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CA Final · Indirect Tax Laws · Miscellaneous Provisions (GST)

Arjun Traders, a registered person in Pune, removed goods on which excise duty was paid on 1 February, which was within six months before the appointed day. On a date within six months after the appointed day, an unregistered retail customer returned the goods to Arjun's place of business, and the goods are identifiable to the satisfaction of the proper officer. What is the treatment under the transitional provisions of the CGST Act?

Arjun is eligible for refund of the duty paid under the existing law. The goods were removed within six months before the appointed day, were returned within six months after it by an unregistered person, and are identifiable. Deemed supply applies only when a registered person returns the goods.

  1. AArjun is eligible for refund of the duty paid under the existing lawCorrect
  2. BThe return is deemed to be a supply and attracts GST
  3. CArjun may take CENVAT credit of the duty in his electronic credit ledger
  4. DNo refund is allowed, because duty cannot be refunded after the appointed day

Explanation

Under section 142(1), where duty-paid goods removed not earlier than six months before the appointed day are returned within six months from the appointed day by a person other than a registered person, and the goods are identifiable, the registered person is eligible for refund of the duty paid. The deemed-supply rule applies only when a registered person returns the goods, so the second option is wrong here.

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