Recently, the Kerala High Court in the case of Pazhayidom Food Ventures Pvt Ltd, has permitted a GST taxpayer to pay tax dues in EMIs as its business has been badly hit by Covid-19. Such a ruling showed the humaneness of the authorities who have taken due cognizance of the financial hardship caused by the taxpayer.

Here, in this article, I have provided you with the specific sections related to initiation, recovery and payment of GST Dues.

Section 78 of the Act pertains to Initiation of Recovery Proceedings which provides that any amount payable by a taxable person in pursuance of an order passed shall be paid within 3 months from the date of service of such order failing which recovery proceedings shall be initiated.

Section 79; Recovery of Tax contemplates that if any amount payable by a person to the Government under any of the provisions of the Act and Rules made there under is not paid then the proper officer could recover the amount through the following modes:

  • the proper officer may deduct the amount from the other amount owing to such person which may be under the control of the proper officer.
  • the proper officer may recover the amount so payable by detaining and selling any goods belonging to such person which are under the control of the proper officer
  • the proper officer may, by notice in writing, recover 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 Government.
  • the proper officer may detain any movable or immovable property belonging to or under control of such person and detain the same until the amount payable is paid. If the dues are not paid within 30 days, the said property is to be sold and with the proceeds of such sale the amount payable and cost of sale shall be recovered.
  • the proper officer may prepare a certificate specifying amount due from such person and send it to collector of the relevant district and collector shall proceed to recover from such person the amount as if it were an arrear of land revenue.
  • the proper officer by way of an application to the appropriate Magistrate who in turn shall proceed to recover the amount as if it were a fine imposed by him
  • Where any bond or other instrument was executed under this Act or Rules or regulations made there under provided that any amount due under such instrument may be recovered.
  • the proper officer of State tax or Union tax, during the course of recovery of said tax arrears from any person may recover unpaid amount of tax, interest, penalty payable to Central Government by such person. Such amount will be recovered as if it were arrear of SGST/UTGST and credit the amount so recovered to the account of Central Government.

In case the amount recovered is less than the amount due, then such amount will be apportioned among Central Government, State Government & Union Territory in proportion of the amount due to each authority.

According to Section 80, if the taxpayer cannot pay all the GST Dues (Tax/Interest/Penalty) in a lumpsum or within a stipulated time, then he can on an application filed to the Commissioner request for payment in instalments.

The commissioner may extend the due date for payment or allow the taxpayer to pay in monthly instalments not exceeding 24 months subject to payment of Interest and other conditions and limitations as may be prescribed.

However, if there is a default in payment of any one instalment on its due date, then the whole outstanding balance payable on such date shall become due and payable forthwith and shall, without any further notice being served on the person, be liable for recovery.

Note: This option of paying in instalments is not available for dues under self-assessment. Any tax under self-assessment must be paid in one go. Option to pay in instalments is available for any liability calculated by the tax authorities during provisional/final assessments, scrutiny, audit etc.

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May 2021