READING DOWN MODEL IGST ACT (MISCELLANEOUS PROVISIONS)(LAST PART-12)

[Dr. Sanjiv Agarwal]

The part of the series of articles on IGST covers the following provisions

Chapter	Sections	In Relation to
IX	27 to 30	Miscellaneous Provisions
X	31	Transitional Provisions
XI	32, 33	Administration of IGST

Miscellaneous Provisions

Application of Provisions of CGST Act

Section 27 provides that certain provisions of the CGST Act, 2016 shall apply to IGST also in the manner they apply to levy of tax under CGST Act.

These provisions relate to –

1. registration,
2. valuation,
3. time of supply of goods,
4. time of supply of services,
5. change in rate of tax in respect of supply of services,
6. exemption from payment of tax,
7. input tax credit and utilization thereof,
8. accounts and records,
9. payment,
10. return,
11. audit,
12. assessment,
13. adjudication,
14. demands,
15. refunds,
16. interest,
17.  recovery of tax,
18. offences and penalties,
19. inspection,
20. search and seizure,
21. prosecution and power to arrest,
22. appeals,
23. review,
24. advance ruling, and
25. compounding.

Rule making power

As per section 28,

1. The Central Government may, on recommendation by GST Council, by notification in the Official Gazette, make rules for carrying out the purposes of IGST
2. In particular and without prejudice to the generality of the foregoing power, such rules may provide settlement of powers and for all or any of the matters which under any provision of this Act are required to be prescribed or to be provided for by rules

Section 28 is the enabling provision by which Central Government shall be empowered to make rules for the carrying out purpose of IGST Act. Wherever in the statutory provisions, it has been provided that certain matters have to be done in prescribed manner, it would be done by way of rules or conditions to be notified by way of notification.

Interest on delayed payment

Section 29 provides for interest on delayed payment of tax or failure to pay tax within the prescribed period. The rate of interest shall be notified by the Central Government on the recommendation of the GST Council. The interest shall be paid for the period of delay, i.e. from the first day the tax is due to be paid to the actual date of payment or actual number of days of delay. Interest shall be applicable on the tax or any part thereof. It has been provided, unlike in the present provisions, that the person liable to pay interest shall pay interest on his own. This would mean that the liability to pay interest is automatic and no demand notice / adjudication would be necessary to confirm demand of interest.

If the liability to pay tax is there, which is not paid within stipulated period, interest shall be payable which has to be paid suo motu. It is also provided that in case of undue / wrong / excess claim of input tax credit under the provisions of CGST Act (section 29), interest shall also be payable on such undue or excess claim for the relevant period. The rate of interest shall be prescribed.

Tax wrongly collected / deposited

Section 30 of the IGST Act deals with a situation when tax is wrongfully collected and deposited with the Central or State Government. Accordingly, a taxable person who has paid IGST on a transaction considered by him to be an inter-state supply, but which is subsequently held to be an intra-state supply, shall, upon payment of CGST and SGST in the appropriate State, be allowed to take the amount of IGST so paid as refund subject to the provisions of refund as per section 38 of the CGST Act, 2016 and such other conditions as may be prescribed.

This is a bit harsh provision as in such a case, taxable person is required to make payment of tax twice. After such payment, he may apply for refund of the tax paid wrongly but it will be difficult to take refund as it has been made subject to section 38 of the CGST Act and other conditions which shall be prescribed later. Department is likely to deny the refund in the guise of unjust enrichment. It would be desirable not to ask for payment again and adjust the same through the system itself, taking advantage of IT platform. Alternatively, time bound refund should be made suo motu without any refund claim.

Transitional Provisions

Section 31 contains the transitional provisions which will take care of applicability of provisions for transactions which are into transition (i.e. pending) as on the appointed day, i.e. the date from which IGST law shall come into force.

It applies to import of services or inter-state supply of goods and / or services made on or after the appointed day. This provision shall over ride the provisions of 12 and 13 of CGST Act which deal with time of supply of goods and services.

When IGST comes into force, there could be two type of transactions –

• transaction initiated before the appointed day (date of commencement of IGST Act)
• transaction made on or after the appointed day

A transaction shall be deemed to have been initiated before the appointed day if either the invoice relating to such supply or payment, either in full or in part, has been received or made before the appointed day.

Following transitional provisions have been provided –

1. import of services or inter-state supply of goods and/or services made after the appointed day shall be liable to tax under the provisions of this Act regardless of whether the transactions for such import of services or inter-state supply had been initiated before the appointed day.
2. if the tax on such import or inter-state supply had been paid in full under the earlier law, no tax shall be payable on such import or inter-state supply under IGST Law.
3. if the tax on such import of services had been paid in part under the earlier law, balance amount of tax shall be payable on such import or inter-state supply under IGST Law.

Summary of Transitional Provisions

		Appointed day	Provisions applicable
	Import / inter-state supply of goods or services	Made after but initiated before	Tax as per IGST Law
	Full tax on import / inter-state supply of goods or services as per (a) above	Paid before	No tax under IGST Law
	Part tax on import / inter-state or services as per (a) above	Paid before	Balance tax payable under IGST Law

Administration

Section 32 prescribes the classes of Officers under the IGST Act who may be Assistant Commissioner of IGST or Assistant Director of IGST upto Principal Chief Commissioner of IGST or Principal Director General of IGST.

There shall be the following classes of officers under the Integrated Goods and Services Tax Act, 2016, namely;

1. Principal Chief Commissioner of IGST; or

Principal Directors General of IGST,

2. Chief Commissioner of IGST, or

Director General of IGST,

3. Principal Commissioners of IGST, or

Principal Additional Directors General of IGST,

4. Commissioners of IGST, or

Additional Director General of IGST.

5. First Appellate Authority

6. Additional Commissioners of IGST, or

Additional Directors of IGST,

7. Joint Commissioners of IGST, or

Joint Directors of IGST,

8. Deputy Commissioner of IGST, or

Deputy Director of IGST,

1. Assistant Commissioner of IGST, or

Assistant Directors of IGST, and

10. Such other class of officers as may be appointed for the purposes of this Act.

Under section 33, board is authorized to appoint such person(s) as it may think fit to be officers of IGST below the rank of Assistant Commissioner.

Further, the Board may authorize a Principal Chief Commissioner/Chief Commissioner of Central Goods and Services Tax or a Principal Commissioner/Commissioner of Central Goods and Services Tax or an Additional/Joint or Deputy/Assistant Commissioner of Central Goods and Service Tax to appoint officers of Integrated Goods and Services Tax below the rank of Assistant Commissioner of Integrated Goods and Services Tax Act, 2016.