its overseas group
entities which are imported by the customers into India. With respect to after
sales support, the applicant provides maintenance services for the imported
equipment which includes repair and replacement of parts and tools. The
applicant intends to execute an agreement for providing maintenance
services to prospective customers for equipment located at various sites in
the state of Rajasthan.
n The applicant has sought Advance ruling on the following questions:
1. Whether on facts and circumstances of the case, the maintenance

services rendered on customers’ equipment under the two agreements
i.e. comprehensive maintenance services agreement and supply of
parts and services agreement which also includes supply and replace-
ment of spare parts should be classified as ‘composite supply’ under
Section 2(30) of Central Goods and Services Tax Act, 2017 (CGST Act)
E-JOURNAL
and Rajasthan State Goods and Services Tax Act, 2017 (RJ SGST Act)
(‘GST Act’) or as mixed supply under section 2(74)?
2. In case the said agreements are considered as composite supply, what
is the principal supply between goods and services?
3. In case services are considered as the principal supply, what tax rate
should be applicable?
4. In respect of the said agreements, what shall be the relevant place of
supply and type of tax which needs to be discharged? (i.e. CGST & SGST
or IGST).
HELD
Whether maintenance services rendered on customers’ equipment under

two agreements i.e. comprehensive maintenance services agreement and
supply of parts and services agreement which also includes supply and
replacement of spare parts should be classified as ‘composite supply’ under
section 2(30)?
n The Integrated contract made by the applicant is classifiable under compos-
ite supply in terms of section 2 (30) of GST Act, which means ‘a supply made
by a taxable person to a recipient consisting of two or more taxable supplies
of goods or services or both, or any combination thereof which are naturally
bundled and supplied in conjunction with each other in the ordinary course
of business, one of which is a principal supply’. The contract made for parts
and services is classifiable under mixed services under section 2(74) of
CGST/RGST Act, 2017. [Para 5.2]
n The applicant’s contention is that in both the situations the service is
classifiable under Composite Service which is not tenable. Regarding the
Contract made for maintenance services in respect of machinery supplied in
2017, the applicant is well aware about the parts which would suffer wear
and tear and need to be replaced by the applicant. Further, the applicant in
their contract named ‘Equipment parts Supply and Service Agreement’ in
Schedule-D, also shows that in their daily/monthly log-sheet the applicant
has to mention the parts being replaced by them. It is evident that the
applicant can supply these parts individually and along with the package of
the services. Supply of parts and services are known and can be supplied
individually to the customers, hence, these supplies fall under the services
specified under section 2(74) of the CGST/RGST Act, 2017 and they are
chargeable to GST at applicable rates such as 12 per cent, 18 per cent, 28 per
cent etc. whichever is higher. [Para 5.3]
n As per section 2 (74) of GST Act, ‘mixed supply’ means two or more individual
supplies of goods or services, or any combination thereof, made in conjunc-
tion with each other by a taxable person for a single price where such supply
does not constitute a composite supply. [Para 5.4]
E-JOURNAL
n In the instant case the applicant can supply the parts or services individually
or any combination thereof on a single price which is appropriately covered
under mixed supply.[Para 5.5]
n However, the contention of the applicant regarding ‘Comprehensive Mainte-
nance Contract’, that the services would be classifiable under the Composite
Services, it is viewed that services supplied under the said contract are to be
treated as composite services and the tax rate applicable on the principle
supply would also be applicable on the other services.[Para 5.6]
Whether if above stated agreements are considered as composite supply,
what is principal supply between goods and services?
n The concept of principle supply is applicable only in supply of composite
service. As already discussed, the applicant is supplying both type of services
i.e. mixed supply and composite supply. There is no concept of principle
supply in mixed supply.[Para 5.7]
n The concept of principle supply is under Composite supply. On going through
the contents of the Integrated Contract, it is viewed that in composite supply,
the applicant is mainly providing operation and maintenance services of the
machines supplied by them and hence, the principle supply would be the
same i.e. operation and maintenance services. In the instant case, main issue
is to ensure the uninterrupted operation of the equipment through supply of
maintenance services. For the provision of such services, the applicant has
to supply certain goods such as spare parts and consumables, and would also
supply maintenance services through skilled engineers, labourers etc.[Para
5.8]
n The consumption of goods vary substantially depending on the wear and tear
of the equipment, however the consumption of services which would be
critical may not vary substantially as these engineers would be stationed at
the mine site and accordingly perform maintenance activities on the equip-
ment at regular intervals. Therefore, the predominant element in the com-
posite supply would be provision of maintenance services and the supply of
goods would be ancillary to such services.[Para 5.9]
n Accordingly, the supply of maintenance services should be considered as the
principal supply and the supply of other goods or services shall be ancillary
to such principal supply.[Para 5.10]
Whether if services are considered as principal supply, what tax rate should
be applicable?
n The maintenance services provided in the above agreements should be
classified as a composite supply of maintenance services and hence the tax
rate applicable for the supply of maintenance services should be under the
‘Chapter Heading of 9987- Maintenance, repair and installation (except
construction) services’.[Para 5.11]
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n The service code for Maintenance and repair services of commercial and
industrial machinery is 9987171 and the prescribed rate of GST is 18 per cent
(CGST at the rate of 9 per cent of the taxable value, SGST at the rate of 9 per
cent of the taxable value) or IGST at the rate of 18 per cent of the taxable
value.[Para 5.11]
n For the supply of mixed services, the applicant is liable to pay the highest rate
of tax as per section 8(b) of the CGST Act, 2017.[Para 5.12]
What shall be relevant place of supply and type of tax (i.e. CGST & SGST
or IGST) which needs to be discharged in respect of said agreements ?
n The place of supply can be determined as per Chapter V of IGST Act, 2017.
Section 10 of IGST Act relates to place of supply of goods and section 12 of
IGST relates to place of supply of services. As the applicant is supplying the
parts of the machinery and also providing the services of operation and
maintenance, accordingly the place of supply will be determined as per
section 10 or section 12 of the IGST Act. It is found that the determination of
place of supply as requested by the applicant cannot be decided by the
authorities for Advance Ruling constituted under section 96 of SGST Act,
2017. The Authority constituted under the said section can determine or
pronounce Advance ruling only on the issues specified under section 97(2) of
CGST/SGST Act, 2017 and determination of place of supply has not been
specified under section 97(2). In view of above no finding is being given in
respect of place of supply. Hence the query raised by the applicant is
accordingly disposed off.[Para 5.14]
n In view of the above stated facts the ruling as under is being pronounced:
n The activities performed under the ‘Comprehensive Maintenance Contract’

are to be treated as a composite supply of services and the activities
performed under ‘Equipment Parts Supply and Services Agreement’ are to
be treated as Mixed Supply.
2. In respect of the activities performed under ‘Comprehensive Maintenance
Contract’, the supply of Operation and Maintenance services is the principal
supply and the supply of other services are ancillary to such principal supply.
3. The service code for Maintenance and repair services of commercial and
industrial machinery is 9987171 and the prescribed rate of GST is 18 per cent
(CGST at the rate of 9 per cent of the taxable value, SGST at the rate of 9 per
cent of the taxable value) or IGST at the rate of 18 per cent of the taxable value.
For the supply of mixed services, the applicant is liable to pay the highest rate
of tax as per section 8(b) of the CGST Act, 2017.
4. As the query raised by the applicant does not fall in the categories mentioned
under section 97(2) of CGST/SGST Act, 2017, hence the same is accordingly
disposed off. [Para 6]
Nitin Vijayvargiya, AR for the Applicant.
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RULING
The Issue raised by M/s. Sandvik Asia Pvt. Ltd. [hereinafter the applicant] is fit
to pronounce advance ruling as it falls under ambit of the Section 97(2) (a)(e)
and it is given as under:
a. Classification of any goods or services or both;
e. Determination of the liability to pay tax on any goods or services or both;
Further, the applicant being a registered person, GSTIN is 08AACCS6638K1ZX,
as per the declaration given by him in Form ARA-01, the issue raised by the
applicant is neither pending for proceedings nor proceedings were passed by
any authority. Based on the above observations, the application is admitted to
pronounce advance ruling.
1. Submission of the applicant
The Applicant is a private limited company incorporated under the provisions
of Companies Act, 1956 having registered head office located at Pune and
holding GST registration Number (GSTIN) 08AACCS6638K1ZX for the State of
Maharashtra.
1.1 The Applicant is a multi-product, multi-division entity, engaged in manufac-
turing, distribution and sales agency activities of various industrial products
which include metal cutting tools, mining/construction equipment, spares for
mining equipment, seamless stainless steel tubes and pipes and wires and
heating systems. Further, the Applicant is also engaged into the business of after
sales support for the mining equipment manufactured by its overseas group
entities which are imported by the customers into India.
1.2 With respect to after sales support, the Applicant provides maintenance
services for the imported equipment which includes repair and replacement of
parts and tools. The maintenance services are provided for the equipment post
issuance of commissioning certificate. The maintenance services are rendered
on the equipment for a specific period as agreed with the customer from the
commencement of mining operations depending upon the number of hours the
equipment are operational or the quantum of output not produced by the
equipment during the equipment life cycle.
1.3 In respect of the supply of part under the proposed agreements, the
Applicant would supply parts falling under multiple GST rates such as 12%, 18%,
28%, etc.
1.4 The Applicant intends to execute an agreement for providing maintenance
services to prospective customers for equipment located at various sites in the
state of Rajasthan.
2. Questions on which the advance ruling is sought
Applicant has sought ruling to be pronounced under section 97(2) (a) (e) of the
CGST Act, 2017, on the following questions:
E-JOURNAL
1. Whether on facts and circumstances of the case, the maintenance services

rendered on customers’ equipment under the two agreements i.e. compre-
hensive maintenance services agreement and supply of parts and services
agreement which also includes supply and replacement of spare parts
should be classified as ‘composite supply’ under Section 2(30) of Central
Goods and Services tax Act, 2017 (CGST Act) and Rajasthan State Goods
and Services Tax Act, 2017 (RJ SGST Act) [collectively referred to as the
‘GST Act’] or as mixed supply under Section 2(74) of GST Act?
2. In case the said agreements are considered as composite supply, what is
the principal supply between goods and services?
3. In case services are considered as the principal supply, what tax rate
should be applicable?
4. In respect of the said agreements, what shall be the relevant place of
supply and type of tax which needs to be discharged? (i.e. CGST & SGST
or TGST).
3. The applicant’s interpretation
a. As per Section 2 (30) of GST Act, “composite supply” means a supply made
by a taxable person to a recipient consisting of two or more taxable
supplies of goods or services or both, or any combination thereof, which
are naturally bundled and supplied in conjunction with each other in the
ordinary course of business, one of which is a principal supply.
b. As per Section 2 (74) of GST Act, “mixed supply means two or more
individual supplies of goods or services, or any combination thereof, made
in conjunction with each other by a taxable person for a single price where
such supply does not constitute a composite supply.
c. As per Section 2 (90) of GST Act, “principal supply” means the supply of
goods or services winch constitutes the predominant element of a com-
posite supply and to which any other supply forming part of that compos-
ite supply is ancillary.
d. In the present case, the Applicant is entering into agreements with
prospective customers with the sole intention to provide maintenance
services to a customer. The main object of such maintenance services is
to ensure the uninterrupted operation of the equipment, which could be
achieved by ensuring the guaranteed availability of the equipment as
defined under the agreement. Further, it is important to note that in case
such guaranteed availability is not achieved by the Applicant, then the
Applicant may be liable to penal consequences.
e. In order to achieve the above guaranteed availability, the Applicant may
or may not necessarily require to use or supply spare parts or goods on a
regular basis, however the Applicant would be required to supply mainte-
nance services which would be rendered through skilled engineering,
labourers etc. stationed at the site.
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f. Further, it is important to note that in order to ensure the uninterrupted

operation of the equipment the maintenance services are required to be
performed, accordingly, depending on the requirements for performing
the services, the Applicant would be supplying goods or services which
could vary on each equipment.
c. Thus, it is clear that the main activity performed by the Applicant would
be in respect of providing maintenance services ensuring uninterrupted
operation of equipment irrespective of the quantum of goods required for
the said purpose.
h. Therefore, it could be said that the supply of spares or other goods for
providing maintenance services would be incidental or ancillary to the
repair or maintenance services to be provided under the agreement.
i. In order to classify any activity as a composite supply, it could be said that
the following conditions are required to be fulfilled referring the definition
under Section 2(30) of GST Act:
(a) There should be two or more taxable supplies of goods or services or
both;
(b) The taxable supplies should be naturally bundled in the ordinary
course of business;
(c) The taxable supplies should be supplied in conjunction with each
other in the ordinary course of business; and
(d) One taxable supply should be a principal supply. In such case the
principal supply would be treated as the main supply and the entire
transaction should be liable to GST as per the rate applicable to the
principal supply.
j. We believe that the maintenance services to be provided by the applicant
fall under the definition of composite supply as it satisfies above condi-
tions as explained below:
(a) Two or more taxable supply of goods or services or both:
In the present case, more than one type of taxable goods could be
used as spare parts for providing maintenance services. Further,
taxable services of repair and maintenance are also being provided
under the same agreement along with supply of goods. Hence, the
conditions of two or more taxable supply of goods or services are
being satisfied under the subject agreement.
(b) Taxable supplies should be naturally bundled in the ordinary course
of business.
In order to understand whether any service is naturally bundled or
not, it is important to refer to the Education Guide issued by the
Central Board of Excise and Customs (‘CBEC’) now renamed as
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Central Board of Indirect Tax and Customs (‘CBIC’). Para 9.2.4 of the
Education Guide mentioned the following:
“Whether services are bundled in the ordinary course of business would
depend upon the normal or frequent practices followed in the area of
business to which services relate.”
The nature of the various services in a bundle of services will also
help in determining whether the services are naturally bundled in the
ordinary course of business. If the nature of services is such that one
of the services is the main service and the other services combined
with such service are in the nature of incidental or ancillary services
which help in better enjoyment of a main service. Referring to the
scope of work to be executed under the above agreement, we have
analysed few of the above indicative factors below:
i. Perception of the service recipient: The intention of both the
supplier and the service recipient under the execution of the
agreement is to ensure the uninterrupted operation of the
equipment. Thus, the perception of the recipient is intended
towards the receipt of maintenance services irrespective of the
quantum of goods being consumed for provision of such main-
tenance services;
ii. Advertised as a single package: The Applicant is engaged in
providing its services to multiple customers in the mining
industry and the applicant’s equipment, its spare parts and
skilled engineers are proprietary in nature and difficult to
replace in the local or domestic market. Hence the Applicant
markets its maintenance services as a single package where the
Applicant’s sole obligation is to ensure guaranteed availability
of the equipment to the customer. The guaranteed availability
is mutually defined in the agreement. Hence the quantum of
goods used is not possible since it varies every time depending
on the requirement of the equipment to ensure its guaranteed
availability. Therefore the Applicant offers the maintenance
services as a whole to its clients charging therein a fixed
amount, on the basis of the time the equipment has been in
operation or the output the equipment has produced;
iii. Single Price: As mentioned above, the Applicant provides these
maintenance services as a single package which includes sup-
ply of goods and services. The pricing of these services is also
fixed on the basis of the time the equipment is in operation or
the quantum of output produced by the equipment. Hence, the
quantum of goods consumed in providing these services would
be irrelevant in respect of the price to be charged to the
customers by the Applicant. Further, as discussed earlier, the
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Applicant may not be able to predict the type of goods that may
be required for the maintenance of the equipment prior to
providing maintenance services. Hence, it is not practically
possible for the Applicant to separate the goods and services
being supplied for ensuring continuous operation of the equip-
ment. Accordingly, the Applicant intends to charge a fixed
amount of consideration as per predetermined hourly rates/
per ton rates on the basis of hours the equipment has been in
operation or the quantum of output produced by the equip-
ment;
iv. Nature of various services: the nature of services provided
under this agreement is such that the main services could be
categorized as the maintenance services provided to the cus-
tomer and further the supply of goods is incidental to the supply
of maintenance services;
Therefore, as per above discussion, it is clear that the supply of
goods and services executed under the above agreement are
naturally bundled in the ordinary course of business.
(c) Taxable supply should be supplied in conjunction with each other.
The term ‘conjunction’ under Oxford dictionary has been “Conjunc-
tion: The action or an instance of two or more events or things
occurring at the same point in time or space”
In the instant case, the supply of goods or services or both shall be
occurring together or at the same point of time as the sole intention
of the agreements is to ensure that the equipment is operating
without any interruptions. Hence, it could be said that the supply of
goods or services would be done by the Applicant in conjunction with
each other.
(d) One taxable supply should be a principal supply
The definition of principal supply states that the supply which constitutes
the predominant element of a composite supply and to which the other
supply is ancillary shall be the principal supply.
As the provision of maintenance services under the said agreements is
with the objective to ensure smooth and uninterrupted operation of the
equipment. Thus, the activity of providing maintenance and repair service
would constitute the predominant element of the composite supply
whereas supply of other goods or services that may be required to be
supplied under the agreements shall be ancillary to the main service.
Further, it is also important to distinguish the concept of composite supply
and mixed supply to have clarity on the subject matter. Under both the
concepts i.e. composite supply and mixed supply there are supplies of two
or more goods or services or both or any combination thereof and which
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are supplied in conjunction with each other. However, the distinguishing

factor between composite supply and mixed supply is that a composite
supply involves supplies of goods or services or both or any combination
thereof which is naturally bundled in ordinary course of business and one
of the supplies is the principal supply. Further, where the supply has been
constituted as composite supply then the said supplies shall not be
considered as mixed supply in terms of the definition.
k. The Uttar Pradesh Authority for Advance Ruling in case of M/s. GE Diesel
Locomotive Private Limited vide order dated 16.05.2018 held that com-
prehensive maintenance services in relation to railway locomotives are a
composite supply of maintenance services.
4. Personal Hearing (PH)
4.1 In the matter personal hearing was given to the applicant on 08/10/2018
wherein Sh. Nitin Vijayvargiya, Authorised representative (AR) appeared on
behalf of the Applicant. During the PH the AR reiterated the submissions
already made in the application for advance ruling and requested that the case
may be decided at the earliest.
4.2 The jurisdictional officer in his comments has submitted that “the said
supply is a mixed supply. As per Section 2 (74) of GST Act, “mixed supply” means
two or more individual supplies of goods or services, or any combination
thereof, made in conjunction with each other by a taxable person for a single
price where such supply does not constitute a composite supply. Under Section
2 (74) of GST Act, the applicable GST for the supply will be 28%. Tax in relation
to CGST and RGST for Rajasthan will be leviable only when place of supply is
Rajasthan”.
5. Findings, analysis & conclusion
5.1 We have gone through the contents of the application, submissions given by
applicant at the time of hearing, comments of the concerned jurisdictional
officers and accordingly find that the Applicant is a multi-product, multi-
division entity, engaged in manufacturing, distribution and sales agency activi-
ties of various industrial products which include metal cutting tools, mining/
construction equipment, spares for mining equipment, seamless stainless steel
tubes and pipes and wires and heating systems. Further, the Applicant is also
engaged in the business of after sales support services for the mining equipment
manufactured by its overseas group entities which are imported by the
customers into India.
Question No.1
The applicant is mainly providing support services in respect of maintenance of
machinery supplied by them. The machinery supplied in 2017 also requires
maintenance and further supply of its parts by the applicant. We also find that
the applicant also makes an integrated contract for the operation and mainte-
nance service and they are not in a position to ascertain which parts are to be
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supplied in the course of its operation and maintenance. In these two situations
the question raised by the applicant is that Whether on facts and circumstances
of the case, the maintenance services rendered on customers’ equipment under
the two agreements i.e. comprehensive maintenance services agreement and
supply of parts and services agreement which also includes supply and replace-
ment of spare parts should be classified as ‘composite supply’ under Section 2(30)
of Central Goods and Services tax Act, 2017 (CGST Act) and Rajasthan State
Goods and Services Tax Act, 2017 (RJ SGST Act) [collectively referred to as the
‘GST Act’] or as mixed supply under Section 2(74) of GST Act?
5.2 We find that Integrated contract made by the applicant is classifiable under
Composite supply in terms of Section 2 (30) of GST Act, which means ‘a supply
made by a taxable person to a recipient consisting of two or more taxable supplies
of goods or services or both, or any combination thereof, which are naturally
bundled and supplied in conjunction with each other in the ordinary course of
business, one of which is a principal supply’. The Contract made for parts and
services is classifiable under mixed services under Section 2(74) of CGST/
RGST Act, 2017.
5.3 The applicant’s contention is that in both the situations the service is
classifiable under Composite Service which is not tenable. Regarding the
Contract made for maintenance services in respect of machinery supplied in
2017, the applicant is well aware about the parts which would suffer wear and
tear and need to be replaced by the applicant. Further, the applicant in their
contract named ‘Equipment parts Supply and Service Agreement’ in Schedule-
D, also shows that in their daily/monthly log-sheet the applicant has to mention
the parts being replaced by them. It is evident that the applicant can supply these
parts individually and along with the package of the services. Supply of parts
and services are known and can be supplied individually to the customers,
hence, these supplies fall under the services specified under Section 2(74) of the
CGST/RGST Act, 2017 and they are chargeable to GST at applicable rates such
as 12%, 18%, 28%, etc. whichever is higher.
5.4 As per Section 2 (74) of GST Act, “mixed supply” means two or more
individual supplies of goods or services, or any combination thereof, made in
conjunction with each other by a taxable person for a single price where such
supply does not constitute a composite supply.
5.5 In the present case the applicant can supply the parts or services individually
or any combination thereof on a single price which is appropriately covered
under mixed supply.
5.6 However, the contention of the applicant regarding “Comprehensive Main-
tenance Contract”, that the services would be classifiable under the Composite
Services, we are of the view that Services supplied under the said contract are
to be treated as composite services and the tax rate applicable on the principle
supply would also be applicable on the other services.
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Question No.2
5.7 The Second question arises on the basis of first question. The concept of
principle supply is applicable only in supply of composite service. As already
discussed, the applicant is supplying both type of services i.e. mixed supply and
composite supply. There is no concept of principle supply in mixed supply.
5.8 The concept of principle supply is under Composite supply. On going
through the contents of the Integrated Contract, we are of the view that in
composite supply, the applicant is mainly providing operation and maintenance
services of the machines supplied by them and hence, the principle supply
would be the same i.e. operation and maintenance services. In the present case,
main issue is to ensure the uninterrupted operation of the equipment through
supply of maintenance services. For the provision of such services, the Appli-
cant has to supply certain goods such as spare parts and consumables, and
would also supply maintenance services through skilled engineers, labourers
etc.
5.9 The consumption of goods vary substantially depending on the wear and
tear of the equipment, however the consumption of services which would be
critical may not vary substantially as these engineers would be stationed at the
mine site and accordingly perform maintenance activities on the equipment at
regular intervals. Therefore, the predominant element in the composite supply
would be provision of maintenance services and the supply of goods would be
ancillary to such services.
5.10 Accordingly, the supply of maintenance services should be considered as
the principal supply and the supply of other goods or services shall be ancillary
to such principal supply.
Question No.3
5.11 The maintenance services provided in the above agreements should be
classified as a composite supply of maintenance services and hence the tax rate
applicable for the supply of maintenance services should be under the ‘Chapter
Heading of 9987- Maintenance, repair and installation (except construction)
services’.
Service Accounting Code (‘SAC’) 998717: Maintenance and repair services
of commercial and industrial machinery refers that:—
This service code includes maintenance and repair services of engines and
turbines (except aircraft, vehicle and cycle engines), pumps and compres-
sors, taps and valves, furnaces and furnace burners, lifting and handling
equipment, non-domestic cooling and ventilation equipment, agricultural
and forestry machinery, machine tools, machinery for metallurgy, machin-
ery for mining, quarrying and construction, machinery for food, beverage
and tobacco processing, machinery for textile, apparel and leather produc-
tion, machinery for paper and paperboard production, weapons and
weapons systems, agricultural, forestry and garden tractors and
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lawnmowers, other general-purpose machinery and special- purpose ma-

chinery.
This service code does not include:
- maintenance and repair services of domestic boilers and burners, of
995463 and
- elevators, goods lifts, escalators and moving pavements, of 998718
Thus, the service code for Maintenance and repair services of commercial and
industrial machinery is 9987171 and the prescribed rate of GST is 18% (CGST
@ 9% of the taxable value, SGST @ 9% of the taxable value) or IGST @ 18% of
the taxable value.
5.12 For the supply of mixed services, the applicant is liable to pay the highest
rate of tax as per Section 8(b) of the CGST Act, 2017. Section 8(b) of the CGST
act is as below:
“a mixed supply comprising two or more supplies shall be treated as a supply of that
particular supply which attracts the highest rate of tax.”
Question 4
5.13 The applicant has also made a query about the place of supply, whether in
the facts and circumstances of the case, what shall be the relevant place of
supply and type of tax which needs to be discharged? (i.e. CGST & SGST or IGST).
5.14 The place of supply can be determined as per Chapter V of IGST Act, 2017.
Section 10 of IGST Act relates to place of supply of goods and Section 12 of IGST
relates to place of supply of services. As the applicant is supplying the parts of
the machinery and also providing the services of operation and maintenance,
accordingly the place of supply will be determined as per Section 10 or Section
12 of the IGST Act. We find that the determination of place of supply as
requested by the applicant cannot be decided by the authorities for Advance
Ruling constituted under Section 96 of SGST Act, 2017. The Authority consti-
tuted under the said section can determine or pronounce Advance ruling only
on the issues specified under Section 97(2) of CGST/SGST Act, 2017 and
determination of place of supply has not been specified under Section 97(2). In
view of above we are not giving any finding in respect of place of supply. Hence
the query raised by the applicant is accordingly disposed off.
6. In view of the above stated facts we pronounce the ruling as under:—
RULING
1. The activities performed under the ‘Comprehensive Maintenance Con-
tract’ are to be treated as a composite supply of services and the activities
performed under ‘Equipment Parts Supply and Services Agreement’ are
to be treated as Mixed Supply.
2. In respect of the activities performed under ‘Comprehensive Maintenance
Contract’, the supply of Operation & Maintenance services is the principal
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supply and the supply of other services are ancillary to such principal
supply.
3. The service code for Maintenance and repair services of commercial and
industrial machinery is 9987171 and the prescribed rate of GST is 18%
(CGST @ 9% of the taxable value, SGST @ 9% of the taxable value) or IGST
@ 18% of the taxable value. For the supply of mixed services, the applicant
is liable to pay the highest rate of tax as per Section 8(b) of the CGST Act,
2017.
4. As the query raised by the applicant does not fall in the categories
mentioned under Section 97(2) of CGST/SGST Act, 2017, hence the same
is accordingly disposed off.
nn
[2019] 71 GST 188/[2018] 100 taxmann.com 122 (AAR - Maharashtra)

AUTHORITY FOR ADVANCE RULING, MAHARASHTRA
SST Sustainable Transport Solutions India (P.) Ltd., In re
B.V. BORHADE AND PANKAJ KUMAR, MEMBER
NO. GST-ARA-68/2018-19/B-129
OCTOBER 15, 2018
Where assessee was rendering services to State Municipal Corporation by

way of giving out on rent/hire, buses, which were further used by Corporation
for transportation of passengers, such renting of buses by assessee would fall
under Sr. 10, Heading No. 9966 of Notification No. 11/2017-Central Tax
(Rate), dated 28-6-2017
Classification of service - Maharashtra Goods and Services Tax Act, 2017 -

Rental service - Heading No. 9966 - Whether where assessee was rendering
services to State Municipal Corporation by giving buses on rent/hire, which
were further used by Corporation for transportation of passengers, such
renting of buses by assessee would fall under Sr. 10, Heading No. 9966 of
Notification No. 11/2017/Central Tax (Rate), dated 28-6-2017, which reads as
‘rental service of transport vehicles with or without operator’, and would
attract 9 per cent CGST and SGST each - Held, yes [Para 6]
Circulars and Notifications: Notification No. 11/2017-Central Tax (Rate),
dated 28-6-2017 and Maharashtra GST Notification No. 12/2017 - State Tax
(Rate), dated 29-6-2017
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2019 SST Sustainable Transport Solutions (I.) (P.) Ltd., In re (AAR - Mah.) 189
(NR)
FACTS
n The assessee was engaged in the business to undertake and carry on the
activity of providing all kind of services in the nature of plying, hiring,
operation and comprehensive maintenance of buses.
n The assessee had entered into an agreement i.e. Service Provider Agreement
with Nagpur Municipal Corporation (NMC) for ‘Operation and maintenance
of AC Green Buses Running on Bio Ethanol Fuel for Nagpur Urban Region’.
n As per the agreement, assessee was providing the Services of Running AC
Green City Buses for Transport of General Public and for the same NMC was
paying the Service Charges calculated as per agreement on the Total Run
effective kilometers and NMC collects the fare from the passengers.
n For the transportation of passengers, assessee provide services, such as,
Providing bus with driver: Providing fuel for the buses; Repair and mainte-
nance of the buses.
n Since the NMC has received a clarification from the department that the
services provided by them i.e., transportation of passenger, are not taxable
under the GST laws they are refusing to pay GST to the applicant on hiring
charges paid. Thus the applicant has raised the question that ‘Under which
Chapter Heading/Service Code our activity will classify?’
HELD
n The assessee was providing the Buses along with driver, fuel and mainte-
nance for use of general public at large.
n As per Sl. No. 10(ii) of Notification No. 11/2016/Central Tax (Rate), dated 28-
6-2017, which reads as ‘rental service of transport vehicles with or without
operators, other than motor cab, are liable to tax at the rate of 9 per cent
SGST. [Para 5]
n The activity undertaken by the applicant in the instant case is supply of
services and will be classified under Sl. No. 10(ii), Heading 9966 of the
Notification No. 11/2017 - Central Tax (Rate), dated 28-6-2017. [Para 6]
CASES REFERRED TO
State of Tripura v. Tripura Bus Syndicate 2001 taxmann.com 1955 (Gauhati) (para 2),
Godavari Finance Co. v. Degala Satyanarayanamma [2008] 5 SCC 107 (para 2), Rajasthan
State Road Transport Corpn. v. Kailash Nath Kothari [1997] 7 SCC 481 (para 2), G.S.
Lamba & Sons v. State of Andhra Pradesh [2012] 21 taxmann.com 559 (AP) (para 2), K.C.
Behera v. State of Orissa [1991] 83 STC 325 (SC) (para 2), Kotak Mahindra Finance Ltd.
v. Dy. CIT [2003] 130 Taxman 422/[2004] 265 ITR 114 (Bom.) (para 2) and Melluish
(Inspector of Taxes) v. BMI (No. 9) Ltd. [1996] 218 ITR 547 (HL) (para 2).
PROCEEDINGS
The present application has been filed under section 97 of the Central Goods
and Services Tax Act, 2017 and the Maharashtra Goods and Services Tax Act,
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2017 [hereinafter referred to as “the CGST Act and MGST Act”] by SST
SUSTAINABLE TRANSPORT SOLUTIONS INDIA PRIVATE LIMITED, the
applicant, seeking an advance ruling in respect of the following ISSUE.
Under which Chapter Heading/Service Code our activity will classify ?
At the outset, we would like to make it clear that the provisions of both the CGST
Act and the MGST Act are the same except for certain provisions. Therefore,
unless a mention is specifically made to such dissimilar provisions, a reference
to the CGST Act would also mean a reference to the same provision under the
MGST Act. Further to the earlier, henceforth for the purposes of this Advance
Ruling, a reference to such a similar provision under the CGST Act/MGST Act
would be mentioned as being under the “GST Act”.
2. Facts and Contention - As Per The Applicant
The submissions, as reproduced verbatim, could be seen thus—
We, M/s. SST SUSTAINABLE TRANSPORT SOLUTIONS INDIA PRIVATE
LIMITED, a private limited company having its Registered office at Plot No. C-
49, Hingna Road, MIDC, Nagpur-440028 had entered into an agreement i.e.
Service Provider Agreement dated 18/08/2017 with Nagpur Municipal Corpo-
ration (NMC) for “Operation and maintenance of AC Green Buses Running on
Bio Ethanol Fuel for Nagpur Urban Region”.
As per the agreement we are providing the Services of Running AC Green City
Buses for Transport of General Public and for the same NMC is paying us the
Service Charges calculated as per agreement on the Total Run effective
kilometers and NMC collects the fare from the passengers.
We are providing following services relating to the transportation of passengers
1. Providing Bus with Driver.
2. Providing Fuel for the Buses.
3. Repair & maintenance of the buses.
4. We have established own workshop and service station for maintenance
of the buses.
5. The NMC is paying us the Service Charges on the basis of per Effective Run
kilometres.
6. The rout of the Buses & the applicable fare is decided and collected by the
NMC.
As per the above it is clear that we are providing Services to NMC by providing
the Buses along with Driver, Fuel & Maintenance for use of General Public at
Large.
We have to start billing for the services and as per the discussions with the
Accounts Officer of NMC, the GST applicable for the Green Bus Operations is
Nil.
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We want to confirm from your office that under which Chapter Heading/
Service Code our above activity will classify.
As per our interpretation and looking to the services provided by us to the
General Public at Large, the same should classify under chapter heading 9966
i.e. Services by way of giving on hire - (a) to a state transport undertaking, a
motor vehicle meant to carry more than twelve Passengers; or (b) to a goods
transport agency, a means of transportation of goods, (c) motor vehicle for
transport of students, faculty and staff, to a person providing services of
transportation of students, faculty and staff to an educational institution
providing services by way of pre-school education and education upto higher
secondary school or equivalent.
Kindly give your confirmation about the classification of our activity on the
basis of the above and as per our Agreement with NMC, Copy of which is
enclosed herewith for your perusal.
Statement containing the applicant’s interpretation of law and/or facts, as the
case may be, in respect of the aforesaid question(s) (i.e. applicant’s view point
and submissions on issues on which the advance ruling is sought). BRIEF
HISTORY OF THE CASE
M/s. SST Sustainable Transport Solutions India Private Limited (service
provider) is a private Limited Company having registered place of business at
plot No. C-19, Hingna Road, MIDC, Nagpur- 440028.
The Nagpur Municipal Corporation has been entrusted the task of implement-
ing the AC Green Buses and for this purpose it sought service provider for
Purchase, Supply, Operation, Maintenance etc. of AC Green Buses. The com-
pany had entered into an Agreement with Nagpur Municipal Corporation
(NMC) for Operation and maintenance of AC Green Buses Run on Bio Ethanol
Fuel for Nagpur Urban Region. The agreement was executed on 18th Aug, 2017.
(A) Relevant clauses of the Agreement:
(a) Relevant obligations of service provider:
1. Providing Bus with Driver, (clause 2.5.2a & clause 4.1.w)
2. Providing Fuel for Buses, (clause 4.1c)
3. Repair & maintenance of the Buses,
4. The service provider shall operate and maintain the Bus provided for AC
Green Buses Service in accordance with the basic requirements of the
Scope of work, and requirements for operation schedules on trips/routes
in area as prescribed/directed by NMC (clause 4.8 a)
Service provider has right to receive payment of hiring charges from NMC
(clause 5.1.a)
(b) The main obligations of the NMC are
1. The NMC is required to pay Service Charges on the basis of per Effective
Run Kilometers. As per clauses 3.1, 3.2, 3.3 of the agreement,
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2. NMC would provide certain premises for set up the parking yard and
facilities to operate and maintenance of buses as per clause 4.2 of the
agreement,
3. NMC would provide the space for fuel filling stations,
4. NMC shall have complete and full right for collection of fare for the Bus
Service and to determine and implement methodology for the same,
(clause 7.1h)
(c) Joint responsibilities:
Clause 3.3.1 provides for joint responsibility to pay taxes and statutory charges
related to Bus Services would be divided between the NMC and the service
provider however the clause is silent about payment of SGST-CGST/IGST.
Thus as per the provisions of Goods and Services Tax statute the legitimate
taxes would be collected by the service provider from NMC and will pay the
same.
(B) NATURE OF TRANSACTION
1. Whether transfer of right to use any goods for any purpose
Your applicant is engage in supplying ‘AC Green Buses’ to Nagpur Municipal
Corporation, on the basis of operation, repairs & maintenance, providing
drivers, etc. in accordance with the basic requirements of the Scope of work,
and requirements for operation schedules on trips/routs in area as prescribed/
directed by NMC, Prima facie it seems that the transaction would be of the
nature of transfer of right to use any goods for any purpose.
Such interpretation could be derived on the lines of judgment in case of State
of Tripura v. Tripura Bus Syndicate 2001 taxmann.com 1955 (Gauhati), and in
the case of Godavari Finance Co. v. Degala Satyanarayanamma [2008] 5 SCC 107
it is observed that though the drivers were the employee of the owner of the
vehicle they have to follow the directions and instructions of the transferee and
thus the vehicles under the effective control of the hirer. In the case of
Rajasthan State Road Transport Corpn. v. Kailash Nath Kothari [1997] 7 SCC
481, while deciding the case of compensation, Supreme Court has observed that
notwithstanding the fact that the driver would continue to be on the pay roll of
the owner, he has to act under the instructions, control and command of the
conductor and other officers and the effective control is transferred to hirer.
Reference can also be made to the case of G.S. Lamba & Sons v. State of Andhra
Pradesh [2012] 21 taxmann.com 559 (AP) where in Hon’ble Andhra Pradesh
High Court has discussed catena of decisions to elaborate the deem sale
transfer of right to use goods, one of the case cited by the court is of K.C. Behera
v. State of Orissa [1991] 83 STC 325 (SC) where the court has observed “Buses-
bus hired out to State Transport Corporation the contract disentitled from
using the vehicle covered by the agreement in any route. The Bus was to be run
for Corporation as per the agreement and directions of an officer. The transac-
tion is a “sale” within the extended meaning of the word. Providing of driver by
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the owner notwithstanding there was a transfer of the right to use bus for
consideration, and effective control and possession of the bus vested in the
Corporation.” The case is identical to the facts of the present issue. The High
Court in the case of G.S. Lamba & Sons (supra), has lead down the parameters
of transactions for transfer of right to use goods, the relevant essential
requirements are reproduced here “(iv) the effective or general control does not
mean always physical control and even if the manner, method, modification
modalities and time of use of goods; and (v) the approvals, concessions, licences
or permit in relation to goods would also available to the user of the goods even
if such licences or permits are in the name of the owner (transferor) of the
goods, and (vi) during the period of contract exclusive right to use goods along
with permits, licences, etc vests in the lessee.’ It is also pertinent to mentioned
here that logo of NMC is pasted on the vehicle provided to NMC thus the ratio
decidendee of G.S. Lamba & Sons (supra) case is squarely applicable to the
present issue.
In light of the position of law there is a possibility that the transaction is of the
nature of transfer of right to use any goods for any purpose cannot be denied.
2. Whether Hiring charges:
The applicant is engaged in the business to undertake and carry on the activity
of providing all kind of services in the nature of plying, hiring, operation and
comprehensive maintenance of buses. To operate and maintain buses supplied
as per the route plan and schedule of trips as per the directions of the
Corporation, Make arrangements for fuel, drivers and skilled staff for operation
and maintenance etc. Claim hiring charges from NMC. Thus the charges for the
operation as a whole would be ‘Hiring charges’ claim on kilometer basis.
(C) Cause of Advance ruling:
Nagpur Municipal Corporation through its communication letter No. Trans-
port/885/2017 dated 30/12/2017 [copy of the letter is annexed hereto and
marked as Exhibit -I] had informed the service provider that the corporation
had obtained clarification from the Joint Commissioner of Central Excise,
Customs and Service Tax, Nagpur bearing No. IV/(16)30-6/GST/2017 dated
23/08/2017 [copy of the letter is annexed hereto and marked as Exhibit-II]. The
relevant part of the communication made by the Joint Commissioner of Central
Excise, Customs and Service Tax, Nagpur dated 23/08/2017 is reproduced
verbatim hereunder—
“This is to confirm that as per Sl. No.15 of the Notification No.12 of 2017- Central
Tax (Rate), dated 28.06.2017, stage carriage other than air-conditioned stage
carriage attracts “NIL” rate of GST.” In response to the communication of CMC
dated 30/12/2017 the company had filed return reply through letter dated 12 Feb.
2018 [the copy of the letter is annexed hereto and marked as Exhibit -III] which
states that the clarification issued by the Joint Commissioner is in respect of the
transaction of supply between the Corporation and the passengers-traveller to
whom the Corporation would charge fare charges.
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Sr. No. 15(c) of the Notification No. 12/2017- State Tax (Rate), dated 29th June,
2017 read thus “stage carriage other than Air-conditioned stage carriage -rate of
tax Nil” [the copy of Notification is annexed hereto and marked as exhibit-IV]
It is pertinent to mention here that the ‘Green Bus’ provided to the Corporation is
Air-Conditioned Bus and the entry for tax rate is specifically for ‘other than air-
conditioned stage carriage’. Secondly the entry is for supply transaction for
‘Transport of passengers’ not for leasing or hiring transaction. The nature of
transaction between the service provider and the Corporation is of the nature of
leasing/renting supply and not of charging fair to the passengers. The “Green Bus
Contract Agreement” dated 18th August, 2017 (hereinafter called as ‘the Agree-
ment’) [the copy of the Agreement is annexed hereto and marked as Exhibit -V]
provides NMC to collect fare from the commuters as per clause 7.1.h. Thus the
entry referred by the Corporation does not cover the transaction between the
service provider and the corporation.
It was informed to the Corporation that the transaction would cover under SR. No.
8(vii) of the Notification No.11/2017-State Tax (Rate), dated 29th June, 2017 [the
copy of Notification is annexed hereto and marked as Exhibit -VI] which read as
“Passenger transport service other than (i), (ii), (iii), (iv), (v) and (vi) above - rate of
CGST -9%”
The Corporation did not agree with the said rate and stickup to its earlier stand,
this has been communicated by the Corporation through its letter dated 21/06/
2018 [the copy of the letter is annexed hereto and marked as exhibit -VII
(D) SUBMISSION:
Your applicant, to know the correct rate of tax on the transaction of supply
between the service provider and NMC and desires advance ruling under sub-
section (1) of section 97 of the Maharashtra Goods and Services Tax Act, 2017.
Accordingly, has filed an application in form GST ARA-01 on 03/07/2018 under
Application Reference No. AD270718000170G. Your applicant had made re-
quired payment under Payment Reference Number-IP2707180000010. And
sought advance ruling under clause (a) of sub-section (2) of section 97 of the
MGST Act, 2017.
In this connection your applicant submits that—
(1) The communication from the Joint Commissioner of Central Excise, Customs
and Service Tax, Nagpur through letter No. IV/(16)30-6/GST/2017 dated 23/08/
2017 stating that the transaction would attract ‘Nil’ GST as per Sr. No.15 of the
Notification No.12 of 2017- Central Tax (Rate), dated 28.06.2017, stage carriage
other than air-conditioned stage carriage is not applicable to the transaction
between the applicant and the NMC. NMC cannot give reference of the commu-
nication of the Joint Commissioner as it is not relevant in the present issue.
The reliance on the communication of the Joint Commissioner is unwarranted
and misleading. For the reasons that, the ‘Green Bus’ provided to the Corporation
is Air-Conditioned Bus and the entry 15 of the notification for tax rate is specifically
for ‘other than air-conditioned stage carriage’. Secondly the entry is for supply
transaction where ‘Transport of passengers’ is the recipient of services and not for
leasing or hiring transaction. The nature of transaction between the service
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provider and the Corporation is of the nature of leasing/renting supply and not of
charging fare to the passengers.
(2) Your applicant desires advance ruling whether the transaction would be
classifiable under Sl. No. 10(ii) of the Notification No. 11/2017- State Tax (Rate),
dated 29th June, 2017 liable to tax @ 9%. Which reads as “rental service of transport
vehicles with or without operators, other than (i) above liable to tax @ 9% SGST.
classifiable under Sl. No. 8(vii) of the Notification No. 11/2017- State Tax (Rate),
dated 29th June, 2017 liable to tax @ 9%. Which reads as Passenger transport
service other than (i), (ii), (iii), (iv), (v) and (vi) liable to tax @ 9% SGST.
(4) Your applicant desires to know whether the transaction would be classifiable
under sub-clause (f) of clause 5 of Schedule II appended to the MSGST Act, 2017
[copy of schedule II is annexed hereto and mark as exhibit-VIII] which reads as “(f)
transfer of the right to use any goods for any purpose (whether or not for a
specified period) for cash, deferred payment or other valuable consideration”. If
the transaction is of the nature of transfer of the right to use any goods for any
purpose, your applicant desires advance ruling whether it is classifiable under Sl.
No. 15(ii) of the Notification No. 11/2017-State Tax (Rate), dated 29th June, 2017.
classifiable under Sl. No. 22(a) of the Notification No.12/2017- State Tax (Rate)
dated 29th June, 2017. Which reads as “Service by way of giving on hire- (a) to a
state transport undertaking, a motor vehicle meant to carry more than twelve
passengers; or” liable to tax at Nil rate.
(6)** ** **
NOTE ON INTERPRETATION ON NOTIFICATION ENTRIES FOR RATE OF
TAX in respect of the contract between SST Sustainable Transport Solutions
and NMC
NOTIFICATION NO. 11/2017 DATED 29/06/2017
No. 8(ii) “transport of passengers with or without accompanied belongings by-
2.5% SGST
(a) Air-conditioned contract carriage other than motor cab
(b) Air-conditioned stage carriage
(c) Radio taxi
Expln- (a) ‘contract carriage’ has the meaning assigned to it in clause (7) of
section 2 of the MVA, 1988 (59 of 1988),
(b) ‘stage carriage’ has the meaning assigned to it in clause (40) of section 2 of
the MVA, 1988 (59 of 1988),
This entry is in respect of transport of passengers, SST is not entered in to the
contract to transport the passengers but to providing vehicles and related
services to NMC, the entry is therefore not applicable to the transactions
between SST and NMC
No. 8 (vii) “Passenger transport service other than (i), (ii), (iii), (iv), (v) and (vi)
above-rate of SGST-9%
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This entry is in respect of transport of passengers, SST is not entered in to the

contract to transport the passengers but to providing vehicles and related
services to NMC, the entry is therefore not applicable to the transactions
between SST and NMC
“stage carriage” means a motor vehicle constructed or adapted to carry more than
six passengers excluding the driver for hire or reward at separate fares paid by or
for individual passengers, either for the whole journey or for stages of the journey”
“contract carriage” means a motor vehicle which carries a passenger or passenger
or passengers for hire or reward and is engaged under a contract, whether
expressed or implied, for the use of such vehicle as a whole for the carriage of
passengers mentioned therein and entered into by a person with a holder of a
permit in relation to such vehicle or any person authorized by him in this behalf
on a fixed or an agreed rate or sum—
a. on a time basis, whether or not with reference to any route or distance; or
b. from one point to another, and in either case, without stopping to pick up or
set down passengers not included in the contract anywhere during the
journey, and includes—
i. a maxicab; and
ii. a motor cab notwithstanding that separate fares are charged for its
passengers;
Sl. No. 10(ii) “rental service of transport vehicles with or without operators,
other than (i) above liable to tax @9% SGST
The company is under the belief that the transaction would cover under this
entry, however it is not clear as to whether the transaction would fall to cover
as rental services or leasing of vehicle.
Sl. No. 15(ii) of the Notification No. 11/2017-State Tax (Rate), dated 29th June,
2017 read with schedule II appended to MGST Act “(f) transfer of the right to
use any goods for any purpose (whether or not for a specified period) for cash,
deferred payment or other valuable consideration,” The rate of tax would be the
same rate of MGST for supply of like goods involved in transfer of title in goods.
Your applicant is engaged in supplying ‘AC Green Bus’ to Nagpur Municipal
Corporation, on the basis of operation, repairs & maintenance, providing
drivers, etc. in accordance with the basic requirements of the scope of work,
and requirements for operation schedules on trips/routs in area as prescribed/
directed by NMC. Prima facie it seems that the transaction would be of the
nature of transfer of right to use any goods for any purpose.
Such interpretation could be derived on the lines of judgment in case Tripura
Syndicate Bus (supra) and in the case of Godavari Finance Co. (supra) it is
observed that though the drivers were the employee of the owner of the vehicle
they have to follow the directions and instructions of the transferee and thus
the vehicles under the effective control of the hirer. In the case of Rajasthan
State Road Transport Corpn. (supra) while deciding the case of compensation,
Supreme Court has observed that notwithstanding the fact that the driver
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would continue to be on the pay roll of the owner, he has to act under the
instructions, control and command of the conductor and other officers and the
effective control is transferred to hirer. In light of the position of law there is a
possibility that the transaction is of the nature of transfer of right to use any
goods for any purpose cannot be denied.
Notification No. 12/2017- State Tax (Rate), dated 29th June, 2017.
Sl. No. 22(a) Which reads as “Service by way of giving on hire- (a) to a state
transport undertaking, a motor vehicle meant to carry more than twelve
passengers; or” liable to tax at Nil rate. This entry would be for hiring services
the question whether the classification of transaction is of the nature of hiring
services. In a lease, ownership lies with the lessor. The lessee has the right to use
the equipment and does not have the option to purchase. Whereas in hire
purchase, the hirer has the option to purchase. The hirer becomes the owner of
the asset/equipment immediately after the last instalment is paid. In the case
of Kotak Mahindra Finance Ltd. v. Dy. CIT [2003] 130 Taxman 422/[2004] 265
ITR 114 the Hon’ble Bombay High Court has held that:
“There is a basic difference between “lease” and “hire”. This difference is borne out
by the basic difference in the meaning of the expression “property” and the
expression “possession”. A transaction of hire is essentially a contract of Bailment
of a vehicle. In the case of a hire, only a license is given to the Hirer to use the vehicle
for a temporary period the vehicle so hired - Melluish (Inspector of Taxes) v. BMI
(No. 9) Ltd. [1996] 218 ITR 547 (HL). In the case of hire, the hirer has an option to
buy the equipment which is one of the main distinguishing feature between the
words “hire” and “lease”. However, it is argued on behalf of the assessee that for the
purposes of the above Entry, the word “hire” and the word “lease” should be read
as equivalent. We do not find any merit in this argument.”
From the conjoint reading of the agreement it seems that the agreement is not
for hiring of AC Green buses. Considering this aspect possibly the transaction
may not fall to cover under entry Sl. No. 22(a) Which reads as “Service by way
of giving on hire- (a) to a state transport undertaking, a motor vehicle meant to
carry more than twelve passengers; or” covered under Notification No. 12 of
2017 State Tax (Rate), dated 29/06/2017.
3. Contention - As Per the Concerned Officer
The submission, as reproduced verbatim, could be seen thus-
In the present case, the applicant, M/s. SST Sustainable Transport Solutions
India Pvt., Ltd., MIDC, Hingna Nagpur, has represented before the authority for
advance ruling regarding classification of their services.
In their application, M/s. SST Sustainable Transport Solutions India Pvt., Ltd.,
MIDC, Hingna Nagpur has informed that they have entered into a contract with
Nagpur Municipal Corporation (Body constituted under Govt. of Maharashtra)
for “operation and Maintenance of AC Green Buses run on Bio Ethanol Fuel for
Nagpur Urban Region” and are providing services relating to transport of
passengers in following aspect.
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1. Providing Bus with Driver

2. Providing fuel for buses
3. Repair and Maintenance of Buses
4. This operator has set up Workshop and Service station for maintenance
of buses
5. The NMC pays to M/s. SST Sustainable Solutions India Pvt. Ltd. rate as per
effective run kilometres.
6. The route and the fare is decided and collected by NMC.
Further the appellant claims that the service should be classifiable under
Chapter Heading 9966-Services by way of giving on hire to a State Transport
undertaking, a Motor Vehicle meant to carry more than 12 passengers, does not
appears to be correct as the vehicles are rented to NMC which is not a state
transport undertaking.
The contention of appellant does not appear to be correct as the vehicles are
rented to NMC which is a body constituted under Govt. of Maharashtra and not
a State Transport undertaking.
Looking into the nature services provided by the appellant to NMC this office
is of the view that the services are of the nature of Motor Cab (Motor vehicle
designed to carry passengers) where the cost of fuel is included in the consid-
eration charge from the service recipient and falls under service code 996601
attracting GST @ 5% (with no ITC) or 12% (with ITC) [Notification No. 31/2017-
Central Tax (Rate), dated 13.10.2017].
4. Hearing
The case was taken up for Preliminary hearing on dated 11.09.2018 when Sh.
Sanjay Gadkari, GST Practitioner along with Sh. Sopan Jachak, Sh. Ashish
Sharma, Company Secretary and Sh. Varad Gokhale operation manager
appeared and requested for admission of application as per contentions in their
ARA. Nobody was present form the side of Jurisdictional Officer.
The application was admitted and called for final hearing on 19.09.2018, Sh.
Sanjay Gadkari, GST Practitioner along with Sh. Sopan Jachak, Sh. Varad
Gokhale operation Manager and Sh. Manish Agarwal, CA. appeared and made
oral and written submissions. Jurisdictional Officer, Sh. Paras Chaure, Supt.
Principal Commissioner of GST, Nagpur appeared and made written submis-
sions.
5. Observations
We have gone through the facts of the case, documents on record and the
submissions made by both, the applicant as well as the department.
From the submissions made by the applicant we find that the issue is pertaining
to buses which are hired by the NMC from the applicant The facts are that the
applicant has entered into an agreement with NMC and as per the agreement
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they are providing the Services of Running AC Green City Buses for Transport
of General Public, for which NMC is paying them Service Charges calculated on
the Total Run effective kilometers and the fare from the passengers is collected
by NMC. The applicant has submitted that they are providing the Buses along
with Driver, Fuel & Maintenance for use of General Public at Large which can
be seen from the following :—
1. They are providing Bus with Driver to NMC for transportation of passen-
gers.
2. They are also providing fuel for the Buses.
3. Repair & maintenance of the buses are also undertaken by the applicant
for which they have their own workshop and service station.
4. NMC is paying to the applicant, Service Charges on the basis of per
Effective Run kilometres.
5. The route of the Buses & the applicable fare is decided and collected by
the NMC from the passengers.
From the above it is clearly seen that NMC is providing transportation services
to the passengers and the applicant, for such transportation, is supplying to
NMC Buses along with drivers, fuels, maintenance, etc. In effect we find that
there is no connection between the applicant and the passengers. We find that
the applicant is just hiring out these AC Buses to NMC and we also find that the
effective control is with the applicant so far as the Buses are concerned which
are provided to NMC. We also find Bus Routes are decided by NMC as also the
Bus Fares, which are collected from the passengers. Hence it is crystal clear that
in the subject case the transaction would be of the nature of transfer of right
to use any goods and the amounts received by them on kilometer basis would
be considered as hiring charges.
It has been rightly pointed out by the applicant that the nature of transaction
between the applicant and NMC is of the nature of leasing/renting supply and
not of charging fare to the passengers. Since the NMC has received a clarifica-
tion from the department that the services provided by them i.e. transportation
of passengers, are not taxable under the GST laws they are refusing to pay GST
to the applicant on hiring charges paid. Thus the applicant has raised the
question as follows:—
“ Under which Chapter Heading/Service Code our activity will classify?”
We now take up the issue/question raised by the applicant as under:—
As per sub-clause (f) of clause 5 of Schedule II appended to both, the CGST Act,
2017 and the MGST Act, 2017 “transfer of the right to use any goods for any
purpose (whether or not for a specified period) for cash, deferred payment or
other valuable consideration: would be considered as Supply of Services.
In the subject case the applicant vide Service Provider Agreement entered into
by them with NMC have transferred of right to use the goods i.e. AC Buses
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belonging to them. The said rights as per the agreement have been transferred
to NMC for a period of 15 years from the commercial operations date (COD).
COD in the agreement has been defined as the date on which period of 6 months
are completed from the date of execution of the agreement. From the terms of
payment mentioned in the agreement between the applicant and NMC it is seen
that:
i. NMC shall pay to the applicant an amount on the basis of kilometers logged
by the AC Buses.
ii. The applicant shall submit invoice at the end of each 10 days and NMC,
within 15 days of receipt of invoice shall verify the same and make
payments.
iii. NMC has given a guarantee that the Buses so provided to them would
travel a number of kilometers not less than 68,000 kilometers per Bus per
year.
iv. There is an annual assured payment to be made by NMC to the applicant
if the minimum number of kilometers are not travelled.
v. There is also a clause for payment for excess kilometers travelled by the
said Buses and finally.
vi. There is also a clause for revision of kilometer charges.
In view of the terms of the agreement it is very clear that in the subject case
there is transfer of the right to use any goods (Buses) for any purpose i.e. for
transportation purpose and for a specified period of 15 years for cash. Thus as
per sub-clause (f) of clause 5 of Schedule II appended to both, the CGST Act,
2017 and the MGST Act, 2017 the subject activity of the applicant would be
considered as Supply of Services.
Now we shall arrive at the rate of tax that the applicant would have to discharge
on amounts received by them for such services rendered by them.
The relevant clause of Notification No. 11/2017-Central Tax (Rate) dated
28.06.2017 is reproduced
Sl. Chapter Section Description of Service Rate Condition

No. or Heading
(1) (2) (3) (4) (5)
10 Heading 9966
(Rental services (i) Renting of motorcab whe- 2.5 Provided that credit of
of transport ve- re the cost of fuel is included input tax charged on
hicles) in the consideration charged goods and services used
from the service recipient in supplying the service
has not been taken
[Please refer to Explana-
tion No. (iv)]
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Sl. Chapter Section Description of Service Rate Condition

No. or Heading
(1) (2) (3) (4) (5)
(ii) Rental services of transport 9 —
vehicles with or without oper-
ators, other than (i) above.
The parallel Sr. No. 10 in Notification No. 11/2017-State Tax (Rate), dated
29.06.2017, mentioned by the applicant is the same.
From the discussions above we find that the applicant is rendering services to
NMC by way of giving out on rent/hire, Buses which are further used by NMC
for transportation of passengers. Such renting of Buses by the applicant
squarely falls under Sr. No. 10, Heading No. 9966 sub-clause (ii) as rental Service
of transport vehicles, in this case with operators and therefore attracts CGST
and SGST @ 9% each on remuneration received for such services rendered by
the applicant.
Here we may also add that the correspondence dated 23.08.2017 made by the
department to confirm that as per Sl. No. 15(c) of Notification No. 12 of 2017-
CentraI tax (Rate), dated 28.06.2017, stage carriage other than air-conditioned
stage carriage attract “NIL” rate of GST is applicable to NMC on their further
services provided to passenger by way of transportation, The service rendered
by the applicant to NMC by way of renting of AC Buses are covered under Sr.
No. 10, Heading No 9966 sub-clause (ii) as mentioned and discussed above and
are therefore taxable.
06 In view of the extensive deliberations as held hereinabove, we pass an order
as follows :
ORDER
For reasons as discussed in the body of the order, the questions are answered
thus —
Question:- Under which Chapter Heading/Service Code our activity will clas-
sify ?
Answer :- The activity undertaken by the applicant in the subject case is supply
of services and will be classified under Sl. No. 10(ii), Heading 9966 of the
Notification No. 11/2017-CentraI Tax (Rate) dated 28th June, 2017.
nn
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[2019] 71 GST 202/[2018] 100 taxmann.com 16 (AAR- Uttarakhand)

AUTHORITY FOR ADVANCE RULING, UTTARAKHAND
NHPC Ltd., In re*
VIPIN CHANDRA AND AMIT GUPTA, MEMBER
RULING NO. 10/2018-19
APPLICATION NO. 11/2018-19
OCTOBER 22, 2018
Where applicant-company has been entrusted with contract for construction

of road by Government and funds will be provided to NHPC in form of grants,
applicant, being a Government company, is entitled to exemption under
Notification No. 12/2017 - Central Tax (Rate) dated 28-6-2017
Classification of services - Construction service - Chapter 99 - Section 7 of the

Central Goods and Services Tax Act, 2017/Section 7 of the Uttarakhand
Goods and Services Tax Act, 2017 - Supply - Scope of - Whether applicant-
company (NHPC) falls under definition of ‘Government entity’ inasmuch as
at time of establishment of company President of India and its nominees hold
100 per cent equity shares of company - Held, yes - NHPC has been entrusted
with work of construction of road by Ministry of External Affairs, Govt. of
India wherein funds will be provided by MEA to NHPC in form of grants -
NHPC has sub-contracted said work to PWD - Whether applicant, being a
Government company, has fulfilled all required criteria which leads their
activity to exemption under Notification No. 12/2017 - Central Tax (Rate),
dated 28-6-2017 and, accordingly supply of service by NHPC to MEA is an
exempt service - Held, yes - Whether further since original supply of service,
i.e., work contract is exempted, sub-letting of same to PWD is also exempt -
Held, yes [Para 8] [In favour of assessee]
Circulars & Notifications: Notification No. 12/2017-Central Tax (Rate), dated
28-6-2017; Notification No. 13/2017-Central Tax (Rate), dated 28-6-2017
(NR)
FACTS
n Applicant-company NHPC has been entrusted with the work of construction

of road by Ministry of External Affairs, Govt. of India (‘MEA’) wherein the
funds will be provided by MEA to NHPC in the form of grants. The function
of NHPC in the said work has been defined as ‘implementing agency’.
Further, NHPC has sub-contracted said work to PWD, Uttarakhand.
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2019 NHPC Ltd., In re (AAR - Uttarakhand) 203
n The applicant seeks advance ruling on issue:- whether NHPC are required to
pay GST under reverse charge in terms of Notification No. 13/2017, dated 28-
6-2017 while making payment to PWD, Uttarakhand for construction of
road.
HELD
n In India, there are various entities ‘established’ by the Government by way

of 90 per cent or more participation in equity or control; however, after the
‘establishment’ of such entities, the Government participation by way of
equity or control is usually diluted to less than 90 per cent. The definition of
‘Government entity’ merely contemplates that an entity is required to be
‘established’ by the Government by way of 90 per cent or more equity or
control. The definition does not contemplate continuous fulfilment of such
requirement post ‘establishment’ of the entity. Therefore, the intention of the
above amended notification is to enlarge the scope of the definition to cover
Government Companies incorporated under the Companies Act also within
the ambit of the definition of ‘Government entity’. Thus, if the criterion is
fulfilled, at the time of ‘establishment’ by way of 90 per cent or more
Government participation in the equity or by way of control, the entity would
be considered as ‘Government entity’, within the meaning assigned under the
said amended notification. Accordingly, NHPC falls under the definition of
‘Government entity’ inasmuch as at the time of establishment of the com-
pany the President of India and its nominees hold 100 per cent equity shares
of the company. [Para 7]
n There can be no ‘government entity’ if the very essential ingredients for being
recognized as a ‘government entity’ gets lost over a period of time and the
control or equity by way of 90 per cent or more does not vest with the
Government. A company or a society or a trust in addition to a authority or
a board may continue to be in existence as they get incorporated and brought
into existence under different Acts and law, for example a Company gets
incorporated under the Companies Act, a society gets incorporated under
Societies Registration Act etc., however such a incorporated legal entity/
person cannot claim the benefits or rights which are extended in favour of
such incorporated bodies recognizing them as ‘Government Entity’ until and
unless they continue to fulfil the requirements for being recognized as
Government Entity, as per law. [Para 7]
n The applicant has fulfilled all the required criteria which leads their activity
to exemption under Notification No. 12/2017 - Central Tax (Rate), dated 28-
6-2017 (as amended time to time) and, accordingly, the supply of service by
NHPC to Ministry of External Affairs, Govt. of India is an exempted service.
Since original supply of service i.e. work contract is exempted, therefore, sub-
letting of the same is also exempted.
n The recommendations on GST Rate Changes makes it clear that if GST rate
on the work contract is 12 per cent or 5 per cent, then sub-contractor is also
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liable to discharge his GST liability at the rate of 12 per cent or 5 per cent as
the case may be. Similarly if GST rate on the said work contract is exempted
or 0 per cent, then supply of service in the form of work contract by the sub-
contractor will also come in the purview of exempted or 0 per cent. Thus, if
the principal contractor is providing an exempt works contract service to
Government and in such case if works contract is partially or wholly sub-
contracted then the sub-contractor would also be exempt from payment of
GST.
n In the instant case, NHPC is providing services to Central Government i.e.,
Ministry of External Affairs and will attract GST at the rate of 12 per cent but
by virtue of Notification No. 12/2017 - Central Tax (Rate), dated 28-6-2017 (as
amended time to time), the supply of service in question as is exempted, thus
sub-contracting of the said work contract to PWD, Govt. of Uttarakhand is
also exempted.
n In view of the above, that the said activity comes under the purview of
exempted category and, therefore, question of payment of GST under
reverse charge in terms of Notification No. 13/2017 - Central Tax (Rate),
dated 28-6-2017 does not arise. [Para 7]
N.K. Gupta, Sr. Manager and J.C. Pant Manager (Law) for the Applicant.
RULING
1. This is an application under Sub-Section (1) of Section 97 of the CGST/SGST

Act, 2017 (hereinafter referred to as Act) and the rules made thereunder filed
by M/s. NHPC, Admin Building, Tanakpur. Power Station, Banbasa, Uttarakhand
seeking an advance ruling on following issues:
(a) Whether they are required to pay GST under reverse charge in terms of
Notification No. 13/2017, dated 28.06.2017 while making payment to PWD,
Uttarakhand for construction of road;
(b) What is the time of supply when advance payment is released to PWD,
Uttarakhand;
(c) Whether the amount deposited with Central Fund i.e Uttaranchal CAMPA
and reimbursed by MEA considering as part cost of the road is liable for
GST.
2. Advance Ruling under GST means a decision provided by the authority or the
appellate authority to an applicant on matters or on questions specified in sub-
section (2) of section 97 or sub-section (1) of section 100 in relation to the supply
of goods or services or both being undertaken or proposed to be undertaken by
the applicant.
3. As per the said sub-section (2) of Section 97 of the CGST/SGST Act, 2017
advance ruling can be sought by an applicant in respect of :
(a) Classification of any goods or services or both
(b) Applicability of a notification issued under the provisions of this Act,
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Weekly Review A-1

No input tax credit is available for rent paid on leasehold land

GOODS & SERVICES TAX CASES n JANUARY 22 - JANUARY 28, 2019 n 11

Works contract service to IWAI for construction of Multi Model IWT

GOODS & SERVICES TAX CASES n JANUARY 22 - JANUARY 28, 2019 n 12

Delayed payment surcharge attributable to distribution and

Company established by the Govt. notification is liable to deduct

GOODS & SERVICES TAX CASES n JANUARY 22 - JANUARY 28, 2019 n 13

State Legislature or established by any Government with 51% or more partici-

Rice Bucket Elevator & Rice Conveyor classifiable as rice mill

Mouth freshener has been classified as Food preparation not

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Last date for passing examination for GST practitioner to be extended

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between the applicable threshold limit from ` 20 lakhs or ` 40 lakhs. The

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- Section 2(30) 174

- Notification No. 11/2017-Central Tax (Rate), dated 28-6-2017 188

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- Rental service - Where assessee was rendering services to

for transportation of passengers, such renting of buses by u

entrusted with contract for construction of road by Gov- u

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Q 22. What are the consequences of credit distributed in contravention of the

12. RetuRns PRocess

Q 1. What is the purpose of returns?

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Q 5. Is the scanned copy of invoices to be uploaded along with GSTR-1?

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Q 17. What is GSTR-3B?

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13. Assessment And Audit

Q 1. Who is the person responsible to make assessment of taxes payable under

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13.1 Invoice, Credit and Debit note

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Q 51. In what manner, should an invoice be issued?

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(b) the recipient does not require such bill of supply,

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(e) date of issue of the document;

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(c) the triplicate copy being marked as TRIPLICATE FOR CONSIGNER.

13.2 Accounts and Records under GST

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Mouth freshener has been classified as Food preparation not