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TMI BlogScope of remission of tax in GST where the supplies are found to be deficient in quantityX X X X Extracts X X X X X X X X Extracts X X X X ..... Section 11 of the First Draft Model GST Act states that: 11. Remission of tax on supplies found deficient in quantity (1) The Central or a State Government may, by rules made under this sub-section, provide for remission of tax on such supplies which are found to be deficient in quantity due to any natural causes. (2) Any rules made under sub-section (1) may, having regard to the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of the supply, fix the limit or limits of percentage beyond which no such remission shall be allowed. Now various question arouse about the the scope and coverage of the remission of tax as per the above stated provision as follows: Will it be in line with the the remission of duty in Central Excise; Whether it will be post removal of goods from the premises of supplier and before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reaching to the destination of recipient; Will it address the issue of manufacturing loss, process loss or storage loss. Finally, what was the need to bring this kind of provision in GST. Will it not being inspect raj indirectly? - Reply By CA Surender Gupta - The Reply = As per my understanding, the intention and purpose of bringing the kind of provision as above is lost in haste draft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of the provision. Had, it been the intention of remission of duty after the event of supply occurs and before reaching the destination, it may have differently worded. Since the issue of manufacturing loss, process loss, storage loss, transportation loss or any other loss due to natural event or any other reason before occurring of supply event, remain unaddressed and would lead to undue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harassment. To understand further, pl see an issue of 'Invisible Loss' in TNVAT - M/s. Sri Gayathri Enterprises Versus The Assistant Commissioner (CT) [ 2016 (8) TMI 635 - MADRAS HIGH COURT ] wherein the matter was remanded back for ascertaining the factual position. Demand of VAT - reversal of Input tax credit (ITC) - assessment, pertaining to 'Invisible Loss' during m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufacturing activity - Held that:- matters are remanded to the respondent for fresh consideration, who shall cause inspection of the petitioner's Factory and ascertain the manufacturing process, and during the course of such inspection, the petitioner is directed to furnish details of the manufacturing process, and thereafter, the respondent shall ascertain as to the quantum of manufacturing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss and issue necessary supplementary show cause notices to the petitioner, and after considering the objections filed, and after affording opportunity of personal hearing, the respondent is directed to redo the assessment in accordance with law. Now my concern is how these issues will be addressed in GST. - Reply By Ganeshan Kalyani - The Reply = Sir, nice initiative to induce a discus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion among experts by which visitors shall enrich their knowledge. Ofcourse visitors may also cast their views etc. Sir, all these concerns are very valid. The law should have clear direction. Thanks. - Reply By MARIAPPAN GOVINDARAJAN - The Reply = Your concern is good. We may not expect the remission is in line with Central Excise. The Actual provisions of Act and Rules and will make it cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar. Now the drafting in law is not good having so many mistakes, the provisions of rules are inconsistent with main Act. If GST is to be introduced with effect from 01.04.2017 there will be hurry in drafting and there may be many chaos. - Reply By Ganeshan Kalyani - The Reply = Sir, in my view the GST provision is nothing but advance version of VAT. I mean to say the concept of taxing is same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as that of VAT. The impressive point is that it evades cascading effect as most of the taxes now will be charged and collected under one law i.e. GST instead of under different provisions and law. So it is quite expected that some existing provison would also be carry forward in GST. Thanks. - Reply By YAGAY AND SUN - The Reply = Dear Sir, The very concept of remission of duty has also remain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in disputes. Your concerns are valid. Lets hope for the best for Industries and Trade perspective in this matter. Regards, YAGAY AND SUN - Reply By Ganeshan Kalyani - The Reply = Sir, in my view, the remission provison is needed in GST as well. The only request is for a clear provision and procedure to be incorporated in the GST Law. Instead of letting the mistakes happen first and thereaf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter the provison is amended vide Notification, Circulate etc. The concern why the remission provision is need is that though the taxation point is supply the tax should be paid when consideration is earned by the seller. In case of quantity loss due to natural cause, the consideraion is not received and therefor the liability should not be raised. - Scope of remission of tax in GST where the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplies are found to be deficient in quantity - Query Started By: - CA Surender Gupta Dated:- 11-9-2016 Goods and Services Tax - GST - Got 6 Replies - GST - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - 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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