Chapter 9 Union Territory Goods and Services Tax (UTGST) – CS Professional Advance Tax Law Notes is designed strictly as per the latest syllabus and exam pattern.
Union Territory Goods and Services Tax (UTGST) – CS Professional Advance Tax Law Study Material
Question 1.
The transitional provisions enable the existing tax payers to migrate to GST in transparent and smooth manner under the GST Act, 2017 on and from the appointed day being 1.7.2017. Explain. (Dec 2017, 3 marks)
Answer:
1. Migration of registration: As per CGST Act, on and from the appointed day, (22-6-2017 in cases of registration and composition and 01.07.2017 in other cases), every person registered under any of the existing laws and having a valid Permanent Account Number shall be issued a certificate of registration on provisional basis subject to specified conditions.
2. Migration of Cenvat Credit or VAT Credit: Provisions have been made in the Central Goods and Services Tax (CGST) Act, 2017 to ensure that Cenvat Credit or VAT Credit balance lying in books and other eligible credits are migrated to GST.
3. Clarity to transactions having some relation to pre-GST period: In case of transactional chain occurring partly before and partly after introduction of GST, provisions are made in Central Goods and Services Tax (CGST) Act, 2017 to clarify how will they be dealt with i.e., whether they would be liable to old taxes or GST and how will refunds/credits, etc. will be dealt. Similarly, provisions have been made in case of goods were sent for job-work prior to GST.
Question 2.
Write a short on “Union Territory”
Answer:
“Union territory” means the territory of, –
- The Andaman and Nicobar Islands;
- Lakshadweep;
- Dadra and Nagar Haveli;
- Daman and Diu;
- Chandigarh; or
- Other territory.
Explanation – For the purposes of this Act, each of the territories specified in sub-clauses (i) to (vi) shall be considered to be a separate Union territory.
Question 3.
Is the reverse charge mechanism applicable only to services?
Answer:
No. Reverse charge applies to supplies of both goods and services.
Question 4.
What will be the implications in case of purchase of goods from unregistered dealers?
Answer:
The receiver of goods would be liable to pay tax under reverse charge.
Question 5.
As per Section 7, which of the following would attract levy of UTGST?
(a) Inter-state supplies
(b) Intra-state supplies
(c) Any of the above
(d) None of the above
Answer:
(b) Intra-state supplies
Question 6.
Who can notify a supply to be taxed under reverse charge basis?
(a) Board
(b) Central Government
(c) GST Council
(d) None of the above
Answer:
(b) Central Government.
Question 7.
Why is advance ruling under GST necessary (Objective of Advance Ruling)?
Answer:
The objective of any advance ruling. Including under GST is to-
Provide certainty for tax liability in advance in relation to a future activity to be undertaken by the applicant
Attract Foreign Direct Investment (FDI) — By clarifying taxation and showing a clear picture of the future tax liability of the FDI. The clarity and clean taxation will attract non-residents who do not want to get involved in messy tax disputes.
- Reduce litigation and costly legal disputes
- Give decisions in a timely, transparent and inexpensive manner
Question 8.
When can one request for GST Advance Ruling?
Answer:
Any taxpayer can request for advance ruling when he is uncertain of the provisions. Advance tax ruling is applicable on –
- Classification of any goods and/or services under the Act
- Applicability of a notification which affects the rate of tax
- Determination of time and value of supply of goods/services
- Whether input tax credit paid (or deemed to be paid) will be allowed
- Determination of the liability to pay tax on any goods/services
- Whether the applicant has to be registered under GST
- Whether any particular thing done by the applicant regarding goods/services will result in a supply.
Union Territory Goods and Services Tax (UTGST) Notes
“Advance ruling”
“Advance ruling” means a decision provided by the Authority or the Appellate Authority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100 of the Central Goods and Services Tax Act, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant;
Objective of any advance ruling
- Provide certainty for tax liability in advance in relation to a future activity to be undertaken by the applicant
- Attract Foreign Direct Investment (FDI) – By clarifying taxation and showing a clear picture of the future tax liability of the FDI. The clarity and clean taxation will attract non-residents who do not want to get involved in messy tax disputes.
- Reduce litigation and costly legal disputes
- Give decisions in a timely, transparent and inexpensive manner
Advance tax ruling is applicable on
- Classification of any goods and/or services under the Act
- Applicability of a notification which affects the rate of tax
- Determination of time and value of supply of goods/services
- Whether input tax credit paid (or deemed to be paid) will be allowed
- Determination of the liability to pay tax on any goods/services
- Whether the applicant has to be registered under GST
- Whether any particular thing done by the applicant regarding goods/services will result in a supply.
Power of Central Government to issue Orders/ Directions for removal of difficulties [Section 26]
If any difficulty arises in giving effect to any provision of this Act, the Central Government may, on the recommendations of the Council, by a general or a special order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act or the rules or regulations made thereunder, as may be necessary or expedient for the purpose of removing the said difficulty: Provided that no such order shall be made after the expiry of a period of five years from the date of commencement of this Act.
Every order made under this section shall be laid, as soon as may be, after it is made, before each House of Parliament.
“Union territory”
“Union territory” means the territory of, –
(a) The Andaman and Nicobar Islands;
(b) Lakshadweep;
(c) Dadra and Nagar Haveli and Daman and Diu;
(d) Ladakh
(e) Chandigarh; and
(f) Other territory.