ThemodelGSTlawhasbeenreleasedon14thJune,2016.

ItoutlaysthebasicstructureoftheCGST
actSGSTactstobebasedonthestructurelaidout.ThedraftoftheIGSTacthasbeenalsoreleased
asapartoftheModelGSTlaw.
ThekeyfeaturesoftheModelaresummarisedasunder:
1.ScopeofGST:
TheactisextendedtowholeofIndiaincludingJammu&Kashmir.Therecanbedifferentappointed
datesindifferentstates.

2.BasicDefinitions:
Section2oftheactcontains109definitions.Fewimportantdefinitionsarecoveredasunder:
Business: The definition of Business is an inclusive definition and covers various spheres of
transactions including the services. It includes any trade, commerce,manufacture, profession,
vocation or any other similar activity,whether or not it is for a pecuniary benefit. Further, it
includesanytransactionswithoutconsideringthevolume,frequency,continuityorregularityof
suchtransaction.
Consideration:Itincludesthepaymentmadeortobemadeinmoneyorotherwiseforsupplyof
goodsorservices.Itincludesthemonetaryvalueofanyactorforbearanceinrespectoforin
responsetoinducementofthesupplyofgoodsandservices.
Goods:Itincludeseverykindofmoveablepropertyotherthanactionableclaimsandmoney.It
alsoincludessecurities,growingcrops,grassandthingsattachedorformingpartoftheland.
Services: It means anything other than goods. It includes actionable claims and intangible
propertybutnotmoney.
3.Supply:(Sec3)Itincludes
Allformsofsupplies,sale,transfer,barter,exchange,license,rental,leaseordisposaletc.
Importofservicewithorwithoutconsideration.
Certainsuppliestobetreatedassupplywithoutconsiderationare(ScheduleI):
Permanenttransfer/disposalofbusinessassets.
Temporaryapplicationofbusinessassetstoaprivateornonbusinessuse(definedassupplyof
serviceinScheduleII).
Servicesputtoaprivateornonbusinessuse.
Assetsretainedafterderegistration.
Supplyofgoodsand/orservicesbyataxablepersontoanothertaxableornontaxableperson
inthecourseorfurtheranceofbusiness.

Transactionbetweenagentandprincipalforanagreedcommissionorbrokerage.
Supplyofanybrandedservicebyanaggregatorunderabrandnameortradenameownedby
him.
ScheduleIIlaysdownthetransactionstobetreatedassupplyofgoodsandsupplyofservices.Apart
fromthesaidschedule,CentralGovt.(CG)orStateGovt.(SG)maynotifyastowhichtransactionsto
betreatedassupplyofgoodsorsupplyofservices.(ItmayleadtoincreaseintaxesiftherateofGST
onsupplyofgoodsandsupplyofservicesareseparate.)
4.LevyandCollectionoftax:
CGorSGmaynotifythegoodsandservicesonwhichthetaxshallbeleviedunderreversecharge
basis.
A registered taxable person whose aggregate turnover is less than Rs.50 lakh can opt for
Compositionscheme.Therateoftaxpayablewillbe1%oftheturnoverduringtheyear.
Theschemecannotbeavailedbyanysupplierwhodealsininterstatesupplies.
5.Timeofsupply:
A)Forwardcharge:
(1)SupplyofGoods:TheliabilitytopayCGST/SGSTonthegoodsunderforwardchargeshallarise
atthetimeofsupplywhichistheearliestofthefollowingdates:
Scenarios

Pointoftaxation

Wheregoodsare
removed

Dateofremovalofgoods
Dateofinvoice
Dateofpaymentofthesupply
Date of receipt of goods in books of the
recipient
whicheverisearlier

Wheregoodsare
notremoved

Dateonwhichgoodsaremadeavailableto
recipient
Dateofinvoice
Dateofpaymentofthesupply
Date of receipt of goods in books of the
recipient
whicheverisearlier

(2)SupplyofServices:TheliabilitytopayCGST/SGSTonservicesunderforwardchargeshallariseat
thetimeofsupplyasfollows:
Scenarios

Pointoftaxation

a)Invoiceissuedwithin
prescribedtimeperiod

dateofissueofinvoice
or
thedateofreceiptofpayment
whicheverisearlier

b)Invoicenotissued
withinprescribed
period

dateofcompletionofprovisionofservice
or
dateofreceiptofpayment
whicheverisearlier

c)Whereprovisions(a)
or(b)donotapply

dateonwhichtherecipientshowsthe
receiptofservicesinhisbooksofaccount

B)Reversecharge:
Goodsandservices:TheliabilitytopayCGST/SGSTonthegoodsunderreversechargeshallarise
atthetimeofsupplywhichistheearliestofthefollowingdates:
a)Dateofreceiptofgoods

b)Dateofreceiptofinvoice

c)Dateofmakingpayment

d)Dateofdebitinthebooksofaccounts

C)ContinuousSupply:
(1)Goods:TheliabilitytopayCGST/SGSTonservicesundercontinuoussupplyshallariseatthetime
ofsupplyasfollows:
Scenarios

Pointoftaxation

Successivestatementsof
accounts/paymentsexist

Dateofexpiryofsuchperiod

NoSuccessivestatementsof
accounts/paymentsexist

Dateofissueofinvoice
or
dateofreceiptofpayment,
whicheverisearlier

(2)Services:The liability to pay CGST/SGST on services undercontinuous supply shall arise at the
timeofsupplyasfollows:
Scenarios

Pointoftaxation

Whereduedateis
ascertainablefromthecontract

Dateofpaymentliabletobemade

Whereduedateisnot
ascertainablefromthecontract

Dateofpayment
or
Dateofinvoice
whicheverisearlier

Paymentlinkedtocompletion
oftheevent

Timeofcompletionoftheevent

(3)Specificscenarios:ThepointoftaxationofCGST/SGSTonsupplyofgoodsandservicesunder
thespecificscenariosshallbedeterminedinthefollowingmanner:
Scenarios

Pointoftaxation

Whereitisnotpossibleto
determinewhenthesupply
willtakeplace(e.g.saleon
approvalbasis)

whenitbecomesknownthatthe
supplyhastakenplaceor,6months
fromdateofremoval,whicheveris
earlier

Wheresupplyofservices
ceasesunderacontract
beforethecompletionofthe
supply

whenthesupplyceases

E)Residuary:When the point of taxation cannot be determined from the above rules, the following
ruleshallbefollowed:
Whereaperiodicalreturnistobefiled,thedateonwhichsuchreturnistobefiled,or,
Inanyothercase,thedateonwhichCGST/SGSTispaid
6.Valueofsupply:
Value of taxable supply of goods and services shall be the transaction value (actual price paid or
payableonlywherethepriceisthesoleconsiderationforthesupplyandthesupplierandtherecipient
ofthesupplyarenotrelatedtoeachother).
Where the above method cannot be applied, the GST Valuation (Determination of the Value of
SupplyofGoodsandServices)Rules,2016providesothermethodstobeappliedhierarchywise:
Rule4:Transactionvalueofgoodsandservicesoflikekind:
Transaction value of the like quantity and quality at and about the same time adjusted with the
differenceintime,quantity,freightandinsurancechargesetc.
Rule5:Computedvaluemethod:
Valuecanbecomputedbyaddingthecostofproduction,costofservices,designcharges,profit
andgeneralexpensesofsamekindorclassofgoodsorservices.
Rule6:Residualmethod:
Valuedeterminedbyusingreasonablemeansconsistentwiththeprinciples&generalprovisions
oftheserules.
Rule7:Rejectionofdeclaredvalue:
Therelevantofficermaydeterminethevalueaspertheabovestatedrulesifthereisreasonable
doubt for the reasons to be recorded in writing, that the declared value does not represent the
transactionvalue.
Rule8:Valuationincertaincases:
Theruleprescribesthevaluationmethodincaseofpureagentandmoneychanger.

ValuationRulesaresimilartothoseofCustomValuationRules,2007.Rule8oftheValuationRules
regardingthesupplyofservicesissimilartotheexistingprovisionsincurrentlaw.
7.Inputtaxcredit
ITC of the inputs /semifinished/ finished goods held in stock held immediately preceding the
dateofregistrationcanbetaken.
TimelimitoftakingITChasbeenprescribedasoneyearfromthedateofinvoiceforcredit.
ITCforthesuppliesrelatingtothebusinessandtaxablesuppliesincludingzeroratedsupplies
shallbeeligibletobeavailed.
Transferofinputtaxcreditisallowedincaseofsale,transfer,amalgamationetc.
ITCisnotavailableinthefollowingcases:
Motor vehicles except the services provided are transportation of goods, passengers or
impartingtrainingonmotorvehicles.
Goods/servicesinrelationtofood,beverages,outdoorcateringetc.primarilyforpersonal
consumptionoftheemployees
Goods /services acquired in execution of works contract for construction of immovable
propertyexceptplant&machinery
Goodsacquiredbyaprincipal,thepropertyinwhichisnottransferredtoanyotherperson,
whichareusedintheconstructionofimmovableproperty,otherthanplantandmachinery
Goodsusedforprivateorpersonalconsumption.
Taxpaidundercompositionlevy.
ITC shall be available only when the recipient has tax invoice or other similar document
receivedgoods/servicestaxchargeshasbeenpaidtotheGovt.bythesupplierandreturnhas
beenfurnished.
NoITCforaninvoiceofgoods/servicespertainingtoaFYisavailableafterthereturnforthe
monthofSeptemberfollowingtheendofFYortherelevantannualreturnisfiled,whicheveris
earlier.
Jobwork:thecreditiseligibleforinputgoodsandcapitalgoods,ifthesamearereceivedback
within180daysor2yearsrespectively,otherwiseanamountequaltotheITCavailedalongwith
interesttobepaid.
MannerofutilisationofITC:
CGST:CGST,IGST
SGST:SGST,IGST
IGST:IGST,CGST,SGST
8.Registration
Registration required in all the states of the supplies of goods and services made by the
assessee.
Registrationtobeobtainedwithin30daysfromthedateofbecomingliabletoberegistered.

Thresholdofaggregateturnover*forregistrationisRs.9lacs(Rs.4lacsinNorthEasternStates
includingSikkim).
Voluntaryregistrationcanalsobedone.
Mandatoryregistrationsinthefollowingcases:
Casualtaxableperson,
Nonresidentperson,
Personinvolvedininterstatesupplies
Personsliabletopaytaxesunderreversechargemechanism
Inputservicedistributor
Personswhodeducttax
Person who supply goods/services on behalf of other registered taxable person whether
asagentorotherwise.
Electroniccommerceoperator,aggregatorwhosuppliesservicesunderhisbrandnameor
histradename
OtherpersonsasnotifiedbyCGorSG.
Registrationofcasualtaxablepersonandnonresidentpersonshallbeeffectivefor90daysand
havetomakeanadvancedepositoftheestimatedtaxliability.
CancellationoftheregistrationunderCGST/SGSTactshallalsobeconsideredascancellation
underSGST/CGSTactrespectively.
(Note:Aggregateturnover*isaggregatevalueoftaxableandnontaxablesupplies,exemptsupplies
andexportsofgoods/servicesofapersonhavingsamePAN(includesonallIndiabasisandexcludes
GSTleviedonit).
9.Taxinvoice,Credit&DebitNotes
Tax invoice to be issued at the time of supply of goods/services showing the description,
quantity,valueofgoodsandtaxchargedthereonetc.
Abillofsupplyhasbeenprescribedfornontaxablesupplies.
Credit/Debitnotestobeissuedbeforethe30thdayofSeptembertheendofFYortherelevant
annual return is filed, (whichever is earlier), where the taxable value in the invoice is found
more/lessthanthevaluetobetaxed.
10.Returns:
Assesses

ReturnType

Timelines

Allassessesexcept
ISD,composition
schemepayersand
personpayingTDS

OutwardSupplies
Monthly

Onorbefore10thof
nextmonth

InwardSupplies
Monthly

Onorbefore15thof
nextmonth

Monthlyreturn

Within20daysfrom
endofthemonth

AnnualReturn

Onorbefore
31stDecember
followingtheendof
relevantFY

Compositionpayers

Quarterlyreturn

Within18daysfrom
endofquarter

TDSpayers

Monthlyreturns

Within10daysfrom
endofthemonth

ISD

Monthlyreturns

Within13daysfrom
endofthemonth

Returntobetreatedasvalidonlyafterpaymentoftax.
Noreturnscanbefurnishedifreturnforlasttaxperiodnotfurnished.
Taxtobepaidbeforethedateofthereturnfiling.
Nilreturnstobesubmittedincaseofnosupplyofgoods/services.
Rectificationoferrororomissioninthereturnsshallnotbeallowedaftertheduedateoffiling
the return for the month of September following the end of the relevant FY or filing of the
relevantannualreturn,whicheverisearlier.
Subject to the prescribed conditions/restrictions (not yet prescribed) can avail the ITC on
provisional basis. On final assessment, the difference shall be paid or refunded, as the case
maybe.
Finalreturnoncancellationofregistrationtobesubmittedwithinthreemonthsfromdateoforder
ofcancellationordateofcancellation,whicheverisearlier.
Penaltyoflatefiling:
Annualreturn:Rs.100/dayforeachdayofdefault(maxto0.25%aggregateturnover)
Otherthanannualreturn:Rs.100/dayforeachdayofdefault(maxtoRs.5000)
11.Paymentoftax
Deposit made towards tax, interest, penalties shall be paid online using debit /credit cards,
NEFTetc.whichwillbecreditedtoelectroniccashledgeraccount.
SelfassessedITCclaimedinthereturnshallbecreditedtoelectroniccreditledgeraccount.
Payment towards tax, interest, penalties can be made from electronic cash or credit ledger
accountssubjecttotherules,conditionsprescribed.
Interestperiodshallbecalculatedfromthefirstdaysuchtaxwasduetobepaid.

TDS:
Specified persons shall deduct TDS @1% of the contract value where it exceeds Rs.10
lakhs.
TDSdeductedshallbepaidwithin10daysoftheendofthemonthofdeductionandthe
certificatetobefurnishedin5daysofpaymentoftax.
ThelatefeeforfurnishingofthecertificateisRs.100/daysubjecttoRs.5000.
12.Refunds:
Refundforanamountcanbeclaimedwithinaperiodof2yearsfromtherelevantdate.
Refund to be granted on the principal of unjust enrichment. If amount claimed is less than
Rs.5,000, then only selfdeclaration to be made, otherwise documentary evidences to be
furnishedtoestablishnounjustenrichment.
Thesaidlimitationdoesnotapplyincaseofpaymentsmadeunderprotest.
Unutilised ITC can be claimed as refund in case of inverted duty structures and exports
(accumulationofITC)
Proper officer may grant provisional refund of 80% of the claim and the rest 20% can be
refundedafterdueverificationofthedocuments.
Orderofrefundshallbeissuedwithin90daysofthereceiptofapplication.
Interestattheprescribedrateswillbepaidfordelayincaseofrefundbeyond3months.
Incasesofunjustenrichment,refundordershallbegrantedandtheamountshallbecreditedto
theConsumerWelfareFund.
Refundofunutilisedcreditisalsoallowedincaseofexportofgoods/servicesexceptincases
whereexportdutyispayableandinverteddutystructure.
13.Accountsandrecords:
Records to be maintained at the registered place of business:certificate of registration, a true
and correct account of production, or manufacture of goods, of inward or outward supply of
goodsand/orservices,ofstock,ofgoods,ofinputtaxcreditavailed,ofoutputtaxpayableand
paid,andsuchother,particularsasmaybeprescribed.
AssessestogethisaccountsauditediftheturnoverexceedsaprescribedlimitbyCAorICWA
andsubmittotheproperofficer.
Accountstoberetainedtilltheexpiryof60monthsfromthelastdateoffilingofAnnualReturn
fortheyearpertainingtosuchaccountsandrecords.
Partytoanappealorrevision/proceedingshallretainthebooksofaccountsandotherrecords
foraperiodofoneyearafterfinaldisposalofsuchappeal/revision/proceedingormonthsfrom
the last date of filing of Annual Return for the year pertaining to such accounts and records,
whicheverislater.
14.JobWork:

Goodscanbesentbytheprincipaltothejobworkerwithoutthepaymentoftax,subjectto:
Thegoodsarebroughtbacktotheplaceoftheprincipalafterthejobworkandremoved
fromtherewithpaymentoftaxorwithoutpaymentoftaxincaseofexports.
Supplygoodsfromplaceofjobworkeronpaymentoftaxorwithouttaxincaseofexports.
Theplaceofbusinessofthejobworkershallbedeclaredasadditionalplaceofbusiness
ofprincipalexcept when thejob worker is registered or principal isengagedinsupplyof
suchgoodsasmaybenotifiedinthisbehalf.
Theresponsibilityforaccountabilityofthegoodsincludingpaymentoftaxthereonshallliewith
theprincipal.
15.ElectronicCommerce:
Everyelectroniccommerceoperatorshalldeductanamountatthetimeofcreditofanyamount
totheaccountofthesupplierofgoods/services,or,atthetimeofpaymentofanyamountin
cashorbyanyothermode,whicheverisearlierattherateprescribedlater.
Theecommerceoperatorshalldeposittheamountsodeductedaswellassubmitastatement
of all amounts deducted within 10 days after the end of the month in which such collection is
made.
Theamountcollectedanddepositedtogovt.shallbedeemedpaymentonbehalfofthesupplier,
whichcanbeclaimedbythesupplierintheelectroniccashledgeraccount.
The details of the outward supplies furnished by ecommerce operator shall match with the
detailsofthesupplier.Incaseofdiscrepancies,bothpersonsshouldtrytoresolvethesame.
In case, the same is not resolved, the excess tax shall be added to output tax liability of the
supplierforthemonthsucceedingthemonthinwhichdiscrepancyisnoticed.
AnyofficerbelowrankofJCmayaskforadditionaldetailsfromtheecommerceoperatorwhich
shall be furnished in next 5 working days of service of notice, failure to which may lead to
penaltyofRs.25,000.
16.Assessment
Everytaxablepersonshallhimselfassesthetaxpayableandfurnishesareturnunderrelevant
section.
Provisionalassessment:
Iftheassesseeisnotabletodeterminethetaxestobepaidonsupplyofgoods/services,
thentaxescanbepaidonprovisionalbasis.
Abondalongwithrequiredsurety/securityhastobefurnishedbindingthetaxableperson
tomakethepaymentofthedifferentialpaymentofthetaxes.
The final assessment order shall be passed by the proper officer in next 6 months of
passing the provisional order. The time period can be further extended by 6 months by
JC/AConsufficientcausetobeshown.

Interestshallbepaidonthedifferentialamountfromthefirstdayafterduedateofpayment
oftaxtillthedateofactualpayment.
Returnscanbescrutinisedtoverifythecorrectnessbytheproperofficer.Explanationifsought
bytheproperofficer,hastobeprovidedwithin30days.
Nonfilersofreturn:Bestjudgementcanbedoneiftheassesseedoesnotfilethereturnwithin
15daysofserviceofnoticetononfilersofreturns.
Unregistered persons: Assessment order determining the tax liability of a person liable to be
registeredcanbedeterminedbasedonbestjudgement.Theordercanbeissuedwithinaperiod
of5yearsfromtheduedateoffilingtheannualreturnofthetaxperiodunderconsideration.
Summaryassessment:Iftheproperofficerhasreasonableevidenceshowingliabilityofperson
coming to his notice can proceed to issue assessment order (with permission of AC/DC). The
personinchargeofgoodsmaybedeemedtobethetaxablepersonincasetaxablepersonis
notascertainable.Thenoticecanbewithdrawnbyapplicationmadebydeemedtaxableperson
within30daysorownmotionbydept.,iftheorderiserroneous.
17.Audit:
Audittobeinformedinadvancetotheassessee(atleastfifteenworkingdays)priortoconduct
ofaudit.
Audit shall be completed within 3 months of the production of the documents in the audit or
actualinstitutionofauditatthebusinesspremises,whicheverislater.
The time can be extended further by 6 months in case the Commissioner is satisfied for the
reasons recorded. He may extend the period by 6 months for the reasons to be recorded in
writing.
Specialaudit:
It is invoked in case the officer(not below AC/DC) has an opinion that the value is not
correctlyascertainedorthecredithasbeentakeninexcessofthelimits.
Insuchcases,withpriorapprovalofCommissioner,assesseemaybedirectedtogethis
accountsauditedfromCAorCWAnominatedbytheCommissioner.
Thedulysignedandcertifiedreporthastobesubmittedin90daysbytheCA/CWAtothe
officer.Thetimeperiodcanbeextendedbyanother90daysforanymaterialorsufficient
reason.
Theassesseetobegivenreasonableopportunityofbeingheardinregardtothefindings
ofspecialaudit,tobeusedagainsthimduringtheproceedings.
18.DemandsandRecovery
Particulars

Taxnotpaid/short
paid/erroneously
refundedon
accountofOther

Taxnotpaid/short
paid/erroneously
refundedon
accountoffraud/

thanfraud/wilful
misstatement/
suppressionof
facts

wilfulmisstatement
/suppressionof
facts

Timeperiodfor
issueoforder

3yearsfromthedue
dateortheactual
date,whicheveris
earlier,forfilingof
annualreturn/3
yearsfromthedate
oferroneousrefund

5yearsfromthedue
dateortheactual
date,whicheveris
earlier,forfilingof
annualreturn/5
yearsfromthedate
oferroneousrefund

Penaltybefore
serviceofNotice

Nopenaltypayable,if
taxandinterestis
paid

Penalty@15%,iftax
andinterestispaid

Penaltyafterissue/
communicationof
Notice

Nopenaltypayable,if
taxandinterestis
paidwithin30daysof
issueofnotice

Penalty@25%
payable,iftaxand
interestispaidwithin
30daysof
communicationof
notice

Penaltyafterissue/
communicationof
Order

Notprescribed.

Penalty@50%of
tax,iftaxandinterest
ispaidwithin30days
ofcommunicationof
orderelse100%of
tax

Maximumlevyof
Penaltyintheorder

10%ofthetaxor
Rs.10,000/
whicheverishigher

Notprescribed.

Proceedings shall be deemed to be concluded in case the penalties are paid in the manner tabled
above.
Taxcollectedbutnotdepositedwiththecentralorstategovt.:
Properofficershallissueashowcausenoticeastowhysaidamountbenotdepositedtothe
StateorCentralGovt.andthepenaltyequivalenttotheamountbenotlevied.
Interestshallbeleviedfromthedateofcollectionoftheamounttillthedateofpaymentofsuch
amounttotheGovt.
The order shall be issued within one year from the date of issue of the invoice after giving a
reasonableopportunityofbeingheard.
Recovery:

Properofficermaydeductthetaxamount:
duetosuchpersonfromanyamountpayabletosuchperson
detainingandsellinganygoodsbelongingtosuchperson
commencementofgarnisheeproceedings
Distrainanymovableorimmovablepropertybelongingorundercontrolofsuchtaxableperson.
Duringthependencyofanyproceedings,iftheCommissioneropinesthatprovisionalattachmentof
thepropertyoftheassesseeisintheinterestoftherevenue,thenhecanorderthesame.
19.Inspection,Search,SeizureandArrest:
Inspection,searchandseizure:
The proper officer not below the rank of JC, may direct any CGST/SGST officer to inspect or
searchthebusinessplacesoftheassesseeorconfiscatethegoods,wherethereisareasonto
believethat:
thetransactionhasbeensuppressed,or,
anypersonengagedinbusinessoftransportationorwarehousinghasstoredthegoodsor
kepttheaccountssoastoevadetaxes.
The officers have the power to seal or break open the door of any premises or to break open
anyalmirah,box,receptacleinwhichanygoods,accounts,etc.aresuspectedtobeconcealed.
Aninventoryofgoodsintheprescribedmannershallbeprepared.
Thepersoninchargeofaconveyancecarryinganyconsignmentofgoodsofvaluemorethan
Rs.50,000shallcarrywithhimsuchprescribeddocumentsasmaybeprescribed.
AllofficersofPolice,CustomsandthoseofState/CentralGovernmentengagedincollectionof
goodsandservicestaxandallofficersofState/CentralGovernmentengagedinthecollectionof
land revenue, and all village officers are empowered and required to assist the CGST/SGST
officersforthepurposeofthisact.
Arrest:
Commissioner is empowered to authorise any CGST/SGST officer to arrest a person, committing
certainspecifiedoffencessuchassupplyofgoodswithoutinvoice,collectingbutnotpayingtaxetc.,
whereintheamountoftaxevadedexceedsanamountofRs.25lakhs.
20.Offencesandpenalties
Offences

Penaltieslevied

Collecttaxes,butnotpaidto
thegovt.,collectsTCSin

Rs.10,000
or

contraventionoftheactand
nonpaymenttogovt.ofthe
same,fraudulentavailmentof
refund,nonmaintenanceof
properbooksofaccounts,
tampersdestroysmaterial
evidencesetc.

an amount equivalent to the tax

evaded / tax not deducted /short
deducted/deductedbutnotpaid/ITC
availed/passed

on/

irregularly,

refund

or

distributed
claimed

fraudulently,asthecasemaybe,
Whicheverishigher

Shortpaymentoftax
repeatedly(shortpaymentin
threereturnforlastsix
consecutivetaxperiods)

Rs.10,000
or

Aidsorabetsincontravention
ofthelaw,failstoissuean
invoiceorfailstoaccountan
invoiceinbooks,failsto
appearbeforeCGST/SGST
officerwhenissueda
summonforappearanceto
produceadocumentinaan
enquiry.

ExtenduptoRs.25,000

Generalpenalty

ExtenduptoRs.25,000

10%oftaxshortpaid
Whicheverishigher

Detentionandconfiscation:
Any goods are transported or stored while they are in transit or not accounted in the books
respectivelyinviolationoftheAct,then,suchgoodsorconveyanceoftransportshallbeliableto
beconfiscated.Thesamecanbereleasedonpaymentofinterest,taxandpenaltyorfurnishing
anequivalentamountofsecurity.
Inspecifiedcircumstances,likeevasionofduty,nonaccountinginbooks,supplyinggoodswith
noregistrationetc.shallbeliabletobeconfiscated.Suchgoodscanbereleasedonpaymentof
finewhichinnocaseexceedthemarketvalueofgoods.
Theconveyanceoftransportationoftheconfiscatedgoodsisalsoliabletobeconfiscated.
Noconfiscationcanbemadewithoutpropershowcausenoticeorwithoutgivingareasonable
opportunityofbeingheard.

21.Prosecutionandcompoundingofoffences
Followingpunishmentshasbeenprescribedfortheoffences,suchassupplyofgoodswithoutinvoice/
incorrectinvoice/falseinvoice,fraudulentrefund,falsifyingfinancialrecords,etc.:
Amountoftax
evaded

Punishment

Natureofoffence

AboveRs.2.5
crores

Imprisonmentfora
termupto5years
withfine

Cognizableandnon
bailable

AboveRs.50lakhs
butlessthanRs.
2.5crores

Imprisonmentfora
termupto3years
withfine

Noncognizableand
bailable

AboveRs.25lakhs
butlessthanRs.
50lakhs

Imprisonmentfora
termupto1years
withfine

Noncognizableand
bailable

Repeatedly
convicted

Imprisonmentfora
termupto5years
withfine

Noncognizableand
bailable

TheoffencesmaybecompoundedbytheCompetentAuthority,subjecttocertainexceptions.
Also, the compounding payment would be between the minimum of Rs. 10,000 or 50% of the
taxinvolved,whicheverishigherandwouldbesubjecttoamaximumofRs.30,000or150%of
thetaxinvolved,whicheverishigher.
22.Appeals
Firstappellate
authority

Appealcanbefiledbyaseesseeorthe
commissionerofGSTonhisownmotion.
Appealtobefiledwithin3monthsofthedateof
the order against which the appeal is filed. The
time can be extended by 1 month , sufficient
causetobeshown.
10%ofthedisputedamounttobepaidforfiling
appealinCGST.
10% of the disputed amount and 100% of the
admitted amount to be paid for filing appeal in
SGST.Also,thelimitof10%canbeextendedto
50% if the dispute is considered as serious case
(matterinvolvingdutymorethanRs.25crores)

 He may confirm, modify or annul the

decision/order.
Appeal filed shall be tried to be decided within
anyearoffilingofappeal.
Revisionary
powerof
Commissioner

IncaseofSGSTlaw,theCommissionerhas
beengivenrevisionarypowers.
Hecanstaytheoperationoftheorderforsuch
period as he deems fit and make further inquiry
forpassingarevisedorder.

Constitutionof
NATGST

NationalGoodsandServicetaxAppellate
Tribunalshallbeconstitutedonrecommendation
oftheCouncil.
ItshallbeheadedbytheNationalPresident.
Each state will have a branch headed by State
President.
Qualifications, constitution etc. will be as
prescribed.
After heading the president position, they shall
notbeentitledtoappear,actorpleadbeforethe
AppellateTribunal.

Appealstothe
Appellate
Tribunal

AppealtotheTribunalshallbefiledwithin3
monthsofthedateoftheorder.
Memorandum of Cross objections can be filed
within 45 days of the date of filing the appeal to
theAppellateTribunal.

Orderof
Appellate
Tribunal

Anorderconfirming,modifyingorannullingthe
decisionororderappealedagainstormayrefer
thecasebacktotheFirstAppellateAuthorityorto
theoriginaladjudicatingauthority,withsuch
directionsasitmaythinkfit,forafresh
adjudicationordecision,asthecasemaybe,
aftertakingadditionalevidence,ifnecessary.
The order can be rectified by for a mistake
apparentonrecordbycommissionerwithinthree
monthsofthedateoforiginalorder.
Appeal filed shall be tried to be decided within
anyearoffilingofappeal.
Proceedings of Appellate Tribunal shall be
deemed to be the judicial proceedings of Civil
Court.

Appealtothe
HighCourt

Casesinvolvingsubstantialquestionoflawtobe
admitted.

Appealstobefiledwithin180daysoftheorder.
Appealto
SupremeCourt

AppealslietoSupremeCourtinfollowingmatters
:
againstorderofHighCourt
matterwheretwoormoreStates,oraStateand
Centre, have a difference of views regarding the
treatment of a transaction(s) being intraState or
interStateor
matterwheretwoormoreStates,oraStateand
Centre, have a difference of views regarding
placeofsupply.

Refundofpredeposit,whereapplicable,wouldbemadewithinterestfromthedateofdeposittill
thedateofrefund.
AnorderbyGSTofficersanctioningprosecutionwouldbenonappealableundertheGSTAct.
23.Advancerulings
AuthorityforAdvanceRulingshallbelocatedineachstateandcompriseofonememberfrom
CentralGovernmentandonememberfromStateGovernment.
Mattersforwhichrulingmaybesoughtareasunder:
classificationofanygoods/services
applicabilityofanotificationhavingabearingontherateoftax
principlestobeadoptedforthepurposesofdeterminationofvalueofthegoods/services
admissibilityofITCoftaxpaidordeemedtohavebeenpaid
determinationoftheliabilitytopaytaxonanygoods/servicesundertheAct
requirementofregistrationundertheact
whetheranactivityamountstoorresultsinasupplyofgoodsand/orservices.
No appeal shall be submitted when the question raised is already pending or already been
decidebytheFirstAppellateAuthority,theAppellateTribunaloranyCourt.
Advancerulingstobepronouncedwithin90daysofthereceiptofapplication.
Advancerulingscanbeappealedwithin30daysoftherulings.
Orderoftheappellateauthorityinanappealagainsttheadvancerulingsshallbegivenwithin90
daysofdateoffilingtheappeal.
The advance rulings can be rectified for the mistakes apparent from record within six months
fromthedateoftheorder.
The advance rulings to be void ab initio in case where it has been attained by way of fraud,
misrepresentationoffacts,suppressionofmaterialfacts.
24.Liabilitytopayincertaincases:

Situation

Liabilityon

transferofbusiness

Jointandseveralliabilityofthetransferee
andthetransferorofthebusiness

amalgamation
/mergerof
companies

Ifeffectivedateoforderisbeforethedate
ofthecourtorder,thetransactionstillthe
dateofcourtordershallbetreatedin
individualbooksasifno
merger/amalgamationhastakenplace.

companyin
liquidation

Intimationofappointmentofliquidatortobe
givenwithin30days
Dues of tax, interest or penalty to be
communicated to the liquidator within 3
monthsbytheCommissioner
Directors held liable for recovery of the
dues of the company unless contrary is
proved.

partnersoffirmto
paytax

Jointandseveralliabilityofthefirmandthe
partnersofthefirm
Partner retiring shall intimate dept. Within
one month otherwise his liability shall
continueinthefirmtowardsthedept.

guardians,trustees

Liableforthetax,interestandpenaltydues
asdeterminedandrecoverablefromminor
orotherincapacitatedpersonishewasa
majororcapacitatedperson.

CourtofWards

CourtofWards,theAdministratorGeneral,
theOfficialTrusteeoranyreceiver/manager
asdeterminedandrecoverablefromthe
taxablepersonasifhewereconductingthe
business.

Othercases

Incaseofdeathofperson,hisbusinessis
continued,thenthelegalrepresentative
Incaseofdeathofperson,hisbusinessis
discontinued, then the estate of the
deceased
HUF/AOP: Joint and several liability of the
membersofthePartitionedHUFandAOP
Dissolution of a firm: Joint and several
liability of the firm and the partners of the
firm

 Ttermination of the guardianship or trust:

Beneficiaryshallbeliableforthepaymentof
taxdues.

25.Miscellaneousprovisions
Every taxable person will be given a GST compliance rating score which will be updated at
regularintervalsandalsobeplacedinpublicdomain.
Certain specified persons to furnish Annual Information Return relating to payment of tax and
transactionsingoodsandservices.FailuretothesameleadstopenaltyofRs.100perdaythe
defaultcontinues.
GST officers empowered to may make test purchases and drawl of samples to check
compliances.
Central and State Government are given extensive powers to make rules, issue notifications
withretrospectiveeffectunderthoserules,tocarryintoeffectthepurposesoftheact.
Modeofserviceofnoticetoalsoincludebywayofhanddelivery,bycourier,email,facsimile,
ondashboardoftaxpayerswebsite,SMSandbypublicationinnewspapercirculatinginlocality
oftaxpayer.
26.TransitionalProvisions
Cenvat credit/ ITC shall be allowed to be carried forward under CGST/SGST act respectively
furnishedundertheearlierlawbyhim,inrespectoftheperiodendingwiththedayimmediately
precedingtheappointedday.
Unavailedcenvatcredit/ITConcapitalgoods,notcarriedforwardinareturn,tobeallowedunder
CGST/SGSTactsrespectively.
CreditofcertaineligibledutiesandtaxesunderCGST/SGSTinrespectofinputsheldinheldin
stockandinputscontainedinsemifinishedorfinishedgoodsheldinstockontheappointedday
shallbeallowedsubjecttoconditionsmentionedinNote1.
Creditofeligibledutiesandtaxesoninputsheldinstockshallbeallowedtoataxableperson
switching over from composition scheme to normal tax payment under CGST/SGST laws
subjecttoconditionsmentionedin
If the taxable person switching over to composition scheme, the Cenvat credit and ITC inputs
heldinheldinstockandinputscontainedinsemifinishedorfinishedgoodsheldinstockshall
bedebitedtotheelectroniccreditledgerorelectroniccashledger.AnybalancelyingintheITC
orcenvatcreditinelectroniccreditledgershalllapse.
NotaxispayableunderGSTifthegoodsexemptedunderearlierlawisreturnedtotheplaceof
businesswithin6monthsoftheappointedday.
If the duty paid goods are returned to the supplier within 6 months of the appointed date, he
shallbeentitledtotakethetaxcreditonsuchgoodsandthepurchaserofthegoodsshallnotbe

liabletomakethepaymentoftaxonthegoods.
NotaxshallbepayableontheInputsremovedforjobworkandreturnedwithin6monthsofthe
appointeddate.Theperiodcanbefurtherextendedtotwomonths.Thedetailsoftheinputssent
to job worker shall be disclosed separately by the manufacturer and job worker on appointed
dayintheprescribedmanner.
Notaxshallbepayableonthesemifinishedgoodsremovedforjobworkandreturnedwithin6
monthsoftheappointeddate.Theperiodcanbefurtherextendedtotwomonths.Thedetailsof
the semifinished goods sent to job worker shall be disclosed separately by the manufacturer
andjobworkeronappointeddayintheprescribedmanner.
No tax shall be payable on the finished goods removed for job work and returned within 6
monthsoftheappointeddate.Theperiodcanbefurtherextendedtotwomonths.Thedetailsof
thefinishedgoodssenttojobworkershallbedisclosedseparatelybythemanufacturerandjob
workeronappointeddayintheprescribedmanner.
The invoice/ document issued pursuant to the upward and downward revision in the contracts
alreadyexistingontheappointeddateshallbeissuedwithin30daysoftheappointeddate.It
shallbeconsideredtobeissuedunderthisact.
Pending refund claims, claim of cenvat credit, reviews, reference, appeal, revisions etc. in
regard tooutput liability or treatment of any amount refundable or recoverable pursuant to
assessment or adjudication etc. shall be dealt in accordance with the provisions of earlier law
andtherefundgrantedshallbepaidincash.Theamountrecoverableformtheassesseeshall
betreatedasarrearsofrevenueandwillnotbeadmissibleasinputtaxcredit.
Taxpaidunderearlierlawonretentionpayments,periodic/progressivesupplyofgoods/services
willnotbepaidagain
GSTtobeleviedonSuppliesmadeunderworkscontractonoraftertheappointeddate.
ITConaccountofservicesreceivedpriortoappointeddateshallbeeligiblefordistributionas
creditevenifinvoicesreceivedafterappointeddate
Tax paid on goods lying with agents, goods sent on approval basis returned on or after
appointeddate(receivedwithin6months)shallbeallowed.
NoIGSTshallbepaidonimportofservicesorinterstatesuppliesofgoods/servicesmadeon
oraftertheappointeddatetotheextentthetaxpaidundertheprovisionsofcurrentlaw.
Note1
Conditionsforseekingthecreditunderthenewlaws:
(i)suchinputsand/orgoodsareusedorintendedtobeusedformakingtaxablesuppliesunderthis
Act
(ii)thesaidpersonisnotpayingtaxundersection8
(iii)thesaidtaxablepersonwaseligibleforcenvatcreditonreceiptofsuchinputsand/orgoodsunder
theearlierlawbutforhisbeingacompositiontaxpayerunderthesaidlaw

(iv)thesaidtaxablepersoniseligibleforinputtaxcreditunderthisAct
(v)thesaidtaxablepersonisinpossessionofinvoiceand/orotherprescribeddocumentsevidencing
paymentofduty/taxundertheearlierlawinrespectofinputsheldinstockandinputscontainedin
semifinishedorfinishedgoodsheldinstockontheappointeddayand
(vi) such invoices and /or other prescribed documents were issued not earlier than twelve months
immediatelyprecedingtheappointedday.
IGSTspecificprovisions:
27.PlaceofSupplyofGoods(section5inIGST):
Scenarios

PlaceofSupplyofGoods

Supplyinvolvesmovement
ofgoods

Locationatthetimeatwhichthe
movementofgoodsterminatesfor
deliverytorecipient.

Supplydoesnotinvolve
movementofgoods.

Locationofsuchgoodsatthetimeof
delivery.

Deliveryofgoodsbywayof
transferofdocumentsof
titletothegoodsor
otherwise,beforeorduring
theirmovement,torecipient
oranyotherpersononthe
directionofathirdperson
(asanagentorotherwise)

Principalplaceofbusinessofthird
person(theplacewhichismentioned
intheregistrationcertificate).

Goodsinstalledor
assembledatsite.

Placeofsuchinstallationorassembly.

Goodssuppliedonboarda
conveyance,suchasa
vessel,anaircraft,atrainor
amotorvehicle.

Locationatwhichsuchgoodsare
takenonboard.

Inanyothercase(not
coveredabove).

Determinedbylawmadebythe
Parliamentinaccordancewiththe
recommendationsoftheCouncil.

(considered as goods received by

thirdperson)

28.Placeofsupplyofservices(section6inIGST):
NatureofService

PlaceofSupplyofService

Servicesinrelationtoimmovable
propertyincludingancillary
services:

Locationatwhichtheimmovable
property,boatorvesselis
located.

a)Servicesofarchitects,interior

decorators,otherrelatedexperts
or estate agents etc., grant of
rightstouseimmovableproperty
etc.
b)Lodgingaccommodationbya
hotel, inn, guest house etc. by
whatever name called (including
houseboatoranyothervessel)
c) Accommodation and other
facilitiesprovidedattheproperty
for

organizing

marriage/reception

any
etc.

and

other official, social, cultural,

religiousorbusinessfunction.
Restaurant&catering,personal
grooming,fitness,beauty
treatment,healthservices,
cosmetic&plasticsurgery.

Locationoftheperformanceof
theservice.

Trainingandperformance
appraisalservicesgivento

Registeredpersonlocationof
suchperson.
Other than registered person
location where the services are
actuallyperformed.

Admissiontoacultural,artistic,
sporting,scientific,educational,
orentertainmenteventor
amusementparkoranyother
placeandservicesancillary
thereto.

Locationoftheevent/park/other
placeetc.,asthecasemaybe.

Servicesoforganisingand
ancillarytheretoofcultural,
artistic,sporting,scientific,
educationalorentertainment
event(includingconference,fair,
exhibition,celebrationorsimilar
events).
Assigning of sponsorship of

Registeredpersonlocationof
suchperson.

anyoftheaboveevents.
Servicesoftransportationof

Other than registered person

location where the services are
actuallyperformed.

goodsincludingmailorcourier
to

Registeredpersonlocationof
suchperson.
Other than registered person
location where the services are
actuallyperformed.

ServicesofPassenger
transportationto

Registeredpersonlocationof
suchperson.
Other than registered person
place

where

the

passenger

embarks on the conveyance for

thecontinuousjourney.
Right to passage is given for
future

use

and

point

of

embarkationisnotknown:
o Registered person: location of
suchperson.
oUnregisteredperson:locationof
recipient , where address on
record exist or the location of
supplierofservices.
Serviceonboardaconveyance
suchasvessel,aircraft,trainor
motorvehicle.

Locationofthefirstscheduled
pointofdepartureofthat
conveyanceforthejourney.

Telecommunicationservices
includingdatatransfer,
broadcasting,cableanddirectto
hometelevisionservices:

Fixed telecommunication line,

leased circuits, internet leased
circuit,cableordishantenna

Mobile

connection

for

telecommunication and internet

services provided on postpaid
basis

Mobile

connection

for

telecommunication and internet

services are provided on pre
payment through a voucher or
anyothermeans.

Servicesofbankingorother

Location

where

the

telecommunication line, leased

circuitorcableconnectionordish
antennaisinstalled.
Locationofbillingaddressofthe
service receiver on record of the
serviceprovider.
Location where such pre
payment is received or such
vouchersaresold.
If prepaid service is availed
through electronic network the
location of the service recipient
as per the record of the service
provider.

financialservicesincludingstock
broking

Locationofservicereceiveras
onrecordsoftheservice
provider.
If service is not linked to
account of the recipient of
services location of the
supplierofservices.

Insuranceservices

Registeredpersonlocationof
suchperson.
Other than registered person
locationofservicereceiverason
recordsoftheserviceprovider.

Advertisementservicestothe
centralgovernment,state
government,astatutorybodyor
alocalauthoritymeantfor
identifiablestates.

EachsuchState.

Servicesnotcoveredabove.

Registeredpersonlocationof
suchperson.
Other than registered person
location of the service receiver
available on the records of the
serviceproviderorlocationofthe
serviceprovider.

29.Apportionmentoftaxes:
IGST, interest and penalties collected in the interstate supplies shall be apportioned to the
CentreattherateequivalenttoCGSTonsimilarintrastatesupply.
BalanceamountoftheIGSTshallbeapportionedtotheStatewheresuchsupplytakesplace.
30.Settlementofcases:
Anapplicationforsettlementcannotbemadeif:
caseispendingbeforeAppellateTribunaloranyCourt
Itpertainstodeterminationofquestioninrespectofrateoftax/determinationofliabilityon
anygoodsand/orservices.
Theapplicationshallcontainfullandtruedisclosureiftaxliability,whichhasnotbeendisclosed
tojurisdictionalIGSTofficer,themannerinwhichtheliabilityisarrived,theadditionalamountof
taxpayableandotherprescribedparticulars.
Applicationforacase/identicalcasesinvolvingperiodicalnotices&pendingbeforeadjudicating
authority/FirstAppellateAuthoritycanbemadeforsettlement.

Alltherequiredreturnsarefurnished
SCN or order by IGST officer has been issued and is pending before the First Appellate
Authority.
Additionaltaxacceptedbytheassesseeexceeds5lakhrupees.
The additional amount of tax as well as the interest thereon has been paid by the
assessee.
Constitution:
NationalGoodsandServicesTaxsettlementCommissionshallbeconstitutedheadedby
Nationalchairman.
It will have one bench for one or more than one states, known as State Settlement
Commission.ItshallbeheadedbyStateChairman.
Procedure:
Settlement Commission (the Commission) shall issue a notice within 7 days of the
application, to the assessee to state as to why the application should be allowed to be
proceededwith.
Thecommissionshallalloworrejecttheapplicationwithin45daysfromdateofnoticeby
wayofanorder.
Ifnonoticehasbeenissuedornoorderhasbeenpassed,theapplicationshallbedeemed
tobeallowed.
ThecommissionmaycallforareportfromthejurisdictionalIGSTofficerwithin7daysof
orderoftheacceptanceoftheapplication.
Thereportshallbefurnishedwithin60daysofthedateofreceiptofthecommunication,if
thereportisnotfurnished,thecommissionmayproceedfurtherwithoutthereport.
If the commission opines that further enquiry is required, he may order direct any
designatedofficerforthesamewithin15daysofthereceiptofthereportfromjurisdictional
IGSTofficer.
Thereportshallbefurnishedbytheofficerwithin90days.
If the report is not furnished within the stipulated time, the commission may proceed to
passtheorderwithoutsuchreport.
The order shall be passed within 12 months of making the application failing which the
proceedings shall abate and the relevant authority where the matter was pending before
theapplicationshalldisposethecase.
If it is found that the settlement has been sought on the basis of fraud and
misrepresentation, thenthe proceedings shall be revived at the appellate authority, it was
originallydealtbyandtheordershallbepassedbybeforetheexpiryoftwoyearsfromthe
dateofreceiptofcommunicationofthesettlementbeingvoid.

The commission may order the provisional attachment of the property if he opines that it is
necessaryinordertoprotecttherevenue.
The commission may reopen the completed cases within 5 years of the application for proper
disposalofthecasespendingbeforeit.Thecommissionshouldhavevalidreasonsrecordedin
writingtoreopenthecompletedassessments.
The commission may grant immunity from prosecution and penalty if the assessee has fully
cooperatedandmadefullandtruedisclosuresofhistaxliability.
The commission has the powers to send back the case back to the IGST officer in case the
assesseehasnotcooperatedwiththecommissionandshallbefullyentitledtousethematerial
produced/resultsoftheenquiryetc.discoveredduringthecourseofproceedings.
Order of the commission shall be conclusive and cannot be reopened except otherwise
provided/
Noapplicationscanbemadebyanassesseetothecommissioninanymatterifthepersonis
foundconvictedofanyoffenceinthisactorthecasewassentbacktotheIGSTofficerofthe
FirstAppellateAuthority.
Noassesseecanavailthefacilityofthecommissionmorethantwice.
Thecommissioncanrectifyanorderpassedbyitforthemistakeapparentfromtherecord.