The Goods and Services Tax (GST) in India is a comprehensive, multi-stage, destination-based tax that replaced several indirect taxes imposed by the state and central governments. The GST Act was passed in the Lok Sabha on 29th March 2017 and came into effect from 1st July 2017.
Utilizing its profound legal expertise, the legal squad at SimranLaw, a renowned law firm based in Chandigarh, explicates the crucial legal provisions linked to GST in India, thereby educating readers and amplifying their comprehension of the law while referencing pertinent case laws and judgements.
Key Legal Provisions of GST
1. GST Structure (Section 9 & Section 8): GST is imposed on every value addition at each stage of the supply chain. Central GST and State GST are charged for intra-state transactions while Integrated GST is imposed on inter-state transactions.
2. Composite and Mixed Supply (Section 2(30) & Section 2(74)): Differentiation between composite and mixed supply is critical to determining the tax rate that applies. Composite supply implies a supply made by a taxable person to a recipient comprising two or more supplies of goods or services or any combination thereof, which are naturally bundled and supplied in conjunction with each other. Mixed supply means two or more individual supplies of goods or services made in conjunction with each other for a single price where such supply does not constitute a composite supply.
3. Time of Supply (Section 12 & Section 13): It is integral to determine GST’s liability. For goods, the time of supply is either when the goods are removed or made available to the recipient, invoiced, or paid for, depending on what happens first. For services, it’s generally the earlier of payment receipt or date of issuing the invoice.
4. Input Tax Credit (Section 16): One of the fundamental features of GST is the seamless flow of input credit across the chain (from the manufacturer to the consumer). Registered taxable persons are entitled to avail input tax credit on eligible business expenses.
5. Anti-profiteering (Section 171): This provision mandates that any reduction in the tax rate or benefit of input tax credit should be passed on to the consumer by way of a commensurate reduction in prices.
Relevant Case Laws
1. Bharti Telemedia Limited vs Union of India (2020): This case was focused on the interpretation of ‘composite supply’ under Section 2(30) of CGST Act. Court ruled that DTH broadcasting service along with the leasing of equipment would constitute a ‘composite supply.’
2. Safari Retreats Private Limited vs Chief Commissioner of Central Goods & Service Tax (2019): The Orissa High Court provided a landmark judgement regarding the concept of ‘input tax credit.’ The court ruled that denying the Input Tax Credit on the grounds that property is ‘non-saleable’ would discourage business entities from purchasing properties and harm the economy.
The GST law in India, with its intricate provisions, has assisted in subsuming numerous complex indirect taxes into a consolidated tax structure. The provisions discussed herein, elucidated by seasoned legal veterans at SimranLaw, contribute significantly towards a comprehensive understanding of GST’s legalities in India. Staying well-acquainted with these provisions can aid in navigating GST-related concerns with greater accuracy and efficiency.
Nonetheless, GST laws and provisions keep evolving, and it’s crucial to stay updated with the latest changes and rulings to ensure full compliance. Legal assistance from professionals like those at SimranLaw can prove invaluable in achieving this goal.