TMI BlogIntroduction & Meaning - Place of SupplyX X X X Extracts X X X X X X X X Extracts X X X X ..... tory. Thus, there shall be two components of GST: (i) Central tax (CGST), Levied collected under the authority of CGST Act, 2017 passed by the Parliament. (ii) State tax (SGST), Levied collected under the authority of SGST Act, 2017 passed by respective State. Why the third tax in the name of IGST? Before discussing the IGST Model and its features, it is important to understand how inter-State trade or commerce is being regulated in the present indirect tax system. It is significant to note that presently the Central Sales Tax Act, 1956 regulates the inter-State trade or commerce (hereinafter referred to as CST ), the authority for which is constitutionally derived from Article 269 of the Constitution. Further, as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on and exhibition of film could be assigned for many states in a single transaction or an advertisement or a programme is broadcasted across the country at the same time. etc. 2. The Central Sales Tax Act, 1956 suffers from the following shortcomings. CST is collected and retained by the origin State, which is an aberration. Any indirect tax, by definition, is a consumption tax, the incidence of which, is borne by the consumer. Logically, the tax must accrue to the destination State having jurisdiction over the consumer. Input Tax Credit (hereinafter referred to as ITC) of CST is not allowed to the buyer which, results in cascading of tax (tax on tax) in the supply chain. Various accounting forms are required to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n B2B (Business to Business) B2C (Business to Consumer) transactions, as B2B transactions are wash transactions since the ITC is availed by the registered person (recipient) and no real revenue accrues to the Government (iii) Separate provisions for the supply of goods and services have been made for the determination of their place of supply. Separate provisions for the determination of the place of supply in respect of domestic supplies and cross border supplies have been framed. Provisions for determination of place of supply in GST Law Basis the above guiding principles, Chapter V of the IGST Act [Sections 10 to 13] prescribes the provisions relating to place of supply of goods and services in domestic as well as cross-bord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erritory. Such supplies shall be treated as the supply of goods or services in the course of inter-State trade or commerce. Supply of goods or services or both from one State or Union Territory to another State or Union Territory Import of goods or services or both till they the cross customs frontier Export of goods or services or both Supply of goods or services or both to/by SEZ Supplies to international tourists Any other supply in the taxable territory which is not intra - State supply (ii) Intra - State supply It has been defined as any supply where the location of the supplier and the place of supply are in the same State or Union Territory. Supply of goods within the State or Union ..... X X X X Extracts X X X X X X X X Extracts X X X X
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