GST Goods and Service Tax India - Refund E-commerce Job Work Accounts Audit

Goods and Service Tax

Presented byAnkit Kr Garg

Topics Covered:1. Chapter X – Transfer of ITC

2. Chapter XI – Refunds

3. Chapter XII - Accounts & Records

4. Chapter XIII - Special Procedure for Job Work

5. Chapter XIV - E-commerce

6. Chapter XVI - Audit

Chapter X – Transfer of Input Tax Credit:-

Section 47. Transfer of input tax credit:On utilization of input tax credit availed under the CGST Act for payment of tax dues

under the IGST Act as per section 44(5), the amount collected as CGST shall stand reduced

by an amount equal to the credit so utilized and the Central Government shall transfer an

amount equal to the amount so reduced from the CGST account to the IGST account in the

manner and time as may be prescribed.

Section 47. Transfer of input tax credit:

IGST

Cental Govt

State GovtInternal

Adustment between

CG and SG

Chapter XI

Refunds

Chapter XI - Refunds

Section 48(3):- Cases where refund can be granted

Export including Zero Rated Supplies

When there is inverted duty structure

Input at suppose

18%

Output at

suppose 6%

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 that regard to the

proper officer of before the expiry of 2 years from the

relevant date in such form and in such manner as

may be prescribed:

PROVIDED that a registered taxable person, claiming

refund of any balance in the electronic cash ledger as

per section 44(6), may claim such refund in the return

furnished u/s 34 in such manner as may be prescribed.

AnalysisEarlier in Central Excise act there was a time

limit of maximum 1 year for claiming the refund

now it has been increased to 2 years.

Further, this revised GST law does not provide

time limit relief for amounts paid under protest.

This proviso provides for refund of balance u/s

44(6) which states that The balance in the cash or

credit ledger after payment of tax, interest,

penalty, fee or any other amount payable under

the Act

AnalysisSection 48(1). Refund of Taxes


Chapter XI – Refunds

Section 48(2). Refund of Taxes to United Nations AgenciesThis section provides refund window to UN and other foreign govt bodies like

embassies. (other org specified under section 49) Presently also the UN and govt bodies

can claim refund of taxes paid by them at the time of receipt of supply. This section

provides time limit of 6 months from the last day of the month in which such supply was

received.

There is not tax on output services

Input Goods and Services

The application shall be accompanied by—

(a) such documentary evidence as may be

prescribed to establish that a refund is due to the

applicant, and

(b) such documentary or other evidence as the

applicant may furnish to establish that

• the amount of tax / interest was paid by him

and

• the incidence of such tax and interest had not

been passed on to any other person:

AnalysisWith the refund application evidences are

required that tax was paid by him and the

incidence of such tax has not been passed.

This section states the Doctrine of Unjust

Enrichment. (becoming rich unjustifiably on

the expense of other person. CA/Cost

Accountant certificate may be required.)

Further proviso to this section states that if

the refund claimed is less than Rs. 5 Lac then

no evidences will be required. Self declaration

will suffice.

AnalysisSection 48 Refund of Taxes


If, on receipt of any such application, the proper officer is satisfied that the amount claimed as refund is

refundable, he may make an order accordingly and the amount so determined shall be

Section 48(5) & (8). Refund of Taxes

In Case of Doctrine of Unjust Enrichment

If assesse proves that burden of tax has not been passed

Refund shall be credited to the Consumer Welfare Fund

Refund shall be credited to account of assessee

if such amount is relatable to refund of –

a) tax on goods / services exported or on inputs or input services used in the export

b) unutilized input tax credit

c) tax paid on a supply which is not provided and for which invoice has not been issued;

d) tax in pursuance of section 70 (tax wrongfully collected and deposited)

e) the tax /interest/other amount if he had not passed on the incidence

Chapter XI Refunds

Notwithstanding anything contained in sub-section (5),

• the proper officer may,

• in the case of any claim for refund on account of export

• made by registered taxable persons, other than such category of registered taxable persons as

may be notified in this behalf,

• refund on a provisional basis 90% (earlier 80%) of the amount so claimed,

• excluding the amount of input tax credit provisionally accepted

• and thereafter make an order under sub-section (5) for final settlement of the refund claim after

due verification of documents.

Sub-section (7) provides the time limit of 60 days for issue of order of refund. Earlier it was 90 days

which is not decreased in Revised GST law.

Section 48(6). Provisional Refund in Export


Where any refund is due to a registered taxable

person who has defaulted in furnishing any

return or who is required to pay any tax,

interest or penalty, which has not been stayed

by any by the specified date, the proper officer

may—

(a) withhold payment of refund due

(b) deduct from the refund due, any tax,

interest, penalty, fee which is remaining

unpaid.

Section 48(10). Withholding of refund


Where an order giving rise to a refund is the

subject matter of an appeal or where any other

proceeding under this Act is pending and the

Commissioner is of the opinion that grant of such

refund is likely to adversely affect the revenue on

account of malfeasance or fraud committed, he

may, withhold the refund till such time as he may

determine.

Section 48(11)&(12). Withholding of Refund

Powers of Department to Withhold Refund In Interest Of Revenue


Section 48(13) : Casual taxable personsRefund to Casual taxable person or a non-resident taxable person shall not be granted

unless such person has, in respect of the entire period for which the certificate of

registration granted to him had remained in force, furnished all the returns required

under section 34.

Non resident having no fixed place of Business in India

Indian seller not having fixed place of business in the state where

supplying

Section 50. Interest on delayed refundsIf any tax ordered to be refunded under section 48 is not refunded within sixty days from the

date of receipt of application under sub-section (1) of that section, interest at such rate as may

be specified 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.

Date of Receipt of Applicatio

n

Date before which refund shall be

done

Actual date of refund--60

days--Period for which interest on refundable amount shall be granted


Chapter XII – Accounts & Records

Section 53. Accounts and other records53(1) Every registered taxable person shall keep and maintain, at his principal place of

Business (all PPBs), as mentioned in the certificate of registration, a true and correct account

of:-1.

Inward Supply

2. Production

manufactu

re

3. Stock

of Goods

4. Outward supply

6. Output tax payable

5. Input tax credit Proviso allows to maintain such

records electronically also


Section 53. Accounts and other records53(4)Every registered taxable person whose turnover during a financial year exceeds the

prescribed limit shall get his accounts audited by a chartered accountant or a cost accountant

and shall submit to the proper officer a copy of the audited annual accounts, the

reconciliation statement under sub-section (2) of section 39 and such other documents in the

form and manner as may be prescribed in this behalf.

Effect of non maintenance:-

the proper officer shall determine the amount of tax payable on the goods and/or services that

are not accounted for, as if such goods and/or services had been supplied by such person.


Section 53. Accounts and other records53(6)Every owner or operator of warehouse or godown or any other place used for storage of

goods irrespective of whether he is a registered taxable person or not shall maintain records

of consigner, consignee and other relevant details of the goods as may be prescribed..


Section 54. Period of retention of

accounts

In Normal cases In case of any

appeal/ hearing

60 Months (5 years) from the due date of filing of

annual returnIf the annual returns for

the FY 2017-18 are filed on 30.11.2018, then the books of account and

other records are to be maintained till 30.11.2023.

1 year after disposal of

appeal/ proceedings or hearings

60 Months (5 years) from the due date

of filing of annual return

Whichever later

Chapter XIII – Job WorkSection 55. Special procedure for removal of goods for certain purposes2(62) “job work” means undertaking any treatment or process by a person on goods belonging to another registered taxable person and the expression “job worker” shall be construed accordingly;

Chapter XIII – Job WorkSection 55. Special procedure for removal of goods for certain purposes•A registered taxable person (“principal”) may, under intimation and subject to such

conditions as may be prescribed,

•send any inputs and/or capital goods,

•without payment of tax,

•to a job worker

•for job-work and from there subsequently send to another job worker and likewise,


Section 55. Bringing Back the inputs

bring back inputs, after completion of job-work or otherwise, and/or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out, to any of his place of business, without payment of tax;

supply such inputs, after completion of job-work or otherwise, and/or capital goods, other than moulds and dies, jigs and fixtures, or tools, within one year and three years, respectively, of their being sent out from the place of business of a job-worker on payment of tax within India/export.

PROVIDED that the “principal” shall not supply the goods from the place of business of a job worker unless the

said “principal” declares the place of business of the job-worker as his additional place of business except in a

case-

(i) where the job worker is registered under section 23 ; or

(ii) where the “principal” is engaged in the supply of such goods as may be notified by the Commissioner in this

behalf.

Section 55. Special procedure for removal of goods for certain purposes55(2)The responsibility for accountability of the inputs and/or capital

goods shall lie with the “principal”.

Chapter XIII – Job Work

Chapter XIII – Job WorkSection 55. When Inputs transferred are not received back

within time limit• Where the inputs/capital goods sent for job-work are not received back by the

“principal” after completion of job-work or otherwise

or

• are not supplied from the place of business of the job worker

• within a period of one year/three years of their being sent out,

• it shall be deemed that such inputs had been supplied by the principal to the job-

worker

• on the day when the said inputs were sent out.

Chapter XIII – Job WorkSection 55(5) Treatment of

Waste and Scrap generated out of job work

If Job worker is registered If Job worker is

not registered

by the job worker

directly from his place of business on payment of

tax

by the principal

Chapter XIV – E-commerceSection 56. Collection of tax at source• Every electronic commerce operator (ECO) not being an agent,

• shall collect

• an amount at the rate of 1% of the net value of taxable supplies made through it

where the consideration with respect to such supplies is to be collected by the

operator.

Due Date for Payment = within 10 days after the end of the month in which such

collection is made

Due date for Return = within 10 days after the end of such month

Supplier shall claim such TCS in his electronic cash ledger

Chapter XIV – E-commerce

Section 56. Collection of tax at source

Sellers E-commerce Operator

Buyers

Govt of India

Collection of

Proceeds

Payment after

deducting TCS

Pay TCS to Govt (1%) of

supplies effected by

the operator

Claim of TCS by Seller

E-Commerce Operator: means any person who owns, operates or manages digital or electronic facility or platform for electronic commerce;

Chapter XIV – E-commerceSection 56. Collection of tax at source

Matching Concept

Supplier

ECO

Govt of India

Filing of Return

of output

supplies

Filing of Return

of output

supplies

If there is mismatch and the output supplies shown in the return of ECO are higher than as shown in supplier’s return such supplies shall be taken as output supplies by the supplier.

Chapter XIV – E-commerceSection 56(11). Information from ECOAny authority not below the rank of Joint Commissioner may serve a notice requiring

the operator to furnish such details relating to—

(a) supplies of goods or services

(b) stock of goods held by the suppliers making supplies through such operator in the

godowns or warehouses managed by such operators and declared as additional

places of business by such

Time Limit to furnish Info = 15 Days

Penalty of Non compliance = Rs 25000 (max)

Chapter XVI – AuditSection 63. Audit by tax authoritiesBy Whom - Commissioner of CGST/IGST

may undertake audit of the business transactions of any taxable

person for such period, at such frequency and in such manner as may be prescribed.

Prior Notice - Intimation before at least 15 days

Time limit for completion - 3 Months

Results - Commissioner may initiate suitable actions of recovery if found tax

evasion.

Powers – verify the books of account, ask for information as he may require

Duty - On conclusion of audit, inform findings the taxable person within 30 days

Chapter XVI – AuditSection 64. Special AuditConsidering

• the nature of transaction and

• nature of complexities and

• to protect the interest of revenue

Dy. / Asst. Commissioner opines w.r.t

• wrong declaration of value or credit,

special audits can be ordered to be carried out

• by Cost Accountant or

• Chartered Accountant.

Time limit for completion of audit – 90 days

Result - Proper officer may initiate action if tax evasion is

detected.

Thank You

Some images and parts of art work are taken from internet. These are used for explanation for academic purposes.

GST Goods and Service Tax India - Refund E-commerce Job Work Accounts Audit

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