Taxmann’s CLASS NOTES for Indirect Tax Laws | IDT SAAR

ABOUT THE AUTHORS CA (DR.) MAHESH GOUR CA Mahesh Gour is a member of the Institute of Chartered Accountants of India.

He has over 10 degrees, some of them are PhD (Management of Taxation), LLB, MBA (Finance). He is an eminent and nation famous faculty of Indirect Taxation. He has been teaching tax laws to students at various levels for over 12 years. More than 30,000 students have benefited from his extraordinary teaching skills. He is a professor who uses 3D animation while teaching for conceptual clarity. The students have appreciated his insights and teaching methods and have regarded him as a great motivator. He has over 12 years of experience in advisory.

He is a published author in various newspapers and has also authored various books on Indirect tax and GST for professionals and students. Currently, he is a visiting faculty at various institutes in Mumbai. He is also a visiting faculty WIRC of The Institute of Chartered Accountants of India.

CA Dr. Mahesh Gour was honoured with title of Master Mind and Memory Guru for his outstanding skills of memorising.

He is the first and the only professor who uses his unique method of Mnemonics and Memory Technique while teaching and this is exemplary when he made a 10th Standard student memorise CA Final book with page numbers in mere 4 days.

He is a founder and director of Aaditya Foundation and SDMA Consultants Pvt. Ltd. You can visit his website www.camaheshgour.com to read more about the subject and latest case studies.

Achievements ¾ Member of Expert Group of ICAI for formulation of Syllabus of Indirect Tax (2016-17) ¾ Sub Group Member of Indirect Tax Committee – WIRC of ICAI (2018-19)

¾ Member of the Students Committee of WIRC of ICAI (2020–21)

CA (DR.) K.M. BANSAL CA. (Dr.) K.M. Bansal is an Associate Professor in the Department of Commerce, Dr. B.R. Ambedkar College, University of Delhi. He is a Gold Medallist from Shri Ram College of Commerce and University Rank Holder in M.Com. He has done M.Phil. (Accounting and Finance) from Delhi School of Economics, University of Delhi. He has been a Guide for students of M.Phil. He is also a member of the

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Institute of Chartered Accountants of India. Dr. Bansal is holding a vast professional teaching experience of more than two decades. He is also associated with ICAI and ICSI as a visiting faculty. He has been a speaker at various conferences, seminars and workshops organized by ICAI. He keeps himself abreast of the latest changes in the field of accounting and law.

He is very particular in adopting a uniform approach while analyzing the practical problems on a given topic.

On the occasion of the Diamond Jubilee year of NIRC of ICAI in 2011, Dr. Bansal has been felicitated with a certificate of appreciation to acknowledge and appreciate the valuable and incredible services provided by him.

On 24th February 2016, he was given the same certificate once again to appreciate and acknowledge his services as a Faculty Member during 2015-16. On the occasion of the Annual Prize Distribution Function of ICAI held on 20th February 2016, Dr. Bansal has been awarded for Commendable Contribution in Activities of the profession of NIRC of ICAI. Dr. Bansal has been a key speaker at Faculty Development Programmes organised by various colleges of the University of Delhi.

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INDEX Chapter

CHAPTERS NAME

PAGE NO.

N0.

GOODS & SERVICES TAX 1.

GST IN INDIA – AN INTRODUCTION

1.3 – 1.9

2.

SUPPLY UNDER GST

2.1 – 2.19

3.

CHARGES OF GST

3.1 – 3.19

4.

EXEMPTIONS OF GST

4.1 – 4.44

5.

PLACE OF SUPPLY

5.1 – 5.13

6.

TIME OF SUPPLY

6.1 – 6.4

7.

VALUE OF SUPPLY

7.1 – 7.7

8.

INPUT TAX CREDIT

8.1 – 8.26

9.

REGISTRATION

9.1 – 9.16

10.

TAX INVOICE, CREDIT AND DEBIT NOTE

10.1 – 10.9

11A..

E-WAY BILL

11A.1 – 11A.9

11B.

ACCOUNTS AND RECORDS

11B.1 – 11B.4

12A.

PAYMENT OF TAX

12A.1 -12A.6

Unit 1: Payment of Tax, Interest and other Amounts 12B.

PAYMENT OF TAX

12B.1 – 12B.5

Unit 2: Tax deduction at Source and Collection of Tax at Source 13.

RETURNS

13.1 – 13.10

14.

REFUNDS

14.1 – 14.18

15.

ASSESSMENT AND AUDIT

15.1 – 15.6

16.

INSPECTION, SEARCH, SEIZURE AND ARREST

16.1 – 16.5

17.

DEMAND AND RECOVERY

17.1 – 17.9

18.

LIABILITY TO PAY IN CERTAIN CASES

19.

OFFENCES AND PENALTIES

19.1 – 19.6

20.

APPEALS AND REVISION

20.1 – 20.10

.

21.

ADVANCE RULING

21.1 – 21.3

22.

MISCELLANEOUS PROVISIONS

18.1 –18.4

22.1 – 22.6

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CUSTOMS & FTP 23.

BASIC CONCEPT OF CUSTOMS

23.3 – 23.8

24A.

TYPES OF DUTIES

24A.1 – 24A.5

24B.

CLASSIFICATION OF IMPORTED AND EXPORTED

24B.1 – 24B.4

GOODS 25.

IMPORT PROCEDURE

25.1 – 25.22

26.

VALUATION

26.1 – 26.16

27.

DUTY DRAWBACK

27.1 – 27.4

28.

BAGGAGE, STORES AND IMPORT BY POST

28.1 – 28.6

29.

TRANSIT AND TRANSSHIPMENT

29.1 – 29.2

30.

FOREIGN TRADE POLICY

30.1 – 30.27

31.

REFUNDS UNDER CUSTOMS

31.1 – 31.4

䚉㻌 COLOUR USED

䚉Black - Heading, Sub-heading & important words 䚉Blue 䚉Red

- Matter or Content - Section, Rules & Schedule

䚉Green - Key code, Date, Month - Amendments for December 2021 - Amendments for MAY 2022

㻌

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ABBREVIATIONS

㻌

AA䚉㻌 Appellate Authority/ Advance Authorization (For FTP) AOP䚉㻌 Association Of Person ATO䚉㻌Aggregate Turnover BOE䚉㻌 Bill Of Exchange

MIDC䚉㻌 Maharashtra Industrial Development Corporation NSDC䚉㻌National Skill Development

BOI䚉㻌 Body of Individuals

Corporation

CG䚉㻌 Central Government

NPS䚉㻌National Pension Scheme

CFO䚉㻌 Chief Financial Officer

PDS䚉㻌Public Distribution System

CP䚉㻌Consular Post

PAN䚉㻌Permanent Account Number

CST䚉㻌Central Sales Tax

RFID䚉㻌 Radio Frequency Identification Device

CBDT䚉㻌Central Board of Direct Taxation

RCM䚉㻌Reverse Charge Mechanism

CKD䚉㻌Completely Knocked Down

RBI䚉㻌Reserve Bank of India

FDM䚉㻌Foreign Diplomatic Mission

SKD䚉㻌Semi Knocked Down

FAQs䚉㻌 Frequently Asked Questions

SCN䚉㻌 Show Cause Notice

FCM䚉㻌Foreign Charge Mechanism

SG䚉㻌 State Government

FSI䚉㻌 Floor Space Index

SEZ䚉㻌Special Economic Zone

FEMA䚉㻌 Foreign Exchange Management Act

TCS䚉㻌Tax Collect at Source

GSPs䚉㻌GST Suvidha Providers

TDR䚉㻌 Transfer of Development Rights

HUF䚉㻌 Hindu Undivided Family

TOS䚉㻌 Time Of Supply

IFSC䚉㻌International Financial Services Centre

TRN䚉㻌Temporary Reference Number

INR䚉㻌 Indian Rupees

TDS䚉㻌Tax Deduction At Source

ISD䚉㻌Input service distributor

UTs䚉㻌Union Territory

IRFC䚉㻌Indian Railway Finance Corporation

UIN䚉㻌 Unique Identification Number

IRDA䚉㻌Insurance Regulatory and

VAT䚉㻌 Value Added Tax

Development Authority

ZR’S䚉㻌 Zero Rates Supply

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CHAPTER 19. OFF FENCES AND PENALTIES Î

GLIMPSE 1.

Penalty for certain offences [section 122]

2. Failure to Furnish Information Return [Section 123] 3. Fine for Failure to Furnish Statistics or Furnish Fake Information [Section 124] 4. General Penalty [Section 125] 5. General Disciplines Related To Penalty [Section 126] 6. Power To Waive Penalty Or Fee Or Both [Section 128] 7. Detention, Seizure Of Goods And Conveyance In Transit [Section 129] 8. Confiscation Of Goods Or Conveyance And Levy Of Penalty [Section 130] 9. Punishment For Certain Offences [Section 132] 10. Liability Of Offences And Certain Other Persons [Section 133] 11. Compounding Of Offences [Section 138]

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PENALTY FOR CERTAIN OFFENCES [SECTION 122] [MTP Ma ay 19, Nov 19, Nov 19,, Jan 21, RTP Dec21]

Section 122(1)

1. Supply of goods/services made without invoice

Section 122(2)

offences specified in section

refunded or where ITC has been

(A)

4. Avails or utilizes Input tax credit (ITC) In

For any reason other

deals in goods in

(B) For reason of

c. Receives / deals with

fraud, or wilful

supply of services in

misstatement or

misstatement or

contravention of the act.

suppression of facts

suppression of

to evade tax.

facts.

d. Fails to appear when the summon is issued. e. Fails to issue invoice in

Penalty/ Consequences

7. Fails to obtain registration or furnishes false

• Penalty of

particulars. Issue invoice using registration

₹10,000

Penalty/

accordance with the

Consequences

provisions.

• Penalty of ₹10,000

OR

number of another person.

OR

• 10% of the tax

8. Obstructs or prevents officer in discharge of

due thereon

• 100% of the tax

his duties.

higher]

IDT सार

contravention of the act.

than fraud, wilful

6. Tampers financial records with an intention to evade tax.

122(1). b. Acquires possession /

wrongly availed.

3. Fails to deduct tax or collect tax.

5. Obtains refund fraudulently.

a. Aids or abets any

been paid or erroneously

months from the due date of payment

contravention of the Act.

Any Person –

Supplies on which tax has not

or false invoice.

2. Tax collected but fails to pay. Within 3

Section 122(3)

[Whichever is

due thereon [Whichever is higher]

Penalty/ Consequences Shall be liable to penalty up to ₹ 25,000.

19.1

9. Fails to maintain or retain books of account.

10. Fails to furnish information or documents. (during proceeding’s) 11. Supplies, transports, or stores goods liable for confiscation.

12. Tampers with or destroys any material evidence or documents.

13. Transportation of any goods without documents.

Penalty/ Consequences 1. Penalty of ₹ 10,000.

2. An amount equivalent to any of the following: a)

Tax evaded or,

b)

Tax not deducted / short deducted / not paid to the government or,

c)

Tax not collected / short collected and not paid to the government or,

d)

Input tax credit availed or distributed irregularly or,

e)

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Refund claimed fraudulently.

[whichever is higher]

FAIL TO FURNISH INFORMATION, STATISTICS Failure to Furnish Information

Fine for Failure to Furnish Statistics or

Return [Section 123] [MTP May 18]

Furnish Fake Information [Section 124]

Penalty

Penalty

₹ 100 for each day till failure

₹ 10,000

continues, maximum of ₹ 5,000.

In case of continuing offence – ₹ 100 per day, maximum ₹ 25,000.

Î

GENERAL PENALTY OR POWER TO WAIVE PENALTY General Penalty

General Disciplines Related To

Power To Waive Penalty Or

[Section 125]

Penalty [Section 126]

Fee Or Both [Section 128]

Penalty [May 18, MTP Nov 18, RTP Nov 18]

Penalty Maximum

1.

fraudulent intention or gross negligence. A breach shall be considered a

of Rs. 25,000

Penalty shall not be imposed for minor breaches, or mistakes made without minor breach if the amount of tax involved is less than Rs.5,000.

2.

Penalty imposed shall depend on the facts and circumstances of each case and shall commensurate with the degree and severity of the breach. No penalty shall be imposed without giving him an opportunity of being heard.

Î

Penalty The government may, by notification, waive in part or full any penalty referred to in section 122 or section 123 or section 125 or any late fees referred to in section 47.

SOME OTHER PROVISIONS Detention, Seizure Of Goods And Conveyance In Transit [S Section 129]] [Ma ay 18, Ma ay 19]

IDT सार

19.2

1.

When any person, transports any goods while they are in transit in contravention of the provisions of this Act, then all such goods, and conveyance used, shall be liable to detention or seizure.

The detained or seized goods or conveyance shall be released: a) When the owner of the goods accepts the liability (Owner Come Forward) x

Payment of tax and penalty equal to 100% of the tax payable.

x

In case of exempted goods, on payment of – i.

Amount equal to 2% of the value of the goods, or ₹ 25,000. [Whichever is less]

ii.

b) When the owner does not accept the liability (Owner does not come forward) x

Payment of tax and penalty equal to 50% of the value of the goods reduced by the amount of tax paid.

x

In case of exempted goods, on payment of – i. ii.

Amount equal to 5% of the value of the goods, or ₹ 25,000. [whichever is less]

c) Furnishing a security equivalent to amount payable in clauses (a) and (b).

2. Service of order of detention or seizure → Mandatory.

3. The proper officer shall issue a notice specifying the amount of tax and penalty Payable after giving the concerned person opportunity of being heard 4. On payment of the amount stated in the notice, the proceedings shall be deemed to be concluded.

5. If the owner or transporter fails to pay the tax and penalty within 14 days → further Proceeding shall be initiated

Confiscation Of Goods Or Conveyance And Levy Of Penalty [Section 130]] [Ma ay 18 RTP No ov 18, Nov 19]

a. Specified contraventions, if any person – I. II.

Supplies or receives any goods in contravention of the act, or Does not account for any goods on which he is liable to pay tax.

III.

Supplies any goods without obtaining registration.

IV.

Contravenes the provisions with an intention to evade tax.

V.

Uses any conveyance as a means of transport in contravention of the provision without the knowledge of the owner himself.

Then all such goods or conveyances shall be liable to confiscation and penalty. b. Redemption fine → whenever confiscation of any goods or conveyance is authorised by the act. Redemption fine – maximum amount should not exceed the market value of the goods. Reduced by the Amount of Tax paid.

IDT सार

19.3

c.

Tax, penalty and other charges also payable.

d. the concerned person will be given an opportunity of being heard before passing the order. e.

Curve conveyance used for carriage of such goods ->fine=100% of Tax.

Punishment For Certain Offences [S Section 132]] Whosoever commits the following offences, shall be liable to punishments:1.

Supply of any goods or services without invoice.

2. Issue of invoice without supply of goods or services. (Fake Invoice) 3. Avails input tax credit using such invoice mentioned above.

4. Tax collected but not paid within 3 months 5. Evades Tax, fraudulently avails ITC. 6. Falsifies or substitutes financial records.

7. Obstructs or prevents an officer from discharging his duties.

8. Acquires possession of any goods which are liable for confiscation.

9. Tampers or destroys material evidences.

10. Fails to supply information, as required under the act.

11. Attempts to commit, or abets the commission of any of the offences mentioned Above.

Punishment for the above offences is as under: [Ma ay 18, RTP No ov 19,, Jan 21]] Offence Involving

Amount Involved in (₹))

Punishment Imprisonment Minimum 6 Months In Absence of Special and Adequate Reasons to the Contrary to be Recorded In The Judgment of The Court And extending To-

Tax evaded or input tax credit

Exceeds ₹ 5 Cr

wrongly availed or Utilize (1-5 Cases)

Exceeds ₹ 2 Cr but does not exceed ₹ 5 Cr

5 years + fine.

3 years + fine.

Exceeds ₹ 1 Cr but does not exceed ₹ 2 Cr

1 year + fine.

Compliments or abets inx Falsification or substitution Of financial records or Producing fake

6 months or fine or

accounts, Documents or furnishes

both

IDT सार

19.4

any False information with Intention to evade payment Of Tax; x Obstruction or prevention Any officer in the discharge Of his duties. x Tampering with or destroying Any material evidence or documents For second and every subsequent offence under Section 132

No limit

5 years + fine

Liability Of Offences And Certain Other Persons [S Section 133]] 1.

When any person engaged in connection with the collection of statistics or compilation or computerisation, or if any person engaged in connection with the provisions of service on the common portal, wilfully discloses any information or contents in any return furnished, otherwise than in execution of his duties shall be punishable x

Imprisonment up to 6 months, or

x

Fine of ₹ 25,000, or

x

Both

2. Any person: a) Who is a government servant shall not be prosecuted for any offence under this section except with previous sanction of the government (Prior permission) b) Who is not a government servant, shall not be prosecuted except with Previous sanction of commissioner (prior permission of commissioner)

Compounding Of Offences [S Section 138]] [No ov 18, Nov 19] 1.

Any offence, either before or after the institution of prosecution, be compounded by by the commissioner on payment to the government of such compounding amount as may be prescribed.

Cases where compounding is not possible: I. II.

A person already compounded once under section 132 clauses (1) to (6).

A person already compounded once apart from the above mentioned in (I), in Respect of value exceeding ₹ 1 crores.

IDT सार

III.

A person accused of committing an offence under the act.

IV.

A person convicted by the court.

V.

Any other offences as prescribed.

19.5

2. Any compounding allowed under the provisions of this section, shall not affect the proceedings under any other law.

3. Compounding shall be allowed only after making payment of tax, interest penalty.

4. Amount of compounding of offences: (a) Minimum Limit x

50% of the tax involved, or

x

₹ 10,000 [whichever is higher]

(b) Upper Limit x

150% of the tax involved, or

x

₹ 30,000 [whichever is higher]

5. On payment of such compounding amount, as determined by the commissioner, no further proceedings shall be initiated, and all the pending proceedings shall stand abated.

For Students Use:

IDT सार

19.6

CLASS NOTES for

Indirect Tax Laws | IDT SAAR AUTHOR PUBLISHER DATE OF PUBLICATION EDITION ISBN NO PAGE NO. BINDING TYPE

: MAHESH GOUR, K.M. BANSAL : TAXMANN : DECEMBER 2021 : 4TH EDITION : 9789393656247 : 388 : PAPERBACK

Rs. 850 | USD 44

Description Taxmann’s CLASS NOTES for Indirect Tax Laws is a one-stop solution to conquer the vast subject of Indirect Taxation with ease. This book aims to explain the complicated provisions of the law in a simplified manner with the help of charts & diagrams.

This book covers the following laws: u

GST Act

u

Customs Act

u

Foreign Trade Policy

The Present Publication is the 4th Edition (for CA-Final | New Syllabus) & Updated till 31st October 2021, authored by CA (Dr.) Mahesh Gour & CA (Dr.) K.M. Bansal, with the following noteworthy features: u u

u

Strictly as per the New Syllabus of ICAI [Pictorial Presentation/Charts with Handwritten Fonts] are used in the book for easy understanding of complex concepts [Multi-Colour Coded Book] which follows the below structure: n

Black – Heading, Sub-Heading & Important Words

n

Blue – Matter/Content

n

Red – Section, Rules & Schedules

n

Green – Key Code, Date, Month u

Amendments for December 2021

u

Amendments for May 2021

u

[Author’s View] for conceptual clarity

u

[RTPs & MTPs of ICAI] This book covers reference to RTPs & MTPs Questions of ICAI

u

[Amendments Applicable for May 2022 Examination] are especially highlighted

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