A registered person fails to account for certain goods as section 35(1) of the CGST Act, 2017 requires, and the goods are not shown to be lost, stolen or destroyed. What does section 35(6) direct…
Question and options
A registered person fails to account for certain goods as section 35(1) of the CGST Act, 2017 requires, and the goods are not shown to be lost, stolen or destroyed. What does section 35(6) direct the proper officer to do?
Order a special audit before any tax can be determined
Determine the tax on them as if they had been supplied
Require reversal of the input tax credit on them alone
Impose a general penalty, as no supply has been shown
Answer and explanation
Section 35(6) of the CGST Act, subject to section 17(5)(h), directs the proper officer to determine the tax payable on goods or services not accounted for as if the registered person had supplied them, applying section 73, 74 or 74A as the case may be. Reversal of credit alone is the rule for goods lost, stolen or destroyed under section 17(5)(h), and a special audit under section 66 is not a precondition.
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