Sec 142 – Miscellaneous transitional provision

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Sec 142 – Miscellaneous transitional provision 2017-04-14T02:55:40+00:00

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  • Miloni ShahMiloni Shah
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    (1) Where any goods on which duty, if any, had been paid under the existing law at the time of removal thereof, not being earlier than six months prior to the appointed day, are returned to any place of business on or after the appointed day, the registered person shall be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other than a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer:
    Provided that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply.
    (2) (a) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised upwards on or after the appointed day, the registered person who had removed or provided such goods or services or both shall issue to the recipient a supplementary invoice or debit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such supplementary invoice or debit note shall be deemed to have been issued in respect of an outward supply made under this Act;
    (b) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised downwards on or after the appointed day, the registered person who had removed or provided such goods or services or both may issue to the recipient a credit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such credit note shall be deemed to have been issued in respect of an outward supply made under this Act:
    Provided that the registered person shall be allowed to reduce his tax liability on account of issue of the credit note only if the recipient of the credit note has reduced his input tax credit corresponding to such reduction of tax liability.
    (3) Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944:
    Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse:
    Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act.
    (4) Every claim for refund filed after the appointed day for refund of any duty or tax paid under existing law in respect of the goods or services exported before or after the appointed day, shall be disposed of in accordance with the provisions of the existing law:
    Provided that where any claim for refund of CENVAT credit is fully or partially rejected, the amount so rejected shall lapse:
    Provided further that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act.
    (5) Every claim filed by a person after the appointed day for refund of tax paid under the existing law in respect of services not provided shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944.
    (6) (a) every proceeding of appeal, review or reference relating to a claim for CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law, and any amount of credit found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act:
    Provided that no refund shall be allowed of any amount of CENVAT credit where the balance of the said amount as on the appointed day has been carried forward under this Act;
    (b) every proceeding of appeal, review or reference relating to recovery of CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law and if any amount of credit becomes recoverable as a result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.
    (7) (a) every proceeding of appeal, review or reference relating to any output duty or tax liability initiated whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with the provisions of the existing law, and if any amount becomes recoverable as a result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of duty or tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.
    (b) every proceeding of appeal, review or reference relating to any output duty or tax liability initiated whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with the provisions of the existing law, and any amount found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act.
    (8) (a) where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act;
    (b) where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded to him in cash under the said law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act.
    (9) (a) where any return, furnished under the existing law, is revised after the appointed day and if, pursuant to such revision, any amount is found to be recoverable or any amount of CENVAT credit is found to be inadmissible, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act;
    (b) where any return, furnished under the existing law, is revised after the appointed day but within the time limit specified for such revision under the existing law and if, pursuant to such revision, any amount is found to be refundable or CENVAT credit is found to be admissible to any taxable person, the same shall be refunded to him in cash under the existing law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act.
    (10) Save as otherwise provided in this Chapter, the goods or services or both supplied on or after the appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax under the provisions of this Act.
    (11) (a) notwithstanding anything contained in section 12, no tax shall be payable on goods under this Act to the extent the tax was leviable on the said goods under the Value Added Tax Act of the State;
    (b) notwithstanding anything contained in section 13, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994;
    (c) where tax was paid on any supply both under the Value Added Tax Act and under Chapter V of the Finance Act, 1994, tax shall be leviable under this Act and the taxable person shall be entitled to take credit of value added tax or service tax paid under the existing law to the extent of supplies made after the appointed day and such credit shall be calculated in such manner as may be prescribed.
    (12) Where any goods sent on approval basis, not earlier than six months before the appointed day, are rejected or not approved by the buyer and returned to the seller on or after the appointed day, no tax shall be payable thereon if such goods are returned within six months from the appointed day:
    Provided that the said period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months:
    Provided further that the tax shall be payable by the person returning the goods if such goods are liable to tax under this Act, and are returned after a period specified in this sub-section:
    Provided also that tax shall be payable by the person who has sent the goods on approval basis if such goods are liable to tax under this Act, and are not returned within a period specified in this sub-section.
    (13) Where a supplier has made any sale of goods in respect of which tax was required to be deducted at source under any law of a State or Union territory relating to Value Added Tax and has also issued an invoice for the same before the appointed day, no deduction of tax at source under section 51 shall be made by the deductor under the said section where payment to the said supplier is made on or after the appointed day.
    Explanation.–For the purposes of this Chapter, the expressions “capital goods”, “Central Value Added Tax (CENVAT) credit”, “first stage dealer”, “second stage dealer”, or “manufacture” shall have the same meaning as respectively assigned to them in the Central Excise Act, 1944 or the rules made thereunder.

    Priya MadrechaPriya Madrecha
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    142(1) Duty paid Goods returned to the place of business on or after the appointed day
    Where any goods on which duty, if any, had been paid under the existing law at the time of removal thereof, not being earlier than six months prior to the appointed day, are returned to any place of business on or after the appointed day, the registered person shall be eligible for refund of the duty paid under the existing law where such goods are returned by a person, other than a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer.
    Provided that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply.
    142.1.1 Introduction
    This transitional provision provides for refund of duties paid on goods under existing law when returned to the place of business.
    142.1.2. Analysis
    This section provides for refund in respect of sales returns, viz., where the sale was under the existing law and the return is under the GST law. The Section provides that the person receiving the said goods back under the GST regime would be eligible to refund of the duty paid under the existing law at the time of removal of goods, if the person returning the goods is not a registered person, return of goods by a person registered would tantamount to be a deemed supply.
    This provision would be applicable in the following circumstances:
    (i)    Duty was paid at the time of removal: Central Excise duty, should have been paid when the goods were removed/sold under the existing law.
    (ii)    Sales return should be to any place of business: While the law provides that the return can be to any place of business (in the same state by a person other than a registered person) and not necessarily to the same place of business from where it was removed, it is essential that the return should be to the same taxable person.
    (iii)    Return of goods by a registered person will be held to be a deemed supply of goods and the original supplier receiving the goods shall not be entitled to input tax credit if returned within 6 from appointed date. No input tax credit if returned after 6 months.
    (iv)    Time period: The Section provides for time lines for both, the removal and the return.
    (a)    Removal: It should have taken place not earlier than 6 months from the date of introduction of GST.
    (b)    Return: It should be within 6 months from the date of introduction of GST.
    If the goods are not returned within the time line, the supplier shall not be eligible for the said refund.
    (v)    Also, please note that similar provision would find place in the SGST Act so that the full incidence of GST flows to these transaction.
    Eg 1: A manufacturer had removed goods for sale worth Rs. 5,00,000 on 1st March, 2017 after paying the necessary duty under Central Excise law. These goods are also taxable under GST. GST is assumed to be applicable from 1st July, 2017. On 10th July, 2017, goods worth Rs. 1,00,000 are returned by the buyer. Since, the goods are returned within 6 months from the date of applicability of GST, the supplier shall be eligible for refund of Central Excise Duty paid by him.
    The analysis of above provision in a pictorial form is summarised as follows:

    Statutory Provision
    142(2) Issue of supplementary invoices, debit or credit notes where price is revised in pursuance of a contract
    (a)    Where, in pursuance of a contract entered into prior to the appointed day, the price of any goods or services or both is revised upwards on or after the appointed day, the registered taxable person who had removed or Provided such goods or services or both may issue to the recipient a supplementary invoice or debit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such supplementary invoice or debit note shall be deemed to have been issued in respect of an outward supply made under this Act.
    (b)    Where, in pursuance of a contract entered into prior to the appointed day, the price of
    any goods or services or both is revised downwards on or after the appointed day, the registered taxable person who had removed or Provided such goods or services or both may issue to the recipient a supplementary invoice or credit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such supplementary invoice or credit note shall be deemed to have been issued in respect of an outward supply made under this Act:
    PROVIDED that the said registered taxable person shall be allowed to reduce his tax liability on account of issue of the credit note only if the recipient of the credit note has reduced his input tax credit corresponding to such reduction of tax liability.
    142.1.1 Introduction
    This is a transition provision with respect to goods or services or both in respect of which there is either an upward or a downward revision of price under a contract which was entered into prior to the date of introduction of GST.
    142.1.2 Analysis
    In cases where there is a price revision, either upward or downward, the CGST Act provides that the amount to the extent of such revision is deemed to be an outward supply under the CGST Act. Consequently, all the CGST provisions including issue of invoices (debit or credit notes) and payment of taxes would apply to such revision. This would apply to the provisions of supply of goods and services, respectively.
    This provision would apply as follows:
    (i) For upward revisions: The taxable person shall issue a supplementary invoice or a debit note within 30 days from the date of such revision.
    The amount of tax involved therein would be deemed to be the tax payable on such supplies under the CGST Act.
    It would be deemed to be a supply in the month in which the supplementary invoice / debit note is issued and the provisions relating to disclosure in the return and payment of tax would apply accordingly.
    The supplementary invoice / debit note would have to comply with the requirements as prescribed under the CGST Act.
    Eg 1: A contract for supply of manpower was entered on 10th June, 2017 for Rs. 5,00,000. Due to certain re-negotiations, this price was revised to Rs. 5,50,000 on 15th July, 2017. Assuming applicability of GST from 1st July, 2017, the supplier should issue a supplementary invoice/debit note for Rs. 50,000 within 30 days of 15th July, 2017 i.e. 15th August, 2017. This supplementary invoice/debit note will be assumed to be for outward supply of Rs. 50,000 with GST charged on the same
    (ii) For downward revisions: The taxable person shall issue a credit note within 30 days from the date of such revision.
    In terms of the credit note, the supplier of goods would be allowed to reduce the tax liability as if the adjustment is under the CGST Act.
    It would be deemed to be a supply (adjustment) in the month in which the credit note is issued and the provisions relating to disclosure in the return and adjustment to tax would apply accordingly. This adjustment (reduction in the tax liability) would be allowed only if the recipient of the credit note also reduces his input credit correspondingly.
    The credit note would have to comply with the requirements as prescribed under the CGST
    Act.
    Eg 2: A contract for supply of manpower was entered on 10th June, 2017 for Rs. 5,00,000. Due to certain re-negotiations, this price was revised downwards to Rs. 4,00,000 on 15th July, 2017. Assuming applicability of GST from 1st July, 2017, the supplier should issue a credit note for Rs. 100,000 within 30 days of 15th July, 2017 i.e. 15th August, 2017. This credit note will be assumed to be for outward supply of Rs. 1,00,000 and accordingly the tax liability would be reduced. However, the said reduction shall be allowed only if the recipient of the credit note has reduced his corresponding input tax credit.
    142.1.3 Comparative review
    Rule 6(3) of Service Tax Rules, 1994: Where an assessee has issued an invoice or received any payment, against a service to be Provided which is not so Provided by him either wholly or partially for any reason (or when the invoice amount is re-negotiated due to deficient provision of service, or any terms contained in a contract) the assessee may take the credit of such excess service tax paid by him, if the assessee has refunded the payment or part received for the service Provided or has issued a credit note for the value of the service not so Provided to the person to whom an invoice had been issued.
    The analysis of above provision in a pictorial form is summarised as follows:

    Statutory Provisions
    142(3) Refund claims for amount paid under existing law to be disposed of under existing law
    Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of CENVAT credit, duty, tax or interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of subsection (2) of section 11B of the Central Excise Act, 1944:
    PROVIDED that where any claim for refund of Cenvat credit is fully or partially rejected, the amount so rejected shall lapse:
    PROVIDED FURTHER that no refund claim shall be allowed of any amount of Cenvat credit where the balance of the said amount as on the appointed day has been carried forward under this Act.
    142(4) Refund claims filed after the appointed day for goods cleared or services Provided and exported before or after the appointed day to be disposed of under existing law
    Every claim for refund filed after the appointed day for refund of any duty or tax paid under existing law for the goods or services exported before or after the appointed day, shall be disposed of in accordance with the provisions of existing law:
    PROVIDED that where any claim for refund of Cenvat credit is fully or partially rejected, the amount so rejected shall lapse:
    PROVIDED FURTHER that no refund claim shall be allowed of any amount of Cenvat credit where the balance of the said amount as on the appointed day has been carried forward under this Act.
    142.3.1. Introduction
    This transition provision is with respect to
    •    Refund claims/applications under the existing law.
    •    Refund claims/applications under the existing laws filed after the appointed day for the goods or services exported before or after the appointed day.
    It provides that the claim for such refund should be processed as prescribed under the relevant existing law.
    142.3.2. Analysis
    The section provides that where any person has made an application for refund of CENVAT credit, duty, tax or interest paid, the same would have to be processed in terms of the provisions contained in the respective existing laws. The provisions of GST law would have no bearing on the same.
    Therefore, refund application under the current laws can continue to be filed under this section, even after the introduction of GST.
    It also provides the following:
    (i)    The refund, if allowed, would accrue in cash under the existing law and would not be credited to the electronic credit ledger or electronic cash ledger.
    (ii)    The refund if rejected, fully or partially would lapse.
    (iii)    No refund claim shall be allowed of any amount of Cenvat credit where the balance of the said amount as on the appointed day has been carried forward under this Act.
    Eg 1: An export manufacturer files a claim for refund of Rs. 5,00,000 on 15th June, 2017. Assume applicability of GST from 1st July, 2017. The refund claim will be processed under the provision of the earlier law i.e. Central Excise law itself. If the refund is considered as admissible by the Department, then the same will be paid in cash subject to the Doctrine of Unjust Enrichment.
    Eg 2: If the refund claim is rejected, then the amount so rejected will lapse and not be available as credit.
    142.4.1. Analysis
    The section provides that every claim for refund of any duty or tax paid under existing law, filed after the appointed day, for the goods or services exported before or after the appointed day, shall be disposed of in accordance with the provisions of the existing law.
    It also provides the following:
    (i)    The refund, if rejected, fully or partially would lapse.
    (ii)    No refund claim shall be allowed of any amount of Cenvat credit / input tax credit where the balance of the said amount as on the appointed day has been carried forward under this Act.
    Analysis of this transition provision can be presented through a flowchart as under:

    Statutory provision
    142(5) Refund claims filed after the appointed day for payments received and tax deposited before the appointed day in respect of services not Provided.
    Every claim filed by a person after the appointed day for refund of tax paid under the existing law in respect of services not Provided, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be paid in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of subsection (2) of section 11B of the Central Excise Act, 1944
    142.5.1 Introduction
    This transition provision is with respect to refund claims in respect of services not Provided, filed after the appointed day.

    142.5.2 Analysis
    The section provides that every claim for refund of any tax deposited under the existing law in respect of services not Provided, filed after the appointed day, shall be disposed of in accordance with the provisions of the existing law and any amount eventually accruing to him shall be paid in cash.
    142.5.3 Related provisions
    Statute      Section     Description
    Central Excise Act, 1944      Section 11B (2)     Provision for unjust enrichment
    Statutory provision
    142(6) Claim of CENVAT credit to be disposed of under the existing law
    (a)    Every proceeding of appeal, review or reference relating to a claim for CENVAT credit initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of existing law, and any amount of credit found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act:
    PROVIDED that no refund shall be allowed of any amount of Cenvat credit where the balance of the said amount as on the appointed day has been carried forward under this Act.
    (b)    Every proceeding of appeal, review or reference relating to recovery of CENVAT credit initiated whether before, on or after the appointed day, under the existing law shall be disposed of in accordance with the provisions of existing law, and if any amount of credit becomes recoverable as a result of appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.
    142.6.1 Introduction
    This transition provision is with respect to claim of CENVAT Credit initiated under the existing law and disposal of appeals, reviews or reference proceedings pertaining thereto.
    142.6.2 Analysis
    The Section applies where any matter in respect of CENVAT credit is pending in an appeal or review or reference under any of the existing laws.
    It provides that the provisions of CGST would have no bearing on the same and should be dealt with in accordance with the provisions of existing laws as follows:
         If the input credit are finally allowed: A refund would accrue to the claimant in cash.
     If the input credit is disallowed: It would become recoverable as an arrear of tax under the CGST.
         The amount so recovered would not be allowed as input tax credit under the CGST law.
    Analysis of this transitional provision can be presented as a flowchart as under:

    142(7) Finalization of proceedings relating to output duty or tax liability
    (1)    Every proceeding of appeal, review or reference relating to any output duty or tax liability initiated whether before, on or after the appointed day under the existing law shall be disposed of in accordance with the provisions of the existing law, and if any amount becomes recoverable as a result of such appeal, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of duty or tax under this Act and amount so recovered shall not be admissible as input tax credit under this Act.
    (2)    Every proceeding of appeal, review or reference relating to any output duty or tax liability initiated whether before, on or after the appointed day, shall be disposed of in accordance with the provisions of the existing law, and any amount found to be admissible to the claimant shall be refunded to him in cash, notwithstanding anything to
    the contrary contained under the provisions of existing law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this act.
    142(8) (a) where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act;
    (b)  where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded to him in cash under the said law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and the amount rejected, if any, shall not be admissible as input tax credit under this Act.
    142.8.1 Introduction
    This transition provision is with respect to output tax / duty liabilities pending in appeal, review, or reference proceedings under any of the existing law.
    142.8.2 Analysis
    The section applies where any matter in respect of output tax / duty liabilities are pending in appeal, review or reference proceedings under any of the existing law.
    It provides as follows:
         If the output liability is finally payable: It should be recovered as an arrear of tax under CGST Act.
         The amount so recovered would not be allowed as input tax credit under the CGST laws.
         If the output liability is finally allowable to the claimant: It would accrue to the claimant as refund in cash under the existing law. If any amount is rejected, the same shall not be available as input tax credit under CGST.
    Analysis of this transition provision can be presented in the following flowchart:

    Statutory Provisions
    142(9) Treatment of the amount recovered or refunded pursuant to revision of returns
    (a)    Where any return, furnished under the existing law, is revised after the appointed day and if, pursuant to such revision, any amount is found to be recoverable or any amount of cenvat credit is found to be inadmissible, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.
    (b)    Where any return, furnished under the existing law, is revised after the appointed day but within the time limit specified for such revision under the existing law and if, pursuant to such revision, any amount is found to be refundable or cenvat credit is found to be admissible to any taxable person, the same shall be refunded to him in cash under the existing law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub-section (2) of section 11B of the Central Excise Act, 1944 and amount rejected, if any, shall not be admissible as input tax credit under this act.
    142.9.1 Introduction
    This transition provision deals with a situation where tax becomes payable or refundable by virtue of revision of returns under existing law.
    142.9.2 Analysis
    This Section applies where any return is revised under the existing laws by virtue of which any amount becomes payable by or refundable to, the taxable person. This could arise due to any of the following reasons:
    (i)    Short payment of output tax liability (payable);
    (ii)    Excess payment of output tax liability (refundable);
    (iii)    Short claim of CENVAT credit (refundable); (iv)     Excess claim of CENVAT credit (payable); The Section specifies that:
     If any amount is recoverable: It should be recovered as an arrear of tax under the CGST Act. The amount so recovered would not be allowed as input tax credit.
     If the amount is allowable as refund: It would accrue to the claimant as cash refund under the existing law.
    Analysis of this transitional provision can be presented in the following flowchart:

    Statutory Provisions
    142 (10) Treatment of long term contracts
    Save as otherwise Provided in this Chapter, the goods or services or both supplied on or after the appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax under the provisions of this Act.
    142.10.1 Introduction
    This transitional provision deals with long term contracts.
    142.10.2 Analysis
    It provides that in respect of a contract entered into prior to GST regime, the goods or services or both which are supplied on or after the introduction of GST would be liable to tax under the GST Act to the extent the supply takes place after introduction of GST.
    Even if the construction contract or works contract is entered into prior to the date of introduction of GST, the contracts would be taxable under the GST Act.
    Eg 1: A contract for a painting job was entered on 19th June, 2017. Assume the applicability of GST from 1st July, 2017. The job is performed from 10th July, 2017 to 30th July, 2017. The said supply will be taxable under GST law.
    Statutory Provisions
    142(11) Progressive or periodic supply of goods or services
    (a)    notwithstanding anything contained in section 12, no tax shall be payable on goods under this Act to the extent the tax was leviable on the said goods under the Value Added Tax Act of the State;
    (b)    notwithstanding anything contained in section 13, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994;
    (c)    where tax was paid on any supply both under the Value Added Tax Act and under Chapter V of the Finance Act, 1994, tax shall be leviable under this Act and the taxable person shall be entitled to take credit of value added tax or service tax paid under the existing law to the extent of supplies made after the appointed day and such credit shall be calculated in such manner as may be prescribed.
    142.11.1 Introduction
    This transition provision deals with transactions which have suffered tax (Value Added Tax or Service Tax) on the ground that consideration was received under the earlier law, whereas the supply is made after the date of introduction of GST.
    142.11.2 Analysis
    I.    No CGST shall be levied on:
    1.    Goods, to the extent tax was leviable under the Value Added Tax Act of the state;
    2.    Service, to the extent Service Tax was leviable on the said service.
    In short, GST shall not be levied on a supply to the extent Value Added Tax or Service Tax, as the case may be, was leviable on the said supply.
    Eg: Advance of Rs. 1,00,000/- was received on 10th June, 2017 for service to be rendered in July, 2017. The invoice for the service was raised for Rs. 1,50,000/- on 31st July, 2017. Assuming appointed day as 1st July, 2017, GST shall be levied only on Rs. 50,000/-.
    II.    Where tax was paid under both Value Added Tax Act and under Finance Act, 1994, viz., Construction service, works contract or supply of food/beverages, Tax shall be leviable under CGST Act on the supplies effected after the appointed day and the Value Added Tax or Service Tax shall be admitted as credit to the taxable person.
    Eg: Contract entered in March, 2017 for Rs. 1,00,00,000/-. Advance received till 30th June, 2017 amounts to Rs. 10,00,000/-. Value Added Tax of Rs. 40,000/- and Service
    Tax of Rs. 60,000/- have been paid on the said advance. Assuming appointed day as 1st July, 2017 GST shall be levied on Rs. 1,00,00,000/- as per Sec 13 of the CGST Act. The value added tax and service tax paid shall be allowed as credit under the existing law in the manner as may be prescribed.
    III.    Supplies liable to both VAT as well as ST are Provided for in this clause. For eg. Works contracts, Hoteliers when the time of supply under CGST Act applies. The differential tax under GST and those already paid under current law will become payable. Credit of tax already paid must not be understood as ‘input tax credit’ as defined u/s 2(63). This is an apparent conflict but not so u/s 140(5) of the CGST Act which needs to be reconciled. The said credit pertains to the credit under existing laws and the same shall be available as credit under existing laws.. 142.11.3 Related provisions
    Section     Description
    Section 2(28)     Definition of consideration
    Section 12     Time of supply of goods
    Section 13     Time of supply of services
    Statutory Provisions
    142(12) Taxability of supply of goods sent on approval basis.
    Where any goods sent on approval basis, not earlier than six months before the appointed day, are rejected or not approved by the buyer and returned to the seller on or after the appointed day, no tax shall be payable thereon if such goods are returned within six months from the appointed day:
    Provided that the said period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months:
    Provided further that the tax shall be payable by the person returning the goods if such goods are liable to tax under this Act, and are returned after a period specified in this subsection:
    Provided also that tax shall be payable by the person who has sent the goods on approval basis if such goods are liable to tax under this Act, and are not returned within a period specified in this sub-section.
    142.12.1 Introduction
    This transition provision covers the goods sent on approval basis under existing law returned to the supplier within a period of 6 months from the appointed day or extended period and beyond.
    142.12.2 Analysis
    No CGST shall be payable for goods sent on approval basis, returning to the supplier due to rejection or non approval by the buyer within a period of 6 months or the extended period of 2 months. However, tax shall be payable by the person returning the goods as well as by the person sending the goods if the goods are returned after the period of six months and such goods are liable to tax under the CGST Law.
    142.12.3 Time period:
    (a)    Sending of goods: It should have taken place not earlier than 6 months prior to the appointed day.
    (b)    Return of goods: It should be within 6 months from the appointed day or as extended by the commissioner by a period not exceeding two months on sufficient causes being shown.
    If goods are returned after the said period, CGST shall be paid by the person returning the goods.
    If the goods are not returned within the period specified, the person who has sent the goods on approval shall pay GST on the said goods. This shall be available as credit to the purchaser of the goods.
    In case of sale of approval prior to appointed date, GST TRAN -1 to be filed within 60 days as per Rule 3 of the GST Transitional Provision Rules.
    Flowchart analysing the transitional provisions in Section 142(12).
    Where:
    •    Goods are sent on approval basis before the appointed day
    •    Returned by the buyer on account of rejection/no approval, on or after the appointed day
    •    Such goods are sent not earlier than six months / further extended period up to 2 months before the appointed

    Tax treatment shall be as follows:

    Where transaction takes place within the time limit as per this

    Where transaction exceeds the time limit as per this Section

    •    Returned to the seller within six months / further extended period up to 2 months from the appointed day No tax shall be payable on such goods
    a) Where:
    •    The goods are liable to tax under this Act AND
    •    Returned to the seller after six months / further extended period up to 2 months from the appointed day Tax shall be payable by the “person returning the goods”  b) Where:
    •    The goods are liable to tax under this Act AND
    •    Not returned to the seller within six months / further extended period up to 2 months from the appointed day Tax shall be payable by the “person sending the goods on approval basis”

    Statutory Provisions
    142(13) Supply of goods in respect of which tax is to be deducted at source.
    Where a supplier has made any sale of goods in respect of which tax was required to be deducted at source under the any law of a state or union territory relating to Value Added Tax and has also issued an invoice for the same before the appointed day, no deduction of tax at source under section 51 shall be made by the deductor under the said section where payment to the said supplier is made on or after the appointed day.
    142.13.1 Introduction
    This transition provision is in respect of TDS under Section 51. It is a transitional provision to ensure that there is no double deduction of tax at source due to introduction of GST.
    142.13.2 Analysis
    This Section would apply in the following circumstances:
    (i)    The supplier had sold any goods under the existing law; and
    (ii)    TDS applies on such transactions under existing law; and
    (iii)    The supplier had issued the invoice before the appointed day; (iv)     Payment is made to the supplier after the appointed day.
    It provides that merely because payment is made to the supplier after the date of introduction of GST, the TDS provisions under Section 51 of the CGST Act will not apply. In other words, no tax shall be deductible under CGST Act at the time of making payment to the supplier.
    Related provisions
    Statute      Section     Description
    CGST     Section 51     Tax deduction at source

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