The Central Board of Excise and Customs (CBEC) recently issued Frequently Asked Questions (FAQs) on GST. The 223-page FAQs contained some significant facts on GST.
As per the new released FAQs, the government has decided to make tax evasion of over Rs 5 crore under the proposed Goods and Services Tax (GST) regime as a non-bailable offence, with the police having authority to make an arrest without a warrant.The earlier threshold for treating tax evasion as a cognizable and non-bailable offence was proposed to be at Rs 2.5 crore.
The Central GST (CGST) Bill provides that if the offences relating to taxable goods and/or services where the amount of tax evaded or the amount of input tax credit wrongly availed or the amount of refund wrongly taken exceeds Rs 5 crore, it shall be treated as cognizable and non-bailable.
It is further clarified that other offences under the Act are non-cognizable and bailable.
As per the FAQs, cognizable offence means serious category of offences in respect of which a police officer has the authority to make an arrest without a warrant and to start an investigation with or without the permission of a court. Non-cognizable offence means relatively less serious offences in respect of which a police officer does not have the authority to make an arrest without a warrant and an investigation cannot be initiated without a court order, it said.
Outlining the safeguards to be taken during arrest, the FAQ said if a person is arrested for a cognizable offence, he must be informed in writing of the grounds of arrest and he must be produced before a magistrate within 24 hours of his arrest.
If a person is arrested for a non-cognizable and bailable offence, the Deputy/ Assistant Commissioner of CGST/SGST can release him on bail and he will be subject to the same provisions as an officer in-charge of a police station under section 436 of the Code of Criminal Procedure, 1973. The FAQ provides that, if a person does not appear before a CGST/SGST officer who has issued the summon, he is liable to a penalty of up to Rs 25,000.
The government has set a target date of July 1 for rollout of the GST, which will subsume central excise, service tax, VAT and other local levies.
With regard to the taxability of taxation of goods and services under the CGST and SGST, it was clarified that “The Central GST and the State GST would be levied simultaneously on every transaction of supply of goods and services except the exempted goods and services, goods which are outside the purview of GST and the transactions which are below the prescribed threshold limits. Further, both would be levied on the same price or value unlike State VAT which is levied on the value of the goods inclusive of CENVAT. While the location of the supplier and the recipient within the country is immaterial for the purpose of CGST, SGST would be chargeable only when the supplier and the recipient are both located within the State.”
Read the full text of the Frequently Asked Questions below.
