Scope of remission of tax in GST where the supplies are found to be deficient in quantity

[Surender Gupta]

Section 11 of the First Draft Model GST Act states that:

11. Remission of tax on supplies found deficient in quantity

(1) The Central or a State Government may, by rules made under this sub-section, provide for remission of tax on such supplies which are found to be deficient in quantity due to any natural causes.

(2) Any rules made under sub-section (1) may, having regard to the nature of the supply, fix the limit or limits of percentage beyond which no such remission shall be allowed.

Now various question arouse about the the scope and coverage of the remission of tax as per the above stated provision as follows:

• Will it be in line with the the remission of duty in Central Excise;
• Whether it will be post removal of goods from the premises of supplier and before reaching to the destination of recipient;
• Will it address the issue of manufacturing loss, process loss or storage loss.

Finally, what was the need to bring this kind of provision in GST. Will it not being inspect raj indirectly?

AI Summary

Debate on GST Tax Remission for Natural Losses in Supply; Calls for Clear Provisions to Avoid Harassment. The discussion centers on the scope of tax remission under the GST for supplies found deficient in quantity due to natural causes. Participants question whether the provision aligns with Central Excise, addresses manufacturing, process, or storage losses, and if it applies post-removal of goods. Concerns are raised about the drafting quality and potential for harassment due to unaddressed loss scenarios. The need for clear, consistent provisions in GST law is emphasized, with suggestions for a straightforward remission process to prevent undue tax liabilities when losses occur. Participants express hope for clarity and fairness in the GST framework.