Goods and Services Tax

Who can order for carrying out “Inspection” and under what circumstances?
Question 3
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 3. Who can order for carrying out “Inspection” and under what circumstances?
Ans. As per Section 60 of MGL, Inspection can be carried out by an officer of CGST/SGST only upon a written authorization given by an officer of the rank of Joint Commissioner or above. A Joint Commissioner or an offic

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What will be considered as ‘repeated short payments’ for the purpose of levy of penalty
Question 5
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 5. What will be considered as 'repeated short payments' for the purpose of levy of penalty?
Ans. Section 66(2) explains that three short payment in respect of three returns during any six consecutive tax periods shall be considered as repeated short payment for the pu

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What is the meaning of the term “Inspection”?
Question 2
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 2. What is the meaning of the term “Inspection”?
Ans. 'Inspection' is a new provision under the MGL. It is a softer provision than search to enable officers to access any place of business of a taxable person and also any place of business of a person engaged in transporting goods or who is an owner or an operator of a wa

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What is the meaning of the term “Search”?
Question 1
Bill
Inspection, Search, Seizure and Arrest
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 1. What is the meaning of the term “Search”?
Ans. As per law dictionary and as noted in different judicial pronouncements, the term 'search', in simple language, denotes an action of a government machinery to go, look through or examine carefully a place, area, person, object etc. in order to find something concealed or for t

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What is the quantum of penalty provided for in the MGL
Question 4
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 4. What is the quantum of penalty provided for in the MGL?
Ans. Section 66(1) provides that any taxable person who has committed any of the offences mentioned in section 66 shall be punished with a penalty that shall be higher of the following amounts:
* The amount of tax evaded, fraudulently obtained

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What are the general disciplines to be followed while imposing penalties
Question 3
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 3. What are the general disciplines to be followed while imposing penalties?
Ans. The levy of penalty is subject to a certain disciplinary regime which is based on jurisprudence, principles of natural justice and principles governing international trade and agreements. Such general discipline is enshrined in section 68 of the Act. Accordingly-
* no penalty is to be imposed without issuance of a show cause notice and proper hearing in the matter, affording an opportunity to the person proceeded against to rebut the allegations lev

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What is meant by the term penalty
Question 2
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 2. What is meant by the term penalty?
Ans. The word “penalty” has not been defined in the MGL but judicial pronouncements and principles of jurisprudence have laid down the nature of a penalty as:
* a temporary punishment or a sum of money imposed by statute, to be paid as punishment for the commission of a certain offence

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What are the powers of Settlement Commission?
Question 14
Bill
Settlement Commission
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 14. What are the powers of Settlement Commission?
Ans. The powers and procedures of Settlement Commission are given in sections 25 and 26 of IGST Act. It is vested with the powers of a civil court under the Code of Civil Procedure, 1908, for discovery and inspection, enforcing the attendance of a person and examining him on oath, and compelling production of books of account and other records. Settlement Commission is deemed to be a civil court for the purposes of section 195 of the Code of Criminal Procedure, 1973. Any proceeding before it shall be deemed to be a judicial proceeding un

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What are the prescribed offences under MGL
Question 1
Bill
Offences and Penalties, Prosecution and Compounding
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 1. What are the prescribed offences under MGL?
Ans. The Model GST Law codifies the offences and penalties in Chapter XVI. The Act lists 21 offences in section 66, apart from the penalty prescribed under section 8 for availing compounding by a taxable person who is not eligible for it.
The said offences are as follows:-
1) Making a supply without invoice or with false/ incorrect invoice;
2) Issuing an invoice without making supply;
3) Not paying tax collected for a period exceeding three months;
4) Not paying tax collected in contravention of the MGL fo

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andatory fields for registration;
13) Obstructing or preventing any official in discharge of his duty;
14) Transporting goods without prescribed documents;
15) Suppressing turnover leading to tax evasion;
16) Failure to maintain accounts/documents in the manner specified in the Act or failure to retain accounts/documents for the period specified in the Act;
17) Failure to furnish information/documents required by an officer in terms of the Act/Rules or furnishing false information/documents during the course of any proceeding;
18) Supplying/transporting/storing any goods liable to confiscation;
19) Issuing invoice or document using GSTIN of another person;
20) Tampering/destroying any material evidence;
21) Disposing of /

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Who cannot use Settlement Commission?
Question 13
Bill
Settlement Commission
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 13. Who cannot use Settlement Commission?
Ans. The following persons cannot avail of the facility of Settlement Commission?
i. No person can avail the facility of settlement more than twice. (section 23)
ii. A person cannot apply for settlement in any other matter where after passing of a settlement order, a person was convicted of any offence u

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How will the settlement between Centre, exporting state and importing state be done
Question 9
Bill
Overview of the IGST Act
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 9. How will the settlement between Centre, exporting state and importing state be done?
Ans. There would be settlement of account between the centre and the states on two counts, which are as follows-
* Centre and the exporting state: The exporting state shall pay the amount equal to the ITC of SGST

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How will the IGST be paid
Question 8
Bill
Overview of the IGST Act
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 8. How will the IGST be paid?
Ans. The IGST payment can be done utilizing ITC or by cash. However, the use of ITC for payment of IGST will be done using the following hierarchy,-
* First available ITC of IGST shall be used for payment of IGST;
* Once ITC of IGST is exhausted, the ITC of CGST shall be used for payment of IGST;
* If both ITC of IGST and

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What are the circumstances in which order of Settlement Commission can be revoked?
Question 12
Bill
Settlement Commission
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 12. What are the circumstances in which order of Settlement Commission can be revoked?
Ans. (i) Order of Settlement Commission shall be void if it is later found that it was obtained by fraud or misrepresentation of facts. Thereafter proceedings covered by the settlement shall stand revived from the stage

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IGST Act is very small with very few definitions and major part catering to settlement commissioner. Whether provisions in CGST or SGST Act will apply to IGST Act
Question 7
Bill
Overview of the IGST Act
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 7. IGST Act is very small with very few definitions and major part catering to settlement commissioner. Whether provisions in CGST or SGST Act will apply to IGST Act?
Ans. Yes, Section 27 of the IGST Act provides that vari

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How will imports/exports be taxed under GST
Question 6
Bill
Overview of the IGST Act
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 6. How will imports/exports be taxed under GST?
Ans. All imports/exports will be deemed as inter-state supplies for the purposes of levy of GST (IGST). The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed. Full and complete

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What are the advantages of IGST Model
Question 5
Bill
Overview of the IGST Act
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 5. What are the advantages of IGST Model?
Ans. The major advantages of IGST Model are:
a). A.Maintenance of uninterrupted ITC chain on inter-State transactions;
b) No upfront payment of tax or substantial blockage of funds for the inter-State seller or buyer;
c) No refund claim in exporting State, as ITC is used up while paying the tax;
d

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What orders can be passed by the Settlement Commission?
Question 11
Bill
Settlement Commission
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 11. What orders can be passed by the Settlement Commission?
Ans. Settlement Commission shall pass an order providing for terms of settlement which shall include:
i. the amount of tax, interest, fine or penalty that is payable by the applicant (if this amount is not paid within thirty days or a further extended period of three months, it shall be recovered along with interest as sums due to Central Government in accordance with section 54 of CGST Act ); (section 16)
ii. manner in which the sums due under the settlement shall be paid; (section 16)
iii. granting immunity fr

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case back to the jurisdictional IGST officer or the First Appellate Authority if it is of the opinion that the applicant has not cooperated with the Settlement Commission. In such case, the relevant adjudicating authority is entitled to use all material and information produced by taxable person before the Settlement Commission or the results of an inquiry held by the Settlement Commission; (section 21)
vii. R eopen any proceeding connected with the case concluded earlier and pass appropriate order. This can be done only after taking concurrence of the applicant and if five years have not expired for the concluded proceeding , counting from the date of application for Settlement. ( Section 18)
–
Statute, statutory provisions legislat

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What are the salient features of the draft IGST Law
Question 4
Bill
Overview of the IGST Act
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 4. What are the salient features of the draft IGST Law?
Ans. The draft IGST law contains 33 sections divided into 11 Chapters. The draft, inter alia, sets out the rules for determination of the place of supply of goods. Where the supply involves movement of goods, the place of supply shall be the location of goods at the time at whi

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How will the Inter-State supplies of Goods and Services be taxed under GST
Question 3
Bill
Overview of the IGST Act
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 3. How will the Inter-State supplies of Goods and Services be taxed under GST?
Ans. IGST shall be levied and collected by Centre on inter-state supplies. IGST would be broadly CGST plus SGST and shall be levied on all inter-State taxable supplies of goods and services. The inter-State seller will pay IGST on

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Can the applicant withdraw his settlement application once filed?
Question 10
Bill
Settlement Commission
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 10. Can the applicant wi

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What are inter-state supplies
Question 2
Bill
Overview of the IGST Act
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 2. What are inter-state supplies?
Ans. A supply of goods and/or services in the course of inter-State trade or commerce means any supply where the location of the supplier and the place of supply are in different States. (Section 3(1) and 3(2) of the IGST Act)
–
Statute, statutory provisions legislation, law, enactment, Acts, Rules, Regulations, Tax

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What is IGST
Question 1
Bill
Overview of the IGST Act
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 1. What is IGST?
Ans. “Integrated Goods and Services Tax” (IGST) means ta

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What are the circumstances in which application for settlement cannot be entertained?
Question 9
Bill
Settlement Commission
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 9. What are the circumstances in which application for settlement cannot be entertained?
Ans. As per section 15 of the IGST Act, in the following circumstances, Settlement Commission will not accept an application for settlement:
i. If the case involved in the application is pending with the Appellate

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A person from Gurgaon travels by Air India flight from Mumbai to Delhi and gets his travel insurance done in Mumbai. What will be the place of supply
Question 18
Bill
Place of Supply of Goods and Service
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 18. A person from Gurgaon travels by Air India flight from Mumbai to Delhi and gets his travel insurance done in Mumbai. What will be the place of supply?
Ans. The location of the recipient of services on the records of the

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What are the conditions which must be fulfilled before application for settlement can be accepted?
Question 8
Bill
Settlement Commission
FAQ on GST dated 21.9.2016 based on Draft Model GST
Q 8. What are the conditions which must be fulfilled before application for settlement can be accepted?
Ans. As per section 15 of the IGST Act, the following conditions must be fulfilled before an application for settlement of a case can be accepted:
(a) the applicant has furnished the retu

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