Few concepts of CA Final IDT Paper 8 - Part III

How to prepare for IDT paper 8 (GST) for CA Final May 2018 Exam (Old syllabus as well as new syllabus) - Part III

Few concepts of CA Final IDT Paper 8 - Part III

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In my last article I had written about Composite Supply & Mixed Supply, Charge of Tax, Interstate & Intrastate supplies with supplies within and outside Territorial Waters.

In this section we are covering Exempt Supply, Zero Rated Supply

Exempt Supply (Section 11 CGST & Section 6 IGST) : Any Goods or Services or both which attract Nil rate of Tax or which may be wholly exempt from Tax. Essential goods and services for general consumption have been exempted from tax. Unbranded food articles such as Atta, Maida, Besan etc and unpacked food items such as grains, milk eggs etc have been exempt. Further health services and education services have also been exempt. Nontaxable supply also included in exempt supplies.

Govt. has the power to exempt certain goods and services on recommendations by the Council either absolutely or under conditions by way of Notification or by Special Order in the public interest. No tax is to be collected on such goods and services.

Some of the Services which are exempt from Tax are:

- Services by an entity registered under Section12AA of the Income Tax Act. (Charitable activities)
- Services by way of transfer of a going concern.
- Services provided to Govt. with certain conditions.
- Service by way of renting of residential dwelling for residential purposes.
- A few more services. Please see Notification 12 CGST and Notification 9 IGST  both dated 28.6.17.
- Intra State supply of Goods or Services or both received by a registered person from an unregistered person where the value of such goods are not above 5000/- per day (now 7500/- per day) Section 9(4), Notification 8/2017 CT dated 28.06.2017. 
- Services imported by a SEZ Unit or SEZ developer.

Zero Rated Supply: Zero rated supply means export of Goods or Services or both or supply to SEZ / SEZ Developer. Sec 16 IGST. Credit of Input Tax Credit  (ITC) is available on zero rated supply. This means supply is taxable but rate of tax is zero hence ITC is available.

SEZ & SEZ Developer means as defined under SEZ Act 2005 sec 2(za) and sec 2(g) respectively.

A person making zero rated supply will be eligible to claim refund of unutilized ITC or IGST (if not under LUT or Bond) paid on such exports.

More chapters will be covered in my next articles which will cover Levy of Tax, Place of supply, Time of Supply & Value of supply. This way slowly I would cover most of the IDT (GST) paper of CA Final.

The author can also be reached at sjcabom@ gmail.com.

Disclaimer: All views are personal and shall not be taken as opinion or statement of Law.

Source: GST Act 2017