CA Final PAPER 5: INDIRECT TAX LAWS Syllabus

Within what period must the proper officer issue a refund order, and what interest applies on delayed refunds?

Refund order must be issued within 60 days of receipt of a complete application. If delayed beyond 60 days, interest at 6% p.a. is payable (9% p.a. for refunds arising from an order in appeal/adjudication).

What are the three types of assessment that a taxpayer/proper officer can undertake under GST?

Self-assessment (Section 59), Provisional assessment (Section 60), and Scrutiny of returns (Section 61). Additionally, Best judgment assessments: Section 62 (non-filers) and Section 63 (unregistered persons), and Summary assessment (Section 64).

What is "best judgment assessment" of non-filers under Section 62, and how can it be withdrawn?

If a registered person fails to file a return even after notice, the officer assesses tax to the best of his judgment. The order is deemed withdrawn if the person files the valid return within 60 days of service of the assessment order (with late fee/interest).

Distinguish between the two types of audit under GST: Section 65 and Section 66.

Section 65: audit by tax authorities (Commissioner or authorised officer). Section 66: special audit directed by an officer (not below Assistant Commissioner) and conducted by a Chartered Accountant or Cost Accountant nominated by the Commissioner.

What is the difference between Section 73 and Section 74 demand provisions under GST?

Section 73: demand where there is NO fraud/wilful misstatement/suppression. Section 74: demand involving fraud, wilful misstatement, or suppression of facts. (For FY 2024-25 onwards, both are merged into Section 74A with a uniform time limit.)

What is the time limit for issuing a show cause notice (SCN) and order under Section 73 (non-fraud cases)?

SCN: within 2 years and 9 months from the due date of the annual return. Order: within 3 years from the due date of the annual return for the relevant FY.

What is the time limit for issuing an SCN and order under Section 74 (fraud cases)?

SCN: within 4 years and 6 months from the due date of the annual return. Order: within 5 years from the due date of the annual return for the relevant FY.

Under Section 73, what penalty reduction is available if tax is paid before/within 30 days of the SCN?

If tax + interest is paid before issuance of SCN: no penalty. If paid within 30 days of SCN: no penalty. (General penalty 10% of tax or Rs. 10,000, whichever higher, if order is passed.)

Under Section 74, what penalties apply at various stages of payment in fraud cases?

Pay before SCN: 15% of tax. Pay within 30 days of SCN: 25%. Pay within 30 days of order: 50%. Otherwise: 100% of the tax amount as penalty.

Who may authorise inspection, search, and seizure under Section 67 of the CGST Act?

An officer not below the rank of Joint Commissioner (or who himself has reasons to believe) may authorise inspection in writing. Search and seizure require reasons to believe that goods/documents are liable to confiscation or relevant to proceedings.

Under Section 69 (power to arrest), which offences are cognizable and non-bailable?

Offences under Section 132(1)(a)-(d) where the amount of tax evaded, ITC wrongly availed, or refund wrongly taken exceeds Rs. 5 crore are cognizable and non-bailable.

What is the monetary threshold for prosecution and imprisonment terms under Section 132 for GST offences?

Tax evaded > Rs. 5 crore: up to 5 years imprisonment + fine. Rs. 2-5 crore: up to 3 years. Rs. 1-2 crore: up to 1 year. Repeat offence: up to 5 years.

What is the general penalty under Section 122(1) for supplying goods/services without an invoice or with a false invoice?

Penalty of Rs. 10,000 or an amount equivalent to the tax evaded / ITC wrongly availed / refund wrongly claimed, whichever is higher.

What is the maximum amount of "general penalty" under Section 125 for contraventions where no specific penalty is provided?

Penalty may extend to Rs. 25,000.

Describe the appellate hierarchy under GST law.

Adjudicating Authority -> Appellate Authority (Section 107) -> Appellate Tribunal/GSTAT (Section 112) -> High Court (Section 117) -> Supreme Court (Section 118).

What is the pre-deposit required to file an appeal to the Appellate Authority under Section 107?

Full admitted amount of tax/interest/penalty, plus 10% of the disputed tax amount (subject to a maximum cap, e.g., Rs. 20 crore CGST). Time limit: 3 months from communication of order (extendable by 1 month).

What is the additional pre-deposit required to appeal to the GST Appellate Tribunal under Section 112?

10% of the remaining disputed tax amount (in addition to the amount paid for the first appeal), subject to a maximum cap. Appeal must be filed within 3 months.

What is the purpose of an Advance Ruling under GST, and who can it be sought from?

An Advance Ruling provides certainty on tax treatment before undertaking a transaction. It is sought from the Authority for Advance Ruling (AAR), with appeals to the Appellate Authority for Advance Ruling (AAAR).

On which matters can an applicant seek an Advance Ruling under Section 97(2)?

Classification of goods/services, applicability of a notification, determination of time and value of supply, admissibility of ITC, determination of liability to pay tax, requirement of registration, and whether a particular activity amounts to supply.

On whom is an Advance Ruling binding, and when does it cease to be binding?

Binding only on the applicant who sought it and on the concerned/jurisdictional officer. It ceases to be binding if there is a change in law, facts, or circumstances on which it was based, or if obtained by fraud/suppression.

In the context of "Ethics under GST," what is the role of professional ethics for a GST practitioner?

A GST practitioner must maintain integrity, confidentiality of client information, professional competence, due care, and objectivity; must not facilitate tax evasion or false filings, and must comply with the GST Practitioner enrolment and conduct requirements under Rule 83.

What is the "Liability to pay in certain cases" provision regarding transfer of a business (Section 85)?

When a taxable person transfers his business wholly or partly, the transferor and transferee are jointly and severally liable to pay any tax, interest, or penalty due up to the time of transfer (whether determined before or after the transfer).

What is the basis of levy of customs duty under Section 12 of the Customs Act, 1962?

Customs duty is levied on goods imported into, or exported from, India at rates specified under the Customs Tariff Act, 1975. The taxable event for import is when goods cross into the territorial waters / on the date of presentation of bill of entry; for export, when goods cross territorial waters.

What is the "taxable event" for import and for export of goods under customs law (per case law)?

Import: the taxable event occurs when goods become part of the landmass / are cleared for home consumption (Kiran Spinning Mills / Garden Silk Mills cases). Export: the taxable event is when goods cross the territorial waters of India en route to a foreign destination.

Name the major types of customs duties levied under the Customs Tariff Act.

Basic Customs Duty (BCD), Integrated GST (IGST) on imports, GST Compensation Cess, Social Welfare Surcharge (SWS), Anti-dumping duty, Countervailing duty (CVD on subsidies), Safeguard duty, and Protective duty.

What is the purpose and basis of Anti-Dumping Duty under customs law?

Anti-dumping duty is levied (under Section 9A) when goods are exported to India at a price lower than their normal value (dumping), causing injury to the domestic industry. It equals the lower of the dumping margin or the injury margin.

What is the order/sequence for classification of goods under the Customs Tariff (General Rules of Interpretation)?

Goods are classified per the General Rules of Interpretation (GRI) 1 to 6: Rule 1 (terms of headings/section/chapter notes), Rule 2 (incomplete/unassembled goods and mixtures), Rule 3 (most specific description / essential character / last in numerical order), Rule 4 (akin goods), Rule 5 (packing), Rule 6 (subheadings).

How is the "transaction value" of imported goods determined under Section 14 of the Customs Act?

Transaction value = price actually paid or payable for goods when sold for export to India at the time and place of importation, in the course of international trade, where buyer and seller are unrelated and price is the sole consideration. Includes cost, insurance, and freight (CIF basis) plus specified additions.

What are the key cost additions to arrive at the assessable value of imported goods (CIF + loading)?

Add to FOB value: cost of transport/freight (or 20% of FOB if not ascertainable), insurance (or 1.125% of FOB if not ascertainable), and landing charges where applicable; plus commissions, royalties, and other costs under the Customs Valuation Rules to reach CIF assessable value.

What is a "bill of entry" and a "shipping bill" in import/export procedures?

Bill of Entry: document filed by an importer for clearance of imported goods (home consumption or warehousing). Shipping Bill: document filed by an exporter for clearance and export of goods. Both are filed electronically through ICEGATE/EDI.

Under customs warehousing provisions, what is the warehousing period for capital and non-capital goods (EOU/normal)?

Goods may be deposited in a warehouse without payment of duty. For an EOU/EHTP/STP unit, the warehousing period extends until consumption/clearance. For others, generally up to 1 year (extendable), with interest payable if cleared after the prescribed period.

What is the objective of the Foreign Trade Policy (FTP) and which authority administers it?

The FTP aims to promote India's exports and facilitate trade. It is framed under the Foreign Trade (Development and Regulation) Act, 1992, and administered by the Directorate General of Foreign Trade (DGFT) under the Ministry of Commerce and Industry.

What are the key Export Promotion Schemes under the FTP that a CA Final student should know?

Advance Authorisation Scheme (duty-free import of inputs for export), EPCG (Export Promotion Capital Goods - duty-free capital goods against export obligation), RoDTEP (Remission of Duties and Taxes on Exported Products), Duty Drawback, and EOU/SEZ schemes.

What is the EPCG (Export Promotion Capital Goods) scheme and its key export obligation?

EPCG allows import of capital goods at zero customs duty for pre-production, production, and post-production. In return, the importer must fulfil an export obligation equal to 6 times the duty saved, to be completed within 6 years from the date of issue of the authorisation.

What is the Duty Drawback scheme under customs/FTP?

Duty Drawback (Section 74 & 75 of Customs Act) refunds customs/excise duties paid on imported/excisable materials used in manufacturing exported goods. Section 74: re-export of duty-paid imported goods (up to 98% refund). Section 75: drawback on inputs used in exported manufactured goods (All Industry Rates / Brand Rate).