 the union territory goods and services tax bill, 2017—————— arrangement of clauses——————clauses chapter i preliminary1 short title, extent and commencement 2 definitions chapter ii administration3 officers under this act 4 authorisation of officers 5 powers of officers 6 authorisation of officers of central tax as proper officer in certain circumstances chapter iii levy and collection of tax7 levy and collection 8 power to grant exemption from tax chapter iv payment of tax9 payment of tax10 transfer of input tax credit chapter v inspection, search, seizure and arrest11 officers required to assist proper officers chapter vi demands and recovery12 tax wrongfully collected and paid to central government or union territorygovernment13 recovery of tax(ii)clauses chapter vii advance ruling14 definitions 15 constitution of authority for advance ruling 16 constitution of appellate authority for advance ruling chapter viii transitional provisions17 migration of existing tax payers 18 transitional arrangements for input tax credit 19 transitional provisions relating to job work 20 miscellaneous transitional provisions chapter ix miscellaneous21 application of provisions of central goods and services tax act 22 power to make rules 23 general power to make regulations 24 laying of rules, regulations and notifications 25 power to issue instructions or directions 26 removal of difficulties bill no 59 of 2017 the union territory goods and services tax bill, 2017 a billto make a provision for levy and collection of tax on intra-state supply of goods or servicesor both by the union territories and the matter connected therewith or incidental theretobe it enacted by parliament in the sixty-eighth year of the republic of india as follows:— chapter i preliminary51 (1) this act may be called the union territory goods and services tax act, 2017short title, extent and commencement(2) it extends to the union territories of the andaman and nicobar islands,lakshadweep, dadra and nagar haveli, daman and diu, chandigarh and other territory(3) it shall come into force on such date as the central government may, by notificationin the official gazette, appoint:definitions2 in this act, unless the context otherwise requires,—(1) ''appointed day'' means the date on which the provisions of this act shall come into force5(2) ''commissioner'' means the commissioner of union territory tax appointed under section 3; (3) ''designated authority'' means such authority as may be notified by the commissioner;10(4) ''exempt supply'' means supply of any goods or services or both which attracts nil rate of tax or which may be exempt from tax under section 8, or under section 6 of the integrated goods and services tax act, and includes non taxable supply;(5) ''existing law'' means any law, notification, order, rule or regulation relating to levy and collection of duty or tax on goods or services or both passed or made before the commencement of this act by parliament or any authority or person having the power to make such law, notification, order, rule or regulation;15(6) ''government'' means the administrator or any authority or officer authorised to act as administrator by the central government;20(7) ''output tax'' in relation to a taxable person, means the union territory tax chargeable under this act on taxable supply of goods or services or both made by him or by his agent but excludes tax payable by him on reverse charge basis;(8) ''union territory'' means the territory of,—(i) the andaman and nicobar islands; (ii) lakshadweep; (iii) dadra and nagar haveli;25(iv) daman and diu; (v) chandigarh; or (vi) other territory explanation—for the purposes of this act, each of the territories specified in sub-clauses (i) to (vi) shall be considered to be a separate union territory;30(9) ''union territory tax'' means the tax levied under this act; (10) words and expressions used and not defined in this act but defined in the central goods and services tax act, the integrated goods and services tax act, the state goods and services tax act, and the goods and services tax (compensation to states) act, shall have the same meaning as assigned to them in those acts35 chapter ii administrationofficers under this act3 the administrator may, by notification, appoint commissioners and such other class of officers as may be required for carrying out the purposes of this act and such officers shall be deemed to be proper officers for such purposes as may be specified therein:40provided that the officers appointed under the existing law shall be deemed to be the officers appointed under the provisions of this actauthorisation of officers4 the administrator may, by order, authorise any officer to appoint officers of  union territory tax below the rank of assistant commissioner of union territory tax for the administration of this act| powers    ||-----------|| officers |5 (1) subject to such conditions and limitations as the commissioner may impose, an officer of the union territory tax may exercise the powers and discharge the duties conferred or imposed on him under this act5(2) an officer of a union territory tax may exercise the powers and discharge the duties conferred or imposed under this act on any other officer of a union territory tax who is subordinate to him(3) the commissioner may, subject to such conditions and limitations as may be specified in this behalf by him, delegate his powers to any other officer subordinate to him10(4) notwithstanding anything contained in this section, an appellate authority shall not exercise the powers and discharge the duties conferred or imposed on any other officer of union territory tax6 (1) without prejudice to the provisions of this act, the officers appointed under the central goods and services tax act are authorised to be the proper officers for the purposes of this act, subject to such conditions as the government shall, on the recommendations of the council, by notification, specify15authorisationof officers of central tax as proper officer in certaincircumstances(2) subject to the conditions specified in the notification issued under sub-section (1),—20(a) where any proper officer issues an order under this act, he shall also issue an order under the central goods and services tax act, as authorised by the said act under intimation to the jurisdictional officer of central tax;(b) where a proper officer under the central goods and services tax act has initiated any proceedings on a subject matter, no proceedings shall be initiated by the proper officer under this act on the same subject matter25(3) any proceedings for rectification, appeal and revision, wherever applicable, of any order passed by an officer appointed under this act, shall not lie before an officer appointed under the central goods and services tax act chapter iii levy and collection of taxlevy and collection307 (1) subject to the provisions of sub-section (2), there shall be levied a tax called the union territory tax on all intra-state supplies of goods or services or both, except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 of the central goods and services tax act and at such rates, not exceeding twenty per cent, as may be notified by the central government on the recommendations of the council and collected in such manner as may be prescribed and shall be paid by the taxable person35(2) the union territory tax on the supply of petroleum crude, high speed diesel,motor spirit (commonly known as petrol), natural gas and aviation turbine fuel shall be levied with effect from such date as may be notified by the central government on the recommendations of the council40(3) the central government may, on the recommendations of the council, bynotification, specify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both and all the provisions of this act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both45(4) the union territory tax in respect of the supply of taxable goods or services orboth by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis as the recipient and all the provisions of this act shall apply to such recipient as if he is the person liable for paying the tax in relation to the supply of such goods or services or both5(5) the central government may, on the recommendations of the council, by notification, specify categories of services the tax on intra-state supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, and all the provisions of this act shall apply to such electronic commerce operator as if he is the supplier liable for paying the tax in relation to the supply of such services:provided that where an electronic commerce operator does not have a physical presence in the taxable territory, any person representing such electronic commerce operator for any purpose in the taxable territory shall be liable to pay tax:10provided further that where an electronic commerce operator does not have a physical presence in the taxable territory and also he does not have a representative in the said territory, such electronic commerce operator shall appoint a person in the taxable territory for the purpose of paying tax and such person shall be liable to pay taxpower to grant exemption from tax158 (1) where the central government is satisfied that it is necessary in the publicinterest so to do, it may, on the recommendations of the council, by notification, exempt generally either absolutely or subject to such conditions as may be specified therein, goods or services or both of any specified description from the whole or any part of the tax leviable thereon with effect from such date as may be specified in such notification20(2) where the central government is satisfied that it is necessary in the public interest so to do, it may, on the recommendations of the council, by special order in each case, under circumstances of an exceptional nature to be stated in such order, exempt from payment of tax any goods or services or both on which tax is leviable25(3) the central government may, if it considers necessary or expedient so to do for the purpose of clarifying the scope or applicability of any notification issued under sub-section (1) or order issued under sub-section (2), insert an explanation in such notification or order, as the case may be, by notification at any time within one year of issue of the notification under sub-section (1) or order under sub-section (2), and every such explanation shall have effect as if it had always been the part of the first such notification or order, as the case may be30(4) any notification issued by the central government under sub-section (1) of section 11 or order issued under sub-section (2) of the said section of the central goods and services tax act shall be deemed to be a notification or, as the case may be, an order issued under this act35explanation—for the purposes of this section, where an exemption in respect of any goods or services or both from the whole or part of the tax leviable thereon has been granted absolutely, the registered person supplying such goods or services or both shall not collect the tax, in excess of the effective rate, on such supply of goods or services or both chapter iv payment of taxpayment of tax409 the amount of input tax credit available in the electronic credit ledger of theregistered person on account of,—(a) integrated tax shall first be utilised towards payment of integrated tax andthe amount remaining, if any, may be utilised towards the payment of central tax and state tax, or as the case may be, union territory tax, in that order;40(c) the union territory tax shall first be utilised towards payment of unionterritory tax and the amount remaining, if any, may be utilised towards payment of integrated tax; (d) the union territory tax shall not be utilised towards payment of centraltax| transfer          ||-------------------|| input tax credit |510 on utilisation of input tax credit of union territory tax for payment of tax dues under the integrated goods and services tax act in accordance with the provisions of sub-section (5) of section 49 of the central goods and services tax act, as reflected in the valid return furnished under sub-section (1) of section 39 of the central goods and services tax act, the amount collected as union territory tax shall stand reduced by an amount equal to such credit so utilised and the central government shall transfer an amount equal to the amount so reduced from the union territory tax account to the integrated tax account in such manner and within such time as may be prescribed10 chapter v inspection, search seizure and arrest11 (1) all officers of police, railways, customs, and those officers engaged in the collection of land revenue, including village officers, and officers of central tax and officers of the state tax shall assist the proper officers in the implementation of this actofficers required toassist properofficers15(2) the government may, by notification, empower and require any other class of officers to assist the proper officers in the implementation of this act when called upon to do so by the commissioner chapter vi demands and recovery2012 (1) a registered person who has paid the central tax and the union territory tax on a transaction considered by him to be an intra-state supply, but which is subsequently held to be an inter-state supply, shall be refunded the amount of taxes so paid in such manner and subject to such conditions as may be prescribedtax wrongfully collected and paid to central government or union territory government25(2) a registered person who has paid integrated tax on a transaction considered by him to be an inter-state supply, but which is subsequently held to be an intra-state supply, shall not be required to pay any interest on the amount of the central tax and the union territory tax payablerecovery of tax3013 (1) where any amount of tax, interest or penalty is payable by a person to the government under any of the provisions of this act or the rules made thereunder and which remains unpaid, the proper officer of central tax, during the course of recovery of said tax arrears, may recover the amount from the said person as if it were an arrear of central tax and credit the amount so recovered to the account of the government under the appropriate head of union terrirtory tax35(2) where the amount recovered under sub-section (1) is less than the amount due to the government under this act and the central goods and services act, the amount to be credited to the account of the government shall be in proportion to the amount due as union territory tax and central tax chapter vii advance rulingdefinitions14 in this chapter, unless the context otherwise requires,—40(a) ''advance ruling'' means a decision provided by the authority or the appellateauthority to an applicant on matters or on questions specified in sub-section (2) of section 97 or sub-section (1) of section 100 of the central goods and services taxact, in relation to the supply of goods or services or both being undertaken or proposed to be undertaken by the applicant;45(b) ''appellate authority'' means the appellate authority for advance rulingconstituted under section 16(c) ''applicant'' means any person registered or desirous of obtaining registrationunder this act;(d) ''application'' means an application made to the authority under sub-section (1) of section 97 of the central goods and services tax act;(e) ''authority'' means the authority for advance ruling, constituted under section 15;515 (1) the central government shall, by notification, constitute an authority to be known as the name of the union territory, authority for advance ruling:constitution of authority for advance rulingprovided that the central government may, on the recommendations of the council, notify any authority located in any state or any other union territory to act as the authority for the purposes of this act10(2) the authority shall consist of—(i) one member from amongst the officers of central tax; and (ii) one member from amongst the officers of union territory tax, to be appointed by the central government15(3) the qualifications, the method of appointment of the members and the terms and conditions of their service shall be such as may be prescribed16 (1) the central government shall, by notification, constitute an appellate authority to be known as (name of the union territory) appellate authority for advance ruling for goods and services tax for hearing appeals against the advance ruling pronounced by the advance ruling authority:constitution of appellate authority for advance ruling20provided that the central government may, on the recommendations of the council, notify any appellate authority located in any state or any other union territory to act as the appellate authority for the purposes of this act(2) the appellate authority shall consist of—(i) the chief commissioner of central tax as designated by the board; and25(ii) the commissioner of union territory tax having jurisdiction over the applicant chapter viii transitional provisions30migration of existing tax payers17 (1) on and from the appointed day, every person registered under any of the existing laws and having a valid permanent account number shall be issued a certificate of registration on provisional basis, subject to such conditions and in such form and manner as may be prescribed, which unless replaced by a final certificate of registration under sub-section (2), shall be liable to be cancelled if the conditions so prescribed are not complied with35(2) the final certificate of registration shall be granted in such form and manner and subject to such conditions as may be prescribed40(3) the certificate of registration issued to a person under sub-section (1) shall be deemed to have not been issued if the said registration is cancelled in pursuance of an application filed by such person that he was not liable to registration under section 22 or section 24 of the central goods and services tax acttransitional arrangements for input tax credit4518 (1) a registered person, other than a person opting to pay tax under section 10 of the central goods and services tax act, shall be entitled to take, in his electronic credit ledger, credit of the amount of value added tax and entry tax, if any, carried forward in the return relating to the period ending with the day immediately preceding the appointed day, furnished by him under the existing law, not later than ninety days after the said day, in such manner as may be prescribed:provided that the registered person shall not be allowed to take credit in the following circumstances, namely:—(i) where the said amount of credit is not admissible as input tax credit underthis act; or5 (ii) where he has not furnished all the returns required under the existing lawfor the period of six months immediately preceding the appointed day; or(iii) where the said amount of credit relates to goods sold under such exemptionnotifications as are notified by the government:1074 of 1956provided further that so much of the said credit as is attributable to any claim related to section 3, sub-section (3) of section 5, section 6 or section 6a or sub-section (8) of section 8 of the central sales tax act, 1956 that is not substantiated in the manner, and within the period, prescribed in rule 12 of the central sales tax (registration and turnover) rules, 1957 shall not be eligible to be credited to the electronic credit ledger:15provided also that an amount equivalent to the credit specified in the second proviso shall be refunded under the existing law when the said claims are substantiated in the manner prescribed in rule 12 of the central sales tax (registration and turnover) rules, 195720(2) a registered person, other than a person opting to pay tax under section 10 of thecentral goods and services tax act, shall be entitled to take, in his electronic credit ledger, credit of the unavailed input tax credit in respect of capital goods, not carried forward in a return, furnished under the existing law by him, for the period ending with the day immediately preceding the appointed day in such manner as may be prescribed: provided that the registered person shall not be allowed to take credit unless the said credit was admissible as input tax credit under the existing law and is also admissible as input tax credit under this act25explanation—for the purposes of this section, the expression ''unavailed input taxcredit'' means the amount that remains after subtracting the amount of input tax credit already availed in respect of capital goods by the taxable person under the existing law from the aggregate amount of input tax credit to which the said person was entitled in respect of the said capital goods under the existing law3035(3) a registered person, who was not liable to be registered under the existing law orwho was engaged in the sale of exempted goods or tax free goods or goods which havesuffered tax at first point of their sale in the union territory and the subsequent sales of which are not subject to tax in the union territory under the existing law but which are liable to tax under this act or where the person was entitled to the credit of input tax at the time of sale of goods, shall be entitled to take, in his electronic credit ledger, credit of the value added tax and entry tax, if any, in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day subject to the following conditions, namely:—40(i) such inputs or goods are used or intended to be used for making taxablesupplies under this act;(ii) the said registered person is eligible for input tax credit on such inputsunder this act;45 (iii) the said registered person is in possession of invoice or other prescribeddocuments evidencing payment of tax under the existing law in respect of such inputs; and(iv) such invoices or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day:provided that where a registered person, other than a manufacturer or a supplier of services, is not in possession of an invoice or any other documents evidencing5payment of tax in respect of inputs, then, such registered person shall, subject to such conditions, limitations and safeguards as may be prescribed, including that the said taxable person shall pass on the benefit of such credit by way of reduced prices to the recipient, be allowed to take credit at such rate and in such manner as may be prescribed (4) a registered person, who was engaged in the sale of taxable goods as well as exempted goods or tax free goods under the existing law but which are liable to tax under this act, shall be entitled to take, in his electronic credit ledger,—10(a) the amount of credit of the value added tax and entry tax, if any, carried forward in a return furnished under the existing law by him in accordance with the provisions of sub-section (1); and (b) the amount of credit of the value added tax and entry tax, if any, in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day, relating to such exempted goods or tax free goods in accordance with the provisions of sub-section (3)1520(5) a registered person shall be entitled to take, in his electronic credit ledger, credit of value added tax and entry tax, if any, in respect of inputs received on or after the appointed day but the tax in respect of which has been paid by the supplier under the existing law, subject to the condition that the invoice or any other tax paying document of the same was recorded in the books of account of such person within a period of thirty days from the appointed day:provided that the period of thirty days may, on sufficient cause being shown, be extended by the commissioner for a further period not exceeding thirty days:25provided further that the said registered person shall furnish a statement, in such manner as may be prescribed, in respect of credit that has been taken under this sub-section30(6) a registered person, who was either paying tax at a fixed rate or paying a fixed amount in lieu of the tax payable under the existing law shall be entitled to take, in his electronic credit ledger, credit of value added tax in respect of inputs held in stock and inputs contained in semi-finished or finished goods held in stock on the appointed day subject to the following conditions, namely:—(i) such inputs or goods are used or intended to be used for making taxable supplies under this act;(ii) the said registered person is not paying tax under section 10 of the central goods and services tax act;35(iii) the said registered person is eligible for input tax credit on such inputs under this act;(iv) the said registered person is in possession of invoice or other prescribed documents evidencing payment of tax under the existing law in respect of inputs; and40(v) such invoices or other prescribed documents were issued not earlier than twelve months immediately preceding the appointed day (7) the amount of credit under sub-sections (3), (4) and (6) shall be calculated in such manner as may be prescribed45transitional provisions relating to job work19 (1) where any inputs received at a place of business had been desptached as such or desptached after being partially processed to a job worker for further processing, testing, repair, reconditioning or any other purpose in accordance with the provisions of existing law prior to the appointed day and such inputs are returned to the said place on or after the appointed day, no tax shall be payable if such inputs, after completion of the job work or otherwise, are returned to the said place within six months from the appointed day:provided that the period of six months may, on sufficient cause being shown, be extended by the commissioner for a further period not exceeding two months:5provided further that if such inputs are not returned within a period of six months orthe extended period from the appointed day, the input tax credit shall be liable to be recovered in accordance with the provisions of clause (a) of sub-section (8) of section 142 of thecentral goods and services tax act10(2) where any semi-finished goods had been despatched from any place of businessto any other premises for carrying out certain manufacturing processes in accordance with the provisions of existing law prior to the appointed day and such goods (hereinafter in this section referred to as ''the said goods'') are returned to the said place on or after the appointed day, no tax shall be payable if the said goods, after undergoing manufacturing processes or otherwise, are returned to the said place within six months from the appointed day:provided that the period of six months may, on sufficient cause being shown, be extended by the commissioner for a further period not exceeding two months:15provided further that if the said goods are not returned within a period specified inthis sub-section, the input tax credit shall be liable to be recovered in accordance with the provisions of clause (a) of sub-section (8) of section 142 of the central goods and services tax act:20 provided also that the person despatching the goods may, in accordance with theprovisions of the existing law, transfer the said goods to the premises of any registered person for the purpose of supplying therefrom on payment of tax in india or without payment of tax for exports within six months or the extended period, as the case may be, from the appointed day25(3) where any goods had been despatched from the place of business without paymentof tax for carrying out tests or any other process to any other premises, whether registered or not, in accordance with the provisions of existing law prior to the appointed day and such goods are returned to the said place of business on or after the appointed day, no tax shall be payable if the said goods, after undergoing tests or any other process, are returned to such place within six months from the appointed day:30provided that the period of six months may, on sufficient cause being shown, beextended by the commissioner for a further period not exceeding two months:35provided further that if the said goods are not returned within the period specified inthis sub-section, the input tax credit shall be liable to be recovered in accordance with the provisions of clause (a) of sub-section (8) of section 142 of the central goods and services tax act:provided also that the person despatching the goods may, in accordance with the provisions of the existing law, transfer the said goods from the said other premises on payment of tax in india or without payment of tax for exports within six months or the extended period, as the case may be, from the appointed day40(4) the tax under sub-sections (1), (2) and (3) shall not be payable only if the persondespatching the goods and the job worker declare the details of the inputs or goods held in stock by the job worker on behalf of the said person on the appointed day in such form and manner and within such time as may be prescribed45miscellaneous transitional provisions20 (1) where any goods on which tax, if any, had been paid under the existing law atthe time of sale thereof, not being earlier than six months prior to the appointed day, are returned to any place of business on or after the appointed day, the registered person shall be eligible for refund of the tax paid under the existing law where such goods are returnedby a person, other than a registered person, to the said place of business within a period of six months from the appointed day and such goods are identifiable to the satisfaction of the proper officer:5provided that if the said goods are returned by a registered person, the return of such goods shall be deemed to be a supply10(2) (a) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods is revised upwards on or after the appointed day, the registered person who had sold such goods shall issue to the recipient a supplementary invoice or debit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this act, such supplementary invoice or debit note shall be deemed to have been issued in respect of an outward supply made under this act15(b) where, in pursuance of a contract entered into prior to the appointed day, the price of any goods is revised downwards on or after the appointed day, the registered person who had sold such goods may issue to the recipient a credit note, containing such particulars as may be prescribed, within thirty days of such price revision and for the purposes of this act such credit note shall be deemed to have been issued in respect of an outward supply made under this act:20provided that the registered person shall be allowed to reduce his tax liability on account of issue of the credit note only if the recipient of the credit note has reduced his input tax credit corresponding to such reduction of tax liability25(3) every claim for refund filed by any person before, on or after the appointed day, for refund of any amount of input tax credit, tax, interest or any other amount paid under the existing law, shall be disposed of in accordance with the provisions of existing law and any amount eventually accruing to him shall be refunded to him in cash in accordance with the provisions of the said law:provided that where any claim for refund of the amount of input tax credit is fully or partially rejected, the amount so rejected shall lapse:30provided further that no refund shall be allowed of any amount of input tax credit where the balance of the said amount as on the appointed day has been carried forward under this act(4) every claim for refund filed after the appointed day for refund of any tax paid under the existing law in respect of the goods exported before or after the appointed day shall be disposed of in accordance with the provisions of the existing law:35provided that where any for refund of input tax credit is fully or partially rejected, the amount so rejected shall lapse:provided further that no refund shall be allowed of any amount of input tax credit where the balance of the said amount as on the appointed day has been carried forward under this act40(5) (a) every proceeding of appeal, revision, review or reference relating to a claim for input tax credit initiated whether before, on or after the appointed day, under the existing law shall be disposed of in accordance with the provisions of the existing law, and any amount of credit found to be admissible to the claimant shall be refunded to him in cash in accordance with the provisions of the existing law and the amount rejected, if any, shall not be admissible as input tax credit under this act:45provided that no refund shall be allowed of any amount of input tax credit where the balance of the said amount as on the appointed day has been carried forward under this act(b) every proceeding of appeal, revision, review or reference relating to recovery of input tax credit initiated whether before, on or after the appointed day, under the existing law shall be disposed of in accordance with the provisions of the existing law, and if any amount of credit becomes recoverable as a result of such appeal, revision, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this act and the amount so recovered shall not be admissible as input tax credit under this act510(6) (a) every proceeding of appeal, revision, review or reference relating to anyoutput tax liability initiated whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with the provisions of the existing law, and if any amount becomes recoverable as a result of such appeal, revision, review or reference, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this act and amount so recovered shall not be admissible as input tax credit under this act15(b) every proceeding of appeal, revision, review or reference relating to any outputtax liability initiated whether before, on or after the appointed day under the existing law, shall be disposed of in accordance with the provisions of the existing law, and any amount found to be admissible to the claimant shall be refunded to him in cash in accordance with the provisions of the existing law and the amount rejected, if any, shall not be admissible as input tax credit under this act20(7) (a) where in pursuance of an assessment or adjudication proceedings instituted,whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this act and the amount so recovered shall not be admissible as input tax credit under this act25(b) where in pursuance of an assessment or adjudication proceedings instituted,whether before, on or after the appointed day under the existing law, any amount of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded to him in cash under the said law and the amount rejected, if any, shall not be admissible as input tax credit under this act30(8) (a) where any return, furnished under the existing law, is revised after the appointed day and if, pursuant to such revision, any amount is found to be recoverable or any amount of input tax credit is found to be inadmissible, the same shall, unless recovered under the existing law, be recovered as an arrear of tax under this act and the amount so recovered shall not be admissible as input tax credit under this act35(b) where any return, furnished under the existing law, is revised after the appointedday but within the time limit specified for such revision under the existing law and if, pursuant to such revision, any amount is found to be refundable or input tax credit is found to be admissible to any taxable person, the same shall be refunded to him in cash under the existing law and the amount rejected, if any, shall not be admissible as input tax credit under this act40(9) save as otherwise provided in this chapter, the goods or services or both suppliedon or after the appointed day in pursuance of a contract entered into prior to the appointed day shall be liable to tax under the provisions of this act(10) (a) notwithstanding anything contained in section 12 of the central goods andservices tax act, no tax shall be payable on goods under this act to the extent the tax was leviable on the said goods under the existing law4532 of 1994(b) notwithstanding anything contained in section 13 of the central goods and servicestax act, no tax shall be payable on services under this act to the extent the tax was leviable on the said services under chapter v of the finance act, 199432 of 199445(c) where tax was paid on any supply, both under any existing law relating to sale ofgoods and under chapter v of the finance act, 1994, tax shall be leviable under this act and the taxable person shall be entitled to take credit of value added tax or service tax paid under the existing law to the extent of supplies made after the appointed day and such credit shall be calculated in such manner as may be prescribed(11) where any goods sent on approval basis, not earlier than six months before the appointed day, are rejected or not approved by the buyer and returned to the seller on or after the appointed day, no tax shall be payable thereon if such goods are returned within six months from the appointed day:5provided that the said period of six months may, on sufficient cause being shown, be extended by the commissioner for a further period not exceeding two months:provided further that the tax shall be payable by the person returning the goods if such goods are liable to tax under this act and are returned after the period specified in this sub-section:10provided also that tax shall be payable by the person who has sent the goods on approval basis if such goods are liable to tax under this act, and are not returned within the period specified in this sub-section15(12) where a supplier has made any sale of goods in respect of which tax was required to be deducted at source under any existing law relating to sale of goods and has also issued an invoice for the same before the appointed day, no deduction of tax at source under section 51 of the central goods and services tax act, as made applicable to this act, shall be made by the deductor under the said section where payment to the said supplier is made on or after the appointed day20explanation—for the purposes of this chapter, the expression ''capital goods'' shall have the same meaning as assigned to it in any existing law relating to sale of goods chapter ix miscellaneous21 subject to the provisions of this act and the rules made thereunder, the provisions of the central goods and services tax act, relating to,—25(i) scope of supply;application of provisions of central goods and services tax act(ii) composition levy; (iii) composite supply and mixed supply; (iv) time and value of supply; (v) input tax credit;30(vi) registration; (vii) tax invoice, credit and debit notes; (viii) accounts and records; (ix) returns; (x) payment of tax;35(xi) tax deduction at source; (xii) collection of tax at source; (xiii) assessment; (xiv) refunds; (xv) audit; (xvi) inspection, search, seizure and arrest;40(xvii) demands and recovery; (xviii) liability to pay in certain cases;(xix) advance ruling; (xx) appeals and revision; (xxi) presumption as to documents; (xxii) offences and penalties;5(xxiii) job work; (xxiv) electronic commerce; (xxv) settlement of funds; (xxvi) transitional provisions; and10(xxvii) miscellaneous provisions including the provisions relating to the imposition of interest and penalty, shall, mutatis mutandis, apply,—(a) so far as may be, in relation to union territory tax as they apply in relation to central tax as if they were enacted under this act;15(b) subject to the following modifications and alterations which the central government considers neceassry and desirable to adapt those provisions to the circumstances, namely:—(i) references to ''this act'' shall be deemed to be references to ''theunion territory goods and services tax act, 2017'';20(ii) references to ''commissioner'' shall be deemed to be references to''commissioner'' of union territory tax as defined in clause (2) of section 2 ofthis act;(iii) references to ''officers of central tax'' shall be deemed to be referencesto ''officers of union territory tax'';25(iv) references to ''central tax'' shall be deemed to be reference to ''unionterritory tax'' and vice versa;(v) references to ''commissioner of state tax or commissioner of unionterritory tax'' shall be deemed to be references to ''commissioner of central tax'';30(vi) references to ''state goods and services tax act or union territorygoods and services tax act'' shall be deemed to be references to ''central goods and services tax act'';(vii) references to ''state tax or union territory tax'' shall be deemed tobe references to ''central tax''power to make rules3522 (1) the central government may, on the recommendations of the council, by notification, make rules for carrying out the provisions of this act(2) without prejudice to the generality of the provisions of sub-section (1), the central government may make rules for all or any of the matters which by this act are required to be, or may be, prescribed or in respect of which provisions are to be or may be made by rules40(3) the power to make rules conferred by this section shall include the power to give retrospective effect to the rules or any of them from a date not earlier than the date on which the provisions of this act come into force(4) any rules made under sub-section (1) may provide that a contravention thereof shall be liable to a penalty not exceeding ten thousand rupees23 the board may, by notification, make regulations consistent with this act and therules made thereunder to carry out the purposes of this actgeneral power to make regulationslaying of rules, regulations and notifications51024 every rule made by the central government, every regulation made by the boardand every notification issued by the central government under this act, shall be laid, as soon as may be, after it is made or issued, before each house of parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both houses agree in making any modification in the rule or regulation or in the notification, as the case may be, or both houses agree that the rule or regulation or the notification should not be made, the rule or regulation or notification, as the case may be, shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule or regulation or notification, as the case may bepower to issue instructions ordirections1525 the commissioner may, if  he considers it necessary or expedient so to do for thepurpose of uniformity in the implementation of this act, issue such orders, instructions or directions to the union territory tax officers as he may deem fit, and thereupon all such officers and all other persons employed in the implementation of this act shall observe and follow such orders, instructions or directionsremoval of difficulties2026 (1) if any difficulty arises in giving effect to any provision of this act, the centralgovernment may, on the recommendations of the council, by a general or a special order published in the official gazette, make such provisions not inconsistent with the provisions of this act or the rules or regulations made thereunder, as may be necessary or expedient for the purpose of removing the said difficulty:provided that no such order shall be made after the expiry of a period of three yearsfrom the date of commencement of this act25(2) every order made under this section shall be laid, as soon as may be, after it ismade, before each house of parliament statement of objects and reasonspresently, the constitution empowers the central government to levy excise duty on manufacturing and service tax on the supply of services  similarly, it empowers the state governments and union territories to levy sales tax or value added tax on the sale of goods in addition, many states also levy an entry tax on the entry of goods in local areas this exclusive division of fiscal powers has led to a multiplicity of indirect taxes in the country2 the present tax system on goods and services in the union territories is facing certain difficulties which are as under—(a) the multiplicity of taxes at the central and state levels has resulted in a complex indirect tax structure in the country that is ridden with hidden costs for the trade and industry;(b) there is no uniformity of tax rates and structure across the states and there is cascading of taxes due to "tax on tax"; and(c) the credit of excise duty and service tax paid at the stage of manufacture is not available to the traders while paying the state level sales tax or value added tax, and vice-versa  further, the credit of state taxes paid in one state cannot be availed in other states  hence, the prices of goods and services get artificially inflated to the extent of this "tax on tax" 3 in view of the above, it has become necessary to have a central legislation, namely, the union territory goods and services tax bill, 2017 the proposed legislation will confer power upon the central government for levying goods and services tax on the supply of goods or services or both which takes place within a union territory without legislature4 the proposed legislation will simplify and harmonise the indirect tax regime in the country  it is expected to reduce the cost of production and inflation in the economy, thereby making the indian trade and industry more competitive, domestically as well as internationally  it is also expected that introduction of goods and services tax will foster a common or seamless indian market and contribute significantly to the growth of the economy due to the seamless transfer of input tax credit from one stage to another in the chain of value addition, there is an in-built mechanism in the design of goods and services tax that would incentivise tax compliance by taxpayers the proposed goods and services tax will broaden the tax base and result in better tax compliance due to a robust information technology infrastructure5 the union territory goods and services tax bill, 2017, inter alia, provides for the following, namely:—(a) to levy tax on all intra-state supplies of goods or services or both except supply of alcoholic liquor for human consumption at a rate to be notified, not exceeding twenty per cent as recommended by the goods and services tax council (the council);(b) to empower the central government to grant exemptions, by notification or by special order, on the recommendations of the council;(c) to provide for apportionment of tax and settlement of funds on account of transfer of input tax credit between the central government, state government and union territory;(d) to provide for assistance by officers of police, railways, customs, and those engaged in the collection of land revenue, including village officers, and officers of central tax and officers of the state tax to proper officers in the implementation of the proposed legislation;(e) to provide for recovery of tax, interest or penalty payable by a person to the government which remains unpaid, by the proper officer of central tax;(f) to establish an authority for advance ruling in order to enable the taxpayer to seek a binding clarity on taxation matters from the department;(g) to provide for elaborate transitional provisions for smooth transition of existing taxpayers to goods and services tax regime;(h) to provide for application of certain provisions of the central goods and services tax act, 2017, inter alia, relating to definitions, time and value of supply, input tax credit, registration,  returns other than late fee, payment of tax, assessment, refunds, audit, inspection, search, seizure and arrest, demands and recovery, appeals and revision, offences and penalties and transitional provisions in the proposed legislation; and (i) to empower the commissioner to issue orders, instructions or directions to the union territory tax officers 6 the notes on clauses explain in detail the various provisions contained in the union territory goods and services tax bill, 20177 the bill seeks to achieve the above objectivesnew delhi;arun jaitleythe 23rd  march, 2017 notes on clausesclause 1 provides for short title, extent and commencement of the proposed act clause 2 defines various terms and expressions used in the proposed act clause 3 provides for appointment of commissioners and other class of officers as may be required for carrying out the purposes of the proposed actclause 4 confers power on the administrator to appoint officers of union territory tax below the rank of assistant commissioner of union territory tax for the administration of the proposed actclause 5 provides for conditions and exceptions for exercising the powers by the union territory tax officersclause 6 provides for authorisation of central tax officers, subject to certain conditions as shall be notified by the central government on recommendations of the council, to be proper officers for the purposes of the proposed actclause 7 provides for levy of union territory tax on all intra-state supplies of goods or services or both except on the supply of alcoholic liquor for human consumption, on the value determined under section 15 of the central goods and services tax act at such rates not exceeding forty per cent this clause further provides that—(i) union territory tax on the supply of petroleum crude, high speed diesel, motor spirit (commonly known as petrol), natural gas and aviation turbine fuel to be levied with effect from a date notified by the central government on the recommendations of the council;(ii) the central government to notify categories of supply of goods or services or both, the tax on which shall be paid on reverse charge basis by the recipient of such goods or services or both, on the recommendations of the council;(iii) the union territory tax in respect of the supply of taxable goods or services or both by a supplier, who is not registered, to a registered person shall be paid by such person on reverse charge basis;(iv) the central government may notify categories of services, the tax on intra-state supplies of which shall be paid by the electronic commerce operator if such services are supplied through it, on the recommendations of the council clause 8 confers powers on the central government to exempt either absolutely or conditionally goods or services or both of any specified description from the whole or any part of the union territory tax, on the recommendations of the council it also confers powers on the central government to exempt from payment of tax any goods or services or both, by special order, on which tax is leviable on the recommendations of the councilclause 9 provides for the manner and order in which input tax credit of integrated tax and input tax credit of union territory tax is to be utilisedclause 10 provides for transfer of credit of union territory tax to the integrated tax account when union territory tax credit has been used for payment of central taxclause 11 provides for officers of police, railways, customs and other officers engaged in collection of land revenue to assist officers involved in implementation of this actclause 12 provides for refund of union territory tax in situations where intra-state supplies are subsequently held to be inter-state suppliesclause 13 provides for recovery of union territory tax, interest or penalty by central tax officer while recovering arrears of central taxclause 14 defines terms and expressions such as advance ruling, applicant, application, etc, used in chapter viiclause 15 provides for constitution of advance ruling by the central government clause 16 provides for constitution of appellate authority for advance ruling by the central governmentclause 17 provides for migration of taxpayers registered under the existing law to be issued provisional registration under the proposed act, if the said taxpayer is required to be registered under the provisions of the proposed actclause 18 provides for transitional arrangements for carrying forward of input tax credit available under the existing lawclause 19 provides for transitional provisions relating to job-work clause 20 provides for miscellaneous provisions for transition of existing tax payers in various situationsclause 21 provides for application of specific provisions of the central goods and services tax act to the proposed actclause 22 confers powers on the central government to make rules for carrying out the provisions of the proposed act on recommendations of the councilclause 23 confers powers on the board to make regulations for carrying out the provisions of the proposed actclause 24 provides for laying of rules, regulations and notifications made by the central government before each house of the parliamentclause 25 confers powers to the commissioner to issue orders, instructions or directions to the union territory tax officers for uniform implementation of the provisions of the proposed actclause 26 confers powers on the central government to make such provisions not inconsistent with the provisions of the proposed act or the rules or regulations by a general or special order, on the recommendations of the council within a period of three years from the date of commencement of the proposed act financial memorandumclause 10 of the bill provides for apportionment of tax and settlement of funds on account of transfer of utilisation of input tax credit under this bill for the payment of tax dues under the integrated goods and services tax by the central government2 sub-clause (1) of clause 15 of the bill provides for the establishment of an authority for advance ruling3 sub-clause (1) of clause 16 of the bill provides for the establishment of an appellate authority for advance ruling4 sub-clause (1) of clause 21 of the bill provides for application of provisions of the central goods and services tax bill, 2017 relating to appeals, advance ruling and anti-profiteering so authorities established under central goods and services tax act will be utilised for the purposes of this bill thus there will be no extra financial expenditure under this bill5 the total financial implications in terms of recurring and non-recurring expenditure involved in carrying out the various functions under the bill would be borne by the central government most of the existing officers and staff of the central board of excise and customs and union territories would be used for carrying out the various functions under the bill however, it is not possible to estimate the exact recurring and non-recurring expenditure from the consolidated fund of india at this stage memorandum regarding delegated legislationclause 22 of the union territories goods and services tax bill, 2017 seeks to empower the government to make rules, inter-alia, in the following—(a) collection of taxes under section 7; (b) manner and time in which input tax credit will be transferred under section 10; (c) manner in which tax wrongfully collected and paid to central government or union territory government is to be refunded under section 19; (d) qualifications, the method of appointment of the members and the terms and conditions of their service for authority of advance ruling under section 15; (e) form and manner in which certification of registration on provisional basis is to be issued under section 17; (f) manner in which input tax credit is to be carried forward under section 18; (g) form, manner and time in which the job worker declares inputs held in stock on behalf of the manufacturer under section 19; (h) manner in which credit will be calculated on tax paid under existing law under section 20; and (i) any other matter which is to be, or may be, prescribed, or in respect of which provision is to be made, by rules 2  clause 23 of the bill empowers the board to make regulations to provide for any matter which is required to be, or may be, specified by regulation or in respect of which provision is to be made by regulations3  the matters in respect of which the said rules and regulations may be made are matters of procedure and administrative detail, and as such, it is not practicable to provide for them in the proposed bill itself the delegation of legislative power is, therefore, of a normal character———— a billto make a provision for levy and collection of tax on intra-state supply of goods or services or both by the union territories and the matter connected therewith or incidental thereto————(shri arun jaitley, minister of finance and corporate affairs)gmgipmrnd—5432ls(s3)—23-03-2017 the union territory goods and services tax bill, 2017 [to be/as introduced in lok sabha]1  page 6, line 17,- for    "known as name"   read   " known as the name"  2  page 13, line 15,- for    "considers neceassry"   read   "consider necessary"  3  page 13, line 24,- for    "deemed to be reference"   read   "deemed to be references "  4  page 20, line 1,- for    "union territories"   read   "union territory"      new delhi; march 25, 2017______ chaitra 4, 1939 (saka) 