190

CA Inter - IDT (Sept. ‘25/Jan. ‘26)

(updated with amendments relevant for Sept. 2025/Jan. 2025)
Index
No. Topic Page No. No of Pages Rates
1. Introduction to GST 1 – 16 16
2. Definitions 17 - 25 9
3. Supply 26 - 39 14
4A - Charge of GST (CGST Act + IGST Act)
4. 40 – 55 16
4B – IGST Act, 2017 (including Place of Supply provisions)
5. RCM & ECO 56 – 70 15
16. Composition Levy 71 – 80 9
7. Exemptions under GST 81 – 108 28
8. Time of Supply 109 – 115 7
9. Value of Supply 116 – 119 4
10. Input Tax Credit (ITC) 120 – 141 22
11. Registration under GST 142 – 167 26
12. Tax Invoice, Credit Note & Debit Note 168 – 178 11
13. Returns under GST 179 – 200 22
14. Payment of Tax 201 – 206 6
15. TDS & TCS 207 – 212 6
16. Accounts & Records 213 – 216 4
17. E-way Bill 217 – 228 12

Notes Compiled by – CA Harish Wadhwani

0 CA Harish Dwarka Wadhwani

1
01. Introduction to GST
Types of Taxes
mu Shivam
Crona
Direct tax Indirect tax
1. The person paying tax to the 1. The person paying tax to the
government directly bears the government collects the same
burden of the tax.
F
from the ultimate consumer.
Thus, burden of the tax is shifted
mashiram

to the other person.

2. Progressive in nature - 2. Regressive in nature –

E
High rate of taxes for people All the consumers equally bear
having higher ability to pay. the burden, irrespective of their
ability to pay.

Burden of tax Burden of tax

borne by the person himself. shifted to another person.

Difference between Direct Taxes and Indirect Taxes

Basis
Meaning
Éf
Direct Taxes
Direct tax is levied on person’s
income and wealth and is paid
directly to the government
Indirect Taxes

7o
Indirect Tax is levied on a person who consumes
the goods and services and is paid indirectly to
the government
Nature Progressive in nature Regressive in nature
Incidence and Falls on the same person. Falls on different person. Tax is recovered from
Impact Assessee, himself bears such the assessee, who passes such burden to another
aim taxes. person.
Tax imposition Imposed on and collected from Imposed on & collected from consumers of goods
& collection the same person & services but paid & deposited by the assessee.
Tax Evasion Tax evasion is possible
shinm J
Croma
Tax evasion is hardly possible because it is
included in the price of the goods and services.
Burden Cannot be shifted Can be shifted
Taxable Event Taxable income of the assessee Supply of goods and services
Example Income Tax GST, Custom Duty

Indirect Tax (IDT) 1 Notes Compiled by - CA Harish Wadhwani

GSTwas introduced in India on
Yoga Introduction to GST (Chapter – 01)
Features of Indirect Taxes cores e
12000Crones ones
24000

Heading
Important
Explanation
Indirect taxes are a major source of tax revenue for Governments worldwide V2
source of
revenue
Is
and continue to grow. In India, indirect taxes contribute more than 50% of the
total tax revenues of Central and State Governments.

Tax on goods It is levied at the time of :

and services  supply or manufacture or purchase or sale or import or export of goods.
O
0
 supply or import or export of services.

Shifting of Burden of indirect tax is shifted from seller to buyer and ultimately borne by
burden consumers of such goods or services. For Example, GST paid by the supplier of
the goods is recovered from the buyer by including the tax in the cost of the
commodity.

No perception Seller (the person on whom indirect tax is levied) does not perceive a direct
of direct pinch pinch of tax as it is recovered by him from the buyer and then paid to the
Government. On the other hand, since it is inbuilt in the price of the goods, the
ultimate payer (i.e., buyer) pays it without knowing that he is paying any tax to
the Government.

o
Inflationary in Cost of goods and services increases due to levy of indirect tax thus indirect
nature taxes promote inflation.

Wider Tax Base Majority of goods and services are liable to indirect tax. Thus, tax base is much
wider in case of indirect tax in compare to direct tax.
8
Regressive in All persons (rich or poor) will bear equal wrath of tax on goods or service
Nature consumed by them irrespective of their ability. In other words, indirect tax does
not create any difference between rich and poor. Poor people are also required
to pay equal percentage of tax on certain goods and service of mass
consumption. Thus, it may increase the disparities between rich and poor.
Jhooth
Promotes social High taxes are imposed on the consumption of harmful goods (also known as
welfare

Daane
e
‘sin goods’) such as alcoholic drinks, tobacco, etc. This not only controls their
consumption but also enables the State to collect substantial revenue from it.
value State Tax
400 By 600 Fatal
Indirect Tax (IDT) 2 Notes Compiled by - CA Harish Wadhwani
II
100
18 100 6016 100
Introduction to GST (Chapter – 01)
0
Salient Features of GST
18 150 State Tax
Heading Explanation
Destination
Based Tax 0mn
GST is a value-added destination-based tax on consumption of goods and
0
services. Benefit of tax (SGST/UTGST) will accrue to the consuming state which
will benefit the poor states.
F
Example 1: If A in Gujarat produces the goods and sells the goods to B in
Rajasthan, then in such case the tax should be levied and collected and should
accrue to the State of Rajasthan and not to the State of Gujarat.

Tax on Value It is levied at all stages right from manufacture up to final consumption with
4 additions
O
credit of taxes paid at previous stages available as setoff. Thus, only value
(Value added tax) addition will be taxed and burden of tax is to be borne by the final consumer.
stammer
One Nation One GST is levied on supply of goods and services across India (including Jammu and
Tax
a 0
Kashmir). It is a single tax on the supply of goods and services, right from the
manufacturer to the consumer.

Dual GST Model Centre and states will impose tax on goods and services simultaneously.
a) Intra-State supply of goods and services

Withing
- CGST: Payable to Central Government
- SGST/UTGST: Payable to SG/UT where they are consumed
b) Inter-States Supply of goods and services
- IGST: Payable to Central Government
Centre will levy and administer CGST and IGST while respective States/ UTs
will levy and administer SGST/UTGST

Import and
Export
0
Import will be treated as inter-States supply and IGST will be chargeable along
with basic Customs duty. However, in GST, Export will be treated as ‘Zero rated
supplies’ and no IGST is payable.
a
0
Rates of GST
000000
The rates of GST are 0.5%, 3%, 5%, 12%, 18% and 28%.
In addition, compensation cess will be payable on pan masala, tobacco & tobacco
c
product, coal, lignite, aerated water and motor-cars.

Input Tax A registered person is entitled to take credit (deduction) of input tax paid on
Credit
_to bn
inward supply and adjust against the output tax liability on his outward supplies.
Of_
it EE
E
Indirect Tax (IDT) 3 Notes Compiled by - CA Harish Wadhwani
 Introduction to GST (Chapter – 01)
Free flow of the Under GST regime there is a seamless (without any obstruction) flow of credit

I
credit in case of inter-state supplies, which was not possible in pre-GST period.

0
Earlier, no credit was available for CST paid by the buyer.

Genesis of GST in India

In the year 2000, the

then Prime Minister of Announcement by Union
India introduced the Finance Minister, during The Constitution (101st
concept of GST and set budget of 2006-07 that Amendment) Act was
up a committee to design GST would be introduced enacted.
a GST model for the from 1st April, 2010.
country.

CGST, SGST, UTGST, IGST GST Council Recommends

& GST Compensation Cess CGST, SGST, UTGST, IGST 1st GST Council Meeting.
Act Passed. & GST Compensation Cess.

GST Council Recommends All States except J & K

GST Launched.
all the Rules. passed their SGST Act.

SGST Act Passed by J&K;

Journey thereafter CGST & IGST Ordinances
continues…. promulgated to extend
GST to J & K.

Indirect Tax (IDT) 4 Notes Compiled by - CA Harish Wadhwani

 Introduction to GST (Chapter – 01)
Structure of GST Law in India canter
No. Acts/Legislature Number of Acts Applicability
1.
2.
CGST Act, 2017
SGST Act, 2017
1 Act
31 Acts
All-India se
Separate for all States
o
3.
4.
UTGST Act, 2017
IGST Act, 2017
1 80
1 Act
1 Act
All-India
All-India

I
5. GST Compensation Cess Act, 2017 1 Act All-India

Topic
Q Comparison – Before/After GST
Before GST
ct

After GST
Multiple Acts Many Acts prevailed before GST. There is only 1 Act ie. GST
Cascading Effect Tax was collected on Tax.
_a
Tax paid by a taxable person, can be
utilised as Input Credit by other taxable
person (Except final consumer)
Double Taxation Single Commodity was taxed twice. Single point tax
Multiple Taxable Tax liability arose on different Tax liability arises on “SUPPLY”
0
Event
0
Multiple Tax
events under multiple acts.
Tax was paid under multiple challans
[‘Supply’ as per GST Act]
Tax is paid only under GST Act with one
to different government bodies due date of tax payment (currently,
having multiple due dates. 20th of the next month)
Multiple Multiple returns and documents Only Single set of returns and
Procedure were required to be submitted by documentation is required to be
different acts. submitted in the GST Regime.

Concept of GST
Before we proceed with the finer nuances of Indian GST, let us understand the basic concept of GST.
1. Value Added Tax: GST is a value added tax levied on supply i.e., manufacture or sale of goods
and provision of services.
2. Continuous Chain of Tax Credit: GST offers comprehensive and continuous chain of tax
credits from the producer's point/service provider's point upto the retailer's
level/consumer's level thereby taxing only the value added at each stage of supply chain.
3. Burden Borne by Final Customer: The supplier at each stage is permitted to avail credit of
GST paid on the purchase of goods and/or services and can set off this credit against the GST
payable on the supply of goods and services to be made by him. Thus, only the final consumer
bears the GST charged by the last supplier in the supply chain, with set-off benefits at all
the previous stages.
4. No Cascading effects of Tax: Since, only the value added at each stage is taxed under GST,
there is no tax on tax or cascading of taxes under GST system.

Indirect Tax (IDT) 5 Notes Compiled by - CA Harish Wadhwani

 Introduction to GST (Chapter – 01)
GST Concept Master Illustration

Particulars Manufacturer Distributor Retailer Consumer

Cost 1,00,000 1,20,000 MRP
(+) Value addition 1,00,000 20,000 30,000 (inclusive of
Selling Price (before GST) 1,00,000 1,20,000 1,50,000 GST)
GST @ 18% 18,000 21,600 27,000 1,77,000
Selling Price (incl. GST) 1,18,000 1,41,600 1,77,000

Tax Liability I

Gross GST Liability 18,000 21,600 27,000

(-) ITC Nil (18,000) (21,600) Nil
Paid to Government 18,000 3,600 5,400 27,000

Tax on Value Addition 1,00,000 x 18% 20,000 x 18% 30,000 x 18% Nil
= 18,000 = 3,600 = 5,400

Inter State & Intra State Supply

INTRA-STATE SUPPLY INTER-STATE SUPPLY

Supply within the State Supply outside the State
Meaning Supply from 1 place WITHIN the • Supply to another State/UT
State/UT to another place WITHIN the • Supply to places outside India
same State/UT
Intra/Inter It is called as INTRA-State Supply
It is called as INTER-State Supply
Applicable Tax CGST & SGST/UTGST is charged.
0
IGST is charged. (Combination of
CGST & SGST/UTGST)

0 0
Distribution of Tax Tax is distributed between Central Tax will be distributed by Centre
and State/UT between Central and Destination
State/UT

Indirect Tax (IDT) 6 Notes Compiled by - CA Harish Wadhwani

 Introduction to GST (Chapter – 01)
States UTs & Special Category States
St
Ét
Geography Deemidstate
Union Territories (UT)
Natural
Particulars Deemed State Pure UT

8
States
A UT with legislature A UT without legislature
Earlier in GST 29 2 Deemed States 5 Pure UTs
[29 States and 7 UTs (2 + 5)] States [Delhi & Puducherry]
Demerger of J & K State in 2 UTs (-) 1 (+) 1 Deemed State (+) 1 Pure UT
[J&K and Ladakh]
0 [J&K] [Ladakh]
Merger of 2 Pure UTs into 1
0 0

Peso
- - (-) 1 Pure UT
[Dadra & Nagar Haveli and Daman & Diu]
Total 28 3
0 5
0
FINALLY TOTAL NUMBER OF STATES FOR THE PURPOSE OF GST (Natural and Deemed States) = 31

List of all 8 UTs

UTs with legislature (Deemed State) UTs without legislature (Pure UT)
Jammu & Kashmir (with legislature) Ladakh
Puducherry (with legislature) LADIA Andaman & Nicobar Islands
Delhi (with legislature)
β
Dadra & Nagar Haveli and Daman & Diu
Lakshadweep
Chandigarh
ChandigahD
Special Category States
Arunachal Pradesh Assam Jammu & Kashmir Manipur
Meghalaya Mizoram Nagaland Sikkim
Tripura Uttarakhand Himachal Pradesh
Special threshold limits for registration, composition, exemptions, etc. have been recommended for
some or all of these States. 000

Indirect Tax (IDT) 7 Notes Compiled by - CA Harish Wadhwani

 Introduction to GST (Chapter – 01)
Input Tax Credit & B2B – B2C Transactions

B2B Transaction: Wholesaler Mr. A (of Mumbai) Sold Goods to Retailer Mr. B (of Mumbai)
B2C Transaction: Retailer Mr. B (of Mumbai) Sold Goods to Consumer Mr. C (of Mumbai)
Wholesaler Retailer Consumer
Particulars (₹) Particulars (₹) Particulars (₹)
Sales 50,000 Sales 60,000 Cost to Consumer 70,800
Add: CGST 9% 4,500 Add: CGST 9% 5,400
Add: SGST 9% 4,500 Add: SGST 9% 5,400
Total 59,000 Total 70,800 Amount paid 70,800

Output Tax Liability 9,000 Output Tax Liability 10,800

CGST 4,500 CGST 5,400
SGST 4,500 SGST 5,400
(-) Input Tax Credit Nil Input Tax Credit (9,000)
CGST 4,500
SGST 4,500
GST Payable 9,000 GST Payable 1,800 Total Tax borne 10,800
CGST 900 + SGST 900

Cross Utilisation of ITC under GST Law

Following is the order and priority for ITC utilisation

ITC Order of Utilisation of ITC as per GST Rule Utilisation MatrixMannero
IGST Credit* 1st IGST Liability
2nd CGST/SGST/UTGST Liability C C
CGST Credit 1st CGST Liability
I
IF
2nd IGST Liability I I
SGST Credit 1 SGST Liability
st

2nd IGST Liability S S

UTGST Credit 1 UTGST Liability
st
U U
2nd IGST Liability
* The order of utilisation of IGST Credit post offset to IGST Liability can be in any order or
proportion between CGST & SGST/UTGST but, the only pre-condition is exhausting IGST
completely before using other credits.
Hence, from the above table, it can be concluded that any taxpayer must begin with set-off process
starting with ITC of IGST and utilise it completely before proceeding to utilise the ITC of CGST
or ITC of SGST/UTGST.

Indirect Tax (IDT) 8 Notes Compiled by - CA Harish Wadhwani

 Introduction to GST (Chapter – 01)
Taxes Subsumed into GST

Taxes subsumed in GST:

In total 17 different taxes levied by Centre and State are subsumed in GST
Central Taxes to be subsumed State Taxes to be subsumed
1. Central Excise duty State Excise duty (not subsumed)
2. Duties of Excise 1. State VAT
(Medicinal and Toilet Preparations) 2. Central Sales Tax (CST)
3. Additional Duties of Excise 3. Luxury Tax
(Goods of Special Importance) 4. Entry Tax (all forms)
4. Additional Duties of Excise 5. Entertainment and Amusement Tax (except
(Textiles and Textile Products) those levied by local bodies)
5. Additional Duties of Customs (CVD) 6. Taxes on advertisements
6. Special Additional Duty of Customs (SAD) 7. Purchase Tax
7. Service Tax 8. Taxes on lotteries, betting and gambling
8. Central Surcharges and Cesses 9. State Surcharges and Cesses.

Tax not subsumed into the GST: Following taxes are still in effect Post GST
Central Taxes State Taxes Local Body Taxes
1. Basic Customs Duty (Import Duty) 1. State Excise Duty 1. Property Tax
BE
2. Export Duty 2. Stamp Duty 2. Entertainment Tax
3. Research and Development Cess 3. Profession Tax
4. Anti-Dumping Duty 4. Motor Vehicle Tax
5. Safeguard Duty 5. Road Tax
6. Electricity Duty

Current Scenario of Indirect Taxes after advent of GST:

# Particulars Excise + VAT/CST GST
1. 5 Goods Specified u/s. 9 (2)
(i) Petroleum Crude,
(ii) High Speed Diesel,
of Central Excise + VAT/CST X
(iii) Motor Spirit (commonly known as petrol),
(iv) Natural Gas, and
(v) Aviation Turbine Fuel.
2. Alcoholic Liquor for human consumption State Excise + VAT/CST X
3. Tobacco & Tobacco Products Central Excise GST
0
to
4. Other Goods & Services
a
X 000GST

Indirect Tax (IDT) 9 Notes Compiled by - CA Harish Wadhwani

 Introduction to GST (Chapter – 01)
Benefits of GST

GST is a win-win situation for the entire country. It brings benefits to all the stakeholders of
industry, Government and the consumer. The significant benefits of GST are discussed hereunder:

Benefits to economy
1. Creation of unified national market: GST aims to make India a common market with common
tax rates and level. procedures and remove the economic barriers thus paving the way for an
integrated economy at the national
2. Boost to 'Make in India' initiative: GST gives a major boost to the 'Make in India' initiative of
the Government of India by making goods and services produced in India competitive in the
national as well as international market. This will create India as a manufacturing hub.
3. Enhanced investment and employment: The subsuming of major Central and State taxes in
GST, complete and comprehensive set-off of input tax on goods and services and phasing out
of Central Sales Tax (CST) reduces the cost of locally manufactured goods and services and
increases the competitiveness of Indian goods and services in the international market and
thus, gives boost to investments and Indian exports.

Simplified tax structure

1. Ease of doing business: Simpler tax regime with fewer exemptions along with reduction in
multiplicity of taxes under GST has led to simplification and uniformity in tax structure.
2. Certainty in tax administration: Common system of classification of goods and services
across the country ensures certainty in tax administration across India.

Easy tax compliance

1. Automated procedures with greater use of IT: There are simplified and automated procedures
for various processes such as registration, returns, refunds, tax payments. All interaction
is primarily through the common GSTN portal, therefore, less public interface between the
taxpayer and the tax administration.
2. Reduction in compliance costs: The compliance cost is lesser under GST as multiple record-
keeping for a variety of taxes is not needed, therefore, there is lesser investment of
resources and manpower maintaining records.

Advantages for trade and industry

1. Benefits to industry: GST has given more relief to industry, trade and agriculture through a
more comprehensive and wider coverage of input tax set-off and service tax setoff,
subsuming of several Central and State taxes in the GST and phasing out of CST.
2. Mitigation of ill effects of cascading: By subsuming most of the Central and State taxes into
a single tax and by allowing a set-off of prior-stage taxes for the transactions across the

Indirect Tax (IDT) 10 Notes Compiled by - CA Harish Wadhwani

 Introduction to GST (Chapter – 01)
entire value chain, it helps in mitigating the ill effects of cascading, improving
competitiveness and improving liquidity of the businesses.
3. Benefits to small traders and entrepreneurs: GST has increased the threshold for GST
registration for small businesses. Further, single registration is needed in one State. Small
businesses have also been provided the additional benefit of composition scheme. With the
creation of a seamless national market across the country, small enterprises have an
opportunity to expand their national footprint with minimal investment.

Goods and Services Network (GSTN)

1. Role of GSTN in GST: Government has established common GST Electronic Portal (www.gst.gov.in),
a website managed by Goods and Services Network (GSTN) for the tax payer and common IT
infrastructure for Central and States.
2. Formation: GSTN (a non-profit Government owned organisation) is a Special Purpose Vehicle.
The Government of India approved the setting up of the Goods and Services Tax Network (GSTN)
as a non- government, not-for-profit, private limited company on 12th April 2012 for providing
shared IT infrastructure and services for implementation of the Goods & Services Tax (GST)
regime in the country. It was incorporated on March 28, 2013 u/s 8 of the Companies Act, 2013.
3. 100% Government Entity:
The GST Council in its 27th meeting held on 4th May 2018 decided that GSTN will be converted
into a 100% Government-owned entity by transferring 51% equity held by the Non-Government
institutions to the Centre and states equally. The Union Cabinet in its meeting held on 26 th
September 2018 approved the recommendation to convert GSTN into a fully-owned Govt Co.
4. Functions: It provides functions like:
(i) Core Functions - Registrations, Returns & Payments
(ii) Helpdesk Support
(iii) Information on Inter State Supply and Cross Credit Utilization
(iv) Providing various MIS reports to CG & SG based on the tax payer return information
(v) Analytics (ie. providing analysis of tax payers’ profile)
(vi) Matching of tax payment details with banking network
(vii) Computation and Settlement of IGST
5. Websites: GST Portal - https://www.gst.gov.in/
Apart from above GST Portal, there are 6 other websites, relating to GST such as,
- https://cbic-gst.gov.in/
- https://gstcouncil.gov.in/
- https://gstn.org.in/
- https://ewaybillgst.gov.in/
- https://einvoice1.gst.gov.in/
- https://www.cbic.gov.in/

Indirect Tax (IDT) 11 Notes Compiled by - CA Harish Wadhwani

 Introduction to GST (Chapter – 01)
GST Suvidha providers (GSPs) & Application Service Providers (ASPs)

What do you mean by GSP?

1. GSTN has selected certain Information Technology, Information Technology enabled Services
and financial technology companies, to be called GST Suvidha Providers (GSPs).
2. GSPs have access to GST System and have the capability to develop applications to be used
by taxpayers for interacting with the GSTN.
3. GSP develops applications having features like return filing, reconciliation of purchase
register data with auto populated data for acceptance/rejection/modification, dashboards for
taxpayers for quick monitoring of GST compliance activities.
4. They may also provide role-based access to divide various GST related activities like uploading
invoice, filing returns etc., among different set of users inside a company (medium or large
companies will need it) applications for tax professional to manage their client's GST
compliance activities, integration of existing accounting packages/ERP with GST System, etc.
5. GSPs may take the help of Application Service Providers (ASPs) who act as a link between
taxpayers and GSPs
What is an ASP?
1. ASPs are chosen by the GSTN to develop end-to-end solution for consultants corporates and
tax payers so that the entire management of sale or purchase of goods and services can be
made through ASPs
2. The organizations share their data with regards to purchase and sale of goods and services
to the ASP, after which the GST returns are prepared by the ASP
3. The returns are filed through GSP.

Indirect Tax (IDT) 12 Notes Compiled by - CA Harish Wadhwani

 Introduction to GST (Chapter – 01)
Constitutional Amendments

Constitution (101st Amendment) Act, 2016:

Constitution (122nd Hon’ble President of GST Council was

Amendment) Bill, 2016 India accorded assent constituted on
introduced on 8th September, 2016 15th September, 2016

Notified as 1st GST Council meeting

Passed by Rajya Sabha
Constitution (101st was held on 22nd &
on 3rd August, 2016 &
Amendment) Act, 2016. 23rd September, 2016

As per Article 279A (1)

Passed by Lok Sabha on GST was launched on
GST Council has to be
8th August, 2016 1st July, 2017
constituted within 60 days

Constitutional Articles before 101st Amendment Act, 2016:

Topic Particulars
Article 245 Extent of laws made by Parliament and by the Legislatures of States
Article 246 Subject matter of laws made by Parliament and by the Legislatures of States
7th Schedule to List I Union list (only Central Government has power of legislation on
Constitution subject matters covered in the list)
List II State list (only State Government has power of legislation on subject
matters covered in the list)
List III Concurrent list (both Central & State Government can pass
legislation on subject matters).
Article 254 Inconsistency between laws made by Parliament and the laws made by the

ooo Legislatures of States

Following are few important articles which were inserted via Constitution (101st Amendment) Act,
2016:

Parliament

Govt of India
Union
Centre
Central Gout
Indirect Tax (IDT) 13 Notes Compiled by - CA Harish Wadhwani
 AT ntt TTI Introduction to GST (Chapter – 01)
Topic Explanation

do
Article 246A Special provision with respect to goods and services tax (GST)

see
1. Notwithstanding anything contained in articles 246 and 254, Parliament, and,
subject to clause (2), the Legislature of every State, have power to make laws

3
with respect to goods and services tax imposed by the Union or by such State.
2. Parliament has exclusive power to make laws with respect to goods and
services tax where the supply of goods, or of services, or both takes place in
the course of inter-State trade or commerce.
(In simple words, for the implementation of GST, Article 246 and 254 has been
overruled)
Explanation:
In respect of GST referred to in Article 279A(5), [5 Specified Goods], the
provisions of this article, shall take effect from the date recommended by the
GST Council
(Earlier
G as per Article 246, power to levy various types of indirect tax was distributed
between CG and SG. Article 246A empowered both the Government to levy GST)
Article 265 No
r tax shall be levied or collected except by the authority of law.
E
The term “authority of law” means that the tax proposed to be levied must be
within the legislative competence of the Legislature imposing the tax.
c
Article 269A
co
Levy and collection of GST in course of inter-State trade or commerce
GST on supplies in the course of inter-State trade or commerce shall be levied
0
and collected by the Government of India and such tax (ie. IGST) shall be
apportioned between the Union and the States in the manner as may be provided
ooo
0
by Parliament by law on the recommendations of the GST Council.
Explanation:

o
For the purpose of this clause, supply of goods, or of services, or both in the
course of import into the territory of India shall be deemed to be supply of goods,

to
or of services, or both in the course of inter-State trade or commerce.
1. The amount apportioned (as aforesaid) to a State shall not form part of the
o
Is
Consolidated Fund of India.
2. If an amount collected as IGST has been used for payment of the SGST (or
vice versa), such amount shall not form part of the Consolidated Fund of India.

Foot
Article 366 - Clause (12A) - “goods and services tax” means any tax on supply of goods, or

It
3 New Clauses services or both except taxes on the supply of the alcoholic liquor for human
consumption
Clause (26A) – “Services” means anything other than goods.

on
Gone
Clause (26B) – “State” with reference to articles 246A, 268, 269, 269A and article
279A includes a UT with Legislature

Indirect Tax (IDT) 14 Notes Compiled by - CA Harish Wadhwani

 Introduction to GST (Chapter – 01)
GST Council (Article 279A)

1) Constitution of GST Council & its Members

1. The GST Council which will be a joint forum of the Centre and the States, shall consist of the
following members:
The Union Finance Minister Chairperson (1)
The Union Minister of State, in-charge of Revenue of finance Member (1)
The Minister In-charge of finance or taxation or any other Minister
nominated by each State Government. Members (31)
2. The Members of the GST Council shall choose 1 amongst themselves to be the Vice-
o
Chairperson of the Council for such period as they may decide.

o2) GST Council’s Recommendations:

The GST Council shall make recommendations to the Union and the States on various matters:
Imp As per Article 279A (4) –
→ The Council will make recommendations to the Union and the States on various important

for issues related to GST, like the goods & services that may be subjected to GST or exempted
from GST, model GST laws, the threshold limit of turnover, principles that govern the

end E
place of supply, rates including floor rates with bands, special rates for raise additional
resources during natural calamities/disasters, special provisions for certain States, etc.
→ Provisions of Article 279A (4) Clause (g) is about recommendation to be made for special
category states: special provision with respect to the States of Arunachal Pradesh,
Assam, Jammu and Kashmir, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, Tripura,
Himachal Pradesh and Uttarakhand.

3) Certain Commodities to be taxed after GST Council Recommendation:

The GST Council shall recommend the date on which GST shall be levied on petroleum crude, high
speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel.

4) Voting & Quorum at the GST Council Meeting:

1. Every decision of the GST Council shall be taken at a meeting, by a majority of not less than

00
3/4th (75%) of the weighted votes of the members PRESENT AND VOTING, in accordance with
the following principles, namely:

0
a) the vote of the CG shall have a weightage of 1/3rd of the total votes cast, and
b) the votes of all the SGs taken together shall have a weightage of 2/3rd of the total
votes cast, 0
in that meeting.
2. 50% of the total number of Members of the GST Council shall constitute the quorum at its
meetings .

Indirect Tax (IDT) 15 Notes Compiled by - CA Harish Wadhwani

 Introduction to GST (Chapter – 01)
3. Example:
Total Vote Cast Central Government State Government Total % Passed
CG and 22 1 x 100 x 1 Weight 22 x 100 x 2 Weight
States agreed 1 3rd 31 3rd 80.64%
on the proposal = 33.33% = 47.31%
CG and 15 1 x 100 x 1 Weight 15 x 100 x 2 Weight
States agreed 1 3rd 31 3rd 65.58% X
on the proposal = 33.33% = 32.25%

GST Compensation Cess

1. GST (Compensation to States) Act, 2017 was enacted:

o_O
• to levy Compensation cess
• for providing compensation to the States for the loss of revenue arising on account of
implementation of the GST with effect from 01.07.2017 (the date from which was brought
into force), for a period of 5 years or for such period as may be prescribed*
*[Extended upto 31.03.2026]

me
2. Taxable persons selling notified goods are liable to collect and pay GST Cess. Notified goods are:
a) Pan masala,
b) Tobacco & tobacco product,
I c) Cigarettes, cigar
d) Coal, lignite,
e) Aerated water; and
f) Motor-cars
3. Cess shall be computed on the value of taxable supply.

co
of inter-state sales including import of goods.
O
4. Cess is levied in addition to CGST + SGST/UTGST in case of intra-state sales and IGST in case
O
5. Taxpayer can use ITC of Cess for payment of Cess liability on outward supply made by him. He
cannot use ITC of Cess for payment of output CGST, SGST or IGST
6. Where a taxpayer is registered under composition levy, Cess is not applicable on outward supplies
made by him.
7. Cess is not levied on export made from India. The exporter can claim a refund of the ITC of cess
paid on purchases.

Indirect Tax (IDT) 16 Notes Compiled by - CA Harish Wadhwani