TMI BlogINTERPRETATION OF CENTRAL GOODS AND SERVICES TAX (CGST) ACT (PART-9) (Meaning of Important Terms)X X X X Extracts X X X X X X X X Extracts X X X X ..... INTERPRETATION OF CENTRAL GOODS AND SERVICES TAX (CGST) ACT (PART-9) (Meaning of Important Terms) - By: - Dr. Sanjiv Agarwal - Goods and Services Tax - GST - Dated:- 12-6-2017 - - This part of the series contains meanings of certain terms covered in Section 2 of the CGST Act, 2017 . These are Non-resident Taxable Person, Output Tax, Outward Supply, Person, Place of Business, Principal Place of Business and Principal Supply. Non-resident Taxable Person [ Section 2(77) ] 'Non-resident taxable person' means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a. Not resident taxable person has no fixed place of business or residence in India. Such person occasionally undertakes transactions of supply of goods or services or both, as agent or principal or in any other capacity. It is important to note that the features of Casual taxable person and non-resident taxable person are same except for the fact that the non-resident taxable person does not have a fixed place of business in India whereas, casual taxable person does not have a fixed place of business in that taxable territory. Due to their nature of activities being the same, same provisions of law are applicable to both such persons in relation to their registration requirements, filing of returns etc. Output Tax [ Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 2(82) ] 'Output tax' in relation to a taxable person, means the tax chargeable under this Act on taxable supply of goods or services or both made by him or by his agent but excludes tax payable by him on reverse charge basis. The tax payable on the supply of taxable goods and services by a registered taxable person would be considered as output tax. The amount of tax payable on reverse charge basis by such registered taxable person would not be termed as output tax. It may be noted that output tax has been defined separately under IGST law. Output tax is the tax liability payable under CGST Act on the supply of goods and services made by a taxable person. It is important to note that even though tax on reverse charge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis is also payable by a taxable person but payment of such tax will not be considered to be output tax. Outward S upply [ Section 2(83 )] 'Outward supply' in relation to a taxable person, means supply of goods or services or both, whether by sale, transfer, barter, exchange, licence, rental, lease or disposal or any other mode, made or agreed to be made by such person in the course or furtherance of business. The term outward supply in relation to a person has been defined to mean : supply of goods and / or services, whether by sale, transfer, barter, exchange, license, rental, lease or disposal, made or agreed to be made by such person, in the course or furtherance of business, but excludes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the cases where the tax is payable on reverse charge basis. The supply of goods and/or services by a person by any means in the course or furtherance of business will be treated as outward supply. The amount of turnover on which tax is payable on reverse charge basis will not be includable in outward supply. Person [ Section 2(84 )] 'Person' has been defined to include : an individual; a Hindu undivided family; a company; a firm a limited liability partnership an association of persons or a body of individuals, whether incorporated or not, in India or outside India; any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 2(45) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Companies Act, 2013 anybody corporate incorporated by or under the laws of a country outside India; a co-operative society registered under any law relating to cooperative societies; a local authority; government; society as defined under the Societies Registration Act, 1860; trust; and every artificial juridical person, not falling within any of the preceding sub-clauses. 'Person' would therefore, include both, natural persons as well as artificial juristic persons. Place of Business [ Section 2(85) ] 'Place of business' has been defined as an inclusive definition and it includes - a place from where the business is ordinarily carried on, and includes a warehouse, a godown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any other place where a taxable person stores his goods, provides or receives goods and/or services; or a place where a taxable person maintains his books of account; or a place where a taxable person is engaged in business through an agent, by whatever name called. Place of business would include the following places : place from where business is ordinarily carried on, warehouse, godown, any other place used for storing goods or place to provide or receive goods or services by taxable person, place where books of accounts are maintained by taxable person (it may be place of business of agency or any professional), place from where a taxable person is engaged in business through agent by whatever name ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled (like commission agent, C F agent, consignment agent etc) It will include any one or more or all of the aforementioned places Registration of a taxable person is done in reference to his place of business. Address of place of business becomes the registered address, where all the correspondence in relation to GST law will be done. Even the place where the business is carried through an agent will also be called place of business and will be required to be registered. Principal Place of Business [ Section 2(89 )] 'Principal Place of Business' means the place of business specified as the principal place of business in the certificate of registration. 'Principal place of business' means the place of bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness specified as the principal place of business in the certificate of registration. For a place of business to be a 'principal place of business', following conditions are essential It should be a place of business It should be specified as such in registration certificate Taxable person should keep and maintain the accounts and records Principal Supply [ Section 2(90 )] 'Principal Supply' means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary. The term principal supply needs to be read in reference to 'composite supply'. As composite supply consists of tw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o or more than two goods and / or services, one of such will be principal supply and other goods and / or services will be termed as ancillary supply. In the case of composite supply, the rate of tax is determined in reference to rate of tax applicable on principal supply constituted in the contract of composite supply. Principal supply in a case of composite supply will be determined on the basis of predominant element of composite supply. To have this supply is the objective of the recipient of such supply and other items called ancillary items of goods and / or services act as a means for better enjoyment of the principal supply. It is the predominant element of composite supply. (To be continued.....) - - Scholarly arti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cles for knowledge sharing authors experts professionals Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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