Definitions under Model Goods and Services (GST) Act, 2016

Definitions under Model Goods and Services (GST) Act, 2016

CA Ankit Gulgulia (Jain) | ankitgulgulia@gmail.com

In this Act, unless the context otherwise requires,-

(1) “actionable claim” shall have the meaning assigned to it in section 3 of the Transfer of Property Act, 1882;

(2) “address on record” means the address of the recipient as available in the records of the supplier;

(3) “adjudicating authority” means any authority competent to pass any order or decision under this Act, but does not include the Board, the Commissioner (Appeals) and the Appellate Tribunal;

(4) “agriculture” with all its grammatical variations and cognate expressions, includes floriculture, horticulture, the raising of crops, grass or garden produce and also grazing, but does not include dairy farming, poultry farming, stock breeding, the mere cutting of wood or grass, gathering of fruit, raising of man-made forest or rearing of seedlings or plants:

Explanation – For the purpose of this clause, the expression ‘forest’ means the forest to which the Indian Forest Act, 1927 applies.

(5) “agriculturist” means a person who cultivates land personally, for the purpose of agriculture;

(6) “agricultural extension” means application of scientific research and knowledge to agricultural practices through farmer education or training;

(7) “agricultural produce” means any produce of agriculture on which either no further processing is done or such processing is done as is usually done by a cultivator or producer which does not alter its essential characteristics but makes it marketable for primary market;

(8) “Appellate Tribunal” means the National Goods and Services Tax Appellate Tribunal constituted under section . . .of this Act;

(9) “appointed day’’ means the date on which section 1 of this Act comes into effect;

(10) “assessment” means determination of tax liability under this Act and includes self-assessment, re-assessment,provisional assessment and best judgement assessment;

(11) “associated enterprise” shall have the meaning assigned to it in section 92A of the Income Tax Act, 1961;

(12) “Board” means the Central Board of Excise and Customs constituted under the Central Boards of Revenue Act, 1963;

(13) “business” includes –

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

(b) any transaction in connection with or incidental or ancillary to (a) above;

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

(d) supply or acquisition of goods including capital assets 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 as the case may be; (f) admission, for a consideration, of persons to any premises; and

(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; but does not include agriculture;

(14) “capital assets” shall have the meaning as assigned to it in the Income Tax Act, 1961 (43 of 1961) but the said expression shall not include jewellery held for personal use or property not connected with the business;

(15) “capital goods” means plant, machinery and equipment used directly or indirectly in the course of manufacture, trade, commerce, profession, vocation or any other similar activity;

(16) “casual taxable person” means a person who occasionally undertakes transactions involving supply or acquisition of goods and/or services in the course or furtherance of business whether as principal, agent or in any other capacity, in a taxable territory where he has no fixed place of business;

(17) “chartered accountant” means a chartered accountant within the meaning of the Chartered Accountants Act, 1949 (38 of 1949);

(18) “Commissioner”means the Commissioner of Central Goods and Services Tax /Commissioner of State Goods and Services Tax appointed under section 4 of the Central/State Goods and Services Tax Act, 2016;

(19) “composite supply” means a supply consisting of –

(a) two or more goods;

(b) two or more services; or

(c) a combination of goods and services

provided in the course or furtherance of business, whether or not the same can be segregated;

(20) “consideration” in relation to the supply of goods and/or services to any person,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 and/or services, whether by the person or by any other person;

(b) the monetary value of any act or forbearance, whether or not voluntary, in respect of, in response to, or for the inducement of, the supply of goods and/or services, whether by the person or by any other person:

Provided that a deposit, whether refundable or not, given in respect of the supply of goods and/or services shall not be considered as payment made for the supply unless the supplier applies the deposit as consideration for the supply;

(21) “continuous supply of goods” means a supply involving goods which is provided, or agreed to be provided, continuously or on recurrent basis whether or not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis;

(22) “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 service as the Central or a State Government may,whether or not subject to any condition, by notification, specify;

(23) “cost accountant” means a cost accountant within the meaning of the Cost and Works Accountants Act, 1959 (23 of 1959);

(24) “Council” means the Goods and Services Tax Council established under Article 279A of the Constitution;

(25) “declared service” means

(a) renting of immovable property;

(b) construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or before its first occupation, whichever is earlier.

Explanation. For the purposes of this clause

(1) the expression “competent authority”means the Government or any authority authorized to issue completion certificate under any law for the time being in force and in case of non-requirement of such certificate from such authority, from any of the following, namely:

(i) an architect registered with the Council of Architecture constituted under the Architects Act, 1972; or

(ii) a chartered engineer registered with the Institution of Engineers (India); or (iii) alicensed surveyor of the respective local body of the city or town or village or development or planning authority;

(2) the expression “construction” includes additions, alterations, replacements or remodelling of any existing civil structure;

(c) temporary transfer or permitting the use or enjoyment of any intellectual property right;

(d)development, design, programming, customisation, adaptation, upgradation, enhancement, implementation of information technology software;

(e)agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act; and

(f) works contract;

(26) “document” includes written or printed record of any sort and electronic record as defined in Information Technology Act, 2000 [21 of 2000];

(27) “earlier law” means any of the following laws, that is to say,

(a) . . .

(b) . . .

(c) . . .

as amended from time to time and includes enactments which have validated anything done or omitted to be done under any of the above mentioned laws and also any law repealed by the earlier laws but continued in force under any provisions of the above enumerated laws;

(28) “exempt supply” means supply of any goods and/or services which are not taxable under this Act and includes such supply of goods and/or services which are specified in Schedule . . . of the Act or which may be exempt from tax under section 10.

(29) “export” with its grammatical variations and cognate expressions,means taking out of India to a place outside India;

(30) “fund” means the Consumer Welfare Fund established under section ___;

(31) “goods’’ means every kind of movable property other than actionable claim and money but includes securities, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under the contract of supply;

(32) “government” means Central Government and its departments, a State Government and its departments and a Union territory and its departments, but shall not include any entity, whether created by a statute or otherwise, the accounts of which are not required to be kept in accordance with Article 150 of the Constitution or the rules made thereunder;

(33) “import” with its grammatical variations and cognate expressions,means bringing into India from a place outside India;

(34) “IGST” means the tax levied under the Integrated Goods and Services Tax Act;

(35) “India” means,-

(a) the territory of the Union as referred to in clauses (2) and (3) of Article 1 of the Constitution;

(b) its territorial waters, continental shelf, exclusive economic zone or any other maritime zone as defined in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976;

(c) the seabed and the subsoil underlying the territorial waters; (d) the air space above its territory and territorial waters; and

(e) the installations, structures and vessels located in the continental shelf of India and the exclusive economic zone of India, for the purposes of prospecting or extraction or production of mineral oil and natural gas and supply thereof;

(36) “input tax” in relation to a taxable person, means the {IGST, CGST or SGST}/{IGST and CGST}/{IGST and SGST} charged on any supply of goods and/or services to him which are used, or are to be used, in the course or furtherance of his business;

(37) “input tax credit” means credit of ‘input tax’ as defined in section 2(36) of this Act;

(38) “intangible property” is any property other than tangible property and includes such things as contractual rights, options, intellectual property rights in relation to goods that are not in possession;

(39) “invoice” means a document raised by a supplier indicating, inter-alia, details of goods and/or services supplied, their value and tax charged thereon, if any;

(40) “legal representative” means any person who stands in place of, and represents the interests of another and includes the executor, administrator of an estate and a court appointed guardian of a minor;

(41) “local authority” means

(a) a “Panchayat” as defined in clause (d) of Article 243 of the Constitution: (b) a “Municipality” as defined in clause (e) of Article 243P of the Constitution (c) a Municipal Committee, a ZillaParishad, a District Board, and any other authority legally entitled to, or entrusted by the Central or any State Government with the control or management of a municipal or local fund;

(d) a Cantonment Board as defined in section 3 of the Cantonments Act, 2006; (e) a Regional Council or a District Council constituted under the Sixth Schedule to the Constitution;

(f) (i) a Development Board constituted under Article 371 of the Constitution; or (g) a Regional Council constituted under Article 371A of the Constitution;

(42) “location of service provider” means: where a supply is made from a business establishment for which registration has been obtained, the location of such establishment;

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

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

(iv) in absence of such places, the location of the usual place of residence of the person;

(43) “location of service receiver” means:where a supply is received at a business establishment for which registration has

been obtained, the location of such establishment;

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

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

(iv)in absence of such places, the location of the usual place of residence of the person;

(44) “market value” shall mean the full amount which a recipient of a supply is required to pay in order to obtain the goods and/or services 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;

(45) “money” means Indian legal tender or any foreign currency, cheque, promissory note, bill of exchange, letter of credit, draft, pay order, traveller cheque, money order, postal or electronic remittance or any such similar instrument when used as consideration to settle an obligation or exchange with Indian legal tender of another denomination but shall not include any currency that is held for its numismatic value;

(46) “non-resident taxable person” means a taxable person who occasionally undertakes transactions involving supply or acquisition of goods and/or services whether as principal or agent or in any other capacity but who has no fixed place of business in India;

(47) “non-taxable territory” means the territory which is outside the taxable territory;

(48) “notification” means notification published in the Official Gazette and the expressions ‘notify’ and ‘notified’ shall be construed accordingly;

(49) ”output tax” in relation to a taxable person, means the IGST/CGST/SGST chargeable under this Act on taxable supply of goods and/or services by him and includes tax payable by him on reverse charge basis;

(50) “person” includes—

(a) an individual;

(b) a Hindu undivided family; (c) a company;

(d) a firm;

(e) an association of persons or a body of individuals, whether incorporated or not, in India or outside India;

(f) any corporation established by or under any Central, State or Provincial Act or a Government company as defined in section 2(45) of the Companies Act, 2013 (18 of 2013);

(g) any body corporate incorporated by or under the laws of a country outside India; (h) a co-operative society registered under any law relating to cooperative societies; (i) a local authority;

(j) government;

(k) society as defined under the Societies Registration Act, 1860; (l) trust; and

(m) every artificial juridical person, not falling within any of the preceding sub-clauses;

(51) “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, provides or receives goods and/or services; 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;

(52) “prescribed’’ means prescribed by the rules, regulations or by any notification issued under this Act;

(53) “proper officer” in relation to any function to be performed under this Act, means the officer of goods and services tax who is assigned those functions by the Board/Commissioner of SGST;

(54) “property’’ means any property, whether real or personal, movable or immovable, corporeal or incorporeal, tangible or intangible, and includes a right or interest of any kind, but does not include money, actionable claims or negotiable instruments;

(55) persons shall be deemed to be “related persons’’ if only

(a) they are officers or directors of one another’s businesses;

(b) they are legally recognized partners in business;

(c) they are employer and employee;

(d) any person directly or indirectly owns, controls or holds five per cent or more of

the outstanding voting stock or shares of both of them;

(e) one of them directly or indirectly controls the other; (f) both of them are directly or indirectly controlled by a third person; (g) together they directly or indirectly control a third person; or (h) they are members of the same family.

Explanation I. – The term “person” also includes legal persons. Explanation II. – Persons who are associated in the business of one another in that one is the sole agent or sole distributor or sole concessionaire, howsoever described, of the other shall be deemed to be related;

(56) “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;

(57) “reverse charge’’ means the liability to pay tax by the person receiving services instead of the person supplying the services in respect of such categories of supplies as the Central or a State Government may, on the recommendation of the Council, by notification, specify;

(58) “schedule” means a schedule appended to this Act;

(59) “services’’ mean anything other than goods;

(60) “SGST” means the tax levied under the State Goods and Services Tax Act;

(61) “supply’’ shall have the meaning as assigned to it in section 3 of this Act;

(62) “tangible property” means any property other than incorporeal property;

(63) “tax”means goods and services tax levied on the supply of goods and/or services except on the supply of alcoholic liquor for human consumption;

(64) “taxable person’’ shall have the meaning as assigned to it in section 9 of this Act;

(65) “taxperiod’’ means the period for which the tax return is required to be filed;

(66) “taxable supply’’ means a supply of goods and/or services which is chargeable to tax under this Act;

(67) “tax return preparer” means any individual who has been authorised to act as goods and services tax return preparer under this Act;

(68) “taxable territory’’ means the territory to which the provisions of this Act apply;

(69) “telecommunication service” means service of any description provided by

means of any transmission, emission or reception of signs, signals, writing, images and sounds or intelligence or information of any nature, by wire, radio, optical, visual or other electro-magnetic means or systems, including the related transfer or assignment of the right to use capacity for such transmission, emission or reception by a person who has been granted a licence under the first proviso to sub-section (1) of section 4 of the Indian Telegraph Act, 1885 and includes—

(i) voice mail, data services, audio tex services, video tex services, radio paging; (ii) fixed telephone services including provision of access to and use of the public switched telephone network for the transmission and switching of voice, data and video, inbound and outbound telephone service to and from national and international destinations;

(iii) cellular mobile telephone services including provision of access to and use of switched or non-switched networks for the transmission of voice, data and video, inbound and outbound roaming service to and from national and international destinations;

(iv) carrier services including provision of wired or wireless facilities to originate, terminate or transit calls, charging for interconnection, settlement or termination of domestic or international calls, charging for jointly used facilities including pole attachments, charging for the exclusive use of circuits, a leased circuit or a dedicated link including a speech circuit, data circuit or a telegraph circuit;

(v) provision of call management services for a fee including call waiting, call forwarding, caller identification, three-way calling, call display, call return, call screen, call blocking, automatic call-back, call answer, voice mail, voice menus and video conferencing; (vi) private network services including provision of wired or wireless telecommunication link between specified points for the exclusive use of the client;

(vii) data transmission services including provision of access to wired or wireless facilities and services specifically designed for efficient transmission of data; and

(viii) communication through fascmile, pager, telegraph and telex, but does not include service provided by

(a) any person in relation to on-line information and database access or retrieval; and (b) a broadcasting agency or organisation in relation to broadcasting; (70) “time of supply of goods’’ shall have the meaning as assigned to it in section11 of this Act;

(71) “time of supply of services’’ shall have the meaning as assigned to it in section 12 of this Act;

(72) “to cultivate personally” means to carry on any agricultural operation on one’s own account-

(a) by one’s own labour, or

(b) by the labour of one’s family, or

(c) by servants on wages payable in cash or kind (but not in crop share) or by hired labour under one’s personal supervision or the personal supervision of any member of one’s family;

1. A widow or a minor or a person who is subject to any physical or mental disability or is a serving member of the armed forces of the Union, shall be deemed to cultivate land personally if it is cultivated by her or his servants or by hired labour. Explanation 2. In the case of a Hindu Undivided Family, land shall be deemed to be cultivated personally, if it is cultivated by any member of such family; (73) “turnover” means the aggregate value of all taxable and non-taxable supplies, exempt supplies and exports, of goods and/or services, to be computed on all India basis and excludes taxes, if any, charged under this Act;

(74) “Special Economic Zone’’ shall have the meaning assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005 [28 of 2005];

(75) “works contract” means an agreement for carrying out for cash, deferred payment or other valuable consideration, the building, construction, fabrication, erection,installation, fitting out, improvement, modification, repair, renovation or commissioning of any immovable property;

(76) “year” means the financial year; and

(77) “zero-rated supply” means a supply of any goods and/or services on which no tax is payable but credit of the input tax related to that supply is admissible;

Explanation: Exports shall be treated as zero-rated supply.

Source:- Report of Sub-committee II on Model GST Law

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