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GST TERMINOLOGY (PART -2)

Goods and Services Tax - GST - By: - Dr. Sanjiv Agarwal - Dated:- 10-10-2016 Last Replied Date:- 18-10-2016 - The provisions of model GST law prescribes various types of persons for different purposes and taxation. Some of these are being used for first time. Let's discuss these terms in relation to person or taxable persons in section 2 model GST law, viz, Agent (Clause 5) Agriculturist (Clause 8) Casual taxable person (Clause 21) Manufacturer (Clause 66) Agent [Section 2(5)] 'Agent' .....

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use 74) Caries on business of supply of goods or services on behalf of another, or Carries on business of receipt of goods or services on behalf of another An agent would include anyone of - factor broker commission agent arhatia del credere agent intermediary auctioneer mercantile agent or any such other person by whatever name called In terms of the aforementioned definition, a person shall be considered as an agent irrespective of whether agency is disclosed or not and by whatever name called .....

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lled an agency. Thus, all non-individual agents could be termed as agency. For being called as agency, that agency must represent some other concern or person and by virtue of that representation, is called its agency or agency. The agency acts and works on behalf of his or its principal and there must be some other person on where behalf it is acting. Literally, agency means a relationship between two persons, by agreement or otherwise, where one may act on behalf of the other (the principal). .....

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for himself any net benefit resulting from the work performed. It is an fiduciary relationship created by express or implied contract or by law in which one party (agent) may act on behalf of another party (principal) and bind that other party by his words or actions. 'Intermediary' means a broker, an agent or any other person, by whatever name called, who arranges or facilitates a provision of a service (hereinafter called the main service) or a supply of goods, between two or more per .....

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m the value of taxable service subject to some conditions an specified in valuation rules. GST shall be levied for transactions between a principal and an agent as a deemed supply. Any amount of consideration (e.g. commission, brokerage etc.) will be subject to GST. Agriculturist [Section 2(8)] 'Agriculturist' means a person who cultivates land personally, for the purpose of agriculture. For this purpose, 'agriculture' is defined in clause (7). Accordingly, 'agriculture' .....

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iculturist' - should be a person (defined in Clause 74) should cultivate land personally such cultivation should be for the purpose of agriculture. The proposed definition read with section 9 implies that that if a person is agriculturist, then he is not required to register for GST and pay taxes. Being a non-taxable person, GST would not apply to him irrespective of his turnover from non-agricultural sources. One who is engaged in agriculture is called agriculturist, i.e. in the field of gr .....

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ne s own account- (a) by one s own labour, or (b) by the labour of one s family, or (c) by servants on wages payable in cash or kind (but not in crop share) or by hired labour under one s personal supervision or the personal supervision of any member of one s family; For this purpose, a widow or a minor or a person who is subject to any physical or mental disability or is a serving member of the armed forces of the Union, shall be deemed to cultivate land personally if it is cultivated by her or .....

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our or hired labour under own supervision or of his family. In case of HUF, it could be done by any member of HUF. The explanation clarifies that cultivation can be treated as being cultivated personally if it is done by servants or by hired labour in case of widow, minor, physically or mentally disabled persons or serving members of armed forces of Union. Under the present law, Agriculture has been defined in Section 65B(3) of the Act as cultivation of plants and rearing or breeding of animals .....

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d the rearing of animals to provide food, wool, and other products. According to Wikipedia, agriculture (also called farming or husbandry) is the cultivation of animals, plants, fungi, and other life forms for food, fiber, and other products used to sustain life. Agriculture was the key development in the rise of sedentary human civilization, whereby farming of domesticated species created food surpluses that nurtured the development of civilization. The study of agriculture is known as agricult .....

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icultural income may also be out of GST ambit. Ideally, non agricultural income of agriculturist should be subjected to tax. Casual Taxable Person [Section 2(21)] 'Casual taxable person' means a person who occasionally undertakes transactions involving supply of goods and/or services in the course or furtherance of business whether as principal, agent or in any other capacity, in a taxable territory where he has no fixed place of business. For a casual taxable person, following tests are .....

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2(75) and taxable territory in section 2(98) of model law. Casual taxable person are required to be registered u/s 19 read with Schedule-III. The exemption from registration based on threshold of aggregate turnover would not apply to casual taxable persons. Thus, even where their turnover is below the minimum threshold, registration would be required. Manufacturer [Section 2(66)] 'Manufacturer' shall have the meaning assigned to it by the Central Excise Act, 1944. Under Central Excise A .....

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