Clarification on GST Regularization “As Is” or “As Is, Where Is Basis”
Circular No. 236/30/2024-GST
F. No. CBIC-190354/149/2024-TO(TRU-II)-CBEC
Dated: October 11, 2024
Overview:
This circular provides clarity on the scope and intent of the phrase “as is” or “as is, where is basis” used in various GST circulars based on the recommendations of the GST Council. The directive is issued to address confusion within field formations and among taxpayers regarding the regularization of GST payments and applicable rates.
Key Clarifications:
1. Background:
Circulars were issued following recommendations by the GST Council to regularize GST payments made in the past, particularly in cases of genuine doubts where multiple GST rates or interpretations led to varying tax payments.
2. Council Recommendations:
In its 54th meeting (September 9, 2024), the GST Council advised issuing this clarification to explain the rationale behind regularizing past payments under the “as is” or “as is, where is basis” principle.
3. Definition of “As Is, Where Is”:
Typically used in property transfers, this phrase means accepting an asset in its current condition with all defects. In the context of GST, it means accepting tax payments made at lower or nil rates as fully compliant, without refunding those who paid a higher tax rate.
4. Regularization Explained:
In situations where taxpayers paid lower rates due to genuine doubts, the tax payments are treated as complete for the period, even if the applicable rate was higher. No refunds will be provided to those who paid at higher rates.
5. Illustrations:
• Illustration 1: In a case where 5% GST was paid instead of 12%, regularization treats 5% as fully paid, with no duty differential required from the taxpayer.
• Illustration 2: In situations where some paid nil GST due to an exemption misunderstanding, non-payment will be accepted without further liability, but no refunds will be provided for those who paid 5%.
• Illustration 3: If an interpretational issue led to varied GST rates (e.g., 5%, 12%), regularization will accept 5% as fully paid but require payment in cases where no GST was paid.