New Delhi, the 12th April, 2017/Chaitra 22, 1939 (Saka)
The following Act of Parliament received the assent of the President on the
12th April, 2017, and is hereby published for general information:—
THE INTEGRATED GOODS AND SERVICES TAX ACT, 2017
NO. 13 OF 2017
[12th April, 2017.]
An Act to make a provision for levy and collection of tax on inter-State supply of goods or services or both by the Central Government and for matters connected therewith or incidental thereto.
BE it enacted by Parliament in the Sixty-eighth Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
1. (1) This Act may be called the Integrated Goods and Services Tax Act, 2017.
(2) It shall extend to the whole of India except the State of Jammu and Kashmir.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint:
Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
2. In this Act, unless the context otherwise requires,––
(1) “Central Goods and Services Tax Act” means the Central Goods and Services
Tax Act, 2017;
(2) ‘‘central tax” means the tax levied and collected under the Central Goods
and Services Tax Act;
(3) “continuous journey” means a journey for which a single or more than one
ticket or invoice is issued at the same time, either by a single supplier of service or
through an agent acting on behalf of more than one supplier of service, and which
involves no stopover between any of the legs of the journey for which one or more
separate tickets or invoices are issued.
Explanation.––For the purposes of this clause, the term “stopover” means a
place where a passenger can disembark either to transfer to another conveyance or
break his journey for a certain period in order to resume it at a later point of time;
(4) “customs frontiers of India” means the limits of a customs area as defined
in section 2 of the Customs Act, 1962;
(5) “export of goods” with its grammatical variations and cognate expressions,
means taking goods out of India to a place outside India;
(6) “export of services” means the supply of any service when,––
(i) the supplier of service is located in India;
(ii) the recipient of service is located outside India;
(iii) the place of supply of service is outside India;
(iv) the payment for such service has been received by the supplier of
service in convertible foreign exchange; and
(v) the supplier of service and the recipient of service are not merely
establishments of a distinct person in accordance with Explanation 1 in
section 8;
(7) “fixed establishment” means a place (other than the registered place of
business) which is characterised 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;
(8) “Goods and Services Tax (Compensation to States) Act” means the Goods
and Services Tax (Compensation to States) Act, 2017;
(9) “Government” means the Central Government;
(10) ‘‘import of goods” with its grammatical variations and cognate expressions,
means bringing goods into India from a place outside India;
(11) ‘‘import of services” means the supply of any service, where––
(i) the supplier of service is located outside India;
(ii) the recipient of service is located in India; and
(iii) the place of supply of service is in India;
(12) “integrated tax” means the integrated goods and services tax levied under
this Act;
(13) “intermediary” means a broker, an agent or any other person, by whatever
name called, who arranges or facilitates the supply of goods or services or both, or
securities, between two or more persons, but does not include a person who supplies
such goods or services or both or securities on his own account;
(14) “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; (15) “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 provision of the supply; and (d) in absence of such places, the location of the usual place of residence of the supplier; (16) “non-taxable online recipient” means any Government, local authority, governmental authority, an individual or any other person not registered and receiving online information and database access or retrieval services in relation to any purpose other than commerce, industry or any other business or profession, located in taxable territory. Explanation.––For the purposes of this clause, the expression “governmental authority” means an authority or a board or any other body,–– (i) set up by an Act of Parliament or a State Legislature; or (ii) established by any Government, with ninety per cent. or more participation by way of equity or control, to carry out any function entrusted to a municipality under article 243W of the Constitution; (17) “online information and database access or retrieval services” means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services such as,–– (i) advertising on the internet; (ii) providing cloud services; (iii) provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet; (iv) providing data or information, retrievable or otherwise, to any person in electronic form through a computer network; (v) online supplies of digital content (movies, television shows, music and the like); (vi) digital data storage; and (vii) online gaming;
(18) “output tax”, in relation to a taxable person, means the integrated 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; (19) “Special Economic Zone” shall have the same meaning as assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005; (20) “Special Economic Zone developer” shall have the same meaning as assigned to it in clause (g) of section 2 of the Special Economic Zones Act, 2005 and includes an Authority as defined in clause (d) and a Co-Developer as defined in clause (f) of section 2 of the said Act; (21) “supply” shall have the same meaning as assigned to it in section 7 of the Central Goods and Services Tax Act; (22) “taxable territory” means the territory to which the provisions of this Act apply; (23) “zero-rated supply” shall have the meaning assigned to it in section 16; (24) words and expressions used and not defined in this Act but defined in the Central Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act shall have the same meaning as assigned to them in those Acts; (25) any reference in this Act to a law which is not in force in the State of Jammu and Kashmir, shall, in relation to that State be construed as a reference to the corresponding law, if any, in force in that State.
CHAPTER II
ADMINISTRATION
3. The Board may appoint such central tax officers as it thinks fit for exercising the powers under this Act.
4. Without prejudice to the provisions of this Act, the officers appointed under the
State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act are
authorised to be the proper officers for the purposes of this Act, subject to such exceptions
and conditions as the Government shall, on the recommendations of the Council, by
notification, specify.
CHAPTER III
LEVY AND COLLECTION OF TAX
5. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the
integrated goods and services tax on all inter-State supplies of goods or services or both,
except on the supply of alcoholic liquor for human consumption, on the value determined
under section 15 of the Central Goods and Services Tax Act and at such rates, not exceeding
forty per cent., as may be notified by the Government on the recommendations of the
Council and collected in such manner as may be prescribed and shall be paid by the taxable
person:
Provided that the integrated tax on goods imported into India shall be levied and
collected in accordance with the provisions of section 3 of the Customs Tariff Act, 1975 on
the value as determined under the said Act at the point when duties of customs are levied on
the said goods under section 12 of the Customs Act, 1962.
(2) The integrated tax on the supply of petroleum crude, high speed diesel, motor
spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied
with effect from such date as may be notified by the Government on the recommendations
of the Council.
(3) The Government may, on the recommendations of the Council, by notification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. (4) The integrated tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this Act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both. (5) The Government may, on the recommendations of the Council, by notification, specify categories of services, the tax on inter-State supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this Act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services: Provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax: Provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay tax. 6. (1) Where the Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by notification, exempt generally, either absolutely or subject to such conditions as may be specified therein, goods or services or both of any specified description from the whole or any part of the tax leviable thereon with effect from such date as may be specified in such notification. (2) Where the Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the Council, by special order in each case, under circumstances of an exceptional nature to be stated in such order, exempt from payment of tax any goods or services or both on which tax is leviable. (3) The Government may, if it considers necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-section (2), insert an Explanation in such notification or order, as the case may be, by notification at any time within one year of issue of the notification under sub-section (1) or order under sub-section (2), and every such Explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be. Explanation.––For the purposes of this section, where an exemption in respect of any goods or services or both from the whole or part of the tax leviable thereon has been granted absolutely, the registered person supplying such goods or services or both shall not collect the tax, in excess of the effective rate, on such supply of goods or services or both
CHAPTER IV
DETERMINATION OF NATURE OF SUPPLY
7. (1) Subject to the provisions of section 10, supply of goods, where the location of
the supplier and the place of supply are in––
(a) two different States;
(b) two different Union territories; or
(c) a State and a Union territory,
shall be treated as a supply of goods in the course of inter-State trade or commerce.(2) Supply of goods imported into the territory of India, till they cross the customs frontiers of India, shall be treated to be a supply of goods in the course of inter-State trade or commerce. (3) Subject to the provisions of section 12, supply of services, where the location of the supplier and the place of supply are in–– (a) two different States; (b) two different Union territories; or (c) a State and a Union territory, shall be treated as a supply of services in the course of inter-State trade or commerce. (4) Supply of services imported into the territory of India shall be treated to be a supply of services in the course of inter-State trade or commerce. (5) Supply of goods or services or both,–– (a) when the supplier is located in India and the place of supply is outside India; (b) to or by a Special Economic Zone developer or a Special Economic Zone unit; or (c) in the taxable territory, not being an intra-State supply and not covered elsewhere in this section, shall be treated to be a supply of goods or services or both in the course of inter-State trade or commerce. 8. (1) Subject to the provisions of section 10, supply of goods where the location of the supplier and the place of supply of goods are in the same State or same Union territory shall be treated as intra-State supply: Provided that the following supply of goods shall not be treated as intra-State supply, namely:–– (i) supply of goods to or by a Special Economic Zone developer or a Special Economic Zone unit; (ii) goods imported into the territory of India till they cross the customs frontiers of India; or (iii) supplies made to a tourist referred to in section 15. (2) Subject to the provisions of section 12, supply of services where the location of the supplier and the place of supply of services are in the same State or same Union territory shall be treated as intra-State supply: Provided that the intra-State supply of services shall not include supply of services to or by a Special Economic Zone developer or a Special Economic Zone unit. Explanation 1.––For the purposes of this Act, where a person has,–– (i) an establishment in India and any other establishment outside India; (ii) an establishment in a State or Union territory and any other establishment outside that State or Union territory; or (iii) an establishment in a State or Union territory and any other establishment being a business vertical registered within that State or Union territory, then such establishments shall be treated as establishments of distinct persons. Explanation 2.––A person carrying on a business through a branch or an agency or a representational office in any territory shall be treated as having an establishment in that territory
9. Notwithstanding anything contained in this Act,–– (a) where the location of the supplier is in the territorial waters, the location of such supplier; or (b) where the place of supply is in the territorial waters, the place of supply, shall, for the purposes of this Act, be deemed to be in the coastal State or Union territory where the nearest point of the appropriate baseline is located. CHAPTER V PLACE OF SUPPLY OF GOODS OR SERVICES OR BOTH 10. (1) The place of supply of goods, other than supply of goods imported into, or exported from India, shall be as under,–– (a) where the supply involves movement of goods, whether by the supplier or the recipient or by any other person, the place of supply of such goods shall be the location of the goods at the time at which the movement of goods terminates for delivery to the recipient; (b) where the goods are delivered by the supplier to a recipient or any other person on the direction of a third person, whether acting as an agent or otherwise, before or during movement of goods, either by way of transfer of documents of title to the goods or otherwise, it shall be deemed that the said third person has received the goods and the place of supply of such goods shall be the principal place of business of such person; (c) where the supply does not involve movement of goods, whether by the supplier or the recipient, the place of supply shall be the location of such goods at the time of the delivery to the recipient; (d) where the goods are assembled or installed at site, the place of supply shall be the place of such installation or assembly; (e) where the goods are supplied on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, the place of supply shall be the location at which such goods are taken on board. (2) Where the place of supply of goods cannot be determined, the place of supply shall be determined in such manner as may be prescribed. 11. The place of supply of goods,–– (a) imported into India shall be the location of the importer; (b) exported from India shall be the location outside India. 12. (1) The provisions of this section shall apply to determine the place of supply of services where the location of supplier of services and the location of the recipient of services is in India. (2) The place of supply of services, except the services specified in sub-sections (3) to (14),–– (a) made to a registered person shall be the location of such person; (b) made to any person other than a registered person shall be,–– (i) the location of the recipient where the address on record exists; and (ii) the location of the supplier of services in other cases. (3) The place of supply of services,–– (a) directly in relation to an immovable property, including services provided by architects, interior decorators, surveyors, engineers and other related experts or estate agents, any service provided by way of grant of rights to use immovable property or for carrying out or co-ordination of construction work; or (b) by way of lodging accommodation by a hotel, inn, guest house, home stay, club or campsite, by whatever name called, and including a house boat or any other vessel; or (c) by way of accommodation in any immovable property for organising any marriage or reception or matters related thereto, official, social, cultural, religious or business function including services provided in relation to such function at such property; or (d) any services ancillary to the services referred to in clauses (a), (b) and (c), shall be the location at which the immovable property or boat or vessel, as the case may be, is located or intended to be located: Provided that if the location of the immovable property or boat or vessel is located or intended to be located outside India, the place of supply shall be the location of the recipient. Explanation.––Where the immovable property or boat or vessel is located in more than one State or Union territory, the supply of services shall be treated as made in each of the respective States or Union territories, in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed. (4) The place of supply of restaurant and catering services, personal grooming, fitness, beauty treatment, health service including cosmetic and plastic surgery shall be the location where the services are actually performed. (5) The place of supply of services in relation to training and performance appraisal to,–– (a) a registered person, shall be the location of such person; (b) a person other than a registered person, shall be the location where the services are actually performed. (6) The place of supply of services provided by way of admission to a cultural, artistic, sporting, scientific, educational, entertainment event or amusement park or any other place and services ancillary thereto, shall be the place where the event is actually held or where the park or such other place is located. (7) The place of supply of services provided by way of,— (a) organisation of a cultural, artistic, sporting, scientific, educational or entertainment event including supply of services in relation to a conference, fair, exhibition, celebration or similar events; or (b) services ancillary to organisation of any of the events or services referred to in clause (a), or assigning of sponsorship to such events,–– (i) to a registered person, shall be the location of such person; (ii) to a person other than a registered person, shall be the place where the event is actually held and if the event is held outside India, the place of supply shall be the location of the recipient. Explanation.––Where the event is held in more than one State or Union territory and a consolidated amount is charged for supply of services relating to such event, the place of supply of such services shall be taken as being in each of the respective States or Union territories in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed.
(8) The place of supply of services by way of transportation of goods, including by mail or courier to,–– (a) a registered person, shall be the location of such person; (b) a person other than a registered person, shall be the location at which such goods are handed over for their transportation. (9) The place of supply of passenger transportation service to,— (a) a registered person, shall be the location of such person; (b) a person other than a registered person, shall be the place where the passenger embarks on the conveyance for a continuous journey: Provided that where the right to passage is given for future use and the point of embarkation is not known at the time of issue of right to passage, the place of supply of such service shall be determined in accordance with the provisions of sub-section (2). Explanation.––For the purposes of this sub-section, the return journey shall be treated as a separate journey, even if the right to passage for onward and return journey is issued at the same time. (10) The place of supply of services on board a conveyance, including a vessel, an aircraft, a train or a motor vehicle, shall be the location of the first scheduled point of departure of that conveyance for the journey. (11) The place of supply of telecommunication services including data transfer, broadcasting, cable and direct to home television services to any person shall,— (a) in case of services by way of fixed telecommunication line, leased circuits, internet leased circuit, cable or dish antenna, be the location where the telecommunication line, leased circuit or cable connection or dish antenna is installed for receipt of services; (b) in case of mobile connection for telecommunication and internet services provided on post-paid basis, be the location of billing address of the recipient of services on the record of the supplier of services; (c) in cases where mobile connection for telecommunication, internet service and direct to home television services are provided on pre-payment basis through a voucher or any other means,–– (i) through a selling agent or a re-seller or a distributor of subscriber identity module card or re-charge voucher, be the address of the selling agent or re-seller or distributor as per the record of the supplier at the time of supply; or (ii) by any person to the final subscriber, be the location where such prepayment is received or such vouchers are sold; (d) in other cases, be the address of the recipient as per the records of the supplier of services and where such address is not available, the place of supply shall be location of the supplier of services: Provided that where the address of the recipient as per the records of the supplier of services is not available, the place of supply shall be location of the supplier of services: Provided further that if such pre-paid service is availed or the recharge is made through internet banking or other electronic mode of payment, the location of the recipient of services on the record of the supplier of services shall be the place of supply of such services.
Explanation.––Where the leased circuit is installed in more than one State or Union territory and a consolidated amount is charged for supply of services relating to such circuit, the place of supply of such services shall be taken as being in each of the respective States or Union territories in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed. (12) The place of supply of banking and other financial services, including stock broking services to any person shall be the location of the recipient of services on the records of the supplier of services: Provided that if the location of recipient of services is not on the records of the supplier, the place of supply shall be the location of the supplier of services. (13) The place of supply of insurance services shall,–– (a) to a registered person, be the location of such person; (b) to a person other than a registered person, be the location of the recipient of services on the records of the supplier of services. (14) The place of supply of advertisement services to the Central Government, a State Government, a statutory body or a local authority meant for the States or Union territories identified in the contract or agreement shall be taken as being in each of such States or Union territories and the value of such supplies specific to each State or Union territory shall be in proportion to the amount attributable to services provided by way of dissemination in the respective States or Union territories as may be determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed. 13. (1) The provisions of this section shall apply to determine the place of supply of services where the location of the supplier of services or the location of the recipient of services is outside India. (2) The place of supply of services except the services specified in sub-sections (3) to (13) shall be the location of the recipient of services: Provided that where the location of the recipient of services is not available in the ordinary course of business, the place of supply shall be the location of the supplier of services. (3) The place of supply of the following services shall be the location where the services are actually performed, namely:— (a) services supplied in respect of goods which are required to be made physically available by the recipient of services to the supplier of services, or to a person acting on behalf of the supplier of services in order to provide the services: Provided that when such services are provided from a remote location by way of electronic means, the place of supply shall be the location where goods are situated at the time of supply of services: Provided further that nothing contained in this clause shall apply in the case of services supplied in respect of goods which are temporarily imported into India for repairs and are exported after repairs without being put to any other use in India, than that which is required for such repairs; (b) services supplied to an individual, represented either as the recipient of services or a person acting on behalf of the recipient, which require the physical presence of the recipient or the person acting on his behalf, with the supplier for the supply of services.
(4) The place of supply of services supplied directly in relation to an immovable property, including services supplied in this regard by experts and estate agents, supply of accommodation by a hotel, inn, guest house, club or campsite, by whatever name called, grant of rights to use immovable property, services for carrying out or co-ordination of construction work, including that of architects or interior decorators, shall be the place where the immovable property is located or intended to be located. (5) The place of supply of services supplied by way of admission to, or organisation of a cultural, artistic, sporting, scientific, educational or entertainment event, or a celebration, conference, fair, exhibition or similar events, and of services ancillary to such admission or organisation, shall be the place where the event is actually held. (6) Where any services referred to in sub-section (3) or sub-section (4) or sub-section (5) is supplied at more than one location, including a location in the taxable territory, its place of supply shall be the location in the taxable territory. (7) Where the services referred to in sub-section (3) or sub-section (4) or sub-section (5) are supplied in more than one State or Union territory, the place of supply of such services shall be taken as being in each of the respective States or Union territories and the value of such supplies specific to each State or Union territory shall be in proportion to the value for services separately collected or determined in terms of the contract or agreement entered into in this regard or, in the absence of such contract or agreement, on such other basis as may be prescribed. (8) The place of supply of the following services shall be the location of the supplier of services, namely:–– (a) services supplied by a banking company, or a financial institution, or a non-banking financial company, to account holders; (b) intermediary services; (c) services consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels, up to a period of one month. Explanation.––For the purposes of this sub-section, the expression,–– (a) “account” means an account bearing interest to the depositor, and includes a non-resident external account and a non-resident ordinary account; (b) “banking company” shall have the same meaning as assigned to it under clause (a) of section 45A of the Reserve Bank of India Act, 1934; (c) ‘‘financial institution” shall have the same meaning as assigned to it in clause (c) of section 45-I of the Reserve Bank of India Act, 1934; (d) “non-banking financial company” means,–– (i) a financial institution which is a company; (ii) a non-banking institution which is a company and which has as its principal business the receiving of deposits, under any scheme or arrangement or in any other manner, or lending in any manner; or (iii) such other non-banking institution or class of such institutions, as the Reserve Bank of India may, with the previous approval of the Central Government and by notification in the Official Gazette, specify. (9) The place of supply of services of transportation of goods, other than by way of mail or courier, shall be the place of destination of such goods. (10) The place of supply in respect of passenger transportation services shall be the place where the passenger embarks on the conveyance for a continuous journey
(11) The place of supply of services provided on board a conveyance during the course of a passenger transport operation, including services intended to be wholly or substantially consumed while on board, shall be the first scheduled point of departure of that conveyance for the journey. (12) The place of supply of online information and database access or retrieval services shall be the location of the recipient of services. Explanation.––For the purposes of this sub-section, person receiving such services shall be deemed to be located in the taxable territory, if any two of the following noncontradictory conditions are satisfied, namely:–– (a) the location of address presented by the recipient of services through internet is in the taxable territory; (b) the credit card or debit card or store value card or charge card or smart card or any other card by which the recipient of services settles payment has been issued in the taxable territory; (c) the billing address of the recipient of services is in the taxable territory; (d) the internet protocol address of the device used by the recipient of services is in the taxable territory; (e) the bank of the recipient of services in which the account used for payment is maintained is in the taxable territory; (f) the country code of the subscriber identity module card used by the recipient of services is of taxable territory; (g) the location of the fixed land line through which the service is received by the recipient is in the taxable territory. (13) In order to prevent double taxation or non-taxation of the supply of a service, or for the uniform application of rules, the Government shall have the power to notify any description of services or circumstances in which the place of supply shall be the place of effective use and enjoyment of a service. 14. (1) On supply of online information and database access or retrieval services by any person located in a non-taxable territory and received by a non-taxable online recipient, the supplier of services located in a non-taxable territory shall be the person liable for paying integrated tax on such supply of services: Provided that in the case of supply of online information and database access or retrieval services by any person located in a non-taxable territory and received by a nontaxable online recipient, an intermediary located in the non-taxable territory, who arranges or facilitates the supply of such services, shall be deemed to be the recipient of such services from the supplier of services in non-taxable territory and supplying such services to the non-taxable online recipient except when such intermediary satisfies the following conditions, namely:–– (a) the invoice or customer’s bill or receipt issued or made available by such intermediary taking part in the supply clearly identifies the service in question and its supplier in non-taxable territory; (b) the intermediary involved in the supply does not authorise the charge to the customer or take part in its charge which is that the intermediary neither collects or processes payment in any manner nor is responsible for the payment between the non-taxable online recipient and the supplier of such services; (c) the intermediary involved in the supply does not authorise delivery; and (d) the general terms and conditions of the supply are not set by the intermediary involved in the supply but by the supplier of services.
(2) The supplier of online information and database access or retrieval services referred to in sub-section (1) shall, for payment of integrated tax, take a single registration under the Simplified Registration Scheme to be notified by the Government: Provided that any person located in the taxable territory representing such supplier for any purpose in the taxable territory shall get registered and pay integrated tax on behalf of the supplier: Provided further that if such supplier does not have a physical presence or does not have a representative for any purpose in the taxable territory, he may appoint a person in the taxable territory for the purpose of paying integrated tax and such person shall be liable for payment of such tax.
CHAPTER VI
REFUND OF INTEGRATED TAX TO INTERNATIONAL TOURIST
15. The integrated tax paid by tourist leaving India on any supply of goods taken out of India by him shall be refunded in such manner and subject to such conditions and safeguards as may be prescribed. Explanation.––For the purposes of this section, the term “tourist” means a person not normally resident in India, who enters India for a stay of not more than six months for legitimate non-immigrant purposes
CHAPTER VII
ZERO RATED SUPPLY
16. (1) “zero rated supply” means any of the following supplies of goods or services or both, namely:–– (a) export of goods or services or both; or (b) supply of goods or services or both to a Special Economic Zone developer or a Special Economic Zone unit. (2) Subject to the provisions of sub-section (5) of section 17 of the Central Goods and Services Tax Act, credit of input tax may be availed for making zero-rated supplies, notwithstanding that such supply may be an exempt supply. (3) A registered person making zero rated supply shall be eligible to claim refund under either of the following options, namely:–– (a) he may supply goods or services or both under bond or Letter of Undertaking, subject to such conditions, safeguards and procedure as may be prescribed, without payment of integrated tax and claim refund of unutilised input tax credit; or (b) he may supply goods or services or both, subject to such conditions, safeguards and procedure as may be prescribed, on payment of integrated tax and claim refund of such tax paid on goods or services or both supplied, in accordance with the provisions of section 54 of the Central Goods and Services Tax Act or the rules made thereunder.
CHAPTER VIII
APPORTIONMENT OF TAX AND SETTLEMENT OF FUNDS
17. (1) Out of the integrated tax paid to the Central Government,–– (a) in respect of inter-State supply of goods or services or both to an unregistered person or to a registered person paying tax under section 10 of the Central Goods and Services Tax Act; (b) in respect of inter-State supply of goods or services or both where the registered person is not eligible for input tax credit;
(c) in respect of inter-State supply of goods or services or both made in a
financial year to a registered person, where he does not avail of the input tax credit
within the specified period and thus remains in the integrated tax account after expiry
of the due date for furnishing of annual return for such year in which the supply was
made;
(d) in respect of import of goods or services or both by an unregistered person
or by a registered person paying tax under section 10 of the Central Goods and Services
Tax Act;
(e) in respect of import of goods or services or both where the registered person
is not eligible for input tax credit;
(f) in respect of import of goods or services or both made in a financial year by
a registered person, where he does not avail of the said credit within the specified
period and thus remains in the integrated tax account after expiry of the due date for
furnishing of annual return for such year in which the supply was received,
the amount of tax calculated at the rate equivalent to the central tax on similar intra-State
supply shall be apportioned to the Central Government.
(2) The balance amount of integrated tax remaining in the integrated tax account in
respect of the supply for which an apportionment to the Central Government has been done
under sub-section (1) shall be apportioned to the,––
(a) State where such supply takes place; and
(b) Central Government where such supply takes place in a Union territory:
Provided that where the place of such supply made by any taxable person cannot be
determined separately, the said balance amount shall be apportioned to,––
(a) each of the States; and
(b) Central Government in relation to Union territories,
in proportion to the total supplies made by such taxable person to each of such States or
Union territories, as the case may be, in a financial year:
Provided further that where the taxable person making such supplies is not identifiable,
the said balance amount shall be apportioned to all States and the Central Government in
proportion to the amount collected as State tax or, as the case may be, Union territory tax, by
the respective State or, as the case may be, by the Central Government during the immediately
preceding financial year.
(3) The provisions of sub-sections (1) and (2) relating to apportionment of integrated
tax shall, mutatis mutandis, apply to the apportionment of interest, penalty and compounding
amount realised in connection with the tax so apportioned.
(4) Where an amount has been apportioned to the Central Government or a State
Government under sub-section (1) or sub-section (2) or sub-section (3), the amount collected
as integrated tax shall stand reduced by an amount equal to the amount so apportioned and
the Central Government shall transfer to the central tax account or Union territory tax
account, an amount equal to the respective amounts apportioned to the Central Government
and shall transfer to the State tax account of the respective States an amount equal to the
amount apportioned to that State, in such manner and within such time as may be
prescribed.
(5) Any integrated tax apportioned to a State or, as the case may be, to the Central
Government on account of a Union territory, if subsequently found to be refundable to any
person and refunded to such person, shall be reduced from the amount to be apportioned
under this section, to such State, or Central Government on account of such Union territory,
in such manner and within such time as may be prescribed.
(c) in respect of inter-State supply of goods or services or both made in a
financial year to a registered person, where he does not avail of the input tax credit
within the specified period and thus remains in the integrated tax account after expiry
of the due date for furnishing of annual return for such year in which the supply was
made;
(d) in respect of import of goods or services or both by an unregistered person
or by a registered person paying tax under section 10 of the Central Goods and Services
Tax Act;
(e) in respect of import of goods or services or both where the registered person
is not eligible for input tax credit;
(f) in respect of import of goods or services or both made in a financial year by
a registered person, where he does not avail of the said credit within the specified
period and thus remains in the integrated tax account after expiry of the due date for
furnishing of annual return for such year in which the supply was received,
the amount of tax calculated at the rate equivalent to the central tax on similar intra-State
supply shall be apportioned to the Central Government.
(2) The balance amount of integrated tax remaining in the integrated tax account in
respect of the supply for which an apportionment to the Central Government has been done
under sub-section (1) shall be apportioned to the,––
(a) State where such supply takes place; and
(b) Central Government where such supply takes place in a Union territory:
Provided that where the place of such supply made by any taxable person cannot be
determined separately, the said balance amount shall be apportioned to,––
(a) each of the States; and
(b) Central Government in relation to Union territories,
in proportion to the total supplies made by such taxable person to each of such States or
Union territories, as the case may be, in a financial year:
Provided further that where the taxable person making such supplies is not identifiable,
the said balance amount shall be apportioned to all States and the Central Government in
proportion to the amount collected as State tax or, as the case may be, Union territory tax, by
the respective State or, as the case may be, by the Central Government during the immediately
preceding financial year.
(3) The provisions of sub-sections (1) and (2) relating to apportionment of integrated
tax shall, mutatis mutandis, apply to the apportionment of interest, penalty and compounding
amount realised in connection with the tax so apportioned.
(4) Where an amount has been apportioned to the Central Government or a State
Government under sub-section (1) or sub-section (2) or sub-section (3), the amount collected
as integrated tax shall stand reduced by an amount equal to the amount so apportioned and
the Central Government shall transfer to the central tax account or Union territory tax
account, an amount equal to the respective amounts apportioned to the Central Government
and shall transfer to the State tax account of the respective States an amount equal to the
amount apportioned to that State, in such manner and within such time as may be
prescribed.
(5) Any integrated tax apportioned to a State or, as the case may be, to the Central
Government on account of a Union territory, if subsequently found to be refundable to any
person and refunded to such person, shall be reduced from the amount to be apportioned
under this section, to such State, or Central Government on account of such Union territory,
in such manner and within such time as may be prescribed.
CHAPTER IX
MISCELLANEOUS
20. Subject to the provisions of this Act and the rules made thereunder, the provisions of Central Goods and Services Tax Act relating to,––
(i) scope of supply;
(ii) composite supply and mixed supply;
(iii) time and value of supply;
(iv) input tax credit;
(v) registration;
(vi) tax invoice, credit and debit notes;
(vii) accounts and records;
(viii) returns, other than late fee;
(ix) payment of tax;
(x) tax deduction at source;
(xi) collection of tax at source;
(xii) assessment;
(xiii) refunds;
(xiv) audit;
(xv) inspection, search, seizure and arrest;
(xvi) demands and recovery;
(xvii) liability to pay in certain cases;
(xviii) advance ruling;
(xix) appeals and revision;
(xx) presumption as to documents;
(xxi) offences and penalties;
(xxii) job work;
(xxiii) electronic commerce;
(xxiv) transitional provisions; and
(xxv) miscellaneous provisions including the provisions relating to the
imposition of interest and penalty,
shall, mutatis mutandis, apply, so far as may be, in relation to integrated tax as they
apply in relation to central tax as if they are enacted under this Act:
Provided that in the case of tax deducted at source, the deductor shall deduct
tax at the rate of two per cent. from the payment made or credited to the supplier:
Provided further that in the case of tax collected at source, the operator shall
collect tax at such rate not exceeding two per cent, as may be notified on the
recommendations of the Council, of the net value of taxable supplies:
Provided also that for the purposes of this Act, the value of a supply shall
include any taxes, duties, cesses, fees and charges levied under any law for the time
being in force other than this Act, and the Goods and Services Tax (Compensation to
States) Act, if charged separately by the supplier:
Provided also that in cases where the penalty is leviable under the Central
Goods and Services Tax Act and the State Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act, the penalty leviable under this Act shall be the
sum total of the said penalties.
21. Import of services made on or after the appointed day shall be liable to tax under
the provisions of this Act regardless of whether the transactions for such import of services
had been initiated before the appointed day:
Provided that if the tax on such import of services had been paid in full under the
existing law, no tax shall be payable on such import under this Act:
Provided further that if the tax on such import of services had been paid in part under
the existing law, the balance amount of tax shall be payable on such import under this Act.
Explanation.––For the purposes of this section, a transaction shall be deemed to
have been initiated before the appointed day if either the invoice relating to such supply or
payment, either in full or in part, has been received or made before the appointed day.
22. (1) The Government may, on the recommendations of the Council, by notification,
make rules for carrying out the provisions of this Act.
(2) Without prejudice to the generality of the provisions of sub-section (1), the
Government may make rules for all or any of the matters which by this Act are required to be,
or may be, prescribed or in respect of which provisions are to be or may be made by
rules.(3) The power to make rules conferred by this section shall include the power to give
retrospective effect to the rules or any of them from a date not earlier than the date on which
the provisions of this Act come into force.
(4) Any rules made under sub-section (1) may provide that a contravention thereof
shall be liable to a penalty not exceeding ten thousand rupees.
23. The Board may, by notification, make regulations consistent with this Act and the
rules made thereunder to carry out the provisions of this Act.
24. Every rule made by the Government, every regulation made by the Board and
every notification issued by the Government under this Act, shall be laid, as soon as may
be, after it is made or issued, before each House of Parliament, while it is in session, for a
total period of thirty days which may be comprised in one session or in two or more successive
sessions, and if, before the expiry of the session immediately following the session or the
successive sessions aforesaid, both Houses agree in making any modification in the rule or
regulation or in the notification, as the case may be, or both Houses agree that the rule or
regulation or the notification should not be made, the rule or regulation or notification, as
the case may be, shall thereafter have effect only in such modified form or be of no effect,
as the case may be; so, however, that any such modification or annulment shall be without
prejudice to the validity of anything previously done under that rule or regulation or
notification, as the case may be.
25. (1) If any difficulty arises in giving effect to any provision of this Act, the
Government may, on the recommendations of the Council, by a general or a special order
published in the Official Gazette, make such provisions not inconsistent with the provisions
of this Act or the rules or regulations made thereunder, as may be necessary or expedient
for the purpose of removing the said difficulty:
Provided that no such order shall be made after the expiry of a period of three years
from the date of commencement of this Act.
(2) Every order made under this section shall be laid, as soon as may be, after it is
made, before each House of Parliament.
DR. G. NARAYANA RAJU
Secretary to the Govt. of India.