Definitions of various important terms under Sections 2(11) to 2(20) of the CGST Act, 2017, unless the context otherwise requires:
Section 2(11): Meaning of Assessment
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): Meaning of Associated Enterprises
Associated Enterprises shall have the same meaning as assigned to it in section 92A of the Income-tax Act, 1961.
Section 2(13): Meaning of Audit
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): Meaning of Authorised Bank
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): Meaning of Authorised Representative
Authorised Representative means the representative as referred to in section 116.
Section 2(16): Meaning of Board
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 3]
Section 2(17): Meaning of Business
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 1]
(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): Meaning of Business Vertical
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– [Refer Note 2]
(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): Meaning of Capital Goods
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): Meaning of Casual Taxable Person
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.
| Note: CBEC notifies 22/06/2017 as the Commencement date for Sections 1, 2, 3, 4, 5, 10, 22, 23, 24, 25, 26, 27, 28, 29, 30, 139, 146 and 164 of the CGST Act 2017, vide Notification 1/2017. |
Amendments History:
1. 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 dated 29/08/2018), followed with Central Tax Notification 2/2019 on commencement date of 01/02/2019.
2. Section 2(18) omitted, vide Section 2 of the CGST (Amendment) Act, 2018 (GOI Notification dated 29/08/2018), followed with Notification 2/2019 on commencement date of 01/02/2019.
3. In Section 2(16), 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 dated 29/03/2018), w.e.f. 29/03/2018.
Commentary on Sections 2(11) to 2(20) of CGST Act, 2017
This commentary explains the definitions of various important terms under Sections 2(11) to 2(20) of the CGST Act, 2017:
Section 2(11) of CGST Act, 2017: Assessment
Assessment refers to determining tax liability under the CGST Act, which can take different forms such as self-assessment, re-assessment, provisional assessment, summary assessment, and best judgment assessment.
Section 2(12) of CGST Act, 2017: Associated Enterprises
Associated Enterprises refers to the definition provided under Section 92A of the Income-tax Act, 1961, which generally deals with enterprises having a direct or indirect participation in the management, capital or control of another enterprise.
Section 2(13) of CGST Act, 2017: Audit
Audit refers to examining records, returns and other documents of a registered person to verify the correctness of turnover, taxes paid, refund claimed, input tax credit availed and compliance with the provisions of the CGST Act and its rules.
Section 2(14) of CGST Act, 2017: Authorised Bank
Authorised Bank refers to a bank or branch authorized by the Government to collect taxes and other amounts payable under the CGST Act.
Section 2(15) of CGST Act, 2017: Authorised Representative
Authorised Representative refers to a representative as mentioned in Section 116 of the CGST Act, who can appear on behalf of a person before any authority under the Act.
Section 2(16) of CGST Act, 2017: Board
Board refers to the Central Board of Indirect Taxes and Customs, which is constituted under the Central Boards of Revenue Act, 1963.
Section 2(17) of CGST Act, 2017: Business
Business includes various activities such as trade, commerce, manufacture, profession, vocation, adventure, wager and any other similar activities. It also covers activities or transactions related to or incidental to the aforementioned activities, as well as activities by clubs, associations, societies, public authorities and certain services provided by officeholders.
Section 2(18) of CGST Act, 2017: Business Vertical
Business Vertical has been omitted from the CGST Act.
Section 2(19) of CGST Act, 2017: Capital Goods
Capital Goods are goods that are capitalized in a person’s books of account and are used or intended to be used for the furtherance of business. The person claiming input tax credit on these goods must record their value in their books of account.
Section 2(20) of CGST Act, 2017: Casual Taxable Person
Casual Taxable Person refers to someone who occasionally undertakes transactions involving the supply of goods or services in the course of business, without having a fixed place of business in a State or Union Territory. This includes transactions carried out as a principal, agent, or in any other capacity.
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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 Act 2019, Finance Act 2020, Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance 2020, Finance Act 2021, Finance Act 2022 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 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.
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