Proposed taxation structure under GST Taxable Event – Schedule I Temporary application of Business Assets to a private use (Eg: Use of assets like car, bungalow for personal use of a director) Services put to private use (Eg: Travel, telephone services provided to a director for personal use) Assets retained after De-Registration (Eg: Payment of ITC taken on left over stock) Free supply of goods like Samples. Doesn’t cover goods sent for Job work. 34
Proposed taxation structure under GST Administrative Structure Centre State Clause 7 of the Draft Law scenario levies levies Regular CGST SGST Transfers transactions Centre State Inter-state SGST to destination levies later Clause 4 of the IGST(CGST + Draft Law SGST) Trade has to deal with dual tax administration! 35
Features of GST RNR • Select Committee of RS wants it to be below 20% (Standard Rate). Lower rate at 14%. • Earlier a sub Committee of the Empowered Committee had set it at 27%. The 13th FC set it around 12%. • Committee headed by CEA, Mr Arvind Subramaniam has looked into it and submitted a report. Recommended an overall RNR of 15.5% and a standard rate of 17-18% • Key should be ‘ Tax buoyancy without fueling inflation ’ • Multiple slabs of rates 36
Features of GST Likely Slabs Slab Goods and Services 0% Natural and unprocessed produces, national flag, basic medical services, services in present negative list, exports etc 1%-2% Gold and Silver ornaments, precious and semi- precious stones 10%-12% (Merit Rate) Goods of basic necessities (including medicines), some capital goods. Goods and Passenger transport services. 18%-20% (Standard Rate) Normal rate 40% (Demerit Rate) Cigarettes etc 37
Features of GST Understanding Inter-state Transactions Seller Charges IGST = CGST + SGST Buyer (Destination/ (Origin/Exporting Importing State) State) Centre Credit of SGST used for Credit of IGST used for payment of IGST payment of SGST 38
Features of GST ITC Rules ➢ ITC of CGST to be used for payment of CGST & IGST ➢ ITC of SGST to be used for payment of SGST & IGST ➢ ITC of IGST to be used for payment of IGST, CGST & SGST in that order 39
Features of GST Present Scenario (Inter-state trade of goods) State Tax State Tax (Y) (X) Total = RS. 16.91 VAT = Total = RS. 11 (11+0) (13.91+3) 11 Entry Tax = 3 CST = 2.42 ITC = (2.42) VAT = 13.91 Cash = 0 Car Input Consumer Dealer Manufacturer Manufacturer A B C Invoice Value = 121 CENVAT = (-) ITC CENVAT = 10 CENVAT = 10% 11 Invoice Value = 123.42 (-) ITC VAT = 11 VAT = 10% ITC = (10) (+) Entry Tax = 3 --------------------------- CST = 2% -------------------------------- Cash = 1 Cost = 100 Value Addition = 10% Cost = 126.42 ITC = Input Tax Credit Central Tax CENVAT = Total = Rs. 11 10 (10+1) TAX INVOICE B TAX INVOICE C TAX INVOICE A COST = 100 COST = 126.42 VALUE = 100 VALUE = 110 VALUE = 139.06 CENVAT = 10 CENVAT = 11 VAT = 13.91 VAT = 11 CST = 2.42 INVOICE VALUE = 152.97 INVOICE VALUE = 121 INVOICE VALUE = 123.42 40
Features of GST GST Scenario (Inter-state trade of goods) State Tax State Tax SGST = 12.1 (Y) (X) IGST = (9.9) Total = RS. 12.22 SGST = 10 Total = RS. 0 (10-10*) ------------------ (2.2+9.9**) Cash = 2.2 Car Input Consumer Dealer Manufacturer Manufacturer A B C Invoice Value = 120 Invoice Value = 132 IGST = 22 * State (X) will transfer Rs. 10 (-) ITC CGST = 10 (-) ITC_IGST = 22 CGST = (10) (SGST) used for payment of (-) ITC SGST = 10 -------------------------------- SGST = 10 IGST to centre --------------------------- Cost = 110 ---------------- ** Centre will transfer Rs. 9.9 Cash = 2 Cost = 100 CGST = 12.22 (IGST) used for payment of IGST = (12.22) Central Tax CGST = 10 SGST to State (Y) Cash = 0 Total = Rs. 12.22 (10+2+10**-9.9) TAX INVOICE C TAX INVOICE B COST = 110 TAX INVOICE A COST = 100 VALUE = 121 VALUE = 100 VALUE = 110 CGST(10%) = 12.1 CGST (10%) = 10 IGST (20%) = 22 SGST (10%) = 12.1 SGST (10%) = 10 INVOICE VALUE = 132 INVOICE VALUE = 145.2 INVOICE VALUE = 120 41
Features of GST Comparison S. No. Particulars Inter-state Present Proposed (Rs.) (Rs.) 1. Initial Cost Price 100.00 100.00 2. Centre’s Tax 11.00 12.1 3. State (X)’s Tax (Originating) 11.00 0 4. State (Y)’s Tax (Destination) 16.91 12.1 5. State’s Total Tax 27.91 12.1 6. Total Tax paid to Govt. 38.91 24.2 7. Final value paid by Consumer 152.97 145.2 Assumptions : Three levels of transactions (two manufacturing & one retail sale), each involving value addition of 10% Tax Rates assumed : CENVAT Rate = 10%; VAT Rate = 10%; CST Rate = 2%; Entry Tax = Rs. 3/- CGST Rate = 10%; SGST Rate = 10%; IGST Rate = 20% 42
GSTN GSTN (IT Backbone for GST) A Section 25 company PORTAL OWNERSHIP Center 1. Registration 24.5% - Centre 2. Return Filing 24.5% - States 3. Payment 11% - LIC Housing 4. Refunds 10% - ICICI Bank 5. Profiling 10% - HDFC 10% - HDFC Bank 10% - NSE SIC GSTN States Users 43
GSTN Harmonization of Business Autonomy of back-end systems Processes and Formats of States and Centre Common & Shared Centre/States IT IT Infrastructure Tax IT Systems Interfaces • Approval of Registration • Non-Statutory Functions Core Services Statutory Functions • Assessment – Registration • Refunds – Returns – • Audit and Enforcement Payments • Helpdesk support • Adjudication • Information on Inter-State supply • Internal workflows to support and cross-credit utilization above functions • Analytics • Recovery • IGST Settlement • Analytics and BI
GSTN State / Centre Tax Tax Authority Interface GSTN IT Systems Taxpayer IT Systems State/Centre Portal GST Common Portal API Interface GST Ecosystem Common API State / State/ Centre GST Portal Centre Interface Application Application Database Database Network of API Accounting Banks & RBI Interface Agencies & Treasuries
GSTN State/CBEC to develop their own backend modules and exchange data with GST common portal using APIs over a secured network 1 APIs Data enter State 1 19 States/UTs WAN 2 GST Common Portal + State 2 Network Backend System State n API: Application Programming Interface
Model-1 and Model-2 States List of Model-2 States List of Model-1 States States and UTs with legislature States 1 Arunachal Pradesh 1 Andhra Pradesh 2 Assam 2 Goa 3 Bihar 3 Gujarat 4 Delhi 4 Haryana 5 Himachal Pradesh 5 J & K 6 Manipur 6 Karnataka 7 Mizoram 7 Kerala 8 Nagaland 8 Maharashtra 9 Odisha 9 Meghalaya 10 Puducherry 10 Punjab 11 Tripura 11 Rajasthan 12 Uttar Pradesh 12 Sikkim 13 Uttrakhand 13 Tamil Nadu 14 Madhya Pradesh 14 Telangana 15 Chhattisgarh 15 West Bengal 16 Jharkhand UTs without Legislature CBEC 1 Chandigarh 2 Daman & Diu 3 Dadra & Nagar Haveli
Levy Levy 48
Levy Power to Levy Article 246A ◦ Both Centre and States have power to levy GST in course of intra-state trade ◦ Only Centre has power levy GST in course of interstate trade ◦ Section 7 of MGL (Model GST Law) ◦ CGST, SGST ◦ Section 4 of MGL (Model GST Law) ◦ IGST 49
Levy Incidence of Tax Tax Taxable Event Central Excise Manufacture Service Tax Provision of Service VAT Sale GST Supply 50
Levy Section 7 of MGL Section 7(1) – Charging Section ◦ CGST, SGST Section 7(2) ◦ Taxable Person Section 7(3) ◦ Reverse Charge – To be notified on the recommendations of the GST Council 51
Levy Section 4 of IGST Section 4(1) ◦ IGST Section 4(2) ◦ Taxable Person Section 4(3) ◦ Reverse Charge - To be notified on the recommendations of the GST Council 52
Levy Section 9 - Taxable Person 1. Any person required to be registered under Schedule III of the act 2. Who are NOT taxable persons? ◦ Under threshold (20 Lakhs/ 10 Lakhs) ◦ Employee in an Employee- Employer relationship ◦ Persons providing non-GST supplies ◦ Agriculturist ◦ Any person liable to pay tax under reverse charge receiving services of value not exceeding certain amount in an year for personal use alone. 3. Government bodies are taxable persons unless they are providing services mentioned under Schedule IV of the act. 53
Levy Schedule IV Services provided by a Government or local authority to another Government or local authority excluding speed post services, transport of goods etc Services provided by a Government or local authority to individuals in discharge of its statutory powers or functions such as passport, VISA, driving license etc Services provided by a Government or local authority or a governmental authority by way of healthcare, education, municipal /panchayat functions Services provided by Government towards maintenance of public order 54
Levy Section 8 - Composition Levy Section 8(1) ◦ Aggregate turn over < 50 lakhs ◦ Pay tax as a certain percentage of turnover (Not less than 1%) ◦ Not available for interstate suppliers ◦ All other taxable persons with same PAN should also opt for the same Section 8(2) ◦Can’t collect tax ◦Can’t pass on the credit Section 8(3) ◦ Penalty for misuse 55
Exemption Section 10 (1)If the Central or a State Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendation of the Council, by notification, exempt generally either absolutely or subject to such conditions as may be specified in the notification, goods and/or services of any specified description from the whole or any part of the tax leviable thereon. (2)If the Central or a State Government is satisfied that it is necessary in the public interest so to do, it may, on the recommendation of the Council, by special order in each case, exempt from payment of tax, under circumstances of an exceptional nature to be stated in such order, any goods and/or services on which tax is leviable. 56
Exemption Section 10 Shorter Exemption List. Under 100 items. The Union government is planning to prune the list of excise duty exemptions from the current 300 to the states’ list of 90 items that are exempted from value added tax . States exempt unprocessed items and those consumed by the poor, such as fruit, fresh vegetables, salt, grains like wheat and rice, besides coarse fabric such as khadi from VAT. The Centre, on the other hand, provides excise exemption for processed foods such as biscuits, butter and cheese At present, common exempted items between the Centre and states include bread (excluding pizza bread), eggs, milk, fresh vegetables, betel leaves, cereals, books, salt, and the national flag. Although the list of exempted goods and services under the GST will be a common one, items of local importance in certain states could be exempted. For instance, coconut oil in Kerala, sattu in Bihar and jute in West Bengal could get special exemptions. Area based exemptions to stay but they will now be available as refunds . 57
Registration Registration 58
Registration Types of Registrants Ecommerce Compounding Casual Regular Operator Non-resident ISD TDS Aggregator 59
Registration Registration - Clause 9 1. No Registration below Threshold (18 Lakhs. 9 Lakhs for NE and Sikkim). 2. Compounding Asssessees (Threshold turnover below 50 Lakhs). Pay Tax as a %ge (Not less than 1%) of turnover. No tax collected from Customer. No ITC claimed or passed on. Not applicable for Inter State Suppliers 3. Regular Assessees. 4. Interstate suppliers, Reverse Charge Payees ( Compulsory Registration . Can’t opt for compounding scheme) 5. Casual Dealers means a person who occasionally undertakes transactions involving supply of goods and/or services in the course or furtherance of business whether as principal, agent or in any other capacity, in a taxable territory where he has no fixed place of business; Such taxpayers would be required to self-assess their likely liability and deposit the same as an Advance Tax (Generally for 90 days). Such amount would be deposited to his electronic cash ledger. Compulsory Registration . 6. Non Resident Taxpayer means a taxable person who occasionally undertakes transactions involving supply of goods and/or services whether as principal or agent or in any other capacity but who has no fixed place of business in India . Same as casual dealers in other matters. Compulsory Registration . 60
Registration Aggregate Turnover Includes * Excludes All taxable and non-taxable supplies Reverse Charge Supplies Exempt supplies Inward Supplies Exports * For the same PAN to be computed on an all India basis and excludes taxes charged under CGST, SGST, IGST acts. 61
Registration Compulsory Registration (Schedule III) Liability to be registered irrespective of threshold Persons making inter-State taxable supply Persons required to pay tax under reverse charge Casual and non-resident taxable persons Persons who supply goods and/or services on behalf of other registered taxable persons whether as an agent or otherwise, E-Commerce operator Persons who supply goods through e-commerce operator An aggregator who supplies services under his brand name Input Service Distributor Persons required to deduct tax at source 62
Registration Features of Registration (1/4) 1. All existing registrants (under state or centre) to get a Provisional GSTIN by default. 2. ISDs to apply afresh. 3. New Registrants to apply within 30 days of liability. 4. New Regn to be given in 3 days if no Objection is raised by Centre/State. If query raised, party to reply within 7 days. Thereafter , authorities have 7 more days. PV comes later based on risk profile. 5. One regn per state. Multiple regns in a state allowed for different business verticals 63
Features of Registration (2/4) 5. Structure of GSTIN State PAN Code Entit Bla Chec Code y nk k Code Digit 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Entity Code: 1-9 followed by A-Z. Means 35 Combinations. 64
Registration Features of Registration (3/4) 6. Assessee should be able to submit one appln for all regns within and outside the state 7. Dig Cert (DSC) allowed. If no DSC, signed copy of summary reg sheet to be sent to the CPC. 8. If either of the authorities cancel the reg, the whole regn is cancelled. Regn to be cancelled through a speaking order 9. Documents to be submitted: Constitution of business, Principal place of business, Bank Account, Photograph, Details of authorized signatory 65
Document required to be uploaded Constitution of Business No documents are required in case of proprietors and companies (Verification through PAN/Company Identification Number through MCA 21). Partnership Deed in case of partnership firm and Registration Certificates in case of society, trust etc. as details are not captured in PAN. Principal Place of business Own premises – any document in support of the ownership of the premises like Latest Tax Paid Receipt or Municipal Khata copy or Electricity Bill copy. Rented or Leased premises Consent Letter, duly notarized, obtained from the Lessee of the premises, where the main lease allows sub-lease. In the absence of consent letter, rent receipt in respect of the relevant premises may be accepted with ownership proof of the property. Where ownership proof is not available, proof of possession by certain prescribed documents (such as Certificate issued under Shop and Establishment Act, electricity bill, telephone bill, bank account showing address proof, etc.) would suffice. An affidavit in a prescribed format may be taken along with any of the other documents mentioned above where ownership proof or lease agreement is not available. Details of Bank Account (s) Any documents that contain the details like the Account No., Name of the Account Holder, MICR and IFS Codes and Branch details. This can include documents like (a) self-certified copy of the online banking details; (b) bank statement / cancelled cheque; (c) Also certificate issued by concerned Bank. Required for all the bank accounts through which the taxpayer would be conducting business. Details of Authorised Signatory Letter of Authorisation and copy of Resolution of the Managing Committee or Board of Directors to that effect. Required to verify whether the person signing as Authorised Signatory is duly empowered to do so. 66
Registration Features of Registration (4/4) 10. Registration may be cancelled either on the volition of the Officer or by an application of the registrant. Not started business within 6 months of regn/ Not filed returns for a continuous period of 6 months. Cancellation to be done according to PNJ. Taxpayer to furnish a ‘Final return’along with the Cancellation Application. 11. Cancellation will not impact recovery of dues even if the dues are ascertained after cancellation. 12. There is a provision for revocation of cancellation of registration in cases where the registration is cancelled unilaterally by the officer. 13. Cancellation under CGST act is a cancellation under the SGST act and vice-versa 14. UN bodies/ Embassies to get UIN. 67
Registration Existing Registrant Prov. Regn Submit Yes Existing Granted to (GST REG 20) Registrant Existing Registrant Within 6 months Liable? (GST REG 21) No Yes Apply for RC Granted Proper Cancellation (GST REG Officer (GST REG 24) 06) Satisfied? No Yes SCN No Prov. Registration (GST Cancelled REG (GST REG 22) 23) 68
Registration New Registrant RC Granted Apply in Yes Proper (GST REG 06) (GST REG 01) Officer Within 3 working Acknowledgement satisfied? days (GST REG 02) No Notice for Addl. Application RC Granted Info rejected (GST REG (GST REG 03) (GST REG 05) 06) No Yes Proper Addl. info Officer submitted satisfied (GST REG 04) ? 69
Registration Effective Date of Registration Effective date of registration shall be date of liability, if the application for registration is filed within 30 days from the date on which the taxpayer becomes liable to pay tax. Else it is date of registration. The ITC on inputs held in stock will be permitted only if the taxpayer has applied for registration within 30 days from the date he became liable for registration As per section 27A, a person is required to file the first return for a period starting from date of liability till last date of the tax period in which the registration has been granted. As per proviso to section 23, new registrant would be permitted to issue the revised tax invoices in lieu of the invoices already issued during the intervening period i.e. the period from date of liability till the date of grant of registration. 70
Registration Penalty for not Registering He shall be liable to a penalty of: Rs. 10,000/- or an amount equivalent to the tax evaded or the tax not deducted or short deducted or deducted 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. 71
Registration Cancellation of Registration Due to cancellation of registration, taxable person shall pay by way of debit in the electronic credit or cash ledger (a) In case of inputs: (1) an amount equivalent to the credit of input tax in respect of: (i) inputs held in stock and (ii) inputs contained in semi-finished or finished goods held in stock or the output tax payable on such goods whichever is higher, calculated in the manner prescribed in the rules (b) In case of capital goods: (1) an amount equal to the input tax credit taken on the said capital goods reduced by the percentage points as may be prescribed in this behalf or the tax on the transaction value of such capital whichever is higher. 72
Registration 73
Returns 75
Returns Returns 1. 11 returns in total GSTR1 to GSTR11 2. GSTR1 – Statement of Outward Supplies (By 10 th ) 3. GSTR2 – Statement of Inward Supplies (By 15 th ) 4. GSTR3 - Monthly Return (By 20 th ). Payment also by 20th 5. GSTR4 – Quarterly Return for Compounding Taxpayer (By 18 th ) 6. GSTR5 – Non Resident Foreign Taxpayer (Monthly basis by 20th of the month succeeding tax 7. period & within 7 days after expiry of registration) GSTR6 – ISD (By 13 th ) 8. 9. GSTR7 – TDS (By 10th) GSTR8 – TCS/Ecommerce (By 10 th ) 10. GSTR9 – Annual (By 31 st Dec of next Financial Year) 11. 12. GSTR10 – Final Return GSTR11 – Statement of Inward Supplies by UIN (By 28 th ) 13. 76
Returns Returns 1. GSTR2A is auto-drafted from GSTR1 GSTR2A 2. GSTR2 is prepared based on GSTR2A 3. Any invoices added to GSTR2 will get reflected in GSTR1 GSTR2 GSTR1A 4. If Supplier accepts changes as reflected in GSTR1A, his GSTR1 is amended to that GSTR1A effect 77
Returns Returns • GSTR3 will be auto-populated using information from GSTR1 and GSTR2 (Auto Matching), GSTR6(ISD), GSTR7(TDS), ITC Ledger, Cash Ledger • Definite increase in number of returns to be filed. 78
Returns • Easy upload tools • Periodical Uploading • Filed By 10th GSTR1 • Frozen after 10th • Auto-populated • Edits between 10th and 15th • Filed By 15th GSTR2 • Between 15th and 17th • Supplier to accept additional invoices Reconciliation • Auto-populated based on GSTR1 and GSTR2 • Filed by 20th GSTR3 79
Returns S1 S2 S3 S4 GSTR1 GSTR1 GSTR1 GSTR1 B B GSTR1 GSTR2 (Total Tax Liability) (ITC Available) • e Tax Liability Ledger • e Credit Ledger B • e Cash Ledger GSTR3 (Cash to be paid = Total Tax Liability – ITC Available) 80
Returns ITC Matching and Auto-reversal • Provisional acceptance of ITC • De-duplication Check Duplicate claim added to the buyer’s next return’s output liability • Mismatch More credit is claimed than what is shown in the invoice Credit is claimed on an invoice not uploaded by the supplier Supplier can accept liability in the next return period Claim added to buyer’s next return’s liability (2 Months) • Reclaim of reversal 81
Returns Short Filers • Return without full payment of tax will be allowed to be uploaded but it will be treated as an invalid return and this return will not be used for matching of invoices and settlement of funds. • Any invalid return (including the one not supported by full payment) will merely be recorded with unique transaction ID, but not accepted in the system, and that aspect will be made known to the taxpayer at the time of communicating the ID itself. 82
Payment Payment 1. Payment through authorized banks only. 2. No Manual Challans. All challans to be digitally generated through the GST portal. 3. RBI to play the role of aggregator through its e-Kuber System. Receive all the amounts from the authorized banks and then debit their accounts and credit Govt accounts. 4. Payment to be made via DC/CC or OTC(Cheque/DD/Cash) at authorized banks for payments upto Rs 10,000 only or NEFT/RTGS 84
Refunds 85
Refunds Refunds (1/2) 1. Excess payment of tax due to mistake or inadvertence. 2. A taxable person who has paid IGST/CGST/SGST mistakenly as an Interstate/intrastate supply, but the nature of which was subsequently clarified, then, upon payment of CGST and SGST in the appropriate State or IGST, he shall be allowed to take refund of the tax paid under the mistaken head 3. Export (including deemed export) of goods / services under claim of rebate or Refund of accumulated input credit of duty / tax when goods / services are exported. 4. Finalization of provisional assessment. 5. Refund of Pre – deposit for filing appeal including refund arising in pursuance of an appellate authority’s order (when the appeal is decided in favor of the appellant). 6. Payment of duty / tax during investigation but no/ less liability arises at the time of finalization of investigation / adjudication. 86
Refunds Refunds (2/2) 7. Refund of tax payment on purchases made by Embassies or UN bodies. 8. Credit accumulation due to inverted duty structure i.e. due to tax rate differential between output and inputs. 9. Year-end or volume based incentives provided by the supplier through credit notes. 10. Tax Refund for International Tourists. 11. Refund application to be filed within 2 years from the relevant date. 12. Refunds to be granted within 90 days 13. No refund shall be granted if the amount is less that Rs.1000/-. 14. For certain categories of assessees, in case of exports, 80% refund to be given on provisional basis. 20% after verification. 87
Demands, Litigation 88
Litigation Demands 1. The proper officer shall issue the order under within three years from the due date or the actual date, whichever is earlier, for filing of annual return for the year to which the tax not paid or short paid or input tax credit wrongly availed or utilized relates or, as the case may be, within three years from the date of erroneous refund. (No fraud) 2. The proper officer shall issue the order within a period of five years from the due date or the actual date, whichever is earlier, for filing of annual return for the year to which the tax not paid or short paid or input tax credit wrongly availed or utilized relates or, as the case may be, within five years from the date of erroneous refund. (In case of fraud) 89
Litigation Penalty 1. In non fraud cases: • Before issuance of SCN – 0% • Within 30 days of issuance of SCN – 0% • Beyond – 10% In fraud cases: 1. • Before issuance of SCN – 15% • Within 30 days of issuance of SCN – 25% • Within 30 days of Adjudication Order – 50% • Beyond – 100% 90
Litigation Appeals and Revision Provisions are slightly different in CGST and SGST laws. Appeal to Supreme Court Appeal to High Court Appeal to SGSAT Revisional Powers of C-SGST Appeal to FAA Adjudication / Demand 91
Litigation 1. On an appeal by Party or the CGST authorities (Based on review order by Commissioner, GST) 2. Should be filed within 3 months. Grace period of one month on showing sufficient FAA cause. 3. Pre-deposit of 10% of Amount in dispute is mandatory. 4. Should ideally hear and decide the case within one year where it is possible to do so. 5. SGST Variation: In serious cases (Amt >=25 Cr + Good Case), pre-deposit demanded can Adjudication go upto 50% of amount in dispute 6. SGST Variation: Orders passed by authorities subordinate to Commissioner, SGST are Authority subject to revisional powers of Commissioner. 92
Litigation Revisional Powers 1. Commissioner, SGST can enhance/modify/annul an order passed by his subordinate if he considers it erroneous and prejudicial to the interest of revenue. 2. The order shouldn’t have already been appealed. 3. More than 3 years shouldn’t have passed since the order was passed 93
Litigation NGSAT – National Goods and Services Appellate Tribunal SGSAT Member Member Member(J) (T-CGST) (T-SGST) 94
Litigation 1. Based on an appeal by Party or the CGST authorities (Review Order by Committee of 2 designated officers of CGST) 2. Should be filed within 3 months. Can be SGSAT extended on showing sufficient cause. 3. NGSAT can refuse to admit an appeal if the tax involved is less than 1 lakh. 4. Pre-deposit of 10% of Amount in dispute is mandatory (Is this in addition to any pre- deposit paid in a previous appellate forum?) 5. Should ideally hear and decide the case within one year where it is possible to do so. FAA 6. SGST Variation: In serious cases (Amt >=25 Cr + Good Case), pre-deposit demanded can go upto 50% of amount in dispute. 95
Litigation HC 1. Should be filed within 180 days. Can be extended on showing sufficient cause. 2. Total Sums due payable. 3. No appeal lies with HC if • 2 or more states / state and centre have difference of opinion with regards to SGSAT treatment of a transaction being intra- state or inter-state or place of supply. 4. At lease a 2 judge bench. 96
Litigation SC 1. Total Sums due payable. 2. HC should certify it as fit for appeal on its own volition or on an oral application made by the party. HC/SGSAT 97
Input Tax Credit 98
ITC ITC means credit of input tax " input tax " in relation to a taxable person, means the {IGST and CGST}/{IGST and SGST} charged on any supply of goods and/or services to him which are used, or are intended to be used, in the course or furtherance of his business and includes the tax payable under sub-section (3) of section 7 (Reverse Charge) . Provisions similar to CENVAT Credit Rules 99
Capital Goods (Credit in one Go) “capital goods” means: - (A) the following goods, namely:- (i) all goods falling within Chapter 82, Chapter 84, Chapter 85, Chapter 90, heading 6805, grinding wheels and the like, and parts thereof falling under heading 6804 of the Schedule to this Act; (ii) pollution control equipment; (iii) components, spares and accessories of the goods specified at (i) and (ii); (iv) moulds and dies, jigs and fixtures; (v) refractories and refractory materials; 100
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