Q 1. Who is the person responsible to make assessment of taxes payable under the Act?
Ans. Every person registered under the Act shall himself assess
the tax payable by him for a tax period and after such assessment he shall file
the return required under section 27.
Q 2. Is there any provision in MGL for tax treatment of
goods returned by the recipient?
Ans. Yes, Explanation to Section 44 of MGL has such a provision.
It provides that where goods received as an inward supply is returned by the
recipient to the supplier within six months from the date of the relevant
invoice, the tax payable on such supplies shall be equal to the input tax
credit availed earlier on such inward supply. This provision essentially
ensures that if the recipient returns the goods to the supplier within six
months of the date of its original supply, his tax liability on such returned
goods will be the same as was at the time of the original supply. If goods are
returned after six months of the date of the original supply invoice, the rate
of tax applicable will be the rate prevailing on date of such return.
Q 3. ‘A’ supplied goods to ‘B’ in April 2017, these goods
were returned by ‘B’ to ‘A’ on June 2017. The tax rate charged by ‘A’ on such
goods was 18%. In May 2017, the rate was amended to 18.5%. What is the tax
payable on return of such inward supply by ‘B’ to ‘A’?
Ans. 18%.
Q 4. When can a taxable person pay tax on a provisional
basis?
Ans. As a taxpayer has to pay tax on self-assessment basis, a
request for paying tax on provisional basis has to come from the taxpayer which
will then have to be permitted by the proper officer. In other words, no tax
officer can suomoto order payment of tax on provisional basis. This is governed
by section 44A of MGL. Tax can be paid on a provisional basis only after the
proper officer has permitted it through an order passed by him. For this
purpose, the taxable person has to make a written request to the proper officer,
giving reasons for payment of tax on a provisional basis. Such a request can be
made by the taxable person only in such cases where he is unable to determine:
a) the value of goods or services to be supplied by him, or
b) determine the tax rate applicable to the goods or services
to be supplied by him.
In such cases the taxable person has to execute a bond in the
prescribed form, and with such surety or security as the proper officer may
deem fit.
Q 5. What is the latest time by which final assessment is
required to be made?
Ans. The final assessment order has to be passed by the proper
officer within six months from the date of the communication of the order of
provisional assessment. However, on sufficient cause being shown and for
reasons to be recorded in writing, the above period of six months may be
extended:
a) by the Joint/Additional Commissioner for a further period
not exceeding six months, and
b) by the Commissioner for such further period as he may
deem fit.
Q 6. Where the tax liability as per the final assessment is
higher than in provisional assessment, will the taxable person be liable to pay
interest?
Ans. Yes. He will be liable to pay interest from the date the
tax was due to be paid originally till the date of actual payment.
Q 7. What recourse may be taken by the officer in case
proper explanation is not furnished for the discrepancy detected in the return
filed under section 45 of MGL?
Ans. If the taxable person does not provide a satisfactory explanation
within 30 days of being informed (extendable by the officer concerned) or does
not take corrective action within a reasonable period after accepting the discrepancies,
the Proper Officer may take recourse to any of the following provisions:
(a) Proceed to conduct audit under Section 49 of the Act;
(b) Direct the conduct of a special audit under Section 50
which is to be conducted by a Chartered Accountant or a Cost Accountant
nominated for this purpose by the Commissioner; or
(c) Undertake procedures of inspection, search and seizure
under Section 60 of the Act; or
(d) Initiate proceeding for determination of tax under
Section 51 of the Act.
Q 8. Whether Proper Officer is required to give any notice
to taxable person before completing assessment u/s 46?
Ans. As this provision relates to ‘best judgment assessment’,
giving a notice to the taxable person is not required.
Q 9. If a taxable person fails to file the return required
under law (under section 27 or 31), what legal recourse is available to the tax
officer?
Ans. The proper officer has to first issue a notice to the defaulting
taxable person under section 32 of MGL requiring him to furnish the return
within a specified period of time, which has to be a minimum of fifteen days as
per section 46 of MGL. If the taxable person fails to file return within the given
time, the proper officer shall proceed to assess the tax liability of the
return defaulter to the best of his judgement taking into account all the
relevant material available with him. This power is given under section 46 of MGL.
Q 10. Under what circumstances can a best judgment
assessment order issued under section 46 be withdrawn?
Ans. The best judgment order passed by the Proper Officer
under section 46 of MGL shall automatically stand withdrawn if the taxable
person furnishes a valid return for the default period (i.e. files the return
and pays the tax as assessed by him), within thirty days of the receipt of the best
judgment assessment order.
Q 11. What is the time limit for passing order u/s 46 and
47?
Ans. The time limit for passing an assessment order under section
46 or 47 is three or five years from the due date for filing the annual return.
Q 12. What is the legal recourse available in respect of a
person who is liable to pay tax but has failed to obtain registration?
Ans. Section 47 of MGL provides that in such a case, the proper
officer can assess the tax liability and pass an order to his best judgment for
the relevant tax periods. However, such an order must be passed within a period
of five years from the due date of filing of the annual return for the financial
year to which non-payment of tax relates.
Q 13. Under what circumstances can a tax officer initiate
Summary Assessment?
Ans. As per section 48 of MGL, Summary Assessments can be
initiated to protect the interest of revenue when: a) the proper officer has
evidence that a taxable person has incurred a liability to pay tax under the
Act, and b) the proper officer believes that delay in passing an assessment
order will adversely affect the interest of revenue. Such order can be passed
after seeking permission from the Additional Commissioner / Joint Commissioner.
Q 14. Other than appellate remedy, is there any other
recourse available to the taxpayer against a summary assessment order?
Ans. A taxable person against whom a summary assessment
order has been passed can apply for its withdrawal to the jurisdictional
Additional/Joint Commissioner within thirty days of the date of receipt of the
order. If the said officer finds the order erroneous, he can withdraw it and
direct the proper officer to carry out determination of tax liability in terms
of section 51 of MGL. The Additional/Joint Commissioner can follow a similar
course of action on his own motion if the finds the summary assessment order to
be erroneous (section 48 of MGL).
Q 15. Is summary assessment order to be necessarily passed
against the taxable person?
Ans. No. In certain cases like when goods are under transportation
or are stored in a warehouse, and the taxable person in respect of such goods
cannot be ascertained, the person in charge of such goods shall be deemed to be
the taxable person and will be assessed to tax (section 48 of MGL).
Q 16. Who can conduct audit of taxpayers?
Ans. As per section 49 of MGL, any officer of CGST or SGST authorized
by his Commissioner by a general or specific order may conduct audit of a
taxpayer. The frequency and manner of audit will be prescribed in due course.
Q 17. Whether any prior intimation is required before
conducting the audit?
Ans. Yes, prior intimation is required and the taxable person
should be informed at least 15 days prior to conduct of audit.
Q 18. What is the period within which the audit is to be
completed?
Ans. The audit is required to be completed within 3 months
from the date of commencement of audit or within a further period of a maximum
of 6 months subject to the approval of the Commissioner.
Q 19. What is meant by commencement of audit?
Ans. The term ‘commencement of audit’ is important because
audit has to be completed within a given time frame in reference to this date
of commencement. Commencement of audit means the later of the following:
a) the date on which the records/accounts called for by the
audit authorities are made available to them, or
b) the actual institution of audit at the place of business
of the taxpayer.
Q 20. What are the obligations of the taxable person when he
receives the notice of audit?
Ans. The taxable person is required to:
a) facilitate the verification of accounts/records available
or requisitioned by the authorities,
b) provide such information as the authorities may require
for the conduct of the audit, and
c) render assistance for timely completion of the audit.
Q 21. What would be the action by the proper officer upon
conclusion of the audit?
Ans. The proper officer must without delay inform the taxable
person about his findings, reasons for findings and the taxable person’s rights
and obligations in respect of such findings.
Q 22. Under what circumstances can a special audit be
instituted?
Ans. A special audit can be instituted in limited circumstances
where during scrutiny, investigation, etc. it comes to the notice that a case
is complex or the revenue stake is high. This power is given in section 50 of
MGL.
Q 23. Who can serve the notice for special audit?
Ans. The Assistant / Deputy Commissioner is to serve the notice
for special audit only after prior approval of the Commissioner.
Q 24. Who will do the special audit?
Ans. A Chartered Accountant or a Cost Accountant so nominated
by the Commissioner may undertake the audit.
Q 25. What is the time limit to submit the audit report?
Ans. The auditor will have to submit the report within 90 days
or within the further extended period of 90 days.
Q 26. Who will bear the cost of special audit?
Ans. The expenses for examination and audit including the remuneration
payable to the auditor will be determined and borne by the Commissioner.
Q 27. What action the tax authorities may take after the
special audit?
Ans. Based on the findings / observations of the special audit,
action can be initiated under Section 51 of the MGL.