The Goods and Service taxation introduced in the country in 2017 is one of the most intricate taxation systems worldwide. And to shift taxpayers from diverse taxation systems like excise, VAT, service tax, OCTROI etc to one tax system across the country is another challenge the policy maker’s face. Hence, since the introduction, the law is getting amended as per the usage and issues faced.
The amendments and provisions thus introduced in past two years hold much importance while preparing the returns. However, the clauses and sections mentioned in these provisions are often lost on the common taxpayers who fail to understand the terminologies used and/or follow the amendments to the basic rules/laws. Thus to help you understand GST better, here is a list of basic terms used under GST.
Glossary of GST words starting with A
Actionable Claim: It refers to the claim on any unsecured debt or any beneficial interest in the movable property of the claimant.
Additional cess: The tax which is levied on top of another tax, usually earmarked for a specific purpose. Under the GST regime, an additional cess is levied upon certain goods for the first five years of GST, in order to compensate for any loss of revenue borne by the State government. These losses may arise due to the uniformization and reduction of tax rates associated with demerit goods under the GST.
Address of delivery: The address of the recipient of goods and/or services indicated on the tax invoice issued by a taxable person for delivery of such goods and/or services.
Address on record: means the address of the recipient as noted in the files of the supplier. This may or may not be the same as the address of delivery.
Adjudicating authority: means any authority competent to pass any order or decision relating to the GST Act, but does not include the Central Board of Excise and Customs, the Revisional authority, authority for the advance ruling, appellate authority for an advance ruling, appellate authority, or the appellate tribunal.
Aggregate Turnover: Aggregate value of all sales, supply and export of taxable as well as non-taxable goods and/or services by a person (with a PAN) excluding taxes.
Appellate tribunal: Refers to the Goods and Services Tax Appellate Tribunal set up under section 109.
Application Service Providers (ASPs): Similar to GST Suvidha Providers (GSPs), the ASPs address the difficulties faced by most taxpayer compliance during GSTR filing and work as a liaison between the taxpayers and the GSPs.
Appropriate government: The Central Government for IGST, UTGST and CGST, and the State Government for SGST.
ARN No.: Acquirer Reference Number is a unique number generated once a taxpayer has successfully registered on the
GST common portal.
Assessment: The determination process of tax liability inclusive of self-assessment, re-assessment, provisional assessment, summary assessment, and best judgment assessment.
Assessment of Tax Liability: The process of calculating the tax liability of a specific taxpayer based on the outward and inward supplies details furnished by them on the GST portal.
Glossary of GST words starting with B
B to B (B2B): Abbreviated for Business to business i.e. any sale or purchase carried out between two or more registered persons.
B to C: Abbreviated for Business to business i.e. any sale or purchase carried out between a registered person and one or more unregistered persons.
Bill of Supply: is a non-formal document issued by a supplier of GST exempted goods/services or by a composition dealer. The bill of supply doesn’t contain any tax information.
Glossary of GST words starting with C
Capital goods: The Goods (including the claimed ITC) are items which are purchased and used for doing/developing business (sale/to generate income).
Casual taxable person: a person occasionally undertaking transactions involving the supply of goods and/or services during the business, whether as principal, agent or in any other capacity, in a taxable territory where he has no fixed place of business.
Cash ledger: The record of all transactions associated with cash accounts that are operated by an organization and its branches. The cash ledger is one of the subsidiary ledgers that are maintained by a company alongside the general ledger.
CGST: CGST or the Central Goods and Services Tax is one of the 2 components under GST, levied on an intra-state (same state) supply which subsumes all indirect taxes collected by the centre (e.g.: CED, ST, etc.). The tax collected under this component becomes the revenue for the central government.
Common portal: The online GST portal, approved by the Central and State Governments, on the recommendation of the council for all GST related filing and notifications.
Composite supply: The supply consisting of two or more goods and/or services, which are naturally bundled and provided together, one of which is a principal supply.
Consideration: The supply of goods/ services involving:
- Any payment made or to be made, whether in money or kind
- A voluntary or involuntary act or forbearance of monetary value.
P.S: The subsidy given by the Central and/or State Governments is not included.
Council: Also known as GST council, is an apex member committee under GST, set up to modify, reconcile and procure any law or regulation pertaining to the Goods and Service tax in India. The Council meets at a destined date to take up issues pertaining to the enforcement of the law, discusses matters at hand and take actions. Until today 35 GST Council Meetings have happened.
|Sr. No||Date||GST Council Meeting|
|1||22nd and 23rd September 2016||New Delhi||1st GST Council Meeting|
|2||30th September, 2016||New Delhi|
|3||18th & 19th October, 2016||New Delhi|
|4||3rd & 4th November, 2016||New Delhi|
|5||2nd & 3rd December, 2016||New Delhi|
|6||11th December, 2016||New Delhi|
|7||22nd & 23rd December, 2016||New Delhi|
|8||3rd & 4th January, 2017||New Delhi|
|9||16th January, 2017||New Delhi|
|10||18th February, 2017||Udaipur, Rajasthan|
|11||4th March, 2017||New Delhi||11th GST Council Meeting|
|12||16th March, 2017||New Delhi|
|13||31st March, 2017||New Delhi|
|14||18th & 19th May, 2017||Srinagar, Jammu & Kashmir|
|15||3rd June, 2017||New Delhi|
|16||11th june, 2017||New Delhi|
|17||18th june, 2017||New Delhi|
|18||30th june, 2017||New Delhi|
|19||17th july, 2017||Held through Video Conferencing|
|20||05th August, 2017||New Delhi|
|21||09th September, 2017||Hyderabad|
|22||06th October, 2017||New Delhi|
|23||10th November||Guwahati, Assam|
|24||16th December 2017.||Held through Video Conferencing|
|25||18th January, 2018||New Delhi|
|26||10th March 2018||New Delhi||26th GST Council Meeting|
|27||4th May, 2018||Held through Video Conferencing||27th GST Council Meeting|
|28||21st July 2018||New Delhi||28th GST Council Meeting|
|29||04th August 2018||New Delhi|
28th September 2018
|Held through Video Conferencing|
|31||22nd December, 2018||New Delhi||31st GST Council Meeting|
|32||10th January, 2019||New Delhi||32nd GST Council Meeting|
|33||24th February 2019||New Delhi||33rd GST Council Meeting|
|34||19th March, 2019||New Delhi||34th GST Council Meeting|
|35||21st June, 2019||New Delhi||35th GST Council Meeting|
Credit note: The document issued by a taxable person in relation to the tax invoice exceeding the taxable value and/or tax payable in respect of the supply, or where the recipient returns the goods supplied, or where the services supplied are found to be deficient.
Composition Scheme: The scheme under GST for small business(annual turnover below Rs 1.5 crores and 75 lakhs INR for the North-Eastern States & Himachal Pradesh, wherein, the tax is paid at a fixed rate of annual income rather than at a fixed GST rate.
Glossary of GST words starting with D
Demerit goods: An item or service whose consumption is considered unhealthy, degrading, or otherwise socially undesirable due to the perceived negative effects on the consumers themselves. For instance, Alcohol or Tobacco based products.
Debit note: The document issued by a taxable person relating to the taxable value and/or tax charged as per the tax invoice when found to be less than the taxable value and/or tax payable in respect of such supply.
Digital signature certificate (DSC): It is a secure digital key that certifies the identity of the holder, issued by a Certifying Authority (CA). Generally, a DSC holds information about the identity of the holder and is considered the digital equivalent of a handwritten signature.
Glossary of GST words starting with E
E-commerce operator: Under the GST, a person who owns, operates and manages an E-Commerce platform for other vendors to sell goods to customers is known as E-commerce operator.
E-sign: E-sign or Electronic Signature is an online electronic service that allows a GST registered taxpayer/Aadhar holder to digitally sign a document. This can be configured inside the GST portal during the registration process.
Exempt supply: The supply of any goods and/or services that come under basic essentials for living and are exempted under GST to attract any tax on their supplies in India.
Glossary of GST words starting with F
Forward Charge: The tax liability of the supplier of goods and/or services to levy the tax on the recipient of the goods and/or services and to remit the same to the credit of the government.
Glossary of GST words starting with G
GST: Goods and Services Tax is a uniform tax that is imposed on the sale of goods and services across the country. It was introduced on July 1, 2017, to do away with the cascading effect of indirect taxes.
GSTIN: GSTIN is an abbreviation for Good and Service Tax Identification Number, which is a 15 digit, unique registration number given to every taxpayer registered under GST.
GSTN – GSTN stands for the Goods and Services Tax Network. It is a non-profit, non-government private limited company that provides an IT infrastructure and services to the Central and State Governments, taxpayers and other stakeholders for implementation of the Goods and Services Tax (GST).
Goods: All types of movable property, including actionable claim, growing crops, grass, and things attached to the land that are agreed to be severed before supply or under a contract of supply.
GST Suvidha Provider (GSP): The third-party applications (providers), permitted by the GST council to help a registered taxpayer in India to access the GST portal in an enriched manner by being more user-friendly and customer-centred manner.
GST Exemption: Some specific goods and services have been kept out of GST purview or are tax-free. Such goods and services come under GST exemption.
GST Ledgers: The three electronic (online) accounts assigned to each registered GST taxpayer for managing their cash, tax credit and output tax liability on the GST portal.
GST Tax Invoice: The GST tax invoice is a tax document issued by the registered supplier to the recipient of taxable goods and services on which GST has been charged.
Glossary of GST words starting with H
HSN code: HSN code stands for Harmonized System of Nomenclature, which consists of a globally used coding system and harmonized commodity description.
Glossary of GST words starting with I
IGST: The IGST or the Integrated Goods and Services Tax is the tax levied upon all interstate state transactions. The IGST is uniform across all the states and is expected to be applicable to all forms of supply – including the sale, stock transfer or import of goods. The revenue earned under the IGST is split between the central government and the destination state.
ITC ledger: An Input Tax Credit ledger (ITC ledger) is a type of a subsidiary ledger maintained by a company to keep track of the input taxes under the different components of GST (CGST, SGST, and IGST) and the ITC received by the company under these GST components.
Indirect Tax: Indirect Tax is a type of tax where the burden of payment can be shifted on to some other person based on the sale and/or the movement of goods and services
Input service distributor: It refers to the office of the supplier of goods and/or services that receives tax invoices issued under section 31 toward the receipt of input services and issues a prescribed document for distributing the credit of CGST, SGST, UTGST and/or IGST paid for the said services.
Input tax: Under GST, input tax refers to 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:
- IGST charged on the import of goods.
- Tax payable under subsections (3) and (4) of section 9.
- Tax payable under subsections (3) and (4) of section 5 of the IGST Act.
- Tax payable under subsections (3) and (4) of section 9 of the respective SGST Act; or
- Tax payable under subsections (3) and (4) of section 7 of the UTGST Act.
However, it does not include the tax paid under the composition levy.
Input tax credit: The tax credit that is given for the purpose of offsetting the collection of Goods and Services Tax.
Intrastate supply of goods means the supply of goods during intrastate trade or commerce regarding subsection (1) of section 8 of IGST Act, 2017.
Invoice The document containing the details of all the relevant details of the given business transaction as well as the details of both the parties involved.
Inward supply: Under GST, inward supply refers to the receipt of goods and/or services, whether by purchase, acquisition, or any other means and with or without any consideration.
Glossary of GST words starting with J
Job work: Any treatment or process undertaken by a person on goods belonging to another registered person is known as Job work.
Glossary of GST words starting with L
Local authority: A local authority can refer to
- Panchayat [as per clause (d) of Article 243 of the Constitution]
- Municipality [as per clause (e) of Article 243P of the Constitution]
- A municipal committee, a Zilla Parishad, 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
- Cantonment board [as per section 3 of the Cantonments Act, 2006 (41 of 2006)]
- Regional council or a district council formed under the 6th Schedule to the Constitution
- Development board formed under Article 371 of the Constitution
- The regional council formed under Article 371A of the Constitution
Glossary of GST words starting with M
Market value: The full amount that a recipient of supply has to pay 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 supplier are not related.
Mixed supply: When two or more individual supplies of goods and/or services are made together by a taxable person for a single price, wherein such supply does not form a composite supply, it is called mixed supply.
Glossary of GST words starting with N
Non-resident taxable person: A person who occasionally undertakes transactions involving the supply of goods and/or services, whether as principal or agent, or in any other capacity, but with no fixed place of business in India.
Glossary of GST words starting with O
OIDAR: Online information and Database Access or Retrieval Services [OIDAR] means services whose delivery is mediated through the internet. The supply is essentially automated involving minimal human intervention and impossible without information technology.
Output tax: the CGST/SGST on the taxable supply of goods and/or services made by a taxable person or by his agent. The tax payable on a reverse-charge basis is not considered under Output tax.
Outward supply: The supply of goods and/or services, whether by sale, transfer, barter, exchange, licence, rental, lease, or disposal, or any other means made or agreed to be made during the business.
Glossary of GST words starting with P
POS: POS or Place of Supply refers to the location of the buyer of goods and/or services.
Person: Under GST, a person may refer to
- An individual
- A Hindu undivided family
- A company
- A firm
- A Limited Liability Partnership
- An association of persons or a body of individuals, whether incorporated or not, in India or outside India
- Any corporation set up 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)
- A body corporate incorporated by or under the laws of a country outside India
- A cooperative society registered under any law relating to cooperative societies
- A local authority
- Central government or a State government.
- Society as defined under the Societies Registration Act, 1860 (21 of 1860)
- A trust
- Every artificial juridical person, not falling within any of the preceding sub-clauses
Place of Business: A place of business under GST can refer to
- A place from where the taxpayer carries his/her business from, which may include warehouse, godown, or any other place wherein the given person stores his goods or provides or receives goods and/or services
- A place where a taxable person keeps his books of account
- A place where a taxable person is engaged in business through an agent
Principal: The person who appoints an agent/job worker to carry the given business supply on his behalf.
Principal place of business: The primary location of business specified by the taxpayer as the principal place of business in the certificate of registration.
Glossary of GST words starting with R
Recipient: Under GST, the recipient of the supply of goods and/or services means:
- Where the consideration is payable, the person liable to pay that consideration.
- Where no consideration is payable, the person to whom the goods and/or services are delivered/rendered or made available.
- Includes an agent working on behalf of the recipient in relation to the goods and/or services provided.
Related Person: Under GST, a related person may refer to
- Officers or directors of one another’s business
- Legally recognised partners in business
- The employer and the employee
- Someone who directly or indirectly owns, controls, or holds 25 percent or more of the outstanding voting stock or shares of both
- One of them directly or indirectly controls the other
- A third person directly or indirectly controls both
- Together they directly or indirectly control a third person
- They are members of the same family
Return: Under GST, a registered taxpayer is required to furnish a self-assessed declaration of his business inward and outward supplies. These declarations are known as GST returns. There are various returns under GST depending on its usage:
Reverse Charge Mechanism (RCM): When a registered taxpayer purchases goods and/or services from an unregistered person, the tax liability on such goods and/or services is shifted to the recipient of the good instead of the supplier. This Mechanism is known as Reverse Charge Mechanism under GST.
Glossary of GST words starting with S
SAC: The SAC or the Services Accounting Code is a method of nomenclature that is put in use to identify, classify and define services under the GST.
SGST: The SGST or the State Goods and Services Tax is one of the 2 components under GST, levied on an intra-state (same state) supply which subsumes all indirect taxes collected by the centre (e.g.: State VAT, Luxury tax etc.). The tax collected under this component becomes the revenue for the state government.
Services: Any supply other than goods, money and securities that 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.
Supplier: The person providing the said goods and/or services or the agent acting as such on behalf of a supplier are known as a supplier.
Supply: Under GST, all forms of supply of goods and/or services such as sale, transfer, , exchange, license, barter, rental, lease, or disposal made or agreed to be made for a consideration by a person in the course of business and also includes import of services for a consideration whether or not in the course of business.
Glossary of GST words starting with T
TDS: TDS or Tax Deducted at Source under GST is a mechanism to track the transaction of supply of goods and/or services by making the recipient of such supply to deduct a small percentage of the amount to be paid to the supplier and deposit the same with the government.
Taxable person: An individual who carries on any business at any place in any state of India and who is registered or required to be registered under GST.
Turnover: Turnover or Aggregate turnover is the total value of sales (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) a company completes in the given financial year.
Glossary of GST words starting with U
UIN: The UIN or Unique Identity Number is an ID that is used to identify specialized agencies who are non-taxable on Indian soil. These agencies can be bodies of the United Nations, consulates, foreign embassies or organizations that are exempted either by the UN or by our government(s).
UQC – The Unit Quantity Code is an item code that is prescribed for every imported or exported item by the Customs authority according to the Customs Tariff Act 1975. This code should be mentioned on all Bills of Entry and Shipping Bills.
UTGST: The GST levied by the Union Territory on transactions of taxable goods and services within a UT.
Glossary of GST words starting with Z
Zero-rated supply: The supply of goods or services beyond national borders and/or to special economic zones is known as Zero Rated Supply as per section 16 of IGST Act, 2017.
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