Demands and Recovery under GST (Volume 1.1)

Demands and Recovery under GST (Volume 1.1)

This Article will highlight about demands and recovery in the case of

·         In the case of Fraud

·         In case of wilful misstatement

·         In case of suppression of facts

Section 74 of the Central Goods and Service Tax Act, 2017 says that ….

·         If tax is not paid

·         Erroneously refunded or

·         Input Tax Credit (ITC) is wrongly availed or utilised  by fraud

·         Wilful misstatement or suppression of facts

A Proper officer can demand and recover such amount of tax along with the interest and penalty.

show cause notice (SCN)

A proper officer can serve a show cause notice (SCN) for recovery of tax (GST) along with interest and penalty applicable.

SCN (show cause notice) can be issued at least 6 months prior to the period of 5 years from the due date for furnishing of annual return for the financial year to which the tax (GST) not paid or short paid or within 5 years from the date of erroneous refund.

ISSUE OF STATEMENT

If any SCN was previously issued on same grounds for earlier period, a proper officer can issue a statement instead of a SCN which will include details of tax not paid or short paid etc. for tax period other than those already covered under Section 74(1)

PAYMENT OF TAX BEFORE SCN

To promote the voluntary compliance & to reduce litigation, the Act provides that a person chargeable to tax, can on the basis of own ascertainment, pay tax (GST) along with interest under section 50 as well 15% penalty of the said ascertainment of tax (GST) or ascertainment made by the proper officer before the issue of SCN. To be very careful if the proper officer finds that tax (GST) and penalty paid by person is short officer is empower to issue SCN in respect of the amount falling short.

            If the tax along with the interest payable under section 50 and 25% of tax as penalty is paid within 30 days of SCN, all proceedings in respect of the said notice shall be deemed to be concluded.

If any person made any representation in front of the officer after assessing all the facts of the case the Proper officer is empowered to issue order in that particular case or in the said case. Order issued by the proper officer will include

·         Amount of tax (GST) payable

·         Interest on the said amount

·         Penalty if any

If a person served with an order issued by the proper officer pays tax, along with interest payable thereon under section 50 and penalty equivalent to 50% of such amount within 30 days of communication of the order, all proceedings in respect of the said notice be deemed to be concluded.