COTTON. WRONG PAYMENT OF TAX UNDER FCM., Goods and Services Tax - GST

[Sadanand Bulbule]

Dear experts

In terms of Notification No.43/2017-CTR dated 14/11/2017, a registered person is liable to pay tax under RMC on purchase of "Raw cotton from agriculturist" under Section 9[3] of the CGST Act.

However a taxpayer under the influence of misguidance, has paid tax under FCM on supply of such Raw cotton purchased from agriculturists and it is manifest in the books of account and financial statements.

But the Adjudicating Authority has again levied tax/interest/penalty by way of a consolidated order for five years under Section 74 on such purchase under RMC without considering the actual of payment of tax under FCM by the taxpayer.

Although there is procedural lapse, what are adverse revenue implications? And what is the remedy? An appeal under Section 107 or a rectification under Section 161?

Plz clarify.

Posts / Replies

[Sadanand Bulbule]

Plz read it as " RCM" instead of RMC.

[KASTURI SETHI]

Sh.Sadanand Bulbule Ji,

                       Sir,  In my opinion, the department will not accept application for rectification of error under Section 161 of CGST Act.

                             The better option is filing of appeal under Section 107. The issue can be contested on the ground that tax cannot be charged twice for the same transaction. (Emphasis is laid on  'same transaction'. 

                            Recently about four months ago I have read judgement  on this issue in favour of the taxpayer.

               

[Sadanand Bulbule]

Yes Sir. But the taxpayer has to deposit 10% of the disputed tax amount to file appeal under Section 107, which is the burning issue.

[Sadanand Bulbule]

Sirji

The situation is like black ice.