GST

THE CENTRAL GOODS AND SERVICES TAX BILL, 2017
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ARRANGEMENT OF CLAUSES
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CHAPTER I
PRELIMINARY
CLAUSES
1. Short title, extent and commencement.
2. Definitions.
CHAPTER II
ADMINISTRATION
3. Officers under this Act.
4. Appointment of officers.
5. Powers of officers.
6. Authorisation of officers of State tax or Union territory tax as proper officer in
certain circumstances.
CHAPTER III
LEVY AND COLLECTION OF TAX
7. Scope of supply.
8. Tax liability on composite and mixed supplies.
9. Levy and collection.
10. Composition levy.
11. Power to grant exemption from tax.
CHAPTER IV
TIME AND VALUE OF SUPPLY
12. Time of supply of goods.
13. Time of supply of services.
14. Change in rate of tax in respect of supply of goods or services.
15. Value of taxable supply.
CHAPTER V
INPUT TAX CREDIT
16. Eligibility and conditions for taking input tax credit.
17. Apportionment of credit and blocked credits.
AS INTRODUCED IN LOK SABHA
Bill No. 57 of 2017
(ii)
18. Availability of credit in special circumstances.
19. Taking input tax credit in respect of inputs and capital goods sent for job-work.
20. Manner of distribution of credit by Input Service Distributor.
21. Manner of recovery of credit distributed in excess.
CHAPTER VI
REGISTRATION
22. Persons liable for registration.
23. Persons not liable for registration.
24. Compulsory registration in certain cases.
25. Procedure for registration.
26. Deemed registration.
27. Special provisions relating to casual taxable person and non-resident taxable
person.
28. Amendment of registration.
29. Cancellation of registration.
30. Revocation of cancellation of registration.
CHAPTER VII
TAX INVOICE, CREDIT AND DEBIT NOTES
31. Tax invoice.
32. Prohibition of unauthorised collection of tax.
33. Amount of tax to be indicated in tax invoice and other documents.
34. Credit and debit notes.
CHAPTER VIII
ACCOUNTS AND RECORDS
35. Accounts and other records.
36. Period of retention of accounts.
CHAPTER IX
RETURNS
37. Furnishing details of outward supplies.
38. Furnishing details of inward supplies.
39. Furnishing of returns.
40. First return.
41. Claim of input tax credit and provisional acceptance thereof.
42. Matching, reversal and reclaim of input tax credit.
43. Matching, reversal and reclaim of reduction in output tax liability.
44. Annual return.
45. Final return.
CLAUSES
(iii)
46. Notice to return defaulters.
47. Levy of late fee.
48. Goods and services tax practitioners.
CHAPTER X
PAYMENT OF TAX
49. Payment of tax, interest, penalty and other amounts.
50. Interest on delayed payment of tax.
51. Tax deduction at source.
52. Collection of tax at source.
53. Transfer of input tax credit.
CHAPTER XI
REFUNDS
54. Refund of tax.
55. Refund in certain cases.
56. Interest on delayed refunds.
57. Consumer Welfare Fund.
58. Utilisation of Fund.
CHAPTER XII
ASSESSMENT
59. Self-assessment.
60. Provisional assessment.
61. Scrutiny of returns.
62. Assessment of non-filers of returns.
63. Assessment of unregistered persons.
64. Summary assessment in certain special cases.
CHAPTER XIII
AUDIT
65. Audit by tax authorities.
66. Special audit.
CHAPTER XIV
INSPECTION, SEARCH, SEIZURE AND ARREST
67. Power of inspection, search and seizure.
68. Inspection of goods in movement.
69. Power to arrest.
70. Power to summon persons to give evidence and produce documents.
71. Access to business premises.
CLAUSES
(iv)
72. Officers to assist proper officers.
CHAPTER XV
DEMANDS AND RECOVERY
73. Determination of tax not paid or short paid or erroneously refunded or input tax
credit wrongly availed or utilised for any reason other than fraud or any wilful
misstatement or suppression of facts.
74. Determination of tax not paid or short paid or erroneously refunded or input tax
credit wrongly availed or utilised by reason of fraud or any wilful misstatement or
suppression of facts.
75. General provisions relating to determination of tax.
76. Tax collected but not paid to Government.
77. Tax wrongfully collected and paid to Central Government or State Government.
78. Initiation of recovery proceedings.
79. Recovery of tax.
80. Payment of tax and other amount in instalments.
81. Transfer of property to be void in certain cases.
82. Tax to be first charge on property.
83. Provisional attachment to protect revenue in certain cases.
84. Continuation and validation of certain recovery proceedings.
CHAPTER XVI
LIABILITY TO PAY IN CERTAIN CASES
85. Liability in case of transfer of business.
86. Liability of agent and principal.
87. Liability in case of amalgamation or merger of companies.
88. Liability in case of company in liquidation.
89. Liability of directors of private company.
90. Liability of partners of firm to pay tax.
91. Liability of guardians, trustees, etc.
92. Liability of Court of Wards, etc.
93. Special provisions regarding liability to pay tax, interest or penalty in certain
cases.
94. Liability in other cases.
CHAPTER XVII
ADVANCE RULING
95. Definitions.
96. Authority for advance Ruling.
97. Application for advance ruling.
98. Procedure on receipt of application.
CLAUSES
(v)
99. Appellate Authority for Advance Ruling.
100. Appeal to Appellate Authority.
101. Orders of Appellate Authority.
102. Rectification of advance ruling.
103. Applicability of advance ruling.
104. Advance ruling to be void in certain circumstances.
105. Powers of Authority and Appellate Authority.
106. Procedure of Authority and Appellate Authority.
CHAPTER XVIII
APPEALS AND REVISION
107. Appeals to Appellate Authority.
108. Powers of Revisional Authority.
109. Constitution of Appellate Tribunal and Benches thereof.
110. President and Members of Appellate Tribunal, their qualification, appointment,
conditions of service, etc.
111. Procedure before Appellate Tribunal.
112. Appeals to Appellate Tribunal.
113. Orders of Appellate Tribunal.
114. Financial and administrative powers of President.
115. Interest on refund of amount paid for admission of appeal.
116. Appearance by authorised representative.
117. Appeal to High Court.
118. Appeal to Supreme Court.
119. Sums due to be paid notwithstanding appeal, etc.
120. Appeal not to be filed in certain cases.
121. Non appealable decisions and orders.
CHAPTER XIX
OFFENCES AND PENALTIES
122. Penalty for certain offences.
123. Penalty for failure to furnish information return.
124. Fine for failure to furnish statistics.
125. General penalty.
126. General disciplines related to penalty.
127. Power to impose penalty in certain cases.
128. Power to waive penalty or fee or both.
129. Detention, seizure and release of goods and conveyances in transit.
CLAUSES
(vi)
130. Confiscation of goods or conveyances and levy of penalty.
131. Confiscation or penalty not to interfere with other punishments.
132. Punishment for certain offences.
133. Liability of officers and certain other persons.
134. Cognizance of offences.
135. Presumption of culpable mental state.
136. Relevancy of statements under certain circumstances.
137. Offences by companies.
138. Compounding of offences.
CHAPTER XX
TRANSITIONAL PROVISIONS
139. Migration of existing taxpayers.
140. Transitional arrangements for input tax credit.
141. Transitional provisions relating to job work.
142. Miscellaneous transitional provisions.
CHAPTER XXI
MISCELLANEOUS
143. Job work procedure.
144. Presumption as to documents in certain cases.
145. Admissibility of micro films, facsimile copies of documents and computer printouts
as documents and as evidence.
146. Common Portal.
147. Deemed exports.
148. Special procedure for certain processes.
149. Goods and services tax compliance rating.
150. Obligation to furnish information return.
151. Power to collect statistics.
152. Bar on disclosure of information.
153. Taking assistance from an expert.
154. Power to take samples.
155. Burden of proof.
156. Persons deemed to be public servants.
157. Protection of action taken under this Act.
158. Disclosure of information by a public servant.
159. Publication of information in respect of persons in certain cases.
160. Assessment proceedings, etc., not to be invalid on certain grounds.
CLAUSES
(vii)
161. Rectification of errors apparent on the face of record.
162. Bar on jurisdiction of civil courts.
163. Levy of fee.
164. Power of Government to make rules.
165. Power to make regulations.
166. Laying of rules, regulations and notifications.
167. Delegation of powers.
168. Power to issue instructions or directions.
169. Service of notice in certain circumstances.
170. Rounding off of tax, etc.
171. Anti-profiteering measure.
172. Removal of difficulties.
173. Amendment of Act 32 of 1994.
174. Repeal and saving.
SCHEDULE I.
SCHEDULE II.
SCHEDULE III.
CLAUSES
THE CENTRAL GOODS AND SERVICES TAX BILL, 2017
A
BILL
to make a provision for levy and collection of tax on intra-State supply of goods or services
or both by the Central Government and the matters connected therewith or incidental
thereto.
BE it enacted by Parliament in the Sixty-eighth Year of the Republic of India as follows:—
CHAPTER I
PRELIMINARY
1. (1) This Act may be called the Central Goods and Services Tax Act, 2017.
(2) It extends to the whole of India except the State of Jammu and Kashmir.
(3) It shall come into force on such date as the Central Government may, by notification
in the Official Gazette, appoint:
Short title,
extent and
commencement.
AS INTRODUCED IN LOK SABHA
Bill No. 57 of 2017
5
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Provided that different dates may be appointed for different provisions of this Act and
any reference in any such provision to the commencement of this Act shall be construed as
a reference to the coming into force of that provision.
2. In this Act, unless the context otherwise requires,––
(1) “actionable claim” shall have the same meaning as assigned to it in section 3
of the Transfer of Property Act, 1882;
(2) “address of delivery” means the address of the recipient of goods or services
or both indicated on the tax invoice issued by a registered person for delivery of such
goods or services or both;
(3) “address on record” means the address of the recipient as available in the
records of the supplier;
(4) “adjudicating authority” means any authority, appointed or authorised to pass
any order or decision under this Act, but does not include the Central Board of Excise
and Customs, the Revisional Authority, the Authority for Advance Ruling, the Appellate
Authority for Advance Ruling, the Appellate Authority and the Appellate Tribunal;
(5) “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;
(6) “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;
(7) “agriculturist” means an individual or a Hindu Undivided Family who
undertakes cultivation of land—
(a) by own labour, or
(b) by the labour of family, or
(c) by servants on wages payable in cash or kind or by hired labour under
personal supervision or the personal supervision of any member of the family;
(8) “Appellate Authority” means an authority appointed or authorised to hear
appeals as referred to in section 107;
(9) “Appellate Tribunal” means the Goods and Services Tax Appellate Tribunal
constituted under section 109;
(10) “appointed day” means the date on which the provisions of this Act shall
come into force;
(11) “assessment” means determination of tax liability under this Act and includes
self-assessment, re-assessment, provisional assessment, summary assessment and
best judgment assessment;
(12) “associated enterprises” shall have the same meaning as assigned to it in
section 92A of the Income-tax Act, 1961;
(13) “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;
(14) “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;
4 of 1882.
Definitions.
43 of 1961.
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(15) “authorised representative” means the representative as referred to in
section 116;
(16) “Board” means the Central Board of Excise and Customs constituted under
the Central Boards of Revenue Act, 1963;
(17) “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 ; and
(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;
(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––
(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;
(19) “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;
(20) “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;
(21) “central tax” means the central goods and services tax levied under
section 9;
54 of 1963.
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(22) “cess” shall have the same meaning as assigned to it in the Goods and
Services Tax (Compensation to States) Act;
(23) “chartered accountant” means a chartered accountant as defined in
clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949;
(24) “Commissioner” means the Commissioner of central tax and includes
the Principal Commissioner of central tax appointed under section 3 and the
Commissioner of integrated tax appointed under the Integrated Goods and Services
Tax Act;
(25) “Commissioner in the Board” means the Commissioner referred to in
section 168;
(26) “common portal” means the common goods and services tax electronic
portal referred to in section 146;
(27) “common working days” in respect of a State or Union territory shall
mean such days in succession which are not declared as gazetted holidays by the
Central Government or the concerned State or Union territory Government;
(28) “company secretary” means a company secretary as defined in clause
(c) of sub-section (1) of section 2 of the Company Secretaries Act, 1980;
(29) “competent authority” means such authority as may be notified by the
Government;
(30) “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.
(31) “consideration” in relation to the supply of goods or services or both
includes––
(a) 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;
(b) 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;
(32) “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;
38 of 1949.
56 of 1980.
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(33) “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;
(34) “conveyance” includes a vessel, an aircraft and a vehicle;
(35) “cost accountant” means a cost accountant as defined in clause (c) of
sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959;
(36) “Council” means the Goods and Services Tax Council established under
article 279A of the Constitution;
(37) “credit note” means a document issued by a registered person under
sub-section (1) of section 34;
(38) “debit note” means a document issued by a registered person under
sub-section (3) of section 34;
(39) “deemed exports” means such supplies of goods as may be notified under
section 147;
(40) “designated authority” means such authority as may be notified by the
Board;
(41) “document” includes written or printed record of any sort and electronic
record as defined in clause (t) of section 2 of the Information Technology Act, 2000;
(42) “drawback” in relation to any goods manufactured in India and exported,
means the rebate of duty, tax or cess chargeable on any imported inputs or on any
domestic inputs or input services used in the manufacture of such goods;
(43) “electronic cash ledger” means the electronic cash ledger referred to in subsection
(1) of section 49;
(44) “electronic commerce” means the supply of goods or services or both,
including digital products over digital or electronic network;
(45) “electronic commerce operator” means any person who owns, operates or
manages digital or electronic facility or platform for electronic commerce;
(46) “electronic credit ledger” means the electronic credit ledger referred to in
sub-section (2) of section 49;
(47) “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;
(48) “existing law” means any law, notification, order, rule or regulation relating
to levy and collection of duty or tax on goods or services or both passed or made
before the commencement of this Act by Parliament or any Authority or person having
the power to make such law, notification, order, rule or regulation;
(49) “family” means,––
(i) the spouse and children of the person, and
(ii) the parents, grand-parents, brothers and sisters of the person if they
are wholly or mainly dependent on the said person;
(50) “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;
23 of 1959.
21 of 2000.
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(51) “Fund” means the Consumer Welfare Fund established under section 57;
(52) “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;
(53) “Government” means the Central Government;
(54) “Goods and Services Tax (Compensation to States) Act” means the Goods
and Services Tax (Compensation to States) Act, 2017;
(55) “goods and services tax practitioner” means any person who has been
approved under section 48 to act as such practitioner;
(56) “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, and the air space above its territory and territorial waters;
(57) “Integrated Goods and Services Tax Act” means the Integrated Goods and
Services Tax Act, 2017;
(58) “integrated tax” means the integrated goods and services tax levied under
the Integrated Goods and Services Tax Act;
(59) “input” means any goods other than capital goods used or intended to be
used by a supplier in the course or furtherance of business;
(60) “input service” means any service used or intended to be used by a supplier
in the course or furtherance of business;
(61) “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;
(62) “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—
(a) the integrated goods and services tax charged on import of goods;
(b) the tax payable under the provisions of sub-sections (3) and (4) of section 9;
(c) the tax payable under the provisions of sub-section (3) and (4) of section 5 of
the Integrated Goods and Services Tax Act;
(d) the tax payable under the provisions of sub-section (3) and sub-section (4)
of section 9 of the respective State Goods and Services Tax Act; or
(e) the tax payable under the provisions of sub-section (3) and sub-section (4)
of section 7 of the Union Territory Goods and Services Tax Act,
but does not include the tax paid under the composition levy;
(63) “input tax credit” means the credit of input tax;
(64) “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;
(65) “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;
(66) “invoice” or “tax invoice” means the tax invoice referred to in section 31;
(67) “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;
80 of 1976.
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(68) “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;
(69) “local authority” means––
(a) a “Panchayat” as defined in clause (d) of article 243 of the Constitution;
(b) a “Municipality” as defined in clause (e) of article 243P of
the Constitution;
(c) 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;
(d) a Cantonment Board as defined in section 3 of the Cantonments
Act 2006;
(e) a Regional Council or a District Council constituted under the Sixth
Schedule to the Constitution;
(f) a Development Board constituted under article 371 of the Constitution;
or
(g) a Regional Council constituted under article 371A of the Constitution;
(70) “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;
(71) “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 provisions of the supply; and
(d) in absence of such places, the location of the usual place of residence
of the supplier;
(72) “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;
(73) “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;
(74) “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
41 of 2006.
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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.
(75) “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;
(76) “motor vehicle” shall have the same meaning as assigned to it in clause (28)
of section 2 of the Motor Vehicles Act, 1988;
(77) “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;
(78) “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;
(79) “non-taxable territory” means the territory which is outside the taxable
territory;
(80) “notification” means a notification published in the Official Gazette and the
expressions “notify” and “notified” shall be construed accordingly;
(81) “other territory” includes territories other than those comprising in a State
and those referred to in sub-clauses (a) to (e) of clause (114) ;
(82) “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;
(83) “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;
(84) “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;
59 of 1988.
18 of 2013.
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(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;
(85) “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;
(86) “place of supply” means the place of supply as referred to in Chapter V of
the Integrated Goods and Services Tax Act;
(87) “prescribed” means prescribed by rules made under this Act on the
recommendations of the Council;
(88) “principal” means a person on whose behalf an agent carries on the business
of supply or receipt of goods or services or both;
(89) “principal place of business” means the place of business specified as the
principal place of business in the certificate of registration;
(90) “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;
(91) “proper officer” in relation to any function to be performed under this Act,
means the Commissioner or the officer of the central tax who is assigned that function
by the Commissioner in the Board;
(92) “quarter” shall mean a period comprising three consecutive calendar months,
ending on the last day of March, June, September and December of a calendar year;
(93) “recipient” of supply of goods or services or both, means—
(a) where a consideration is payable for the supply of goods or services or
both, the person who is liable to pay that consideration;
(b) 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
(c) where no consideration is payable for the supply of a service, the
person to whom the service is rendered,
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;
(94) “registered person” means a person who is registered under section 25 but
does not include a person having a Unique Identity Number;
(95) “regulations” means the regulations made by the Board under this Act on
the recommendations of the Council;
21 of 1860.
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(96) “removal’’ in relation to goods, means—
(a) despatch of the goods for delivery by the supplier thereof or by any
other person acting on behalf of such supplier; or
(b) collection of the goods by the recipient thereof or by any other person
acting on behalf of such recipient;
(97) “return” means any return prescribed or otherwise required to be furnished
by or under this Act or the rules made thereunder;
(98) “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 subsection
(4) of section 5 of the Integrated Goods and Services Tax Act;
(99) “Revisional Authority” means an authority appointed or authorised for
revision of decision or orders as referred to in section 108;
(100) “Schedule” means a Schedule appended to this Act;
(101) “securities” shall have the same meaning as assigned to it in clause (h) of
section 2 of the Securities Contracts (Regulation) Act, 1956 ;
(102) “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;
(103) “State” includes a Union territory with Legislature;
(104) “State tax” means the tax levied under any State Goods and Services Tax
Act;
(105) “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;
(106) “tax period” means the period for which the return is required to be furnished;
(107) “taxable person” means a person who is registered or liable to be registered
under section 22 or section 24;
(108) “taxable supply” means a supply of goods or services or both which is
leviable to tax under this Act;
(109) “taxable territory” means the territory to which the provisions of this Act
apply;
(110) “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;
(111) “the State Goods and Services Tax Act” means the respective State Goods
and Services Tax Act, 2017;
(112) “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
42 of 1956.
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territory by the said taxable person but excludes central tax, State tax, Union territory
tax, integrated tax and cess;
(113) “usual place of residence” means––
(a) in case of an individual, the place where he ordinarily resides;
(b) in other cases, the place where the person is incorporated or otherwise
legally constituted;
(114) “Union territory” means the territory of—
(a) the Andaman and Nicobar Islands;
(b) Lakshadweep;
(c) Dadra and Nagar Haveli;
(d) Daman and Diu
(e) Chandigarh; and
(f) 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;
(115) “Union territory tax” means the Union territory goods and services tax
levied under the Union Territory Goods and Services Tax Act;
(116) “Union Territory Goods and Services Tax Act” means the Union Territory
Goods and Services Tax Act, 2017;
(117) “valid return” means a return furnished under sub-section (1) of section 39
on which self-assessed tax has been paid in full;
(118) “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;
(119) “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;
(120) 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;
(121) 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.
CHAPTER II
ADMINISTRATION
3. The Government shall, by notification, appoint the following classes of officers for
the purposes of this Act, namely:––
(a) Principal Chief Commissioners of Central Tax or Principal Directors General of
Central Tax,
(b) Chief Commissioners of Central Tax or Directors General of Central Tax,
(c) Principal Commissioners of Central Tax or Principal Additional Directors
General of Central Tax,
(d) Commissioners of Central Tax or Additional Directors General of Central Tax,
Officers under
this Act.
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(e) Additional Commissioners of Central Tax or Additional Directors of
Central Tax,
(f) Joint Commissioners of Central Tax or Joint Directors of Central Tax,
(g) Deputy Commissioners of Central Tax or Deputy Directors of Central Tax,
(h) Assistant Commissioners of Central Tax or Assistant Directors of
Central Tax, and
(i) any other class of officers as it may deem fit:
Provided that the officers appointed under the Central Excise Act, 1944 shall be deemed
to be the officers appointed under the provisions of this Act.
4. (1) The Board may, in addition to the officers as may be notified by the Government
under section 3, appoint such persons as it may think fit to be the officers under this Act.
(2) Without prejudice to the provisions of sub-section (1), the Board may, by
order, authorise any officer referred to in clauses (a) to (h) of section 3 to appoint officers of
central tax below the rank of Assistant Commissioner of central tax for the administration of
this Act.
5. (1) Subject to such conditions and limitations as the Board may impose, an officer of
central tax may exercise the powers and discharge the duties conferred or imposed on him
under this Act.
(2) An officer of central tax may exercise the powers and discharge the duties conferred
or imposed under this Act on any other officer of central tax who is subordinate to him.
(3) The Commissioner may, subject to such conditions and limitations as may be
specified in this behalf by him, delegate his powers to any other officer who is subordinate
to him.
(4) Notwithstanding anything contained in this section, an Appellate Authority shall
not exercise the powers and discharge the duties conferred or imposed on any other officer
of central tax.
6. (1) Without prejudice to the provisions of this Act, the officers appointed under
the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act
are authorised to be the proper officers for the purposes of this Act, subject to such
conditions as the Government shall, on the recommendations of the Council, by notification,
specify.
(2) Subject to the conditions specified in the notification issued under
sub-section (1),––
(a) where any proper officer issues an order under this Act, he shall also issue an
order under the State Goods and Services Tax Act or the Union Territory Goods and
Services Tax Act, as authorised by the State Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act, as the case may be, under intimation to the
jurisdictional officer of State tax or Union territory tax;
(b) where a proper officer under the State Goods and Services Tax Act or the
Union Territory Goods and Services Tax Act has initiated any proceedings on a subject
matter, no proceedings shall be initiated by the proper officer under this Act on the
same subject matter.
(3) Any proceedings for rectification, appeal and revision, wherever applicable, of any
order passed by an officer appointed under this Act shall not lie before an officer appointed
under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax
Act.
1 of 1944.
Appointment
of officers.
Powers of
officers.
Authorisation
of officers of
State tax or
Union
territory tax
as proper
officer in
certain
circumstances.
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CHAPTER III
LEVY AND COLLECTION OF TAX
7. (1) For the purposes of this Act, the expression “supply” includes––
(a) all forms of supply of goods or services or both such as sale, transfer, barter,
exchange, licence, rental, lease or disposal made or agreed to be made for a consideration
by a person in the course or furtherance of business;
(b) import of services for a consideration whether or not in the course or
furtherance of business;
(c) the activities specified in Schedule I, made or agreed to be made without a
consideration; and
(d) the activities to be treated as supply of goods or supply of services as
referred to in Schedule II.
(2) Notwithstanding anything contained in sub-section (1),––
(a) activities or transactions specified in Schedule III; or
(b) such activities or transactions undertaken by the Central Government, a
State Government or any local authority in which they are engaged as public
authorities, as may be notified by the Government on the recommendations of the
Council,
shall be treated neither as a supply of goods nor a supply of services.
(3) Subject to the provisions of sub-sections (1) and (2), the Government may, on the
recommendations of the Council, specify, by notification, the transactions that are to be
treated as—
(a) a supply of goods and not as a supply of services; or
(b) a supply of services and not as a supply of goods.
8. The tax liability on a composite or a mixed supply shall be determined in the following
manner, namely:—
(a) a composite supply comprising two or more supplies, one of which is a
principal supply, shall be treated as a supply of such principal supply; and
(b) a mixed supply comprising two or more supplies shall be treated as a supply
of that particular supply which attracts the highest rate of tax.
9. (1) Subject to the provisions of sub-section (2), there shall be levied a tax called the
central goods and services tax on all intra-State supplies of goods or services or both, except
on the supply of alcoholic liquor for human consumption, on the value determined under
section 15 and at such rates, not exceeding twenty per cent., as may be notified by the
Government on the recommendations of the Council and collected in such manner as may be
prescribed and shall be paid by the taxable person.
(2) The central tax on the supply of petroleum crude, high speed diesel, motor spirit
(commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect
from such date as may be notified by the Government on the recommendations of the
Council.
(3) The Government may, on the recommendations of the Council, by notification,
specify categories of supply of goods or services or both, the tax on which shall be paid on
reverse charge basis by the recipient of such goods or services or both and all the provisions
of this Act shall apply to such recipient as if he is the person liable for paying the tax in
relation to the supply of such goods or services or both.
Scope of
supply.
Tax liability
on composite
and mixed
supplies.
Levy and
collection.
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(4) The central tax in respect of the supply of taxable goods or services or both by a
supplier, who is not registered, to a registered person shall be paid by such person on
reverse charge basis as the recipient and all the provisions of this Act shall apply to such
recipient as if he is the person liable for paying the tax in relation to the supply of such goods
or services or both.
(5) The Government may, on the recommendations of the Council, by notification,
specify categories of services the tax on intra-State supplies of which shall be paid by the
electronic commerce operator if such services are supplied through it, and all the provisions
of this Act shall apply to such electronic commerce operator as if he is the supplier liable for
paying the tax in relation to the supply of such services:
Provided that where an electronic commerce operator does not have a physical presence
in the taxable territory, any person representing such electronic commerce operator for any
purpose in the taxable territory shall be liable to pay tax:
Provided further that where an electronic commerce operator does not have a physical
presence in the taxable territory and also he does not have a representative in the said
territory, such electronic commerce operator shall appoint a person in the taxable territory for
the purpose of paying tax and such person shall be liable to pay tax.
10. (1) Notwithstanding anything to the contrary contained in this Act but subject to
the provisions of sub-sections (3) and (4) of section 9, a registered person, whose aggregate
turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in
lieu of the tax payable by him, an amount calculated at such rate as may be prescribed, but
not exceeding,––
(a) one per cent. of the turnover in State or turnover in Union territory in case of
a manufacturer,
(b) two and a half per cent. of the turnover in State or turnover in Union territory
in case of persons engaged in making supplies referred to in clause (b) of paragraph 6
of Schedule II, and
(c) half per cent. of the turnover in State or turnover in Union territory in case of
other suppliers,
subject to such conditions and restrictions as may be prescribed:
Provided that the Government may, by notification, increase the said limit of fifty lakh
rupees to such higher amount, not exceeding one crore rupees, as may be recommended by
the Council.
(2) The registered person shall be eligible to opt under sub-section (1), if––
(a) he is not engaged in the supply of services other than supplies referred to in
clause (b) of paragraph 6 of Schedule II;
(b) he is not engaged in making any supply of goods which are not leviable to tax
under this Act;
(c) he is not engaged in making any inter-State outward supplies of goods;
(d) he is not engaged in making any supply of goods through an electronic
commerce operator who is required to collect tax at source under section 52; and
(e) he is not a manufacturer of such goods as may be notified by the Government
on the recommendations of the Council:
Provided that where more than one registered persons are having the same Permanent
Account Number (issued under the Income-tax Act, 1961), the registered person shall not be
eligible to opt for the scheme under sub-section (1) unless all such registered persons opt to
pay tax under that sub-section.
Composition
levy.
43 of 1961.
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(3) The option availed of by a registered person under sub-section (1) shall lapse with
effect from the day on which his aggregate turnover during a financial year exceeds the limit
specified under sub-section (1).
(4) A taxable person to whom the provisions of sub-section (1) apply shall not collect
any tax from the recipient on supplies made by him nor shall he be entitled to any credit of
input tax.
(5) If the proper officer has reasons to believe that a taxable person has paid tax under
sub-section (1) despite not being eligible, such person shall, in addition to any tax that may
be payable by him under any other provisions of this Act, be liable to a penalty and the
provisions of section 73 or section 74 shall, mutatis mutandis, apply for determination of tax
and penalty.
11. (1) Where the Government is satisfied that it is necessary in the public interest so
to do, it may, on the recommendations of the Council, by notification, exempt generally, either
absolutely or subject to such conditions as may be specified therein, goods or services or
both of any specified description from the whole or any part of the tax leviable thereon with
effect from such date as may be specified in such notification.
(2) Where the Government is satisfied that it is necessary in the public interest so to
do, it may, on the recommendations of the Council, by special order in each case, under
circumstances of an exceptional nature to be stated in such order, exempt from payment of tax
any goods or services or both on which tax is leviable.
(3) The Government may, if it considers necessary or expedient so to do for the
purpose of clarifying the scope or applicability of any notification issued under
sub-section (1) or order issued under sub-section (2), insert an explanation in such
notification or order, as the case may be, by notification at any time within one year of
issue of the notification under sub-section (1) or order under sub-section (2), and every
such explanation shall have effect as if it had always been the part of the first such
notification or order, as the case may be.
Explanation.––For the purposes of this section, where an exemption in respect of
any goods or services or both from the whole or part of the tax leviable thereon has been
granted absolutely, the registered person supplying such goods or services or both shall
not collect the tax, in excess of the effective rate, on such supply of goods or services or
both.
CHAPTER IV
TIME AND VALUE OF SUPPLY
12. (1) The liability to pay tax on goods shall arise at the time of supply, as determined
in accordance with the provisions of this section.
(2) The time of supply of goods shall be the earlier of the following dates, namely:—
(a) the date of issue of invoice by the supplier or the last date on which he is
required, under sub-section (1) of section 31, to issue the invoice with respect to the
supply; or
(b) the date on which the supplier receives the payment with respect to the
supply:
Provided that where the supplier of taxable goods receives an amount upto one
thousand rupees in excess of the amount indicated in the tax invoice, the time of
supply to the extent of such excess amount shall, at the option of the said supplier, be
the date of issue of invoice in respect of such excess amount.
Power to
grant
exemption
from tax.
Time of
supply of
goods.
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Explanation 1.––For the purposes of clauses (a) and (b), “supply” shall be
deemed to have been made to the extent it is covered by the invoice or, as the case may
be, the payment.
Explanation 2.––For the purposes of clause (b), “the date on which the supplier
receives the payment” shall be the date on which the payment is entered in his books
of account or the date on which the payment is credited to his bank account, whichever
is earlier.
(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse
charge basis, the time of supply shall be the earliest of the following dates, namely:—
(a) the date of the receipt of goods; or
(b) the date of payment as entered in the books of account of the recipient or the
date on which the payment is debited in his bank account, whichever is earlier; or
(c) the date immediately following thirty days from the date of issue of invoice or
any other document, by whatever name called, in lieu thereof by the supplier:
Provided that where it is not possible to determine the time of supply under
clause (a) or clause (b) or clause (c), the time of supply shall be the date of entry in the
books of account of the recipient of supply.
(4) In case of supply of vouchers by a supplier, the time of supply shall be—
(a) the date of issue of voucher, if the supply is identifiable at that point; or
(b) the date of redemption of voucher, in all other cases.
(5) Where it is not possible to determine the time of supply under the provisions of
sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall––
(a) in a case where a periodical return has to be filed, be the date on which such
return is to be filed; or
(b) in any other case, be the date on which the tax is paid.
(6) The time of supply to the extent it relates to an addition in the value of supply by
way of interest, late fee or penalty for delayed payment of any consideration shall be the date
on which the supplier receives such addition in value.
13. (1) The liability to pay tax on services shall arise at the time of supply, as determined
in accordance with the provisions of this section.
(2) The time of supply of services shall be the earliest of the following dates, namely:—
(a) the date of issue of invoice by the supplier, if the invoice is issued within the
period prescribed under sub-section (2) of section 31 or the date of receipt of payment,
whichever is earlier; or
(b) the date of provision of service, if the invoice is not issued within the period
prescribed under sub-section (2) of section 31 or the date of receipt of payment,
whichever is earlier; or
(c) the date on which the recipient shows the receipt of services in his books of
account, in a case where the provisions of clause (a) or clause (b) do not apply:
Provided that where the supplier of taxable service receives an amount upto one
thousand rupees in excess of the amount indicated in the tax invoice, the time of
supply to the extent of such excess amount shall, at the option of the said supplier, be
the date of issue of invoice relating to such excess amount.
Explanation.––For the purposes of clauses (a) and (b)––
Time of supply
of services.
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(i) the supply shall be deemed to have been made to the extent it is covered
by the invoice or, as the case may be, the payment;
(ii) “the date of receipt of payment” shall be the date on which the payment
is entered in the books of account of the supplier or the date on which the
payment is credited to his bank account, whichever is earlier.
(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse
charge basis, the time of supply shall be the earlier of the following dates, namely:––
(a) the date of payment as entered in the books of account of the recipient or the
date on which the payment is debited in his bank account, whichever is earlier; or
(b) the date immediately following sixty days from the date of issue of invoice or
any other document, by whatever name called, in lieu thereof by the supplier:
Provided that where it is not possible to determine the time of supply under
clause (a) or clause (b), the time of supply shall be the date of entry in the books of
account of the recipient of supply:
Provided further that in case of supply by associated enterprises, where the
supplier of service is located outside India, the time of supply shall be the date of entry
in the books of account of the recipient of supply or the date of payment, whichever is
earlier.
(4) In case of supply of vouchers by a supplier, the time of supply shall be––
(a) the date of issue of voucher, if the supply is identifiable at that point; or
(b) the date of redemption of voucher, in all other cases.
(5) Where it is not possible to determine the time of supply under the provisions of
sub-section (2) or sub-section (3) or sub-section (4), the time of supply shall––
(a) in a case where a periodical return has to be filed, be the date on which such
return is to be filed; or
(b) in any other case, be the date on which the tax is paid.
(6) The time of supply to the extent it relates to an addition in the value of supply by
way of interest, late fee or penalty for delayed payment of any consideration shall be the date
on which the supplier receives such addition in value.
14. Notwithstanding anything contained in section 12 or section 13, the time of supply,
where there is a change in the rate of tax in respect of goods or services or both, shall be
determined in the following manner, namely:––
(a) in case the goods or services or both have been supplied before the change
in rate of tax,––
(i) where the invoice for the same has been issued and the payment is also
received after the change in rate of tax, the time of supply shall be the date of
receipt of payment or the date of issue of invoice, whichever is earlier; or
(ii) where the invoice has been issued prior to the change in rate of tax but
payment is received after the change in rate of tax, the time of supply shall be the
date of issue of invoice; or
(iii) where the payment has been received before the change in rate of tax,
but the invoice for the same is issued after the change in rate of tax, the time of
supply shall be the date of receipt of payment;
(b) in case the goods or services or both have been supplied after the change in
rate of tax,––
Change in
rate of tax in
respect of
supply of
goods or
services.
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(i) where the payment is received after the change in rate of tax but the
invoice has been issued prior to the change in rate of tax, the time of supply shall
be the date of receipt of payment; or
(ii) where the invoice has been issued and payment is received before the
change in rate of tax, the time of supply shall be the date of receipt of payment or
date of issue of invoice, whichever is earlier; or
(iii) where the invoice has been issued after the change in rate of tax but
the payment is received before the change in rate of tax, the time of supply shall
be the date of issue of invoice:
Provided that the date of receipt of payment shall be the date of credit in
the bank account if such credit in the bank account is after four working days
from the date of change in the rate of tax.
Explanation.––For the purposes of this section, “the date of receipt of
payment” shall be the date on which the payment is entered in the books of
account of the supplier or the date on which the payment is credited to his bank
account, whichever is earlier.
15. (1) The value of a supply of goods or services or both shall be the transaction
value, which is the price actually paid or payable for the said supply of goods or services or
both where the supplier and the recipient of the supply are not related and the price is the
sole consideration for the supply.
(2) The value of supply shall include–––
(a) any taxes, duties, cesses, fees and charges levied under any law for the time
being in force other than this Act, the State Goods and Services Tax Act, the Union
Territory Goods and Services Tax Act and the Goods and Services Tax (Compensation
to States) Act, if charged separately by the supplier;
(b) any amount that the supplier is liable to pay in relation to such supply but
which has been incurred by the recipient of the supply and not included in the price
actually paid or payable for the goods or services or both;
(c) incidental expenses, including commission and packing, charged by the
supplier to the recipient of a supply and any amount charged for anything done by the
supplier in respect of the supply of goods or services or both at the time of, or before
delivery of goods or supply of services;
(d) interest or late fee or penalty for delayed payment of any consideration for
any supply; and
(e) subsidies directly linked to the price excluding subsidies provided by the
Central Government and State Governments.
Explanation.––For the purposes of this sub-section, the amount of subsidy
shall be included in the value of supply of the supplier who receives the subsidy.
(3) The value of the supply shall not include any discount which is given––
(a) before or at the time of the supply if such discount has been duly recorded in
the invoice issued in respect of such supply; and
(b) after the supply has been effected, if—
(i) such discount is established in terms of an agreement entered into at or
before the time of such supply and specifically linked to relevant invoices; and
(ii) input tax credit as is attributable to the discount on the basis of
document issued by the supplier has been reversed by the recipient of the
supply.
Value of
taxable
supply.
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(4) Where the value of the supply of goods or services or both cannot be determined
under sub-section (1), the same shall be determined in such manner as may be prescribed.
(5) Notwithstanding anything contained in sub-section (1) or sub-section (4), the
value of such supplies as may be notified by the Government on the recommendations of the
Council shall be determined in such manner as may be prescribed.
Explanation.—For the purposes of this Act,––
(a) persons shall be deemed to be “related persons” if––
(i) such persons are officers or directors of one another’s businesses;
(ii) such persons are legally recognised partners in business;
(iii) such persons are employer and employee;
(iv) 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;
(v) one of them directly or indirectly controls the other;
(vi) both of them are directly or indirectly controlled by a third person;
(vii) together they directly or indirectly control a third person; or they are
members of the same family;
(b) the term “person” also includes legal persons;
(c) persons who are associated in the business of one another in that one is the
sole agent or sole distributor or sole concessionaire, howsoever described, of the
other, shall be deemed to be related.
CHAPTER V
INPUT TAX CREDIT
16. (1) Every registered person shall, subject to such conditions and restrictions as
may be prescribed and in the manner specified in section 49, be entitled to take credit of input
tax charged on any supply of goods or services or both to him which are used or intended to
be used in the course or furtherance of his business and the said amount shall be credited to
the electronic credit ledger of such person.
(2) Notwithstanding anything contained in this section, no registered person shall be
entitled to the credit of any input tax in respect of any supply of goods or services or both to
him unless,––
(a) he is in possession of a tax invoice or debit note issued by a supplier registered
under this Act, or such other tax paying documents as may be prescribed;
(b) he has received the goods or services or both.
Explanation.—For the purposes of this clause, it shall be deemed that the
registered person has received the goods where the goods are delivered by the supplier
to a recipient or any other person on the direction of such registered person, whether
acting as an agent or otherwise, before or during movement of goods, either by way of
transfer of documents of title to goods or otherwise;
(c) subject to the provisions of section 41,the tax charged in respect of such
supply has been actually paid to the Government, either in cash or through utilisation
of input tax credit admissible in respect of the said supply; and
(d) he has furnished the return under section 39:
Provided that where the goods against an invoice are received in lots or
instalments, the registered person shall be entitled to take credit upon receipt of the
last lot or instalment:
Provided further that where a recipient fails to pay to the supplier of goods or
services or both,other than the supplies on which tax is payable on reverse charge
basis, the amount towards the value of supply along with tax payable thereon within a
Eligibility and
conditions for
taking input
tax credit.
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period of one hundred and eighty days from the date of issue of invoice by the
supplier, an amount equal to the input tax credit availed by the recipient shall be added
to his output tax liability, along with interest thereon, in such manner as may be
prescribed:
Provided also that the recipient shall be entitled to avail of the credit of input tax
on payment made by him of the amount towards the value of supply of goods or
services or both along with tax payable thereon.
(3) Where the registered person has claimed depreciation on the tax component of the
cost of capital goods and plant and machinery under the provisions of the Income-tax Act,
1961, the input tax credit on the said tax component shall not be allowed.
(4) A registered person shall not be entitled to take input tax credit in respect of any
invoice or debit note for supply of goods or services or both after the due date of furnishing
of the return under section 39 for the month of September following the end of financial year
to which such invoice or invoice relating to such debit note pertains or furnishing of the
relevant annual return, whichever is earlier.
17. (1) Where the goods or services or both are used by the registered person partly
for the purpose of any business and partly for other purposes, the amount of credit shall be
restricted to so much of the input tax as is attributable to the purposes of his business.
(2) Where the goods or services or both are used by the registered person partly for
effecting taxable supplies including zero-rated supplies under this Act or under the Integrated
Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the
amount of credit shall be restricted to so much of the input tax as is attributable to the said
taxable supplies including zero-rated supplies.
(3) The value of exempt supply under sub-section (2) shall be such as may be prescribed,
and shall include supplies on which the recipient is liable to pay tax on reverse charge basis,
transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule
II, sale of building.
(4) A banking company or a financial institution including a non-banking financial
company, engaged in supplying services by way of accepting deposits, extending loans or
advances shall have the option to either comply with the provisions of sub-section (2), or
avail of, every month, an amount equal to fifty per cent. of the eligible input tax credit on
inputs, capital goods and input services in that month and the rest shall lapse:
Provided that the option once exercised shall not be withdrawn during the remaining
part of the financial year:
Provided further that the restriction of fifty per cent. shall not apply to the tax paid on
supplies made by one registered person to another registered person having the same
Permanent Account Number.
(5) Notwithstanding anything contained in sub-section (1) of section 16 and subsection
(1) of section 18, input tax credit shall not be available in respect of the following,
namely:—
(a) motor vehicles and other conveyances except when they are used––
(i) for making the following taxable supplies, namely:—
(A) further supply of such vehicles or conveyances ; or
(B) transportation of passengers; or
(C) imparting training on driving, flying, navigating such vehicles
or conveyances;
(ii) for transportation of goods;
43 of 1961.
Apportionment
of credit and
blocked
credits.
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(b) the following supply of goods or services or both:—
(i) food and beverages, outdoor catering, beauty treatment, health services,
cosmetic and plastic surgery except where an inward supply of goods or services
or both of a particular category is used by a registered person for making an
outward taxable supply of the same category of goods or services or both or as
an element of a taxable composite or mixed supply;
(ii) membership of a club, health and fitness centre;
(iii) rent-a-cab, life insurance and health insurance except where ––
(A) the Government notifies the services which are obligatory for an
employer to provide to its employees under any law for the time being in
force; or
(B) such inward supply of goods or services or both of a particular
category is used by a registered person for making an outward taxable
supply of the same category of goods or services or both or as part of a
taxable composite or mixed supply; and
(iv) travel benefits extended to employees on vacation such as leave or
home travel concession;
(c) works contract services when supplied for construction of an immovable
property (other than plant and machinery) except where it is an input service for further
supply of works contract service;
(d) goods or services or both received by a taxable person for construction of an
immovable property (other than plant or machinery) on his own account including
when such goods or services or both are used in the course or furtherance of business.
Explanation.––For the purposes of clauses (c) and (d), the expression
“construction” includes re-construction, renovation, additions or alterations or repairs,
to the extent of capitalisation, to the said immovable property;
(e) goods or services or both on which tax has been paid under section 10;
(f) goods or services or both received by a non-resident taxable person except
on goods imported by him;
(g) goods or services or both used for personal consumption;
(h) goods lost, stolen, destroyed, written off or disposed of by way of gift or free
samples; and
(i) any tax paid in accordance with the provisions of sections 74, 129 and 130.
(6) The Government may prescribe the manner in which the credit referred to in subsections
(1) and (2) may be attributed.
Explanation.–– For the purposes of this Chapter and Chapter VI, the expression
“plant and machinery” means apparatus, equipment, and machinery fixed to earth by
foundation or structural support that are used for making outward supply of goods or
services or both and includes such foundation and structural supports but excludes—
(i) land, building or any other civil structures;
(ii) telecommunication towers; and
(iii) pipelines laid outside the factory premises.
18. (1) Subject to such conditions and restrictions as may be prescribed—
(a) a person who has applied for registration under this Act within thirty days
from the date on which he becomes liable to registration and has been granted such
Availability of
credit in
special
circumstances.
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registration shall be entitled to take credit of input tax in respect of inputs held in stock
and inputs contained in semi-finished or finished goods held in stock on the day
immediately preceding the date from which he becomes liable to pay tax under the
provisions of this Act;
(b) a person who takes registration under sub-section (3) of section 25 shall be
entitled to take credit of input tax in respect of inputs held in stock and inputs contained
in semi-finished or finished goods held in stock on the day immediately preceding the
date of grant of registration;
(c) where any registered person ceases to pay tax under section 10, he shall be
entitled to take credit of input tax in respect of inputs held in stock, inputs contained in
semi-finished or finished goods held in stock and on capital goods on the day immediately
preceding the date from which he becomes liable to pay tax under section 9:
Provided that the credit on capital goods shall be reduced by such percentage
points as may be prescribed;
(d) where an exempt supply of goods or services or both by a registered person
becomes a taxable supply, such person shall be entitled to take credit of input tax in
respect of inputs held in stock and inputs contained in semi-finished or finished goods
held in stock relatable to such exempt supply and on capital goods exclusively used
for such exempt supply on the day immediately preceding the date from which such
supply becomes taxable:
Provided that the credit on capital goods shall be reduced by such percentage
points as may be prescribed.
(2) A registered person shall not be entitled to take input tax credit under
sub-section (1) in respect of any supply of goods or services or both to him after the expiry
of one year from the date of issue of tax invoice relating to such supply.
(3) Where there is a change in the constitution of a registered person on account of
sale, merger, demerger, amalgamation, lease or transfer of the business with the specific
provisions for transfer of liabilities, the said registered person shall be allowed to transfer the
input tax credit which remains unutilised in his electronic credit ledger to such sold, merged,
demerged, amalgamated, leased or transferred business in such manner as may be prescribed.
(4) Where any registered person who has availed of input tax credit opts to pay tax
under section 10 or, where the goods or services or both supplied by him become wholly
exempt, he shall pay an amount, by way of debit in the electronic credit ledger or electronic
cash ledger, equivalent to the credit of input tax in respect of inputs held in stock and inputs
contained in semi-finished or finished goods held in stock and on capital goods, reduced by
such percentage points as may be prescribed, on the day immediately preceding the date of
exercising of such option or, as the case may be, the date of such exemption:
Provided that after payment of such amount, the balance of input tax credit, if any,
lying in his electronic credit ledger shall lapse.
(5) The amount of credit under sub-section (1) and the amount payable under
sub-section (4) shall be calculated in such manner as may be prescribed.
(6) In case of supply of capital goods or plant and machinery, on which input tax credit
has been taken, the registered person shall pay an amount equal to the input tax credit taken
on the said capital goods or plant and machinery reduced by such percentage points as may
be prescribed or the tax on the transaction value of such capital goods or plant and machinery
determined under section 15, whichever is higher:
Provided that where refractory bricks, moulds and dies, jigs and fixtures are supplied
as scrap, the taxable person may pay tax on the transaction value of such goods determined
under section 15.
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19. (1) The principal shall, subject to such conditions and restrictions as may be
prescribed, be allowed input tax credit on inputs sent to a job-worker for job-work.
(2) Notwithstanding anything contained in clause (b) of sub-section (2) of section 16,
the principal shall be entitled to take credit of input tax on inputs even if the inputs are
directly sent to a job worker for job-work without being first brought to his place of business.
(3) Where the inputs sent for job work are not received back by the principal after
completion of job-work or otherwise or are not supplied from the place of business of the job
worker in accordance with clause (a) or clause (b) of sub-section (1) of section 143 within
one year of being sent out, it shall be deemed that such inputs had been supplied by the
principal to the job-worker on the day when the said inputs were sent out:
Provided that where the inputs are sent directly to a job worker, the period of one year
shall be counted from the date of receipt of inputs by the job worker.
(4) The principal shall, subject to such conditions and restrictions as may be prescribed,
be allowed input tax credit on capital goods sent to a job worker for job work.
(5) Notwithstanding anything contained in clause (b) of sub-section (2) of section 16,
the principal shall be entitled to take credit of input tax on capital goods even if the capital
goods are directly sent to a job worker for job-work without being first brought to his place
of business.
(6) Where the capital goods sent for job work are not received back by the principal
within a period of three years of being sent out, it shall be deemed that such capital goods
had been supplied by the principal to the job worker on the day when the said capital goods
were sent out:
Provided that where the capital goods are sent directly to a job worker, the period of
three years shall be counted from the date of receipt of capital goods by the job worker.
(7) Nothing contained in sub-section (3) or sub-section (6) shall apply to moulds and
dies, jigs and fixtures, or tools sent out to a job worker for job work.
Explanation.––For the purpose of this section, “principal” means the person referred
to in section 143.
20. (1) The Input Service Distributor shall distribute the credit of central tax as central
tax or integrated tax and integrated tax as integrated tax or central tax, by way of issue of a
document containing the amount of input tax credit being distributed in such manner as may
be prescribed.
(2) The Input Service Distributor may distribute the credit subject to the following
conditions, namely:––
(a) the credit can be distributed to the recipients of credit against a document
containing such details as may be prescribed;
(b) the amount of the credit distributed shall not exceed the amount of credit
available for distribution;
(c) the credit of tax paid on input services attributable to a recipient of credit shall
be distributed only to that recipient;
(d) the credit of tax paid on input services attributable to more than one recipient
of credit shall be distributed amongst such recipients to whom the input service is
attributable and such distribution shall be pro rata on the basis of the turnover in a
State or turnover in a Union territory of such recipient, during the relevant period, to
the aggregate of the turnover of all such recipients to whom such input service is
attributable and which are operational in the current year, during the said relevant
period;
Taking input
tax credit in
respect of
inputs and
capital goods
sent for job
work.
Manner of
distribution of
credit by
Input Service
Distributor.
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(e) the credit of tax paid on input services attributable to all recipients of credit
shall be distributed amongst such recipients and such distribution shall be pro rata on
the basis of the turnover in a State or turnover in a Union territory of such recipient,
during the relevant period, to the aggregate of the turnover of all recipients and which
are operational in the current year, during the said relevant period.
Explanation.––For the purposes of this section,––
(a) the “relevant period” shall be––
(i) if the recipients of credit have turnover in their States or Union
territories in the financial year preceding the year during which credit is to
be distributed, the said financial year; or
(ii) if some or all recipients of the credit do not have any turnover in
their States or Union territories in the financial year preceding the year
during which the credit is to be distributed, the last quarter for which
details of such turnover of all the recipients are available, previous to the
month during which credit is to be distributed;
(b) the expression “recipient of credit” means the supplier of goods or
services or both having the same Permanent Account Number as that of the
Input Service Distributor;
(c) the term ‘turnover’, in relation to any registered person engaged in the
supply of taxable goods as well as goods not taxable under this Act, means the
value of turnover, reduced by the amount of any duty or tax levied under entry
84 of List I of the Seventh Schedule to the Constitution and entry 51 and 54 of
List II of the said Schedule.
21. Where the Input Service Distributor distributes the credit in contravention
of the provisions contained in section 20 resulting in excess distribution of credit to
one or more recipients of credit, the excess credit so distributed shall be recovered
from such recipients along with interest, and the provisions of section 73 or section 74,
as the case may be, shall, mutatis mutandis, apply for determination of amount to be
recovered.
CHAPTER VI
REGISTRATION
22. (1) Every supplier shall be liable to be registered under this Act in the State or
Union territory, other than special category States, from where he makes a taxable supply of
goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh
rupees:
Provided that where such person makes taxable supplies of goods or services or both
from any of the special category States, he shall be liable to be registered if his aggregate
turnover in a financial year exceeds ten lakh rupees.
(2) Every person who, on the day immediately preceding the appointed day, is registered
or holds a license under an existing law, shall be liable to be registered under this Act with
effect from the appointed day.
(3) Where a business carried on by a taxable person registered under this Act is
transferred, whether on account of succession or otherwise, to another person as a going
concern, the transferee or the successor, as the case may be, shall be liable to be registered
with effect from the date of such transfer or succession.
(4) Notwithstanding anything contained in sub-sections (1) and (3), in a case of
transfer pursuant to sanction of a scheme or an arrangement for amalgamation or, as the case
may be, de-merger of two or more companies pursuant to an order of a High Court, Tribunal
Persons liable
for
registration.
Manner of
recovery of
credit
distributed in
excess.
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or otherwise, the transferee shall be liable to be registered, with effect from the date on which
the Registrar of Companies issues a certificate of incorporation giving effect to such order of
the High Court or Tribunal.
Explanation.––For the purposes of this section,––
(i) the expression “aggregate turnover” shall include all supplies made by the
taxable person, whether on his own account or made on behalf of all his principals;
(ii) the supply of goods, after completion of job-work, by a registered job worker
shall be treated as the supply of goods by the principal referred to in section 143, and
the value of such goods shall not be included in the aggregate turnover of the registered
job worker;
(iii) the expression “special category States” shall mean the States as specified
in sub-clause (g) of clause (4) of article 279A of the Constitution.
23. (1) The following persons shall not be liable to registration, namely:––
(a) any person engaged exclusively in the business of supplying goods or
services or both that are not liable to tax or wholly exempt from tax under this Act or
under the Integrated Goods and Services Tax Act;
(b) an agriculturist, to the extent of supply of produce out of cultivation of land.
(2) The Government may, on the recommendations of the Council, by notification,
specify the category of persons who may be exempted from obtaining registration under this
Act.
24. Notwithstanding anything contained in sub-section (1) of section 22, the following
categories of persons shall be required to be registered under this Act,––
(i) persons making any inter-State taxable supply;
(ii) casual taxable persons making taxable supply;
(iii) persons who are required to pay tax under reverse charge;
(iv) person who are required to pay tax under sub-section (5) of section 9;
(v) non-resident taxable persons making taxable supply;
(vi) persons who are required to deduct tax under section 51, whether or not
separately registered under this Act;
(vii) persons who make taxable supply of goods or services or both on behalf of
other taxable persons whether as an agent or otherwise;
(viii) Input Service Distributor, whether or not separately registered under this
Act;
(ix) persons who supply goods or services or both, other than supplies specified
under sub-section (5) of section 9, through such electronic commerce operator who is
required to collect tax at source under section 52;
(x) every electronic commerce operator;
(xi) every person supplying online information and data base access or retrieval
services from a place outside India to a person in India, other than a registered person;
and
(xii) such other person or class of persons as may be notified by the Government
on the recommendations of the Council.
25. (1) Every person who is liable to be registered under section 22 or section 24 shall
apply for registration in every such State or Union territory in which he is so liable within
Persons not
liable for
registration.
Compulsory
registration in
certain cases.
Procedure for
registration.
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thirty days from the date on which he becomes liable to registration, in such manner and
subject to such conditions as may be prescribed:
Provided that a casual taxable person or a non-resident taxable person shall apply for
registration at least five days prior to the commencement of business.
Explanation.—Every person who makes a supply from the territorial waters of India
shall obtain registration in the coastal State or Union territory where the nearest point of the
appropriate base line is located.
(2) A person seeking registration under this Act shall be granted a single registration
in a State or Union territory:
Provided that a person having multiple business verticals in a State or Union territory
may be granted a separate registration for each business vertical, subject to such conditions
as may be prescribed.
(3) A person, though not liable to be registered under section 22 or section 24 may get
himself registered voluntarily, and all provisions of this Act, as are applicable to a registered
person, shall apply to such person.
(4) 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.
(5) Where a person who has obtained or is required to obtain registration in a State or
Union territory in respect of an establishment, has an establishment in another State or
Union territory, then such establishments shall be treated as establishments of distinct
persons for the purposes of this Act.
(6) Every person shall have a Permanent Account Number issued under the Incometax
Act, 1961 in order to be eligible for grant of registration:
Provided that a person required to deduct tax under section 51 may have, in lieu of a
Permanent Account Number, a Tax Deduction and Collection Account Number issued under
the said Act in order to be eligible for grant of registration.
(7) Notwithstanding anything contained in sub-section (6), a non-resident taxable
person may be granted registration under sub-section (1) on the basis of such other documents
as may be prescribed.
(8) Where a person who is liable to be registered under this Act fails to obtain
registration, the proper officer may, without prejudice to any action which may be taken
under this Act or under any other law for the time being in force, proceed to register such
person in such manner as may be prescribed.
(9) Notwithstanding anything contained in sub-section (1),––
(a) any specialised agency of the United Nations Organisation or any
Multilateral Financial Institution and Organisation notified under the United Nations
(Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries ;
and
(b) any other person or class of persons, as may be notified by the Commissioner,
shall be granted a Unique Identity Number in such manner and for such purposes, including
refund of taxes on the notified supplies of goods or services or both received by them, as
may be prescribed.
(10) The registration or the Unique Identity Number shall be granted or rejected after
due verification in such manner and within such period as may be prescribed.
43 of 1961.
46 of 1947.
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(11) A certificate of registration shall be issued in such form and with effect from such
date as may be prescribed.
(12) A registration or a Unique Identity Number shall be deemed to have been granted
after the expiry of the period prescribed under sub-section (10), if no deficiency has been
communicated to the applicant within that period.
26. (1) The grant of registration or the Unique Identity Number under the State Goods
and Services Tax Act or the Union Territory Goods and Services Tax Act shall be deemed to
be a grant of registration or the Unique Identity Number under this Act subject to the
condition that the application for registration or the Unique Identity Number has not been
rejected under this Act within the time specified in sub-section (10) of section 25.
(2) Notwithstanding anything contained in sub-section (10) of section 25, any rejection
of application for registration or the Unique Identity Number under the State Goods and
Services Tax Act or the Union Territory Goods and Services Tax Act shall be deemed to be a
rejection of application for registration under this Act.
27. (1) The certificate of registration issued to a casual taxable person or a nonresident
taxable person shall be valid for the period specified in the application for
registration or ninety days from the effective date of registration, whichever is earlier and
such person shall make taxable supplies only after the issuance of the certificate of
registration:
Provided that the proper officer may, on sufficient cause being shown by the said
taxable person, extend the said period of ninety days by a further period not exceeding
ninety days.
(2) A casual taxable person or a non-resident taxable person shall, at the time of
submission of application for registration under sub-section (1) of section 25, make an
advance deposit of tax in an amount equivalent to the estimated tax liability of such person
for the period for which the registration is sought:
Provided that where any extension of time is sought under sub-section (1), such
taxable person shall deposit an additional amount of tax equivalent to the estimated tax
liability of such person for the period for which the extension is sought.
(3) The amount deposited under sub-section (2) shall be credited to the electronic
cash ledger of such person and shall be utilised in the manner provided under
section 49.
28. (1) Every registered person and a person to whom a Unique Identity Number has
been assigned shall inform the proper officer of any changes in the information furnished at
the time of registration or subsequent thereto, in such form and manner and within such
period as may be prescribed.
(2) The proper officer may, on the basis of information furnished under sub-section (1)
or as ascertained by him, approve or reject amendments in the registration particulars in such
manner and within such period as may be prescribed:
Provided that approval of the proper officer shall not be required in respect of amendment
of such particulars as may be prescribed:
Provided further that the proper officer shall not reject the application for amendment
in the registration particulars without giving the person an opportunity of being heard.
(3) Any rejection or approval of amendments under the State Goods and Services Tax
Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed
to be a rejection or approval under this Act.
29. (1) The proper officer may, either on his own motion or on an application filed by
the registered person or by his legal heirs, in case of death of such person, cancel the
Deemed
registration.
Special
provisions
relating to
casual taxable
person and
non-resident
taxable
person.
Amendment
of
registration.
Cancellation
of
registration.
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registration, in such manner and within such period as may be prescribed, having regard to
the circumstances where,––
(a) the business has been discontinued, transferred fully for any reason including
death of the proprietor, amalgamated with other legal entity, demerged or otherwise
disposed of; or
(b) there is any change in the constitution of the business; or
(c) the taxable person, other than the person registered under sub-section (3) of
section 25, is no longer liable to be registered under section 22 or section 24.
(2) The proper officer may cancel the registration of a person from such date, including
any retrospective date, as he may deem fit, where,––
(a) a registered person has contravened such provisions of the Act or the rules
made thereunder as may be prescribed; or
(b) a person paying tax under section 10 has not furnished returns for three
consecutive tax periods; or
(c) any registered person, other than a person specified in clause (b), has not
furnished returns for a continuous period of six months; or
(d) any person who has taken voluntary registration under sub-section (3) of
section 25 has not commenced business within six months from the date of registration;
or
(e) registration has been obtained by means of fraud, wilful misstatement or
suppression of facts:
Provided that the proper officer shall not cancel the registration without giving
the person an opportunity of being heard.
(3) The cancellation of registration under this section shall not affect the liability of the
person to pay tax and other dues under this Act or to discharge any obligation under this Act
or the rules made thereunder for any period prior to the date of cancellation whether or not
such tax and other dues are determined before or after the date of cancellation.
(4) The cancellation of registration under the State Goods and Services Tax Act or the
Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a
cancellation of registration under this Act.
(5) Every registered person whose registration is cancelled shall pay an amount, by
way of debit in the electronic credit ledger or electronic cash ledger, equivalent to the credit
of input tax in respect of inputs held in stock and inputs contained in semi-finished or
finished goods held in stock or capital goods or plant and machinery on the day immediately
preceding the date of such cancellation or the output tax payable on such goods, whichever
is higher, calculated in such manner as may be prescribed:
Provided that in case of capital goods or plant and machinery, the taxable person shall
pay an amount equal to the input tax credit taken on the said capital goods or plant and
machinery, reduced by such percentage points as may be prescribed or the tax on the
transaction value of such capital goods or plant and machinery under section 15, whichever
is higher.
(6) The amount payable under sub-section (5) shall be calculated in such manner as
may be prescribed.
30. (1) Subject to such conditions as may be prescribed, any registered person, whose
registration is cancelled by the proper officer on his own motion, may apply to such officer
for revocation of cancellation of the registration in the prescribed manner within thirty days
from the date of service of the cancellation order.
Revocation
of
cancellation
of
registration.
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(2) The proper officer may, in such manner and within such period as may be prescribed,
by order, either revoke cancellation of the registration or reject the application:
Provided that the application for revocation of cancellation of registration shall not be
rejected unless the applicant has been given an opportunity of being heard.
(3) The revocation of cancellation of registration under the State Goods and Services
Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be
deemed to be a revocation of cancellation of registration under this Act.
CHAPTER VII
TAX INVOICE, CREDIT AND DEBIT NOTES
31. (1) A registered person supplying taxable goods shall, before or at the time of,—
(a) removal of goods for supply to the recipient, where the supply involves
movement of goods; or
(b) delivery of goods or making available thereof to the recipient, in any other
case,
issue a tax invoice showing the description, quantity and value of goods, the tax charged
thereon and such other particulars as may be prescribed:
Provided that the Government may, on the recommendations of the Council, by
notification, specify the categories of goods or supplies in respect of which a tax invoice
shall be issued, within such time and in such manner as may be prescribed.
(2) A registered person supplying taxable services shall, before or after the provision
of service but within a prescribed period, issue a tax invoice, showing the description, value,
tax charged thereon and such other particulars as may be prescribed:
Provided that the Government may, on the recommendations of the Council, by
notification and subject to such conditions as may be mentioned therein, specify the categories
of services in respect of which––
(a) any other document issued in relation to the supply shall be deemed to be a
tax invoice; or
(b) tax invoice may not be issued.
(3) Notwithstanding anything contained in sub-sections (1) and (2)––
(a) a registered person may, within one month from the date of issuance of
certificate of registration and in such manner as may be prescribed, issue a revised
invoice against the invoice already issued during the period beginning with the effective
date of registration till the date of issuance of certificate of registration to him;
(b) a registered person may not issue a tax invoice if the value of the goods or
services or both supplied is less than two hundred rupees subject to such conditions
and in such manner as may be prescribed;
(c) a registered person supplying exempted goods or services or both or paying
tax under the provisions of section 10 shall issue, instead of a tax invoice, a bill of
supply containing such particulars and in such manner as may be prescribed:
Provided that the registered person may not issue a bill of supply if the value of
the goods or services or both supplied is less than two hundred rupees subject to
such conditions and in such manner as may be prescribed;
(d) a registered person shall, on receipt of advance payment with respect to any
supply of goods or services or both, issue a receipt voucher or any other document,
containing such particulars as may be prescribed, evidencing receipt of such payment;
Tax invoice.
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(e) where, on receipt of advance payment with respect to any supply of goods or
services or both the registered person issues a receipt voucher, but subsequently no
supply is made and no tax invoice is issued in pursuance thereof, the said registered
person may issue to the person who had made the payment, a refund voucher against
such payment;
(f) a registered person who is liable to pay tax under sub-section (3) or
sub-section (4) of section 9 shall issue an invoice in respect of goods or services or
both received by him from the supplier who is not registered on the date of receipt of
goods or services or both;
(g) a registered person who is liable to pay tax under sub-section (3) or subsection
(4) of section 9 shall issue a payment voucher at the time of making payment to
the supplier.
(4) In case of continuous supply of goods, where successive statements of accounts
or successive payments are involved, the invoice shall be issued before or at the time each
such statement is issued or, as the case may be, each such payment is received.
(5) Subject to the provisions of clause (d) of sub-section (3), in case of continuous
supply of services,––
(a) where the due date of payment is ascertainable from the contract, the invoice
shall be issued on or before the due date of payment;
(b) where the due date of payment is not ascertainable from the contract, the
invoice shall be issued before or at the time when the supplier of service receives the
payment;
(c) where the payment is linked to the completion of an event, the invoice shall
be issued on or before the date of completion of that event.
(6) In a case where the supply of services ceases under a contract before the completion
of the supply, the invoice shall be issued at the time when the supply ceases and such
invoice shall be issued to the extent of the supply made before such cessation.
(7) Notwithstanding anything contained in sub-section (1), where the goods being
sent or taken on approval for sale or return are removed before the supply takes place, the
invoice shall be issued before or at the time of supply or six months from the date of removal,
whichever is earlier.
Explanation.––For the purposes of this section, the expression “tax invoice” shall
include any revised invoice issued by the supplier in respect of a supply made earlier.
32. (1) A person who is not a registered person shall not collect in respect of any
supply of goods or services or both any amount by way of tax under this Act.
(2) No registered person shall collect tax except in accordance with the provisions of
this Act or the rules made thereunder.
33. Notwithstanding anything contained in this Act or any other law for the time being
in force, where any supply is made for a consideration, every person who is liable to pay tax
for such supply shall prominently indicate in all documents relating to assessment, tax
invoice and other like documents, the amount of tax which shall form part of the price at
which such supply is made.
34. (1) Where a tax invoice has been issued for supply of any goods or services or
both and the taxable value or tax charged in that tax invoice is found to exceed the taxable
value or tax payable in respect of such supply, or where the goods supplied are returned by
the recipient, or where goods or services or both supplied are found to be deficient, the
registered person, who has supplied such goods or services or both, may issue to the
recipient a credit note containing such particulars as may be prescribed.
Prohibition of
unauthorised
collection of
tax.
Amount of
tax to be
indicated in
tax invoice
and other
documents.
Credit and debit
notes.
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(2) Any registered person who issues a credit note in relation to a supply of goods or
services or both shall declare the details of such credit note in the return for the month during
which such credit note has been issued but not later than September following the end of the
financial year in which such supply was made, or the date of furnishing of the relevant
annual return, whichever is earlier, and the tax liability shall be adjusted in such manner as
may be prescribed:
Provided that no reduction in output tax liability of the supplier shall be permitted, if
the incidence of tax and interest on such supply has been passed on to any other person.
(3) Where a tax invoice has been issued for supply of any goods or services or both
and the taxable value or tax charged in that tax invoice is found to be less than the taxable
value or tax payable in respect of such supply, the registered person, who has supplied such
goods or services or both, shall issue to the recipient a debit note containing such particulars
as may be prescribed.
(4) Any registered person who issues a debit note in relation to a supply of goods or
services or both shall declare the details of such debit note in the return for the month during
which such debit note has been issued and the tax liability shall be adjusted in such manner
as may be prescribed.
Explanation.––For the purposes of this Act, the expression “debit note” shall include
a supplementary invoice.
CHAPTER VIII
ACCOUNTS AND RECORDS
35. (1) Every registered person shall keep and maintain, at his principal place of business,
as mentioned in the certificate of registration, a true and correct account of—
(a) production or manufacture of goods;
(b) inward and outward supply of goods or services or both;
(c) stock of goods;
(d) input tax credit availed;
(e) output tax payable and paid; and
(f) such other particulars as may be prescribed:
Provided that where more than one place of business is specified in the certificate of
registration, the accounts relating to each place of business shall be kept at such places of
business:
Provided further that the registered person may keep and maintain such accounts and
other particulars in electronic form in such manner as may be prescribed.
(2) Every owner or operator of warehouse or godown or any other place used for
storage of goods and every transporter, irrespective of whether he is a registered person or
not, shall maintain records of the consigner, consignee and other relevant details of the
goods in such manner as may be prescribed.
(3) The Commissioner may notify a class of taxable persons to maintain additional
accounts or documents for such purpose as may be specified therein.
(4) Where the Commissioner considers that any class of taxable persons is not in a
position to keep and maintain accounts in accordance with the provisions of this section, he
may, for reasons to be recorded in writing, permit such class of taxable persons to maintain
accounts in such manner as may be prescribed.
(5) Every registered person whose turnover during a financial year exceeds the
prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant
Accounts and
other records.
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and shall submit a copy of the audited annual accounts, the reconciliation statement under
sub-section (2) of section 44 and such other documents in such form and manner as may be
prescribed.
(6) Subject to the provisions of clause (h) of sub-section (5) of section 17, where
the registered person fails to account for the goods or services or both in accordance
with the provisions of sub-section (1), the proper officer shall determine the amount of
tax payable on the goods or services or both that are not accounted for, as if such goods
or services or both had been supplied by such person and the provisions of section 73
or section 74, as the case may be, shall, mutatis mutandis, apply for determination of
such tax.
36. Every registered person required to keep and maintain books of account or other
records in accordance with the provisions of sub-section (1) of section 35 shall retain them
until the expiry of seventy two months from the due date of furnishing of annual return for
the year pertaining to such accounts and records:
Provided that a registered person, who is a party to an appeal or revision or any other
proceedings before any Appellate Authority or Revisional Authority or Appellate Tribunal
or court, whether filed by him or by the Commissioner, or is under investigation for an
offence under Chapter XIX, shall retain the books of account and other records pertaining to
the subject matter of such appeal or revision or proceedings or investigation for a period of
one year after final disposal of such appeal or revision or proceedings or investigation, or for
the period specified above, whichever is later.
CHAPTER IX
RETURNS
37. (1) Every registered person, other than an Input Service Distributor, a non-resident
taxable person and a person paying tax under the provisions of section 10 or section 51 or
section 52, shall furnish, electronically, in such form and manner as may be prescribed, the
details of outward supplies of goods or services or both effected during a tax period on or
before the tenth day of the month succeeding the said tax period and such details shall be
communicated to the recipient of the said supplies within such time and in such manner as
may be prescribed:
Provided that the registered person shall not be allowed to furnish the details of
outward supplies during the period from the eleventh day to the fifteenth day of the month
succeeding the tax period:
Provided further that the Commissioner may, for reasons to be recorded in writing, by
notification, extend the time limit for furnishing such details for such class of taxable persons
as may be specified therein:
Provided also that any extension of time limit notified by the Commissioner of State
tax or Commissioner of Union territory tax shall be deemed to be notified by the
Commissioner.
(2) Every registered person who has been communicated the details under
sub-section (3) of section 38 or the details pertaining to inward supplies of Input Service
Distributor under sub-section (4) of section 38, shall either accept or reject the details so
communicated, on or before the seventeenth day, but not before the fifteenth day, of the
month succeeding the tax period and the details furnished by him under sub-section (1) shall
stand amended accordingly.
(3) Any registered person, who has furnished the details under sub-section (1) for
any tax period and which have remained unmatched under section 42 or section 43, shall,
upon discovery of any error or omission therein, rectify such error or omission in such
manner as may be prescribed, and shall pay the tax and interest, if any, in case there is a
Period of
retention of
accounts.
Furnishing
details of
outward
supplies.
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short payment of tax on account of such error or omission, in the return to be furnished for
such tax period:
Provided that no rectification of error or omission in respect of the details furnished
under sub-section (1) shall be allowed after furnishing of the return under section 39 for the
month of September following the end of the financial year to which such details pertain, or
furnishing of the relevant annual return, whichever is earlier.
Explanation.––For the purposes of this Chapter, the expression “details of outward
supplies” shall include details of invoices, debit notes, credit notes and revised invoices
issued in relation to outward supplies made during any tax period.
38. (1) Every registered person, other than an Input Service Distributor or a
non-resident taxable person or a person paying tax under the provisions of section 10,
section 51 or section 52, shall verify, validate, modify or delete, if required, the details
relating to outward supplies and credit or debit notes communicated under sub-section (1)
of section 37 to prepare the details of his inward supplies and credit or debit notes and may
include therein, the details of inward supplies and credit or debit notes received by him in
respect of such supplies that have not been declared by the supplier under sub-section (1)
of section 37.
(2) Every registered person, other than an Input Service Distributor or a non-resident
taxable person or a person paying tax under the provisions of section 10 or section 51 or
section 52, shall furnish, electronically, the details of inward supplies of taxable goods or
services or both, including inward supplies of goods or services or both on which the tax is
payable on reverse charge basis under this Act and inward supplies of goods or services or
both taxable under the Integrated Goods and Services Tax Act or on which integrated goods
and services tax is payable under section 3 of the Customs Tariff Act, 1975, and credit or debit
notes received in respect of such supplies during a tax period after the tenth day but on or
before the fifteenth day of the month succeeding the tax period in such form and manner as
may be prescribed:
Provided that the Commissioner may, for reasons to be recorded in writing, by
notification, extend the time limit for furnishing such details for such class of taxable persons
as may be specified therein:
Provided further that any extension of time limit notified by the Commissioner of State
tax or Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.
(3) The details of supplies modified, deleted or included by the recipient and furnished
under sub-section (2) shall be communicated to the supplier concerned in such manner and
within such time as may be prescribed.
(4) The details of supplies modified, deleted or included by the recipient in the
return furnished under sub-section (2) or sub-section (4) of section 39 shall be
communicated to the supplier concerned in such manner and within such time as may be
prescribed.
(5) Any registered person, who has furnished the details under sub-section (2) for any
tax period and which have remained unmatched under section 42 or section 43, shall, upon
discovery of any error or omission therein, rectify such error or omission in the tax period
during which such error or omission is noticed in such manner as may be prescribed, and
shall pay the tax and interest, if any, in case there is a short payment of tax on account of such
error or omission, in the return to be furnished for such tax period:
Provided that no rectification of error or omission in respect of the details furnished
under sub-section (2) shall be allowed after furnishing of the return under section 39 for the
month of September following the end of the financial year to which such details pertain, or
furnishing of the relevant annual return, whichever is earlier.
Furnishing
details of
inward
supplies.
51 of 1975.
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39. (1) Every registered person, other than an Input Service Distributor or a
non-resident taxable person or a person paying tax under the provisions of section 10,
section 51 or section 52 shall, for every calendar month or part thereof, furnish, in such form
and manner as may be prescribed, a return, electronically, of inward and outward supplies of
goods or services or both, input tax credit availed, tax payable, tax paid and such other
particulars as may be prescribed, on or before the twentieth day of the month succeeding
such calendar month or part thereof.
(2) A registered person paying tax under the provisions of section 10 shall, for each
quarter or part thereof, furnish, in such form and manner as may be prescribed, a return,
electronically, of turnover in the State or Union territory, inward supplies of goods or services
or both, tax payable and tax paid within eighteen days after the end of such quarter.
(3) Every registered person required to deduct tax at source under the provisions of
section 51 shall furnish, in such form and manner as may be prescribed, a return, electronically,
for the month in which such deductions have been made within ten days after the end of
such month.
(4) Every taxable person registered as an Input Service Distributor shall, for every
calendar month or part thereof, furnish, in such form and manner as may be prescribed, a
return, electronically, within thirteen days after the end of such month.
(5) Every registered non-resident taxable person shall, for every calendar month or
part thereof, furnish, in such form and manner as may be prescribed, a return, electronically,
within twenty days after the end of a calendar month or within seven days after the last day
of the period of registration specified under sub-section (1) of section 27, whichever is
earlier.
(6) The Commissioner may, for reasons to be recorded in writing, by notification,
extend the time limit for furnishing the returns under this section for such class of registered
persons as may be specified therein:
Provided that any extension of time limit notified by the Commissioner of State tax or
Union territory tax shall be deemed to be notified by the Commissioner.
(7) Every registered person, who is required to furnish a return under sub-section (1)
or sub-section (2) or sub-section (3) or sub-section (5), shall pay to the Government the tax
due as per such return not later than the last date on which he is required to furnish such
return.
(8) Every registered person who is required to furnish a return under sub-section (1) or
sub-section (2) shall furnish a return for every tax period whether or not any supplies of
goods or services or both have been made during such tax period.
(9) Subject to the provisions of sections 37 and 38, if any registered person
after furnishing a return under sub-section (1) or sub-section (2) or sub-section (3) or
sub-section (4) or sub-section (5) discovers any omission or incorrect particulars therein,
other than as a result of scrutiny, audit, inspection or enforcement activity by the tax authorities,
he shall rectify such omission or incorrect particulars in the return to be furnished for the
month or quarter during which such omission or incorrect particulars are noticed, subject to
payment of interest under this Act:
Provided that no such rectification of any omission or incorrect particulars shall be
allowed after the due date for furnishing of return for the month of September or second
quarter following the end of the financial year, or the actual date of furnishing of relevant
annual return, whichever is earlier.
(10) A registered person shall not be allowed to furnish a return for a tax period if the
return for any of the previous tax periods has not been furnished by him.
Furnishing of
returns.
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40. Every registered person who has made outward supplies in the period between
the date on which he became liable to registration till the date on which registration has
been granted shall declare the same in the first return furnished by him after grant of
registration.
41. (1) Every registered person shall, subject to such conditions and restrictions as
may be prescribed, be entitled to take the credit of eligible input tax, as self-assessed, in his
return and such amount shall be credited on a provisional basis to his electronic credit
ledger.
(2) The credit referred to in sub-section (1) shall be utilised only for payment of selfassessed
output tax as per the return referred to in the said sub-section.
42. (1) The details of every inward supply furnished by a registered person (hereafter
in this section referred to as the “recipient”) for a tax period shall, in such manner and within
such time as may be prescribed, be matched––
(a) with the corresponding details of outward supply furnished by the
corresponding registered person (hereafter in this section referred to as the “supplier”)
in his valid return for the same tax period or any preceding tax period;
(b) with the integrated goods and services tax paid under section 3 of the Customs
Tariff Act, 1975 in respect of goods imported by him; and
(c) for duplication of claims of input tax credit.
(2) The claim of input tax credit in respect of invoices or debit notes relating to inward
supply that match with the details of corresponding outward supply or with the integrated
goods and services tax paid under section 3 of the Customs Tariff Act, 1975 in respect of
goods imported by him shall be finally accepted and such acceptance shall be communicated,
in such manner as may be prescribed, to the recipient.
(3) Where the input tax credit claimed by a recipient in respect of an inward supply is
in excess of the tax declared by the supplier for the same supply or the outward supply is not
declared by the supplier in his valid returns, the discrepancy shall be communicated to both
such persons in such manner as may be prescribed.
(4) The duplication of claims of input tax credit shall be communicated to the recipient
in such manner as may be prescribed.
(5) The amount in respect of which any discrepancy is communicated under subsection
(3) and which is not rectified by the supplier in his valid return for the month in which
discrepancy is communicated shall be added to the output tax liability of the recipient, in
such manner as may be prescribed, in his return for the month succeeding the month in
which the discrepancy is communicated.
(6) The amount claimed as input tax credit that is found to be in excess on account of
duplication of claims shall be added to the output tax liability of the recipient in his return for
the month in which the duplication is communicated.
(7) The recipient shall be eligible to reduce, from his output tax liability, the amount
added under sub-section (5), if the supplier declares the details of the invoice or debit note
in his valid return within the time specified in sub-section (9) of section 39.
(8) A recipient in whose output tax liability any amount has been added under subsection
(5) or sub-section (6), shall be liable to pay interest at the rate specified under subsection
(1) of section 50 on the amount so added from the date of availing of credit till the
corresponding additions are made under the said sub-sections.
(9) Where any reduction in output tax liability is accepted under sub-section (7), the
interest paid under sub-section (8) shall be refunded to the recipient by crediting the amount
in the corresponding head of his electronic cash ledger in such manner as may be prescribed:
First return.
Claim of
input tax
credit and
provisional
acceptance
thereof.
Matching,
reversal and
reclaim of
input tax
credit.
51 of 1975.
51 of 1975.
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Provided that the amount of interest to be credited in any case shall not exceed the
amount of interest paid by the supplier.
(10) The amount reduced from the output tax liability in contravention of the
provisions of sub-section (7) shall be added to the output tax liability of the recipient in his
return for the month in which such contravention takes place and such recipient shall be
liable to pay interest on the amount so added at the rate specified in sub-section (3) of
section 50.
43. (1) The details of every credit note relating to outward supply furnished by a
registered person (hereafter in this section referred to as the “supplier”) for a tax period shall,
in such manner and within such time as may be prescribed, be matched––
(a) with the corresponding reduction in the claim for input tax credit by the
corresponding registered person (hereafter in this section referred to as the “recipient”)
in his valid return for the same tax period or any subsequent tax period; and
(b) for duplication of claims for reduction in output tax liability.
(2) The claim for reduction in output tax liability by the supplier that matches with the
corresponding reduction in the claim for input tax credit by the recipient shall be finally
accepted and communicated, in such manner as may be prescribed, to the supplier.
(3) Where the reduction of output tax liability in respect of outward supplies exceeds
the corresponding reduction in the claim for input tax credit or the corresponding credit note
is not declared by the recipient in his valid returns, the discrepancy shall be communicated
to both such persons in such manner as may be prescribed.
(4) The duplication of claims for reduction in output tax liability shall be communicated
to the supplier in such manner as may be prescribed.
(5) The amount in respect of which any discrepancy is communicated under subsection
(3) and which is not rectified by the recipient in his valid return for the month in
which discrepancy is communicated shall be added to the output tax liability of the supplier,
in such manner as may be prescribed, in his return for the month succeeding the month in
which the discrepancy is communicated.
(6) The amount in respect of any reduction in output tax liability that is found to be on
account of duplication of claims shall be added to the output tax liability of the supplier in his
return for the month in which such duplication is communicated.
(7) The supplier shall be eligible to reduce, from his output tax liability, the amount
added under sub-section (5) if the recipient declares the details of the credit note in his valid
return within the time specified in sub-section (9) of section 39.
(8) A supplier in whose output tax liability any amount has been added under subsection
(5) or sub-section (6), shall be liable to pay interest at the rate specified under subsection
(1) of section 50 in respect of the amount so added from the date of such claim for
reduction in the output tax liability till the corresponding additions are made under the said
sub-sections.
(9) Where any reduction in output tax liability is accepted under sub-section (7), the
interest paid under sub-section (8) shall be refunded to the supplier by crediting the amount
in the corresponding head of his electronic cash ledger in such manner as may be prescribed:
Provided that the amount of interest to be credited in any case shall not exceed the
amount of interest paid by the recipient.
(10) The amount reduced from output tax liability in contravention of the provisions of
sub-section (7) shall be added to the output tax liability of the supplier in his return for the
month in which such contravention takes place and such supplier shall be liable to pay
interest on the amount so added at the rate specified in sub-section (3) of section 50.
Matching,
reversal and
reclaim of
reduction in
output tax
liability.
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44. (1) Every registered person, other than an Input Service Distributor, a person
paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable
person, shall furnish an annual return for every financial year electronically in such form and
manner as may be prescribed on or before the thirty-first day of December following the end
of such financial year.
(2) Every registered person who is required to get his accounts audited in accordance
with the provisions of sub-section (5) of section 35 shall furnish, electronically, the annual
return under sub-section (1) along with a copy of the audited annual accounts and a
reconciliation statement, reconciling the value of supplies declared in the return furnished
for the financial year with the audited annual financial statement, and such other particulars
as may be prescribed.
45. Every registered person who is required to furnish a return under sub-section (1)
of section 39 and whose registration has been cancelled shall furnish a final return within
three months of the date of cancellation or date of order of cancellation, whichever is later, in
such form and manner as may be prescribed.
46. Where a registered person fails to furnish a return under section 39 or section 44 or
section 45, a notice shall be issued requiring him to furnish such return within fifteen days in
such form and manner as may be prescribed.
47. (1) Any registered person who fails to furnish the details of outward or inward
supplies required under section 37 or section 38 or returns required under section 39 or
section 45 by the due date shall pay a late fee of one hundred rupees for every day
during which such failure continues subject to a maximum amount of five thousand
rupees.
(2) Any registered person who fails to furnish the return required under section 44 by
the due date shall be liable to pay a late fee of one hundred rupees for every day during which
such failure continues subject to a maximum of an amount calculated at a quarter per cent. of
his turnover in the State or Union territory.
48. (1) The manner of approval of goods and services tax practitioners, their eligibility
conditions, duties and obligations, manner of removal and other conditions relevant for their
functioning shall be such as may be prescribed.
(2) A registered person may authorise an approved goods and services tax practitioner
to furnish the details of outward supplies under section 37, the details of inward supplies
under section 38 and the return under section 39 or section 44 or section 45 in such manner
as may be prescribed.
(3) Notwithstanding anything contained in sub-section (2), the responsibility for
correctness of any particulars furnished in the return or other details filed by the goods and
services tax practitioners shall continue to rest with the registered person on whose behalf
such return and details are furnished.
CHAPTER X
PAYMENT OF TAX
49. (1) Every deposit made towards tax, interest, penalty, fee or any other amount by a
person by internet banking or by using credit or debit cards or National Electronic Fund
Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions
and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such
person to be maintained in such manner as may be prescribed.
(2) The input tax credit as self-assessed in the return of a registered person shall be
credited to his electronic credit ledger, in accordance with section 41, to be maintained in
such manner as may be prescribed.
Annual return.
Final return.
Notice to
return
defaulters.
Goods and
services tax
practitioners.
Payment of
tax, interest,
penalty and
other
amounts.
Levy of late
fee.
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(3) The amount available in the electronic cash ledger may be used for making any
payment towards tax, interest, penalty, fees or any other amount payable under the provisions
of this Act or the rules made thereunder in such manner and subject to such conditions and
within such time as may be prescribed.
(4) The amount available in the electronic credit ledger may be used for making any
payment towards output tax under this Act or under the Integrated Goods and Services Tax
Act in such manner and subject to such conditions and within such time as may be prescribed.
(5) The amount of input tax credit available in the electronic credit ledger of the registered
person on account of––
(a) integrated tax shall first be utilised towards payment of integrated tax and the
amount remaining, if any, may be utilised towards the payment of central tax and State
tax, or as the case may be, Union territory tax, in that order;
(b) the central tax shall first be utilised towards payment of central tax and the
amount remaining, if any, may be utilised towards the payment of integrated tax;
(c) the State tax shall first be utilised towards payment of State tax and the
amount remaining, if any, may be utilised towards payment of integrated tax;
(d) the Union territory tax shall first be utilised towards payment of Union territory
tax and the amount remaining, if any, may be utilised towards payment of integrated tax;
(e) the central tax shall not be utilised towards payment of State tax or Union
territory tax; and
(f) the State tax or Union territory tax shall not be utilised towards payment of
central tax.
(6) The balance in the electronic cash ledger or electronic credit ledger after payment
of tax, interest, penalty, fee or any other amount payable under this Act or the rules made
thereunder may be refunded in accordance with the provisions of section 54.
(7) All liabilities of a taxable person under this Act shall be recorded and maintained in
an electronic liability register in such manner as may be prescribed.
(8) Every taxable person shall discharge his tax and other dues under this Act or the
rules made thereunder in the following order, namely:––
(a) self-assessed tax, and other dues related to returns of previous tax periods;
(b) self-assessed tax, and other dues related to the return of the current tax period;
(c) any other amount payable under this Act or the rules made thereunder
including the demand determined under section 73 or section 74;
(9) Every person who has paid the tax on goods or services or both 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 or services or both.
Explanation.––For the purposes of this section,—
(a) the date of credit to the account of the Government in the authorised bank
shall be deemed to be the date of deposit in the electronic cash ledger;
(b) the expression,—
(i) “tax dues” means the tax payable under this Act and does not include
interest, fee and penalty; and
(ii) “other dues” means interest, penalty, fee or any other amount payable
under this Act or the rules made thereunder.
50. (1) Every person who is liable to pay tax in accordance with the provisions of this
Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government
within the period prescribed, shall for the period for which the tax or any part thereof remains
unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be
notified by the Government on the recommendations of the Council.
Interest on
delayed
payment of
tax.
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(2) The interest under sub-section (1) shall be calculated, in such manner as may be
prescribed, from the day succeeding the day on which such tax was due to be paid.
(3) A taxable person who makes an undue or excess claim of input tax credit under subsection
(10) of section 42 or undue or excess reduction in output tax liability under subsection
(10) of section 43, shall pay interest on such undue or excess claim or on such undue
or excess reduction, as the case may be, at such rate not exceeding twenty-four per cent., as
may be notified by the Government on the recommendations of the Council.
51. (1) Notwithstanding anything to the contrary contained in this Act, the Government
may mandate,––
(a) a department or establishment of the Central Government 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 Government
on the recommendations of the Council,
(hereafter in this section referred to as “the deductor”), to deduct tax at the rate of one per
cent. from the payment made or credited to the supplier (hereafter in this section referred to
as “the deductee”) of taxable goods or services or both, where the total value of such supply,
under a contract, exceeds two lakh and fifty thousand rupees:
Provided that no deduction shall be made if the location of the supplier and the place
of supply is in a State or Union territory which is different from the State or as the case may
be, Union territory of registration of the recipient.
Explanation.––For the purpose of deduction of tax specified above, the value of
supply shall be taken as the amount excluding the central tax, State tax, Union territory tax,
integrated tax and cess indicated in the invoice.
(2) The amount deducted as tax under this section shall be paid to the Government by
the deductor within ten days after the end of the month in which such deduction is made, in
such manner as may be prescribed.
(3) The deductor shall furnish to the deductee a certificate mentioning therein the
contract value, rate of deduction, amount deducted, amount paid to the Government and
such other particulars in such manner as may be prescribed.
(4) If any deductor fails to furnish to the deductee the certificate, after deducting the
tax at source, within five days of crediting the amount so deducted to the Government, the
deductor shall pay, by way of a late fee, a sum of one hundred rupees per day from the day
after the expiry of such five day period until the failure is rectified, subject to a maximum
amount of five thousand rupees.
(5) The deductee shall claim credit, in his electronic cash ledger, of the tax deducted
and reflected in the return of the deductor furnished under sub-section (3) of section 39, in
such manner as may be prescribed.
(6) If any deductor fails to pay to the Government the amount deducted as tax under
sub-section (1), he shall pay interest in accordance with the provisions of sub-section (1) of
section 50, in addition to the amount of tax deducted.
(7) The determination of the amount in default under this section shall be made in the
manner specified in section 73 or section74.
(8) The refund to the deductor or the deductee arising on account of excess or erroneous
deduction shall be dealt with in accordance with the provisions of section 54:
Provided that no refund to the deductor shall be granted, if the amount deducted
has been credited to the electronic cash ledger of the deductee.
Tax deduction
at source.
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52. (1) Notwithstanding anything to the contrary contained in this Act, every electronic
commerce operator (hereafter in this section referred to as the “operator”), not being an
agent, shall collect an amount calculated at such rate not exceeding one per cent., as may be
notified by the Government on the recommendations of the Council, of the net value of
taxable supplies made through it by other suppliers where the consideration with respect to
such supplies is to be collected by the operator.
Explanation.––For the purposes of this sub-section, the expression “net value of
taxable supplies” shall mean the aggregate value of taxable supplies of goods or services or
both, other than services notified under sub-section (5) of section 9, made during any month
by all registered persons through the operator reduced by the aggregate value of taxable
supplies returned to the suppliers during the said month.
(2) The power to collect the amount specified in sub-section (1) shall be without
prejudice to any other mode of recovery from the operator.
(3) The amount collected under sub-section (1) shall be paid to the Government by the
operator within ten days after the end of the month in which such collection is made, in such
manner as may be prescribed.
(4) Every operator who collects the amount specified in sub-section (1) shall furnish a
statement, electronically, containing the details of outward supplies of goods or services or
both effected through it, including the supplies of goods or services or both returned through
it, and the amount collected under sub-section (1) during a month, in such form and manner
as may be prescribed, within ten days after the end of such month.
(5) Every operator who collects the amount specified in sub-section (1) shall furnish
an annual statement, electronically, containing the details of outward supplies of goods or
services or both effected through it, including the supplies of goods or services or both
returned through it, and the amount collected under the said sub-section during the financial
year, in such form and manner as may be prescribed, before the thirty first day of December
following the end of such financial year.
(6) If any operator after furnishing a statement under sub-section (4) discovers any
omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection
or enforcement activity by the tax authorities, he shall rectify such omission or incorrect
particulars in the statement to be furnished for the month during which such omission
or incorrect particulars are noticed, subject to payment of interest, as specified in
sub-section (1) of section 50:
Provided that no such rectification of any omission or incorrect particulars shall be
allowed after the due date for furnishing of statement for the month of September following
the end of the financial year or the actual date of furnishing of the relevant annual statement,
whichever is earlier.
(7) The supplier who has supplied the goods or services or both through the operator
shall claim credit, in his electronic cash ledger, of the amount collected and reflected in the
statement of the operator furnished under sub-section (4), in such manner as may be
prescribed.
(8) The details of supplies furnished by every operator under sub-section (4) shall be
matched with the corresponding details of outward supplies furnished by the concerned
supplier registered under this Act in such manner and within such time as may be prescribed.
(9) Where the details of outward supplies furnished by the operator under
sub-section (4) do not match with the corresponding details furnished by the supplier under
section 37, the discrepancy shall be communicated to both persons in such manner and
within such time as may be prescribed.
(10) The amount in respect of which any discrepancy is communicated under
sub-section (9) and which is not rectified by the supplier in his valid return or the operator in
Collection of
tax at source.
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his statement for the month in which discrepancy is communicated, shall be added to the
output tax liability of the said supplier, where the value of outward supplies furnished by the
operator is more than the value of outward supplies furnished by the supplier, in his return
for the month succeeding the month in which the discrepancy is communicated in such
manner as may be prescribed.
(11) The concerned supplier, in whose output tax liability any amount has been added
under sub-section (10), shall pay the tax payable in respect of such supply along with
interest, at the rate specified under sub-section (1) of section 50 on the amount so added
from the date such tax was due till the date of its payment.
(12) Any authority not below the rank of Deputy Commissioner may serve a notice,
either before or during the course of any proceedings under this Act, requiring the operator
to furnish such details relating to—
(a) supplies of goods or services or both effected through such operator during
any period; or
(b) stock of goods held by the suppliers making supplies through such operator
in the godowns or warehouses, by whatever name called, managed by such operator
and declared as additional places of business by such suppliers,
as may be specified in the notice.
(13) Every operator on whom a notice has been served under sub-section (12) shall
furnish the required information within fifteen working days of the date of service of such
notice.
(14) Any person who fails to furnish the information required by the notice served
under sub-section (12) shall, without prejudice to any action that may be taken under
section 122, be liable to a penalty which may extend to twenty-five thousand rupees.
Explanation.—For the purposes of this section, the expression “concerned supplier”
shall mean the supplier of goods or services or both making supplies through the operator.
53. On utilisation of input tax credit availed under this Act for payment of tax dues
under the Integrated Goods and Services Tax Act in accordance with the provisions of
sub-section (5) of section 49, as reflected in the valid return furnished under sub-section (1)
of section 39, the amount collected as central tax shall stand reduced by an amount equal to
such credit so utilised and the Central Government shall transfer an amount equal to the
amount so reduced from the central tax account to the integrated tax account in such manner
and within such time as may be prescribed.
CHAPTER XI
REFUNDS
54. (1) Any person claiming refund of any tax and interest, if any, paid on such tax or
any other amount paid by him, may make an application before the expiry of two years from
the relevant date in such form and manner as may be prescribed:
Provided that a registered person, claiming refund of any balance in the electronic
cash ledger in accordance with the provisions of sub-section (6) of section 49, may claim
such refund in the return furnished under section 39 in such manner as may be prescribed.
(2) A specialised agency of the United Nations Organisation or any Multilateral Financial
Institution and Organisation notified under the United Nations (Privileges and Immunities)
Act, 1947, Consulate or Embassy of foreign countries or any other person or class of persons,
as notified under section 55, entitled to a refund of tax paid by it on inward supplies of goods
or services or both, may make an application for such refund, in such form and manner as
may be prescribed, before the expiry of six months from the last day of the quarter in which
such supply was received.
Transfer of
input tax
credit.
Refund of tax.
46 of 1947.
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(3) Subject to the provisions of sub-section (10), a registered person may claim refund
of any unutilised input tax credit at the end of any tax period:
Provided that no refund of unutilised input tax credit shall be allowed in cases other
than––
(i) zero rated supplies made without payment of tax;
(ii) 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.
(4) The application shall be accompanied by—
(a) such documentary evidence as may be prescribed to establish that a refund
is due to the applicant; and
(b) such documentary or other evidence (including the documents referred to in
section 33) as the applicant may furnish to establish that the amount of tax and interest,
if any, paid on such tax or any other amount paid in relation to which such refund is
claimed was collected from, or paid by, him and the incidence of such tax and interest
had not been passed on to any other person:
Provided that where the amount claimed as refund is less than two lakh rupees,
it shall not be necessary for the applicant to furnish any documentary and other
evidences but he may file a declaration, based on the documentary or other evidences
available with him, certifying that the incidence of such tax and interest had not been
passed on to any other person.
(5) If, on receipt of any such application, the proper officer is satisfied that the whole
or part of the amount claimed as refund is refundable, he may make an order accordingly and
the amount so determined shall be credited to the Fund referred to in section 57.
(6) Notwithstanding anything contained in sub-section (5), the proper officer may,
in the case of any claim for refund on account of zero-rated supply of goods or services or
both made by registered persons, other than such category of registered persons as may
be notified by the Government on the recommendations of the Council, refund on a
provisional basis, ninety per cent. of the total amount so claimed, excluding the amount of
input tax credit provisionally accepted, in such manner and subject to such conditions,
limitations and safeguards as may be prescribed and thereafter make an order under subsection
(5) for final settlement of the refund claim after due verification of documents
furnished by the applicant.
(7) The proper officer shall issue the order under sub-section (5) within sixty days from
the date of receipt of application complete in all respects.
(8) Notwithstanding anything contained in sub-section (5), the refundable amount
shall, instead of being credited to the Fund, be paid to the applicant, if such amount is
relatable to—
(a) refund of tax paid on zero-rated supplies of goods or services or both or on
inputs or input services used in making such zero-rated supplies;
(b) refund of unutilised input tax credit under sub-section (3);
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(c) refund of tax paid on a supply which is not provided, either wholly or partially,
and for which invoice has not been issued, or where a refund voucher has been issued;
(d) refund of tax in pursuance of section 77;
(e) 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
(f) the tax or interest borne by such other class of applicants as the Government
may, on the recommendations of the Council, by notification, specify.
(9) Notwithstanding anything to the contrary contained in any judgment, decree,
order or direction of the Appellate Tribunal or any court or in any other provisions of this Act
or the rules made thereunder or in any other law for the time being in force, no refund shall be
made except in accordance with the provisions of sub-section (8).
(10) Where any refund is due under sub-section (3) to a registered person who has
defaulted in furnishing any return or who is required to pay any tax, interest or penalty, which
has not been stayed by any court, Tribunal or Appellate Authority by the specified date, the
proper officer may—
(a) withhold payment of refund due until the said person has furnished the
return or paid the tax, interest or penalty, as the case may be;
(b) deduct from the refund due, any tax, interest, penalty, fee or any other amount
which the taxable person is liable to pay but which remains unpaid under this Act or
under the existing law.
Explanation.––For the purposes of this sub-section, the expression “specified date”
shall mean the last date for filing an appeal under this Act.
(11) Where an order giving rise to a refund is the subject matter of an appeal or further
proceedings or where any other proceedings under this Act is pending and the Commissioner
is of the opinion that grant of such refund is likely to adversely affect the revenue in the said
appeal or other proceedings on account of malfeasance or fraud committed, he may, after
giving the taxable person an opportunity of being heard, withhold the refund till such time as
he may determine.
(12) Where a refund is withheld under sub-section (11), the taxable person shall,
notwithstanding anything contained in section 56, be entitled to interest at such rate not
exceeding six per cent. as may be notified on the recommendations of the Council, if as a
result of the appeal or further proceedings he becomes entitled to refund.
(13) Notwithstanding anything to the contrary contained in this section, the amount
of advance tax deposited by a casual taxable person or a non-resident taxable person under
sub-section (2) of section 27, shall not be refunded unless such person has, in respect of the
entire period for which the certificate of registration granted to him had remained in force,
furnished all the returns required under section 39.
(14) Notwithstanding anything contained in this section, no refund under sub-section (5)
or sub-section (6) shall be paid to an applicant, if the amount is less than one thousand rupees.
Explanation.—For the purposes of this section,––
(1) “refund” includes refund of tax paid on zero-rated supplies of goods or
services or both or on inputs or input services used in making such zero-rated supplies,
or refund of tax on the supply of goods regarded as deemed exports, or refund of
unutilised input tax credit as provided under sub-section (3).
(2) “relevant date” means—
(a) in the case of goods exported out of India where a refund of tax paid is
available in respect of goods themselves or, as the case may be, the inputs or
input services used in such goods,––
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(i) if the goods are exported by sea or air, the date on which the ship
or the aircraft in which such goods are loaded, leaves India; or
(ii) if the goods are exported by land, the date on which such goods
pass the frontier; or
(iii) if the goods are exported by post, the date of despatch of goods
by the Post Office concerned to a place outside India;
(b) in the case of supply of goods regarded as deemed exports where a
refund of tax paid is available in respect of the goods, the date on which the
return relating to such deemed exports is furnished;
(c) in the case of services exported out of India where a refund of tax paid
is available in respect of services themselves or, as the case may be, the inputs
or input services used in such services, the date of––
(i) receipt of payment in convertible foreign exchange, where the
supply of services had been completed prior to the receipt of such payment;
or
(ii) issue of invoice, where payment for the services had been received
in advance prior to the date of issue of the invoice;
(d) in case where the tax becomes refundable as a consequence of judgment,
decree, order or direction of the Appellate Authority, Appellate Tribunal or any
court, the date of communication of such judgment, decree, order or direction;
(e) in the case of refund of unutilised input tax credit under
sub-section (3), the end of the financial year in which such claim for refund
arises;
(f) in the case where tax is paid provisionally under this Act or the rules
made thereunder, the date of adjustment of tax after the final assessment thereof;
(g) in the case of a person, other than the supplier, the date of receipt of
goods or services or both by such person; and
(h) in any other case, the date of payment of tax.
55. The Government may, on the recommendations of the Council, by notification,
specify any specialised agency of the United Nations Organisation or any Multilateral Financial
Institution and Organisation notified under the United Nations (Privileges and Immunities)
Act, 1947, Consulate or Embassy of foreign countries and any other person or class of
persons as may be specified in this behalf, who shall, subject to such conditions and restrictions
as may be prescribed, be entitled to claim a refund of taxes paid on the notified supplies of
goods or services or both received by them.
56. If any tax ordered to be refunded under sub-section (5) of section 54 to any
applicant is not refunded within sixty days from the date of receipt of application under subsection
(1) of that section, interest at such rate not exceeding six per cent. as may be specified
in the notification issued by the Government on the recommendations of the Council shall be
payable in respect of such refund from the date immediately after the expiry of sixty days
from the date of receipt of application under the said sub-section till the date of refund of
such tax:
Provided that where any claim of refund arises from an order passed by an adjudicating
authority or Appellate Authority or Appellate Tribunal or court which has attained finality
and the same is not refunded within sixty days from the date of receipt of application filed
consequent to such order, interest at such rate not exceeding nine per cent. as may be
notified by the Government on the recommendations of the Council shall be payable in
46 of 1947.
Refund in
certain cases.
Interest on
delayed
refunds.
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respect of such refund from the date immediately after the expiry of sixty days from the date
of receipt of application till the date of refund.
Explanation.––For the purposes of this section, where any order of refund is made by
an Appellate Authority, Appellate Tribunal or any court against an order of the proper
officer under sub-section (5) of section 54, the order passed by the Appellate Authority,
Appellate Tribunal or by the court shall be deemed to be an order passed under the said
sub-section (5).
57. The Government shall constitute a Fund, to be called the Consumer Welfare Fund
and there shall be credited to the Fund,—
(a) the amount referred to in sub-section (5) of section 54;
(b) any income from investment of the amount credited to the Fund; and
(c) such other monies received by it,
in such manner as may be prescribed.
58. (1) All sums credited to the Fund shall be utilised by the Government for the
welfare of the consumers in such manner as may be prescribed.
(2) The Government or the authority specified by it shall maintain proper and separate
account and other relevant records in relation to the Fund and prepare an annual statement
of accounts in such form as may be prescribed in consultation with the Comptroller and
Auditor General of India.
CHAPTER XII
ASSESSMENT
59. Every registered person shall self assess the taxes payable under this Act and
furnish a return for each tax period as specified under section 39.
60. (1) Subject to the provisions of sub-section (2), 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.
(2) The payment of tax on provisional basis may be allowed, if the taxable person
executes a bond in such form as may be prescribed, and with such surety or security as the
proper officer may deem fit, binding the taxable person for payment of the difference between
the amount of tax as may be finally assessed and the amount of tax provisionally assessed.
(3) The proper officer shall, within a period not exceeding six months from the date of
the communication of the order issued under sub-section (1), pass the final assessment
order after taking into account such information as may be required for finalizing the
assessment:
Provided that the period specified in this sub-section may, on sufficient cause being
shown and for reasons to be recorded in writing, be extended by the Joint Commissioner or
Additional Commissioner for a further period not exceeding six months and by the
Commissioner for such further period not exceeding four years.
(4) The registered person shall be liable to pay interest on any tax payable on the
supply of goods or services or both under provisional assessment but not paid on the due
date specified under sub-section (7) of section 39 or the rules made thereunder, at the rate
specified under sub-section (1) of section 50, from the first day after the due date of payment
of tax in respect of the said supply of goods or services or both till the date of actual
Consumer
Welfare Fund.
Utilisation of
Fund.
Selfassessment.
Provisional
assessment.
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payment, whether such amount is paid before or after the issuance of order for final
assessment.
(5) Where the registered person is entitled to a refund consequent to the order of final
assessment under sub-section (3), subject to the provisions of sub-section (8) of section 54,
interest shall be paid on such refund as provided in section 56.
61. (1) The proper officer may scrutinize the return and related particulars furnished by
the registered person to verify the correctness of the return and inform him of the discrepancies
noticed, if any, in such manner as may be prescribed and seek his explanation thereto.
(2) In case the explanation is found acceptable, the registered person shall be informed
accordingly and no further action shall be taken in this regard.
(3) In case no satisfactory explanation is furnished within a period of thirty days of
being informed by the proper officer or such further period as may be permitted by him or
where the registered person, after accepting the discrepancies, fails to take the corrective
measure in his return for the month in which the discrepancy is accepted, the proper officer
may initiate appropriate action including those under section 65 or section 66 or section 67,
or proceed to determine the tax and other dues under section 73 or section 74.
62. (1) Notwithstanding anything to the contrary contained in section 73 or section 74,
where a registered person fails to furnish the return under section 39 or section 45, even after
the service of a notice under section 46, the proper officer may proceed to assess the tax
liability of the said person to the best of his judgement taking into account all the relevant
material which is available or which he has 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.
(2) Where the registered person furnishes a valid return within thirty days of the
service of the assessment order under sub-section (1), the said assessment order shall be
deemed to have been withdrawn but the liability for payment of interest under sub-section
(1) of section 50 or for payment of late fee under section 47 shall continue.
63. Notwithstanding anything to the contrary contained in section 73 or section
74, where 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 proceed to assess the tax liability of such taxable person to the
best of his judgement for the relevant tax periods 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:
Provided that no such assessment order shall be passed without giving the person an
opportunity of being heard.
64. (1) The proper officer may, on any evidence showing a tax liability of a person
coming to his notice, with the previous permission of Additional Commissioner or Joint
Commissioner, proceed to assess the tax liability of such person to protect the interest of
revenue and issue an assessment order, if he has sufficient grounds to believe that any delay
in doing so may adversely affect the interest of revenue:
Provided that where the taxable person to whom the liability pertains is not ascertainable
and such liability pertains to supply of goods, the person in charge of such goods shall be
deemed to be the taxable person liable to be assessed and liable to pay tax and any other
amount due under this section.
(2) On an application made by the taxable person within thirty days from the date of
receipt of order passed under sub-section (1) or on his own motion, if the Additional
Commissioner or Joint Commissioner considers that such order is erroneous, he may withdraw
such order and follow the procedure laid down in section 73 or section 74.
Scrutiny of
returns.
Assessment of
non-filers of
returns.
Assessment of
unregistered
persons.
Summary
assessment in
certain
special cases.
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CHAPTER XIII
AUDIT
65. (1) The Commissioner 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.
(2) The officers referred to in sub-section (1) may conduct audit at the place of business
of the registered person or in their office.
(3) The registered person shall be informed by way of a notice not less than fifteen
working days prior to the conduct of audit in such manner as may be prescribed.
(4) The audit under sub-section (1) shall be completed within a period of three months
from the date of commencement of the audit:
Provided that where the Commissioner is satisfied that audit in respect of such
registered person cannot be completed within three months, he may, for the reasons to be
recorded in writing, extend the period by a further period not exceeding six months.
Explanation.––For the purposes of this sub-section, the expression “commencement
of audit” shall mean the date on which the records and other documents, called for by the tax
authorities, are made available by the registered person or the actual institution of audit at
the place of business, whichever is later.
(5) During the course of audit, the authorised officer may require the registered
person,—
(i) to afford him the necessary facility to verify the books of account or other
documents as he may require;
(ii) to furnish such information as he may require and render assistance for
timely completion of the audit.
(6) On conclusion of audit, the proper officer shall, within thirty days, inform the
registered person, whose records are audited, about the findings, his rights and obligations
and the reasons for such findings.
(7) Where the audit conducted under sub-section (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.
66. (1) If at any stage of scrutiny, inquiry, 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 and the interest of revenue, is of the opinion that the value
has not been correctly declared or the credit availed is not within the normal limits, he 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 by a chartered
accountant or a cost accountant as may be nominated by the Commissioner.
(2) The chartered accountant or cost accountant so nominated shall, within the period
of ninety days, submit a report of such audit duly signed and certified by him to the said
Assistant Commissioner mentioning therein such other particulars as may be specified:
Provided that the Assistant Commissioner may, on an application made to him in this
behalf by the registered person or the chartered accountant or cost accountant or for any
material and sufficient reason, extend the said period by a further period of ninety days.
(3) The provisions of sub-section (1) shall have effect notwithstanding that the
accounts of the registered person have been audited under any other provisions of this Act
or any other law for the time being in force.
Audit by tax
authorities.
Special audit.
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(4) The registered person shall be given an opportunity of being heard in respect of
any material gathered on the basis of special audit under sub-section (1) which is proposed
to be used in any proceedings against him under this Act or the rules made thereunder.
(5) The expenses of the examination and audit of records under sub-section (1), including
the remuneration of such chartered accountant or cost accountant, shall be determined and
paid by the Commissioner and such determination shall be final.
(6) Where the special audit conducted under sub-section (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.
CHAPTER XIV
INSPECTION, SEARCH, SEIZURE AND ARREST
67. (1) Where the proper officer, not below the rank of Joint Commissioner, has reasons
to believe that––
(a) a taxable person has suppressed any transaction relating to supply of goods
or services or both or the stock of goods in hand, or has claimed input tax credit in
excess of his entitlement under this Act or has indulged in contravention of any of the
provisions of this Act or the rules made thereunder to evade tax under this Act; or
(b) any person engaged in the business of transporting goods or an owner or
operator of a warehouse or a godown or any other place is keeping goods which have
escaped payment of tax or has kept his accounts or goods in such a manner as is likely
to cause evasion of tax payable under this Act,
he may authorise in writing any other officer of central tax to inspect any places of business
of the taxable person or the persons engaged in the business of transporting goods or the
owner or the operator of warehouse or godown or any other place.
(2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant
to an inspection carried out under sub-section (1) or otherwise, 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 in any place, he
may authorise in writing any other officer of central tax to search and seize or may himself
search and seize such goods, documents or books or things:
Provided that where it is not practicable to seize any such goods, the proper officer, or
any officer authorized by him, may serve on the owner or the custodian of the goods an order
that he shall not remove, part with, or otherwise deal with the goods except with the previous
permission of such officer:
Provided further that the documents or books or things so seized shall be retained by
such officer only for so long as may be necessary for their examination and for any inquiry or
proceedings under this Act.
(3) The documents, books or things referred to in sub-section (2) or any other
documents, books or things produced by a taxable person or any other person, which have
not been relied upon for the issue of notice under this Act or the rules made thereunder, shall
be returned to such person within a period not exceeding thirty days of the issue of the said
notice.
(4) The officer authorised under sub-section (2) shall have the power to seal or break
open the door of any premises or to break open any almirah, electronic devices, box, receptacle
in which any goods, accounts, registers or documents of the person are suspected to be
concealed, where access to such premises, almirah, electronic devices, box or receptacle is
denied.
(5) The person from whose custody any documents are seized under sub-section (2)
shall be entitled to make copies thereof or take extracts therefrom in the presence of an
Power of
inspection,
search and
seizure.
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authorised officer at such place and time as such officer may indicate in this behalf except
where making such copies or taking such extracts may, in the opinion of the proper officer,
prejudicially affect the investigation.
(6) The goods so seized under sub-section (2) shall be released, on a provisional
basis, upon execution of a bond and furnishing of a security, in such manner and of such
quantum, respectively, as may be prescribed or on payment of applicable tax, interest and
penalty payable, as the case may be.
(7) Where any goods are seized under sub-section (2) and no notice in respect thereof
is given within six months of the seizure of the goods, the goods shall be returned to the
person from whose possession they were seized:
Provided that the period of six months may, on sufficient cause being shown, be
extended by the proper officer for a further period not exceeding six months.
(8) The Government may, having regard to the perishable or hazardous nature of any
goods, depreciation in the value of the goods with the passage of time, constraints of
storage space for the goods or any other relevant considerations, by notification, specify
the goods or class of goods which shall, as soon as may be after its seizure under subsection
(2), be disposed of by the proper officer in such manner as may be prescribed.
(9) Where any goods, being goods specified under sub-section (8), have been seized
by a proper officer, or any officer authorised by him under sub-section (2), he shall prepare
an inventory of such goods in such manner as may be prescribed.
(10) The provisions of the Code of Criminal Procedure, 1973, relating to search and
seizure, shall, so far as may be, apply to search and seizure under this section subject to the
modification that sub-section (5) of section 165 of the said Code shall have effect as if for the
word “Magistrate”, wherever it occurs, the word “Commissioner” were substituted.
(11) Where the proper officer has reasons to believe that any person has evaded or is
attempting to evade the payment of any tax, he may, for reasons to be recorded in writing,
seize the accounts, registers or documents of such person produced before him and shall
grant a receipt for the same, and shall retain the same for so long as may be necessary in
connection with any proceedings under this Act or the rules made thereunder for prosecution.
(12) The Commissioner or an officer authorised by him may cause purchase of any
goods or services or both by any person authorised by him from the business premises of
any taxable person, to check the issue of tax invoices or bills of supply by such taxable
person, and on return of goods so purchased by such officer, such taxable person or any
person in charge of the business premises shall refund the amount so paid towards the
goods after cancelling any tax invoice or bill of supply issued earlier.
68. (1) The Government may require the person in charge of a conveyance carrying
any consignment of goods of value exceeding such amount as may be specified to carry with
him such documents and such devices as may be prescribed.
(2) The details of documents required to be carried under sub-section (1) shall be
validated in such manner as may be prescribed.
(3) Where any conveyance referred to in sub-section (1) is intercepted by the proper
officer at any place, he may require the person in charge of the said conveyance to produce
the documents prescribed under the said sub-section and devices for verification, and the
said person shall be liable to produce the documents and devices and also allow the inspection
of goods.
69. (1) Where the Commissioner has reasons to believe that a person has committed
any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of
sub-section (1) of section 132 which is punishable under clause (i) or (ii) of
2 of 1974.
Inspection of
goods in
movement.
Power to
arrest.
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sub-section (1), or sub-section (2) of the said section, he may, by order, authorise any officer
of central tax to arrest such person.
(2) Where a person is arrested under sub-section (1) for an offence specified under subsection
(5) of section 132, the officer authorised to arrest the person shall inform such person
of the grounds of arrest and produce him before a Magistrate within twenty four hours.
(3) Subject to the provisions of the Code of Criminal Procedure, 1973,––
(a) where a person is arrested under sub-section (1) for any offence specified
under sub-section (4) of section 132, he shall be admitted to bail or in default of bail,
forwarded to the custody of the Magistrate;
(b) in the case of a non-cognizable and bailable offence, the Deputy Commissioner
or the Assistant Commissioner shall, for the purpose of releasing an arrested person
on bail or otherwise, have the same powers and be subject to the same provisions as
an officer-in-charge of a police station.
70. (1) The proper officer under this Act shall have power to summon any person
whose attendance he considers necessary either to give evidence or to produce a document
or any other thing in any inquiry in the same manner, as provided in the case of a civil court
under the provisions of the Code of Civil Procedure, 1908.
(2) Every such inquiry referred to in sub-section (1) shall be deemed to be a “judicial
proceedings” within the meaning of section 193 and section 228 of the Indian Penal Code.
71. (1) Any officer under this Act, authorised by the proper officer not below the rank
of Joint Commissioner, shall have access to any place of business of a registered person to
inspect books of account, documents, computers, computer programs, computer software
whether installed in a computer or otherwise and such other things as he may require and
which may be available at such place, for the purposes of carrying out any audit, scrutiny,
verification and checks as may be necessary to safeguard the interest of revenue.
(2) Every person in charge of place referred to in sub-section (1) shall, on demand,
make available to the officer authorised under sub-section (1) or the audit party deputed by
the proper officer or a cost accountant or chartered accountant nominated under
section 66—
(i) such records as prepared or maintained by the registered person and declared
to the proper officer in such manner as may be prescribed;
(ii) trial balance or its equivalent;
(iii) statements of annual financial accounts, duly audited, wherever required;
(iv) cost audit report, if any, under section 148 of the Companies Act, 2013;
(v) the income-tax audit report, if any, under section 44AB of the Income-tax
Act, 1961; and
(vi) any other relevant record,
for the scrutiny by the officer or audit party or the chartered accountant or cost accountant
within a period not exceeding fifteen working days from the day when such demand is made,
or such further period as may be allowed by the said officer or the audit party or the chartered
accountant or cost accountant.
72. (1) All officers of Police, Railways, Customs, and those officers engaged in the
collection of land revenue, including village officers, officers of State tax and officers of
Union territory tax shall assist the proper officers in the implementation of this Act.
(2) The Government may, by notification, empower and require any other class of
officers to assist the proper officers in the implementation of this Act when called upon to do
so by the Commissioner.
2 of 1974.
5 of 1908
Power to
summon
persons to
give evidence
and produce
documents.
45 of 1860.
Access to
business
premises.
18 of 2013.
43 of 1961.
Officers to
assist proper
officers.
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CHAPTER XV
DEMANDS AND RECOVERY
73. (1) Where it appears to the proper officer that any tax has not been paid or short
paid or erroneously refunded, or where input tax credit has been wrongly availed or utilised
for any reason, other than the reason of fraud or any wilful-misstatement or suppression of
facts to evade tax, he shall serve notice on the person chargeable with tax which has not been
so paid or which has been so short paid or to whom the refund has erroneously been made,
or who has wrongly availed or utilised input tax credit, requiring him to show cause as to why
he should not pay the amount specified in the notice along with interest payable thereon
under section 50 and a penalty leviable under the provisions of this Act or the rules made
thereunder.
(2) The proper officer shall issue the notice under sub-section (1) at least three months
prior to the time limit specified in sub-section (10) for issuance of order.
(3) Where a notice has been issued for any period under sub-section (1), the proper
officer may serve a statement, containing the details of tax not paid or short paid or erroneously
refunded or input tax credit wrongly availed or utilised for such periods other than those
covered under sub-section (1), on the person chargeable with tax.
(4) The service of such statement shall be deemed to be service of notice on such
person under sub-section (1), subject to the condition that the grounds relied upon for such
tax periods other than those covered under sub-section (1) are the same as are mentioned in
the earlier notice.
(5) The person chargeable with tax may, before service of notice under sub-section (1)
or, as the case may be, the statement under sub-section (3), pay the amount of tax along with
interest payable thereon under section 50 on the basis of 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.
(6) The proper officer, on receipt of such information, shall not serve any notice under
sub-section (1) or, as the case may be, the statement under sub-section (3), in respect of the
tax so paid or any penalty payable under the provisions of this Act or the rules made
thereunder.
(7) Where the proper officer is of the opinion that the amount paid under
sub-section (5) falls short of the amount actually payable, he shall proceed to issue the
notice as provided for in sub-section (1) in respect of such amount which falls short of the
amount actually payable.
(8) Where any person chargeable with tax under sub-section (1) or sub-section (3)
pays the said tax along with interest payable under section 50 within thirty days of issue of
show cause notice, no penalty shall be payable and all proceedings in respect of the said
notice shall be deemed to be concluded.
(9) The proper officer shall, after considering the representation, if any, made by
person chargeable with tax, determine the amount of tax, interest and a penalty equivalent to
ten per cent. of tax or ten thousand rupees, whichever is higher, due from such person and
issue an order.
(10) The proper officer shall issue the order under sub-section (9) within three 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 utilised relates to or within three
years from the date of erroneous refund.
(11) Notwithstanding anything contained in sub-section (6) or sub-section (8), penalty
under sub-section (9) shall be payable where any amount of self-assessed tax or any amount
collected as tax has not been paid within a period of thirty days from the due date of payment
of such tax.
Determination
of tax not
paid or short
paid or
erroneously
refunded or
input tax
credit wrongly
availed or
utilised for
any reason
other than
fraud or any
wilful
misstatement
or suppression
of facts.
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74. (1) Where it appears to the proper officer that any tax has not been paid or short
paid or erroneously refunded or where input tax credit has been wrongly availed or utilised
by reason of fraud, or any wilful-misstatement or suppression of facts to evade tax, he shall
serve notice on the person chargeable with tax which has not been so paid or which has been
so short paid or to whom the refund has erroneously been made, or who has wrongly availed
or utilised input tax credit, requiring him to show cause as to why he should not pay the
amount specified in the notice along with interest payable thereon under section 50 and a
penalty equivalent to the tax specified in the notice.
(2) The proper officer shall issue the notice under sub-section (1) at least six months
prior to the time limit specified in sub-section (10) for issuance of order.
(3) Where a notice has been issued for any period under sub-section (1), the proper
officer may serve a statement, containing the details of tax not paid or short paid or erroneously
refunded or input tax credit wrongly availed or utilised for such periods other than those
covered under sub-section (1), on the person chargeable with tax.
(4) The service of statement under sub-section (3) shall be deemed to be service of
notice under sub-section (1) of section 73, subject to the condition that the grounds relied
upon in the said statement, except the ground of fraud, or any wilful-misstatement or
suppression of facts to evade tax, for periods other than those covered under
sub-section (1) are the same as are mentioned in the earlier notice.
(5) The person chargeable with tax may, before service of notice under
sub-section (1), pay the amount of tax along with interest payable under section 50 and a
penalty equivalent to fifteen per cent. of such tax on the basis of 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.
(6) The proper officer, on receipt of such information, shall not serve any notice under
sub-section (1), in respect of the tax so paid or any penalty payable under the provisions of
this Act or the rules made thereunder.
(7) Where the proper officer is of the opinion that the amount paid under
sub-section (5) falls short of the amount actually payable, he shall proceed to issue the
notice as provided for in sub-section (1) in respect of such amount which falls short of the
amount actually payable.
(8) Where any person chargeable with tax under sub-section (1) pays the said tax
along with interest payable under section 50 and a penalty equivalent to twenty-five per cent.
of such tax within thirty days of issue of the notice, all proceedings in respect of the said
notice shall be deemed to be concluded.
(9) The proper officer shall, after considering the representation, if any, made by the
person chargeable with tax, determine the amount of tax, interest and penalty due from such
person and issue an order.
(10) The proper officer shall issue the order under sub-section (9) within a period of
five 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 utilised relates to or within five
years from the date of erroneous refund.
(11) Where any person served with an order issued under sub-section (9) pays the tax
along with interest payable thereon under section 50 and a penalty equivalent to fifty per
cent. of such tax within thirty days of communication of the order, all proceedings in respect
of the said notice shall be deemed to be concluded.
Explanation 1.— For the purposes of section 73 and this section,—
(i) the expression “all proceedings in respect of the said notice” shall not
include proceedings under section 132;
Determination
of tax not
paid or short
paid or
erroneously
refunded or
input tax
credit wrongly
availed or
utilised by
reason of
fraud or any
wilfulmisstatement
or suppression
of facts.
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(ii) where the notice under the same proceedings is issued to the main
person liable to pay tax and some other persons, and such proceedings against
the main person have been concluded under section 73 or section 74, the
proceedings against all the persons liable to pay penalty under sections 122,
125, 129 and 130 are deemed to be concluded.
Explanation 2.––For the purposes of this Act, 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.
75. (1) Where the service of notice or issuance of order is stayed by an order of a court
or Appellate Tribunal, the period of such stay shall be excluded in computing the period
specified in sub-sections (2) and (10) of section 73 or sub-sections (2) and (10) of section 74,
as the case may be.
(2) Where any Appellate Authority or Appellate Tribunal or court concludes that the
notice issued under sub-section (1) of section 74 is not sustainable for the reason that the
charges of fraud or any wilful-misstatement or suppression of facts to evade tax has not been
established against the person to whom the notice was issued, the proper officer shall
determine the tax payable by such person, deeming as if the notice were issued under subsection
(1) of section 73.
(3) Where any order is required to be issued in pursuance of the direction of the
Appellate Authority or Appellate Tribunal or a court, such order shall be issued within two
years from the date of communication of the said direction.
(4) An opportunity of hearing shall be granted where a request is received in writing
from the person chargeable with tax or penalty, or where any adverse decision is contemplated
against such person.
(5) The proper officer shall, if sufficient cause is shown by the person chargeable with
tax, grant time to the said person and adjourn the hearing for reasons to be recorded in
writing:
Provided that no such adjournment shall be granted for more than three times to a
person during the proceedings.
(6) The proper officer, in his order, shall set out the relevant facts and the basis of his
decision.
(7) The amount of tax, interest and penalty demanded in the order shall not be in excess
of the amount specified in the notice and no demand shall be confirmed on the grounds other
than the grounds specified in the notice.
(8) Where the Appellate Authority or Appellate Tribunal or court modifies the amount
of tax determined by the proper officer, the amount of interest and penalty shall stand
modified accordingly, taking into account the amount of tax so modified.
(9) The interest on the tax short paid or not paid shall be payable whether or not
specified in the order determining the tax liability.
(10) The adjudication proceedings shall be deemed to be concluded, if the order is not
issued within three years as provided for in sub-section (10) of section 73 or within five
years as provided for in sub-section (10) of section 74.
(11) An issue on which the Appellate Authority or the Appellate Tribunal or the High
Court has given its decision which is prejudicial to the interest of revenue in some other
proceedings and an appeal to the Appellate Tribunal or the High Court or the Supreme
Court against such decision of the Appellate Authority or the Appellate Tribunal or the
High Court is pending, the period spent between the date of the decision of the Appellate
General
provisions
relating to
determination
of tax.
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Authority and that of the Appellate Tribunal or the date of decision of the Appellate Tribunal
and that of the High Court or the date of the decision of the High Court and that of the
Supreme Court shall be excluded in computing the period referred to in sub-section (10) of
section 73 or sub-section (10) of section 74 where proceedings are initiated by way of issue
of a show cause notice under the said sections.
(12) Notwithstanding anything contained in section 73 or section 74, where any amount
of self-assessed tax in accordance with a return furnished under section 39 remains unpaid,
either wholly or partly, or any amount of interest payable on such tax remains unpaid, the
same shall be recovered under the provisions of section 79.
(13) Where any penalty is imposed under section 73 or section 74, no penalty for the
same act or omission shall be imposed on the same person under any other provision of this
Act.
76. (1) Notwithstanding anything to the contrary contained in any order or direction
of any Appellate Authority or Appellate Tribunal or court or in any other provisions of this
Act or the rules made thereunder or any other law for the time being in force, every person
who has collected from any other person any amount as representing the tax under this Act,
and has not paid the said amount to the Government, shall forthwith pay the said amount to
the Government, irrespective of whether the supplies in respect of which such amount was
collected are taxable or not.
(2) Where any amount is required to be paid to the Government under
sub-section (1), and which has not been so paid, the proper officer may serve on the person
liable to pay such amount a notice requiring him to show cause as to why the said amount as
specified in the notice, should not be paid by him to the Government and why a penalty
equivalent to the amount specified in the notice should not be imposed on him under the
provisions of this Act.
(3) The proper officer shall, after considering the representation, if any, made by the
person on whom the notice is served under sub-section (2), determine the amount due from
such person and thereupon such person shall pay the amount so determined.
(4) The person referred to in sub-section (1) shall in addition to paying the amount
referred to in sub-section (1) or sub-section (3) also be liable to pay interest thereon at the
rate specified under section 50 from the date such amount was collected by him to the date
such amount is paid by him to the Government.
(5) An opportunity of hearing shall be granted where a request is received in writing
from the person to whom the notice was issued to show cause.
(6) The proper officer shall issue an order within one year from the date of issue of the
notice.
(7) Where the issuance of order is stayed by an order of the court or Appellate Tribunal,
the period of such stay shall be excluded in computing the period of one year.
(8) The proper officer, in his order, shall set out the relevant facts and the basis of his
decision.
(9) The amount paid to the Government under sub-section (1) or sub-section (3) shall
be adjusted against the tax payable, if any, by the person in relation to the supplies referred
to in sub-section (1).
(10) Where any surplus is left after the adjustment under sub-section (9), the amount
of such surplus shall either be credited to the Fund or refunded to the person who has borne
the incidence of such amount.
(11) 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.
Tax collected
but not paid to
Government.
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77. (1) A registered person who has paid the Central tax and State tax or, as the case
may be, the central tax and the Union territory tax on a transaction considered by him to be
an intra-State supply, but which is subsequently held to be an inter-State supply, shall be
refunded the amount of taxes so paid in such manner and subject to such conditions as may
be prescribed.
(2) A registered person who has paid integrated tax on a transaction considered by him
to be an inter-State supply, but which is subsequently held to be an intra-State supply, shall
not be required to pay any interest on the amount of central tax and State tax or, as the case
may be, the central tax and the Union territory tax payable.
78. Any amount payable by a taxable person in pursuance of an order passed under
this Act shall be paid by such person within a period of three months from the date of service
of such order failing which recovery proceedings shall be initiated:
Provided that where the proper officer considers it expedient in the interest of revenue,
he may, for reasons to be recorded in writing, require the said taxable person to make such
payment within such period less than a period of three months as may be specified by him.
79. (1) Where any amount payable by a person to the Government under any of the
provisions of this Act or the rules made thereunder is not paid, the proper officer shall
proceed to recover the amount by one or more of the following modes, namely:––
(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 which may be
under the control of the proper officer or such other specified officer;
(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 which are under the control of the proper officer or such other specified officer;
(c) (i) 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 Government
either forthwith upon the money becoming due or being held, or within the time specified
in the notice not being before the money becomes due or is held, so much of the money
as is sufficient to pay the amount due from such person or the whole of the money
when it is equal to or less than that amount;
(ii) every person to whom the notice is issued under sub-clause (i) shall
be bound to comply with such notice, and in particular, where any such notice is
issued to a post office, banking company or an insurer, it shall not be necessary
to produce any pass book, deposit receipt, policy or any other document for the
purpose of any entry, endorsement or the like being made before payment is
made, notwithstanding any rule, practice or requirement to the contrary;
(iii) in case the person to whom a notice under sub-clause (i) has been
issued, fails to make the payment in pursuance thereof to the Government, he
shall be deemed to be a defaulter in respect of the amount specified in the notice
and all the consequences of this Act or the rules made thereunder shall follow;
(iv) the officer issuing a notice under sub-clause (i) may, at any time,
amend or revoke such notice or extend the time for making any payment in
pursuance of the notice;
(v) any person making any payment in compliance with a notice issued
under sub-clause (i) shall be deemed to have made the payment under the
authority of the person in default and such payment being credited to the
Tax
wrongfully
collected and
paid to
Central
Government
or State
Government.
Initiation of
recovery
proceedings.
Recovery of
tax.
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Government shall be deemed to constitute a good and sufficient discharge of
the liability of such person to the person in default to the extent of the amount
specified in the receipt;
(vi) any person discharging any liability to the person in default after
service on him of the notice issued under sub-clause (i) shall be personally liable
to the Government to the extent of the liability discharged or to the extent of the
liability of the person in default for tax, interest and penalty, whichever is less;
(vii) where a person on whom a notice is served under sub-clause (i)
proves to the satisfaction of the officer issuing the notice that the money
demanded or any part thereof was not due to the person in default or that he did
not hold any money for or on account of the person in default, at the time the
notice was served on him, nor is the money demanded or any part thereof, likely
to become due to the said person or be held for or on account of such person,
nothing contained in this section shall be deemed to require the person on
whom the notice has been served to pay to the Government any such money or
part thereof;
(d) the proper officer may, in accordance with the rules to be made in this behalf,
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; and in case, any part of
the said amount payable or of the cost of the distress or keeping of the property,
remains unpaid for a period of thirty days next after any such distress, 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 shall render the
surplus amount, if any, to such person;
(e) the proper officer may prepare a certificate signed by him specifying the
amount due 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 or to any officer
authorised by the Government and the said Collector or the said officer, on receipt of
such certificate, shall proceed to recover from such person the amount specified
thereunder as if it were an arrear of land revenue;
(f) Notwithstanding anything contained in the Code of Criminal Procedure, 1973,
the proper officer may file an application to the appropriate Magistrate and such
Magistrate shall proceed to recover from such person the amount specified thereunder
as if it were a fine imposed by him.
(2) Where the terms of any bond or other instrument executed under this Act or any
rules or regulations made thereunder provide that any amount due under such instrument
may be recovered in the manner laid down in sub-section (1), the amount may, without
prejudice to any other mode of recovery, be recovered in accordance with the provisions of
that sub-section.
(3) Where any amount of tax, interest or penalty is payable by a person to the
Government under any of the provisions of this Act or the rules made thereunder and which
remains unpaid, the proper officer of State tax or Union territory tax, during the course of
recovery of said tax arrears, may recover the amount from the said person as if it were an
arrear of State tax or Union territory tax and credit the amount so recovered to the account of
the Government.
(4) Where the amount recovered under sub-section (3) is less than the amount due to
the Central Government and State Government, the amount to be credited to the account of
the respective Governments shall be in proportion to the amount due to each such
Government.
2 of 1974.
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80. On an application filed by a taxable person, the Commissioner may, for reasons to
be recorded in writing, extend the time for payment or allow payment of any amount due
under this Act, other than the amount due as per the liability self-assessed in any return, by
such person in monthly instalments not exceeding twenty four, subject to payment of interest
under section 50 and subject to such conditions and limitations as may be prescribed:
Provided that where there is default in payment of any one instalment on its due date,
the whole outstanding balance payable on such date shall become due and payable forthwith
and shall, without any further notice being served on the person, be liable for recovery.
81. Where 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,
exchange, 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, such charge or
transfer shall be void as against any claim in respect of any tax or any other sum payable by
the said person:
Provided that, such charge or transfer shall not be void if it is made for adequate
consideration, in good faith and without notice of the pendency of such proceedings under
this Act or without notice of such tax or other sum payable by the said person, or with the
previous permission of the proper officer.
82. Notwithstanding anything to the contrary contained in any law for the time being
in force, save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, any
amount payable by a taxable person or any other person on account of tax, interest or
penalty which he is liable to pay to the Government shall be a first charge on the property of
such taxable person or such person.
83. (1) Where during the pendency of any proceedings under section 62 or section 63
or section 64 or section 67 or section 73 or section 74, the Commissioner is of the opinion that
for the purpose of protecting the interest of the Government revenue, it is necessary so to
do, he may, by order in writing attach provisionally any property, including bank account,
belonging to the taxable person in such manner as may be prescribed.
(2) Every such provisional attachment shall cease to have effect after the expiry of a
period of one year from the date of the order made under sub-section (1).
84. Where any notice of demand in respect of any tax, penalty, interest or any other
amount payable under this Act, (hereafter in this section referred to as “Government dues”),
is served upon any taxable person or any other person and any appeal or revision application
is filed or any other proceedings is initiated in respect of such Government dues, then––
(a) where such Government dues are enhanced in such appeal, revision or other
proceedings, the Commissioner shall serve upon the taxable person or any other
person another notice of demand in respect of the amount by which such Government
dues are enhanced and any recovery proceedings in relation to such Government
dues as are covered by the notice of demand served upon him before the disposal of
such appeal, revision or other proceedings may, without the service of any fresh
notice of demand, be continued from the stage at which such proceedings stood
immediately before such disposal;
(b) where such Government dues are reduced in such appeal, revision or in other
proceedings––
(i) it shall not be necessary for the Commissioner to serve upon the taxable
person a fresh notice of demand;
(ii) the Commissioner shall give intimation of such reduction to him and to
the appropriate authority with whom recovery proceedings is pending;
(iii) any recovery proceedings initiated on the basis of the demand served
upon him prior to the disposal of such appeal, revision or other proceedings may
Payment of
tax and other
amount in
instalments.
Transfer of
property to
be void in
certain cases.
Tax to be
first charge
on property.
Provisional
attachment to
protect
revenue in
certain cases.
Continuation
and validation
of certain
recovery
proceedings.
31 of 2016.
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be continued in relation to the amount so reduced from the stage at which such
proceedings stood immediately before such disposal.
CHAPTER XVI
LIABILITY TO PAY IN CERTAIN CASES
85. (1) Where a taxable person, liable to pay tax under this Act, transfers his business
in whole or in part, by sale, gift, lease, leave and license, hire or in any other manner
whatsoever, the taxable person and the person to whom the business is so transferred shall,
jointly and severally, be liable wholly or to the extent of such transfer, to pay the tax, interest
or any penalty due from the taxable person upto the time of such transfer, whether such tax,
interest or penalty has been determined before such transfer, but has remained unpaid or is
determined thereafter.
(2) Where the transferee of a business referred to in sub-section (1) carries on such
business either in his own name or in some other name, he shall be liable to pay tax on the
supply of goods or services or both effected by him with effect from the date of such transfer
and shall, if he is a registered person under this Act, apply within the prescribed time for
amendment of his certificate of registration.
86. Where an agent supplies or receives any taxable goods on behalf of his principal,
such agent and his principal shall, jointly and severally, be liable to pay the tax payable on
such goods under this Act.
87. (1) When two or more companies are amalgamated or merged in pursuance of an
order of court or of Tribunal or otherwise and the order is to take effect from a date earlier to
the date of the order and any two or more of such companies have supplied or received any
goods or services or both to or from each other during the period commencing on the date
from which the order takes effect till the date of the order, then such transactions of supply
and receipt shall be included in the turnover of supply or receipt of the respective companies
and they shall be liable to pay tax accordingly.
(2) Notwithstanding anything contained in the said order, 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.
88. (1) When any company is being wound up whether under the orders of a court or
Tribunal or otherwise, every person appointed as receiver of any assets of a company
(hereafter in this section referred to as the “liquidator”), shall, within thirty days after his
appointment, give intimation of his appointment to the Commissioner.
(2) The Commissioner shall, after making such inquiry or calling for such information
as he may deem fit, notify the liquidator within three months from the date on which he
receives intimation of the appointment of the liquidator, the amount which in the opinion of
the Commissioner would be sufficient to provide for any tax, interest or penalty which is
then, or is likely thereafter to become, payable by the company.
(3) When any private company is wound up and any tax, interest or penalty determined
under this Act on the company for any period, whether before or in the course of or after its
liquidation, cannot be recovered, then every person who was a director of such company at
any time during the period for which the tax was due shall, jointly and severally, be liable for
the payment of such tax, interest or penalty, unless he proves to the satisfaction of the
Commissioner that such 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.
89. (1) Notwithstanding anything contained in the Companies Act, 2013, where any
tax, interest or penalty due from a private company in respect of any supply of goods or
services or both for any period cannot be recovered, then, every person who was a director
of the private company during such period shall, jointly and severally, be liable for the
Liability in
case of transfer
of business.
Liability of
agent and
principal.
Liability in
case of
amalgamation
or merger of
companies.
Liability in
case of
company in
liquidation.
Liability of 18 of 2013.
directors of
private
company.
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payment of such tax, interest or penalty 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.
(2) Where a private company is converted into a public company and the tax, interest
or penalty in respect of any supply of goods or services or both for any period during which
such company was a private company cannot be recovered before such conversion, then,
nothing contained in sub-section (1) shall apply to any person who was a director of such
private company in relation to any tax, interest or penalty in respect of such supply of goods
or services or both of such private company:
Provided that nothing contained in this sub-section shall apply to any personal penalty
imposed on such director.
90. Notwithstanding any contract to the contrary and any other law for the time being
in force, where any firm is liable to pay any tax, interest or penalty under this Act, the firm and
each of the partners of the firm shall, jointly and severally, be liable for such payment:
Provided that where any partner retires from the firm, he or the firm, shall intimate the
date of retirement of the said partner to the Commissioner by a notice in that behalf in writing
and such partner shall be liable to pay tax, interest or penalty due up to the date of his
retirement whether determined or not, on that date:
Provided further that if no such intimation is given within one month from the date of
retirement, the liability of such partner under the first proviso shall continue until the date on
which such intimation is received by the Commissioner.
91. Where the business in respect of which any tax, interest or penalty is payable
under this Act is carried on by any guardian, trustee or agent of a minor or other incapacitated
person on behalf of and for the benefit of such minor or other incapacitated person, the tax,
interest or penalty shall be levied upon and recoverable from such guardian, trustee or agent
in like manner and to the same extent as it would be determined and recoverable from any
such minor or other incapacitated person, as if he were a major or capacitated person and as
if he were conducting the business himself, and all the provisions of this Act or the rules
made thereunder shall apply accordingly.
92. Where the estate or any portion of the estate of a taxable person owning a business
in respect of which any tax, interest or penalty is payable under this Act is under the control
of the Court of Wards, the Administrator General, the Official Trustee or any receiver or
manager (including any person, whatever be his designation, who in fact manages the
business) appointed by or under any order of a court, the tax, interest or penalty shall be
levied upon and be recoverable from such Court of Wards, Administrator General, Official
Trustee, receiver or manager in like manner and to the same extent as it would be determined
and be recoverable from the taxable person as if he were conducting the business himself,
and all the provisions of this Act or the rules made thereunder shall apply accordingly.
93. (1) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016,
where a person, liable to pay tax, interest or penalty under this Act, dies, then––
(a) 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
(b) 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,
whether such tax, interest or penalty has been determined before his death but has remained
unpaid or is determined after his death.
Liability of
partners of
firm to pay
tax.
Liability of
guardians,
trustees, etc.
Liability of
Court of
Wards, etc.
31of 2016. Special
provisions
regarding
liability to
pay tax,
interest or
penalty in
certain cases.
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(2) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, where a
taxable person, liable to pay tax, interest or penalty under this Act, is a Hindu Undivided
Family or an association of persons and the property of the Hindu Undivided Family or the
association of persons is partitioned amongst the various members or groups of members,
then, each member or group of members shall, jointly and severally, be liable to pay the tax,
interest or penalty due from the taxable person under this Act up to the time of the partition
whether such tax, penalty or interest has been determined before partition but has remained
unpaid or is determined after the partition.
(3) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, where a
taxable person, liable to pay tax, interest or penalty under this Act, is a firm, and the firm is
dissolved, then, every person who was a partner shall, jointly and severally, be liable to pay
the tax, interest or penalty due from the firm under this Act up to the time of dissolution
whether such tax, interest or penalty has been determined before the dissolution, but has
remained unpaid or is determined after dissolution.
(4) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, where a
taxable person liable to pay tax, interest or penalty under this Act,––
(a) is the guardian of a ward on whose behalf the business is carried on by the
guardian; or
(b) is a trustee who carries on the business under a trust for a beneficiary,
then, if the guardianship or trust is terminated, the ward or the beneficiary shall be liable to
pay the tax, interest or penalty due from the taxable person upto the time of the termination
of the guardianship or trust, whether such tax, interest or penalty has been determined
before the termination of guardianship or trust but has remained unpaid or is determined
thereafter.
94. (1) 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––
(a) 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
(b) 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.
(2) Where a change has occurred in the constitution of a firm or an association of
persons, the partners of the firm or members of association, as it existed before and as it
exists after the reconstitution, shall, without prejudice to the provisions of section 90, jointly
and severally, be liable to pay tax, interest or penalty due from such firm or association for
any period before its reconstitution.
(3) The provisions of sub-section (1) shall, so far as may be, apply where the taxable
person, being a firm or association of persons is dissolved or where the taxable person, being
a Hindu Undivided Family, has effected partition with respect to the business carried on by
it and accordingly references in that sub-section to discontinuance shall be construed as
reference to dissolution or to partition.
31 of 2016.
31 of 2016.
31 of 2016.
Liability in
other cases.
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Explanation.––For the purposes of this Chapter,––
(i) a “Limited Liability Partnership” formed and registered under the provisions
of the Limited Liability Partnership Act, 2008 shall also be considered as a firm;
(ii) “court” means the District Court, High Court or Supreme Court.
CHAPTER XVII
ADVANCE RULING
95. In this Chapter, unless the context otherwise requires,––
(a) “advance ruling” means a decision provided by the Authority or the Appellate
Authority to an applicant on matters or on questions specified in sub-section (2) of
section 97 or sub-section (1) of section 100, in relation to the supply of goods or
services or both being undertaken or proposed to be undertaken by the applicant;
(c) “applicant” means any person registered or desirous of obtaining registration
under this Act;
(d) “application” means an application made to the Authority under sub-section
(1) of section 97;
(e) “Authority” means the Authority for Advance Ruling referred to in
section 96 ;
(b) “Appellate Authority” means the Appellate Authority for Advance Ruling
referred to in section 99.
96. Subject to the provisions of this Chapter, for the purposes of this Act, the Authority
for advance ruling constituted under the provisions of a State Goods and Services Tax Act or
Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance
ruling in respect of that State or Union territory.
97. (1) An applicant desirous of obtaining an advance ruling under this Chapter may
make an application in such form and manner and accompanied by such fee as may be
prescribed, stating the question on which the advance ruling is sought.
(2) The question on which the advance ruling is sought under this Act, shall be in
respect of,––
(a) classification of any goods or services or both;
(b) applicability of a notification issued under the provisions of this Act;
(c) determination of time and value of supply of goods or services or both;
(d) admissibility of input tax credit of tax paid or deemed to have been paid;
(e) determination of the liability to pay tax on any goods or services or both;
(f) whether applicant is required to be registered;
(g) whether any particular thing done by the applicant with respect to any goods
or services or both amounts to or results in a supply of goods or services or both,
within the meaning of that term.
98. (1) On receipt of an application, the Authority shall cause a copy thereof to be
forwarded to the concerned officer and, if necessary, call upon him to furnish the relevant
records:
Provided that where any records have been called for by the Authority in any case,
such records shall, as soon as possible, be returned to the said concerned officer.
(2) The Authority may, after examining the application and the records called for and
after hearing the applicant or his authorised representative and the concerned officer or his
authorised representative, by order, either admit or reject the application:
6 of 2009.
Definitions.
Authority for
advance
ruling.
Application
for advance
ruling.
Procedure on
receipt of
application.
5
10
15
20
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Provided that the Authority shall not admit the application where the question raised
in the application is already pending or decided in any proceedings in the case of an applicant
under any of the provisions of this Act:
Provided further that no application shall be rejected under this sub-section unless an
opportunity of hearing has been given to the applicant:
Provided also that where the application is rejected, the reasons for such rejection
shall be specified in the order.
(3) A copy of every order made under sub-section (2) shall be sent to the applicant and
to the concerned officer.
(4) Where an application is admitted under sub-section (2), the Authority shall, after
examining such further material as may be placed before it by the applicant or obtained by the
Authority and after providing an opportunity of being heard to the applicant or his authorised
representative as well as to the concerned officer or his authorised representative, pronounce
its advance ruling on the question specified in the application.
(5) Where the members of the Authority differ on any question on which the advance
ruling is sought, they shall state the point or points on which they differ and make a reference
to the Appellate Authority for hearing and decision on such question.
(6) The Authority shall pronounce its advance ruling in writing within ninety days
from the date of receipt of application.
(7) A copy of the advance ruling pronounced by the Authority duly signed by the
members and certified in such manner as may be prescribed shall be sent to the applicant, the
concerned officer and the jurisdictional officer after such pronouncement.
99. Subject to the provisions of this Chapter, for the purposes of this Act, the Appellate
Authority for Advance Ruling constituted under the provisions of a State Goods and Services
Tax Act or a Union Territory Goods and Services Tax Act shall be deemed to be the Appellate
Authority in respect of that State or Union territory.
100. (1) The concerned officer, the jurisdictional officer or an applicant aggrieved by
any advance ruling pronounced under sub-section (4) of section 98, may appeal to the
Appellate Authority.
(2) Every appeal under this section shall be filed within a period of thirty days from the
date on which the ruling sought to be appealed against is communicated to the concerned
officer, the jurisdictional officer and the applicant:
Provided that the Appellate Authority may, if it is satisfied that the appellant was
prevented by a sufficient cause from presenting the appeal within the said period of thirty
days, allow it to be presented within a further period not exceeding thirty days.
(3) Every appeal under this section shall be in such form, accompanied by such fee and
verified in such manner as may be prescribed.
101. (1) The Appellate Authority may, after giving the parties to the appeal or reference
an opportunity of being heard, pass such order as it thinks fit, confirming or modifying the
ruling appealed against or referred to.
(2) The order referred to in sub-section (1) shall be passed within a period of
ninety days from the date of filing of the appeal under section 100 or a reference under
sub-section (5) of section 98.
(3) Where the members of the Appellate Authority differ on any point or points referred
to in appeal or reference, it shall be deemed that no advance ruling can be issued in respect
of the question under the appeal or reference.
(4) A copy of the advance ruling pronounced by the Appellate Authority duly signed
by the Members and certified in such manner as may be prescribed shall be sent to the
Appellate
Authority for
Advance
Ruling.
Appeal to
Appellate
Authority.
Orders of
Appellate
Authority.
5
10
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25
30
35
40
45
63
applicant, the concerned officer, the jurisdictional officer and to the Authority after such
pronouncement.
102. The Authority or the Appellate Authority may amend any order passed by it
under section 98 or section 101, so as to rectify any error apparent on the face of the record,
if such error is noticed by the Authority or the Appellate Authority on its own accord, or is
brought to its notice by the concerned officer, the jurisdictional officer, the applicant or the
appellant within a period of six months from the date of the order:
Provided that no rectification which has the effect of enhancing the tax liability or
reducing the amount of admissible input tax credit shall be made unless the applicant or the
appellant has been given an opportunity of being heard.
103. (1) The advance ruling pronounced by the Authority or the Appellate Authority
under this Chapter shall be binding only—
(a) on the applicant who had sought it in respect of any matter referred to in
sub-section (2) of section 97 for advance ruling;
(b) on the concerned officer or the jurisdictional officer in respect of the applicant
.
(2) The advance ruling referred to in sub-section (1) shall be binding unless the law,
facts or circumstances supporting the original advance ruling have changed.
104. (1) Where the Authority or the Appellate Authority finds that advance
ruling pronounced by it under sub-section (4) of section 98 or under sub-section (1) of
section 101 has been obtained by the applicant or the appellant by fraud or suppression of
material facts or misrepresentation of facts, it may, by order, declare such ruling to be void
ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall
apply to the applicant or the appellant as if such advance ruling had never been made:
Provided that no order shall be passed under this sub-section unless an opportunity
of being heard has been given to the applicant or the appellant.
Explanation.––The period beginning with the date of such advance ruling and ending
with the date of order under this sub-section shall be excluded while computing the period
specified in sub-sections (2) and (10) of section 73 or sub-sections (2) and (10) of
section 74.
(2) A copy of the order made under sub-section (1) shall be sent to the applicant, the
concerned officer and the jurisdictional officer.
105. (1) The Authority or the Appellate Authority shall, for the purpose of exercising
its powers regarding—
(a) discovery and inspection;
(b) enforcing the attendance of any person and examining him on oath;
(c) issuing commissions and compelling production of books of account
and other records,
have all the powers of a civil court under the Code of Civil Procedure, 1908.
(2) The Authority or the Appellate Authority shall be deemed to be a civil court for the
purposes of section 195, but not for the purposes of Chapter XXVI of the Code of Criminal
Procedure, 1973, and every proceeding before the Authority or the Appellate Authority shall
be deemed to be a judicial proceedings within the meaning of sections 193 and 228, and for
the purpose of section 196 of the Indian Penal Code.
106. The Authority or the Appellate Authority shall, subject to the provisions of this
Chapter, have power to regulate its own procedure.
Rectification
of advance
ruling.
Applicability
of advance
ruling.
Advance
ruling to be
void in
certain
circumstances.
5 of 1908.
Powers of
Authority
and Appellate
Authority.
2 of 1974.
45 of 1860.
Procedure of
Authority and
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CHAPTER XVIII
APPEALS AND REVISION
107. (1) Any person aggrieved by any decision or order passed under this Act or the
State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an
adjudicating authority may appeal to such Appellate Authority as may be prescribed within
three months from the date on which the said decision or order is communicated to such
person.
(2) The Commissioner may, on his own motion, or upon request from the Commissioner
of State tax or the Commissioner of Union territory tax, call for and examine the record of any
proceedings in which an adjudicating authority has passed any decision or order under this
Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax
Act, for the purpose of satisfying himself as to the legality or propriety of the said decision
or order and may, by order, direct any officer subordinate to him to apply to the Appellate
Authority within six months from the date of communication of the said decision or order for
the determination of such points arising out of the said decision or order as may be specified
by the Commissioner in his order.
(3) Where, in pursuance of an order under sub-section (2), the authorised officer
makes an application to the Appellate Authority, such application shall be dealt with by the
Appellate Authority as if it were an appeal made against the decision or order of the
adjudicating authority and such authorised officer were an appellant and the provisions of
this Act relating to appeals shall apply to such application.
(4) The Appellate Authority may, if he is satisfied that the appellant was prevented by
sufficient cause from presenting the appeal within the aforesaid period of three months or six
months, as the case may be, allow it to be presented within a further period of one month.
(5) Every appeal under this section shall be in such form and shall be verified in such
manner as may be prescribed.
(6) No appeal shall be filed under sub-section (1), unless the appellant has paid—
(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising
from the impugned order, as is admitted by him; and
(b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising
from the said order, in relation to which the appeal has been filed.
(7) Where the appellant has paid the amount under sub-section (6), the recovery
proceedings for the balance amount shall be deemed to be stayed.
(8) The Appellate Authority shall give an opportunity to the appellant of being heard.
(9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of
an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for
reasons to be recorded in writing:
Provided that no such adjournment shall be granted more than three times to a party
during hearing of the appeal.
(10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant
to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the
omission of that ground from the grounds of appeal was not wilful or unreasonable.
(11) The Appellate Authority shall, after making such further inquiry as may be
necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling
the decision or order appealed against but shall not refer the case back to the adjudicating
authority that passed the said decision or order:
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Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or
confiscating goods of greater value or reducing the amount of refund or input tax credit shall
not be passed unless the appellant has been given a reasonable opportunity of showing
cause against the proposed order:
Provided further that where the Appellate Authority is of the opinion that any tax has
not been paid or short-paid or erroneously refunded, or where input tax credit has been
wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit
shall be passed unless the appellant is given notice to show cause against the proposed
order and the order is passed within the time limit specified under section 73 or
section 74.
(12) The order of the Appellate Authority disposing of the appeal shall be in writing
and shall state the points for determination, the decision thereon and the reasons for such
decision.
(13) The Appellate Authority shall, where it is possible to do so, hear and decide every
appeal within a period of one year from the date on which it is filed:
Provided that where the issuance of order is stayed by an order of a court or Tribunal,
the period of such stay shall be excluded in computing the period of one year.
(14) On disposal of the appeal, the Appellate Authority shall communicate the order
passed by it to the appellant, respondent and to the adjudicating authority.
(15) A copy of the order passed by the Appellate Authority shall also be sent to the
jurisdictional Commissioner or the authority designated by him in this behalf and the
jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an authority
designated by him in this behalf.
(16) Every order passed under this section shall, subject to the provisions of
section 108 or section 113 or section 117 or section 118 be final and binding on the parties.
108. (1) Subject to the provisions of section 121 and any rules made thereunder, the
Revisional Authority may, on his own motion, or upon information received by him or on
request from the Commissioner of State tax, or the Commissioner of Union territory tax, call
for and examine the record of any proceedings, and if he considers that any decision or order
passed under this Act or under the State Goods and Services Tax Act or the Union Territory
Goods and Services Tax Act by any officer subordinate to him is erroneous in so far as it is
prejudicial to the interest of revenue and is illegal or improper or has not taken into account
certain material facts, whether available at the time of issuance of the said order or not or in
consequence of an observation by the Comptroller and Auditor General of India, he may, if
necessary, stay the operation of such decision or order for such period as he deems fit and
after giving the person concerned an opportunity of being heard and after making such
further inquiry as may be necessary, pass such order, as he thinks just and proper, including
enhancing or modifying or annulling the said decision or order.
(2) The Revisional Authority shall not exercise any power under sub-section (1), if—
(a) the order has been subject to an appeal under section 107 or section 112 or
section 117 or section 118; or
(b) the period specified under sub-section (2) of section 107 has not yet expired
or more than three years have expired after the passing of the decision or order sought
to be revised; or
(c) the order has already been taken for revision under this section at an earlier
stage; or
(d) the order has been passed in exercise of the powers under sub-section (1):
Powers of
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Provided that the Revisional Authority may pass an order under sub-section (1) on
any point which has not been raised and decided in an appeal referred to in clause (a) of subsection
(2), before the expiry of a period of one year from the date of the order in such appeal
or before the expiry of a period of three years referred to in clause (b) of that sub-section,
whichever is later.
(3) Every order passed in revision under sub-section (1) shall, subject to the provisions
of section 113 or section 117 or section 118, be final and binding on the parties.
(4) If the said decision or order involves an issue on which the Appellate Tribunal or
the High Court has given its decision in some other proceedings and an appeal to the High
Court or the Supreme Court against such decision of the Appellate Tribunal or the High
Court is pending, the period spent between the date of the decision of the Appellate Tribunal
and the date of the decision of the High Court or the date of the decision of the High Court
and the date of the decision of the Supreme Court shall be excluded in computing the period
of limitation referred to in clause (b) of sub-section (2) where proceedings for revision have
been initiated by way of issue of a notice under this section.
(5) Where the issuance of an order under sub-section (1) is stayed by the order of a
court or Appellate Tribunal, the period of such stay shall be excluded in computing the
period of limitation referred to in clause (b) of sub-section (2).
(6) For the purposes of this section, the term,––
(i) “record” shall include all records relating to any proceedings under this Act
available at the time of examination by the Revisional Authority;
(ii) “decision” shall include intimation given by any officer lower in rank than
the Revisional Authority.
109. (1) The Government shall, on the recommendations of the Council, by notification,
constitute with effect from such date as may be specified therein, an Appellate Tribunal
known as the Goods and Services Tax Appellate Tribunal for hearing appeals against the
orders passed by the Appellate Authority or the Revisional Authority.
(2) The powers of the Appellate Tribunal shall be exercisable by the National Bench
and Benches thereof (hereinafter in this Chapter referred to as “Regional Benches”), State
Bench and Benches thereof (hereafter in this Chapter referred to as “Area Benches”).
(3) The National Bench of the Appellate Tribunal shall be situated at New Delhi which
shall be presided over by the President and shall consist of one Technical Member (Centre)
and one Technical Member (State).
(4) The Government shall, on the recommendations of the Council, by notification,
constitute such number of Regional Benches as may be required and such Regional Benches
shall consist of a Judicial Member, one Technical Member (Centre) and one Technical Member
(State).
(5) The National Bench or Regional Benches of the Appellate Tribunal shall have
jurisdiction to hear appeals against the orders passed by the Appellate Authority or the
Revisional Authority in the cases where one of the issues involved relates to the place of
supply.
(6) The Government shall, by notification, specify for each State or Union territory, a
Bench of the Appellate Tribunal (hereafter in this Chapter, referred to as “State Bench”) for
exercising the powers of the Appellate Tribunal within the concerned State or Union territory:
Provided that the Government shall, on receipt of a request from any State Government,
constitute such number of Area Benches in that State, as may be recommended by the
Council:
Constitution
of Appellate
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Benches
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Provided further that the Government may, on receipt of a request from any State, or on
its own motion for a Union territory, notify the Appellate Tribunal in a State to act as the
Appellate Tribunal for any other State or Union territory, as may be recommended by the
Council, subject to such terms and conditions as may be prescribed.
(7) The State Bench or Area Benches shall have jurisdiction to hear appeals against
the orders passed by the Appellate Authority or the Revisional Authority in the cases
involving matters other than those referred to in sub-section (5).
(8) The President and the State President shall, by general or special order, distribute
the business or transfer cases among Regional Benches or, as the case may be, Area Benches
in a State.
(9) Each State Bench and Area Benches of the Appellate Tribunal shall consist of a
Judicial Member, one Technical Member (Centre) and one Technical Member (State) and the
State Government may designate the senior most Judicial Member in a State as the State
President.
(10) In the absence of a Member in any Bench due to vacancy or otherwise, any appeal
may, with the approval of the President or, as the case may be, the State President, be heard
by a Bench of two Members:
Provided that any appeal where the tax or input tax credit involved or the difference in
tax or input tax credit involved or the amount of fine, fee or penalty determined in any order
appealed against, does not exceed five lakh rupees and which does not involve any question
of law may, with the approval of the President and subject to such conditions as may be
prescribed on the recommendations of the Council, be heard by a bench consisting of a
single member.
(11) If the Members of the National Bench, Regional Benches, State Bench or Area
Benches differ in opinion on any point or points, it shall be decided according to the opinion
of the majority, if there is a majority, but if the Members are equally divided, they shall state
the point or points on which they differ, and the case shall be referred by the President or as
the case may be, State President for hearing on such point or points to one or more of the
other Members of the National Bench, Regional Benches, State Bench or Area Benches and
such point or points shall be decided according to the opinion of the majority of Members
who have heard the case, including those who first heard it.
(12) The Government, in consultation with the President may, for the administrative
convenience, transfer—
(a) any Judicial Member or a Member Technical (State) from one Bench to another
Bench, whether National or Regional; or
(b) any Member Technical (Centre) from one Bench to another Bench, whether
National, Regional, State or Area.
(13) The State Government, in consultation with the State President may, for the
administrative convenience, transfer a Judicial Member or a Member Technical (State) from
one Bench to another Bench within the State.
(14) No act or proceedings of the Appellate Tribunal shall be questioned or shall be
invalid merely on the ground of the existence of any vacancy or defect in the constitution of
the Appellate Tribunal.
110. (1) A person shall not be qualified for appointment as—
(a) the President, unless he has been a Judge of the Supreme Court or is or has
been the Chief Justice of a High Court, or is or has been a Judge of a High Court for a
period not less than five years;
(b) a Judicial Member, unless he—
(i) has been a Judge of the High Court; or
(ii) is or has been a District Judge qualified to be appointed as a Judge of
a High Court; or
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(iii) is or has been a Member of Indian Legal Service and has held a post
not less than Additional Secretary for three years;
(c) a Technical Member (Centre) unless he is or has been a member of
Indian Revenue (Customs and Central Excise) Service, Group A, and has
completed at least fifteen years of service in Group A;
(d) a Technical Member (State) unless he is or has been an officer of the
State Government not below the rank of Additional Commissioner of Value Added
Tax or the State goods and services tax or such rank as may be notified by the
concerned State Government on the recommendations of the Council with at
least three years of experience in the administration of an existing law or the
State Goods and Services Tax Act or in the field of finance and taxation.
(2) The President and the Judicial Members of the National Bench and the Regional
Benches shall be appointed by the Government after consultation with the Chief Justice of
India or his nominee:
Provided that in the event of the occurrence of any vacancy in the office of the
President by reason of his death, resignation or otherwise, the senior most Member of the
National Bench shall act as the President until the date on which a new President, appointed
in accordance with the provisions of this Act to fill such vacancy, enters upon his office:
Provided further that where the President is unable to discharge his functions owing
to absence, illness or any other cause, the senior most Member of the National Bench shall
discharge the functions of the President until the date on which the President resumes his
duties.
(3) The Technical Member (Centre) and Technical Member (State) of the National
Bench and Regional Benches shall be appointed by the Government on the recommendations
of a Selection Committee consisting of such persons and in such manner as may be prescribed.
(4) The Judicial Member of the State Bench or Area Benches shall be appointed by the
State Government after consultation with the Chief Justice of the High Court of the State or
his nominee.
(5) The Technical Member (Centre) of the State Bench or Area Benches shall be
appointed by the Central Government and Technical Member (State) of the State Bench or
Area Benches shall be appointed by the State Government in such manner as may be
prescribed.
(6) No appointment of the Members of the Appellate Tribunal shall be invalid merely
by the reason of any vacancy or defect in the constitution of the Selection Committee.
(7) Before appointing any person as the President or Members of the Appellate Tribunal,
the Central Government or, as the case may be, the State Government, shall satisfy itself that
such person does not have any financial or other interests which are likely to prejudicially
affect his functions as such President or Member.
(8) The salary, allowances and other terms and conditions of service of the President,
State President and the Members of the Appellate Tribunal shall be such as may be prescribed:
Provided that neither salary and allowances nor other terms and conditions of service
of the President, State President or Members of the Appellate Tribunal shall be varied to their
disadvantage after their appointment.
(9) The President of the Appellate Tribunal shall hold office for a term of three years
from the date on which he enters upon his office, or until he attains the age of seventy years,
whichever is earlier and shall be eligible for reappointment.
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(10) The Judicial Member of the Appellate Tribunal and the State President shall hold
office for a term of three years from the date on which he enters upon his office, or until he
attains the age of sixty-five years, whichever is earlier and shall be eligible for
reappointment.
(11) The Technical Member (Centre) or Technical Member (State) of the Appellate
Tribunal shall hold office for a term of five years from the date on which he enters upon his
office, or until he attains the age of sixty-five years, whichever is earlier and shall be eligible
for reappointment.
(12) The President, State President or any Member may, by notice in writing under his
hand addressed to the Central Government or, as the case may be, the State Government
resign from his office:
Provided that the President, State President or Member shall continue to hold office
until the expiry of three months from the date of receipt of such notice by the Central
Government, or, as the case may be, the State Government or until a person duly appointed
as his successor enters upon his office or until the expiry of his term of office, whichever is
the earliest.
(13) The Central Government may, after consultation with the Chief Justice of India, in
case of the President, Judicial Members and Technical Members of the National Bench,
Regional Benches or Technical Members (Centre) of the State Bench or Area Benches, and
the State Government may, after consultation with the Chief Justice of High Court, in case of
the State President, Judicial Members, Technical Members (State) of the State Bench or Area
Benches, may remove from the office such President or Member, who—
(a) has been adjudged an insolvent; or
(b) has been convicted of an offence which, in the opinion of such
Government involves moral turpitude; or
(c) has become physically or mentally incapable of acting as such President,
State President or Member; or
(d) has acquired such financial or other interest as is likely to affect
prejudicially his functions as such President, State President or Member; or
(e) has so abused his position as to render his continuance in office
prejudicial to the public interest:
Provided that the President, State President or the Member shall not be removed
on any of the grounds specified in clauses (d) and (e), unless he has been informed of
the charges against him and has been given an opportunity of being heard.
(14) Without prejudice to the provisions of sub-section (13),––
(a) the President or a Judicial and Technical Member of the National Bench or
Regional Benches, Technical Member (Centre) of the State Bench or Area Benches
shall not be removed from their office except by an order made by the Central Government
on the ground of proved misbehaviour or incapacity after an inquiry made by a Judge
of the Supreme Court nominated by the Chief Justice of India on a reference made to
him by the Central Government and of which the President or the said Member had
been given an opportunity of being heard;
(b) the Judicial Member or Technical Member (State) of the State Bench or Area
Benches shall not be removed from their office except by an order made by the State
Government on the ground of proved misbehaviour or incapacity after an inquiry
made by a Judge of the concerned High Court nominated by the Chief Justice of the
concerned High Court on a reference made to him by the State Government and of
which the said Member had been given an opportunity of being heard.
(15) The Central Government, with the concurrence of the Chief Justice of India, may
suspend from office, the President or a Judicial or Technical Members of the National Bench
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or the Regional Benches or the Technical Member (Centre) of the State Bench or Area
Benches in respect of whom a reference has been made to the Judge of the Supreme Court
under sub-section (14).
(16) The State Government, with the concurrence of the Chief Justice of the High
Court, may suspend from office, a Judicial Member or Technical Member (State) of the State
Bench or Area Benches in respect of whom a reference has been made to the Judge of the
High Court under sub-section (14).
(17) Subject to the provisions of article 220 of the Constitution, the President, State
President or other Members, on ceasing to hold their office, shall not be eligible to appear, act
or plead before the National Bench and the Regional Benches or the State Bench and the
Area Benches thereof where he was the President or, as the case may be, a Member.
111. (1) The Appellate Tribunal shall not, while disposing of any proceedings before it
or an appeal before it, be bound by the procedure laid down in the Code of Civil Procedure,
1908, but shall be guided by the principles of natural justice and subject to the other provisions
of this Act and the rules made thereunder, the Appellate Tribunal shall have power to regulate
its own procedure.
(2) The Appellate Tribunal shall, for the purposes of discharging its functions under
this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure,
1908 while trying a suit in respect of the following matters, namely:—
(a) summoning and enforcing the attendance of any person and examining him
on oath;
(b) requiring the discovery and production of documents;
(c) receiving evidence on affidavits;
(d) subject to the provisions of sections 123 and 124 of the Indian Evidence
Act, 1872, requisitioning any public record or document or a copy of such record or
document from any office;
(e) issuing commissions for the examination of witnesses or documents;
(f) dismissing a representation for default or deciding it ex parte;
(g) setting aside any order of dismissal of any representation for default or any
order passed by it ex parte; and
(h) any other matter which may be prescribed.
(3) Any order made by the Appellate Tribunal may be enforced by it in the same
manner as if it were a decree made by a court in a suit pending therein, and it shall be lawful
for the Appellate Tribunal to send for execution of its orders to the court within the local
limits of whose jurisdiction,—
(a) in the case of an order against a company, the registered office of the company
is situated; or
(b) in the case of an order against any other person, the person concerned
voluntarily resides or carries on business or personally works for gain.
(4) All proceedings before the Appellate Tribunal shall be deemed to be judicial
proceedings within the meaning of sections 193 and 228, and for the purposes of section 196
of the Indian Penal Code, and the Appellate Tribunal shall be deemed to be civil court for the
purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.
112. (1) Any person aggrieved by an order passed against him under section 107 or
section 108 of this Act or the State Goods and Services Tax Act or the Union Territory
5 of 1908.
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1 of 1872.
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Goods and Services Tax Act may appeal to the Appellate Tribunal against such order within
three months from the date on which the order sought to be appealed against is communicated
to the person preferring the appeal.
(2) The Appellate Tribunal may, in its discretion, refuse to admit any such appeal
where the tax or input tax credit involved or the difference in tax or input tax credit
involved or the amount of fine, fee or penalty determined by such order, does not exceed fifty
thousand rupees.
(3) The Commissioner may, on his own motion, or upon request from the Commissioner
of State tax or Commissioner of Union territory tax, call for and examine the record of any
order passed by the Appellate Authority or the Revisional Authority under this Act or the
State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act for the
purpose of satisfying himself as to the legality or propriety of the said order and may, by
order, direct any officer subordinate to him to apply to the Appellate Tribunal within six
months from the date on which the said order has been passed for determination of such
points arising out of the said order as may be specified by the Commissioner in his order.
(4) Where in pursuance of an order under sub-section (3) the authorised officer makes
an application to the Appellate Tribunal, such application shall be dealt with by the Appellate
Tribunal as if it were an appeal made against the order under sub-section (11) of section 107
or under sub-section (1) of section 108 and the provisions of this Act shall apply to such
application, as they apply in relation to appeals filed under sub-section (1).
(5) On receipt of notice that an appeal has been preferred under this section, the party
against whom the appeal has been preferred may, notwithstanding that he may not have
appealed against such order or any part thereof, file, within forty-five days of the receipt of
notice, a memorandum of cross-objections, verified in the prescribed manner, against any
part of the order appealed against and such memorandum shall be disposed of by the
Appellate Tribunal, as if it were an appeal presented within the time specified in
sub-section (1).
(6) The Appellate Tribunal may admit an appeal within three months after the expiry of
the period referred to in sub-section (1), or permit the filing of a memorandum of
cross-objections within forty-five days after the expiry of the period referred to in
sub-section (5) if it is satisfied that there was sufficient cause for not presenting it within that
period.
(7) An appeal to the Appellate Tribunal shall be in such form, verified in such manner
and shall be accompanied by such fee, as may be prescribed.
(8) No appeal shall be filed under sub-section (1), unless the appellant has paid––
(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising
from the impugned order, as is admitted by him, and
(b) a sum equal to twenty per cent. of the remaining amount of tax in dispute, in
addition to the amount paid under sub-section (6) of section 107, arising from the said
order, in relation to which the appeal has been filed.
(9) Where the appellant has paid the amount as per sub-section (8), the recovery
proceedings for the balance amount shall be deemed to be stayed till the disposal of the
appeal.
(10) Every application made before the Appellate Tribunal,—
(a) in an appeal for rectification of error or for any other purpose; or
(b) for restoration of an appeal or an application,
shall be accompanied by such fees as may be prescribed.
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113. (1) The Appellate Tribunal may, after giving the parties to the appeal
an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying
or annulling the decision or order appealed against or may refer the case back to the Appellate
Authority, or the Revisional Authority or to the original adjudicating authority, with such
directions as it may think fit, for a fresh adjudication or decision after taking additional
evidence, if necessary.
(2) The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of
an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for
reasons to be recorded in writing:
Provided that no such adjournment shall be granted more than three times to a party
during hearing of the appeal.
(3) The Appellate Tribunal may amend any order passed by it under sub-section (1) so
as to rectify any error apparent on the face of the record, if such error is noticed by it on its
own accord, or is brought to its notice by the Commissioner or the Commissioner of State tax
or the Commissioner of the Union territory tax or the other party to the appeal within a period
of three months from the date of the order:
Provided that no amendment which has the effect of enhancing an assessment or
reducing a refund or input tax credit or otherwise increasing the liability of the other party,
shall be made under this sub-section, unless the party has been given an opportunity of
being heard.
(4) The Appellate Tribunal shall, as far as possible, hear and decide every appeal
within a period of one year from the date on which it is filed.
(5) The Appellate Tribunal shall send a copy of every order passed under this section
to the Appellate Authority or the Revisional Authority, or the original adjudicating authority,
as the case may be, the appellant and the jurisdictional Commissioner or the Commissioner of
State tax or the Union territory tax.
(6) Save as provided in section 117 or section 118, orders passed by the Appellate
Tribunal on an appeal shall be final and binding on the parties.
114. The President shall exercise such financial and administrative powers over the
National Bench and Regional Benches of the Appellate Tribunal as may be prescribed:
Provided that the President shall have the authority to delegate such of his financial
and administrative powers as he may think fit to any other Member or any officer of the
National Bench and Regional Benches, subject to the condition that such Member or officer
shall, while exercising such delegated powers, continue to act under the direction, control
and supervision of the President.
115. Where an amount paid by the appellant under sub-section (6) of section 107 or
sub-section (8) of section 112 is required to be refunded consequent to any order of the
Appellate Authority or of the Appellate Tribunal, interest at the rate specified under section
56 shall be payable in respect of such refund from the date of payment of the amount till the
date of refund of such amount.
116. (1) Any person who is entitled or required to appear before an officer appointed
under this Act, or the Appellate Authority or the Appellate Tribunal in connection with any
proceedings under this Act, may, otherwise than when required under this Act to appear
personally for examination on oath or affirmation, subject to the other provisions of this
section, appear by an authorised representative.
(2) For the purposes of this Act, the expression “authorised representative” shall
mean a person authorised by the person referred to in sub-section (1) to appear on his
behalf, being—
(a) his relative or regular employee; or
Orders of
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(b) 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
(c) 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
(d) 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
(e) any person who has been authorised to act as a goods and services tax
practitioner on behalf of the concerned registered person.
(3) No person,—
(a) who has been dismissed or removed from Government service; or
(b) 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
(c) who is found guilty of misconduct by the prescribed authority;
(d) who has been adjudged as an insolvent,
shall be qualified to represent any person under sub-section (1)—
(i) for all times in case of persons referred to in clauses (a), (b) and (c); and
(ii) 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.
117. (1) Any person aggrieved by any order passed by the State Bench or Area
Benches of the Appellate Tribunal may file an appeal to the High Court and the High Court
may admit such appeal, if it is satisfied that the case involves a substantial question of law.
(2) An appeal under sub-section (1) shall be filed within a period of one hundred and
eighty days from the date on which the order appealed against is received by the aggrieved
person and it shall be in such form, verified in such manner as may be prescribed:
Provided that the High Court may entertain an appeal after the expiry of the said period
if it is satisfied that there was sufficient cause for not filing it within such period.
(3) Where the High Court is satisfied that a substantial question of law is involved in
any case, it shall formulate that question and the appeal shall be heard only on the question
so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue
that the case does not involve such question:
Provided that nothing in this sub-section shall be deemed to take away or abridge the
power of the court to hear, for reasons to be recorded, the appeal on any other substantial
question of law not formulated by it, if it is satisfied that the case involves such question.
(4) The High Court shall decide the question of law so formulated and deliver such
judgment thereon containing the grounds on which such decision is founded and may
award such cost as it deems fit.
Appeal to
High Court.
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(5) The High Court may determine any issue which––
(a) has not been determined by the State Bench or Area Benches; or
(b) has been wrongly determined by the State Bench or Area Benches, by reason
of a decision on such question of law as herein referred to in sub-section (3).
(6) Where an appeal has been filed before the High Court, it shall be heard by a Bench
of not less than two Judges of the High Court, and shall be decided in accordance with the
opinion of such Judges or of the majority, if any, of such Judges.
(7) Where there is no such majority, the Judges shall state the point of law upon which
they differ and the case shall, then, be heard upon that point only, by one or more of the other
Judges of the High Court and such point shall be decided according to the opinion of the
majority of the Judges who have heard the case including those who first heard it.
(8) Where the High Court delivers a judgment in an appeal filed before it under this
section, effect shall be given to such judgment by either side on the basis of a certified copy
of the judgment.
(9) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure,
1908, relating to appeals to the High Court shall, as far as may be, apply in the case of appeals
under this section.
118. (1) An appeal shall lie to the Supreme Court—
(a) from any order passed by the National Bench or Regional Benches of the
Appellate Tribunal; or
(b) from any judgment or order passed by the High Court in an appeal made
under section 117 in any case which, on its own motion or on an application made by
or on behalf of the party aggrieved, immediately after passing of the judgment or order,
the High Court certifies to be a fit one for appeal to the Supreme Court.
(2) The provisions of the Code of Civil Procedure, 1908, relating to appeals to the
Supreme Court shall, so far as may be, apply in the case of appeals under this section as they
apply in the case of appeals from decrees of a High Court.
(3) Where the judgment of the High Court is varied or reversed in the appeal, effect
shall be given to the order of the Supreme Court in the manner provided in section 117 in the
case of a judgment of the High Court.
119. Notwithstanding that an appeal has been preferred to the High Court or the
Supreme Court, sums due to the Government as a result of an order passed by the National
or Regional Benches of the Appellate Tribunal under sub-section (1) of section 113 or an
order passed by the State Bench or Area Benches of the Appellate Tribunal under subsection
(1) of section 113 or an order passed by the High Court under section 117, as the case
may be, shall be payable in accordance with the order so passed.
120. (1) The Board may, on the recommendations of the Council, from time to time,
issue orders or instructions or directions fixing such monetary limits, as it may deem fit, for
the purposes of regulating the filing of appeal or application by the officer of the central tax
under the provisions of this Chapter.
(2) Where, in pursuance of the orders or instructions or directions issued under subsection
(1), the officer of the central tax has not filed an appeal or application against any
decision or order passed under the provisions of this Act, it shall not preclude such officer
of the central tax from filing appeal or application in any other case involving the same or
similar issues or questions of law.
(3) Notwithstanding the fact that no appeal or application has been filed by the officer
of the central tax pursuant to the orders or instructions or directions issued under
sub-section (1), no person, being a party in appeal or application shall contend that the
5 of 1908.
Appeal to
Supreme
Court.
5 of 1908.
Sums due to
be paid
notwithstanding
appeal, etc.
Appeal not to
be filed in
certain cases.
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officer of the central tax has acquiesced in the decision on the disputed issue by not filing an
appeal or application.
(4) The Appellate Tribunal or court hearing such appeal or application shall have
regard to the circumstances under which appeal or application was not filed by the officer of
the central tax in pursuance of the orders or instructions or directions issued under subsection
(1).
121. Notwithstanding anything to the contrary in any provisions of this Act, no
appeal shall lie against any decision taken or order passed by an officer of central tax if such
decision taken or order passed relates to any one or more of the following matters, namely:—
(a) an order of the Commissioner or other authority empowered to direct transfer
of proceedings from one officer to another officer; or
(b) an order pertaining to the seizure or retention of books of account, register
and other documents; or
(c) an order sanctioning prosecution under this Act; or
(d) an order passed under section 80.
CHAPTER XIX
OFFENCES AND PENALTIES
122. (1) Where a taxable person who––
(i) supplies any goods or services or both without issue of any invoice or issues
an incorrect or false invoice with regard to any such supply;
(ii) issues any invoice or bill without supply of goods or services or both in
violation of the provisions of this Act or the rules made thereunder;
(iii) collects any amount as tax but fails to pay the same to the Government
beyond a period of three months from the date on which such payment becomes due;
(iv) collects any tax in contravention of the provisions of this Act but fails to pay
the same to the Government beyond a period of three months from the date on which
such payment becomes due;
(v) fails to deduct the tax in accordance with the provisions of sub-section (1) of
section 51, or deducts an amount which is less than the amount required to be deducted
under the said sub-section, or where he fails to pay to the Government under subsection
(2) thereof, the amount deducted as tax;
(vi) fails to collect tax in accordance with the provisions of sub-section (1) of
section 52, or collects an amount which is less than the amount required to be collected
under the said sub-section or where he fails to pay to the Government the amount
collected as tax under sub-section (3) of section 52;
(vii) takes or utilizes input tax credit without actual receipt of goods or services
or both either fully or partially, in contravention of the provisions of this Act or the
rules made thereunder;
(viii) fraudulently obtains refund of tax under this Act;
(ix) takes or distributes input tax credit in contravention of section 20, or the
rules made thereunder;
(x) falsifies or substitutes financial records or produces fake accounts or
documents or furnishes any false information or return with an intention to evade
payment of tax due under this Act;
Nonappealable
decisions and
orders.
Penalty for
certain
offences.
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(xi) is liable to be registered under this Act but fails to obtain registration;
(xii) furnishes any false information with regard to registration particulars, either
at the time of applying for registration, or subsequently;
(xiii) obstructs or prevents any officer in discharge of his duties under this Act;
(xiv) transports any taxable goods without the cover of documents as may be
specified in this behalf;
(xv) suppresses his turnover leading to evasion of tax under this Act;
(xvi) fails to keep, maintain or retain books of account and other documents in
accordance with the provisions of this Act or the rules made thereunder;
(xvii) fails to furnish information or documents called for by an officer in
accordance with the provisions of this Act or the rules made thereunder or furnishes
false information or documents during any proceedings under this Act;
(xviii) supplies, transports or stores any goods which he has reasons to believe
are liable to confiscation under this Act;
(xix) issues any invoice or document by using the registration number of another
registered person;
(xx) tampers with, or destroys any material evidence or document;
(xxi) disposes off or tampers with any goods that have been detained, seized, or
attached under this Act,
he shall be liable to pay a penalty of ten thousand rupees or an amount equivalent to the tax
evaded or the tax not deducted under section 51 or short deducted or deducted but not paid
to the Government or tax not collected under section 52 or short collected or collected but
not paid to the Government or input tax credit availed of or passed on or distributed irregularly,
or the refund claimed fraudulently, whichever is higher.
(2) Any registered person who supplies any goods or services or both on which any
tax has not been paid or short-paid or erroneously refunded, or where the input tax credit has
been wrongly availed or utilised,—
(a) for any reason, other than the reason of fraud or any wilful misstatement or
suppression of facts to evade tax, shall be liable to a penalty of ten thousand rupees or
ten per cent. of the tax due from such person, whichever is higher;
(b) for reason of fraud or any wilful misstatement or suppression of facts to
evade tax, shall be liable to a penalty equal to ten thousand rupees or the tax due from
such person, whichever is higher.
(3) Any person who––
(a) aids or abets any of the offences specified in clauses (i) to (xxi) of
sub-section (1);
(b) acquires possession of, or in any way concerns himself in transporting,
removing, depositing, keeping, concealing, supplying, or purchasing or in any other
manner deals with any goods which he knows or has reasons to believe are liable to
confiscation under this Act or the rules made thereunder;
(c) receives or is in any way concerned with the supply of, or in any other
manner deals with any supply of services which he knows or has reasons to believe
are in contravention of any provisions of this Act or the rules made thereunder;
(d) fails to appear before the officer of central tax, when issued with a summon
for appearance to give evidence or produce a document in an inquiry;
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(e) fails to issue invoice in accordance with the provisions of this Act or the rules
made thereunder or fails to account for an invoice in his books of account,
shall be liable to a penalty which may extend to twenty five thousand rupees.
123. If a person who is required to furnish an information return under section 150 fails
to do so within the period specified in the notice issued under sub-section (3) thereof, the
proper officer may direct that such person shall be liable to pay a penalty of one hundred
rupees for each day of the period during which the failure to furnish such return continues:
Provided that the penalty imposed under this section shall not exceed five thousand
rupees.
124. If any person required to furnish any information or return under section 151,—
(a) without reasonable cause fails to furnish such information or return as may
be required under that section, or
(b) wilfully furnishes or causes to furnish any information or return which he
knows to be false,
he shall be punishable with a fine which may extend to ten thousand rupees and in case of a
continuing offence to a further fine which may extend to one hundred rupees for each day
after the first day during which the offence continues subject to a maximum limit of twenty
five thousand rupees.
125. Any person, who contravenes any of the provisions of this Act or any rules made
thereunder for which no penalty is separately provided for in this Act, shall be liable to a
penalty which may extend to twenty five thousand rupees.
126. (1) No officer under this Act shall impose any penalty for minor breaches of tax
regulations or procedural requirements and in particular, any omission or mistake in
documentation which is easily rectifiable and made without fraudulent intent or gross
negligence.
Explanation.––For the purpose of this sub-section,––
(a) a breach shall be considered a ‘minor breach’ if the amount of tax involved is
less than five thousand rupees;
(b) an omission or mistake in documentation shall be considered to be easily
rectifiable if the same is an error apparent on the face of record.
(2) The penalty imposed under this Act shall depend on the facts and circumstances of
each case and shall be commensurate with the degree and severity of the breach.
(3) No penalty shall be imposed on any person without giving him an opportunity of
being heard.
(4) The officer under this Act shall while imposing penalty in an order for a breach of
any law, regulation or procedural requirement, specify the nature of the breach and the
applicable law, regulation or procedure under which the amount of penalty for the breach has
been specified.
(5) When a person voluntarily discloses to an officer under this Act the circumstances
of a breach of the tax law, regulation or procedural requirement prior to the discovery of the
breach by the officer under this Act, the proper officer may consider this fact as a mitigating
factor when quantifying a penalty for that person.
(6) The provisions of this section shall not apply in such cases where the penalty
specified under this Act is either a fixed sum or expressed as a fixed percentage.
127. Where the proper officer is of the view that a person is liable to a penalty and the
same is not covered under any proceedings under section 62 or section 63 or section 64 or
Penalty for
failure to
furnish
information
return.
Fine for
failure to
furnish
statistics.
General
penalty.
General
disciplines
related to
penalty.
Power to
impose
penalty in
certain cases.
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section 73 or section 74 or section 129 or section 130, he may issue an order levying such
penalty after giving a reasonable opportunity of being heard to such person.
128. The Government may, by notification, waive in part or full, any penalty referred to
in section 122 or section 123 or section 125 or any late fee referred to in section 47 for such
class of taxpayers and under such mitigating circumstances as may be specified therein on
the recommendations of the Council.
129. (1) Notwithstanding anything contained in this Act, where any person transports
any goods or stores any goods while they are in transit in contravention of the provisions of
this Act or the rules made thereunder, all such goods and conveyance used as a means of
transport for carrying the said goods and documents relating to such goods and conveyance
shall be liable to detention or seizure and after detention or seizure, shall be released,––
(a) on payment of the applicable tax and penalty equal to one hundred per cent.
of the tax payable on such goods and, in case of exempted goods, on payment of an
amount equal to two per cent. of the value of goods or twenty five thousand rupees,
whichever is less, where the owner of the goods comes forward for payment of such
tax and penalty;
(b) on payment of the applicable tax and penalty equal to the fifty per cent. of the
value of the goods reduced by the tax amount paid thereon and, in case of exempted
goods, on payment of an amount equal to five per cent. of the value of goods or twenty
five thousand rupees, whichever is less, where the owner of the goods does not come
forward for payment of such tax and penalty;
(c) upon furnishing a security equivalent to the amount payable under clause (a)
or clause (b) in such form and manner as may be prescribed:
Provided that no such goods or conveyance shall be detained or seized without
serving an order of detention or seizure on the person transporting the goods.
(2) The provisions of sub-section (6) of section 67 shall, mutatis mutandis, apply for
detention and seizure of goods and conveyances.
(3) The proper officer detaining or seizing goods or conveyances shall issue a notice
specifying the tax and penalty payable and thereafter, pass an order for payment of tax and
penalty under clause (a) or clause (b) or clause (c).
(4) No tax, interest or penalty shall be determined under sub-section (3) without giving
the person concerned an opportunity of being heard.
(5) On payment of amount referred in sub-section (1), all proceedings in respect of the
notice specified in sub-section (3) shall be deemed to be concluded.
(6) Where the person transporting any goods or the owner of the goods fails to pay
the amount of tax and penalty as provided in sub-section (1) within seven days of such
detention or seizure, further proceedings shall be initiated in accordance with the provisions
of section 130:
Provided that where the detained or seized goods are perishable or hazardous in
nature or are likely to depreciate in value with passage of time, the said period of seven days
may be reduced by the proper officer.
130. (1) Notwithstanding anything contained in this Act, if any person—
(i) supplies or receives any goods in contravention of any of the provisions of
this Act or the rules made thereunder with intent to evade payment of tax; or
(ii) does not account for any goods on which he is liable to pay tax under this
Act; or
(iii) supplies any goods liable to tax under this Act without having applied for
registration; or
Power to
waive penalty
or fee or both.
Detention,
seizure and
release of
goods and
conveyances
in transit.
Confiscation
of goods or
conveyances
and levy of
penalty.
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(iv) contravenes any of the provisions of this Act or the rules made thereunder
with intent to evade payment of tax; or
(v) uses any conveyance as a means of transport for carriage of goods in
contravention of the provisions of this Act or the rules made thereunder unless the
owner of the conveyance proves that it was so used without the knowledge or
connivance of the owner himself, his agent, if any, and the person in charge of the
conveyance,
then, all such goods or conveyances shall be liable to confiscation and the person shall be
liable to penalty under section 122.
(2) Whenever confiscation of any goods or conveyance is authorised by this Act, the
officer adjudging it shall give to the owner of the goods an option to pay in lieu of confiscation,
such fine as the said officer thinks fit:
Provided that such fine leviable shall not exceed the market value of the goods
confiscated, less the tax chargeable thereon:
Provided further that the aggregate of such fine and penalty leviable shall not be less
than the amount of penalty leviable under sub-section (1) of section 129:
Provided also that where any such conveyance is used for the carriage of the goods or
passengers for hire, the owner of the conveyance shall be given an option to pay in lieu of
the confiscation of the conveyance a fine equal to the tax payable on the goods being
transported thereon.
(3) Where any fine in lieu of confiscation of goods or conveyance is imposed under
sub-section (2), the owner of such goods or conveyance or the person referred to in subsection
(1), shall, in addition, be liable to any tax, penalty and charges payable in respect of
such goods or conveyance.
(4) No order for confiscation of goods or conveyance or for imposition of penalty shall
be issued without giving the person an opportunity of being heard.
(5) Where any goods or conveyance are confiscated under this Act, the title of such
goods or conveyance shall thereupon vest in the Government.
(6) The proper officer adjudging confiscation shall take and hold possession of the
things confiscated and every officer of Police, on the requisition of such proper officer, shall
assist him in taking and holding such possession.
(7) The proper officer may, after satisfying himself that the confiscated goods or
conveyance are not required in any other proceedings under this Act and after giving
reasonable time not exceeding three months to pay fine in lieu of confiscation, dispose of
such goods or conveyance and deposit the sale proceeds thereof with the Government.
131. Without prejudice to the provisions contained in the Code of Criminal Procedure,
1973, no confiscation made or penalty imposed under the provisions of this Act or the rules
made thereunder shall prevent the infliction of any other punishment to which the person
affected thereby is liable under the provisions of this Act or under any other law for the time
being in force.
132. (1) Whoever commits any of the following offences, namely:—
(a) supplies any goods or services or both without issue of any invoice, in
violation of the provisions of this Act or the rules made thereunder, with the intention
to evade tax;
(b) issues any invoice or bill without supply of goods or services or both in
violation of the provisions of this Act, or the rules made thereunder leading to wrongful
availment or utilisation of input tax credit or refund of tax;
2 of 1974.
Confiscation
or penalty
not to
interfere with
other
punishments.
Punishment
for certain
offences.
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(c) avails input tax credit using such invoice or bill referred to in clause (b);
(d) collects any amount as tax but fails to pay the same to the Government
beyond a period of three months from the date on which such payment becomes due;
(e) evades tax, fraudulently avails input tax credit or fraudulently obtains refund
and where such offence is not covered under clauses (a) to (d);
(f) falsifies or substitutes financial records or produces fake accounts or
documents or furnishes any false information with an intention to evade payment of
tax due under this Act;
(g) obstructs or prevents any officer in the discharge of his duties under this
Act;
(h) acquires possession of, or in any way concerns himself in transporting,
removing, depositing, keeping, concealing, supplying, or purchasing or in any other
manner deals with, any goods which he knows or has reasons to believe are liable to
confiscation under this Act or the rules made thereunder;
(i) receives or is in any way concerned with the supply of, or in any other manner
deals with any supply of services which he knows or has reasons to believe are in
contravention of any provisions of this Act or the rules made thereunder;
(j) tampers with or destroys any material evidence or documents;
(k) fails to supply any information which he is required to supply under this Act
or the rules made thereunder or (unless with a reasonable belief, the burden of proving
which shall be upon him, that the information supplied by him is true) supplies false
information; or
(l) attempts to commit, or abets the commission of any of the offences mentioned
in clauses (a) to (k) of this section,
shall be punishable––
(i) in cases where the amount of tax evaded or the amount of input tax credit
wrongly availed or utilised or the amount of refund wrongly taken exceeds five hundred
lakh rupees, with imprisonment for a term which may extend to five years and with fine;
(ii) in cases where the amount of tax evaded or the amount of input tax credit
wrongly availed or utilised or the amount of refund wrongly taken exceeds two hundred
lakh rupees but does not exceed five hundred lakh rupees, with imprisonment for a
term which may extend to three years and with fine;
(iii) in the case of any other offence where the amount of tax evaded or the
amount of input tax credit wrongly availed or utilised or the amount of refund wrongly
taken exceeds one hundred lakh rupees but does not exceed two hundred lakh rupees,
with imprisonment for a term which may extend to one year and with fine;
(iv) in cases where he commits or abets the commission of an offence specified
in clause (f) or clause (g) or clause (j), he shall be punishable with imprisonment for a
term which may extend to six months or with fine or with both.
(2) Where any person convicted of an offence under this section is again convicted of
an offence under this section, then, he shall be punishable for the second and for every
subsequent offence with imprisonment for a term which may extend to five years and with
fine.
(3) The imprisonment referred to in clauses (i), (ii) and (iii) of sub-section (1) and
sub-section (2) shall, in the absence of special and adequate reasons to the contrary to be
recorded in the judgment of the Court, be for a term not less than six months.
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(4) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, all
offences under this Act, except the offences referred to in sub-section (5) shall be noncognizable
and bailable.
(5) The offences specified in clause (a) or clause (b) or clause (c) or clause (d) of subsection
(1) and punishable under clause (i) of that sub-section shall be cognizable and nonbailable.
(6) A person shall not be prosecuted for any offence under this section except with the
previous sanction of the Commissioner.
Explanation.— For the purposes of this section, the term “tax” shall include the
amount of tax evaded or the amount of input tax credit wrongly availed or utilised or refund
wrongly taken under the provisions of 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
and cess levied under the Goods and Services Tax (Compensation to States) Act.
133. Where any person engaged in connection with the collection of statistics under
section 151 or compilation or computerisation thereof or if any officer of central tax having
access to information specified under sub-section (1) of section 150, or if any person engaged
in connection with the provision of service on the common portal or the agent of common
portal, wilfully discloses any information or the contents of any return furnished under this
Act or rules made thereunder otherwise than in execution of his duties under the said
sections or for the purposes of prosecution for an offence under this Act or under any other
Act for the time being in force, he shall be punishable with imprisonment for a term which
may extend to six months or with fine which may extend to twenty-five thousand rupees, or
with both.
(2) Any person—
(a) who is a Government servant shall not be prosecuted for any offence under
this section except with the previous sanction of the Government;
(b) who is not a Government servant shall not be prosecuted for any offence
under this section except with the previous sanction of the Commissioner.
134. No court shall take cognizance of any offence punishable under this Act or the
rules made thereunder except with the previous sanction of the Commissioner, and no court
inferior to that of a Magistrate of the First Class, shall try any such offence.
135. In any prosecution for an offence under this Act which requires a culpable mental
state on the part of the accused, the court shall presume the existence of such mental state
but it shall be a defence for the accused to prove the fact that he had no such mental state
with respect to the act charged as an offence in that prosecution.
Explanation.—For the purposes of this section,––
(i) the expression “culpable mental state” includes intention, motive, knowledge
of a fact, and belief in, or reason to believe, a fact;
(ii) a fact is said to be proved only when the court believes it to exist beyond
reasonable doubt and not merely when its existence is established by a preponderance
of probability.
136. A statement made and signed by a person on appearance in response to any
summons issued under section 70 during the course of any inquiry or proceedings under
this Act shall be relevant, for the purpose of proving, in any prosecution for an offence under
this Act, the truth of the facts which it contains,––
(a) when the person who made the statement is dead or cannot be found, or is
incapable of giving evidence, or is kept out of the way by the adverse party, or whose
presence cannot be obtained without an amount of delay or expense which, under the
circumstances of the case, the court considers unreasonable; or
Liability of
officers and
certain other
persons.
Cognizance of
offences.
Presumption
of culpable
mental state.
Relevancy of
statements
under certain
circumstances.
2 of 1974.
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(b) when the person who made the statement is examined as a witness in the case
before the court and the court is of the opinion that, having regard to the circumstances
of the case, the statement should be admitted in evidence in the interest of justice.
137. (1) Where an offence committed by a person under this Act is a company, every
person who, at the time the offence was committed was in charge of, and was responsible to,
the company for the conduct of business of the company, as well as the company, shall be
deemed to be guilty of the offence and shall be liable to be proceeded against and punished
accordingly.
(2) Notwithstanding anything contained in sub-section (1), where an offence under
this Act has been committed by a company and it is proved that the offence has been
committed with the consent or connivance of, or is attributable to any negligence on the part
of, any director, manager, secretary or other officer of the company, such director, manager,
secretary or other officer shall also be deemed to be guilty of that offence and shall be liable
to be proceeded against and punished accordingly.
(3) Where an offence under this Act has been committed by a taxable person being a
partnership firm or a Limited Liability Partnership or a Hindu undivided family or a trust, the
partner or karta or managing trustee shall be deemed to be guilty of that offence and shall be
liable to be proceeded against and punished accordingly and the provisions of sub-section
(2) shall, mutatis mutandis, apply to such persons.
(4) Nothing contained in this section shall render any such person liable to any
punishment provided in this Act, if he proves that the offence was committed without his
knowledge or that he had exercised all due diligence to prevent the commission of such
offence.
Explanation.––For the purposes of this section,––
(i) “company” means a body corporate and includes a firm or other association
of individuals; and
(ii) “director”, in relation to a firm, means a partner in the firm.
138. (1) Any offence under this Act may, either before or after the institution of
prosecution, be compounded by the Commissioner on payment, by the person accused of
the offence, to the Central Government or the State Government, as the case be, of such
compounding amount in such manner as may be prescribed:
Provided that nothing contained in this section shall apply to—
(a) a person who has been allowed to compound once in respect of any of the
offences specified in clauses (a) to (f) of sub-section (1) of section 132 and the offences
specified in clause (l) which are relatable to offences specified in clauses (a) to (f) of
the said sub-section;
(b) a person who has been allowed to compound once in respect of any offence,
other than those in clause (a), under this Act or under the provisions of any State
Goods and Services Tax Act or the Union Territory Goods and Services Tax Act or the
Integrated Goods and Services Tax Act in respect of supplies of value exceeding one
crore rupees;
(c) a person who has been accused of committing an offence under this Act
which is also an offence under any other law for the time being in force;
(d) a person who has been convicted for an offence under this Act by a court;
(e) a person who has been accused of committing an offence specified in clause
(g) or clause (j) or clause (k) of sub-section (1) of section 132; and
Offences by
companies.
Compounding
of offences.
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(f) any other class of persons or offences as may be prescribed:
Provided further that any compounding allowed under the provisions of this
section shall not affect the proceedings, if any, instituted under any other law:
Provided also that compounding shall be allowed only after making payment of
tax, interest and penalty involved in such offences.
(2) The amount for compounding of offences under this section shall be such as may
be prescribed, subject to the minimum amount not being less than ten thousand rupees or
fifty per cent of the tax involved, whichever is higher, and the maximum amount not being
less than thirty thousand rupees or one hundred and fifty per cent. of the tax, whichever is
higher.
(3) On payment of such compounding amount as may be determined by the
Commissioner, no further proceedings shall be initiated under this Act against the accused
person in respect of the same offence and any criminal proceedings, if already initiated in
respect of the said offence, shall stand abated.
CHAPTER XX
TRANSITIONAL PROVISIONS
139. (1) On and from the appointed day, every person registered under any of the
existing laws and having a valid Permanent Account Number shall be issued a certificate of
registration on provisional basis, subject to such conditions and in such form and manner as
may be prescribed, which unless replaced by a final certificate of registration under
sub-section (2), shall be liable to be cancelled if the conditions so prescribed are not complied
with.
(2) The final certificate of registration shall be granted in such form and manner and
subject to such conditions as may be prescribed.
(3) The certificate of registration issued to a person under sub-section (1) shall be
deemed to have not been issued if the said registration is cancelled in pursuance of an
application filed by such person that he was not liable to registration under section 22 or
section 24.
140. (1) A registered person, other than a person opting to pay tax under section 10,
shall be entitled to take, in his electronic credit ledger, the amount of CENVAT credit carried
forward in the return relating to the period ending with the day immediately preceding the
appointed day, furnished by him under the existing law in such manner as may be prescribed:
Provided that the registered person shall not be allowed to take credit in the following
circumstances, namely:—
(i) where the said amount of credit is not admissible as input tax credit under this
Act; or
(ii) where he has not furnished all the returns required under the existing law for
the period of six months immediately preceding the appointed date; or
(iii) where the said amount of credit relates to goods manufactured and cleared
under such exemption notifications as are notified by the Government.
(2) A registered person, other than a person opting to pay tax under section 10, shall be
entitled to take, in his electronic credit ledger, credit of the unavailed CENVAT credit in
respect of capital goods, not carried forward in a return, furnished under the existing law by
him, for the period ending with the day immediately preceding the appointed day in such
manner as may be prescribed:
Provided that the registered person shall not be allowed to take credit unless the said
credit was admissible as CENVAT credit under the existing law and is also admissible as input
tax credit under this Act.
Migration of
existing
taxpayers.
Transitional
arrangements
for input tax
credit.
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Explanation.––For the purposes of this sub-section, the expression “unavailed
CENVAT credit” means the amount that remains after subtracting the amount of CENVAT
credit already availed in respect of capital goods by the taxable person under the existing law
from the aggregate amount of CENVAT credit to which the said person was entitled in
respect of the said capital goods under the existing law;
(3) A registered person, who was not liable to be registered under the existing law, or
who was engaged in the manufacture of exempted goods or provision of exempted services,
or who was providing works contract service and was availing of the benefit of notification
No. 26/2012—Service Tax, dated the 20th June, 2012 or a first stage dealer or a second stage
dealer or a registered importer or a depot of a manufacturer, shall be entitled to take, in his
electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs
contained in semi-finished or finished goods held in stock on the appointed day subject to
the following conditions, namely:––
(i) such inputs or goods are used or intended to be used for making taxable
supplies under this Act;
(ii) the said registered person is eligible for input tax credit on such inputs under
this Act;
(iii) the said registered person is in possession of invoice or other prescribed
documents evidencing payment of duty under the existing law in respect of such
inputs;
(iv) such invoices or other prescribed documents were issued not earlier than
twelve months immediately preceding the appointed day; and
(v) the supplier of services is not eligible for any abatement under this Act:
Provided that where a registered person, other than a manufacturer or a supplier of
services, is not in possession of an invoice or any other documents evidencing payment of
duty in respect of inputs, then, such registered person shall, subject to such conditions,
limitations and safeguards as may be prescribed, including that the said taxable person shall
pass on the benefit of such credit by way of reduced prices to the recipient, be allowed to
take credit at such rate and in such manner as may be prescribed.
(4) A registered person, who was engaged in the manufacture of taxable as well as
exempted goods under the Central Excise Act, 1944 or provision of taxable as well as exempted
services under Chapter V of the Finance Act, 1994, but which are liable to tax under this Act,
shall be entitled to take, in his electronic credit ledger,—
(a) the amount of CENVAT credit carried forward in a return furnished under the
existing law by him accordance with the provisions of sub-section (1); and
(b) the amount of CENVAT credit of eligible duties in respect of inputs held in
stock and inputs contained in semi-finished or finished goods held in stock on the
appointed day, relating to such exempted goods or services, in accordance with the
provisions of sub-section (3).
(5) A registered person shall be entitled to take, in his electronic credit ledger, credit of
eligible duties and taxes in respect of inputs or input services received on or after the
appointed day but the duty or tax in respect of which has been paid by the supplier under the
existing law, subject to the condition that the invoice or any other duty or tax paying document
of the same was recorded in the books of accounts of such person within a period of thirty
days from the appointed day:
Provided that the period of thirty days may, on sufficient cause being shown, be
extended by the Commissioner for a further period not exceeding thirty days:
Provided further that said registered person shall furnish a statement, in such manner
as may be prescribed, in respect of credit that has been taken under this sub-section.
1 of 1944.
32 of 1994.
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(6) A registered person, who was either paying tax at a fixed rate or paying a fixed
amount in lieu of the tax payable under the existing law shall be entitled to take, in his
electronic credit ledger, credit of eligible duties in respect of inputs held in stock and inputs
contained in semi-finished or finished goods held in stock on the appointed day subject to
the following conditions, namely:––
(i) such inputs or goods are used or intended to be used for making taxable
supplies under this Act;
(ii) the said registered person is not paying tax under section 10;
(iii) the said registered person is eligible for input tax credit on such inputs
under this Act;
(iv) the said registered person is in possession of invoice or other prescribed
documents evidencing payment of duty under the existing law in respect of inputs;
and
(v) such invoices or other prescribed documents were issued not earlier than
twelve months immediately preceding the appointed day.
(7) Notwithstanding anything to the contrary contained in this Act, the input tax credit
on account of any services received prior to the appointed day by an Input Service Distributor
shall be eligible for distribution as credit under this Act even if the invoices relating to such
services are received on or after the appointed day.
(8) Where a registered person having centralised registration under the existing law
has obtained a registration under this Act, such person shall be allowed to take, in his
electronic credit ledger, credit of the amount of CENVAT credit carried forward in a return,
furnished under the existing law by him, in respect of the period ending with the day
immediately preceding the appointed day in such manner as may be prescribed:
Provided that if the registered person furnishes his return for the period ending with
the day immediately preceding the appointed day within three months of the appointed day,
such credit shall be allowed subject to the condition that the said return is either an original
return or a revised return where the credit has been reduced from that claimed earlier:
Provided further that the registered person shall not be allowed to take credit unless
the said amount is admissible as input tax credit under this Act:
Provided also that such credit may be transferred to any of the registered persons
having the same Permanent Account Number for which the centralised registration was
obtained under the existing law.
(9) Where any CENVAT credit availed for the input services provided under the existing
law has been reversed due to non-payment of the consideration within a period of three
months, such credit can be reclaimed subject to the condition that the registered person has
made the payment of the consideration for that supply of services within a period of three
months from the appointed day.
(10) The amount of credit under sub-sections (3), (4) and (6) shall be calculated in
such manner as may be prescribed.
Explanation 1.—For the purposes of sub-sections (3), (4) and (6), the expression
“eligible duties” means––
(i) the additional duty of excise leviable under section 3 of the Additional Duties
of Excise (Goods of Special Importance) Act, 1957;
(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs
Tariff Act, 1975;
(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs
Tariff Act, 1975;
58 of 1957.
51 of 1975.
51 of 1975.
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(iv) the additional duty of excise leviable under section 3 of the Additional
Duties of Excise (Textile and Textile Articles) Act, 1978;
(v) the duty of excise specified in the First Schedule to the Central Excise Tariff
Act, 1985;
(vi) the duty of excise specified in the Second Schedule to the Central Excise
Tariff Act, 1985; and
(vii) the National Calamity Contingent Duty leviable under section 136 of the
Finance Act, 2001;
in respect of inputs held in stock and inputs contained in semi-finished or finished
goods held in stock on the appointed day.
Explanation 2.—For the purposes of sub-section (5), the expression “eligible
duties and taxes” means––
(i) the additional duty of excise leviable under section 3 of the Additional Duties
of Excise (Goods of Special Importance) Act, 1957;
(ii) the additional duty leviable under sub-section (1) of section 3 of the Customs
Tariff Act, 1975;
(iii) the additional duty leviable under sub-section (5) of section 3 of the Customs
Tariff Act, 1975;
(iv) the additional duty of excise leviable under section 3 of the Additional
Duties of Excise (Textile and Textile Articles) Act, 1978;
(v) the duty of excise specified in the First Schedule to the Central Excise Tariff
Act, 1985;
(vi) the duty of excise specified in the Second Schedule to the Central Excise
Tariff Act, 1985;
(vii) the National Calamity Contingent Duty leviable under section 136 of the
Finance Act, 2001; and
(viii) the service tax leviable under section 66B of the Finance Act, 1994,
in respect of inputs and input services received on or after the appointed day.
141. (1) Where any inputs received at a place of business had been removed as such
or removed after being partially processed to a job worker for further processing, testing,
repair, reconditioning or any other purpose in accordance with the provisions of existing law
prior to the appointed day and such inputs are returned to the said place on or after the
appointed day, no tax shall be payable if such inputs, after completion of the job work or
otherwise, are returned to the said place within six months from the appointed day:
Provided that the period of six months may, on sufficient cause being shown, be
extended by the Commissioner for a further period not exceeding two months:
Provided further that if such inputs are not returned within the period specified in this
sub-section, the input tax credit shall be liable to be recovered in accordance with the
provisions of clause (a) of sub-section (8) of section 142.
(2) Where any semi-finished goods had been removed from the place of business to
any other premises for carrying out certain manufacturing processes in accordance with
the provisions of existing law prior to the appointed day and such goods (hereafter in this
section referred to as “the said goods”) are returned to the said place on or after the
appointed day, no tax shall be payable, if the said goods, after undergoing manufacturing
processes or otherwise, are returned to the said place within six months from the appointed
day:
40 of 1978.
5 of 1986.
5 of 1986.
14 of 2001.
58 of 1957.
51 of 1975.
51 of 1975.
40 of 1978.
5 of 1986.
5 of 1986.
14 of 2001.
32 of 1994.
Transitional
provisions
relating to job
work.
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Provided that the period of six months may, on sufficient cause being shown, be
extended by the Commissioner for a further period not exceeding two months:
Provided further that if the said goods are not returned within the period specified in
this sub-section, the input tax credit shall be liable to be recovered in accordance with the
provisions of clause (a) of sub-section (8) of section 142:
Provided also that the manufacturer may, in accordance with the provisions of the
existing law, transfer the said goods to the premises of any registered person for the purpose
of supplying therefrom on payment of tax in India or without payment of tax for exports
within the period specified in this sub-section.
(3) Where any excisable goods manufactured at a place of business had been removed
without payment of duty for carrying out tests or any other process not amounting to
manufacture, to any other premises, whether registered or not, in accordance with the
provisions of existing law prior to the appointed day and such goods, are returned to the said
place on or after the appointed day, no tax shall be payable if the said goods, after undergoing
tests or any other process, are returned to the said place within six months from the appointed
day:
Provided that the period of six months may, on sufficient cause being shown, be
extended by the Commissioner for a further period not exceeding two months:
Provided further that if the said goods are not returned within the period specified in
this sub-section, the input tax credit shall be liable to be recovered in accordance with the
provisions of clause (a) of sub-section (8) of section 142:
Provided also that the manufacturer may, in accordance with the provisions of the
existing law, transfer the said goods from the said other premises on payment of tax in India
or without payment of tax for exports within the period specified in this sub-section.
(4) The tax under sub-sections (1), (2) and (3) shall not be payable, only if the
manufacturer and the job-worker declare the details of the inputs or goods held in stock by
the job-worker on behalf of the manufacturer on the appointed day in such form and manner
and within such time as may be prescribed.
142. (1) Where any goods on which duty, if any, had been paid under the existing law
at the time of removal thereof, not being earlier than six months prior to the appointed day, are
returned to any place of business on or after the appointed day, the registered person shall
be eligible for refund of the duty paid under the existing law where such goods are returned
by a person, other than a registered person, to the said place of business within a period of
six months from the appointed day and such goods are identifiable to the satisfaction of the
proper officer:
Provided that if the said goods are returned by a registered person, the return of such
goods shall be deemed to be a supply.
(2) (a) where, in pursuance of a contract entered into prior to the appointed day, the
price of any goods or services or both is revised upwards on or after the appointed day, the
registered person who had removed or provided such goods or services or both shall issue
to the recipient a supplementary invoice or debit note, containing such particulars as may be
prescribed, within thirty days of such price revision and for the purposes of this Act such
supplementary invoice or debit note shall be deemed to have been issued in respect of an
outward supply made under this Act;
(b) where, in pursuance of a contract entered into prior to the appointed day, the price
of any goods or services or both is revised downwards on or after the appointed day, the
registered person who had removed or provided such goods or services or both may issue
to the recipient a credit note, containing such particulars as may be prescribed, within thirty
days of such price revision and for the purposes of this Act such credit note shall be deemed
to have been issued in respect of an outward supply made under this Act:
Miscellaneous
transitional
provisions.
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Provided that the registered person shall be allowed to reduce his tax liability on
account of issue of the credit note only if the recipient of the credit note has reduced his
input tax credit corresponding to such reduction of tax liability.
(3) Every claim for refund filed by any person before, on or after the appointed day, for
refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under
the existing law, shall be disposed of in accordance with the provisions of existing law and
any amount eventually accruing to him shall be paid in cash, notwithstanding anything to
the contrary contained under the provisions of existing law other than the provisions of subsection
(2) of section 11B of the Central Excise Act, 1944:
Provided that where any claim for refund of CENVAT credit is fully or partially rejected,
the amount so rejected shall lapse:
Provided further that no refund shall be allowed of any amount of CENVAT credit
where the balance of the said amount as on the appointed day has been carried forward
under this Act.
(4) Every claim for refund filed after the appointed day for refund of any duty or tax
paid under existing law in respect of the goods or services exported before or after the
appointed day, shall be disposed of in accordance with the provisions of the existing law:
Provided that where any claim for refund of CENVAT credit is fully or partially rejected,
the amount so rejected shall lapse:
Provided further that no refund shall be allowed of any amount of CENVAT credit
where the balance of the said amount as on the appointed day has been carried forward
under this Act.
(5) Every claim filed by a person after the appointed day for refund of tax paid under
the existing law in respect of services not provided shall be disposed of in accordance with
the provisions of existing law and any amount eventually accruing to him shall be paid in
cash, notwithstanding anything to the contrary contained under the provisions of existing
law other than the provisions of sub-section (2) of section 11B of the Central Excise
Act, 1944.
(6) (a) every proceeding of appeal, review or reference relating to a claim for CENVAT
credit initiated whether before, on or after the appointed day under the existing law shall be
disposed of in accordance with the provisions of existing law, and any amount of credit
found to be admissible to the claimant shall be refunded to him in cash, notwithstanding
anything to the contrary contained under the provisions of existing law other than the
provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount
rejected, if any, shall not be admissible as input tax credit under this Act:
Provided that no refund shall be allowed of any amount of CENVAT credit where the
balance of the said amount as on the appointed day has been carried forward under
this Act;
(b) every proceeding of appeal, review or reference relating to recovery of CENVAT
credit initiated whether before, on or after the appointed day under the existing law shall be
disposed of in accordance with the provisions of existing law and if any amount of credit
becomes recoverable as a result of such appeal, review or reference, the same shall, unless
recovered under the existing law, be recovered as an arrear of tax under this Act and the
amount so recovered shall not be admissible as input tax credit under this Act.
(7) (a) every proceeding of appeal, review or reference relating to any output duty or
tax liability initiated whether before, on or after the appointed day under the existing law,
shall be disposed of in accordance with the provisions of the existing law, and if any
1 of 1944.
1 of 1944.
1 of 1944.
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amount becomes recoverable as a result of such appeal, review or reference, the same shall,
unless recovered under the existing law, be recovered as an arrear of duty or tax under this
Act and the amount so recovered shall not be admissible as input tax credit under this
Act.
(b) every proceeding of appeal, review or reference relating to any output duty or tax
liability initiated whether before, on or after the appointed day under the existing law, shall be
disposed of in accordance with the provisions of the existing law, and any amount found to
be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to
the contrary contained under the provisions of existing law other than the provisions of subsection
(2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall
not be admissible as input tax credit under this Act.
(8) (a) where in pursuance of an assessment or adjudication proceedings instituted,
whether before, on or after the appointed day, under the existing law, any amount of tax,
interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered
under the existing law, be recovered as an arrear of tax under this Act and the amount so
recovered shall not be admissible as input tax credit under this Act;
(b) where in pursuance of an assessment or adjudication proceedings instituted, whether
before, on or after the appointed day, under the existing law, any amount of tax, interest, fine
or penalty becomes refundable to the taxable person, the same shall be refunded to him in
cash under the said law, notwithstanding anything to the contrary contained in the said law
other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944
and the amount rejected, if any, shall not be admissible as input tax credit under this Act.
(9) (a) where any return, furnished under the existing law, is revised after the appointed
day and if, pursuant to such revision, any amount is found to be recoverable or any amount
of CENVAT credit is found to be inadmissible, the same shall, unless recovered under the
existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall
not be admissible as input tax credit under this Act;
(b) where any return, furnished under the existing law, is revised after the appointed
day but within the time limit specified for such revision under the existing law and if, pursuant
to such revision, any amount is found to be refundable or CENVAT credit is found to be
admissible to any taxable person, the same shall be refunded to him in cash under the existing
law, notwithstanding anything to the contrary contained in the said law other than the
provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount
rejected, if any, shall not be admissible as input tax credit under this Act.
(10) Save as otherwise provided in this Chapter, the goods or services or both supplied
on or after the appointed day in pursuance of a contract entered into prior to the appointed
day shall be liable to tax under the provisions of this Act.
(11) (a) notwithstanding anything contained in section 12, no tax shall be payable on
goods under this Act to the extent the tax was leviable on the said goods under the Value
Added Tax Act of the State;
(b) notwithstanding anything contained in section 13, no tax shall be payable on
services under this Act to the extent the tax was leviable on the said services under Chapter
V of the Finance Act, 1994;
(c) where tax was paid on any supply both under the Value Added Tax Act and under
Chapter V of the Finance Act, 1994, tax shall be leviable under this Act and the taxable person
shall be entitled to take credit of value added tax or service tax paid under the existing law to
the extent of supplies made after the appointed day and such credit shall be calculated in
such manner as may be prescribed.
1 of 1944.
1 of 1944.
1 of 1944.
32 of 1994.
32 of 1994.
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(12) Where any goods sent on approval basis, not earlier than six months before the
appointed day, are rejected or not approved by the buyer and returned to the seller on or after
the appointed day, no tax shall be payable thereon if such goods are returned within six
months from the appointed day:
Provided that the said period of six months may, on sufficient cause being shown, be
extended by the Commissioner for a further period not exceeding two months:
Provided further that the tax shall be payable by the person returning the goods if such
goods are liable to tax under this Act, and are returned after a period specified in this subsection:
Provided also that tax shall be payable by the person who has sent the goods on
approval basis if such goods are liable to tax under this Act, and are not returned within a
period specified in this sub-section.
(13) Where a supplier has made any sale of goods in respect of which tax was required
to be deducted at source under any law of a State or Union territory relating to Value Added
Tax and has also issued an invoice for the same before the appointed day, no deduction of tax
at source under section 51 shall be made by the deductor under the said section where
payment to the said supplier is made on or after the appointed day.
Explanation.––For the purposes of this Chapter, the expressions “capital goods”,
“Central Value Added Tax (CENVAT) credit” “first stage dealer”, “second stage dealer”, or
“manufacture” shall have the same meaning as respectively assigned to them in the
Central Excise Act, 1944 or the rules made thereunder.
CHAPTER XXI
MISCELLANEOUS
143. (1) A registered person (hereafter in this section referred to as the “principal”)
may under intimation and subject to such conditions as may be prescribed, send any inputs
or capital goods, without payment of tax, to a job worker for job-work and from there
subsequently send to another job worker and likewise, and shall,––
(a) bring back inputs, after completion of job work or otherwise, or capital goods,
other than moulds and dies, jigs and fixtures, or tools, within one year and three years,
respectively, of their being sent out, to any of his place of business, without payment
of tax;
(b) supply such inputs, after completion of job work or otherwise, or capital
goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three
years, respectively, of their being sent out from the place of business of a job worker
on payment of tax within India, or with or without payment of tax for export, as the case
may be:
Provided that the principal shall not supply the goods from the place of business
of a job worker in accordance with the provisions of this clause unless the said principal
declares the place of business of the job-worker as his additional place of business
except in a case—
(i) where the job worker is registered under section 25; or
(ii) where the principal is engaged in the supply of such goods as may be
notified by the Commissioner.
(2) The responsibility for keeping proper accounts for the inputs or capital goods shall
lie with the principal.
(3) Where the inputs sent for job work are not received back by the principal after
completion of job work or otherwise in accordance with the provisions of clause (a) of subsection
(1) or are not supplied from the place of business of the job worker in accordance
1 of 1944
Job work
procedure.
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with the provisions of clause (b) of sub-section (1) within a period of one year of their being
sent out, it shall be deemed that such inputs had been supplied by the principal to the
job-worker on the day when the said inputs were sent out.
(4) Where the capital goods, other than moulds and dies, jigs and fixtures, or tools,
sent for job work are not received back by the principal in accordance with the provisions
of clause (a) of sub-section (1) or are not supplied from the place of business of the job
worker in accordance with the provisions of clause (b) of sub-section (1) within a period of
three years of their being sent out, it shall be deemed that such capital goods had been
supplied by the principal to the job-worker on the day when the said capital goods were
sent out.
(5) Notwithstanding anything contained in sub-sections (1) and (2), any waste and
scrap generated during the job work may be supplied by the job worker directly from his
place of business on payment of tax, if such job worker is registered, or by the principal, if the
job worker is not registered.
Explanation.––For the purposes of job work, input includes intermediate goods arising
from any treatment or process carried out on the inputs by the principal or the job worker.
144. Where any document––
(i) is produced by any person under this Act or any other law for the time being
in force; or
(ii) has been seized from the custody or control of any person under this Act or
any other law for the time being in force; or
(iii) has been received from any place outside India in the course of any
proceedings under this Act or any other law for the time being in force,
and such document is tendered by the prosecution in evidence against him or any other
person who is tried jointly with him, the court shall—
(a) unless the contrary is proved by such person, presume—
(i) the truth of the contents of such document;
(ii) that the signature and every other part of such document which purports
to be in the handwriting of any particular person or which the court may
reasonably assume to have been signed by, or to be in the handwriting of, any
particular person, is in that person’s handwriting, and in the case of a document
executed or attested, that it was executed or attested by the person by whom it
purports to have been so executed or attested;
(b) admit the document in evidence notwithstanding that it is not duly stamped,
if such document is otherwise admissible in evidence.
145. (1) Notwithstanding anything contained in any other law for the time being in
force,—
(a) a micro film of a document or the reproduction of the image or images embodied
in such micro film (whether enlarged or not); or
(b) a facsimile copy of a document; or
(c) a statement contained in a document and included in a printed material
produced by a computer, subject to such conditions as may be prescribed; or
(d) any information stored electronically in any device or media, including any
hard copies made of such information,
shall be deemed to be a document for the purposes of this Act and the rules
made thereunder and shall be admissible in any proceedings thereunder, without further
Presumption
as to
documents in
certain cases.
Admissibility
of micro
films,
facsimile
copies of
documents and
computer
printouts as
documents and
as evidence.
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proof or production of the original, as evidence of any contents of the original or of any fact
stated therein of which direct evidence would be admissible.
(2) In any proceedings under this Act or the rules made thereunder, where it is desired
to give a statement in evidence by virtue of this section, a certificate,—
(a) identifying the document containing the statement and describing the manner
in which it was produced;
(b) giving such particulars of any device involved in the production of that
document as may be appropriate for the purpose of showing that the document was
produced by a computer,
shall be evidence of any matter stated in the certificate and for the purposes of this
sub-section it shall be sufficient for a matter to be stated to the best of the knowledge and
belief of the person stating it.
146. The Government may, on the recommendations of the Council, notify the Common
Goods and Services Tax Electronic Portal for facilitating registration, payment of tax, furnishing
of returns, computation and settlement of integrated tax, electronic way bill and for carrying
out such other functions and for such purposes as may be prescribed.
147. The Government may, on the recommendations of the Council, notify certain
supplies of goods as deemed exports, where goods supplied do not leave India, and payment
for such supplies is received either in Indian rupees or in convertible foreign exchange, if
such goods are manufactured in India.
148. The Government may, on the recommendations of the Council, and subject to
such conditions and safeguards as may be prescribed, notify certain classes of registered
persons, and the special procedures to be followed by such persons including those with
regard to registration, furnishing of return, payment of tax and administration of
such persons.
149. (1) Every registered person may be assigned a goods and services tax compliance
rating score by the Government based on his record of compliance with the provisions of
this Act.
(2) The goods and services tax compliance rating score may be determined on the
basis of such parameters as may be prescribed.
(3) The goods and services tax compliance rating score may be updated at periodic
intervals and intimated to the registered person and also placed in the public domain in such
manner as may be prescribed.
150. (1) Any person, being—
(a) a taxable person; or
(b) a local authority or other public body or association; or
(c) any authority of the State Government responsible for the collection of value
added tax or sales tax or State excise duty or an authority of the Central Government
responsible for the collection of excise duty or customs duty; or
(d) an income tax authority appointed under the provisions of the Income-tax
Act, 1961; or
(e) a banking company within the meaning of clause (a) of section 45A of the
Reserve Bank of India Act, 1934; or
(f) a State Electricity Board or an electricity distribution or transmission licensee
under the Electricity Act, 2003, or any other entity entrusted with such functions by
the Central Government or the State Government; or
Common
Portal.
Deemed
Exports.
Special
procedure for
certain
processes.
Goods and
services tax
compliance
rating.
43 of 1961.
2 of 1934.
36 of 2003.
Obligation to
furnish
information
return.
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(g) the Registrar or Sub-Registrar appointed under section 6 of the Registration
Act, 1908; or
(h) a Registrar within the meaning of the Companies Act, 2013; or
(i) the registering authority empowered to register motor vehicles under the
Motor Vehicles Act, 1988; or
(j) the Collector referred to in clause (c) of section 3 of the Right to Fair
Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement
Act, 2013; or
(k) the recognised stock exchange referred to in clause (f) of section 2 of the
Securities Contracts (Regulation) Act, 1956; or
(l) a depository referred to in clause (e) of sub-section (1) of section 2 of the
Depositories Act, 1996; or
(m) an officer of the Reserve Bank of India as constituted under section 3 of the
Reserve Bank of India Act, 1934; or
(n) the Goods and Services Tax Network, a company registered under the
Companies Act, 2013; or
(o) a person to whom a Unique Identity Number has been granted under
sub-section (9) of section 25; or
(p) any other person as may be specified, on the recommendations of the Council,
by the Government,
who is responsible for maintaining record of registration or statement of accounts or any
periodic return or document containing details of payment of tax and other details of transaction
of goods or services or both or transactions related to a bank account or consumption of
electricity or transaction of purchase, sale or exchange of goods or property or right or
interest in a property under any law for the time being in force, shall furnish an information
return of the same in respect of such periods, within such time, in such form and manner and
to such authority or agency as may be prescribed.
(2) Where the Commissioner, or an officer authorised by him in this behalf, considers
that the information furnished in the information return is defective, he may intimate the
defect to the person who has furnished such information return and give him an opportunity
of rectifying the defect within a period of thirty days from the date of such intimation or
within such further period which, on an application made in this behalf, the said authority
may allow and if the defect is not rectified within the said period of thirty days or, the further
period so allowed, then, notwithstanding anything contained in any other provisions of this
Act, such information return shall be treated as not furnished and the provisions of this Act
shall apply.
(3) Where a person who is required to furnish information return has not furnished the
same within the time specified in sub-section (1) or sub-section (2), the said authority may
serve upon him a notice requiring furnishing of such information return within a period not
exceeding ninety days from the date of service of the notice and such person shall furnish
the information return.
151. (1) The Commissioner may, if he considers that it is necessary so to do, by
notification, direct that statistics may be collected relating to any matter dealt with by or in
connection with this Act.
(2) Upon such notification being issued, the Commissioner, or any person authorised
by him in this behalf, may call upon the concerned persons to furnish such information or
returns, in such form and manner as may be prescribed, relating to any matter in respect of
which statistics is to be collected .
16 of 1908.
18 of 2013.
59 of 1988.
30 of 2013.
42 of 1956.
22 of 1996.
2 of 1934.
18 of 2013.
Power to
collect
statistics.
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152. (1) No information of any individual return or part thereof with respect to any
matter given for the purposes of section 150 or section 151 shall, without the previous
consent in writing of the concerned person or his authorised representative, be published in
such manner so as to enable such particulars to be identified as referring to a particular person
and no such information shall be used for the purpose of any proceedings under this Act.
(2) Except for the purposes of prosecution under this Act or any other Act for the time
being in force, no person who is not engaged in the collection of statistics under this Act or
compilation or computerisation thereof for the purposes of this Act, shall be permitted to see
or have access to any information or any individual return referred to in section 151.
(3) Nothing in this section shall apply to the publication of any information relating to
a class of taxable persons or class of transactions, if in the opinion of the Commissioner, it is
desirable in the public interest to publish such information.
153. Any officer not below the rank of Assistant Commissioner may, having regard to
the nature and complexity of the case and the interest of revenue, take assistance of any
expert at any stage of scrutiny, inquiry, investigation or any other proceedings before him.
154. The Commissioner or an officer authorised by him may take samples of goods
from the possession of any taxable person, where he considers it necessary, and provide a
receipt for any samples so taken.
155. Where any person claims that he is eligible for input tax credit under this Act, the
burden of proving such claim shall lie on such person.
156. All persons discharging functions under this Act shall be deemed to be public
servants within the meaning of section 21 of the Indian Penal Code.
157. (1) No suit, prosecution or other legal proceedings shall lie against the President,
State President, Members, officers or other employees of the Appellate Tribunal or any other
person authorised by the said Appellate Tribunal for anything which is in good faith done or
intended to be done under this Act or the rules made thereunder.
(2) No suit, prosecution or other legal proceedings shall lie against any officer appointed
or authorised under this Act for anything which is done or intended to be done in good faith
under this Act or the rules made thereunder.
158. (1) All particulars contained in any statement made, return furnished or accounts
or documents produced in accordance with this Act, or in any record of evidence given in the
course of any proceedings under this Act (other than proceedings before a criminal court), or
in any record of any proceedings under this Act shall, save as provided in sub-section (3),
not be disclosed.
(2) Notwithstanding anything contained in the Indian Evidence Act, 1872, no court
shall, save as otherwise provided in sub-section (3), require any officer appointed or authorised
under this Act to produce before it or to give evidence before it in respect of particulars
referred to in sub-section (1).
(3) Nothing contained in this section shall apply to the disclosure of,––
(a) any particulars in respect of any statement, return, accounts, documents,
evidence, affidavit or deposition, for the purpose of any prosecution under the Indian
Penal Code or the Prevention of Corruption Act, 1988, or any other law for the time
being in force; or
(b) any particulars to the Central Government or the State Government or to any
person acting in the implementation of this Act, for the purposes of carrying out the
objects of this Act; or
(c) any particulars when such disclosure is occasioned by the lawful exercise under
this Act of any process for the service of any notice or recovery of any demand; or
Bar on
disclosure of
information.
Taking
assistance
from an
expert.
Power to take
samples.
45 of 1860.
Burden of
proof.
Persons
deemed to be
public servants.
Protection of
action taken
under this Act.
Disclosure of
information
by a public
servant.
1 of 1872.
45 of 1860.
49 of 1988.
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(d) any particulars to a civil court in any suit or proceedings, to which the
Government or any authority under this Act is a party, which relates to any matter
arising out of any proceedings under this Act or under any other law for the time being
in force authorising any such authority to exercise any powers thereunder; or
(e) any particulars to any officer appointed for the purpose of audit of tax receipts
or refunds of the tax imposed by this Act; or
(f) any particulars where such particulars are relevant for the purposes of any
inquiry into the conduct of any officer appointed or authorised under this Act, to any
person or persons appointed as an inquiry officer under any law for the time being in
force; or
(g) any such particulars to an officer of the Central Government or of any State
Government, as may be necessary for the purpose of enabling that Government to levy
or realise any tax or duty; or
(h) any particulars when such disclosure is occasioned by the lawful exercise by
a public servant or any other statutory authority, of his or its powers under any law for
the time being in force; or
(i) any particulars relevant to any inquiry into a charge of misconduct in
connection with any proceedings under this Act against a practising advocate, a tax
practitioner, a practising cost accountant, a practising chartered accountant, a practising
company secretary to the authority empowered to take disciplinary action against the
members practising the profession of a legal practitioner, a cost accountant, a chartered
accountant or a company secretary, as the case may be; or
(j) any particulars to any agency appointed for the purposes of data entry on
any automated system or for the purpose of operating, upgrading or maintaining any
automated system where such agency is contractually bound not to use or disclose
such particulars except for the aforesaid purposes; or
(k) any particulars to an officer of the Government as may be necessary for the
purposes of any other law for the time being in force; or
(l) any information relating to any class of taxable persons or class of transactions
for publication, if, in the opinion of the Commissioner, it is desirable in the public
interest, to publish such information.
159. (1) If the Commissioner, or any other officer authorised by him in this behalf, is of
the opinion that it is necessary or expedient in the public interest to publish the name of any
person and any other particulars relating to any proceedings or prosecution under this Act
in respect of such person, it may cause to be published such name and particulars in such
manner as it thinks fit.
(2) No publication under this section shall be made in relation to any penalty imposed
under this Act until the time for presenting an appeal to the Appellate Authority under
section 107 has expired without an appeal having been presented or the appeal, if presented,
has been disposed of.
Explanation.––In the case of firm, company or other association of persons, the
names of the partners of the firm, directors, managing agents, secretaries and treasurers or
managers of the company, or the members of the association, as the case may be, may also be
published if, in the opinion of the Commissioner, or any other officer authorised by him in
this behalf, circumstances of the case justify it.
160. (1) No assessment, re-assessment, adjudication, review, revision, appeal,
rectification, notice, summons or other proceedings done, accepted, made, issued, initiated,
or purported to have been done, accepted, made, issued, initiated in pursuance of any of the
provisions of this Act shall be invalid or deemed to be invalid merely by reason of any
Publication of
information
in respect of
persons in
certain cases.
Assessment
proceedings,
etc., not to be
invalid on
certain
grounds.
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mistake, defect or omission therein, if such assessment, re-assessment, adjudication, review,
revision, appeal, rectification, notice, summons or other proceedings are in substance and
effect in conformity with or according to the intents, purposes and requirements of this Act
or any existing law.
(2) The service of any notice, order or communication shall not be called in question,
if the notice, order or communication, as the case may be, has already been acted upon by the
person to whom it is issued or where such service has not been called in question at or in the
earlier proceedings commenced, continued or finalised pursuant to such notice, order or
communication.
161. Without prejudice to the provisions of section 160, and notwithstanding anything
contained in any other provisions of this Act, any authority, who has passed or issued any
decision or order or notice or certificate or any other document, may rectify any error which
is apparent on the face of record in such decision or order or notice or certificate or any other
document, either on its own motion or where such error is brought to its notice by any officer
appointed under this Act or an officer appointed under the State Goods and Services Tax Act
or an officer appointed under the Union Territory Goods and Services Tax Act or by the
affected person within a period of three months from the date of issue of such decision or
order or notice or certificate or any other document, as the case may be:
Provided that no such rectification shall be done after a period of six months from the
date of issue of such decision or order or notice or certificate or any other document:
Provided further that the said period of six months shall not apply in such cases where
the rectification is purely in the nature of correction of a clerical or arithmetical error, arising
from any accidental slip or omission:
Provided also that where such rectification adversely affects any person, the principles
of natural justice shall be followed by the authority carrying out such rectification.
162. Save as provided in sections 117 and 118, no civil court shall have jurisdiction to
deal with or decide any question arising from or relating to anything done or purported to be
done under this Act.
163. Wherever a copy of any order or document is to be provided to any person on an
application made by him for that purpose, there shall be paid such fee as may be prescribed.
164. (1) The Government may, on the recommendations of the Council, by notification,
make rules for carrying out the provisions of this Act.
(2) Without prejudice to the generality of the provisions of sub-section (1), the
Government may make rules for all or any of the matters which by this Act are required to be,
or may be, prescribed or in respect of which provisions are to be or may be made by rules.
(3) The power to make rules conferred by this section shall include the power to give
retrospective effect to the rules or any of them from a date not earlier than the date on which
the provisions of this Act come into force.
(4) Any rules made under sub-section (1) or sub-section (2) may provide that a
contravention thereof shall be liable to a penalty not exceeding ten thousand rupees.
165. The Board may, by notification, make regulations consistent with this Act and the
rules made thereunder to carry out the provisions of this Act.
166. Every rule made by the Government, every regulation made by the Board and
every notification issued by the Government under this Act, shall be laid, as soon as may be
after it is made or issued, before each House of Parliament, while it is in session, for a total
period of thirty days which may be comprised in one session or in two or more successive
sessions, and if, before the expiry of the session immediately following the session or the
Rectification
of errors
apparent on
the face of
record.
Bar on
jurisdiction of
civil courts.
Levy of fee.
Power of
Government to
make rules.
Power to make
regulations.
Laying of
rules,
regulations
and
notifications.
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successive sessions aforesaid, both Houses agree in making any modification in the rule or
regulation or in the notification, as the case may be, or both Houses agree that the rule or
regulation or the notification should not be made, the rule or regulation or notification, as the
case may be, shall thereafter have effect only in such modified form or be of no effect, as the
case may be; so, however, that any such modification or annulment shall be without prejudice
to the validity of anything previously done under that rule or regulation or notification, as
the case may be.
167. The Commissioner may, by notification, direct that subject to such conditions, if
any, as may be specified in the notification, any power exercisable by any authority or officer
under this Act may be exercisable also by another authority or officer as may be specified in
such notification.
168. (1) The Board may, if it considers it necessary or expedient so to do for the
purpose of uniformity in the implementation of this Act, issue such orders, instructions or
directions to the central tax officers as it may deem fit, and thereupon all such officers and all
other persons employed in the implementation of this Act shall observe and follow such
orders, instructions or directions.
(2) The Commissioner specified in clause (91) of section 2, sub-section (3) of
section 5, clause (b) of sub-section (9) of section 25, sub-sections (3) and (4) of section
35, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of section
39, sub-section (5) of section 66, sub-section (1) of section 143, sub-section (1) of
section 151, clause (l) of sub-section (3) of section 158 and section 167 shall mean a
Commissioner or Joint Secretary posted in the Board and such Commissioner or Joint
Secretary shall exercise the powers specified in the said sections with the approval of
the Board.
169. (1) Any decision, order, summons, notice or other communication under this
Act or the rules made thereunder shall be served by any one of the following methods,
namely:—
(a) by giving or tendering it directly or by a messenger including a courier to
the addressee or the taxable person or to his manager or authorised representative or
an advocate or a tax practitioner holding authority to appear in the proceedings on
behalf of the taxable person or to a person regularly employed by him in connection
with the business, or to any adult member of family residing with the taxable person;
or
(b) by registered post or speed post or courier with acknowledgement due, to
the person for whom it is intended or his authorised representative, if any, at his last
known place of business or residence; or
(c) by sending a communication to his e-mail address provided at the time of
registration or as amended from time to time; or
(d) by making it available on the common portal; or
(e) by publication in a newspaper circulating in the locality in which the taxable
person or the person to whom it is issued is last known to have resided, carried on
business or personally worked for gain; or
(f) if none of the modes aforesaid is practicable, by affixing it in some conspicuous
place at his last known place of business or residence and if such mode is not practicable
for any reason, then by affixing a copy thereof on the notice board of the office of the
concerned officer or authority who or which passed such decision or order or issued
such summons or notice.
(2) Every decision, order, summons, notice or any communication shall be deemed to
have been served on the date on which it is tendered or published or a copy thereof is affixed
in the manner provided in sub-section (1).
Delegation of
powers.
Power to issue
instructions or
directions.
Service of
notice in
certain
circumstances.
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(3) When such decision, order, summons, notice or any communication is sent by
registered post or speed post, it shall be deemed to have been received by the addressee at
the expiry of the period normally taken by such post in transit unless the contrary is proved.
170. The amount of tax, interest, penalty, fine or any other sum payable, and the
amount of refund or any other sum due, under the provisions of this Act shall be rounded off
to the nearest rupee and, for this purpose, where such amount contains a part of a rupee
consisting of paise, then, if such part is fifty paise or more, it shall be increased to one rupee
and if such part is less than fifty paise it shall be ignored.
171. (1) Any reduction in rate of tax on any supply of goods or services or the benefit
of input tax credit shall be passed on to the recipient by way of commensurate reduction in
prices.
(2) The Central Government may, on recommendations of the Council, by notification,
constitute an Authority, or empower an existing Authority constituted under any law for the
time being in force, to examine whether input tax credits availed by any registered person or
the reduction in the tax rate have actually resulted in a commensurate reduction in the price
of the goods or services or both supplied by him.
(3) The Authority referred to in sub-section (2) shall exercise such powers and discharge
such functions as may be prescribed.
172. (1) If any difficulty arises in giving effect to any provisions of this Act, the
Government may, on the recommendations of the Council, by a general or a special order
published in the Official Gazette, make such provisions not inconsistent with the provisions
of this Act or the rules or regulations made thereunder, as may be necessary or expedient for
the purpose of removing the said difficulty:
Provided that no such order shall be made after the expiry of a period of three years
from the date of commencement of this Act.
(2) Every order made under this section shall be laid, as soon as may be, after it is made,
before each House of Parliament.
173. Save as otherwise provided in this Act, Chapter V of the Finance Act, 1994 shall
be omitted.
174. (1) Save as otherwise provided in this Act, on and from the date of commencement
of this Act, the Central Excise Act, 1944 (except as respects goods included in entry 84 of
the Union List of the Seventh Schedule to the Constitution), the Medicinal and Toilet
Preparations (Excise Duties) Act, 1955, the Additional Duties of Excise (Goods of Special
Importance) Act, 1957, the Additional Duties of Excise (Textiles and Textile Articles) Act,
1978, and the Central Excise Tariff Act, 1985 (hereafter referred to as the repealed Acts) are
hereby repealed.
(2) The repeal of the said Acts and the amendment of the Finance Act, 1994 (hereafter
referred to as “such amendment” or “amended Act”, as the case may be) to the extent
mentioned in the sub-section (1) or section 173 shall not—
(a) revive anything not in force or existing at the time of such amendment or
repeal; or
(b) affect the previous operation of the amended Act or repealed Acts and orders
or anything duly done or suffered thereunder; or
(c) affect any right, privilege, obligation, or liability acquired, accrued or incurred
under the amended Act or repealed Acts or orders under such repealed or amended
Acts:
Rounding off
of tax, etc.
Antiprofiteering
measure.
Removal of
difficulties.
Amendment
of Act 32 of
1994.
1 of 1944.
16 of 1955.
58 of 1957.
40 of 1978.
5 of 1986.
Repeal and
saving.
32 of 1944.
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Provided that any tax exemption granted as an incentive against investment
through a notification shall not continue as privilege if the said notification is rescinded
on or after the appointed day; or
(d) affect any duty, tax, surcharge, fine, penalty, interest as are due or may
become due or any forfeiture or punishment incurred or inflicted in respect of any
offence or violation committed against the provisions of the amended Act or repealed
Acts; or
(e) affect any investigation, inquiry, verification (including scrutiny and audit),
assessment proceedings, adjudication and any other legal proceedings or recovery of
arrears or remedy in respect of any such duty, tax, surcharge, penalty, fine, interest,
right, privilege, obligation, liability, forfeiture or punishment, as aforesaid, and any
such investigation, inquiry, verification (including scrutiny and audit), assessment
proceedings, adjudication and other legal proceedings or recovery of arrears or remedy
may be instituted, continued or enforced, and any such tax, surcharge, penalty, fine,
interest, forfeiture or punishment may be levied or imposed as if these Acts had not
been so amended or repealed;
(f) affect any proceedings including that relating to an appeal, review or reference,
instituted before on, or after the appointed day under the said amended Act or repealed
Acts and such proceedings shall be continued under the said amended Act or repealed
Acts as if this Act had not come into force and the said Acts had not been amended or
repealed.
(3) The mention of the particular matters referred to in sub-sections (1) and (2) shall
not be held to prejudice or affect the general application of section 6 of the General Clauses
10 of 1897. Act, 1897 with regard to the effect of repeal.
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SCHEDULE I
[Section 7]
ACTIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE WITHOUT CONSIDERATION
1. Permanent transfer or disposal of business assets where input tax credit has been
availed on such assets.
2. Supply of goods or services or both between related persons or between distinct
persons as specified in section 25, when made in the course or furtherance of business:
Provided that gifts not exceeding fifty thousand rupees in value in a financial year by
an employer to an employee shall not be treated as supply of goods or services or both.
3. Supply of goods—
(a) by a principal to his agent where the agent undertakes to supply such goods
on behalf of the principal; or
(b) by an agent to his principal where the agent undertakes to receive such
goods on behalf of the principal.
4. Import of services by a taxable person from a related person or from any of his other
establishments outside India, in the course or furtherance of business.
100
SCHEDULE II
[Section 7]
ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR SUPPLY OF SERVICES
1. Transfer
(a) any transfer of the title in goods is a supply of goods;
(b) any transfer of right in goods or of undivided share in goods without the
transfer of title thereof, is a supply of services;
(c) any transfer of title in goods under an agreement which stipulates that property
in goods shall pass at a future date upon payment of full consideration as agreed, is a
supply of goods.
2. Land and Building
(a) any lease, tenancy, easement, licence to occupy land is a supply of services;
(b) any lease or letting out of the building including a commercial, industrial or
residential complex for business or commerce, either wholly or partly, is a supply of
services.
3. Treatment or process
Any treatment or process which is applied to another person’s goods is a supply of services.
4. Transfer of business assets
(a) where goods forming part of the assets of a business are transferred or
disposed of by or under the directions of the person carrying on the business so as no
longer to form part of those assets, whether or not for a consideration, such transfer or
disposal is a supply of goods by the person;
(b) where, by or under the direction of a person carrying on a business, goods
held or used for the purposes of the business are put to any private use or are used, or
made available to any person for use, for any purpose other than a purpose of the
business, whether or not for a consideration, the usage or making available of such
goods is a supply of services;
(c) where any person ceases to be a taxable person, any goods forming part of
the assets of any business carried on by him shall be deemed to be supplied by him in
the course or furtherance of his business immediately before he ceases to be a taxable
person, unless—
(i) the business is transferred as a going concern to another person; or
(ii) the business is carried on by a personal representative who is deemed
to be a taxable person.
5. Supply of services
The following shall be treated as supply of service, namely:—
(a) renting of immovable property;
(b) construction of a complex, building, civil structure or a part thereof,
including a complex or building intended for sale to a buyer, wholly or partly,
except where the entire consideration has been received after issuance of completion
certificate, where required, by the competent authority or after its first occupation,
whichever is earlier.
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Explanation.—For the purposes of this clause—
(1) the expression “competent authority” means the Government or any
authority authorised to issue completion certificate under any law for the time
being in force and in case of non-requirement of such certificate from such
authority, from any of the following, namely:—
(i) an architect registered with the Council of Architecture constituted
under the Architects Act, 1972; or
(ii) a chartered engineer registered with the Institution of Engineers
(India); or
(iii) a licensed surveyor of the respective local body of the city or
town or village or development or planning authority;
(2) the expression “construction” includes additions, alterations,
replacements or remodelling of any existing civil structure;
(c) temporary transfer or permitting the use or enjoyment of any intellectual
property right;
(d) development, design, programming, customisation, adaptation, upgradation,
enhancement, implementation of information technology software;
(e) agreeing to the obligation to refrain from an act, or to tolerate an act or a
situation, or to do an act; and
(f) transfer of the right to use any goods for any purpose (whether or not for a
specified period) for cash, deferred payment or other valuable consideration.
6. Composite supply
The following composite supplies shall be treated as a supply of services, namely:—
(a) works contract as defined in clause (119) of section 2; and
(b) supply, by way of or as part of any service or in any other manner whatsoever,
of goods, being food or any other article for human consumption or any drink (other
than alcoholic liquor for human consumption), where such supply or service is for
cash, deferred payment or other valuable consideration.
7. Supply of Goods
The following shall be treated as supply of goods, namely:—
Supply of goods by any unincorporated association or body of persons to a member
thereof for cash, deferred payment or other valuable consideration.
20 of 1972.
SCHEDULE III
[Section 7]
ACTIVITIES OR TRANSACTIONS WHICH SHALL BE TREATED NEITHER AS A SUPPLY OF GOODS
NOR A SUPPLY OF SERVICES
1. Services by an employee to the employer in the course of or in relation to his
employment.
2. Services by any court or Tribunal established under any law for the time being in
force.
3. (a) the functions performed by the Members of Parliament, Members of State
Legislature, Members of Panchayats, Members of Municipalities and Members of other
local authorities;
(b) the duties performed by any person who holds any post in pursuance of the
provisions of the Constitution in that capacity; or
(c) the duties performed by any person as a Chairperson or a Member or a
Director in a body established by the Central Government or a State Government or
local authority and who is not deemed as an employee before the commencement of
this clause.
4. Services of funeral, burial, crematorium or mortuary including transportation of the
deceased.
5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule II, sale of building.
6. Actionable claims, other than lottery, betting and gambling.
Explanation.—For the purposes of paragraph 2, the term “court” includes District
Court, High Court and Supreme Court.
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STATEMENT OF OBJECTS AND REASONS
Presently, the Central Government levies tax on, manufacture of certain goods in
the form of Central Excise duty, provision of certain services in the form of service tax,
inter-State sale of goods in the form of Central Sales tax. Similarly, the State Governments
levy tax on and on retail sales in the form of value added tax, entry of goods in the State
in the form of entry tax, luxury tax and purchase tax, etc. Accordingly, there is multiplicity
of taxes which are being levied on the same supply chain.
2. The present tax system on goods and services is facing certain difficulties as
under—
(i) there is cascading of taxes as taxes levied by the Central Government are
not available as set off against the taxes being levied by the State Governments;
(ii) certain taxes levied by State Governments are not allowed as set off for
payment of other taxes being levied by them;
(iii) the variety of Value Added Tax Laws in the country with disparate tax
rates and dissimilar tax practices divides the country into separate economic
spheres; and
(iv) the creation of tariff and non-tariff barriers such as octroi, entry tax,
check posts, etc., hinder the free flow of trade throughout the country. Besides
that, the large number of taxes create high compliance cost for the taxpayers in
the form of number of returns, payments, etc.
3. In view of the aforesaid difficulties, all the above mentioned taxes are proposed
to be subsumed in a single tax called the goods and services tax which will be levied on
supply of goods or services or both at each stage of supply chain starting from
manufacture or import and till the last retail level. So, any tax that is presently being
levied by the Central Government or the State Governments on the supply of goods or
services is going to be converged in goods and services tax which is proposed to be a
dual levy where the Central Government will levy and collect tax in the form of central
goods and services tax and the State Government will levy and collect tax in the form of
state goods and services tax on intra-State supply of goods or services or both.
4. In view of the above, it has become necessary to have a Central legislation,
namely the Central Goods and Services Tax Bill, 2017. The proposed legislation will
confer power upon the Central Government for levying goods and services tax on the
supply of goods or services or both which takes place within a State. The proposed
legislation will simplify and harmonise the indirect tax regime in the country. It is
expected to reduce cost of production and inflation in the economy, thereby making the
Indian trade and industry more competitive, domestically as well as internationally.
Due to the seamless transfer of input tax credit from one stage to another in the chain of
value addition, there is an in-built mechanism in the design of goods and services tax
that would incentivise tax compliance by taxpayers. The proposed goods and services
tax will broaden the tax base, and result in better tax compliance due to a robust
information technology infrastructure.
5. The Central Goods and Services Tax Bill, 2017, inter alia, provides for the
following, namely:—
(a) to levy tax on all intra-State supplies of goods or services or both except
supply of alcoholic liquor for human consumption at a rate to be notified, not
exceeding twenty per cent. as recommended by the Goods and Services Tax Council
(the Council);
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(b) to broad base the input tax credit by making it available in respect of
taxes paid on any supply of goods or services or both used or intended to be
used in the course or furtherance of business;
(c) to impose obligation on electronic commerce operators to collect tax at
source, at such rate not exceeding one per cent. of net value of taxable supplies,
out of payments to suppliers supplying goods or services through their portals;
(d) to provide for self-assessment of the taxes payable by the registered
person;
(e) to provide for conduct of audit of registered persons in order to verify
compliance with the provisions of the Act;
(f) to provide for recovery of arrears of tax using various modes including
detaining and sale of goods, movable and immovable property of defaulting taxable
person;
(g) to provide for powers of inspection, search, seizure and arrest to the
officers;
(h) to establish the Goods and Services Tax Appellate Tribunal by the Central
Government for hearing appeals against the orders passed by the Appellate
Authority or the Revisional Authority;
(i) to make provision for penalties for contravention of the provisions of the
proposed Legislation;
(j) to provide for an anti-profiteering clause in order to ensure that business
passes on the benefit of reduced tax incidence on goods or services or both to the
consumers; and
(k) to provide for elaborate transitional provisions for smooth transition of
existing taxpayers to goods and services tax regime.
6. The Notes on clauses explain in detail the various provisions contained in the
Central Goods and Services Tax Bill, 2017.
7. The Bill seeks to achieve the above objectives.
NEW DELHI; ARUN JAITLEY.
The 23rd March, 2017.
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Notes on clauses
Clause 1 provides for short title, extent and commencement of the proposed Act.
Clause 2 defines various terms and expressions used in the proposed Act.
Clause 3 provides for appointment of Commissioners and other class of officers
as may be required for carrying out the purposes of the proposed Act. This clause also
provides that the officers under the Central Excise Act, 1944 shall be deemed to be the
officers appointed under the proposed Act.
Clause 4 provides for appointment of officers in addition to the officers appointed
under clause 3 of the proposed legislation.
Clause 5 provides for powers to officers to discharge functions under the proposed
Act.
Clause 6 provides for authorisation of State tax and Union territory tax officers,
subject to such conditions as shall be notified by the Central Government on
recommendations of the Council, to be proper officers for the purposes of the proposed
Act.
Clause 7 provides the scope of supply. This clause provides for activities to be
treated as supply. This clause further provides that certain activities, specified in
Schedule I of the proposed Act, even made or agreed to be made without a consideration
shall be treated as supply. This clause also provides activities which are neither supply
of goods nor supply of services.
Clause 8 provides for the tax liability on a composite or a mixed supply.
Clause 9 provides for levy and collection of central tax on all intra-State supplies
of goods or services or both except on the supply of alcoholic liquor for human
consumption, on the value determined under clause 15 at a rate not exceeding forty per
cent. This clause further provides that—
(i) central tax on the supply of petroleum crude, high speed diesel, motor
spirit (commonly known as petrol), natural gas and aviation turbine fuel to be
levied with effect from a date notified by the Central Government on the
recommendations of the Council;
(ii) the Central Government to notify categories of supply of goods or
services or both, the tax on which shall be paid on reverse charge basis by the
recipient of such goods or services or both, on the recommendations of the
Council;
(iii) the central tax in respect of the supply of taxable goods or services or
both by a supplier, who is not registered, to a registered person shall be paid by
such person on reverse charge basis;
(iv) the Central Government may notify categories of services, the tax on
intra-State supplies of which shall be paid by the electronic commerce operator if
such services are supplied through it, on the recommendations of the Council.
Clause 10 provides for composition levy. It is an alternative method of levy of tax
designed for small taxpayers whose turnover is upto prescribed limit. This clause also
provides that certain categories of supplies or suppliers cannot opt for composition
levy. A person opting to pay under this clause can neither take credit of taxes paid on
inputs nor it can collect any tax from the recipient.
Clause 11 confers powers on the Central Government to exempt either absolutely
or conditionally goods or services or both of any specified description from the whole
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or part of the central tax, on the recommendations of the Council. It also confers powers
on the Central Government to exempt from payment of tax any goods or services or
both, by special order, on the recommendations of the Council.
Clause 12 provides for time of supply of goods. This clause extensively elaborates
time of supply in normal situations, in reverse charge situations, in situations of supply
of voucher and remainder situations.
Clause 13 provides for time of supply of services. This clause extensively
elaborates time of supply in normal situations, in reverse charge situations, in situations
of supply of voucher and remainder situations.
Clause 14 provides for time of supply of goods or services or both where rate of
tax changes.
Clause 15 provides for value of taxable supply. This clause provides that the
value of a supply of goods or services or both shall be the transaction value, which is
the price actually paid or payable given the conditions that the supplier and the recipient
of the supply are not related and the price is the sole consideration for the supply. This
clause enumerates the items which are to be included in the value and the items which
are not to be included in the value for the purpose of calculation of tax. This clause also
provides power to make rules of valuation in certain situations.
Clause 16 provides for eligibility, conditions and time period for taking input tax
credit. This clause provides that a registered person is entitled to take credit of input
tax charged on any supply of goods or services or both to him which are used or
intended to be used in the course or furtherance of his business.
Clause 17 provides for apportionment of input tax credit and blocked input tax
credit. This clause provides for the extent of apportionment of credit where the goods
or services or both are used partly for the purpose of any business and partly for other
purposes or where the goods or services or both are used by the registered person
partly for effecting taxable supplies including zero-rated supplies. This clause further
provides for a specific mechanism of taking of input tax credit by a banking company or
a financial institution including a non-banking financial company engaged in supplying
services by way of accepting deposits, extending loans or advances. This clause also
provides the list of supplies on which input tax credit cannot be availed of.
Clause 18 provides for availability of credit in special circumstances like new
registration, shifting from composition levy to normal levy, exempted supplies becoming
taxable and vice versa.
Clause 19 provides for special provision for taking input tax credit by a person
(called “principal”) who has sent inputs or capital goods for job work subject to
prescribed conditions.
Clause 20 provides for an “Input Service Distributor” who shall distribute the
credit of input tax in prescribed manner and subject to specified conditions.
Clause 21 provides for manner of recovery of excess input tax credit distributed
by the Input Service Distributor along with interest thereon.
Clause 22 seeks to create liability for registration on every supplier in the State or
Union territory from where he makes a taxable supply of goods or services or both, if
his aggregate turnover in a financial year exceeds prescribed amount. This clause creates
liability for registration under the proposed Act with effect from the appointed day on
every person who is registered under an existing law.
Clause 23 provides that certain categories of persons are not liable for registration.
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Clause 24 provides for compulsory registration of certain suppliers
notwithstanding that their aggregate turnover is below the exempted threshold provided
in clause 22.
Clause 25 provides for procedure of registration. This clause provides that every
person who is liable to be registered shall apply for registration in every such State or
Union territory in which he is so liable within thirty days from the date on which he
becomes liable to registration. This clause further provides that a casual taxable person
or a non-resident taxable person shall apply for registration at least five days prior to
the commencement of business. This clause also provides that every person who makes
a supply from the territorial waters of India shall obtain registration in the coastal State
or Union territory where the nearest point of the appropriate base line is located. This
clause also provides for voluntary registration. This clause also provides that certain
organisations would be issued Unique Identity Number mainly for the purpose of refund
of taxes paid on inward supplies.
Clause 26 provides for deemed registration or rejection of application for
registration under the proposed Act where registration number or Unique Identity
Number has been issued or rejected under States Goods and Services Tax Act.
Clause 27 provides for special provisions for a casual taxable person and a nonresident
taxable person.
Clause 28 provides for amendment of registration. This clause also provides for
deemed approval or rejection of amendment where any approval or rejection of
amendments has been done under the State Goods and Services Tax Act or the Union
Territory Goods and Services Tax Act.
Clause 29 provides that the proper officer may, either on his own motion or on an
application filed by the registered person or by his legal heirs, in case of death of such
person, cancel the registration under certain specified circumstances. This clause further
provides that cancellation of registration under the State Goods and Services Tax Act
or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed
to be a cancellation of registration under the proposed Act.
Clause 30 provides for revocation of cancellation of registration where the
registration had been cancelled by the proper officer on his own motion. This clause
further provides that the revocation of cancellation of registration under the State
Goods and Services Tax Act or the Union Territory Goods and Services Tax Act, as the
case may be, shall be deemed to be a revocation of cancellation of registration under
the proposed Act.
Clause 31 provides for issuance of tax invoice within the prescribed period
showing the prescribed particulars. This clause also empowers the Government to
specify services, for which any other document issued in lieu of tax invoice, shall be
deemed to be tax invoice and also specify services where no tax invoice is required to
be issued. This clause provides for issue of documents other than tax invoice in certain
cases.
Clause 32 prohibits an unregistered person to collect tax. This clause also provides
that a registered person shall collect tax in accordance with the provisions of the
proposed Act.
Clause 33 provides that where any supply is made for a consideration, every
person who is liable to pay tax for such supply shall prominently indicate the amount of
tax forming part of the price in all documents relating to assessment, tax invoice and
other like documents.
Clause 34 provides for issuance of a credit notes and debit notes in specified
situations. This clause also provides for maximum time and return in which details of
credit note and debit note are required to be declared.
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Clause 35 provides that every registered person shall keep and maintain at his
principal place of business records showing true account of specified particulars. This
clause casts responsibility on owner or operator of warehouse or godown or any other
place used for storage of goods and on every transporter to maintain specified records.
This clause empowers the Commissioner to notify a class of taxable persons to maintain
additional accounts or documents for specified purpose or to maintain accounts in
other prescribed manner. This clause provides that every registered person whose
turnover during a financial year exceeds the prescribed limit shall get his accounts
audited by a chartered accountant or a cost accountant.
Clause 36 requires every registered person to retain books of account or other
records until the expiry of seventy two months from the due date of furnishing of
annual return for the year pertaining to such accounts and records.
Clause 37 provides for manner and time of furnishing of the details of outward
supplies by a registered person, other than certain specified categories of registered
persons, and manner and time of communication of these details to the corresponding
recipients.This clause further provides for manner and time of acceptance or rejection
of the details communicated from the recipients. This clause also provides for manner
of and time period for rectification of error or omission and payment of tax and interest,
if any, as a consequence of the unmatched details of outward supplies with inward
supplies of the recipient.
Clause 38 provides for manner and time of furnishing of the details of inward
supplies by a registered person, other than certain specified categories of registered
persons, including verification, validation, modification or deletion of details of outward
supplies furnished by the corresponding suppliers. This clause further provides for
manner and time of communication of the details of supplies, as modified or accepted
by the recipient, to the corresponding supplier. This clause also provides for manner
and time period for rectification of error or omission and payment of tax and interest, if
any, as a consequence to the unmatched details.
Clause 39 provides for manner, conditions and time of furnishing of returns by
different categories of registered persons. This clause further provides that the tax is
required to be paid by the due date of filing of return. This clause also provides for the
time limit upto which rectification of any omission or incorrect particulars in the return
can be carried out.
Clause 40 provides that every registered person who has made outward supplies
in the period between the date on which he became liable to registration till the date on
which registration has been granted shall declare the same in the first return furnished
by him after grant of registration.
Clause 41 provides that every registered person shall be entitled to provisionally
take the credit of eligible input tax subject to prescribed conditions and restrictions.
This clause further provides that the credit taken on provisional basis shall be utilised
only for payment of output tax self-assessed in the return in which the credit on
provisional basis is taken.
Clause 42 provides for matching, in prescribed time and manner, of details of
inward supplies furnished by a recipient for a tax period with the corresponding details.
This clause also provides for the consequences of mis-match.
Clause 43 provides for matching, in prescribed time and manner, of details of
every credit note relating to outward supply furnished by a supplier for a tax period
with the corresponding details. This clause also provides for the consequences of mismatch.
Clause 44 provides that every registered person, other than certain specified
category of persons, shall furnish an annual return along with a copy of the audited
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annual accounts, a reconciliation statement and such other particulars as may be
prescribed.
Clause 45 provides that every registered person whose registration has been
cancelled shall furnish a final return within prescribed period.
Clause 46 provides for issuance of notice to registered person who has failed to
furnish a return.
Clause 47 provides for levy of fee for delayed filing of return.
Clause 48 provides for the manner of approval of goods and services tax
practitioner, their eligibility conditions, duties and obligations, manner of removal. This
clause also provides that a registered person may authorise a practitioner for filing of
various returns, but all the responsibilities under the proposed Act lie with the registered
person.
Clause 49 provides for payment of tax, interest, penalty and other amounts. This
clause further provides for maintenance of electronic cash ledger. This clause provides
that the input tax credit as self-assessed in the return of a registered person shall be
credited to his electronic credit ledger. This clause also provides for the manner in
which the amount in the electronic cash ledger or electronic credit ledger can be used.
This clause also provides for the ordering of the utilisation of input tax credit for
payment of tax, and provides restriction on certain cross-utilisation. This clause also
requires a person to discharge his liabilities in a given order.
Clause 50 provides for interest on delayed payment of tax. This clause fixes the
ceiling of interest rate in normal and other specified situations.
Clause 51 provides for deduction of tax at source by Government departments,
local authorities, government agencies and other notified persons, at the rate of one
per cent. from the payment made or credited to the supplier in specified situations. This
clause elaborates on date of deduction, date of payment of the deducted amount to the
credit of Government and filing of prescribed statements.
Clause 52 provides for collection of tax at source by an electronic commerce
operator, at a notified rate where the consideration for supplies is to be collected by the
operator. This clause elaborates on date of collection, date of payment of the amount to
the credit of Government and filing of prescribed statements.
Clause 53 provides that on utilisation of input tax credit availed under the proposed
Act for payment of tax dues under the Integrated Goods and Services Tax Act, the
amount collected as central tax shall stand reduced by an amount equal to such credit
so utilised and the Central Government shall transfer an amount equal to the amount so
reduced from the central tax account to the integrated tax account in prescribed manner
and time.
Clause 54 provides that refund of excess tax and interest or any other amount
paid can be claimed before the expiry of two years from the relevant date. This clause
further provides that in case of zero-rated supplies and inverted tax structure, refund of
unutilised input tax credit can be claimed. This clause also provides for the time limit
within which the refund application has to be decided. This clause also provides that
in case of zero-rated supplies advance refund of ninety per cent. can be granted. This
clause provides that a person claiming refund has to prove that he is not enriching
himself unjustly by passing on the incidence of tax. If the incidence of tax has been
passed by the applicant to some other person then the tax or other amount which is
otherwise refundable shall be credited to a Fund called the Consumer Welfare Fund.
Clause 55 provides for refund of taxes paid on the notified supplies of goods or
services or both received by specified person or class of persons.
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Clause 56 provides for payment of interest on delayed payment of refund. It fixes
the ceiling of interest rate in normal and other specified situations.
Clause 57 provides that tax and other amounts which are otherwise refundable
barring unjust enrichment shall be credited to a Consumer Welfare Fund.
Clause 58 provides that the money in the Consumer Welfare Fund would be used
for the welfare of the consumers. This clause also provides that the Government or the
authority specified by it shall maintain proper and separate account of the Fund and
prepare an annual statement of accounts.
Clause 59 provides for self-assessment by every registered person.
Clause 60 provides for provisional assessment on request by a taxable person in
specified situations. This clause provides for the manner of paying tax and also the
manner and time limits for finalising of provisional assessment.
Clause 61 provides for scrutiny of returns and other particulars and manner of
sorting out the discrepancies in the returns and also taking corrective measures for
realisation of short-payment.
Clause 62 provides procedure of assessment of persons who have not filed returns
by the due dates. This clause provides that the proper officer may proceed to assess
the tax liability of the non-filer to the best of his judgment.
Clause 63 provides procedure of assessment of persons who are not registered
though they are liable to get registered. This clause provides that the proper officer
may proceed to assess the tax liability of the unregistered person to the best of his
judgment.
Clause 64 provides for summary assessment in special circumstances with the
permission of Additional Commissioner or Joint Commissioner.
Clause 65 provides detailed procedure for conduct of audit of records, maintained
by a registered person, to verify the correctness of tax liability and tax payment.
Clause 66 provides for audit of a registered person, under certain circumstances,
by a chartered accountant or a cost accountant.
Clause 67 provides for power and provides for the detailed procedure for carrying
out search, seizure and inspection to unearth non-compliance of provisions of the
proposed Act. This power can be exercised by an officer not below the rank of Joint
Commissioner or by an officer authorised by Joint Commissioner.
Clause 68 provides for inspection of goods in movement. This clause provides
that the Government may require the person-in-charge of a conveyance carrying any
consignment of goods of value exceeding specified amount to carry with him prescribed
documents and devices.
Clause 69 provides for power to arrest a person who has committed certain
specified offence.
Clause 70 provides for power to summon any person whose attendance is
considered necessary in any inquiry.
Clause 71 provides that any authorised officer shall have access to any place of
business of a registered person for the purposes of carrying out any audit, scrutiny,
verification and checks as may be necessary to safeguard the interest of revenue.
Clause 72 provides for officers of Police, Railways, Customs and other officers
engaged in collection of land revenue to assist officers involved in implementation of
the proposed Act.
Clause 73 provides for determination of tax not paid or short paid or erroneously
refunded or input tax credit wrongly availed or utilised for any reason other than fraud
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or any wilful misstatement or suppression of facts. This clause further provides that the
adjudication order will be issued within three years from the due date of filing of annual
return for the year to which the discrepancy is noticed. This clause also provides that
the show cause notice is required to be issued at least three months prior to the time
limit. It has also been provided that SCN need not be issued if tax along with interest is
paid before issue of such notice. This clause also provides that where any person
chargeable with tax pays the tax along with interest within thirty days of issue of show
cause notice, no penalty shall be payable and all proceedings in respect of the notice
shall be deemed to be concluded.
Clause 74 provides that in cases of tax not paid or short paid or erroneously
refunded or input tax credit wrongly availed or utilised, for reasons of fraud or wilful
misstatement or suppression of facts, the adjudication order will be issued within five
years from the due date of filing of annual return for the year to which the discrepancy
is noticed. Further, the show cause notice is required to be issued at least six months
prior to the time limit. This clause also provides that such notice need not be issued if
tax along with interest and penalty equal to fifteen per cent. of tax is paid before issue
of such notice. This clause also provides that where any person chargeable with tax
pays the tax along with interest and penalty equal to twenty five per cent. of tax within
thirty days of issue of show cause notice, all proceedings in respect of the notice shall
be deemed to be concluded. This clause also provides that where any person chargeable
with tax pays the tax along with interest and penalty equal to fifty per cent. of tax within
thirty days of communication of order, all proceedings in respect of the notice shall be
deemed to be concluded.
Clause 75 provides for general provisions for determination of tax. This clause
provides that the period of stay, if any, would be excluded while calculating the time
period for issuance of show cause notice or passing of order. This clause further provides
that the time period during which appeal is pending in any appellate fora would be
excluded while calculating the time period for issuance of such notice or passing of
order. This clause also provides that no such notice needs to be issued for recovery of
unpaid self-assessed tax as per return and interest thereon. This clause also provides
that the adjudication proceedings shall be deemed to be concluded, if the order is not
issued within the statutory time limit.
Clause 76 provides that any amount collected as tax, along with interest, from
customers shall be paid to account of the Government regardless of whether the supplies
are taxable or not. This clause further provides for issuance of a show cause notice for
the amount collected but not deposited. This clause also provides that the order needs
to be issued within one year from the date of issuance of such notice.
Clause 77 provides for refund of central tax in situations where intra-State supplies
are subsequently held to be inter-State supplies.
Clause 78 provides that any amount payable in pursuance of an order shall be
paid by such person within a period of three months, except in certain specified cases,
from the date of service of order failing which recovery proceedings shall be initiated.
Clause 79 provides for various modes of recovery of amount payable under the
proposed Act.
Clause 80 provides for payment of arrears in a maximum of twenty-four instalments.
Clause 81 provides that transfer of property would be void in certain specified
circumstances.
Clause 82 provides that liabilities under the proposed Act shall be the first charge
on the property of the taxable person, save as otherwise provided in the Insolvency
and Bankruptcy Code, 2016.
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Clause 83 provides that during the pendency of any proceedings under certain
sections of the proposed Act, the Commissioner by order in writing attach provisionally
any property for a period of one year from the date of the order for provisional attachment.
Clause 84 provides for continuation and validation of certain recovery
proceedings.
Clause 85 provides that where a taxable person transfers his business in whole or
in part, the taxable person and the person to whom the business is so transferred shall,
jointly and severally, be liable wholly or to the extent of such transfer, to pay the tax,
interest or any penalty due from the taxable person upto the time of such transfer.
Clause 86 provides that where an agent supplies or receives any taxable goods
on behalf of his principal, such agent and his principal shall, jointly and severally, be
liable to pay the tax payable on such goods.
Clause 87 provides for the liability of companies when two or more companies are
amalgamated or merged in pursuance of an order of court or of Tribunal or otherwise.
Clause 88 provides for the liability of company and its directors when any company
is being wound up.
Clause 89 provides for the liability of director of a private company.
Clause 90 provides for the liability of the firm and each of the partners of the firm.
Clause 91 provides for the liability of guardians and trustees acting on behalf of
a minor or other incapacitated person.
Clause 92 provides for the liability of the Court of Wards, the Administrator
General, the Official Trustee or any receiver or manager.
Clause 93 provides for special provisions regarding liability to pay tax, interest or
penalty in certain cases.
Clause 94 provides for liability 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.
Clause 95 contains definitions of the terms and expressions used in the Chapter
on Advance Ruling.
Clause 96 provides that the Authority for Advance Ruling constituted under the
provisions of a State Goods and Services Tax Act or Union Territory Goods and Services
Tax Act shall be deemed to be the Authority for Advance Ruling in respect of that State
or Union territory under the proposed Act.
Clause 97 provides for form, manner and fee for filing of an application for advance
ruling. This clause also lists the nature of questions on which advance ruling can be
sought.
Clause 98 provides for the detailed procedure for filing of an application for
advance ruling. This clause provides that the advance ruling is to be pronounced
within ninety days from the date of receipt of application.
Clause 99 provides that the Appellate Authority for Advance Ruling constituted
under the provisions of a State Goods and Services Tax Act or a Union Territory Goods
and Services Tax Act shall be deemed to be the Appellate Authority in respect of that
State or Union Territory under the proposed Act.
Clause 100 provides that any party aggrieved by any advance ruling may appeal
to the Appellate Authority within a period of thirty days from the date on which the
ruling sought to be appealed against is communicated.
114
Clause 101 provides that the Appellate Authority shall pass order within a period
of ninety days from the date of filing of the appeal or a reference. This clause also
provides that where the members of the Appellate Authority differ on any point referred
to in appeal or reference; it shall be deemed that no advance ruling can be issued in
respect of the question under the appeal or reference.
Clause 102 provides that the Authority or the Appellate Authority may amend
any order passed by it so as to rectify any error apparent on the face of the record,
except under certain specified circumstances, within a period of six months from the
date of the order.
Clause 103 provides that the advance ruling shall be binding only on the applicant
and on the concerned officer or the jurisdictional officer in respect of the applicant.
This clause also provides that the advance ruling shall be binding unless there is a
change in law or facts.
Clause 104 provides that the advance ruling shall be void where the ruling has
been obtained by fraud or suppression of material facts or misrepresentation of facts.
Clause 105 provides that the Authority or the Appellate Authority shall have all
the powers of a civil court under the Code of Civil Procedure, 1908 for the purpose of
exercising its powers under the proposed Act.
Clause 106 provides that the Authority or the Appellate Authority shall have
power to regulate its own procedure.
Clause 107 provides the tax payer or the department may appeal against any
decision or order passed by an adjudicating authority under the proposed Act or the
State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act
within three months or six months respectively. The clause provides for a pre-deposit
of ten per cent. for admittance of the appeal filed by the tax payer and grant of automatic
stay on the remaining amount.
Clause 108 provides power of revision to the Commissioner. The clause provides
that the Revisional Authority, on his own motion, or upon request from Commissioner
of State tax or the Commissioner of Union territory tax may revise an order passed by an
officer subordinate to him if he considers it to be erroneous and prejudicial to the
interest of revenue.
Clause 109 provides for constitution of Appellate Tribunal for hearing appeals
against the orders passed by the Appellate Authority or the Revisional Authority. The
clause provides for formation of National, Regional, State and Area Benches.
Clause 110 provides for the qualification, appointment, conditions of services,
removal of the President and Members of the Appellate Tribunal.
Clause 111 provides for the procedure to be followed by the Appellate Tribunal
while disposing of any proceedings before it or appeal presented before it.
Clause 112 provides for the detailed procedure for filing of appeal before the
Appellate Tribunal. The clause further provides for filing of appeal by order passed
under the State Goods and Services Tax Act and the Union Territory Goods and Services
Act to be appealed in the Tribunal. The clause also provides for a pre-deposit of twenty
per cent. of amount of tax in dispute for admittance of appeal filed by the taxpayer in the
Appellate Tribunal and grant of automatic stay on the remaining amount.
Clause 113 provides for the process to be followed by Appellate Tribunal while
confirming, modifying or annulling the decision or order against which an appeal has
been filed.
Clause 114 provides for financial and administrative power of the President of the
Appellate Tribunal over the National and Regional Benches.
115
Clause 115 provides for payment of interest where the pre-deposits are required
to be refunded consequent to any order of the Appellate Authority or of the Appellate
Tribunal.
Clause 116 provides for qualification, disqualification and other procedures relating
to authorised representative.
Clause 117 provides that the appeals to the High Court can be filed by a person,
aggrieved by an order of the State Bench or Area Bench of the Tribunal, within one
hundred and eighty days. This clause also provides that the High Court may admit the
appeal on substantial question of law.
Clause 118 provides for appeal before the Supreme Court from an order of the
National Bench or Regional Benches of the Appellate Tribunal, or from any judgment
given or order passed by the High Court.
Clause 119 provides that sums due to the Government in accordance with an
order passed by the National, Regional, State, Area Bench or a High Court shall be
payable notwithstanding that an appeal has been preferred to the High Court or the
Supreme Court.
Clause 120 confers powers on the Board to issue orders or instructions or directions
fixing monetary limits below which appeals will not be filed by the department.
Clause 121 provides for matters in which any decision taken or order passed by
an officer of central tax cannot be appealed against.
Clause 122 provides for a list of offences such as supply of goods without invoice,
issue of invoice without supply, etc., which shall be liable to penalty. The clause also
provides for offences such as aiding or abetting offences specified, fails to appear on
a summon, etc., will be liable of a penalty of twenty-five thousand rupees.
Clause 123 provides for a penalty for failure to furnish information return under
clause 150.
Clause 124 provides for a fine on any person who fails to furnish any information
or return under clause 151.
Clause 125 provides for a general penalty extending to twenty-five thousand
rupees for any contravention to the provisions of the proposed Act and where no
penalty has been separately specified for such contravention.
Clause 126 provides for general disciplines which shall be followed by the officer
imposing penalty under the proposed Act.
Clause 127 provides for the proper officer to impose penalty which is not covered
under any proceedings under specified clauses of the proposed Act.
Clause 128 confers power to the Government to waive penalty in part or full, any
penalty referred to in specified sections of the proposed Act or any late fee for specified
class of taxpayers and under specified circumstances.
Clause 129 provides for provisions relating to detention, seizure and release of
goods and conveyances in transit. This clause also provides for penalty which shall be
payable for release of such goods.
Clause 130 provides for provisions relating to confiscation of goods or
conveyances. This clause also provides for a fine which shall be payable for release of
such goods.
Clause 131 clarifies that confiscation made or penalty imposed under the provisions
of the proposed Act should not prevent the infliction of any other punishment imposed
under provisions of the proposed Act or under any other law for the time being in force.
116
Clause 132 provides for a list of offences which shall be punishable with gradation
of fine and imprisonment depending on the amount of tax evaded or the amount of input
tax credit wrongly availed or utilised or the amount of refund wrongly taken. This
clause also provides for offences which shall be non-cognisable and bailable or
cognizable and non-bailable.
Clause 133 provides for punishment and imprisonment for wrongful declaration
of information by any person engaged in connection with the collection of statistics
under clause 151 or any person engaged in connection with the provision of service on
the common portal or the agent of common portal.
Clause 134 provides for restriction to Courts to take cognizance of any offence
under the proposed Act or the rules made thereunder except with the previous sanction
of the Commissioner.
Clause 135 provides presumption of culpable mental state by the court unless
otherwise proved by the accused.
Clause 136 provides for relevancy of the statements made and signed by a person
on appearance in response to any summons.
Clause 137 provides that if the person who committed an offence is a company,
the person who was in charge and responsible for the conduct of business of the
company shall be deemed to be guilty of the offence and punished accordingly.
Clause 138 provides for compounding of any offence under the proposed Act,
either before or after the institution of prosecution, by the Commissioner on payment of
a prescribed compounding amount.
Clause 139 provides for migration of taxpayers registered under the existing law
to be issued provisional registration under the proposed Act, if the said taxpayer is
required to be registered under the provisions of the proposed Act.
Clause 140 provides for transitional arrangements for carrying forward of input
tax credit available under the existing law.
Clause 141 provides for transitional provisions relating to job work.
Clause 142 provides for miscellaneous provisions for transition of existing tax
payers in various situations.
Clause 143 provides for the procedure and conditions for sending any inputs or
capital goods, without payment of tax to a job worker for job-work.
Clause 144 provides for presumption to be made for documents tendered by the
prosecution in evidence unless the contrary is proved by the person being prosecuted.
Clause 145 provides for admissibility of micro films, facsimile copies of documents
and computer printouts as evidence.
Clause 146 provides for notification of the Common Goods and Services Tax
Electronic Portal for facilitating registration, payment of tax, furnishing of returns,
computation and settlement of integrated tax, electronic way bill and other functions.
Clause 147 confers powers on the Government to notify certain supplies of goods
as deemed exports on the recommendations of the Council.
Clause 148 confers powers on the Government to notify certain classes of
registered persons, and the special procedures to be followed by such persons on the
recommendations of the Council.
Clause 149 provides for the assignment and provision of parameters for Goods
and Services tax compliance rating.
117
Clause 150 provides for list of persons who are obligated to furnish information
return and the procedure to be followed by such persons.
Clause 151 confers powers on the Commissioner to direct collection of statistics
relating to any matter in connection with the proposed Act.
Clause 152 provides for situations and instances where there is a bar on disclosure
of information required under clause 151.
Clause 153 confers powers on officers to take assistance of any expert at any
stage of scrutiny, inquiry, investigation or any other proceedings.
Clause 154 provides for the power of the Commissioner or an officer authorised
by him to take samples of goods from the possession of any taxable person.
Clause 155 provides that the burden of proving rightful claim of input tax credit
will lie on the person claiming the credit.
Clause 156 provides that all persons discharging functions under the proposed
Act shall be deemed to be public servants within the meaning of section 21 of the
Indian Penal Code, 1860.
Clause 157 provides that no suit, prosecution or other legal proceedings shall lie
against the President, State President, Members, officers or other employees of the
Appellate Tribunal or any other officer appointed or authorised under the proposed
Act for anything which is in good faith done or intended to be done under the proposed
Act or rules made thereunder.
Clause 158 provides that no particulars contained in any statement made, return
furnished or accounts or documents produced in accordance with the proposed Act
should be disclosed. The clause also provides for specific circumstances under which
such information can be disclosed.
Clause 159 confers power on the Commissioner, or any other officer authorised
by him to publish the name of any person and any other particulars relating to any
proceedings or prosecution under the proposed Act if it is necessary in public interest
to do so.
Clause 160 provides that no assessment, re-assessment, adjudication, review,
revision, appeal, rectification, notice, summons or other proceedings done, accepted,
made, issued, initiated, or purported to have been done, accepted, made, issued, initiated
in pursuance of any of the provisions of the proposed Act shall be invalid or deemed to
be invalid merely by reason of any mistake, defect or omission.
Clause 161 provides that any authority can rectify any error which is apparent on
the face of record in any decision or order or notice or certificate or any other document.
Clause 162 restricts civil courts to have jurisdiction to deal with or decide any
question arising from or relating to anything done under the proposed Act.
Clause 163 provides that a fee may be charged for a copy of any order or document
provided to any person on an application made by him.
Clause 164 confers powers on the Central Government to make rules for carrying
out the provisions of the proposed Act on recommendations of the Council.
Clause 165 confers powers on the Board to make regulations for carrying out the
provisions of the proposed Act.
Clause 166 provides for laying of rules, regulations and notifications made by the
Central Government before each House of the Parliament.
Clause 167 provides that the Commissioner may direct that any power exercisable
by any authority or officer under the proposed Act may be exercisable also by another
authority or officer, subject to specified conditions.
118
Clause 168 confers powers to the Board to issue orders, instructions or directions
to the central tax officers for uniform implementation of the provisions of the proposed
Act.
Clause 169 provides for methods which should be followed for communication of
any decision, order, summons, notice or other communication under the proposed Act.
Clause 170 provides for rounding off of tax, interest, penalty, fine or any other
sum payable and the amount of refund or any other sum due.
Clause 171 provides that it is mandatory to pass on the benefit due to reduction
in rate of tax or from input tax credit to the consumer by way of commensurate reduction
in prices.
Clause 172 confers powers on the Central Government to make such provisions
not inconsistent with the provisions of the proposed Act or the rules or regulations by
a general or special order, on the recommendations of the Council within a period of
three years from the date of commencement of the proposed Act.
Clause 173 provides for omitting Chapter V of the Finance Act, 1994, save as
otherwise provided in the proposed Act.
Clause 174 provides repeal of certain Acts and savings of certain actions.
119
FINANCIAL MEMORANDUM
Clause 53 of the Bill provides for apportionment of tax and settlement of funds on
account of transfer of utilisation of input tax credit under this Bill for the payment of tax dues
under the integrated goods and services tax by the Central Government.
2. Clause 96 of the Bill provides for the establishment of an Authority for Advance
Ruling under the State Goods and Services Tax Act or Union Territory Goods and Services
Tax Act and adoption of the same under the Central Goods and Services Tax Act.
3. Clause 99 of the Bill provides for the establishment of an Appellate Authority for
Advance Ruling under the State Goods and Services Tax Act or Union Territory Goods and
Services Tax Act and adoption of the same under the Central Goods and Services Tax Act.
4. Sub- clause (1) of clause 109 of the Bill provides for the establishment of the Goods
and Services Tax Appellate Tribunal by the Central Government for hearing appeals against
the orders passed by the Appellate Authority or the Revisional Authority. Sub-clause (8) of
clause 110 of the Bill provides for the salary and allowances payable to the President and
Members of the Appellate Tribunal.
5. Sub- clause (2) of clause 171 of the Bill provides for establishment of an authority for
an anti-profiteering clause in order to ensure that business passes on the benefit of reduced
tax incidence on goods or services or both to the consumers.
6. The total financial implications in terms of recurring and non-recurring expenditure
involved in carrying out the various functions under the proposed Legislation would be
borne by the Central Government. Most of the existing officers and staff of the Central Board
of Excise and Customs would be used for carrying out the various functions under the Bill.
However, it is not possible to estimate the exact recurring and non-recurring expenditure
from the Consolidated Fund of India at this stage.
MEMORANDUM REGARDING DELEGATED LEGISLATION
Clause 164 of the Central Goods and Services Bill, 2017 seeks to empower the
Central Government to make rules, inter alia, in the following matters, namely:—
(a) collection of taxes under section 9; (b) restrictions and conditions
applicable to person opting for composition levy on under section 10; (c) value
of the supply of goods or services or both under section 15; (d) conditions and
restrictions on availing input tax credit and categories of tax paying documents
under section 16; (e) depreciation on capital goods and plant and machinery as
specified under section 18; (f) conditions and restrictions to allow input tax credit
on inputs sent to a job-worker for job-work under section 19; (g) conditions and
restrictions to allow input tax credit on capital goods sent to a job worker for job
work under section 19; (h) manner of distribution of input tax credit by input
service distributor under section 20; (i) manner and conditions for getting
registered under section 25; (j) conditions for getting separate registration for
business vertical under section 25; (k) period in which tax invoice is to be issued
under section 31; (l) particulars to be declared on a tax invoice and a time in which
such invoices are to be issued under section 31; (m) particulars to be declared on
a credit or debit note under section 34; (n) particulars required to be maintained
by a registered person at his principal place of business under section 35;
(o) form and manner in which details of outward supplies are to be declared under
section 37; (p) form and manner in which details of inward supplies are to be
declared under section 38; (q) form and manner in which a return is to be filed by
the registered person under section 39; (r) conditions and restrictions for
provisional acceptance and claim of input tax credit under section 41; (s) calculation
of interest on delayed payment of tax under section 50; (t) manner in which tax is
to be deducted at source under section 51; (u) manner in which tax is to be
collected at source under section 52; (v) manner and time for transfer of input tax
credit under section 53; (w) form and manner in which application of refund is to
be made under section 54; (x) condition and restrictions on refund in certain
cases under section 55; (y) manner in which consumer welfare fund is to be
constituted under section 57; (z) manner in which consumer welfare fund is to be
utilised under section 58; (za) form in which a bond for provisional assessment is
to be filed under section 60; (zb) manner in which returns are to be scrutinised
under section 61; (zc) frequency and manner in which audit will be taken by tax
authorities under section 65; (zd) manner in which advance ruling pronounced is
to be certified under section 98; (ze) form, manner and fee for appeal to Appellate
Authority under section 100; (zf) manner in which Advance Ruling pronounced
by the Appellate Authority is to be certified under section 101;(zg) appeals to
Appellate Authority under section 107; (zh) constitution of selection committee
and their manner of working for selection of the Technical Member (Centre) and
Technical Member (State) of the National Bench and Regional Benches under
section 110; (zi) verification of memorandum of cross objection under section
112; (zj) manner in which President exercise his financial and administrative powers
under section 114; (zk) time, form and manner in which persons furnish information
return under section 150; (zl) form and manner in which statistics is to be collected
under section 151; (zm) fee for taking a copy of any order or document under
section 163; (zn) powers and discharge such functions under section 171; and
(zo) any other matter which is to be, or may be, prescribed, or in respect of which
provision is to be made, by rules.
2. Clause 165 of the Bill empowers the Board to make regulations to provide for
any matter which is required to be, or may be, specified by regulation or in respect of
which provision is to be made by regulations.
120
121
3. The matters in respect of which the said rules and regulations may be made are
matters of procedure and administrative detail, and as such, it is not practicable to
provide for them in the proposed Bill itself. The delegation of legislative power is,
therefore, of a normal character.
GMGIPMRND—5426LS(S3)—23-03-2017.
LOK SABHA
————
A
BILL
to make a provision for levy and collection of tax on intra-State supply of goods or services
or both by the Central Government and the matters connected therewith or incidental
thereto.
————
(Shri Arun Jaitley, Minister of Finance and Corporate Affairs.)

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