THE SALES TAX PRACTITIONERS’ ASSOCIATION OF MAHARASHTRA GST Seminar on 14.05.2017 Adv. C.B. Thakar

COVERAGE Refunds Assessment Audit Search, Seizure and Arrest Offences and Penalties.

REFUNDS In tax laws refund of excess from government is an essential aspect. Till today under BST/VAT Refund used to arise from Returns/Orders and used to be granted with some additional procedure of filing application. Under GST there will be changes and required to be noted carefully.

SITUATIONS WHERE REFUND CAN ARISE Refund in Electronic Cash Ledger Section 49(6) Refunds to UNO etc. Section 54(2) Refunds in case of Zero-Rated Supplies Section 54(3) Refunds due to higher rate on input/lesser rate on output Others

Refund Application Application for Refund to be filed within 2 years from the relevant date Section 54(1) Different dates in different situations Section 54(1) Application to be accompanied with prescribed documents like invoices, self declaration etc. Non-Passing of Tax/interest to others

Credit of refundable amount to Consumer Welfare FundSection 54(5) Provisional refund of 90% in case of “Zero-Rated Supply”Section 54(6) Process of Refund Order to be completed within 60 daysSection 54(7)

Payment of refund instead of Consumer Welfare Fund in following cases Section 54(8) (a) refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies; (b) refund of unutilised input tax credit under sub-section (3); (c) refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued, or where a refund voucher has been issued; (d) refund of tax in pursuance of section 77; (e) the tax and interest, if any, or any other amount paid by the applicant, if he had not passed on the incidence of such tax and interest to any other person; or (f) the tax or interest borne by such other class of applicants as the Government may, on the recommendations of the Council, by notification, specify.

Even for refund as per order conditions of filing application and other conditions will apply Section 54(9) Refund after adjustment of prior dues and withholding of refund till all returns are filed Section 54(10) Withholding of refunds in case of pending matters Section 54(11) Withhold refund to carry interest at prescribed rate Section 54(12)

Casual dealer can get refund of Advance Tax upon filing all returnsSection 54(13) No refund of amount less than ₹1,000Section 54(14) Refund to UNO and other organisationsSection 55 There are provisions for grant of interest on refund. Interest from 61st day of filing Application till grant of refundSection 56

There are provisions for Consumer Welfare Fund with guidelines for utilisation Section 57 and Section 58 There are connected refund provisions like Section 16 of IGST Act for “Zero-rated” Supplies; Section 77 of CGST Act for wrong tax payment.

ASSESSMENTS Self Assessment Section 59 Provisional Assessment Section 60 Where filer of return is unable to decide value/rate of tax, he can pay tax on provisional basis after informing Officer in writing. Passing of order by Proper Officer within 90 days determining the issue. There may be conditions for bond. Final Assessment Order within six months or further extended period. Provisions for charging and paying interest exist.

Scrutiny of Returns Section 61 If discrepancies is communicated but not fulfilled then there may be assessments. Assessment of non filers of return Section 62 Ex-parte best judgment order upon failure to file return after giving notice – it is subject to cancellation if return filed within 30 days of service of such order Section 62 Assessment of URP within five years from date of filing Annual Return Section 63

Summary Assessment Section 64 In case of emergency with prior permission It can be on person in-charge of goods also Such order can be cancelled by higher officer for regular assessment. Normal Assessment Provisions Section 73 In case of evasion Section 74 General Assessment Provisions Section 75

Section 65-Audit by Tax Authorities Section 2(13) of the CGST Act, 2017, defines “audit” as 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.”

Section 65-Audit by Tax Authorities The commissioner of SGST or CGST or any officer authorized by him by way of general or specific order may conduct the audit of any taxable person. Audit shall be conducted at the business place of Registered Taxable person. RTP shall be informed in advance not less than 15 days. Audit shall be completed within three  months from the date of commencement. For any reason if the commissioner is satisfy that audit can not be completed with in three months , for reason to be recorded in writing , may extended it for further period of six months. Commencement date of audit for the above sub section shall be , the date of record and other document called and submitted by RTP or Start of audit at RTP office which ever is later. Within 30 days from the conclusion of audit, the proper officer will inform the RTP of  audit finding and reason of the same. Where the audit result in detection of tax not paid, short paid or erroneously refunded or  ITC wrongly claimed or utilized, the officer may start action.

Section 66-Special Audit If during scrutiny, enquiry, investigation or any other proceeding, any officer not below the rank of Asst. commissioner/ deputy commissioner with the approval of commissioner when ever he feels that there is question of loss of interest of revenue, where the value has not been declared adequately, credit availed is not as per norms, may direct such RTP in writing to get his record including books of accounts audited by chartered accountant or cost accountant nominated by the commissioner. The chartered accountant or cost accountant within period of 90 days , submit his report duly signed to asst. / deputy commissioner. He may be permitted to extend the same by another 90 days on sufficient reason.            The expenses and fees of audit shall be determined and paid by commissioner.

INSPECTION, SEARCH, SEIZURE AND ARREST Power of inspector under section 67 when there is reason to believe; Tax evasion either by any taxable person or URP or goodown keeper etc.

Power of search and seizure of documents/goods Section 67(2) Powers to include break open/return of unrequired papers, grant of copies, release of goods on bond/return of goods, disposal of perishable or hazardous goods, inventory of goods etc. are specified in Sections 67(3) to 67(16). There is power for spot seizure of documents as well as dummy transactions for finding of evasions- Section 67(11) and 67(12) E-way Bill procedure to be authorized by Section 68 and there can be interceptions during movement of goods.

Power to Arrest Section 69 provides for power to arrest to be executed by officer under Central Tax. The procedure is akin to Code of Criminal Procedure. There are powers for summoning any person for evidence Section 70 There are powers to access to any place of business for inspection and also to call for assistance Section 77 All other government agencies like Police, Railway etc. to assist GST authorities for implementation of GST.

Penalty and Offences Like any other Fiscal Statute, GST contains penalty and offences provisions Section 122 provides various instances for attracting penalty like issue of false invoices etc. Penalty can be Rs. 10, 000 or upto tax evasion. Similarly different situations are provided with different limits.

Section 123 provides punishment of Rs Section 123 provides punishment of Rs. 10,000 for failure to file Information Return. Under Section 124 provides fine for failure to furnish statistics. Under Section 125 general powers to levy penalty upto Rs. 25,000, where no specific penalty is provided. Section 126, General principles for penalty-no penalty to be levied for minor breaches or technical breaches which can be rectified and which are without mens rea Section 127 gives general power to levy penalty. Section 128 gives power to waive penalty by notification

Section 129 provides for detention, seizure and release of goods and conveyance in transit. Similarly Section 130 permits for confiscation of goods and conveyance. Section 131 clarifies that a person can be liable under this Act irrespective of other law and also under other law. Section 132 prescribes instances for fine and imprisonment. There are other incidental and ancillary provisions about penalty/offences.

Thank you