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Type of GST

Dual GST for supply of goods and services within State

Types of GST in India- CGST, SGST, IGST and UTGST

• SGST – State Goods & Services Tax
• UTGST – Union Territory Goods and Services Tax
• CGST – Central Goods & Services Tax
• IGST – Integrate Goods & Services Tax

SGST / UTGST and CGST

The SGST or UTGST and CGST shall be collected on outward intra-state supply of goods or Services by the supplier and paid to government by every Taxable Person

IGST

The IGST shall be collected on outward inter-state supply of goods or Services by the supplier and paid to government by every Taxable Person

GST : Meaning and Scope of Supply

What is GST?

Goods & Services Tax is a destination base tax on consumption of Goods and Services that will be levied on every value addition of supply of goods or services.

It is to be levied at all stages right from manufacture up to final consumption with credit of taxes paid at previous stages available as setoff. In a nutshell, only value addition will be taxed and burden of tax is to be borne by the final consumer.

GST (Goods & Services Tax), a single unified tax system aims at uniting India’s complex taxation structure to a ‘One Nation- One Tax’ regime. It is the biggest tax reform since India’s independence.

Supply of Goods o Services [Section 7(1)]

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 a consideration by a person in the course or furtherance of business;

• The activities specified in Schedule I, made or agreed to be made without a consideration
• The activities to be treated as supply of goods or supply of services as referred to in Schedule II
• The activities / transactions as neither supply of goods nor of services – Schedule III

Schedule I

There are certain activities that are construed as supply even if there is no consideration involved. Such supplies are referred to as “Deemed Supplies” under GST. Following are the list of all such activities:

• Permanent transfer or disposal of business assets. Provided Input Tax Credit has been availed on such assets.
• Supply of goods or services between related persons or distinct persons as mention under section 25. Provided such a supply is made in the ordinary course of business or for furtherance of business.
• Principal supplying goods to his agent. Provided the agent undertakes to supply such goods on behalf of the principal.
• Agent supplying goods to his Principal. Provided the agent undertakes to receive such goods on behalf of the principal.
• Taxable person importing services from either a related person or any of his establishments outside India.

Schedule II

Activities Treated As Supply of Goods

Following are the activities that form “Supply of Goods” under GST:

1. Any transfer of title in Goods
2. Transfer of title in goods under an agreement stipulating that the property in goods shall pass at a future date upon payment of full consideration as agreed.
3. Goods forming part of the assets of a business transferred or disposed of by or under the direction of the person carrying on the business. Provided such goods are transferred so that they no longer form part of those assets. Moreover, such a transfer takes place whether or not for a consideration.
4. There are cases where a person ceases to be a taxable person. In such a case, goods forming part of the assets of any business carried on by the said person shall be deemed to be supplied by him in the course or furtherance of his business. Provided such goods are supplied immediately before the person ceases to be a taxable person, unless:
   1. The business is transferred as a going concern to another person
   2. Business is carried on by a personal representative who is deemed to be taxable
5. Supply of goods by any unincorporated association to a member for cash, deferred payment or other valuable consideration.

Activities Treated As Supply of Services

Following are the activities that form “Supply of Services” under GST:

1. Transfer of right in goods or of undivided share in goods without the transfer of title
2. Any lease, tenancy, easement, licence to occupy land
3. Lease or letting out of the building including a commercial, industrial or residential complex for business or commerce, either wholly or partly
4. Any treatment or process which is applied to another person’s goods
5. Transfer of business assets:
   1. By or under the direction of a person carrying on a business
   2. Goods held assets or used for the purposes of the business are put to any private use or
   3. Are used, or made available to any person for use, for any purpose other than the purpose of the business, whether or not for a consideration
6. Renting of immovable property
7. Construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly. This is except the cases where:
   1. the entire consideration has been received after issuance of completion certificate, where required by the competent authority or
   2. after its first occupation, whichever is earlier.
8. Temporary transfer or permitting the use of any intellectual property right
9. Development, design, programming, customization, adaptation, up-gradation, enhancement, implementation of information technology software
10. Agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act.
11. Transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment or other valuable consideration.
12. Composite supply of works contract as defined in clause (119) of section 2.
13. Composite supply:
    1. by way of or as part of any service or
    2. in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink. (other than alcoholic liquor for human consumption).
       Provided such supply or service is for cash, deferred payment or other valuable consideration.

Schedule III

There are certain activities that are not to be treated as Supply under GST. Hence, following activities are neither treated as supply of goods not supply of services:

• Services given by an employee to the employer
• Any person performing duties as a Chairperson or a Member or a Director of a government body. Provided the person is not regarded as an employee before the commencement of this clause.
• Functions performed by members of:
  • Parliament
  • State Legislature
  • Panchayats
  • Municipalities
  • Other Local Authorities
• Duties performed by a person holding any designation in order to pursue constitutional provisions.
• Funeral, burial, crematorium or mortuary including transporting the deceased.
• Sale of land
• Actionable claims besides lottery, gambling and betting
• Sale of building subject to clause (b) of paragraph 5 of Schedule II

“Composite Supply”

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, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply;

Illustration — Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply;

“Mixed 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 such supply does not constitute a composite supply.

 Illustration — A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, 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. It shall not be a mixed supply if these items are supplied separately;

G.S.T. "Introduction of Goods and Services Tax"

Taxation System in India

India has a well-developed tax structure with clearly demarcated authority between Central and State Governments and local bodies.

• Central Government levies
• State Governments levies
• Local bodies levies

Direct and Indirect Taxes

The most fundamental classification of taxes is based on who collects the taxes from the taxpayer.

Direct Taxes, as the name suggests, are taxes that are directly paid to the government by the taxpayer. It is a tax applied on individuals and organizations directly by the government e.g. income tax

Indirect Taxes are applied on the manufacture or sale of goods and Services. These are initially paid to the government by an intermediary, who then adds the amount of the tax paid to the value of the goods / services and passes on the total amount to the end user.

Examples of these are Vat, Central Sales Tax, Service Tax, Excise Duty etc

We focused on Indirect Taxes, before GST Indirect Taxes structure is as per following:

• Central Excise duty is tax on Manufacturing of Goods levied by Central Government
• VAT is tax on Sales of Goods within State (Intra State) levied by State Government
• CST is tax on Inter-State Sales of Goods levied by Central Government
• Purchase Tax is tax on goods purchase from unRegistered Dealer levied by State Govt.
• Service Tax is tax on Provision of Services levied by Central Government
• CVD – Countervailing Duty charged on Import of Goods on behalf of Central Excise duty
• ADE – Additional Import duty charged on Import of Goods on behalf of State VAT

Any other many taxes levied by Central and State Government on sales of goods or services like a Entertainment Tax, Luxury Tax, Tax on Lottery, Octroi, Entry Tax etc…

Goods and Services Tax (GST) is indirect taxes in India merging most of the existing taxes into single system of taxation

 The GST would replace the following taxes:

Taxes currently levied and collected by the Centre:

Central Excise duty, Duties of Excise (Medicinal and Toilet Preparations), Additional Duties of Excise (Goods of Special Importance), Additional Duties of Excise (Textiles and Textile Products), Additional Duties of Customs (commonly known as CVD), Special Additional Duty of Customs (SAD), Service Tax, Central Surcharges and Cess so far as they relate to supply of goods and services

State taxes that would be subsumed under the GST are:

State VAT, Central Sales Tax, Luxury Tax, Entry Tax (all forms), Entertainment and Amusement Tax (except when levied by the local bodies), Taxes on advertisements, Purchase Tax, Taxes on lotteries, betting and gambling, State Surcharges and Cess so far as they relate to supply of goods and services

Exclusion of petroleum from GST

5 petroleum products – crude petroleum, high speed diesel, motor spirit, natural gas and aviation fuel and Alcohol for human consumption – will be outside the purview of GST.

G.S.T.

Dear Sir/ Madam,

         G.S.T. Rate as below,
       
         A blogger is someone who provides space for brands to place their advertisement. Before we get into a detailed interpretation of GST applicability on Bloggers / You Tubers, it is essential to understand their working pattern. There are facilitator agencies, who work as advertising channel between the companies and the blogger. Most of the bloggers use advertising portals like AdSense from where they earn revenue when ads place on their blogs receive clicks. AdSense works as a medium and bloggers do not know the advertisers behind the system.

GST Applicability on Bloggers

According to section 7 of CGST Act 2017, every supplier whether goods or services are treated as supply under GST. Bloggers supply services by providing a platform to the advertisers to display their advertisement. A blogger is considered as a supplier of services.

Nature of Supply

Nature of services provided by blogger is considered as online information and database Access or Retrieval services. According to section 2(17) of IGST Act 2017 – Online Information and Database Access or Retrieval services means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronics services such asadvertisement on internet

Place of Supply

Sec 13 of IGST Act 2017 shall apply to determine the place of supply of services where the location of the supplier (Blogger) of services or the location of the recipient (Google AdSense) of service is outside India. As the location of Google Adsense is out side India (Singapore) section 13 of IGST Act 2017 provision will be applicable to ascertain place of supply.

In accordance with the provision of section 13(12) of IGST Act, the place of supply of online information and database access or retrieval services shall be the location of the recipient of services. It means, bloggers covered under sec 13(12) of GST Act and the place of supply of service is the place of Google AdSense / You Tube. (out of India).

Whether it is Export of Service or not:

Section 2(6) of IGST Act 2017 defines Export of Services as the supply of any service when, ––

1. the supplier of service is located in India;

2. the recipient of service is located outside India;

3. the place of supply of service is outside India

4. the payment for such service has been received by the supplier of service in convertible foreign exchange; and

5. the supplier of service and the recipient of service are not merely establishments of a distinct person;