Income Tax & GST Laws

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After enactment of new GST Act, 2017 the sale tax and service tax have been combined with only one tax system. On 01 Jul 2017 the GST Act has been notified for all over India. The following few Questions and their Answers related to GST laws which will help Individual / firm / company to understand the legal concept of GST, Demand Notice, Recovery & Appeal provisions. 


Q 1. What is Goods and Service Tax (GST)?
Ans. It is a destination based tax on consumption of goods and services. It is proposed to be levied at all stages right  from manufacture up to final consumption with credit  of taxes paid at previous stages available as set off. In a nutshell, only value addition will be taxed and burden of  tax is to be borne by the final consumer.

Q 2. What exactly is the concept of destination based tax on consumption?
Ans. The tax would accrue to the taxing authority which has jurisdiction over the place of consumption which is also termed as place of supply.

Q 3. Which of the existing taxes are proposed to be subsumed under GST?
Ans. The GST would replace the following taxes:
i.    taxes currently levied and collected by the Centre:
a.    Central Excise duty
b.    Duties of Excise (Medicinal and Toilet  Preparations)
c.    Additional Duties of Excise (Goods of Special  Importance)
d.    Additional Duties of Excise (Textiles and Textile  Products)
e.    Additional Duties of Customs (commonly known as  CVD)
f.    Special Additional Duty of Customs (SAD)
g.    Service Tax
h.    Central Surcharges and Cesses so far as they relate to supply of goods and services
ii.    State taxes that would be subsumed under the GST are:
a.    State VAT
b.    Central Sales Tax
c.    Luxury Tax
d.    Entry Tax (all forms)
e.    Entertainment and Amusement Tax (except when levied by the local bodies)
f.    Taxes on advertisements
g.    Purchase Tax
h.    Taxes on lotteries, betting and gambling
iii.    State Surcharges and Cesses so far as they relate to supply of goods and servicesThe GST Council shall make   recommendations to the Union and States on the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed in the GST.

Q 4. What principles were adopted for subsuming the above taxes under GST?
Ans. The various Central, State and Local levies were examined to identify their possibility of being subsumed under GST. While identifying, the following principles were kept in mind:
(i) Taxes or levies to be subsumed should be primarily in the nature of indirect taxes, either on the supply of goods or on the supply of services.
(ii) Taxes or levies to be subsumed should be part of the transaction chain which commences with import/ manufacture/ production of goods or provision of services at one end and the consumption of goods and services at the other.
(iii) The subsumation should result in free flow of tax credit in intra and inter-State levels. The taxes, levies and fees that are not specifically related to supply of goods & services should not be subsumed under GST.
(iv) Revenue fairness for both the Union and the States individually would need to be attempted.

Q 5. Which are the commodities proposed to be kept outside the purview of GST?
Ans. Alcohol for human consumption, Petroleum  Products viz. petroleum crude, motor spirit (petrol), high speed diesel, natural gas and aviation turbine fuel & Electricity.

Q 6. What will be the status in respect of taxation of above commodities after introduction of GST?
Ans. The existing taxation system (VAT & Central Excise) will continue in respect of the above commodities.

Q 6A. What will be status of Tobacco and Tobacco products under the GST regime?
Ans. Tobacco and tobacco products would be subject to GST. In addition, the Centre would have the power to levy Central Excise duty on these products.

Q 7. What type of GST is proposed to be implemented?
Ans.It would be a dual GST with the Centre and states simultaneously levying it on a common tax base. The GST to be levied by the Centre on intra-State supply of goods and / or services would be called the Central GST (CGST) and that to be levied by the States would be called the State GST (SGST). Similarly Integrated GST (IGST) will be levied and administered by Centre on every inter-state supply of goods and services.

Q 8. Why is Dual GST required?
Ans. India is a federal country where both the Centre and the States have been assigned the powers to levy and collect taxes through appropriate legislation. Both the levels of Government have distinct responsibilities to perform according to the division of powers prescribed in the Constitution for which they need to raise resources. A dual GST will, therefore, be in keeping with the Constitutional requirement of fiscal federalism.

Q 9. Which authority will levy and administer GST?
Ans. Centre will levy and administer CGST & IGST while respective states will levy and administer SGST.

Q 10. Why was the Constitution of India amended recently in the context of GST?
Ans. Currently, the fiscal powers between the Centre and the States are clearly demarcated in the Constitution with almost no overlap between the respective domains. The Centre has the powers to levy tax on the manufacture of goods (except alcoholic liquor for human consumption, opium, narcotics etc.) while the States have the powers to levy tax on the sale of goods. In the case of inter-State sales, the Centre has the power to levy a tax (the Central Sales Tax) but, the tax is collected and retained entirely by the States. As for services, it is the Centre alone that  is empowered to levy service tax.
Introduction of the GST required amendments in the Constitution so as to simultaneously empower the Centre and the States to levy and collect this tax. The Constitution of India has been amended by the Constitution (one hundred and first amendment) Act, 2016 recently for this purpose. Article 246A of the Constitution empowers the Centre and the States to levy and collect the GST.

Q 11. How a particular transaction of goods and services would be taxed simultaneously under Central GST (CGST) and State GST (SGST)?
Ans. The Central GST and the State GST would be   levied simultaneously on every transaction of supply of goods and services except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits. Further, 8 both would be levied on the same price or value unlike State VAT which is levied on the value of the goods inclusive  of CENVAT. While the location of the supplier and the recipient within the country is immaterial for the purpose of CGST, SGST would be chargeable only when the supplier and the recipient are both located within the State.
llustration I: Suppose hypothetically that the rate of CGST is 10% and that of SGST is 10%. When a wholesale dealer of steel in Uttar Pradesh supplies steel bars and rods to a construction company which is also located within the same State for, say Rs. 100, the dealer would charge CGST of Rs. 10 and SGST of Rs. 10 in addition to the basic price of the goods. He would be required to deposit the CGST component into a Central Government account while the SGST portion into the account of the concerned State Government. Of course, he need not actually pay Rs. 20 (Rs. 10 + Rs. 10 ) in cash as he would be entitled to set-off this liability against the CGST or SGST paid on his purchases (say, inputs). But for paying CGST he would be allowed to use only the credit of CGST paid on his purchases while for SGST he can utilize the credit of SGST alone. In other words, CGST credit cannot, in general, be used for payment of SGST. Nor can SGST credit be used for payment of CGST.
Illustration II: Suppose, again hypothetically, that the rate of CGST is 10% and that of SGST is 10%. When an advertising company located in Mumbai supplies advertising services to a company manufacturing soap also located within the State of Maharashtra for, let us say Rs. 100, the ad company would charge CGST of Rs. 10 as well as SGST of Rs. 10 to the basic value of the service. He would be required to deposit the CGST component into a Central Government account while the SGST portion into the account of the concerned State Government. Of course, he need not again actually pay Rs. 20 (Rs. 10+Rs. 10) in cash as it would be entitled to set-off this liability against the CGST or SGST paid on his purchase (say, of inputs such as stationery, office equipment, services of an artist etc). But for paying CGST he would be allowed to use only the credit of CGST paid on its purchase while for SGST he can utilise the credit of SGST alone. In other words, CGST credit cannot, in general, be used for payment of SGST. Nor can SGST credit be used for payment of CGST.

Q 12. What are the benefits which the Country will accrue from GST?
Ans. Introduction of GST would be a very significant step in the field of indirect tax reforms in India. By amalgamating a large number of Central and State taxes into a single tax and allowing set-off of prior-stage taxes, it would mitigate the ill effects of cascading and pave the way for a common national market. For the consumers, the biggest gain would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%. Introduction of GST would also make our products competitive in the domestic and international markets. Studies show that this would instantly spur economic growth. There may also be revenue gain for the Centre and the States due to widening of the tax base, increase in trade volumes and improved 10 tax compliance. Last but not the least, this tax, because of its transparent character, would be easier to administer.

Q 13. What is IGST?
Ans. Under the GST regime, an Integrated GST (IGST) would be levied and collected by the Centre on inter-State supply of goods and services. Under Article 269A of the Constitution, the GST on supplies in the course of inter- State trade or commerce shall be levied and collected by the Government of India and such tax shall be apportioned between the Union and the States in the manner as may be provided by Parliament by law on the recommendations of the Goods and Services Tax Council.


Q 14. Who will decide rates for levy of GST?
Ans. The CGST and SGST would be levied at rates to be jointly decided by the Centre and States. The rates would be notified on the recommendations of the GST Council.

Q 15. What would be the role of GST Council?
Ans. A GST Council would be constituted comprising the Union Finance Minister (who will be the Chairman of the Council), the Minister of State (Revenue) and the State Finance/Taxation Ministers to make recommendations to the Union and the States on
(i) the taxes, cesses and surcharges levied by the Centre, the States and the local bodies which may be subsumed under GST;
(ii) the goods and services that may be subjected to or exempted from the GST;
(iii) the date on which the GST shall be levied on petroleum crude, high speed diesel, motor sprit (commonly known as petrol), natural gas and aviation turbine fuel;
(iv) model GST laws, principles of levy, apportionment of IGST and the principles that govern the place of supply;
(v) the threshold limit of turnover below which the goods and services may be exempted from GST;
(vi) the rates including floor rates with bands of GST;
(vii) any special rate or rates for a specified period to raise additional resources during any natural calamity or disaster;
(viii) special provision with respect to the North- East States, J&K, Himachal Pradesh and Uttarakhand; and
(ix) any other matter relating to the GST, as the Council may decide.

Q 16. What is the guiding principle of GST Council?
Ans. The mechanism of GST Council would ensure harmonization on different aspects of GST between the Centre and the States as well as among States. It has been provided in the Constitution (one hundred and first amendment) Act, 2016 that the GST Council, in its discharge of various functions, shall be guided by the need for a harmonized structure of GST and for the development of a harmonized national market for goods and services.

Q 17. How will decisions be taken by GST Council?
Ans. The Constitution (one hundred and first amendment) Act, 2016 provides that every decision of the GST Council shall be taken at a meeting by a majority of not less than 3/4th of the weighted votes of the Members present and voting. The vote of the Central Government shall have a weightage of 1/3rd of the votes cast and the votes of all the State Governments taken together shall have a weightage of 2/3rd of the total votes cast in that meeting. One half
of the total number of members of the GST Council shall constitute the quorum at its meetings.

Q 18. Who is liable to pay GST under the proposed GST regime?
Ans. Under the GST regime, tax is payable by the taxable person on the supply of goods and/or services. Liability to pay tax arises when the taxable person crosses the threshold exemption, i.e. Rs.10 lakhs (Rs. 5 lakhs for NE States) except in certain specified cases where the taxable person is liable to pay GST even though he has not crossed the threshold limit. The CGST / SGST is payable on all intra-State supply of goods and/or services and IGST is payable on all inter- State supply of goods and/or services. The CGST /SGST and IGST are payable at the rates specified in the Schedules to the respective Acts.

Q 19. What are the benefits available to small tax payers under the GST regime?
Ans. Tax payers with an aggregate turnover in a financial year up to [Rs.10 lakhs] would be exempt from tax. [Aggregate turnover shall include the aggregate value of all taxable and non-taxable supplies, exempt supplies and exports of goods and/or services and exclude taxes viz. GST.] Aggregate turnover shall be computed on all India basis. For NE States and Sikkim, the exemption threshold shall be [Rs. 5 lakhs]. All taxpayers eligible for threshold exemption will have the option of paying tax with input tax credit (ITC) benefits. Tax payers making inter-State supplies or paying tax on reverse charge basis shall not be eligible for threshold exemption.

Q 20. How will the goods and services be classified under GST regime?
Ans. HSN (Harmonised System of Nomenclature) code shall be used for classifying the goods under the GST regime. Taxpayers whose turnover is above Rs. 1.5 crores but below Rs. 5 crores shall use 2 digit code and the taxpayers whose turnover is Rs. 5 crores and above shall use 4 digit code. Taxpayers whose turnover is below Rs. 1.5 crores are not required to mention HSN Code in their invoices. Services will be classified as per the Services Accounting Code (SAC)

Q 21. How will imports be taxed under GST?
Ans. Imports of Goods and Services will be treated as inter-state supplies and IGST will be levied on import of goods and services into the country. The incidence of tax will follow the destination principle and the tax revenue in case of SGST will accrue to the State where the imported goods and services are consumed. Full and complete set-off 14 will be available on the GST paid on import on goods and services.

Q 22. How will Exports be treated under GST?
Ans. Exports will be treated as zero rated supplies. No tax will be payable on exports of goods or services, however credit of input tax credit will be available and same will be available as refund to the exporters.

Q 23. What is the scope of composition scheme under GST?
Ans. Small taxpayers with an aggregate turnover in a financial year up to [Rs. 50 lakhs] shall be eligible for composition levy. Under the scheme, a taxpayer shall pay tax as a percentage of his turnover during the year without the benefit of ITC. The floor rate of tax for CGST and SGST shall not be less than [1%]. A tax payer opting for composition levy shall not collect any tax from his customers. Tax payers making inter- state supplies or paying tax on reverse charge basis shall not be eligible for composition scheme.

Q 24. Whether the composition scheme will be optional or compulsory?
Ans. Optional.

Q 25. What is GSTN and its role in the GST regime?
Ans. GSTN stands for Goods and Service Tax Network (GSTN). A Special Purpose Vehicle called the GSTN has been set up to cater to the needs of GST. The GSTN shall provide a shared IT infrastructure and services to Central and State Governments, tax payers and other stakeholders for implementation of GST. The functions of the GSTN
would, inter alia, include:
(i) facilitating registration;
(ii) forwarding the returns to Central and State authorities;
(iii) computation and settlement of IGST;
(iv) matchingof tax payment details with banking network;
(v) providing various MIS reports to the Central and the State Governments based on the tax payer return information;
(vi) providing analysis of tax payers’ profile; and
(vii) running the matching engine for matching, reversal and reclaim of input tax credit.
The GSTN is developing a common GST portal and applications for registration, payment, return and MIS/ reports. The GSTN would also be integrating the common GST portal with the existing tax administration IT systems and would be building interfaces for tax payers. Further, the GSTN is developing back-end modules like assessment, audit, refund, appeal etc. for 19 States and UTs (Model II States). The CBEC and Model I States (15 States) are themselves developing their GST back-end systems.
Integration of GST front-end system with back-end systems will have to be completed and tested well in advance for making the transition smooth.

Q 26. How are the disputes going to be resolved under the GST regime?
Ans. The Constitution (one hundred and first amendment) Act, 2016 provides that the Goods and Services Tax Council shall establish a mechanism to adjudicate any dispute16
 (a) between the Government of India and one or more States; or
(b) between the Government of India and any State or States on one side and one or more other Sates on the other side; or
(c) between two or more States, arising out of the recommendations of the Council or implementation thereof.

Q 27. What are the other legislative requirements for introduction of the GST?
Ans. Suitable legislation for the levy of GST (Central GST Bill, Integrated GST Bill and State GST Bills) drawing powers from the Constitution would need to be passed by the Parliament and the State Legislatures. Unlike the Constitutional Amendment which requires 2/3rd majority, the GST Bills would need to be passed by a simple majority. Obviously, the levy of the tax can commence only after the GST law has been enacted by the Parliament and respective Legislatures.

                                       DEMAND AND RECOVERY

Q 1. Which is the applicable section for the purpose of recovery of tax short paid or not paid or amount   erroneously refunded or input tax credit wrongly availed or utilized?
Ans. Section 51A in cases where there is no invocation of fraud/suppression/mis-statement etc and Section 51B where the ingredients of fraud/suppression/mis-statement etc are present.

Q 2. Can the person chargeable with tax pay the amount of demand along-with interest before issue of notice under section 51A?
Ans. Yes. In such cases no notice can be issued by the proper officer.

Q 3. If notice is issued under Section 51A and thereafter the noticee makes payment, is there any need to adjudicate the case?
Ans. Where the person to whom a notice has been issued under sub-section (1) of section 51A, pays the tax along with interest within 30 days of issue of notice, no penalty shall be payable and all  proceedings in respect of such notice shall be deemed to be  concluded.

Q 4. What is the relevant date for issue of Show Cause Notice under Section 51A/B?
Ans. The relevant date is the date of filing of annual return  where such returns of actually filed or where such returns are not filed, the due date for filing of annual return.

Q 5. Is there any time limit to issue SCN or adjudicate the case u/s 51A/B?
Ans. There is no time limit to issue SCN. However the issuance of SCN and adjudication of the case has to be completed within the period of 3 years (for Section 51A cases) and 5 years (for Section 51B cases) from the relevant date.

Q 6. Can the person chargeable with tax pay the amount of demand along-with interest before issue of notice under section 51B?
Ans. Yes. Before issue of notice under sub section (1) or a statement under sub-section (2), a person chargeable with tax, shall have an option to pay the amount of tax along with interest and fifteen percent penalty, ascertained either on his own or informed by the proper officer, and on such payment, no notice shall be issued with respect to the tax so paid.

Q 7. If notice is issued under Section 51B and thereafter the noticee makes payment, is there any need to adjudicate the case?
Ans. No if tax/interest and penalty has been paid. Where the person to whom a notice has been under sub-section (1) issued, pays the tax along with interest with twenty five percent penalty within 30 days of issue of notice all proceedings in respect of such notice shall be deemed to be concluded.

Q 8. In case a notice is adjudicated under Section 51B and order issued confirming tax demand and penalty, does the noticee have any option to pay reduced penalty?
Ans.Yes.He needs to pay tax/interest and 50% of penalty within 30 days of communication of order. Where any person served with an order issued under sub-section(6)of Section 51B pays the tax along with interest and a penalty equivalent to fifty percent of such tax within thirty days of the communication of order all proceedings in respect of the said tax shall be deemed to be concluded.

Q 9. What happens in cases (both under Section 51A & B) where notice is issued but order has not been passed within 3 years (51A)/5 years (51B)?
Ans. The Model GST Law provides for deemed conclusion of the adjudication proceedings if the order is not issued within three  ears as provided for in section 51A (7) or within five years as provided for in section 51B (7).

Q 10. What happens if a person collects tax from another person but does not deposit the same with Government?
Ans. As per Section 52 of MGL, every person who has collected from any other person any amount as representing the tax under this Act, shall deposit the said amount to the credit of the Central or a State Government, regardless of whether the supplies in respect of which such amount was collected are taxable or not.

Q 11. In case the person does not deposit tax collected in contravention of Section 52, what is the proper course of action to be taken?
Ans. Notice to be issued. Principles of natural justice to be followed and order to be issued. It is to be noted that such order has to be invariably issued within 1 year of date of issue of notice. However there is no time limit for issue of show cause notice. Thus, in such cases duty can be recovered even after ten years.

Q 12. Is there any time limit to issue notice in cases under Section 52- tax collected but not paid?
Ans. No. There is no time limit. Notice can be issued on detection of such cases without any time limit. Once notice is issued, the order has to be passed within 1 year from the date of issue of notice.

Q 13. What are the modes of recovery of tax available to the proper officer?
Ans. The following options are available to the proper officer:
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;
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;
c) 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 credit of the Central or a State  government;
d) The proper officer may, on an authorization by the competent authority, 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; if the dues remains unpaid for a period of thirty days after any such distress, he 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 pay 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 and on receipt of such certificate, the Collector shall proceed to recover from such person the amount specified as if it were an arrear of land revenue.

Q 14. Can the proper officer allow payment of tax dues in installments?
Ans. Yes, in cases other than self-assessed tax.The  Commissioner/Chief Commissioner may extend the time for payment or allow payment of any amount due under the Act, other than the amount due as per the liability self-assessed in any return, by such person in monthly instalments not exceeding twenty four, subject to payment of interest under section 36 with such restrictions and conditions as may be prescribed. However, where there is default in payment of any one instalment on its due date, the whole outstanding balance payable on such date shall become due and payable forthwith and recovered without any further notice.

Q 15. What happens in cases where the tax demand confirmed is enhanced in appeal/revision proceedings?
Ans. The notice of demand is required to be served only in respect of the enhanced dues. In so far as the amount already confirmed prior to disposal of appeal/revision, the recovery proceedings may be continued from the stage at which such proceedings stood immediately before such disposal.

Q 16. If a person liable to pay tax has certain tax liability and in the meantime he transfers his business to another person, what happens to the existing tax liability?
Ans. Where any person liable to pay tax, transfers his business in whole/part, by sale, gift, lease, leave and license, hire, or in any other manner, then such person and the person to whom the business is transferred shall  jointly and severally be liable to pay the tax, interest or penalty due from the taxable person up to the time of such transfer, whether such dues has been determined before such transfer, but has remained unpaid or is determined thereafter.

Q 17. What happens to tax dues where the Company (taxable person) goes into liquidation?
Ans. When any company is wound up and any tax or other dues determined whether before or after liquidation that remains unrecovered, every person who was a director of the company during the period for which the tax was due, shall jointly and severally be liable for payment of dues unless he proves to the satisfaction of the Commissioner that such non-recovery is not attributed to any gross neglect, misfeasance or breach of duties on his part in relation to the affairs of the company.

Q 18. What is the liability of partners of a partnership firm (Taxable person) to pay outstanding tax?
Ans. Partners of any firm shall jointly and severally liable for payment of any tax, interest or penalty. Firm/ partner shall intimate the retirement of any partner to the Commissioner by a notice in writing – liability to pay tax, interest or penalty up to the date of such retirement, whether determined on that date or subsequently, shall be on such partner. If no 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.

Q 19. What happens to the tax liability of a taxable person, whose business is carried on by any guardian / trustee or agent of a minor?
Ans. Where the business in respect of which any tax is payable is carried on by any guardian / trustee / agent of a minor or other incapacitated person on behalf of and for the benefit of such minor/incapacitated person, the tax, interest or penalty shall be levied upon and recoverable from such guardian / trustee / agent.

Q 20. What happens when the estate of a taxable person is under the control of Court of Wards?
Ans. Where 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/Administrator General / Official Trustee / Receiver or Manager appointed under any order of a Court, the tax, interest or penalty shall be levied and recoverable from such Court of Wards/ Administrator General / Official Trustee / Receiver or Manager to the same extent as it would be determined and recoverable from a taxable perso

                                            REVIEW AND APPEAL

Q 1. Whether any person aggrieved by any order or decision passed against him has the right to appeal?
Ans. Yes. Any person aggrieved by any order or decision passed against him has the right to appeal. It must be an order or decision passed by an “adjudicating authority”. However, some decisions or orders (as provided for in Section 93) are not appealable.

Q 2. When Commissioner of CGST feels that the order passed is not legal and proper, whether he can revise the order himself?.
Ans. No. The Commissioner of CGST cannot revise the order. In the model law, for CGST and SGST, there are different provisions in this regard. For CGST, as per Section 79(2), the Commissioner of CGST if he finds an order or decision (passed by an adjudicating authority) to be not legal or proper, can pass an order setting out the points for determination where he is of the view that the order is not legal and proper and directing a GST officer sub-ordinate to him to file an application to First Appellate Authority (FAA). Such application is then treated by the FAA as if it were an appeal.

Q 3. What is the time limit to file appeal to First Appellate authority?
Ans. The time limit is fixed as 3 months from the date of communication of order or decision.

Q 4. Whether this time limit applies even for he departmental appeal/application filed consequent to order of Commissioner of CGST?
Ans. Yes. It applies even for such applications filed which are to be treated as appeal and all the provisions of appeal are made applicable for such application as well.

Q 5. Whether the first appellate authority has any powers to condone the delay in filing appeal?
Ans. Yes. He can condone a delay of up to one month from the end of the prescribed period of 3 months for filing the appeal (3+1), provided there is “sufficient cause” as laid down in the proviso to section 79(4).

Q 6. Whether the first appellate authority has any powers to allow additional grounds not specified in the appeal memo?
Ans. Yes. He has the powers to allow additional grounds if he is satisfied that the omission was not wilful or unreasonable.

Q 7. The order passed by First Appellate Authority has to be communicated to whom?
Ans. First appellate authority has to communicate the copy of order to the appellant and the adjudicating authority with a copy to jurisdictional Commissioner of CGST and SGST.

Q 8. What is the amount of mandatory pre-deposit which should be made alongwith every appeal?
Ans. 10% of amount in dispute (however, for SGST, there are additional provisions for which the model law may be referred to, see question no 12 and 13).

Q 9. What is the amount in dispute?
Ans. As per explanation to Section 79(6) of MGL, the expression “amount in dispute” shall include–
(i) amount determined under section 46 or 47 or 48 or 51;
(ii) amount payable under rule——-of the GST Credit Rules 201…; and
(iii) amount of fee levied or penalty imposed.
Q 10.Whether in an appeal the FAA can pass an order enhancing the quantum of duty/fine/penalty/reduce the amount of refund/ITC from the one passed by the original authority?
Ans. The FAA is empowered to pass an order enhancing the fees or penalty or fine in lieu of confiscation or reducing the amount of refund or input tax credit provided the appellant has been given reasonable opportunity of showing cause against the proposed detrimental order. (First Proviso to Section 79(10)). In so far as the question of enhancing the duty or deciding wrong a ailment of ITC is concerned, the FAA can do so only after giving specific SCN to the appellant against the proposed order and the order itself should be passed within the time limit specified under Section 51. (Second Proviso to Section 79(10).

Q 11. (only for SGST law) What is the provision relating to pre-deposit before filing appeal to fileappeal to First Appellate Authority under SGST?
Ans. 10% of the amount in dispute has to paid before filing appeal. This is common for both CGST and SGST. However, for SGST, in addition to this 10%, the appellant has to also pay “ in full, such part of the amount of tax, interest, fine, fee and penalty arising from the impugned order, as is admitted by him” Further, if the Commissioner of SGST considers any case to be a “serious case”, the departmental authority can apply to the first Appellate Authority for ordering a higher amount of pre-deposit not exceeding 50% of the amount in dispute.

Q 12. (only for SGST law) What is the meaning of “serious case”?
Ans. It is defined to mean a case involving a disputed tax liability of not less than Rs. 25 Crores and where the Commissioner of SGST is of the opinion (for reasons to be recorded in writing) that the department has a very good case against the taxpayer.

Q 13. Can the Commissioner of SGST revise any order passed under the Act by his subordinates?
Ans. Yes. Section 80(1) of SGST Act authorises Commissioner to call for and examine any order passed by his subordinates and in case he considers the order of the lower authority to be erroneous in so far as it is prejudicial to revenue, he can revise the order after giving opportunity of being heard to the noticee.

Q 14. Can the Commissioner of SGST order for staying of operation of any order passed by his subordinates pending such revision?
Ans. Yes.

Q 15. Are there any fetters to the powers of Commissioner under SGST to revise orders of subordinates?
Ans. Yes. The Commissioner shall not revise any order if (a) the order has been subject to an appeal under section 79 or under section 82 or under section 87 or under section 88; or
(b) more than three years have expired after the passing of the decision or order sought to be revised. For details of these and some other “fetters”, please refer to Section 80 of the MDL.

Q 16. When the Tribunal is having powers to refuse to admit the appeal?
Ans. In cases where the appeal involves –
• tax amount or
• input tax credit or
• the difference in tax or
• the difference in input tax credit involved or
• amount of fine,
• amount of fees or
• amount of penalty ordered less than Rs. 1,00,000/-, the Tribunal has discretion to refuse to admit such appeal.(Section82(2) of MGL)

Q 17. What is the time limit within which appeal has to be filed before the Tribunal?
Ans:  3 months from the date of receipt of the order appealed  against.

Q 18. Can the Tribunal condone delay in filing appeal before it beyond the period of 3 months? If so till what time?
Ans. Yes the Tribunal has powers to condone delay of any period of time beyond the period of 3 months providedsufficient case is shown by the appellant for such delay.

Q 19. What is the time limit for filing memorandum of cross objections before Tribunal?
Ans. 45 days from the date of receipt of appeal.

Q 20. Bring out the differences in appeal (to Tribunal) provisions under CGST & SGST?
(i) The provisions under Section 82 of SGST Act for appeal by any person aggrieved by the order or decision passed against him by First Appellate Authority are essentially similar to provisions contained in Section 82 of CGST Act and discussions made therein are equally applicable to section 82 of SGST as well.
(ii) In addition to the above the provision of Section 82 of SGST Act also covers an appeal to be filed to Appellate Tribunal against the revisionary order passed by Commissioner.
(iii) However the provisions relating to appeal by the revenue against the order of first appellate authority as CGST Act is not provided in SGST Act since the revisionary powers (against the orders passed by the FAA, who in the states is likely to be “subordinate” to the Commissioner) is provided to Commissioner to SGST.
(iv) In addition, the person aggrieved under SGST Act has to pre-deposit full deposit of admitted tax, interest, fine, fee and penalty arising from the impugned order.

Q 21. Whether interest becomes payable on refund of pre-deposit amount?
Ans. Yes. As per Section 85 of MGL Where an amount deposited by the appellant under sub-section (6)/(4) of section 79 or under sub-section (10)/(7) of section 82 is required to be refunded consequent to any order of the First Appellate Authority or of the Appellate Tribunal, as the case may be, interest at the rate specified under section 39 shall be payable in respect of such refund from the date of payment of the amount till the date of refund of such amount.

Q 22. An appeal from the order of Tribunal lies to which forum?
Ans. High Court if the High Court is satisfied that such an appeal involves a substantial question of law. (Section 87(1)). However, if the order passed by the Tribunal relates  to a matter where two or more States, or a State and Centre, have a difference of views regarding the treatmentof a transaction(s) being intra-State or inter-State; or a matter where two or more States, or a State and enter, have a difference of views regarding place of supply, then appeal against such order shall lie to the Supreme Court and not High Court.

Q 23. What is the time limit for filing an appeal before the High Court?
Ans.180 days from the date of receipt of the order appealed against. However, the High Court has the power to condone further delay on sufficient cause being shown.