Daily Dose of GST Update By CA Pradeep Jain

Definition of Input Service Distributor and Money

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(54) Input Service Distributor: The new definition reads as follows:

Input service distributor means an office of the supplier of goods and/or services which receives tax invoices issued under section 28 towards receipt of input services and issues a prescribed document for the purposes of distributing the credit of CGST (SGST in State Acts) and / or IGST paid on the said services to a supplier of taxable goods and / or services having same PAN as that of the office referred to above;

The amendment bought in this definition is the deletion of the explanation to the definition which was present in old Model GST law. This explanation read as follows:

“For the purposes of distributing the credit of CGST (SGST in State Acts) and / or IGST, Input Service Distributor shall be deemed to be a supplier of services.”

As a result of the deletion, the office of ISD won’t be deemed to be supplier of services. This amendment is clarifying in nature as the explanation tends to imply that all the provisions as applicable to a supplier of service will be applicable on the ISD as well. This would mean that not only the ISD had to file returns prescribed for supplier of services; he would have to also comply with the provisions meant for supplier of services. Thus the explanation has been deleted to avoid such interpretation by the department.

2(68) Money: the new definition reads as follows:

Money means Indian legal tender or any foreign currency, cheque, promissory note, bill of exchange, letter of credit, draft, pay order, traveler cheque, money order, postal or electronic remittance or any other instrument recognized by the Reserve Bank of India when used as consideration to settle an obligation or exchange with Indian legal tender of another denomination but shall not include any currency that is held for its numismatic value.

The amendment carried out in this definition is that in the old definition, there was no requirement for an instrument to be recognized by the RBI for being used as consideration. This is now a condition in addition to the instruments specified as money. It is to be noted that money is neither considered as goods nor as services. Thus all such instruments not recognized by RBI won’t fall under the definition of money. Thus, all such instruments will have to be classified as goods or services as the case may be.

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