GST

GST Impact: GST is an indirect tax system levied upon the manufacture, sale and consumption of goods. GST is a single tax system that replaced all the previous indirect tax systems such as Sales tax and Value added tax. It is in force since 1st July 2017 to bring out uniformity in the taxation system on manufacture, sale and consumption of goods. Following were the primary objectives of implementing the single taxation system.

To remove the cascading effect of taxes to remove the tax on taxes easily.

To reduce tax evasion and corruption in the system.

To implement consumption-based tax instead of manufacturing.

To implement a single taxation system by absorbing all indirect taxes.

To bring about uniformity in the taxation system on manufacture, sale and consumption of goods over the country.

To improve upon the country’s GDP.

• Central GST: Goods and service tax levied at the centre.
• State GST: Goods and service tax levied at the state level.
• Dual GST: GST levied at state and centre concurrently.

Impact of GST

Given below is the overview of the impact of GST on Insurance, Mutual funds, Restaurants, Travel and hotels. Each sector is discussed in further detail below.

The expense ratio on mutual funds will go up 3%.

Transaction fees for financial services such as banking transactions and credit cards will increase as they will be taxed at 18%, a 3% increase from the previous 15%.

The premium amount on the insurance policies will increase.

Rates on hotel stays are applicable as per the tariff. Depending upon the tariff the applicable tax rates are 28%, 18% and 12%.

18% tax rate will be levied upon air-conditioned restaurants while non-AC restaurants will attract a 12% GST.

Transport services such as Ola and Uber will get cheaper and attract 5% GST, a deduction from the previous 6% but AC and first-class travel will get expensive.

GST is applicable on the risk part of the premium in the case of single premium annuity policies with 10% tax levied on the premium charged from the policyholder. In other life insurance business policies, 25% of the premium is applicable in the first year and 12.5% in the subsequent years.

In the case of term insurance plans in which the entire premium paid by the policyholder is only towards the risk cover, the applicable GST rate will be 18%.

In the case of ULIP plans the GST will be deducted from the premium. The premium payable doesn’t change in the case of ULIP plans and hence the fund value will change accordingly when GST comes into effect.

GST Impact on Mutual Funds

The levy of GST for mutual funds will be only on the total expense ratio (TER) of the mutual fund and therefore the impact of GST on the returns of mutual funds will be largely marginal. The expense ratio is the measure of the cost incurred by an investment company to operate its mutual fund commonly known as the expense ratio of mutual fund houses will go up by 3%. According to the SEBI guidelines, AMCs can levy charges only within the limits prescribed under the regulations.

GST Impact on Hotel Stays

Previously, domestic hospitality paid taxes in the range of 18-25% which includes the luxury and service tax. But now under the GST system, stays at 5-star hotels will get expensive.

For tariff amounts of 7,500 and above the GST rate will be set at 28%.

For tariff rates ranging between Rs. 2,500 and Rs. 7,500, the applicable GST rate will be 18%.

For tariff rates ranging between Rs. 1000 and Rs. 2,500, the GST rate applicable is 12%.

Hotels and lodges that charge less than Rs. 1000 are exempted from the GST.

Value-added tax ranging from 12.5%-14.5% in different states.

Service Tax(5.6%), Krishi Kalyan cess(0.2%) and Swachh Bharat Cess(0.2%).

For AC restaurants, the GST applicable is 18%  on the food bill.

For non-AC restaurants, the GST applicable is 12% on the food bill.

For restaurants with both AC and non-AC facilities, the GST rate will be as per the AC restaurants only i.e. 18%.

Non-AC train travel is exempt from GST, whereas first-class and AC travel will get expensive due to tax hikes from 4.5% to 5%.

Conclusion on GST Impact

GST came as a crucial tax reform since the Independence of India and it needs to be handled with utmost care and with improvement from time to time as applicable. Also, it is the responsibility of the central and the state government to conduct awareness programs among the various stakeholders.

 

Place of Supply of Goods/Services Under GST: GST is the abbreviated form of Goods and Service Tax. The Government of India implemented GST on 1st July 2017. GST is a type of value-added tax levied on the country’s supply and consumption of goods and services. GST is a consumption-based tax is received by the state or central government where the goods are consumed. For the fair calculation of GST, the place of supply of the goods and services should be appropriately defined. It should be specified whether the supply took place within the state or outside the state. In this article, we will discuss the place of supply of goods and services under GST.

Place of Supply for Goods

The Goods and Service Tax Act lays down specific rules regarding the place of supply. Here are some of the key points to determine the rightful place of supply:

• When the supply involves the movement of goods, the place of supply will be considered the location at which the good’s movement is terminated for delivery to the recipient.
• When the supply does not involve the movement of goods either by the supplier or the recipient, the place of supply is considered the location of such goods when delivering to the recipient.
• Certain goods must be assembled or installed at a site, maybe an office or a factory. In the case of such goods, the place of supply will be the location where such goods are assembled or installed.
• When the goods are supplied through a conveyance, maybe a vessel, an aircraft, a train, or a motor vehicle. The place of supply for such goods will be deemed the location at which such goods are taken on board or loaded on the conveyance.
• In the case of goods imported into India, the importer’s location will be considered as the place of supply as per the GST rules.
• In the case of goods exported out of India, the location where the goods are delivered will be considered as the place of supply for GST calculation.

Place of Supply for Services

In terms of services, the place of supply is defined differently as per the GST rules. The following points explain the place of supply for services as per GST:

• If the services are provided to a registered person, then such a registered person’s location will be considered as the place of supply.
• If the service is provided to any person other than a registered person. In that case, the recipient’s location where the address exists on record shall be considered the place of supply for such service.
• If the service is provided to any person other than a registered person. In that case, the location of the supplier of such services will be considered the place of supply if there exists no record of address.

Place of Supply for Services In Special Cases

Apart from the supply of services in the cases mentioned above, certain specific cases are mentioned in the GST act. Let us have a look at these cases:

Place of Supply For Services To an Immovable Property

Services provided concerning an Immovable property includes services, provided by architects, interior designers, painter, carpenters, engineers, and other experts. The place of supply of such services shall be the location of such immovable property as per GST.

Place of Supply for Hotel, Guest House, Club Services

Services such as accommodation in a hotel or guest house, organising a marriage or any other function, any official or social gathering in a resort or hotel premises comes under this category. The place of supply for such kind of services will be the hotel, guest house or club location.

Place of Supply For Restaurant and Catering Services

Services including healthcare, personal grooming, catering and restaurants fall under this category. The place of supply for such services will be the location where such services are actually performed.

Place of Supply For Cultural Events

Admission to cultural, artistic, scientific or educational events falls under the category of cultural events. In the case of services provided under cultural events, the place of supply is considered as the location where such an event was actually held.

Place of Supply For Transportation Services

For transportation services, such as mail or courier, the place of supply will be the location of a person in case the service is provided to a registered person. If the transportation service is provided to any person other than a registered person, then the place of supply shall be the location where the goods are handed for transit.

Place of Supply For Passenger Transport Service

The place of supply for passenger transport services shall be the person’s location in case the service is provided to a registered person. If the service is provided to any person other than a registered person, then the place of supply will be the location at which the person embarks on the mode of conveyance for the journey.

Place of Supply For Insurance Services

The place of supply for insurance services shall be the person’s location if the insurance service is provided to a registered person. If the service is provided to any person other than a registered person, then the recipient’s location will be treated as the place of supply.

Place of Supply Where The Location of The Supplier or Recipient Is Outside India

When goods are supplied outside India, the recipient’s location will be considered as the place of supply as per the GST rules. In case the recipient’s location is not available, the place of supply will be the location of the supplier of such goods or services.

GST on Purchase & Sale of Second Hand Goods Margin Scheme: There is definitely a requirement to defines the rules for the purchase and sale of second-hand goods. For example, a car is purchased by Mr. Khanna for Rs. 15 lakhs, and it comprises a GST amount of Rs.4.2 lakhs. Now, if he resells it after four years for Rs. 6 lakhs, then if GST is imposed on such Rs. 4.2 lakh, then it leads to double taxation.

Thus, the Margin scheme is made available by the government to handle such circumstances.

What is the Margin Scheme?

Dealer Acting as An Agent

Goods That Are Purchased From A Registered Dealer

Points Still Require To Be Cleared

Applicable GST Rates

What is the Margin Scheme?

Margin scheme under GST benefits in avoiding double taxation on the supply of goods that already taxed. Under the Margin Scheme, the seller or the supplier of the goods can calculate the difference between the value of the purchase value of the goods received by the customer and supplied seller.

Typically, as per valuation rules, GST is imposed on the original transaction value of the supply of the goods. However, regarding second-hand goods, an individual dealing in such goods may be permitted to pay tax on the margin. If there is no margin, then on such a transaction, there will be no imposed payable GST. This is the base of the GST margin scheme.

The scheme’s main objective is to evade double taxation as the goods that once borne the incidence of tax usually re-enter India’s supply and economic supply chain.

Such a scheme is relevant only when there is minor processing or no change in the goods. Such a scheme can-not be applied if there is a variation in the nature of goods. GST applies to the whole amount only when there is a change in nature.

For example, a jeweller purchases a gold chain and then melts it to make a ring, then tax is imposed on the whole amount, not on the margin amount.

It will be ignored only if the sales price less purchase price is negative. For example, if a dealer purchases two cars, in which he earns a profit of Rs. 60,000 in one and cause a loss of Rs. 30,000 on the second one. The dealer, in such a case, has to pay tax on Rs. 60,000 only.

The same shall be part of the margin and added to the value of goods in case of any other added value through refurbishing, repair, reconditioning, etc.

Dealer Acting as An Agent

If the second-hand dealer is not selling or purchasing goods but acting as an agent to find the buyer for a seller, then such scheme will be in-applicable to such dealer. The rate of 18% GST is applicable on the received commission by the dealer, either from the buyer or from the seller.

Goods That Are Purchased From A Registered Dealer

If a dealer from another registered dealer purchases second-hand goods, GST is secured by the selling dealer. As per standard ITC rules, the GST paid by purchasing dealer is allowed as an input tax credit to the individual.

The dealer selling the particular good is required to pay GST, not on the total value, instead of on the margin amount.

Points Still Require To Be Cleared

The dealer is payable for the tax on his margin only if the person is selling the second-hand goods to a customer. GST amount and GST rate are to be presented in the invoice. Therefore, the margin amount of the seller can be determined from the purchase of goods. And for obvious reasons, no seller wants to let the purchaser know his margin.

In Repossession Case, Value of Purchase From Defaulting Borrower

The purchase price (of second-hand goods dealer) will be calculated as Original Purchase price less five percentage points for every quarter or part in the case of goods that are repossessed from the defaulting borrower.

Applicable GST Rates

The GST rates to be implemented to used goods would be the same as if they were new goods since there is no distinction between new goods and second-hand goods under GST Law. For example, if a 28% GST rate is relevant on a car, then on the selling of the second-hand car, also 28% GST rate is applicable.

Co-operative Housing Societies

Co-operative housing societies are voluntary associations of individuals with common needs who come together to achieve a common economic interest. Co-operatives are entities registered under the cooperative laws of their respective state. The main objective of a co-operative is to provide support for its members. People come together only to pool their resources and derive common benefits but not any profit.

Co-operatives also supply certain services to their members who stay in a residential society by collecting statuary dues for maintenance of the building, security and also to statuary authorities. A cooperative can be formed as per the provisions laid down in the Cooperative Societies Act, 1912. It states that at least 10 individuals of age above 18 with the capacity to enter into a contract with common economic objectives can come together to form a cooperative society.

A cooperative society is a special type of business organisation that,

• Open membership – The membership for the society is open to anyone with a common interest. The minimum numbers of individuals required are 10 but there is no upper limit on the number of members but it is specified by the members after the formation.
• Voluntary- Members join the co-operative by their choice as and when he likes, stays for as long as he like and can leave at will.
• State Control- To protect the interest of the members, cooperative societies are placed under state control through registration. Also, society has to submit details about the members and the business it undertakes while maintaining the book of accounts that are to be audited by government auditors.
• Democratic Management- The society is managed by a group of members of society known as the “Board of Directors” who are elected representatives of the society.
• Separate Legal Entity
• Distribution of Surplus- Co-operatives while providing services to their members also generate profits while conducting business. The profit is not earned at the cost of members and is distributed on the basis of member’s participation in the business of the society.
• Self-help – Co-operative work and thrive on the principle of mutual help.

GST On Co-operative Housing Societies

GST applies to the supply of services by a person if it is a non-profit or cooperative society. The activities of the housing society would thus attract GST and it needs to register itself and comply with the GST Law.

As the activity of the society is considered furtherance of business. As per clause (e) of section 2(17) of the CGST Act, the business includes “provision by a club, association, society or any such body of the facilities or benefits to its members.

Exemption from GST

Notification No.12/2017 – Central Tax (Rate) dated 28.06.2017 provides an exemption to housing societies. Service by an unincorporated body or non-profit entity registered under the law for the time being in force, to its own members by way of reimbursement of charges or share of contribution-

1. As a trade union.
2. For the provision of carrying out any activity that is exempted from the GST.
3. If the housing society is collecting up to Rs. 7500 per month per member then no GST is not to be levied to source goods or services for the common benefit of the members.

If the monthly bill exceeds Rs. 7500, GST will be levied on the exceeded amount. For example, if the monthly maintenance bill per member is Rs. 10000, the GST will be levied upon the difference i.e., Rs. 2500 only.

GST is levied upon sinking funds, repairs & maintenance fund, car parking charges, non-occupancy charges or simple interest for late payments as these charges are collected by the housing society for the supply of services meant for its members.

Also, if the annual turnover or the maintenance charges is less than 20 lakhs, it need not register under the GST Law and no GST will be levied. Only when the annual turnover exceeds 20 lakh, the cooperative is required to register as per the GST Law and obtain the GST number for the payment of charges as applicable.

Exemption of Services

The charges on the services exempted from the GST do not contribute towards the monthly bill of members. These are-

• Services provided by theCentral government. State government, a Union territory or local authority to a person other than a business entity is exempted from GST therefore GST on  Property Tax, Water Tax collected by the housing society from the members is not levied. Similarly, GST is also not applicable to Non-agricultural tax, electricity charges, etc. But if these charges are collected for the generation of electricity by the society generator or to provide drinking water, then the charges collected for these services are liable to GST.

As per section 23(1) of the CGST Act 2017, the following persons are not liable to registrations completely

• Any person engaged in the business of supplying goods or services exempted from the GST under the integrated Goods and Services Tax Act.
• An agriculturist, to the extent of supply of produce out of cultivation of land.

How To Surrender GST: In India, everybody’s focus is on GST in the present situation because of its complicated and unique rules. Many people in India are still confused on matters like the process for GST registration, filing the return forms, tax challan, e-way bill and different forms which are related to GST. But among all these problems, the major issue faced by people is How to surrender GST after registration? and the place where one can surrender the GST registration certificate

Some people apply for GST by mistake and get the GST registration certificate form; thus, they become worried and think of ways to return the certificate which has been delivered to him/her by mistake. Most people are unaware of the time limit for surrender of GST registration certificate surrendering process. Through this article, we will discuss the process in a detailed manner so that one can get a clear idea.

One can surrender the GST registration certificate only if his/her annual turnover is less than 20 lakhs ( total sale and unregistered purchase). Application for surrendering GST certificate can be filed only after one year of GST registration and not one day before that. Read on the Article to know more about GST Cancellation Fees, GST Late Fees Cancellation and GST Cancellation Charges.

CGST Rule for Cancellation Of Registration

The registration that has been granted to an individual can get cancelled if the individual:

• is not involved in any business at the location mentioned in the registration form. The declared location of the business in the form is considered fake.
• Takes the liberty to issue a bill without conducting any supply of goods and services. This action is considered to be a violation of the provisions in the GST act.
• His/her actions violates or breaks the provisions mentioned in section 171 of the GST Act or the rules made thereunder.

Rules for Cancelling/Surrendering GST

The rules that have been followed while cancelling or surrendering the GST registration certificate form by a particular individual, business, or the government:

• When the proper officer (who has been assigned for executing the job of approving cancellation) is satisfied with all the claims produced before him to support the demand of cancelling the GST registration done of an individual or a business entity, if the proper officer approves the claim, then the form is liable to get cancelled under section 29. Before approving the claim, he/she will draft notice and direct the individual or the business entity to show the cause of his actions within a period of seven days from the date of issuing notice. The individual or the business entity must explain why their registration shall not be cancelled.
• The reply to the proper officer’s cause notice has to be forwarded within the specified period mentioned in the sub-rule. The cause notice issued under sub-rule(1) must be furnished in FORM REG-18.
• When a person has taken the liberty to draft an application for re registration of gst after cancellation of his/her registration is no longer liable to remain registered, and his/her registration must get cancelled by the proper officer as soon as possible. The proper officer is responsible for issuing an order in FORM GST REG-19 within a period of thirty days from the date of submission of cancellation application under sub-rule (1) of rule 20.  The proper officer will decide a particular date from when the individual’s registration will be considered cancelled. Before that, the individual must clear all the tax debts that are pending. Only after clearing all the debts his/her registration can get cancelled. The individual needs to pay the pending penalties and the amount which he/she is liable to pay because it is mentioned in sub-section (5) of section 29.
• Suppose the reply forwarded by the individual for the show cause notice is considered to be satisfactory and sounds believable to the proper officer. In that case, he/she is responsible for dropping the proceedings and passing an order in FORM GST REG-20.
• The provisions in sub-rule (3) are applied to the legal heirs of a deceased proprietor. This happens only in the case where the proprietor has submitted a cancellation certificate before dying.

Ways to Cancel or Surrender GST Registration

GST registration can get cancelled or surrendered in the following three ways:

1. GST Getting Surrendered By The Registered Person Himself
2. GST Getting Surrendered By The GST Officer
3. GST Getting Surrendered By The Legal Hirer

GST Getting Surrendered By The Registered Person Himself

A registered person is liable to apply for cancellation of his/her registration only if he satisfies the following.

• His/her annual turnover is less than 20 lakhs, including registered and unregistered incomes.
• The business of the individual has stopped its operations and is planning for discontinuation.
• Uncertain death of the proprietor can force the business to shut down.
• When the business of an individual is no longer liable to the GST according to the rules issued by the government.

GST Getting Surrendered By The Gst Officer

GST officer has the authority to cancel the registration of an individual or a company if they fall under the following conditions:

• Violation of GST policies or rules by a particular organization.
• When a registered person has stopped filing the tax return for the last three years.
• When a registered company has not generated any income and is not involved in any type of business for the last six months after getting registered for GST.
• Some other issues can also be the cause of cancellation.

GST Getting Surrendered By The Legal Hirer

A legal hirer has all the authority to apply for the cancellation of the registration after the death of the proprietor. This is only possible in a sole proprietorship business.

Steps for Cancellation of GST Registration

Every individual residing in India and has done GST registration has the doubt How to surrender GST? So to clear out all your doubts, here are the detailed steps which one need to follow for cancelling his/her GST registration:

• Step – 1: Log in to the official website of GST and then click on the option Cancellation of Provisional Registration.
• Step – 2: The cancellation webpage opens on your computer.
  • Your GSTIN and the name of the business will appear on the website automatically.
  • You then need to give a reason for the cancellation of registration.
• Step – 3: The website will ask if you have issued any tax invoices in that particular month.
• Step – 4: Then fill up the blank places with the details the website is asking for in order to move forward with the process.
• Step – 5: Finally, you need to sign off with the EVC with you are a proprietorship or partnership. LLPs and companies must sign off with a DSC.

Conclusion on Surrender of GST Registration

GST is an important matter for all who are into business or for those who earn a good amount every year. So it’s important for them to know all the processes and rules related to GST. From this article, we understand the rules, ways of GST cancellation process, fees, letter format, form and how to surrender GST. This might have helped a lot of individuals.

Mixed Supply & Composite Supply Under GST: GST or Goods and Service Tax defines supply as any event of an exchange of goods or services that can be taxed under GST. GST can only be charged at the time of supply of goods and services.

Supply Under GST includes sale, transfer, exchange, barter, license, rental, lease, and disposal. A person is only liable to pay GST if he/she undertakes any of the transactions mentioned above during the ordinary course or furtherance of business. Thus, to calculate fair GST, a transaction must come under the definition of supply as per GST. Supply can be of two types according to GST, mixed supplies and composite supplies.

In this article, we will discuss types of supplies and the time of such supplies under GST.

What Are Mixed Supplies?

According to GST act, mixed supplies are those supplies which involve two or more individual supply of goods but are treated as one single supply. In simple words, A mixed supply is a supply of two or more independent items together. The items involved in a mixed supply do not affect the sale of each other, and both items can be sold separately.  A supply that does not constitute a composite supply can be treated as a mixed supply.

To understand the definition better, let’s take an example, a grocery store makes a celebration package for Diwali, where the package consists of sweets, snacks, and fruit juices. All three items in the package can be sold separately and do not affect the other product’s sales. When these items are combined as a single unit, they can be termed as mixed supplies.

GST Rates In Case of Mixed Supplies

As per GST rules, the tax rate applicable for the mixed supplies will be that of the item that attracts the highest rate of GST. As in the above example, the GST rate would be the highest tax rate applicable on sweets, snacks, and fruit juices.

Time of Supply for Mixed Supplies

In mixed supplies, we know that the rate of the item that attracts the highest tax is applied. Hence, if the highest tax rate belongs to a supply under mixed supplies, it will be treated as a supply of services. In such a case, the provisions of time of supply of services will be applicable.

Similarly, suppose the highest tax rate belongs to an item of good. In that case, the supply will be treated as the supply of goods, and provisions relating to the time of supply of goods will be considered.

How To Determine Whether A Supply Is Mixed Or Not?

A supply can be termed a mixed supply only when the items involved in the supply can be sold separately and are not bundled up for sale in the normal course of business. It should also be kept in mind that each supply item under mixed supply does not influence the sale of other items involved therein.

What Are Composite Supplies?

GST defines composite supply as those supplies in which two or more items are bundled up together for sale during the ordinary course of business. The items involved in a composite supply are dependent on each other and cannot be sold separately. One of the items sold under a composite supply is the principal item. The items in a composite supply are sold in conjunction with each other as a business practice.

To understand the definition more easily, let’s take an example; when you buy a mobile phone, it comes with a box and warranty card, here the principal item is the mobile phone. The box and the warranty card cannot be sold separately without the phone, so the sale can be termed a composite supply.

GST Rates In Composite Supplies

As per the rules and regulations of GST, the tax rate applicable on the principal item under a composite supply will be the GST for the whole supply. In the above example, the principal item is the mobile phone, so the tax rate applicable on the mobile phone will be the tax rate of the whole supply.

Time of Supply for Composite Supply

Under GST, the taxable rate of a composite supply solely depends on the principal item of supply. If the principal item belongs to the service category, then the composite supply will be treated as a supply of services. In this case, the provisions of time of supply of services will be applicable.

Similarly, If the principal item of a composite supply belongs to goods. The supply will be treated as the supply of goods, and the provisions relating to the time of supply of goods will be applicable.

How To Determine If A Supply Is a Composite Supply

A supply of goods and services can be distinguished as a composite supply if it fulfills the following criteria:

• The supply involves two or more goods or services bundled up together.
• The supply is a natural bundle and is sold usually in the furtherance of business.
• The items involved in the supply cannot be sold separately.
• One of the items involved should be a principal item.

Examples of Composite And Mixed Supplies

Let’s discuss some more examples of mixed and composite supplies to understand the topic better.

Example A: Booking a train Ticket

While we book a train ticket, it includes a meal. The two commodities are bundled up for sale. It can be treated as a composite supply as one commodity cannot be sold without the other. Here, the principal item is the train ticket, which is a service, so the supply will be treated as a supply of service, and GST will be charged accordingly.

Example B: Free products with commodities

Most of the time, retailers provide offers with products, for example, bucket free with detergent. Here the products are bundled up for sale, but each product can be sold individually. So, it is a mixed supply. Here, the highest tax rate will apply to the whole supply.

GST on Import: Goods and Service Tax (GST) is a tax that is imposed on the supply of goods and services with the main aim to restrain the stumbling effect of indirect taxes like VAT(Value Added Tax).

Imports are the trade of goods and services in the country from a foreign country for the purpose of sale, utilization, processing, and even export.

According to Article 269A of the Constitution of India, the import of goods and services is an Inter-State trade process. Hence, IGST payment, where ‘I’ stands for Integrated, is mandatory for the suppliers from outside India to import goods and services as it is an interstate supply process.

The IGST Act falls under the Customs Act,1962, and Customs Tariff Act, 1975 which allows the collection of IGST on the import of goods and services from suppliers outside India.

Along with the IGST, Basic Customs Duty is also levied on imported goods and services. In the case of luxury items and demerit goods, GST Compensation Cess is applicable.

IGST and Compensation Cess Calculation

Under the IGST Act, Assessable value with addition to customs duty determines the value of goods to impose Integrated Tax. In case of calculation of Compensation Cess, Assessable value with addition to Basic Customs Duty only. Integrated Tax paid is not included in the calculation of Cess.

IGST and Compensation Cess are liable to include along with Safeguard Duty or Anti-Dumping Duty when the imported goods are liable to Safeguard Duty or Anti-Dumping Duty.

Let us consider an example to ease the process;

PARTICULARS	AMOUNT
Assessable Value	1000
Basic Custom Duty@25%	250
Education Cess@2%	5
Value for Integrated Tax	1255
Integrated Tax@15%	188.25
Value for Compensation Cess	1255
Compensation Cess @12%	150.6
Cost to Importer	1593.85

Input Tax Credit of IGST Paid

Input Tax Credit is allowed for importers for payment of IGST and Compensation. Although, Compensation Cess payment is only applicable for Compensation Cess now, according to the ITC rules. In the case of Input Tax Credit, Education Cess and Basic Custom Duty are not available.

Import as Baggage

IGST and Compensation Cess does not include Passenger Baggage. Under the Baggage Rules, 2016, 35% of Basic Customs Duty is applicable along with the reasonable Education Cess which is over Duty-free allowances.

Import of Goods by 100% EOU’s and SEZ’s

Under some conditions, EOU’s are exempted from Custom Duties, IGST, and Compensation Cess, and Duty-free import of goods are allowed. Although the IGST exemption was only available till 31st March 2018.

Under Section 3(7) of the Customs Tariff Act, 1975, an Integrated tax exemption is done for Goods imported by a unit or a developer in the Special Economic Zone for authorized operations. It is listed with vide notification No.64/2017- Customs dated 5th July 2017.

Import of Services

Import of Services should fulfill these conditions for the supply of service;

• When the supplier is located outside India.
• When the recipient is located in India.
• When the Location of supply service is in India.

For the imports to be considered as supply, there is no requirement of fulfilling the Business test. According to Section 25 of the CGST Act, import of services is considered as supply (even without any consideration), when the taxable person is related to the person or distinct from the person.

Determination of the Location of Supply

Section 13 of the IGST Act holds the following provisions related to the Determination of the location of supply;

S.NO	SITUATION	LOCATION OF SUPPLY
1	Default Rule other than specific situations mentioned below	Location of the recipient of services or  location of the supplier of services if available
2	Services supplied to be made physically available for goods which are required Services of the recipient or the person acting on his behalf with the supplier of services which require the physical presence	Location where the services are actually performed
3	Services from a remote location by way of electronic means provided	Location at the time of supply of services where the goods are situated
	Above provisions which are temporarily imported into India are not applicable for repairs and are exported after repairs	Above provisions which are temporarily imported into India are not applicable for repairs and are exported after repairs
4	For an immovable property services supplied directly	Place where the immovable property is located or intended to be located
5	Admission to, or organisation of an event	Place where the event is actually held
6	Above services provided in more than one state	India
7	Above Services provided in more than one state	Proportionate basis
8	Services supplied to account holders by a banking company, or a financial institution, or a non- banking financial company	Location of the supplier of the services
9	Intermediary services	Location of the supplier of the services
10	Services up to one month period consisting of hiring of means of transport, including yachts but excluding aircrafts and vessels	Location of the supplier of the services
11	Transportation of goods, way of mail or courier not included	Place of destination of such goods
12	Passenger transportation services	Place for a continuous journey where passenger embarks on the conveyance
13	Services provided on board a conveyance	Conveyance for the journey for first scheduled point of departure
14	Online information and database access or retrieval (OIDAR) services	Location of the recipient of the services

GST ITC Rules: What is the Input Tax Credit (ITC)? A tax credit means that a manufacturer was able to diminish while paying his tax on yield.

An input tax credit allows a producer to subtract the tax he paid on the input he bought as he pays the tax on his output. He will subtract or claim credit for the tax he settled on his inputs while paying the tax on his production.

At the end of the day, an input tax credit is a tax deducted from the output tax due on account of sales.

• SGST, UTGST, CGST and IGST
• People that are Eligible for the Input Tax Credit
• Persons that are not Eligible for the Input Tax Credit
• The Amount of Time You Have To Take ITC
• Prerequisites for Taking ITC
• No Input Tax Credit is Available for the Following Cases
• ITC Subject to the Composition Levy
• Itc On Items That Have Been Misplaced Robbed, Burned, Written Off, Or Given Away As Gifts Or Free Samples
• ITC on Products or Services Rendered by a Real Estate Developer
• In the Case of a Nonresident Taxable Person, an ITC is Available
• In the Case of Food and Drinks, Outdoor Catering, Health Care
• In the Event of willful Theft
• ITC in Respect of Inputs Sent for Job Work
• The Manner of Distribution of Credit
• The Following are the Postulates
• An Explanation is given For the Purposes of this Segment
• Subject to the Terms and Limitations that May be Imposed
• Provided, However, The Credit for Capital Goods Will Be Limited By The Percentage Points Specified
• Provided, However, The Capital Goods Credit Would Be Limited By The Percentage Points Specified

SGST, UTGST, CGST and IGST

The tax levied by the state government is known as the State Goods and Services Tax or SGST. Intrastate purchases of goods and services, i.e., sales made within a jurisdiction, are subject to the SGST.

On a product or service, SGST is paid in addition to and at the same rate as CGST.

All Indian governments impose this tax. Still, it has also been introduced by two Indian union territories of Puducherry and Delhi since each of these union territories has its legislature and council.

The Central Goods and Services Tax is a government-imposed indirect tax.

It is determined to the exchange of products and ventures embraced inside the state, i.e., intrastate. The assessment gathered under the head “CGST” is payable to the central government depository.

The CGST is levied to reimburse the government for previously levied indirect taxes, for example:

1. Central Excise Duty,
2. Service Tax,
3. Duties of Customs

The UTGST or Union Territory Goods and Services Tax (UTGST) is somewhat similar to the State Goods and Services Tax. The main distinction is that the tax collection is directed to the treasury for the government of the union territories where the goods or services were ultimately used.

UGST is additionally charged at the same rates as that of CGST. Be that as it may, among UTGST or SGST, just each, in turn, will be imposed along with CGST for each case.

The Central Government levies Integrated Goods and Service Tax on all interstate supplies of goods and services. CGST, SGST, and UTGST, on the other hand, are imposed on the provision of goods or services within a jurisdiction.

The IGST has brought uniformity to the taxation of goods and services produced outside of the state. This holds for both supplies made within the state and those made outside the country.

The IGST rate will still be roughly equal to the sum of the CGST and the SGST rates.

People that are Eligible for the Input Tax Credit

Section 18(1) of the CGST Act, 2017 lists the following individuals:

• An individual who was already in business prior to the implementation of GST and who is required to register under GST (Section 18(1)(a)).
• An individual who, notwithstanding the fact that registration is not mandatory, opts for voluntary registration [Section 18(1)(b)].
• An individual who stops paying tax under the composition scheme and switches to the standard scheme [Section 18(1)(c)].
• A person whose exempt supply becomes a taxable supply [Section 18(1)(d)].

Based on either of the following tax-paying records, every registered person shall be entitled to take credit for input tax paid on any supply of goods or services used by him/her that are used or expected to be used in the course or furtherance of his/her business:

• A tax invoice has been released.
• Notice of debit
• Bill of entry
• Invoice produced on a reverse charge basis.
• Input Service Distributor issues a document for credit delivery.

It’s critical to pay attention to the phrases “used by him/her” and “in his/her business.” These terms apply to the specific licensed taxable individual in question, not the whole legal body.

As a result, ITC charged in one state must not be related to a taxable person’s company in another state, even though the taxable person is the same.

Persons that are not Eligible for the Input Tax Credit

1. Individuals that are not GST-registered
2. Those who have signed up for the composition scheme

The Amount of Time You Have To Take ITC

Section 18(1) [Section 18(2)] specifies the period for claiming an Input Tax Credit (ITC).

Following a year from the date of issue of the tax invoice relating to such supply, a registered individual is not entitled to take input tax credit under section 18(1) for any supply of goods or services or both to him.

Prerequisites for Taking ITC

1. At the time of credit, a licensed taxpayer must have a tax invoice on file.
2. The goods or services must have been received,
3. Within 180 days of the invoice date, the customer must have charged the invoice’s amount, as well as the tax, to the seller of products or services, or both.
4. The seller would have paid the tax received via tax invoice and deposited it into the government’s account.
5. The tax invoice information must also have been uploaded in the GST return by the seller.
6. A bill of entry is a paper that may be used to obtain credit while buying goods. The invoice of entry may also have an IGST-paid challan for the shipment.
7. In-service importation, the invoice, and IGST payment through table 3.1 of GSTR-3B form the basis for granting credit.
8. A credit note is a piece of paper that allows a supplier to offset his tax burden. To reverse an already taken ITC, the retailer must copy the credit note to the buyer.
9. A debit notice (also known as a supplemental invoice) is a statement that allows the buyer to claim ITC.
10. A tax invoice on which credit has been granted must be forwarded to the area where the products or services are provided.

No Input Tax Credit is Available for the Following Cases

The following elements are not qualified for ITC under section 17 (5):

GST Prohibits The Use Of Motor Cars And Other Conveyance

The ITC on motor vehicles charged would not be offset against the GST Law’s output tax obligation. In other words, you can’t get credit for your car or different mode of transportation.

Club, Health, And Wellness Centre Membership

The ITC credit will not be allowed if you have paid for a gym card, yoga lessons, or membership in a club for some sport or other activity.

Travel Opportunities Such as Leave or Home Travel Concessions for Employees

If you have booked any travel packages, you will not claim ITC on the payment of the travel package.

However, if you book a travel package for business purposes, ITC would be allowed.

Goods, Services, or a Combination of the Two that are used for Personal Use

The ITC is not eligible whether the products or facilities are used for personal use. ITC is only available where tax is charged or charged on the external delivery of goods or services, according to the law’s simple reasoning.

When contract services are provided for building a movable house

This is perhaps the most contentious aspect of ITC. Job contract providers have long been a source of contention for taxpayers and the IRS. However, the works contract issue has been settled to some degree under GST.

ITC Subject to the Composition Levy

The ITC is not applicable on products or services on which the composition dealer has paid duty.

Itc On Items That Have Been Misplaced Robbed, Burned, Written Off, Or Given Away As Gifts Or Free Samples

If the items are missing, broken, or damaged, or if they are given out as free samples, ITC would not be usable.

ITC on Products or Services Rendered by a Real Estate Developer

Goods or services (other than plant or machinery) received by a taxable individual for the building of an immovable property (other than plant or machinery) on his own account, even where those goods or services (or both) are used in the course or furtherance of operation do not have ITC.

In the Case of a Nonresident Taxable Person, an ITC is Available

ITC would not be eligible if the nonresident taxing individual purchases any products or services. If an NRTP buys any products or services, however, he will be responsible for the ITC.

Besides, the IGST Act applies to imports and exports.

In the Case of Food and Drinks, Outdoor Catering, Health Care

Food and drinks, outdoor catering, beauty treatments, dental care, and cosmetic and plastic surgery would not be eligible for the input tax credit.

However, the input tax credit is applicable whether a licensed citizen requires an internal supply of products, services, or both to make an external taxable supply of the same type of goods, services, or both, or as part of a taxable combination or blended supply.

In the Event of willful Theft

In the event of theft, the input tax credit would not be eligible.

Reversal of Input Tax Credit

Reversal of Credit under GST has the same purpose as it does under the current tax system. In layman’s terms, reversal of credit refers to the reversal of a previously taken credit.

Reversal of credit refers to credit taken out and used when the final product is taxable but is only reversed as the final product becomes excluded.

ITC for GST paid on Reverse Charge

On the tax balance charged under reverse charge on goods and services, the service purchaser will claim Input Tax Credit. The only GST ITC rule is that the goods and services be used or used to benefit the business or organization.

If the composite distributor is subject to the reverse charge mechanism, he or she would be ineligible to receive any tax credit.

The tax would be collected at the ordinary rates, not the composition rates.

ITC on Capital Goods and Reversal on its Sale

It is possible to make it advantageous; tax credit for capital goods can be paid with one payment.

If the individual has asserted depreciation under the income tax act for the GST portion, an input tax credit for the tax component of capital goods is not permitted. In other terms, an individual may demand depreciation on the tax portion or take a GST input tax credit on capital goods.

If a taxable person buys capital goods on which an ITC was claimed, the taxable person is entitled to pay GST at a higher rate from the following sources:

• I took on those capital products at a discount of 5% every quarter or half of a year from the invoice period.
• GST rate multiplied by the selling price of capital goods

When refractory bricks, molds and dies, jigs and fixtures are sold as waste, the taxable individual may be required to pay tax on the transaction value of the product.

ITC in Respect of Inputs Sent for Job Work

The ITC provisions for inputs and capital goods sent for Job Work are specified in Section 19 of the CGST Act, 2017. On inputs or capital goods sent to a job worker, the principal or the registered individual may say ITC.

Furthermore, if those inputs or capital items are sent to the job worker for job work without first being taken to the principal’s place of business, the principal will claim ITC.

As a result, in Form GST ITC-04, a principal must disclose the specifics of the goods shipped or obtained from a job working within a particular quarter.

The Manner of Distribution of Credit

The Manner distribution of credit by Input Service Distributors is governed by Section 20 of the Central Goods and Services Tax Act 2017.

The Following are the Postulates

The Input Service Distributor shall administer the central tax credit as central tax or integrated tax, and the integrated tax credit as integrated tax or central tax, by issuing a paper containing the amount of input tax credit being allocated in the Manner specified.

The credit can be distributed by the Input Service Distributor if the following conditions are met:

• Credit will be issued to credit recipients in exchange for a certificate containing the required information.
• The credit sum circulated does not surpass the credit amount eligible for distribution;
• The tax credit for input resources attributable to a credit receiver must be distributed exclusively to that recipient;
• The tax credit for input services attributed to more than one recipient of credit shall be divided among those recipients to whom the input service is attributed, and such allocation shall be pro-rata dependent on such recipient’s turnover in a State or turnover in Union territory during the relevant period compared to the sum of all such recipients to whom such input service is attributable and who are active in the current year during the said relevant period;
• The tax credit for input services charged attributable to all recipients of credit will be divided among them. Such allocation will be pro-rata dependent on the recipient’s turnover in a State or turnover in Union territories during the particular period according to all recipients’ turnover and operational in the same year during the relevant period.

An Explanation is given For the Purposes of this Segment

The “relevant period” will be as follows:

• the financial year before the year in which credit is to be issued, whether the beneficiaries of credit had a turnover in their States or Union territories in the previous financial year; or
• where any or more credit recipients have no turnover in their States or Union territories in the financial year prior to the year in which the credit is to be issued, the last quarter during which reports of all recipients’ turnover are available prior to the month in which credit is to be distributed;
• The term “recipient of credit” refers to a seller of products or services, or both, with the same Permanent Account Number as the Input Service Distributor.
• “turnover” refers to the value of turnover, less any duty or tax imposed under entry 84 of List I of the Seventh Schedule to the Constitution and entries 51 and 54 of List II of the same Schedule, for any registered individual dealing with the supply of goods involving tax payment as well as goods not taxable under this Act.
• ITC in special cases
• The ITC in special cases is dealt with in Section 18 of the CGST Act.

Subject to the Terms and Limitations that May be Imposed

1. an individual who applies for registration under this Act within thirty days of being liable to registration and is granted registration is entitled to an input tax credit for inputs kept in stock and inputs found in semi-finished or finished products held in stock on the day exactly before the date on which he becomes liable to pay;
2. An individual who obtains registration under section 25(3) is entitled to claim an input tax credit for inputs kept in stock and inputs found in semi-finished or finished products held in stock on the day immediately preceding the date of registration;
3. On the day immediately preceding the day on which he becomes eligible to pay tax under section 9, any enrolled individual who ceases to pay tax under section 10 is entitled to take credit for input tax paid on inputs kept in stock, inputs found in semi-finished or finished products held in stock, and on capital goods

Provided, However, The Credit for Capital Goods Will Be Limited By The Percentage Points Specified

When a registered person’s exempt supply of products or services, or both, becomes a taxable supply, the registered person is entitled to input tax credit on inputs kept in stock and inputs found in semi-finished or finished goods held in stock that are related to the exempt supply, as well as on capital goods exclusively used for such exempt supply on the day immediately preceding the date when supply becomes taxable:

xProvided, However, The Capital Goods Credit Would Be Limited By The Percentage Points Specified

After one year from the date of issue of the tax invoice relating to such supply, a registered individual is not entitled to take input tax credit under subsection regarding any supply of goods or services or both to him.

Where a registered person’s constitution changes as a result of a sale, takeover, demerger, amalgamation, lease, or conversion of the company with particular arrangements for liability transfer, in such a manner as may be prescribed, the said registered entity may pass the input tax credit that remains unused in his electronic credit ledger to such sold, combined, demerged, amalgamated, rented, or transferred company.

The registered individual shall pay a sum equal to the input tax credit taken on the said capital goods or plant and machinery, decreased by such percentage points as may be required, or the tax on the transaction value of such capital goods or plant and machinery calculated under section 15, whichever is greater.

The taxable individual may pay tax on the transaction value of certain products calculated under section 15 if refractory bricks, moulds, and dies, jigs and fixtures are supplied as scrap.

How To Correct GSTR 3B After Filing: GST refers to Goods and Services Tax charged on products sold for domestic consumption. Introduced by the Constitution Act in 2016, GST is a value-added tax, which will convert the country into one unified market. Taxpayers should file GSTR-3B every month till the 20th of the next month. GST return is a document that encompasses all the details of tax paid on purchases and sales. After filing the GST return, one becomes legally responsible to pay taxes on the income through business transactions.

Though there is less scope for mistakes, still the chances of error while calculating purchases, sales, input, and output taxes are common. Sometimes the taxpayer might miss considering the sale or some purchase. After the due date of filing returns for the next financial year, one cannot rectify the error in GSTR-3B. Check out each and every possible mistake and acknowledge how to correct GSTR-3B after filing.

Common Errors Found on GST Portal

• Error in Validation After Submission of Amendment of Non-Core Application: This error shows the mistake in the provided basic information of the taxpayer. At the time of migrating, the portal permitted only the name of the PAN holder. Now, it is confirming the other data also, which involves address and date of birth. When this error is displayed, one should verify the entire data.
• There is No Summary to Submit GSTR-1: When any invoice details under GSTR-1 have not mentioned then this error occurs. According to GST rules, taxpayers should add at least one line item with a null value. By putting in zero in all the fields, the system will not show any error and will let people file the return.
• Processing Error: While requesting transitional credit of the returns in TRAN-I form, portals show this error. While saving the details of the existing registration in TRAN-I does not come out to be the same as mentioned in the Registration or Enrolment application, then this error is displayed.
• System Error: While submitting TRAN-I through EVC, people can find system errors. This issue can be resolved by using GSTIN and DSC mode of filing while the EVC.
• Invalid GSTIN: When the customer’s GSTIN entered is wrong then this error occurs. It can be resolved by checking the correct GSTIN on the government website and entering it.
• Earlier Date Is Not Allowed for Invoice: When the date mentioned in the invoice is previous to the GST registration date, then this error occurs. The invoices should be transferred to the B2C section and the GSTIN numbers of customers should be deleted to resolve this error. It would be beneficial to recalculate the B2C summary and reupload it to the government portal.

What Issues Can Arise in GSTR-3B? How to Resolve Them?

GSTR-3B is the first Return Form presented after the implementation of GST. Introduced by CBEC, every registered taxpayer has to file this return form. It should involve a summary of information about the available input tax credit, sale and purchase, tax paid, and tax payable. There are numerous doubts raised about the mistakes while filing the GSTR-3B return. Many taxpayers want to know how to correct GSTR-3B after filing and the possible consequences due to errors made.

The situation I: Forget to include some of sales and purchase

If any person wants to amend the GSTR-3B, they can do it by filing the GSTR 1 or 2 return for the same month. For instance, if sales have been excess reported or less reported while filing GSTR-3B return, it can be corrected by filing return for outward supplies (GSTR-1). If any error occurs while providing claiming the eligible Input Tax Credit in GSTR-3B, it can be corrected while filing a return for inward details (GSTR-2).

It is not possible to revise GSTR-3B. The only option is to include them in GSTR-3B of the month in which one remembers it. However, it cannot be involved when the time period passes.

Situation II: Instead of CGST and SGST, payment of IGST is made

The cash balance of IGST payment cannot get adjusted against that for SGST and CGST. The only possible solution to resolve this problem is to claim the paid IGST refund later. However, the liability of CGST and SGST is to be paid in cash.

Situation III: Wrongly Filed Inward Details Under Reverse Charge Column and Return is Submitted

One might think of paying additional tax liability raised due to filing inward details wrongly under the reverse charge column. However, there is no need to pay any additional tax amount and know-how to correct GSTR-3B after filing. It is possible to correct the details in GSTR 1 and 2 return. After correcting these details, the additional tax liability shall be abandoned and updated automatically.

Situation IV: Forget to Claim or Claimed Less ITC in GSTR-3B

If a taxpayer forgets to claim ITC, then they can update all the details in GSTR 2. The additional ITC can be accredited to the electronic credit register after the submission of GSTR 2 and 3.

Situation V: Output Tax Becomes Less Than What Already Paid

The additional tax paid can be adjusted with the next month’s liability if the total GST liability of the registered taxpayer is less than the output tax liability stated in GSTR-3B.

Situation VI: Tax is Under Paid in GSTR-3B and Additional Tax Liability Arise After Changing GSTR-3B Details

The GST Portal will show the additional tax liability after changing the details of GSTR-3B through GSTR-1 and GSTR-2. This additional tax can be paid through an electronic cash record along with the late interest. If in case the total input tax credit claimed is wrong or less than what is claimed then it should be added to the output liability and can be paid by cash ledger.

Situation VII: Taxpayer Has Not Filed The GSTR-3B

If anyone has not filed the GSTR-3B then they can file GSTR 1, 2, and 3. After that, they can submit the form before the mentioned due dates. Once filed GSTR 1, 2, and 3 successfully along with taxes are paid, then there is no need to file the GSTR-3B.

Situation VIII: Payment for Submitted GSTR-3B Has Not Been Done

If a taxpayer has submitted the GSTR but payment is still pending then they can update and file accurate details in GSTR 1, 2, and 3.  After that, they should submit the form and then pay taxes. If late interest is imposed one should pay the same along with tax.

Is It Possible to Reset GSTR-3B?

GSTR-3B is a summary return of the total inward supplies and total outward supplies made during the month. Every business dealer registered under the GST regular scheme should file a GSTR-3B return. One should file a NIL GST return if there are no business transactions. There are no options to revise GSTR-3B; however, taxpayers can reset it.

‘Rest GSTR-3B’ announced by the GST Council enables taxpayers to change the status of submitted to ‘Yet to be Filed’. It allows the taxpayer to edit the filed details in the return. Moreover, one can use the choice to reset GSTR-3B only once. Following are the steps to Reset GSTR-3B:

• Log in at GST Portal
• Go to tab ‘Services’ and click on ‘Returns’. Now, visit Returns Dashboard
• Choose the Financial Year and Filing Period. Under Monthly Return GSTR-3B, click on the option ‘Prepare Online’
• Reset Activated GSTR-3B option
• A warning message will appear on the screen, which involves an e-liability ledger will get deleted and Input Tax Credit will get reversed.
• Success Message that shows that reset is successful will appear and the return status changes to ‘Yet to be filed’.
• After making desired changes, a taxpayer should submit it again.

Conclusion

Once filed, GSTR 1 and GSTR-3B cannot revise and there is no concept of return revision in GST. However, any mistakes that occurred can be handled carefully by referring to the points mentioned above.

Partnership Act 1932: A partnership firm is formed when two or more people join forces as partners. The Indian Partnership Act, 1932 governs this partnership firm’s laws and regulations Also, the Indian Contract Act governs the partnership in locations where the Partnership Act, 1932 is absent. In this article, let’s understand the Partnership Act 1932, its definition, scope, and different types of partnerships.

• Definition of Partnership Act
• What is Partnership Act, 1962?
• Partnership Act Important Points
• Types of Partnerships
• Number of Partners in a Partnership
• Types of Partners in Partnership Firm
• Partnership Deeds
• FAQ’s on Partnership Act

Definition of Partnership Act

The Indian Partnership Act, Section 4, defines a partnership as:

Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all

What is Partnership Act, 1962?

A partnership firm is formed when two or more persons join forces to run a business with the goal of making money and sharing it. The partners pool their financial resources and work together to run the company. A partnership must be created for the purpose of carrying on a lawful business, according to Section 12 of the Indian Partnership Act. Property co-ownership is not considered a partnership.

Partnership Act Important Points

The important points of the Partnership Act are explained below:

• To carry on the partnership firm’s business, the partners must come to an agreement.
• The goal of forming a partnership should be to make money and share it with the other partners. Unless otherwise indicated, profit and loss distribution might be based on the capital contribution percentage of each partner or distributed equally among all partners.
• The partnership agreement must specify that the business will be run jointly by all of them or by some of them acting on behalf of all of them. The mutual agency exists between the partners, according to Section 13 of the Partnership Act of 1932.
• In a partnership, each partner serves as both a principal and an agent for the other partners. A partner’s activities have a binding effect on the actions of all other partners.
• Unlimited Liability- The partners might be held jointly accountable for the firm’s debts. They have unlimited accountability for the firm’s obligations, which extends to their personal assets.

Types of Partnerships

On the basis of partnership terms and business scope, there are two types of partnerships.

1. Partnership on the Basis of Duration
   • Partnership at Will: A partnership at will has no set time limit for its expiration.
   • Partnership for a Fixed Period: The partners agree on a period of time for the partnership to last, after which it will end.
2. Partnership Based on the Size of the Company
   • Particular Partnership: When a partnership is formed for the purpose of completing a specific project, it expires after the project is completed.
   • General Partnership: When a partnership is created for the firm’s regular operations rather than for a specific project, it is referred to as a general partnership.

Number of Partners in a Partnership

• According to the Indian Partnership Act, the maximum number of participants in a partnership is unlimited, although a minimum of two partners is required.
• According to the Companies Act of 2013, the maximum number of participants in a partnership cannot exceed 100.
• According to Section 464 of the Companies Act, 2013, a partnership with more than 100 members is considered an illegal association.

However, the maximum number of partners for banking purposes is ten, while the maximum number of partners for other reasons is ten, according to Section 11 of the Companies Act.

Types of Partners in Partnership Firm

In a partnership firm, there are essentially six types of partners.

• Active/Managing Partner: Takes an active role in the firm’s day-to-day activities.
• Sleeping/Dormant Partner: Does not participate in the day-to-day activities of the firm but is bound by the other partners’ actions.
• Nominal Partner: Has no financial interest in the firm and is merely a partner in the name.
• Partner in profit only: He/She shares only the firm’s gains and not the losses. Any third-party liabilities are not the responsibility of such a partner.
• Minor Partner: According to the Indian Contract Act, a minor cannot be a partner in a partnership firm, but he can be entitled to the firm’s benefits with the approval of the other partners. The minor partner shares in the firm’s profits equally, but has limited accountability for the firm’s losses.
• Partner by Estoppel: A person who is not a partner of the firm but represents himself to be one to another person through his words or conduct is referred to as a partner by estoppel. Even if he is not a partner, such a person cannot deny being one afterwards.

Partnership Deeds

A partnership’s foundation is the partnership agreement. It is the basis that establishes a legal relationship between the partners in order to carry out the partnership firm’s operations. A partnership agreement can be written or oral, but it is referred to as a partnership deed when it is written. The following are some of the details contained in a partnership deed.

• The partnership firm’s name and address, as well as the business’s
• All partners’ names and addresses
• Partners’ rights, responsibilities, and obligations
• Ratio of profit and loss sharing
• Each partner makes a financial contribution.
• Interest rates on capital, loans, and drawings
• Accounts are settled in the event of the firm’s dissolution.
• In the event of a disagreement between partners, how do you resolve it?
• Partners’ salaries and commissions are due.
• Rules to follow in the event of a new partner’s admission, retirement, or death of an existing partner
• Any other provisions impacting the partners’ rights

FAQ’s on Partnership Act

Question 1.
What are the rights of partnership?

Answer:
For the business, partners share planning, decision-making, operation, and management rights and duties. This right can also be waived by partners. During the decision-making process, partners have the right to provide input and propose ideas, and these ideas can be considered by the group.

Question 2.
Why is a HUF not considered as a partnership?

Answer:
A contract/agreement for a partnership is one of the most crucial aspects of a partnership. A voluntary and contractual agreement between partners is required. A HUF is formed from statues, and all of its members are born into the organisation. As a result, these individuals cannot be considered partners under the law, therefore the HUF is not a partnership.

Question 3.
Sharing of Profit is the truest test of a partnership. True or False?

Answer:
This is a false statement. The existence of a Mutual Agency is the truest test of a partnership. There are additional situations in which profit is shared but there is no partnership. However, if there is an agency between the persons that manage a business jointly and split earnings, it will be considered a partnership.

List of Exempted Services under GST: On May 19th, 2017, the GST council meeting decided the list of exempted services under GST. The GST rates were also agreed upon. Five GST rate categories for goods and services at 0%, 5%, 12%, 18%, and 28% were approved by the council.

List of Services Exempted Under GST

1. Services provided by the local authority or the Government excludes the following services—
   • Services are provided by the Department of Posts through express parcel post, speed post, life insurance, and agency services provided to any person other than the Government.
   • Services concerning an aircraft or a vessel, inside or outside the precincts of a port or an airport.
   • Transportation of passengers or transportation of goods
   • Services other than the services which are covered under clauses (i) to (iii) above are provided to business entities.
2. Services which the RBI provides
3. Services provided by a foreign diplomatic mission located in India
4. Services related to the growth of plants and breeding of every life form of animals, except the breeding of horses, for food, fiber, fuel, raw material, or other similar products or agricultural produced using —
   • Agricultural operations are directly related to the production of any agricultural produce, including cultivation, harvesting, threshing, plant protection or testing or
   • Supply of labour for farms
   • Processes that are carried out at an agricultural farm includes tending, cutting, harvesting, drying, pruning, cleaning, trimming, sun drying, fumigating, curing, sorting, grading, cooling or bulk packaging, and such like operations that do not change the essential characteristics of the agricultural production but make it sellable for the primary market;
   • Leasing or renting agro machinery or vacuous land with or without a structure incidental for its utilisation;
   • Packing, unloading, loading, warehousing, and storage of agricultural production;
   • Services for agricultural extension;
   • Services by any Agricultural Production Marketing Committee or the services provided by a commission agent to purchase or sell agricultural production;
5. Service using access to a bridge or a road on the clearance of the custom prices.
6. By an electricity distribution utility, the distribution of electricity.
7. Services using renting of residential dwelling for use as an abode.
8. Services using:
   • Extending of deposits, advances, or loans in so far as the consideration is represented by way of discount or interest (other than interest involved in credit card services)
   • Inter sale or inter purchase of foreign currency amongst banks or authorised dealers of foreign exchange.
9. Services using transportation of goods:
   • Services by road except:
     • An agency for transportation of goods or,
     • A courier agency.
   • Services by the inland canal.
10. Services that are provided to the United Nations or a stated international organisation.
    The exemption may be notified by issuing notification under section 55 of the Act of SGST/CGST.
11. Services which are provided by the workers of the Common Bio-medical Waste Treatment Facility or CBWTF to a clinical establishment by way of treatment or disposal of bio-medical waste or the processes incidental to that;
12. Services by a veterinary clinic about the health care of birds or animals.
13. Services provided by an organisation registered under section 12AA of the Income-tax Act, 1961 (43 of 1961) by charitable activities.
14. Services provided by a stated organisation regarding a religious pilgrimage aided by the Ministry of External Affairs (India), under the respective preparations;
15. Services that are provided by-
    • An arbitration council to–
      • Any individual other than a business organisation; or
      • A business organisation with a turnover up to rupees twenty lakh (ten lakh rupees in a particular category state) in the preceding financial year;
    • An individual advocate or partnership firms of advocates apart from a senior advocate, using legal services to-
      • An individual advocate or a firm of advocates providing legal services;
      • Any person other than a business organisation; or
      • A business organisation with a turnover up to rupees twenty lakh (ten lakh rupees in a particular categorised state) in the prior fiscal year; or
    • A senior advocate using legal services to-
      • Any person other than a business e; or
      • A business organisation with a turnover up to rupees twenty lakh (ten lakh rupees in a unique category state) in the prior fiscal year.
16. Services provided-
    • By an educational institution to its staff members, faculty members, and students;
    • To an educational institution, using-
      • Transportation of students, staff, and faculty;
      • Catering, comprising any system of mid-day meals, is Government-sponsored;
      • Security or house-keeping services performed in such educational institution;
      • Services relating to admission to or examination by such institution;

Provided that nothing included in clause (b) of this entry shall be implemented to an educational institution other than an organisation providing services using pre-school education and education up to higher secondary school.

17. Services provided by the IIM or Indian Institutes of Management, according to the guidelines of the Central Government, to their students, using the following educational programs, except Executive Development Programme, –
    • Full-time residential Post Graduate Programmes in Management for the Post Graduate Diploma in Management for two years, to which admissions are made based on (CAT) Common Admission Test, conducted by Indian Institute of Management;
    • Fellow Program in Management;
    • In Management, a five-year integrated program

18. Services provided to an acknowledged sports organisation by-
    • An individual as a player, umpire, team manager, coach, or referee for participation in a sporting event organised by a recognised sports organization;
    • Another recognised sports organisation;

19. Services provided by an artist using performance in the art forms of classical or folk
    • music, or
    • theatre, or
    • dance, if the percentage charged for such performance is not above rupees one lakh and fifty thousand:

Given that, an exemption will not be applied to the services that are provided by artists who are the brand ambassadors;

20. Services by way of collecting news or providing news by the United News of India or Press Trust of India or an independent journalist;
21. Services using giving on rent–
    • To a state road transport undertaking, a motor vehicle which is meant to carry above twelve tourists; or
    • To a goods transportation agency, a method of goods transportation
22. Transportation of tourists, with or without attended belongings, by:
    • Air, boarding from or stopping in an airport located in the state of Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, or at Bagdogra or Tripura;
    • Non-airconditioned carriage other than radio taxi, for transportation of passengers, excluding tourism, conducted tour, a charter; or
    • Stage carriage rather than an air-conditioned stage carriage.

23. Services of life insurance business provided using annuity under the National Pension Scheme regulated by PFRDA also known as Pension Fund Regulatory and Development Authority of India under the Act of Pension Fund Regulatory And Development Authority, 2013
24. Services of life insurance business provided by the Naval, Air Force Group Insurance Funds and Army, to the Navy, Air Force, and Army, respectively, under the Central Governments Scheme of Group Insurance.
25. Services that are provided by an incubatee up to an overall turnover of rupees fifty lakh in a fiscal year subject to the following conditions, namely:-
    • The overall turnover had not surpassed fifty lakh rupees during the prior fiscal year; and
    • three years has not been passed from the date of agreeing on an incubate
26. Service by an unincorporated organisation or a non-profit entity registered under any law for the time being in force, to its members by way of recompensation or share of benefaction–
    • As a union of trade;
    • For the provision of carrying out of any activity which is exempted from the duty of GST; or
    • Up to the amount of five thousand rupees per month each member for collecting of goods or services for everyday use from a third person
27. Services that an organiser provides to an individual in respect of a business exhibit held outside India;
28. Services using animal slaughtering;
29. Services received from a service provider located in non-taxable territory by –
    • Government, a local authority, governmental authority or an individual about any purpose other than industry, commerce or any other profession or business;
    • An organisation registered under section 12AA of the Income-tax Act, 1961 (43 of 1961) to provide generous actions; or
    • An individual located in a non-taxable region; Given that the exemption will not be applied to the–
      • Database access or retrieval services and online information received by people specified in clause (a) or (b); or
      • Services using transport of goods using a vessel from a place outside of India till customs duty of consent in India received by people designated in the (c) clause;
30. Services of public libraries using publications, lending of books, magazines, or any other knowledge-enhancing material or content or item;
31. Services provided by the Employees’ State Insurance Corporation to people governed under the Act of Employees’ Insurance, 1948;
32. Services using transfer of a going concern, as an independent part of a whole part;
33. Services using public conveniences such as the provision of facilities of bathroom, washrooms, lavatories, urinal or toilets;
34. Services by Government, local authority, or a governmental authority using any activity about any gathering entrusted to a municipality under the 243 W Article of the Constitution of India.
35. Services that the Reserve Bank of India receives from outside India about foreign exchange reserves management;
36. Services provided to a foreign tourist by a tour operator about a wholly outside India tour.
37. Services using pre-conditioning, pre-cooling, ripening, waxing, retail packing, labelling of vegetables and fruits which do not alter the necessary characteristics of the said vegetables or fruits;
38. Services using admission to a museum, national park, wildlife sanctuary, tiger reserve, or zoo;
39. Services provided by the Government or a local authority to a business organisation with an overall turnover up to rupees twenty lakh (ten lakh rupees in a particular category state) in the prior fiscal year.

Explanation – For this entry, at this moment, it is clarified that the provisions of this entry should not apply to

• Services at S. No. 1 (i), (ii)and (iii); and
• Services using renting or leasing of immovable or fixed property;

40. Services provided by the Employees Provident Fund Organisation (EPFO) to people governed under the Act of Employees Provident Funds and Miscellaneous Provisions Act, 1952;
41. Services provided by the Insurance Regulatory and Development Authority of India (IRDA) to insurers under the Act of Insurance Regulatory and Development Authority of India, 1999;
42. Services provided by SEBI or Securities and Exchange Board of India set up under the Act of Securities and Exchange Board of India, 1992 by way of protecting the interests of investors in securities and encouraging the growth and development of security market;
43. Services provided by NCCD or National Centre for Cold Chain Development under the Ministry of Agriculture (India), Cooperation and Farmer’s Welfare using cold chain knowledge dissipation;
44. Services using transportation of goods by an aircraft from a place outside India up to the customs station of clearance in India.
45. Services provided by a local authority or the Government to another local authority or Government:

Given that nothing contained in this entry shall apply to services at S. No. 1 (i), (ii)and (iii) above

46. Services are provided by the Government or a local authority by issuing a driving license, death certificate, birth certificate, visa, passport.
47. Services provided by a local authority or the Government using enduring b non-performance of a contract for which b compensation in the form of penalties or liquidated damages is payable to the local authority or the Government following such agreement;
48. Services provided by the local authority or the Government using-
    • registration needed under any law for the moment in force;
    • testing, safety check, calibration, or certification correlating to the safety of consumers, workers, or the public at large, including fire license, required under any law for the time being in force;
49. Services provided by the Government or a local authority using responsibility of the right to use natural resources provided to a farmer for the growth of plants and breeding of every life form of animals, except the breeding of horses, for food, fuel, fiber, raw material or other related items;
50. Services by a local authority, or the Government or a governmental authority using any activity about any gathering entrusted to a Panchayat under article 243G of the Constitution:

it will be continued by way of notification under section 7(2) (b) of CGST/SGST Acts.

51. Services provided by the Government or a local authority by way of assignment of the right to use any natural resource where the Government or the local authority assigned such right to use before April 1st, 2016:

Given that the exemption will be applied only to service tax payable on one time charge payable, in total upfront or installments, for assignment of the right to use such natural resource;

52. Services provided by a local authority or the Government using allowing a business organisation to work as a telecom service provider or use radio frequency spectrum during the period before April 1st, 2016, on payment of license fee or spectrum user charges, as the case may be;
53. Services provided by the Government by way of deputing officers after office hours or on holidays for inspection or container stuffing or other duties to import export cargo on MOT, also known as Merchant Overtime charges.
54. Services by a procuring bank to any person about the settlement of rupees two thousand in a one-time transaction transacted through credit card, debit card, charge card, or other payment card service.

Explanation — For this entry, “procuring bank” means any financial institution, banking company, including a non-banking commercial company or any other individual, who makes the payment to another individual who accepts such cards.

55. Services of leasing or renting assets (rolling stock assets including locos, wagons, coaches) by Indian Railways Finance Corporation (IRFC) to the Indian Railways.
56. Services provided by any individual for official use of a foreign diplomatic mission or consular post in India or personal use or for the members of the family of diplomatic agents or career consular officers posted there. This exemption is available on a reciprocal based on a certificate which is issued by MEA (Protocol Division): this will be continued using notification under section 55 of the Act of CGST/SGST.
57. Taxable services, which are provided or will be provided, by TBI or Technology Business Incubator or STEP or Science and Technology Entrepreneurship Park, which is recognised by the NSTEDB of the Department of Technology and Science, India or bio-incubators which are recognised by the BIRAC, under the Department of Biotechnology, India;
58. Taxable service provided by the State Government Industrial Development Corporations to the industrial unit. Using granting extended duration lease (thirty years, or more) the industrial plots from so much of tax leviable, as is leviable on the single upfront amount known as premium, price, cost, salami, or any other name due before-mentioned lease.
59. Services provided to the Government using transportation of passengers with or without attended belongings, by air, boarding from or terminating at a provincial connectivity system airport, against contemplation in the form of VGF or viability gap funding.

Given that nothing contained in this entry will be applied on or after the expiry of a period of a year from the date of commencement of operations of the provincial connectivity system airport as notified by the Ministry of Civil Aviation

60. Services that are provided by cord blood banks using preservation of stem cells or any other service about such conservation;
61. Services using coaching or training in recreational activities relating to,-
    • Culture or arts; or
    • Sports by a charitable organisation registered under section 12AA by the Act of Income-tax, 1961;
62. Any services that are provided by-
    • The National Skill Development Corporation, also known as NSDC, which n Government the Government of India sets up;
    • A Sector Skill Council is also known as SSC, which the NSDC approves;
    • An assessment agency which the SSC or NSDC approves;
    • A training partner who the NSDC or SSC approves;
      • The National Skill Development Corporation implemented the National Skill Development Programme; or
      • The National Skill Certification and Monetary Reward Scheme started a vocational skill development course; or
      • The National Skill Development Corporation implemented many other schemes.
    • Services provided by the assessing bodies empanelled centrally by the Directorate General of Training, Ministry of Skill Development and Entrepreneurship using assessments under SDI or Skill Development Initiative.
    • Services that are provided by the training providers under Deen Dayal Upadhyaya Grameen Kaushalya Yojana, under the Ministry of Rural Development, offer vocational or skill training courses certified by the National Council for Vocational Training.
    • Services using sponsorship of sporting events organised-
      • By a national sports organisation, or its affiliated federations, where the participating teams or individuals represent any state, district, country, or zone;
      • By Paralympic Committee of India or Special Olympics Bharat,
      • Association of Indian Universities, Games Federation of India, All India Sports Council for the Deaf, Inter-University Sports Board School.
      • By Sports Board and Central Civil Services Cultural;
      • Under the Panchayat Yuva Kreeda Aur Khel Abhiyaan (PYKKA) Scheme; or
      • As part of national games, by Indian Olympic Association.

66. Services provided using actual labour contracts of construction, commissioning, erection, installation, alteration, fitting out, repair, maintenance, renovation, or completion of a civil structure or any other original works about the beneficiary-led individual house enhancement or construction under the Pradhan Mantri Awas Yojana (PMAY);
67. Services using pure labour contracts of construction, erection, commissioning, or installation of original works of a single residential unit otherwise a part of a residential complex;
68. Services of general insurance business that are provided under the following schemes –
    • Scheme for Hut Insurance; and
    • Scheme for Cattle Insurance under Swarnajaynti Gram Swarozgar Yojna; and
    • Scheme for the Tribal Insurance; and
    • Gramin Accident Policy and Janata Personal Accident Policy; and
    • For Self-Employed Women, Group Personal Accident Policy; and
    • Weather Based Crop Insurance Scheme or the Modified National Agricultural Insurance Scheme, implemented by the Ministry of Agriculture and approved by the Government of India; and
    • Premia collected on export credit insurance; and
    • Agricultural Pump set and Failed Well Insurance; and
    • Pilot Scheme on Seed Crop Insurance; and
    • Pradhan Mantri Suraksha Bima Yojna; and
    • Jan Arogya Bima Policy; and
    • Central Sector Scheme on Cattle Insurance; and
    • Niramaya Health Insurance Scheme constituted under the provisions of the National Trust for the Welfare of People with Mental Retardation, and, Cerebral Palsy, and, Trust implements autism, and, Multiple Disabilities Act, 1999; and
    • Rashtriya Swasthya Bima Yojana; and
    • Coconut Palm Insurance Scheme; and
    • National Agricultural Insurance Scheme (Rashtriya Krishi Bima Yojana); and
    • Universal Health Insurance Scheme; or
    • Any other insurance scheme by the State Government may be notified by the Indian Government by the GSTC recommendation.
69. Services by life insurance business provided under following schemes –
    • Varishtha Pension BimaYojana; and
    • Aam Aadmi Bima Yojana (AABY); and
    • Jayashree Bima Yojana (JBY); and
    • Life micro-insurance product as approved by the Insurance Regulatory and Development Authority, having the maximum amount of cover of fifty thousand rupees; or
    • Pradhan Mantri Vaya Vandan Yojana;
    • Pradhan Mantri Jeevan JyotiBimaYojana;
    • Pradhan Mantri Jan DhanYogana; and
    • Any other insurance scheme by the State Government may be notified by the Government of India on the recommendation of GSTC.
70. Services using a collection of contributions under Atal Pension Yojana (APY).
71. Services using a collection of contributions under any pension system of the State Governments.
72. Service of transport of passengers, with or without accompanied belongings, by—
    • Railways in a class except for the—
      • An air-conditioned coach; or
    • First-class;
      • Inland waterways;
      • Metro, monorail or tramway;
      • Public transport, other than mainly used for tourism causes, in a vessel within places in India; and
      • Auto rickshaws or metered cabs (including E-rickshaws)
73. Services by an individual using-
    • Carrying out any religious ceremony; and
    • Renting of areas of a religious place which is meant for the common public, managed or owned by an organisation which is registered as a sacred or religious or charitable trust under the section of 12AA of the Income-tax Act 1961, or a trust or an institution which is registered under sub-clause (v) of clause (23C) of section 10 of the Income-tax Act: Given that nothing contained in (b) of this exemption will be applied to –
      • Renting or letting of rooms where per day charges are Rs 1000/- or more; and
      • Renting or letting of premises, community halls, Kalyan mandapam or open area, etc. where per day charges are Rs 10,000/- or more; and
      • Renting or letting shops or other spaces for business or commerce where per month charges are Rs 10,000/-or more.
74. Services by a guest house, hotel, inn, campsite or club, for lodging or residential or purposes, having declared duty of a unit of an accommodation per day is less than one thousand rupees
75. Services using transportation via rail of a vessel from one place to another in India of the goods given below –
    • Relief materials for victims of natural or artificial disasters, calamities, accidents, or mishaps;
    • Military or defence equipment;
    • Magazines or newspapers registered with the Newspaper Registrar;
    • Railway materials or equipment;
    • Agricultural product;
    • Salt, milk, and food grain including rice, flours, and pulses; and
    • Organic compost
76. Services provided by a goods transportation agency, using transportation in a carriage of goods-
    • Agricultural product;
    • Goods, where the gross amount charged for transport of all such goods for a single consignee is not more than rupees seven hundred fifty;
    • Goods, where the gross amount charged for the transportation of goods on a consignment transported in a single carriage is not more than one thousand five hundred rupees;
    • Salt, milk, and food grain including rice, flours, and pulses; and;
    • Organic compost;
    • Newspaper or magazines registered with the Newspaper Registrar;
    • Relief materials meant for victims of artificial or natural disasters, calamities, accidents, or mishap; or
    • Defense or military equipment
77. Services by the following people in respective capacities –
    • A business correspondent or the business facilitator to a banking company concerning accounts in its rural region branch;
    • The business facilitator or a business correspondent to an insurance company in a rural region;
    • Any individual as an intermediary to a business facilitator or a business correspondent for services mentioned in the clause (g); or
78. Carrying out an intermediary production method as job work about the growing of plants and breeding of all life forms of animals, except the breeding of horses, for food, fuel, fibre, raw material, or other similar agricultural products;
79. Services using packing, storage, warehousing, loading, unloading or storage of rice;
80. Services using right to admission to, –
    • Dance, circus, or theatrical performance including ballet or drama;
    • Concert, pageant, musical performance, award function or any sporting event other than a distinguished event of sporting;
    • Distinguished event of sporting;

The consideration for admission of each person is not more than 250 rupees per person in (i), (ii), and (iii) above.

81. Services provided by a local authority or the Government or a where the gross amount charged for such services is not more than 5000 rupees.

Given that nothing contained in this entry shall apply to services S. No. 1 (i), (ii)and (iii) above:

Given further that a constant supply of service, as defined in sub-section (33) of section 2 of the Act of CGST, 2017, which is provided by a local authority or the Government, the exemption will be applied only where the gross amount is charged for such service is not more than Rs. 5000/- in a fiscal year;

82. (i) Services provided by health care systems by an authorised medical practitioner, para-medics, or a clinical establishment;
    (ii) Services provided using transportation of a patient in an ambulance, apart from those specified in (i) above;
83. Services that are provided by the Goods and Services Tax Network (GSTN) to the State Governments or Union Territories for the implementation of GST
84. Pure services (excluding the contract services or other composite supplies which involve the supply of goods) that are provided to the Government, a local authority, or a governmental authority by way of any activity about any function entrusted to a Panchayat under Article 243G of the Constitution or any role assigned to a Municipality under the 243W Article of the Constitution
85. Services that are provided to the Government under any insurance scheme for which the Government pays the total premium
86. Services that are provided to the Government under any training or education program, the Government bears the total expenditure of the provided service.