Remission of Tax/Duty: In the Central Excise provisons, “remission” means relieving the tax payer from the obligation to pay tax on goods when they are lost or destroyed due to any natural causes. Remission is subject to conditions stipulated under the law and rules made thereunder.
Q. Whether such type of remission is allowed under GST law?
Yes. The proposed section 11 of the Model GT law permits remission of tax on supply of goods.
Q. Whether remission is allowed for goods lost or destroyed before supply?
Remission of tax will apply only when tax is payable as per law i.e taxable event should have happened and tax is required to be paid as per law. Under GST law, levy is applicable upon supply of goods. Where goods are lost or destroyed before supply, taxable even does not occur in order to pay tax. Accordingly remission of tax does not arise. So, on plain reading of the language used in Section 11, remission is allowed only for those cases where supply of goods is found to be deficient in quantity due to natural causes
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