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

Meera Industries, registered under GST, returned duty-paid goods to Kapoor Engineering, a registered manufacturer, within six months from the appointed day. The goods had been removed by Kapoor within six months before the appointed day on payment of excise duty. Which statement is correct under section 142 of the CGST Act?

The return by Meera, a registered person, is deemed to be a supply. Refund of duty under the existing law is available only when the goods are returned by a person who is not registered. Credit note rules for price revision do not apply to a return of goods.

  1. AKapoor gets a refund of duty, as the goods are identifiable
  2. BMeera's return of the goods is deemed to be a supplyCorrect
  3. CThe goods are exempt from any tax under both laws
  4. DKapoor must issue a credit note within thirty days of the return

Explanation

The proviso to section 142(1) states that if the goods are returned by a registered person, the return is deemed to be a supply. The refund of duty is available only where an unregistered person returns them. The credit note option mixes in the price revision rule of section 142(2), which is unrelated to a return of goods.

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