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TMI BlogREADING DOWN MODEL IGST ACT (PART-8) (PAYMENT OF TAX)X X X X Extracts X X X X X X X X Extracts X X X X ..... READING DOWN MODEL IGST ACT (PART-8) (PAYMENT OF TAX) - By: - Dr. Sanjiv Agarwal - Goods and Services Tax - GST - Dated:- 29-7-2016 - - Chapter V of the Model IGST Act comprises of section 7 which contains provisions for payment of tax, interest, penalty and other amounts. The manner of maintenance of books and procedural requirements shall be prescribed by the Central Government after the legislation is enacted. Manner of Payment Section 7 provides for deposit or payment of tax (i.e.) IGST interest on delayed payment of tax interest fee any other amount Accordingly, taxable person shall be required to deposit aforementioned amounts by way of / by - Internet banking, or Using debit / cred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it card, or National Electronic Funds Transfer (NEFT), or Real Time Gross Settlement (RTGS), or Any other mode which will be credited to the electronic cash ledger of such taxable person maintained under the Act. The date of deposit in bank shall be deemed to be that date on which amount is credited to the account of the appropriate Government in the authorized bank. The conditions and limitations for such deposit of amounts and how electronic cash ledger shall be maintained will be prescribed by the Government. Matter to be Prescribed Manner of maintaining electronic cash ledger Manner in which the input tax credit as self-assessed in the return of a taxable person shall be credited to his electronic credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ledger to be maintained Manner, conditions and time within which the amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of the Act or the rules Manner, conditions and the time within which the amount available in the electronic credit ledger may be used for making any payment towards tax payable under the provisions of the Act or the rules Manner in which all liabilities of a taxable person under this Act shall be recorded and maintained in an electronic register Utilization of Credit Sub-section (5) provides for the manner in which input tax credit on account of IGST, CGST and SGST could be utilized. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly, The amount of input tax credit on account of IGST available in the electronic credit ledger shall first be utilized towards payment of IGST and the amount remaining, if any, may be utilized towards the payment of CGST and SGST, in that order. The amount of input tax credit on account of CGST available in the electronic credit ledger shall first be utilized towards payment of CGST and the amount remaining, if any, may be utilized towards the payment of IGST. The amount of input tax credit on account of SGST available in the electronic credit ledger shall first be utilized towards payment of SGST and the amount remaining, if any, may be utilized towards the payment of IGST. This manner of utilization of inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t tax credit amongst three taxes inter se, can be understood by way of following diagrams The following matrix explains the preference to be adopted for utilization of credit- TAX TYPE (INPUT) TAX TYPE (OUTPUT) WHETHER POSSIBLE RANKING CGST CGST YES 1 CGST SGST NO N.A CGST IGST YES 2 SGST CGST NO N.A SGST SGST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... YES 1 SGST IGST YES 2 IGST IGST YES 1 IGST CGST YES 2 IGST SGST YES 3 It may be noted that there is no provisions for cross input tax credit utilization between CGST and IGST. Further, order of taking credit will not be allowed to be altered or jumped, i.e., it has to be strictly followed. Refund of Balance Credit Sub-section (6) provides that the balance in the cash or credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t ledger after payment of tax, interest, penalty, fee or any other amount payable under the Act or the rules made thereunder may be refunded in accordance with the provisions of section 38 of the CGST Act and the amount collected as IGST shall stand reduced to that extent. Thus, the balances of electronic cash or credit ledgers will be reduced after the payment to taxes etc are made through such ledgers. The refund will be allowed as provided in section 38 of CGST Act as a consequence of which IGST balance will stand reduced. According to section 38 of CGST Act, 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 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... GST/CGST/SGST before the expiry of two years from the relevant date in such form and in such manner as may be prescribed. The limitation of two years shall not apply where such tax or interest or the amount referred to above has been paid under protest. Order of Discharge Sub-section 8 provides for discharge of dues in the prescribed order and assessee can not appropriate tax demand under any other order of preference. Accordingly, every taxable person is required to discharge his tax and other dues in the following order- (a) self-assessed tax, and other dues related to returns of previous tax periods; (b) self-assessed tax, and other dues related to the return of the current tax period; (c) any other amount payable under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act or the rules made thereunder including the demand determined under section 51 of the CGST Act. Section 7(8) provides that every taxable person shall discharge his tax and other dues under IGST Act or the rules framed for this purpose in the following order only - self-assessed tax, and other dues related to returns of previous tax periods, self-assessed tax, and other dues related to the return of the current tax period, any other amount payable under the Act or the rules including the demand determined under section 51 of the CGST Act. Section 51 of CGST Act provides for determination of tax not paid or short paid or erroneously refunded, akin to present section 73 of the Finance Act, 1994. Passing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Incidence According to sub-section (9), there is a deeming provisions for passing of tax incidence. Every person who has paid the tax on goods and/or service under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such tax to the recipient of such goods and/or services. This deeming provision shall apply unless the taxpayer is able to prove to the contrary. The onus of proof will lie on the taxpayer. It appears to be a grey area and we can see continuation of disputes arising out of unjust enrichment. (To be continued ..) - Reply By swaminathan venkataraman as = OFFHAND According to own independent perception,- as often canvassed before, -the inherently dubious / paten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly distortional concept- 'DEEMED' - widely and impulsively employed in legal circles , in general, and mindlessly resorted to in modern- days- legislation, in particular, has most certainly the otherwise avoidable 'grey areas' ; which is potent with scope for controversies galore, and the resulting disputes and litigation. In the context herein, what calls for a special focus is the very much wanting political will and apathy in such matters; which indisputably have impact on and gravely impairs the lawful rights and interests of mainly the consumers/direct stakeholders. Besides that, it is not the people but it is the government(S) who is going to be the unintended beneficiaries of 'unjust enrichment' made a men ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of; and for funding its so called public expenditure , with no effective in-built checks and balances in place . Last but not least, to go ahead with any enactment, despite itself being prim facie deficient and replete with lacunae, more so without the procedural rules simultaneously framed and brought in and in place, could only lead to further muddling up the already strained legal system. As the towering legal legend and renowned humanitarian of our own times used to keep cautioning, for long, and as long back as a couple of decades ago,- we have now reached the danger point when the laws are made almost entirely by the bureaucracy , and Parliament has only a formal role to play in law making. On the topic of stock exchange ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , as he very rightly pointed out, that is one source commonly resorted to for speculation, making more money (gains), without earning it. Said, quoting the warning by Lord Keynes:- Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill (un !) done. (SOURCE: For more inspiring wise thoughts, suggest reading incisively through published speeches/writings of N A Palkhivala - We, the Nation THE LOST DECADES ) Side Dish: 25 years of reforms: Why India needs an administrative innovation After 25 years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of liberalisation, India s rich are growing richer and the poor poorer qz.comA quarter century of market reform leaves India richer with wider inequality. Dated: 30-7-2016 Reply By Dr. Sanjiv Agarwal as = Agree with your views , Mr Swaminathan, now the law is being drafted by the tax collectors themselves with sole objective to maximise tax collection without questions being asked on its purposeful utilisation . The law ought to be simple , easily understood and implementable .lot of miles to go before GST proposed law is enacted. Let's all send our feedback and suggestions at this point in time. Sanjiv Agarwal Dated: 8-8-2016 - Scholarly articles for knowledge sharing authors experts professionals Tax Management India - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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