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CS Professional · Goods and Services Tax (GST) and Corporate Tax Planning · Overview of Goods and Services Tax

Under a Section 11A notification, supplies by Kaveri Traders were generally treated as nil-rated by trade practice, though 5% central tax was actually leviable. What can the notification direct?

Because the practice was non-levy, the notification can direct that the whole of the central tax payable on those supplies need not be paid. Section 11A does not provide for partial rates or an interest-only waiver.

  1. AThat the whole of the central tax payable on such supplies shall not be required to be paidCorrect
  2. BThat only interest on the tax shall be waived, and tax must be paid
  3. CThat tax shall be paid at half the leviable rate
  4. DThat the supplies shall be treated as exempt for all future periods

Explanation

Where the practice was non-levy, Section 11A(b)(i) allows the Government to direct that the whole of the central tax payable on such supplies shall not be required to be paid. It does not provide for halving the rate or waiving only interest.

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