CS Professional:Secretarial Audit Compliance Management and Due Diligence [Ch-11 Concepts/Principles of Other Audits]

Reg. 18 of SEBI (LODR)= every listed co. shall constitute a qualified and independent audit committee

Corporate Governance provisions under the erstwhile listing agreement popularly known as the Clause 49 requirements have been overhauled by the Companies Act 2013, recent adoptions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”) particularly in Schedule II.

ILLUSTRATIVE CHECKLIST FOR AUDITING CORPORATE GOVERNANCE SYSTEMS in a COMPANY

• Accountability
• Fairness
• Transparency
• Responsibility
• Shareholder Interests

The Compliance certificate shall be given either the practicing company secretaries or auditors regarding compliance of conditions of corporate governance which shall be annexed with the directors’ report.

CORPORATE GOVERNANCE-DUE DILIGENCE AREAS

1. Board Independence & Governance
2. Board Systems/Procedure
3. Board Committees
4. Transparency/Disclosures Compliances
5. Consistent Shareholder/Stakeholder Value enhancement (net worth/dividend/EPS)
6. CSR

SECRETARIAL Audit 

• for non-financial aspects 
• S.204 read with Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014
• MR-3 within 60 days from FY end

INTERNAL Audit

• responsible for audit within an org
• assess the effectiveness and efficiency of the organization’s operations, the reliability of financial reporting, and compliance with laws and regulations.
• Internal auditors also identify areas of potential risk and recommend improvements to the organization’s internal controls and processes.
• for adding value and improving operations
• wide scope covering compliance systems
• control systems
• compliance
• risk mgmt.
• identifying waste, inefficiency and duplication of effort
• reducing fraud
• Rule 13 of Co. (accounts) Rules, 2014

CS can also act as an internal auditor

CSR Audit

• includes the way company treats and proactively contributes to its community, promotes fair working conditions and a non-discriminatory environment, conveys transparent and honest accounting reports, and generally earns a reputation of trust and integrity in the society.
• Applicability: S.135- during immediately preceding FY
• Net Profit of ≧ 5 crores
• Net Worth of ≧ 500 crores
•  Turnover of ≧ 1000 crores
• CSR Committee (3 out of which 1=independent,if required)
• CSR policy/Roadmap
• spend every FY,2% of avg. Net Profit in 3 immediately preceding year
• METHODOLOGY
• Review policy,committee,governance structure,strategy,projects
• interact with beneficiaries,project team,mgmt,stakeholders
• budget,allocation,outcomes,monitoring and reporting
• expenditure (directs/indirect)
• annex CSR report with board's report per co. act,2013

TAKEOVER Audit

• related to Pricing, Open Offer and compliance verification of takeover under co. act/SEBI (SAST) 2011.
• acquirer/PAC;timely disclosures;holdings of promoter (Group);timely intimation to stock exchanges;timely reports
• failure to comply might result In penalties laid out in SEBI Act/Regulations
• furnishing a cost-benefit analysis for a durable long term investment 
• awareness of all prospects of the proposed business deals and understanding used to negotiate price.

INSIDER TRADING Audit

• initial trading disclosures by promoter/KMPs/Directors
• continual disclosures of trades >10 lakhs over a calendar quarter and notify exchanges within 2 trading days
• trading plans
• appointing compliance officer
• trading pre-clearance
• codes of fair disclosures and conduct
• The role of designated person
• method of UPSI dealing

illustrative checkpoints for SEBI(PIT) compliance In the book itself

INDUSTRIAL & LABOUR Law Audit

• detecting non-compliance of labour/employment and taking corrective measures to avoid unwarranted actions.
• promoting cordial relations + better governance/value creation
• systematic record scrutiny and reporting by a professional
• differs as per business/country as considers human values/workman rights
• A secretarial audit also involves observing compliance under Industrial/Labour laws
• Illustrative Checklist (For detailed checklist,check Study Material)
• Factories Act,1948
• Industrial Disputes Act,1947
• Payment of Wages Act,1936
• Minimum Wages Act,1948
• ESIC,1948
• EPF and Misc. Provisions Act,1952
• Payment of Bonus Act,1965
• Payment of Gratuity,1972
• Contract Labour (Regulation and Abolition) Act,1970
• Maternity benefit act,1961
• The Child and Adolescent Labour (Prohibition and Regulation) Act, 1986
• The Industrial Employment (Standing Orders) Act, 1946
• The Employees’ Compensation Act, 1923
• Equal Remuneration Act, 1976
• The Employment Exchange (Compulsory Notification of Vacancies) Act, 1959

CYBER Audit

minimizing financial loss,damage to rep from IT failure;assessing operative effectiveness of cyber security policies and procedures and sub-processes like asset mgmt.,awareness training,data security,resource planning and communications to identify internal control and regulatory deficiencies.

• sensitive data/IP
• networks to which multiple resources are connected
• Responsibility & Accountability
• SCOPE
  
• Data Security Policies
• Data Loss Prevention measures
• Effective network access Controls
• Detection/prevention Systems
• Security Controls
• Incident Response Program
• DIMENSIONS
• mgmt
• risk mgmt guided by Cyber security Officer
• risk state
• risk addressing and mitigating its affects
• Internal audit
• ILLUSTRATIVE CHECKLIST
  
• Personnel Security
• Physical Security
• Account & Password Manager
• Data Confidentiality
• Compliance and Audit

ENVIRONMENT Audit

evaluating efficacy of resources utilisation and identifying risks & liabilities or weaknesses in mgmt. system and problems in compliance with directives of regulatory agencies with special attention towards:

1. initiatives to prevent/abate/remedy the damage to the environment
2. resources conservation
3. consequences of legal violation
4. consequence of vicarious liability

Types

• Environmental Compliance Audits
• Air Pollution
• Water Pollution
• Radiation
• Pesticides
• Miscellaneous
• Environmental Mgmt. Systems Audit
• ISO 14001 (voluntary)

Process

1. understand industrial activity and pre Audit/Planning
2. On-site/Field audit
3. assessing impact/Post Audit
4. Follow-up/Review

Checklist

• Environmental Policy
• Environmental Aspects (emissions,pollution,impact,disposal)
• legal/other requisites

INFO SYSTEMS Audit

evaluate controls,collect evidence to determine safeguarding and a comprehensive exam of a targeted system.

component evaluation in the following areas:

1. systems architecture review
2. Business Process mapping (dependency on IT)
3. End User Id mgmt
4. operating systems configurations
5. app security controls
6. database access controls
7. anti-virus/anti-malware controls
8. network controls
9. logging/AUDITING Systems/processes
10. IT privilege access control
11. backup/restore procedures

Illustrative Checklist

• Mgmt Controls
• Security policy/Standards
• Steering Committee
• Business Continuity Planning
• systems Development Methodology
• Operation Controls
• Physical Assets
• adequate environmental controls
• org control
• app control

FORENSIC Audit

tool to combat corruption,financial crimes and frauds through investigation and resolving allegations of fraud/embezzlement.may be conducted to determine negligence.

"Forensic"=applying science to crime concerns/permissible to use in court

Forensic audit is highly specialized and requires detailed knowledge of fraud investigation techniques+legal framework along with identifying substance over form.

1. investigation and assessing defects
2. litigation/research assistance

Purpose

1. Corruption
• conflict of interest
• bribery
• extortion
2. Asset Misappropriation
3. Financial Statement Fraud

Procedure

• accepting investigation by independent firms/groups and examining case/business/parties
• planning investigation
• Fraud Symptoms
• internal indicators
• final categories of reporting
• gather evidence
• analytical procedure
• discussions/interviews
• substantive techniques
• Forensic Data Analysis
• reporting evidence summary/conclusion/event trail
• court proceedings

ILLUSTRATIVE CHECKLIST

1. mgmt level/employee level
2. MO
3. internal check
4. designated officer?
5. fraud nature
6. accounting of transactions
7. Fraud Triangle/Risk
8. Forensic Audit Reporting Particulars

SOCIAL Audit

for social/ethical performance and narrowing gap among vision/goal with reality.it creates impact upon governance and strengthens accountability/responsibility.

focus on social responsibility and requires transparency by enforcing the right to info.evaluating social/environmental impact.

Objectives

• gaps between needs and resources
• awareness among beneficiaries
• efficiency/effectiveness
• scrutiny of policy/decisions
• estimation of opportunity costs
• info
• community development
• proper documentation
• punitive action

examines issues in internal practices/policies or how they affect society. completely voluntary so no disclosures necessary and maybe used purely to improve upon existing vulnerabilities.

Steps/Checklist

1. identify stakeholders
2. performance indicators
3. regular review meetings
4. follow-up
5. establishing a group of trusted people
6. sharing with all stakeholders
7. policies clarity/suitability
8. scrutiny of fulfillment
9. necessary actions taken?
10. minority considered?

CS Professional:GRMCE [Ch-5 Board Committees]

RATIONALE BEHIND

• strengthening governance and supporting the board in achieving strategic objectives.
• maximising input value put forth by each director
• supporting board in fulfilling its role
• improving effectiveness/efficiency
• brings specialisation as a skill set
• insulation from undue influence
• better time mgmt. and in-depth scrutiny

TYPES OF COMMITTEES

1. selection/nomination
2. board development/governance
3. investment
4. risk mgmt.
5. safety,health and environment
6. inquiry
7. finance/budget
8. marketing/PR

BASIC COMMITTEE MGMT.

• a/c to terms of reference established by board
• standing/ad-hoc
• recommending policy for board approval
• full use of members' expertise,time & commitment along with ensuring diversity of opinions.
• don't supplant responsibility
• individual minutes recorded

TABLE F OF SCHEDULE I OF CO. ACT,2013 provides AoA of a co. to govern committee procedures.

COMMITTEE members' selection

specific members appointed by board/committee chair.the things considered vary from knowledge area,expertise domain to time commitments.also taken in consideration are the tasks required,skills needed and keeping in mind committee goals and objectives.

COMMITTEE chair selection

appointed by members/board.he is the one who sets the tone,pace and strategies so should possess motivational/leadership/behavioural skills and time commitment.this role requires extra work,time for communication and proper info about developments along with willingness to resolve conflicts.

coordinating work and making an environment of thoughtful deliberation along with helping the group use all abilities/experiences in synergy.

chairs are responsible for setting agendas,assigning responsibilities and following-up.

AUDIT COMMITTEE

Corporate governance comprises factors such as audit committee as it is charged with principal oversight of financial reporting and disclosure to enhance integrity in internal control processes/procedures and risk mgmt. systems.

constitution mandated under S.177 of co. act,2013;S.292A of the erstwhile act & Regulation 18 under SEBI(LODR),2015.

AUDIT COMMITTEE under co. act,2013

S.177 read with Rule 6 of co. rules,2014 provides that board of every listed and co. covered under Rule 4 of co.(director appointment/qualifications) rules,2014 provides for the following class:

• public co. with PUC of 10cr./<
• public co. with turnover 100 cr./<
• public co. having aggregate,o/s loans/borrowings/debentures/deposits > 50cr.

above figures taken as per last audited financial statements

AUDIT COMMITTEE under SEBI(LODR) Regulations,2015

every listed to constitute a qualified/independent committee per reference terms,subject to specified conditions.

Case Law : In the case of Shruti Power Projects (P) Ltd., In re, the National Company Law Tribunal, Ahmedabad Bench, CP No. 5/441/NCLT/AHM/2017, dated April 13, 2017.

AUDIT COMMITTEE composition

under REG.18, the chair should be independent and shall be present at AGMs.

The audit committee at its discretion shall invite the finance director or head of the finance function, head of internal audit and a representative of the statutory auditor and any other such executives to be present at the meetings of the committee. Provided that occasionally the audit committee may meet without the presence of any executives of the listed entity.

AUDIT COMMITTEE functions/role

under S.177

1. recommend appointments,remuneration and terms of auditors.
• in a govt. co, only remuneration is recommended,Notification No. GSR 463(E) dated 05-06-2015.
2. review/monitor auditor's independence and performance along with the effectiveness of the audit process.
3. examining financial statements and auditor reports
4. approval/modification of transactions with related parties or otherwise
• above unapplicable transactions b/w a holding and its wholly owned subsidiary.
5. scrutiny of inter-corporate loans/investments
6. valuations
7. evaluating internal financial controls
8. monitoring end use of funds raised through POs and related matters

under Reg.18(3),Part C of Schedule II

1. ROLE
• functions as per co. act,2013
• Review:
• directors responsibility statement
• changes in accounting policies/procedures
• major accounting entries
• adjustment in audit findings
• compliances
• disclosure/approval/modification of RPTs
• modified opinions in draft audit report
• review with mgmt.,quarterly financial statements before submission to board for approval.
• uses/application of funds/purposes/reports by monitoring agency
• monitoring auditor independence/performance and effectiveness of the audit process.
• reviewing internal control processes
• discussion with internal auditors of significant findings and follow up on internal investigations
• discussing scope/nature of audit as well as post-audit discussions
• reviewing whistle blower mechanism
• approving appointment of CFO
• functions as in terms of reference
• reviewing loan utilization/advances from/investment by holding 100 crore/</10% of asset size of subsidiary,whichever is LOWER.
2. MANDATORY REVIEW
• mgmt. discussion/analysis of financial condition and operation results
• statement of significant RPTs
• mgmt./internal control weaknesses letters
• internal audit reports
• chief internal auditor and their terms subject to review
• quarterly/annual deviation statements per Reg.32(1,7)

AUDIT COMMITTEE Powers

AUDIT COMMITTEE Meetings/Quorum

LODR provides for min. meeting and quorum such as:

meet at least 4x per year and not more than 120 days to elapse b/w 2 meetings.[Reg.18(2)(a)]

Quorum=2 or 1/3rd members,whichever GREATER with at least 2 independent directors.[Reg.18(2)(b)]

disclosures in board report

S.177(8) provides that the board's report under S.134(3) shall disclose-committee composition,reasons for not accepting recommendations by board.

under SEBI(LODR),following disclosures are made in "corporate governance" section-terms of reference,composition,members,chair,meetings and attendance per year.

further per Reg. 46,website to disclose all compositions

NOMINATION & REMUNERATION COMMITTEE (NRC)

co. act,1956 had not mandated it except for a public co. having no/inadequate profits.

NRC constitution

under co. act,2013;S.178(1) read with Rule 6 of co.(board meetings/powers)rules,2014 and Rule 4 of co.(directors appointment/qualifications)rules,2014 provides that board of following class to constitute an NRC:

1. every listed
2. public co. with PUC of 10cr./<
3. public co. with a turnover of 100 cr./<
4. public co. having aggregate,outstanding loans/borrowings/debentures/deposits >50 cr.

not applicable to S.8 co. and specified IFSC public co.

under SEBI(LODR),Reg.19 provides for an NRC

NRC composition

quorum as in Reg.18 and shall meet at least annually;role specified in Part D of Schedule II.

NRC Functions

under Co. act,2013

• identify qualified directors for senior mgmt. and recommend appointment,removal,evaluation of board,committees and directors.[178(2)]
• formulate criteria for qualifications,+ve attributes,independence and remuneration policy.(3)
• formulating above,consider-
• remuneration level/composition is reasonable/sufficient to attract,retain and motivate.
• relationship of remuneration to performance
• balance among fixed/incentive pay (4)
• placed on website
• web address and salient features in board's report
• (2,3,4) not applicable to govt. co. except for senior mgmt.notification 463(E), dated 5-6-2015.
• if such disclosed in financial statements,referred instead of being repeated in the board's report.

under Reg.19(4)

• ROLE-Part D of Schedule II
• criteria for qualifications,+ve attributes,independence and recommending a remuneration policy.
• criteria for performance evaluation of IDs/board
• diversity policy
• identifying persons qualified to be directors and recommending appointments/removal.
• ID terms per evaluation
• remuneration to senior mgmt.
• disclosure in board's report/website
• under "corporate governance"
• brief description of reference terms
• members/chair details
• yearly meetings/attendance
• IDs performance evaluation criteria
• per Reg.46,website discloses various compositions

STAKEHOLDERS' RELATIONSHIP COMMITTEE (SRC) 

SRC constitution/composition

SRC role

to consider/resolve grievances relating to transfer,non-receipt of annual reports/declared dividends. also-

• reviewing measures for exercise of voting rights
• reviewing adherence to service standards rendered by registrar/share transfer agents.
• measures and initiatives for reducing unclaimed dividends along with timely receipts.

disclosure in "corporate governance" in board's report:

• non-executive directors heading
• compliance officers
• shareholders complaints received so far
• not solved to holders satisfaction
• pending complaints

Reg. 46 like above committees

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE (CSR) 

under S.135 in co. act,2013 read with Rule 3 of co.(CSR Policy)rules,2014 mandates for every co. that fulfills the following criteria during immediately preceding FY to constitute a CSR Committee of 3/< directors of which, at least 1=independent.

1. net profit=5 cr./<
2. net worth=500 cr./<
3. turnover=1000 cr./<

CSR composition 

if no ID is required under S.149(4),committee to have 2/< directors.

Rule 5(1) provides:

• pvt. co. to constitute a committee with both directors
• foreign co; 1 person of committee shall be Indian Resident per S.380 and other nominated by foreign co.

• S.134(3) attached to a statement laid in AGM,a board report including policy details which has been developed/implemented by the committee during the year.
• S.135(9)amt. to be spent by co. under (5) <50 lakhs,CSR constitution inapplicable and functions discharged by board.

CSR functions

CSR expenditure

1. S.135(5) in every FY,at least 2% of avg. net profits (S.198) made during 3 immediately preceding FY or part thereof.
• first proviso states preference to be given to local areas for spending
• failure to spend,board's report to specify reasons for not spending unless unspent amt. relates to an ongoing project, transfer to fund in Schedule II within 6 months of FY expiry.
• spending in excess,set-off in succeeding FYs as prescribed
2. S.135(6)amt. remaining unspent pursuant to ongoing project transferred within 30 days of FY end to special a/c "unspent CSR a/c" and such spent within 3 FYs from transfer,failing which,transferred to fund in Schedule VII within 30 days of 3rd FY end.
3. S.135(7)default in complying above-

case law:Technicolor India (P.) Ltd. v/s Registrar of Companies, CP NO. 124 (BB) OF 2019, JANUARY 31, 2020.

check out Schedule VII in co. act,2013 for the table of activities.

RISK MGMT. COMMITTEE (RMC) 

Co. act describes such a policy in S.134(3)(n) but no specific section dedicated to it.

Reg. 21 of SEBI(LODR) deals with it as below:

• majority in case of listed entity with o/s SR equity shares,at least 2/3rds=IDs
• chair=board member/senior executive
• meet at least annually
• board defines role/responsibility and delegates monitoring/reviewing risk mgmt. plan.
• applicable to top 500 listed entities @ end of Previous FY

VIGIL MECHANISM

it should provide safeguards from victimization and to provide access to the chair of the audit committee and details disclosed in the board's report.

OTHER/NON-MANDATORY COMMITTEES

to oversee specific objects/projects and nomenclature/role will depend accordingly such as-

1. Corporate Governance for policies/procedures
2. Regulatory,Compliance and govt. Affairs for non-financial compliance
3. Science,Tech & Sustainability for R&D
4. Customer Service/Grievance
5. Fraud Monitoring
6. IT
7. Performance Appraisal Review
8. Credit
9. Ethics

CS Professional:Advanced Tax Laws [Ch-5 Assessment,Audit, Scrutiny,Demand and Recovery,Advance Ruling,Appeals and Revision]

Part-A (Assessment,Audit & Scrutiny)

Ch XII (S.59-64)/Ch XI (Rule 98-102) deals with assessment;Ch XIII (S.65-66) deals with audit; the CGST provisions also applicable to IGST.

 Assessment 

S.2(11) defines it as a determination of tax liability and includes all kinds of assessments.

 Self-Assessment 

S.59, every regstd. shall self-assess taxes payable and furnish a return under S.39.with this trust is placed in the assessee for tax liability and returns.

Provisional Assessment(S.60)

1. subject to (2),if a person is unable to determine supply value/tax rate, he may request a proper Officer (PO) in written giving reasons for provisional tax payment and PO shall order within 90 days from request receipt,allowing provisional tax payment @ rate/value specified by him.
2. provisional payment allowed,if a taxable person executes a prescribed bond and with such security/surety as PO deems fit,binding payment of difference between finally assessed and provisional payment.
3. PO shall within 6 months or further 6 months on sufficient cause and written reasons (extended by joint/additional commissioners[J/AC], upto 4 years by commissioner) from order,pass final assessment order with required info.
4. interest @ rate under S.50(1) under provisional assessment but not paid on due date under S.39(7) from due date till actual payment.
5. refund consequent to final assessment,subject to S.54(8),interest per S.56.

Rule 98 

• request for provisional tax payment shall furnish app electronically GST ASMT-01
• PO on app receipt,issue notice in ASMT-02 requiring additional info/docs and applicant to file reply in ASMT-03 and may appear personally if he desires.
• PO orders in ASMT-04 allowing provisional tax payment along with bond+security (<25% of bond) to be executed.
• bond in ASMT-05 and security as bank guarantee
• bond under SGST/IGST deemed furnished here
• PO issues notice in ASMT-06 calling for info/records for assessment finalization and a final assessment order specifying amount payable/refundable in ASMT-07.
• applicant files app in ASMT-08 for security release after order issued above
• PO releases security after ensuring payment per order and issues an order in ASMT-09 within  working days from app receipt.

 Scrutiny Assessment 

GST officers are empowered to scrutinize return to verify correctness by asking for explanations for discrepancies.

S.61 provides:

1. PO may scrutinize return and inform of discrepancies and seek explanations as prescribed.
2. if the explanation acceptable,person informed and no further action taken
3. if no satisfactory explanation furnished within 30 days of info by PO or further permitted period or failure to take corrective measure,PO initiates appropriate action under S.65,66,67 or determine taxes/dues under S.73,74.

Rule 99

• return furnished is selected for scrutiny,notice issued in GST ASMT-10 quantifying discrepancy and seeking explanations within 30 days from notice service or such further permitted periods.
• if discrepancy accepted and dues paid, informed or explanations furnished in ASMT-11 to PO.
• explanation furnished/info submitted found acceptable,PO informs in ASMT-12

Summary Assessment(S.64)

1. PO on evidence showing tax liability,with previous permission of J/AC assessing such liability to protect revenue interest and issue assessment orders (GST ASMT-16) on sufficient grounds.
2. if a taxable person is unascertainable,the person in charge of goods=deemed taxable and liable to pay tax/dues.
• order summary uploaded electronically in GST DRC-07 [Rule 100(3)]
3. withdrawal app (GST ASMT-17) within 30 days from order receipt,if A/JC considers order to be erroneous, may withdraw order (GST ASMT-18) and follow procedure in S.73/74. [Rule 100(4,5)]

 Best judgement Assessment 

• S.62 Assessment of Non-Filers
• notwithstanding anything contrary in S.73/74,where regstd. person fails to furnish returns even after serving notice under S.46,PO may assess tax liability to best of his judgement a/c to available material by gathering and issuing assessment order within 5 years from date in S.44 for furnishing annual return.
• Rule 100:assessment order (GST ASMT-13) and summary (GST DRC-07) uploaded electronically.
• A person furnishes a valid return within 30 days of assessment order service,said order deemed withdrawn but interest under S.50(1) shall continue.
• Rule 100(2):notice under S.63 in GST ASMT-14 containing grounds of best judgement and summary in GST DRC-01
• after 15 days allowed for a reply, passed the order in GST ASMT-15 and summary in DRC-07.
• Standard Operating Procedure to be followed in case of non-filers of returns
• S.63 assessment of unregistered persons
• notwithstanding S.73/74,person fails to obtain registration or whose registration is cancelled under S.29(2) but liable to pay tax, PO assesses liability to best of his judgement and issue assessment order within 5 years from date under S.44.
• no order made without giving opportunity of being heard
• Rule 100(2):notice in ASMT-14 and order in ASMT-15

CASE LAW:Audco India Limited vs. Commercial Tax Officer (2020) – Madras High Court

 Audit 

record examination and verifying info declared,taxes paid and assessing compliance.

S.2(13):examination of records,returns and other docs to verify turnover,taxes,refunds,ITC availed.

 Audit by a regstd. dealer [S.35(5)] 

whose turnover exceeds the prescribed limit during an FY that gets audited by CA/CMA shall submit a copy of audited annual accounts,reconciliation statement under S.44(2) and other prescribed docs.

nothing applicable to CG,SG depts, local authority whose books are subject to audit by C&AG of India/appointed auditor.

Budget 2021 removes the requirement of getting a GST audit as well as the reconciliation statement done/ certified by the specified professional, i.e., CA and CMA and provides for self-certification. 

Audit by tax authorities(S.65)

1. commissioner/officer authorised by him by order,may undertake audit for prescribed/frequency.
2. conduct audit at a person's business place/office
3. person informed by notice of not less than 15 working days prior to audit
4. completed within 3 months of audit commencement
• commencement=docs,records,info available or actual institution of audit,whichever LATER.
• commissioner satisfied, may with written reasons extend by further 6 months.
5. during audit,Authorised Officer may require regstd. person-
• facility to verify books/other docs
• furnish info for timely completion
6. @ conclusion,PO shall within 30 days inform the person about findings/rights/obligations and reasons for findings.
7. detection of tax unpaid/short paid/erroneously refunded/ITC wrongly availed or utilized,PO may initiate action under S.73/74.

Audit Procedure (Rule 101)

• period of audit=FY/part
• PO issues notice in GST ADT-01 per S.65(3)
• PO assisted by officers/officials, verify docs per book of a/c, returns/statements furnished and other particulars mentioned above.
• PO informs discrepancies and person replies followed by PO finalising the findings after due consideration of reply.
• @ conclusion,PO informs findings under S.65(6) in GST ADT-02

Special Audit (S.66)

1. at any stage of scrutiny,inquiry,investigation or other proceedings,officer not below asst. commissioner as per case's nature/complexity opines that value incorrectly declared/credit exceedingly availed, he may with commissioner's prior approval, direct a regstd. person in written to get his record examined/audited by CA/CMA as commissioner deems fit.
2. CA/CMA nominated shall within 90 days submit a report, duly signed and certified to said asst. commissioner (AC) mentioning prescribed particulars.
• app to AC by regstd. person/CA/CMA or for any material/sufficient reason,extended by a further 90 days.
3. (1) effects notwithstanding that accounts audited under other provisions
4. person given the opportunity of being heard for gathered material to be used in a proceeding.
5. examination/audit expenses including remuneration of professionals determined and paid by commissioner which shall be final.
6. if it results in tax unpaid/short paid/erroneously refunded/ITC wrongly availed or utilised,PO may initiate action under S.73/74.

Rule 102:direction in GST ADT-03 to get records audited and a person informed of findings in GST ADT-04.

Part-B (Demand and Recovery)

tax paying liability rests on taxpayers, as payable on self-assessment. so,there is every possibility of short/non payment. if such liability is wrongly assessed, may be per taxes collected but not paid/short paid,etc.

S.73/74 state circumstances of serving Show-Cause Notices (SCNs) for tax recovery+interest/penalty.

Pre SCN communication

govt. has obligated the PO to communicate tax,interest or penalty to assessee and deposit the amt.

Rule 142(1A):PO shall before service of notice under S.73/74(1) shall communicate tax,interest,penalty in part A of GST DRC-01A.

R.142(2A):if partial payment is made or submissions made against proposed liability, such made in part B of GST DRC-01A and S.73/74 initiated on these responses in part B.

Determination of tax unpaid(S.73)

1. appears to PO that discrepancy occurred not on purpose,serve notice requiring to show-cause why he shouldn't pay amt.+interest under S.50 and penalty leviable.
2. notice issued at least 3 months prior to time limit in (10) for issuing order
3. notice issued,PO may serve statement containing amt. details for periods not covered in (1).
4. statement service deemed notice service subject to condition that grounds relied are the same as earlier notice.
5. A person may before notice/statement service, pay tax+interest per own ascertainment/per PO and inform PO in writing.
6. PO on receipt of info,shall not serve notice/statement for tax paid/penalty payable.
7. PO opines that amt. paid falls short,issue notice w.r.t. short amt.
8. A person pays tax+interest within 30 days of SCN,no penalty payable and all proceedings deemed concluded.
9. PO shall after considering representations determine tax,interest,penalty=10% tax/10,000, whichever is HIGHER and issue an order.
10. order issued within 3 years from the due date of furnishing annual return for FY/erroneous refund.
11. notwithstanding (6,8),penalty payable where self-assessed tax or tax collected is not paid within 30 days from the due date of tax payment.

 Rule 142 

• representation per S.73/74(9)/76(3) or reply to any notice  whose summary was uploaded, in GST DRC-06.
•  order summary under S.52/62-64/73-76/122-125/127/129-130 electronically uploaded in GST DRC-07 specifying tax,interest and penalty.
• order summary treated as recovery notice
• order rectification per S.161 or order withdrawn,summary of withdrawal/rectification order in GST DRC-08.

tax unpaid with Fraud,Wilful Misstatement,Fact Suppression (S.74)

1. PO shall serve notice if discrepancy is founded to evade tax
2. notice issued at least 6 months prior to the time limit in (10)
3. statement after notice served containing details of discrepancy
4. statement deemed service notice
5. payment before the notice was served,pay tax+int. under S.50 and penalty=15% of tax on his own ascertainment/by PO and inform in writing.
6. PO on receipt of info not serve any notice
7. shortfall in payment, notice issued highlighting such shortfall
8. payment of tax+int. and penalty=25% tax within 30 days of notice issues,all proceedings deemed concluded.
9. PO considers representation determine tax,interest,penalty due and issue an order.
10. above order issued within 5 years of the due date of furnishing annual return for FY of discrepancy.
11. The person served with the order pays tax+int. and penalty=50% within 30 of order communication,all proceedings deemed concluded.
12. "all proceedings" not to include proceedings under S.132
13. Rule 142 equally applicable

Case law:Anand Nishikawa Co. Ltd. v/s Commissioner of Central Excise, Meerut - Supreme Court

General Tax Determination(S.75)

1. notice served,order issued is stayed by the court,Appelate Tribunal, such stay excluded in computing S.73/74(2,10).
2. AA,AT,court concludes that notice issued under S.74(1) is unsustainable as charges are not established,PO shall determine tax payable deeming as if a notice was issued under S.73(1).
3. order required to be issued per AA,AT,court,issued within 2 years of communication of direction.
4. opportunity of hearing granted to where written requests were received or where adverse decisions contemplated.
5. PO on sufficient cause,grant time and adjourn hearing for written reasons.
• adjournment granted only thrice
6. PO sets out relevant facts and basis of decision
7. tax,interest and penalty demanded not be in excess of amt. in notice and no demand confirmed on grounds other than ones in the notice.
8. AA,AT,court modifies tax,interest and penalty,stand modified
9. interest short/not paid payable irrespective of mention in order
10. adjudication proceedings deemed concluded if order not issued within 3 years/5 years per S.73/74.
11. issue on which,AA,AT,court gave decisions prejudicial to revenue interest and an appeal against such decision,period of appeal excluded in computing S.73/74(10) where proceedings initiated by issuing SCN.
12. notwithstanding S.73/74,self-assessed tax per return remains unpaid or interest is unpaid,recovered as per S.79.
13. no penalty  for the same act/mission imposed on the same person under this act.

monetary limit for issuing SCN/order under S.73/74

 Rule 142A:Procedure for dues recovery 

summary of order issued creating demand recoverable consequent to proceedings recovered and uploaded in GST DRC-07A and demand of order posted in Part II of e-liability ledger in GST PMT-01.

order's demand rectified/modified/quashed including in appeal/review/revision,summary uploaded in GST DRC-08A and PART II of e-liability ledger updated.

Tax collected but not paid to govt.(S.76)

• notwithstanding anything contrary in order/direction of AA,AT,court,every person who has collected tax shall forthwith pay to govt. irrespective of supplies being taxable or not.
• PO may serve notice requiring show-cause why amt. shouldn't be paid and why penalty shouldn't be imposed.
• PO after considering representations,determine due amt.
• additionally liable to pay interest under S.50 from the date amt. collected to date of payment to govt.
• opportunity of hearing granted where written request received
• PO issues order within a year from notice issued
• The order issue stayed by court,AT,stay period excluded in computing 1 year.
• PO sets out relevant facts and basis of decision in his order
• amt. paid to the govt. adjusted against tax payable
• surplus left after adjustment, credited to Fund or refunded to person bearing incidence.
• The person bearing incidence may apply for a refund per S.54

Tax wrongfully collected and paid to govt.(S.77)

intra-state supply subsequently held as inter-state,refunded for tax paid.

paid IGST subsequently held as intra-state not required to pay interest on tax payable.

Recovery Proceedings(S.78)

amt. payable per order paid within 3 months from service of such order,failing which,recovery proceedings initiated.

PO considers expedient,require a person to pay within less than 3 months with written reasons.

Tax Recovery(S.79)

1. amt. payable to the govt. not paid,PO shall recover by any of the following modes:
• may deduct/require other specified officers to deduct from money owing under PO's control/specified officer
• recovery by detaining/selling goods belonging to the regstd. person
1. PO,by written notice, requires payment to the govt. as sufficient to pay the due.
2. noticees bound to comply,where issued to the Post Office,banking co. or insurer,not necessary to produce a passbook/deposit receipt/policy or other docs for entry,endorsement before payment is made; notwithstanding customs.
3. noticee fails to pay,deemed defaulter and all consequences shall follow.
4. The officer issuing notice,may,amend/revoke notice or extend time for payment.
5. A person making payment in compliance with notice deemed to make payment under authority of the defaulter constituting good/sufficient discharge of liability.
6. person discharging liability to defaulters personally liable to govt. for liability discharged or default amt.whichever is LESS.
7. noticee proves to the issuer's satisfaction that money demanded wasn't due,nor likely to become due
8. nothing in this section deemed to require noticee to pay
• PO may prepare a signed certificate specifying amt. due and send to District Collector of person's residence/business/other authorised officer and proceed to recover specified amt as it is arrear of land revenue.
• notwithstanding CrPC,PO may apply to the magistrate to recover amt. as if it were imposed as such.
2. bond/other instrument terms provide due amt. recovered per (1),amt. without prejudice to any modes of recovery,recovered accordingly.
3. tax,interest,penalty payable remains unpaid,PO during recovery, recover as if it were arrears of S/UTGST and credit the govt.
4. amt. recovered<amt. due, credited to a/c of respective govt. proportionately.

Rule 143-146: GST DRC 09-15

Tax Payment in installments(S.80)

• on app filed,commissioner may,for written reasons,extend time for payment,other than self-assessed liability due in monthly installments<24 subject to interest payment under S.50 and other prescribed conditions.
• default in payment of single installment on due date,whole o/s balance becomes due/payable on that date being liable for recovery without further notice served.
• Rule 158:GST DRC-20,21

Property transfer=void cases(S.81)

person,after amt. becomes due,creates charge by sale/mortgage/exchange/other mode for defrauding govt. revenue,such charge=void.

not void if made for adequate consideration,in good faith and without notice of proceedings pendency/sums/tax payable,with PO's permission.

Tax to be first charge on property(S.82)

notwithstanding anything contrary except IBC,2016, tax,interest,penalty payable shall be 1st charge on property.

Rule 151-160:GST DRC 16,18,19,24

 Rule 147:recovery by property sale 

1. property list prepared by PO
2. properties seized by PO
3. sale notice in GST DRC-16
4. all properties remain affixed till sale confirmed
5. auction/e-auction notice in GST DRC-17
• PO may mention pre-bid deposit amt.
• last day for bid submission/auction date not earlier than 15 days from DRC-17 subject to deviation for perishable/hazardous goods or PO finds holding cost>expected realisable value.
6. stamp duty for property transfer borne by govt
7. defaulter pays due under recovery amt. including recovery expenses before the issue of DRC-17,PO shall cancel the auction.
8. no bidder found,re-auction can be initiated by PO

Provisional attachment to protect revenue in certain cases (S.83)

during proceedings pending under S.62-64,67,3-73,commissioner deems it necessary by written order,attachment of any property including a bank a/c of the taxable person.

attachment ceases to have effect after expiry of 1 year from commissioner's order.

Rule 159:DRC-22/23

Continuation/Validation of recovery proceedings(S.84)

demand notice for tax,interest,penalty,other amt. known as "govt. dues" and an appeal/revision app is filed/other proceedings initiated,then:

• where such dues are enhanced,the commissioner serves demand notice and recovery proceedings covered by demand notice served before disposal of appeal/revision/proceedings continue from immediately before disposal.
• where dues reduced-
• not necessary for commissioners to serve fresh demand notice
• commissioner intimates reduction to concerned person/authority
• recovery proceedings initiated per demand notice prior to disposal of appeal/revision/proceedings continued as per amt. reduced from pre-disposal stage.

Rule 148:no officer/person having duty to perform under sale shall bid for,acquire,attempt to acquire interest in sold property.

Rule 149:no sale on Sunday/other general holidays/notified days in the area of sale.

Rule 150:PO may seek assistance from the officer(s)-in-charge of the jurisdictional police station as necessary.

Part-C (Advance Ruling)

get clarifications/answers related to specified matters like supply,taxpayers can approach Authority for Advance Ruling (AAR).

if AAR can't issue it,people can approach the Appellate Authority for Advance Ruling (AAAR) or National AAAR.

 ADVANCE RULING 

per the OECD report(2004)-any advice,info or undertaking provided concerning tax situations and on which they are entitled to rely on.it is also an interpretation of tax laws by tax authorities.

S.95-106 of Ch XVII and Rule 103-107A 

for supplies undertaken or proposed to be undertaken

ADVANCE RULING Objectives

• certainty in advance for tax liability
• attract FDI
• reducing litigation
• disclose ruling efficiently/transparent/inexpensive

under S.97(2), can be sought for

• supply classification
• notification applicability
• determining supply time/value
• ITC admissibility paid/deemed paid
• determining tax liability
• clarification on registration requirements of applicant
• activity resulting in supply

Procedure on app receipt(S.98)

apps not admitted if same already pending/decided in GST proceedings

 appeal against authority's AR order 

AAAR(S.99)

subject to this chapter,AAAR constituted under S/UTGST deemed appellate authority for that state/UT.

appeal to AAAR(S.100)

1. concerned officer,jurisdictional officer,aggrieved applicant may appeal
2. filed within 30 days from ruling communicated to appellant
• AAAR may extend with further <30 days if sufficient cause shown
3. every appeal in prescribed form/fee/verification

AAAR order(S.101)

• after giving the opportunity of being heard to parties in order to confirm/modify the ruling.
• order passed within 90 days of filing appeal under S.100 or reference under S.98(5).
• if members differ,deemed that no advance ruling can be sought
• AR copy duly signed/certified by members sent to concerned parties after pronouncement.

National AAAR(S.101A)

1. consisting of the president,technical members for the centre and respective states.
2. technical members appointed by the selection committee after being satisfied of no financial/other interests.
3. salary,allowances and other T&C as prescribed and not varied to their disadvantage post-appointment.
4. The president=3 years from entering office or 70 years of age,whichever is EARLIER and eligible for reappointment.
5. technical members=5 years/65 age,whichever is EARLIER and eligible for reappointment.
6. govt., with CJI's concurrence suspend members for whom reference made to the supreme court judge.

appeal to National AAAR(S.101B)

• for questions in S.97(2),conflicting ARs given by 2 or more states/UTs/both under S.101(1,3),officer of respective state/UT authorised by commissioner/applicant (distinct persons) may prefer appeal.
• every appeal filed within 30 days from which the last conflicting ruling is communicated.
• The officer authorised may file appeal within 90 days the ruling communicated.
• on satisfaction of sufficient cause from presenting appeal, allow further <30 days.
• appeal in such form/fee/verification as prescribed

Nation AAAR order(S.101C)

1. after giving the opportunity of being heard,pass such orders as it thinks fit,confirming/modifying the ruling appealed against.
2. members differ in opinion,then decided according to majority
3. orders passed within 90 days from filing appeal under S.101B
4. copy of advance ruling, duly signed/certified by members sent to all concerned parties.

AR Rectification(S.102)

without amending a substantial part, only if a mistake is apparently identified from records within 6 months of order.

• own motion/brought to notice by prescribed officers/applicants
• opportunity of being heard if prejudicial to applicant/appellant

AR applicability(S.103)

• binding only on the applicant who sought it or concerned/jurisdictional officer.
• applicants can be distinct persons and persons having the same PAN
• binding unless law,facts or circumstances supporting the original AR have changed.

AR to be Void in certain circumstances(S.104)

authorities find that the applicant obtained a ruling by fraud,suppression of material facts,fact misrepresentation,declaring AR be void ab initio and all provisions applicable as if AR was never made.

 Rules for procedure to avail AR 

Rule 103:govt. shall appoint officers not below the Joint Commissioner as AAR members.

Rule 104:app under S.97(1) made in GST ARA-01 and accompanied by 5000 rupees deposited under S.49.verification all relevant docs signed per Rule 26.

Rule 105:true AR copy certified by any member

Rule 106:appeal against AR issued under S.98(6) in GST ARA-02 and accompanied by 10000 deposited per S.49. made by a concerned/jurisdictional officer in GST ARA-03 with no fee payable.

Rule 107:AR copy signed by members sent to all concerned parties per S.101(4).

Rule 107A:notwithstanding this chapter,E-filing to include manual filing in forms appended to these rules.

CASE LAWS-

1. Sutherland and Mortgage Services INC vs. Principal Commissioner (2020) – Kerala High Court
2. In Re Swayam (2020) – West Bengal AAR

3. In Re Leprosy Mission Trust India (2020) – West Bengal AAR

4. In re Portescap India Private Limited (2020) – Maharashtra AAR

5. In re HP Tourism Development Board (2020) - GST AAR Himachal Pradesh

6. In re Tamil Nadu Textbook and Educational Services Corporation (2020) - GST AAR Tamilnadu

Part-D (Appeals & Revision)

Ch XIII (Rule 108-116) and S.107-121

GST APL 01 and other forms:

either PO passes a prejudicial order to the taxpayer's interest or dept. feels the order is incorrect,they can make an appeal.

Appeal Hierarchy

only the aggrieved can appeal from below-

Appeal to AA(S.107)

1. appeal within 3 months from communication of order/decision
2. commissioner may on his own motion,request from commissioner of S/UTGST,call for or examine record of proceedings of adjudicating authority for satisfying legality/propriety and order a subordinate officer to apply to AA within 6 months of communication.
3. The officer's app dealt as if it were an appeal and all provisions apply to such apps.
4. AA may allow a further 1 month for appealing if satisfied with a sufficient cause.
5. every appeal as in such form/verification as prescribed
6. no appeal filed under (1),unless the appellant has paid:
• full tax,interest,fine,fee,penalty from impugned order
• 10% of the remaining tax in the dispute <25cr.
7. if appellant paid above,recovery proceedings for balance amt. deemed stayed.
8. AA to give opportunity of being heard to appellant
9. AA may grant time to parties on sufficient cause and adjourn hearing for written reasons; adjournment granted <3x.
10. AA may allow appellant to add a ground in appeal @ hearing,if satisfied that it's omission wasn't wilful/unreasonable.
11. AA after making further necessary inquiry order to modify,confirm or annul but shall not refer back to adjudicating authority.
• order enhancing fee,penalty,fine in lieu of confiscating goods of greater value or reducing refund,ITC not passed unless appellant granted opportunity of showing cause against proposed order.
• AA opines a discrepancy,no order requiring appellant to pay passed unless appellant given notice to show cause considering time limits under S.73/74.
12. AA orders disposing appeal in writing and shall state points of determination,decision and reasons.
13. where possible,hear and decide appeals within 1 year from filing; excluding a period of stay on order by a court/tribunal.
14. on disposal,communicate order to appellant,respondent and adjudicating authority.
15. copy of order passed to jurisdictional commissioner/designated authority
16. every order passed be final/binding on parties subject to S.108,113,117,118

 Applicable Rules 

Rule 108

• appeal in GST APL-01 with relevant docs as notified by commissioner and a provisional acknowledgement issued immediately to appellant.
• grounds of appeal and verification form signed per Rule 26
• certified copy of decision/order appealed against submitted within 7 days of filing appeal and a final acknowledgement indicating appeal no. issued by AA in GST APL-02.
• After a certified copy is submitted within 7 days,appeal filing date=issue of provisional acknowledgement and if submitted after 7 days, date=submission date.
• appeal treated filed after issue of final acknowledgement

Rule 109

• app under S.107(2) in GST APL-03+relevant docs
• certified copy of decision/order appealed against submitted within 7 days and appeal no. generated.

Rule 109A

• person aggrieved/officer under this act/S/UTGST may appeal to-
• commissioner(appeals) if order passed by Additional/joint commissioner
• officer not below Joint commissioner (appeals) if ordered by deputy/asst. commissioner/superintendent within 3 months from communication.

Revisional Authority Powers(S.108)

1. subject to S.121 and rules made thereunder,authority may on its own or upon info received or on commissioner's request,call for and examine records of proceedings.
• considers a decision/order to be erroneous,prejudicial to revenue interest,illegal,improper,not considered material facts,they may stay operation and after giving an opportunity of being heard along with making inquiries,pass orders as it thinks just and proper.
2. shall not exercise above power if-
• order subject to an appeal under S.107,112,117,118
• The period under S.107(2) has not yet expired or more than 3 years expired after passing a revised decision/order.
• order already taken for revision earlier
• order passed in exercise of powers under (1)
• order on a point not raised/decided before expiry of 1 year from order in appeal or before 3 years as in (2[b]),whichever is LATER.
3. every order passed in revision,subject to S.113,117,118 shall be final and binding.
4. if it involves issue on which Tribunal/high court has given decision and an appeal is pending,period spent between filing and decision of appeal shall be excluded for (2[b]) if proceedings issued by notice.
5. order issuing stayed,such stay excluded in period of limitation

Rule 109B:notice/order for revision

• The authority decides to pass an order likely to affect adversely,revisional authority serves notice under GST RVN-01 and gives a reasonable opportunity of being heard.
• order summary in GST APL-04 indicating final amt. of demand

Appellate Tribunal and benches(S.109)

1. constituted on council recommendations by notification
2. powers exercised by national bench and designated regional/state (area) benches with constitution roughly the same as S.101A.
3. The national bench has jurisdiction where issues are related to the place of supply and state benches have jurisdiction otherwise.
4. business can be transferred/distributed by general/specific order
5. if members differ in opinion,they decide as per majority or refer to the president if no majority is reached.
6. govt. can consult the president and transfer judicial/technical members
7. no act/proceeding questioned/invalid on vacancy/defect in the tribunal's constitution.

S.110:president,members,qualification,appointment,service conditions as in S.101A.

Procedure before Appelate Tribunal(S.111)

• shall not be bound by CPC,1908 but guided by natural justice and this act/rules and have power to regulate its own procedure.
• for discharging its functions have the same powers as a civil court under CPC,1908 while trying a suit.
• order may be enforced as if it were a decree by court in pending suit and it shall be lawful to send for execution of orders to court within local limits of whose jurisdiction-
• order against co.,RO situated
• person,resident/carries on business or personally works for gain
• all proceedings deemed judicial within IPC and AT deemed a civil court for CrPC,1974.

Appeals to AT(S.112)

1. aggrieved can appeal within 3 months from communication of disputed order.
2. AT may refuse to admit such appeal where tax,ITC,difference,fine,penalty <50000.
3. commissioner may on own motion or request from S/UTGST commissioner call for and examine records satisfying w.r.t legality/propriety and may direct a subordinate to appeal within 6 months from order passing.
• dealt as if it were an appeal under S.107(11)/108(1) and all provisions applicable to appeals apply here.
4. on receipt of notice of appeal,the respondent,notwithstanding his own appeal, within 45 days of notice receipt,verified cross-objections memo against part of the order appealed against and such memo disposed as if appeal under (1).
5. may admit appeal within 3 months/45 days after expiry of period in (1,4) if satisfied with a sufficient cause.
6. appeal in such form,verification and accompanied by prescribed fee
7. no appeal filed unless the appellant paid full charges,20% of disputed tax+amt. in S.107(6) <50cr.
8. amt. paid as above,recovery proceedings deemed stayed till appeal is disposed of.
9. every app in appeal for error rectification or restoration of appeal/app accompanied by prescribed fees.

AT Orders(S.113)

1. after giving the opportunity of being heard to parties,pass orders or refer back to concerned authority with directions as it thinks fit.
2. if sufficient cause shown,at any stage of hearing,grant time and adjourn hearing for written reasons.(adjournment <3x)
3. may amend order passed under (1) to rectify error apparent within 3 months of issuing.
• no amendment enhancing assessment/reducing refund,ITC,increasing liability made unless party given opportunity of being heard.
4. as far as possible,hear and decide appeals within 1 year of filing
5. send a copy of every order passed to the concerned authority, appellant and commissioner.
6. save as S,117,118 orders passed shall be final and binding

 Additional Rules 

Rule 110:appeal to AT

• under S.112(1) filed along with relevant docs as notified by the registrar in GST APL-05 and a provisional acknowledgement issued to the appellant immediately.
• memo of cross-objections filed as notified by registrar in GST APL-06
• both signed per Rule 26
• certified copy of decision/order appealed against along with fees submitted within 7 days of filing appeal and a final acknowledgement,indicating appeal no. issued in GST APL-02 by registrar.
• filing date depends upon submission as in Rule 108
• fee for filing appeal=1000 for every 1 lakh of tax,ITC or respective difference or fine,fee,penalty determined in disputed order <25000
• no fee for app of error rectification in S.112(1)

Rule 111:App to AT

• GST APL-07 in S.112(3)
• certified copy of disputed decision/order submitted within 7 days for appeal no. to be generated by the registrar.

Rule 112:production of Additional Evidence

• not allowed to produce evidence other than produced before adjudicating authority except in the following:
• The above authority refused to admit evidence which ought to have been submitted.
• appellant prevented by sufficient cause from producing evidence relevant to appeal.
• authority made order without giving sufficient opportunity of adducing evidence.
• no evidence admitted unless AT/AA records written reasons for admission
• no evidence admitted unless adjudicating authority/officer authorised allowed a reasonable opportunity-
• to examine evidence/doc or to cross-examine witness produced
• produce rebuttal evidence/witness
• nothing affects the power of AA/AT to call for production of any doc/evidence and disposing appeal.

Rule 113:AA/AT Order

• along with order in S.107(11),issue summary in GST APL-04 indicating final confirmed demand amt.
• jurisdictional officer shall issue a statement in GST APL-04 indicating final demand amt.

Financial/Admin. Powers of the President(S.114)

over national/regional benches as prescribed. also have authority to delegate as he may think fit to other members/officers while continuing to supervise them.

Interest on Refund paid for appeal admission(S.115)

amt. paid under S.107(6)/112(8) required to be refunded consequent to AA/AT's order,int. @ S.56 payable from payment till refund.

Appearance by Authorised Representatives(S.116)

1. entitled to appear before an officer is appointed for proceedings,may otherwise when required to appear personally,appear by authorised representatives.
2. "authorised representative"=being:
• his relative/regular employee
• advocate entitled to practice in a court and not debarred from practicing.
• PCA/PCMA/PCS and not debarred from practice
• retired officer of the commercial tax dept. of any state/UT or servicing govt. not below the rank of Group-B gazetted Officer for not less than 2 years.
• not entitled to appear for 1 year from retirement/resignation
• authorised as a GST practitioner
3. no person-
• dismissed/removed from govt. service
• convicted of offence under law passed by the State Legislature dealing with taxes on sale/supply.
• guilty of misconduct
• adjudged insolvent for period of insolvency
4. person disqualified under S/UTGST deemed disqualified here

Rule 116:other than those in (2),found upon inquiry,guilty of misconduct, commissioner may,after providing the opportunity of being heard,disqualified from appearing.

Appeal to the High Court(S.117)

1. a person aggrieved with orders of state/area benches file appeal and HC shall admit if it involves substantial question of law.
2. appeal filed in prescribed form/verification within 180 days from order receipt or afterwards with sufficient cause.
3. appeal heard on formulated substantial questions of law and respondents allowed to argue for its involvement.
• appeal may be heard for other substantial legal questions if the court is satisfied and records written reasons.
4. decide and deliver judgement containing grounds & award costs as it deems fit.
5. determine issues-
• not determined by state/area benches
• wrongly determined by benches
6. appeal heard by a bench of not less than 2 judges and decided a/c to majority or a majority of bench judges+other HC judges.
7. effect given to judgement on the basis of a certified copy
8. CPC applies to appeals.

Rule 114:appeal in GST APL-08 and appeal grounds/verification form in APL-08 signed as per Rule 26.

Rule 115:jurisdictional officer issues statement in GST APL-04 indicating final confirmed demand amt.

Appeal to the Supreme Court(S.118)

• appeal from order passed by national/regional bench or judgement/order of HC which HC certifies to be fit for appeal.
• CPC,1908 applies
• HC judgement is varied/reversed,effect given to SC order per S.117

S.119:sums due to govt. under orders passed payable accordingly

Appeal not to be filed(S.120)

1. The board may be on council recommendations,issue order/directions/instructions fixing monetary limits as it may deem fit,for regulating appeal filing/apps by central tax officers.
2. if pursuance to orders,officer didn't file appeal, it shan't preclude officers from filing if another case involves issues/question of law.
3. no party shall contend that officer acquiesced in decision on disputed issue by not filing.
4. hearing appeal with regard to circumstances of non-filing

Non-Appealable Decisions/Orders(S.121)

• commissioner/authority order to direct transfer of proceedings among officers.
• seizure /retention of books,registers and other docs
• sanctioning prosecution
• under S.80

pre-deposits required to be refunded subsequent to orders made +int. under S.56.