21-May-2020 Analysis of Non-taxable Supply, No Supply, Exempted Supply, Nil-Rated Supply and Zero-Rated Supply under GST Part II
gst goods-service-tax gst-council msme msme-gst-exemption msme-gst-registration msme-gst-benefits msme-gst-relief msme-loansWe had examined all the terms in Part 1 of this article. Now that we have understood these terms let’s discuss certain issues that taxpayers face when classifying the Supplies.
We had examined all the terms in Part 1 of this article. Now that we have understood these terms let’s discuss certain issues that taxpayers face when classifying the Supplies.
1. Calculation of Aggregate Turnover
The term Turnover as understood generally, differs from “Aggregate Turnover” as per the GST law. As per section 2(6) of the CGST Act, Aggregate Turnover means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess.
The amount of Aggregate Turnover is a criteria for applicability of many of the provisions of the GST law, like Registration, Filing of Returns, Audit, etc. Therefore it is important to calculate Aggregate Turnover accurately as applicability of many of the provisions of the GST law would be affected based on the amount of Aggregate Turnover calculated.
The following
table will summarize what supplies are to be included and are not to be
included while calculating Aggregate Turnover
|
Particulars |
Included (Y/N) |
|
Outward
supplies on which GST is charged |
Y |
|
Outward
Supplies on which GST is paid by Recipient on Reverse Charge |
Y |
|
Inward Supplies
on which tax is payable on Reverse Charge |
N |
|
Nil-Rated
Supplies |
Y |
|
Zero-Rated
Supplies |
Y |
|
Exempted
Supplies |
Y |
|
Non-Taxable
Supplies |
Y |
|
No Supply |
N |
|
CGST/SGST/UTGST/IGST/Cess
charged on outward supplies |
N |
2.
Calculation of
“Exempted supply” for the purpose of reversal of ITC
Exempted Supply as defined in Section 2(47) of the CGST Act is not same as Exempted Supply on which ITC is to be reversed as per Section 17 of the CGST Act read with Rules 42 and 43.
The following
table would help us to understand what is to be included and not to be included
in calculation of exempt supply for the purpose of reversal of ITC
|
Particulars |
Included (Y/N) |
|
Exempt supplies
as per Section 2(47) (Refer Note) |
Y |
|
Nil-Rated Goods |
Y |
|
Non-taxable
Goods |
Y |
|
Outward Supplies on which GST is
paid by Recipient on Reverse Charge |
Y |
|
Sale of land |
Y |
|
Sale of building (subject to
paragraph 5(b) of Sch. II) |
Y |
|
Transaction in securities |
Y |
|
No Supplies |
N |
|
Activities/transactions specified in
Sch III (except para 5 of the said Sch) |
N |
|
Zero-Rated Supplies |
N |
|
Interest/discount earned by way of
accepting deposits, extending loans or advances (Refer Note) |
N |
|
Services of transportation of goods
by a vessel from customs station of clearance in India to a place outside
India (Refer Note) |
N |
Note
Explanation to Rules 42 and 43 states that value of exempt supplies for the purposes of the aforementioned rules shall exclude the following:
1.Services of accepting deposits, extending loans or advances in so far as the consideration is of interest or discount, except in case of a banking company or a financial institution including a non-banking financial company, engaged in supplying services by way of accepting deposits, extending loans or advances; and
2.Services by way of transportation of goods by a
vessel from the customs station of clearance in India to a place outside India
Please feel free to write to sohail@apmh.in / info@apmh.in for any further queries on the above blog.