President Assents Central Goods and Services Tax Act, 2017
MINISTRY OF LAW AND JUSTICE
(Legislative Department)
(Legislative Department)
New Delhi, the 12th April, 2017/Chaitra 22, 1939 (Saka)
The following Act of Parliament received the
assent of the President on the 12th April, 2017, and is hereby published
for general information:—
THE CENTRAL GOODS AND SERVICES TAX ACT, 2017
NO. 12 OF 2017
[12th April, 2017.]
An Act 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 for 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
Short title, extent and commencement.
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:
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.
Definitions.
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;
(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;
(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;
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;
(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;
(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-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act;
(d) the tax payable under the provisions of
sub-sections (3) and (4) of section 9 of the respective State Goods and
Services Tax Act; or
(e) the tax payable under the provisions of
sub-sections (3) and (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;
(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 37 1A 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 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;
(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;
(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 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. Officers under this Act.
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,
(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. Appointment of officers.
(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. Powers of officers.
(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. Authorisation of officers of State tax or Union territory tax as proper officer in certain circumstances.
(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.
CHAPTER III
LEVY AND COLLECTION OF TAX
7. Scope of supply.
(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. Tax liability on composite and mixed supplies.
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. Levy and collection.
(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.
(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. Composition levy.
(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.
(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. Power to grant exemption from tax.
(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. Time of supply of goods.
(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 up to 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.
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. Time of supply of services.
(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 up to 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)––
(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. Change in rate of tax in respect of supply of goods or services.
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,––
(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. Value of taxable supply.
(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.
(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
(viii) 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. Eligibility and conditions for taking input tax credit.
(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 utiisation 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
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. Apportionment of credit and blocked credits.
(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;
(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 sub-sections (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. Availability of credit in special circumstances.
(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 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.
19. Taking input tax credit in respect of inputs and capital goods sent for job work.
(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. Manner of distribution of credit by Input Service Distributor.
(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;
(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 entries 51 and 54 of List II of
the said Schedule.
21. Manner of recovery of credit distributed in excess.
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. Persons liable for registration.
(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 licence 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,
demerger of two or more companies pursuant to an order of a High Court,
Tribunal 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. Persons not liable for registration.
(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. Compulsory registration in certain cases.
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 database 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. Procedure for registration.
(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
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 baseline 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 Income-tax 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.
(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. Deemed registration.
(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. Special provisions relating to casual taxable person and non-resident taxable person.
(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. Amendment of registration.
(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. Cancellation of registration.
(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
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. Revocation of cancellation of registration.
(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.
(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. Tax invoice.
(1) A registered person supplying taxable goods shall, before or at the time of,— Tax invoice.
(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;
(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 sub-section (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. Prohibition of unauthorised collection of tax.
(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. Amount of tax to be indicated in tax invoice and other documents.
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. Credit and debit notes.
(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.
(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. Accounts and other records.
(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 person 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 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. Period of retention of accounts.
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. Furnishing details of outward supplies.
(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 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. Furnishing details of inward supplies.
(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 or 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.
39. Furnishing of returns.
(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 or 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.
40. First return.
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. Claim of input tax credit and provisional acceptance thereof.
(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 utiised only for payment of self-assessed output tax as per the
return referred to in the said sub-section.
42. Matching, reversal and reclaim of input tax credit.
(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 sub-section (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 sub-section (5) or sub-section (6),
shall be liable to pay interest at the rate specified under sub-section
(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:
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. Matching, reversal and reclaim of reduction in output tax liability.
(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 sub-section (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 sub-section (5) or sub-section (6),
shall be liable to pay interest at the rate specified under sub-section
(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.
44. Annual return.
(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. Final return.
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. Notice to return defaulters.
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. Levy of late fee.
(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. Goods and services tax practitioners.
(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. Payment of tax, interest, penalty and other amounts.
(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.
(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 utiised
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 utiised
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 utiised
towards payment of State tax and the amount remaining, if any, may be
utiised 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 utiised 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. Interest on delayed payment of tax.
(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.
(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 sub-section (10) of section 42 or
undue or excess reduction in output tax liability under sub-section
(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. Tax deduction at source.
(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 days 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 section 74.
(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.
52. Collection of tax at source.
(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 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. Transfer of input tax credit.
On utiisation 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 utiised 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. Refund of tax.
(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.
(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 sub-section (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);
(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,––
(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. Refund in certain cases.
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. Interest on delayed refunds.
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
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. Consumer Welfare Fund.
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. Utilisation of Fund.
(1) All sums credited to the Fund shall be
utiised 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. Self assessment.
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. Provisional assessment.
(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 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. Scrutiny of returns.
(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. Assessment of non-filers of returns.
(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. Assessment of unregistered persons.
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 judgment 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. Summary assessment in certain special cases.
(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.
CHAPTER XIII
AUDIT
65. Audit by tax authorities.
(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 utiised,
the proper officer may initiate action under section 73 or section 74.
66. Special audit.
(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.
(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. Power of inspection, search and seizure.
(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 authorised 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
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 sub-section (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. Inspection of goods in movement.
(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. Power to arrest.
(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 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. Power to summon persons to give evidence and produce documents.
(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. Access to business premises.
(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. Officers to assist proper officers.
(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.
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.
(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 utiised
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.
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.
(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;
(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 there under, or failure to furnish any information on being
asked for, in writing, by the proper officer.
75. General provisions relating to determination of tax.
(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 sub-section (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
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. Tax collected but not paid to Government.
(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.
77. Tax wrongfully collected and paid to Central Government or State Government.
(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. Initiation of recovery proceedings.
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. Recovery of tax.
(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 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 2 of 1974. 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.
80. Payment of tax and other amount in instalments.
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. Transfer of property to be void in certain cases.
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. Tax to be first charge on property.
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. Provisional attachment to protect revenue in certain cases.
(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. Continuation and validation of certain recovery proceedings.
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 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. Liability in case of transfer of business.
(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. Liability of agent and principal.
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. Liability in case of amalgamation or merger of companies.
(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. Liability in case of company in liquidation.
(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. Liability of directors of private company.
(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 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. Liability of partners of firm to pay tax.
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. Liability of guardians, trustees, etc.
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. Liability of Court of Wards, etc.
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. Special provisions regarding liability to pay tax, interest or penalty in certain cases.
(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.
(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. Liability in other cases.
(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.
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. Definitions.
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;
(b) “Appellate Authority” means the Appellate Authority for Advance Ruling referred to in section 99;
(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.
96. Authority for advance ruling.
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. Application for advance ruling.
(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. Procedure on receipt of application.
(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:
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. Appellate Authority for Advance Ruling.
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. Appeal to Appellate Authority.
(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. Orders of Appellate Authority.
(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 applicant, the
concerned officer, the jurisdictional officer and to the Authority after
such pronouncement.
102. Rectification of advance ruling.
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. Applicability of advance ruling.
(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. Advance ruling to be void in certain circumstances.
(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. Powers of Authority and Appellate Authority.
(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. Procedure of Authority and Appellate Authority.
The Authority or the Appellate Authority
shall, subject to the provisions of this Procedure of Chapter, have
power to regulate its own procedure.
CHAPTER XVIII
APPEALS AND REVISION
107. Appeals to Appellate Authority.
(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:
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. Powers of Revisional Authority.
(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):
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 sub-section
(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. Constitution of Appellate Tribunal and Benches thereof.
(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:
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. President and Members of Appellate Tribunal, their qualification, appointment, conditions of service, etc.
(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
(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.
(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 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. Procedure before Appellate Tribunal.
(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. Appeals to Appellate Tribunal.
(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 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.
113. Orders of Appellate Tribunal.
(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. Financial and administrative powers of President.
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. Interest on refund of amount paid for admission of appeal.
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. Appearance by authorised representative.
(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
(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. Appeal to High Court.
(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.
(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. Appeal to Supreme Court.
(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. Sums due to be paid notwithstanding appeal, etc.
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 sub-section (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. Appeal not to be filed in certain cases.
(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 sub-section (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 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 sub-section (1).
121. Non-appealable decisions and orders.
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. Penalty for certain offences.
(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
sub-section (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 utilises 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;
(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;
(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. Penalty for failure to furnish information return.
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. Fine for failure to furnish statistics.
If any person required to furnish any information or return under section 15 1,—
(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. General penalty.
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. General disciplines related to penalty.
(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. Power to impose penalty in certain cases.
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
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. Power to waive penalty or fee or both.
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. Detention, seizure and release of goods and conveyances in transit.
(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. Confiscation of goods or conveyances and levy of penalty.
(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
(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 sub-section (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. Confiscation or penalty not to interfere with other punishments.
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. Punishment for certain offences.
(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
utiisation of input tax credit or refund of tax;
(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.
(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 non-cognizable and
bailable.
(5) The offences specified in clause (a) or
clause (b) or clause (c) or clause (d) of sub-section (1) and punishable
under clause (i) of that sub-section shall be cognizable and
non-bailable.
(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 utiised 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. Liability of officers and certain other persons.
(1) 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. Cognizance of offences.
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. Presumption of culpable mental state.
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. Relevancy of statements under certain circumstances.
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
(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. Offences by companies.
(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. Compounding of offences.
(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
(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. Migration of existing taxpayers.
(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. Transitional arrangements for input tax credit.
(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.
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 in
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 account 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.
(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;
(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. Transitional provisions relating to job work.
(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:
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. Miscellaneous transitional provisions.
(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:
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 sub-section (2)
of section 1 1B 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 1 1B 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 1 1B 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 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 sub-section
(2) of section 1 1B 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 1 1B 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 1 1B 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.
(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
sub-section:
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. Job work procedure.
(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 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 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. Presumption as to documents in certain cases.
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. Admissibility of micro films, facsimile copies of documents and computer printouts as documents and as evidence.
(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
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. Common Portal.
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. Deemed exports.
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. Special procedure for certain processes.
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. Goods and services tax compliance rating.
(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. Obligation to furnish information return.
(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
(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. Power to collect statistics.
(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 .
152. Bar on disclosure of information.
(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. Taking assistance from an expert.
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. Power to take samples.
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. Burden of proof.
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. Persons deemed to be public servants.
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. Protection of action taken under this Act.
(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. Disclosure of information by a public servant.
(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
(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. Publication of information in respect of persons in certain cases.
(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. Assessment proceedings, etc., not to be invalid on certain grounds.
(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 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. Rectification of errors apparent on the face of record.
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. Bar on jurisdiction of civil courts.
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. Levy of fee.
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. Power of Government to make rules.
(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. Power to make regulations.
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. Laying of rules, regulations and notifications.
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 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. Delegation of powers.
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. Power to issue instructions or directions.
(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. Service of notice in certain circumstances.
(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).
(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. Rounding off of tax, etc.
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. Anti-profiteering measure.
(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. Removal of difficulties.
(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. Amendment of Act 32 of 1994.
Save as otherwise provided in this Act, Chapter V of the Finance Act, 1994 shall be omitted.
174. Repeal and saving.
(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:
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
Act, 1897 with regard to the effect of repeal.
SCHEDULE I
[See 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.
SCHEDULE II
[See 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 services, 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.
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.
SCHEDULE III
[See 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.
DR. G. NARAYANA RAJU
Secretary to the Govt. of India.