CA Final Paper 5: IDT cheat sheet

Article 246A (inserted by the 101st Constitutional Amendment Act, 2016) gives Parliament and State Legislatures concurrent power to make laws on GST; Article 269A empowers Parliament to levy IGST on inter-State supply and apportion it between the Union and States.

Article 279A constitutes the GST Council; decisions require a three-fourths majority of weighted votes, with the Centre holding one-third and all States together two-thirds.

Article 366(12A) defines GST as any tax on supply of goods or services or both except taxes on supply of alcoholic liquor for human consumption; five petroleum products remain constitutionally leviable but await a notified date.

Section 9(1) CGST Act and Section 5(1) IGST Act levy tax on intra-State and inter-State supply respectively; the taxable event is 'supply', not manufacture, sale or provision of service.

Section 7(1) defines supply to include sale, transfer, barter, exchange, licence, rental, lease or disposal for consideration in the course or furtherance of business; Schedule I covers supplies without consideration, Schedule II classifies transactions, Schedule III lists non-supplies.

Composite supply (Section 2(30)) is naturally bundled and supplied in conjunction with a principal supply and is taxed at the principal supply's rate; mixed supply (Section 2(74)) is a bundle of separate supplies at a single price, taxed at the highest rate among them.

Section 9(3) empowers notification of reverse charge on specified goods/services; Section 9(4) covers reverse charge on supplies from unregistered persons for specified notified categories; Section 9(5) makes the electronic commerce operator liable for notified services.

Composition levy under Section 10 (CGST) and Section 22 (IGST): manufacturer/trader up to Rs.1.5 crore (Rs.75 lakh for special category States) at 1% (manufacturer/trader) or 5% (restaurant); service providers up to Rs.50 lakh at 6%; no ITC and no inter-State outward supply.

Sections 10 and 12 IGST Act deal with place of supply for goods: where supply involves movement, it is the location where goods are handed over for delivery; where there is no movement, the location of goods at the time of delivery.

Section 12(8): place of supply for services in relation to immovable property is the location of the property; Section 12(3) for restaurant, catering, beauty and fitness services is the location where the services are actually performed.

Section 12(2): for B2B services, place of supply is the registered recipient's location; for B2C, it is the address on record of the recipient, failing which the supplier's location.

Section 13 (cross-border): default rule is the location of the recipient; exceptions include services relating to immovable property (location of property), events (where held), and goods physically made available (where made available).

Section 12(7) transportation of goods: B2B - recipient's registered location; B2C - place where goods are handed over for transportation; Section 12(9) passenger transport B2C - place of embarkation.

Time of supply for goods (Section 12 CGST): earlier of the date of issue of invoice (or last date for issue) and the date of payment; for reverse charge, earlier of receipt of goods and payment; for supply without invoice, date of entry in books.

Time of supply for services (Section 13): earlier of invoice date (if issued within 30 days) and payment date; for reverse charge, earlier of payment and receipt of invoice, with a 60-day fallback from invoice date.

Value of supply (Section 15): transaction value where supplier and recipient are unrelated and price is the sole consideration; includes incidental expenses, packing, commission, interest/late fee/penalty, and subsidies except Government subsidies; excludes post-supply discounts recorded in invoice.

Exemptions: Notification 2/2017-Central Tax (Rate) for goods and Notification 12/2017-Central Tax (Rate) for services; Section 11 empowers exemption by notification; agricultural produce, certain healthcare, education and charitable services are commonly exempt.

Section 16(2) conditions for ITC: possession of a tax invoice/debit note, receipt of goods or services, tax actually paid to the Government, return under Section 39 furnished, and invoice/debit note appearing in GSTR-2B.

Section 16(4): ITC on invoices/debit notes cannot be availed after 30th November following the end of the financial year or the date of filing the annual return, whichever is earlier.

Section 17(5) blocked credits include motor vehicles for passenger transport (seating capacity up to 13), food and beverages, club membership, health insurance, works contract for immovable property, and goods lost/stolen/destroyed.

Section 17(1)-(2): common credits are apportioned using the formula ITC credited = ITC availed × (exempt turnover ÷ total turnover); Section 17(3) treats certain activities as exempt supplies for reversal.

Registration thresholds: Section 22 - Rs.40 lakh for goods (Rs.20 lakh special category), Rs.20 lakh for services (Rs.10 lakh special category); Section 24 mandates compulsory registration for inter-State supply, casual taxable persons, and persons liable under reverse charge.

Section 31: invoice for goods must be issued on or before removal/delivery; for services, within 30 days of supply (45 days for banks and financial institutions); continuous supply has separate rules under Sections 31(4)-(6).

Rule 46 requires a tax invoice to bear supplier name, address, GSTIN, serial number, date, recipient details, HSN/SAC, description, quantity, taxable value, rate and amount of tax, and place of supply for inter-State supplies.

E-way bill under Rule 138 is required for movement of goods of value exceeding Rs.50,000 (Rs.1 lakh in some States for intra-State); validity is one day for up to 200 km and one additional day per 200 km thereafter; Part A can be filled by the supplier and Part B by the transporter.

Rule 138A: e-invoicing is mandatory for registered persons with aggregate turnover exceeding the notified threshold (Rs.5 crore); invoices must carry a QR code and be reported to the Invoice Registration Portal.

Return framework: GSTR-1 (outward supplies, monthly or quarterly under QRMP), GSTR-3B (summary and payment), GSTR-4 (composition), GSTR-5 (non-resident), GSTR-6 (ISD), GSTR-7 (TDS), GSTR-8 (TCS), GSTR-9/9C (annual return/reconciliation).

Section 39(11) bars filing of GSTR-3B for a tax period if the return for any preceding period is not furnished; Section 37(4) and 39(10) similarly restrict GSTR-1 and GSTR-3B.

Electronic cash ledger and credit ledger under Section 49; Section 49A mandates that IGST credit be used first against IGST, then CGST, then SGST; CGST credit cannot be set off against SGST and vice versa.

Section 50: interest at 18% p.a. on delayed payment of tax; proviso reduces interest to 18% only on the portion of tax paid in excess of the amount available in the electronic credit ledger.

Refund under Section 54: application within two years from the relevant date; refund of unutilised ITC allowed for zero-rated supplies and inverted duty structure; Section 54(3) excludes refund where the supplier has passed on the benefit.

Zero-rated supply refunds: Rule 89(4) formula for refund of ITC on zero-rated supplies = (turnover of zero-rated supply × net ITC) ÷ adjusted total turnover; Rule 89(5) covers inverted duty structure.

Section 61: notice for scrutiny of returns (ASMT-10); Section 62: best judgment assessment (ASMT-13) if return not filed; Section 63: assessment of unregistered persons; Section 64: summary assessment in cases of evasion.

Section 67: inspection, search and seizure - search requires authorisation by a Joint Commissioner or above; Section 69 empowers arrest; Section 70 summons; Section 73/74 demand for tax not paid (73 for non-fraud, 74 for fraud) with limitation periods of 2 years and 5 years respectively.

Section 73/74: penalty of 10% of tax or Rs.10,000 (whichever is higher) under Section 73; penalty equal to tax under Section 74; Section 74A (from 2024) consolidates demand provisions with a uniform 42-month limitation from the due date of the annual return.

Section 107: appeal to the Appellate Authority within three months of communication of the order, with a pre-deposit of 10% of the disputed tax (maximum Rs.20 crore CGST); Section 112: appeal to the GST Appellate Tribunal within three months, with an additional pre-deposit of 10% (maximum Rs.20 crore).

Section 108: the Commissioner may revise an order passed by a subordinate authority within six months; Section 109 constitutes the GST Appellate Tribunal; Section 117 covers appeal to the High Court and Section 118 to the Supreme Court.

Advance ruling under Chapter XVII (Sections 95-106): application to the Authority for Advance Ruling (AAR) in Form GST ARA-01; appeal to the Appellate Authority for Advance Ruling within 30 days; ruling binds the applicant and the concerned officer.

Offences under Section 122: penalty of Rs.10,000 or the tax involved, whichever is higher, for specified contraventions; Section 132 makes offences cognizable and non-bailable only above the monetary thresholds (Rs.5 crore, Rs.2 crore, Rs.1 crore depending on the offence).

Section 132(1): imprisonment of up to 5 years with fine for tax evasion exceeding Rs.5 crore; 3 years for Rs.2-5 crore; 1 year for Rs.1-2 crore; compounding under Section 138 with minimum compounding amount.

Transitional provisions: Sections 139-142 carry forward ITC on stock, credit of tax paid under existing law, and pending refunds; Section 140 allows carry-forward of CENVAT/VAT credit into the GST regime subject to conditions.

Section 141: job work provisions during transition; Section 142(11): no double levy on supplies spanning the transition; Section 174 of the CGST Act repeals the earlier laws (Central Excise Act, Chapter V of the Finance Act, 1994, State VAT Acts).

Section 128: waiver of late fee; Section 125: general penalty up to Rs.25,000; Section 126: general disciplines for imposing penalty - minor breaches not to be penalised, and penalty must be commensurate with the breach.

Section 12 Customs Act, 1962 is the charging section: duties are levied at the rates specified in the First Schedule (import) and Second Schedule (export) of the Customs Tariff Act, 1975 on goods imported into or exported from India.

Types of duties: Basic Customs Duty (BCD), Social Welfare Surcharge at 10% of BCD (with exemptions), IGST under Section 3(7) of the Customs Tariff Act, Compensation Cess, anti-dumping duty (Section 9A), countervailing duty (Section 9), and safeguard duty (Section 8B).

Valuation of imported goods: transaction value under Rule 3 of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007, with additions under Rule 10 (freight, insurance, commission, royalties, assists) and sequential methods under Rules 4-9.

Rule 10(2): cost of transport, loading, unloading and handling charges up to the place of importation are included; insurance is included at actual or 1.125% of FOB if not ascertainable; landing charges are no longer added separately.

Export valuation: transaction value under Rule 3 of the Customs Valuation (Determination of Value of Export Goods) Rules, 2007; export duty is levied under Section 12 on the notified tariff rate.

Duty drawback under Section 75 (re-export of imported goods) and Section 74 (refund of import duty on re-exported goods); Section 75A covers drawback on imported materials used in export goods; the All Industry Rate and Brand Rate mechanisms apply.

Section 74 drawback: 98% of duty if re-exported within 3 months, 96% within 6 months, 94% within 9 months, 92% within 12 months, and 90% within 15 months; Section 75A drawback is at the rate of the All Industry Rate or Brand Rate.

Negative list and prohibited goods under Section 11 of the Customs Act; Section 111 covers confiscation of improperly imported goods; Section 113 covers improperly exported goods.

Bill of entry under Section 46 is filed for imported goods; Bill of lading/airway bill is the transport document; the importer must file the bill of entry before the end of the next day of arrival of the vessel or aircraft.

Section 48: if the bill of entry is not filed within 30 days of unloading, the goods may be sold; Section 30: the person in charge of the conveyance must deliver an arrival manifest.

Import general manifest (IGM) and export general manifest (EGM) are the key transport documents; Section 41 covers the arrival manifest; Section 35 covers the EGM.

Warehousing: Sections 57-73; a public warehouse under Section 57, a private warehouse under Section 58, and a special warehouse under Section 58A; Section 61 provides a 90-day period for removal of goods from a warehouse.

Bonded warehousing allows deferment of duty until removal; Section 65 permits manufacture and other operations in a bonded warehouse; Section 68 covers clearance of warehoused goods for home consumption.

Baggage: Sections 77-81 and the Baggage Rules, 2016 - duty-free allowance for an Indian resident returning from abroad is Rs.50,000 (Rs.1,00,000 for a person returning after more than one year); the flat rate of duty on baggage under Section 81 is 35% (with notified reductions).

Postal goods: Sections 82-84; the postal authority presents a list of postal articles under Section 82; Section 83 allows the Customs officer to open and examine postal articles; Section 84 covers the disposal of undelivered postal articles.

Transit and transhipment: Sections 52-56; goods in transit are not subject to duty at the place of transit; Section 53 permits transit of goods without payment of duty.

Section 28: notice for demand of duty within two years (five years for collusion, wilful misstatement or suppression of facts); Section 28AAA covers recovery of duty where an instrument is obtained by fraud.

Section 128: appeal to the Commissioner (Appeals) within 60 days of communication of the order; Section 129A: appeal to the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) within 60 days; Section 130: appeal to the High Court; Section 130E: appeal to the Supreme Court.

Section 129E: pre-deposit of 7.5% of the duty demanded (or penalty) for an appeal to the Commissioner (Appeals) and CESTAT; the amount is refundable if the appeal succeeds.

Section 127: the Settlement Commission (now largely replaced by the Interim Board under the Finance Act, 2021) allowed settlement of cases involving duty evasion; Section 127A covers the application procedure.

Offences under Sections 132-135: Section 132 covers false declaration, evasion of duty, and prohibited goods; Section 135 covers the evasion of duty or prohibition; Section 137 covers the presumption of culpable mental state.

Section 104: power to arrest; Section 105: power to search premises; Section 106: power to stop and search conveyances; Section 100: power to search persons; Section 102: power to seal.

FEMA, 1999: Section 3 prohibits dealing in foreign exchange except as permitted; Section 6 covers capital account transactions; Section 7 covers export of goods and services; Section 13 provides penalties for contravention.

COFEPOSA, 1974: preventive detention for smuggling and foreign exchange violations; detention orders are issued by the Central or State Government; the Advisory Board must review the detention within five weeks.

Section 135 of the Customs Act: evasion of duty or prohibition - imprisonment up to 2 years where the market value of goods exceeds Rs.1 crore, and up to 7 years where it exceeds Rs.1 crore and the goods are notified.

Section 7 IGST Act: inter-State supply includes supply where the location of the supplier and the place of supply are in different States/Union Territories; Section 8 covers intra-State supply.

Section 7(3): supply of goods to or by a Special Economic Zone developer or unit is treated as inter-State supply; Section 7(5) covers imports; Section 7(5)(b) covers supplies to a place outside India.

Section 8(2): supply of goods to or by an SEZ unit is intra-State only if the supplier and the SEZ unit are in the same State; otherwise it is inter-State.

IGST is levied under Section 5 IGST Act at the rate notified, which is the sum of the CGST and SGST rates; IGST on imports is levied under Section 3(7) of the Customs Tariff Act, 1975.

Section 16 IGST Act: zero-rated supply includes export of goods/services and supply to an SEZ unit/developer; the supplier may export under bond/LUT without payment of IGST or pay IGST and claim a refund.

Section 17 IGST Act: apportionment of IGST revenue between the Union and the States is done by the GST Council on the basis of the destination principle; Section 18 provides for the mechanism of apportionment.

Section 20 IGST Act: provisions of the CGST Act relating to registration, returns, refunds, assessment, appeals and penalties apply mutatis mutandis to IGST.

Place of supply for inter-State transactions determines whether CGST+SGST or IGST applies; the same transaction cannot attract both IGST and CGST+SGST.

Section 12(1) IGST Act: where the supply involves movement of goods, the place of supply is the location where the goods are handed over for delivery to the recipient.

The Foreign Trade (Development and Regulation) Act, 1992 empowers the Central Government to make the Foreign Trade Policy; the current FTP is the Foreign Trade Policy 2023, effective from 1 April 2023.

Importer-Exporter Code (IEC) is mandatory under Section 7 of the FTDR Act; it is issued by the DGFT and is generally valid for the lifetime of the entity unless suspended or revoked.

SEZ: the SEZ Act, 2005 and SEZ Rules, 2006 govern; SEZs are deemed foreign territory for trade operations and duties; supplies to SEZs are zero-rated under GST; SEZ units enjoy a 100% income tax exemption on export income for the first 5 years under Section 10AA.

EOU: 100% Export Oriented Units are governed by the Foreign Trade Policy; they must achieve a positive Net Foreign Exchange (NFE) of at least 1 over a five-year period; they can procure duty-free inputs and capital goods.

EPCG scheme: allows import of capital goods at zero customs duty subject to an export obligation of six times the duty saved over six years; the EPCG authorisation is issued by the DGFT.

Advance Authorisation: allows duty-free import of inputs for export production subject to a positive value addition (minimum 15% for most products); the export obligation must be fulfilled within 18 months.

Duty Drawback and RoDTEP: the RoDTEP scheme (Remission of Duties and Taxes on Exported Products) replaced MEIS from 1 January 2021 and provides refund of embedded taxes through transferable duty credit scrips.

Status Holder: under the FTP 2023, exporters are categorised as One Star, Two Star, Three Star, Four Star and Five Star based on export performance; benefits include priority treatment and self-declaration.

Deemed exports under Section 147 of the CGST Act: supplies to EOU/SEZ/merchant exporters qualify for refund of tax paid; the supplier can claim a refund under Section 54 or supply under LUT.

The Chartered Accountants Act, 1949 and the Code of Ethics issued by ICAI govern professional conduct; the Council's Guidelines on Advertising and Website apply to indirect tax practice.

Section 35 of the CGST Act: every registered person must keep records for six years from the due date of filing the annual return for the year; Section 36 covers the period of retention.

Section 45: the final return must be filed within three months of the date of cancellation or surrender of registration; Section 29 covers cancellation of registration.

Section 31(3)(f): a registered person supplying exempt goods or paying tax under reverse charge must issue a bill of supply; a receipt voucher is issued under Rule 50 when advance is received.

Section 34: credit notes and debit notes must be issued and declared in the return for the month in which they are issued; the recipient must reverse the ITC if a credit note is issued.

Professional ethics: a CA must not accept an audit or certification assignment where he is the statutory auditor of the same entity; Section 144 of the Companies Act, 2013 restricts certain non-audit services.

Section 148 of the CGST Act: the Commissioner may notify special procedures for a class of registered persons, including e-invoicing and special audit; Section 66 covers special audit by a chartered accountant or cost accountant.

Section 35(5): every registered person whose turnover exceeds Rs.2 crore must get his accounts audited by a chartered accountant or cost accountant; the reconciliation statement in GSTR-9C is required above the notified threshold.

Section 141 of the CGST Act: job workers must maintain records of goods received and processed; the principal must declare the job work in Form GST ITC-04 within the prescribed period.

IGST is levied under Section 5 of the IGST Act, 2017 on all inter-State supplies of goods or services, except alcoholic liquor for human consumption; the rate is the sum of the CGST and SGST rates.

Section 7(1) IGST Act: a supply is inter-State where the supplier and place of supply are in different States; Section 7(2) covers import; Section 7(3) covers supply to/from SEZ; Section 7(4) covers supply in a taxable territory by a person outside India.

Section 8(1): intra-State supply is where the supplier and place of supply are in the same State; Section 8(3) excludes supplies in a territorial waters zone; Section 8(4) excludes supplies by a person in a non-taxable territory.

Section 10 IGST Act: place of supply for goods (movement, no movement, bill-to-ship-to); Section 12: place of supply for services in India; Section 13: cross-border services.

Section 16: zero-rated supply - export of goods/services and supply to an SEZ unit/developer; the supplier may export under bond/LUT or pay IGST and claim a refund.

Section 17: apportionment of IGST between the Union and the States; Section 18: the mechanism for apportionment; Section 19: the GST Council's role in apportionment.

Section 20: the CGST Act applies mutatis mutandis to IGST; Section 21: the IGST Act overrides other laws in case of inconsistency.

Section 12(3) IGST Act: place of supply for restaurant and catering services is the location where the services are performed; Section 12(4): for admission to an event, the place where the event is held.

Section 12(6): for services relating to goods, the place of supply is the location of the recipient where the goods are made available; Section 12(7): for transportation of goods, the recipient's registered location (B2B).