Additional Agenda Item 1 - GST Compensation Bill - Approval of ceiling rate of cess & some consequential changes 12th GST Council Meeting

Agenda Note for amendments to draft Goods and Services Tax (Compensation to the
States) Bill, 2016.
The GST Council in its 10th Meeting held on 18 February 2017 at Udaipur had approved the
draft Goods and Services Tax (Compensation to the States) Bill, 2017. Thereafter, the GST
Council in its 11th Meeting held on 4 March 2017 recommended the draft Central Goods and
Services Tax Bill and Integrated Goods and Services Tax Bill.
2. In light of the final draft of Central Goods and Services Tax Bill and Integrated Goods and
Services Tax Bill recommended by the GST Council and for incorporating decisions of GST
Council, certain consequential changes have been incorporated in the draft Goods and Services
Tax (Compensation to the States) Bill, 2017. Further to provide for ceiling of rate for
imposition of cess on supply of goods and services, changes have been made in Section 8 of
the draft Bill.
3. The Council may consider and approve the amendments in draft Goods and Services Tax
(Compensation to the States) Bill, 2017.

Additional Agenda Item 1 - 12th GSTCM
2(l) “State” shall include –
(i) for the purposes of sections 3, 4, 5, 6 and 7, the States as defined under the
Central Goods and Services Tax Actand the Union territories with
Legislature mentioned in the First Schedule to the Constitution; and
(ii) for the purposes of sections 8, 9, 10, and 11, , 12, 13 and 14 the States as
defined under the Central Goods and Services Tax Act, and Union
territories defined under the Union Territories Goods and Services Tax Act;
7. CALCULATION AND RELEASE OF COMPENSATION.
(3)(b) the actual revenue collected by a State in any financial year during the transition
period would be the actual revenue from State tax collected by the State and net of refunds
given by the said State under Chapters XI and XXVII of the State Goods and Services Tax
Act, the integrated goods and services tax apportioned to that State, and any collection of
taxes on account of the taxes levied by the respective State under the Acts specified in subsection (4) of section 5, net of refunds of such taxes, as certified by the Comptroller and
Auditor General of India;
the actual revenue collected by a State till the end of relevant two months period in any
financial year during the transition period would be the actual revenue from State tax
collected by the State, net of refunds given by the State under Chapters XI and XXVII of the
State Goods and Services Tax Act, the integrated goods and services tax apportioned to that
State, as certified by the Principal Chief Controller of Accounts of the Central Board of
Excise and Customs, and any collection of taxes on account of the taxes levied by the
respective State under the Acts specified in sub-section (4) of section 5, net of refunds of
such taxes;
8. LEVY AND COLLECTION OF CESS.
(1) There shall be levied a cess on such intra-State supplies of goods or services or both, as
provided for in section 97 of the Central Goods and Services Tax Act, and such interState supplies of goods or services or both as provided for in section 5 of the Integrated
Goods and Services Tax Act, and collected in such manner as may be prescribed, on the
recommendations of the Council, for the purposes of providing compensation to the
States for loss of revenue arising on account of implementation of the goods and services
tax with effect from the date from which the provisions of Central Goods and Services
Tax Act is brought into force, for a period of five years or for such period as may be
prescribed on the recommendation of the Council:
Additional Agenda Item 1 - 12th GSTCM
Provided that no such cess shall be leviable on supplies made by a taxable person who has
decided to opt for composition levy under section 108 of the Central Goods and Services
Tax Act.
(2) The cess shall be levied on such supplies of goods or services as are specified in column
(2) of the Schedule to this Act, on the basis of value, quantity or on such basis as may
be recommended by the Council, at such rate not exceeding the rate set forth in the
corresponding entry in column (4) of the Schedule___ per cent as may be notified by as
the Central Government may by notification in the Official Gazette specify:
Provided that where the cess is chargeable on any supply of goods or services or both
with reference to their value, for each such supply the value shall be determined under
section 15 of the Central Goods and Services Tax Act for all intra-State and inter-State
supply of goods or services or both:
Provided further that the cess on goods imported into India shall be levied and collected in
accordance with the provisions of section 3 of the Customs Tariff Act, 1975 at the point when
duties of customs are levied on the said goods under section 12 of the Customs Act, 1962, on
a value determined under the Customs Tariff Act, 1975.
10. CREDITING PROCEEDS OF CESS TO FUND.
The proceeds of the cess leviable under section 8 and such other revenues amounts as may be
recommended by the Council, shall be credited to a non-lapsable Fund known as the Goods
and Services Tax Compensation Fund, which shall form part of the public account of India
and shall be utilized for purposes specified in the said section

Additional Agenda Item 1 - 12th GSTCM
THE SCHEDULE
Notes
1. In this Schedule, reference to a “tariff item”, “heading”, “sub-heading” and “Chapter”,
wherever they occur, shall mean respectively a tariff item, heading, sub-heading and Chapter
in the First Schedule to the Customs Tariff Act, 1975 (Act No.51 of 1975)
2. The rules for the interpretation of the First Schedule to the Customs Tariff Act, 1975
(Act No.51 of 1975), the Section and Chapter Notes and the General Explanatory Notes of the
First Schedule shall, so far as may be, apply to the interpretation of this Schedule.
S.
No.
Description of supply Tariff item,
heading, subheading,
Chapter, of
goods or
service, as the
case may be
The maximum rate at
which GST
Compensation Cess
may be collected
(1) (2) (3) (4)
1. Pan Masala 2106 90 20 135% ad valorem
2. Tobacco and manufactured tobacco
substitutes, including tobacco products
24 Rs.4170 per thousand
sticks or 290% ad
valorem or a combination
thereof
3. Coal; briquettes, ovoids and similar solid
fuels manufactured from coal; Lignite,
whether or not agglomerated, excluding jet;
Peat (including peat litter), whether or not
agglomerated
2701, 2702 or
2703
Rs.400 per tonne
4. Waters, including mineral waters and
aerated waters, containing added sugar or
other sweetening matter or flavoured
2202 10 15% ad valorem
5. Motor cars and other motor vehicles
principally designed for the transport of
persons (other than motor vehicles for the
transport of ten or more persons, including
the driver), including station wagons and
racing cars
8703 15% ad valorem
6. All other supplies 15% ad valorem
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1
Seamless Connectivity - MoRTH
Additional Agenda Item: Constitution of a Task Force to suggest measures for creating an ecosystem for seamless freight movement (Based on agenda note received from MoRTH)
1. Road transport sector is responsible for about 65% of the total freight volume. The contribution of road
transport sector to the GDP is estimated at 4.8% (2011-12). The sector suffers from archaic rules and
arbitrary exercise of powers by enforcement authorities. These checks take place at state borders as well
as on road at random. Despite improvement in road conditions the average mileage of vehicles has
remained almost stagnant over the years due to long stoppages. According to a study conducted by IIM,
Calcutta, the estimated loss to the economy on account of these delays is estimated at 6.6 USD Billion.
There is an additional cost due to additional fuel consumption also.
2. In depth analysis of the problems at border check posts has revealed that the delays are mainly caused
due to physical checking/ documentation requirement by Commercial Tax and Transport Department of
the States.
3. The difference in processes adopted and the infrastructure present at different States leads to a huge
variation in the time taken to cross inter-state border check posts. For instance, some states such as
Maharashtra, Rajasthan and Haryana have removed physical check posts on key freight routes and have
adopted risk based verification through flying squads, resulting in negligible time loss at the interstate
border check posts in these states.
4. In most of the check posts, while 100% of the vehicles are verified, the number of vehicles detained
with non-compliant documentation is less than 1% as seen in a study instituted by the Ministry of Road
Transport and Highways (MoRTH). This highlights the case for shifting to a risk based verification process.
5. Such random as well regular checks reduce the efficiency of road transport considerably. According to
a study conducted by AT Kearney, the average waiting time for the trucks for documentation checks is to
the extent of 10% of the total driving time. There are 20 agencies of the State and Central Governments
who have powers to inspect and check the goods transport vehicles plying on road. They are listed as
undera. R.T.O of All States enroute.
b. VAT Officials of All States enroute.
c. Custom Officials.
d. Police Officials of All States enroute.
e. Central Excise Officials.
f. Income tax department
g. Food Safety Authority Under FSSAI.
h. Octroi Officials of States.
i. Pollution Control Authority
j. Weight and Measures Authority
Additional Agenda Item 2 - Seamless Freight Movement Agenda for 12th GSTCM
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Seamless Connectivity - MoRTH
k. Forest Department Officials
l. State Excise Officials.
m. Department of Revenue Intelligence.
n. Toll Gates for Collection NH/STATES & Municipal Corporations
o. Tax collections in Cantonment areas
p. Entry Tax Collection in Some States.
q. District Supply Office Check Post
r. Movement of Essential Commodities.
s. Checking for Black Marketing.
t. Checking for Hazardous Chemicals
6. The waiting time at toll plazas also leads to considerable delays. The issue of toll is being addressed to
by roll out of RFID based fastag system for e-tolling. This would soon be able to put an end to the waiting
time at toll plazas.
7. The e-way bill proposed under GST regime will facilitate seamless transport from commercial tax
department’s point of view. However, the transport documentation checks, if continued, will not yield
desired results for achieving seamless and barrier free freight transport across the country. There is a
possibility of utilizing ‘Vahan’ database of MoRTH and use its vehicle registration number database for
generating e-way bills by GSTN. Further, The RFID tags installed on the vehicles can be utilized for
establishing identity of the vehicles. The effort will be to minimize the need for physical check and to
eliminate the check posts.
8. It is therefore suggested that a Task Force of officers from Finance and Transport departments of some
States and MoRTH and DOR, may be constituted to examine the issue of creating an eco-system for
seamless freight movement. The Task Force’s report can be considered by the GST Council. Subsequently,
if required, a joint meeting of Finance Ministers and Transport Ministers of States may be called to discuss
the report and adopt a formal resolution to support seamless road connectivity.
9. In view of the above, the GST Council may deliberate on the issue and consider constituting a Task
Force of officers of the transport and tax departments of the Central and State governments to suggest
measures to achieve the objective of seamless transport connectivity.
Additional Agenda Item 2 - Seamless Freight Movement Agenda for 12th GSTCM
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CONFIDENTIAL
Draft Minutes of the 11th GST Council Meeting held on 4th March 2017
The eleventh meeting of the GST Council (hereinafter referred to as ‘the Council’) was held on 4
March 2017 in Vigyan Bhavan, New Delhi under the Chairpersonship of the Hon’ble Union
Finance Minister, Shri Arun Jaitley. The list of the Hon’ble Members of the Council who attended
the meeting is at Annexure 1. The list of officers of the Centre, the States, the GST Council and the
Goods and Services Tax Network (GSTN) who attended the meeting is at Annexure 2.
2. The following agenda items were listed for discussion in the eleventh meeting of the Council –
1. Confirmation of the Minutes of the 10th GST Council Meeting held on 18 February 2017
2. Approval of the Draft Central Goods and Services Tax (CGST) Law as modified in
accordance with the decisions of the GST Council and as vetted by the Ministry of Law &
Justice, Government of India
3. Approval of the Draft Integrated Goods and Services Tax (IGST) Law as modified in
accordance with the decisions of the GST Council and as vetted by the Ministry of Law &
Justice, Government of India
4. Development of an e-Waybill System by Goods and Services Tax Network (GSTN)
5. Date of the next meeting of the GST Council
6. Any other agenda item with the permission of the Chairperson
3. In his opening remarks, the Hon’ble Chairperson welcomed all the Members of the Council and
thereafter invited discussion on the listed agenda items.
Discussion on Agenda Items
Agenda Item 1: Confirmation of the Minutes of the 10th GST Council Meeting held on 18
February, 2017:
4. The Hon’ble Chairperson invited comments of the Members on the draft Minutes of the 10th
Meeting of the Council (hereinafter called the ‘Minutes’) held on 18 February 2017 before its
confirmation. The Members suggested the following amendments to the draft Minutes.
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4.1. The Hon’ble Minister from West Bengal stated that in paragraph 4.1.1, the word ‘above’ in the
second sentence of his recorded version should be replaced by the word ‘below’. The Council
agreed to this suggestion.
4.2. The Hon’ble Minister from West Bengal highlighted that four issues recorded in the Minutes,
had to be brought back to the Council for decision, namely: (i) carve out of export and import
functions exclusively for the Central administration (recorded in paragraph 4.19 of the Minutes); (ii)
to deem supplies to territorial waters as intra-State supply (recorded in paragraph 4.21 of the
Minutes); (iii) to allow the benefit of the Composition scheme to restaurants, which was a supply of
service (recorded in paragraph 8.4.3 of the Minutes); (iv) to examine the provision in Model GST
Law for matching annual GST return of the taxpayer with his annual financial statement (recorded
in paragraph 9.2.2 of the Minutes). The Secretary to the Council (hereinafter referred to as
‘Secretary’) responded to each of the above issues. He stated that in respect of issue raised at (i)
above, as the Law Committee of Officers (hereinafter referred to as ‘the Law Committee’) was preoccupied in completing the drafting and correction of the CGST and IGST Law, it could not
deliberate on this subject and that the issue would be brought before the Council after the Law
Committee’s deliberation. On the issue raised at (ii) above, he stated that Section 9 of the IGST Law
contained a formulation on the lines suggested by the Hon’ble Minister from Karnataka and that this
addressed all the concerns of the coastal States. On the point raised at (iii) above, he informed that
the Law Committed had incorporated a suitable formulation in Section 10(1) of the CGST Law. On
the point raised at (iv) above, he stated that, if needed, this issue would be addressed in the relevant
GST Rules.
4.3. The Hon’ble Chief Minister of Puducherry stated that in the last Council meeting, the Hon’ble
Minister from Karnataka had referred to supply of goods by restaurants. He observed that while a
restaurant only supplied food, another connected feature was hotels offering accommodation and
giving restaurant service. The Secretary stated that restaurants with annual turnover upto Rs. 20 lakh
would be exempt from GST, while those with annual turnover between Rs. 20 lakh and Rs. 50 lakh
would be covered under the Composition scheme. He added that hotels providing accommodation
and restaurant service would normally have an annual turnover of more than Rs. 50 lakh and would
thus pay GST at the normal rate. The Hon’ble Chief Minister of Puducherry stated that presently in
his Union Territory, restaurants were charged to tax at the rate of 2% and observed that the proposed
tax rate of 5% was on the higher side.
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4.4. Shri P. Mara Pandiyan, Additional Chief Secretary (Taxes), Kerala stated that in paragraph
9.2.2. of the Minutes, the Hon’ble Minister of Kerala had raised the issue of having a legal provision
for matching the annual GST return of a taxpayer with his annual Income Tax return. The Secretary
stated that such provision of matching could not be part of the law as it would go against the
provision of Section 138 of the Income Tax Act which prohibited the Income Tax department to
share income tax return of a person with anyone else. The Hon’ble Chairperson added that sharing a
person’s Income Tax return with anyone else was a prosecutable offence under Section 138 of the
Income Tax Act. The Secretary observed that keeping in view such sensitivity, it was decided that
annual financial statement could be used for matching as this also contained the declaration of a
person’s income. The Hon’ble Minister from West Bengal stated that his State had recently
amended the VAT Law and it now provided that the audit report prepared under the Income Tax
law would be sufficient compliance for the audit report required under the VAT Law. The Council
agreed not to change the decision recorded in paragraph 9.2.2. of the Minutes.
4.5. The Hon’ble Minister from Uttar Pradesh pointed out that in paragraph 10.1.1. (iv) of the
Minutes, it was recorded that retired officers shall be eligible for appointment as Technical Member
(State) in Appellate Tribunal whereas as per their understanding, the same provision would also
apply for the appointment of Technical Member (Centre). He suggested that the decision recorded
in this paragraph should be amended to read as follows: “Retired officers shall be eligible for
appointment as Technical Member (State) as well as Technical Member (Centre) in the Appellate
Tribunal.” The Council agreed to this suggestion.
5. In view of the above discussion, for Agenda item 1, the Council decided to adopt the Minutes of
the 10th Meeting of the Council with the changes as recorded below:
5.1. In paragraph 4.1.1 of the Minutes, to replace the word ‘above’ with the word ‘below’ in the
second sentence recording the version of the Hon’ble Minister from West Bengal.
5.2. To replace the decision recorded in paragraph 10.1.1.(iv) of the Minutes, with the following:
‘Retired officers shall be eligible for appointment as Technical Member (State) as well as Technical
Member (Centre) in the Appellate Tribunal’.
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Agenda Item 2: Approval of the Draft CGST Law as modified in accordance with the
decisions of the GST Council and as vetted by the Ministry of Law & Justice, Government of
India:
6. Introducing this agenda item, the Secretary informed that the draft CGST Law was discussed in a
meeting with officers from the Centre and the State convened by him on 3 March 2017 and that as
per inputs received in the meeting, ten more amendments were incorporated in the draft CGST Law
and hard copies of the same were circulated to the Members before the meeting. He requested that
the Members might also offer comments on these suggested amendments while discussing the draft
CGST Law circulated as an agenda note for this meeting.
6.1. The ten amendments circulated during the meeting of the Council on 4 March 2017 are listed
below (the changes are indicated in bold and italics and in strikethrough mode):
i. Issue No. 1
Section 2 – (a) (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) of section 2;
Note: Clauses (81) to (119) to be consequently renumbered and other consequential
changes (referencing) to be carried.
ii. Issue No. 2
Section 109(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 hundred thousand 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.
iii. Issue No. 3
Section 110(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 re-appointment.
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iv. Issue No. 4
Section 118(1) - An appeal shall lie to the Supreme Court-
(a) from any order passed by the National Bench and or Regional Benches of the Appellate
Tribunal; or
v. Issue No. 5
Section 129(1) – (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 in such form as
may be prescribed equivalent to the amount payable under clause (a) or clause (b):
vi. Issue No. 6
Section 67(2) – Provided that where it is not practicable to seize any such goods, the proper
officer, or any officer authorized by him, may serve on the owner or the custodian of the
goods an order that he shall not remove, part with, or otherwise deal with the goods except
with the previous permission of such officer:
vii. Issue No. 7
Section 67(9) – Where any goods, being goods specified under sub-section (8), have been
seized by a proper officer, or any officer authorized by him, under sub-section (2), he shall
prepare an inventory of such goods in the manner as may be prescribed.
viii. Issue No. 8
Section 168 – Explanation.–– For the purposes of this section, the Commissioner specified
in sub-section (90) of section 2, sub-section (3) of section 5, clause (b) of sub-section (9) of
section 25, sub-section (1) of section 37, sub-section (2) of section 38, sub-section (6) of
section 39, sub-section (1) of section 151, 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.
ix. Issue No. 9
Schedule I:
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.
Schedule III:
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4. Services by a foreign diplomatic mission located in India or any specialized agency of
the United Nations Organization or any Multilateral Financial Institution and
Organization notified under the United Nations (Privileges and Immunities) Act, 1947.
(To be handled through notification)
x. Issue No. 10 –
Section 19 – Tax wrongfully collected and paid to Central Government or State
Government.
(1) A registered person who has paid integrated tax on a supply considered by him to be an
inter-state supply, but which is subsequently held found to be an intra-State supply, shall, be
granted refund of the amount of integrated tax so paid in such manner and subject to such
conditions as may be prescribed.
6.2. Shri Upender Gupta, Commissioner (GST Policy Wing), Central Board of Excise & Customs
(CBEC) broadly explained the changes made in the CGST Law between the draft of 26 November
2016 (which was the most recent version of the Draft Laws put in public domain) and the draft of 1
March 2017 presented as an Agenda Note for the 11th Meeting of the Council. These broad changes
are recorded in Annexure 3 and were circulated to the Council members during the meeting.
6.2.1. On the issue of change in the legal scheme of Advance Ruling Authority, i.e. to be constituted
under the State Act instead of the earlier scheme of being constituted under the Central Act, the
Hon’ble Chairperson enquired as to how the State Laws would ensure uniformity across the States.
The Hon’ble Minister from Karnataka stated that the Advance Ruling Authority gave its Ruling on
case-by-case basis and it would not apply across the State boundaries. He suggested that the power
to give Advance Ruling should be kept at officer’s level. The Chairperson observed that there might
be some need for conformity and uniformity of Rulings and that in case of any conflict, the Court
could resolve it.
6.2.2. The Hon’ble Minister from Uttar Pradesh stated that it was patently unfair to charge interest
at the rate of 18% and 24% from the taxpayer for late payment of tax under Section 50 of the draft
CGST Law but the Government was required to pay interest only at the rate of 6% for delayed
refund under Section 56 of the draft CGST Law. He observed that for late payment of refund, there
should be a higher interest liability on the Government at par with what the taxpayer was liable to
pay. The Hon’ble Chairperson cautioned that the Government’s liability for interest payment should
not be too high. The Secretary informed that even at the current rate of 6%, the Government’s
liability to pay interest for late refund of Income Tax during the last financial year was Rs. 7,000
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crore and added that a cautious approach was required with regard to the Government’s interest
liability. The Hon’ble Minister from Uttar Pradesh observed that this additional burden of Rs. 7,000
crore on the Government was due to its own laxity and by giving refund more promptly, the
Government could save Rs. 7,000 core. The Hon’ble Chairperson observed that in the Income Tax
Department, the entire tax administration had become online and refunds were being processed
much faster and that the smaller amounts of refund were paid online whereas the larger amounts
were paid by cheque and sent by post under intimation to the assessee. He observed that despite
such improvement, it should be kept in mind that there could be delays due to Governmental
procedure and that a higher rate of interest for delayed refund would cause considerable financial
burden on the finances of the States as well.
6.2.3. The Hon’ble Minister from West Bengal stated that in his State, 90% of the self-declared
refund claim was given automatically and only 10% was held back for checking for any violation.
He informed that his State gave interest at the rate of 6.5% for delayed refund and added that the
Council could deliberate further on this issue. The Hon’ble Minister from Uttar Pradesh suggested
that if refund was not paid within 3 to 4 months of filling the claim, a higher rate of interest should
be paid by the Government. The Commissioner (GST Policy Wing), CBEC informed that the clause
of interest payment for delayed refund applied when the refund was paid beyond a period of 60 days
from the date of filling the application whereas a taxpayer was required to pay interest only after 90
days of confirmation of the tax demand by the assessing officer. He also informed that the rate of
interest paid by the Government was linked to its cost of borrowing which was around 6%. Shri
Ritvik Pandey, CCT, Karnataka stated that the interest was also payable for refund of pre-deposit
paid at the appellate stage. CCT, Gujarat observed that the taxpayer would have collected the
amount equivalent to the tax from the buyer and therefore, he was not entitled to keep this amount.
He cautioned that for taxpayers, fixing an interest rate below the prevailing bank rate, would lead to
indiscipline.
6.2.4. The Hon’ble Chief Minister of Puducherry stated that the Government machinery should be
given a better leverage in regard to payment of interest and that 6% rate of interest was reasonable.
The Hon’ble Chairperson stated that sometimes a State Government might not be able to pay refund
to a taxpayer due to certain public interest considerations like drought in the State but the
considerations of a taxpayer would be different. The Hon’ble Minister from Uttar Pradesh
responded that the taxpayer might also fail to pay tax due to certain unforeseen circumstances like
an illness in the family or a fire in his godown and that taxpayers facing such difficulty deserved to
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be given some concession. The Hon’ble Deputy Chief Minister of Delhi supported the view of the
Hon’ble Minister from Uttar Pradesh. The Hon’ble Minister from West Bengal observed that the
optimal level of interest rate should be 18% and that an interest rate of 24% was too high.
6.2.5. The Hon’ble Minister from Uttar Pradesh stated that it was desirable to maintain parity in the
rate of interest for the taxpayer and the Government. He stated that if needed, Government could be
given additional time of 3 to 4 months to process the refund claim but thereafter the rate of interest
for delayed refund should be the same as the rate of interest for short payment of tax. Shri Manish
Kumar Sinha, Commissioner, GST Council stated that differential rate of interest for the
Government and the taxpayer was not an equity issue and that the Government rate of interest was
linked to the rate at which it placed its funds to the Reserve Bank of India (RBI) or borrowed funds
from the RBI. He also stated that the rate of interest for refunding a pre-deposit amount after
completion of the litigation process should not be very high. He added that the rate of interest for a
taxpayer should be linked to the market rate of borrowing as a taxpayer would have collected from
the buyer, the amount equivalent to tax which was in effect Government’s money. The Hon’ble
Minister from Uttar Pradesh stated that the equity issue was also very important. The Hon’ble
Deputy Chief Minister of Delhi stated that a higher rate of interest for delayed refund would
encourage the tax authorities to clear the refund claims early and stated that presently his
Government was saddled with the burden of processing refund claims as old as 7 years. Shri Arun
Goyal, Additional Secretary, GST Council pointed out that the language used in Section 50 of the
draft CGST Law was to ‘pay interest at such rate, not exceeding 18%’ and that this gave some
flexibility to the Government in fixing the actual rate of interest for delayed payment of tax.
6.2.6. The Secretary observed that payment of refund by Government could also be withheld due to
a stay order given by a Court and after the judgement, the Government might be required to pay the
refund with interest liability. The Hon’ble Minister from Uttar Pradesh observed that if the Supreme
Court decided the case in favour of the taxpayer, it implied that the fault lay with the Government.
He added that if the Government bore the implication of errors of judgement of its officers, it would
make the administration more accountable. The Hon’ble Minister from Karnataka stated that one
way to address this issue could be that the Government could pay a slightly higher rate of interest,
say 9%, for certain categories of delayed refund which could be classified as routine delay but for
refunds arising out of finalization of litigation process, the rate of interest could be kept at 6%. The
Hon’ble Chairperson observed that where the Government did not refund money for 6 to 7 years
due to litigation in Court, it retained and used the taxpayers’ money for these years and for this, it
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should be liable to pay interest at the rate at which the Government would have paid ordinarily for
its borrowing, i.e. the Government of India Security (G-SEC) rate. He further stated that if the
assessee had to pay a confirmed demand, he would have collected it from his customer but did not
pay to the Government and this led to his unjust enrichment. He further stated that such a taxpayer
would use the money which he was not supposed to keep. He explained that the conventional
difference in the rate of interest to be paid by the Government and by the taxpayer was based on this
presumption and the issue to be deliberated was as to what should be the difference in these two
rates. The Hon’ble Minister from Karnataka supported this approach. He stated that cost for the
Government should be higher for routine delay and this could be 9% and for litigation cases, the rate
of refund should be 6%. He further added that the cost of late payment of tax by the assessee should
be tied to the Bank borrowing rate.
6.2.7. The Hon’ble Minister from Uttar Pradesh stated that this approach appeared to be a classic
case of capitalism working for the capitalists. He observed that the Government had a much higher
bargaining power and it had wide resources for generating revenue including borrowing from
abroad at a very low rate of interest. He stated that for a private person, the cost of borrowing funds
was high as he could not borrow from abroad at a much lower rate. He stated that the Government
of India could borrow from abroad at a low rate of say 1.5%, lend it to Banks at the rate of 6%
which in turn would lend to the customers at a much higher rate. He stated that this was a classic
case in the USA during the decades of the 1960s and the 1970s. The Hon’ble Chief Minister of
Puducherry observed that a taxpayer could take money from the consumer, use it and thus enrich
himself and deposit it into the Government’s account after litigation of 6 to 7 years when the Court
ordered him to do so. He informed that more than Rs. 100 crore was not paid by the dealers of
petroleum products in his Union Territory due to litigation in the Court. The Hon’ble Minister from
Telangana stated that the rate of interest for delayed refund for Government should be kept at 6%
and the rate of interest for delayed payment of tax by a private person should be kept between 12%
to 15%.
6.2.8. The Hon’ble Minister from Jammu and Kashmir stated that default in payment of tax was a
public policy issue and it should not be mixed with the sovereign borrowing power of the Union of
India. He stated that one solution to this issue could be to include a provision in the Public Service
Guarantee Act that the Tax Administrations would pay refund within six months of filing an
application. The Hon’ble Chairperson observed that such a requirement would then only apply to
the State Governments. The Hon’ble Minister from Uttar Pradesh stated that such a requirement
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could be made applicable to all the Acts. He stated that the issue was not one of sovereignty but the
large differential in the interest rate to be paid by the Government and the taxpayer. The Hon’ble
Chairperson observed that another way to address this issue could be to keep the rate of interest as
proposed, but have a mandatory fixed period within which refund must be paid. The Secretary
stated that the period for payment of refund was already prescribed in the proposed Law. He
suggested that one way to address this issue could be to provide that if the refund was not given
within a certain period of the passing of an adjudication or appellate order where the order had
acquired finality, the rate of interest for delayed refund would be 9% and in other cases of refund,
where interest was payable, it should be paid at the rate of 6%. The Hon’ble Minister from Uttar
Pradesh suggested that the rate should be more than 9%. The Hon’ble Chairperson cautioned against
keeping the rate of interest too high. The Council agreed to the suggestion of the Secretary.
6.3. Shri Tuhin Kanta Pandey, Principal Secretary (Finance), Odisha stated that in Section 54(12),
the reference to Section 50 was erroneous and that it should be Section 56. The Council agreed to
this suggestion. The Hon’ble Chairperson stated that the Law Committee should be authorised to
make minor corrections and rectify typographical errors in the draft CGST and IGST Law after the
Council had approved it. The Council agreed to this suggestion.
6.4. The Hon’ble Minister from West Bengal raised a question whether the rate of tax on restaurants
under the Composition scheme was 5% each under the CGST and the SGST Act. Shri P.K.
Mohanty, Consultant (GST), CBEC informed that the proposed rate of 5% was the sum total of the
tax to be levied under the CGST and the SGST Acts and consequently, the rate of tax under each
Act was 2.5%. The Secretary observed that restaurants with turnover of more than Rs. 50 lakh
would be subject to the normal rate of tax applicable for supply of services.
6.5.1. The Hon’ble Minister from Telangana stated that in Section 6, cross-empowerment should be
part of the Act instead of implementing it through a notification. The Hon’ble Minister from Uttar
Pradesh supported this suggestion. The Secretary stated that the situations of cross-empowerment
would be dynamic in nature and to have flexibility, it need not be put in the Law. He added that the
Council had already taken a decision regarding the distribution of taxpayers between the Central and
the State administration and that this need not be put in the Law. The Hon’ble Chairperson observed
that the ambit of Section 6 would be in accordance with the Council’s decision and that the content
of notification would be as decided by the Council. He added that the Government was to only issue
such a notification and not determine its content, which would be determined by the Council. He
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added that the power to vary the content of the notification should rest with the Council. The
Hon’ble Minister from West Bengal observed that the complexion of the Council could change in
due course and, therefore, suggested that the following formulation should be incorporated as part of
Section 6 of the CGST Act: ‘Without prejudice to the provisions of this Act, officers appointed
under the State Goods and Services Tax Act are authorised to be the proper officers for the purposes
of this Act, subject to such conditions as may be notified by Government on the recommendations
of the Council.’ The Hon’ble Chairperson stated that the present formulation in Section 6 of the
draft CGST Act also conveyed the same meaning.
6.5.2. The Hon’ble Minister from Karnataka stated that the issue of cross-empowerment was
different from dividing the taxpayer base in the ratio of 90% and 10%. He stated that while the
numerical distribution rested with the Council, a provision for cross-empowerment under the GST
regime must be put in the Law, as otherwise there would be severe difficulties in implementing
GST. The Hon’ble Chairperson stated that in pith and substance, the existing draft was identical to
the one suggested by the Hon’ble Minister from West Bengal and that the only difference was that
the second clause had been made the first clause and the first clause had been made the second
clause. He summed up with the observation that there shall be cross-empowerment under the Law
and that its extent would be decided from time to time.
6.5.3. The Hon’ble Minister from Tamil Nadu observed that if cross-empowerment was vested on
SGST officers through notification, then there was a chance that the decision already taken on dual
control might be subject to frequent alterations. He, therefore, suggested that the notification route
should be avoided and that, instead, it might be done through Rules made under the relevant Law.
He suggested the following revised formulation for Section 6 of the draft CGST Law: ‘Without
prejudice to the provisions of this Act, the Government shall, on the recommendations of the
Council, and subject to such conditions as may be prescribed and specified under rules framed under
this Act, authorize officers appointed under the State Goods and Services Tax Act to be the proper
officers for the purposes of this Act and for this purpose the State officers may exercise all or any of
the powers they have under the State Goods and Service Tax Act.’ The Hon’ble Chairperson
suggested that the Law Committee could reformulate the existing text of Section 6 of the draft
CGST Act taking into account the suggestions of the Hon’ble Minister from West Bengal. The
Council agreed to the suggestion.
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6.5.4. The Hon’ble Minister from Karnataka recalled that in the 8th Meeting of the Council (held on
3-4 January 2017), he had observed that cross-empowerment was premised on the concept of pooled
sovereignty of the Centre and the States and that if an officer of CBEC issued an order under the
SGST Act, the States were also bound by it. He observed that it was essential that if a CGST officer
passed an order, he must also pass an order under the SGST Act. He emphasised that it must be
ensured that two orders were not passed by two authorities on the same issue and that this could be
achieved by incorporating this idea in the Act rather than in the Rules or in a notification. He
observed that this would give comfort to taxpayers. The Secretary observed that this formulation
could be put in the relevant GST Rule. The Hon’ble Minister from Karnataka stated that it should be
put in the Law and gave the following formulation for the same: ‘Without prejudice to the
provisions of this Act, officers appointed under the State Goods and Services Tax Act shall be
authorised to be the proper officers for the purposes of this Act subject to such conditions as may be
notified by the Government on the recommendations of the Council.’ He further stated that under
the cross-empowerment framework, it was essential that officer of only one government acted on an
issue and on his doing so, officers of the other government should be precluded from taking any
action. He stated that while this could be put in the Rules/notification, putting it in the Act would
send a signal to trade and industry that the issue of dual control had been addressed. He suggested to
add the following provision in the law: ‘Subject to the restrictions as notified under sub-section (1),
where any proceedings on an issue has been initiated by the proper officer under the State Goods
and Services Act, no action shall be initiated under this Act with respect to that issue. He further
stated that the law should clearly lay down that where an officer was issuing an order under one Act,
he should pass the corresponding order under the other Act as well. He suggested to add the
following provision in the law: ‘Subject to the restrictions as notified under sub-section (1), where
proper officer has issued an order under this Act, he shall issue the corresponding order under the
State Goods and Services Act as a part of his order under this Act.’
6.5.5. The Commissioner (GST Policy Wing), CBEC stated that the formulation suggested by the
Hon’ble Minister from Karnataka was broadly the same as the original text in Section 7 the Model
GST Law put in public domain in November, 2016. He informed that this provision was removed
on the advice of the Union Law Ministry. He stated that the Law Ministry had explained that the
CGST Law should not contain what was to be done under another law and that the phrase ‘on the
recommendations of the Council’ was added to ensure that the provisions would be uniform in all
the relevant laws. The CCT, Karnataka stated that the present formulation under Section 6 of the
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CGST Act only empowered the officers under the SGST Act to exercise the powers under the
CGST Act but did not provide an assurance that on a dispute, only one officer would pass one order
under both the Acts. He stated that it was very important for the public perception to assure that
multiple orders would not be passed by two different authorities on the same dispute. The Hon’ble
Chairperson stated that there should be an express or implied bar of the nature suggested above to
ensure that the taxpayer did not have to go to multiple officers for the same dispute. He observed
that if a CGST officer passed an order which also included the tax under the SGST Act, the SGST
officer should not claim that there was no bar on him to pass an order under the SGST Act and that
absence of such an understanding could lead to a chaotic situation.
6.5.6. The CCT, Gujarat stated that a similar provision was also required in respect of appeal
provisions. The Hon’ble Chairperson observed that an order passed under one Act covering demand
of duty under both the Acts could not be deemed to be an order under two different Acts and that no
two appeals could be filed to the Appellate authority in respect of such an order. He added that if
CGST appellate authority heard an appeal against an order covering demands under both CGST and
SGST Acts, there should be a bar in the law for the SGST appellate authority to hear the same
appeal. The Hon’ble Minister from Uttar Pradesh stated that the same principle should also apply
for refund of taxes. The Secretary stated that the Law Committee should prepare a formulation
giving effect to the understanding that that SGST officers shall be cross-empowered under the
CGST Act in the Act itself and that only one order shall be passed for one dispute involving taxes
under both the CGST and the SGST Act and that if a CGST officer passed an order, which also
included demand for tax under the SGST Act, the SGST officer shall be barred from passing order
on the same dispute. The Council agreed to this suggestion.
6.6. The Principal Secretary (Finance), Odisha raised a question in relation to Section 60(5) of the
draft CGST Act as to whether an assessee would need to file an application to get refund or whether
he would get refund automatically. He stated that Value Added Tax (VAT) Laws of several States
had a provision to grant refund automatically. CCT, Gujarat stated that an application would be
required for claiming refund and that such a provision would be incorporated in the relevant GST
Rules.
6.7. The Hon’ble Chief Minister of Puducherry stated that in Section 16(4) of the draft CGST Law,
the entitlement to take input tax credit was restricted upto the month of September following the end
of the financial year to which an invoice belonged but this period was getting extended as the
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entitlement was also linked to the relevant annual return. CCT, Karnataka clarified that the
entitlement to take input tax credit on an invoice of a particular year was limited to the month of
September of the next financial year but the cut-off month would be earlier, if the taxpayer filed his
earlier to the month of September of the next financial year.
6.8. Dr. Ravi Kota, Finance Commissioner, Assam pointed out that the scope of the expression
‘works contract’ in Clause 6 of Schedule II of the Draft CGST Law was different from that
contained in Section 2(118) of the Draft CGST Law. Shri Narayana Raju, Secretary, Legislative
Department stated that they would examine this issue further to align the wordings in Clause 6 of
Schedule II and Section 2(118) of the draft CGST Law. The Council agreed to this suggestion.
6.9. The Hon’ble Minister from Tamil Nadu stated that in the 5th Meeting of the Council (held on 2-
3 December 2016), it was decided to incorporate the definitions of ‘intra-State supply of goods’ and
‘intra-State supply of services’ in the Model GST Law instead of only cross-referencing it to the
IGST Act but this was not done. Commissioner (GST Policy Wing), CBEC stated that this issue
was discussed in the Law Committee of officers and it was noted that the existing definition of
‘intra-State supply of goods’ and ‘intra-State supply of services’ was contained in Section 8 of the
draft IGST Act and that this also had reference to Sections 10 and 12 of the IGST Act. He pointed
out that Section 10 of the IGST Act related to place of supply of goods and Section 12 related to
place of supply of services which were lengthy Sections. He stated that incorporating the definitions
of ‘intra-State supply of goods’ and ‘intra-State supply of services’ in the draft CGST Law would
have involved incorporating Sections 8, 10 and 12 of the draft IGST Act which would have been
unwieldy and therefore, the Law Committee suggested that this need not be incorporated in the draft
CGST Law. He also pointed out that the Union Law Ministry had advised that definitions adopted
in one Act should not be repeated in the other Acts. The Council accepted this explanation and
agreed to modify the decision taken in its 5th Meeting and agreed not to incorporate the definitions
of ‘intra-State supply of goods’ and ‘intra-State supply of services’ in the CGST Act as it was
already contained in the IGST Act.
6.10. The Hon’ble Deputy Chief Minister of Delhi pointed out that in Section 2(90) of the draft
CGST Act, ‘Commissioner’ was not included in the definition of ‘proper officer’ and this could
mean that in Section 6 of the draft CGST Act (dealing with cross-empowerment), Commissioner
would not be a proper officer and therefore could not be cross-empowered. Commissioner (GST
Policy Wing), CBEC stated that Sections 3, 4 and 5 of the draft CGST Act had reference to
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Commissioner. The Hon’ble Chairperson stated that the Law Committee could suitably redefine the
term “proper officer’ in the draft CGST Act to also bring officers of the rank of Commissioner
within its ambit. The Council agreed to this suggestion.
6.11. The Deputy Chief Minister of Delhi referred to his letter dated 4 March, 2017 addressed to the
Hon’ble Chairperson and copies sent to all the Hon’ble Members pointing out that designating the
sale of land and sale of buildings (subject to certain exceptions), neither as supply of goods nor a
supply of services (in Schedule III of the draft CGST Law) would lead to a break in the input tax
credit chain and it would be a very big missed opportunity to curb the flow of black money. He
stated that, as pointed out in his letter, there was a wrong impression created that introduction of
GST on supply of real estate would lead to subsuming of property tax and stamp duty in GST or that
it would lead to levy of GST on agricultural land. He also pointed out that low cost housing could be
exempted from GST and that for other categories of housing, the cost would not rise due to
availability of input tax credit on the raw materials used in construction. The Secretary stated that
the Central Government was of the same view as expressed by the Hon’ble Deputy Chief Minister
of Delhi. He recalled that this issue was discussed at length during the 7th Meeting of the Council
(held on 22-23 December, 2016) where the Central Government strongly argued for levying GST on
sale of land and building but the Council did not agree to the same and it was decided to revisit this
issue after one year of implementation of GST.
6.12. The Hon’ble Chairperson stated that the points raised by the Hon’ble Deputy Chief Minister of
Delhi merited careful consideration and that it was desirable to complete the input tax credit chain
by levying GST on sale of land and building and that this would also help in curbing generation of
black money. He further observed that this would not impinge upon the existing taxation powers of
the States on land and building. The Hon’ble Deputy Chief Minister of Delhi suggested that sale of
land and building should be removed from Schedule III of the draft CGST Law and cautioned that if
this issue was sealed today, then a big opportunity to curb black money would be lost. The Hon’ble
Minister from Telangana stated that this issue was already decided and should not be re-opened. The
Hon’ble Chairperson stated that the letter of the Hon’ble Deputy Chief Minister of Delhi deserved
examination as it had rightly pointed out that it did not impinge upon States’ power to levy stamp
duty and it did not bring agricultural land under GST and at the same time completed the input tax
credit chain. The Hon’ble Deputy Chief Minister of Delhi stated that introduction of GST and
availability of input tax credit on land and building would discourage hoarding of land by investing
black money into it. The Secretary observed that as per the decision in the 7th Meeting of the
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Council, this issue was to be reconsidered after one year of implementation of GST and if there was
an agreement at that time to bring sale of land and building under GST, it would require amendment
to Schedule III. He therefore suggested that presently sale of land and building could be exempted
through a notification instead of incorporating it in the law. CCT, Karnataka stated that if a decision
was taken to bring sale of land and building in GST, then several amendments would be required in
the law such as Section 16 dealing with eligibility and conditions for taking input tax credit. He
therefore suggested that the entry regarding sale of land and building should not be removed from
Schedule III. The Hon’ble Chairperson stated that this issue could be taken up for decision after one
year of implementation of GST. The Hon’ble Minister from Uttar Pradesh suggested to retain the
decision taken in the 7th Meeting of the Council. The Hon’ble Minister from Andhra Pradesh stated
that they would further study the proposal made by the Hon’ble Deputy Chief Minister of Delhi.
The Council decided to retain the decision taken in the 7th Meeting of the Council (held on 22-23
December, 2016).
6.13. Shri Shyamal Misra, CCT, Haryana stated that in the 10th Meeting of the Council (held on 18
February 2017), it was decided to incorporate a provision similar to the Proviso to Section 108(2)
(now Section 110(2), relating to National Tribunal) that the senior most Member of the State Bench
shall discharge the functions of the President of the State Bench for a temporary period in case the
office of the President fell vacant due to reasons like death or resignation of the President, but the
same had not been done. The Commissioner (GST Policy Wing), CBEC informed that this issue
was discussed in the Law Committee and also with the officers of the Union Law Ministry and it
was felt that this provision was not required because the senior most Member of a State Tribunal
would be its President and, in his absence, the next senior most Member would be the State
President. The Council agreed to modify its decision taken in the 10th Meeting of the Council and
agreed not to have a Proviso to Section 110(2) for the State Bench similar to that for the National
Tribunal.
6.14. CCT, Haryana stated that in the 10th Meeting of the Council (held on 18 February 2017),
during discussion on issue No. 4 and 5 of the Agenda Note of Agenda Item 3, it was decided to
move the provision contained in Section 7(1)(b), namely, ‘import of services for a consideration
whether or not in course or furtherance of business’ to the IGST Law but the same was not done.
Commissioner (GST Policy Wing), CBEC explained that as the whole provision of supply was in
Section 7 of the draft CGST Law, the Law Committee suggested that it was desirable to keep this
provision as part of Section 7 of the CGST Law. The Council agreed to this suggestion and
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accordingly agreed to modify its decision taken in the 10th Meeting of the Council (held on 18
February 2017).
6.15. The Hon’ble Minister from Karnataka stated that tax collection at source by electronic
commerce operators [Section 52(1) of the draft CGST Act] was only a tracking mechanism to create
a transaction trail in respect of transactions done through an electronic portal. He observed that
electronic commerce was a nascent business and it fitted well with the aim of creating a digital
economy. He observed that keeping these factors in view, while the concept of tax collection at
source might be kept, but the rate of this tax collection should be upto 1% and not frozen at 1% as
currently drafted in Section 52(1) of the draft CGST Law. He stated that this would imply that the
maximum tax collection at source from electronic commerce operators could be 0.5% each in the
CGST and SGST Law but it could also be lower. He stated that the Council should adopt a principle
that the rate of tax collection at source should be pegged at a rate, which would only allow audit trail
but would not affect the business model of the electronic commerce segment and would not entail
significant amounts of refund. The Council agreed to suitably change the wording in Section 52(1)
of the draft CGST Law to indicate that the rate of tax collection at source by electronic commerce
operators shall be upto 1%.
6.16. The Hon’ble Minister from Jammu & Kashmir stated that in the draft CGST Law, there were
references to several other laws like the Indian Penal Code (IPC), the Code of Criminal Procedure
(Cr.PC.), Contract Act etc. which did not apply to the territory of Jammu & Kashmir. On an enquiry
from the Hon’ble Chairperson as to how this issue was handled in other Laws, the Secretary,
Legislative Department clarified that in the other Laws, it was normally provided that the
corresponding Law of the State of Jammu & Kashmir shall apply. The Hon’ble Chairperson
suggested that a provision could be put in the CGST Law that any reference to any legislation in the
CGST Law shall include corresponding law of the State of Jammu & Kashmir, if it applied there.
The Council agreed to this suggestion.
6.17. CCT, Karnataka suggested that Section 31(3)(b) and the Proviso to Section 31(3)(c) of the
draft CGST Law (which provides 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, except where the
recipient of the goods or services or both requires such bill) should be re-examined by the Law
Committee in order to shift some part of the provision to the relevant GST Rules. The Council
agreed to this suggestion.
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6.18. The Principal Secretary (Finance), Odisha suggested that there should be a provision in
Section 117 of the draft CGST Law that an appellant should pay the full amount of tax in dispute
before filing an appeal in High Court. CCT, Gujarat stated that VAT laws of some States had a
provision that if a taxpayer had lost a case in the Tribunal, he would have to deposit the full tax
amount under dispute before filing an appeal in the High Court. The Secretary observed that it was
already provided that 10% of the disputed tax amount would be paid as pre-deposit at the level of
the First Appeal and an additional 20% would be paid as pre-deposit at the level of the Second
Appeal making the total pre-deposit as 30% of the disputed tax amount, and the question was
whether this amount should be increased to 100% for filing an appeal before the High Court. Shri
Rajiv Jalota, CCT, Maharashtra stated that in his State, no part payment of tax was allowed for
filing appeal in High Court and that the demand of tax could also not be stayed by the High Court.
He added that such demand could, however, be stayed under the High Court’s Writ jurisdiction. The
Hon’ble Chairperson stated that the principle of depositing 100% tax before filing an appeal negated
the very right of appeal. He observed that for a high value demand of tax, say Rs.20 crore, it would
be unviable to file an appeal in High Court. He further stated that the taxpayer would then take
recourse to filing a Writ petition in the High Court and in all likelihood, the Court would grant a
stay, making this provision a nullity. The Commissioner (GST Policy Wing), CBEC pointed out that
under Section 119 of the draft CGST Law, it was provided that notwithstanding an appeal filed
before a High Court or the Supreme Court, sums due to the Government as a result of an order
passed by the Appellate Tribunal shall be payable. The Council agreed not to make any change in
Section 117 (appeal to High Court) of the draft CGST Law.
6.19. The Hon’ble Minister from Uttar Pradesh observed that the limit of tax amount of Rs. 50,000/-
provided in Section 112(2) upto which the Appellate Tribunal could exercise its discretion to refuse
to admit an appeal was too small and should be considered for an upward revision. The Hon’ble
Chairperson stated that the Appellate Tribunal should be given discretion in this regard. He
observed that a case might be small but it might have a cumulative effect as it might impact many
assessees or might be relevant for repeat cases. He further observed that if it was a legal issue, the
ratio of the decision could apply across the board. The Secretary stated that this issue was discussed
at length in the 10th Meeting of the Council (held on 18 February 2017) and the monetary limit for
not admitting an appeal before the Appellate Tribunal was reduced from Rs. 1 lakh to Rs. 50,000
and that this decision should not be revisited. The Council agreed to this suggestion.
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6.20. The Hon’ble Minister from Uttar Pradesh raised an issue as to how the officers of the States
would get representation in the National Tribunal. The Secretary stated that the manner of
appointment of the Members of the Appellate Tribunal shall be provided in the relevant GST Rules
and the Council could take a decision when discussing the relevant Rules.
6.21. Dr. Reeta Vasishta, Additional Secretary, Legislative Department, Ministry of Law recalled
the Council’s decision to have a Single Member Bench of the Appellate Tribunal to hear appeal for
cases where tax amount did not exceed Rs 5 lakh and suggested that such Single Member Bench
should only consist of a Judicial Member. The Hon’ble Minister from Uttar Pradesh stated that this
was not a requirement under the VAT Law and that the appeal under the VAT Law also went to the
High Court. The Secretary, Legislative Department stated that an appeal decided the rights and
obligations of a taxpayer, and, therefore, if it was to be heard by a single Member Bench, it should
consist only of a Judicial Member. He added that an administrative function was different from a
quasi-judicial function and that there were judgements of the Court that whenever a quasi-judicial
function was performed by a single Member Bench, it should consist of a Judicial Member. The
Hon’ble Minister from Uttar Pradesh expressed disagreement with the suggestion and stated that the
District Magistrates and the Commissioners also decided a large number of cases involving the
rights and obligations of the citizens without involving a Judicial Member. The Hon’ble
Chairperson observed that the Member (Technical) of a Tribunal would generally be appointed from
amongst the officers of the level of Commissioner, Chief Commissioner, or a retired senior officer
and because of his long experience in taxation maters, he would be as knowledgeable, if not more,
than a Judicial Member, many of whom might be drawn from the rank of advocates or Additional
District Judges whose exposure to tax matters would be limited. He stated that in this view, there
was no justification to insist that a single Member Bench should only consist of a Judicial Member.
The Hon’ble Minister from West Bengal stated that there should be no insistence that a single
Member Bench should only consist of a Judicial Member. The Council agreed that a single Member
Bench of the Appellate Tribunal could consist of either a Member (Technical) or a Member
(Judicial).
7. For agenda item 2, the Council approved the draft CGST Law with the changes/decisions as
recorded below which includes the changes as suggested in the meeting of the officers held on 3
March 2017 in New Delhi. The Council also authorised the Law Committee of Officers to make
minor corrections and rectify typographical errors, wherever required, and that such changes would
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be shown in the track change mode and shall be shared with the States within three working days of
the date of this meeting.
7.1. To renumber the sub-clause (a) appearing after Section 2(80) of the draft CGST Law [which
reads as follows: “other territory” includes territories other than those comprising in a State and
those referred to in sub-clauses (a) to (e) of clause (114) of section 2] as Section 2 (81) and to
consequentially renumber the existing Clauses (81) to (119) and to also carry out other
consequential changes (referencing).
7.2. The Law Committee to suitably redefine the term “proper officer’ in the draft CGST Act
[Section 2(91)] to also bring officers in the rank of Commissioner within its ambit.
7.3. To align the language of the expression ‘works contract’ in Clause 6 of Schedule II and Section
2(118) of the draft CGST Law.
7.4. The Law Committee to reformulate the existing text of Section 6 of the draft CGST Act taking
into account the suggestions of the Hon’ble Minister from West Bengal and the Hon’ble Minister
from Karnataka to give effect to the understanding that SGST officers shall be cross-empowered
under the CGST Act in the Act itself and that only one order shall be passed for one dispute
involving taxes under both the CGST and the SGST Act and that if a CGST officer passed an order,
which also included demand for tax under the SGST Act, the SGST officer shall be barred from
passing order on the same dispute.
7.5. To modify the decision taken in the 10th Meeting of the Council (held on 18 February 2017), in
respect of Issue No. 4 and 5 of the Agenda Note of Agenda Item 3 and not to move the provision
contained in Section 7(1)(b), namely, ‘import of services for a consideration whether or not in
course or furtherance of business’ to the IGST Law.
7.6. In Section 19(1), to add the words as indicated in bold italics below: “A registered person who
has paid integrated tax on a supply considered by him to be an inter-state supply, but which is
subsequently held found to be an intra-State supply, shall, be granted refund of the amount of
integrated tax so paid in such manner and subject to such conditions as may be prescribed.”
7.7. Section 31(3)(b) and Proviso to Section 31(3)(c) to be re-examined by the Law Committee in
order to shift some part of the provision to the relevant GST Rules.
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7.8. To suitably change the wording in Section 52(1) to indicate that the rate of tax collection at
source by electronic commerce operators shall be upto 1%.
7.9. In Section 54(12), the reference to Section 50 to be replaced by Section 56.
7.10. To modify Section 56 to provide that if refund is not given within thirty days of the passing of
an adjudication or appellate order where the order has acquired finality, the rate of interest for
delayed refund would be 9% and in other cases of refund, where interest is payable, it shall be paid
at the rate of 6%.
7.11. In the proviso to Section 67(2), to add the words as indicated in bold italics below: “Provided
that where it is not practicable to seize any such goods, the proper officer, or any officer authorized
by him, may serve on the owner or the custodian of the goods an order that he shall not remove, part
with, or otherwise deal with the goods except with the previous permission of such officer:”
7.12. In Section 67(9), to add the words as indicated in bold italics below: “Where any goods, being
goods specified under sub-section (8), have been seized by a proper officer, or any officer
authorized by him, under sub-section (2), he shall prepare an inventory of such goods in the manner
as may be prescribed”.
7.13. To add a Proviso in Section 109(10) as indicated in bold italics below: “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 hundred thousand 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.
7.14. A single Member Bench of the Appellate Tribunal shall consist of either a Member
(Technical) or a Member (Judicial).
7.15. To modify the decision of the Council taken in its 10th Meeting and not to have a Proviso to
Section 110(2) for the State Bench similar to that for the National Tribunal.
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7.16. In Section 110(11), to add the clause as indicated in bold italics below: “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 re-appointment.
7.17. In Section 118(1), to carry out the editorial correction as indicated in bold italics and
strikethrough mode below: “An appeal shall lie to the Supreme Court-
(a) from any order passed by the National Bench and or Regional Benches of the Appellate
Tribunal; or…”
7.18. In Section 129(1)(c), to make the amendment as indicated in bold italics and strikethrough
mode below: “upon furnishing a security equivalent to the amount payable under clause (a) or
clause (b) in such form and manner as may be prescribed in such form as may be prescribed
equivalent to the amount payable under clause (a) or clause (b):”
7.19. To add the missing Sub-section and Section numbers in Explanation under Section 168 which
reads as follows: “For the purposes of this section, the Commissioner specified in sub-section (90)
of section 2, sub-section (3) of section 5, clause (b) of sub-section (9) of section 25, sub-section (1)
of section 37, sub-section (2) of section 38, sub-section (6) of section 39, sub-section (1) of section
151, 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.”
7.20. To add the words indicated in bold italics below in Clause 2 of Schedule I: “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.”
7.21. To delete Clause 4 of Schedule III which reads as follows and this matter to be handled
through notification: “4. Services by a foreign diplomatic mission located in India or any
specialized agency of the United Nations Organization or any Multilateral Financial Institution
and Organization notified under the United Nations (Privileges and Immunities) Act, 1947.”
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7.22. To modify the decision of the Council taken in its 5th Meeting (held on 2-3 December 2016)
and not to incorporate the definitions of ‘intra-State supply of goods’ and ‘intra-State supply of
services’ in the CGST Act as it was already contained in the IGST Act.
7.23. To incorporate a provision in the CGST Law that any reference to any legislation in the CGST
Law shall include corresponding law of the State of Jammu & Kashmir, if it applied there.
Agenda Item 3: Approval of the Draft IGST Law as modified in accordance with the decisions
of the GST Council and as vetted by the Ministry of Law & Justice, Government of India:
8. Introducing this agenda note, the Secretary invited the Commissioner (GST Policy Wing), CBEC
to brief the Council regarding the important changes made in the draft IGST Law. The
Commissioner (GST Policy Wing), CBEC broadly explained the changes made in the IGST Law
between the draft of November 2016 (which was the most recent version of the Draft put in public
domain) and the draft of 1 March 2017 presented as Agenda Note for the 11th Meeting of the
Council. These changes are broadly recorded in Annexure 3 and was also circulated to the Council
Members. The Secretary invited comments of the Members on the draft IGST Law.
8.1. The Hon’ble Minister from Tamil Nadu stated that the draft IGST Law should not extend to
Union Territories without Legislature. He stated that according to Article 366(26B) of the
Constitution, “State” with reference to Articles 246A, 268, 269, 269A and Article 279A of the
Constitution included a ‘Union territory with Legislature;’ and considering that Article 366 (26B) of
the Constitution included only “Union Territory with Legislature” within the meaning of State,
Union Territory without Legislature could not be considered as a State for the purpose of Goods and
Service Tax. He added that since, Article 366 (26B) of the Constitution had a reference to Article
246A, 269A and 279A, ‘Union Territory without Legislature’ could not be covered by the
SGST/IGST Act. He further stated that the other fact was that Section 2(102) of the CGST Act had
defined State as “State” including a ‘Union territory with Legislature’.
8.2. The Commissioner, GST Council stated that the power to levy GST was derived from Article
246A of the Constitution and under it, the Central Government had the power to impose GST across
the entire territory of the Union of India. He added that once this power was vested with the Central
Government, it had the legal authority to apply multiple taxes (like CGST and Union Territory
Goods and Services Tax). He added that the Central Government also had residuary powers of
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taxation under Entry 96 of the List I of the Schedule 7 of the Constitution and under this, it could
impose GST in Union Territory without Legislature. The Hon’ble Minister from Uttar Pradesh
stated that this issue could be examined by the Law Committee. The Secretary clarified that this
issue had already been examined by the Law Committee as well as the officers of the Union Law
Ministry and both had agreed with the formulation incorporated in draft CGST Law for levying
GST in Union Territories without Legislature. The Hon’ble Chairperson stated that if the term
Union Territory without Legislature was not covered in the definition of ‘State’, it would be covered
in the definition of Union of India and therefore he did not visualize any legal difficulty in levying
GST in Union Territories without Legislature. The Council agreed with this view.
8.3. The Hon’ble Minister from Jammu & Kashmir stated that the definition of SGST Act contained
in Section 2(21) of the draft IGST Law had a reference to Article 246A of the Constitution, which
was not applicable to the State of Jammu & Kashmir. He stated that Article 5 of the Constitution of
Jammu & Kashmir (relating to the extent of executive and legislative power of the State of Jammu
& Kashmir) provided that the executive and legislative power of the State of Jammu & Kashmir
extended to all matters except those with respect to which the Parliament of India had power to
make laws for the State of Jammu & Kashmir under the provisions of the Constitution of India. The
Additional Secretary, Legislative Department suggested to modify the definition of the term ‘State
Goods and Services Tax Act’ in Section 2(21) of the draft IGST Law and to remove from it,
reference to Article 246A of the Constitution of India. The Council agreed to this suggestion.
8.4. The Hon’ble Minister from West Bengal stated that in Section 2(6) of the draft IGST Law, there
was a reference, in relation to export of services, that the payment for such services should be
received in convertible foreign exchange. He stated that exports to Nepal and Bhutan was normally
permitted against payment in Indian Rupees and suggested that this could be examined by the Law
Committee and corrected, if so required.
8.5. The Hon’ble Minister from West Bengal enquired whether the IGST would be collected
inclusive of Customs duty. The Commissioner (GST Policy Wing), CBEC stated that the proviso to
Section 5(1) of the draft IGST Law provided that integrated tax on goods imported into India shall
be levied in accordance with the provisions of Section 3 of the Customs Tariff Act, 1975 and this
implied that it would be levied on the value inclusive of Basic Customs duty.
8.6. The Hon’ble Minister from West Bengal stated that there appeared to be a contradiction
between Section 12(8) and Section 13(9) of the draft IGST Law as the former referred to ‘place of
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supply of services by way of transportation of goods, including by mail or courier…’, whereas the
later referred to ‘place of supply of services of transportation of goods, other than by way of mail or
courier…’. He stated that mail or courier was included in Section 12(8) but was excluded in Section
13(9). Shri G.D. Lohani, Commissioner, CBEC explained that Section 12(8) of the draft IGST Law
dealt with supplies within the country whereas Section 13(9) dealt with supplies where either the
supplier of services or the recipient of services was located outside India. He explained that under
the current Service Tax law, couriers dealing with international supply were not treated as
transporters and couriers for inbound and outbound supplies to and from India were subject to tax.
He further explained that for supplies within India, for which Section 12(8) of the draft IGST Law
applied, couriers were to be taxed only at one end. He stated that the provisions of Section 12(8) and
Section 13(9) of the draft IGST Law were drafted keeping this difference in mind. The Hon’ble
Minister from West Bengal stated that the Law Committee could examine this aspect and that if
there was no discrepancy, then the provisions in question could continue in their present form.
8.7. CCT, Karnataka stated that the provision of refund for international tourists in Section 15 of the
draft IGST Law would be difficult to implement in practice as an international tourist would not be
able to figure out whether the tax he had paid for purchases in India was CGST and SGST or IGST.
The Hon’ble Chairperson stated that the general international experience was that provision of tax
refund to tourists was very cumbersome and required a lot of paperwork and procedural formalities.
The Secretary stated that one option could be to remove this provision altogether but if it had to be
retained, it could be operated only on the basis of the IGST model. The Hon’ble Chairperson stated
that another option could be to restrict the facility of refund to international tourists to jewellery
purchases. The Hon’ble Minister from Uttar Pradesh observed that there was no provision in the
United States of America for refund of duties paid by an international tourist. CCT, Gujarat stated
that several countries had a provision to refund the taxes paid by international tourists and that it
would be desirable to retain enabling provision for it in the GST Law. The Council agreed to this
suggestion.
9. For agenda item 3, the Council approved the draft IGST Law with the changes/decisions as
recorded below. The Council also authorised the Law Committee of Officers to make minor
corrections and rectify typographical errors, wherever required, and that such changes would be
shown in the track change mode and shall be shared with the States within three working days of the
date of this meeting.
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9.1. Section 2(6) dealing with export of services and containing the requirement of payment in
convertible foreign exchange to be re-examined by the Law Committee and corrected, if required.
9.2. To modify the definition of the term ‘State Goods and Services Tax Act’ in Section 2(21) by
removing from it, reference to Article 246A of the Constitution of India.
9.3. The Law Committee to examine Section 12 (8) and 12 (9) for any apparent contradiction, and if
there was no contradiction, these provisions could continue in their present form.
Agenda Item 4: Development of an e-Waybill System by Goods and Services Tax Network
(GSTN):
10. Introducing this agenda item, the Secretary stated that Section 68 of the draft CGST Law
contained a provision for inspection of goods in movement and that it provided that the
Government might specify a document or a device to be carried by a person in charge of a
conveyance who carried goods exceeding a certain prescribed value. He recalled that this provision
(the then Section 80 of the Model GST Law) was discussed in the 6th Meeting of the Council (held
on 11 December, 2016), particularly in the context of having check-posts at the State borders and it
was felt that in the GST regime, check-posts need not be kept at the borders to physically check
goods but it was necessary to record information regarding movement of goods across the State
borders. He added that it was also discussed that the movement of goods, whether within or across
the State, would be with a meta-permit and that the vehicles could be checked anywhere and not
necessarily at the borders. He stated that keeping this in view, GSTN needed authorisation for
development of an e-Way Bill Application System. He stated that by using this System, every
Logistics Service Provider could generate an e-way bill containing the invoice details and the
vehicle details on 24*7 basis, without requiring any approval from a tax officer. With this
introduction, he presented the following agenda for the consideration of the Council: (i) Approval of
the proposal to create Electronic Way Bills System Module as part of the GST System through
GSTN; and (ii) GSTN to collect a small convenience fee for each e-Way bill for the creation and
operation of the proposed e-Way Bill System.
10.1. The Hon’ble Minister from West Bengal stated that in principle, he supported the proposal but
the only question was as to who would pay the cost for creation of the System and generation of eWay Bills which was indicated to be about Rs. 232 crore over a five year period. He stated that as
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this was a relatively small amount, the cost should be borne by the Government instead of the
logistics operators. The Secretary informed that this issue was deliberated in the Officers’ Meeting
held on 3 March 2017 and the general view that emerged there was that the Central and the State
Governments should bear this cost. The Council agreed with this proposal.
10.2. Ms. Sujata Chaturvedi, CCT, Bihar stated that the Ministry of Road Transport and Highways
(MoRTH) should also be consulted while developing the e-Way Bill System. The Secretary stated
that a separate meeting would be held with MoRTH as also with the other relevant Ministries like
Environment, Railway and Shipping, to discuss this issue and for not having check posts at the State
borders.
11. For agenda item 4, the Council approved the proposal to create Electronic Way Bills System
Module as part of the GST System through GSTN and the cost for developing and operating the
same would be borne by the Central and State Governments.
Agenda Item 5: Date of the next meeting of the GST Council
12. The Hon’ble Chairperson stated that another meeting of the Council would need to be called
shortly to approve the other two laws namely the Model SGST Law and the UTGST Law. He
suggested to hold the next meeting on either 14, 15 or 16 March 2017. After deliberation, the
Council agreed to hold its next meeting on 16 March 2017 in New Delhi.
Agenda Item 6: Any other agenda item with the permission of the Chairperson
13. The Hon’ble Minister from Uttar Pradesh informed that migration of the existing taxpayers to
GSTN was very slow and that the process needed to be expedited. Shri Navin Kumar, Chairman,
GSTN informed that about two-thirds of the existing Value Added Tax (VAT) dealers had activated
their accounts on GSTN but of late, the speed had slowed down as many taxpayers whose annual
turnover was between Rs. 10 lakh and Rs. 20 lakh were waiting for clarity in the law before
migrating to GSTN. The Hon’ble Chairperson observed that the work of migration of existing
taxpayers should be carried out efficiently.
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14. The Hon’ble Chairperson expressed his deep appreciation for the hard and long working hours
put in by the officers of the Law Committee, which enabled the CGST and IGST Laws to be passed
by the Council in this meeting. He observed that this was a milestone in the Centre-State
relationship as, on an important issue like taxation, State officers played a very prominent role in
drafting the law and correcting the language. The Hon’ble Chief Minister of Puducherry stated that
the House placed on record its deep appreciation of the stellar role played by the Hon’ble
Chairperson in steering the successful completion of the discussion on the CGST and IGST Laws.
The Hon’ble Minister from West Bengal placed on record his appreciation for the hard work of the
officers of the Law Committee and, in particular thanked the two co-convenors, Shri P.K. Mohanty,
Consultant (GST), CBEC and Dr. P.D. Vaghela, CCT, Gujarat. He also placed on record his
appreciation of the important role played by Dr Hasmukh Adhia, Secretary to the Council, his team
of officers and Shri Upender Gupta, Commissioner (GST Policy Wing), CBEC. As a token of
appreciation of the contribution of the officers of the Law Committee, the Hon’ble Chairperson
felicitated the following officers with bouquets:
State Government Officers
1. Dr. P.D. Vaghela, Commissioner, Commercial Taxes, Gujarat
2. Shri Rajiv Jalota, Commissioner, Commercial Taxes, Maharashtra
3. Shri Ritvik Pandey, Commissioner, Commercial Taxes, Karnataka
4. Shri Arun Mishra, Additional Secretary, Commercial Taxes, Bihar
5. Shri Khalid Anwar, Joint Commissioner, Commercial Taxes, West Bengal
6. Shri Dhananjay Akhade, Joint Commissioner, Commercial Taxes, Maharashtra
7. Dr. Ravi Prasad, Joint Commissioner, Commercial Taxes, Karnataka
8. Shri Riddhesh Rawal, Deputy Commissioner, Commercial Taxes, Gujarat
Central Government Officers
1. Shri P. K. Mohanty, Consultant (GST) CBEC
2. Shri P. K. Jain, Principal Commissioner, Authorised Representative, CESTAT
3. Shri Upender Gupta, Commissioner (GST Policy Wing), CBEC
4. Shri G. D. Lohani, Commissioner of Central Excise, Faridabad
5. Shri Neeraj Prasad, Additional Commissioner (GST Policy Wing), CBEC
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6. Shri Vishal Pratap Singh, Deputy Commissioner (GST Policy Wing), CBEC
7. Shri Ravneet Singh Khurana, Deputy Commissioner (GST Policy Wing), CBEC
8. Shri Siddharth Jain, Assistant Commissioner (GST Policy Wing), CBEC
Ministry of Law
1. Ms. Rita Vashishtha, Additional Secretary, Legislative Department, Ministry of Law
2. Shri R. Srinivas, Additional Legislative Counsel, Legislative Department, Ministry of Law
Goods & Services Tax Network
1. Shri Jagmal Singh, Vice President, GSTN
15. The meeting ended with a vote of thanks to the Chair.


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Annexure 1
List of Ministers who attended the 11th GST Council Meeting on 4 March 2017
S No State/Centre Name of the Minister Charge
1 Govt of India Shri Arun Jaitley Finance Minister
2 Govt of India Shri Santosh Kumar Gangwar Ministry of State, Finance
3 Puducherry Shri V. Narayanasamy Chief Minister
4 Arunachal Pradesh Shri Chowna Mein Deputy Chief Minister
5 Delhi Shri Manish Sisodia Deputy Chief Minister
6 Andhra Pradesh Shri Yanamala Ramakrishnudu Finance Minister
7 Assam Dr. Himanta Biswa Sarma Finance Minister
8 Bihar Shri Bijendra Prasad Yadav Minister, Commercial Taxes
9 Chhattisgarh Shri Amar Agrawal Finance Minister
10 Himachal Pradesh Shri Prakash Chaudhary Minister, Excise & Taxation
11 Jammu & Kashmir Dr. Haseeb A. Drabu Finance Minister
12 Jharkhand Shri C.P. Singh Minister, Urban Development & Housing
13 Karnataka Shri Krishna Byregowda Minister, Agriculture
14 Mizoram Shri Lalsawta Finance Minister
15 Nagaland Shri Vikheho Swu Minister, Roads & Bridges
16 Rajasthan Shri Rajpal Singh Shekhawat Minister, Industries
17 Tamil Nadu Shri D. Jayakumar
Minister for Fisheries, Finance & Administrative
Reforms
18 Telangana Shri Etela Rajender Finance Minister
19 Uttar Pradesh Prof. Abhishek Mishra Minister, Skill Development
20 West Bengal Dr. Amit Mitra Finance Minister

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Annexure 2
List of officers who attended the 11th GST Council Meeting on 4 March 2017
S No State/Centre Name of the Officer Charge
1 Govt. of India Dr. Hasmukh Adhia Revenue Secretary
2 Ministry of Law Shri Suresh Chandra Secretary, Legal Affairs
3 Ministry of Law Dr. G. Narayana Raju Secretary, Legislative Department
4 Govt. of India Shri Najib Shah Chairman, CBEC
5 Govt. of India Ms. Vanaja N. Sarna Member (P&V), CBEC
6 Govt. of India Shri Ram Tirath Member (GST), CBEC
7 Govt. of India Shri Mahender Singh Director General, DG-GST, CBEC
8 Govt. of India Shri P.K. Jain Principal Commissioner, (AR), CESTAT, CBEC
9 Govt. of India Shri B.N. Sharma Additional Secretary, Dept of Revenue
10 Ministry of Law Dr. Reeta Vasishta Additional Secretary, Legislative Department
11 Govt. of India Shri P.K. Mohanty Advisor (GST), CBEC
12 Govt. of India Shri Alok Shukla Joint Secretary (TRU), Dept of Revenue
13 Govt. of India Shri Upender Gupta Commissioner (GST), CBEC
14 Govt. of India Shri Udai Singh Kumawat Joint Secretary, Dept of Revenue
15 Govt. of India Shri Amitabh Kumar Joint Secretary (TRU), Dept of Revenue
16 Govt. of India Shri G.D. Lohani Commissioner, CBEC
17 Govt. of India Shri D.S.Malik ADG, Press, Ministry of Finance
18 Govt. of India Shri Hemant Jain Advisor to MoS (Finance)
19 Ministry of Law Shri S. Shrivat Assistant Legal Adviser
20 Govt. of India Ms. Aarti Saxena Deputy Secretary, Dept of Revenue
21 Govt. of India Shri S.P. Bhatia OSD to FM
22 Govt. of India Shri Ravneet Singh Khurana Deputy Commissioner, GST Policy
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S No State/Centre Name of the Officer Charge
23 Govt. of India Shri Vishal Pratap Singh Deputy Commissioner, GST Policy
24 Govt. of India Shri Siddharth Jain Assistant Commissioner, GST Policy
25 Govt. of India Shri Vipin Kumar Singh Assistant Director, Press
26 Govt. of India Shri P.K.Manderva Superintendent, GST Policy
27 GST Council Shri Arun Goyal Additional Secretary
28 GST Council Shri Shashank Priya Commissioner
29 GST Council Shri Manish K Sinha Commissioner
30 GST Council Shri G.S. Sinha Joint Commissioner
31 GST Council Ms. Thari Sitkil Deputy Commissioner
32 GST Council Shri Rakesh Agarwal Assistant Commissioner
33 GST Council Shri Kaushik TG Assistant Commissioner
34 GST Council Shri Shekhar Khansili Superintendent
35 GST Council Shri Manoj Kumar Superintendent
36 GST Council Shri Sandeep Bhutani Superintendent
37 GST Council Shri Amit Soni Inspector
38 GST Council Shri Anis Alam Inspector
39 GST Council Shri Ashish Tomar Inspector
40 GST Council Shri Sharad Verma Tax Assistant
41 GST Council Shri Sher Singh Meena Tax Assistant
42 Andhra Pradesh Shri J. Syamala Rao Commissioner, Commercial Taxes
43 Andhra Pradesh Shri T. Ramesh Babu Additional Commissioner, Commercial Taxes
44 Andhra Pradesh Shri D.Venkateswara Rao OSD, Revenue
45 Arunachal
Pradesh Shri Marnya Ete Secretary & Commissioner, Commercial Taxes
46 Arunachal
Pradesh Shri Nakut Padung Superintendent, VAT
47 Assam Dr. Ravi Kota Finance Commissioner
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S No State/Centre Name of the Officer Charge
48 Assam Shri Rakesh Agarwala Joint Commissioner, Commercial Taxes
49 Bihar Ms. Sujata Chaturvedi Principal Secretary & Commissioner, Commercial
Taxes
50 Bihar Shri Arun Kr. Mishra Addl. Secretary, Commercial Taxes
51 Bihar Shri Ajitabh Mishra Assistant Commissioner, Commercial Taxes
52 Chhattisgarh Ms. Sangeetha P Commissioner, Commercial Taxes
53 Chhattisgarh Shri Khemraj Jhariya Additional Commissioner, Commercial Taxes
54 Delhi Shri H. Rajesh Prasad Commissioner, VAT
55 Delhi Shri Anand Kumar Tiwari Additional Commissioner, GST
56 Goa Shri Dipak Bandekar Commissioner, Commercial Taxes
57 Gujarat Dr. P.D. Vaghela Commissioner, Commercial Taxes
58 Gujarat Ms. Mona Khandhar Secretary (Economic Affairs)
59 Haryana Shri Shyamal Misra Commissioner, Excise & Taxation
60 Haryana Shri Vidya Sagar Joint Commissioner, Excise & Taxation
61 Haryana Shri Rajeev Chaudhary Deputy Commissioner, Excise & Taxation
62 Himachal
Pradesh Shri Pushpendra Rajput Commissioner, Commercial Taxes
63 Jammu &
Kashmir Shri P.I. Khateeb Commissioner, Commercial Taxes
64 Jammu &
Kashmir Shri P.K. Bhat Additional Commissioner, Commercial Taxes
65 Jharkhand Shri Sanjay Kr. Prasad Joint Commissioner (HQ)
66 Jharkhand Shri G.S. Kapardar Assistant Commissioner
67 Karnataka Shri Ritvik Pandey Commissioner, Commercial Taxes
68 Karnataka Dr. M.P. Ravi Prasad Joint Commissioner, Commercial Taxes
69 Kerala Shri P. Mara Pandiyan Additional Chief Secretary (Taxes)
70 Kerala Dr. Rajan Khobragade Commissioner, Commercial Taxes
71 Madhya Pradesh Shri Manoj Shrivastav Principal Secretary, Commercial Taxes
72 Madhya Pradesh Shri Raghwendra Kumar Singh Commissioner, Commercial Taxes
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S No State/Centre Name of the Officer Charge
73 Madhya Pradesh Shri Sudip Gupta Deputy Commissioner
74 Maharashtra Shri Rajiv Jalota Commissioner, Sales Tax
75 Maharashtra Shri Dhananjay Akhade Joint Commissioner, Sales Tax
76 Meghalaya Shri Abhishek Bhagotia Commissioner, Commercial Taxes
77 Meghalaya Shri L. Khongsit Assistant Commissioner, Commercial Taxes
78 Mizoram Shri L.H. Rosanga Commissioner, Taxes
79 Mizoram Shri R. Zosiamliana Deputy Commissioner, Taxes
80 Nagaland Shri Asangba Chuba Ao Commissioner, Commercial Taxes
81 Odisha Shri Tuhin Kanta Pandey Principal Secretary (Finance)
82 Odisha Shri Saswat Mishra Commissioner, Commercial Taxes
83 Odisha Shri Sahadev Sahu Joint Commissioner, Commercial Taxes
84 Puducherry Dr. V. Candavelou Secretary (Finance)
85 Puducherry Shri G. Srinivas Commissioner, Commercial Taxes
86 Punjab Shri Satish Chandra Additional Chief Secretary
87 Punjab Shri Rajeev Gupta Advisor (GST), Govt of Punjab
88 Punjab Shri Pawan Garg Deputy Commissioner, Commercial Taxes
89 Rajasthan Shri Alok Gupta Commissioner, Commercial Taxes
90 Rajasthan Shri Ketan Sharma Deputy Commissioner, Commercial Taxes
91 Sikkim Shri Manoj Rai Joint Commissioner, Commercial Taxes
92 Tamil Nadu Shri C. Chandramouli Additional Chief Secretary
93 Tamil Nadu Shri K. Gnanasekaran Additional Commissioner, Commercial Taxes
94 Tamil Nadu Shri R. Rajesh Kannan Officer, Coordination
95 Tamil Nadu Shri P. Rajendran Assistant Liaison Officer
96 Telangana Shri Anil Kumar Commissioner, Commercial Taxes
97 Telangana Shri Laxminarayan Jannu Joint Commissioner, Commercial Taxes
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S No State/Centre Name of the Officer Charge
98 Tripura Shri Debapriya Bardhan Commissioner, Commercial Taxes
99 Uttarakhand Shri Ranveer Singh Chauhan Commissioner, Commercial Taxes
100 Uttarakhand Shri Piyush Kumar Addl. Commissioner, Commercial Taxes
101 Uttarakhand Shri Yashpal Singh Deputy Commissioner, Commercial Taxes
102 Uttar Pradesh Shri R.K.Tiwari Additional Chief Secretary
103 Uttar Pradesh Shri Mukesh Kumar Meshram Commissioner, Commercial Taxes
104 Uttar Pradesh Shri Vivek Kumar Additional Commissioner, Commercial Taxes
105 Uttar Pradesh Shri Niraj Kumar Maurya Assistant Commissioner, Commercial Taxes
106 West Bengal Shri H.K. Dwivedi Principal Secretary, Finance
107 West Bengal Ms. Smaraki Mahapatra Commissioner, Commercial Taxes
108 West Bengal Shri Khalid A Anwar Senior Joint Commissioner, Commercial Tax
109 GSTN Shri Navin Kumar Chairman, CBEC
110 GSTN Shri Prakash Kumar CEO

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Annexure 3
Changes in Model GST Law (Between 26th Nov 2016 draft to 1st March 2017 draft)
General
1. All the changes that have been discussed and accepted by the Council in the 5th – 10th Council
meetings have been incorporated and suitable changes (including consequential) have been
made in the draft law (e.g. Penalty amounts, Tribunal provisions, removal of definition of
agriculture, definition of agriculturist, etc.).
2. Law committee while examining the Rules as per stakeholder feedback received, also made
appropriate changes in the Model GST Law (MGL) (e.g. introduction of invoice for reverse
charge, a provision for payment voucher on the basis of feedback received on Invoice Rules,
etc.).
3. The revised drafts include changes on account of examination of comments / feedback
received from trade and industry on the draft MGL put in public domain in November 2016
(comments received till the first week of January 2017 were considered).
4. The overall sections of the CGST Law are the same as the draft MGL as it stood in November
2016, but there have been some changes as outlined below: -
a. Realignment of Chapters to bring them more in consonance with the taxpayer life
cycle i.e. Assessment and Audit Functions brought after Registration, Payment and
Refunds.
b. Internal realignment of sub-sections and clauses as requested by the Union Ministry
of Law during the vetting process.
c. Merging of sections (especially in Transitional Provisions, Appellate, Revision and
Advance Ruling Chapters) to improve readability and matching of sections between
CGST and SGST draft Laws.
d. Schedule V for Registration has been added as a separate section in the draft CGST
Law on the recommendation of the Union Ministry of Law and Schedule has been
omitted.
5. In light of the decision of levy of taxes on Union territories without legislature, suitable
amendments have been made as below: -
a. A new Act called the Union Territory Goods and Services Tax Act will be framed to
levy the tax on UTs without legislature.
b. Suitable changes in the Place of Supply rules contained in the Draft IGST Law to
deem the transactions between territorial waters adjoining a State and the territory of
that State as intra-State supplies.
Definitions
1. Certain definitions have been added (e.g. Section 2(22) (cess), 2(49) (family) etc.) and some
definitions deleted (Rules, First Stage Dealer) as per recommendations of the Council and the
Union Ministry of Law.
a. Since IGST, UTGST definitions have been adopted in the CGST Act and vice versa,
no definitions will be repeated in any of the Acts (e.g. Continuous journey, intra-state
supply etc.), and no expression or term will be defined in various laws simultaneously
as omnibus provision for adoption of definitions contained in any of the other laws
has been provided. (Section 2(119))
b. Only those terms are to be defined which have been used more than three times in the
entire Law.
2. Some sections such as Section 2(26) (common portal) and Section 2(39) (deemed exports)
which were earlier in the Definitions section have been incorporated as separate sections and
referred to in the definitions.
3. Some definitions such as “earlier law” have been redefined as “existing law (Section 2(43))
per other precedents and the Constitution.
4. “Prescribed” was redefined by adding the phrase ‘as per recommendations of the Council’.
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Page 37 of 38
Therefore, all Rules are mandatorily to be approved by the Council.
5. The term “Government” has been defined in various Laws to obviate the need for different
sections in CGST and SGST laws.
Levy and Collection of Tax
1. A new section has been created for tax liability on composite and mixed supplies (Section 8).
2. Applying reverse charge on supplies procured from unregistered persons (Section 9(4)).
3. Definition of a Taxable person has been shifted to the Definitions section (Section 2(107)).
Input Tax Credit
1. The definition of aggregate value of turnover has been amended in section relating to Input
Service Distributor, in order to enable distribution of GST credit in the ratio of turnover of
GST and Non-GST supplies (petroleum etc.) for every State (Section 20).
2. The term “plant and machinery” has been amended so as to specifically exclude pipelines laid
outside the factory premises and telecommunication towers (Section 17).
Registration
1. Liability for registration, deemed registration and persons not liable for registration shifted
from Schedule V to Chapter VI (Sections 22 – 24).
Tax Invoice
1. A payment voucher to be issued to an unregistered person when making payment on reverse
charge basis (Section 31(3)(f)).
2. A provision regarding no unauthorized collection by registered person added (Section 32).
Refunds
1. Interest rate for late payment of tax has been proposed at 18% (Section 50) and 24% (Section
50) under certain extreme circumstances.
2. Interest rate for delayed refunds is proposed at 6%. (Section 56).
Demands and Recovery
1. Tax arrears cannot be the first charge (Section 82) for a bankrupt company and the provisions
of the Insolvency and Bankruptcy Code, 2016 will take precedence over other Central or State
Tax Laws.
Advance Ruling
1. In the initial drafts it was proposed that an Advance Ruling Authority will be constituted
under the Central Act and the same will be adopted under the State Act. Now, it is proposed
that there will be 31 State Advance Ruling Authorities and the same will be adopted in the
Central Act. (Sections 96).
Appeal and Revisions
1. Tribunal provisions added (Section 109(6)).
Miscellaneous Provisions
1. Section relating to Presumption as to documents has been shifted to Miscellaneous Chapter.
Old sections relating to “presumption as to documents in certain cases” has been amended
(Section 144).
2. The Union Ministry of Law has also made an omnibus section to give powers to make Rules
to the Central Government which is easier than providing a long list of rules in the law itself
(Section 164).

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Changes in Model IGST Law (Between 26th Nov 2016 draft to 1st March 2017 draft)
1. Realignment of Sections as per recommendations of the Law Committee and the Union Ministry
of Law.
2. Suitable changes in the Place of Supply rules contained in the Draft IGST Law to deem the
transactions between the territorial waters adjoining a State and the territory of that State as intraState supplies.
3. Inter-State and Intra-State Supply definitions are proposed to be amended to bring more clarity.
4. Provision for apportionment of IGST credit used for payment of UTGST.
5. Some machinery sections have been deleted and an omnibus section for application of CGST
sections on IGST supplies has been added.
Agenda Item 1 - Final Draft Minutes of the 11th GST Council Meeting Agenda for 12th GSTCM
TENTATIVE DRAFT
LEGISLATIVE DEPARTMENT
28-02-17
1
THE <Name of the State> GOODS AND SERVICES
TAX
BILL, 2017
A
BILL
to make a provision for levy and collection of tax on
intra-State supply of goods or services or both by the
State of <Name of the State>.
BE it enacted by Legislature of <Name of the State>
in the Sixty-eighth Year of the Republic of India as
follows:-
CHAPTER I
PRELIMINARY
1. (1) This Act may be called the <Name of the
State>Goods and Services Tax Act, 2017.
Short title, extent
and
commencement.
(2) It extends to the whole of the <Name of the
State>
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(3) It shall come into force on such date as the
State 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 provisions to the commencement of this Act shall be
construed as a reference to the coming into force of that
provision.
2. In this Act, unless the context otherwise requires,–– Definitions.
4 of 1882.
(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 competent to pass any
order or decision under this Act, but does not
include the Commissioner, 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;
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(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 interState 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 and
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 selfassessment, re-assessment, provisional
assessment, summary assessment and best
judgement assessment;
43 of 1961.
(12) "associated enterprises" shall have the same
meaning as assigned to it in section 92A of the
Income-tax Act, 1961;
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(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 Central
Government to collect the tax or any other
amount payable under this Act;
(15) “authorised representative” means the
representative as referred to under section 116;
54 of 1963.
(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 subclause (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;
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(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 an 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 accounts of
the person claiming the input tax credit and which
are used or intended to be used in the course or
furtherance of business;
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(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 the taxable
territory where he has no fixed place of business;
(21) “central tax” means the central goods and
services tax levied under section 9 of the Central
Goods and Services Tax Act;
(22) “cess” shall have the same meaning as
assigned to it in the Goods and Services Tax
(Compensation to States) Act;
38 of 1949.
(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 State tax appointed under section 3;
(25) “Commissioner in the Board” means the
Commissioner referred to in section 168 of the
Central Goods and Services Tax Act;
(26) “common portal” means the common goods
and services tax electronic portal referred to in
section 146;
(27) “common working days” shall mean such
days in succession which are not declared as
gazetted holidays by the Central Government or
the Government of <Name of the State>;
56 of 1980. (28) "company secretary" means a company
secretary as defined in clause (c ) of sub-section
(1) of section 2 of the Company Secretaries Act,
1980;
(29) “competent authority” means such authority
as may be notified by the Government;
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7
(30) “composite supply” means a supply made by
a taxable person to a recipient consisting of two
or more taxable supplies of goods or services or
both, or any combination thereof, which are
naturally bundled and supplied in conjunction
with each other in the ordinary course of business,
one of which is a principal supply;
Illustration: Where goods are packed and transported
with insurance, the supply of goods, packing materials,
transport and insurance is a composite supply and supply
of goods is a principal supply.
(31) “consideration” in relation to the supply of
goods or services or both includes––
(a) any payment made or to be made, whether in
money or otherwise, in respect of, in response to, or
for the inducement of, the supply of goods or services
or both, whether by the recipient or by any other
person but shall not include any subsidy given by the
Central Government or a State Government;
(b) the monetary value of any act or forbearance,
in respect of, in response to, or for the inducement of,
the supply of goods or services or both, whether by the
recipient or by any other person but shall not include
any subsidy given by the Central Government or a
State Government:
Provided that a deposit given in respect of the
supply of goods or services or both shall not be
considered as payment made for such supply unless
the supplier applies such deposit as consideration for
the said supply;
(32) “continuous supply of goods” means a supply
of goods which is provided, or agreed to be
provided, continuously or on recurrent basis,
under a contract, whether or not by means of a
wire, cable, pipeline or other conduit, and for
which the supplier invoices the recipient on a
regular or periodic basis and includes supply of
such goods as the Government may, subject to
such conditions, as it may, by notification,
specify;
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8
(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;
23 of 1959.
(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 Commissioner;
21 of 2000.
(41) “document” includes written or printed record
of any sort and electronic record as defined in 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;
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(43) “electronic cash ledger” means the electronic
cash ledger referred to in sub-section (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 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 the Legislature 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;
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(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 Government of
<Name of the State>;
(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;
80 of 1976 (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;
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(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 and includes –
(a) the integrated goods and services tax charged on
import of goods;
(b) the tax payable under the provisions of subsections (3) and (4) of section 9;
(c) the tax payable under the provisions of sub-section
(3) and (4) of section 5 of the Integrated Goods and
Services Tax Act; or
(d) the tax payable under the provisions of the
Central 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
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
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;
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(68) “job work” means any treatment or process
undertaken by a person on goods belonging to
another registered person and the expression “job
worker” shall be construed accordingly;
(69) “local authority” means––
(a) a “Panchayat” as defined in clause (d) of
article 243 of the Constitution;
(b) a “Municipality” as defined in clause (e) of
article 243P of the Constitution;
(c) a Municipal Committee, a Zilla Parishad, a
District Board, and any other authority legally
entitled to, or entrusted by the Central Government
or any State Government with the control or
management of a municipal or local fund;
41 of 2006. (d) a Cantonment Board as defined in section 3 of
the Cantonments Act, 2006;
(e) a Regional Council or a District Council
constituted under the Sixth Schedule to the
Constitution;
(f) a Development Board constituted under article
371 of the Constitution; or
(g) a Regional Council constituted under article
371A of the Constitution;
(70) “location of the recipient of services” means,-
(a) where a supply is received at a place of
business for which the registration has been obtained,
the location of such place of business;
(b) where a supply is received at a place other than
the place of business for which registration has been
obtained (a fixed establishment elsewhere), the
location of such fixed establishment;
(c) where a supply is received at more than one
establishment, whether the place of business or fixed
establishment, the location of the establishment most
directly concerned with the receipt of the supply; and
(d) in absence of such places, the location of the
usual place of residence of the recipient;
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(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 taxable 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;
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(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
recognized 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;
59 of 1988.
(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 or under the Union
Territory 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;
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(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;
18 of 2013.
(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 cooperative societies;
(j) a local authority;
(k) Central Government or a State Government;
21 of 1860. (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;
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(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 State tax who
is assigned that function by the Commissioner;
(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;
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(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 Commissioner 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;
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(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 subsection (4) of section 9, or under sub-section (3)
or sub-section (4) of section 5 of the Integrated
Goods and Services Tax Act;
(99) “Revisional Authority” means an authority
appointed or authorised under this Act for
revision of decision or orders referred to in
section 108;
(100) “Schedule” means a Schedule appended to
this Act;
42 of 1956.
(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” means the State of <Name of State>;

“State” means the Union Territory of <National
Capital Territory of Delhi/Puducherry>
(104) “State tax” means the tax levied under this
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;
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(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 electro-magnetic means;
(111) “the Central Goods and Services Tax Act”
means the Central 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 interState 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;
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(114) “Union territory” means
(a) The Andaman and Nicobar Islands;
(b) Lakshadweep;
(c) Dadra and Nagar Haveli;
(d) Daman and Diu;
(e) Chandigarh; and
(f) Other 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 selfassessed 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
and where the goods or services 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 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 Central 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
meanings as assigned to them in those Acts.
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CHAPTER II
ADMINISTRATION
3. The Government shall, by notification, specify the
following classes of officers for the purposes of this
Act, namely:––
Officers under
this Act.
List is indicative (a) [Principal/Chief] Commissioner of State tax,
(b) Special Commissioners of State tax,
(c) Additional Commissioners of State tax,
(d) Joint Commissioners of State tax,
(e) Deputy Commissioners of State tax,
(f) Assistant Commissioners of State tax, and
(g) any other class of officers as it may deem fit:
-- of -- Provided that, the officers appointed under the
<Name of the State> Value Added Tax Act, ---- shall be
deemed to be the officers appointed under the provisions
of this Act.
4. (1) The Government 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.
Appointment of
officers.
(2) The Commissioner shall have jurisdiction over
the whole of the State, the Special Commissioner
and an Additional Commissioner in respect of all
or any of the functions assigned to them, shall
have jurisdiction over the whole of the State or
where the State Government so directs, over any
local area thereof, and all other officers shall,
subject to such conditions as may be specified,
have jurisdiction over the whole of the State or
over such local areas as the Commissioner may,
by order, specify.
5. (1) Subject to such conditions and limitations as the
Commissioner may impose, an officer of State tax
may exercise the powers and discharge the duties
conferred or imposed on him under this Act.

Powers of
officers.
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(2) An officer of State tax may exercise the powers
and discharge the duties conferred or imposed
under this Act on any other officer of State 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 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 State tax.
6. (1) Without prejudice to the provisions of this Act,
the officers appointed under the Central 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.
Authorisation of
officers of central
tax as proper
officer in certain
circumstances.
(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
Central Goods and Services Tax Act, as
authorised by the said Act under intimation to
the jurisdictional officer of central tax;
(b) where a proper officer under the Central
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
Central Goods and Services Tax Act.
CHAPTER III
LEVY AND COLLECTION OF TAX
7. (1) For the purposes of this Act, the expression
“supply” includes––
Scope of supply.
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(a) all forms of supply of goods or services or both
such as sale, transfer, barter, exchange, license, rental,
lease or disposal made or agreed to be made for a
consideration by a person in the course or furtherance of
business;
(b) import of services for a consideration whether or not
in the course or furtherance of business;
(c) the activities specified in Schedule I, made or
agreed to be made without a consideration; and
(d) the activities to be treated as supply of goods or
supply of services as referred to in Schedule II.
(2) Notwithstanding anything contained in sub-section
(1),––
(a) activities or transactions specified in Schedule III;
or
(b) such activities or transactions undertaken by the
Central Government, a State Government or any local
authority in which they are engaged as public authorities,
as may be notified by the Government on the
recommendations of the Council,

shall be treated neither as a supply of goods nor a
supply of services.
(3) Subject to the provisions of sub-sections (1) and (2),
the Government may, on the recommendations of the
Council, specify, by notification, the transactions that
are to be treated as—
(a) a supply of goods and not as a supply of services;
or
(b) a supply of services and not as a supply of goods.
8. The tax liability on a composite or a mixed supply
shall be determined in the following manner, namely:
—
Tax liability on
composite and
mixed supplies.
(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
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(b) a mixed supply comprising two or more supplies
shall be treated as a supply of that particular supply which
attracts the highest rate of tax.
9. (1) Subject to the provisions of sub-section (2), there
shall be levied a tax called the <Name of the State>
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.
Levy and
Collection.
(2) The State 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 State 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.
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(5) The Government may, on the recommendations
of the Council, by notification, specify categories
of services the tax on intra-State supplies of
which shall be paid by the electronic commerce
operator if such services are supplied through it,
and all the provisions of this Act shall apply to
such electronic commerce operator as if he is the
supplier liable for paying the tax in relation to the
supply of such services:
Provided that where an electronic commerce operator
does not have a physical presence in the taxable territory,
any person representing such electronic commerce
operator for any purpose in the taxable territory shall be
liable to pay tax:
Provided further that where an electronic commerce
operator does not have a physical presence in the taxable
territory and also he does not have a representative in the
said territory, such electronic commerce operator shall
appoint a person in the taxable territory for the purpose
of paying tax and such person shall be liable to pay tax.
10. (1) Notwithstanding anything to the contrary
contained in this Act but subject to the provisions of
sub-sections (3) and (4) of section 9, a registered
person, whose aggregate turnover in the preceding
financial year did not exceed fifty lakh rupees may
opt to pay, in lieu of the tax payable by him, an
amount calculated at such rate as may be prescribed,
but not exceeding,--
Composition
levy.
(a) one per cent. of the turnover in State in case
of a manufacturer,
(b) two and a half per cent. of the turnover in
State 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 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.
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(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 on the recommendations of the Council:
43 of 1961 Provided that where more than one registered
person 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 subsection.
(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 subsection (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.
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(5) If the proper officer has reasons to believe that a
taxable person has paid tax under sub-section (1)
despite not being eligible, such person shall, in
addition to any tax that may be payable by him
under any other provisions of this Act, be liable
to a penalty and the provisions of section 73 or
section 74 shall, mutatis mutandis, apply for
determination of tax and penalty.
11. (1) Where the Government is satisfied that it is
necessary in the public interest so to do, it may, on the
recommendations of the Council, by notification,
exempt generally either absolutely or subject to such
conditions as may be specified therein, goods or
services or both of any specified description from the
whole or any part of the tax leviable thereon with
effect from such date as may be specified in such
notification.
Power to grant
exemption from
tax.
(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.
(4) Any notification issued by the Central
Government, on the recommendations of the
Council, under sub-section (1) of section 11 of the
Central Goods and Services Tax Act shall be
deemed to be a notification issued under this Act.
Explanation.––For the purposes of this section, where an
exemption in respect of any goods or services or both
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from the whole or part of the tax leviable thereon has been
granted absolutely, the registered person supplying such
goods or services or both shall not collect the tax, in
excess of the effective rate, on such supply of goods or
services or both.
CHAPTER IV
TIME AND VALUE OF SUPPLY
12. (1) The liability to pay tax on goods shall arise at the
time of supply, as determined in terms of the
provisions of this section.
Time of supply of
goods.
(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 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.
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(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 is 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), 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),
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.
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(6) The time of supply to the extent it relates to an
addition in the value of supply by way of interest,
late fee or penalty for delayed payment of any
consideration shall be the date on which the
supplier receives such addition in value.
13. (1) The liability to pay tax on services shall arise at
the time of supply, as determined in terms of the
provisions of this section.
Time of supply of
services.
(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 subsection (2) of section 31 or the date of receipt of
payment, whichever is earlier; or
(c)the date on which the recipient shows the receipt of
services in his books of account, in a case where the
provisions of clause (a) or clause (b) do not apply:
Provided that where the supplier of taxable service
receives an amount upto one thousand rupees in excess
of the amount indicated in the tax invoice, the time of
supply to the extent of such excess amount shall, at the
option of the said supplier, be the date of issue of
invoice relating to such excess amount.
Explanation .––For the purposes of clauses (a) and
(b)-
(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.
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(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 of services in the manner specified in subsection (2), 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.
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(6) The time of supply to the extent it relates to an
addition in the value of supply by way of interest,
late fee or penalty for delayed payment of any
consideration shall be the date on which the
supplier receives such addition in value.
14. Notwithstanding anything contained in section 12 or
section 13, the time of supply, where there is a change
in the rate of tax in respect of goods or services or
both, shall be determined in the following manner,
namely:––
Change in rate of
tax in respect of
supply of goods
or services.
(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
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(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 accounts of the
supplier or the date on which the payment is credited to
his bank account, whichever is earlier.
15. (1) The value of a supply of goods or services or both
shall be the transaction value, which is the price
actually paid or payable for the said supply of goods
or services or both where the supplier and the
recipient of the supply are not related and the price is
the sole consideration for the supply.
Value of taxable
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 Central 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, 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
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(e) subsidies directly linked to the price excluding
subsidies provided by the Central Government and
State Governments.
Explanation.––For the purposes of this subsection, 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 subsection (1), the same shall be determined in such
manner as may be prescribed.
(5) Notwithstanding anything contained in subsection (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 -
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i. such persons are officers or directors of
one another's businesses;
ii. such persons are legally recognized
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. (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.
Eligibility and
conditions for
taking input tax
credit.
(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,––
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(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 purpose 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
utilization 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.
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43 of 1961.
(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
due date of furnishing of the return under section
39 for the month of September following the end
of financial year to which such invoice or invoice
relating to such debit note pertains or furnishing
of the relevant annual return, whichever is earlier.
17. (1) Where the goods or services or both are used by
the registered person partly for the purpose of any
business and partly for other purposes, the amount of
credit shall be restricted to so much of the input tax
as is attributable to the purposes of his business.
Apportionment of
credit and
blocked credits.
(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;

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(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 subsection (1) of section 16 and sub-section (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
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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 reconstruction, renovation, additions or alterations or
repairs, to the extent of capitalization, to the said
immovable property;
(e) goods or services or both on which tax has been
paid under section 10;
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(f) goods or services or both received by a nonresident 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 terms 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. (1) Subject to such conditions and restrictions as may
be prescribed–

Availability of
credit in special
circumstances.
(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 subsection (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;
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(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.
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(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 exempt absolutely, 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 per cent 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
section15, 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. (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.
Taking input tax
credit in respect
of inputs sent for
job work.
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(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 subsection (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.
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(7) Nothing contained in sub-section (3) or subsection (6) shall apply to moulds and dies, jigs
and fixtures, or tools sent out to a job worker for
job work.
Explanation.- For the purpose of this section,
“principal” means the person referred to in
section 143.
20. (1) The Input Service Distributor shall distribute the
credit of State tax as State tax or integrated tax and
integrated tax as integrated tax or State tax, by way
of issue of document containing the amount of input
tax credit being distributed in such manner as may be
prescribed.
Manner of
distribution of
credit by Input
Service
Distributor.
(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
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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 value of turnover, reduced by the amount of
any duty or tax levied under entry 84 of List I of
the Seventh Schedule to the Constitution and entry
51 and 54 of List II of the said Schedule.
21. Where the Input Service Distributor distributes the
credit in contravention of the provisions contained in
Manner of
recovery of credit
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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.
distributed in
excess.
CHAPTER - VI
REGISTRATION
22. (1) Every supplier making a taxable supply of goods
or services or both in the State shall be liable to be
registered under this Act if his aggregate turnover
in a financial year exceeds twenty lakh rupees:
Persons liable for
registration.
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.
Every supplier making a taxable supply of goods or
services or both in the State, shall be liable to be
registered under this Act if his aggregate turnover in a
financial year exceeds ten lakh rupees.
Only in SGST
Law for special
category States
without the
proviso
(2) Every person who, on the day immediately
preceding the appointed day, is registered or
holds a license under an existing law, shall be
liable to be registered under this Act with effect
from the appointed day.
(3) Where a business carried on by a taxable person
registered under this Act is transferred, whether
on account of succession or otherwise, to another
person as a going concern, the transferee or the
successor, as the case may be, shall be liable to be
registered with effect from the date of such
transfer or succession.
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(4) Notwithstanding anything contained in subsections (1) and (3), in a case of transfer pursuant
to sanction of a scheme or an arrangement for
amalgamation or, as the case may be, de-merger
of two or more companies pursuant to an order of
a High Court, Tribunal 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.
Explanation.––For the purposes of this section,––
(i) the expression aggregate turnover shall include all
supplies made by the taxable person, whether on his own
account or made on behalf of all his principals;
(ii) the supply of goods, after completion of job-work, by
a registered job worker shall be treated as the supply of
goods by the principal referred to in section 143, and the
value of such goods shall not be included in the aggregate
turnover of the registered job worker.
(iii) the expression “special category States” shall mean
the States as specified in sub-clause (g) of clause (4) of
article 279A of the Constitution.
23. (1) The following persons shall not be liable to
registration, namely:––
Persons not liable
for registration.
(a) any person engaged exclusively in the business of
supplying goods or services or both that are not liable to
tax or wholly exempt from tax under this Act or under the
Integrated Goods and Services Tax Act;
(b) an agriculturist, to the extent of supply of produce out
of cultivation of land.
(2) The Government may, on the recommendations
of the Council, by notification, specify the
category of persons who may be exempted from
obtaining registration under this Act.
24. Notwithstanding anything contained in sub-section
(1) of section 22, the following categories of persons
undertaking taxable supplies shall be required to be
registered under this Act,-
Compulsory
registration in
certain cases.
(i) persons making any inter-State taxable supply;
(ii) casual taxable persons;
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(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;
(vi) persons who are required to deduct tax under section
51, whether or not separately registered under this Act;
(vii) persons who supply goods or services or both on
behalf of other taxable persons whether as an agent or
otherwise;
(viii) input service distributor, whether or not separately
registered under this Act;
(ix) persons who supply goods or services or both, other
than supplies specified under sub-section (5) of section 9,
through such electronic commerce operator who is
required to collect tax at source under section 52;
(x) every electronic commerce operator;
(xi) every person supplying online information and data
base access or retrieval services from a place outside
India to a person in India, other than a registered person;
and
(xii) such other person or class of persons as may be
notified by the Government on the recommendations of
the Council.
25. (1) Every person who is liable to be registered under
section 22 or section 24 shall apply for registration
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:
Procedure for
Registration.
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
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registration in the coastal State where the nearest point
of the appropriate baseline is located.
(2) A person seeking registration under this Act shall
be granted a single registration:
Provided that a person having multiple business
verticals in the State 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.
43 of 1961.
(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 subsection (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.
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(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 subsection (1),––
46 of 1947.
(a) any specialized agency of the United Nations
Organization or any Multilateral Financial Institution
and Organization 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 an Unique Identity Number
shall be deemed to have been granted after the
expiry of the period prescribed under sub-section
(10), if no deficiency has been communicated to
the applicant within that period.
26. (1) The grant of registration or the Unique Identity
Number under the Central 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
Deemed
Registration.
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under this Act within the time specified in sub-section
(10) of section 25.
(2) Notwithstanding anything contained in subsection (10) of section 25, any rejection of
application for registration or the Unique Identity
Number under the Central Goods and Services
Tax Act shall be deemed to be a rejection of
application for registration under this Act.
27. (1) The certificate of registration issued to a casual
taxable person or a non-resident taxable person shall
be valid for a 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:
Special provisions
relating to casual
taxable person
and non-resident
taxable person.
Provided that the proper officer may, on sufficient
cause being shown by the said taxable person, extend the
said period of ninety days by a further period not
exceeding ninety days.
(2) A casual taxable person or a non-resident taxable
person shall, at the time of submission of
application for registration under sub-section (1)
of section 25, make an advance deposit of tax in
an amount equivalent to the estimated tax liability
of such person for the period for which the
registration is sought:
Provided that where any extension of time is sought
under sub-section (1), such taxable person shall deposit
an additional amount of tax equivalent to the estimated
tax liability of such person for the period for which the
extension is sought.
(3) The amount deposited under sub-section (2) shall
be credited to the electronic cash ledger of such
person and shall be utilised in the manner
provided under section 49.
28. (1) Every registered person and a person to whom a
Unique Identity Number has been assigned shall
inform the proper officer of any changes in the
information furnished at the time of registration or
Amendment of
registration.
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subsequent thereto, in such form, 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 Central Goods and Services Tax Act shall be
deemed to be a rejection or approval under this
Act.
29. (1) The proper officer may, either on his own motion
or on an application filed by the registered person or
by his legal heirs, in case of death of such person,
cancel the registration, in such manner and within
such period as may be prescribed, having regard to
the circumstances where,––
Cancellation of
registration.
(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.
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(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) the 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 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 taxable 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 Central
Goods and Services Tax Act shall be deemed to
be a cancellation of registration under this Act.
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(5) Every registered person whose registration is
cancelled shall pay an amount, by way of debit in
the electronic credit ledger or electronic cash
ledger, equivalent to the credit of input tax in
respect of inputs held in stock and inputs
contained in semi-finished or finished goods held
in stock or capital goods or plant and machinery
on the day immediately preceding the date of such
cancellation or the output tax payable on such
goods, whichever is higher, calculated in such
manner as may be prescribed:
Provided that in case of capital goods or plant and
machinery, the taxable person shall pay an amount equal
to the input tax credit taken on the said capital goods or
plant and machinery, reduced by such percentage points
as may be prescribed or the tax on the transaction value
of such capital goods or plant and machinery under
section 15, whichever is higher.
(6) The amount payable under sub-section (5) shall
be calculated in such manner as may be
prescribed.
30. (1) Subject to such conditions as may be prescribed,
any registered person, whose registration is cancelled
by the proper officer on his own motion, may apply
to such officer for revocation of cancellation of the
registration in the prescribed manner within thirty
days from the date of service of the cancellation
order.
Revocation of
cancellation of
registration.
(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 Central Goods and Services Tax Act
shall be deemed to be a revocation of cancellation
of registration under this Act.
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CHAPTER- VII
TAX INVOICE, CREDIT AND DEBIT NOTES
31. (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 period prescribed, 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 the conditions 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 required to be issued.
(3) Notwithstanding anything contained in subsections (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
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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 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 (4) of section 9 shall issue an
invoice in respect of goods or services or both received
by him on the date of receipt of goods or services or
both;
(g) a registered person who is liable to pay tax under subsection (3) or sub-section (4) of section 9 shall issue a
payment voucher at the time of making payment to the
supplier who is not registered under the Act.
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(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 subsection (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 effected before
such cessation.
(7) Notwithstanding anything contained in subsection (1), where the goods being sent or taken
on approval for sale or return are removed before
the supply takes place, the invoice shall be issued
before or at the time of supply or six months from
the date of removal, whichever is earlier.
Explanation.––For the purposes of this section, the
expression “tax invoice” shall include any revised
invoice issued by the supplier in respect of a supply made
earlier.
32. (1) A person who is not a registered person shall not
collect in respect of any supply of goods or services
or both any amount by way of tax under this Act.
Prohibition on
unauthorised
collection of tax
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(2) No registered person shall collect tax except in
accordance with the provisions of this Act or the
rules made thereunder.
33. Notwithstanding anything contained in this Act or
any other law for the time being in force, where any
supply is made for a consideration, every person who
is liable to pay tax for such supply shall prominently
indicate in all documents relating to assessment, tax
invoice and other like documents, the amount of tax
which shall form part of the price at which such
supply is made.
Amount of tax to
be indicated in tax
invoice and other
documents.

34. (1) Where a tax invoice has been issued for supply of
any goods or services or both and the taxable value
or tax charged in that tax invoice is found to exceed
the taxable value or tax payable in respect of such
supply, or where the goods supplied are returned by
the recipient, or where goods or services or both
supplied are found to be deficient, the registered
person, who has supplied such goods or services or
both, may issue to the recipient a credit note
containing such particulars as may be prescribed.
Credit and debit
notes.
(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 filing 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.
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(3) Where a tax invoice has been issued for supply of
any goods or services or both and the taxable
value or tax charged in that tax invoice is found
to be less than the taxable value or tax payable in
respect of such supply, the registered person, who
has supplied such goods or services or both, shall
issue to the recipient a debit note containing such
particulars as may be prescribed.
(4) Any registered person who issues a debit note in
relation to a supply of goods or services or both
shall declare the details of such debit note in the
return for the month during which such debit note
has been issued and the tax liability shall be
adjusted in such manner as may be prescribed.
Explanation.––For the purposes of this Act, the
expression “debit note” shall include a supplementary
invoice.
CHAPTER VIII
ACCOUNTS AND RECORDS
35. (1) Every registered person shall keep and maintain,
at his principal place of business, as mentioned in the
certificate of registration, a true and correct account
of-
(a) production or manufacture of goods;
(b) inward or 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:
Accounts and
other records.
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.
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(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 such goods as may be prescribed.
(3) The Commissioner may notify a class of taxable
persons to maintain additional accounts or
documents for such purpose as may be specified
therein.
(4) Where the Commissioner considers that any class
of taxable persons is not in a position to keep and
maintain accounts in accordance with the
provisions of this section, he may, for reasons to
be recorded in writing, permit such class of
taxable persons to maintain accounts in such
manner as may be prescribed.
(5) Every registered person whose turnover during a
financial year exceeds the prescribed limit shall
get his accounts audited by a chartered accountant
or a cost accountant 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 subsection (5) of section 17, where the registered
person fails to account for the goods or services
or both in accordance with sub-section (1), the
proper officer shall determine the amount of tax
payable on the goods or services or both that are
not accounted for, as if such goods or services or
both had been supplied by such person and the
provisions of section 73 or section 74, as the case
may be, shall, mutatis mutandis, apply for
determination of such tax.
36. Every registered person required to keep and
maintain books of account or other records under subsection (1) of section 35 shall retain them until the
expiry of seventy two months from the due date of
Period of
retention of
accounts.
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filing of annual return for the year pertaining to such
accounts and records:
Provided that a registered person, who is a party to an
appeal or revision or any other proceedings before any
Appellate Authority or Revisional Authority or Appellate
Tribunal or court, whether filed by him or by the
Commissioner, or is under investigation for an offence
under Chapter XIX, shall retain the books of account and
other records pertaining to the subject matter of such
appeal or revision or proceedings or investigation for a
period of one year after final disposal of such appeal or
revision or proceedings or investigation, or for the period
specified above, whichever is later.
CHAPTER- IX
RETURNS
37. (1) Every registered person, other than an Input
Service Distributor, a non-resident taxable person and
a person paying tax under the provisions of section
10, 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:
Furnishing details
of outward
supplies.
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 central tax shall be deemed to be
notified by the Commissioner.
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(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 subsection (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. (1) Every registered person, other than an Input
Service Distributor or a non-resident taxable person
or a person paying tax under the provisions of section
10, section 51 or section 52, shall verify, validate,
modify or delete, if required, the details relating to
outward supplies and credit or debit notes
communicated under sub-section (1) of section 37 to
prepare the details of his inward supplies and credit
or debit notes and may include therein, the details of
inward supplies and credit or debit notes received by
Furnishing details
of inward
supplies.
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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, 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 central 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.
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(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. (1) Every registered person, other than an Input
Service Distributor or a non-resident taxable person
or a person paying tax under the provisions of section
10, section 51 or section 52 shall, for every calendar
month or part thereof, furnish, in such form and
manner as may be prescribed, a return, electronically,
of inward and outward supplies of goods or services
or both, input tax credit availed, tax payable, tax paid
and other particulars as may be prescribed on or
before the twentieth day of the month succeeding
such calendar month or part thereof.
Furnishing of
Returns.
(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
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.
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(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 central 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 subsection (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 effected during such tax period.
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(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) subsection (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, as the case may be,
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. 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.
First Return.
41. (1) Every registered person shall, subject to such
conditions and restrictions as may be prescribed, be
entitled to take credit of eligible input tax, as selfassessed, in his return and such amount shall be
credited on a provisional basis to his electronic credit
ledger.
Claim of input tax
credit and
provisional
acceptance
thereof.
(2) The credit referred to in sub-section (1) shall
be utilised only for payment of self-assessed
output tax as per the return referred to in the said
sub-section.
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42. (1) The details of every inward supply furnished by a
registered person (hereafter in this section referred to
as the “recipient”) for a tax period shall, in such
manner and within such time as may be prescribed,
be matched––

Matching,
reversal and
reclaim of input
tax credit.
(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;
51 of 1975.
(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.
51 of 1975 (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.
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(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 subsection (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.
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(10) The amount reduced from the output tax
liability in contravention of the provisions of subsection (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 subsection (3) of section 50.
43. (1) The details of every credit note relating to outward
supply furnished by a registered person (hereafter in
this section referred to as the “supplier”) for a tax
period shall, in such manner and within such time as
may be prescribed, be matched––
Matching,
reversal and
reclaim of
reduction in
output tax
liability.
(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.
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(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 subsection (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.
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(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. (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 nonresident 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.
Annual return.
(2) Every registered person who is required to get his
accounts audited under sub-section (5) of section
35 shall furnish, electronically, the annual return
under sub-section (1) along with the audited copy
of the annual accounts and a reconciliation
statement, reconciling the value of supplies
declared in the return furnished for the financial
year with the audited annual financial statement,
and such other particulars as may be prescribed.
45. Every registered person who is required to furnish a
return under sub-section (1) of section 39 and whose
registration has been cancelled shall furnish a final
return within three months of the date of cancellation
or date of cancellation order, whichever is later, in
such form and manner as may be prescribed.
Final return.
46. Where a registered person fails to furnish a return
under section 39, 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.

Notice to return
defaulters.
47. (1) Any registered person who fails to furnish the
details of outward or inward supplies required under
section 37 or section 38 or returns required under
section 39 or section 45 by the due date shall pay a
late fee of one hundred rupees for every day during
Levy of late fee.
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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.
48. (1) The manner of approval of goods and services tax
practitioners, their eligibility conditions, duties and
obligations, manner of removal and other conditions
relevant for their functioning shall be such as may be
prescribed.
Goods and
services tax
practitioners.
(2) A registered person may authorise an approved
goods and service 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 in such
manner as may be prescribed.
(3) Notwithstanding anything contained in subsection (2), the responsibility for correctness of
any particulars furnished in the return or other
details filed by the goods and services tax
practitioners shall continue to rest with the
registered person on whose behalf such return and
details are furnished.
CHAPTER-X
PAYMENT OF TAX
49. (1) Every deposit made towards tax, interest, penalty,
fee or any other amount by a taxable 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.
Payment of tax,
interest, penalty
and other
amounts.
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(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 utilised towards
payment of integrated tax and the amount
remaining, if any, may be utilised towards the
payment of central tax and State tax, or as the case
may be, Union territory tax, in that order;
(b) the central tax shall first be utilised towards
payment of central tax and the amount remaining, if
any, may be utilised towards the payment of integrated
tax;
(c) the State tax shall first be utilised towards
payment of State tax and the amount remaining,
if any, may be utilised towards the 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
the payment of integrated tax;
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(e) the central tax shall not be utilised towards
payment of State tax or Union territory tax; and
(f) the State tax or Union territory tax shall not be
utilised towards payment of central tax.
(6) The balance in the electronic cash ledger or
electronic credit ledger after payment of tax,
interest, penalty, fee or any other amount payable
under this Act or the rules made thereunder may
be refunded in accordance with the provisions of
section 54.
(7) All liabilities of a taxable person under this Act
shall be recorded and maintained in an electronic
liability register in such manner as may be
prescribed.
(8) Every taxable person shall discharge his tax and
other dues under this Act or the rules made
thereunder in the following order, namely:––
(a) self-assessed tax, and other dues related to
returns of previous tax periods;
(b) self-assessed tax, and other dues related to the
return of the current tax period;
(c) any other amount payable under this Act or the
rules made thereunder including the demand
determined under section 73 or section 74.
(9) Every person who has paid the tax on goods or
services or both under this Act shall, unless the
contrary is proved by him, be deemed to have
passed on the full incidence of such tax to the
recipient of such goods or services or both.
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Explanation.––For the purposes of this section,
(a) the date of credit to the account of the
Government in the authorised bank shall be
deemed to be the date of deposit in the electronic
cash ledger.
(b) the expression,-
(i) “tax dues” means the tax payable under this Act
and does not include interest, fee and penalty; and
(ii) “other dues” means interest, penalty, fee or any
other amount payable under this Act or the rules
made thereunder.
50. (1) Every person who is liable to pay tax in
accordance with the provisions of this Act or the rules
made thereunder, fails to pay the tax or any part
thereof to the Government within the period
prescribed, shall for the period for which the tax or
any part thereof remains unpaid, pay on his own,
interest at such rate, not exceeding eighteen per cent.,
as may be notified by the Government on the
recommendations of the Council.
Interest on
delayed payment
of tax.
(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. (1) Notwithstanding anything to the contrary
contained in this Act, the Government may mandate,-
Tax deduction at
source.
(a) a department or establishment of the Central
Government or State Government; or
(b) local authority; or
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(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 tax 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.
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(4) If any deductor fails to furnish to the deductee the
certificate, after deducting the tax at source,
within five days of crediting the amount so
deducted to the Government, the deductor shall
pay, by way of a late fee, a sum of one hundred
rupees per day from the day after the expiry of
such five day period until the failure is rectified,
subject to a maximum amount of five thousand
rupees.
(5) The deductee shall claim credit, in his electronic
cash ledger, of the tax deducted and reflected in
the return of the deductor furnished under subsection (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. (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 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.
Collection of tax
at source.
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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 subsection (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 subsection (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.
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(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.
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(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 subsection (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 operators 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.
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(14) Any person who fails to furnish the
information required by the notice served under
sub-section (12) shall, without prejudice to any
action that may be taken under section 122, be
liable to a penalty which may extend to twenty
five thousand rupees.
Explanation.—For the purposes of this section,
the expression ‘concerned supplier’ shall mean
the supplier of goods or services or both making
supplies through the operator.
53. On utilisation of input tax credit availed under this
Act for payment of tax dues under the Integrated
Goods and Services Tax Act in accordance with subsection (5) of section 49, as reflected in the valid
return furnished under sub-section (1) of section 39,
the amount collected as State tax shall stand reduced
by an amount equal to such credit so utilised and the
State Government shall transfer an amount equal to
the amount so reduced from the State tax account to
the integrated tax account in such manner and within
such time as may be prescribed.
Transfer of input
tax credit.
CHAPTER XI
REFUNDS
54. (1) Any person claiming refund of any tax and interest
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:
Refund of tax.
Provided that a registered person, claiming refund of
any balance in the electronic cash ledger as per subsection (6) of section 49, may claim such refund in the
return furnished under section 39 in such manner as may
be prescribed.
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46 of 1947.
(2) A specialized agency of the United Nations
Organization or any Multilateral Financial
Institution and Organization 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 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 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
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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 subsection (5), the proper officer may, in the case of
any claim for refund on account of export of
goods or services or both made by registered
persons, other than such category of registered
persons as may be notified in this behalf, 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 subsection (5) within sixty days from the date of
receipt of application complete in all respects.
(8) Notwithstanding anything contained in subsection (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 on inputs or input services used
in the goods or services or both which are exported out
of India;
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(b) refund of unutilised input tax credit under subsection (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.
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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 nonresident 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 subsection (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 on inputs or
input services used in the goods or services or both
which are exported out of India, or refund of tax on the
supply of goods regarded as deemed exports, or refund
of unutilised input tax credit as provided under subsection (3) .
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(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 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 filed;
(c) in the case of services exported out of India
where a refund of tax paid is available in respect of
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;
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(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.
46 of 1947.
55. The Government may, on the recommendations of the
Council, by notification, specify any specialized
agency of the United Nations Organization or any
Multilateral Financial Institution and Organization
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.
Refund in certain
cases.
56. If any tax ordered to be refunded under sub-section
(5) of section 54 to any applicant is not refunded
within sixty days from the date of receipt of
application under sub-section (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 subsection till the date of refund of such tax:
Interest on
delayed refunds.
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 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.
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Explanation.––For the purposes of this section, where
any order of refund is made by an Appellate Authority,
Appellate Tribunal or any court against an order of the
proper officer under sub-section (5) of section 54, the
order passed by the Appellate Authority, Appellate
Tribunal or by the court shall be deemed to be an order
passed under the said sub-section (5).
57. The Government shall constitute a Fund, to be called
the Consumer Welfare Fund and there shall be
credited to the Fund,––
Consumer
Welfare Fund.
(a) the amount of tax referred to in sub-section
(5) of section 54;
(b) any income from investment of the amount
credited to the Fund; and
(c) such other monies received by it,
in such manner as may be prescribed.
58. (1) All sums credited to the Fund shall be utilised by
the Government for the welfare of the consumers in
such manner as may be prescribed.
Utilisation of
Fund.
(2) The Government or the authority specified by it
shall maintain proper and separate account and
other relevant records in relation to the Fund and
prepare an annual statement of accounts in such
form as may be prescribed in consultation with
the Comptroller and Auditor-General of India.
CHAPTER– XII
ASSESSMENT
59. Every registered person shall self assess the taxes
payable under this Act and furnish a return for each
tax period as specified under section 39.
Self-Assessment.
60. (1) Subject to the provisions of sub-section (2), where
the taxable person is unable to determine the value of
goods or services or both or determine the rate of tax
applicable thereto, he may request the proper officer
Provisional
Assessment.
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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
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.
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(5) Where the registered person is entitled to a refund
consequent to the order for final assessment under
sub-section (3), subject to the provisions of subsection (8) of section 54, interest shall be paid on such
refund as provided in section 56.
61. (1) The proper officer may scrutinize the return and
related particulars furnished by the registered person
to verify the correctness of the return and inform him
of the discrepancies noticed, if any, in such manner
as may be prescribed and seek his explanation
thereto.
Scrutiny of
returns.
(2) In case the explanation is found acceptable, the
registered person shall be informed accordingly and
no further action shall be taken in this regard.
(3) In case no satisfactory explanation is furnished
within a period of thirty days of being informed by
the proper officer or such further period as may be
permitted by him or where the registered person, after
accepting the discrepancies, fails to take the
corrective measure in his return for the month in
which the discrepancy is accepted, the proper officer
may initiate appropriate action including those under
section 65 or section 66 or section 67, or proceed to
determine the tax and other dues under section 73 or
section 74.
62. (1) Notwithstanding anything to the contrary
contained in section 73 or section 74, where a
registered person fails to furnish the return under
section 39 or section 45, even after the service of a
notice under section 46, the proper officer may
proceed to assess the tax liability of the said person to
the best of his judgement taking into account all the
relevant material which is available or which he has
gathered and issue an assessment order within a
period of five years from the date specified under
section 44 for furnishing of the annual return for the
financial year to which the tax not paid relates.
Assessment of
non-filers of
returns.
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(2) Where the registered person furnishes a valid return
within thirty days of the service of the assessment
order under sub-section (1), the said assessment order
shall be deemed to have been withdrawn but the
liability for payment of interest under sub-section (1)
of section 50 or for payment of late fee under section
47 shall continue.

63. Notwithstanding anything to the contrary contained
in section 73 or section 74,where a taxable person
fails to obtain registration even though liable to do so
or whose registration has been cancelled under subsection (2) of section 29 but who was liable to pay
tax, the proper officer may proceed to assess the tax
liability of such taxable person to the best of his
judgement for the relevant tax periods and issue an
assessment order within a period of five years from
the date specified under section 44 for furnishing of
the annual return for the financial year to which the
tax not paid relates:
Assessment of
unregistered
persons.
Provided that no such assessment order shall be passed
without giving the person an opportunity of being heard.
64. (1) The proper officer may, on any evidence showing
a tax liability of a person coming to his notice, with
the previous permission of Additional Commissioner
or Joint Commissioner, proceed to assess the tax
liability of such person to protect the interest of
revenue and issue an assessment order, if he has
sufficient grounds to believe that any delay in doing
so may adversely affect the interest of revenue:
Summary
assessment in
certain special
cases.
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.
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(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. (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.
Audit by tax
authorities.
(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,––
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(i) to afford him the necessary facility to verify the
books of account or other documents as he may
require;
(ii) to furnish such information as he may require
and render assistance for timely completion of the
audit.
(6) On conclusion of audit, the proper officer shall,
within thirty days, inform the registered person,
whose records are audited, about the findings, his
rights and obligations and the reasons for such
findings.
(7) Where the audit conducted under sub-section (1)
results in detection of tax not paid or short paid or
erroneously refunded, or input tax credit wrongly
availed or utilised, the proper officer may initiate
action under section 73 or section 74.
66. (1) If at any stage of scrutiny, inquiry, investigation
or any other proceedings before him, any officer not
below the rank of Assistant Commissioner, having
regard to the nature and complexity of the case and
the interest of revenue, is of the opinion that the value
has not been correctly declared or the credit availed
is not within the normal limits, he may, with the prior
approval of the Commissioner, direct such registered
person by a communication in writing to get his
records including books of account examined and
audited by a chartered accountant or a cost accountant
as may be nominated by the Commissioner.
Special audit.
(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.
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(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 subsection (1) results in detection of tax not paid or
short paid or erroneously refunded, or input tax
credit wrongly availed or utilised, the proper
officer may initiate action under section 73 or
section 74.
CHAPTER XIV
INSPECTION, SEARCH, SEIZURE AND ARREST
67. (1) Where the proper officer, not below the rank of
Joint Commissioner, has reasons to believe that––
Power of
inspection, search
and seizure.
(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
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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 State 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 State 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 on 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.
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(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.
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(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.
2 of 1974. (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.
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(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 issue of tax invoices or bills of supply by
such taxable person, and on return of goods so
purchased by such officer, such taxable person or
any person in charge of the business premises
shall refund the amount so paid towards the goods
after cancelling any tax invoice or bill of supply
issued earlier.
68. (1) The Government may require the person in
charge of a conveyance carrying any consignment of
goods of value exceeding such amount as may be
specified to carry with him such documents and such
devices as may be prescribed.
Inspection of
goods in
movement.
(2) The details of documents required to be carried
under sub-section (1) shall be validated in such
manner as may be prescribed.
(3) Where any conveyance referred to in sub-section
(1) is intercepted by the proper officer at any
place, he may require the person in charge of the
said conveyance to produce the documents
prescribed under the said sub-section and devices
for verification, and the said person shall be liable
to produce the documents and devices and also
allow the inspection of goods.
69. (1) Where the Commissioner has reasons to believe
that any 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 subsection (2) of the said section, he may, by order,
authorise any officer of State tax to arrest such
person.

Power to arrest.
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(2) Where a person is arrested under sub-section (1)
for an offence specified under sub-section (5) of
section 132, the officer authorised to arrest a
person shall inform such person of the grounds of
arrest and produce him before a Magistrate within
twenty four hours.
2 of 1974.
(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
5 of 1908 70. (1) The proper officer under this Act shall have power
to summon any person whose attendance he considers
necessary either to give evidence or to produce a
document or any other thing in any inquiry in the
same manner, as provided in the case of a civil court
under the provisions of the Code of Civil Procedure,
1908.
Power to summon
persons to give
evidence and
produce
documents.
45 of 1860.
(2) Every such inquiry referred to in sub-section (1)
shall be deemed to be a “judicial proceedings”
within the meaning of section 193 and section 228
of the Indian Penal Code.
71. (1) Any officer under this Act authorised by the
proper officer not below the rank of Joint
Commissioner shall have access to any place of
business of a registered person to inspect books of
account, documents, computers, computer programs,
computer software whether installed in a computer or
otherwise and such other things as he may require and
which may be available at such place, for the
purposes of carrying out any audit, scrutiny,
verification and checks as may be necessary to
safeguard the interest of revenue.

Access to
business
premises.
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(2) Every person in charge of place referred to in subsection (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;
18 of 2013. (iv) cost audit report, if any, under section 148 of
the Companies Act, 2013;
43 of 1961.
(v) the income-tax audit report, if any, under
section 44AB of the Income-tax Act, 1961; and
(vi) any other relevant record,
for the scrutiny by the officer or audit party or the
chartered accountant or cost accountant within a period
not exceeding fifteen working days from the day when
such demand is made, or such further period as may be
allowed by the said officer or the audit party or the
chartered accountant or cost accountant.
72. (1) All officers of Police, Railways, Customs, and
those engaged in the collection of land revenue,
including village officers, and officers of central tax
and officers of the Union territory tax shall assist the
proper officers in the implementation of this Act.
Officers to assist
proper officers.
(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
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73. (1) Where it appears to the proper officer that any tax
has not been paid or short paid or erroneously
refunded, or where input tax credit has been wrongly
availed or utilised for any reason, other than the
reason of fraud or any wilful-misstatement or
suppression of facts to evade tax, he shall serve notice
on the person chargeable with tax which has not been
so paid or which has been so short paid or to whom
the refund has erroneously been made, or who has
wrongly availed or utilised input tax credit, requiring
him to show cause 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.
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.
(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 subsection (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 subsection (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.
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(6) The proper officer, on receipt of such
information, shall not serve any notice under subsection (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 subsection (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 filing of annual return for the financial
year to which the tax not paid or short paid or
input tax credit wrongly availed or utilised relates
to or within three years from the date of erroneous
refund.
(11) Notwithstanding anything contained in subsection (6) or sub-section (8), penalty under subsection (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. (1) Where it appears to the proper officer that any tax
has not been paid or short paid or erroneously
Determination of
tax not paid or
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refunded or where input tax credit has been wrongly
availed or utilised by reason of fraud, or any wilfulmisstatement 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 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.
short paid or
erroneously
refunded or input
tax credit wrongly
availed or utilised
by reason of fraud
or any wilfulmisstatement or
suppression of
facts.
(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 subsection (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 subsection (1) of section 73, subject to the condition
that the grounds relied upon in the said statement,
except the ground of fraud, or any wilfulmisstatement or suppression of facts to evade tax,
for periods other than those covered under subsection (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.

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(6) The proper officer, on receipt of such
information, shall not serve any notice under subsection (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 subsection (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 filing 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, —
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(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
thereunder, or failure to furnish any information on being
asked for, in writing, by the proper officer.
75. (1) Where the service of notice or issuance of order is
stayed by an order of a court or Appellate Tribunal,
the period of such stay shall be excluded in
computing the period specified in sub-sections (2)
and (10) of section 73 or sub-sections (2) and (10)
of section 74, as the case may be.
General
provisions
relating to
determination of
tax.
(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 mis-statement 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.
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(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.
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(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 said sections.
(12) Notwithstanding anything contained in
section 73 or section 74, where any amount of
self-assessed tax in accordance with a return
furnished under section 39 remains unpaid, either
wholly or partly, or any amount of interest
payable on such tax remains unpaid, the same
shall be recovered under the provisions of section
79.
(13) Where any penalty is imposed under section
73 or section 74, no penalty for the same act or
omission shall be imposed on the same person
under any other provision of this Act.
76. (1) Notwithstanding anything to the contrary
contained in any order or direction of any Appellate
Authority or Appellate Tribunal or court or in any
other provisions of this Act or the rules made
thereunder or any other law for the time being in
force, every person who has collected from any other
person any amount as representing the tax under this
Act, and has not paid the said amount to the
Government, shall forthwith pay the said amount to
the Government, irrespective of whether the supplies
in respect of which such amount was collected are
taxable or not.

Tax collected but
not paid to
Government.
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(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 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 subsection (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.
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(9) The amount paid to the Government under subsection (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. (1) A registered person who has paid the central tax
and State 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.
Tax wrongfully
collected and paid
to Central
Government or
State
Government.
(2) A registered person who has paid integrated tax
on a transaction considered by him to be an interState supply, but which is subsequently held to be
an intra-State supply, shall not be required to pay
any interest on the amount of State tax payable.
78. Any amount payable by a taxable person in pursuance
of an order passed under this Act shall be paid by such
person within a period of three months from the date
of service of such order failing which recovery
proceedings shall be initiated:
Initiation of
recovery
proceedings.
Provided that where the proper officer considers it
expedient in the interest of revenue, he may, for reasons
to be recorded in writing, require the said taxable person
to make such payment within such period less than a
period of three months as may be specified by him.

79. (1) Where any amount payable by a person to the
Government under any of the provisions of this Act
or the rules made thereunder is not paid, the proper
officer shall proceed to recover the amount by one or
more of the following modes, namely:––
Recovery of tax.
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(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 subclause (i) may, at any time, amend or revoke such
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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
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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;
2 of 1974.
(f) Notwithstanding anything contained in the
Code of Criminal Procedure, 1973, the proper officer
may file an application to the appropriate Magistrate
and such Magistrate shall proceed to recover from
such person the amount specified thereunder as if it
were a fine imposed by him.
(2) Where the terms of any bond or other instrument
executed under this Act or any rules or
regulations made thereunder provide that any
amount due under such instrument may be
recovered in the manner laid down in sub-section
(1), the amount may, without prejudice to any
other mode of recovery, be recovered in
accordance with the provisions of that subsection.
(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 central 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 central tax and credit the amount so recovered
to the account of the Government.
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(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. 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, subject to such conditions and
limitations as may be prescribed:
Payment of tax
and other amount
in instalments.
Provided that where there is default in payment of any
one instalment on its due date, the whole outstanding
balance payable on such date shall become due and
payable forthwith and shall, without any further notice
being served on the person, be liable for recovery.
81. Where a person, after any amount has become due
from him, creates a charge on or parts with the
property belonging to him or in his possession by way
of sale, mortgage, exchange, or any other mode of
transfer whatsoever of any of his properties in favour
of any other person with the intention of defrauding
the Government revenue, such charge or transfer shall
be void as against any claim in respect of any tax or
any other sum payable by the said person:
Transfer of
property to be
void in certain
cases.
Provided that, such charge or transfer shall not be void
if it is made for adequate consideration, in good faith and
without notice of the pendency of such proceedings under
this Act or without notice of such tax or other sum
payable by the said person, or with the previous
permission of the proper officer.
82. Notwithstanding anything to the contrary contained
in any law for the time being in force, save as
otherwise provided in the Insolvency and Bankruptcy
Code, 2016, any amount payable by a taxable person
or any other person on account of tax, interest or
penalty which he is liable to pay to the Government
Tax to be first
charge on
property.
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shall be a first charge on the property of such taxable
person or such person.
83. (1) Where during the pendency of any proceedings
under section 62 or section 63 or section 64 or section
67 or section 73 or section 74, the Commissioner is
of the opinion that for the purpose of protecting the
interest of the Government revenue, it is necessary so
to do, he may, by order in writing attach provisionally
any property, including bank account, belonging to
the taxable person in such manner as may be
prescribed.
Provisional
attachment to
protect revenue in
certain cases.
(2) Every such provisional attachment shall cease to
have effect after the expiry of a period of one year
from the date of the order made under sub-section
(1).
84. Where any notice of demand in respect of any tax,
penalty, interest or any other amount payable under
this Act, (hereafter in this section referred to as
“Government dues”), is served upon any taxable
person or any other person and any appeal or revision
application is filed or any other proceedings is
initiated in respect of such Government dues, then––
Continuation and
validation of
certain recovery
proceedings.
(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;
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(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. (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 up to 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.
Liability in case
of transfer of
business.
(2) Where the transferee of a business referred to in
sub-section (1) carries on such business either in
his own name or in some other name, he shall be
liable to pay tax on the supply of goods or
services or both effected by him with effect from
the date of such transfer and shall, if he is a
registered person under this Act, apply within the
prescribed time for amendment of his certificate
of registration.
86. Where an agent supplies or receives any taxable
goods on behalf of his principal, such agent and his
principal shall, jointly and severally, be liable to pay
the tax payable on such goods under this Act.

Liability of agent
and principal.
87. (1) When two or more companies are amalgamated or
merged in pursuance of an order of court or of
Liability in case of
amalgamation or
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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.
merger of
companies.
(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.
31 of 2016 88. (1) When any company is being wound up whether
under the orders of a court or Tribunal or otherwise,
every person appointed as receiver of any assets of a
company (hereafter in this section referred to as the
“liquidator”), shall, within thirty days after his
appointment, give intimation of his appointment to
the Commissioner.
Liability in case
of company in
liquidation.
(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.
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(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.
18 of 2013. 89. (1) Notwithstanding anything contained in the
Companies Act, 2013, where any tax, interest or
penalty due from a private company in respect of any
supply of goods or services or both for any period
cannot be recovered, then, every person who was a
director of the private company during such period
shall, jointly and severally, be liable for the 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.
Liability of
directors of
private 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 subsection (1) shall apply to any person who was a
director of such private company in relation to
any tax, interest or penalty in respect of such
supply of goods or services or both of such
private company:
Provided that nothing contained in this sub-section
shall apply to any personal penalty imposed on such
director.
90. Notwithstanding any contract to the contrary and any
other law for the time being in force, where any firm
is liable to pay any tax, interest or penalty under this
Liability of
partners of firm to
pay tax.
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Act, the firm and each of the partners of the firm shall,
jointly and severally, be liable for such payment:
Provided that where any partner retires from the firm,
he or the firm, shall intimate the date of retirement of the
said partner to the Commissioner by a notice in that
behalf in writing and such partner shall be liable to pay
tax, interest or penalty due up to the date of his retirement
whether determined or not, on that date:
Provided further that if no such intimation is given
within one month from the date of retirement, the liability
of such partner under the first proviso shall continue until
the date on which such intimation is received by the
Commissioner.
91. Where the business in respect of which any tax,
interest or penalty is payable under this Act is carried
on by any guardian, trustee or agent of a minor or
other incapacitated person on behalf of and for the
benefit of such minor or other incapacitated person,
the tax, interest or penalty shall be levied upon and
recoverable from such guardian, trustee or agent in
like manner and to the same extent as it would be
determined and recoverable from any such minor or
other incapacitated person, as if he were a major or
capacitated person and as if he were conducting the
business himself, and all the provisions of this Act or
the rules made thereunder shall, apply accordingly.
Liability of
guardians,
trustees etc.
92. Where the estate or any portion of the estate of a
taxable person owning a business in respect of which
any tax, interest or penalty is payable under this Act
is under the control of the Court of Wards, the
Administrator General, the Official Trustee or any
receiver or manager (including any person, whatever
be his designation, who in fact manages the business)
appointed by or under any order of a court, the tax,
interest or penalty shall be levied upon and be
recoverable from such Court of Wards, Administrator
General, Official Trustee, receiver or manager in like
manner and to the same extent as it would be
determined and be recoverable from the taxable
person as if he were conducting the business himself,
and all the provisions of this Act or the rules made
thereunder shall apply accordingly.
Liability of Court
of Wards etc.
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31 of 2016 93. (1) Save as otherwise provided in the Insolvency and
Bankruptcy Code, 2016, where a person, liable to pay
tax, interest or penalty under this Act, dies, then––
Special provisions
regarding liability
to pay tax, interest
or penalty in
certain cases.
(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.
31 of 2016 (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.
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31 of 2016 (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.
31 of 2016 (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 up to the time of the
termination of the guardianship or trust, whether such tax,
interest or penalty has been determined before the
termination of guardianship or trust but has remained
unpaid or is determined thereafter.
94. (1) Where a taxable person is a firm or an association
of persons or a Hindu undivided family and such firm,
association or family has discontinued business––
Liability in other
cases.
(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
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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, as the case may be, to partition.
Explanation.––For the purposes of this Chapter,––
743 of 2012.
(a) a “Limited Liability Partnership” formed and
registered under the provisions of the Limited
Liability Partnership Act, 2012 shall also be
considered as a firm;
(b) “court” means the District Court, High Court
or Supreme Court.
CHAPTER XVII
ADVANCE RULING
95. In this Chapter, unless the context otherwise
requires,––
Definitions.
(a) “advance ruling” means a decision provided by
the Authority or the Appellate Authority to an
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applicant on matters or on questions specified in subsection (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) “applicant” means any person registered or
desirous of obtaining registration under this Act;
(c) “application” means an application made to the
Authority under sub-section (1) of section 97;
(d) “Authority” means the Authority for Advance
Ruling, constituted under section 96;
(e) "Appellate Authority" means the Appellate
Authority for Advance Ruling constituted under
section 99.
96. (1) The Government shall, by notification, constitute
an Authority to be known as the <Name of the
State> Authority for Advance Ruling:
Constitution of
Authority for
Advance Ruling.
Provided that the Government may, on the
recommendation of the Council, notify any
Authority located in another State to act as the
Authority for the State.
(2) The Authority shall consist of-
(i) one member from amongst the officers of central tax;
and
(ii) one member from amongst the officers of State tax,

to be appointed by the Central Government and the
State Government respectively.
(3) The qualifications, the method of appointment of the
members and the terms and conditions of their services
shall be such as may be prescribed.
97. (1) An applicant desirous of obtaining an advance
ruling under this Chapter may make an application in
such form and manner and accompanied by such fee
Application for
advance ruling.
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as may be prescribed, stating the question on which
the advance ruling is sought.
(2) The question on which the advance ruling is
sought under this Act, shall be in respect of, -
(a) classification of any goods or services or both;
(b) applicability of a notification issued under the
provisions of this Act;
(c) determination of time and value of supply of
goods or services or both;
(d) admissibility of input tax credit of tax paid or
deemed to have been paid;
(e) determination of the liability to pay tax on any
goods or services or both;
(f) whether applicant is required to be registered;
(g) whether any particular thing done by the
applicant with respect to any goods or services or both
amounts to or results in a supply of goods or services
or both, within the meaning of that term.
98. (1) On receipt of an application, the Authority shall
cause a copy thereof to be forwarded to the concerned
officer and, if necessary, call upon him to furnish the
relevant records:
Procedure on
receipt of
application.
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
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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 subsection (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. (1) The Government shall, by notification, constitute
an Authority to be known as <Name of the State>
Appellate Authority for Advance Ruling for Goods
and Services Tax for hearing appeals against the
Constitution of
Appellate
Authority for
Advance Ruling.
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advance ruling pronounced by the Advance Ruling
Authority:
Provided that the Government may, on the
recommendations of the Council, notify any
Appellate Authority located in another State or
Union territory to act as the Appellate Authority for
the State.
(2) The Appellate Authority shall consist of-
(i) the Chief Commissioner of central tax as
designated by the Board; and
(ii) the Commissioner of State tax having
jurisdiction over the applicant.
100. (1) The concerned officer, the jurisdictional
officer or an applicant aggrieved by any advance
ruling pronounced under sub-section (4) of section
98, may appeal to the Appellate Authority.
Appeal to the
Appellate
Authority.
(2) Every appeal under this section shall be filed
within a period of thirty days from the date on
which the ruling sought to be appealed against is
communicated to the concerned officer, the
jurisdictional officer and the applicant:
Provided that the Appellate Authority may, if it is
satisfied that the appellant was prevented by a sufficient
cause from presenting the appeal within the said period
of thirty days, allow it to be presented within a further
period not exceeding thirty days.
(3) Every appeal under this section shall be in such
form, accompanied by such fee and verified in
such manner as may be prescribed.
101. (1) The Appellate Authority may, after giving the
parties to the appeal or reference an opportunity of
being heard, pass such order as it think fit,
confirming or modifying the ruling appealed against
or referred to.

Orders of
Appellate
Authority.
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(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. 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 or the applicant
within a period of six months from the date of the
order:
Rectification of
advance ruling.
Provided that no rectification which has the effect of
enhancing the tax liability or reducing the amount of
admissible input tax credit shall be made unless the
applicant or the appellant has been given an opportunity
of being heard.
103. (1) The advance ruling pronounced by the
Authority or the Appellate Authority under this
Chapter shall be binding only -
Applicability of
advance ruling.
(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 .
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(2) The advance ruling referred to in sub-section (1)
shall be binding unless the law, facts or
circumstances supporting the original advance
ruling have changed.
104. (1) Where the Authority or the Appellate
Authority finds that advance ruling pronounced by it
under sub-section (4) of section 98 or under subsection (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 as if such
advance ruling had never been made:
Advance ruling to
be void in certain
circumstances.
Provided that no order shall be passed under this subsection unless an opportunity of being heard has been
given to the applicant.
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-section (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.
5 of 1908.
105. (1) The Authority or the Appellate Authority
shall, for the purpose of exercising its powers
regarding –
(a) discovery and inspection;
(b) enforcing the attendance of any person and
examining him on oath;
(c) issuing commissions and compelling production
of books of account and other records,
have all the powers of a civil court under the Code of
Civil Procedure, 1908.
Powers of
Authority and
Appellate
Authority.
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2 of 1974.
45 of 1860.
(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 proceedings before the Authority or the
Appellate Authority shall be deemed to be a
judicial proceedings within the meaning of
sections 193 and 228, and for the purpose of
section 196 of the Indian Penal Code.
106. The Authority or the Appellate Authority shall,
subject to the provisions of this Chapter, have power
to regulate its own procedure.
Procedure of
Authority and
Appellate
Authority.
CHAPTER–XVIII
APPEALS AND REVISION
107. (1) Any person aggrieved by any decision or order
passed under this Act or the Central 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.
Appeals to
Appellate
Authority.
(2) The Commissioner may, on his own motion, or
upon request from the Commissioner of central
tax, call for and examine the record of any
proceeding in which an adjudicating authority has
passed any decision or order under this Act or the
Central 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.
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(3) Where, in pursuance of an order under subsection (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:
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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:
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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 Commissioner
or the authority designated by him in this behalf
and the jurisdictional Commissioner of central
tax or an authority designated by him in this
behalf.
(16) Every order passed under this section shall,
subject to the provisions of section 108 or section
113 or section 117 or section 118 be final and
binding on the parties.

108. (1) Subject to the provisions of section 121 and
any rules made thereunder, the Revisional Authority
may on his own motion, or upon information received
by him or on request from the Commissioner of
central 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 Central
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.
Powers of
Revisional
Authority.
(2) The Revisional Authority shall not exercise any
power under sub-section (1), if––
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(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.
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(5) Where the issuance of an order under sub-section
(1) is stayed by the order of a court or Appellate
Tribunal, the period of such stay shall be
excluded in computing the period of limitation
referred to in clause (b) of sub-section (2).
(6) For the purposes of this section, the term,––
(i) “record” shall include all records relating to
any proceedings under this Act available at the time of
examination by the Revisional Authority;
(ii) “decision” shall include intimation given by
any officer lower in rank than the Revisional
Authority.
109. (1) The Goods and Services Tax Tribunal
constituted by the Central Government shall be the
Appellate Tribunal under this Act for hearing
appeals against the orders passed by the Appellate
Authority or the Revisional Authority.
Appellate
Tribunal and
Benches thereof.
(2) The constitution and jurisdiction of the State
Bench and the Area Benches located in the State
shall be governed as per section 109 of the Central
Goods and Services Tax Act or the rules made
thereunder.
110. Qualification, appointment, salary and
allowances, terms of office, resignation, removal,
with respect to the President and Members of the
State Bench and Area Benches shall be as per
section 110 of the Central Goods and Services Tax
Act.
President and
Members of
Appellate
Tribunal, their
qualification,
appointment,
conditions of
service, etc.
5 of 1908.
111. (1) The Appellate Tribunal shall not, while
disposing of any proceedings before it or an appeal
before it, be bound by the procedure laid down in the
Code of Civil Procedure, 1908, but shall be guided by
the principles of natural justice and subject to the
other provisions of this Act and the rules made
thereunder, the Appellate Tribunal shall have power
to regulate its own procedure.
Procedure before
Appellate
Tribunal.
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5 of 1908.
(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;
1 of 1872.
(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.
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45 of 1860.
2 of 1974.
(4) All proceedings before the Appellate Tribunal
shall be deemed to be judicial proceedings within
the meaning of sections 193 and 228, and for the
purposes of section 196 of the Indian Penal Code,
and the Appellate Tribunal shall be deemed to be
civil court for the purposes of section 195 and
Chapter XXVI of the Code of Criminal
Procedure, 1973.
112. (1) Any person aggrieved by an order passed
against him under section 107 or section 108 of this
Act or the Central 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.
Appeals to
Appellate
Tribunal.
(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 central
tax, call for and examine the record of any order
passed by the Appellate Authority or the
Revisional Authority under this Act or under the
Central 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.
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(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 subsection (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 the section 107,
arising from the said order, in relation to which the
appeal has been filed.
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(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. (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.
Orders of
Appellate
Tribunal.
(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 central 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
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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 Commissioner or the
jurisdictional Commissioner of central tax.
(6) Save as provided in section 117 or section 118,
orders passed by the Appellate Tribunal on an
appeal shall be final and binding on the parties.
114. The State President shall exercise such financial
and administrative powers over the State Bench and
Area Benches of the Appellate Tribunal in a State,
as may be prescribed:
Financial and
administrative
powers of State
President.
Provided that the State 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 State Bench or Area
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 State President.
115. Where an amount paid by the appellant under subsection (6) of section 107 or under 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.
Interest on
refund of amount
paid for
admission of
appeal.
116. (1) Any person who is entitled or required to
appear before an officer appointed under this Act, or
the Appellate Authority or the Appellate Tribunal in
connection with any proceedings under this Act, may,
Appearance by
authorised
representative.
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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 Central Goods and
Services Tax Act, the Integrated Goods and Services
Tax Act or the Union Territory Goods and Services
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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 subsection (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 Central Goods and Services Tax
Act or the Goods and Services Tax Act of any
other State or the Union Territory Goods and
Services Tax Act shall be deemed to be
disqualified under this Act.
117. (1) Any person aggrieved by any order passed by
the State Bench or Area Benches of the Appellate
Tribunal may file an appeal to the High Court and the
High Court may admit such appeal, if it is satisfied
that the case involves a substantial question of law.
Appeal to High
Court.
(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.
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(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 subsection (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.
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(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.
5 of 1908
(9) Save as otherwise provided in this Act, the
provisions of the Code of Civil Procedure, 1908,
relating to appeals to the High Court shall, as far
as may be, apply in the case of appeals under this
section.
118. (1) An appeal shall lie to the Supreme Court-
(a) from any order passed by the National Bench or
Regional Benches of the Appellate Tribunal; or
Appeal to
Supreme Court.
(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.
5 of 1908 (2) The provisions of the Code of Civil Procedure,
1908, relating to appeals to the Supreme Court
shall, so far as may be, apply in the case of
appeals under this section as they apply in the
case of appeals from decrees of a High Court.
(3) Where the judgment of the High Court is varied
or reversed in the appeal, effect shall be given to
the order of the Supreme Court in the manner
provided in section 117 in the case of a judgment
of the High Court.
119. Notwithstanding that an appeal has been preferred
to the High Court or the Supreme Court, sums due to
the Government as a result of an order passed by the
National or Regional Benches of the Appellate
Tribunal under sub-section (1) of section 113 or an
order passed by the State Bench or Area Benches of
the Appellate Tribunal under 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.
Sums due to be
paid
notwithstanding
appeal etc.
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120. (1) The Commissioner may, on the
recommendations of the Council, from time to time,
issue orders or instructions or directions fixing such
monetary limits, as he may deem fit, for the purposes
of regulating the filing of appeal or application by the
officer of the State tax under the provisions of this
Chapter.
Appeal not to be
filed in certain
cases.
(2) Where, in pursuance of the orders or instructions
or directions issued under sub-section (1), the
officer of the State 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 State 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
State 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 State 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 State tax in
pursuance of the orders or instructions or
directions issued under sub-section (1).
121. Notwithstanding anything to the contrary in any
provisions of this Act, no appeal shall lie against any
decision taken or order passed by an officer of State
tax if such decision taken or order passed relates to
any one or more of the following matters, namely:–
Non Appealable
decisions and
orders.
(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
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(c) an order sanctioning prosecution under this
Act; or
(d) an order passed under section 80.
CHAPTER XIX
OFFENCES AND PENALTIES
122. (1) Where a taxable person who–– Penalty for
certain offences.
(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 terms 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 terms of sub-section (1)
of section 52, or collects an amount which is less than
the amount required to be collected under the said subsection or where he fails to pay to the Government the
amount collected as tax under sub-section (3) of
section 52;
(vii) takes or utilizes input tax credit without actual
receipt of goods or services or both either fully or
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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;
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(xix) issues any invoice or document by using the
registration number of another registered person;
(xx) tampers with, or destroys any material
evidence or documents;
(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 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.
(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
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believe are in contravention of any provisions of this
Act or the rules made thereunder;

(d) fails to appear before the officer of State 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. 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:
Penalty for failure
to furnish
information
return.
Provided that the penalty imposed under this section
shall not exceed five thousand rupees.
124. If any person required to furnish any information
or return under section 151—
Fine for failure to
furnish statistics.
(a) without reasonable cause fails to furnish such
information or return as may be required under that
section, or
(b) wilfully furnishes or causes to furnish any
information or return which he knows to be false,
he shall be punishable with a fine which may extend to
ten thousand rupees and in case of a continuing offence
to a further fine which may extend to one hundred rupees
for each day after the first day during which the offence
continues subject to a maximum limit of twenty-five
thousand rupees.
125. Any person, who contravenes any of the
provisions of this Act or any rules made thereunder
for which no penalty is separately provided for in this
General penalty.
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Act, shall be liable to a penalty which may extend to
twenty five thousand rupees.
126. (1) No officer under this Act shall impose any
penalty for minor breaches of tax regulations or
procedural requirements and in particular, any
omission or mistake in documentation which is easily
rectifiable and made without fraudulent intent or
gross negligence.
General
disciplines related
to penalty.
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.
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(6) The provisions of this section shall not apply in
such cases where the penalty specified under this
Act is either a fixed sum or expressed as a fixed
percentage.
127. Where the proper officer is of the view that a
person is liable to a penalty and the same is not
covered under any proceedings under section 62 or
section 63 or section 64 or 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.
Power to impose
penalty in certain
cases.
128. The Government may, by notification, waive in
part or full, any penalty referred to in section 122 or
section 123 or section 125 or any late fee referred to
in section 47 for such class of taxpayers and under
such mitigating circumstances as may be specified
therein on the recommendations of the Council.
Power to waive
penalty or fee or
both
129. (1) Notwithstanding anything contained in this
Act, where any person transports any goods or stores
any goods while they are in transit in contravention
of the provisions of this Act or the rules made
thereunder, all such goods and conveyance used as a
means of transport for carrying the said goods and
documents relating to such goods and conveyances
shall be liable to detention or seizure and after
detention or seizure, shall be released,––
Detention,
Seizure and
release of goods
and conveyances
in transit.
(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
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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 (2) 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 subsection (2) 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 terms of section 130:
Provided that where the detained or seized goods are
perishable or hazardous in nature or are likely to
depreciate in value with passage of time, the said
period of seven days may be reduced by the proper
officer.
130. (1) Notwithstanding anything contained in this
Act, if any person –
Confiscation of
goods or
conveyances and
levy of penalty.
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(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
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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.
2 of 1974. 131. Without prejudice to the provisions contained in
the Code of Criminal Procedure, 1973, no
confiscation made or penalty imposed under the
provisions of this Act or the rules made thereunder
shall prevent the infliction of any other punishment to
which the person affected thereby is liable under the
provisions of this Act or under any other law for the
time being in force.
Confiscation or
penalty not to
interfere with
other
punishments.
132. (1) Whoever commits any of the following
offences, namely:—
Punishment for
certain offences
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(a) supplies any goods or services or both without issue
of any invoice, in violation of the provisions of this Act,
with the intention to evade tax;
(b) issues any invoice or bill without supply of goods or
services or both in violation of the provisions of this Act,
or the rules made thereunder leading to wrongful
availment or utilisation of input tax credit or refund of
tax;
(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
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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
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(j), he shall be punishable with imprisonment for a term
which may extend to six months or with fine or with both.
(2) If 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:
2 of 1974.
(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 utilised or
refund wrongly taken under the provisions of this Act, the
Central Goods and Services Tax Act, the Integrated
Goods and Services Tax Act, and cess levied under the
Goods and Services Tax (Compensation to States) Act.
133. If any person engaged in connection with the
collection of statistics under section 151 or
compilation or computerisation thereof or if any
officer of State tax having access to information
specified under sub-section (1) of section 150, or any
person engaged in connection with provisions of
service on the common portal or the agent of common
Liability of
officers and
certain other
persons.
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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 the prosecution of an offence under this Act or
under any other Act for the time being in force, he
shall be punishable with imprisonment for a term
which may extend to six months or with fine which
may extend to twenty five thousand rupees, or with
both.
(2) Any person –
(a) who is a Government servant shall not be prosecuted
for any offence under this section except with the
previous sanction of the Government;
(b) who is not a Government servant shall not be
prosecuted for any offence under this section except with
the previous sanction of the Commissioner.
134. No court shall take cognizance of any offence
punishable under this Act or the rules made
thereunder except with the previous sanction of the
Commissioner, and no court inferior to that of a
Magistrate of the First Class, shall try any such
offence.
Cognizance of
offences.
135. In any prosecution for an offence under this Act
which requires a culpable mental state on the part of
the accused, the court shall presume the existence of
such mental state but it shall be a defence for the
accused to prove the fact that he had no such mental
state with respect to the act charged as an offence in
that prosecution.
Presumption of
culpable mental
state.
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.
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136. A statement made and signed by a person on
appearance in response to any summons issued under
section 70 during the course of any inquiry or
proceedings under this Act shall be relevant, for the
purpose of proving, in any prosecution for an offence
under this Act, the truth of the facts which it
contains,––
Relevancy of
statements under
certain
circumstances.
(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. (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 :

Offences by
Companies.
(2) Notwithstanding anything contained in subsection (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.
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(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 subsection (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.
2 of 1974.
138. (1) Any offence under this Act may, either before
or after the institution of prosecution, be compounded
by the Commissioner on payment, by the person
accused of the offence, to the Central Government or
the State Government, as the case may be, of such
compounding amount in such manner as may be
prescribed:
Compounding of
offences.
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
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clause (a), under this Act or under the provisions
of any State Goods and Services Tax Act or the
Central 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. (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
Migration of
existing
taxpayers.
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certificate of registration on provisional basis, subject
to such conditions and in such form and manner as
may be prescribed and, unless replaced by a final
certificate of registration under sub-section (2), shall
be liable to be cancelled if the conditions so
prescribed are not complied with.
(2) The final certificate of registration shall be
granted in such form and manner and subject to
such conditions as may be prescribed.
(3) The certificate of registration issued to a person
under sub-section (1) shall be deemed to have not
been issued if the said registration is cancelled in
pursuance of an application filed by such person
that he was not liable to registration under section
22 or section 24.
140. (1) A registered person, other than a person opting
to pay tax under section 10, shall be entitled to take,
in his electronic credit ledger, credit of the amount of
Value Added Tax [and Entry Tax] 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, not later than ninety
days after the said day, in such manner as may be
prescribed:
Transitional
arrangements for
input tax credit.
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
Applicable to
States having
Industrial
Incentive
(iii) [where the said amount of credit relates to
goods sold under notification no. ……. and ……
claiming refund of value added tax paid
thereon]:
Provided further that so much of the said credit as is
attributable to any claim related to section 3, subsection (3) of section 5, section 6, section 6A or subsection (8) of section 8 of the Central Sales Tax Act,
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74 of 1956 1956 that is not substantiated in the manner, and within
the period, prescribed in rule 12 of the Central Sales
Tax (Registration and Turnover) Rules, 1957 shall not
be eligible to be credited to the electronic credit ledger:
Provided also that an amount equivalent to the credit
specified in the second proviso shall be refunded under
the existing law when the said claims are substantiated
in the manner prescribed in rule 12 of the Central Sales
Tax (Registration and Turnover) Rules, 1957.
(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 input tax 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 input tax credit under the existing law and
is also admissible as input tax credit under this Act.
Explanation.––For the purposes of this section, the
expression “unavailed input tax credit” means the
amount that remains after subtracting the amount of input
tax credit already availed in respect of capital goods by
the taxable person under the existing law from the
aggregate amount of input tax 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 sale of exempted goods [or tax free
goods] under the existing law but which are liable
to tax under this Act [or where the person was
entitled to the credit of input tax at the time of sale
of goods], shall be entitled to take, in his
electronic credit ledger, credit of the value added
tax [and entry tax] 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: ––
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(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 tax under the existing law in respect of
such inputs; and
(iv) such invoices or other prescribed documents
were issued not earlier than twelve months
immediately preceding the appointed day:
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 tax 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 sale
of taxable goods as well as exempted goods [or
tax free goods] under the existing law but which
are liable to tax under this Act, shall be entitled to
take, in his electronic credit ledger,-
(a) the amount of credit of the value added tax
[and entry tax] 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 credit of the value added tax
[and entry tax] 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 tax free goods] in accordance
with the provisions of sub-section (3).
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(5) A registered person shall be entitled to take, in his
electronic credit ledger, credit of value added tax
[and entry tax] in respect of inputs received on or
after the appointed day but the 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 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 the said registered person shall
furnish a statement, in such manner as may be prescribed,
in respect of credit that has been taken under this subsection.
(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 value added tax 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 tax under the existing law in respect of
inputs; and
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(v) such invoices or other prescribed documents
were issued not earlier than twelve months
immediately preceding the appointed day.
(7) The amount of credit under sub-sections (3),
(4) and (6) shall be calculated in such manner as
may be prescribed.
141. (1) Where any inputs received at a place of
business had been despatched as such or
despatched 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:
Transitional
provisions
relating to job
work.
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 a period of six months or the
extended period from the appointed day, 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
despatched from any 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 sub-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
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Commissioner for a further period not exceeding two
months:
Provided further that if the said goods are not
returned within a 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 subsection (8) of section 142:
Provided also that the person despatching the
goods 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 six months or the
extended period, as the case may be, from the
appointed day.
(3) Where any goods had been despatched from the
place of business without payment of tax for
carrying out tests or any other process, to any
other premises, whether registered or not, in
accordance with the provisions of existing law
prior to the appointed day and such goods (herein
after referred to as the “said goods”) are returned
to the said place of business 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 such 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 subsection, 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 person despatching the
goods 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
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payment of tax for exports within six months or the
extended period, as the case may be, from the
appointed day.
(4) The tax under sub-sections (1), (2) and (3) shall
not be payable only if the person despatching the
goods and the job worker declare the details of the
inputs or goods held in stock by the job worker on
behalf of the said person on the appointed day in
such form and manner and within such time as
may be prescribed.
142. (1) Where any goods on which tax, if any, had
been paid under the existing law at the time of sale
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 tax 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:
Miscellaneous
transitional
provisions.
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
is revised upwards on or after the appointed day,
the registered person who had sold such goods
may 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
is revised downwards on or after the appointed
day, the registered person who had sold such
goods may issue to the recipient a credit note,
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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 input tax credit, 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 refunded to
him in cash in accordance with the provisions of
the said law:
Provided that where any claim for refund of the
amount of input tax credit is fully or partially
rejected, the amount so rejected shall lapse:
Provided further that no refund claim shall be
allowed of any amount of input tax 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 tax paid under the existing
law in respect of the goods 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 input
tax credit is fully or partially rejected, the amount so
rejected shall lapse:
Provided further that no refund claim shall be
allowed of any amount of input tax credit where the
balance of the said amount as on the appointed day
has been carried forward under this Act.
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(5) (a) Every proceeding of appeal, revision, review
or reference relating to a claim for input tax credit
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 of credit found to be
admissible to the claimant shall be refunded to
him in cash in accordance with the provisions of
the existing law, and the amount rejected, if any,
shall not be admissible as input tax credit under
this Act:

Provided that no refund claim shall be allowed of any
amount of input tax 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, revision, review
or reference relating to recovery of input tax
credit 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 of credit
becomes recoverable as a result of such
appeal, revision, 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.

(6) (a) Every proceeding of appeal, revision, review
or reference relating to any output 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, revision, review or
reference, the same shall, unless recovered under
the existing law, be recovered as an arrear of tax
under this Act and amount so recovered shall not
be admissible as input tax credit under this Act.
(b) Every proceeding of appeal, revision, review
or reference relating to any output tax liability
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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 in
accordance with the provisions of the existing
law and the amount rejected, if any, shall not be
admissible as input tax credit under this Act.
(7) (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, and the amount rejected, if
any, shall not be admissible as input tax credit
under this Act.
(8) (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 input tax 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 input tax credit is found to be
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admissible to any taxable person, the same
shall be refunded to him in cash, under the
existing law, and the amount rejected, if any,
shall not be admissible as input tax credit
under this Act.
(9) 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.
(10) (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 <Name of the State> Value
Added Tax Act, ---.
32 of 1994 (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.
--- of ----
32 of 1994
(c) Where tax was paid on any supply, both under the
<Name of the State> 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.
(11) 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:
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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 the 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 the period specified in this subsection.
(12) Where a supplier has made any sale of goods
in respect of which tax was required to be
deducted at source under the <Name of the
State> 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 expression “capital goods” shall have the
same meaning as assigned to it in the <Name of
the State> Value Added Tax, ----.
CHAPTER XXI
MISCELLANEOUS PROVISIONS
143. (1) A registered person (hereafter in this section
referred to as the “principal”) may, under intimation
and subject to such conditions as may be prescribed,
send any inputs or capital goods, without payment of
tax, to a job worker for job work and from there
subsequently send to another job worker and
likewise, and shall,––
Job work
procedure.
(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
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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
terms of clause (b) 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 clause
(a) of sub-section (1) or are not supplied from the
place of business of the job worker in accordance
with 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 clause (a) of sub-section (1) or
are not supplied from the place of business of the
job worker in accordance with clause (b) of subsection (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.
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(5) Notwithstanding anything contained in subsections (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 purpose of job work, input
includes intermediate goods arising from any treatment
or process carried out on the inputs by the principal or the
job worker.
144. Where any document- Presumption as to
documents in
certain cases.
(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
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executed or attested by the person by whom it
purports to have been so executed or attested;
(b) admit the document in evidence notwithstanding
that it is not duly stamped, if such document is
otherwise admissible in evidence.
145. (1) Notwithstanding anything contained in any
other law for the time being in force, —
Admissibility of
micro films,
facsimile copies
of documents and
computer
printouts as
documents and as
evidence.
(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 and 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;
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(b) giving such particulars of any device involved
in the production of that document as may be
appropriate for the purpose of showing that the
document was produced by a computer,
shall be evidence of any matter stated in the certificate
and for the purposes of this sub-section it shall be
sufficient for a matter to be stated to the best of the
knowledge and belief of the person stating it.
146. The Government may, on the recommendations
of the Council, notify the Common Goods and
Services Tax Electronic Portal for facilitating
registration, payment of tax, furnishing of returns,
computation and settlement of integrated tax,
electronic way bill and for carrying out such other
functions and for such purposes as may be prescribed.
Common Portal.
147. The Government may, on the recommendations
of the Council, notify certain supplies of goods as
“deemed exports”, where goods supplied do not leave
India, and payment for such supplies is received
either in Indian rupees or in convertible foreign
exchange, if such goods are manufactured in India.
Deemed Exports.
148. The Government may, on the recommendations
of the Council, and subject to such conditions and
safeguards as may be prescribed, notify certain
classes of taxable persons, and the special procedures
to be followed by such taxable persons including
those with regard to registration, furnishing of return,
payment of tax and administration of such taxable
persons.
Special Procedure
for certain
processes.
149. (1) Every registered person may be assigned a
goods and services tax compliance rating score by the
Government based on his record of compliance with
the provisions of this Act.
Goods and
services tax
compliance
rating.
(2) The goods and services tax compliance rating
score may be determined on the basis of such
parameters as may be prescribed.
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(3) The goods and services tax compliance rating
score may be updated at periodic intervals and
intimated to the registered person and also placed
in the public domain in such manner as may be
prescribed.
150. (1) Any person, being— Obligation to
furnish
information
return.
(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
43 of 1961.
(d) an income tax authority appointed under the
provisions of the Income-tax Act, 1961; or
2 of 1934.
(e) a banking company within the meaning of
clause (a) of section 45A of the Reserve Bank of India
Act, 1934; or
36 of 2003.
(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
16 of 1908.
(g) the Registrar or Sub-Registrar appointed under
section 6 of the Registration Act, 1908; or
18 of 2013.
(h) a Registrar within the meaning of the
Companies Act, 2013; or
59 of 1988.
(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
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30 of 2013. in Land Acquisition, Rehabilitation and Resettlement
Act, 2013; or
42 of 1956.
(k) the recognised stock exchange referred to in
clause (f) of section 2 of the Securities Contracts
(Regulation) Act, 1956; or
22 of 1996.
(l) a depository referred to in clause (e) of subsection (1) of section 2 of the Depositories Act, 1996;
or
2 of 1934.
(m) an officer of the Reserve Bank of India as
constituted under section 3 of the Reserve Bank of
India Act, 1934; or
18 of 2013.
(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.
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(2) Where the Commissioner, or an officer
authorised by him in this behalf, considers that
the information furnished in the information
return is defective, he may intimate the defect to
the person who has furnished such information
return and give him an opportunity of rectifying
the defect within a period of thirty days from the
date of such intimation or within such further
period which, on an application made in this
behalf, the said authority may allow and if the
defect is not rectified within the said period of
thirty days or the further period so allowed, then,
notwithstanding anything contained in any other
provisions of this Act, such information return
shall be treated as not furnished and the
provisions of this Act shall apply.
(3) Where a person who is required to furnish
information return has not furnished the same
within the time specified in sub-section (1) or
sub-section (2), the said authority may serve upon
him a notice requiring furnishing of such
information return within a period not exceeding
ninety days from the date of service of the notice
and such person shall furnish the information
return.
151. (1) The Commissioner may, if he considers that it
is necessary so to do, by notification, direct that
statistics may be collected relating to any matter dealt
with, by or in connection with this Act.
Power to collect
statistics.
(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. (1) No information of any individual return or part
thereof with respect to any matter given for the
purposes of 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
Bar on disclosure
of information
required under
section 151.
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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
computerization thereof for the purposes of this Act,
shall be permitted to see or have access to any
information or any individual return referred to in
section 151.
(3) Nothing in this section shall apply to the
publication of any information relating to a class
of taxable persons or class of transactions, if in
the opinion of the Commissioner, it is desirable in
the public interest to publish such information.
153. Any officer not below the rank of Assistant
Commissioner may, having regard to the nature and
complexity of the case and the interest of revenue,
take assistance of any expert at any stage of scrutiny,
inquiry, investigation or any other proceedings before
him.
Taking assistance
from an expert.
154. The Commissioner or an officer authorised by
him may take samples of goods from the possession
of any taxable person, where he considers it
necessary, and provide a receipt for any samples so
taken.
Power to take
samples.
155. Where any person claims that he is eligible for
input tax credit under this Act, the burden of proving
such claim shall lie on such person.
Burden of Proof.
45 of 1860.
156. All persons discharging functions under this Act
shall be deemed to be public servants within the
meaning of section 21 of the Indian Penal Code.
Persons deemed
to be public
servants.
157. (1) No suit, prosecution or other legal proceedings
shall lie against the President, State President,
Members, officers or other employees of the
Appellate Tribunal or any other person authorised by
the said Appellate Tribunal for anything which is in
Protection of
action taken under
this Act.
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good faith done or intended to be done under this Act
or the rules made thereunder.
(2) No suit, prosecution or other legal proceedings
shall lie against any officer appointed or
authorised under this Act for anything which is
done or intended to be done in good faith under
this Act or the rules made thereunder.
158. (1) All particulars contained in any statement
made, return furnished or accounts or documents
produced in accordance with this Act, or in any record
of evidence given in the course of any proceedings
under this Act (other than proceedings before a
criminal court), or in any record of any proceedings
under this Act shall, save as provided in sub-section
(3), not be disclosed.
Disclosure of
information by a
public servant
1 of 1872.
(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,––
45 of 1860.
49 of 1988.
(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
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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
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(k) any such particulars to an officer of the
Government as may be necessary for the purposes of
any other law for the time being in force; and
(l) any information relating to any class of taxable
persons or class of transactions for publication, if, in
the opinion of the Commissioner, it is desirable in the
public interest, to publish such information.
159. (1) If the Commissioner, or any other officer
authorised by him in this behalf, is of the opinion that
it is necessary or expedient in the public interest to
publish the name of any person and any other
particulars relating to any proceedings or prosecution
under this Act in respect of such person, it may cause
to be published such name and particulars in such
manner as it thinks fit.
Publication of
information
respecting
persons in certain
cases.
(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
treasures or managers of the company, or the members of
the association, as the case may be, may also be published
if, in the opinion of the Commissioner, or any other
officer authorised by him in this behalf, circumstances of
the case justify it.
160. (1) No assessment, re-assessment, adjudication,
review, revision, appeal, rectification, notice,
summons or other proceedings done, accepted, made,
issued, initiated, or purported to have been done,
accepted, made, issued, initiated in pursuance of any
of the provisions of this Act shall be invalid or
deemed to be invalid merely by reason of any
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
Assessment
proceedings, etc.
not to be invalid
on certain
grounds.
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conformity with or according to the intents, purposes
and requirements of this Act or any existing law.
(2) The service of any notice, order or
communication shall not be called in question, if
the notice, order or communication, as the case
may be, has already been acted upon by the
person to whom it is issued or where such service
has not been called in question at or in the earlier
proceedings commenced, continued or finalised
pursuant to such notice, order or communication.
161. Without prejudice to the provisions of section
160, and notwithstanding anything contained in any
other provisions of this Act, any authority, who has
passed or issued any decision or order or notice or
certificate or any other document, may rectify any
error which is apparent on the face of record in such
decision or order or notice or certificate or any other
document, either on its own motion or where such
error is brought to its notice by any officer appointed
under this Act or an officer appointed under the
Central 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:
Rectification of
errors apparent
from record.
Provided that no such rectification shall be done after
a period of six months from the date of issue of such
decision or order or notice or certificate or any other
document:
Provided further that the said period of six months
shall not apply in such cases where the rectification is
purely in the nature of correction of a clerical or
arithmetical error, arising from any accidental slip or
omission:
Provided also that where such rectification adversely
affects any person, the principles of natural justice shall
be followed by the authority carrying out such
rectification.
162. Save as provided in sections 117 and 118, no civil
court shall have jurisdiction to deal with or decide any
Bar on
jurisdiction of
civil courts.
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question arising from or relating to anything done or
purported to be done under this Act.
163. Wherever a copy of any order or document is to
be provided to any person on an application made by
him for that purpose, there shall be paid such fee as
may be prescribed.
Levy of fee.
164. (1) The Government may, on the
recommendations of the Council, by notification,
make rules for carrying out the provisions of this Act.
Power of
Government to
make rules.
(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) may
provide that a contravention thereof shall be
liable to a penalty not exceeding ten thousand
rupees.
165. The Commissioner may, by notification, make
regulations consistent with this Act and the rules
made thereunder to carry out the provisions of this
Act.
Power to make
regulations.
166. Every rule made by the Government, every
regulation made by the Commissioner 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 the State Legislature, 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, the State Legislature agrees in
Laying of rules,
regulations and
notifications.
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making any modification in the rule or regulation or
in the notification, as the case may be, or the State
Legislature agrees that the rule or regulation or the
notification should not be made, the rule or regulation
or notification, as the case may be, shall thereafter
have effect only in such modified form or be of no
effect, as the case may be; so, however, that any such
modification or annulment shall be without prejudice
to the validity of anything previously done under that
rule or regulation or notification, as the case may be.
167. The Commissioner may, by notification, direct
that subject to such conditions, if any, as may be
specified in the notification, any power exercisable by
any authority or officer under this Act may be
exercisable also by another authority or officer as
may be specified in such notification.
Delegation of
powers.
168. The Commissioner may, if he 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 State 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.
Power to issue
instructions or
directions.
169. (1) Any decision, order, summons, notice or other
communication under this Act or the rules made
thereunder shall be served by any one of the following
methods, namely: -
Service of notice
in certain
circumstances.
(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
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(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. 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.
Rounding off of
tax etc.
171. (1) Any reduction in rate of tax on any supply of
goods or services or the benefit of input tax credit
Anti-profiteering
Measure.
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shall be passed on to the recipient by way of
commensurate reduction in prices.
(2) The Central Government may on
recommendations of the Council, by notification,
constitute an Authority, or empower an existing
Authority constituted under any law for the time
being in force, to examine whether input tax
credits availed by any registered person or the
reduction in the tax rate have actually resulted in
a commensurate reduction in the price of the
goods or services or both supplied by him.
(3) The Authority referred to in sub-section (2) shall
exercise such powers and discharge such
functions as may be prescribed.
172. (1) If any difficulty arises in giving effect to any
provisions of this Act, the Government may, on the
recommendations of the Council, by a general or a
special order published in the Official Gazette, make
such provisions not inconsistent with the provisions
of this Act or the rules or regulations made
thereunder, as may be necessary or expedient for the
purpose of removing the said difficulty :
Removal of
difficulties.
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 the
State Legislature.
Omissions,
substitutions,
and insertions in
the Acts to be
entered here
173. Save as otherwise provided in this Act, on and
from the date of commencement of this Act,-
(i) in the Maharashtra Municipal Corporations Act,
1949, in section 127, in sub-section (2), clauses (a),
(aa) and (aaa) shall be omitted;
(ii) ……
Amendment of
certain Acts
List of other Acts
to be repealed to
be entered here
174. (1) Save as otherwise provided in this Act, on
and from the date of commencement of this Act,
(i) the <Name of State> Value Added Tax Act, ----,
except in respect of goods included in the Entry 54
of the State List of the Seventh Schedule to the
Constitution,
Repeal and
saving
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(ii) ---------
(iii) --------
(hereafter referred to as the repealed Acts) are
hereby repealed.
(2) The repeal of the said Acts and the amendment
of the Acts specified in section 173 (hereafter
referred to as “such amendment” or “amended
Act”, as the case may be) to the extent mentioned in
sub-section (1) or section 173 shall not—
(a) revive anything not in force or existing at the
time of such repeal; or
(b) affect the previous operation of the 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
repealed Acts or orders under such repealed 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 tax, surcharge, 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 repealed Acts; or
(e) affect any investigation, inquiry, assessment
proceedings, adjudication and any other legal
proceedings or recovery of arrears or remedy in
respect of any such tax, surcharge, penalty, fine,
interest, right, privilege, obligation, liability, forfeiture
or punishment, as aforesaid, and any such
investigation, inquiry, 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 repealed;
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(f) affect any proceedings including that
relating to an appeal, revision, review or reference,
instituted before, on or after the appointed day
under the said repealed Acts and such proceedings
shall be continued under the said repealed Acts as
if this Act had not come into force and the said
Acts had not been amended or repealed.
10 of 1897.
(2) The mention of the particular matters referred
to in section 173 and sub-section (1) shall not be
held to prejudice or affect the general application
of section -- of the <Name of the State> General
Clauses Act, ---- with regard to the effect of
repeal.

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SCHEDULE I
[Section 7]
ACTIVITIES TO BE TREATED AS SUPPLY EVEN IF MADE
WITHOUT CONSIDERATION
1. Permanent transfer or disposal of business assets where input tax
credit has been availed on such assets.
2. Supply of goods or services or both between related persons or
between distinct persons as specified in section 25 , when made in
the course or furtherance of business:
Provided that gifts not exceeding fifty thousand rupees in value in a
financial year by an employer to an employee shall not be treated as
supply of goods or services or both.
3. Supply of goods—
(a) by a principal to his agent where the agent undertakes to supply
such goods on behalf of the principal; or
(b) by an agent to his principal where the agent undertakes to
receive such goods on behalf of the principal.
4. Import of services by a taxable person from a related person or
from any of his other establishments outside India, in the course or
furtherance of business.

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SCHEDULE II
[Section 7]
ACTIVITIES TO BE TREATED AS SUPPLY OF GOODS OR
SUPPLY OF SERVICES
1. Transfer
(a) any transfer of the title in goods is a supply of goods;
(b) any transfer of right in goods or of undivided share in goods
without the transfer of title thereof, is a supply of services;
(c) any transfer of title in goods under an agreement which stipulates
that property in goods shall pass at a future date upon payment of
full consideration as agreed, is a supply of goods.
2. Land and Building
(a) any lease, tenancy, easement, licence to occupy land is a supply
of services;
(b) any lease or letting out of the building including a commercial,
industrial or residential complex for business or commerce, either
wholly or partly, is a supply of services.
3. Treatment or process
Any treatment or process which is applied to another person’s
goods is a supply of services.
4. Transfer of business assets
(a) where goods forming part of the assets of a business are
transferred or disposed of by or under the directions of the person
carrying on the business so as no longer to form part of those assets,
whether or not for a consideration, such transfer or disposal is a
supply of goods by the person;
(b) where, by or under the direction of a person carrying on a
business, goods held or used for the purposes of the business are put
to any private use or are used, or made available to any person for
use, for any purpose other than a purpose of the business, whether
or not for a consideration, the usage or making available of such
goods is a supply of services;
(c) where any person ceases to be a taxable person, any goods
forming part of the assets of any business carried on by him shall be
deemed to be supplied by him in the course or furtherance of his
business immediately before he ceases to be a taxable person,
unless—
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(i) the business is transferred as a going concern to another person;
or
(ii) the business is carried on by a personal representative who is
deemed to be a taxable person.
5. Supply of services
The following shall be treated as supply of service, namely:-
(a) renting of immovable property;
(b) construction of a complex, building, civil structure or a part
thereof, including a complex or building intended for sale to a buyer,
wholly or partly, except where the entire consideration has been
received after issuance of completion certificate, where required, by
the competent authority or after its first occupation, whichever is
earlier.
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 (20 of 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 remodeling 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
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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.


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SCHEDULE III
[Section 7]
ACTIVITIES OR TRANSACTIONS WHICH SHALL BE
TREATED NEITHER AS A SUPPLY OF GOODS NOR A
SUPPLY OF SERVICES
1. Services by an employee to the employer in the course of or in
relation to his employment.
2. Services by any court or Tribunal established under any law for
the time being in force.
3.(a) the functions performed by the Members of Parliament,
Members of State Legislature, Members of Panchayats, Members of
Municipalities and Members of other local authorities;
(b) the duties performed by any person who holds any post in
pursuance of the provisions of the Constitution in that capacity; or
(c) the duties performed by any person as a Chairperson or a
Member or a Director in a body established by the Central
Government or a State Government or local authority and who is not
deemed as an employee before the commencement of this clause.

4. Services of funeral, burial, crematorium or mortuary including
transportation of the deceased.
5. Sale of land and, subject to clause (b) of paragraph 5 of Schedule
II, sale of building.
6. Actionable claims, other than lottery, betting and gambling.

Explanation.––For the purposes of paragraph 2 the term “court”
includes District Court, High Court and Supreme Court.
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THE UNION TERRITORY GOODS AND SERVICES
TAX
BILL, 2017
A
BILL
to make a provision for levy and collection of tax on
intra-State supply of goods or services or both by the
Union Territories
BE it enacted by Parliament in the Sixty-eighth Year of
the Republic of India as follows:––
CHAPTER I
PRELIMINARY
1. (1) This Act may be called the Union Territory Goods
and Services Tax Act, 2017
Short title, extent
and
commencement.
(2) It extends to the Union territories of the Andaman
and Nicobar Islands, Lakshadweep, Dadra and Nagar
Haveli, Daman and Diu, Chandigarh and other territory.
(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.
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2. In this Act, unless the context otherwise requires,–– Definitions.
(1) “Commissioner” means the Commissioner of Union
territory tax appointed under section 3;
(2) “designated authority” means such authority as may be
notified by the Commissioner;
(3)“exempt supply” means supply of any goods or
services or both which attracts nil rate of tax or which
may be exempt from tax under section 8, or under
section 6 of the Integrated Goods and Services Tax Act,
and includes non taxable supply;
(4) “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;
(5) “Government” means the Administrator or any
authority or officer authorised to act as Administrator
by the Central Government;
(6) “output tax” in relation to a taxable person, means the
Union territory 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;
(7) “Union territory” means the territory of,-
(i) the Andaman and Nicobar Islands;
(ii) Lakshadweep;
(iii) Dadra and Nagar Haveli;
(iv) Daman and Diu;
(v) Chandigarh; or
(vi) Other territory.
Explanation.- For the purposes of this Act, each of the
territories specified in clauses (i) to (vi) shall be considered
to be a separate Union territory;
(8) “Union territory tax” means the tax levied under this
Act;
(9) words and expressions used and not defined in this Act
but defined in the Central Goods and Services Tax Act, the
Integrated Goods and Services Tax Act, the State 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.
CHAPTER II
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ADMINISTRATION
3. The Administrator may, by notification, appoint
Commissioners and such other class of officers as may be
required for carrying out the purposes of this Act and such
officers shall be deemed to be proper officers for such
purposes as may be specified therein:
Officers under
this Act.
Provided that the officers appointed under the existing
law shall be deemed to be the officers appointed under the
provisions of this Act.
4. The Administrator may authorise any officer to
appoint officers of Union territory tax below the rank of
Assistant Commissioner of Union territory tax for the
administration of this Act.
Authorisation of
officers.
5. (1) Subject to such conditions and limitations as the
Commissioner may impose, an officer of the Union
territory tax may exercise the powers and discharge the
duties conferred or imposed on him under this Act.
Powers of officers.
(2) An officer of a Union territory tax may exercise the
powers and discharge the duties conferred or imposed
under this Act on any other officer of a Union territory 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 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 Union territory tax.
6. (1) Without prejudice to the provisions of this Act,
the officers appointed under the Central 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.
Authorisation of
officers of central tax
as proper officer in
certain
circumstances.
(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 Central
Goods and Services Tax Act, as authorised by the
said Act under intimation to the jurisdictional
officer of central tax;
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(b) where a proper officer under the Central 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 Central Goods and Services Tax
Act.
CHAPTER III
LEVY AND COLLECTION OF TAX
7. (1) Subject to the provisions of sub-section (2), there shall
be levied a tax called the Union territory 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 of the Central Goods and
Services Tax Act and at such rates, not exceeding twenty per
cent., as may be notified by the Central Government, on the
recommendations of the Council and collected in such
manner as may be prescribed and shall be paid by the taxable
person.
Levy and
Collection.
(2) The Union territory 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 Central Government on the recommendations of the
Council.
.
(3) The Central 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 Union territory 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 Central Government may, on the recommendations
of the Council, by notification, specify categories of services
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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.
8. (1) Where the Central 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.
Power to grant
exemption
from tax.
(2) Where the Central 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 Central 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.
(4) Any notification issued by the Central Government
under sub-section (1) of section 11 of the Central Goods and
Services Tax Act shall be deemed to be a notification issued
under this Act.
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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
PAYMENT OF TAX
9. On utilisation of input tax credit of Union territory tax 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 of the Central Goods and Services Tax Act, the
amount collected as Union territory tax shall stand reduced
by an amount equal to such credit so utilised and the Central
Government shall transfer an amount equal to the amount so
reduced from the Union territory tax account to the integrated
tax account in such manner and within such time as may be
prescribed.
Transfer of
input tax
credit.
CHAPTER V
INSPECTION, SEARCH SEIZURE AND ARREST
10. (1) All officers of Police, Railways, Customs, and
those engaged in the collection of land revenue, including
village officers, and officers of central tax and officers of
the State tax shall assist the proper officers in the
implementation of this Act.
Officers
required to
assist proper
officers.
(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 VI
DEMANDS AND RECOVERY
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11.(1) 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
central 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 central tax and credit the
amount so recovered to the account of the
Government under the appropriate head of Union
terrirtory tax.
Recovery of tax.
(2) Where the amount recovered under sub-section (1) is
less than the amount due to the Government under this
Act and the Central Goods and Services Act, the
amount to be credited to the account of the
Government shall be in proportion to the amount due
as Union territory tax and central tax.
CHAPTER– VII
ADVANCE RULING
12. In this Chapter, unless the context otherwise
requires,––
Definitions.
(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 of the Central
Goods and Services Tax Act, in relation to the supply of
goods or services or both being undertaken or proposed
to be undertaken by the applicant;
(b) “applicant” means any person registered or
desirous of obtaining registration under this Act;
(c) “application” means an application made to the
Authority under sub-section (1) of section 97 of the Central
Goods and Services Tax Act;
(d) “Authority” means the Authority for Advance
Ruling, constituted under section 13;
(e) "Appellate Authority" means the Appellate
Authority for Advance Ruling constituted under section
14.
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13. (1) The Central Government shall, by notification,
constitute an Authority to be known as the <Name
of the Union territory> Authority for Advance
Ruling:
Constitution of
Authority for
Advance Ruling.
Provided that the Central Government may, on the
recommendations of the Council, notify any
Authority located in any State or any other Union
territory to act as the Authority for the purposes of
this Act.
(2) The Authority shall consist of-
(i) one member from amongst the officers of central tax; and
(ii) one member from amongst the officers of Union territory
tax,
to be appointed by the Central Government.
(3) The qualifications, the method of appointment of the
members and the terms and conditions of their service shall
be such as may be prescribed.
14. (1) The Central Government shall, by notification,
constitute an Appellate Authority to be known as
<Name of the Union territory> Appellate Authority
for Advance Ruling for Goods and Services Tax for
hearing appeals against the advance ruling
pronounced by the Advance Ruling Authority:
Constitution of
Appellate
Authority for
Advance Ruling.
Provided that the Central Government may, on the
recommendations of the Council, notify any
Appellate Authority located in any State or any other
Union territory to act as the Appellate Authority for
the purposes of this Act.
(4) The Appellate Authority shall consist of-
(i) the Chief Commissioner of central tax as
designated by the Board; and
(ii) the Commissioner of Union territory tax
having jurisdiction over the applicant.
CHAPTER -VIII
TRANSITIONAL PROVISIONS
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15.(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, and
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.
Migration of
existing
taxpayers.
(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 of
the Central Goods and Services Tax Act.
16. (1) A registered person, other than a person opting
to pay tax under section 10 of the Central Goods and
Services Tax Act, shall be entitled to take, in his
electronic credit ledger, credit of the amount of
Value Added Tax [and Entry Tax] 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, not later
than ninety days after the said day, in such manner
as may be prescribed:
Transitional
arrangements
for input tax
credit.
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
sold under such exemption notifications as are
notified by the Government:
74 of 1956 Provided further that so much of the said credit as is
attributable to any claim related to section 3, sub-section (3)
of section 5, section 6 or section 6A or sub-section (8) of
section 8 of the Central Sales Tax Act, 1956 that is not
substantiated in the manner, and within the period,
prescribed in rule 12 of the Central Sales Tax (Registration
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and Turnover) Rules, 1957 shall not be eligible to be
credited to the electronic credit ledger:
Provided also that an amount equivalent to the credit
specified in the second proviso shall be refunded under the
existing law when the said claims are substantiated in the
manner prescribed in rule 12 of the Central Sales Tax
(Registration and Turnover) Rules, 1957.
(2) A registered person, other than a person opting to
pay tax under section 10 of the Central Goods and
Services Tax Act, shall be entitled to take, in his
electronic credit ledger, credit of the unavailed input tax
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 input tax credit under the existing law and
is also admissible as input tax credit under this Act.
Explanation.––For the purposes of this section, the
expression “unavailed input tax credit” means the
amount that remains after subtracting the amount of
input tax credit already availed in respect of capital
goods by the taxable person under the existing law from
the aggregate amount of input tax 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 sale of exempted goods [or tax free goods] under
the existing law but which are liable to tax under this
Act [or where the person was entitled to the credit of
input tax at the time of sale of goods], shall be entitled
to take, in his electronic credit ledger, credit of the value
added tax [and entry tax] 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;
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(iii) the said registered person is in possession of
invoice or other prescribed documents evidencing
payment of tax under the existing law in respect of such
inputs; and
(iv) such invoices or other prescribed documents
were issued not earlier than twelve months immediately
preceding the appointed day:
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 tax 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 sale of
taxable goods as well as exempted goods [or tax free
goods] under the existing law but which are liable to tax
under this Act, shall be entitled to take, in his electronic
credit ledger,-
(a) the amount of credit of the value added tax [and entry
tax] 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 credit of the value added tax [and
entry tax] 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 tax free goods] 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 value added tax [and
entry tax] in respect of inputs received on or after the
appointed day but the 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 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:
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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 the 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 value added tax
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 of the Central Goods and Services Tax Act;
(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 tax 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) The amount of credit under sub-sections (3), (4) and
(6) shall be calculated in such manner as may be
prescribed.
16. (1) Where any inputs received at a place of
business had been desptached as such or desptached
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:
Transitional
provisions
relating to job
work.
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Provided that the period of six months may, on
sufficient cause being shown, be extended by the
Commissioner for a further period not exceeding two
months:
Provided further that if such inputs are not returned
within a period of six months or the extended period
from the appointed day, 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 of the
Central Goods and Services Tax Act.
(2) Where any semi-finished goods had been
despatched from any 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 sub-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 a 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 subsection (8) of section 142 of the Central Goods and
Services Tax Act:
Provided also that the person despatching the goods
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 six months or the
extended period, as the case may be, from the
appointed day.
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(3) Where any goods had been despatched from the
place of business without payment of tax for carrying
out tests or any other process, to any other premises,
whether registered or not, in accordance with the
provisions of existing law prior to the appointed day and
such goods (herein after referred to as the “said goods”)
are returned to the said place of business 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 such 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 subsection (8) of section 142 of the Central Goods and
Services Tax Act:
Provided also that the person despatching the goods
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 six months or the
extended period, as the case may be, from the
appointed day.
(4) The tax under sub-sections (1), (2) and (3) shall not
be payable only if the person despatching the goods and
the job worker declare the details of the inputs or goods
held in stock by the job worker on behalf of the said
person on the appointed day in such form and manner
and within such time as may be prescribed.
17.(1) Where any goods on which tax, if any, had been
paid under the existing law at the time of sale 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 tax 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:
Miscellaneous
transitional
provisions.
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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 is revised
upwards on or after the appointed day, the registered person
who had sold such goods may 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 is
revised downwards on or after the appointed day, the
registered person who had sold such goods 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 input tax credit, 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 refunded to
him in cash in accordance with the provisions of the said
law:
Provided that where any claim for refund of the
amount of input tax credit is fully or partially rejected,
the amount so rejected shall lapse:
Provided further that no refund claim shall be
allowed of any amount of input tax credit where the
balance of the said amount as on the appointed day has
been carried forward under this Act.
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(4) Every claim for refund filed after the appointed day
for refund of any tax paid under the existing law in
respect of the goods 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 input
tax credit is fully or partially rejected, the amount
so rejected shall lapse:
Provided further that no refund claim shall be
allowed of any amount of input tax credit where the
balance of the said amount as on the appointed day
has been carried forward under this Act.
(5) (a) Every proceeding of appeal, revision, review or
reference relating to a claim for input tax credit 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 of credit
found to be admissible to the claimant shall be refunded
to him in cash in accordance with the provisions of the
existing law and the amount rejected, if any, shall not
be admissible as input tax credit under this Act:
Provided that no refund claim shall be allowed of any
amount of input tax 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, revision, review or
reference relating to recovery of input tax credit
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 of credit becomes recoverable as a result
of such appeal, revision, 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.

(6) (a) Every proceeding of appeal, revision, review or
reference relating to any output 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, revision, review or
reference, the same shall, unless recovered under the
existing law, be recovered as an arrear of tax under this Act
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and amount so recovered shall not be admissible as input
tax credit under this Act.
(b) Every proceeding of appeal, revision, review or
reference relating to any output 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 in accordance with the provisions of the
existing law and the amount rejected, if any, shall not
be admissible as input tax credit under this Act.
(7) (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 and the amount rejected, if any, shall not
be admissible as input tax credit under this Act.
(8) (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 input tax 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 input tax credit
is found to be admissible to any taxable person, the
same shall be refunded to him in cash under the
existing law and the amount rejected, if any, shall
not be admissible as input tax credit under this Act.
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(9) 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.
(10) (a) Notwithstanding anything contained in section
12 of the Central Goods and Services Tax Act, no tax
shall be payable on goods under this Act to the extent
the tax was leviable on the said goods under existing
law.
32 of 1994. (b) Notwithstanding anything contained in section 13 of
the Central Goods and Services Tax Act, 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.
32 of 1994.
(c)Where tax was paid on any supply, both under any
existing law relating to sale of goods 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.
(11) 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 the
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 the period specified in this subsection.
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(12) Where a supplier has made any sale of goods in
respect of which tax was required to be deducted at
source under any existing law relating to sale of goods
and has also issued an invoice for the same before the
appointed day, no deduction of tax at source under
section 51 of the Central Goods and Services Tax Act,
as made applicable to this Act, 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 purpose of this Chapter, the
expression “capital goods” shall have the same meaning
as assigned to it in any existing law relating to sale of
goods.
CHAPTER IX
MISCELLANEOUS PROVISIONS
18. (1) Subject to the provisions of this Act and the rules
made thereunder, the provisions of the Central Goods
and Services Tax Act, relating to, –
i. scope of supply;
ii. composition levy;
iii. composite supply and mixed supply;
iv. time and value of supply;
v. input tax credit;
vi. registration;
vii. tax invoice, credit and debit notes;
viii. accounts and records;
ix. returns;
x. payment of tax;
xi. tax deduction at source;
xii. collection of tax at source;
xiii. assessment;
xiv. refunds;
xv. audit;
xvi. inspection, search, seizure and arrest;
xvii. demands and recovery;
xviii. liability to pay in certain cases;
xix. advance ruling;
xx. appeals and revision;
xxi. presumption as to documents;
xxii. offences and penalties;
xxiii. job work;
xxiv. electronic commerce;
xxv. settlement of funds;
xxvi. transitional provisions; and
Application of
provisions of
Central Goods
and Services Tax
Act.
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xxvii. miscellaneous provisions including the
provisions relating to the imposition of
interest and penalty,
shall, mutatis mutandis, apply,-
(a) so far as may be, in relation to Union territory tax as
they apply in relation to central tax as if they were enacted
under this Act;
(b) subject to the following modifications and alterations
which the Central Government considers neceassry and
desirable to adapt those provisions to the circumstances,
namely, -
(a) references to “ this Act” shall be deemed
to be references to “the Union Territory
Goods and Services Tax Act, 2017”;
(b) references to “Commissioner” shall be
deemed to be references to Commissioner”
of Union territory tax as defined in subsection (3) of section 2 of this Act;
(c) references to “officers of central tax” shall
be deemed to be references to “officers of
Union territory tax”;
(d) reference to “central tax” shall be deemed
to be reference to “Union territory tax”.
(e) references to “Commissioner of State tax
or Commissioner of Union territory tax”
shall be deemed to be references to
“Commissioner of central tax”.
(f) references to “State Goods and Services
tax Act or Union Territory Goods and
Services tax Act”shall be deemed to be
references to “Central Goods and Services
tax Act”.

19.(1) The Central Government may, on the
recommendations of the Council, by notification,
make rules for carrying out the provisions of this Act.
Power to make
rules.
(2) Without prejudice to the generality of the
provisions of sub-section (1), the Central 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
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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) may provide
that a contravention thereof shall be liable to a penalty
not exceeding ten thousand rupees.
20. The Board may, by notification, make regulations
consistent with this Act and the rules made thereunder to carry
out the purposes of this Act.
General power to
make regulations.
21. Every rule made by the Central Government, every
regulation made by the Board and every notification issued
by the Central 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.
Laying of rules,
regulations and
notifications.
22. The Commissioner may, if he considers it necessary or
expedient so to do for the purpose of uniformity in the
implementation of the this Act, issue such orders, instructions or
directions to the Union territory tax officers as he may deem fit,
and thereupon all such officers and all other persons employed
in the implementation of the this Act shall observe and follow
such orders, instructions or directions:
Power to issue
instructions or
directions
Omissions,
substitutions,
and insertions
in the Acts to
be entered
here
23. Save as otherwise provided in this Act, on and from the date
of commencement of this Act,-
(i) in ----- Act/Regulation….. shall be omitted;
(ii) ……
Amendment of
certain Acts
24. (1) Save as otherwise provided in this Act, on and from
the date of commencement of this Act,-
(i) the <Name of Union Territory> Value Added Tax
Regulation/Act…, except in respect of goods included in
Repeal and
saving.
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the Entry 54 of the State List of the Seventh Schedule to the
Constitution,
(ii) ……..
(ii) ……..
(hereafter referred to as the repealed Acts) are hereby
repealed.
(2) The repeal of the said Acts shall not—
(a) revive anything not in force or existing at the time of
such repeal; or
(b) affect the previous operation of the amended or
repealed Acts or anything duly done or suffered thereunder;
or
(c) affect any right, privilege, obligation, or liability
acquired, accrued or incurred under the amended or repealed
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 tax, surcharge, 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
under the provisions of the amended or repealed Acts; or
(e) affect any investigation, inquiry, assessment
proceeding, adjudication and any other legal proceeding or
remedy in respect of any such tax, surcharge, penalty, fine,
interest, right, privilege, obligation, liability, forfeiture or
punishment, as aforesaid, and any such investigation, inquiry,
assessment proceeding, adjudication and other legal
proceeding or remedy may be instituted, continued or
enforced, and any such tax, surcharge, penalty, interest,
forfeiture or punishment may be levied or imposed as if these
Acts had not been so amended or repealed.
(f) affect any proceeding including that relating to an
appeal, revision, review or reference, instituted before, on
or after the appointed day under the said amended or
repealed Acts and such proceeding shall be continued
under the said amended or repealed Acts as if this Act had
not come into force and the said Acts had not been
amended or repealed.
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25.(1) If any difficulty arises in giving effect to any provision
of this Act, the Central 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:
Removal of
difficulties.
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.
Notes:
1) Amendments, Repeals and Savings to existing laws to be examined by
respective Administration of UTs
2) The expression “existing law relating to tax on sale of goods” has
been used in this draft law in absence of list of laws in force in the
respective UTs
3) A single draft law for all UTs has been prepared.
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