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Model GST Law, 2016
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CHAPTER X
REFUNDS
Section 38: Refund of tax 1. What is eligible for refund:
a. Tax
b. Interest on tax
c. Any other amount paid
2. Time limit to claim refund:
a. Refund shall be claim within 2 years from the RELEVANT DATE
b. Limitation of 2 years not apply when duty is paid u nder protest
3. RELEVANT DATE means:
Situation Relevant Date
Export of goods out of India
a. By sea or air Date on which goods are loaded, leave India
b. By land Date on which goods pass the frontier
c. By post Date of dispatch of goods by PO to a place outside India
Deemed Export Date of filing of return relating to such transaction
Goods are returned for rework Date of entry into place of business for rework
Export of Service out of India
a. Supply √ Receipt × Date of receipt of payment in convertible Foreign E xch
b. Invoice × Receipt √ Date of issue of invoice
Tax become refundable by
judgment/order
Date of communication of such judgment/order
Unutilized ITC End of FY for which refund arises
Tax paid provisionally Date of adjustment of tax after final assessment
4. To whom application is to be filed:
a. To proper officer of IGST/CGST/SGST
b. In the manner specified
5. When to claim refund:
a. A taxable person may claim refund at the end of any unutilized input tax credit
at the end of any tax period
6. Conditions for claiming refund:
a. Unutilized input tax credit shall be w.r.t. export
b. No refund of unutilized input tax credit shall be a llowed when exports are
subject to export duty
c. Credit has accumulated on account of rate of tax on inputs being higher than
the rate of tax on outputs
7. Application should be accomplished by documentary e vidence to establish that:
a. Refund is due to the applicant
b. Amount of tax & interest on tax if any is paid by a pplicant and same is not
collected from him from any other person.
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c. If amount claimed as refund is less than Rs. 5 Lakh s, then a declaration stating
that such tax & interest has not been passed on to any other person
8. Determination of amount of refund
FULL REFUND PART REFUND
FULL REFUND ORDER PART REFUND ORDER
9. For refund claim of export of goods and/or service by specified person a proper officer may
Refund 80% Hold 20%
Except ITC provisionally accepted Shall be refunded after verification
10.Time limit to issue refund order: Within 90 days from the date of application
11.In the following cases refund may be directly cr edited to applicants account:
a. Refund of tax on goods and/or services exported out of India or used in goods
and/or services exported out to India.
b. Refund of unutilized input tax credit (SI 5)
c. If burden is not passed to any other person
d. Tax & interest borne by such other persons specifie d
12.When refund order is subject matter of an appeal or proceeding then refund may be
withhold till such time as may be determine.
13.A taxable person is entitled to interest on amou nt of refund withheld if appeal is in
favor of taxable person
14.No refund is allowed if amount of refund is less than Rs.1000/-
Section 39: Interest on delayed refund
1. Rate of interest : To be specified on the recommendations of GST Coun cil
2. Period : Due Date of Refund TO Actual Date of Refund
3 months from date of refund application
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Section 40: Consumer Welfare Fund
1. Establishment of Fund
2.
Section 41: Utilization of the fund 1. Amount credited to fund shall be used by Central Go vernment/State Government for
the welfare of consumers.
2. Central/State Government may specify the authority to maintain the fund with
consultation of CAG.
Consumer Welfare
Fund established by
Central GovtState Govt
Amount to be credited to
fund in a manner prescribed
Amount of refund
Income on
Investment of
amount credited to fund
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CHAPTER XII
ASSESSMENT
Section 44: Self=Assessment
1. Every taxable person shall self-assess taxes payabl e and furnish details in monthly
return.
2. Inward Supply returned within six months from the d ate of invoice then tax
payable on such return shall be equal to ITC availe d on inward supply.
Section 44A: Provisional Assessment
1.
Taxable
Person unable to determine
value of
goods/servicerate of tax
applicable
May request the proper officer in writing for payment of tax on provisional basis
The proper officer may pass order to pay tax at suc h
rate & on such amount as may be prescribed
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2.
3. Time limit to pass final order:
Six months from the date of passing provisional ass essment order
4.
Payment of tax on
provisional basis may be allwed
If taxable person execute bond with surety or secur ity to
bind himself for payment of differential tax
Extension to
pass final
order
For six
months
Permission of
Joint/Additional
Commissioner
Further
Permission of
Commissioner
Interest
Liability
On differential
amount of tax payble
on final assessmentFrom the first day
after due date of tax
to the date of actual payment
Wether date of
payment is before or
after date of final assessment
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5. If taxable person is entitled to refund on final as sessment then interest shall be
paid on such refund as provided in section 39
Section 45: Scrutiny of Returns
Section 46: Assessment of non=filers of returns
Section 47: Assessment of Non Registered Dealers
Condition : SCN shall be passed & a reasonable opportunity of being heard should be given.
Tax person
failed to get
Registration
Best
Judgement
AssessmentWithin 5 years from the due
date of filing
annual return
Scrutiny of return for
correctness Discrepancy noticed
communicated
Explanation
AccepatableNo further action
required
Explaination NOT
AccepatableFurther
Decrepancy
Explanation
not furnished
within 30 days
Fails to take corrrective
action
Initiate
appropriate action
Registered Taxable
PersonFails to submit monthly or
annual returnAllow 15 days to
Submit returnReturn
SubmittedNo action required
Return Not SubmittedBest
judgement
AssessmentFiled return within 30
days of orderAssessment Order
Withdrawn
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Section 48: Summary Assessment in certain special c ases
Proper Officer may assess
tax liability of a personto protect
interest of
revenueAllow 15 days to
Submit returnReturn
SubmittedNo action required
Return Not SubmittedBest
judgement
AssessmentFiled return within 30
days of orderAssessment Order
Withdrawn
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CHAPTER XIII
AUDIT
Section 49: Audit by Tax Authorities
1. Who will conduct audit?
Commissioner of CGST/SGST or any officer authorized by him
2. Where?
At business place of assesse
3. When?
At such frequency as may be prescribed
4. Prior intimation to taxable person required?
Yes, at least before 15 days
5. Time line for audit
Audit shall be completed within 3 months from the d ate of commencement of audit.
However it may extend to six months also with the c onsent of commissioner.
6. Responsibilities of taxable person
a. To afford necessary facility to verify books of acc ounts
b. To furnish such information as require
c. Assistance for timely completion of audit
7. Auditors responsibilities
a. Communication of findings, taxable persons rights & obligations and reasons for
the findings
b. If there is revenue leakage initiation of action un der Sec 51.
Date of commencement of audit
Date on which records are made available to tax authoritiesactual institution of audit
Whichever is earlier
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Section 50: Special Audit
1. Directions issued by Deputy/Assistant Commissioner based on:
2. Who will conduct audit?
Chartered Accountant or Cost Accountant nominated b y Commissioner.
3. Time
Chartered Accountant or Cost Accountant nominated b y Commissioner shall submit
his report within 90 days to DC/AC.
Extendable to further 90 days for material & suffic ient reason with the approval of
proper officer.
4. Expenses of Audit
Expense of audit including fees of CA or CMA are de termined & paid by Commissioner
& such determination is final.
5. If there is revenue leakage, proper officer may ini tiate action under section 51.
AC/DC is of opinion that
Value has not been correctly declaredCredit availed in not within normal limits
Because of nature & complexity of the
case and in interest of revenue
may direct such taxable person to get his records &
books of accounts examined and audited
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CHAPTER XIV
DEMANDS & RECOVERY
Section 51: Determination of tax not paid or short paid or erroneously refunded
A] By any reason other than fraud or any willful mi sstatement or suppression of
facts.
1. Issue of SCN stating that why he should not pay the amount specified in notice along with
interest u/s 36 & penalty.
2. The proper officer may serve a statement contain ing details of tax not paid, short paid,
erroneously refunded or input tax credit wrongly av ailed or utilized.
3. The service of such statement shall be deemed to be service of notice on such person.
4. The proper officer shall not issue notice or sta tement for tax, interest & penalty in respect
of amount of tax already paid by a taxable person a long with interest & inform the officer in
writing about such payment.
5. If amount of tax along with interest falls short in the opinion of proper officer then he
shall proceed with issue of notice for short amount .
6. If taxable person paid amount demanded along wit h interest within 30 days from the date
of issue of SCN then no penalty shall be payable & all proceedings deemed to be concluded.
7. Amount of Penalty = 10% of tax OR Rs.10000/-
(whichever is higher)
8. The proper officer shall determine tax, interest & penalty after considering representation
made by taxable person.
9.
Time limit to
issue order
In case of short/non payment or wrong
credit
within 3 years from due date or actual
date of filing of annual return whichever
is earlier for the period of dispute
In case of erroneous refund
within 3 year s from the date of refund
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B] By reason of fraud or any willful misstatement o r suppression of facts.
1. Issue of SCN stating that why he should not pay the amount specified in notice along with
interest u/s 36 & penalty.
2. The proper officer may serve a statement contain ing details of tax not paid, short paid,
erroneously refunded or input tax credit wrongly av ailed or utilized.
3. The service of such statement shall be deemed to be service of notice on such person.
4. The proper officer shall not issue notice or sta tement for tax, interest & penalty in respect
of amount of tax already paid by a taxable person a long with interest & a penalty equivalent
to 15% of tax amount and inform the officer in writ ing about such payment.
5. If amount of tax along with interest falls short in the opinion of proper officer then he
shall proceed with issue of notice for short amount .
6. If taxable person paid amount demanded along wit h interest & penalty equivalent to 25%
of tax amount within 30 days from the date of issue of SCN then all proceedings deemed to
be concluded.
7. The proper officer shall determine tax, interest & penalty after considering representation
made by taxable person.
8.
Time limit to
issue order
In case of
short/non
payment or
wrong credit
within 5 years from
due date or actual date of filing
of annual return whichever is
earlier for the period of dispute
In case of
erroneous
refund
within 5 year s from the date of refund
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C] General Provisions relating to demand of tax
1. If the service of notice or issuance of order is stayed by Court or Tribunal then such stay
period shall be excluded in computing the period of 3 years or 5 years.
2. If any Appellate Authority or Tribunal or Court concludes that the charges of fraud or any
willful misstatement or suppression of facts under [B] are not sustainable then the proper
officer shall initiate the proceedings deeming as i f notice issued under [A].
3. An opportunity of personal hearing shall be gran ted on request on taxable person
chargeable with tax or penalty or any adverse decis ion is contemplated against such person.
4. The proper officer shall for sufficient reason r ecorded in writing shown by a taxable
person, grant time, extend and adjourn the hearing subject to maximum 3 times.
5. The proper officer shall set out relevant facts & the basis of his decisions in his order.
6. Amount of tax, interest & penalty shall not exce ed the amount specified in the notice.
7. No demand shall be confirmed on the ground other than mentioned in the notice.
8. If Appellate Authority or Tribunal or Court modi fies amount determined by proper officer
then interest & penalty shall stand modified accord ingly.
9. Interest on tax short paid or not paid shall be payable even if not specified in order
determining tax liability.
10. The adjudication procedure shall deemed to be c oncluded if order not passed within time
limit provided under [A] or [B].
11.
D. Provisions under [A], [B] & [C] shall apply mutatis mutandis for recovery of interest not
paid, short paid or erroneously refunded.
Order prejudicial to the interest of
revenue in some
other proceedings Passed byFirst Appelate Tribunal
Apellete Tribunal High Court
Appeal against such order is pending
Appellete Tribunal
High Court
Supream Court
Period Spent between order of lower & higher
authority shall be excluded in computing the time limit to issue order
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Section 52: Tax collected but not deposited with th e Central or a State Government
1.
2. Where amount required to be paid is not paid then p roper officer may serve SCN
stating that why he should not pay the amount speci fied in notice along equivalent
penalty.
3. The proper officer shall determine tax, interest & penalty after considering
representation made by taxable person.
4. Interest is payable under section 36 for a period f rom the date of collection to the date
of payment.
5. An opportunity of personal hearing shall be granted on request on taxable person
chargeable with tax or penalty or any adverse decis ion is contemplated against such
person.
6. Limit to issue order
4.8
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