Demands and Recovery
GST FAQ 3rd Edition – December, 2018 – GST Frequently Asked Questions (FAQs)
GST
15. Demands and Recovery
\nQ 1. Which are the applicable sections for the purpose of recovery of tax short paid or not paid or amount erroneously refunded or input tax credit wrongly availed or utilized?
\nAns. Section 73 deals with the cases where there is no invocation of fraud\/suppression\/mis-statement etc. Section 74 deals with cases where the provisions related to fraud\/suppression\/mis-statement etc. are invoked.
\nQ 2. In what form and manner will the demand notice be issued?
\nAns. Demand notices can be issued under Section 73 (cases not involving fraud\/suppression), Section 74 (cases involving fraud\/suppression) & Section 76 (Tax collected but not paid to the Government. In all cases, along with the notices, a summary thereof has to be served electronically to the notice in FORM GST DRC-01.
\nWhere a statement of demand is issued in terms of Section 73(3) or 74(3), along wi<\/p>\n
= = = = = = = =<\/p>\n
Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n statement under Section 73(3). Similarly, in cases falling under Section 74, the taxable person has the option to discharge tax\/interest\/penalty equal to 15% of tax liability before issuance of notice under Section 74(1) or statement under Section 74(3). If he opts to make such payment before issuance of notice, he shall make the payment of tax and interest and thereafter inform the proper officer in FORM GST DRC-03. The proper officer has to issue an acknowledgement in FORM GST DRC-04. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n ith interest payable thereon under Section 50 and a penalty equivalent to the tax specified in the notice. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n l year to which demand relates to or the date of erroneous refund\/ITC wrongly availed. {sec.73(10)} = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n include proceedings under section 132; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n n 142 of the GST Act, = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n he utilization of the amount available in electronic cash ledger of the registered person. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n f a Union territory or a local authority, or of a Board or Corporation or a company owned or controlled, wholly or partly, by the Central Government or a State Government or the Government of a Union territory or a local authority. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n on of the said goods to the successful bidder and issue a certificate in FORM GST DRC-12. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n t and penalty, whichever is less. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n said property and shall remain affixed till the confirmation of sale; = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n he proper officer shall investigate the claim or objection and may postpone the sale for such time as he may deem fit. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n -owner of the property, he shall be deemed to be the successful bidder. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n session of the same. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n defaulter under the Act or the IGST\/UTGST\/SGST Act(s), 2017 and the rules made thereunder; and = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n any further notice. {sec.80 of CGST Act} = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n rom the Commissioner to that effect. = = = = = = = =<\/p>\n Plain text (Extract) only<\/strong> = = = = = = = =<\/p>\n","protected":false},"excerpt":{"rendered":" Demands and RecoveryGST FAQ 3rd Edition – December, 2018 – GST Frequently Asked Questions (FAQs)GST15. Demands and Recovery Q 1. Which are the applicable sections for the purpose of recovery of tax short paid or not paid or amount erroneously refunded or input tax credit wrongly availed or utilized? Ans. Section 73 deals with the … Continue reading “Demands and Recovery”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-16015","post","type-post","status-publish","format-standard","hentry"],"_links":{"self":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16015","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16015"}],"version-history":[{"count":0,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=\/wp\/v2\/posts\/16015\/revisions"}],"wp:attachment":[{"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16015"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16015"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goodsandservicetax.in\/GST\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16015"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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\nQ 5. What is the form and manner in which payment of tax\/interest\/penalty after issue of notice under Section 73 or 74 will be communicated by the taxable person?
\nAns. In cases falling under Section 73, the taxable person has the option to discharge tax and interest liability within 30 days of issuance of notice under Section 73(1) or statement under Section 73(3). Similarly, in cases falling under Section 74, the taxable person has the option to discharge tax\/interest\/penalty equal to 25% of tax liab<\/p>\n
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\nQ 7. What is the time limit for issuance of SCN in light of the above circumstances?
\nAns. In such circumstances, the proper officer shall issue the notice at least six months prior to the time limit specified in section 74(10) for issuance of the Order i.e 4 ½ years from the due date of furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or from the date of erroneous refund.
\nThereafter, the proper officer is required to issue the Order under section 74 (9) within a period five years from the due date of furnishing of annual return for the financial year to which the tax not paid or short paid or input tax credit wrongly availed or utilised relates to or from the date of erroneous refund.
\nQ 8. How will the taxable person respond to the SCN issued under Section 73 or Section <\/p>\n
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\n(ii) In case of section 74(cases of fraud\/suppression of facts\/wilful misstatement), the time limit for adjudication is 5 years from the due date for filing of annual return for the financial year to which demand relates to or the date of erroneous refund\/ITC wrongly availed. {sec.74(10)}
\nQ 12. If notice is issued under Section 74 and thereafter the noticee makes payment, is there any need to adjudicate the case?
\nAns. Where the person to whom a notice has been issued under sub-section (1) of section 74, pays the tax along with interest with penalty equal to 25% of such tax within 30 days of issue of notice, all proceedings in respect of such notice shall be deemed to be concluded. {Sec.74 (8)}
\nQ 13. How will rectification of order be done by the proper officer?
\nAns. As per Section 161, mistakes apparent on record can be rectified and such rectification has to be done within 3 <\/p>\n
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\n (ii) (ii) where the notice under the same proceedings is issued to the main person liable to pay tax and some other persons, and such proceedings against the main person have been concluded under section 73 or section 74, the proceedings against all the persons liable to pay penalty under sections 122, 125, 129 and 130 are deemed to be concluded.
\nExplanation 2. For the purposes of this Act, the expression “suppression” shall mean non-declaration of facts or information which a taxable person is required to declare in the return, statement, report or any other document furnished under this Act or the rules made thereunder, or failure to furnish any information on being asked for, in writing, by the proper officer.
\nQ 15. What is the time limit for initiation of recovery proceedings under CGST Act, 2017?
\nAns. Any amount payable by a taxable person in pursuance of an order passed under this Act shall be paid by such person within a period o<\/p>\n
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\n(a) Where in pursuance of an assessment or adjudication proceedings instituted, whether, before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes recoverable from the person, the same shall, unless recovered under the existing law, be recovered as an arrear or tax under this Act the amount so recovered shall not be admissible as input tax credit under this Act;
\n(b) Where in pursuance of an assessment or adjudication proceedings instituted, whether before, on or after the appointed day, under the existing law, any amount of tax, interest, fine or penalty becomes refundable to the taxable person, the same shall be refunded to him in cash under the said law, notwithstanding anything to the contrary contained in the said law other than the provisions of sub section (2) of Section 11B of the Central Excise Act,1944 (1 of 1944) and the amount rejected, if any, shall not be admissible as input tax credit under <\/p>\n
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\nQ 18. What are the modes of recovery of tax available to the proper officer?
\nAns. The proper officer may recover the dues in following manner:
\na) Deduction of dues from the amount owned by the tax authorities payable to such person.
\nb) Recovery by way of detaining and selling any goods belonging to such person;
\nc) Recovery from other person, from whom money is due or may become due to such person or who holds or may subsequently hold money for or on account of such person, to pay to the credit of the Central or a State Government;
\nd) Distrain any movable or immovable property belonging to such person, until the amount payable is paid. If the dues not paid within 30days, the said property is to be sold and with the proceeds of such sale the amount payable and cost of sale shall be recovered;
\ne) Through the Collector of the district in which such person owns any property or resides or carrie<\/p>\n
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\nQ 20. What is the procedure for recovery of dues by sale of goods belonging to the defaulter, which is in the control of the proper officer?
\nAns. (1) Where any amount due from a defaulter is to be recovered by selling goods belonging to such person in accordance with the provisions of clause (b) of sub-section (1) of section 79, the proper officer shall prepare an inventory and estimate the market value of such goods and proceed to sell only so much of the goods as may be required for recovering the amount payable along with the administrative expenditure incurred on the recovery process.
\n(2) The said goods shall be sold through a process of auction, including e-auction, for which a notice shall be issued in FORM GST DRC-10 clearly indicating the goods to<\/p>\n
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\n(6) Where the defaulter pays the amount under recovery, including any expenses incurred on the process of recovery, before the issue of the notice under sub-rule (2), the proper officer shall cancel the process of auction and release the goods.
\n(7) The proper officer shall cancel the process and proceed for re-auction where no bid is received or the auction is considered to be non-competitive due to lack of adequate participation or due to low bids.
\nQ 21. How will the dues owed by the defaulter be recovered by the proper officer from a third person (a bank, post office, insurer etc.) who holds money on behalf of the defaulter?
\nAns. (1) The proper officer may serve upon a person referred to in clause (c) of sub-section (1) of section 79 (referred to in question as “the third person”), a notice in FORM GST DRC-13 directing him to deposit the amount specified in the notice.
\n(2) Where the t<\/p>\n
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\nQ 23. How can the proper officer recover the dues from the amount payable to the defaulter as a consequence of execution of a decree of a civil court?
\nAns. Where any amount is payable to the defaulter in the execution of a decree of a civil court for the payment of money or for sale in the enforcement of a mortgage or charge, the proper officer shall send a request in FORM GST DRC-15 to the said court and the court shall, subject to the provisions of the Code of Civil Procedure, 1908 (5 of 1908), execute the attached decree, and credit the net proceeds for settlement of the amount recoverable.
\nQ 24. What is the manner in which the proper officer will recover dues from the defaulter by sale of movable or immovable property belonging to the defaulter? (Rule 147)
\nAns. (1) The proper officer shall prepare a list of movable and immovable property belonging to the defaulter, estimate their value as per the prevalent market price and issue an order of att<\/p>\n
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\n(b) a movable property, the proper officer shall seize the said property in accordance with the provisions of chapter XIV of the Act and the custody of the said property shall either be taken by the proper officer himself or an officer authorised by him.
\n(4) The property attached or distrained shall be sold through auction, including e-auction, for which a notice shall be issued in FORM GST DRC-17 clearly indicating the property to be sold and the purpose of sale.
\n(5) Notwithstanding anything contained in the provision of this Chapter, where the property to be sold is a negotiable instrument or a share in a corporation, the proper officer may, instead of selling it by public auction, sell such instrument or a share through a broker and the said broker shall deposit to the Government so much of the proceeds of such sale, reduced by his commission, as may be required for the discharge of the amount under recovery an<\/p>\n
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\n(9) The person making the claim or objection must adduce evidence to show that on the date of the order issued under sub-rule (1) he had some interest in, or was in possession of, the property in question under attachment or distraint.
\n(10) Where, upon investigation, the proper officer is satisfied that, for the reason stated in the claim or objection, such property was not, on the said date, in the possession of the defaulter or of any other person on his behalf or that, being in the possession of the defaulter on the said date, it was in his possession, not on his own account or as his own property, but on account of or in trust for any other person, or partly on his own account and partly on account of some other person, the proper officer shall make an order releasing the property, wholly or to such extent as he thinks fit, from attachment or distraint.
\n(11) Whe<\/p>\n
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\n(13) Any amount, including stamp duty, tax or fee payable in respect of the transfer of the property specified in sub-rule (12), shall be paid to the Government by the person to whom the title in such property is transferred.
\n(14) Where the defaulter pays the amount under recovery, including any expenses incurred on the process of recovery, before the issue of the notice under sub-rule (4), the proper officer shall cancel the process of auction and release the goods.
\n(15) The proper officer shall cancel the process and proceed for re-auction where no bid is received or the auction is considered to be non-competitive due to lack of adequate participation or due to low bids.
\nQ 25. In what manner will a proper officer attach any property in a debt not secured by a negotiable instrument, a share in a corporation, or other movable property not in the possession of the defaulter? (Rule 151)
\nAns. (1) A debt not secur<\/p>\n
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\n(3) A debtor, prohibited under clause (a) of sub-rule (1), may pay the amount of his debt to the proper officer, and such payment shall be deemed as paid to the defaulter.
\nQ 26. In what manner, will attachment of any property in the custody of courts take place? (Rule 152)
\nAns. Where the property to be attached is in the custody of any court or Public Officer, the proper officer shall send the order of attachment to such court or officer, requesting that such property, and any interest or dividend becoming payable thereon, may be held till the recovery of the amount payable.
\nQ 27. How will proper officer attach an interest in partnership of the defaulter? (Rule 153)
\nAns. (1) Where the property to be attached consists of an interest of the defaulter, being a partner, in the partnership property, the proper officer may make an order charging the share of such partner in the partnership property and profits with payment of the amount due under the certificate, an<\/p>\n
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\n(d) any balance, be paid to the defaulter.
\nQ 29. How will the proper officer make recovery of dues of the defaulter through land revenue authority?
\nAns. Where an amount is to be recovered in accordance with the provisions of clause (e) of sub-section (1) of section 79, the proper officer shall send a certificate to the Collector or Deputy Commissioner of the district or any other officer authorised in this behalf in FORM GST DRC-18 to recover from the person concerned, the amount specified in the certificate as if it were an arrear of land revenue.
\nQ 30. How will the amount be recovered from the defaulter, if it is to be recovered as a fine imposed under the Code of Criminal Procedure, 1973?
\nAns. Where an amount is to be recovered as if it were a fine imposed under the Code of Criminal Procedure, 1973, the proper officer shall make an application before the appropriate Magistrate in acco<\/p>\n
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\nQ 33. In what manner, will the Commissioner deal with a request for payment of tax and other amounts in instalments? (Rule 158)
\nAns. (1) On an application filed electronically by a taxable person, in FORM GST DRC- 20, seeking extension of time for the payment of taxes or any amount due under the Act or for allowing payment of such taxes or amount in instalments in accordance with the provisions of section 80, the Commissioner shall call for a report from the jurisdictional officer about the financial ability of the taxable person to pay the said amount.
\n(2) Upon consideration of the request of the taxable person and the report of the jurisdictional officer, the Commissioner may issue an order in FORM GST DRC-21 allowing the taxable person further time to make payment and\/or to pay the amount in such monthly instalments, not exceeding twenty-four, as he may deem fit.
\n(3) The facility shall not be allowed where-
\n(a) the taxable person has alr<\/p>\n
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\n(3) Where the property attached is of perishable or hazardous nature, and if the taxable person pays an amount equivalent to the market price of such property or the amount that is or may become payable by the taxable person, whichever is lower, then such property shall be released forthwith, by an order in FORM GST DRC-23, on proof of payment.
\n(4) Where the taxable person fails to pay the amount referred to in sub-rule (3) in respect of the said property of perishable or hazardous nature, the Commissioner may dispose of such property and the amount realized thereby shall be adjusted against the tax, interest, penalty, fee or any other amount payable by the taxable person.
\n(5) Any person whose property is attached may, within seven days of the attachment under sub-rule (1), file an objection to the effect that the property attached was or is not liable to attachment, and the Commissioner may, after affording an opportunity of being heard to the p<\/p>\n
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