TNGST Act, 2017-conduct of test purchase – guidelines

The TNGST Act, 2017 is a state-level legislation passed in Tamil Nadu, India, that governs the levy and collection of goods and services tax in the state. The Act empowers the authorities to conduct test purchases to ensure compliance with the provisions of the Act.

Here are the guidelines for the conduct of test purchase under the TNGST Act, 2017:

Test purchase can be conducted by any officer authorized by the Commissioner of Commercial Taxes or any other officer as delegated by the Commissioner.

The test purchase can be conducted at any place where taxable goods or services are supplied or where records or accounts relating to the supply of taxable goods or services are maintained.

The officer conducting the test purchase should carry with him a written authorization specifying his designation and powers, along with a copy of the authorization letter.

The officer should also carry sufficient cash to make the test purchase and obtain a proper receipt or invoice for the same.

The test purchase should be conducted in a discreet and confidential manner, without causing any unnecessary inconvenience or embarrassment to the seller or any other person.

The officer should examine the goods or services purchased and verify whether the tax payable on such goods or services has been correctly levied and paid.

The officer should also inspect the records or accounts relating to the supply of such goods or services to verify whether the tax payable has been correctly accounted for and paid.

The officer should make a note of the findings of the test purchase, including any discrepancies or violations observed, and take appropriate action as per the provisions of the Act.

The officer should issue a receipt for the amount paid for the test purchase and maintain proper records of the same.

These guidelines are meant to ensure that the test purchase is conducted in a fair and transparent manner and that the rights of the seller are not violated. It is important for the officers to exercise their powers judiciously and in accordance with the provisions of the Act.

2. Provisions under the TNGST Act, 2017:

The TNGST Act, 2017 is a state-level legislation passed in Tamil Nadu, India, that governs the levy and collection of goods and services tax in the state. The Act has several provisions that regulate the administration and enforcement of the tax. Some of the key provisions under the TNGST Act, 2017 are:

Levy and collection of tax: The Act provides for the levy and collection of tax on the supply of goods and services in the state of Tamil Nadu. The tax is levied on the value of the goods or services supplied and is payable by the supplier of the goods or services.

Registration: The Act requires every person who is liable to pay tax under the Act to register with the authorities. The registration process involves the submission of specified documents and payment of a fee.

Input tax credit: The Act allows registered taxpayers to claim input tax credit for the tax paid on the purchase of goods or services used in the course of business. The input tax credit can be claimed against the tax payable on the supply of goods or services.

Filing of returns: The Act requires registered taxpayers to file periodic returns, which provide details of the supplies made and received, the tax payable and paid, and the input tax credit claimed. The returns are to be filed electronically within the prescribed time period.

Audit and assessment: The Act empowers the authorities to conduct audit and assessment of the records and accounts of registered taxpayers to ensure compliance with the provisions of the Act.

Offences and penalties: The Act prescribes penalties and fines for various offences, such as failure to register, failure to file returns, and evasion of tax. The Act also provides for prosecution and imprisonment in certain cases.

Appeals and revision: The Act provides for an appellate mechanism, whereby taxpayers can appeal against the orders passed by the authorities. The Act also provides for revision of orders passed by the authorities in certain circumstances.

These provisions are aimed at ensuring the effective administration and enforcement of the tax and promoting compliance by the taxpayers. It is important for the taxpayers to be aware of these provisions and comply with the requirements of the Act to avoid penalties and legal consequences.

3. Purpose of Test Purchase TNGST Act, 2017

The purpose of the test purchase under the TNGST Act, 2017 is to verify compliance with the provisions of the Act relating to the levy and collection of goods and services tax in Tamil Nadu. The test purchase is a method used by the authorities to detect tax evasion, under-reporting of sales, and other violations of the Act.

The test purchase involves the purchase of goods or services by an authorized officer in a discreet and confidential manner, without disclosing the identity of the officer or the purpose of the purchase. The officer then examines the goods or services purchased and verifies whether the tax payable on such goods or services has been correctly levied and paid. The officer also inspects the records or accounts relating to the supply of such goods or services to verify whether the tax payable has been correctly accounted for and paid.

The test purchase serves as a deterrent against tax evasion and promotes compliance by the taxpayers. It helps to ensure a level playing field for all the taxpayers and prevent unfair competition by those who evade taxes. The test purchase also helps to maintain the revenue base of the state and prevent the loss of revenue due to tax evasion.

Overall, the purpose of the test purchase under the TNGST Act, 2017 is to ensure the effective administration and enforcement of the tax and promote compliance by the taxpayers.

4. Standard Operating Procedure for Test Purchase TNGST Act, 2017

The Standard Operating Procedure (SOP) for the conduct of test purchase under the TNGST Act, 2017 is as follows:

Authorization: The officer conducting the test purchase should carry a written authorization specifying his designation and powers, along with a copy of the authorization letter.

Planning: The officer should plan the test purchase, including the time and place of the purchase, the amount to be spent, and the goods or services to be purchased.

Cash: The officer should carry sufficient cash to make the test purchase and obtain a proper receipt or invoice for the same.

Conduct of Test Purchase: The officer should conduct the test purchase in a discreet and confidential manner, without disclosing the identity of the officer or the purpose of the purchase. The officer should examine the goods or services purchased and verify whether the tax payable on such goods or services has been correctly levied and paid. The officer should also inspect the records or accounts relating to the supply of such goods or services to verify whether the tax payable has been correctly accounted for and paid.

Documentation: The officer should issue a receipt for the amount paid for the test purchase and maintain proper records of the same. The officer should make a note of the findings of the test purchase, including any discrepancies or violations observed, and take appropriate action as per the provisions of the Act.

Follow-up Action: The officer should take appropriate follow-up action based on the findings of the test purchase. This may include further investigation, audit or assessment, prosecution, or imposition of penalties.

Report: The officer should prepare a report on the test purchase, including the findings, the follow-up action taken, and the outcome of the action. The report should be submitted to the higher authorities for further action.

Conclusion

Overall, the SOP for the test purchase under the TNGST Act, 2017 is aimed at ensuring the effective and fair conduct of the test purchase and promoting compliance by the taxpayers. It