Inter GST PDF

INDIRECT TAXATION
CA Intermediate
GST
Amendments (for May 2019 exam)
(From 1st May 2018 to 31st October, 2018 with finance Act 2018)
CA RAJ KUMAR
CA. Raj Kumar Amendments
C H AP T E R
4
Chargeability and “Goods & Services”
Provisions under section 9(4) of CGST Act, 2017: [Reverse charge mechanism in case of supply made
by unregistered to registered person]: has been postponed till 30th day of September, 2019. [N/N: 22/2018]
Provisions under section 5(4) of IGST Act, 2017: [Reverse charge mechanism in case of supply made by
unregistered to registered person]: has been postponed till 30th day of September, 2019. [N/N: 23/2018]
C H AP T E R
5
Supply of Goods or Services (Taxable Event)
Section 7: SUPPLY
(1) Supply (a) All forms of supply of goods or services or both SUCH AS
Includes–
 Sale,
 Transfer,
 Barter,
 Exchange,
 Licence,
 Rental,
 Lease or
 Disposal
made or agreed to be made for a consideration by a person in the course or furtherance of

business;
(b) Import of services for a consideration whether or not in the course or furtherance of
business; AND
………………………………………………………………………………………………………….
(c) The activities specified in Schedule I, made or agreed to be made WITHOUT A

CONSIDERATION; AND
SCHEDULE: I
ACTIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION
1. Permanent transfer or disposal of business assets where input tax credit has been availed
on such assets.
2. Supply of goods or services or both between related persons or between distinct

persons as specified in section 25, when made in the course or furtherance of business:
Provided that gifts not exceeding Rs 50,000 in value in a financial year by an employer to an employee shall
not be treated as supply of goods or services or both.
Section 25: Relevant extract- A person who has obtained or is required to obtain more than one
registration, whether in one State or Union territory or more than one State or Union territory shall, in
respect of each such registration, be treated as distinct persons for the purposes of this
Act.
Where a person who has obtained or is required to obtain registration in a State or Union territory in
respect of an establishment, has an establishment in another State or Union territory, then such
establishments shall be treated as establishments of distinct persons for the purposes of this Act.
3. Supply of goods-
(a) by a Principal to his agent where the agent undertakes to supply such goods on behalf of the
principal; or
(b) by an Agent to his principal where the agent undertakes to receive such goods on behalf of
the principal.
4. Import of services by a PERSON taxable person from a related person or from any of
his other establishments outside India, in the course or furtherance of business.
(d) The activities to be treated as supply of goods or supply of services as referred to in

Schedule II
(1A) Where certain activities or transactions constitute a supply in accordance with the
provisions of sub-section (1), they shall be treated either as supply of goods or supply of
services as referred to in Schedule II.
SCHEDULE II
ACTIVITIES OR TRANSACTIONS TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY

OF SERVICES
…………………
………………………………………
(2) No Supply Notwithstanding anything contained in sub-section (1),––
(a) Activities or transactions specified in Schedule III; 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.
In exercise of the powers conferred by section 7(2) the Central Government, on the recommendations
of the Council hereby notifies that the following activities or transactions undertaken by the Central
Government or State Government or Union territory or any local authority in which they are engaged
as public authority, shall be treated neither as a supply of goods nor a supply of service, namely:-
“Services by way of any activity in relation to a function entrusted to a Panchayat under article 243G of
the Constitution or to a Municipality under article 243W of the Constitution.
SCHEDULE III
ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A

SUPPLY OF GOODS NOR A SUPPLY OF SERVICES
1. Services by an employee to the employer in the course of or in relation to his employment.
2. Services by any court or Tribunal established under any law for the time being in force.
3. (a) The functions performed by the Members of Parliament, Members of State Legislature,
Members of Panchayats, Members of Municipalities and Members of other local authorities;
(b) The duties performed by any person who holds any post in pursuance of the provisions of the
Constitution in that capacity; or
(c) The duties performed by any person as a Chairperson or a Member or a Director in a body
established by the Central Government or a State Government or local authority and who is not
deemed as an employee before the commencement of this clause.
4. Services of funeral, burial, crematorium or mortuary including transportation of the deceased.
5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.
6. Actionable claims, other than lottery, betting and gambling.
Explanation.-For the purposes of paragraph 2, the term "court" includes District Court, High
Court and Supreme Court.
7. Supply of goods from a place in the non-taxable territory to another place in the non-
taxable territory without such goods entering into India.
8. (a) Supply of warehoused goods to any person before clearance for home consumption;
(b) Supply of goods by the consignee to any other person, by endorsement of documents of title
to the goods, after the goods have been dispatched from the port of origin located outside India
but before clearance for home consumption.”;
(ii) The Explanation shall be numbered as Explanation 1 and after Explanation 1 as so numbered,
the following Explanation shall be inserted, namely:-
‘Explanation 2.––For the purposes of paragraph 8, the expression “warehoused goods”

shall have the same meaning as assigned to it in the Customs Act, 1962.
(3) Subject to the provisions of sub-sections (1), (1A) and (2) sub-sections (1) and (2), the Government
Classification 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 services and not as a supply of goods.

C H AP T E R
7
Exemptions
LIST 0F EXEMPTED SERVICES

Notification No. 12/2017- Central Tax (Rate) [SAME LIST FOR IGST]
In exercise of the powers conferred by section 11(1) of the Central Goods and Services Tax Act, 2017, the Central
Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the
Council, hereby exempts the intra-State supply of services from so much of the central tax leviable thereon under
section 9(1) of the said Act, unless specified otherwise, subject to the relevant conditions if any specified.
4. Municipality Services by
article 243 W  Central Government, State Government, Union territory, local authority or governmental
authority
 by way of any activity in relation to any function entrusted to a municipality under article 243
W of the Constitution.

5. Panchayat Services by
under article  a Central Government, State Government, Union territory, local authority or a governmental
243G authority
 by way of any activity in relation to any function entrusted to a Panchayat under article 243G
of the Constitution.
9D.Old Age Services by an old age home run by Central Government, State Government or by an entity registered
Home services under section 12AA of the Income-tax Act, 196 to its residents (aged 60 years or more) against
consideration upto twenty-five thousand rupees per month per member, provided that the
consideration charged is inclusive of charges for boarding, lodging and maintenance.
10A. Services by Services supplied by electricity distribution utilities by way of construction, erection, commissioning, or
Electricity installation of infrastructure for extending electricity distribution network upto the tube well of the
Distribution farmer or agriculturalist for agricultural use.
Utilities
14. Hotel, Motel Services by a hotel, inn, guest house, club or campsite, by whatever name called, for residential or
etc. lodging purposes, having VALUE OF SUPPLY declared tariff of a unit of accommodation below
Rs.1000 per day or equivalent.
19A: Trans. of Services by way of transportation of goods by an aircraft from customs station of clearance in India to
goods by an a place outside India.
aircraft Note: Nothing contained in this serial number shall apply after the 30th day of September, 2019 2018.
19B: Trans. of Services by way of transportation of goods by a vessel from customs station of clearance in India to a
goods by Vessel place outside India.
Note: Nothing contained in this serial number shall apply after the 30th day of September, 2019 2018.
24A. Services by way of warehousing of minor forest produce.

warehousing of
minor forest
produce.
31A. CMPFO Services by Coal Mines Provident Fund Organisation to persons governed by the Coal Mines
Provident Fund and Miscellaneous Provisions Act, 1948.
31B. NPS Services by National Pension System (NPS) Trust to its members against consideration in the form of
administrative fee.
34A. Service by Services supplied by Central Government, State Government, Union territory to their undertakings or
way of Public Sector Undertakings(PSUs) by way of guaranteeing the loans taken by such undertakings or
guaranteeing PSUs from the financial institutions.
the loans
36A: Re- Services by way of reinsurance of the insurance schemes specified in serial number 35 or 36 OR 40.
Insurance
41. Long-term Upfront amount (called as premium, salami, cost, price, development charges or by any other name)
Lease payable in respect of service by way of granting of long term lease of 30 years, or more of industrial
plots or plots for development of infrastructure for financial business, provided by the State
Government Industrial Development Corporations or Undertakings or by any other entity having 50
per cent. or more ownership of Central Government, State Government, Union territory to the
industrial units or the developers in any industrial or financial business area.
Explanation.- For the purpose of this exemption, the Central Government, State Government or
Union territory shall have 50% or more ownership in the entity directly or through an entity which is
wholly owned by the Central Government, State Government or Union territory.
47A. FSSAI Services by way of licensing, registration and analysis or testing of food samples supplied by the Food
Safety and Standards Authority of India (FSSAI) to Food Business Operators.
55A. Services by way of artificial insemination of livestock (other than horses)

Insemination of
livestock
65B. ERCC Services supplied by a State Government to Excess Royalty Collection Contractor (ERCC) by way of
assigning the right to collect royalty on behalf of the State Government on the mineral dispatched by
the mining lease holders.
Explanation.- “Mining Lease Holder” means a person who has been granted mining lease, quarry lease
or license or other mineral concession under the Mines and Minerals (Development and Regulation)
Act, 1957, the rules made thereunder or the rules made by a State Government under of section 15(1)
of the Mines and Minerals (Development and Regulation) Act, 1957
Provided that at the end of the contract period, ERCC shall submit an account to the State
Government and certify that the amount of goods and services tax deposited by mining lease holders
on royalty is more than the goods and services tax exempted on the service provided by State
Government to the ERCC of assignment of right to collect royalty and where such amount of goods
and services tax paid by mining lease holders is less than the amount of goods and services tax
exempted, the exemption shall be restricted to such amount as is equal to the amount of goods and
services tax paid by the mining lease holders and the ERCC shall pay the difference between goods and
services tax exempted on the service provided by State Government to the ERCC of assignment of
right to collect royalty and goods and services tax paid by the mining lease holders on royalty.
77. NPO Service by an unincorporated body or a non- profit entity registered under any law for the time being in
force, to its own members by way of reimbursement of charges or share of contribution –
(a) As a trade union;
(b) For the provision of carrying out any activity which is exempt from the levy of Goods and service
Tax; or
(c) Up to an amount of Rs.7500 Rs 5000 per month per member for sourcing of goods or services
from a third person for the common use of its members in a housing society or a residential complex.
77A. NPO Services provided by an unincorporated body or a non-profit entity registered under any law for the
time being in force, engaged in,-
(i) activities relating to the welfare of industrial or agricultural labour or farmers; or
(ii) promotion of trade, commerce, industry, agriculture, art, science, literature, culture, sports,
education, social welfare, charitable activities and protection of environment,
to its own members against consideration in the form of membership fee upto an amount of one
thousand rupees (Rs 1000/-) per member per year.
Definitions. - For the purposes of this notification, unless the context otherwise requires,
Educational Board Central and State Educational Boards shall be treated as Educational Institution for the limited
purpose of providing services by way of conduct of examination to the students.
Notification No. 9/2017-Integrated Tax (Rate)

In exercise of the powers conferred by section 6(1) of the Integrated Goods and Services Tax Act, 2017 , the Central
Government, on being satisfied that it is necessary in the public interest so to do, on the recommendations of the Council,
hereby exempts the inter-State supply of services unless specified otherwise.
In addition to above 82 exemptions…
5. Deemed Services supplied by an establishment of a person in India to any establishment of that person outside
Distinct
India, which are treated as establishments of distinct persons in accordance with Explanation 1 in section
Person
8 of the Integrated Goods and Services Tax Act, 2017.
Provided the place of supply of the service is outside India in accordance with section 13 of Integrated
Goods and Services Tax Act, 2017.
6. United Import of services by United Nations or a specified international organisation for official use of the
nations /
United Nations or the specified international organisation.
specified
international
Organisation Explanation. - For the purposes of this entry, unless the context otherwise requires, “specified
international organisation” means an international organisation declared by the Central Government in
pursuance of section 3 of the United Nations (Privileges and Immunities Act) 1947, to which the
provisions of the Schedule to the said Act apply.
7.Foreign Import of services by Foreign diplomatic mission or consular post in India, or diplomatic agents or career
Diplomatic
consular officers posted therein.
Mission
Foreign diplomatic mission or consular post in India, or diplomatic agents or career consular officers
posted therein shall be entitled to exemption from integrated tax leviable on the import of services subject
to the conditions, -
(i) that the foreign diplomatic mission or consular post in India, or diplomatic agents or career consular
officers posted therein, are entitled to exemption from integrated 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 the services imported 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 or her
family.
(iii) that in case the Protocol Division of the Ministry of External Affairs, after 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;
(iv) that the exemption from the whole of the integrated tax granted to the foreign diplomatic 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.
CIRCULARS
Circular No. 44/18/2018: Issue Related to Taxability of ‘Tenancy Rights’ under GST
1. Doubts have been raised as to,-
(i) Whether transfer of tenancy rights to an incoming tenant, consideration for which is in form of tenancy premium, shall
attract GST when stamp duty and registration charges is levied on the said premium, if yes what would be the applicable
rate?
(ii) Further, in case of transfer of tenancy rights, a part of the consideration for such transfer accrues to the outgoing
tenant, whether such supplies will also attract GST?
2. The issue has been examined. The transfer of tenancy rights against tenancy premium which is also known as “pagadi
system” is prevalent in some States. In this system the tenant acquires, tenancy rights in the property against payment of
tenancy premium(pagadi). The landlord may be owner of the property but the possession of the same lies with the tenant.
The tenant pays periodic rent to the landlord as long as he occupies the property. The tenant also usually has the option to
sell the tenancy right of the said property and in such a case has to share a percentage of the proceed with owner of land, as
laid down in their tenancy agreement. Alternatively, the landlord pays to tenant the prevailing tenancy premium to get the
property vacated. Such properties in Maharashtra are governed by Maharashtra Rent Control Act, 1999.
3. As per section 9(1) of the CGST Act there shall be levied central tax on the intra-State supplies of services. The scope of
supply includes all forms of supply of goods and services or both such as sale, transfer, barter, exchange, licence, rental,
lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business and
also includes the activities specified in Schedule II. The activity of transfer of tenancy right against consideration in the
form of tenancy premium is a supply of service liable to GST. It is a form of lease or renting of property and such activity
is specifically declared to be a service in para 2 of Schedule II i.e. any lease, tenancy, easement, licence to occupy land is a
supply of services
4. The contention that stamp duty and registration charges is levied on such transfers of tenancy rights, and such
transaction thus should not be subjected to GST, is not relevant. Merely because a transaction or a supply involves
execution of documents which may require registration and payment of registration fee and stamp duty, would not
preclude them from the scope of supply of goods and services and from payment of GST. The transfer of tenancy rights
cannot be treated as sale of land or building declared as neither a supply of goods nor of services in para 5 of Schedule III
to CGST Act, 2017. Thus a consideration for the said activity shall attract levy of GST.
5. To sum up, the activity of transfer of ‘tenancy rights’ is squarely covered under the scope of supply and taxable per-se.
Transfer of tenancy rights to a new tenant against consideration in the form of tenancy premium is taxable. However,
renting of residential dwelling for use as a residence is exempt [Sl. No. 12 of N/N: 12/2017]. Hence, grant of tenancy
rights in a residential dwelling for use as residence dwelling against tenancy premium or periodic rent or both is exempt. As
regards services provided by outgoing tenant by way of surrendering the tenancy rights against consideration in the form of
a portion of tenancy premium is liable to GST.
Circular No. 3/1/2018: Applicability of Integrated Goods and Services Tax (integrated tax) on goods
supplied while being deposited in a customs bonded warehouse
1. Attention is invited to Circular No. 46/2017 whereby the applicability of integrated tax on goods transferred/sold while
being deposited in a warehouse (hereinafter referred to as the “warehoused goods”) was clarified.
2. Various references had been received by the Board on the captioned issue which has now been re-examined by the
Board.
3. It is seen that 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 and stores the goods in a customs bonded warehouse and
thereafter, supplies such 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.
4. It may be noted that as per section 7(2) of the Integrated Goods and Services Tax Act, 2017 (hereinafter referred to as
the “IGST Act”), 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 (hereinafter referred to as the “CTA”). 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 (hereinafter referred to as the “Customs Act”) which is at the time of clearance of such goods under
section 68 of the Customs Act.
5. It may also be noted that sub-section (8A) has been inserted in section 3 of the CTA vide section 102 of the 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.
6. It is therefore, clarified that 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.
7. This Circular would be applicable for supply of warehoused goods, while being deposited in a customs bonded
warehouse, on or after the 1st of April, 2018.
Circular No. 46/20/2018: Applicable GST rate on Priority Sector Lending Certificates (PSLCs),
Renewable Energy Certificates (RECs) and other similar scrips
As a result, there is lack of clarity on the applicable rate of GST on various scrips/ certificates like RECs, PSLCs etc.
The matter has been re-examined. GST rate of 18 % under the residual entry at S.No. 453 of Schedule III of notification
No. 01/2017-Central Tax (Rate) applies only to goods.
As such, various certificates like RECs, PSLCs etc are classified under heading 4907 and will accordingly attract GST @ 12
%, though duty paying scrips classifiable under the same heading will attract Nil GST{under 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}.
Accordingly, in modification of S.No. 3 of Circular No. 34/8/2018- GST dated 01.03.2018, it is hereby clarified that
Renewable Energy Certificates (RECs) and Priority Sector Lending Certificates (PSLCs) and other similar documents are
classifiable under heading 4907 and attract 12% GST. The duty credit scrips, however, attract Nil GST under S.No. 122A
of Notification No. 2/2017-Central Tax (Rate) dated 28.06.2017.
Circular No. 51/25/2018: Applicability of GST on ambulance services provided to Government by

private service providers under the National Health Mission (NHM)
1. I am directed to invite your attention to the Circular No. 210/2/2018- Service Tax, dated 30th May, 2018. The said
Circular has been issued in the context of service tax exemption contained in notification No. 25/2012- at Sl. No. 2 and
25(a). The Circular states, inter alia, that the service of transportation in ambulance provided by State Governments and
private service providers (PSPs) to patients are exempt under notification No. 25/2012- and that ambulance service
provided by PSPs to State Governments under National Health Mission is a service provided to Government by way of
public health and hence exempted under notification No. 25/2012.
2. The service tax exemption at Sl. No.2 of notification No. 25/2012 dated 20.06.2012 has been carried forward under
GST in the identical form vide Sl. No. 74 of notification No. 12/2017. The service tax exemption at serial No. 25(a) of
notification No. 25/2012 has also been substantially, although not in the same form, continued under GST vide Sl. No. 3
and 3A of the notification No. 12/2017. The said exemption entries under Service Tax and GST notification read as under.
Service Tax GST
Sl. No. 74: Services by way of-
Sl. No. 2: (i) Health care services by a clinical establishment, an
(a) health care services by a clinical establishment, an
authorized medical practitioner or para-medics;
authorized medical practitioner or para-medics;
(ii) Services provided by way of transportation of a patient in an
(b) services provided by way of transportation of a
ambulance, other than those specified in (i) above.
patient in an ambulance, other than those specified in
(a) above.
Sl. No. 3: Pure services (excluding works contract
service or other composite supplies involving supply
of any goods) provided to the Central Government,
State Government or Union territory or local
authority or a Governmental authority or a
Government Entity by way of any activity in relation
to any function entrusted to a Panchayat under article
243G of the Constitution or in relation to any
function entrusted to a Municipality under article 243
Sl. No.25(a): Services provided to Government, a local
authority or a governmental authority by way of water supply,
Sl. No. 3A: Composite supply of goods and services
public health, sanitation conservancy, solid waste management or
in which the value of supply of goods constitutes not
slum improvement and upgradation
more than 25 per cent. of the value of the said
composite supply provided to the Central
Government, State Government or Union territory
or local authority or a Governmental authority or a
Government Entity by way of any activity in relation
to any function entrusted to a Panchayat under article
243G of the Constitution or in relation to any
function entrusted to a Municipality under article 243
3. Functions of 'Health and sanitation' is entrusted to Panchayats under Article 243G of the Constitution of India read
with Eleventh Schedule. Function of 'Public health' is entrusted to Municipalities under Article 243 W of the Constitution
read with Twelfth schedule to the Constitution. Thus ambulance services are an activity in relation to the functions
entrusted to Panchayats and Municipalities under Articles 243G and 243 W of the Constitution.
4. In view of the above, it is clarified that the clarification contained in the Circular No. 210/2/2018- Service Tax dated
30th May, 2018 with regard to the services provided by Government and PSPs by way of transportation of patients in an
ambulance is applicable for the purpose of GST also, as the said services are specifically exempt under notification No.
12/2017- Central Tax (Rate) dated 28.06.2017 vide Sl. No. 74.
5. As regards the service provided by PSPs to the State Governments by way of transportation of patients on behalf of the
State Governments against consideration in the form of fee or otherwise charged from the State Government, it is clarified
that the same would be exempt under-
a. Sl. No. 3 of notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 if it is a pure service and not a
composite supply involving supply of any goods, and
b. Sl. No. 3A of notification No. 12/2017- Central Tax (Rate) dated 28.06.2017 if it is a composite supply of
goods and services in which the value of supply of goods constitutes not more than 25 per cent of the value of the
said composite supply.
Circular 210/2/2018-Service Tax: Applicability of service tax on ambulance services provided to government by
private service providers under the National Health Mission (NHM): The phrase "public health" is a general term
and will cover a number of activities which ensure the health of the public. In the Ministry of Health & Family Welfare's
reference, it has been stated that this activity of providing free ambulance services by the states is funded under the
National Health Mission (NHM). One of the core values of the NHM enlisted by the Framework for implementation of
National Health Mission (2012-2017) is to strengthen public health systems as a basis for universal access and social
protection against the rising costs of health care. As a part of its goals, outcomes and strategies the framework has
categorically stated that NHM will essentially focus on strengthening primary health care across the country. The
Framework further states that assured free transport in the form of Emergency Response System (ERS) and Patient
Transport Systems (PTS) is an essential requirement of the public hospital and one which would reduce the cost barriers to
institutional care.
Thus the provision of ambulance services to State governments under the NHM is a service provided to government by
way of public health and hence exempted under notification no 25/2012-Service Tax.
Circular No.53/27/2018-:Clarification regarding applicability of GST on the petroleum gases retained

for the manufacture of petrochemical and chemical products
1.References have been received regarding the applicability of GST on the petroleum gases retained for the manufacture of
petrochemical and chemical products during the course of continuous supply, such as Methyl Ethyl Ketone (MEK)
feedstock, petroleum gases etc.
2. In this context, it may be recalled that clarifications on similar issues for specific products have already been issued vide
circular Nos. 12/12/2017. These circulars apply mutatis mutandis to other cases involving same manner of supply as
mentioned in these circulars. However, references have again been received from some of the manufacturers of other
petrochemical and chemical products for issue of clarification on applicability of GST on petroleum gases, which are
supplied by oil refineries to them on a continuous basis through dedicated pipelines, while a portion of the raw material is
retained by these manufacturers (recipient of supply), and the remaining quantity is returned to the oil refineries. In this
regard, an issue has arisen as to whether in this transaction GST would be leviable on the whole quantity of the principal
raw materials supplied by the oil refinery or on the net quantity retained by the manufacturers of petrochemical and
chemical products.
3. The GST Council in its 28th meeting held on 21.7.2018 discussed this issue and recommended for issuance of a general
clarification for petroleum sector that in such transactions, GST will be payable by the refinery on the value of net quantity
of petroleum gases retained for the manufacture of petrochemical and chemical products.
4. Accordingly, it is hereby clarified that, in the aforesaid cases, GST will be payable by the refinery only on the net quantity
of petroleum gases retained by the recipient manufacturer for the manufacture of petrochemical and chemical products.
Though, the refinery would be liable to pay GST on such returned quantity of petroleum gases, when the same is supplied
by it to any other person. It is reiterated that this clarification would be applicable mutatis mutandis on other cases
involving supply of goods, where feed stock is retained by the recipient and remaining residual material is returned back to
the supplier. The net billing is done on the amount retained by the recipient.
CIRCULAR No. 55/29/2018: Taxability of services provided by Industrial Training Institutes (ITI)
1. Representations have been received requesting to clarify the following:
(a) Whether GST is payable on vocational training provided by private ITIs in designated trades and in other than
designated trades.
(b) Whether GST is payable on the service, provided by a private Industrial Training Institute for conduct of examination
against consideration in the form of entrance fee and also on the services relating to admission to or conduct of
examination.
2. With regard to the first issue, [Para 1(a) above], it is clarified that Private ITIs qualify as an educational institution as
defined under para 2(y) of notification No. 12/2017 if the education provided by these ITIs is approved as vocational
educational course. The approved vocational educational course has been defined in para 2(h) of notification ibid to mean
a course run by an ITI or an Industrial Training Centre affiliated to NCVT (National Council for Vocational Training) or
SCVT (State Council for Vocational Training) offering courses in designated trade notified under the Apprenticeship Act,
1961; or a Modular employable skill course, approved by NCVT, run by a person registered with DG Training in Ministry
of Skill Development. Therefore, services provided by a private ITI in respect of designated trades notified under
Apprenticeship Act, 1961 are exempt from GST under Sr. No. 66 of notification No. 12/2017. As corollary, services
provided by a private ITI in respect of other than designated trades would be liable to pay GST and are not exempt.
3. With regard to the second issue, [Para 1(b) above], it is clarified that in case of designated trades, services provided by a
private ITI by way of conduct of entrance examination against consideration in the form of entrance fee will also be
exempt from GST [Entry (aa) under Sr. No. 66 of notification No. 12/2017. Further, in respect of such designated trades,
services provided to an educational institution, by way of, services relating to admission to or conduct of examination by a
private ITI will also be exempt [Entry (b(iv)) under Sr. No. 66 of notification No. 12/2017. It is further clarified that in
case of other than designated trades in private ITIs, GST shall be payable on the service of conduct of examination against
consideration in the form of entrance fee and also on the services relating to admission to or conduct of examination by
such institutions, as these services are not covered by the exemption ibid.
4. As far as Government ITIs are concerned, services provided by a Government ITI to individual trainees/students, is
exempt under Sl. No. 6 of 12/2017 as these are in the nature of services provided by the Central or State Government to
individuals. Such exemption in relation to services provided by Government ITI would cover both - vocational training
and examinations conducted by these Government ITIs.
C H AP T E R
9
Reverse Charge Mechanism
Notification No.4/2017-Central Tax (Rate): Specified Goods under Reverse Charge
In exercise of the powers conferred by section 9(3) of the Central Goods and Services Tax Act, 2017 , the Central
Government, on the recommendations of the Council, hereby specifies the supply of goods, the description of which is
specified in the Table below, in respect of which the central tax shall be paid on reverse charge basis by the
recipient of the intra-state supply of such goods as specified in and all the provisions of the said Act shall apply to such
recipient, namely:-
SN Description of supply of Goods Supplier of goods Recipient of supply
7 Priority Sector Lending Certificate Any registered person Any registered person
CIRCULAR No.62/36/2018: Levy of GST on Priority Sector Lending Certificates (PSLC)
Representations have been received requesting to clarify the following: (i) Mechanism for discharge of tax liability on
trading of Priority Sector Lending Certificate (PSLC) for the period 1.7.2017 to 27.5.2018. (ii) GST rate applicable on
trading of PSLCs.
The representations have been examined. With the approval of the GST Implementation Committee of the GST Council,
it is clarified that GST on PSLCs for the period 1.7.2017 to 27.05.2018 will be paid by the seller bank on forward charge
basis and GST rate of 12% will be applicable on the supply.
Notification No. 13/2017- Central Tax (Rate): Specified Services under Reverse Charge
In exercise of the powers conferred by Section 9(3) of the Central Goods and Services Tax Act, 2017, the Central
Government on the recommendations of the Council hereby notifies that on categories of supply of services mentioned in
Table below, supplied by a person as specified, the whole of central tax leviable under section 9 of the said Central
Goods and Services Tax Act, shall be paid on reverse charge basis by the recipient of the such services as
specified in the said Table:-
SN Category of Supply of Services Supplier of service Recipient of Service
11 Services supplied by individual Direct Selling Individual Direct A banking company or a non-
Agents (DSAs) other than a body corporate, Selling Agents banking financial company, located
partnership or limited liability partnership (DSAs) other than in the taxable territory.
firm to bank or non-banking financial a body corporate,
company (NBFCs) partnership or
limited liability
partnership firm.
Explanation: For purpose of this notification,-
“Renting of immovable property” means allowing, permitting or granting access, entry, occupation, use or any
such facility, wholly or partly, in an immovable property, with or without the transfer of possession or control of
the said immovable property and includes letting, leasing, licensing or other similar arrangements in respect of
immovable property.’
2 C H AP T E R
11
Procedural Part: Registration
Circular No. 71/45/2018: Clarifications of issues under GST related to casual taxable person and
recovery of excess Input Tax Credit distributed by an Input Service distributor
1. Representations have been received seeking clarification on certain issues under the GST laws. The same have
been examined and the clarifications on the same are as below:
S.N Issue Clarification

1 Whether the amount required to be deposited 1. It has been noted that while applying for registration as
as advance tax while taking registration as a a casual taxable person, the FORM GST REG-1 seeks
casual taxable person (CTP) should be 100% of information regarding the “estimated net tax liability”
the estimated gross tax liability or the estimated only and not the gross tax liability.
tax liability payable in cash should be calculated
after deducting the due eligible ITC which 2. It is accordingly clarified that the amount of advance
might be available to CTP? tax which a casual taxable person is required to deposit
while obtaining registration should be calculated after
considering the due eligible ITC which might be available
to such taxable person.
2. As per section 27 of the Central Goods and 1. It is clarified that in case of long running exhibitions
Services Tax Act, 2017(hereinafter referred to (for a period more than 180 days), the taxable person
as the said Act), period of operation by causal cannot be treated as a CTP and thus such person would
taxable person is ninety days with provision for be required to obtain registration as a normal taxable
extension of same by the proper officer for a person.
further period not exceeding ninety days.
Various representations have been received for 2. While applying for normal registration the said person
further extension of the said period beyond the should upload a copy of the allotment letter granting him
period of 180 days, as mandated in law. permission to use the premises for the exhibition and the
allotment letter/consent letter shall be treated as the
proper document as a proof for his place of business.
3. In such cases he would not be required to pay advance

tax for the purpose of registration.
3
4. He can surrender such registration once the exhibition
is over.
CGST Rules, 2017

4 – Registration
Rule 22: (1) Where the proper officer has reasons to believe that the registration of a person is liable to be
Cancellation of cancelled under section 29, he shall issue a notice to such person in FORM GST REG-17, requiring
registration him to show cause, within a period of seven working days from the date of the service of such notice,
as to why his registration shall not be cancelled.
(2) The reply to the show cause notice issued under sub-rule (1) shall be furnished in FORM REG–
18 within the period specified in the said sub-rule.
(3) Where a person who has submitted an application for cancellation of his registration is no longer
liable to be registered or his registration is liable to be cancelled, the proper officer shall issue an order
in FORM GST REG-19, within a period of thirty days from the date of application submitted under
sub-rule (1) of rule 20 or, as the case may be, the date of the reply to the show cause issued under
sub-rule (1), cancel the registration, with effect from a date to be determined by him and notify the
taxable person, directing him to pay arrears of any tax, interest or penalty including the amount liable
to be paid under sub-section (5) of section 29.
(4) Where the reply furnished under sub-rule (2) is found to be satisfactory, the proper officer shall
drop the proceedings and pass an order in FORM GST REG –20.
Provided that where the person instead of replying to the notice served under sub-rule (1) for
contravention of the provisions contained in clause (b) or clause (c) of sub-section (2) of
section 29 (2)(b),(c) furnishes all the pending returns and makes full payment of the tax dues
along with applicable interest and late fee, the proper officer shall drop the proceedings and
pass an order in FORM GST-REG 20.
(5) The provisions of sub-rule (3) shall, mutatis mutandis, apply to the legal heirs of a deceased
proprietor, as if the application had been submitted by the proprietor himself.
C H AP T E R
13
Manner of Payment of GST
Section 52: Collection of tax at source
Notification No. 02/2018 – Integrated Tax: In exercise of the powers conferred by the second proviso to section 20 of
the Integrated Goods and Services Tax Act, 2017 , read with section 52(1) of the Central Goods and Services Tax Act,
2017, the Central Government, on the recommendations of the Council, hereby notifies that every electronic commerce
operator, not being an agent, shall collect an amount calculated at a rate of 1% of the net value of inter-State taxable
supplies made through it by other suppliers where consideration with respect to such supplies is to be collected by the said
operator.
CHAPTER
14
INVOICE (TAX INVOICE, CREDIT AND DEBIT NOTES)
CGST RULES, 2017

Rule 55: (5) Where the goods are being transported in a semi knocked down or completely knocked down
Transportation of condition -or in batches or lots -
goods without
issue of invoice (a) the supplier shall issue the complete invoice before dispatch of the first consignment;
(b) the supplier shall issue a delivery challan for each of the subsequent consignments, giving
reference of the invoice;
(c) each consignment shall be accompanied by copies of the corresponding delivery challan along
with a duly certified copy of the invoice; and
(d) the original copy of the invoice shall be sent along with the last consignment.
Circular No. 72/46/2018: Circular to clarify the procedure in respect of return of time Expired drugs or medicines
1. Various representations have been received seeking clarification on the procedure to be followed in respect of return of
time expired drugs or medicines under the GST laws. The issues raised in the said representations have been examined and
to ensure uniformity in the implementation of the law across the field formations, the Board, in exercise of its powers
conferred under section 168(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “CGST
Act”) hereby clarifies the issue in succeeding paragraphs.
2. The common trade practice in the pharmaceutical sector is that the drugs or medicines (hereinafter referred to as
“goods”) are sold by the manufacturer to the wholesaler and by the wholesaler to the retailer on the basis of an invoice/bill
of supply as case may be. It is significant to mention here that such goods have a defined life term which is normally
referred to as the date of expiry. Such goods which have crossed their date of expiry are colloquially referred to as time
expired goods and are returned back to the manufacturer, on account of expiry, through the supply chain.
3. It is clarified that the retailer/ wholesaler can follow either of the below mentioned procedures for the return of the time
expired goods:
(A) Return of time expired goods to be treated as fresh supply:
a) In case the person returning the time expired goods is a registered person (other than a composition taxpayer), he may,
at his option, return the said goods by treating it is as a fresh supply and thereby issuing an invoice for the same
(hereinafter referred to as the, “return supply”). The value of the said goods as shown in the invoice on the basis of which
the goods were supplied earlier may be taken as the value of such return supply. The wholesaler or manufacturer, as the
case may be, who is the recipient of such return supply, shall be eligible to avail Input Tax Credit (hereinafter referred to as
“ITC”) of the tax levied on the said return supply subject to the fulfilment of the conditions specified in Section 16 of
the CGST Act.
b) In case the person returning the time expired goods is a composition taxpayer, he may return the said goods by issuing a
bill of supply and pay tax at the rate applicable to a composition taxpayer. In this scenario there will not be any availability
of ITC to the recipient of return supply.
c) In case the person returning the time expired goods is an unregistered person, he may return the said goods by issuing
any commercial document without charging any tax on the same.
d) Where the time expired goods which have been returned by the retailer/wholesaler are destroyed by the manufacturer,
he/she is required to reverse the ITC availed on the return supply in terms of the provisions of clause (h) of sub-section (5)
of section 17 of the CGST Act. It is pertinent to mention here that the ITC which is required to be reversed in such
scenario is the ITC availed on the return supply and not the ITC that is attributable to the manufacture of such time
expired goods.
Illustration: Supposedly, manufacturer has availed ITC of ₹ 10/- at the time of manufacture of medicines valued at ₹
100/-. At the time of return of such medicine on the account of expiry, the ITC available to the manufacturer on the basis
of fresh invoice issued by wholesaler is ₹ 15/-. So, when the time expired goods are destroyed by the manufacturer he
would be required to reverse ITC of ₹ 15/- and not of ₹ 10/-.
(B) Return of time expired goods by issuing Credit Note:
a) As per Section 34(1) of the CGST Act the supplier can issue a credit note where the goods are returned back by the
recipient. Thus, the manufacturer or the wholesaler who has supplied the goods to the wholesaler or retailer, as the case
may be, has the option to issue a credit note in relation to the time expired goods returned by the wholesaler or retailer, as
the case may be. In such a scenario, the retailer or wholesaler may return the time expired goods by issuing a delivery
challan. It may be noted that there is no time limit for the issuance of a credit note in the law except with regard to the
adjustment of the tax liability in case of the credit notes issued prior to the month of September following the end of the
financial year and those issued after it.
b) It may further be noted that if the credit note is issued within the time limit specified in section 34(2) of the CGST Act,
the tax liability may be adjusted by the supplier, subject to the condition that the person returning the time expired goods
has either not availed the ITC or if availed has reversed the ITC so availed against the goods being returned.
c) However, if the time limit specified in of section 34(1) of the CGST Act has lapsed, a credit note may still be issued by
the supplier for such return of goods but the tax liability cannot be adjusted by him in his hands. It may further be noted
that in case time expired goods are returned beyond the time period specified in the section 34(1) of the CGST Act and a
credit note is issued consequently, there is no requirement to declare such credit note on the common portal by the
supplier (i.e. by the person who has issued the credit note) as tax liability cannot be adjusted in this case.
d) Further, where the time expired goods, which have been returned by the retailer/wholesaler, are destroyed by the
manufacturer, he/she is required to reverse the ITC attributable to the manufacture of such goods, in terms of the
provisions of section 17(5)(h) of the CGST Act. This has been illustrated in table below:
Date of Supply of Date of return of time Treatment in terms of tax liability & credit note
goods from expired goods from
manufacturer/ retailer / wholesaler to
wholesaler to wholesaler / manufacturer
wholesaler/ retailer
Case 1 1st July, 2017 20th September, 2018 Credit note will be issued by the supplier (manufacturer /
wholesaler) and the same to be uploaded by him on the
common portal. Subsequently, tax liability can be adjusted
by such supplier provided the recipient (wholesaler /
retailer) has either not availed the ITC or if availed has
reversed the ITC.
Case 2 1st July, 2017 20th October, 2018 Credit note will be issued by the supplier (manufacturer /
wholesaler) but there is no requirement to upload the same
on the common portal. Subsequently tax liability cannot be
adjusted by such supplier.
3. It may be noted that though this circular discusses the scenarios in relation to return of goods on account of expiry of
the same, it may be applicable to such other scenarios where the goods are returned on account of reasons other than the
one detailed above.
C H AP T E R
15
Input Tax Credit
Section 16: Eligibility and conditions for taking input tax credit
CGST RULES, 2017
Rule 36 : (1) Documents: The input tax credit shall be availed by a registered person, including the
Documentary Input Service Distributor, on the basis of any of the following documents, namely,-
requirements and
conditions for (a) An invoice issued by the supplier of goods or services or both in accordance with the
claiming input tax provisions of section 31;
credit
(b) An invoice issued in accordance with the provisions of clause (f) of sub-section (3) of
section 31, subject to the payment of tax;
(c) A debit note issued by a supplier in accordance with the provisions of section 34;
(d) A bill of entry or any similar document prescribed under the Customs Act, 1962 or
rules made thereunder for the assessment of integrated tax on imports;
(e) An Input Service Distributor invoice or Input Service Distributor credit note or any
document issued by an Input Service Distributor in accordance with the provisions of sub-
rule (1) of rule 54.
(2) ITC subject to GSTR-2: Input tax credit shall be availed by a registered person only if all the
applicable particulars as specified in the provisions of Chapter VI are contained in the said
document, and the relevant information, as contained in the said document, is furnished in FORM
GSTR-2 by such person.
Provided that if the said document does not contain all the specified particulars but contains the
details of the amount of tax charged, description of goods or services, total value of supply of
goods or services or both, GSTIN of the supplier and recipient and place of supply in case of inter-
State supply, input tax credit may be availed by such registered person.
(3) No ITC where tax paid against order (fraud): No input tax credit shall be availed by a
registered person in respect of any tax that has been paid in pursuance of any order where any
demand has been confirmed on account of any fraud, willful misstatement or suppression of facts.
Rule 37 Reversal of (1) Furnish Detail of Non Payment in GSTR-2: A registered person, who has availed of input
input tax credit in tax credit on any inward supply of goods or services or both, but fails to pay to the supplier thereof,
the case of non- the value of such supply along with the tax payable thereon, within the time limit specified in the
payment of second proviso to section 16(2), shall furnish the details of such supply, the amount of value
consideration not paid and the amount of input tax credit availed of proportionate to such amount not paid to the
supplier in FORM GSTR-2 for the month immediately following the period of one hundred and
eighty days from the date of the issue of the invoice:
Provided that the value of supplies made without consideration as specified in Schedule I of the
said Act shall be deemed to have been paid for the purposes of the second proviso to section 16(2).
Provided further that the value of supplies on account of any amount added in accordance with the
provisions of clause (b) of section 15(2) shall be deemed to have been paid for the purposes of the
second proviso to section 16(2).
(2) Increase output Tax Liability: The amount of input tax credit referred to in sub-rule (1) shall
be added to the output tax liability of the registered person for the month in which the details are
furnished.
(3) Interest: The registered person shall be liable to pay interest at the rate notified under section
50(1) for the period starting from the date of availing credit on such supplies till the date when the
amount added to the output tax liability, as mentioned in sub-rule (2), is paid.
(4) Time limit of 1 year not applicable for re-availment: The time limit specified in section 16(4)
shall not apply to a claim for re-availing of any credit, in accordance with the provisions of the Act
or the provisions of this Chapter that had been reversed earlier.
Circular No. 16/16/2017-GST
Circular No. 47/21/2018- Clarifications of certain issues under GST
Representations have been received seeking clarification on certain issues under the GST laws. The same have been
examined and the clarifications on the same are as below:
SN Issue Clarification
1 Whether moulds and dies owned 1.1 Moulds and dies owned by the original equipment manufacturer (OEM)
by Original Equipment which are provided to a component manufacturer (the two not being related
Manufacturers (OEM) that are persons or distinct persons) on FOC basis does not constitute a supply as
sent free of cost (FOC) to a there is no consideration involved. Further, since the moulds and dies are
component manufacturer is provided on FOC basis by the OEM to the component manufacturer in the
leviable to tax and whether OEMs course or furtherance of his business, there is no requirement for reversal of
are required to reverse input tax input tax credit availed on such moulds and dies by the OEM.
credit in this case?
1.2 It is further clarified that while calculating the value of the supply made by
the component manufacturer, the value of moulds and dies provided by the
OEM to the component manufacturer on FOC basis shall not be added to the
value of such supply because the cost of moulds/dies was not to be incurred
by the component manufacturer and thus, does not merit inclusion in the value
of supply in terms of section 15(2)(b) of the Central Goods and Services Tax
Act, 2017 (CGST Act for short).
1.3 However, if the contract between OEM and component manufacturer was
for supply of components made by using the moulds/dies belonging to the
component manufacturer, but the same have been supplied by the OEM to the
component manufacturer on FOC basis, the amortised cost of such
moulds/dies shall be added to the value of the components. In such cases,
the OEM will be required to reverse the credit availed on such moulds/
dies, as the same will not be considered to be provided by OEM to the
component manufacturer in the course or furtherance of the former’s
business.
2 How is servicing of cars involving 2.1 The taxability of supply would have to be determined on a case to case
both supply of goods (spare parts) basis looking at the facts and circumstances of each case.
and services (labour), where the
value of goods and services are 2.2 Where a supply involves supply of both goods and services and the value
shown separately, to be treated of such goods and services supplied are shown separately, the goods and
under GST? services would be liable to tax at the rates as applicable to such goods and
services separately.
CA. Raj Kumar Misc. Provisions
C H AP T E R
16
E-Way Bill
Rule : 138. (14) Notwithstanding anything contained in this rule, no e-way bill is required to be generated-
Information to be
furnished prior to (o) Where empty cylinders for packing of liquefied petroleum gas are being moved for reasons
commencement of other than supply.
movement of goods
and generation of e-
way bill.-
Rule 138A Documents (1) The person in charge of a conveyance shall carry-
and devices to be
carried by a person- (a) the invoice or bill of supply or delivery challan, as the case may be; and
in-charge of a
(b) a copy of the e-way bill in physical form or the e-way bill number in electronic form or
conveyance
mapped to a Radio Frequency Identification Device embedded on to the conveyance in such
manner as may be notified by the Commissioner:
Provided that nothing contained in clause (b) of this sub-rule shall apply in case of movement
of goods by rail or by air or vessel.
Provided further that in case of imported goods, the person in charge of a conveyance
shall also carry a copy of the bill of entry filed by the importer of such goods and shall
indicate the number and date of the bill of entry in Part A of FORM GST EWB-01.
Rule : 138C (1) A summary report of every inspection of goods in transit shall be recorded online by the
Inspection and proper officer in Part A of FORM GST EWB-03 within twenty four hours of inspection
verification of goods and the final report in Part B of FORM GST EWB-03 shall be recorded within three
days of such inspection.
Provided that where the circumstances so warrant, the Commissioner, or any other officer
authorised by him, may, on sufficient cause being shown, extend the time for recording of the
final report in Part B of FORM EWB-03, for a further period not exceeding three days.
Explanation.- The period of twenty four hours or, as the case may be, three days shall be counted
from the midnight of the date on which the vehicle was intercepted.
(2) Where the physical verification of goods being transported on any conveyance has been
done during transit at one place within the State or Union territory or in any other State or
Union territory, no further physical verification of the said conveyance shall be carried out again
in the State or Union territory, unless a specific information relating to evasion of tax is made
available subsequently.
Circular No. 47/21/2018- Clarifications of certain issues under GST
1 In case of transportation of goods by As per proviso to rule 138(2A) of the Central Goods and Services Tax
railways, whether goods can be delivered Rules, 2017 (CGST Rules for short), the railways shall not deliver the
even if the e-way bill is not produced at goods unless the e-way bill is produced at the time of delivery.
the time of delivery?
2 Whether e-way bill is required in the (i) It may be noted that e-way bill generation is not dependent on
following cases- whether a supply is inter-State or not, but on whether the movement of
goods is inter-State or not. Therefore, if the goods transit through a
(i) Where goods transit through another second State while moving from one place in a State to another place in
State while moving from one area in a the same State, an e-way bill is required to be generated.
State to another area in the same State.
(ii) Where goods move from a DTA unit to a SEZ unit or vice versa
(ii) Where goods move from a DTA unit located in the same State, there is no requirement to generate an e-way
to a SEZ unit or vice versa located in bill, if the same has been exempted under Rule 138(14)(d) of the CGST
the same State. Rules.
Circular No. 61/35/2018: E-way bill in case of storing of goods in godown of transporter
1. Various representations have been received on the matter pertaining to the textile sector and problems being faced by
weavers & artisans regarding storage of their goods in the warehouse of the transporter. It has been stated that textile
traders use transporters’ godown for storage of their goods due to their weak financial conditions. The transporters
providing such warehousing facility will have to get themselves registered under GST and maintain detailed records in cases
where the transporter takes delivery of the goods and temporarily stores them in his warehouse for further transportation
of the goods till the consignee/recipient taxpayer’s premises. The transport industry is facing difficulties due to the same
and a request has been made to treat these godowns as transit godowns.
2. In view of the difficulties being faced by the transporters and the consignee/recipient taxpayer and to ensure uniformity
in the procedure across the sectors and the country, the Board in exercise of its power conferred under section 168(1) of
the Central Goods and Services Tax Act, 2017 (hereafter referred to as the CGST Act) hereby clarifies the issues in the
succeeding paragraphs.
3. As per rule 138 of the Central Goods and Services Tax Rules, 2017 (hereinafter referred to as the CGST Rules) e-way
bill is a document which is required for the movement of goods from the supplier’s place of business to the recipient
taxpayer’s place of business. Therefore, the goods in movement including when they are stored in the transporter's godown
(even if the godown is located in the recipient taxpayer’s city/town) prior to delivery shall always be accompanied by a valid
e-way bill.
4. Further, section 2(85) of the CGST Act defines the “place of business” to include “a place from where the business is
ordinarily carried out, 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”. An additional place of business is the place of business from where
taxpayer carries out business related activities within the State, in addition to the principal place of business.
5. Thus, in case the consignee/ recipient taxpayer stores his goods in the godown of the transporter, then the transporter’s
godown has to be declared as an additional place of business by the recipient taxpayer. In such cases, mere declaration by
the recipient taxpayer to this effect with the concurrence of the transporter in the said declaration will suffice. Where the
transporter’s godown has been declared as the additional place of business by the recipient taxpayer, the transportation
under the e-way bill shall be deemed to be concluded once the goods have reached the transporter’s godown (recipient
taxpayer’ additional place of business). Hence, e-way bill validity in such cases will not be required to be extended.
6. Further, whenever the goods are transported from the transporters’ godown , which has been declared as the additional
place of business of the recipient taxpayer, to any other premises of the recipient taxpayer then, the relevant provisions of
the e-way bill rules shall apply. Hence, whenever the goods move from the transporter’s godown (i.e, recipient taxpayer’s
additional place of business) to the recipient taxpayer’s any other place of business, a valid e-way bill shall be required, as
per the extant State-specific e-way bill rules.
7. Further, the obligation of the transporter to maintain accounts and records as specified in section 35 of the CGST
Act read with rule 58 of the CGST Rules shall continue as a ware-housekeeper. Furthermore, the recipient taxpayer shall
also maintain accounts and records as required under rules 56 and 57 of the CGST Rules. Furthermore, as per rule 56
(7) of the CGST Rules, books of accounts in relation to goods stored at the transporter’s godown (i.e., the recipient
taxpayer’s additional place of business) by the recipient taxpayer may be maintained by him at his principal place of
business. It may be noted that the facility of declaring additional place of business by the recipient taxpayer is in no way
putting any additional compliance requirement on the transporters.
Misc. Circulars
Circular No. 66/40/2018: GST on Residential programmes or camps meant for advancement of religion,
spirituality or yoga by religious and charitable trusts
1. Certain representations have been received seeking clarification as regards applicability of GST on residential
programmes or camps meant for advancement of religion, spirituality or yoga where the fee charged includes the cost of
boarding and lodging.
2.1 The relevant portion reads as under:
“The services provided by entity registered under Section 12AA of the Income Tax Act, 1961 by way of advancement of
religion, spirituality or yoga are exempt. Fee or consideration charged in any other form from the participants for
participating in a religious, Yoga or meditation programme or camp meant for advancement of religion, spirituality or yoga
shall be exempt.
Residential programmes or camps where the fee charged includes cost of lodging and boarding shall also be exempt as long
as the primary and predominant activity, objective and purpose of such residential programmes or camps is advancement
of religion, spirituality or yoga. However, if charitable or religious trusts merely or primarily provide
accommodation or serve food and drinks against consideration in any form including donation, such activities
will be taxable. Similarly, activities such as holding of fitness camps or classes such as those in aerobics, dance,
music etc. will be taxable”.
3. It is accordingly clarified that taxability of the services of religious and charitable trusts by way of residential
programmes or camps meant for advancement of religion, spirituality or yoga may be decided accordingly.
Circular No. 57/31/2018: Scope of Principal-agent relationship in the context of Schedule I of the CGST Act
1. In terms of Schedule I of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the “CGST
Act”), the supply of goods by an agent on behalf of the principal without consideration has been deemed to be a
supply. In this connection, various representations have been received regarding the scope and ambit of the
principal-agent relationship under GST.
In order to clarify some of the issues and to ensure uniformity in the implementation of the provisions of the law across
the field formations, the Board, in exercise of its powers conferred under section 168 (1) of the CGST Act hereby clarifies
the issues in the succeeding paras.
Supply of goods-
(a) by a principal to his agent where the agent undertakes to supply such goods on behalf of the principal; or
(b) by an agent to his principal where the agent undertakes to receive such goods on behalf of the principal.
2. Here also, it is worth noticing that all the activities between the principal and the agent and vice versa do not fall within
the scope of the said entry. Firstly, the supply of services between the principal and the agent and vice versa is outside the
ambit of the said entry, and would therefore require “consideration” to consider it as supply and thus, be liable to GST.
Secondly, the element identified in the definition of “agent”, i.e., “supply or receipt of goods on behalf of the
principal” has been retained in this entry.
3. It may be noted that the crucial factor is how to determine whether the agent is wearing the representative hat and is
supplying or receiving goods on behalf of the principal. Since in the commercial world, there are various factors that might
influence this relationship, it would be more prudent that an objective criteria is used to determine whether a particular
principal-agent relationship falls within the ambit of the said entry or not. Thus, the key ingredient for determining
relationship under GST would be whether the invoice for the further supply of goods on behalf of the principal is being
issued by the agent or not. Where the invoice for further supply is being issued by the agent in his name then, any
provision of goods from the principal to the agent would fall within the fold of the said entry. However, it may be noted
that in cases where the invoice is issued by the agent to the customer in the name of the principal, such agent shall not fall
within the ambit of Schedule I of the CGST Act. Similarly, where the goods being procured by the agent on behalf of the
principal are invoiced in the name of the agent then further provision of the said goods by the agent to the principal would
be covered by the said entry. In other words, the crucial point is whether or not the agent has the authority to pass or
receive the title of the goods on behalf of the principal.
4. Looking at the convergence point between the character of the agent under both the CGST Act and the Indian Contract
Act, 1872, the following scenarios are discussed:
Scenario 1
Mr. A appoints Mr. B to procure certain goods from the market. Mr. B identifies various suppliers who can provide the
goods as desired by Mr. A, and asks the supplier (Mr. C) to send the goods and issue the invoice directly to Mr. A. In this
scenario, Mr. B is only acting as the procurement agent, and has in no way involved himself in the supply or receipt of the
goods. Hence, in accordance with the provisions of this Act, Mr.B is not an agent of Mr. A for supply of goods in terms of
Schedule I.
Scenario 2
M/s XYZ, a banking company, appoints Mr. B (auctioneer) to auction certain goods. The auctioneer arranges for the
auction and identifies the potential bidders. The highest bid is accepted and the goods are sold to the highest bidder by
M/s XYZ. The invoice for the supply of the goods is issued by M/s XYZ to the successful bidder. In this scenario, the
auctioneer is merely providing the auctioneering services with no role played in the supply of the goods. Even in this
scenario, Mr. B is not an agent of M/s XYZ for the supply of goods in terms of Schedule I.
Scenario 3
Mr. A, an artist, appoints M/s B (auctioneer) to auction his painting. M/s B arranges for the auction and identifies the
potential bidders. The highest bid is accepted and the painting is sold to the highest bidder. The invoice for the supply of
the painting is issued by M/s B on the behalf of Mr. A but in his own name and the painting is delivered to the successful
bidder. In this scenario, M/s B is not merely providing auctioneering services, but is also supplying the painting on behalf
of Mr. A to the bidder, and has the authority to transfer the title of the painting on behalf of Mr. A. This scenario is
covered under Schedule I.
Scenario 4
Mr A sells agricultural produce by utilizing the services of Mr B who is a commission agent as per the Agricultural Produce
Marketing Committee Act (APMC Act) of the State. Mr B identifies the buyers and sells the agricultural produce on behalf
of Mr. A for which he charges a commission from Mr. A. As per the APMC Act, the commission agent is a person who
buys or sells the agricultural produce on behalf of his principal, or facilitates buying and selling of agricultural produce on
behalf of his principal and receives, by way of remuneration, a commission or percentage upon the amount involved in
such transaction.
In cases where the invoice is issued by Mr. B to the buyer, the former is an agent covered under Schedule I. However, in
cases where the invoice is issued directly by Mr. A to the buyer, the commission agent (Mr. B) doesn‟t fall under the
category of agent covered under Schedule I.
9. In scenario 1 and scenario 2, Mr. B shall not be liable to obtain registration in terms of clause (vii) of section 24 of
the CGST Act. He, however, would be liable for registration if his aggregate turnover of supply of taxable services exceeds
the threshold specified in sub-section (1) of section 22 of the CGST Act. In scenario 3, M/s B shall be liable for
compulsory registration in terms of the clause (vii) of section 24 of the CGST Act. In respect of commission agents in
Scenario 4, notification No. 12/2017 Central Tax (Rate) dated 24.06.2017 has exempted “services by any APMC or board
or services provided by the commission agents for sale or purchase of agricultural produce” from GST. Thus, the
„services‟ provided by the commission agent for sale or purchase of agricultural produce is exempted. Such commission
agents (even when they qualify as agent under Schedule I) are not liable to be registered according to sub-clause (a) of sub-
section (1) of section 23 of the CGST Act, if the supply of the agricultural produce, and /or other goods or services
supplied by them are not liable to tax or wholly exempt under GST. However, in cases where the supply of agricultural
produce is not exempted and liable to tax, such commission agent shall be liable for compulsory registration under sub-
section (vii) of section 24 of the CGST Act.

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INDIRECT TAXATION

made or agreed to be made for a consideration by a person in the course or furtherance of

(c) The activities specified in Schedule I, made or agreed to be made WITHOUT A

ACTIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION

2. Supply of goods or services or both between related persons or between distinct

(d) The activities to be treated as supply of goods or supply of services as referred to in

ACTIVITIES OR TRANSACTIONS TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY

(a) Activities or transactions specified in Schedule III; or

shall be treated neither as a supply of goods nor a supply of services.

ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A

1. Services by an employee to the employer in the course of or in relation to his employment.

4. Services of funeral, burial, crematorium or mortuary including transportation of the deceased.

6. Actionable claims, other than lottery, betting and gambling.

‘Explanation 2.––For the purposes of paragraph 8, the expression “warehoused goods”

(a) A supply of goods and not as a supply of services; or

(b) A supply of services and not as a supply of goods.

LIST 0F EXEMPTED SERVICES

24A. Services by way of warehousing of minor forest produce.

55A. Services by way of artificial insemination of livestock (other than horses)

(i) activities relating to the welfare of industrial or agricultural labour or farmers; or

Notification No. 9/2017-Integrated Tax (Rate)

In addition to above 82 exemptions…

1. Doubts have been raised as to,-

Circular No. 51/25/2018: Applicability of GST on ambulance services provided to Government by

Circular No.53/27/2018-:Clarification regarding applicability of GST on the petroleum gases retained

1. Representations have been received requesting to clarify the following:

Notification No.4/2017-Central Tax (Rate): Specified Goods under Reverse Charge

SN Description of supply of Goods Supplier of goods Recipient of supply

CIRCULAR No.62/36/2018: Levy of GST on Priority Sector Lending Certificates (PSLC)

Explanation: For purpose of this notification,-

S.N Issue Clarification

3. In such cases he would not be required to pay advance

CGST Rules, 2017

Section 52: Collection of tax at source

CGST RULES, 2017

(B) Return of time expired goods by issuing Credit Note:

CGST RULES, 2017

claiming input tax provisions of section 31;

Circular No. 47/21/2018- Clarifications of certain issues under GST

commencement of other than supply.

Circular No. 47/21/2018- Clarifications of certain issues under GST

2.1 The relevant portion reads as under:

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