Utgst Act – Advanced Tax Laws and Practice Important Questions

Question 1.
Briefly discuss the provisions related to the levy of UTGST.
Section 7 of UTGST Act, 2017 is a charging section that provides that Union Territory Goods and Services Tax (UTGST) will be levied on all intra-state supplies of goods or services or both within a Union Territory. Intra-State supply of alcoholic liquor for human consumption is outside the purview of UTGST. Value for the levy is guided by Section 15 of the CGST Act, 2017. Rates for UTGST are rates as notified by the Government on the recommendations of the GST Council. The maximum rate of UTGST will be 2096. Section 7 of UTGST Act, 2017 deals only with UTGS.T: In the case of intra-state supply CGST shall also be levied at a rate equal to UTGST.
For Example: If an Intra-state Supply attracts a rate of GST of 1296 then CGST will be levied at 696 and UTGST will be levied at 6%

Question 2.
Describe the impact of the merger of Dadra & Nagar Haveli and Daman & Diu?
Merger of the Two Union Territories (UTs) Dadra & Nagar Haveli and Daman & Diu
A big step forward to recognize the vision of ‘minimum government, maximum governance’ was taken by the Union Cabinet, approving the amendments/ extension/repeal in abundant Acts and Regulations pertaining to Goods and Services Tax (GST), Value Added Tax (VAT) and State Excise of the two Union Territories ie. of Dadra & Nagar Haveli and Daman & Diu, designating the Daman as the headquarters of the Union Territory.

On the 3rd day of December 2019, the Parliament passed the Dadra and Nagar Haveli and Daman and Diu Bill, 2019 for the merger of the two UTs, and the appointed date of the said amendment was made effective from January 26, 2020. The decision was taken with an aim to strengthen administrative efficiency and fast-track the development for the citizens of these two UTs, apart from savings to government exchequer and guaranteeing consistency, stability, and consistency in the day-to-day working of tax authorities.

This will prompt common tax authorities, better conveyance of services to citizens by lessening the duplication of work and improving administrative proficiency, help in acquiring consistent in-laws related to GST, VAT, and state excise, and furthermore, maintain a strategic distance from any lawful inconveniences in the levy and collection of tax and duty, including recovery of arrears, and consolidate the system of laws under the same.

Question 3.
A registered dealer, based in Chandigarh, makes a supply to another registered dealer located in Chandigarh, valuing ₹ 1,20,000. The applicable rate of GST is 12%. Calculate the amount of tax payable under GST
As the location of the supplier and the place of supply is in the same Union Territory, it is the case of intra-state supply and accordingly, CGST + UTGST will be levied.
Computation of GST liability

Particulars Amount (₹)
Value of taxable supply 1,20,000
CGST @ 6% 7,200
UTGST @6% 7,200
Total tax liability 14,400

Question 4.
Discuss the provisions of Section 9 of the UTGST Act regarding utilization of input tax credit of various taxes available in electronic credit ledger for payment of UTGST.
As per Section 9 of the UTGST Act, 2017 the amount of input tax credit available in the electronic credit ledger of the registered person on account of,

(1) the integrated tax shall first be utilized towards payment of integrated tax and the amount remaining, if any, may be utilized towards the payment of central tax and State tax, or as the case may be, Union territory tax, in that order;

(2) the Union territory tax shall first be utilized towards payment of Union territory tax and the amount remaining, if any, may be utilized towards payment of integrated tax;

(3) the Union territory tax shall not be utilized towards payment of central tax.

Credit of Priority 1 Priority 2 Priority 3

Note: Credit of CGST can never be used to pay off SGST/UTGST liability.
Author’s Note:
There are no specific questions asked on this topic to date in the EXAMS.

Utgst Act Notes

There is a total of 26 sections in this Act. All provisions of this Act are similar to provisions of the CGST Act except in Advance Rulings and Transitional Provisions. Questions on them, if any are covered in those respective topics.

CS Professional Advance Tax Law Notes