LAW RELATING TO GOODS AND SERVICES TAX (GST) IN INDIA

BY
DR. N.L. SAJIKUMAR. GOVERNMENT LAW COLLEGE, TRIVANDRUM

GST is a tax imposed on the supply of ‘specific goods and services.’ It is a “destination-
based”1 indirect tax2 that was implemented in 2017 to replace a variety of indirect taxes
including the VAT (value added tax), service tax, purchase tax, excise duty, entertainment
tax and others. The main aim of this multi-stage tax system3 is to curb the cascading
effect of other indirect taxes.
The major advantages of GST include:
• Removal of cascading effect: Cascading effect is an impact of tax on tax; and its
removal has reduced the cost of goods. Goods become cheaper for the end
consumers after the introduction of GST.
• Simplification of taxes: It has replaced 17 indirect taxes which has automatically
eliminated the compliance cost for the businesses.
• Digitisation under GST: All activities related to GST such as registration, return
filing, tax payment, application for refund, and response to notice are required to
be done online through the GST portal. This has accelerated the processes and
reduced manual work.
• Uniformity in the market: The past fragmented market across State lines has
been unified with a huge decline in the cost of the goods.

The new tax regime and structure is implemented through the following laws:

(i) THE CONSTITUTION OF INDIA, 1950: The Constitution (101st) Amendment Act,
2016 allows both the centre and States to levy GST. Before this amendment, taxation
powers were divided between centre and States. For example, while the centre
exclusively taxed services, the States exclusively taxed goods at the time of sale. The
amendment replaces various central and State taxes with GST. While most goods and
services are covered under GST, alcohol for human consumption remains outside its
purview. Petroleum products are outside its purview but may be brought under GST if
the GST Council so decides. The amendment creates a GST Council consisting of the Union
Finance Minister and representatives from all States to implement GST. The Council

1 GST is levied at the point of consumption of goods or services. For instance, if a product is manufactured
in West Bengal and is sold in Kerala, GST will be levied and collected by Kerala and not West Bengal.
2 An indirect tax is collected by one entity in the supply chain (such as the manufacturer or retailer or

service provider) and paid to the government. The tax is passed onto the consumer as part of the purchase
price of a good or service. The consumer is ultimately paying the tax by paying more.
3 Multi-stage taxation: A product goes through multiple stages before it is consumed by the end-user.

These stages are similar to those of a supply chain. For instance, the supply chain of a product involves the
following stages: Purchase of raw materials -- Manufacturing of a product -- Selling the product to a
wholesaler and then to a retailer -- Sale to the end consumer. GST is levied on each stage, which makes it a
multi-stage tax. ILLUSTRATION: (i) Manufacturer/Service Provider: The manufacturer shall pay GST on
the raw material purchased and the value that has been added to make the product. The service provider
shall pay GST on both the product's purchase price and the value added to it. However, the manufacturer's
tax payment may be deducted from the total GST that must be paid. (ii) Retailer: must pay GST on both the
product bought from the distributor and the margin added. However, the retailer's tax payment may be
deducted from the total amount of GST that must be paid. (iii) Consumer: GST must be paid on the
product/service that has been purchased/availed.

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decide upon subjects including: (i) GST rates (ii) Taxes to be subsumed under GST (iii)
Goods and services to be covered under GST (iv)Model laws to be passed by Parliament
and State legislatures; (v) Apportionment of Integrated GST (IGST) and (vi) Special
provisions for the North-Eastern or Himalayan States.
(ii) THE CENTRAL GOODS AND SERVICES TAX ACT, 2017: The central government will
levy and collect the Central GST. The Act was enacted 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. The Act is
enforced through the following officers under the Act:
• Principal Chief Commissioners of Central Tax or Principal Directors General of
Central Tax
• Chief Commissioners of Central Tax or Directors General of Central Tax
• Principal Commissioners of Central Tax or Principal Additional Directors General
of Central Tax
• Commissioners of Central Tax or Additional Directors General of Central Tax
• Additional Commissioners of Central Tax or Additional Directors of Central Tax
• Joint Commissioners of Central Tax or Joint Directors of Central Tax
• Deputy Commissioners of Central Tax or Deputy Directors of Central Tax
• Assistant Commissioners of Central Tax or Assistant Directors of Central Tax
• Any other class of officers as it may deem fit- (officers appointed under the Central
Excise Act, 1944 shall be deemed to be the officers appointed under this Act)
(iii) THE UNION TERRITORY GOODS AND SERVICES TAX ACT, 2017: The central
government will levy and collect the UTGST on the supply of products/services in the
Union Territories.
(iv) THE STATE GOODS AND SERVICES TAX, 2017: The States will levy and collect the
State GST, on supply of goods and services within a State (“intra-State”)
(v) THE INTEGRATED GOODS AND SERVICES TAX ACT, 2017: IGST is charged on inter-
State transactions of goods and services. The central government will levy IGST on inter-
state supply of goods and services, and apportion the State’s share of tax to the State
where the good or service is consumed.
(vi) THE GOODS AND SERVICES TAX (COMPENSATION TO STATES) ACT, 2017: This
Act requires central government to compensate States for any revenue loss owing to
the implementation of GST.

………………………………………………………

THE KERALA STATE GOODS AND SERVICES TAX ACT, 2017

The Act was enacted to provide for levy and collection of tax on intra-State ‘supply’ of
goods or services or both by the State of Kerala and for matters connected therewith or
incidental thereto. From the date of commencement of this Act, the following stands
repealed:
❖ The Kerala Value Added Tax Act, 2003 (except in respect of goods included in
entry 544 of the State List of the Seventh schedule to the Constitution including the

4 Entry 54-- Taxes on the sale of petroleum crude, high speed diesel, motor spirit (commonly known as
petrol), natural gas, aviation turbine fuel and alcoholic liquor for human consumption, but not including
sale in the course of inter-State trade or commerce or sale in the course of international trade or commerce
of such goods.

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 Goods to which the Kerala General Sales Tax Act, 1963 is applicable as per the
provisions of the Kerala Value Added Tax Act, 2003)
❖ The Kerala Tax on Entry of Goods into Local Areas Act, 1994
❖ The Kerala Tax on Luxuries Act, 1976
❖ The Kerala Tax on Paper Lotteries Act, 2005
❖ The Kerala Goods and Services Tax Ordinance, 2017

ADMINISTRATION: OFFICERS UNDER THE ACT5 ?

• Commissioner of State tax or Principal Commissioner or Chief Commissioner of

State tax Special Commissioners of State tax
• Additional Commissioners of State tax
• Joint Commissioners of State tax
• Deputy Commissioners of State tax
• Assistant Commissioners of State tax
• Any other class of officers as it may deem fit (officers appointed under the Kerala
Value Added Tax Act, 2003 and the Kerala General Sales Tax Act, 1963 shall be
deemed to be the officers appointed under the provisions of this Act)

SUPPLY?

For the purposes of this Act, “SUPPLY” includes:6

(a) All forms of supply of goods or services or both such as sale, transfer, barter,
exchange, license, rental, lease or disposal made or agreed to be made for a
consideration by a person in the course or furtherance of business;
(b) Import of services for a consideration whether or not in the course or furtherance
of business;
(c) The following activities specified in Schedule I (ACTIVITIES TO BE TREATED AS
SUPPLY EVEN IF MADE WITHOUT CONSIDERATION)-- (1) Permanent transfer or
disposal of business assets where input tax credit7 has been availed on such assets;
(2) Supply of goods or services or both between related persons or between distinct
persons as specified in section 25, when made in the course or furtherance of business
(Gifts not exceeding fifty thousand rupees in value in a financial year by an employer
to an employee shall not be treated as supply of goods or services or both.); (3) Supply
of goods—(a) by a principal to his agent where the agent undertakes to supply such
goods on behalf of the principal; or (b) by an agent to his principal where the agent
undertakes to receive such goods on behalf of the principal; (4) Import of services by a
taxable person from a related person or from any of his other establishments outside
India, in the course or furtherance of business

5 CHAPTER II, Section 3

6 Section 7
7 “Input” means any goods other than capital goods used or intended to be used by a supplier in the course

or furtherance of business (Section 2 (59)); “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; (c) the tax payable under the
provisions of sub-sections (3) and (4) of section 5 of the Integrated Goods and Services Tax Act, 2017; or
(d) the tax payable under the provisions of sub-sections (3) and (4) of section 9 of the Central Goods and
Services Tax Act, 2017 but does not include the tax paid under the composition levy; (Section 2 (62)) “input
tax credit” means the credit of input tax (Section 2 (63))

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(d) The following activities referred to in Schedule II: (ACTIVITIES TO BE TREATED
AS SUPPLY OF GOODS OR SUPPLY OF SERVICES)—(1) Transfer—(a) any transfer of
the title in goods is a supply of goods; (b) any transfer of right in goods or of undivided
share in goods without the transfer of title thereof, is a supply of services; (c) any transfer
of title in goods under an agreement which stipulates that property in goods shall pass at
a future date upon payment of full consideration as agreed, is a supply of goods (2) Land
and Building—(a) any lease, tenancy, easement, licence to occupy land is a supply of
services; (b) any lease or letting out of the building including a commercial, industrial or
residential complex for business or commerce, either wholly or partly, is a supply of
services (3) Treatment or process—Any treatment or process which is applied to
another person’s goods is a supply of service (4) Transfer of business assets—(a)
where goods forming part of the assets of a business are transferred or disposed of by or
under the directions of the person carrying on the business so as, no longer to form part
of those assets, whether or not for a consideration, such transfer or disposal is a supply
of goods by the person; (b) where, by or under the direction of a person carrying on a
business, goods held or used for the purposes of the business are put to any private use
or are used, or made available to any person for use, for any purpose other than a purpose
of the business, whether or not for a consideration, the usage or making available of such
goods is a supply of services (c) where any person ceases to be a taxable person, any
goods forming part of the assets of any business carried on by him shall be deemed to be
supplied by him in the course or furtherance of his business immediately before he ceases
to be a taxable person, unless,— (i) the business is transferred as a going concern to
another person; or (ii) the business is carried on by a personal representative who is
deemed to be a taxable person (5) Supply of services—The following shall be treated as
supply of service, namely:— (a) renting of immovable property; (b) construction of a
complex, building, civil structure or a part thereof, including a complex or building
intended for sale to a buyer, wholly or partly, except where the entire consideration has
been received after issuance of completion certificate, where required, by the competent
authority or after its first occupation, whichever is earlier (6) Composite supply—The
following composite supplies shall be treated as a supply of services, namely:— (a) works
contract;8 and (b) supply, by way of or as part of any service or in any other manner
whatsoever, of goods, being food or any other article for human consumption or any drink
(other than alcoholic liquor for human consumption), where such supply or service is for
cash, deferred payment or other valuable consideration (7) Supply of Goods.—The
following shall be treated as supply of goods, namely:— Supply of goods by any
unincorporated association or body of persons to a member thereof, for cash, deferred
payment or other valuable consideration.

ACTIVITIES OR TRANSACTIONS WHICH SHALL NOT BE TREATED AS A SUPPLY OF

GOODS OR A SUPPLY OF SERVICES:
(1) 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.

8 “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 (Section 2 (119))

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(2) The following activities or transactions specified in Schedule III: (1) Services by an
employee to the employer in the course of or in relation to his employment (2) Services
by any court or Tribunal (3)- (a) The functions performed by the Members of Parliament,
Members of State Legislature, Members of Panchayats, Members of Municipalities and
Members of other local authorities; (b) the duties performed by any person who holds
any post in pursuance of the provisions of the Constitution in that capacity; or (c) the
duties performed by any person as a Chairperson or a Member or a Director in a body
established by the Central Government or a State Government or local authority and who
is not deemed as an employee (4) Services of funeral, burial, crematorium or mortuary
including transportation of the deceased (5) Sale of land and, subject to clause (b) of
paragraph 5 of Schedule II, sale of building (6) Actionable claims, other than lottery,
betting and gambling.

TAX LIABILITY ON ‘COMPOSITE’ AND ‘MIXED’ SUPPLIES 9

The tax liability on a ‘composite supply’ 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. “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 supply10 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. “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 supply11

LEVY AND COLLECTION12

There shall be levied a tax called the Kerala State 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 the Act and at such rates, not
exceeding twenty per cent, as may be notified by the Government on the
recommendations of the GST Council and collected in such manner as may be prescribed
and shall be paid by the taxable person. The State tax on the supply of petroleum crude,
high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation
turbine fuel, shall be levied with effect from such date as may be notified by the
Government on the recommendations of the Council. The Government may, on the
recommendations of the Council specify categories of supply of goods or services or both,
the tax on which shall be paid on reverse charge13 basis by the recipient of such goods or

9 Section 8
10 Section 2 (30)
11 Section 2 (74)
12 Section 9
13 “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 the Integrated Goods and Services Tax Act,
2017 (See, Section 2 (98))

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services or both. The State tax in respect of the supply of taxable goods or services or both
by a supplier, who is not registered, to a registered person shall be paid by such person
on 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.

The Government may, on the recommendations of the Council, 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. 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. 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

COMPOSITION LEVY
A registered person, whose aggregate turnover in the preceding financial year did not
exceed seventy five 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) 1% of the
turnover in State in case of a manufacturer, (b) 2 ½ % of the turnover in State in case of
persons engaged in making supplies referred to Schedule II, and (c) ½ % of the turnover
in State in case of other suppliers. Government may, increase the said limit of seventy five
lakh rupees to such higher amount, not exceeding one crore rupees, as may be
recommended by the Council.14

POWER TO GRANT EXEMPTION FROM TAX

Where the Government is satisfied that it is necessary in the public interest so to do, it
may, on the recommendations of the Council, exempt either absolutely or subject to such
conditions, goods or services or both of any specified description from the whole or any
part of the tax leviable thereon.15

VALUE OF TAXABLE SUPPLY

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’16 and the price is the sole
consideration for the supply. The value of supply shall include––
(a) Any taxes, duties, cesses, fees and charges levied under any law for the time being in
force other than this Act, the Central Goods and Services Tax Act, 2017 and the Goods and
Services Tax (Compensation to States) Act, 2017 if charged separately by the supplier

14 Section 10
15 Section 11
16 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

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(b) Any amount that the supplier is liable to pay in relation to such supply but which has
been incurred by the recipient of the supply and not included in the price actually paid or
payable for the goods or services or both
(c) Incidental expenses, including commission and packing, charged by the supplier to
the recipient of a supply and any amount charged for anything done by the supplier in
respect of the supply of goods or services or both at the time of, or before delivery of
goods or supply of services
(d) Interest or late fee or penalty 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.
The amount of subsidy shall be included in the value of supply of the supplier who
receives the subsidy. The value of the supply shall not include any discount.

PERSONS LIABLE FOR REGISTRATION?17

“Person” includes: (a) Individual; (b) Hindu Undivided Family; (c) Company; (d) Firm;
(e) Limited Liability Partnership (LLP); (f) Association of persons or a body of individuals,
whether incorporated or not, in India or outside India; (g) Corporation established by or
under any Central Act, State Act or Provincial Act or a Government company as defined
the Companies Act, 2013; (h) Body corporate incorporated by or under the laws of a
country outside India; (i) Co-operative society registered under any law; (j) Local
authority; (k) Central Government or a State Government; (l) Society as defined under
the Societies Registration Act, 1860; (m) Trust; and (n) Artificial juridical person, not
falling within any of the above.18
Every supplier making a taxable supply of goods or services or both in the State
shall be liable to be registered under this Act if his aggregate turnover19 in a financial
year exceeds twenty lakh rupees. Where such person makes taxable supplies of goods
or services or both from any of the special category States, 20 he shall be liable to be
registered if his aggregate turnover in a financial year exceeds ten lakh rupees. 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.

PERSONS NOT LIABLE FOR REGISTRATION21

(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, 2017
(b) An agriculturist,22 to the extent of supply of produce out of cultivation of land.

17 Section 22
18 Section 2 (84)
19 “Aggregate turnover” shall include all supplies made by the taxable person, whether on his own account

or made on behalf of all his principals

20 “Special category States” shall mean the States as specified in sub-clause (g) of clause (4) of article 279-

A of the Constitution.
21 Section 23
22 “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 (c) by servants on wages payable in cash or kind or by
hired labour under personal supervision or the personal supervision of any member of the family (Section
2 (7))

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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.

COMPULSORY REGISTRATION IN CERTAIN CASES23

(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 section 9(5)
(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
section 9(5), through such electronic commerce operator who is required to collect tax at
source
(x) Every electronic commerce operator
(xi) Every person supplying online information and data base access or retrieval services
from a place outside India to a person in India, other than a registered person
(xii) Such other person or class of persons as may be notified by the Government on the
recommendations of the Council.

PROCEDURE FOR REGISTRATION24

Every person who is liable to be registered shall apply for registration within thirty days
from the date on which he becomes liable to registration. A casual taxable person or a
non-resident taxable person shall apply for registration at least five days prior to the
commencement of business. Every person who makes a supply from the territorial
waters of India shall obtain registration in the coastal State where the nearest point of
the appropriate baseline is located. A person seeking registration under this Act shall be
granted a single registration. A person having multiple business verticals 25 in the State
may be granted a separate registration for each business vertical. A person, though not
liable to be registered may get himself registered voluntarily. 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. 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.
Every person shall have a Permanent Account Number (PAN) issued under the Income
Tax Act, 1961 in order to be eligible for grant of registration. 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. A non-resident taxable person may be granted registration on the basis of

23 Section 24
24 Section 25
25 “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 (Section 2 (18))

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such other documents. Where a person who is liable to be registered fails to obtain
registration, the proper officer may proceed to register such person. Any specialised
agency of the UN 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 notified by the
Commissioner, shall be granted a Unique Identity Number for such purposes including
refund of taxes on the notified supplies of goods or services or both received by them, as
may be prescribed. The registration or the Unique Identity Number shall be granted or
rejected after due verification. A certificate of registration shall be issued. A registration
or a Unique Identity Number shall be deemed to have been granted if no deficiency has
been communicated to the applicant.

DEEMED REGISTRATION26
The grant of registration or the Unique Identity Number under the Central Goods and
Services Tax Act, 2017 shall be deemed to be a grant of registration.

CANCELLATION OF REGISTRATION27
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
registration 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
(c) the taxable person is no longer liable to be registered. The proper officer may cancel
the registration of a person where–– (a) a registered person has contravened provisions
of the Act or the rules made thereunder; or (b) a person paying tax has not furnished
returns for three consecutive tax periods; or (c) a registered person has not furnished
returns for a continuous period of six months; or (d) any person who has taken voluntary
registration 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. The proper officer shall not cancel the registration without giving
the person an opportunity of being heard. The cancellation of registration 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. The cancellation of registration under the Central Goods and Services
Tax Act, 2017 shall be deemed to be a cancellation of registration under this Act. Every
registered person whose registration is cancelled shall pay an amount by way of debit in
the electronic credit ledger or electronic cash ledger.

TAX INVOICE28
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.

26 Section 26
27 Section 29
28 Section 31

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PROHIBITION OF UNAUTHORISED COLLECTION OF TAX29
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. No registered person shall
collect tax except in accordance with the provisions of this Act or the rules made
thereunder.

ACCOUNTS AND OTHER RECORDS30

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; (c)
stock of goods; (d) input tax credit availed; (e) output tax payable and paid; and (f) such
other particulars as may be prescribed. 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. The registered person may keep and maintain
such accounts and other particulars in electronic form. Every owner or operator of
warehouse or go-down 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.

RETURNS
Every registered person shall furnish:

• Details of outward supplies31

• Details of inward supplies32
• The ‘Returns’ electronically, of inward and outward supplies of goods or services
or both, input tax credit availed, tax payable, tax paid and such other particulars.33
(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.)
• Annual return- 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 on or before the thirty-first day of December following the end
of such financial year. 34
• Final return- Every registered person who is required to furnish a return 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.35
Where a registered person fails to furnish a return, a notice shall be issued requiring him
to furnish such return within fifteen days.36 Any registered person who fails to furnish
the details of outward or inward supplies or returns by the due date shall pay a late fee

29 Section 32
30 Section 35
31 Section 37
32 Section 38
33 Section 39
34 Section 44
35 Section 45
36 Section 46

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of one hundred rupees for every day during which such failure continues subject to a
maximum amount of five thousand rupees. 37
• Information return: Any person, being,— (a) a taxable person; or (b) a local
authority or other public body or association; or (c) any authority of the State
Government responsible for the collection of value added tax or sales tax or State
excise duty or an authority of the Central Government responsible for the
collection of excise duty or customs duty; or (d) an income tax authority appointed
under the Income-tax Act, 1961; or (e) a banking company within the meaning of
the Reserve Bank of India Act, 1934; or (f) a State Electricity Board or an electricity
distribution or transmission licensee under the Electricity Act, 2003, or any other
entity entrusted with such functions by the Central Government or the State
Government; or (g) Registrar or Sub-Registrar appointed under the Registration
Act, 1908; or (h) a Registrar within the meaning of the Companies Act, 2013; or (i)
registering authority under the Motor Vehicles Act, 1988; or (j) the Collector
referred to in the Right to Fair Compensation and Transparency in Land
Acquisition, Rehabilitation and Resettlement Act, 2013; or (k) the recognised
stock exchange referred to in the Securities Contracts (Regulation) Act, 1956; or
(l) a depository referred to in the Depositories Act, 1996; or (m) an officer of the
Reserve Bank of India under the Reserve Bank of India Act, 1934; or (n) the Goods
and Services Tax Network, a company registered under the Companies Act, 2013
; or (o) a person to whom a Unique Identity Number has been granted under the
GST Act; or (p) any other person as may be specified, on the recommendations of
the Council, by the Government,— who is responsible for maintaining record of
registration or statement of accounts or any periodic return or document
containing details of payment of tax and other details of transaction of goods or
services or both or transactions related to a bank account or consumption of
electricity or transaction of purchase, sale or exchange of goods or property or
right or interest in a property under any law for the time being in force, shall
furnish an information return of the same in respect of such periods, within such
time, in such form and manner and to such authority or agency as may be
prescribed.38

GOODS AND SERVICES TAX PRACTITIONERS

A registered person may authorise an ‘approved goods and services tax practitioner’ to
furnish the details of outward supplies, the details of inward supplies and the returns.
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. 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 prescribed by the government. 39

PAYMENT OF TAX
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 shall be credited to the electronic

37 Section 47
38 Section 150
39 Section 48

11
cash ledger of such person. The amount available in this 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. 40 Interest on delayed payment of tax
shall be at such rate, not exceeding 18%.41

TAX DEDUCTION AT SOURCE

Government may mandate— (a) a department or establishment of the Central
Government or State Government; or (b) local authority; or (c) Governmental agencies;
or (d) such persons or category of persons as may be notified (hereafter referred to as
“the DEDUCTOR”), to deduct tax at the rate of 1 % from the payment made or credited to
the supplier (hereafter 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. The “value of supply” shall be taken as the amount excluding the Central
tax, State tax, integrated tax and cess indicated in the invoice. The amount so deducted as
tax shall be paid to the Government by the DEDUCTOR within ten days after the end of
the month in which such deduction is made; and 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. If any DEDUCTOR
fails to pay to the Government the amount deducted he shall pay interest. 42

REFUND OF TAX
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.43 If any tax ordered to be refunded to any applicant is not refunded within
sixty days from the date of receipt of application, interest at such rate not exceeding six
per cent 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.44

CONSUMER WELFARE FUND

The Government shall constitute a Fund, to be called the Consumer Welfare Fund and
there shall be credited to the Fund–– (a) the amount claimed as “refundable;” (b) any
income from investment of the amount credited to the Fund; and (c) such other monies
received by it.45 All sums credited to the Fund shall be utilised by the Government for the
welfare of the consumers.46

ASSESSMENT
• Self-assessment: Every registered person shall self-assess the taxes payable
under this Act and furnish a return for each tax period.47
• Provisional & final assessment: Where the taxable person is unable to
determine the value of goods or services or both or determine the rate of tax

40 Section 49
41 Section 50
42 Section 51
43 Section 54
44 Section 56
45 Section 57
46 Section 58
47 Section 59

12
 applicable thereto, he may request the proper officer 48 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. The proper officer shall pass the final assessment order after
taking into account such information as may be required for finalizing the
assessment.49
• Best judgment assessment: Where a registered person fails to furnish the return,
even after the service of a notice, the proper officer may proceed to assess the tax
liability of the said person to the best of his judgment 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 for
furnishing of the annual return for the financial year to which the tax not paid
relates. Where the registered person furnishes a valid return within thirty days of
the service of this assessment order, the said assessment order shall be deemed
to have been withdrawn but the liability for payment of interest or for payment of
late fee shall continue.50 Where a taxable person fails to obtain registration even
though liable to do so or whose registration has been cancelled 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; after giving the person an
opportunity of being heard.51
• Summary assessment in certain special cases: 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. On an application made by the
taxable person within thirty days from the date of receipt of this order or on his
own motion, if the Additional Commissioner or Joint Commissioner considers that
such order is erroneous, he may withdraw such order. 52

AUDIT
• Audit by tax authorities: The Commissioner or any officer authorised by him
may undertake audit of any registered person. The officer may conduct audit at
the place of business of the registered person or in their office. The registered
person shall be informed by way of a notice not less than fifteen working days
prior to the conduct of audit. The audit) shall be completed within a period of three
months from the date of commencement of the audit. If it cannot be completed
within three months, the Commissioner may, for the reasons to be recorded in
writing, extend the period by a further period not exceeding six months. 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

48 “Proper officer” means the Commissioner or the officer of the State tax who is assigned that function by
the Commissioner (Section 2 (91))
49 Section 60
50 Section 62
51 Section 63
52 Section 64

13
 documents as he may require; (ii) to furnish such information as he may require
and render assistance for timely completion of the audit. 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. Where the audit 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 legal action.53
• Special audit: 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. The
expenses of the examination and audit of records including the remuneration of
such chartered accountant or cost accountant, shall be determined and paid by the
Commissioner and such determination shall be final. Where the special audit
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 legal action.54

INSPECTION, SEARCH, SEIZURE AND ARREST

Power of inspection, search and seizure: 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 or has indulged in
contravention of any of the provisions of this Act or the rules made thereunder to evade
tax; or (b) any person engaged in the business of transporting goods or an owner or
operator of a warehouse or a go-down 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, he may authorise in writing any other officer of State tax to
inspect any places of business of the taxable person or the persons engaged in the
business of transporting goods or the owner or the operator of warehouse or go-down or
any other place. Where the proper officer, either pursuant to the inspection carried out
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 State tax to search and seize or may himself search and seize such goods,
documents or books or things. 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. 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. The documents, books or
things 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

53 Section 65
54 Section 66

14
made thereunder, shall be returned to such person within a period not exceeding thirty
days of the issue of the said notice. The officer authorised 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. The person from whose custody any documents are seized
shall be entitled to make copies thereof or take extracts therefrom in the presence of an
authorised officer at such place and time as such officer may indicate in this behalf except
where making such copies or taking such extracts may, in the opinion of the proper
officer, prejudicially affect the investigation. The goods so seized 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. Where any goods are seized 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. 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, specify the goods or class of
goods which shall, as soon as may be after its seizure be disposed of by the proper officer.
Where any goods have been seized by a proper officer, or any officer authorised by him,
he shall prepare an inventory of such goods. The provisions of the Code of Criminal
Procedure, 1973 relating to search and seizure shall apply to search and seizure subject
to the modification that word “Magistrate” wherever it occurs be substituted with the
word “Commissioner.” 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. The Commissioner or an officer authorised by him may cause
purchase of any goods or services or both by any person 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. 55
Inspection of goods in movement: 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. Where any conveyance 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 and devices for verification, and the said person shall be liable to produce the
documents and devices and also allow the inspection of goods. 56
Power to arrest: Where the Commissioner has reasons to believe that a person has
committed any offence, he may, by order, authorise any officer of State tax to arrest such
person. Where a person is arrested for an offence, 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. Where a person is arrested for any offence specified

55 Section 67
56 Section 68

15
as non-cognizable and bailable, he shall be admitted to bail or in default of bail, forwarded
to the custody of the Magistrate. In the case of a non-cognizable and bailable offence, the
Deputy Commissioner or the Assistant Commissioner shall, for the purpose of releasing
an arrested person on bail or otherwise, have the same powers and be subject to the same
provisions as an officer-in-charge of a police station.57
Power to summon persons to give evidence and produce documents:
The proper officer 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, 1908.58
Access to business premises: Any officer 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. Every person in charge of place shall, on demand, make available to
the officer or the audit party deputed by the proper officer or a cost accountant or
chartered accountant– (i) such records as prepared or maintained by the registered
person; (ii) trial balance or its equivalent; (iii) statements of annual financial accounts,
duly audited, wherever required; (iv) cost audit report, if any, under the Companies Act,
2013; (v) the income-tax audit report, if any, under 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.59
Officers to assist proper officers: All officers of Police, Railways, Customs and those
officers engaged in the collection of land revenue, including Village Officers, Officers of
Central Tax and officers of the Union Territory tax shall assist the proper officers in the
implementation of this Act.60

RECOVERY PROCEEDINGS
Initiation of recovery proceedings: 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. 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.61
Modes of recovery of tax: The proper officer shall proceed to recover the amount by one
or more of the following modes:
(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;

57 Section 69
58 Section 70
59 Section 71
60 Section 72
61 Section 78

16
(b) The proper officer may recover or may require any other specified officer to recover
the amount so payable by detaining and selling any goods belonging to such person which
are under the control of the proper officer or such other specified officer;
(c)--(i) The proper officer may, by a notice in writing, require any other person from
whom money is due or may become due to such person or who holds or may
subsequently hold money for or on account of such person, to pay to the Government
either forthwith upon the money becoming due or being held, or within the time specified
in the notice not being before the money becomes due or is held, so much of the money
as is sufficient to pay the amount due from such person or the whole of the money when
it is equal to or less than that amount; (ii) every person to whom the notice 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 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 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
shall be deemed to have made the payment under the authority of the person in default
and such payment being credited to the Government shall be deemed to constitute a good
and sufficient discharge of the liability of such person to the person in default to the extent
of the amount specified in the receipt; (vi) any person discharging any liability to the
person in default after service on him of the notice 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 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;

17
(f) 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.62
Payment of tax and other amount in instalments: On an application filed by a taxable
person, the Commissioner may extend the time for payment or allow payment of any
amount due, 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 and subject to such conditions and limitations as may be prescribed. 63
Transfer of property to be void in certain cases: 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. 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.64
Tax to be first charge on property: 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.65
Provisional attachment to protect revenue in certain cases: Where during the
pendency of any proceedings, 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. Every such provisional attachment shall cease to have effect after the
expiry of a period of one year from the date of the order.66

LIABILITY TO PAY IN CERTAIN CASES

Liability in case of transfer of business: 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 licence,
hire or in any other manner, 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 up to 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. Where the transferee of a business
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. 67

62 Section 79
63 Section 80
64 Section 81
65 Section 82
66 Section 83
67 Section 85

18
Liability of agent and principal: 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.68
Liability in case of amalgamation or merger of companies: 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. 69
Liability in case of company in liquidation: 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 referred to as the “liquidator”), shall,
within thirty days after his appointment, give intimation of his appointment to the
Commissioner. 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. 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. 70
Liability of directors of private company: 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 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.71
Liability of partners of firm to pay tax: 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. 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. If
no such intimation is given within one month from the date of retirement, the liability of
such partner shall continue until the date on which such intimation is received by the
Commissioner.72

68 Section 86
69 Section 87
70 Section 88
71 Section 89
72 Section 90

19
Liability of guardians, trustees etc.: 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.73
Liability of Court of Wards, etc.: 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 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. 74
Liability of legal representative: 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. 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. 75
Liability in other cases: 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 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.76

ADVANCE RULING?
“Advance ruling” means a decision provided by the Authority or the Appellate
Authority to an applicant on the following matters or questions in relation to the supply
of goods or services or both being undertaken or proposed to be undertaken by the
applicant:77
• Classification of any goods or services or both
• Applicability of a notification issued under the provisions of this Act
• Determination of time and value of supply of goods or services or both
• Admissibility of input tax credit of tax paid or deemed to have been paid
• Determination of the liability to pay tax on any goods or services or both
• Whether applicant78 is required to be registered

73 Section 91
74 Section 92
75 Section 93
76 Section 94
77 Section 95 (a)
78 “Applicant” means any person registered or desirous of obtaining registration under this Act

20
 • 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
• The concerned officer, the jurisdictional officer or an applicant aggrieved
The Government shall constitute an Authority to be known as the Kerala Authority for
Advance Ruling. The Government may, on the recommendation of the Council, notify any
Authority located in another State to act as the Authority for the State. The Authority shall
consist of— (i) one member from amongst the officers of Central tax; and (ii) one member
from amongst the officers of State tax, to be appointed by the Central Government and
the State Government respectively. 79 An applicant desirous of obtaining an advance
ruling may make an application accompanied by such fee, stating the question on which
the advance ruling is sought.80 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.81 The Government shall also constitute an Authority to be
known as Kerala Appellate Authority for Advance Ruling for Goods and Services Tax
for hearing appeals against the advance ruling pronounced by the Advance Ruling
Authority; consisting of: (i) the Chief Commissioner of Central tax as designated by the
Board; and (ii) the Commissioner of State tax. The Government may, on the
recommendations of the Council, notify any Appellate Authority located in another State
or Union Territory to act as the Appellate Authority for the State. 82 The concerned officer,
the jurisdictional officer or an applicant aggrieved by any advance ruling, may appeal to
the Appellate Authority. Every such appeal 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. 83 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.84 The Authority or the Appellate Authority may amend any order passed by
it, 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, or the applicant or the appellant within a
period of six months from the date of the order. 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.85
Where the Authority or the Appellate Authority finds that advance ruling pronounced by
it 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. No order shall be passed under this sub-section unless an opportunity of being
heard has been given to the applicant or the appellant.86

79 Section 96
80 Section 97
81 Section 98
82 Section 99
83 Section 100
84 Section 101
85 Section 102
86 Section 104

21
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; (c) issuing commissions and compelling production of books
of account and other records, have all the powers of a civil court under the Code of Civil
Procedure, 1908.87 The Authority or the Appellate Authority shall have power to regulate
its own procedure.88

APPEALS AND REVISION

Appeals to APPELLATE AUTHORITY: Any person aggrieved by any decision or order
passed under this Act or the Central Goods and Services Tax Act, 2017 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. The Commissioner may, on his own motion, or upon request from the
Commissioner of central tax, call for and examine the record of any proceeding in which
an adjudicating authority has passed any decision or order under this Act or the Central
Goods and Services Tax Act, 2017 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. 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.89
Powers of REVISIONAL AUTHORITY: The Revisional Authority may, on his own motion,
or upon information received by him or on request from the Commissioner of central 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 Central Goods and Services Tax Act, 2017, 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.90
Appellate Tribunal and Benches thereof: The Goods and Services Tax Tribunal
constituted under the Central Goods and Services Tax Act, 2017 shall be the Appellate
Tribunal for hearing appeals against the orders passed by the Appellate Authority or the
Revisional Authority under this Act.91
Appearance by authorised representative: Any person who is entitled or required to
appear before an officer appointed under this Act, or the Appellate Authority or the
Appellate Tribunal, may, otherwise than when required to appear personally for
examination on oath or affirmation, appear by an authorised representative. “Authorised

87 Section 105
88 Section 106
89 Section 107
90 Section 108
91 Section 109

22
representative” shall mean a person authorised by the person to appear on his behalf,
being,— (a) his relative or regular employee; or (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 (c) any chartered accountant, a cost accountant or a company secretary,
who 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. 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. 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 Central Goods and Services Tax Act, 2017, the Integrated
Goods and Services Tax Act, 2017 or the Union Territory Goods and Services Tax Act,
2017 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 (c) who is found guilty of misconduct by the prescribed authority; (d) who has
been adjudged as an insolvent-- shall be qualified to represent any person.92
Appeal to High Court: Any person aggrieved by any order passed by 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. 93
Appeal to Supreme Court: An appeal shall lie to the Supreme Court— (a) from any order
passed by the Appellate Tribunal; or (b) from any judgment or order passed by the High
Court in an appeal 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.94

OFFENCES AND PENALTIES

Penalty for certain offences:95
(1)Where a taxable person who,— (i) supplies any goods or services or both without
issue of any invoice or issues an incorrect or false invoice with regard to any such
supply; (ii) issues any invoice or bill without supply of goods or services or both in
violation of the provisions of this Act or the rules made thereunder; (iii) collects any
amount as tax but fails to pay the same to the Government beyond a period of three
months from the date on which such payment becomes due; (iv) collects any tax in
contravention of the provisions of this Act but fails to pay the same to the Government
beyond a period of three months from the date on which such payment becomes due; (v)
fails to deduct the tax or deducts an amount which is less than the amount required to be
deducted, or where he fails to pay to the Government, the amount deducted as tax; (vi)
fails to collect tax, or collects an amount which is less than the amount required to be
collected or where he fails to pay to the Government the amount collected as tax; (vii)
takes or utilizes input tax credit without actual receipt of goods or services or both either
fully or partially, in contravention of the provisions of this Act or the rules made
thereunder; (viii) fraudulently obtains refund of tax under this Act; (ix) takes or

92 Section 116
93 Section 117
94 Section 118
95 Section 122

23
distributes input tax credit in contravention of Section 20, or the rules made thereunder;
(x) falsifies or substitutes financial records or produces fake accounts or documents or
furnishes any false information or return with an intention to evade payment of tax due
under this Act; (xi) is liable to be registered under this Act but fails to obtain registration;
(xii) furnishes any false information with regard to registration particulars, either at the
time of applying for registration, or subsequently; (xiii) obstructs or prevents any officer
in discharge of his duties under this Act; (xiv) transports any taxable goods without the
cover of documents as may be specified in this behalf; (xv) suppresses his turnover
leading to evasion of tax under this Act; (xvi) fails to keep, maintain or retain books of
account and other documents in accordance with the provisions of this Act or the rules
made thereunder; (xvii) fails to furnish information or documents called for by an officer
in accordance with the provisions of this Act or the rules made thereunder or furnishes
false information or documents during any proceedings under this Act; (xviii) supplies,
transports or stores any goods which he has reasons to believe are liable to confiscation
under this Act; (xix) issues any invoice or document by using the registration number of
another registered person; (xx) tampers with, or destroys any material evidence or
documents; (xxi) disposes off or tampers with any goods that have been detained, seized,
or attached under this Act,---- he shall be liable to pay a penalty of ten thousand rupees
or an amount equivalent to the tax evaded or the tax not deducted or short deducted or
deducted but not paid to the Government or tax not collected or short collected or
collected but not paid to the Government or input tax credit availed of or passed on or
distributed irregularly, or the refund claimed fraudulently, whichever is higher.
(2) Any registered person who supplies any goods or services or both on which any tax
has not been paid or short-paid or erroneously refunded, or where the input tax credit
has been wrongly availed or utilized— (a) for any reason, other than the reason of fraud
or any wilful misstatement or suppression of facts to evade tax, shall be liable to a penalty
of ten thousand rupees or ten per cent of the tax due from such person, whichever is
higher; (b) for reason of fraud or any wilful misstatement or suppression of facts to evade
tax, shall be liable to a penalty equal to ten thousand rupees or the tax due from such
person, whichever is higher.
(3) Any person who–– (a) aids or abets any of the offences specified in clauses (i) to (xxi);
(b) acquires possession of, or in any way concerns himself in transporting, removing,
depositing, keeping, concealing, supplying, or purchasing or in any other manner deals
with any goods which he knows or has reasons to believe are liable to confiscation under
this Act or the rules made thereunder; (c) receives or is in any way concerned with the
supply of, or in any other manner deals with any supply of services which he knows or
has reasons to believe are in contravention of any provisions of this Act or the rules made
thereunder; (d) fails to appear before the officer of State tax, when issued with a
summons for appearance to give evidence or produce a document in an inquiry; (e) fails
to issue invoice in accordance with the provisions of this Act or the rules made
thereunder or fails to account for an invoice in his books of account, shall be liable to a
penalty which may extend to twenty five thousand rupees.

Penalty for failure to furnish information return 96

If a person who is required to furnish an ‘information return’ fails to do so within the
period specified in the notice the proper officer may direct, that such person shall be
liable to pay a penalty of one hundred rupees for each day of the period during which the

96 Section 123

24
failure to furnish such return continues. Penalty imposed shall not exceed five thousand
rupees.
Fine for failure to furnish statistics97- a fine which may extend to ten thousand rupees
and in case of a continuing offence to a further fine which may extend to one hundred
rupees for each day after the first day during which the offence continues subject to a
maximum limit of twenty five thousand rupees.
General penalty98: Any person, who contravenes any of the provisions of this Act or any
rules made thereunder for which no penalty is separately provided for in this Act, shall
be liable to a penalty which may extend to twenty five thousand rupees.
General disciplines related to penalty:99 No officer shall impose any penalty for minor
breaches of tax regulations or procedural requirements and in particular, any omission
or mistake in documentation which is easily rectifiable and made without fraudulent
intent or gross negligence. A breach shall be considered a ‘minor breach’ if the amount of
tax involved is less than five thousand rupees. No penalty shall be imposed on any person
without giving him an opportunity of being heard. When a person voluntarily discloses
the circumstances of a breach of the tax law, regulation or procedural requirement prior
to the discovery of the breach by the officer, the proper officer may consider this fact as a
mitigating factor when quantifying a penalty for that person. These provisions shall not
apply in such cases where the penalty specified under this Act is either a fixed sum or
expressed as a fixed percentage.
Detention, seizure and release of goods and conveyances in transit:100 Where any
person transports any goods or stores any goods while they are in transit in
contravention of the provisions of this Act or the rules made thereunder, all such goods
and conveyance used as a means of transport for carrying the said goods and documents
relating to such goods and conveyance shall be liable to detention or seizure. After
detention or seizure, it shall be released–– (a) on payment of the applicable tax and
penalty equal to 100% of the tax payable on such goods and, in case of exempted goods,
on payment of an amount equal to two per cent of the value of goods or twenty five
thousand rupees, whichever is less, where the owner of the goods comes forward for
payment of such tax and penalty; (b) on payment of the applicable tax and penalty equal
to the 50% of the value of the goods reduced by the tax amount paid thereon and, in case
of exempted goods, on payment of an amount equal to 5% of the value of goods or twenty
five thousand rupees, whichever is less, where the owner of the goods does not come
forward for payment of such tax and penalty; (c) upon furnishing a security equivalent to
the amount payable. No such goods or conveyance shall be detained or seized without
serving an order of detention or seizure on the person transporting the goods.
Confiscation of goods or conveyances and levy of penalty:101 If any person,— (i)
supplies or receives any goods in contravention of any of the provisions of this Act or the
rules made thereunder with intent to evade payment of tax; or (ii) does not account for
any goods on which he is liable to pay tax under this Act; or (iii) supplies any goods liable
to tax under this Act without having applied for registration; or (iv) contravenes any of
the provisions of this Act or the rules made thereunder with intent to evade payment of
tax; or (v) uses any conveyance as a means of transport for carriage of goods in
contravention of the provisions of this Act or the rules made thereunder unless the owner

97 Section 124
98 Section 125
99 Section 126
100 Section 129
101 Section 130

25
of the conveyance proves that it was so used without the knowledge or connivance of the
owner himself, his agent, if any, and the person in charge of the conveyance, then, all such
goods or conveyances shall be liable to confiscation and the person shall be liable to
penalty.
Confiscation or penalty not to interfere with other punishments:102 Confiscation
made or penalty imposed under the provisions of this Act or the rules made thereunder
shall not prevent the infliction of any other punishment to which the person affected
thereby is liable under the provisions of this Act or under any other law for the time being
in force.
Punishment for certain offences:103 Whoever: (a) supplies any goods or services or
both without issue of any invoice, in violation of the provisions of this Act or the rules
made thereunder, with the intention to evade tax; (b) issues any invoice or bill without
supply of goods or services or both in violation of the provisions of this Act, or the rules
made thereunder leading to wrongful availment or utilisation of input tax credit or refund
of tax; (c) avails input tax credit using such invoice or bill referred to in clause (b); (d)
collects any amount as tax but fails to pay the same to the Government beyond a period
of three months from the date on which such payment becomes due; (e) evades tax,
fraudulently avails input tax credit or fraudulently obtains refund and where such offence
is not covered under clauses (a) to (d); (f) falsifies or substitutes financial records or
produces fake accounts or documents or furnishes any false information with an
intention to evade payment of tax due under this Act; (g) obstructs or prevents any officer
in the discharge of his duties under this Act; (h) acquires possession of, or in any way
concerns himself in transporting, removing, depositing, keeping, concealing, supplying,
purchasing or in any other manner deals with, any goods which he knows or has reasons
to believe are liable to confiscation under this Act or the rules made thereunder; (i)
receives or is in any way concerned with the supply of, or in any other manner deals with
any supply of services which he knows or has reasons to believe are in contravention of
any provisions of this Act or the rules made thereunder; (j) tampers with or destroys any
material evidence or documents; (k) fails to supply any information which he is required
to supply under this Act or the rules made thereunder or (unless with a reasonable belief,
the burden of proving which shall be upon him, that the information supplied by him is
true) supplies false information; or (l) attempts to commit, or abets the commission of
any of the offences mentioned in clauses (a) to (k) of this section, shall be punishable– (i)
in cases where the amount of tax evaded or the amount of input tax credit wrongly availed
or utilised or the amount of refund wrongly taken exceeds five hundred lakh rupees, with
imprisonment for a term which may extend to five years and with fine; (ii) in cases where
the amount of tax evaded or the amount of input tax credit wrongly availed or utilised or
the amount of refund wrongly taken exceeds two hundred lakh rupees but does not
exceed five hundred lakh rupees, with imprisonment for a term which may extend to
three years and with fine; (iii) in the case of any other offence where the amount of tax
evaded or the amount of input tax credit wrongly availed or utilised or the amount of
refund wrongly taken exceeds one hundred lakh rupees but does not exceed two hundred
lakh rupees, with imprisonment for a term which may extend to one year and with fine;
(iv) in cases where he commits or abets the commission of an offence specified in clause
(f) or clause (g) or clause (j), he shall be punishable with imprisonment for a term which
may extend to six months or with fine or with both. Where any person convicted of any

102 Section 131

103 Section 132

26
of these offences is again convicted, then, he shall be punishable for the second and for
every subsequent offence with imprisonment for a term which may extend to five years
and with fine.
Liability of officers and certain other persons:104 Where any person engaged in
connection with the collection of statistics or compilation or computerisation thereof or
if any officer of State tax having access to information, or if any person engaged in
connection with the provision of service on the common portal or the agent of common
portal, wilfully discloses any information or the contents of any return furnished
otherwise than in execution of his duties or for the purposes of prosecution for an offence,
he shall be punishable with imprisonment for a term which may extend to six months or
with fine which may extend to twenty five thousand rupees, or with both.
Cognizance of offences:105 No court shall take cognizance of any offence punishable
under this Act or the rules made thereunder except with the previous sanction of the
Commissioner, and no court inferior to that of a Magistrate of the First Class, shall try any
such offence.
Presumption of culpable mental state106 In any prosecution for an offence under this
Act which requires a culpable mental state on the part of the accused, the court shall
presume the existence of such mental state but it shall be a defence for the accused to
prove the fact that he had no such mental state with respect to the act charged as an
offence in that prosecution.
Relevancy of statements under certain circumstances:107 A statement made and
signed by a person on appearance in response to any summons during the course of any
inquiry or proceedings under this Act shall be relevant, for the purpose of proving, in any
prosecution for an offence under this Act, the truth of the facts which it contains.
Offences by Companies:108 Where an offence committed by a person is a company, every
person who, at the time the offence was committed was in charge of, and was responsible
to, the company for the conduct of business of the company, as well as the company, shall
be deemed to be guilty of the offence and shall be liable to be proceeded against and
punished accordingly.
Compounding of offences:109 Any offence under this Act may, either before or after the
institution of prosecution, be compounded by the Commissioner on payment, by the
person accused of the offence, to the Central Government or the State Government, as the
case may be, of such compounding amount in such manner as may be prescribed.

MISCELLANEOUS PROVISIONS
Admissibility of microfilms, facsimile copies of documents and computer printouts
as documents and as evidence:110 These items shall be deemed to be a document for
the purposes of this Act and the rules made thereunder and shall be admissible in any
proceedings thereunder, without further proof or production of the original, as evidence
of any contents of the original or of any fact stated therein of which direct evidence would
be admissible.

104 Section 133

105 Section 134
106 Section 135
107 Section 136
108 Section 137
109 Section 138
110 Section 145

27
Common Portal:111 The Government may, on the recommendations of the Council, notify
the Common Goods and Services Tax Electronic Portal for facilitating registration,
payment of tax, furnishing of returns, computation and settlement of integrated tax,
electronic way bill and for carrying out such other functions and for such purposes as
may be prescribed.
Goods and services tax compliance rating:112 Every registered person may be assigned
a goods and services tax compliance rating score by the Government based on his record
of compliance with the provisions of this Act. The score may be determined on the basis
of such parameters as may be prescribed by the government. The score may be updated
at periodic intervals and intimated to the registered person and also placed in the public
domain.
Taking assistance from an expert:113 Any officer not below the rank of Assistant
Commissioner may, having regard to the nature and complexity of the case and the
interest of revenue, take assistance of any expert at any stage of scrutiny, inquiry,
investigation or any other proceedings before him.
Power to take samples:114 The Commissioner or an officer authorised by him may take
samples of goods from the possession of any taxable person, where he considers it
necessary, and provide a receipt for any samples so taken.
Publication of information in respect of persons:115 If the Commissioner, or any other
officer authorised by him in this behalf, is of the opinion that it is necessary or expedient
in the public interest to publish the name of any person and any other particulars relating
to any proceedings or prosecution under this Act in respect of such person, it may cause
to be published such name and particulars.
Rounding off: 116The amount of tax, interest, penalty, fine or any other sum payable, and
the amount of refund or any other sum due shall be rounded off to the nearest rupee and,
for this purpose, where such amount contains a part of a rupee consisting of paise, then,
if such part is fifty paise or more, it shall be increased to one rupee and if such part is less
than fifty paise it shall be ignored.

TAX LAWS BEFORE GST

In the indirect tax regime before GST, the indirect taxes were levied by the States and the
centre. Each state collected Value Added Tax (VAT) for the sale of goods within the same
state. For the inter-state sale of goods, CST (Central State Tax) was levied by the centre.
And, on the sale of services, service tax is applicable.
The following indirect taxes were applicable before GST:
• Central Sales Tax
• State VAT
• Service Tax
• Luxury Tax
• Entertainment Tax
• Entry Tax
• Taxes on advertisements
• Taxes on lotteries, betting, and gambling

111 Section 146

112 Section 149
113 Section 153
114 Section 154
115 Section 159
116 Section 170

28
 DIFFERENCES BETWEEN GST & VAT

Goods & Services Tax (GST) Value Added Tax (VAT)

Applied on supply of goods and services Levied only on the sale of goods
GST rates of goods & services are the Tax rates were different from State to State
same across all the States in India
The centre and the State collects SGST Collected by the State in which the sale
and CGST on every transaction. transaction took place and used by the State
India has adopted a dual GST system, government
wherein the central government and
State governments levy GST
concurrently. They share a common tax
base.
All the indirect taxes that were levied on Different taxes like VAT, luxury tax,
State and central level were entertainment tax, various cesses, sales tax,
discontinued after the introduction of were charged on the State level.
GST.
Only one tax is levied on goods &
services across the country. Several taxes at the Central level made the
However, there are some exceptions like entire system complex
petroleum, natural gas, motor spirit and
high-speed diesel

29