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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 of15% or 25% or 50% of tax {CGST & SGST} (depending on time of payment of tax) |
Section 74Interest u/s 50 |
No action in other section as per section 75(12) |
Mr. A20,000 or Tax Evaded (whichever is higher) u/s 122(1)(ii) |
Mr. B15% or 25% or 50% of tax as the case may be u/s 74Along with Interest u/s 50 |
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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. A20,000 or Tax Evaded (whichever is higher)u/s 122(1)(ii) |
Mr. B20,000 or Tax Evaded (whichever is higher)u/s 122(1)(ii)&20,000 or Tax Evaded (whichever is higher) u/s 122(1)(vii) |
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Mr. C15% or 25% or 50% of tax as the case may be u/s 74Along withInterest u/s 50 |
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