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, 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. [Refer Note 5]

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 Excise and Customs Central Board of Indirect Taxes and Customs constituted under the Central Boards of Revenue Act, 1963. [Refer Note 4]

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) services provided by a race club by way of totalisator or a licence to book maker in such club 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 [Refer Note 2]
(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.
[Refer Note 3]

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 22/06/2017 as the Commencement date for Section 2 of the CGST Act 2017, vide Notification 1/2017 Central Tax dt. 19/06/2017.

2. In Clause (h) of Section 2(17), the text ‘services provided by a race club by way of totalisator or a licence to book maker in such club’ substituted with the text ‘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’. vide Section 2 of the CGST (Amendment) Act, 2018: GOI Notification dt. 30/08/2018, followed with CBIC Notification 2/2019 Central Tax dt. 29/01/2019 on commencement date of 01/02/2019.

3. Section 2(18) omitted, vide Section 2 of the CGST (Amendment) Act, 2018: GOI Notification dt. 30/08/2018, followed with CBIC Notification 2/2019 Central Tax dt. 29/01/2019 on commencement date of 01/02/2019.

4. In Section 2(16) of the CGST Act 2017, the text ‘Central Board of Excise and Customs’ substituted with the text ‘Central Board of Indirect Taxes and Customs’, i.e. CBEC renamed as CBIC vide Section 221 of Finance Act 2018: GOI Notification dt. 29/03/2018, w.e.f. 29/03/2018.

5. Meaning of Associated Enterprise as per Section 92A of the Income-tax Act, 1961 (as on 01/06/2021):

(1) For the purposes of this section and sections 92, 92B, 92C, 92D, 92E and 92F, “associated enterprise”, in relation to another enterprise, means an enterprise,-

(a) which participates, directly or indirectly, or through one or more intermediaries, in the management or control or capital of the other enterprise; or

(b) in respect of which one or more persons who participate, directly or indirectly, or through one or more intermediaries, in its management or control or capital, are the same persons who participate, directly or indirectly, or through one or more intermediaries, in the management or control or capital of the other enterprise.

(2) For the purposes of sub-section (1), two enterprises shall be deemed to be associated enterprises if, at any time during the previous year,-

(a) one enterprise holds, directly or indirectly, shares carrying not less than twenty-six per cent of the voting power in the other enterprise; or

(b) any person or enterprise holds, directly or indirectly, shares carrying not less than twenty-six per cent of the voting power in each of such enterprises; or

(c) a loan advanced by one enterprise to the other enterprise constitutes not less than fifty-one per cent of the book value of the total assets of the other enterprise; or

(d) one enterprise guarantees not less than ten per cent of the total borrowings of the other enterprise; or

(e) more than half of the board of directors or members of the governing board, or one or more executive directors or executive members of the governing board of one enterprise, are appointed by the other enterprise; or

(f) more than half of the directors or members of the governing board, or one or more of the executive directors or members of the governing board, of each of the two enterprises are appointed by the same person or persons; or

(g) the manufacture or processing of goods or articles or business carried out by one enterprise is wholly dependent on the use of know-how, patents, copyrights, trade-marks, licences, franchises or any other business or commercial rights of similar nature, or any data, documentation, drawing or specification relating to any patent, invention, model, design, secret formula or process, of which the other enterprise is the owner or in respect of which the other enterprise has exclusive rights; or

(h) ninety per cent or more of the raw materials and consumables required for the manufacture or processing of goods or articles carried out by one enterprise, are supplied by the other enterprise, or by persons specified by the other enterprise, and the prices and other conditions relating to the supply are influenced by such other enterprise; or

(i) the goods or articles manufactured or processed by one enterprise, are sold to the other enterprise or to persons specified by the other enterprise, and the prices and other conditions relating thereto are influenced by such other enterprise; or

(j) where one enterprise is controlled by an individual, the other enterprise is also controlled by such individual or his relative or jointly by such individual and relative of such individual; or

(k) where one enterprise is controlled by a Hindu undivided family, the other enterprise is controlled by a member of such Hindu undivided family or by a relative of a member of such Hindu undivided family or jointly by such member and his relative; or

(l) where one enterprise is a firm, association of persons or body of individuals, the other enterprise holds not less than ten per cent interest in such firm, association of persons or body of individuals; or

(m) there exists between the two enterprises, any relationship of mutual interest, as may be prescribed.

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Note: The CGST Act, 2017 has been notified vide GOI Notification dt. 12/04/2017, which has subsequently been amended through 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, Finance Act 2021, including various Notifications issued by the Govt./ CBIC from time to time, relating to the commencement dates of various Sections/ Provisions in the respective CGST/ Amendment Acts, wherever required. Information on this page is a Section-wise compilation of Amendments made by all such Notifications, with best possible efforts for accuracy. In any case, E&OE. For official/ updated information, please visit CBIC website.

CBIC Updates (GST)
GST Circulars, Notifications, Press Releases, Orders, etc. issued by the Central Board of Indirect Taxes & Customs (CBIC) in different years, along with Section-wise/ Rule-wise Text of GST Acts/ Rules:
CGST: CGST Act/ Definitions, CGST Rules
IGST: IGST Act/ Definitions, IGST Rules
UTGST: UTGST Act/ Definitions, UTGST Rules
CBIC Circulars (CGST/ IGST/ UTGST): 2021, 2020, 2019, 2018, 2017
CBIC Central Tax (CGST) Notifications: 2021, 2020, 2019, 2018, 2017
CBIC Central Tax Rate (CGST Rate) Notifications: 2020, 2019, 2018, 2017
CBIC Integrated Tax (IGST) Notifications: 2020, 2019, 2018, 2017
CBIC Integrated Tax Rate (IGST Rate) Notifications: 2020, 2019, 2018, 2017
CBIC UT Tax (UTGST) Notifications: 2020, 2019, 2018, 2017
CBIC UT Tax Rate (UTGST Rate) Notifications: 2020, 2019, 2018, 2017
CBIC Compensation Cess Notifications: 2020, 2019, 2018, 2017
CBIC Compensation Cess Rate Notifications: 2020, 2019, 2018, 2017
CBIC Orders (CGST/ IGST/ UTGST): 2020, 2019, 2018, 2017
CBIC Press Releases: 2020, 2019, 2018, 2017
Note: For Official/ updated copy, please visit the CBIC website.

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