Hello Champions,

Let me share with a story today,a story that will help you muster courage to fight your fears and
PREFACE

and make you a stronger and better individual

In my decade long career of teaching where I had the privilege of teaching more than 50,000
students across India but the story of this one aspirant still gives me goosebumps.

Rushikesh was a DIRECT ENTRY student.

For a 7am lecture,he used to wake up in the midnight 3.30am because it took him 3hours to reach
from Boisar (where he stayed) to the coaching centre (Borivali) where I used to teach, he then
went to his articleship firm to Churchgate which was again almost 1.5hours

So going back home from his firm he had to travel for atleast 4hours where he used to reach home
at around 11pm.

and this was his schedule every single day for the next 9 months every single day.

But he never complained, never gave excuses, always came on time and most importantly there
was always a BIGGGG SMILE on his face.

When I asked him -HOW do you do this?

He said-My dad is a driver in a company sir and when his boss got to know that I wanted to become
a CA , he not just helped me sponsor my education but also helped me get into a good CA firm
that pays me a decent stipend

So everyday when I get up in the morning , I feel super grateful to GOD that I am actually doing
what I always wanted to do

And I have a burning desire that the day I will become a Chartered accountant and I will buy a car
where MY DAD and his BOSS will sit behind and I shall Drive the car.

I hope and pray that just like Rushikesh even you guys are equally “DRIVEN” towards your goal
and are after reading this have switched to the 5th gear where you
ACT INSPITE OF FEAR
WILLING TO DO WHATEVER IT TAKES
ARE DOING EVERYTHING AT 100%
ARE WILLING TO DO WHAT’S HARD
YOU ARE BIGGER THAN YOUR OBSTACLE
SUCCED IN SPITE OF ANYTHING
YOU WILL NEVER GIVE UP

Because YOU are a WARRIOR and YOU will fight until the
LAST FULL STOP
OF THE LAST ANSWER
OF YOUR LAST PAPER

Heralding you to a bright and brilliant future.

In the spirit of GREAT LEARNING, here is some GREAT READING.

Buss itna kehna tha, this is your TaxKaTeacher-CA KARAN SHETH signing off

Need your honest feedback

 INDEX
Chapter

1 INTRODUCTION 1.1 - 1.5

Chapter

2 CHARGING SECTION 2.1 - 2.3

Chapter

3 REVERSE CHARGE MECHANISM 3.1 - 3.7

Chapter

4 COMPOSITION SCHEME 4.1 - 4.4

Chapter

5 SUPPLY 5.1 - 5.20

Chapter

6 VALUE OF SUPPLY 6.1 -6.6

Chapter

7 TIME OF SUPPLY 7.1 - 7.2

Chapter

8 TAX INVOICE, DEBIT NOTE AND CREDIT NOTE 8.1 - 8.13

Chapter

9 PLACE OF SUPPLY 9.1 - 9.12

Chapter

10 INPUT TAX CREDIT 10.1 - 10.15

Chapter

11 REGISTRATION 11.1 - 11.16

Chapter

12 PAYMENT OF TAX 12.1 -12.5

Chapter

13 TDS & TCS 13.1 - 13.3

Chapter

14 EXEMPTIONS 14.1 - 14.21

Chapter

15 E WAY BILL 15.1 - 15.11

Chapter

16 RETURNS 16.1 - 16.8

Chapter

17 ACCOUNTS AND RECORDS 17.1 - 17.3

 Chapter TAXKATEACHER - CA KARAN SHETH
1 INTRODUCTION 8879-727-727

1. What is tax?
Ans. Tax is a fee charged by government on Income, Goods, Services, Activity
Income VAT CST Service
Tax Tax Manufacturing Import / Export
Excise duty Custom duty

DT vis-à-vis IDT

Levy Borne Levy Borne

KS Academy KS Academy KS Academy Students
Cannot shift Can shift
burden burden
Progressive Regressive

Article 246, Constitution of India

List - I (Union List) List - II (State list) List - III (Concurrent list)

CG SG CG + SG

Income-Tax VAT No head in relation to

Excise duty Lottery tax tax is covered under
Customs duty Luxury tax this list
Service Tax Entertainment tax
Central Sales Tax

2000 PM set up a committee to design Goods & Service tax Model

2004 Kelkar Task Force strongly recommended to implement
Budget 2006-07 FM Chidambaram announced that GST will be implement w.e.f 1/4/10
2014 NDA (24) tabled the Constitution [122nd Amendment ] Bill,2014
On the floor of Parliament
2016 By 2016 the above Bill was passed in
1. Loksabha
2. Rajyasabha
3. Had Received Ratification from more than 50% of the States
4. ∴Prez gave assent to the bill which was finally enacted into
Article 246A
Constitution (101st Amendment) Act 2016 Article 269A
Article 279A
2017 Prez gave assent to all the GST related Bills that were finally enacted
into
CGST Act, 2017
UTGST Act ,2017
IGST Act , 2017
GST (Compensation to states) Act ,2017
By 30th June All States had passed their respective SGST Acts in their respective state
assembly.

1.1 INTRODUCTION
 TAXKATEACHER - CA KARAN SHETH
8879-727-727

Need for constitutional amendment

The Constitutional provisions hitherto had delineated separate powers for the Centre and the
States to impose various taxes. Whereas the Centre levied excise duty on all goods produced
or manufactured in India, the States levied Value Added Tax once the goods entered the
stream of trade upon completion of manufacture.
In the case of inter-State sales, the Centre had the power to levy a tax (the Central Sales Tax),
but the tax was collected and retained entirely by the States (from where the movement of
goods start). Services were exclusively taxed by the Centre together with applicable cesses, if
any. Besides, there were State specific levies like entry tax, Octroi, luxury tax, entertainment
tax, lottery and betting tax, local taxes levied by Panchayats etc.
With respect to goods imported from outside the country into India, Centre levied basic
customs duty and additional duties of customs together with applicable cesses, if any.
Introduction of the GST required amendment in the Constitution so as to enable integration
of the central excise duty, additional duties of customs, State VAT and certain State specific
taxes and service tax into a comprehensive Goods and Services Tax and to empower both
Centre and the States to levy and collect it.
Consequently, Constitution (101st Amendment Act), 2016 (hereinafter referred to as CAA) was
passed. It has 20 sections. Newly inserted Article 279A empowering President to constitute
GST Council was notified
CAA also provides for compensation to States for loss of revenue on account of introduction
of goods and services tax. Parliament shall, by law, on the recommendation of the Goods and
Services Tax Council, provide for compensation to the States for loss of revenue arising on
account of implementation of the goods and services tax for a period of five years.

Important Aspects of GST

 Historic Indirect Tax Reform  Goods & Service Taxw.e.f. 1st July 2017
 GST function on dual GST model
 GST is Destination Based Tax
 France was 1st country to implement GST in 1954.
 India has adopted GST model from canada.

GST Rates

0% 0.25% 3% 5% 12% 18% 28%

Milk Diamonds Gold, Restaurants Headphones General Luxury
Salt Silver Medicines charger Rate Cars
Curd Eg. Laptops, Tobacco
Soap

INTRODUCTION 1.2
 TAXKATEACHER - CA KARAN SHETH
8879-727-727

Applicable to
within CGST+SGST 28 States + Delhi, JK, Puducherry
same state
Intra-state
Supply within same Chandigarh
CGST + UTGST Diu & Daman
Union Territory Lakshadweep
&
(U/T) Ladakh
Dadra nagar haveli
Andaman &
Nicobar
One U/T

1,18,000

Supply of goods
S R
(GST 18%)

Mumbai (Mah) Pune (Mah)

Selling Price = 1,00,00
Supplier shall deposit (+) CGST @9% = 9000
• CGST = 9000  CG (+) Mah SGST @9% = 9000
• M. SGST = 9000  MSG 1,18,000

1,28,000
Supply of service
S R
(GST@28%)

Chandigarh Chandigarh
Service charges = 1,00,000
CGST = 14000 = CG + CGST @14% = 14,000
UTGST =14000= CG + UTGST @14% = 14,000
1,28,000

Two Different states IGST shall be levied & collected by CG

Inter-state &
Two different U/T IGST
Supply CG shall remit 50% to that SG (where
One state & One U/T goods/service are destined/consumed)

1,12,000
Supply of goods
S R
(GST@12%)

Maharashtra Gujarat
Chandigarh Daman
Lakshadweep M.P
SP = 1,00,000
(+) IGST @12% = 12,000
= 1,12,000
IGST = 12000 = (Central Government)
Central government shall remit 6000 to that state where the goods/services are Destined

1.3 INTRODUCTION
 TAXKATEACHER - CA KARAN SHETH
8879-727-727

Article 246A
Notwithstanding anything contained in Article 246
This article grants power to center & States to make laws with respect to tax on supply of
Goods & Services.

Article 269A
(1) Goods and services tax on supplies in the course of inter-State trade or commerce shall
be levied and collected by the Government of India and such tax shall be apportioned
between the Union and the States in the manner as may be provided by Parliament by
law on the recommendations of the Goods and Services Tax Council.

(3) Import of Goods/Service is deemed to be an Inter-state Supply

(2) Parliament may, by law, formulate the principles for determining the place of supply,
and when a supply of goods, or of services, or both takes place in the course of inter-
State trade or commerce.

Article 279A
 GST Council Comprises of
1) Union Finance Minister - Chairperson
2) Minister of State Finance - Member
3) All State Finance Ministers
 Matters on which GST Council shall make recommendations
(a) the taxes, cesses and surcharges levied by the Union, the States and the local
bodies which may be subsumed in the goods and services tax;
(b) the goods and services that may be subjected to, or exempted from the goods and
services tax;
(c) the threshold limit of turnover below which goods and services may be exempted
from goods and services tax;
(d) model Goods and Services Tax Laws, principles of levy, apportionment of Goods
and Services Tax levied on supplies in the course of inter-State trade or commerce
under article 269A and the principles that govern the place of supply;
(e) the rates including floor rates with bands of goods and services tax;

Quorum = 50% x Total no. of members of GST Council

Decision shall be taken only if these is a majority of not less than

3/4th of weighted votes of members present & voting

CG - 1/3rd x Total votes cast SG - 2/3rd x Total votes cast

INTRODUCTION 1.4
 TAXKATEACHER - CA KARAN SHETH
8879-727-727

Taxes subsumed in GST Taxes not subsumed in GST

CENTRAL TAXES STATE TAXES Basic custom duty
Excise Duty VAT ED/VAT/CST on alcoholic liquor for
human consumption
Service Tax Lottery Tax ED/VAT/CST on 5 petroleum products
CST Entertainment tax (except Stamp duty
levied by local body)
CVD Luxury Tax Property taxes
Special CVD Entry Tax Tax on motor vehicles
Tax on advertisement Electricity duty

• Tobacco: is sbject to GST and Central Excise duty

• Opium, Indian hemp and other narcotic drugs and narcotics: GST and state excise duty

• Further, real estate sector has been kept out of ambit of GST, i.e. GST will not be levied
on sale/purchase of immovable property.

1.5 INTRODUCTION
 Chapter TAXKATEACHER - CA KARAN SHETH
2 CHARGING SECTION 8879-727-727

Applicability
• India
• Includes territory of India
• Territorial waters, seabed and sub-soil underlying such waters, continental shelf,
exclusive economic zone or any other maritime zone as referred to in the Territorial
Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976.
• Airspace above its Territory of India and Territorial waters of India.

Section 9 : Charging Section

Section 9 (1)
• CGST is levied on Intra-state supply of goods or service
• Except alcohol for human consumption
• Where a rate not exceeding 20% shall be levied individually
• On the value determined u/s 15 and
such tax shall be paid by a taxable person

A person who is registered or liable to register u/s 22/24.

Section 9 (2)
The central tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly
known as petrol), natural gas and aviation turbine fuel shall be levied with effect from
such date as may be notified by the Government on the recommendations of the Council.

Section 9 (3) (reverse charge mechanism)

Goods and services that are notified by government on which tax shall be payable as per
reserve charge mechanism i.e. recipient shall pay tax to Government [REFER CHAPTER R.C.M.]
FCM RCM
1,18,000 2 1,00,000 2
1,00,000 1
Supplier Recipient Supplier Recipient
1 (GST@18%)
3
1,00,000 SP=1,00,000 Pay tax 18000 to
+GST = 18,000 Govt as per RCM
3 @18%
1,18,000 (Recipient
Supplier shall pay tax shall pay tax
to Govt as per FCM as per RCM

CHARGING SECTION 2.1

 TAXKATEACHER - CA KARAN SHETH
8879-727-727

Section 9 (4)
The Government may, on the recommendations of the Council, by notification, specify a
lass of registered persons who shall, in respect of supply of specified categories of goods or
services or both received from an unregistered supplier, pay the tax on reverse charge basis
as the recipient of such supply of goods or services or both.
Remarks
Registered Registered
1) R/s shall pay tax as per FCM.
Supplier Recipient
Registered Unregistered
2) R/s shall pay tax as per FCM.
Supplier Recipient
Unregistered Registered Since supplier is unregistered, he
3)
Supplier Recipient cannot charge GST to the recipient
Unregistered Unregistered Since supplier is unregistered, he
4)
Supplier Recipient cannot charge GST to the recipient

Section 9 (5) Electronic commerce operator

A. Transportation of passengers by Radio Taxis, Motorcycle, Omnibus & Any other Motor vehicle (ie.
Rickshaw Metered Taxis)

Tax to be paid by ECO u/s 9(5)

B. 1. Hotel accommodation service
2. House keeping service
(i) If supplier is registered  Supplier pays tax u/s 9(1)
(ii) If supplier is not registered  ECO will pay tax u/s 9(5)

C. Restaurant Service

If Restaurant (RP or URP) Supply service through ECO ECO u/s 9(5)
If Restaurant is situated in a Hotel having declared tariff of more
Restaurant
than `7500/day & supplies such service through ECO
u/s 9(1)
ECO has physical presence ECO itself
ECO does not have physical presence Representative of ECO
ECO doesn’t have physical presence nor has Person appointed by ECO
reprentative

2.2 CHARGING SECTION

 TAXKATEACHER - CA KARAN SHETH
8879-727-727

ECO u/s 9 (5) and tax shall be payable as follows:

Situation Person Liable to pay tax

Ecommerce operator has a physical presence in India Ecommerce operator itself
Ecommerce Operator does not have physical presence Representative of Ecommerce
in India operator
Ecommerce Operator does not have physical presence Person appointed by ecommerce
nor has representative operator

Situation Person Liable to pay tax

Hotel Lisa an unregistered person listed on GOIBIBO,an ECO ECO 0/s 9(5)
whose physical presence is in India
Jonny Plummers, an unregistered person, listed on Representative of ECO u/s 9/5
URBANCLAP,an ECO does not have physical presence in India.
Mr Armaan, listed his car with UBER, an ECO who doesn’t Person appointed by ECO u/s
has a physical presence & neither has a representative. 9 (5)
Hotel Radisson an registered person u/s 22(1) listed in OYO Hotel Radisson u/s 9(1)
Rooms an ECO whose physical presence is in India
Mr.Raju, a plumber registered u/s 22(1) listed on URBANCLAP, Mr. Raju u/s 9(1)
an ECO whose physical presence is in India
Shiv Sagar Restaurant, a registered person in GST Zomato u/s 915)
is supplying service through Zomato, an ECO
Status Restaurant, an unregistered person Swiggy u/s 9/5)
supplying service through Swiggy, an ECO
Masala Kraft, a restaurant in Hotel Decent where the declared Zomato u/s 9(5)
tariff is 25000/day supplies service through Zomato, ECO
Shamiana, a restaurant in Taj Hotel where the declared Shamiana u/s 9(1)
tariff is 10,000/day supplies service through Zomato, ECO

CHARGING SECTION 2.3