Table of Contents
Check out Taxmann's GST Manual with GST Law Guide & Digest of Landmark Rulings | Set of 2 Volumes which contains a compilation of amended, updated & annotated text of CGST, IGST, UTGST Act & Rules, Forms (including Action Points), Notifications (including Rate Notifications), Circulars & Clarifications, etc. It also incorporates a 370+ Page GST Law Guide on 25+ topics (Short Commentary) & a Section-wise Digest of Landmark Rulings.
1. Background of GST
The structure of indirect taxes in India (as existing upto 30-6-2017) was based on three lists in Seventh Schedule to Constitution of India, which came into effect on 26-1-1950. These lists are mostly based on Government of India Act, 1935.
The provisions were based on situation prevailing in 1935. That structure had become outdated due to changes in situations, technology etc.
World has moved towards common Goods and Services Tax (GST) long ago. However, so far as India is concerned, GST is the tax for twenty first century [It is rightly said that India is like an elephant. It takes time to start, but once started, it is very difficult to stop it].
Finally, India has moved into GST on 1-7-2017.
1.1 Supreme Court extends various timelines in view of Covid-19
Supreme Court extends various timelines in view of Covid-19 – Supreme Court, suo motu, has extended various timelines in view of Covid-19 as follows – The period from 15-3-2020 to 28-2-2022 shall stand extended for the purposes of limitation as may be prescribed under any general or special laws in respect of all judicial or quasi-judicial proceedings. Balance period of limitation remaining available as on 3-10-2021, if any, shall become available w.e.f. 1-3-2022. If limitation had expired during 15-3-2020 to 28-2-2022, limitation period of 90 days will be available from 1-3-2022. The period under Arbitration Act, Commercial Courts Act, Negotiable Instruments Act and any other law is also extended. Time limit for completion of claim and defence and service of notices, summons and every legal proceeding is also extended – Cognizance for Extension of Limitation In re (2022) 3 SCC 117 = 134 taxmann.com 307 = 379 ELT 276 = 56 GSTL 385 (SC 3 member bench – order dated 10-1-2022).
2. What is Goods and Services Tax?
Goods and Services Tax means a tax on supply of goods or services, or both, except taxes on supply of alcoholic liquor for human consumption [Article 366(12A) of Constitution of India inserted w.e.f. 16-9-2016].
Note that the word used is ‘supply’ and not ‘sale’. Thus, stock transfers, branch transfers will also get covered under GST net.
GST will be payable on free supplies made to related persons. GST will not be payable to free gifts and free samples to unrelated person, but input tax credit in respect of such goods will have to be reversed.
IGST will be payable on inter-state stock transfers and branch transfers.
For stock transfers or branch transfer within the State, SGST and CGST will be payable only where the taxable person has more than one GST registrations within the State. If there is single registration within State, ‘Bill of Supply’ (challan) will be sufficient.
Basic scheme of GST is as follows—
Overall structure of Goods and Services Tax
- Goods and Services Tax (GST) will be on ‘supply’ of goods or services or both, in India w.e.f. 1-7-2017 (including Jammu and Kashmir w.e.f. 8-7-2017). Area upto 200 nautical miles inside sea is ‘India’ for purpose of GST.
- For supplies within the State or Union Territory – (a) Central tax (Central GST i.e. CGST) will be payable to Central Government and (b) State tax (State GST – SGST) or Union Territory Tax (UTGST – Union Territory GST) will be payable to State Government or Union Territory (as applicable). Area upto 12 nautical miles inside sea is part of State or Union Territory which is nearest.
- For inter-state supplies (supply from one State or Union Territory to another State or Union Territory), Integrated tax (Integrated GST-IGST) will be payable to Central Government. IGST is payable if supply is beyond 12 nautical miles but upto 200 nautical miles.
- In addition, GST Compensation Cess will be payable on pan masala, tobacco products, coal, aerated waters, motor cars etc.
- Basic customs duty, Education Cess of customs and Secondary and Higher Education Cess of Customs, IGST and GST Compensation Cess (on goods where Compensation Cess is applicable) will be payable on import of goods.
- Distinction between goods and services will be mostly eliminated. This will eliminate problem of dual taxation presently faced by construction industry, works contract, food related services like restaurant and outdoor catering, leasing and hire services and software services.
- GST is based on Vat concept of allowing input tax credit of tax paid on inputs, input services and capital goods, for payment of output tax. This will avoid cascading effect of taxes.
- GST is consumption based tax i.e. tax is payable in the State where goods or services or both are finally consumed.
- The rates of IGST – Nil, 0.1%, 0.25%, 3%, 5%, 12%, 18% and 28%. In case of supply within State, CGST will be 50% of IGST Rates and SGST/UTGST for supply within the State or Union Territory will be 50% of IGST rates.
- General rate of tax is – IGST =-18% or CGST – 9% plus SGST/UTGST – 9%.
- Though tax is payable to both Central Government and State Government/Union Territory Administration, control will be exercised either by State Government/Union Territory Authorities or Central Government Authorities. This will avoid dual control.
- Central Excise duty will continue on petroleum products i.e. petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel. These products are out of GST at present and may be brought under GST later.
- Tobacco products will be subject to excise duty plus GST.
- Alcoholic liquor will be subject to State duty. This product is out of GST.
- GST Council (Goods and Services Tax Council) is Apex Constitutional body which will determine policies of GST.
Note – The terms used in CGST, SGST, UTGST and IGST Acts are ‘Central Tax’, ‘State Tax’, ‘Union Territory Tax’ and ‘Integrated Tax’. However, in this book, for sake of brevity, the terms used are CGST, SGST, UTGST and IGST respectively.
GST is destination based consumption tax – GST is destination based consumption tax i.e. tax would accrue to the State in which goods or services are finally consumed, which is also termed as ‘place of supply’ – FAQ on GST Chapter 1 Q No. 2 issued by CBI&C on 15-12-2018.
GST will be based on Vat system of allowing input tax credit for payment of tax on output supply.
The States from which goods are supplied will not get any tax as goods are consumed in another State.
In case of inter-State supplies, IGST will be payable. Input Tax Credit of IGST paid in one State will be available to receiver of goods or services in another State.
2.1 Dual GST for supply of goods and services within State
There will be dual GST – State GST (SGST) and Central GST (CGST) on supply of goods and services within the State [Article 246A of Constitution of India inserted w.e.f. 16-9-2016].
Territorial waters (i.e. 12 nautical miles inside the sea) will be part of State so far as GST is concerned.
SGST will also apply in Union Territories having legislature. These are – Delhi and Puducherry.
Both CGST and SGST will be on supply of goods and services within the State.
2.2 IGST for inter-state transactions
In case of Inter-State supply of goods and services, there will be Integrated GST (IGST) imposed by Government of India [Article 269A(1) of Constitution of India inserted w.e.f. 16-9-2016].
Equivalent IGST (CVD) will also be imposed on imports [Explanation to Article 269A(1) of Constitution of India].
The IGST Rate will be double the CGST rate.
IGST and CGST rates will be uniform all over India and will not vary from State to State. Presently, SGST rates are also uniform all over India and are equal to CGST rate.
Revenue from IGST will be apportioned among Union and States by Parliament on basis of recommendation of Goods and Service Tax Council [Article 269A(2) and Article 270(1A) of Constitution of India inserted w.e.f. 16-9-2016].
This apportionment will be required as input tax credit of IGST can be used for SGST and vice versa.
Since IGST will be on ‘supply of goods or services’, IGST will be payable on inter-state stock transfers, branch transfers etc.
However, CGST, SGST, UTGST or IGST will not be payable if goods are sent for job work outside the premises of taxable person.
2.3 Input Tax Credit
Allowability of input tax credit for payment of output tax is one of the key features of GST. This will avoid cascading effect of taxes.
IGST will ensure seamless movement of goods across the country as taxes will move along with goods.
2.4 Central Excise duty on petroleum and tobacco products
Central Excise duty will continue on petroleum products and tobacco products [Entry 84 of List I (Union List) of Seventh Schedule to Constitution of India as amended w.e.f. 16-9-2016].
Tobacco products will be subject to excise duty plus GST.
2.5 Sales tax on petroleum products and alcoholic liquor within State
States will have powers to impose sales tax on sale within the State on petroleum products and alcoholic liquor for human consumption [Entry 54 of List II (State List) of Seventh Schedule to Constitution of India as amended w.e.f. 16-9-2016]
Thus, petroleum products will be presently out of GST.
Petroleum products will be brought in GST network at a later stage on recommendation of GST Council – section 5(2) of IGST Act.
Meaning of ‘petroleum products’ – Petroleum Products means petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel [Entry 84 of List I of Seventh Schedule to Constitution of India, section 5(2) of IGST Act and section 9(2) of CGST and SGST Act].
C form can be issued after 28-3-2021 for petroleum products only for resale or in manufacture – As per amendment made in CST Act vide Finance Act, 2021, C form can be issued for procurement of petroleum products only for resale or in manufacture w.e.f. 28-3-2021.
Section 8(3) of Central Sales Tax Act enumerates goods which can be procured at concessional rate of CST (2%) on submission of C form in inter-state transactions.
Section 8(3)(b) of CST Act has been substituted with following, vide section 150 of Finance Act, 2021, w.e.f. 28th March, 2021.
‘Are goods of the class or classes specified in the certificate of registration of the registered dealer purchasing the goods as being intended for re-sale by him or subject to any rules made by the Central Government in this behalf, for use by him in the manufacture or processing for sale of goods specified under section 2(d) of CST Act’.
Section 2(d) of CST Act states that ‘goods’ includes all materials, commodities and all other kinds of movable property, but does not include newspapers, actionable claims, stocks, shares and securities.
Thus, after 28th March, 2021, petroleum products cannot be purchased inter-state against C form at concessional rate of 2% in the telecommunication network or in mining or in the generation or distribution of electricity or any other form of power.
Such inter-state purchase of petroleum products at concessional rate will be permissible only for (a) re-sale (b) use by him (buyer) in the manufacture or processing for sale of goods.
3. Rates of GST
The IGST and CGST Acts do not indicate GST rate structure.
As per section 9 of CGST Act, rate of CGST will be as notified by Central/State Government. The rate shall not exceed 20%. Same provision will be in SGST Act of each State.
Thus, total GST rate for intra-State supplies will not exceed 40% [20% CGST and 20% SGST].
As per section 5 of IGST Act, rate of IGST will be as notified by Central Government. The rate shall not exceed 40%.
CGST and IGST rates will be common all over India. SGST rates are also expected to be common all over India. However, since State Governments have sovereign powers to levy GST, the SGST rates may vary from State to State, though presently they are same.
UTGST Rates will be same as CGST Rates as these rates are within jurisdiction of Central Government.
The GST rates on goods are notified based on Customs Tariff Act, which is based on HSN Code. However, though Customs Tariff has eight digit code, only first four digits are used to notify GST rates. Thus, in many cases, for same four digit item, GST rates may vary depending on description of goods.
In case of services, service classification code is a 6 digit code. First two digits are always ‘99’.
Relevant Notifications – The relevant notifications for GST rates as follows –
Notification Nos. 1/2017-CT (Rate) and 1/2017 IT (Rate) both dated 28-6-2017 in respect of goods bearing GST rate of 0.25%, 3%, 5%, 12%, 18% and 28%
Notification Nos. 2/2017-CT (Rate) and 2/2017 IT (Rate) both dated 28-6-2017 in respect of exempted goods
Notification Nos. 11/2017-CT (Rate) and 8/2017 IT (Rate) both dated 28-6-2017 in respect of services bearing GST rate of 5%, 12%, 18% and 28%. This notification also contains provisions relating to service classification.
Notification Nos. 12/2017-CT (Rate) and 9/2017 IT (Rate) both dated 28-6-2017 in respect of services which are exempt from GST.
These notifications are amended from time to time.
Broadly, the IGST rates are as follows w.e.f. 1-1-2023 [for supply within State/Union Territory, 50% of IGST rate is CGST rate and 50% of IGST rate is SGST/UTGST rate].
Nil – Fresh Meat, Fish Chicken, Eggs, Fresh Milk, Butter Milk, Live animals, live poultry, Curd, Natural Honey, unpacked wheat, unpacked rice, Fresh Fruits and Vegetables, frozen or provisionally preserved vegetables, coffee beans, wheat, rye, rice, Flour, Besan, Bread, jaggery, pappad, Prasad, Salt, Bindi, Sindoor, Stamps, Judicial Papers, Printed Books, Newspapers, Music (printed or manuscript), Bangles, Handloom, Pooja equipment, jute, khadi, national flag, raw silk, electrical energy, human blood, human hair, hearing aids, passenger baggage, Duty credit scrip, sanitary towels or napkins, rakhi (other than made of gold, silver, platinum, diamonds, pearls), precious stones, rupee notes and coins sold to RBI, gift items to President, PM, Governor, CM or any public servant which are auctioned later, Aquatic feed including shrimp feed and prawn feed, poultry feed and cattle feed, including grass, hay and straw, supplement and additives, wheat bran and de-oiled cake [other than rice bran], Husk of pulses including Chilka, Concentrates including chuni or churi, Khanda [In case of many pre-packaged and labelled food items, GST rate will be 5% w.e.f. 18-7-2022]. Words in italics inserted w.e.f. 1-1-2023.
Duty credit scrips are goods falling under heading 4907 (document of title). GST is not payable on DFIA as DFIA is duty credit scrip. It is exempt – Spaceage Syntex P. Ltd. In re (2019) 104 taxmann.com 418 (AAAR-Maharashtra) [reversing decision in Spaceage Syntex P. Ltd. In re (2018) 99 taxmann.com 234 (AAR-Maharashtra), where it was held that GST is payable on DFIA].
0.1% – Supply of goods by DTA unit (Domestic Tariff Area i.e. in India) to Merchant Exporter who is going to export the goods supplied by DTA unit (w.e.f. 23-10-2017)
0.25% Schedule VI – Precious stones (other than diamonds), Semi-precious stones, Rough diamonds or simply sawn diamonds, industrial or non-industrial, rough precious or semi-precious stones falling under 7102, 7103 and 7104 [amended on 18-7-2022].
1.50% Schedule VII – Goods other than those specified in Sr. Nos. 1 and 3 of Schedule VI – Cut and Polished diamonds – inserted on 18-7-2022]
3% Schedule V – Gold, silver and jewellery, platinum, imitation jewellery, pearl, diamonds, cut and polished diamonds, synthetic stone [amended on 18-7-2022]
5% [Schedule I] – Pre-Packaged and labelled food items (wheat, barley, oats, maize, rice, rye, aata, maida, jawar, corn, honey, fish, meat etc.), Fish Fillet, Cream, Skimmed Milk Powder, Eggs, Branded Paneer, Frozen Vegetables, Coffee, Tea, Spices, Pizza Bread, Rusk, Cashew nuts, Edible Oils, Sabudana, Kerosene oil PDS, coal, Ethyl alcohol supplied for blending with petrol, Marble and travertine, specified Medicines, Stent, Life boats, handmade safety matches, newsprint, silk yarn, silk woven fabric, cotton fabrics, embroidery, articles of apparel i.e. readymade garments, hats, caps upto Rs. 1,000, Natural cork, sugar, cotton yarn, natural fibre, fly ash bricks, Ethyl alcohol supplied to Oil Marketing Companies or Petroleum refineries for blending with motor spirit (petrol), Bran, sharps and other residues, whether or not in the form of pellets, derived from the sifting, milling or other working of cereals or of leguminous plants [other than aquatic feed including shrimp feed and prawn feed, poultry feed and cattle feed, including grass, hay and straw, supplement and additives, husk of pulses including chilka, concentrates including chuni or churi, khanda, wheat bran, de-oiled cake [In case of many pre-packaged and labelled food items, GST rate will be 5% w.e.f. 18-7-2022, as explained later] [Words in italics inserted w.e.f. 1-1-2023].
GST rate in case of food and drinks supplied in running trains and on platforms is uniform @ 5% without Input Tax Credit – Order No. 2 [F No. 354/03/2018-TRU] dated 31-3-2018.
GST rate in case of goods for petroleum operations and coal bed methane operations is 5% – Notification Nos. 3/2017-CT (Rate) and 3/2017 IT (Rate) both dated 28-6-2017 in respect of exempted goods.
E-waste, Khakhra, plain chapatti or roti, Unbranded Namkeens, bhujia, mixture, chabena and similar edible preparations in ready for consumption form, other than those put up in unit container – inserted w.e.f. 13-10-2017.
12% Schedule II – Live horses, Condensed milk, Butter, Cheese, Ghee, Dry Fruits in packaged form, Animal Fat, Sausage, Fruit Juices, branded namkeens, bhujia in unit containers, Ayurvedic Medicines, Tooth Powder, Bio-diesel, Tableware and kitchenware of wood, Colouring Books, Picture Books, Corrugated paper, cartons, exercise books, calendars, yarn, carpets, textile fabrics, Umbrella, Sewing Machine, table kitchen articles, knives, LED lamps, Cell-phones, readymade garments above Rs. 1,000, footwear of sale value not exceeding Rs. 1,000 per pair, sprinklers, drip irrigation system including laterals, agricultural machinery, renewable energy devises (value to be taken as 70% if provided with works contract service), permanent transfer of IPR (except software removed from 12% list w.e.f. 1-10-2021), footwear of sale value not exceeding Rs. 1,000 per pair, solar water heater, Fruit pulp or fruit juice based drinks [other than Carbonated Beverages of Fruit Drink or Carbonated Beverages with Fruit Juice], Mathematical boxes, geometry boxes and colour boxes [Words in italics inserted w.e.f. 1-1-2023].
Lateral of sprinklers and sprinklers irrigation system (consisting of nozzles, lateral and other components will also be taxable @ 12% – CBIC Circular No. 81/55/2018-GST dated 31-12-2018.
18% Schedule III – Flavoured Refined Sugar, Pasta, sugar confectionery, Cornflakes, Pastries and Cakes, Preserved Vegetables, Jams, Sauces, Soups, Ice Cream, Instant Food Mixes, Mineral Water, Ethyl alcohol, Slag, Perfumes, fireworks, Steel Products, Printed Circuits, Camera, Speakers and Monitors, Biscuits, carton and boxes, plan and drawings, calendars, Ores, Paints and varnishes, Footwear Rs. 1,000 and above per pair, tendu leaves, artificial fibre, Computers, hand tools, Machinery for industrial use, machine tools. Refrigerators and freezers, household and laundry type washing machines, washing machines, shavers, vacuum cleaners, water heaters, TV sets upto screen size 32 inch, Special purpose motor vehicles, work trucks, trailers, scent sprays, digital camera, video camera recorders, video games, ores, railway locomotives and parts, Ball bearings and roller bearings, CCTV, Printed circuits, spectacles, clocks, watches, permanent transfer of IPR, printing and writing ink, power driven pumps, knives, LED Lamps, drawing and marking instruments, Ethyl alcohol and other spirits, denatured, of any strength [other than ethyl alcohol supplied to Oil Marketing Companies or Petroleum refineries for blending with motor spirit (petrol)], All other goods not elsewhere specified [Items in italics inserted w.e.f. 1-1-2023].
GST on treated water from sewage is taxable @ 18% – Rashtriya Chemicals and Fertilisers In re (2021) 55 GSTL 209 (AAR-Maharashtra).
28% Schedule IV – Molasses, Pan Masala, aerated waters, tobacco products, cement, tyres, IC Engines, Air conditioning machines, dish washers, motor vehicles, motor cycles, TV set of screen size of 32 inches and above, computer monitors 20 inch and above, motor cycles, aircrafts for personal use, revolvers, video games, actionable claim in form of betting, gambling, horse racing in race club, Caffeinated Beverages, Carbonated beverages of fruit drink or carbonated beverages with fruit juice [words in italics inserted w.e.f. 1-10-2021].
Lottery tickets – GST rate will be 12% in case of State run lotteries and 28% in case of lotteries authorised by State Government (run by private persons). Tax on lottery will be collected at first stage under reverse charge. Later, there will be no GST on subsequent sale of lottery tickets. The valuation will be 100/112 or 100/128 of face value.
GST Compensation Cess – In addition, there will be GST cess of 1% on small cars, 3% on mid-sized cars and 22% on luxury cars. Motor cycles above 350 cc will attract 3% GST compensation cess. GST Compensation cess is also payable on aerated waters, cigarettes and pan masala.
Lower rate in case of handicraft goods – In case of handicraft goods, there is partial exemption from GST and tax payable will be 5%/12% of IGST (or 2.5% CGST plus 2.5% SGST/UTGST) as specified in Notification Nos. 21/2018-CT (Rate), 22/2018-IT (Rate) and 21/2018-UT (Rate) all dated 26-7-2018.
Decorative, designer or fancy Rakhi is not ‘handicraft’ or ‘puja samagri’. It has to be classified on basis of constituent material in accordance with rule 3(c) of Rules of interpretation of Customs Tariff Act- M D Mohta In re (2018) 68 GST 766 = 95 taxmann.com 69 (AAR-WB).
Tax rate on sale of old and used motor vehicles – The tax rate on motor vehicles falling under chapter 87 was 28% plus GST Compensation Cess. This was too high for sale of old and used vehicles. Hence, w.e.f. 25-1-2018, the rates have been reduced as follows Ref – Notification No. 8/2018-CT (Rate) dated 25-1-2018 and No. 1/2018- Compensation Cess (Rate) dated 28-6-2017 as amended on 25-1-2018.
The following concessional rates are not available if input tax credit under GST or Cenvat Credit under Cenvat Credit Rules or ITC under State Vat was availed.
The tax rate will be 18% IGST or 18% [9% CGST plus 9% SGST/UTGST] (no GST Compensation Cess) for (a) petrol, LPG or CNG driven motor vehicles with engine capacity of 1200 cc or more and length of 4000 mm or more (b) diesel driven motor vehicles with engine capacity of 1500 cc or more and length of 4000 mm or more (c) Sports Utility Vehicles and Utility Vehicles with engine capacity of 1500 cc or more (no GST Compensation Cess)
The tax rate will be 12% IGST or 12% [6% CGST plus 6% SGST/UTGST] for old and used vehicles other than above (no GST Compensation Cess).
GST is payable on supply of old motor vehicles as scrap – CMS Info Systems Ltd. In re (2018) 68 GST 79 = 93 taxmann.com 95 (AAR – Maharashtra).
Margin in case of other taxable persons selling old motor vehicles which were their business assets – The aforesaid tax rates are applicable to dealers of old vehicles paying tax under margin scheme. These rates are also applicable to all taxable persons selling old cars which were their business asset. In their case, the margin will be the consideration received for supply of old and used motor vehicle and the depreciated value as per depreciation claimed under section 32 of Income-tax Act. If it is negative, it will be ignored.
However, the concessional rates are not available if input tax credit under GST or Cenvat Credit under Cenvat Credit Rules or ITC under State Vat was availed.
Exemptions to goods supplied for petroleum operations – Goods supplied for petroleum operations have been exempted vide Notification No. 3/2017-CT (Rate) dated 28-6-2017 and No. 3/2017-IT (Rate) dated 28-6-2017
50% tax as Refund of ITC in case of goods supplied to canteen Stores Department of Defence – In case of goods supplied to canteen Stores Department (CSD) under Ministry of Defence, the supplies are exempt from GST – Notification Nos. 7/2017-CT (Rate) and 7/2017-IT (Rate) both dated 28-6-2017. Out of Input Tax paid on inward supplies, 50% will be refunded to CSD – Notification Nos. 6/2017-CT (Rate) and 6/2017-IT (Rate) both dated 28-6-2017.
Procedure for processing of applications filed by Canteen Stores Department has been specified in CBI&C circular No. 60/34/2018-GST dated 4-9-2018.
Motor vehicles purchased prior to 1-7-2017 and sold or given on financial lease after 1-7-2017 – If motor vehicles purchased prior to 1-7-2017 and Cenvat credit was not availed, the tax rate is 65% of normal rate. Similarly, if such vehicle was given on financial lease, tax rate will be 65% of normal rate – Notification No. 37/2017-CT (Rate) and No. 38/2017-IT (Rate) both dated 13-10-2017. – – GST Compensation Cess will also be 65% – Notification No. 7/2017-Compensation Cess (Rate) dated 13-10-2017.
Supply of gold, silver or platinum by nominated agencies for exports – Intra-state, intra-union territory and inter-state supply of gold, silver and platinum by Nominated Agency for exports against supply by nominated agency is exempt w.e.f. 1-1-2019 – Notification Nos. 26/2018-CT (Rate), 27/2018-IT (Rate) and 26/2018-UT (Rate) all dated 31-12-2018 [The words ‘silver’ and ‘platinum’ inserted w.e.f. 1-10-2019].
Sale of Used vehicles, seized and confiscated goods, old and used goods, waste and scrap supplied by Government – In case of used vehicles, seized and confiscated goods, old and used goods, waste and scrap supplied by Central Government, State Government, Union territory or a local authority, the registered person receiving the supply is liable to pay tax under reverse charge – Notification Nos. 4/2017-CT (Rate) and 4/2017-IT (Rate) both dated 28-6-2017 amended w.e.f. 13-10-2017.
In case of sale to unregistered person, respective department of Central Government, State Government, Union territory or a local authority should obtain GST registration and pay GST – para 1 of CBI&C circular No. 76/50/2018-GST dated 31-12-2018.
Imported Stores for use in Indian Naval ships are exempt – Imported Stores for use in Indian Naval ships are exempt from GST – CBI&C Circular No. 113/32/2019-GST dated 11-10-2019.
Reverse charge in case of sale of used vehicles, seized and confiscated goods, old and used goods, waste and scrap supplied by Government– In case of used vehicles, seized and confiscated goods, old and used goods, waste and scrap supplied by Central Government, State Government, Union territory or a local authority, the registered person receiving the supply is liable to pay tax under reverse charge – Notification Nos. 4/2017-CT (Rate) and 4/2017-IT (Rate) both dated 28-6-2017 amended w.e.f. 13-10-2017.
In case of sale to unregistered person, respective department of Central Government, State Government, Union territory or a local authority should obtain GST registration and pay GST – para 1 of CBI&C Circular No. 76/50/2018-GST dated 31-12-2018.
3.1 GST Rate on services w.e.f. 1-1-2023
The CGST and IGST rates are notified in Notification No. 11/2017-CT (Rate) and 8/2017-IT (Rate) both dated 28-6-2017 effective from 1-7-2017. SGST Rates are notified by respective State Governments.
Exemptions in respect of services are specified in Notification No. 12/2017-CT (Rate) and 9/2017-IT (Rate) both dated 28-6-2017 effective from 1-7-2017.
Notification No. 11/2017-CT (Rate) dated 28-6-2017 also specifies six digit service codes for services.
Parallel notifications are issued under STST and UTGST Acts also in respect of SGST/UTGST rates and exemptions.
SGST/UTGST and CGST rates are presently 50% of IGST rates.
General rate of IGST on services is 18%. The IGST rate of 18% will apply to banking and insurance services, courier and postal services, gas and water distribution services, legal and accounting services, telecommunication services, R&D services, software.
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