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

Sunrise Appliances Ltd, Pune, removed refrigerators on payment of excise duty under the existing law three months before the appointed day. On a date within six months after the appointed day, a retail consumer (an unregistered person) returned one refrigerator to Sunrise's place of business. The refrigerator is identifiable to the satisfaction of the proper officer. What is the position under the transitional provisions of the CGST Act?

Sunrise 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 by an unregistered person within six months after it, and are identifiable. Deemed supply applies only to returns by registered persons.

  1. ASunrise is eligible for refund of the duty paid under the existing lawCorrect
  2. BThe return is deemed to be a supply by the consumer and attracts GST
  3. CSunrise can claim the duty only as CENVAT credit carried forward in the first return
  4. DNo refund is allowed because the goods were removed before the appointed day

Explanation

Section 142(1) allows refund of duty paid under the existing law where goods removed not earlier than six months before the appointed day are returned by a person other than a registered person within six months of the appointed day and are identifiable. All conditions are met here. The deemed-supply rule applies only when a registered person returns the goods.

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