The Goods and Services Tax (GST) Act, 2017

The Goods and Services Tax (GST) Act, 2017

No. 12 of 2017

An Act to make a provision for levy and collection of tax on intra-State supply of goods or services or both by the Central Government and for matters connected therewith or incidental thereto.

Here are the objectives, key features, and implications of the Goods and Services Tax Act, 2017:

Objectives:

1. To create a unified market: The GST Act aims to create a unified market across the country by subsuming multiple taxes and levies.

2. To simplify the tax structure: The Act simplifies the tax structure by reducing the number of taxes and levies.

3. To reduce tax evasion: The Act aims to reduce tax evasion by introducing a robust IT infrastructure and a system of input tax credits.

4. To increase tax compliance: The Act aims to increase tax compliance by making it easier for taxpayers to comply with the tax laws.

Key Features:

1. Dual GST: The Act provides for a dual GST structure, where both the Centre and the States will levy GST.

2. CGST, SGST, and IGST: The Act provides for three types of GST: Central GST (CGST), State GST (SGST), and Integrated GST (IGST).

3. Input Tax Credit: The Act provides for input tax credits, which allow taxpayers to claim credits for taxes paid on inputs.

4. GST Council: The Act provides for a GST Council, which will be responsible for making recommendations on GST rates, exemptions, and other matters.

5. GST Network: The Act provides for a GST Network, which will be responsible for providing IT infrastructure and services to taxpayers.

Implications:

1. Simplified tax structure: The GST Act simplifies the tax structure by reducing the number of taxes and levies.

2. Increased tax compliance: The Act aims to increase tax compliance by making it easier for taxpayers to comply with the tax laws.

3. Reduced tax evasion: The Act aims to reduce tax evasion by introducing a robust IT infrastructure and a system of input tax credits.

4. Increased revenue: The Act is expected to increase revenue for the Centre and the States.

5. Impact on businesses: The Act may have a significant impact on businesses, particularly small and medium-sized enterprises, which may need to adapt to the new tax regime.

6. Impact on consumers: The Act may have a significant impact on consumers, particularly those who purchase goods and services that are subject to GST.

7. Impact on the economy: The Act is expected to have a positive impact on the economy, particularly in the long term, by increasing tax compliance and reducing tax evasion.

Enacted by Parliament in the Sixty-eighth Year of the Republic of India as follows:

CHAPTER I - PRELIMINARY

1. Short title, extent and commencement: This Act may be called the Central Goods and Services Tax Act, 2017.

2. Definitions: In this Act, unless the context otherwise requires,---

(a) "actionable claim" shall have the same meaning as assigned to it in section 3 of the Transfer of Property Act, 1882;

(b) "address of delivery" means the address of the recipient of goods or services or both indicated on the tax invoice issued by a registered person for delivery of such goods or services or both;

(d) "agent" means a person who carries on the business of supply or receipt of goods or services or both on behalf of another, whether disclosed or not, and includes a factor, broker, commission agent, arhatia, del credere agent, an auctioneer or any other mercantile agent, by whatever name called, and whether of the same description as above or not;

(e) "aggregate turnover" means the aggregate value of all taxable supplies (excluding the value of inward supplies on which tax is payable by a person on reverse charge basis), exempt supplies, exports of goods or services or both and inter-State supplies of persons having the same Permanent Account Number, to be computed on all India basis but excludes central tax, State tax, Union territory tax, integrated tax and cess;

(f) "agriculturist" means an individual or a Hindu Undivided Family who undertakes cultivation of land—

(i) by own labour; or

(ii) by the labour of family; or

(iii) by servants on wages payable in cash or kind or by both;

(g) "appointed day" means the date on which the provisions of this Act shall come into force;

(h) "assessment" means determination of tax liability under this Act and includes self-assessment, re-assessment, provisional assessment, summary assessment and best judgment assessment;

(i) "associated enterprises" shall have the same meaning as assigned to it in section 92A of the Income-tax Act, 1961;

(j) "audit" means the examination of records, returns and other documents maintained or furnished by the registered person under this Act or the rules made thereunder or under any other law for the time being in force to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess his compliance with the provisions of this Act or the rules made thereunder.

CHAPTER II - ADMINISTRATION

1. Officers under this Act: There shall be the following classes of officers under this Act, namely:—

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

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

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

(e) Additional Commissioners of Central Tax or Joint Directors General of Central Tax;

(f) Deputy Commissioners of Central Tax or Deputy Directors of Central Tax;

(g) Assistant Commissioners of Central Tax or Assistant Directors of Central Tax;

(h) Superintendents of Central Tax;

(i) Inspectors of Central Tax;

(j) Appraisers of Central Tax;

(k) Auditors of Central Tax;

(l) Any other class of officers as may be appointed for the purposes of this Act.

2. Powers and duties of officers: Subject to such conditions and limitations as the Board may impose, an officer of central tax may exercise the powers and discharge the duties conferred or imposed on him under this Act.

3. Powers of inspection, search and seizure: (1) Where the proper officer, not below the rank of Joint Commissioner, has reasons to believe that—

(a) a taxable person has suppressed any transaction relating to supply of goods or services or both in contravention of this Act; or

(b) a taxable person has claimed input tax credit in contravention of the provisions of this Act; or

(c) any person engaged in the business of supplying goods or services or both has issued any invoice or document by using the registration number of another registered person; or

(d) a taxable person is indulging in contravand activities,

he may authorise in writing any other officer of central tax to inspect any places of business of the taxable person or of any other person

CHAPTER III - LEVY AND COLLECTION OF TAX

1. Levy and collection of tax: (1) There shall be levied a tax called the central goods and services tax on all intra-State supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 and at such rates, not exceeding twenty per cent, as may be notified by the Government on the recommendations of the Council.

(2) The central tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the Government on the recommendations of the Council.

2. Persons liable for registration: (1) Every supplier shall be liable to be registered under this Act in the State or Union territory, other than special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds twenty lakh rupees.

(2) Every supplier shall be liable to be registered under this Act in the State or Union territory of special category States, from where he makes a taxable supply of goods or services or both, if his aggregate turnover in a financial year exceeds ten lakh rupees.

CHAPTER IV - TIME AND VALUE OF SUPPLY

1. Time of supply: The time of supply of goods or services or both shall be the earlier of the following dates, namely:—

(a) the date of issue of invoice by the supplier or the last date on which he is required to issue the invoice under sub-section (1) of section 31, whichever is earlier; or

(b) the date on which the supplier receives the payment with respect to the supply.

2. Value of supply: The value of supply of goods or services or both shall be the transaction value, which is the price actually paid or payable for the said supply of goods or services or both, where the supplier and the recipient of the supply are not related and the price is the sole consideration for the supply.

CHAPTER V - INPUT TAX CREDIT

1. Eligibility and conditions for taking input tax credit: Every registered person shall be entitled to take credit of input tax charged on any supply of goods or services or both to him which are used or intended to be used in the course or furtherance of his business, subject to such conditions and restrictions as may be prescribed.

2. Credit of input tax: (1) The input tax credit shall be credited to the electronic credit ledger of the registered person.

(2) The amount of credit available in the electronic credit ledger of a registered person shall be reduced by the amount of tax payable by him by debiting the said amount from the said ledger.

CHAPTER VI - REGISTRATION

1. Registration: (1) Every person who is liable to be registered under section 22 or section 24 shall apply for registration in every such State or Union territory in which he is so liable within thirty days from the date on which he becomes liable to registration.

(2) The application for registration shall be made in such form and manner as may be prescribed.

2. Verification of the application and approval: (1) The application for registration shall be verified in such manner as may be prescribed.

(2) Upon verification of the application for registration, the proper officer shall grant registration to the applicant in such form and manner as may be prescribed.

CHAPTER VII - TAX INVOICE, CREDIT AND DEBIT NOTES

1. Tax invoice: (1) A registered person supplying taxable goods or services or both shall, before or at the time of issuance of an invoice for supply, issue a tax invoice.

(2) A tax invoice shall be issued by the supplier in accordance with the provisions of section 31 and shall contain the following details, namely:—

(a) name, address and Goods and Services Tax Identification Number of the supplier;

(b) a consecutive serial number, in one or multiple series, containing alphabets or numerals or special characters hyphen or dash and slash symbolised as “-“ or “/”, respectively, unique for a financial year;

(d) name, address and Goods and Services Tax Identification Number of the recipient;

(e) name and address of the recipient and the address of delivery, along with the name of State and its code, if such recipient is unregistered and where the value of supply is fifty thousand rupees or more;

(f) harmonised system of nomenclature code for goods or services;

(g) description of goods or services;

(h) quantity of goods or services;

(i) total value of supply of goods or services;

(j) taxable value of supply of goods or services taking into account discount or abatement, if any;

(k) rate of tax (central tax, State tax, Union territory tax or

CHAPTER VIII - ACCOUNTS AND RECORDS

1. Accounts and records: Every registered person shall keep and maintain, at his principal place of business, as mentioned in the certificate of registration, a true and correct account of—

(a) production or manufacture of goods;

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

(d) input tax credit availed;

(e) output tax payable and paid; and

(f) such other particulars as may be prescribed:

CHAPTER IX - RETURNS

1. Returns: Every registered person shall furnish, electronically, to the Government, the following returns, namely:—

(a) such details of outward supplies of goods or services or both during a tax period as may be prescribed;

(b) such details of inward supplies of goods or services or both during a tax period as may be prescribed;

CHAPTER X - PAYMENT OF TAX

1. Payment of tax: (1) Every registered person shall pay the tax due from him in accordance with the provisions of this Act.

(2) The tax due from a registered person shall be paid by debiting the electronic credit ledger or electronic cash ledger maintained by him.

CHAPTER XI - REFUNDS

1. Refunds: (1) Any person claiming refund of any tax and interest, if any, paid on such tax or any other amount paid by him, may make an application in such form and manner as may be prescribed before the expiry of two years from the relevant date.

(2) A registered person may claim refund of any unutilised input tax credit at the end of any tax period.

CHAPTER XII - ASSESSMENT

1. Assessment: (1) The proper officer may, on his own motion, assess the tax liability of a registered person to the best of his judgment for a tax period, if he has failed to furnish the return required under section 39.

(2) The proper officer shall issue a notice to the registered person within three years from the due date for furnishing the annual return for the tax period specifying the tax payable by him.

CHAPTER XIII - AUDIT

1. Audit: (1) The Commissioner or an officer authorised by him may conduct audit of a registered person in such manner as may be prescribed.

(2) The proper officer may conduct audit of a registered person for such periods as may be prescribed and with such frequency as may be prescribed.

CHAPTER XIV - INSPECTION, SEARCH, SEIZURE AND ARREST

1. Inspection: (1) The proper officer may, by an order in writing, authorise any officer subordinate to him to inspect any place of business of a taxable person or a person liable to pay tax.

(2) The proper officer may, by an order in writing, authorise any officer subordinate to him to search and seize any goods, books of account, documents, computers, computer programs or other electronic devices and equipment in relation to transactions specified in sub-section (1).

CHAPTER XV - DEMANDS AND RECOVERY

1. Demands and recovery: (1) When a taxable person fails to pay to the Government any tax due from him in accordance with the provisions of this Act, the proper officer may issue to such person a notice in writing, requiring him to show cause why the amount specified in the notice should not be paid by him.

(2) The proper officer shall, after considering the representation, if any, made by the person in pursuance of the notice, determine the amount of tax due from such person which shall be paid by him along with the interest and penalty payable in respect of the said amount.

CHAPTER XVI - OFFENCES AND PENALTIES

1. Offences and penalties: (1) Whoever commits any of the following offences, namely:—

(a) supplies any goods or services or both without issue of any invoice or issues any false or misleading invoice; or

(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

CHAPTER XVII - ADVANCE RULING

1. Advance ruling: (1) An applicant desirous of obtaining an advance ruling may make an application in such form and manner as may be prescribed, stating the question on which the advance ruling is sought.

(2) The application shall be made to the Authority as may be prescribed.

CHAPTER XVIII - APPEALS AND REVISION

1. Appeals to Appellate Authority: (1) Any person aggrieved by any decision or order passed under this Act by an adjudicating authority may appeal to such Appellate Authority as may be prescribed.

(2) The Appellate Authority shall, after giving the parties to the appeal an opportunity of being heard, pass such order as it thinks fit, confirming, modifying or annulling the decision or order appealed against.

CHAPTER XIX - OFFENCES AND PENALTIES

1. Offences and penalties: (1) Whoever commits any of the following offences, namely:—

(a) supplies any goods or services or both without issue of any invoice or issues any false or misleading invoice; or

(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; or

(c) 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; or

(d) evades payment of any tax, penalty or interest payable under this Act; or

(e) falsifies or destroys any account or record, or furnishes any false account or record with the intention of evading payment of tax, penalty or interest payable under this Act; or

(f) obstructs or prevents any officer in the discharge of his duties under this Act; or

(g) acquires possession of, or in any way concerns himself with, any property which he knows or has reason to believe is liable to confiscation under this Act,

shall be punishable—

(i) in case of an offence under clause (a) or clause (b) or clause (c) or clause (d) of sub-section (1), with a penalty extending to twenty-five thousand rupees;

(ii) in case of an offence under clause (e) or clause (f) or clause (g) of sub-section (1), 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.

CHAPTER XX - TRANSITIONAL PROVISIONS

1. Transitional provisions: (1) The provisions of this Act shall apply to the supply of goods or services or both made on or after the appointed day.

(2) The provisions of this Act shall also apply to the supply of goods or services or both made before the appointed day, if—

(a) the invoice for the same has been issued within the period of thirty days immediately preceding the appointed day; or

(b) the payment for the same has been received within the period of thirty days immediately preceding the appointed day.

CHAPTER XXI - MISCELLANEOUS

1. Miscellaneous: (1) The Central Government may, by notification, make rules for carrying out the provisions of this Act.

(2) Without prejudice to the generality of the provisions of sub-section (1), the Central Government may make rules for all or any of the matters which by this Act are required to be, or may be, prescribed or in respect of which provision is to be or may be made by rules.

CHAPTER XXII - AMENDMENTS TO THE CENTRAL EXCISE ACT, 1944

1. Amendments to the Central Excise Act, 1944: (1) The Central Excise Act, 1944 (1 of 1944) shall be amended in the manner specified in the First Schedule.

(2) The amendments made to the Central Excise Act, 1944 (1 of 1944) shall come into force on the appointed day.

CHAPTER XXIII - REPEAL AND SAVINGS

1. Repeal and savings: (1) The following Acts are hereby repealed, namely:—

(a) the Central Excise Act, 1944 (1 of 1944);

(b) the Central Sales Tax Act, 1956 (74 of 1956);

c) the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957);

(d) the Additional Duties of Excise (Textiles and Textile Articles) Act, 1978 (40 of 1978);

(e) the Central Excise Tariff Act, 1985 (5 of 1986);

(f) the Central Sales Tax (Amendment) Act, 2002 (102 of 2002);

(g) the Customs Tariff Act, 1975 (51 of 1975);

(h) the Customs Act, 1962 (52 of 1962);

(i) the Central Goods and Services Tax Act, 2016 (12 of 2017);

(j) the Integrated Goods and Services Tax Act, 2016 (13 of 2017);

(k) the Union Territory Goods and Services Tax Act, 2016 (14 of 2017);

(l) the Goods and Services Tax (Compensation to States) Act, 2016 (15 of 2017).

SCHEDULES

FIRST SCHEDULE - AMENDMENTS TO THE CENTRAL EXCISE ACT, 1944

SECOND SCHEDULE - AMENDMENTS TO THE CENTRAL SALES TAX ACT, 1956_

THIRD SCHEDULE - AMENDMENTS TO THE ADDITIONAL DUTIES OF EXCISE (GOODS OF SPECIAL IMPORTANCE) ACT, 1957_

FOURTH SCHEDULE - AMENDMENTS TO THE ADDITIONAL DUTIES OF EXCISE (TEXTILES AND TEXTILE ARTICLES) ACT, 1978_

FIFTH SCHEDULE - AMENDMENTS TO THE CENTRAL EXCISE TARIFF ACT, 1985_

SIXTH SCHEDULE - AMENDMENTS TO THE CUSTOMS TARIFF ACT, 1975_

SEVENTH SCHEDULE - AMENDMENTS TO THE CUSTOMS ACT, 1962_

EIGHTH SCHEDULE - LIST OF GOODS AND SERVICES TAX COUNCIL_

Thanks and Regards,

SS.Aravindan
TALENTS INFINITE TALENTS (TIT).
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