Sec 173 – Exempted goods returned to the place of business on or after the appointed day
The section enables a taxable person to receive exempted goods (under the old law) which were removed/sold earlier and then received back within 6 months of the appointed date. This section has been kept similar to the previous provision in the old draft. The only amendment has been introduced by a way of proviso in both CGST law and SGDT act to clarify that if the exempted goods (under old law) are returned back by a person who is not registered even after the time limit of 6 months then also no tax will be payable by him. Thus any chances of confusion on a non taxable/non registered person being held liable to pay tax on such return of goods have been eliminated.
Duty (Tax – in SGST Act) paid goods returned to the place of business on or after the appointed day
This section enable a taxable person to receive back duty paid goods(under the old law) which were removed/sold prior to appointed date and received back within 6 months of the appointed date. It has been amended to delete a proviso which stated that tax shall be payable by the taxable person returning the goods if the said goods are liable to tax under this Act and are returned after a period of six months from the appointed day. Instead of it, a new proviso has been added which states as follows:
PROVIDED that if the said goods are returned by a registered taxable person the return of the goods shall be deemed to be a supply.
The effect of this amendment is that earlier where the tax became payable only if the return was made after a time period of 6 months, now the return will be held as supply irrespective of the time period of return. Also the old draft stated that:
Every taxable person who receives such goods within a period of six months shall be entitled to take credit of the duty paid earlier at the time of removal.
This proviso has also been deleted as after the amendment it was no longer needed because the return by a taxable person will be deemed as supply and he will have to charge tax on it while removing the goods. Thus the person receiving the goods will be automatically in receipt of duty paid goods and he will be eligible to avail cenvat on the same.
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