Chapter VIII Payment of Tax
Ans. Electronic tax liability register is a register to be maintained in the common portal of GST in FORM GST PMT-01 to record all liabilities of a taxable person. Part-I is for recording return related liabilities and Part-II is for recording other than return related liabilities.
Ans. The possible debits and credits to Electronic tax liability register are as follows; Debit Credit the amount payable towards tax, interest, late fee or any other amount payable as per the return filed by the said person; the amount of tax, interest, penalty or any other amount payable as determined by a proper officer in pursuance of any proceeding under the Act or as ascertained by the said person; the amount of tax and interest payable as a result of mismatch under section 42 or section 43 or section 50; or any amount of interest that may accrue from time to time.on
Ans. Electronic credit ledger is a register to be maintained in the common portal of GST in FORM GST PMT-02 to record input tax credit claimed, utilization, reversal and refund.
Ans. In case of discrepancy in the Electronic Credit Ledger the taxable person needs to communicate the same to the Jurisdictional officer through common portal in FORM GST PMT-04.
Ans. The possible debits and credits to Electronic credit ledger are as follows; Debit Credit (i) Discharge of any liability in accordance with Section 49; (ii) Towards claim for refund of unutilized amount. (i) Input tax credit claimed; (ii) Reversal of amount debited earlier on account of final rejection of refund (FORM GST PMT-03).
Ans. Electronic cash ledger is a register to be maintained in the common portal of GST in FORM GST PMT-05 to record deposit of tax, interest, penalty and other amounts, utilization thereof and refund.
Ans. The possible debits and credits to Electronic cash ledger are as follows: Debit Credit i. Discharge of any liability in accordance with Section 49 ii. Towards claim for refund of any amount i. Payment made through challan on receipt of CIN ii. Amount deducted under Section 51 and claimed in FORM GSTR- 02 iii. Amount collected under Section 52 and claimed in FORM GSTR-02 iv. Reversal of amount debited earlier on account of final rejection of refund (FORM GST PMT-03)
Ans. A registered taxable person, or any other person on his behalf, shall generate a challan in FORM GST PMT-06 on the Common Portal and enter the details of the amount to be deposited by him towards tax, interest, penalty, fees or any other amount and pay the amount through the following means: (i) Internet banking through authorized bank;(ii) Credit/debit card through the authorized bank; (iii) National Electronic Fund Transfer (NEFT) or Real Time Gross Settlement (RTGS) from any bank; (iv) Over the Counter payment (OTC) through authorized banks for deposits up to ten thousand rupees per challan per tax period, by cash, cheque or demand draft.
Ans. The restriction of deposits upto ten thousand rupees per challan per tax period, by cash, cheque or demand draft is not applicable to the deposit made by: (a) Government Departments or any other deposit to be made by persons as may be notified by the Board/Commissioner (SGST) in this behalf; (b) Proper officer or any other officer authorized to recover outstanding dues from any person, whether registered or not, including recovery made through attachment or sale of movable or immovable properties; (c) Proper officer or any other officer authorized for the amounts collected by way of cash or cheque, demand draft during any investigation or enforcement activity or any ad hoc deposit:
Ans. The challan FORM GST PMT-06 generated at the common portal shall be valid for a period of fifteen days.
Ans. In order to deposit tax by way of NEFT or RTGS, the taxable person needs to generate a mandate form along with the challan and submit it to Bank for processing.
Ans. The mandate form generated at the common portal shall be valid for a period of fifteen days
Ans. CIN is the number generated for identification of payment made by the taxable person. It will be generated upon successful credit of the amount to the concerned government account maintained in the authorized bank.
Ans. Where the bank account of the concerned taxable person, or the person making the deposit on his behalf, is debited but no Challan Identification Number (CIN) is generated, the said person may represent electronically in FORM GST PMT-07 throughthe Common Portal to the Bank or electronic gateway through which the deposit was initiated.
Ans. There is no restriction on the account to be used by the taxable payment for payment of tax. The payment can be made by a third party from his account using the GSTIN of the taxable person to get the amount debited to the electronic cash ledger of the taxable person
Ans. The date of credit to the account of the appropriate Government in the authorized bank shall be deemed to be the date of deposit in the electronic cash ledger. Therefore, in this case the date of payment/deposit of tax shall be 21st October 2017, which means a delay of one day in payment of tax.
Ans. All payments will reflect in the electronic cash ledger of the person. As the portal is common for CGST, SGST, UTGST and IGST, all the payments will be reflected in a single electronic cash ledger. However, cross utilization may not be allowed within the ledger
Ans. No, input tax credit will appear separately in the electronic credit ledger maintained in the common portal
Ans. Sl. No. Electronic cash ledger Electronic credit ledger 1. Can be used for payment of tax, interest, penalty and other amounts Can be used only for payment of output tax 2. Credit to the ledger will be through payment vide Challans Credit to the ledger will be through input tax credit claimed as per GSTR- 02 (inward return) 3. Refund for excess balance in the cash ledger can be applied through GSTR-03 (monthly returns) Refund for excess balance in credit ledger may be refunded only though the forms specified
Ans. No, as per Section 49 (4) of the CGST Act, 2017 the amount available in the electronic credit ledger may be used for making any payment towards output tax payable only. As per Section 2 (82) of the CGST Act, 2017, Output tax in relation to a taxable person, means the CGST/SGST chargeable under this Act on taxable supply of goods and/or services made by him or by his agent and excludes tax payable by him on reverse charge basis. Therefore, input tax credit cannot be used for payment of interest/penalty.
Ans. No, the amount available in the electronic credit ledger may be used for making any payment towards output tax. Further, the definition of output tax u/s 2 (82) specifically excludes tax payable under reverse charge basis. Therefore, input tax credit cannot be used for payment of tax under reverse charge basis.
Ans. The manner/order of utilization of input tax credit is as follows: The amount of IGST credit in the electronic credit ledger can be utilized in the following order; IGST against IGST-CGST-SGST/UTGST Eg: If IGST credit available is `100, IGST liability is `50, CGST liability is `40 and SGST/UTGST liability is `30. The credit will be utilized as follows; In this case the balance of SGST/UTGST may be paid using SGST/UTGST credit or by cash. CGST against CGST-IGST SGST/UTGST against SGST-IGST SGST/UTGST against CGST or CGST against SGST/UTGST Not allowed
Ans. No, every taxable person shall discharge his tax and other dues in the following order: (a) self-assessed tax, and other dues related to returns of previous tax periods; (b) self-assessed tax, and other dues related to return of current tax period; (c) any other amount payable under the Act or the rules made thereunder including the demand determined under section 66 or 67. Note 1:tax dues means the tax payable under this Act and does not include interest, fee and penalty. Note 2:other dues means interest, penalty, fee or any other amount payable under the Act or the rules made thereunder
Ans. No, the Electronic credit ledger be debited with matched, unmatched and also provisional input tax credit.
Ans. Yes, every person who has paid the tax on goods and/or services under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such tax to the recipient of such goods and/or services.
Ans. The commission charged by bank towards payment of taxes online shall be borne by the taxable person making such payment.
Ans. As GSTIN will not be available with the casual taxable person or non-resident taxable person required to pay tax in advance for obtaining registration, they will be provided a temporary identification number using which the person can deposit estimated tax laibility.
Ans. FORM GST PMT-06 contains separate columns for CGST, IGST, UTGST and SGST which shall deposit the amount to the respective account of the government though paid through a single challan, therefore, CGST, IGST, UTGST and SGST can be paid together in a single challan.
Ans. As per Section 37 (7), every registered taxable person, who is required to furnish a return shall pay to the account of the appropriate Government the tax due as per such return not later than the last date on which he is required to furnish such return. Therefore, the due date for payment of tax shall be the due date for filing of returns.
Ans. The challan for payment of tax (FORM GST PMT-06) does not collect details of the period for which the deposit of tax is made and any amount deposited through the challan is debited to the electronic credit ledger, from which the amount can be utilized against any liability.
Ans. The format of challan does not contain column to disclose the HSN code or the accounting code, therefore, it is not relevant for payment of tax.
Ans. There is a specific column in FORM GST PMT-06, wherein the Name of the state will be auto-populated/selected at the time of filling the challan to ensure that SGST is paid to the appropriate state government.
Ans. There are no provisions in the GST Act or rules which prescribes maintenance of minimum balance in the electronic cash ledger.
Ans. Interest is applicable on delayed payment of tax at the rate to be notified (not exceeding 18%) and on undue or excess claim of input tax credit or on undue or excess reduction of output tax liability at the rate to be notified (not exceeding 24%), calculated from the first day on which such tax was due to be paid. Interest is applicable on undue or excess claim of input tax credit as well (Section 50)
Ans. Gross tax payable, if there is default in payment of tax and filing of returns, input tax credit will become ineligible as per Section 16(2) (d) of the CGST Act. Therefore, the taxable person will not be allowed claim set-off of input tax credit for calculation of interest.
Ans. No, provision of Section 50 of the CGST Act has been made applicable to IGST Act vide machinery provision contained in section 20 of IGST Act.
Ans. Interest being compensatory in nature, it is mandatory. Further, Section 50 uses the word shall which also indicates that interest is mandatory.
Ans. Tax deduction at source (TDS) is a mechanism wherein the recipient of goods or services will deduct out of the amount payable to the supplier, an amount at a percentage of value of supply and deposit the same to the account of the Government within the time prescribed.
Ans. The rate of TDS is 1% of the value of supply.
Ans. The Central Government or state Government may mandate the following person to deduct tax at source; (a) a department or establishment of the Central or State Government, or (b) Local authority, or (c) Governmental agencies, or (d) such persons or category of persons as may be notified, by the Central or a State Government on the recommendations of the Council.
Ans. Yes, the taxable person shall deduct the tax irrespective of whether GST is charged in the invoice or not.
Ans. The threshold limit for tax deduction at source is rupees 2.5 Lakh. For the purpose of computation of threshold limit, contract value needs to be considered and not the invoice value or payment amount. However, for the purpose of ascertaining the threshold limit, the value of supply shall be considered as the amount excluding taxes.
Ans. The following are the compliances to be adhered to by the deductor and the due dates for the same: Payment of TDS Issue of Certificate The deductor is liable to pay the amount deducted from the supplier to the Government within 10 of the subsequent month The deductor is liable to issue Certificate to the deductee within 5 days from the date of payment of tax to the Government
Ans. If the deductor fails to issue TDS Certificate within the time prescribed, the deductor shall be liable to pay, by way of a late fee, a sum of one hundred rupees per day from the day after the expiry of the five day period until the failure is rectified, subject to a cap of five thousand rupees.
Ans. No, tax deducted at source by the deductor is available to deductee as credit. Therefore, the deductee will effectively pay tax at only 18% (17% by cash/input tax credit and 1% by utilization of TDS credit).
Ans. Yes, the deductor shall be liable to pay interest in accordance with the provisions of Section 50 (1) for failure to pay the amount deducted as tax.
Chapter IX Refunds
Ans. Yes, the word refund is defined in explanation to Section 54 of the CGST Act. As per the said definition, refund includes refund of tax paid on:, 1. Zero-rated supplies of goods or services or both; or 2. Inputs or input services used in the effecting such zero-rated supplies of goods or services or both; or 3. Supply of goods regarded as deemed exports; or 4. Refund of unutilized input tax credit at the end of any tax period
Ans. Yes, as per Section 54, refund application is to be filed before the expiry of two years from the relevant date.
Ans. The relevant date is different for each situation and the same is provided below: Situation Relevant date Refund is in respect of goods exported outside India (or on inputs/ input services used in such goods) (i) By sea Date on which the ship or the aircraft in which such goods are loaded, (ii) By Air leaves India (iii) By land Date on which such goods pass the frontier (iv) By post Date of despatch of goods by the concerned Post Office to a place outside India Refund in respect of deemed exports Date on which the return relating to such deemed exports is filed exported (or on inputs/ input services used in such services) Where supply of service completed prior to receipt of payment Date of receipt of payment in convertible foreign exchange Where payment for service received in advance Date of issue of invoice Tax becomes refundable as a consequence of: (i) Judgment (ii) Decree (iii) Order (iv) Direction of Appellate Authority, Appellate Tribunal or any Court Date of communication of such judgment, decree, order or direction Refund of unutilized input tax credit End of the financial year in which such claim for refund arises Tax is paid provisionally under this Act or the rules made thereunder Date of adjustment of tax after the final assessment thereof. In case of a person other than the supplier Date of receipt of goods or services by such person In any other case Date of payment of tax
Ans. Yes, the person claiming refund has to make an application in Form GST RFD-01.
Ans. The refund application is to be made before the proper officer of IGST/CGST/SGST.
Ans. Yes, as per provisions of Section 49(6), the balance of cash or credit after payment of tax, interest, penalty, fee or any other amount payment refund can be claimed as per provisions of Section 54. Once the refund is claimed, the amount of credit of CGST/SGST/ IGST (as the case may be) would be reduced to that extent.
Ans. No. Refund can only be claimed under specified circumstances: - (a) zero rated supplies made without payment of tax(b) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies (other than nil rated or fully exempt supplies), except supplies of goods or services or both as may be notified by the Government on the recommendations of the Council Provided further that no refund of unutilised input tax credit shall be allowed in cases where the goods exported out of India are subjected to export duty: Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both avails of drawback in respect of central tax or claims refund of the integrated tax paid on such supplies.
Ans. Yes. UNOs are entitled to claim refund of IGST/CGST/SGST paid on inward supplies of goods and/or services
Ans. Yes, the refund application is required to be made before the expiry of 6 months from the last day of the Quarter in which such supply was received.
Ans. No, only the following registered persons can claim refund of unutilised ITC: 1. Persons undertaking exports (including other zero-rated supplies). Exception: No refund will be allowed on the goods exported out of India where such goods are subjected to export duty [second proviso to Section 54(3)]; 2. Credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on outward supplies (other than cases of nil-rated or fully exempted supplies
Ans. Yes. No refund of input tax credit shall be allowed if the supplier of goods or services avails drawback in respect of CGST or claims refund of IGST on such supplies
Ans. Yes, the following documents are required to be enclosed along with the refund application: 1. Documentary evidence to establish that a refund is due to the applicant (prescribed under Rule 1(2) of the Refund Rules, 2017, and 2. Documentary evidence to prove that incidence of tax and interest had not been passed on to any other person.
Ans. Yes, if the refund claimed is less than 2 lakh rupees, then documentary evidence would not be required to be submitted. However, the applicant may file a declaration based on the documentary or other evidence available with him, certifying that the incidence of such tax and interest is not passed on to any other person.
Ans. Yes, the proper officer may sanction refund of an amount up to ninety percent of the total amount of refund claimed, on a provisional basis in case of exporters. However, certain categories of persons may be notified, to whom provisional sanction of refund cannot be made.
Ans. Yes, the proper officer shall issue the order within sixty days from the date of receipt of refund application
Ans. On receipt of application, where the proper officer is satisfied as regards the refund application filed, he would pass an order sanctioning the refund. In the following situations, the refund sanctioned would be paid to applicant,- 1. refund of tax on goods and/or services exported out of India or on inputs or input services used in the goods and/or services which are exported out of India; 2. refund of unutilized input tax credit under Section 54(3) 3. refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued 4. refund of tax in pursuance of Section 77 5. the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person; or 6. the tax or interest borne by such other class of applicants as the Central or a State Government may, on the recommendation of the Council, by notification, specify In all other cases, the amount sanctioned shall be credited to the Fund.
Ans. Yes, the refund due to the applicant can be adjusted towards tax, interest, penalty or any other amount which the applicant is liable to pay but which remains unpaid under the Act or under any earlier law.
Ans. Yes, refund can be withheld until the applicant has furnished the required return or paid the tax, interest or penalty.
Ans. No. However, it must be noted that if the amount of refund is less than rupees 1,000/-, then no refund can be paid
Ans. Yes there shall be separate application and different procedure for refund of export of goods and export of services.
Ans. Yes, as per Section 55 of the Act, the Central/State Government may, on recommendation of the Council, by notification, specify any other person or class of persons who shall be entitled to claim a refund of taxes paid on the notified supplies of goods or services received by them including specialized agency of the UNO, Consulate or Embassy of foreign countries etc.
Ans. Yes, interest would be paid at a rate not exceeding 6%, if the refund is not sanctioned with 60 days from the receipt of refund application. Interest rate is yet to be prescribed.
Ans. Interest would be computed and paid for the period after expiry of 60 days till the date of actual refund of tax.
Ans. Yes, interest (at a rate not exceeding 9%) would be computed and paid period after expiry of 60 days from the date of application consequent to the order till the date of actual refund of tax.
Ans. Yes, this would be established by the Central/ State Government .
Ans. Yes, an amount of tax under Section 54(5) or 54(6) can be credited to fund account.
Ans. Yes, such amount can be invested by the Central/ State Government or the authorised persons.
Ans. Yes, the fund can be utilised by the Central/ State Government for the welfare of the consumers.
Ans. Yes, the Central/State Government shall maintain, or specify the authority who shall maintain the accounts in this regard.
Chapter X Assessment
Ans. Where the taxable person is unable to determine the value of goods or services or both or determine the rate of tax applicable thereto, he may request the proper officer in writing giving reasons for payment of tax on a provisional basis and the proper officer shall pass an order, within a period not later than ninety days from the date of receipt of such request, allowing payment of tax on provisional basis at such rate or on such value as may be specified by him.
Ans. Yes, if the taxable person opts for self-assessment, he cannot opt for provisional assessment for the same period for same supply. However, he can opt for provisional assessment if he is unable to determine taxable value / tax liability/ (rate of tax) for any subsequent periods.
Ans. Yes. The provisions relating to provisional assessments provides discretionary powers on the proper officer to pass an order allowing the taxable person to remit tax on provisional basis.
Ans. The proper officer may allow for payment of tax on provisional basis subject to execution of bond in prescribed form along with surety / security as the proper officer may deem fit binding the taxable person for differential tax if any.
Ans. The proper officer shall, within a period of six months from the date of communication of the provisional assessment order, pass the final assessment order after taking into account such information as may be required for finalizing the assessment. However, the time limit of six months can be further extended on sufficient cause being shown and for reasons to be recorded in writing in the following manner:(a) by the Joint / Additional Commissioner for a further period of six months; (b) by the Commissioner for such further period not exceeding four years
Ans. The consequences on concluding the provisional assessment by way of passing final assessment order would be as follows: (a) Additional tax liability: In case of short remittance of taxes in terms of final assessment order, the additional tax liability, if any should be remitted along with interest at the rate prescribed under Section 50(1) for delay in remittance of taxes viz., due date of remittance as prescribed under Section 39(7) till the date of actual payment; (b) Excess remittance of tax on provisional basis: In case of excess remittance of taxes in terms of final assessment order, the registered person is entitled to refund of such excess remittance in the manner as provided in Section 54(8) along with interest as provided under Section 56.
Ans. The CGST Act, 2017 empowers proper officer to scrutinise the return and related particulars furnished by the taxable person to verify the correctness of the return and inform him of the discrepancies noticed, if any, in a manner as may be prescribed. In case of any discrepancies, the proper officer should seek explanation from registered person. On receipt of satisfactory explanation, the proper officer is not required to take any further action. In the event, after accepting the discrepancies, no satisfactory explanation is furnished within a period of thirty days or such further extended time or if the taxable person fails to take the corrective measures in the return for the month in which discrepancy is accepted, the proper officer may initiate audit under Section 65 or special audit under Section 66 or inspection, search and seizure under Section 67 or proceed to determine the tax and other dues under Section 73 or Section 74.
Ans. No, the provisions relating to scrutiny assessments do not specify time limit for issuing notice for scrutiny of assessments
Ans. In case, after accepting the discrepancies, no satisfactory explanation is furnishedwithin a period of thirty days or such further period as may be permitted, proper officer may: (a) Initiate Audit of accounts by the tax authorities under Section 65; or (b) Initiate special audit under Section 66; or (c) Initiate inspection, search and seizure under Section 67; or (d) proceed to determine the tax and other dues under Section 73 or Section 74.
Ans. In terms of Section 62(1) of the The CGST Act, 2017, the proper officer is empowered to assess the tax liability on such registered person to the best of his judgment taking into account all the relevant materials which is available or which is gathered and issue an assessment order within a period of five years from the date specified under Section 44 for furnishing of the annual return for the financial year to which the tax not paid relates.
Ans. Yes, if the registered person furnishes a valid return within thirty days from the date of service of best judgment assessment order under Section 62 (1), the said assessment order shall be deemed to have been withdrawn.
Ans. No, registered person will still be liable for interest under Section 45 and late fee under Section 42
Ans. If a taxable person fails to obtain registration even though liable to do so or whose registration has been cancelled under sub section (2) of Section 29 but who was liable to pay tax, the proper officer may assess the tax liability to the best of his judgement after providing opportunity of being heard to such person.
Ans. The proper officer, in relation to assessment of taxes on the unregistered taxable person, shall issue the assessment order within 5 years from the date specified under Section 44 for furnishing of the annual return for the financial year to which the tax not paid relates
Ans. No, the proper officer has to obtain prior permission of Additional/Joint Commissioner to proceed to assess the tax liability
Ans. No, mere change in opinion cannot be treated as evidence for initiation of summary assessment.
Ans. Summary assessment can be initiated on any taxable person. Submission of return u/s 39 and u/s 45 is not prerequisite.
Ans. On an application made within thirty days by taxable person from the date of receipt of order passed summary assessment order the Additional/Joint Commissioner may withdraw such order and follow the procedure laid down in Section 73 or 74 which provides for determination of tax liability on account of tax not paid other than fraud, wilful mis-statement etc., or otherwise respectively.
Ans. The Additional / Joint Commissioner can, on their own motion also withdraw the summary assessment order in the event such order is erroneous and thereafter may follow the procedure laid down in Section 73 or 74 which provides for determination of tax liability on account of tax not paid other than fraud, wilful mis-statement etc., or otherwise respectively
Chapter XI Audit
Ans. The Commissioner of CGST/Commissioner of SGST or any officer authorised by him, by way of a general or a specific order, may undertake audit of any registered person for such period, at such frequency and in such manner as may be prescribed.
Ans. No, Section 65 does not specify any such requirements. Commissioner can initiate audit on any taxable person for such period, at such frequency and in such manner as may be prescribed
Ans. The registered person shall be informed, by way of a notice, sufficiently in advance, not less than fifteen working days, prior to the conduct of audit in the manner prescribed
Ans. The audit under Section 65(1) shall be completed within a period of three months from the date of commencement of audit. The period of completion of audit can be further extended by a period not exceeding six months by the Commissioner for reasons recorded to be in writing.
Ans. During the course of audit, the authorised officer may require the taxable person, (i) to afford him the necessary facility to verify the books of account or other documents as he may require and which may be available at such place, (ii) to furnish such information as he may require and render assistance for timely completion of the audit
Ans. If registered person does not co-operate during the audit, the authorities may initiate action under Section 67.
Ans. Where the audit u/s 65(1) results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer may initiate action under Section 73 or Section 74.
Ans. Special audit can be directed if at any stage of scrutiny, enquiry, investigation or any other proceedings before him, any officer not below the rank of Assistant Commissioner, having regard to the nature and complexity of the case, is of the opinion that the value has not been correctly declared or the credit availed is not within the normal limits, with the prior approval of Commissioner.
Ans. No, special audit can be initiated during the process of scrutiny, enquiry, investigation and not after completion of the same.
Ans. An officer not below the rank of Assistant Commissioner may, with the prior approval of the Commissioner, direct such registered person by a communication in writing to get his records including books of account examined and audited.
Ans. No, only Chartered Accountant or a Cost Accountant as may be nominated by the Commissioner in this behalf will be authorised to conduct audit under Section 66.
Ans. The chartered accountant or cost accountant nominated to conduct the audit under Section 66, shall submit a report, within a period of ninety days from the date of communication in writing by an officer not below the rank of Assistant Commissioner to get the audit of records of such registered person. The said period of ninety days can be extended by another period of ninety days on an application made in this behalf by the registered person or the chartered accountant or cost accountant or for material and sufficient reason.
Ans. The provision of Section 66(1) shall have effect notwithstanding that the accounts of the taxable person have been audited under any other provision of this Act or any other law for the time being in force or otherwise
Ans. The expenses of, and incidental to, the examination and special audit of records under Section 66(1), including the remuneration of such chartered accountant or cost accountant, shall be determined and paid by the Commissioner and that such determination shall be final.
Ans. Where the special audit conducted under Section 66(1) results in detection of tax not paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the proper officer may initiate action under Section 73 or 74, as the case may be.
Ans. No, as per the CGST Act, 2017, CAG does not have any power to call for information for audit.
Chapter XII Inspection, Search, Seizure and Arrest
Ans. The term search, in simple language, denotes an action of a government machinery to go, look through or examine carefully a place, area, person, object etc. in order to find something concealed or for the purpose of discovering evidence of a crime. The search of a person or vehicle or premises etc. can only be done under proper and valid authority of law.
Ans. It is a softer provision than search to enable officers to access any place of business of a taxable person and also any place of business of a person engaged in transporting goods or who is an owner or an operator of a warehouse or godown.
Ans. In Law Lexicon Dictionary, seizure, is defined as the act of taking possession of property by an officer under legal process. It generally implies taking possession forcibly contrary to the wishes of the owner of the property or who has the possession and who was unwilling to part with the possession.
Ans. As per Section 67(1), Inspection can be carried out by any officer of Central tax only upon a written authorization given by a proper officer not below the rank of Joint Commissioner. The proper officer can give such authorization only if he has reasons to believe that the person concerned has (a) suppressed any transaction of supply; (b) suppressed stock of goods in hand; (c) claimed excess input tax credit; (d) contravened any provisions of this Act or rules made thereunder to evade tax; (e) a transporter or a warehouse owner has kept goods which have escaped payment of tax or has kept his accounts or goods in a manner that is likely to cause evasion of tax.
Ans. CGST officer authorized by the proper officer shall have the powers to carry out inspection of any of the following places / premises: (a) any place of business of a taxable person; (b) any place of business of a person engaged in the business of transporting goods; (c) any place of business of an owner or an operator of a warehouse or godown; (d) any other place
Ans. Proper officer not below the rank of Joint Commissioner can authorize himself or any other CGST officer in writing to carry out search and seize goods, documents, books or things. Such authorization can be given only where the proper officer has reasons to believe that any goods liable to confiscation or any documents or books or things, which in his opinion shall be useful for or relevant to any proceedings under this Act, are secreted / hidden in any place
Ans. Reason to believe is to have knowledge of facts which, although not amounting to direct knowledge, would cause a reasonable person, knowing the same facts, to reasonably conclude the same thing. As per Section 26 of the IPC, 1860, A person is said to have reason to believe a thing, if he has sufficient cause to believe that thing but not otherwise. Reason to believe contemplates an objective determination based on intelligent care and evaluation as distinguished from a purely subjective consideration. It has to be and must be that of an honest and reasonable person based on relevant material and circumstances
Ans. Although the officer is not required to state the reasons for such belief before issuing an authorization for search, but he should disclose the material on which his belief was formed. Reason to believe need not be recorded invariably in each case.
Ans. An officer carrying out a search has the power to search for and seize goods (which are liable to confiscation) and documents, books or things (relevant for any proceedings under the Act) from the premises searched. During search, the officer has the power to break open the door of the premises authorized to be searched if access to the same is denied. Similarly, while carrying out search within the premises, he can break open any almirah or box if access to such almirah or box is denied and in which any goods,account, registers or documents are suspected to be concealed. He can also seal the premises if access to it denied.
Ans. Yes. The seized goods can be released on provisional basis upon execution of a bond and furnishing of security of such quantum and in such manner, or on payment of applicable tax, interest and penalty.
Ans. The following are the safeguards provided in section 67 in respect of search and seizure: (a) Seized goods or documents should not be retained beyond the period necessary for their examination. (b) Photocopies of the documents can be taken by the person from whose custody documents are seized. (c) In respect of seized goods, if a notice is not issued within six months of its seizure, such goods shall be returned to the person from whose possession it was seized. This period of six months can be extended on justified grounds up to a further period not exceeding six months. (d) An inventory of seized goods shall be prepared by the seizing officer. (e) Certain notified categories of goods such as perishable, hazardous, depreciation in value of the goods with the passage of time etc. can be disposed of immediately after seizure. (f) Provisions of Code of Criminal Procedure 1973 relating to search and seizure shall apply.
Ans. Section 67(10) prescribes that search must be carried out in accordance with the provisions of Code of Criminal Procedure, 1973
Ans. Yes. The person in charge of a conveyance carrying any consignment of goods of value exceeding a specified amount to carry with him such documents and devices as may be prescribed by the Government. On interception of the conveyance, the person in charge shall produce the prescribed documents and devices for verification and allow inspection of goods by the proper officer
Ans. Generally, cognizable offence means serious category of offences in respect of which a police officer has the authority to make an arrest without a warrant and to start an investigation with or without the permission of a Court.
Ans. Non-cognizable offence means relatively less serious offences in respect of which a police officer does not have the authority to make an arrest without a warrant and an investigation cannot be initiated without the permission of a Court.
Ans. The Commissioner of CGST, by order, can authorize any CGST officer to arrest a person, if he has reasons to believe that such person has committed an offence specified in clause (a) or (b) or (c) or (d) of section 132(1) which is punishable under clause (i) or (ii) of section 132(1) or section 132(2) of the Act. This essentially means that a person can be arrested only when the amount of tax evaded or the amount of input tax credit wrongly availed or utilized or the amount of refund wrongly taken exceeds Rs.2 Crores or where a person has earlier been convicted for an offence under section 132of the Act.
Ans. The following are the safeguards provided for a person who is placed under arrest (a) If a person is arrested for a cognizable offence, he must be informed in writing of the grounds of arrest and he must be produced before a magistrate within 24 hours of his arrest; (b) If a person is arrested for a non-cognizable and bailable offence, the Deputy/ Assistant Commissioner of CGST can release him on bail and he will be subject to the same provisions as an officer in-charge of a police station under section 436 of the Code of Criminal Procedure, 1973; All arrest must be in accordance with the provisions of the Code of Criminal Procedure, 1973 relating to arrest
Ans. Section 70(1) gives powers to the proper officer to call upon any person by issuing a summon to be physically present before him to either give evidence or produce a document or any other thing in any inquiry which an officer is making.
Ans. A person who is issued summon is legally bound to attend either in person or by an authorized representative and he is bound to state the truth before the officer who has issued the summon upon any subject, which is the subject matter of examination and to produce such documents and other things as may be required.
Ans. The proceeding before the proper officer who has issued summons is deemed to be judicial proceedings. If a person does not appear on the date when summoned without any reasonable justification, he can be prosecuted under section 174 of the Indian Penal Code (IPC). If he absconds to avoid service of summons, he can be prosecuted under section 172 of the IPC and in case he does not produce the documents or electronic records required to be produced, he can be prosecuted under section 175 of the IPC. In case he gives false evidence, he can be prosecuted under section 193 of the IPC.
Ans. Yes. An audit party of CGST or a cost accountant or chartered accountant nominated under section 66 have access to any business premises without issuance of a search warrant for the purposes of carrying out any audit, scrutiny, verification and checks as may be necessary to safeguard the interest of revenue. However, a written authorization is to be issued by a proper officer not below the rank of Joint Commissioner. This provision facilitates access to any business premises of a taxable person where books of accounts, documents, computers etc. are kept which are required for audit or verification by an audit party or a nominated cost accountant or chartered accountant.
Ans. Under section 72, the following officers are required to assist proper officers in the implementation this Act. The categories specified in Act are as follows: (a) Police (b) Railways (c) Customs (d) Officers of State/Union Territory engaged in collection of GST(e) Officers of State/Central Government engaged in collection of land revenue (f) All village officers (g) Any other class of officers as may be notified by the Government
Chapter XIII Demands and Recovery
Ans. The proper officer shall serve notice under the provisions of Section 73(1) on the person chargeable with tax for any reason other than: fraud willful misstatement suppression of facts, when he has reasons to believe that tax has not been paid or short paid or erroneously refunded or input tax credit has been wrongly availed or utilized.
Ans. The proper officer shall issue show cause notice at least 3 months prior to the time limit of 3 years for issuance of order i.e. Before completion of 3 years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilized relates to, or within 3 years from the date of erroneous refund, as the case may be.
Ans. Yes. The proper officer may serve a statement under section 73(3) containing details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized where the grounds relied upon by the proper officer for such periods are the same as are mentioned in the earlier notice issued under section 73(1). The service of such statement shall be deemed to be service of show cause notice on the person chargeable with tax.
Ans. Yes. The person chargeable with tax can pay the amount of tax along with interest under section 50 based on his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. On receipt of such information, the proper officer shall not serve any notice or statement with respect to the tax so paid.
Ans. Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the actual amount payable, he shall proceed to issue show cause notice under section 73(1) for such shortfall
Ans. No. Where the person chargeable with tax pays the tax along with interest under section 50 within 30 days of issue of such show cause notice, no penalty shall be payable and all proceedings in respect of such notice except for proceedings under section 132 shall be deemed to be concluded
Ans. Penalty equivalent to 10% of the tax or Rs.10,000/- whichever is higher.
Ans. Yes. Penalty shall be leviable under section 73(11) where the self-assessed tax or any amount collected as tax is not paid within 30 days from the due date of payment of such tax. Quantum of penalty leviable shall be 10% of the tax or Rs.10,000/-, whichever is higher
Ans. The proper officer shall serve notice under the provisions of Section 74(1) on the person chargeable with tax for any reason of : Fraudwillful misstatement suppression of facts when he has reasons to believe that tax has not been paid or short paid or erroneously refunded or input tax credit has been wrongly availed or utilized.
Ans. The proper officer shall issue show cause notice at least 6 months prior to the time limit of 5 years for issuance of order i.e.: Before completion of 5 years from the due date for furnishing of annual return for the financial year to which the tax not paid or short paid or input tax wrongly availed or utilized relates to or within 5 years from the date of erroneous refund, as the case may be.
Ans. Yes. The proper officer may serve a statement under section 74(3) containing details of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized, where the grounds relied upon by the proper officer for such periods are the same as are mentioned in the earlier notice issued under section 74(1), except the ground of fraud or any willful-misstatement or suppression of facts with the intention to evade tax. The service of such statement shall be deemed to be service of show cause notice on the person chargeable with tax.
Ans. Yes. The person chargeable with tax pay the amount of tax along with interest under section 50 and a penalty equivalent to 15% of such tax based on his own ascertainment of such tax or the tax as ascertained by the proper officer and inform the proper officer in writing of such payment. On receipt of such information, the proper officer shall not serve any notice in respect of tax so paid or any penalty payable under the provisions of this Act or rules made thereunder
Ans. Yes. The person chargeable with tax under sub-section (1) or the statement under subsection (3) shall pay the amount of tax along with interest under section 50 and apenalty equivalent to 25% of such tax within 30 days from the issue of notice [Section 74(8)]. On such payment, all proceedings in respect of the said notice except for proceedings under section 132 shall be deemed to be concluded.
Ans. Yes. The person served with order under sub-section (9) shall pay the tax along with interest under section 50 and a penalty equivalent to 50% of such tax within 30 days of the communication of the order [Section 74(11)]. On such payment, all proceedings in respect of the said notice except for proceedings under section 132 shall be deemed to be concluded.
Ans. Where the proper officer is of the opinion that the amount paid under sub-section (5) falls short of the actual amount payable, he shall proceed to issue show cause notice under section 74(1) for such shortfall
Ans. No. Where the person chargeable with tax, pays the tax along with interest under section 50 and applicable penalty within 30 days of notice, all proceedings in respect of such notice except for proceedings under section 132 shall be deemed to be concluded
Ans. Penalty equivalent to 100% of the tax.
Ans. The term Suppression means non-declaration of facts or information which a taxable person is statutorily required to declare in the return, statement, report or any other document furnished under the Act or the rules made thereunder, or failure to furnish any information on being asked for, in writing by the proper officer.
Ans. The penalty proceedings against all other persons under sections 122, 125, 129 and 130 are deemed to be concluded on conclusion of proceedings against the main person liable to pay tax.
Ans. Yes. The period of stay would be excluded for the computing the time limit for issuance of show cause notice or order under Section 73 and Section 74.
Ans. The proper officer shall determine the tax payable by such person deeming as if the Notice were issued under section 73(1)
Ans. The order shall be issued within 2 years from the date of communication of the said direction
Ans. No. An opportunity of personal hearing shall be granted, only if a request is made in writing.
Ans. If sufficient cause is shown by the person chargeable with tax, the proper officer shall grant time and adjourn the hearing on recording reasons in writing. However, the proper officer shall have the power to grant maximum 3 adjournments during the proceedings.
Ans. No. Further, the proper officer shall not have powers to confirm demand on grounds other than the grounds specified in the Notice.
Ans. The adjudication proceedings shall be deemed to be concluded if the order is not issued within the limitation period of 3 years under section 73(10) or 5 years under section 74, as the case may be.
Q27. How to compute period of limitation referred to in section 73(10) or section 74(10) where an issue on which the Appellate Authority or the Appellate Tribunal or the HighCourt has given its decision which is prejudicial to the interest of the revenue in some other proceedings and an appeal to the Appellate Tribunal or the High Court or the Supreme Court against such decision is pending?
Ans. While computing the period of limitation referred to in section 73(10) or section 74(10), the period spent between the date of the decision of the First Appellate Authority / Appellate Tribunal / High Court and the date of the decision of the Appellate Tribunal / the High Court / the Supreme Court as the case may be, shall be excluded.
Ans. No. Where any penalty is imposed under section 73 or 74, no penalty for the same act or omission shall be imposed on the same person under any other provisions of the Act.
Ans. No, proper officer shall not issue any notice for such unpaid tax or unpaid interest on tax. This shall be recovered from such person in accordance with provisions of Section 79.
Ans. Every person who has collected from any other person any amount representing as tax under this Act shall forthwith pay the said amount to Government, regardless of whether the supplies in respect of which such amount was collected are taxable or not.
Ans. The proper officer shall issue notice requiring him to show cause as to why the amount so collected as tax be paid to the Government and why a penalty equivalent to the amount so collected be imposed on him under the provisions of the Act. The proper officer shall adjudicate the matter and issue order within one year from the date of issue of the show cause notice..
Ans. Yes. In addition to the amount payable by him, the person is required to pay interest under Section 50 on the same from the date of collection of the amount till the date such amount is paid to the Government.
Ans. No. Notice can be issued on detection of such cases without any time limit. Once show cause notice is issued, the proper officer shall pass the order within 1 year from the date of issue of such notice.
Ans. Yes. The person who has borne the incidence of the amount may apply for the refund of the same in accordance with the provisions of section 54.
Ans. Refund of CGST and SGST or, as the case may be, CGST and UTGST shall be granted in such manner and subject to such conditions as may be prescribed.
Ans. Refund of IGST (in IGST Act) shall be granted in such manner and subject to such conditions as may be prescribed.
Ans. No. A registered person shall not be required to pay any interest on the amount of CGST and SGST or CGST and UTGST payable, as the case may be.
Ans. No. A registered person shall not be required to pay any interest on the amount of IGST payable.
Ans. Yes. The demand shall be payable by the taxable person within a period of 3 months from the date of service of the order.
Ans. The proper officer shall initiate recovery proceedings if the tax demand is not paid within 3 months from the date of service of the order
Ans. Yes. If it is expedient in the interest of the revenue, the proper officer, after recording reasons in writing, may require taxable person to make such payment within shorter period as may be prescribed by him.
Ans. The following options are available to the proper officer: (a) The proper officer may deduct or may require any other specified officer to deduct the amount so payable from any money owing to such person - Refund adjustment. (b) The proper officer may recover or may require any other specified officer to recover the amount so payable by detaining and selling any goods belonging to such person Detaining and selling of goods. (c) The proper officer may, by a notice in writing, require any other person from whom money is due or may become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the credit of the Central or a State Government Recovery from third parties. (d) The proper officer may, on an authorization by the competent authority, distrain any movable or immovable property belonging to or under the control of such person, and detain the same until the amount payable is paid; if the due remains unpaid for a period of thirty days after any such distress, he may cause the said property to be sold and with the proceeds of such sale, may satisfy the amount payable and the costs including cost of sale remaining unpaid and pay the surplus amount, if any, to such person Detaining / attachment of movable or immovable property and adjustment of tax dues from sale proceeds. (e) The proper officer may prepare a certificate signed by him specifying the amountdue from such person and send it to the Collector of the district in which such person owns any property or resides or carries on his business and on receipt of such certificate, the Collector shall proceed to recover from such person the amount specified as if it were an arrear of land revenue Recovery of tax dues as arrears of land revenue.
Ans. Yes. Proper officer may issue notice to post office, banking company or any insurer and they are required to comply with the same without insisting on production of any passbook, deposit receipt, policy or any other document.
Ans. Yes. During the course of recovery of tax arrears, the proper officer of the State tax or Union Territory tax may recover such amount from a taxable person as if were an arrear of State tax or Union Territory tax and credit the amount so recovered to the account of the Government.
Ans. Yes. During the course of recovery of tax arrears, the proper officer of the Central tax may recover such amount from a taxable person as if were an arrear of Central tax and credit the amount so recovered to the account of the Government
Ans. The arrears of tax recovered by the proper officer shall be distributed to the respective Governments in proportion to the amount due to each such Government
Ans. Commissioner may either extend the time limit for payment of tax or allow the taxpayer to make the payment of tax in installments.
Ans. Yes. On receipt of application filed by a taxable person, the Commissioner, after recording reasons in writing, may extend the time for payment or allow payment of any amount due under the Act in monthly instalments not exceeding twenty-four, subject topayment of interest under section 50 with such restrictions and conditions as may be prescribed.
Ans. No. The proper officer shall have the power to allow payment of any amount due under this Act in instalments on tax other than the self-assessed tax.
Ans. Where there is default in payment of any one instalment on its due date by the taxable person, the whole outstanding balance payable on such date shall become due and payable forthwith, without any further notice. The proper officer can initiate recovery of dues.
Q52. What happens if a person after any amount has become due from him, creates a charge on or parts with the property belonging to him or in his possession by way of sale, mortgage, or any other mode of transfer whatsoever of any of his properties in favour of any other person with the intention of defrauding the Government revenue?
Ans. Such charge or transfer shall be void against any claim in respect of any tax or any other sum payable by the said person. However, such charge or transfer shall not be void, if it is made for adequate consideration and without notice of the pendency of such proceedings under the Act, or without notice of such tax or other sum payable by the said person, or with the previous permission of the proper officer.
Ans. Yes. Notwithstanding anything to the contrary contained in any law for the time being force, first charge shall be on (a) the property of taxable person in respect of any amount payable by such taxable person, or (b) the property of any other person on account of tax, interest or penalty which he is liable to pay to the Government.
Ans. Yes. During the pendency of any proceedings under section 62, 63, 64, 67, 73 or 74, the Commissioner may by order in writing attach any property including bank account belonging to a taxable person provisionally for the purpose of protecting the interest of the Government revenue. However, every such provisional attachment order shall cease to have effect after the expiry of 1 year from the date of such order.
Ans. Yes. Every provisional attachment order shall cease to have effect after the expiry of one year from the date of such order.
Ans. The notice of demand is required to be served only in respect of the enhanced dues. In so far as the amount already confirmed prior to disposal of appeal/revision, the recovery proceedings may be continued from the stage at which such proceedings stood immediately before such disposal.
Ans. The fresh notice of demand is not required to be served in respect of the reduced dues. The Commissioner shall give an intimation of such reduction to the taxable person and the appropriate authority with whom the recovery proceeding is pending. The recovery proceedings already initiated prior to the disposal of such appeal/revision may be continued in relation to the amount so reduced from the stage at which such proceedings stood immediately before such disposal.
Chapter XIV Liability to pay in certain cases
Ans. Yes, the transferor and the transferee shall be jointly and severally liable to tax, interest and penalty which was due for the period prior to the date of transfer. Such tax liability, interest and penalty may be determined either prior to the date of transfer or thereafter.
Ans. No. The transferor of business is liable to pay tax / interest / penalties arisen (whether determined prior to transfer or post transfer) up to the date of transfer of business.
Ans. Yes. When an agent supplies or receives any taxable goods on behalf of the principal both agent and principal are jointly and severally liable in respect of tax payable on such goods
Ans. No. Both agent and principal are jointly and severally liable to pay the tax on such transactions.
Ans. Yes. In terms of Section 87(1) of the CGST Act, 2017, the supplies between the companies inter-se for the period starting effective date and the date of order of the court is liable to tax and supply and receipt shall be included in the turnover of supply or receipt of the respective companies.
Ans. Yes, for the purposes of this Act, the said two or more companies shall be treated as distinct companies for the period up to the date of the said order and the registration certificates of the said companies shall be cancelled with effect from the date of the said order
Ans. The receiver of assets / liquidator shall within 30 days from the date of appointment intimate the Commissioner of his appointment. Thereafter, the Commissioner may provide the details that the Company may be liable to pay tax, interest and penalty.
Ans. Every director of the private company shall be jointly and severally be liable to pay tax, interest and penalty.
Ans. Yes. The director of a private limited company shall be jointly and severally liable for the payment of such tax unless he proves that the non-recovery cannot be attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the affairs of the company.
Ans. No. If a private limited company is converted into a public limited company, then the provisions of this section does not apply. However, any other personal penalty could be levied on the Director.
Ans. Yes. Retiring partner shall be liable to pay tax, interest and penalty upto the date of his retirement whether determined prior to his retirement or otherwise.
Ans. No. The Retiring partner is not liable for the transactions taken place after his retirement provided he intimates to the Commissioner by a notice in writing of his retirement within 30 days of the retirement.
Ans. Yes. The Guardian, or the Trustee, or the Agent as the case may be who is conducting the business for the benefit of minor or incapacitated person is liable for payment of tax dues.
Ans. Yes. The Court of Wards is liable for the payment of tax dues in respect of the transactions entered by the estate as if they were conducting the business themselves.
Ans. In terms of Section 93(1) of the CGST Act, 2017, after the death of the taxable person, the tax, interest and penalty remaining unpaid either determined before the death or otherwise shall be recovered in the following manner: 1. if a business carried on by the person is continued after his death by his legal representative or any other person, such legal representative or other person, shall be liable to pay tax, interest or penalty due from such person under this Act; and 2. if the business carried on by the person is discontinued, whether before or after his death, his legal representative shall be liable to pay, out of the estate of the deceased, to the extent to which the estate is capable of meeting the charge, the tax, interest or penalty due from such person under this Act.
Ans. In case where the property is partitioned amongst, the member shall be jointly and severally liable to pay tax, interest and penalty pertaining to the period prior to the date of partition shall be recovered jointly and severally from all the members. Similarly, all the partners of the partnership firm shall be jointly and severally liable to tax for the unpaid dues of tax, interest and penalty for the period prior to the date of dissolution. Such unpaid amount of tax, interest and penalty is determined either prior to partition / dissolution or otherwise.
Ans. Where a taxable person is a firm or an association of persons or a Hindu Undivided Family and such firm, association or family has discontinued business 1. the tax, interest or penalty payable under this Act by such firm, association or family up to the date of such discontinuance may be determined as if no such discontinuance had taken place; and 2. every person who, at the time of such discontinuance, was a partner of such firm, or a member of such association or family, shall, notwithstanding such discontinuance, jointly and severally, be liable for the payment of tax and interest determined and penalty imposed and payable by such firm, association or family, whether such tax and interest has been determined or penalty imposed prior to or after such discontinuance and subject as aforesaid, the provisions of this Act shall, so far as may be, apply as if every such person or partner or member were himself a taxable person.
Ans. The liability to pay tax, interest and penalty of the firm in case of re-constitution shall be recovered in the following manner: 1. Up to the date of reconstitution, all the partners of the firm prior to the date of reconstitution 2. After the date of reconstitution, all partners as they exist after reconstitution