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GOODS AND SERVICES TAX

1.1 INTRODUCTION-
Goods and Services Tax is a comprehensive indirect tax which
is to be levied on the manufacture sale and consumption of
goods and services in India. This is so far the biggest tax reform
in the country. GST eliminates the cascading effect of taxes
because it is taxed at every point of business and the input credit
is available in the value chain.
GST is paid on the procurement of goods and services can be set
off against that payable on the supply of goods or services. But
being the last person in the supply chain, the end consumer has
to bear this tax and so in many respects. GST is like a last point
retail tax.
Finance was the first country to introduce GST in 1954.
Worldwide, almost 150 countries have introduced GST in one or
the other from since now. Most of the countries have a GST
system. Brazil and Canada follow a dual system India is going to
introduce. In china, GST applies only to goods and the provision
of repairs, replacement and processing services.

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1.2 Historical Background-
France was the first country to introduce GST system in 1954.
More than 140countries have implemented the GST. Genesis of
GST occurred doing the previous NDA Government under Atal
Bihari Vajpayee Government when it set up the Asim Dasgupta
committee to design a model for GST. The UPA Government
took the matter further and announced in 2006 that this tax
would be introduced from April 1, 2010. However so far it was
not introduced. All the GST bills introducing Constitution Act
have been passed now and GST is set to come into force from
July 1, 2017.

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1.3 Taxes Replaced by GST-
GST would replace almost all viral indirect taxes and cesses on
Goods & services in the country. Among the taxes levied by
centre, GST will subsume the following:
• Central excise duty & Services Tax
• Additional Duties of Excise
• Additional Duties of Customs
• Special Additional Duty of Customs
• Central Duties of Excise
• Surcharges and Cesses so far as they relate to supply of
goods and services.
Among the state taxes that would be replaced by GST include:
• State VAT
• Central Sales Tax Including Luxury Tax
• Entry tax
• Entertainment and Amusement Tax
• Tax on Advertisements
• Purchase tax
• Taxes on lotteries, betting and gambling
• State Surcharges and Cesses so far as they relate to supply
of goods and services.

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1.4 Principles Followed In Subsuming the Taxes –
The following principles were adopted while subsuming the
above taxes under GST. Firstly to be levied should primarily
indirect taxes and should be part of the transaction chain the
commence with production or manufacturing or import of
goods/services at one end and consumption at other. Secondly,
such replacement of taxes should result in free flow of tax credit
in intra and inter-state level. Thirdly, the GST should give fair
revenue to both centre and states.

Commodities Not under GST-

Note that following have been kept out of the ambit of GST:
• Potable alcohol
• Five petroleum products viz. Petroleum crude,
motor spirit, high speed diesel, natural gas and aviation
turbine fuel
Electricity
The above arrangement is “temporary” and the GST Council
will decide the date from which they shall be included in GST.
For these commodities, the existing VAT and central excise will

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continue to operate until they are included in GST. It’s worth
note here that Tobacco and tobacco products.

1.5 Understanding Dual GST-

Most of the countries have a unified GST system. Brazil and
Canada follow a dual system where GST is levied by both the
Union and the State governments. India also has dual GST
where Centre and States simultaneously levying it on a common
tax base.

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1.6 Principles Followed in adopting dual GST-
The principle of fiscal federalism has been adapted where by
centre and states have been assigned powers to levy and collect
taxes through appropriate legislations.
GST Legislation-
The entire GST legislation is based on six separate acts/bills.
Constitution 101st amendment Act, 2016
This is the enabler act for GST and it amends several important
articles and schedules of the constitution of India so that
necessary constitutional.
• The new articles added by this amendment to
Indian Constitution are Article 246-A (special provision
with respect to goods and services tax); Article 269-
A(Levy collection of goods and services tax in course of
inter-State trade or commerce) and Article 297A(GST
Council)
• Two schedule have been changed viz. 6th
schedule &7th

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As per article 246-A:
• Both union and states in India now have
“concurrent powers’ to make law with respect to goods &
services.
• The intra-state trade now comes under the
jurisdiction of both centre and states; while inter-state trade
and commerce is “exclusively” under central government
jurisdiction.

As per article 269-A:

• In case of the inter-state trade, the tax will be
levied and collected by the Government of India
shared between the Union and States as per
recommendation of the GST Council.
• The article also makes it clear that the
proceeds such collected will not be credited to the
consolidated fund of India or state but respective share
shall be assigned to that state or centre collects the tax,
it assigns state’s share to state, while where state
collects tax, it assigns centre’s share to centre. If that
proceed is deposited in consolidated Fund of India or
states, then, every time there will be a need to pass an
appropriation tax.

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1.7 GST (Compensation to states)
Bill, 2017 (Compensation Cess Bill)-
The salient features are as follows:
• This bill provides for compensation to states
for any loss in revenue due to implementation of GST. The
period of compensation will be five years from the date the
state brings SGST in force.
• For the purpose of calculating the
compensation amount in any financial year, year 2015-16is
to be considered as base year. The revenue in that year and
a 14% growth rate in revenue will be taken for calculation
for five years.
• The base year revenue of the states will be
calculated by adding its revenues from VAT, CST, entry

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 tax, octroi and other local body taxes, taxes on luxury,
entertainment, advertisement etc. However this will not
include revenue on alcohol and certain petroleum products.
• The compensation will be provisionally
calculated and released at the end of every two months. The
annual calculation of revenue will be audited by CAG.
• The compensation payable to a state has to be
provisionally calculated and released at the end of every
two months. Further, an annual calculation of the total
revenue will be undertaken, which will be audited by the
comptroller and audit general of India.

1.8 GST is a Destination Based Tax-

GST the destination based tax, which means that it would accrue
to the taxing authority which has jurisdiction over the place of
consumption which is also termed as place of supply. The
implies that the states which consume more of manufactured
goods and services will benefits. It may not be encouraging for
the states which are top in production of goods and services.

In GST, CGST and SGST will be simultaneously

levied-
The CGST regime, both the CGST and SGST would be levied
on every transaction of supply of goods and services. Both will

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be levied on same price. The location of the supplier and
recipient is immaterial for the purpose of levy of both the tax.

Both states and centre have a say in GST rates-

Under GST regime, both the CGST and SGST would be levied
at rates jointly decided by centre and states. These rates would
be notified on recommendations of GST Council.

GSTN is the special purpose vehicle for GST

administration-
Goods and Services Tax Network is a special purpose vehicle
set up to cater to the needs of GST. The GSTN shall provide a
shared IT infrastructure and services to central and state
governments, tax payer and other stakeholders for
implementation of GST.
The key functions of the GSTN are as follows;
1. Facilitating registration
2. Forwarding the returns to central and state
authorities
3. Computation and settlement of IGST
4. Matching of tax payment details with banking
network

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5. Proving various MIS reports to the Central and
the States government based on the tax payer return
information
6. Providing analysis of the payers profile
7. Running the matching engine for matching,
reversal and reclaim of input tax credit.

The GSTN is developing a common GST portal and

applications for registration, payment, return and
MIS/Reports.

2. ADMINISTRATIVE PROVISIONS

2.1 Introduction-
The CGST Act confers powers for performing various
statutory functions on various officers. Officers who are to
discharge there functions derive their power and authority
from section 3 of GST Act. It is therefore necessary for the
efficient administration of the law that often authority be
conferred on designated persons who will be the
incumbents occupying positions identified in the law as
being the authorized persons to discharge the said
functions.

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Specific categories of officers have been named in this
section whose appointment requires notification by the
government. Notification issued under this section do not
require to be laid before parliament as ‘laying before
parliament’ is a requirement limited only to exemption
notification and not designating officers under section 3.
Only recently, central excise act has been amended perhaps
to align itself in the administrative framework in view of
the imminent introduction of GST. Accordingly, officers
under the central excise act are deemed to be officers
appointed under this act.

1.2 Appointment of Officers-

1. The GST board may, in addition to the officers
as may be notified by the government under section 3,
appoint such persons as it may think fit to be officers
under this act.
2. Without prejudice to the provisions of sub-
section, the board may, be order, authorise any officer
referred to in clauses to of section 3 to appoint
officers of central tax below the rank of assistant
commissioner of central tax for the administration of
this act.

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All statutory functions cannot be performed by executive
officers. The power to appoint executive officers remains with
the government but the authority to appoint administrative staff
is left to the Board- Central Board of Excise and customs
constituted under the Central Boards of Revenue Act, 1963. The
administrative staff makeup the entire working team of
administrative staff also called ‘field formations’. Which the
authority to appoint administrative staff is vested with the board,
express provision is made to permit officers under section 3 to
appoint, for the purpose of central tax, certain administrative
staff.

2.3 Powers of Officers-

1. Subject to such conditions and limitations as

the board may impose, an officer of central tax may
exercise the powers and discharge the duties conferred or
imposed on him under this act.
2. An officer of central tax may exercise the
powers and discharge the duties conferred or imposed
under this act on any other officer of central tax who is
subordinate to him.

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 3. The commissioner may, subject to such
conditions and limitations as may be specified in this behalf
by him, delegate his powers to any other officer who is
subordinate to him.
4. Notwithstanding anything contained in this
section, an appellate authority shall not exercise the power
and discharge the duties conferred or imposed on any other
officer of central tax.
The delegate must exercise the power conferred and not-
delegate. While this is true on the principle of construction of
statutes, the very law that creates the power also empowers
creation of exception to this principle.
An offer duty appointed under this act needs to be supplied with
guidance as regards the manner of exercise of his authority
including the boundaries for the same.

2.4 Authorization of officers of State tax or Union

territory Tax as Proper officer in certain
Circumstance-
1. Without prejudice to the provision of this act,
the officers appointed under the States Goods and Services
Tax Act on the union Territory Goods and Services Tax
Act are authorised to be the proper officers for the
purposes of this Act, subject to such conditions as the

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 Government shall on the recommendations of the Council,
by notification, specify.
2. Subject to the conditions specified in the
notification issued under sub- section –
a) Where any proper officer issues an order under
this act, he shall also issue an order under the state
Goods and Services Tax Act or the Union Territory
Goods and Services Act, as authorised by the State
Goods and Services Tax act, as authorised by the
State Goods and Service tax act, as the case maybe
under intimation to the jurisdictional officer of states
or Union territory tax;
b) Where a proper officer under the State Goods
and Services Tax Act or the union territory Goods
and Services Tax Act has initiated and proceedings
on a subject matter, no proceedings shall be initiated
by the proper officer under this Act on the same
subject matter.
3. Any proceedings for rectification appeal and
revision, wherever applicable, of any order passed by an
officer appointed under this act shall not lie before an
officer appointed under the State Goods and Services Tax
Act or the union territory Goods and Services Tax act.
For purposes of administration of this act, it is permitted to
authorise officers of State/UT Tax to simultaneously also be the
officer of Central Tax. It is interesting to note that officers of

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State/UT Tax do not relinquish their authority but accept
additional authority as officers of Central tax. However to do so
requires the recommendations of the Council and adherence to
the conditions that the government may impose in this regard.

3. LEVY AND COLLECTION OF TAX

3.1 Scope of supply –
1. For the purpose of this Act, the expression
“supply” includes-
a) All forms of supply of goods or services or
both such as sale, transfer, barter, exchange, licence, rental,
lease or disposal made or agreed to be made for a

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 consideration by a person in the course of furtherance of
business;
b) Import of services for a consideration whether
or not in the course of furtherance of business;
c) The activities specified in schedule 1, made for
agreed to be made without a consideration ;and
d) The activities to be treated as supply of goods
or supply of services as referred in schedule 2.
2. Notwithstanding anything contained in sub-section(1),(a)
activities or transactions specified in schedule 3; or (b)such
activities or transactions undertaken by the central government,
a state government or any local authority in which they are
engaged as public authorities, as may be notified by the
government on the recommendations of the council, shall be
treated neither as a supply of goods nor a supply of services.
3. Subject to the provisions of sub-sections (1) and (2), the
government may, on the recommendations of the council,
specify, by notification, the transactions that are to be treated as-
a) A supply of goods and not as a supply of
services; or
b) A supply of service and not as a supply of
goods.

The tax liability on a composite or a mix supply shall be

determined in the follow manner namely:

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 a) A composite supply comprising two or more
supplies, one of which is principal supply, shall be
treated as a supply of such principal supply; and
b) A mix supply comprising two or more supplies
shall be treated as a supply of that particular supply
which attracts the highest rate of tax.
Subject to the project of sub- section (2), there shall be levied a
tax called a central goods and services tax on all intra-state
supplies of goods or services or both, except on the supply of
alcoholic liquor for human consumption, on the value
determined under section 15 and at such rates, not exceeding
twenty per cent., as may be notified by the government on the
recommendations of the council and collected in such manner as
may be prescribed and shall be paid by the taxable person.
The central tax on the supply of petroleum crude, high speed
diesel, motor spirit, natural gas and aviation turbine fuel shall be
levied with effect from such date as may be notified by the
government on the recommendations of the councils.

3.2 Analysis-
Every supply will be liable to tax. The natural of tax would
depend upon the nature of supply, viz, inter-States supplies will
be liable to IGST and intra-State supplies will be liable to CGST
and SGST

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Supply should invoice goods and services- viz., either as wholly
goods or wholly services. Even where a supply involves both,
goods and services, the law provides that such supplies would
classifiable either as, wholly goods or wholly services. Schedule
2 of the act provides for this classification.
Where a supply involves multiple goods or services, or a
combination of goods and services, the treatment of such
supplies would be as follows:
If it involves more than one goods or services which are
naturally bundled together. These are referred to as composite
supply of those goods or services, which constitutes the
principal supply therein
Illustration (provided in section 2(27))-
Where goods are packed, and transported with insurance, the
supply of goods, packing materials, transport and insurance is
composite supply and supply of goods is the principal supply.
This implies that the supply will be taxed wholly as supply of
goods.

Illustration (provided in section 2(66))-

A supply of a package consisting of canned foods, sweets,
chocolates, cake, dry fruits, aerated drink and fruit juices when
supplied for a single price is a mix supply. Each of this items
can be supplied separately and is not dependent on any other.

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Supply-
Generic meaning of supply; Supply includes all forms of
supply and includes agreeing to supply when they are for a
consideration and in the course or furtherance of business. It
specifically included.
i. Sale
ii. Transfer
iii. Barter
iv. Exchange
v. License
vi. Rental
vii. Lease
viii. Disposal
Such activities of transactions undertaken by the central
government, a state government or any local authority in which
they are engaged as public authorities, as may be notified by
government or recommendation of the council.

3.3 Comparative Review-

Under the current tax laws, central excise is levied on
‘manufacture of goods’, VAT/CST is levies on ‘sale of goods’
and service tax charged on ‘service provided on agreed to be
provided’. Unlike such different incidence, under the GST laws,

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it is ‘supply’ which would be the taxable event. Under the
current law, e.g. while stock transfers are liable to central
exercise, it would be not be liable to VAT/CST- however under
the GST laws, it would be taxable as a ‘supply’ if such supplies
are between distinct persons under section 25(4) or 25(5).
Further, free supplies would be liable to excise duty, while under
the VAT laws, free supplies would require reversal of input tax
credit; under the GST law, the treatment would be similar to the
present VAT laws, where the supplies are made without any
consideration. However, where the free supplies are made
between related persons then such supplies may be regarded as
supply under section 1.
In the current law, there are multiple transactions which
apparently qualify of both ‘sale of goods’ as well as
‘provision of services’ E.g. license of software, providing a
right to use a brand name, etc. To avoid the situation, GST
law clarifies as to whether a transaction would qualify as a
‘supply of goods’ or as ‘supply of services’ by introducing a
deeming fiction. A transaction composite contracts would
either qualify as goods or as services, under the GST law.
3.4 Composition levy-
Notwithstanding anything to the contrary contained in this
Act but subject to the provisions of sub section (3) and (4) of
section 9, a registered person, whole aggregate turnover in the
preceding financial year did not exceed fifty lakh rupees, may

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 opt to pay, in lieu of the tax payable by him, an amount
calculated at such rate as may be prescribed, but not
exceeding-
a) One per cent, of the turnover in state of
turnover in Union territory in case of a manufacturer
b) Two and a half per cent, of the turnover in
state or turnover in Union territory in case of persons
engaged in making supplies referred in clause (b) of
paragraph 6 of schedule 2 and
c) Half per cent, of the turnover in State or
turnover in union territory in case of other suppliers,
subject to such conditions and restrictions as may be
prescribed:
Provided that the government may, by notification, increase the
said limit of fifty lakh rupees to such higher amount, not
exceeding one crore rupees, as may be recommended by the
council.

3.5 Power to Grant Exemption from Tax-

Where the government is satisfied that it is necessary in the
public interest so to do, it may, on the recommendations of the
council, by notification, exempt generally, either absolutely or

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subject to such conditions as may be satisfied therein, goods or
services or both of any specified description from the whole or
any part of the tax leviable thereon with effect from such date as
may be satisfied in such notification.
Where the government is satisfied that it is necessary in the
public interest so to do, it may, on the recommendations of the
council, by special order in each case, under circumstances of
the exceptional nature to be started in such order, exempt from
payment of tax any goods or services or both on which taxis
leviable.
The government may, if it considers necessary or expedient so
to do for the purpose of clarifying the scope of applicability of
any notification issued under sub-section (1) or other issued
under sub-section (2), insert an explanation in such notification
or order, as the case may be, by notification at any time within
one year of issue of the notification under sub-section (1) or
order under sub-section (2), and every such explanation shall
have effect as if it had always been the part of the first such
notification or order, as the case may be.

4. TIME AND VALUE OF SUPPLY

4.1 Time of supply of goods-

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1. The liability to pay the tax on goods shall arise
at the time of supply, as determined in accordance with the
provisions of this section.
2. The time of supply of goods shall be the
earlier of the following dates, namely:
a) The date of issue invoice by the supplier or the
last date on which he is required, under sub-section(1) of
section 31, to issue the invoice respect to the supply; or
b) The date on which the supplier receives the
payment with respect to the supply: provided that where the
supplier of taxable goods receives an amount up to one
thousand rupees in excess of the amount indicated in the
tax invoice, the time of supply to the extent of such excess
amount shall, at the option of the said supplier, be the date
of issue of invoice in respect of such excess amount.
3. In case of supply of vouchers by a supplier, the time of
supply shall be-
a) The data of issue of voucher, if the supply is
identifiable at that point; or
b) The date of redemption of voucher, in all other
cases.
4. where it is not possible to determine the time of supply
under the provision of sub-section (2)or sub section (3)or sub-
section (4), the time of supply shall-

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 a) In a case where a periodical return has to be
filed, be the date on which such return is to be filed or;
b) In any other case, be the date on which the tax
paid.
5. the time of supply to the extent it relates to an addition in
the value of supply by way of interest, late fee or penalty for
delayed payment of any consideration shall be the date on
which the supplier receives such addition in value.
Supply has been understood to hold the key to the incidence of
GST, but it is the ‘times of supply’ that dictates the occasion
when this incidence will come to rest. Taxable supply has been
defined to mean a supply of goods and services which is
chargeable to tax under this act. It is interesting to note the use
of the expression ‘chargeable to tax’ as opposed to ‘leviable to
tax’. It has been held that ‘chargeable to tax’ encompasses not
only the incidence of tax but also its assessment.
The opening words in section 12(1) are very interesting and
forceful as it is here that the liability to pay GST arises. The
subject matter of levy- goods or services- becomes encumbered
with the tax upon occurrence of the taxable event- supply. But
the tax levied in terms of section 9, comes to reside only at the
time determined by section 12 and 1. Accordingly, these
sections play a stellar role in the imposition of GST.
4.2 Time of Supply – Forward Charge-

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Time of supply is prescribed to be the earlier of (a) data of issue
invoice and (b) date of receipt of payment. Date of issue of
invoice requires us to examine section 31 which deals with the
requirement to issue a “tax invoice”. Here two kind of situations
are contemplated, namely
I. A case Where the supply involves movement
II. Any other case
Before proceeding, it is necessary to admit the concept of
‘person and taxable person’. Person is defined in the most
familiar manner in section 2(84) but taxable person is explained
in detail in section 25. A proper reading of section 25 helps us
understand- a state is the smallest unit in GST- except where
multiple business verticals are registered separately under
section 24. A taxable person is therefore the presence of the
person in a state where taxable supplies are made therein, every
place in the state such person shall be a taxable person.
Now, we may return to our discussion regarding the two kinds
of cases that are discussed on time of supply. It is noticeable that
section 31 uses two expression- ‘removal of goods’ and
‘movement of goods’- which are not merely expressions of
distinction without a difference. There is deliberate purpose for
legislating in this manner. ‘Removal of goods’ is defined in
section 2(85) and identifies the steps that may follow once that
the decision to supply made.

4.3 Time of Supply- Reserve Charge-

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Where tax is payable on reserve charge basis, the time of supply
is appointed to be the earliest of (a)date of receipt of goods,
(b)date of payment or (c) 30 days from the date of issue of
invoice by the supplier. If for any reason, one or these three
dates cannot be determined then the time of supply will be the
date of recording the supply in the books of the recipient.
Keeping in mind the definition of reserve charge in section
2(98), the above provision does not apply to payment of tax by
an electronic commerce operator but only to those cases of
supply which fall under sub-section 5 to section 9 of the act.

4.4 Time of Supply of Services-

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 1. The liability to pay tax on services shall arise
at the time of supply, as determined in accordance with the
provisions of this section.
2. The time of supply of services shall be shall be
the earliest of the following dates, namely-
a) The date of issue of invoice by the supplier, if
the invoice is issued within the period prescribed under
sub-section(2) of section 31 or the date of receipt of
payment, whichever is earlier; or
b) The date of provision of service, if the invoice
is not issued within the period prescribed under sub-section
(2) of section 31 or the date of receipt of payment,
whichever is earlier; or
c) The date of which the recipient shows the
receipt of services in his books of account, in a case where
the provisions of clause (a)or clause (b)do not apply:
Provided that where the supplier of taxable service receives an
amount up to one thousand rupees in excess of the amount
indicated in the tax invoice, the time of supply to the extent of
such excess amount shall, at the option of the said supplier, be
the date of issue of invoice relating to such excess amount.
Explanation- for the purpose of clauses (a) and (b)
i. The supply shall be deemed to have been made
to the extent it is covered by the invoice or, as the case may
be, the payment;

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ii. ‘The date of receipt payment” shall be the date
on which the payment is entered in the books of account of
the supplier or the date on which the payment is credited to
his bank account, whichever is earlier.
3. In case of supplies in respect of which taxis paid or liable to
be paid on reverse charge basis, the time of supply shall be
the earlier of the following dates, namely;
a) The date of payment as entered in the books of
account of the recipient or the date on which the payment
is debited in his bank account, whichever is earlier; or
b) The date immediately following sixty days
from the date of issue of issue of invoice or any other
document, by whatever name called, in lieu thereof by
the supplier;
4. In case of supply of vouchers by a supplier, the time of supply
shall be-
a) The date of issue of voucher, if the supply is
identifiable at that point; or
b) The date of redemption of voucher, in all other
cases.
5. Where it is not possible to determine the time of supply under
the provisions of sub-section (2) or sub-section (3) or sub-
section (4).

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4.5 Change in Rate of Tax in respect of Supply of
Goods or services-
Notwithstanding anything contained in section 12 or section 13,
the time of supply, where there is a change in the rate of tax in
respect of goods or services or both, shall be determined in the
following manner, namely:
i. In case the goods or services or both have been
supplied before the change in rate of tax,
i. Where the invoice for the same has been
issued and the payment is also received after the
change in rate of tax, the time of supply shall be the
date of receipt of payment or the date of issue of
invoice, whichever is earlier; or
ii. Where the invoice has been issued prior to the
change in rate of tax but payment is received after the
change in rate of tax, the time of supply be the date of
issue of invoice; or
iii. Where the payment has been received before
the change in rate of tax, but the invoice for the same
is issued after the change in rate of tax, the time of
supply shall be the date of receipt of payment;
ii. In case the goods or services or both have been
supplied after the change in rate the tax,
i. Where the payment is received after the
change in rate of tax but the invoice has been issued
prior to the change in rate of tax, the time of supply

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 shall be the date of issued and payment is received
before the change in rate of tax, the time of supply
shall be the date of receipt of payment or date of issue
of invoice, whichever is earlier; or
ii. Where the invoice has been issued and
payment is received before the change in rate of tax,
the time of supply shall be the date of issue of invoice.
Provided that the date of receipt shall be the date of credit in the
bank account if such credit in the bank account is after four
working days from the date of change in the rate of tax.

Analysis-
Payment of the tax requires the presence of all the following
events:
i. Supply of goods or services
ii. Issue of invoice
iii. Payment for the supply
When there is a change in the rate of tax during the occurrence
of these three events, there may be some concern about the
applicability of the correct rate of tax. Section 14 addresses this
aspect clearly.

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4.6 Value of Taxable Supply-
1. The value of a supply or services or both shall
be the transaction value, which is the price actually paid or
payable for the said supply of goods or services or both
where the supplier and the recipient of the supply are not
related and the price is the sole consideration for the
supply.
2. The value of supply shall include-
a) Any taxes, duties, cesses, fees and charged
levied under any law for the time being in force other than
this act, the state goods and services tax act, the union
territory goods and service tax act, if charged separately by
the supplier;
b) Any amount that the supplier is liable to pay in
relation to such supply but which has been incurred by the
recipient of the supply and mot included in the price
actually paid or payable for the goods or services or both;
c) Incidental expenses, including commission
and packing, charged by the supplier to the recipient of a
supply and any amount changed for anything done by the
supplier in respect of the supply of goods or services or
both at the time of, or before delivery of goods or supply of
services;
d) Interest or let fee or penalty for delayed of any
consideration for any supply; and

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 e) Subsides directly linked to the price excluding
subsides provided by the central government and state
governments.

4.7 Consideration not Wholly in Money –

It is important to consider the difference between ‘free’ and ‘no
consideration’. It is probably common to consider that these two
are synonymous. At the outset, there can be no contract without
consideration.
Experts in contract law will see the gross illegality if one were to
say that there is a contract but has no consideration in it. If a
contract is valid, then there is non-monetary consideration which
is erroneously stated as having ‘no consideration’. It is
impermissible that a contract subsists but lacks consideration.
It is just impossible. Now, if there is a contract with non-
monetary consideration, rule1 of the valuation rules comes into
operation. Although this rules states that it applies when the
consideration is partly in money or wholly in non-monetary
form. This rules provides that the value of supply “shall be” and
not be “based on” or “guided by”, so that mandatory nature of
the prescription of this rule can be appreciated.

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5. GST REGISTATION
5.1 Persons liable for Registration-
Every supplier shall be liable to be registered under this act in
the state or union territory, other than special category states,
from where he makes a taxable supply of goods or services or
both, if his aggregate turnover in a financial year exceeds twenty
Lakh rupees:
Provided that where such person makes taxable supplies of
goods or services or both from any of the special category states,
he shall be liable to be registered if his aggregate turnover in a
financial year exceeds ten lakh rupees.
Even person who, on the day immediately preceding the
appointed day, is registered or holds a licence under an existing
law, shall be liable to be registered under this act with effect
from the appointed day.
Where a business carried on by a taxable person registered under
this act is transferred, whether an account of succession or
otherwise, to another person as a going concern, the transferee
or the successor, as the case maybe shall be liable to be

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registered with effect from the date of such transfer or
succession.
Notwithstanding anything contained in sub- section (1) and (3),
in a case of transfer pursuant to sanction of a scheme or an
arrangement for amalgamation or, as the case maybe, demerger
of two or more companies pursuant to an order of a high court,
tribunal or otherwise, the transferee shall be liable to be
registered, with effect from the date on which the register of
companies issues a certificate of incorporation giving effect
from the date on which the register of companies issues a
certificate of incorporation giving effect to such order of the
high court or tribunal.
Explanation. For the purpose of this section-
i. The expression “aggregate turnover” shall
include all supplies made by the taxable person,
whether on his own account or made on behalf of all
his principals;
ii. The supply of goods, after completion of job
work, by a registered job worker shall be treated as
the supply of goods by the principal referred to in
section 143, and the value of such goods shall not be
included in the aggregate turnover of the registered
job worker;
iii. The expression “special category states” shall
mean the states as specified in sub-clause (g) of
clause (4) of article 279A of the constitutions.

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5.2 Analysis-
Every supplier shall be liable to be registered under the act in the
state from which he makes a taxable supply of goods or services
or both. Registration is required if his aggregate turnover in a
financial year exceeds rupees twenty lakhs. This threshold limit
will be rupees ten lakh if a taxable person conducts his business
in any of the special category states as specified in sub-clause
(g) of clause (4)of article 279A of the constitution i.e. Arunachal
Pradesh, Assam, Jammu and Kashmir, Manipur, Meghalaya,
Mizoram, Nagaland, Sikkim, Tripura, Himachal Pradesh and
Uttarakhand.
It means that for each state, the supplier liable for registration
will have to take a separate registration even though such
supplier may be supplying goods or services or both from more
than one state as a single entity. The application for registration
shall be made within 30 days from the date when he becomes
liable for registration.
Casual taxable person or a non-resident taxable person shall
apply for registration at least five days prior to the
commencement of business.

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5.3 A Supplier shall not be Liable for
Registration-
a) If hi aggregate turnover consists of only such
goods and services which are not liable to tax or wholly
exempt from the under this act.
b) An agriculturist, to the extent of supply of
produce out of cultivation of land
• For calculating the threshold limit, the
turnover shall include all supplies made by the taxable
person, whether on his own account or made on behalf of
all his principals. Further, supply of goods by a registered
Job-worker, after completion of job work, shall be treated
as the supply of goods by the “principal” referred to in
section 143 of this act. The value of such goods shall not be
included in the aggregate turnover of the registered job
worker.
• Every person who, on the day immediately
preceding the appointed day, is registered or holds a license
under an earlier law, shall be liable to be registered under
this act with effect from appointed day.

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• Where the person who is liable to be registered
under this Act fails to obtain registration, the proper officer
can proceed to obtain register such person in the manner as
may be prescribed.

Categories are persons who shall be required to be

registered under this act irrespective of the threshold
notwithstanding anything discussed in the paragraph
above, the following categories of persons shall get
registered compulsorily under this act:
• Persons making any inter-state taxable supply;
• Casual taxable persons making taxable supply:
• Persons who are required to pay tax under
reserve charge;
• Persons who are required under sub-section
(5)of section 9
• Non-resident taxable persons making taxable
supply;
• Persons who are required to deduct tax under
section 51 (tax deduct or source);
• Persons who supply goods or services or both
on behalf of other registered taxable persons
whether as an agent or otherwise;
• Input service distributor;

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 • persons who supply goods and services, other
than supplies specified under sub-section (5) of
section 9, through such electronic commerce
operator who is required to collect tax at source
under section 52,
• every electronic commerce operator;

5.4 Transfer of Business and Registration-

If registered taxable person transfers business on account of
succession or otherwise, to another person as a going concern,
the transferee, or the successor, as the case may be, shall liable
to be registered with effect from the date of such transfer or
succession. This means that the registration certificate issued
under section 22 of the act is not transferable to any other
person. In a case of transfer pursuant to sanction of a scheme or
an arrangement. The transference shall be liable to be registered
with effect from the date on which the Registrar of companies
issues a certificate of incorporation giving effect to such order of
the High Court.
1. The following person shall not be liable to registration,
namely:
a) any person engaged exclusively in the business
of supplying goods or services or both that are not liable to

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 tax are wholly exempt from tax under this act or under the
integrated goods and services tax act;
b) An agriculturist to the extent of supply of
produce out of cultivation of land.
2. The government may, on the recommendations of the council,
by notification, specify the category of persons who may be
exempt from obtaining registration under this act.

5.5 Compulsory Registration in Certain Cases-

1. Notwithstanding anything contained in sub-section (1) of
section 22, the following categories of person shall be required
to be registered under this Act,
i. Person making any inter-state taxable supply;
ii. Casual taxable persons making taxable supply;
iii. Person who are required to pay tax under
reserve charge;
iv. Person who are required to pay tax under sub-
section (5) of section 9;
v. Non resident taxable persons making taxable
supply
vi. Persons who are required to deduct tax under
section 51, whether or not separately registered under this
act;

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vii. Persons who make taxable supply of goods or
services or both on behalf of other taxable persons whether
as an agent or otherwise;
viii. Input service distributor whether or not
separately registered under this act;
ix. Person who supply goods or services or both,
other than supplies specified under sub-section (5) of
section 9, through such electronic commerce operator who
is required to collect tax at source under section 52
x. Every Electronic commerce operator.

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 CONCLUSION
From the above analysis it is clear that implementation of GST
will have a significant impact on logistics sector in India. If GST
is properly implemented, then it will have a double positive
impact on the logistics industry that is logistics costs will come
down and logistics efficiency will increase both within India and
exports. So the main objective of logistics management, that is
customer satisfaction at least logistics cost, will be achieved
with the implementation of GST. The GST implementation will
also leads to emergence of organized service providers since
taxes will not be added costs for the business. In the current
scenario the logistics sector is a highly fragmented industry with
very few large organised players. The unorganized sector would
have to shape up and join hands with the organized players for
setting of economics of scale.
In a nut shell, the successful implementation of GST could
reduce transportation cycle times, enhance supply chain
decisions, lead to consideration of warehouses etc. Which could
help logistics reach itspotential in terms of services and growth.
So it will be great boom for the logistics sector which leading to
accelerated economic growth.

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