DEMAND AND DETERMINATION THEREOF
1. INTRODUCTION: HOW A SITUATION FOR DEMAND ARISES
1.1 While discharging the tax liability on the supplies, a supplier has to ensure proper compliance of the provisions related to classification of the supply of Goods and Services, applicable rate of tax, valuation of the supply, time of supply, place of supply, admissibility of exemption/concession granted by notification, if any, etc., so as to ensure proper payment of tax on such supplies.
1.2 Any short payment or non-payment of tax, wrong availment/utilization of input tax credit would lead to demand and determination of the amount of tax short-paid or not paid, amount of wrongly availed/utilized input tax credit. Any amount erroneously refunded shall also result in demand of such erroneously refunded amount.
1.3 The provisions of CGST Act, 2017 and CGST Rules, 2017, relevant to demand and determination of tax short paid or not paid, Input Tax Credit wrongly availed or utilized or amount erroneously refunded, are as under –
| Sr. No. | Section/Rules | Provision pertaining to |
| 1 | Section 73 | Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized for any reason other than fraud or any wilful-misstatement or suppression of facts |
| 2 | Section 74 | Determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilized by reason of fraud or any wilful-misstatement or suppression of facts |
| 3 | Section 75 | General provisions relating to determination of tax |
| 4 | Section 76 | Tax collected but not paid to government |
| 5 | Section 79 | Recovery of tax |
| 6 | Section 129 | Detention, seizure and release of goods and conveyances in transit |
| 7 | Section 161 | Rectification of errors apparent on the face of record |
| 8 | Rule 142 | Notice and order for demand of amounts payable under the Act. |
| 9 | Rule 152 | Attachment of property in custody of courts or Public Officer |
1.4 The relevant provisions, Forms, Circulars, Notification, etc., wherever mentioned, can be seen by clicking ctrl+click on the respective hyperlink, which will open the https://taxinformation.cbic.gov.in page. On clicking GST option on the Menu bar, ‘Information-GST’ page will appear, below which the option of Act, Rules, Forms, Notification, etc. is provided. The required page of the relevant provision/Form/Circular/Notification can be seen by clicking the appropriate option.
1.5 The taxable event under the Goods and Services Tax (GST) law is ‘supply’ of goods or services or both. That is, GST is payable when a person supplies goods or services or both to another person. The person supplying goods and/or services, called as ‘supplier’, has to pay the tax into the Government account by following the procedure laid down in the CGST Rules, 2017. The person liable to pay tax is commonly referred as ‘taxpayer’.
1.6 Under the GST law, self-assessment of the tax payable on supply of goods or services or both is provided under Section 59 of the CGST Act, 2017. Periodical returns, as specified under Section 39 of the CGST Act, 2017 has to be furnished by the taxable person for each tax period by the taxpayer, declaring the details of supplies made, its value, tax payable, input tax credit availed, tax paid, etc. The returns filed by the taxpayer depict the compliance of tax payment for the relevant period. (Section 59 of CGST Act, 2017) (Section 39 of CGST Act, 2017)
1.7 Under self-assessment, there is a possibility of short-payment or non-payment of tax or incorrect availment of input tax credit by the taxpayer on account of various factors like incorrect rate of tax applied due to wrong classification of the supply, incorrect valuation, availing inadmissible exemption, availing inadmissible input tax credit, etc. There can be a case of erroneous refund of any amount to the taxpayer, which otherwise was not due to him. Further, there may be cases where, by reason of fraud, or willful-misstatement or suppression of facts, the tax amount has not been paid or short paid or input tax credit has been wrongly availed or utilized, with intent to evade tax, which has eventually led to improper discharge of the tax liability. Most common reasons leading to improper discharge of tax liability are –
- Mismatch in details reported in GSTR-1 Return and GSTR-3B Return;
- Difference in Input tax credit claims made in GSTR-3B vis-a-vis GSTR-2B/2A;
- Delay in filing of GSTR-1 and GSTR-3B:
- Inconsistent declaration in GSTR-1 and e-way bill portal;
- Inconsistencies in reporting of Exports in GSTR-1 with information available on ICEGATE. For example, Shipping Bill or the Bill of export lodged on ICEGATE but not reported in GSTR-1;
- Non-payment of GST liability (tax) or the short-payment of the tax with or without the intent to defraud;
- GST Refund is wrongly made with or without the intent to defraud;
- The input tax credit is wrongly availed or utilized;
- Where a business is liable to obtain GST registration but has failed and not discharged the tax and other liabilities under the CGST Act, 2017;
1.8 The above-mentioned short payment or non-payment of tax or wrongly availed/ utilized input tax credit or erroneous refund can be detected by carrying out verification of the correctness of self-assessed tax, by conducting scrutiny of returns or during the course of Audit conducted on the records of the taxpayer or during enquiry or investigation initiated against the taxpayer.
1.9 Central Goods and Services Tax (GST) Act, 2017, authorizes the Proper Officer to demand and determine the following amounts:
(i) A tax which is not paid (Section 73 and Section 74)
(ii) A tax which is short paid (Section 73 and Section 74)
(iii) A tax which is erroneously refunded (Section 73 and Section 74)
(iv) Wrongly availed Input Tax Credit (Section 73 and Section 74)
(v) Wrongly utilized Input Tax Credit (Section 73 and Section 74)
(vi) A tax which is collected but not paid (Section 76)
(vii) A tax which is collected under the wrong head (Section 77).
1.10 Action to be taken under the provisions of GST law for recovery of the amount of tax not paid or short paid or Input Tax Credit wrongly availed/ utilized or amount erroneously refunded involves two major steps – to demand such amount by issuing a Show Cause Notice and then to determine the amount of tax, interest and penalty payable by adjudicating the Show Cause Notice, i.e. by passing an Order after following the prescribed procedure. If any short-payment or non-payment of tax or incorrect availment or utilization of input tax credit or erroneous refund of tax to the taxpayer is noticed during the above-mentioned verification, then such short-paid or not-paid tax or wrongly availed input tax credit or erroneous refund of tax shall be demanded from the taxpayer along with applicable interest by following the due process prescribed under the CGST Act, 2017 and the CGST Rules, 2017.
1.11 Section 73 of the CGST Act, 2017 is the relevant legal provision for demand and determination of the tax short-paid or not-paid or wrongly availed input tax credit or erroneously refunded amount, in cases not involving fraud or willful misstatement or suppression of facts. In cases involving fraud or willful misstatement or suppression of facts, such amount has to be demanded and determined under the provisions of Section 74 of the CGST Act, 2017. (Section 73 of CGST Act, 2017) (Section 74 of CGST Act, 2017)
1.12 There can be situations where the taxpayer has collected the tax amount from the recipient of goods and/or services, i.e. their customers, but the same is not deposited into the Government account. In such cases, the amount of tax collected but not paid or deposited in the Government account is required to be demanded and determined under Section 76 of the CGST Act, 2017. (Section 76 of CGST Act, 2017)
2. DEMAND OF TAX
2.1 CGST Act, 2017, authorizes the ‘Proper Officer’ (please refer Para 5 below) to demand and determine the amount of tax not paid or short paid, wrongly availed/utilized Input Tax Credit, tax erroneously refunded and tax collected but not paid. The proper officer has to act as per the provisions of Sections 73, 74 and 76 of the CGST Act, 2017, relevant to the case.
2.2 The Proper Officer, has to send a show cause notice prescribed under Rule 142 of the CGST Rules, 2017, to the person liable to pay the tax. The Demand Notice contains information regarding the amount of tax owed, the reason for the demand, and the period within which the tax must be paid. The Proper officer has to follow the online procedures as illustrated in para 6 below. Process-flow is as under: (Rule 142 of CGST Rules, 2017)
3. PRE-NOTICE COMMUNICATION OF DEMAND
3.1 Before the issuance of a notice online in Form GST DRC-01, the Proper Officer has to communicate online through the common portal the details of tax liable to be demanded under Section 73(1) or Section 74(1) or 76(2) of CGST Act, 2017, as the case may be, in Part A of FORM GST DRC-01A prescribed in Rule 142(1A) of CGST Rules, 2017 so as to make the taxpayer aware of the duty demanded. The provision of pre-notice communication is optional w.e.f. 15.10.2020. (Rule 142(1A) of CGST Rules, 2017)
4. REPLY TO PRE-NOTICE COMMUNICATION OF DEMAND
4.1 The person to whom the above said intimation has been sent, has the option to reply in Part B of FORM GST DRC-01A online through the common portal.
5. SHOW-CAUSE NOTICE
5.1 On receipt of reply from the person in Part B of FORM GST DRC-01A or if no reply is received within the given time, the Proper Officer shall serve the Summary of the notice in FORM GST DRC-01 along with a Show Cause Notice to the person liable to pay tax. The Show Cause Notice should contain the details of the case, the legal provisions applicable, the amount of tax demanded, interest payable under Section 50 of CGST Act, 2017 and penalty imposable under the relevant provisions of the Act.
5.2 CBIC vide Instruction No. 04/2023-GST, dated 23.11.2023, issued under F. No. 20016/41/2023-GST, has directed that the Summary of the notice in FORM GST DRC-01 shall be served electronically on the common portal.
5.3 A Show Cause Notice (SCN) should ideally comprise of the following parts, though it may vary from case to case:
(a) Introduction of the case;
(b) Legal frame work;
(c) Factual statement and appreciation of evidences;
(d) Discussion, facts and legal frame work relating thereto;
(e) The period to which the Notice pertains to and the discussion on Limitation period, if applicable;
(f) Calculation of tax amount payable and other amounts due, such as interest, penalty etc.;
(g) Statement of charges-exact nature of violation of law, rules or safeguards etc.
5.4 The notice under Section 73 of the CGST Act, 2017, shall be served to the concerned taxpayer at least three months prior to the due date for issuance of the adjudication order specified under Section 73(10) of the CGST Act, 2017. The due date for issuance of the adjudication order is within three years from the due date for furnishing the Annual Return for the financial year to which the demand pertains or within three years from the date of erroneous refund. (Section 73(10) of the CGST Act, 2017)
5.5 The notice under Section 74 of the CGST Act, 2017 shall be served to the concerned taxpayer six months before the due date for issuance of an adjudication order under Section 74(10) of the CGST Act, 2017. The due date for issuance of the adjudication order under Section 74(10) is within five years from the due date for furnishing of Annual Return for the relevant financial year to which the demand pertains. (Section 74(10) of the CGST Act, 2017)
5.6 In the demand portion, the tax amount pertaining to Central Tax (CGST), State Tax (SGST), Integrated Tax (IGST) and Compensation Cess, as applicable, are required to be clearly indicated. The breakup of each of the applicable taxes should be clearly shown either in the Annexure to the SCN or in a table inside the SCN.
5.7 The amount of demand should be clearly indicated in words as well as in figures.
5.8 The Relied Upon Documents should be clearly indicated and listed in an Annexure in the SCN.
5.9 In case the taxpayer has paid the entire duty amount and the SCN is being issued for interest and/or penalty then in this case, first the duty has to be demanded and then the taxpayer has to be asked to show cause as to why the amount (to be specified) already paid should not be appropriated against the tax demanded. Similarly, if the amount has been paid along with interest and the SCN is being issued only for penalty then duty and interest should first be demanded and then the amount paid should be appropriated against the tax demand and interest.
6. SUMMARY STATEMENT (DRC-02)
As per Section 73(3) and Section 74(3) of the CGST Act, 2017, where a Show Cause Notice has been issued for any period by the Proper Officer demanding tax under Section 73(1) or Section 74(1), he may serve a statement in FORM GST DRC-02, electronically on common portal containing all the details relating to the taxes short paid or not paid or input tax credit wrongly availed or utilized, as the case may be, for the period other than the period included in the Show Cause Notice already issued on a particular ground. Service of such statement shall be deemed to be the service of show cause notice on such persons, when the grounds involved in the show cause notice issued earlier and the present statement covering further period are same. Such notices are commonly called as periodical demand notices. (Section 73(3) and 74(3) of CGST Act, 2017)
7. PAYMENT OF TAX BEFORE ISSUANCE OF SCN OR ORDER
7.1 A taxpayer has the option of payment of tax dues before issuance of SCN and/or order, as discussed below.
PAYMENT OF TAX BEFORE ISSUANCE OF SCN OR ORDER
7.2 If any person pays tax dues along with interest on the delayed payment of that tax, before the issuance of show cause notice, either on his own or on the direction of the proper officer and informs the proper officer in writing, then as per Section 73(6) of the CGST Act, 2017, no show cause notice shall be issued for such tax dues or the penalty payable. (Section 73(6) of CGST Act, 2017)
7.3 If the person to whom show cause notice demanding tax under Section 73 of the CGST Act, 2017 has been issued, pays the tax along with interest on the delayed payment of that tax, within a period of thirty days from the date of issue of the said show cause notice, then as per Section 73(8) of the CGST Act, 2017, penalty shall not be imposed and all the proceedings against that person relating to the said show cause notice shall be considered as concluded. (Section 73(8) of CGST Act, 2017)
7.4 The person chargeable with tax may pay the tax dues on the basis on his own or on the direction of the Proper Officer, before the issuance of show cause notice, along with the applicable interest for the delayed payment of tax and also pay penalty equivalent to 15% of the tax amount and inform the Proper Officer about such payment. As per Section 74(6) of the CGST Act, 2017, the Proper Officer shall not serve any notice in respect of the tax so paid or any penalty payable. (Section 74(6) of CGST Act, 2017)
7.5 If the person to whom show cause notice demanding tax under Section 74 of CGST Act, 2017 has been issued, pays the tax dues along with interest on the delayed payment of that tax and penalty equivalent to 25% of the tax dues, within a period of thirty days from the date of issue of the said show cause notice, then as per Section 74(8) of the CGST Act, 2017, all the proceedings against that person relating to such show cause notice shall be considered as concluded. (Section 74(8) of CGST Act, 2017)
8. INTIMATION OF PAYMENT OF TAX
8.1 As mentioned in para 7 above, if the person charged with non-payment of tax pays the tax and interest in accordance with Section 73(5) or 73(8) of the CGST Act, 2017 or the tax, interest and penalty in accordance with Section 74(5) or 74(8) of the CGST Act, 2017, either on his own or as communicated by the Proper Officer, then he shall inform about such payment in FORM GST DRC-03. (Section 73 and 74 of CGST Act, 2017)
9. ACKNOWLEDGEMENT OF VOLUNTARY PAYMENT BY TAXPAYER
Whenever any person makes payment of dues and informs in FORM GST DRC-03, the Proper Officer shall issue an acknowledgement accepting the payment in FORM GST DRC-04 prescribed in Rule 142(2) of CGST Rules, 2017. If only partial payment of the amount payable, communicated in FORM GST DRC-01A, is made then such person chargeable for non-payment of tax shall make his submission in Part B of FORM GST DRC-01A, mentioned above.(Rule 142(2) of CGST Rules, 2017)
10. INTIMATION OF CONCLUSION OF PROCEEDINGS ON PAYMENT BY Taxpayer
If the person, to whom demand notice has been issued, makes payment as per Section 74(8) of the CGST Act, 2017 within 30 days of the service of the show cause notice or where the concerned person makes payment of penalty in terms of Section 129(1) of the CGST Act, 2017 within 14 days of detention or seizure of the goods and conveyance, then such person shall intimate to the Proper Officer about such payment in FORM GST DRC-03 and the Proper Officer shall issue order in FORM GST DRC-05 concluding the proceedings in respect of such notice. (Refer Rule 142(3) of the CGST Rules, 2017) (Section 74 (8) and 129 of CGST Act, 2017) (Rule 142(3) of CGST Rules, 2017)
11. OVERVIEW: ADJUDICATION OF SHOW CAUSE NOTICE (DETERMINATION OF TAX PAYABLE)
12. REPLY BY TAXPAYER TO THE NOTICE
The representation or the reply to the Show Cause Notice issued in FORM GST DRC-01, shall be furnished by the Taxpayer in FORM GST DRC-06. (Refer Rule 142(4) of CGST Rules, 2017) (Rule 142(4) of CGST Rules, 2017)
13. ADJUDICATION OF SHOW CAUSE NOTICE
13.1 The Proper Officer shall grant personal hearing, if the noticee (person to whom the show cause notice is issued) so desires, otherwise also, Proper Officer may give opportunity of personal hearing. The Proper Officer shall determine the tax payable after considering all submissions made by the noticee and pass suitable Adjudication Order, as prescribed under Section 73(9) or Section 74(9) of the CGST Act, 2017. (Section 73(9) and 74(9) of CGST Act, 2017)
13.2 The show cause notice pertaining to demand of tax or wrongly availed or utilized input tax credit issued under Section 73 of the CGST Act, 2017, shall be adjudicated within three years from the due date of filing of the Annual Returns for the relevant financial year. If the case is related to the erroneous refund received by the Taxpayer, the case shall be adjudicated within three years from the date when the erroneous refund was credited in the account of the Taxpayer. (Refer Section 73(10) of the CGST Act, 2017) (Section 73(10) of CGST Act, 2017)
13.3 The show cause notice pertaining to demand of tax and/or wrongly availed or utilized input tax credit issued under Section 74 of the CGST Act, 2017, involving suppression of facts or willful misstatement or fraud, etc. shall be adjudicated within a period of five years from the due date of filing of the Annual Returns for the relevant financial year. If the case is related to erroneous refund received by the Taxpayer, involving suppression of facts or willful misstatement or fraud, etc. the case shall be adjudicated within the period of five years from the date when the erroneous refund was credited in the account of the Taxpayer. (Refer Section 74(10) of the CGST Act, 2017). (Section 74(10) of CGST Act, 2017)
13.4 The show cause notice issued under Section 76 of the CGST Act, 2017, shall be adjudicated within one year from the date of issue of the show cause notice. (Refer Section 76(6) of the CGST Act, 2017) (Section 76(6) of CGST Act, 2017)
13.5 The Summary of the Adjudication Order shall be uploaded electronically in FORM GST DRC-07, prescribed under Rule 142(5) of the CGST Rules, 2017, specifying the amount of tax, interest and penalty payable by the person. Such an order shall be treated as the notice for recovery. (Rule 142(5) of CGST Rules, 2017)
14. RECTIFICATION OF ADJUDICATION ORDER
14.1 The provisions of Section 161 of the CGST Act, 2017 provide for rectification of the error, which is apparent on the face of record in any decision or order or notice or certificate or any other document, by the authority who has issued or passed such order or decision or notice, either on his own or on being brought to his notice. (Section 161 of CGST Act, 2017)
14.2 The rectification has to be done within six months from the date of issue of the decision or order or notice or certificate. The limitation of six months will not apply if the rectification is in the nature of correction of clerical or arithmetical error.
14.3 If the rectification adversely effects any person, then the principles of natural justice shall be followed by the authority.
14.4 As specified in Rule 142(7) of the CGST Rules, 2017, if a rectification order is passed under the provisions of Section 161 of the CGST Act, 2017 or where an order uploaded on the system is withdrawn, a summary of the rectification order or the withdrawal order shall be uploaded electronically by the Proper Officer in FORM GST DRC-08. (Rule 142(7) of CGST Rules, 2017)
15. PROPER OFFICER UNDER SECTION 73 &74 OF THE CGST ACT, 2017 AND THE IGST ACT, 2017
15.1 Vide Circular No. 3/3/2017-GST dated 05.07.2017, the Deputy or Assistant Commissioner of Central Tax is assigned as the Proper Officer under sub-sections (1), (2), (3), (5), (6), (7), (9) and (10) of Section 74 of the CGST Act, 2017 and the Superintendent of Central Tax is assigned as the Proper Officer under sub-sections (1), (2), (3), (5), (6), (7), (9) and (10) of Section 73 of the CGST Act, 2017. This Circular was partially modified vide Circular No. 31/05/2018-GST dated 09.02.2018, wherein Superintendent of Central Tax is also empowered to issue show cause notices and orders under Section 74 of the CGST Act, 2017. (Circular No. 3/3/2017-GST dated 05.07.2017) (Circular No. 31/05/2018-GST dated 09.02.2018)
15.2 Thus, all officers up to the rank of Additional/Joint Commissioner of Central Tax have been assigned as the Proper Officer for issuance of show cause notices and order under sub-sections (1), (2), (3), (5), (6), (7), (9) and (10) of Section 73 and 74 of the CGST Act, 2017 and under IGST Act, 2017.
15.3 Monetary limits, as indicated in the Table below, for different levels of officers of Central Tax have been prescribed under the above said Circular No. 31/05/2018-GST dated 09.02.2018, to act as Proper Officer in relation to issue of show cause notice and orders under Section 73 and 74 of the CGST Act, 2017 and under Section 20 of the IGST Act, 2017:
| S r . No. | Officer of Central
Tax |
Monetary limit of the amount of Central Tax (including Cess) not paid or short paid or erroneously refunded or input tax credit of Central Tax wrongly availed or utilized for issuance of show cause notices and passing of orders under Section 73 and 74 of CGST Act, 2017 | Monetary limit of the amount of Integrated Tax (including Cess) not paid or short paid or erroneously refunded or input tax credit of Integrated Tax wrongly availed or utilized for issuance of show cause notices and passing of orders under Section 73 and 74 of CGST Act, 2017 made applicable to matters in relation to Integrated Tax vide Section 20 of the IGST Act, 2017 | Monetary limit of the amount of Central Tax and Integrated Tax (including Cess) not paid or short paid or erroneously refunded or input tax credit of Central Tax and Integrated Tax wrongly availed or utilized for issuance of show cause notices and passing of orders under Section 73 and 74 of CGST Act, 2017 made applicable to matters in relation to Integrated Tax vide Section 20 of the IGST Act, 2017 |
| 1. | Superintendent of Central Tax | Not exceeding Rs. Ten Lakhs | Not exceeding Rs. Twenty Lakhs | Not exceeding Rs. Twenty Lakhs |
| 2. | Deputy or Assistant Commissioner of Central Tax |
Above Rs. Ten lakhs and not exceeding Rs. One Crore | Above Rs. Twenty lakhs and not exceeding Rs. Two Crore | Above Rs. Twenty lakhs and not exceeding Rs. Two Crore |
| 3. | Additional or Joint Commissioner of Central Tax |
Above Rs. One Crore without any limit | Above Rs. Two Crore without any limit | Above Rs. Two Crore without any limit |
15.4 The show cause notices issued on similar issues to noticee(s) and made answerable to different levels of Adjudicating authorities within a Commissionerate, shall be adjudicated by the Adjudicating authority competent to decide the case involving the highest amount of Central Tax and/or Integrated Tax (including Cess).
15.5 As per Circular No. 169/01/2022-GST dated 12.03.2022, the Central Tax Officers of Audit Commissionerates and Directorate General of Goods and Services Tax Intelligence (DGGI) shall exercise powers only to issue show cause notices. Such show cause notices will be adjudicated by the competent Central Tax Officer of the Executive Commissionerate in whose jurisdiction the noticee is registered when such cases pertain to jurisdiction of one Executive Commissionerate of Central Tax only. (Circular No. 169/01/2022-GST dated 12.03.2022)
15.6 In respect of Show cause notices issued by DGGI wherein the principal place of business of the noticees fall under jurisdiction of multiple Central Tax Commissionerates or where show cause notices are issued on the same issue to different noticees, including the persons having the same PAN but different GSTINs falling under jurisdiction of multiple Central Tax Commissionerates, the Additional/Joint Commissioners of specified Commissionerates have been empowered with All India jurisdiction vide Notification No. 02/2022-Central Tax, dated 11.03.2022 to adjudicate such show cause notices, irrespective of the amount involved. The show cause notice(s) shall be made answerable by the officers of DGGI to the concerned Additional/Joint Commissioners of Central Tax, as mentioned in the Table provided in the said Circular dated 12.03.2022 and shall be adjudicated by the Additional/Joint Commissioner of Central Tax Officer holding charge of adjudication of the Central Tax Commissionerate mentioned in the said Table of Circular dated 12.03.2022, in whose jurisdiction the principal place of business of the noticee from whom the highest demand of Central Tax and or Integrated tax (including Cess) has been made, falls. (Notification No. 02/2022-Central Tax, dated 11.03.2022)
15.7 CBIC vide Notification No. 56/2023–Central Tax dated 26.12.2023 has extended the time limit specified under Section 73(10) of the CGST Act, 2017 for issuance of order under Section 73(9) of the CGST Act, 2017, for recovery of tax not paid or short paid or of input tax credit wrongly availed or utilized for any reason, other than the reason of fraud or any willful-misstatement or suppression of facts to evade tax, in respect of a tax period for FY 2018-19 and 2019-20 as specified below (Notification No. 56/2023–Central Tax dated 26.12.2023):
(i) for the financial year 2018-19, up to the 30th April, 2024
(ii) for the financial year 2019-20, up to the 31st August, 2024.
16. MODE OF SERVICE OF NOTICE/ORDER
16.1 Section 169 of the CGST Act, 2017 prescribes the following mode of service of any decision, order, summons, notice or other communication under the CGST Act, 2017 and the rules made thereunder (Section 169 of CGST Act, 2017) –
(i) By tendering it directly or by a messenger, courier to the addressee, to the taxpayer/ manager/ authorized representative/ advocate/ tax practitioner holding authority to appear in the proceeding/ person regularly employed in connection with the business/ to any adult member of family residing with the taxable person;
(ii) By registered post or speed post or courier with acknowledgement due, to the person for whom it is intended or his authorized representative, if any, at his last known place of business or residence;
(iii) By sending a communication to his e-mail address provided at the time of registration or as amended;
(iv) By making it available on common portal;
(v) By publication in a newspaper circulating in the locality in which the taxable person or the person to whom it is issued last resided or carried on business or personally worked;
(vi) By affixing it in some conspicuous place at his last known place of business or residence and if such mode is not practicable for any reason, then by affixing a copy thereof on the notice board of the office of the concerned officer or authority who passed such decision or order or issued such summons or notice.
17. GENERAL PROVISIONS REGARDING DETERMINATION OF TAX
17.1 Section 75 of the Central Goods and Services Tax Act, 2017 deals with the general provisions regarding the determination of tax. (Section 75 of CGST Act, 2017)
17.2 When Appellate Court stays the issuance of the show cause notice or order by the officer, for computing the limitation period under Section 73(2) and Section 73(10) or Section 74(2) and Section 74(10) of the CGST Act, 2017, the period till the issuance of notice or order under stay shall be excluded.
17.3 When the charges under Section 74(1) of CGST Act, 2017 relating to willful misstatement or fraud or suppression of facts to escape the tax is not established against the person to whom show cause notice has been issued by the Appellate Authority or Tribunal of the Court, the Proper Officer shall determine the tax payable by such person, deeming the notice as a show cause notice under Section 73(1) of CGST Act, 2017.
17.4 When Appellate Authority, Court or Tribunal passes any direction and an order is required to be passed in relation to that direction, then such order shall be passed within two years from the date of communication of such direction.
17.5 When any adverse decision is being contemplated against the person liable for tax or penalty and such person requests in writing that he should be heard, the authority may provide him with an opportunity of being heard. Further, if he shows sufficient cause, his hearing may be adjourned or time may be granted to him.
17.6 The amount of tax, penalty and interest determined in the Adjudication order shall not exceed the amount demanded in the show cause notice. Moreover, the grounds in the decision or order and the grounds in the show cause notice must be the same.
17.7 The summary of the order issued under Section 75 of the CGST Act, 2017 shall be uploaded electronically in FORM GST DRC-07.
17.8 Interest on the short paid/not paid tax shall be payable by the person whether or not specified in the order determining the tax liability.
17.9 If the Adjudication order is not issued within three years, as provided under Section 73(10) or five years as provided under Section 74(10), then the proceeding shall be deemed to be concluded.
17.10 Where any amount of tax assessed in a return furnished under Section 39 of the CGST Act, 2017 by the taxpayer remains unpaid, either wholly or partly, or any amount of interest payable on such tax remains unpaid, the same shall be recovered in the manner prescribed under Section 79 of CGST Act, 2017. (Section 79 of CGST Act, 2017)
17.11 It is pertinent to mention here that penalty under Section 73(9) and 74(9) of the CGST Act, 2017, as applicable, is liable to be imposed in cases where determination of tax not paid or short paid has been ordered. Therefore, if penalty has been imposed on a person under Section 73 or Section 74 of the CGST Act, 2017 then no penalty for the same act shall be imposed on that person under any other provision of CGST Act, 2017.
17.12 Clarification regarding applicability of the provisions of Section 75(2) of the CGST Act, 2017 and its effect on limitation has been provided in CBIC Circular No. 185/17/2022-GST dated 27.12.2022. (Circular No. 185/17/2022-GST dated 27.12.2022)
18. INSTRUCTIONS/CIRCULARS RELEVANT TO THIS CHAPTER
(i) Instruction No. 04/2023-GST, dated 23.11.2023 issued under F. No. 20016/41/2023-GST.
(ii) Circular No. 3/3/2017-GST dated 05.07.2017.
(iii) Circular No. 31/05/2018-GST dated 09.02.2018,.
(iv) Circular No. 169/01/2022-GST dated 12.03.2022.
(v) Circular No. 185/17/2022-GST dated 27.12.2022.
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Source: Handbook of GST Law and Procedures for Departmental Officers issued by Ministry of Finance
