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To Clarify the issues and to ensure uniformity in the implementation of the provisions of law across the field formations, board on Wednesday issued Circular No. 171/03/2022-GST dated 6th July 2022.

The circular has been explained below in tabular form by taking example of Mr. A, B & C being registered GST dealers.

S. No.
Supply of Goods and/or Services made or not
ITC Availed by recipient
ITC Utilized by recipient
ITC allowable or not
Tax on outward supply to be recovered
Penalty & Section
Section
Remarks
Individual Liability
1.
Not Made by A
Not Availed
Not Utilized
Not Allowed
No tax to be recovered from A
On Mr. A:
20,000 or Tax (higher)
122(1)(ii)
No recovery of tax & penalty u/s 73 & 74.
Mr. A – 20,000 or Tax (higher)
u/s 122(1)(ii)
2.
Not Made by A but made by B
Availed
Utilized
Not Allowed
No tax to be recovered from A
On Mr. B: Penalty of
15% or 25% or 50% of tax {CGST & SGST} (depending on time of payment of tax)
Section 74
Interest u/s 50
No action in other section as per section 75(12)
Mr. A
20,000 or Tax Evaded (whichever is higher) u/s 122(1)(ii)
Mr. B
15% or 25% or 50% of tax as the case may be u/s 74
Along with Interest u/s 50
3.
Not Made by A & B
Availed
Utilized
Not Allowed
No tax to be recovered from A or B
On Mr. B:
10,000 or Tax (higher)
122(1)(ii) – Outward Supply
&
ITC on Inward Supply 122(1)(vii)
No demand and recovery of either ITC or outward tax liability
&
No recovery of tax & penalty u/s 73 & 74.
Mr. A
20,000 or Tax Evaded (whichever is higher)
u/s 122(1)(ii)
Mr. B
20,000 or Tax Evaded (whichever is higher)
u/s 122(1)(ii)
&
20,000 or Tax Evaded (whichever is higher) u/s 122(1)(vii)
Mr. C
15% or 25% or 50% of tax as the case may be u/s 74
Along with
Interest u/s 50

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