CMA Intermediate · Direct and Indirect Taxation

Introduction to GST Law: formula sheet

Full chapter guide

Key formulas

Intra-State supply: GST = CGST + SGST (or UTGST); Both are normally levied at equal rates on the same value. The Centre collects CGST, the State or Union territory collects SGST/UTGST.
Inter-State supply and imports: GST = IGST; Levied and collected by the Centre under the IGST Act. The tax is apportioned to the destination State.
GST Council voting: Decision needs ≥ 3/4 of weighted votes of members present and voting; Centre = 1/3 weight, all States together = 2/3; The Centre alone cannot pass a decision, and the States alone cannot either.
Key constitutional provisions: 101st Amendment (2016): Article 246A (power to make GST laws), Article 279A (GST Council); Learn these article numbers with the amendment name.
Section 174, CGST Act: Repeal of listed excise Acts, with savings of past rights, liabilities and proceedings; The repeal does not revive anything not in force, and does not affect pending proceedings, which continue under the old Acts.
Section 101A, CGST Act: National Appellate Authority for Advance Ruling = President + Technical Member (Centre) + Technical Member (State); Constituted by the Government on the recommendation of the Council, for hearing appeals under section 101B.
Import of services: Supplier outside India AND Recipient in India AND Place of supply in India; All three must hold. If the place of supply is outside India, it is not an import of services.
Export of services: Supplier in India + Recipient outside India + Place of supply outside India + Payment in convertible foreign exchange (or INR where RBI permits) + Not merely establishments of a distinct person; Fail any one condition and the supply is not an export of services, so it is not zero-rated as an export.
Inter-State supply (basic test): Location of supplier and place of supply in different States/UTs; Imports are also treated as inter-State. If both are in the same State or UT, the supply is intra-State.
Location of supplier of services (CGST s.2(71)): Registered place of business → fixed establishment elsewhere → establishment most directly concerned → usual place of residence; Apply in this order. The location of the recipient (s.2(70)) follows the same ladder, using the place where the supply is received.
Usual place of residence (CGST s.2(113)): Individual: where he ordinarily resides. Others: where incorporated or legally constituted; This is the last fallback when no business place or fixed establishment exists.
Import of services as supply: Import of services for a consideration = supply, whether or not in the course or furtherance of business; This is Section 7(1)(b) of the CGST Act. Consideration is still needed.
Conditions of import of services: Supplier outside India + Recipient in India + Place of supply in India; All three must be met under the IGST Act. If any one fails, it is not an import of services.
Nature of supply: Import of services = inter-State supply, so IGST applies; CGST and SGST are not charged on it.
Who pays: Business recipient in India pays IGST under reverse charge, as the IGST Act and notifications provide; Registration is compulsory for persons liable to pay tax under reverse charge (Section 24(iii) CGST Act). For OIDAR supplied to a non-registered person in India, the foreign supplier pays and must register (Section 24(xi) CGST Act).
IGST payable: IGST = Value of imported service × IGST rate ÷ 100; Use the rate applicable to that service and the value of supply as per the valuation rules.
Assessable value of imported goods: Assessable value = Transaction value (CIF) + other loadable costs; CIF means cost, insurance and freight up to the Indian port. Use the value the question gives as assessable value.
Value for IGST on imported goods: IGST value = Assessable value + Basic customs duty + Other customs duties (such as social welfare surcharge); IGST is charged on this total, so customs duty is in the base. Include only duties the question says are levied.
IGST on imported goods: IGST = IGST value × IGST rate ÷ 100; Rate is given in the question. Do not add CGST or SGST.
Social welfare surcharge: SWS = Rate % × Basic customs duty; Charged on the duty, not on the goods value. Apply it only if the question states it.
Reverse charge on imported services: IGST payable by recipient = Value of service × IGST rate ÷ 100; Paid in cash by the Indian recipient. Credit may follow if eligible.
Nature of supply: Import = inter-State supply → IGST; intra-State supply → CGST + SGST; Section 9 of the CGST Act levies tax on intra-State supplies, with reverse charge under sub-section (3).

Quick revision

GST is a dual tax: both the Centre and the States levy it on the same supply.
CGST and SGST/UTGST apply to intra-state supplies; IGST applies to inter-state supplies and imports.
IGST is collected by the Centre, and the tax is then apportioned as per GST law.
Definitions in the IGST Act decide the answer, so learn each with all its conditions.
Location of supplier and location of recipient drive the classification of a supply.
An import of services has set conditions; if any one fails, it is not an import of services.
A supply that is an import of services is treated as an inter-state supply.
Imports are taxed under IGST, not under CGST or SGST.
Always state the rule, apply it to the facts, then give a clear conclusion.
In MCQs, check each option for a changed or missing condition.

Common mistakes

Saying the Centre levies only IGST and States levy only SGST, so both never tax the same sale. Fix: On an intra-State supply, the Centre levies CGST and the State levies SGST on the same value. IGST applies only to inter-State supplies and imports.
Mixing up Article 246A and Article 279A. Fix: Remember: 246A = power to legislate; 279A = Council (A for Authority to decide).
Calling every supply from a foreign supplier an import of services. Fix: Also check that the recipient is in India and the place of supply is in India. All three conditions are needed.
Treating a service to a foreign client as export without checking payment. Fix: Check that payment is received in convertible foreign exchange (or INR where RBI permits). Also check the place of supply is outside India.
Charging CGST and SGST on imported services Fix: Import of services is inter-State supply. Always charge IGST.
Saying business purpose is needed for import of services Fix: Section 7(1)(b) says import of services is a supply whether or not in the course or furtherance of business.
Charging IGST on the assessable value alone Fix: Add basic customs duty and any surcharge to the assessable value first. IGST applies to that total.
Charging CGST and SGST on imports Fix: An import is treated as an inter-State supply. Only IGST applies.

Exam tips

MCQs often test article numbers, voting weights and which tax applies to which supply. Learn these as a fixed list.
In descriptive answers, write the 101st Amendment, Article 246A and Article 279A explicitly. Examiners look for these keywords.
Use a small two-column layout of CGST/SGST versus IGST in answers to distinguish the models. It earns clear step marks.
Quote section numbers only when sure. For Section 174 and Section 101A, focus on the content: repeal with savings, and the three-member appellate authority.
Attempt Section A first. There is no negative marking, so answer every MCQ.
In MCQs, the trap is usually one missing condition, such as payment in rupees without RBI permission or a distinct person link. Read the facts for it.
In written answers, list the conditions first, then apply each one to the facts in a separate line. Step marks follow this layout.
Use the exact terms: location of supplier, location of recipient, place of supply. Do not write 'place of service'.