IMPORTANT DEFINITIONS UNDER CGST

Section 2 of the Central Goods and Services Tax Act, 2017

Sr. no.	Sub-clause & Terms	Definition
1	Actionable Claim	shall have the same meaning as assigned to it in section 3 of the Transfer of Property Act, 1882 (4 of 1882); which read as follows – “Actionable claim” means a claim to any debt, other than a debt secured by mortgage of immovable property or by hypothecation or pledge of movable property, or to any beneficial interest in movable property not in the possession, either actual or constructive, of the claimant, which the civil courts recognises as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent;
2	Agent	means a person, including a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, who carries on the business of supply or receipt of goods or services or both on behalf of another;
3	Aggregate Turnover	means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes Central tax, State tax, Union Territory tax, integrated tax and cess;
4	Assessment	means determination of tax liability under this Act and includes self-assessment, reassessment, provisional assessment, summary assessment and best judgment assessment;
5	Associated Enterprise	shall have the same meaning as assigned to it in section 92A of the Income-tax Act, 1961 (43 of 1961); which read as follows – section 92A (1) “associated enterprise”, in relation to another enterprise, means an enterprise— which participates, directly or indirectly, or through one or more intermediaries, in the management or control or capital of the other enterprise; or 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.
		Section 92A(2) provides that For the purposes of sub-section (1) of sec 92A, two enterprises shall be deemed to be associated enterprises if, at any time during the previous year,— one enterprise holds, directly or indirectly, shares carrying not less than twenty-six per cent of the voting power in the other enterprise; or 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 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 one enterprise guarantees not less than ten per cent of the total borrowings of the other enterprise; or 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 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 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 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 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 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 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 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 there exists between the two enterprises, any relationship of mutual interest, as may be prescribed.
6	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;
7	Authorised Representative	means the representative as referred to in section 116 of the CGST Act; which read as follows: the expression “authorised representative” shall mean a person authorised by the person referred to in sub-section (1) to appear on his behalf, being— his relative or regular employee; or an advocate who is entitled to practice in any court in India, and who has not been debarred from practicing before any court in India; or
8		any chartered accountant, a cost accountant or a company secretary, who holds a certificate of practice and who has not been debarred from practice; or a retired officer of the Commercial Tax Department of any State Government or Union territory or of the Board who, during his service under the Government, had worked in a post not below the rank than that of a Group-B Gazetted officer for a period of not less than two years: Provided that such officer shall not be entitled to appear before any proceedings under this Act for a period of one year from the date of his retirement or resignation; or any person who has been authorised to act as a goods and services tax practitioner on behalf of the concerned registered person. No person,— who has been dismissed or removed from Government service; or who is convicted of an offence connected with any proceedings under this Act, the State Goods and Services Tax Act, the Integrated Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, or under the existing law or under any of the Acts passed by a State Legislature dealing with the imposition of taxes on sale of goods or supply of goods or services or both; or who is found guilty of misconduct by the prescribed authority; *[or] who has been adjudged as an insolvent, shall be qualified to represent any person under sub-section (1)— for all times in case of persons referred to in clauses (a), (b) and (c); and for the period during which the insolvency continues in the case of a person referred to in clause (d). (4) Any person who has been disqualified under the provisions of the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act shall be deemed to be disqualified under this Act.
9	Business	includes— any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit; any activity or transaction in connection with or incidental or ancillary to sub-clause (a); any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction; supply or acquisition of goods including capital goods and services in connection with commencement or closure of business; 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; admission, for a consideration, of persons to any premises; 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; activities of a race club including by way of totalizator or a license to bookmaker or activity of a licensed bookmaker in such club;and any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities;
10	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;
11	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;
12	Central Tax	means the central goods and services tax levied under section 9;
13	Cess	shall have the same meaning as assigned to it in the Goods and Services Tax (Compensation to States) Act;
14	Composite Supply	means a supply made by a taxable person to a recipient consisting of two or more taxable supplies of goods or services or both, or any combination thereof, which are naturally bundled and supplied in conjunction with each other in the ordinary course of business, one of which is a principal supply; Illustration.— Where goods are packed and transported with insurance, the supply of goods, packing materials, transport and insurance is a composite supply and supply of goods is a principal supply;
15	Consideration	in relation to the supply of goods or services or both includes— any payment made or to be made, whether in money or otherwise, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government; the monetary value of any act or forbearance, in respect of, in response to, or for the inducement of, the supply of goods or services or both, whether by the recipient or by any other person but shall not include any subsidy given by the Central Government or a State Government: Provided that a deposit given in respect of the supply of goods or services or both shall not be considered as payment made for such supply unless the supplier applies such deposit as consideration for the said supply.
16	Continuous Supply of Goods	means a supply of goods which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, whether or not by means of a wire, cable, pipeline or other conduit, and for which the supplier invoices the recipient on a regular or periodic basis and includes supply of such goods as the Government may, subject to such conditions, as it may, by notification, specify;
17	Continuous Supply of Services	means a supply of services which is provided, or agreed to be provided, continuously or on recurrent basis, under a contract, for a period exceeding three months with periodic payment obligations and includes supply of such services as the Government may, subject to such conditions, as it may, by notification, specify;
18	Credit Note	means a document issued by a registered person under sub-section (1) of section 34;
19	Debit Note	means a document issued by a registered person under sub-section (3) of section 34;
20	Deemed Exports	means such supplies of goods as may be notified under section 147;
21	Electronic Cash Ledger	means the electronic cash ledger referred to in sub-section (1) of section 49;
22	Electronic Commerce	means the supply of goods or services or both, including digital products over digital or electronic network;
23	Electronic Commerce Operator	means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce;
24	Electronic Credit Ledger	means the electronic credit ledger referred to in sub-section (2) of section 49;
25	Exempt Supply	means supply of any goods or services or both which attracts nil rate of tax or which may be wholly exempt from tax under section 11, or under section 6 of the Integrated Goods and Services Tax Act, and includes non-taxable supply;
26	Fixed Establishment	means a place (other than the registered place of business) which is characterised by a sufficient degree of permanence and suitable structure in terms of human and technical resources to supply services, or to receive and use services for its own needs;
27	Goods	means every kind of movable property other than money and securities but includes actionable claim, growing crops, grass and things attached to or forming part of the land which are agreed to be severed before supply or under a contract of supply;
28	India	means the territory of India as referred to in Article 1 of the Constitution, its territorial waters, seabed and sub-soil underlying such waters, continental shelf, exclusive economic zone or any other maritime zone as referred to in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zones Act, 1976 (80 of 1976), and the air space above its territory and territorial waters;
29	Integrated Tax	means the integrated goods and services tax levied under the Integrated Goods and Services Tax Act;
30	Input	means any goods other than capital goods used or intended to be used by a supplier in the course or furtherance of business;
31	Input Service	means any service used or intended to be used by a supplier in the course or furtherance of business
32	Input Service Distributor	means an office of the supplier of goods or services or both which receives tax invoices issued under section 31 towards the receipt of input services and issues a prescribed document for the purposes of distributing the credit of Central tax, State tax, integrated tax or Union Territory tax paid on the said services to a supplier of taxable goods or services or both having the same Permanent Account Number as that of the said office;
33	Input Tax	in relation to a registered person, means the Central tax, State tax, integrated tax or Union Territory tax charged on any supply of goods or services or both made to him and includes— the integrated goods and services tax charged on import of goods; the tax payable under the provisions of sub-sections (3) and (4) of section 9; the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act; the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the respective State Goods and Services Tax Act; or the tax payable under the provisions of sub-sections (3) and (4) of section 7 of the Union Territory Goods and Services Tax Act, but does not include the tax paid under the composition levy;
34	Input Tax Credit	means the credit of input tax;
35	Intra-State Supply of Goods	shall have the same meaning as assigned to it in section 8 of the Integrated Goods and Services Tax Act;
36	Intra-State Supply of Services	shall have the same meaning as assigned to it in section 8 of the Integrated Goods and Services Tax Act;
37	Invoice or Tax Invoice	means the tax invoice referred to in section 31;
38	Inward Supply	in relation to a person, shall mean receipt of goods or services or both whether by purchase, acquisition or any other means with or without consideration;
39	Job Work	means any treatment or process undertaken by a person on goods belonging to another registered person and the expression “job worker” shall be construed accordingly;
40	Local Authority	means— a “Panchayat” as defined in clause (d) of Article 243 of the Constitution; a “Municipality” as defined in clause (e) of Article 243P of the Constitution; a Municipal Committee, a Zilla Parishad, a District Board, and any other authority legally entitled to, or entrusted by the Central Government or any State Government with the control or management of a municipal or local fund; a Cantonment Board as defined in section 3 of the Cantonments Act, 2006 (41 of 2006); a Regional Council or a District Council constituted under the Sixth Schedule to the Constitution; a Development Board constituted under Article 371 and Article 371J of the Constitution; or a Regional Council constituted under Article 371A of the Constitution;
41	Location of the Recipient of Services	means, — where a supply is received at a place of business for which the registration has been obtained, the location of such place of business; where a supply is received at a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment; where a supply is received at more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the receipt of the supply; and in absence of such places, the location of the usual place of residence of the recipient;
42	Location of the Supplier of Services	means, — where a supply is made from a place of business for which the registration has been obtained, the location of such place of business; where a supply is made from a place other than the place of business for which registration has been obtained (a fixed establishment elsewhere), the location of such fixed establishment; where a supply is made from more than one establishment, whether the place of business or fixed establishment, the location of the establishment most directly concerned with the provisions of the supply; and in absence of such places, the location of the usual place of residence of the supplier;
43	Manufacture	means processing of raw material or inputs in any manner that results in emergence of a new product having a distinct name, character and use and the term “manufacturer” shall be construed accordingly;
44	Market Value	shall mean the full amount which a recipient of a supply is required to pay in order to obtain the goods or services or both of like kind and quality at or about the same time and at the same commercial level where the recipient and the supplier are not related;
45	Mixed Supply	means two or more individual supplies of goods or services, or any combination thereof, made in conjunction with each other by a taxable person for a single price where such supply does not constitute a composite supply. Illustration.— A supply of a package consisting of canned foods, sweets, chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a single price is a mixed supply. Each of these items can be supplied separately and is not dependent on any other. It shall not be a mixed supply if these items are supplied separately;
46	Money	means the Indian legal tender or any foreign currency, cheque, promissory note, bill of exchange, letter of credit, draft, pay order, traveller cheque, money order, postal or electronic remittance or any other instrument recognised by the Reserve Bank of India when used as a 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;
47	Non-Resident Taxable Person	means any person who occasionally undertakes transactions involving supply of goods or services or both, whether as principal or agent or in any other capacity, but who has no fixed place of business or residence in India;
48	Non-Taxable Supply	means a supply of goods or services or both which is not leviable to tax under this Act or under the Integrated Goods and Services Tax Act;
49	Non-Taxable Territory	means the territory which is outside the taxable territory;
50	Other Territory	includes territories other than those comprising in a State and those referred to in sub- clauses to (e) of clause (114);
51	Output Tax	in relation to a taxable person, means the tax chargeable under this Act on taxable supply of goods or services or both made by him or by his agent but excludes tax payable by him on reverse charge basis;
52	Outward Supply	in relation to a taxable person, means supply of goods or services or both, whether by sale, transfer, barter, exchange, licence, rental, lease or disposal or any other mode, made or agreed to be made by such person in the course or furtherance of business;
53	Person	includes— an individual; a Hindu Undivided Family; a company; a firm; an Limited Liability Partnership; an association of persons or a body of individuals, whether incorporated or not, in India or outside India; any corporation established by or under any Central Act, State Act or Provincial Act or a Government company as defined in clause (45) of section 2 of the Companies Act, 2013 (18 of 2013); [which read as follows - “Government company” means any company in which not less than fifty-one per cent of the paid-up share capital is held by the Central Government, or by any State Government or Governments, or partly by the Central Government and partly by one or more State Governments, and includes a company which is a subsidiary company of such a Government company;] any body corporate incorporated by or under the laws of a country outside India; a co-operative society registered under any law relating to co-operative societies; a local authority; Central Government or a State Government; society as defined under the Societies Registration Act, 1860 (21 of 1860); trust; and every artificial juridical person, not falling within any of the above
54	Place of Business	includes— a place from where the business is ordinarily carried on, and includes a warehouse, a godown or any other place where a taxable person stores his goods, supplies or receives goods or services or both; or a place where a taxable person maintains his books of account; or a place where a taxable person is engaged in business through an agent, by whatever name called;
55	Place of Supply	means the place of supply as referred to in Chapter V of the Integrated Goods and Services Tax Act;
56	Principal	means a person on whose behalf an agent carries on the business of supply or receipt of goods or services or both;
57	Principal Place of Business	means the place of business specified as the principal place of business in the certificate of registration;
58	Principal Supply	means the supply of goods or services which constitutes the predominant element of a composite supply and to which any other supply forming part of that composite supply is ancillary;
59	Recipient	of supply of goods or services or both, means— where a consideration is payable for the supply of goods or services or both, the person who is liable to pay that consideration; where no consideration is payable for the supply of goods, the person to whom the goods are delivered or made available, or to whom possession or use of the goods is given or made available; and where no consideration is payable for the supply of a service, the person to whom the service is rendered,
60		and any reference to a person to whom a supply is made shall be construed as a reference to the recipient of the supply and shall include an agent acting as such on behalf of the recipient in relation to the goods or services or both supplied;
61	Registered Person	means a person who is registered under section 25 but does not include a person having a Unique Identity Number;
62	Regulations	means the regulations made by the Board under this Act on the recommendations of the Council;
63	Removal	in relation to goods, means— despatch of the goods for delivery by the supplier thereof or by any other person acting on behalf of such supplier; or collection of the goods by the recipient thereof or by any other person acting on behalf of such recipient;
64	Return	means any return prescribed or otherwise required to be furnished by or under this Act or the rules made thereunder;
65	Reverse Charge	means the liability to pay tax by the recipient of supply of goods or services or both instead of the supplier of such goods or services or both under sub-section (3) or sub-section (4) of section 9, or under sub-section (3) or sub-section (4) of section 5 of the Integrated Goods and Services Tax Act;
66	Services	means anything other than goods, money and securities but includes activities 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; Explanation – For the removal of doubts, it is hereby clarified that the expression “services” includes facilitating or arranging transactions in securities;
67	State tax	means the tax levied under any State Goods and Services Tax Act;
68	Supplier	in relation to any goods or services or both, shall mean the person supplying the said goods or services or both and shall include an agent acting as such on behalf of such supplier in relation to the goods or services or both supplied;
69	Tax Period	means the period for which the return is required to be furnished;
70	Taxable Person	means a person who is registered or liable to be registered under section 22 or section 24;
71	Taxable Supply	means a supply of goods or services or both which is leviable to tax under this Act;
72	Taxable Territory	means the territory to which the provisions of this Act apply;
73	Telecommunication Service	means service of any description (including electronic mail, voice mail, data services, audio text services, video text services, radio paging and cellular mobile telephone services) which is made available to users by means of any transmission or reception of signs, signals, writing, images and sounds or intelligence of any nature, by wire, radio, visual or other electromagnetic means;
74	The State Goods and Services Tax Act	means the respective State Goods and Services Tax Act, 2017;
75	Turnover in State or Turnover in Union Territory	means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis) and exempt supplies made within a State or Union Territory by a taxable person, exports of goods or services or both and inter- State supplies of goods or services or both made from the State or Union Territory by the said taxable person but excludes Central tax, State tax, Union Territory tax, Integrated tax and cess;
76	Usual Place of Residence	means— in case of an individual, the place where he ordinarily resides; in other cases, the place where the person is incorporated or otherwise legally constituted;
77	Union Territory	means the territory of— the Andaman and Nicobar Islands; Lakshadweep; Dadra and Nagar Haveli and Daman and Diu; Ladakh Chandigarh; and Other territory. Explanation.— For the purposes of this Act, each of the territories specified in sub-clauses (a) to (f) shall be considered to be a separate Union Territory;
78	Union Territory Tax	means the Union Territory goods and services tax levied under the Union Territory Goods and Services Tax Act;
79	Valid Return	means a return furnished under sub-section (1) of section 39 on which self-assessed tax has been paid in full;
80	Voucher	means an instrument where there is an obligation to accept it as consideration or part consideration for a supply of goods or services or both and where the goods or services or both to be supplied or the identities of their potential suppliers are either indicated on the instrument itself or in related documentation, including the terms and conditions of use of such instrument;
81	Works Contract	means a contract for building, construction, fabrication, completion, erection, installation, fitting out, improvement, modification, repair, maintenance, renovation, alteration or commissioning of any immovable property wherein transfer of property in goods (whether as goods or in some other form) is involved in the execution of such contract;
82	words and expressions used and not defined in this Act but defined in the Integrated Goods and Services Tax Act, the Union Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation to States) Act shall have the same meaning as assigned to them in those Acts;

OTHER IMPORTANT DEFINITIONS OR MEANING UNDER THE CENTRAL GOODS AND SERVICES TAX ACT, 2017

Reference	Term	Meaning
Sec 25(4)	distinct persons	A person who has obtained or is required to obtain more than one registration, whether in one State or Union territory or more than one State or Union territory shall, in respect of each such registration, be treated as distinct persons for the purposes of this Act
Explanation to sec 15	related persons	persons shall be deemed to be “related persons” if— such persons are officers or directors of one another’s businesses; such persons are legally recognised partners in business; such persons are employer and employee; any person directly or indirectly owns, controls or holds twenty-five per cent or more of the outstanding voting stock or shares of both of them; one of them directly or indirectly controls the other; both of them are directly or indirectly controlled by a third person; together they directly or indirectly control a third person; or they are members of the same family;
Explanation 2 to section 74	suppression	the expression “suppression” shall mean non-declaration of facts or information which a taxable person is required to declare in the return, statement, report or any other document furnished under this Act or the rules made thereunder, or failure to furnish any information on being asked for, in writing, by the proper officer.