Ch 38 - Miscellaneous Issues in GST | GST Saral by CA Dhruv Aggarwal PDF Download

 Page 1


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 38 - Mi scel l aneous i ssues i n GST 
 
 
 
 
 
 
 
 
 
38.1 Anti-Profiteering Measure 
CHAPTER 38 
 
Miscellaneous issues in GST 
 
Provision relating to anti-profiteering measure has been introduced vide section 171 of CGST Act. 
 
The idea is that the taxable person should pass on benefit of reduction in rate of tax on any supply of goods or 
the benefit of input tax credit to the customer as reduction in prices - section 171(1) of CGST Act. 
The Central Government may, on recommendation of GST Council by notification, constitute an Authority, or 
empower any existing Authority constituted under any law, to examine whether input tax credits availed by any 
registered person or the reduction in the tax rate actua ly have resulted in a commensurate reduction in the 
price of the said goods or services or both supplied by him - section 171(2) of CGST Act. 
The Authority referred to in section 171(1) shall exercise such functions and have such powers as may be 
prescribed - section 171(3) of CGST Act. 
Political  gimmick  but  can  be source  of harassment - Though this is mainly a political gimmick,  the 
provision can cause tremendous harassment to taxable persons as it is practically    impossible to prove that 
the benefit of input tax credit has been passed on to customer by reducing the se ling prices. 
If these powers are given to lower GST authorities, the scope of harassment is tremendous. 
 
38.2 Tax deduction at source (GST TDS) 
 
Section 51 of CGST Act make provisions for GST TDS. 
 
GST TDS provisions can apply where total value of such supply, under a contract, exceeds rupees 2.50 lakhs. 
The Central or a State Government may mandate fo lowing persons to deduct GST TDS @ 1% of taxable 
goods or services or both from the payment made or credited to the supplier. 
 
(a)   a department or establishment of the Central or State Government, or 
(b)   Local authority, or 
(c)   Governmental agencies, or 
(d)   such persons or category of persons as may be notified, by the Central or a State Government on 
the recommendations of the GST Council. 
[Under section (d), large companies may be asked to deduct tax at source]. 
 
Deductor  and  deductee  - Person deducting GST TDS will be termed as 'deductor'.Supplier  from whose 
i nvoice tax is deducted will be termed as 'deductee'. 
No deduction if recipient is from di fferent State i.e. inter state supply-  no deduction shall be made if the 
location of the supplier and the place of supply is in a State or Union territory which is di fferent from the State 
or as the case may be, Union territory of registration of the recipient - proviso to section 51(1) of CGST Act. 
Page 2


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 38 - Mi scel l aneous i ssues i n GST 
 
 
 
 
 
 
 
 
 
38.1 Anti-Profiteering Measure 
CHAPTER 38 
 
Miscellaneous issues in GST 
 
Provision relating to anti-profiteering measure has been introduced vide section 171 of CGST Act. 
 
The idea is that the taxable person should pass on benefit of reduction in rate of tax on any supply of goods or 
the benefit of input tax credit to the customer as reduction in prices - section 171(1) of CGST Act. 
The Central Government may, on recommendation of GST Council by notification, constitute an Authority, or 
empower any existing Authority constituted under any law, to examine whether input tax credits availed by any 
registered person or the reduction in the tax rate actua ly have resulted in a commensurate reduction in the 
price of the said goods or services or both supplied by him - section 171(2) of CGST Act. 
The Authority referred to in section 171(1) shall exercise such functions and have such powers as may be 
prescribed - section 171(3) of CGST Act. 
Political  gimmick  but  can  be source  of harassment - Though this is mainly a political gimmick,  the 
provision can cause tremendous harassment to taxable persons as it is practically    impossible to prove that 
the benefit of input tax credit has been passed on to customer by reducing the se ling prices. 
If these powers are given to lower GST authorities, the scope of harassment is tremendous. 
 
38.2 Tax deduction at source (GST TDS) 
 
Section 51 of CGST Act make provisions for GST TDS. 
 
GST TDS provisions can apply where total value of such supply, under a contract, exceeds rupees 2.50 lakhs. 
The Central or a State Government may mandate fo lowing persons to deduct GST TDS @ 1% of taxable 
goods or services or both from the payment made or credited to the supplier. 
 
(a)   a department or establishment of the Central or State Government, or 
(b)   Local authority, or 
(c)   Governmental agencies, or 
(d)   such persons or category of persons as may be notified, by the Central or a State Government on 
the recommendations of the GST Council. 
[Under section (d), large companies may be asked to deduct tax at source]. 
 
Deductor  and  deductee  - Person deducting GST TDS will be termed as 'deductor'.Supplier  from whose 
i nvoice tax is deducted will be termed as 'deductee'. 
No deduction if recipient is from di fferent State i.e. inter state supply-  no deduction shall be made if the 
location of the supplier and the place of supply is in a State or Union territory which is di fferent from the State 
or as the case may be, Union territory of registration of the recipient - proviso to section 51(1) of CGST Act. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
Value to be taken  excluding  GST - For the purpose of deduction of tax specified above, the value of 
supply shall be taken as the amount excluding the tax (CGST, SGST or UTGST and Compensation Cess) 
indicated in the i nvoice - explanation to section 51(1) of CGST Act. 
Deductor  to pay tax deducted to Government  - The amount deducted as tax under this section shall be 
paid to the credit of the Government  by the deductor within ten days after the end of the month, in the 
prescribed manner - section 51(2) of CGST Act. 
Certificate  of TDS to deductee - The deductor sha l, in the manner prescribed, furnish to the deductee a 
certificate  mentioning therein the contract value, rate of deduction,  amount deducted,  amount paid to the 
appropriate Government and other prescribed details- section 51(3)of CGST Act. 
[Such certificate  does not seem to have any use as deductee  can claim credit of GST TDS  only when 
deductor f iles return with Government]. 
Deductor  to file monthly  return  electronically  -  Deductor  is required  to f ile return electronica ly to 
Government. The return is to be f iled in prescribed form and manner within ten days after end of each month - 
section 39(3) of CGST Act. 
If there is no transaction in a particular month, he is not required to f ile return for that month - section 39(8) of 
CGST Act. 
 
Time limit for filing return can be extended by Commissioner by issuing notification - section 39(6) of CGST 
Act. 
Late  fee if certificate  not  given - If any deductor fails to furnish to the deductee  the certificate,  after 
deducting  the  tax  at  source,  within  five  days  of crediting  the  amount  so  deducted  to  the  appropriate 
Government, the deductor shall be liable to pay, by way of a late fee, a sum of rupees one hundred per day 
from the day after the expiry of the five day period until the failure is rectified (maximum Rs 5,000] - section 
51(4) of CGST Act. 
 
[The deductee will have to make complaint to GST department for demanding late fee from deductor - very 
di fficult task indeed] 
Credit of TDS in electronic  cash register of deductee - The deductee shall claim credit, in his electronic 
cash ledger, of the tax deducted and reflected in the return of the deductor - section 51(5) of CGST Act. 
Thus, deductee can take credit in electronic cash register only when deductor f iles return and not on the basis 
of TDS certificate. 
Interest  if deductor does not pay tax deducted to Government  - If any deductor fails to pay to the credit 
of the appropriate Government the amount deducted as tax, he shall be liable to pay interest in accordance 
with the provisions of section 50(1), in addition to the amount of tax deducted. 
Determination of the amount in default under this section shall be made in the manner specified in section 73 or 
74 of CGST Act - section 51(7) of CGST Act. 
 
Refund of tax to deductee - Refund to the deductor or the deductee, as the case may be, arising on account 
of excess or erroneous deduction shall be dealt with in accordance with the provisions of section 54 of CGST 
Act. Ref und to deductor shall not be granted if the amount deducted has been credited to the electronic cash 
ledger of the deductee - section 51(8) of CGST Act. 
38.3 Advance  Ruling 
 
A businessman would like to be clear in his mind about various aspects of his venture and risks involved, 
before he starts a new business or adventure. He would like to get clear verdict about his doubts in respect of 
Page 3


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 38 - Mi scel l aneous i ssues i n GST 
 
 
 
 
 
 
 
 
 
38.1 Anti-Profiteering Measure 
CHAPTER 38 
 
Miscellaneous issues in GST 
 
Provision relating to anti-profiteering measure has been introduced vide section 171 of CGST Act. 
 
The idea is that the taxable person should pass on benefit of reduction in rate of tax on any supply of goods or 
the benefit of input tax credit to the customer as reduction in prices - section 171(1) of CGST Act. 
The Central Government may, on recommendation of GST Council by notification, constitute an Authority, or 
empower any existing Authority constituted under any law, to examine whether input tax credits availed by any 
registered person or the reduction in the tax rate actua ly have resulted in a commensurate reduction in the 
price of the said goods or services or both supplied by him - section 171(2) of CGST Act. 
The Authority referred to in section 171(1) shall exercise such functions and have such powers as may be 
prescribed - section 171(3) of CGST Act. 
Political  gimmick  but  can  be source  of harassment - Though this is mainly a political gimmick,  the 
provision can cause tremendous harassment to taxable persons as it is practically    impossible to prove that 
the benefit of input tax credit has been passed on to customer by reducing the se ling prices. 
If these powers are given to lower GST authorities, the scope of harassment is tremendous. 
 
38.2 Tax deduction at source (GST TDS) 
 
Section 51 of CGST Act make provisions for GST TDS. 
 
GST TDS provisions can apply where total value of such supply, under a contract, exceeds rupees 2.50 lakhs. 
The Central or a State Government may mandate fo lowing persons to deduct GST TDS @ 1% of taxable 
goods or services or both from the payment made or credited to the supplier. 
 
(a)   a department or establishment of the Central or State Government, or 
(b)   Local authority, or 
(c)   Governmental agencies, or 
(d)   such persons or category of persons as may be notified, by the Central or a State Government on 
the recommendations of the GST Council. 
[Under section (d), large companies may be asked to deduct tax at source]. 
 
Deductor  and  deductee  - Person deducting GST TDS will be termed as 'deductor'.Supplier  from whose 
i nvoice tax is deducted will be termed as 'deductee'. 
No deduction if recipient is from di fferent State i.e. inter state supply-  no deduction shall be made if the 
location of the supplier and the place of supply is in a State or Union territory which is di fferent from the State 
or as the case may be, Union territory of registration of the recipient - proviso to section 51(1) of CGST Act. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
Value to be taken  excluding  GST - For the purpose of deduction of tax specified above, the value of 
supply shall be taken as the amount excluding the tax (CGST, SGST or UTGST and Compensation Cess) 
indicated in the i nvoice - explanation to section 51(1) of CGST Act. 
Deductor  to pay tax deducted to Government  - The amount deducted as tax under this section shall be 
paid to the credit of the Government  by the deductor within ten days after the end of the month, in the 
prescribed manner - section 51(2) of CGST Act. 
Certificate  of TDS to deductee - The deductor sha l, in the manner prescribed, furnish to the deductee a 
certificate  mentioning therein the contract value, rate of deduction,  amount deducted,  amount paid to the 
appropriate Government and other prescribed details- section 51(3)of CGST Act. 
[Such certificate  does not seem to have any use as deductee  can claim credit of GST TDS  only when 
deductor f iles return with Government]. 
Deductor  to file monthly  return  electronically  -  Deductor  is required  to f ile return electronica ly to 
Government. The return is to be f iled in prescribed form and manner within ten days after end of each month - 
section 39(3) of CGST Act. 
If there is no transaction in a particular month, he is not required to f ile return for that month - section 39(8) of 
CGST Act. 
 
Time limit for filing return can be extended by Commissioner by issuing notification - section 39(6) of CGST 
Act. 
Late  fee if certificate  not  given - If any deductor fails to furnish to the deductee  the certificate,  after 
deducting  the  tax  at  source,  within  five  days  of crediting  the  amount  so  deducted  to  the  appropriate 
Government, the deductor shall be liable to pay, by way of a late fee, a sum of rupees one hundred per day 
from the day after the expiry of the five day period until the failure is rectified (maximum Rs 5,000] - section 
51(4) of CGST Act. 
 
[The deductee will have to make complaint to GST department for demanding late fee from deductor - very 
di fficult task indeed] 
Credit of TDS in electronic  cash register of deductee - The deductee shall claim credit, in his electronic 
cash ledger, of the tax deducted and reflected in the return of the deductor - section 51(5) of CGST Act. 
Thus, deductee can take credit in electronic cash register only when deductor f iles return and not on the basis 
of TDS certificate. 
Interest  if deductor does not pay tax deducted to Government  - If any deductor fails to pay to the credit 
of the appropriate Government the amount deducted as tax, he shall be liable to pay interest in accordance 
with the provisions of section 50(1), in addition to the amount of tax deducted. 
Determination of the amount in default under this section shall be made in the manner specified in section 73 or 
74 of CGST Act - section 51(7) of CGST Act. 
 
Refund of tax to deductee - Refund to the deductor or the deductee, as the case may be, arising on account 
of excess or erroneous deduction shall be dealt with in accordance with the provisions of section 54 of CGST 
Act. Ref und to deductor shall not be granted if the amount deducted has been credited to the electronic cash 
ledger of the deductee - section 51(8) of CGST Act. 
38.3 Advance  Ruling 
 
A businessman would like to be clear in his mind about various aspects of his venture and risks involved, 
before he starts a new business or adventure. He would like to get clear verdict about his doubts in respect of 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
taxation matters, before he decides to venture in the new business. Otherwise, he may be exposed to certain 
unexpected  risks which may have serious  adverse  consequences  and his business  may even fail. Hence, 
provisions of advance ruling were made in 1993 in Income Tax Act vide sections 245N to 245R. 
Advance ruling bri ngs certainty in determining duty liability and it helps in avoiding long drawn and expensive 
litigation at a later date. 
Similar provision of 'advance ruli ng' in respect of indirect taxes was made in 1999 so that the 
manufacturer/producer/importer/exporter is clear about legal aspects. The provisions were extended to service 
tax in May 2003. The provisions are contained in sections 23A to 23H of Central Excise Act, 1944, sections 
28E to 28L of Customs Act, 1962 and sections 96A to 96-I of Finance Act, 1994 (in respect of service tax). 
Now, similar provision is made in GST also. 
The Authority for Advance Ruling will give a decision on question raised before it. Such ruling will be binding 
on the applicant and the department. 
38.3-1 What  is 'advance ruling' 
 
"Advance ruling" means a written decision provided by the Authority or, as the case may be, the Appe late 
Authority to an applicant on matters or on questions specified in section 97(2) or section 100(1), as the case 
may be, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken 
by the applicant - section 95(a) of CGST Act. 
Application for advance ruling can be made in respect of supply 'being undertaken'. Thus, a person can apply 
even in respect of activity he is already doing, though rea ly that is not the idea of 'Advance Ruling'. 
Application should be made by applicant with fees, stating the question on which advance ruling is sought - 
section 97(1) of CGST Act. 
Questions for which advance ruling  can be sought - The question on which the advance ruling is sought 
shall be in respect of any of fo lowing [section 97(2) of CGST Act]. 
 
(a)   classification of any goods or services or both under the Act. 
(b)   applicability of a notification issued under provisions of the Act having a bearing on the rate of tax. 
(c)   determination of time and value of the goods or services or both. 
(d)   admissibility of input tax credit of tax paid or deemed to have been paid. 
(e)   determination of the liability to pay tax on any goods or services or both. 
(f)  whether applicant is required to be registered. 
(g)   whether any particular thing done by the applicant with respect to any goods or services or both 
amounts to or results in a supply of goods or services or both, within the meaning of that term. 
38.3-2 Authority for Advance  Ruling 
 
Authority for Advance Ruling will be constituted in each State/Union Territory - section 96 of CGST Act. 
Procedure to be fo lowed by Authority has been specified in section 98 of CGST Act. Advance ruling should 
be pronounced in 90 days. 
 
The Authority or Appe late Authority can amend the order to rectify an error apparent from records, within six 
months from date of order 
38.3-3 Appeal against  order of Advance  Ruling 
 
Appeal can be f iled against order of Authority of Advance Ruling before Appe late Authority for Advance 
Ruling - section 100 of CGST Act. 
Page 4


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 38 - Mi scel l aneous i ssues i n GST 
 
 
 
 
 
 
 
 
 
38.1 Anti-Profiteering Measure 
CHAPTER 38 
 
Miscellaneous issues in GST 
 
Provision relating to anti-profiteering measure has been introduced vide section 171 of CGST Act. 
 
The idea is that the taxable person should pass on benefit of reduction in rate of tax on any supply of goods or 
the benefit of input tax credit to the customer as reduction in prices - section 171(1) of CGST Act. 
The Central Government may, on recommendation of GST Council by notification, constitute an Authority, or 
empower any existing Authority constituted under any law, to examine whether input tax credits availed by any 
registered person or the reduction in the tax rate actua ly have resulted in a commensurate reduction in the 
price of the said goods or services or both supplied by him - section 171(2) of CGST Act. 
The Authority referred to in section 171(1) shall exercise such functions and have such powers as may be 
prescribed - section 171(3) of CGST Act. 
Political  gimmick  but  can  be source  of harassment - Though this is mainly a political gimmick,  the 
provision can cause tremendous harassment to taxable persons as it is practically    impossible to prove that 
the benefit of input tax credit has been passed on to customer by reducing the se ling prices. 
If these powers are given to lower GST authorities, the scope of harassment is tremendous. 
 
38.2 Tax deduction at source (GST TDS) 
 
Section 51 of CGST Act make provisions for GST TDS. 
 
GST TDS provisions can apply where total value of such supply, under a contract, exceeds rupees 2.50 lakhs. 
The Central or a State Government may mandate fo lowing persons to deduct GST TDS @ 1% of taxable 
goods or services or both from the payment made or credited to the supplier. 
 
(a)   a department or establishment of the Central or State Government, or 
(b)   Local authority, or 
(c)   Governmental agencies, or 
(d)   such persons or category of persons as may be notified, by the Central or a State Government on 
the recommendations of the GST Council. 
[Under section (d), large companies may be asked to deduct tax at source]. 
 
Deductor  and  deductee  - Person deducting GST TDS will be termed as 'deductor'.Supplier  from whose 
i nvoice tax is deducted will be termed as 'deductee'. 
No deduction if recipient is from di fferent State i.e. inter state supply-  no deduction shall be made if the 
location of the supplier and the place of supply is in a State or Union territory which is di fferent from the State 
or as the case may be, Union territory of registration of the recipient - proviso to section 51(1) of CGST Act. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
Value to be taken  excluding  GST - For the purpose of deduction of tax specified above, the value of 
supply shall be taken as the amount excluding the tax (CGST, SGST or UTGST and Compensation Cess) 
indicated in the i nvoice - explanation to section 51(1) of CGST Act. 
Deductor  to pay tax deducted to Government  - The amount deducted as tax under this section shall be 
paid to the credit of the Government  by the deductor within ten days after the end of the month, in the 
prescribed manner - section 51(2) of CGST Act. 
Certificate  of TDS to deductee - The deductor sha l, in the manner prescribed, furnish to the deductee a 
certificate  mentioning therein the contract value, rate of deduction,  amount deducted,  amount paid to the 
appropriate Government and other prescribed details- section 51(3)of CGST Act. 
[Such certificate  does not seem to have any use as deductee  can claim credit of GST TDS  only when 
deductor f iles return with Government]. 
Deductor  to file monthly  return  electronically  -  Deductor  is required  to f ile return electronica ly to 
Government. The return is to be f iled in prescribed form and manner within ten days after end of each month - 
section 39(3) of CGST Act. 
If there is no transaction in a particular month, he is not required to f ile return for that month - section 39(8) of 
CGST Act. 
 
Time limit for filing return can be extended by Commissioner by issuing notification - section 39(6) of CGST 
Act. 
Late  fee if certificate  not  given - If any deductor fails to furnish to the deductee  the certificate,  after 
deducting  the  tax  at  source,  within  five  days  of crediting  the  amount  so  deducted  to  the  appropriate 
Government, the deductor shall be liable to pay, by way of a late fee, a sum of rupees one hundred per day 
from the day after the expiry of the five day period until the failure is rectified (maximum Rs 5,000] - section 
51(4) of CGST Act. 
 
[The deductee will have to make complaint to GST department for demanding late fee from deductor - very 
di fficult task indeed] 
Credit of TDS in electronic  cash register of deductee - The deductee shall claim credit, in his electronic 
cash ledger, of the tax deducted and reflected in the return of the deductor - section 51(5) of CGST Act. 
Thus, deductee can take credit in electronic cash register only when deductor f iles return and not on the basis 
of TDS certificate. 
Interest  if deductor does not pay tax deducted to Government  - If any deductor fails to pay to the credit 
of the appropriate Government the amount deducted as tax, he shall be liable to pay interest in accordance 
with the provisions of section 50(1), in addition to the amount of tax deducted. 
Determination of the amount in default under this section shall be made in the manner specified in section 73 or 
74 of CGST Act - section 51(7) of CGST Act. 
 
Refund of tax to deductee - Refund to the deductor or the deductee, as the case may be, arising on account 
of excess or erroneous deduction shall be dealt with in accordance with the provisions of section 54 of CGST 
Act. Ref und to deductor shall not be granted if the amount deducted has been credited to the electronic cash 
ledger of the deductee - section 51(8) of CGST Act. 
38.3 Advance  Ruling 
 
A businessman would like to be clear in his mind about various aspects of his venture and risks involved, 
before he starts a new business or adventure. He would like to get clear verdict about his doubts in respect of 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
taxation matters, before he decides to venture in the new business. Otherwise, he may be exposed to certain 
unexpected  risks which may have serious  adverse  consequences  and his business  may even fail. Hence, 
provisions of advance ruling were made in 1993 in Income Tax Act vide sections 245N to 245R. 
Advance ruling bri ngs certainty in determining duty liability and it helps in avoiding long drawn and expensive 
litigation at a later date. 
Similar provision of 'advance ruli ng' in respect of indirect taxes was made in 1999 so that the 
manufacturer/producer/importer/exporter is clear about legal aspects. The provisions were extended to service 
tax in May 2003. The provisions are contained in sections 23A to 23H of Central Excise Act, 1944, sections 
28E to 28L of Customs Act, 1962 and sections 96A to 96-I of Finance Act, 1994 (in respect of service tax). 
Now, similar provision is made in GST also. 
The Authority for Advance Ruling will give a decision on question raised before it. Such ruling will be binding 
on the applicant and the department. 
38.3-1 What  is 'advance ruling' 
 
"Advance ruling" means a written decision provided by the Authority or, as the case may be, the Appe late 
Authority to an applicant on matters or on questions specified in section 97(2) or section 100(1), as the case 
may be, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken 
by the applicant - section 95(a) of CGST Act. 
Application for advance ruling can be made in respect of supply 'being undertaken'. Thus, a person can apply 
even in respect of activity he is already doing, though rea ly that is not the idea of 'Advance Ruling'. 
Application should be made by applicant with fees, stating the question on which advance ruling is sought - 
section 97(1) of CGST Act. 
Questions for which advance ruling  can be sought - The question on which the advance ruling is sought 
shall be in respect of any of fo lowing [section 97(2) of CGST Act]. 
 
(a)   classification of any goods or services or both under the Act. 
(b)   applicability of a notification issued under provisions of the Act having a bearing on the rate of tax. 
(c)   determination of time and value of the goods or services or both. 
(d)   admissibility of input tax credit of tax paid or deemed to have been paid. 
(e)   determination of the liability to pay tax on any goods or services or both. 
(f)  whether applicant is required to be registered. 
(g)   whether any particular thing done by the applicant with respect to any goods or services or both 
amounts to or results in a supply of goods or services or both, within the meaning of that term. 
38.3-2 Authority for Advance  Ruling 
 
Authority for Advance Ruling will be constituted in each State/Union Territory - section 96 of CGST Act. 
Procedure to be fo lowed by Authority has been specified in section 98 of CGST Act. Advance ruling should 
be pronounced in 90 days. 
 
The Authority or Appe late Authority can amend the order to rectify an error apparent from records, within six 
months from date of order 
38.3-3 Appeal against  order of Advance  Ruling 
 
Appeal can be f iled against order of Authority of Advance Ruling before Appe late Authority for Advance 
Ruling - section 100 of CGST Act. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
This is a new provision. In earlier provisions in respect of excise, customs and service tax, there was no 
provision for appeal. 
Appe late Authority for Advance ruling will be constituted by State/Union Territory - section 99 of CGST Act. 
 
38.3-4 Binding  nature of Advance  Ruling 
 
Advance Ruling of authority shall be binding only on the applicant and jurisdictional tax authorities, unless law, 
facts or circumstances supporting the original advance ruling have changed - section 105 of CGST Act. 
38.4 GST compliance rating 
 
Every registered person may be assigned a GST compliance rating score by Government based on his record 
of compliance with the provisions of this Act. The GST compliance rating score shall be determined on the 
basis of parameters to be prescribed in this behalf. 
The GST compliance rating score shall be updated at periodic intervals and intimated to the taxable person 
and also placed in the public domain in the manner prescribed - section 149 of CGST Act. 
There is also provision of black listing a taxable person. If he is black listed, the input tax credit will be 
available to recipient only when the supplier (who is black listed) actua ly pays tax. 
38.5 Obligation to furnish information return by various authorities 
 
Information  relating  to  taxable  person  is  available  with  various  authorities  like  taxable  person  himself, 
authorities  of State and Central Government  co lecting taxes, income tax, banks, Registrar of companies, 
RTO, Registrar of land records, Co lector, Stock Exchange, depository, RBI, GSTN Network etc. 
Such authorities are required to furnish information return as may be prescribed - section 150(1) of CGST 
Act. 
The information that can be ca led by Commissioner may be relating to payment of taxes relating to goods or 
services, bank account, consumption of electricity, sale or exchange of goods or property etc. 
The person who is responsible  to maintain records or statements in respect of aforesaid information shall 
supply the information return to prescribed authority as required by him. 
If the information as supplied is defective, the prescribed authority can give the person concerned opportunity 
to rectify the defect within 30 days. If the information is not corrected, it will be as if the information has not 
been submitted to prescribed authority. 
If the  information  is  sti l not supplied,  the  'prescribed  authority  shall service  a  notice  on him to  furnish 
information within 90 days - section 150(3) of CGST Act. 
There is exactly similar provision in section 285BA of Income Tax Act, 1962 and section 108A of Customs 
Act. 
 
If information return is not supplied, penalty can be imposed under section 123 of CGST Act. 
 
38.6 Power to collect statistics 
 
The Commissioner may, if he considers that it is necessary so to do, by notification, direct that statistics may 
be co lected relating to any matter dealt with by or in connection with this Act - section 151(1) of CGST Act. 
Upon such notification being issued, the Commissioner, or any person authorised by the Commissioner in this 
behalf may ca l upon a l concerned persons to furnish such information or returns as may be specified therein 
relating to any matter in respect of which statistics is to be co lected - section 151(2) of CGST Act. 
To ensure uniformity alloverIndia, such notification will be issued by Commissioner or Joint Secretary in 
Board - section 168(2) of CGST Act. 
Page 5


CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
 
 
 
 
 
 
 
 
 
 
CHAPTER 38 - Mi scel l aneous i ssues i n GST 
 
 
 
 
 
 
 
 
 
38.1 Anti-Profiteering Measure 
CHAPTER 38 
 
Miscellaneous issues in GST 
 
Provision relating to anti-profiteering measure has been introduced vide section 171 of CGST Act. 
 
The idea is that the taxable person should pass on benefit of reduction in rate of tax on any supply of goods or 
the benefit of input tax credit to the customer as reduction in prices - section 171(1) of CGST Act. 
The Central Government may, on recommendation of GST Council by notification, constitute an Authority, or 
empower any existing Authority constituted under any law, to examine whether input tax credits availed by any 
registered person or the reduction in the tax rate actua ly have resulted in a commensurate reduction in the 
price of the said goods or services or both supplied by him - section 171(2) of CGST Act. 
The Authority referred to in section 171(1) shall exercise such functions and have such powers as may be 
prescribed - section 171(3) of CGST Act. 
Political  gimmick  but  can  be source  of harassment - Though this is mainly a political gimmick,  the 
provision can cause tremendous harassment to taxable persons as it is practically    impossible to prove that 
the benefit of input tax credit has been passed on to customer by reducing the se ling prices. 
If these powers are given to lower GST authorities, the scope of harassment is tremendous. 
 
38.2 Tax deduction at source (GST TDS) 
 
Section 51 of CGST Act make provisions for GST TDS. 
 
GST TDS provisions can apply where total value of such supply, under a contract, exceeds rupees 2.50 lakhs. 
The Central or a State Government may mandate fo lowing persons to deduct GST TDS @ 1% of taxable 
goods or services or both from the payment made or credited to the supplier. 
 
(a)   a department or establishment of the Central or State Government, or 
(b)   Local authority, or 
(c)   Governmental agencies, or 
(d)   such persons or category of persons as may be notified, by the Central or a State Government on 
the recommendations of the GST Council. 
[Under section (d), large companies may be asked to deduct tax at source]. 
 
Deductor  and  deductee  - Person deducting GST TDS will be termed as 'deductor'.Supplier  from whose 
i nvoice tax is deducted will be termed as 'deductee'. 
No deduction if recipient is from di fferent State i.e. inter state supply-  no deduction shall be made if the 
location of the supplier and the place of supply is in a State or Union territory which is di fferent from the State 
or as the case may be, Union territory of registration of the recipient - proviso to section 51(1) of CGST Act. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
Value to be taken  excluding  GST - For the purpose of deduction of tax specified above, the value of 
supply shall be taken as the amount excluding the tax (CGST, SGST or UTGST and Compensation Cess) 
indicated in the i nvoice - explanation to section 51(1) of CGST Act. 
Deductor  to pay tax deducted to Government  - The amount deducted as tax under this section shall be 
paid to the credit of the Government  by the deductor within ten days after the end of the month, in the 
prescribed manner - section 51(2) of CGST Act. 
Certificate  of TDS to deductee - The deductor sha l, in the manner prescribed, furnish to the deductee a 
certificate  mentioning therein the contract value, rate of deduction,  amount deducted,  amount paid to the 
appropriate Government and other prescribed details- section 51(3)of CGST Act. 
[Such certificate  does not seem to have any use as deductee  can claim credit of GST TDS  only when 
deductor f iles return with Government]. 
Deductor  to file monthly  return  electronically  -  Deductor  is required  to f ile return electronica ly to 
Government. The return is to be f iled in prescribed form and manner within ten days after end of each month - 
section 39(3) of CGST Act. 
If there is no transaction in a particular month, he is not required to f ile return for that month - section 39(8) of 
CGST Act. 
 
Time limit for filing return can be extended by Commissioner by issuing notification - section 39(6) of CGST 
Act. 
Late  fee if certificate  not  given - If any deductor fails to furnish to the deductee  the certificate,  after 
deducting  the  tax  at  source,  within  five  days  of crediting  the  amount  so  deducted  to  the  appropriate 
Government, the deductor shall be liable to pay, by way of a late fee, a sum of rupees one hundred per day 
from the day after the expiry of the five day period until the failure is rectified (maximum Rs 5,000] - section 
51(4) of CGST Act. 
 
[The deductee will have to make complaint to GST department for demanding late fee from deductor - very 
di fficult task indeed] 
Credit of TDS in electronic  cash register of deductee - The deductee shall claim credit, in his electronic 
cash ledger, of the tax deducted and reflected in the return of the deductor - section 51(5) of CGST Act. 
Thus, deductee can take credit in electronic cash register only when deductor f iles return and not on the basis 
of TDS certificate. 
Interest  if deductor does not pay tax deducted to Government  - If any deductor fails to pay to the credit 
of the appropriate Government the amount deducted as tax, he shall be liable to pay interest in accordance 
with the provisions of section 50(1), in addition to the amount of tax deducted. 
Determination of the amount in default under this section shall be made in the manner specified in section 73 or 
74 of CGST Act - section 51(7) of CGST Act. 
 
Refund of tax to deductee - Refund to the deductor or the deductee, as the case may be, arising on account 
of excess or erroneous deduction shall be dealt with in accordance with the provisions of section 54 of CGST 
Act. Ref und to deductor shall not be granted if the amount deducted has been credited to the electronic cash 
ledger of the deductee - section 51(8) of CGST Act. 
38.3 Advance  Ruling 
 
A businessman would like to be clear in his mind about various aspects of his venture and risks involved, 
before he starts a new business or adventure. He would like to get clear verdict about his doubts in respect of 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
taxation matters, before he decides to venture in the new business. Otherwise, he may be exposed to certain 
unexpected  risks which may have serious  adverse  consequences  and his business  may even fail. Hence, 
provisions of advance ruling were made in 1993 in Income Tax Act vide sections 245N to 245R. 
Advance ruling bri ngs certainty in determining duty liability and it helps in avoiding long drawn and expensive 
litigation at a later date. 
Similar provision of 'advance ruli ng' in respect of indirect taxes was made in 1999 so that the 
manufacturer/producer/importer/exporter is clear about legal aspects. The provisions were extended to service 
tax in May 2003. The provisions are contained in sections 23A to 23H of Central Excise Act, 1944, sections 
28E to 28L of Customs Act, 1962 and sections 96A to 96-I of Finance Act, 1994 (in respect of service tax). 
Now, similar provision is made in GST also. 
The Authority for Advance Ruling will give a decision on question raised before it. Such ruling will be binding 
on the applicant and the department. 
38.3-1 What  is 'advance ruling' 
 
"Advance ruling" means a written decision provided by the Authority or, as the case may be, the Appe late 
Authority to an applicant on matters or on questions specified in section 97(2) or section 100(1), as the case 
may be, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken 
by the applicant - section 95(a) of CGST Act. 
Application for advance ruling can be made in respect of supply 'being undertaken'. Thus, a person can apply 
even in respect of activity he is already doing, though rea ly that is not the idea of 'Advance Ruling'. 
Application should be made by applicant with fees, stating the question on which advance ruling is sought - 
section 97(1) of CGST Act. 
Questions for which advance ruling  can be sought - The question on which the advance ruling is sought 
shall be in respect of any of fo lowing [section 97(2) of CGST Act]. 
 
(a)   classification of any goods or services or both under the Act. 
(b)   applicability of a notification issued under provisions of the Act having a bearing on the rate of tax. 
(c)   determination of time and value of the goods or services or both. 
(d)   admissibility of input tax credit of tax paid or deemed to have been paid. 
(e)   determination of the liability to pay tax on any goods or services or both. 
(f)  whether applicant is required to be registered. 
(g)   whether any particular thing done by the applicant with respect to any goods or services or both 
amounts to or results in a supply of goods or services or both, within the meaning of that term. 
38.3-2 Authority for Advance  Ruling 
 
Authority for Advance Ruling will be constituted in each State/Union Territory - section 96 of CGST Act. 
Procedure to be fo lowed by Authority has been specified in section 98 of CGST Act. Advance ruling should 
be pronounced in 90 days. 
 
The Authority or Appe late Authority can amend the order to rectify an error apparent from records, within six 
months from date of order 
38.3-3 Appeal against  order of Advance  Ruling 
 
Appeal can be f iled against order of Authority of Advance Ruling before Appe late Authority for Advance 
Ruling - section 100 of CGST Act. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
This is a new provision. In earlier provisions in respect of excise, customs and service tax, there was no 
provision for appeal. 
Appe late Authority for Advance ruling will be constituted by State/Union Territory - section 99 of CGST Act. 
 
38.3-4 Binding  nature of Advance  Ruling 
 
Advance Ruling of authority shall be binding only on the applicant and jurisdictional tax authorities, unless law, 
facts or circumstances supporting the original advance ruling have changed - section 105 of CGST Act. 
38.4 GST compliance rating 
 
Every registered person may be assigned a GST compliance rating score by Government based on his record 
of compliance with the provisions of this Act. The GST compliance rating score shall be determined on the 
basis of parameters to be prescribed in this behalf. 
The GST compliance rating score shall be updated at periodic intervals and intimated to the taxable person 
and also placed in the public domain in the manner prescribed - section 149 of CGST Act. 
There is also provision of black listing a taxable person. If he is black listed, the input tax credit will be 
available to recipient only when the supplier (who is black listed) actua ly pays tax. 
38.5 Obligation to furnish information return by various authorities 
 
Information  relating  to  taxable  person  is  available  with  various  authorities  like  taxable  person  himself, 
authorities  of State and Central Government  co lecting taxes, income tax, banks, Registrar of companies, 
RTO, Registrar of land records, Co lector, Stock Exchange, depository, RBI, GSTN Network etc. 
Such authorities are required to furnish information return as may be prescribed - section 150(1) of CGST 
Act. 
The information that can be ca led by Commissioner may be relating to payment of taxes relating to goods or 
services, bank account, consumption of electricity, sale or exchange of goods or property etc. 
The person who is responsible  to maintain records or statements in respect of aforesaid information shall 
supply the information return to prescribed authority as required by him. 
If the information as supplied is defective, the prescribed authority can give the person concerned opportunity 
to rectify the defect within 30 days. If the information is not corrected, it will be as if the information has not 
been submitted to prescribed authority. 
If the  information  is  sti l not supplied,  the  'prescribed  authority  shall service  a  notice  on him to  furnish 
information within 90 days - section 150(3) of CGST Act. 
There is exactly similar provision in section 285BA of Income Tax Act, 1962 and section 108A of Customs 
Act. 
 
If information return is not supplied, penalty can be imposed under section 123 of CGST Act. 
 
38.6 Power to collect statistics 
 
The Commissioner may, if he considers that it is necessary so to do, by notification, direct that statistics may 
be co lected relating to any matter dealt with by or in connection with this Act - section 151(1) of CGST Act. 
Upon such notification being issued, the Commissioner, or any person authorised by the Commissioner in this 
behalf may ca l upon a l concerned persons to furnish such information or returns as may be specified therein 
relating to any matter in respect of which statistics is to be co lected - section 151(2) of CGST Act. 
To ensure uniformity alloverIndia, such notification will be issued by Commissioner or Joint Secretary in 
Board - section 168(2) of CGST Act. 
CA DHRUV AGRAWAL – National Chairman Taxation Committee-All India Confederation of Small & Micro Industries Association  
 
 
The individual information will not be disclosed. No such information shall be used for the purpose of any 
proceedings  under  the  provisions  of  the  Act.  Access  to  the  information  will be  restricted.  However, 
information relating to class of taxable persons or class of transactions can be published in public interest by 
Commissioner- section 152 of CGST Act read with section 158(3)(i) of CGST Act. 
To ensure uniformity alloverIndia, such publication shall be done by Commissioner  or Joint Secretary in 
Board - section 168(2) of CGST Act. 
 
If statistical return is not supplied, penalty can be imposed under section 124 of CGST Act. 
 
38.7 Taking  assistance from an expert 
 
Any officer not below the rank of Assistant Commissioner may, having regard to the nature and complexity of 
the case and the interest of revenue, take assistance of any expert at any stage of scrutiny, inquiry, investigation 
or any other proceedings before him - section 153 of CGST Act. 
38.8 Drawal of samples 
 
The Commissioner  of CGST/SGST or an officer authorized by him may take samples of goods from the 
possession of any taxable persons, where he considers it necessary, and provide a receipt for any samples so 
taken - section 154 of CGST Act. 
38.9 Persons discharging functions under the Act shall be deemed to be public servants 
 
A l persons discharging functions under the Act shall be deemed to be public servants within the meaning of 
section 21 of the Indian Penal Code, 1860 - section 156 of CGST Act. 
Protection  of actions taken under the Act in good faith - No suit, prosecution or other legal proceedings 
shall lie against (a) the President, State President, Members, officers or other employees of the Appe late 
Tribunal or any other person authorised by the said Appe late Tribunal (b) any officer appointed or authorised 
under this Act- for anything which is in good faith done or intended to be done under this Act or the rules 
made thereunder - section 157 of CGST Act. 
Disclosure  of confidential  information by a public servant  - A l particulars contained in any statement 
made, return furnished or accounts or documents produced in accordance with the Act, or in any record of 
evidence given in the course of any proceedings  under the Act (other than proceeding before a Criminal 
Court), or in any record of any proceedings under the Act shall be treated as confidential - section 158(1) of 
CGST Act. 
Its disclosure is permitted only in specified situations and cases - section 158(3) of CGST Act. 
 
Information relating to class of taxable persons or class of transactions can be published in public interest by 
Commissioner- section 152 of CGST Act read with section 158(3)(i) of CGST Act. 
 
To ensure uniformity alloverIndia, such publication shall be done by Commissioner  or Joint Secretary in 
Board - section 168(2) of CGST Act. 
 
38.10 Publication of information respecting persons in certain cases 
 
If the Commissioner, or any other office authorized by him in this behalf, is of opinion that it is necessary or 
expedient in the public interest to publish the names of any person and any other particulars relating to any 
proceedings or prosecutions under the Act in respect of such person, it may cause to be published such names 
and particulars in such manner as it thinks fit - section 159(1) of CGST Act. 
No publication under this section shall be made in relation to any penalty imposed under the Act until the time 
for presenting an appeal to the First Appe late Authority under section 79 has expired without an appeal 
having been presented or the appeal, if presented, has been disposed of.