Goods and Services Tax – GST – By: – sandeep saini – Dated:- 7-9-2016 Last Replied Date:- 8-9-2016 – Fate of Unjust enrichment principle under GST As we all know getting refund from Government is always a tedious task, and the most difficult task is to pass the unjust enrichment test i.e. to satisfy the Departmental officer that incidence of tax/duty has not been passed on to another person. The same test of unjust enrichment has to be passed under GST also, while claiming the refund under section 38 of the Draft CGST/SGST Act. The application which is filed for claiming refund under section 38, will be accompanied by prescribed documents or evidences, to prove that the amount of tax and interest, in relation to which refund is claimed, the incidence of such tax and interest has not been passed on by the applicant to any other person. In this regard, the CBEC has also put a draft circular on public domain for getting feedback and comments, although the draft circular is relating to re
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
on: The amount which is claimed as refund, has been paid or credit note has been issued; The refund amount should be shown as Duty Receivable under the heading Current assets The consolidated journal entry, which is passed at the end of the financial year, must reflect the invoices in respect of which differential amount of duty/taxes, is being transferred to Duty Receivable Account. In the Balance sheet Duty Receivable under the heading current assets, should be reflected, till the financial year, preceding the financial year, in which refund is sanctioned. For example, if the refund is sanctioned in the financial year 2016-17, the refund amount as Duty receivable should be shown upto the Balance sheet of financial year 2015-16 only. Certification of documents, for showing compliance of the conditions of unjust enrichment principle As per Draft Circular As per Draft CGST/SGST Act Self certification of the certificates, could be done by the appplicant, if the refund amount is ₹ 2
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
claimed in relation to duty/tax amount claimed as refund; If has already availed CENVAT Credit, then he will reverse the input tax credit account, by an amount equal to the refund amount and the same would be credited to Duty receivable account; If the duty/tax amount is included in the purchases, in that case the purchase account may be credited at the year end and debit the same in the Duty Receivable account. If the recipient reverses the CENVAT Credit in the financial year in which he claims the duty/tax amount as refund, it is sufficient to satisfy the test of principle of unjust enrichment. Refund arising out of differential duty on final products Discounts: The actual discount is quantified at the year end and the accounts are settled accordingly, in the given case normally transaction is settled through credit/debit note, where supplier credits the account of buyer with the amount of discount/incentives and the buyer shall debit the account of supplier in his books of account w
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ion filed by him has been rejected on the ground of unjust enrichment, etc. The amount of duty/tax paid on capital goods, not to be capitalised The amount of duty/tax on capital goods has not been availed as CENVAT Credit and also duty/tax paid on capital goods is not claimed as depreciation under the provisions of Income Tax Act, 1961, in other words the amount of duty/tax should not be capitalised. The principle of unjust enrichment does not apply in case of refund of pre-deposit The pre-deposit requirement at the time filing appeal before First Appellate Authority or Appellate Tribunal, is also retained under GST also. As per the Draft Circular, the principle of unjust enrichment is not applicable in case of refund of pre-deposit. We hope the government will take care of above points and would clarify about the applicability of unjust enrichment under GST, while finalising the law. Web: www.pks.co.in – Reply By Ganeshan Kalyani – The Reply = Sir, Nice article. Sir, the para in your
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =