Definition of Principal place of business, Proper Officer & Services under Revised Model GST Law

Daily Dose of GST Update By CA Pradeep Jain

Taking further to our discussion, we are continuing our discussion the definitions  given under Section 2 of revised GST law and comparing the same with old model GST law to know the changes made in revised law:-

2(77) Principal place of business: the new definition reads as follows:

Principal place of business means the place of business specified as the principal place of business in the certificate of registration;

The old definition read as follows:

“principal place of business” means the place of business specified as the principal place of business in the certificate of registration where the taxable person keeps and maintains the accounts and records as specified under section 42 ;

The amendment bought in the definition is that principal place of the business will be the place mentioned in registration certificate irrespective of the location of books and accounts. However, the definition of “place of business” defined section 2(74) clears that it can be place where books of accounts are being kept.  This was necessary in view of the fact that currently in excise and service tax, registration are premises based and every premise has to maintain its own records. Following the old definition, every registered premise would have to be classified as principal place of business inviting litigation. Deleting the condition of keeping books of accounts has made the definition simple to follow and now the assessee can name any of his premises as principal place of business. But there is no need to keep books of accounts there only. It can be kept at any place of business.

2(79) Proper Officer: the new definition reads as follows:

Proper Officer in relation to any function to be performed under this  Act, means the officer of goods and services tax who is assigned that function by the Commissioner of CGST / SGST;

The old definition reads as follows:

“proper officer” in relation to any function to be performed under this Act, means the officer of goods and services tax who is assigned that function by the Board/Commissioner of SGST;

The amendment bought in this definition is that the authority to assign function to GST officers rest only with commissioners of SGST and CGST and not with CBEC, instructions issued by CBEC will no longer be binding on proper officers. The Commissioners under CGST/SGST will be independent to assign the functions and there won’t be any overriding of authority in absence of a parallel governing body. In fact all the definitions involving the board have been amended to remove the word ‘board’.

2(92) Services: The new definition reads as follows:

Service means anything other than goods;

Explanation 1.- Services include transactions in money but does not include money  and securities;

Explanation 2.- Services does not include transaction in money other than an activity relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged.

The old definition read as follows:

“services’’ means anything other than goods; Explanation: Services include intangible property and actionable claim but does not include money.

The amendment bought in the definition is that Securities explicitly excluded from services definition. We have told in our earlier update that securities are excluded from the definition of “goods” under Section 2(49) also. Thus securities won’t be considered as goods or services and as a result, GST won’t be applicable on the same.  The definition has also been amended to specifically state that Services does not include transaction in money other than an activity relating to the use of money or its conversion by cash or by any other mode, from one form, currency or denomination, to another form, currency or denomination for which a separate consideration is charged. Thus the definition has been made more clear in respect of transaction in money to avoid any kind of litigation.

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