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CA Final · Indirect Tax Laws · Inspection, Search, Seizure and Arrest

The Commissioner wishes to verify whether Lotus Sweets, a taxable person, issues tax invoices for retail sales. Which course is consistent with section 67 of the CGST Act, 2017?

The Commissioner or an officer authorised by him can cause a test purchase of goods or services from the premises to check invoicing. If the goods are returned, the taxable person must refund the amount paid after cancelling the invoice or bill of supply issued earlier.

  1. AThe Commissioner or an authorised officer may cause a person authorised by him to purchase goods from the business premises; on return of the goods, the taxable person must refund the amount after cancelling the invoice issuedCorrect
  2. BThe officer must obtain a search authorisation from a Joint Commissioner before any test purchase
  3. CA test purchase is allowed only for services, not for goods
  4. DOn return of the goods, the taxable person may retain the amount as penalty

Explanation

Section 67(12) lets the Commissioner or an officer authorised by him cause purchase of goods or services from the premises to check issue of invoices or bills of supply. On return of goods, the taxable person must refund the amount after cancelling the earlier invoice. Retention as penalty is not provided.

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