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(305)

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Volume 152

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Bengaluru, Thursday, August 3, 2017 (Shravana 12, Shaka Varsha 1939)

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Issue 31

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The Central Goods and Service Tax Act, 2017 (No. 12 of 2017) C£ÀÄß ¸ÁªÀðd¤PÀgÀ ªÀiÁ»wUÁV PÀ£ÁðlPÀ gÁdå¥ÀvÀæzÀ°è ªÀÄgÀÄ

¥ÀæPÀn¸À¯ÁVzÉ.

THE CENTRAL GOODS AND SERVICES TAX ACT, 2017

NO. 12 OF 2017

[12th April, 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 Central Government and for matters

connected therewith or incidental thereto.

BE it enacted by Parliament in the Sixty-eighth Year of the Republic of India as

follows:—

CHAPTER I

PRELIMINARY

1. (1) This Act may be called the Central Goods and Services Tax Act, 2017.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) It shall come into force on such date as the Central Government may, by notification

in the Official Gazette, appoint:

Short title,

extent and

commencement.

MINISTRY OF LAW AND JUSTICE

(Legislative Department)

New Delhi, the 12th April, 2017/Chaitra 22, 1939 (Saka)

The following Act of Parliament received the assent of the President on the

12th April, 2017, and is hereby published for general information:—

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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,––

(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 Central Board of Excise

and Customs, the Revisional Authority, the Authority for Advance Ruling, the Appellate

Authority for Advance Ruling, the Appellate Authority and the Appellate Tribunal;

(5) “agent” means a person, including a factor, broker, commission agent, arhatia,

del credere agent, an auctioneer or any other mercantile agent, by whatever name

called, who carries on the business of supply or receipt of goods or services or both on

behalf of another;

(6) “aggregate turnover” means the aggregate value of all taxable supplies

(excluding the value of inward supplies on which tax is payable by a person on reverse

charge basis), exempt supplies, exports of goods or services or both and inter-State

supplies of persons having the same Permanent Account Number, to be computed on all

India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;

(7) “agriculturist” means an individual or a Hindu Undivided Family who

undertakes cultivation of land—

(a) by own labour, or

(b) by the labour of family, or

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

constituted under section 109;

(10) “appointed day” means the date on which the provisions of this Act shall

come into force;

(11) “assessment” means determination of tax liability under this Act and includes

self-assessment, re-assessment, provisional assessment, summary assessment and

best judgment assessment;

(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

thereunder or under any other law for the time being in force to verify the correctness

of turnover declared, taxes paid, refund claimed and input tax credit availed, and to

assess his compliance with the provisions of this Act or the rules made thereunder;

(14) “authorised bank” shall mean a bank or a branch of a bank authorised by

the Government to collect the tax or any other amount payable under this Act;

4 of 1882.

Definitions.

43 of 1961.

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(15) “authorised representative” means the representative as referred to in

section 116;

(16) “Board” means the Central Board of Excise and Customs constituted under

the Central Boards of Revenue Act, 1963;

(17) “business” includes––

(a) any trade, commerce, manufacture, profession, vocation, adventure,

wager or any other similar activity, whether or not it is for a pecuniary benefit;

(b) any activity or transaction in connection with or incidental or ancillary

to sub-clause (a);

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 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 those of

the other business verticals.

Explanation.––For the purposes of this clause, factors that should be considered

in determining whether goods or services are related include––

(a) the nature of the goods or services;

(b) the nature of the production processes;

(d) the methods used to distribute the goods or supply of services; and

(e) the nature of regulatory environment (wherever applicable), including

banking, insurance, or public utilities;

(19) “capital goods” means goods, the value of which is capitalised in the books

of 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 a State or a Union

territory where he has no fixed place of business;

(21) “central tax” means the central goods and services tax levied under

section 9;

54 of 1963.

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(22) “cess” shall have the same meaning 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;

(24) “Commissioner” means the Commissioner of central tax and includes

the Principal Commissioner of central tax appointed under section 3 and the

Commissioner of integrated tax appointed under the Integrated Goods and Services

Tax Act;

(25) “Commissioner in the Board” means the Commissioner referred to in

section 168;

(26) “common portal” means the common goods and services tax electronic

portal referred to in section 146;

(27) “common working days” in respect of a State or Union territory shall

mean such days in succession which are not declared as gazetted holidays by the

Central Government or the concerned State or Union territory Government;

(28) “company secretary” means a company secretary as defined in clause

(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––

(a) any payment made or to be made, whether in money or otherwise, in

respect of, in response to, or for the inducement of, the supply of goods or

services or both, whether by the recipient or by any other person but shall

not include any subsidy given by the Central Government or a State

Government;

(b) the monetary value of any act or forbearance, in respect of, in

response to, or for the inducement of, the supply of goods or services or

both, whether by the recipient or by any other person but shall not include

any subsidy given by the Central Government or a State Government:

Provided that a deposit given in respect of the supply of goods or

services or both shall not be considered as payment made for such supply

unless the supplier applies such deposit as consideration for the said supply;

(32) “continuous supply of goods” means a supply of goods which is

provided, or agreed to be provided, continuously or on recurrent basis, under a

contract, whether or not by means of a wire, cable, pipeline or other conduit, and

for which the supplier invoices the recipient on a regular or periodic basis and

includes supply of such goods as the Government may, subject to such conditions,

as it may, by notification, specify;

38 of 1949.

56 of 1980.

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(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 clause (c) of

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

(36) “Council” means the Goods and Services Tax Council established under

article 279A of the Constitution;

(37) “credit note” means a document issued by a registered person under

sub-section (1) of section 34;

(38) “debit note” means a document issued by a registered person under

sub-section (3) of section 34;

(39) “deemed exports” means such supplies of goods as may be notified under

section 147;

(40) “designated authority” means such authority as may be notified by the

Board;

(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;

(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 Parliament or any Authority or person having

the power to make such law, notification, order, rule or regulation;

(49) “family” means,––

(i) the spouse and children of the person, and

(ii) the parents, grand-parents, brothers and sisters of the person if they

are wholly or mainly dependent on the said person;

(50) “fixed establishment” means a place (other than the registered place of

business) which is characterised by a sufficient degree of permanence and suitable

structure in terms of human and technical resources to supply services, or to receive

and use services for its own needs;

23 of 1959.

21 of 2000.

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

(52) “goods” means every kind of movable property other than money and

securities but includes actionable claim, growing crops, grass and things attached to

or forming part of the land which are agreed to be severed before supply or under a

contract of supply;

(53) “Government” means the Central Government;

(54) “Goods and Services Tax (Compensation to States) Act” means the Goods

and Services Tax (Compensation to States) Act, 2017;

(55) “goods and services tax practitioner” means any person who has been

approved under section 48 to act as such practitioner;

(56) “India” means the territory of India as referred to in article 1 of the

Constitution, its territorial waters, seabed and sub-soil underlying such waters,

continental shelf, exclusive economic zone or any other maritime zone as referred to in

the Territorial Waters, Continental Shelf, Exclusive Economic Zone and other Maritime

Zones Act, 1976, and the air space above its territory and territorial waters;

(57) “Integrated Goods and Services Tax Act” means the Integrated Goods and

Services Tax Act, 2017;

(58) “integrated tax” means the integrated goods and services tax levied under

the Integrated Goods and Services Tax Act;

(59) “input” means any goods other than capital goods used or intended to be

used by a supplier in the course or furtherance of business;

(60) “input service” means any service used or intended to be used by a supplier

in the course or furtherance of business;

(61) “Input Service Distributor” means an office of the supplier of goods or

services or both which receives tax invoices issued under section 31 towards the

receipt of input services and issues a prescribed document for the purposes of

distributing the credit of central tax, State tax, integrated tax or Union territory tax paid

on the said services to a supplier of taxable goods or services or both having the same

Permanent Account Number as that of the said office;

(62) “input tax” in relation to a registered person, means the central tax, State tax,

integrated tax or Union territory tax charged on any supply of goods or services or

both 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-sections (3) and (4) of

section 9;

section 5 of the Integrated Goods and Services Tax Act;

(d) the tax payable under the provisions of sub-sections (3) and (4) of

section 9 of the respective State Goods and Services Tax Act; or

(e) the tax payable under the provisions of sub-sections (3) and (4) of

section 7 of the Union Territory 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 or

services or both whether by purchase, acquisition or any other means with or without

consideration;

80 of 1976.

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(68) “job work” means any treatment or process undertaken by a person on

goods belonging to another registered person and the expression “job worker” shall

be construed accordingly;

(69) “local authority” means––

(a) a “Panchayat” as defined in clause (d) of article 243 of the Constitution;

(b) a “Municipality” as defined in clause (e) of article 243P of the

Constitution;

authority legally entitled to, or entrusted by the Central Government or any State

Government with the control or management of a municipal or local fund;

(d) a Cantonment Board as defined in section 3 of the Cantonments

Act, 2006;

(e) a Regional Council or a District Council constituted under the Sixth

Schedule to the Constitution;

(f) a Development Board constituted under article 371 of the Constitution;

(g) a Regional Council constituted under article 371A of the Constitution;

(70) “location of the recipient of services” means,—

(a) where a supply is received at a place of business for which the

registration has been obtained, the location of such place of business;

(b) where a supply is received at a place other than the place of business

for which registration has been obtained (a fixed establishment elsewhere), the

location of such fixed establishment;

place of business or fixed establishment, the location of the establishment most

directly concerned with the receipt of the supply; and

(d) in absence of such places, the location of the usual place of residence

of the recipient;

(71) “location of the supplier of services” means,—

(a) where a supply is made from a place of business for which the

registration has been obtained, the location of such place of business;

(b) where a supply is made from a place other than the place of business

for which registration has been obtained (a fixed establishment elsewhere), the

location of such fixed establishment;

place of business or fixed establishment, the location of the establishment most

directly concerned with the provisions of the supply; and

(d) in absence of such places, the location of the usual place of residence

of the supplier;

(72) “manufacture” means processing of raw material or inputs in any manner

that results in emergence of a new product having a distinct name, character and use

and the term “manufacturer” shall be construed accordingly;

(73) “market value” shall mean the full amount which a recipient of a supply is

required to pay in order to obtain the goods or services or both of like kind and quality

at or about the same time and at the same commercial level where the recipient and the

supplier are not related;

(74) “mixed supply” means two or more individual supplies of goods or services,

or any combination thereof, made in conjunction with each other by a taxable person

for a single price where such supply does not constitute a composite supply.

Illustration.— A supply of a package consisting of canned foods, sweets,

chocolates, cakes, dry fruits, aerated drinks and fruit juices when supplied for a

41 of 2006.

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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 recognised 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;

(76) “motor vehicle” shall have the same meaning as assigned to it in clause (28)

of section 2 of the Motor Vehicles Act, 1988;

(77) “non-resident taxable person” means any person who occasionally

undertakes transactions involving supply of goods or services or both, whether as

principal or agent or in any other capacity, but who has no fixed place of business or

residence in India;

(78) “non-taxable supply” means a supply of goods or services or both which is

not leviable to tax under this Act or under the Integrated Goods and Services Tax Act;

(79) “non-taxable territory” means the territory which is outside the taxable

territory;

(80) “notification” means a notification published in the Official Gazette and the

expressions “notify” and “notified” shall be construed accordingly;

(81) “other territory” includes territories other than those comprising in a State

and those referred to in sub-clauses (a) to (e) of clause (114) ;

(82) “output tax” in relation to a taxable person, means the tax chargeable under

this Act on taxable supply of goods or services or both made by him or by his agent

but excludes tax payable by him on reverse charge basis;

(83) “outward supply” in relation to a taxable person, means supply of goods or

services or both, whether by sale, transfer, barter, exchange, licence, rental, lease or

disposal or any other mode, made or agreed to be made by such person in the course

or furtherance of business;

(84) “person” includes—

(a) an individual;

(b) a Hindu Undivided Family;

(d) a firm;

(e) a Limited Liability Partnership;

(f) an association of persons or a body of individuals, whether incorporated

or not, in India or outside India;

(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;

59 of 1988.

18 of 2013.

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(j) a local authority;

(k) Central Government or a State Government;

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

(m) trust; and

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

(85) “place of business” includes––

(a) a place from where the business is ordinarily carried on, and includes a

warehouse, a godown or any other place where a taxable person stores his

goods, supplies or receives goods or services or both; or

(b) a place where a taxable person maintains his books of account; or

agent, by whatever name called;

(86) “place of supply” means the place of supply as referred to in Chapter V of

the Integrated Goods and Services Tax Act;

(87) “prescribed” means prescribed by rules made under this Act on the

recommendations of the Council;

(88) “principal” means a person on whose behalf an agent carries on the business

of supply or receipt of goods or services or both;

(89) “principal place of business” means the place of business specified as the

principal place of business in the certificate of registration;

(90) “principal supply” means the supply of goods or services which constitutes

the predominant element of a composite supply and to which any other supply forming

part of that composite supply is ancillary;

(91) “proper officer” in relation to any function to be performed under this Act,

means the Commissioner or the officer of the central tax who is assigned that function

by the Commissioner in the Board;

(92) “quarter” shall mean a period comprising three consecutive calendar months,

ending on the last day of March, June, September and December of a calendar year;

(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

person to whom the service is rendered,

and any reference to a person to whom a supply is made shall be construed as a

reference to the recipient of the supply and shall include an agent acting as such on

behalf of the recipient in relation to the goods or services or both supplied;

(94) “registered person” means a person who is registered under section 25 but

does not include a person having a Unique Identity Number;

(95) “regulations” means the regulations made by the Board under this Act on

the recommendations of the Council;

(96) “removal’’ in relation to goods, means—

21 of 1860.

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(a) despatch of the goods for delivery by the supplier thereof or by any

other person acting on behalf of such supplier; or

(b) collection of the goods by the recipient thereof or by any other person

acting on behalf of such recipient;

(97) “return” means any return prescribed or otherwise required to be furnished

by or under this Act or the rules made thereunder;

(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 Goods and Services Tax Act;

(99) “Revisional Authority” means an authority appointed or authorised for

revision of decision or orders as referred to in section 108;

(100) “Schedule” means a Schedule appended to this Act;

(101) “securities” shall have the same meaning as assigned to it in clause (h) of

section 2 of the Securities Contracts (Regulation) Act, 1956;

(102) “services” means anything other than goods, money and securities but

includes activities relating to the use of money or its conversion by cash or by any

other mode, from one form, currency or denomination, to another form, currency or

denomination for which a separate consideration is charged;

(103) “State” includes a Union territory with Legislature;

(104) “State tax” means the tax levied under any State Goods and Services Tax

Act;

(105) “supplier” in relation to any goods or services or both, shall mean the

person supplying the said goods or services or both and shall include an agent

acting as such on behalf of such supplier in relation to the goods or services or both

supplied;

(106) “tax period” means the period for which the return is required to be furnished;

(107) “taxable person” means a person who is registered or liable to be registered

under section 22 or section 24;

(108) “taxable supply” means a supply of goods or services or both which is

leviable to tax under this Act;

(109) “taxable territory” means the territory to which the provisions of this Act

apply;

(110) “telecommunication service” means service of any description (including

electronic mail, voice mail, data services, audio text services, video text services,

radio paging and cellular mobile telephone services) which is made available to

users by means of any transmission or reception of signs, signals, writing,

images and sounds or intelligence of any nature, by wire, radio, visual or other

electromagnetic means;

(111) “the State Goods and Services Tax Act” means the respective State Goods

and Services Tax Act, 2017;

(112) “turnover in State” or “turnover in Union territory” means the aggregate

value of all taxable supplies (excluding the value of inward supplies on which tax is

payable by a person on reverse charge basis) and exempt supplies made within a State

or Union territory by a taxable person, exports of goods or services or both

and 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 territory

42 of 1956.

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tax, integrated tax and cess;

(113) “usual place of residence” means––

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

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

legally constituted;

(114) “Union territory” means the territory of—

(a) the Andaman and Nicobar Islands;

(b) Lakshadweep;

(d) Daman and Diu;

(e) Chandigarh; and

(f) other territory.

Explanation.––For the purposes of this Act, each of the territories specified

in sub-clauses (a) to (f) shall be considered 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;

(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 Union Territory Goods and Services Tax

Act and the Goods and Services Tax (Compensation to States) Act shall have the same

meaning as assigned to them in those Acts;

(121) any reference in this Act to a law which is not in force in the State of Jammu

and Kashmir, shall, in relation to that State be construed as a reference to the

corresponding law, if any, in force in that State.

CHAPTER II

ADMINISTRATION

3. The Government shall, by notification, appoint the following classes of officers for

the purposes of this Act, namely:––

(a) Principal Chief Commissioners of Central Tax or Principal Directors General of

Central Tax,

(b) Chief Commissioners of Central Tax or Directors General of Central Tax,

General of Central Tax,

(d) Commissioners of Central Tax or Additional Directors General of Central Tax,

Officers under

this Act.

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(e) Additional Commissioners of Central Tax or Additional Directors of

Central Tax,

(f) Joint Commissioners of Central Tax or Joint Directors of Central Tax,

(g) Deputy Commissioners of Central Tax or Deputy Directors of Central Tax,

(h) Assistant Commissioners of Central Tax or Assistant Directors of

Central Tax, and

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

Provided that the officers appointed under the Central Excise Act, 1944 shall be deemed

to be the officers appointed under the provisions of this Act.

4. (1) The Board may, in addition to the officers as may be notified by the Government

under section 3, appoint such persons as it may think fit to be the officers under this Act.

(2) Without prejudice to the provisions of sub-section (1), the Board may, by

order, authorise any officer referred to in clauses (a) to (h) of section 3 to appoint officers of

central tax below the rank of Assistant Commissioner of central tax for the administration of

this Act.

5. (1) Subject to such conditions and limitations as the Board may impose, an officer of

central tax may exercise the powers and discharge the duties conferred or imposed on him

under this Act.

(2) An officer of central tax may exercise the powers and discharge the duties conferred

or imposed under this Act on any other officer of central 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 central tax.

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

the State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act

are authorised to be the proper officers for the purposes of this Act, subject to such

conditions as the Government shall, on the recommendations of the Council, by notification,

specify.

(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 State Goods and Services Tax Act or the Union Territory Goods and

Services Tax Act, as authorised by the State Goods and Services Tax Act or the Union

Territory Goods and Services Tax Act, as the case may be, under intimation to the

jurisdictional officer of State tax or Union territory tax;

(b) where a proper officer under the State Goods and Services Tax Act or the

Union Territory Goods and Services Tax Act has initiated any proceedings on a subject

matter, no proceedings shall be initiated by the proper officer under this Act on the

same subject matter.

(3) Any proceedings for rectification, appeal and revision, wherever applicable, of any

order passed by an officer appointed under this Act shall not lie before an officer appointed

under the State Goods and Services Tax Act or the Union Territory Goods and Services Tax

Act.

1 of 1944.

Appointment

of officers.

Powers of

officers.

Authorisation

of officers of

State tax or

Union

territory tax

as proper

officer in

certain

circumstances.

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CHAPTER III

LEVY AND COLLECTION OF TAX

7. (1) For the purposes of this Act, the expression “supply” includes––

(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;

consideration; and

(d) the activities to be treated as supply of goods or supply of services as

referred to in Schedule II.

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

(a) activities or transactions specified in Schedule III; or

(b) such activities or transactions undertaken by the Central Government, a

State Government or any local authority in which they are engaged as public

authorities, as may be notified by the Government on the recommendations of the

Council,

shall be treated neither as a supply of goods nor a supply of services.

(3) Subject to the provisions of sub-sections (1) and (2), the Government may, on the

recommendations of the Council, specify, by notification, the transactions that are to be

treated as—

(a) a supply of goods and not as a supply of services; or

(b) a supply of services and not as a supply of goods.

8. The tax liability on a composite or a mixed supply shall be determined in the following

manner, namely:—

(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 the

central goods and services tax on all intra-State supplies of goods or services or both, except

on the supply of alcoholic liquor for human consumption, on the value determined under

section 15 and at such rates, not exceeding twenty per cent., as may be notified by the

Government on the recommendations of the Council and collected in such manner as may be

prescribed and shall be paid by the taxable person.

(2) The central tax on the supply of petroleum crude, high speed diesel, motor spirit

(commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect

from such date as may be notified by the Government on the recommendations of the

Council.

(3) The Government may, on the recommendations of the Council, by notification,

specify categories of supply of goods or services or both, the tax on which shall be paid on

reverse charge basis by the recipient of such goods or services or both and all the provisions

of this Act shall apply to such recipient as if he is the person liable for paying the tax in

relation to the supply of such goods or services or both.

Scope of

supply.

Tax liability

on composite

and mixed

supplies.

Levy and

collection.

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(4) The central tax in respect of the supply of taxable goods or services or both by a

supplier, who is not registered, to a registered person shall be paid by such person on

reverse charge basis as the recipient and all the provisions of this Act shall apply to such

recipient as if he is the person liable for paying the tax in relation to the supply of such goods

or services or both.

(5) The Government may, on the recommendations of the Council, by notification,

specify categories of services the tax on intra-State supplies of which shall be paid by the

electronic commerce operator if such services are supplied through it, and all the provisions

of this Act shall apply to such electronic commerce operator as if he is the supplier liable for

paying the tax in relation to the supply of such services:

Provided that where an electronic commerce operator does not have a physical presence

in the taxable territory, any person representing such electronic commerce operator for any

purpose in the taxable territory shall be liable to pay tax:

Provided further that where an electronic commerce operator does not have a physical

presence in the taxable territory and also he does not have a representative in the said

territory, such electronic commerce operator shall appoint a person in the taxable territory for

the purpose of paying tax and such person shall be liable to pay tax.

10. (1) Notwithstanding anything to the contrary contained in this Act but subject to

the provisions of sub-sections (3) and (4) of section 9, a registered person, whose aggregate

turnover in the preceding financial year did not exceed fifty lakh rupees, may opt to pay, in

lieu of the tax payable by him, an amount calculated at such rate as may be prescribed, but

not exceeding,––

(a) one per cent. of the turnover in State or turnover in Union territory in case of

a manufacturer,

(b) two and a half per cent. of the turnover in State or turnover in Union territory

in case of persons engaged in making supplies referred to in clause (b) of paragraph 6

of Schedule II, and

other suppliers,

subject to such conditions and restrictions as may be prescribed:

Provided that the Government may, by notification, increase the said limit of fifty lakh

rupees to such higher amount, not exceeding one crore rupees, as may be recommended by

the Council.

(2) The registered person shall be eligible to opt under sub-section (1), if:—

(a) he is not engaged in the supply of services other than supplies referred to in

clause (b) of paragraph 6 of Schedule II;

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

under this Act;

(d) he is not engaged in making any supply of goods through an electronic

commerce operator who is required to collect tax at source under section 52; and

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

on the recommendations of the Council:

Provided that where more than one registered persons are having the same Permanent

Account Number (issued under the Income-tax Act, 1961), the registered person shall not be

eligible to opt for the scheme under sub-section (1) unless all such registered persons opt to

pay tax under that sub-section.

Composition

levy.

43 of 1961.

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(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.

11. (1) Where the Government is satisfied that it is necessary in the public interest so

to do, it may, on the recommendations of the Council, by notification, exempt generally, either

absolutely or subject to such conditions as may be specified therein, goods or services or

both of any specified description from the whole or any part of the tax leviable thereon with

effect from such date as may be specified in such notification.

(2) Where the Government is satisfied that it is necessary in the public interest so to

do, it may, on the recommendations of the Council, by special order in each case, under

circumstances of an exceptional nature to be stated in such order, exempt from payment of tax

any goods or services or both on which tax is leviable.

(3) The Government may, if it considers necessary or expedient so to do for the

purpose of clarifying the scope or applicability of any notification issued under

sub-section (1) or order issued under sub-section (2), insert an explanation in such

notification or order, as the case may be, by notification at any time within one year of

issue of the notification under sub-section (1) or order under sub-section (2), and every

such explanation shall have effect as if it had always been the part of the first such

notification or order, as the case may be.

Explanation.––For the purposes of this section, where an exemption in respect of

any goods or services or both from the whole or part of the tax leviable thereon has been

granted absolutely, the registered person supplying such goods or services or both shall

not collect the tax, in excess of the effective rate, on such supply of goods or services or

both.

CHAPTER IV

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:—

(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 which the supplier receives the payment with respect to the

supply:

Provided that where the supplier of taxable goods receives an amount up to one

thousand rupees in excess of the amount indicated in the tax invoice, the time of

supply to the extent of such excess amount shall, at the option of the said supplier, be

the date of issue of invoice in respect of such excess amount.

Power to

grant

exemption

from tax.

Time of

supply of

goods.

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Explanation 1.––For the purposes of clauses (a) and (b), “supply” shall be

deemed to have been made to the extent it is covered by the invoice or, as the case may

be, the payment.

Explanation 2.––For the purposes of clause (b), “the date on which the supplier

receives the payment” shall be the date on which the payment is entered in his books

of account or the date on which the payment is credited to his bank account, whichever

is earlier.

(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse

charge basis, the time of supply shall be the earliest of the following dates, namely:—

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

(b) the date of payment as 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

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 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, be the date on which the tax is paid.

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

way of interest, late fee or penalty for delayed payment of any consideration shall be the date

on which the supplier receives such addition in value.

13. (1) The liability to pay tax on services shall arise at the time of supply, as determined

in accordance with the provisions of this section.

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

(a) the date of issue of invoice by the supplier, if the invoice is issued within the

period prescribed under sub-section (2) of section 31 or the date of receipt of payment,

whichever is earlier; or

(b) the date of provision of service, if the invoice is not issued within the period

prescribed under sub-section (2) of section 31 or the date of receipt of payment,

whichever is earlier; or

account, in a case where the provisions of clause (a) or clause (b) do not apply:

Provided that where the supplier of taxable service receives an amount up to one

thousand rupees in excess of the amount indicated in the tax invoice, the time of

supply to the extent of such excess amount shall, at the option of the said supplier, be

the date of issue of invoice relating to such excess amount.

Explanation.––For the purposes of clauses (a) and (b)––

Time of supply

of services.

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(i) the supply shall be deemed to have been made to the extent it is covered

by the invoice or, as the case may be, the payment;

(ii) “the date of receipt of payment” shall be the date on which the payment

is entered in the books of account of the supplier or the date on which the

payment is credited to his bank account, whichever is earlier.

(3) In case of supplies in respect of which tax is paid or liable to be paid on reverse

charge basis, the time of supply shall be the earlier of the following dates, namely:––

(a) the date of payment as entered in the books of account of the recipient or the

date on which the payment is debited in his bank account, whichever is earlier; or

(b) the date immediately following sixty days from the date of issue of invoice or

any other document, by whatever name called, in lieu thereof by the supplier:

Provided that where it is not possible to determine the time of supply under

clause (a) or clause (b), the time of supply shall be the date of entry in the books of

account of the recipient of supply:

Provided further that in case of supply by associated enterprises, where the

supplier of service is located outside India, the time of supply shall be the date of entry

in the books of account of the recipient of supply or the date of payment, whichever is

earlier.

(4) In case of supply of vouchers by a supplier, the time of supply shall be––

(a) the date of issue of voucher, if the supply is identifiable at that point; or

(b) the date of redemption of voucher, in all other cases.

(5) Where it is not possible to determine the time of supply 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, be the date on which the tax is paid.

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

way of interest, late fee or penalty for delayed payment of any consideration shall be the date

on which the supplier receives such addition in value.

14. Notwithstanding anything contained in section 12 or section 13, the time of supply,

where there is a change in the rate of tax in respect of goods or services or both, shall be

determined in the following manner, namely:––

(a) in case the goods or services or both have been supplied before the change

in rate of tax,––

(i) where the invoice for the same has been issued and the payment is also

received after the change in rate of tax, the time of supply shall be the date of

receipt of payment or the date of issue of invoice, whichever is earlier; or

(ii) where the invoice has been issued prior to the change in rate of tax but

payment is received after the change in rate of tax, the time of supply shall be the

date of issue of invoice; or

(iii) where the payment has been received before the change in rate of tax,

but the invoice for the same is issued after the change in rate of tax, the time of

supply shall be the date of receipt of payment;

(b) in case the goods or services or both have been supplied after the change in

rate of tax,––

Change in

rate of tax in

respect of

supply of

goods or

services.

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(i) where the payment is received after the change in rate of tax but the

invoice has been issued prior to the change in rate of tax, the time of supply shall

be the date of receipt of payment; or

(ii) where the invoice has been issued and payment is received before the

change in rate of tax, the time of supply shall be the date of receipt of payment or

date of issue of invoice, whichever is earlier; or

(iii) where the invoice has been issued after the change in rate of tax but

the payment is received before the change in rate of tax, the time of supply shall

be the date of issue of invoice:

Provided that the date of receipt of payment shall be the date of credit in

the bank account if such credit in the bank account is after four working days

from the date of change in the rate of tax.

Explanation.––For the purposes of this section, “the date of receipt of

payment” shall be the date on which the payment is entered in the books of

account of the supplier or the date on which the payment is credited to his bank

account, whichever is earlier.

15. (1) The value of a supply of goods or services or both shall be the transaction

value, which is the price actually paid or payable for the said supply of goods or services or

both where the supplier and the recipient of the supply are not related and the price is the

sole consideration for the supply.

(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 State Goods and Services Tax Act, the Union

Territory 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;

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 for delayed payment of any consideration for

any supply; 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—

(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.

Value of

taxable

supply.

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(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-section (4), the

value of such supplies as may be notified by the Government on the recommendations of the

Council shall be determined in such manner as may be prescribed.

Explanation.—For the purposes of this Act,––

(a) persons shall be deemed to be “related persons” if––

(i) such persons 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 controls the other;

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

(vii) together they directly or indirectly control a third person; or

(viii) they are members of the same family;

(b) the term “person” also includes legal persons;

sole agent or sole distributor or sole concessionaire, howsoever described, of the

other, shall be deemed to be related.

CHAPTER V

INPUT TAX CREDIT

16. (1) Every registered person shall, subject to such conditions and restrictions as

may be prescribed and in the manner specified in section 49, be entitled to take credit of input

tax charged on any supply of goods or services or both to him which are used or intended to

be used in the course or furtherance of his business and the said amount shall be credited to

the electronic credit ledger of such person.

(2) Notwithstanding anything contained in this section, no registered person shall be

entitled to the credit of any input tax in respect of any supply of goods or services or both to

him unless,––

(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;

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:

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

Eligibility and

conditions for

taking

input

tax credit.

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period of one hundred and eighty days from the date of issue of invoice by the

supplier, an amount equal to the input tax credit availed by the recipient shall be added

to his output tax liability, along with interest thereon, in such manner as may be

prescribed:

Provided also that the recipient shall be entitled to avail of the credit of input tax

on payment made by him of the amount towards the value of supply of goods or

services or both along with tax payable thereon.

(3) Where the registered person has claimed depreciation on the tax component of the

cost of capital goods and plant and machinery under the provisions of the Income-tax

Act, 1961, the input tax credit on the said tax component shall not be allowed.

(4) A registered person shall not be entitled to take input tax credit in respect of any

invoice or debit note for supply of goods or services or both after 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

for the purpose of any business and partly for other purposes, the amount of credit shall be

restricted to so much of the input tax as is attributable to the purposes of his business.

(2) Where the goods or services or both are used by the registered person partly for

effecting taxable supplies including zero-rated supplies under this Act or under the Integrated

Goods and Services Tax Act and partly for effecting exempt supplies under the said Acts, the

amount of credit shall be restricted to so much of the input tax as is attributable to the said

taxable supplies including zero-rated supplies.

(3) The value of exempt supply under sub-section (2) shall be such as may be prescribed,

and shall include supplies on which the recipient is liable to pay tax on reverse charge basis,

transactions in securities, sale of land and, subject to clause (b) of paragraph 5 of Schedule

II, sale of building.

(4) A banking company or a financial institution including a non-banking financial

company, engaged in supplying services by way of accepting deposits, extending loans or

advances shall have the option to either comply with the provisions of sub-section (2), or

avail of, every month, an amount equal to fifty per cent. of the eligible input tax credit on

inputs, capital goods and input services in that month and the rest shall lapse:

Provided that the option once exercised shall not be withdrawn during the remaining

part of the financial year:

Provided further that the restriction of fifty per cent. shall not apply to the tax paid on

supplies made by one registered person to another registered person having the same

Permanent Account Number.

(5) Notwithstanding anything contained in 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) motor vehicles and other conveyances except when they are used––

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

(A) further supply of such vehicles or conveyances ; or

(B) transportation of passengers; or

or conveyances;

(ii) for transportation of goods;

43 of 1961.

Apportionment

of credit and

blocked

credits.

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(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 category of goods or services or both or as part of a

taxable composite or mixed supply; and

(iv) travel benefits extended to employees on vacation such as leave or

home travel concession;

property (other than plant and machinery) except where it is an input service for further

supply of works contract service;

(d) goods or services or both received by a taxable person for construction of an

immovable property (other than plant or machinery) on his own account including

when such goods or services or both are used in the course or furtherance of business.

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

“construction” includes re-construction, renovation, additions or alterations or repairs,

to the extent of capitalisation, to the said immovable property;

(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 sections 74, 129 and 130.

(6) The Government may prescribe the manner in which the credit referred to in

sub-sections (1) and (2) may be attributed.

Explanation.––For the purposes of this Chapter and Chapter VI, the expression “plant

and machinery” means apparatus, equipment, and machinery fixed to earth by foundation or

structural support that are used for making outward supply of goods or services or both and

includes such foundation and structural supports but excludes—

(i) land, building or any other civil structures;

(ii) telecommunication towers; and

(iii) pipelines laid outside the factory premises.

18. (1) Subject to such conditions and restrictions as may be prescribed—

(a) a person who has applied for registration under this Act within thirty days

from the date on which he becomes liable to registration and has been granted such

Availability of

credit in

special

circumstances.

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registration shall be entitled to take credit of input tax in respect of inputs held in stock

and inputs contained in semi-finished or finished goods held in stock on the day

immediately preceding the date from which he becomes liable to pay tax under the

provisions of this Act;

(b) a person who takes registration under 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;

entitled to take credit of input tax in respect of inputs held in stock, inputs contained in

semi-finished or finished goods held in stock and on capital goods on the day immediately

preceding the date from which he becomes liable to pay tax under section 9:

Provided that the credit on capital goods shall be reduced by such percentage

points as may be prescribed;

(d) where an exempt supply of goods or services or both by a registered person

becomes a taxable supply, such person shall be entitled to take credit of input tax in

respect of inputs held in stock and inputs contained in semi-finished or finished goods

held in stock relatable to such exempt supply and on capital goods exclusively used

for such exempt supply on the day immediately preceding the date from which such

supply becomes taxable:

Provided that the credit on capital goods shall be reduced by such percentage

points as may be prescribed.

(2) A registered person shall not be entitled to take input tax credit under

sub-section (1) in respect of any supply of goods or services or both to him after the expiry

of one year from the date of issue of tax invoice relating to such supply.

(3) Where there is a change in the constitution of a registered person on account of

sale, merger, demerger, amalgamation, lease or transfer of the business with the specific

provisions for transfer of liabilities, the said registered person shall be allowed to transfer the

input tax credit which remains unutilised in his electronic credit ledger to such sold, merged,

demerged, amalgamated, leased or transferred business in such manner as may be prescribed.

(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 may be, the date of such exemption:

Provided that after payment of such amount, the balance of input tax credit, if any,

lying in his electronic credit ledger shall lapse.

(5) The amount of credit under sub-section (1) and the amount payable under

sub-section (4) shall be calculated in such manner as may be prescribed.

(6) In case of supply of capital goods or plant and machinery, on which input tax credit

has been taken, the registered person shall pay an amount equal to the input tax credit taken

on the said capital goods or plant and machinery reduced by such percentage points as may

be prescribed or the tax on the transaction value of such capital goods or plant and machinery

determined under 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.

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19. (1) The principal shall, subject to such conditions and restrictions as may be

prescribed, be allowed input tax credit on inputs sent to a job worker for job work.

(2) Notwithstanding anything contained in clause (b) of sub-section (2) of section 16,

the principal shall be entitled to take credit of input tax on inputs even if the inputs are

directly sent to a job worker for job work without being first brought to his place of business.

(3) Where the inputs sent for job work are not received back by the principal after

completion of job work or otherwise or are not supplied from the place of business of the job

worker in accordance with clause (a) or clause (b) of sub-section (1) of section 143 within

one year of being sent out, it shall be deemed that such inputs had been supplied by the

principal to the job worker on the day when the said inputs were sent out:

Provided that where the inputs are sent directly to a job worker, the period of one year

shall be counted from the date of receipt of inputs by the job worker.

(4) The principal shall, subject to such conditions and restrictions as may be prescribed,

be allowed input tax credit on capital goods sent to a job worker for job work.

(5) Notwithstanding anything contained in clause (b) of sub-section (2) of section 16,

the principal shall be entitled to take credit of input tax on capital goods even if the capital

goods are directly sent to a job worker for job work without being first brought to his place

of business.

(6) Where the capital goods sent for job work are not received back by the principal

within a period of three years of being sent out, it shall be deemed that such capital goods

had been supplied by the principal to the job worker on the day when the said capital goods

were sent out:

Provided that where the capital goods are sent directly to a job worker, the period of

three years shall be counted from the date of receipt of capital goods by the job worker.

(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.

20. (1) The Input Service Distributor shall distribute the credit of central tax as central

tax or integrated tax and integrated tax as integrated tax or central tax, by way of issue of a

document containing the amount of input tax credit being distributed in such manner as may

be prescribed.

(2) The Input Service Distributor may distribute the credit subject to the following

conditions, namely:––

(a) the credit can be distributed to the recipients of credit against a document

containing such details as may be prescribed;

(b) the amount of the credit distributed shall not exceed the amount of credit

available for distribution;

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;

Taking input

tax credit in

respect of

inputs and

capital goods

sent for job

work.

Manner of

distribution of

credit by

Input Service

Distributor.

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(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.

Explanation.––For the purposes of this section,––

(a) the “relevant period” shall be––

(i) if the recipients of credit have turnover in their States or Union

territories in the financial year preceding the year during which credit is to

be distributed, the said financial year; or

(ii) if some or all recipients of the credit do not have any turnover in

their States or Union territories in the financial year preceding the year

during which the credit is to be distributed, the last quarter for which

details of such turnover of all the recipients are available, previous to the

month during which credit is to be distributed;

(b) the expression “recipient of credit” means the supplier of goods or

services or both having the same Permanent Account Number as that of the

Input Service Distributor;

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 I of the Seventh Schedule to the Constitution and entries 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 resulting in excess distribution of credit to

one or more recipients of credit, the excess credit so distributed shall be recovered

from such recipients along with interest, and the provisions of section 73 or section 74,

as the case may be, shall, mutatis mutandis, apply for determination of amount to be

recovered.

CHAPTER VI

REGISTRATION

22. (1) Every supplier shall be liable to be registered under this Act in the State or

Union territory, other than special category States, from where he makes a taxable supply of

goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh

rupees:

Provided that where such person makes taxable supplies of goods or services or both

from any of the special category States, he shall be liable to be registered if his aggregate

turnover in a financial year exceeds ten lakh rupees.

(2) Every person who, on the day immediately preceding the appointed day, is registered

or holds a licence 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-sections (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

Persons liable

for

registration.

Manner of

recovery of

credit

distributed in

excess.

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or otherwise, the transferee shall be liable to be registered, with effect from the date on which

the Registrar of Companies issues a certificate of incorporation giving effect to such order of

the High Court or Tribunal.

Explanation.––For the purposes of this section,––

(i) the expression “aggregate turnover” shall include all supplies made by the

taxable person, whether on his own account or made on behalf of all his principals;

(ii) the supply of goods, after completion of job work, by a registered job worker

shall be treated as the supply of goods by the principal referred to in section 143, and

the value of such goods shall not be included in the aggregate turnover of the registered

job worker;

(iii) the expression “special category States” shall mean the States as specified

in sub-clause (g) of clause (4) of article 279A of the Constitution.

23. (1) The following persons shall not be liable to registration, namely:––

(a) any person engaged exclusively in the business of supplying goods or

services or both that are not liable to tax or wholly exempt from tax under this Act or

under the Integrated Goods and Services Tax Act;

(b) an agriculturist, to the extent of supply of produce out of cultivation of land.

(2) The Government may, on the recommendations of the Council, by notification,

specify the category of persons who may be exempted from obtaining registration under this

Act.

24. Notwithstanding anything contained in sub-section (1) of section 22, the following

categories of persons shall be required to be registered under this Act,––

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

(ii) casual taxable 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 persons whether as an agent or otherwise;

(viii) Input Service Distributor, whether or not separately registered under this

Act;

(ix) persons who supply goods or services or both, other than supplies specified

under sub-section (5) of section 9, through such electronic commerce operator who is

required to collect tax at source under section 52;

(x) every electronic commerce operator;

(xi) every person supplying online information and database access or retrieval

services from a place outside India to a person in India, other than a registered

person; and

(xii) such other person or class of persons as may be notified by the Government

on the recommendations of the Council.

25. (1) Every person who is liable to be registered under section 22 or section 24 shall

apply for registration in every such State or Union territory in which he is so liable within

Persons not

liable for

registration.

Compulsory

registration in

certain cases.

Procedure for

registration.

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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 the territorial waters of India

shall obtain registration in the coastal State or Union territory where the nearest point of the

appropriate baseline is located.

(2) A person seeking registration under this Act shall be granted a single registration

in a State or Union territory:

Provided that a person having multiple business verticals in a State or Union territory

may be granted a separate registration for each business vertical, subject to such conditions

as may be prescribed.

(3) A person, though not liable to be registered under section 22 or section 24 may get

himself registered voluntarily, and all provisions of this Act, as are applicable to a registered

person, shall apply to such person.

(4) A person who has obtained or is required to obtain more than one registration,

whether in one State or Union territory or more than one State or Union territory shall, in

respect of each such registration, be treated as distinct persons for the purposes of this

Act.

(5) Where a person who has obtained or is required to obtain registration in a State or

Union territory in respect of an establishment, has an establishment in another State or

Union territory, then such establishments shall be treated as establishments of distinct

persons for the purposes of this Act.

(6) Every person shall have a Permanent Account Number issued under the Income-

tax Act, 1961 in order to be eligible for grant of registration:

Provided that a person required to deduct tax under section 51 may have, in lieu of a

Permanent Account Number, a Tax Deduction and Collection Account Number issued under

the said Act in order to be eligible for grant of registration.

(7) Notwithstanding anything contained in 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.

(8) Where a person who is liable to be registered under this Act fails to obtain

registration, the proper officer may, without prejudice to any action which may be taken

under this Act or under any other law for the time being in force, proceed to register such

person in such manner as may be prescribed.

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

(a) any specialised agency of the United Nations 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.

(10) The registration or the Unique Identity Number shall be granted or rejected after

due verification in such manner and within such period as may be prescribed.

43 of 1961.

46 of 1947.

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(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 have been granted

after the expiry of the period prescribed under sub-section (10), if no deficiency has been

communicated to the applicant within that period.

26. (1) The grant of registration or the Unique Identity Number under the State Goods

and Services Tax Act or the Union Territory Goods and Services Tax Act shall be deemed to

be a grant of registration or the Unique Identity Number under this Act subject to the

condition that the application for registration or the Unique Identity Number has not been

rejected 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 State Goods and

Services Tax Act or the Union Territory Goods and Services Tax Act shall be deemed to be a

rejection of application for registration under this Act.

27. (1) The certificate of registration issued to a casual taxable person or a non-

resident taxable person shall be valid for 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:

Provided that the proper officer may, on sufficient cause being shown by the said

taxable person, extend the said period of ninety days by a further period not exceeding

ninety days.

(2) A casual taxable person or a non-resident taxable person shall, at the time of

submission of application for registration under sub-section (1) of section 25, make an

advance deposit of tax in an amount equivalent to the estimated tax liability of such person

for the period for which the registration is sought:

Provided that where any extension of time is sought under sub-section (1), such

taxable person shall deposit an additional amount of tax equivalent to the estimated tax

liability of such person for the period for which the extension is sought.

(3) The amount deposited under sub-section (2) shall be credited to the electronic

cash ledger of such person and shall be utilised in the manner provided under

section 49.

28. (1) Every registered person and a person to whom a Unique Identity Number has

been assigned shall inform the proper officer of any changes in the information furnished at

the time of registration or subsequent thereto, in such form and manner and within such

period as may be prescribed.

(2) The proper officer may, on the basis of information furnished under sub-section (1)

or as ascertained by him, approve or reject amendments in the registration particulars in such

manner and within such period as may be prescribed:

Provided that approval of the proper officer shall not be required in respect of amendment

of such particulars as may be prescribed:

Provided further that the proper officer shall not reject the application for amendment

in the registration particulars without giving the person an opportunity of being heard.

(3) Any rejection or approval of amendments under the State Goods and Services Tax

Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be deemed

to be a rejection or approval under this Act.

29. (1) The proper officer may, either on his own motion or on an application filed by

the registered person or by his legal heirs, in case of death of such person, cancel the

Deemed

registration.

Special

provisions

relating to

casual taxable

person and

non-resident

taxable

person.

Amendment

registration.

Cancellation

registration.

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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

(b) there is any change in the constitution of the business; or

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

furnished returns for a continuous period of six months; or

(d) any person who has taken voluntary registration under sub-section (3) of

section 25 has not commenced business within six months from the date of

registration; or

(e) registration has been obtained by means of fraud, wilful misstatement or

suppression of facts:

Provided that the proper officer shall not cancel the registration without giving

the person an opportunity of being heard.

(3) The cancellation of registration under this section shall not affect the liability of the

person to pay tax and other dues under this Act or to discharge any obligation under this Act

or the rules made thereunder for any period prior to the date of cancellation whether or not

such tax and other dues are determined before or after the date of cancellation.

(4) The cancellation of registration under the State Goods and Services Tax Act or the

Union Territory Goods and Services Tax Act, as the case may be, shall be deemed to be a

cancellation of registration under this 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 held in stock and inputs contained in semi-finished or

finished goods held in stock or capital goods or plant and machinery on the day immediately

preceding the date of such cancellation or the output tax payable on such goods, whichever

is higher, calculated in such manner as may be prescribed:

Provided that in case of capital goods or plant and machinery, the taxable person shall

pay an amount equal to the input tax credit taken on the said capital goods or plant and

machinery, reduced by such percentage points as may be prescribed or the tax on the

transaction value of such capital goods or plant and machinery under section 15, whichever

is higher.

(6) The amount payable under sub-section (5) shall be calculated in such manner as

may be prescribed.

30. (1) Subject to such conditions as may be prescribed, any registered person, whose

registration is cancelled by the proper officer on his own motion, may apply to such officer

for revocation of cancellation of the registration in the prescribed manner within thirty days

from the date of service of the cancellation order.

Revocation

cancellation

registration.

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(2) The proper officer may, in such manner and within such period as may be prescribed,

by order, either revoke cancellation of the registration or reject the application:

Provided that the application for revocation of cancellation of registration shall not be

rejected unless the applicant has been given an opportunity of being heard.

(3) The revocation of cancellation of registration under the State Goods and Services

Tax Act or the Union Territory Goods and Services Tax Act, as the case may be, shall be

deemed to be a revocation of cancellation of registration under this Act.

CHAPTER VII

TAX INVOICE, CREDIT AND DEBIT NOTES

31. (1) A registered person supplying taxable goods shall, before or at the time of,—

(a) removal of goods for supply to the recipient, where the supply involves

movement of goods; or

(b) delivery of goods or making available thereof to the recipient, in any other

case,

issue a tax invoice showing the description, quantity and value of goods, the tax charged

thereon and such other particulars as may be prescribed:

Provided that the Government may, on the recommendations of the Council, by

notification, specify the categories of goods or supplies in respect of which a tax invoice

shall be issued, within such time and in such manner as may be prescribed.

(2) A registered person supplying taxable services shall, before or after the provision

of service but within a 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 to be a

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, issue 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;

(b) a registered person may not issue a tax invoice if the value of the goods or

services or both supplied is less than two hundred rupees subject to such conditions

and in such manner as may be prescribed;

tax under the provisions of section 10 shall issue, instead of a tax invoice, a bill of

supply containing such particulars and in such manner as may be prescribed:

Provided that the registered person may not issue a bill of supply if the value of

the goods or services or both supplied is less than two hundred rupees subject to

such conditions and in such manner as may be prescribed;

(d) a registered person shall, on receipt of advance payment with respect to any

supply of goods or services or both, issue a receipt voucher or any other document,

containing such particulars as may be prescribed, evidencing receipt of such payment;

Tax invoice.

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(e) where, on receipt of advance payment with respect to any supply of goods or

services or both the registered person issues a receipt voucher, but subsequently no

supply is made and no tax invoice is issued in pursuance thereof, the said registered

person may issue to the person who had made the payment, a refund voucher against

such payment;

(f) a registered person who is liable to pay tax under sub-section (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.

(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;

be issued on or before the date of completion of that event.

(6) In a case where the supply of services ceases under a contract before the completion

of the supply, the invoice shall be issued at the time when the supply ceases and such

invoice shall be issued to the extent of the supply 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 in respect of any

supply of goods or services or both any amount by way of tax under this Act.

(2) No registered person shall collect tax except in accordance with the provisions of

this Act or the rules made thereunder.

33. Notwithstanding anything contained in this Act or any other law for the time being

in force, where any supply is made for a consideration, every person who is liable to pay tax

for such supply shall prominently indicate in all documents relating to assessment, tax

invoice and other like documents, the amount of tax which shall form part of the price at

which such supply is made.

34. (1) Where a tax invoice has been issued for supply of any goods or services or

both and the taxable value or tax charged in that tax invoice is found to exceed the taxable

value or tax payable in respect of such supply, or where the goods supplied are returned by

the recipient, or where goods or services or both supplied are found to be deficient, the

registered person, who has supplied such goods or services or both, may issue to the

recipient a credit note containing such particulars as may be prescribed.

Prohibition of

unauthorised

collection of

tax.

Amount of

tax to be

indicated in

tax invoice

and other

documents.

Credit and debit

notes.

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(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 may be prescribed.

(4) Any registered person who issues a debit note in relation to a supply of goods or

services or both shall declare the details of such debit note in the return for the month during

which such debit note has been issued and the tax liability shall be adjusted in such manner

as may be prescribed.

Explanation.––For the purposes of this Act, the expression “debit note” shall include

a supplementary invoice.

CHAPTER VIII

ACCOUNTS AND RECORDS

35. (1) Every registered person shall keep and maintain, at his principal place of business,

as mentioned in the certificate of registration, a true and correct account of—

(a) production or manufacture of goods;

(b) inward and outward supply of goods or services or both;

(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 place used for

storage of goods and every transporter, irrespective of whether he is a registered person or

not, shall maintain records of the consigner, consignee and other relevant details of 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 such purpose as may be specified therein.

(4) Where the Commissioner considers that any class of taxable person is not in a

position to keep and maintain accounts in accordance with the provisions of this section, he

may, for reasons to be recorded in writing, permit such class of taxable persons to maintain

accounts in such manner as may be prescribed.

(5) Every registered person whose turnover during a financial year exceeds the

prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant

Accounts and

other records.

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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 for the 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 books of account or other

records in accordance with the provisions of sub-section (1) of section 35 shall retain 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 for

the period specified above, whichever is later.

CHAPTER IX

RETURNS

37. (1) Every registered person, other than an Input Service Distributor, a non-resident

taxable person and a person paying tax under the provisions of section 10 or section 51 or

section 52, shall furnish, electronically, in such form and manner as may be prescribed, the

details of outward supplies of goods or services or both effected during a tax period on or

before the tenth day of the month succeeding the said tax period and such details shall be

communicated to the recipient of the said supplies within such time and in such manner as

may be prescribed:

Provided that the registered person shall not be allowed to furnish the details of

outward supplies during the period from the eleventh day to the fifteenth day of the month

succeeding the tax period:

Provided further that the Commissioner may, for reasons to be recorded in writing, by

notification, extend the time limit for furnishing such details for such class of taxable persons

as may be specified therein:

Provided also that any extension of time limit notified by the Commissioner of State

tax or Commissioner of Union territory tax shall be deemed to be notified by the

Commissioner.

(2) Every registered person who has been communicated the details under

sub-section (3) of section 38 or the details pertaining to inward supplies of Input Service

Distributor under 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 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

Period of

retention of

accounts.

Furnishing

details of

outward

supplies.

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short payment of tax on account of such error or omission, in the return to be furnished for

such tax period:

Provided that no rectification of error or omission in respect of the details furnished

under sub-section (1) shall be allowed after furnishing of the return under section 39 for the

month of September following the end of the financial year to which such details pertain, or

furnishing of the relevant annual return, whichever is earlier.

Explanation.––For the purposes of this Chapter, the expression “details of outward

supplies” shall include details of invoices, debit notes, credit notes and revised invoices

issued in relation to outward supplies made during any tax period.

38. (1) Every registered person, other than an Input Service Distributor or a

non-resident taxable person or a person paying tax under the provisions of section 10 or

section 51 or section 52, shall verify, validate, modify or delete, if required, the details

relating to outward supplies and credit or debit notes communicated under sub-section (1)

of section 37 to prepare the details of his inward supplies and credit or debit notes and may

include therein, the details of inward supplies and credit or debit notes received by him in

respect of such supplies that have not been declared by the supplier under sub-section (1)

of section 37.

(2) Every registered person, other than an Input Service Distributor or a non-resident

taxable person or a person paying tax under the provisions of section 10 or section 51 or

section 52, shall furnish, electronically, the details of inward supplies of taxable goods or

services or both, including inward supplies of goods or services or both on which the tax is

payable on reverse charge basis under this Act and inward supplies of goods or services or

both taxable under the Integrated Goods and Services Tax Act or on which integrated goods

and services tax is payable under section 3 of the Customs Tariff Act, 1975, and credit or debit

notes received in respect of such supplies during a tax period after the tenth day but on or

before the fifteenth day of the month succeeding the tax period in such form and manner as

may be prescribed:

Provided that the Commissioner may, for reasons to be recorded in writing, by

notification, extend the time limit for furnishing such details for such class of taxable persons

as may be specified therein:

Provided further that any extension of time limit notified by the Commissioner of State

tax or Commissioner of Union territory 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 noticed in such manner as may be prescribed, and

shall pay the tax and interest, if any, in case there is a short payment of tax on account of such

error or omission, in the return to be furnished for such tax period:

Provided that no rectification of error or omission in respect of the details furnished

under sub-section (2) shall be allowed after furnishing of the return under section 39 for the

month of September following the end of the financial year to which such details pertain, or

furnishing of the relevant annual return, whichever is earlier.

Furnishing

details of

inward

supplies.

51 of 1975.

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39. (1) Every registered person, other than an Input Service Distributor or a

non-resident taxable person or a person paying tax under the provisions of section 10 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 or Union territory, inward supplies of goods or services

or both, tax payable and tax paid within eighteen days after the end of such quarter.

(3) Every registered person required to deduct tax at source under the provisions of

section 51 shall furnish, in such form and manner as may be prescribed, a return, electronically,

for the month in which such deductions have been made within ten days after the end of

such month.

(4) Every taxable person registered as an Input Service Distributor shall, for every

calendar month or part thereof, furnish, in such form and manner as may be prescribed, a

return, electronically, within thirteen days after the end of such month.

(5) Every registered non-resident taxable person shall, for every calendar month or

part thereof, furnish, in such form and manner as may be prescribed, a return, electronically,

within twenty days after the end of a calendar month or within seven days after the last day

of the period of registration specified under sub-section (1) of section 27, whichever is

earlier.

(6) The Commissioner may, for reasons to be recorded in writing, by notification,

extend the time limit for furnishing the returns under this section for such class of registered

persons as may be specified therein:

Provided that any extension of time limit notified by the Commissioner of State tax or

Union territory 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 sections 37 and 38, if any registered person

after furnishing a return under sub-section (1) or sub-section (2) or 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 particulars in the return to be furnished for the

month or quarter during which such omission or incorrect particulars are noticed, subject to

payment of interest under this Act:

Provided that no such rectification of any omission or incorrect particulars shall be

allowed after the due date for furnishing of return for the month of September or second

quarter following the end of the financial year, or the actual date of furnishing of relevant

annual return, whichever is earlier.

(10) A registered person shall not be allowed to furnish a return for a tax period if the

return for any of the previous tax periods has not been furnished by him.

Furnishing of

returns.

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40. Every registered person who has made outward supplies in the period between

the date on which he became liable to registration till the date on which registration has

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

registration.

41. (1) Every registered person shall, subject to such conditions and restrictions as

may be prescribed, be entitled to take the credit of eligible input tax, as self-assessed, in his

return and such amount shall be credited on a provisional basis to his electronic credit

ledger.

(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 registered person (hereafter

in this section referred to as the “recipient”) for a tax period shall, in such manner and within

such time as may be prescribed, be matched––

(a) with the corresponding details of outward supply furnished by the

corresponding registered person (hereafter in this section referred to as the “supplier”)

in his valid return for the same tax period or any preceding tax period;

(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

(2) The claim of input tax credit in respect of invoices or debit notes relating to inward

supply that match with the details of corresponding outward supply or with the integrated

goods and services tax paid under section 3 of the Customs Tariff Act, 1975 in respect of

goods imported by him shall be finally accepted and such acceptance shall be communicated,

in such manner as may be prescribed, to the recipient.

(3) Where the input tax credit claimed by a recipient in respect of an inward supply is

in excess of the tax declared by the supplier for the same supply or the outward supply is not

declared by the supplier in his valid returns, the discrepancy shall be communicated to both

such persons in such manner as may be prescribed.

(4) The duplication of claims of input tax credit shall be communicated to the recipient

in such manner as may be prescribed.

(5) The amount in respect of which any discrepancy is communicated under

sub-section (3) and which is not rectified by the supplier in his valid return for the month in

which discrepancy is communicated shall be added to the output tax liability of the recipient,

in such manner as may be prescribed, in his return for the month succeeding the month in

which the discrepancy is communicated.

(6) The amount claimed as input tax credit that is found to be in excess on account of

duplication of claims shall be added to the output tax liability of the recipient in his return for

the month in which the duplication is communicated.

(7) The recipient shall be eligible to reduce, from his output tax liability, the amount

added under 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 50 on the amount so added from the date of availing of credit till

the corresponding additions are made under the said sub-sections.

(9) Where any reduction in output tax liability is accepted under sub-section (7), the

interest paid under sub-section (8) shall be refunded to the recipient by crediting the amount

in the corresponding head of his electronic cash ledger in such manner as may be prescribed:

First return.

Claim of

input tax

credit and

provisional

acceptance

thereof.

Matching,

reversal and

reclaim of

input tax

credit.

51 of 1975.

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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 the output tax liability of the recipient in his

return for the month in which such contravention takes place and such recipient shall be

liable to pay interest on the amount so added at the rate specified in sub-section (3) of

section 50.

43. (1) The details of every credit note relating to outward supply furnished by a

registered person (hereafter in this section referred to as the “supplier”) for a tax period shall,

in such manner and within such time as may be prescribed, be matched––

(a) with the corresponding reduction in the claim for input tax credit by the

corresponding registered person (hereafter in this section referred to as the “recipient”)

in his valid return for the same tax period or any subsequent tax period; and

(b) for duplication of claims for reduction in output tax liability.

(2) The claim for reduction in output tax liability by the supplier that matches with the

corresponding reduction in the claim for input tax credit by the recipient shall be finally

accepted and communicated, in such manner as may be prescribed, to the supplier.

(3) Where the reduction of output tax liability in respect of outward supplies exceeds

the corresponding reduction in the claim for input tax credit or the corresponding credit note

is not declared by the recipient in his valid returns, the discrepancy shall be communicated

to both such persons in such manner as may be prescribed.

(4) The duplication of claims for reduction in output tax liability shall be communicated

to the supplier in such manner as may be prescribed.

(5) The amount in respect of which any discrepancy is communicated under

sub-section (3) and which is not rectified by the recipient in his valid return for the month in

which discrepancy is communicated shall be added to the output tax liability of the supplier,

in such manner as may be prescribed, in his return for the month succeeding the month in

which the discrepancy is communicated.

(6) The amount in respect of any reduction in output tax liability that is found to be on

account of duplication of claims shall be added to the output tax liability of the supplier in his

return for the month in which such duplication is communicated.

(7) The supplier shall be eligible to reduce, from his output tax liability, the amount

added under 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 at the rate specified under

sub-section (1) of section 50 in respect of the amount so added from the date of such claim

for reduction in the output tax liability till the corresponding additions are made under the

said sub-sections.

(9) Where any reduction in output tax liability is accepted under sub-section (7), the

interest paid under sub-section (8) shall be refunded to the supplier by crediting the amount

in the corresponding head of his electronic cash ledger in such manner as may be prescribed:

Provided that the amount of interest to be credited in any case shall not exceed the

amount of interest paid by the recipient.

(10) The amount reduced from output tax liability in contravention of the provisions of

sub-section (7) shall be added to the output tax liability of the supplier in his return for the

month in which such contravention takes place and such supplier shall be liable to pay

interest on the amount so added at the rate specified in sub-section (3) of section 50.

Matching,

reversal and

reclaim of

reduction in

output tax

liability.

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44. (1) Every registered person, other than an Input Service Distributor, a person

paying tax under section 51 or section 52, a casual taxable person and a 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 the financial year with the audited annual financial statement, and such other particulars

as may be prescribed.

45. Every registered person who is required to furnish a return under sub-section (1)

of section 39 and whose registration has been cancelled shall furnish a final return within

three months of the date of cancellation or date of order of cancellation, whichever is later, in

such form and manner as may be prescribed.

46. Where a registered person fails to furnish a return under section 39 or section 44 or

section 45, a notice shall be issued requiring him to furnish such return within fifteen days in

such form and manner as may be prescribed.

47. (1) Any registered person who fails to furnish the details of outward or inward

supplies required under section 37 or section 38 or returns required under section 39 or

section 45 by the due date shall pay a late fee of one hundred rupees for every day

during which such failure continues subject to a maximum amount of five thousand

rupees.

(2) Any registered person who fails to furnish the return required under section 44 by

the due date shall be liable to pay a late fee of one hundred rupees for every day during which

such failure continues subject to a maximum of an amount calculated at a quarter per cent. of

his turnover in the State or Union territory.

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.

(2) A registered person may authorise 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 under 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

services tax practitioners shall continue to rest with the registered person on whose behalf

such return and details are furnished.

CHAPTER X

PAYMENT OF TAX

49. (1) Every deposit made towards tax, interest, penalty, fee or any other amount by a

person by internet banking or by using credit or debit cards or National Electronic Fund

Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions

and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such

person to be maintained in such manner as may be prescribed.

(2) The input tax credit as self-assessed in the return of a registered person shall be

credited to his electronic credit ledger, in accordance with section 41, to be maintained in

such manner as may be prescribed.

Annual return.

Final return.

Notice to

return

defaulters.

Goods and

services tax

practitioners.

Payment of

tax, interest,

penalty and

other

amounts.

Levy of late

fee.

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(3) The amount available in the electronic cash ledger may be used for making any

payment towards tax, interest, penalty, fees or any other amount payable under the provisions

of this Act or the rules made thereunder in such manner and subject to such conditions and

within such time as may be prescribed.

(4) The amount available in the electronic credit ledger may be used for making any

payment towards output tax under this Act or under the Integrated Goods and Services Tax

Act in such manner and subject to such conditions and within such time as may be prescribed.

(5) The amount of input tax credit available in the electronic credit ledger of the registered

person on account of––

(a) integrated tax shall first be utilised towards payment of integrated tax and the

amount remaining, if any, may be utilised towards the payment of central tax and State

tax, or as the case may be, Union territory tax, in that order;

(b) the central tax shall first be utilised towards payment of central tax and the

amount remaining, if any, may be utilised towards the payment of integrated tax;

amount remaining, if any, may be utilised towards payment of integrated tax;

(d) the Union territory tax shall first be utilised towards payment of Union territory

tax and the amount remaining, if any, may be utilised towards 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

central tax.

(6) The balance in the electronic cash ledger or electronic credit ledger after payment

of tax, interest, penalty, fee or any other amount payable under this Act or the rules made

thereunder may be refunded in accordance with the provisions of section 54.

(7) All liabilities of a taxable person under this Act shall be recorded and maintained in

an electronic liability register in such manner as may be prescribed.

(8) Every taxable person shall discharge his tax and other dues under this Act or the

rules made thereunder in the following order, namely:––

(a) self-assessed tax, and other dues related to returns of previous tax periods;

(b) self-assessed tax, and other dues related to the return of the current tax period;

the demand determined under section 73 or section 74.

(9) Every person who has paid the tax on goods or services or both under this Act

shall, unless the contrary is proved by him, be deemed to have passed on the full incidence

of such tax to the recipient of such goods or services or both.

Explanation.––For the purposes of this section,—

(a) the date of credit to the account of the Government in the authorised bank

shall be deemed to be the date of deposit in the electronic cash ledger;

(b) the expression,—

(i) “tax dues” means the tax payable under this Act and does not include

interest, fee and penalty; and

(ii) “other dues” means interest, penalty, fee or any other amount payable

under this Act or the rules made thereunder.

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

Act or the rules made thereunder, but fails to pay the tax or any part thereof to the Government

within the period prescribed, shall for the period for which the tax or any part thereof remains

unpaid, pay, on his own, interest at such rate, not exceeding eighteen per cent., as may be

notified by the Government on the recommendations of the Council.

Interest on

delayed

payment of

tax.

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(2) The interest under sub-section (1) shall be calculated, in such manner as may be

prescribed, from the day succeeding the day on which such tax was due to be paid.

(3) A taxable person who makes an undue or excess claim of input tax credit under

sub-section (10) of section 42 or undue or excess reduction in output tax liability under

sub-section (10) of section 43, shall pay interest on such undue or excess claim or on such

undue or excess reduction, as the case may be, at such rate not exceeding twenty-four per

cent., as may be notified by the Government on the recommendations of the Council.

51. (1) Notwithstanding anything to the contrary contained in this Act, the Government

may mandate,––

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

Government; or

(b) local authority; or

(d) such persons or category of persons as may be notified by the Government

on the recommendations of the Council,

(hereafter in this section referred to as “the deductor”), to deduct tax at the rate of one

per cent. from the payment made or credited to the supplier (hereafter in this section referred

to as “the deductee”) of taxable goods or services or both, where the total value of such

supply, under a contract, exceeds two lakh and fifty thousand rupees:

Provided that no deduction shall be made if the location of the supplier and the place

of supply is in a State or Union territory which is different from the State or as the case may

be, Union territory of registration of the recipient.

Explanation.––For the purpose of deduction of tax specified above, the value of

supply shall be taken as the amount excluding the central tax, State tax, Union territory 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 deductor within ten days after the end of the month in which such deduction is made, in

such manner as may be prescribed.

(3) The deductor shall furnish to the deductee a certificate mentioning therein the

contract value, rate of deduction, amount deducted, amount paid to the Government and

such other particulars in such manner as may be prescribed.

(4) If any deductor fails to furnish to the deductee the certificate, after deducting the

tax at source, within five days of crediting the amount so deducted to the Government, the

deductor shall pay, by way of a late fee, a sum of one hundred rupees per day from the day

after the expiry of such five days period until the failure is rectified, subject to a maximum

amount of five thousand rupees.

(5) The deductee shall claim credit, in his electronic cash ledger, of the tax deducted

and reflected in the return of the deductor furnished under sub-section (3) of section 39, in

such manner as may be prescribed.

(6) If any deductor fails to pay to the Government the amount deducted as tax under

sub-section (1), he shall pay interest in accordance with the provisions of sub-section (1) of

section 50, in addition to the amount of tax deducted.

(7) The determination of the amount in default under this section shall be made in the

manner specified in section 73 or section 74.

(8) The refund to the deductor or the deductee arising on account of excess or erroneous

deduction shall be dealt with in accordance with the provisions of section 54:

Provided that no refund to the deductor shall be granted, if the amount deducted has

been credited to the electronic cash ledger of the deductee.

Tax deduction

at source.

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52. (1) Notwithstanding anything to the contrary contained in this Act, every electronic

commerce operator (hereafter in this section referred to as the “operator”), not being an

agent, shall collect an amount calculated at such rate not exceeding one per cent., as may be

notified by the Government on the recommendations of the Council, of the net value of

taxable supplies made through it by other suppliers where the consideration with respect to

such supplies is to be collected by the operator.

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 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 to the Government by the

operator within ten days after the end of the month in which such collection is made, in such

manner as may be prescribed.

(4) Every operator who collects the amount specified in sub-section (1) shall furnish a

statement, electronically, containing the details of outward supplies of goods or services or

both effected through it, including the supplies of goods or services or both returned through

it, and the amount collected under sub-section (1) during a month, in such form and manner

as may be prescribed, within ten days after the end of such month.

(5) Every operator who collects the amount specified in sub-section (1) shall furnish

an annual statement, electronically, containing the details of outward supplies of goods or

services or both effected through it, including the supplies of goods or services or both

returned through it, and the amount collected under the said sub-section during the financial

year, in such form and manner as may be prescribed, before the thirty first day of December

following the end of such financial year.

(6) If any operator after furnishing a statement under sub-section (4) discovers any

omission or incorrect particulars therein, other than as a result of scrutiny, audit, inspection

or enforcement activity by the tax authorities, he shall rectify such omission or incorrect

particulars in the statement to be furnished for the month during which such omission

or incorrect particulars are noticed, subject to payment of interest, as specified in

sub-section (1) of section 50:

Provided that no such rectification of any omission or incorrect particulars shall be

allowed after the due date for furnishing of statement for the month of September following

the end of the financial year or the actual date of furnishing of the relevant annual statement,

whichever is earlier.

(7) The supplier who has supplied the goods or services or both through the operator

shall claim credit, in his electronic cash ledger, of the amount collected and reflected in the

statement of the operator furnished under sub-section (4), in such manner as may be

prescribed.

(8) The details of supplies furnished by every operator under sub-section (4) shall be

matched with the corresponding details of outward supplies furnished by the concerned

supplier registered under this Act in such manner and within such time as may be prescribed.

(9) Where the details of outward supplies furnished by the operator under

sub-section (4) do not match with the corresponding details furnished by the supplier under

section 37, the discrepancy shall be communicated to both persons in such manner and

within such time as may be prescribed.

(10) The amount in respect of which any discrepancy is communicated under

sub-section (9) and which is not rectified by the supplier in his valid return or the operator in

Collection of

tax at source.

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his statement for the month in which discrepancy is communicated, shall be added to the

output tax liability of the said supplier, where the value of outward supplies furnished by the

operator is more than the value of outward supplies furnished by the supplier, in his return

for the month succeeding the month in which the discrepancy is communicated in such

manner as may be prescribed.

(11) The concerned supplier, in whose output tax liability any amount has been added

under 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 operator

to furnish such details relating to—

(a) supplies of goods or services or both effected through such operator during

any period; or

(b) stock of goods held by the suppliers making supplies through such operator

in the godowns or warehouses, by whatever name called, managed by such operator

and declared as additional places of business by such suppliers,

as may be specified in the notice.

(13) Every operator on whom a notice has been served under sub-section (12) shall

furnish the required information within fifteen working days of the date of service of such

notice.

(14) Any person who fails to furnish the information required by the notice served

under sub-section (12) shall, without prejudice to any action that may be taken under

section 122, be liable to a penalty which may extend to twenty-five thousand rupees.

Explanation.—For the purposes of this section, the expression “concerned supplier”

shall mean the supplier of goods or services or both making supplies through the operator.

53. On utilisation of input tax credit availed under this Act for payment of tax dues

under the Integrated Goods and Services Tax Act in accordance with the provisions of

sub-section (5) of section 49, as reflected in the valid return furnished under sub-section (1)

of section 39, the amount collected as central tax shall stand reduced by an amount equal to

such credit so utilised and the Central Government shall transfer an amount equal to the

amount so reduced from the central tax account to the integrated tax account in such manner

and within such time as may be prescribed.

CHAPTER XI

REFUNDS

54. (1) Any person claiming refund of any tax and interest, if any, paid on such tax or

any other amount paid by him, may make an application before the expiry of two years from

the relevant date in such form and manner as may be prescribed:

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 furnished under section 39 in such manner as may be prescribed.

(2) A specialised agency of the United Nations Organisation or any Multilateral 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 under section 55, entitled to a refund of tax paid by it on inward supplies of goods

or services or both, may make an application for such refund, in such form and manner as

may be prescribed, before the expiry of six months from the last day of the quarter in which

such supply was received.

Transfer of

input tax

credit.

Refund of tax.

46 of 1947.

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(3) Subject to the provisions of sub-section (10), a registered person may claim refund

of any unutilised input tax credit at the end of any tax period:

Provided that no refund of unutilised input tax credit shall be allowed in cases other

than––

(i) zero rated supplies made without payment of tax;

(ii) where the credit has accumulated on account of rate of tax on inputs being

higher than the rate of tax on output supplies (other than nil rated or fully exempt

supplies), except supplies of goods or services or both as may be notified by the

Government on the recommendations of the Council:

Provided further that no refund of unutilised input tax credit shall be allowed in

cases where the goods exported out of India are subjected to export duty:

Provided also that no refund of input tax credit shall be allowed, if the supplier of

goods or services or both avails of drawback in respect of central tax or claims refund

of the integrated tax paid on such supplies.

(4) The application shall be accompanied by—

(a) such documentary evidence as may be prescribed to establish that a refund

is due to the applicant; and

(b) such documentary or other evidence (including the documents referred to in

section 33) as the applicant may furnish to establish that the amount of tax and interest,

if any, paid on such tax or any other amount paid in relation to which such refund is

claimed was collected from, or paid by, him and the incidence of such tax and interest

had not been passed on to any other person:

Provided that where the amount claimed as refund is less than two lakh rupees,

it shall not be necessary for the applicant to furnish any documentary and other

evidences but he may file a declaration, based on the documentary or other evidences

available with him, certifying that the incidence of such tax and interest had not been

passed on to any other person.

(5) If, on receipt of any such application, the proper officer is satisfied that the whole

or part of the amount claimed as refund is refundable, he may make an order accordingly and

the amount so determined shall be credited to the Fund referred to in section 57.

(6) Notwithstanding anything contained in 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 the Government on the recommendations of the Council, refund on a

provisional basis, ninety per cent. of the total amount so claimed, excluding the amount of

input tax credit provisionally accepted, in such manner and subject to such conditions,

limitations and safeguards as may be prescribed and thereafter make an order under

sub-section (5) for final settlement of the refund claim after due verification of documents

furnished by the applicant.

(7) The proper officer shall issue the order under 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 unutilised input tax credit under sub-section (3);

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and for which invoice has not been issued, or where a refund voucher has been issued;

(d) refund of tax in pursuance of section 77;

(e) the tax and interest, if any, or any other amount paid by the applicant, if he

had not passed on the incidence of such tax and interest to any other person; or

(f) the tax or interest borne by such other class of applicants as the Government

may, on the recommendations of the Council, by notification, specify.

(9) Notwithstanding anything to the contrary contained in any judgment, decree,

order or direction of the Appellate Tribunal or any court or in any other provisions of this Act

or the rules made thereunder or in any other law for the time being in force, no refund shall be

made except in accordance with the provisions of sub-section (8).

(10) Where any refund is due under sub-section (3) to a registered person who has

defaulted in furnishing any return or who is required to pay any tax, interest or penalty, which

has not been stayed by any court, Tribunal or Appellate Authority by the specified date, the

proper officer may—

(a) withhold payment of refund due until the said person has furnished the

return or paid the tax, interest or penalty, as the case may be;

(b) deduct from the refund due, any tax, interest, penalty, fee or any other amount

which the taxable person is liable to pay but which remains unpaid under this Act or

under the existing law.

Explanation.––For the purposes of this sub-section, the expression “specified date”

shall mean the last date for filing an appeal under this Act.

(11) Where an order giving rise to a refund is the subject matter of an appeal or further

proceedings or where any other proceedings under this Act is pending and the Commissioner

is of the opinion that grant of such refund is likely to adversely affect the revenue in the said

appeal or other proceedings on account of malfeasance or fraud committed, he may, after

giving the taxable person an opportunity of being heard, withhold the refund till such time as

he may determine.

(12) Where a refund is withheld under sub-section (11), the taxable person shall,

notwithstanding anything contained in section 56, be entitled to interest at such rate not

exceeding six per cent. as may be notified on the recommendations of the Council, if as a

result of the appeal or further proceedings he becomes entitled to refund.

(13) Notwithstanding anything to the contrary contained in this section, the amount

of advance tax deposited by a casual taxable person or a 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 under section 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 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,

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 or

input services used in such goods,––

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(i) if the goods are exported by sea or air, the date on which the ship

or the aircraft in which such goods are loaded, leaves India; or

(ii) if the goods are exported by land, the date on which such goods

pass the frontier; or

(iii) if the goods are exported by post, the date of despatch of goods

by the Post Office concerned to a place outside India;

(b) in the case of supply of goods regarded as deemed exports where a

refund of tax paid is available in respect of the goods, the date on which the

return relating to such deemed exports is furnished;

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––

(i) receipt of payment in convertible foreign exchange, where the

supply of services had been completed prior to the receipt of such payment;

(ii) issue of invoice, where payment for the services had been received

in advance prior to the date of issue of the invoice;

(d) in case where the tax becomes refundable as a consequence of judgment,

decree, order or direction of the Appellate Authority, Appellate Tribunal or any

court, the date of communication of such judgment, decree, order or direction;

(e) in the case of refund of unutilised input tax credit under

sub-section (3), the end of the financial year in which such claim for refund

arises;

(f) in the case where tax is paid provisionally under this Act or the rules

made thereunder, the date of adjustment of tax after the final assessment thereof;

(g) in the case of a person, other than the supplier, the date of receipt of

goods or services or both by such person; and

(h) in any other case, the date of payment of tax.

55. The Government may, on the recommendations of the Council, by notification,

specify any specialised agency of the United Nations 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 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.

56. If any tax ordered to be refunded under sub-section (5) of section 54 to any

applicant is not refunded within sixty days from the date of receipt of application under sub-

section (1) of that section, interest at such rate not exceeding six per cent. as may be specified

in the notification issued by the Government on the recommendations of the Council shall be

payable in respect of such refund from the date immediately after the expiry of sixty days

from the date of receipt of application under the said 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

46 of 1947.

Refund in

certain cases.

Interest on

delayed

refunds.

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respect of such refund from the date immediately after the expiry of sixty days from the date

of receipt of application till the date of refund.

Explanation.––For the purposes of this section, where any order of refund is made by

an Appellate Authority, Appellate Tribunal or any court against an order of the proper

officer under sub-section (5) of section 54, the order passed by the Appellate Authority,

Appellate Tribunal or by the court shall be deemed to be an order passed under the said

sub-section (5).

57. The Government shall constitute a Fund, to be called the Consumer Welfare Fund

and there shall be credited to the Fund,—

(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

in such manner as may be prescribed.

58. (1) All sums credited to the Fund shall be utilised by the Government for the

welfare of the consumers in such manner as may be prescribed.

(2) The Government or the authority specified by it shall maintain proper and separate

account and other relevant records in relation to the Fund and prepare an annual statement

of accounts in such form as may be prescribed in consultation with the Comptroller and

Auditor-General of India.

CHAPTER XII

ASSESSMENT

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

furnish a return for each tax period as specified under section 39.

60. (1) Subject to the provisions of sub-section (2), where the taxable person is unable

to determine the value of goods or services or both or determine the rate of tax applicable

thereto, he may request the proper officer in writing giving reasons for payment of tax on a

provisional basis and the proper officer shall pass an order, within a period not later than

ninety days from the date of receipt of such request, allowing payment of tax on provisional

basis at such rate or on such value as may be specified by him.

(2) The payment of tax on provisional basis may be allowed, if the taxable person

executes a bond in such form as may be prescribed, and with such surety or security as the

proper officer may deem fit, binding the taxable person for payment of the difference between

the amount of tax as may be finally assessed and the amount of tax provisionally assessed.

(3) The proper officer shall, within a period not exceeding six months from the date of

the communication of the order issued under sub-section (1), pass the final assessment

order after taking into account such information as may be required for finalizing the

assessment:

Provided that the period specified in this sub-section may, on sufficient cause being

shown and for reasons to be recorded in writing, be extended by the Joint Commissioner or

Additional Commissioner for a further period not exceeding six months and by the

Commissioner for such further period not exceeding four years.

(4) The registered person shall be liable to pay interest on any tax payable on the

supply of goods or services 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

Consumer

Welfare Fund.

Utilisation of

Fund.

Self-

assessment.

Provisional

assessment.

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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 particulars furnished by

the registered person to verify the correctness of the return and inform him of the discrepancies

noticed, if any, in such manner as may be prescribed and seek his explanation thereto.

(2) In case the explanation is found acceptable, the registered person shall be informed

accordingly and no further action shall be taken in this regard.

(3) In case no satisfactory explanation is furnished within a period of thirty days of

being informed by the proper officer or such further period as may be permitted by him or

where the registered person, after accepting the discrepancies, fails to take the corrective

measure in his return for the month in which the discrepancy is accepted, the proper officer

may initiate appropriate action including those under section 65 or section 66 or section 67,

or proceed to determine the tax and other dues under section 73 or section 74.

62. (1) Notwithstanding anything to the contrary contained in section 73 or section 74,

where a registered person fails to furnish the return under section 39 or section 45, even after

the service of a notice under section 46, the proper officer may proceed to assess the tax

liability of the said person to the best of his judgement taking into account all the relevant

material which is available or which he has gathered and issue an assessment order within a

period of five years from the date specified under section 44 for furnishing of the annual

return for the financial year to which the tax not paid relates.

(2) Where the registered person furnishes a valid return within thirty days of the

service of the assessment order under sub-section (1), the said assessment order shall be

deemed to have been withdrawn but the liability for payment of interest under

sub-section (1) of section 50 or for payment of late fee under section 47 shall continue.

63. Notwithstanding anything to the contrary contained in section 73 or section

74, where a taxable person fails to obtain registration even though liable to do so or whose

registration has been cancelled under 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 to the

best of his judgment 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 shall be passed without giving the person an

opportunity of being heard.

64. (1) The proper officer may, on any evidence showing a tax liability of a person

coming to his notice, with the previous permission of Additional Commissioner or

Joint Commissioner, proceed to assess the tax liability of such person to protect the interest

of revenue and issue an assessment order, if he has sufficient grounds to believe that any

delay in doing so may adversely affect the interest of revenue:

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.

Scrutiny of

returns.

Assessment of

non-filers of

returns.

Assessment of

unregistered

persons.

Summary

assessment in

certain

special cases.

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CHAPTER XIII

AUDIT

65. (1) The Commissioner or any officer authorised by him, by way of a general or a

specific order, may undertake audit of any registered person for such period, at such frequency

and in such manner as may be prescribed.

(2) The officers referred to in sub-section (1) may conduct audit at the place of business

of the registered person or in their office.

(3) The registered person shall be informed by way of a notice not less than fifteen

working days prior to the conduct of audit in such manner as may be prescribed.

(4) The audit under sub-section (1) shall be completed within a period of three months

from the date of commencement of the audit:

Provided that where the Commissioner is satisfied that audit in respect of such

registered person cannot be completed within three months, he may, for the reasons to be

recorded in writing, extend the period by a further period not exceeding six months.

Explanation.––For the purposes of this sub-section, the expression “commencement

of audit” shall mean the date on which the records and other documents, called for by the tax

authorities, are made available by the registered person or the actual institution of audit at

the place of business, whichever is later.

(5) During the course of audit, the authorised officer may require the registered

person,—

(i) to afford him the necessary facility to verify the books of account or other

documents as he may require;

(ii) to furnish such information as he may require and render assistance for

timely completion of the audit.

(6) On conclusion of audit, the proper officer shall, within thirty days, inform the

registered person, whose records are audited, about the findings, his rights and obligations

and the reasons for such findings.

(7) Where the audit conducted under sub-section (1) results in detection of tax not

paid or short paid or erroneously refunded, or input tax credit wrongly availed or utilised, the

proper officer may initiate action under section 73 or section 74.

66. (1) If at any stage of scrutiny, inquiry, investigation or any other proceedings

before him, any officer not below the rank of Assistant Commissioner, having regard to the

nature and complexity of the case and the interest of revenue, is of the opinion that the value

has not been correctly declared or the credit availed is not within the normal limits, he may,

with the prior approval of the Commissioner, direct such registered person by a communication

in writing to get his records including books of account examined and audited by a chartered

accountant or a cost accountant as may be nominated by the Commissioner.

(2) The chartered accountant or cost accountant so nominated shall, within the period

of ninety days, submit a report of such audit duly signed and certified by him to the said

Assistant Commissioner mentioning therein such other particulars as may be specified:

Provided that the Assistant Commissioner may, on an application made to him in this

behalf by the registered person or the chartered accountant or cost accountant or for any

material and sufficient reason, extend the said period by a further period of ninety days.

(3) The provisions of sub-section (1) shall have effect notwithstanding that the

accounts of the registered person have been audited under any other provisions of this Act

or any other law for the time being in force.

Audit by tax

authorities.

Special audit.

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(4) The registered person shall be given an opportunity of being heard in respect of

any material gathered on the basis of special audit under sub-section (1) which is proposed

to be used in any proceedings against him under this Act or the rules made thereunder.

(5) The expenses of the examination and audit of records under sub-section (1), including

the remuneration of such chartered accountant or cost accountant, shall be determined and

paid by the Commissioner and such determination shall be final.

(6) Where the special audit conducted under 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––

(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 or goods in such a manner as is likely

to cause evasion of tax payable under this Act,

he may authorise in writing any other officer of central tax to inspect any places of business

of the taxable person or the persons engaged in the business of transporting goods or the

owner or the operator of warehouse or godown or any other place.

(2) Where the proper officer, not below the rank of Joint Commissioner, either pursuant

to an inspection carried out under sub-section (1) or otherwise, has reasons to believe that

any goods liable to confiscation or any documents or books or things, which in his opinion

shall be useful for or relevant to any proceedings under this Act, are secreted in any place, he

may authorise in writing any other officer of central tax to search and seize or may himself

search and seize such goods, documents or books or things:

Provided that where it is not practicable to seize any such goods, the proper officer, or

any officer authorised by him, may serve on the owner or the custodian of the goods an order

that he shall not remove, part with, or otherwise deal with the goods except with the previous

permission of such officer:

Provided further that the documents or books or things so seized shall be retained by

such officer only for so long as may be necessary for their examination and for any inquiry or

proceedings under this Act.

(3) The documents, books or things referred to in sub-section (2) or any other

documents, books or things produced by a taxable person or any other person, which have

not been relied 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 which any goods, accounts, registers or documents of the person are suspected to be

concealed, where access to such premises, almirah, electronic devices, box or receptacle is

denied.

(5) The person from whose custody any documents are seized under sub-section (2)

shall be entitled to make copies thereof or take extracts therefrom in the presence of an

Power of

inspection,

search and

seizure.

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authorised officer at such place and time as such officer may indicate in this behalf except

where making such copies or taking such extracts may, in the opinion of the proper officer,

prejudicially affect the investigation.

(6) The goods so seized under sub-section (2) shall be released, on a provisional

basis, upon execution of a bond and furnishing of a security, in such manner and of such

quantum, respectively, as may be prescribed or on payment of applicable tax, interest and

penalty payable, as the case may be.

(7) Where any goods are seized under sub-section (2) and no notice in respect thereof

is given within six months of the seizure of the goods, the goods shall be returned to the

person from whose possession they were seized:

Provided that the period of six months may, on sufficient cause being shown, be

extended by the proper officer for a further period not exceeding six months.

(8) The Government may, having regard to the perishable or hazardous nature of any

goods, depreciation in the value of the goods with the passage of time, constraints of

storage space for the goods or any other relevant considerations, by notification, specify

the goods or class of goods which shall, as soon as may be after its seizure under

sub-section (2), be disposed of by the proper officer in such manner as may be prescribed.

(9) Where any goods, being goods specified under sub-section (8), have been seized

by a proper officer, or any officer authorised by him under sub-section (2), he shall prepare

an inventory of such goods in such manner as may be prescribed.

(10) The provisions of the Code of Criminal Procedure, 1973, relating to search and

seizure, shall, so far as may be, apply to search and seizure under this section subject to the

modification that sub-section (5) of section 165 of the said Code shall have effect as if for the

word “Magistrate”, wherever it occurs, the word “Commissioner” were substituted.

(11) Where the proper officer has reasons to believe that any person has evaded or is

attempting to evade the payment of any tax, he may, for reasons to be recorded in writing,

seize the accounts, registers or documents of such person produced before him and shall

grant a receipt for the same, and shall retain the same for so long as may be necessary in

connection with any proceedings under this Act or the rules made thereunder for prosecution.

(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 such taxable

person, and on return of goods so purchased by such officer, such taxable person or any

person in charge of the business premises shall refund the amount so paid towards the

goods after cancelling any tax invoice or bill of supply issued earlier.

68. (1) The Government may require the person in charge of a conveyance carrying

any consignment of goods of value exceeding such amount as may be specified to carry with

him such documents and such devices as may be prescribed.

(2) The details of documents required to be carried under sub-section (1) shall be

validated in such manner as may be prescribed.

(3) Where any conveyance referred to in sub-section (1) is intercepted by the proper

officer at any place, he may require the person in charge of the said conveyance to produce

the documents prescribed under the said sub-section and devices for verification, and the

said person shall be liable to produce the documents and devices and also allow the inspection

of goods.

69. (1) Where the Commissioner has reasons to believe that a person has committed

any offence specified in clause (a) or clause (b) or clause (c) or clause (d) of

sub-section (1) of section 132 which is punishable under clause (i) or (ii) of

2 of 1974.

Inspection of

goods in

movement.

Power to

arrest.

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sub-section (1), or sub-section (2) of the said section, he may, by order, authorise any officer

of central 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) Subject to the provisions of the Code of Criminal Procedure, 1973,––

(a) where a person is arrested under sub-section (1) for any offence specified

under sub-section (4) of section 132, he shall be admitted to bail or in default of bail,

forwarded to the custody of the Magistrate;

(b) in the case of a non-cognizable and bailable offence, the Deputy Commissioner

or the Assistant Commissioner shall, for the purpose of releasing an arrested person

on bail or otherwise, have the same powers and be subject to the same provisions as

an officer-in-charge of a police station.

70. (1) The proper officer under this Act shall have power to summon any person

whose attendance he considers necessary either to give evidence or to produce a document

or any other thing in any inquiry in the same manner, as provided in the case of a civil court

under the provisions of the Code of Civil Procedure, 1908.

(2) Every such inquiry referred to in sub-section (1) shall be deemed to be a “judicial

proceedings” within the meaning of section 193 and section 228 of the Indian Penal Code.

71. (1) Any officer under this Act, authorised by the proper officer not below the rank

of Joint Commissioner, shall have access to any place of business of a registered person to

inspect books of account, documents, computers, computer programs, computer software

whether installed in a computer or otherwise and such other things as he may require and

which may be available at such place, for the purposes of carrying out any audit, scrutiny,

verification and checks as may be necessary to safeguard the interest of revenue.

(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 declared

to the proper officer in such manner as may be prescribed;

(ii) trial balance or its equivalent;

(iii) statements of annual financial accounts, duly audited, wherever required;

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

(v) the income-tax audit report, if any, under section 44AB of the Income-tax

Act, 1961; and

(vi) any other relevant record,

for the scrutiny by the officer or audit party or the chartered accountant or cost accountant

within a period not exceeding fifteen working days from the day when such demand is made,

or such further period as may be allowed by the said officer or the audit party or the chartered

accountant or cost accountant.

72. (1) All officers of Police, Railways, Customs, and those officers engaged in the

collection of land revenue, including village officers, officers of State tax and officers of

Union territory tax shall assist the proper officers in the implementation of this Act.

(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.

2 of 1974.

5 of 1908

Power to

summon

persons to

give evidence

and produce

documents.

45 of 1860.

Access to

business

premises.

18 of 2013.

43 of 1961.

Officers

assist proper

officers.

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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 erroneously been made,

or who has wrongly 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 Act or 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 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), pay the amount of tax along with

interest payable thereon under section 50 on the basis of his own ascertainment of such tax

or the tax as ascertained by the proper officer and inform the proper officer in writing of such

payment.

(6) The proper officer, on receipt of such information, shall 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 section 50 within thirty days of issue of

show cause notice, no penalty shall be payable and all proceedings in respect of the said

notice shall be deemed to be concluded.

(9) The proper officer shall, after considering the representation, if any, made by

person chargeable with tax, determine the amount of tax, interest and a penalty equivalent to

ten per cent. of tax or ten thousand rupees, whichever is higher, due from such person and

issue an order.

(10) The proper officer shall issue the order under sub-section (9) within three years

from the due date for 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.

Determination

of tax not

paid or short

paid or

erroneously

refunded or

input tax

credit wrongly

availed or

utilised for

any reason

other than

fraud or any

wilful-

misstatement

or suppression

of facts.

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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 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 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.

(3) Where a notice has been issued for any period under sub-section (1), the proper

officer may serve a statement, containing the details of tax not paid or short paid or erroneously

refunded or input tax credit wrongly availed or utilised for such periods other than those

covered under 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 grounds relied

upon in the said statement, except the ground 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 (1), pay the amount of tax along with interest payable under section 50 and a

penalty equivalent to fifteen per cent. of such tax on the basis of his own ascertainment of

such tax or the tax as ascertained by the proper officer and inform the proper officer in writing

of such payment.

(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 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) pays the said tax

along with interest payable under section 50 and a penalty equivalent to twenty-five per cent.

of such tax within thirty days of issue of the notice, all proceedings in respect of the said

notice shall be deemed to be concluded.

(9) The proper officer shall, after considering the representation, if any, made by the

person chargeable with tax, determine the amount of tax, interest and penalty due from such

person and issue an order.

(10) The proper officer shall issue the order under sub-section (9) within a period of

five years from the due date for 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 five

years from the date of erroneous refund.

(11) Where any person served with an order issued under sub-section (9) pays the tax

along with interest payable thereon under section 50 and a penalty equivalent to fifty per

cent. of such tax within thirty days of communication of the order, all proceedings in respect

of the said notice shall be deemed to be concluded.

Explanation 1.—For the purposes of section 73 and this section,—

(i) the expression “all proceedings in respect of the said notice” shall not

include proceedings under section 132;

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

or suppression

of facts.

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(ii) where the notice under the same proceedings is issued to the main

person liable to pay tax and some other persons, and such proceedings against

the main person have been concluded under section 73 or section 74, the

proceedings against all the persons liable to pay penalty under sections 122,

125, 129 and 130 are deemed to be concluded.

Explanation 2.––For the purposes of this Act, the expression “suppression”

shall mean non-declaration of facts or information which a taxable person is required to

declare in the return, statement, report or any other document furnished under this Act

or the rules made thereunder, or failure to furnish any information on being asked for,

in writing, by the proper officer.

75. (1) Where the service of notice or issuance of order is stayed by an order of a court

or Appellate Tribunal, the period of such stay shall be excluded in computing the period

specified in sub-sections (2) and (10) of section 73 or sub-sections (2) and (10) of section 74,

as the case may be.

(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

sub-section (1) of section 73.

(3) Where any order is required to be issued in pursuance of the direction of the

Appellate Authority or Appellate Tribunal or a court, such order shall be issued within two

years from the date of communication of the said direction.

(4) An opportunity of hearing shall be granted where a request is received in writing

from the person chargeable with tax or penalty, or where any adverse decision is contemplated

against such person.

(5) The proper officer shall, if sufficient cause is shown by the person chargeable with

tax, grant time to the said person and adjourn the hearing for reasons to be recorded in

writing:

Provided that no such adjournment shall be granted for more than three times to a

person during the proceedings.

(6) The proper officer, in his order, shall set out the relevant facts and the basis of his

decision.

(7) The amount of tax, interest and penalty demanded in the order shall not be in excess

of the amount specified in the notice and no demand shall be confirmed on the grounds other

than the grounds specified in the notice.

(8) Where the Appellate Authority or Appellate Tribunal or court modifies the amount

of tax determined by the proper officer, the amount of interest and penalty shall stand

modified accordingly, taking into account the amount of tax so modified.

(9) The interest on the tax short paid or not paid shall be payable whether or not

specified in the order determining the tax liability.

(10) The adjudication proceedings shall be deemed to be concluded, if the order is not

issued within three years as provided for in sub-section (10) of section 73 or within five

years as provided for in sub-section (10) of section 74.

(11) An issue on which the Appellate Authority or the Appellate Tribunal or the High

Court has given its decision which is prejudicial to the interest of revenue in some other

proceedings and an appeal to the Appellate Tribunal or the High Court or the Supreme

Court against such decision of the Appellate Authority or the Appellate Tribunal or the

High Court is pending, the period spent between the date of the decision of the Appellate

General

provisions

relating to

determination

of tax.

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Authority and that of the Appellate Tribunal or the date of decision of the Appellate Tribunal

and that of the High Court or the date of the decision of the High Court and that of the

Supreme Court shall be excluded in computing the period referred to in sub-section (10) of

section 73 or sub-section (10) of section 74 where proceedings are initiated by way of issue

of a show cause notice under the said sections.

(12) Notwithstanding anything contained in section 73 or section 74, where any amount

of self-assessed tax in accordance with a return furnished under section 39 remains unpaid,

either wholly or partly, or any amount of interest payable on such tax remains unpaid, the

same shall be recovered under the provisions of section 79.

(13) Where any penalty is imposed under section 73 or section 74, no penalty for the

same act or omission shall be imposed on the same person under any other provision of this

Act.

76. (1) Notwithstanding anything to the contrary contained in any order or direction

of any Appellate Authority or Appellate Tribunal or court or in any other provisions of this

Act or the rules made thereunder or any other law for the time being in force, every person

who has collected from any other person any amount as representing the tax under this Act,

and has not paid the said amount to the Government, shall forthwith pay the said amount to

the Government, irrespective of whether the supplies in respect of which such amount was

collected are taxable or not.

(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 under the

provisions of this Act.

(3) The proper officer shall, after considering the representation, if any, made by the

person on whom the notice is served under sub-section (2), determine the amount due from

such person and thereupon such person shall pay the amount so determined.

(4) The person referred to in sub-section (1) shall in addition to paying the amount

referred to in 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 the person to whom the notice was issued to show cause.

(6) The proper officer shall issue an order within one year from the date of issue of the

notice.

(7) Where the issuance of order is stayed by an order of the court or Appellate Tribunal,

the period of such stay shall be excluded in computing the period of one year.

(8) The proper officer, in his order, shall set out the relevant facts and the basis of his

decision.

(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.

Tax collected

but not paid to

Government.

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77. (1) A registered person who has paid the Central tax and State tax or, as the case

may be, the Central tax and the Union territory tax on a transaction considered by him to be

an intra-State supply, but which is subsequently held to be an inter-State supply, shall be

refunded the amount of taxes so paid in such manner and subject to such conditions as may

be prescribed.

(2) A registered person who has paid integrated tax on a transaction considered by him

to be an inter-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 central tax and State tax or, as the case

may be, the Central tax and the Union territory tax payable.

78. Any amount payable by a taxable person in pursuance of an order passed under

this Act shall be paid by such person within a period of three months from the date of service

of such order failing which recovery proceedings shall be initiated:

Provided that where the proper officer considers it expedient in the interest of revenue,

he may, for reasons to be recorded in writing, require the said taxable person to make such

payment within such period less than a period of three months as may be specified by him.

79. (1) Where any amount payable by a person to the Government under any of the

provisions of this Act or the rules made thereunder is not paid, the proper officer shall

proceed to recover the amount by one or more of the following modes, namely:––

(a) the proper officer may deduct or may require any other specified officer to

deduct the amount so payable from any money owing to such person which may be

under the control of the proper officer or such other specified officer;

(b) the proper officer may recover or may require any other specified officer to

recover the amount so payable by detaining and selling any goods belonging to such

person which are under the control of the proper officer or such other specified officer;

whom money is due or may become due to such person or who holds or may

subsequently hold money for or on account of such person, to pay to the Government

either forthwith upon the money becoming due or being held, or within the time specified

in the notice not being before the money becomes due or is held, so much of the money

as is sufficient to pay the amount due from such person or the whole of the money

when it is equal to or less than that amount;

(ii) every person to whom the notice is issued under sub-clause (i) shall be

bound to comply with such notice, and in particular, where any such notice is issued

to a post office, banking company or an insurer, it shall not be necessary to produce

any pass book, deposit receipt, policy or any other document for the purpose of any

entry, endorsement or the like being made before payment is made, notwithstanding

any rule, practice or requirement to the contrary;

(iii) in case the person to whom a notice under sub-clause (i) has been issued,

fails to make the payment in pursuance thereof to the Government, he shall be deemed

to be a defaulter in respect of the amount specified in the notice and all the consequences

of this Act or the rules made thereunder shall follow;

(iv) the officer issuing a notice under 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 a notice issued under

sub-clause (i) shall be deemed to have made the payment under the authority of the

person in default and such payment being credited to the Government shall be deemed

Tax

wrongfully

collected and

paid to

Central

Government

or State

Government.

Initiation of

recovery

proceedings.

Recovery of

tax.

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to constitute a good and sufficient discharge of the liability of such person to the

person in default to the extent of the amount specified in the receipt;

(vi) any person discharging any liability to the person in default after service on

him of the notice issued under sub-clause (i) shall be personally liable to the Government

to the extent of the liability discharged or to the extent of the liability of the person in

default for tax, interest and penalty, whichever is less;

(vii) where a person on whom a notice is served under sub-clause (i) proves to

the satisfaction of the officer issuing the notice that the money demanded or any part

thereof was not due to the person in default or that he did not hold any money for or

on account of the person in default, at the time the notice was served on him, nor is the

money demanded or any part thereof, likely to become due to the said person or be

held for or on account of such person, nothing contained in this section shall be

deemed to require the person on whom the notice has been served to pay to the

Government any such money or part thereof;

(d) the proper officer may, in accordance with the rules to be made in this behalf,

distrain any movable or immovable property belonging to or under the control of such

person, and detain the same until the amount payable is paid; and in case, any part of

the said amount payable or of the cost of the distress or keeping of the property,

remains unpaid for a period of thirty days next after any such distress, may cause the

said property to be sold and with the proceeds of such sale, may satisfy the amount

payable and the costs including cost of sale remaining unpaid and shall render the

surplus amount, if any, to such person;

(e) the proper officer may prepare a certificate signed by him specifying the

amount due from such person and send it to the Collector of the district in which such

person owns any property or resides or carries on his business or to any officer

authorised by the Government and the said Collector or the said officer, on receipt of

such certificate, shall proceed to recover from such person the amount specified

thereunder as if it were an arrear of land revenue;

(f) Notwithstanding anything contained in the Code of Criminal Procedure,

1973, the proper officer may file an application to the appropriate Magistrate and such

Magistrate shall proceed to recover from such person the amount specified thereunder

as if it were a fine imposed by him.

(2) Where the terms of any bond or other instrument executed under this Act or any

rules or regulations made thereunder provide that any amount due under such instrument

may be recovered in the manner laid down in sub-section (1), the amount may, without

prejudice to any other mode of recovery, be recovered in accordance with the provisions of

that 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 State tax or Union territory tax, during the course of

recovery of said tax arrears, may recover the amount from the said person as if it were an

arrear of State tax or Union territory 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 Governments shall be in proportion to the amount due to each such

Government.

2 of 1974.

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80. On an application filed by a taxable person, the Commissioner may, for reasons to

be recorded in writing, extend the time for payment or allow payment of any amount due

under this Act, other than the amount due as per the liability self-assessed in any return, by

such person in monthly instalments not exceeding twenty four, subject to payment of interest

under section 50 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 shall, without any further notice being served on the person, be liable for recovery.

81. Where a person, after any amount has become due from him, creates a charge on or

parts with the property belonging to him or in his possession by way of sale, mortgage,

exchange, or any other mode of transfer whatsoever of any of his properties in favour of any

other person with the intention of defrauding the Government revenue, such charge or

transfer shall be void as against any claim in respect of any tax or any other sum payable by

the said person:

Provided that, such charge or transfer shall not be void if it is made for adequate

consideration, in good faith and without notice of the pendency of such proceedings under

this Act or without notice of such tax or other sum payable by the said person, or with the

previous permission of the proper officer.

82. Notwithstanding anything to the contrary contained in any law for the time being

in force, save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, any

amount payable by a taxable person or any other person on account of tax, interest or

penalty which he is liable to pay to the Government shall be a first charge on the property of

such taxable person or such person.

83. (1) Where during the pendency of any proceedings under section 62 or section 63

or section 64 or section 67 or section 73 or section 74, the Commissioner is of the opinion that

for the purpose of protecting the interest of the Government revenue, it is necessary so to

do, he may, by order in writing attach provisionally any property, including bank account,

belonging to the taxable person in such manner as may be prescribed.

(2) Every such provisional attachment shall cease to have effect after the expiry of a

period of one year from the date of the order made under sub-section (1).

84. Where any notice of demand in respect of any tax, penalty, interest or any other

amount payable under this Act, (hereafter in this section referred to as “Government dues”),

is served upon any taxable person or any other person and any appeal or revision application

is filed or any other proceedings is initiated in respect of such Government dues, then––

(a) where such Government dues are enhanced in such appeal, revision or other

proceedings, the Commissioner shall serve upon the taxable person or any other

person another notice of demand in respect of the amount by which such Government

dues are enhanced and any recovery proceedings in relation to such Government

dues as are covered by the notice of demand served upon him before the disposal of

such appeal, revision or other proceedings may, without the service of any fresh

notice of demand, be continued from the stage at which such proceedings stood

immediately before such disposal;

(b) where such Government dues are reduced in such appeal, revision or in other

proceedings––

(i) it shall not be necessary for the Commissioner to serve upon the taxable

person a fresh notice of demand;

(ii) the Commissioner shall give intimation of such reduction to him and to

the appropriate authority with whom recovery proceedings is pending;

(iii) any recovery proceedings initiated on the basis of the demand served

upon him prior to the disposal of such appeal, revision or other proceedings may

Payment of

tax and other

amount in

instalments.

Transfer of

property to

be void in

certain cases.

Tax to be

first charge

on property.

Provisional

attachment to

protect

revenue in

certain cases.

Continuation

and validation

of certain

recovery

proceedings.

31 of 2016.

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be continued in relation to the amount so reduced from the stage at which such

proceedings stood immediately before such disposal.

CHAPTER XVI

LIABILITY TO PAY IN CERTAIN CASES

85. (1) Where a taxable person, liable to pay tax under this Act, transfers his business

in whole or in part, by sale, gift, lease, leave and license, hire or in any other manner

whatsoever, the taxable person and the person to whom the business is so transferred shall,

jointly and severally, be liable wholly or to the extent of such transfer, to pay the tax, interest

or any penalty due from the taxable person upto the time of such transfer, whether such tax,

interest or penalty has been determined before such transfer, but has remained unpaid or is

determined thereafter.

(2) Where the transferee of a business referred to in sub-section (1) carries on such

business either in his own name or in some other name, he shall be liable to pay tax on the

supply of goods or services or both effected by him with effect from the date of such transfer

and shall, if he is a registered person under this Act, apply within the prescribed time for

amendment of his certificate of registration.

86. Where an agent supplies or receives any taxable goods on behalf of his principal,

such agent and his principal shall, jointly and severally, be liable to pay the tax payable on

such goods under this Act.

87. (1) When two or more companies are amalgamated or merged in pursuance of an

order of court or of Tribunal or otherwise and the order is to take effect from a date earlier to

the date of the order and any two or more of such companies have supplied or received any

goods or services or both to or from each other during the period commencing on the date

from which the order takes effect till the date of the order, then such transactions of supply

and receipt shall be included in the turnover of supply or receipt of the respective companies

and they shall be liable to pay tax accordingly.

(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.

88. (1) When any company is being wound up whether under the orders of a court or

Tribunal or otherwise, every person appointed as receiver of any assets of a company

(hereafter in this section referred to as the “liquidator”), shall, within thirty days after his

appointment, give intimation of his appointment to the Commissioner.

(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) When any private company is wound up and any tax, interest or penalty determined

under this Act on the company for any period, whether before or in the course of or after its

liquidation, cannot be recovered, then every person who was a director of such company at

any time during the period for which the tax was due shall, jointly and severally, be liable for

the payment of such tax, interest or penalty, unless he proves to the satisfaction of the

Commissioner that such non-recovery cannot be attributed to any gross neglect, misfeasance

or breach of duty on his part in relation to the affairs of the company.

89. (1) Notwithstanding anything contained in the Companies Act, 2013, where any

tax, interest or penalty due from a private company in respect of any supply of goods or

services or both for any period cannot be recovered, then, every person who was a director

of the private company during such period shall, jointly and severally, be liable for the

Liability

case of transfer

of business.

Liability of

agent and

principal.

Liability in

case of

amalgamation

or merger of

companies.

Liability

case

company

liquidation.

18 of 2013.

Liability of

directors of

private

company.

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payment of such tax, interest or penalty unless he proves that the non-recovery cannot be

attributed to any gross neglect, misfeasance or breach of duty on his part in relation to the

affairs of the company.

(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 director of such

private company in relation to any tax, interest or penalty in respect of such supply of goods

or services or both of such private company:

Provided that nothing contained in this sub-section shall apply to any personal penalty

imposed on such director.

90. Notwithstanding any contract to the contrary and any other law for the time being

in force, where any firm is liable to pay any tax, interest or penalty under this Act, the firm and

each of the partners of the firm shall, jointly and severally, be liable for such payment:

Provided that where any partner retires from the firm, he or the firm, shall intimate the

date of retirement of the said partner to the Commissioner by a notice in that behalf in writing

and such partner shall be liable to pay tax, interest or penalty due up to the date of his

retirement whether determined or not, on that date:

Provided further that if no such intimation is given within one month from the date of

retirement, the liability of such partner under the first proviso shall continue until the date on

which such intimation is received by the Commissioner.

91. Where the business in respect of which any tax, interest or penalty is payable

under this Act is carried on by any guardian, trustee or agent of a minor or other incapacitated

person on behalf of and for the benefit of such minor or other incapacitated person, the tax,

interest or penalty shall be levied upon and recoverable from such guardian, trustee or agent

in like manner and to the same extent as it would be determined and recoverable from any

such minor or other incapacitated person, as if he were a major or capacitated person and as

if he were conducting the business himself, and all the provisions of this Act or the rules

made thereunder shall apply accordingly.

92. Where the estate or any portion of the estate of a taxable person owning a business

in respect of which any tax, interest or penalty is payable under this Act is under the control

of the Court of Wards, the Administrator General, the Official Trustee or any receiver or

manager (including any person, whatever be his designation, who in fact manages the

business) appointed by or under any order of a court, the tax, interest or penalty shall be

levied upon and be recoverable from such Court of Wards, Administrator General, Official

Trustee, receiver or manager in like manner and to the same extent as it would be determined

and be recoverable from the taxable person as if he were conducting the business himself,

and all the provisions of this Act or the rules made thereunder shall apply accordingly.

93. (1) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016,

where a person, liable to pay tax, interest or penalty under this Act, dies, then––

(a) if a business carried on by the person is continued after his death by his legal

representative or any other person, such legal representative or other person, shall be

liable to pay tax, interest or penalty due from such person under this Act; and

(b) if the business carried on by the person is discontinued, whether before or

after his death, his legal representative shall be liable to pay, out of the estate of the

deceased, to the extent to which the estate is capable of meeting the charge, the tax,

interest or penalty due from such person under this Act,

whether such tax, interest or penalty has been determined before his death but has remained

unpaid or is determined after his death.

Liability of

partners of

firm to pay

tax.

Liability of

guardians,

trustees, etc.

Liability of

Court of

Wards, etc.

31of 2016.

Special

provisions

regarding

liability to

pay tax,

interest or

penalty in

certain cases.

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(2) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, where a

taxable person, liable to pay tax, interest or penalty under this Act, is a Hindu Undivided

Family or an association of persons and the property of the Hindu Undivided Family or the

association of persons is partitioned amongst the various members or groups of members,

then, each member or group of members shall, jointly and severally, be liable to pay the tax,

interest or penalty due from the taxable person under this Act up to the time of the partition

whether such tax, penalty or interest has been determined before partition but has remained

unpaid or is determined after the partition.

(3) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, where a

taxable person, liable to pay tax, interest or penalty under this Act, is a firm, and the firm is

dissolved, then, every person who was a partner shall, jointly and severally, be liable to pay

the tax, interest or penalty due from the firm under this Act up to the time of dissolution

whether such tax, interest or penalty has been determined before the dissolution, but has

remained unpaid or is determined after dissolution.

(4) Save as otherwise provided in the Insolvency and Bankruptcy Code, 2016, where a

taxable person liable to pay tax, interest or penalty under this Act,––

(a) is the guardian of a ward on whose behalf the business is carried on by the

guardian; or

(b) is a trustee who carries on the business under a trust for a beneficiary,

then, if the guardianship or trust is terminated, the ward or the beneficiary shall be liable to

pay the tax, interest or penalty due from the taxable person 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 persons or a Hindu

Undivided Family and such firm, association or family has discontinued business––

(a) the tax, interest or penalty payable under this Act by such firm, association or

family up to the date of such discontinuance may be determined as if no such

discontinuance had taken place; and

(b) every person who, at the time of such discontinuance, was a partner of such

firm, or a member of such association or family, shall, notwithstanding such

discontinuance, jointly and severally, be liable for the payment of tax and interest

determined and penalty imposed and payable by such firm, association or family,

whether such tax and interest has been determined or penalty imposed prior to or after

such discontinuance and subject as aforesaid, the provisions of this Act shall, so far

as may be, apply as if every such person or partner or member were himself a taxable

person.

(2) Where a change has occurred in the constitution of a firm or an association of

persons, the partners of the firm or members of association, as it existed before and as it

exists after the reconstitution, shall, without prejudice to the provisions of section 90, jointly

and severally, be liable to pay tax, interest or penalty due from such firm or association for

any period before its reconstitution.

(3) The provisions of sub-section (1) shall, so far as may be, apply where the taxable

person, being a firm or association of persons is dissolved or where the taxable person, being

a Hindu Undivided Family, has effected partition with respect to the business carried on by

it and accordingly references in that sub-section to discontinuance shall be construed as

reference to dissolution or to partition.

31 of 2016.

Liability in

other cases.

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Explanation.––For the purposes of this Chapter,––

(i) a “Limited Liability Partnership” formed and registered under the 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.

CHAPTER XVII

ADVANCE RULING

95. In this Chapter, unless the context otherwise requires,––

(a) “advance ruling” means a decision provided by the Authority or the Appellate

Authority to an applicant on matters or on questions specified in sub-section (2) of

section 97 or sub-section (1) of section 100, in relation to the supply of goods or

services or both being undertaken or proposed to be undertaken by the applicant;

(b) “Appellate Authority” means the Appellate Authority for Advance Ruling

referred to in section 99;

under this Act;

(d) “application” means an application made to the Authority under

sub-section (1) of section 97;

(e) “Authority” means the Authority for Advance Ruling referred to in

section 96.

96. Subject to the provisions of this Chapter, for the purposes of this Act, the Authority

for advance ruling constituted under the provisions of a State Goods and Services Tax Act or

Union Territory Goods and Services Tax Act shall be deemed to be the Authority for advance

ruling in respect of that State or Union territory.

97. (1) An applicant desirous of obtaining an advance ruling under this Chapter may

make an application in such form and manner and accompanied by such fee as may be

prescribed, stating the question on which the advance ruling is sought.

(2) The question on which the advance ruling is sought under this Act, shall be in

respect of,––

(a) classification of any goods or services or both;

(b) applicability of a notification issued under the provisions of this Act;

(d) admissibility of input tax credit of tax paid or deemed to have been paid;

(e) determination of the liability to pay tax on any goods or services or both;

(f) whether applicant is required to be registered;

(g) whether any particular thing done by the applicant with respect to any goods

or services or both amounts to or results in a supply of goods or services or both,

within the meaning of that term.

98. (1) On receipt of an application, the Authority shall cause a copy thereof to be

forwarded to the concerned officer and, if necessary, call upon him to furnish the relevant

records:

Provided that where any records have been called for by the Authority in any case,

such records shall, as soon as possible, be returned to the said concerned officer.

(2) The Authority may, after examining the application and the records called for and

after hearing the applicant or his authorised representative and the concerned officer or his

authorised representative, by order, either admit or reject the application:

6 of 2009.

Definitions.

Authority for

advance

ruling.

Application

for advance

ruling.

Procedure on

receipt of

application.

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Provided that the Authority shall not admit the application where the question raised

in the application is already pending or decided in any proceedings in the case of an applicant

under any of the provisions of this Act:

Provided further that no application shall be rejected under this sub-section unless an

opportunity of hearing has been given to the applicant:

Provided also that where the application is rejected, the reasons for such rejection

shall be specified in the order.

(3) A copy of every order made under sub-section (2) shall be sent to the applicant and

to the concerned officer.

(4) Where an application is admitted under sub-section (2), the Authority shall, after

examining such further material as may be placed before it by the applicant or obtained by the

Authority and after providing an opportunity of being heard to the applicant or his authorised

representative as well as to the concerned officer or his authorised representative, pronounce

its advance ruling on the question specified in the application.

(5) Where the members of the Authority differ on any question on which the advance

ruling is sought, they shall state the point or points on which they differ and make a reference

to the Appellate Authority for hearing and decision on such question.

(6) The Authority shall pronounce its advance ruling in writing within ninety days

from the date of receipt of application.

(7) A copy of the advance ruling pronounced by the Authority duly signed by the

members and certified in such manner as may be prescribed shall be sent to the applicant, the

concerned officer and the jurisdictional officer after such pronouncement.

99. Subject to the provisions of this Chapter, for the purposes of this Act, the Appellate

Authority for Advance Ruling constituted under the provisions of a State Goods and Services

Tax Act or a Union Territory Goods and Services Tax Act shall be deemed to be the Appellate

Authority in respect of that State or Union territory.

100. (1) The concerned officer, the jurisdictional officer or an applicant aggrieved by

any advance ruling pronounced under sub-section (4) of section 98, may appeal to the

Appellate Authority.

(2) Every appeal under this section shall be filed within a period of thirty days from the

date on which the ruling sought to be appealed against is communicated to the concerned

officer, the jurisdictional officer and the applicant:

Provided that the Appellate Authority may, if it is satisfied that the appellant was

prevented by a sufficient cause from presenting the appeal within the said period of thirty

days, allow it to be presented within a further period not exceeding thirty days.

(3) Every appeal under this section shall be in such form, accompanied by such fee and

verified in such manner as may be prescribed.

101. (1) The Appellate Authority may, after giving the parties to the appeal or reference

an opportunity of being heard, pass such order as it thinks fit, confirming or modifying the

ruling appealed against or referred to.

(2) The order referred to in sub-section (1) shall be passed within a period of

ninety days from the date of filing of the appeal under section 100 or a reference under

sub-section (5) of section 98.

(3) Where the members of the Appellate Authority differ on any point or points referred

to in appeal or reference, it shall be deemed that no advance ruling can be issued in respect

of the question under the appeal or reference.

(4) A copy of the advance ruling pronounced by the Appellate Authority duly signed

by the Members and certified in such manner as may be prescribed shall be sent to the

Appellate

Authority for

Advance

Ruling.

Appeal to

Appellate

Authority.

Orders of

Appellate

Authority.

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applicant, the concerned officer, the jurisdictional officer and to the Authority after such

pronouncement.

102. The Authority or the Appellate Authority may amend any order passed by it

under section 98 or section 101, so as to rectify any error apparent on the face of the record,

if such error is noticed by the Authority or the Appellate Authority on its own accord, or is

brought to its notice by the concerned officer, the jurisdictional officer, the applicant or the

appellant within a period of six months from the date of the order:

Provided that no rectification which has the effect of enhancing the tax liability or

reducing the amount of admissible input tax credit shall be made unless the applicant or the

appellant has been given an opportunity of being heard.

103. (1) The advance ruling pronounced by the Authority or the Appellate Authority

under this Chapter shall be binding only—

(a) on the applicant who had sought it in respect of any matter referred to in

sub-section (2) of section 97 for advance ruling;

(b) on the concerned officer or the jurisdictional officer in respect of the applicant.

(2) The advance ruling referred to in sub-section (1) shall be binding unless the law,

facts or circumstances supporting the original advance ruling have changed.

104. (1) Where the Authority or the Appellate Authority finds that advance

ruling pronounced by it under sub-section (4) of section 98 or under sub-section (1) of

section 101 has been obtained by the applicant or the appellant by fraud or suppression of

material facts or misrepresentation of facts, it may, by order, declare such ruling to be void

ab-initio and thereupon all the provisions of this Act or the rules made thereunder shall

apply to the applicant or the appellant as if such advance ruling had never been made:

Provided that no order shall be passed under this sub-section unless an opportunity

of being heard has been given to the applicant or the appellant.

Explanation.––The period beginning with the date of such advance ruling and ending

with the date of order under this sub-section shall be excluded while computing the period

specified in sub-sections (2) and (10) of section 73 or sub-sections (2) and (10) of

section 74.

(2) A copy of the order made under sub-section (1) shall be sent to the applicant, the

concerned officer and the jurisdictional officer.

105. (1) The Authority or the Appellate Authority shall, for the purpose of exercising

its powers regarding—

(a) discovery and inspection;

(b) enforcing the attendance of any person and examining him on oath;

and other records,

have all the powers of a civil court under the Code of Civil Procedure, 1908.

(2) The Authority or the Appellate Authority shall be deemed to be a civil court for the

purposes of section 195, but not for the purposes of Chapter XXVI of the Code of Criminal

Procedure, 1973, and every proceeding before the Authority or the Appellate Authority shall

be deemed to be a judicial proceedings within the meaning of sections 193 and 228, and for

the purpose of section 196 of the Indian Penal Code.

106. The Authority or the Appellate Authority shall, subject to the provisions of this

Chapter, have power to regulate its own procedure.

Rectification

of advance

ruling.

Applicability

of advance

ruling.

Advance

ruling to be

void in

certain

circumstances.

5 of 1908.

Powers of

Authority

and Appellate

Authority.

2 of 1974.

45 of 1860.

Procedure of

Authority and

Appellate

Authority.

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CHAPTER XVIII

APPEALS AND REVISION

107. (1) Any person aggrieved by any decision or order passed under this Act or the

State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act by an

adjudicating authority may appeal to such Appellate Authority as may be prescribed within

three months from the date on which the said decision or order is communicated to such

person.

(2) The Commissioner may, on his own motion, or upon request from the Commissioner

of State tax or the Commissioner of Union territory tax, call for and examine the record of any

proceedings in which an adjudicating authority has passed any decision or order under this

Act or the State Goods and Services Tax Act or the Union Territory Goods and Services Tax

Act, for the purpose of satisfying himself as to the legality or propriety of the said decision

or order and may, by order, direct any officer subordinate to him to apply to the Appellate

Authority within six months from the date of communication of the said decision or order for

the determination of such points arising out of the said decision or order as may be specified

by the Commissioner in his order.

(3) Where, in pursuance of an order under sub-section (2), the authorised officer

makes an application to the Appellate Authority, such application shall be dealt with by the

Appellate Authority as if it were an appeal made against the decision or order of the

adjudicating authority and such authorised officer were an appellant and the provisions of

this Act relating to appeals shall apply to such application.

(4) The Appellate Authority may, if he is satisfied that the appellant was prevented by

sufficient cause from presenting the appeal within the aforesaid period of three months or six

months, as the case may be, allow it to be presented within a further period of one month.

(5) Every appeal under this section shall be in such form and shall be verified in such

manner as may be prescribed.

(6) No appeal shall be filed under sub-section (1), unless the appellant has paid—

(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising

from the impugned order, as is admitted by him; and

(b) a sum equal to ten per cent. of the remaining amount of tax in dispute arising

from the said order, in relation to which the appeal has been filed.

(7) Where the appellant has paid the amount under sub-section (6), the recovery

proceedings for the balance amount shall be deemed to be stayed.

(8) The Appellate Authority shall give an opportunity to the appellant of being heard.

(9) The Appellate Authority may, if sufficient cause is shown at any stage of hearing of

an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for

reasons to be recorded in writing:

Provided that no such adjournment shall be granted more than three times to a party

during hearing of the appeal.

(10) The Appellate Authority may, at the time of hearing of an appeal, allow an appellant

to add any ground of appeal not specified in the grounds of appeal, if it is satisfied that the

omission of that ground from the grounds of appeal was not wilful or unreasonable.

(11) The Appellate Authority shall, after making such further inquiry as may be

necessary, pass such order, as it thinks just and proper, confirming, modifying or annulling

the decision or order appealed against but shall not refer the case back to the adjudicating

authority that passed the said decision or order:

Appeals to

Appellate

Authority.

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Provided that an order enhancing any fee or penalty or fine in lieu of confiscation or

confiscating goods of greater value or reducing the amount of refund or input tax credit shall

not be passed unless the appellant has been given a reasonable opportunity of showing

cause against the proposed order:

Provided further that where the Appellate Authority is of the opinion that any tax has

not been paid or short-paid or erroneously refunded, or where input tax credit has been

wrongly availed or utilised, no order requiring the appellant to pay such tax or input tax credit

shall be passed unless the appellant is given notice to show cause against the proposed

order and the order is passed within the time limit specified under section 73 or

section 74.

(12) The order of the Appellate Authority disposing of the appeal shall be in writing

and shall state the points for determination, the decision thereon and the reasons for such

decision.

(13) The Appellate Authority shall, where it is possible to do so, hear and decide every

appeal within a period of one year from the date on which it is filed:

Provided that where the issuance of order is stayed by an order of a court or Tribunal,

the period of such stay shall be excluded in computing the period of one year.

(14) On disposal of the appeal, the Appellate Authority shall communicate the order

passed by it to the appellant, respondent and to the adjudicating authority.

(15) A copy of the order passed by the Appellate Authority shall also be sent to the

jurisdictional Commissioner or the authority designated by him in this behalf and the

jurisdictional Commissioner of State tax or Commissioner of Union Territory Tax or an authority

designated by him in this behalf.

(16) Every order passed under this section shall, subject to the provisions of

section 108 or section 113 or section 117 or section 118 be final and binding on the parties.

108. (1) Subject to the provisions of section 121 and any rules made thereunder, the

Revisional Authority may, on his own motion, or upon information received by him or on

request from the Commissioner of State tax, or the Commissioner of Union territory tax, call

for and examine the record of any proceedings, and if he considers that any decision or order

passed under this Act or under the State Goods and Services Tax Act or the Union Territory

Goods and Services Tax Act by any officer subordinate to him is erroneous in so far as it is

prejudicial to the interest of revenue and is illegal or improper or has not taken into account

certain material facts, whether available at the time of issuance of the said order or not or in

consequence of an observation by the Comptroller and Auditor General of India, he may, if

necessary, stay the operation of such decision or order for such period as he deems fit and

after giving the person concerned an opportunity of being heard and after making such

further inquiry as may be necessary, pass such order, as he thinks just and proper, including

enhancing or modifying or annulling the said decision or order.

(2) The Revisional Authority shall not exercise any power under sub-section (1), if—

(a) the order has been subject to an appeal under section 107 or section 112 or

section 117 or section 118; or

(b) the period specified under sub-section (2) of section 107 has not yet expired

or more than three years have expired after the passing of the decision or order sought

to be revised; or

stage; or

(d) the order has been passed in exercise of the powers under sub-section (1):

Powers of

Revisional

Authority.

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Provided that the Revisional Authority may pass an order under sub-section (1) on

any point which has not been raised and decided in an appeal referred to in clause (a) of

sub-section (2), before the expiry of a period of one year from the date of the order in such

appeal or before the expiry of a period of three years referred to in clause (b) of that

sub-section, whichever is later.

(3) Every order passed in revision under sub-section (1) shall, subject to the provisions

of section 113 or section 117 or section 118, be final and binding on the parties.

(4) If the said decision or order involves an issue on which the Appellate Tribunal or

the High Court has given its decision in some other proceedings and an appeal to the High

Court or the Supreme Court against such decision of the Appellate Tribunal or the High

Court is pending, the period spent between the date of the decision of the Appellate Tribunal

and the date of the decision of the High Court or the date of the decision of the High Court

and the date of the decision of the Supreme Court shall be excluded in computing the period

of limitation referred to in clause (b) of sub-section (2) where proceedings for revision have

been initiated by way of issue of a notice under this section.

(5) Where the issuance of an order under sub-section (1) is stayed by the order of a

court or Appellate Tribunal, the period of such stay shall be excluded in computing the

period of limitation referred to in clause (b) of sub-section (2).

(6) For the purposes of this section, the term,––

(i) “record” shall include all records relating to any proceedings under this Act

available at the time of examination by the Revisional Authority;

(ii) “decision” shall include intimation given by any officer lower in rank than

the Revisional Authority.

109. (1) The Government shall, on the recommendations of the Council, by notification,

constitute with effect from such date as may be specified therein, an Appellate Tribunal

known as the Goods and Services Tax Appellate Tribunal for hearing appeals against the

orders passed by the Appellate Authority or the Revisional Authority.

(2) The powers of the Appellate Tribunal shall be exercisable by the National Bench

and Benches thereof (hereinafter in this Chapter referred to as “Regional Benches”), State

Bench and Benches thereof (hereafter in this Chapter referred to as “Area Benches”).

(3) The National Bench of the Appellate Tribunal shall be situated at New Delhi which

shall be presided over by the President and shall consist of one Technical Member (Centre)

and one Technical Member (State).

(4) The Government shall, on the recommendations of the Council, by notification,

constitute such number of Regional Benches as may be required and such Regional Benches

shall consist of a Judicial Member, one Technical Member (Centre) and one Technical Member

(State).

(5) The National Bench or Regional Benches of the Appellate Tribunal shall have

jurisdiction to hear appeals against the orders passed by the Appellate Authority or the

Revisional Authority in the cases where one of the issues involved relates to the place of

supply.

(6) The Government shall, by notification, specify for each State or Union territory, a

Bench of the Appellate Tribunal (hereafter in this Chapter, referred to as “State Bench”) for

exercising the powers of the Appellate Tribunal within the concerned State or Union territory:

Provided that the Government shall, on receipt of a request from any State Government,

constitute such number of Area Benches in that State, as may be recommended by the

Council:

Constitution

of Appellate

Tribunal and

Benches

thereof.

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Provided further that the Government may, on receipt of a request from any State, or on

its own motion for a Union territory, notify the Appellate Tribunal in a State to act as the

Appellate Tribunal for any other State or Union territory, as may be recommended by the

Council, subject to such terms and conditions as may be prescribed.

(7) The State Bench or Area Benches shall have jurisdiction to hear appeals against

the orders passed by the Appellate Authority or the Revisional Authority in the cases

involving matters other than those referred to in sub-section (5).

(8) The President and the State President shall, by general or special order, distribute

the business or transfer cases among Regional Benches or, as the case may be, Area Benches

in a State.

(9) Each State Bench and Area Benches of the Appellate Tribunal shall consist of a

Judicial Member, one Technical Member (Centre) and one Technical Member (State) and the

State Government may designate the senior most Judicial Member in a State as the State

President.

(10) In the absence of a Member in any Bench due to vacancy or otherwise, any appeal

may, with the approval of the President or, as the case may be, the State President, be heard

by a Bench of two Members:

Provided that any appeal where the tax or input tax credit involved or the difference in

tax or input tax credit involved or the amount of fine, fee or penalty determined in any order

appealed against, does not exceed five lakh rupees and which does not involve any question

of law may, with the approval of the President and subject to such conditions as may be

prescribed on the recommendations of the Council, be heard by a bench consisting of a

single member.

(11) If the Members of the National Bench, Regional Benches, State Bench or Area

Benches differ in opinion on any point or points, it shall be decided according to the opinion

of the majority, if there is a majority, but if the Members are equally divided, they shall state

the point or points on which they differ, and the case shall be referred by the President or as

the case may be, State President for hearing on such point or points to one or more of the

other Members of the National Bench, Regional Benches, State Bench or Area Benches and

such point or points shall be decided according to the opinion of the majority of Members

who have heard the case, including those who first heard it.

(12) The Government, in consultation with the President may, for the administrative

convenience, transfer—

(a) any Judicial Member or a Member Technical (State) from one Bench to another

Bench, whether National or Regional; or

(b) any Member Technical (Centre) from one Bench to another Bench, whether

National, Regional, State or Area.

(13) The State Government, in consultation with the State President may, for the

administrative convenience, transfer a Judicial Member or a Member Technical (State) from

one Bench to another Bench within the State.

(14) No act or proceedings of the Appellate Tribunal shall be questioned or shall be

invalid merely on the ground of the existence of any vacancy or defect in the constitution of

the Appellate Tribunal.

110. (1) A person shall not be qualified for appointment as—

(a) the President, unless he has been a Judge of the Supreme Court or is or has

been the Chief Justice of a High Court, or is or has been a Judge of a High Court for a

period not less than five years;

(b) a Judicial Member, unless he—

(i) has been a Judge of the High Court; or

(ii) is or has been a District Judge qualified to be appointed as a Judge of

a High Court; or

President and

Members of

Appellate

Tribunal,

their

qualification,

appointment,

conditions of

service, etc.

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(iii) is or has been a Member of Indian Legal Service and has held a post

not less than Additional Secretary for three years;

Revenue (Customs and Central Excise) Service, Group A, and has completed at least

fifteen years of service in Group A;

(d) a Technical Member (State) unless he is or has been an officer of the State

Government not below the rank of Additional Commissioner of Value Added Tax or the

State goods and services tax or such rank as may be notified by the concerned State

Government on the recommendations of the Council with at least three years of

experience in the administration of an existing law or the State Goods and Services Tax

Act or in the field of finance and taxation.

(2) The President and the Judicial Members of the National Bench and the Regional

Benches shall be appointed by the Government after consultation with the Chief Justice of

India or his nominee:

Provided that in the event of the occurrence of any vacancy in the office of the

President by reason of his death, resignation or otherwise, the senior most Member of the

National Bench shall act as the President until the date on which a new President, appointed

in accordance with the provisions of this Act to fill such vacancy, enters upon his office:

Provided further that where the President is unable to discharge his functions owing

to absence, illness or any other cause, the senior most Member of the National Bench shall

discharge the functions of the President until the date on which the President resumes his

duties.

(3) The Technical Member (Centre) and Technical Member (State) of the National

Bench and Regional Benches shall be appointed by the Government on the recommendations

of a Selection Committee consisting of such persons and in such manner as may be prescribed.

(4) The Judicial Member of the State Bench or Area Benches shall be appointed by the

State Government after consultation with the Chief Justice of the High Court of the State or

his nominee.

(5) The Technical Member (Centre) of the State Bench or Area Benches shall be

appointed by the Central Government and Technical Member (State) of the State Bench or

Area Benches shall be appointed by the State Government in such manner as may be

prescribed.

(6) No appointment of the Members of the Appellate Tribunal shall be invalid merely

by the reason of any vacancy or defect in the constitution of the Selection Committee.

(7) Before appointing any person as the President or Members of the Appellate Tribunal,

the Central Government or, as the case may be, the State Government, shall satisfy itself that

such person does not have any financial or other interests which are likely to prejudicially

affect his functions as such President or Member.

(8) The salary, allowances and other terms and conditions of service of the President,

State President and the Members of the Appellate Tribunal shall be such as may be prescribed:

Provided that neither salary and allowances nor other terms and conditions of service

of the President, State President or Members of the Appellate Tribunal shall be varied to their

disadvantage after their appointment.

(9) The President of the Appellate Tribunal shall hold office for a term of three years

from the date on which he enters upon his office, or until he attains the age of seventy years,

whichever is earlier and shall be eligible for reappointment.

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(10) The Judicial Member of the Appellate Tribunal and the State President shall hold

office for a term of three years from the date on which he enters upon his office, or until he

attains the age of sixty-five years, whichever is earlier and shall be eligible for

reappointment.

(11) The Technical Member (Centre) or Technical Member (State) of the Appellate

Tribunal shall hold office for a term of five years from the date on which he enters upon his

office, or until he attains the age of sixty-five years, whichever is earlier and shall be eligible

for reappointment.

(12) The President, State President or any Member may, by notice in writing under his

hand addressed to the Central Government or, as the case may be, the State Government

resign from his office:

Provided that the President, State President or Member shall continue to hold office

until the expiry of three months from the date of receipt of such notice by the Central

Government, or, as the case may be, the State Government or until a person duly appointed

as his successor enters upon his office or until the expiry of his term of office, whichever is

the earliest.

(13) The Central Government may, after consultation with the Chief Justice of India, in

case of the President, Judicial Members and Technical Members of the National Bench,

Regional Benches or Technical Members (Centre) of the State Bench or Area Benches, and

the State Government may, after consultation with the Chief Justice of High Court, in case of

the State President, Judicial Members, Technical Members (State) of the State Bench or Area

Benches, may remove from the office such President or Member, who—

(a) has been adjudged an insolvent; or

(b) has been convicted of an offence which, in the opinion of such Government

involves moral turpitude; or

State President or Member; or

(d) has acquired such financial or other interest as is likely to affect prejudicially

his functions as such President, State President or Member; or

(e) has so abused his position as to render his continuance in office prejudicial

to the public interest:

Provided that the President, State President or the Member shall not be removed

on any of the grounds specified in clauses (d) and (e), unless he has been informed of

the charges against him and has been given an opportunity of being heard.

(14) Without prejudice to the provisions of sub-section (13),––

(a) the President or a Judicial and Technical Member of the National Bench or

Regional Benches, Technical Member (Centre) of the State Bench or Area Benches

shall not be removed from their office except by an order made by the Central Government

on the ground of proved misbehaviour or incapacity after an inquiry made by a Judge

of the Supreme Court nominated by the Chief Justice of India on a reference made to

him by the Central Government and of which the President or the said Member had

been given an opportunity of being heard;

(b) the Judicial Member or Technical Member (State) of the State Bench or Area

Benches shall not be removed from their office except by an order made by the State

Government on the ground of proved misbehaviour or incapacity after an inquiry

made by a Judge of the concerned High Court nominated by the Chief Justice of the

concerned High Court on a reference made to him by the State Government and of

which the said Member had been given an opportunity of being heard.

(15) The Central Government, with the concurrence of the Chief Justice of India, may

suspend from office, the President or a Judicial or Technical Members of the National Bench

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or the Regional Benches or the Technical Member (Centre) of the State Bench or Area

Benches in respect of whom a reference has been made to the Judge of the Supreme Court

under sub-section (14).

(16) The State Government, with the concurrence of the Chief Justice of the High

Court, may suspend from office, a Judicial Member or Technical Member (State) of the State

Bench or Area Benches in respect of whom a reference has been made to the Judge of the

High Court under sub-section (14).

(17) Subject to the provisions of article 220 of the Constitution, the President, State

President or other Members, on ceasing to hold their office, shall not be eligible to appear, act

or plead before the National Bench and the Regional Benches or the State Bench and the

Area Benches thereof where he was the President or, as the case may be, a Member.

111. (1) The Appellate Tribunal shall not, while disposing of any proceedings before it

or an appeal before it, be bound by the procedure laid down in the Code of Civil Procedure,

1908, but shall be guided by the principles of natural justice and subject to the other provisions

of this Act and the rules made thereunder, the Appellate Tribunal shall have power to regulate

its own procedure.

(2) The Appellate Tribunal shall, for the purposes of discharging its functions under

this Act, have the same powers as are vested in a civil court under the Code of Civil Procedure,

1908 while trying a suit in respect of the following matters, namely:—

(a) summoning and enforcing the attendance of any person and examining him

on oath;

(b) requiring the discovery and production of documents;

(d) subject to the provisions of sections 123 and 124 of the Indian Evidence

Act, 1872, requisitioning any public record or document or a copy of such record or

document from any office;

(e) issuing commissions for the examination of witnesses or documents;

(f) dismissing a representation for default or deciding it ex parte;

(g) setting aside any order of dismissal of any representation for default or any

order passed by it ex parte; and

(h) any other matter which may be prescribed.

(3) Any order made by the Appellate Tribunal may be enforced by it in the same

manner as if it were a decree made by a court in a suit pending therein, and it shall be lawful

for the Appellate Tribunal to send for execution of its orders to the court within the local

limits of whose jurisdiction,—

(a) in the case of an order against a company, the registered office of the company

is situated; or

(b) in the case of an order against any other person, the person concerned

voluntarily resides or carries on business or personally works for gain.

(4) All proceedings before the Appellate Tribunal shall be deemed to be judicial

proceedings within the meaning of sections 193 and 228, and for the purposes of section 196

of the Indian Penal Code, and the Appellate Tribunal shall be deemed to be civil court for the

purposes of section 195 and Chapter XXVI of the Code of Criminal Procedure, 1973.

112. (1) Any person aggrieved by an order passed against him under section 107 or

section 108 of this Act or the State Goods and Services Tax Act or the Union Territory

5 of 1908.

Procedure

before

Appellate

Tribunal.

5 of 1908.

1 of 1872.

2 of 1974.

Appeals to

Appellate

Tribunal.

45 of 1860.

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Goods and Services Tax Act may appeal to the Appellate Tribunal against such order within

three months from the date on which the order sought to be appealed against is communicated

to the person preferring the appeal.

(2) The Appellate Tribunal may, in its discretion, refuse to admit any such appeal

where the tax or input tax credit involved or the difference in tax or input tax credit

involved or the amount of fine, fee or penalty determined by such order, does not exceed fifty

thousand rupees.

(3) The Commissioner may, on his own motion, or upon request from the Commissioner

of State tax or Commissioner of Union territory tax, call for and examine the record of any

order passed by the Appellate Authority or the Revisional Authority under this Act or the

State Goods and Services Tax Act or the Union Territory Goods and Services Tax Act for the

purpose of satisfying himself as to the legality or propriety of the said order and may, by

order, direct any officer subordinate to him to apply to the Appellate Tribunal within six

months from the date on which the said order has been passed for determination of such

points arising out of the said order as may be specified by the Commissioner in his order.

(4) Where in pursuance of an order under sub-section (3) the authorised officer makes

an application to the Appellate Tribunal, such application shall be dealt with by the Appellate

Tribunal as if it were an appeal made against the order under sub-section (11) of section 107

or under sub-section (1) of section 108 and the provisions of this Act shall apply to such

application, as they apply in relation to appeals filed under sub-section (1).

(5) On receipt of notice that an appeal has been preferred under this section, the party

against whom the appeal has been preferred may, notwithstanding that he may not have

appealed against such order or any part thereof, file, within forty-five days of the receipt of

notice, a memorandum of cross-objections, verified in the prescribed manner, against any

part of the order appealed against and such memorandum shall be disposed of by the

Appellate Tribunal, as if it were an appeal presented within the time specified in

sub-section (1).

(6) The Appellate Tribunal may admit an appeal within three months after the expiry of

the period referred to in sub-section (1), or permit the filing of a memorandum of

cross-objections within forty-five days after the expiry of the period referred to in

sub-section (5) if it is satisfied that there was sufficient cause for not presenting it within that

period.

(7) An appeal to the Appellate Tribunal shall be in such form, verified in such manner

and shall be accompanied by such fee, as may be prescribed.

(8) No appeal shall be filed under sub-section (1), unless the appellant has paid––

(a) in full, such part of the amount of tax, interest, fine, fee and penalty arising

from the impugned order, as is admitted by him, and

(b) a sum equal to twenty per cent. of the remaining amount of tax in dispute, in

addition to the amount paid under sub-section (6) of section 107, arising from the said

order, in relation to which the appeal has been filed.

(9) Where the appellant has paid the amount as per sub-section (8), the recovery

proceedings for the balance amount shall be deemed to be stayed till the disposal of the

appeal.

(10) Every application made before the Appellate Tribunal,—

(a) in an appeal for rectification of error or for any other purpose; or

(b) for restoration of an appeal or an application,

shall be accompanied by such fees as may be prescribed.

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113. (1) The Appellate Tribunal may, after giving the parties to the appeal

an opportunity of being heard, pass such orders thereon as it thinks fit, confirming, modifying

or annulling the decision or order appealed against or may refer the case back to the Appellate

Authority, or the Revisional Authority or to the original adjudicating authority, with such

directions as it may think fit, for a fresh adjudication or decision after taking additional

evidence, if necessary.

(2) The Appellate Tribunal may, if sufficient cause is shown, at any stage of hearing of

an appeal, grant time to the parties or any of them and adjourn the hearing of the appeal for

reasons to be recorded in writing:

Provided that no such adjournment shall be granted more than three times to a party

during hearing of the appeal.

(3) The Appellate Tribunal may amend any order passed by it under sub-section (1) so

as to rectify any error apparent on the face of the record, if such error is noticed by it on its

own accord, or is brought to its notice by the Commissioner or the Commissioner of State tax

or the Commissioner of the Union territory tax or the other party to the appeal within a period

of three months from the date of the order:

Provided that no amendment which has the effect of enhancing an assessment or

reducing a refund or input tax credit or otherwise increasing the liability of the other party,

shall be made under this sub-section, unless the party has been given an opportunity of

being heard.

(4) The Appellate Tribunal shall, as far as possible, hear and decide every appeal

within a period of one year from the date on which it is filed.

(5) The Appellate Tribunal shall send a copy of every order passed under this section

to the Appellate Authority or the Revisional Authority, or the original adjudicating authority,

as the case may be, the appellant and the jurisdictional Commissioner or the Commissioner of

State tax or the Union territory tax.

(6) Save as provided in section 117 or section 118, orders passed by the Appellate

Tribunal on an appeal shall be final and binding on the parties.

114. The President shall exercise such financial and administrative powers over the

National Bench and Regional Benches of the Appellate Tribunal as may be prescribed:

Provided that the President shall have the authority to delegate such of his financial

and administrative powers as he may think fit to any other Member or any officer of the

National Bench and Regional Benches, subject to the condition that such Member or officer

shall, while exercising such delegated powers, continue to act under the direction, control

and supervision of the President.

115. Where an amount paid by the appellant under sub-section (6) of section 107 or

sub-section (8) of section 112 is required to be refunded consequent to any order of the

Appellate Authority or of the Appellate Tribunal, interest at the rate specified under

section 56 shall be payable in respect of such refund from the date of payment of the amount

till the date of refund of such amount.

116. (1) Any person who is entitled or required to appear before an officer appointed

under this Act, or the Appellate Authority or the Appellate Tribunal in connection with any

proceedings under this Act, may, otherwise than when required under this Act to appear

personally for examination on oath or affirmation, subject to the other provisions of this

section, appear by an authorised representative.

(2) For the purposes of this Act, the expression “authorised representative” shall

mean a person authorised by the person referred to in sub-section (1) to appear on his

behalf, being—

(a) his relative or regular employee; or

Orders of

Appellate

Tribunal.

Financial and

administrative

powers of

President.

Interest on

refund of

amount paid

for admission

of appeal.

Appearance

by authorised

representative.

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(b) an advocate who is entitled to practice in any court in India, and who has not

been debarred from practicing before any court in India; or

holds a certificate of practice and who has not been debarred from practice; or

(d) a retired officer of the Commercial Tax Department of any State Government

or Union territory or of the Board who, during his service under the Government, had

worked in a post not below the rank than that of a Group-B Gazetted officer for a period

of not less than two years:

Provided that such officer shall not be entitled to appear before any proceedings

under this Act for a period of one year from the date of his retirement or resignation; or

(e) any person who has been authorised to act as a goods and services tax

practitioner on behalf of the concerned registered person.

(3) No person,—

(a) who has been dismissed or removed from Government service; or

(b) who is convicted of an offence connected with any proceedings under this

Act, the State Goods and Services Tax Act, the Integrated Goods and Services Tax Act

or the Union Territory Goods and Services Tax Act, or under the existing law or under

any of the Acts passed by a State Legislature dealing with the imposition of taxes on

sale of goods or supply of goods or services or both; or

(d) who has been adjudged as an insolvent,

shall be qualified to represent any person under sub-section (1)—

(i) for all times in case of persons referred to in clauses (a), (b) and (c); and

(ii) for the period during which the insolvency continues in the case of a person

referred to in clause (d).

(4) Any person who has been disqualified under the provisions of the State Goods and

Services Tax Act or the Union Territory Goods and Services Tax Act shall be deemed to be

disqualified under this Act.

117. (1) Any person aggrieved by any order passed by the State Bench or Area

Benches of the Appellate Tribunal may file an appeal to the High Court and the High Court

may admit such appeal, if it is satisfied that the case involves a substantial question of law.

(2) An appeal under sub-section (1) shall be filed within a period of one hundred and

eighty days from the date on which the order appealed against is received by the aggrieved

person and it shall be in such form, verified in such manner as may be prescribed:

Provided that the High Court may entertain an appeal after the expiry of the said period

if it is satisfied that there was sufficient cause for not filing it within such period.

(3) Where the High Court is satisfied that a substantial question of law is involved in

any case, it shall formulate that question and the appeal shall be heard only on the question

so formulated, and the respondents shall, at the hearing of the appeal, be allowed to argue

that the case does not involve such question:

Provided that nothing in this sub-section shall be deemed to take away or abridge the

power of the court to hear, for reasons to be recorded, the appeal on any other substantial

question of law not formulated by it, if it is satisfied that the case involves such question.

(4) The High Court shall decide the question of law so formulated and deliver such

judgment thereon containing the grounds on which such decision is founded and may

award such cost as it deems fit.

Appeal to

High Court.

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(5) The High Court may determine any issue which––

(a) has not been determined by the State Bench or Area Benches; or

(b) has been wrongly determined by the State Bench or Area Benches, by reason

of a decision on such question of law as herein referred to in sub-section (3).

(6) Where an appeal has been filed before the High Court, it shall be heard by a Bench

of not less than two Judges of the High Court, and shall be decided in accordance with the

opinion of such Judges or of the majority, if any, of such Judges.

(7) Where there is no such majority, the Judges shall state the point of law upon which

they differ and the case shall, then, be heard upon that point only, by one or more of the other

Judges of the High Court and such point shall be decided according to the opinion of the

majority of the Judges who have heard the case including those who first heard it.

(8) Where the High Court delivers a judgment in an appeal filed before it under this

section, effect shall be given to such judgment by either side on the basis of a certified copy

of the judgment.

(9) Save as otherwise provided in this Act, the provisions of the Code of Civil Procedure,

1908, relating to appeals to the High Court shall, as far as may be, apply in the case of appeals

under this section.

118. (1) An appeal shall lie to the Supreme Court—

(a) from any order passed by the National Bench or Regional Benches of the

Appellate Tribunal; or

(b) from any judgment or order passed by the High Court in an appeal made

under section 117 in any case which, on its own motion or on an application made by

or on behalf of the party aggrieved, immediately after passing of the judgment or order,

the High Court certifies to be a fit one for appeal to the Supreme Court.

(2) The provisions of the Code of Civil Procedure, 1908, relating to appeals to the

Supreme Court shall, so far as may be, apply in the case of appeals under this section as they

apply in the case of appeals from decrees of a High Court.

(3) Where the judgment of the High Court is varied or reversed in the appeal, effect

shall be given to the order of the Supreme Court in the manner provided in section 117 in the

case of a judgment of the High Court.

119. Notwithstanding that an appeal has been preferred to the High Court or the

Supreme Court, sums due to the Government as a result of an order passed by the National

or Regional Benches of the Appellate Tribunal under sub-section (1) of section 113 or an

order passed by the State Bench or Area Benches of the Appellate Tribunal under

sub-section (1) of section 113 or an order passed by the High Court under section 117, as the

case may be, shall be payable in accordance with the order so passed.

120. (1) The Board may, on the recommendations of the Council, from time to time,

issue orders or instructions or directions fixing such monetary limits, as it may deem fit, for

the purposes of regulating the filing of appeal or application by the officer of the central tax

under the provisions of this Chapter.

(2) Where, in pursuance of the orders or instructions or directions issued under

sub-section (1), the officer of the central tax has not filed an appeal or application against any

decision or order passed under the provisions of this Act, it shall not preclude such officer

of the central tax from filing appeal or application in any other case involving the same or