Section 2 of IGST Act, 2017: Definitions of Key Terms

Definitions of various important terms as per Section 2 of the Integrated Goods and Services Tax (IGST) Act, 2017 as notified/ amended by Govt. of India/ CBIC from time to time, unless the context otherwise requires, are as under:

Section 2(1): Central Goods and Services Tax Act

“Central Goods and Services Tax Act” means the Central Goods and Services Tax Act, 2017.

Section 2(2): Central Tax

“Central Tax” means the tax levied and collected under the Central Goods and Services Tax Act.

Section 2(3): Continuous Journey

“Continuous Journey” means a journey for which a single or more than one ticket or invoice is issued at the same time, either by a single supplier of service or through an agent acting on behalf of more than one supplier of service, and which involves no stopover between any of the legs of the journey for which one or more separate tickets or invoices are issued.

Explanation: The term “stopover” means a place where a passenger can  disembark either to transfer to another conveyance or break his journey for a certain period in order to resume it at a later point of time.

Section 2(4): Customs Frontiers of India

“Customs Frontiers of India” means the limits of a customs area as defined in section 2 of the Customs Act, 1962 (52 of 1962).

Section 2(5): Export of Goods

“Export of Goods” with its grammatical variations and cognate expressions, means taking goods out of India to a place outside India.

Section 2(6): Export of Services

“Export of Services” means the supply of any service when,-

(i) the supplier of service is located in India;

(ii) the recipient of service is located outside India;

(iii) the place of supply of service is outside India;

(iv) the payment for such service has been received by the supplier of service in convertible foreign exchange or in Indian rupees wherever permitted by the Reserve Bank of India; and

(v) the supplier of service and the recipient of service are not merely establishments of a distinct person in accordance with Explanation 1 in section 8.  [Refer Note 1(a)]

Section 2(7): Fixed Establishment

“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.

Section 2(8): Goods and Services Tax (Compensation to States) Act

“Goods and Services Tax (Compensation to States) Act” means the Goods and Services Tax (Compensation to States) Act, 2017.

Section 2(9): Government

“Government” means the Central Government.

Section 2(10): Import of Goods

“Import of Goods” with its grammatical variations and cognate expressions, means bringing goods into India from a place outside India.

Section 2(11): Import of Services

“Import of Services” means the supply of any service, where- (i) the supplier of service is located outside India; (ii) the recipient of service is located in India; and (iii) the place of supply of service is in India.

Section 2(12): Integrated Tax

“Integrated Tax” means the integrated goods and services tax levied under this Act.

Section 2(13): Intermediary

“Intermediary” means a broker, an agent or any other person, by whatever name called, who arranges or facilitates the supply of goods or services or both, or securities, between two or more persons, but does not include a person who supplies such goods or services or both or securities on his own account.

Section 2(14): Location of the Recipient of Services

“Location of the Recipient of Services” means,–

(a) where a supply is received at a place of business for which the registration has been obtained, the location of such place of business;

(b) 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;

(c) 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

(d) in absence of such places, the location of the usual place of residence of the recipient.

Section 2(15): Location of the Supplier of Services

“Location of the Supplier of Services” means,-

(a) where a supply is made from a place of business for which the registration has been obtained, the location of such place of business;

(b) 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;

(c) 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 provision of the supply; and

(d) in absence of such places, the location of the usual place of residence of the supplier.

Section 2(16): Non-taxable Online Recipient

“Non-taxable Online Recipient” means any Government, local authority, governmental authority, an individual or any other person not registered and receiving online information and database access or retrieval services in relation to any purpose other than commerce, industry or any other business or profession, located in taxable territory.

Explanation: The expression “governmental authority” means an authority or a board or any other body,-

(i) set up by an Act of Parliament or a State Legislature; or

(ii) established by any Government, with ninety per cent or more participation by way of equity or control, to carry out any function entrusted to a Panchayat under article 243G or to a municipality under article 243W of the Constitution. [Refer Note 1(b)]

“Non-taxable Online Recipient” means any unregistered person receiving online information and database access or retrieval services located in taxable territory.

Explanation.- For the purposes of this clause, the expression “unregistered person” includes a person registered solely in terms of clause (vi) of section 24 of the Central Goods and Services Tax Act, 2017. [Refer Note 2]

Section 2(17): Online Information and Database Access or Retrieval (OIDAR) Services

“Online Information and Database Access or Retrieval Services” means services whose delivery is mediated by information technology over the internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention and impossible to ensure in the absence of information technology and includes electronic services such as,- [Refer Note 3]

(i) advertising on the internet;

(ii) providing cloud services;

(iii) provision of e-books, movie, music, software and other intangibles through telecommunication networks or internet;

(iv) providing data or information, retrievable or otherwise, to any person in electronic form through a computer network;

(v) online supplies of digital content (movies, television shows, music and the like);

(vi) digital data storage; and

(vii) online gaming.

Section 2(18): Output Tax

“Output Tax”, in relation to a taxable person, means the integrated 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.

Section 2(19): Special Economic Zone (SEZ)

“Special Economic Zone” shall have the same meaning as assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005).

Section 2(20): Special Economic Zone (SEZ) Developer

“Special Economic Zone Developer” shall have the same meaning as assigned to it in clause (g) of section 2 of the Special Economic Zones Act, 2005 (28 of 2005) and includes an Authority as defined in clause (d) and a Co-Developer as defined in clause (f) of section 2 of the said Act.

Section 2(21): Supply

“Supply” shall have the same meaning as assigned to it in section 7 of the Central Goods and Services Tax Act.

Section 2(22): Taxable Territory

“Taxable Territory” means the territory to which the provisions of this Act apply.

Section 2(23): Zero-rated Supply

“Zero-rated Supply” shall have the meaning assigned to it in section 16.

Section 2(24)

Words and expressions used and not defined in this Act but defined in the Central 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.

Section 2(25)

Any reference in this Act to a law which is not in force in the State of Jammu and Kashmir, shall, in relation to that State be construed as a reference to the corresponding law, if any, in force in that State.

Section 2 of the Integrated Goods and Services Tax (IGST) Act, 2017 primarily provides the definitions of various terms used throughout the IGST Act. This section serves as a foundation for understanding the provisions of the Act and interpreting its various provisions in the context of the GST regime in India.

Amendments History:

1. Amendments made vide Section 2 of the IGST (Amendment) Act, 2018: GOI Notification dt. 30/08/2018, followed with CBIC Notification on commencement date of 01/02/2019 vide Notification 1/2019 Integrated Tax dt. 29/01/2019:

a) Section 2(6): The text ‘or in Indian rupees wherever permitted by the Reserve Bank of India’ inserted in clause (iv); (Thus, the condition has been relaxed and remittances can be in Indian rupees in cases wherever permitted by RBI)

b) Section 2(16): The text ‘to a Panchayat under article 243G or’ inserted. (Thus the Function entrusted to Panchayat under article 243G also included in the definition)

2. Section 2(16) of substituted vide Section 160(a) of the Finance Act, 2023, pending notification on the commencement date.

This amendment limits the definition of “non-taxable online recipient” to any unregistered person receiving OIDAR services located in the taxable territory. Further, it clarifies that persons registered solely in accordance with clause (vi) of section 24 of the CGST Act, 2017 will be treated as unregistered for the purposes of the said clause.

3. In Section 2(17), the text “essentially automated and involving minimal human intervention and” omitted vide Section 160(b) of the Finance Act, 2023, pending notification on the commencement date.

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Note: The IGST Act 2017 has been notified vide GOI Notification dated 12/04/2017, which has subsequently been amended through IGST Extension to J&K Act 2017, IGST (Amendment) Act 2018. Finance Act 2019, Finance Act 2020, Finance Act 2021, Finance Act, 2022 and Finance Act, 2023, including various Notifications issued by the Govt./ CBIC from time to time, relating to the commencement dates of various Sections/ Provisions in the respective IGST/ Amendment Acts, wherever required. Information on this page is a Section-wise compilation of the Amendments made by various Notifications issued by CBIC from time to time, with best possible efforts for accuracy. In any case, E&OE. For official/ updated information, please visit CBIC website.