ICAI Notes: Charge of GST | Taxation for CA Intermediate PDF Download

 Page 1


 
 
 
 
 
LEARNING OUTCOMES 
a    
 
 
CHAPTER 
3 
 
 
  
 
CHARGE OF GST 
 
The section numbers referred to in the Chapter pertain to the CGST Act, 2017, unless 
otherwise specified. Examples/illustrations/Questions and Answers given in the 
Chapter are based on the position of GST law existing as on 30.04.2023. 
 
 
 
After studying this Chapter, you will be able to – 
? explain the extent and commencement of CGST Act, IGST Act, 
SGST Act & UTGST Act. 
? describe the provisions pertaining to levy and collection of 
CGST & IGST.  
? identify and analyse the services on which tax is payable 
under reverse charge mechanism. 
? comprehend and analyse the composition levy - eligibility for 
the same and conditions to be fulfilled.  
 
 
 
 
Page 2


 
 
 
 
 
LEARNING OUTCOMES 
a    
 
 
CHAPTER 
3 
 
 
  
 
CHARGE OF GST 
 
The section numbers referred to in the Chapter pertain to the CGST Act, 2017, unless 
otherwise specified. Examples/illustrations/Questions and Answers given in the 
Chapter are based on the position of GST law existing as on 30.04.2023. 
 
 
 
After studying this Chapter, you will be able to – 
? explain the extent and commencement of CGST Act, IGST Act, 
SGST Act & UTGST Act. 
? describe the provisions pertaining to levy and collection of 
CGST & IGST.  
? identify and analyse the services on which tax is payable 
under reverse charge mechanism. 
? comprehend and analyse the composition levy - eligibility for 
the same and conditions to be fulfilled.  
 
 
 
 
GOODS AND SERVICE TAX 
a
a
 
 
 
 
3.2 
 
 
1. INTRODUCTION 
Power to levy tax is drawn from the Constitution of India.  To pave way for the 
introduction of Goods and Services Tax (“GST”), 101
st
 Constitutional Amendment 
Act, 2016 was passed.  By virtue of this Act, enabling provision was made to levy 
GST on supply of goods or services or both in India.  Central excise duty, State VAT 
and certain State specific taxes and service tax were subsumed into a 
comprehensive GST [Discussed in detail in Chapter-1: GST in India – An Introduction 
in this Module of the Study Material].  
The very basis for the charge of tax in any taxing statute is the taxable event i.e the 
occurrence of the event which triggers levy of tax.  As discussed earlier, the taxable 
event under GST is SUPPLY [Discussed in detail in Chapter – 2: Supply under GST in 
this Module of the Study Material].  CGST and SGST/UTGST are levied on all intra-
State supplies of goods and/or services while IGST is levied on all inter-State 
supplies of goods and/ or services.   
The provisions relating to levy and collection of CGST and IGST are contained in 
section 9 of the CGST Act, 2017 and section 5 of the IGST Act, 2017, respectively.  
Let us now have a fundamental idea of intra-State supply and inter-State supply.  
As a general rule, where the location of the supplier and the place of supply of 
goods or services are in the same State/Union 
territory, it is treated as intra-State supply of 
goods or services respectively. 
Levy and collection of 
GST in India
Extent and commencement of CGST 
Act/ UTGST Act/ SGST Act/IGST Act
Levy and collection of CGST/IGST
Composition levy
CHAPTER OVERVIEW 
Page 3


 
 
 
 
 
LEARNING OUTCOMES 
a    
 
 
CHAPTER 
3 
 
 
  
 
CHARGE OF GST 
 
The section numbers referred to in the Chapter pertain to the CGST Act, 2017, unless 
otherwise specified. Examples/illustrations/Questions and Answers given in the 
Chapter are based on the position of GST law existing as on 30.04.2023. 
 
 
 
After studying this Chapter, you will be able to – 
? explain the extent and commencement of CGST Act, IGST Act, 
SGST Act & UTGST Act. 
? describe the provisions pertaining to levy and collection of 
CGST & IGST.  
? identify and analyse the services on which tax is payable 
under reverse charge mechanism. 
? comprehend and analyse the composition levy - eligibility for 
the same and conditions to be fulfilled.  
 
 
 
 
GOODS AND SERVICE TAX 
a
a
 
 
 
 
3.2 
 
 
1. INTRODUCTION 
Power to levy tax is drawn from the Constitution of India.  To pave way for the 
introduction of Goods and Services Tax (“GST”), 101
st
 Constitutional Amendment 
Act, 2016 was passed.  By virtue of this Act, enabling provision was made to levy 
GST on supply of goods or services or both in India.  Central excise duty, State VAT 
and certain State specific taxes and service tax were subsumed into a 
comprehensive GST [Discussed in detail in Chapter-1: GST in India – An Introduction 
in this Module of the Study Material].  
The very basis for the charge of tax in any taxing statute is the taxable event i.e the 
occurrence of the event which triggers levy of tax.  As discussed earlier, the taxable 
event under GST is SUPPLY [Discussed in detail in Chapter – 2: Supply under GST in 
this Module of the Study Material].  CGST and SGST/UTGST are levied on all intra-
State supplies of goods and/or services while IGST is levied on all inter-State 
supplies of goods and/ or services.   
The provisions relating to levy and collection of CGST and IGST are contained in 
section 9 of the CGST Act, 2017 and section 5 of the IGST Act, 2017, respectively.  
Let us now have a fundamental idea of intra-State supply and inter-State supply.  
As a general rule, where the location of the supplier and the place of supply of 
goods or services are in the same State/Union 
territory, it is treated as intra-State supply of 
goods or services respectively. 
Levy and collection of 
GST in India
Extent and commencement of CGST 
Act/ UTGST Act/ SGST Act/IGST Act
Levy and collection of CGST/IGST
Composition levy
CHAPTER OVERVIEW 
 
 
CHARGE OF GST 
a a
 
 
3.3 
Similarly, where the location of the supplier and the place of supply of goods or 
services are in (i) two different States or (ii) two 
different Union Territories or (iii) a State and a 
Union territory, it is treated as inter-State supply of goods or services 
respectively. 
The concepts of ‘place of supply’ and meaning of the ‘location of the supplier’ 
have been elaborated in the next chapter, Chapter 4 – Place of Supply, in this Module 
of the Study Material.  Consequently, the meaning of terms ‘inter-State supply’ and 
‘intra-State supply’ has been explained in detail in that chapter.  
It is important to note that at intermediate level, provisions pertaining to 
import and export of goods and/or services have not been covered.  These 
provisions will be discussed in detail at the Final level. 
2. RELEVANT DEFINITIONS 
? Central tax:  means the central goods and services tax levied under section 
9 of the CGST Act [Section 2(21)]. 
? Integrated tax: means the integrated goods and services tax levied under  
? State tax: means the tax levied under any State Goods and Services Tax Act 
[Section 2(104)]. 
? Goods: means every kind of movable property other than money and 
securities but includes actionable claim, growing crops, grass and things 
attached to or forming part of the land which are agreed to be severed before 
supply or under a contract of supply. [Section 2(52)]. 
? Electronic Commerce: means the supply of goods or services or both 
including digital products over digital or electronic networks. [Section 2(44)] 
? Electronic Commerce Operator: means any person who owns, operates or 
manages a digital or electronic facility or platform for electronic commerce. 
[Section 2(45)] 
? Exempt supply: means supply of any goods or services or both which attracts 
nil rate of tax or which may be wholly exempt from tax under section 11, or 
under section 6 of the Integrated Goods and Services Tax Act, and includes 
non-taxable supply [Section 2(47)].Non-taxable supply: means a supply of 
goods or services or both which is not leviable to tax under this Act or under 
the Integrated Goods and Services Tax Act [Section 2(79)]. 
Page 4


 
 
 
 
 
LEARNING OUTCOMES 
a    
 
 
CHAPTER 
3 
 
 
  
 
CHARGE OF GST 
 
The section numbers referred to in the Chapter pertain to the CGST Act, 2017, unless 
otherwise specified. Examples/illustrations/Questions and Answers given in the 
Chapter are based on the position of GST law existing as on 30.04.2023. 
 
 
 
After studying this Chapter, you will be able to – 
? explain the extent and commencement of CGST Act, IGST Act, 
SGST Act & UTGST Act. 
? describe the provisions pertaining to levy and collection of 
CGST & IGST.  
? identify and analyse the services on which tax is payable 
under reverse charge mechanism. 
? comprehend and analyse the composition levy - eligibility for 
the same and conditions to be fulfilled.  
 
 
 
 
GOODS AND SERVICE TAX 
a
a
 
 
 
 
3.2 
 
 
1. INTRODUCTION 
Power to levy tax is drawn from the Constitution of India.  To pave way for the 
introduction of Goods and Services Tax (“GST”), 101
st
 Constitutional Amendment 
Act, 2016 was passed.  By virtue of this Act, enabling provision was made to levy 
GST on supply of goods or services or both in India.  Central excise duty, State VAT 
and certain State specific taxes and service tax were subsumed into a 
comprehensive GST [Discussed in detail in Chapter-1: GST in India – An Introduction 
in this Module of the Study Material].  
The very basis for the charge of tax in any taxing statute is the taxable event i.e the 
occurrence of the event which triggers levy of tax.  As discussed earlier, the taxable 
event under GST is SUPPLY [Discussed in detail in Chapter – 2: Supply under GST in 
this Module of the Study Material].  CGST and SGST/UTGST are levied on all intra-
State supplies of goods and/or services while IGST is levied on all inter-State 
supplies of goods and/ or services.   
The provisions relating to levy and collection of CGST and IGST are contained in 
section 9 of the CGST Act, 2017 and section 5 of the IGST Act, 2017, respectively.  
Let us now have a fundamental idea of intra-State supply and inter-State supply.  
As a general rule, where the location of the supplier and the place of supply of 
goods or services are in the same State/Union 
territory, it is treated as intra-State supply of 
goods or services respectively. 
Levy and collection of 
GST in India
Extent and commencement of CGST 
Act/ UTGST Act/ SGST Act/IGST Act
Levy and collection of CGST/IGST
Composition levy
CHAPTER OVERVIEW 
 
 
CHARGE OF GST 
a a
 
 
3.3 
Similarly, where the location of the supplier and the place of supply of goods or 
services are in (i) two different States or (ii) two 
different Union Territories or (iii) a State and a 
Union territory, it is treated as inter-State supply of goods or services 
respectively. 
The concepts of ‘place of supply’ and meaning of the ‘location of the supplier’ 
have been elaborated in the next chapter, Chapter 4 – Place of Supply, in this Module 
of the Study Material.  Consequently, the meaning of terms ‘inter-State supply’ and 
‘intra-State supply’ has been explained in detail in that chapter.  
It is important to note that at intermediate level, provisions pertaining to 
import and export of goods and/or services have not been covered.  These 
provisions will be discussed in detail at the Final level. 
2. RELEVANT DEFINITIONS 
? Central tax:  means the central goods and services tax levied under section 
9 of the CGST Act [Section 2(21)]. 
? Integrated tax: means the integrated goods and services tax levied under  
? State tax: means the tax levied under any State Goods and Services Tax Act 
[Section 2(104)]. 
? Goods: means every kind of movable property other than money and 
securities but includes actionable claim, growing crops, grass and things 
attached to or forming part of the land which are agreed to be severed before 
supply or under a contract of supply. [Section 2(52)]. 
? Electronic Commerce: means the supply of goods or services or both 
including digital products over digital or electronic networks. [Section 2(44)] 
? Electronic Commerce Operator: means any person who owns, operates or 
manages a digital or electronic facility or platform for electronic commerce. 
[Section 2(45)] 
? Exempt supply: means supply of any goods or services or both which attracts 
nil rate of tax or which may be wholly exempt from tax under section 11, or 
under section 6 of the Integrated Goods and Services Tax Act, and includes 
non-taxable supply [Section 2(47)].Non-taxable supply: means a supply of 
goods or services or both which is not leviable to tax under this Act or under 
the Integrated Goods and Services Tax Act [Section 2(79)]. 
GOODS AND SERVICE TAX 
a
a
 
 
 
 
3.4 
? Aggregate turnover: means the aggregate value of all taxable supplies 
(excluding the value of inward supplies on which tax is payable by a person 
on reverse charge basis), exempt supplies, exports of goods or services or 
both and inter-State supplies of persons having the same Permanent Account 
be computed on all India basis but excludes central tax, State tax, Union 
territory tax, integrated tax and cess [Section 2(6)]. 
? Prescribed: means prescribed by rules made under this Act on the 
recommendations of the council. [Section 2(87)] 
? Business:  includes – 
 
 [Section 2(17)]. 
? Consideration: in relation to the supply of goods or services or both 
includes: 
? any payment made or to be made, whether in money or otherwise, 
in respect of, in response to, or for the inducement of, the supply of 
(a) any trade, commerce, manufacture, profession, vocation, adventure, wager  or any 
other similar activity, whether or not it is for a pecuniary benefit;
(b) any activity or transaction in connection with or incidental or ancillary to (a) above;
(c) any activity or transaction in the nature of (a) above, whether or not there is volume,
frequency, continuity or regularity of such transaction;
(d) supply or acquisition of goods including capital assets and services in connection
with commencement or closure of business;
(e) provision by a club, association, society, or any such body for a subscription or any 
other consideration) of the facilities or benefits to its members, as the  case may be;
(f) admission, for a consideration, of persons to any premises; and
(g) services supplied by a person as the holder of an office which has been accepted by 
him in the course or furtherance of his trade, profession or vocation;
(h) activities of a race club including by way of totalisator or a license to book maker or 
activities of a licensed book maker in such club;
(i) any activity or transaction undertaken by the Central Government, a State Government 
or any local authority in which they are engaged as public authorities
Page 5


 
 
 
 
 
LEARNING OUTCOMES 
a    
 
 
CHAPTER 
3 
 
 
  
 
CHARGE OF GST 
 
The section numbers referred to in the Chapter pertain to the CGST Act, 2017, unless 
otherwise specified. Examples/illustrations/Questions and Answers given in the 
Chapter are based on the position of GST law existing as on 30.04.2023. 
 
 
 
After studying this Chapter, you will be able to – 
? explain the extent and commencement of CGST Act, IGST Act, 
SGST Act & UTGST Act. 
? describe the provisions pertaining to levy and collection of 
CGST & IGST.  
? identify and analyse the services on which tax is payable 
under reverse charge mechanism. 
? comprehend and analyse the composition levy - eligibility for 
the same and conditions to be fulfilled.  
 
 
 
 
GOODS AND SERVICE TAX 
a
a
 
 
 
 
3.2 
 
 
1. INTRODUCTION 
Power to levy tax is drawn from the Constitution of India.  To pave way for the 
introduction of Goods and Services Tax (“GST”), 101
st
 Constitutional Amendment 
Act, 2016 was passed.  By virtue of this Act, enabling provision was made to levy 
GST on supply of goods or services or both in India.  Central excise duty, State VAT 
and certain State specific taxes and service tax were subsumed into a 
comprehensive GST [Discussed in detail in Chapter-1: GST in India – An Introduction 
in this Module of the Study Material].  
The very basis for the charge of tax in any taxing statute is the taxable event i.e the 
occurrence of the event which triggers levy of tax.  As discussed earlier, the taxable 
event under GST is SUPPLY [Discussed in detail in Chapter – 2: Supply under GST in 
this Module of the Study Material].  CGST and SGST/UTGST are levied on all intra-
State supplies of goods and/or services while IGST is levied on all inter-State 
supplies of goods and/ or services.   
The provisions relating to levy and collection of CGST and IGST are contained in 
section 9 of the CGST Act, 2017 and section 5 of the IGST Act, 2017, respectively.  
Let us now have a fundamental idea of intra-State supply and inter-State supply.  
As a general rule, where the location of the supplier and the place of supply of 
goods or services are in the same State/Union 
territory, it is treated as intra-State supply of 
goods or services respectively. 
Levy and collection of 
GST in India
Extent and commencement of CGST 
Act/ UTGST Act/ SGST Act/IGST Act
Levy and collection of CGST/IGST
Composition levy
CHAPTER OVERVIEW 
 
 
CHARGE OF GST 
a a
 
 
3.3 
Similarly, where the location of the supplier and the place of supply of goods or 
services are in (i) two different States or (ii) two 
different Union Territories or (iii) a State and a 
Union territory, it is treated as inter-State supply of goods or services 
respectively. 
The concepts of ‘place of supply’ and meaning of the ‘location of the supplier’ 
have been elaborated in the next chapter, Chapter 4 – Place of Supply, in this Module 
of the Study Material.  Consequently, the meaning of terms ‘inter-State supply’ and 
‘intra-State supply’ has been explained in detail in that chapter.  
It is important to note that at intermediate level, provisions pertaining to 
import and export of goods and/or services have not been covered.  These 
provisions will be discussed in detail at the Final level. 
2. RELEVANT DEFINITIONS 
? Central tax:  means the central goods and services tax levied under section 
9 of the CGST Act [Section 2(21)]. 
? Integrated tax: means the integrated goods and services tax levied under  
? State tax: means the tax levied under any State Goods and Services Tax Act 
[Section 2(104)]. 
? Goods: means every kind of movable property other than money and 
securities but includes actionable claim, growing crops, grass and things 
attached to or forming part of the land which are agreed to be severed before 
supply or under a contract of supply. [Section 2(52)]. 
? Electronic Commerce: means the supply of goods or services or both 
including digital products over digital or electronic networks. [Section 2(44)] 
? Electronic Commerce Operator: means any person who owns, operates or 
manages a digital or electronic facility or platform for electronic commerce. 
[Section 2(45)] 
? Exempt supply: means supply of any goods or services or both which attracts 
nil rate of tax or which may be wholly exempt from tax under section 11, or 
under section 6 of the Integrated Goods and Services Tax Act, and includes 
non-taxable supply [Section 2(47)].Non-taxable supply: means a supply of 
goods or services or both which is not leviable to tax under this Act or under 
the Integrated Goods and Services Tax Act [Section 2(79)]. 
GOODS AND SERVICE TAX 
a
a
 
 
 
 
3.4 
? Aggregate turnover: means the aggregate value of all taxable supplies 
(excluding the value of inward supplies on which tax is payable by a person 
on reverse charge basis), exempt supplies, exports of goods or services or 
both and inter-State supplies of persons having the same Permanent Account 
be computed on all India basis but excludes central tax, State tax, Union 
territory tax, integrated tax and cess [Section 2(6)]. 
? Prescribed: means prescribed by rules made under this Act on the 
recommendations of the council. [Section 2(87)] 
? Business:  includes – 
 
 [Section 2(17)]. 
? Consideration: in relation to the supply of goods or services or both 
includes: 
? any payment made or to be made, whether in money or otherwise, 
in respect of, in response to, or for the inducement of, the supply of 
(a) any trade, commerce, manufacture, profession, vocation, adventure, wager  or any 
other similar activity, whether or not it is for a pecuniary benefit;
(b) any activity or transaction in connection with or incidental or ancillary to (a) above;
(c) any activity or transaction in the nature of (a) above, whether or not there is volume,
frequency, continuity or regularity of such transaction;
(d) supply or acquisition of goods including capital assets and services in connection
with commencement or closure of business;
(e) provision by a club, association, society, or any such body for a subscription or any 
other consideration) of the facilities or benefits to its members, as the  case may be;
(f) admission, for a consideration, of persons to any premises; and
(g) services supplied by a person as the holder of an office which has been accepted by 
him in the course or furtherance of his trade, profession or vocation;
(h) activities of a race club including by way of totalisator or a license to book maker or 
activities of a licensed book maker in such club;
(i) any activity or transaction undertaken by the Central Government, a State Government 
or any local authority in which they are engaged as public authorities
 
 
CHARGE OF GST 
a a
 
 
3.5 
goods or services or both, whether by the recipient or by any other 
person but shall not include any subsidy given by the Central 
Government or a State Government, 
? the monetary value of any act or forbearance, in respect of, in 
response to, or for the inducement of, the supply of goods or 
services or both, whether by the recipient or by any other person but 
shall not include any subsidy given by the Central Government or a 
State Government. 
 However, a deposit given in respect of the supply of goods or services or both 
shall not be considered as payment made for such supply unless the supplier 
applies such deposit as consideration for the said supply [Section 2(31)]. 
? Person: includes [Section 2(84)]- 
An individual A HUF A company
A firm
A Limited Liability 
Partnership
An association of persons or
a body of individuals,
whether incorporated or not,
in India or outside India
Any corporation established
by/under any Central, State or
Provincial Act or Government
company as defined in section
2(45) of Companies Act, 2013
Any body corporate
incorporated by or
under the laws of a
country outside India
A co-operative society
registered under any law
relating to cooperative
societies
A local authority
Central 
Government/State 
Government
Society as defined 
under the Societies 
Registration Act, 1860
Trust 
Every artificial juridical 
person, not falling 
above