VII. Copy of: Indirect Taxation

A. In General 
India imposes the following indirect taxes: 
(i) Customs duty;
 (ii) Goods and services tax;
 (iii) Stamp duty; and
 (iv) Securities transaction tax.

The two main enactments governing indirect taxation in India are the Goods and Service Tax (GST) Act, 2017 and the Customs Act, 1962, which are administered by the Central Government.
Indirect taxes have an important bearing on the cost component of many products.

B. Customs Duty 

1. Scope and Coverage of Customs Law 
The Customs Act, 1962 provides for the levy and collection of duty on imports as well as exports of goods.797
Goods under the Customs Act, 1962, include: 
(i) Vessels, aircraft and vehicles;
 (ii) Stores;
 (iii) Baggage;
 (iv) Currency and negotiable instruments; and
 (v) Any other kind of movable property.798

The rates of customs duty are prescribed in the Customs Tariff Act, 1975, read with the relevant exemption notifications. Import duty is levied on most products, while the levy of export duty is restricted to a very few products. The Customs Act is a tool with which the government regulates imports and exports in line with government policy. In addition, the provisions of the customs law are also referred to in other acts, such as the Foreign Trade (Development & Regulation) Act and the Foreign Exchange Management Act, 1999 (FEMA). The scope and applicability of the customs law is governed by various acts, rules, regulations and notifications.

2. Taxable Event 
Goods become liable to import duty or export duty where there is an import into or export out of India. "Import" is defined as bringing (goods) into India from a place outside India.799 "Export" is defined as taking (goods) out of India to a place outside India.800 For these purposes, India includes the territorial waters of India.801 The territorial waters extend 12 nautical miles into the sea from the base line on the coast of India.

3. Customs Tariff Act, 1975 
The Customs Tariff Act, 1975 provides the classification of, and rates of duties for, imports and exports under two Schedules. The Act also provides for additional duty (countervailing duty), special additional duty, safeguard duty, preferential duty and anti-dumping and protective duties.

4. Rules and Regulations 
Under the Customs Act, 1962, the Central Government is empowered to make rules and regulations consistent with the provisions of the Act. The most important rules are as follows: 
(i) The Customs Valuation (Determination of Price of Imported Goods) Rules, 2007, which provide the basis for valuing imported goods for purposes of determining the duty payable.
(ii) The Customs Valuation (Determination of Price of Exported Goods) Rules, 2007, which provide the basis for valuing exported goods for purposes of determining the duty payable.
(iii) The Customs and Central Excise Duties and Service Tax Drawback Rules, 2017, which provide the basis for calculating the rates of duty drawback on exports. Drawback in relation to goods manufactured in India and exported means the rebate of duty or tax chargeable on imported or excisable materials or taxable services used as input services in the manufacture of such goods.
(iv) The Baggage Rules, 2016, which provide the rules and allowances for Indians and visitors bringing in baggage from abroad.
(v) The Customs (Advance Rulings) Rules, 2002, which concern the Authority for Advance Ruling (AAR) relating to customs and central excise for foreign investors. The Customs (Advance Rulings) Rules, 2002, and the Central Excise (Advance Rulings), 2002, allow a nonresident investor setting up a joint venture (JV) in India in collaboration with a nonresident or a resident, or a resident setting up a JV in India in collaboration with a nonresident or a wholly-owned subsidiary company of a foreign holding company to seek an advance ruling from the AAR. Such rulings may be only concern:
 The classification of goods; and
 The principles of valuation and the applicability of duty exemption notifications that are relevant in determining the liability to duty with respect to an "activity" (i.e., the import, export, production or manufacture of goods) proposed to be undertaken by the JV. The statute requires the AAR to issue an advance ruling within three months. The objective is to provide certainty as to the applicant's liability to pay duties. A ruling is binding on the applicant with respect to any matter referred to in the AAR's ruling and the Jurisdictional Commissioner (subject to the law and facts remaining unchanged) and may not be appealed.
(vi) The Customs (Appeals) Rules, 1982, which prescribe the procedures to be followed with regard to filing appeals before the relevant statutory authorities.
(vii) The Customs (Settlement of Cases) Rules, 2007, which govern the procedural aspects relating to applications to the settlement commission with respect to any proceeding pending before the customs officer having jurisdiction over the matter concerned.
(viii) The Customs (Import of Goods at Concessional Rate of Duty for Manufacturing Excisable Goods) Rules, 2007, which apply to an importer that intends to avail itself of the benefit of an exemption notification issued under sub-section (1) of Section 25 of the Customs Act, 1962 (under which goods of a specified description may be exempted from customs duty), where the benefit of the exemption is dependent on the imported goods covered by the notification being used to manufacture an excisable commodity.
(ix) The Project Import Regulations, 1986, which prescribe the procedures for obtaining concessional customs duty rates for project imports required for initial set-up or substantial expansion. Heavy customs duty on machinery imported for a project to be executed in India could otherwise make the start-up project costs very high and render a project unviable.
(x) The Customs House Agents Licensing Regulations, 2013, which govern clearing and forwarding agents.
(xi) Notifications, through which, under the powers vested in it by the Customs Act, the Central Government has specified certain goods as exempt from customs duty and prohibited certain goods from being imported into or exported from India.

5. Types of Customs Duty 
Tariff rates for customs duty purposes are prescribed in the Customs Tariff Act, 1975. The different types of duty are: 
(i) Basic customs duty (BCD). This is the basic duty levied under Section 12 of the Customs Act. Duty is levied at the rates specified in the First and Second Schedules to the Customs Tariff Act, 1975. The duty payable is measured as a percentage of the transaction value determined under Section 14(1) of the Customs Act. This value is the price actually paid or payable for the goods concerned when they are sold for export to India for delivery at the time and place of importation or for the export from India for delivery at the time and place for exportation and includes other components of costs to the extent and in the manner specified in rules made in this respect. Different rates have been prescribed for different items.
(ii) Protective duty. The Tariff Commission established under the Tariff Commission Act, 1951 may recommend to the Central Government the imposition of protective duty to provide protection for certain industries. The Central Government, on being satisfied that such a need exists, may by notification levy a duty on certain imported goods. Parliamentary approval is required to give effect to the proposals with regard to protective duty on the goods to which the notification relates. The determination of the extent of the protection to be given by way of protective duty takes into consideration the following two factors:
 The protective duty should not be so severe as to discourage imports; and
 The protective duty should be sufficiently attractive to encourage imports to bridge the gap between the demand and supply of the relevant articles in the market.
(iii) Countervailing duty (CVD) on subsidized goods. If a country pays its exporters a subsidy on exports to India, the Central Government can, under Section 9 of the Customs Tariff Act, impose a CVD up to the amount of the subsidy. The duty is in addition to any other duty chargeable under the Customs Act. The Central Government has the power to issue a notification to impose such duty, which will cease to have effect on the expiry of five years from the date of imposition.
(iv) Safeguard duty. Safeguard duty is imposed for purposes of protecting the interests of a domestic industry. It is product-specific, i.e., the safeguard duty is applicable only to the articles with respect to which it is imposed. The duty is in addition to any other duty chargeable under the Customs Act. Duty imposed under Section 8B of the Customs Tariff Act, 1975 is in force for a period of four years from the date of its imposition. The Central Government continuously reviews the situation and will extend the imposition if it determines that the domestic industry concerned is under threat. Unless specifically made applicable, safeguard duty does not apply to articles imported by a 100% export-oriented unit (EOU) or any unit in a free trade zone (FTZ) or a special economic zone (SEZ).
(v) Anti-dumping duty. Large overseas companies with undisposed stocks may export or "dump" such goods into India at unreasonably low prices, which may cripple the working of the local industry. Anti-dumping duty is country specific, i.e., it is imposed on imports from a particular country. The Central Government may by notification impose anti-dumping duty to the extent of the "margin of dumping," where the products concerned are sold at prices lower than their normal value. The margin of dumping is the difference between the normal value of the products and the price at which they are brought into the country. The normal value is the comparable price in the ordinary course of the trade. The Central Government is empowered to draw up rules for determining the normal value and export pricing to determine the margin of dumping. The duty is in addition to any other duty chargeable under the Customs Act. Duty imposed under this section is in force for a period of four years from the date of its imposition. Unless specifically made so applicable, safeguard duty does not apply to articles imported by a 100% EOU or any unit in an FTZ or SEZ.

Section 9B of the Customs Tariff Act restricts the imposition of dumping duties on imports from World Trade Organization (WTO) countries and countries given the status of most favored nation (MFN) under an agreement. In the case of goods exported by such countries, the Central Government will issue a notification imposing duty only if the import of the goods would cause material injury to an industry established in India or would materially impact the establishment of an industry in India.
An appeal against an order of determination or a review thereof regarding the existence, degree and effect of any subsidy or dumping in relation to the import of any article may be made to the Appellate Tribunal.

6. Valuation for Customs Duty Purposes 
Customs duty is payable on a value known as the "customs value" or the "assessable value." This value is a deemed value that does not depend on the price stated in the invoice and may be either a value defined in Section 14(1) of the Customs Act or a tariff value specified in Section 14(2) of the Customs Act. Value is determined in accordance with the rules drawn up by the Central Government known as the Customs Valuation (Determination of Value of for Imported Goods) Rules, 2007. These rules are based on the General Agreement on Tariffs and Trade (GATT) valuation code and may not supersede the provisions of the Act relating to valuation. The rules are for imported goods only and are statutorily required to be followed. The rules contain exhaustive notes to facilitate their correct application.

7. Export Promotion Schemes 

a. Advance Authorization 
Inputs required to manufacture export products may be imported without the payment of customs duty under an advance authorization. This permission may be granted to merchant or manufacturer exporters importing inputs, fuel, oil and catalysts.

b. Duty Drawback 
In accordance with Rule 2(a) of the Customs, Central Excise and Service Tax Drawback Rules, 2017, drawback in relation to any goods manufactured in India and exported is the rebate of duty or tax chargeable on the imported or excisable materials used or taxable services used as input services in the manufacture of those goods. The drawback rate is fixed based on the industry average for various products. The Central Government is authorized to issue notifications prohibiting drawback in certain cases. The drawback rules also provide for some disallowances.

c. Export Oriented Units in Special Economic Zones 
The EOU scheme enables a manufacturer to import inputs without paying customs duty and export the final products subject to compliance. EOUs must have net foreign exchange earnings (NFE). Indigenous goods may be obtained without the payment of excise duty, subject to certain conditions. EOUs may sell up to 50% of the free-on-board (FOB) value of their previous year exports in the domestic tariff area (DTA).
The software technology park (STP), electronic hardware technology park (EHTP) and bio-technology park (BTP) schemes are similar to the EOU scheme.
SEZs are in the nature of an "island" outside the jurisdiction of the country. Goods, including capital goods, may be imported into an SEZ without the payment of duty and services without the payment of service tax. SEZs are governed by the Special Economic Zones Act and the rules drawn up thereunder. Supplies to an SEZ from anywhere outside the SEZ (i.e., the DTA) are considered exports and qualify for export benefits. Supplies to the DTA from an SEZ are considered imports and normal customs duty is payable by the importer. An SEZ has full freedom of operation within the SEZ and all facilities for import and export are provided within the SEZ itself.
SEZ units may be set up for manufacturing goods or rendering services or for purposes of trading.
SEZs and units in SEZs are exempt from all taxes, such as customs duty, income tax, etc.

d. Duty Free Import Authorization 
The duty-free import authorization (DFIA) scheme was introduced in 2006 and is similar to the Advance Authorization scheme. Material imported under DFIA is transferable on compliance with the export obligation, unlike under the Advance Authorization scheme, which does not allow for transfers. DFIA is issued to allow the duty-free import of inputs, fuel, oil, energy sources and catalysts required for export products. DFIA is initially issued with an "actual user condition." Imports are exempted from BCD, additional customs duty/excise duty (in accordance with foreign trade policy, the exemption is only from BCD), the education cess, and safeguard and anti-dumping duty, if any.

e. Export Promotion Capital Goods Scheme 
The export promotion capital goods (EPCG) scheme enables an Indian manufacturer to obtain capital goods at a lower or zero rate of customs duty against commitment to an export obligation, subject to certain conditions.

f. Merchandise and Service Exports from India Schemes 
The objective of the merchandise exports from India scheme (MEIS) is to offset infrastructural inefficiencies and associated costs involved in the export of goods or products produced or manufactured in India, especially those with high export intensity and employment potential that thereby enhance India's export competitiveness. Exports of notified goods or products to notified markets are rewarded under the MEIS, subject to such conditions as may be notified.
The objective of the service exports from India scheme (SEIS) is to encourage the export of notified services from India. Service providers that provide notified services and are located in India are rewarded under the SEIS, subject to such conditions as may be notified.
Duty Credit Scrips are granted as rewards under the MEIS and SEIS. Duty Credit Scrips and goods imported and domestically procured against them are freely transferable. Duty Credit Scrips can be used to pay: 
(i) Customs duties on the import of inputs or goods, including capital goods; or
 (ii) Customs duties and fees.

Under the MEIS, the basis for calculating the reward is the realized FOB value of exports in free foreign exchange or on FOB value of exports as given in the Shipping Bills in free foreign exchange, whichever is less, unless otherwise specified.
Under the SEIS, service providers providing eligible services are entitled to Duty Credit Scrips at notified rates on NFE.

C. Goods and Services Tax 

1. In General 
For further research on India's GST system, see also the VAT Navigator.
Under the Indian indirect tax regime in force until June 30, 2017, the Central Government had the power to levy and did levy the following taxes on businesses: 
(i) Customs duty on the import of goods;
 (ii) Excise duty on the manufacture of goods;
 (iii) Service tax on the provision of services; and
 (iv) Other taxes.

The state governments had the power to and in fact levied value added tax (VAT) on the sale of goods.
At times, multiple taxes were being levied on the same transaction by either the Central Government or the state governments. Further, various restrictions were imposed on the utilization of the input credit for the above taxes. This system was in operation for more than six decades, during which it exhibited various shortcomings, necessitating the introduction of a tax reform in the form of GST, which represents a more tax-efficient and liberal system.

2. Overview of Legislation 
The Constitution (101st Amendment) Act, 2016 amended various articles of the Constitution of India to provide the Central Government and the state governments with concurrent jurisdiction to levy and collect tax on the supply of goods or services or both and paved the way for the introduction of the GST regime in India.
The following legislation was enacted by the Central Government to put into operation the Indian GST law with effect from July 1, 2017: 
(i) The Central Goods and Services Tax Act, 2017 (the "CGST Act");
 (ii) The Integrated Goods and Services Tax Act, 2017 (the "IGST Act");
 (iii) The Union Territory Goods and Services Tax Act, 2017 ("UTGST Act");
 (iv) The Goods and Services Tax (Compensation to the States) Act, 2017;
 (v) Rules framed under the above Acts; and
 (vi) Notifications, circulars and orders periodically issued by the Central Government.

The GST regime is a major indirect tax reform that aims to create a common national market and remove inter-state trade barriers by subsuming under it multiple indirect taxes, as summarized below: 

Central Indirect Taxes	State Indirect Taxes	
Central excise duty under Central Excise Act, 1944	State VAT/sales tax	
Additional excise duty	Entertainment tax (other than tax levied by local bodies)	
Excise duty levied under Medicinal and Toilet Preparations (Excise Duty) Act, 1955	Central Sales Tax (levied by Central Government and collected by states)	
Service Tax under Finance Act, 1994	Octroi (Entry) duty	
CVD (additional customs duty)	Entry tax	
Special additional duty (customs)	Purchase tax	
Central surcharge and cess 	Luxury tax	
	Lottery tax	
	Betting and gambling tax	
	State surcharge and cess	

The following taxes or levies are not subsumed under GST: 
(i) BCD;
 (ii) Profession tax;
 (iii) Excise duty on alcoholic beverages and liquor;
 (iv) Tax on a basket of petroleum products, i.e., crude, motor spirit, aviation turbine fuel (ATF), high speed diesel (HSD) and natural gas;
 (v) Property tax levied by local civic authorities;
 (vi) Stamp duty levied by the states;
 (vii) Tax on the sale or consumption of electricity;
 (viii) Road tax; and
 (ix) Safe-guard duty levied on the import of steel.

The GST regime also attempts to tap or remove the various shortcomings experienced in the old indirect taxation regime, for example, by reducing the number of taxes, mitigating the cascading effect, adopting a simpler tax regime with fewer rates and exemptions, more efficiently neutralizing taxes, developing a common national market, broadening the tax base, improving compliance and using resources efficiently.
With the online fantasy sports league (OFSL) industry picking up momentum in India, the Central Government has introduced a GST levy of 28% on online gaming. Offshore platforms are also required to register for GST purposes in India. However, some states are yet to make the necessary amendments in their respective state GST (SGST) laws.

3. Key Concepts 

a. Scope of Tax 
The CGST Act provides for the levy of CGST on the intra-state supply of goods or services or both.802 The SGST Act provides for the levy of SGST on the intra-state supply of goods or services or both.
The UTGST Act provides for the levy of UTGST on the intra-state supply of goods or services or both. The IGST Act provides for the levy of IGST on the inter-state supply of goods or services or both.803 In short, CGST + SGST/UGST is levied on the intra-state supply of goods or services or both, while IGST is levied on the inter-state supply of goods or services or both.
The taxable event is now referred to as a "supply." Supply includes:804 
(i) All forms of supply of goods or services or both, such as sale, transfer, barter, exchange, license, rental, lease or disposal made or agreed to be made for consideration by a person in the course or furtherance of business;
 (ii) The import of services for consideration, whether or not in the course or furtherance of business;
 (iii) Specified activities, made or agreed to be made for no consideration; and
 (iv) Specified activities to be treated as a supply of goods or a supply of services.

The following activities are treated as neither the supply of goods nor the supply of services: 
(i) Specified activities and transactions; and
 (ii) Such activities or transactions undertaken by the Central Government, a state government or a local authority in which the body concerned is engaged as a public authority as may be notified by the government.805

The government may notify transactions that are to be treated as: 
(i) Supplies of goods and not supplies of services; or
 (ii) Supplies of services and not as supplies of goods.806

"Exempt supply" means a supply of any goods or services or both that attracts a zero rate of tax or that is wholly exempt from tax and includes a non-taxable supply.807
"Non-taxable supply" means a supply of goods or services or both that is not subject to tax.808
"Zero-rated supply" means either of the following supplies of goods or services or both: 
(i) The export of goods or services or both; or
 (ii) The supply of goods or services or both to an SEZ developer809 or an SEZ unit.810

"Taxable supply" means a supply of goods or services or both that is subject to tax.811
"Composite supply" means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, that are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply.812
Example: Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and the supply of goods is a principal supply.
"Mixed supply" means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where the supply does not constitute a composite supply.813
Example: A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. If supplied separately, these items are not a mixed supply.
A "person" covers: 
(i) An individual;
 (ii) A Hindu Undivided Family (HUF);
 (iii) A company;
 (iv) A firm;
 (v) A limited liability partnership (LLP);
 (vi) An association of persons or a body of individuals, whether incorporated or not, in India or outside India;
 (vii) A corporation established by or under any Act or a government company;
 (viii) A body corporate incorporated under a law relating to cooperative societies;
 (ix) A cooperative society registered under a law relating to cooperative societies;
 (x) A local authority;
 (xi) The Central Government or a state government;
 (xii) A society as defined under the Societies Registration Act;
 (xiii) A trust; and
 (xiv) Any artificial juridical person, not falling within any of the above.814

A "nonresident taxable person" means a person that occasionally undertakes transactions involving the supply of goods or services or both, whether as principal or agent or in any other capacity, but that has no fixed place of business or residence in India.815

b. Time of Supply 
The time of supply fixes the point when the liability to charge GST arises. It also indicates when a supply is deemed to have been made. There are separate provisions for determining the time of supply for goods and that for services.

(1) Supply of Goods 
The time of supply of goods is the earliest of: 
(i) The date of issue of the invoice by the supplier;
 (ii) The latest date on which the supplier is required to issue the invoice; or
 (iii) The date on which the supplier receives payment for the supply.816

Example: Supply of movable goods

S No.	Date of Removal	Date of Invoice	Date of Payment	Date of Book Entry	Time of Supply	
1	June 30, 20XX	July 15, 20XX	June 25, 20XX	July 7, 20XX	June 25, 20XX	
2	June 20, 20XX	July 15, 20XX	June 25, 20XX	July 7, 20XX	June 20, 20XX	
3	June 30, 20XX	June 28, 20XX	July 1, 20XX	July 7, 20XX	June 28, 20XX	
4	June 30, 20XX	July 15, 20XX	June 25, 20XX	June 20, 20XX	June 20, 20XX	

Example: Supply of non-movable goods

S No.	Date of Removal	Date Available	Date of Invoice	Date of Payment	Time of Supply	
1	Aug. 25, 20XX	Oct. 31, 20XX	Nov. 2, 20XX	Nov. 4, 20XX	Oct. 31, 20XX	

Where, as a result of a supply made in special circumstances, a supplier of taxable goods receives an amount of up to Rs. 1,000 in excess of the amount indicated in the tax invoice, to the extent of the excess amount, the time of supply will, at the option of the supplier, be the date of issue of the invoice for the excess amount.
To the extent it relates to an addition in the value of a supply by way of interest, late fees or penalty for delayed payment of any consideration, the time of supply is the date on which the supplier receives the addition in value.817

(2) Supply of Services 
The time of supply of services is the earliest of the following dates:818

Event	Time of Supply	
Invoice issued within prescribed time limit	(i) Date of issue of invoice, or(ii) Date of receipt of payment	
Invoice not issued within prescribed time limit	(i) Date of provision of services or(ii) Date of receipt of payment	
In any other case	Date on which recipient shows the receipt of service in its books of account.	

To the extent it relates to an addition in the value of a supply by way of interest, late fees or penalty for delayed payment of any consideration, the time of supply is the date on which the supplier receives the addition in value.819

c. Place of Supply 
The place of supply determines whether either CGST and SGST or IGST should be levied as follows: 
(i) CGST and SGST together constitute the tax charge for an intra-state supply; and
 (ii) IGST constitutes the charge for an inter-state supply.

(1) Supply of Goods and Services in Inter-State Trade or Commerce 
The supply of goods is a supply of goods in the course of inter-state trade or commerce where the location of the supplier and the place of supply are in: 
(i) Two different states;
 (ii) Two different union territories; or
 (iii) A state and a union territory.

Until the goods cross the customs frontier of India, the importation of goods into India is treated as a supply of goods in the course of inter-state trade or commerce and accordingly is subject to an IGST charge in addition to BCD.
Until the services cross the customs frontiers of India, the importation of services into India is treated as a supply of services in the course of inter-state trade or commerce.820

(2) Supply of Goods and Services Treated as Supply In the Course of Inter-State Trade and Commerce 
The supply of goods or services or both is treated as a supply in the course of inter-state trade or commerce when: 
(i) The supplier is located in India and the place of supply is outside India;
 (ii) The supply is made to or by a SEZ developer or a SEZ unit; or
 (iii) The supply is made in the taxable territory, is not an intra-state supply and is not covered under (i) or (ii).821

(3) Supply of Goods and Services in Intra-State Trade and Commerce 
Where the location of the supplier and the place of supply of the goods or services are in the same state or the same union territory, the supply is treated as an intra-state supply.
The following are not treated as intra-state supplies; 
(i) Supplies of goods made to or by an SEZ developer or an SEZ unit.
 (ii) The importation of goods into India until the goods cross the customs frontier of India; or
 (iii) Supplies made to a tourist.822

(4) Supply in Territorial Waters 
The place of supply is deemed to be the coastal state or union territory in which the nearest point of the appropriate baseline is located where: 
(i) The location of the supplier is in territorial waters; or
 (ii) The place of supply is in territorial waters.823

(5) Supply Involving the Movement of Goods 
Where the supply involves the movement of goods, whether by the supplier or the recipient, the place of supply is the location of the goods at the time at which the movement of the goods terminates for delivery to the recipient.824
In the case of the delivery of goods by the supplier to the recipient or any other person at the direction of a third person, whether before or during the movement of goods, the place of supply is the principal place of business of the third person.825
Where the supply does not involve the movement of goods, whether by the supplier or the recipient, the place of supply is the location of the goods at the time of delivery to the recipient.826
Where goods are assembled or installed at a site (for example, the assembly of plant or the installation of a lift), the place of supply is the place of assembly or installation.827
Where goods are supplied on board a mode of conveyance, the place of supply is the location at which the goods are taken on board.828

(6) Place of Supply of Imported or Exported Goods 
In the case of goods imported into India, the place of supply is the location of the imported goods upon entry into India. In the case of goods exported from India, the place of supply is the place of destination outside India.829
The place of supply of service of transportation of goods, including through mail and courier, has been further clarified. With effect from October 1, 2023, where the location of the supplier of services or of the recipient of services is outside India, the place of supply of service is the location of the recipient of services, per the default rule, but if the recipient of services is not available in the ordinary course of business, the place of supply of service is the location of the supplier of the services.830

(7) Place of Supply in Respect of the Advertising Sector 
Where there is a supply (sale) to a client or advertising company in respect of space or rights to use space on immovable property (i.e., hoardings or physical structures erected on land and embedded in the earth) owned by a vendor, the place of supply of services provided by the vendor is the physical location of the immovable property. This rule extends to related services provided by architects, interior decorators, surveyors, engineers and other related experts or estate agents.831
Alternatively, where a client or advertising company purchases advertising services from a vendor for displays of advertisements on hoardings or billboards at a specific location and the vendor is solely responsible for carrying out these activities and remains in complete possession of the hoardings or billboards for the duration of the advertising display, there has been no supply or sale of space or rights to use space on immovable property. Instead, the place of supply is the location of the registered person to whom the services are provided.832 If such person is not a registered entity, the place of supply is the address on record of the recipient of the services; in all other cases, the place of supply is the location of the vendor who supplies the services.

(8) Place of Supply of Co-Location Services 
According to Circular No. 203/15/2023-GST, "co-location" refers to a center or facility in which a business or company can rent space for its own computer servers and other computing hardware along with various other bundled services related to hosting and information technology (IT) infrastructure.
In cases where the agreement between a business or company (the recipient) and the supplier of the co-location services is limited to providing only the physical rental space for the computer servers and other hardware of the recipient and basic (passive) infrastructure support, the place of supply of the co-location services is the location where the immovable property (the rented space) is located.833
In contrast, in cases where, in addition to the provision of a physical space for rent for the placement of servers and other hardware components, the supplier of the co-location services provides comprehensive hosting and other IT infrastructure essential services (e.g., network connectivity, backup facility, firewall services, and monitoring and surveillance services), the place of supply of the co-location services is the location of the recipient of the services.834

d. Value of Supply 
Where the supplier and recipient of a supply of goods or services or both are not related and the price is the sole consideration, the value is the transaction value, i.e., the price actually paid or payable for the supply.835
The value of a supply includes: 
(i) Any taxes, duties, cess, fees and charges levied under any statute other than the GST Act;
 (ii) Any amount that the supplier is liable to pay in relation to the supply but that has been incurred by the recipient of the supply and is not included in the price actually paid or payable for the goods and/or services;
 (iii) Incidental expenses, such as commission and packing expenses, charged by the supplier to the recipient of the supply, including any amount charged for anything done by the supplier with respect to the supply at the time of, or before delivery of, the goods or the supply of the services;
 (iv) Interest, late fees or penalties for delayed payment of consideration for a supply; and
 (v) Subsidies directly linked to the price of the, excluding subsidies provided by the Central Government or a state government.836

The value of a supply does not include: 
(i) Levies under the SGST Act, the UTGST Act, the CGST Act or the Goods and Services Tax (Compensation to the States) Act, 2017, if charged separately by the supplier to the recipient;
(ii) Any discount granted before or at the time of supply, provided the discount is duly recorded in the invoice issued with respect to the supply; and
(iii) Any discount granted after the supply has been effected, provided:
 The discount is established under the terms of an agreement entered into at or before the time of supply and is specifically linked to the relevant invoices; and
 The input tax credit has been reversed by the recipient of the supply to the extent it is attributable to the discount.837

4. Registration 
GST registration is required for the following reasons: 
(i) To identify taxpayers with a view to ensuring tax compliance in the economy;
 (ii) To collect tax on behalf of the government; and
 (iii) To enable input tax credits to be claimed for tax on inward supplies.

The advantages of registration are: 
(i) Recognition as a registered supplier of goods or services;
 (ii) Authorization to collect taxes from customers;
 (iii) The ability to claim input tax credits for tax paid and utilize such credits for the payment of tax due on supplies of goods or services; and
 (iv) The seamless flow of input tax credits from suppliers to recipients at the national level.

a. Scope of Requirement 
Since GST is a tax based on the occasion of a "supply," every supplier must be registered. For this purpose, the GST law identifies the following categories of persons/suppliers: 

Category	Registration Deadline	
A person registered or holding a license under the earlier indirect tax regime — (an "existing taxpayer")	Within 30 days from the day on which the CGST Act entered into force	
A person with an aggregate turnover of taxable supplies that exceeds the threshold limit838 — (a "new taxpayer")	Within 30 days from the day on which the limit is exceeded	
A business transfer on account of succession or otherwise	Within 30 days from the date of transfer or succession	
An amalgamation or a demerger	Within 30 days from the day on which ROC issues certificate of incorporation	
Compulsory registration (threshold limit not available)(i) In the case of a casual taxable person or a nonresident person (see Note below)(ii) In the case of any other person	(i) Within five days from the date of commencement of business(ii) Within 30 days from the date of liability	
Voluntary registration (taken despite the person not being liable for registration)	No time limit prescribed	

Note: A "casual taxable person" is a person that occasionally undertakes transactions involving the supply of goods and/or services in the ordinary course of business, as a principal or an agent or in any other capacity, in any state or union territory in which the person has no fixed place of business.839

A "nonresident" taxable person is a person that occasionally undertakes transactions involving the supply of goods and/or services in the ordinary course of business, as a principal or an agent or in any other capacity, in any state or union territory where the person has no fixed place of business in India.840
"Aggregate turnover" means the aggregate value (computed on a country-wide basis) of 
(i) All taxable supplies;
 (ii) Exempt supplies,
 (iii) Exports of goods or services or both; and
 (iv) Inter-state supplies of persons having the same permanent account number (PAN).

The aggregate turnover also includes supplies made on behalf of principals.841
Aggregate turnover excludes: 
(i) The value of inward supplies on which tax is payable on a reverse charge basis; and
 (ii) CGST, SGST, UGST and IGST.842

The following persons are not liable to register: 
(i) Persons engaged exclusively in the business of supplying goods or services or both that are not liable to tax or are wholly exempt from tax; and
 (ii) Agriculturists, to the extent of their supplies of produce deriving from the cultivation of land.843

Registration is compulsory for: 
(i) Persons making inter-state taxable supplies;
 (ii) Casual taxable persons making taxable supplies;
 (iii) Persons required to pay tax under the reverse charge mechanism;
 (iv) E-commerce operators in specified circumstances;
 (v) Nonresident taxable persons making taxable supplies;
 (vi) Persons required to deduct tax under the GST law, whether or not separately registered under the CGST Act;
 (vii) Persons making taxable supplies of goods or services or both on behalf of other taxable persons, whether as agents or otherwise;
 (viii) Input service distributors, whether or not separately registered under the CGST Act;
 (ix) Persons supplying goods or services or both, other than specified supplies, through electronic commerce operators that are required to collect tax at source;
 (x) Electronic commerce operators;
 (xi) Persons supplying online information and database access or retrieval services (OIDAR) from a place outside India to persons in India, other than registered persons; and
 (xii) Such other persons or classes of persons as may be notified by the government.844

b. Nature of Registration 
Registration for GST purposes requires a PAN and is state specific. A supplier must obtain a separate registration for branches in each state or union territory from which supplies are effected, and thus, an entity must have one registration per state. Within a state, an entity with different branches can have a single registration where one place is declared as the principal place of business and the other branches as additional places of business.
Since registration under GST is not tax specific, a single registration is required for all applicable taxes.

c. Non-Compliance 
Branch offices that are not registered for GST are categorized as unregistered suppliers and are not allowed to levy and collect tax on behalf of the government. Nor can they claim input tax credits for tax on inward supplies. Such input tax credits will form part of the cost of outward supplies and will have a cascading effect that will impact profit margins.

d. Registration Procedure 
The procedure for registration is standard and uniform throughout the country. An application for registration must be submitted online through the common portal (GSTN) within the strict time limits discussed above. Aadhar845 authentication of the authorized signatory is mandatory for obtaining registration.
Amendments to a registration application, except for changes to some core information, can be made on the GSTN without any specific approval having to be obtained.
Registration under the GST law is cancelled when: 
(i) The taxable person no longer requires it (voluntary cancellation, which happens on the GSTN within 30 days of the event warranting cancellation); or
 (ii) The proper officer considers the registration liable for cancellation in view of certain specified defaults (suo moto cancellation). The taxable person can apply within 30 days of service of the cancellation order, asking the officer to revoke the cancellation.

Note: In the case of voluntary registration, no cancellation is allowed until the expiration of one year from the effective date of registration.

5. Tax Rates 
Different GST rates are prescribed for the supply of goods and the supply of services.
The rates of tax on the supply of goods are as follows:

Goods specified in Schedule I, CGST Act	5%	
Goods specified in Schedule II, CGST Act	12%	
Goods specified in Schedule III, CGST Act	18%	
Goods specified in Schedule IV, CGST Act	28%	
Goods specified in Schedule V, CGST Act	3%	
In respect of goods specified in Schedule VI, CGST Act	0.25%	

An additional GST compensation cess applies to some goods falling in the 28% tax category.
The rates of tax on the supply of services are as follows: 

On specified services	At the rate established for the specified services concerned	
Other than the above specified services	18%	

Further, in the case of intra-state supplies, the Central Government and the relevant state government have concurrent jurisdiction to levy and collect CGST and SGST. The above rates are therefore bifurcated into a 50% CGST component and a 50% SGST component.
Example: If the applicable rate of tax on a supply is 18% of the value of the supply: 
(i) In the case of an inter-state transaction, the tax charged will be the aggregate of 9% CGST and 9% SGST;
 (ii) In the case of an intra-state transaction, the tax charged will be 18% IGST.

6. Exemptions 
Exemptions from tax can be granted by the Central Government or a state government.846 The issuance of a notification is a mandatory condition for the granting of an exemption from the payment of tax. The notification may grant either an absolute exemption or an exemption subject to conditions. In the exercise of these powers, the Central Government has issued notifications exempting various supplies of services.847
The Central Government or a state government may exempt any goods or services from tax by special order.848 Such a special order can be issued only in the case of an exceptional natural disaster (to be stated in the order) such as an earthquakes or a tsunami.

7. Reverse Charge Mechanism 
Generally, the supplier of goods or services is liable to pay GST. However, in specified cases such as imports and other notified supplies, the liability may lie with the recipient under the reverse charge mechanism.
The reverse charge means that the liability to pay tax falls on the recipient of the supply of goods or services or both, instead of the supplier.849 The GST law provides for the application of the reverse charge in two scenarios: 
(i) One that depends on the nature of the supply and/or the nature of the supplier; and
 (ii) One where taxable supplies are made by an unregistered person to a registered person.

However, the reverse charge does not apply where the aggregate value of such supplies of goods or services or both received by a registered person from any or all of its unregistered suppliers is less than Rs. 5,000 in a day.850

a. Supply of Goods 
The Central Government has issued notifications stating the nature of supplies of goods that are subject to the reverse charge and the persons liable to pay GST under the reverse charge.851

b. Supply of Services 
The Central Government has issued notifications stating the nature of supplies of services that are subject to the reverse charge and the persons liable to pay GST under the reverse charge.852

c. Time of Supply 
The time of supply of goods where the reverse charge applies is the earliest of: 
(i) The date of receipt of the goods;
 (ii) The date on which payment is made;
 (iii) The date immediately following 30 days from the date of issue of the invoice by the supplier; or
 (iv) The date of entry of the supply in the books of the recipient.853

The time of supply of services where the reverse charge applies is the earliest of: 
(i) The date on which payment is made;
 (ii) The date immediately following 60 days from the date of issue of the invoice by the supplier;
 (iii) The date of entry of the supply in the books of the recipient; or
 (iv) In the case of a supply made by an associate enterprise854 where the supplier is located outside India, the date of entry of the supply in the books of account of the recipient or the date of payment, whichever is earlier.855

Every tax invoice must indicate whether the tax on the supply that is the subject of the invoice is payable under the reverse charge. This also needs to be indicated in a receipt voucher as well as a refund voucher, if tax is payable under the reverse charge.856

8. Input Tax Credit 
One of the most important features of the GST system is that the entire supply chain is subject to GST levied by the Central Government and a state government concurrently. As the tax charged by the Central Government and the state government is part of the same tax regime, the credit for GST paid at every stage (input tax) is available to set-off the payment of GST at every subsequent stage.
"Input tax" means CGST/SGST/IGST/UTGST charged on a supply made to a registered person and includes IGST charged on the import of goods and CGST/SGST/IGST/UTGST payable on a reverse charge basis, but excludes the tax paid under the composition levy.857

a. Credit Eligibility 
A registered person is entitled to take a credit for input tax charged on the supply of goods or services used or intended to be used in the course or furtherance of business.858 The input tax credit is also available in the following special cases:

In the Case of	Input Tax Credit on 
 Inputs	Input Tax Credit on Capital Goods	
Person applying for registration within 30 days of becoming liable	Allowed	Not allowed	
Person applying for voluntary registration	Allowed	Not allowed	
Person opting out of composition scheme	Allowed	Allowed	
Previously exempt person supplying taxable goods or services or both	Allowed (related to exempt supplies)	Allowed (exclusively used for exempt supplies)	
Business transfer, to the transferee	Allowed	Allowed	

b. Credit Claims 
The following requirements must be met for the input tax credit to be available: 
(i) The registered person claiming the input tax credit must be in possession of a tax invoice or any other proof of tax payment (applicable in the case of supplies under the reverse charge mechanism);
(ii) The tax charged on the supply concerned must actually be paid by the vendor to the respective government, either in cash or by way of the utilization of input tax credits;
(iii) Input tax credit can be claimed in the returns filed and in any event, input tax credit for a financial year can be claimed by November 30 of the subsequent financial year; and
(iv) If the value of the supply and the tax thereon are not paid to the supplier within 180 days from the date of issue of the invoice, the input tax credit must be added to the output tax liability, together with interest. However, once the amount is paid, the recipient will be entitled to claim the credit. In the event part payment has been made, proportionate credit will be allowed.

In the case of goods received in lots, the registered person can claim the input tax credit on receipt of the last lot and, if the details of the invoice are not populated in the monthly statement of inward supplies (GSTR 2B), the input tax credit cannot be claimed by the recipient.859

c. Documentation Requirements 
The following documents are necessary for claiming the input tax credit: 
(i) An invoice issued by the supplier;
 (ii) A debit note issued by the supplier;
 (iii) A self-invoice in the case of a supply received from an unregistered supplier or any other case in which the reverse charge mechanism is involved, along with proof of payment of tax;
 (iv) A bill of entry for imported goods;
 (v) An input service distributor (ISD) invoice/credit note; and
 (vi) In the case of an inward supply, a document containing the prescribed information.

In addition to the above documents, the supplier must have filed a GST return and details must have been communicated to the recipient.

d. Credit Utilizations on Inward Supplies 
The following chart shows the method of, and priority for, utilizing the input tax credit on inward supplies:

Credit of	First to Be 
 Utilized for 
 Payment of	Unutilized 
 Balance May Be Utilized for 
 Payment of	
IGST	IGST	CGST, then SGST/UTGST	
CGST	CGST	IGST	
SGST/UTGST	SGST/UTGST	IGST	

e. Blocked Input Tax Credit 
Input tax credit is not available with respect to: 
(i) Motor vehicles and other conveyances, except in specified circumstances;
(ii) General insurance, servicing, repair and maintenance services insofar as they relate to motor vehicles and other conveyances, except in specified circumstances;
(iii) Goods and/or services provided in relation to:
 Food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, except in specified circumstances;
 Membership in a club, health or fitness center;
 Rent-a-cab, life insurance or health insurance, except where it is obligatory for an employer under any law; or
 Travel benefits extended to employees on vacation, such as leave or home travel concession;
(iv) Works contract services when supplied for the construction of immovable property, other than plant and machinery, except where it is an input service for the further supply of a works contract;
(v) Goods or services received by a taxable person for the construction of immovable property, other than plant and machinery, on the person's own account, even when used in the course or furtherance of business;
(vi) Goods or services on which tax has been paid under a composition scheme;
(vii) Goods or services for private or personal consumption, to the extent they are so consumed;
(viii) Goods or services received by a nonresident taxable person, except for goods imported by the nonresident;
(ix) Goods lost, stolen, destroyed, written off or gifted, or free samples; or
(x) Any tax paid due to short payment on account of fraud, suppression, misdeclaration, seizure or detention.860

9. Exports and Imports 

a. Exports of Goods 
The "export of goods" means the taking of goods out of India to a place outside India. An export of goods is considered a zero-rated supply. However, an exporter has two options under which it can export goods: 
(i) On payment of IGST: in this case, the exporter automatically obtains a refund of IGST paid from the customs department (except in the case of specified goods and services).
 (ii) Without payment of IGST: in this case, the exporter obtains a Letter of Undertaking (LUT) and then, subject to certain conditions, is able to export the goods without paying IGST.

b. Exports of Services 
The "export of services" means the supply of any services when: 
(i) The supplier of the services is located in India;
 (ii) The recipient of the services is located outside India;
 (iii) The place of supply of the services is outside India;
 (iv) The payment for the services is received by the supplier in convertible foreign exchange; and
 (v) The supplier and the recipient are not merely establishments of a distinct person in accordance with Explanation 1 in Section 8.861

c. Imports of Goods 
Under the GST regime, the supply of goods or services or both in the course of importation into India is deemed to be the supply of goods or services or both in the course of inter-state trade or commerce for purpose of the levy of IGST.
The place of supply is the location of the importer.862
Since all imports are deemed to constitute inter-state supplies, IGST is levied on imports in addition to the applicable custom duties. The IGST Act, 2017 provides that the IGST on goods imported into India must be levied and collected in accordance with the provisions of the Customs Tariff Act, 1975 on the value as determined under that Act at the point when customs duties are levied on the goods under the Customs Act, 1962. Thus, IGST on imported goods is levied in addition to the applicable BCD levied under the Customs Tariff Act. GST compensation cess may also be levied on certain luxury and demerit goods under the Goods and Services Tax (Compensation to States) Cess Act, 2017. The value of an imported article for purposes of the cess is the assessable value plus BCD, and any sum chargeable on the goods excluding the IGST paid.
Example: Suppose the assessable value of an article imported into India is Rs. 100. BCD is 10% ad valorem. IGST rate is 18%.
Taxes will be calculated as follows: 
(i) Assessable Value = Rs. 100
 (ii) BCD = Rs. 10
 (iii) Value for purposes of IGST = Rs. 100 + Rs. 10 = Rs. 110
 (iv) IGST = 18% × Rs. 110 = Rs. 19.80
 (v) Total taxes = Rs. 29.80

If the goods concerned are also subject to the cess under the Goods and Services Tax (Compensation to States) Cess Act, 2017, the cess is collected on the value for IGST purposes. Thus, in the above example, if the cess were to be levied, it would be levied on Rs. 110.
An input tax credit with respect to IGST paid at the time of import is available to the importer and can be utilized by the importer to pay GST on its outward supplies. BCD is not available as an input tax credit.

d. Imports of Services 
The import of services in the course or furtherance of business is considered to constitute a supply.863 In general, the import of services for no consideration is not considered to constitute a supply regardless of how the services are utilized. However, the import of services by a taxable person from a related or an unrelated person in the course or furtherance of business is treated as a supply even if the import is for no consideration.864
The import of services is taxable under the IGST Act. The importer of the services must pay tax on reverse charge basis. However, in the case of the import of OIDAR by unregistered, non-taxable recipients, the supplier located outside India is responsible for the payment of GST, so that the supplier must either be registered or must appoint a person in India to pay GST on its behalf.
While all imports of services are liable to IGST, if the tax on an import of services was paid in full under the prior law, no tax is payable on the import under the IGST Act. If the tax was paid in part under the prior law, the balance is payable under the IGST Act.
Example: Suppose a supply of services for Rs. 10 million was initiated prior to the introduction of GST, a payment of Rs. 2 million has already been made to the supplier and the service tax due on the import has also been paid. IGST must be paid on the balance of Rs. 8 million.
The following table summarizes the place of supply in relation to the international or cross-border supply of services (imports and exports of services):865 

	Specific Situation	Place of Supply	
1.	General rule other than specific situations mentioned below	Location of the recipient of the services;if not available, location of the supplier of the services	
2. 	Performance-based service supplied:(i) with respect to goods required to be made physically available; or(ii) the recipient or the person acting on his behalf in relations with the supplier of the services is physically present	Location where the services are actually performed	
	Services are provided with respect to goods but from a remote location by way of electronic means	Location where the goods are situated at the time of supply of the services	
	The above provisions do not apply with respect to goods temporarily imported into India for repair that are exported after repair 	
3.	Services supplied directly in relation to immovable property	Location or intended location of the immovable property	
4.	Event based services — admission to, or organization of an event	Location of the event	
5.	Services referred to in 2., 3. and 4. provided in more than one country including India	India	
6.	Services referred to in 2, 3 and 4 provided in more than one state	Proportionate basis	
7.	(i) Services supplied by a banking company, a financial institution, or a non-banking financial company, to account holders;(ii) Intermediary services; and(iii) Services consisting of hiring of means of transport, including yachts but excluding aircraft and vessels, for up to a period of one month	Location of the supplier of the services	
8.	Services relating to the transportation of goods, other than by way of mail or courier	Place of destination of the goods	
9.	Passenger transportation services	Place where the passenger embarks on a conveyance for a continuous journey	
10.	Services provided on board a conveyance	First scheduled point of departure of the conveyance	
11.	OIDAR	Location of the recipient of the services	

The following table summarizes the location of the recipient:866

Image was here. 

The following table summarizes the location of the supplier:867

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10. Administrative Matters 

a. Composition Rules 
Certain categories of specified persons can opt for a composition scheme that provides for the levying of taxes at a concessional rate ranging from 0.5% to 3% on certain supplies. The basic condition for inclusion in the composition scheme is that turnover may not be more than Rs. 15 million in the case of taxpayers engaged in the supply of goods and Rs. 5 million for those engaged in the supply of services.
The consequences for a seller or supplier of opting for the composition scheme are as follows: 
(i) The supplier/seller is required to pay taxes on outward supplies at the rate prescribed.
 (ii) The supplier/seller is not allowed to claim an input tax credit for taxes paid on inward supplies.
 (iii) The input tax credit forms part of the cost of outward supplies, which has a cascading effect and impacts profit margins.
 (iv) There are minimal compliance requirements in terms of the maintenance of accounts and records, and the filing of GST returns.

b. Value of Supply Rules 
The valuation of supplies of goods or services or both varies from situation to situation.
Special rules apply with respect to the preparation of tax invoices, debit and credit notes and the manner of their issue, as well as with respect to the electronic tax liability register, the electronic credit ledger and the electronic cash ledger.

c. Accounts and Records 
The GST regime requires every registered person to keep and maintain all records at the person's principal place of business and at every other place of business referred to in the certificate of registration, including data in electronic form stored on electronic devices. The data so stored must be authenticated by way of a digital signature.
The specified records to be maintained relate to: 
(i) The production or manufacture of goods;
 (ii) The inward and outward supply of goods or services or both;
 (iii) Stocks of goods;
 (iv) Input tax credits claimed;
 (v) Output tax payable and paid; and
 (vi) Such additional particulars as may be prescribed.

The rules also provide that the registered person must keep and maintain records of: 
(i) Imported or exported goods or services; and
 (ii) Supplies attracting the payment of tax on a reverse charge basis along with the relevant documents, including invoices, bills of supply, delivery challans,868 credit notes, debit notes, receipt vouchers, payment vouchers, refund vouchers and e-way bills.

Note: If more than one place of business is specified in the certificate of registration, the accounts relating to each place of business must be kept at each place of business.

The Commissioner is empowered to notify a class of taxable persons that they are required to maintain additional accounts or documents for specified purposes or to maintain accounts in another prescribed manner.
In addition, a registered person whose turnover during a financial year exceeds the prescribed limit must have its accounts audited by a Chartered Accountant or a Cost Accountant.

d. Preservation of Accounts 
All accounts maintained together with all invoices, bills of supply, credit and debit notes, and delivery challans relating to stocks, deliveries, inward supplies and outward supplies must be preserved for six years from the due date for furnishing the annual return for the year pertaining to the accounts and records concerned.

e. Maintenance of Electronic Records 
A taxpayer is required to maintain proper electronic back-up records. In addition, a taxpayer must produce, on demand, the relevant records or documents, duly authenticated, in hard copy or in any electronically readable format.
Accounts for a works contract must contain the following information: (i) the names and addresses of the persons on whose behalf the contract is executed; (ii) a description, the value and the quantity (wherever applicable) of goods or services received for purposes of the execution of the contract; (iii) a description, the value and the quantity (wherever applicable) of the goods or services utilized in the execution of the contract; (iv) details of the payment received with respect to the contract; and (v) the names and addresses of suppliers from whom goods or services have been received.
Also, any person engaged in the business of transporting goods must maintain records of the goods transported, delivered and stored in transit by the person and for each of the person's branches. An owner or operator of a warehouse must maintain books of accounts with respect to the period for which particular goods remain in the warehouse, including particulars relating to the dispatch, movement, receipt and disposal of those goods.

f. Tax Returns 
A taxpayer must submit monthly returns and one annual return electronically.
How frequently some GST returns need to be filed may be different for GSTR-1 and GSTR-3B filers if they opt into the quarterly return filing and monthly payment of taxes (QRMP) scheme.
The mechanism for filing revised returns for the correction of errors or omissions has been eliminated. The rectification of errors or omissions is allowed in subsequent returns.
The following table summarizes the tax returns to be filed:

Return Form	Category of Taxpayer	Significance	Due Date	Penalty for 
 Noncompliance	
GSTR-1 — Monthly statement of outward supplies	Registered person except — person opting for Composition scheme ISD, tax deducted at source/tax collected at source taxpayer, and nonresident taxpayer	For determining output tax liability	(a) Monthly, by the 11th of every month— If the business has an annual aggregate turnover of more than Rs. 50 million(b) Quarterly, by the 13th of the month following every quarter— if the business has opted into the quarterly returns with monthly payment (QRMP) scheme.	Late fee of Rs. 50/20* per day, subject to a maximum of Rs. 10,000* In the case of a nil return	
GSTR-2A — Monthly statement of inward supplies (auto-populated dynamic statement from suppliers' GSTR-1.)	For determining input tax credit availability	Not applicable	Not applicable	Not applicable	
GSTR-2B — Monthly statement of inward supplies (auto-populated static statement from the suppliers' GSTR-1.)	For determining input tax credit availability	Not applicable	Not applicable	Not applicable	
GSTR-3B — Monthly statement containing output and input tax figures.	Registered person except — person opting for composition scheme ISD, tax deducted at source/tax collected at source taxpayer, and nonresident taxpayer	For determining and discharging GST liability	See Note below	Late fee of Rs. 50/20* per day, subject to a maximum of Rs. 10,000* In the case of a nil return	
GSTR-4 — Annual return	Person opting for composition scheme		30th June of the year following the relevant financial year		
GSTR-5 — Monthly return	Nonresident taxpayer	For determining net tax payment after claim for input tax credit	20th of the month following the tax period and within seven days after expiry of registration		
GSTR-6 — Monthly return	ISD		13th of the next month10th of the next month		
GSTR-7 — Monthly return	Tax deducter				
GSTR-8 — Monthly statement (depicting supplies effecting through it)	E-commerce operator		10th of the next month		
GSTR-9 — Annual return	Registered person having annual aggregate turnover over Rs. 2 crores except — person opting for Composition scheme, ISD, tax deducted at source/tax collected at source taxpayer, casual taxable person and nonresident taxpayer		December 31 of next Financial Year.	Late fee of Rs. 200 per day, subject to a maximum of 0.25% of turnover	

The filing frequency for GSTR-3B is currently as follows: 
(i) Monthly, 20th* of every month: for taxpayers with aggregate turnover in the previous financial year of more than Rs. 50 million or that were otherwise eligible but opted out of the QRMP scheme.
(ii) Quarterly, 22nd of the month following the quarter for X category states** and 24th of the month following the quarter for Y category states***: for taxpayers with aggregate turnover equal to or lower than Rs 5 crore that are eligible for and remain opted into the QRMP scheme.
* Effective from January 2021 tax period onwards.
** X category states/UT: Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman and Nicobar Islands and Lakshadweep.
*** Y category states/UT: Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union Territories of Jammu and Kashmir, Ladakh, Chandigarh and New Delhi.

A registered person is not allowed to furnish a return on Form GSTR 1 if the GSTR 3B for the preceding month/quarter has not been furnished.869
Returns for a tax period must be filed within three years from the end of the relevant due date. This period may be extended with respect to specified persons by the Government at the recommendation of the GST council.

g. Refund Claims 
The GST law envisages a simplified, time bound and technology-driven refund procedure with minimal human interface between the taxpayer and the tax authorities. There is a common refund application form GST RFD 01 that is filed electronically. Eligibility to file a refund application requires Aadhar authentication of the authorized signatory.870
A claim for refund may arise on account of: 
(i) The export of goods or services;
 (ii) Supplies to SEZ units and developers;
 (iii) Deemed exports;
 (iv) Purchases made by the United Nations (UN), embassies, etc.871
 (v) A judgment, decree, order or direction of the Appellate Authority, the Appellate Tribunal or any court;
 (vi) The finalization of a provisional assessment;
 (vii) Pre-deposit;
 (viii) Excess payment due to error;
 (ix) GST paid on goods in India that are carried abroad by international tourists at the time of their departure from India;
 (x) The issuance of refund vouchers for taxes paid on advances against which goods or services have not been supplied;
 (xi) CGST and SGST being paid on a supply treated as an interstate supply that is subsequently held to be an intra-state supply and vice versa.

A claim for refund must be filed within two years from the relevant date.
The "relevant date" means:872 

Specific 
 Situations	Tax Refund for Goods or Services	Relevant Date	
Goods exported out of India by:(i) Sea or air(ii) Land(iii) Mail	Goods or inputs or input services	(i) Date on which goods are loaded(ii) Date on which goods pass frontier(iii) Date of dispatch of goods by Post Office	
Supply of goods regarded as deemed exports	Goods	Date return relating to deemed exports is furnished	
Services exported out of India	Output services or input services	— If no advance in foreign currency received, date of receipt of payment, or— Date of issue of invoice	
Refund arising as a consequence of judgment, decree, order or direction of Appellate Authority, Appellate Tribunal or any court		Date of communication of judgment, decree, order or direction	
Refund of unutilized input tax credit		By end of financial year in which claim for refund arises	
Refund arising on account of excess provisional tax payment		Date of adjustment of tax after final assessment	
Refund of tax paid on reverse charge		Date of receipt of goods or services or both	
Any other case		Date of payment of tax	

Note: The period from March 1, 2020 to February 28, 2022 is to be excluded in computing the limitation period for filing a refund application.

h. Electronic Invoicing 
Electronic invoicing (or e-invoicing) is a system under which business-to-business (B2B) invoices are authenticated electronically by the GSTN for further use on the common GST portal. Under the electronic invoicing system, an identification number is issued against every invoice by the Invoice Registration Portal (IRP), managed by the GSTN. The National Informatics Centre launched the first IRP at einvoice1.gst.gov.in.
All invoice information is transferred from this portal to both the GST portal and the e-way bill portal in real-time, thus eliminating the need for manual data entry when filing GSTR-1 returns and generation of part-A of e-way bills, as the information is passed directly by the IRP to the GST portal.
The implementation phases of e-invoicing based on turnover thresholds are as follows:

Sr. No.	Notification No.	Period	Aggregate 
 Annual Turnover Limit (in Rs.)	
1.	61/2020 CT dated March 21, 2020	October 1, 2020 onwards	5 billion	
2.	88/2020 CT dated October 11, 2020	January 1, 2021 onwards	1 billion	
3.	05/2021 CT dated August 3, 2021	April 1, 2021 onwards	500 million	
4.	01/2022 CT dated February 24, 2022	April 1, 2022 onwards	200 million	
5.	17/2022 CT dated August 1, 2022	October 1, 2022 onwards	100 million	
6.	10/2023 CT dated May 10, 2023	August 1, 2023 onwards	50 million	

However, irrespective of turnover, e-Invoicing does not currently apply to the following categories of registered persons, as indicated in CBIC Notification No. 13/2020 — Central Tax: 
(i) Insurers, banking companies and financial institutions, including Non-Banking Financial Companies (NBFCs);
 (ii) Goods transport agencies (GTAs);
 (iii) Registered persons supplying passenger transportation services;
 (iv) Registered persons supplying services by way of admission to the exhibition of cinematographic films in multiplex facilities;
 (v) SEZ units (excluded via CBIC Notification No. 61/2020 — Central Tax); and
 (vi) Government departments and local authorities (excluded via CBIC Notification No. 23/2021 — Central Tax).

i. Advance Rulings 
Rules have been laid down for advance rulings on specified issues in the area of GST (see Note below) referred to the relevant authority. The application must be made by the applicant to the authority in the prescribed form and manner.
The authority must issue its ruling within 90 days of the application. A ruling is binding on the applicant and the tax officer concerned. Appeals may be filed against rulings subject to certain conditions.873
Advance rulings under the GST Act can be sought with respect to: 
(i) The classification of goods or services or both;
 (ii) The applicability of a notification issued under the GST Act;
 (iii) Determination of the time and value of a supply of goods or services or both;
 (iv) The admissibility of the input tax credit for tax paid or deemed to have been paid;
 (v) Determination of the liability to pay tax on goods or services or both;
 (vi) Whether the applicant is required to be registered;
 (vii) Whether an act of the applicant with regard to goods or services results in a supply of goods or services or both.

j. Penalties 
Penalties can be imposed on taxpayers in specified instances.874

k. Assessment and Audit 
The CGST Act set out the circumstances in which a Commissioner or duly authorized officer may visit the place of business of a taxpayer and undertake an audit of the books and records to ensure compliance with the law and payment of taxes.875
Assessments of returns filed by taxpayers can be made by way of: 
(i) Self-assessment;
 (ii) Provisional assessment;
 (iii) Examination of returns;
 (iv) Assessment of non-filers of returns;
 (v) Assessment of unregistered persons;
 (vi) Summary assessment, in certain cases.876

The time limit to issue a notice for recovery of tax has been extended as follows: 
 For FY 2018–19 — from December 31, 2023 to April 30, 2024; and
 For FY 2019–20 — from March 31, 2024 to August 31, 2024.

With effect from FY 2024–25 onwards, the time limit to issue a notice for recovery is 42 months from the due date of filing the relevant annual return and the demand order will be 12 months from the date of notice.

l. Appeals 
A registered person aggrieved by an Order passed by the adjudication authority can appeal to the first appellate authority i.e. generally the Commissioner of State / Central Tax. The Order passed by the first appellate authority can be appealed before the Goods and Service Tax Appellate Tribunal (GESTAT).
With effect from November 1, 2024, the pre-deposit amount, which is based on the amount of tax in dispute, required to be paid to file an appeal is reduced as follows: 

Appellate Authority	Prior Rules	Current Rules	
First Appellate Authority	10% of total tax due subject to a maximum of Rs. 500 million.	10% of total tax due subject to a maximum of Rs. 400 million.	
Appellate Tribunal	20% of total tax due subject to a maximum of Rs. 1000 million.	10% of total tax due subject to a maximum of Rs. 400 million.	

D. Stamp Duty 

1. In General 
The Indian Stamp Act, 1899, is a fiscal enactment governing the levying of tax in the form of stamp duties on instruments recording transactions. The primary object of the Stamp Act is to raise revenue for the state. The Stamp Act extends to the whole of India, except the states of Jammu and Kashmir. The state governments have in some cases enacted separate state stamp laws. However, the provisions of these state laws are mostly identical to those of the Indian Stamp Act, 1899.
There is a distribution of power to legislate regarding stamp duties between the Central Government and the states. The national parliament has the exclusive power to fix the rates of duty with respect to bills of exchange, checks, promissory notes, bills of lading, transfers of shares, debentures, proxies and receipts. The states have the exclusive power to legislate in the matter of rates of stamp duty with respect to all other documents.877
The Bombay Stamp Act and certain provisions of the Indian Stamp Act apply to the state of Maharashtra. The instruments executed in the state and listed in the Schedule to the Act are chargeable to stamp duty at the applicable rate. Instruments executed outside the state are liable to duty only on their receipt in the state and provided they relate to property situated in the state or a matter or thing to be done in the state. All other instruments are charged under the Indian Stamp Act or not at all.

2. Application of the Stamp Act 
The following principles govern the application of the Stamp Act: 
(i) Subject to certain exemptions, stamp duty is levied on an instrument and not on a transaction;878
 (ii) Stamp duty is payable on an instrument according to its tenor, that is, it is the real nature of the transaction that determines the stamp duty; and
 (iii) A transaction may be structured in such a manner that a lower rate of duty is attracted.

An instrument is defined to include every document by which any right or liability is or is purported to be created, transferred, limited, extended, extinguished or recorded. However, (under the Stamp Act as applicable to Maharashtra) it does not include a bill of exchange, check, promissory note, bill of lading, letter of credit, policy of insurance, share transfer, debenture, proxy or receipt.879

3. Instruments Subject to Stamp Duty 
An instrument is chargeable with stamp duty in the amount indicated in Schedule I to the Stamp Act, which gives a list of instruments liable to stamp duty. Instruments not mentioned in Schedule I are not subject to stamp duty. The liability of an instrument to stamp duty is determined by the Stamp Act in force at the time. Instruments in favor of the government; instruments for the sale, transfer or other disposition of a ship; bills of exchange and promissory notes executed outside India and acted on outside India or instruments in favor of a developer or unit, in connection with the carrying out of the purposes of an SEZ; and instruments executed outside India and relating to property situated outside India or to some other matter or thing done or to be done outside India are not liable to stamp duty. Exemptions from stamp duty have been granted under other laws such as the Land Acquisition Act, 1894, the Indian Works of Defense Act, the Central Co-operative Societies Act, 1912, and the Co-operative Societies Acts in the various states. No revenue stamp is required to be obtained in a payment voucher if the payment does not exceed Rs. 5,000.

4. Multifarious and Multipurpose Instruments 
In many cases, a single transaction such as a sale, mortgage or settlement may be completed using more than one instrument. In such cases, only the principal instrument, as determined by the parties to the transaction, is chargeable with the duty prescribed, the other instruments being subject to duty of Rs. 1 instead of the duty prescribed.880
A "multifarious instrument," that is, an instrument in which a number of distinct matters or transactions are embodied, is chargeable with the aggregate amount of duties with which the separate instruments with respect to each distinct matter would have been chargeable.881
An instrument so drawn up as to come within two or more descriptions in Schedule I to the Act (i.e., a multi-description or multipurpose instrument) but that does not cover more than one matter, as in the case of a multifarious instrument, is chargeable with the highest duty that may be applicable.882

5. Payment of Stamp Duty 
Stamp duty is generally paid at the stamp office and payment must be indicated on the relevant instruments by means of stamps, whether adhesive or impressed.883 Certain instruments, such as notarial acts, transfers of shares in any incorporated company, bills of exchange and promissory notes may be stamped using adhesive stamps. Such adhesive stamps must be cancelled once affixed to the instruments concerned, to prevent them from being used more than once.884
Stamp duty is generally payable by the person drawing up, making or executing an instrument, unless otherwise determined by contract.885 The law relating to stamp duty in force in the state in which the instrument is executed normally determines the stamp duty. Where stamp papers are used, the papers must be in the name of one of the parties to the transaction. The date of issue of the stamp paper may not be more than six months prior to the date of the transaction.

6. Valuation 
The Stamp Act provides directions for valuation in certain cases, for example, where the consideration is stated in a currency other than Indian Rupees, where instruments are connected with stock or other marketable securities, where instruments are executed to secure an annuity, and where the value of the subject matter is indeterminate. In such cases, stamp duty is payable based on that valuation.886

7. Other Matters 
Who bears the cost of the stamp duty is a matter of agreement between the parties to the transaction concerned, though the Act provides for methods of breaking a deadlock in specified cases.
Some of the important articles governing stamp duty on certain documents are indicated in Schedule I to the Stamp Act. Depending on the instrument, the duty may be payable based on the true market value of the property, the area of the property or some other criterion.
Any person may apply to the Collector of Stamps for adjudication of the stamp duty payable on an instrument.
All instruments chargeable with duty and executed by any person in Maharashtra are stamped before or at the time of execution or immediately thereafter, or on the next working day following the day of execution.
An instrument that is inadequately or not stamped is inadmissible as evidence for any purpose. Such an instrument may be admissible only on payment of the requisite amount of duty along with interest at 2% per month and any applicable penalty.

E. Securities Transaction Tax 
Securities transaction tax, as administered by the authorities under the Income Tax Act of 1961 (ITA), is levied at the specified rates on the value of securities transacted on a recognized stock exchange in India, as follows:

	Taxable Transaction	Tax Rate	Person Liable	
1.	Purchase of an equity share in a company, a unit of an equity-oriented fund or a unit of a business trust, where the transaction is entered into on a recognized stock exchange and the contract for the purchase of the share or unit is settled by the actual delivery or transfer of the share or unit	0.10%	Purchaser	
2.	Sale of an equity share in a company, a unit of an equity-oriented fund or a unit of a business trust, where the transaction is entered into on a recognized stock exchange and the contract for the sale of the share or unit is settled by the actual delivery or transfer of the share or unit	0.10%	Seller	
3.	Sale of an equity share in a company, a unit of an equity-oriented fund or a unit of a business trust, where the transaction is entered into on a recognized stock exchange and the contract for the sale of the share or unit is settled otherwise than by the actual delivery or transfer of the share or unit	0.025%	Seller	
4.	Sale of an option in securities	0.1%	Seller	
5.	Sale of an option in securities, where the option is exercised	0.125%	Purchaser	
6.	Sale of a future in securities	0.02%	Seller	
7.	Sale of a unit of an equity-oriented fund to a mutual fund	0.001%	Seller	
8.	Sale of an unlisted equity share under a specified offer for sale	0.20%	Seller	

The securities transaction tax is collected by the stock exchange and remitted to the exchequer.
Securities transaction tax is not payable on: 
(i) Preference shares;
 (ii) Government securities; or
 (iii) Bonds, debentures, units of mutual fund other than equity-oriented mutual funds.

Gains on transfers of such instruments will be subject to tax as short-term or long-term capital gains under the ITA.

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