Charge of GST: CA Final Indirect Tax Laws Chapter Guide

What this chapter covers

Charge of GST: topics in the order to study them

1. 1Levy and Collection of GST under Section 9Start here. It sets out the charge itself, and every other topic is a variation on or a consequence of it.
2. 2Reverse Charge MechanismIt sits inside the levy provision and changes who pays, so study it right after the basic charge while the logic is fresh.
3. 3Composition Levy under Section 10It is the main alternative way of paying tax. You need the levy and the normal payment rules before you can see what it replaces.
4. 4Power to Grant Exemption from TaxIt shows how the charge can be reduced or removed, and it makes sense only once you know the charge and the schemes.
5. 5Tax as First Charge on PropertyThis begins the recovery group. It is a short rule that gives the department priority over the dues of the person liable.
6. 6Transfer of Property Void in Certain CasesIt builds on the first charge idea, because it stops transfers made to defeat recovery of tax.
7. 7Inspection of Goods in MovementStudy it last. It is an enforcement power, and it links forward to e-way bill and detention topics.

How to prepare Charge of GST

1. Read the levy provision slowly and write one line each for: what is taxed, on whom, at what rate limit, and what is outside GST or has a delayed levy.
2. For reverse charge, make a two-column list of the notified categories of goods and services, and of the notified categories of goods or services received by a registered person from an unregistered supplier. Learn the current notified entries from your updated study material.
3. For composition, build a checklist of eligibility and the conditions to be satisfied. Add what a composition person cannot do, such as collecting tax from the recipient or claiming input tax credit. Take the limits and rates only from the latest notifications.
4. Write exemption as a short note: who grants it, on whose recommendation, in what interest, and whether it can be absolute, conditional or by special order. Note that general exemption under Section 11(1) needs the Council's recommendation and public interest, while a special order under Section 11(3) is for exceptional circumstances and does not need a Council recommendation.
5. Learn the recovery provisions (first charge, void transfers, inspection of goods in movement) as short condition lists, and note who acts and when.
6. Practise case scenarios. For each, write the provision, the facts, and the conclusion in three short lines. Do this for both MCQs and written answers.
7. Revise the chapter in 20 minutes every week until the exam, using your own one-page notes.

Common mistakes in Charge of GST

• Treating reverse charge as if the supplier still pays the tax.

  Fix: In every case, first check whether the supply is in a notified reverse charge category. If it is, name the recipient as the person liable.

• Quoting composition limits and rates from memory.

  Fix: Use limits and rates only from the latest material supplied. In your notes, keep the conditions separate from the figures.

• Letting a composition person charge tax or claim input tax credit.

  Fix: Keep a fixed list of what a composition person cannot do, and test every case against it.

• Mixing exemption with nil rate or with non-taxable supplies.

  Fix: Anchor exemption to the Government's power to relieve tax. Note that its effect on credit is a separate point, and answer only what the question asks.

• Writing recovery provisions in general terms without conditions.

  Fix: For each, write who acts, on what facts, and with what effect. Then apply the facts of the case.

• Answering a case with the conclusion alone.

  Fix: Use provision, facts, conclusion in three short lines. This protects marks even if the conclusion is partly wrong.

Last-day revision: Charge of GST

• ✓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.

Charge of GST practice questions

• Sunrise Distillers Pvt Ltd of Pune supplies the following within Maharashtra: (i) country liquor meant for human consumption, (ii) rectified…
• Quickbuy Online, an e-commerce operator based outside India with no physical presence in the taxable territory and no representative there, …
• Vikram Metals Ltd is in default of GST of Rs 12 lakh with interest. A bank also holds a mortgage on its factory. Vikram Metals is not under …
• Bharat Cabs Ltd., a foreign electronic commerce operator with no physical presence and no representative in India, supplies through its app …
• Shree Ganesh Traders, a registered dealer in Pune, supplies goods within Maharashtra. Its supplies include (i) taxable machinery parts, (ii)…
• Dues of Rs 25 lakh of tax, interest and penalty are payable by Rathi Industries to the Government under the GST law. A bank also claims prio…
• A truck carrying goods without any identifiable consignor or owner is abandoned at a Nagpur checkpost; the driver says he does not know the …
• Bharat Cabs Ltd, a taxable person, supplied services through an electronic commerce operator, Ridex Inc., a foreign company with no physical…

Charge of GST in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

• CA IntermediateCharge of GST
• CS ExecutiveLevy and Collection of GST
• CMA IntermediateCharge of Tax including Reverse Charge
• CS ProfessionalSupply under GST