Section 20 of UTGST Act 2017: Miscellaneous Transitional Provisions

Provisions under Section 20 of the Union Territory Goods and Services Tax (UTGST) Act, 2017 relating to “Miscellaneous Transitional Provisions”, are as under:

Section 20 of UTGST Act 2017: Miscellaneous Transitional Provisions (CHAPTER VIII – TRANSITIONAL PROVISIONS)

(1) Where any goods on which tax, if any, had been paid under the existing law at the time of sale thereof, not being earlier than six months prior to the appointed day, are returned to any place of business on or after the appointed day, the registered person shall be eligible for refund of the tax paid under the existing law where such goods are returned by a person, other than a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer:

Provided that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply.

(2) (a) Where, in pursuance of a contract entered into prior to the appointed day, the price of any goods is revised upwards on or after the appointed day, the registered person who had sold such goods shall issue to the recipient a supplementary invoice or debit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act, such supplementary invoice or debit note shall be deemed to have been issued in respect of an outward supply made under this Act.

(b) Where, in pursuance of a contract entered into prior to the appointed day, the price of any goods is revised downwards on or after the appointed day, the registered person who had sold such goods may issue to the recipient a credit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this Act such credit note shall be deemed to have been issued in respect of an outward supply made under this Act:

Provided that the registered person shall be allowed to reduce his tax liability on account of issue of the credit note only if the recipient of the credit note has reduced his input tax credit corresponding to such reduction of tax liability.

(3) Every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of input tax credit, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be refunded to him in cash in accordance with the provisions of the said law:

Provided that where any claim for refund of the amount of input tax credit is fully or partially rejected, the amount so rejected shall lapse:

Provided further that no refund shall be allowed of any amount of input tax credit where the balance of the said amount as on the appointed day has been carried forward under this Act.

(4) Every claim for refund filed after the appointed day for refund of any tax paid under the existing law in respect of the goods exported before or after the appointed day shall be disposed of in accordance with the provisions of the existing law:

Provided that where any for refund of input tax credit is fully or partially rejected, the amount so rejected shall lapse:

Provided further that no refund shall be allowed of any amount of input tax credit where the balance of the said amount as on the appointed day has been carried forward under this Act.

(5) (a) Every proceeding of appeal, revision, review or reference relating to a claim for input tax credit initiated whether before, on or after the appointed day, under the existing law shall be disposed of in accordance with the provisions of the existing law, and any amount of credit found to be admissible to the claimant shall be refunded to him in cash in accordance with the provisions of the existing law and the amount rejected, if any, shall not be admissible as input tax credit under this Act:

Provided that no refund shall be allowed of any amount of input tax credit where the balance of the said amount as on the appointed day has been carried forward under this Act.

(b) Every proceeding of appeal, revision, review or reference relating to recovery of input tax credit initiated whether before, on or after the appointed day, under the existing law shall be disposed of in accordance with the provisions of the existing law, and if any amount of credit becomes recoverable as a result of such appeal, revision, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.

(6) (a) Every proceeding of appeal, revision, review or reference relating to any output tax liability initiated whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with the provisions of the existing law, and if any amount becomes recoverable as a result of such appeal, revision, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and amount so recovered shall not be admissible as input tax credit under this Act.

(b) Every proceeding of appeal, revision, review or reference relating to any output tax liability initiated whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with the provisions of the existing law, and any amount found to be admissible to the claimant shall be refunded to him in cash in accordance with the provisions of the existing law and the amount rejected, if any, shall not be admissible as input tax credit under this Act.

(7) (a) Where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.

(b) Where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day under the existing law, any amount of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded to him in cash under the said law and the amount rejected, if any, shall not be admissible as input tax credit under this Act.

(8) (a) Where any return, furnished under the existing law, is revised after the appointed day and if, pursuant to such revision, any amount is found to be recoverable or any amount of input tax credit is found to be inadmissible, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this Act and the amount so recovered shall not be admissible as input tax credit under this Act.

(b) Where any return, furnished under the existing law, is revised after the appointed day but within the time limit specified for such revision under the existing law and if, pursuant to such revision, any amount is found to be refundable or input tax credit is found to be admissible to any taxable person, the same shall be refunded to him in cash under the existing law and the amount rejected, if any, shall not be admissible as input tax credit under this Act.

(9) Save as otherwise provided in this Chapter, the goods or services or both supplied on or after the appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax under the provisions of this Act.

(10) (a) Notwithstanding anything contained in section 12 of the Central Goods and Services Tax Act, no tax shall be payable on goods under this Act to the extent the tax was leviable on the said goods under the existing law.

(b) Notwithstanding anything contained in section 13 of the Central Goods and Services Tax Act, no tax shall be payable on services under this Act to the extent the tax was leviable on the said services under Chapter V of the Finance Act, 1994.

(c) Where tax was paid on any supply, both under any existing law relating to sale of goods and under Chapter V of the Finance Act, 1994, tax shall be leviable under this Act and the taxable person shall be entitled to take credit of value added tax or service tax paid under the existing law to the extent of supplies made after the appointed day and such credit shall be calculated in such manner as may be prescribed.

(11) Where any goods sent on approval basis, not earlier than six months before the appointed day, are rejected or not approved by the buyer and returned to the seller on or after the appointed day, no tax shall be payable thereon if such goods are returned within six months from the appointed day:

Provided that the said period of six months may, on sufficient cause being shown, be extended by the Commissioner for a further period not exceeding two months:

Provided further that the tax shall be payable by the person returning the goods if such goods are liable to tax under this Act and are returned after the period specified in this sub-section:

Provided also that tax shall be payable by the person who has sent the goods on approval basis if such goods are liable to tax under this Act, and are not returned within the period specified in this sub-section.

(12) Where a supplier has made any sale of goods in respect of which tax was required to be deducted at source under any existing law relating to sale of goods and has also issued an invoice for the same before the appointed day, no deduction of tax at source under section 51 of the Central Goods and Services Tax Act, as made applicable to this Act, shall be made by the deductor under the said section where payment to the said supplier is made on or after the appointed day.

Explanation: For the purposes of this Chapter, the expression ‘‘capital goods’’ shall have the same meaning as assigned to it in any existing law relating to sale of goods.

Amendments History:

NA

Commentary on Section 20 of UTGST Act, 2017

Section 20 of the Union Territory Goods and Services Tax (UTGST) Act, 2017 provides for miscellaneous transitional provisions related to goods and services tax (GST). This section outlines the tax treatment of various transactions and proceedings that span the transition from the existing tax regime to the new GST regime. Below is a commentary on the key provisions of this section:

Section 20(1) of UTGST Act, 2017: Refund of tax paid under existing law

If goods, on which tax was paid under the existing law, are returned by a non-registered person within six months from the appointed day, the registered person is eligible for a refund. If goods are returned by a registered person, it is deemed as a supply.

Section 20(2) of UTGST Act, 2017: Price revision of goods

In case of a contract signed before the appointed day, if the price of goods is revised upwards or downwards after the appointed day, the registered person must issue a supplementary invoice, debit note or credit note within 30 days. The tax liability will be adjusted accordingly.

Section 20(3) of UTGST Act, 2017: Refund claims

All refund claims filed before, on or after the appointed day will be disposed of under the existing law. If a claim for input tax credit is rejected, the rejected amount shall lapse. No refund is allowed if the input tax credit amount has been carried forward under the GST Act.

Section 20(4) of UTGST Act, 2017: Refund claims for exported goods

Claims filed after the appointed day for tax paid under existing law on goods exported before or after the appointed day will be disposed of under the existing law.

Section 20(5) of UTGST Act, 2017: Disposal of appeal, revision, review or reference proceedings related to input tax credit or recovery of input tax credit under the existing law

All such proceedings will be handled as per the existing law. Any admissible amount will be refunded in cash, while any rejected amount will not be admissible as input tax credit under the GST Act.

Section 20(6) of UTGST Act, 2017: Disposal of appeal, revision, review or reference proceedings related to output tax liability under the existing law

All such proceedings will be handled as per the existing law. Any recoverable amount will be treated as an arrear of tax under the GST Act, while any rejected amount will not be admissible as input tax credit under the GST Act.

Section 20(7) of UTGST Act, 2017: Recovery or refund of tax, interest, fine or penalty under assessment or adjudication proceedings

Any amount recoverable or refundable under assessment or adjudication proceedings, whether initiated before, on or after the appointed day, will be treated as per the existing law.

Section 20(8) of UTGST Act, 2017: Revised returns under existing law

If any return is revised after the appointed day, and any amount is found to be recoverable or any input tax credit is found to be inadmissible, the same will be recovered as an arrear of tax under the GST Act.

Section 20(9) of UTGST Act, 2017: Tax liability for goods or services supplied after the appointed day

Such supplies will be liable to tax under the GST Act, even if the contract was entered into prior to the appointed day.

Section 20(10) of UTGST Act, 2017: Tax exemption on goods and services

No tax shall be payable on goods and services under the GST Act if the tax was leviable under the existing law.

Section 20(11) of UTGST Act, 2017: Goods sent on approval basis

If goods sent on approval basis are returned within six months from the appointed day, no tax is payable on such goods.

Section 20(12) of UTGST Act, 2017: Tax deduction at source

If a sale of goods required tax deduction at source under the existing law, and an invoice was issued before the appointed day, no tax deduction at source shall be made if the payment is made on or after the appointed day.

The provisions in Section 20 of the UTGST Act, 2017, ensure a smooth transition from the previous tax regime to the GST regime by addressing various scenarios that may arise during the transition period.

—–

Note: The UTGST Act 2017 has been notified vide GOI Notification dated 12/04/2017, which has subsequently been amended  through UTGST (Amendment) Act 2018, Finance Act 2019, Finance Act 2020, Finance Act 2021, Finance Act, 2022 and Finance Act, 2023 including various Notifications issued by the Govt./ CBIC from time to time, relating to the commencement dates of various Sections/ Provisions in the respective UTGST/ Amendment Acts, wherever required. Information on this page is a Section-wise compilation of the Amendments made by various Notifications issued by CBIC from time to time, with best possible efforts for accuracy. In any case, E&OE. For official/ updated information, please visit CBIC website.