Chapter 19 Miscellaneous Provisions
Doctrine of unjust enrichment
No one should be benefited at another’s expenses.
'Unjust enrichment' means retention of a benefit by a person that is unjust or inequitable. 'Unjust
enrichment' occurs when a person retains money or benefit which belongs to someone else in
justice, equity and good conscience. The 'doctrine of unjust enrichment', therefore, is that no person can be allowed to enrich inequitably at the
expense of another. A right of recovery under the 'doctrine of unjust enrichment' arises where
retention of a benefit is considered contrary to justice or against equity.
Exceptions to the principal of unjust enrichment
The principle of unjust enrichment would be applicable in all cases of refund except in the following cases: -
1. Refund of tax paid on zero-rated supplies of goods or services or both or on inputs or input services used in making such zero-rated supplies 2. Unutilized input tax credit in respect of (i) zero rated supplies made
without payment of tax or, (ii) where the credit has accumulated on account of rate of tax on inputs being higher than the rate of tax on output supplies
3. refund of tax paid on a supply which is not provided, either wholly or partially, and for which invoice has not been issued;
4. refund of tax in pursuance of Section 77 of CGST/SGST Act i.e. tax wrongfully collected and paid to Central Government or State Government
5. if the incidence of tax or interest paid has not been passed on to any other person;
6. such other class of persons who has borne the incidence of tax as the Government may notify.
Anti-profiteering
Any reduction in GST rate or benefit of input tax credit should be passed on to the end consumer and not retained by the business. This is the basis of anti-profiteering provisions
under GST. Under anti-profiteering provisions, its illegal for a business to not pass on benefits of GST rate benefits to the end consumer and thereby indulging in illegal profiteering.
Who regulates anti-profiteering under GST?
The Government has created the National Anti-Profiteering Authority to find and take action against taxable registered persons indulging in illegal profiteering. The National Anti- Profiteering Authority has the powers to determine the
methodology and procedure for determining as to whether a taxable person is indulging in illegal profiteering.
Reporting to Anti-Profiteering Authority
Any interested party who has information to believe a taxable person in engaging in illegal profiteering from GST can refer the matter to the local screening committee. The matter will then be examined by a State level Screening Committee
constituted by the State Governments consisting of officers of the State Government.
If the screening committee determines that the matter has
merit, it would be forwarded with recommendations to the Standing Committee on Anti-Profiteering, which consists of Officers of both the State Government and Central
Government.
If the Standing Committee is satisfied that there is evidence to show that the taxable person has engaged in illegal
profiteering, then the matter will be referred to the Director General of Safeguards for a detailed investigation.
E-Commerce
Electronic Commerce has been defined in Sec. 2(44) of the CGST Act, 2017 to mean the supply of goods or
services or both, including digital products over digital or electronic network.
An ecommerce operator is any online business that operates using a marketplace model. Under the
marketplace model, an organization sets up an online portal where several small suppliers put up their
products for sale. The organization that runs the portal collects payments, takes a percentage as a convenience fee, and sends the rest of the payment to the suppliers.
You might already know some of the big players in this market, like Flipkart, Amazon, and Snapdeal.
Business models for E-Commerce
The model of doing business in order to generate revenue and also for its survival is regards as a business model. E-Commerce is more than a
technology only. It should be treated as a business model which is built around the application of
information and communication technologies to
cover any aspect of the value chain for products and services. On account of technological challenges
and rising competition, the e-commerce operators are required to innovate and adopt new methods.
It has led to evolution of many business models.
Some of these models as follows:
Business models for
E-Commerce Concept with Example
1. Principal to
principal Under this model, the vendor is the vendor is the site owner.
The vendor directly deals with the customers through the web site.
For e.g. Urban ladder is a company engaged in living room designs, bedroom designs, modular kitchens, modular
wardrobes, expert home consultation, etc. The co. Has its own web site www.urbanladder.com, through which e-commerce takes place.
2. Principal to
agents Under this model, the site owner is not the vendor rather he acts as an agent. The customer approaches the vendor through the web site of the ECO. The famous e.g. Are Flipkart, Snapdeal, Amazon, etc.
3. Aggregator The aggregator is a person, who owns and manages a web- based software application, and by means of the application and a communication device, enables a potential customer to connect with persons providing service of a particular kind under the brand name or trade name of the aggregator. The e.g. Are Trivago.com, Ola Cabs, Uber etc.
Levy of GST on E-Commerce Transactions of CGST Act
& section 5(5) of IGST Act.
The central govt. Is empowered to specify the
categories of services on which tax shall be paid by the electronic commerce operator if such services are supplied through it. Therefore, if any service is specified by the govt., the tax on such service shall be paid by the ECO. Further the ECO shall be
treated as the person liable to pay tax and all the co’s need to be done by him. The govt. Has notified foll. Categories of services, supplied through ECO, for the purpose of E-Commerce.
a) Services by way of transportation of passengers by a radio-taxi, motor cab, maxi cab and motor cycle.
b) Services by way of providing accommodation in hotels, inns, guest houses, clubs, campsites or
other commercial places meant for residential or lodging purposes, except where the person
supplying such service through ECO is liable for registration under GST Law.
c) Services by way of house-keeping, such as
plumbing, carpeting etc., except where the person supplying such service through ECO is liable for
registration under GST Law.
Levy of GST on E-Commerce Transactions
There are two separate provisions under the CGAT Act by which an E-Commerce operator is liable to pay tax, which are as follows:
a) When the ECO is made the taxable person:- if the services supplied through ECO are notified by the govt., then the ECO has to pay GST on such
services as the person liable to pay tax;
b) By mechanism of tax collection at source:- if the services have not been notified of IGST Act, the E- Commerce operator is still liable to collect tax at source for the value of taxable supplies made
through it by other suppliers.
