Demands
and Recovery under GST
To recover any tax not
paid unintentionally, GST provides for various provisions whereby a proper
officer can demand and recover such amount of tax along with interest &
penalty. Section 73 states that under the following circumstances a proper
officer can serve a show cause notice for recovery of tax along with interest
or penalty or both applicable.
Determination
of
Ø Tax
not paid
Ø Tax
short paid
Ø Tax
erroneously refunded
Ø ITC
wrongly utilised
Ø For
any other reason other than fraud
It can be easily
explained in below graph
The GST act further specifies
that if a show cause notice was previously issued on same grounds for earlier
period, a proper officer can issue a statement instead of show cause notice
which will include details of tax not paid or short paid or erroneously refunded
or input tax credit wrongly availed or utilized for such periods.
Payment
of GST before Show Cause Notice (SCN)
A person chargeable to
tax can on the basis of his own ascertainment pay tax along with interest
payable thereon under section 50 before the service of SCN or statement as the
case may be.
If the amount paid by such person is falling short
of the amount actually payable, the proper officer may issue SCN in respect of
the amount falling short of the amount actually payable.
Penalty
Ø If
the tax along with interest is paid within the 30 days of SCN, no penalty will
be levied.
Ø The
proper officer shall, after considering the representation, if any, made by
such person chargeable with GST, determine the amount of GST, and a penalty
equivalent to 10% of the GST or Rupees 10,000 whichever is higher, due from
such person and issue an order.
Order
within 3 years in following case
Ø Issue
of order within 3 years from the due date for furnishing of annual return for
the financial year to which the GST not
paid or short paid or input tax credit (ITC) wrongly availed
or utilised.
Ø Issue
of order within 3 years from the date of
erroneous refund
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