Sections 2(81) to 2(90) of the CGST Act, 2017: Definitions

Definitions of various important terms under Sections 2(81) to 2(90) of the CGST Act, 2017, unless the context otherwise requires:

Section 2(81): Meaning of Other Territory

Other Territory includes territories other than those comprising in a State and those referred to in sub-clauses (a) to (e) of clause (114).

Section 2(82): Meaning of Output Tax

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.

Section 2(83): Meaning of Outward Supply

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.

Section 2(84): Meaning of Person

Person includes,

(a) an individual;

(b) a Hindu Undivided Family;

(c) a company;

(d) a firm;

(e) a Limited Liability Partnership;

(f) an association of persons or a body of individuals, whether incorporated or not, in India or outside India;

(g) 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;

(h) any body corporate incorporated by or under the laws of a country outside India;

(i) a co-operative society registered under any law relating to co-operative societies;

(j) a local authority;

(k) Central Government or a State Government;

(l) society as defined under the Societies Registration Act, 1860;

(m) trust; and

(n) every artificial juridical person, not falling within any of the above.

Section 2(85): Meaning of Place of Business

Place of Business includes,

(a) 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

(b) a place where a taxable person maintains his books of account; or

(c) a place where a taxable person is engaged in business through an agent, by whatever name called.

Section 2(86): Meaning of Place of Supply

Place of Supply means the place of supply as referred to in Chapter V of the Integrated Goods and Services Tax Act.

Section 2(87): Meaning of Prescribed

Prescribed means prescribed by rules made under this Act on the recommendations of the Council.

Section 2(88): Meaning of Principal

Principal means a person on whose behalf an agent carries on the business of supply or receipt of goods or services or both.

Section 2(89): Meaning of Principal Place of Business

Principal Place of Business means the place of business specified as the principal place of business in the certificate of registration.

Section 2(90): Meaning of Principal Supply

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.

Amendments History:

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Commentary on Sections 2(81) to 2(90) of CGST Act, 2017

The following commentary provides an explanation of the important terms defined under Sections 2(81) to 2(90) of the CGST Act, 2017:

Section 2(81): Other Territory

This term refers to regions that are not included within a State or territories mentioned in clause (114) sub-clauses (a) to (e). These areas are not a part of any state’s jurisdiction and are treated differently in terms of taxation.

Section 2(82): Output Tax

Output tax is the tax levied on the taxable supply of goods or services made by a taxable person or their agent, excluding the tax payable on a reverse charge basis. This is the tax that a business collects from customers and is expected to remit to the government.

Section 2(83): Outward Supply

Outward supply refers to the supply of goods or services made by a taxable person in the course of their business through various modes, such as sale, transfer, barter, exchange, license, rental, lease or disposal.

Section 2(84): Person

The term “person” has an extensive definition under the CGST Act and covers individuals, Hindu Undivided Families, companies, firms, LLPs, associations, corporations, co-operative societies, local authorities, governments, societies, trusts and other artificial juridical persons.

Section 2(85): Place of Business

This term includes the primary location where a business operates and other places where a taxable person stores goods, maintains books of accounts or conducts business through an agent.

Section 2(86): Place of Supply

The place of supply is referred to in Chapter V of the Integrated Goods and Services Tax Act and determines the location where the goods or services are considered to be supplied. It is crucial for determining the nature of the tax applicable (intra-state or inter-state).

Section 2(87): Prescribed

“Prescribed” refers to the rules or procedures established by the CGST Act based on the recommendations of the GST Council.

Section 2(88): Principal

A principal is a person on whose behalf an agent conducts the business of supply or receipt of goods or services. The agent acts as an intermediary between the principal and the customer.

Section 2(89): Principal Place of Business

This refers to the primary location specified in the certificate of registration where the taxable person carries out their business activities.

Section 2(90): Principal Supply

Principal supply is the main element of a composite supply (a supply consisting of multiple goods or services), while other supplies included in the composite supply are ancillary. It is essential for determining the tax treatment of the composite supply.

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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.