Charge of GST: formula sheet

Key formulas

Charge of CGST

CGST is levied on: intra-State supply of goods or services or both × value under section 15 × notified CGST rate

CGST is levied at notified rates not exceeding 20%. SGST or UTGST is a separate levy under State or UT law, charged in addition on the same value.

Tax on an intra-State supply

Total GST = CGST + SGST/UTGST, each = taxable value × its notified rate

For equal rates of r% each, total GST = 2r% of the taxable value.

Exclusion from levy

Alcoholic liquor for human consumption = outside CGST levy

Other alcohol-related items are not excluded merely because they involve alcohol. Check whether it is for human consumption.

Petroleum products

Supply of petroleum crude, HSD, petrol, natural gas and ATF = CGST leviable only from the date notified under section 9(2)

Section 9(2) gives the power to levy CGST on the supply of these five goods from a notified date, on the Council's recommendation. Until then, CGST is not levied on supplies of those goods. Related services are not covered by this rule.

Who pays

Taxable person pays; recipient pays where reverse charge is notified under section 9(3)

Section 9(3) applies only to categories of goods or services or both that the Government notifies. For those categories, the recipient is treated as the person liable for paying the tax, and all the provisions of the Act apply to the recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.

RCM tax payable

Tax payable by recipient = Value of notified supply × Rate of tax

Use the value and rate given in the question. Split into CGST + SGST for intra-state supplies, or charge IGST for inter-state supplies.

Who pays

Forward charge: Supplier pays. Reverse charge: Recipient pays.

Under RCM the supplier's invoice, if any, shows no GST on that supply.

Mode of payment

RCM tax is paid only from the electronic cash ledger

The input tax credit balance cannot be used to discharge RCM liability.

ITC on RCM

ITC = RCM tax paid, if the conditions for ITC are met and the credit is not blocked

Credit can be claimed only after the tax is paid. If the recipient makes exempt supplies or the credit is blocked, no ITC is available.

Time of supply of goods under RCM

Earliest of: date of receipt of goods, date of payment, date immediately following 30 days from the supplier's invoice date

If it is not possible to determine the time by these means, the date of entry in the recipient's books applies.

Time of supply of services under RCM

Earlier of (a) the date of payment, or (b) the date immediately following 60 days from the invoice date. If the invoice is not issued, the earlier of the payment date or the date of entry in the books.

The date of provision of service is not used. Count the 60 days from the day after the invoice date, then take the next day.

Time of supply of imported services from associated enterprises

Earlier of the date of entry in the recipient's books or the date of payment

This applies to import of services where the supplier is an associated enterprise located outside India.

Sub-section (1): general exemption by notification

Public interest + Council's recommendation + notification → exemption of specified goods/services, absolute or conditional, whole or part of tax

Applies to all suppliers of the specified description. Conditions, if any, must be satisfied for the exemption to apply.

Sub-section (2): special order

Public interest + Council's recommendation + special order in each case + exceptional circumstances stated in order

Case-specific. The order must state the exceptional circumstances.

Sub-section (3): explanation

Explanation inserted within 1 year of issue of notification/order → deemed part of the original notification/order, from its date of issue

Used only to clarify scope or applicability. It is deemed inserted as part of the original, so it is retrospective by design.

The Explanation to section 11 (absolute exemption)

Absolute exemption → supplier shall not collect tax in excess of tax actually leviable

If the whole tax is exempt, nothing may be collected as tax.

Exempt supply (section 2(47))

Exempt supply = supply attracting nil rate of tax + supply wholly exempt (section 11 CGST / section 6 IGST) + non-taxable supply

Important for ITC reversal and for classifying supplies in returns.

Rule of section 82

Amount payable to Government under CGST Act by a taxable person (or any other person) = first charge on that person's property

State it as a priority claim on the property of the person who owes the amount.

Override clause

Applies 'notwithstanding anything to the contrary contained in any law for the time being in force, save as otherwise provided in the Insolvency and Bankruptcy Code, 2016'

Use this phrase to explain why GST dues have statutory priority over other creditors' claims, and remember the IBC carve-out. Conflicts with other statutes, such as SARFAESI, have been litigated, so rest the answer on this wording.

IBC exception

Insolvency or liquidation under the IBC, 2016 = IBC priority governs, not the section 82 first charge

In liquidation, Government dues rank lower in the section 53 waterfall than insolvency resolution costs, workmen's dues and secured creditors. The IBC order governs, not section 82.

Nature of dues covered

Tax + interest + penalty payable under the Act

Only amounts actually payable under the Act are secured. Say so explicitly.

Section 81 trigger

Proceedings pending against a taxable person + charge created / property parted with + intention to defraud revenue ⇒ charge or transfer void against the tax claim

All three elements must be present. Intention to defraud is the deciding element.

Scope of voidness

Void only 'as against' tax or other sum payable as a result of those proceedings

The transfer is not wiped out for every purpose. It is ignored for the Government's recovery.

Safe harbour (proviso)

Not void if: adequate consideration + good faith + without notice of the proceedings or the tax payable; or with previous permission of the proper officer

The three transferee conditions work together. Failing any one of them removes the protection, unless the officer's previous permission was taken.

Timing rule

Transfer before proceedings begin ⇒ section 81 not attracted

Such a transfer may be examined under other provisions, such as the tax-as-first-charge rule, but not under section 81.

Duty under section 68

Consignment value > prescribed amount ⇒ person in charge of conveyance must carry prescribed documents and devices

The usual threshold for an e-way bill is ₹50,000 consignment value under Rule 138 of the CGST Rules. Irrespective of value, an e-way bill is required (with the Rule 138 conditions) for inter-State movement of goods for job work by a registered person, and for inter-State supply of handicraft goods by a person exempt from registration under clauses (i) and (ii) of section 24. Do not apply this to handicraft goods in general. Check whether the question gives a state-specific or goods-specific relaxation.

Value of consignment for the threshold

Value = value under section 15 declared in the invoice, bill of supply or delivery challan + CGST + SGST/UTGST + IGST + cess charged in that document. Value of exempt supplies and tax payable under reverse charge are not included.

This is the consignment value as explained in Rule 138 of the CGST Rules. Tax charged in the document is included. A ₹45,000 taxable value at 18% gives ₹53,100, which crosses ₹50,000. Exempt goods are left out only where one invoice covers both exempt and taxable goods. Tax payable under reverse charge is not charged in the supplier's invoice, so there is nothing to add for it and nothing to subtract from the invoice figure.

Documents to be carried

Invoice or bill of supply or delivery challan + e-way bill (copy, number, or mapped RFID/electronic device as allowed)

Delivery challan is used where goods move without an invoice, for example job work or supplies not yet invoiced.

Person responsible

Person in charge of the conveyance

Not the owner of goods. The driver or the transporter's representative must produce the documents.

Officer's power

Intercept conveyance ⇒ verify documents ⇒ physical verification only with specific authorisation

Physical verification of goods needs the specific authorisation of the Commissioner or an officer authorised by him. If further verification is wanted after an earlier one, the officer must record the reasons in writing (Rule 138C of the CGST Rules).

Reporting of verification

Summary report in Part A of FORM GST EWB-03 within 24 hours of inspection; final report in Part B within 3 days of inspection

These are the time limits in Rule 138C of the CGST Rules. Reports are filed in the prescribed form on the e-way bill portal. The Commissioner can extend the 3-day period for Part B for sufficient reasons, up to a further 3 days.

Repeat verification

Once verified in one State ⇒ no further physical verification elsewhere unless specific information of evasion

A standard rule that students forget. Specific information must exist, not a hunch.

Quick revision

• Section 9 of the CGST Act levies CGST on intra-State supplies of goods or services or both, on the value determined under the valuation provision. IGST is levied on inter-State supplies under Section 5 of the IGST Act.
• The rate of GST has a legal ceiling, and rates are notified on the Council's recommendation.
• Certain goods, such as alcohol for human consumption, are outside GST. Some petroleum products are taxed only from a date to be notified.
• Under reverse charge, the recipient is liable to pay the tax instead of the supplier.
• Under Section 9(3), tax is paid on reverse charge on notified categories of goods or services. Under Section 9(4), the recipient pays tax on notified categories of goods or services received by a registered person from an unregistered supplier. Only notified categories attract it, not all supplies from unregistered suppliers.
• Composition under Section 10 is optional and meant for small taxpayers. Eligibility limits and rates come from notifications.
• A composition person cannot collect tax from the recipient and cannot claim input tax credit.
• A composition person issues a bill of supply, not a tax invoice.
• General exemption under Section 11(1), absolute or conditional, needs the Council's recommendation and public interest. A special order under Section 11(3) is issued in exceptional circumstances and does not need a Council recommendation.
• Section 82: tax, interest or penalty payable by a taxable person or any other person is a first charge on his property, notwithstanding anything in any other law, but subject to the Insolvency and Bankruptcy Code.
• Section 81: where a person, after any amount has become due from him on account of tax, interest or penalty, creates a charge on or parts with property with intent to defraud the revenue, the charge or transfer is void as against any claim for tax or other sum payable. It is not void if made for adequate consideration, in good faith and without notice of the tax or sum payable, or with the previous permission of the proper officer. Section 83 is a different provision: it deals with provisional attachment.
• The proper officer may inspect goods in movement, and the person in charge of the conveyance must produce the prescribed documents.

Common mistakes

• Charging GST on alcoholic liquor for human consumption Fix: Remember that section 9(1) itself excludes it. Read for words like 'for human consumption' and exclude only those supplies.
• Applying CGST and SGST to an inter-State supply Fix: Always compare location of supplier with place of supply before choosing the tax. Section 9 applies only to intra-State supplies.
• Assuming RCM applies to every purchase from an unregistered person. Fix: Apply RCM only when the supply and the recipient fall in the notified class. Otherwise treat it as an ordinary purchase.
• Paying RCM tax by using the ITC balance. Fix: State that RCM is paid through the electronic cash ledger. Claim ITC separately after payment.
• Saying exemption can be given by the Government alone, without the Council. Fix: Always write 'on the recommendation of the Council, in public interest' when stating the power.
• Treating a special order as a general exemption available to all suppliers. Fix: Remember: notification is general; special order is in each case and needs exceptional circumstances stated in it.
• Saying the charge applies only to the registered person's immovable property. Fix: Write 'property' generally. It is not limited to immovable property.
• Treating the charge as applying to anyone's property connected with the transaction. Fix: The charge is on the property of the person who owes the amount. Other persons' liability comes from separate sections.
• Applying section 81 to a transfer made before any proceedings began. Fix: Always fix the date of the transfer against the date proceedings started. No pending proceedings means no section 81.
• Saying the transfer is void for all purposes. Fix: Write that it is void only as against the claim for tax or other sum payable as a result of the proceedings.

Exam tips

• In written answers, start with the provision: 'Section 9(1) levies CGST on intra-State supplies...' and then link each fact. This earns the marks for law and application.
• In MCQs, look for the trap word: alcohol for human consumption, petroleum products, or an inter-State supply disguised by a different place of supply.
• Always apply the rate given in the question. Do not use remembered rates, since rates are changed by notification.
• Show CGST and SGST separately in the working, then the total. It makes marking easy and avoids lost marks.
• If reverse charge is hinted at, first check that the supply falls in a category notified under section 9(3). If it does, state that the recipient is treated as the person liable for paying the tax, and that all the provisions of the Act apply to the recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both.
• In case-scenario MCQs, read the recipient's status first. Many options are wrong only because the recipient is an individual or not registered.
• In written answers, use provision, facts, conclusion. State the rule, apply it to the facts in a line or two, then give the tax amount.
• Always mention that RCM tax is paid in cash and that ITC is claimed separately. Examiners reward this point.