GST Mega Revision: 8 Core Concepts
Consideration, Inter-State Supply (ISST), RCM, Place of Supply, Time of Payment, ITC on Business vs Personal purchases, Export & Import of Goods/Services, Zero Rated Supply, and E-Commerce Operator — all tied together through Ramesh’s story. Bonus content beyond the 30-day series.
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1. Consideration — When is GST Payable?
The first concept the notes cover is the most fundamental: GST is payable only when there is Consideration. Consideration means money or equivalent value received in exchange for a supply.
📌 The Rule
No Consideration = No GST — Unless the supply is covered under Schedule I (Deemed Supply). Schedule I covers specific transactions where GST applies even without consideration — like supply between related persons or distinct persons (same PAN, different GSTINs).
With Consideration
Sale of goods, provision of services, transfer of business assets — all attract GST when consideration (money or equivalent value) is received.
Without Consideration — Schedule I
Gifts to employees exceeding ₹50,000/year, supply between distinct persons (same entity, different states), supply between related persons — GST applies even without payment.
2. Inter-State Supply (ISST) — Ramesh’s Dry Fruits Story
The notes use Ramesh in Delhi as the storyteller. He realises his dry fruit business needs to supply to Chandigarh — crossing a state boundary. This is an Inter-State Supply.
Dry Fruits = Goods (movable property) → GST on Goods
Delivery = Service (other than goods) → GST on Service
Both attract GST — two separate GST liabilities in one transaction.
📌 Inter-State vs Intra-State Supply
- Inter-State Supply: POS (Place of Supply) ≠ Supplier’s State → IGST applies
- Intra-State Supply: POS = Supplier’s State → CGST + SGST applies
- Union Territory (UT) — no legislature: CGST + UTGST applies (e.g. Chandigarh)
- GST is PAN + State based — same entity in different states = different GSTINs
3. Place of Supply — The Key Determinant
Place of Supply (POS) is what determines whether a supply is Inter-State or Intra-State — and therefore which tax (IGST or CGST+SGST) applies.
| Scenario | POS | Tax Applicable |
|---|---|---|
| POS = Supplier’s State (same state) | Same State | CGST + SGST (Intra-State) |
| POS ≠ Supplier’s State (different states) | Different State | IGST (Inter-State) |
| Supply to/from Union Territory (no legislature) | UT | CGST + UTGST |
| Ramesh (Delhi) → Chandigarh (UT) | Chandigarh | IGST (Inter-State from Delhi) |
💡 Meri Hi Branch Ko Bhejna Bhi GST Supply Maana Jaata Hai?
Yes! Because GST is PAN + State based. If Ramesh sends dry fruits from his Delhi branch to his own Haryana branch — both are different GSTINs (even though same owner). This qualifies as a Supply between Distinct Persons (Schedule I) — GST applies even without consideration.
4. Reverse Charge Mechanism (RCM)
Normally the Supplier pays GST to the government. Under RCM, the Recipient pays — this is a reversal of the normal GST liability.
⚠️ Why RCM?
When the supplier is unregistered (or in certain notified categories), it is difficult for the government to collect GST from them. So the law reverses the liability — the registered recipient pays GST directly to the government and can then claim it back as ITC.
5. Time of Payment — When Does GST Liability Arise?
The notes show Ramesh getting confused: “When to pay? When to order? When to deliver? When to get payment?” — this is the Time of Supply concept.
| Type | Time of Supply (When GST Liability Arises) |
|---|---|
| Goods | Earlier of: Date of Invoice (DOI) or Date of Delivery (DOD) |
| Services | Earlier of: Date of Invoice (DOI) or Date of Payment (DOP) — whichever earlier (w.e.e. DOP) |
6. ITC — Business vs Personal Purchases
Ramesh can claim ITC on business purchases — but NOT on personal purchases. The note gives clear examples:
✔ The Golden ITC Rule
ITC is available on business purchases only. Any purchase for personal use or blocked under Section 17(5) — no ITC. Ramesh can claim ITC on packaging machinery, raw materials, professional services for the business — but not on his family’s personal expenses or personal vehicle.
7. Export of Goods & Services — Zero Rated Supply
The notes show Ramesh getting his “Pehla Export Order” — supplying dry fruits to London. Exports are Zero Rated Supply under GST — which is different from exempt supply.
Goods sent out of India = Export = Zero Rated Supply
| Export Option | How | GST Paid? |
|---|---|---|
| With Payment of Tax | Pay IGST upfront → Claim Refund later | Pay & Refund |
| Without Payment of Tax | Execute LUT (Letter of Undertaking) / Bond → Export without paying IGST | LUT / Bond — No GST |
📌 Zero Rated ≠ Exempt
Zero Rated Supply (Exports + SEZ) — GST rate is 0% BUT ITC is fully available. Supplier can claim refund of accumulated ITC.
Exempt Supply — No GST, but ITC is also NOT available (must be reversed). This is the critical difference.
8. Import of Goods & Services
Import of Goods
Ramesh imports Dry Fruit Roaster Machine from China (industrial machinery). At Customs:
Pay BCD (Basic Customs Duty) + IGST on imported goods. IGST paid at customs is available as ITC.
Import of Services
Ramesh takes Online Consulting for Branding from a foreign firm. This is Import of Service — Pay IGST under RCM. The recipient (Ramesh) pays IGST and can claim it as ITC.
9. E-Commerce Operator (ECO)
The notes show Ramesh joining platforms like Blinkit, Zepto, Amazon, Flipkart, Meesho, Myntra — all are E-Commerce Operators (ECOs).
What ECOs Do
Collect payment from buyers, deduct TCS (Tax Collected at Source) @ 1%, pay balance to seller, file GSTR-8 separately.
ECO Process
Buyer places order → ECO collects payment → ECO deducts TCS → Pays net to seller → Files GSTR-8. Seller claims TCS credit in Electronic Credit Ledger.
Key Points
TCS @ 1% (0.5% CGST + 0.5% SGST or 1% IGST). Seller must report sales through ECO in Table 14 of GSTR-1. Separate GSTR-8 filed by ECO monthly.
Day 24A (Bonus) — Key Takeaways
📌 Ramesh’s GST Journey — Quick Recall
- Consideration: No Consideration = No GST (unless Schedule I Deemed Supply)
- ISST: Ramesh (Delhi) → Chandigarh = IGST. Dry Fruits = Goods GST. Delivery = Service GST.
- POS Rule: POS = Same State → CGST+SGST (Intra). POS ≠ Supplier State → IGST (Inter)
- RCM: Unregistered supplier → Recipient pays GST. Ramesh pays instead of unregistered housekeeping agency.
- Time of Supply: Goods → Earlier of DOI/DOD. Services → Earlier of DOI/DOP
- ITC: Business purchases (Packaging M/c ✅). Personal/family/scooter ❌
- Export: Zero Rated Supply. With payment (Refund) or LUT/Bond (without payment)
- Import Goods: BCD + IGST at Customs. Import Services: IGST under RCM
- ECO: TCS @ 1%, GSTR-8 separately, Seller claims TCS in Electronic Credit Ledger
💬 Comment ‘GST’ on Instagram
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