Section 40. First return.
Section 41. 23[Av ailment of input tax credit
(1) The credit of input tax availed by a registered person under sub-section (1) in respect of such supplies of goods or services or both, the tax payable whereon has not been paid by the supplier, shall be reversed along with applicable interest, by the said person in such manner as may be prescribed:
Provided that where the said supplier makes payment of the tax payable in respect to the aforesaid supplies, the said registered person may re-avail the amount of credit reversed by him in such manner as may be prescribed.]
Section 42. Matching, reversal and reclaim of input tax credit. -
(1) The details of every inward supply furnished by a registered person (hereafter in this section referred to as the "recipient") for a tax period shall, in such manner and within such time as may be prescribed, be matched-
(a) with the integrated goods and services tax paid under section 3 of the Customs Tariff Act. 1975 in respect of goods imported by him; and
(b) with the corresponding details of outward supply furnished by the corresponding registered person (hereafter in this section referred to as the -"supplier") in his valid return for the same tax period or any preceding tax period.
(c) for duplication of claims of input tax credit.
(2) The claim of input tax credit in respect of invoices or debit notes relating to inward supply that match with the details of corresponding outward supply or with the integrated goods and services tax paid under section 3 of the Customs Tariff Act, 1975 (51 of 1975) in respect of goods imported by him shall be finally accepted and such acceptance shall be communicated, in such manner as may be prescribed, to the recipient.
(3) The amount in respect of which any discrepancy is communicated under sub-section (3) and which is not rectified by the supplier in his valid return for the month in which discrepancy is communicated shall be added to the output tax liability of the recipient, in such manner as may be prescribed, in his return for the month succeeding the month in which the discrepancy is communicated.
(4) Where any reduction in output tax liability is accepted under sub-section (7), the interest paid under sub-section (8) shall be refunded to the recipient by crediting the amount in the corresponding head of his electronic cash ledger in such manner as may be prescribed:
(5) Where the input tax credit claimed by a recipient by a recipient in respect of an inward supply is in excess of the tax declared by the supplier for the same supply or the outward supply is not declared by the supplier in his valid returns, the discrepancy shall be communicated to both such persons in such manner as may be prescribed.
(6) The duplicate of claims of input tax credit shall be communicated to the recipient in such manner as may be prescribed.
(7) The amount claimed as input tax credit that is found to be in excess on account of duplication of claims shall be added to the output tax liability of the recipient in his return for the month in which the duplication is communicated.
(8) The recipient shall be eligible to reduce, from his output tax liability, the amount added under sub-section (5), if the supplier declares the details of the invoice or debit note in his valid return within the time specified in sub-section (9) of section 39.
(9) A recipient in whose output tax liability any amount has been added under sub-section (5) or sub-section (6), shall be liable to pay interest at the rate specified under sub-section (1) of section (50) on the amount so added from the date of availing of credit till the corresponding additions are made under the said sub- sections.
Provided that the amount of interest to be credited in any case shall exceed the amount of interest paid by the supplier.
(10) The amount reduced from the output tax liability in contravention of the provisions of sub-section (7) shall be added to the output tax liability of the recipient in his return for the month in which such contravention takes place and such recipient shall be liable to pay interest on the amount so added at the rate specified in sub- section (3) of section 50.
Section 43. Matching, reversal and reclaim of reduction in output tax liability. -
(2) The details of every credit note relating to outward supply furnished by a registered person (hereafter in this section referred to as the "supplier") for a tax period shall, in such manner and within such time as may be prescribed, be matched-
(a) for duplication of claims for reduction in output tax liability.
(b) with the corresponding reduction in the claim for input tax credit by the corresponding registered person (hereafter in this section referred to as the "recipient") in his valid return for the same tax period or any subsequent tax period.
(3) The claim for reduction in output tax liability by the supplier that matches with the corresponding reduction in the claim for input tax credit by the recipient shall be finally accepted and communicated, in such manner as may be prescribed, to the supplier.
(4) The supplier shall be eligible to reduce, from his output tax liability, the amount added under sub-section (5) if the recipient declares the details of the credit note in his valid return within the time specified in sub-section (9) of section 39.
(5) Where the reduction of output tax liability in respect of outward supplies exceeds the corresponding reduction in the claim for input tax credit or the corresponding credit note is not declared by the recipient in his valid returns, the discrepancy shall be communicated to both such persons in such manner as may be prescribed.
(6) The amount reduced from output tax liability in contravention of the provisions of sub-section (7) shall be added to the output tax liability of the supplier in his return for the month in which such contravention takes place and such supplier shall be liable to pay interest on the amount so added at the rate specified in sub-section (3) of section 50.
(7) The duplication of claims for reduction in output tax liability shall be communicated to the supplier in such manner as may be prescribed.
(8) The amount in respect of anu reduction in output tax liability that is found to be on account of duplication of claims shall be added to the output tax liability of the supplier in his return for the month in which such duplication is communicated.
(9) Where any reduction in output tax liability is accepted under sub-section (7), the interest paid under sub-section (8) shall be refunded to the supplier by crediting the amount in the corresponding head of his electronic cash ledger in such manner as may be prescribed:
Provided that the amount of interest to be credited in any case shall not exceed the amount of interest paid by the recipient.
(10) A supplier in whose output tax liability any amount has been added under sub-section (5) or sub-section (6), shall be liable to pay interest at the rate specified under sub-section (1) of section 50 in respect of the amount so added from the date of such claim for reduction in the output tax liability till the corresponding additions are made under the said sub-sections.
Section 43 A. Procedure for furnishing return and availing input tax credit. -
(1) The procedure for availing input tax credit in respect of outward supplies not furnished under sub-section (3) shall be such as may be prescribed, and such procedure may include the maximum amount of the input tax credit which can be so availed, not exceeding twenty percent of the input tax credit available, on the basis of details furnished by the suppliers under the said sub-section.
(2) Notwithstanding anything contained in sub-section (2) of section 16, section 37 or section 38, every registered person shall in the returns furnished under sub-section (1) of section 39 verify, validate, modify or delete the details of supplies furnished by the suppliers.
(3) The procedure for furnishing the details of outward supplies by the supplier on the common portal, for the purposes of availing input tax credit by the recipient shall be such as may be prescribed.
(4) Notwithstanding anything contained in section 41, section 42 or section 43, the procedure for availing of input tax credit by the recipient and verification thereof shall be such as may be prescribed.
27[Section 44. Annual return. -
(5) The amount of tax specified in the outward supplies for which the details have been furnished by the supplier under sub-section (3) shall be deemed to be the payable by him under the provisions of the Act.
(6) The supplier and the recipient of a supply shall be jointly and severally liable to pay tax or to pay the input tax credit availed, as the case may be, in relation to outward supplies for which the details have been furnished under sub-section (3) or sub-section (4) but return thereof has not been furnished.
(7) For the purpose of sub-section (6), the recovery shall be made in such manner as may be prescribed and such procedure may provide for non-recovery of an amount of tax or input tax credit wrongly availed not exceeding one thousand rupees.
(8) The procedure, safeguards and threshold of the tax amount in relation to outward supplies, the details of which can be furnished under sub-section (3) by a registered person, -
Shall be such as may be prescribed.]
27 Substituted vide sec 111 of the finance Act, 2021 dated 28.03.2021, notified through Notifications No.29/2021 - CT dated 30.07.2021 - Brought into force w.w.f.01.08.2021, prior to its substitution, it was read as: "[section 44. Annual return.
(1) Every registered person, other than an Input service Distributor, a person paying tax under section 51 or section 52, casual taxable person and a non-resident taxable person, shall furnish an annual return for every financial year electronically in such form and manner as may be prescribed on or before the thirty first day of December following the end of such financial year.
*[Provided that the Commissioner may, on the recommendations of the Council and for reasons to be recorded in writing, by notification, extend the time limit for furnishing the annual return for such class of registered persons as may be specified therein:
Provided further that any extension of time limit notified by the Commissioner of state tax or the Commissioner of Union territory tax shall be deemed to be notified by the Commissioner.]
**[Explanation.- For the purpose of this section, it is hereby declared that the annual return for the period from the 1st July, 2017 to the 31st March, 2018 shall be furnished on or before the ***[31st January, 2020] and the annual return for the period from the 1st April, 2018 to the 31st March, 2019 shall be furnished on or before the 31st March, 2020]"
28[(1)] Every registered person, other than an Input services Distributor, a person paying tax under section 51 or section 52, a casual taxable person and a non-resident taxable person shall furnish an annual return which may include a self-certified reconciliation statement, reconciling the value of supplies declared in the return furnished for the financial year, with the audited annual financial statement for every financial year electronically, within such time and in such form and in such manner as may be prescribed:
Provided that the Commissioner may, on the recommendations of the Council, by notification, exempt any class of registered persons from filling annual return under this section:
Provided further that nothing contained in this section shall apply to any department of the Central Government or a State Government or a local authority, whose books of account are subject to audit by the Comptroller and Auditor-General of India, or an auditor appointed for auditing the accounts of local authorities under any law for the time being in force.]
29[(2) A registered person shall not be allowed to furnish an annual return under sub-section (1) for a financial year after the expiry of a period of three years from the due date of furnishing the said annual return:
Provided that the Government may, on the recommendations of the Council, by notification and subject to such conditions and restrictions as may be specified therein, allow a registered person or a class of registered persons to furnish and annual return for a financial year under sub-section (1), even after the expiry of a period of three years from the due date of furnishing the said annual return:
Provided that the Government may, on the recommendations of the Council, by notification, and subject to such conditions and restrictions as may be specified therein, allow a registered person or a class of registered persons to furnish an annual return for a financial year under sub-section (1), even after the expiry of the said period of three years from the due date of furnishing the said annual return.]
Section 45. Final return. -
Every registered person who is required to furnish a return under sub-section (1) of section 39 and whose registration has been cancelled shall furnish a final return within three months of the date of cancellation or date of order of cancellation, whichever is later, in such form and manner as may be prescribed.
Section 46. Notice to return defaulters. -
Where a registered person fails to furnish a return under section 39 or section 44 or section 45, a notice shall be issued requiring him to furnish such return within fifteen days in such form and manner as may be prescribed.
Section 47. Levy of late fee. -
(1) Any registered person who fails to furnish the details of outward or 30[***] supplies required under section 37 31[***] or returns required under section 39 or section 45 32[or section 52] by the due date shall pay a 4[late fee] of one hundred rupees for every day during which such failure continues subject to maximum amount of five thousand rupees.
(2) Any registered person who fails to furnish the return required under section 44 by the due date shall be liable to pay a 4[late fee] of one hundred rupees for every day during which such failure continues subject to a maximum of an amount calculated at a quarter percent, of his turnover in the State or Union territory.
Section 48. Gooda and services tax practitioners. -
(1) Notwithstanding anything contained int sub-section (2), the responsibility of r correctness of any particulars furnished in the return or other details filed by the goods and services tax practitioners shall continue to rest with the registered person on whose behalf such return, and details are furnished.
(2) The manner of approval of goods and services tax practitioners, their eligibility conditions, duties and obligations, manner of removal and other conditions relevant for their functioning shall be such as may be prescribed.
(3) A registered person may authorize an approved goods and services tax practitioner to furnish the details of outward supplies under section 37, 33[***] and the return under section 39 or section 44 or section 45 34[and to perform such other functions] in such manner as may be prescribed.
Section 49. Payment of tax, interest, penalty and other amounts. -
(1) The amount available in the electronic credit ledger may be used for making any payment towards output tax under this Act or under the integrated Goods and Services Tax Act in such manner and subject to such conditions 3[and restrictions] and within such time as may be prescribed.
(2) Every deposit made towards tax, interest, penalty, fee or anu other amount by a person by internet banking or by using credit or debit cards or National Electronic Fund Transfer or Real Time Gross Settlement or by such other mode and subject to such conditions and restrictions as may be prescribed, shall be credited to the electronic cash ledger of such person to be maintained in such manner as may be prescribed.
(3) The input tax credit as self-assessed in the return of a registered person shall be credited to his electronic credit ledger, in accordance with 1[section 41 2[***]], to be maintained in such manner as may be prescribed.
(4) The amount available in the electronic cash ledger may be used for making any payment towards tax, interest, penalty, fees or any other amount payable under the provisions of this Act or the rules made thereunder in such manner and subject to such conditions and within such time as may be prescribed.
(5) The amount of input tax credit available in the electronic credit ledger of the registered person on account of --------
(a) the union territory tax shall first be utilized towards payment of union territory tax and the amount remaining, if any, may be utilized towards payment of integrated tax:
5[Provided that the input tax credit on account of Union territory tax shall be utilized towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax:]
(b) the State tax shall first be utilized towards payment of State tax and the amount remaining, if any, may be utilized towards payment of integrated tax
4[Provided that the input tax credit on account of State tax shall be utilized towards payment of integrated tax only where the balance of the input tax credit on account of central tax is not available for payment of integrated tax;].
(c) the central tax shall first be utilized towards payment of central tax and the amount remaining, if any, may be utilized towards the payment of integrated tax.
(d) integrated tax shall first be utilized towards payment of integrated tax and the amount remaining, if any, may be utilized towards the payment of central tax and State tax or as the case may be, union territory tax, in that order.
(e) the State tax or Union territory tax shall not be utilized towards payment of central tax and
(f) the central tax shall not be utilized towards payment of State tax or Union territory tax.
(6) The balance in the electronic cash ledger or electronic credit ledger after payment of tax interest, penalty, fee or any other amount payable under this Act or the rules made thereunder may be refunded in accordance with the provisions of section 54.
(7) Every taxable person shall discharge his tax and other dues under this Act, or the rules made thereunder in the following order, namely: -
(a) any other amount payable under this Act or the rules made thereunder including the demand determined under section 73 or section 74.
(b) self-assessed tax, and other dues related to returns of pervious tax periods.
(c) self-assessed tax, and other dues related to the return of the current tax period.
(8) All liabilities of a taxable person under this Act shall be recorder and maintained in an electronic liability register in such manner as may be prescribed.
(9) Every person who has paid the tax on goods or services or both under this Act shall, unless the contrary is proved by him, be deemed to have passed on the full incidence of such tax to the recipient of such goods or services or both
(10) A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or anu other amount available in the electronic cash ledger under this Act, to the electronic cash ledger for, -
(a) integrated tax, central tax, State tax, Union territory tax or cess; or
(b) integrated tax or central tax of a distinct person as specified in sub-section (4) or, as the case may be, sub-section (5) of section 25,
in such form and manner and subject to such conditions and restrictions as may be prescribed and such transfer shall be deemed to be a refund from the electronic cash ledger under this Act:
Provided that no such transfer under clause (b) shall be allowed if the said registered person has any unpaid liability in his electronic liability register.]
(11) Where any amount has been transferred to the electronic cash ledger under this Act, the same shall be deemed to be deposited in the said ledger as provided in subsection (1).]
8[(12) Notwithstanding anything contained in this Act, the Government may, on the recommendations of the Council, subject to such conditions and restrictions, specify such maximum proportion of output tax liability under this Act or under the Integrated Goods and Services Tax Act, 2017 which may be discharged through the electronic credit ledger by a registered person or a class of registered persons, as may be prescribed]
Explanation. - For the purposes of this section, -
(a) the date of credit to the account of the Government in the authorized bank shall be deemed to be the date of deposit in the electronic cash ledger:
(b) the expression, - (I) "other dues" means interest, penalty, fee or other amount payable under this Act or the rules made thereunder.
(ii) "tax dues" means the tax payable under this Act and does not include interest, fee and penalty:
Section 49A. Utilization of input tax credit subject to certain conditions.
Notwithstanding anything contained in section 49, the input tax credit on account of central tax, State tax or Union territory tax shall be utilized towards payment of integrated tax, central tax, state tax or Union territory tax, as the case may be, only ager the input tax credit available on account of integrated tax has first been utilized fully towards such payment.]
10[Section 49B. Order of utilization of input tax credit. -
(1) Notwithstanding anything contained in this Chapter and subject to the provisions of clause (e) and clause (f) of sub section (5) of section 49, the Government may, on the recommendations of the Council, prescribe the order and manner of utilization of the input tax credit on account of integrated tax, central tax, State tax or Union territory tax, as the case may be, towards payment of any such tax.]
Section 50. interest on delayed payment of tax. -
(1) Every person who is liable to pay tax in accordance with the provisions of this At or the rules made thereunder, but fails to pay the tax or anu part thereof to the Government within the period prescribed, shall for the period for which the tax or any part thereof remains unpaid, pay, on his own, interest at such rate, not exceeding eighteen percent, as may be notified by the Government on the recommendations of the Council:
11[Provided that the interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provision of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger.]
(2) The interest under sub-section (1) shall be calculated, in such manner as may be prescribed, form the day succeeding the day on which such tax was dure to be paid.
12[(13) Where the input tax credit has been wrongly availed and utilized, the registered person shall pay interest on such input tax credit wrongly availed and utilized, at such rate not exceeding twenty-four percent as may be notified by the Government, on the recommendations of the Council, and the interest shall be calculated, in such manner as may be prescribed]
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