GST Jamku AIMiscellaneous transitional provisions.
Section 142(1)
Where any goods on which duty, if any, had been paid under the existing law at the time of removal thereof, not being earlier than six months prior to the appointed day, are returned to any place of business on or after the appointed day, the registered person shall be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other than a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer:
Provided that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply.
If any goods, on which duty was paid under the existing law, are returned to a place of business not earlier than six months before the appointed day, the registered person can apply for a refund of the duty paid. This applies when the return is made on or after the appointed day. The eligibility for a refund comes into play when the return is initiated by a person other than a registered person within six months from the appointed day. In such cases, the proper officer must be satisfied that the returned goods are identifiable.
However, if the return is made by a registered person, it is considered a supply, and no refund is applicable in such instances.
Additional Considerations
It's important to note that the refund eligibility is contingent upon the goods being returned within the stipulated six-month period. Beyond this timeframe, the provisions for refund may not apply.
Conclusion
In summary, Section 142(1) outlines the conditions under which a registered person can claim a refund for duty paid on goods under the existing law. The distinction between returns initiated by registered and non-registered persons is a key factor in determining refund eligibility. Understanding these provisions is crucial for businesses navigating the transitional period.
Section 142(2)
(a) Where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised upwards on or after the appointed day, the registered person who had removed or provided such goods or services or both shall issue to the recipient a supplementary invoice or debit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such supplementary invoice or debit note shall be deemed to have been issued in respect of an outward supply made under this Act;
(b) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised downwards on or after the appointed day, the registered person who had removed or provided such goods or services or both may issue to the recipient a credit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such credit note shall be deemed to have been issued in respect of an outward supply made under this Act:
Provided that the registered person shall be allowed to reduce his tax liability on account of issue of the credit note only if the recipient of the credit note has reduced his input tax credit corresponding to such reduction of tax liability.
Price Revision Upwards
If, as part of a contract agreed upon before the appointed day, the price of any goods or services increases after the appointed day, the registered person responsible for the goods or services must issue a supplementary invoice or debit note to the recipient within thirty days of the price revision. This document should contain prescribed particulars and will be considered issued for an outward supply under this Act.
Implications of Upward Price Revision
The supplementary invoice or debit note plays a crucial role in maintaining compliance with the Act, ensuring transparency in the revised pricing of goods or services.
Price Revision Downwards
Conversely, if the price of goods or services decreases in accordance with a pre-appointed day contract, the registered person can issue a credit note to the recipient within thirty days of the downward price revision. This credit note, containing prescribed particulars, is deemed to have been issued for an outward supply under this Act.
Condition for Tax Liability Reduction
To avail of a reduction in tax liability due to the issuance of a credit note, the registered person must ensure that the recipient has proportionately reduced their input tax credit corresponding to the tax liability reduction.
Ensuring Smooth Transitions
These provisions are vital in managing the financial aspects of transactions during a transitional period, providing a structured framework for handling price revisions and maintaining compliance with the applicable regulations.
Section 142(3)
Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub- section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944):
Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse:
Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act.
Refund Claims Processing
Every person who has filed a claim for a refund, whether it's before, on, or after the appointed day, will have their claim processed according to the rules of the existing law. This includes refunds for CENVAT credit, duty, tax, interest, or any other amount paid previously.
Cash Refund
Once the claim is processed, any amount owed to the person will be paid in cash. This is applicable even if the existing law has different provisions, except for the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944).
Refund Rejection and Lapse
If a claim for the refund of CENVAT credit is rejected, either partially or fully, the rejected amount will not be paid. It will lapse, meaning the person won't receive the money.
No Refund for Carried Forward Amounts
There won't be a refund for any CENVAT credit amount that has been carried forward under this Act and still has a balance as of the appointed day.
This section ensures a clear process for handling refund claims and specifies the outcomes for accepted and rejected claims.
Section 142(4)
Every claim for refund filed after the appointed day for refund of any duty or tax paid under existing law in respect of the goods or services exported before or after the appointed day, shall be disposed of in accordance with the provisions of the existing law:
Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse:
Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act.
When you ask for a refund after the appointed day for any duty or tax you paid under the old law for goods or services exported before or after the appointed day, it will be handled according to the old law. Here are some additional details:
Refund Process If your claim for a refund of CENVAT credit is entirely or partially rejected, the rejected amount will not be refunded. It will be considered lapsed.
No Refund in Certain Cases No refund will be allowed for any CENVAT credit amount if the remaining balance of that amount on the appointed day has been carried forward under this Act.
In essence, if you want a refund for duties or taxes paid before the new rules kicked in, the old regulations will still apply. It's important to note the specific conditions for CENVAT credit refund and the limitations outlined in the provisions.
Section 142(5)
Every claim filed by a person after the appointed day for refund of tax paid under the existing law in respect of services not provided shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944).
Claim for Refund After Appointed Day
If a person files a claim for a refund of tax paid under the existing law after the appointed day, and this pertains to services that were not provided, the claim will be processed following the existing law's provisions.
Disposal in Accordance with Existing Law
The disposal of such claims will align with the rules outlined in the existing law. This means that the procedures and criteria for refunds will be consistent with the legal framework in place before the appointed day.
Cash Payment of Accrued Amount
Any amount eventually determined as refundable to the individual will be paid in cash. This ensures that the claimant receives the refunded sum in a tangible form.
Exception to Central Excise Act
It's essential to note that this process deviates from the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944). In all other aspects, the refund will be handled according to the existing law, ensuring a streamlined and consistent approach to the refund process.
These provisions aim to facilitate the refund process for tax paid on services not provided under the previous legal framework.
Section 142(6)
(a) Every proceeding of appeal, review or reference relating to a claim for CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law, and any amount of credit found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944) and the amount rejected, if any, shall not be admissible as input tax credit under this Act:
Provided that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act;
(b) Every proceeding of appeal, review or reference relating to recovery of CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law and if any amount of credit becomes recoverable as a result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.
In this section, we discuss the transitional provisions related to proceedings of appeal, review, or reference concerning CENVAT credit claims under the existing law.
Proceedings of Appeal, Review, or Reference (Subsection a)
When it comes to proceedings initiated for CENVAT credit claims, whether before, on, or after the appointed day under the existing law, they will be handled in accordance with the provisions of the existing law. If the claimant is found eligible for credit, the amount will be refunded in cash, regardless of any contrary provisions in the existing law—except for the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944). However, any rejected amount will not be considered as admissible input tax credit under this Act.
It's important to note that no refund will be allowed for any CENVAT credit amount if the balance of that amount, as of the appointed day, has been carried forward under this Act.
Proceedings of Recovery (Subsection b)
Similarly, proceedings related to the recovery of CENVAT credit, whether initiated before, on, or after the appointed day under the existing law, will follow the provisions of the existing law. If any credit becomes recoverable due to such proceedings, unless recovered under the existing law, it will be collected as an arrear of tax under this Act. However, the amount recovered in this manner will not be considered as admissible input tax credit under this Act.
This section outlines the specific processes and conditions regarding CENVAT credit claims and recoveries during the transitional period, ensuring a smooth transition under the new Act.
Section 142(7)
(a) Every proceeding of appeal, review or reference relating to any output duty or tax liability initiated whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with the provisions of the existing law, and if any amount becomes recoverable as a result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of duty or tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.
(b) Every proceeding of appeal, review or reference relating to any output duty or tax liability initiated whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with the provisions of the existing law, and any amount found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944) and the amount rejected, if any, shall not be admissible as input tax credit under this Act.
In this section, we'll explore the provisions related to appeal, review, or reference concerning output duty or tax liability under the existing law, both before and after the appointed day.
Proceedings and Recovery
(a) Any ongoing proceedings of appeal, review, or reference tied to output duty or tax liability, initiated before, on, or after the appointed day under the existing law, will be concluded following the existing law's guidelines. If any amount becomes recoverable due to such proceedings and is not retrieved under the existing law, it will be collected as an arrear of duty or tax under this Act. However, any amount recovered in this manner will not be eligible for input tax credit under this Act.
Refund and Cash Payment
(b) Similar to subsection (a), every appeal, review, or reference linked to output duty or tax liability under the existing law will be addressed according to the existing law's provisions. If an amount is found to be payable to the claimant as a result of these proceedings, it will be refunded to the claimant in cash. This holds true even if the existing law has provisions stating otherwise, except for the conditions outlined in sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944). Conversely, any rejected amount will not be considered for input tax credit under this Act.
Conclusion
In summary, Section 142(7) deals with the continuation and resolution of proceedings related to output duty or tax liability, ensuring adherence to existing laws while also establishing guidelines for the recovery and refund of amounts under the new Act.
Section 142(8)
(a) Where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act;
(b) Where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded to him in cash under the said law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944) and the amount rejected, if any, shall not be admissible as input tax credit under this Act.
In this section, we'll discuss two scenarios related to tax, interest, fines, and penalties under the existing law.
(a) Recovery of Amounts
When there are ongoing assessment or adjudication proceedings—whether initiated before, on, or after the appointed day—resulting in a person owing tax, interest, fine, or penalty, and if these amounts are not collected under the existing law, they will be recovered as overdue taxes under the current Act. It's important to note that the recovered amount cannot be claimed as input tax credit under this Act.
(b) Refundable Amounts
Similarly, if assessment or adjudication proceedings under the existing law determine that a taxable person is eligible for a refund of tax, interest, fine, or penalty, such amounts will be refunded in cash under the existing law. However, the refunded amount, if any, which is rejected, will not be considered as eligible for input tax credit under this Act.
Impact on Businesses
In understanding these provisions, businesses need to be aware that certain amounts, if not recovered or refunded under the existing law, will be subject to recovery or refund processes outlined in the current Act. Additionally, businesses should take note of the limitations on claiming input tax credit for rejected amounts. Compliance with these provisions is crucial to avoid any financial implications.
Section 142(9)
(a) Where any return, furnished under the existing law, is revised after the appointed day and if, pursuant to such revision, any amount is found to be recoverable or any amount of CENVAT credit is found to be inadmissible, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act;
(b) Where any return, furnished under the existing law, is revised after the appointed day but within the time limit specified for such revision under the existing law and if, pursuant to such revision, any amount is found to be refundable or CENVAT credit is found to be admissible to any taxable person, the same shall be refunded to him in cash under the existing law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944) and the amount rejected, if any, shall not be admissible as input tax credit under this Act.
In this section, we'll discuss what happens when returns are revised under the existing law after the appointed day.
Recovery of Recoverable Amounts
(a) If, after the appointed day, a return filed under the existing law is revised and it's found that there's a recoverable amount or inadmissible CENVAT credit, that amount must be recovered. If it wasn't collected under the old law, it will be treated as an arrear of tax under this Act. Importantly, any amount recovered in this way cannot be claimed as input tax credit under this Act.
Refundable Amounts and Admissible CENVAT Credit
(b) If a return filed under the existing law is revised within the specified time limit after the appointed day, and it's found that there's a refundable amount or admissible CENVAT credit for a taxable person, that amount should be refunded in cash under the existing law. This applies even if the existing law has provisions to the contrary, except for the specific provisions mentioned in sub-section (2) of section 11B of the Central Excise Act, 1944 (1 of 1944). Any rejected amount, if applicable, cannot be claimed as input tax credit under this Act.
In summary, this section outlines the procedures and implications related to the revision of returns under the existing law after the appointed day.
Section 142(10)
Save as otherwise provided in this Chapter, the goods or services or both supplied on or after the appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax under the provisions of this Act.
Miscellaneous Transitional Provisions
In this section, we'll explore a provision under Section 142(10) that deals with the taxation of goods or services supplied in accordance with contracts made before the appointed day.
Goods and Services Tax Liability
Any goods or services provided on or after the appointed day, as part of a contract made before that day, will be subject to taxation under the rules outlined in this Act, unless specified otherwise in this chapter.
Understanding the Provision
To illustrate, let's consider a scenario where a contract for goods or services was agreed upon before the appointed day. If these goods or services are then supplied on or after the appointed day, they will be subject to taxation as per the regulations laid out in this Act.
By examining Section 142(10), we gain insight into how the Act addresses the tax implications of transactions that were initiated prior to the appointed day but concluded thereafter. This provision helps ensure a smooth transition in the taxation system for pre-existing contracts.
Section 142(11)
(a) Notwithstanding anything contained in section 12, no tax shall be payable on goods under this Act to the extent the tax was leviable on the said goods under the Value Added Tax Act of the State;
(b) Notwithstanding anything contained in section 13, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994 (32 of 1994);
(c) Where tax was paid on any supply both under the Value Added Tax Act and under Chapter V of the Finance Act, 1994 (32 of 1994), tax shall be leviable under this Act and the taxable person shall be entitled to take credit of value added tax or service tax paid under the existing law to the extent of supplies made after the appointed day and such credit shall be calculated in such manner as may be prescribed.
In this section, there are specific provisions related to the transition from the previous tax laws to the current one. Let's break it down:
(a) No Tax on Goods
Despite what is mentioned in section 12, there won't be any tax payable on goods under the current Act if the tax was already levied on those goods under the State's Value Added Tax Act.
(b) No Tax on Services
Similarly, as per section 13, there is no obligation to pay tax on services under the current Act if the tax was already levied on those services under Chapter V of the Finance Act, 1994 (32 of 1994).
(c) Credit for Double Taxation
In cases where tax was paid for a supply under both the Value Added Tax Act and Chapter V of the Finance Act, 1994, the taxable person can still claim credit under the current Act. This credit can be applied to supplies made after the appointed day. The exact calculation method for this credit will be determined as per the prescribed rules.
This section essentially ensures a smooth transition, preventing double taxation on goods and services while allowing for the appropriate crediting of taxes paid under the previous laws.
Section 142(12)
Where any goods sent on approval basis, not earlier than six months before the appointed day, are rejected or not approved by the buyer and returned to the seller on or after the appointed day, no tax shall be payable thereon if such goods are returned within six months from the appointed day:
Provided that the said period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months:
Provided further that the tax shall be payable by the person returning the goods if such goods are liable to tax under this Act, and are returned after a period specified in this sub-section:
Provided also that tax shall be payable by the person who has sent the goods on approval basis if such goods are liable to tax under this Act, and are not returned within a period specified in this sub-section.
When Goods on Approval Basis are Returned
If goods sent on approval basis, not earlier than six months before the appointed day, are rejected or not approved by the buyer and returned to the seller on or after the appointed day, no tax shall be payable on them if they are returned within six months from the appointed day.
Extension of Return Period
The Commissioner may, upon sufficient cause being shown, extend the period of six months for a further period not exceeding two months.
Tax Liability
Tax shall be payable by the person returning the goods if:
- Such goods are liable to tax under this Act, and
- They are returned after a period specified in this sub-section.
Tax Liability for Non-Returned Goods
Tax shall be payable by the person who sent the goods on approval basis if:
- The goods are liable to tax under this Act, and
- They are not returned within a period specified in this sub-section.
Section 142(13)
Where a supplier has made any sale of goods in respect of which tax was required to be deducted at source under any law of a State or Union territory relating to Value Added Tax and has also issued an invoice for the same before the appointed day, no deduction of tax at source under section 51 shall be made by the deductor under the said section where payment to the said supplier is made on or after the appointed day.
Explanation.—For the purposes of this Chapter, the expressions "capital goods", "Central Value Added Tax (CENVAT) credit", "first stage dealer", "second stage dealer", or "manufacture" shall have the same meaning as respectively assigned to them in the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder.
Miscellaneous Transitional Provisions
In this section, we'll discuss a particular provision, Section 142(13), related to the transition period during the implementation of a new law.
Deduction of Tax at Source and Sales of Goods
If a supplier has sold goods for which tax should have been deducted at source under a state or union territory's Value Added Tax law, and they have issued an invoice before the appointed day, there's a specific rule regarding tax deductions.
No Tax Deduction Under Section 51
After the appointed day, if the payment to the supplier is made on or after that day, the deductor (the one making the payment) doesn't need to deduct tax at source under Section 51 of the new law.
Understanding Key Terms
To grasp the nuances of this provision, it's essential to understand certain terms. In this context:
- Capital Goods: Refers to goods used for business purposes, often involving substantial investment.
- Central Value Added Tax (CENVAT) Credit: This term relates to the credit a business gets for the tax paid on inputs, allowing for a reduction in the tax liability.
- First Stage Dealer and Second Stage Dealer: These are terms used in the context of the supply chain, indicating the different stages of goods moving from manufacturers to retailers.
- Manufacture: This term carries the same meaning as defined in the Central Excise Act, 1944 (1 of 1944) or its related rules.
Understanding these expressions is crucial for interpreting the implications of Section 142(13) during the transitional phase.