MODEL GST LAW (Accounts and Records, Assessments, Demands and Recovery, Inspection )

1. MODEL GST LAW(Accounts and Records, Assessments, Demands and Recovery, Inspection ) CA. Manoj Kumar Goyal RHMS & Company Member AGM & Affiliates (Network of CA firms) Chartered Accountants 4F-CS-02, Ansal Plaza, Vaishali manojgoyal@rhms.in 9810148436 (M)

2. Accounts and Records Every registered person shall keep and maintain at his principal place of business, as mentioned in the COR a true and correct account of Production or manufacture of goods Inward or outward supply of goods and / or services Stock of goods Input tax credit availed Of output tax payable and paid Such other particulars as may be prescribed Note: In case of more than 1 place of business each place of business shall keep records related that place of business.

3. Accounts and Records Note 2: a registered person can maintain the records in electronic form as may be prescribed. Note 3: Commissioner/ Chief Commissioner may notify a class of taxable persons to maintain additional accounts and documents Note 4: a commissioner or chief commissioner after being satisfied may exempt a class of person from maintaining certain records as prescribed. Note 5: Books of accounts and other records to be maintained for 60 months from the last date of filing the return. Note 6: In case of an appeal the records will have to maintained for 1 year from the date of disposal of appeal of 60 months from the last date of filing the return whichever is later.

4. Assessment Self assessment:(Section 57)- Every registered taxable person shall himself assess the tax liability and file a return as prescribed. Note: In case of goods returned within 6 months the tax payable will be the amount of input tax credit availed. Provisional assessment (Section 58)- Where the taxable person is unable to determine the value or rate of tax, he can apply for provisional assessment to the proper officer. Note 1: the taxable person will have to execute a bond for making good the payment of tax and interest. Note 2: Within 6 months from the date of communication of the provisional assessment order proper officer will pass the final order. This period can be further extended by the competent authority if there are sufficient reasons.

5. Assessment The differential amount determined as per Final order and paid under provisional assessment will be subjected to interest as prescribed under section 36 from the date the amount of tax was payable till the date of actual payment. Interest will also be paid to the assessee in case he is entitled for any refund. Scrutiny of returns (Section 59): Proper officer may scrutinise the returns and other documents/ particulars furnished by the assessee. He can communicate the discrepancies (if any) to the assessee. The assessee can file the explanations and if the same are acceptable, no further action will be taken. In case no satisfactory explanation is provided within 30 days or such extended period as allowed by the proper officer, the officer may initiate appropriate action i.e. initiate an Audit/ Special Audit, Inspection or determine the amount of tax, interest and penalty and issue notice.

6. Assessment Non filers (Section 60)- in case of non filing of return even after the notice under section 32, the proper officer, after allowing a period of 15 days of service of the notice, will do the assessment on best judgement basis by taking the information available with him into consideration. In case the taxable person files the return within 30 days from the date of service of the notice, the said assessment order will be deemed to be withdrawn. Assessment of unregistered persons (section 61): a proper officer, after giving notice and a reasonable opportunity of being heard, do the assessment on best judgement basis of an unregistered person where the person fails to obtain registration even though he was liable to take such registration. Summary Assessment (Section 62): a proper officer, after obtaining prior permission from his additional/ joint commissioner can proceed to do summary assessment where he has sufficient ground to believe that the delay will adversely affect the Revenue.

7. Demands and Recovery A show cause notice will be issued in case of non payment, short payment of tax, tax erroneously refunded or input tax wrongly availed for any reason other than fraud, wilful misstatement or suppression of facts. The proper officer can issue a statement containing particulars of tax evasion as above for any other period with similar grounds and such statement will be considered to be a notice. In case the person pays the tax due alongwith interest before issuance of such notice an informs the proper officer, no notice shall be issued unless the proper officer feels that the amount so deposited falls short.

8. Demand and Recovery If a taxable pays the amount of tax and interest within 30 days of issuance of the notice, no penalty will be charged. The proper officer will determine the tax liability, interest and penalty (not exceeding Rs. 10K or 10% of the tax amount) and issue an order. Such order will be passed within 3 years from the due date or actual date of filing the return pertaining to the tax evasion period whichever is earlier. In case of a fraud, wilful misstatement or suppression of facts, the taxable person before the issuance of SCN can deposit the tax, interest and 15% of penalty and inform the proper officer.

9. Demand and Recovery A person can pay tax, interest and 25% of the penalty within 30 days of receipt of notice. All proceedings in the case will be deemed to be concluded. The order in this case can issued by the proper officer within 5 years from the last date or actual date of filing the return pertaining to the period of tax evasion. A person can pay tax, interest and 50% of penalty within 30 days of the issuance of such order. In case an Appellate Authority concludes that the charges under section 67B are not established, the same will be considered to have been issued under section 67A.

10. Demand and Recovery Tax Collected or not deposited (Section 69): every amount collected on the pretext of GST will have to be deposited. The proper officer can issue a SCN and pass order demanding the amount of tax, interest and penalty. The order will have to be passed within 1 year from the date of issuance of notice. The surplus amount of such tax will either be credited to the Welfare Fund or be returned to the person who has borne the incidence of tax. Wrongfully deposited tax (section 70): in case the tax is wrongly deposited as IGST instead of CGST/ SGST or vice versa then the amount so deposited can be claimed as refund upon payment of the other tax liability.

11. Recovery of tax Recovery of tax (Section 72): the proper officer may deduct or may require any other officer to deduct the amount of tax from any money owed to the person concerned. Can be recovered by selling the goods in possession. The proper officer may require any other person who money to the person concerned for paying the due amount to the account of Central/ State government. In case such person (including a bank, post office or an insurance company) does not comply with the notice, he will be considered to be a defaulter and all consequences of this act will apply to him. The proper officer may, on authorization by the competent authority, may detain any movable or immovable property belonging to or under control of such person.

12. Recovery of tax The tax and other amounts can also be recovered through the District Collector as arrears of land revenue. The tax and other amounts can also be recovered through a magistrate as fine. A commissioner or chief commissioner upon recording reasons in writing may allow a person to make payments in instalment or defer the payment (other the amount of tax self assessed). In case there is a default in payment even in one case, the balance payable will become due immediately. Transfer of property in certain cases will be considered to void (Section 75)

13. Recovery of tax Tax to be first charge on property (Section 76) Provisional attachment to protect revenue in certain cases (Section 77)- If the Commissioner is satisfied that it will be in the interest of revenue then he can provisionally attach the property during the pendency of proceedings. Every such attachment will cease after one year

14. Thanks Happy GST Implementation CA. Manoj Kumar Goyal can be reached at 9810148436 manojgoyal@rhms.in