GST dictionary: Decoding terms used in the new indirect tax regime

Know what terms like anti-profiteering, CGST, SGST, IGST means in the new regime

Anti-profiteering:

Any benefit by way of reduction in rate of tax or increase in input tax credit arising due to introduction of GST shall be passed on to the customers (through reduction in sale price) by way of commensurate reduction in prices. 

Casual taxable person:

A person who occasionally supplies goods and/or services in a state where he has no fixed place of business. 

Central GST, State GST:

CGST is levied on intrastate supplies by the central government and SGST is levied on intrastate supplies by respective state governments. 

  

Composition dealer:

A dealer who has opted to pay tax at concessional rate without collecting it from customers or setting off the tax paid on procurements. Generally, such scheme is available to persons having aggregate turnover of less than Rs 75 lakh during the year. 

Composite supply:

Composite supply is a supply of two or more goods or services or both which are naturally bundled and supplied together in the ordinary course of business (where one of them is a principal item and the others are ancillary). 

In composite supplies, tax on entire supply is charged at the rate applicable to principal supply. 

Distinct persons:

Branches of a same organisation registered under separate GSTINs. 

In case of registration of a company in two different states, then both such branches would be construed as ‘distinct persons’ for GST. Stock transfer of goods from one state registration of an entity to registration of the same entity in another state (distinct person) would be construed as taxable supply under GST.   

GST Identity Number/Unique Identity Number:

UIN is a unique number granted to specialised agency of the UNO or any multilateral financial institution and organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulates or Embassies of foreign countries. 

GSTIN is a unique registration number granted to persons other than above. 

Integrated GST:

IGST is levied on interstate supplies by the Centre (equal to CGST + SGST combined on supplies made within the state). 

Any supply of goods or services or both on interstate basis would typically attract IGST on the consideration thereof. 

Mixed supply:

Mixed supply is supply of two or more goods or services or both together for a single price (as a package) which can ordinarily be supplied separately. 

In mixed supplies, tax on entire supply is charged at the rate applicable to any given item therein which has the highest rate. 

  

Reverse charge:

Reverse charge means the liability to pay tax to the government is on the recipient of goods or services or both instead of the supplier. 

GST-registered entities procuring goods or services from unregistered dealers (dealers with turnover less than ~20 lakh) would need to pay GST on such procurements (if purchases below ~5,000 per day, then there is a waiver from paying GST). 

Supply:

The ambit of the term ‘supply’ under GST is wide to cover all forms of supply of goods or services or both. Some examples of supply are sale, transfer, barter, exchange, rental, lease, etc for a consideration in the course or furtherance of business. 

  

Zero-rated supplies:

Exports and supplies to SEZ unit/developer shall qualify as ‘zero-rated supply’. 

In case of zero-rated supplies, supplier has an option to not charge GST on supplies and claim refund of unutilised input tax credit thereof. In case option is adopted to pay GST on such supplies, supplier can claim refund of GST paid on such supply.

Compiled by Suresh Nair, tax partner, EY India and Vaibhav R Shah, senior tax professional, EY India