BASICS OF INDIRECT TAX – GST AND HOW TO FILE

GSTR-1 & GSTR-3B AND COMMON ISSUES IN IT

Prepared for Article Training Program for CA Students organized by WIRC of ICAI

Presented by -
Raj Khona (B.COM, C.A., LL.B)

Saturday, 27th August 2022

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Disclaimer
• The views expressed during the presentation are the personal views of the author/speaker and
based on the law as existing on 27.08.2022

• The views expressed during the presentation should not be considered as an advice or opinion.

• They are subject to review or a different view taken by the author with elapse of time.

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Agenda for Discussion
• Basics of GST

• Levy and Collection under GST

• Supply

• Registration under GST

• Time of Supply under GST

• Place of Supply

• Input Tax Credit

• Valuation under GST

• Documents prescribed under GST

• E – Invoicing

• GST returns

• Reverse Charge Mechanism

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What is GST?
Goods and Services Tax (GST) is a comprehensive tax on all Goods and Services -

• Multi-Stage Tax

• Destination based Consumption Tax

• Value Added Tax

• Seamless credit across entire supply chain

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Dual Structure of GST

USA Maharashtra Gujarat

Export
Recipient Supplier

CGST + SGST Intra-state Recipient

supply

BCD + IGST
Import
Supplier Recipient

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Nature of Supply

Situation Nature of Supply

If location of supplier and place of supply are in Inter State Supplies (Leviable to IGST)
different states

If location of supplier and place of supply are in Intra State Supplies (Leviable to CGST / SGST)
same state

Import of goods and/or services Deemed to be Inter-State Supply of goods and services

Export of goods and/or services Deemed to be Inter-State Supply of goods and services.
Export is zero-rated supply

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Levy and Collection under GST (1/2)
▪ Section 9 of CGST Act/SGST Act and Section 5 of IGST Act are the Charging Sections for the purposes of
levy of GST

▪ CGST and SGST shall be levied on all intra-state supplies of goods and/or services and IGST shall be
levied on all inter-state supplies of goods and/or services respectively

▪ except on the supply of alcoholic liquor for human consumption

▪ on the value determined under section 15

▪ at such rates, not exceeding 20% in case of CGST/SGST and 40% in case of IGST, as may be notified by
the Government on the recommendations of the Council

▪ shall be paid by the taxable person

▪ 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

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Levy and Collection under GST (2/2)

Types of Levy

Reverse Specified
Forward Charge Charge categories

Tax leviable in the hands Tax leviable in the hands of Government may notify categories of
of supplier on supply of recipient on receipt of person who shall be liable to pay tax
goods and services goods and services
(E-commerce Operator)

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Concept of Supply
▪ Taxable event under GST is supply

▪ Meaning of Supply - Section 7 of the CGST Act

“7. (1) For the purposes of this Act, the expression “supply” includes –

(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental,
lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance
of business;
(b) import of services for a consideration whether or not in the course or furtherance of business;
(c) the activities specified in Schedule I, made or agreed to be made without a consideration”

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Supply without Consideration

SCHEDULE I - ACTIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION

1. Permanent transfer or disposal of business assets where input tax credit has been availed on such assets.

2. Supply of goods or services or both between related persons or between distinct persons as specified in
section 25, when made in the course or furtherance of business:

Provided that gifts not exceeding fifty thousand rupees in value in a financial year by an employer to an
employee shall not be treated as supply of goods or services or both.

• Inter-state stock transfer of goods – Taxable

• Intra-state stock transfer of goods – Not taxable
• Support services by HO to branch in different states or vice-versa - Taxable

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Registration under GST
▪ Registration would be required in each state from where taxable supply is of goods or services is made

▪ One Registration per State – No separate registration for CGST, SGST/UTGST and IGST

▪ Principal Place of Business in each state + Additional Place of Business

▪ One Registration – Trading, Manufacturing and Provision of Services

▪ Registration can be obtained place of business wise also

▪ Threshold limit for registration –

✓ Supply of goods : Aggregate turnover of Rs.40 lakhs (Rs.20 lakhs for special category states)
✓ Supply of services : Aggregate turnover of Rs.20 lakhs (Rs.10 lakhs for special category states)

▪ Mandatory registration for specified category of persons making specified transactions

▪ Aggregate turnover -
✓ Taxable supplies (excluding the value of inward RCM supplies),
✓ Exempt supplies, Exports of goods or services or both and
✓ Inter-State supplies of persons having the same Permanent Account Number,
✓ to be computed on All India basis but
✓ Excludes central tax, State tax, Union territory tax, integrated tax and cess.
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Time of Supply under GST
Time of Supply

• For Goods - Earliest of the following

- Date of issue of tax invoice or last date to issue tax invoice

• For Services - Earliest of the following:

- Date of issue of invoice or date of payment, if invoice issued within prescribed period
- Date of provision of service or date of payment, if invoice not issued within prescribed period
- Date on which the recipient shows the receipt of services in his books of account, in a case where the
above provisions does not apply

Time Limit for issuance of tax invoice

• For Goods: Tax Invoice to be issued before or at the time of -

(a) removal of goods for supply to the recipient, where the supply involves movement of goods; or
(b) delivery of goods or making available thereof to the recipient, in any other case

• For Services : To be issued within 30 days from the date of supply of service

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Place of Supply of Goods (Domestic)

Place where movement

1 When movement involved
terminates for delivery

2 Bill to Ship to Model Person on whom bill raised

Location of goods at the time of

3 When movement not involved
delivery

Supply by way of Place of such

4 assembly/installation assembly/installation

Supplied on board a Place where goods are taken on

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conveyance board

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Import and Export Transactions
Section 2. Definitions

• (10) "import of goods" with its grammatical variations and cognate expressions, means bringing goods
into India from a place outside India;

• (5) "export of goods" with its grammatical variations and cognate expressions, means taking goods out
of India to a place outside India;

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Place of Supply of Goods (Import and Export)

When imported into Location of the

1
India Importer

When exported from

2 Location outside India
India

IGST will be payable on imports under Customs Tariff Act, 1975

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Place of Supply of Services - Distinction based on Location of Supplier & Recipient

When location of
1 supplier and location Section 12 of IGST Act
of recipient is in India

When location of
2 supplier or location of Section 13 of IGST Act
recipient is outside
India

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POS – Supplier and Recipient in India (Sec 12 of the IGST Act)
Situation Place of Supply (B2B) Place of Supply (B2C)

General Rule / Default Rule Location of recipient Address on record exists - Other cases –
Location of recipient Location of
supplier

Immovable property related services including Location of immovable property

accommodation in a boat or vessel (If property outside India, location of the recipient)
Performance Based Services Location where services are actually performed
(Specified services covered such as supply of restaurant and
catering services, personal grooming, fitness, beauty
treatment and health care services)

Training and performance appraisal Location of recipient Location where services are actually
performed
Admission to an event or amusement park and ancillary Place where event is actually held or where the park is located
services thereto
Organization of event and services in relation to such event Location of recipient Location where event is actually held (If event
and ancillary services or assigning of sponsorship held outside India, location of the recipient)

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POS – Supplier and Recipient in India (Sec 12 of the IGST Act)
Situation Place of Supply (B2B) Place of Supply (B2C)

Transportation of goods including mail or Location of recipient Location where goods handed over for their
courier transportation
Destination of goods in case transportation of goods is to a place outside India

Passenger transportation service Location of recipient Point of embarkation on the conveyance for a
continuous journey
(Return Journey=Separate Journey)
Services provided on board a conveyance First scheduled point of departure of that conveyance

Services by way of fixed telecommunication line, Location of installation for receipt of services
leased circuits, internet leased circuit, cable or dish
antenna
Service of mobile connection – Post-paid Billing address of the recipient on record of supplier
Service of mobile connection – Pre-paid Location of selling agent, re-seller or a distributor of SIM card on records of supplier
• Through selling agent, re-seller or distributor of
SIM cards etc.
• By any person to the final subscriber Location where such pre-payment is received or such vouchers are sold

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POS – Supplier and Recipient in India (Sec 12 of the IGST Act)
Situation Place of Supply (B2B) Place of Supply (B2C)

Banking and other financial services including stock Location of the recipient on Address not available - Location of supplier
broking services the records of supplier

Insurance Services Location of recipient Location of recipient on records of the supplier

Advertisement services to CG or SG or statutory body Location in each of such states proportionately

or local authority meant for identifiable states

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Import and Export Transactions
Section 2. Definitions

• (11) "import of services" means the supply of any service, where-

(i) the supplier of service is located outside India;
(ii) the recipient of service is located in India; and
(iii) the place of supply of service is in India;

• (6) "export of services" means the supply of any service when,-

(i) the supplier of service is located in India;

(ii) the recipient of service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of service in convertible foreign
exchange or in Indian rupees wherever permitted by the Reserve Bank of India; and
(v) the supplier of service and the recipient of service are not merely establishments of a distinct
person in accordance with Explanation 1 in section 8;

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POS – Supplier or Recipient outside India (Sec 13 of the IGST Act)

Location of the recipient

of services

General Rule
Where the location of recipient of services in
not available in the ordinary course of
Place of Supply business, then POS shall be the location of
of Services supplier of service.

Performance Location where services are

based services actually performed

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POS – Supplier or Recipient outside India (Sec 13 of the IGST Act)

Services relating to Location of Immovable

immovable property property

Admission to Event & Place where Event

organisation of event Held

Place of Supply
of Services Banking/ NBFC/Financial
Institution/Intermediary service/ Hiring Location of the
means of Transport upto 1 month (Incl. Supplier
Yachts & Cars but excl. Vessels & Aircraft)

Transportation of goods, other than by way Destination of

of mail or courier Goods

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POS – Supplier or Recipient outside India (Sec 13 of the IGST Act)

Place where the passenger embarks on the

Transportation of Passengers
conveyance for a continuous journey

Place of
Supply of First scheduled point of departure of that
Services on Board or Conveyance
Services conveyance for the journey

Online information & database access or

Retrieval Services Location of the Recipient

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Input Tax Credit - Conditions

7 1

No Credit beyond
Possession of tax
specified period
invoice

6 2
Monthly return filed Receipt of Goods/
Limiting
Services*
factors

Buyer pays value + tax

Appearing in GSTR 2B
in 180 days
5 Supplier has paid 3
tax

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ITC Mismatch Scenarios – FORM GSTR-2B v. GSTR-3B

Supplier has not

filed GST returns
and does not
respond

Supplier has saved Supplier has

the GSTR-1 and not uploaded invoice as
submitted B2C instead of B2B

Supplier uploaded Supplier has filed

the invoice on the return, but
different GSTIN invoice is not
number appearing

Supplier has filed

the return, but value
is incorrect
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Utilization of Input Tax Credit
Input Tax Credit Output Liability (IGST) Output Liability (CGST) Output Liability (SGST)

IGST 1st 2nd to CGST & SGST in any proportion

CGST 2nd 1st Not permitted

SGST 2nd Not permitted 1st

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Apportionment of ITC
SECTION 17. Apportionment of credit and blocked credits
(1) Where the goods or services or both are used by the registered person partly for the purpose of any business and partly
for other purposes, the amount of credit shall be restricted to so much of the input tax as is attributable to the purposes of
his business.

(2) Where the goods or services or both are used by the registered person partly for effecting taxable supplies including
zero-rated supplies under this Act or under IGST Act and partly for effecting exempt supplies under the said Acts, the
amount of credit shall be restricted to so much of the input tax as is attributable to the said taxable supplies including zero-
rated supplies.

(3) The value of exempt supply under sub-section (2) shall be such as may be prescribed, and shall include supplies on which
the recipient is liable to pay tax on reverse charge basis, transactions in securities, sale of land and, subject to clause (b) of
paragraph 5 of Schedule II, sale of building.

Explanation. — For the purposes of this sub-section, the expression “value of exempt supply” shall not include the value of
activities or transactions specified in Schedule III, except those specified in paragraph 5 of the said Schedule.

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Rule 42: Manner of determination of input tax credit in respect of inputs or
input services and reversal thereof
In case where, there are both exempt and taxable supplies (including zero rated), or business and non-business
transactions, in the case, ITC shall be determined in following way:-

Particulars CGST SGST IGST

Total ITC on Inputs & Input Services T xx xx xx

Less: Exclusively for Non-Business T1 (xx) (xx) (xx)
Less: Exclusively for Exempt Outward Supply T2 (xx) (xx) (xx)
Less: Blocked Credit u/s 17(5) T3 (xx) (xx) (xx)
Credited to Electronic Credit Ledger C1 xx xx xx

Used exclusively
Common Credit
for Taxable/ Zero
(C1 - T4 =C2)
Rated (T4)

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…Rule 42: Manner of determination of input tax credit in respect of inputs or
input services and reversal thereof

Common Credit
(C1 - T4 = C2)

D1
D2
(Used for Exempt supply)
(Non-Business)
D1 = C2 x Exempt Turnover
D1 = C2 x 5%
Total Turnover

Net ITC = T4 + (C2 - D1 - D2)

OR
= C1 - D1 - D2

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Rule 43: Manner of determination of input tax credit in respect of capital goods
and reversal thereof

Capital Goods

(a) (b) (c)

Used Exclusively Used Exclusively Not covered
for Non-Business for Taxable or under Clause (a)
or Exempted Zero-Rated or (b)
Supply Supply

No ITC ITC Reversal

ITC Allowed as per Rule 43
Allowed

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Rule 43: Manner of determination of input tax credit in respect of capital goods
and reversal thereof (Amended w.e.f. 1st April 2020)

Particulars Outward Input Tax

liability Credit
1) Credited to Electronic Credit ledger of new capital goods xx
2) Total ITC of CG covered under (a) converted to (c) xx
3) 5% per quarter or part thereof in case of (2) xx
Amount credited to electronic credit ledger xx
4) Total ITC of CG covered under (b) converted to (c)
xx
Note: Reversal based on remaining useful life.
Total Credit to be Reversed (Tc) xx

Tr = Sum of Tc of capital goods for which 60 months not completed

Te = Tr x Exempt Turnover /Total Turnover

= Reversal Amount + Interest @ 18% p.a. from date of credit to reversal (Except for 1st month)

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Apportionment of ITC
SECTION 17. Apportionment of credit and blocked credits
(4) A banking company or a financial institution including a non-banking financial company, engaged in supplying
services by way of accepting deposits, extending loans or advances shall have the option to either comply with the
provisions of sub-section (2), or avail of, every month, an amount equal to fifty per cent. of the eligible input tax credit
on inputs, capital goods and input services in that month and the rest shall lapse.

Provided that the option once exercised shall not be withdrawn during the remaining part of the financial year.

Provided further that the restriction of fifty per cent. shall not apply to the tax paid on supplies made by one registered
person to another registered person having the same Permanent Account Number.

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Apportionment of ITC

Option for Banks / Financial Institution / NBFC

Option I Option II
Reversal as per Apply Rule 38
Rule 42 & 43 Rule 42 & 43 – NA

Claim 50% of ITC in respect of Input,

Input Services and Capital Goods
Balance 50% Lapse

No ITC for inward supply for Non-Business allowed

No ITC for Blocked credit allowed
100% ITC for inward supply from registered person having the same Permanent Account Number
Option once exercised shall not be withdrawn during the remaining part of the financial year

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Blocked Credits
17. (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax
credit shall not be available in respect of the following, namely :—
(a) motor vehicles for transportation of persons having approved seating capacity of not more than thirteen persons
(including the driver), except when they are used for making the following taxable supplies, namely :—
(A) further supply of such motor vehicles; or
(B) transportation of passengers; or
(C) imparting training on driving such motor vehicles;
(aa) vessels and aircraft except when they are used —
(i) for making the following taxable supplies, namely :—
(A) further supply of such vessels or aircraft; or
(B) transportation of passengers; or
(C) imparting training on navigating such vessels; or
(D) imparting training on flying such aircraft;
(ii) for transportation of goods;

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Blocked Credits
17. (5) Notwithstanding anything contained in sub-section (1) of section 16 and sub-section (1) of section 18, input tax
credit shall not be available in respect of the following, namely :—
(ab) services of general insurance, servicing, repair and maintenance in so far as they relate to motor vehicles, vessels or
aircraft referred to in clause (a) or clause (aa) :
Provided that the input tax credit in respect of such services shall be available —
(i) where the motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) are used for the purposes specified
therein;
(ii) where received by a taxable person engaged —
(I) in the manufacture of such motor vehicles, vessels or aircraft; or
(II) in the supply of general insurance services in respect of such motor vehicles, vessels or aircraft insured by him;
(b) the following supply of goods or services or both —
(i) food and beverages, outdoor catering, beauty treatment, health services, cosmetic and plastic surgery, leasing,
renting or hiring of motor vehicles, vessels or aircraft referred to in clause (a) or clause (aa) except when used for the
purposes specified therein, life insurance and health insurance :

Provided that the input tax credit in respect of such goods or services or both shall be available where an inward supply of
such goods or services or both is used by a registered person for making an outward taxable supply of the same category
of goods or services or both or as an element of a taxable composite or mixed supply;

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Blocked Credits
(ii) membership of a club, health and fitness centre; and
(iii) travel benefits extended to employees on vacation such as leave or home travel concession :

Provided that the input tax credit in respect of such goods or services or both shall be available, where it is obligatory for
an employer to provide the same to its employees under any law for the time being in force.

(c) works contract services when supplied for construction of an immovable property (other than plant and machinery)
except where it is an input service for further supply of works contract service;
(d) goods or services or both received by a taxable person for construction of an immovable property (other than plant
or machinery) on his own account including when such goods or services or both are used in the course or furtherance of
business.
Explanation. — For the purposes of clauses (c) and (d), the expression “construction” includes re-construction, renovation,
additions or alterations or repairs, to the extent of capitalisation, to the said immovable property;
(e) goods or services or both on which tax has been paid under section 10;
(f) goods or services or both received by a non-resident taxable person except on goods imported by him;
(g) goods or services or both used for personal consumption;
(h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free samples; and
(i) any tax paid in accordance with the provisions of sections 74, 129 and 130.

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Valuation under GST
• Value of taxable supply
- Transaction Value
- Price actually paid or payable
- Supplier and recipient of the supply are not related
- Price is the sole consideration for the supply
• Value of supply shall include -
- Any taxes, duties, fees, charges except GST
- Any amount supplier is liable to pay but incurred by recipient
- Incidental expenses like commission, packing, etc.
- Interest, late fee, penalty for delayed payment
- Subsidies directly linked to the price (except given by CG or SG)

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Valuation under GST
• Value of Supply shall exclude discount given -

- Before / at the time of supply provided such discount is duly recorded in the invoice

- After the supply (Cumulative conditions)

✓ Agreement establishing discount entered into before / at the time of supply
✓ Discount specifically linked to relevant invoices
✓ ITC reversed by the recipient to the extent of discount

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Exchange Rate for determination of value
Rule 34. Rate of exchange of currency, other than Indian rupees, for determination of value.-

(1) The rate of exchange for determination of value of taxable goods shall be the applicable rate of exchange
as notified by the Board under section 14 of the Customs Act, 1962 for the date of time of supply of such
goods in terms of section 12 of the Act.

(2) The rate of exchange for determination of value of taxable services shall be the applicable rate of
exchange determined as per the generally accepted accounting principles for the date of time of supply of
such services in terms of section 13 of the Act.

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Documents prescribed under GST

Supply of Taxable Goods and Services • Tax Invoice

Transportation of Goods for other than supply • Delivery Challan

Supply of Exempted Goods/Services • Bill of Supply

Change in Taxable Value of Supply • Credit Note / Debit Note

Receipt of Advance Payment • Receipt Voucher

Refund of Advance Payment • Refund Voucher

Payment to unregistered supplier covered under
• Payment Voucher
Reverse charge mechanism

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Fields that should be mentioned on Tax Invoice

Place of Supply (State

Consecutive Serial HSN Code and
Date of Issuance of name & code - In Quantity in case of
Number (Unique for description of goods
Invoice case of interstate goods
a Financial Year) and services
supply)

Taxable value of
Place of Delivery (if Indication if tax Signature / Digital
Total value of goods / goods / services
different from Place payable under Signature of the
services (after discount /
of Supply) reverse charge supplier
abatement)

B2C: Name, Address

Recipient Details - Amount of tax
(State & Code) – If Name, Address and Rate of tax (CGST,
B2B: Name, Address charged (CGST, SGST
taxable value < GSTIN of Supplier SGST or IGST)
& GSTIN or IGST)
50,000/-

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To be furnished in Tax Invoice in case of Exports or SEZ supplies
• In the case of the export of goods or services, the invoice shall carry an endorsement
- “SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED
OPERATIONS ON PAYMENT OF INTEGRATED TAX” or

- "SUPPLY MEANT FOR EXPORT/SUPPLY TO SEZ UNIT OR SEZ DEVELOPER FOR AUTHORISED
OPERATIONS UNDER BOND OR LETTER OF UNDERTAKING WITHOUT PAYMENT OF INTEGRATED TAX"

• In lieu of name and address of the recipient, the address of delivery, name of the State and its code,
the following details to be furnished namely,-
(i) name and address of the recipient;
(ii) address of delivery; and
(iii) name of the country of destination

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Time Limit for issuance of Tax Invoice
RULE 47. Time limit for issuing tax invoice
The invoice referred to in rule 46, in the case of the taxable supply of services, shall be issued within a period of
thirty days from the date of the supply of service.

Provided that where the supplier of services is an insurer or a banking company or a financial institution, including
a non-banking financial company, the period within which the invoice or any document in lieu thereof is to be
issued shall be forty-five days from the date of the supply of service.

Provided further that an insurer or a banking company or a financial institution, including a non-banking financial
company, or a telecom operator, or any other class of supplier of services as may be notified by the Government on
the recommendations of the Council, making taxable supplies of services between distinct persons as specified in
section 25, may issue the invoice before or at the time such supplier records the same in his books of account or
before the expiry of the quarter during which the supply was made.

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Manner of Issuing Invoice
RULE 48. Manner of issuing invoice
(1) The invoice shall be prepared in triplicate, in the case of supply of goods, in the following manner, namely, -
(a) the original copy being marked as ORIGINAL FOR RECIPIENT;
(b) the duplicate copy being marked as DUPLICATE FOR TRANSPORTER; and
(c) the triplicate copy being marked as TRIPLICATE FOR SUPPLIER.

(2) The invoice shall be prepared in duplicate, in the case of the supply of services, in the following manner,
namely, -
(a) the original copy being marked as ORIGINAL FOR RECIPIENT; and
(b) the duplicate copy being marked as DUPLICATE FOR SUPPLIER.

(3) The serial number of invoices issued during a tax period shall be furnished electronically through the
common portal in FORM GSTR-1.

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Mandatory Requirement for quoting HSN on Invoices
• Mandatory to mention HSN/SAC in all tax invoices and report in Table 12 (HSN Summary) of Form GSTR-1 as
mentioned below-

Particulars B2B Supplies B2C Supplies Export Supplies

Aggregate turnover in preceding
Mandatory - 6 digits Mandatory - 6 digits Mandatory - 8 digits
financial year above INR 5 crores

Aggregate turnover in preceding

Mandatory - 4 digits Optional Mandatory - 8 digits
financial year up to INR 5 crores

Note: Suppliers of 49 chemicals specified as per Notification No. 90/2020 – Central Tax dated 01.12.2020 have to
be mandatorily mention 8 digits of HSN code on all outward supplies invoices.

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Credit Note
Section 34 of the CGST Act, 2017 -

1) Where one or more tax invoices have been issued for supply of any goods or services or both and the taxable
value or tax charged in that tax invoice is found to exceed the taxable value or tax payable in respect of such
supply, or where the goods supplied are returned by the recipient, or where goods or services or both supplied
are found to be deficient, the registered person, who has supplied such goods or services or both, may issue to
the recipient one or more credit notes for supplies made in a financial year containing such particulars as may
be prescribed.

2) Any registered person who issues a credit note in relation to a supply of goods or services or both shall declare
the details of such credit note in the return for the month during which such credit note has been issued but not
later than the thirtieth day of November (not yet notified, earlier it was September) following the end of the
financial year in which such supply was made, or the date of furnishing of the relevant annual return, whichever
is earlier, and the tax liability shall be adjusted in such manner as may be prescribed.

Provided that no reduction in output tax liability of the supplier shall be permitted, if the incidence of tax and
interest on such supply has been passed on to any other person.

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Debit Note
Section 34 of the CGST Act, 2017 -

3) Where one or more tax invoices have] been issued for supply of any goods or services or both and the taxable
value or tax charged in that tax invoice is found to be less than the taxable value or tax payable in respect of
such supply, the registered person, who has supplied such goods or services or both, shall issue to the recipient
one or more debit notes for supplies made in a financial year containing such particulars as may be prescribed.

4) Any registered person who issues a debit note in relation to a supply of goods or services or both shall declare
the details of such debit note in the return for the month during which such debit note has been issued and the
tax liability shall be adjusted in such manner as may be prescribed.

Explanation.--For the purposes of this Act, the expression "debit note" shall include a supplementary invoice.

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e-Invoicing - Basics
• e-Invoicing - Validation of invoice vs. Generation of invoice

• Invoice to be created through accounting/billing/ERP System - The invoice generated will be registered/validated
on Invoice Registration Portal (IRP)

• The IRP will generate unique identification number known as Invoice Reference Number (IRN)

• IRN will be hash of GSTIN, Financial Year, Document Type and Document No. (64 digit)
• E.g. <Supplier GSTIN><Fin. Year><Doc Type> <Doc Number> - HASH of “01AAAAB1234C1Z02019-20INVAB1234” is
35054cc24d97033afc24f49ec4444dbab81f542c555f9d30359dc75794e06bbe

• QR code will be generated containing the unique IRN along with some important parameters of invoice like GSTIN
of supplier and buyer, invoice number, date, invoice value, total tax amount and HSN code of major item

• QR code will enable Offline verification using Mobile App

• Auto population of information / invoice details from IRP to both the GST portal and e-way bill portal on real-time
basis

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e-Invoicing Workflow

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Why e-Invoicing?

Real-time tracking of
invoices prepared by
the supplier

Reduction in invoice Seamless generation

mismatches during of E-way Bill
reconciliation

One-time reporting
Curbs tax evasion of the invoice details
and fraud for filing GST
Returns
Standard invoicing
system resulting in
interoperability
between multiple
software
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Applicability of e-Invoicing
Registered person whose aggregate turnover in any preceding financial year from 2017-18 onwards exceeds the prescribed
limit* shall be required to comply with e-invoicing provisions in respect of supply of goods or services or both to a registered
person or for exports.
*Prescribed limit w.e.f. Relevant Notifications
500 crores 01.10.2020 Notification No. 61/2020 - Central Tax, dated 30.07.2020
100 crores 01.01.2021 Notification No. 88/2020 - Central Tax, dated 10.11.2020
50 crores 01.04.2021 Notification No. 05/2021 - Central Tax, dated 08.03.2021
20 crores 01.04.2022 Notification No. 01/2022 – Central Tax, dated 24.02.2022
10 crores 01.10.2022 Notification No. 17/2022 – Central Tax, dated 01.08.2022

Definition of Aggregate Turnover [Sec. 2(6) of CGST Act, 2017]

“Aggregate turnover” means the aggregate value of all -
• Taxable supplies (excluding the value of inward RCM supplies)
• Exempt supplies
• Exports of goods or services or both and
• Inter-State supplies of persons having the same Permanent Account Number
• to be computed on All India basis but
• excludes Central tax, State tax, Union territory tax, Integrated tax and cess
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Exemption from e-Invoicing compliance

Passenger Special
Insurance Financial
transportation Economic Zones
company Institution/NBFC
companies Units

Banking Goods Transport

Multiplexes
company Agency

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Sample e-Invoice Format

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E-Invoicing Coverage - Transactions + Documents

Type of documents
• Tax Invoices
• Debit Note
• Credit Note

Type of transactions
• Business to Business
(B2B) Whether e-invoicing
• Exports applicable for NIL-
rated or wholly-
exempt supplies?

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Whether subsequent amendments of e-Invoices possible?
• No provision for amendment in IRP

• Cancellation allowed - within 24 hours of registration of e-Invoice

• Same invoice number cannot be use for registration of amended Invoice on IRP

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E-Invoicing compliance of Vendors
• Rule 48(5) - Every invoice issued by a person to whom sub-rule (4) applies in any manner other than the manner specified
in the said sub-rule shall not be treated as an invoice.

• Section 16 - Eligibility and conditions for taking the input tax credit
(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input
tax in respect of any supply of goods or services or both to him unless:

(a) he is in possession of a tax invoice or debit note

• Action Point - Check the e-invoicing status of vendors

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Dynamic Quick Response (QR) Code
• Applicable to whom?

• Type of supplier: Registered person whose aggregate turnover in any preceding financial year from 2017-18 onwards
exceeds five hundred crore rupees

• Type of transactions: Supplies to unregistered person (B2C invoice)

• Effective from 01.12.2020 (Notification No. 71/2020 - Central Tax dated 30.09.2020)

• Waiver of general penalty u/s 125 for non-compliance of the requirement of Dynamic QR Code on B2C invoice between
the period from the 01.12.2020 to the 30.06.2021 provided compliance started from the 01.07.2021.

• (Notification No. 89/2020 - Central Tax dated 29.11.2020 substituted vide Notification No. 06/2021 - Central Tax dated
30.03.2021)

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Exemption from compliance of Dynamic QR Code

Insurance
company

OIDAR services Banking company

Financial
Multiplex
Institution/NBFC

Passenger
Goods Transport
transportation
Agency (GTA)
companies

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GST Returns

FORM PARTICULARS DUE DATE APPLICABLE FOR

GSTR1 Outward Supplies 11th of the next month Normal Taxpayer

GSTR3B Monthly return (Summary return) 20th of the next month Normal Taxpayer
30th April of the year following the
GSTR4 Return by composition taxpayers Composition Taxpayer
relevant financial year
20th of the next month or within 7
Return by non-resident taxpayers
GSTR5 days after expiry of registration, Non-Resident Taxpayer
[NRTP]
whichever is earlier
Return by Input Service distributors
GSTR6 13th of the next month Input Service Distributor
[ISD]
Normal Taxpayer having
31st December of next financial aggregate turnover > 2 crore
GSTR9 Annual return
year (except ISD, casual taxpayer,
NRTP)
31st December of next financial Normal taxpayer having
GSTR9C Reconciliation Statement
year aggregate turnover > 5 crore

CA Raj Khona 59
Procedure for filing GST returns
1. Directly through Portal: Online entry on GST portal

2. Free Offline Utility: Uploading of invoices and other data using the Returns offline tool. If there are more line
items, inputting them online would not be possible. Hence, Goods and Services Network has developed a free
offline utility, which is available for download on gst.gov.in under the following path:
• Downloads --> offline tool --> Return offline tool.

3. Third-Party Application Software: Using the third-party application of Application software Provider (ASP) through
GST Suvidha Providers (GSP).

4. SMS: NIL returns can be filed through SMS

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Details to be furnished in GSTR-1

Table Description Remarks

reference
4. Taxable outward supplies made to registered persons (including
UIN holders) other than supplies covered by Table 6
4A. Supplies other than those (i) attracting reverse charge and (ii) Invoice wise details (including debit notes
supplies made through e-commerce operator and credit notes) of Inter-State and Intra-
4B. Supplies attracting tax on reverse charge basis State supplies made to registered persons
(including those holding UIN)
4C. Supplies made through e-commerce operator attracting TCS
(operator wise, rate wise)

5. Taxable outward inter State supplies to unregistered persons

where the invoice value is more than Rs 2.5 lakh
5A. Outward supplies (other than supplies made through e- Invoice wise details (including debit notes
commerce operator, rate wise) and credit notes) of Inter-State supplies
5B. Supplies made through e-commerce operator attracting TCS with invoice value of more than Rs 2.5
(operator wise, rate wise) Lakhs made to unregistered persons

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Details to be furnished in GSTR-1

Table Description Remarks

reference
6. Zero rated supplies and deemed exports 1. Invoice wise details of supplies made to
6A. Exports Special Economic Zone (SEZ) Unit or
developer, Exports including deemed
6B. Supplies made to SEZ unit or SEZ developer exports. Generally, shipping bill details
6C. Deemed Exports needs to be declared, but even in the
absence of shipping bill details, the entry
will be accepted. Upon availability of such
details and before filing refund/rebate,
such shipping bill details need to be
furnished through the amendment
section of GSTR-1.

2. If Goods and Services Tax Identification

Number (GSTIN) of the recipient is not
available in the case of exports, it can be
left blank.

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Details to be furnished in GSTR-1

Table Description Remarks

reference
7. Taxable supplies (Net of debit notes and credit notes) to
unregistered persons other than the supplies covered in Table 5
7A. Intra-State supplies Consolidated details (including debit
notes and credit notes) rate wise need to
be furnished
7B. Inter-State supplies where invoice value is upto Rs 2.5 Lakhs State-wise and rate wise details (including
debit notes and credit notes) need to be
furnished

8. Nil rated, exempted and non-GST outward supplies

8A. Inter-State supplies to registered persons
8B. Intra-State supplies to registered persons
8C. Inter-State supplies to unregistered persons
8D. Intra-State supplies to unregistered persons

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Details to be furnished in GSTR-1

Table Description Remarks

reference
9. Amendments to taxable outward supply details furnished in Amendments effected to the details
returns for earlier tax periods in Tables 4, 5 and 6 [including furnished in Tables 4, 5 and 6 in the
debit notes, credit notes, refund vouchers issued during current earlier tax periods:
period and amendments thereof] Document wise breakup is required for
9A. If the invoice/shipping bill details furnished earlier were incorrect debit notes and
credit notes if issued to:
9B. Debit notes/ credit notes/ refund voucher [original] 1. Registered persons (both inter-State
9C. Debit notes/ credit notes/ refund voucher [amendments thereof] and intra-State)
2. Unregistered persons with invoice
value exceeding Rs 2.5 Lakhs (inter-State
supplies)

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Details to be furnished in GSTR-1

Table Description Remarks

reference
10. Amendments to taxable outward supplies to unregistered
persons furnished in returns for earlier tax periods in Table 7
10A. Intra-State supplies [including supplies made through ecommerce Amendments effected to the details
operator attracting TCS] furnished in Table 7 in the earlier tax
10B. Inter-State Supplies [including supplies made through periods:
ecommerce operator attracting TCS Consolidated State wise and rate wise
reporting is
sufficient in case of :
1. Intra-State supplies to unregistered
persons and
2. Inter-State supplies to unregistered
persons with invoice value not exceeding
Rs 2.5 Lakhs.

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Details to be furnished in GSTR-1
Table Description Remarks
reference
11. Consolidated Statement of advances received/advance adjusted in
the current tax period/Amendments of information furnished
in earlier tax period
11(I). Information for the current period
11A. Advance amount received in the tax period for which invoice Details of advances received and any
has not been issued (tax amount to be added to output tax adjustments to advances needs to be
liability) furnished.
11B. Advance amount received in earlier tax period and adjusted
against the supplies being shown in this tax period in Tables 4, 5, 6
and 7.
11(II). Amendment of information furnished in Table No. 11[1] in Amendments effected to the advances or
GSTR-1 statement for earlier tax periods [Furnish revised adjustment to advances furnished in the
information] previous tax periods as part of Table 11(1):
1. Details of the original invoice /debit note
/ credit note / receipt voucher reference is
being sought.
2. If the reference is invalid, amendment
option will not be available. 66
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Details to be furnished in GSTR-1
Table Description Remarks
reference
12. HSN-wise summary of outward supplies Harmonized System of Nomenclature
(HSN) /Services Accounting Code (SAC)
wise summary to be provided for outward
supplies.
13. Documents issued during the tax period Following details relating to documents
issued during the tax period need to be
furnished:
1. Serial Number of documents issued
2. Cancelled documents issued during the
month

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Notes to GSTR-1
• Supplies made to SEZ unit or developer and deemed exports though denoted in a separate Table (Table 6B and
6C) as different from supplies made to registered persons (Table 4A, 4B and 4C) in the Form – the GSTN portal has
appropriately combined the reporting of these Tables since in cases mentioned in Table 6B and 6C, the recipients
are registered persons.

• The internal classification of ‘supplies attracting tax on reverse charge’ in Table 4B, requires the supplier to
disclose his outward supplies under this category. Though the recipient is liable to pay tax on such a transaction,
the disclosure sought for under Table 4B is from the viewpoint of the supplier.

• Any supply made by SEZ to DTA without the cover of bill of entry is required to be reported by SEZ Unit in GSTR-1.
Those supplies made by SEZ on the cover of a bill of entry are not to be included in this form but shall be
reported by DTA unit as imports in its GSTR-3B.

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Details to be furnished in GSTR-3B

Table Heading Description Additional points for

Number consideration
3.1 Tax on outward and Summary details of outward supplies and inward Export invoices shall not be
reverse charge supplies liable to reverse charge and tax liability processed for transmission
inward supplies thereon in ICEGATE if the correct
IGST amount is not filled in
this table. Processing of
refunds will get impacted.
3.1.1 Details of supplies (i) Taxable supplies on which electronic commerce
notified under sub- operator is required to pay
section (5) of [to be furnished by the electronic commerce
section 9 of the operator]
Central Goods and
Services Tax Act, (ii) Taxable supplies made by the registered person
2017 through electronic commerce operator, on which
electronic commerce operator is required to pay

[to be furnished by the registered person making

supplies through electronic commerce operator]
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Details to be furnished in GSTR-3B
Table Heading Description Additional points for
Number consideration
3.2 Inter-State supplies A registered person making inter-state IGST amount mentioned in
supplies to an unregistered person, shall this Table should not exceed
report the details of such supplies and place the amount of IGST
of supply-wise mentioned in Table 3.1

A registered person making inter-state

supplies to the registered persons paying tax
under section 10 of the SGST/CGST Act
(composition taxable persons) and to UIN
holders, shall report the details of such
supplies and the place of supply-wise

A registered person making inter-state

supplies shall update their customer database
properly with the correct State name and
ensure that the correct POS is declared in the
tax invoice
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Details to be furnished in GSTR-3B

4. Eligible ITC (as per old format) 4. Eligible ITC (as per new format)
(A) ITC Available (whether in full or part) (A) ITC Available (whether in full or part)
(1) Import of goods No change
(2) Import of services No change
(3) Inward supplies liable to reverse charge No change
(other than 1 & 2 above)
(4) Inward supplies from ISD No change
(5) All other ITC No change
(B) ITC Reversed (B) ITC Reversed
(1) As per Rule 42 & 43 of CGST/SGST (1)As per rules 38, 42 and 43 of CGST Rules
Rules and sub-section (5) of section 17
(2) Others Others

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Details to be furnished in GSTR-3B

4. Eligible ITC (as per old format) 4. Eligible ITC (as per new format)
(C) Net ITC Available (A) - (B) (C) Net ITC Available (A) - (B)
(D) Ineligible ITC (D) Other details
(1) As per section 17(5) (1) ITC reclaimed which was reversed under Table 4(B)(2) in
earlier tax period
(2) Others (2) Ineligible ITC under section 16(4) and ITC restricted due to
Place of supply provisions

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Details to be furnished in GSTR-3B

Table Heading Description Additional points for

Number consideration
5. Exempt, Nil and non-GST To provide summary details of exempt, Nil
inward Supplies and non-GST inward supplies
5.1 Interest and late fee To provide details of interest and late fee 1. Late fee is auto populated
payable by the portal based on the
number of days elapsed
after the due date of filing.
2. Interest needs to be
computed and inputted by
the taxpayer
6.1 Payment of tax To provide details of payment of taxes, 1. Set off amount available
interest and late fee against electronic credit
ledger (based on the
utilisation of credit
prescribed by the legislation)
is autopopulated but it can
be edited.
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Details to be furnished in GSTR-3B

Table Heading Description Additional points for

Number consideration
The edited information will
be available only for 2 days.
After that, the system
suggested utilization will be
reflected,
2. Balance amount is
reflected as against being
set off against electronic
cash ledger

6.2 TDS / TCS Credit TDS/TCS credit received from deductor/e-

commerce operator would be auto-
populated in the electronic cash ledger,
once it is accepted by the deductee in
case of TDS/ supplier in case of TCS.

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Notes to GSTR-3B
• The return period prior to the effective date of registration cannot be selected for filing Form GSTR-3B.

• Clicking ‘Save Form GSTR-3B’ is a pre-requisite before clicking ‘Proceed for payment’. In case of failure, either of the
following issues can occur:
✓ The values will automatically be changed as ‘zero’ and the status of the Form will be shown as ‘submitted’.
✓ An error message will be displayed stating that ‘the information found in form seems old and invalid

• Table 3.2 is available as the last table in the GST portal.

• Care needs to be taken to ensure that ineligible credits under Section 17(5) of the Act should be considered while
reporting the gross value in Table 4A and reversed under other reversals in Table 4B(2) of GSTR-3B. Common mistakes of
entering values without including ineligible ITC in Table 4A and 4B are noticed.

• Other ITC reversals mentioned in Table 4B(2) should include only current month’s ITC reversals like non-payment for the
amount of supply along with tax liability within 180 days by the recipient to the supplier. If there is an ineligible credit
availed during the previous month, and if the same has been detected on self-assessment in the subsequent month, the
said amount should be added in Table 3.1 (a), and not in Table 4B(2) of subsequent month’s GSTR-3B.

• Though Rule 43 of the Rules provides that the tax paid on capital goods used for exempt supplies shall be added to
output tax liability, the machinery provisions are such that it is shown as a reversal under Table 4B(1) of GSTR-3B.

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Quarterly Return Monthly Payment scheme - Features
• Introduced for small taxpayers - Aggregate turnover of up to Rs.5 crores in the preceding financial year

• GST returns to be filed on quarterly basis + Payment of GST to be made on monthly basis

• Effective from 01.01.2021

• Optional scheme

• Option can be exercised any time during the year from the first day of the second month of the preceding quarter till
the last day of the first month of the quarter for which the option is being exercised.

• Taxpayer must have furnished the last return, as due on the date of exercising such option.
Quarter Time limit for exercising option Last date for option
April – June 1st February to 30th April 30th April
July – September 1st May to 31st July 31st July
October – December 1st August to 31st October 31st October
January – March 1st November to 31st January 31st January

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Monthly tax payments under QRMP Scheme
• Payment through GST PMT-06 (first and the second month of the quarter) and through GSTR-3B on actual basis

• Due date for the payment through GST PMT-06: 25th of the following month

• Methods prescribed calculation of tax liability under QRMP scheme –

❑ Fixed sum method – Payment through pre-filled challan

Sr. No. Situation Tax to be paid

1 Where taxpayer had filed GSTR-3B of previous 35% of tax paid (CGST/SGST/IGST/UTGST/Cess) in
quarter on quarterly basis cash in the preceding quarter
2 Where taxpayer had filed GSTR-3B of previous 100% of tax paid in cash in the last month of the
quarter on monthly basis immediately preceding quarter

* Since the QRMP scheme is introduced in January 2021, all taxpayers were monthly filers in December 2020. Hence, the 35%
challan will be populated as per situation 2 for the quarter of January to March 2021 for quarterly filers.

❑ Self-assessment method – Payment on actual basis i.e.; net tax liability

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GSTR-3B filing due dates – QRMP Scheme

Sr. No. Class of Registered Persons Due Dates

1 Registered persons whose principal place of business is in the 22nd of the month succeeding such
States of Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, quarter
Karnataka, Goa, Kerala, Tamil Nadu, Telangana, Andhra Pradesh,
the Union territories of Daman and Diu and Dadra and Nagar
Haveli, Puducherry, Andaman and Nicobar Islands or
Lakshadweep.
2 Registered persons whose principal place of business is in the 24th of the month succeeding such
States of Himachal Pradesh, Punjab, Uttarakhand, Haryana, quarter
Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh,
Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West
Bengal, Jharkhand or Odisha, the Union territories of Jammu and
Kashmir, Ladakh, Chandigarh or Delhi.

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Interest implication in case of Shortfall / Delay in payment
• Interest payable, if any, shall be paid through Form GSTR-3B

• No late fee is applicable for delay in payment of tax in first two months of the quarter

• Interest under Fixed Sum Method

o Delay in paying within due date - Interest would be payable from the due date of furnishing Form GST PMT-06 till the
date of making such payment
o Shortfall in tax at the time of filing GSTR-3B (calculation on actual basis) - No interest would be payable if tax paid
within the due date (for first two months)

• Self-Assessment Method

o If tax remains unpaid / is paid beyond the due date for the first two months of the quarter - Interest amount would be
payable from due date till actual date of payment

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Invoice Furnishing Facility (IFF)
• Introduced for taxpayers who have opted for QRMP Scheme for furnishing their B2B transactions on a monthly basis

• Only following transactions are allowed to be reported under IFF :

• B2B Invoices (Incl. amendment)

• Credit / Debit Notes Registered (Incl. amendment)

• To be furnished on or before 13th of the following month. Post 13th of the following month only “View” option is
available and “File” option gets disabled (Late filing of IFF is not allowed)

• Total value of invoices that can be uploaded per month is restricted upto Rs. 50 lakhs

• No requirement to upload invoices again in GSTR-1 if the same has been furnished in the IFF

• Optional Facility - Non-filing or late filing will not attract any late fee or penalty

• Invoices furnished in IFF will be reflected in FORM GSTR-2A and FORM GSTR-2B of the concerned recipient

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Reverse Charge Mechanism – Specified Categories
CGST Act, 2017

• 9. (3) The Government may, on the recommendations of the Council, by notification, specify categories of supply
of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such
goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person
liable for paying the tax in relation to the supply of such goods or services or both.

✓ Notification issued under section 9(3) – NN 13/2017 – Central Tax (Rate) dated 28.06.2017

IGST Act, 2017

• 5. (3) The Government may, on the recommendations of the Council, by notification, specify categories of supply
of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such
goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person
liable for paying the tax in relation to the supply of such goods or services or both.

✓ Notification issued under this section 5(3) - NN 10/2017 – Integrated Tax (Rate) dated 28.06.2017

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Reverse Charge Mechanism –
Unregistered Supplier + Registered Recipient + Specified Categories
CGST Act, 2017

• 9. (4) The Government may, on the recommendations of the Council, by notification, specify a class 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, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in
relation to such supply of goods or services or both.

✓ Notification issued under section 9(4) - NN 07/2019 – Central Tax (Rate) dated 29.03.2019 (applicable on
promoter of construction project)

IGST Act, 2017

• 5. (4) The Government may, on the recommendations of the Council, by notification, specify a class 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, and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in
relation to such supply of goods or services or both.

✓ Notification issued under section 5(4) – NN 07/2019 – Integrated Tax (Rate) dated 29.03.2019 (applicable on
promoter of construction project)

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Definition of “Recipient”
2(93) “recipient” of supply of goods or services or both, means —

(a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay
that consideration;

(b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or
made available, or to whom possession or use of the goods is given or made available; and

(c) where no consideration is payable for the supply of a service, the person to whom the service is rendered,

and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the
supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both
supplied;

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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

1. Supply of Services by a goods transport Goods Transport (a) Any factory registered under
agency (GTA), in respect of Agency (GTA) or governed by the Factories Act,
transportation of goods by road to- 1948; or

(a) any factory registered under or (b) Any society registered under the
governed by the Factories Act, 1948; Societies Registration Act, 1860 or
or under any other law for the time
(b) any society registered under the being in force in any part of India; or
Societies Registration Act, 1860 or
under any other law for the time (c) Any cooperative society
being in force in any part of India; or established by or under any law;
(c) any co-operative society established
by or under any law; or (d) Any person registered under
CGST/IGST/SGST/UTGST Act; or

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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

(d) any person registered under (e) Anybody corporate established,
CGST/IGST/SGST/ or UTGST Act; or by or under any law; or

(e) anybody corporate established, by or (f) Any partnership firm whether

under any law; or registered or not under any law
Including association of persons; or
(f) any partnership firm whether
registered or not under any law including (g) Any casual taxable person located
association of persons; or in the taxable territory.

(g) any casual taxable person; located in

the taxable territory.

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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

Provided that nothing contained in this
entry shall apply to services provided by
a goods transport agency, by way of
transport of goods in a goods carriage by
road, to, –
(a) a Department or Establishment of the
Central Government or State
Government or Union territory; or
(b) local authority; or
(c) Governmental
agencies,
which has taken registration under the
Central Goods and Services Tax Act, 2017
(12 of 2017) only for the purpose of
deducting tax under Section 51 and not
for making a taxable supply of goods or
services.]

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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

Provided further that nothing contained
in this entry shall apply where, -

i. the supplier has taken registration

under the CGST Act, 2017 and exercised
the option to pay tax on the services of
GTA in relation to transport of goods
supplied by him under forward charge;
and

ii. the supplier has issued a tax invoice to

the recipient charging Central Tax at the
applicable rates and has made a
declaration as prescribed in Annexure III
on such invoice issued by him.

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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

2. Services provided by an individual An individual Advocate Any business entity located in
Advocate including a Senior Advocate or including a Senior the taxable territory.
firm of Advocates by way of legal Advocate or firm of
services, directly or indirectly Advocates.
Explanation. - “legal service” means any
service provided in relation to advice,
consultancy or assistance in any branch
of law, in any manner and includes
Representational services before any
court, tribunal or authority
3. Services supplied by an Arbitral Tribunal An Arbitral Tribunal Any business entity located in the
to a business entity. taxable territory.
4. Services provided by way of sponsorship Any person Any body corporate or partnership
to any body corporate or partnership firm located in the taxable territory.
firm.

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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

5. Services supplied by the Central Central Government, Any business entity located in the
Government, State Government, Union State Government, Union taxable territory.
territory, or local authority to a business territory or local
entity excluding the following: authority
(A) renting of immovable property, and
(B) services specified below: -
i. services by the Department of
posts
ii. services in relation to an aircraft
or a vessel, inside or outside the
precincts of a port or an airport;
iii. transport of goods or
passengers.

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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

5A. Services supplied by the Central Central Government, Any person registered under the
Government, State Government, Union State Government, Union Central Goods and Services Tax Act,
territory or local authority by way of territory or Local 2017]
renting of immovable property to a Authority
person registered under the Central
Goods and Services Tax Act, 2017
5AA Service by way of renting of residential Any person Any registered person
dwelling to a registered person.
5B. Services supplied by any person by way Any person Promoter
of transfer of development rights or Floor
Space Index (FSI) (including additional
FSI) for construction of a project by a
promoter.

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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

5C. Long term lease of land (30 years or Any person Promoter
more) by any person against
consideration in the form of upfront
amount (called as premium, salami, cost,
price, development charges or by any
other name) and/or periodic rent for
construction of a project by a promoter.
6. Services supplied by a director of a A director of a company A company or a body corporate
company or a body corporate to the said or a body corporate located in the taxable territory
company or the body corporate.
7. Services supplied by an insurance agent An Insurance agent Any person carrying on insurance
to person carrying on insurance business. business, located in the taxable
territory

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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

8. Services supplied by a recovery agent to A recovery agent Banking company or financial
a banking company or a financial institution or a non-banking financial
institution or a non-banking financial company, located in the taxable
company. territory.
9. Supply of services by a music composer, Music composer, Music company, producer or the like,
photographer, artist or the like by way of photographer, artist, or located in the taxable territory
transfer or permitting the use or the like.
enjoyment of a copyright covered under
clause (a) of sub-section (1) of Section 13
of the Copyright Act, 1957 relating to
original dramatic, musical or artistic
works to a music company, producer or
the like.

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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

9A. Supply of services by an author by way of Author Publisher located in the taxable
transfer or permitting the use or territory: -
enjoyment of a copyright covered under Provided that nothing contained in
clause (a) of sub-section (1) of section 13 this entry shall apply where: -
of the Copyright Act, 1957 relating to (i) the author has taken registration
original literary works to a publisher. under the Central Goods and
Services Tax Act,2017 (12 of 2017),
and filed a declaration , in form at
Annexure I, within the time limit
prescribed therein, with the
jurisdictional CGST or SGST
commissioner, as the case may be,
that he exercises the option to pay
central tax on the service specified
in column (2), under forward charge
in accordance with Section 9 (1) of

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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

the Central Goods and Service Tax
Act, 2017 under forward charge,
and to comply with all the provisions
of Central Goods and Service Tax
Act, 2017 (12 of 2017) as they apply
to a person liable for paying the tax
in relation to the supply of any goods
or services or both and that he shall
not withdraw the said option within
a period of 1 year from the date of
exercising such option;
(ii) the author makes a declaration,
as prescribed in Annexure-II on the
invoice issued by him in FORM GST
Inv-I to the publisher

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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

10. Supply of services by the members of Members of Overseeing Reserve Bank of India
Overseeing Committee to Reserve Bank Committee constituted
of India by the Reserve Bank of
India.
11. Services supplied by individual direct Individual direct selling A banking company or a non-banking
selling agents (DSAs) other than a body agents (DSAs) other than Financial company, located in the
corporate partnership or limited liability a body corporate, taxable Territory
partnership firm to bank or non-banking partnership or limited
financial company (NBFCs) liability partnership firm.

12. Services provided by business facilitator Business facilitator (BF) A banking company, located in the
(BF) to a banking company. taxable territory
13. Services provided by an agent of business An agent of business A business correspondent, located in
correspondent (BC) to business correspondent the taxable territory.
correspondent

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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

14. Security services (services provided by
way of supply of security personnel)
provided to a registered person:
Provided that nothing contained in the
entry shall apply to, -
a) a Department or Establishment
of the Central Government or
State Government or Union
territory; or
b) local authority; or
c) Government
d) agencies;
which has taken registration under the
Central Goods and Services Tax Act, 2017
(12 of 2017) only for the purpose of
deducting tax under Section 51 of the
said Act and not for making a taxable
supply of goods or services; or
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Supply of Services notified for Reverse Charge Mechanism

S.No Description of Services Supplier of Services Recipient of Services

(ii) a registered person paying tax

under Section 10 of the said Act.
15. Services provided by way of Any person, other than a body Any body corporate located in
renting of any motor vehicle corporate who supplies the service to the taxable territory
designed to carry passengers a body corporate and does not issue
where the cost of fuel is included an invoice charging central tax at the
in the consideration charged from rate of 6 per cent. to the service
the service recipient, provided to recipient.
a body corporate
16. Services of lending of securities Lender i.e. a person who deposits the Borrower i.e. a person who
under Securities Lending Scheme, securities registered in his name or in borrows the securities under
1997 (“Scheme”) of Securities and the name of any other person duly the Scheme through an
Exchange Board of India (“SEBI”), authorised on his behalf with an Approved intermediary of SEBI
as amended approved intermediary for the purpose
of lending under the scheme of SEBI.

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