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Section wise simplified notes/analysis of Draft GST Law, 2016 Part II Suggestions/recommendations are welcomed at milindkale@mkca.co.in CA MILIND KALE 07666619356 #pdf
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Model GST Law, 2016 CA MILIND KALE 32 | P a g e 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. Model GST Law, 2016 CA MILIND KALE 33 | P a g e 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 Model GST Law, 2016 CA MILIND KALE 34 | P a g e 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 Model GST Law, 2016 CA MILIND KALE 35 | P a g e 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 Model GST Law, 2016 CA MILIND KALE 36 | P a g e 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 Model GST Law, 2016 CA MILIND KALE 37 | P a g e 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 Model GST Law, 2016 CA MILIND KALE 38 | P a g e 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 Model GST Law, 2016 CA MILIND KALE 39 | P a g e 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 Model GST Law, 2016 CA MILIND KALE 40 | P a g e 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 Model GST Law, 2016 CA MILIND KALE 41 | P a g e 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 Model GST Law, 2016 CA MILIND KALE 42 | P a g e 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 Model GST Law, 2016 CA MILIND KALE 43 | P a g e 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 Model GST Law, 2016 CA MILIND KALE 44 | P a g e 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




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