Nagaland act 004 of 2017 : The Nagaland Goods Services Tax Act, 2017

THE NAGALAND GOODS AND SERVICES TAx Ad, 2017 (NAGALAND ACT No.4 OF 2017)

Received the assert of the Governor of Nagaland on 29.5.17 and published in the Nagaland Gazette extraordinary, Dated l7thJune 2017 An

Act

to make a provision for levy and collection of tax on intra-State supply of goods or services or both by the State of Nagaland and the matters connected therewith or incidental thereto BE it enacted by the Legislature of Nagaland in the Sixty- eighth year of the Republic of India as follows:-

CHAPTER 1

PRELIMINARY

1. (1) This Act maybe cal led the

Nagaland Goods and Services Tax Act, 2017

(2) It extends to the whole of the Nagaland

Short tile, extent and

Commence-ment.

(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 provision 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

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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 to pass any order or decision under this Act, but does not include the Commissioner, Revisional Authority, the Authority for Advance Ruling, the Appellate AuthorityTribunal;

(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;

(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 reserve charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India bases but excludes Central tax, State tax, Union territory, 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

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(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 as referred to in section 107:

(9) "Appellate Tribunal" means the Goods and Services Tax Appellate Tribunal referred to in 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 self-assessment, 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;

(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 there under 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 underthis 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

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constituted under the Central Boards of Revenue Acts, 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 sub-clause (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;

(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

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an enterprise that is engaged in the supply of individual goods or services or a group of related goods or services which is subject to risks and returns that are different from thoseofthe other business verticals.

38 of 1949.

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 forthe goods or services;

(d) the methods used to distributed 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 values of which is capitalised in the books of account of the person claiming the input tax credit and which are used or intended to be used in the course or furtherance of business;

(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 section9 of Central Goods and Services Tax Act;

(22) "cess" shall have the same meang as assigned to it in the Goods and Services Tax (Compensation to States) Act;

(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;

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(24) "Commissioner" means the Commissioner of State tax Appointed under section 3 and includes the Principal Commissioner or Chief 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 orthe Government of Nagaland

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;

(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-

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(a) any payment made or to be made, whether in money or otherwise, in respectof, in responseto, orforthe 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 ora State Government;

Provided that a deposit given in respect of the supply of goodsor 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;

23 of 1959

(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;

(35) "cost accountant" means a cost accountant as defined in

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Clause (c) of sub-section (1) of section 2 of the Cost and Works Accountants Act, 1959;

21 of 2000.

(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 supplies of goods as maybe notified by the Commissioner;

(41) "document" includes written or printed record of any sort and electronic record as defined in clause (t) of section 2 of 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;

(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;

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(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 wholly 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, orto receive and use services for its own needs;

(51) "Fund" means the Consumer Welfare Fund established under section 57;

(52) "goods" means every kind of moveable property otherthan 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 orundera contract of supply;

(53) "Government" means the Government of Nagaland;

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(54) "Goods and Services Tax (Compensation to State) 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 lof the Constitution, its territorial waters, seabed and sub- soil underlying such waters, Continental Shelf, Exclusive Economic Zone or any other Maritime Zones as referred to in the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime Zone Act, 1976, and the airspace 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 Service 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;

(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;

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(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 made to him and includes-

(a) the integrated goods and services tax charged on import of goods;

(b) the tax payable under the provisions of sub-section (3) and

(4) of section 9;

(c) the tax payable under the provisions of sub-sections (3) and (4) of section 5 of the integrated Goods and Services Tax Act; or

(d) the tax payable underthe provisions of sub-sections (3) and

(4) of section 9 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 same 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 same 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 and services or both whether by purchase, acquisition or any other means, with or without consideration;

(68) "job work" means any treatment or process undertaken by a person on goods belonging to other registered person and the expression "job worker" shall be construed accordingly;

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(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 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 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 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 the 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 placeof residence of the recipient;

(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;

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(b) where a supply is received at a place other than the place of the 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 receipt 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 any 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 obtained 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 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, cake, 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;

(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

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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 Vehicle 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 bh which is not leviable to tax under this Act or under the Integrated Goods and Services Tax Act;

(79) "non-taxable territory" means the territory which is out, ide 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;

(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;

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(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 oroutside 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 co- operative societies;

21of 1860 (j)

a local authority;

(k) Central Government or a State Government;

(I) society as defined under the Societies Registration Act, 1860;

(m) trust; and

(n) every artificial juridical person, not falling within any of the above;

(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 persons store his goods, supplies or receives goods or services 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 Service Tax Act;

(87) "prescribed" means prescribed by rules made under this Act on the recommendations of the Council;

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(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 elements 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 means a period comprising three consecutive calendar months, ending on the last day of March, June, September and December of a calendar year;

(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;

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(94) "registered person" means a person who is registered under section 25 but does not include a person having a Unique Identity Number.

(95) "regulation" means the regulations made by the Government under this Act on the recommendations of the Council;

(96) "removal" in relation to goods, means-

(a) despatch of the goodsfor 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;

(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 sub-section (4) of section 9, or under sub- section (3) or sub-section (4) of section 5 of the Integrated Goodsand ServicesTaxAct;

(99) "Revisional Authority" means an authority appointed or authorised for revision of decision or orders as referred to in section 108;

42 of 2956

(100) "Schedule" means a Schedule appended to this Act;

(101) "securities" shall have the same meaning as assigned to it in 42 of 2956. 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,

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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 Nagaland;

(104) "State tax" means the tax levied underthis Act;

(105) "supplier" in relation to any goods or services or both, shall means 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;

(107) "taxable person" means a person who is registered or liable to be registered undersection 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 electromagnetic means;

(111) "the Central Goods and Services Tax Act" means the Central Goods and Services Tax Act 2017;

18

(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 inter-State 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 territorytax, integrated tax and cess;

(113) "usual place of residence" means-

(a) in case of an individual, the place where he ordinary resides;

(b) in other cases, the place where the person is incorporated or otherwise legally constituted;

(114) "Union territory" means the territory of;

(a) the Andaman and Nicobar Islands;

(b) Lakshadweep;

(c) Dadra and Nagar Haveli;

(d) Daman and Diu;

(e) Chandigarh; and

(1) otherterritory; Explanation: For the purpose of this Act each of the territories specified in sub-clauses (a) to (f) shall be consideration to be a separate Union 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 self-assessed tax has been paid in full;

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(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 or both and where the goods or services or both 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 (whether as goods or in some other form) 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 entral 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.

CHAPTER II

ADMINISTRATION

3. The Government shall, by notification, appoint the following officers classes of Officers for the purposes of this Act, namely:- under this Act.

(a) Principal Commissioner or 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 Commissioner of State tax,

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(f) Assistant Commissioners of State tax, and

(g) any other class of officers as it may deem fit:

4 of 2005

Provided that, the officers appointed under the Nagaland Value Added Tax Act,]

2005 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 Under section 3, appoint such Appointment persons as it may think fit to be the Officers under of Officers this Act.

(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, subjects 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 Powers may exercise the powers and discharge the duties of Officers conferred or imposed on him underthis Act.

(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 who is 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.

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6. (1) without prejudice to the provisions of this Act, the officers appointed under the Authorization

Central Goods and Services Tax Act are of central tax of officers

authorised to be the proper officers for the as proper officer in certain circumstance purposes of this Act, subject to such conditions as the Government shall, on the recommendations of the Council, by notification, specify.

(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 i-" the said Act under intimation to the jurisdictional officers of central tax;

(b) where a proper officer under the Central Goods and Services Tax Act has initiated 3ny proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this Act on the same subject matter.

(C) 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.

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CHAPTER VI

LEVY AND COLLECTION OF TAX

7. (1) Forthe purposes of this Act, the expression "supply" includes- Scope of Supply

(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, 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 (I),-

(a) activities ortransactions specified in Schedule Ill; or

(b) Such 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.

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(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

(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 Nagaland goods and services tax on all intra-

Levy and collection

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 maybe prescribed and shall be paid by the taxable person.

(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 reserve 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 reserve 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 Government may, on the recommendations of the Council, by notification, specify categories of Services the tax on the intra-State supplies of which shall be paid by the electronic commerce operator if

387

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 payingthe tax in relation to the supply of such service:

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 purposes in the taxable territory shall be liable to paytax:

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 paytax.

10 (1) Notwithstanding anything to the contrary contained in this Act but subject to the provisions of sub-sections (3) and (4) of section Composition

9, a registered person, who aggregate turnover in the Levy preceding financial year did not exceed fifty lakh rupees may opt to pay, in lieu of the tax payable by him, and amount calculated at such rate as maybe prescribed, but not exceeding,-

(a) one percent. of the turnover in State in case of a manufacturer,

(b) two and a halfper cent. of the turnover in a 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 df 0th ersuppliers, Subjects to such conditions and restrictions as maybe prescribed:

Provided that the Government may, by notification, increase the said limit of fifty lakhs rupees to such higher amount, not exceeding one crore rupees, as may be recommended by the Council.

(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 6of schedule II;

388

(b) he is not engaged in making any supply of goods which are not leviable to tax underthis Act;

(c) he is not engaged in making any inter-State outward supplies of goods;

(d) he is not engaged on making any supply of goods through an lectronic commerce operator who is required to collect tax atsource under section 52; and

(e) he is not a manufacturer of such goods as may be notified by the Government on the recommendations of the Council:

Provided that where more than one registered person are having the same Permanent Account Number (issued under 43 of Act 1961,

the Income tax registered person shall not be eligible to opt for the scheme under sub-section (1) unless all such registered person opt to paytax underthat sub-section.

(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 sub-section (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.

(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.

389

11. (1) where the Government is satisfied that it is necessary in Powerto grant

the public interest so to do, it may, on the exemption

recommendations of the Council by notification, exempt

from tax

generally, either absolutely or subject tosuch 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 maybe specified in such notification

(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 circumstance 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 or order issued under sub-section (2) of the said section of Central Goods and Services Tax Act shall be deemed to be a notification, or as the case may be, an order issued under this Act.

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.

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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 accordance with the provisions of this section

(2) The time of supply of goods shall be the earlier of the following dates, namely:-

Time of

Supply of

goods

(a) the date of issue of invoice by the supplier or the last date on which he is required, under sub-section (1) of section 31, to issue the invoice with respect to the supply: or

(b)the date on whic, he supplier receives the payment with respectto the supply;

Provided that where the supplier of taxable goods receives an amount up to one thousand rupee 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 clause (a) and (b), "supply" shall be deemed to have been made to the extent of-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.

(3) In case of supplies in respect of which taxis paid or liable to be paid on reserve charge basis, the time of supply shall be the earliest of the following dates, namely:-

391

(a) the date of the receipt of goods; or

b) 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

(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) or 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 identified 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 provisions of sub-section (2) or 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 field; or

(b) in any other case, be the date on which the tax is paid. 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 Time of supply, as determined in accordance with the provisions of this Supply of section. services

(2) The time of supply of service issue shall be the earliest of the services following dates, namely:-

392

(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 orthe date of receipt of payment, whichever is earlier; or

(b) the date of provision of services, if the invoice is not issued within the period prescribed under sub-section (2) of section 31 or the date receipt of payment, whichever is earlier; or

(c) the date on which the recipient shows the receipt of services in his book of account, in a case where the provisions of clause (a) or clause (b) do not apply:

Provided that where the supplier of taxable services received 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, the date 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 maybe, 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.

(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 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:

393

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, the supplier of services 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 under the provisions of sub-section (2) or 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, bethe date on which thetax is paid.

(6) The time of supply to the extent it relates to an addition in the value of supply by the 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 Change in

section 13, the time of supply, where there is a change in rate of tax in the rate of tax in respect of goods or services or both, shall respect of supply be determined in the following manner, namely:-

of goods or services.

(a) in case the goods or services or both has been supplied before the supply of change in the rate of tax:-

394

(I)

where the invoice for the same has been issued and the payment is received after the change in rate of tax, the time of supply shall be the date receipt of payment or the date of issue of invoice, whichever is earlier; or 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 the rate of tax, the time 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 the rate of tax but the invoice has been issued prior to the change in the rate of tax, the time of supply shall be the date of receipt of payment; or

(ii) where the invoice has been issued and the 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

(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 credited in the bank account if such credited 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 account of the supplier or the date on which the payment is credited to his bank account, whichever is earlier.

395

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 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 and 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 or delayed payment of any consideration for anysupply; and

(e) subsidies directly linked to the price excluding subsidies provided by the Central Government and State Governments.

Explanation.- For the purposes of this sub-section, 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-

396

(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 sub-section (1),the same shall be determined in such manner as may be prescribed.

(5) Notwithstanding anything contained in sub-section (1) or sub- tion (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 purpose of this Act,-

(a) persons shall be deemed to be "related person" if

(i) such person are officers or directors of one another's businesses;

(ii) such persons are legally recognised 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 control the others;

(vi) both of them are directly or indirectly controlled by third person;

(vii) together they directly or indirectly controls 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, however described, of the other, shall be deemed to be related.

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CHAPTER V

INPUT TAX CREDIT

16. (1) Every registered person shall, subject to such conditions and restrictions as may be prescribed and in Eligibility and the manner specified in section 49, be entitled to take conditions for credit of input tax charged on any supply of goods or taking input

tax credit.

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.

(2) Notwithstanding anything contained in this section, no registered person shall be entitled to the credit of any input tax in respect of any supplyof goods orservices or both to him unless,-

(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 purposes 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 utilisation of input tax credit admissible in respect of the said supply; and

(d) he has furnished the return under section 39:

398

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 maybe prescribed:

Provided also t.. the recipient shall be entitled to avail of the credit of input tax on payment by him of the amount towards the value of supply of goods or services or both along with tax payable thereon. 43 of 1961. (3) Where the 2gistered person has claimed depreciation on the tax component of the cost of capital goods and plant and machinery under the provisions o 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 the 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 forthe 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 purpose of his business.

Apportionment

of credit and

blocked credits

399

(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 registered 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 Il, sale of building.

(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 thefinancial 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 sub-section (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) motorvehicles and other conveyances exrpt when they are used-

(i) for making the following taxable supplies, namely:-

(a) further supply of such vehicles or conveyance; or

(b) transportation of passengers; or

(c) imparting training on driving, flying, navigating such vehicles or conveyances:

400

(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 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 categor' 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 plants 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 contraction of an immovable property (other than plants or machinery) on his own account including when such goods or services or both are used in the course orfurtherance of business.

Explanation,- For the purposes of clauses (c) and (d), the expression

"construction" includes re-construction, renovation, additions or alterations or repairs, to the extent of capitalisation, to the said immovable property;

401

(e) goods or services or both on which tax has been paid under section 10

(f) goods or services or both received by a non-resident 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 accordance with the provisions of section 74, 129 and

130.

(6) The Government may prescribed the manner in which the credit referred to in sub-sections (1) and (2) may be attributed.

Explanation,- For the purposes if this 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 maybe prescribed-

(a) a person who has applied for registration under this Act of within thirty days from the date on which he becomes liaole to registration and has been granted such registration shall be entitled to take Availability

credit of input tax in respect of inputs held in stock and credit in special

inputs contained in semi-finished or finished goods held circumstances

in stock on the day immediately preceding the date from which he becomes liableto paytax underthe provisions ofthisAct;

402

(b) a person who takes registration under sub-section (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;

(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 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, merger, demerger, amalgamated, leased or transferred business in such manner as may be prescribed.

403

(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 wholly exempt, 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 percentage points as may be prescribed, on the day immediately preceding the date of exercising of such option or, as the case maybe, 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 section 15, 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

Taking input

restrictions as may be prescribed, be allowed input tax tax credit in

credit on inputs sentto a job worker forjob work. respect of

inputs and

(2) Notwithstanding anything contained in clause (b) of capital goods sub- section (2) of section 16, the principal shall be

sent for job work

entitled to take sent job credit of input tax on inputs even if the inputs are directly sent work to a job worker for job work without being first brought to his place of business.

404

(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 the clause (a) or clause (b) of sub- section (1) of section143 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 ajob 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 workwithout 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 workers, the period of three years shall be counted from the Date of receipt of capital goods by the job worker.

(7) Nothing contained in sub-section (3) or sub-section (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.

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20. (1) The Input Service Distributor shall distribute the credit of State tax as State tax or integrated tax and integrated tax or state tax, by way of issue of document containing the amount of input tax credit being distributed in such mannerasmaybe prescribed.

Manner of Distribution of credit Input Service distributed

(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 maybe 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 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.

406

Explanation.- For the purposes of this section,-

(a) the "relevant period" shall be-

(i) if the recipients of credit have turnover in their State or Union territory 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 State 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 isto be distributed;

(b) the expression ecipient 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 "turno er", in relation to any registered person engaged in the supply of taxable goods as well as goods not taxable under this Act, means the value of turnover, reduced by the amount of any duty or tax levied under entry 84 of List 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 section 20 Manner of resulting in of excess distribution of credit to one or more recovery

recipients of credit, excess credit to distributed shall be of credit recovered from such recipients along with interest, and distributed

the provisions of section 73 or section 74, as the case may

in excess

be, shall, mutatis mutandis, apply for determination of amount to be recovered.

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CHAPTER-VI

REGISTRATION

22. (1) Every supplier making a taxable supply of goods and 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.

Persons liable for

registration

(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.

(4) Notwithstanding anything contained in sub-section (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, demerger of two or more companies pursuant to an order of a High Court, Tribunal or otherwise, the transferee shall be liable to be registered, withe effect from the date on which the Registrar of Companies issues a certificate of incorporation giving effect to such order of the High Court or Tribunal.

Explanation.- Forthe purpose 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;

408

(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 Persons not

registration, namely:

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 Actor 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 Governr- nt 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 Compulsory

(1) of section 2, the following categories of persons registration in

shall be required to be registered underthis Act,- certain cases.

(I) persons making any inter-State taxable supply;

(ii) casualtaxable persons making taxable supply;

(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 making taxable supply;

(vi) persons who are required to deduct tax under section 51, whether or not separately registered under this Act;

(vii) persons who make taxable supply of goods or services or both on behalf of other taxable person 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;

409

(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 onthe recommendations of the Council.

25. (1) Every person who is liable to be registered under Procedure for section 22 or section 24 shall apply for registration 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:

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 theterritorial waters of India shall obtained registration in the State where the

nearest point of the appropriate baseline is located in the state.

(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 the 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.

410

(5) Where a person who has obtained or is required to obtain registration in a State or Union territory in respect of anestablishment, 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.

(6) Every person shall have a Permanent Account Number issued under the Income-tax Act 1961 in order to be eligible for grant of 43 of 1961. registration:

(7)

(8)

(9)

46 of 1947 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.

Notwithstanding anything contained in sub-section (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.

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.

Notwithstanding anything contained in sub-section (1),-

(a) any specialised agency of the United Nation Organisation or any Multilateral Financial Institution and Organisation 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.

411

(10) The registration or the Unique Identity Number shall be granted or rejected after due verification in such manner and within such period as maybe 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 a Unique Identity Number shall be deemed to ave 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 shall be Deemed

deemed to be a grant of registration or the Unique registration

Identity Number under this Act subject to the condition that the application for registration or the unique Identity Number has not been rejected under this Act within the time specified in sub- section (10) of section 25.

(2) Notwithstanding anything contained in sub-section (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 underthis Act.

27. (1) The certificate of registration issued to a casual taxable person or a non-resident taxable person shall be valid for the 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 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

412

(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:

(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 Amendment officer of any changes in the information furnished at of registration the time of registration or of subsequent thereto, in such form and manner and within such Period as maybe 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 filled by the registered person or by his Cancellation legal heirs, in of case of death of such person, cancel of registration the registration, in such manner and within such

period as may be prescribed, having regard to the circumstances where,-

(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

413

(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.

(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) a 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 registered 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 month 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 person to pay tax and other dues under this Act or to discharge any obligation under this Actor 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 underthis Act.

(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

414

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 pdyable 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 register d person, whose registration is

Revocation

of cancellation

cancelled by the proper officer on his of own of registration

motion, may apply to such officer for revocation cancellation^of the registration in the prescribed manner within thirty days from the date of service of the cancellation order.

(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 application 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 underthis Act.

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CHAPTER-Vu

TAX INVOICE, CREDIT AND DEBIT NOTES

31. (1) A registered person supplying taxable goods shall before or at Tax

the time of.-

Invoice

(a) removable 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 maybe 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 prescribed period, 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 such conditions as may be mentioned therein, specify the categories of services in respect of which-

(a) any other document issued in relation to the supply shall be deemed tobea tax invoice; or

(b) tax invoice may not be issued.

(3) Notwithstanding anything contained in sub-sections (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, issued a revised invoice against the invoice already issued during the period beginning with the effective date of registration till the date of issuance of certificate of registration to him;

416

(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 maybe 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 L 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 payment with respect to any supply of goods or servi es or both the registered person issues a receipt voucher, but subsequently no supply is made and no tax invoice is issued in pursunce 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 (3) or sub-section (4) of section 9 shall issue an invoice in respect of goods or services or both received by him from the supplier who is not registered on the date of receipt of goods or services or both;

(g) a registered person who is liable to pay tax under sub-section (3) or sub-section (4) of section 9 shall issue a payment voucher at the time of making payment to the supplier.

(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.

417

(5) Subject to the provisions of clause (d) of sub-section (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 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 made before such cessation.

(7)

Notwithstanding anything contained in sub-section (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 Prohibition in respect of of any supply of goods or services or both unauthorized anyamount by way of tax under this Act.

collection of tax

(2) No registered person shall collect tax except in accordance with the provisions of this Act orthe rules made thereunder.

33. Notwithstanding anything contained in this Act or any other Amount of tax to be indicated

law forth time being in force, where any supply is made for in tax invoice a consideration, every person who is liable to pay tax for such and other supply shall prominently indicate in all documents relatingto documents assessment, tax invoice and other like documents, the amount of tax which shall form part of the price at which such supply is made.

418

34. (1) Where a tax invoice has been issued for supply of any goods or services or both and the taxable value or tax credit and

debit notes

charged in that tax invoices 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.

(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 furnishing 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.

(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 maybe 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.

419

CHAPTER VIII

ACCOUNTS AND RECORDS

35. (1) Every registered person shall keep and maintain, at his Accounts principal place of business, as mentioned in the and other certificate of registration, a true and correct account of:-

records

(a) production or manufacture of goods;

(b) inward and 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:

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.

(2) Every owner or operator of warehouse or godown or any other lace 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 the goods in such manner as may be prescribed.

(3) The Commissioner may notify a class of taxable persons to maintain additional accounts or documents for each purposes 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 maybe prescribed.

420

(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 sub-section (5) of section 17, where the registered person fails to account forthe goods or services or both in accordance with the provisions of 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 Period of books of account or other records in accordance with the retention of provisions of sub- section (1) of section 35 shall retain accounts them until the expiry of seventy two months from the due date of furnishing 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 forthe period specified above, whichever is later.

421

CHAPTER-IX

RETURNS

37.(1) Every registered persons, other than an Input Service Furnishing

Distributor, a non-resident taxable person and a person details

paying tax under the provisions of section 10 or section 51 outward

or section 52, shall furnish, electronically, in such form and

supplies.

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 supplies within such time and in such manneras may be prescribed:

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 maybe 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:

(2) Every registered person who has been communicated the details under sub-section (3) section of 38 or the details pertaining to inward supplies of Input Service Distributer under sub- section (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

422

38.(1) Every registered person, other than an Input Service Furnishing

Distributor or non-resident taxable person or a person details of paying tax uncle the provisions of section 10 or section 51 inward

or section 52, shall verify,validate, modify or delete, if

Supplies

required, the details relating to outward supplies and credit or debit notes communicated undersub-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 notes received by him in respect of such supplies that have not been declared by the supplier under sub-section (1) of section 37.

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 afterfurnishing 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.

(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 or section 51 or section 52, shall furnished, 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

423

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.

(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 notified 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 yearto which such details pertain, orfurnishing of the relevant annual return, whichever is earlier.

424

39.(1) Every registered person, other than an Input Service Furnishing

Distributor or a non-resident taxable person or a person^of returns

paying tax under the provisions of section 10 or 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 such other particulars as may be prescribed on or before the twentieth day of the month succeeding such calendar month or part thereof.

(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 turnover in the State, inward supplie f 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 s€ :tion 51 shall furnished, in such form and manner as maybe prescribed, a return, electronically, for the month in which such deductions have made within ten days after the end of such month.

(4) Every taxable person registered as an Input Service Distributor shall, or 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:

425

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 sub-section (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 made during such tax period.

(9) Subject to the provisions of section 37 and 38, if any registered person after furnishing a return under sub-section (1) or sub-section (2) sub- section (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 particuars in the return to be furnished for the month or quarter during which such omission or incorrect particulars are notice, 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 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 t' 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 First return registration till the late on which registration has been

426

granted shall declare the same in the first return furnished by him after grant of registration.

41.(1) Every registered person shall, subject to such conditions and restrictions as may be prescribed, be entitled to take the credit of eligible inputtax, as self-assessed, in his return and such amount shall be credit on a provisional basis to his electronic credit ledger.

Claim of input tax credit and provisional Acceptance

(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.

42.(1) The details of every inward supply furnished by a Matching

registered person (hereafter in this section referred to as reversal and reclaim of

the "recipient")for a tax period shall, in such manner and input tax

within such time as may be of prescribed, be matched credit

(a) with the corresponding details of outward supply furnished credit 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 finallyaccepted 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

427

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 maybe prescribed.

(5) The amount in respect of which any discrepancy is communicated thunder the 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 sub-section (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 500n the amount so added from the date of availing of credit till the corresponding additions are made underthe 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;

428

Provided that the amount of interest to be credited in any case shall not exceed the amount of interest paid by the supplier.

(10) The amount reduced from the output tax liability in contravention of the provisions of sub-section (7) shall be added to output tax liability of the recipient in his return for the amount in which such contravention takes places and such recipient shall be liable to pay interest on the amount so added at the rate specified in sub-section (3) of section 50.

43.(l) The details of every credit note relating to output supply Matching,

furnished by a registered person (hereafter in this section reversal and

referred reversal and to as the "supplier") for a tax period

reclaim of reduction in

shall, in such manner and with such time as may be outputtax

prescribed, be matched.

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 but 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 maybe 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.

429

(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 d 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 sub-section (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 atthe 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 maybe prescribed:

Provided that the amount of interest to be credited in any case shall not exceed the amount of interest paid by the recipient.

(10) The amount reduced from output tax liability in contravention of the provisions of sub-section (7) shall be added to the output 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.

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44. (1) Every registered person, other than an Input Service Annual Distributor, a person paying tax under section 51 or section return.

52, a casual taxable person and a non-resident 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.

(2) Every registered person who is required to get his accounts audited in accordance with the provisions of sub-section (5) of section 35 shall furnish, electronically, the annual return under sub-section (1) along with a copy of the audited annual accounts and a reconciliation statement, reconciling the value of supplies declared in the return furnished for financial year with the audited annual financial statement, and such other particulars as maybe prescribed.

45. Every registered person who is required to furnish a return under sub- section (1) of sction 39 and whose registration has been car celled shall furnish a final return within three months of the date of cancellation or date of order of cancellation, whichever is later, in such form and manner as maybe prescribed. Final return.

Notice to

46. Where a registered person fails to furnish a return under return section 39 or section 44 or section 45, a notice shall be Defaulters.

issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed.

47. (1)

Any registered person who fails to furnish the details of Levy of outward or inward supplies required under section 37 or late fee section 38 or return required under section 39 or section 45 by the due date shall pay a late fee of one hundred rupees for every day during which such failure continues subject to a maximum amount of fivethousand rupees.

(2) Any registered person who fails to furnish the return required under the section 44 by the due date shall be liable to pay a late fee of one

431

hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter percent. 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 authorised an approved goods and services tax practitioner to furnish the details of outward supplies under section 37, the details of inward supplies under section 38 and the return section 39 or section 44 or section 45 in such manner as may be prescribed.

(3) Notwithstanding anything contained in sub-section (2), the responsibility for correctness of any particulars furnished in the return or other details filed by the goods and se:-vices tax actitioners shall continue to rest with the registered person on whose behalf such return and details are furnished.

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CHAPTER-X

PAYMENT OF TAX

49. (1) Every deposit made towards tax, interest, penalty, fee or any Pt of

other amount by a person by internet banking or by using tax, interest,

creditor debit cards or National Electronic Fund Transfer or penalty and

Real Time Gross Settlements or by such other mode and other Amount

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 manners as may be prescribed.

(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 maintain 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 rovisions 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 maybe 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 asther 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, maybe utilised towards payment of integrated tax;

433

(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 the Union territory tax and the amount remaining, if any, may be utilised towards payment of integrated tax;

(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 the 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 period;

(b) Self-assessed tax, and other dues related to the returns 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 underthis 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.

434

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 Actor the rules made thereunder.

50. (1) Every person who is liable to pay tax in accordance with the

Interest on

provisions of this Act or the rules made thereunder, but fails delayed to pay the tax or any part thereof to the Government within payment of 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

(2) The interest under sub-section (1) shall be calculated, in such manner as maybe 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 the input tax credit under sub-section (10) of section 42 or undue or excess reduction in the output tax liability under sub-section (10) of section 43, shall pay interest on such due 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) Notwithing anything to the contrary contained in this Act, Tax deduction

The Government may mandate:- at Source.

435

(a) a department or establishment of the Central Government or State Government; or

(b) Local authority; or

(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 the deduction of tax specified above, the value of supply shall be taken as the amount excludingthecentraltax, State tax, integrated tax and cess indicated in the invoice.

(2) The amount deducted as tax under this section shall be paid to the Government by the deducted within ten days after the end of the month in which such deduction is made, in such manner as maybe 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.

(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 late fee, a

436

sum of one hundred rupees per day from the day after the expiry of such five day period untllthe 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 sub- section (3) of section 39, in such manner as may be prescribed.

(6) If any deductorfails 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 arsing 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.(!) Notwithstanding anything to the contrary contained in this

collection of Act, every electronic commerce operator (hereafter in this tax at source

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 by the Government on the recommendation 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.

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

437

sub-section (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 sub-section (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 tothe Government by the operator within ten days after the end of the month in which such collection is made, in such manner as maybe 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 maybe prescribed, within ten days after the end of such month. IN 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 maybe prescribed, before the thirty first day of December following the end of such financial year.

(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

438

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) \Nhere 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 as maybe prescribed.

(10) The amount in resrect of which any discrepancy is communicated under sub-section (9) ano Nhich 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 manneras may be prescribed.

(11) The concerned supplier, in whose output tax liability any amount has been added under sub-section (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 operatorto furnish such details relating to-

439

(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 operator and declared as additional places of business by such supplier, as maybe 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.

(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 twentyfive thousand rupees. xpianation For the purposes of this section, the expression "concerned suopiier shiH mean the supplier of goods or services or both making supnlies fl, rough the oçerator.

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 Transfer of accordance with the provisions of sub-section (5) of section input tax 49, as reflected in the valid return furnished under sub-section credit

(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 tu che amount so reduced from the State tax account to the integrated tax account in such manner and within such time as may be prescribed.

440

CHAPTER XI

REFUNDS

54. (1) Any person claiming refund of any tax and interest, if any, Refund

paid on such tax or any other amount paid by him, may make of tax

an application before the expiry of two years from there relevant date in such form and manner as may be prescribed. Provided that a registered person, claiming refund of any balance in the electronic cash ledger in accordance with the provisions of sub- section (6) of section 49, may claim such refund in the return nished under section 39 in such manner as may be prescribed.

(2) A specializea dgency of the United Nations Organisation or any 46 of 1947 MuftHateral Financial Institution and Organisation 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 ur. Jer 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 utilised 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 by the Government on the recommendations of the Council:

441

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 exported duty:

Provided also that no refund of input tax credit shall be allowed, if the supplier of goods or services or both claims refund of the tegrated tax paid in 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 paid by him and the incidence of such tax and interest had not been passed onto any other person:

Provided that where the amount claimed as refund is less than two akh 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 the 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 refunded, 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 sub-section (5), the proper officer may, in the case of any claim for refund on account of zero- rated supply of goods or services or both made by registered persons, other than such category of registered persons as may be notified by

442

the Government on the recommendations of the Council, refund on a provisional basis, ninety per cent of the total amount so claimed, xcluding the amount of input tax credit provisionally accepted, in such manner and subject to such conditions, limitations and safeguards as maybe 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 sub-section (5) within sixty days from the date of receipt of application complete in all respects.

(8) Notwithstanding anything contained in sub-section (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 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 unutilized 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, orwhere 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 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,

443

(9) Notwithstanding anything to the contrary contained in any judgement, 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 is shall be made except in accordance with the provisions sub-section (8)

(10) Where any refund is due under sub-section (3) to a registered person who has defaulted 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 Actor under the existing law. 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 the other proceedings on the 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 notified on the recommendations of the Council, if as a result of the appeal orfurther proceedings he becomes entitled to refund.

443

(13) Notwithstanding anything to the contrary contained in this section, the amount of advance tax deposited by a casual taxable person or a non-resident 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 undersection 39.

(14) Notwithstanding anything contained in this section, no refund under sub-section (5) or sub-section (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 the tax paid on zero-rated supplies of goods or services or both or on inputs services used in making such zero-rated supplies, or refund of tax on the supply of goods regarded as deemed exports, or refund of unutilised input tax credit as provided under sub-section (3).(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 goods themselves or, as the case-may be, the inputs services used in such goods,-

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 furnished;

(c) in the case of services exported out of India where a refund of tax is paid is available in respect of services themselves or, as the case may be, the inputs or input services used in such services, the date of-

444

(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 priorto the date of issue of the invoice;

(d) in case where the tax becomes refundable as a consequence of judgement, decree, order or direction of the Appellate Authority, Appellate Tribunal or any court, the date of communication of such judgement, decree, order or direction;

(e) in the case of refund of utilised inputtax credit under sub- section (3), the end of the financial year in which such claim for refund arises;

(f) in 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 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.

55.

46 of 1947 The Government may, on the recommendations of the Council, by notification, specify any specialized agency Refund in certain cases.

of the United Nations Organisation or any Multilateral Financial Institution and 46 of 1947 Organisation 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.

445

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

Interest on

the date of receipt of application under sub-section (1) delayed

of that section, interest at such rate not exceeding six refunds

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 sub-section till the date of refund of such tax:

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 by the Government on the recommendations of the Council shall be payable in respect of such refund from the date mmediately after the expiry of sixty days from the date of receipt of application till the date of refund. 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 Consumer

the Consumer Welfare Fund and there shall be credited Welfare Fund

to the Fund:-

(a) the amount referred to in sub-section (5) of section 54;

(b) any income from investment of the amount credited to the Fund; and

446

(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 Utilization

Government for the Welfare of the Consumers in such of Fund mannerasmaybe Prescribed.

(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-XI I

ASSESSMENT

59. Every registered person shall self-assess the taxes payable under 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

Provisional

taxable person is unable to determine the value of

Assessment

goods or services or both or determine the rate of tax applicable thereto, he may request the proper officer 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 vakies 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.

447

(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 maybe 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 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 on any tax payable on the supply of goods or services or 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.

(5) Where the registered person is entitled to a refund consequent to the order of final assessment under sub-section (3), subject to the provisions of sub-section (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 Scrutiny of

particulars furnished by the registered person to verify Returns the correctness of the return and inform him of the discrepancies notified, if any, in such manner as may be prescribed and seek his explanation thereto.

(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.

448

(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 initiated 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

Assessment of

in section 73 or section 74 where a registered person

non-filers of

fails to furnish the return under section 39 or section returns.

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.

(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

Assessment of in section 73 or section 74, where a taxable person unregistered

fails to obtain registration even though liable to do so persons or whose registration has been cancelled under sub- section (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

449

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:

Provided that no such assessment order shalt 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 Summary

permission of Additional Commissioner or Joint assessment in certain

Commissioner, proceed to assess the tax liability of specialcases

such person to protect the interest of revenue and issue an assessment order, if he has sufficient grounds to believe any delay in doing so may adversely affect the interest of revenue. 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.

(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.

450

CHAPTER XVI

AUDIT

65. (1) The commissioner or any officer authorised by him by way of a general or a specific order, may undertake Audit by tax

audit of any registered person for such period, at such authorities

frequency and in such manner as maybe prescribed.

(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 the audit in such manner as may be prescribed.

(4) The audit under sub-section (1) shall be completed within a period of three month 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 authority, 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 required the registered person,-

(i)

to afford him the necessary facility to verify the books of account or other documents as he may require;

45!

89

(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 forsuch 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 undersection 73 or section 74.

66.11) If at any stage of scrutiny, inquiry, investigation or any other proceedings before him, any officer not below the rank of

Special

Assistant Commissioner, having regard to the nature and

Audit

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.

(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 if ninety days.

452

(3) The provisions of sub-section (1) shall have effect notwithstanding that the accounts of the registered person have been audited under any other provision of this Actor 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 an audit of records under sub- section (1), including the remuneration of such chartered accountant or cost accountant, shall be determined and paid by the Commissionerand such determination shall be final.

(6) Where the special 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.

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 his accounts orgoods in such a manner as is likelyto clause evasion of tax payable underthis Act,

453

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 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 proceeding under this Act, are secreted in anyplace, he may authorise in writing any other officer of State tax to search any 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 bysuch officer onlyforso long as may be necessaryfortheir examination and for any inquiryor proceeding underthis Act.

(3) The documents, books or things referred to in sub-section (2) or any other documents, books or things produced by taxable person or any other person, which have not been relied upon 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.

(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 with 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.

454

(5) The person from whose custody any documents are seize 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 clause being shown, be extended by the proper officer for a further period not exceeding six months.

(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 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.

(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

455

seizure under this section subject to the modification that sub- section (5) of section 165 of the said Code shall have effect as ifforthe word "Magistrate", wherever it occurs, the word "Commissioner"

were substituted.

2 of 974

(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 thereunderfor prosecution.

(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 the issue of tax invoices or bills of supply by suchtaxable 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 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

456

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 a person has committed any offence specified in clause (a) or Power to clause (b) or clause (c) or clause (d) of sub-section (1) of Arrest

section 132 which is punishable under clause (i) or (ii) of sub-section (1), or sub-section (2) of the said section, he may, by order, authorise anyofficerof State tax to arrest such person.

(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 the person shall inform such person of the grounds of arrest and produce him before a Magistrate within twenty four hours.

(3)

2 of 1974. (b)

70. (1)

5 of 1908 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 bailor in default of bail, forwarded to the custody of the magistrate; 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

The proper officer under this Act shall have

power to

power to summon any Power person whose summon

attendance he considers necessary either to give

persons to

give evidence and

summon evidence or to produce a document or produce doctments. 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.

(2 Every such inquiry referred to in sub-section (1) shall be deemed to 45 of 1860

be a "judicial proceedings" within the meaning of section 193 and section 228 of the Indian Penal Code.

457

71. (1) Any officer under this Act, authorised by the proper officer not below the rank of Joint Commissioner, shall have Access to

access to any place of business of a registered person to business

inspect books of account, documents, computers, premises.

computer programs, computer software whether installed in a computer or otherwise and such other things as he require and which maybe available at such place, for the purposes of carrying out any audit, scrutiny, verification and checks as maybe necessary to safeguard the interest of revenue.

(2) Every person in charge of place referred to in sub-section (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 declare to the proper officer in such manner as may be prescribed.

(ii) trial balance or its equivalent;

(iii) statement of annual financial account, duly audited, wherever required;

(iv) cost audit report, if any, undersection 148 of the Companies Act, 18 of 2013 2013;

(v) the income-tax audit report, if any, under section 44AB of the 43of1961 Income-taxAct 1961;and

(vi) any other relevant record, for the SCrtny by the officer or audit party or the chartered accountri or cost accountant within a period not exceeding fifteen working days from the day when such demand is made, or such further period as maybe allowed by the said officer or the audit party or the chartered accountant or cost accountant.

458

72. (1) All officers of Police, Railways, Customs, and those officers engaged in the collection of land revenue, including village officers, officers of central tax and officers of the Union territory proper tax shall assist the 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

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

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

erroneously been made, or who has wrongly wilful misstatement

availed or utilised input tax credit, requiring him to show cause as to 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 Actor the rules made thereunder.

(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

or suppression of

Facts.

459

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 sub-section (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 sub-section (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), or 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 officerin writing of such payment.

(6) The proper officer, on receipt of such information, shalt not serve any notice under sub-section (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 sub-section (1) or sub- section (3) pays the said tax along with interest payable under sub- 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.

460

(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 date for furnishing 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 sub-section (6) or sub- section (8), penalty under sub-section (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

refunded or where input tax credit has been

wrongly availed or utilised by 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 shoe cause as to why he should not pay the amount

specified in the notice along with interest payable

Determination

of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised by reason of fraud or any wilful

misstatement

of facts. thereon under section 50 and a penalty equivalent to the tax specified in the notice.

(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;

461

(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 the 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 sub-section (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 sub-section (1) of section 73, subject to the condition that the ground relied upon in the said statement, except the grounds of fraud, or any wilful misstatement or suppression of facts to evade tax, for 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 (10), pay the amount of tax along with interest payable under section 50 and a penalty equivalent to fifteen percent, 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.

(6) The proper officer, on receipt of such information, shall not serve any notice under sub-section (1), in respect of the tax so paid or any payment 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 sub-section (1) pays the said tax along with interest payable under section 50 an a penalty equivalent to twenty five percent. of such tax 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.

462

(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 a period of five years from the due date for furnishing of annual return for the financial years 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.

Explanationi.- For the purposes of section 73 and this section,-

(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 furnished any information on being asked for, in writing, by the proper officer.

463

(5)

75. (1) Where the services 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 misstatement 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 su b-section (1) of section 73.

(3) Where any order is required to be issue 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.

(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. 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 proceeding

The proper officer, in his order, shall set out the relevant facts and the basis of his decision.

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.

464

(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.

(11) An issue on which the Appellate Authority or the Appellate Tribunal or High Court has given its decision which is prejudicial to the interest of revenue in some other proceedings and 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 High Court or the date of decision of the High Court and that of 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 underthe 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.

465

76.(1) Notwithstanding anything to the contrary contained in any order or direction of any Appellate Authority or Appellate Tax collected

Tribunal or court or in any other provisions of this but not paidto

Act or the rules made thereunder or any other law Government

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

(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 as to 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 underthe 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 sub-section (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 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.

466

(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.

(9) The amount paid to the Government under sub-section (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 maybe 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 intra-State 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 taxable in pursuance of an order passed under this Act shall be paid by such person within initiation of a period of three months from the date of service of such order failing which recovery proceedings shall be proceedings

initiated:

recovery

467

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 Recovery

thereunder is not paid, the proper officer shall proceed to recover the amount by one or more of the following modes, namely:-

(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 maybe 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 is it is equal to or less than that amount;

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 post office, banking company or an insurer, it shall not be necessary to produce any pass book, deposit receipt,

of ^Tax

4 6 8

106

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; in case the person to whom a notice under sub-clause (I) has been issued, fails to make the payment in pursuance there of to the Government, he shall be deemed to be defaulter in respect of he amount specified in the notice and all the consequences of this Act orthe rules made thereunder shall follow;

(iv) the officer issuing a notice under sub-clause (i) may, at any time, amend or revoke such notice or extend the time for making any payment in pursuance of the notice;

(v) any person making any payment in compliance with the 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 orto 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 that 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 tithe 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 whorn the notice has been served to pay to the Government any such money or part thereof;

469

(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 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 arrearof land revenue;

(f)

2of 1947

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 sub-section.

(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 the central tax, during the course of recovery of the said tax arrears,

470

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.

(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 Government 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, extent the time Payment of for payment or allow payment of any amount due tax and other

under this Act, other than the amount due as per the amount in

liability self-assessed in any return, by such person in

instalments.

monthly instalments not exceeding twenty four, subject to payment of interest under section 50 and subject to such conditions and limitations as may be prescribed:

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 shalt, 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 Transfer of belonging to him or in his possession by way of sale, property to be mortgage, exchange, or any other mode of transfer void in whatsoever of any of his properties in favour of any certair. cases.

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:

Provided that, said charge or transfer shall not be void if it is made for adequate consideration, in good faith and without notice of the

471

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.

31 of 2016 Notwithstanding anything to the contrary in any law for Tax to be first

the time being in force, save as otherwise provided in charge on

the Insolvency and Bankruptcy Code, 2016, any amount property

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 shall be the 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 provisionalhi any property, including bank account, belonging to the taxable person in such manner may be prescribed.

(2) Any such provisional attachment shali 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

Continuation

under this Act, (hereafter in this section referred and validation

to as "Government dues"), is served upon any of certain recovery

taxable person or any other person and any appeal

proceedings

or revision application is filed or any other proceedings is initiated in respect of such Government dues, then-

(a) where such Government dues are enhanced in such appeal, revisions or other proceedings, he 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 enhance and any

Provisional attachment to protect

revenue in certain cases.

472

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 any other proceedings may, without the services of any fresh notice of demand, be continued from the stage at which such proceeding 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;

(ii) the Commissioner shall give intimation of such reduction to him and to the appropriate authority with whom recovery proceeding is pending;

any recovery proceeding initiated on the basis of the demand served upon him prior to the disposal of such appeal, revision or other proceeding may be continued in relation to the amount so reduced from the state at which such proceeding 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 any other manner what so ever, the taxable

person and the person to whom the business is so

Liabiii-ty in

case of transfer

transferred shall, jointly and severally, be liable of business. 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 determine before such transfer but has remain unpaid or is determined thereafter.

473

87. (1) When two or more companies are amalgamated or merged in pursuance of an order of court or the Tribunal or otherwise and the order is to take effect from a date earlier to the date Liability in

U the order and any two or more of such companies case of amalgamation

have supplied or received any goods or services or

or merger of

both to or from each other during the period companies

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.

88. (1) When any companies is being wound up whether underthe orders of a court or Tribunal or otherwise, every person

31 of 2016

Liability incase

appointed as receiver of any assets of a company

of company

(hereafter in this section referred to as the inliquidation

"liquidator"), shall, within thirty days after his appointment, give intimation of his appointment to the Commissioner.

(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 his 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 in his principal, such agent and his principal shall jointly and severally, be liable to pay text payable on such goods under this Act

Liability of agent and principal

(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.

474

(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.

(3)

89. (1)

18 of 2013 When any private company is wound up and any tax, interest or penalty determined under this Acton 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 anytime during the period for which the tax was due shall, jointly and severally, be liable for the payment for 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 preach of duty on his part in relationto the affairs of the company.

Notwithstanding anything contained in the Liability of. Companies Act, 2013, where any tax, interest or directors of penalty due from a private company in respect of private company 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 preach of duty on his part in relation to the affairs of the 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 sub-section (1) shall apply to any person who was a

415

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 Liability of liable to pay any tax, interest or penalty under this Act,

partners of

firm to pay^tax 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 provision 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, Liability of

trustee or agent of a minor or other incapacitated guardians

person on behalf of and for the benefit of such minor or trustees etc.

order incapacitated person, the tax, interest or penalty shall be lieved 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 capacited person and as if he were conducting the business himself, and all the provisions of this Actor the rules made thereunder shall apply accordingly. the firm and each of the partners of the firm shall, jointly and severally, be liable for such payment:

476

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 Liability^of the court of Wards, the Administrator General the Court of

Official Trustee or any receiver or manager (including

Wards, etc.

any person, whatever be his designation, who in fact manges 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 manage 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 orthe rules made thereunder shall apply accordingly.

93. (1)

31 of 2016 (a)

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:-

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 the other person, shall be liable to pay tax, interest or penalty due from under this Act; and

Special provisions regarding liability to pay tax, interest or penalty in certain cases.

such person

(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 upaid 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

477

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 upto 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.

(3)

31 of 2016 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 upto 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.

(4) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, where a taxable person, liable to pay tax, interest or penalty 31 of 2016. underthis 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 terminate, the ward or the beneficiary shall be liable to pay the tax, interest or penalty due from the taxable person upto 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 Liability in persons or a Hindu Undivided Family and such firm, other cases. association orfamily has discontinued business-

478

(a) the tax, interest or penalty payable under this Act by such firm, association or family up to the date of 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 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 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 partition.

Explanation.- For the purposes of this chapter, -

(i) a "Limited Liability Partnership" formed and registered under the 6 of 2009 provisions of the Limited Liability Partnership Act, 2008 shall also be considered as a firm;

(ii) "court" means the District Court, High court or Supreme Court.

479