e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e good afternoon everyone for for hi BR hi everyone how was your previous examination for can you guys confirm me whether my audio and video is clear okay so I heard the accounts paper was lengthy as well but it was easy low I think goes into the same category right now you have time for taxation taxation has to be your best paper in this group so that this group get sealed for you so that's our um plan how was my trip it was great I had good time thank you so I think it's probably um the less busiest Marathon that we might be doing in in a very long time because normally the marathon takes a lot of struggle because you might be coming after the examination so I'm hoping that after yesterday's exam you slept off well so that you are ready for a large you know amount of online session without thinking too much about other things okay so uh I have scheduled this session uh in two methods or basically I can say that I have divided the session into two categories first we will go ahead and then cover uh the concept area and so some people might only wanted to attend the procedures and you know things like that so I have kept it into two categories I have given the topics also on the uh you know description I have uh mentioned what are the topics that we'll cover in each of the session so we will have two sessions one will be now and um another session we will start at uh 7:00 and we'll do another 2 three hours during that session as well but that will be mostly procedures that we will be covering up in this session we will be covering up the concept areas and then if anything that is left out in terms of coverage we will try to um you know go through that either to tomorrow evening so something like that we will try to see okay so but then that that depends like how much are we left out with we will see at the end of the session so but I want you to um considering that your examination is only on 9th I believe that attending a marathon session from your books or our books that uh you've already gone through with some bit of additional learning that you would have had from ICA material that will be what is required and after uh is this Marathon enough for you to revise the entire topic no no I would recommend you after the marathon to spend some time in terms of looking into the RTP looking into some important questions so that you are well aware of the you're well aware of the uh you know the method in which uh you want to solve the questions as well but I'll give you a quick run around on all the topics that's our objective all right so um you can see this is the chapter that uh we have so I'll tell you what are the chapters that I'm going to pick up for this session for us to look at so we will start with uh discussing charge once you revise charge a lot of things will get solved for you so I will look at charge first then I will look at value of Supply when I do charge I'll also do composition Levis scheme as such okay so that's also another topic that I want you to look at then um I will recap you input tax credit then I'll give you an understanding on time of supply then depending upon how much time do we have we will look at exemptions and some important areas from Supply job okay so we will have the session now we are like uh it's 2:30 so we will have the session going on till uh probably 4:45 another two hours we'll do another one session we'll take a break after that another 10 15 minutes then we will continue with the same session same link okay we'll just continue and we will go till my stream is not visible can someone confirm me okay got it I'm just you know trying to reconnect my iPad something that I was writing was not visible that's what he meant by that I hope now it's visible okay so I was telling you the order in which we wanted to cover the topics that's it nothing very serious okay okay so uh okay so let's get U started with our discussion so like I said I will cover charge I will start with charge and we know that the concept areas would know you know constitute your Char chapter value chapter ITC chapter time of Supply exemption and some portion from Supply that's our first Target so I told you that we'll do 2hour session take a break whenever we feel like whenever I feel like okay I'm like you know I need a break of 15 minutes have a te come back then we will do another session and that will go till 6:30 or then we will whatever we can cover in this will be concept and then we'll start with the next session by 7:00 that will U you know that will be the procedural discussion okay that's the thought process in which we are starting as far as um our topic is concerned I have marked these chapters as a category as well apart from that you will definitely have to go through this amendment is a cap a category for your uh exam ation you have to look at in each chapter what is the amendment that we have and there is a very high chance and on 9th there will be a question from the Amendments that we are discussing today second the mock test papers whatever has come and the RTP even though I have already a already an RTP video that I have uploaded on this YouTube channel itself so okay definitely you have to go ahead and then subscribe the channel and uh you know then go ahead and then start watch those videos during your free time if you want to if you have not yet gone through the rtpv it's available there okay so I have already put in an separate video for amendments as well so these two things I'll strongly recommend both will be constituting around one and a half hours it's completely in English and uh it'll be just giving you a full summary on what are the amendments that we had so let's get started with uh charge chapter we will precisely look at what is there for us to study in charge chapter okay so Char chapter comprises of few examination concept one is N9 subsection 3 which is reverse charge mechanism all the cases are important you will have to remember what is the conditional rcms that we have okay it's a very important portion that you have to remember nine subsection for generally they don't ask a very detailed question so it's kind of a b category but I'll still recommend you just go through what is 9B and we can also discuss what will be tested in N9 subsection 4 then N9 subsection 5 you will have to read it together with the tax collected at source section 52 so this is a new topic for this exam this is not been tested in the past so this is a category can be tested so we need to uh quickly go through all of those discussions relating to 95 that's it for charge in terms of our discussion but we will Club it with some exemptions that is to be required to be discussed then we have section 10 which is talking about composition lovey scheme there are five things that you need to understand I'll take an know I'll take half an hour probably to discuss all of them let's get started with it so what's the difference between nine subsection Section 3 and 9 subsection 4 we said 9 subsection 3 and 9 subsection 4 both of them are basically talking about reverse charge mechanism however in N9 subsection 3 the in N9 subsection 3 and N9 subsection for both of them it is the recipient who pays taxes right to the government but in N9 subsection three the recipient can be registered or unregistered both ways in notified cases it will be the recipient who has to pay taxes to the government but in n9th subsection 4 cases in nth subsection four cases they're saying that it is an RCM case for Inver Supply from unregistered supplier which means here always okay in the case of 9 subsection 3 the supplier not recipient the supplier can be registered or unregistered in both cases it will be the rece and who will pay taxes but in N9 subsection 4 the supplier has to be unregistered this is the only difference that we have so we have about 19 cases that we have I told you that there are uh you know there are certain smart ways in which you can remember few Provisions for your examination so please please please remember following notification numbers for your examination on 9th one is notification 13 bar 2017 this is a cgst notification in this notification they're talking about specified cases of reverse charge mechanism which means any reverse charge question that comes in where they ask you any of the scenario in the working note we write the section called 9 subsection 3 read with notification 13 bar 2017 so the problem that you have in terms of not remembering all the section can be resolved by this you can remember just this one notification called as notification 13 by 2017 and then write it in your exam because there will definitely be a question now uh having said that let us go ahead and then try to understand what are the cases of RCM that we have for us to remember okay so this is the table that we've looked into while discussing in the classroom about reverse charge mechanism cases either if you are somebody who's not from our classroom you can refer the IC material or whatever material you have go to char chapter you will find something called as RCM cases let's go through all the 19 cases and then respective exemptions now first case that we have for RCM is an insurance agent providing any services to any person carrying Insurance business in taxable territory will be taxed under RCM an insurance agent providing services to an insurance company who is liable to pay taxes it is the insurance company who is liable to pay taxes the logic was very simple we said all the RCM cases we have this thought process that the number of supplies are huge and and the number of recipients are very Less in numbers government looks into catch the recipients than the supplier okay I also told you that when you're writing answer always use the word when you write recipient say how do you write this for the examination we would write now uh to give you a perspective of how to write that answer we'll write like this as per 9 subsection 3 of cgst act 2017 read with notification number 13 bar 2017 when an insurance agent is providing services to any person carrying Insurance business in taxable territory in all the cases of RCM the recipient has to be in India so that's why they have added the word in taxable territory so when you write the answers remember to use the word in taxable territory so that your answer becomes much better okay so in such cases in when an insurance agent is providing services to and any person carrying Insurance business in taxable territory is charged under reverse charge mechanism it is not completely right to write RCM in the examination but I have seen that most likely the examiners have not reduced marks for somebody who has written RCM so even if you don't if you feel like you don't have a lot of time you can always write RCM so under RCM then we that's the provision that you will be able to write so which means that whenever you write the answer use the word taxable territory then second one second to five all of them are relating to in relating to banking sector we said a recovery agent the one who is recovering loans if they provide services to a Banking Company financial institution including nbfc in taxable territories under RCM now we divided the RCM cases into two categories one is a conditional RCM another one is a general RCM and we said if you look at the first case and second case it's General RCM any any kind of supplier can provide services to Banking Company or insurance company and it'll be under RCM however third one we call this as conditional RCM because they said the third case is an individual direct selling agent providing services to Banking Company financial institution including nbfc located in taxable territory here it is not enough if the supplier is direct selling agent it has to be an individual then RCM will be applicable if the direct selling agent is not an individual it'll be taxed under fcm this was the thought process we had then we discussed about two additional persons one person is called as business facilitator another person is called as business correspondent business facilitator is the one who will do the activity for the banks by way of collecting deposits and then giving it to the bank or allowing people to withdraw and all that these people are eligible for commission is taxable under RCM but look at business correspondent the understanding of business correspondent is slightly different here because if a business correspondent is providing services to the bank it is not taxed under RCM it is taxed under fcm what is taxed under RCM an agent is providing services to business correspondent so normally that transaction happens like this agent will provide services to business correspondent they provide services to bank this is under RCM this is under fcm please remember this now for both business correspond and business facilitator there is an exemption that is available we said if there is exemption there is no question of charge the understanding of this is that if something is Exempted then there is no need that is if something if if a transaction is Exempted from GST there is no need for us to assess whether tax to be paid by supplier or tax to be paid by recipient because tax itself is not payable so there is an exemption that is available for business facilitator and business correspondent when will that be available only if the bank which is paying the commission or the account which is receiving this particular services from business correspondent or facilitator is located in rural area Branch so exemptions are given in notification number 12 Bar 2017 so merely by remembering two notifications that is notification 13 bar 2017 which is read with 9 subsection 3 notification 12 2017 is read with Section 11 of cgst act if you remember these two notification numbers you will be definitely be able to write this in the examination okay that's an advantage that you have let's look at the next one any person any person providing sponsorship services to a body corporate partnership firm including llps taxed under RCM now we said sponsorship service is nothing but advertisement a classic example to look at here would be say Tata is sponsoring IPL so the supplier can be any person is what the provision say so Tata can be the supplier sorry uh the supplier can be IPL or any person so how do I check who's the supplier who's a recipient in GST the one who's receiving the money would always be the supplier the one who is paying the money would be the recipient right so whenever they provide services they'll get money here IPL is getting the money so IPL is the supplier the supplier for RCM can be any person and recipient has to be this is also a conditional RCM it says the recipient has to be a body corporate of partnership firm they ask questions trying to test you whether you remember this particular part or not where did we see a conditional RCM before this we have seen with direct selling agent so they said any person providing sponsorship Services say IPL is IPL is providing sponsorship services to IPL is providing sponsorship services to a body corporate or partnership firm to whom say Tata it is Tata who has to pay tax under reverse charge mechanism when I say partnership it even includes limited liability partnership now the together with this we should also learn section 24 what is that section 24 means which what is that section 24 talks about can someone give me on the chat box what is that section 24 talks about it talks about compulsory registration right now there is a provision in compulsory registration which says that the moment you are liable to pay tax under RCM you will not be able to check your threshold limit for registration your registration has to be your registration has to be based on section 24 which means that if I am somebody who is receiving service and RCM is applicable I will have to definitely I will have to definitely pay taxes under RCM by registering compulsorily under section 24 very simple understanding it is okay then point number seven 7 see for this Examination for the examination on 9th I feel like I feel like this is just a gut feeling that I have there could be a question on director if you look at a lot of ICA question that is being drafted at inter and final L revolves around director's cases so mark this director as very important and then try to you know make a full understanding of this when will I have RCM applicable in case of director we will have to look at some additional understanding in terms of director so the provision I'll read you director of a company when they provide services to a body corporate being a company but they said director of a company providing any Services other than in their personal or private capacity so for a director to have RCM applicable director has to provide services the capacity of a director let's look at this with the chart for okay so this is what they're going to test you in your examination in terms of director let's look at the summary table there could be multiple type of directors in a company managing director whole-time director executive director see these directors will be eligible for two type of payment one is salary and another one is a sitting fees for attending the board meeting if they are receiving salary how do I check whether the money that is received by Direct the salary or not we will look at income tax TDS provision because in income tax TDS provision 192 in income tax talks about TDS on salary if the money that is received by the director is after deducting TDS under 192 it means that they're receiving salary and it is not even a supply because negatively says salary is not a supply so the moment they are receiving salary GST is not payable if GST is not payable there is no question of charge however if a managing director whole time director or executive director is receiving fee the TDS will be deducted under under 194 J and it becomes a supply and GST is payable it is payable by the company under reverse charge mechanism there is one more type of director called as independent director the independent director is not eligible for salary will only be attending the board meetings and receiving a sitting fee so of course the income tax TDS will be 194 J thereby it is a contract and it is a supply GST is payable but who is liable to pay pay GST it is the company who is liable to pay GST I've written a note here look at this service by a director other than in the capacity of a director so for example I'm a director in a company I have a commercial property I have given on rent to my company this is not a service in the capacity of a director just because I'm a director it will not be taxed under RCM for any Services only the services in the capacity of a director is the latest clarification please uh ensure that you remember this then let's look at uh the case of GTA so GT is a very important case a lot of people struggle to remember this in full okay but it's since it's very important let's look at this in detail a Goods transport agency not opting to pay tax under fcm and charged GST as per applicable rate so supplier has to be a GTA not just a mere GTA the GTA who did not go for fcm when they provide Goods transportation services to a specified person okay now if you guys remember we had a code word to understand who are the specified person anybody from the chat box can put the code word for us to remember who are the specified person so to have RCM applicable a GTA a Goods transport agency has to provide services to a specified person what if they are not specified person who can be not specified person an unregistered individual like you and me will not be considered to be a specified person BPL scard very good guys very good so let's expand BPL scarf and understand who will be coming under RCM for that particular matter it is BPL scarf b stands for body corporate P stands for partnership firm L stands for LLP s stands for society under Society registration act 1860 or any other act C stands for Cooperative Society a stands for aop R stands for any person registered under GST F stands for fact so these many people okay these many people if they provide services sorry if they receive services from a Goods Transportation agency it will be taxed under reverse charge mechanism is the understanding now if you look at I have listed except for the sixth point one to five which means that except for the people who are registered all others mentioned in BPL scarf please listen to me carefully people who are under BPL scarf even if they are not registered will come under specified person category because they come under specified person category they will have to go mandat take a registration and pay tax under RCM when when the GTA is not opting for forward charge mechanism okay now let's try to understand this together with exemptions that we have okay this is the new summary that I have prepared for GTA cases for you to get better understanding let's look at this how do I check whether GTA Services is taxable if it is taxable whether it is taxable under fcm or RCM how do I check that very simple straightforward understanding first we have to look at so we have to ask the question is GTA Services taxable when it will not be taxable there are two cases where GTA providing Services whether GT is under fcm or RCM there are two cases where GTA services will be fully Exempted number one when the recipient is other than specified person number two or recipient is somebody who is registered but registered only for TDS under section 51 one like their government their local Authority registered but registered only for TDS so there are two ways in which there are two ways in which GTA Services would be exempt number one a recipient is other than specified person or only registered for TDS number two they are transporting random five there are a certain notified Goods if you transer rep by GTA the GST would be Exempted there's a code word for that we have studied which is random five right R stands for what is random five relief material a stands for agriculture produce n stands for newspapers and magazines d stands for defense and Military equipments o stands for or organic manual okay like cang and all that then M5 milk salt food grain including floor pulses and rice if you transport these mentioned product which are under random five or if you are if you if the recipient is other than specified person recipient is other than BPL scarf or recipient is registered but only for TDS then GST itself is Exempted if GST is Exempted there is no question of charge now question is GTA is providing services and it is not coming under exemption then I have to ask the question is GTA going for fcm or going for RCM if GTA is going for fcm then again GTA is liable to pay taxes now but there are two rates that is applicable see GTA can go for 12 percentage under fcm or can go for 5% under fcm what's the difference GTA will have lot of inward Supply right GTA would have taken purchases of vehicles GTA would have done some consumable purchases all these purchases by GTA will not be available as credit if they have gone for fcm 5% they will get credit if they have gone for fcm 12% now let's look at the same chart again and say GTA Services first of all it is taxable and GTA did not go for fcm then the recipient has to pay tax under RCM who's the recipient here BPL scarf why because if it's not BPL scarf we would have taken exemption for that are you guys understanding when the recipient is paying taxes it is paid under reverse charge at 5% is it clear to all of you if it's if that is clear can I have a quick yes on the chat box everyone for okay now let's look at two more RCM cases all of these are relating to two more RCF cases all of these are relating to Legal structure in India now I'm going to consolidate legal structure for you because there is one more provision from your negative list that will become relevant for legal structure okay so I'm going to consolidate whatever I've Consolidated during the workout batch I will show you some students definitely will be from workout batch here you would have seen this particular notes that have written at that time now in legal structure we have two Provisions that is applicable the first institution that comes into the legal structure is the court okay so in schedule three that is in negative list if you look at par 2 it it says Services by court or tribunal is not even a supply what it says Services by court or tribunal is not even a Supply Here Court means District Court high court and Supreme Court tribunal means appell tribunal like an appeal tribunal not arbital tribunal these are not even a supply means which which means that there is no GST applicable at all for the court fees now who else comes into the legal structure in India it is The Advocates who comes under legal structure so this it there are three type of uh people who can still be in the legal structure who are not CAU one is individual Advocate including a senior Advocate who's a senior Advocate somebody who's designated as senior by high court or Supreme Court or The Advocates can be running a firm so we can say that there could be firm of Advocates then arbitral tribunal arbitral tribunal is a body where where uh arbitral tribunal is a body where two people come to together for arbitration or negotiation and they will have somebody coming and then listening to both of them and then solving the issues by collecting a fee so there is fee paid to individual Advocate form of advocate or arbitr tribunal would it be taxable under RCM or fcm so for that we need to understand some exemptions some RCM some fcm okay so let's look at this particular chart and then try to understand this perfectly so you can see I have created a chart weing in the middle we have the supplier who's the supplier individual Advocate including senior Advocate firm of Advocates or arbital tribunal now they can provide services to various set of people and I'm this chart should give you full understanding about the legal structure first if they provide services to Legal Services to person other than business entity which could be an individual who's not running any business a charitable entity which is not a business entity government said I don't want to collect GST at all it is Exempted similarly when they provide services who individual Advocate senior Advocate form of Advocates or arbital tribunal they provide services to government local Authority governmental Authority governmental entity that is also Exempted there is no GST applicable then next third person is a small business entity at coin this particular word called small business entity to give you an understanding on certain exemptions there are two places I will use the term small business entity one is here and another one is in the government cases when an advocate or senior Advocate or form of advocate or arbital is providing services to a small business entity who is a small business entity their previous year aggregate turnover is less than threshold limit for registration such entity will be called as small business entity if they receive services from if they receive services from an advocate that is is also Exempted now what if this small business entity has taken voluntary registration what if they have taken voluntary registration still they would be called as what small business entity are you guys understanding so irrespective of note it is Exempted even if the small business entity has taken voluntary registration so I'm an advocate I provided services to Royal Bakery Royal Bakery his turnover is 15 lakh but they have taken voluntary registration still Exempted so in an examination question they'll give you some hint whether the business entity is a small business entity or a big business entity you have to catch that particular hint and then answer all right then what if they provide services to a big business entity we discussed about small business entity what about a big business entity whose turnover is more than the threshold limit it is taxable only that is taxable that is taxable under reverse charge mechanism it is the business entity who has to pay taxes similarly look at two and three points an individual Advocate other than senior Advocate providing services to another individual Advocate or form of advocate is also Exempted one Advocate another Advocate is Exempted but a senior Advocate look at Point number three a senior Advocate is providing services to another individual Advocate or form of advocate will be taxed like any other big business entity so when Advocate to Advocate what is not Exempted senior Advocate providing services to other Advocates are not Exempted what if a senior Advocate receives services from another Junior Advocate those are Exempted still okay so senior Advocate providing services to other Advocate when it will be taxable if the other Advocate is a big business entity that's the understanding then then we have government cases if at all a question comes from government's cases it is going to be little an effort to remember all the provisions across so another 10 minutes that we're going to spare in terms of explaining what is RCM for government will become very important for you okay look at this there are three cases of reverse charge that I have listed here one is government or local Authority providing services to business entities under RCA second government or local Authority is renting immobile property to a registered person is under RC so renting of immobile property to registered person then any person be it government or not government renting a residential dwelling to a registered person is also under RCM so our understanding our discussion used to happen in two separate manner okay we'll try to understand that same please remember now in for this particular purpose there is one clarification they have given which says for this particular RCM cases government would include Parliament State Legislature Court tribunal Etc means if the court or tribunal is giving something on rent it will be taxed under rum we'll try to understand together with this there is one more amendment that has come which is Ministry of Railways Ministry of Railways will now come under Ministry of Railways will now come under fcm in total no RCM at all okay and con quently there are some exe some exemptions that is withdrawn in case of you know Ministry of Railways is also something that you can see in exemption chapter we'll try to understand one by one now we said at that time our discussion used to go like this we used to make a logical approach first we understood governments or local Authority doing some Services is a business activity under GST there is no exemption that is given for government or local Authority the second point that we have seen in certain cases government had notified and said hey in some cases governments or local authorities activity governments or local authorities activities will not be treated as a supply which are the cases where governments or local authorities activities are not treated as Supply number one the activities of Pat or municipality under article 243g 243 W second when who provides activity first one p or municipality please remember this term article 243g 243 w the moment you see article 243g 243 W it is not taxable for sure second state government giving alcoholic liquor license is also also not treated as a supply now second thing alcoholic liquor for human consumption in GST is called as non- taxable Supply but that is Goods what about alcoholic liquor licenses given to the bars and the resturants that is that is having a money that is being collected by the state governments is it taxable it is not taxable under GST either it is a service but it is not taxable because it's not even a supply seven subsection 2 close B they have notified these are not supply except these two all other activities of governments are considered to be Supply if we consider everything other than those to the government as provided by the government as Supply then is it all taxable Supply that was the question so for the purpose of for the purpose of GST I'm classifying the activity I'm saying that broadly we can classify the activities into two categories one is Welfare Services another one is Commercial Services if the service provided by if the service provided by government is Welfare Services the recipient the one the beneficiary of the services would most likely be public now when the public is receiving Services I should give exemption because I should not have more cost that is passed on to the public but they did not give exemption of the government services to public in three different cases now that's one is an amendment but we need to understand in you know total for this first one postal Department Services now you please understand postal Department some services are Exempted by another entry which means we have a code word for the Exempted Services of postal Department we call them as bipo we call them as bipo book post Inland letter post card ordinary post which is l than 10 G except these four all other services by postal departments are taxable is it taxable under RCM or fcm it is taxable under fcm because I cannot ask public to pay tax under RCM second service in relation to vessel or aircraft in the airports is taxable under fcm it is taxable even if it's provided to public then transportation of goods or passengers is also taxable in some cases some mother entry gives exemptions like for example in Railways whatever Services provided by Railways is taxable under fcm it is not taxable under RCM now some Services of Railways are Exempted like and other than AC and first class you know Railway tickets are given exemption okay only AC tickets and first class tickets are taxable similarly Indian Railway will have so much of reeven advertising Revenue renting of space Revenue a lot of other Revenue that comes in other than tickets none of them are Exempted all of them are taxable but all of them are taxable under fcm not RCM because Ministry of Railways is a government Department still it is taxable under fcm is the understanding then please note these three services that I've listed here that is Services by postal Department Ministry of Railways vessel and aircraft Transportation these are taxable under fcm even if it is received by business entity that's the second Branch they said government can provide Commercial Services giving licenses mining license that license this license all the licenses that is given by the government to business entities are taxable but taxable under RCM but these three services received by business entities which are these three postal Department Railways vessel and aircraft transportation of goods or passengers these received by business entities are taxed under fcm that's what we have written here these three services are taxable under fcm even if it is received by a business entity is it clear to all of you can I have a quick yes on the chat box everyone next is renting so I'm going to give you one single chart which consolidates everything and I wanted I told you at the time of regular session and workout session that you'll have to remember this chart and every time there is a rental question go to this chart and then get the answer all right so firstly it says renting of immobile property can be of two types there could be commercial property there could be residential property right now commercial properties are always taxable please remember the moment the question talks about commercial property it's a very important area because lot of questions are being tested in this particular area like examiner favorite so if there is renting of immobile property and if it's a commercial property always taxable but if it's a residential property it's sometime taxable sometimes not taxable now if I give a commercial property on rent I have to ask the question who's the owner of the property or who's the person giving the property on rent okay if the person who's giving the property on rent is government local Authority Parliament SLS State Legislature court or tribunal if the one who is giving the property owned rent is any of these people then I have to ask the question who's the recipient if the recipient is registered it is taxed under RCM if the recipient is unregistered it is taxed under fcm why it is always taxable then if the recipient if the supplier the one the one who's owning the property is not government or local Authority Parliament State Legislature court or tribunal then it is always taxed under fcm but it's always taxable the question is only rcmr fcmr okay then what if the property in the question is a residential property if the property in the question is a residential property the supplier can be any person the recipient I have to ask whether supplier can be any person means supplier can be registered unregistered whatever it is now we have to ask the question who's the recipient if the recipient is also unregistered person like you and I we take a residential property on rent a house on rent a flat on R it is Exempted from GST however if the recipient is a registered person it is taxable but it is taxable under RCM the recipient will have to pay taxes okay then note there's a there's a question that there's a confusion that happens if the so proprietor who having a pan number and that that pan number is having a GST number he's also taking a residential property for his personal purpose will I have to pay tax under RCM for that also answer is no if the sole proprietor who registered person re receives renting of residential dwelling for personal purpose Mr Raju is taking a house he's having his own businesses in his pan but he's taking a house for his family to stay will be Exempted not a business expense is it clear to all of you can I have a quick yes on the chat box now very important one small business entity exemption is available even for government let's read it as per notification 12 by 2017 again exemption notification which says Services provided by government or local authority to a business entity whose aggregate turnover in the pre previous Financial year is less than threshold limit for registration is exempt from GST what did we see this small business entity exemptions are there in two places one is for legal another one is for government but the small business entity exemption is not applicable it is not applicable for the fcm cases and renting of of immobile property these are not applicable in that cases so I'm going to run you through an example question because it's little confusing for people generally and if they ask a question it could be a bumb question for most of you Kerala government has given mining license to following business entities comment whether GST is payable in such cases if yes who is liable to pay GST number one ulccs contractor received mining licenses and paid 2 CR to Kera government for the same ulccs turnover in the preceding year is 500 cres not a small business entity so when government is providing services to a business entity it's taxed under RCM here ulccs contractor will pay tax under RCM question number 2 a Mr ashik received mining license for 10 lakh Mr ashik has an aggregate turnover of 15 lakh in Kerala for the proceeding Financial year is ashik a small business entity yes whether ashik receiving services from government for mining licenses taxable no a small business entity exemption can be availed by ashik would your answer be different if Mr ashik has obtained voluntary registration no because we have said small business entity exemption is applicable even if they have taken voluntary registration look at the third case Kerala government also provided services in relation to vessel to ABC Partners LLP an unregistered person having turnover of 5 lakh for 50,000 would it be taxable yes why because a service relating to vessel is taxed under fcm so whatever is taxed under fcm will not be eligible for small business entity exemption that is not there for fcm cases including immovable property renting I hope that is clear okay next there are two more cases that we can learn together one is a music composer photographer or artist okay which are all creators they do temporary transfer or permitting the use or enjoyment of copyright relating to original dramatic musical or artistic work to a music company producer or the like it is the music company or the producer who has to pay tax under RCM music company will be working with so many composers so RCM is applicable for their royalty received similarly when an author is writing Book for a publisher and receiving royalty it is the publisher who has to pay taxes but author is given an option to pay tax under fcm like GTA but if they the author is going for fcm what is the benefit author can take input tax credit on their Inver Supply taxes paid number two there are condition to be satisfied like author has to give a declaration that they want to go for fcm they cannot withdraw fcm from one year from the time of exercising this option look at Reserve Bank of India this even Reserve Bank of India can be put it into a question earlier RBI Services used to be Exempted now Services provided by RBI is taxable when they provide services to Banks so anybody providing services to RBI is also taxable so we can conclude in summary you can see here the summary Services provided by and to RBI both of them are now taxable however one Services provided to RBI will be taxed under RCM RBI will have to pay tax as a recipient what is that service it is overseeing Committee Member of RBI providing services to Reserve Bank of India we said overseeing committee members are very similar to Independent directors they come attend some meetings give consultancy and get a sitting fee and that is taxed under RCM by Reserve Bank of India they can create a question clubbing all of this we have done a question during our workouts and even in classes on on top of this now security here we can Club another topic and then try to have better understanding as well that is lender of a security is lending the security to the borrower of security it is a borrower who will have to pay tax on the security lending charges I've created a new summary for Securities as well um onto the screen everyone disposal of securities facilitating transaction Securities and lending of security these are the three transactions that are generally tested in the exam what do you mean by disposal of security that is sale and purchase of Securities this is neither Goods nor services not a supply nor GST however facilitating transaction in Securities what do you mean by facilitating transaction in Securities like the stock broker letting people or helping people to buy and sell stock by paying a brokerage so the activity of stock broker by way of facilitating transaction in security is treated as a service who liable to pay taxes who will collect taxes it is fcm stock broker will collect and then pay to the government third transaction is lending of security I'm not giving or disposing the security I'm just lending it for some time getting it back afterwards this is also treated as a service example would be a high net worth individual lending stock to a broker for a charge now this charge is taxable but it'll be the recipient of the Securities Lending Service who has to pay tax under RCM next is Security Services this is a conditional RCM it says any person other than body corporate when they provide security services what do you mean by Security Services it means supply of security Personnel to a registered person located in taxable territory other than government or local Authority governmental agency registered only for paying TDS under section 51 number two a person registered under Section 10 that is composition Levy scheme will be taxed under RC which means that supplier has to be an a person other than body corporate recipient needs to be registered what service they providing providing security Personnel would be taxed under RCM but if the registered person is registered only for TDS or they are registered and but opted for CLS in both of these cases it will not be taxed under RCM it will be taxed under fcm this is another understanding then look at the last RCM cases that we have to discuss it's a very important case there are multiple Provisions that you need to understand here first of all it's a conditional RCM okay let's read it from the screen or from your book very carefully any person other than body corporate supplier should not not be a body corporate not be a company who supplies service to a body corporate so the recipient has to be a body corporate so first condition supply not a body corporate recipient is the body corporate what service service by way of renting of Motor Vehicle designed to carry passengers which means a car a bus so something that is designed to carry passengers is given on rent and the supplier who's giving it on rent is not charging 12% GST and then availing full credit then recipient has to pay tax under RCM so three condition to be satisfied there we have in after couple of pages we have that return return again as a detail understanding okay these are the three things that we have circular clarification which says RCM shall be applicable only if three conditions are satisfied number one supplier is not AO corporate CPN is a body corporate third condition second one renting of Motor Vehicle where cost of fuel is included and does not build 12% they're under 5% how do we conclude this we need to understand all the related Provisions so I have listed all the related provision and I'm going to give you full understanding look at this there are five things that you need to understand relating to renting of Motor Vehicle I'm giving you full understanding of it number one what is the difference between renting and transportation number two what is RCM when will I have RCM applicable number three is there any exemption on renting number four what about the ITC of whatever GST I paid on renting can I take the input tax credit number five what is the RCM tax liability when will I have to pay RCM liability okay these are the questions that we have to address first what's the difference between renting and what's the difference between renting and transportation look at this renting of Motor Vehicle the focus is on the vehicle the recipient is free to use I'm taking a vehicle for one full day I can decide from where to where it has to go that is called as renting but transportation means it is it is for a predetermined schedule for a predetermined route similarly Goods transportation and goods vehicle renting are also different Goods transportation again is focus on taking goods from point A to point B but renting of goods vehicle is the recipient can use the vehicle as and when they like okay so next question is when will I have RCM applicable on renting option number one option number two you can see it on the screen which means what somebody who's into renting business renting of motor vehicle business where cost of fuel is included and it is designed to carry passengers they have two rates to choose from they can either go for 12% or they can go for 5% 12% rate will be applicable when 12% rate is applicable they will be eligible to the one who is giving vehicle on rent will be eligible to take full input tax credit on their in Supply then if they are if they are under 12 per RCM is not the question so the one who is giving the vehicle on rent will have to pay tax under fcm it will always be fcm only but if they did not go for fcm which means that they are under 5 percentage with restricted ITC that they're looking at then I have to ask the question he supplier are you a body corporate if the supplier is body corporate and then a clean case of fcm at 5% but what if the supplier is not a body corporate then I have to check one more condition and satisfy for RCM that is recipient is also a body corporator or not a body corporator suppose recipient is not a body corporator again fcm 5% will come because supper has should not be a body corporate recipient should be a body corporate they think body corporate is an organized entity I'll be able to collect taxes from them under RCM if the supplier is not a body corporate and the Cent is a body corporate then RCM is applicable what if supplier is not a body corate recipient is also not a body corate but they're under 5% fcm 5% supplier will pay the recipient is also a body corporate supplier is also a body corporate also under fcm that's why you said supplier body corporate fcm but supplier is not a body corporate recipient is a body corporate it will be taxed under RCM 5% third thing sometimes when you give your vehicle on rent or vehicle on uh hire the GST itself is Exempted what kind of vehicle is that three passenger vehicle one Goods vehicle renting is Exempted number one motor vehicle for more than 12 passengers given to State transport undertaking like srtc tnstc Etc it could be any type of vehicle EV petrol diesel CNG anything it will all be Exempted giving an electric vehicle electrically operated vehicle to local Authority that is also Exempted then vehicle given to someone who is transporting student staff faculty to preschool till higher secondary is also Exempted if somebody is doing transportation of ssf student staff faculty to school till High secondary is Exempted whatever they collect if they take a vehicle on rent and they pay some money amount to them that is also Exempted then Goods transport vehicle given to GTA is Exempted a lot of people forget that Goods transport vehicle given to GT is Exempted I've seen lot of wrong answers in the exam please remember for this exam if you see that Mr Raju is giving five truck to Agarwal GTA it is Exempted GTA taking trucks on rent is Exempted please note say there's a blocked credit or ineligible credit concept that we have we said renting leasing hiring of Motor Vehicle vessel or aircraft for which ITC is not available on purchase will be a block to credit we'll try to understand what it is see look at three vehicles that I have listed passenger vehicle with less than 13% capacity number two vessel like boat aircraft like know private jet if the companies or if the business entities are purchasing this by giving their GST number what a car less than 133% a boat or a aircraft if the companies purchase there will not be any credit available to the company these three items these three products or these three Inver supplies if they instead of buying if they take it on lease or higher that will also be that will also be not available as input tax credit that's the second one motor vehicle vessel or aircraft for which similarly no ITC oner registered person takes these on rent or lease or hire that is not available as ITC but anything other than this motor vehicle vessel or aircraft for which ITC is allowed like Goods vehicle is ITC allowed when you purchase in such kind of vehicle if they take it on rent also you will get ITC available okay next time of supply for recipient of services so how do I fix time of Supply time of Supply in GST is discussed in cgst act what are the sections for time of Supply that we have we have section 12 we have section 13 section 12 talks about how do I determine time of supply for goods and 13 for time of supply for service in section in section 13 subsection 3 subsection 2 talks about fcm subsection 3 talks about RCM it says hey recipient of service how do you determine what is your time of Supply it says date of payment or 61st day from date of invoice whichever is earlier is your time of Supply next month 20th next month 20th will be the due date of deposit of GST to the government now I'm going to give you one example I'll recap an example which will give you full clarity on all of these areas look at this example very carefully say infosis wanted to take one car on rent enforces has taken car own rent from Mr Raju the supplier Raju did not go for 12% question number one who is liable to pay GST first Raju did not go for 12% is Raju a person other than body corporate yes Mr Raju means is's an individual number two is the recipient of body corporate yes enforces is a body corporate so what is what is applicable RCM is applicable enforces will have to pay tax under RCM at 5% understanding then question number two what is the time of supply for enforces we said date of payment when did enforces make the payment to Raju when did they make the payment to Raju 15th January 2024 is the date of payment or 61st day from date of invoice when did Raju issue the invoice on 1st January 1st January means January has 30 days left February 28 days that makes it 58 61st Day means 3rd of March compared with 15th of January right which is the earlier date 15th of January so did they make the payment within 60 days yes then the date of payment would be the time of Supply so enforces will will have to consider the service to be received in the month of January itself on or before 20th of February they will have to pay taxes so time of Supply is 15 JN due date is 20th of February they have to pay 5% GST on 1 lakh which is 5,000 rupees understanding question number three so infosis in um for the month of January will pay this particular taxes to the government because the time of Supply is J so they'll pay on all before 20th of February so while filing the gstr 3 before January can infosis take the input tax credit of this can enforces take the input tax credit no because this is a five seater car if you purchase this car no credit similarly if you take this on rent even if you pay tax under RCM there is no credit that is available are you guys understanding this is it clear everyone let's look at N9 subsection 4 now N9 subsection 4 says my supplier is unregistered recipient is registered in notified cases it is the recipient who will pay tax under RCM but this is not a general case it is only on one notified cases it will be applicable what is that notified case they say in real estate sector now the tax rate is reduced from 18 or 12 percentage to 1 per or 5 percentage so so for the the real estate development ERS government said hey de real estate developers because you don't have ITC there's a very high chance that you will purchase from unregistered fellows so I'm putting a condition now that everybody who is doing a real estate residential project 80% of your input and input service has to be from a registered person out of 100 crores 80 crores has to be from a registered person so you would have paid the taxes you would not have taken ITC what if my purchase is only 70% from a registered person on what whatever shortfall you have you pay tax under RCM who the developer you pay tax under RCM and then don't take credit this is what they have fixing as a criteria are you guys understanding this that is N9 subsection 4 okay now before going to N9 subsection um five I know that some of you guys might be waiting here from 2:00 I will give you a first a small break 10 15 minutes break we can take now um I think should all take a know a small um break and then come back you can tell your friends whoever wants to join I'll be talking about tax collected at source now okay it's an important area of discussion I'll talk about TCS after we come back from the break I'll talk about uh TCS I will talk about N9 subsection 5 and I'll talk about composition Levy scheme all right okay e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e welcome back everyone for is the audio and video clear for can you please confirm me the audio and the video we can start off is the for okay so let's get started there are four kind of e-commerce operators e-commerce operators are defined as a person who owns operates or manages an electronic or digital facility or platform for the purpose of e-commerce that's all the definition is anybody who's buying and selling or providing services online will be called as electronic Commerce operator okay so electronic Commerce operator TCS provision was not applicable in the examination so far and this will be the first examination where you will be writing answers on this so you have to to be having full clarity on the basics of e-commerce operator they can ask questions which will Club you something from amendments which will Club you something relating to um e-commerce operated Provisions for TCS they can ask you something relating to 9 subsection 5 so I can precisely divide the e-commerce operators into four different categories I can rather tell that there could be four type of e-commerce operators okay now for for the purpose of GST we classify e-commerce operators into four categories the first category is the e-commerce operator who sells third party product or goods or services through their platform they collect the money somebody else is sending you the goods on behalf of them like Amazon right there there are sellers listed in Amazon there are buyers listed in Amazon these two people come together and they do a transaction inside Amazon now in G this kind of platforms will have a provision called as tax collected at source that is applicable second type of e-commerce operator are d2c platforms like your Amazon like your max online like your LP online or a lot of companies who are selling their own product online like tax cool which is my you know um give to the students in terms of uh you know providing classes through one online so you go to tax school.in you can actually go and Avail Services there you can get classes there so these are direct sites tax cool does not have others listing their know classes inside that everybody is selling the classes through them so it is it is e-commerce operators who are selling their own product or purchase and sell the product these kind of e-commerce operator will not have any TCS provision applicable because they don't have any tax collected at source that they need to do there is no payment that they make say for example LP if they're selling their product online LP will not collect consideration and then pay to somebody LP will keep the consideration with themselves right so that is the second category third category who are listing the third party product but will not sell it through their platform e-commerce operator not collecting consideration and only connects buying buyer and seller like oilx they'll also have normal provision applicable now the fourth category is out of the first category which means like Amazon kind of e-commerce operator some people we handpick we select and tell them hey in some cases you pay full taxes to the government you don't do TCS you pay the entire taxes all the GST provision will be applicable for them they are given on nine subsection 5 there are four cases of services provided through e-commerce operator government feels like the only option to collect taxes will be to collect access from e-commerce operator itself now first let's look at so our discussion is only the first category and the fourth category that's it second and third category of normal provision applicable let's look at the tax what is tax collected at source under Section 52 again please remember 51 is TDS 52 is TCS so first TDS comes then TCS comes 51 52 similarly their returns are also like that gstr 7 will be under TDS and gstr 8 is for TCS the due date and everything will become dto same look at this transaction here I've given you a very basic understanding I'll give you an example to get you an understanding on what is tax collected at source say this is company called atur atomberg is selling their fans through Amazon suppose atur is selling a lot of fans through their 5,000 fans they sold through Amazon now Amazon will be called as e-commerce operator atomberg is the original supplier and the customers will be the final consumers okay now each fan is costing 5,000 ,000 R not 5,000 fans each fan is costing 5,000 rupes now how the transaction would work Amazon will show the customer that there is a bill of 5,000 plus say 12% GST on fan which is 5,000 plus 600 rupes GST so Amazon will collect from the customer 5,600 will Amazon be required to pay the entire 600 rupees GST in this case no the liability to pay GST remains with atur the original supplier because he should be able to take input tax credit now Amazon what is that Amazon will do then Amazon will have will the Amazon pay the entire 5,600 to atber no Amazon will have to deposit 1 percentage on net value of taxable supply for that month 1 percentage will be deposited as TCS which means on 5,000 rupees 1 percentage would be how much 50 rupees will have to be deducted from 5,600 and this 50 rupees will be deposited by Amazon against the GST number of atomberg as TCS then how much will be paid to atomberg 5550 minus the commission of Amazon suppose Amazon takes say 2% commission plus GST so 100 rupees Plus uh 18 rupes 118 will be taken as the income for the Amazon and 5,432 will be the net that will be paid to atomberg this is the understanding of TCS now TCS to be done not on transaction to transaction level TCS is generally done TCS is generally done on on a monthly basis now let's look at the notes so if you go to our notes you will find TCS to be there in the last one of the last chapters we'll find it after payment go to page number 188 in your chart notes you will find this particular topic for okay so I hope you guys have uh you know go to the page now look at this now Amazon will pay what is the value of net Supply Plus taxes minus TCS this TCS will be deposited against the GST number of supplier supplier will find it in their electronic cash Ledger this is the understanding of that provision now this is done on a monthly basis look at these few points of very important for you to answer uh questions in the examination number one it is 1 percentage igst 5% cgst and 5% sgst as the TCS that's the rate of TCS that they have to do and TCS is applicable on what it is applicable on net value of taxable Supply look at these terms are very important for us in value chapter we talk about transaction value here we're talking about net value of taxable Supply what do you mean by net Val value of taxable Supply it is nothing but aggregate value of taxable supplies minus taxable supplies return to the supplier okay in the end in the end we can do one you know while I'm doing registration in the next session I will do a question which connects all of this okay very important question I've drafted one net value of taxable Supply means aggregate value of taxable supplies minus taxable supplies returned now Does it include taxes no and aggregate value only we're talking about only taxable Supply component and minus whatever amount that is returned for that particular month on that I will have to deduct 1 percentage or uh do a 1 percentage TCS and then deposit what if in a month I have so much of returns of the previous month and very less number of sale in that net value of taxable supply for that customer Amazon will have to do this each customer wise for that sorry each customer in the sense each vendor wise each person who is registered as seller in Amazon they have to do this computation for each of them if you look at if the net value of taxable supply for a particular month is negative there is no TCS to be done there is no carry forward that is allowed okay okay I have a question here so let's look at the question question also considering those amendments I can just touch upon all of that using this question people who are not having this question with you would ideally go and take a screenshot of this so that you can refer this later Mr Raju runs an online platform which list various cosmetic products of various customers he provides you details of Supply made by two enlisted cosmetic companies through his platform mylam as follows for 3 months he has given what is the supply that is made by two vendors through his platform an e-commerce operator one is Cosmo private limited and another one is organic private limited for April May June there is also return I have given that information as well out of the sale of organic private limited for April 50,000 was exempt product okay so we need to compute what net value of taxable Supply that only includes taxable Supply right the first question is that who is running this platform igam Mr Raju question number one is Mr Raju required to obtain registration the answer is yes now look at I'll read the answer for you Mr Raju is liable for TCS and he's supplying third party product through his platform no as he is an e-commerce operator supplying third party product through his platform therefore he is required to obtain compulsory registration under section 25 everyone who is liable for TCS will have what registration section 24 registration question number two compute TCS applicable for Raju on the supply above for each month how on what value TCS is computed on net value so for April Cosmo has a a sale of 5 lakh return of 50,000 so net value is 4 lakh 50,000 into 1 percentage is 4, 500 as TCS are you understanding second case for April what is for organic private limited out of 1 lakh sale in by organic private limited if you look at 50,000 is exempt so organic private limited will have only 50,000 as taxable Supply minus the return is 2 lakh so it is a negative value that we get do I have to do any TCS no I don't have to do any TCS for that uh April month for organic private limited for May month it is 1 lakh minus 1 lh50 for Cosmo again no TCS because the net value of taxable Supply is negative for June it is 10 lakus 1 lakh 9 lakh into 1 percentage is 9,000 assuming it is igst then for April uh for May for organic it is 6 lakh - 50,000 550,000 uh into 1% is 5 5,500 for June it is 2 lakus 20,000 1 lak 180,000 into 1 per is 1,800 look at the note that I've written if the net value of taxable Supply is negative no TCS is applicable no carry forward is also allowed look let's look at the third question can Raju use ITC to pay TCS no Raju is the eCommerce operator e-commerce operator cannot use ITC to pay this because this is not a payment of outward tax tax liability for them their outward suppli is platform charges and they will they can only use ITC to set off uh against the outward tax liability not on TCS payment so TCS payment needs to be paid by cash which means electronic cash Ledger look at the third question answer there tax payable as TCS cannot be paid by utilizing input tax credit it needs to be paid by cash that is electronic cash Ledger fourth question is an amendment very important one they can test you a new startup named Lia private limited who is unregistered wants to supply their product through mlam can they Supply through mlam without registration if yes what is the requirement what are the requirements for mlam so they're trying to tell you that there's an unregistered person who supplying Goods through an e-commerce operator earlier there was a restriction on this they said everybody who supplying Goods through e-commerce operator need operator needs to take compulsory registration now the latest Amendment relaxes that provision and says that you can supply through e-commerce operator without compulsory registration but you need to go take an enrollment number from the GST portal no need to take GST number no need to pay GST also but you need to be enrolled in GST portal second one the e-commerce operator should ensure that they're not making any Interstate Supply let's look at that Provisions answer as well an unregistered supplier of goods is permitted to supply Goods through e-commerce operator hence Lia private limited can supply Goods through mlam without registration however mlam needs to ensure number one they are not making Interstate Supply number two they have pan and enrollment number from GST portal mlam need not do T TCS for Supply by unregistered person however needs to report the same in gstr why they are not required to do uh TCS for unregistered Supply through them because they don't have a GST number unregistered Supply after doing TCS against what number they will deposit this amount is the question that we will have now going back to 9 subsection 5 I told you not in all cases it is TCS that is applicable to e-commerce operator in some cases the entire tax needs to be paid by them page number 43 or similar pages in Char chapter you will find notified cases of 9 subsection 5 so I want you to go there and then ensure that you have a look at this shall we okay there are four cases there are four cases in these four cases the entire tax needs to be paid by e-commerce operator they don't they're not doing TCS they're paying entire taxes let's look at that number one Services by way of transportation of passengers by radio taxi motor cab Maxi cab and motorcycle omnius or any other motor vehicle except omnius by a company carefully listen to me here they're saying that if there is transportation of passengers booked by a person through an Ecom operator transportation of passengers booked by a customer through an eCommerce what ecommer operator are we talking about Uber Olaf Rapido and all those people you book Even book uh you know uh your make my trade PTM all of them have the transportation of Passenger being booked through them and even uh you have um buses are being booked through Red Bus and all that okay so this saying that if there is transportation of Passenger provided by an e-commerce operator the entire tax needs to be paid by e-commerce operator it is understandable because the actual supplier could be like autoa drivers the taxi drivers it's very difficult to collect from them there's no point in paying 1 percentage to them and all that so they it entire tax if you book an Uber Uber pays the entire tax to the GST department so 9 subsection 5 is applicable but they've made an amendment there they said in an N bus if the bus is owned by a company only TCS needs to be done by the e-commerce operator but if the bus is owned by an individual other than a company it needs to be under 9 subsection 5 entire tax needs to be deposited by e-commerce operator second case where entire tax needs to be deposited by e-commerce operator is Services by way of accommodation in hotel Gest house in Camp clubs campsite Etc but it is a conditional case what do you mean by conditional case it says actual supplier is not liable for registration under Section 22 of cgst act so they're saying that accommodation Services accommodation Services is provided by a hotel which is unregistered then e-commerce operator you pay the entire taxes if the hotel is registered let the hotel pay the taxes you pay only TCS third case Services by way of housekeeping such as Plumping carpenting Etc here also it's a conditional one who does this carpenting housekeeping services there are companies like Urban company Jobo Etc now they're saying that in these cases also it will be under 95 or e-commerce operator has to pay the entire GST to the government only if the actual supplier is not liable for registration under Section 22 then fourth case supply of Resturant Services other than the services supplied by restaurant eating joints located in specified premises now but the fourth cases that we have here is like the first case there's no condition they're saying if you book restaurant Services which means if you book food okay all your food ordering app zato Wiggy Etc if you order food through zomato Wiggy Etc the entire tax needs to be paid by zato swii itself they saying that this will make the collection much better and anywh restaurants do not have any ITC available so let me bring you know nine subsection five in this cases now let's go ahead and then look at this with an example sometimes it might be little difficult for you to understand if you have not gone through this or is coming from a previous batch of mine so to help you guys I will put out the cas study here okay I'm summarizing my e-commerce operator provision here Number One Transportation of passengers the actual supplier can be registered or unregistered they are providing transportation services through an e-commerce operator to the customer customer will pay GST also while paying the money to the e-commerce operator e-commerce operator you have to pay full tax to the government because it is notified under 9 whether e-commerce operator has to do again TCS no need to do TCS because full tax is paid by e-commerce operator itself second case accommodation Services see Taj Hotel which is a registered supplier is providing accommodation Services through an e-commerce operator like make my trip now the customer will pay GST to the make my trip or the e-commerce operator e-commerce operator will only do TCS Because the actual supplier is registered so the liability to pay tax here lies with Taj Hotel because they are a registered person they can take ITC of whatever they have while paying this particular taxes however an unregistered home stay is registered with Airbnb and provides accommodation to customer the customer will pay GST to Airbnb Airbnb will have to pay full GST to the government under 95 Because the actual supplier which is the home stay is not registered same with housekeeping if there's an unregistered ual supplier a carpenter who is coming to your house and then doing the work through Urban company and you're paying the uh charges with the GST to Urban company Urban company will have to pay entire taxes to the government not the actual supplier however if there is a cleaning agency which has a GST number is providing their services through a platform called as joob boy and to a customer it will be the platform called Jo boy who will have to do only TCS and that or the full taxes needs to be paid by cleaning agency itself because they are registered so in second case and third case 95 will be applicable only if 95 will be applicable only if the actual supplier only if the actual supplier is not liable for registration fourth case here look at a restaurant a restaurant can be registered or unregistered when they provide services when they provide services through swiggy to customer they supplying food through swiggy to customer or zomato to customer it is swiy zato has to pay entire taxes whether this uh you know whether the restaurant is registered or unregistered this is to just ensure that the collection is better all other cases which means that other than these four notified cases all other cases of supply of goods or services through e-commerce operator will be subject to TCS not 9 subsection 5 only notified cases will come under 9 subsection 5 is it clear to all of you I request if this is clear all of you please come to the chat box and then put a yes or I understood something on the you know comment section so that I I will know that you guys are with me and then learning well now whenever I'm asking e-commerce operator to pay taxes or uh to do TCS I'm expecting them to be in India right but e-commerce operator since this is a completely online this is completely online these people can be located anywhere in the world so they said if you are in taxable territory if you are in taxable territory you pay taxes to the government so e-commerce operator is liable to pay taxes what if the e-commerce operator has no physical presence then I have to ask like uber do you have a representative office then that representative office is liable to pay taxes what if there is no physical persons no representative office they're saying that you have to appoint a person for paying taxes okay this is a requirement that you have so that concludes our discussion on um eCommerce operator now we can go to composition Levy scheme okay composition ly scheme for me also it's very simple to um go ahead and then recap you the entire provision okay so there are five things that that you have to learn in e-commerce operator so when you recap you have to ensure that in composition Lev scheme you remember five things number one if you go for composition ly scheme what's your advantage number two is it available to everyone what's your eligibility criteria number three is there anybody not eligible there is amendment here number four okay number number three is actually conditions okay let's swap it what you what if you go for this composition L scheme what are the condition that you need to satisfy what are the procedures that you have to follow if you go for composition L scheme together with this we have to understand something called as marginal survey scheme the then we are looking into an additional scheme called as 10 to Capital a we'll go and then look at what is 10 to Capital a means okay so there is an additional concessional scheme for services the moment you read composition ly scheme you you can get computational question from composition ly scheme so ensure that you are fully understanding CLS and every examination they ask one question that's their pattern now composition L scheme the moment you hear the term scheme I used to uh you know ask my students to remember the term option if you opt for the scheme you get certain advantages two advantages one is your return structure is a little more easier then second big Advantage is that you have you get to pay tax at a lower rate now Easy Tax compliances normally normally what is the periodicity in which a person would pay taxes under GST it is monthly basis on or before 20th of subsequent month but if they are if if you are under composition lovey scheme you don't have to pay taxes on monthly basis you can pay it on a quarterly basis when will you have to pay taxes you have to pay taxes onor before 18th of subsequent month from end of the quarter then this is done using a state statement called as CMP 08 please note CMP 08 is not a return return will have the last letter gstr now there is a return wherein you'll have to fill and then give information about your payment which is only a financial year return that is called as gstr 4 okay so you have CMP 08 a quarterly statement and you have gstr 4 which is an annual or financial return so which which means if you're under composition Levy scheme this is your routine compliances quarter one you make the payment on 18th of July Quarter Two you make the payment on 18th of October three on 18 gen four on 18 April the financial year is over by 30th of April you file gstr for but the biggest Advantage is this you get to pay tax at a lower rate what is this lower rate if you are a manufacturer your tax rate is only 1 percentage on turnover in a state or Union territory if you are a Trader it is only 1 percentage on what turnover taxable turnover now we have a word called taxable turnover here then if you're a restaurant you have 5% GST that is applicable on the turnover okay so the tax rate has been reduced from normally 18 to 20 8 percentage to Mere 1 percentage if you are under composition ly scheme then the next question comes in so please remember for Trader it is taxable turnover they can test you with that then we have another question can everybody go for this and then reduce their tax rate no there is an eligibility criteria that is point number two who's eligible for composition Levy scheme now we have to look at smaller suppliers who will be eligible for composition l scheme now who is a smaller supplier said a smaller supplier means somebody who's having a turnover below certain threshold limit now this limit is again not same for all the states for the purpose of the limit we are classifying the states into two categories one is General category another one is special category unlike we saying um um in registration we had three category here we have only two category now if you're in the general category your limit is 1. 5 crores what is the meaning of this if your last year turnover is less than 1.5 crores you can opt for CLS for this financial year similarly in this financial year after opting if you cross 1.5 crores you have to come out of composition Lev scheme however in satanam three states what are the states that we have in satanam 3 sikim arunachal Pradesh tripura nagaland utarak meala manip misam these states if you registered your limit applicable for composition Levy scheme is not an agregate turnover of 1.5 crores it is only 75 lakhs now aggregate turnover is a turnover on all India basis for a single pan you have to take the all India turnover while Computing aggregate turnover you have to include taxable Supply exam supplies even non- taxable Supply export Interstate Supply but you don't have to include in aggregate turnover GST amount your purchase amount will never be part of aggregate turnover even if it's taxed under RCM now RCM turnover will not be considered to be a turnover of the recipient will be considered to be the turnover of the supplier okay this is a very basic understanding then we have an understanding on interest interest income that is interest from loan is generally an exempt service aggregate turnover includes exam Supply also but to check something in composition ly scheme we will never consider interest to be part of the computation okay then there was a question on whether RCM and composition ly scheme has any connection suppose I'm registered I opted for composition ly scheme and I received a service or goods from somebody which is subject to RCM will RCM be applicable able even to a recipient under CLS they it yes 9394 will be applicable to CLS unless specifically excluded unless specifically excluded 93 and 94 will be equally applicable to CLS as well is there any places where we excluded CLS yes in Security Services we said if the recipient is a composition V scheme person it will not be taxed under RCM it will be taxable under fcm so condition number one uh Point number one advantages Point number two conditions uh Point number two eligibility criteria Point number three conditions or disadvantages if you go for CLS what are the disadvantages that you have number one supplier cannot collect tax on Supply from recipient you will not be able to collect that one percentage from the customer say I'm under composition ly scheme I making supply for 1,000 rupees normally when I make Supply if I'm a registered person I will charge from the customer 1,000 plus GST but if you are under CLS you can only collect th000 from your profit you have to pay this 1 percentage government says I'm reducing your tax rate don't collect that also from the customer number two because they reducing my tax rate government says that my Revenue loss also I have to I have to restrict so the the government says that supplier if you are under composition Levy scheme you're not eligible for ITC on inward Supply the CLS person will not be able to take ITC on in Supply number three supplier is not allowed to make Interstate outward Supply they're saying A supplier you're not allowed to make any Interstate outward Supply they're saying that the person who is under CLS can only make Supply within the state I cannot ask another state to compensate the losses but if I'm under composition ly scheme can I purchase from another state yes Interstate invert Supply is not a problem because you don't have a tax rate reduction in invert Supply what is not allowed outward Supply interest rate is not allowed similarly I have two branches one branch I want CLS other Branch I want normal scheme can I do that no because the fourth condition says supplier cannot choose CS business segment or or vertical wise your choice is on what level it is on pan level okay supplier cannot choose CLS business segment or vertical wise the choice is for a pan level are you guys understanding this then look at the fourth Point here who cannot go for composition Lis SK they're saying that now we already have seen an eligibility criteria based on the threshold limit right now I'm telling you that some people some people cannot go for CLS even if their turnover is within the threshold limit these people are blocked from these people are blocked from opting for composition Levy scheme it used to be six set of people now you have two amendments there so now the people count is also increased seven set of people in that two amendments are there okay so who will not be eligible irrespective of their turnover for CLS number one casual taxable person casual taxable person will not be eligible for composition Levy scheme non-resident taxable person will not be eligible for composition Levy scheme now let's take a quick look at who a cashal taxable person who is a non-resident taxable person let me recap that particular discussion also for you now I'll I'll recap it by asking you questions I want answers on the chat box number one I'm asking about casual taxable person okay so you have to type the answers on the chat box question number one would be is a casual taxable person is a casual taxable person a resident in India yes he's a resident is he having business somewhere in India yes he's having business somewhere in India number three is he coming to a new state yes he's coming to a new state is he planning to do permanent business in the new state or occasional business in the new state occasional business in the new state in such cases this person will take a registration called as CTP registration in that new state in that new state is he eligible in that new state is he eligible to go for CLS no that a person who's having a CTP registration under his pan will not be allowed to go for composition L scheme a non-resident taxable person let me ask you the same set of questions for that first an nrtp we call them as nrtp nrtp is he a resident isier resident and an RTP is he a resident the answer is no an RTP is not a resident is he having any business anywhere in India now he's not having any business anywhere in India now is he planning to come to India to do business yes in India is he planning to come to do permanent business or occasional business he's planning to do occasional business now he will obtain what registration and RTP registration while obtaining an RTP registration in that state can you go for composition L scheme no CTP and RTP you people are not permanent in that state that state is not ready to take your losses you don't go for composition L scheme then person supplying Goods or service through e-commerce operator I mean I mean this is an amendment person supplying Goods or service through e-commerce operator they were not they were not eligible for composition Levy scheme now under this now they said hey somebody who is supplying Goods through e-commerce operator okay look at amendment number one here amendment number one person supplying Goods through e-commerce operator can now opt for composition Levy scheme why earlier the same Amendment we have seen in the registration we said a person who is supplying through eCommerce Goods through e-commerce operator e-commerce operator need not obtain registration they can just have an enrollment number but are these people registered yes they registered wanting to go for CLS earlier CLS was blocked because if you look at e-commerce operator they can sell anywhere in India so they said a e-commerce operator can you restrict these people from making Interstate Supply e-commerce operator said yes our technology so uh know so sophisticated now that we can let somebody to do inate somebody only to do interstate so says that okay see supplier of goods can now Supply through Amazon and flip cart the e-commerce operator provided e-commerce operator has capability to only let them do interestate or or capability to restrict them from making Interstate Supply because they're not supposed to make an interstate outward Supply right then fourth person who is not eligible fourth person who is not eligible is manufacturers please note I written in bracket not Traders which means the traders of following products are eligible for CLS but manufacturers are not who are those pan Masala tobacco ice cream we use a code word called as PTI fourth one erated Waters fifth one bricks and blocks now there are four type of bricks and blocks that we have list in there fly as bricks and flyash blocks and flyash aggregate bricks of fossil males of the similar cous Earth building bricks Earth and or roofing tiles if you're supplying or manufacturing any of this not Traders Traders can still opt which means I am running a small Shop grocery shop where I'm selling ice cream can I go for CLS yes you can because you're you're a Trader not a manufacturer but if you're a manufacturer of ice cream you will not be able to opt for CLS fifth Point person making non taxable Supply person making non- taxable Supply now there are two type of Supply where we term it as non- taxable Supply number one alhc what is alhc alcoholic liquor for human consumption second HP man highspeed diesel petrol motor Spirit Aviation turbine fuel natural gas if you're supplying only this say I'm running a petrol pump I'm also having engine oil so some taxable some non- taxable I want to register to pay tax on engine oil after registering I wanted to go for CLS you will not be able to because you are making non- taxable Supply government says if your component is non- taxable I don't want you to give I don't want to give you any uh special rate as such then sixth person they're saying in supplier of service other than restaurants nobody can opt for Sals in supply of service I repeat again there a lot of questions that they test on this in supply of service only restaurants in supply of service only restaurants will be able to go for composition lovey scheme nobody else similarly a person dealing in specified actionable claims is also so restricted from going for composition ly scheme because to make the online money gaming industry taxable the amendment that came from 1st October 2023 introduce a new word inside GST law called as specified actionable claims what is the word that we have specified actionable claims now actionable claims includes betting gambling Lottery Etc now they have added that list little longer what is that list now says it says there are six activities I want to call as specified actionable claims there's a very high chance that some Theory question or some questions of that sort will come from specified actionable claim my strong recommendation to all my all my dear students is that please remember the six specified actionable claims you will be able to write this in the examination very lightly what are those six specified actionable claims earlier one were only three that is betting gambling ly they've added three more casinos host raising online money gaming very interesting note is that online money gaming is actually considered to be an actionable claim okay money game like your uh dream 11 uh MPL Ramy Circle Etc now all these six items are called as actionable claims and surprisingly enough in GST actionable claims are they called as Goods or are they called as Services comment on the chat box everyone are they considered to be Goods or are they considered to be Services now they're considered to be Goods Goods includes every kind of movable property Goods includes actionable claims Goods includes growing crops or things attached to or forming part of the land which can be severed before the supply you guys understanding so actionable claims are Goods so there's a question if I'm supplying Goods I can go for composition Levy scheme right now do I want betting casinos gamling people to go for to go for composition Levy scheme no because these are Dem merited I have high rate applicable people will use this occasion to go for CLS and then escape from taxes so they said hey if you are a person dealing in specified actionable claim you're restricted or you're blocked from opting for composition Levy scheme is that crystal clear for all of you that is an additional point they can frame questions out of all of this next now we have have seen in we have seen a point inside our discussion on person not eligible the sixth point on the screen says what if you are a supplier of service only a restaurant will be allowed to opt for composition Levy scheme so which restricted a lot of them which restricted a large part of people who are having both goods and service and doing a small business from opting for composition Levy scheme what if I have 40 lakhs turnover of goods 2 lakh turnover of services will I be op to for able to opt for compostion ly scheme by this provision no because I'm having a small portion of service these people represented back to GST Council and said it's unfair if you don't give us compostion lovey scheme because our service is very trivial very small portion of services you guys understanding so what is that has what is that it has happened they said we will give a relaxation what is the relaxation that you have that's it if you are somebody who is eligible for composition L scheme otherwise which means you are supplier of goods being manufacturer or Trader if you're restaurant and you have one more service which is the reason why you're not able to opt for composition ly scheme the government says as per 101 provisor red with n to way if your other service is within a small limit you can still opt for composition ly scheme we call this limit as marginal service limit so what is that limit they said I want your service other than restaurant has to be a small service they said small service means it is higher of the following amount one is 10% of the turnover in a state in the proceeding Financial year or 5 lakh whichever is higher up to that you can have services and still go for composition ly scheme which means what I can put it like this up to to 50 lakhs of turnover up to a turnover of 50 lakhs you can have Services up to 5 lakh because 10% of 50 lakh is 5 lakh or 5 lakh whichever is higher 5 lakh will always be higher for turnover up to 50 lakhs if your turnover is beyond 50 lakhs your turnover is above 50 lakh you can provide 10% of services other than restaurants still go for composition ly scheme you carefully analyze this guys say my turnover is 80 lakhs I can have 8 lakh of service and still go for composition ly scheme and my entire 80 lakh will be subject to GST at 1% that's interesting note here okay now what if I have Education Services for 10 lakh and interest income which is 20 lakh interest is also an remuneration for providing loan services right they said for computing your value of services here don't include interest into your turn over that's also an interesting note that they have done so we can simply put it like this we can say that interest is basically not included in any computation that we do so this is what you have to carry for your examination interest on deposits or loans or advances so for interest it's an Exempted supply of services that's your first understanding what is the use of interest in Computing aggregate turnover for computing aggregate turnover of registration interest is included in aggregate turnover but for any computation in composition Levy scheme any computation which means the computation can be an aggregate turnover computation marginal service turnover computation interest is always excluded me give you one quick question so that you are well aware of an additional provision I want you to learn look at this guys Mr Raju in Kochi has multiple businesses one is mobile trading business taxable Goods fresh vegetables Exempted Goods preschool till higher secondary which is Exempted services and Lawn Services which is an also an exam service the turnover is 80 plus 60 + 10 + 8 but for the purpose of checking aggregate turnover for CLS eligibility what is not included 8 lakh interest is not included so my turnover is 80 + 60 + 10 which is 150 lakh Which is less than the threshold limit in the general category States now I have to also check because they have Services whether my services within the marginal service limit what is the marginal service limit here it is 10% of turnover which is 150 lakh into 10 percentage that is 15 lakh or 5 lakh whichever is higher 15 lakh will be higher now how much is my service here now Raju has two Services one is education service and another one is loan service but I don't have to include laan service again so my my service comparison would be on 10 lakh here so my limit is 50 I have only 10 lakh as my turnover so can I go for CLS yes now how much will be the tax payable if I had the same turnover maintained now if I'm a Trader I will pay 1 percentage on taxable turnover here the taxable turnover is only 80 lakh so my my tax payable would only be 80 lakh into 1% that is 80,000 so this kind of questions can also be a challenging question that can come into your examination now you tell me after all that uh who's still not eligible for composition Levy scheme in service somebody who's providing pure Services which means an an IT company a consultancy firm a CA firm these people a Saloon or a or a beauty paror these people are only providing Services they will still be restricted from going for composition ly scheme or somebody who's having Goods as well as service and the service portion is above the threshold limit that we discussed in marginal service say I have 50 lakh turnover 25 lakh service 25 lakh Goods will I be able to go for composition ly scheme absolutely no so these kind of people are not eligible to go for composition ly scheme so these people represented back and then the government came up with an additional scheme for them which we call as scheme under 10 to Capital a to small letter a is denoting a close in composition ly scheme wherein 1% tax rate is there 2 capital A is a subsection additionally inserted which is talking about a scheme for supply of services so look at this uh revision of the uh 102a first question that we ask is who is eligible for this a person who could not opt for CLS due to being supplier of service other than restaurants or supplier of goods or restaurant who's also having another service but that is beyond the limit of the services that we are disc discussing about these people can go for it's an option for them also they can go for a scheme called as 102a provided they satisfy one more additional condition what is the additional condition their previous year aggregate turnover has to be less than or equal to 50 lakhs if they go for this new scheme what is the advantages that they get do they have this 1 percentage tax rate no their tax rate is 6% which means 3% CG GST 3% GST for turnover only up to 50 lakhs for that year so from 1 April to the turnover becoming 50 lakhs they can go for this and then pay only 6% so Services average rate in GST is 18% getting reduced to 6% is still a benefit then look at this what is the condition if they go for the same condition as CLS CLS had put four conditions if you remember you cannot get the 6% from the customer you will will not be able to take ITC on your purchases you can't make any Interstate outward Supply you cannot choose this business vertical wise you have to either go for all the branches or go for no branches you cannot do this branch-wise then person not eligible there are certain people who are not eligible for this this is also the same list except for supplier of services for them only the gem is there which means C CP and seven people were there CTP nrtp person supplying service through e-commerce operator Goods can now then fourth one manufacturers of PTI and bricks and blocks person who supplying non- taxable Supply then the last one who is dealing in specified actionable claims these people are not eligible for composition Levy scheme for 1 percentage concessional rate they're also not eligible for 10 to a the 6 per concessional scheme either okay for both of them both of the cases they are blocked from going for that then there are special points Point number one is something very simple we know that interest or discount will not be included in aggregate turnover even here what if I go for the scheme in the same year in which I'm taking registration till I take registration there is no GST payable from the time I take registration to total turnover up to 50 lakhs I will end up paying concessional rate Beyond 50 lakhs I'll have to pay normal rate for this you might require a small explanation just to ensure that you are able to write the answers to a question look at this example on the screen Mr Raju is planning to start a saloon which is a supply of service normal rate for Saloon is 18% he's planning to start his Saloon on 1st July 2022 suppose he started his business on 1st July 2022 immediately he need not register because for supplier of services there is a threshold limit for registration that is threshold limit for registration that is 20 lakhs so Raju did his business up to 20 lakhs on till 31st of October no registrations or no GST now on while taking registration he cannot go for CLS but he can go for 102a because the additional condition is that previous year turnover has to be less than 50 lakhs this year only starting business is that condition is satisfied now the question that we have is can he take uh the 10 toway scheme and then go for another 50 lakhs at 6 per the answer is no your whatever turnover that is already done while you are unregistered 50 lakhs minus that that is the turnover that you can go for concessional rate which means 20 lakhs turnover is already done so another 30 L only you can do for concessional rate of 3% 3% cgst sgst they'll never be igst because they're not allowed to make any Interstate outward Supply then beyond 50 lakhs after 31st December it turnover exceeded 50 lakhs also then you'll end up paying the normal rate which is 9% and 9% so you can get questions like this where they'll ask you to compute what is the total GST for that year there is an unregistered period there's a concessional period there is a period which is having normal rate these used to be like a two three Mark questions um you know while they test you in the examination so please be aware of this now before I go into procedures I wanted to give you a quick recap on the documents so I want to discuss the documents that you need to understand so far first one there are three very important document that we have in GST one is a tax invoice another one is a delivery Chalan another one is a bill of Supply tax invoice is issued by a registered person when tax is charged on the supply so the bill when it has EST inside it will be called as tax invoice now if you are making a stock transfer and it's not even a supply no invoices issued in such cases to substantiate the movement to show a proof during the movement you issue a document called as delivery Chalan so Supply taxes charged tax invoice not even a supply still movement there is delivery Chalan then there is registered person he's making Supply only but he's not not collecting taxes because he's not allowed to collect because he's under CLS or 10 TOA in such cases he cannot issue tax invoice there there's an additional document called as Bill of Supply that needs to be issued they you're supposed to have an endorsement on top of it you have to put it on public notice that you are a Sals person when can I opt it if you're are already registered person you have to opt it before start of the financial year if you're a new registration together with registration form you can obtain should you obtain should you register every year not required you can actually obtain one year until you satisfy you will be under CLS but if you want you can voluntarily withdraw or if there is any condition that you are breaching like turnover limit or making Interstate Supply you have to give an intimation within 7 days and then go out of the scheme if you are not eligible but you still availed it government will not be able to know right but later government go to know that you you were not eligible but you enjoyed the benefit of uh the composition L scheme you will be called to have an irregular availment irregular availment they can charge GST plus a penalty from you under Section 7374 that concludes our discussion so we have done advantages eligibility person not eligible conditions procedures marginal Services 10 to a all of these are over are these clear to all of you can I have a quick yes from everyone please if you're liking the revision you should get definitely go and like the video so that it'll go to more of your friends and all of them will be having uh use of it and the video will be available in this channel so you will be able to you know send the links to your friends and they'll be able to watch it because you have two more days available so anytime anybody feels okay I need a quick revision on this chapter so somebody can comment and put also at some point when you watch okay this is the point where it starts with this topic likewise okay then I can put a structure for that the video will be here till your examination is over okay so let's go ahead and then um move to the next chapter which is the next chapter that you want me to recap value of Supply shall we go and then do value of supply for for for place of Supply I have already kept it for the next uh session um the 7:00 session includes place of Supply as a discussion so place of Supply when I discuss I wanted to discuss um together with I wanted to discuss TDS also that's why I'm keeping it there now we'll do value of Supply okay for for give me a moment C your value Supply chapter for for for okay so let's get started okay so value of Supply is nothing but uh so it is given in section 15 so you should remember section 15 for sure but I'm pretty sure you'll all remember that value is nothing but transaction value under Section 151 plus items to be included in 152 minus discount under Section 153 and you have to have two conditions satisfied for you to take the value the supplier and recipient should not be a related person and it should not be an exchange case which means that the price that is paid should be the only consideration interesting enough in since you don't have valuation rule applicable for your exam there all questions would be they will not be a related person there there will not be a case of exchange so it's understood next what we going to do with this chapter we will quickly look at the provisions in um 151 152 153 then we'll do one question I mean like we will go through one big question I have picked up one question while discussing uh you know uh in the classes and I said this is something that you should try the day before the exam because you will understand everything relating to valuation while you do this particular question we'll do that question also okay that's our thought what is transaction value you have to remember in value chapter if at all there is a question on value alone that comes in computation of taxable value you should be able to recap and remember all the you know wordings inside the provision so it's best for you to understand what is 151 152 a b c d e all of them 151 says transaction value is the value what is transaction value it is the price paid or payable for the supply it is price paid or payable for the supply whatever notional so in lot of cases they will give you some expenses that is incurred by the supplier but did not collect it from the customer I waved that it is not payable should I add it to the value no that is what the note says it says National amount which are waved and not payable to the supplier will never be added to the value it's a very basic understanding we have okay then they saying if at all you have collected any of this amount from the customer and you argue that it should not be added to the value this is specifically these things needs to be added to the value that's your understanding okay so let's look at this what are the things to be if you have not included in value following things has to be included in value is the understanding first items to be included in value of Supply if not already done close a taxes Duty CS fees and charges leved under any LW other than GST and GST CS if charged separately by supplier from reant should be added to the value in an examination perspective you basically get three taxes like this for your exam exercise Duty on Tobacco if you look at tobacco you have both excise duty as well as GST applicable right so when you are Computing value for the purpose of computing GST for for tobacco and tobacco product or narcotics product all of them it's all Dem merited product okay so these product do have excise duty still continuing so we have to add Value Plus excise duty and then add GST that's the thought Municipal Taxes should be added to the value then add GST entertainment taxes by local Authority still not merged under GST these things have to be added to the value so when you're Computing GST on movie ticket movie ticket value entertainment taxes on top of it GST has to be done this's a circular clarification that we have there what is that circular clarification says let's look at that look at the circular TCS under Income Tax Act we're not talking about uh you know TCS under GST we're talking about TCS under Income Tax Act they're saying it does not have the characteristics of taxes mentioned above not to be included so if I'm buying a car the dealer of the car will collect 1 percentage un uh of TCS under Income Tax Act from but that's has nothing to do with the car so while calculating value for computing GST on the car don't include income tax TCS inside it when I say taxes other than GST to be added I don't mean income tax TCS to be added to the value that's the clarification we have can be tested not tested but they can be tested so mark this as important for you for your computational purpose even in your uh McQ case studies they can ask you this then close B direct third party payment by recipient on behalf of supplier in relation to supply should be added to the value of Supply again I'll repeat this we're talking about direct third party payment by recipient on behalf of supply the amount that is to be paid to the supplier supplier is asking me to pay to a third party if I pay that third party some amount if if that amount was relating to my Supply should be added back to the value C any incidental expenses incurred by the supplier any incidental expenses incurred by supplier spend some money why in relation to the supply till the goods are ready for delivery for providing me the services and finally in the bill they separately shown this expenses and collected from the customer hey that is part of value only now in the examination perspective you get l lot of incidental expenses what are they put it here incidental expenses tested in examination packing charges testing charges inspection charges installation charges Wayman charges warranty even additional warranty sales commission commission that is collected um commission that is paid by the seller to a third party and collector Ed from the customer sales commission cost of instrument specially purchased for supply all of these are examples which needs to be added to the value okay when will I add it to the value these will be added to the value only if I collect it from the customer packing charges 1,000 rupees product I add 100 rupees from my customer I'm collecting another 100 then I will add it to the value likewise okay so remember incidental expenses so close a taxes close B Direct payment close incidental expenses Clos D lot of questions what is Clos D says they're saying interest on delayed payment of consideration I made a supply my customer is paying me delayed now I'm asking my customer to pay together with interest that interest will also be subject to GST two notes that needs to be understood more for that note number one such interest late fee penalty Etc will have a separate time of Supply the time of supply for interest late fee penalty will be under 126 and 136 what is it they're saying the date of payment of Interest would be the time of supply for such interest January month I made a supply I'm supposed to pay GST to the government for the supply I'm the supplier okay on or before 20th of February right now the the customer delayed and paid me the the money only in August that's like 8 months after I have to pay GST even on that uh interest paid but I cannot pay the GST on the interest in January itself right I will pay GST only in the month in which I received that interest they said time of supply for interest late fee penalty will be a separate date that is the date of payment of such interest in a question if the question is does not telling you that everything is excluding GST we will always assum the interest is a lumsum amount what do you mean by lumsum the only amount I collect I don't collect interest plus GST I collect interest and that is including GST so it is generally assumed that interest late fee penalty for delayed payment of consideration is an inclusive amount so I need to separate that from the amount of Interest I collected I should separate two things one is interest another one is taxes one is value another one is taxes how do I do it interest multiply with 100 divid 100 plus GST rate interest is a complicated discussion in GST okay we we have Del credit agent uh you know circular clarification and all that before that let me make it very simple for you to recap our interest discussion what do you mean by interest interest on delayed payment of consideration what do you mean by interest on loans or advances is interest on loans or advances same as interest on delayed payment of consideration absolutely no interest on delayed payment of consideration requires some Supply first to be made and they're delaying the payment of that but interest on loan means what I have not made any Supply gave the money if there is interest on delayed payment of consideration it can also be called as penalty late Etc there is an underlying supply of goods or services and supplier is collecting interest for delayed payment of consideration that will be considered under 152d and it will be added to the value I'm giving you an example Mr Raju supplied goods for 1 lakh plus 12 per GST 1ak 12,000 rupes term is net 50 after getting the bill within 15 days you make the payment this Mr rahee the customer did not make the payment within 15 days paid only after 60 days so I asked them you pay me 1 L 12,000 plus 1,000 rupes interest this 1,000 will also be taxable in the end of Mr Raju because that is interest on delayed payment of consideration however if there is an interest on loans or advances look at the second part interest on loans or advances interest on loans or advances is actually dealt in notification 12 Bar 27 which is exemption what is an interest on loans or advances an independent transaction of giving loan getting interest plus principle at some point right consideration for a separate independent activity of giving loans or Advance is called as interest on laan now it is a compensation for time value of money in GST interest on loan is exempt but interest on delayed payment of consideration is added to the value are you guys understanding this can I have a quick yes then now look at the time of Supply perspective there is single Supply multiple dates structure for most of the supply that's why we have this thing called time of Supply right now I'm saying that for interest that is received after five 6 months while they while they make the payment of consideration the time of supply has to be a different date now let me give you an examination tip you have to carefully read it with me okay when an exam question has interest on delayed payment you have to check the following number one is the question specifically talking about gsts excluded or not if they did not specifically talk about gsts being excluded we'll always make an assumption that interest is including GST number two we have to check the month in which I I received interest and the month in which I made Supply are they both same then no problem if it is different I have to make two computation of GSD one is for the month in which I make the supply other than interest the month in which I received interest Point number two check if the month in which interest is paid is given then compute value of Supply GST payable time of Supply due date separately now when there is interest collect I would have already issued invoice at some point right my invoice issuing is already over now for the purpose of this interest what document will I issue I'll issue a document called as debit note okay debit note is issued when interest on delayed payment of consideration is received by supplier invoice is already issued value in the invoice is less than the actual value because I want to add interest also on top of it so supplier will issue a debit note to the recipient now let's look at subsidies subsidies can be two types I'm not talking about government non- government I'm saying subsidy can be a direct subsidy which means a subsidy on the sale subsidy which has some link with the product I Sol if the subsidy is linked to the price and is on the product I so that is the only subsidy which will be considered under close e now if the subsidy is on sale who will give you subsidy subsidy can be given by your head office your holding company CSR subsidy government subsid is a very common subsidy they said government subsidy is not treated as consideration if the if the product price is 100 and government gives you 10 Rupees subsidy GST is paid only on 90 government subsidy can be reduced from value but only what subsidy product subsidy government gave you money to set up set up a Factory government gave you money to um government gave you money to purchase missionary these are not subsidy on the sale okay so that cannot be done then if it's a non-government subsidy even if the non-government subsidies on the product you cannot reduce it from the value it cannot be reduced from the value if it's already reduced it needs to be added back to the value this is the provision subsidy which are not directly linked to the price government or non-government subsidy both of them are ignored in Computing value of Supply only linked subsidies are looked into now delivery at buyers premises where supplier is arranging for transportation and insurance as a part of a contract we call this as free on road contract if the supplier says that hey customer I will deliver the product at your location which means supplier incurs the product Cost Plus Transportation Cost Plus Transit Insurance in GST we treat this as one single Supply the tax rate applicable for transportation is not Transportation charges tax rate it'll be the goods tax rate it is a composite supply of goods delivery and Transit Insurance principal Supply will be the supply of goods so the value of fried Transit insurance will be added to the value of goods so 10,000 worth Goods 1,000 rupees delivery charges 500 rupes Transit insurance 11,500 will be subject to GST in the rate of the goods itself I said value under section 15 is nothing but transaction value under 151 item if not already included these are the things to be added back to the value right minus whatever discount you have given what kind of discount can be reduced from value they said there could be two type of discount 153 a 153b 1538 talks about discount that is given on or before the time of Supply it can be reduced from value provided separately recorded in the invoice if you have a discount that is given at the time of Supply or before the supply you can show that in the invoice itself but what if the discount is given after the supply which means I have you given you the invoices later I'm giving you a discount it can also be reduced provided three condition to be satisfied number one the discount has to be existed at the time of Supply cumulative condition number two I should be able to identify to which invoice I gave this uh discount specifically linked to the relevant invoice there is an agreement at the at the time of Supply itself that in the future I'll give you a discount like a cash discount you make the payment within 15 days I'll give you a discount I can identify the invoices now if the discount is reduced from the value of the supplier corresponding ITC needs to be reversed by the recipient that's a third condition ITC on discount is reversed by the recipient okay so both the discount can be reduced but you have to look at which discount is eligible for action now let's look at a question yeah we'll look at single brother's question one question I'm taking from our uh know question Bank only that question bank is value chapter if you go question 23 you will find single Brothers question that's what we are going to solve now just to get you an idea on how you should present that particular answer but that's one question which will give you overall understanding of everything look at the question on the screen single Brothers registered in utarak has supplied 30 tons of chemicals at 50,000 per ton to P of utarak on 8th September question they're asking you to compute at the end you are required to calculate GST liability in this case and due date of deposit assume the uh rate of GST to be 18% page number 137 if you have the question bank with you now they saying single Brothers what is the taxable value what is the GST liability what is the due date these many things they're asking you to compute first to compute tax liability you need to compute the value here there's no ITC involvement so we'll just compute the value then apply the GST rate and we'll check the due date also okay there must be something uh you know uh additional that we need to look at okay that will be the only thing so single Brothers registered in utan suppli 30 tons of chemicals of 50,000 per ton 13 to 50,000 15 lakh would be the transaction value this is supplied to P of utarak also this is an intrastate supply for the time being but in a question in from May exam like 9th of uh you know may exam they will also give you a place of Supply related point in here they'll say that P has installed this in harana or he has installed this in Andhra Pradesh then 102d will be applicable for you okay so 101d will be applicable for you 101d says that it will be the place where it is installed in igst act place of Supply provision says if the goods requires installation place of Supply will be the place where it is installed that kind of provision might be clubbed with this okay so please be aware of that now in this particular question uh the transaction value is 15 lakh so we'll have to write a table and we'll have to write computational value of supply for single Brothers list price is 15 lakh working not number one transaction value we will write 151 then what is the other things that is collected they said apart from this invoice is also issued on same date if invoice and deliver is on the same date which means that time of Supply would be 8th September itself okay so it's a it's considered to be a 8 September see I have marked it as day before the examination it's an 8 to 10 Mark kind of a question you have to work it out then the invoice for the supply is also issued on the same date further following additional amounts were also charged from P fright is 1 L 180,000 we said if there is Fright it means that it's a a contract where deliver is also promised it's a composite Supply so I have to add that packing charges 1ak 10,000 it's an incidental expenses I have to add that weighing charges 20,000 ,000 it's an internal expense I have to add that cost of instrument specifically purchased it's an innal expense I have to add that so apart from 15 lakh they collected additional amount all of that has to be added to the value okay then as for the terms of the contract of Supply single Brothers is required to get chemical inspected by an independent testing agency before delivery of the same to p p has paid such inspection charges amounting to 12,000 directly to the testing agency so this is a direct third party payment so this also needs to be added to the value then single Brothers received 50 lakh as subsidy from state government for setting up chemical manufacturing plant in utag is it a direct subsidy no this is a subsidy not directly connected to the sale price so I will ignore this subsidy p is required to make payment within 15 days of Supply in terms of the contract however P delayed the payment of consideration and made payment in November so this paid 15,000 as interest should I add this interest also yes but this question does not say everything is excluding GST everything is exclusive of GST so we would assume that whenever there is an interest and nothing is mentioned this is this 15,000 is including GST so look at how this will be presented 15 lakh plus fright uh 1 180,000 fright I'll write Section 8 composite Supply as the working note packing charges weighing charges cost of instrument all of them same working notes see have written 3 33 as working note reference that it's all incidental EXP expenses and has to be added to the value under 152c then cost of instruments after that inspection charges that is another working note because it's a direct third party payment so I have added that also but given a separate working note look at subsidy I have mentioned there and written a working node and excluded that I've done a total before interest because interest will have a separate time of Supply so 21ak 32,000 is the value before interest which will have a time of supply of 8 September but interest is paid in November but interest we'll assume to be including GST so 15,000 interest into 100 divid by 118 so 12,712 would be the value so the total value of the supply including interest would be 21 lakh 44712 this will be the answer for the first part but the question is asking you GST liability and due date please note in this question there are two due dates because interest will have a separate time of Supply so for Value excluding interest that is 21ak 32,000 cgst sgst because it's an inate Supply and another question the supply can be interestate 9% 9% 191 880 191 880 the time of Supply would be September and I have to write a working note for that and due date would be next month 20th which is 20th of October and interest value would be 12,712 because 15,000 into 100 118 is what I have got cgst sgst again 99% but the time of supply for interest is the date of payment of Interest which is 12 subsection 6 so November would be the time of supply for interest and due date would be 20th of December so sometimes whenever you have that's why in the examination tip I told you that whenever you have a interest always look at is the interest a different month then you compute value GST time of supply and due date separately that's why I have computed that separately for interest now all of this would require working notes you can either take a screenshot of the working note if you don't have otherwise you can look at our notes you will find the working notes with you okay see in working notes since all the provisions are from cgst act I've written a common word all Provisions are from cgst act so that I don't have to keep repeating the same wordings again you guys understanding this okay so this is the computational question that you can have from value of Supply chapter okay now we have few circulars to do in uh value of Supply which are very important one some amendments also can be tested but we will do that after we take a quick break know it's been a longer session so I'll give you some time to recap but I'm strongly requesting all of you um um we will start with value and then we will slowly move to time of Supply it's a quick recap I can do with some time of Supply then we go to ITC chapter okay so whatever time permitted we'll use it for ITC chapter I'll recommend you guys to share uh the link of this live on your WhatsApp status so that all your friends whoever wants to uh look at some revision faster revision will be able to definitely please share it to all our batchmates so that they will be able to uh make you of this classes okay so we'll uh take a 105 minutes break now e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e for can we resume can you guys confirm me on the audio and video for okay so let's get started with so sales promotion schemes is the next discussion that we wanted to have this is just an extension of whatever discussion that we had with U for discussion that we had with um discounts okay so sales promotion scheme talks about the circular which is 92 talks about four type of sales promotion methods out of that um the first one is uh first two is relating to uh samples and buy one get one free this this one is relating to discounts the circular clarifies you how discounts should be treated in GST it talks about two type of discounts one is a volume based discount another one is called as post Supply discount they're talking about two type of volume based discounts one is buy more save more uh buy more save more is uh saying like if you buy one item I'll get get 20% discount another buy item I'll give you 20% discount you buy more than 10,000 I'll give you an additional discount so these are discount given at the time of Supply it's generally adjusted through invoices and it can be reduced from value without any doubt the discounts upon achieving volume targets periodically which are discounts like or Target based discount see for example discount me saying that I give you a discount if you T if you reach a sale of like thousand items that's called as discount upon achieving volume targets periodically now these discounts are generally given only after you reach the target but you get this discount for all the previous quantity of item that is being sold to you right so these are discount that is given after the supply but generally agreed up front because these are not s prices the these are agreed discounts as an incentive so it is generally agreed up front it can be reduced from value provided all other condition how many conditions are there in 153b three conditions existed that we have clarified should be specifically linked to an invoice and another condition is that um the ITC on the discount needs to be reversed so if these conditions are satisfied it can also be reduced to from value then post to supply discount what is a post to supply discount these are discount that is not existed at the time of Supply later I gave you a discount okay okay so the discount given after the supply which is not existed at the time of Supply is called as poster Supply discount just to adjust the uh you know amount of payment you might issue credit note as a commercial document but credit note will never be a GST document you cannot reduce the post to supply discount from the value because it does not exist at the time of Supply which means it is not satisfying the conditions this is the clarification we have then GST on Emi transactions it talks about say uh there are two ways in which we can analyze this I'll give you an example to analyze it better look at this you go to a shop and you want to buy an iPhone you ask the shop do you have an Emi facility the shop says yes we have an Emi facility so uh 880,000 worth a mobile phone you instead of paying 80,000 you pay it over eight installments of 11,000 each so in total you will end up paying how much not 80,000 you'll end up paying 8 88,000 right so this 8,000 that is collected extra by the supplier should it be added to the value they said yes it is 152d interest however a lot of companies will not provide Emi like this they'll say that we will tie up with somebody who knows how to give loans so say my G which is a supplier is saying that we have TI up with Bajaj finer which is a consumer finance company so any customer who's coming to myi you guys can actually take the font on Emi facility and but my will not give you Emi facility instead the Emi facility will be given as an independent activity by Bajaj finser so if you aail Emi facility you will not pay money to my you will pay money to Bajaj fin but you will end up paying 88,000 but my gets 80,000 directly from baj F so I is not getting interest so that will not be added to the value here however the interest that is paid by Raju to Bajaj finser will be treated as a interest on loan facility so here J finser is doing an independent activity of giving loans and that will be added to will not be added to the value of supply of myi rather will be treated as an as a value of supply for Bajaj finser for the activity of giving loan and we have already seen that giving loan and getting interest is an exemp Supply so that exemption will be applicable to Bajaj Fin's interest is understanding of Emi facility now there are a couple of more circulars that one circular I'll I want to teach you as on no claim bonus I will U take you through the notes for that this was an amendment for the last exam they did not test it so I'm expecting there could be some questions on top of this for this exam so I would like to explain this also to all of you there's a clarificatory circular on no claim bonus and this clarifica circular addresses two issues issue number one the question that they are asking here is is the no claim bonus treated as a consideration for services provided by insured to insurance company in your textbook you will find this in Supply chapter I have given this in Supply chapter uh near to consideration I've given a point on no claim bonus so if you're referring our books go to supply chapter and refer that or you can look at the screen and then just get an idea and then later look at our notes to get better idea on this okay so I'm hoping that you have something to scribble okay I know this I don't know this that kind of a structure should be there with you whatever I'm explaining that you are well aware of it you can just sck okay this is something that I know something that you feel like you have to go through again I'm strongly recommending you that you write a note on that saying that please go through again you still have to more is available with you so you should be taking that efforts okay so there are two questions that we are addressing about no claim bonus question number one is the no clim bonus a consideration for services by insured to insurance company the one who has taken the insurance is called as insured is notlim bonus given by the insurance company because insured is providing some services to insurance company it's a very absurd question but that's the question they're trying to answer first second one normally the no claim bonus will be available as a reduction from whatever uh insurance premium that you pay so can this Nola bonus be reduced from value as a discount under Section 153 this is the uh second question they are asking okay so to understand the first question and the second question you should understand what is noaim bonus no claim bonus is the amount provided by the insurance company to the insured the one who's taking the insurance because they did not make any claim so I have taken a car insurance last year with 25,000 insurance premium I did not make any claim so I'm a good customer so the next year when I'm take paying the insurance premium the insurance company is giving me 5,000 claim no claim bonus I got this bonus because I did not make any claims so we call this as no claim bonus now if you look at uh an additional provision from section 7 subsection 1 capital A which is schedule 2 which talks about activities which are deemed as supply of goods or supply of service in that par 5 e specif specifically points out a point called as deemed to supply of service what is deemed to supply of service agreeing to an obligation to refrain from an act to tolerate an act or situation or to do an act is treated as a service okay so they're saying if there is an agreement to not to do something or to tolerate an act or a situation or to do an act agreement to refrain or to tolerate or to do an act it is treated as supply of service so in similar fashion don't you think the insured got the no claim bonus because they did not claim so having an agreement to not claim is the reason why they got no claim bonus if if you analyze it in that order can we say that inur provided the service of not making claim and then received this no claim bonus absolutely no why there is no obligation at all first of all so to call this a service there should be an agreeing to an obligation did the insured agreed to the insurance company that I will never make an insurance claim then why are you taking insurance so there is no agreement ass such that we have okay agreeing to an obligation that point is not there so the circular clarified that there is no obligation from the part of the insured to not claim insurance because they receive no claim bonus at the end of the year therefore no claim bonus is not a consideration for refraining from claiming insurance so it is not treated as a supply of service by the insured to the insurance company then what is it it is merely an in merely a discount that is given in the next insurance policy because you did not make a claim in the previous Insurance can this discount be reduced to from value yes because this is a discount that is given at the time of Supply at the time when you are entering into a contract next year you get this discount so such no claim bonus given by insurance company to insured as a deduction from the premium can be considered as a discount under Section 153 since such noaim bonus is mentioned in the invoice it can be reduced to from value under Section 153a are you guys understanding this is it clear okay now let's move to input tax credit chapter okay then we'll go to maybe input ta C chapter is too much for the time that is left for the session we we'll go to time of Supply itself okay time of Supply is one of the easiest chapters but you'll have to remember a little bit here and there that's all right so time of Supply basically talks about three sections out of that two sections are only applicable for you in your examination so you have to remember please note the same similar section numbers are repeated in igst also please don't get confused time of Supply is a concept that is discussed in cgst act the only concept that is discussed in igst Act is place of Supply section 12 and section 13 of cgst act talks about what is time of Supply section 12 talks about how do you determine time of supply for supply of goods 13 talks about how do you determine time of supply for supply of service there are five subsections that you can see which is there in both section 12 as well as there in section 13 now subsection structure of section 12 and 13 are the same 12th subsection 2 talks about time of supply for supplier which means if the suppli is under fcm time of Supply will be determined under subsection 2 for a supplier of Goods it will be determined under section 12 subsection 2 for supplier of service it is determined under Section 13 subsection 2 then for recipient for recipient it is determined under Section subsection 3 so if it is taxed under RCM and it is RCM for goods it will be 123 and if it's RCM for service it is 133 subsection 4 of 12 as well as 13 talks about voucher being used to for goods or services to purchase goods or services if there's a voucher used then there's a different time of Supply subsection 5 is merely a residual provision which says if you're not able to determine time of Supply by 234 use subsection 5 subsection six is something that we've already discussed we said when there is an enhanced consideration by interest okay for delayed payment of consideration or late fee for delayed payment of consideration that date of payment would be the time of Supply that is given in sub section 12 for if there is a delay for payment for goods then it is 126 if delay for payment of service is 136 which very straight forward see basically we have given this point in a chart which is which basically comprises of four charts for you to learn which is very simple straightforward understanding first I first need to tell you what is the basics of uh you know time of Supply it says the person who is liable to pay tax what is the date that he or she has control over that would be treated as the time of Supply generally whatever may be the time of Supply next month 20th will be the due date of making payment to the government if you delay Beyond 20th you will end up paying interest that's why the time of Supply concept becomes relevant and important for us now if you are looking into supplier of goods 12 is what is dealing with Goods supp supper will come under fcm so 12 subsection 2 it says time of Supply is earlier of these three dates date of invoice due date of invoice and date of receed of payment but date of receed of payment is omitted date of rece of payment is not omitted in specified actionable claims why specified actionable claims are Goods but government wanted to collect taxes as in when you make payment to dream 11 as in when you make payment to a casino as then when you make payment to a betting so they said for specified action over claim if you make a payment that will become time of Supply other than that other than CLS and specified acable claims you don't have to consider date of reso payment into or computation at all then time of Supply would be merely earlier of invoice date or due date of invoice now due date of invoice is given in section 31 there are multiple Provisions in section 31 which talks about due date General provision for goods is given in 31 subsection 1 which says what when should I issue invoice I have to ask the question whether transporter is involved or not how are we asking that question the qu the provision says whether Supply involves movement of goods or not if the answer is yes if it involves movement of goods due date of invoice the supplier hey supplier you have to issue invoices before you remove the goods for Supply it's the date of removal of goods for Supply if there is no movement as such if there is no movement as such then due date of invoice would be the date of delivery of goods or making Goods available to recipient the provision of making Goods available to recipient is applicable only if goods are delivered unfinished so they're saying if the goods are delivered unfinished you make the goods ready and then that will be the date on which you have to issue invoices it's a very simple straightforward understanding what about services for services it says like this very similar provision it saying what is it there you have to ask the question so in Goods what is the question we have asked did you issue invoices before the due date yes then date of invoice if not due date here also we have to ask the same question but we don't have a complicated invoice due date there so if it is service supplier what is the provision that will be applicable if it's service and time of Supply it's section 13 that I'll apply because it is supplier is subsection two that I'll apply 132 says same question I'm asking hey supplier of service did you issue the invoice within the due date then I have to ask the question what is the due date in Services uh in Goods I told whether there is transporter involved if transporter is involved then date of removal if not date of delivery but in Services there's no Transportation so they said after re after receiving after receiving the service or after providing the service or after completion of services you have to issue the invoices within 30 days if you issue the invoices within 30 days then time of Supply would be invoice date or payment date whichever is earlier so here payment date is not omitted but if you don't issue invoices within 30 days then time of Supply would be date of completion when did you complete from that date I'll compute compare with the date of know receipt of payment which earlier take now in case of Banking Company financial institution nbfc insurance company and all you can issue invoices within 45 days they have not tested this at some point they can give you a question of time of supply and suddenly there's a bank there so don't take 30 days take 45 days look at this now there are a few notes that is relevant now I'll make the discussion of notes in an examination context not just randomly explaining you the provision I'll give you an examination context to this look at this exam tip which is very important they'll use this examination point of view in multiple questions in a bigger question also will try to trick you with advances how do you treat advances in GST if you have received advances and you are a supplier of goods what provision will be applicable the provision of notification 66 Bar 2017 which says date of receipt of payment is omitted will be applicable so what happens no GST is payable in the month of advances if you have received advances for supply of goods no GST will be received uh GST is payable in the month of advances because that date of receiv of Advan is omitted by notification 66 by 2017 so even if I got an advance and I'm A supplier of goods I'll still pay tax only in the month in which I issue the invoice or my due date is due date of issuing invoice has happened that is whichever is earlier from uh 12 subsection to close a date of invoice or due date of invoice that only I'll apply but if I am somebody who's supplying service that is the second branch that you can see on the screen now if I receive an advance GST is payable on Advance received itself which means advance means I got the money before I complete before I issue invoices I got the money now you have to you have to pay taxes on the advances on the date on which Advance you got which means your month in which you got the advances will become the time of supply for advanced payment so for services even on advances GST is payable so I have given an example there but there is also an additional provision that you need to understand here what if I receive the advances by check payment is received by check as an advance in services in Goods Advance receipt is irrelevant for us because we are not considering Advan date except for specified actionable claim payment is received by check on 31st January 2024 as advances say name is deposited and credited to uh Bank only on 5th February now I got advance but I got it as check so then I have I have one one more question should I take the date of Entry of uh you know advances in my books or in the bank account so that's it whichever is earlier so wherever you have confusion on date of payment is it Bank entry or books entry whichever is earlier so here 31st January would be the advanc receip date so the time of Supply will also be 31st January they are asking questions on uh special cases of due date as well so let's quickly go through uh what are the special cases of due date as well for our understanding now there are four cases of we have already discussed two due date of invoices one is for goods we said if there is movement of goods then uh it will be the date on which uh date of delivery uh if there is no movement if there is movement date of removal and we have said in case of services it will be 30 days from the date of uh completion but there are few special cases where I cannot apply this General provision that is given in subsection 4 5 6 7 subsection 4 says when there is continuous supply of goods first of all you need to Define what is continuous supply of goods continuously supplying Goods when they said continuous supply of goods is the word we use when there is supply of goods by pipeline cable Etc which is also have having periodic payment which means there is a LPG gas connection that is coming into a kitchen of a restaurant but it is coming through pipeline direct pipeline not you know they're not doing it by cylinders direct pipeline now ideally when should I issue invoices when I receive the goods I should issue invoices right but this is continuously received then what will I do so when supply of goods is happening through pipeline cable Etc which is having periodic payment I have to issue invoices on the date in which I get an account statement if I don't have an account statement I am still making periodic payment on that date there is one question that we have in the uh question bank which is very important for us to go through this so please make a remark please go through continuous Supply question in our question bank then there's also U an understanding on continuous supply of service but the definition is slightly different what is continuous supply of services it says for a continuous supply of service means a service more than 3 months involving periodic payment continuous supply of service means what a service for more than 3 months involving periodic payment now due date of payment uh so it is not service by pipeline cable Etc it's rather a service which is for more than 3 months and it involves what periodic payment so I'm doing a construction service construction service is provided for a period of more than 3 months and it has periodic payment right I'll make payment as and when they finish some some part of my construction normally I have to issue invoices within 30 days of completion but when I say completion in here I mean 100% completion isn't it now this is not 100% completion that I'm talking about here whenever there is part payment there is partial completion I need a separate due date of inv they're saying if your service is for more than 3 months and there is part payment received you have to issue invoice for part payment itself what invoices they said look at the contract if the contract is talking about what is the date in which you will get part payment that is the due date of issuing invoice or if the contract is linking that to completion of an event or a milin that completion date will be your due date of invoice nothing mentioned whenever you receive a part payment you should invoices okay so this is the date that I have to take it as due date in some special cases there's a question on the also if I'm not wrong so there's a question on ranu HUD and there is a question on continuous supply of goods called VST limited so you have to look at that question look at other cases there are two more cases one is cessation of service before completion okay now if I stop the service say I engage somebody for 10 days but after 2 days I told them no need to come again they can never complete the service and then issue invoices they said if the service is stopping before completion on the date on which service stops that is the date that is the due date of issuing invoices but only to the extent of Supply made before such session all right then good sent on approval basis what is good sent on approval basis they're saying that if there is a if there is good sent on approval or reject basis If people could send goods and the customer can either approve or reject what happens is while sending the goods I'll not issue invoices I'll give a delivery Chalan because at the time I'm sending the goods there is no Supply that is happening now the supply will happen only if uh Supply happens only if they accept that particular product right so there's a question on when should I issue invoice in such cases government says people could misuse this provision this is that if you're sending Goods on approval basis only 6 months you can wait without issuing invoices if they approv before 6 months date in which they approved would be the due date of invoice if they don't approve within 6 months then when after removal six expiry of 6 months would be the due date of invoice so that will be your time or Supply you can't wait any any further now let's look at time of supply for RCM cases we have already seen this once but let's look at this once again in time of supply for RCM cases so you can look at all the questions relating to that from here because the concept is already discussed so you can just look at the questions and that should be it for this chapter okay same in 12 subsection 3 that is 12 is for goods and three is for rece reent so whenever a recipient of goods is paying taxes like for cash unut not shell or ped PD rapper leaves and all it's the recipient who pay taxes you have to take earliest of three dates basically for a recipient date of payment is the relevant date but they're asking you to compare it with date of payment 31st day from date of invoice or date of receipt of goods you have to take earliest of this so very simple thought is that I'll give you 30 days time from what date invoice if you make the payment before that then that is your time of Supply you make the payment next month to the government also to whom am I saying this to the recipient if I so that's why they said date of payment 31st date day from date of invoice and date of re toets in case of services I don't have date of receipt to Service as a comparison I said date of payment again for recipient relevant date is date of payment for supplier it is date of invoice so recipient it is date of payment but here I'm giving 60 days from invoice to make make the payment so date of payment or 61st day from invoice whichever is earlier so this question see if you look at 9 subsection 3 and 9 subsection 4 we have learned a lot of RCM cases all of them are Services there they can Club this as a question so always learn these together okay so if I make the payment within 60 days date of payment is my time of Supply payment to whom payment to supplier if I don't make payment within 60 days 61st day would be my time of Supply but if I receive services from outside India supplier is in non- taxable territory recipient is in taxable territory it's taxed under RCM supplier non- taxable territory recipient taxable territory it is taxed under reverse charge mechanism okay now in such cases supplier is non- taxable territory aspn is in taxable territor is RCM in such cases is if the supplier and recipients are associated Enterprises two condition to be satisfied one is supplier non- taxable territory recipient tax then these two are associated Enterprises then instead of 61st day from date of invoice I should rather take date of entry in the books only what is the due entry date the Indian uh company which is going to make payment for the services received from outside when did they make the due entry that date or make payment entry date whichever is earlier would be the time of supply they it sometimes sometimes the supplier might not be registered so they might not give you an invoice also okay supplier is not registered they'll not give you an invoice in such cases you can take your entry date itself okay you don't have to do like you have to do 30 days 31st day from date of invoice 61st day from date of invoice no you might not be able to do that so that is the provision that I've given here when Goods or servic is received from unregistered supplier and ask m is applicable date of entry in the books of recipient will be considered instead of 31st or 61st day from invoice because there won't be any invoices then subsection four talks about vouchers they have defined vouchers as gift to voucher voucher which can be accepted as full or part consideration not discount voucher gift voucher they said when you issue voucher there's an RTP question on this I've solved that question during the RTP discussion you can always look at that they said the voucher can be of two types A lot of Industries where vouchers are increasing a lot so they said if there is so many vouchers I should be able to do something about the vouchers so they said I want taxes early on the voucher what kind of voucher specific voucher if there's a voucher at the time of issue itself I know what product I'm going to supply against this voucher you have to pay taxes on the voucher on the rate of the goods you're going to supply on the voucher and date of issue of voucher itself would be the time of Supply but if the voucher is a general voucher you can get any product from the voucher the date of redemption of the voucher would be the time of Supply okay so this is the provision that we have for voucher then we said what if these people are not even registered I don't know how to compute time of Supply but somebody who's not even registered not issuing invoices or doing anything to comply with GST they have some liability then they said if they are registered and I'm not able to determine time of Supply by 2 3 4 I'll apply residual provision in case where periodic return has to be filed time of Supply would be date on which such return is required to be filed I'm not even registered so I don't have any date available with me then when did you pay the taxes that date itself I'll deem it as my time of Supply nothing more in that just deeming it as my time of Supply okay that's what is residual provision or subsection 5 in 12 and 13 talks about okay now subsection six talks about U addition in value by way of interest late fee penalty for delayed payment of consideration of goods or service date on which supplier received such addition in value like date of payment of such interest will be the time of Supply this is what the provision says only this much is there in time of Supply discussion all right okay so the chapter is also over so we have looked into charge we have looked into TCS we have looked into e-commerce operator CLS value and time of Supply okay now we will take our bigger break now and I will close the video now with this I will do the question okay don't worry but I need to take an hour of break so we will start the next session by 7:45 is and we'll go till another 2 hours we can do today whatever left shall we conduct one more session for tomorrow evening tomorrow I have regular classes but after that I can come and then give you a recap you have two more days now I just wanted to be a part of the revision tomorrow also okay so after the uh break I will come and then do ITC chapter we will look at place of Supply we will look at TDS and that's it for probably that'll that's what we'll be able to do okay perfect so thank you all I I will start back the next session by by 7:45
