Model GST Law – Amendments required


Courtesy: S Maheswaran, B.Sc., B.L.,

AN attempt is made through this article seeking certain amendments in the “Model GST Law” circulated.


Sec.19 of the said law deals with registration of the tax payer. As per the sub section(2) of the said section ” a person having multiple business verticals in a State may obtain a separate registration for each business vertical, subject to such conditions as may be prescribed.” This condition will create unnecessary additional workload to the tax payer falling under this category who are required to maintain more than one registrations/filing returns etc., in a state. Especially the manufacturing factories having different segment in the same factory will be overburdened. Hence it is suggested that this condition may be removed to treat those tax payers on par with others.

Further the SCHEDULE III of the said law details the “LIABILITY TO BE REGISTERED”. As per Sl No. 5 of the said Schedule it is made mandatory for the person involved in “interstate taxable supply” to get him registered irrespective of the threshold specified. This is unfair and will harm small taxpayers involved in such transactions and hence the same may also be removed.

Payment under protest

In the said law there is no specific provision for payment under protest, which assumes importance for calculating time limit when refund is filed and hence a provision for the same may be included.

Remission of tax on supplies found deficient in quantity

Section 11 of the said law deals with remission of tax on such supplies wherein provision is made for remission of tax on such supplies which are found to be deficient in quantity due to any natural causes. The cause of loss may be due to various reasons viz., fire accident etc., Hence the section may be modified to accommodate those situations also.

Determination of tax not paid or short paid or erroneously refunded

Section 51 of the said law deals with issuing of demands. The sub section (A) and (B) deals with

“Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or any willful-misstatement or suppression of facts / by reason of fraud or any willful-misstatement or suppression of facts” respectively.

In both the sub sections there is no time limit is prescribed for issuing notice. However, time limit of 3 years and 5 years respectively is fixed under sub section 50 A(7) and 50 B (7) of the section for adjudication of notices issued under the aforesaid sections.

Fixing of time frame for issuing notice leads to completion of the investigation conducted. Unless a time frame is fixed it will lead to lot of legal controversies. Hence it is requested that time limit for issuing demand in both the situations covered under sub section(A) and (B) of section 50 may be fixed.

Appreciation is due to the GST law framers for having included finer aspects viz., acceptance of returns only after payment of tax Sec.27, final return on closure of business Sec.31, tax on electronic commerce Sec.43 B & C etc. It is hoped that the definition of audit as given in Sl No.(14) of Sec. 2 of the law will put an end to the ongoing debate on audit of the service tax assessees by the departmental officers when GST is implemented.


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