Section 2(11) to 2(20) of the CGST Act, 2017: Definitions

Definitions of various important terms under Sections 2(11) to 2(20) of the CGST Act, 2017, as notified/ amended by Govt. of India/ CBIC upto 30th Sept. 2020, unless the context otherwise requires, are as under:

Section 2(11) > assessment means determination of tax liability under this Act and includes self-assessment, re-assessment, provisional assessment, summary assessment and best judgment assessment.

Section 2(12) > associated enterprises shall have the same meaning as assigned to it in section 92A of the Income-tax Act, 1961.

Section 2(13) > audit means the examination of records, returns and other documents maintained or furnished by the registered person under this Act or the rules made thereunder or under any other law for the time being in force to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess his compliance with the provisions of this Act or the rules made thereunder.

Section 2(14) > authorised bank shall mean a bank or a branch of a bank authorised by the Government to collect the tax or any other amount payable under this Act.

Section 2(15) > authorised representative means the representative as referred to in section 116.

Section 2(16) > Board means the Central Board of Indirect Taxes and Customs constituted under the Central Boards of Revenue Act, 1963.

Section 2(17) > business includes (a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; (b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a); (c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; (d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business; (e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members; (f) admission, for a consideration, of persons to any premises; (g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation; (h) activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and (i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities.

Section 2(18) > Business Vertical means a distinguishable component of an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which is subject to risks and returns that are different from those of the other business verticals.
Explanation.– For the purposes of this clause, factors that should be considered in determining whether goods or services are related include–
(a) the nature of the goods or services; (b) the nature of the production processes; (c) the type or class of customers for the goods or services; (d) the methods used to distribute the goods or supply of services; and (e) the nature of regulatory environment (wherever applicable), including banking, insurance, or public utilities.

Section 2(19) > capital goods means goods, the value of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business.

Section 2(20) > casual taxable person means a person who occasionally undertakes transactions involving supply of goods or services or both in the course or furtherance of business, whether as principal, agent or in any other capacity, in a State or a Union territory where he has no fixed place of business.

Amendments History:

1. CBEC notifies 22nd June 2017 as the Commencement date for Section 2 of the CGST Act 2017, vide Notification 1/2017 Central Tax.

2. Amendments made in Section 2 of the CGST Act, 2017, vide Section 2 of the CGST (Amendment) Act, 2018: GOI Notification dt. 30 Aug. 2018, followed with CBIC Notification on commencement date of 1st Feb. 2019 vide Notification 2/2019 Central Tax dt. 29 Jan. 2019:

a) Cause (h) of Section 2(17) substituted from “services provided by a race club by way of totalisator or a licence to book maker in such club; and”  to “activities of a race club including by way of totalisator or a license to book maker or activities of a licensed book maker in such club; and”

b) Section 2(18) omitted.

3. In Section 2(16) of the CGST Act 2017, the words “Central Board of Excise and Customs” substituted with the words “Central Board of Indirect Taxes and Customs” , i.e. CBEC renamed as CBIC vide Section 221 of the Finance Act 2018: GOI Notification dt. 29 March 2018, w.e.f. 29th March 2018.

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Govt. has notified the CGST Act, 2017 on 12th April, 2017, which has subsequently been amended through the CGST (Extension to J&K) Act 2017, Finance Act 2018, CGST Amendment Act 2018, Finance (No. 2) Act 2019, Finance Act 2020, Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020. Further, CBEC/ CBIC has also issued various Notifications from time to time, relating to the commencement date of various Sections/ Provisions in the respective CGST/ Amendment Acts, wherever required.

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