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Clarification w.r.t recovery of self assessed tax w.e.f 01.01.2022-

Hello readers, back after long time —so lets us discuss today amendment made vide Section 114 of the Finance Act 2021, w.e.f 01.01.2022

The CBIC vide  Notification No. 39/2021 – Central Tax dated 21st December, 2021 notified the below mentioned amendments made vide Section 114 of the Finance Act, 2021 w.e.f. January 01, 2022-

New explaination was introduced in Sec 75(12) but before that we must know current provisions-

Section 75(12)-  Notwithstanding anything contained in section 73 or section 74, where any amount of self-assessed tax in accordance with a return furnished under section 39 remains unpaid, either wholly or partly, or any amount of interest payable on such tax remains unpaid, the same shall be recovered under the provisions of section 79.

Now following explaination shall be inserted-

“Explanation.––For the purposes of this sub-section, the expression “self-assessed tax” shall include the tax payable in respect of details of outward supplies furnished under section 37, but not included in the return furnished under section 39.”

Analysis- Explaination has been inserted to clarify that ‘’self-assessed tax’’ shall include tax payable in respect of outward supplies- I.e GSTR-1 –U/S 37 of CGST ACT 2017 but not GSTR-3B U/S 39 of CGST ACT 2017

But point is that section 75(12) starts with notwithstanding anything contained in Section 73 or 74-that means recovery proceedings in case of difference between tax liability (SELF ASSESSED TAX) declared in GSTR-1 & GSTR-3B can be initiated straightway u/s 79 (i.e detaining/selling goods belonging to defaulter, selling immovable property of defaulter etc) without even resorting to proceedings u/s 73 or section 74 of CGST ACT 2017

GST Clarification w.r.t recovery of self assessed tax w.e.f 01.01.2022

Now question comes in my mind that GSTR-1 cannot be rectified so if there is clerical mistake in uploading invoices in GSTR-1 due to which there is huge difference in output tax liability  declared in GSTR-1 & GSTR—3B and then  department staraightway attach your immovable property/bank accounts without issuing any show cause notice u/s 73 or 74 ….

Take an example- Total output tax liability declared in GSTR-1 – Rs 500000 but actual it was Rs 50000 correctly reported in GSTR-3B, now department can staraighway recover differencial amount Rs 450000 u/s 79 without issuing any show cause notice u/s 73 or 74

Is this amendment justified????

Queries/doubts mailed at [email protected]

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