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

Rajasthan Tiles Pvt Ltd (registered) had removed goods on payment of excise duty under the existing law three months before the appointed day. On a date within six months from the appointed day, an unregistered retail buyer returns the goods to the company's place of business, and the goods are identifiable to the satisfaction of the proper officer. What is the treatment under the transitional provisions on returned goods?

The company is eligible for a 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. The deemed-supply rule applies only to returns by registered persons.

  1. AThe company is eligible for refund of the duty paid under the existing lawCorrect
  2. BThe return is deemed to be a supply by the buyer and GST is payable by the buyer
  3. CThe duty paid lapses and no refund is allowed in any case
  4. DThe company must pay GST on the goods under this Act on the return

Explanation

Where goods on which duty was paid were removed not earlier than six months before the appointed day and are returned within six months from the appointed day by a person other than a registered person, with goods identifiable to the proper officer, the registered person is eligible for refund of duty paid. The deemed supply rule applies only when a registered person returns the goods, so option B is wrong here.

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