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Important Definitions as per CGST & SGST Act, 2017

1. 'Address of Delivery' means the address of the recipient of goods or services or both mentioned on the tax invoice issued by a registered person for delivery of such goods or services or both. [Sec 2(2)]

2. 'Address on Record' means the address of the recipient as available in the records of the supplier. [Sec 2(3)]

3. 'Adjudicating authority' means any authority, appointed or authorized to pass any decision under this Act, but does not include:-

a. the Central Board of Excise and Customs,
b. the Revisional Authority,
c. the Authority for Advance Ruling,
d. the Appellate Authority for Advance Ruling,
e. the Appellate Authority and
f. the Appellate Tribunal [Sec 2(4)]

[M.IMP]

4. 'Agent' means a person, including a factor, broker, commission agent, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another. [Sec 2(5)]

5. 'Aggregate Turnover' means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable on RCM ), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess. [Sec 2(6)]

[M.IMP]

6. 'Agriculturist' means an individual or a HUF who undertakes cultivation of land -

(a) by own labour, or
(b) by the labour of family, or
(c) by servants on wages payable in cash or kind or by hired labour under personal supervision or the personal supervision of any member of the family. [Sec 2(7)]

7. 'Assessment' means determination of tax liability under this Act and includes self-assessment, re-assessment, provisional assessment, summary assessment and best judgment assessment.

[Sec 2(11)]

8. 'Audit' means the examination of records, returns and other documents maintained or furnished by the registered person under this Act or the rules made thereunder or under any other law for the time being in force to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess his compliance with the provisions of this Act or the rules made thereunder [Sec 2(13)]

9. 'Business' includes- -

(a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a monetary benefit;

(b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a);

(c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction;

(d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business;

(e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members;

(f) admission, for a consideration, of persons to any premises;

(g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation;

(h) services provided by a race club by way of totalisator or licence to book maker in such club; and

(i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities; [Sec 2(17)]

[M.IMP]

10. 'Business Vertical' means a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services having different risks and returns from those of the other business verticals.

Explanation.-  For the purposes of this clause, factors that should be considered in determining whether goods or services are related include- -

(a) the nature of the goods or services;
(b) the nature of the production processes;
(c) the type or class of customers for the goods or services;
(d) the methods used to distribute the goods or supply of services; and
(e) the nature of regulatory environment (wherever applicable), including banking, insurance, or public utilities; [Sec 2(18)]

[M.IMP]

NOTE:-

Normally a businessman obtains a single registration in a State, even if he has multiple factories, godowns or sales offices.

However a person having different business verticals in a State may opt a separate registration for each business vertical.

11. 'Capital Goods' means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in or for furtherance of business; [Sec 2(19)]

12. 'Casual Taxable Person' means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business

[Sec 2(20)]

13. 'Composite Supply' means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply [Sec 2(30)]

[M.IMP]

Illustration:- A Supply of Electronic Goods with transport and insurance, then it is composite supply and supply of electronic goods is a principal supply.

14. 'Consideration' in relation to the supply of goods or services or both includes- -

(a) any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government;

(b) the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply. [Sec 2(31)]

15. 'Continuous Supply of Goods' means a supply of goods which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, whether or not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices on regular basis and includes supply of such goods as the Government may, specify by notification. [Sec 2(32)]

[M.IMP]

16. 'Continuous Supply of Services' means a supply of services which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes supply of such services as the Government may, specify by notification. [Sec 2(33)]

[M.IMP]

17. 'Conveyance' includes a vessel, an aircraft and a vehicle. [Sec 2(34)]

18. 'Electronic Commerce Operator' means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce. [Sec 2(45)]

19. 'Exempt Supply' means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the IGST Act, and includes non-taxable supply. [Sec 2(47)]

[M.IMP]

20. 'Existing Law' means any law, notification, order, rule or regulation relating to levy and collection of duty or tax on goods or services or both passed or made before the commencement of this Act by Parliament or any Authority or person having the power to make such law, notification, order, rule or regulation. [Sec 2(48)]

21. 'Family' means:-

(i) the spouse and children of the person, and
(ii) the parents, grand-parents, brothers and sisters of the person if they are wholly or mainly dependent on the said person. [Sec 2(49)]

[M.IMP]

22. 'Fixed Establishment' means a place (other than the registered place of business) which is characterized by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services, or to receive and use services for its own needs. [Sec 2(50)]

23. 'Goods' means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply. [Sec 2(52)]

24. 'Input' means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business. [Sec 2(59)]

25. 'Input Service' means any service used or intended to be used by a supplier in the course or furtherance of business . [Sec 2(60)]

26. 'Input Service Distributor' means an office of the supplier of goods or services or both which receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of central tax, State tax, integrated tax or Union territory tax paid on the said services to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the said office. [Sec 2(61)]

27. 'Input Tax' in relation to a registered person, means the central tax, State tax, integrated tax or Union territory tax charged on any supply of goods or services or both made to him and includes -

(a) IGST charged on import of goods
(b) the tax payable u/s 9(3) & 9(4)
(c) the tax payable u/s 5(3) & 5(4) of the IGST Act
(d the tax payable u/s 9(3) & 9(4) of the respective SGST Act
(e) the tax payable u/s 9(3) & 9(4) of UTGST Act

but does not include the tax paid under the composition levy. [Sec 2(62)]

[M.IMP]

28. 'Inward Supply' in relation to a person, shall mean receipt of goods or services or both whether by purchase, acquisition or any other means with or without consideration. [Sec 2(67)]

29. 'Job Work' means any treatment or process undertaken by a person on goods belonging to another registered person. [Sec 2(68)]

30. 'Location of the Recipient of Services' means,-

(a) where a supply is received at a place of business for which the registration has been obtained, the location of such place of business;

(b) where a supply is received at a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;

(c) where a supply is received at more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply; and

(d) in absence of such places, the location of the usual place of residence of the recipient.[Sec 2(70)]

[M.IMP]

31. 'Location of the Supplier of Services' means,-

(a) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business;

(b) where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment;

(c) where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provisions of the supply; and

(d) in absence of such places, the location of the usual place of residence of the supplier. [Sec 2(71)]

[M.IMP]

32. 'Manufacture' means processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use. [Sec 2(72)]

33. 'Market Value' shall mean the full amount which a recipient of a supply is required to pay in order to obtain the goods or services or both of like kind and quality at or about the same time and at the same commercial level where the recipient and the supplier are not related. [Sec 2(73)]

34. 'Mixed Supply' means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. [Sec 2(74)]

[M.IMP]

Illustration: - A supply of a package consisting of T.V., AC, Washing Machine & Refrigerator for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately.

35. 'Non-Resident Taxable Person' means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India. [Sec 2(77)]

36. 'Output Tax' in relation to a taxable person, means the tax chargeable under this Act on taxable supply of goods or services or both made by him or by his agent but excludes tax payable by him on reverse charge basis [Sec 2(82)]

37. 'Outward Supply' in relation to a taxable person, means supply of goods or services or both, whether by sale, transfer, barter, exchange, licence, rental, lease or disposal or any other mode, made or agreed to be made by such person in the course or furtherance of business. [Sec 2(83)]

38. 'Person' includes-

(a) an individual
(b) a Hindu Undivided Family
(c) a company
(d) a firm
(e) a Limited Liability Partnership
(f) an association of persons or a body of individuals, whether incorporated or not, in India or outside India
(g) any corporation established by or under any Central Act, State Act or Provincial Act or a Government company as defined in Sec 2(45) of the Companies Act, 2013
(h) any body corporate incorporated by or under the laws of a country outside India
(i) a co-operative society registered under any law relating to co-operative societies
(j) a local authority
(k) Central Government or a State Government
(l) society as defined under the Societies Registration Act, 1860
(m) trust
(n) every artificial juridical person, not covered above [Sec 2(84)]

[M.IMP]

39. 'Place Of Business' includes- -

(a) a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or

(b) a place where a taxable person maintains his books of account; or

(c) a place where a taxable person is engaged in business through an agent, by whatever name called

[Sec 2(85)]

[M.IMP]

40. 'Recipient' of supply of goods or services or both, means-

(a) where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration

(b) where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available

(c) where no consideration is payable for the supply of a service, the person to whom the service is rendered, and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied. [Sec 2(93)]

[M.IMP]

41. 'Removal’’ in relation to goods, means-

(a) dispatch of the goods for delivery by the supplier thereof or by any other person acting on behalf of such supplier; or

(b) collection of the goods by the recipient thereof or by any other person acting on behalf of such recipient. [Sec 2(96)]

42. 'Reverse Charge' means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both u/s 9(3) or 9(4), or u/s 5(3) or 5(4) of IGST Act. [Sec 2(98)]

[M.IMP]

43. 'Services' means anything other than goods, money and securities but includes activities relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged. [Sec 2(102)]

44. 'Supplier' in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied. [Sec 2(105)]

45. 'Turnover In State' means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) and exempt supplies made within a State by a taxable person, exports of goods or services or both and inter-State supplies of goods or services or both made from the State by the said taxable person but excludes central tax, State tax, integrated tax and cess. [Sec 2(112)]

[M.IMP]

46. 'Usual Place of Residence' means- -

(a) in case of an individual, the place where he ordinarily resides;
(b) in other cases, the place where the person is incorporated or otherwise legally constituted;

[Sec 2(113)]

47. 'Works Contract' means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract; [Sec 2(119)]

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