Recovery of Tax
GST Law and Procedure – GST Law and Procedure [January, 2019]
GST
Chapter Fifty One
Recovery of Tax
1. All tax administration occasionally comes across a situation where the tax dues are not paid correctly by the tax payers, most of the times inadvertently and sometimes deliberately. To minimise the inadvertent short payment of taxes the concept of 'Matching' of details of 'Outward supplies' of supplier with the details of 'Inward supplies' of recipient has been introduced in the GST Act. Moreover, the self-assessed tax has to be paid by due date prescribed under the GST Act and in case of any failure to pay the same by due date the Input Tax Credit will not be available to his customers and also the tax payer will not be able to file any return for further period. Effectually these provisions works as a Self-Policing system and takes care of any mis-match in the payment of taxes. However, despite these provisions there may arise some instances where the tax
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
the tax dues along with interest, are paid within specified time limit/incidence. The Table below gives a comprehensive chart of provisions for voluntary compliance:-
Sr.No.
Action by Tax Payer
Amount of Penalty payable-Normal Cases
Amount of Penalty payable-Fraud Cases
Remarks
1.
Tax amount, along with interest, aid before issuance of Notice.
No Penalty and no Notice shall be issued.
15% of the Tax amount and no
Notice shall be issued.
The penalty shall also be not chargeable in cases Where the self-assessed tax or any amount collected as tax is paid (with interest) within 30 days from the due date of payment.
2.
Tax amount, along with interest, paid within 30 days of issuance of Notice.
No Penalty. All proceedings deemed to be concluded.
25% of the Tax amount. All proceedings deemed to be concluded.
3.
Tax amount, along with interest, paid within 30 days of communication of Order.
10% of the Tax amount or ₹ 10,000/-, whichever is higher
50% of the Tax amount.
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
hat all proceedings in respect of the said Notice shall be deemed to be concluded. If it becomes inevitable to issue a show cause notice and thereafter pass an Order, the GST Act ensures a timely completion of all these procedures by providing a fixed timeline for issuance of notice and order-as follows:-
Sr. No.
Nature of Case
Time for issuance of Notice
Time for issuance of Order
1.
Normal Cases
Within 2 years and 9 months from the due date of filing of Annual Return for the Financial Year to which the demand pertains or from date of erroneous refund.
Within 3 years from the due date of filing of Annual Return for the Financial
Year to which the demand pertains or from date of erroneous refund.
2.
Fraud Cases
Within 4 years and 6 months from the due date of filing of Annual Return for the Financial Year to which the demand pertains or from date of erroneous refund.
Within 5 years from the due date of filing of Annual Return for the Financial Year to which the demand pert
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
id, with interest, within 30 days from the due date of payment.
4. All these provisions make it clear that there are sufficient opportunities to make amend and discharge the tax liability with nil or nominal penalties. However, there are disincentives also for the person who fails to utilise these beneficial provisions. Besides that, the law also provides that the Board may fix certain monetary limits for not filing an Appeal against any order. It means if any order is passed in favour of the assessee the department will not pursue the case further by filing Appeals if the amount involved is less than the specified limit. At present, under the existing laws, the monetary limits for not filing an appeal to various judicial forums are follows: –
i. Tribunal- ₹ 10 Lakhs
ii. High Courts- ₹ 20 Lakhs and
iii. Supreme Court- ₹ 25 Lakhs
5. The recovery proceedings are final step towards realization of any tax or amount, which has been confirmed as payable after following
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =
ptions for recovery of government dues includes deduction of money from any amount payable to such tax payer, by detaining and selling any goods, by directing any other person from whom the money is due to such person, attaching any moveable (Including Negotiable Instruments and Shares) and/or immovable property belonging to the defaulter etc.
iii. However, considering various business aspects the provisions for payment of all such amounts, other than self-assessed tax, in instalments have also been made in the Act. A person can avail this benefit of payment in instalments, by making application to the Commissioner by specifying reasons for such request. On receipt of such application the Commissioner may allow payment of amount in instalments, subject to maximum 24 monthly instalments and on payment of applicable interest.
Here it may be noted that if there is default in payment of any one instalment then the whole outstanding balance shall become due and payable immediately.
Ma
= = = = = = = =
Plain text (Extract) only
For full text:-Visit the Source
= = = = = = = =